Racelogic Limited - Limited company accounts 17.3

REGISTERED NUMBER: 02743719 (England and Wales)

Group Strategic Report, Report of the Directors and

Consolidated Financial Statements for the Year Ended 30 September 2017

for

Racelogic Limited

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Consolidated Income Statement

7

Consolidated Other Comprehensive Income

8

Consolidated Balance Sheet

9

Company Balance Sheet

10

Consolidated Statement of Changes in Equity

11

Company Statement of Changes in Equity

12

Consolidated Cash Flow Statement

13

Notes to the Consolidated Cash Flow Statement

14

Notes to the Consolidated Financial Statements

15

DIRECTORS:

J A D Thomas

H F Thuillier

C Smith

K Bursnall

Mrs A J Clifton

G M Mackie

I M Jones

SECRETARY:

M J Marshall

REGISTERED OFFICE:

Swan Business Park

Unit 10 -11 Osier Way

Buckingham

MK18 1TB

REGISTERED NUMBER:

02743719 (England and Wales)

SENIOR STATUTORY AUDITOR:

Nicola Beeson

AUDITORS:

NB Consulting Limited

Chartered Accountants and Statutory Auditors

2 Foxglove Close

Buckingham

MK18 1FU

The directors present their strategic report of the company and the group for the year ended 30 September 2017.

REVIEW OF BUSINESS

The group and company's principal activity during the year continued to be the design and manufacture of electronic

systems for the automotive, motorsport and satellite receiver industries.

The directors are pleased with the performance of the business which is both a reflection of the increased depth of the

product range, the improving global economic climate and the contribution made by our German, US and Chinese

offices. The weakness of the pound against the euro and the dollar also contributed to both revenue and profit growth in

our export markets.

The core automotive business continues to grow on the back of increased demand for the testing of Advanced Driver

Assistance Systems (ADAS) and the next generation of autonomous vehicles from both the major car and commercial

vehicle brands and new technology companies entering the autonomous market.

Our latest Wideband LabSat product has also been well received by the GPS receiver market and showed strong sales

during the year. By the end of the year LabSat Wideband sales accounted for 35% of LabSat sales.

We consider our key financial performance indicators are those that communicate the financial performance and

increasing strength of the company. These indicators are turnover, gross profit margins and nett profits. Year on year

group turnover rose by 24.1% whist our gross margin remained steady at 66%. Net profits before tax (EBIT) also

increased by 20.8% to £3,968,446.

The group and company had a sound trading period and entered the new financial year in a strong and stable position.

On this basis it is considered appropriate to prepare the accounts on an ongoing basis.

PRINCIPAL RISKS AND UNCERTAINTIES

All comments regarding future plans reflect the knowledge and information available to the directors as at the date of

this report and may be subject to the effect of unforeseen events outside of their control. These principally consist of the

stability of the global automotive market, a worldwide shortage of passive electronic components and the continuing

availability of satellites for navigation purposes. Brexit and its impact on tariffs for global and european trade could also

affect gross profits.

RESEARCH AND DEVELOPMENT

The next financial year will see the launch of VBOX4, VBOX Touch and the VBOX Indoor Positioning System.

Recruitment of additional hardware designers and software developers during the next fiscal year will see continued

investment in research and development.

ON BEHALF OF THE BOARD:

G M Mackie - Director

8 June 2018

The directors present their report with the financial statements of the company and the group for the year ended

30 September 2017.

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of the design and manufacture of electronic systems

for the automotive, motorsport and satellite receiver industries.

DIVIDENDS

During the year the following interim dividends were paid:

25/10/2016 - £25,927

15/12/2016 - £1,250,000

5/4/2017 - £1,500,000

19/04/2017 £1,000,000

The directors recommend that no final dividend be paid on either the Ordinary or B Ordinary shares.

The total distribution of dividends for the year ended 30 September 2017 will be £3,775,927. £3,664,537 on Ordinary

shares and £111,390 on B Ordinary shares.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 October 2016 to the date of this

report.

J A D Thomas

H F Thuillier

C Smith

K Bursnall

Mrs A J Clifton

G M Mackie

I M Jones

Other changes in directors holding office are as follows:

L M Speth - resigned 4 November 2016

DISCLOSURE IN THE STRATEGIC REPORT

Future developments and details of research and development as required under Schedule 7 of the Companies Act 2006

to be disclosed in the Directors' Report are set out in the Strategic Report in accordance with section 414(C) of the

Companies Act 2006.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial

statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors

have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting

Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The

Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not

approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the

company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the

directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the

company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the

company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006.

They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable

steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act

2006) of which the group's auditors are unaware, and each director has taken all the steps that he or she ought to have

taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the

group's auditors are aware of that information.

AUDITORS

The auditors, NB Consulting Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

G M Mackie - Director

8 June 2018

Opinion

We have audited the financial statements of Racelogic Limited (the 'parent company') and its subsidiaries (the 'group')

for the year ended 30 September 2017 on pages seven to twenty five. The financial reporting framework that has been

applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting

Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom

Generally Accepted Accounting Practice).

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the

Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those

matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent

permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's

members as a body, for our audit work, for this report, or for the opinions we have formed.

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 30 September 2017 and of the group's profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.

Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the

financial statements section of our report. We are independent of the group in accordance with the ethical requirements

that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have

fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we

have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to

you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group

Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the

Auditors thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of

assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing

so, consider whether the other information is materially inconsistent with the financial statements or our knowledge

obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we

conclude that there is a material misstatement of this other information, we are required to report that fact. We have

nothing to report in this regard.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the

course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the

Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you

if, in our opinion:

-	adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, the directors are responsible

for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such

internal control as the directors determine necessary to enable the preparation of financial statements that are free from

material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's

ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going

concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease

operations, or have no realistic alternative but to do so.

Our responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from

material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs

(UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic

decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting

Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Nicola Beeson (Senior Statutory Auditor)

for and on behalf of NB Consulting Limited

Chartered Accountants and Statutory Auditors

2 Foxglove Close

Buckingham

MK18 1FU

8 June 2018

TURNOVER

3

17,013,176

13,711,593

Cost of sales

5,833,120

4,460,965

GROSS PROFIT

11,180,056

9,250,628

Administrative expenses

7,211,610

5,964,599

OPERATING PROFIT

5

3,968,446

3,286,029

Interest receivable and similar income

3,289

-

PROFIT BEFORE TAXATION

3,971,735

3,286,029

Tax on profit

6

541,264

439,405

PROFIT FOR THE FINANCIAL YEAR

3,430,471

2,846,624

Profit attributable to:

Owners of the parent

3,430,471

2,846,624

PROFIT FOR THE YEAR

3,430,471

2,846,624

OTHER COMPREHENSIVE INCOME/(LOSS)

Currency translation differences

164,134

(47,717

)

Income tax relating to other comprehensive income/(loss)

-

-

OTHER COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR, NET OF INCOME TAX

164,134

(47,717

)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

3,594,605

2,798,907

Total comprehensive income attributable to:

Owners of the parent

3,594,605

2,798,907

FIXED ASSETS

Intangible assets

9

-

147,909

Tangible assets

10

1,647,820

1,690,996

Investments

11

-

-

1,647,820

1,838,905

CURRENT ASSETS

Stocks

12

1,678,145

1,458,561

Debtors

13

1,697,983

1,595,311

Cash at bank

2,320,651

1,967,453

5,696,779

5,021,325

CREDITORS

Amounts falling due within one year

14

1,045,274

459,016

NET CURRENT ASSETS

4,651,505

4,562,309

TOTAL ASSETS LESS CURRENT LIABILITIES

6,299,325

6,401,214

PROVISIONS FOR LIABILITIES

17

27,000

39,000

NET ASSETS

6,272,325

6,362,214

CAPITAL AND RESERVES

Called up share capital

18

111

109

Share premium

19

573,235

481,804

Capital redemption reserve

19

10

10

Non Distributable Reserves

19

86,106

(78,028

)

Retained earnings

19

5,612,863

5,958,319

SHAREHOLDERS' FUNDS

6,272,325

6,362,214

The financial statements were approved by the Board of Directors on 8 June 2018 and were signed on its behalf by:

G M Mackie - Director

FIXED ASSETS

Intangible assets

9

-

-

Tangible assets

10

1,469,165

1,562,937

Investments

11

21,789

620

1,490,954

1,563,557

CURRENT ASSETS

Stocks

12

1,621,848

1,316,836

Debtors

13

2,210,189

2,228,530

Cash at bank

2,027,432

1,866,712

5,859,469

5,412,078

CREDITORS

Amounts falling due within one year

14

948,849

367,662

NET CURRENT ASSETS

4,910,620

5,044,416

TOTAL ASSETS LESS CURRENT LIABILITIES

6,401,574

6,607,973

PROVISIONS FOR LIABILITIES

17

27,000

39,000

NET ASSETS

6,374,574

6,568,973

CAPITAL AND RESERVES

Called up share capital

18

111

109

Share premium

19

573,235

481,804

Capital redemption reserve

19

10

10

Retained earnings

19

5,801,218

6,087,050

SHAREHOLDERS' FUNDS

6,374,574

6,568,973

Company's profit for the financial year

3,490,095

2,908,812

The financial statements were approved by the Board of Directors on 8 June 2018 and were signed on its behalf by:

G M Mackie - Director

Called up

share

Retained

Share

capital

earnings

premium

£

£

£

Balance at 1 October 2015

108

5,143,780

392,093

Changes in equity

Issue of share capital

1

-

89,711

Dividends

-

(2,032,085

)

-

Total comprehensive income

-

2,846,624

-

Balance at 30 September 2016

109

5,958,319

481,804

Changes in equity

Issue of share capital

2

-

91,431

Dividends

-

(3,775,927

)

-

Total comprehensive income

-

3,430,471

-

Balance at 30 September 2017

111

5,612,863

573,235

Capital

Non

redemption

Distributable

Total

reserve

Reserves

equity

£

£

£

Balance at 1 October 2015

10

(30,311

)

5,505,680

Changes in equity

Issue of share capital

-

-

89,712

Dividends

-

-

(2,032,085

)

Total comprehensive income

-

(47,717

)

2,798,907

Balance at 30 September 2016

10

(78,028

)

6,362,214

Changes in equity

Issue of share capital

-

-

91,433

Dividends

-

-

(3,775,927

)

Total comprehensive income

-

164,134

3,594,605

Balance at 30 September 2017

10

86,106

6,272,325

Called up

Capital

share

Retained

Share

redemption

Total

capital

earnings

premium

reserve

equity

£

£

£

£

£

Balance at 1 October 2015

108

5,210,323

392,093

10

5,602,534

Changes in equity

Issue of share capital

1

-

89,711

-

89,712

Dividends

-

(2,032,085

)

-

-

(2,032,085

)

Total comprehensive income

-

2,908,812

-

-

2,908,812

Balance at 30 September 2016

109

6,087,050

481,804

10

6,568,973

Changes in equity

Issue of share capital

2

-

91,431

-

91,433

Dividends

-

(3,775,927

)

-

-

(3,775,927

)

Total comprehensive income

-

3,490,095

-

-

3,490,095

Balance at 30 September 2017

111

5,801,218

573,235

10

6,374,574

Cash flows from operating activities

Cash generated from operations

1

4,376,265

3,086,749

Tax paid

(287,342

)

(383,983

)

Net cash from operating activities

4,088,923

2,702,766

Cash flows from investing activities

Purchase of tangible fixed assets

(256,547

)

(205,857

)

Sale of tangible fixed assets

36,909

497

Interest received

3,289

-

Net cash from investing activities

(216,349

)

(205,360

)

Cash flows from financing activities

Share issue

93,139

95,944

Share buyback

1,706

(6,232

)

Equity dividends paid

(3,775,927

)

(2,032,085

)

Net cash from financing activities

(3,681,082

)

(1,942,373

)

Increase in cash and cash equivalents

191,492

555,033

Cash and cash equivalents at beginning of year

2

1,967,453

1,475,288

Effect of foreign exchange rate changes

161,706

(62,868

)

Cash and cash equivalents at end of year

2

2,320,651

1,967,453

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

30.9.17

30.9.16

£

£

Profit before taxation

3,971,735

3,286,029

Depreciation charges

411,596

389,622

Profit on disposal of fixed assets

(1,857

)

-

Finance income

(3,289

)

-

4,378,185

3,675,651

Increase in stocks

(219,584

)

(192,491

)

Increase in trade and other debtors

(137,052

)

(227,445

)

Increase/(decrease) in trade and other creditors

354,716

(168,966

)

Cash generated from operations

4,376,265

3,086,749

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these

Balance Sheet amounts:

Year ended 30 September 2017

30.9.17

1.10.16

£

£

Cash and cash equivalents

2,320,651

1,967,453

Year ended 30 September 2016

30.9.16

1.10.15

£

£

Cash and cash equivalents

1,967,453

1,475,288

1.	STATUTORY INFORMATION

Racelogic Limited is a private company, limited by shares , registered in England and Wales. The company's

registered number and registered office address can be found on the General Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Basis of consolidation

The consolidated accounts incorporate the financial statements of Racelogic Limited and its subsidiary

undertakings as at 30 September 2017 using the aquisition method of accounting. Racelogic Gmbh has a

non-coterminous year end with its parent company and fellow subsidiary, Racelogic USA. It has been

consolidated based on management accounts prepared to 30 September 2017.

Significant judgements and estimates

The preparation of the financial statements requires management to make judgements, estimates and assumptions

that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for

revenues and expenses during the year. However, the nature of estimation means that the actual outcomes could

differ from those estimates. The estimates and assumptions are reviewed on an ongoing basis. Any revisions to

estimates are recognised in the period of the revision and future periods if applicable.

There are not considered to be any key sources of estimation uncertainty that have a significant effect on the

amounts recognised in either the Group or company financial statements.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates,

value added tax and other sales taxes.

Revenue is recognised when the significant risks and rewards of ownership have been passed to the buyer, the

Group retains no continuing involvement or control over the goods and it is probable that the future economic

benefit of the goods will flow to the entity.

Goodwill

Goodwill is the excess of the purchase consideration over the fair value of the Group's interest in the identifiable

net assets, net liabilities and contingent liabilities acquired.

Goodwill is measured at cost less accumulated amortisation and any accumulated impairment losses.

Amortisation is charged so as to allocate the cost of goodwill on a straight line basis over its estimated useful life

of three years.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost

less any accumulated amortisation and any accumulated impairment losses.