Annual / Quarterly Financial Statement • Jun 22, 2016
Annual / Quarterly Financial Statement
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| ¾ Management Report 3 | |
|---|---|
| ¾ Statement of all Members of the Managing Board 28 | |
| ¾ Additional Information pursuant to Section 82 Para. 4 No. 3 BörseG 29 | |
| ¾ Consolidated Financial Statements as of 31 March 2016 30 | |
| ¾ Notes to the consolidated financial statements 35 | |
| ¾ Notes on individual items in the income statement and balance sheet 59 | |
| ¾ Auditor's Report 100 |
| ¾ Management Report as of 31 March 2016 103 | |
|---|---|
| ¾ Statement of all Members of the Managing Board 122 | |
| ¾ Additional Information pursuant to Section 82 Para. 4 No. 3 BörseG 123 | |
| ¾ Balance Sheet as of 31 March 2016 124 | |
| ¾ Income Statement for the fiscal year 2015/16 125 | |
| ¾ Notes to the financial statements for the fiscal year 2015/16 126 | |
| ¾ Auditor's Report 138 |
Source: IWF World Economic Outlook
Economic developments in the year 2015 lagged behind the previous year but remained robust with global economic growth of 3.1 % (2014: 3.4 %). While the developed economies gradually returned to a moderate growth path, the emerging and developing countries once again experienced low growth rates, although they were still responsible for roughly 70 % of global economic growth. In light of the weaker economic situation in 2015, global trade expanded by only 2.8 % after a growth of 3.5 % in the previous year. In 2016, however, growth in the internationally traded volume of goods and services is expected to be stronger again. The economic forecast for the coming years indicates a somewhat more dynamic development for the global economy: According to the International Monetary Fund (IMF), 2016 will see an expansion of 3.2 % and 2017 will see 3.5 %.
The U.S. economy exhibited growth of 2.4 % in the year under report, identical with the previous year. At the end of 2015, the Federal Reserve (Fed) made the first direction change in the interest policy since 2006, raising the U.S. prime rate first to 0.25 % and then to 0.50 %. Due to the early announcement and generally staged "normalization" of the monetary policy, however, this hardly had any effect on the global economy. Economic optimism during the year under report was dampened by the strong dollar, which posed difficulties for the export business. Private consumption remained the main growth engine.
The emerging and developing economies experienced the lowest growth during the reporting year since the financial crisis of 2008/09 at 4.0 %. Economic development was further inhibited by the continued low raw materials prices, among other factors.
China's economic growth dropped below the 7 % mark in the reporting year to hit 6.9 %, the lowest value since 1990. The country is in a process of transformation from labor-intensive and export-oriented manufacturing to a more heavily technologized and service-based economy. For the coming years, a further slowdown in growth to 6.5 % in 2016 and 6.2 % in 2017 is expected. Overall, however, the situation in Asia is positive. India achieved an impressive rise in GDP of 7.3 % in 2015. The ASEAN-5 countries are seeing at least a gradual improvement in economic output. GDP growth increased from 4.6 % in the previous year to 4.7 % in 2015 and should expand still further according to the IMF.
Economic growth slowed once again in the emerging and developing economies.
Source: IWF World Economic Outlook
In the eurozone, economic growth remained lower than in the EU-28 despite a continuation of the expansive monetary policy.
Austria recorded GDP growth of only 0.9 % in 2015.
The Commonwealth of Independent States (CIS) continued to suffer during the reporting year from the Russia-Ukraine conflict, low oil prices and high inflation. In consequence, economic output shrank by 2.8 %, following the moderate growth of 1.1 % achieved in 2014. The economically largest member of the CIS, Russia, was confronted with a GDP decline of 3.7 % in 2015. As in the previous year, the economic outlook was clouded by the fall in the oil price, the economic sanctions by the EU and the deterioration of the ruble.
In the region Latin America (including the Caribbean), economic output also declined in 2015, although only by a moderate 0.1 %. Larger economies in particular, such as Brazil, Venezuela and Argentina, experienced negative growth rates as a result of weak raw material prices, a decline in demand, high volatility on the financial markets and structural problems. Other economies, such as Peru, Mexico and Chile, were able to continue achieving low single-digit expansion rates.
The generally subdued economic development that prevailed during the year under report was also observed in sub-Saharan Africa and in the MENAP region (Middle East and North Africa, Afghanistan and Pakistan). A significant slowing of growth to 3.4 % (2014: 5.1 %) was registered in the countries south of the Sahara, while the MENAP region grew by only 2.5 % after achieving 2.8 % in the previous year.
In Europe, economic growth found firmer footing compared with the previous year, with the aggregated gross domestic product of the EU-28 rising by 1.9 %. The solid consumer demand was the main factor behind this development, while the willingness of companies to invest suffered from the slowing global economy. The various developments at the country level were also noteworthy. While GDP growth in the large economies of Germany (+1.7 %) and France (+1.1 %) was below the EU average, some countries, such as Ireland (+6.9 %) grew comparatively strongly. For 2016, economists expect the level of growth in Europe to remain unchanged due to difficult international conditions. However, the situation on the labor market may improve further. After unemployment in the EU-28 fell below the 10 % mark already in 2015, it hit the lowest value in seven years with 8.9 % at the start of 2016.
Economic developments in the euro region were unable to keep up with the overall EU during 2015. Compared with 2014, the economic growth in the currency union amounted to 1.6 %. However, the predicted start of a deflation phase was not observed in the majority of euro countries, although the target of an inflation rate just under 2 % was not achieved. The European Central Bank (ECB) therefore broadened its expansive monetary policy in the reporting year and extended the program for the purchase of government bonds and other securities until at least the end of March 2017. In addition, the prime rate was lowered to 0 % for the first time in history at the start of 2016 in order to further stimulate the real economy.
A slight improvement was observed in 2015 with regard to economic development in Central and Southeastern Europe. In comparison with the EU-28, this region continued along a path of economic recovery. The positive regional developments were overshadowed by the still precarious situation in Ukraine and Russia. The Czech Republic, Romania, Poland and the Slovak Republic nevertheless each achieved GDP rates over 3 %. In 2016, Central and Southeastern Europe should remain on a stable growth course overall.
Austria's moderate economic recovery continued in the year under report. The gross domestic product grew in 2015 by 0.9 %. The growth contribution from foreign trade was lower than it has been in the past. In concrete terms, the nominal growth in goods exports was only 2.7 % as a result of the economic slowdown in the emerging markets and the EU sanctions against Russia. For 2016, economists nevertheless expect somewhat stronger GDP growth of 1.6 %.
Kapsch TrafficCom addresses the market for intelligent transportation systems (ITS).
The ITS market is divided into three product segments.
The global volume of the ITS market in the year 2015 has been estimated at USD 17.2 billion.
Kapsch TrafficCom addresses the market for intelligent transportation systems (ITS). ITS refers to systems in which information and communication technologies are employed to support and optimize transportation, including infrastructure, vehicles, users and industry.
The study "Intelligent Transportation Systems – A Global Strategic Business Report" from Global Industry Analysts, April 2014, describes the ITS market as a diversifying market with widely differing application and product segments. Thus, the market comprises the following three product segments:
Electronic toll collection (ETC) enables drivers to pay toll fees without stopping at toll stations. Traffic management systems (TMS) monitor traffic, optimize signal timing and regulate the flow of traffic. Other intelligent transportation systems (OTH) comprise in particular:
Global Industry Analysts (April 2014) estimated that the global volume of the ITS market would amount to USD 17.2 billion in 2015, with the expectation of further growth. The largest product segment in 2015 was Other Intelligent Transportation Systems, accounting for 38.8 % (USD 6.7 billion). Based on a worldwide volume of about USD 4.5 billion, ETC had an ITS market share of 26.0 %. The largest geographic region for ITS in 2015 was the U.S.A. at 38.2 %, followed by Europe at 30.3 %.
According to the study, the ITS market will grow between 2012 and 2020 by an average of 8.7 % per year and should reach a global volume of USD 26.3 billion by 2020, of which ETC will make up USD 7.8 billion or 29.5 %. The strongest growth in all product segments is expected for ETC with annual growth of 11.5 %.
Kapsch | 5
The past four years have shown that trends on the ITS market have arisen – in part due to economic conditions – that have significantly influenced developments. Thus, the actual market volume deviates from these forecasts from the year 2012.
Kapsch TrafficCom divides the ITS market according to customer segments and the key target groups.
Kapsch TrafficCom has developed its own understanding and its own view of the ITS market in order to define and develop its own market positioning. From this perspective, the ITS market was divided into four customer segments and the corresponding primary addressees were identified.
The current focus lies on operator/infrastructurerelated ITS.
Operator/authority-related ITS encompass both ETC and ATMS as well as applications for urban access and parking space management. The addressees are governments and their authorities, road and toll operators as well as concessionaires that develop transportation policies using ITS to ensure the availability and quality of the infrastructure in a way that improves safety, performance, security and environmental protection.
Vehicle-related ITS aim at in-car telematics such as remote diagnostics or driver assistance systems (AVIS). They are intended mainly to enhance vehicle productivity, particularly that of commercial vehicles (CVO), as well as traffic safety and security. Addressees are mainly car manufacturers and their suppliers. This field also includes systems for real-time interaction between vehicles (vehicle-to-vehicle; V2V) as well as between vehicles and infrastructure (vehicle-to-infrastructure; V2I), collectively abbreviated as V2X, which Kapsch TrafficCom believes will be based on 5.9 GHz technology.
User-related ITS are focused mainly on convenience and efficiency for travelers. The customer in the car receives information to aid in orientation during the journey, thereby increasing traffic safety. Example applications for advanced vehicle information systems (AVIS) include transmitting traffic-related vehicle information to travelers before or during the trip as well as navigation services. Addressees are information service providers such as wireless network operators, radio broadcasters and vendors of portable navigation devices as well as end users, in the latter case primarily with respect to future solutions.
Industry-related ITS encompass commercial applications designed to reduce the costs or maximize the yield of vehicle fleet operators, including public transportation companies (PVTMS). Example applications include systems for fleet management and for collecting information on the logistics of large-scale vehicle operators. Among the addressees are insurance companies, who see pay-as-you-drive car insurance as a promising way to attract new customers by offering fair insurance rates and ITS-based value-added mobility services.
Kapsch TrafficCom strives to play a leading role in intelligent mobility solutions.
The current focus of Kapsch TrafficCom aims at the operator/infrastructure-related segment of the ITS market. In accordance with Strategy 2020 and the effort to develop intelligent mobility solutions, vehicle- and user-related ITS will increasingly take center place. Kapsch TrafficCom also continuously observes the other developments in industry-related ITS.
Kapsch TrafficCom believes that the following factors are the main trends and drivers of the market which it currently addresses.
Mobility. With increasing affluence, the desire for mobility and the associated demands on transportation systems also increase. Mobility is increasingly viewed as a basic need or a necessity. The transportation systems that have been developed to meet this need vary considerably around the world. The number of cars per 1,000 residents therefore serves as an indicator to assess the development level and untapped potential in many countries. While the U.S.A. has an average of 800 cars per 1,000 residents, the ratio in South American countries falls to just 100 cars, and the figure is even significantly lower in some African countries. If the emerging countries like China and Brazil continue the process of catching up to more developed nations economically, it can be assumed that individual transportation will experience strong growth as well. The developments with regard to new car registrations confirm this picture. In China alone, over 18 million new cars were registered in 2014, roughly one-third more than in the entire EU. There are now over 30 cities in China with more than one million cars.
Urbanization. The share of people living in cities is rising. While this applied to only 2 % of the world's population in the year 1800, the year 2007 marked the first time when over half of all people on the planet resided in cities. Forecasts predict that the share of the urban population will rise to 60 % by 2030 and reach 70 % by 2050. Already by 2025, there will then be 40 mega-cities with over 10 million residents. This growth dynamic also places fundamental challenges on the urban transportation infrastructure and promotes investments in intelligent, sustainably designed transportation systems.
Climate protection. More than one quarter of the energy consumption and CO2 emissions in Europe can be attributed to the transportation sector and 20 % to road traffic. Today, 64 % of all kilometers driven are traveled in urban areas. In Vienna, roughly one-third of transportation-related CO2 emissions result from the search for parking alone. The total number of kilometers driven in urban areas per year should almost triple between 2010 and 2050, rising from 25.8 billion to 67.1 billion. City residents in the year 2050 will then spend 106 hours per year in traffic jams. In addition to the statutory requirements for the automotive industry intended to decrease CO2 emissions, substantial improvements require changes to user behavior and, above all, intelligent transportation control systems.
Expansion and financing of transportation networks. The basic need for mobility, the increasing urbanization and ever higher volumes of goods traffic in global economic trade reveal the limits of the current transportation systems. Highways that were built decades ago no longer live up to the demands placed on them today. Despite intensive efforts to make rail transport more attractive, the volume of freight traffic on Europe's roads has remained at the same level for years.
The willingness of governments to invest in the expansion of transportation networks depends on reliable financing opportunities, among other factors. While investments in the highway network increased over the past decade in Austria, stagnation has been observed in other countries such as Germany, Japan and Great Britain.
The megatrends of mobility, urbanization and climate protection are impacting and changing the ITS market.
The maintenance and expansion of the road network requires new financing models.
The Trans-European Road Network (TEN-V) made up roughly one-fourth of the entire primary road network in the European Union in 2015 with a total length of 84,700 km but carried only 40 % of the goods transported by road. By 2020, an average expansion of 4,800 km per year is expected, of which 3,500 km will involve existing roads. The new EU Member States in particular as well as the corridors to these countries are expected to require higher levels of investment. In "Whitepaper: European transport policy for 2010", the European Commission indicated that investment costs up to 2020 will amount to EUR 600 billion. The increase in traffic volumes can therefore be expected to continue over the long term. In addition to the construction of new infrastructure, it is also important to finance the maintenance and repair of existing roads.
In the U.S.A., roughly USD 55 billion are invested every year in the road network. Experts estimate, however, that at least a doubling of investments to over 100 billion U.S. dollars will be necessary in the coming years in order to maintain the functionality of the road network. This pronounced need for financing inspires changing business models and increases willingness to adopt private concession models.
In consideration of tight state budgets, alternative financing models with the participation of private investors will continue to increase in importance in the coming years. Toll systems and traffic management systems will take on greater importance in the future to ensure the economical operation of highways.
The ITS market and associated factors are characterized by new technologies and short technology cycles. These changes open up new perspectives for Kapsch TrafficCom. It is necessary to intelligently resolve the apparent conflict between transportation developments on one side and the opportunities presented by mobility on the other. Through the use of technological and organizational measures, the demand for transportation must be met in ways that do not negatively impact the environment or economic development. Kapsch TrafficCom will continue to make important contributions toward this goal.
A process of convergence has been under way in the ITS market during recent years as the individual market segments increasingly merge. In expectation of this convergence, even if not at the same pace, Kapsch TrafficCom is developing from a pure provider of electronic toll collection (ETC) systems to a provider of selected ITS applications. Kapsch TrafficCom expects that the future will belong to intelligent, holistic mobility solutions and strives to play a leading role in this future. This goal is anchored in Strategy 2020 with the establishment of an intelligent mobility solutions (IMS) business. In pursuit of this goal, end customers will be addressed more heavily in the future and the portfolio will be expanded from the highway into the city.
The future will belong to intelligent, holistic mobility solutions.
The 2015/16 fiscal year was characterized by numerous new orders.
In the 2015/16 fiscal year, the Kapsch TrafficCom Group achieved a revenue of EUR 526.1 million, a 15.3 % increase compared to the previous year. The segment Electronic Toll Collection (ETC), which reflects the core business in toll collection was responsible for 84.0 % of the revenue (previous year: 85.3 %). The segment Intelligent Mobility Solutions (IMS) contributed a larger share of revenue during the reporting year than during the previous year at 16.0 % (previous year: 14.7 %). In addition to existing major projects in Belarus and the USA that shaped the 2015/16 fiscal year, new projects were acquired, project progress was made and new partnerships were concluded. The most significant of these developments are described below:
of intelligent transportation solutions from the highway into the city. With revenue of roughly EUR 125 million, the global transportation business of Schneider will contribute to further expansion of the business volume of Kapsch TrafficCom while also strengthening the efforts of Strategy 2020 in the area of intelligent mobility solutions (IMS). The conclusion of the acquisition took place on 1 April 2016.
¾On 24 March 2016, Kapsch TrafficCom announced that its subsidiary Kapsch TrafficCom Australia Pty Ltd. was commissioned with replacing the existing toll system of the Sydney Harbour Bridge and the Sydney Harbour Tunnels. The bridge and tunnel are operated by the New South Wales Roads and Maritime Services (RMS). The contract with an order value of over EUR 10 million encompasses the installation of a new toll system as well as its maintenance for five years. The new toll system should enter into operation at the start of 2017.
The following significant official changes and events took place in the 2015/16 fiscal year:
¾On 14 April 2015, a controlling interest in the Californian company Streetline, Inc., USA, was acquired through a merger with the newly founded KTCSL Merger Corp., Delaware, USA. Streetline is a leading smart parking company that develops and offers intelligent data and modern analytics to solve parking space problems for end users.
The revenue of the Kapsch TrafficCom Group reached EUR 526.1 million in the 2015/16 fiscal year, which is 15.3 % above the previous year's value of EUR 456.4 million.
The operating result (EBIT) of the Kapsch TrafficCom Group was EUR 62.3 million, which exceeds the previous year's EBIT by 90.4 % (EUR 32.7 million). The EBIT margin rose to 11.9 % (previous year: 7.2 %).
With the adaptations to the strategy and structure of the Kapsch TrafficCom Group in the 2015/16 fiscal year, the previous segmentation no longer served as a suitable breakdown of the business development and was no longer useful in company controlling. Since the fourth quarter of the fiscal year, Kapsch TrafficCom has therefore begun reporting both internally and externally based on the two segments of Electronic Toll Collection (ETC) and Intelligent Mobility Solutions (IMS).
Within both segments, a differentiation is made between projects for installation (Design & Build), projects for technical and commercial operation of the systems, including maintenance, (Operations) and deliveries of components (Components). Components encompass the three product families of on-board units and transponders, transceivers and readers as well as cameras and sensors.
Electronic Toll Collection (ETC). This segment reflects projects for the installation, maintenance and operation of systems for electronic collection of tolls without stopping at a toll station as well as manual toll systems. These are generally projects awarded based on invitations to tender by public agencies or private concessionaires. The systems cover either individual road sections or nationwide road networks. After installation, additional deliveries of components frequently take place for the expansion or adaptation of the systems.
In fiscal year 2015/16, revenue of the segment ETC increased by 13.6 % from EUR 389.3 million to EUR 442.1 million. The largest share of the revenue came from the region EMEA (Europe, Middle East, Africa) with the operations projects in the Czech Republic, Poland, Belarus and South Africa. In the area of Design & Build projects, the further expansion of the truck toll system in Belarus made a significant contribution to the increased revenue. In the EMEA region, component revenues also increased over the previous year thanks to increased sales of on-board units in France and the Czech Republic.
EBIT increase by 90.4 %
(in million EUR)
The effects of Program 2020 can be seen in the improved profit and particularly in the new strategy.
Revenue distribution ETC
In the Americas region, Components also contributed significantly to the positive revenue development. After sales of 4.3 million on-board units in the USA (previous year: 3.6 million units), revenue exceeded the previous year. In the area of Design & Build projects, the managed lane systems in Texas and for the New York State Thruway Authority made significant contributions to increased revenue, while revenue from Operations projects declined due to fewer maintenance orders in Chile compared with the previous year.
In the APAC (Asia-Pacific) region, revenues from Design & Build projects increased considerably compared to the previous year, driven in particular by the project obtained in the previous year for the installation of an electronic toll system in Sydney, Australia (WestConnex). Significant revenue increases over the previous year were also achieved in the area of Components, in particular due to on-board unit sales in Thailand and Australia. The Operations projects on the other hand made a lower contribution to revenue for the APAC region than in the previous year due to fewer maintenance orders in Australia.
The number of on-board units sold, which make up the majority of revenue in the Components area, was significantly above the previous year's level of 7.4 units at 9.5 million units. Sales figures increased in France, the Czech Republic, North America, Thailand and Australia. In contrast, lower sales numbers were recorded during the reporting period in Chile.
The EBIT of the segment ETC was EUR 63.7 million after EUR 33.5 million in the previous year. The EBIT margin
In the segment ETC, new Design & Build projects and components sales contributed to the increased revenue and EBIT.
rose as a result to 14.4 % (previous year 8.6 %). This positive development resulted in part from the higher profit contributions of the Operations projects in Belarus, Poland and the Czech Republic. The technical operation and maintenance of the nationwide system in Austria also made a good profit contribution. The Design & Build projects, such as the expansion for phase 3a in Belarus, and the increased components sales also contributed positively to the profit development. In particular, however, this EBIT improvement also reflects the success of the project "Top Fit" for cost reduction and increased earnings.
| Segment Electronic Toll Collection (ETC) | 2014/15 | 2015/16 | +/- | ||
|---|---|---|---|---|---|
| Revenue | in million EUR | 389.3 | 442.1 | 13.6 % | |
| Design & Build | in million EUR | 61.4 | 92.3 | 50.3 % | |
| Operations | in million EUR | 248.3 | 252.1 | 1.5 % | |
| Components | in million EUR | 79.6 | 97.7 | 22.9 % | |
| EBIT | in million EUR | 33.5 | 63.7 | 90.0 % |
Intelligent Mobility Solutions (IMS). This segment reflects projects for the installation, maintenance and operation of systems for traffic monitoring, traffic control and traffic safety. Projects for the monitoring of utility vehicles and for electronic vehicle registration as well as intelligent parking solutions and systems for intermodal mobility are also assigned to this segment as are systems and services for operational monitoring of public transportation and environmental installations.
In fiscal year 2015/16, revenue of the segment IMS increased by 25.1 % from EUR 67.1 million to EUR 84.0 million. In the region EMEA (Europe, Middle East, Africa), significant contributions to increased revenue came from the Design & Build projects obtained in the previous year, such as the project for expansion of the traffic management system in the Czech capital of Prague and the cross-border program "CHARM" for the advanced traffic management system DYNAC being implemented in both England and the Netherlands. In the area of Operations. the main revenue contributions for the EMEA region came from the operation of the traffic management systems in South Africa and the Czech Republic. In Components, however, the production and deliveries for the French GSM-R project of Kapsch CarrierCom declined compared with the previous year.
In the Americas region, the revenues from the Design & Build projects were significantly below the comparison values of the previous year due to the advanced stage of completion of many projects. In the area of Operations projects, the revenue contribution from projects of the newly acquired Streetline, Inc., U.S.A. as well as newly obtained maintenance orders were apparent among other revenue sources. In addition, the revenue from Components increased due to the higher sales of on-board units for monitoring utility vehicles in the U.S.A.
In the APAC (Asia-Pacific) region as well, the high degree of completion of the Design & Build projects in Australia and New Zealand was reflected in the revenue developments. The Operations revenue from the operation of traffic monitoring systems in Australia and New Zealand remained stable in comparison with the previous year.
The EBIT of the segment IMS was EUR -1.3 million (previous year: EUR -0.8 million) which puts the EBIT margin at -1.6 % (previous year: -1.1 %). This decline is related to the decreased revenue from component sales as well as the lower revenue contributions from the North American IMS Design & Build projects. Consequently, the expenditures attributed to this segment for development work as well as the costs for the newly acquired Streetline, Inc., U.S.A., could not be covered.
| Segment Intelligent Mobility Solutions (IMS) | 2014/15 | 2015/16 | +/- | ||
|---|---|---|---|---|---|
| Revenue | in million EUR | 67.1 | 84.0 | 25.1 % | |
| Design & Build | in million EUR | 26.6 | 36.1 | 35.7 % | |
| Operations | in million EUR | 21.0 | 32.3 | 53.8 % | |
| Components | in million EUR | 19.5 | 15.6 | -20.0 % | |
| EBIT | in million EUR | -0.8 | -1.3 | -62.5 % |
The largest share of total revenue in the 2015/16 fiscal year was once again held by the EMEA region (Europe, Middle East, Africa) at 70.7 % (previous year: 73.6 %). The revenue in EMEA increased by 10.7 % to EUR 372.0 million, largely due to higher revenues in Belarus, the Czech Republic and the Netherlands.
Sales in the Americas region increased by 27.7 % to EUR 118.2 million. This can be attributed primarily to the higher on-board unit sales, the project progress in the implementation of the New York State Thruway Authority project as well as the revenue contributions from the projects of the newly acquired Streetline, Inc., USA. The installation and operation project in Puerto Rico also contributed to increased revenue.
In the APAC region (Asia-Pacific), revenue increased by 29.7 % to EUR 35.9 million. The factors behind this rise were higher on-board unit sales in Thailand as well as higher revenues in the installation projects in Australia.
In Austria, revenue increased over the previous year by 4.2 % to EUR 39.8 million due to the deliveries for the Austrian GSM-R projects of the Kapsch CarrierCom Group.
The segment IMS reflects growth but also the investments in new solutions.
| Revenue by region | 2014/15 | 2015/16 | +/- | |
|---|---|---|---|---|
| EMEA | in million EUR | 336.1 | 372.0 | 10.7 % |
| Design & Build | in million EUR | 31.6 | 58.2 | 84.5 % |
| Operations | in million EUR | 252.7 | 264.2 | 4.5 % |
| Components | in million EUR | 51.9 | 49.6 | -4.4 % |
| of which Austria | in million EUR | 38.2 | 39.8 | 4.2 % |
| Americas | in million EUR | 92.6 | 118.2 | 27.7 % |
| Design & Build | in million EUR | 40.1 | 49.8 | 24.0 % |
| Operations | in million EUR | 12.3 | 16.3 | 32.1 % |
| Components | in million EUR | 40.1 | 52.2 | 30.0 % |
| Asia-Pacific | in million EUR | 27.7 | 35.9 | 29.7 % |
| Design & Build | in million EUR | 16.3 | 20.4 | 25.0 % |
| Operations | in million EUR | 4.3 | 4.0 | -7.4 % |
| Components | in million EUR | 7.1 | 11.6 | 63.5 % |
| Total | in million EUR | 456.4 | 526.1 | 15.3 % |
Key items in the statement of comprehensive income
The costs in relation to revenue reflect the effectiveness of the project "Top Fit".
The cost of material and other production services increased by EUR 33.9 million to EUR 201.9 million (previous year: EUR 168.0 million), and it should be noted that an extraordinary one-time effect in the amount of EUR 16.1 million reduced the expenses in the previous year. The ratio of costs for materials and other production services to sales revenue therefore increased from 36.8 % to 38.4 %.
Staff costs increased by EUR 5.1 million to EUR 153.2 million (previous year: EUR 148.1 million). At the same time, the average number of employees grew by four persons, changing from 3,510 to 3,514 in the reporting period. The staff cost ratio (staff costs with respect to total revenues) nevertheless fell from 32.5 % in the previous year to 29.1 %. The project "Top Fit" with measures for improving profitability also led to the planned savings in the European parent companies. The increase in the staff costs compared with the previous year can largely be attributed to the further expansion of the Polish operation company and the acquisition of Streetline, Inc., U.S.A.
Depreciation and amortization expenses decreased by EUR 1.9 million to EUR 14.5 million (previous year: EUR 16.4 million). No unscheduled depreciations or impairments occurred in the fiscal year.
Other operating expenses increased by EUR 4.9 million to EUR 99.6 million (previous year: EUR 94.8 million). The ratio of other operating expenses to total revenue nevertheless decreased compared with the previous year from 20.8 % to 18.9 %. Higher expenses were recorded for legal and consulting expenses, travel costs and operational currency losses, while the costs from damages were lower and the costs for reorganization declined again.
The financial result improved from EUR -13.1 million in the previous year to EUR -7.6 million. The finance income decreased slightly, primarily due to the lower compounding of the receivables from the installation of the Belorussian toll system.
The finance costs declined significantly because no large impairments occurred in this fiscal year, in contrast with the previous year. However, the unrealized foreign exchange gains and foreign exchange losses from the conversion of the Group-internal financing of the subsidiaries in South Africa by the parent company weighed more heavily on the financial result than in the previous year.
The profit from joint ventures and associated companies decreased to EUR 0.0 million (previous year: EUR 0.2 million) and resulted from the stake in Simex, Integración de Sistemas, S.A.P.I. de C.V., Mexico.
The financial result also improved considerably compared with the previous year.
The profit before taxes increased by a considerable EUR 34.9 million to EUR 54.8 million (previous year: EUR 19.9 million) as a result of these developments.
The profit per share increased to EUR 2.39.
The profit for the period improved by EUR 25.1 million to EUR 36.5 million EUR (previous year: EUR 11.4 million), of which EUR 31.1 million (previous year: EUR 3.6 million) is attributable to the equity holders of the company. This put the profit per share at EUR 2.39 (previous year: EUR 0.28).
The balance sheet total decreased by EUR 1.9 million to EUR 513.7 million at the close of the period on 31 March 2016 (31 March 2015: EUR 515.6 million).
The equity increased by EUR 11.3 million to EUR 230.7 million (previous year: EUR 219.4 million). As a result, the equity ratio of the Kapsch TrafficCom Group improved from 42.5 % on 31 March 2015 to 44.9 % on 31 March 2016. The equity ratio increased again by 2.4 percentage points.
Beside an increase in cash and cash equivalents (by EUR 44.0 million), the largest change in assets concerns the inventories. These decreased by EUR 11.9 million to EUR 35.8 million on 31 March 2016, a change that can be primarily attributed to inventory optimization and rationalization during the fiscal year. Of particular note here is the reduction in the stock levels in Austria, Poland, the Czech Republic and Belarus.
Other non-current assets decreased by EUR 9.3 million. This is largely due to the contractually agreed repayment from the Belorussian installation project over a period of 36 months, starting in August 2013 as well as the associated shift toward current trade receivables. The intangible assets declined by EUR 6.3 million, mainly due to the scheduled depreciation.
Under current assets, the trade receivables and other current assets fell by EUR 5.9 million, in which trade receivables decreased by EUR 21.3 million due to date-related fluctuations. The change of receivables from projects exerted an opposing influence, which increased by EUR 14.4 million compared to prior year.
Other current financial assets decreased by EUR 5.2 million to EUR 0.1 million, due to the sale of joint ownership shares (ESPA Cash Asset-Backed).
The balance sheet reflects the repayment of significant amounts of project financing.
The largest change on the liabilities side occurred in the current financial liabilities, which declined by EUR 27.6 million to EUR 21.3 million. This is due to the ongoing repayment of financing, with EUR 20.3 million relating to the repayment of the financing in connection with the installation of the nationwide electronic truck toll system in Belarus.
Non-current financial liabilities decreased by EUR 3.3 million to EUR 85.7 million. This is due in part to the buyback of the corporate bond in the amount of EUR 4.2 million. Another factor here is the change in reporting category of the financing for the project in Belarus from non-current to current. EUR 14.5 million that is reported in the current liabilities on the balance sheet date was reported as non-current in the previous year.
Other current liabilities and deferred income, which amounted to EUR 79.3 on the balance sheet date, increased by EUR 13.8 million compared to the previous year (previous year: EUR 65.5 million). This is primarily due to an obligation of TMT Services and Supplies (Pty) Ltd., South Africa, against minority shareholders in the amount of EUR 6.2 million. Moreover current personnel liabilities rose by EUR 3.3 million as well as obligations from projects (increase by EUR 2.6 million) relative to 31 March 2015.
The trade payables amount to EUR 52.0 million, having remained stable in comparison with the previous year (EUR 48.4 million).
The net cash flow from operating activities amounted to EUR 97.9 million in the reporting period (previous year: EUR 75.2 million). This development is mainly caused due to the strong profit from operating activities, a decrease in non-current assets (EUR 22.5 million) and in inventories (EUR 11.9 million) as well as due to an increase in trade payables and other current liabilities (EUR 12.9 million).
The improvement in the net cash flow from investing activities by EUR 8.0 million to EUR 0.6 million following EUR -7.4 million in the previous year is basically due to the sale of securities as well as the cash inflow from the acquisition of the stake in Streetline, Inc., U.S.A.
The free cash flow increased to EUR 90.7 million.
The free cash flow developed extraordinarily well as a result of the increased net cash flow from operating activities and was positive at EUR 90.7 million (previous year: EUR 68.2 million).
The net cash flow from financing activities was EUR -49.6 million (previous year: EUR -31.9 million) due to the decline in current financial liabilities amounting to EUR 32.9 million, dividend payments amounting to EUR 13.2 million as well as payments for the acquisition of non-controlling interests amounting to EUR 6.7 million.
Cash and cash equivalents reached a record level of EUR 140.8 million on 31 March 2016 (31 March 2015: EUR 96.8 million). The decrease in non-current financial liabilities and the increase in cash and cash equivalents led to a surplus on 31 March 2016 and therefore a net credit in the amount of EUR 33.8 million (31 March 2015: net debt of EUR -35.9 million).
The Kapsch TrafficCom Group has a global network of research and development centers in Vienna and Klagenfurt (Austria), Jonkoping (Sweden), Buenos Aires (Argentina), Mississauga (Canada), Kingston, Duluth, Pleasanton and San Mateo (U.S.A.). In the course of restructuring the organization, the Research and Development department took over end-to-end responsibility for development, including responsibility for the system architecture and final internal approval of the developed solutions. On 31 March 2016, Kapsch TrafficCom employed roughly 430 engineers (previous year: 470, adjusted) for its research and development activities.
The development departments for all strategic business fields ensure strong innovation.
Research and development (R&D) are a high priority for Kapsch TrafficCom with respect to achieving our strategic goals. To ensure the inventiveness of the company, development departments exist for all strategic business fields to work on new solutions for customer needs.
The following focal areas were defined in the past fiscal year:
The developments in the direction of a modern platform for ETC back office solutions were continued. Special attention was paid here to the integration and application of new technologies (e.g. data analytics tools, open source standard components).
In addition, the various roadside platforms of Kapsch TrafficCom were improved and a program was started to gradually merge the various product lines.
Investments continue to be made in improving vehicle identification and classification sensors. The new developments are capable of increasing the measurement accuracy, thereby optimizing the overall performance of our solutions.
For the Italian market, Kapsch TrafficCom is developing DSRC components (on-board unit and transceiver), that support the special Italian radio standard ETSI-TS 102 708, HDR (High Data Rate). The basic development and certification of the transceiver have been completed, and the on-board unit is planned for fiscal year 2017.
The satellite-based toll system of Kapsch TrafficCom is gaining in importance due to changes in the toll market. By integrating smartphones and other devices in addition to GNSS on-board units, the scope of functionality as well as the range of applications for our satellite-based toll solution have been expanded. The modernization of the technologies employed ensures that Kapsch TrafficCom has a future-proof solution that can live up to the requirements of a combined ETC/ITS market through modularity and flexibility.
In cooperative systems (V2X), the focus lay in part on further development of the Kapsch traffic management solutions for vehicle-to-vehicle and vehicle-to-infrastructure integration within the scope of the research project "European Corridor". Participation in research projects in cooperation with the automotive industry led to close contact with leading automotive manufacturers and first tier automotive suppliers. The activities in the area of V2X vehicle equipment and the available products were also improved further. In addition to developing a product and solution portfolio for cooperative systems, Kapsch TrafficCom is also taking an active part in the required standardization process in the USA and in Europe.
In the area of smart parking, the subsidiary "Streetline" invested in a new procedure for inexpensive collection of parking space data that reduces the number of required field sensors to a minimum.
Roughly 11 % of the total revenue is invested in research and development.
Sustainability
report 2014/15 Our 360°
In the 2015/16 fiscal year, the Kapsch TrafficCom Group invested roughly EUR 56.6 million in research and development (previous year: roughly EUR 49.0 million), of which EUR 32.4 million for customer-specific development (previous year: EUR 22.0 million). The total expenditures for research and development correspond to roughly 11 % (previous year: roughly 11 %) of total revenue.
Kapsch TrafficCom sees itself as particularly committed to the central aspects of sustainability not least due to the business model of the company. By means of these products and solutions, we make an active contribution to the environmentally and resource-sensitive management of transportation systems and, therefore, to the sustainable development of our society. We are also constantly endeavoring to minimize our consumption of resources and any environmental impacts related to our own business activities.
Consistent sustainability orientation. Kapsch TrafficCom understands sustainability as a continuous process. In recent years, the company has begun systematizing all the related agendas. One important milestone was reached with the publishing of the fourth sustainability report in the year 2016, which is available at www.kapsch.net/ktc/investor_relations.
The sustainability report satisfies the requirements of the Global Reporting Initiative, GRI Guideline G3.1 (Application Level C). It also serves as a progress report for the United Nations Global Compact, which defines ten principles for protecting human rights and labor standards as well as environmental protection and fighting corruption.
The report provides comprehensive information about the central fields of action:
Figures for success measurement as well as goals for the following period have been defined for each field of action. All such agendas are coordinated by a sustainability officer and reported to the executive board.
The products and solutions for intelligent transportation systems from Kapsch TrafficCom make valuable contributions to climate protection. They allow road users to reach their destinations quickly, efficiently and with low environmental impact. In order that these ambitions can be realized in the future, Kapsch TrafficCom invests heavily in research and development – in fiscal year 2015/16, and spent roughly 11 % (previous year: approximately 11 %) of the total revenue in this area.
The requirements for development and design of the products also include sustainability aspects.
Comprehensive guidelines were created to ensure that environmental, economic, social, health and safety aspects are ideally taken into account in a structured fashion in the design of products. The contents of these guidelines must be integrated into the specifications and project invitations to tender.
Quality. Safeguarding the high standards of quality, safety and robust processes is a high priority in all units of the Kapsch TrafficCom Group. Kapsch TrafficCom AG defines its processes in an integrated HSSEQ management system (Health, Safety, Security, Environment, Quality). This system is based on certifications according to ISO 9001 Quality Management (since 2002) as well as OHSAS 18001 Occupational Health and Safety Management and ISO 14001 Environmental Management (since 2005). Kapsch TrafficCom has anchored the necessary measures for ensuring the associated standards into its internal processes and continuously monitors compliance. The certificate according to ISO 27001 defines the required information security management. A high service quality is ensured in the area of technical operation with ISO 20000 for IT service management. The HSSEQ Circle meets once per quarter to discuss the status of the goals and measures from the areas of health and safety, quality, the environment and information security and to optimize work processes and information sharing. These aspects are documented in a quarterly report to the executive board.
Reliability and accuracy of installed systems. The toll transaction rate is a figure for assessing the accuracy and reliability of a toll collection system. It indicates the number of successful transactions in relation to all potential toll transactions of vehicles equipped with a functioning on-board unit. A high toll transaction rate translates to high toll income. The average toll transaction rate of the existing truck toll collection system in Austria was at approximately 99.89 % in 2014 (2013: 99.83 %), the average transaction rate of the nationwide electronic toll collection system in the Czech Republic was approximately 99.6 % 2014 (2013: 99.6 %). The calculation of the average transaction rate is based on methods agreed upon with the respective customer, meaning that comparisons between the average transaction rates achieved in different projects are only possible on a limited basis.
Innovation and quality also include improvements in energy efficiency.
internationally as an attractive
employer.
The business activities are associated with the consumption of raw materials and the emission of climaterelevant emissions. Kapsch TrafficCom works intensively on minimizing these impacts. The majority of the climate-relevant effects result from the business activities of the subsidiary Kapsch Components, which is responsible for production as well as the fleet of the entire group. Through measures to increase energy efficiency, but also influenced by a lower production volume, Kapsch Components was able to reduce its energy consumption by 9.5 % in fiscal year 2015/16 following a reduction of 7 % in the previous year. The waste volume per ton of product has increased by 28,1 % to 173 kg and the nitrogen consumption sank by 3,8 %.
Staff. The average number of employees in the Kapsch TrafficCom Group in fiscal year 2015/16 was 3,514, which is 0 % higher than the average of 3,510 in fiscal year 2014/15. As of 31 March 2016, the group had a workforce of 3,716 (3,534 salaried and 182 non-salaried employees), of which more than half were located outside of Europe – roughly 1,400 employees in South Africa only. Kapsch TrafficCom is positioned
Training and education. Kapsch TrafficCom attaches significant importance to the training of its personnel given that their knowledge and problem-solving skills represent a key success factor. In the fiscal year 2014/15, employees received an average of 4.5 days of training. Besides specialist training, soft skills are also conveyed as part of the training programs run by Kapsch TrafficCom. A job-rotation program, a tailored range of course for trainees and annual staff appraisals are also offered.
Pension fund. Kapsch TrafficCom makes contributions to an external pension fund for employees of group companies in Austria under a defined contribution scheme. The amounts of the payments are based on the individual employee's income and the operating profit margin of the company.
Profit participation. Kapsch TrafficCom is aware of the employees' contribution to its success and acknowledges this through a profit participation plan. The Kapsch TrafficCom Group rewards the commitment of its employees by distributing to them up to 5 % of the group profit before income taxes. Country-specific upper limits have been established to ensure that the distribution reflects local purchasing power. Every employee receives a share, which is independent of the person's salary or wage and limited to EUR 1,500 per employee.
Providing equal opportunities for women and supporting women in their careers are important goals at Kapsch TrafficCom.
Advancement of women. Kapsch TrafficCom is committed to promoting the advancement of women in the workplace. Women are supported through a flexible working hours scheme that is designed to help combine professional and private life. In addition, Kapsch TrafficCom cooperates with schools, universities and universities of applied sciences in order to increase the proportion of women employed, among other goals. The company also promotes women in the workforce through participation in specific programs such as "FIT Frauen in die Technik" or "FemTech". A committee for non-discrimination has been established within the Kapsch TrafficCom Group.
Social responsibility also includes ethically, morally and legally correct behavior.
The framework. Alongside statutory requirements and internal guidelines, the code of conduct of the Kapsch Group defines binding principles for ethically, morally and legally correct behavior that apply therefore to all corporate units – and therefore to all employees of Kapsch TrafficCom. The code of conduct can be found on the website www.kapsch.net.
Additionally, within the scope of internal risk management, all business units over which Kapsch TrafficCom AG has primary influence are audited with regard to their corruption risks, and the employees of the first and second management levels are trained in anti-corruption policy and anti-corruption processes.
In accordance with the corporate values, the Kapsch TrafficCom Group accepts social responsibility that extends even beyond its scope of operation and that is widely organized by the Kapsch Group. Only a selection of supported projects and initiatives are presented below.
Educational institutions. Technical educational institutions are very important to Kapsch as a technology- and innovation-oriented group. The company is therefore interested in establishing contact as early as possible with students as well as graduates of technical education programs. Alongside the Vienna University of Technology and the UAS Technikum Wien, the Kapsch Group has also subsidized the Universitäre Gründerservice Wien GmbH since 2005. This organization aids young entrepreneurs in transforming ideas into convincing business concepts.
Promoting social projects. Kapsch TrafficCom values and supports the work of charitable institutions such as the Institute for Cooperation in Development Projects (ICEP). This private, independent initiative – based in Austria – significantly contributes to combating global poverty. For many years, Kapsch TrafficCom has also been supporting the activities of Doctors Without Borders, an internationally renowned organization that helps people around the world who do not have adequate access to medical care. Kapsch provides the infrastructure for an annual gathering for the Caritas Socialis initiative and since 2013 sponsors the Next Generation Sequencing project of the St. Anna Children's Cancer Research Institute.
Support for art and cultural institutions. The entire Kapsch Group – headed by Kapsch AG – supports many contemporary art and cultural institutions and projects and even initiates its own projects in this sector.
Art Calendar 2016
The Kapsch Group has participated in a general partnership with the Vienna Concert Hall (Wiener Konzerthaus) since 1992 under the motto of "It is an art to make money. It is an obligation to spend money on art." The Vienna Concert Hall offers plenty of space for all culture of high quality. Unusual programs regularly interest new segments of the public without alienating long-term friends of the Concert Hall. The festival "Wien modern" – one of the most famous contemporary music festivals in the world has been supported since 1989.
In the area of visual arts, Kapsch is particularly interested in supporting artists who are still in need of wider recognition. Consideration is therefore given to young artists from Austria and abroad with sponsorship campaigns. The showcase project in this area is the art calendar that the Kapsch Group has published since 1994 and presents annually in late autumn to great fanfare.
Risk management is positioned as its own function within the financial department of Kapsch TrafficCom AG. The main focus of risk management is on project risk management and enterprise risk management (ERM).
The project management encompasses both external customer projects as well as internal development projects and begins in each case during the offer or initiation phase. An analysis of all relevant risks and
opportunities is prepared based on institutionalized processes and supplies the basis for decisions as well as timely planning and implementation of controlling measures.
Risk management entails the identification and analysis of risks and opportunities.
Enterprise risk management (ERM) involves the analysis of major project-related risks of the Kapsch TrafficCom Group as well as strategic, technological, organizational, financial, legal and IT risks, and reports are submitted to the executive board, the audit committee of the supervisory board and the first reporting level on a quarterly basis. The ERM approach is aimed at the early identification, assessment and control of the risks that may materially influence the achievement of the strategic and operational goals of the company. The primary objective in this context is not to avoid risks but to deal with risks in a controlled and deliberate manner and to recognize and realize opportunities as they arise over time in order to make a valuable contribution to the management of the company.
The material risks and opportunities of the group and the respective risk management measures are briefly explained below.
Geographic diversification and expansion of the product portfolio contributes to stabilizing and increasing revenue.
Volatility of new orders. An important part of the revenue of the Kapsch TrafficCom Group is earned in the segment of Electronic Toll Collection (ETC). This segment includes projects for the installation of nationwide, regional or route-specific toll systems as well as the technical and commercial operation of toll systems. The awarding of these projects, including their operation, generally takes place on the basis of invitations to tender. Whether or not the Kapsch TrafficCom Group eventually receives the order is subject to a number of uncertain factors inside and outside the group's area of influence. For example invitations to tender for such large projects can be postponed or withdrawn due to political changes or due to complaints or lawsuits by unsuccessful bidders. There is also a risk that the Kapsch TrafficCom Group may not win with its bids for new projects due to technological, financial, formal or other reasons.
In the past, the revenues of the Kapsch TrafficCom Group have been heavily influenced by whether the given fiscal year had any implementation projects in the ETC segment. High revenue figures were recorded for example in the 2010/11 fiscal year (installation of an electronic toll system in the South African province Gauteng) as well as 2011/12 (installation of the nationwide electronic truck toll system in Poland). In fiscal years 2012/13, 2013/14 and 2014/15, significant revenue came from the installation of the nationwide electronic toll system in Belarus, which also made a major contribution to revenue from installation projects in the 2015/16 fiscal year. In addition, installation projects in Texas, U.S.A., (installation of a managed lane system) and in Sydney, Australia (installation of a toll system on specific route sections), contributed significantly to the increased revenue in the ETC segment.
The continuous expansion into new business areas that are compatible with the core business of Kapsch TrafficCom Group is intended not only to increase revenue but also to smooth over revenue spikes in the interest of more stable revenue development. This should be achieved through increasing geographic diversification through further broadening of the customer and product portfolios and through a continuous increase in the share of revenue from operation and maintenance of offered systems. The technical and commercial operation of systems is generally associated with the awarding of the order for installation of the system, but after the installation is complete, the operation represents a longer term and more reliable source of revenue. In previous fiscal years, it has also been possible to continuously increase the revenue from installation projects of smaller scope. Valuable contributions came here from the segment of Intelligent Mobility Solutions (IMS) and from the geographic regions of the U.S.A. and Australia.
Technical challenges and tight schedules produce typical project risks.
Risks of project execution. In connection with the installation of systems, the Kapsch TrafficCom Group is generally contractually obligated to issue performance and delivery date guarantees. Because electronic toll systems and intelligent mobility solutions are frequently ambitious and technologically complex systems that must be implemented within a strict time frame, missed deadlines and/or system and product defects can occur. Unexpected project modifications, a temporary shortage of skilled workers, quality problems, technical problems and performance problems with suppliers or consortium partners may also have a negative impact on the adherence to delivery dates. If the contractual services are not fulfilled or if deadlines are exceeded, penalties and damages usually have to be paid, in some cases even damages for lost toll revenue. Deadlines far exceeded are often covered by contract clauses that can allow the customer to terminate the contract early. A significant delay in a project, a clear failure to meet the contractually agreed performance criteria or failed implementation of a project could also reduce the chances of success in future tenders. There is also the risk that projects of the Kapsch TrafficCom Group cannot be realized at the previously calculated costs. Due to the strong social opposition to toll systems that is sometimes encountered, the risk of a late or limited start to toll collection exists in many projects, which can have further consequences on payment flows and revenue in the operation project.
The Kapsch TrafficCom Group employs project management methods and project risk management procedures based on the IPMA (International Project Management Association) standards in order to minimize such risks in projects.
Long-term contracts with public agencies. For many projects, contracts are awarded by public agencies. Framework agreements and service contracts in connection with toll or traffic management projects may include terms and conditions that are not negotiable in a tender process and that may be disadvantageous for the Kapsch TrafficCom Group. Some multi-year contracts contain demanding requirements regarding the targeted performance of the implemented systems, components and processes. Failure to meet these requirements can result in considerable contractual penalties, obligations to pay damages or termination of the contract. On the other hand, in some contracts substantial bonus payments may be earned in the case of over-performance. Moreover, in the case of long-term contracts, the achievable margins can also differ from the original calculations due to changes in costs.
Liabilities arising from contracts may include liabilities regarding customers' loss of profit, product liabilities and other liabilities. While the Kapsch TrafficCom Group aims to include appropriate limitations to its liability in contracts, it is still impossible to guarantee that all contracts contain sufficient limitations to the group's liability or that these limitations can be enforced under applicable law.
Ability to innovate. The strong market position of the Kapsch TrafficCom Group is based to a large extent on its ability to develop state-of-the-art, efficient and reliable systems, components and products. The Kapsch TrafficCom Group is committed to an ongoing and consistent innovation process. In order to maintain its high technological standards, the Kapsch TrafficCom Group invests a considerable portion of its revenues in research and development activities. However, if the group does not succeed in developing innovative systems, components and products that meet the needs of the market, this can be detrimental to the competitive position of the Kapsch TrafficCom Group.
Since the striving for innovation leadership is based to a large extent on technology, internal know-how and intellectual property, the global increase in product piracy and reverse engineering may have negative impacts on the market position of the Kapsch TrafficCom Group. In addition, any failures in protecting these technologies may negatively impact the competitive position. The Kapsch TrafficCom Group therefore places great importance on protecting technologies and the company's internal know-how, such as through patents
An ongoing and consistent innovation process supports the strong market position of the Kapsch TrafficCom Group.
The international growth is opening up new opportunities but also poses risks.
and non-disclosure agreements with contractual parties. Moreover, it is possible that newly developed systems, components, products or services could infringe on the intellectual property rights of third parties.
Acquisition and integration of companies as part of the group's growth. One of the strategic objectives of the Kapsch TrafficCom Group is to expand internationally both through organic growth and via selected acquisitions and joint ventures. In implementing this strategy, the Kapsch TrafficCom Group acquires suitable companies around the world and integrates them into the group. In the course of these acquisitions, it is necessary to overcome a number of challenges in order to achieve the desired goals and synergies and to realize the expected opportunities from the acquisition of new technologies and market know-how.
Country risk. Due to the further expansion of business activities in countries outside of Europe, the Kapsch TrafficCom Group is subject to increased political risk in these countries. Significant and unforeseeable political changes can exert a major influence on the ability to implement or operate projects in these countries as well as to make funds available or withdraw them again. Interference with the property rights of the Kapsch TrafficCom Group or problems with business practices and activities may also arise. The Kapsch TrafficCom Group includes these risks in the evaluation of such projects.
Foreign exchange risk. As a global company, the Kapsch TrafficCom Group maintains branches, offices and subsidiaries in many countries outside the eurozone. In the course of implementing projects outside the eurozone, transactions risks arise from possible exchange rate fluctuations that can be reflected in the consolidated financial statements as exchange rate losses or gains. The Kapsch TrafficCom Group strives as far as possible to avoid these transaction risks in the amount of the net currency positions from the respective projects or to hedge them, if necessary. However, because the net currency position at the respective payment flow deadlines is often difficult to predict, hedging is only possible to a limited extent. The remaining exchange rate risk is accepted and included in the business planning. Due to the conversion of individual financial statements of the subsidiaries outside the eurozone into the group currency of the euro, the Kapsch TrafficCom Group is also subject to a translation risk. In addition, long-term disadvantageous exchange rate changes can also cause a change in the position of the Kapsch TrafficCom Group relative to competitors, such as when products or services based on a euro cost structure can no longer be offered at competitive prices outside the eurozone.
Interest rate risk. Within the framework of project financing, the group regularly agrees to variable interest rates that are tied to market interest rates (Euribor, etc.). This exposes the group to interest rate risks. The Kapsch TrafficCom Group utilizes appropriate financial instruments to hedge against interest rate risks when these risks are significant.
Liquidity risk. Sufficient financial resources have to be available for the Kapsch TrafficCom Group to meet its payment obligations at all times. Medium- and long-term financing must be available in order to carry out large-scale projects, such as implementing a nationwide toll system under agreed delayed payment terms from the client, and to acquire other companies. Additionally, implementing large-scale projects often requires the provision of significant bank guarantees to secure bid obligations (bid bonds) or to secure possible warranty claims (performance bonds).
In financing agreements, the Kapsch TrafficCom Group is subject to the usual limitations of its business policy, such as with regard to taking on additional borrowings, the use of assets as collateral or the provision of guarantees and sureties in favor of third parties. The availability of financing and bank guarantees depends not only on market conditions but in particular on the net assets, financial position and earnings situation of the Kapsch TrafficCom Group. A lack of liquid assets (even if the group is otherwise essentially solvent), of
Financial risks arise from exchange rate and interest fluctuations as well as loans. Sufficient liquidity increases flexibility and the ability to take quick action.
financing or of bank guarantees could in turn have an extremely adverse impact on the net assets, financial position and earnings situation of the Kapsch TrafficCom Group.
Furthermore, the liquidity risk is addressed by ongoing group-wide financial and cash planning. Potential liquidity shortages can be identified this way and adequate countermeasures can be taken in good time.
Credit risk. The Kapsch TrafficCom Group is exposed to the risk of non-payment by customers. The main customers of the Kapsch TrafficCom Group are to a large extent state agencies, especially in connection with the installation or operation of nationwide or regional toll and traffic management systems. The Kapsch TrafficCom Group also acts as a subcontractor to third parties (concessionaires, general contractors, etc.) in public sector projects. The scope of a potential non-payment varies depending on the size of the order and can have a noticeable impact on the earnings situation in the case of individual large projects. In principle, however, the customers for such large projects are public agencies. The creditworthiness of new and existing customers is evaluated as necessary, and hedging is performed according to the assessment of the existing non-payment risk. In addition, the Kapsch TrafficCom Group takes advantage of offers from public institutions, such as OeKB (Oesterreichische Kontrollbank AG), EKN (Exportkreditnämnden; Swedish National Export Credits Guarantee Board) and MIGA (Multilateral Investment Guarantee Agency), to hedge against the non-payment risk on the basis of guarantees.
There is also a risk that counterparties of both original and derivative financial instruments (including financial institutions assumed to have good credit ratings) cannot meet their payment liabilities when due. A payment default or the need to impair receivables could have an extremely adverse impact on the net assets, financial position and earnings situation of the Kapsch TrafficCom Group.
Kapsch TrafficCom employs attractive measures to counteract the personnel risk.
The success of the Kapsch TrafficCom Group depends heavily on key personnel with many years of experience. Moreover, the group's ability to recruit qualified staff, integrate them into the company and retain them over the long term is critical. The loss of key personnel and difficulties in the recruitment of personnel could adversely affect the success of the group.
The Kapsch TrafficCom Group employs attractive measures to counteract this risk, such as incentive schemes and opportunities for training and further education.
In connection with participating in tenders of public agencies for the installation and operation of toll and traffic management systems, a number of regulations and statutory requirements must be observed. Assessing and adhering to legal regulations and requirements can result in considerable administrative and technical expense. If applicable regulations or official requirements cannot be met or fulfilled, this can lead to severe penalties and also reduce the possibility of (successfully) taking part in tenders or continuing with the given business activity.
The further expansion of business activities into new regions and into select new IMS business fields tends to increase the risk of patent violations or the violation of intellectual property rights (IPR), which could result in financial damages from lawsuits, court actions and settlement proceedings. The Kapsch TrafficCom Group attempts to counteract this risk as far as possible by performing an evaluation of possible IPR violations prior to entry into new markets or regions, for example. However, it is not possible to completely avoid this risk.
As a technology company, the Kapsch TrafficCom Group is exposed to common IT risks in terms of the security, confidentiality and availability of data. To this end, Kapsch TrafficCom AG has introduced an IT risk management system based on CRISAM, the Corporate Risk and IT Security Application Method, and is also certified according to ISO/IEC 27001 (Information Security Management). Additionally, the toll system operation procedures of the Kapsch TrafficCom Group have been certified according to ISO 20000 "IT Service Management" (similar to ITIL), and CRISAM has been implemented within the group as an IT risk management tool.
The early identification of opportunities opens up new potential.
The enterprise risk management approach of Kapsch TrafficCom AG not only addresses risks but also encompasses the regular identification, evaluation and management of opportunities. The goal of these efforts is to manage the strategic orientation of the product portfolio and market activities through the early identification of opportunities and to develop corresponding potential.
Market opportunities exist in geographic diversification as well as increasing expansion of the customer and product portfolios, driven in part by the following factors:
Due to the increasing financing requirements of infrastructure projects and the growing need to relieve state budgets, there exists an opportunity to develop new markets, especially in emerging and developing countries, as well as an opportunity to expand our activities into already developed markets.
The global rise in traffic volumes and the associated impact on the environment and society open up opportunities in the area of traffic management because measures such as toll collection, road pricing and the establishment of environmental zones or access restrictions are increasingly being employed as controlling instruments of environmental and traffic policy. In the ETC segment as well as with IMS, this is creating opportunities to further develop and market the portfolio according to the new requirements.
The drive to increase the productivity of vehicles and vehicle operations as well as the rising comfort expectations of travelers also open up new opportunities for expanding the functionality of existing systems. This creates opportunities to win new customers outside of public agencies, such as in the area of fleet management, and to serve both public customers and end customers with new concepts for parking space management.
Other opportunities. Constant innovation, technical advancements and the acquisition of new technologies through company acquisitions create opportunities for the Kapsch TrafficCom Group to improve the efficiency and performance of customer systems as well as to gain a technological edge over competitors with regard to the performance and functionality of the offered systems.
From the current perspective, no risks have been identified that could endanger the continued operations of the Kapsch TrafficCom Group. Through the increasing geographic diversification and continued broadening of the product and solution portfolio with select new IMS solutions, the business model of the Kapsch TrafficCom Group has been expanded without necessitating a departure from the core business field. The concentration of risk in individual regions and individual large products is continuously reduced in this way.
The reliability of the internal control system is evaluated by Internal Audit.
Kapsch TrafficCom AG began many years ago to analyze and document the existing accounting-related internal control processes. The results to date were presented to the Supervisory Board for evaluation and discussion in the quarterly meetings of the Audit Committee. Internal Audit ensures through audits, especially in the subsidiaries of Kapsch TrafficCom AG, that a reliable and functional control system is implemented.
As in the previous year, the group-wide uniform documentation of all controls for achieving the key controlling goals was improved again in the 2015/16 fiscal year, and the levels of compliance and efficiency were checked in local evaluations by Internal Audit. The standardized tracking enables improved controlling of measures and serves as the basis for future audits of the performance of local internal control systems.
The processes for group accounting and reporting are based on an accounting manual (IFRS Accounting Manual) that is issued and regularly updated by the Kapsch Group. This manual sets forth the main accounting and reporting requirements for the entire group based on the International Financial Reporting Standards (IFRS). Group guidelines, working instructions and defined procedures constitute another important cornerstone of ICS.
The central elements of the ICS process include regular checks of the established principle of dual control and the segregation of duties as well as defined actions for monitoring the effectiveness and efficiency of operating activities, the reliability of financial reporting and compliance with relevant legal regulations. The ICS guidelines of Kapsch TrafficCom AG follow the basic structures of the internationally recognized standards for internal control systems (COSO – Internal Control and Enterprise Risk Management Integrated Frameworks of the Committee of Sponsoring Organizations of the Treadway Commission).
The accounting of business transactions in the Kapsch TrafficCom Group is managed by a variety of software solutions. In a number of countries, the accounting has been outsourced to local tax accountants due to the size of the subsidiaries. The individual companies submit reporting packages to the head office on a monthly basis containing all relevant accounting data pertaining to the income statement, the balance sheet and the cash flow accounting. This data is then entered into the central consolidation system (Hyperion Financial Management) on a quarterly basis. The financial information is verified at the group level within Kapsch TrafficCom AG and forms the basis for the quarterly reporting in accordance with IFRS.
The Supervisory Board is kept informed of business developments by the Executive Board during regular meetings by way of consolidated presentations consisting of segment reporting, earnings development analysis containing comparisons of current figures with figures from the budget and the previous period as well as selected financial figures, forecasts, group financial statements and changes in the number of employees and order intake.
The internal control system is implemented locally in each company and monitored centrally.
Local management is responsible for implementing and monitoring the internal control system in accordance with the local requirements. The managing directors of the individual subsidiaries are ultimately responsible for establishing and designing internal control and risk management processes that meet the needs of the given company in view of accounting procedures as well as for ensuring compliance with the group-wide rules and guidelines. In order to provide better support to the management teams of the subsidiaries, an ICS officer was established within the Finance department of Kapsch TrafficCom AG. This person is responsible for centrally standardizing the ICS within the entire Kapsch TrafficCom Group, ensuring continuous further development, initiating the improvement of identified weaknesses and periodically reporting to the Audit Committee of the Supervisory Board.
¾On 1 April 2016, Kapsch TrafficCom AG acquired the global transportation segment of Schneider Electric, which previously operated under the name Telvent Tráfico y Transporte. The purchase one of the leading provider of real-time IT solutions and intelligent transportation systems for roughly EUR 27 million expands the Kapsch portfolio and strengthens the market position in intelligent mobility systems.
This acquisition represents an important step toward securing the global leadership of the Kapsch TrafficCom Group in the area of intelligent mobility solutions (IMS), especially in the growing markets of Spain, North and South America and the Middle East.
Kapsch TrafficCom expects revenue of roughly EUR 125 million from the transportation segment as well as a positive contribution to the overall results. The new company should be fully integrated in the 2016/17 fiscal year. As a result of this acquisition, roughly 900 employees of Schneider Electric are being integrated into the Kapsch TrafficCom Group.
Kapsch TrafficCom took another significant step into the area of IMS after the balance sheet date.
The further development of Strategy 2020 remains a focal topic: Kapsch TrafficCom will develop intelligent mobility solutions and contribute to the design of the smart cities of the future.
In fiscal year 2016/17, the contribution by Kapsch TrafficCom Transportation to the revenue and profit of the Kapsch TrafficCom Group will be clearly visible – also the integration costs. The implementation of the newly obtained projects will also make increasing contributions. This applies in particular to the cross-border program "CHARM" and the ETC projects in Chile and Australia.
Kapsch TrafficCom also expects several decisions concerning additional projects: In Austria, the new invitation to tender for the nationwide toll system is currently under way; in Bulgaria, an invitation to tender for a new toll system has begun. In the Czech Republic, the contract continues until the end of 2016. The next steps by the government in Prague will therefore be determined shortly.
In addition, multiple projects are still in the offer phase in the U.S.A. Kapsch TrafficCom also sees increasing potential in Asia. Talks continue concerning a nationwide project similar in structure to the one already successfully implemented in Belarus.
One key focal area for the coming years will be the further development of the strategy 2020. Kapsch TrafficCom will expand the portfolio with new intelligent mobility solutions for exceptional user experiences by the customers. Systems and data will be increasingly intermeshed, and vehicles will be networked with their environment. The acquisition of the transportation segment of Schneider Electric also represents a large step toward the city. Kapsch TrafficCom plans to carefully integrate this area in order to contribute to the design of the smart cities of the future.
Vienna, 8 June, 2016
Georg Kapsch Chief Executive Officer
André Laux Executive board member
Alexander Lewald Executive board member
We declare to the best of our knowledge that the consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the group as required by the applicable accounting standards and that the group management report gives a true and fair view of the development and performance of the business and the position of the group, together with a description of the principal risks and uncertainties faced by the group.
Vienna, 8 June, 2016
Georg Kapsch Chief Executive Officer
André Laux Executive board member
Alexander Lewald Executive board member
Georg Kapsch Chairman/ Chief Executive Officer
Member/ Chief Operating Officer
Alexander Lewald Member/ Chief Technology Officer
Finance, mergers & acquisitions, investor relations, compliance, strategy, legal, international subsidiaries & management systems, IT, human resources, marketing & public relations, baseline solution management, new ventures and sales region North America
All sales regions except for North America, production & logistics, supply chain management and delivery & operations
Engineering
| All amounts in EUR | Note | 2015/16 | 2014/15 |
|---|---|---|---|
| Revenues | (1) | 526,091,567 | 456,377,377 |
| Other operating income | (2) | 17,028,271 | 21,220,911 |
| Changes in finished and unfinished goods and work in progress | (3) | -12,290,757 | -5,276,194 |
| Other own work capitalized | 708,875 | 104,353 | |
| Cost of materials and other production services | (4) | -201,861,358 | -168,034,419 |
| Staff costs | (5) | -153,160,789 | -148,102,477 |
| Amortization and depreciation | (6) | -14,532,982 | -16,434,371 |
| Impairment charge | (6) | 0 | -12,342,000 |
| Other operating expenses | (7) | -99,636,031 | -94,763,384 |
| Operating result | 62,346,797 | 32,749,796 | |
| Finance income | (8) | 12,901,839 | 13,255,371 |
| Finance costs | (8) | -20,473,837 | -26,306,798 |
| Financial result | -7,571,998 | -13,051,426 | |
| Results from associates | (14) | 40,617 | 233,819 |
| Result before income taxes | 54,815,416 | 19,932,188 | |
| Income taxes | (9) | -18,355,734 | -8,524,107 |
| Result for the period | 36,459,682 | 11,408,081 | |
| Result attributable to: | |||
| Equity holders of the company | 31,091,775 | 3,629,908 | |
| Non-controlling interests | 5,367,907 | 7,778,173 | |
| 36,459,682 | 11,408,081 | ||
| to the equity holders of the company (in EUR) diluted undiluted |
(32) (32) |
2.39 2.39 |
0.28 0.28 |
| Other comprehensive income for the period: Items subsequently reclassified to the result for the period: |
|||
| Currency translation differences | 2,504,663 | -12,558,566 | |
| Currency translation differences from net investments in foreign operations | -2,334,164 | 9,045,070 | |
| Available-for-sale financial assets: | |||
| Fair value gains/losses recognized in other comprehensive income | -4,606,733 | 2,030,730 | |
| Reclassification of cumulated net losses to the result for the period (impairment) | 1,237,309 | 12,185,425 | |
| Reclassification of cumulated net gains to the result for the period (sale of available-for-sale financial assets) |
-3,317,930 | 0 | |
| Income tax relating to items subsequently reclassified to the result for the period | 1,422,895 | -2,389,978 | |
| Total items subsequently reclassified to the result for the period | -5,093,960 | 8,312,681 | |
| Items subsequently not reclassified to the result for the period: | |||
| Remeasurements of liabilities from post-employment benefits | -231,196 | -3,164,172 | |
| Income tax relating to items subsequently reclassified to the result for the period | 92,528 | 645,608 | |
| Total items subsequently not reclassified to the result for the period | -138,668 | -2,518,564 | |
| Other comprehensive income for the period net of tax | (10) | -5,232,628 | 5,794,117 |
| Total comprehensive income for the period | 31,227,054 | 17,202,198 | |
| Total comprehensive income attributable to: | |||
| Equity holders of the company | 23,744,417 | 9,226,306 | |
| Non-controlling interests | 7,482,637 | 7,975,892 | |
| 31,227,054 | 17,202,198 |
| All amounts in EUR | Note | 31 March 2016 | 31 March 2015 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Property, plant and equipment | (12) | 20,866,937 | 22,393,204 |
| Intangible assets | (13) | 64,911,212 | 71,250,401 |
| Interests in associates | (14) | 1,917,126 | 2,013,952 |
| Other non-current financial assets and investments | (15) | 18,651,333 | 23,099,327 |
| Other non-current assets | (16) | 18,877,084 | 28,137,787 |
| Deferred tax assets | (22) | 11,895,081 | 13,590,224 |
| 137,118,772 | 160,484,896 | ||
| Current assets | |||
| Inventories | (17) | 35,757,354 | 47,669,688 |
| Current tax receivables | (18) | 3,754,362 | 3,336,345 |
| Trade receivables and other current assets | (18) | 196,158,016 | 202,050,857 |
| Other current financial assets | (15) | 96,813 | 5,290,815 |
| Cash and cash equivalents | (19) | 140,782,047 | 96,764,803 |
| 376,548,591 | 355,112,509 | ||
| Total assets | 513,667,364 | 515,597,404 | |
| EQUITY | |||
| Capital and reserves attributable to equity holders of the company | |||
| Share capital | (20) | 13,000,000 | 13,000,000 |
| Capital reserve | 117,508,771 | 117,508,771 | |
| Retained earnings and other reserves | 92,338,014 | 77,449,325 | |
| 222,846,785 | 207,958,096 | ||
| Non-controlling interests | 7,811,064 | 11,403,134 | |
| Total equity | 230,657,849 | 219,361,230 | |
| LIABILITIES | |||
| Non-current liabilities | |||
| Non-current financial liabilities | (21) | 85,733,509 | 88,984,654 |
| Liabilities from post-employment benefits to employees | (23) | 24,107,382 | 25,210,018 |
| Non-current provisions | (26) | 1,395,787 | 1,661,173 |
| Other non-current liabilities | (24) | 3,332,528 | 4,656,718 |
| Deferred income tax liabilities | (22) | 3,190,360 | 2,379,882 |
| Current liabilities | 117,759,566 | 122,892,444 | |
| Trade payables | 52,040,998 | 48,441,473 | |
| Other liabilities and deferred income | (25) | 79,341,558 | 65,535,073 |
| Current tax payables | 3,572,533 | 1,173,523 | |
| Current financial liabilities | (21) | 21,349,269 | 48,968,988 |
| Current provisions | (26) | 8,945,590 | 9,224,672 |
| 165,249,949 | 173,343,730 | ||
| Total liabilities | 283,009,514 | 296,236,174 | |
| Total equity and liabilities | 513,667,364 | 515,597,404 | |
| Non | ||||||
|---|---|---|---|---|---|---|
| controlling | ||||||
| All amounts in EUR | Attributable to equity holders of the company | interests | Total equity | |||
| Consolidated | ||||||
| Share | Capital | Other | retained | |||
| capital | reserve | reserves | earnings | |||
| Carrying amount as of 31 March 2014 | 13,000,000 | 117,508,771 | -13,712,693 | 86,003,813 | 10,310,208 | 213,110,099 |
| Effects from increase in shares of subsidiaries | -4,068,101 | 41,799 | -4,026,302 | |||
| Effects from initial consolidation of subsidiaries | 4,900 | 4,900 | ||||
| Dividend | -6,929,665 | -6,929,665 | ||||
| Result for the period | 3,629,908 | 7,778,173 | 11,408,081 | |||
| Other comprehensive income for the period: | ||||||
| Currency translation differences | -5,972,483 | 197,719 | -5,774,764 | |||
| Fair value gains/losses on available-for-sale financial assets | 14,087,445 | 14,087,445 | ||||
| Remeasurements of liabilities from post-employment | ||||||
| benefits | -2,518,564 | -2,518,564 | ||||
| Carrying amount as of 31 March 2015 | 13,000,000 | 117,508,771 | -12,184,396 | 89,633,721 | 11,403,134 | 219,361,230 |
| Effects from acquisition of subsidiaries | 0 | 21,006 | 21,006 | |||
| Effects from increase in shares of subsidiaries | -2,404,359 | -4,338,526 | -6,742,885 | |||
| Effects from decrease in shares of subsidiaries | 48,632 | -48,632 | 0 | |||
| Dividend | -6,500,000 | -6,708,555 | -13,208,555 | |||
| Result for the period | 31,091,775 | 5,367,907 | 36,459,682 | |||
| Other comprehensive income for the period: | ||||||
| Currency translation differences | -1,360,690 | 2,114,730 | 754,040 | |||
| Fair value gains/losses on available-for-sale financial assets | -5,848,000 | 0 | -5,848,000 | |||
| Remeasurements of liabilities from post-employment | ||||||
| benefits | -138,668 | -138,668 | ||||
| Carrying amount as of 31 March 2016 | 13,000,000 | 117,508,771 | -21,887,481 | 114,225,495 | 7,811,064 | 230,657,849 |
Share capital. The total number of shares issued is 13,000,000. The shares are ordinary bearer shares and have no par value.
Capital reserve. Capital reserve includes those reserves that have not been established from results of prior periods.
Other reserves. Other reserves contain effects of changes in the investment interest held in subsidiaries as well as reserves from other comprehensive income, for example currency translation differences and fair value gains/losses on available-for-sale financial assets after deduction of deferred taxes and remeasurements of liabilities from post-employment benefits after deduction of deferred taxes.
Consolidated retained earnings. Retained earnings include the net result for the fiscal year as well as past earnings of the entities included in consolidation, to the extent that these results have not been distributed as dividends.
Non-controlling interests. Non-controlling interests represent the third party shares in the equity of consolidated subsidiaries.
The effects from acquisition of subsidiaries in the fiscal year 2015/16 result from the acquisition of shares in Streetline International, Inc., Delaware, U.S.A.
The effects from the increase in shares of subsidiaries in the fiscal year 2015/16 result from the acquisition of the remaining shares in TMT Services and Supplies (Pty) Ltd., Cape Town, South Africa. The effects from the increase in shares in the fiscal year 2014/15 result from the acquisition of the 3 % remaining shares in Kapsch Telematic Services GmbH, Vienna.
| All amounts in EUR | Note | 2015/16 | 2014/15 |
|---|---|---|---|
| Cash flow from operating activities | |||
| Operating result | 62,346,797 | 32,749,796 | |
| Adjustments for non-cash items and other reconciliations: | |||
| Scheduled depreciation and amortization | (6) | 14,532,982 | 16,434,371 |
| Impairment charge | (6) | 0 | 12,342,000 |
| Increase/decrease in obligations for post-employment benefits | (23) | -1,776,532 | -245,363 |
| Increase/decrease in other non-current liabilities and provisions | (24, 26) | -1,250,875 | -31,271 |
| Increase/decrease in other non-current receivables and assets | (15) | -9,700,466 | 3,646,195 |
| Increase/decrease in trade receivables (non-current) | (16) | 22,463,531 | 46,367,768 |
| Increase/decrease in trade payables (non-current) | (24) | -602,836 | -891,853 |
| Other (net) | -328,646 | -1,798,344 | |
| 85,683,957 | 108,573,298 | ||
| Changes in net current assets: | |||
| Increase/decrease in trade receivables and other assets | (18) | 6,472,721 | 6,031,721 |
| Increase/decrease in inventories | (17) | 11,912,334 | 10,438,069 |
| Increase/decrease in trade payables and other current payables | 12,884,830 | -15,462,030 | |
| Increase/decrease in current provisions | (26) | -279,082 | -19,153,077 |
| 30,990,803 | -18,145,317 | ||
| Cash flow from operations | 116,674,760 | 90,427,981 | |
| Interest received | (8) | 2,679,338 | 1,773,062 |
| Interest payments | (8) | -5,226,812 | -5,982,746 |
| Net payments of income taxes | -16,225,090 | -11,006,156 | |
| Net cash flow from operating activities | 97,902,196 | 75,212,141 | |
| Cash flow from investing activities | |||
| Purchase of property, plant and equipment | (12) | -7,049,013 | -7,374,407 |
| Purchase of intangible assets | (13) | -2,944,424 | -993,841 |
| Purchase of securities, investments and other non-current financial assets | (15) | -100,293 | -361,651 |
| Payments for the acquisition of entities (less cash and cash equivalents of these entities) | 2,542,784 | 0 | |
| Payments for the acquisition of shares in at-equity-consolidated entities | -69 | 0 | |
| Proceeds from the disposal of property, plant and equipment and intangible assets | 2,771,393 | 1,353,079 | |
| Proceeds from the disposal of securities and other financial assets | 5,374,761 | 0 | |
| Net cash flow from investing activities | 595,139 | -7,376,820 | |
| Cash flow from financing activities | |||
| Contributions from shareholders | 0 | 4,900 | |
| Dividends paid to parent company's shareholders | -6,500,000 | 0 | |
| Dividends paid to non-controlling interests | -6,708,555 | -6,929,665 | |
| Payments for the acquisition of non-controlling interests | -6,742,885 | -2,000,000 | |
| Increase in non-current financial liabilities | (21) | 470,947 | 183,719 |
| Decrease in non-current financial liabilities | (21) | 0 | 0 |
| Increase in current financial liabilities | (21) | 2,829,828 | 7,053,189 |
| Decrease in current financial liabilities | (21) | -32,926,939 | -30,219,823 |
| Net cash flow from financing activities | -49,577,604 | -31,907,680 | |
| Net increase/decrease in cash and cash equivalents | 48,919,731 | 35,927,641 | |
| Change in cash and cash equivalents | |||
| Cash and cash equivalents at beginning of year | (19) | 96,764,803 | 57,731,290 |
| Net increase/decrease in cash and cash equivalents | 48,919,731 | 35,927,641 | |
| Exchange gains/losses on cash and cash equivalents | -4,902,488 | 3,105,873 | |
| Cash and cash equivalents at end of year | (19) | 140,782,047 | 96,764,803 |
The Kapsch TrafficCom Group is an international supplier of sophisticated Intelligent Transportation Systems (ITS). Up until 31 December 2015, it reported on the primary segments RSP (Road Solution Projects), SEC (Systems, Extensions and Component Sales) and OTH (Others). The RSP segment included the cash-generating units "RSP-ETC" and "RSP-ITS". The SEC segment showed the cash-generating units "SEC-ETC" and "SEC-ITS".
In the course of a strategy project, the Kapsch TrafficCom Group decided to change the structure and the related corporate control in the fiscal year 2015/16. As a result of this project, Electronic Toll Collection (ETC) and Intelligent Mobility Solutions (IMS) have been the Group's divisions as of the fourth quarter of the fiscal year 2015/16. The Group is now also divided into and managed by three regional clusters (management reporting), with the clusters being Americas (comprising North and South America), EMEA (comprising Europe, the Middle East and Africa) as well as APAC (comprising Asia and the Pacific).
In accordance with the provisions of IFRS 8.12, the Group aggregated the regions into two segments. Since the identified segments each show amounts (revenues, results and assets) in excess of the thresholds defined under IFRS 8.13, these segments also represent the reportable segments pursuant to IFRS 8.
The reportable segments according to IFRS 8 are as follows:
The segment Electronic Toll Collection (ETC) reflects projects for the installation, maintenance and operation of systems for electronic collection of tolls without stopping at a toll station as well as manual toll systems. These are generally projects awarded based on invitations to tender by public agencies or private concessionaires. The systems cover either individual road sections or nationwide road networks. After installation, additional deliveries of components frequently take place for the expansion or adaptation of the systems.
The segment Intelligent Mobility Solutions (IMS) reflects projects for the installation, maintenance and operation of systems for traffic monitoring, traffic control and traffic safety. Projects for the monitoring of utility vehicles and for electronic vehicle registration as well as intelligent parking solutions and systems for intermodal mobility are also assigned to this segment as are systems and services for operational monitoring of public transportation and environmental installations.
The parent company (reporting entity) of this group is Kapsch TrafficCom AG, Vienna. Until June 2007 KAPSCH-Group Beteiligungs GmbH, Vienna, (immediate parent company of the reporting entity), a whollyowned subsidiary of DATAX HandelsgmbH, had been the sole shareholder of Kapsch TrafficCom AG. DATAX HandelsgmbH, Vienna, is the controlling entity of the reporting entity and the ultimate parent of Kapsch Group.
As of 31 March 2016 KAPSCH-Group Beteiligungs GmbH has a share of 63.28 % (31 March 2015: 63.13 %) in Kapsch TrafficCom AG, Vienna. The shares of Kapsch TrafficCom AG in free float are listed in the Prime Market segment of the Vienna Stock Exchange since 26 June 2007.
The parent company, Kapsch TrafficCom AG, is a joint stock corporation incorporated and domiciled in Vienna, Austria. The address of its registered office is 1120 Vienna, Am Europlatz 2.
As of 31 March 2016 the consolidated group consists of 48 entities (31 March 2015: 47 entities). The consolidated group changed as follows:
| 2015/16 | 2014/15 | |
|---|---|---|
| Amount of entities at the beginning of the fiscal year | 47 | 48 |
| Initial consolidation | 3 | 3 |
| Mergers | -1 | -3 |
| Deconsolidations | -1 | -1 |
| Amount of entities in the consolidated group | 48 | 47 |
In the fiscal year 2015/16 Streetline Inc., Delaware, U.S.A., Streetline International, Inc., Delaware, U.S.A. as well as SPS Funding Co. LLC, Delaware, U.S.A., were acquired. Afterwards Streetline Inc. was merged into KTCSL Merger Corp. and since then trades under the name Streetline Inc.
In the fiscal year 2015/16 Kapsch Telematic Services Kft. "v.a.", Budapest, Hungary, was liquidated and therefor deconsolidated.
The regional distribution of our subsidiaries is as follows:
| Anzahl | 2015/16 | 2014/15 |
|---|---|---|
| Austria | 6 | 6 |
| EMEA (Europe excl. Austria, Middle East, Africa) | 25 | 26 |
| Americas | 13 | 11 |
| APAC (Asia and Pacific) | 4 | 4 |
| Total | 48 | 47 |
For further information on interests in subsidiaries see note 29.
The accounting policies applied in the preparation of these consolidated financial statements are set out below:
Pursuant to Section 245a Austrian Commercial Code (UGB), the consolidated financial statements as of 31 March 2016 have been prepared in accordance with International Financial Reporting Standards (IFRS) as well as the International Financial Reporting Standards Interpretations Committee (IFRS IC) as adopted by the European Union (EU). The consolidated financial statements as of 31 March 2016 are prepared under the historical cost convention, with the exception of available-for-sale securities and derivative financial instruments, which are measured at fair value at the balance sheet date. Pertinent explanations can be found within the scope of the corresponding accounting policies.
The preparation of the consolidated financial statements in conformity with IFRS requires the use of estimates
and assumptions which influence the amount and presentation of assets and liabilities reported at the balance sheet date as well as 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 figures may differ from these estimates. The areas involving a higher degree of judgment or complexity as well as areas where assumptions and estimates are material to the consolidated financial statements are disclosed in note 26.
For ease of presentation, amounts have been rounded and, unless indicated otherwise, are presented in thousands of euros (TEUR). However, calculations are done using exact amounts, including the digits not shown, which may lead to rounding differences.
| Applicable to | Material impact on | |||
|---|---|---|---|---|
| Published by the IASB | financial years | group´s consolidated | ||
| New/adopted IFRSs | (adopted by the EU) | beginning on or after | financial statement | |
| IAS 19 | Employee Benefits (Amendment) | November 2013 | 1 July 2014 | None |
| Annual improvement to IFRSs, 2010 – 2012 | ||||
| IFRS 2 | Share-based Payment | December 2013 | 1 July 2014 | None |
| IFRS 3 | Business Combinations | December 2013 | 1 July 2014 | None |
| IFRS 8 | Operating Segments | December 2013 | 1 July 2014 | None |
| IFRS 13 | Fair Value Measurement | December 2013 | 1 July 2014 | None |
| IAS 16 | Property, Plant and Equipment | December 2013 | 1 July 2014 | None |
| IAS 24 | Related Party Disclosures | December 2013 | 1 July 2014 | None |
| IAS 38 | Intangible Assets | December 2013 | 1 July 2014 | None |
| Annual improvement to IFRSs, 2011 – 2013 | ||||
| IFRS 1 | First-time Adoption to International Financial | |||
| Reporting Standards | December 2013 | 1 July 2014 | None | |
| IFRS 3 | Business Combinations | December 2013 | 1 July 2014 | None |
| IFRS 13 | Fair Value Measurement | December 2013 | 1 July 2014 | None |
| IAS 40 | Investment Property | December 2013 | 1 July 2014 | None |
| Applicable to | Material impact on | |||
|---|---|---|---|---|
| Published by the IASB | financial years | group´s consolidated | ||
| New/adopted IFRSs | (adopted by the EU) | beginning on or after | financial statement | |
| IFRS 14 | Regulatory Deferral Accounts | January 2014 | 1 January 2016 | None |
| IFRS 11 | Joint Arrangements (Amendment) | May 2014 | 1 January 2016 | None |
| IAS 16 | Amendments to Property, Plant and Equipment | |||
| IAS 38 | and Intangible Assets | May 2014 | 1 January 2016 | None |
| IAS 16 | Amendments to Property, Plant and Equipment | |||
| IAS 41 | and Agriculture | June 2014 | 1 January 2016 | None |
| IAS 27 | Separate Financial Statements (Amendment) | August 2014 | 1 January 2016 | None |
| IAS 1 | Presentation of Financial Statements (Amendment) | December 2014 | 1 January 2016 | None |
| Annual improvement to IFRSs, Cycle 2012 – 2014 | ||||
| IFRS 5 | Non-current Assets Held for Sale and | |||
| Discontinued Operations | September 2014 | 1 July 2016 | None | |
| IFRS 7 | Financial Instruments | September 2014 | 1 July 2016 | None |
| Applicable to | Material impact on | |||
|---|---|---|---|---|
| Published by the IASB | financial years | group´s consolidated | ||
| New/adopted IFRSs | (adopted by the EU) | beginning on or after | financial statement | |
| IAS 19 | Employee Benefits | September 2014 | 1 July 2016 | None |
| IAS 34 | Interim Financial Reporting | September 2014 | 1 July 2016 | None |
| IAS 12 | Income Taxes (Amendments) | January 2016 | 1 January 2017 | impact will be assessed |
| IAS 7 | Statement of Cash Flows (Amendments) | January 2016 | 1 January 2017 | impact will be assessed |
| IFRS 15 | Revenue from Contract with Customers | May 2014 | 1 January 2018 | impact will be assessed |
| IFRS 9 | Financial Instruments | July 2014 | 1 January 2018 | impact will be assessed |
| IFRS 16 | Leases | January 2016 | 1 January 2019 | impact will be assessed |
There are no other standards or interpretations that are not yet effective that would be expected to have a material impact on the group.
The consolidated financial statements were prepared by the management board on the undersigned date and released for publication. The entity financial statements of the parent company, which have been included in the consolidated financial statements after transition to the applicable accounting standards, have not yet been approved by the supervisory board on the undersigned date.
Subsidiaries are all companies (including structured companies) where the group exerts its control. The group controls an associated company if the group is exposed to fluctuating returns arising from its interest in the subsidiary, is in possession of entitlements to these returns and has the ability to influence such returns by virtue of its position of power with respect to the associated company. Subsidiaries are included within the consolidated financial statements (full consolidation) as from the time when the parent company has acquired control over the subsidiary. They are deconsolidated at the time when such control is relinquished.
All group internal assets and liabilities, equity, expenses and income as well as unrealized gains and losses from transactions between group companies are completely eliminated in the course of group consolidation.
Transactions with non-controlling interests are treated as transactions with equity owners of the group. Depending on the ownership structure, the group splits the gains or losses as well as all components of the comprehensive income to the interests of the parent company and the non-controlling interests. Even in the event of a negative balance of the non-controlling interests, the total comprehensive income is attributed to the parent company and the non-controlling interests. For purchases of non-controlling interests, the difference between any consideration paid and the relevant interest acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity, unless a change in the percentage of shares held leads to a loss of control of the interest.
If a change in the percentage of shares held does not lead to the loss of control of the interest, the transactions are to be shown under equity. The carrying amounts for both the controlling and non-controlling interests are correspondingly set so as to ensure they reflect any changes to the existing shareholdings. Every deviation between the amount by which the non-controlling interests are adjusted and the fair value of the paid or received consideration is to be directly recognized under equity and allocated to the owners of the parent company.
If the group loses its control over any of the companies, the assets and liabilities of the former subsidiary are to be removed from the consolidated balance sheet. The remaining interest is to be remeasured at fair value and regarded as the initially recognized value of a financial asset pursuant to IAS 39 "Financial Instruments: recognition and measurement" or as acquisition costs in case of the addition of an interest in an associated company or joint venture. Any resulting gains or losses which are attributable to the controlling interest are recognized in the income statement. In addition, any amounts previously recognized in other comprehensive income with respect to the previous subsidiary are accounted for as if the group had directly disposed of the related assets or liabilities. This means that amounts previously recognized in other comprehensive income are reclassified from equity to the result for the period.
The group applies IFRS 11 to all joint arrangements. As at balance sheet date of 31 March 2016 there are no joint arrangements according to IFRS 11.
Associates are entities in which the group has a significant but not a controlling influence, generally accompanied by a shareholding of between 20% and 50% of the voting rights. Associates are reported using the equity method and initially recognized at acquisition costs. Following the acquisition date, the share of the company in the result of the associate is recorded in the statement of comprehensive income and the share of changes in other comprehensive income is recognized in other comprehensive income with a corresponding adjustment being made to the carrying amount of the interest. Dividends received from the affiliated company reduce the carrying amount of the interest. Goodwill arising on acquisition of associates is not separately shown but as part of the carrying amount of associates.
If the percentage of shares held in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognized in other comprehensive income is reclassified to the profit or loss for the period where appropriate.
The accumulated shares of the group in the gains and losses as well as the other comprehensive income of the associate following acquisition are offset against the carrying amount of the interest. 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.
At each balance sheet date the group checks whether there are any indications showing that the investment in an associate is impaired. If this is the case, the impairment requirement is determined as the difference arising from the carrying amount of the interest of the associate and the corresponding recoverable amount and recognized separately in the statement of comprehensive income. Significant unrealized gains from transactions between the group and associates are eliminated to the extent of the group's interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
The accounting policies of associates correspond substantially to those of the parent company.
The group uses the acquisition method of accounting to account for business combinations as at the acquisition date. The acquisition date relates to the date of transfer of control to the group.
The consideration transferred for the acquisition is the fair value of the assets transferred, the equity interests issued by the group and the liabilities incurred or assumed as at the transaction date. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed in full as incurred.
In accordance with IFRS 3, any assets acquired and liabilities (including contingent liabilities) assumed in a business combination are measured at their full fair values as at the acquisition date, irrespective of the extent of any non-controlling interests. Intangible assets are recognized separately from goodwill if they are separable from the entity or result from statutory, contractual or other legal rights. No new restructuring provisions may be recognized within the scope of the purchase price allocation. Any remaining positive differences, which compensate the seller with market opportunities that cannot be identified more closely and with development potential, are capitalized as goodwill in the respective cash generating unit (CGU).
Any contingent consideration to be transferred by the group is recognized at fair value as at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is measured in accordance with IAS 39 and a resulting profit or loss recognized in the statement of comprehensive income. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity. Any contingent consideration included in the financial statements resulting from business combinations prior to the application of IFRS 3 (2008) is still treated in accordance with the requirements under IFRS 3 (2004).
If the combination is achieved in stages, the equity capital share previously held in the acquired company by the acquirer is remeasured at the fair value as at the acquisition date. Any resulting profit or loss is to be charged to be credited or charged to the income statement.
Any hidden reserves and liabilities uncovered are carried forward in line with the corresponding assets and liabilities.
The determination of the fair values requires certain estimates and assumptions, in particular of the acquired intangible assets and property, plant and equipment, of the liabilities assumed as well as of the useful lives of the acquired intangible assets and property, plant and equipment.
The group recognizes any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognized amounts of the acquiree's net assets.
The group determines the goodwill at the acquisition date as:
If the excess is negative, a gain on a bargain purchase is recognized directly in the result for the period.
Items included in the financial statements of each of the group's entities are measured using the currency of the primary economic environment in which the entity operates (functional currency). The consolidated financial statements are presented in euros, which is the Kapsch group's presentation currency.
In accordance with IAS 21, financial statements of foreign subsidiaries which are included in the consolidated financial statements are translated as follows:
The statement of comprehensive income of foreign entities (except for foreign entities from hyperinflationary countries) that have a functional currency different from the euro are translated into the group's presentation currency at average exchange rates of the fiscal year, balance sheets at the prevailing mean exchange rate at the balance sheet date. The reference rates of the European Central Bank (ECB) and Deutsche Bundesbank, which are accessible via the Austrian Central Bank's (Oesterreichische Nationalbank) website, serve as the basis for the translation. If no current exchange rates are available, this will result in the exchange rates as disclosed by the national banks being used. Differences arising from the currency translation of foreign operations into euros are recognized under other comprehensive income and collected under equity.
Exchange differences arising from the translation of the net investment subsidiaries are recognized in the statement of other comprehensive income under currency translation differences. When a foreign entity is sold, such exchange differences are recognized in the statement of comprehensive income as part of the gain or loss on disposal of shares in subsidiaries.
Goodwill and adjustments to the fair value in connection with the acquisition of a foreign company are treated as the assets and liabilities of the foreign company in question and converted in the course of initial consolidation at the transaction rate and subsequently converted with the key date exchange rate as at the financial statements key date of the business operation.
Average exchange rate Exchange rate as at the balance sheet date Wechselkurse zum Euro 2015/16 2014/15 2015/16 2014/15 AUD 1.497 1.452 1.481 1.415 CAD 1.443 1.440 1.474 1.374 CZK 27.164 27.580 27.051 27.533 PLN 4.224 4.181 4.268 4.085 SEK 9.324 9.213 9.225 9.290 USD 1.101 1.265 1.139 1.076 ZAR 15.148 13.950 16.787 13.132
The main exchange rates used during the fiscal year are shown below:
In the fiscal year 2011/12, Kapsch Telematic Services IOOO, Minsk, Republic of Belarus, was founded. As at the balance sheet date of 31 March 2016, the Republic of Belarus is still classified as a hyperinflationary economy. The group analyzed if IAS 29 (Financial reporting in hyperinflationary economies) had to be applied to the subsidiary. Since the euro, and not the Belorussian ruble (BYR), is the functional currency, the classification of the Republic of Belarus as a hyperinflationary economy has no impact on the accounting of the Belorussian subsidiary and thus also does not affect the present consolidated financial statements. IAS 29 is therefore not applied.
Transactions in foreign currencies are translated into the functional currency at the exchange rate as at the transaction date or, in case of new measurements, as at the time of the measurement. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of comprehensive income. Non-monetary items in the balance sheet are translated at historical exchange rates; non-monetary items which were recognized at their lower net realizable value are translated at the exchange rate prevailing at the time of measurement.
Foreign exchange gains and losses which are attributable to cash and cash equivalents as well as borrowings are presented in the statement of comprehensive income within finance income or cost. All other foreign exchange gains and losses are presented in the statement of comprehensive income in other operating income or other operating expenses.
This excludes foreign exchange gains and losses from monetary items to be received from/to be paid to foreign operations as part of a net investment in a foreign operation. Such foreign exchange gains and losses are initially recognized in other comprehensive income and are then reclassified from equity to profit or loss if the net investment is sold. In the fiscal year 2013/14, two USD loans granted by Kapsch TrafficCom AG to US subsidiaries were classified as net investments in a foreign operation pursuant to IAS 21 since the management board of the Kapsch TrafficCom AG does not plan for a redemption of these loans in the foreseeable future and since such redemption is not likely to occur. The exchange rate differences arising from these loans are recognized in other comprehensive income (see Note 10).
The group's activities expose it to a variety of financial risks, particularly foreign exchange risk, interest rate risk and credit risk. The group's risk management focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the group's financial performance. The group does not employ hedge accounting as envisaged by IAS 39.
The group has initiated several processes to make risk management more effective and to embed best practice standards. Risk management has been positioned as a separate function within the finance department of Kapsch TrafficCom AG. According to the group´s internal control system (ICS), the existing internal control processes relating to financial reporting are documented. Local management is responsible for implementation, design and monitoring of the ICS in order to comply with group-wide guidelines and regulations. An ICS officer has been appointed who assits local management. The main task is to standardize and continuously improve the ICS in the entire Kapsch TrafficCom Group, to monitor the compliance and effectiveness of controls and improve weaknesses, as well as to report regularly to the audit committee of the supervisory board. The internal audit verifies the reliability of the internal control system. The defined processes are based on COSO ERM (Enterprise Risk Management Framework of the Committee of Sponsoring Organizations of the Treadway Commission) and on ONR 49000/ISO 31000 Risk Management Systems, the regulations of the Austrian Standards Institute.
The foreign exchange risk originates from future business transactions, assets and liabilities as well as net investments of foreign business locations if business transactions are executed in a currency or could come about in the course of normal business operations which are not in conformity with the functional currency of the respectively subsidiary (hereinafter referred to as "foreign currency").
The group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Czech crown, the Polish zloty; the Australian dollar, the South African rand and the US dollar. Because the terms of agreement are stipulated in euros, no foreign exchange risk arises to the group with regard to the Belorussian ruble. Customer orders are mainly invoiced in the local currencies of the group companies. Only in cases in which the group expects to be exposed to significant foreign exchange risk, major orders denominated in foreign currencies will be hedged by forward foreign exchange contracts.
If the exchange rate of the stated currencies (resulting from current and non-current receivables and payables) as of 31 March 2016 (31 March 2015) had increased by the percentage rate ('volatility') stated below, the result before tax, provided all other variables had remained unchanged, would have been higher (+) or lower (-), respectively, by the following amounts:
| Währung | Effect on equity in TEUR | ||||||
|---|---|---|---|---|---|---|---|
| Currency | 2015/16 | 2014/15 | |||||
| Volatility +10 % | Volatility -10 % | Volatility +10 % | Volatility -10 % | ||||
| AUD | -138 | 169 | -107 | 131 | |||
| CAD | -416 | 509 | -1,702 | 2,080 | |||
| CZK | -319 | 390 | -207 | 253 | |||
| EUR | 3,573 | -4,367 | 3,768 | -4,606 | |||
| PLN | -141 | 172 | -331 | 404 | |||
| SEK | -511 | 625 | -415 | 507 | |||
| USD | -4,760 | 5,817 | -3,870 | 4,730 | |||
| ZAR | -951 | 1,162 | -836 | 1,021 |
| Währung | Effect on equity in TEUR | ||||
|---|---|---|---|---|---|
| 2015/16 | 2014/15 | ||||
| Currency | Volatility +10 % | Volatility -10 % | Volatility +10 % | Volatility -10 % | |
| NOK | -1,348 | 1,647 | -1,754 | 2,143 |
Interest rate risk is the risk arising from fluctuations in the value of financial instruments, other balance sheet items (e.g. receivables and payables) and/or cash flows due to fluctuations in the market interest rates. For fixed-interest balance sheet items, the risk comprises the present value risk. In case the market interest rate for the financial instrument fluctuates, either a profit or a loss may result if the financial instrument is sold prior to maturity.
In the case of variable-interest balance sheet items, the risk relates to the cash flow. With variable-interest financial instruments, adjustments in the interest rates may result from changes in the market interest rates. Such changes would entail changes in interest payments. Variable-interest (both current and non-current) financial liabilities account for approximately 30 % of interest-bearing financial liabilities. If the market interest rate had been 100 basis points higher (lower) as of 31 March 2016, this, as in the prior year, would not have had any material impact on the result of the group.
Derivative instruments in an insignificant proportion exist in the group to minimize interest rate risk of financial liabilities (see note 21).
As part of the group's risk management policy, the group only engages in business relationships with third parties deemed to be creditworthy and has implemented policies to ensure that the group sells only 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. There is usually a credit risk in the implementation phase of large toll collection projects. With the exception of the toll collection projects in America, Czech Republic, South Africa, Poland and the Republic of Belarus (see note 18), there is no concentration of credit risk relating to trade receivables, since the group generally has a large number of customers worldwide. Based on the group's experiences, the default risk for trade receivables can be considered low.
The maximum credit risk is similar to book values:
| All amounts in TEUR | 2015/16 | 2014/15 |
|---|---|---|
| Other non-current financial assets and investments | 18,651 | 23,099 |
| Other non-current assets | 18,877 | 28,138 |
| Current securities | 97 | 5,291 |
| Trade receivables and other current assets | 199,912 | 205,387 |
| Cash and cash equivalents | 140,782 | 96,765 |
| 378,320 | 358,680 |
The Kapsch TrafficCom group attaches considerable importance to the ongoing monitoring, control and measurement of financial and liquidity positions in order to reduce financial risk. This crucial task is carried out at the level of the operational entities, is monitored and optimized in the overall group.
The group controls liquidity risks predominantly by maintaining suitable financial reserves, by issuing bonds, through customer pre-payments and the continuous reconciliation of the terms of receivables, liabilities and financial assets. To this end, cash flow forecasts are made at regular intervals for short-term periods (the next 12 weeks), on a quarterly basis for the medium term (current fiscal year) as well as for long-term periods (in accordance with long-term payment obligations, particularly those arising from loans). Suitable measures for ensuring sufficient liquidity are then deducted from these forecasts.
Furthermore, the management monitors the rolling forecasts of the group's liquidity reserves to ensure that it has sufficient liquidity to meet operational needs and also to secure an adequate scope of unutilized credit lines at any time. The Kapsch TrafficCom group holds high amounts of cash which also serve as a liquidity reserve. As a result, the group's liquidity situation is currently good.
The Kapsch TrafficCom group endeavors to reduce the payment default risk of customers as far as possible by mandatory creditworthiness checks prior to the signing of orders and additionally for major projects by securing payments through guarantees. It cannot be completely ruled out, however, that some defaults might still occur, which would then have a major negative impact on the development of the results and liquidity of the Kapsch TrafficCom group.
The Kapsch TrafficCom group avoids becoming dependent on individual banks by making sure that the financial structure is always distributed over several partner banks. Major repayment obligations (pertaining as a rule to long-term contracts, e.g. in the case of corporate bonds or long-term loans with redemption at maturity) are monitored on an ongoing basis. At an early stage, measures are taken to ensure that the agreed-upon payment obligations are met (either by checking the income from operational cash flow or through timely refinancing activities).
The Kapsch TrafficCom group employs a risk-averse investment strategy. Liquid funds are held such that they are generally available in the short term and can therefore be used quickly whenever needed. When it comes to securities, conservative securities funds, which are actively managed on an ongoing basis and include an appropriate share of bonds, are used as a rule for the coverage and hedging of pension obligations. In the event of international financial market turbulence, however, the financial investments made might still develop unfavorably or individual securities might even become untradeable. This might result in reductions in value and impairments, which in turn have a negative impact on the financial result and equity of the Kapsch TrafficCom group. Such a crisis also increases the default risk of individual issuers of securities or their customers. In addition, the group might for strategic reasons acquire a direct interest in individual entities by purchasing shares. A sufficiently bad performance of these entities might also necessitate an impairment, which in turn leads to the mentioned negative impact on the financial result and equity.
The group is exposed to equity securities price risk resulting from a material investment, since a Norwegian investment (Q-Free ASA, Norway), is classified as available for sale in the consolidated balance sheet.
The table below summarizes the impact of increases/decreases in the stock price of Q-Free ASA, Norway, on the equity. The analysis is based on the assumption that the stock price increases/decreases by 10 % with all other variables held constant.
| ISIN | Volatility | Effect on equity in TEUR | ||
|---|---|---|---|---|
| 2015/16 | 2014/15 | |||
| NO0003103103 | +10 % | 1,482 | 1,929 | |
| NO0003103103 | -10 % | -1,482 | -1,929 |
The group is not exposed to any material commodity price risks.
Capital management is carried out in line with value-driven and sustainable corporate governance on the basis of the profit and loss accounts of the individual business segments. Accounting ratios and other economic criteria as well as the long-term development of the group are also monitored and taken into account with regard to corporate governance. A crucial ratio for the capital structure is the gearing ratio calculated as the ratio of net debt to equity. Net debt (net assets) comprises current and non-current borrowings less cash on hand, bank balances and current securities. The Kapsch group's capital management strategy aims among other things to ensure that the group companies' capital resources comply with local requirements. Furthermore, the group focuses on maintaining the gearing ratio on an annual average within a range from 25 % to 35 % in order to be still able to borrow at reasonable cost. The group also continuously monitors if all covenants comply with credit agreements. The highly volatile project business may, nonetheless, be responsible for the gearing ratio strategy and/or the required covenants not being complied with under certain circumstances. Cash and cash equivalents as of 31 March 2016 reached a record height, which resulted in a disclosure of net assets for the previous fiscal year.
In the reporting year, all external capital requirements resulting from the project financing of the nationwide truck toll collection system in the Republic of Belarus were fulfilled.
The objective of these measures is to safeguard the ability to continue as a long-term going concern in order to show to shareholders and other stakeholders that their requirements can be fulfilled in a high-quality and sustainable manner and that returns for shareholders and benefits for other stakeholders can be provided. Other essential objectives of the group's capital management include the financing of the envisaged growth path and the maintenance of an optimal capital structure.
| All amounts in TEUR | 2015/16 | 2014/15 |
|---|---|---|
| Non-current financial liabilities | 85,734 | 88,985 |
| Current financial liabilities | 21,349 | 48,969 |
| Total financial liabilities | 107,083 | 137,954 |
| Cash on hand and at banks | 140,782 | 96,765 |
| Current securities | 97 | 5,291 |
| Net assets /Net debt | 33,796 | -35,898 |
| Equity | 230,658 | 219,361 |
| Net gearing | n.e. | 16 % |
Historical cost is based on the fair value as at the acquisition date. The fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (IFRS 13.9). In measuring the fair value of an asset or a liability, the group takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date (IFRS 13.11).
To the greatest extent possible, the group uses observable market data for the fair value measurement of assets or liabilities. Depending on the availability of observable input factors and their impact on the fair value measurement as a whole, the fair value is assigned to one of three levels in the following fair value hierarchy:
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. A qualifying asset is an asset (inventories, manufacturing plants, toll collection projects, power generation facilities, intangible assets and investment in properties) that requires a substantial period of time (with regard to the group at least 12 months) to be made ready for its intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization within a specific period.
In the fiscal year 2015/16, none of the assets recognized by the group met the requirements of a qualifying asset; therefore, no borrowing costs were capitalized.
All other borrowing costs are expensed in the period in which they are incurred.
Property, plant and equipment are recognized at acquisition and production cost less accumulated depreciation. Depreciation is charged on a straight-line basis over the expected useful lives of the assets in accordance with the group policies:
Properties are not subject to scheduled depreciation. The useful lives generally range between 3 to 26 years for plants and buildings on leasehold land, 4 to 20 years for technical equipment and machinery, and 3 to 10 years for other equipment, factory and office equipment. The assets' useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset's carrying amount is written down to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.
Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. The carrying amount of those assets which were replaced is derecognized. Expenses for repairs and maintenance which do not necessitate a significant replacement investment (i.e. day to day servicing) are charged to the income statement during the financial period in which they are incurred.
The difference between the proceeds from the disposal of property, plant and equipment and the carrying amount is recognized as profit or loss in the result from operating activities.
Goodwill arises on the acquisition of subsidiaries, associates and joint ventures and represents the excess of the consideration transferred for the acquisition beyond the group's interest in net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree, the fair value of the non-controlling interest in the acquiree and the fair value of the acquirer's previously held equity interest in the acquiree, if the combination is achieved in stages, at the acquisition date. If the acquisition costs are less than the net assets of the acquired subsidiary measured at fair value, the difference is recognized directly in the statement of comprehensive income.
Goodwill impairment reviews are undertaken at least annually or more frequently if events or changes in circumstances indicate a potential impairment. As a rule, the group carries out the annual goodwill impairment review in the fourth quarter. In addition, the group carries out impairment tests during the year if a triggering event occurs that may cause the asset to be impaired.
For the purpose of impairment testing, goodwill is allocated to each of the cash generating units (CGU) or groups of cash generating units which are expected to benefit from the synergies of the business combination and have reported the goodwill. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes.
The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value less costs to sell. If the carrying value of a CGU exceeds the recoverable amount, an impairment is to be recognized. First, goodwill is amortized by the amount of the impairment. If the impairment exceeds the carrying value of goodwill, the carrying values of the remaining assets of this CGU are proportionately reduced.
The value in use of a cash generating unit corresponds to the present value, calculated using the discount cash flow method, of the future cash flows which the entity will receive from the cash generating unit. In order to determine the value in use, the expected future cash flows plus taxes based on the post-tax discount rate that reflects the current market expectations with regard to the interest effect and the specific risks of the cash generating units, are written down to their present values. In the process, the current planning, covering a period of four years (detailed forecast period) and approved by management, is used as the basis with subsequent transition to perpetuity. The growth rates according to the detailed forecast period are based on historical growth rates and on external studies on the future medium-term market development.
The fair value less costs to sell is determined using an appropriate valuation model which is based on the medium-term planning of the respective cash generating unit. The valuation is made in line with the discounted cash flow calculations and verified through suitable multiples, if available.
The impairment loss of goodwill is recognized in the statement of comprehensive income. Write-ups on goodwill are not made.
Computer software, trademarks and similar rights are capitalized on the basis of the costs incurred for acquisition and amortized over their estimated useful lives of 4 to 30 years. Acquired customer agreements (toll contracts, maintenance agreements) are recognized at acquisition costs and amortized over the estimated useful lives that generally range between 2 and 10 years.
Research expenditures are recognized as an expense. Costs incurred for development projects (relating to the design and tests of new or improved products) are recognized as intangible assets when the following criteria are fulfilled:
c) there is an opportunity to use or sell the intangible asset;
d) it can be demonstrated how the intangible asset will generate probable future economic benefits;
Other development expenditures that do not meet these criteria are recognized as an expense. The costs for producing the intangible asset are capitalized as from the point in time when the above criteria are initially met. Development costs previously recognized as an expense cannot be subsequently capitalized. Capitalized development costs are amortized using the straight-line method on the basis of the normal useful life, which generally ranges between three and five years.
Capitalized development assets are tested for impairment annually in accordance with IAS 36, as long as they are not yet available for use.
Assets that have an indefinite useful life – for example, goodwill or intangible assets not ready for use – are not subject to amortization and are tested annually for impairment. Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the asset should be impaired.
An impairment loss is recognized for the amount by which the asset's carrying value exceeds its recoverable amount. The recoverable amount is the higher of an asset's net selling price and its value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows. Assets, with the exception of goodwill, that have been subject to an impairment adjustment in the past are reviewed for possible reversal of the impairment at each subsequent reporting date.
The difference between the recoverable amount of assets and their carrying amount is recognized as income or expense in the result from operating activities. Gains are not classified as revenue.
The residual carrying values and useful lives are reviewed at each balance sheet date and adjusted as necessary.
Financial instruments include financial assets (such as securities, investments, non-current receivables, loans, trade receivables and cash and cash equivalents) as well as financial liabilities (such as corporate bonds, other financial liabilities, trade payables, other non-current liabilities and derivative financial instruments).
Financial instruments are subdivided as follows:
The classification depends on the nature and purpose of the financial assets and is determined on initial recognition.
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorized as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months, otherwise they are classified as non-current.
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity that an entity has the positive intention and ability to hold to maturity.
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of it within 12 months of the end of the reporting period.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets.
Financial assets recognized under non-current assets and other short-term financial assets include availablefor-sale securities, investments and financial assets at fair value through profit or loss.
Available-for-sale securities and investments are carried at fair value. Unrealized gains and losses arising from the changes in fair value of available-for-sale securities and investments are recognized in other comprehensive income.
The difference arising on the sale of financial assets between the proceeds and the carrying amounts is taken through profit or loss in the statement of comprehensive income. Additionally, the amount recognized in equity is taken through profit or loss in the statement of comprehensive income. All acquisitions and sales are recognized at the respective date of the transaction, with transaction costs being included in acquisition costs.
The group assesses at each balance sheet date whether there is objective evidence of impairment of each significant individual financial asset or group of financial assets.
If such evidence exists, the group accounts for such impairment, and the amounts of the available-for-sale financial assets previously recognized in equity are removed from equity and recognized through profit or loss in the statement of comprehensive income. The cumulative loss reclassified from equity to profit or loss is the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognized in profit or loss.
If, in subsequent periods, the fair value of the impaired financial instrument increases and such increase is directly related to an event occurring after the impairment was recognized through profit or loss in the statement of comprehensive income, the group reverses the impairment loss. In the case of debt instruments, the reversal is recognized in the profit for the period in the statement of comprehensive income; in the case of equity instruments, it is recognized directly in equity.
Financial assets at fair value through profit and loss are carried at fair value. Unrealized gains and losses arising from the changes in fair value of financial assets at fair value through profit or loss are recognized immediately in the statement of comprehensive income.
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 initially carried at cost less transaction costs and are recognized at the reporting date less any impairments made.
At each balance sheet date, the group assesses whether there is an objective evidence of impairment of each significant individual financial asset or group of financial assets. If such evidence exists the amount of the loss is measured as difference between the financial asset's carrying amount and the present value of estimated future cash flows discounted at the current market rate of a comparable financial asset. Such impairments must not be reversed.
For accounting purposes, derivative financial instruments are treated as stand-alone derivatives (i.e. as independent transactions and not as hedging transactions). Therefore they qualify as held-for-trading financial instruments and are valued at fair value through profit or loss as attributable as at the date of contract conclusion. The fair value corresponds to the value which the relevant entity would receive or have to pay upon liquidation of the deal on the balance sheet date. Positive market values at the balance sheet date are recognized under financial assets, and negative market values under other liabilities.
Changes in the fair value of these derivative financial instruments are recognized immediately in the statement of comprehensive income within other income or expense or the financial result, depending on the derivative financial instrument's purpose.
The group does not employ hedge accounting as envisaged by IAS 39.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables (e.g. trade receivables, other receivables, cash on hand and at banks) are initially recognized at fair value plus transaction costs and subsequently measured at amortized cost using the effective interest method, less allowance for bad debts.
At each balance sheet date, the group assesses whether there is objective evidence of impairment. Evidence of impairment may include the following: indications that the debtors or a group of debtors is experiencing significant financial difficulties, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization, and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. The amount of the loss is measured as the difference between the asset´s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not occurred) discounted at the financial asset´s original effective interest rate.
The amount of the loss is recognized in the statement of comprehensive income.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related to an event occurring after the event was recognized, the reversal of the previously recognized impairment loss is recognized in the statement of comprehensive income.
Leasing agreements in which the group as the lessee bears a substantial part of the risks and rewards associated with the use of an asset are accounted for as finance leases.
The respective assets are capitalized under non-current assets at the net present value of minimum lease payments or the fair value of the leased asset, whichever is lower, and are depreciated over their expected useful lives. A liability with regard to finance leases is recognized in the same amount. The difference between the minimum lease payments and the accrued net present value is recognized as interest expense. The interest component is spread over the agreed term of the lease using the effective interest rate method.
Leases in which a substantial part of the risks and rewards associated with the use of an asset are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged as rental expense to the statement of comprehensive income on a straight-line basis over the period of the lease.
Government grants with regard to purchased non-current assets (technical equipment) are deferred and taken through profit or loss over the estimated useful life of the respective asset. Government grants are recognized at their fair value, provided it is sufficiently certain that the group will comply with all attached conditions and the grant will be received.
Other government grants received as compensation for expenses or losses already incurred are immediately taken through profit or loss.
Inventories are stated at cost or, if lower, at net realizable value. Cost is determined using the moving average price method. Production cost includes all directly attributable expenses and fixed and variable overheads (based on normal operating capacity) incurred in connection with the production. It excludes, however, borrowing costs as they cannot be allocated to a qualifying asset. Net realizable value is the estimated selling price in the ordinary course of business less applicable variable selling expenses.
The group accounts for construction contracts in accordance with IAS 11. When the outcome of a construction contract can be estimated reliably and it is probable that the contract will be profitable, contract revenue is recognized over the period according to the percentage of completion 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.
If the result of the construction contract cannot be reliably determined, contract revenue will only be recognized in the amount of the contract costs incurred which are likely to be recoverable. Contract costs are recognized as expenses in the period in which they occur.
The carrying amount results from comparing the total of accumulated costs incurred by the balance sheet date plus the profit calculated according to the percentage of completion method (prorated) or loss (in full) on the respective construction contract to the invoiced amounts. Depending on maturity, the balance is recognized either under non-current assets, under current assets (amounts due from customers for contract work) or under current liabilities (amounts due to customers for contract work). Any amounts received prior to the rendering of production services are recognized in the consolidated balance sheet as liabilities under prepayments received.
Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. Receivables with a remaining term of up to one year are recognized as current receivables; all others are recognized as non-current receivables.
In the presentation of the cash flow statement, cash and cash equivalents include cash on hand, deposits held at call and other cash at banks. Overdrafts are recognized in the balance sheet under current financial liabilities.
Provisions are set up when the group has a present legal or constructive obligation to third parties as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. If such a reliable estimate is not possible, no provisions are set up. Provisions are measured based on the present value of the estimated settlement amount. The settlement amount is the best possible estimate of an expense on the basis of which a current obligation might be settled at the balance sheet date or transferred to a third party. This estimate takes into account future cost increases that are foreseeable and likely to occur on the balance sheet date. If they are material, provisions are discounted using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognized as interest expense.
Provisions for warranties and liabilities for construction flaws, 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 on the basis of the group of obligations, 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 incurred for defects to be rectified under the warranty for products sold before the balance sheet date.
Provisions for onerous contracts are recognized if the expected benefit to be derived from the contract is less than the unavoidable costs of meeting the obligations under the contract. The provision is measured at the present value of the amount from the fulfillment of the contract or any compensation payments in case of nonperformance, whichever is lower. The recognition of impairment losses on assets dedicated to such "onerous" contracts is, however, established prior to the recognition of the provisions for onerous contracts.
The group provides various post-employment benefits to employees and other long-term benefits either based on individual agreements or in accordance with local labor law provisions.
A defined contribution plan is a pension plan under which the group pays fixed contributions into a separate non-group entity (fund). The group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. A defined benefit plan is a pension plan that is not a defined contribution plan.
Typically, defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.
The projected unit credit method is used for the calculation of liabilities arising from pension obligations and termination benefits in accordance with IAS 19. According to this method, post-employment costs for employee benefits are recognized in the statement of comprehensive income in such a way that scheduled costs are spread over the employees' years of service on the basis of an expert opinion by a qualified actuary, who completely re-measures the schemes annually. The obligations for pension payments are calculated at the present value of future benefits using interest rates of high-quality corporate bonds whose term roughly equals the term of the liability. The liability recognized in the balance sheet with respect to defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets.
Costs arising from defined benefit plans from pension obligations and termination benefits include the following components:
Contributions paid by the group under a defined contribution pension scheme are charged to the statement of comprehensive income under staff costs in the period in which they occur.
For the calculation of liabilities arising from obligations for jubilee bonuses in accordance with IAS 19, the projected unit credit method is used. Jubilee 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 jubilee bonuses is performed in a similar way as the calculation for liabilities arising from termination benefits. The expected expenses of these benefits are recognized in the result for the period.
The tax expense for the period comprises current and deferred tax. Tax is generally recognized in the statement of comprehensive income. Only taxes that relate to items recognized in other comprehensive income are recognized in other comprehensive income.
The current income tax charge is calculated on the basis of the tax laws applicable at the balance sheet date in the countries where the subsidiaries and associates operate and generate taxable income. The local management is responsible together with the local fiscal representative for the preparation of tax returns, particularly relating to matters subject to interpretations and for setting up provisions, if reasonable, for amounts payable to tax authorities.
Deferred income tax assets/liabilities are 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 financial statements. However, if the deferred income tax assets/liabilities arise 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 IFRS profit or loss nor taxable profit or loss, it is not accounted for. Likewise, deferred taxes are not recognized if they arise from the initial recognition of goodwill.
Deferred income tax assets/liabilities are 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 profit will be available against which the temporary differences can be utilized. In addition, it is to be assumed that such temporary differences will be reversed in the foreseeable future.
The carrying value of deferred income tax assets is reviewed annually at the balance sheet date and impaired if it is no longer likely that sufficient taxable income will be available to realize such assets partially or in full.
Temporary differences mainly arise in connection with depreciation (amortization) periods of non-current assets, provisions for pension benefits, other post-employment benefits, differences regarding the measurement of receivables and payables and tax loss carry-forwards.
Deferred income tax liabilities are 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.
Taking into account the corresponding terms, deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.
Liabilities are recognized at amortized cost using the effective interest rate method. Liabilities with a remaining term of up to one year are recognized as current liabilities, those with longer terms are recognized as noncurrent liabilities. Liabilities denominated in foreign currencies are measured at the current rate at the balance sheet date. Borrowings are initially recognized at fair value, net of transaction costs incurred, and subsequently stated at amortized cost. Borrowing costs are charged to the statement of comprehensive income in the period in which they are incurred.
Contingent liabilities occur for two reasons. For one, they comprise possible obligations that arise from past events and whose existence will be confirmed by uncertain future events that are at least partly beyond the group's control. For another, they comprise present obligations that fail to meet general or special recognition standards (i.e. the amount of an obligation cannot be measured with sufficient reliability or an outflow of resources to settle the obligations is not deemed probable).
The group discloses contingent liabilities unless the possibility of an outflow of resources embodying economic benefits is remote and a liability does not have to be recognized pursuant to IFRS.
In accordance with IAS 18, revenue is recognized at the fair value of the compensation received or outstanding in the statement of comprehensive income upon delivery and once the significant risks and rewards of ownership of the goods are transferred to the customer, net of discounts, other price reductions and eliminated sales within the group.
Revenues from sales of services are recognized in the reporting period in which the services are rendered, by reference to the rate of completion of the specific transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided.
Revenues from sales of maintenance relate to the services under the single maintenance contracts rendered in the respective reporting period.
Revenue for construction contracts (mainly toll collection projects) is recognized in accordance with the percentage-of-completion method provided the conditions under IAS 11 are met.
Other revenue is recognized by the group as follows:
The group makes estimates and assumptions concerning the future development. The resulting accounting estimates will, by definition, rarely equal the related actual results. All estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
In particular, estimates and assumptions regarding revenue recognition have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fiscal year.
The group uses the percentage-of-completion method in accounting for its construction contracts. At the balance sheet date of 31 March 2016, the amounts due from customers for contract work amounted to TEUR 116,462 (2014/15: TEUR 110,983) and the amounts due to customers for contract work amounted to TEUR 20,340 (2014/15: TEUR 17,786). The use of the percentage-of-completion method requires the group to estimate the expected profit mark-up for the construction contract. Sensitivity analyses on assumptions made by the executive board of Kapsch TrafficCom AG indicate that the operating result would fluctuate by TEUR 11,090 (2014/15: TEUR 10,104) and the total comprehensive income for the period would fluctuate by TEUR 8,188 (2014/15: TEUR 7,578) if the actual margin of the significant projects deviated by 10 % from estimates. The analysis of assumptions made in the past as well as of actual profit mark-ups showed that the estimates had been reliable up to now.
In accordance with the accounting policy stated in note 3, the group tests annually whether goodwill has suffered any impairment. The recoverable amount of cash generating units is determined on the basis of the calculation of the value in use. These calculations require the use of estimates.
Sensitivities for the acquired goodwill are detailed in note 13.
Further areas where assumptions and estimates are significant to the consolidated financial statements include inventories, deferred income tax assets/liabilities, liabilities from post-employment benefits to employees and provisions for warranties, project risks and losses. Sensitivity analyses of the assumptions made by management in connection with inventories, deferred income tax assets/liabilities and provisions indicate that no material effect will arise if the actual final outcomes were to differ from the estimates made by 10 %.
The sensitivities for obligations for post-employment benefits to employees are detailed in note 23.
As a non-financial entity, the group does not have a major investment portfolio and currently holds only one significant AFS financial instrument (Q-Free ASA, Norway); refer to Note 15. Against this backdrop, no fixed rates or time bands were defined to establish whether a "significant" or a "prolonged" decline in accordance with IAS 39.61 exists. As a consequence, the Group measures equity instruments classified as "available for sale" on an individual basis, taking particularly into account qualitative criteria (e.g. volatility of equity instruments held, trading volume or adverse developments of the issuer). It is especially with instruments of lower liquidity and/or high volatility that higher percentages (of up to 30%) are used to establish whether a decline in value is considered to be "significant".
The reporting on operating segments is consistent with the internal reporting provided to the chief operating decision-maker (management approach). The chief operating decision-maker is responsible for allocating resources to the operating segments and assessing their performance. The executive board has been identified as the chief operating decision-maker.
With regard to the change in segment reporting made in fiscal year 2015/16 we refer to general information in the notes to the consolidated financial statements as well as to note 13.
Figures in the disclosure notes are presented in euro thousands (TEUR) unless otherwise stated.
The group reports two operating segments (see section "General Information"):
The segment information, considering the new segment structure as described in the section General information, follows the same principles and same accounting policies as applied in these consolidated financial statements.
The segment results for the fiscal year ended 31 March 2016 are as follows (in EUR million):
| Consolidated | |||
|---|---|---|---|
| ETC | IMS | group | |
| Revenues | 442.1 | 84.0 | 526.1 |
| Operating result | 63.7 | -1.3 | 62.3 |
The segment results for the fiscal year ended 31 March 2015 are as follows (in EUR million):
| Consolidated | |||
|---|---|---|---|
| group | |||
| ETC | IMS | (adjusted) | |
| Revenues | 389.3 | 67.1 | 456.4 |
| Operating result | 33.5 | -0.8 | 32.7 |
The adjustment of the fiscal year 2014/15 results from the new reporting structure.
The segment assets and liabilities as of 31 March 2016 as well as capital expenditure, depreciation, amortization and impairment and other non-cash-effective positions for the period then ended are as follows (in EUR million):
| Consolidated | |||
|---|---|---|---|
| ETC | IMS | group | |
| Assets | 299.0 | 41.3 | 340.3 |
| Investments in associates | 0.0 | 1.9 | 1.9 |
| Liabilities | 153.0 | 19.7 | 172.7 |
| Capital expenditure | 8.4 | 1.6 | 10.0 |
| Depreciation, amortization and impairment | 12.1 | 2.5 | 14.5 |
| Other non-cash-effective positions | 0.3 | 0.3 | 0.6 |
The segment assets include property, plant and equipment, intangible assets, other non-current assets, inventories as well as trade receivables and other current assets.
The segment liabilities include liabilities from post-employment benefits to employees, non-current provisions, other non-current liabilities, trade payables, other liabilities and deferred income, current tax payables as well as current provisions.
The segment assets and liabilities as of 31 March 2015 as well as capital expenditure, depreciation, amortization and impairment and other non-cash-effective positions for the period then ended are as follows (in EUR million):
| Consolidated | |||
|---|---|---|---|
| group | |||
| ETC | IMS | (adjusted) | |
| Assets | 328.2 | 46.6 | 374.8 |
| Investments in associates | 1.9 | 0.1 | 2.0 |
| Liabilities | 128.4 | 27.5 | 155.9 |
| Capital expenditure | 7.0 | 1.4 | 8.4 |
| Depreciation, amortization and impairment | 27.1 | 1.7 | 28.8 |
| Other non-cash-effective positions | 13.5 | 0.1 | 13.5 |
The adjustment of the fiscal year 2014/15 results from the new reporting structure.
The breakdown of revenue by customer who contributed more than 10 % to the result for the year is as follows. In addition, the respective segments are shown (in EUR million):
| 2015/16 | 2014/15 (adjusted) | |||||
|---|---|---|---|---|---|---|
| Revenues | ETC | IMS | Revenues | ETC | IMS | |
| Customer 1 | 84.6 | x | x | 79.2 | x | x |
| Customer 2 | 68.3 | x | 66.4 | x | ||
| Customer 3 | 58.3 | x | 40.2 | x | ||
| Customer 4 | 50.7 | x | 52.5 | x |
The adjustment of the fiscal year 2014/15 results from the new reporting structure.
Revenues are segmented by the location of the customer and balance sheet figures by the location of the company.
The figures for the fiscal year ended 31 March 2016 are as follows (in EUR million):
| EMEA | Consolidated | ||||
|---|---|---|---|---|---|
| Austria | (excl. Austria) | Americas | APAC | group | |
| Revenues | 39.8 | 332.2 | 118.2 | 35.9 | 526.1 |
| Non-current non-financial | |||||
| assets | 15.1 | 32.7 | 30.1 | 7.9 | 85.8 |
The figures for the fiscal year ended 31 March 2015 are as follows (in EUR million):
| Consolidated | ||||
|---|---|---|---|---|
| EMEA | group | |||
| Austria | (excl. Austria) | Americas | APAC | (adjusted) |
| 38.2 | 297.9 | 92.6 | 27.7 | 456.4 |
| 17.0 | 37.0 | 31.8 | 7.8 | 93.6 |
The adjustment of the fiscal year 2014/15 results from the new reporting structure.
Revenues are classified into the following categories:
| 2015/16 | 2014/15 | |
|---|---|---|
| Sales of goods | 132,474 | 122,072 |
| Sales of services | 344,391 | 367,157 |
| Sales of maintenance | 32,755 | 33,183 |
| Accrued/deferred sales, license sales and discounts on invoiced sales | 16,472 | -66,035 |
| 526,092 | 456,377 |
| 2015/16 | 2014/15 | |
|---|---|---|
| Exchange rate gains from operating activities | 6,776 | 10,458 |
| Research tax credits | 1,394 | 2,427 |
| Income from the sale of non-current assets | 35 | 293 |
| Income from costs recharged | 105 | 106 |
| Sundry operating income | 8,718 | 7,937 |
| 17,028 | 21,221 |
Sundry operating income mainly relates to the assumption of costs of transactions billed for the nationwide electronic truck toll collection system in the Czech Republic.
| 2015/16 | 2014/15 | |
|---|---|---|
| Change in unfinished goods and work in progress | -8,129 | -759 |
| Change in finished goods | -4,162 | -4,517 |
| -12,291 | -5,276 |
| 2015/16 | 2014/15 | |
|---|---|---|
| Cost of materials | 84,696 | 74,766 |
| Cost of purchased services | 117,165 | 93,268 |
| 201,861 | 168,034 |
| 2015/16 | 2014/15 | |
|---|---|---|
| Wages, salaries and other remunerations | 127,258 | 121,129 |
| Expenses for social security and payroll-related taxes and contributions | 19,948 | 20,775 |
| Expenses for termination benefits (see Note 23) | 259 | 281 |
| Expenses for pensions (see Note 23) | 7 | 11 |
| Contributions to pension funds and other external funds (see Note 23) | 1,390 | 1,214 |
| Fringe benefits | 4,300 | 4,693 |
| 153,161 | 148,102 |
As of 31 March 2016, the number of staff amounted to persons 3,716 (31 March 2015: 3,545 persons) and averaged 3,514 persons in the fiscal year 2015/16 (2014/15: 3,510 persons).
| 2015/16 | 2014/15 | |
|---|---|---|
| Depreciation of property, plant and equipment | 6,905 | 7,676 |
| Amortization of intangible assets | 7,628 | 8,758 |
| Impairment | 0 | 12,342 |
| 14,533 | 28,776 |
| 2015/16 | 2014/15 | |
|---|---|---|
| Communication and IT expenses | 18,359 | 18,862 |
| Legal and consulting fees | 17,851 | 10,860 |
| Rental expenses | 13,326 | 13,073 |
| Exchange rate losses from operating activities | 8,140 | 6,974 |
| Travel expenses | 7,783 | 6,840 |
| Marketing and advertising expenses | 6,518 | 6,959 |
| License and patent expenses | 3,971 | 3,972 |
| Automobile expenses | 3,835 | 4,524 |
| Office expenses | 3,418 | 3,025 |
| Maintenance | 3,388 | 3,347 |
| Insurance costs | 3,371 | 3,242 |
| Taxes and charges | 1,795 | 1,524 |
| Warranty costs and project financing | 1,630 | 1,796 |
| Training costs | 1,664 | 1,714 |
| Transport costs | 1,049 | 939 |
| Bank charges | 737 | 562 |
| Adjustment of provision for warranties | 624 | 331 |
| Membership fee | 545 | 373 |
| Losses on disposal of non-current assets | 508 | 227 |
| Commissions and other fees | 268 | 515 |
| Remuneration to supervisory board | 120 | 54 |
| Damages | 63 | 1,720 |
| Allowance and write-off of receivables | 43 | 995 |
| Reorganisation costs | 0 | 1,760 |
| Other | 631 | 575 |
| 99,636 | 94,763 |
The increase in legal and consulting fees by TEUR 6,991 mainly relates to current legal cases and consulting fees for acquisitions.
The item "Other" includes other administrative and selling expenses.
| 2015/16 | 2014/15 | |
|---|---|---|
| Interest and similar income: | ||
| Interest income | 2,610 | 1,690 |
| Income from securities | 69 | 84 |
| Income from interest accretion of non-current receivables | 3,698 | 5,946 |
| Gains from the disposal of financial assets | 3,362 | 0 |
| Exchange rate gains from financing activities | 3,162 | 5,536 |
| 12,902 | 13,255 | |
| Interest and similar expenses: | ||
| Interest expense | -5,227 | -5,983 |
| Impairment of other investments | -1,513 | -18,525 |
| Expense from interest accretion of non-current payables | -264 | -252 |
| Exchange rate losses from financing activities | -12,724 | -742 |
| Interest expense from liabilities from post-employment benefits to employees | -509 | -757 |
| Interest expense from liabilities from anniversary bonuses to employees | -23 | 0 |
| Expense from change in fair value of derivative financial instruments | -213 | -47 |
| -20,474 | -26,307 | |
| -7,572 | -13,051 |
The exchange rate gains/losses from financing activities in the group mainly result from exchange rate fluctuations of the translation of intercompany financing of subsidiaries in North America and South Africa.
The impairment of other investments in fiscal year 2014/15 concern the impairment, recognized in the interim financial report of the second quarter as impairment in the result for the period, due to the ongoing unfavorable development of the share price of the investment in Q-Free ASA, Trondheim, Norway amounting to TEUR 12,185 (see Note 10) as well as further net exchange losses in the third quarter of the fiscal year 2014/15 amounting to TEUR 6,340. In the fourth quarter of the fiscal year 2014/15 the exchange rate has recovered again and the increase in value was recognized in the other comprehensive income.
| 2015/16 | 2014/15 | |
|---|---|---|
| Current taxes | -15,445 | -9,909 |
| Deferred taxes (see Note 22) | -2,911 | 1,385 |
| Total | -18,356 | -8,524 |
| Thereof income/expense from group taxation | -5,276 | -4,641 |
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:
| 2015/16 | 2014/15 | |
|---|---|---|
| Result before income taxes | 54,815 | 19,932 |
| Arithmetic tax expense based on a tax rate of 25 % (2014/15: 25 %) | -13,704 | -4,983 |
| Unrecognized deferred tax assets on current losses | -6,305 | -14 |
| Utilization of previously unrecognized tax losses | 0 | 2,895 |
| Different foreign tax rates | 3,134 | -3,310 |
| Tax allowances claimed and other permanent tax differences | -480 | -4,892 |
| Income and expenses not subject to tax and other differences | 1,123 | 1,152 |
| Adjustment in respect to prior year | -2,123 | 628 |
| Recognized tax expense | -18,356 | -8,524 |
In the fiscal year 2014/15 a disproportionate high tax rate arises due to the non-tax effective impairment of the investment in Q-Free ASA, Norway (effects from tax allowances claimed and other permanent tax differences in the amount of TEUR 4,631).
For further information on deferred tax assets and liabilities see Note 22.
| Tax expense/ | |||
|---|---|---|---|
| 2015/16 | Before taxes | income | After taxes |
| Fair value gains/losses on available-for-sale financial assets: | |||
| Unrealized gains/losses in the current period | -4,607 | 10 | -4,597 |
| Gains/losses recognized in the result for the period | -2,081 | 829 | -1,251 |
| Remeasurements of liabilities from post-employment benefits | -231 | 93 | -139 |
| Currency translation differences | 2,505 | 0 | 2,505 |
| Currency translation differences from net investments | |||
| in foreign business | -2,334 | 584 | -1,751 |
| Fair value changes recognized in equity | -6,748 | 1,515 | -5,233 |
The unrealized gains/losses on available-for-sale financial assets recognized in the fiscal year 2015/16 amounting to TEUR -4,567 relate to fair value changes on the investment in Q-Free ASA, Trondheim, Norway. Due to the ongoing unfavorable development of the share price up to the third quarter of the fiscal year 2015/16 the contained net losses amounting to TEUR -5.432, together with net losses that have been recognized through other comprehensive income in equity in the amount of TEUR 4,194 up to 31 March 2015, were recognized as impairment in the result for the period (TEUR -1,238; reclassification from other comprehensive income to the result for the period).
The realized gains/losses on available-for-sale financial assets relate to a sale of joint ownership shares (ESPA Cash Asset-Backed) in the fiscal year 2015/16. Net gains recognized in equity in the amount of TEUR 3,318 up to 31 March 2015 were also reclassified in the result for the period.
| Tax expense/ | ||||
|---|---|---|---|---|
| 2014/15 | Before taxes | income | After taxes | |
| Fair value gains/losses on available-for-sale financial assets: | ||||
| Unrealized gains/losses in the current period | 2,031 | -129 | 1,902 | |
| Gains/losses recognized in the result for the period | 12,185 | 0 | 12,185 | |
| Remeasurements of liabilities from post-employment benefits | -3,164 | 646 | -2,519 | |
| Currency translation differences | -12,559 | 0 | -12,559 | |
| Currency translation differences from net investments | ||||
| in foreign business | 9,045 | -2,261 | 6,784 | |
| Fair value changes recognized in equity | 7,538 | -1,744 | 5,794 |
The unrealized gains/losses on available-for-sale financial assets relate to market price fluctuations of the investment in Q-Free ASA, Norway, amounting to TEUR 1,516.
The realized gains/losses on available-for-sale financial assets relate to an impairment in that investment, recognized in the result of the period (TEUR 12,185, reclassification from other comprehensive income to the result for the period, see note 8) due to ongoing unfavorable development of the share price.
| Note | 2015/16 | 2014/15 | |
|---|---|---|---|
| At fair value through profit or loss | |||
| Derivative financial instruments | — | 0 | 0 |
| 0 | 0 | ||
| Financial instruments held-to-maturity | 0 | 0 | |
| Securities held-to-maturity | — | 0 | 0 |
| Receivables (financial assets recognized at | |||
| (amortized) cost) | |||
| Non-current receivables | (16) | 783 | 1,151 |
| Loans | (15) | 196 | 0 |
| Trade receivables | (18) | 51,425 | 72,754 |
| Cash and cash equivalents | (19) | 140,782 | 96,765 |
| 193,186 | 170,670 | ||
| Available-for-sale financial assets | |||
| Available-for-sale securities (non-current), Level 1 | (15) | 3,030 | 3,085 |
| Available-for-sale securities (non-current), Level 2 | (15) | 693 | 718 |
| Available-for-sale investments, Level 1 | (15) | 14,825 | 19,291 |
| Available-for-sale securities (current), Level 1 | (15) | 0 | 5,291 |
| Other investments (at cost) | (15) | 4 | 5 |
| 18,552 | 28,390 | ||
| Total | 211,739 | 199,060 |
| Alle | 2014/15 | ||
|---|---|---|---|
| Notes | 2015/16 | (adjusted) | |
| At fair value through profit or loss | |||
| Derivative financial instruments | — | 0 | 47 |
| Other non-current liabilities | (24) | 2,349 | 2,324 |
| 2,349 | 2,372 | ||
| Loans (financial liabilities recognized at (amortized) cost) | |||
| Corporate bond | (21) | 70,513 | 74,485 |
| Other financial liabilities | (21) | 36,570 | 63,469 |
| Trade payables | — | 52,041 | 48,441 |
| Other non-current liabilities | (24) | 983 | 2,332 |
| 160,107 | 188,727 | ||
| Total | 162,456 | 191,099 |
Financial instruments are recognized in the statement of comprehensive income with the following net results:
| 2015/16 | 2014/15 | |
|---|---|---|
| Available-for-sale financial assets | 1,918 | -18,442 |
| Loans and receivables | -6,743 | 6,700 |
| Financial liabilities recognized at (amortized) cost | -5,491 | -6,235 |
| At fair value through profit or loss | -237 | -47 |
| -10,553 | -18,025 |
| 12 | Property, plant and equipment. |
|---|---|
| Technical | Other equipment, | |||||
|---|---|---|---|---|---|---|
| Land and | equipment and | Construction | factory and office | |||
| buildings | machinery | in progress | equipment | Prepayments | Total | |
| Carrying amount as of 31 March 2014 | 3,961 | 9,150 | 1,407 | 8,859 | 71 | 23,447 |
| Currency translation differences | 102 | 520 | 316 | 332 | 0 | 1,270 |
| Reclassification | 1,106 | 0 | -1,179 | -820 | 0 | -893 |
| Additions | 290 | 2,812 | 2,300 | 1,785 | 188 | 7,374 |
| Disposals | 0 | -123 | -749 | -187 | -71 | -1,130 |
| Scheduled depreciation | -886 | -3,449 | 0 | -3,341 | 0 | -7,676 |
| Carrying amount as of 31 March 2015 | 4,572 | 8,909 | 2,096 | 6,628 | 188 | 22,393 |
| Acquisition/production costs | 10,350 | 51,304 | 2,096 | 24,873 | 188 | 88,811 |
| Accumulated depreciation | -5,778 | -42,395 | 0 | -18,245 | 0 | -66,417 |
| Carrying amount as of 31 March 2015 | 4,572 | 8,909 | 2,096 | 6,628 | 188 | 22,393 |
| Carrying amount as of 31 March 2015 | 4,572 | 8,909 | 2,096 | 6,628 | 188 | 22,393 |
| Currency translation differences | -49 | -504 | -83 | -449 | 0 | -1,084 |
| Reclassification | 375 | 201 | -2,351 | 1,775 | 0 | 0 |
| Reclassification of prepayments | 0 | 188 | 0 | 0 | -188 | 0 |
| Additions from the acquisition of companies | 0 | 843 | 401 | 7 | 0 | 1,251 |
| Additions | 665 | 1,463 | 1,302 | 3,619 | 0 | 7,049 |
| Disposals | -7 | -705 | -448 | -677 | 0 | -1,837 |
| Scheduled depreciation | -929 | -2,406 | 0 | -3,570 | 0 | -6,905 |
| Carrying amount as of 31 March 2016 | 4,628 | 7,989 | 917 | 7,333 | 0 | 20,867 |
| Acquisition/production costs | 10,655 | 45,743 | 917 | 26,313 | 0 | 83,628 |
| Accumulated depreciation | -6,027 | -37,754 | 0 | -18,979 | 0 | -62,761 |
| Carrying amount as of 31 March 2016 | 4,628 | 7,989 | 917 | 7,333 | 0 | 20,867 |
| Capitalized | Intangible | |||||
|---|---|---|---|---|---|---|
| development | Concessions | assets on | ||||
| costs | and rights | Goodwill | completion | Prepayment | Total | |
| Carrying amount as of 31 March 2014 | 0 | 26,393 | 56,663 | 734 | 5,778 | 89,567 |
| Currency translation differences | 0 | 48 | 1,007 | 0 | 0 | 1,054 |
| Reclassification | 0 | 893 | 0 | 0 | 0 | 893 |
| Additions | 0 | 446 | 0 | 329 | 219 | 994 |
| Disposals | 0 | -1 | 0 | -156 | 0 | -157 |
| Impairment | 0 | 0 | -12,342 | 0 | 0 | -12,342 |
| Scheduled amortization | 0 | -8,758 | 0 | 0 | 0 | -8,758 |
| Carrying amount as of 31 March 2015 | 0 | 19,019 | 45,328 | 907 | 5,997 | 71,250 |
| Acquisition/production costs | 8,302 | 62,310 | 59,727 | 907 | 5,997 | 137,243 |
| Accumulated amortization | -8,302 | -43,291 | -14,399 | 0 | 0 | -65,992 |
| Carrying amount as of 31 March 2015 | 0 | 19,019 | 45,328 | 907 | 5,997 | 71,250 |
| Carrying amount as of 31 March 2015 | 0 | 19,019 | 45,328 | 907 | 5,997 | 71,250 |
| Currency translation differences | -2 | -72 | 0 | 0 | 0 | -74 |
| Reclassification of prepayments | 0 | 5,997 | 0 | 0 | -5,997 | 0 |
| Additions from the acquisition of companies | 46 | 0 | 0 | 0 | 0 | 46 |
| Additions | 149 | 2,606 | 0 | 58 | 132 | 2,944 |
| Disposals | 0 | -663 | 0 | -964 | 0 | -1,627 |
| Scheduled amortization | -194 | -7,435 | 0 | 0 | 0 | -7,628 |
| Carrying amount as of 31 March 2016 | 0 | 19,452 | 45,328 | 0 | 132 | 64,911 |
| Acquisition/production costs | 9,725 | 66,227 | 59,727 | 0 | 132 | 135,810 |
| Accumulated amortization | -9,725 | -46,775 | -14,399 | 0 | 0 | -70,899 |
| Carrying amount as of 31 March 2016 | 0 | 19,452 | 45,328 | 0 | 132 | 64,911 |
In consideration of restructuring of the business segments and reportable segments Kapsch TrafficCom Group has revised the representation of cash-generating units (CGU) and goodwill allocation.
According to IAS 36.72 the CGUs have been adjusted to the changed structure of the business segments and reportable segments. The reallocation of goodwill complies with IAS 36.87, according to which goodwill have to be reallocated based on a relative value approach, similar to that used for selling of a business unit within a CGU of a company.
Based on the revised business segments and reportable segments (see segment reporting) Kapsch TrafficCom Group defines the following cash-generating units for the purpose of impairment testing according to IAS 36:
| 2015/16 | 2014/15 1 | |
|---|---|---|
| ZGE ETC-Americas: Electronic Toll Collection, Americas | 11,723 | n/a |
| ZGE ETC-EMEA: Electronic Toll Collection, Europe, Middle East and Africa | 19,941 | n/a |
| ZGE ETC-APAC: Electronic Toll Collection, Asia and Pacific | 7,378 | n/a |
| ZGE IMS-Americas: Intelligent Mobility Solutions, Americas | 3,349 | n/a |
| ZGE IMS-EMEA: Intelligent Mobility Solutions, Europe, Middle East and Africa | 2,708 | n/a |
| ZGE IMS-APAC: Intelligent Mobility Solutions, Asia and Pacific | 230 | n/a |
| 45,328 | n/a |
1 The disclosure for the fiscal year 2014/15 is not applicable due to the new reporting structure.
The following key assumptions for all cash-generating units were made for the purpose of impairment testing:
| 2015/16 | 2014/15 | |
|---|---|---|
| Determination of recoverable amount | Value in use | Value in use |
| Detailed planning period | 4 years | 4 years |
| Discount rate after tax | 6.36 % | 8.28 % |
| Long-term growth rate | 2.00 % | 2.00 % |
Management has based its determination on the assumption that after the successful implementation of road toll collection systems, in particular in the U.S.A. and Chile, demand for toll systems will remain stable. The planning for the CGU ETC-Americas is based on implemented construction projects and current operation projects and their expansion as well as on the fact, that in various countries invitations to tender are in preparation or already in progress. Furthermore the delivery of components makes a substantial contribution to revenue.
| Carrying amount of goodwill allocated to the CGU 11,723 |
2014/15 1 |
|---|---|
| n/a | |
| Carrying amount of intangible assets with indefinite useful life | |
| allocated to the CGU (excl. goodwill) 0 |
n/a |
| Value in use of the CGU 232,044 |
n/a |
| Carrying amount 48,580 |
n/a |
| Discount rate before tax 7.6 % |
n/a |
| Break-Even discount rate 31.1 % |
n/a |
1 The disclosure for the fiscal year 2014/15 is not applicable due to the new reporting structure.
| Changes | Decrease | Increase | |
|---|---|---|---|
| in assumption | in assumption | in assumption | |
| Discount rate | ±10 BP | 38,577 | -28,750 |
| Revenue growth | ±10 % | -6,817 | 6,934 |
| EBITDA margin | ±10 % | -2,712 | 2,712 |
| Long-term growth rate | ±0,5 % | -21,127 | 26,606 |
Management has based its determination on the assumption that after the successful implementation of road toll collection systems in EMEA, in particular in Austria, the Czech Republic, Switzerland, South Africa, Poland and the Republic of Belarus, demand for toll systems will remain stable, in particular as a result of tight public budgets. The planning for the CGU ETC-EMEA is based on implemented construction projects and current operation projects, their expansion and delivery of components as well as on the fact, that in various countries invitations to tender are in preparation or already in progress.
| 2015/16 | 2014/15 1 | |
|---|---|---|
| Carrying amount of goodwill allocated to the CGU | 19,941 | n/a |
| Carrying amount of intangible assets with indefinite useful life | ||
| allocated to the CGU (excl. goodwill) | 0 | n/a |
| Value in use of the CGU | 394,719 | n/a |
| Carrying amount | 120,615 | n/a |
| Discount rate before tax | 7.9 % | n/a |
| Break-Even discount rate | 21.1 % | n/a |
1 The disclosure for the fiscal year 2014/15 is not applicable due to the new reporting structure.
| Changes | Decrease | Increase | |
|---|---|---|---|
| in assumption | in assumption | in assumption | |
| Discount rate | ±10 BP | 68,574 | -51,128 |
| Revenue growth | ±10 % | -4,649 | 30,207 |
| EBITDA margin | ±10 % | -6,919 | 6,919 |
| Long-term growth rate | ±0,5 % | -37,780 | 47,577 |
Management has based its determination on the assumption that after the successful implementation of road toll collection systems in APAC, especially in Australia, demand for toll systems will remain stable. The planning for the CGU ETC-APAC is based on implemented construction projects and current operation projects and their expansion as well as on the fact, that in Australia and New Zealand invitations to tender are in preparation or already in progress. Furthermore the delivery of components makes a substantial contribution to revenue.
| 2015/16 | 2014/15 1 | |
|---|---|---|
| Carrying amount of goodwill allocated to the CGU | 7,378 | n/a |
| Carrying amount of intangible assets with indefinite useful life | ||
| allocated to the CGU (excl. goodwill) | 0 | n/a |
| Value in use of the CGU | 146,052 | n/a |
| Carrying amount | 16,205 | n/a |
| Discount rate before tax | 7.8 % | n/a |
| Break-Even discount rate | 99.6 % | n/a |
1 The disclosure for the fiscal year 2014/15 is not applicable due to the new reporting structure.
| Changes | Decrease | Increase | |
|---|---|---|---|
| in assumption | in assumption | in assumption | |
| Discount rate | ±10 BP | 23,172 | -17,288 |
| Revenue growth | ±10 % | 4,730 | 11,580 |
| EBITDA margin | ±10 % | -2,102 | 2,102 |
| Long-term growth rate | ±0,5 % | -12,558 | 15,815 |
Management has based its determination on the assumption that after the successful implementation of intelligent mobility solutions in North America, demand for intelligent mobility solutions will continue to rise. Furthermore it is expected that the technical maintenance and commercial operation will be performed by Kapsch TrafficCom. The planning for the CGU IMS-Americas is based especially on road safety and traffic monitoring systems.
| 2015/16 | 2014/15 1 | |
|---|---|---|
| Carrying amount of goodwill allocated to the CGU | 3,349 | n/a |
| Carrying amount of intangible assets with indefinite useful life | ||
| allocated to the CGU (excl. goodwill) | 0 | n/a |
| Value in use of the CGU | 79,389 | n/a |
| Carrying amount | 18,745 | n/a |
| Discount rate before tax | 7.5 % | n/a |
| Break-Even discount rate | 18.4 % | n/a |
1 The disclosure for the fiscal year 2014/15 is not applicable due to the new reporting structure.
| Changes | Decrease | Increase | |
|---|---|---|---|
| in assumption | in assumption | in assumption | |
| Discount rate | ±10 BP | 15,560 | -11,585 |
| Revenue growth | ±10 % | -3,603 | 5,008 |
| EBITDA margin | ±10 % | -785 | 785 |
| Long-term growth rate | ±0,5 % | -8,570 | 10,792 |
Management has based its determination on the assumption that after the successful implementation of intelligent mobility solutions in South Africa, the Netherlands, Great Britain, Italy and the Czech Republic, demand for intelligent mobility solutions will continue to rise. Furthermore it is expected that the technical maintenance and commercial operation will be performed by Kapsch TrafficCom. The planning for the CGU IMS-EMEA is based especially on road safety and traffic monitoring systems.
| 2015/16 | 2014/15 1 | |
|---|---|---|
| Carrying amount of goodwill allocated to the CGU | 2,708 | n/a |
| Carrying amount of intangible assets with indefinite useful life | ||
| allocated to the CGU (excl. goodwill) | 0 | n/a |
| Value in use of the CGU | 64,186 | n/a |
| Carrying amount | 2,885 | n/a |
| Discount rate before tax | 7.7 % | n/a |
| Break-Even discount rate | 482.2 % | n/a |
1 The disclosure for the fiscal year 2014/15 is not applicable due to the new reporting structure.
| Changes | Decrease | Increase | |
|---|---|---|---|
| in assumption | in assumption | in assumption | |
| Discount rate | ±10 BP | 10,074 | -7,506 |
| Revenue growth | ±10 % | 1,807 | 3,953 |
| EBITDA margin | ±10 % | -1,179 | 1,179 |
| Long-term growth rate | ±0,5 % | -5,540 | 6,977 |
Management has based its determination on the assumption that after the successful implementation of intelligent mobility solutions in Australia and New Zealand, demand for intelligent mobility solutions will continue to rise. Furthermore it is expected that the technical maintenance and commercial operation will be performed by Kapsch TrafficCom. The planning for the CGU IMS-APAC is based especially on road safety and traffic monitoring systems.
| 2015/16 | 2014/15 1 | |
|---|---|---|
| Carrying amount of goodwill allocated to the CGU | 230 | n/a |
| Carrying amount of intangible assets with indefinite useful life | ||
| allocated to the CGU (excl. goodwill) | 0 | n/a |
| Value in use of the CGU | 5,441 | n/a |
| Carrying amount | 2,300 | n/a |
| Discount rate before tax | 15.7 % | n/a |
| Break-Even discount rate | 136.6 % | n/a |
1 The disclosure for the fiscal year 2014/15 is not applicable due to the new reporting structure.
| Changes | Decrease | Increase | |
|---|---|---|---|
| in assumption | in assumption | in assumption | |
| Discount rate | ±10 BP | 78 | -70 |
| Revenue growth | ±10 % | -2,143 | 1,968 |
| EBITDA margin | ±10 % | -267 | 267 |
| Long-term growth rate | ±0,5 % | -15 | 19 |
Development costs relate to expenses which in accordance with IAS 38 are capitalized and amortized over 3 to 5 years once the assets are available for commercial use.
Additional research and development costs of the group in the fiscal year 2015/16 amounted to EUR 56.6 million (2014/15: EUR 49.0 million). In the fiscal year 2015/16, EUR 32.4 million thereof (2014/15: EUR 22.0 million) related to project-specific development costs charged to the customer. The remaining amount of EUR 24.2 million (2014/15: EUR 27.0 million) was recognized as an expense.
Interests in associates developed as follows:
| 2015/16 | 2014/15 | |
|---|---|---|
| Carrying amount as of 31 March of prior year | 2,014 | 1,596 |
| Currency translation differences | -138 | 184 |
| Addition from foundation and acquisition | 0 | 0 |
| Disposal | 0 | 0 |
| Share in result | 41 | 234 |
| Carrying amount as of 31 March of fiscal year | 1,917 | 2,014 |
On 3 December 2015, together with a partner, the group founded the Russian company LLC National operator of telematics services and holds an interest of 49 %. The company is classified as an associated company. Therefore the investment is accounted for using the equity method. As of 31 March 2016 the book value of the interest amounting to TEUR 0 (31 March 2015: TEUR n/a).
The financial data of the entity as of the latest balance sheet date (31 March) are as follows:
| 31 March 2016 | 31 March 2015 | |
|---|---|---|
| Non-current assets | 12 | n/a |
| Current assets | 9 | n/a |
| Non-current liabilities | 0 | n/a |
| Current liabilities | -68 | n/a |
| Net assets | -47 | n/a |
| Revenue | 0 | n/a |
| Result for the period | -51 | n/a |
| Other comprehensive income for the period | 0 | n/a |
| Total comprehensive income for the period | -51 | n/a |
On 31 July 2012 the group acquired 33 % of the shares in SIMEX, Integración de Sistemas, S.A.P.I. de C.V., Mexico. Taking potential voting rights into account (options for purchase of the remaining shares) the group has the majority of the shares. As the potential voting rights are not assessed to be substantial the presumption of control was rebutted. As significant influence over the financial and business policies exists, the investment is accounted for using the equity method.
The financial data of the entity as of the latest balance sheet date (31 December) are as follows:
| 31 Dec. 2016 | 31 Dec. 2015 | |
|---|---|---|
| Non-current assets | 1,474 | 1,340 |
| Current assets | 10,584 | 10,235 |
| Non-current liabilities | -635 | -620 |
| Current liabilities | -6,471 | -6,181 |
| Net assets | 4,953 | 4,774 |
| Revenue | 13,066 | 14,816 |
| Result for the period | 470 | 527 |
| Other comprehensive income for the period | 0 | 0 |
| Total comprehensive income for the period | 470 | 527 |
| 2015/16 | 2014/15 | |
|---|---|---|
| Other non-current financial assets and investments | 18,651 | 23,099 |
| Other current financial assets | 97 | 5,291 |
| 18,748 | 28,390 |
| Available | Available | Other | ||
|---|---|---|---|---|
| for-sale | for-sale | non-current | ||
| Other non-current financial assets and investments | securities | investments | financial assets | Total |
| Carrying amount as of 31 March 2014 | 3,655 | 23,758 | 1,093 | 28,506 |
| Currency translation differences | 0 | 0 | 98 | 98 |
| Additions | 0 | 362 | 0 | 362 |
| Disposals | 0 | 0 | -1,190 | -1,190 |
| Change in fair value | 148 | -4,824 | 0 | -4,676 |
| Carrying amount as of 31 March 2015 | 3,803 | 19,296 | 0 | 23,099 |
| Currency translation differences | 0 | 0 | 1 | 1 |
| Additions | 0 | 101 | 98 | 199 |
| Disposals | -40 | 0 | 0 | -41 |
| Change in fair value | -40 | -4,567 | 0 | -4,607 |
| Carrying amount as of 31 March 2016 | 3,723 | 14,829 | 99 | 18,651 |
| Available | |||
|---|---|---|---|
| for-sale | |||
| Other current financial assets | securities | Other | Total |
| Carrying amount as of 31 March 2014 | 4,924 | 0 | 4,924 |
| Additions | 0 | 0 | 0 |
| Disposals | 0 | 0 | 0 |
| Change in fair value | 367 | 0 | 367 |
| Carrying amount as of 31 March 2015 | 5,291 | 0 | 5,291 |
| Currency translation differences | 0 | -9 | -9 |
| Additions | 0 | 106 | 106 |
| Disposals | -5,291 | 0 | -5,291 |
| Change in fair value | 0 | 0 | 0 |
| Carrying amount as of 31 March 2016 | 0 | 97 | 97 |
As of 31 March 2016, available-for-sale securities relate to government and bank bonds as well as shares in investment funds. As of 31 March 2016, investments classified as available-for-sale mainly relate to a 19.26 % investment in the listed company Q-Free ASA, Trondheim, Norway.
Unrealized gains and losses are recognized in other comprehensive income of the period (see Note 10).
Financial assets and liabilities have to be classified in one of the three following fair value-hierarchies:
Level 1: There are quoted prices in active markets for identical assets and liabilities. In the group, the investment in Q-Free ASA, Trondheim, Norway, as well as listed equity instruments are attributed to Level 1.
Level 2: The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques based on observable direct or indirect market data. This category comprises availablefor-sale securities, such as mortgage bonds and government bonds, which are quoted, however not regularly traded on a stock market.
Specific valuation techniques used to value financial instruments include:
Level 3: Financial instruments are included in level 3 if the valuation information is not based on observable market data.
The classification of current and non-current financial assets is as follows:
| Level 3 | |||
|---|---|---|---|
| Level 2 | Not based on | ||
| Level 1 | Observable | observable | |
| Quoted prices | market data | market data | 2015/16 |
| 3,030 | 693 | 0 | 3,723 |
| 14,825 | 0 | 0 | 14,825 |
| 17,855 | 693 | 0 | 18,548 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 17,855 | 693 | 0 | 18,548 |
In the fiscal year 2015/16, other non-current financial assets amounting to TEUR 99, other investments amounting to TEUR 4 as well as other current financial assets amounting to TEUR 97 were recognized at amortized cost.
| Level 3 | ||||
|---|---|---|---|---|
| Level 2 | Not based on | |||
| Level 1 | Observable | observable | ||
| Quoted prices | market data | market data | 2014/15 | |
| Non-current financial assets | ||||
| Available-for-sale securities | 3,085 | 718 | 0 | 3,803 |
| Available-for-sale investments | 19,291 | 0 | 0 | 19,291 |
| 22,376 | 718 | 0 | 23,094 | |
| Current financial assets | ||||
| Available-for-sale securities | 5,291 | 0 | 0 | 5,291 |
| 5,291 | 0 | 0 | 5,291 | |
| Total | 27,667 | 718 | 0 | 28,385 |
In the fiscal year 2014/15, other non-current financial assets amounting to TEUR 5 are recognized at amortized cost.
| 2015/16 | 2014/15 | |
|---|---|---|
| Project in the Republic of Belarus | 18,094 | 26,987 |
| Truck toll collection system Czech Republic | 711 | 1,148 |
| Other | 72 | 3 |
| 18,877 | 28,138 |
Other non-current assets include amounts due from customers for contract work for the installation of the truck toll collection system in the Republic of Belarus as well as trade receivables (non-current) that are due from the Czech Ministry of Transport for the installation of the Czech truck toll collection system. As in the prior year, they fall due between 1 and 5 years as of the balance sheet date.
Non-current receivables were discounted on the basis of cash flows using an interest rate of 2.49 – 5.65 % (for that part which was funded by external loans) and an interest rate for alternative investments of 2.89 % (for that part which was funded by internal cash flows of the group). Thus, the fair values approximate the carrying amounts.
Gross cash flows of other non-current assets are as follows:
| 2015/16 | 2014/15 | |
|---|---|---|
| Up to 2 years | 19,891 | 29,706 |
| Between 2 and 3 years | 219 | 171 |
| More than 3 years | 62 | 0 |
| 20,172 | 29,877 |
Amounts due from customers for contract work (non-current) are as follows:
| 2015/16 | 2014/15 | |
|---|---|---|
| Construction costs incurred plus recognized gains | 18,094 | 26,987 |
| Less total amounts invoiced and advance payments received | 0 | 0 |
| 18,094 | 26,987 |
| 2015/16 | 2014/15 | |
|---|---|---|
| Purchased parts and merchandise, at acquisition cost | 26,268 | 25,925 |
| Unfinished goods and work in progress, at production cost | 6,551 | 14,680 |
| Finished goods, at production cost | 2,871 | 7,033 |
| Prepayments on inventories | 68 | 33 |
| 35,757 | 47,670 |
Individual inventory items were written down, where necessary, to their net realizable values. The write-downs of inventories amount to TEUR 21,755 (2014/15: TEUR 21,171). In the reporting period TEUR 584 were recognized in the statement of comprehensive income (2014/15: TEUR 4,539).
| 2015/16 | 2014/15 | |
|---|---|---|
| Trade receivables | 53,520 | 75,470 |
| Allowance for bad debts | -2,095 | -2,715 |
| Trade receivables – net | 51,425 | 72,754 |
| Amounts due from customers for contract work | 98,368 | 83,995 |
| Amounts due from customers for service and maintenance contracts | 15,247 | 8,502 |
| Current tax receivables from income tax | 3,754 | 3,336 |
| Receivables from tax authorities (other than income tax) | 10,489 | 12,994 |
| Other receivables and prepaid expenses | 20,629 | 23,805 |
| 199,912 | 205,387 |
As of 31 March 2016 trade receivables with a net value of TEUR 2,238 (2014/15: TEUR 3,068) have been impaired. The corresponding impairment amounts to TEUR -2,095 (2014/15: TEUR -2,715).
Allowance for bad debt developed as follows:
| 2015/16 | 2014/15 | |
|---|---|---|
| Balance as of 31 March of the prior year | -2,715 | -421 |
| Additions from the acquisition of companies | 0 | 0 |
| Addition | -70 | -2,422 |
| Utilization | 261 | 73 |
| Disposal | 337 | 112 |
| Currency translation differences | 93 | -58 |
| Balance as of 31 March of the reporting year | -2,095 | -2,715 |
Maturity structure of trade receivables and other current assets:
| 2015/16 | 2014/15 | |
|---|---|---|
| Not yet due | 21,954 | 52,350 |
| Overdue: | ||
| Less than 60 days (not impaired) | 12,040 | 11,143 |
| Less than 60 days (impaired) | 0 | 0 |
| More than 60 days (not impaired) | 17,288 | 8,908 |
| More than 60 days (impaired) | 2,238 | 3,068 |
| 53,520 | 75,470 |
Given the short maturities of these financial instruments, it is assumed that the fair values correspond to the carrying amounts. There is no concentration of credit risk with respect to trade receivables (except for the toll collection projects in the Czech Republic, South Africa, Poland and the Republic of Belarus), as the group generally has a large number of customers worldwide. Trade receivables (current) relating to the installation of the truck toll collection system of the Czech Republic amounting to TEUR 3,670 (2014/15: TEUR 2,481) and to the operation and maintenance of the system amounting to TEUR 20,474 (2014/15: TEUR 22,044) are due from Rˇ editelství silnic a dálnic Cˇ R (RSD), a company of the Czech Republic. Trade receivables from the toll collection project in Poland due from GDDKiA (Generalna Dyrekcja Dróg Krajowych i Autostrad) amount to TEUR 4,890 (2014/15: TEUR 5,027). Trade receivables (current) relating to the installation of the truck toll collection system of the Republic of Belarus amounting to TEUR 39,042 (2014/15: TEUR 0) and to the operation of the system amounting to TEUR 3,317 (2014/15: TEUR 875) are due from BelToIl.
Trade receivables amounting to TEUR 3,365 (2014/15: TEUR 4,989) were pledged as collateral to banks (see Note 21).
Amounts due from customers for contract work are as follows:
| 2015/16 | 2014/15 | |
|---|---|---|
| Construction costs incurred plus recognized gains | 471,098 | 439,282 |
| Less amounts billed and prepayments received | -372,731 | -355,287 |
| 98,368 | 83,995 |
As of 31 March 2016, amounts due from customers for contract work primarily relate to toll collection projects in North America amounting to TEUR 23,592 (2014/15: TEUR 21,400), in France amounting to TEUR 422 (2014/15: TEUR 2,083) as well as the establishment of the toll collection system in the Republic of Belarus amounting to TEUR 64,174 (2014/15: TEUR 53,499).
Revenues from construction contracts amount to TEUR 115,263 (2014/15: TEUR 105,879).
| 2015/16 | 2014/15 | |
|---|---|---|
| Cash on hand | 90 | 62 |
| Deposits held with banks | 140,692 | 96,703 |
| 140,782 | 96,765 |
The carrying amounts of this item also represent cash and cash equivalents at the end of the reporting period as presented in the cash flow statement.
| Carrying amount as of 31 March of fiscal year | 13,000 | 13,000 |
|---|---|---|
| 2015/16 | 2014/15 |
The total number of shares issued is 13,000,000. The shares are ordinary bearer shares and have no par value.
| 2015/16 | 2014/15 | |
|---|---|---|
| Non-current | ||
| Corporate bond | 70,513 | 74,485 |
| Loans for project financing | 0 | 14,500 |
| Other non-current loans | 15,221 | 0 |
| 85,734 | 88,985 | |
| Current | ||
| Loans for project financing | 14,500 | 20,333 |
| Other current loans | 6,849 | 28,636 |
| 21,349 | 48,969 | |
| Total | 107,083 | 137,954 |
Movements are as follows:
| Currency | ||||||
|---|---|---|---|---|---|---|
| translation | ||||||
| 31 March 2014 | Reclassification | Additions | Repayment | differences | 31 March 2015 | |
| Non-current financial assets | 109,494 | -20,693 | 184 | 0 | 0 | 88,985 |
| Current financial assets | 46,560 | 20,693 | 7,053 | -30,220 | 4,883 | 48,969 |
| Total | 156,054 | 0 | 7,237 | -30,220 | 4,883 | 137,954 |
| Currency | ||||||
|---|---|---|---|---|---|---|
| translation | ||||||
| 31 March 2015 | Reclassification | Additions | Repayment | differences | 31 March 2016 | |
| Non-current financial assets | 88,985 | -3,220 | 471 | 0 | -502 | 85,734 |
| Current financial assets | 48,969 | 3,220 | 2,830 | -32,927 | -742 | 21,349 |
| Total | 137,954 | 0 | 3,301 | -32,927 | -1,245 | 107,083 |
The corporate bond of Kapsch TrafficCom AG was successfully placed in November 2010 with a volume of EUR 75 million, a maturity of 7 years and an interest rate of 4.25 %. The effective interest rate amounts to 4.54 %.
In May 2015 debts with a nominal value of TEUR 4,182 of the corporate bond were reacquired prematurely. Therefore the corporate bond is outstanding with TEUR 70,818 with a maturity period until 3 November 2017.
| 2015/16 | 2014/15 | |
|---|---|---|
| Carrying amount | 107,083 | 137,954 |
| Fair value | 113,768 | 151,226 |
| Gross cash flows: | ||
| In the first half year of the next fiscal year | 15,264 | 17,891 |
| In the second half year of the next fiscal year | 9,344 | 34,844 |
| Total up to 1 year | 24,609 | 52,735 |
| Between 1 and 2 years | 79,164 | 18,074 |
| Between 2 and 3 years | 3,677 | 78,382 |
| Between 3 and 4 years | 3,618 | 0 |
| Between 4 and 5 years | 3,558 | 0 |
| More than 5 years | 898 | 0 |
| 115,524 | 149,191 |
The fair values and the gross cash flows of current and non-current financial liabilities are as follows:
The classification of financial liabilities is as follows:
| Level 3 | ||||
|---|---|---|---|---|
| Level 2 | Not based on | |||
| Level 1 | Observable | observable | ||
| Quoted prices | market data | market data | 2015/16 | |
| Corporate bond | 73,297 | 0 | 0 | 73,297 |
| Other financial liabilities | 0 | 40,471 | 0 | 40,471 |
| Total | 73,297 | 40,471 | 0 | 113,768 |
| Level 3 | ||||
|---|---|---|---|---|
| Level 2 | Not based on | |||
| Level 1 | Observable | observable | ||
| Quoted prices | market data | market data | 2014/15 | |
| Corporate bond | 78,338 | 0 | 0 | 78,338 |
| Other financial liabilities | 0 | 72,888 | 0 | 72,888 |
| Total | 78,338 | 72,888 | 0 | 151,226 |
The fair value of the other financial liabilities (level 2) was derived through discounting the gross cash flows over the contracted term at a risk-adjusted interest rate.
Interest rates on current and non-current financial liabilities are as follows:
| 2015/16 | 2014/15 | |
|---|---|---|
| Total financial liabilities: | ||
| Carrying fixed interest rates | 72,364 | 78,537 |
| Carrying variable interest rates | 34,719 | 59,416 |
| 107,083 | 137,954 | |
| Average interest rates: | ||
| Loans for project financing | 5.46 % | 5.46 % |
| Corporate bond | 4.54 % | 4.54 % |
| Other loans | 0.60 – 2.77 % | 1.00 – 3.10 % |
Trade receivables (current) amounting to TEUR 3,365 (2014/15: TEUR 4,989) were pledged as collateral for bank guarantees and loans.
For project financing of the Belorussian toll collection system, with an outstanding amount of TEUR 14,500 as of 31 March 2016 (2014/15: TEUR 34,833), Kapsch TrafficCom AG obtained a guarantee of a bill of exchange of the Oesterreichische Kontrollbank Aktiengesellschaft (OeKB) as well as a participation guarantee G4 of OeKB. The claims of the participation guarantee G4 have been assigned as security to the lending banks.
A bill of exchange amounting to TEUR 1,425 (2014/15: TEUR 1,425) was issued for an export promotion credit.
| 2015/16 | 2014/15 | |
|---|---|---|
| Deferred tax assets | ||
| Deferred tax assets to be recovered after more than 12 months | 9,251 | 9,274 |
| Deferred tax assets to be recovered within 12 months | 2,644 | 4,317 |
| 11,895 | 13,590 | |
| Deferred tax liabilities | ||
| Deferred tax liabilities to be recovered after more than 12 months | 789 | 1,052 |
| Deferred tax liabilities to be recovered within 12 months | 2,401 | 1,328 |
| 3,190 | 2,380 | |
| Deferred tax assets net (+) / deferred tax liabilities net (-) | 8,705 | 11,210 |
Deferred taxes due to tax loss carry-forwards and other temporary differences deductible in the future are recognized only to the extent of their potential realization. In these consolidated financial statements, tax loss carry-forwards amounting to TEUR 37,983 (2014/15: TEUR 28,996) have not been recognized because it was uncertain whether there would be sufficient taxable profits available against which to offset them. These tax loss carry-forwards origin from foreign subsidiaries with the predominant part not expiring before 2030. All other deferred tax assets have been recognized in the respective group companies as future deductible items.
Deferred income tax assets and liabilities are offset, taking maturities into account, when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.
| Taken | ||||||
|---|---|---|---|---|---|---|
| Taken through | through other | Currency | ||||
| the profit of the | comprehensive | translation | Re | |||
| 31 March 2014 | period | income | differences | classification | 31 March 2015 | |
| Deferred tax assets | ||||||
| Tax loss carry-forwards | 7,623 | 204 | 0 | 184 | 0 | 8,010 |
| Provisions disallowed for tax purposes | 6,976 | -2,907 | 646 | 38 | 0 | 4,753 |
| Depreciation disallowed for tax purposes | 1,163 | -123 | 0 | 10 | 0 | 1,049 |
| Construction contracts | 804 | 1,211 | 0 | 0 | 0 | 2,014 |
| Other | 5,103 | 1,538 | -2,298 | 113 | 0 | 4,456 |
| 21,669 | -77 | -1,653 | 345 | 0 | 20,283 | |
| Deferred tax liabilities | ||||||
| Special depreciation/amortization of | ||||||
| non-current assets | 572 | 213 | 0 | 72 | 0 | 857 |
| Gains from recognition at fair value | 7,818 | -2,508 | 0 | 0 | 0 | 5,310 |
| Other | 1,946 | 833 | 92 | 34 | 0 | 2,905 |
| 10,337 | -1,462 | 92 | 106 | 0 | 9,073 | |
| Total change | 11,332 | 1,385 | -1,744 | 238 | 0 | 11,210 |
| Taken | ||||||
|---|---|---|---|---|---|---|
| Taken through | through other | Currency | ||||
| the profit of the | comprehensive | translation | Re | |||
| 31 March 2015 | period | income | differences | classification | 31 March 2016 | |
| Deferred tax assets | ||||||
| Tax loss carry-forwards | 8,010 | 13 | 0 | -880 | 0 | 7,143 |
| Provisions disallowed for tax purposes | 4,753 | 221 | 93 | -92 | 24 | 4,998 |
| Depreciation disallowed for tax purposes | 1,049 | -168 | 0 | -7 | 0 | 875 |
| Construction contracts | 2,014 | 0 | 0 | 0 | -2,014 | 0 |
| Other | 4,456 | -4 | 584 | -226 | -614 | 4,195 |
| 20,283 | 62 | 676 | -1,205 | -2,605 | 17,212 | |
| Deferred tax liabilities | ||||||
| Special depreciation/amortization of | ||||||
| non-current assets | 857 | -47 | 0 | -57 | 0 | 753 |
| Contract work | 0 | 3,772 | 0 | 0 | -2,014 | 1,758 |
| Gains from recognition at fair value | 5,310 | -1,949 | 0 | 0 | 0 | 3,361 |
| Other | 2,905 | 1,197 | -839 | -38 | -590 | 2,635 |
| 9,073 | 2,973 | -839 | -95 | -2,605 | 8,507 | |
| Total change | 11,210 | -2,911 | 1,515 | -1,110 | 0 | 8,705 |
Amounts recognized in the balance sheet:
| 2015/16 | 2014/15 | |
|---|---|---|
| Termination benefits | 9,505 | 9,690 |
| Pension benefits | 14,603 | 15,520 |
| 24,107 | 25,210 |
Termination benefits include legal and contractual entitlements to one-off payments to employees of the group which result from events such as dismissal by the employer, amicable termination of the employment, retirement or death of the employee. For termination benefits the group bears the risk of inflation due to compensation increases. The obligations from termination benefits mainly result from the Austrian entities of the group.
Liabilities for retirement benefits recognized at the balance sheet date relate to retirees only. All pension agreements are based on the final salary, are granted as fixed monthly pension payments 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 retirement benefits the group bears the risk of longevity and inflation due to pension increases.
Termination benefits obligations were valued based on an interest rate of 1.30 % – 1.75 % (2014/15: 2.10 %), pension benefit obligations were valued based on an interest rate of 1.85 % (2014/15: 1.80 %) for the euro area and based on an interest rate of 4.30 % (2014/15: 3.75 %) for Canada and compensation increases based on a rate of 2.5 % (2014/15: 2.0 %). In addition, the calculation was based on the earliest possible statutory retirement age including transition provisions and using the mortality tables AVÖ 2008-P (2014/15: AVÖ 2008-P) by Pagler & Pagler. Pension increases were estimated at 0.89 % (2014/15: 1.7 %).
The following amounts are recognized in the statement of comprehensive income as expenses for termination benefits:
| 2015/16 | 2014/15 | |
|---|---|---|
| Change in liabilities recognized in the balance sheet: | ||
| Carrying amount as of 31 March of prior year | 9,690 | 8,790 |
| Remeasurements (actuarial gains/losses) | 416 | 836 |
| Current service cost | 259 | 281 |
| Interest expense | 197 | 306 |
| Payments | -1,038 | -543 |
| Currency translation differences | -18 | 19 |
| Carrying amount as of 31 March of fiscal year | 9,505 | 9,690 |
| Total, included in the staff costs (Note 5) | 259 | 281 |
| Total, included in the financial result (Note 8) | 197 | 306 |
Remeasurements are attributable to the following positions:
| 2015/16 | 2014/15 | |
|---|---|---|
| Remeasurements from changes in demographic assumptions | -73 | -158 |
| Remeasurements from changes in financial assumptions | 690 | 1,046 |
| Remeasurements from other changes (experience adjustments) | -200 | -53 |
| Total | 416 | 836 |
The expected allocation for termination benefits for the next fiscal year 2016/2017 amounts to TEUR 324. The weighted average duration amounts to 8.2 years.
| over | |||||||
|---|---|---|---|---|---|---|---|
| 2016/17 | 2017/18 | 2018/19 | 2019/20 | 2020/21 | 5 years | Total | |
| Termination benefits | 623 | 646 | 624 | 617 | 846 | 8,206 | 11,562 |
In the following sensitivity analysis for termination benefit obligations, the impacts resulting from changes in significant actuarial assumptions were changed, whereas the other impact quantities were kept constant. However, in reality it will be rather likely that several of these impact quantities will change.
| Changes | Decrease | Increase | |
|---|---|---|---|
| in assumption | in assumption | in assumption | |
| Impact of changes in the discount rate | |||
| Defined benefit obligation (DBO) | ± 0.5 BP | 388 | -363 |
| Expected annual interest expenses (IC) | ± 0.5 BP | -42 | 38 |
| Expected annual service costs (CSC) | ± 0.5 BP | 10 | -9 |
| Impact of changes in salary increases | |||
| Defined benefit obligation (DBO) | ± 0.5 BP | -341 | 360 |
| Expected annual interest expenses (IC) | ± 0.5 BP | -5 | 6 |
| Expected annual service costs (CSC) | ± 0.5 BP | -10 | 11 |
| Impact of changes in fluctuation | |||
| Defined benefit obligation (DBO) | ± 5 % | 29 | -28 |
| Expected annual interest expenses (IC) | ± 5 % | 0 | 0 |
| Expected annual service costs (CSC) | ± 5 % | 1 | -1 |
The following amounts are recognized in the statement of comprehensive income as expenses for retirement benefits:
| 2015/16 | 2014/15 | |
|---|---|---|
| Change in liabilities recognized in the balance sheet: | ||
| Carrying amount as of 31 March of prior year | 15,520 | 13,363 |
| Remeasurements (actuarial gains/losses) | -185 | 2,328 |
| Current service cost | 7 | 11 |
| Interest expense | 312 | 452 |
| Payments | -876 | -862 |
| Currency translation differences | -176 | 230 |
| Carrying amount as of 31 March of fiscal year | 14,603 | 15,520 |
| Total, included in the staff costs (Note 5) | 7 | 11 |
| Total, included in the financial result (Note 8) | 312 | 452 |
Remeasurements are attributable to the following positions:
| 2015/16 | 2014/15 | |
|---|---|---|
| Remeasurements from changes in demographic assumptions | 0 | 0 |
| Remeasurements from changes in financial assumptions | -208 | 1,984 |
| Remeasurements from other changes (experience adjustments) | 23 | 344 |
| Total | -185 | 2,328 |
The expected allocation for retirement benefits for the next fiscal year 2016/2017 amounts to TEUR 320. The weighted average duration amounts to 10.2 years.
| over | |||||||
|---|---|---|---|---|---|---|---|
| 2016/17 | 2017/18 | 2018/19 | 2019/20 | 2020/21 | 5 years | Total | |
| Retirement benefits | 888 | 859 | 858 | 855 | 851 | 13,775 | 18,087 |
In the following sensitivity analysis for pension obligations, the impacts resulting from changes in significant actuarial assumptions were changed, whereas the other impact quantities were kept constant. However, in reality it will be rather likely that several of these impact quantities will change.
| Changes | Decrease | Increase | |
|---|---|---|---|
| in assumption | in assumption | in assumption | |
| Impact of changes in the discount rate | |||
| Defined benefit obligation (DBO) | ± 0.5 BP | 641 | -591 |
| Expected annual interest expenses (IC) | ± 0.5 BP | -53 | 48 |
| Impact of changes in pension increases | |||
| Defined benefit obligation (DBO) | ± 0.5 BP | -592 | 635 |
| Expected annual interest expenses (IC) | ± 0.5 BP | -11 | 12 |
| 2015/16 | 2014/15 | |
|---|---|---|
| Liabilities of acquisition of shares | 2,077 | 2,036 |
| Truck toll collection system Czech Republic | 229 | 568 |
| Other | 1,027 | 2,053 |
| 3,333 | 4,657 |
Liabilities of acquisition of shares relate to a variable purchase price component (earn-out payment) from the acquisition of shares in Kapsch Telematic Services GmbH, Vienna, amounting to TEUR 2,077 (2014/15: TEUR 2,036), see note 31.
Other non-current liabilities relate to trade payables (non-current) amounting to TEUR 229 (2014/15: TEUR 568) due to subcontractors for the installation of the Czech truck toll collection system. As in the prior year, these liabilities are due in more than 1 year and less than 5 years as of the balance sheet date. These non-current liabilities were discounted on the basis of cash flows using discount rates that correspond to those rates applied in discounting non-current receivables from the Czech truck toll collection system (see Note 16). Thus, the fair values approximate the carrying amounts.
Other non-current liabilities mainly relate to loans from minority shareholders of TMT Services and Supplies (Pty) Ltd., Capetown, South Africa amounting to TEUR 35 (2014/15: TEUR 1,483), to the non-current portion of a contingent payment obligation amounting to TEUR 272 (2014/15: TEUR 288) from the acquisition of the "Mobility Solutions" business of TechnoCom Corporation, Encino, U.S.A., as well as rental payments for American subsidiaries amounting to TEUR 576 (2014/2015: TEUR 0).
The gross cash flows of other non-current liabilities are as follows:
| 2015/16 | 2014/15 | |
|---|---|---|
| Less than 2 year | 573 | 1,080 |
| Between 2 and 3 years | 2,341 | 2,181 |
| More than 3 years | 654 | 1,704 |
| 3,568 | 4,966 |
| 2015/16 | 2014/15 | |
|---|---|---|
| Amounts due to customers for contract work | 20,340 | 17,786 |
| Prepayments received | 508 | 349 |
| Current portion of other non-current liabilities | 8 | 162 |
| Current liabilities from derivatives and hedging activities | 0 | 47 |
| Current employee liabilities | 22,274 | 18,984 |
| Liabilities to tax authorities (other than income tax) | 5,234 | 5,241 |
| Liabilities from tax compensation to the tax group leader | 4,421 | 4,298 |
| Other liabilities and deferred income | 26,557 | 18,668 |
| 79,342 | 65,535 |
Amounts due to customers for contract work detail as follows:
| 2015/16 | 2014/15 | |
|---|---|---|
| Construction costs incurred plus recognized gains | -136,723 | -76,019 |
| Less amounts billed and prepayments received | 157,063 | 93,805 |
| 20,340 | 17,786 |
As of 31 March 2016, amounts due to customers for contract work mainly relate to toll collection projects in North America (2014/15: toll collection projects in North America).
| 2015/16 | 2014/15 | |
|---|---|---|
| Non-current provisions | 1,396 | 1,661 |
| Current provisions | 8,946 | 9,225 |
| Total | 10,341 | 10,886 |
| Additions | Addition | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| from the | from | Currency | |||||||
| 31 March | acquisition of | interest | Reclassi | translation | 31 March | ||||
| 2014 | companies | expenses | Addition | Utilization | Disposal | fication | differences | 2015 | |
| Obligations from anniversary | |||||||||
| bonuses | 1,120 | 0 | 38 | 34 | 0 | -2 | 0 | 0 | 1,189 |
| Other | 183 | 0 | 5 | 272 | -52 | 0 | 0 | 64 | 472 |
| Non-current provisions, total | 1,303 | 0 | 43 | 306 | -52 | -2 | 0 | 64 | 1,661 |
| Warranties | 1,637 | 0 | 0 | 209 | -18 | -245 | 0 | 28 | 1,611 |
| Losses from pending | |||||||||
| transactions and rework | 16,201 | 0 | 0 | 0 | -3 | -16,162 | 0 | -36 | 1 |
| Legal fees, costs of litigation | |||||||||
| and contract risks | 4,071 | 0 | 0 | 220 | -2,682 | -1,198 | 0 | -9 | 402 |
| Other | 6,468 | 0 | 0 | 5,148 | -4,337 | -396 | 0 | 328 | 7,211 |
| Current provisions, total | 28,378 | 0 | 0 | 5,577 | -7,039 | -18,001 | 0 | 311 | 9,225 |
| Total | 29,680 | 0 | 43 | 5,882 | -7,091 | -18,004 | 0 | 375 | 10,886 |
| 31 March 2015 |
Additions from the acquisition of companies |
Addition from interest expenses |
Addition | Utilization | Disposal | Reclassi fication |
Currency translation differences |
31 March 2016 |
|
|---|---|---|---|---|---|---|---|---|---|
| Obligations from anniversary | |||||||||
| bonuses | 1,189 | 0 | 23 | 7 | 0 | -33 | 0 | 0 | 1,186 |
| Other | 472 | 0 | 4 | 215 | -5 | -340 | 0 | -137 | 210 |
| Non-current provisions, total | 1,661 | 0 | 28 | 221 | -5 | -373 | 0 | -137 | 1,396 |
| Warranties | 1,611 | 711 | 0 | 218 | -1 | -359 | 0 | -68 | 2,113 |
| Losses from pending | |||||||||
| transactions and rework | 1 | 0 | 0 | 0 | 0 | -1 | 0 | 0 | 0 |
| Projects (excl. impending | |||||||||
| losses) | 0 | 0 | 0 | 0 | -4 | 0 | 3,216 | -17 | 3,196 |
| Legal fees, costs of litigation | |||||||||
| and contract risks | 402 | 0 | 0 | 6,572 | -3,337 | -184 | 0 | -103 | 3,349 |
| Costs of dismantling, removing | |||||||||
| and restoring assets | 0 | 183 | 0 | 0 | 0 | -15 | 0 | -12 | 156 |
| Other | 7,211 | 0 | 0 | 2,041 | -4,100 | -1,699 | -3,216 | -105 | 132 |
| Current provisions, total | 9,225 | 894 | 0 | 8,831 | -7,442 | -2,258 | 0 | -305 | 8,946 |
| Total | 10,886 | 894 | 28 | 9,052 | -7,447 | -2,631 | 0 | -441 | 10,341 |
The provision for anniversary bonuses relates to non-current entitlements of employees based on Collective Agreements. The valuation was based on an interest rate of 1.15 % – 1.75 % (2014/15: 2.10 %), the earliest possible statutory retirement age including transition provisions and using the mortality tables AVÖ 2008-P (2014/15: AVÖ 2008-P) by Pagler & Pagler, increases in salary were considered at 2.5 % (2014/15: 2.0 %).
As manufacturer, dealer and service provider, the group issues product warranties at the time of sale to its customers. Usually, under the terms of the warranty contract, the group has the obligation to repair or replace manufacturing or software defects that become apparent within the period under guarantee. When the group expects warranty claims on products sold or services rendered during the period under guarantee, a corresponding provision is set up in the financial statements. Based on the expectation that the majority of the expenditure will be incurred in the short or medium term, the best estimate for the cost of warranty is used for the recognition of the provision. Likewise, historical data is taken into account in the calculation of the provision amount. According to past experience, it is probable that there will be claims under the warranties.
The provision for losses from pending transactions and rework was set up for expected losses from not yet completed construction contracts at the balance sheet date. Due to a change in circumstances as of 30 September 2014 a provision for losses from pending transactions and rework in the amount of TEUR 16,162 had to be reversed in the second quarter of fiscal year 2014/15. The management considers the risk of incurring the pending loss as remote.
The provisions for projects (excl. impending losses) mainly regard to maintenance-, extension- and repairservices for current toll projects.
Provisions for legal fees, costs of litigation and contract risks mainly regard to current case laws and consulting costs related to acquisitions.
Costs of dismantling, removing and restoring assets mainly relate to a provision for dismantling sensors in the area of mobility solutions for cities after expiry of the contract of an American subsidiary.
Other provisions mainly include provisions for commissions and bonuses, rebate in kind, outstanding credit notes and project costs as well as discounts granted to customers.
The group's contingent liabilities primarily result from large-scale projects. Other commitments mainly relate to contract and warranty bonds, bank guarantees, performance and bid bonds as well as sureties.
Contingent liabilities and other commitments only include commitments to third-parties and are as follows:
| 2015/16 | 2014/15 | |
|---|---|---|
| Contract, warranty, performance and bid bonds | ||
| South Africa (Toll collection systems) | 47,029 | 45,697 |
| Australia (Toll collection systems) | 20,832 | 17,804 |
| Other | 241 | 1,246 |
| Total | 68,102 | 64,747 |
Operating activities require the disclosure of contract, warranty, performance and bid bonds for major projects, which are issued by financial institutes and insurance companies. In case the contractual obligations cannot be fulfilled, there is a risk of utilization, that can result in a recourse claim of the financial institute or insurance company against the group. Such an outflow of resources is expected as unlikely. This kind of contract, warranty, performance and bid bonds in the amount of TEUR 178,598 (previous year: TEUR 130,282) are not included in the contingent liabilities respectively in the financial statements.
For details of securities for above-mentioned contingent liabilities and other commitments, see Note 15 and Note 21. Furthermore, assets of Kapsch TrafficCom AB, Jönköping, Sweden, amounting to TEUR 9,756 (2014/15: TEUR 9,688) were pledged in favor of a Swedish bank in order to secure contingent liabilities.
The future payments from non-cancelable obligations from rental and operating lease contracts are presented below:
| 2015/16 | 2014/15 | |
|---|---|---|
| Up to 1 year | 14,474 | 13,519 |
| Between 1 and 5 years | 25,999 | 31,656 |
| Over 5 years | 12,069 | 15,894 |
| 52,543 | 61,069 |
Payments from operating leases recognized as expenses of the reporting period are as follows:
| 2015/16 | 2014/15 | |
|---|---|---|
| Rent | 10,365 | 10,833 |
| Motor vehicle leases | 1,461 | 1,621 |
| IT leases | 2,736 | 3,494 |
| Other | 640 | 532 |
| 15,202 | 16,481 |
On 14 April 2015 the group acquired a controlling interest in the Californian Streetline, Inc. Streetline is a leading smart parking company that offers intelligent data and modern analytics to solve parking space problems for end users. Afterwards the entity was merged into KTCSL Merger Corp. and since then trades under the name Streetline, Inc.
| Goodwill | 0 |
|---|---|
| Less fair value of net assets acquired | -189 |
| Consideration paid | 189 |
Assets and liabilities resulting from the acquisition are shown as follows:
| Fair value | |
|---|---|
| Property, plant and equipment | 1,251 |
| Intangible assets | 46 |
| Receivables and other assets | 580 |
| Cash and cash equivalents | 2,732 |
| Liabilities, other liabilities and deferred income | -4,399 |
| Net assets acquired | 210 |
| thereof controlling interests (90 %) | 189 |
| thereof non-controlling interests (10 %) | 21 |
The acquired company contributed revenue of TEUR 2,506 and a net loss of TEUR -3,038 to the group's result for the period from 14 April 2015 to 31 March 2016. If the acquisition had occurred on 1 April 2015, there would have been no material impact on the group's revenues or net income.
| 31 March 2016 | 31 March 2015 | ||||
|---|---|---|---|---|---|
| Non | Non | ||||
| Internal | Group's | controlling | Group's | controlling | |
| Entity, Headquarter of Entity | designation | share | interests | share | interests |
| Kapsch TrafficCom AG, Vienna | KTC | 100.00 % | 0.0 % | 100.0 % | 0.0 % |
| Kapsch TrafficCom Construction & Realization spol. s r.o., | |||||
| Prague, Czech Republic | KTC C&R CZ | 99.0 % | 1.0 % | 99.0 % | 1.0 % |
| Kapsch TrafficCom Ltd., Manchester, United Kingdom | KTC UK | 100.00 % | 0.0 % | 100.0 % | 0.0 % |
| Kapsch Components GmbH & Co KG, Vienna | KCO | 100.00 % | 0.0 % | 100.0 % | 0.0 % |
| Kapsch Components GmbH, Vienna | KCO GmbH | 100.00 % | 0.0 % | 100.0 % | 0.0 % |
| ArtiBrain Software Entwicklungsgesellschaft mbH, Vienna | ArtiBrain | 100.00 % | 0.0 % | 100.0 % | 0.0 % |
| Kapsch TrafficCom S.r.l. a socio unico, Milan, Italy | KTC Italy | 100.00 % | 0.0 % | 100.0 % | 0.0 % |
| Kapsch TrafficCom d.o.o., Ljubljana, Slovenia | KTC Slovenia | 100.00 % | 0.0 % | 100.0 % | 0.0 % |
| Transport Telematic Systems – LLC, Abu Dhabi, United Arab Emirates 4 | TTS, UAE | 49.0 % | 51.0 % | 49.0 % | 51.0 % |
| Kapsch TrafficCom Russia, OOO, Moscow, Russia | KTC Russia | 100.00 % | 0.0 % | 100.0 % | 0.0 % |
| Kapsch Telematik Technologies Bulgaria EAD, Sofia, Bulgaria | KTTB, Bulgaria | 100.00 % | 0.0 % | 100.0 % | 0.0 % |
| Kapsch TrafficCom Argentina S.A., Buenos Aires, Argentina | KTC Argentina | 100.00 % | 0.0 % | 100.0 % | 0.0 % |
| Kapsch TrafficCom Kazakhstan LLC, Almaty, Kazakhstan | KTC Kazakhstan | 100.00 % | 0.0 % | 100.0 % | 0.0 % |
| 31 March 2016 | 31 March 2015 | |||||
|---|---|---|---|---|---|---|
| Non | Non | |||||
| Internal | Group's | controlling | Group's | controlling | ||
| Entity, Headquarter of Entity | designation | share | interests | share | interests | |
| Kapsch Telematic Services IOOO, Minsk, Belarus | KTS Belarus | 100.00 % | 0.0 % | 100.0 % | 0.0 % | |
| Kapsch TrafficCom KGZ OOO, Bishkek, Kyrgyzstan | KTC Kyrgyzstan | 100.00 % | 0.0 % | 100.0 % | 0.0 % | |
| Kapsch TrafficCom Lietuva UAB, Vilnius, Lithuania | KTC Lithuania | 51.0 % | 49.0 % | 51.0 % | 49.0 % | |
| KTS Beteiligungs GmbH, Vienna | KTS Beteiligung | 100.00 % | 0.0 % | 100.0 % | 0.0 % | |
| Kapsch TrafficCom AB, Jonkoping, Sweden | KTC Sweden | 100.00 % | 0.0 % | 100.0 % | 0.0 % | |
| Kapsch TrafficCom do Brasil LTDA., Sao Paulo, Brazil | KTC Brazil | 100.00 % | 0.0 % | 100.0 % | 0.0 % | |
| Kapsch TrafficCom Australia Pty Ltd, Melbourne, Australia | KTC Australia | 100.00 % | 0.0 % | 100.0 % | 0.0 % | |
| Kapsch TrafficCom Chile S.A., Santiago de Chile, Chile | KTC Chile | 100.00 % | 0.0 % | 100.0 % | 0.0 % | |
| Kapsch TrafficCom France SAS, Paris, France | KTC France | 100.00 % | 0.0 % | 100.0 % | 0.0 % | |
| Kapsch TrafficCom PTE. LTD., Tripleone Somerset, Singapore | KTC Singapore | 100.00 % | 0.0 % | 100.0 % | 0.0 % | |
| Kapsch TrafficCom (M) Sdn Bhd, Kuala Lumpur, Malaysia | KTC Malaysia | 100.00 % | 0.0 % | 100.0 % | 0.0 % | |
| Kapsch TrafficCom Limited, Auckland, New Zealand | KTC New Zealand | 100.00 % | 0.0 % | 100.0 % | 0.0 % | |
| Kapsch TrafficCom South Africa (Pty) Ltd., Johannesburg, | ||||||
| South Africa | KTC SA | 100.00 % | 0.0 % | 100.0 % | 0.0 % | |
| Electronic Toll Collection (PTY) Ltd., Centurion, South Africa | ETC | 100.00 % | 0.0 % | 87.0 % | 13.0 % | |
| Kapsch TrafficCom South Africa Holding (Pty) Ltd., | ||||||
| Cape Town, South Africa | KTC SA Holding | 100.00 % | 0.0 % | 100.0 % | 0.0 % | |
| TMT Services and Supplies (Pty) Ltd., Cape Town, South Africa | TMT | 100.00 % | 0.0 % | 62.9 % | 37.1 % | |
| Mobiserve (Pty) Ltd., Cape Town, South Africa, | Mobiserve | 100.00 % | 0.0 % | 62.9 % | 37.1 % | |
| Berrydust 51 (Pty) Ltd., Cape Town, South Africa | Berrydust | 100.00 % | 0.0 % | 53.5 % | 46.5 % | |
| Kapsch TrafficCom B.V., Amsterdam, Netherlands | KTC BV | 100.00 % | 0.0 % | 100.0 % | 0.0 % | |
| Kapsch TrafficCom Canada Inc., Mississauga, Canada | KTC Canada | 100.00 % | 0.0 % | 100.0 % | 0.0 % | |
| Kapsch TrafficCom IVHS, S.A. de C.V., Mexico City, Mexico | KTC IVHS Mexico | 100.00 % | 0.0 % | 100.0 % | 0.0 % | |
| Kapsch TrafficCom Holding II US Corp., McLean, U.S.A. | KTC Hold. II US Corp. | 100.00 % | 0.0 % | 100.0 % | 0.0 % | |
| Kapsch TrafficCom IVHS Inc., McLean, U.S.A. | KTC IVHS Inc., USA | 100.00 % | 0.0 % | 100.0 % | 0.0 % | |
| Kapsch TrafficCom USA Inc., Duluth, U.S.A. | KTC USA, Inc. | 100.00 % | 0.0 % | 100.0 % | 0.0 % | |
| Kapsch TrafficCom Holding Corp., McLean, U.S.A. | KTC Holding Corp., USA | 100.00 % | 0.0 % | 100.0 % | 0.0 % | |
| Kapsch TrafficCom Inc., McLean, U.S.A. | KTC Inc., USA | 100.00 % | 0.0 % | 100.0 % | 0.0 % | |
| KTCSL Merger Corp., Delaware, U.S.A. 3 | KTCSL | — | — | 100,0 % | 0,0 % | |
| Streetline Inc., Foster City, U.S.A. 1 | Streetline | 81.2 % | 18.8 % | — | — | |
| Streetline International, Inc., Delaware, U.S.A. 1 | Streetline international | 81.2 % | 18.8 % | — | — | |
| SPS funding Co. LLC, Delaware, U.S.A. 1 | SPS Funding | 81.2 % | 18.8 % | — | — | |
| Kapsch Telematic Services GmbH, Vienna | KTS Austria | 100.00 % | 0.0 % | 100.0 % | 0.0 % | |
| Kapsch Telematic Services Kft. "v.a.", Budapest, Hungary 2 | KTS Hungary | — | — | 100.0 % | 0.0 % | |
| Kapsch Telematic Services spol. s r.o., Prague, Czech Republic | KTS CZ | 52.0 % | 48.0 % | 52.0 % | 48.0 % | |
| Kapsch Telematic Services GmbH Deutschland, Berlin, Germany | KTS Germany | 100.00 % | 0.0 % | 100.0 % | 0.0 % | |
| Kapsch Telematic Services Solutions A/S under tvangsoplosning, | ||||||
| Copenhagen, Denmark 5 | KTSS Denmark | 60.0 % | 40.0 % | 60.0 % | 40.0 % | |
| Kapsch Telematic Services Sp. z o.o., Warsaw, Poland | KTS Poland | 100.00 % | 0.0 % | 100.0 % | 0.0 % | |
| Kapsch Road Services Sp. z o.o., Warsaw, Poland | KRS Poland | 100.00 % | 0.0 % | 100.0 % | 0.0 % |
1 Foundation/acquisition in fiscal year 2015/16
2 Deconsolidation in fiscal year 2015/16
3 Merger in fiscal year 2015/16
For ease of presentation, the internal designations of the entities are stated in the following tables and explanations.
For all entities mentioned above the headquarter of the company complies with the country of incorporation.
With exception of the following entities all mentioned subsidiaries report at balance sheet date as of 31 March:
Entities which don´t report at balance sheet date as of 31 March due to legal restrictions:
Further entities with deviating balance sheet date:
The non-controlling interests represent the third party shares in the equity of consolidated subsidiaries.
The balance sheet of the consolidated subsidiaries with material non-controlling interests and the carrying amount of material non-controlling interests are represented below:
| Amounts before intercomany eliminations | ||||||
|---|---|---|---|---|---|---|
| Carrying amount | ||||||
| Information on the balance sheet | Non-current | Current | Non-current | Current | of non-controlling | |
| as of 31 March 2016 | assets | assets | liabilities | liabilities | Net | interests |
| KTS CZ | 1,285 | 36,076 | 0 | 18,545 | 18,816 | 8,772 |
| Streetline | 804 | 1,324 | 441 | 2,667 | -979 | -516 |
| Remaining | -444 | |||||
| Carrying amount as of 31 March 2016 | 7,811 |
| Carrying amount | ||||||
|---|---|---|---|---|---|---|
| Information on the balance sheet | Non-current | Current | Non-current | Current | of non-controlling | |
| as of 31 March 2015 | assets | assets | liabilities | liabilities | Net | interests |
| KTS CZ | 1,446 | 34,115 | 0 | 17,147 | 18,414 | 8,579 |
| KTS Poland | 3,582 | 34,890 | 1,198 | 20,699 | 16,575 | 0 |
| TMT | 8,576 | 7,259 | 1,483 | 3,454 | 10,899 | 4,374 |
| ETC | 3,552 | 34,412 | 33,334 | 17,363 | -12,733 | -1,044 |
| KTS Austria | 4,486 | 6,399 | 0 | 23 | 10,862 | 0 |
| Remaining | -506 | |||||
| Carrying amount as of 31 March 2015 | 11,403 |
The statement of comprehensive income of the consolidated subsidiaries with material non-controlling interests are represented below:
| Amounts before intercompany eliminations | Amounts attributable to non-controlling interests | ||||||
|---|---|---|---|---|---|---|---|
| Other com | Total com | Other com | Total com | ||||
| Information on the statement | Result for | prehensive | prehensive | Result for | prehensive | prehensive | |
| of comprehensive income 2015/16 | Revenues | the period | income | income | the period | income | income |
| KTS CZ | 80,332 | 14,001 | 368 | 14,369 | 6,720 | 177 | 6,897 |
| TMT | 19,461 | 2,461 | 4,365 | 6,826 | 913 | 1,619 | 2,532 |
| ETC | 52,881 | -12,001 | 1,961 | -10,040 | -1,773 | 255 | -1,518 |
| Streetline | 2,506 | -3,829 | 84 | -3,745 | -505 | 16 | -489 |
| Remaining | 12 | 49 | 61 | ||||
| Total | 5,368 | 2,115 | 7,483 |
| Amounts before intercompany eliminations | Amounts attributable to non-controlling interests | ||||||
|---|---|---|---|---|---|---|---|
| Other com | Total com | Other com | Total com | ||||
| Information on the statement | Result for | prehensive | prehensive | Result for | prehensive | prehensive | |
| of comprehensive income 2014/15 | Revenues | the period | income | income | the period | income | income |
| KTS CZ | 75,572 | 14,595 | -37 | 14,558 | 7,111 | -18 | 7,093 |
| KTS Poland | 66,294 | 16,062 | -3 | 16,060 | 535 | -2 | 533 |
| ETC | 53,567 | 1,311 | -1,327 | -16 | 71 | -172 | -102 |
| TMT | 19,343 | 164 | 1,051 | 1,215 | 61 | 390 | 450 |
| KTS Austria | 0 | 10,668 | 0 | 10,668 | -7 | 0 | -7 |
| Remaining | 7 | 1 | 8 | ||||
| Total | 7,778 | 198 | 7,976 |
The cashflow statement and dividends of the consolidated subsidiaries with material non-controlling interests are represented below:
| Cashflow from | ||||
|---|---|---|---|---|
| Dividends paid to | ||||
| Investing | Financing | Cash Net | non-controlling | |
| Operations | activities | activities | increase/decrease | shareholders |
| 20,726 | -482 | -13,967 | 6,276 | -6,704 |
| -465 | -2,109 | 3,239 | 665 | 0 |
| -4 | ||||
| -6,709 | ||||
| Cashflow from | |||||
|---|---|---|---|---|---|
| Dividends paid to | |||||
| Information on the cashflow | Investing | Financing | Cash Net | non-controlling | |
| statement 2014/15 | Operations | activities | activities | increase/decrease | shareholders |
| KTS CZ | 15,062 | -433 | -14,012 | 616 | -6,726 |
| KTS Poland | 15,965 | -398 | -3,505 | 12,063 | 0 |
| ETC | 2,000 | 0 | 2,148 | 4,148 | 0 |
| TMT | -166 | -294 | -829 | -1,288 | 0 |
| KTS Austria | 12,301 | 38 | -6,099 | 6,240 | -195 |
| KTS Belarus | 11,901 | -720 | -20,464 | -9,283 | 0 |
| Remaining | -9 | ||||
| Total | -6,930 |
The information mentioned above relate to amounts before intercompany eliminations.
The following transactions were performed with related parties:
Since January 2005 the company has provided services to the group in the area of group consolidation and legal advice. Expenses incurred by the group in the fiscal year 2015/16 amounted to TEUR 704 (2014/15: TEUR 624). Furthermore, the company invoices insurance costs (directors & officers liability insurance) to the group amounting to TEUR 22 (2014/15: TEUR 22).
In fiscal year 2014/15 the company sold 3 % of its shares in Kapsch Telematic Services GmbH, Vienna, to Kapsch TrafficCom AG. After this transaction, the group is the sole shareholder of Kapsch Telematic Services GmbH, Vienna. The purchase price consists of a fixed purchase price component (TEUR 2,000) and a variable purchase price component (earn-out component, that depends on the earnings before interest and taxes (EBIT) of the KTS Group, net of non-controlling interests, of the financial years 2015-2018).The fixed purchase price (TEUR 2,000) has been already paid in fiscal year 2014/15 the variable purchase price component in the amount of TEUR 2,077 (31 March 2015: TEUR 2,036) is recorded under other non-current liabilities, see Note 24).
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 also members. Accordingly, all tax effects of the group companies that are tax group members are considered to be related party transactions.
In connection with the use of the KAPSCH trademark and logo, the company invoices license fees to the group. The license fee amounts to 0,5 % of all third-party sales of the group. Expenses incurred by the group in the fiscal year 2015/16 amounted to TEUR 2,575 (2014/15: TEUR 2,199).
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 fiscal year 2015/16 amounted to TEUR 1,512 (2014/15: TEUR 1,722).
Furthermore, the company invoices management and consulting services (including costs for the chairman of the executive board of the company, Georg Kapsch, and costs for consulting services of certain supervisory board members of the company amounted to TEUR 0 (2014/15: TEUR 90) to the group. Expenses incurred by the group in the fiscal year 2015/16 amounted to TEUR 1,750 (2014/15: TEUR 1,470).
Kapsch Aktiengesellschaft has entered into various insurance contracts covering all group companies, The cost allocated to the group in the fiscal year 2015/16 amounted to TEUR 607 (2014/15: TEUR 611). In addition Kapsch Aktiengesellschaft maintains a softwaretool (Hyperion Financial Management) and invoiced TEUR 120 (2014/15: TEUR 130) to the group for this service.
The company provides human resources services (payroll services, administration, recruiting, advice on labor law and human resources development) to the group and provides apprentices and trainees. Expenses incurred by the group in the fiscal year 2015/16 amounted to TEUR 1,861 (2014/15: TEUR 2,181).
Kapsch Components GmbH & Co KG provides logistic services to the company amounting to TEUR 8 (2014/15: TEUR 7).
The company leases telephone and IT equipment (hardware and software) to the group and provides IT support. Expenses incurred by the group in the fiscal year 2015/16 amounted to TEUR 290 (2014/15: TEUR 877).
The company delivers hardware (IT equipment) on behalf of Kapsch TrafficCom AG, Vienna, and provides maintenance and other services for various customer projects, the largest of which by far are the "truck toll collection system Austria" and the "truck toll collection system Poland", in the previous year as well the "truck toll collection system of the Republic of Belarus". The deliveries and services performed amounted to TEUR 3,132 in the fiscal year 2015/16 (2014/15: TEUR 3,592).
The company provides IT, data processing and telephone services to the group amounting to TEUR 5,303 (2014/15: TEUR 5,498), as well as other services amounting to TEUR 326 (2014/15: TEUR 111).
Kapsch Components GmbH & Co KG provides logistic services to the company amounting to TEUR 80 (2014/15: TEUR 76) and other services amounting to TEUR 14 (2014/15: TEUR 185).
Kapsch Components GmbH & Co KG provides logistic services to the company amounting to TEUR 798 (2014/15: TEUR 736), manufacturing services for GSM-R amounting to TEUR 9,163 (2014/15: TEUR 7,433) and provides the company with other deliverables and performances amounting to TEUR 549 (2014/15: TEUR 277).
Kapsch Components GmbH & Co KG provides manufacturing services to the company for GSM-R projects amounting to TEUR 1 (2014/15: TEUR 6,105) and provides the company with other logistic services amounting to TEUR 106 (2014/15: TEUR 169).
The company supplies hardware (IT-equipment) to the group for a customer project and provides other services for the project in in the Czech Republic. The value of goods and services delivered in the fiscal year 2015/16 amounts to TEUR 52 (2014/15: TEUR 171).
The company provides technical maintenance services for the Czech truck toll collection system and is responsible for the current IT support for the Czech subsidiaries. Expenses incurred for this in the fiscal year 2015/16 totaled TEUR 4,279 (2014/15: TEUR 3,709). Furthermore, the company provided public relations services amounting to TEUR 91 in the fiscal year 2015/16 (2014/15: TEUR 90) and other services amounting to TEUR 64 (2014/15: TEUR 93).
The Company provides hardware (IT equipment) to the group and renders maintenance and other services for the customer project in Poland. These services amounted to TEUR 1,723 in the fiscal year 2015/16 (2014/15: TEUR 2,031).
The company provides services in the area of motor vehicle management and automotive services amounting to TEUR 107 (2014/15: TEUR 150) in the fiscal year 2015/16.
Lease income of the group resulting from the sub-lease to related parties in the fiscal year 2015/16 totaled TEUR 481 (2014/15: TEUR 491).
In the prior year (fiscal year 2014/2015) Erwin Toplak, former member of the Managing Board of Kapsch TrafficCom AG, Vienna, received a dividend for his shareholding in Kapsch Telematic Services GmbH, Vienna, in the amount of TEUR 195. As of 31 March 2016 Erwin Toplak does not hold any shares in Kapsch Telematic Services GmbH, Vienna. Relating to this, no dividend was distributed in fiscal year 2015/2016.
Liabilities for pension benefits include pension obligations (pensions in payment) to the widow of Karl Kapsch, a former board member of Kapsch Aktiengesellschaft.
Services are usually negotiated with related parties on a cost-plus basis. Goods are bought and sold at arm's length.
The following tables provides an overview of revenues and expenses in the respective fiscal years as well as receivables from and payables due to related parties at the respective balance sheet dates:
| 2015/16 | 2014/15 | |
|---|---|---|
| Parent company | ||
| Revenues | 0 | 0 |
| Expenses | 726 | 646 |
| Affiliated companies | ||
| Revenues | 11,305 | 15,565 |
| Expenses | 23,764 | 23,867 |
| Other related parties | ||
| Revenues | 149 | 184 |
| Expenses | 396 | 1,027 |
| 2015/16 | 2014/15 | |
|---|---|---|
| Parent company | ||
| Trade receivables and other assets | 0 | 0 |
| Trade payables and other payables | 4,481 | 4,360 |
| Liabilities from share purchase | 2,077 | 2,036 |
| Affiliated companies | ||
| Trade receivables and other assets | 1,728 | 2,107 |
| Trade payables and other payables | 3,512 | 3,738 |
| Other related parties | ||
| Trade receivables and other assets | 15 | 127 |
| Trade payables and other payables | 293 | 289 |
Earnings per share (undiluted earnings) are calculated by dividing the result for the period attributable to equity holders of the company by the weighted average number of ordinary shares in issue during the year, excluding, if any, ordinary shares purchased by the Company and held as treasury shares. As of 31 March 2016, as in the prior year, no treasury shares were held by the company. There were no dilutive effects.
| 2015/16 | 2014/15 | |
|---|---|---|
| Result for the period attributable to equity holders of the company (in EUR) | 31,091,775 | 3,629,908 |
| Weighted average number of ordinary shares | 13,000,000 | 13,000,000 |
| Earnings per share (in EUR) | 2.39 | 0.28 |
¾On 14 December 2015, Kapsch TrafficCom concluded an agreement with Schneider Electric S.E. concerning an acquisition of its global transportation business. The Closing was on April 1, 2016.
The transportation segment, which previously operated under the name Telvent Tráfico y Transporte, is a provider of real-time IT solutions and intelligent traffic systems for use in cities, on highways and in tunnels. The portfolio also includes tolling and transit solutions. The acquisition will enable Kapsch TrafficCom to offer existing and future customers an integrated portfolio of intelligent transportation solutions from the highway into the city.
| Consideration paid | 30,000 |
|---|---|
| Adjustment of purchase price (provisionally determined) | -2,558 |
| Purchase price total (provisionally determined) | 27,442 |
| Less fair value of net assets acquired (provisionally determined) | -30,432 |
| Difference between purchase price and net assets acquired (provsionally determined) | -2,991 |
Assets and liabilities resulting from the acquisition are shown as follows (provisionally determined):
| Fair value | |
|---|---|
| Property, plant and equipment | 721 |
| Intangible assets | 5,170 |
| Other non-current assets | 157 |
| Inventories | 656 |
| Receivables and other current assets | 57,013 |
| Cash and cash equivalents | 9,542 |
| Liabilities, other liabilities and deferred income | -42,827 |
| Net assets acquired (provisionally determined) | 30,432 |
The above presentation is based on a preliminary purchase price allocation. The values may change subject to the audit to be performed on the opening balances as well as any contractually stipulated purchase price adjustments.
The average number of staff in the fiscal year 2015/16 was 3,329 salaried employees and 186 waged earners (2014/15: 3,313 salaried employees and 196 waged earners).
The expenses for the auditor amount to TEUR 193 (2014/15: TEUR 199) and are broken down as follows:
| 2015/16 | 2014/15 | |
|---|---|---|
| Audit of the consolidated financial statements | 56 | 55 |
| Other assurance services | 80 | 65 |
| Tax advisory services | 0 | 0 |
| Other services | 57 | 79 |
| 193 | 199 |
Compensation and other payments to members of the executive and the supervisory board In the fiscal year 2015/16, the following persons served on the executive board:
Georg Kapsch (Chief Executive Officer) André Laux Alexander Lewald (since 1 November 2015) The compensation paid to members of the executive board is shown below:
| Fix | Variable | Total | Total | |
|---|---|---|---|---|
| 2015/16 | 2015/16 | 2015/16 | 2014/15 | |
| Georg Kapsch | 653 | 0 | 653 | 643 |
| André Laux | 374 | 117 | 490 | 472 |
| Alexander Lewald | 133 | 0 | 133 | 0 |
| Total | 1,160 | 117 | 1,276 | 1,114 |
Expenses for termination benefits after use of provision for members of the executive board amount to TEUR 9 (2014/15: TEUR 59).
Individual pension agreements are granted to André Laux and Alexander Lewald. Therefore Kapsch TrafficCom AG paid TEUR 23 (2014/15: TEUR 10) to an external pension fund.
In the fiscal year 2015/16, the following persons served on the supervisory board:
Franz Semmernegg (Chairman) Kari Kapsch (Deputy-Chairman) Sabine Kauper Harald Sommer
Delegated by the works council:
Christian Windisch Martin Gartler
Remunerations paid to supervisory board members (inclusive travel costs) amounted to TEUR 122 (2014/15: TEUR 46) in total.
As in the previous years, no advances or loans were granted to members of the executive and supervisory board, nor any guarantees issued in their favor.
Authorized for issue: Vienna, 8 June 2016
Georg Kapsch Chief Executive Officer
André Laux Executive board member
Alexander Lewald Executive board member
We have audited the accompanying consolidated financial statements of Kapsch TrafficCom AG, Vienna, which comprise the consolidated balance sheet as of 31 March 2016, the consolidated statement of comprehensive income, the consolidated cash flow statement and the consolidated statement of changes in equity for the fiscal year then ended, and the notes to the consolidated financial statements.
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU, and the additional requirements under Section 245a UGB, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Austrian generally accepted auditing standards. Those standards require the application of the International Standards on Auditing according to which we are to comply with ethical requirements and to plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Group's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We draw attention to the fact that the English translation of this auditor's report according to Section 274 of the Austrian Commercial Code (UGB) is presented for the convenience of the reader only and that the German wording is the only legally binding version. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Our audit did not give rise to any objections. In our opinion, the consolidated financial statements comply with legal requirements and give a true and fair view of the financial position of the Group as of 31 March 2016 and of its financial performance and its cash flows for the fiscal year then ended in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU and the additional requirements under Section 245a UGB.
Pursuant to statutory provisions, the management report for the Group is to be audited as to whether it is consistent with the consolidated financial statements and as to whether the other disclosures are not misleading with respect to the Group's position. The auditor's report also has to contain a statement as to whether the management report for the Group is consistent with the consolidated financial statements and whether the disclosures pursuant to Section 243a UGB are appropriate.
In our opinion, the management report for the Group is consistent with the consolidated financial statements. The disclosures pursuant to Section 243a UGB are appropriate.
Vienna, 8 June 2016
PwC Wirtschaftsprüfung GmbH
signed: Peter Pessenlehner Austrian Certified Public Accountant
We draw attention to the fact that the English translation of this auditor's report according to Section 274 of the Austrian Commercial Code (UGB) is presented for the convenience of the reader only and that the German wording is the only legally binding version.
| Management Report as of 31 March 2016 103 | |
|---|---|
| Statement of all Members of the Managing Board 122 | |
| Additional Information pursuant to Section 82 Para. 4 No. 3 BörseG 123 | |
| Balance Sheet as of 31 March 2016 124 | |
| Income Statement for the fiscal year 2015/16 125 | |
| Notes to the financial statements for the fiscal year 2015/16 126 | |
| Auditor's Report 138 |
The 2015 economic development lagged behind the prior year's development but still showed a robust global economic growth of 3.1% (2014: 3.4%). While the developed economies were gradually gaining momentum, the emerging and developing countries again reported weaker growth; nonetheless, these countries accounted for approx. 70% of global economic growth. After a growth of 3.5% in 2014, global trade expanded by only 2.8% as a result of the weaker economic situation in 2015. The volumes of internationally traded goods and services are however predicted to grow more strongly in 2016. The economic forecast for the upcoming years shows a somewhat more dynamic development of the global economy. The International Monetary Fund (IMF) predicts global economic growth of 3.2% for 2016 and 3.5% for 2017.
As in the previous year, the U.S. economy expanded by 2.4% in 2015. The Federal Reserve (Fed) changed its interest policy for the first time since 2006 by raising the US key interest rate (ranging from 0.25% to 0.5%). Due to the early announcement and the rather gradual "normalisation" of the monetary policy, the impact of this change on the economy was however negligible. The economic confidence was dampened in the reporting period by the strong appreciation of the dollar which put a strain on the export business. Privat consumption remained the key driver for growth.
In the reporting period, the emerging and developing countries have reported the lowest growth (4.0%) since the financial crisis 2008/09, with the still low commodity prices - among other things - inhibiting the economic development.
China's economy declined to reach a level of below 7%, and at 6.9%, showed the lowest value since 1990. The country currently is in a transformation process, changing from labour-intensive and export-intensive production to an economy that is more strongly based on technology and service. For the upcoming years, it is predicted that China's economy will once more slow down to 6.5% in 2016 and to 6.2% in 2017. Overall, Asia still reports a positive development. India achieved a significant GDP growth of 7.3% in 2015. With regard to the ASEAN 5 countries, at least a gradual improvement of the economic performance can be seen: GDP growth improved from 4.6% in the prior year to 4.7% in 2015 and is expected to improve even more in the upcoming years according to the IMF.
The Commonwealth of Independent States (CIS) was still in the grip of the Russia-Ukraine conflict, low oil prices and high inflation. In consequence, the economic performance fell by 2.8%, after having shown at least moderate growth of 1.1% in 2014. Russia, the biggest CIS member in terms of economy, faced a GDP decline of 3.7% in 2015. As in the previous year, the economic outlook was bleak due to the drop in the oil price, the economic sanctions of the EU and the depreciation of the rouble.
In Latin America (including the Caribbean), the economic performance also fell in 2015, even if only to a moderate extent (-0.1%). Weak commodity prices, declining demand, highly volatile finanical markets and structural problems led to negative growth rates particularly with regard to the bigger economies, such as Brazil, Venezuela and Argentina. Other economies like Peru, Mexico or Chile at least were able to achieve low one-digit expansion rates.
The generally subdued economic development prevailing in the reporting period was also observed in sub-Saharan Africa and the MENAP region (Middle East, North Africa, Afghanistan and Pakistan), with growth significantly slowing down to 3.4% in sub-Saharan Africa and the MENAP region growing by only 2.5% after a growth of 2.8% in the prior year.
Economic growth stabilised compared to the previous year in Europe in 2015, with aggregate GDP of the EU-28 growing by 1.9%. This development was particularly due to strong consumption, while the companies' willingness to invest was affected by the subdued global economy. The diverse developments at country level were also remarkable: While GDP growth in the big economies such as Germany (+1,7%) and France (+1.1%) was below the EU average, Ireland expanded at a relatively strong pace (+6.9%). Economists expect growth in Europe in 2016 to remain unchanged given the difficult international environment. The situation on the labour market, however, is expected to further improve. With a rate of below 10% in the EU-28 in 2015, unemployment improved to 8.9% at the beginning of 2016 which is the lowest level in seven years.
The economic trend in the euro area lagged behind the overall trend in the EU in 2015. The economy in the monetary union was up on the prior year by 1.6%. Although the majority of the euro countries did not slip into a deflation phase as predicted, the planned inflation target of just under 2% was not achieved. The European Central Bank (ECB) therefore extended its expansive monetary policy in the reporting period and prolonged the programme to purchase government bonds and other securities until at least the end of March 2017. Moreover, the key interest rate was lowered to 0% for the first time in history with a view to further promote the flow of money into the real economy.
Central and Southeast Europe reported a slight improvement in their economic development in 2015, with the region further gaining on the EU-28. The positive regional development was marked by the still precarious situation in Ukraine and Russia. Czechia, Romania, Poland and Slovakia however each achieved GDP growth of more than 3%. In 2016, Central and Southeast Europe is expected to remain on an overall stable growth path.
The moderate economic development continued over the reporting period in Austria, showing GDP growth of 0.9% in 2015. Foreign trade contributed less to this development compared to the past. In specific terms, the nominal increase in exported goods stood at only 2.7% due to the economic downturn in the emerging countries and the EU sanctions on Russia. Nevertheless, economists expect a slightly stronger GDP growth of 1.6% for 2016.
Kapsch TrafficCom addresses the market for Intelligent Transportation Systems (ITS). ITS employ information and communication technologies to support and optimise road transportation, including infrastructure, vehicles, users and industries.
The study "Intelligent Transportation Systems - A global strategic business report" from Global Industry Analysts, April 2014, describes the ITS market as a diverse market with widely differing application and product segments. Thus, the market comprises the following three product segments:
Electronic Toll Collection (ETC) enables drivers to pay toll fees without stopping at toll stations.
Advanced Traffic Management Systems (ATMS) used for monitoring traffic, optimising signal timings and regulating the flow of traffic.
Commercial Vehicle Operations (CVO) encompassing systems for operating commercial vehicles in order to enhance freight carrier productivity and safety,
Global Industry Analysts (April 2014) estimated that the global volume of the ITS market amounted to approx. USD 17.2 billion in 2015 and is expected to continue growing. The largest product segment in 2015 was Other Intelligent Transportation Systems, accounting for 38.8% (USD 6.7 billion). Based on a worldwide volume of USD 4.5 billion, ETC had an ITS market share of 26.0%. The largest geographic region for ITS in 2015 was the U.S.A. at 38.2%. followed by Europe at 30.3%.
According to this study, the ITS market is expected to grow at an average annual rate of 8.7% between 2012 and 2020 to reach a global volume of USD 26.3 billion in 2020, of which ETC will account for USD 7.8 billion, equaling a share of 29.5% and thereby exhibiting the fastest growth of all product segments at an average annual rate of 11.5%.
| 2012 | 2015 | 2020 | Regions | 2012 | 2015 | 2020 |
|---|---|---|---|---|---|---|
| U.S.A | 40% | 38% | 38% | |||
| Europe | 30% | 30% | 28% | |||
| 4.9 (37%) | 6.0(35%) | 8.8(34%) | Japan | 17% | 17% | 15% |
| 3.3(24%) | 4.5 (26%) | 7.8 (30%) | China | 5% | 6% | 9% |
| 5.3 (39%) | 6.7(39%) | 9.7 (36%) | Other | 8% | 8% | 10% |
Global ITS market by product sgements and geographic regions (in USD billion)
The past four years have shown that trends on the ITS market have arisen - in part due to economic conditions - that significantly influenced the development. Due to a lack of current studies, it is difficult to estimate how much the current market volume deviates from these forecasts from 2012.
Kapsch TrafficCom has developed its own understanding and view of the ITS market in order to define and develop its own market positioning. To this end, the ITS market was divided into four customer segments and the corresponding primary addressees were identified.
Operator/infrastructure-related ITS encompasses both ETC and ATMS as well as applications for urban access and parking. The addressees are governments and their authorities, road and toll operators as well as concessionaires, that develop transport policies using ITS to ensure the availability and quality of the infrastructure in a way that improves safety and security, performance, and environmental protection.
Vehicle-related ITS aims at in-car telematics such as remote diagnostics or driver assistance systems (AVIS). They are intended mainly to enhance vehicle productivity, particularly that of commercial vehicles (CVO), as well as traffic safety and security. Addressees are car manufacturers and their suppliers. This field also includes systems for realtime interaction between vehicles (vehicle-to-vehicle; V2V) as well as between vehicles and infrastructure (vehicle-toinfrastructure; V2I), collectively abbreviated as V2X, which Kapsch TrafficCom believes will be based on 5.9 GHz technology.
User-related ITS focuses mainly on convenience and efficiency for travelers. The customer in the car receives information to aid in orientation during the journey, thereby increasing traffic safety. Example applications for Advanced Vehicle Information Systems (AVIS) include for example transmitting traffic-related vehicle information to travelers before or during the journey as well as navigation services. Addressees are information service providers such as mobile network operators, radio broadcasters and vendors of portable navigation devices, as well as end users particularly with regard to future solutions.
Industry-related ITS encompasses commercial applications designed to reduce the costs or maximise the yield of vehicle fleet operators, including public transportation companies (PVTMS). Example applications include systems for fleet management and for collecting information on the logistics of large-scale vehicle operators. Among the addressees are insurance companies, who see pay-as-you-drive car insurance as a promising way to attract new customers by offering fair insurance rates and ITS-based value-added mobility services.
The current focus of Kapsch TrafficCom aims at the operator/infrastructure-related segment of the ITS market. In line with its Strategy 2020 and the goal to become a leading provider of intelligent mobility solutions, the focus will also be more on vehicle-related and user-related ITS. Kapsch TrafficCom also monitors the ongoing developments in industry-related ITS.
Kapsch TrafficCom believes that the following matters are the main drivers for the market which it currently addresses.
Mobility. As prosperity rises, people want to be more mobile which thus leads to an increasing demand with regard to traffic systems. Mobility is increasingly perceived as a basic need or as a necessity. The traffic systems to meet this need or necessity vary considerably at global level. Taking the number of passenger cars per 1,000 inhabitants as an indicator to measure the level of development shows the catch-up potential in many countries: While the U.S.A. have an average of 800 passenger cars per 1,000 inhabitants, the rate declines to almost 100 passenger cars in Southamerican countries and in part significantly even below that number in Africa. If the emerging countries, such as China or Brazil, continue to gain in terms of economy at the same pace, individual traffic is expected to also grow strongly. The trend of newly registered cars confirms this development. In China alone more than 18 million new cars were registered in 2014 -- up by one third compared to the EU taken as a whole. More than 30 cities in China today have more than 1 million cars.
Urbanisation. The number of people living in cities is growing. While only 2% of the global population lived in cities in 1800, this percentage rose to above 50% of the global population for the first time in 2007. According to forecasts, the number of people living in cities will reach 60% until 2030 and will again rise to 70% by 2050. Based on these numbers, there will be 40 mega cities with more than 10 million inhabitants already by 2025. This growth trend poses great challenges also for urban traffic infrastructure and means investments in intelligent and sustainable traffic systems.
Climate protection. Traffic in Europe is responsible for more than one quarter of the energy consumption and CO2 emissions, road traffic makes up 20%. Today, 64% of all kilometres are travelled in urban environment. In Vienna, about one third of traffic-related CO2 emissions alone is attributable to finding a parking space. The total annual amount of kilometres travelled in cities is expected to almost treble from 25.8 trillion to 67.1 trillion from 2010 to 2050. Based on this development, city dwellers will spend 106 hours per year in tailbacks in 2050. In addition to statutory provisions for the automobile industry to curb CO2 emissions, a changed usage pattern and particularly intelligent traffic management systems are required to achieve substantial improvements.
Expansion and funding of traffic infrastructure. The basic need for mobility, increasing urbanisation as well as the increasing freight traffic in global economic exchange show the limits of today's traffic systems. Motorways built decades ago no longer meet the requirements. Despite intensive efforts to make railway transport more attractive, Europe's road traffic has been strong for years now.
The willingness of governments to invest in the expansion of transport systems is, among other things, related to reliable funding options. While Austria has increased investments in the motorway network over the past ten years, Germany, Japan and the United Kingdom cut back on investments in this sector.
At a total length of 84,700 km in 2005, the Trans-European Network (TEN-T) covered about 25% of the total primary road network in the European Union, but accounted for only 40% of road traffic. Until 2020, an average expansion of 4,800 km per year is expected, of which 3,500 km existing roads. It is particularly in the new EU Member States as well as the corridors leading to these countries that have a high demand for investments. In its white paper "European transport policy for 2010", the European Commission states investment costs of EUR 600 billion until 2020. Traffic is thus expected to increase in the longer term. Investments are required for the construction of new infrastructure as well as for maintenance and servicing of existing road infrastructures.
About USD 55 billion is invested in the road infrastructure in the USA per year. Experts, however, estimate at least a doubling of this amount to more than USD 100 billion in the upcoming years in order to maintain functionality. The high funding requirements change business models and foster the emergence of private concession models.
Given the constraints on government budgets, alternative financing models with private investors participating will gain in importance over the next years. In order to ensure an economic operation of motorways, toll systems and traffic management systems will also become more important in the future.
The ITS market and/or environmental factors are affected by new technologies and fast technology cycles, opening new perspectives for Kapsch TrafficCom. The apparently conflicting targets of managing traffic on the one hand and the opportunities created by mobility on the other hand have to be solved in an intelligent fashion. Technological and organisational means are to be employed in such a manner so that the demand for transport neither affects the
environment nor the economic development. Kapsch TrafficCom is going to make an important contribution to this goal also in the future.
In the past years, a convergence on the ITS market began - an increasing convergence of individual market segments. Anticipating this development, although not at this pace, Kapsch TrafficCom has evolved from a mere supplier of Electronic Toll Systems (ETC) to a supplier who includes select ITS applications. Today, Kapsch TrafficCom believes that intelligent and comprehensive mobility solutions will be the future. The Company therefore endeavours to play a leading role in this development. This goal is defined in the Strategy 2020, with the Company striving to create an Intelligent Mobility Solutions (IMS) business. In order to achieve this goal, end customers are also more directly addressed and the portfolio is expanded to include urban infrastructure in addition to motorways.
In fiscal year 2015/16, Kapsch TrafficCom AG generated net sales in the amount of EUR 140.0 million, meaning a decline of 3.2% year on year. The Electronic Toll Collection (ETC) segment contributed 91.7% to the generated net sales, representing the core business with tolls collected. The Intelligent Mobility Solutions (IMS) segment contributed 8.3% in the reporting period.
In Austria, about 2,200 km of motorways and expressways are equipped with fully electronic toll systems for trucks above a maximum authorised vehicle weight of 3.5 tons, with Kapsch TrafficCom AG delivering the complete central and roadside infrastructure for almost 490 toll stations and now about 1 million on-board units (GO boxes) since 2004. As in the previous year, the average toll transaction rate generated in Austria remained at the high prior-year percentage of 99.8%. On 27 September 2011, the Company reached a basic agreement with ASFINAG Maut Service GmbH to renew the current operation and maintenance agreement for the nationwide electronic truck toll collection system in Austria until the end of 2018, with the renewal until June 2017 having already been ultimately confirmed by ASFINAG Maut Service GmbH.
On 17 August 2015, Kapsch TrafficCom was commissioned to further expand the Belorussian toll road network. In total, the toll system "BelToll" is planned to be expanded by 323 km from previously 1,200 km to more than 1,500 km within 10 months. Kapsch TrafficCom AG acts both as a developer as well as an operator of the toll system via its subsidiary Kapsch Telematic Services IOOO. An operating life of 20 years is envisaged.
On 18 August 2015, the Dutch Rijkswaterstaat, responsible for the construction and maintenance of road infrastructure, and Highways England, the English department responsible for operating and maintaining motorways, commissioned Kapsch TrafficCom on 7 October 2015 to deliver the advanced traffic management system DYNAC for the cross-border programme "CHARM", a joint programme of the English and Dutch authorities. The aim of this programme is an extensive modernisation and consolidation of motorway traffic management within 26 months. The order volume totals EUR 60 million, covering also services for a period of up to 13 years after the successful implementation of the system.
On 14 December 2015, Kapsch TrafficCom and Schneider Electric S.E. agreed on the transfer of the global transportation business. The transportation division, previously operating under the Telvent Tráfico y Transporte brand, offers real-time IT solutions and intelligent traffic systems for use in cities, on motorways and in tunnels. The portfolio also includes toll and transit solutions. This transfer enables Kapsch TrafficCom to offer an integrated combination of intelligent traffic solutions covering motorways and cities to existing and future customers around the world. The transfer was completed on 1 April 2016. Kapsch TrafficCom AG acquired the two Spanish companies and the "Ecotrafix" brand.
Net sales of Kapsch TrafficCom AG reached EUR 140.0 million in fiscal year 2015/16, thus down by 3.2% on the previous year (EUR 144.7 million). The Intelligent Mobility Solutions (IMS) segment exhibited a growth in net sales from EUR 4.0 million in the previous year to EUR 11.6 million. The Electronic Toll Collection (ETC) segment generated net sales in the amount of EUR 128.4 million (previous year EUR 140.7 million).
In comparison with the previous year, personnel expenses fell by EUR 5.5 million from EUR 43.4 million to EUR 37.9 million. The average number of staff fell from 552 to 455 in the fiscal year under review.
Other operating expenses were down by EUR 3.8 million from EUR 40.9 million to EUR 37.1 million in fiscal year 2015/16.
The operating result (EBIT) of Kapsch TrafficCom AG rose to EUR 21.3 million in the reporting year compared to EUR 17.8 million in the previous year.
The financial result of EUR 12.6 million (previous year: EUR 8.0 million) was mainly attributable to the income from investments.
The balance sheet total of EUR 377.6 million at the balance sheet date 31 March 2016 fell by EUR 0.8 million compared to the end of fiscal year 2014/15 (31 March 2015: EUR 378.4 million).
At EUR 242.9 million, equity exceeded the amount of EUR 221.1 million as of 31 March 2015. Kapsch TrafficCom AG's equity ratio thus increased from 58.4 % as of 31 March 2015 to 64.3% as of 31 March 2016.
On the assets side, inventories increased slightly from EUR 7.5 million to EUR 8.1 million.
The group receivables (incl. borrowings) fell from EUR 224.5 million in the previous year to EUR 180.7 million in the reporting year, thus affecting liquid funds that rose from EUR 30.0 million to EUR 58.4 million.
On the liabilities side of the balance sheet, long-term liabilities in particular fell from EUR 89.5 miltion in the previous year to EUR 70.8 million as of the balance sheet date 31 March 2016.
The short-term liabilities decreased from EUR 62.0 million in the previous year to EUR 58.0 million as of the balance sheet date 31 March 2016. At EUR 19.0 million, the group liabilities as of 31 March 2016 remained almost at prior-year's level (EUR 18.5 million). The short-term bank loans and overdrafts fell from EUR 21.8 million to EUR 15.9 million as of 31 March 2016.
The net cash flow from operating activities amounted to EUR 47.9 million after EUR 34.6 million in the comparative prior-year period. This development was particularly attributable to the decrease in receivables from affiliated companies.
The net cash flow from investing activities in the amount of EUR 14.5 million (previous year: EUR 8.8 million) mainly results from the financing of subsidiaries.
The net cash flow from financing activities in the amount of EUR -34.1 million (previous year! EUR -20.7 million) resulted from the repayment of financial liabilities and the payment of the dividend. In total, cash and cash equivalents increased from EUR 30.0 million as of 31 March 2015 to EUR 58.4 million as of 31 March 2016.
Kapsch TrafficCom AG has a global network of research and development centres in Vienna and Klagenfurt (Austria), Jönköping (Sweden), Bologna (Italy), Buenos Aires (Argentina), Mississauga (Canada), Kingston, Duluth, Pleasanton and San Mateo (U.S.A.), and Cape Town (South Africa). Research and development (R&D) are a high priority for Kapsch TrafficCom AG with respect to achieving its strategic goals. To ensure the inventiveness of the company, development departments exist for all strategic business fields to specifically work on new solutions for customer needs.
The following focal areas were defined in the past fiscal year:
The developments towards a modern platform for ETC back office solutions were consistently pursued. In doing so, special focus was on the integration and application of new technologies, such as data analytics tools or open source standard modules. Moreover, Kapsch TrafficCom AG further developed the different roadside platforms and launched a programme to gradually combine the different product lines.
Investments continue to be made to improve vehicle identification and classification sensors. The new generation of sensors increases the measurement accuracy and thus further optimises the overall performance of the solutions.
Kapsch TrafficCom AG develops DSRC components (on-board unit and transceiver) for the Italian market that are meant to support the special Italian radio standard ETSI-TS 102 708, HDR (High Data Rate). Basic development and certification of the transceiver were completed in the reporting period. The on-board unit is planned for 2017.
Kapsch TrafficCom AG's satellite-based toll system gains in importance due to the change in the toll market because the integration of smartphones and other terminal devices in addition to the GNSS on-board units expands the scope of the functions as well as the range of applications. Modernising the technologies used on an ongoing basis enables Kapsch TrafficCom AG to offer a future-proof solution that is modular and flexible with regard to the requirements of the combined ETC-IMS market.
With regard to cooperative systems (V2X), the focus was on the further development of Kapsch's traffic management solutions for vehicle-to-vehicle and vehicle-to-infrastructure communication in the course of the research project "European Corridor". Participation in some research projects in cooperation with the automotive industry led to close contact with leading original equipment manufacturers and first tier automotive suppliers. Activities in the field of V2X vehicle equipment were also pursued and the available products further improved. In addition to developing product and solutions portfolios for cooperating systems, Kapsch TrafficCom AG is also taking an active part in the required standardisation process in the U.S.A. and in Europe.
In the field of smart parking, the subsidiary Streetline developed a new procedure to register occupancy in a cost-efficient manner which reduces the required field sensor equipment to a minimum.
In fiscal year 2015/16, Kapsch TrafficCom AG invested roughly EUR 27.3 million in research and development (previous year: roughly EUR 33.7 million).
Kapsch TrafficCom AG sees itself as particularly committed to the central aspects of sustainability not least due to the business model of the Company. Securing the long-term stability of the company in consideration of all economic, environmental and social perspectives is the overarching goal. The focus lies on achieving the efficient and sparing use of resources of all kinds, securing the profitability and innovative strength and ensuring equal opportunities and fairness with respect to all relevant interest groups.
Kapsch TrafficCom AG understands sustainability as a continuous process. In recent years, the Company has begun systematising all the related agendas. One important milestone was reached with the publishing of the fourth sustainability report in May 2015, which is available at www.kapsch.net/ktc/investor_relations.
The sustainability report satisfies the requirements of the Global Reporting Initiative, GRI Guideline G3.1 (Application Level C). It also serves as a progress report for the United Nations Global Compact, which defines ten principles for protecting human rights and labor standards as well as environmental protection and fighting corruption.
The report provides comprehensive information about the central fields of action:
Protecting the environment, conserving resources and actively protecting the climate Securing the innovative strength Product responsibility and quality assurance Ensuring the competitiveness and profitability Integrity and compliance Attractive and responsible employer Social responsibility
Figures for success measurement as well as goals for the following period have been defined for each field of action. All such agendas are coordinated by a sustainability officer and reported to the executive board. Below please find a more detailed description of select fields of action.
The products and solutions for intelligent transportation systems from Kapsch TrafficCom AG make valuable contributions to climate protection. They allow road users to reach their destinations quickly, efficiently and with low environmental impact. In order for these ambitions to be realised also in the future in the best possible manner, Kapsch TrafficCom AG invests heavily in research and development.
A comprehensive guideline was created to ensure that environmental, economic, social, health and safety aspects are ideally taken into account in a structured fashion in the development and the design of products. The contents of this guideline must be integrated into the specifications and project invitations to tender.
The high standards of quality, safety and robust processes are a top priority in all units of Kapsch TrafficCom AG. Kapsch TrafficCom AG defines its processes in an integrated HSSEQ management system (Health, Safety, Security, Environment, Quality). This system is based on certifications according to ISO 9001 Quality Management (since 2002) as well as OHSAS 18001 Occupational Health and Safety Management and ISO 14001 Environmental Management (since 2005). Kapsch TrafficCom AG has anchored the necessary measures for ensuring the associated standards into its internal processes and continuously monitors compliance. The
certificate according to ISO 27001 defines the required information security management. A high service quality is ensured in the area of technical operation with ISO 20000 for IT service management. The so-called HSSEQ Circle meets once per quarter to discuss the status of the goals and measures from the areas of health and safety, quality, the environment and information security and to optimise work processes and information sharing. These aspects are documented in a quarterly report to the executive board.
The toll transaction rate is a figure for assessing the accuracy and reliability of a toll collection system. It indicates the number of successful transactions in relation to all potential toll transactions of vehicles equipped with a functioning on-board unit. A high toll transaction rate translates to high toll income.
The average toll transaction rate of the truck toll collection system in Austria was at approximately 99.81% in 2015 (2014: 99.89%), the average transaction rate of the nationwide electronic toll collection system in Czechia was approximately 99.6% in 2015 (2014: 99.6%). The calculation of the toll transaction rate is based on methods agreed upon with the respective customer, meaning that comparisons between the average transaction rates achieved in different projects are only possible on a limited basis.
The business activities are associated with the consumption of raw materials and the emission of climate-relevant emissions. Kapsch TrafficCom AG works intensively on minimising these impacts. The majority of the climate-relevant effects result from the business activities of the subsidiary Kapsch Components, which is responsible for production as well as the fleet of the entire group. Through effective measures to increase energy efficiency, but also influenced by a lower production volume, Kapsch Components was able to reduce its energy consumption by 0.7% in fiscal year 2013/14 following a reduction of 5% in the previous year. The waste volume per tonne of product was reduced by 13.5% to 135 kilograms and the nitrogen consumption per tonne of products by 5.1%.
The average number of employees of Kapsch TrafficCom AG in fiscal year 2015/2016 was 455 (previous year: 552). As of 31 March 2016, the Company's headcount was 427 (previous year: 512).
Kapsch TrafficCom AG makes contributions to an external pension fund for employees of group companies in Austria under a defined contribution scheme. The amounts of the payments are based on the individual employee's income and the operating profit margin of the Company.
Kapsch TrafficCom AG is aware of the employees' contribution to its success and acknowledges this through a profit participation plan. The Kapsch TrafficCom Group thus rewards the commitment of its employees by distributing to them up to 5% of the group profit before income taxes. Country-specific upper limits have been established to ensure that the distribution reflects local purchasing power. Every employee receives a share, which is independent of the person's salary or wage and limited to EUR 1,500 per employee.
Kapsch TrafficCom AG places great importance on the continued training and education of its employees. This involves not only promoting professional education but also providing seminars and workshops for developing personal skills. In addition, training sessions tailored to the particular needs of employees are offered within the framework of the Kapsch University. A job rotation programme promotes the international exchange of staff between various locations, and selected employees are prepared for their future tasks in a management trainee programme.
At Kapsch TrafficCome AG, women are in particular supported through a flexible working hours scheme that is designed to help combine professional and private life. Kapsch TrafficCom cooperates with schools, universities and universities of applied sciences in order to increase the proportion of women employed, among other goals. Kapsch TrafficCome AG also promotes women in the workforce through participation in specific programmes such as "FIT Frauen in die Technik" or "FemTech". A committee for non-discrimination has also been established within Kapsch TrafficCom AG.
Alongside statutory requirements and internal guidelines, the code of conduct of the Kapsch Group defines binding principles for ethically, morally and legally correct behavior that apply to all corporate units - and therefore to all employees of Kapsch TrafficCom AG. The code of conduct can be found on the website www.kapsch.net.
Additionally, within the scope of internal risk management, all business units over which Kapsch TrafficCom AG has primary influence are audited with regard to their corruption risks, and the employees of the first and second management levels are trained in anti-corruption policy and anti-corruption processes.
In accordance with the corporate values, Kapsch TrafficCom AG accepts social responsibility that extends even beyond its scope of operation and that is widely organised by the Kapsch Group. Only a selection of supported projects and initiatives are presented below.
Technical educational institutions are very important to Kapsch as a technology- and innovation-oriented group. The Company is therefore interested in establishing contact as early as possible with students as well as graduates of technical education programmes. Alongside the Vienna University of Technology and the University of Applied Sciences Technikum Wien, the Kapsch Group has also subsidised Universitäre Gründerservice Wien GmbH since 2005. This organisation aids young entrepreneurs in transforming ideas into convincing business concepts.
One example of the many social projects supported in Austria and abroad is the Institute for Cooperation in Development Projects (ICEP). The goal of this organisation is to fight poverty around the world through projects with dependable local partners in many countries. In addition, Kapsch TrafficCom AG provides funding to projects that promote the integration of marginalised groups through targeted measures, thereby contributing to social justice, positive social development and long-term safety and security.
The entire Kapsch Group - headed by Kapsch AG - supports many contemporary art and cultural institutions and projects and even initiates its own projects in this sector.
The Kapsch Group has participated in a general partnership with the Vienna Concert Hall (Wiener Konzerthaus) since 1992 under the motto of "It is an art to make money. It is an obligation to spend money on art." The Vienna Concert Hall is an expert in regularly attracting new segments of the public with is unusual programmes without alienating long-term friends of the Concert Hall. The festival "Wien modern" - one of the most famous contemporary music festivals in the world has been supported since 1989.
In the area of visual arts, Kapsch is particularly interested in supporting artists who are still in need of wider recognition. Consideration is therefore given to young artists from Austria and abroad with sponsorship campaigns. The showcase project in this area is the art calendar that the Kapsch Group has published since 1994 and presents annually in late autumn, creating a high-profile platform for the artists.
Risk management has been positioned as a separate function within the finance department of Kapsch TrafficCom AG, focusing on project risk management and enterprise risk management (ERM).
Project risk management covers both external customer projects as well as internal development projects, beginning in the bid or initiation phase. Using institutionalised processes allows for an analysis of all relevant opportunities and risks pertaining to the group's projects, thereby providing the basis for the timely planning and implementation of risk-mitigating activities.
The enterprise risk management (ERM) analyses not only Kapsch TrafficCom AG's significant project-related risks but also strategic, technological, organisational, financial, legal and IT risks. Reports are sent to the executive board, the audit committee of the supervisory board and the first reporting level on a quarterly basis. The goal of the ERM approach is early identification, analysis and control of those risks which may significantly affect meeting the Company's strategic and operational objectives. The primary objective in this context is not to avoid risks but to deal with risks in a controlled and deliberate manner and to recognise and realise opportunities as they arise over time in order to make a valuable contribution to the management of the Company.
The material risks faced by the Group and the respective risk management measures are briefly explained below.
A major portion of the net sales of Kapsch TrafficCom AG is generated in the Electronic Toll Collection (ETC) segment. This segment includes implementation projects of country-wide, regional or route-by-route toll systems as well as the technical and commercial operation of such systems. Awarding such projects, including the operation of the systems, is generally made based on tenders. The final placement of orders with Kapsch TrafficCom AG is thus subject to a series of uncertainties both within and outside the Company's sphere of influence. Tenders for such huge projects may, for example, be delayed or withdrawn based on political changes, as well as appeals or legal actions by unsuccessful bidders. There also is the risk that Kapsch TrafficCom AG is not successful in tenders for new projects due to technological, financial, formal or other reasons.
In the past, the net sales of Kapsch TrafficCom AG have been heavily influenced by the realisation of implementation projects in the ETC segment in the given fiscal year. In particular, significantly higher net sales were recorded in fiscal year 2010/11 (implementation of a electronic toll system in the South African province of Gauteng), and 2011/12 (implementation of a nationwide electronic truck toll collection system in Poland). In fiscal years 2012/13, 2013/14 as well as 2014/15, sizeable revenues were generated from the implementation of a nationwide electronic truck toll collection system in Belarus. This project also contributed significantly to the Company's net sales from implementation projects in fiscal year 2015/2016.
The ongoing development of new business areas compatible with the core business of Kapsch TrafficCom AG is aimed at increasing net sales as well as mitigating sales peaks and thus stabilising the sales development. Measures to achieve this target are an increasing geographic diversification, an increasing expansion of the customer and product portfolio as well as the sustained growth of the share of revenues generated by the operation, including the maintenance, of offered systems. In a first step, the technological and commercial operation of the systems is generally linked with the order to implement the system, after system has been implemented, revenues generated from this system may be planned in the longer-term and more efficiently. In the past fiscal years, revenue contribution from the implementation of projects with a smaller volume have also constantly increased. The Intelligent Mobility Solutions (IMS) segment made valuable contributions in this context.
In connection with the installation of systems, Kapsch TrafficCom AG is usually contractually obligated to provide performance and time-limit guarantees. Since electronic toll collection systems and other intelligent transportation systems are frequently sophisticated and technologically complex systems that must be implemented within a strict timeframe, system and product defects and/or missed deadlines may occur. Unexpected project modifications, temporary lack of qualified personnel, quality defects, technical problems as well as performance problems of suppliers or consortium members may also have a negative impact on project schedules. The failure to meet contractually guaranteed performance levels or deadlines usually results in penalties and compensation for damages, sometimes also compensation for lost toll revenues. Significant deadline overruns also frequently trigger contractual clauses that enable clients to terminate contracts prematurely. A significant delay in a project, failure to achieve contractually guaranteed performance levels or even failure to implement a project would also reduce the chances of success in future tenders for systems. There is also the risk that Kapsch TrafficCom AG cannot execute projects in line within the set cost budgets. Due to the strong social opposition to toll systems that is sometimes encountered, the risk of a late or limited rollout of the toll systems also exists in some projects, which can have further consequences on payment flows and net sales with regard to the operation project.
Kapsch TrafficCom AG employs project management methods and project risk management procedures based on IPMA (International Project Management Association) standards in order to minimise such risks associated with projects.
In many cases, public agencies commission projects. Framework agreements and service contracts in connection with toll collection or traffic management projects may include terms and conditions that are not negotiable in a tender process and that may be disadvantageous to Kapsch TrafficCom AG. Some multi-annual contracts include challenging requirements with regard to the desired performance of the implemented systems, components and processes. These requirements can, if they are not achieved, result in significant penalties, damages or even contract termination. On the other hand, some contracts include substantial bonus payments for over-fulfilment of performance requirements. In the case of long-term contracts, the margins earned can also differ from the original estimates due to changes in costs.
Liabilities arising from contracts may include liabilities regarding customers' loss of profit, product liabilities and other liabilities. While Kapsch TrafficCom AG aims to include appropriate limitations to its liability in contracts, it is still impossible to guarantee that all contracts contain sufficient limitations to the Company's liability or that these limitations can be enforced under applicable law.
The strong market position of Kapsch TrafficCom AG is, to a large extent, based on its ability to develop state-of-theart, efficient and reliable systems, components and products. Kapsch TrafficCom AG is committed to a permanent and integrated innovation process. In order to maintain its already strong position in technology, Kapsch TrafficCom AG invests a considerable portion of its net sales in research and development activities. However, if the Company does not succeed in developing new systems, components and products in line with market requirements, this can be detrimental to its competitive position.
Since its capacity for innovation is based largely on technology, internal know-how and intellectual property, the global increase in product piracy and reverse engineering may have negative effects on the market position of Kapsch TrafficCom AG. In addition, any failure in successfully protecting these technologies may have a negative impact on the competitive position. Kapsch TrafficCom AG thus places great importance on the protection of technologies and the Company's internal know-how, e.g. through patents and non-disclosure agreements with the relevant contracting parties. However, it is also possible that newly developed systems, components, products or services could infringe on the intellectual property rights of third parties.
One of the strategic objectives of Kapsch TrafficCom AG is to grow internationally both by organic means and through select acquisitions and joint ventures. In the implementation of this strategy, the Kapsch TrafficCom Group has acquired and integrated companies around the world. In the course of these acquisitions, a number of challenges remain in order to realise the desired synergies and objectives and to implement the expected opportunities arising from the acquisition of new technologies and market know-how.
The strong expansion of business activities in non-European countries has exposed Kapsch TrafficCom AG to heightened political risks in these countries. Significant and at present unforeseeable political changes can exert a major influence on the ability to implement or operate projects in these countries and can also affect the availability and accessibility of funds. There may also be interference with the property rights of Kapsch TrafficCom AG or complications regarding business practices and activities. Kapsch TrafficCom AG considers these risks in the assessment of such projects.
As a company operating around the globe, Kapsch TrafficCom AG maintains branches and subsidiaries in a number of countries outside the euro zone. Implementing projects outside the euro zone results in transaction risks due to potential exchange rate fluctuations that may be included in the consolidated financial statements as exchange rate gains or losses. Kapsch TrafficCom AG aims to hedge to the greatest possible extent or to avoid these transaction risks in the amount of the net currency positions of the individual projects. As the net currency position of the respective cash flows often cannot be estimated reliably, hedging the associated risks is only possible to a limited extent; the remaining currency rate risk is accepted and taken into account in the Company's planning. Kapsch TrafficCom AG is also subject to translation risk, as the financial statements of subsidiaries operating outside the euro zone are translated into euro, the Group's currency. Moreover, exchange rate changes that are detrimental in the long run may also result in a change in Kapsch TrafficCom AG's position vis-à-vis competitors if, for example, products and solutions the costs of which are based on the euro may no longer be offered at competitive prices outside the euro zone.
Within the framework of project financing, variable interest rates are agreed on a regular basis with these rates being tied to market interest rates (Euribor, etc.). This exposes Kapsch TrafficCom AG to interest rate risks. Kapsch TrafficCom AG utilises appropriate financial instruments to hedge against interest rate risks when these risks are significant.
Sufficient financial resources must be available to ensure that Kapsch TrafficCom AG can meet its payment liabilities at any time. Medium and long-term financing must be available in order to carry out large-scale projects, such as implementing a nationwide toll collection system, under agreed delayed payment terms from the client and for acquiring other companies. Additionally, implementing large-scale projects often requires the provision of significant bank guarantees to secure bid obligations (bid bonds) or to secure possible warranty claims (performance bonds).
In financing agreements, Kapsch TrafficCom AG is subject to the customary restrictions in terms of its business policy, e.g. when drawing additional loans, using assets as collateral or providing guarantees and/or warranties for third parties. The availability of financing and bank guarantees depends on market conditions as well as the financial position and results of operations of Kapsch TrafficCom AG. A lack of liquid assets (even if the Group is otherwise solvent), of financing or of bank guarantees can have an extremely adverse impact on the financial position and results
Liquidity risk is managed by ongoing, group-wide financial and cash planning. Potential liquidity shortages can thus be identified and appropriate countermeasures be taken in due time.
Kapsch TrafficCom AG is exposed to the risk of non-payment by customers. Many of the key customers of Kapsch TrafficCom AG are public authorities, especially in connection with implementing and/or operating nationwide or regional toll collection and traffic management systems. Kapsch TrafficCom AG also increasingly acts as a subcontractor to third parties (concessionaires, general contractors, etc.) in public sector projects. The potential default risk varies depending on the volume of the order and, with regard to defaulting counterparties in large-scale projects may have a significant impact on the results of operations. On principle, such large-scale projects are ordered by public authorities. The credit ratings of new and existing customers are checked as needed and secured in line with the assessment of the default risk. In addition, Kapsch TrafficCom AG uses services offered by public authorities, e.g. Oesterreichische Kontrollbank (OeKB, Austria's main provider of financial and information services) to hedge against the default risk by using guarantees.
There is also a risk that the counterparties (including financial institutions assumed to have good credit ratings) of both original and derivative financial instruments cannot meet their payment obligations when due. A payment default or the recognition of impairment charges to receivables can be extremely detrimental to the financial position and results of operations of Kapsch TrafficCom AG.
The success of Kapsch TrafficCom AG depends heavily on key personnel with many years of experience in the industry. Moreover, the Company's ability to recruit qualified staff, integrate them into the Company and retain them over the long-term is crucial. The loss of key personnel and difficulties in the recruitment of personnel may adversely affect the success of the Group.
Kapsch TrafficCom AG has implemented a number of attractive measures to counteract personnel risks, such as incentive schemes or employee development opportunities.
A variety of regulations and legal requirements must be observed in connection with participating in public tenders, implementing and operating toll collection and traffic management systems. Identifying and adhering to applicable legal regulations and requirements can result in considerable administrative and technical expense. The failure to meet regulations or official requirements can lead to severe penalties and can also reduce the possibility of (successfully) taking part in tenders or continuing with the given business activity.
With the expansion of the business activities into new regions and select new IMS business areas, the risk of patent infringement or the violation of intellectual property rights (IPR) tends to increase. Kapsch TrafficCom AG has implemented active intellectual property management as a separate function that may lead to financial damage due to law suits and court and/or settlement procedures. In order to avoid legal actions and court proceedings to the greatest possible extent, Kapsch TrafficCom AG for example monitors potential intellectual property rights infringements prior to entry into new markets or regions. However, it is not possible to fully prevent this risk.
As a technology group, Kapsch TrafficCom AG is exposed to typical IT risks relating to security, confidentiality and availability of data. For this reason, Kapsch TrafficCom AG has implemented an IT risk management system designed according to the corporate risk and IT security application method (CRISAM) and has been certified pursuant to ISO 27001 (information security management). Kapsch TrafficCom AG is also certified according to ISO 20000 "IT service management" (similar to ITIL) for the operation of toll collection systems. The Company promotes the rollout of CRISAM as an IT risk management tool within the Group.
The enterprise risk management approach of Kapsch TrafficCom AG not only addresses risks but also encompasses the regular identification, evaluation and management of opportunities. The goal of these efforts is to manage the strategic orientation of the product portfolio and market activities through the early identification of opportunities and to develop corresponding potential.
Market opportunities exist in geographic diversification as well as increasing expansion of the customer and product portfolio, driven in part by the following factors:
Due to the increasing financing requirements of infrastructure projects and the growing need to relieve state budgets, there exists an opportunity to develop new markets, especially in emerging and developing countries, as well as an opportunity to expand our activities into already tapped markets.
The global rise in traffic volumes and the associated impact on the environment and society open up opportunities in the area of traffic management because measures such as toll collection, road pricing and the establishment of environmental zones or access restrictions are increasingly being employed as controlling instruments of environmental and traffic policy. In both the ETC and ITS segments, this is creating opportunities to further develop and market the portfolio according to the new requirements.
The drive to increase the productivity of vehicles and vehicle operations as well as the rising comfort expectations of travelers also open up new opportunities for expanding the functionality of existing systems. In this context, opportunities exist to attract new customers outside of the public sector, such as in the area of fleet management or to offer new parking management concepts to public authorities as well as end customers.
Constant innovation, technical advancements and the acquisition of new technologies in the course of company acquisitions offer opportunities for Kapsch TrafficCom AG to improve the efficiency and performance of customer systems as well as to gain a technological edge over competitors with regard to the performance and functionality of the offered systems.
From the current perspective, no risks have been identified that might endanger Kapsch TrafficCom AG's position to continue as a going concern. Increasing geographic diversification and the continuous expansion of the product and solution portfolio with select new ITS solutions helped to broaden the business model of Kapsch TrafficCom AG without influencing the core business. This constantly reduces the risk concentration in some regions and individual large-scale projects.
Kapsch TrafficCom AG began analysing and documenting its existing internal control processes for financial reporting on an ongoing basis many years ago. The results obtained so far have been presented at the quarterly audit committee meetings to the supervisory board for assessment and discussion. The internal audit department ensures by audits particularly of the subsidiaries of Kapsch TrafficCom AG that a reliable and functioning control system is implemented.
In fiscal year 2015/16, as in the previous year, the group-wide uniform documentation of all controls was improved with a view to achieve the significant control objectives, and their compliance and efficiency was assessed by the internal audit department in the course of local on-the-spot audits. A standardised collection of information allows for an improved control of measures and serves as a basis for evaluating the efficiency of local ICS.
The Group IFRS Accounting Manual represents the cornerstone for financial accounting and reporting throughout the whole Kapsch Group. The manual is published and regularly updated by the Kapsch Group and contains the essential financial and reporting procedures based on the International Financial Reporting Standards (IFRS). Groupwide guidelines, work instructions and process descriptions represent another important pillar of the internal control system.
The central elements of the ICS process include regular verification of compliance with the institutionalised principle of
dual control and the segregation of duties as well as defined actions for monitoring the effectiveness and efficiency of operating activities, the reliability of financial reporting and the compliance with relevant legal regulations. The ICS guidelines of Kapsch TrafficCom AG follow the basic structure of the internationally recognised standards for internal control systems (COSO - Internal Control Framework of the Committee of Sponsoring Organizations of the Treadway Commission).
The supervisory board is kept informed of business developments by the executive board during regular meetings by way of consolidated presentations consisting of segment reporting, earnings development analyses with comparisons of current figures to figures from the budget and the previous period, forecasts, consolidated financial statements and developments in the number of employees and order inflow as well as select financial key performance figures.
In line with local requirements, the respective local management is responsible for the implementation and monitoring of the Internal Control System. The management of the individual subsidiaries is responsible to implement and design an appropriate internal control and risk management for the accounting process in line with the requirements of the respective company, and is also responsible for compliance with group-wide guidelines and provisions. In order to better support the management of the subsidiaries, the function of an ICS manager was established within the finance department of Kapsch TrafficCom AG. The duty of this function is to standardise and continously improve the ICS for the entire Kapsch TafficCom Group, to initiate improvement processes with regard to found weaknesses and to report periodically to the audit committee of the supervisory board.
Disclosures pursuant to Section 267 UGB in conjunction with Section 243a (1) UGB
The registered share capital of Kapsch TrafficCom AG amounts to EUR 13.0 million and is fully paid in. It is divided into 13.0 million no-par value ordinary bearer shares.
There are no restrictions relating to the exercise of voting rights or the transfer of shares.
As of 31 March 2016, approximately 36.7% of the shares of Kapsch TrafficCom AG were in free float. As of 31 March 2016, KAPSCH-Group Beteiligungs GmbH held approximately 63.3% of the shares. KAPSCH-Group Beteiligungs GmbH is a wholly-owned subsidiary of DATAX HandelsgmbH, whose shares are equally held by Traditio-Privatstiftung, ALUK-Privatstiftung and Children of Elisabeth-Privatstiftung, each a private foundation under the Austrian Private Foundation Act (Privatstiftungsgesetz). These are each attributable to members of the Kapsch family. As of 31 March 2016, no other shareholder held more than 10% of the voting rights in Kapsch TrafficCom AG. None of the shares convey special control rights.
There are no restrictions regarding the execution of voting rights by employees with a share in the Company.
There are no special provisions on the appointment and removal of members of the executive board and the supervisory board and no special provisions regarding the amendment of the articles of association of the Company.
Neither authorised capital nor conditional capital currently exists at the Company, which empowers the executive board to issue shares with the approval of the supervisory board and without (renewed) consideration by the annual general meeting.
There are no agreements that become effective when a public takeover offer for shares is launched.
There are no agreements between Kapsch TrafficCom AG and members of the executive board or the supervisory board or employees which become effective when a public takeover offer for shares in the Company is launched.
On 1 April 2016, Kapsch TrafficCom AG acquired the Spanish part of the global transportation division of Schneider Electric, with this part having previously been operating under the Telvent Tráfico y Transporte brand. The acquisition of the leading supplier of real-time IT solutions and intelligent traffic systems for about EUR 27 million expands the Kapsch portfolio and strengthens the market position with regard to intelligent mobility systems.
With a view to refinance the corporate bond and to finance future growth, Kapsch TrafficCom AG prepares a promissory note bond addressing institutional investors in the public market. It was distributed on 1 June 2016. This transaction is planned to be completed in the course of the first quarter of the fiscal year 17.
In fiscal year 2016/17, the share of Kapsch TrafficCom Transportation's contribution in the net sales and results of Kapsch TrafficCom AG will on the one hand be evident - including the integration costs - and on the other hand, the implementation of the newly awarded projects will also make an increasing contribution. This particularly pertains, amongst others, to the cross-border programme "CHARM".
Kapsch TrafficCom AG also expects decisions concerning further projects: A nationwide toll system is currently being re-tendered in Austria, the tender for a new toll system was launched in Bulgaria. The Czech contract will expire at the end of 2016, meaning that the further course of action of the Prague government is expected to be determined in the near future.
In the next years, the main focus will be on further developing the strategy. Kapsch TrafficCom AG plans to expand the portfolio to include intelligent mobility solutions in order to offer customers an extraordinary experience when using these solutions. Systems and data will increasingly be interconnected and vehicles will be connected with the environment. The acquisition of the transportation division of Schneider Electric represents a major step towards the city, as Kapsch TrafficCom AG wants to carefully integrate this division and thus contribute to the design of future smart cities.
Vienna, 8 June 2016
signed Georg Kapsch Chairman of the executive board
andré Sanx Alexandr Lonsdel
signed: André Laux
signed: Alexander Lewald Member of the executive board Member of the executive board
We declare to the best of our knowledge that the financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the parent company as required by the applicable accounting standards and that the management report gives a true and fair view of the development and performance of the business and the position of the company, together with a description of the principal risks and uncertainties the company faces.
Vienna, 8 June 2016
-
-
Chief Operating Officer Chief Technology Officer
Georg Kapsch Chairman/ Chief Executive Officer
Member/ Chief Operating Officer
Alexander Lewald Member/ Chief Technology Officer
Finance, mergers & acquisitions, investor relations, compliance, strategy, legal, international subsidiaries & management systems, IT, human resources, marketing & public relations, baseline solution management, new ventures and sales region North America
All sales regions except for North America, production & logistics, supply chain management and delivery & operations
Engineering
Assets
Shareholder's Equity and Liabilities
| 31/3/2016 | 31/3/2015 | 31/3/2016 | 31/3/2015 | ||
|---|---|---|---|---|---|
| EUR | BUR '000 | EUR | EUR '000 | ||
| Fixed assets | Shareholder's equity d |
||||
| Intangible assets | Share capital | 13,000,000.00 | 13,000 | ||
| 1. Industrial property and similar rights and assets, and | Capital reserves | ||||
| icenses in such rights and assets | 9,366,598.35 | 2,371 | Appropriated | 117,400,000.00 | 117,400 |
| Prepayments and construction in process 2. |
0.001 | 6,885 | Unappropriated retained earnings, thereof prior period $\equiv$ |
112,465,414.32 | 90,713 |
| 9,366,598.35 | 9,256 | unappropriated retained earnings brought forward | |||
| Tangible assets Ë |
EUR 84.212.695.41 (prior year: EUR 69.878k) | ||||
| 1. Investments in leasehold buildings | 1,780,732.74 | 2,218 | 242,865,414.32 | 221,113 | |
| Technical equipment and machinery | 289,714.18 | 403 | |||
| Other equipment, factory and office equipment က် |
1,571,638.80 | 1,919 | |||
| Prepayments and construction in process $\overrightarrow{q}$ |
$\overline{a}$ | Investment grants ø |
543,533.48 | 288 | |
| 3,642,085.72 | 4,540 | ||||
| Financial assets $\equiv$ |
|||||
| 1. Shares in affiliated companies | 84,128,741.85 | 62,852 | Accruals ن |
||
| 2. Loans to affiliated companies | 45,436,149.07 | 44,192 | Accruals for severance payments $\div$ |
4,659,806.00 | 4,768 |
| Participating interests က် |
17,649,952.78 | 17,550 | Other accruals $\mathbf{a}$ |
17,959,642.53 | 15,776 |
| Securities $\vec{r}$ |
4,375.00 | 5,004 | 22,619,448.53 | 20,544 | |
| 147,219,218.70 | 129,598 | ||||
| 160,227,902.77 | 143,394 | Accounts payable d |
|||
| Current asets | Bonds | 70,818,000.00 | 75,000 | ||
| Inventories | Bank loans and overdrafts | 15,925,462.68 | 36,259 | ||
| 1. Merchandise | 4,978,032.44 | 6,323 | Customer advances | 154,798.00 | |
| Services not yet invoiced | 3,037,142.42 | 842 | Trade payables ₹ |
2,015,759.91 | 2,116 |
| Prepayments က် |
68,047.27 | 315 | Payables to affiliated companies ທ່ |
19,005,645.32 | 18,488 |
| 8,083,222.13 | ,480 | Other liabilities, ဖ |
3,610,097.66 | 4,465 | |
| Receivables and other assets $\equiv$ |
of which taxes EUR 382,954.12 (prior year: EUR 900k), | ||||
| 1. Trade receivables | 7,843,395.09 | 7,373 | of which social security payables EUR 664,934.10 | ||
| Receivables from affiliated companies $\overline{\mathbf{v}}$ |
135,234,177.29 | 180,314 | (prior year: EUR 775k) | ||
| 3. Other assets | 6,042,111.36 | 7,294 | 111,529,763.57 | 136,405 | |
| 149,119,683.74 | 194,981 | ||||
| III. Cash, bank balances | 58,368,048.46 | 30,047 | |||
| 215,570,954.33 | 232,508 | ||||
| C. Prepaid expenses and deferred charges | 1.759.302.80 | 2,448 | |||
| 377,558,159.90 | 378,350 | ||||
| 377,558,159.90 | 378,350 |
$\leftarrow$
216,405,748.39 198,134
Contingent liabilities
| 2015/16 | 2014/15 | |
|---|---|---|
| EUR | EUR '000 | |
| 1. Net sales | 140,014,602.31 | 144,671 |
| 2. Change in services not yet invoiced | 2,195,223.22 | $-14,592$ |
| 3. Other operating income | ||
| a) Income from the retirement of fixed assets excluding financial | ||
| assets | 4,119.41 | |
| b) Income from the reversal of accruals | 579,591.73 | 815 |
| c) Other | 10,276,840.98 | 21,118 |
| 10,860,552.12 | 21,934 | |
| 4. Cost of materials and purchased services | ||
| a) Cost of materials | $-12,501,064.67$ | $-14,098$ |
| b) Cost of purchased services | -41,947,764.17 | $-34,103$ |
| -54,448,828.84 | $-48,201$ | |
| 5. Personnel expenses | ||
| a) Wages | $-256,765.72$ | $-205$ |
| b) Salaries | -28,633,077.38 | $-32,554$ |
| c) Expenses for severance payments and contributions to staff | ||
| provision funds | $-1,291,734.55$ | $-1,588$ |
| d) Expenses for pensions | $-73,750.00$ | $-66$ |
| e) Expenses for statutory social security, payroll-relates taxes and | ||
| mandatory contributions | $-7,398,835.78$ | $-8,679$ |
| f) Other social benefits | $-262,666.71$ | $-285$ |
| $-37,916,830.14$ | $-43,377$ | |
| 6. Depreciation and amortization of fixed intangible and tangible assets | $-2,258,436.38$ | $-1,803$ |
| 7. Other operating expenses | ||
| a) Taxes not included in line 16 | -474,681.65 | $-918$ |
| b) Other | $-36,666,726.00$ | $-39,950$ |
| $-37, 141, 407.65$ | $-40,868$ | |
| 8. Subtotal of lines 1 to 7 (Operating result) | 21,304,874.64 | 17,764 |
| 9. Income from participating interests, of which from affiliated | ||
| companies EUR 11,045,972.57 (prior year: EUR 7,308k) | 11,045,972.57 | 7,308 |
| 10. Other interest and similar income, of which from affiliated | ||
| companies EUR 4,803,776.21 (prior yerar: EUR 5,627k) | 4,945,995.31 | 5,643 |
| 11. Income from the retirement and write-up of fixed financial assets | 334,756.23 | 76 |
| 12. Expenses on fixed financial assets, of which | $-247,186.94$ | $-893$ |
| a) Amounts written off EUR 0.00 (prior year: EUR 893k) | ||
| b) Relating to affiliated companies EUR 0.00 (prior year: EUR 893k) |
||
| 13. Interest and similar expenses, of which relating to affiliated | ||
| companies EUR 35,446.61 (prior year: EUR 73k) | $-3,520,096.65$ | $-4,093$ |
| 14. Subtotal of lines 9 to 13 (Financial result) | 12,559,440.52 | 8,041 |
| 15. Net operating income | 33,864,315.16 | 25,805 |
| 16. Taxes on income, thereof recharged to group parent | ||
| EUR 5,339,393.55 (prior year: EUR 4,689k) | $-5,611,596.25$ | $-4,970$ |
| 17. Net income for the year | 28,252,718.91 | 20,835 |
| 18. Prior period unappropriated retained earnings brought forward | 84,212,695.41 | 69,878 |
| 19. Unappropriated retained earnings | 112,465,414.32 | 90,713 |
The financial statements as of 31 March 2016 have been prepared in accordance with the financial reporting requirements of the Austrian Commercial Code (UGB) as amended.
The financial statements, prepared under Austrian generally accepted accounting principles, present a true and fair view of the assets and liabilities, the financial situation of the Company, as well as its results of operations.
Accounting and valuation methods are based on generally accepted accounting principles. Section 201 (2) UGB was adhered to, as were the provisions on classification and valuation of balance sheet and income statement items under Sections 195 to 211 and 222 to 235 UGB. The income statement was prepared in accordance with the total expenditure format.
Purchased intangible assets and tangible assets are valued at acquisition or production cost less scheduled straight-line amortization/depreciation charged according to the estimated useful life of the assets.
Low-value fixed assets with individual acquisition costs of less than EUR 400 were fully written off in the year of acquisition or production.
Acquired IT software is amortized based on a useful life of between four to eight years.
Tangible assets were depreciated on a straight-line basis over the following useful lives:
| Years | |
|---|---|
| Investments in leasehold buildings | $2 - 12$ |
| Technical equipment and machinery | $2 - 5$ |
| Other equipment, factory and office equipment | $2 - 15$ |
No unscheduled depreciation was charged in the fiscal year.
Additions to fixed assets are depreciated according to the date of their initial use.
Financial assets are stated at acquisition costs or the lower market values at the balance sheet date. Write-downs / write-ups are made only in case a diminution / increase in value is expected to be permanent.
Foreign currency receivables are stated using the exchange rate at the date of the transaction or the lower bank buying rate at the balance sheet date.
Foreign currency payables are stated using the exchange rate at the date of the transaction or the higher bank selling rate at the balance sheet date.
Inventories and receivables were stated in accordance with the strict lower of cost or market principle.
The stocks of purchased goods, recorded by means of electronic data processing, were stated using the moving average price method. Inventories denominated in foreign currencies were stated using the exchange rate at the date of acquisition. Where required, write-downs were made to the lower replacement costs.
A proportional deduction from acquisition or production cost was made for goods with diminished usability or marketability, which was derived from the respective inventory turnover ratio. In case of long-term contracts, no administrative and selling overheads were capitalized (option provided by Section 206 (3) UGB), directly attributable finance cost was capitalized depending on the project. At the balance sheet date, there are no services not yet invoiced for which finance cost was capitalized.
Receivables were stated at nominal values. Identifiable risks were considered in the valuation of the individual receivables by write-offs. No-interest or low-interest receivables were discounted.
The accruals were set up in accordance with the principle of prudence at the estimated amounts.
The accruals for severance payments and anniversary bonuses were calculated in accordance with IAS 19 using the projected unit credit method.
A discount rate of 1.75% (prior year: 2.1%) was used for the calculation of entitlements, and a percentage of 2.5% (prior year: 2.0%) was assumed for salary increases. Furthermore, the calculation was based on the earliest possible retirement age in accordance with the transitional statutory provisions and the mortality tables Pagler & Pagler AVÖ 2008-P (prior year: AVÖ 2008-P). Staff turnover rates were determined based on the period of service.
In accordance with the principle of prudence, accounts payable were valued at the amount repayable.
B. Comments on balance sheet items
Assets
Fixed assets
Movements in fixed assets:
| Acquisition/Production cost | Accumulated | Net book value | Amortization/ | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Balance | Additions | Disposals | Transfers | Balance | amortization/ | Batance | Balance | depreciation | |
| 1/4/2015 | 31/3/2016 | depreciation | 31/3/2016 | 31/3/2015 | current year | ||||
| EUR | EUR | EUR | EUR | EUR | EUR | EUR | EUR | EUR | |
| 1. Industrial property and similar rights and assets, Intangible assets |
|||||||||
| and licenses in such rights and assets | 10.910.762.56 | 1,231,767.38 | 107,547.48 | 6,885,442.94 | 18,920,425.40 | 9,553,827.05 | 9,366,598.35 | 2,370,667.96 | 1,121,279.93 |
| 2. Prepayments and construction in process | 6,885,442.94 | 0.00 | 0.00 | -6,885,442.94 | 0.00 | 0.00 | $\overline{8}$ | 6,885,442.94 | 0.00 |
| 17,796,205.50 | 1,231,767.38 | 107,547.48 | $\overline{\mathsf{so}}$ | 18,920,425.40 | 9,553,827.05 | 9,366,598.35 | 9,256,110.90 | 1,121,279,93 | |
| II. Tangible assets | |||||||||
| Investments in leasehold buildings | 5,022,139.02 | 36,699.54 | $\overline{50}$ | $\overline{0.00}$ | 5,058,838.56 | 3,278,105.82 | 1.780.732.74 | 2.217,659.91 | 473,626.71 |
| 2. Technical equipment and machinery | 2,234,721.71 | 72,288.97 | 1,745.38 | $\overline{5}$ | 2,305,265,30 | 2,015,551.12 | 289,714.18 | 402,587.52 | 185,162.31 |
| 3. Other equipment, factory and office | |||||||||
| equipment | 6,346,302.13 | 235,722.09 | 487,252.52 | $\overline{0.00}$ | 6,094,771.70 | 4,523,132.90 | 1,571,638.80 | 1,919,496.42 | 478,367,43 |
| 4. Prepayments and construction in process | $\frac{1}{2}$ | 57,506.77 | 57,506.77 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | $\frac{8}{10}$ |
| 13,603,162.86 | 402.217.37 | 546,504.67 | 0.00 | 13,458,875.56 | 9,816,789.84 | 3,642,085.72 | 4,539,743.85 | 1,137,156.45 | |
| III. Financial assets | |||||||||
| 1. Shares in affiliated companies | 70,760,660.73 | 21,276,833,40 | $\overline{00}$ | 0.00 | 92,037,494.13 | 7,908,752.28 | 84,128,741.85 | 62, 851, 908, 45 | 0.00 |
| 2. Loans to affiliated companies | 44, 191, 722. 17 | 299, 182.66 | 54,755.76 | $\overline{50}$ | 45,436,149.07 | 8.00 | 45,436,149.07 | 44, 191, 722, 17 | 8 |
| 3. Participating interests | 17,549,659.73 | 100.784.99 | 491.94 | 0.00 | 17,649,952.78 | 8 | 17,649,952.78 | 17,549,659.73 | $\overline{0.00}$ |
| 4. Securities | 5,004,419.99 | 0.00 | 5.000.044.99 | 0.00 | 4,375.00 | 0.00 | 4,375.00 | 5,004,419.99 | 0.00 |
| 137,506,462.62 | 22.676.801.05 | 5.055.292.69 | $\overline{8}$ | 155.127.970.98 | 7,908,752.28 | 147.219.218.70 | 129,597,710.34 | 0.00 | |
| 168,905,830,98 | 24,310,785.80 | 5,709,344.84 | 0.00 187,507,271.94 | 27,279,369.17 | 160,227,902.77 143,393,565.09 | 2,258,436.38 |
3/4
| In the following fiscal year |
In the next 5 fiscal years |
|||
|---|---|---|---|---|
| EUR | Prior year EUR '000 |
EUR | Prior year EUR '000 |
|
| Obligations from rental and leasing agreements |
6,394,795.78 | 6,024 19,452,033.74 | 19,219 |
Financial obligations of the Company from the use of tangible assets not recognized in the balance sheet amount to:
| Share | Sharehold- | Result of | FN | |
|---|---|---|---|---|
| Figures as of 31 March 2016 | ers' equity | fiscal year | ||
| $\frac{9}{2}$ | EUR '000 | EUR '000 | ||
| a) Shares in affiliated companies | ||||
| Kapsch TrafficCom AB, Jönköping, Sweden | 100.00 | 20,011 | 4,285 | 1) |
| Kapsch TrafficCom Argentina S.A., Buenos Aires, Argentina | ||||
| 95.00 | 3,250 | 1.524 | 1) | |
| Kapsch Components GmbH & Co KG, Vienna | 100.00 | 8,277 | 2,083 | 1) |
| Kapsch Components GmbH, Vienna | 100.00 | 108 | 5 | 1) |
| Kapsch TrafficCom B.V., Amsterdam, Netherlands | 100.00 | 67,893 | $-42$ | 1) |
| Kapsch Telematic Services GmbH, Vienna | 93.00 | 17,929 | 17,855 | 1) |
| Kapsch TrafficCom Construction & Realization spol. s r.o., | ||||
| Prague, Czechia | 99.00 | 1,350 | 832 | 1) |
| Kapsch TrafficCom S.r.l. a socio unico, Milan, Italy | 100.00 | 305 | $-228$ | 1) |
| Kapsch Telematic Technologies Bulgaria EAD, Sofia, | ||||
| Bulgaria | 100.00 | 117 | 11 | 1) |
| Kapsch TrafficCom Ltd., Manchester, Great Britain | 100.00 | 698 | $-102$ | 1) |
| ArtiBrain Software Entwicklungsgesellschaft mbH, Vienna | 100.00 | 43 | $-3$ | 1) |
| Kapsch TrafficCom Russia OOO, Moscow, Russia | 100.00 | 564 | $-423$ | 1) |
| Kapsch TrafficCom d.o.o., Ljubljana, Slovenia | 100.00 | 51 | 6 | 1) |
| Kapsch TrafficCom France SAS, Paris, France | 30.19 | 177 | 48 | 1) |
| Electronic Toll Collection (PTY) Ltd., Centurion, South Africa | 25.00 | $-20,791$ | $-10,830$ | $\overline{1}$ |
| Kapsch TrafficCom South Africa Holding (Pty) Ltd., Cape | ||||
| Town, South Africa | 100.00 | 10,089 | 155 | 1) |
| Kapsch TrafficCom Kazakhstan LLC, Astana, Kazakhstan | 100.00 | 54 | 10 | 1) |
| KTS Beteiligungs GmbH (formerly Jibesoev GmbH), Vienna | 100.00 | 867 | 745 | 2) |
| Transport Telematic Systems LLC, Abu Dhabi, United Arab | ||||
| Emirates | 49.00 | 67 | 4 | 1) |
| Kapsch Telematic Services IOOO, Minsk, Belarus | 99.00 | 2,912 | 6,974 | 1) |
| Kapsch TrafficCom Lietuva, Vilnius, Lithuania | 51.00 | 25 | 8 | 1) |
| Kapsch TrafficCom KGZ, Bischkek, Kyrgyzstan | 100.00 | 10 | 4 | 1) |
| b) Shares in associates | ||||
| Q-Free ASA, Trondheim, Norway | 19.26 | 44,240 | $-20,681$ | 2) |
1) Figures as of 31 March 2016
2) Figures as of 31 December 2015
In connection with the acquisition of 3% of the shares in Kapsch Telematic Services GmbH, Vienna, an outstanding variable purchase price component exists that depends on the earnings before interest and taxes (EBIT) of the KTS Group, net of non-controlling interests, of the fiscal years 2015-2018. This outstanding component amounts to a maximum of EUR 3.5 million (due for payment in July 2018 at the latest).
Loans amounting to EUR 7,178,981.82 granted to affiliated companies have a residual term of less than one year.
Prepayments in the amount of EUR 0.00 (prior year: EUR 286k) relate to prepayments made to affiliated companies.
| 31/3/2016 | 31/3/2015 | |||
|---|---|---|---|---|
| Total | of which with a remaining maturity > 1 year |
Total | of which with a remaining maturity > 1 year |
|
| EUR | EUR | EUR | EUR | |
| 1. Trade receivables 2. Receivables from affiliated |
7,843,395.09 | 0.00 | 7,373,314.82 | 0.00 |
| companies | 135,234,177.29 | 24,340,225.40 | 180,313,783.97 | 81,276,047.71 |
| 3. Other assets | 6,042,111.36 | 0.00 1 | 7,293,882.00 | 0.00 |
| 149,119,683.74 | 24.340,225.40 | 194,980,980.79 | 81,276,047.71 |
Receivables from affiliated companies pertain to trade receivables in the amount of EUR 92,357,840.73 (prior year: EUR 103,944k), loan receivables in the amount of EUR 36,848,288.23 (prior year: EUR 70,041k) and dividend receivables in the amount of EUR 6,028,048.33 (prior year: EUR 6,329k).
Other assets mainly include research bonuses, receivables from fiscal authorities, accrued receivables and other assets.
Other assets include income in the amount of EUR 5,911,238.44 (prior year: EUR 7,125k) that will affect cash flow only after the balance sheet date.
Kapsch TrafficCom AG, Vienna, received an investment grant from the lessor for the adaptation of the new location at Euro Plaza. The grant is related to the following items of fixed assets:
| Balance 1/4/2015 |
Utilization | Balance 31/3/2016 |
|
|---|---|---|---|
| EUR | EUR | EUR | |
| Leasehold improvements | 288,025.22 | 76,890.76 | 211,134.46 |
| Other accruals include the following items: | 31/3/2016 EUR |
31/3/2015 EUR '000 |
|---|---|---|
| Invoices not yet received as well as outstanding project | ||
| costs and risks | 12,488,755.66 | 9,371 |
| Personnel accruals (including vacation accruals of | ||
| EUR 1,794,691.96; prior year: EUR 2,328k) | 4,772,638.82 | 4,308 |
| Warranties and liabilities for construction flaws, | ||
| as well as production and system defects | 328,753.05 | 367 |
| Sundry accruals | 369,495.00 | 1,730 |
| 17,959,642.53 | 15,776 |
| 31/3/2016 | 31/3/2015 | |||||
|---|---|---|---|---|---|---|
| remaining | remaining | remaining | remaining | |||
| Total | maturity | maturity | Total | maturity | maturity | |
| $<$ 1 year | > 1 year | < 1 year | > 1 year | |||
| EUR | EUR | EUR | EUR | EUR | EUR | |
| 1. Bonds | 70,818,000.00 | 0.00 | 70,818,000.00 | 75,000,000.00 | 0.00 | 75,000,000.00 |
| 12. Bank loans and | ||||||
| overdrafts | 15,925,462.68 | 15,925,462.68 | 0.00 | 36,258,795.96 | 21.758.795.98 | 14,499,999.98 |
| 13. Customer advances | 154.798.00 | 154,798.00 | 0.00 | 76,573.00 | 76,573.00 | 0.00 |
| 4. Trade payables | 2.015.759.91 | 2,015,759.91 | 0.00 | 2.115,985.13 | 2.115,985.13 | 0.00 |
| 5. Payables to affiliated | ||||||
| companies | 19,005,645.32 | 19,005,645.32 | 0.00 | 18,488,046.95 | 18,488,046.95 | 0.001 |
| 6. Other liabilities | 3.610.097.66 | 3,610,097.66 | 0.00 | 4,465,258.64 | 4,465,258.64 | 0.00 |
| 111,529,763.57 | 40,711,763.57 | 70,818,000.00 | 136,404,659.68 | 46,904,659.70 | 89,499,999.98 |
There are no accounts payable with a remaining maturity of more than 5 years.
In November 2010, Kapsch TrafficCom AG issued a corporate bond with a volume of EUR 75,000,000.00, a maturity of 7 years and a fixed coupon of 4.25% per annum. In May 2015, the bond was repaid early in a nominal value of EUR 4, 182, 000.00.
Payables to affiliated companies pertain to trade payables with the exception of tax compensation in the amount of EUR 5,339,393.55 (prior year: EUR 5,214k) and a loan in the amount of EUR 0.00 (prior year: EUR 3,132k).
Other liabilities include expenses in the amount of EUR 3,200,806.75 (prior year: EUR 3,551k) that will affect cash flow only after the balance sheet date.
The export promotion loan recognized in the amount of EUR 1,425,462.56 is secured by bill of exchange.
In connection with the project financing for Belarus with an outstanding loan in the amount of EUR 14.5 million as of 31 March 2016, the Company received a guarantee by aval from Oesterreichische Kontrollbank Aktiengesellschaft (OeKB) as well as a participation guarantee G4 from OeKB. Claims arising from the participation guarantee G4 were assigned as security to the lending banks.
| 31/3/2016 EUR |
31/3/2015 EUR |
|
|---|---|---|
| Assumption of liabilities on behalf of subsidiaries | 65,149,671.49 | 51,988,284.43 |
| Bank guarantees for the performance of contracts | ||
| relating to major projects | 41,221,782.53 | 38,747,373.41 |
| Payment guarantees | 449,011.00 | 548,342.81 |
| Project performance guarantees for subsidiaries Other guarantees (security deposits, bid bonds |
109,056,040.73 | 106,243,413.76 |
| and sureties) | 529,242.64 | 606,591.70 |
| 216,405,748.39 | 198, 134, 006. 11 |
In addition, Kapsch TrafficCom AG, Vienna, provided performance bonds for export transactions and projects of Kapsch TrafficCom AB, Jönköping, Sweden, in a contract value of EUR 43.5 million (prior year: EUR 43.2 million).
A letter of subordination exists vis-à-vis Electronic Toll Collection (PTY) Ltd., Centurion, South Africa, relating to loan and trade receivables in the amount of EUR 22,983,392.08. In addition, a letter of comfort was issued for Electronic Toll Collection (PTY) Ltd., Centurion, South Africa, providing for additional financial support.
At the balance sheet date, the Company has no derivative financial instruments that would result in any obligation.
In the course of a strategy project, the Kapsch TrafficCom Group decided to change the structure and the related corporate control in the fiscal year 2015/16. As a result of this project, the Company created two divisions, Electronic Toll Collection (ETC) and Intelligent Mobility Solutions (IMS).
| By field of activity: | 2015/16 EUR |
2014/15 EUR '000 |
|---|---|---|
| Electronic Toll Collection (ETC) | 128,441,166.96 | 140,657 |
| Intelligent Mobility Solutions (IMS) | 11,573,435.35 | 4,014 |
| 140,014,602.31 | 144,671 | |
| By region: | 2015/16 EUR |
2014/15 EUR '000 |
|---|---|---|
| Domestic | 25,727,554.90 | 26,940 |
| European Union | 64,219,268.81 | 61,258 |
| Foreign | 50,067,778.60 | 56,473 |
| 140,014,602.31 | 144,671 |
Expenses for severance payments and contributions to staff provision funds include the following:
| 2015/16 EUR |
2014/15 EUR '000 |
|
|---|---|---|
| Expenses for severance payments | 953,425.19 | 1,189 |
| Contributions to staff provision funds | 338,309.36 | 399 |
| 1,291,734.55 | 1,588 |
Expenses for the auditor amount to EUR 192,957.00 (prior year: EUR 199k) and are broken down as follows:
| 2015/16 EUR |
2014/15 EUR '000 |
|
|---|---|---|
| Audit of the financial statements | 52,740.00 | 52 |
| Other assurance services | 83,010.00 | 68 |
| Other services | 57,207.00 | 79 |
| 192,957.00 | 199 | |
The registered share capital of the Company amounts to EUR 13,000,000.00. The share capital is fully paid in. The total number of shares issued is 13,000,000. The shares are nopar value bearer shares.
The authorized capital amounts to EUR 0 as of 31 March 2016 (prior year: EUR 0k).
The Company is a 63.279% subsidiary of KAPSCH-Group Beteiligungs GmbH, Vienna, and thus is related to its shareholder and its affiliated companies as a group company.
DATAX HandelsgmbH, Vienna, prepares the consolidated financial statements for the largest group of companies. These consolidated financial statements are deposited at the Commercial Court Vienna.
The Company prepares the consolidated financial statements for the smallest group of companies.
With regard to the disclosure on the legal and economic relations with affiliated companies, the protection-of-interest clause pursuant to Section 241 (3) UGB was used.
The average number of staff during fiscal year 2015/16 was 455, including 429 salaried employees and 26 waged workers (prior year: 525 salaried employees, 27 waged workers).
In fiscal year 2015/16, total remuneration of the management board amounted to EUR 1,276,074.13 (prior year: EUR 1,114k), expenses for severance payments and pensions for managing directors amounted to EUR 31,534.13 (prior year: EUR 24k).
With regard to supervisory board members, remuneration (including travel expenses) in the amount of EUR 122,080.37 (prior year: EUR 46k) was recognized as expenses.
The following persons served on the management and supervisory board:
Georg Kapsch (Chairman) André Laux Alexander Lewald (since 1 November 2015)
Franz Semmernegg (Chairman) Kari Kapsch (Deputy Chairman) Sabine Kauper Harald Sommerer
delegated by the Works Council:
Christian Windisch Martin Gartler
Vienna, 8 June 2016
The Management Board:
$\frac{1}{1+\frac{1}{2}}$
signed:
signed:
signed:
Audré Sand Abrandt Lowald
Georg Kapsch
André Laux
Alexander Lewald
PwC
$\mathbf{1}$
We draw attention to the fact that the English translation of this auditor's report according to Section 274 of the Austrian Commercial Code (UGB) is presented for the convenience of the reader only and that the German wording is the only legally binding version.
We have audited the accompanying financial statements of Kapsch TrafficCom AG, Vienna, which comprise the balance sheet as of 31 March 2016, the income statement and the notes for the fiscal year then ended.
Management is responsible for the preparation and fair presentation of these financial statements in accordance with the Austrian Commercial Code, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Austrian generally accepted auditing standards. Those standards require the application of the International Standards on Auditing according to which we are to comply with ethical requirements and to plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Our audit did not give rise to any objections. In our opinion, the financial statements comply with legal requirements and give a true and fair view of the financial position of the Company as of 31 March 2016 and of its financial performance for the fiscal year then ended in accordance with the Austrian Commercial Code.
Pursuant to statutory provisions, the management report is to be audited as to whether it is consistent with the financial statements and as to whether the other disclosures are not misleading with respect to the Company's position. The auditor's report also has to contain a statement as to whether the management report is consistent with the financial statements.
In our opinion, the management report is consistent with the financial statements.
Vienna, 8 June 2016
PwC Wirtschaftsprüfung GmbH
Peter Pessenlehner Austrian Certified Public Accountant
Disclosure, publication and duplication of the financial statements together with the auditor's report according to Section 281 (2) UGB in a form not in accordance with statutory requirements and differing from the version audited by us is not permitted. Reference to our audit may not be made without prior written permission from us.
Kapsch TrafficCom is a provider of intelligent transportation systems (ITS) in the segments of toll collection, traffic management, safety and security, smart urban mobility and connected cars. The end-to-end solutions of Kapsch TrafficCom cover the entire value creation chain of its customers as a one-stop shop, from components and design to the installation and operation of systems. The core business comprises the development, installation and operation of electronic toll collection and traffic management systems. References in 44 countries on all continents have made Kapsch TrafficCom a globally recognized ITS provider. As part of the Kapsch Group, an Austrian family-owned technology group founded in 1892, Kapsch TrafficCom is headquartered in Vienna, Austria, and has subsidiaries and branches in 30 countries. It has been listed since 2007 on the Vienna Stock Exchange (KTCG) and generated revenues of EUR 526 million in the fiscal year 2015/16 with over 3,700 employees.
Kapsch TrafficCom AG | Am Europlatz 2 | 1120 Vienna | Austria | www.kapschtraffic.com Investor Relations | Marcus Handl | Phone +43 50 811 1120 | Fax +43 50 811 99 1120 | E-Mail [email protected] Public Relations | Ingrid Lawicka | Phone +43 50 811 1705 | Fax +43 50 811 99 1705 | E-Mail [email protected]
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