Trafficmaster Plc
Martell House
University Way
Cranfield
Bedfordshire
MK43 0TR
www.trafficmaster .co.uk
Annual Report 
and Accounts
Year ended 31 December 2004
New challenges
New directions
TRAFFICMASTER ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004 PAGE TWO
TRAFFICMASTER ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004
Contents
Trafficmaster, the leading supplier of
digital traffic information and intelligent
navigation services, announces strong
growth in both turnover and profits in the
12 months ended 31 December 2004.
“Trafficmaster has made solid progress in 2004. The significant rise in both profits and
turnover underline the increasing acceptance of our products. In particular, Smartnav
has trebled the number of units sold, reflecting the consumer appetite for this
innovative product. With good momentum in our operating businesses, we are well
positioned to continue to deliver strong growth in 2005.”
Colin Walsh, Chairman of Trafficmaster Plc
3 Highlights
5 Chairman’s Statement
7 Chief Executive’s Statement
10 Board of Directors
12 Registered Office and Advisers
13 Directors’ Report
16 Directors’ Remuneration Report
20 Corporate Governance
22 Statement of Directors’ Responsibilities
23 Independent Auditors’ Report
24 Consolidated Profit and Loss Account
24 Consolidated Statement of Total
Recognised Gains and Losses
25 Consolidated Balance Sheet
26 Company Balance Sheet
27 Consolidated Cash Flow Statement
28 Notes to the Financial Statements
45 Notice of Annual General Meeting NEW CHALLENGES_NEW DIRECTIONS
PAGE THIRTEEN PAGE THREE
NEW CHALLENGES_NEW DIRECTIONS PAGE FOUR
TRAFFICMASTER ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004 NEW CHALLENGES_NEW DIRECTIONS
PAGE FIVE
Trafficmaster made very good progress in 2004, increasing revenues by 19.7% to
£36.6 million and significantly increased pre-tax profits from £0.5 million to £4.8
million. This strong financial performance was spread across the group, with over
125,000 customers now subscribing to our broad range of telematics services.
Each of our four operating divisions made good progress during 2004 with the
group achieving significant new contracts during the year . Specifically, we have
important new deals with Honda Motor Europe Limited and Transport for London
(TFL) in our traffic division, standard fit deals with Mitsubishi and Peugeot for
Smartnav and two large National account deals for our USA fleet-tracking
business, Teletrac.
Trafficmaster’s key markets have developed well in 2004. In particular, the in-car
navigation market has accelerated its growth with various new products stimulating
the development of the market. We believe that the outlook looks encouraging as
both motorists and motor manufacturers seek to make satellite navigation systems
commonplace within the car . 
2005 has brought new challenges and new prospects, however, I believe the
existing management team is well positioned to exploit the opportunities now
emerging in the various business divisions.
Colin Walsh
Chairman
22 April 2005
Chairman’s Statement PAGE SIX
TRAFFICMASTER ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004
Overall 2004 was a good year for Trafficmaster with strong growth in
the sales of Smartnav, our satellite navigation product, and of Fleet
Director, our USA fleet management product. We tripled the unit sales
of Smartnav and grew Fleet Director unit sales by 50%.
Our Subscription business continued to increase and recurring
subscriptions now form an important part of our business with
numbers increasing to 125,000 by the end of 2004. Recurring
subscriptions now form 31% of our revenues.  NEW CHALLENGES_NEW DIRECTIONS
PAGE SEVEN
Chief Executive’s Statement
Financial Results
The strategy of concentrating on
our four core areas - satellite
navigation, fleet management,
traffic information, and stolen
vehicle tracking, has resulted in
substantially improved results for
the period.
Revenues grew to £36.6 million
during the year representing an
increase of 19.7% over the 2003
figure of £30.6 million. This was
based on strong growth in
Smartnav revenues up 159%, and
Teletrac revenues up 27.6% in USA
dollars and 14.2% on a Sterling
basis. Revenues in the second half
of the year grew to £19.6 million
from £17.0 million in the first half.
Group operating profit from
continuing operations for the year
was £2.4 million, as compared with
a like for like profit of £0.5 million in
2003, after adjusting for the net
exceptional credits of £2.1m. Better
than anticipated trading in Q4
resulted in the operating profit
being ahead of the £2.2 million
referred to in our trading statement
of 17 December 2004. The supply
problem concerning Touchscreens
referred to in that statement was
resolved in December and we have
been able to meet customer
demand for this product since then. 
Profit before tax, which includes
£2.3 million relating to the discount
achieved on early settlement of the
Teletrac bonds, grew to £4.8 million
(2003: £550,000).
During the year we pre-purchased
£2.5 million of key components for
the new low cost in-vehicle unit to
secure economies of scale, as well
as investing £3.5 million in capital
expenditure and repaid the legacy
Teletrac bonds, which carried a
coupon rate of 9% at a cost of £3.5
million net of the share placing. As
a result, cash balances and short
term deposits fell to £1.4 million
from £7.3 million at December
2003. This level of investment will
not be repeated in 2005, during
which we expect to be cash
generative. 
At our forthcoming AGM we will ask
shareholders to consider
resolutions to apply for permission
to create distributable reserves by
writing off accumulated deficit
against the share premium account. Operational Results
Smartnav – 
Satellite Navigation Business
Smartnav sales tripled in 2004 to 27,600
and we ended the year with 22
manufacturers recommending the
product to their customers. Smartnav has
been fitted as standard on 11 models; this
is an important factor driving further
growth in the coming year . The Rover 75
standard fitment, whilst originally a
landmark deal for Trafficmaster, will not
now produce the results originally
envisaged in 2005 due to the
administrators being called into MG
Rover . As announced, the debt to
Trafficmaster was circa £540,000 at the
commencement of the administration.
The successful launch of the Touchscreen
product, which allows users to enter
routes via a small dashboard fitted
screen, was a significant factor in our
sales growth.
The increase in unit sales has led to an
increase in Smartnav operations and in
January we delivered over 350,000 routes
to our customers, nearly three times the
volume delivered in January 2004.
The satellite navigation market itself
developed substantially in the second half
of last year . Whilst we saw increasing
competition from hand held and PDA
based units, the growth of car based
navigation systems continued. We believe
Smartnav took a market share of over
20% of new units from a standing start
just 18 months earlier . 
We have continued to enhance the
product with numerous additional
features – Smartnav can now assist
motorists in dealing with new challenges
such as toll roads, congestion charges
and speed cameras, as well as the more
established problems like avoiding the
effects of increasing road congestion and
vehicle security. 
We continue to develop new services that
can be delivered using our platform. Over
the past six months we have been
working with Norwich Union on the
feasibility of a “Pay as You Drive”
insurance service based on the
Trafficmaster platform. This would not
only provide Trafficmaster’s Smartnav,
Trackstar and Fleetstar customers with
an attractive insurance option, but it will
also allow Norwich Union to take
advantage of the versatile Trafficmaster
platform in their “Pay as you Drive”
programme. 
During 2005, we will deliver a GPRS
version of the Smartnav product which
will enable users to get their routes more
quickly and economically, as well as
improving services to customers.
Trafficmaster also expects to benefit from
the lower data transfer costs. 
In 2005, we are aiming to add some of the
remaining car manufacturers to the list of
companies providing Smartnav to its
customers. We also expect to continue to
refine and enhance the product to provide
greater service and value to the customer . 
In order to maximise our position in the
rapidly developing navigation market we
have started to market Smartnav more
aggressively using the most cost-effective
and targeted media. In March and April,
for example, we will be advertising in
motorway service areas and car
magazines and will broadcast a
nationwide radio campaign on 
Classic FM. 
We are confident in Smartnav’s continued
growth potential. The product is well
positioned being highly differentiated from
competing navigation systems. Being an
off-board solution, its single button ease
of use and superior routing performance
provide a compelling reason to buy in
many segments of the user community
whilst the additional services that we
provide on the platform are simply not
possible using on-board systems. In
particular, we find that customers value
Trafficmaster’s speed camera warnings,
partial address searches, concierge
services, and stolen vehicle tracking
capability. 
Teletrac Inc – 
USA fleet management business
The revenue growth we saw in the first
half of 2004 continued throughout the
second half giving year on year growth 
of 27.6% in USA dollars and 14.2% 
on a sterling basis. Teletrac is now a
sizable operation with around 45,000
vehicles being monitored and over 10
million vehicle communications 
handled each day. 
The growth in revenues and profits has
occurred in all three of our operational
regions in the USA. During 2004 we
entered five new metros including Atlanta,
Las Vegas and Boston and will enter
another eleven in 2005. As well as
geographical expansion we have
increased the effectiveness of our sales
operation with our existing sales team
PAGE EIGHT
TRAFFICMASTER ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004 NEW CHALLENGES_NEW DIRECTIONS
PAGE NINE
improving productivity by 30% over
2003. In addition we have also started
to see significant revenue from our
National accounts team with 350 units
at Stuart Stevenson and another for
190 units in Builder First Source.
Teletrac is positioned at the high
feature, high service end of the market.
This has enabled it to continue its sales
growth with unit sales up 50% on 2003.
At the same time, average revenue per
unit has remained steady, particularly
for the key Fleet Director product,
despite the entry of lower cost units
into the market.
As well as the improvement in sales
effectiveness, a 38% reduction in churn
and the introduction of the new
Trafficmaster “black box” into the
Teletrac market also contributed
significantly to the improvement in
margins.
Other product improvements
introduced this year include a new
customer control centre, live in-vehicle
diagnostics and a number of integrated
solutions for larger customers. 
UK Traffic Information Business
Our high quality UK traffic data
continues to be one of the cornerstones
of our business providing traffic
warnings for phone based, speech
based and car based traffic services. It
is also a unique and important part of
our Smartnav service allowing us to
provide accurate traffic impacted
routing which is superior to other
products in the market. 
Last year we began to deliver our high
quality traffic information over
RDS/TMC. This technology provides the
ability to deliver traffic information over
FM radio into conventional on-board
navigation systems. We are pleased to
announce that we will shortly be
providing a service for a premium
brand manufacturer through a contract
with Siemens VDO, and we are in the
final stages of concluding a contractual
agreement with Honda Motor Europe
Limited. We will begin delivering traffic
information to customers of these
companies in 2005 and more contracts
of this type are expected to follow 
this year . 
We continue to invest in the
development and maintenance of our
UK traffic information network, with a
view to improving the quality and scope
of the underlying data, during 2004 we
extended coverage to include the new
M6 toll road.
We have signed a deal with Transport
for London (TFL), allowing us to extend
the network extensively into London
using the data from their Congestion
Zone cameras. This will provide
Trafficmaster with improved inner
London traffic data and will provide 
TFL with Trafficmaster journey time
information for better management 
of the road network in London.
RAC Trackstar Limited – 
stolen vehicle tracking business 
RAC Trackstar continued to gain
market share during the period, with
the Trackstar Plus product. Trackstar
Plus is offered at a competitive price
and offers a “Safe Speed” speed
camera warning feature as an option
for users. This has proved attractive to
the market, with unit sales increased
by 35% over the same period last year
and gross profit up 34% on last year .
This year, Thatcham has specified a
new type of tracking device on behalf
of the motor insurance industry
designated Category 5. Trackstar will
deliver a new Category 5 product that
will start shipping in the second half of
the year . So far Category 5 devices have
not yet made an impact on the market
but as insurance companies adopt the
new standard this is likely to change in
the latter part of 2005. Trackstar is well
positioned to take advantage of the
opportunity that this industry change
may bring to the market.
Outlook
The UK navigation market and the USA
fleet tracking market continue to grow
rapidly and our new unified telematics
“black box” is now shipping in volume
in all our businesses. With the recent
contract wins across our operating
divisions, and despite the
administration of MG Rover, the
company is well positioned to continue
to deliver growth in 2005. 
Stuart Berman
Chief Executive
22 April 2005 PAGE TEN
TRAFFICMASTER ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004
Colin Walsh
Non-Executive Chairman
Colin was appointed as 
Non-Executive Chairman in
June 2004. He has been a
member of the Trafficmaster
board since 1992. Previously a
non-executive director, Colin
was central to arranging
funding for the business,
which led to the flotation of
the company in 1994 and
subsequently to its
’Internationalisation’. Colin
has worked in the venture
capital industry securing
funds for growth companies
since 1989 and he serves on
the board of a number of
companies. With an MBA in
International Business and
Industrial Development from
the University of Ulster, he
currently manages a venture
capital fund investing in
growth companies in
Northern Ireland.
Stuart Berman
Chief Executive
Stuart was appointed Chief
Executive in September 2004
having previously spent two
years as Trafficmaster’s Chief
Operating Officer . With an
engineering background and
an MBA, Stuart has worked in
various pioneering technology
companies and for the past
ten years has held senior
director positions in a number
of high growth technology
companies. Prior to joining
Trafficmaster in September
2001, Stuart was Managing
Director of Films2 Limited, a
broadband video-on-demand
venture that he developed
from start-up. Previously
Stuart was Commercial
Director at Demon Internet
Limited where he was
responsible for all revenue
generating activities in both
the UK and Europe.
Tony Eales
Chief Executive Officer
Teletrac Inc., USA 
Tony has a background in the
telecommunications industry
and has held senior
management positions within
Finance, Marketing and
Strategic Planning. He joined
Trafficmaster in July 1998 and
was appointed to the Board in
January 1999. His initial remit
included corporate
development at Trafficmaster,
giving him responsibility for
generating new business and
product development. He also
managed RAC Trafficmaster
Telematics and developed
strategic partnerships. In
August 2001, Tony joined
Teletrac as Chief Executive
Officer . He continues to serve
as an Executive Board
Director of Trafficmaster Plc.
Nigel Bond
Finance Director
Nigel joined Trafficmaster in
2001 with eighteen years
experience as a Finance
Director . He started his career
at Shell Chemicals in 1971
and has held positions at
Blanchards Plc, a design and
construction company, and
Antocks Larin Group Ltd. In a
move to Alison Associates Ltd,
a group that specialises in
information systems for the
motor industry, Nigel
contributed to the expansion
of the company, whereby the
business grew from a staff of
40 to an international group of
companies employing 400
people across Europe and the
USA. Nigel is a Fellow of the
Institute of Chartered
Accountants in England and
Wales and studied economics
at Cambridge University. NEW CHALLENGES_NEW DIRECTIONS
PAGE ELEVEN
Ian Coomber
Non Executive Director
Ian Coomber has over thirty-
five years experience of the
motor industry and was most
recently Executive Director,
Sales, Marketing and
Customer Care of Vauxhall
Motors Limited. Ian served
with Vauxhall Motors Limited
from 1963 until 2001. Having
started as a sponsored degree
student in 1963, Ian moved
through the ranks to become
Executive Director, Sales,
Marketing and Customer Care
in 2000. During this time, he
held positions of District
Service Manager, Zone Fleet
Manager, Fleet Sales
Manager and General Sales
Manager . In addition to the
Vauxhall Board, Ian was
Director GMAC (UK) Ltd, IBC
Vehicles and Opel
Performance Centre (GmbH).
In addition, he was Co-Chair
of the Retail Forum Limited
and Chairman of the Society
of Motor Manufacturers and
Traders (SMM&T) Car Section
Committee. 
Adrian Joseph
Sales and Marketing Director
Adrian Joseph has over eleven
years experience working
within the automotive market.
He has held senior positions
within A.T. Kearney, a leading
management consultancy,
and with Ford Motor
Company, where his roles
covered both UK and
European sales management
and planning as well as brand
strategy. Adrian also has an
MBA with Distinction from
Manchester Business School.
His responsibilities at
Trafficmaster include
delivering aggressive growth
targets and managing
automotive manufacturer
relationships, dealer network
sales teams, direct sales
operations, as well as the
marketing function. 
Ian Williams
Non-Executive Director
Ian is the co-founder of
Trafficmaster along with David
Martell having been a long-
standing business colleague.
His career background is in
retail and production
management and he has
worked both in the USA and in
London. Ian has been involved
in the development of a wide
range of business interests
and he holds directorships in
a number of companies.
Bill McIntosh
Non-Executive Director
Bill has particular experience
of the telematics and
international subscription
business and has held a
number of senior financial
and company secretarial
positions within a number of
other industries. He has also
been involved in start-up and
early stage companies. Bill
was appointed Finance
Director at Trafficmaster in
1994. However, in September
2001 he resigned his executive
position on health grounds
and was subsequently
appointed as a non-executive
director . Bill qualified as a
chartered accountant with
Thompson McLintock, now
part of KPMG Audit Plc. He is
a graduate in Law from
Glasgow University and a
member of the Institute of
Chartered Accountants of
Scotland. TRAFFICMASTER ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004
PAGE TWELVE
Registered Office
Martell House,
University Way, Cranfield,
Bedfordshire, MK43 0TR.
Registered Number 2292714
Auditors
KPMG Audit Plc
1 Waterloo Way,
Leicester, LE1 6LP .
Tel: 0116 256 6000
Stockbrokers
Bridgewell Limited
Old Change House,
128 Queen Victoria Street,
London, EC4V 4BJ.
Tel: 020 7003 3000
Teather & Greenwood Limited 
Beaufort House,
15 St Botolph Street, 
London, EC3A 7QR.
Tel: 020 7426 9000
Solicitors
Addleshaw Goddard
25 Cannon Street,
London, EC4M 5TB.
Tel: 020 7606 8855
Lewis Silkin
12 Gough Square,
London, EC4A 3DW.
Tel: 020 7074 8000
Public Relations
Financial Dynamics
Holborn Gate,
26 Southampton Buildings,
London, WC2A 1PB.
Tel: 020 7831 3113
Registrars
Capita Registrars
The Registry,
34 Beckenham Road,
Beckenham,
Kent, BR3 4TU.
Tel: 0870 162 3100
Bankers
Barclays Bank
11 Bank Court,
Hemel Hempstead, HP1 1BX.
Tel: 01582 686271 NEW CHALLENGES_NEW DIRECTIONS
PAGE THIRTEEN
Directors’ Report
The directors have pleasure in presenting their report and the audited financial statements for the year ended 31 December 2004.
Principal Activities and Business Review
Trafficmaster is a leading journey management company providing high quality satellite navigation, traffic data and vehicle tracking. A
review of the business of the group during the year is given in the Chief Executive’s Statement on pages 7 to 9.
Results
The results for the year are set out in the Profit and Loss Account on page 24. These show a group profit after exceptional items and
before tax and minority interest of £4,773,000 (2003: £549,000) on group turnover of £36,613,000 (2003: £30,566,000) and a group gross
profit of £20,794,000 (2003: £17,552,000). The directors do not recommend that a dividend be paid (2003: £nil).
Research and Development
The group pursues an active policy of research and development to introduce new products and to improve the quality and cost-
effectiveness of its services.
Directors and their Interests at 31 December 2004
The directors who held office at the end of the year together with their share interests in the company (all beneficial unless otherwise
stated) are:
Ordinary shares Ordinary shares
31 December 2004 31 December 2003
Ian Williams† 2,100,728 3,333,728
Bill McIntosh 104,248 204,248
Colin Walsh 100,000 100,000
Tony Eales 10,000 10,000
Nigel Bond 10,000 10,000
Stuart Berman 10,000 10,000
Adrian Joseph (appointed 4 February 2004) — —
Ian Coomber (appointed 18 March 2004) — —
David Martell (resigned 16 September 2004) — 6,086,488 
Sir James McKinnon (resigned 14 June 2004) — 25,000
† Included within the interest of Ian Williams are 1,217,092 ordinary shares (2003: 2,100,092) held by Lutea Trustees Limited as
Trustees of the I R Williams Trust, the ultimate beneficiary of which is Ian Williams, and 561,532 (2003: 911,532) shares held by Air
Continental Securities Limited in which Mr Williams has a one-third interest. 
During the year certain directors made the following sales of ordinary shares:
Bill McIntosh sold 50,000 shares on 15 June 2004 and 50,000 shares on 29 September 2005 at 85p and 83p per share respectively.
Lutea Trustees Limited and Air Continental Securities Limited, in which Ian Williams has beneficial interests as described above, sold
883,000 and 350,000 shares respectively on 24 September 2004 at 82.5p per share.
After the financial year, on 18 March 2005, Lutea Trustees Limited sold a further 1,217,092 shares at 56p per share.
The directors who held office at the end of the year together with their interests in share options of the company are included on 
page 19.
The market price of shares at 31 December 2004 was 59.5p (31 December 2003: 68.75p). The highest price during the year was 105p
and the lowest price during the year was 53.5p. TRAFFICMASTER ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004
PAGE FOURTEEN
Directors’ Report continued
Substantial Shareholdings
As at 21 April 2005 the register maintained by the company under Section 211 of the Companies Act 1985 contains a notification to the
company that the following shareholders hold 3% or more of the issued ordinary share capital of the company:
Number of Percentage
ordinary of issued 
Shareholder shares share capital
Oppenheimer Funds Inc 10,000,000 7.42
Legal & General Group Plc 6,518,064 4.83
Standard Life Group Plc 4,857,979 3.60
Market Value of Land and Buildings
In the opinion of the directors, the market value of land and buildings in the group is not materially different to the net book value as
shown in the financial statements. Details of fixed assets are shown in note 12.
Payment of Creditors
The group does not follow any code or standard on payment practice. Its policy in relation to all its suppliers is to settle the terms of
payment at the outset of a transaction and to abide by these terms provided that it is satisfied that the supplier has provided the goods
or services in accordance with the agreed terms and conditions. The number of days’ billings from suppliers outstanding for the
company at 31 December 2004 was 45 (2003: 50).
Employees
The group places considerable value on the involvement of its employees and has continued its previous practice of keeping them
informed on matters affecting them as employees and on the various factors affecting the performance of the group. This is achieved
through formal and informal meetings.
Disabled Employees
The group recognises its social and statutory duties to employ disabled persons and pursues a policy of providing, wherever possible,
the same employment and training opportunities to disabled persons as to other employees.
Where existing employees become disabled, it is the group’s policy wherever practicable to provide continuing employment under
normal terms and conditions and to provide training and career development and promotion to disabled employees wherever
appropriate.
Corporate social responsibility ("CSR")
Trafficmaster recognises its responsibilities to the environment and believes that social, ethical and environmental issues are integral
and important components of best practice in business management.  The board has identified the following risks as the most
significant in the context of CSR:
 Climate change 
 Health and safety 
 Business Ethics 
The Government’s strategy on climate change recognises that precautionary action to reduce pollution from vehicles is necessary and
has implemented a number of measures to reduce congestion with the objective, in part, of reducing greenhouse gas emissions.
Trafficmaster shares this objective which is at the heart of the benefits that Smartnav delivers, reducing journey times and journey
miles of our customers.
Our health and safety record continues to be good with no serious reported incidents during the year.  All our staff have received health
and safety training and we have an established structure in place for dealing with health and safety matters. PAGE FIFTEEN
The board believes that our business should be operated only through ethical policies and practices.  Our code of conduct establishes
the ethical standards that our employees are required to follow and we have established a structure to follow up any breaches in these
ethical policies.  
The board is committed to managing these risks as well as others that it has identified on an ongoing basis and developing policies to
promote best working practices in these areas
Donations
The group made no political or charitable donations during the year (2003: £nil). 
Directors’ Authority to Issue Shares
At the Annual General Meeting to be held on 16 June 2005, the directors will seek to renew their existing authority to allot all the
unissued ordinary share capital of £1,256,981 at that time. They will also seek to renew their existing authority to allot for cash up to 5%
or £337,150 of the issued share capital otherwise than pro rata to existing shareholders.
Auditors
KPMG Audit Plc have expressed their willingness to continue in office as auditors and in accordance with Section 385 of the Companies
Act 1985 a resolution for their reappointment will be proposed at the forthcoming Annual General Meeting.
By order of the board
Nigel Bond
Secretary
22 April 2005
NEW CHALLENGES_NEW DIRECTIONS TRAFFICMASTER ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004
PAGE SIXTEEN
Directors’ Remuneration Report
The directors present their remuneration report for the year ended 31 December 2004.
Remuneration Committee
The policy for directors’ remuneration is set by the board as a whole. The Remuneration Committee operates within this policy to advise
on levels of remuneration.
The Remuneration Committee of the board is responsible for ensuring that the remuneration packages provided to executive directors
are appropriate to individual levels of experience, responsibility and performance, are consistent with the company’s remuneration
policy, and are in line with the principles of good corporate governance.
The Remuneration Committee is composed entirely of the non-executive directors who have no financial interest in the group (other
than as shareholders), no personal interest in the Committee’s deliberations or decisions, and no involvement in the day-to-day
management of the group’s operations. The members of the Committee during the year were: Bill McIntosh, Sir James McKinnon
(resigned 14 June 2004), Colin Walsh (who was Chairman of the Committee), Ian Coomber and Ian Williams.
The Committee usually meets twice a year. The Chief Executive is normally invited to attend its meetings in order to make
recommendations concerning remuneration (other than his own). The Finance Director and Secretary provide secretarial support to the
Committee and external advice is obtained when necessary. The Chief Executive is not present when his own remuneration is being
discussed. During the year the Committee received material assistance on remuneration decisions from the Chief Executive.
Remuneration Policy
The company’s policy on directors’ remuneration is that its remuneration packages should be capable of attracting, rewarding and
retaining both executive and non-executive directors who have the skills, experience and expertise that will enable the company to
deliver superior levels of shareholder return.
Account is taken of the salary and total remuneration levels prevailing in comparable jobs in similar size organisations, together with
the individual performance and contribution of each of the executive directors.
The remuneration of executive directors consists of base salary, performance related bonus, benefits in kind (a car or car allowance,
medical expenses insurance, life assurance), share options and pension provision. 
All executive directors participate in a bonus scheme that is related to consolidated group revenues and profitability, however no
payments were made under this scheme during 2004. On target earnings under this scheme would have resulted in bonus payments of
approximately 10% of salary for directors other than the Chief Executive who would have received approximately 25% of salary. In
addition, directors other than the Chief Executive, had individual bonus schemes based on achieving goals specifically related to their
areas of expertise. 
Remuneration details of each director are given on page 18.
Service Contracts
Executive directors are all employed under agreements which set out their responsibilities and obligations to the company, and the
terms of their employment. All those service contracts have a twelve-month rolling notice period. Two of the executive directors are
finalising the terms of their service contracts which when completed will meet all the requirements of the Combined Code.
None of the service contracts contains any specific termination provisions.
The board notes and has reviewed the provisions of the Combined Code concerning notice periods and the ABI/NAPF joint guidelines on
service contracts. In agreeing these contracts, account has been taken of the board’s wish to retain people of high calibre.
Unless the interests of the company require otherwise (which it is anticipated will only be in exceptional circumstances), it is the board’s
intention that any future executive appointments to the board will be on the basis that notice periods will not exceed twelve months, or
if they do this will only be for a short initial term.
In the event of early termination, the Remuneration Committee will take careful account of the prevailing circumstances in awarding
compensation and will take appropriate professional advice to ensure that best practice is consistent with the parties’ contractual
rights. 
The Committee would look favourably on a request by an executive director to take up a non-executive appointment at a non-competing
company having regard to the time commitment that this would entail compared to the benefits that it could bring the company. PAGE SEVENTEEN
Non-Executive Directors
The non-executive directors receive fees for their services. The executive directors determine the remuneration of the non-executive
directors.
The non-executive directors have letters of appointment, with rolling notice periods of twelve months or shorter. They are not eligible
for pension scheme membership or for contributions to their own individual pension schemes, receive no benefits in kind, and do not
participate in any profit sharing, share option or other incentive scheme with the exception of Bill McIntosh who held 300,000 share
options throughout the year.
Directors Seeking Re-election
In accordance with the Articles of Association, Ian Williams, Colin Walsh and Tony Eales are required to seek re-election at the next
annual general meeting.
Pensions
The company pays 10% of basic salary into personal pension funds set up by each of the executive directors.
Directors’ Interests in Contracts and Other Transactions with Group Companies
No director has a material interest in any contracts with any group companies other than a service contract.
Share options
The Company has operated two share option schemes for several years: an Inland Revenue approved and an unapproved scheme.
Awards under both of these schemes are made at ruling market prices at the date of grant. Awards can only be exercised if either the
growth in earnings in each of three consecutive financial years exceeds the rate of increase in the UK retail prices index by at least 1%,
or, in the case of the unapproved scheme only, the average of the growth in earnings in the second and third financial years exceeds the
earnings in the first year by a percentage which is no less than the rate of increase in the UK retail prices index plus 10%. This latter
test has been introduced by the Remuneration Committee to operate alongside the original test to take account of the fact that,
although the Company may have achieved sustained average underlying growth, this might not necessarily have satisfied the year on
year growth required by the original test. The Remuneration Committee is of the opinion that the adjustment produces a fairer result. 
In addition, the shareholders approved a 1998 Share Option Plan, restricted to David Martell and Bill McIntosh, at an extraordinary
general meeting of the company on 21 September 1998. Under this long-term scheme, options over 4 million ordinary shares were
granted at the ruling market price. Predetermined percentages of the options vest in years 3 through to 8 only if the share price at
those times has grown at a rate of 10% compound per annum from the date of grant. Thereafter, a predetermined percentage of vested
options can be exercised between years 6 and 10. 
All schemes are operated under the auspices of the Remuneration Committee and a total of 8,973,600 (2003: 8,055,600) options have
been awarded to a total of forty seven staff and five directors. Share option movements during the year are shown in note 19 on
page 39.
Shareholder Value
The graph below looks at the value, by the end of year 2004, of £100 invested in Trafficmaster Plc at December 1999 compared with the
value of £100 invested in the FTSE Fledgling index. Other points plotted are the values at the financial year ends. The comparator index
has been chosen as it represents a relevant index, of which the company is a member.
The auditors are required to report on the information contained in this section of the report. 
160
140
120
100
80
60
40
20
0
Total cumulative shareholder return for the five-year period to 31 December 2004
2000 2001 2002 2003 2004
FTSE Fledgling
TSR Trafficmaster Plc
NEW CHALLENGES_NEW DIRECTIONS TRAFFICMASTER ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004
PAGE EIGHTEEN
Directors’ Remuneration Report continued
Directors’ Emoluments
Company 
contributions to
money purchase
Salary pension schemes
and fees Bonus Benefits 2004 2003 2004 2003
£000 £000 £000 £000 £000 £000 £000
Aggregate directors’ remuneration:
David Martell (resigned 16 September 2004) 104 — 9 113 234 36 20
Tony Eales 96 40 1 137 135 11 11
Nigel Bond 124 4 14 142 141 11 11
Stuart Berman 129 — 4 133 128 11 11
Adrian Joseph (appointed 4 February 2004) 101 15 2 118 — 19 —
Non-executive directors:
Bill McIntosh 15 — — 15 14 — —
Sir James McKinnon (resigned 14 June 2004) 14 — — 14 36 — —
Colin Walsh (Chairman) 23 — — 23 19 — —
Ian Williams 15 — — 15 13 — —
Ian Coomber (appointed 18 March 2004) 12 — — 12 — — —
633 59 30 722 720 88 53
David Martell was paid a salary totalling £23,384 from the date of his retirement as a director until 31 December 2004.
2004 2003
The number of directors to whom benefits are accruing under money purchase
pension schemes 4 4 PAGE NINETEEN
Directors’ Share Options in Ordinary Shares
Number of options during the year
At
31.12.03 At Exercise Exercise
or date of appointment if later Issued Lapsed 31.12.04 price period
David Martell
1998 Plan 3,000,000 — — 3,000,000 £1.053 see below
Unapproved scheme 225,000 — — 225,000 £0.42 16.10.06–15.10.13
Bill McIntosh
1998 Plan 300,000 — — 300,000 £1.053 see below
Adrian Joseph
Approved scheme 72,272 — — 72,272 £0.4125 21.10.06–20.10.13
Unapproved scheme 127,728 — — 127,728 £0.4125 21.10.06–20.10.13
Unapproved scheme — 75,000 — 75,000 £0.835 28.10.07–27.10.14
Tony Eales
Approved scheme 28,500 — — 28,500 £1.053 21.09.01–20.09.08
Unapproved scheme 371,500 — — 371,500 £1.053 21.09.01–20.09.08
Unapproved scheme 100,000 — — 100,000 £0.52 25.10.04–24.10.11
Unapproved scheme 250,000 — — 250,000 £0.235 05.04.05–04.04.12
Unapproved scheme 110,000 — — 110,000 £0.42 16.10.06–15.10.13
Unapproved scheme — 75,000 — 75,000 £0.835 28.10.07–27.10.14
Nigel Bond
Approved scheme 57,692 — — 57,692 £0.52 25.10.04–24.10.11
Unapproved scheme 42,308 — — 42,308 £0.52 25.10.04–24.10.11
Unapproved scheme 250,000 — — 250,000 £0.235 05.04.05–04.04.12
Unapproved scheme 110,000 — — 110,000 £0.42 16.10.06–15.10.13
Unapproved scheme — 75,000 — 75,000 £0.835 28.10.07–27.10.14
Stuart Berman
Approved scheme 57,692 — — 57,692 £0.52 25.10.04–24.10.11
Unapproved scheme 42,308 — — 42,308 £0.52 25.10.04–24.10.11
Unapproved scheme 250,000 — — 250,000 £0.235 05.04.05–04.04.12
Unapproved scheme 110,000 — — 110,000 £0.42 16.10.06–15.10.13
Unapproved scheme — 75,000 — 75,000 £0.835 28.10.07–27.10.14
Total 5,505,000 300,000 — 5,805,000
No share options have been exercised during the year.
David Martell‘s and Bill McIntosh’s 1998 Plan options once vested are exercisable between the date of publication of the company’s
financial results for 2003 and 2005. Options granted under the approved and unapproved schemes are subject to performance related
conditions as set out on page 17.
Colin Walsh
Chairman, Remuneration Committee
22 April 2005
NEW CHALLENGES_NEW DIRECTIONS TRAFFICMASTER ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004
PAGE TWENTY
Corporate Governance
Principles of Good Governance
The group accepts the principles of good governance embodied in the Combined Code and seeks to apply them in practice, taking into
account the size of the group and its stage of development. Except as reported below, the group has complied with section 1 of the
Combined Code since its introduction. The Company is aware of the revisions made to the Combined Code for companies with years
beginning on or after 1 November 2003 and is taking steps to comply in some of those areas where it does not already do so. The group
has a small board which meets monthly, negating the need for a separate nominations committee. The appointment of any new
directors requires the prior approval of the full board on terms recommended by the Remuneration Committee. The roles of Chairman
and Chief Executive are fully split. The Chairman, Colin Walsh, is an independent non-executive director. The board has three
independent members whose interaction inside and outside the group provides a suitable forum to protect the interests of shareholders
without the need for the additional appointment of a senior independent director. 
Constitution of the Board of Directors
The board comprises 4 executive and 4 non-executive directors. It meets monthly and has a formal schedule of matters specifically
reserved to it for decision.
The board includes non-executive directors who bring strong independent judgement and considerable knowledge and experience to
the board’s deliberations. Ian Williams is a co-founder of the company and a shareholder. The remaining non-executive directors are
free from any business or other relationship which could materially interfere with the exercise of their independent judgement. All
directors are subject to election by shareholders at the first opportunity after their appointment and to re-election at intervals of no
more than three years thereafter. All directors have direct access to the Company Secretary and are able to take independent
professional advice at the company’s expense in the furtherance of their duties.
Board Committees
The board has two main committees:
Audit Committee
This committee is chaired by Bill McIntosh, who replaced Sir James McKinnon on 16 June 2004, and comprises all non-executive
directors. It meets not less than twice a year and operates to formal terms of reference, which include the review of the annual
accounts and interim statement, compliance with generally accepted accounting principles and the adequacy of the group’s audit and
control systems.
Remuneration Committee
This committee is chaired by Colin Walsh and also comprises all non-executive directors of the company. It operates under formal
terms of reference and recommends the remuneration and amendments to the remuneration of new and existing executive directors.
Internal Control
The board is ultimately responsible for the group’s system of internal control and for reviewing its effectiveness. However, such a
system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can provide only reasonable
and not absolute assurance against material misstatement or loss.
Following publication of guidance for directors on internal control, “Internal Control: Guidance for Directors on the Combined Code”
(the “Turnbull” guidance), the board confirms that it has put in place an ongoing process for identifying, evaluating and managing the
significant risks faced by the group, that this process was in place throughout the year and at the date of approval of the annual report
and accounts, and that this process is regularly reviewed by the board and accords with the guidance.
The group’s internal control environment is designed to accommodate the group’s dynamic nature within a young, but rapidly expanding
industry. The group’s organizational structure facilitates a regular dialogue between executive management and the group’s employees,
such that commercial challenges and potential risks are addressed at the earliest opportunity. The board is committed to a strong and
focused internal control environment, and will maintain its close monitoring of the appropriateness of its organizational structure and
its internal controls going forward. PAGE TWENTY-ONE
Review of the Effectiveness of the System of Internal Control
The board has reviewed the effectiveness of the system of internal control during the year. In particular, it has reviewed and updated the
process for identifying and evaluating the significant risks affecting the business and the policies and procedures by which these risks
are managed.
The review process has comprised essentially three stages:
1 Confirmation of the group’s business objectives, its strategies and the key business risks threatening the group’s objectives.
2 Identification of the key controls managing those key business risks, and an assessment of how effective those controls are.
3 Evaluation of actions required to ensure control breakdowns have been adequately addressed and the drafting of this disclosure
note. No corrective action is required at the date of approval of the accounts.
The board has clarified its objectives, including targets and financial budgets, and communicated these to line management and
functional departments. The board has considered its key risks in terms of market, financial, legal, regulatory, health and safety,
environmental and reputational categories and has assigned responsibilities for the ongoing management of these categories.
Strategies and objectives which may significantly change the risk profile of the group have full involvement of the board on
decisions taken.
Performance reward schemes aim to compensate employees in line with industry practices and to motivate and encourage high
performance. 
The integrity of financial information used for decision making is assured through a comprehensive set of controls, and the board
formally considers operational performance and forecasts on a monthly basis. Operational management groups meet weekly with
executive board members to ensure close control over performance and associated risks.
The group has embedded processes within its core operations, technological infrastructure, finance function and product development
operations to ensure risks are monitored and responded to. Weekly status reports are received by members of the executive board to
ensure risks are re-evaluated and the group can effectively respond to changes in its external environment and internal operations.
Planned corrective actions are monitored for completion.
The board has considered establishing an internal audit function and has decided that this would not be appropriate at this stage of the
group’s development. The board considers that it currently receives sufficient assurance from external advisers and regulatory bodies
on relevant areas of its risks. The board is committed to reviewing the need for internal audit on a regular basis.
Shareholder Relationships and AGM
The company takes positive steps to keep its shareholders informed of developments within the business. It arranges formal
presentations to institutional investors at least twice a year, at the time of its interim and annual results. In addition, it holds one
shareholder open day each year specifically for private investors. The company also welcomes less formal contact with shareholders at
other times of the year. The company also presents a report on the state of the business at the AGM, takes questions and answers and
complies in full with the other requirements of the code as to the use of the AGM.
Going Concern
Having reviewed the company’s existing resources and its projected budgets for year 2005, the directors are confident that the company
has adequate resources to continue in operation for the foreseeable future. For this reason they continue to adopt the going concern
basis in preparing the financial statements.
On behalf of the board
Nigel Bond
Secretary
22 April 2005
NEW CHALLENGES_NEW DIRECTIONS TRAFFICMASTER ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004
PAGE TWENTY-TWO
Statement of Directors’ Responsibilities
Company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of
affairs of the company and the group at the end of the year and the profit or loss for the year then ended. In preparing those financial
statements, the directors are required to:
 select suitable accounting policies and then apply them consistently;
 make judgments and estimates that are reasonable and prudent;
 state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in
the financial statements.
The directors are also responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the
financial position of the company and to enable them to ensure that the financial statements comply with the Companies Act 1985. They
have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the group and to prevent
and detect fraud and other irregularities. PAGE TWENTY THREE
Independent Auditors’ Report to the members of Trafficmaster Plc 
We have audited the financial statements on pages 24 to 44. We have also audited the information in the directors’ remuneration report
that is described as having been audited.
This report is made solely to the company’s members, as a body, in accordance with section 235 of the Companies Act 1985. 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 an
auditor’s report 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.
Respective Responsibilities of Directors and Auditors
The directors are responsible for preparing the Annual Report and the directors’ remuneration report. As described on page 22, this
includes responsibility for preparing the financial statements in accordance with applicable United Kingdom law and accounting
standards. Our responsibilities, as independent auditors, are established in the United Kingdom by statute, the Auditing Practices
Board, the Listing Rules of the Financial Services Authority and by our profession’s ethical guidance. 
We report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements and
the part of the directors’ remuneration report to be audited have been properly prepared in accordance with the Companies Act 1985.
We also report to you if, in our opinion, the directors’ report is not consistent with the financial statements, if the company has not kept
proper accounting records, if we have not received all the information and explanations we require for our audit, or if information
specified by law regarding directors’ remuneration and transactions with the group is not disclosed. 
We review whether the Corporate Governance statement on pages 20 and 21 reflects the company’s compliance with the nine provisions
of the 2003 FRC code specified for our review by the Listing Rules, and we report if it does not. We are not required to consider whether
the board’s statement on internal control cover all risks and controls, or form an opinion on the effectiveness of the group’s Corporate
Governance procedures or its risk and control procedures. 
We read the other information contained in the Annual Report, including the Corporate Governance statement and the unaudited part 
of the directors’ remuneration report and consider whether it is consistent with the audited financial statements. We consider the
implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial
statements.
Basis of Audit Opinion
We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit includes examination,
on a test basis, of evidence relevant to the amounts and disclosures in the financial statements and the part of the directors’
remuneration report to be audited. It also includes an assessment of the significant estimates and judgements made by the directors in
the preparation of the financial statements, and of whether the accounting policies are appropriate to the group’s circumstances,
consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to
provide us with sufficient evidence to give reasonable assurance that the financial statements and the part of the directors’
remuneration report to be audited are free from material misstatement, whether caused by fraud or other irregularity or error. In
forming our opinion, we also evaluated the overall adequacy of the presentation of information in the financial statements and part of
the directors’ remuneration report to be audited. 
Opinion
In our opinion:
 the financial statements give a true and fair view of the state of affairs of the company and the group as at 31 December 2004 and
of the profit of the group for the year then ended, and 
 the financial statements and the part of the directors’ remuneration report to be audited have been properly prepared in
accordance with the Companies Act 1985.
KPMG Audit Plc
Chartered Accountants
Registered Auditor
1 Waterloo Way
Leicester, LE1 6LP
22 April 2005
NEW CHALLENGES_NEW DIRECTIONS TRAFFICMASTER ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004
PAGE TWENTY-FOUR
Consolidated Profit and Loss Account
for the year ended 31 December 2004
2004 2003
(as restated)
Total Total
Notes £000 £000
Turnover: group and share of joint ventures
— continuing operations 37,301 31,251
— discontinued operations — 4
2 37,301 31,255
Less: share of joint ventures — continuing operations (688) (689)
Group turnover 1,3 36,613 30,566
Cost of sales (including exceptional costs of £nil (2003: £339,000)) 3,4 (15,819) (13,014)
Group gross profit 20,794 17,552
Selling and distribution costs 3,30 (5,593) (4,188)
Administrative expenses (including exceptional credits of £nil (2003: £2,441,000)) 3,4,30 (12,798) (11,115)
Group operating profit from continuing operations 2,403 2,608
Group operating loss from discontinued operations — (359)
Group operating profit 3,30 2,403 2,249
Share of operating profit in joint ventures (2003: exceptional credit of £208,000) 4,30 — 208
Share of operating result in associate (2003: including goodwill impairment of £928,000) 4,30 — (1,108)
Total operating profit: group and share of joint ventures and associates 2,403 1,349
Net exceptional gain on redemption of secured senior notes 2,057 —
Net interest receivable/(payable) and similar income/(expense) including exceptional interest 
waiver on settlement of secured senior notes in 2004 of £233,000 (2003: £nil) 6 313 (800)
Profit on ordinary activities before taxation 5 4,773 549
Tax on profit on ordinary activities 9 1,148 —
Profit on ordinary activities after taxation 5,921 549
Equity minority interest — 295
Profit attributable to the shareholders of Trafficmaster Plc 5,921 844
Earnings per ordinary share
— basic 10 4.43p 0.67p
— diluted 10 4.31p 0.67p
Consolidated Statement of Total Recognised Gains and Losses
for the year ended 31 December 2004
2004 2003
£000 £000
Profit for the year attributable to the shareholders of Trafficmaster Plc 5,921 844
Net exchange differences on foreign investments (376) 73
Total recognised gains and losses relating to the year 5,545 917 PAGE TWENTY-FIVE
Consolidated Balance Sheet
as at 31 December 2004
2004 2003
(as restated)
Notes £000 £000 £000 £000
Fixed assets
Intangible fixed assets 11 6,728 4,064
Tangible fixed assets 12 13,713 13,649
Investments in joint ventures
Share of gross assets 148 122
Share of gross liabilities (582) (556)
(434) (434)
Loan to joint ventures 550 550
Investments 13 116 116
20,557 17,829 
Current assets
Stocks 14 6,908 4,483
Debtors due within one year 15 10,553 6,519
Debtors due after more than one year 15 1,148 —
Debtors 11,701 6,519
Cash at bank and short-term deposits 1,443 7,331
20,052 18,333
Creditors: Amounts falling due within one year 16,30 (9,747) (8,615)
Net current assets 10,305 9,718
Total assets less current liabilities 30,862 27,547
Creditors: Amounts falling due after more than one year 17,30 (1,078) (9,245)
Net assets 29,784 18,302
Capital and reserves
Called up share capital 19 6,743 6,294
Share premium account 20 94,274 90,759
Merger reserve 20 1,973 —
Profit and loss account 20 (73,168) (78,713)
Equity shareholders’ funds 21 29,822 18,340 
Equity minority interest (38) (38)
29,784 18,302 
The board of directors approved these financial statements on 22 April 2005 and they were signed on its behalf by:
Stuart Berman Nigel Bond
Chief Executive Finance Director
NEW CHALLENGES_NEW DIRECTIONS TRAFFICMASTER ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004
PAGE TWENTY-SIX
Company Balance Sheet
as at 31 December 2004
2004 2003
(as restated)
Notes £000 £000 £000 £000
Fixed assets
Intangible fixed assets 11 3,451 2,248
Tangible fixed assets 12 10,175 10,771
Investments 13 1,111 561
14,737 13,580
Current assets
Stocks 14 4,622 2,861
Debtors due within one year 15 3,314 1,882
Debtors due after more than one year 15 12,074 3,645
Debtors 15,388 5,527
Cash at bank and short-term deposits 598 7,057
20,608 15,445
Creditors: Amounts falling due within one year 16,30 (5,599) (4,158)
Net current assets 15,009 11,287
Total assets less current liabilities 29,746 24,867
Creditors: Amounts falling due after more than one year 17,30 (207) (112)
Net assets 29,539 24,755
Capital and reserves
Called up share capital 19 6,743 6,294
Share premium account 20 94,274 90,759
Profit and loss account 20 (71,478) (72,298)
Equity shareholders’ funds 21 29,539 24,755
The board of directors approved these financial statements on 22 April 2005 and they were signed on its behalf by:
Stuart Berman Nigel Bond
Chief Executive Finance Director PAGE TWENTY-SEVEN
Consolidated Cash Flow Statement
for the year ended 31 December 2004
2004 2003
(as restated)
Notes £000 £000
Net cash inflow from operating activities 25,30 58 2,676
Returns on investments and servicing of finance 26 55 (805)
Capital expenditure and financial investment 26 (3,276) (87)
Acquisitions and disposals 26 125 —
Cash (outflow)/inflow before management of liquid resources and financing (3,038) 1,784
Management of liquid resources 26,30 5,000 (2,000)
Financing 26 (2,762) (170)
Decrease in cash in the year 30 (800) (386)
Reconciliation of net cash flow to movement in net funds/(debt)
Decrease in cash in the year 30 (800) (386)
Cash outflow from repayment of debt 27,30 6,592 170
(Decrease)/increase in short-term deposits 27,30 (5,000) 2,000
Change in net funds/(debt) arising from cash flows 792 1,784
Exchange differences 27 (213) 935
Net gain on redemption of senior loan notes 27 2,057 —
Change in net funds/(debt) 2,636 2,719
Opening net debt (1,193) (3,912)
Closing net funds/(debt) 27 1,443 (1,193)
NEW CHALLENGES_NEW DIRECTIONS TRAFFICMASTER ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004
PAGE TWENTY-EIGHT
Notes Forming Part of the Financial Statements
1. Accounting Policies
The following accounting policies have been applied consistently in dealing with items which are considered material in relation to
the group’s financial statements:
Basis of Preparation
The financial statements have been prepared in accordance with applicable accounting standards and under the historical cost
accounting rules.
Basis of Consolidation
The consolidated financial statements include the financial statements of the company and its subsidiary undertakings made up to
31 December each year. Unless otherwise stated, the acquisition method of accounting has been adopted. Under this method, the
results of subsidiary undertakings acquired or disposed of in the year are included in the consolidated profit and loss account from
the date of acquisition or up to the date of disposal. 
An associate is an undertaking in which the group has a long-term interest, usually from 20% to 50% of the equity voting rights,
and over which it exercises significant influence. The group’s share of the profits less losses is included in the group profit and loss
account and its interest in their net assets is included in the consolidated balance sheet. 
A joint venture is an undertaking in which the group has a long-term interest and over which it exercises joint control. The group’s
share of the profits less losses of joint ventures is included in the consolidated profit and loss account and its interest in their net
assets is included in investments in the consolidated balance sheet.
Where a group company is party to a joint arrangement that it is not an entity, that company accounts directly for its part of the
income and expenditure, assets, liabilities and cash flows. Such arrangements are reported in the consolidated financial
statements on the same basis. 
Under Section 230(4) of the Companies Act 1985 the company is exempt from the requirement to present its own profit and loss
account. The amount of profit or loss dealt with in the company accounts is disclosed in note 20.
Goodwill
Purchased goodwill (both positive and negative) arising on consolidation in respect of acquisitions before 1 January 1998, when FRS
10 ‘Goodwill and intangible assets’ was adopted, was written off to reserves in the year of acquisition. When a subsequent disposal
occurs any related goodwill previously written off to reserves is written back through the profit and loss account as part of the profit
or loss on disposal. 
Purchased goodwill (representing the excess of the fair value of the consideration and associated costs given over the fair value of
the separable net assets acquired) arising on consolidation in respect of acquisitions since 1 January 1998 is capitalised. Positive
goodwill is amortised to nil by equal annual instalments over its estimated useful life of up to 20 years.
On the subsequent disposal or termination of a business acquired since 1 January 1998, the profit or loss on disposal or
termination is calculated after charging/(crediting) the unamortised amount of any related goodwill (negative goodwill).
Licences
Acquired licences and other intangible assets which are controlled through custody or legal rights and which could be sold
separately from the rest of the business are capitalised and amortised on a straight-line basis over their remaining useful
economic lives not exceeding 20 years. 
Investments
In the company’s financial statements, investments in subsidiary undertakings, associates and joint ventures are stated at cost less
any impairment in value.  PAGE TWENTY-NINE
Tangible Fixed Assets and Depreciation
Depreciation is provided by the company to write off the cost less the estimated residual value of tangible fixed assets by equal
instalments over their estimated useful economic lives as follows:
Leases and leasehold improvements — Over the period of the lease 
Fixtures, fittings and computer equipment — 5 years
Motor vehicles — 4 years
Infrastructure — 7 years
Freehold buildings — 50 years
No depreciation is provided on long leasehold land. 
Infrastructure relates to a network of nationwide sensors and transmitters that gather and distribute traffic data.
Operating Leases
Rentals under operating leases are charged to the profit and loss account on a straight-line basis over the period of the lease.
Research and Development Expenditure
Development costs on clearly defined projects, the outcome of which has been assessed with reasonable certainty, are capitalised
to the extent that their recovery can reasonably be regarded as assured and are amortised on a straight-line basis over the shorter
of the expected life of the product and five years. Other research and development expenditure is written off in the profit and loss
account in the year in which it is incurred.
Pension Costs
The group does not operate a pension scheme for its employees. It does, however, make contributions to the private pension
arrangements of certain employees. These arrangements are of the money purchase type, and the amount charged to profit and
loss account represents the contributions payable by the group during the financial year.
Turnover and Deferred Revenue
Turnover represents the amounts (excluding value added tax) derived from the provision of goods and services to third party
customers. The group sells certain products bundled with software upgrades and maintenance delivered over periods of up to three
years for consideration in the form of a monthly or annual subscription. Turnover reflects the fair value of the services to its
reporting date as a proportion of the total fair value of the contract. Deferred revenue represents non-refundable amounts received
in advance of the recognition of revenue in the profit and loss account. It is taken to the profit and loss account over the period of
the subscription or contract period as appropriate. 
Foreign Currencies
Assets and liabilities of subsidiaries in foreign currencies are translated into sterling at the rates of exchange ruling at the balance
sheet date and the results of foreign subsidiaries are translated at the average rate of exchange for the year. Differences on
exchange arising from the retranslation of the opening investment in subsidiary companies are taken to reserves. All other foreign
exchange differences are taken to the Profit and Loss in the year in which they arise.
Stocks
Stocks are stated at the lower of cost and net realisable value.
Taxation
The charge for taxation is based on the profit for the year and takes into account taxation deferred because of timing differences
between the treatment of certain items for taxation and accounting purposes. 
Deferred tax is recognised, without discounting, in respect of all timing differences between the treatment of certain items for
taxation and accounting purposes which have arisen but not reversed by the balance sheet date, except as otherwise required by
FRS 19. Net debit balances are recognised as assets only to the extent that they are expected to be recovered.
Cash and Short-Term Deposits
Cash comprises, for the purpose of the cash flow statement, cash in hand and deposits repayable on demand, less overdrafts
payable on demand.
NEW CHALLENGES_NEW DIRECTIONS TRAFFICMASTER ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004
PAGE THIRTY
Notes Forming Part of the Financial Statements continued
2. Turnover and Segmental Information
Turnover represents the amounts (excluding value added tax) derived from the provision of goods and services to customers during
the year and can be analysed as follows:
By origin By destination
2004 2003 2004 2003
£000 £000 £000 £000
United Kingdom 20,492 16,532 19,447 15,244
Mainland Europe — 4 1,045 1,292
North America 16,809 14,719 16,809 14,719
37,301 31,255 37,301 31,255
Profit/(loss) before Net assets
interest and tax by origin by origin
2004 2003 2004 2003
£000 £000 £000 £000
United Kingdom 526 (1,093) 22,193 32,034
Mainland Europe — (217) (293) (990)
United States of America 1,877 2,659 7,884 (12,742)
2,403 1,349 29,784 18,302 
The directors consider that the group has a single class of business being the provision of journey management services.
3. Analysis of Continuing and Discontinued Operations
2004 2003
(as restated)
Continuing Discontinued Total Continuing Discontinued Total
£000 £000 £000 £000 £000 £000
Group turnover 36,613 — 36,613 30,562 4 30,566
Cost of sales (15,819) — (15,819) (13,014) — (13,014)
Group gross profit 20,794 — 20,794 17,548 4 17,552
Selling and distribution costs (5,593) — (5,593) (4,188) — (4,188)
Administrative expenses (12,798) — (12,798) (10,752) (363) (11,115)
Group operating profit/(loss) 2,403 — 2,403 2,608 (359) 2,249
Discontinued operations in 2003 relate to the closure of the group’s operations in Germany and elsewhere in Europe. 
The companies acquired during the year did not trade since acquisition and therefore have had no impact on the post-acquisition
results. The trade of these companies was transferred into Trafficmaster Plc from the date of acquisition. PAGE THIRTY-ONE
4. Group Operating Exceptional Items
Total Total
2004 2003
(as restated)
£000 £000
Operating exceptional items:
Net release of goodwill impairment provisions (i) — (1,214)
Profit on sale of current asset investments (ii) — (1,262)
Net change in provisions against current assets and liabilities (iii) — 374
— (2,102)
All exceptional items in 2003 relate to continuing operations.
(i) During 2003 goodwill of £305,000 arising on the acquisition of the remaining 49% share of Trafficmaster Passo GmbH has been
impaired by reducing the carrying value of goodwill to nil based upon estimated net realisable value. This has been offset by a
partial release totalling £1,519,000 of the goodwill impairment charged in 2002 relating to a USA subsidiary, Teletrac Inc. This
is following an upturn in the USA market and improved funding arrangements available to this company not foreseen in the
assumptions underlying the original impairment charge, which give management greater confidence in the continuing viability
of this business.
(ii) A profit of £1,262,000 arose on the sale of listed current asset investments.
(iii) The remaining exceptional operating cost of £374,000 relates to impairments against aged current assets and legacy products
of £679,000, offset by the release of a provision of £305,000 held in relation to Trafficmaster Passo GmbH prior to the
acquisition of the remaining interest noted (i) above.
A charge of £339,000 has been recognised in cost of sales and a credit of £2,441,000 in administrative expenses.
Exceptional items in relation to joint ventures and associates
Goodwill of £928,000 relating to the group’s associate Mediamobile SA was impaired in full during 2003. The loss has been
recognised within the group’s goodwill charge relating to its share of operating loss in associate.
The group’s share of the operating losses of its joint venture, Targa Trafficmaster SpA was reduced in 2003 by £208,000 following a
renegotiation of the joint venture agreement.
5. Profit on Ordinary Activities Before Taxation
2004 2003
£000 £000
The group profit before tax is stated after charging:
Remuneration of the auditors and their associates — for audit work 108 98
— for other services 39 30
Depreciation 1,751 1,760
Amortisation of goodwill 190 —
Amortisation of goodwill arising from associate — 180
Amortisation of deferred development expenditure and licences 591 579
Operating lease rentals — property 1,053 1,834
— other 7 —
The audit fee charged to the company was £55,000 (2003: £52,000) and fees for other services were £37,000 (2003: £30,000).
NEW CHALLENGES_NEW DIRECTIONS TRAFFICMASTER ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004
PAGE THIRTY-TWO
Notes Forming Part of the Financial Statements continued
6. Net Interest Receivable/(Payable)
2004 2003
£000 £000
Bank interest receivable — group 74 172
Bank interest payable — group (19) —
55 172
Net exchange gains 25 24
Interest payable on loan notes — (996)
Exceptional interest waiver on settlement of secured senior notes 233 —
313 (800)
7. Staff Numbers and Costs
The average number of persons employed by the group (including executive and non-executive directors) during the year was:
2004 2003
Infrastructure 67 81
Sales and administration 361 246
428 327
The aggregate payroll costs of these persons were as follows:
2004 2003
£000 £000
Wages and salaries 12,237 11,236
Social security costs 703 524
Pension costs 188 156
13,128 11,916
8. Directors’ Emoluments 
Details of directors’ emoluments are shown in the directors’ remuneration report on page 18. PAGE THIRTY-THREE
9. Taxation
Analysis of credit in the year
2004 2003
£000 £000
UK corporation tax 
Current tax on income for the year — —
Adjustments in respect of prior year — —
Total current tax — —
Deferred tax (see note 18)
Origination/reversal of timing differences (1,148) —
Total deferred tax (1,148) —
Tax on profit on ordinary activities (1,148) —
Factors affecting the tax charge for the current year
The current tax charge for the year is lower (2003: lower) than the standard rate of corporation tax in the UK 30% (2003: 30%). The
differences are explained below.
2004 2003 
£000 £000
Current tax reconciliation 
Profit on ordinary activities before tax 4,773 549
Current tax at 30% (2003: 30%) 1,432 164
Effects of:
Expenses not deductible for tax purposes 139 662
Proportion of gain not taxable — (378)
Reversal of impairments — (759)
Tax losses not available to carry forward — 135
Depreciation for year in excess of capital allowances (397) (625)
Utilisation of tax losses (1,438) (580)
Tax losses available to carry forward 262 1,330
Other timing differences 2 51
Total current tax charge (see above) — —
Tax losses totalling approximately £33,000,000 are available to carry forward against future taxable profits. The deferred tax asset of
£1,148,000 relates to trading losses which have been recognised on the basis that they are expected to be used against future
trading profits in the next twelve months.
10. Earnings Per Ordinary Share
The calculation of earnings per ordinary share is based on the profit attributable to the shareholders of Trafficmaster Plc for the
year ended 31 December 2004 of £5,921,000 (2003: £844,000) and on the weighted average number of ordinary shares in issue
during the year of 133,664,735 (2003: 125,882,737).
In both, 2004 and 2003, the calculation of diluted earnings per share has been based upon the profit attributable to the
shareholders of Trafficmaster Plc, and the weighted average number of shares in issue in each year adjusted for the dilutive effect
of shares held under unexercised share options. The calculation of diluted earnings per share assumes that all associated
performance criteria are achieved in full.
NEW CHALLENGES_NEW DIRECTIONS TRAFFICMASTER ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004
PAGE THIRTY-FOUR
Notes Forming Part of the Financial Statements continued
11. Intangible Fixed Assets
Development
Goodwill Licences costs Total
£000 £000 £000 £000
Group 
At Cost
At 1 January 2004 14,689 974 11,817 27,480
Exchange translation difference — (122) — (122)
Additions 1,670 — 1,784 3,454
Transfers between items — (17) 17 —
Disposals — — (426) (426)
At 31 December 2004 16,359 835 13,192 30,386
Amortisation
At 1 January 2004 12,990 839 9,587 23,416
Exchange translation difference — (112) (1) (113)
Charge for the year 190 10 581 781
Disposals — — (426) (426)
At 31 December 2004 13,180 737 9,741 23,658
Net book value 
At 31 December 2004 3,179 98 3,451 6,728
At 31 December 2003 1,699 135 2,230 4,064
Development
costs Total
£000 £000
Company
At Cost
At 1 January 2004 11,408 11,408
Additions 1,784 1,784
At 31 December 2004 13,192 13,192
Amortisation
At 1 January 2004 9,160 9,160
Charge for the year 581 581
At 31 December 2004 9,741 9,741
Net book value
At 31 December 2004 3,451 3,451
At 31 December 2003 2,248 2,248
The directors consider each acquisition separately for the purpose of determining the amortisation period of any goodwill that
arises. Goodwill acquired during the year is being amortised over 10 years on the basis that this represents the expected lifetime of
the technology acquired. Existing goodwill is being amortised over an estimated useful economic life of 20 years. PAGE THIRTY-FIVE
12. Tangible Fixed Assets
Long
leasehold Fixtures,
land and fittings 
freehold Motor and Infra-
buildings vehicles computers structure Total
£000 £000 £000 £000 £000
Group
Cost
At 1 January 2004 8,645 1,231 5,404 43,378 58,658
Exchange translation difference — (9) (22) (777) (808)
Additions 30 221 569 1,437 2,257
Transfers between items 4 — (4) — —
Disposals — (536) (945) (12,727) (14,208)
At 31 December 2004 8,679 907 5,002 31,311 45,899
Depreciation
At 1 January 2004 473 698 3,942 39,896 45,009
Exchange translation difference — (8) (43) (532) (583)
Charge for the year 173 175 274 1,129 1,751
Transfers between items (11) — 11 — —
Disposals — (320) (945) (12,726) (13,991)
At 31 December 2004 635 545 3,239 27,767 32,186
Net book value 
At 31 December 2004 8,044 362 1,763 3,544 13,713
At 31 December 2003 8,172 533 1,462 3,482 13,649
Long
leasehold Fixtures,
land and fittings 
freehold Motor and Infra-
buildings vehicles computers structure Total
£000 £000 £000 £000 £000
Company
Cost
At 1 January 2004 8,649 743 2,192 27,441 39,025
Additions 30 152 390 23 595
Disposals — (424) — — (424)
At 31 December 2004 8,679 471 2,582 27,464 39,196 
Depreciation
At 1 January 2004 462 497 1,507 25,788 28,254
Charge for the year 173 126 267 413 979
Disposals — (212) — — (212)
At 31 December 2004 635 411 1,774 26,201 29,021 
Net book value
At 31 December 2004 8,044 60 808 1,263 10,175
At 31 December 2003 8,187 246 685 1,653 10,771
NEW CHALLENGES_NEW DIRECTIONS TRAFFICMASTER ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004
PAGE THIRTY-SIX
Notes Forming Part of the Financial Statements continued
12. Tangible Fixed Assets continued
Included in additions to infrastructure within group fixed assets is an asset in the course of construction of £525,000 (see note 24)
on which no depreciation has been provided. 
All land and buildings relate to the Head Office at Cranfield.
The net book value of land and buildings comprises:
Group Company
2004 2003 2004 2003
£000 £000 £000 £000
Freehold buildings 6,537 6,665 6,537 6,665
Long leasehold land 1,507 1,507 1,507 1,507
8,044 8,172 8,044 8,172
13. Investments
Investment 
in joint
ventures
£000
Group
At 1 January 2004 116
At 31 December 2004 116
Other
Shares in investments Loans to
group Participating (other than participating
undertakings interests loans) interests Total
£000 £000 £000 £000 £000
Company
Cost 
At 1 January 2004 27,872 5,304 — — 33,176
Additions 361——— 361
Transfer from current asset — — — 550 550
Transfers between items — (3,913) 3,913 — —
At 31 December 2004 28,233 1,391 3,913 550 34,087
Provisions
At 1 January 2004 27,811 4,804 — — 32,615
Made during the year 361——— 361
Transfers between items — (3,913) 3,913 — —
At 31 December 2004 28,172 891 3,913 — 32,976
Net book value
At 31 December 2004 61 500 — 550 1,111
At 31 December 2003 61 500 — — 561
The carrying values of investments in participating interests and loans to participating interests relate solely to joint ventures.
During the year the company acquired the whole of the issued share capital of Yeoman Group Plc and its subsidiaries. Details are
given in note 24.
During the year, the company’s investments in Mediamobile SA and Targa Trafficmaster SpA ceased to be accounted for as an
associate and joint venture respectively in accordance with FRS 9 “Associates and Joint Ventures” on the basis that Trafficmaster Plc
no longer exercises significant influence nor participates in the management and operating decisions of these companies. The
investments have subsequently been accounted for as trade investments. This has had no material impact on the results for the year . PAGE THIRTY-SEVEN
13. Investments continued
The principal companies in which the company’s interest at the year end is 20% or more are as follows:
Country of Principal Class and %
incorporation activity of shares held
Subsidiary Undertakings
Trackstar Limited Great Britain Telematics Ordinary 100%
Teletrac Incorporated United States of America Telematics Ordinary 100%
Telematica Systems Limited Great Britain Telematics Ordinary 100%
Yeoman Group Plc Great Britain Telematics Ordinary 100%
Trafficmaster Incorporated United States of America Non-trading Ordinary 100%
Trafficmaster USA Incorporated United States of America Non-trading Ordinary 100%
Exflinsy Limited Great Britain Non-trading Ordinary 100%
Trafficmaster Developments Limited Great Britain Non-trading Ordinary 100%
Fleetstar Information Systems SpA Italy Non-trading Ordinary 100%
Trafficmaster BV Netherlands Non-trading Ordinary 100%
Fleetstar Information Systems BV Netherlands Non-trading Ordinary 100%
Protechnica Consultants Limited Great Britain Non-trading Ordinary 100%
Trafficmaster Online.com Limited Great Britain Non-trading Ordinary 100%
Trafficmaster Passo GmbH Germany Non-trading Ordinary 100%
Trafficmaster Europe GmbH Germany Non-trading Ordinary 90%
Joint Ventures
Travel News Limited Great Britain Non-trading Ordinary 50%
RAC Trafficmaster Telematics Limited Great Britain Telematics Ordinary 50%
14. Stocks
Group Company
2004 2003 2004 2003
£000 £000 £000 £000
Raw materials and consumables 3,295 2,077 2,938 1,715
Finished goods for resale 3,613 2,406 1,684 1,146
6,908 4,483 4,622 2,861 
15. Debtors
Group Company
2004 2003 2004 2003
£000 £000 £000 £000
Trade debtors 9,176 4,941 3,050 1,355
Amounts owed by group undertakings — — 11,067 3,095
Amounts owed by joint ventures 33 24 33 574
Deferred tax asset 1,148 — 1,007 —
Other debtors 113 135 — —
Prepayments and accrued income 1,231 1,419 231 503
11,701 6,519 15,388 5,527
Included within the company total are debtors due from group undertakings amounting to £11,067,000 (2003: £3,095,000) and
debtors from joint ventures amounting to £nil (2003: £550,000) receivable after more than one year and the balance of £33,000
(2003: £24,000) within one year.
The deferred tax asset is expected to be recovered after more than one year from the balance sheet date (see note 18). 
NEW CHALLENGES_NEW DIRECTIONS TRAFFICMASTER ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004
PAGE THIRTY-EIGHT
Notes Forming Part of the Financial Statements continued
16. Creditors: amounts falling due within one year
Group Company
2004 2003 2004 2003
(as restated) (as restated)
£000 £000 £000 £000
Bank overdraft — 90 — —
Trade creditors 3,847 2,344 2,770 1,487
Amounts due to group undertakings — — 293 5
Amount due to joint venture — 13 — 13
Other taxes and social security 1,031 696 880 606
Accruals 2,122 3,751 490 1,485
Deferred income 2,747 1,721 1,166 562
9,747 8,615 5,599 4,158
17. Creditors: amounts falling due after more than one year
Group Company
2004 2003 2004 2003
(as restated) (as restated)
£000 £000 £000 £000
9% Secured senior notes payable — 8,434 — —
Deferred income 1,078 811 207 112
1,078 9,245 207 112
The secured senior notes were due for repayment in full on 1 October 2004.
On 13 January 2004 the group repaid the 9% secured senior notes and accrued interest for a total consideration of £6,592,000
resulting in a profit of £2,352,000, £233,000 of which relates to accrued interest waived. These loan notes were secured on the fixed
assets of subsidiary Teletrac Incorporated.
Deferred income relates to subscriptions received from customers in respect of future journey management services.
18. Provision for Liabilities and Charges
Deferred taxation
Group Company
£000 £000
At January 2004 ——
Credit to the profit and loss for the year (1,148) (1,007)
Asset at 31 December 2004 (1,148) (1,007)
The elements of deferred taxation are as follows:
Amount provided Amount unprovided
2004 2003 2004 2003
Group £000 £000 £000 £000
Accelerated capital allowances — — (520) (1,105)
Short-term timing differences — — (324) (103)
— — (844) (1,208)
Less losses (1,148) — (8,754) (6,526)
Deferred tax asset (1,148) — (9,598) (7,734) PAGE THIRTY-NINE
18. Provision for Liabilities and Charges continued
Amount provided Amount unprovided
2004 2003 2004 2003
Company £000 £000 £000 £000
Accelerated capital allowances — — (683) (1,097)
Short-term timing differences — — (37) (95)
— — (720) (1,192)
Less losses (1,007) — (5,599) (6,267)
Deferred tax asset (1,007) — (6,319) (7,459)
In 2003, the group and company did not recognise any deferred tax assets on the basis that the future economic benefit was
uncertain. The amounts unprovided in 2004 have not been recognised for the same reason. 
The deferred tax asset relating to trading losses has been recognised on the basis that the losses are expected to be used against future
trading profits in the next twelve months, the economic benefit of which will be derived after more than one year from the balance sheet
date.
19. Called Up Share Capital
2004 2003
£000 £000
Authorised:
Ordinary shares of 5 pence each 8,000 8,000
Allotted, called up and fully paid:
Ordinary shares of 5 pence each 6,743 6,294
On 6 January 2004 the company issued 6,292,637 ordinary shares for a net cash consideration of £3,829,824 in order to generate
funds to repay the secured senior notes and reduce group debt.
On 22 April 2004 the company issued 2,684,997 ordinary shares as purchase consideration on acquisition of Yeoman Group Plc as
disclosed in note 24. 
There is a contingent right to allot a total of 8,973,600 (2003: 8,055,600) ordinary shares of 5p each currently under share options.
These options are exercisable, if necessary performance criteria are satisfied, at varying dates between the date of this report and
2014. The exercise prices range from 8.75p to 563.5p per share. Directors’ options are set out on page 19 of this report.
Number Number Number
1998 Plan Approved Unapproved Total
At 1 January 2004 3,300,000 862,282 3,893,318 8,055,600
Granted — — 918,000 918,000
Lapsed ————
At 31 December 2004 3,300,000 862,282 4,811,318 8,973,600
20. Reserves
Share
Merger premium Profit and 
reserve account loss Total
Group £000 £000 £000 £000
At 1 January 2004 — 90,759 (78,713) 12,046
Profit for the year — — 5,921 5,921
Net exchange differences — — (376) (376)
Issue of ordinary share capital 1,973 3,515 — 5,488
At 31 December 2004 1,973 94,274 (73,168) 23,079
NEW CHALLENGES_NEW DIRECTIONS TRAFFICMASTER ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004
PAGE FORTY
Notes Forming Part of the Financial Statements continued
20. Reserves continued
Share
premium Profit and
account loss Total
Company £000 £000 £000
At 1 January 2004 90,759 (72,298) 18,461
Profit for the year — 820 820
Issue of ordinary share capital 3,515 — 3,515
At 31 December 2004 94,274 (71,478) 22,796
The parent company’s profit for the year amounted to £820,000 (2003: loss £1,343,000). 
On 22 April 2004, Trafficmaster Plc acquired the whole of the issued share capital of Yeoman Group Plc and its subsidiaries by the
issue of 2,684,997 ordinary 5p shares in Trafficmaster Plc (see note 24). In accordance with s131 of the Companies Act 1985, the
group has taken advantage of merger relief and credited a merger reserve with the excess of fair value of the shares issued over
nominal value. In the company accounts, the share issue and investment have been recorded at nominal value.
21. Reconciliations of Movements in Shareholders’ Funds
Group Company
2004 2003 2004 2003
£000 £000 £000 £000
Profit for the financial year 5,921 844 820 (1,343)
Other recognised gains and losses relating to the year (376) 73 — —
Issue of ordinary share capital 5,937 — 3,964 —
Net increase/(reduction) in shareholders’ funds 11,482 917 4,784 (1,343)
Equity shareholders’ funds at 1 January 2004 18,340 17,423 24,755 26,098
Equity shareholders’ funds at 31 December 2004 29,822 18,340 29,539 24,755
22. Financial Commitments
Land and Land and
buildings Other buildings Other
2004 2004 2003 2003
£000 £000 £000 £000
(a) Annual commitments under non-cancellable operating leases are as follows:
Group
Operating leases, which expire:
Within one year 602 6 ——
In the second to fifth years inclusive 656 70 480 —
Over five years —— 140 —
1,258 76 620 —
Company
Operating leases, which expire:
Within one year — 6 ——
In the second to fifth years inclusive 140 57 ——
Over five years —— 140 —
140 63 140 —
(b) Capital commitments at the end of the financial year, for which no provision has been made are as follows:
2004 2003
Group and Company £000 £000
Contracted 88 96 PAGE FORTY-ONE
23. Contingent Liabilities
The company and group have entered into a trade debt guarantee with Barclays Bank Plc to guarantee payments of £75,000 to one
of the group’s major trade suppliers. 
24. Purchase of Subsidiary Undertaking
On 22 April 2004 the group acquired Yeoman Group Plc and its subsidiaries for a consideration, including costs, of £2,334,000. The
resultant goodwill of £1,670,000 was capitalised and will be amortised over 10 years. This represents the expected lifetime of
Yeoman Group Plc current technology. Details of the acquisition are set out below:
Fair Value
£000
Tangible fixed assets 525
Debtors 284
Cash 351
Creditors due within one year (496)
Net assets 664
Consideration (including expenses) (2,334)
Goodwill (1,670)
One significant fair value adjustment of £525,000 has been recognised in relation to fixed assets in the course of construction. This
is included within infrastructure in the tangible fixed assets note (note 12).
The purchase was satisfied by: £000
Cash 226
Shares (2,684,997 shares issued by Trafficmaster Plc) 2,108
Total consideration 2,334
In the twelve months prior to acquisition, provisions of £160,000 were made for reorganisation and restructuring costs and these
are included within creditors above. 
Since acquisition, the subsidiaries have ceased to trade and consequently have had no significant impact on group cash flows. 
25. Reconciliation of Operating Profit to Net Cash Inflow from Operating Activities
2004 2003
(as restated)
£000 £000
Group operating profit for the year 2,403 2,249
Depreciation and amortisation 2,532 2,339
Release of impairment provision — (1,519)
Impairment of fixed assets — 305
Profit on disposal of fixed assets (24) (31)
Profit on disposal of current asset investment — (1,262)
(Increase)/decrease in stock (2,593) 1,409
Increase in debtors (4,105) (2,076)
Increase in creditors 1,845 1,262
Net cash inflow from operating activities 58 2,676
NEW CHALLENGES_NEW DIRECTIONS TRAFFICMASTER ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004
PAGE FORTY-TWO
Notes Forming Part of the Financial Statements continued
26. Analysis of Cash Flows for Headings Netted in Cash Flow Statement
2004 2003
(as restated)
£000 £000
Returns on investments and servicing of finance
Interest received 74 196
Interest paid (19) (1,001)
Net cash inflow/(outflow) from returns on investments and servicing of finance 55 (805)
Capital expenditure
Purchase of tangible fixed assets (1,732) (1,565)
Expenditure on development costs (1,784) (1,068)
Receipts from sale of fixed assets and current asset investment 240 2,546
Net cash outflow from capital expenditure (3,276) (87)
Acquisitions and disposals
Acquisition of subsidiary (226) —
Cash acquired with subsidiary 351 —
Net cash inflow from acquisitions and disposals 125 —
Management of liquid resources
Receipts/(payments) from/to fixed term deposit accounts 5,000 (2,000)
Financing
Issue of ordinary share capital 3,830 —
Repayment of secured senior notes (6,592) —
Repayment of term loan — (170)
Net cash outflow from financing (2,762) (170)
27. Analysis of Net (Debt)/Funds
At 1 Other At 31
January Exchange non-cash December
2004 Cash flow difference changes 2004
£000 £000 £000 £000 £000
Cash 2,331 (888) — — 1,443
Bank overdraft (90) 88 2 — —
2,241 (800) 2 — 1,443
Short-term deposits 5,000 (5,000) — — —
7,241 (5,800) 2 — 1,443
Debt due in more than one year (8,434) 6,592 (215) 2,057 —
(1,193) 792 (213) 2,057 1,443
28. Financial Instruments
The group’s principal financial instruments are borrowings for the purposes of funding operating activities. Other financial
instruments include cash at bank and short-term deposits.
The group’s policy is to finance its operations through a mixture of secured loan note borrowings, bank borrowings and cash at bank
and short-term deposits. The group does not trade in financial instruments. The main risks to arise from the group’s borrowings are
interest rate risk and foreign exchange risk. The policies which have been applied throughout the year are set out below: PAGE FORTY-THREE
28. Financial Instruments continued
a) Interest rate risk
The group achieves efficient use of its cash balances by placing term deposits with money market institutions. Typically, such
deposits are for periods not exceeding three months and carry a fixed rate of interest. The interest rates ranged between 2.78% and
4.53% during the year.
The group had a fixed interest rate 9% secured loan note denominated in US dollars due for repayment in October 2004. This was
redeemed in January 2004 (see note 17).
The group also has a total bank facility of £5,000,000 in sterling incorporating a bank overdraft, letter of credit facility and revolving credit
facility. This facility has not been used during the year and is in place until August 2009 and is subject to prevailing variable interest rates.
b) Foreign exchange risk
Approximately 26% of the group’s net assets are in currencies linked with US dollars and are generated by a trading subsidiary in
the USA.
Exposure to foreign currency exchange risks on normal sales and purchases is minimised by trading in the foreign subsidiaries’
local currencies wherever possible. The group does not hedge its foreign currency denominated trading cash flows. The group is
exposed to fluctuations in exchange rates on the translation of profits earned by its subsidiary in the USA. These profits are
translated at average exchange rates for the year which has a smoothing effect on short-term currency movements. Exchange
differences arising from the retranslation of the group’s investment in overseas subsidiaries are dealt with as a movement on
reserves and reported in the Consolidated Statement of Total Recognised Gains and Losses.
29. Related Party Transactions
The group has interests in Travel News Limited and RAC Trafficmaster Telematics Limited, which are joint ventures, and Tango
Mike Limited which is a joint arrangement that is not an entity.
Year to 31 December 2004 As at 31 December 2004
Purchases Amounts Amounts
Sales to from due from owed to
related related related related
parties parties parties parties
£000 £000 £000 £000
Joint ventures:
RAC Trafficmaster Telematics Ltd 1,161 27 583 —
Travel News Ltd ————
Joint arrangement that is not an entity:
Tango Mike Ltd — 17 255 —
Details of the principal subsidiary companies are shown in note 13. In accordance with FRS 8, transactions or balances between
group entities that have been eliminated on consolidation are not reported. 
Amounts due from RAC Trafficmaster Telematics Ltd include a long-term interest free loan of £550,000 which has no fixed
repayment date. This is included within investments.
Trafficmaster Plc owns 50% of the shares in Targa Trafficmaster SpA. During the year, sales of £139,000 and purchases of £76,000
were made to and from this company. At 31 December 2004, amounts owed to Targa Trafficmaster SpA were £30,000 and this is
included within trade creditors. 
Under the terms of a consultancy agreement, former director David Martell was paid a salary totalling £23,384 from the date of his
retirement as a director on 16 September 2004 until 31 December 2004.
30. Prior Year Adjustments
The 2003 comparative financial information has been restated to correct the treatment of certain items within the profit and loss
account and cash flow statement for the year. There has been no overall impact on the total operating profit of £1,349,000 or profit
before taxation of £549,000 as reported in 2003.
Profit and loss account
The profit and loss account for 2003 has been restated to increase group operating profit by £720,000 following the reclassification
of (i) a goodwill impairment charge of £928,000 relating to an associate (see note 3) and (ii) a credit totalling £208,000 relating to
the group’s share of operating losses in joint ventures (see note 3). The adjustments were necessary to ensure that the profit and
loss account is reported in accordance with Financial Reporting Standard 9, “Associates and Joint Ventures”.
NEW CHALLENGES_NEW DIRECTIONS TRAFFICMASTER ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004
PAGE FORTY-FOUR
Notes Forming Part of the Financial Statements continued
30. Prior Year Adjustments continued
The reconciliation of group operating profit to net cash inflow from operating activities for 2003 has been restated to reflect the
above increase in group operating profit, to reduce the impairment of fixed assets by £928,000 and to increase the increase in
creditors by £208,000.
The above restatements have had no impact on the balance sheet or the cash flow statement.
The profit and loss account for 2003 has also been restated to reclassify sales and marketing salaries within administrative
expenses of £411,000 to selling and distribution costs. This has resulted in an increase in selling and distribution costs in 2003 of
£411,000 and a corresponding reduction in administrative expenses.
This restatement has had no impact upon the overall profit for the year, nor the balance sheet or the cash flow statement.
Balance sheet
The group balance sheet has been restated in 2003 to disclose deferred income previously recorded separately on the face of the
balance sheet to within accruals as part of creditors due within and after more than one year in accordance with the Companies
Act 1985. This has resulted in an increase in creditors due within one year and a reduction in net current assets of £1,721,000, an
increase in creditors due after more than one year of £811,000 and a corresponding reduction in total deferred income of
£2,532,000. There has been no overall impact on total net assets, nor the profit and loss account or cash flow statement.
For the same reasons, the company balance sheet has been restated resulting in an increase in creditors due within one year of
£562,000 and creditors due after more than one year of £112,000, and a corresponding reduction in deferred income on the face of
the balance sheet of £674,000.
Cash flow statement
The cash flow statement has been restated to correct misstatements made in the 2003 financial statements. The original
statement showed an increase in cash in the year of £3,584,000 whereas a decrease in cash in the year of £386,000 should have
been reported. The misstatement arose from the incorrect treatment of a cash deposit of £2,000,000 made shortly before the year
end which was reported in error as an increase in cash from the management of liquid resources in the cash flow statement,
rather than as a decrease in cash due to the increase in liquid resources in the year. This resulted in a £4,000,000 overstatement of
the change in cash in the year.
In addition, the cash outflow in respect of financing reported in the cash flow statement had incorrectly included both the foreign
exchange effect of repaying loans within creditors and the movement of the bank overdraft. The cash flow has been restated to
change the £200,000 cash outflow in respect of financing in both the cash flow statement and the reconciliation of net cash flow to
movement in net debt to £170,000. This corrected a £30,000 misstatement in the movement in cash in the year.
There is no effect to the 2003 profit and loss account or balance sheet due to these misstatements. The analysis of net debt was
correctly shown in the 2003 financial statements.
The summary of changes is given in the table below.
Difference
As originally As (as explained
stated restated above)
£000 £000 £ 000
On the face of the consolidated cash flow statement:
Cash inflow before management of liquid resources and financing 1,784 1,784 —
Management of liquid resources 2,000 (2,000) (4,000)
Financing (200) (170) 30
Increase/(decrease) in cash in the year 3,584 (386) (3,970)
Reconciliation of net cash flow to movement in net debt:
Increase/(decrease) in cash in the year 3,584 (386) (3,970)
Cash outflow from repayment of debt 200 170 30
Decrease in short-term deposits (2,000) 2,000 (4,000)
Change in net debt arising from cash flows 1,784 1,784 —
Note 26. Analysis of cash flows for headings netted in cash flow statement:
Receipts from/(payments to) fixed term deposit account 2,000 (2,000) (4,000)
Repayment of term loan (200) (170) 30 PAGE FORTY-FIVE
Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Trafficmaster Plc will be held at Trafficmaster Plc, Martell House,
University Way, Cranfield, MK43 0TR on 16 June 2005 at 12.00 noon for the following purposes:
Ordinary Business: 
1. To receive and consider the Directors’ and Auditors' Reports and the Audited Accounts for the financial year ended 31 December
2004.
2. To approve the Directors’ Remuneration Report (as provided by the company pursuant to Section 241A of the Companies Act 1985
as amended (the "Act") and the Directors’ Remuneration Report Regulations 2002) contained within the Directors’ Report and
Audited Accounts for the financial year ended 31 December 2004.
3. To re-elect Colin Walsh as a director of the company (who retires by rotation pursuant to Article 107 of the Articles of Association
and who, being eligible, offers himself for re-election as a director).
4. To re-elect Tony Eales as a director of the company (who retires by rotation pursuant to Article 107 of the Articles of Association
and who, being eligible, offers himself for re-election as a director).
5. To re-elect Ian Williams as a Director of the company (who retires by rotation pursuant to Article 107 of the Articles of Association
and who, being eligible, offers himself for re-election as a director).
6. To reappoint KPMG Audit Plc as the auditors of the company to hold office from the conclusion of this meeting until the conclusion
of the next Annual General Meeting of the company, and to authorise the directors to fix the auditors’ remuneration. 
Special Business:
To consider and, if thought fit, pass the following Resolutions, of which Resolution No. 7 will be proposed as an Ordinary Resolution
and Resolution No. 8 will be proposed as a Special Resolution.
Ordinary Resolution
7. That:
(a) the directors be generally and unconditionally authorised pursuant to Section 80 of the Act to exercise all the powers of the
company to allot relevant securities up to an aggregate nominal amount equal to £1,256,981 (such authority to expire, unless
previously renewed, varied or revoked, at the earlier of the conclusion of the next Annual General Meeting of the company and
the date being 15 months from the date of the passing of this Resolution) but so that this authority shall allow the company to
make offers or agreements before the expiry of this authority which would or might require relevant securities to be allotted
after such expiry;
(b) all authorities previously conferred pursuant to Section 80 of the Act be and they are hereby revoked provided that such
revocation shall not have retrospective effect; and
(c) words and expressions defined in or for the purpose of Part IV of the Act shall bear the same meanings in this Resolution.
Special Resolution
8. That, subject to the passing of Resolution No. 7 above:
(a) the directors be given power pursuant to Section 95 of the Act (such power expiring at the same time as the authority granted
under Section 80 of the Act referred to in Resolution No. 7 above) to allot equity securities (within the meaning given In Section
94 of the Act) for cash pursuant to the authority given in accordance with Section 80 of the Act by Resolution No. 7 above as if
Section 89(1) of the Act did not apply to any such allotment provided that such power is limited to:
(i) the allotment of equity securities in connection with a rights issue or similar issue;
(ii) the allotment of equity securities pursuant to the terms of any share scheme for employees approved by the members of
the company in General Meeting; and
(iii) the allotment (otherwise than in the circumstances mentioned in subparagraphs (i) and (ii) above) of equity securities up to
a maximum aggregate nominal amount of £337,150 (representing 5 per cent of the issued share capital of the company at
the date of this Notice), save that the company may, before the expiry of this power, make an offer which would or might
require equity securities to be allotted after the expiry of this power and the directors may allot equity securities in
pursuance of such offer or agreement as if the power had not expired;
(b) all powers previously conferred pursuant to Section 95 of the Act be and they are hereby revoked provided that such
revocation shall not have retrospective effect; and
NEW CHALLENGES_NEW DIRECTIONS TRAFFICMASTER ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004
PAGE FORTY-SIX
Notice of Annual General Meeting continued
(c) for the purposes of paragraph 8(a)(i) above "rights issue or similar issue" means an offer or invitation to holders of
ordinary shares and such other equity securities of the company as the directors may determine on the register on a date
and open for acceptance for a period fixed by the directors in proportion (as nearly as may be practicable) to their
respective holdings of such securities or in accordance with the rights attached thereto, but the directors may:
(i) make such exclusions or other arrangements as they consider expedient in relation to fractional entitlements or legal or
practical problems under the laws in any territory outside the United Kingdom or the requirements of any relevant
regulatory body or stock exchange or otherwise howsoever; and
(ii) make such arrangements as they consider expedient for any equity securities attributable to the interests of any of those
holders and in respect of which such offer is not accepted to be allotted on terms that any sum paid by the subscriber in
excess of the price at which those equity securities were originally offered to those holders (net of expenses) shall belong
to those holders except for such amounts (not exceeding £3 in the case of any one holder) as the directors may decide to
retain for the benefit of the company;
(d) words and expressions defined in or for the purpose of Part IV of the Act shall bear the same meanings in this Resolution. 
By order of the board
Registered Office:
Martell House
University Way
Cranfield
Bedfordshire
MK43 OTR
Nigel Bond
Secretary
22 April 2005
NOTES:
1. Pursuant to Regulation 41(1) of the Uncertified Securities Regulations 2001, the company specifies that only those shareholders
registered in the Register of Members of the company as at 5.00 pm on 14 June 2005 (or, in the case of an adjournment, no later
than 48 hours before the time of the adjourned meeting) shall be entitled to attend or vote at the aforesaid Annual General Meeting
in respect of the number of shares registered in their name at that time. Changes to entries on the relevant register of securities
after that time will be disregarded in determining the rights of any person to attend or vote at the Annual General Meeting.
2. A shareholder entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and, on a poll, vote in his
stead. A proxy need not be a member of the company.
3. A form of proxy is enclosed and to be valid must be completed and lodged with the Registrars of the company, Capita Registrars,
The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU, not less than 48 hours before the time of the meeting.
4. Completion and return of the form of proxy will not preclude a member from attending and voting in person at the meeting if he or
she so wishes.
5. The Register of Directors’ Interests and copies of all directors’ service contracts between the directors and the company are
available for inspection by shareholders at the Registered Office of the company during normal business hours on any weekday
(Saturdays, Sundays and public holidays excluded) up to the close of the Annual General Meeting and for 15 minutes before and at
the meeting itself.
6. In accordance with Section 241A of the Companies Act 1985 and the Directors’ Remuneration Report Regulations 2002, the
directors’ remuneration report for the financial year must be put to a vote by shareholders. The Directors’ Remuneration Report
is set out on page 16 of the full Directors’ and Auditor’s Reports and Audited Accounts of the company for the financial year ended
31 December 2004.  Trafficmaster Plc
Martell House
University Way
Cranfield
Bedfordshire
MK43 0TR
www.trafficmaster .co.uk
Annual Report 
and Accounts
Year ended 31 December 2004
New challenges
New directions
TRAFFICMASTER ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004