Cardpoint Limited

 

Consolidated Financial Statements

 

Year Ended 30 September 2012

 

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CONTENTS

 

 

 

 

 

 

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DIRECTORS AND OTHER INFORMATION

 

 

 

 

 

 

 

 

Secretary and Registered Office

 

Mike Keller

Davidson House

Gadbrook Park

Northwich

Cheshire

CW9 7TW

 

 

Company registration number: 4098226

 

 

 

 

Auditors

 

PricewaterhouseCoopers

Chartered Accountants and Statutory Audit Firm

One Spencer Dock

North Wall Quay

Dublin  1

 

 

 

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REPORT OF INDEPENDENT AUDITORS TO THE BOARD OF DIRECTORS OF CARDPOINT LIMITED

 

In our opinion, the accompanying consolidated balance sheet and the related consolidated profit and loss accounts and cash flow statement present fairly, in all material respects, the financial position of Cardpoint Limited at 30 September 2012 and the results of its operations and its cash flows for the year ended 30 September 2012 in conformity with accounting principles generally accepted in the United Kingdom.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audit.  We conducted our audit of these statements in accordance with the auditing standards generally accepted in the United States of America.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.

 

Accounting principles generally accepted in the United Kingdom vary in certain significant respects from accounting principles generally accepted in the United States of America.  Information relating to the nature of such differences is presented in note 25 to these consolidated financial statements.

 

 

 

 

 

PricewaterhouseCoopers

Dublin, Ireland

 

15 October 2013

 

 

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The results disclosed above relate entirely to continuing operations.

 

The group has no recognised gains and losses other than those included in the profit and loss account and therefore no separate statement of total recognised gains and losses has been prepared.

 

There is no material difference between the profit on ordinary activities before taxation and the profit for the period stated above and their historical cost equivalents.

 

The notes on pages 7 to 17 form part of these consolidated financial statements.

 

 

 

 

 

On behalf of the board

 

 

Mike Keller

 

 

Chris Brewster

 

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The notes on pages 7 to 17 form part of these consolidated financial statements.

 

 

The financial statements on pages 4 to 17 were approved by the board of directors on 15 October 2013 and were signed on its behalf by:

 

 

Mike Keller

 

 

Chris Brewster

 

 

Company Registered No:  4098226

 

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The notes on pages 7 to 17 form part of these consolidated financial statements.

 

 

 

 

 

On behalf of the board

 

 

Mike Keller

 

 

Chris Brewster

 

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1Accounting policies

 

Basis of preparation

These consolidated financial statements include the results of the company and its subsidiaries ("the group") for the year to 30 September 2012.

 

The consolidated financial statements have been prepared under the historical cost convention, on a going concern basis and in accordance with generally accepted accounting principles in the United Kingdom.

 

The group's accounting policies are set out below.

 

Basis of consolidation

The consolidated financial statements incorporate the company and all of its subsidiary undertakings.  A subsidiary undertaking is consolidated by reference to whether the company controls the management of the affairs of the related entity, unless the subsidiary is held temporarily exclusively with a view to subsequent sale.

 

The results of all of the group’s undertakings are prepared to the group’s financial year end.  The subsidiaries are listed at note 12.

 

The identifiable assets and liabilities of the acquired entities are included in the consolidated financial statements at their fair value at the date of acquisition.  The difference between the fair value and the cost of acquisition is recognised as goodwill or negative goodwill.  They are measured at fair values that reflect the conditions at the date of the acquisition.  The cost of acquisition is the amount of cash or cash equivalents paid and the fair value of other purchase consideration, including contingent consideration, given by the acquirer, together with the associated transaction expense.

 

The results of subsidiaries acquired are included in the consolidated profit and loss account from the date of acquisition.  The results of the subsidiary undertakings disposed of are included in the consolidated profit and loss account up to the date that control passes.

 

Inter-company transactions and balances between group companies are eliminated.  Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group.

 

Foreign currency translation

 

(a)  Functional and presentation currency

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 company operates (‘the functional currency’).  The consolidated financial statements are presented in British Pounds Sterling ("£"), which is the company’s functional and the group’s presentation currency.

 

(b)  Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured.  Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the consolidated profit and loss account.

 

Foreign exchange gains and losses are presented in the consolidated profit and loss account within ‘Net operating expenses’.

 

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1Accounting policies - continued

 

Foreign currency translation – continued

 

(c)  Group companies

The results and financial position of all the group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

 

 

Turnover

Turnover consists of transaction fees and other sundry income receivable from its estate of automated teller machines after eliminating sales within the group.  Turnover arising from transaction fees is exempt from value added tax and turnover from sundry income is stated net of value added tax.  The group recognises turnover when it can be reliably measured and when it is probable that future economic benefits will flow to the company.

 

Turnover is recognised in the period earned by rendering of services.

 

Cost of sales

Cost of sales consists of commissions due to hosts, cash replenishment costs, processing costs, cost of cash, phone costs and alarms and other cost of sales.

 

Tangible fixed assets and depreciation

Property, plant and equipment are stated at historical cost being, expenditure directly attributable to the acquisition of the asset, less accumulated depreciation.

 

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably.  The carrying amount of the replaced part is derecognised.  All other repairs and maintenance are charged to the consolidated profit and loss account during the financial period in which they are incurred.

 

The charge for depreciation is calculated to write down the cost of property, plant and equipment to their estimated residual values by equal annual installments over their expected useful lives, which are as follows:

 

 

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

 

The assets’ carrying amount is written down immediately to its recoverable amount if the assets' carrying amount is greater than its estimated recoverable amount.

 

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the consolidated profit and loss account.

 

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1Accounting policies - continued

 

Goodwill

Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree.  Goodwill is being amortised over a period of five years, being its estimated useful life.

 

Impairment assessment of tangible and intangible fixed assets

Tangible and intangible fixed assets held and used by the group are reviewed for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable.  If the carrying amount of the asset exceeds the recoverable amount, an impairment loss will be recorded.  The amount of the impairment loss is measured as the amount by which the carrying amount of the asset exceeds its recoverable amount and is recorded in the consolidated profit and loss account.

 

Stocks

Stocks are stated at the lower of cost and net realisable value, after making allowance for obsolete and slow moving items.

 

Cost is the invoiced price of the stock.  Net realisable value is based on estimated selling price, less further costs expected to be incurred to completion and disposal.

 

Taxation

The tax expense for the period comprises current and deferred tax.  Tax is recognised in the consolidated profit and loss account and is calculated on the basis of the tax laws enacted or substantively enacted in the countries where group companies operate and generate taxable income.  Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation.  It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

 

Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.  Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

 

Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

 

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 either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

 

Contributions to pension schemes

The group operates a defined contribution scheme.    The pension costs charged in the consolidated profit and loss account represents the amount of the contributions payable to the schemes in respect of the accounting period.

 

Leased assets

Assets held under finance leases, which confer rights and obligations similar to those attached to owned assets, are capitalised as tangible assets and are depreciated over the shorter of the lease terms and their useful lives.  The capital elements of future lease obligations are recorded as liabilities, while the interest elements are charged to the consolidated profit and loss account over the period of the leases to produce a constant rate of charge on the remaining balance of liability.

 

All other leases are operating leases.  Rentals under operating leases are charged on a straight-line basis over the lease term.

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2Going concern

 

The directors, after making enquiries and taking into account the group’s financial position and finance available from the parent undertaking, have a reasonable expectation that the group has adequate resources to enable it to continue to meet its liabilities as they fall due for the foreseeable future and the going concern basis has been adopted in preparing these accounts.

 

 

 

 

 

 

 

During the year there was a credit arising through the reversal of the management charges that were over charged in prior periods.

 

 

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8Tax on profit on ordinary activities - analysis at charge in year - continued

The tax for the period is lower than the standard effective rate of corporation tax in the UK for the year ended 30 September 2012 of 25%.  The differences are explained below:

 

 

A number of changes to the UK corporation tax system were introduced, including a change in the UK main corporation tax rate from 26% to 24%, effective from 1 April 2012.

 

In addition to the changes in rates of corporation tax disclosed above, further changes to the UK corporation tax rates were announced in the 2012 Autumn Statement and the March 2013 Budget.  These include further reductions to the main rate to reduce the rate to 21% from 1 April 2014 and to 20% from 1 April 2015.  These changes had not been substantively enacted at the balance sheet date and, therefore, are not reflected in these consolidated financial statements.

 

 

9Deferred taxation

 

The group has a potential deferred tax asset, which has not been recognised in the financial statements, as set out below.  This asset will be recoverable to the extent that sufficient trading profits arise in the future.

 

 

 

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An impairment charge of £506,000 has been recorded this year against ATM and ATM installation costs incurred on machines that were removed from service during the year.

 

 

 

The goodwill at 30 September 2012 arose on the acquisition of Omnicash in April 2011.  The goodwill is being amortised over five years.

 

 

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12Investments in subsidiary undertakings

 

Cardpoint Limited had interests in the following subsidiary undertakings as at 30 September 2012:

 

 

 

 

 

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Amounts owed to and from group undertakings are unsecured, interest free and repayable on demand. 

 

Loans due to group undertakings are unsecured, interest bearing and have no fixed date of repayment.

 

These are amounts due to/from group undertakings outside the Cardpoint Limited Group.

 

 

 

The share capital of the company was pledged as security to the group's banking syndicate led by RBS, in return for the group's banking facilities extended to Prize Holdings 4 S.á.r.l.  See note 23.

 

 

 

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22Ultimate parent undertaking

 

At 30 September 2012, the group’s immediate parent undertaking was Payzone Ventures Limited, a company incorporated in the United Kingdom.

 

The group’s ultimate parent undertaking and controlling party was Prize Holdings 1 S.á.r.l, a company incorporated in Luxembourg, which is the parent undertaking of the largest and smallest group to consolidate these financial statements. Copies of Prize Holdings 1 S.á.r.l consolidated financial statements may be obtained from 2, Rue des Dahlias, L-1411 Luxembourg, Grand-Duchy of Luxembourg.

 

 

23Restricted cash

 

At 30 September 2012, restricted cash of £5,485,000 relates to balances held on behalf of certain creditors.

 

 

24Subsequent events

 

On 7 August 2013, Cardtronics, a global ATM provider, acquired Cardpoint Limited.  As a result Cardtronics Inc., a company incorporated in the United States, became the group's ultimate parent undertaking and controlling party.

 

 

25Summary of Significant Differences Between Accounting Principles Generally Accepted in the United Kingdom and Accounting Principles Generally Accepted in the United States

 

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United Kingdom (UK GAAP).  Such principles differ in certain respects from generally accepted accounting principles in the United States (US GAAP).  A summary of principal differences applicable to the group is set out below:

 

Identifiable Intangible Assets

Under UK GAAP, identifiable intangible assets are not required to be separately identified and recorded on a Company’s balance sheet in connection with a business combination.  Additionally under UK GAAP, goodwill is amortized over an estimated period of a time on a straight line basis.  Under US GAAP, identifiable intangible assets are required to be separately identified and determined to be indefinite-lived or definite-lived subject to amortization over an estimated useful life using a systematic and rational method to match the pattern of use of the asset.  Under US GAAP, goodwill is not amortized, but instead is tested at least annually for impairment or more frequently as events may trigger a need for an impairment analysis.  Identifiable infinite-lived intangible assets are also required to be tested for impairment under US GAAP at least annually or more frequently as events may trigger a need for an impairment analysis.

 

 

26Approval of financial statements

 

The directors approved the financial statements on 15 October 2013.

 

 

 

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