SMART PARKING LIMITED — Annual Report 2012

Aug 29, 2012

ASX PRELIMINARY FINAL REPORT

Car Parking Technologies Limited ABN 45 119 327 169

30 June 2012

Lodged with the ASX under Listing Rule 4.3A

Contents

Results for Announcement to the Market	1
Appendix 4E item 2
Preliminary consolidated statement of comprehensive income	2
Appendix 4E item 3
Preliminary consolidated statement of financial position	3
Appendix 4E item 4
Preliminary consolidated statement of changes in equity	4
Preliminary consolidated statement of cash flows	5
Appendix 4E item 5
Other Appendix 4E Information	6
Appendix 4E item 6 to 15

This report covers the consolidated entity consisting of Car Parking Technologies Limited and its controlled entities. The financial report is presented in Australian dollars.

Car Parking Technologies Limited Year ended 30 June 2012

Details of the reporting period

Current period: 30 June 2012 Prior period: 30 June 2011

RESULTS FOR ANNOUNCEMENT TO MARKET

		2012	2011
Revenue from ordinary activities	Up 660% to	12,872,625	1,694,596
Profit/ (Loss) from ordinary activities after tax attributable to members	Down 1,362% to	(17,151,635)	(1,173,427)
Total comprehensive income for the year attributable to owners	Down 1,649% to	(16,939,966)	(968,623)

Dividends

There were no dividends paid or proposed for the period. The Group does not have a dividend re-investment plan.

Commentary on the results for the period

Total revenue from continuing operations for the year ended 30 June 2012 is $12,872,625, up 660% against the prior corresponding period. Revenue increased largely as a result of the Town and City Parking Limited acquisition that closed in January 2012 and a full year contribution from Car Parking Technologies Limited’s technology business (formerly Meter Eye Limited which was acquired in February 2011). Refer to note 9 for a breakdown on segment revenue.

The net after tax loss attributable to members of $17,151,635 was down 1,362% on the last corresponding period. The results included:

• An impairment charge of $11,299,431 that was booked against goodwill in the Technology segment based on the lower than expected revenue for the year ended 30 June 2012.

• An impairment charge of $615,131 related to the acquisition of Town and City Parking, further information on this is included in note 12.

• Restructuring and non-recurring costs of $692,218 related to the acquisition and integration of Town and City Parking Limited.

• Amortisation of intangible assets of $1,050,451.

Further commentary on the results is included in the Market Announcement.

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Car Parking Technologies Limited and its Controlled Entities

Consolidated Statement of Comprehensive Income For the year ended 30 June 2012

Note	Consolidated 2012 $ 2011 $
Revenue from operations Other income Raw materials and consumables used Employee benefits expense Depreciation and amortisation expense Rental and operating lease costs Share-based payments expense Finance and interest expense Impairment of other receivable Impairment of goodwill Other expenses Loss before income tax Income tax expense Loss for the year Other comprehensive income: Exchange differences on translation of foreign operations Other comprehensive income for the year, net of tax Total comprehensive income for the year Total comprehensive income for the year attributable to owners of Car Parking Technologies Limited Earnings per share from continuing operations attributable to the ordinary equity holders of the company. - basic earnings/ (loss) per share 7 - diluted earnings/ (loss) per share 7	12,872,625 1,694,596 - 798,293 (1,718,561) (911,286) (8,154,311) (583,242) (1,431,552) (421,598) (1,129,547) (20,759) (97,601) (343,073) (102,853) (29,139) (615,131) - (11,299,431) - (5,353,038) (1,033,326)
	(17,029,400) (849,534) (122,235) (323,893)
	(17,151,635) (1,173,427)
	211,669 204,804
	211,669 204,804
	(16,939,966) (968,623)
	(16,939,966) (968,623)
	(0.10) (0.01) (0.10) (0.01)

The above consolidated statement of comprehensive income is to be read in conjunction with the accompanying notes.

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Car Parking Technologies Limited and its Controlled Entities

Consolidated Statement of Financial Position As at 30 June 2012

Note	Consolidated 2012 $ 2011 $
ASSETS Current Assets Cash and cash equivalents Trade and other receivables Inventories Total Current Assets Non-current Assets Financial assets at fair value through profit or loss Property, plant and equipment Intangible assets Deferred tax assets Total Non-Current Assets TOTAL ASSETS LIABILITIES Current Liabilities Trade and other payables Income tax payable Deferred revenue Provisions Total Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity Accumulated losses 3 Reserves TOTAL EQUITY	10,972,973 4,235,966 8,177,224 876,931 1,375,820 724,708
	20,526,017 5,837,605 86,924 205,385 4,474,630 157,554 6,800,139 16,864,012 154,261 260,328
	11,515,954 17,487,279
	32,041,971 23,324,884
	10,693,630 437,116 10,023 550,257 149,274 98,256 1,301,049 90,758
	12,153,976 1,176,387
	12,153,976 1,176,387
	19,887,995 22,148,497
	45,554,329 30,972,466 (26,958,481) (9,806,846) 1,292,147 982,877
	19,887,995 22,148,497

The above consolidated statement of financial position is to be read in conjunction with the accompanying notes.

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Car Parking Technologies Limited and its Controlled Entities

Consolidated Statement of Changes in Equity For the year ended 30 June 2012

Note	Contributed equity Reserves Retained earnings $ $ $	Total $
Balance at 1 July 2011 Total comprehensive income for the year Loss for the year Other comprehensive income Total comprehensive income for the year Transactions with owners, recorded directly in equity Contributions by owners Contributions of equity net of transaction costs Share-based payment transactions Other movements in equity Total transactions with owners Balance at 30 June 2012 Note	30,972,466 982,877 (9,806,846)	22,148,497
	- - (17,151,635) - 211,669 -	(17,151,635) 211,669
	- 211,669 (17,151,635)	(16,939,966)
	14,581,863 - - - 97,601 - - - -	14,581,863 97,601 -
	14,581,863 97,601 -	14,679,464
	45,554,329 1,292,147 (26,958,481)	19,887,995
	Contributed equity Reserves Retained earnings $ $ $	Total $
Balance at 1 July 2010 Total comprehensive income for the year Loss for the year Other comprehensive income Total comprehensive income for the year Transactions with owners, recorded directly in equity Contributions by owners Contributions of equity net of transaction costs Share-based payment transactions Other movements in equity Issue of consideration shares Total transactions with owners Balance at 30 June 2011	14,232,890 1,392,611 (9,622,509)	6,002,992
	- - (1,173,427) - 204,804 -	(1,173,427) 204,804
	- 204,804 (1,173,427)	(968,623)
	894,576 - - 1,295,000 (614,538) 957,611 - - 31,479 14,550,000 - -	894,576 1,638,073 31,479 14,550,000
	16,739,576 (614,538) 989,090	17,114,128
	30,972,466 982,877 (9,806,846)	22,148,497

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

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Car Parking Technologies Limited and its Controlled Entities

Consolidated Statement of Cash Flows For the year ended 30 June 2012

Note	Consolidated 2012 $ 2011 $
Cash flows from operating activities Cash receipts in the course of operations Cash payments in the course of operations Interest and other finance costs paid Interest received Income taxes paid Net cash flows inflow/(outflow) from operating activities Cash flows from investing activities Payment for acquisition of subsidiary, net of cash acquired Payments for purchase of equities Proceeds from sale of equities Purchase of plant and equipment Net cash flows inflow/(outflow) from investing activities Cash flows from financing activities Proceeds from share issue Share issue costs Proceeds from exercise of share options Repayment of borrowings Net cash flows inflow/(outflow) from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at end of period	13,472,548 783,442 (17,460,624) (3,336,311) (102,853) (29,139) 443,627 343,944 (574,781) -
	(4,222,083) (2,238,064)
	(542,857) - - (1,011,000) - 3,111,000 (1,930,204) (70,835)
	(2,473,061) 2,029,165
	15,000,000 1,000,000 (418,137) (105,424) - 1,295,000 (1,041,390) (2,058,399)
	13,540,473 131,177
	6,845,329 (77,722) 4,235,966 4,392,208 (108,322) (78,520)
	10,972,973 4,235,966

The above consolidated statement of cash flows is to be read in conjunction with the accompanying notes.

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Car Parking Technologies Limited and its Controlled Entities

Supplementary Appendix 4E Information

1. Statement of Significant Accounting Policies

This preliminary final report has been prepared in accordance with ASX Listing Rule 4.3A and the disclosure requirements of ASX Appendix 4 E.

This report is to be read in conjunction with any public announcements made by Car Parking Technologies Limited during the reporting period in accordance with the continuous disclosure requirements of The Corporations Act 2001 and the Australian Securities Exchange Listing Rules.

The financial report, comprising the financial statements and notes of Car Parking Technologies Limited and its controlled entities, complies with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

Where necessary, comparative figures have been adjusted to comply with the changes in presentation in the current period.

The principal accounting policies adopted in the preparation of the financial statements are consistent with those of the previous financial year.

2. Material Factors Affecting the Economic Entity for the Current Period

Refer to the attached Market Announcement for discussion of the nature and amount of material items affecting revenue, expenses, assets, liabilities, equity or cash flows, where their disclosure is relevant in explaining the financial performance or position of the entity for the period.

3. Retained Earnings (Appendix 4E item 6)

	Consolidated 2012 $ 2011 $
Balance 1 July Net profit/(loss) for the year Expired options transferred to retained earnings Other movements in retained earnings Balance 30 June	(9,806,846) (9,622,509) (17,151,635) (1,173,427) - 957,611 - 31,479
	(26,958,481) (9,806,846)

4. Additional Dividend Information (Appendix 4E item 7)

There were no dividends paid or proposed during the year.

5. Dividend Reinvestment Plan (Appendix 4E item 8)

The company has no dividend reinvestment plan in operation.

6. NTA Backing (Appendix 4E item 9)

		Consolidated
	2012		2011
	$		$
Net tangible asset backing per ordinary share		$0.1224		$0.0339

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Car Parking Technologies Limited and its Controlled Entities

7. Earnings/(loss) per Share (Appendix 4E item 14.1)

	Consolidated 2012 $ 2011 $
Basic profit/ (loss) per share Diluted profit/ (loss) per share Profit/ (loss) used in calculating EPS Basic and diluted loss per share Profit/(Loss) used in calculating EPS Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS Reconciliation of basic and diluted loss per share Profit/(loss) attributable to the ordinary equity holders of the company used in calculating earnings/(loss) per share:	(0.10) (0.01) (0.10) (0.01) (17,151,635) (1,173,427) No. 180,036,996 No. 97,719,933
	2012 $ 2011 $ (17,151,635) (1,173,427)
	(17,151,635) (1,173,427)

The earnings per share calculation has not been adjusted for the 2,000,000 options (2011: 2,000,000) and 1,094,828 deferred share rights (2011: 844,828) as the company has made a loss in the current year and this would be considered antidilutive. These options and deferred share rights could potentially dilute basic earnings per share in the future.

8. Share Buyback (Appendix 4E item 14.2)

The company had no on-market buy back in operation during the year ended 30 June 2012 and the year ended 30 June 2011.

9. Segment Information

a) Description of segments

Management has determined the operating segments based on the reports reviewed by the Board that are used to make strategic decisions.

The Board considers the business from a product perspective and has identified two reportable segments. Technology consists of car parking technology products sold globally and Parking Management consists of the Town and City Parking Limited business which operates in the United Kingdom.

From a geographical perspective technology revenue is reported from New Zealand, Australia, UK, South Africa, Middle East and other, as revenues grow additional countries or regions will be reported.

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Car Parking Technologies Limited and its Controlled Entities

b) Segment information provided to the board

The segment information provided to the Board for the reportable segments for the year ended 30 June 2012 is as follows:

Group - 2012	Technology $ Parking Management $ Total $
Total segment revenue Inter-segment revenue Revenue from external customers Adjusted EBITDA	2,806,137 10,209,322 13,015,459 (586,461) - (586,461)
	2,219,676 10,209,322 12,428,998
	(1,614,899) (562,659) (2,177,558)

The segment information provided to the Board for the reportable segments for the year ended 30 June 2011 is as follows:

Group - 2011	Technology $ Parking Management $ Total $
Total segment revenue Inter-segment revenue Revenue from external customers Adjusted EBITDA	1,349,066 - 1,349,066 - - -
	1,349,066 - 1,349,066
	(455,054) - (455,054)

b) Other segment information

(i) Segment revenue

Sales between segments are carried out at arm’s length and are eliminated on consolidation. The revenue from external parties reported to the Board is measured in a manner consistent with that in the income statement.

Segment revenue reconciles to total revenue from continuing operations as follows:

	2012 $ 2011 $
Total segment revenue Intersegment eliminations Interest revenue	13,015,459 1,349,066 (586,461) - 443,267 345,530
	12,872,625 1,694,596

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Car Parking Technologies Limited and its Controlled Entities

(ii) Adjusted EBITDA

The Board assesses the performance of the operating segments based on a measure of adjusted EBITDA. This measurement excludes the effects of non-recurring expenditure from the operating segments such as restructuring costs, acquisition costs and goodwill impairments when the impairment is the result of an isolated, non-recurring event. Furthermore, the measure excludes the effects of equity-settled share-based payments and realised/unrealised gains/(losses) on financial assets. Interest income and expenditure are not allocated to segments, as this type of activity is driven by the central treasury function, which manages the cash position of the group.

A reconciliation of adjusted EBITDA to operating profit before income tax is provided as follows:

	2012 $ 2011 $
Adjusted EBITDA Intersegment eliminations Interest revenue Interest expense Business acquisition costs Depreciation Amortisation Impairment net asset adjustment receivable Impairment of goodwill Realised gain on financial assets through profit and loss Unrealised loss on financial assets through profit and loss Loss on disposal of fixed property, plant and equipment Town and City Parking Limited restructuring costs Adjusted EBITDA for parent company Other Profit before income tax from operations	(2,177,558) (455,054) (299,689) - 443,627 345,530 (34,890) - (160,925) (359,087) (381,101) (26,155) (1,050,451) (395,443) (615,131) - (11,299,431) - - 1,264,360 (118,461) (565,427) - (8,923) (447,410) - (557,945) (649,335) (330,035) -
	(17,029,400) (849,534)

10. Trends in Performance (Appendix 4E item 14.5)

Refer to the attached Market Announcement.

11. Other Factors that Affected Results in the Period or which are Likely to Affect the Results in the Future (Appendix 4E item 14.6)

Refer to the attached Market Announcement.

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Car Parking Technologies Limited and its Controlled Entities

12. Controlled Entities Acquired or Disposed of (Appendix 4E item 10)

On 9 January 2012, Car Parking Technologies Limited acquired 100% of the issued share capital of Town and City Parking Limited, a United Kingdom based company which operates in the car park management business.

Details of the purchase consideration, the net assets acquired and goodwill are as follows:

	2012 $
Cash and cash equivalents Trade and other receivables Inventories Property, plant and equipment Bank overdraft Trade payables Provision for employee benefits Tax payable Borrowings Net identifiable assets acquired Purchase consideration: Cash paid Net asset adjustment (b) Contingent consideration (a) Total purchase consideration Goodwill on acquisition	3,001,484 6,880,829 165,359 3,118,692 (657,507) (12,358,670) (713,024) (18,196) (1,945,959)
	(2,526,992)
	2,886,834 (3,304,313) -
	(417,479)
	2,109,513

The goodwill is attributable to the expected growth in profitability through the roll out of technology and expected cost savings. It will not be deductible for tax purposes.

• a) Contingent consideration

In the event that certain EBITDA targets are achieved by Town and City Parking Limited, for the 12 months ending 31 December 2012 and the 12 months ending 31 May 2013, additional consideration of up to $11,092,014 may be payable in cash and ordinary shares in Car Parking Technologies Limited. Subject to movements in the exchange rate the maximum amount of cash payable would be $4,703,932 and the maximum number of ordinary shares issued would be 21,765,185.

The fair value of the contingent consideration payable has been estimated at nil based on a probability adjusted EBITDA forecast for Town and City Parking Limited.

b) Net asset adjustment

The Sale and Purchase Agreement provided that the first earn out would be adjusted post settlement to the extent that the completion net asset statement varies materially from an agreed balance sheet summary. In the event that the first earn out is not sufficient to recover the net asset adjustment the Sale and Purchase Agreement provides other mechanisms for recovering this amount.

c) Revenue and profit contribution

The acquired business contributed revenues of $10,209,322 and a net loss of $2,104,103 to the Group for the period from 9 January 2012 to 30 June 2012.

Acquisition related costs of $160,925 are included in other expenses in profit or loss and in operating cash flows in the statement of cash flows.

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Car Parking Technologies Limited and its Controlled Entities

13. Associates and Joint Venture Entities (Appendix 4E item 11)

The company did not acquire/dispose of interests in Joint Ventures or Associates.

14. Other Significant Information (Appendix 4E item 12)

An impairment charge of $11,299,431 was booked against goodwill in the Technology segment based on the lower than expected revenue for the year ended 30 June 2012. The impairment charge is calculated as the carrying value of the Technology cash generating unit (CGU) less its value in use.

Refer to the attached Market Announcement for other significant information.

15. Reconciliation of Cash Flows from Operating Activities

	Consolidated 2012 $ 2011 $
Reconciliation of Cash Flow from Operations with Loss after Income Tax Profit/(Loss) after income tax for the period Adjustments for: Gain/loss on disposal of plant and equipment Depreciation and amortisation expense Unrealised losses on financial assets through profit or loss Impairment of goodwill Impairment of trade receivables Share-based payments expense Change in operating assets and liabilities, net of effects from purchase of controlled entity: (Increase)/decrease in trade and term receivables (Increase)/decrease in inventories (Increase)/decrease in other current assets Increase/(decrease) in trade payables and accruals Increase/(decrease) in tax payable and deferred tax Net Cash outflow from operations	(17,151,635) (1,173,427) - 8,923 1,431,552 421,598 118,461 (699,115) 11,299,431 - 29,430 32,049 97,601 343,073 1,060,899 (176,857) (485,747) (378,854) 1,250,721 165,085 (1,420,250) (1,070,468) (452,546) 289,929
	(4,222,083) (2,238,064)

16. Audit Status (Appendix 4E item 15)

This report is based on accounts which are in the process of being audited.

17. Commentary on Results (Appendix 4E item 14)

Refer to the attached Market Announcement.

Cash at bank includes cash that Town and City Parking Limited has collected and counted on behalf of customers, the associated liability for this is included in Trade and other payables.

18. Significant Features of Operating Performance (Appendix 4E item 14.3)

Refer to the attached Market Announcement.

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