Kapsch TrafficCom AG

Quarterly Report • Aug 24, 2009

Report on the first quarter of Fiscal Year 2009/10 (FY10-Q1).

Kapsch TrafficCom Group – Key Figures.

FY10 (Fiscal Year 2009/10): 1 April 2009 - 31 March 2010; FY10-Q1 (First quarter of Fiscal Year 2009/10): 1 April 2009 - 30 June 2009

Operating Figures (cumulative)		FY10-Q1	FY09-Q1	+/- %	FY09
Revenues	in million EUR	34.4	60.4	-43%	200.3
EBITDA	in million EUR	-3.7	12.2	<-100%	35.0
EBITDA margin	in%	-10.7	20.2		17.5
EBIT	in million EUR	-5.5	11.3	<-100%	29.0
EBIT margin	in%	-16.1	18.6		14.5
Profit before tax	in million EUR	-2.1	15.4	<-100%	21.9
Profit after tax	in million EUR	-1.5	11.2	<-100%	16.4
Earnings per share	in EUR	-0.2	0.9	<-100%	1.06
Free cash flow 1	in million EUR	20.8	-8.0	<-100 %	19.9
Capital expenditure 2	in million EUR	4.2	1.1	>100%	22.2
Employees as of 30 June		955	854	12%	946
Revenues by Segment		FY10-Q1	FY09-Q1	+/- %	FY09
Road Solution Projects	in million EUR	2.5	26.3	-91%	56.8
Services, System Extensions, Components Sales	in million EUR	29.9	32.1	-7%	135.6
Others	in million EUR	2.1	2.0	1%	8.0
Revenues by Region		FY10-Q1	FY09-Q1	+/- %	FY09
Central & Eastern Europe (incl. Austria)	in million EUR	21.8	45.8	-52%	139.3
Western Europe	in million EUR	4.7	5.5	-15%	21.3
Americas	in million EUR	1.8	2.7	-32%	14.0
Rest of World	in million EUR	6.1	6.4	-6%	25.6
Balance Sheet Data		30 June 2009	30 June 2008	+/- %	31 March 2009
Total assets	in million EUR	291.9	341.5	-15%	324.5
Total equity 3	in million EUR	126.1	144.3	-13%	134.2
Equity ratio	in%	43.2	42.3		41.4
Net assets 4	in million EUR	25.9	17.6	47%	5.0
Capital employed	in million EUR	164.4	194.4	-15%	193.4
Net working capital	in million EUR	90.9	154.4	-41%	122.3
Stock Exchange Data 5
Number of shares as of 30 June 2009	in million 12.2		Closing price as of 30 June 2009	in EUR	21.0
Free float as of 30 June 2009	in% 31.6		Closing price as of 30 June 2008	in EUR	29.7
Market capitalization as of 30 June 2009	in million EUR 256.2		Offer price per share on 26 June 2007	in EUR	32.0

1 operating cash flow minus capital expenditure from operations (excl. acquisitions and securities)

2 capital expenditure from operations (excl. acquisitions and securities)

3 incl. minority interests

4 excl. long-term securities

5 for additional information on the share see page 5

Letter from the Chief Executive Officer.

Georg Kapsch, Chief Executive Officer

Dear shareholders,

with this report, the Kapsch TrafficCom Group draws a balance on the first three months of the current fiscal year 2009/10 (FY10-Q1) which may be compared to the same period of the previous fiscal year only to a limited degree. In the first quarter of 2008/09 (FY09-Q1), Kapsch TrafficCom significantly increased revenues and earnings even in excess of the revenue increase compared to the same period of the fiscal year 2007/08 (FY08-Q1) due to the realization of project revenues from partial deliveries for the nationwide truck tolling system in the Czech Republic (phase II) and due to the implementation of an electronic toll collection system in New Zealand. Against this background, and due to the lack of a comparable project realization in the first quarter of fiscal year 2009/10, revenues of the Kapsch TrafficCom Group decreased by 43 % to EUR 34.4 million (FY09-Q1: EUR 60.4 million; FY08-Q1: EUR 33.8 million) in the first quarter 2009/10.

Due to decreased revenues and continuing large investments in the expansion into new markets, particularly the U.S.A., EBIT was at EUR minus 5.5 million (FY09-Q1: EUR 11.3 million; FY08-Q1: EUR 3.9 million). In contrast to the last quarter of the previous fiscal year (FY09-Q4), the financial result turned back positive, thereby resulting in a profit before tax of EUR minus 2.1 million (FY09-Q1: EUR 15.4 million; FY08-Q1: EUR 4.0 million) and a profit after tax of EUR minus 1.5 million (FY09-Q1: EUR 11.2 million; FY08-Q1: EUR 2.9 million) at lower loss levels than the EBIT.

Broken down by segments, with revenues of EUR 2.5 million (FY09-Q1: EUR 26.3 million) at an EBIT of EUR minus 9.9 million (FY09-Q1: EUR 4.8 million) the Road Solution Projects (RSP) segment recorded a considerable decrease against the same period of the previous fiscal year. The Services, System Extensions, Components Sales (SEC) segment was close to the level in the first quarter of the previous fiscal year with revenues of EUR 29.9 million Revenues down by 43 %

Negative earnings due to decreased revenues at continuing large investments in the expansion into new markets

Road Solution Projects segment with a considerable negative deviation from the previous fiscal year

(FY09-Q1: EUR 32.1 million) at an EBIT at EUR 4.5 million (FY09-Q1: EUR 6.2 million). This decrease is primarily attributable to fewer system extensions.

The Kapsch TrafficCom Group clearly improved its free cash flow in the first three months of the fiscal year 2009/10 to EUR 20.8 million against EUR minus 8.0 million during the same period of the previous fiscal year.

With total assets of EUR 291.9 million as of 30 June 2009, down by 15 % from EUR 341.5 million (30 June 2008), the Kapsch TrafficCom Group's equity ratio was at 43.2 % (30 June 2008: 42.3 %) as of 30 June 2009 reflecting a continuing strong balance sheet.

The first quarter of the current fiscal year stood out by a significant reduction of the net working capital. At EUR 90.9 million as of 30 June 2009, it was down by 41 % from EUR 154.4 million as of 30 June 2008. Net assets were up by 47 % from the EUR 17.6 million as of 30 June 2008 to EUR 25.9 million as of 30 June 2009.

The annual general meeting of Kapsch TrafficCom AG on 24 June 2009 resolved to pay a dividend of EUR 0.50 per share for the financial year 2008/09. This corresponds to a payout ratio of approximately 47 % or EUR 6.1 million. The stock was traded "ex-dividend" from 1 July 2009 on and the dividend was paid on 8 July 2009. A total of seven agenda items were discussed, all of which were unanimously approved by the shareholders present.

The project business is turning into an exciting cycle again: In July, we submitted bids for electronic toll collection systems in South Africa and North Carolina (U.S.A.). Several additional projects - among these the nationwide systems in Hungary, Slovenia and in The Netherlands - are close to the start of the tender or to the final decision for a tender. With regards to the upcoming tender for a nationwide electronic truck tolling system in France, we have successfully completed the formation of the bidding consortium.

With the fiscal year 2009/10 in mind, we take an optimistic view on our markets in the long term even in a changed economic environment. The fiscal year 2009/10 will be shaped by participation in tenders and by project awards in Hungary, Slovenia, France, Portugal, South Africa, and in the U.S.A.

With all best wishes

Georg Kapsch Chief Executive Officer

Free cash flow clearly improved

Continuing strong balance sheet

Significant reduction of net working capital and a clear improvement of the net assets

Results of annual general meeting on 24 June 2009

Project business is turning into an exciting cycle again

Outlook

Disclaimer

Certain statements contained in this report constitute "forward-looking statements." These statements, which contain the words "believe", "intend", "expect" and words of similar meaning, reflect management's beliefs and expectations and are subject to risks and uncertainties that may cause actual results to differ materially. As a result, readers are cautioned not to place undue reliance on such forward-looking statements. The company disclaims any obligation to publicly announce the result of any revisions to the forward-looking statements made herein, except where it would be required to do so under applicable law.

The Kapsch TrafficCom Share.

The Kapsch TrafficCom share closed the first quarter of the current fiscal year 2009/10 on the Vienna Stock Exchange at a share price of EUR 21.0 on 30 June 2009, up 41.9 % from the closing price at the end of the previous quarter (31 March 2009: EUR 14.8). During the same period, the ATX Prime increased by 25.4 %. With the beginning of the first quarter of the current fiscal year 2009/10, the share price continuously increased up to EUR 21.9 (closing price as of 25 June 2009) and closed the first quarter at a slightly lower price of EUR 21.0 as of 30 June 2009. Since the initial public offering on 26 June 2007 (the offer price was at EUR 32.0 per share), our share price declined by 34.4 %, whereas the ATX Prime decreased by 62.5 %.

Based on a closing price of EUR 21.0 per share on 30 June 2009 and the number of outstanding shares unchanged at 12.2 million, Kapsch TrafficCom's market capitalization was EUR 256.2 million. As of 30 June 2009, approximately 31.6 % of the shares were in free float, whereas the remaining approximately 68.4 % were held by KAPSCH-Group Beteiligungs GmbH.

Share price development in FY10-Q1 and since IPO (Kapsch TrafficCom AG vs. ATX Prime)

1 Offer price on 26 June 2007 and closing value for ATX Prime on 25 June 2007, each indexed to 100.

Information on the share		Financial calendar
Investor Relations Officer	Marcus Handl	25 November 2009	Interim financial report FY10-Q2
E-Mail	ir.kapschtraffic@kapsch.net	24 February 2010	Interim financial report FY10-Q3
Stock exchange	Vienna, Prime Market	16 June 2010	Results FY10
ISIN	AT000KAPSCH9	7 July 2010	Ordinary Shareholders' Meeting
Trading Symbol	KTCG	14 July 2010	Deduction of dividends (ex-day)
Reuters / Bloomberg	KTCG.VI / KTCG AV	21 July 2010	First day of payments for dividends

Analysis of results and balance sheet.

Revenues and earnings.

The revenues of the Kapsch TrafficCom Group were at EUR 34.4 million in the first quarter of the current fiscal year 2009/10 (FY10-Q1), down by 43.0 % from the EUR 60.4 million recorded in the same period of the previous fiscal year (FY09-Q1). This decrease was primarily attributable to the Road Solution Projects (RSP) segment, which is also visible from the segment analysis. At EUR 29.9 million (FY09-Q1: EUR 32.1 million), the Services, System Extensions, Components Sales (SEC) segment originated the largest contribution to the revenue.

Revenues by segment in the first three months of the current fiscal year 2009/10 were as follows:

• At EUR 2.5 million, RSP (Road Solution Projects) segment's revenues recorded a considerable decrease against EUR 26.3 million in the same period of the previous fiscal year due to lack of comparable projects as in the previous year where project revenues from partial deliveries for the nationwide electronic truck tolling system in the Czech Republic (phase II) and from the implementation of an electronic toll collection system in New Zealand were realized.
• The SEC (Services, System Extensions, Components Sales) segment was close to the level in the same period of the previous fiscal year with revenues of EUR 29.9 million, down by 6.8% from EUR 32.1 million (FY09-Q1). This decrease was primarily attributable to a lower level of system extensions. The operation of electronic truck tolling systems has developed in line with plans.
• The Others segment (OTH) recorded revenues of EUR 2.1 million (FY09-Q1: EUR 2.0 million).

In the first three months of the current fiscal year, Kapsch TrafficCom Group reported an operating result (EBIT) at EUR minus 5.5 million (FY09-Q1: EUR 11.3 million). Operating results (EBIT) by segment were as follows:

• The RSP segment recorded an EBIT of EUR minus 9.9 million (FY09-Q1: EUR 4.8 million) due to the decrease in revenues and continuing large investments in the expansion into new markets, particularly the U.S.A.
• The EBIT for the SEC segment was at EUR 4.5 million (FY09-Q1: EUR 6.2 million) at an EBIT margin declining from 19.3 % in the previous fiscal year (effected by one time effects) to 15.2 % in the current fiscal year.
• OTH segment's EBIT was at EUR minus 0.2 million (FY09-Q1: EUR 0.3 million).

Kapsch TrafficCom recorded a financial result of EUR 3.3 million in the period under review (FYJ09-Q1: EUR 4.2 million). The finance income mainly resulted from a positive development of the group currency. Interest expenses and hedging costs were the main drivers of the finance costs.

Financial position and cash flows.

With total assets of EUR 291.9 million as of 30 June 2009 (31 March 2009: EUR 324.5 million) and at a total equity of EUR 126.1 million, the Kapsch TrafficCom Group's equity ratio was at 43.2 % as of 30 June 2009 (31 March 2009: 41.4 %). The increase in assets was particularly due to a decrease in current assets resulting from a reduction of trade receivables and other current assets in connection with the nationwide electronic truck tolling system in the Czech Republic. The decrease in equity and liabilities was attributable to a reduction in current financial liabilities resulting from the scheduled repayment of loans.

The cash flow from operating activities improved from EUR minus 6.9 million in the first three months of the previous fiscal year to EUR 25.0 million in the same period of the current fiscal year 2009/10. A decrease in trade receivables and other current assets positively contributed to this development. In addition, the current financial liabilities were reduced. At EUR 4.2 million, the cash flow from investing activities was nearly at the same level as in the first quarter of the previous fiscal year and in particular resulted from payments for the acquisition of 26 % of the shares of BRISA Group in Kapsch Telematic Services GmbH.

Despite negative earnings, cash and cash equivalents were at EUR 60.6 million as of 30 June 2009 (31 March 2009: EUR 60.2 million).

Condensed consolidated interim financial information 30 June 2009 (unaudited).

Kapsch TrafficCom AG – Consolidated statement of comprehensive income.

All amounts in TEUR Note	FY10-Q1		FY09-Q1	FY10‑Q1 cum.	FY09‑Q1 cum.
REVENUE (4)	34,435		60,423	34,435	60,423
Other operating income		259	595	259	595
Changes in finished and unfinished goods and work in progress		2,403	726	2,403	726
Cost of material and other production services	-16,434		-28,363	-16,434	-28,363
Staff costs	-14,317		-13,149	-14,317	-13,149
Amortization of intangible assets and depreciation of property, plant and equipment	-1,850		-919	-1,850	-919
Other operating expenses	-10,025		-8,053	-10,025	-8,053
Operating result (4)	-5,530		11,261	-5,530	11,261
Finance income		4,019	5,775	4,019	5,775
Finance costs		-767	-1,590	-767	-1,590
Financial result		3,252	4,185	3,252	4,185
Result from associates		143	0	143	0
Profit before income taxes	-2,134		15,445	-2,134	15,445
Income taxes (10)		602	-4,259	602	-4,259
Profit for the period	-1,532		11,186	-1,532	11,186
Other comprehensive income for the period
Gains/losses recognized directly in equity:
Available for sale financial assets		-346	79	-346	-79
Currency translation differences		-278	-280	-278	-280
Income tax relating to components of other comprehensive income		86	-20	86	-20
Other comprehensive income for the period, net of tax (11)		-537	-221	-537	-221
Total comprehensive income for the period	-2,069		10,966	-2,069	10,966
Profit attributable to:
Equity holders of the company	-2,204		10,326	-2,204	10,326
Minority interest		673	860	673	860
	-1,532		11,186	-1,532	11,186
Total comprehensive income attributable to:
Equity holders of the company	-2,519		9,995	-2,519	9,995
Minority interest		450	970	450	970
	-2,069		10,966	-2,069	10,966
Earnings per share from the profit for the period attributable to the equity holders of the company (in EUR per share)		-0,18	0,85	-0,18	0,85

Earnings per share related to 12.2 million shares.

Kapsch TrafficCom AG – Statement of financial position.

All amounts in TEUR	Note	30 June 2009	31 March 2009
ASSETS
Non-current assets
Property, plant and equipment	(5)	16,440	16,887
Intangible assets	(5)	28,530	26,089
Shares in associates		12,571	12,302
Other non-current financial assets and investments		3,784	3,784
Other non-current assets		14,911	18,423
Deferred tax assets		8,467	8,242
		84,703	85,728
Current assets
Inventories		40,083	34,220
Trade receivables and other current assets		102,864	140,409
Other current financial assets		3,736	3,946
Cash and cash equivalents		60,558	60,230
		207,241	238,804
TOTAL ASSETS		291,944	324,532
EQUITY AND LIABILITIES
Equity
Share capital	(6)	12,200	12,200
Capital reserve		70,077	70,077
Retained earnings and other reserves		41,220	47,769
		123,497	130,046
Minority interests		2,574	4,194
Total equity		126,071	134,240
Non-current liabilities
Non-current financial liabilities	(7)	10,060	10,060
Liabilities from post-employment benefits to employees	(8)	14,106	14,214
Non-current provisions	(9)	524	524
Other non-current liabilities		13,816	14,773
Deferred tax liability		1,799	1,870
		40,305	41,442
Current liabilities
Trade and other current payables		57,081	56,253
Other liabilities and deferred income		21,054	25,316
Current tax payables		8,753	7,449
Current financial liabilities	(7)	28,302	49,210
Current provisions	(9)	10,378 125,569	10,623 148,851
Total liabilities		165,874	190,293
TOTAL EQUITY AND LIABILITIES		291,944	324,532

Kapsch TrafficCom AG – Consolidated statement of changes in equity.

All amounts in TEUR
		Attributable to equity holders of the company		Minority interest	Total equity
	Share capital	Capital reserve	Consolidated retained earnings & other reserves
Carrying amount as of 31 March 2009	12,200	70,077	47,769	4,194	134,240
Dividend relating to 2008/09			-6,100	0	-6,100
Total comprehensive income			-2,519	450	-2,069
Carrying amount as of 30 June 2009	12,200	70,077	39,150	4,644	126,071
Carrying amount as of 31 March 2008	12,200	70,077	48,976	2,123	133,377
Dividend relating to 2007/08			0	0	0
Total comprehensive income			9,995	970	10,966
Carrying amount as of 30 June 2008	12,200	70,077	58,972	3,093	144,342

Kapsch TrafficCom AG – Consolidated cash flow statement.

All amounts in TEUR	FY10-Q1	FY09-Q1	FY10‑Q1 cum.	FY09‑Q1 cum.
Cash flow from operating activities
Operating result	-5,530	11,261	-5,530	11,261
Adjustments for non-cash items and other reconciliations:
Depreciation and amortisation	1,850	919	1,850	919
Increase/decrease in obligations for post-employment benefits	-109	-31	-109	-31
Change in other non-current liabilities and provisions	0	-18	0	-18
Increase/decrease in non-current trade receivables	3,496	1,451	3,496	1,451
Increase/decrease in non-current trade payables	346	1,091	346	1,091
Other (net)	3,189	3,755	3,189	3,755
	3,243	18,428	3,243	18,428
Changes in net current assets:
Increase/decrease in trade receivables and other assets	37,545	-34,086	37,545	-34,086
Increase/decrease in inventories	-5,863	3,843	-5,863	3,843
Increase/decrease in trade payables and other current payables	-10,864	5,836	-10,864	5,836
Increase/decrease in current provisions	-245	3,062	-245	3,062
	20,572	-21,345	20,572	-21,345
Cash flow from operations	23,815	-2,917	23,815	-2,917
Interest received	180	387	180	387
Interest payments	-624	-938	-624	-938
Net payments of income taxes	1,610	-3,458	1,610	-3,458
Net cash flow from operating activities	24,981	-6,926	24,981	-6,926
Cash flow from investing activities
Purchases of property, plant and equipment	-699	-794	-699	-794
Purchases of non-current intangible assets	-3,520	-3,528	-3,520	-3,528
Proceeds from disposal of property, plant and equipment and intangible
assets	-1	69	-1	69
Net cash flow from investing activities	-4,220	-4,253	-4,220	-4,253
Cash flow from financing activities
Increase/decrease in other non-current financial liabilities	0	15,751	0	15,751
Increase/decrease in current financial liabilities	-20,907	6,637	-20,907	6,637
Net cash flow from financing activities	-20,907	22,388	-20,907	22,388
Net decrease/increase in cash and cash equivalents	-146	11,209	-146	11,209
Change in cash and cash equivalents
Cash and cash equivalents at beginning of period	60,230	47,429	60,230	47,429
Net decrease/increase in cash and cash equivalents	-146	11,209	-146	11,209
Exchange gains/losses on cash and cash equivalents	475	17	475	17
Cash and cash equivalents at end of period	60,558	58,654	60,558	58,654

Kapsch TrafficCom AG – Selected notes to the condensed consolidated interim financial information.

1. General information.

The Kapsch TrafficCom Group is an international supplier of innovative road traffic telematics solutions.

The business activities of the Kapsch TrafficCom Group are subdivided into the following three segments:

• Road Solution Projects (RSP)
• Services, System Extensions, Components Sales (SEC)
• Others (OTH)

The Road Solution Projects segment relates to the installation of road traffic telematics solutions.

The Services, System Extensions, Components Sales segment relates to the sale of services (maintenance as well as technical and commercial operation) and components in the area of traffic telematics solutions.

The Others segment relates to non-core business activities conducted by Kapsch Components KG. In this segment, Kapsch TrafficCom Group offers engineering solutions, electronic manufacturing and logistics services to affiliated entities and third parties.

2. Basis of preparation.

This condensed interim financial information for the first quarter of the current fiscal year 2009/10 ended 30 June 2009 has been prepared in accordance with IAS 34 "Interim financial reporting". The interim condensed financial report should be read in conjunction with the annual financial statements for the year ended 31 March 2009.

3. Accounting policies.

Except for new or amended IFRSs and IFRICs listed below the accounting policies adopted are consistent with those of the annual financial statements for the year ended 31 March 2009, as described in the annual financial statements for the year ended 31 March 2009.

In this condensed interim financial information report for the first quarter of FY10 the following new or amended IFRSs and IFRICs have been adopted for the first time:

New IFRSs/IFRICs		Mandatory for accounting periods beginning on or after
IFRS 8	Operating segments	1 January 2009
IFRIC 12	Service concession agreements (*)	30 March 2009
IFRIC 13	Customer loyalty programs (*)	1 January 2009

Amended IFRSs		Mandatory for accounting periods beginning on or after
IAS 1 (R)	Presentation of Financial Statements	1 January 2009
IAS 23 (R)	Borrowing Costs (*)	1 January 2009
IAS 32 and 1	Puttable Financial Instruments and Obligations Arising on Liquidation (*)	1 January 2009

The standards and interpretations marked with (*) had no effect on the condensed interim financial information for the first quarter of fiscal year 2009/10 ending 30 June 2009.

4. Segment information.

• RSP = Road Solution Projects
• SEC = Services, System Extensions and Components Sales
• OTH = Others

All amounts in TEUR

FY10-Q1	RSP	SEC	OTH	Consolidated Group
Revenues	2,481	29,894	2,061	34,435
Operating result	-9,910	4,541	-162	-5,530
FY09-Q1	RSP	SEC	OTH	Consolidated Group
Revenues	26,293	32,091	2,039	60,423
Operating result	4,791	6,187	283	11,261

The following table contains all single external customers which contributed more than 10% to the total revenues of the period and additionally shows the information of the attributed operating segment.

	FY10-Q1			FY09-Q1
All amounts in TEUR	Revenue	RSP	SEC	Revenue	RSP	SEC
Customer 1	13,495		x	35,695	x	x
Customer 2	5,664		x	6,707		x

5. Capital expenditure.

All amounts in TEUR	Tangible and intangible assets
Carrying amount as of 31 March 2009	42,976
Additions	4,490
Change in consolidated entities	0
Disposals	0
Depreciation, amortization, impairment and other movements	-1,838
Currency translation differences	-658
Carrying amount as of 30 June 2009	44,970
Carrying amount as of 31 March 2008	14,785
Additions	4,158
Change in consolidated entities	331
Disposals	-69
Depreciation, amortization, impairment and other movements	-462
Currency translation differences	35
Carrying amount as of 30 June 2008	18,777

6. Share capital.

The registered share capital of the company amounts to EUR 12,200,000. The share capital is fully paid in. The total number of ordinary shares is 12,200,000. The shares are ordinary bearer shares and have no par value.

7. Financial liabilities.

All amounts in TEUR	30 June 2009	31 March 2009	30 June 2008	31 March 2008
Non-current	10,060	10,060	26,333	10,581
Current	28,302	49,210	23,980	17,382
Total	38,363	59,270	50,312	27,963

Movements in borrowings is analysed as follows:

Carrying amount as of 31 March 2009	59,270
Additions	4
Repayments of borrowings	-22,056
Currency translation differences	1,145
Carrying amount as of 30 June 2009	38,363
Carrying amount as of 31 March 2008	27,963
Additions	26,625
Repayments of borrowings	-6,183
Currency translation differences	1,908
Carrying amount as of 30 June 2008	50,312

8. Liabilities from post-employment benefits to employees.

All amounts in TEUR	30 June 2009	31 March 2009	30 June 2008	31 March 2008
Severance payments	5,226	5,294	5,010	5,001
Pension benefits	8,880	8,920	9,049	9,088
Total	14,106	14,214	14,058	14,089

Severance payments

The obligation to set up a provision for severance payments is based on the respective labor law.

Pension benefits

Liabilities for pension benefits recognised at the balance sheet date relate to retirees only. All pension agreements are based on past service cost and are not covered by external plan assets (funds). In addition, contributions are paid to external pension fund for employees of the Group.

9. Provisions.

All amounts in TEUR	30 June 2009	31 March 2009	30 June 2008	31 March 2008
Non-current provisions	524	524	1,676	1,694
Current provisions	10,378	10,623	21,312	18,250
Total	10,902	11,147	22,988	19,943

FY10-Q1
All amounts in TEUR	31 March 2009	Change in consolidated entities	Utilization/ disposal	Addition	Currency translation differences	30 June 2009
Obligations from anniversary bonuses	524	0	-7	7	0	524
Non-current provisions, total	524	0	-7	7	0	524
Warranties	1,820	0	-155	0	9	1,675
Losses from pending transactions and
repairs	934	0	-47	0	0	888
Legal fees, costs of litigation and
contract risks	3,228	0	-8	153	94	3,468
Other	4,640	0	-470	89	89	4,348
Current provisions, total	10,623	0	-679	242	192	10,378
Total	11,147	0	-685	249	192	10,902

FY09-Q1
All amounts in TEUR	31 March 2008	Change in consolidated entities	Utilization/ disposal	Addition	Currency translation differences	30 June 2008
Obligations from anniversary bonuses	464	0	-12	0	0	453
Costs of dismantling and removing
assets	1,130	0	0	0	0	1,130
Other	99	0	0	0	-6	93
Non-current provisions, total	1,694	0	-12	0	-6	1,676
Warranties	4,128	0	-422	0	-14	3,692
Losses from pending transactions and
repairs	910	0	-301	0	0	609
Legal fees, costs of litigation and
contract risks	6,888	0	-4,328	6,009	423	8,993
Other	6,324	0	-2,259	3,781	172	8,018
Current provisions, total	18,250	0	-7,309	9,790	581	21,312
Total	19,943	0	-7,321	9,790	575	22,988

10.Income taxes.

Income tax expense is recognised on management's best estimate of the weighted average annual income tax rate expected for the full financial year. The estimated tax rate for first quarter of FY10 used is 28% (the estimated tax rate for the first quarter of FY09 was 28 %).

11. Other comprehensive income.

FY10-Q1 All amounts in TEUR	Before tax	Tax (charge) credit	After tax
Fair value gains/losses relating to available-for-sale financial assets:
Fair value gains/losses not realized in the current period	-346	86	-259
Fair value gains/losses realized in the income statement	0		0
Currency translation differences	-278		-278
Fair value gains/losses recognized in equity	-623	86	-537

FY09-Q1
All amounts in TEUR	Before tax	Tax (charge) credit	After tax
Fair value gains/losses relating to available-for-sale financial assets:
Fair value gains/losses not realized in the current period	79	-20	59
Fair value gains/losses realized in the income statement	0		0
Currency translation differences	-280		-280
Fair value gains/losses recognized in equity	-201	-20	-221

12.Contingent liabilities, other commitments and financial obligations.

The Group's contingent liabilities primarily result from large scale projects. Other commitments mainly relate to contract and warranty bonds, bank guarantees, performance und bid bonds, sureties and acceptance of guarantees for subsidiaries vis-á-vis third parties.

	Details of contingent liabilities and other commitments are as follows:

All amounts in TEUR	30 June 2009	31 March 2009
Contract, warranty, performance and bid bonds:
City highway Santiago	1,392	846
City highway Sydney and Melbourne	1,095	1,593
Truck tolling system Austria	12,500	12,500
Truck tolling system Czech Republic	20,626	19,938
Tolling system New Zealand	1,013	2,025
Express Toll Collection System, Maryland, USA	3,127	3,317
Other	5,204	5,338
	44,957	45,557
Bank guarantees	3,278	3,486
Sureties	28	30
Total	48,263	49,073

13.Related parties.

All amounts in TEUR		Sales to related parties Q1 (cum.)	Sales from related parties Q1 (cum.)	Amounts owed by related parties 30 June	Amounts owed to related parties 30 June
Affiliated companies outside the Kapsch TrafficCom Group	FY10	381	2,499	3,166	5,202
	FY09	377	2,995	749	1,063
Others	FY10	0	838	0	9,351
	FY09	16	67	0	9,339

Additionally, the related party KAPSCH-Group Beteiligungs GmbH, Vienna, issued a payment guarantee in the amount of EUR 40 million, in relation to the nationwide electronic truck tolling system in the Czech Republic.

Members of the executive and supervisory boards have management functions or are member in supervisory boards of other companies of the Kapsch Group.

14.Events occurring after 30 June 2009.

On 11 August 2009, Kapsch Telematic Services Danmark ApS was incorporated as a wholly-owned subsidiary of Kapsch Telematic Services GmbH in Copenhagen.

Vienna, 24 August 2009

Management Board

Georg Kapsch, CEO Erwin Toplak, COO

Kapsch TrafficCom is an international supplier of innovative road traffic telematics solutions. Its principle business is the development and supply of electronic toll collection (ETC) systems, in particular for the multi-lane free-flow (MLFF) of the traffic, and the technical and commercial operation of such systems. Kapsch TrafficCom also supplies traffic management systems, with a focus on road safety and traffic control, and electronic access systems and parking management. With more than 220 references in 36 countries in all five continents, and with almost 15 million delivered on-board units (OBUs) and more than 13,000 equipped lanes, Kapsch TrafficCom has positioned itself among the leading suppliers of ETC systems worldwide. Kapsch TrafficCom is headquartered in Vienna, Austria, and has subsidiaries and representative offices in 23 countries.

Kapsch TrafficCom AG I Am Europlatz 2 I A-1120 Vienna, Austria I www.kapschtraffic.com Investor Relations I Marcus Handl I Phone: +43 (0)50811 1120 I Fax: +43 (0)50811 99 1120 I E-Mail: ir.kapschtraffic@kapsch.net Public Relations I Brigitte Herdlicka I Phone: +43 (0)50811 1710 I Fax: +43 (0)50811 99 1710 I E-Mail: brigitte.herdlicka@kapsch.net