Annual report 2004 - Torotrak

notes to the accounts cont…21. Significant contractsUnder an agreement dated 6 July 1998 between the group and BTG International Ltd (‘BTG’) the group has agreed to pay a certainpercentage (not exceeding 5 per cent and subject to specified thresholds) of aggregate turnover to BTG. Turnover for the purposes of thisagreement is derived from exploitation of the group's intellectual property rights. Principal exclusions from the definition of turnover areincome derived from providing research, evaluation or consultancy services or any business not carried on by the group at the time ofdemerger.The agreement terminates on 30 June 2020. Total payments made to BTG under the terms of the agreement for the period since demergerare £10,564 (2003: £10,064).22. Reconciliation of operating loss to net cash outflow from operating activities31 March 31 March2004 2003£000 £000Operating loss (7,547) (7,144)Depreciation charge 602 721Amortisation charge 98 73Share award by Employee Share Trust 141 153Loss on sale of fixed assets 93 46Increase in debtors (13) (35)Decrease in creditors (169) (84)Net cash outflow from operating activities (6,795) (6,270)23. Analysis of changes in cash31 March 31 March2004 2003£000 £000As at 1 April - cash at bank and in hand 1,040 217As at 31 March - cash at bank and in hand 1,698 1,040Increase in cash 658 82324. Analysis of net fundsBalanceBalance atat 1 April31 March2003 Cashflow 2004£000 £000 £000Cash at bank and in hand 1,040 658 1,698Money market deposits 15,279 (5,248) 10,031Net funds 16,319 (4,590) 11,72925. Reconciliation of net cash flow to movement in net funds31 March 31 March2004 2003£000 £000Increase in cash in the year 658 823Withdrawn from money market (5,248) (5,221)Movement in net funds in the period (4,590) (4,398)Net funds at 1 April 16,319 20,717Net funds at 31 March 11,729 16,31926. Financial instrumentsDetails of the group's treasury objectives and policies can be found in the finance director’s review on page 10. The group has no financialliabilities other than short term creditors. Disclosure dealt with in this note excludes short term debtors and creditors where permittedby FRS 13.The profile of the financial assets of the group was:31 March 31 March2004 2003£000 £000Cash 1,698 1,040Sterling cash deposits 10,031 15,27911,729 16,319The sterling cash deposits comprise deposits placed on money markets at call and terms up to six months. The weighted average interestrate on the deposits is 3.66% (2003: 3.52%) and the weighted average time for which the rate is fixed is 3.1 months (2003: 3.1 months).27. Subsidiary undertakingsThe subsidiary undertakings of the company at 31 March 2004, all of which are wholly owned and incorporated in Great Britain andregistered in England and Wales, are as follows:Class of capitalPrincipal activityTorotrak Group Ltd Ordinary Intermediate holding companyTorotrak (Holdings) Ltd Ordinary Commercialisation of infinitely variabletransmission technologyTorotrak (Development) Ltd Ordinary Research and development of infinitely variabletransmissionsTorotrak (Property) Ltd Ordinary Ownership of land & buildingsTorotrak (Trustee) Ltd Ordinary Trustee of shares held under the Share Incentive Plan(formerly All Employee Share Ownership Plan)The investments in Torotrak Group Ltd and Torotrak (Trustee) Ltd are held by the company. The investments in all other subsidiaries areheld through Torotrak Group Ltd.38 Torotrak annual report & accounts 2004 Torotrak annual report & accounts 2004 39