Cardpoint Limited
Consolidated Financial Statements
Year Ended 30 September 2012
Cardpoint Limited | Consolidated Financial Statements 2012 |
CONTENTS
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DIRECTORS AND OTHER INFORMATION | 2 |
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INDEPENDENT AUDITORS' REPORT | 3 |
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CONSOLIDATED PROFIT AND LOSS ACCOUNT | 4 |
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CONSOLIDATED BALANCE SHEET | 5 |
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CONSOLIDATED CASH FLOW STATEMENT | 6 |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 7-17 |
DIRECTORS AND OTHER INFORMATION
Board of Directors | Solicitors |
| |
Mike Keller | Weightmans LLP |
Chris Brewster | 100 Old Hall Street |
| Liverpool |
| L3 9QJ |
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
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
Cardpoint Limited
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Year Ended 30 September 2012
| Notes | | 2012 £’000 |
| | | |
Turnover | 3 | | 64,697 |
| | | |
Cost of sales | | | (37,748) |
| | | |
Gross profit | | | 26,949 |
| | | |
Net operating expenses | | | (21,872) |
| | | |
Other operating income | 5 | | 3,154 |
| | | |
Operating profit | | | 8,231 |
| | | |
Net interest | 7 | | (2,823) |
| | | |
Profit on ordinary activities before taxation | 4 | | 5,408 |
| | | |
Tax on profit on ordinary activities | 8 | | (392) |
| | | |
Profit for the financial year | | | 5,016 |
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
Cardpoint Limited
CONSOLIDATED BALANCE SHEET
As at 30 September 2012
| Notes | | 2012 £’000 |
| | | |
Fixed assets | | | |
Tangible assets | 10 | | 11,118 |
Intangible assets | 11 | | 6,615 |
| | | 17,733 |
| | | |
Current assets | | | |
Stock | | | 139 |
Amounts due from parent group | 15 | | 29,137 |
Other debtors | 13 | | 6,654 |
Restricted cash | 23 | | 5,485 |
Cash at bank and in hand | | | 696 |
| | | 42,111 |
| | | |
Creditors - amounts falling due within one year: | | | |
Amounts due to parent group | 15 | | (64,900) |
Other creditors | 14 | | (15,042) |
| | | (79,942) |
| | | |
Net current liabilities | | | (37,831) |
| | | |
Net liabilities | | | (20,098) |
| | | |
Capital and reserves | | | |
Called up share capital | 16 | | 5,804 |
Share premium account | 17 | | 97,969 |
Exchange revaluation reserve | 17 | | 91 |
Profit and loss account | 17 | | (123,962) |
| | | |
Shareholders’ deficit | 18 | | (20,098) |
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
Cardpoint Limited
CONSOLIDATED CASH FLOW STATEMENT
Year Ended 30 September 2012
| | | |
| Notes | | 2012 £’000 |
| | | |
Net cash inflow from operating activities | 19 | | 10,190 |
| | | |
Taxation | | | (720) |
Interest received | | | 1 |
Interest paid | | | (60) |
Inflow from operating activities | | | 9,411 |
| | | |
Investing activities | | | |
Purchase of tangible fixed assets | 10 | | (5,065) |
Proceeds from sale of tangible fixed assets | | | 33 |
Acquisition at subsidiaries - deferred consideration paid | | | (1,000) |
Acquisition of customer contracts | | | (3,000) |
Net cash outflow from investing activities | | | (9,032) |
| | | |
Financing activities | | | |
Finance lease payments | | | (339) |
Net cash outflow from financing activities | | | (339) |
| | | |
Net increase in net cash | | | 40 |
Cash and cash equivalents at beginning of period | | | 656 |
| | | |
Net cash at end of year | | | 696 |
The notes on pages 7 to 17 form part of these consolidated financial statements.
On behalf of the board
Mike Keller
Chris Brewster
Cardpoint Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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’.
Cardpoint Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
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:
· | Assets and liabilities for each consolidated balance sheet presented are translated at the closing rate prevailing at the end of the relevant reporting period. |
· | Income and expenses for each consolidated profit and loss account are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and |
· | all resulting exchange differences are recognised directly in reserves (“Exchange Revaluation reserve”). |
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:
ATMs | 5 to 7 years |
Fixtures, fittings and equipment | rates between 20% and 33.3% |
Computer equipment | 33.3% |
Motor vehicles | 33.3% |
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.
Cardpoint Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
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.
Cardpoint Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
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.
3Turnover | | 2012 £’000 |
| | |
The turnover is attributable to the principal activity of the group. | | |
| | |
Geographical analysis of turnover: | | |
United Kingdom | | 56,198 |
Germany | | 8,499 |
| | 64,697 |
4Profit on ordinary activities before taxation | | 2012 £’000 |
| | |
The profit on ordinary activities before taxation is stated after charging: | | |
| | |
Deprecation of fixed assets (note 10) | | 4,883 |
Amortisation of goodwill (note 11) | | 3,175 |
Operating lease rentals: | | |
-land and buildings | | 336 |
Impairment of tangible fixed assets (note 10) | | 506 |
Loss on disposal of fixed assets | | 362 |
5Other operating income | | 2012 £’000 |
| | |
Reversal of management charge | | 3,154 |
During the year there was a credit arising through the reversal of the management charges that were over charged in prior periods.
Cardpoint Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
6Staff costs and employees information | | 2012 £’000 |
Staff costs for the group during the year: | | |
| | |
Wages and salaries | | 6,618 |
Social security costs | | 727 |
Defined contribution pension cost | | 48 |
| | 7,393 |
| | |
| | 2012 Number |
| | |
The average number of employees during the year was: | | |
| | |
Administration and management | | 173 |
7Net interest | | 2012 £’000 |
| | |
Interest payable on intercompany balances | | 2,764 |
Interest payable on finance leases | | 32 |
Bank charges | | 28 |
Total interest and similar charges payable | | 2,824 |
| | |
Interest receivable | | (1) |
Net interest | | 2,823 |
| | |
8Tax on profit on ordinary activities - analysis at charge in year | | 2012 £’000 |
| | |
Current tax: | | |
United Kingdom corporation tax at 24% | | - |
| | |
Foreign tax: | | |
Corporation tax | | 298 |
| | |
Other current tax: | | |
Under provision of corporation tax in prior year | | 94 |
| | 392 |
Cardpoint Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
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:
| | 2012 £’000 |
| | |
Profit on ordinary activities before taxation | | 5,408 |
| | |
Profit on ordinary activities before taxation multiplied by standard rate of corporation tax in the UK of 25% | | 1,352 |
| | |
Effect of: | | |
Expenses not deductible for tax purposes | | 1,324 |
Capital allowances less than/(in excess of) depreciation | | 639 |
Other short term timing differences | | 78 |
Group relief | | (510) |
Utilisation of tax losses forward | | (2,635) |
Adjustment in respect of foreign tax rates | | 50 |
Current tax charge for the year | | 298 |
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.
| | 2012 £’000 |
| | |
Capital allowances – tax effect | | 10,279 |
Trading losses – tax effect | | 10,474 |
Short term timing differences | | 168 |
| | 20,921 |
Cardpoint Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
10Tangible fixed assets | | ATMs and other equipment £'000 |
Cost | | |
At 1 October 2011 | | 73,344 |
Additions | | 5,065 |
Disposals | | (2,093) |
Exchange adjustments | | (1,513) |
At 30 September 2012 | | 74,803 |
| | |
Accumulated depreciation | | |
At 1 October 2011 | | 61,369 |
Charge for the year (note 4) | | 4,883 |
Impairment charge for the year (note 4) | | 506 |
Disposals | | (1,698) |
Exchange adjustments | | (1,375) |
At 30 September 2012 | | 63,685 |
| | |
Net book amount | | |
At 30 September 2012 | | 11,118 |
At 1 October 2011 | | 11,975 |
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.
11Intangible assets | | Goodwill 2012 €'000 |
Cost | | |
At 1 October 2011 and 30 September 2012 | | 171,311 |
| | |
Accumulated amortisation | | |
At 1 October 2011 | | (161,521) |
Charge for year (note 4) | | (3,175) |
At 30 September 2012 | | (164,696) |
| | |
Net book value | | |
At 30 September 2012 | | 6,615 |
At 1 October 2011 | | 9,790 |
The goodwill at 30 September 2012 arose on the acquisition of Omnicash in April 2011. The goodwill is being amortised over five years.
Cardpoint Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
12Investments in subsidiary undertakings
Cardpoint Limited had interests in the following subsidiary undertakings as at 30 September 2012:
Name of subsidiary | Country of incorporation | Proportion held | Nature of business |
| | | |
Cardpoint Group Limited | United Kingdom | 100% | Intermediate holding company |
Cardpoint Remote Limited | United Kingdom | 100% | Ownership and operation of an independent estate of ATMs |
Moneybox Corporation Limited | United Kingdom | 100% | Ownership and operation of an independent estate of ATMs |
Cardpoint Technical Services Limited | United Kingdom | 100% | Maintenance and repair of ATMs |
Cardpoint Services Limited | United Kingdom | 100% | Ownership and operation of an independent estate of ATMs |
OmniCash Limited | United Kingdom | 100% | Ownership and operation of an independent estate of ATMs |
Moneybox Holdings Limited | United Kingdom | 100% | Intermediate holding company |
Moneybox Limited | United Kingdom | 100% | Intermediate holding company |
Cardpoint GmbH | Germany | 100% | Ownership and operation of an independent estate of ATMs |
Moneybox Deutschland GmbH | Germany | 100% | Ownership and operation of an independent estate of ATMs |
13Other debtors | | 2012 £’000 |
| | |
Trade debtors | | 81 |
Prepayments and accrued income | | 5,891 |
Other debtors | | 682 |
| | 6,654 |
Cardpoint Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
14Creditors: amounts falling due within one year | | 2012 £’000 |
| | |
Finance lease liabilities | | 275 |
Trade creditors | | 1,600 |
Restricted creditors | | 5,485 |
Corporation tax | | 274 |
Other taxes and social security | | 383 |
Accruals and deferred income | | 7,025 |
| | 15,042 |
15Amounts owed to/from parent group | | 2012 £’000 |
| | |
Intercompany debtors: | | |
Amounts owed by group undertakings | | 29,137 |
| | |
Intercompany creditors: | | |
Loan due to group undertakings | | 60,569 |
Amounts owed to group undertakings | | 4,331 |
| | 64,900 |
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.
16Called up share capital | | 2012 £’000 |
Authorised | | |
240,000,000 ordinary shares of 5p each | | 12,000 |
| | |
Allotted, called up and fully paid | | |
116,071,834 ordinary shares of 5p each | | 5,804 |
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.
| | | | | |
17Reserves | Share premium account £'000 | | Exchange revaluation reserve £'000 | | Profit and loss account £'000 |
| | | | | |
At 1 October 2011 | 97,969 | | 1,034 | | (128,978) |
Profit for the financial year | - | | - | | 5,016 |
Currency translation | - | | (943) | | - |
At 30 September 2012 | 97,969 | | 91 | | (123,962) |
Cardpoint Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
18Reconciliation of movements in shareholders' (deficit) | | 2012 £’000 |
| | |
Profit for the financial year | | 5,016 |
Currency translation | | (943) |
Opening shareholders’ (deficit) | | (24,171) |
Closing shareholders’ (deficit) | | (20,098) |
10 | | |
19Cash flow from operating activities | | 2012 £’000 |
| | |
Operating profit | | 8,231 |
Adjustments for: | | |
Deprecation of tangible fixed assets (note 10) | | 4,883 |
Goodwill amortisation (note 11) | | 3,175 |
Impairment of tangible fixed assets (note 10) | | 506 |
Loss on disposal of tangible fixed assets (note 4) | | 362 |
Other non-cash changes - foreign exchange gains on operating activities | | (806) |
Decrease in stock | | 52 |
Increase in debtors | | (640) |
Increase in creditors | | 1,602 |
Decrease in intercompany balances | | (7,175) |
Net cash inflow from continuing operations | | 10,190 |
| | |
20Leasing commitments | | 2012 Land and buildings £'000 |
| | |
The annual commitment under non-cancellable operating leases is as follows: | | |
| | |
Less than one year | | - |
Within two to five years | | 141 |
21Related party transactions | | 2012 €’000 |
The following transactions were carried out with related parties, being members of the Prize Holdings 1 S.á.r.l. group: | | |
| | |
(a) Purchases of services | | |
| | |
Group company (management services) | | 753 |
Group company (reversal of prior years’ management services) | | (3,154) |
| | (2,401) |
(b) Interest payable | | |
| | |
Group company | | 2,764 |
Cardpoint Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
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.
