Annual / Quarterly Financial Statement • Jun 23, 2009
Annual / Quarterly Financial Statement
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Fiscal year 2008/09.
| Consolidated Financial Statements as of 31 March 2009 | |
|---|---|
| (extract from the Annual Report for fi scal year 2008/09) | |
| • Mangement Report | 3 |
| • Statement of all Members of the Management Board pursuant to Section 82 Para. 4 No. 3 BörseG (Austrian Stock Exchange Act) |
16 |
| • Consolidated Financial Statements as of 31 March 2009 | 17 |
| • Auditor's Report | 67 |
This document is a partial translation into English of the annual fi nancial report ("Jahresfi nanzbericht") made in the original in German. The German document is authoritative. In particular, this document includes not all information on the stand alone fi nancial statements of Kapsch Traffi cCom AG contained in the German original.
The beginning of the last fi scal year was marked by the ongoing fi nancial crisis. This crisis started in the U.S.A. and was triggered by the end of the real estate boom. Due to the worldwide distribution of securitized real estate loans in many portfolios, numerous banks outside the U.S.A. were also affected by massive depreciations, resulting in a global fi nancial crisis in which the banks subsequently lost confi dence in each other. Massive excesses on the commodity markets – especially in the price of crude oil – exacerbated this crisis. These warnings of scarce commodities and the associated infl ationary tendencies therefore required higher interest rates and tighter controls on the issuing of credit ensued. The crisis therefore gradually impacted the real economy in the second half of 2008 as uncertainty grew and investments declined. This also led to an abrupt decline in the prevailing infl ationary pressure as well as to a clear correction of commodity prices.
The international economy is now experiencing its worst crisis since the Great Depression of the 1930s, even if two events are not comparable. The U.S.A., Western Europe and Japan have since slid into recession and the rapidly growing People's Republic of China and the countries of Eastern Europe have also felt the full force of the crisis. Many producers around the world have thus come under pressure and have had to drastically cut their capacities, which has already had a negative impact on the labor market and is likely to worsen even further. This fall in demand was particularly noticeable early on in the automotive and automotive supplier industries, which led to massive problems around the world for companies in this leading sector.
Alongside the original catalyst – the overheating of the U.S. real estate market – other reasons for the severity of this global economic crisis are macroeconomic imbalances, fl aws in incentive systems, fl aws in risk management systems as well as regulatory and coordination failures.
Although national, regional and international economic policy – in complete contrast to previous crises – has tended to react correctly and has contributed measures to soften the impact of the crisis, the question of how long it will continue cannot be answered with any degree of certainty. In the meantime, a steady stream of reports of improved indicators, especially from the U.S.A., at least allows us to conclude that the pace of the recession is slowing. Nevertheless, both the timing and the speed of recovery in the real economy remain completely unknown. It can be assumed, however, that the crisis will have different durations for the stock market, production and employment and that the recovery will only take place gradually. Discussions on economic dynamism and long-term negative or positive social changes as a result of the crisis also appear speculative, albeit there is hope that necessary steps will be taken and lessons will be learned from the wrongdoings of individual persons.
The U.S.A. is currently in the midst of a crisis of historic size, in which more than 25 banks have already closed, millions of houses have been subject to foreclosure proceedings and the major car manufacturers are in serious risk of bankruptcy. The new U.S. government has therefore passed additional stimulus packages in addition to the unique action taken to rescue the fi nancial industry (banks, investment companies and insurance companies). The aim is to get the crisis under control and further stimulate the economy to avoid the loss of millions of jobs. Experts expect the unemployment rate to rise from 7.2 % (December 2008) to 9 %
in 2009. The battle against the crisis is naturally leading to a massive increase in the indebtedness of the United States' national fi nances. The defi cit for 2009 is expected to be around 13 % of GDP, or USD 1.8 trillion, and forecasts for the next few years also predict additional massive defi cits.
As a further measure to combat the crisis, the U.S. Federal Reserve reduced its prime interest rate to between 0 and 0.25 %; its lowest level ever. The U.S. dollar also refl ects developments in the real economy. In the summer of 2008, the Euro stood at USD 1.60; at the end of the fi scal year it stood at about USD 1.30, which of course was primarily due to the developing economic crisis in the Euro zone.
The People's Republic of China was also affected by the crisis in the second half of 2008, as its exports to the U.S.A. and Europe fell sharply. This prompted China to respond to the threat with an enormous stimulus package. Economic growth is expected to fall to between 5 and 6 % in 2009 – the country is expected to avoid the recession being experienced by Western industrialized nations.
Following the fi nancial crisis, which required the initiation of unprecedented bank rescue measures, Europe was also affected by the crisis in the real economy beginning in the second half of 2008. The economic forecasts have since been continuously adjusted downwards and they all predict a severe recession for 2009 in the meantime that can be traced to the sharp decline in exports, which in turn is causing manufacturing businesses to curb their investment activities. The collapse in growth is expected to be 5.4 % in Germany as the leading nation and as much as 9 % in Ireland. The ECB has since reduced the European prime interest rate to 1.0 %. The unemployment rate in the Euro zone is expected to rise to 9.9 % in 2009 and to as much as 11.5 % in 2010.
The implemented stimulus packages and rising unemployment numbers will in turn have a massive impact on national budgets. The latest forecasts predicted that only Finland, Luxembourg and Cyprus would stay below the defi cit limit of 3 % stipulated in the Maastricht Treaty. The levels for Germany are predicted to be 3.9 % for the current year and as much as 5.9 % for 2010.
In Eastern Europe, the growth rates of recent years (including 2008), which were far above those of Western Europe, are now anticipating a dramatic decline in 2009. Apart from the declines in the relatively large industrial sector (mainly contributed to by the close interrelationship with U.S.A. and Western European banks and companies), the countries of Central and Eastern Europe (CEE) also suffered a double hit due to their signifi cant fi nancing defi cits overseas. Experts assume, however, that GDP forecasts for this region are below potential and that most of the regional currencies are currently undervalued. To this extent, CEE countries, which exhibit only minor external fi nancing gaps in relation to GDP (Poland, Czech Republic, Turkey), can at least be viewed as neutral, while the currencies in countries such as Bulgaria, Ukraine, Hungary and the Baltic states should continue to be viewed with extreme caution.
While Austria posted growth in GDP in the fi rst three quarters of 2008, the economy fell into recession in the last quarter of 2008, resulting in GDP growth for the year of just 1.8 %. The global collapse in economic activity hampered the domestic export economy as well as industry. While export growth in 2007 was still far above 8 %, it was just 2.0 % in 2008 and could fall by 5 % in 2009. Growth in investments will also fall for the fi rst time in many years by 3 to 4 %, from +4.7 % in 2007 and +1.8 % in 2008. Sustained, albeit at a lower level, consumption by private households can currently be described as a small stabilizing factor. Pessimism and current or looming unemployment will probably lead to further tightening of the purse strings. During this phase, tax reform can help to avoid weak growth in private consumption from worsening even further.
Recent forecasts suggest that the stabilization originally expected in the second half of the year seems even less likely, as Austria is now expected to see a drop in growth of 4.0 % in 2009, which corresponds to the average rate of decline for the Euro zone as a whole. The Austrian economy is only expected to recover in 2010, with a slight fall in economic output of 0.1 %. The EU Commission expects the budget defi cit in Austria to rise from 4.2 % this year to as much as 5.3 % in 2010.
The phase of rising employment and falling unemployment also started to come to an end on the labor market in the second half of 2008. According to Eurostat, the unemployment rate in Austria accelerated to 5.0 % this year and is expected to reach as much as 5.8 % next year after 3.8 % in 2008. Infl ation is expected to remain at a low level in 2009 (1.1 %) and in 2010 (1.3 %).
According to analyses of the EU (European Union 2006, "Energy & Transport in Figures"), total freight traffi c increased by 2.8 % p.a. and in the aggregate by 31.3 % between 1995 and 2005. The rise in road freight traffi c amounted to 3.3 % p.a. and in the aggregate by 37.9 %. Despite political pressure, efforts to shift freight traffi c to rail and/or waterways failed.
For the TEN-V (Trans-European road Network), which in 2005 at a total length of 84,700 km accounted for approximately a quarter of the total primary road network, yet carried 40 % of the road freight traffi c, an average extension of 4,800 km p.a. is expected until 2020, 3,500 km of which are made up by existing roads. High investment requirements have been determined in particular for the new member states and the transport corridors to these countries. In its "White Paper: European transport policy for 2010" the European Commission estimated that investment costs until 2020 will amount to EUR 600 billion. The rising number of vehicles requires additional funds in order to maintain the existing infrastructure and expand it accordingly to meet the growing needs. The current economic crisis has also affected the area of infrastructure development and traffi c telematics. While expectations for growth in traffi c remain high in the long term, the recession led to a reduction of traffi c and as a result to a reduction of revenues.
Subject to individual requirements, satellite-based systems are used in addition to DSRC (dedicated short-range communication) based systems, which operates on the CEN 5.8 GHz standard. Considerable growth potential is also expected from the videobased automatic number plate recognition (ANPR) technology for the enforcement and road user charging/tolling of urban environments.
In urban environments, efforts are being made to reduce environmental pollution and traffi c through city charging/tolling systems. In particular, Italy is trying to counter the environmental pollution in the cities with automated access restrictions to the historic city centers.
The volume of traffi c is rising not only in Europe, but as a general trend worldwide. Particularly in Asian countries, increased demand for additional ETC lanes in previously traditional manual tolling systems is expected. With 3.38 million km in 2004, the road network in India ranks among the largest in the world. Only 2 % thereof account for national highways that, however, carry 40 % of the road freight traffi c. In China, 52,000 km of highways were constructed between 1992 and 2002 and an additional 200,000 km are being planned.
The high funding requirements for the maintenance of the road infrastructure in the U.S.A. (Standard & Poor's research estimates that until 2020 USD 92 billion would have to be spent each year for the maintenance of highways and bridges and an additional USD 125.6 billion for their improvement) will lead to changed business models and the emergence of private concession models in the near future. Whereas in Europe DSRC technology prevails, which operates in the 5.8 GHz range, ETC systems in North America currently operate at a frequency of 915 MHz based on proprietary protocols. It is expected that the U.S.A. will gradually switch to a frequency of 5.9 GHz. The communication standard 5.9 GHz WAVE (Wireless Access in the Vehicular Environment), apart from the tolling application, is designed to be used in car-to-car communication to improve traffi c safety, expand traffi c telematics solutions and for infotainment as well as entertainment. These developments will probably allow European manufacturers to increasingly penetrate the North American market.
Revenues were at EUR 200.3 million in fi scal year 2008/09, up 8 % compared to the same period of the previous fi scal year (EUR 185.7 million) even against the background of the currently diffi cult situation on the international fi nancial markets. The increase in revenues in the past fi scal year was driven by both large segments: Road Solution Projects (RSP) as well as Services, System Extensions, Components Sales (SEC) whereas the segment Others (OTH) declined compared to the previous year.
Kapsch Traffi cCom continued its expansion strategy. With the acquisition of all of the assets of the "Mobility Solutions" business unit of California-based TechnoCom Corporation and the incorporation of Kapsch Traffi cCom Holding Corp. as well as Kapsch Traffi cCom U.S. Corp., the company now owns a development and a project realization entity in the U.S.A. In the European market, Kapsch Traffi cCom strengthened its presence through the partnership with Busi Impianti S.p.A. and the establishment of the Kapsch-Busi joint venture in Italy. Kapsch-Busi S.p.A. willl focus on the market for city access control in Italy and achieved a fi rsttime success only a few months after its establishment with orders in Bergamo, Cremona and Torino. In addition, Kapsch Traffi cCom incorporated wholly-owned subsidiaries in Slovenia and Bulgaria for future projects. In Poland, Kapsch Traffi cCom acquired a 25 % stake in the newly established Autostrada Wschodnia Sp. z o.o.
On 16 January 2009, Kapsch Traffi cCom AG acquired 20.47 % of the outstanding shares in Q-Free ASA, a Norwegian company and competitor.
In the Czech Republic, road user charges are currently collected on around 1,000 km of highways and expressways and since 1 January 2008 on additional 200 km of expressways for all vehicles above 12 tons. Distance-related tolling is planned to be extended to all vehicles above 3.5 tons. In total, there are currently 378,000 OBUs in operation. In June 2008, the pilot installation for a satellite-based tolling system started operation and a telematics platform was implemented. Both systems are in pilot operation that is expected to last one year. The implementation of a traffi c management system was concluded in October 2008.
Average performance rates on high levels in the Czech Republic and in Austria resulted in bonus payments in the past fi scal year 2008/09.
Revenues in the RSP segment increased by 21 % to EUR 56.8 million compared to EUR 47.0 million in the same period of the previous fi scal year. The increase primarily resulted from the project realization in New Zealand and in the Czech Republic.
The SEC (Services, System Extensions, Components Sales) segment increased revenues by 5 % from EUR 128.8 million to EUR 135.6 million. This positive development was primarily attributable to recurring revenues from the services in connection with the technical and commercial operation of the nationwide electronic truck tolling system in the Czech Republic and an increase in the volume of components sales, particularly on-board units (OBUs). At more than 2.7 million, the total volume of OBUs delivered in fi scal year 2008/09 increased by more than 7 % compared with nearly 2.5 million units in the previous fi scal year. The increase in OBU sales mainly resulted from Austria, Australia, France and Greece.
| Revenue by segment (share in revenues) | 2008/09 | 2007/08 | +/- % | 2006/07 | ||||
|---|---|---|---|---|---|---|---|---|
| Road Solution Projects (RSP) | ||||||||
| Revenues | in million EUR | 56.8 | (28 %) | 47.0 | (25 %) | 21 % | 105.0 | (53 %) |
| EBIT | in million EUR | -1.7 | 6.3 | <-100 % | 11.6 | |||
| Services, System Extensions, Components Sales (SEC) | ||||||||
| Revenues | in million EUR | 135.6 | (68 %) | 128.8 | (69 %) | 5 % | 80.6 | (41 %) |
| EBIT | in million EUR | 31.7 | 29.1 | 9 % | 15.8 | |||
| Others (OTH) | ||||||||
| Revenues | in million EUR | 8.0 | (4 %) | 10.0 | (5 %) | -20 % | 13.0 | (7 %) |
| EBIT | in million EUR | -1.0 | -0.4 | <-100 % | -0.5 |
The revenue composition at a ratio of 28 % RSP to 68 % SEC in the fi scal year 2008/09 was similar to the previous year (25 % to 69 %).
| Revenue by region (share in revenues) | 2008/09 | 2007/08 | +/- % | 2006/07 | ||||
|---|---|---|---|---|---|---|---|---|
| Central- and Eastern Europe (incl. Austria) | in million EUR | 139.3 | (70 %) | 124.2 | (67 %) | 12 % | 157.3 | (79 %) |
| Western Europe | in million EUR | 21.3 | (11 %) | 17.6 | (9 %) | 21 % | 12.9 | (6 %) |
| Americas | in million EUR | 14.0 | (7 %) | 18.8 | (10 %) | -25 % | 15.4 | (8 %) |
| Rest of World | in million EUR | 25.6 | (12 %) | 25.2 | (14 %) | 2 % | 13.0 | (7 %) |
Revenues in CEE markedly increased compared to the previous fi scal year and represent approximately 70 % of total revenues. The increase in revenues in Western Europe largely results from the SEC segment and specifi cally from orders in France, Spain and Greece and from the joint venture in Italy. The reduction in revenues in Americas results from a project realization in Chile in the previous fi scal year.
In fi scal year 2008/09, EBIT declined by 17 % to EUR 29.0 million (2007/08: EUR 34.9 million). The EBIT margin was reduced from 18.8 % to 14.5 % and reached about the level of fi scal year 2006/07 (13.5 %). At EUR 78.1 million, cost of material and other production services remained nearly unchanged compared to the previous fi scal year although revenues increased. Staff costs increased by EUR 7.6 million and other operating expenses also increased by EUR 6.9 million compared to the previous fi scal year. Both increases are due to the increase of the headcount for the extension of capacity for future large projects, to the acquisitions or establishments of new companies in the U.S.A. and Italy and to the technical and commercial operation services for the nationwide electronic truck tolling system in the Czech Republic.
Due to a fi nancial result of EUR -7.1 million (2007/08: EUR 7.9 million) resulting from currency losses and the impairment of certain short-term fi nancial assets (securities), profi t before tax decreased to EUR 21.9 million (2007/08: EUR 42.8 million) and profi t after tax also decreased to EUR 16.4 million (2007/08: EUR 32.1 million).
In the past fi scal year, the balance sheet total of Kapsch Traffi cCom Group increased by 9 % from EUR 298.4 million to EUR 324.5 million. This increase primarily results from the change in short-term assets due to an increase of the inventories by EUR 8.5 million and an improvement of cash and cash equivalents by EUR 12.8 million. Within the non-current assets, property, plant and equipment increased by EUR 10.7 million due to the investment in production lines and the relocation of the companies in Vienna. The change in intangible assets mainly resulted from the acquisition of all of the assets of the "Mobility Solutions" business unit of TechnoCom Corporation and the newly formed joint venture Kapsch-Busi S.p.A. in Italy. The purchase of 20.47 % of the outstanding shares in Q-Free ASA led to an increase in the shares of associates to EUR 12.3 million. In contrast to this development, other non-current assets decreased by EUR 36.6 million due to the reduction of trade receivables in connection with the nationwide electronic tolling system in the Czech Republic.
On the liabilities side of the balance sheet, the increase of short-term liabilities refl ects the increase of the balance sheet total. Short-term fi nancial liabilities increased by EUR 31.8 million to EUR 49.2 million (31 March 2008: EUR 17.4 million) due to the fi nancing of acquisitions and the long-term agreement on credit lines in connection with the fi nancing in the Czech subsidiary. Kapsch Traffi cCom Group thus showed an equity ratio of 41.4 % as of the balance sheet date 31 March 2009 (31 March 2008: 44.7 %).
In the fi scal year 2008/09, the cashfl ow from operating activities could be improved to EUR 42.1 million (2007/08: EUR -10.5 million) due to a positive change in net current assets from EUR -72.4 million in the previous fi scal year to EUR -7.7 million in the fi scal year 2008/09.
Cashfl ow from investing activities was at EUR -44.8 million (2007/08: EUR -11.6 million) primarily due to acquisitions, to payments in connection with asset deals, to an increase of intangible assets and the purchase of tangible assets in connection with the relocation of the companies in Vienna as well as the expansion of the production.
Cashfl ow from fi nancing activities was at EUR 19.3 million (2007/08: EUR 47.6 million) due to the positive development of current fi nancial assets from EUR -4.3 million in the previous year to EUR 31.8 million in the fi scal year 2008/09. This development could not compensate the one-time effect of the IPO (EUR 65.8 million) in June 2007.
Cash and cash equivalents increased by EUR 12.8 million to EUR 60.2 million, as of 31 March 2009 (31 March 2008: EUR 47.4 million). Such cash and cash equivalents are available for further growth.
The toll transaction rate is a ratio for the accuracy and reliability of a tolling system. It shows the number of successful transactions in relation to all potential toll collection transactions of vehicles equipped with a functioning on-board unit (OBU). A high toll transaction rate translates to maximum toll revenue.
In 2008, the average toll transaction rate of the existing truck tolling system in Austria amounted to approximately 99.7 %, slightly above the year 2007. 1
During the same period, the average performance rate of the nationwide electronic tolling system in the Czech Republic (phase I) was approximately 98.2 %, up 0.7 % from the 97.5 % in 2007. 1
In the fi scal year 2008/09, the average number of personnel in the Kapsch Traffi cCom Group amounted to 898 persons. As of 31 March 2008, 946 persons were employed.
The Group places great importance on the continued training and education of its employees. In this context, not only is professional education and training promoted, but also seminars and training sessions for the development of one's own personality or ability to work in a team are offered. Within the framework of the Kapsch Academy, training sessions tailored to the particular needs of employees are offered. Selected employees are prepared for their future tasks by a management trainee program.
The Group has a job rotation program in place to promote the international exchange of staff between the various locations.
Depending on the years of service and profi ts, the company pays contributions for its employees to an external pension fund.
Furthermore, Kapsch Traffi cCom Group currently has a profi t participation program in place, by which the company provides its staff with the opportunity to share in the profi t of the Kapsch Traffi c Com Group.
Kapsch Traffi cCom AG is certifi ed pursuant to OHSAS 18001 for occupational health and safety and has implemented the necessary measures in its internal processes.
1 Calculation of the average performance rate is based on methodologies agreed with the respective; customer comparisons of average performance rates in different projects are therefore limited.
Valid certifi cates for quality pursuant to ISO 9001 and environment pursuant to ISO 14001 are in place. For the future, it is planned to meet the social responsibility to an even higher degree, in particular to use natural resources even more economically and responsibly.
Living up to its socio-political responsibility, the entire Kapsch Group supports – organized by Kapsch AG – a number of contemporary art and cultural institutions or projects and selected training initiatives, as well as extensive social measures. The company shows this attitude not only to the outside. Employees of Kapsch Traffi cCom Group also appreciate this sustained social responsibility of the company which is manifested in the form of many programs and measures.
As a technology company, Kapsch Traffi cCom Group operates in an ever changing environment. Risks are therefore part of its dayto-day business. Risk for the company means the possibility of divergence from company objectives; thus, the defi nition of risk includes positive (chances) as well as negative (risks) divergences from planned objectives.
Risk management has been positioned as a separate function within the fi nance department of Kapsch Traffi cCom AG. Under the responsibility of a central risk manager, risk management in institutionalized processes collects and analyses all relevant chances and risks of the Group's projects and provides the basis for the timely planning and implementation of control measures. It is planned to gradually develop risk management into a company-wide chance and risk management. The primary objective in this context is not to avoid risks, but to deal with risks in a controlled and deliberate manner and to recognize and realize opportunities as they arise over time in order to make a valuable contribution to the management of the company.
The material risks of the Group and the respective risk management measures are briefl y explained below:
A major portion of the revenues of Kapsch Traffi cCom Group is generated in the Road Solution Projects (RSP) segment. In this segment, the Group regularly participates in tenders for the implementation and operation of large electronic toll collection (ETC) systems. On the one hand, there is the risk that tenders in which the Group participates or plans to participate are delayed or withdrawn, e.g., as a result of political changes or appeals or legal actions by unsuccessful bidders. On the other hand, there is the risk that Kapsch Traffi cCom Group does not succeed with offers for new projects for technological, fi nancial, formal or other reasons. Follow-up revenues from maintenance agreements and from the technical operation also depend on the successful participation in tenders for systems.
The strategy of Kapsch Traffi cCom Group is aimed at reducing the volatility of sales/revenues through increased geographic diversifi cation and increased diversifi cation of the product portfolio as well as the sustained growth of the share of maintenance and operations.
In connection with the implementation of systems, Kapsch Traffi cCom Group most of the times is obliged by contract to issue performance guarantees. Since ETC systems are frequently sophisticated and technologically complex systems and have to be implemented within a short time frame, system and product defects can occur due to the limited time available for tests. In case the guaranteed performance levels are not achieved or deadlines exceeded, penalties usually have to be paid. A signifi cant delay in a project or failure to achieve guaranteed performance levels in a project would also reduce the chances of success in future tenders for systems.
Kapsch Traffi cCom Group applies risk management methods and risk management procedures in order to guard against risks associated with projects.
In numerous systems, the awarding authorities are public authorities. Framework and service contracts in connection with tolling projects may include terms and conditions which are not negotiable in a tender process and which may be disadvantageous for the Kapsch Traffi cCom Group. Moreover, in the case of long-term contracts, the margins earned can also differ from the original calculations due to changes in costs. Liabilities arising from contracts of the Group may include liabilities regarding customers' loss of profi t, product liabilities and other liabilities.
While Kapsch Traffi cCom Group aims to include appropriate limitations to its liability in contracts, there can, however, be no guarantee that suffi cient limitations to its liability are contained in all contracts or that they can be enforced under applicable law.
The leading market position of the Kapsch Traffi cCom Group is, to a large extent, based on its ability to develop state-of-the-art, effi cient and reliable systems, components and products. In order to maintain its technological leadership, the Kapsch Traffi cCom Group invests a considerable portion of its revenues in research and development activities. However, if the Group does not succeed in developing new systems, components and products, this can be detrimental to the competitive position of the Kapsch Traffi cCom Group. Since its innovation leadership is, to a large degree, based on technology, the company's internal know-how and intellectual property, the global increase in product piracy and reverse engineering may have negative effects on the Group. In addition, any default in protecting these technologies may have a negative impact on the competitive position of the Group. On the other hand, systems, components, products or services could infringe on intellectual property rights of third parties.
The Kapsch Traffi cCom Group places great importance on the protection of technologies and the company's internal know-how, e.g., by means of patents and non-disclosure agreements with other parties. In order to avoid legal action and court proceedings, the Kapsch Traffi cCom Group permanently monitors potential intellectual property rights infringements.
One of the strategic objectives of the Kapsch Traffi cCom Group is to grow internationally both organically and through selected acquisitions and joint ventures. In the implementation of this strategy, the Group acquired several companies worldwide and integrated them into the Group. However, a number of challenges remain in connection with this growth strategy and it cannot be guaranteed that the objectives and synergies will be fully reached in all future acquisitions and joint ventures.
The Group maintains branches, offi ces and subsidiaries in several countries outside the Euro zone. A considerable part of revenues and costs is not denominated in Euro, but in the currencies of the respective foreign companies. Although the Group, if required, aims to hedge the net currency position of the individual contract, currency fl uctuations may result in losses from changes in exchange rates in the consolidated fi nancial statements (transaction risk). In addition, risks arise from the translation of foreign separate fi nancial statements into the group currency, the euro (translation risk). Changes in exchange rates may also result in a change in the competitive position of Kapsch Traffi cCom Group.
Under project fi nancing, variable interest rates are also regularly entered into, which are tied to market interest rates (Euribor, Pribor etc.). In this context, the Kapsch Traffi cCom Group is exposed to interest rate risks. The Kapsch Traffi cCom Group hedges against interest rate risks, if material, through appropriate fi nancial instruments.
The success of the Kapsch Traffi cCom Group depends heavily on key personnel with long years of experience in the traffi c telematics industry. Moreover, in the current strong growth phase of the Group, its ability to recruit qualifi ed staff and, to integrate them into the company and retain them in the long term is crucial. The loss of key personnel, any problems with personnel and diffi culties in the recruitment of personnel may adversely affect the success of the Group.
Kapsch Traffi cCom Group has implemented a number of measures to deal with personnel risks, such as incentive schemes, training opportunities, etc. In addition, employees were offered shares at a preferential price in the initial public offering under an employee participation program. A considerable number of employees made use of this opportunity.
The market for ETC systems is infl uenced by numerous statutory provisions at the EU level and at the level of national legislation.
As a technology group, the Kapsch Traffi cCom Group is exposed to typical IT risks relating to security, confi dentiality and availability of data. For this reason, Kapsch Traffi cCom AG has implemented an IT risk management system set according to the corporate risk and IT security application method (CRISAM) and has been certifi ed pursuant to ISO 27001 (Information Security Management).
From a current perspective, no risks have been identifi ed that could endanger the going concern of the Kapsch Traffi cCom Group. Increasing geographic diversifi cation, the diversifi cation of its product portfolio, together with a rising portion of recurring revenues (further growth of the Services, System Extensions, Components Sales segment) are planned to further reduce risk concentrations in the future.
Kapsch Traffi cCom has a network of research and development centers in Vienna (Austria), Jönköping (Sweden), Buenos Aires (Argentina) and Carlsbad (California, U.S.A.). The research and development centers are organized as competence centers. Research and development activities are being coordinated from the headquarters in Vienna. As of 31 March 2009, Kapsch Traffi c Com employed approximately 210 research and development engineers in its research and development activities, including project management for research projects, quality assurance and testing, documentation and certifi cation (as of 31 March 2008: approximately 170).
Research and development activities and in particular the knowledge on as well as the application of newest technologies based on national and international standards, are a high priority for Kapsch Traffi cCom in light of its business development and support to enter new markets. The current focus is on countries, such as the U.S.A., South Africa and India. In order to meet the high expectation of the market, especially to address the rising demand of time-to-market, research and development activities are often accompanied by acquisitions. The acquisition of the assets of the "Mobility Solutions" business unit of TechnoCom Corporation, resulted in an extension of the research and development centers.
Kapsch Traffi cCom focuses its activities primarily on new, innovative applications and applied research and development for all kinds of telematics solutions. The research and development activities in some areas are complemented by joint projects and close cooperation with universities, public and private institutes and technology and research companies.
Successful research and development is the foundation for the sustained improvement of existing products and systems and the continuous reduction of production, installation, operations and maintenance costs, all of which are essential for maintaining our technological and competitive advantage.
Research costs are recognized as expense. The same applies to development costs, unless IFRS criteria for the recognition as intangible assets are satisfi ed. As the income statement is presented by nature of expense, research and development costs are recognized in various items of the income statement, in particular under cost of material and other production services, staff costs and other operating expenses.
With the fi scal year 2009/10 in mind, the company takes an optimistic long-term view on its markets even in a changed economic environment. The fi scal year 2009/10 will be shaped by participation in tenders and by project awards in Hungary, Slovenia, France, Portugal, South Africa, and in the U.S.A.
On 9 April 2009, Kapsch Traffi cCom AG acquired 19 % of the shares of Brisa Internacional, SGPS, S.A., Sao Domingos da Rana, in Kapsch Telematic Services GmbH for a purchase price of EUR 2.3 million. In addition, another 7 % of the shares in Kapsch Telematic Services GmbH were acquired indirectly through acquisition of BRISA ACCESS Europe GmbH, Vienna, for a purchase price of EUR 1.9 million.
On 7 April 2009, Kapsch Traffi cCom Kazakhstan LLC, Astana, was incorporated as a wholly-owned subsidiary of Kapsch Traffi cCom AG in Kazakhstan.
Vienna, 15 May 2009
Georg Kapsch Erwin Toplak
Chief Executive Offi cer Chief Operating Offi cer
Statement of all Members of the Management Board pursuant to Section 82 Para. 4 No. 3 BörseG (Austrian Stock Exchange Act)
As members of the Board we hereby declare to the best of our knowledge that the consolidated fi nancial statements give a true and fair view of the assets, liabilities, fi nancial position and profi t or loss of the group as required by the applicable accounting standards and that the group management report gives a true and fair view of the development and performance of the business and the position of the group, together with a description of the principal risks and uncertainties the group faces.
Vienna, 15 May 2009
Georg Kapsch Erwin Toplak
Chief Executive Offi cer Chief Operating Offi cer
| all amounts in EUR Note |
2008/09 | 2007/08 |
|---|---|---|
| Continuing Operations | ||
| Revenue (1) |
200,281,637 | 185,734,678 |
| Other operating income (2) |
2,612,709 | 5,194,394 |
| Changes in fi nished and unfi nished goods and work in progress (3) |
4,656,943 | 6,667,081 |
| Other own work capitalized | 145,729 | 0 |
| Cost of materials and other production services (4) |
-78,143,939 | -78,647,198 |
| Staff costs (5) |
-54,637,097 | -46,969,222 |
| Amortization of intangible assets and depreciation of property, plant and equipment (6) |
-6,031,349 | -4,092,312 |
| Other operating expenses (7) |
-39,882,867 | -32,967,747 |
| Operating result | 29,001,766 | 34,919,674 |
| Finance income (8) |
12,076,245 | 13,898,949 |
| Finance costs (8) |
-19,211,633 | -6,009,417 |
| Financial result (8) |
-7,135,388 | 7,889,532 |
| Result from associates (13) |
0 | -51,152 |
| Profi t before income taxes | 21,866,378 | 42,758,054 |
| Income taxes (9) |
-5,498,770 | -10,698,610 |
| Profi t for the year | 16,367,608 | 32,059,444 |
| Attributable to: | ||
| Equity holders of the company | 12,976,941 | 30,412,759 |
| Minority interests | 3,390,667 | 1,646,685 |
| 16,367,608 | 32,059,444 | |
| Earnings per share from the profi t for the year attributable to the equity holders of the company (in EUR per share) (31) |
1.06 | 2.60 |
| all amounts in EUR Note |
2008/09 | 2007/08 |
|---|---|---|
| ASSETS | ||
| Non-current assets | ||
| Property, plant and equipment (11) |
16,886,895 | 6,191,728 |
| Intangible assets (12) |
26,089,490 | 8,593,152 |
| Shares in associates (13) |
12,302,472 | 0 |
| Other non-current fi nancial assets and investments (14) |
3,784,450 | 3,405,449 |
| Other non-current assets (15) |
18,423,234 | 55,005,342 |
| Deferred tax assets – due from tax group leader (22) |
1,300,938 | 2,399,361 |
| Deferred tax assets – non-tax group (22) |
6,940,884 | 4,880,464 |
| 85,728,363 | 80,475,496 | |
| Current assets | ||
| Inventories (16) |
34,219,784 | 25,734,379 |
| Trade receivables and other current assets (17) |
140,408,909 | 135,837,086 |
| Other current fi nancial assets (14) |
3,945,728 | 8,895,252 |
| Cash and cash equivalents (18) |
60,229,653 | 47,428,544 |
| 238,804,074 | 217,895,261 | |
| Total assets | 324,532,437 | 298,370,757 |
| EQUITY | ||
| Capital and reserves attributable to equity holders of the company | ||
| Share capital (19) |
12,200,000 | 12,200,000 |
| Capital reserve | 70,077,111 | 70,077,111 |
| Currency translation differences | -3,809,749 | 220,011 |
| Fair value valuation reserve (20) |
-145,873 | -971,375 |
| Consolidated retained earnings and other reserves | 51,724,779 | 49,727,838 |
| 130,046,268 | 131,253,585 | |
| Minority interests | 4,193,524 | 2,123,011 |
| Total equity | 134,239,792 | 133,376,596 |
| LIABILITIES | ||
| Non-current liabilities | ||
| Non-current fi nancial liabilities (21) |
10,060,250 | 10,581,243 |
| Liabilities from post-employment benefi ts to employees (23) |
14,214,016 | 14,088,937 |
| Non-current provisions (26) |
524,042 | 1,693,548 |
| Other non-current liabilities (24) |
14,773,324 | 26,149,682 |
| Deferred income tax liabilities – due to tax group leader (22) |
1,653,383 | 1,607,668 |
| Deferred income tax liabilities – non-tax group (22) |
217,025 | 447,171 |
| 41,442,040 | 54,568,249 | |
| Current liabilities | ||
| Trade and other current payables | 56,253,018 | 39,049,926 |
| Other liabilities and deferred income (25) |
25,316,061 | 29,485,680 |
| Current tax payables | 7,449,143 | 6,258,677 |
| Current fi nancial liabilities (21) |
49,209,541 | 17,381,784 |
| Current provisions (26) |
10,622,842 | 18,249,845 |
| 148,850,605 | 110,425,912 | |
| Total liabilities | 190,292,645 | 164,994,161 |
| Total equity and liabilities | 324,532,437 | 298,370,757 |
| all amounts in EUR | |||||||
|---|---|---|---|---|---|---|---|
| Attributable to equity holders of the company | Minority interests | Total equity | |||||
| Share capital | Capital reserve | Currency translation differences |
Fair value reserve |
Consolidated retained earnings and other reserves |
|||
| Carrying amount as of 31 March 2007 |
10,000,000 | 5,325,259 | 914,309 | -114,371 | 29,130,494 | 339,556 | 45,595,247 |
| Currency translation differences | 0 | 0 | -694,298 | 0 | 0 | 136,770 | -557,528 |
| Fair value gains/losses realized | 0 | 0 | 0 | -51,817 | 0 | 0 | -51,817 |
| Fair value gains/losses (net of tax) | 0 | 0 | 0 | -805,187 | 0 | 0 | -805,187 |
| Net income/expense recognized directly in equity |
0 | 0 | -694,298 | -857,004 | 0 | 136,770 | -1,414,532 |
| Capital increase from initial public offering |
2,200,000 | 0 | 0 | 0 | 0 | 0 | 2,200,000 |
| Premium from initial public offering less expenses relating to the initial public offering |
0 | 64,751,852 | 0 | 0 | 0 | 0 | 64,751,852 |
| Effects of business combinations | 0 | 0 | 0 | 0 | 184,585 | 0 | 184,585 |
| Dividend for 2006/07 | 0 | 0 | 0 | 0 | -10,000,000 | 0 | -10,000,000 |
| Profi t for the year | 0 | 0 | 0 | 0 | 30,412,759 | 1,646,685 | 32,059,444 |
| Carrying amount as of 31 March 2008 |
12,200,000 | 70,077,111 | 220,011 | -971,375 | 49,727,838 | 2,123,011 | 133,376,596 |
| Currency translation differences | 0 | 0 | -4,029,760 | 0 | 0 | -262,136 | -4,291,896 |
| Fair value gains/losses realized | 0 | 0 | 0 | 1,003,795 | 0 | 0 | 1,003,795 |
| Fair value gains/losses (net of tax) | 0 | 0 | 0 | -178,292 | 0 | 0 | -178,292 |
| Net income/expense recognized directly in equity |
0 | 0 | -4,029,760 | 825,503 | 0 | -262,136 | -3,466,393 |
| Dividend for 2007/08 | 0 | 0 | 0 | 0 | -10,980,000 | -1,058,019 | -12,038,019 |
| Profi t for the year | 0 | 0 | 0 | 0 | 12,976,941 | 3,390,667 | 16,367,608 |
| Carrying amount as of 31 March 2009 |
12,200,000 | 70,077,111 | -3,809,749 | -145,872 | 51,724,779 | 4,193,523 | 134,239,792 |
| all amounts in EUR Note |
2008/09 | 2007/08 |
|---|---|---|
| Cash fl ow from operating activities | ||
| Operating result | 29,001,765 | 34,919,674 |
| Adjustments for non-cash items and other reconciliations: | ||
| Depreciation and amortization (6) |
6,031,349 | 4,092,312 |
| Increase/decrease in obligations for post-employment benefi ts (23) |
125,079 | -463,451 |
| Change in other non-current liabilities and provisions (24) |
-39,109 | 9,141 |
| Increase in trade receivables (non-current) (15) |
36,613,599 | 26,679,092 |
| Increase in trade payables (non-current) (24) |
-11,376,358 | -663,820 |
| Other (net) | -3,479,570 | 6,364,155 |
| 56,876,755 | 70,937,103 | |
| Changes in net current assets: | ||
| Increase/decrease in trade receivables and other assets (17) |
-4,571,823 | -59,810,410 |
| Increase/decrease in inventories (16) |
-8,485,405 | -5,834,616 |
| Increase/decrease in trade payables and other current payables | 13,033,471 | -10,615,016 |
| Increase/decrease in current provisions (26) |
-7,627,003 | 3,848,830 |
| -7,650,760 | -72,411,212 | |
| Cash fl ow from operations | 49,225,995 | -1,474,109 |
| Interest received (8) |
2,025,158 | 2,082,913 |
| Interest payments (8) |
-3,698,830 | -3,940,442 |
| Net payments of income taxes | -5,454,731 | -7,445,292 |
| Net cash fl ow from operating activities – continuing operations | 42,097,592 | -10,776,930 |
| Net cash fl ow from operating activities – discontinued operations (30) |
0 | 257,992 |
| Net cash fl ow from operating activities – total | 42,097,592 | -10,518,938 |
| all amounts in EUR | Note | 31 March 2009 | 31 March 2008 |
|---|---|---|---|
| Cash fl ow from investing activities | |||
| Purchase of property, plant and equipment | (11) | -17,542,971 | -3,441,286 |
| Purchase of non-current intangible assets | (12) | -4,687,266 | -582,231 |
| Purchase of securities and investments | (14) | -383,060 | -30,548,455 |
| Payments for acquisition of companies (net of cash acquired) | (28) | -11,570,796 | -74,790 |
| Payments for the acquisition of shares in companies consolidated at equity | (13) | -12,302,472 | 0 |
| Proceeds from the sale of shares in subsidiaries | 0 | 1,090,909 | |
| Proceeds from the disposal of property, plant and equipment and intangible assets | 1,703,650 | 1,156,499 | |
| Proceeds from the sale of securities | 13,358 | 20,800,756 | |
| Net cash fl ow from investing activities – continuing operations | -44,769,557 | -11,598,598 | |
| Net cash fl ow from investing activities – discontinued operations | (30) | 0 | 0 |
| Net cash fl ow from investing activities – total | -44,769,557 | -11,598,598 | |
| Cash fl ow from fi nancing activities | |||
| Contributions from shareholders | 0 | 65,802,469 | |
| Dividends paid to company shareholders | (8) | -12,038,019 | -13,500,000 |
| Increase/decrease in other non-current fi nancial liabilities | (8) | -520,993 | 758,684 |
| Increase/decrease in current fi nancial liabilities | (21) | 31,827,758 | -4,275,183 |
| Net cash fl ow from fi nancing activities – continuing operations | 19,268,746 | 48,785,970 | |
| Net cash fl ow from fi nancing activities – discontinued operations | (30) | 0 | -1,166,666 |
| Net cash fl ow from fi nancing activities – total | 19,268,746 | 47,619,304 | |
| Net decrease/increase in cash and cash equivalents | 16,596,781 | 25,501,768 | |
| Change in cash and cash equivalents | |||
| Cash and cash equivalents at beginning of year | (18) | 47,428,544 | 20,183,189 |
| Net decrease/increase in cash and cash equivalents | 16,596,781 | 25,501,768 | |
| Exchange gains/losses on cash and cash equivalents | -3,795,672 | 1,743,507 | |
| Cash and cash equivalents at end of year | (18) | 60,229,653 | 47,428,544 |
Kapsch Traffi cCom Group is an international supplier of innovative road traffi c telematics solutions.
The business activities of the Kapsch Traffi cCom Group are subdivided into the following three segments:
The Road Solution Projects segment relates to the installation of road traffi c telematics solutions.
The Services, System Extensions, Components Sales segment relates to the sale of services (maintenance and operation) and components in the area of road traffi c telematics solutions.
The Others segment relates to non-core business activities conducted by Kapsch Components KG. In this segment, Kapsch Traffi cCom Group offers engineering solutions, electronic manufacturing and logistics services to affi liated entities and third parties.
Effective as of March 8, 2007, the Group disposed of signifi cantly all of its railway communication business that was previously included in the Services, System Extensions, Components Sales segment. In accordance with IFRS 5, the result (all revenues and costs) attributable to the disposed railway communication business in the periods under review is shown as "discontinued operations".
DATAX HandelsgmbH, Vienna, is the ultimate parent of Kapsch Group. Until June 2007 KAPSCH-Group Beteiligungs GmbH, Vienna, a wholly-owned subsidiary of DATAX HandelsgmbH, had been the sole shareholder of the parent company Kapsch Traffi cCom AG. Under an initial public offering in June 2007 KAPSCH-Group Beteiligungs GmbH reduced its share in Kapsch Traffi cCom AG to 69.67 %. In the fi scal year ending 31 March 2009 this share was further reduced to 68.42 % as a result of changes in share ownership.
The parent company, Kapsch Traffi cCom AG, is a joint stock corporation incorporated and domiciled in Vienna, Austria. The address of its registered offi ce is A-1120 Vienna, Am Europlatz 2. Since 26 June 2007 the shares of the parent company have been listed in the Prime Market segment of the Vienna Stock Exchange.
The following subsidiaries are part of the consolidated group:
Kapsch Telematic Services GmbH, Vienna
Kapsch Telematic Services GmbH, Germany
The principal accounting policies applied in the preparation of these consolidated fi nancial statements are set out below:
Pursuant to § 245a UGB the consolidated fi nancial statements as of 31 March 2009 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU). Presentation currency is the Euro (EUR). The consolidated fi nancial statements as of 31 March 2009 are prepared under the historical cost convention, with the exception of available-for-sale securities and derivative fi nancial instruments, which are measured at fair value at the balance sheet date.
The preparation of the consolidated fi nancial statements in conformity with IFRS requires the use of estimates and assumptions which infl uence the amount and presentation of assets and liabilities reported at the balance sheet date, and income and expenses recorded during the reporting period. Although these estimates are made by the Management Board to the best of their knowledge and are based on current transactions, actual fi gures may differ from these estimates. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are material to the consolidated fi nancial statements are disclosed in Note 21.
IAS 39 (Amendment), "Financial instruments: Recognition and measurement" and IFRS 7 "Financial instruments: Disclosures" – Reclassifi cation of fi nancial assets (effective from 1 July 2008). The application of this amendment does not have an impact on the consolidated fi nancial statements, since the company did not apply the reclassifi cation option.
IFRS 8 "Operating segments" (mandatory for accounting periods beginning on or after 1 January 2009). IFRS 8 replaces IAS 14 and results from the comparison of IAS 14 "Segment reporting" and the requirements of the U.S.A. Standard SFAS 131, "Disclosures about segments of an enterprise and related information". The new standard requires a "management approach", under which segment information is presented on the same basis as that used for internal reporting purposes of management. The company will adopt IFRS 8 "Operating segments" for accounting periods beginning on or after 1 April 2009. The Group's management assumes that the current primary segments will become the reporting segments according to IFRS.
IFRIC 11 "IFRS 2 – Group and treasury share transactions" was adopted by the European Union in June 2007 and is mandatory for accounting periods beginning on or after 1 March 2008. IFRIC 11 provides guidance on whether share-based transactions involving treasury shares or involving group entities should be accounted for as equity-settled or cash-settled share-based payment transactions in the stand-alone accounts of the parent and group companies. This interpretation will not have an impact on the company's consolidated fi nancial statements.
IFRIC 13 "Customer loyalty programmes" (mandatory for accounting periods beginning on or after 1 January 2009). IFRIC 13 is not applied by the company, since the business processes of the company do not include any customer loyalty programmes.
IFRIC 14 "IAS 19 – The limit on a defi ned benefi t asset, minimum funding requirements and their interaction" (mandatory for accounting periods beginning on or after 1 January 2009). This interpretation is not expected to have an impact on the company's consolidated fi nancial statements.
IFRS 1 (Revised), "First-time adoption of IFRS" and IAS 27 (Amendments) "Consolidated and separate fi nancial statements" – Cost of an investment in a subsidiary in the separate fi nancial statements of a parent on fi rst-time adoption of IFRS (mandatory for accounting periods beginning on or after 1 January 2009). The amendment does not have an impact on the consolidated fi nancial statements of the company.
IAS 1 (Amendment), "Presentation of fi nancial statements" replaces the existing IAS 1 (mandatory for accounting periods beginning on or after 1 January 2009). The company will apply IAS 1 (Amendment) for the accounting period beginning on 1 April 2009.
IFRS 2 (Amendment), "Share-based payment" (mandatory for accounting periods beginning on or after 1 January 2009). This amendment does not have an impact on the consolidated fi nancial statements of the company.
IAS 23 (Amendment), "Borrowing costs" (mandatory for accounting periods beginning on or after 1 January 2009). The company currently does not have any qualifying assets requiring the capitalization of borrowing costs.
IAS 32 (Amendment), "Financial instruments: Presentation" and IAS 1 (Amendment) "Presentation of fi nancial statements" – "Puttable fi nancial instruments and obligations arising on liquidation" (the "Amendment"). The company will adopt these amendments in the accounting period beginning on 1 April 2009.
IFRIC 12 "Service concession arrangements" (mandatory for accounting periods beginning on or after 1 January 2008). IFRIC 12 is not relevant to the company's operations, since it does not operate in the public sector.
Under the annual improvements project of the IASB a total of 20 standards were amended in May 2008. The amendments included the following:
IFRS 5 (Amendment), "Non-current assets held for sale and discontinued operations" and consequential amendment to IFRS 1 "First-time adoption of International Financial Reporting Standards" – Plan to dispose of shares in a subsidiary, which results in the loss of control (mandatory for accounting periods beginning on or after 1 July 2009). The company will apply these amendments for accounting periods beginning on or after 1 April 2009.
IAS 23 (Amendment), "Borrowing costs" (mandatory for accounting periods beginning on or after 1 January 2009) – Components of borrowing costs. The company currently does not have any qualifying assets requiring the capitalization of borrowing costs.
IAS 16 (Amendment), "Property, plant and equipment" (mandatory for accounting periods beginning on or after 1 January 2009).
The company will apply the amendments in the accounting period beginning on 1 April 2009.
IAS 19 (Amendment), "Employee benefi ts" (mandatory for accounting periods beginning on or after 1 January 2009).
The company will apply these amendments in the accounting period beginning on 1 April 2009.
IAS 20 (Amendment), "Accounting for government grants and disclosure of government assistance" (mandatory for accounting periods beginning on or after 1 January 2009) – Accounting for below-market rate government loans. The company will apply these amendments prospectively in the accounting period beginning on 1 April 2009.
IAS 27 (Amendment), "Consolidated and separate fi nancial statements" – Measurement of subsidiaries held for sale in the separate fi nancial statements of the parent company (mandatory for accounting periods beginning on or after 1 January 2009). The amendment does not have an impact on the consolidated fi nancial statements.
IAS 28 (Amendment), "Investments in associates" (mandatory for accounting periods beginning on or after 1 January 2009).
The company will apply these amendments in the accounting period beginning on 1 April 2009.
IAS 29 (Amendment), "Financial reporting in hyperinfl ationary economies" (mandatory for accounting periods beginning on or after 1 January 2009) – Description of the measurement basis in fi nancial statements. The amendment does not have an impact on the consolidated fi nancial statements.
IAS 36 (Amendment), "Impairment of assets" (mandatory for accounting periods beginning on or after 1 January 2009) – Disclosures in the notes on the determination of the recoverable amount based on the FVLCTS. The company will apply these amendments in the accounting period beginning on 1 April 2009.
IAS 38 (Amendment), "Intangible assets" (mandatory for accounting periods beginning on or after 1 January 2009).
The amendment does not have an impact on the consolidated fi nancial statements.
IAS 39 (Amendment), "Financial instruments: Recognition and Measurement" (mandatory for accounting periods beginning on or after 1 January 2009).
The company will apply these amendments in the accounting period beginning on 1 April 2009.
IAS 40 (Amendment), "Investment property" (mandatory for accounting periods beginning on or after 1 January 2009).
The amendment does not have an impact on the consolidated fi nancial statements.
IAS 41 (Amendments) "Agriculture" (mandatory for accounting periods beginning on or after 1 January 2009).
The amendments do not have an impact on the consolidated fi nancial statements.
The following amendments to standards (mandatory for accounting periods beginning on or after 1 January 2009) under the IASB's improvements project of May 2008 relate to changes in wording or editing, which have no or only insignifi cant effects on accounting:
The amendments do not have an impact on the consolidated fi nancial statements.
c) Standards, interpretationen and amendments to published standards not yet adopted by the European Union The following standards, interpretations and amendments have already been published, but not yet adopted by the European Union:
IFRS 3 (Revised) "Business combinations" and IAS 27 (Amendments) "Consolidated and separate fi nancial statements" (mandatory for accounting periods beginning on or after 1 July 2009). In case of future business combinations that fall under the scope of this standard, the company will apply the amended standards for accounting periods beginning on or after 1 July 2009.
IFRS 1 (Amendment) "First-time adoption of International Financial Reporting Standards" (mandatory for accounting periods beginning on or after 1 January 2009). The adoption of this amendment does not have an impact on the consolidated fi nancial statements of the company.
IAS 39 (Amendment) "Financial instruments: Recognition and measurement" – permissible underlying transactions under hedging relationships (revised July 2008 – mandatory for accounting periods beginning on or after 1 July 2009). The adoption of this amendment to the standard will not have an impact on the consolidated fi nancial statements of the company.
IFRIC 15 "Agreements for construction of real estates" (mandatory for accounting periods beginning on or after 1 January 2009). The adoption of this interpretation does not have an impact on the consolidated fi nancial statements of the company.
IFRIC 16 "Hedges of a net investment in a foreign operation" (mandatory for accounting periods beginning on or after 1 October, 2008). The adoption of this interpretation will not have an impact on the consolidated fi nancial statements of the company.
IFRIC 17 "Distributions of non-cash assets to owners" (mandatory for accounting periods beginning on or after 1 July 2009). The adoption of this interpretation does not have an impact on the consolidated fi nancial statements of the company.
IFRIC 18 "Transfers of assets from customers" (mandatory for accounting periods beginning on or after 1 July 2009). The adoption of this interpretation does not have an impact on the consolidated fi nancial statements of the company.
Amendments to IFRIC 9 "Reassessment of embedded derivatives" and IAS 39 "Financial instruments: Recognition and measurement" – Embedded derivatives (mandatory for accounting periods beginning on or after 1 July 2009). The adoption of this interpretation does not have an impact on the consolidated fi nancial statements of the company.
IFRS 7 (Amendment) "Financial instruments: Disclosures" – Improvement of the presentation of disclosures on fi nancial instruments (mandatory for accounting periods beginning on or after 1 January 2009). The amendments provide for additional disclosures on the measurement of fi nancial instruments at fair value and on the liquidity risks. The impact expected from this amendment cannot yet be assessed reliably.
IAS 39 (Amendment) "Financial instruments: Recognition and measurement" – Reclassifi cation of fi nancial assets: Effective date and transitional provisions (mandatory for accounting periods beginning on or after 1 January 2009). The amendment clarifi es the effective date, the previous application and the transition. The amendment does not have an impact on the consolidated fi nancial statements.
The adoption of these amendments is not expected to have a material impact on the consolidated fi nancial statements of the company.
The consolidated fi nancial statements were prepared by the management board on the undersigned date and released for publication. The entity fi nancial statements of the parent company, which have been included in the consolidated fi nancial statements after transition to the applicable accounting standards, have not yet been approved by the supervisory board. The supervisory board and, in the event of presentation to the general meeting of shareholders, the general meeting of shareholders could amend the entity fi nancial statements in a way that might affect the presentation of the consolidated fi nancial stataments.
Subsidiaries are entities in which the Group has a direct or indirect shareholding of more than one half of the voting rights or over which it otherwise has the power to govern the fi nancial and operating policies. Such subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. All intra-group balances and transactions are eliminated. Accounting policies of subsidiaries are changed where necessary to ensure consistency with the policies adopted by the Group.
The Group applies a policy of treating transactions with minority interests as transactions with equity owners of the Group. For purchases from minority interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is deducted from equity. Gains or losses on disposals to minority interests are also recorded in equity. For disposals to minority interests, differences between any proceeds received and the relevant share of minority interests are also recorded in equity.
The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus the costs directly attributable to the acquisition. Identifi able assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group's share of the identifi able net assets acquired is recorded as goodwill and disclosed under intangible assets. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the income statement.
Goodwill is tested annually for impairment, as well as when there are indications of impairment. If an impairment requirement is identifi ed, goodwill will be reduced immediately by the amount of the impairment. Impairment losses on goodwill are not reversed. Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefi t from the business combination in which the goodwill arose.
Associates are accounted for by the equity method. Associates are companies in which the group has signifi cant infl uence, but not control, generally accompanied by shareholding of between 20 % and 50 % of the voting rights The Group's share of its associates' post-acquisition profi ts or losses is recognized in the income statement and its share of post-reserve movements is recognized in reserves. Goodwill on acquisition of associates is included in the investment in associates, net of any impairment losses.
The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the associate.
Signifi cant unrealized gains from transactions between the Group and associates are eliminated to the extent of the Group's interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Intra-group receivables and payables, income, expenses and intercompany results, if any, are eliminated unless they are deemed immaterial for the presentation of the Group's net assets, fi nancial situation and profi tability.
In accordance with IAS 21, fi nancial statements of foreign subsidiaries which are included in the consolidated fi nancial statements are translated as follows:
Income statements of foreign subsidiaries are translated into the Group's functional currency at average exchange rates of the reporting periods, balance sheets at the prevailing mean exchange rate at the balance sheet date. Exchange differences arising from the translation of the net investment in foreign entities are recognized in shareholders' equity under "Currency translation differences". When a foreign operation is sold, such exchange differences are recognized in the income statement as part of the gain or loss on disposal of shares in foreign entities.
Goodwill and fair value write-ups arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement. Non-cash items in the balance sheet are translated at historical exchange rates, non-cash items which were recognized at their lower net realizable value are translated at the exchange rate prevailing at the time of measurement.
Material fi nancial instruments presented in the balance sheet include "cash and cash equivalents", "securities", "fi nancial assets and investments", "receivables and payables" and "loans". For the accounting and measurement policies applicable for these items refer to the explanation of the respective balance sheet item.
The Group's activities expose it to a variety of fi nancial risks, particularly foreign exchange risk, interest rate risk and credit risk. The Group's risk management focuses on the unpredictability of fi nancial markets and seeks to minimize potential adverse effects on the Group's fi nancial performance. The Group does not employ hedge accounting as envisaged by IAS 39.
Foreign exchange risk is the risk arising from fl uctuations in the value of fi nancial instruments, other balance sheet items (e. g. receivables and payables) and/or cash fl ows due to exchange rate fl uctuations. In particular, foreign exchange risk exists where business transactions are made or could arise in the normal course of business in a currency other than the company's functional currency (referred to as foreign currency below).
The group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Czech crown. Customer orders are invoiced mainly in the respective local currencies of the group companies. Only in case the Group expects to be exposed to signifi cant foreign exchange risk, major orders denominated in foreign currencies are hedged by forward foreign exchange contracts.
If the exchange rate of the stated currencies as of 31 March 2009 (31 March 2008) had changed by the percentage rate ("volatility") stated below, the profi ts before tax, provided all other variables had remained unchanged, would have been higher or lower, respectively, by the following amounts.
| Currency | Volatility | Hypothetical impact on result in TEUR | |||
|---|---|---|---|---|---|
| 2008/09 | 2007/08 | ||||
| CZK | 10 % | 1,895 | 8,022 | ||
| SEK | 10 % | 102 | 38 | ||
| USD | 10 % | 201 | 0 |
Interest rate risk is the risk arising from fl uctuations in the value of fi nancial instruments, other balance sheet items (e. g. receivables and payables) and/or cash fl ows due to fl uctuations in the market interest rates.
For fi xed-interest balance sheet items, the risk comprises the present value risk. In case the market rate for the fi nancial instrument fl uctuates, either a profi t or a loss may result if the fi nancial instrument is sold prior to maturity.
For variable-interest balance sheet items, the risk relates to the cash fl ow. With variable-interest fi nancial instruments, adjustments in the interest rates may result from changes in the market rates. Such changes would entail changes in interest payments. Variableinterest (both short-term and long-term) fi nancial liabilities account for the major part of fi nancial interest balance sheet items. If the market interest rate had been 100 basis points higher (lower) as of 31 March 2009, this, as in the prior year, would not have had a material impact on the result of the Group. At the balance sheet date, no fi nancial derivatives were used.
As part of the Group's risk management policy, the Group only deals with recognized creditworthy third parties, and implements policies to ensure that the Group sells to customers with appropriate credit histories. In addition, the Group monitors its receivables balances on an ongoing basis in order to limit its exposure to bad debts. Certain of the Group's policies limit the amount of its credit exposure to any fi nancial institution, depending on the rating of the institution.
Prudent liquidity risk management shall involve securing the availability of suffi cient cash and cash equivalents as well as the possibility of funding through the availability of adequate credit lines. Providing for adequate liquidity is statutory for every company under Austrian commercial law. The Group provides for its liquidity through available credit lines.
The objectives of the Group with respect to capital management, on the one hand, include securing its going concern in order to be able to provide the equity holders with dividends and the other stakeholders with appropriate services, and on the other hand, maintaining an optimal capital structure.
The Group monitors its capital based on net gearing, calculated from the ratio of net debt (net assets) to equity. Net debt (net assets) includes non-current and current fi nancial liabilities less cash and cash equivalents, bank balances and current securities.
| in TEUR | 2008/09 | 2007/08 |
|---|---|---|
| Non-current fi nancial liabilities | 10,060 | 10,581 |
| Current fi nancial liabilities | 49,210 | 17,382 |
| Total fi nancial liabilities | 59,270 | 27,963 |
| Cash on hand and at banks | 60,230 | 47,429 |
| Current securities | 3,946 | 8,895 |
| Net assets | 5,042 | 28,361 |
| Equity | 134,240 | 133,377 |
| Net gearing | n/a | n/a |
At the balance sheet date 31 March 2009, mainly due to the initial public offering carried out in 2007, the company had net assets (excess of cash and cash equivalents, bank balances and current securities over fi nancial liabilities) so that the net gearing cannot be calculated. The net assets are retained with regard to planned acquisitions and the fi nancing of future projects.
Research expenditure is recognized as an expense as incurred. Costs incurred on development projects (relating to the design and testing of new or improved products) are recognized as intangible assets when the following criteria are fulfi lled:
Other development expenditures that do not meet these criteria are recognized as an expense. Development costs previously recognized as an expense are not recognized as an asset in a subsequent period. Capitalized development costs are recorded as intangible assets and amortized from the point at which the asset is ready for use on a straight-line basis over its useful life, not exceeding three years.
Development assets are tested for impairment annually in accordance with IAS 36.
Acquisition costs of computer software, industrial property and similar rights are capitalized and amortized systematically over their useful lives ranging from 4 to 30 years. The carrying amount of each intangible asset is tested for impairment when a triggering event occurs.
Financial assets recognized under non-current assets and other short-term fi nancial assets include available-for-sale securities only. Available-for-sale securities are carried at fair value. Unrealized gains and losses arising from the changes in fair value are recognized in equity under a separate item.
The difference arising on the sale of fi nancial assets between the proceeds and the carrying amounts is taken through profi t or loss. Additionally, the amount recognized in equity is taken through profi t or loss. All acquisitions and sales are recognized at the respective date of the transaction; transaction costs are included in acquisition costs.
At each balance sheet date the group assesses whether there is objective evidence of impairment of each signifi cant individual fi nancial asset or group of fi nancial assets. If such evidence exists, the group accounts for that impairment and the amounts previously recognized in equity are removed from equity and recognized in profi t or loss. The amount of the impairment is measured as the difference between the carrying amount and the present value of the estimated future cash fl ows.
If in subsequent periods the fair value of the impaired fi nancial instruments increases and that increase can be directly related to an event occurring after the impairment was recognized in profi t or loss, the group reverses the impairment loss. In case of debt instruments the reversal is recognized in profi t or loss, in case of equity instruments it is recognized directly in equity.
Other available-for-sale investments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are carried at cost less impairment.
At each balance sheet date the Group assesses whether there is objective evidence that a fi nancial asset or a group of fi nancial assets is impaired.
Derivative instruments do not qualify for hedge accounting and are accounted for at fair value through profi t or loss. Changes in the fair value of these derivative fi nancial instruments are recognized immediately in the income statement within other gains/ (losses) – net.
Property, plant and equipment is carried at cost less accumulated depreciation. Depreciation is charged on a straight line basis over the expected useful lives of the assets.
The useful lives range between 3 to 26 years for plants and buildings on leasehold land, 4 to 20 years for technical equipment and machinery and 3 to 10 years for other equipment, factory and offi ce equipment.
Impairment is charged for the difference between the recoverable amount and the carrying amount of an asset. The recoverable amount represents the higher of fair value less cost to sell or value in use of an asset. For purposes of impairment testing, the assets are grouped down to the lowest level where separate cash fl ows are identifi able.
The difference between the proceeds from the sale of property, plant and equipment and their carrying amount is taken through profi t or loss and recognized in the operating result.
Leasing agreements by which the Group as lessee assumes substantially all risks and rewards associated with the use of an asset are accounted for as fi nance leases.
The respective assets are capitalized under non-current assets at the lower of the net present value of minimum lease payments or the fair value of the leased asset and are depreciated over their expected useful lives or shorter lease term, if applicable. The difference between the minimum lease payments and the accrued net present value is recognized as deferred interest expense. The interest component is spread over the term of the lease using the effective interest rate method.
Leases in which a signifi cant portion of the risks and rewards of ownership are retained by the lessor are classifi ed as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease.
Government grants with regard to assets relate to purchased non-current assets (technical equipment) and are deferred and taken through profi t or loss over the estimated useful life of the respective asset.
Other government grants received as compensation for expenses or losses already incurred are immediately taken through profi t or loss.
Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted average cost method. The cost of fi nished goods and work in progress comprises design costs, raw materials, direct labor, other direct costs and related production overheads (based on normal operating capacity). It excludes borrowing costs. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.
The Group accounts for construction contracts in accordance with IAS 11. When the outcome of a construction contract can be estimated reliably and it is probable that the contract will be profi table, contract revenue is recognized over the period of the contract. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognized as an expense immediately. The construction progress is represented by the ratio of costs incurred by the balance sheet date and the estimated total costs for the respective project.
The carrying amount results from comparing the total of accumulated costs incurred by the balance sheet date plus the profi t calculated according to the percentage of completion method (prorated) or loss (in full) on the respective construction contract to the invoiced amounts. The balance is recognized either under current assets (amounts due from customers for contract work) or under current liabilities (amounts due to customers for contract work).
Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash fl ows, discounted at the effective interest rate. The amount of the provision is recognized in the income statement.
For the presentation of the cash fl ow statement cash and cash equivalents include cash in hand, deposits held at call and other cash at banks. Overdrafts are recognized in the balance sheet under current fi nancial liabilities.
Provisions are set up when the Group has a present legal or constructive obligation to third parties as a result of past events, it is probable that an outfl ow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made.
Provisions for warranties, liabilities for construction fl aws, serial and systems problems mainly serve as coverage for obligations for free repairs and replacement deliveries, in accordance with the general sales and delivery conditions or due to individual agreements and are measured using rates based on past experience regarding direct labor and material costs incurred, overheads, replacement deliveries or rebates. A provision is recognized for the best estimate of the costs of defects to be rectifi ed under the warranty for products sold before the balance sheet date.
The Group provides various post-employment benefi ts to employees and other long-term benefi ts either based on individual agreements or in accordance with local labor law provisions.
For the calculation of liabilities arising from pension obligations and severance payments in accordance with IAS 19 the projected unit credit method is used. According to this method, post-employment costs for employee benefi ts are recognized in the income statement in such a way that scheduled costs are spread over the employees' years of service on the basis of an expert opinion by a qualifi ed actuary, who completely remeasures the schemes annually. The obligation for pension payments and severance payments is calculated as the present value of future benefi ts using an interest rate based on the average yield on industrial bonds of the same maturity. Actuarial gains and losses exceeding the corridor (= up to 10 % of benefi t obligation or 10 % of plan assets, if any, at beginning of period) are charged to the income statement over the average remaining service of the active staff.
Contributions paid by the Group under a defi ned contribution pension scheme are charged to the income statement under staff costs in the period in which they occur.
For the calculation of liabilities arising from obligations for anniversary bonuses in accordance with IAS 19 the projected unit credit method is used. Anniversary bonuses are special lump-sum payments stipulated in the Collective Agreement and dependent on compensation and years of service. Eligibility is determined by a certain number of service years. The calculation of liabilities arising from obligations for anniversary bonuses is performed similarly to the calculation for liabilities arising of severance payments, however without taking the corridor method into consideration.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated fi nancial statements. However, if the deferred income tax arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profi t or loss, it is not accounted for. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred income tax assets are recognized to the extent that it is probable that future taxable profi t will be available against which the temporary differences can be utilized.
Temporary differences mainly arise in connection with depreciation (amortization) periods of non-current assets, provisions for pension benefi ts, other post-employment benefi ts, differences regarding the measurement of receivables and payables and tax loss carry-forwards.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not be reversed in the foreseeable future.
In March 2005, the major Austrian group companies of the entire Kapsch Group formed a tax group according to Sec. 9 of the Austrian Corporate Income Tax Act. The group taxation regime applies for the respective entities effective from the tax year 2005 (i.e. fi scal year 2004/2005). Tax group leader is KAPSCH-Group Beteiligungs GmbH, the parent of this group. Principally, this entity is the only entity which has tax receivables or tax liabilities. Tax group members, such as the Austrian companies in the Kapsch Traffi cCom Group, merely refl ect receivables or liabilities with the tax group leader and not with tax authorities. Any tax loss incurred by a member of the tax group prior to the effective date of the tax group is not available for utilization by the leader of the tax group. Such tax losses are only available for utilization against future taxable income by the entity in which they initially arose.
Accordingly, deferred taxes arising in entities which are members of the tax group and where the right of set-off of taxable income and losses exists are shown as "deferred tax assets – due from group leader" or "deferred tax liabilities – due to group leader". Those deferred tax effects arising in periods prior to the formation of the tax group or representing tax losses from periods prior to the formation of the tax group are shown as deferred tax assets or deferred tax liabilities.
Liabilities are recognized at amortized cost using the effective interest rate method. Liabilities denominated in foreign currencies are measured at the current rate at the balance sheet date. Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost using the effective interest rate method; borrowing costs are charged to the income statement in the period in which they are incurred.
Contingent liabilities occur for two reasons. For one, they comprise possible obligations that arise from past events and whose existence will be confi rmed by uncertain future events that are at least partly beyond an entity's control. For another, they comprise present obligations that fail to meet general or special recognition standards (i.e. the amount of settlement of an obligation cannot be measured with suffi cient reliability or an outfl ow of resources to settle the obligations is not deemed probable).
The Group discloses contingent liabilities unless the possibility of an outfl ow of resources embodying economic benefi ts is remote, but – in accordance with IFRS – fails to recognize them.
In accordance with IAS 18 revenue is recognized in the income statement upon delivery when the signifi cant risks and rewards of ownership of the goods are transferred to the customer, net of discounts and eliminated sales within the Group. Sales of services are recognized in the accounting period in which the services are rendered, by reference to completion of the specifi c transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided.
Revenue for construction contracts is recognized in accordance with the "percentage-of-completion method", provided the conditions under IAS 11 are met.
Other revenue is recognized by the Group as follows:
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by defi nition, rarely equal the related actual results.
In particular estimates and assumptions regarding revenue recognition have a signifi cant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fi scal year.
The Group uses the percentage-of-completion method in accounting for its construction contracts. Use of the percentage-ofcompletion method requires the Group to estimate the expected profi t mark-up for the construction contract. Sensitivity analyses on assumptions made by Management indicate that no material effect is to be expected, if the actual fi nal results should deviate by 10 % from estimates. The analysis of assumptions made in the past as well as of actual profi t mark-ups showed that the estimates had been reliable up to now.
Further areas where assumptions and estimates are signifi cant to the consolidated fi nancial statements include capitalized goodwill, inventories, deferred taxes and provisions for warranties. Sensitivity analyses of the assumptions made by management in connection with capitalized goodwill, inventories, deferred taxes and provisions for warranties indicate that no material effect will arise if the actual fi nal outcomes were to differ by 10 % from the estimates made.
A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns which are different from those of other business segments.
A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and returns which are different from those of segments operating in other economic environments.
Figures in the disclosure notes are presented in euro thousands (TEUR) unless otherwise stated.
The Group reports three main business segments (see section "General Information"):
The segment results for the fi scal year ended 31 March 2009 are as follows (in EUR million):
| Road Solution Projects |
Services, System Extensions, Components Sales |
Others | Consolidated Group | |
|---|---|---|---|---|
| Revenue | 56.8 | 135.6 | 8.0 | 200.3 |
| Operating result | -1.7 | 31.7 | -1.0 | 29.0 |
| Results from associates | 0.0 | |||
| Financial result | -7.1 | |||
| Profi t before income taxes | 21.9 | |||
| Income taxes | -5.5 | |||
| Profi t for the year | 16.4 | |||
| Profi t attributable to minority interests | 3.4 | |||
| Consolidated profi t | 13.0 |
The segment results for the fi scal year ended 31 March 2008 are as follows (in EUR million):
| Road Solution Projects |
Services, System Extensions, Components Sales |
Others | Consolidated Group | |
|---|---|---|---|---|
| Revenue | 47.0 | 128.8 | 10.0 | 185.7 |
| Operating result | 6.3 | 29.1 | -0.4 | 34.9 |
| Results from associates | -0.1 | |||
| Financial result | 7.9 | |||
| Profi t before income taxes | 42.8 | |||
| Income taxes | -10.7 | |||
| Profi t for the year | 32.1 | |||
| Profi t attributable to minority interests | 1.6 | |||
| Consolidated profi t | 30.4 |
Inter-segment transfers or transactions are entered into under normal commercial terms and conditions that would also be available to unrelated third parties.
The segment assets and liabilities as of 31 March 2009 and capital expenditure, depreciation and amortization and other non-casheffective expenses from continuing operations for the period then ended are as follows (in EUR million):
| Road Solution Projects |
Services, System Extensions, Components Sales |
Others | Consolidated Group | |
|---|---|---|---|---|
| Assets | 133.7 | 94.7 | 8.0 | 236.4 |
| Investments in associates | 12.3 | 12.3 | ||
| Unallocated assets | 75.9 | |||
| Total assets | 133.7 | 107.3 | 8.0 | 324.5 |
| Liabilities | 67.2 | 44.3 | 16.7 | 128.2 |
| Unallocated liabilities | 62.0 | |||
| Total liabilities | 190.3 | |||
| Capital expenditure | 1.6 | 17.1 | 1.1 | 19.8 |
| Depreciation and amortization | 1.7 | 3.9 | 0.4 | 6.0 |
| Other non-cash-effective expenses | 0.0 | 0.1 | 0.0 | 0.2 |
The segment assets and liabilities as of 31 March 2008 and capital expenditure, depreciation and amortization and other non-casheffective expenses from continuing operations for the period then ended are as follows (in EUR million):
| Road Solution Projects |
Services, System Extensions, Components Sales |
Others | Consolidated Group | |
|---|---|---|---|---|
| Assets | 144.2 | 79.3 | 7.9 | 231.4 |
| Unallocated assets | 67.0 | |||
| Total assets | 298.4 | |||
| Liabilities | 54.5 | 63.4 | 17.1 | 135.0 |
| Unallocated liabilities | 30.0 | |||
| Total liabilities | 165.0 | |||
| Capital expenditure | 0.2 | 4.3 | 0.5 | 4.9 |
| Depreciation and amortization | 0.4 | 3.1 | 0.6 | 4.1 |
| Other non-cash-effective expenses | 0.1 | 0.3 | 0.0 | 0.4 |
Secondary segment reporting is based on geographical regions. Revenues are segmented by customer location and asset-related fi gures by the company's own location:
The fi gures for the fi scal year ended 31 March 2009 are as follows (in EUR million):
| Western Europe | Central and Eastern Europe |
Americas | Rest of World | Consolidated Group | |
|---|---|---|---|---|---|
| Revenues | 21.3 | 139.3 | 14.0 | 25.6 | 200.3 |
| Assets | 46.7 | 257.0 | 18.2 | 2.6 | 324.5 |
| Capital expenditure | 0.7 | 17.2 | 1.9 | 0.1 | 19.8 |
The fi gures for the fi scal year ended 31 March 2008 are as follows (in EUR million):
| Western Europe | Central and Eastern Europe |
Americas | Rest of World | Consolidated Group | |
|---|---|---|---|---|---|
| Revenues | 17.6 | 124.2 | 18.8 | 25.2 | 185.7 |
| Assets | 43.2 | 247.5 | 4.5 | 3.2 | 298.4 |
| Capital expenditure | 0.6 | 3.4 | 0.1 | 0.8 | 4.9 |
Austria is included in the region "Central and Eastern Europe". The region "Americas" includes North- and South-America, the region "Rest of World" includes Asia, Australia and Africa.
| 2008/09 | 2007/08 | |
|---|---|---|
| Income from the sale of non-current assets | 5 | 25 |
| Income from costs recharged | 0 | 2,741 |
| Income from subsidies and government grants | 2,368 | 2,197 |
| Other | 239 | 231 |
| 2,613 | 5,194 |
| 2008/09 | 2007/08 | |
|---|---|---|
| Change in unfi nished goods and work in progress | -7,534 | 8,320 |
| Change in fi nished goods | 12,191 | -1,653 |
| 4,657 | 6,667 |
| 2008/09 | 2007/08 | |
|---|---|---|
| Cost of materials | 25,972 | 32,939 |
| Cost of purchased services | 52,172 | 45,708 |
| 78,144 | 78,647 |
| 2008/09 | 2007/08 | |
|---|---|---|
| Wages | 2,483 | 2,258 |
| Salaries and other remunerations | 38,431 | 33,060 |
| Expenses for social security and payroll-related taxes and contributions | 11,842 | 9,995 |
| Expenses for termination benefi ts (see Note 23) | 641 | 498 |
| Expenses for pensions (see Note 23) | 485 | 474 |
| Contributions to pension funds and other external funds (see Note 23) | 164 | 116 |
| Fringe benefi ts | 592 | 569 |
| 54,637 | 46,969 |
As of 31 March 2009 the number of staff amounted to 946 persons (31 March 2008: 824 persons) and averaged 898 persons in the fi scal year 2008/09 (2007/08: 791).
| 2008/09 | 2007/08 | |
|---|---|---|
| Depreciation of property, plant and equipment | 3,587 | 2,286 |
| Amortization of other intangible assets | 1,789 | 1,437 |
| Expenses from low-value assets written-off | 665 | 369 |
| 6,031 | 4,092 |
| 2008/09 | 2007/08 | |
|---|---|---|
| Rental expenses | 5,391 | 3,671 |
| Legal and consulting fees | 10,319 | 9,222 |
| Impairment of receivables | 103 | 307 |
| Marketing and advertising expenses | 7,629 | 3,595 |
| Travel expenses | 4,251 | 2,859 |
| Maintenance | 1,860 | 1,409 |
| Communication and IT expenses | 3,176 | 2,343 |
| Training costs | 638 | 575 |
| Losses on disposal of non-current assets | 56 | 93 |
| Insurance costs | 835 | 694 |
| Licence and patent expenses | 1,241 | 1,156 |
| Offi ce expenses | 818 | 394 |
| Taxes and charges | 461 | 404 |
| Adjustment provision for warranties | -1,646 | -28 |
| Commissions and other fees | 1,528 | 3,751 |
| Transport costs | 981 | 625 |
| Automobile expenses | 1,495 | 1,113 |
| Other | 748 | 785 |
| 39,883 | 32,968 |
The item "Other" includes membership dues and bank charges as well as other administrative and selling expenses.
| 2008/09 | 2007/08 | |
|---|---|---|
| Interest and similar income: | ||
| Interest income from bank deposits and loans granted | 1,757 | 1,697 |
| Income from securities | 269 | 386 |
| Income from interest accretion of long-term receivables | 3,790 | 3,278 |
| Gains from the disposal of fi nancial assets | 13 | 1,113 |
| Income from currency hedging | 611 | 0 |
| Currency translation differences | 5,637 | 7,425 |
| 12,076 | 13,899 | |
| Interest and similar expenses: | ||
| Interest expense | -3,699 | -3,917 |
| Expense from interest accretion of long-term payables | -1,277 | -999 |
| Losses on disposals and write-down of fi nancial assets, investments and securities | -84 | -23 |
| Impairment of available-for-sale securities | -4,950 | 0 |
| Expenses from currency hedging | -2,121 | 0 |
| Currency translation differences | -7,081 | -1,070 |
| -19,212 | -6,009 | |
| -7,135 | 7,890 |
| 2008/09 | 2007/08 | |
|---|---|---|
| Current tax expense | -6,748 | -7,942 |
| Deferred tax expense from offsetting the costs of the initial public offering against capital reserves | 0 | -1,149 |
| Deferred tax assets/liabilities (see Note 22) | 1,249 | -1,608 |
| Total | -5,499 | -10,699 |
| Thereof income/(expense) from group taxation | 1,309 | -27 |
The reasons for the difference between the arithmetic tax expense/(income) based on the Austrian corporate income tax rate of 25 % and the recognized tax expense/(income) are as follows:
| 2008/09 | 2007/08 | |
|---|---|---|
| Profi t before income taxes – continuing and discontinued operations | 21,866 | 42,758 |
| Arithmetic tax income/(expense) based on a tax rate of 25 % (2007/08: 25 %) | -5,467 | -10,689 |
| Unrecognized deferred tax assets on current losses | -773 | 0 |
| Different foreign tax rates | 625 | -558 |
| Tax allowances claimed and other permanent tax differences | -23 | 748 |
| Expenses not subject to tax and other differences | 93 | -200 |
| Recognized tax income/(expense) | -5,499 | -10,699 |
For further information on deferred tax assets and liabilities see Note 22.
| 2008/09 | 2007/08 | |
|---|---|---|
| Available-for-sale fi nancial assets | ||
| Other non-current fi nancial assets and investments | 3,784 | 3,405 |
| Other current fi nancial assets | 3,946 | 8,895 |
| 7,730 | 12,300 | |
| Loans and receivables | ||
| Other non-current assets | 18,423 | 55,005 |
| Trade receivables and other current assets | 140,634 | 135,837 |
| Cash and cash equivalents | 60,230 | 47,429 |
| 219,287 | 238,271 | |
| Financial liabilities at (amortized) cost | ||
| Non-current fi nancial liabilities | 10,060 | 10,581 |
| Other non-current liabilities | 14,773 | 26,150 |
| Trade payables and other current liabilities | 56,253 | 39,049 |
| Other liabilities and deferred income | 25,316 | 29,486 |
| Current fi nancial liabilities | 49,210 | 17,382 |
| 155,612 | 122,648 |
Financial instruments are recognized in the income statement with the following net results:
| 2008/09 | 2007/08 | |
|---|---|---|
| Available-for-sale fi nancial assets | -4,141 | 1,476 |
| Loans and receivables | 4,102 | 11,330 |
| Financial liabilities at (amortized) cost | -7,097 | -4,916 |
| -7,135 | 7,890 |
| Land and buildings | Technical equipment and machinery |
Construction in progress |
Other equipment, factory and offi cequip ment |
Total | |
|---|---|---|---|---|---|
| Carrying amount as of 31 March 2007 | 1,442 | 2,455 | 97 | 2,153 | 6,148 |
| Currency translation differences | 19 | -6 | 3 | 54 | 71 |
| Change in consolidated entities | 0 | 0 | 0 | 18 | 18 |
| Additions | 284 | 1,027 | 881 | 1,250 | 3,441 |
| Disposals | -198 | -36 | -825 | -140 | -1,199 |
| Scheduled depreciation | -346 | -888 | 0 | -1,052 | -2,286 |
| Carrying amount as of 31 March 2008 | 1,201 | 2,551 | 157 | 2,283 | 6,192 |
| Acquisition/production cost | 5,481 | 21,695 | 157 | 13,182 | 40,515 |
| Accumulated depreciation | -4,279 | -19,144 | 0 | -10,900 | -34,323 |
| Carrying amount as of 31 March 2008 | 1,201 | 2,551 | 157 | 2,283 | 6,192 |
| Currency translation differences | -16 | -142 | -2 | -222 | -381 |
| Change in consolidated entities | 3 | 26 | 0 | 27 | 55 |
| Additions | 4,444 | 5,629 | 1,509 | 5,905 | 17,488 |
| Disposals | -912 | -27 | -1,639 | -300 | -2,879 |
| Scheduled depreciation | -305 | -1,291 | 0 | -1,992 | -3,587 |
| Carrying amount as of 31 March 2009 | 4,416 | 6,745 | 25 | 5,701 | 16,887 |
| Acquisition/production cost | 4,966 | 24,080 | 25 | 11,810 | 40,882 |
| Accumulated depreciation | -551 | -17,335 | 0 | -6,109 | -23,995 |
| Carrying amount as of 31 March 2009 | 4,416 | 6,745 | 25 | 5,701 | 16,887 |
| Capitalised development costs |
Concessions and rights | Goodwill | Total | |
|---|---|---|---|---|
| Carrying amount as of 31 March 2007 | 260 | 2,836 | 6,173 | 9,269 |
| Currency translation differences | -28 | -272 | 0 | -300 |
| Change in consolidated entities | 0 | 503 | 0 | 503 |
| Additions | 210 | 372 | 0 | 582 |
| Disposals | 0 | -25 | 0 | -25 |
| Scheduled amortization | -332 | -1,106 | 0 | -1,437 |
| Carrying amount as of 31 March 2008 | 111 | 2,309 | 6,173 | 8,593 |
| Acquisition/production cost | 7,918 | 7,245 | 6,173 | 21,337 |
| Accumulated amortization | -7,807 | -4,936 | 0 | -12,744 |
| Carrying amount as of 31 March 2008 | 111 | 2,309 | 6,173 | 8,593 |
| Currency translation differences | -12 | 56 | 0 | 44 |
| Change in consolidated entities | 536 | 2,107 | 41 | 2,685 |
| Additions | 12 | 2,031 | 14,519 | 16,563 |
| Disposals | 0 | -6 | 0 | -6 |
| Scheduled amortization | -352 | -1,437 | 0 | -1,789 |
| Carrying amount as of 31 March 2009 | 296 | 5,059 | 20,734 | 26,089 |
| Acquisition/production cost | 7,125 | 11,427 | 20,734 | 39,285 |
| Accumulated amortization | -6,829 | -6,368 | 0 | -13,196 |
| Carrying amount as of 31 March 2009 | 296 | 5,059 | 20,734 | 26,089 |
The goodwill results from the acquisition of Kapsch Traffi cCom AB, Jönköping, Sweden, the acquisition of the "Mobility Solutions" business of TechnoCom Corporation, Encino, U.S.A., and the foundation of Kapsch-Busi, S.p.A, Bologna, Italy.
For the purpose of impairment testing, goodwill was allocated to two cash-generating units (CGU) ("Road Solution Projects" and "Services, System Extensions, Components Sales"). The following assumptions were made:
| Road Solution Projects | Services, System Extensions, Components Sales |
|
|---|---|---|
| The carrying amount of goodwill allocated to the unit | TEUR 15,345 | TEUR 5,389 |
| The carrying amount of intangible assets with indefi nite useful lives allocated to the unit |
TEUR 0 | TEUR 0 |
| Determination of recoverable amount of CGU | Value in use | Value in use |
• Management has based its determination on the assumption that realistically possible changes in key assumptions on which the recoverable amount is based, will not result in the carrying amount of goodwill of the CGU exceeding the recoverable amount of the CGU.
• Management has based its determination on the assumption that realistically possible changes in key assumptions on which the recoverable amount is based, will not result in the carrying amount of goodwill of the CGU exceeding the recoverable amount of the CGU.
Development costs relate to expenses, which in accordance with IAS 38 are capitalized and amortized over 3 years once the assets are available for commercial use. Additional research and development costs of the Group in the fi scal year 2008/09 amounted to EUR 21.3 million (2007/08: EUR 14.8 million). In the fi scal year 2008/09 EUR 7.1 million thereof (2007/08: EUR 5.4 million) was projectspecifi c development costs and charged to the customer. The remaining amount of EUR 14.2 million (2007/08: EUR 9.4 million) was recognized as an expense.
Other non-current intangible assets are amortized systematically over their useful lives (concessions and rights 5-30 years, rights to computer software 4-10 years).
Shares in associates developed as follows:
| 2008/09 | 2007/08 | |
|---|---|---|
| Carrying amount as of 31 March of prior year | 0 | 254 |
| Addition | 12,302 | 0 |
| Disposal | 0 | -203 |
| Share of profi t/loss (after tax) | 0 | -51 |
| Carrying amount as of 31 March of fi scal year | 12,302 | 0 |
In January 2009 the Group acquired a share of 20.47 % in Q-Free ASA, Norway. Total assets of Q-Free ASA, Norway, amounted to TEUR 57,151 and liabilities to TEUR 17,513 as of 31 December 2008. For the fi nancial year ending 31 December 2008 revenues amounted to TEUR 57,283 and the profi t for the year to TEUR 3,639. The purchase price of TEUR 12,302 includes goodwill in the amount of TEUR 4,905.
| 2008/09 | 2007/08 | |
|---|---|---|
| Other non-current fi nancial assets and investments | 3,784 | 3,405 |
| Other current fi nancial assets | 3,946 | 8,895 |
| 7,730 | 12,300 |
| Short term fi nancial assets | Available-for-sale securities |
Available-for-sale investments |
Total |
|---|---|---|---|
| Carrying amount as of 31 March 2007 | 3,615 | 4 | 3,619 |
| Additions | 549 | 0 | 549 |
| Disposals | -724 | 0 | -724 |
| Change in fair value | -38 | 0 | -38 |
| Carrying amount as of 31 March 2008 | 3,401 | 4 | 3,405 |
| Additions | 40 | 343 | 383 |
| Disposals | 0 | 0 | 0 |
| Change in fair value | -4 | 0 | -4 |
| Carrying amount as of 31 March 2009 | 3,437 | 347 | 3,784 |
| Short term fi nancial assets | Available-for-sale securities |
Available-for-sale investments |
Total |
|---|---|---|---|
| Carrying amount as of 31 March 2007 | 0 | 0 | 0 |
| Additions | 30,000 | 0 | 30,000 |
| Disposals | -20,074 | 0 | -20,074 |
| Change in fair value | -1,031 | 0 | -1,031 |
| Carrying amount as of 31 March 2008 | 8,895 | 0 | 8,895 |
| Additions | 0 | 0 | 0 |
| Disposals | 0 | 0 | 0 |
| Change in fair value (impairment) | -4,950 | 0 | -4,950 |
| Carrying amount as of 31 March 2009 | 3,946 | 0 | 3,946 |
As of 31 March 2009 available-for-sale securities relate to government and bank bonds as well as shares in investment funds. Available-for-sale securities are measured at prevailing market rates, unrealized gains and losses from price fl uctuations are recognized in equity as a separate position (see Note 20).
As of 31 March 2009 other investments classifi ed as available-for-sale relate to a 12.5 % investment in ATC Austrian Technology Corporation GmbH, Vienna, and to a 25 % investment in Autostrada Wschodnia Spolka z o.o., Poland.
| 2008/09 | 2007/08 | |
|---|---|---|
| Truck tolling system Czech Republic | 18,392 | 55,005 |
| Other | 31 | 0 |
| 18,423 | 55,005 |
Other non-current assets relate to trade receivables (long-term) that are due from the Czech Ministry of Transport for the installation of the Czech truck tolling system. As in the prior year, they fall due between 1 and 5 years as of the balance sheet date.
Long-term receivables were discounted on the basis of cash fl ows using an interest rate of 5.00 % (for that part which was funded by external loans) and an interest rate for alternative investments of 2.89 % (for that part which was funded by internal cash fl ows of the Group). Thus, the fair values approximate the carrying amounts.
Gross cash fl ows of other non-current assets are as follows:
| 2008/09 | 2007/08 | |
|---|---|---|
| Up to 2 years | 16,659 | 50,733 |
| Between 2 and 3 years | 2,745 | 7,476 |
| More than 3 years | 0 | 0 |
| 19,404 | 58,209 |
Long-term receivables in the amount of TEUR 18,392 (2007/08: TEUR 55,005) were pledged as collateral to banks (see Note 21).
| 2008/09 | 2007/08 | |
|---|---|---|
| Purchased parts and merchandise, at acquisition cost | 10,852 | 7,023 |
| Unfi nished goods and work in progress, at production cost | 6,080 | 13,614 |
| Finished goods, at production cost | 17,288 | 5,097 |
| 34,220 | 25,734 |
Individual inventory items were written down, where necessary, to their net realizable values. The write-downs of inventories amounts to TEUR 5,890 (2007/08: TEUR 5,652).
| 2008/09 | 2007/08 | |
|---|---|---|
| Trade receivables, less allowance for bad debt | 129,993 | 118,721 |
| Gross amount due from customers for contract work | 653 | 5,561 |
| Prepayments made | 1,325 | 2,074 |
| Receivables from tax authorities (other than income tax) | 3,415 | 4,361 |
| Other receivables and prepaid expenses | 5,023 | 5,120 |
| 140,409 | 135,837 |
Valuation allowances relating to trade receivables developed as follows:
| 2008/09 | 2007/08 | |
|---|---|---|
| Balance as of 31 March of the prior year | 1,235 | 280 |
| Addition | 182 | 1,147 |
| Utilization | -302 | 0 |
| Disposal | -838 | -192 |
| Balance as of 31 March of the reporting year | 278 | 1,235 |
Maturity structure of trade receivables and other current assets:
| 2008/09 | 2007/08 | |
|---|---|---|
| Not yet due | 133,371 | 124,524 |
| Overdue, but not impaired | ||
| Less than 60 days | 2,594 | 996 |
| More than 60 days | 4,444 | 10,317 |
| 140,687 | 137,072 |
The fair values as well as gross cash fl ows in the next fi scal year approximate the carrying amounts. There is no concentration of credit risk with respect to trade receivables, as the Group generally has a large number of customers worldwide. Trade receivables (current) relating to the installation of the Czech truck tolling system in the amount of TEUR 49,745 (2007/08: TEUR 64,244) and to the operation and maintenance of the system in the amount of TEUR 15,272 (2007/08: TEUR 16,911) are due from Ředitelstvím silnic a dálnic ČR (RSD), a company of the Czech Republic.
Based on the Group's experience, risks of loss in connection with trade receivables are low.
Trade receivables in an amount of TEUR 49,745 (2007/08: TEUR 64,244) were pledged as collateral to banks (see Note 21).
Amounts due from customers for contract work detail as follows:
| 2008/09 | 2007/08 | |
|---|---|---|
| Construction costs incurred plus recognized gains | 653 | 5,561 |
| Less amounts billed and prepayments received | 0 | 0 |
| 653 | 5,561 |
| 2008/09 | 2007/08 | |
|---|---|---|
| Cash on hand | 25 | 9 |
| Deposits held with banks | 60,205 | 47,419 |
| 60,230 | 47,429 |
The carrying amounts of this item also represent cash and cash equivalents at the end of the reporting period as presented in the cash fl ow statement.
| 2008/09 | 2007/08 | |
|---|---|---|
| Carrying amount as of 31 March of fi scal year | 12,200 | 12,200 |
The registered share capital of the company amounts to EUR 12,200,000. The share capital is fully paid in. The total authorized number of ordinary shares is 12,200,000. The shares are ordinary bearer shares and have no par value.
| 2008/09 | 2007/08 | |
|---|---|---|
| Carrying amount as of 31 March of prior year | -971 | -114 |
| Gains (losses) taken through profi t or loss | 1,004 | -52 |
| Unrealized gains (losses) in current period | -223 | -1,091 |
| Profi t taxes on unrealized gains/losses (Note 22) | 45 | 286 |
| Carrying amount as of 31 March of fi scal year | -146 | -971 |
| 2008/09 | 2007/08 | |
|---|---|---|
| Current | ||
| Loans for project fi nancing | 27,430 | 6,144 |
| Other current loans | 21,780 | 11,238 |
| 49,210 | 17,382 | |
| Non-current | ||
| Loans for project fi nancing | 0 | 9,830 |
| Loans for acquisitions | 10,000 | 0 |
| Other | 60 | 751 |
| 10,060 | 10,581 | |
| Total | 59,270 | 27,963 |
The non-current liabilities mature in 1 to 5 years.
The fair values and the gross cash fl ows of non-current fi nancial liabilities are as follows:
| 2008/09 | 2007/08 | |
|---|---|---|
| Carrying amount | 59,270 | 27,963 |
| Fair value | 58,467 | 27,169 |
| Gross cash fl ows | ||
| Up to 1 year | 49,210 | 17,382 |
| Between 1 and 2 years | 10,642 | 10,852 |
| Between 2 and 3 years | 61 | 0 |
| 59,913 | 28,234 |
Interest rates on current and non-current fi nancial liabilities are as follows:
| 2008/09 | 2007/08 | |
|---|---|---|
| Total fi nancial liabilities: | ||
| Carrying fi xed interest rates | 15,104 | 557 |
| Carrying variable interest rates | 44,165 | 27,406 |
| 59,270 | 27,963 | |
| Average interest rates: | ||
| Short-term loans | 2.00 – 6.40 % | 4.95 – 5.64 % |
| Loans for project fi nancing | 4.69 % | 5.38 – 6.25 % |
| Loans for acquisitions | 3.82 – 4.35% | |
| Other | 2.50 – 3.64 % | 2.00 – 8.75 % |
Other non-current assets amounting to TEUR 18,392 (2007/08: TEUR 55,005), trade receivables (current) amounting to TEUR 49,745 (2007/08: TEUR 64,244) and securities amounting to TEUR 3,437 (2007/08: TEUR 3,401) as well as 9.9 million shares in Q-Free ASA were pledged as collateral for guarantees issued by banks and for loans granted. A bill of exchange amounting to TEUR 1,425 (2007/08: TEUR 1,425) was issued for an export promotion credit.
| 2008/09 | 2007/08 | |
|---|---|---|
| Deferred tax assets – due from tax group leader | 1,301 | 2,399 |
| Deferred tax assets – non-tax group | 6,941 | 4,881 |
| 8,242 | 7,280 | |
| Deferred tax liabilities – due to tax group leader | 1,654 | 1,608 |
| Deferred tax liabilities – non-tax group | 217 | 447 |
| 1,871 | 2,055 | |
| Balance | 6,373 | 5,226 |
Deferred taxes due to tax loss carry-forwards and other temporary differences deductible in the future are recognized only to the extent of their potential realization. In these consolidated fi nancial statements tax loss carry-forwards in the amount of TEUR 1,938 (2007/08: TEUR 0) have not been recognized, because it was uncertain whether there would be suffi cient taxable profi ts available against which to offset them. All other deferred tax assets have been recognized in the respective group companies as future deductible items. Deferred tax assets are normally realized after more than 12 months.
Deferred tax assets/liabilities are attributable to the following positions:
| 31 March 2007 | Change in consolidated entities |
Taken through profi t or loss |
Taken through equity |
Currency translation differences |
31 March 2008 | |
|---|---|---|---|---|---|---|
| Deferred tax assets | ||||||
| Tax loss carry-forwards | 4,114 | 0 | -1,901 | 0 | 0 | 2,213 |
| Provisions disallowed for tax purposes | 1,007 | 0 | -33 | 0 | 6 | 980 |
| Depreciation disallowed for tax purposes | 0 | 0 | 13 | 0 | 1 | 14 |
| Other | 3,539 | 1 | -4 | 286 | 253 | 4,074 |
| 8,660 | 1 | -1,925 | 286 | 260 | 7,280 | |
| Deferred tax liabilities | ||||||
| Special depreciation/amortization of non-current assets |
0 | 0 | 0 | 0 | 0 | 0 |
| Other | 2,466 | 0 | -317 | 0 | -94 | 2,055 |
| 2,466 | 0 | -317 | 0 | -94 | 2,055 | |
| Total change | 6,194 | 1 | -1,608 | 286 | 354 | 5,226 |
| 31 March 2008 | Change in consolidated entities |
Taken through profi t or loss |
Taken through equity |
Currency translation differences |
31 March 2009 | |
|---|---|---|---|---|---|---|
| Deferred tax assets | ||||||
| Tax loss carry-forwards | 2,213 | 0 | 565 | 0 | 26 | 2,804 |
| Provisions disallowed for tax purposes | 980 | 0 | 172 | 0 | -12 | 1,140 |
| Depreciation disallowed for tax purposes | 14 | 0 | 30 | 0 | -4 | 40 |
| Other | 4,074 | 0 | 286 | 45 | -147 | 4,258 |
| 7,280 | 0 | 1,053 | 45 | -138 | 8,242 | |
| Deferred tax liabilities | ||||||
| Special depreciation/amortization of non-current assets |
0 | 0 | 0 | 0 | 0 | 0 |
| Other | 2,055 | 0 | -196 | 0 | 12 | 1,871 |
| 2,055 | 0 | -196 | 0 | 12 | 1,871 | |
| Total change | 5,226 | 0 | 1,249 | 45 | -147 | 6,373 |
Amounts recognized in the balance sheet:
| 2008/09 | 2007/08 | |
|---|---|---|
| Severance payments | 5,294 | 5,001 |
| Pension benefi ts | 8,920 | 9,088 |
| 14,214 | 14,089 |
The obligation to set up a provision for termination benefi ts is based on the respective labor law.
Liabilities for retirement benefi ts recognized at the balance sheet date relate to retirees only. All pension agreements are based on past service cost and are not covered by external plan assets (funds). In addition, contributions are paid to an external pension fund for employees of the Group (see Note 5).
For the valuation of severance payments and pension benefi t obligations an interest rate of 5.25 % (2007/08: 5.25 %), was used and for compensation increases a rate of 3 % (2007/08: 3 %). In addition, the calculation was based on the earliest possible statutory retirement age including transition provisions and using the mortality tables AVÖ 2008-P (2007/08: AVÖ 1999-P) by Pagler & Pagler. Pension increases were estimated at 2-3 % (2007/08: 2-3 %).
The following amounts are recognized in the income statement as expenses for termination benefi ts:
| 2008/09 | 2007/08 | |
|---|---|---|
| Current service cost | 184 | 177 |
| Interest expense | 378 | 280 |
| Actuarial losses | 78 | 41 |
| Total, included in staff costs (Note 5) | 641 | 498 |
| Change in liabilities recognized in the balance sheet: | ||
| Carrying amount as of 31 March of prior year | 5,001 | 5,305 |
| Total expense according to the table above | 641 | 498 |
| Payments | -347 | -802 |
| Carrying amount as of 31 March of fi scal year | 5,294 | 5,001 |
| Actuarial present value of obligations (defi ned benefi t obligation) | 6,152 | 5,949 |
| Unrecognized actuarial gains/losses | -857 | -948 |
| Amount recognized in the balance sheet | 5,294 | 5,001 |
The following amounts are recognized in the income statement as expenses for retirement benefi ts:
| 2008/09 | 2007/08 | |
|---|---|---|
| Current service cost | 0 | 0 |
| Interest expense | 485 | 474 |
| Total, included in staff costs (Note 5) | 485 | 474 |
| Change in liabilities recognized in the balance sheet: | ||
| Carrying amount as of 31 March of prior year | 9,088 | 9,247 |
| Total expense according to the table above | 485 | 474 |
| Payments | -653 | -633 |
| Carrying amount as of 31 March of fi scal year | 8,920 | 9,088 |
| Actuarial present value of obligations (defi ned benefi t obligation) | 9,891 | 9,558 |
| Unrecognized actuarial gains/losses | -971 | -470 |
| Amount recognized in the balance sheet | 8,920 | 9,088 |
| 2008/09 | 2007/08 | |
|---|---|---|
| Truck tolling system Czech Republic | 9,954 | 26,070 |
| Other | 4,820 | 80 |
| 14,773 | 26,150 |
Other non-current liabilities relate to trade payables (non-current) in the amount of TEUR 9,954 (2007/08: TEUR 26,070) due to subcontractors for the installation of the Czech truck tolling system. As in the prior year, these liabilities are due in more than 1 year and less than 5 years as of the balance sheet date. These non-current liabilities were discounted on the basis of cash fl ows using discount rates that correspond to those rates applied in discounting non-current receivables from the Czech truck tolling system (see Note 15). Thus, the fair values approximate the carrying amounts.
Other non-current liabilities relate to a liability in the amount of TEUR 3,333 from a put option for shares in Kapsch-Busi S.p.A, Bologna, Italy (after interest compounding to the balance sheet date 31 March 2009) and to the non-current portion of a contingent payment obligation in the amount of TEUR 1,484 from the acquisition of the "Mobility Solutions" business of TechnoCom Corporation, Encino, U.S.A. (see Note 28).
The gross cash fl ows of other non-current liabilities are as follows:
| 2008/09 | 2007/08 | |
|---|---|---|
| Less than 2 year | 11,361 | 22,532 |
| Between 2 and 3 years | 3,522 | 4,647 |
| More than 3 years | 424 | 0 |
| 15,306 | 27,179 |
| 2008/09 | 2007/08 | |
|---|---|---|
| Amounts due to customers for contract work | 4,723 | 4,625 |
| Prepayments received | 896 | 2,368 |
| Non-current employee liabilities | 9,205 | 8,606 |
| Liabilities to tax authorities (other than income tax) | 917 | 5,459 |
| Other liabilities and deferred income | 9,576 | 8,428 |
| 25,316 | 29,486 |
Amounts due to customers for contract work detail as follows:
| 2008/09 | 2007/08 | |
|---|---|---|
| Construction costs incurred plus recognized gains | -9,162 | -3,392 |
| Less amounts billed and prepayments received | 13,885 | 8,017 |
| 4,723 | 4,625 |
| 2008/09 | 2007/08 | |
|---|---|---|
| Non-current | 524 | 1,694 |
| Current | 10,623 | 18,250 |
| 11,147 | 19,944 |
The provisions changed as follows:
| 31 March 2007 | Change in consolidated entities |
Utilization/ disposal |
Addition | Currency translation differences |
31 March 2008 | |
|---|---|---|---|---|---|---|
| Obligations from anniversary bonuses | 457 | 20 | -40 | 27 | 0 | 464 |
| Costs of dismantling and removing assets | 1,130 | 0 | 0 | 0 | 0 | 1,130 |
| Other | 97 | 0 | 0 | 0 | 2 | 99 |
| Non-current provisions, total | 1,684 | 20 | -40 | 27 | 2 | 1,694 |
| Warranties | 4,165 | 0 | -941 | 913 | -8 | 4,128 |
| Losses from pending transactions and rework | 881 | 0 | -273 | 302 | 0 | 910 |
| Legal fees, costs of litigation and contract risks | 2,881 | 0 | -2,881 | 6,415 | 473 | 6,888 |
| Other | 7,535 | 10 | -5,021 | 3,696 | 104 | 6,324 |
| Current provisions, total | 15,462 | 10 | -9,117 | 11,326 | 568 | 18,250 |
| Total | 17,146 | 30 | -9,157 | 11,353 | 570 | 19,944 |
| 31 March 2008 | Change in consolidated entities |
Utilization/ disposal |
Addition | Currency translation differences |
31 March 2009 | |
|---|---|---|---|---|---|---|
| Obligations from anniversary bonuses | 464 | 5 | -24 | 78 | 0 | 524 |
| Costs of dismantling and removing assets | 1,130 | 0 | -1,130 | 0 | 0 | 0 |
| Other | 99 | 0 | -88 | 0 | -10 | 0 |
| Non-current provisions, total | 1,694 | 5 | -1,242 | 78 | -10 | 524 |
| Warranties | 4,128 | 0 | -2,380 | 259 | -187 | 1,820 |
| Losses from pending transactions and rework | 910 | 0 | -364 | 389 | 0 | 934 |
| Legal fees, costs of litigation and contract risks | 6,888 | 0 | -6,620 | 3,129 | -169 | 3,228 |
| Other | 6,324 | 0 | -6,757 | 5,186 | -114 | 4,640 |
| Current provisions, total | 18,250 | 0 | -16,121 | 8,963 | -469 | 10,623 |
| Total | 19,944 | 5 | -17,363 | 9,041 | -479 | 11,147 |
The provision for anniversary bonuses relates to non-current entitlements by employees based on collective labor agreement provisions. The valuation was based on an interest rate of 5.25 % (2007/08: 5.25 %), the earliest possible statutory retirement age including transition provisions and using the mortality tables AVÖ 2008-P (2007/08: AVÖ 1999-P) by Pagler & Pagler, increases in salary were considered at 3 % (2007/08: 3 %).
As manufacturer, dealer and service provider the Group issues product warranties at the time of sale to its customers. Usually, under the terms of the warranty contract, the Group has the obligation to repair or replace manufacturing or software defects that become apparent within the period under guarantee.
In case the Group expects warranty claims on products sold or services rendered during the period under guarantee, a corresponding provision will be set up in the fi nancial statements. Based on the expectation that the majority of the expenditure will be incurred in the short or medium term, the best estimate for the cost of warranty is used for the recognition of the provision. Likewise, historical data is taken into account in the calculation of the amount of the provision. According to past experience, it is probable that there will be claims under the warranties.
The provision for losses from pending transactions and re-work was set up on the basis of expected losses from construction contracts recognized at the balance sheet date.
Other provisions mainly include provisions for commissions and bonuses, credits receivable, discounts granted to customers and legal and consulting fees.
The Group's contingent liabilities primarily result from large scale projects. Other commitments mainly relate to contract and warranty bonds, bank guarantees, performance und bid bonds, sureties and acceptance of guarantees for subsidiaries vis-à-vis third parties.
Details of contingent liabilities and other commitments are as follows:
| 2008/09 | 2007/08 | |
|---|---|---|
| Contract, warranty, performance and bid bonds | ||
| City Highway Santiago | 846 | 860 |
| City Highway Sydney and Melbourne | 1,593 | 2,377 |
| Truck Tolling System Austria | 12,500 | 12,500 |
| Truck Trolling System Czech Republic | 19,938 | 48,899 |
| Tolling project New Zealand | 2,025 | 2,101 |
| Expressway Toll Collection System, Maryland, U.S.A. | 3,317 | 0 |
| Other | 5,338 | 4,306 |
| 45,557 | 71,043 | |
| Bank guarantees | 3,486 | 3,290 |
| Sureties | 30 | 25 |
| 49,073 | 74,359 |
Financial obligations from lease contracts:
The future payments from non-cancellable obligations from rental and operating lease contracts are presented below:
| 2008/09 | 2007/08 | |
|---|---|---|
| Up to 1 year | 5,509 | 4,471 |
| Between 1 and 5 years | 14,341 | 5,370 |
| Over 5 years | 14,045 | 2 |
| 33,895 | 9,843 |
On 15 May 2008 Kapsch Traffi cCom AG and the Italian Busi Impianti Group announced their cooperation. Under a joint venture, the two companies founded Kapsch-Busi S.p.A., domiciled in Bologna, in order to offer traffi c telematics solutions for the urban area on the Italian market. Busi Impianti outsourced the related business unit, including a group of 10 employees, Kapsch Traffi cCom complemented the team with own staff.
| Purchase price: | |
|---|---|
| Paid | 80 |
| Present value of liability from put option | 3,214 |
| 3,294 | |
| Fair value of net assets acquired | 415 |
| Goodwill | 2,879 |
The assets and liabilities arising from the acquisition are as follows:
| Fair value | Acquiree's carrying amount |
|
|---|---|---|
| Intangible assets | 622 | 327 |
| Property, plant and equipment | 4 | 4 |
| Receivables and other assets | 459 | 459 |
| Cash and cash equivalents | 90 | 90 |
| Payables, other liabilities and accruals | -760 | -760 |
| Net assets acquired | 415 | 120 |
The acquired company contributed revenues of TEUR 1,896 and a net income of TEUR 61 to the Group's result for the period from 1 June 2008 to 31 March 2009. If the acquisition had occurred on 1 April 2008, there would not have been a signifi cant change in revenue or profi t of the Group.
Effective as of 4 July 2008, Kapsch Traffi cCom AG, through its subsidiary Kapsch Traffi cCom Inc., acquired all assets of the "Mobility Solutions" business of TechnoCom Corporation, a company incorporated under the laws of the State of Delaware and domiciled in Encino, California.
| Purchase price: | |
|---|---|
| Already paid | 11,581 |
| Incidental acquisition costs | 334 |
| Contingent purchase price component | 2,281 |
| 14,196 | |
| Fair value of net assets acquired | 2,555 |
| Goodwill | 11,641 |
The assets and liabilities arising from the acquisition are as follows:
| Fair value | Acquiree's carrying amount |
|
|---|---|---|
| Intangible assets | 2,021 | 109 |
| Property, plant and equipment | 51 | 51 |
| Receivables and other assets | 583 | 583 |
| Cash and cash equivalents | 0 | 0 |
| Payables, other liabilities and accruals | -101 | -101 |
| Net assets acquired | 2,555 | 642 |
The purchase price consists of a fi xed component in the amount of EUR 11.6 million and contingent purchase price components in the amount of EUR 2.3 million, which in turn consist of payments contingent on the successful completion of project phases and of payments contingent on future revenues. Both components were recognized as a liability at their fair value (present value). The third conditional adjustment of the acquisition costs was not accounted for in the purchase price, since it consists of payments based on tax depreciation benefi ts, which were regarded as not reliably determinable.
The following transactions were performed with related parties:
From January 2005 the company has provided services to the Group in the area of group consolidation and legal advice. Expenses incurred by the Group in the fi scal year 2008/09 amounted to TEUR 373 (2007/08: TEUR 599). Furthermore, the company invoices insurance costs (directors & offi cers liability insurance) to the Group in the amount of TEUR 22 (2007/08: TEUR 11).
In December 2005 the company issued a parental guarantee to FöreningsSparbanken AB, Stockholm, Sweden, in favor of the group company Kapsch TrafficCom AB, Jönköping, Sweden, in the amount of EUR 19.1 million. The annual fee for the assumption of the liability is 0.5 % of the guaranteed amount. Expenses incurred by the Group in the fi scal year 2008/09 amounted to TEUR 83 (2007/08: TEUR 96).
In January 2007 KAPSCH-Group Beteiligungs GmbH issued an unconditional and irrevocable fi rst demand payment guarantee up to EUR 40 million with respect to the payment obligations of Kapsch Traffi cCom Construction & Realization spol. s r.o., Prague, resulting from the credit and guarantee facilities agreement granted by Ceskoslovenska Obchodni Banka A.S., Prague, UniCredit Bank Austria AG, Vienna, und Raiffeisen Zentralbank Österreich AG, Vienna, for the delivery and operation of the Czech truck tolling system. The annual fee for the assumption of the liability is 0.5 % of the guaranteed amount. Expenses incurred by the Group in the fi scal year 2008/09 amounted to TEUR 220 (2007/08: TEUR 209).
KAPSCH-Group Beteiligungs GmbH acts as the tax group leader in a tax group formed in March 2005, of which Austrian subsidiaries of this Group are members. Accordingly, all post-formation tax effects of the group companies which are tax group members are considered to be related party transactions (see Note 9 and 22).
In connection with the use of the KAPSCH trademark and logo the company invoices license fees to the Group. The license fee amounts to 0.5 % of all third-party sales of the Group, whereby the annual minimum fee is TEUR 250. Expenses incurred by the Group in the fi scal year 2008/09 amounted to TEUR 733 (2007/08: TEUR 750).
Activities in the area of corporate development, public relations, sponsoring and other marketing activities are carried out centrally by Kapsch Aktiengesellschaft for all group companies. Cost allocated to the Group in the fi scal year 2008/09 amounted to TEUR 925 (2007/08: TEUR 447).
Furthermore, the company invoices management and consulting services (including costs for the chairman of the board of the company, Georg Kapsch, and costs for consulting services of certain supervisory board members of the company) to the Group. Expenses incurred by the Group in the fi scal year 2008/09 amounted to TEUR 959 (2007/08: TEUR 1,257).
Kapsch Aktiengesellschaft has entered into various insurance contracts covering all group companies. The cost allocated to the Group in the fi scal year 2008/09 amounted to TEUR 249 (2007/08: TEUR 253).
The company provides human resources services (payroll services, administration, recruiting, advice on labor law and human resources development) to the Group. Expenses incurred by the Group in the fi scal year 2008/09 amounted to TEUR 691 (2007/08: TEUR 786).
The company leases telephone and IT equipment (hardware and software) to the Group and provides call centre services and IT support. Expenses incurred by the Group in the fi scal year 2008/09 amounted to TEUR 2,070 (2007/08: TEUR 1,643).
The company delivers hardware (IT equipment) on behalf of Kapsch Traffi cCom AG, Vienna, and provides maintenance and other services for various customer projects, the two largest of which by far are the "Truck Tolling System Austria" and the "Truck Tolling System Czech Republic". The deliveries and services performed amounted to TEUR 4,575 in the fi scal year 2008/09 (2007/08: TEUR 2,554).
The company provides IT, EDP and telephone services to the Group in the amount of TEUR 252 (2007/08: TEUR 192), as well as other services in the amount of TEUR 507 (2007/08: TEUR 180), among other things for the IT technical restructuring of the new location of Kapsch Components KG and for the integration of the Swedish, Argentinean and U.S.A. American subsidiaries.
The Group invoices consulting services, in particular for public relations, to the company. Income of the Group resulting from these services in the fi scal year 2008/09 totaled TEUR 0 (2007/08: TEUR 60).
Kapsch Components KG provides logistic services to the company. Income of the Group resulting from these services in the fi scal year 2008/09 totaled TEUR 128 (2007/08: TEUR 100).
The Group provides services in the area of public relations to the company. Income of the Group resulting from this service in the fi scal year 2008/09 amounted to TEUR 0 (2007/08: TEUR 83).
Kapsch Components KG provides logistic services to the company. Income of the Group resulting from these services in the fi scal year 2008/09 totaled TEUR 826 (2007/08: TEUR 1,102).
Kapsch Components KG produces various components for the company. Income of the Group resulting from the sale of these components in the fi scal year 2008/09 totaled TEUR 0 (2007/08: TEUR 711).
In January 2007 Kapsch CarrierCom AG issued an unconditional and irrevocable fi rst demand payment guarantee up to EUR 9 million with respect to the payment obligations of Kapsch Traffi cCom Construction & Realization spol.s.r.o., Prague, resulting from the credit and guarantee facilities agreement granted by Ceskoslovenska Obchodni Banka A.S., Prague, UniCredit Bank Austria AG, Vienna, and Raiffeisen Zentralbank Österreich AG, Vienna, for the delivery and operation of the Czech truck tolling system. The annual fee for the assumption of the liability is 1.5 % of the guaranteed amount. The assumption of liability expired as of 31 March 2008 and thus no expenses were incurred in the fi scal year 2008/09 (2007/08: TEUR 135).
The company provides technical maintenance services for the Czech truck-tolling system and is responsible for the current IT support for the Czech subsidiaries. Expenses incurred for this in the fi scal year 2008/09 totaled TEUR 386 (2007/08: TEUR 0). Furthermore, the company provided public relations services amounting to TEUR 98 in the fi scal year 2008/09 (2007/08: TEUR 0).
In the fi scal year 2008/09 there were no business relations with the company. In the fi scal year 2007/08 an agreement could be reached with the company on waiving a potential success fee for the procurement of a tolling project in Argentina in the form of a one-off payment amounting to TEUR 400.
One managing director of Kapsch Immobilien GmbH was a member of the supervisory board of Kapsch Traffi cCom AG until 10 July 2008.
In 1997, Kapsch Components KG, as lessee, has entered into a frame lease agreement with Kapsch Immobilien GmbH, as lessor, regarding the premise in Wagenseilgasse 1, Vienna, Austria, assuming the frame lease agreement from Kapsch Aktiengesellschaft, the original lessee. The frame lease agreement has neither been signed by Kapsch Components KG nor Kapsch Immobilien GmbH, but nonetheless the parties regarded the very basic provisions contained in the frame lease agreement to be binding upon them. The frame lease agreement was terminated and ended on 31 December 2008. The various parts of these premises were sub-leased by Kapsch Components KG within the consolidated group as well as to related companies.
On 15 July 2008 a new lease agreement was concluded for the location Am Europlatz 2 and a cancelation waiver for 10 years was agreed to. It is possible to partly terminate the agreement after 5 or 7 years respectively Investments in the amount of TEUR 1,767 (2007/08: TEUR 0) were made for the adaptation of the leased property. Lease expenses incurred by the Group amounted to TEUR 1,980 in the fi scal year 2008/09 (2007/08: TEUR 1,181).
Lease income of the Group resulting from the sub-lease to related parties in the fi scal year 2008/09 totaled TEUR 226 (2007/08: TEUR 379). The services rendered for relocations in the course of vacating the location Wagenseilgasse 1 amounted to TEUR 142 (2007/08: TEUR 0).
Services are usually negotiated with related parties on a cost-plus basis. Goods are bought and sold at arm's length.
Liabilities for pension benefi ts include pension obligations (pensions in payment) to the widow of Dr. Karl Kapsch, a former board member of Kapsch Aktiengesellschaft.
The following table provides an overview of receivables from and payables due to related parties at the respective balance sheet dates:
| 31 March 2009 | 31 March 2008 | |
|---|---|---|
| Parent company | ||
| Trade receivables and other assets | 489 | 379 |
| Trade payables and other payables | 284 | 522 |
| Affi liated companies | ||
| Trade receivables and other assets | 439 | 444 |
| Trade payables and other payables | 1,771 | 466 |
| Other related parties | ||
| Trade receivables and other assets | 0 | 0 |
| Trade payables and other payables | 908 | 12 |
Effective as of 8 March 2007, the Group disposed of its railway communication business that primarily included mobile train cab radios and related applications based on GSM-R technology (sale to Funkwerk Systems Austria GmbH, Vienna, by means of an asset deal). Activities in this business formed part of the Services, System Extensions, Components Sales segment.
As a result of the sale, the Group applied IFRS 5.
a) Analysis of the result of discontinued operations
| 2008/09 | 2007/08 | |
|---|---|---|
| Revenues | 0 | 0 |
| Expenses | 0 | 0 |
| Profi t from discontinued operations – before and after tax | 0 | 0 |
| 2008/09 | 2007/08 | |
|---|---|---|
| Operating result | 0 | 0 |
| Adjustments for non-cash items and other reconciliations | 0 | 0 |
| Changes in current assets: | ||
| Increase/decrease in trade receivables and other assets | 0 | 1,441 |
| Increase/decrease in inventories | 0 | 0 |
| Increase/decrease in trade payables and other current payables | 0 | -122 |
| Increase/decrease in current provisions | 0 | -1,061 |
| 0 | 258 | |
| Interest received | 0 | 0 |
| Interest payments | 0 | 0 |
| Net cash fl ow from operating activities – discontinued operations | 0 | 258 |
| Cash fl ow used in investing activities | ||
| Purchases of property, plant and equipment | 0 | 0 |
| Proceeds from disposal of assets | 0 | 0 |
| Net cash fl ow from investing activities – discontinued operations | 0 | 0 |
| Cash fl ow from fi nancing activities | ||
| Increase/decrease in other non-current fi nancial liabilities | 0 | -700 |
| Increase/decrease in current fi nancial liabilities | 0 | -467 |
| Net cash fl ow from fi nancing activities – discontinued operations | 0 | -1,167 |
| Net cash fl ow from discontinued operations | 0 | -909 |
Earnings per share (basic earnings) is calculated by dividing the profi t attributable to equity holders of the company by the weighted average number of ordinary shares in issue during the year, excluding, if any, ordinary shares purchased by the company and held as treasury shares. As of 31 March 2009, as in the prior year, no treasury shares were held by the company.
| 2008/09 | 2007/08 | |
|---|---|---|
| Profi t attributable to equity holders of the company (in EUR) | 12,976,941 | 30,412,759 |
| Weighted average number of ordinary shares | 12,200,000 | 11,683,060 |
| Basic earnings per share (in EUR per share) | 1.06 | 2.60 |
On 9 April 2009, Kapsch Traffi cCom AG acquired 19 % of the shares of Brisa Internacional, SGPS, S.A., Sao Domingos da Rana, in Kapsch Telematic Services GmbH for a purchase price of EUR 2.3 million. In addition, another 7 % of the shares in Kapsch Telematic Services GmbH were acquired indirectly through acquisition of BRISA ACCESS Europe GmbH, Vienna, for a purchase price of EUR 1.9 million.
On 7 April 2009, Kapsch Traffi cCom Kazakhstan LLC, Astana, was incorporated as a wholly owned subsidiary of Kapsch Traffi cCom AG in Kazakhstan.
The consolidated group companies are listed in the notes to the consolidated fi nancial statements under the item "consolidated group". The parent company Kapsch Traffi cCom AG, Vienna, with the exception of Kapsch Telematic Services GmbH, Vienna, Kapsch Telematic Services Kft., Budapest, Kapsch Telematic Services spol. s r.o., Prague, Kapsch Traffi cCom Construction & Realization spol. s r.o., Prague, Kapsch Telematic Services SK s.r.o., Bratislava, Kapsch Telematik Technologies Bulgaria AD, Sofi a, PREMID, a.s., Bratislava, Kapsch-Busi S.p.A, Bologna, and Kapsch Telematic Services GmbH, Berlin, directly or indirectly holds 100 % of the shares in the fully consolidated subsidiaries. With regard to additional disclosures in accordance with § 265 (2) 1 UGB for Kapsch Telematic Services GmbH, Vienna, Kapsch Telematic Services Kft., Budapest, Kapsch Telematic Services spol. s r.o., Prague, and Kapsch Traffi cCom Construction & Realization spol. s r.o., Prague, Kapsch Telematic Services SK s.r.o., Bratislava, Kapsch Telematik Technologies Bulgaria AD, Sofi a, PREMID, a.s., Bratislava, Kapsch-Busi S.p.A, Bologna, and Kapsch Telematic Services GmbH, Berlin, the protection-of-interest clause pursuant to § 265 (3) UGB was applied.
The average number of staff in the fi scal year 2008/09 was 831 salaried employees and 67 waged workers (2007/08: 716 salaried employees and 75 waged workers).
Costs for the chairman of the board are, among others, included in the cross-charge of management and consulting services from Kapsch Aktiengesellschaft (see Note 29). Regarding the total emoluments of the other member of the management board, the protection-of-interest clause of § 266 No. 7 UGB is applied.
No remunerations were paid to supervisory board members.
As in the previous years, no advances or loans were granted to members of the management and supervisory board, nor any guaranties issued in their favor.
In the fi scal year 2008/09 the following persons served as management board members: Georg Kapsch (Chief Executive Offi cer) Erwin Toplak (Chief Operating Offi cer)
In the fi scal year 2008/09 the following persons served on the supervisory board: Franz Semmernegg (Chairman) Kari Kapsch (Deputy-Chairman) Elisabeth Kapsch (until 10 July 2008) William Morton Llewellyn (since 10 July 2008)
Delegated by the works council: Christian Windisch Werner Dreschl
Authorized for issue:
Vienna, 15 May 2009
Georg Kapsch Erwin Toplak Chief Executive Offi cer Chief Operating Offi cer
We have audited the accompanying consolidated fi nancial statements of Kapsch Traffi cCom AG, Vienna, for the fi scal year from 1 April 2008 to 31 March 2009. These consolidated fi nancial statements comprise the consolidated balance sheet as of 31 March 2009, the income statement, consolidated cash fl ow statement and consolidated statement of changes in equity for the year ended 31 March 2009, and a summary of signifi cant accounting policies and other explanatory notes.
Management is responsible for group accounting and the preparation and fair presentation of consolidated fi nancial statements that give a true and fair view of the group's fi nancial position, its fi nancial performance and cash fl ows in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of fi nancial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable under the circumstances.
Our responsibility is to express an opinion on these consolidated fi nancial statements based on our audit. We conducted our audit in accordance with laws and regulations applicable in Austria and in accordance with International Standards on Auditing (ISAs), issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the fi nancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated fi nancial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated fi nancial statements in order to design audit procedures that are appropriate under the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated fi nancial statements.
We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.
Our audit did not give rise to any objections. Based on the results of our audit, in our opinion the consolidated fi nancial statements present fairly, in all material respects, the fi nancial position of the group as of 31 March 2009 and its fi nancial performance and cash fl ows for the fi scal year from 1 April 2008 to 31 March 2009 in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU.
Laws and regulations applicable in Austria require us to perform audit procedures whether the consolidated management report is consistent with the consolidated fi nancial statements and whether the other disclosures made in the consolidated management report do not give rise to misconception of the position of the group. The auditor's report also has to contain a statement as to whether the consolidated management report is consistent with the consolidated fi nancial statements.
In our opinion, the consolidated management report for the group is consistent with the consolidated fi nancial statements.
Vienna, 15 May 2009
PwC INTER-TREUHAND GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft
signed:
Felix Wirth Austrian Certifi ed Public Accountant Kapsch Traffi cCom is an international supplier of innovative road traffi c telematics solutions. Its principle business is the development and supply of electronic toll collection (ETC) systems, in particular for the multi-lane free-fl ow (MLFF) of the traffi c, and the technical and commercial operation of such systems. Kapsch Traffi cCom also supplies traffi c management systems, with a focus on road safety and traffi c control, and electronic access systems and parking management. With more than 220 references in 36 countries in all 5 continents, and with more than 14 million on-board units (OBUs) and nearly 12,000 equipped lanes, Kapsch Traffi cCom has positioned itself among the leading suppliers of ETC systems worldwide. Kapsch Traffi cCom is headquartered in Vienna, Austria, and has subsidiaries and representative offi ces in 22 countries.
Kapsch Traffi cCom AG I Am Europlatz 2 I A-1120 Vienna, Austria I www.kapschtraffi c.com
Investor Relations I Marcus Handl I Phone: +43 (0)50811 1120 I Fax: +43 (0)50811 99 1120 I E-Mail: ir.kapschtraffi [email protected] Public Relations I Brigitte Herdlicka I Phone: +43 (0)50811 1710 I Fax: +43 (0)50811 99 1710 I E-Mail: [email protected]
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