More annual reports from Saferoads Holdings Limited:
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CONTENTS
Chairman’s Overview .............................................................................................................................................. 4
Chief Executive Officer’s Review of Operations and Activities ................................................................................ 6
The Year in Review.................................................................................................................................................... 8
Directors’ Report ...................................................................................................................................................... 12
Auditor’s Independence Declaration ....................................................................................................................... 18
Corporate Governance Statement........................................................................................................................... 19
Financial Statements ............................................................................................................................................... 20
Notes to the Financial Statements........................................................................................................................... 24
Directors’ Declaration .............................................................................................................................................. 42
Independent Auditor’s Report .................................................................................................................................. 43
ASX Additional Information ...................................................................................................................................... 45
Corporate Directory ................................................................................................................................................. 46
Improving public safety
Saferoads is an ASX listed company specialising in providing innovative safety solutions. Headquartered in
Pakenham, Victoria with representation across Australia, New Zealand and the USA, the company provides state
government departments, local councils, road construction companies and equipment hire companies with a broad
range of products and services designed to direct, protect, inform and illuminate for the public’s safety.
3
CHAIRMAN’S OVERVIEW
Dear Shareholder,
O P E R AT I O N S O V E R V I E W
On behalf of the board I am pleased to report a profit before tax and relocation costs of $50k compared with a
corresponding loss before tax of $90k for the previous financial year. This reflects the ongoing sustainable business
transformation and maintains a base platform to re-grow the business, having established a new headquarters during
the year.
Revenue from ongoing product sales, royalties and rentals was up 18% or $2.5 million signifying the positive efforts of
our sales force to provide value-add service offerings to our existing and new customers in what is still an exceedingly
competitive market environment. Whilst there has been minimal changes in overall margins due to the highly
competitive nature of the markets we operate in, our ability to deliver quality products and value-added solutions has
allowed us to increase our market share in certain sectors. We have maintained a tight focus on cost rationalisation
over the financial year but also selectively invested in areas which will provide greater longer term returns for the
Company through improving factory efficiency and productivity and also establishing international markets. This has
all led to the marginal improvement in overall profitability.
Finance cost reductions of 53% or $0.23 million resulted from the previous year’s significant debt reduction by means
of the rights issue and core bank debt reduced by a further $0.5 million (or 17%) to $2.5 million at 30 June 2016. We
now have a more acceptable gearing ratio (net debt to net debt plus equity) which reduced from 26.1% at June 2015
to 24.4% as at 30 June 2016.
We generated over $1.0 million in operating cash flows during the year, maintaining adequate cash reserves to
support the current working capital needs of the business as well as providing basic funding for our product innovation
projects which totalled $0.26 million for the year.
The table below summarizes the transformation over the past three financial years:
Revenue from product sales, royalties and rentals
Underlying EBIT*
Profit/(loss) before tax (excluding relocation costs)
Operating cash flows
Core bank debt **
Year ending 30 June
2014
$’000
12,894
(539)
(1,283)
(329)
(5,000)
2015
$’000
13,761
239
(90)
98
(3,000)
2016
$’000
16,269
260
50
1,022
(2,496)
* 2016 excludes relocation costs; 2015 excludes restructuring costs & 2014 R&D tax rebate booked in 2015; 2014 excludes restructuring costs
** excludes Plant & equipment hire purchase liabilities
4
S T R AT E G I C O P P O R T U N I T I E S
Having maintained an underlying positive earnings base in 2016, our main priority remains the growth in sales and profit.
Each of our product portfolios have key budget targets in their respective market sectors and a number of initiatives are
in play to continue the momentum achieved in the past financial year.
One of these initiatives relates to the increasing focus and use of alternative renewable energy sources by some of our
customers which has led us to introduce new product offerings such as solar public lighting solutions and portable solar
powered light towers for work zones.
Road infrastructure spending continues to grow, particularly on the eastern seaboard where there are major projects up
the east coast of the country that we are participating in. Our temporary barrier portfolio in particular has positioned itself
to take advantage of major road works along the Pacific Highway.
We are very pleased with the growth of our Public Lighting business, particularly its focus on the abovementioned
renewable energy (solar) lighting solutions. We retain a strong market share in Victoria with urban and residential street
lighting needs and have diversified into car park lighting as well.
As a result of our CEO, Mr Darren Hotchkin’s secondments to the USA during the financial year, we secured our first
international distribution agreement which realised an initial $0.36 million in royalties and an order worth around $0.3
million that is currently in progress and will be delivered within the next two months.
This is our initial step into the International arena and through the contacts that have been established in this region, we
anticipate further developments in this space over the coming year.
We remain focussed on product development and innovation and will continue to bring to market products with both
domestic and international sales potential. We’ve had encouraging initial sales of our flexible road-sign to numerous
local government authorities. The introduction of our temporary work zone rumble-strip to various State road authorities
and road contractors has reaped positive feedback from trial sites that this product has demonstrably delivered a real
reduction in traffic speeds in designated road work zones.
A C K N O W L E D G M E N T S
I would like to acknowledge the ongoing efforts and dedication of our staff who have not only had to work on continuing
to grow this business, but also had to plan and coordinate their activities around an office and warehouse relocation in
the first half of the financial year which now enables the Company to better service its growing customer base through
improved operational efficiencies.
I also wish to acknowledge the significant dedication and contribution from my fellow directors and senior management
team over the past year. Their expertise, clear thinking, industry insight and hard work has contributed to our ability
to execute the continued business transformation in what is still a difficult trading environment.
We are especially grateful to the CEO for his secondments to the United States during the year in building a greater
understanding and creating opportunities for that market and promoting our products to interested overseas parties.
This is an untapped market space for us and we anticipate further significant growth in the coming years.
Finally, I sincerely thank all our shareholders for their ongoing patience and continued support. Our primary focus
remains on substantially improving the financial performance and sustainability of your company.
David Ashmore
Chairman of the Board
5
CHIEF EXECUTIVE OFFICER’S REVIEW
OF OPERATIONS AND ACTIVITIES
P E R F O R M A N C E D U R I N G 2 0 1 5 - 2 0 1 6
I am very pleased to report that the Company has achieved another positive EBIT for the past financial year, which
included a relocation of our headquarters to outer metropolitan Melbourne.
The Company generated annual operating revenues of $16.3 million (FY2015: $15.2 million) and an EBIT before
relocation costs of $0.3 million (FY2015: $0.4 million). The past financial year was about continuing the momentum
in building sales in our four key product sectors – permanent roadside products, temporary work zone products,
public lighting solutions and work zone rentals. I’m pleased to report that we made significant inroads in all areas
by way of sales growth, production efficiency and/or market rationalisation as we continue to adapt our business to
ever-changing customer requirements. Our differentiator is that we are not just seen as a product supply business,
but as a valued advisor to those customers seeking solutions to sometimes quite complex logistical situations. It’s our
in-depth industry knowledge and experience and our broad network of industry players that position us to be one of
the premium providers of road safety solutions for any temporary or permanent purpose.
Whilst operating revenue increased 7%, this did not all convert to the bottom line as we invested in three key areas
of rationalisation and future growth potential.
Firstly, we made the decision to relocate to a new purpose-built facility closer to metropolitan Melbourne. The reasons
for this were threefold – it would allow us to consolidate from two production sites to one; it would reduce freight and
travel costs; and provide access to a broader supply chain base and employee talent pool for recruitment needs.
The overall relocation investment was $0.5 million, with $0.2 million expensed as relocation costs and a further $0.3
million of fitout, plant and equipment capitalised and financed.
Secondly, we instigated a strategy of exploring overseas market opportunities and initially targeted North America.
During two secondments to the West Coast of USA, we signed up one major international road safety hardware
company to distribute our IronmanTM barrier products, realising an initial royalty of $0.3 million and an additional
sublicence arrangement for a region in the People’s Republic of China.
Thirdly, we have recruited a senior production manager to further improve factory efficiency, productivity and cost
savings. This initiative has already realised some savings through rationalising our supplier base, and improving lead
times in delivering orders to customers.
Our roadside products portfolio reported annual revenue growth of 10% with improved results in our rubber traffic
calming product range and the introduction of our new flexible signage offering. In addition, we secured positive
feedback on initial sales and trials of our portable rumble strip product – Roadquake – and anticipate formal State
road authority approvals and supporting specifications in the coming months.
Our temporary work zone products portfolio achieved annual revenue growth of 4%, with significant contracts for
our exclusively licensed concrete barrier solution, the T-LOK barrier. We also had increased sales with our variable
messaging sign (“VMS”) trailers and we have now launched our proprietary VMS web-based management platform
– Zone2.
Our IronmanTM Hybrid barrier rental portfolio suffered from market pressures as the major competitors reduced rental
rates significantly to boost utilisation. However, utilisation rates improved towards the end of the financial year as we
targeted niche second-tier road contractors requiring a more flexible barrier offering and deployment solution whereby
the contractor could rely on our expertise for their work zone barrier needs. This has seen a dramatic improvement
in our overall rental rates and utilisation with us achieving record monthly rental income from this product portfolio in
the first month of this financial year.
Our Public Lighting solutions portfolio maintained the previous year’s momentum and grew another 39% in 2016 on the
back of established customer relationships and introducing new customers to our market leading supply and delivery
service. In addition, we introduced a new solar lighting solution, targeted at the local government market in addressing
issues associated with providing more secure public spaces in a more environmentally friendly way. We have partnered
with a major international solar lighting provider to provide this unique offering which is gaining traction.
6
We continued our focus on innovative product research and development during the year and have invested in a
sophisticated product performance and simulation software program to assist in reducing the time and costs involved
with the creation of new high performance products. We have a number of projects we are currently working on to
improve existing products and/or developing new products in response to the changing road safety environment
for testing and commercialisation. We continue to fund these through a combination of working capital and funds
received as part of the Australian Government’s Research and Development tax rebate program. We believe it is
imperative we maintain this innovative approach to our business where we are seeing an increasing predominance of
imported products. We are striving to generate our own intellectual property and therefore keep government funds in
Australia (with Australian-owned companies and employees) rather than going to offshore shareholders and workers.
L O O K I N G A H E A D
We anticipate another year of modest profitability gain as there continues to be pressure on all levels of government
(ultimately the end asset owner) to optimise expenditure on road infrastructure.
The steps we continue to take to improve productivity should enable us to maintain our operating margins in what will
remain a very challenging domestic market, where all significant sales are won through a competitive tender/quote
process.
Our public lighting and rental barrier businesses are in strong growth phases that will require our careful allocation
of additional working capital. Combining this with the launch of our new VMS products, we should more than sustain
our overall sales levels.
We will keep building on the achievements made to date on our international markets expansion. There is encouraging
interest from other overseas parties in our patented products and we anticipate more distribution agreements with
overseas parties.
Finally, I would like to acknowledge the support of my fellow Directors, Senior Management Team and our staff, who
have worked tirelessly to achieve another positive underlying result, despite the distraction of the relocation to a new
facility. This should set us up to further enable the business to continue its transformation of improvement for the
foreseeable future.
Darren Hotchkin
Chief Executive Officer
7
THE YEAR IN REVIEW
Saferoads has been involved in a number of projects with its innovative solutions over the past financial year. A
sample of these are outlined below.
S O L A R P U B L I C L I G H T I N G
Gympie Regional Council in Queensland have installed Saferoads solar powered
LED street lights adjacent to a public pathway network to improve night time use.
The pathway is a trunk pedestrian route for the Southside of Gympie and the
section of pathway had no street lighting for approximately 500 metres. The area
is not serviced by mains supply power and installation of such would require the
removal of significant vegetation, or an expensive underground supply.
The Saferoads solar lighting solution was chosen because:
it provided light duration of 23-30 hours without charge
•
the light can be programmed to dim after specified times
•
there are no overhead supply wires
•
it has a low-carbon foot-print - one solar street light saves about
•
1 ton of CO2 per year
there is no heavy metal in the LED fixtures
it supports crime prevention through environmental design
(CPTED)
•
•
I R O N M A N T M H Y B R I D B A R R I E R S O L U T I O N
In February 2016, Ace Contractors were awarded the Cardinia Road Upgrade Project
in Officer, Victoria.
Included in their scope of works was a roundabout, tight intersections and several
stages where barriers needed tapers, flexibility and the ability to work around some
fairly tight curves.
After many meetings with the road authority, a final Traffic Management Plan was agreed upon, which included the
optimal use of the IronmanTM Hybrid product, with various End Treatment solutions and the best utilisation of the
many features of the barrier.
Project Manager, Pawel Bankowski said “We sought barrier solutions and proposals from several companies.
Choosing Saferoads came down to three distinct factors in the end:
• The product needed to achieve minimum deflection at the speed and likely impact angle;
• We needed to achieve a tight radius through the roundabout section of our project; and
• We required a comprehensive deployment solution.
“Saferoads have delivered a very suitable product at competitive rates and are specialists in their field.”
8
I R O N M A N T M H Y B R I D B A R R I E R S O L U T I O N
In April 2016, Bitu-mill were awarded a project to construct a 1.5 km
long overtaking lane on the Calder Highway, Nowingi (south of Mildura,
Victoria). The methodology adopted by Bitu-mill included the team
working in 500 metre sections at a time on the busy section of the
highway.
In evaluating the barrier options it became evident that they needed a product that:
• was economical to freight
• had reasonably strong deflection performance
which offered the contractor a close working
proximity; and
• provided a flexible enough option to move and
relocate with the staging within the construction
program
Project manager, Doug Warren said “Saferoads were
able to provide Bitu-Mill with an efficient barrier solution,
a high quality deployment service and overall barrier and
compliance expertise that we value highly.”
F L E X L O C G U I D E P O S T S A F E T Y I N S T A L L A T I O N S O L U T I O N S
After working closely with a number of Councils and
a variety of Government bodies, it was apparent that
there was a need to improve the deployment of roadside
guideposts. As a result, Saferoads developed an
aluminium trailer designed to securely hold a pallet of
Flexloc guideposts and a lockable toolbox to store all the
relevant tools and sockets.
One great innovation with the Flexloc trailer is that once
the pallet is loaded, the back doors can be closed and
the side-door access allows installers to work from the
side of the road to keep an eye out for oncoming traffic.
Another advantage is that at any given time the trailer is
geared up and ready to go, making the operations side of
installing roadside guideposts much more efficient.
9
THE YEAR IN REVIEW
R O A D Q U A K E T E M P O R A R Y P O R TA B L E R U M B L E S T R I P S
In the previous year we introduced a new, innovative product in the form of
Temporary Portable Rumble Strips (“TPRS”). The RoadQuake solution has
now been extensively tested and trialled in New South Wales and Western
Australia with great success and we are now carrying out extensive trials in
Queensland and Victoria.
The RoadQuake TPRS is mainly designed to alert distracted drivers of upcoming
road conditions however, all the data collected so far through these trials has
indicated a reduction in speed which has been a tremendous bonus to make
our roads and work zones safer. In a MainRoads WA approved trial carried out
by Fulton Hogan, the speeds on average dropped by approximately 8 km/h at all sites tested. They were found to be
quick and easy to install and were very effective in alerting drivers for the road works ahead.
Up until this point in time the trials have been carried out in rural conditions. The upcoming trials in Queensland are
set to break new ground in Australia with a growing need for the added safety of such a device to be used in multi-lane
metropolitan situations. The growing need to reduce accidents in work zone incidents is paramount to Saferoads.
T- L O K B A R R I E R S O N W E B B D O C K P R O J E C T
Saferoads has just completed supplying custom T-LOK concrete barriers to
BMD Constructions for stage 1 of the new Webb Dock fully automated container
terminal in Melbourne.
constructions
The ability to customise the T-LOK barrier design with our in-house engineering
team allowed us to work with the customer’s engineers to build a custom T-LOK barrier to separate the Automated
Container Carriers (“ACC”) from other traffic and pedestrian areas at the terminal.
The custom T-LOK barriers included large reinforced galvanised fork ports, additional structural reinforcing, top
mount fence ferrules, high-visibility paint scheme, and high-strength fence panels.
Custom corner blocks have also been supplied to provide a continuous interlocking system through 90 degree corners.
10
R E L O C AT I O N T O PA K E N H A M , V I C T O R I A
After being based in the Warragul / Drouin area in West Gippsland, Victoria since the company was founded,
Saferoads made the move closer to Melbourne in late November 2015.
This was to allow us to take advantage of various synergies and savings including the consolidation from two sites to
a single site, reduced freight and travel costs and access to a broader supply chain base and employee talent pool
for future recruitment needs.
The lease of our Drouin premises had expired and the Company entered into a 10 year lease of a new purpose-built
facility in Pakenham, incorporating office, warehouse, assembly and hardstand yard.
TO THIS:
11
DIRECTORS’ REPORT
Your Directors submit their report for the year ended 30 June 2016.
DIRECTORS
David Ashmore
Non-Executive Chairman
Appointed 22 November 2012
Darren Hotchkin
Executive Director (CEO)
Appointed 21 October 2005
David Cleland
Non-Executive Director
Appointed 1 December 2010
DIRECTOR PROFILES
David Ashmore (Age 64) (FCA GAICD F.FIN)
Non-Executive Director
(Appointed Non-Executive Chairman 19 August 2013)
David Ashmore was appointed to the Board on 22 November 2012 and was re-elected at the November 2013
and October 2015 AGM’s. He was appointed Chairman of the Board on 19 August 2013. He is a member of the
Remuneration Committee (appointed Chairman of this Committee on 19 August 2013) and the Audit and Risk
Committee (as Chairman up to 19 August 2013).
David is a career Chartered Accountant with 40 years of professional public practice experience focussed on audit,
finance, due diligence, risk and governance advisory. David has worked with many dynamic private and public
companies where his experience has assisted them understanding their underlying financial position, their financial
management issues and business growth challenges. Those challenges typically included the development
of sustainable executive management structures and business value building initiatives. He also has significant
experience with the identification and management of financial and business risks and the development of structured
business decision making protocols.
David has considerable experience in a leadership and a chairman role through his work on numerous Audit Committee
appointments and as a Senior Partner, Board Member and Practice Leader. He is a Fellow of the Institute Chartered
Accountants in Australia, a Graduate member of the Australian Institute of Company Directors and a Fellow of the
Financial Services Institute of Australia.
Directorships of other listed companies during the preceding three years: Respiri Limited (formerly iSonia Limited).
Darren Hotchkin (Age 52)
Executive Director/Chief Executive Officer
Darren Hotchkin was appointed to the Board on 21 October 2005 as Managing Director. On 7 February 2011 he
stepped aside as Managing Director but remained on the Board as a Non-Executive Director and was re-elected at
the October 2011 and November 2013 AGM’s. He was appointed acting Chief Executive Officer on 10 April 2012 and
formal Chief Executive Officer on 30 June 2012.
Darren is the founder of Saferoads. He has a background in the automotive industry where he owned and operated
several businesses. In 1992 he founded the company now trading as our wholly-owned subsidiary, Saferoads Pty
Ltd, to commercialise his invention of a rubber guide post, manufactured from recycled car tyres.
As Chief Executive Officer, Darren’s key contribution to the business is in the strategic development of the Company’s
product range and manufacturing processes as well as in business development. He continues to be active in
Research and Development and in seeking to effectively expand the Company’s product base through international
research of products which have the potential to find a sustainable place in the Australian market. Darren is also an
eagerly sought-after international expert speaker on road safety barriers, having presented at various International
Road Federation conferences.
Darren has not served as a Director of any other listed companies during the preceding three years.
12
David Cleland (Age 71) (Dip.ME GAICD FIE (retired))
Non-Executive Director
David Cleland was appointed to the Board on 1 December 2010 and was re-elected at the October 2011 and
November 2014 AGM’s. He was appointed acting Chief Executive Officer on 28 November 2011, handing over the
role to Darren Hotchkin on 10 April 2012. He is a member of the Audit and Risk Committee (becoming Chairman of
this Committee on 19 August 2013) and the Remuneration Committee.
David is a mechanical engineer with extensive experience as Chief Executive Officer of companies manufacturing
and distributing industrial products. His career includes manufacturing experience (including lean manufacturing),
brand management, product research and development, outsourcing and company mergers and acquisitions. He
was formerly an inaugural trust member of the Greater Metropolitan Cemeteries Trust and is a Director of a privately
owned company.
David has not served as a Director of any other listed companies during the preceding three years.
COMPANY SECRETARIES
Sonia Joksimovic
(appointed 10 August 2015)
Sonia joined Saferoads on 10 August 2015. Sonia is an experienced Chartered Secretary with over 8 years’ experience
across listed small caps, unlisted and private companies, specializing in governance and compliance matters.
Elissa Hansen
(appointed 10 October 2013, resigned 10 August 2015)
Elissa was Company Secretary of Saferoads from 10 October 2013 to 10 August 2015 where she was employed
by Boardroom Pty Ltd, the company which formerly managed Saferoads’ share registry. Elissa is an experienced
Chartered Secretary with over 15 years’ experience advising management and boards on investor relations,
governance, compliance and other corporate issues.
KEY MANAGEMENT PROFILES
Peter Fearns
Chief Financial Officer
Peter joined Saferoads in December 2011. He has over 15 years’ experience managing finance functions in the
information technology, infrastructure and professional services sectors, covering both public listed and private
companies.
He was Group Financial Controller of ASX listed UXC Limited. His most recent appointment was Chief Financial Officer
of a national privately-owned urban planning and property advisory business.
Peter holds a Bachelor of Business (Accounting) and is a CPA.
INTEREST IN SHARES
As at the date of this report, Directors’ interests in the shares of the Company are:
NAME
David Ashmore
Darren Hotchkin
David Cleland
SHARES
1,256,807
7,479,885
508,610
DIVIDENDS
No interim or final dividend was paid or declared for the financial year ended 30 June 2016.
No interim or final dividend was declared or paid for the financial year ended 30 June 2015.
13
DIRECTORS’ REPORT
PRINCIPAL ACTIVITIES
The principal activity of the Group continued to be the provision of road safety products and solutions primarily to
end users.
Products and services the Company provides includes flexible guide posts and signage; rubber-based traffic calming
products including separation kerbing and wheel stops; variable messaging sign boards; decorative and standard
street and major road light poles; permanent and temporary crash cushions including bollards and safety barriers.
In all its activities, the Company remains focused on providing innovative products and materials that protect the
safety of all road users – motorists, road construction workers and pedestrians.
REVIEW AND RESULTS OF OPERATIONS
A review of the operations and activities of the Company during the financial period and the results of these operations
is set out in the Chairman’s Overview and Chief Executive Officer’s Review of Operations and Activities.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
During the 2015-16 year, there has been no significant change in the Company’s state of affairs other than as
disclosed in this financial report.
SIGNIFICANT EVENTS AFTER REPORTING DATE
There has been no matter or circumstance, which has arisen since 30 June 2016 that has significantly affected or
may significantly affect the operations of the consolidated entity or the results of those operations or the state of
affairs of the consolidated entity.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Likely developments in the operations of the entity and the expected results of these operations have been set out in
the Chairman’s Overview and the Chief Executive Officer’s Review of Operations and Activities.
INDEMNIFICATION AND INSURANCE OF DIRECTORS, OFFICERS AND AUDITORS
During the year, Directors’ and Officers’ insurance premiums were paid for any person who was a Director and/or
Officer of the Company.
The Group has not agreed to indemnify its auditors, Grant Thornton.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Company’s operations are not regulated by any significant environmental regulations under a law of the
Commonwealth or of a state or territory. In respect of its own activities, the Company is not a major emitter of
greenhouse gases and falls well below the reporting thresholds set by the National Greenhouse and Energy Reporting
Act 2007.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
OPTIONS
At the date of this report there were no un-issued shares of the company under option.
14
R E M U N E R AT I O N R E P O R T
The Company’s remuneration policy is to ensure that the level of remuneration paid to key personnel is market
competitive and will help to attract and retain the skills and expertise required. To determine what is a competitive
level of remuneration the Company refers to the Australian Institute of Management Salary Survey and to information
provided by other professional organisations.
REMUNERATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL
NON-EXECUTIVE DIRECTORS
Total remuneration for non-executive Directors for 2015-16 was $147,500. Their remuneration packages comprised
only fixed Directors’ fees plus statutory superannuation (where applicable) and were within the limits set out in the
Company’s constitution. Currently this limit is set at $350,000 per annum, and can only be changed at a general
meeting.
EXECUTIVE DIRECTOR
Mr Darren Hotchkin, Chief Executive Officer, received total remuneration of $340,000 including a component of the
remuneration covering his secondment to the USA for part of the financial year to establish business opportunities
in that market.
Note, Mr Hotchkin’s actual working hours in the prior year were reduced which resulted in a lower level of remuneration.
KEY MANAGEMENT PERSONNEL
Key Management Personnel (“KMP”) is defined by AASB 124 - Related Party Disclosures. Only Directors and
Executive Management that have the authority and responsibility for planning, directing and controlling the activities
of Saferoads, directly or indirectly and are responsible for the entity’s governance are classified as KMP.
PERFORMANCE-BASED REMUNERATION
Performance-based remuneration (bonus incentives) for Key management personnel (apart from Mr Hotchkin) for
the year ended 30 June 2016 was based on the Company performance (PBT) exceeding budget. As the Company
did not exceed budgeted PBT for FY2016, there was no performance-based remuneration (bonus incentives) paid or
payable to key management personnel for the year.
A summary of Company performance for the past five financial years is below.
EPS (cents)
2016
(0.3)
2015
(0.2)
2014
(3.6)
2013
(5.3)
2012
(35.5)
Net profit/(loss) ($)
(116,082)
(72,228)
(930,978)
(1,388,899)
(9,219,362)
Share price ($)
$0.13
$0.10
$0.13
$0.06
$0.09
EMPLOYMENT CONTRACTS
Executive employment agreements have been entered into with the Chief Executive Officer, the Chief Financial
Officer, and other Key Management Personnel as disclosed. These agreements are of a standard form containing
provisions of confidentiality and restraint of trade usually required in such agreements. Payments to be made on
termination of an executive employment contract have been clearly detailed and are limited to payout of accrued
leave entitlements and up to three months’ salary as redundancy or termination pay.
15
DIRECTORS’ REPORT
REMUNERATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL
30 June 2016
Short Term
Salaries &
Fees
Fringe
Benefits
Cash
Bonus
Termination
Payment
Super-
annuation
$
$
$
$
$
Long
Term
Long
Service
Leave
$
Total
Perfor-
mance
Related
Share
Based
Payment
Options
$
$
%
Non
Executive
Directors
D Ashmore
D Cleland
Executive
Director
D Hotchkin
Executive*
P Fearns
Total
47,283
65,000
340,000
170,250
622,533
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
35,217
-
-
-
-
-
20,554
55,771
3,162
3,162
-
-
-
-
-
82,500
65,000
340,000
193,966
681,466
-
-
-
-
-
* Key management personnel is defined as those persons having authority and responsibility for planning, directing and controlling the activities
of the entity, directly or indirectly.
30 June 2015
Short Term
Salaries &
Fees
Fringe
Benefits
Cash
Bonus
Termination
Payment
Super-
annuation
$
$
$
$
$
Long
Term
Long
Service
Leave
$
Total
Perfor-
mance
Related
Share
Based
Payment
Options
$
$
%
Non
Executive
Director
D Ashmore
D Cleland
Executive
Director
D Hotchkin
Executive
P Fearns
Total
45,000
60,000
100,000
170,000
375,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
35,000
-
9,500
-
-
-
16,150
60,650
2,833
2,833
-
-
-
-
-
80,000
60,000
109,500
188,983
438,483
-
-
-
-
-
SHAREHOLDINGS OF KEY MANAGEMENT PERSONNEL
Shares held in Saferoads Holdings Limited:
Balance at
1 July 2015
Acquired through
On-Market trade
Sold
Balance at
30 June 2016
7,479,885
1,159,911
408,610
18,000
9,066,406
-
96,896
100,000
15,000
211,896
-
-
-
-
-
7,479,885
1,256,807
508,610
33,000
9,278,302
Directors
D Hotchkin
D Ashmore
D Cleland
Executive
P Fearns
Total
16
All equity transactions with Key Management Personnel have been entered into under terms and conditions no more
favourable than those the entity would have adopted if dealing at arm’s length.
DIRECTORS’ MEETINGS
The number of meetings of Directors (including meetings of committees of Directors) held during the year, and the
numbers of meeting attended by each Director, were as follows:
Names
Directors
Audit & Risk
Remuneration / Nomination
Eligible
Attended
Eligible
Attended
Eligible
Attended
Mr D Ashmore
Mr D Hotchkin
Mr D Cleland
12
12
12
12
12
12
3
-
3
3
-
3
1
-
1
1
-
1
NON-AUDIT SERVICES
During the year, Grant Thornton, the Company’s auditors, performed certain other services in addition to their
statutory audit duties.
The Board has considered the non-audit services provided during the year by the auditor and, in accordance with
written advice provided by resolution of the Audit and Risk Committee, is satisfied that the provision of those non-
audit services during the year is compatible with, and did not compromise, the auditor independence requirements of
the Corporations Act 2001 for the following reasons:
-
-
all non-audit services were subject to the corporate governance procedures adopted by the Company and
have been reviewed by the Audit and Risk Committee to ensure they do not impact upon the impartiality and
objectivity of the auditor
the non-audit services do not undermine the general principles relating to auditor independence as set out in
APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s
own work, acting in a management or decision-making capacity for the Company, acting as an advocate for the
Company or jointly sharing risks and rewards.
Details of the amounts paid to the auditors of the Company, Grant Thornton, and its related practices for audit and
non-audit services provided during the year are set out in Note 21 to the financial statements.
ROUNDING OF AMOUNTS
Saferoads Holdings Limited is a type of Company that is referred to in ASIC Corporations (Rounding in Financial/
Directors’ Reports) Instrument 2016/191 and therefore the amounts contained in this report and in the financial
report have been rounded to the nearest dollar.
AUDITOR’S INDEPENDENCE DECLARATION
The attached independence declaration has been obtained from the Company’s auditors, Grant Thornton.
Signed in accordance with a resolution of Directors.
David Ashmore
Director
25 August 2016
17
AUDITOR’S INDEPENDENCE DECLARATION
The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000
The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000
Correspondence to:
Correspondence to:
GPO Box 4736
GPO Box 4736
Melbourne Victoria 3001
Melbourne Victoria 3001
T +61 3 8320 2222
T +61 3 8320 2222
F +61 3 8320 2200
F +61 3 8320 2200
E info.vic@au.gt.com
E info.vic@au.gt.com
W www.grantthornton.com.au
W www.grantthornton.com.au
The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000
Auditor’s Independence Declaration
Auditor’s Independence Declaration
To the Directors of Saferoads Holdings Limited
To the Directors of Saferoads Holdings Limited
Correspondence to:
GPO Box 4736
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead
Melbourne Victoria 3001
auditor for the audit of Saferoads Holdings Limited for the year ended 30 June 2016, I
auditor for the audit of Saferoads Holdings Limited for the year ended 30 June 2016, I
declare that, to the best of my knowledge and belief, there have been:
declare that, to the best of my knowledge and belief, there have been:
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
a
a
no contraventions of the auditor independence requirements of the Corporations Act
no contraventions of the auditor independence requirements of the Corporations Act
2001 in relation to the audit; and
2001 in relation to the audit; and
Auditor’s Independence Declaration
To the Directors of Saferoads Holdings Limited
b
b
no contraventions of any applicable code of professional conduct in relation to the
no contraventions of any applicable code of professional conduct in relation to the
audit.
audit.
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead
auditor for the audit of Saferoads Holdings Limited for the year ended 30 June 2014, I
declare that, to the best of my knowledge and belief, there have been:
a
no contraventions of the auditor independence requirements of the Corporations Act
2001 in relation to the audit; and
GRANT THORNTON AUDIT PTY LTD
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
Chartered Accountants
b
no contraventions of any applicable code of professional conduct in relation to the
audit.
M. A. Cunningham
M. A. Cunningham
Partner - Audit & Assurance
Partner - Audit & Assurance
Melbourne, 25 August 2016
Melbourne, 25 August 2016
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
Grant Thornton Audit Pty Ltd ACN 130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
M. A. Cunningham
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
Partner - Audit & Assurance
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Melbourne, 27 August 2014
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
scheme applies.
scheme applies.
Page 18
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
18
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
scheme applies.
CORPORATE GOVERNANCE STATEMENT
The Board of Directors of Saferoads Holdings Limited is responsible for the corporate governance of the Saferoads
group. The Board has considered the ASX Corporate Governance Principles and Recommendations (“ASX
Governance Principles”) and reports on compliance with these Principles.
The Board’s objective is to ensure investor confidence in the Company and its operations given its size, stage of
development and complexity.
The Company’s Corporate Governance Charter is located on the Company’s website (www.saferoads.com.au) under
the Investor Relations icon.
The Board advises that it complies with the ASX Corporate Governance Principles set out on the Company’s website
(www.saferoads.com.au) under the Investor Relations icon.
19
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Consolidated Statement of Profit or Loss and Other Comprehensive
Consolidated Statement of Profit or Loss and Other Comprehensive
FOR THE YEAR ENDED 30 JUNE 2016
FOR THE YEAR ENDED 30 JUNE 2016
Income
Income
Notes
Notes
CONSOLIDATED
CONSOLIDATED
2016
2016
$
$
2015
2015
$
$
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
5
5
6
6
6
6
7
7
16,268,750
16,268,750
-
-
16,268,750
16,268,750
(10,219,077)
(10,219,077)
(103,247)
(103,247)
13,760,783
13,760,783
1,434,798
1,434,798
15,195,581
15,195,581
(9,687,461)
(9,687,461)
(120,596)
(120,596)
5,946,426
5,946,426
5,387,524
5,387,524
113,359
113,359
(3,230,079)
(3,230,079)
(450,878)
(450,878)
(209,988)
(209,988)
(143,533)
(143,533)
(352,703)
(352,703)
(308,140)
(308,140)
(155,863)
(155,863)
(207,037)
(207,037)
-
-
(1,158,624)
(1,158,624)
335,535
335,535
(2,800,130)
(2,800,130)
(461,602)
(461,602)
(443,337)
(443,337)
(214,383)
(214,383)
(311,487)
(311,487)
(139,468)
(139,468)
(178,745)
(178,745)
-
-
(56,610)
(56,610)
(1,207,501)
(1,207,501)
(157,060)
(157,060)
(90,204)
(90,204)
40,978
40,978
17,976
17,976
(116,082)
(116,082)
(72,228)
(72,228)
(116,082)
(116,082)
(72,228)
(72,228)
-
-
(177)
(177)
(116,082)
(116,082)
(72,405)
(72,405)
(116,082)
(116,082)
(72,405)
(72,405)
Cents
Cents
(0.32)
(0.32)
(0.32)
(0.32)
Cents
Cents
(0.23)
(0.23)
(0.23)
(0.23)
- -
- -
Revenue from product sales, royalties and rentals
Revenue from product sales, royalties and rentals
Revenue from civil services
Revenue from civil services
Cost of direct materials and labour
Cost of direct materials and labour
Movement in inventories
Movement in inventories
Gross profit
Gross profit
Other income
Other income
Employee benefits
Employee benefits
Depreciation, amortisation and impairment of plant & equipment
Depreciation, amortisation and impairment of plant & equipment
Finance costs
Finance costs
Motor vehicle costs
Motor vehicle costs
Occupancy costs
Occupancy costs
Travel and accommodation costs
Travel and accommodation costs
IT & Communications costs
IT & Communications costs
Relocation costs
Relocation costs
Restructuring costs
Restructuring costs
Other expenses
Other expenses
Profit/(loss) before income tax
Profit/(loss) before income tax
Income tax benefit/(expense)
Income tax benefit/(expense)
Net profit/(loss) for the period
Net profit/(loss) for the period
Net profit/(loss) attributable to members of the parent
Net profit/(loss) attributable to members of the parent
Other comprehensive income
Other comprehensive income
Items that may be classified subsequently to profit or loss
Items that may be classified subsequently to profit or loss
Exchange differences on translating foreign controlled entity
Exchange differences on translating foreign controlled entity
Total comprehensive income for the period
Total comprehensive income for the period
Total comprehensive income attributable to members of the
Total comprehensive income attributable to members of the
parent
parent
Earnings per share
Earnings per share
- Basic for profit/(loss) for the full year
- Basic for profit/(loss) for the full year
- Diluted for profit/(loss) for the full year
- Diluted for profit/(loss) for the full year
Dividend paid per share (cents)
Dividend paid per share (cents)
The accompanying notes form part of these financial statements
The accompanying notes form part of these financial statements
Page 21
Page 21
20
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Consolidated Statement of Financial Position
Consolidated Statement of Financial Position
AS AT 30 JUNE 2016
AS AT 30 JUNE 2016
ASSETS
ASSETS
Current Assets
Current Assets
Cash and cash equivalents
Cash and cash equivalents
Trade and other receivables
Trade and other receivables
Inventories
Inventories
Prepayments
Prepayments
Total Current Assets
Total Current Assets
Non-current Assets
Non-current Assets
Plant and equipment
Plant and equipment
Intangible assets
Intangible assets
Deferred tax assets
Deferred tax assets
Other non-current assets
Other non-current assets
Total Non-current Assets
Total Non-current Assets
TOTAL ASSETS
TOTAL ASSETS
LIABILITIES
LIABILITIES
Current Liabilities
Current Liabilities
Trade and other payables
Trade and other payables
Unearned income
Unearned income
Interest-bearing loans and borrowings
Interest-bearing loans and borrowings
Provisions
Provisions
Total Current Liabilities
Total Current Liabilities
Non-current Liabilities
Non-current Liabilities
Interest-bearing loans and borrowings
Interest-bearing loans and borrowings
Provisions
Provisions
Total Non-current Liabilities
Total Non-current Liabilities
TOTAL LIABILITIES
TOTAL LIABILITIES
NET ASSETS
NET ASSETS
EQUITY
EQUITY
Contributed equity
Contributed equity
Retained earnings
Retained earnings
TOTAL EQUITY
TOTAL EQUITY
The accompanying notes form part of these financial statements
The accompanying notes form part of these financial statements
Notes
Notes
CONSOLIDATED
CONSOLIDATED
2016
2016
$
$
2015
2015
$
$
9
9
10
10
11
11
12
12
5
5
13
13
14
14
15
15
14
14
15
15
16
16
16
16
808,395
808,395
3,462,035
3,462,035
2,649,939
2,649,939
176,297
176,297
7,096,666
7,096,666
720,184
720,184
3,559,759
3,559,759
2,753,186
2,753,186
197,152
197,152
7,230,281
7,230,281
3,474,070
3,474,070
771,802
771,802
1,292,540
1,292,540
17,917
17,917
5,556,329
5,556,329
12,652,995
12,652,995
3,131,925
3,131,925
681,374
681,374
1,251,562
1,251,562
-
-
5,064,861
5,064,861
12,295,142
12,295,142
2,640,738
2,640,738
5,603
5,603
659,333
659,333
387,434
387,434
3,693,108
3,693,108
2,285,066
2,285,066
39,146
39,146
2,324,212
2,324,212
6,017,320
6,017,320
6,635,675
6,635,675
2,120,965
2,120,965
19,162
19,162
550,347
550,347
264,406
264,406
2,954,880
2,954,880
2,556,275
2,556,275
32,230
32,230
2,588,505
2,588,505
5,543,385
5,543,385
6,751,757
6,751,757
5,353,905
5,353,905
1,281,770
1,281,770
6,635,675
6,635,675
5,353,905
5,353,905
1,397,852
1,397,852
6,751,757
6,751,757
Page 22
Page 22
21
SAFEROADS HOLDINGS LIMITED
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2016
CONSOLIDATED
At 1 July 2014
Issue of share capital
Share issue costs
Contributed
Equity
$
Reserves
$
Retained
Earnings
$
Total Equity
$
4,130,708
1,248,000
(24,803)
(55,878)
1,526,135
5,600,965
- - 1,248,000
- -
(24,803)
Net profit/(loss) for the period
- -
(72,228)
Cessation of foreign operation
-
56,055
(56,055)
Other comprehensive income for the period
-
(177)
-
(72,228)
-
(177)
At 30 June 2015
5,353,905
- 1,397,852
6,751,757
At 1 July 2015
Net profit/(loss) for the period
5,353,905
- 1,397,852
6,751,757
- -
(116,082)
(116,082)
Other comprehensive income for the period
- - - -
At 30 June 2016
5,353,905
- 1,281,770
6,635,675
The accompanying notes form part of these financial statements
Page 23
22
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2016
FOR THE YEAR ENDED 30 JUNE 2016
Notes
Notes
CONSOLIDATED
CONSOLIDATED
2016
2016
$
$
2015
2015
$
$
Cash flows from operating activities
Cash flows from operating activities
Receipts from customers
Receipts from customers
Payments to suppliers and employees
Payments to suppliers and employees
Interest received
Interest received
Interest paid
Interest paid
Net cash flows from operating activities
Net cash flows from operating activities
8
8
Cash flows from investing activities
Cash flows from investing activities
Proceeds from sale of plant and equipment
Proceeds from sale of plant and equipment
Purchase of plant and equipment
Purchase of plant and equipment
Product development costs
Product development costs
R&D tax rebate received
R&D tax rebate received
Net cash flows from investing activities
Net cash flows from investing activities
Cash flows from financing activities
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from issue of shares
Share issue costs
Share issue costs
Repayment of borrowings
Repayment of borrowings
Net cash flows from financing activities
Net cash flows from financing activities
Net increase/(decrease) in cash and cash equivalents
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Cash and cash equivalents at end of period
8
8
The accompanying notes form part of these financial statements
The accompanying notes form part of these financial statements
17,969,712
17,969,712
(16,743,096)
(16,743,096)
15,880,116
15,880,116
(15,338,647)
(15,338,647)
1,226,616
1,226,616
6,911
6,911
(211,125)
(211,125)
1,022,402
1,022,402
541,469
541,469
21,629
21,629
(464,689)
(464,689)
98,409
98,409
407,173
407,173
35,288
35,288
(331,596)
(331,596)
(316,088)
(316,088)
(300,864)
(300,864)
(263,752)
(263,752)
220,624 303,990
220,624 303,990
(323,928)
(323,928)
78,703
78,703
- 1,248,000
- 1,248,000
(24,803)
(24,803)
-
-
(2,035,070)
(2,035,070)
(610,263)
(610,263)
(610,263)
(610,263)
(811,873)
(811,873)
88,211
88,211
720,184
720,184
808,395
808,395
(634,761)
(634,761)
1,354,945
1,354,945
720,184
720,184
Page 24
Page 24
23
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
FOR THE YEAR ENDED 30 JUNE 2016
1
1
CORPORATE INFORMATION
CORPORATE INFORMATION
Saferoads Holdings Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the
Saferoads Holdings Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the
Australian Securities Exchange (ASX).
Australian Securities Exchange (ASX).
2
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a)
(a)
Basis of preparation
Basis of preparation
The financial report is a general purpose financial report which is prepared in accordance with Australian Accounting Standards,
The financial report is a general purpose financial report which is prepared in accordance with Australian Accounting Standards,
Australian Accounting Interpretations of the authoritative pronouncements of the Australian Accounting Standards Board and the
Australian Accounting Interpretations of the authoritative pronouncements of the Australian Accounting Standards Board and the
Corporations Act 2001. The financial report has also been prepared on a historical cost basis.
Corporations Act 2001. The financial report has also been prepared on a historical cost basis.
Saferoads Holdings Limited is a for-profit entity for the purposes of preparing the financial statements.
Saferoads Holdings Limited is a for-profit entity for the purposes of preparing the financial statements.
(b)
(b)
Statement of compliance
Statement of compliance
The financial report has been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting
The financial report has been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting
Standards and other authoritative pronouncements of
the Australian Accounting Standards Board (AASB). Compliance with
Standards and other authoritative pronouncements of
the Australian Accounting Standards Board (AASB). Compliance with
Australian Accounting Standards results in full compliance with the International Financial Reporting Standards (IFRS) as issued by
Australian Accounting Standards results in full compliance with the International Financial Reporting Standards (IFRS) as issued by
the International Accounting Standards Board (IASB).
the International Accounting Standards Board (IASB).
New and revised standards that are effective for these financial statements
New and revised standards that are effective for these financial statements
A number of new and revised standards were effective for annual reporting periods beginning on or after 1 July 2015. There was no
A number of new and revised standards were effective for annual reporting periods beginning on or after 1 July 2015. There was no
material impact on the Group of these new and revised standards.
material impact on the Group of these new and revised standards.
Accounting standards issued but not yet effective and not been adopted early by the Group
Accounting standards issued but not yet effective and not been adopted early by the Group
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2016 reporting
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2016 reporting
periods and have not been early adopted by the group. The group’s assessment of the impact of these new standards and
periods and have not been early adopted by the group. The group’s assessment of the impact of these new standards and
interpretations is set out below.
interpretations is set out below.
AASB 9 Financial Instruments addresses the classification, measurement and derecognition of financial assets and financial
AASB 9 Financial Instruments addresses the classification, measurement and derecognition of financial assets and financial
liabilities. The standard is not applicable until 1 January 2018 but is available for early adoption. When adopted, the standard will
liabilities. The standard is not applicable until 1 January 2018 but is available for early adoption. When adopted, the standard will
affect in particular the accounting for available-for-sale financial assets, since AASB 9 only permits the recognition of fair value gains
affect in particular the accounting for available-for-sale financial assets, since AASB 9 only permits the recognition of fair value gains
and losses in other comprehensive income if they relate to equity investments that are not held for trading. Fair value gains and
and losses in other comprehensive income if they relate to equity investments that are not held for trading. Fair value gains and
losses on available-for-sale debt investments, for example, will therefore have to be recognised directly in profit or loss. There will be
losses on available-for-sale debt investments, for example, will therefore have to be recognised directly in profit or loss. There will be
no impact on the group’s accounting for financial liabilities, as the new requirements only affect the accounting for financial liabilities
no impact on the group’s accounting for financial liabilities, as the new requirements only affect the accounting for financial liabilities
that are designated at fair value through profit or loss and the group does not have any such liabilities. The derecognition rules have
that are designated at fair value through profit or loss and the group does not have any such liabilities. The derecognition rules have
been transferred from AASB 139 Financial Instruments: Recognition and Measurement and have not been changed.
been transferred from AASB 139 Financial Instruments: Recognition and Measurement and have not been changed.
The entity is yet to undertake a detailed assessment of the impact of AASB 9 . However, based on the entity’s preliminary
The entity is yet to undertake a detailed assessment of the impact of AASB 9 . However, based on the entity’s preliminary
assessment, the Standard is not expected to have a material impact on the transactions and balances recognised in the financial
assessment, the Standard is not expected to have a material impact on the transactions and balances recognised in the financial
statements when it is first adopted for the year ending 30 June 2019.
statements when it is first adopted for the year ending 30 June 2019.
AASB 15 Revenue from Contracts with Customers replaces AASB 118 Revenue, AASB 111 Construction Contracts and some
AASB 15 Revenue from Contracts with Customers replaces AASB 118 Revenue, AASB 111 Construction Contracts and some
revenue-related Interpretations and is effective from 1 January 2018:
revenue-related Interpretations and is effective from 1 January 2018:
- establishes a new revenue recognition model
- establishes a new revenue recognition model
- changes the basis for deciding whether revenue is to be recognised over time or at a point in time
- changes the basis for deciding whether revenue is to be recognised over time or at a point in time
- provides new and more detailed guidance on specific topics (e.g. multiple element arrangements, variable pricing, rights of return,
- provides new and more detailed guidance on specific topics (e.g. multiple element arrangements, variable pricing, rights of return,
warranties and licensing)
warranties and licensing)
- expands and improves disclosures about revenue
- expands and improves disclosures about revenue
The entity is yet to undertake a detailed assessment of the impact of AASB 15 . However, based on the entity’s preliminary
The entity is yet to undertake a detailed assessment of the impact of AASB 15 . However, based on the entity’s preliminary
assessment, the Standard is not expected to have a material impact on the transactions and balances recognised in the financial
assessment, the Standard is not expected to have a material impact on the transactions and balances recognised in the financial
statements when it is first adopted for the year ending 30 June 2019.
statements when it is first adopted for the year ending 30 June 2019.
AASB 16 Leases replaces AASB 117 Leases and some lease-related Interpretations and requires all leases to be accounted for ‘on-
AASB 16 Leases replaces AASB 117 Leases and some lease-related Interpretations and requires all leases to be accounted for ‘on-
balance sheet’ by lessees, other than short-term and low value asset leases.
It provides new guidance on the application of the
balance sheet’ by lessees, other than short-term and low value asset leases.
It provides new guidance on the application of the
definition of lease and on sale and lease back accounting, largely retains the existing lessor accounting requirements in AASB 117
definition of lease and on sale and lease back accounting, largely retains the existing lessor accounting requirements in AASB 117
and requires new and different disclosures about leases.
and requires new and different disclosures about leases.
Page 25
Page 25
24
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
The entity is yet to undertake a detailed assessment of the impact of AASB 16. However, based on the entity’s preliminary
assessment, the likely impact on the first time adoption of the Standard for the year ending 30 June 2020 includes:
- there will be a significant increase in lease assets and financial liabilities recognised on the balance sheet
- the reported equity will reduce as the carrying amount of lease assets will reduce more quickly than the carrying amount of lease
liabilities
- EBIT in the statement of profit or loss and other comprehensive income will be higher as the implicit interest in lease payments for
former off balance sheet leases will be presented as part of finance costs rather than being included in operating expenses
- operating cash outflows will be lower and financing cash flows will be higher in the statement of cash flows as principal repayments
on all lease liabilities will now be included in financing activities rather than operating activities. Interest can also be included within
financing activities
The financial statements were authorised for issue by the Directors on 23 August 2016. The Directors have the power to amend and
reissue the financial statements.
(c)
Basis of consolidation
The consolidated financial statements comprise the financial statements of the legal parent entity, Saferoads Holdings Limited and
its subsidiaries ('the Group'). The separate financial statements of the parent entity have not been presented within this financial
report as permitted by the Corporations Act 2001.
The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent
accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist.
All intercompany balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated
in full.
Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date
on which control is transferred out of the Group.
Where there is loss of control of a subsidiary, the consolidated financial statements include the results for the part of the reporting
period during which Saferoads Holdings Limited has control.
(d)
Foreign currency translation
Functional and presentation currency
The functional currency of each of the Group's entities is measured using the currency of the primary economic environment in
which that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity's
functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at
the
transaction. Foreign currency monetary items are translated at the year end exchange rate. Non monetary items measured at
historical cost continue to be carried at the exchange rate at the date of the transaction. Non monetary items measured at fair value
are reported at the exchange rate at the date when fair values were determined.
the date of
Exchange differences arising on the translation of monetary items are recognised in the statement of profit or loss and other
comprehensive income, except where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of monetary items are recognised directly in equity to the extent that the gain or loss
is directly recognised in equity, otherwise the exchange difference is recognised in the statement of profit or loss and other
comprehensive income.
Group companies
The financial results and position of foreign operations whose functional currency is different from the Group's presentation currency
are translated as follows:
- assets and liabilities are translated at year end exchange rates prevailing at that reporting date;
- income and expenses are translated at average exchange rates for the period; and
- retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on the translation of foreign operations are transferred directly to the Group's foreign currency
translation reserve in the statement of financial position. These differences are recognised in the statement of profit or loss and
other comprehensive income in the period in which the operation is disposed.
Page 26
25
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
FOR THE YEAR ENDED 30 JUNE 2016
(e)
(e)
Property, plant and equipment
Property, plant and equipment
Property, plant and equipment are stated at cost less any accumulated depreciation and any impairment in value.
Property, plant and equipment are stated at cost less any accumulated depreciation and any impairment in value.
Depreciation is calculated on a diminishing value basis over the estimated useful life, except for rental barrier assets which are
Depreciation is calculated on a diminishing value basis over the estimated useful life, except for rental barrier assets which are
depreciated using the prime cost method.
depreciated using the prime cost method.
Plant and equipment - 5% to 50%
Plant and equipment - 5% to 50%
(f)
(f)
Borrowing costs
Borrowing costs
Borrowing costs are recognised as an expense when incurred.
Borrowing costs are recognised as an expense when incurred.
(g)
(g)
Impairment of non-financial assets other than goodwill
Impairment of non-financial assets other than goodwill
The Group assesses whether there is any indication that an asset may be impaired when events or changes in circumstances
The Group assesses whether there is any indication that an asset may be impaired when events or changes in circumstances
indicate the carrying value may not be recoverable. Where an indicator of impairment exists, the Group makes a formal estimate of
indicate the carrying value may not be recoverable. Where an indicator of impairment exists, the Group makes a formal estimate of
recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and
recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and
is written down to its recoverable amount.
is written down to its recoverable amount.
Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the
Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the
asset's value in use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are
asset's value in use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are
largely independent of those from other assets or groups of assets, in which case, the recoverable amount is determined for the
largely independent of those from other assets or groups of assets, in which case, the recoverable amount is determined for the
cash-generating unit to which the asset belongs.
cash-generating unit to which the asset belongs.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset.
reflects current market assessments of the time value of money and the risks specific to the asset.
(h)
(h)
Goodwill and intangible assets
Goodwill and intangible assets
Goodwill
Goodwill
Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of the business combination
Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of the business combination
over the group's interest in the fair value of the acquiree's identifiable assets, liabilities and contingent liabilities.
over the group's interest in the fair value of the acquiree's identifiable assets, liabilities and contingent liabilities.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of
For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of
the group's cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the
the group's cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the
combination, irrespective of whether other assets or liabilities of the group are assigned to those units or groups of units. Each unit
combination, irrespective of whether other assets or liabilities of the group are assigned to those units or groups of units. Each unit
or group of units to which the goodwill is so allocated :
or group of units to which the goodwill is so allocated :
- represents the lowest level within the group at which the goodwill is monitored for internal management purposes, and
- represents the lowest level within the group at which the goodwill is monitored for internal management purposes, and
- is not larger than as egment based on either the group's primary or the group's secondary reporting format determined in
- is not larger than as egment based on either the group's primary or the group's secondary reporting format determined in
accordance with AASB 8 Operating Segments.
accordance with AASB 8 Operating Segments.
Impairment is determined by assessing the recoverable amount of the cash-generating unit (group of cash-generating units), to
Impairment is determined by assessing the recoverable amount of the cash-generating unit (group of cash-generating units), to
which the goodwill relates. When the recoverable amount of the cash-generating unit (group of cash-generating units) is less than
which the goodwill relates. When the recoverable amount of the cash-generating unit (group of cash-generating units) is less than
the carrying amount, an impairment loss is recognised. When goodwill forms part of the cash-generating unit (group of cash-
the carrying amount, an impairment loss is recognised. When goodwill forms part of the cash-generating unit (group of cash-
generating units) and an operation within that unit is disposed of, the goodwill associated with the operation disposed of is included
generating units) and an operation within that unit is disposed of, the goodwill associated with the operation disposed of is included
in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this
in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this
manner is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained.
manner is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained.
Intangibles
Intangibles
Intangible assets acquired separately are capitalised at cost and from a business combination are capitalised at fair value as at the
Intangible assets acquired separately are capitalised at cost and from a business combination are capitalised at fair value as at the
date of acquisition. Following initial recognition, the cost model is applied to the class of intangible.
date of acquisition. Following initial recognition, the cost model is applied to the class of intangible.
The useful lives of these intangible assets are assessed to be either finite or indefinite.
The useful lives of these intangible assets are assessed to be either finite or indefinite.
Where amortisation is charged on assets with finite lives, this expense is taken to the statement of profit or loss and other
Where amortisation is charged on assets with finite lives, this expense is taken to the statement of profit or loss and other
comprehensive income through the amortisation line item.
comprehensive income through the amortisation line item.
Intangible assets, excluding development costs, created within the business are not capitalised and expenditure is charged against
Intangible assets, excluding development costs, created within the business are not capitalised and expenditure is charged against
profits in the period in which the expenditure is incurred.
profits in the period in which the expenditure is incurred.
Page 27
Page 27
26
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
Intangible assets are tested for impairment where an indicator of impairment exists, and in the case of indefinite life intangibles
annually, either individually or at the cash generating unit level. Useful lives are also examined on an annual basis and adjustments,
where applicable, are made on a prospective basis.
Research and development costs
Research costs are expensed as incurred.
Development expenditure incurred on an individual project is carried forward when its future recoverability can reasonably be
regarded as assured.
Following the initial recognition of the development expenditure, the cost model is applied requiring the asset to be carried at cost
less any accumulated amortisation and accumulated impairment losses.
Any expenditure carried forward is amortised over the period of expected future sales from the related project.
The carrying value of each development project is reviewed for impairment annually when the asset is not yet in use, or more
frequently when an indicator of impairment arises during the reporting year indicating that the carrying value may not be recoverable.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds
and the carrying amount of the asset and are recognised in the statement of profit or loss and other comprehensive income when the
asset is derecognised.
Any Research and Development tax rebates received or receivable are offset against the respective capitalised development costs
to the extent to which they relate to the claim.
(i)
Inventories
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
- Raw materials: purchase cost on a first-in, first-out basis;
- Finished goods and work-in-progress: cost of direct materials and labour and a proportion of manufacturing overheads based on
normal operating capacity but excluding borrowing costs.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the
estimated costs necessary to make the sale.
(j)
Trade and other receivables
Trade receivables, which generally have 30-60 day terms, are recognised and carried at original invoice amount less an allowance
for any uncollectable amounts.
An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off when
identified.
(k)
Cash and cash equivalents
Cash in the statement of financial position comprises cash at bank and on hand.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above,
net of outstanding bank overdrafts.
(l)
Assets classified as held for sale
Assets are classified as held for sale and measured at the lower of their carrying amount and fair value less costs to sell if their
carrying amount will be recovered principally through as ale transaction. They are not depreciated or amortised. For an asset to be
classified as held for sale it must be available for immediate sale in its present condition and its sale must be highly probable.
Page 28
27
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
FOR THE YEAR ENDED 30 JUNE 2016
(m)
(m)
Interest-bearing loans and borrowings
Interest-bearing loans and borrowings
loans and borrowings are initially recognised at cost, being the fair value of the consideration received net of issue costs
loans and borrowings are initially recognised at cost, being the fair value of the consideration received net of issue costs
All
All
associated with the borrowing.
associated with the borrowing.
Interest expense is recognised as it accrues.
Interest expense is recognised as it accrues.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective
interest method.
interest method.
Gains and losses are recognised in the statement of profit or loss and other comprehensive income when the liabilities are
Gains and losses are recognised in the statement of profit or loss and other comprehensive income when the liabilities are
derecognised as well as through the amortisation process.
derecognised as well as through the amortisation process.
(n) Leases
(n) Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and benefits of ownership
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and benefits of ownership
to the lessee. All other leases are classified as operating leases.
to the lessee. All other leases are classified as operating leases.
Assets held under finance leases are initially recognised at fair value, or, if lower, at an amount equal to the present value of the
Assets held under finance leases are initially recognised at fair value, or, if lower, at an amount equal to the present value of the
minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the
minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the
statement of financial position as a finance lease obligation. Lease payments are apportioned between finance charges and
statement of financial position as a finance lease obligation. Lease payments are apportioned between finance charges and
reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability.
reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability.
Finance charges are charged directly against income. Finance leased assets are amortised over the estimated useful life of the
Finance charges are charged directly against income. Finance leased assets are amortised over the estimated useful life of the
asset.
asset.
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are recognised as
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are recognised as
expenses in the periods in which they are incurred.
expenses in the periods in which they are incurred.
(o)
(o)
Provisions
Provisions
Provisions are recognised when the Group has a present obligation (legal and constructive) as a result of a past event, it is probable
Provisions are recognised when the Group has a present obligation (legal and constructive) as a result of a past event, it is probable
that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be
that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be
made of the amount of the obligation.
made of the amount of the obligation.
Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement
Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement
is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is
is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is
presented in the statement of profit or loss and other comprehensive income net of any reimbursement.
presented in the statement of profit or loss and other comprehensive income net of any reimbursement.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-
tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
(p)
(p)
Contributed equity
Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in
equity as a deduction, net of tax from the proceeds.
equity as a deduction, net of tax from the proceeds.
(q)
(q)
Revenue
Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be
reliably measured. The following specific recognition criteria must also be met before revenue is recognised.
reliably measured. The following specific recognition criteria must also be met before revenue is recognised.
Sale of goods
Sale of goods
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and can be
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and can be
measured reliably. Risks and rewards are considered passed to the buyer at the time of delivery of the goods to the customer, or
measured reliably. Risks and rewards are considered passed to the buyer at the time of delivery of the goods to the customer, or
where the customer has explicitly requested that the goods be held on their behalf.
where the customer has explicitly requested that the goods be held on their behalf.
Interest
Interest
Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts estimated
Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts estimated
future cash receipts through the expected life of the financial instrument) to the net carrying amount of the financial asset.
future cash receipts through the expected life of the financial instrument) to the net carrying amount of the financial asset.
Dividends
Dividends
Revenue is recognised when the shareholders' right to receive the payment is established.
Revenue is recognised when the shareholders' right to receive the payment is established.
28
Page 29
Page 29
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
(r)
Income Tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid
to taxation authorities based on the current period's taxable income. The tax rates and tax laws used to compare the amount are
those that are enacted by the reporting date.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward or unused tax assets and unused
tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and
future unused tax assets and unused tax losses can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Deferred income tax assets are measured at the tax rates that are expected to apply to the year when the asset is realised, based on
tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
(s)
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
- where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST
is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
- receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the
statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising from the
investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash
flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.
(t)
Employee benefits
Provision is made for the Group's liability for employee benefits arising from services rendered by employees to reporting date.
Employee benefits expected to be settled wholly within one year have been measured at the amounts expected to be paid when the
liability is settled plus related on-costs. All other employee benefit liabilities are measured at the present value of the estimated future
cash outflows to be made for those benefits.
(u)
Trade and other payables
Trade payables and other payables represent liabilities for goods and services provided to the Group prior to the end of the financial
year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods
and services.
(v)
Derivative Financial Instruments
instruments such as forward currency contracts to hedge risks associated with foreign
The group may use derivative financial
currency fluctuations. Such derivative financial instruments are initially recognised at fair value at the date on which the derivative
contract is entered into and are subsequently remeasured to fair value. Derivatives are carried as assets when the fair value is
positive and as liabilities when their fair value is negative. Any gains or losses arising from changes in the fair value of derivatives
are taken directly to the statement of profit or loss and other comprehensive income for the year.
(w)
Critical Accounting Estimates and Judgements
The Directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best
available current information. Estimates assume a reasonable expectation of future events and are based on current trends and
economic data, obtained both externally and within the Group.
Page 30
29
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
FOR THE YEAR ENDED 30 JUNE 2016
Key Judgements
Key Judgements
(i) Provision for Impairment of Receivables
(i) Provision for Impairment of Receivables
Collectability of Trade Receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are written off by
Collectability of Trade Receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are written off by
reducing the carrying amount directly. A provision for impairment is established when there is objective evidence that the company
reducing the carrying amount directly. A provision for impairment is established when there is objective evidence that the company
will not be able to collect all amounts due according to the original terms of the receivables.
will not be able to collect all amounts due according to the original terms of the receivables.
(x) Going Concern
(x) Going Concern
The consolidated entity has incurred an operating loss after tax of $116,082 for the financial year ended 30 June 2016. This
The consolidated entity has incurred an operating loss after tax of $116,082 for the financial year ended 30 June 2016. This
included relocation costs of $207,037 before tax (or $144,926 after tax), incurred in the current year but not expected to occur in the
included relocation costs of $207,037 before tax (or $144,926 after tax), incurred in the current year but not expected to occur in the
future.
future.
The Company reduced core debt by $504,000 in the financial year and met its minimum repayment plan with its financier,
The Company reduced core debt by $504,000 in the financial year and met its minimum repayment plan with its financier,
Commonwealth Bank of Australia. The financier has agreed a debt repayment plan without the requirement of any financial
Commonwealth Bank of Australia. The financier has agreed a debt repayment plan without the requirement of any financial
covenants, apart from providing six monthly financial reports and the Company has subsequently met all its obligations under the
covenants, apart from providing six monthly financial reports and the Company has subsequently met all its obligations under the
present facility agreement.
present facility agreement.
The Company's ongoing financial turnaround in 2016 resulted from continuing to manage the performance of the business, including
The Company's ongoing financial turnaround in 2016 resulted from continuing to manage the performance of the business, including
maintaining margins and operating cash flows and controlling overheads.
maintaining margins and operating cash flows and controlling overheads.
The Company should continue to secure further profitable sales contracts for its emerging products in existing and new markets and
The Company should continue to secure further profitable sales contracts for its emerging products in existing and new markets and
continue to meet the minimum debt repayment plan set by the financier.
continue to meet the minimum debt repayment plan set by the financier.
At the date of this report and having considered the above factors, the continuance of its banking relationship and the fact the
At the date of this report and having considered the above factors, the continuance of its banking relationship and the fact the
Company continues to improve its operating earnings base, the directors are confident that the consolidated entity is able to continue
Company continues to improve its operating earnings base, the directors are confident that the consolidated entity is able to continue
as a going concern. Accordingly, the accounts have been prepared on this basis.
as a going concern. Accordingly, the accounts have been prepared on this basis.
3
3
SEGMENT INFORMATION
SEGMENT INFORMATION
The Group's chief operating decision maker (Chief Executive Officer) reviews financial information on a consolidated basis and
The Group's chief operating decision maker (Chief Executive Officer) reviews financial information on a consolidated basis and
makes strategic decisions based on this consolidated information.
makes strategic decisions based on this consolidated information.
The Group operates predominantly in Australia.
The Group operates predominantly in Australia.
During 2016, $3,531,985 or 22% (2015: $2,721,812 or 18%) of the Group’s revenues depended on a single customer.
During 2016, $3,531,985 or 22% (2015: $2,721,812 or 18%) of the Group’s revenues depended on a single customer.
Page 31
Page 31
30
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
4
REVENUES AND EXPENSES
(a)
Specific Items
Profit/(loss) before income tax expense includes the following revenues and expenses whose disclosure is relevant in explaining the
performance of the entity:
(i) Revenue
Revenue from product sales and rentals
Product royalty income
Revenue from civil services
(ii) Other income
R&D tax rebate
Net gain/(loss) on sale of assets
Interest
Other
(iii) Expenses
Depreciation and amortisation
- Plant & equipment
- Intangible assets
Impairment of plant & equipment
Relocation costs
CONSOLIDATED
2015
$
2016
$
13,699,900
15,904,666
364,084 60,883
1,434,798
-
16,268,750 15,195,581
121,863 289,277
(21,976) 21,605
6,911 21,629
6,561 3,024
113,359 335,535
16,382,109 15,531,116
312,149 394,620
66,982
86,159
-
52,570
450,878
461,602
207,037
-
Restructuring costs incurred and provided for
-
56,610
Bad and doubtful debts / (provision writeback)
(3,743)
(15,212)
Motor vehicle costs
Occupancy costs
143,533 214,383
352,703 311,487
Travel and accommodation costs
308,140 139,468
IT & Communications costs
155,863 178,745
Page 32
31
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
5
INCOME TAX
Major components of income tax expense for the year ended 30 June 2016 are:
CONSOLIDATED
2015
$
2016
$
Statement of Profit or Loss and Other Comprehensive income
Current income tax charge
Income tax expense/(benefit) reported in statement of profit or loss
and other comprehensive income
(40,978)
(17,976)
(40,978)
(17,976)
A reconciliation of income tax expense applicable to accounting
profit/(loss) before income tax at the statutory income tax rate to
income tax expense at the Group's effective income tax rate is as
follows:
Accounting profit/(loss) before income tax
(157,060)
(90,204)
At the statutory income tax rate of 30%
Non-deductible expenses
Deferred income tax
Deferred income tax at 30 June relates to the following:
CONSOLIDATED
Deferred income tax asset/(liability)
Employee entitlements
Research & Development Costs
Other
Deferred tax assets relating to temporary differences not brought to
account
Carry forward tax losses brought to account
Gross deferred income tax (liability)/asset
Deferred income tax charge
(47,118)
(27,061)
6,140 9,085
(17,976)
(40,978)
Statement of Financial
Position
2016
$
2015
$
Statement of Profit or Loss
and Other Comprehensive
Income
2016
$
2015
$
122,291 88,991
(210,525)
(201,756) 8,769
5,683 165,451 159,768
(33,300) 5,238
(6,587)
(64,197)
(52,686)
82,551
1,292,540 1,251,562
1,292,540 1,251,562
(135,237) 65,546
-
-
-
-
As as 30 June 2016, the consolidated entity has carry forward tax losses with a tax effect of $2,353,634. Carry forward tax losses
with a tax effect of $1,292,540 have been brought to account as a deferred tax asset. Carry forward tax losses with a tax effect of
$1,061,094 relating to a prior year have not been brought to account.
The consolidated entity has realised capital losses with a gross amount of $1,832,149 that is available for offset against any future
taxable capital gains.
32
Page 33
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
6
EARNINGS PER SHARE
Basic earnings per share amounts are calculated by dividing net profit/(loss) for the year attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net profit/(loss) attributable to ordinary shareholders by the
weighted average number of ordinary shares outstanding during the year (adjusted for the effects of dilutive options).
The following reflects the income and share data used in the total operation's basic and diluted earnings per share computations:
Net profit/(loss) attributable to equity holders from continuing
operations
Net profit/(loss) attributable to equity holders of the parent
CONSOLIDATED
2015
$
2016
$
(116,082)
(116,082)
(72,228)
(72,228)
Net profit/(loss) attributable to ordinary shareholders for diluted
earnings per share
(116,082)
(72,228)
Weighted average number of ordinary shares for basic earnings
Adjusted weighted average number of ordinary shares for diluted
earnings per share
36,400,000 31,613,151
36,400,000 31,613,151
- Basic for profit/(loss) for the full year
- Diluted for profit/(loss) for the full year
Cents
(0.32)
(0.32)
Cents
(0.23)
(0.23)
For the purpose of calculating earnings and dividends per share, it is the ordinary shares of the legal parent that is used, being the
proportionate weighting of the 36,400,000 shares on issue.
7
DIVIDENDS PAID AND PROPOSED
CONSOLIDATED
2015
$
2016
$
Equity dividends on ordinary shares:
Interim franked dividend for 2016: 0.0 cents (2015: 0.0 cents)
-
-
Dividends proposed and not recognised as a liability:
Final franked dividend for 2016: 0.0 cents (2015: 0.0 cents)
-
-
Franking Credit Balance:
The amount of franking credits available for future reporting periods
after the payment of income tax payable and the impact of
dividends proposed.
5,391,050 5,391,050
Page 34
33
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
FOR THE YEAR ENDED 30 JUNE 2016
8
8
NOTES TO THE STATEMENT OF CASH FLOWS
NOTES TO THE STATEMENT OF CASH FLOWS
Reconciliation of cash
Reconciliation of cash
For the purposes of the statement of cash flows, cash and cash
For the purposes of the statement of cash flows, cash and cash
equivalents comprise the following at 30 June:
equivalents comprise the following at 30 June:
Cash at bank and on hand
Cash at bank and on hand
808,395 720,184
808,395 720,184
CONSOLIDATED
CONSOLIDATED
2015
2015
$
$
2016
2016
$
$
Reconciliation from the net profit/(loss) after tax to the net
Reconciliation from the net profit/(loss) after tax to the net
cash flows from operations
cash flows from operations
Profit/(loss) after tax for the year
Profit/(loss) after tax for the year
Adjustments for:
Adjustments for:
Depreciation and amortisation
Depreciation and amortisation
Impairment of plant and equipment
Impairment of plant and equipment
Net (profit)/loss on disposal of plant and equipment
Net (profit)/loss on disposal of plant and equipment
Changes in assets and liabilities
Changes in assets and liabilities
(Increase)/decrease in trade and other receivables
(Increase)/decrease in trade and other receivables
(Increase)/decrease in inventories
(Increase)/decrease in inventories
(Increase)/decrease in other assets
(Increase)/decrease in other assets
Decrease/(increase) in deferred tax asset
Decrease/(increase) in deferred tax asset
(Decrease)/increase in trade and other payables
(Decrease)/increase in trade and other payables
(Decrease)/increase in unearned income
(Decrease)/increase in unearned income
(Decrease)/increase in provisions
(Decrease)/increase in provisions
Net cash from operating activities
Net cash from operating activities
(116,082)
(116,082)
(72,228)
(72,228)
398,308 461,602
398,308 461,602
-
52,570
-
52,570
(21,605)
21,976
(21,605)
21,976
(40,978)
(40,978)
(1,028,497)
97,724
(1,028,497)
97,724
103,247 120,596
103,247 120,596
2,938 181,411
2,938 181,411
(17,976)
(17,976)
386,314 761,284
386,314 761,284
(132,608)
(13,559)
(132,608)
(13,559)
(153,570)
129,944
(153,570)
129,944
1,022,402 98,409
1,022,402 98,409
Non-cash financing and investing activities
Non-cash financing and investing activities
During the year, the Group acquired property, plant and equipment with an aggregate value of $448,040 (2015: $66,209) by means
During the year, the Group acquired property, plant and equipment with an aggregate value of $448,040 (2015: $66,209) by means
of finance leases.
of finance leases.
9
9
TRADE AND OTHER RECEIVABLES (CURRENT)
TRADE AND OTHER RECEIVABLES (CURRENT)
Trade receivables
Trade receivables
Other receivables
Other receivables
Provision for impairment
Provision for impairment
Ageing of trade receivables not impaired
Ageing of trade receivables not impaired
1 - 30 days
1 - 30 days
31 - 60 days
31 - 60 days
61 - 90 days
61 - 90 days
91 days and over
91 days and over
3,191,402 3,151,384
3,191,402 3,151,384
270,633 412,210
270,633 412,210
(3,835)
(3,835)
-
-
3,462,035 3,559,759
3,462,035 3,559,759
1,886,760 2,190,961
1,886,760 2,190,961
1,154,916 941,682
1,154,916 941,682
147,226 14,906
147,226 14,906
-
2,500
-
2,500
3,191,402 3,147,549
3,191,402 3,147,549
Trade receivables are non-interest bearing. Amounts over 60 days are deemed overdue.
Trade receivables are non-interest bearing. Amounts over 60 days are deemed overdue.
Movement in provision for impairment
Movement in provision for impairment
Balance at the beginning of financial year
Balance at the beginning of financial year
Amounts written off
Amounts written off
Additional impairment provision recognised/(released)
Additional impairment provision recognised/(released)
3,835 26,751
3,835 26,751
(7,704)
(7,704)
-
-
(15,212)
(15,212)
3,835
3,835
-
-
(3,835)
(3,835)
10
10
INVENTORIES
INVENTORIES
Stock on hand
Stock on hand
CONSOLIDATED
CONSOLIDATED
2015
2015
$
$
2016
2016
$
$
2,649,939 2,753,186
2,649,939 2,753,186
34
Page 35
Page 35
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
11
PLANT AND EQUIPMENT
Plant & equipment at cost
Less accumulated depreciation
Total plant & equipment
CONSOLIDATED
2015
$
2016
$
5,860,065 5,606,403
(2,385,995)
(2,474,478)
3,474,070 3,131,925
Movements in Carrying Amounts
Movement in the carrying amounts of plant and equipment between the beginning and the end of the financial year.
Plant & equipment
Balance at beginning of year
Additions
Depreciation expense
Impairment
Reclassified from assets held for sale
Disposals
Carrying amount at 30 June
12
INTANGIBLE ASSETS
Licence agreements at cost
Less accumulated amortisation
Product development costs
Less accumulated amortisation
Patents
Movement in carrying amounts
Balance at 1 July 2014
Capitalisation of costs
R&D tax rebate allocation
Amortisation expense
Carrying amount at 30 June 2015
Balance at 1 July 2015
Capitalisation of costs
R&D tax rebate allocation
Amortisation expense
Carrying amount at 30 June 2016
CONSOLIDATED
2015
$
2016
$
(312,149)
(52,570)
3,131,925 1,317,730
850,129 80,536
(394,620)
-
2,189,471
(61,192)
3,474,070 3,131,925
-
(143,265)
CONSOLIDATED
2015
$
2016
$
73,677 73,677
(64,822)
8,855
-
(73,677)
989,446
(287,695)
701,751
882,910
(210,391)
672,519
70,051
-
771,802 681,374
License
Agreement
$
Patents
$
Product Devt
Costs
$
Total
$
13,914
- 694,476 708,390
- - 300,864 300,864
(260,898)
- -
-
(66,982)
- 672,519 681,374
(5,059)
8,855
(260,898)
(61,923)
8,855
-
-
(8,855)
672,519 681,374
-
70,051 193,701 263,752
(87,165)
-
(86,159)
-
(87,165)
(77,304)
-
70,051 701,751 771,802
Page 36
35
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
FOR THE YEAR ENDED 30 JUNE 2016
13
13
TRADE AND OTHER PAYABLES (CURRENT)
TRADE AND OTHER PAYABLES (CURRENT)
Trade payables
Trade payables
Accrued expenses
Accrued expenses
GST payable
GST payable
CONSOLIDATED
CONSOLIDATED
2015
2015
$
$
2016
2016
$
$
2,337,295 1,683,757
2,337,295 1,683,757
266,902 376,983
266,902 376,983
36,541 60,225
36,541 60,225
2,640,738 2,120,965
2,640,738 2,120,965
Payables are non-interest bearing and are normally settled between 30 and 60-day terms.
Payables are non-interest bearing and are normally settled between 30 and 60-day terms.
14
14
INTEREST-BEARING LOANS AND BORROWINGS
INTEREST-BEARING LOANS AND BORROWINGS
Current
Current
Hire purchase
Hire purchase
Bank loans
Bank loans
Non-current
Non-current
Hire purchase
Hire purchase
Bank loans
Bank loans
CONSOLIDATED
CONSOLIDATED
2015
2015
$
$
2016
2016
$
$
155,333 50,347
155,333 50,347
504,000 500,000
504,000 500,000
659,333 550,347
659,333 550,347
293,066 56,275
293,066 56,275
1,992,000 2,500,000
1,992,000 2,500,000
2,285,066 2,556,275
2,285,066 2,556,275
The Group was in compliance with its reporting covenants at 30 June 2016 and is subject to a scheduled debt repayment plan.
The Group was in compliance with its reporting covenants at 30 June 2016 and is subject to a scheduled debt repayment plan.
Therefore, in accordance with Australian Accounting Standard AASB 101, the Company's long term loans are classified as current
Therefore, in accordance with Australian Accounting Standard AASB 101, the Company's long term loans are classified as current
and non-current according to those amounts due within 12 months and those due after 12 months.
and non-current according to those amounts due within 12 months and those due after 12 months.
Hire purchase liabilities are secured by a charge over the financial assets.
Hire purchase liabilities are secured by a charge over the financial assets.
the following financing facilities had been
the following financing facilities had been
reporting date,
reporting date,
Financing facilities available
Financing facilities available
At
At
negotiated and were available:
negotiated and were available:
Total facilities:
Total facilities:
- bank bills
- bank bills
- bank charge card
- bank charge card
- trade facilities including bank guarantees
- trade facilities including bank guarantees
Facilities used at reporting date
Facilities used at reporting date
- bank bills
- bank bills
- bank charge card
- bank charge card
- bank guarantees
- bank guarantees
Facilities unused at reporting date
Facilities unused at reporting date
- bank charge card
- bank charge card
- bank guarantees
- bank guarantees
CONSOLIDATED
CONSOLIDATED
2015
2015
$
$
2016
2016
$
$
2,496,000 3,000,000
2,496,000 3,000,000
75,000 75,000
75,000 75,000
-
-
-
-
2,496,000 3,000,000
2,496,000 3,000,000
72,000 60,000
72,000 60,000
-
-
-
-
3,000 15,000
3,000 15,000
-
-
-
-
The bank facilities are secured by a registered charge over the whole of its assets and undertakings, and also a registered charge
The bank facilities are secured by a registered charge over the whole of its assets and undertakings, and also a registered charge
over the assets and undertakings of Saferoads Holdings Ltd.
over the assets and undertakings of Saferoads Holdings Ltd.
Saferoads Pty Ltd is required to provide the Commonwealth Bank with half yearly financial statements.
Saferoads Pty Ltd is required to provide the Commonwealth Bank with half yearly financial statements.
15
15
PROVISIONS
PROVISIONS
Current
Current
Employee benefits
Employee benefits
Non-Current
Non-Current
Employee benefits
Employee benefits
Deferred rent liability
Deferred rent liability
36
CONSOLIDATED
CONSOLIDATED
2015
2015
$
$
2016
2016
$
$
387,434 264,406
387,434 264,406
20,203 32,230
20,203 32,230
-
18,943
-
18,943
39,146 32,230
39,146 32,230
Page 37
Page 37
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
16
EQUITY
Contributed Equity
Ordinary shares
Balance at beginning of period
2 for 5 entitlement issue
less share issue costs
Issued and fully paid
Movements in ordinary shares on issue (legal parent)
Balance at beginning of the period
2 for 5 entitlement issue
At 30 June
CONSOLIDATED
2015
$
2016
$
5,353,905 4,130,708
1,248,000
-
(24,803)
-
5,353,905 5,353,905
No. of shares
36,400,000 26,000,000
10,400,000
-
36,400,000 36,400,000
Ordinary shares carry one vote per share, either in person or by proxy, at a meeting of the Company, and carry the rights to
dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held.
There is no current on-market buy-back of ordinary shares.
Retained Earnings
CONSOLIDATED
2015
$
2016
$
Movements in retained earnings are as follows:
Balance at beginning of period
Net profit/(loss) for the year
Transfer from Reserves re: cessation of foreign operation
Balance at 30 June
1,397,852
(116,082)
-
1,281,770
1,526,135
(72,228)
(56,055)
1,397,852
17
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group's principal financial instruments comprise commercial bills, hire purchase contracts, cash and short-term deposits. The
main purpose of these financial instruments is to raise finance for the Group's operations.
The totals for each category of financial instruments are as follows:
Financial Assets
- Cash and cash equivalents
- Loans and receivables
Total Financial Assets
Financial Liabilities
- Financial liabilities at amortised cost
Total Financial Liabilities
CONSOLIDATED
2015
$
2016
$
826,312
3,462,035
720,184
3,559,759
4,288,347
4,279,943
5,585,137
5,227,587
5,585,137
5,227,587
The Group has various financial instruments such as trade debtors and trade creditors, which arise directly from its operations.
It is, and has been throughout the period under review, the Group's policy that no trading in financial derivatives shall be undertaken.
The main risks arising from the Group's financial instruments are interest rate risk, liquidity risk, foreign currency risk and credit risk.
The Board reviews and agrees policies for managing each of these risks and they are summarised below.
The Group also monitors the market price risk arising from all financial instruments.
Page 38
37
Weighted
Weighted
Average
Average
Interest
Interest
Rate
Rate
%
%
1.36%
1.36%
N/A
N/A
2016
2016
Financial Assets
Financial Assets
- Cash
- Cash
- Receivables
- Receivables
Financial Liabilities
Financial Liabilities
- Payables
- Payables
- Bank borrowings
- Bank borrowings
- Hire purchase
- Hire purchase
Total Financial Liabilities
Total Financial Liabilities
2015
2015
Financial Assets
Financial Assets
- Cash
- Cash
- Receivables
- Receivables
N/A
N/A
6.52%
6.52%
7.42%
7.42%
%
%
2.32%
2.32%
N/A
N/A
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
FOR THE YEAR ENDED 30 JUNE 2016
(a)
(a)
Interest rate risk
Interest rate risk
The Group's exposure to market risk for changes in interest rates relates primarily to the Group's long-term debt obligations.
The Group's exposure to market risk for changes in interest rates relates primarily to the Group's long-term debt obligations.
The company's exposure to interest rate risk, which is the risk that the Financial Instrument's value will fluctuate as a result of
The company's exposure to interest rate risk, which is the risk that the Financial Instrument's value will fluctuate as a result of
changes in market interest rates and the effective weighted average interest rates on classes of financial assets and financial
changes in market interest rates and the effective weighted average interest rates on classes of financial assets and financial
liabilities, is as follows:
liabilities, is as follows:
Fixed Interest Rate
Fixed Interest Rate
Maturing
Maturing
Non Interest Bearing
Non Interest Bearing
Variable
Variable
Interest Rate
Interest Rate
Within 1 year
Within 1 year
1 to 5 years
1 to 5 years
Total
Total
$
$
$
$
$
$
$
$
$
$
Total Financial Assets
Total Financial Assets
3,462,035
3,462,035
826,312
826,312
-
-
3,462,035
3,462,035
826,312
826,312
-
-
-
-
-
-
-
-
-
-
-
-
-
-
826,312
826,312
3,462,035
3,462,035
4,288,347
4,288,347
2,640,738
2,640,738
-
-
-
-
-
-
2,496,000
2,496,000
-
-
-
-
-
-
155,333
155,333
-
-
-
-
293,066
293,066
2,640,738
2,640,738
2,496,000
2,496,000
448,399
448,399
2,640,738
2,640,738
2,496,000
2,496,000
155,333
155,333
293,066
293,066
5,585,137
5,585,137
$
$
$
$
$
$
$
$
$
$
-
-
3,559,759
3,559,759
720,184
720,184
-
-
-
-
-
-
-
-
-
-
-
-
-
-
720,184
720,184
3,559,759
3,559,759
4,279,943
4,279,943
Total Financial Assets
Total Financial Assets
3,559,759
3,559,759
720,184
720,184
Financial Liabilities
Financial Liabilities
- Payables
- Payables
- Bank borrowings
- Bank borrowings
- Hire purchase
- Hire purchase
N/A
N/A
8.98%*
8.98%*
7.02%
7.02%
2,120,965
2,120,965
-
-
-
-
-
-
3,000,000
3,000,000
-
-
-
-
-
-
50,347
50,347
-
-
-
-
56,275
56,275
2,120,965
2,120,965
3,000,000
3,000,000
106,622
106,622
Total Financial Liabilities
Total Financial Liabilities
2,120,965
2,120,965
3,000,000
3,000,000
50,347
50,347
56,275
56,275
5,227,587
5,227,587
* Actual interest rate at 30 June 2015 was 6.59%
* Actual interest rate at 30 June 2015 was 6.59%
(b)
(b)
Credit risk
Credit risk
The Group trades only with recognised, credit worthy third parties.
The Group trades only with recognised, credit worthy third parties.
It is the Group's policy that all customers who wish to trade on credit terms are subject to credit verification procedures and pre-
It is the Group's policy that all customers who wish to trade on credit terms are subject to credit verification procedures and pre-
agreed credit limits.
agreed credit limits.
In addition, receivable balances are monitored on an ongoing basis with the result that the Group's exposure to bad debts is not
In addition, receivable balances are monitored on an ongoing basis with the result that the Group's exposure to bad debts is not
significant.
significant.
The maximum exposure to credit risk, excluding the value of any collateral or other security, at reporting date recognised as financial
The maximum exposure to credit risk, excluding the value of any collateral or other security, at reporting date recognised as financial
assets is the carrying amount, net of any provisions for doubtful debts which is nil at 30 June 2016 (2015: $3,835), as disclosed in
assets is the carrying amount, net of any provisions for doubtful debts which is nil at 30 June 2016 (2015: $3,835), as disclosed in
the statement of financial position and notes to the financial statements. The company holds no collateral or security in relation to
the statement of financial position and notes to the financial statements. The company holds no collateral or security in relation to
financial assets.
financial assets.
As at reporting date, the amount of financial assets past due, but not impaired, is $149,726 (2015: $14,906).
As at reporting date, the amount of financial assets past due, but not impaired, is $149,726 (2015: $14,906).
The Group does not have any material credit risk to any single debtor or group of debtors under financial instruments entered into by
The Group does not have any material credit risk to any single debtor or group of debtors under financial instruments entered into by
the company.
the company.
Page 39
Page 39
38
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
(c)
Liquidity risk
The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of current working capital,
bank loans, and hire purchase contracts.
Maturity analysis of financial liabilities:
2016
- Payables
- Bank borrowings
- Hire purchase
Total Financial Liabilities
2015
- Payables
- Bank borrowings
- Hire purchase
Total Financial Liabilities
Within 1 Year
1 to 5 Years
Over 5 Years
$
$
$
2,640,738
504,000
155,333
-
1,992,000
293,066
3,300,071
2,285,066
Within 1 Year
1 to 5 Years
Over 5 Years
$
$
$
2,120,965
500,000
50,347
-
2,500,000
56,275
2,671,312
2,556,275
Total
$
2,640,738
2,496,000
448,399
5,585,137
Total
$
2,120,965
3,000,000
106,622
5,227,587
-
-
-
-
-
-
-
-
(d)
(e)
(f)
Fair Values
The carrying amount of financial assets and liabilities recorded in the financial statements represents their respective fair values,
determined in accordance with the accounting policies disclosed in Note 2 to the financial statements.
Foreign Exchange Risk
Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial
instrument fluctuating due to
movement in foreign exchange rates of currencies in which the Group holds financial instruments which are other than the AUD
functional currency of the Group.
At reporting date, the Group did not hold any financial
functional currency (AUD).
instruments denominated in foreign currencies other than the Group's
Sensitivity Analysis
The following table illustrates sensitivities to the Group's exposures to changes in interest rates on borrowings and exchange rates
on purchases. The table indicates the impact on how profit and equity values reported at reporting date would have been affected by
changes in the relevant risk variable that management considers to be reasonably possible. These sensitivities assume that the
movement in a particular variable is independent of other variables. The following sensitivities are based on market experience over
the last 12 months.
Year Ended 30 June 2016
+/-2% in interest rates
+/-5c in AUD / USD
Year Ended 30 June 2015
+/-2% in interest rates
+/-5c in AUD / USD
CONSOLIDATED
Profit/(loss)
$
Equity
$
+/-50,000
+/-155,000
+/-50,000
+/-155,000
$
$
+/-60,000
+/-155,000
+/-60,000
+/-155,000
Page 40
39
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
18
COMMITMENTS AND CONTINGENCIES
Operating Leases - properties
Non-cancellable operating leases:
- less than one year
- later than one year but less than five years
- later than five years
Operating Leases - equipment
Non-cancellable operating leases:
- less than one year
- later than one year but less than five years
Total operating lease commitments
Hire Purchases
Hire purchase commitments payable:
- less than one year
- later than one year but less than five years
Less future finance charges
Total hire purchase liability
Reconciled to:
Current liability
Non-current liability
CONSOLIDATED
2015
$
2016
$
263,207 295,070
1,177,510 1,162,798
909,305 1,096,016
2,350,022 2,553,884
11,518 18,396
6,922
17,235
28,753 25,319
2,378,776 2,579,203
185,799 56,044
320,867 59,267
506,666 115,311
(8,689)
448,399 106,622
(58,267)
155,333 50,347
293,066 56,275
448,399 106,622
The Group leases its head office and warehouse facility and other interstate office sites under non-cancellable operating leases with
terms ranging from 1 to 10 years.
The Group leases various warehouse and office equipment under non-cancellable operating leases with terms ranging from 4 to 5
years.
There are no material make good obligations with operating leases.
Hire purchase commitments relate to warehouse fitout, production and rental equipment, IT software and company motor vehicles.
There are no other commitments or contingent liabilities of the Group.
19
SUBSIDIARIES
The consolidated financial statements include the financial statements of Saferoads Holdings Limited and the subsidiaries listed in
the following table.
Name
Saferoads Pty Ltd
20
RELATED PARTIES
Country of
incorporation
Australia
% equity interest
2016
2015
100%
100%
Transactions with Key Management Personnel
During the financial year the Company acquired certain consumable manufacturing materials from an entity related to Mr D. Hotchkin
at normal commercial rates aggregating $24,410 (2015: $14,430), with $2,628 included in Trade payables at 30 June 2016 (2015:
$2,758).
40
Page 41
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
21
AUDITORS' REMUNERATION
Amounts received or due and receivable by:
- Current auditors: Grant Thornton, for the audit of the financial report
Other services (R&D tax rebate): Grant Thornton
22
KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Details of Management Personnel
(i) Directors
David Ashmore
Darren Hotchkin
David Cleland
(ii) Executives
Peter Fearns
Non-Executive Chairman
Chief Executive Officer
Non-Executive
Chief Financial Officer
2016
$
2015
$
78,500 76,500
18,000 37,445
(b)
Compensation of Key Management Personnel
Details of the nature and amount of each element of the remuneration of Key Management Personnel ("KMP") are disclosed in the
Remuneration Report section of the Directors' Report.
Compensation of Key Management Personnel by category:
- Short-term employee benefits
- Post-employment benefits
- Long-term employee benefits
23
PARENT ENTITY DISCLOSURES
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Issued capital
Retained earnings
Profit/(loss) of the parent entity
Total comprehensive income of the parent entity
2016
$
2015
$
622,533 375,000
55,771 60,650
3,162 2,833
681,466 438,483
2016
$
2015
$
8,411
-
5,359,929 6,750,757
-
-
-
-
5,359,929 6,750,757
5,353,905 6,744,712
6,024 6,045
(21)
(21)
(13)
(13)
Guarantees entered into by the parent entity in relation to debts of
its subsidiaries
-
-
24
SUBSEQUENT EVENTS
There has been no matter or circumstance, which has arisen since 30 June 2016 that has significantly affected or may significantly
affect the operations of the consolidated entity or the results of those operations or the state of affairs of the consolidated entity.
Page 42
41
DIRECTORS’ DECLARATION
DIRECTORS’ DECLARATION
In the opinion of the Directors of Saferoads Holdings Limited and its controlled entities:
(a) the financial statements and notes of the consolidated entity and the remuneration disclosures that
are contained in the Remuneration Report that forms part of the Directors’ Report are in accordance
with the Corporations Act 2001 (Cth), including:
i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2016
and of its performance for the year ended that date; and
ii) complying with Accounting Standards and Corporations Regulations 2001.
(b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable;
(c) The financial statements have been prepared in accordance with International Financial Reporting
Standards (IFRS) as reported in Note 2.
This declaration has been made after receiving the declarations required to be made to the Directors by the
Chief Executive Officer and the Chief Financial Officer in accordance with section 295A of the Corporations
Act 2001 (Cth).
Signed in accordance with a resolution of the Directors.
On behalf of the Board.
David Ashmore
Director
25 August 2016
42
Page 43
INDEPENDENT AUDITOR’S REPORT
Independent Auditor’s Report
Independent Auditor’s Report
To the Members of Saferoads Holdings Limited
To the Members of Saferoads Holdings Limited
The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000
The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000
Correspondence to:
Correspondence to:
GPO Box 4736
GPO Box 4736
Melbourne Victoria 3001
Melbourne Victoria 3001
T +61 3 8320 2222
T +61 3 8320 2222
F +61 3 8320 2200
F +61 3 8320 2200
E info.vic@au.gt.com
E info.vic@au.gt.com
W www.grantthornton.com.au
W www.grantthornton.com.au
The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000
Correspondence to:
Report on the financial report
Report on the financial report
GPO Box 4736
We have audited the accompanying financial report of Saferoads Holdings Limited (the
We have audited the accompanying financial report of Saferoads Holdings Limited (the
Melbourne Victoria 3001
“Company”), which comprises the consolidated statement of financial position as at 30 June
“Company”), which comprises the consolidated statement of financial position as at 30 June
T +61 3 8320 2222
2016, the consolidated statement of profit or loss and other comprehensive income,
2016, the consolidated statement of profit or loss and other comprehensive income,
F +61 3 8320 2200
E info.vic@au.gt.com
consolidated statement of changes in equity and consolidated statement of cash flows for
consolidated statement of changes in equity and consolidated statement of cash flows for
W www.grantthornton.com.au
the year then ended, notes comprising a summary of significant accounting policies and
the year then ended, notes comprising a summary of significant accounting policies and
Independent Auditor’s Report
other explanatory information and the directors’ declaration of the consolidated entity
other explanatory information and the directors’ declaration of the consolidated entity
To the Members of Saferoads Holdings Limited
comprising the Company and the entities it controlled at the year’s end or from time to time
comprising the Company and the entities it controlled at the year’s end or from time to time
during the financial year.
during the financial year.
Report on the financial report
We have audited the accompanying financial report of Saferoads Holdings Limited (the
Directors’ responsibility for the financial report
Directors’ responsibility for the financial report
“Company”), which comprises the consolidated statement of financial position as at 30 June
The Directors of the Company are responsible for the preparation of the financial report
The Directors of the Company are responsible for the preparation of the financial report
2016, the consolidated statement of profit or loss and other comprehensive income,
that gives a true and fair view in accordance with Australian Accounting Standards and the
that gives a true and fair view in accordance with Australian Accounting Standards and the
consolidated statement of changes in equity and consolidated statement of cash flows for
Corporations Act 2001. The Directors’ responsibility also includes such internal control as
Corporations Act 2001. The Directors’ responsibility also includes such internal control as
the year then ended, notes comprising a summary of significant accounting policies and
the Directors determine is necessary to enable the preparation of the financial report that
the Directors determine is necessary to enable the preparation of the financial report that
other explanatory information and the directors’ declaration of the consolidated entity
gives a true and fair view and is free from material misstatement, whether due to fraud or
gives a true and fair view and is free from material misstatement, whether due to fraud or
comprising the Company and the entities it controlled at the year’s end or from time to time
error. The Directors also state, in the notes to the financial report, in accordance with
error. The Directors also state, in the notes to the financial report, in accordance with
during the financial year.
Accounting Standard AASB 101 Presentation of Financial Statements, the financial
Accounting Standard AASB 101 Presentation of Financial Statements, the financial
statements comply with International Financial Reporting Standards.
statements comply with International Financial Reporting Standards.
Directors’ responsibility for the financial report
The Directors of the Company are responsible for the preparation of the financial report
Auditor’s responsibility
Auditor’s responsibility
that gives a true and fair view in accordance with Australian Accounting Standards and the
Our responsibility is to express an opinion on the financial report based on our audit. We
Our responsibility is to express an opinion on the financial report based on our audit. We
Corporations Act 2001. The Directors’ responsibility also includes such internal control as
conducted our audit in accordance with Australian Auditing Standards. Those standards
conducted our audit in accordance with Australian Auditing Standards. Those standards
the Directors determine is necessary to enable the preparation of the financial report that
require us to comply with relevant ethical requirements relating to audit engagements and
require us to comply with relevant ethical requirements relating to audit engagements and
gives a true and fair view and is free from material misstatement, whether due to fraud or
plan and perform the audit to obtain reasonable assurance whether the financial report is
plan and perform the audit to obtain reasonable assurance whether the financial report is
error. The Directors also state, in the notes to the financial report, in accordance with
free from material misstatement.
free from material misstatement.
Accounting Standard AASB 101 Presentation of Financial Statements, the financial
statements comply with International Financial Reporting Standards.
An audit involves performing procedures to obtain audit evidence about the amounts and
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s
disclosures in the financial report. The procedures selected depend on the auditor’s
Auditor’s responsibility
judgement, including the assessment of the risks of material misstatement of the financial
judgement, including the assessment of the risks of material misstatement of the financial
Our responsibility is to express an opinion on the financial report based on our audit. We
report, whether due to fraud or error.
report, whether due to fraud or error.
conducted our audit in accordance with Australian Auditing Standards. Those standards
require us to comply with relevant ethical requirements relating to audit engagements and
Grant Thornton Audit Pty Ltd ACN 130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594
plan and perform the audit to obtain reasonable assurance whether the financial report is
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
free from material misstatement.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
An audit involves performing procedures to obtain audit evidence about the amounts and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
disclosures in the financial report. The procedures selected depend on the auditor’s
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
scheme applies.
judgement, including the assessment of the risks of material misstatement of the financial
scheme applies.
report, whether due to fraud or error.
Page 44
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
43
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
Page 44
scheme applies.
In making those risk assessments, the auditor considers internal control relevant to the
Company’s preparation of the financial report that gives a true and fair view in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Company’s internal control. An audit
also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the Directors, as well as evaluating the
overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the
Corporations Act 2001.
Auditor’s opinion
In our opinion:
a
the financial report of Saferoads Holdings Limited is in accordance with the
Corporations Act 2001, including:
i
ii
giving a true and fair view of the consolidated entity’s financial position as at
30 June 2016 and of its performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations
Regulations 2001.
b
the financial report also complies with International Financial Reporting Standards as
disclosed in the notes to the financial statements.
Report on the remuneration report
We have audited the remuneration report included in the directors’ report for the year
ended 30 June 2016. The Directors of the Company are responsible for the preparation and
presentation of the remuneration report in accordance with section 300A of the
Corporations Act 2001. Our responsibility is to express an opinion on the remuneration
report, based on our audit conducted in accordance with Australian Auditing Standards.
Auditor’s opinion on the remuneration report
In our opinion, the remuneration report of Saferoads Holdings Limited for the year ended
30 June 2016, complies with section 300A of the Corporations Act 2001.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
M. A. Cunningham
Partner - Audit & Assurance
Melbourne, 25 August 2016
44
ASX ADDITIONAL INFORMATION
The shareholder information set out below was applicable as at 31 August 2016. At this date the Company had on
issue 36,400,000 ordinary shares in the company held by 619 shareholders.
S U B S T A N T I A L S H A R E H O L D E R S
The names of substantial shareholders who have notified the Company in accordance with section 671B of the
Corporations Act.
Holder name
MR DARREN JOHN HOTCHKIN & MRS JENNIFER ANN HOTCHKIN
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