ANNUAL REPORT 2017
SAFEROADS HOLDINGS LIMITED
ABN 81 116 668 538
IMPROVING PUBLIC SAFETY
SOLAR
LIGHTING
ELECTRONIC
TRAFFIC
TRAFFIC
CALMING
GUIDE
POSTS
RENTALS
CRASH
CUSHIONS
TEMPORARY
1
BARRIERS
2
CONTENTS
Chairman’s Overview .............................................................................................................................................. 4
Chief Executive Officer’s Review of Operations and Activities ................................................................................ 6
The Year in Review.................................................................................................................................................... 8
Directors’ Report ...................................................................................................................................................... 13
Auditor’s Independence Declaration ....................................................................................................................... 20
Corporate Governance Statement........................................................................................................................... 21
Financial Statements ............................................................................................................................................... 22
Notes to the Financial Statements........................................................................................................................... 26
Directors’ Declaration .............................................................................................................................................. 44
Independent Auditor’s Report .................................................................................................................................. 45
ASX Additional Information ...................................................................................................................................... 48
Corporate Directory ................................................................................................................................................. 49
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
CHAIRMAN’S OVERVIEW
Dear Shareholder,
F I N A N CI A L O V ER V I E W
On behalf of the Board I am pleased to report a profit before tax for the financial year of $154k, compared
with a loss before tax of $157k for the previous financial year. This reflects our ongoing sustainable business
transformation and solid organic growth and improvements made across the business. Another key aspect
of our recovery is the ongoing development of new products and the establishment of new markets during
the year.
Revenue from product sales and rentals was up $1.0 million, or 6.3% to $16.9 million, notwithstanding the
loss of sales following the early termination of the third party license agreement for the energy absorbing
bollard, as announced in July last year. Whilst there was a minimal reduction on overall margins, in the highly
competitive nature of the markets we operate in, our ability to generate sales and the continued focus on
cost rationalisation has allowed the Company to generate a modest profit for the financial year.
International sales of $467k were mainly derived on the back of the previous year’s work by our CEO,
particularly targeting the US market. In addition, we have commenced the new financial year having
delivered another order of $325k under our USA distributor agreement for our patented IronmanTM barrier.
Further scheduled debt reductions of $504k for the year saw finance costs reduce 11%, with core bank debt
down to $2.0 million at 30 June 2017.
In turn, our gearing ratio reduced further to 20.2% at June 2017 from
24.4% as at 30 June 2016.
We again generated over $1.0 million in operating cash flows during the year, maintaining adequate cash
reserves to support the working capital needs of the business as well as providing basic funding for our
product innovation projects which totalled $447k for the year.
The table below summarizes the key metrics of the transformation over the past three financial years:
Year ending 30 June
2016
$'000
2015
$'000
Revenue from product sales, rentals and royalties
13,761
16,269
EBITDA
Profit/(loss) before tax
Operating cash flows
Core bank debt *
814
(90)
98
504
(157)
1,022
(3,000)
(2,496)
Gearing (net debt / net debt + equity)
26.1%
24.4%
* excludes equipment finance leases
2017
$'000
16,936
800
154
1,033
(1,992)
20.2%
4
S T R A T E G I C O P P O R T U N I T I E S
Having achieved underlying profitability in 2017, our main priority continues to be sustainable growth in sales
S T R A T E G I C O P P O R T U N I T I E S
and profit. Each of our product portfolios have key budget targets in their respective market sectors and a
Having achieved underlying profitability in 2017, our main priority continues to be sustainable growth in sales
number of initiatives are in play to continue the momentum achieved in the past financial year.
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.
Road infrastructure spending continues to grow, with committed funding for major Australian transport
infrastructure projects peaking at up to $17 billion by 2020. The majority of these are on the eastern seaboard
Road infrastructure spending continues to grow, with committed funding for major Australian transport
where there are major projects that we are already participating in. Our concrete temporary barrier solution
infrastructure projects peaking at up to $17 billion by 2020. The majority of these are on the eastern seaboard
in particular continues to be an attractive offering for major road works along the Pacific Highway in northern
where there are major projects that we are already participating in. Our concrete temporary barrier solution
NSW and southern Queensland.
in particular continues to be an attractive offering for major road works along the Pacific Highway in northern
NSW and southern Queensland.
Another area of focus for us is pedestrian safety, particularly given the events around the world recently with
incidents involving vehicles deliberately driven into urban precincts designated predominantly for pedestrians
Another area of focus for us is pedestrian safety, particularly given the events around the world recently with
and causing mass death and injury.
incidents involving vehicles deliberately driven into urban precincts designated predominantly for pedestrians
and causing mass death and injury.
We have developed our new High Security Pedestrian Safety Bollard and are looking at other solutions to
assist those charged with protecting people in these areas to at least minimize the likelihood of these
We have developed our new High Security Pedestrian Safety Bollard and are looking at other solutions to
situations occurring, and doing this in such a way that it doesn’t decrease the ambience of the urban area
assist those charged with protecting people in these areas to at least minimize the likelihood of these
designed to be people-friendly.
situations occurring, and doing this in such a way that it doesn’t decrease the ambience of the urban area
designed to be people-friendly.
We continue to be pleased with the growth of our Public Lighting business, particularly our addition of off-
grid (solar) lighting solutions. We retain a strong market share in the Victorian urban and residential street
We continue to be pleased with the growth of our Public Lighting business, particularly our addition of off-
lighting space and have a number of initiatives underway to exploit our unique offerings in solar lighting as
grid (solar) lighting solutions. We retain a strong market share in the Victorian urban and residential street
well.
lighting space and have a number of initiatives underway to exploit our unique offerings in solar lighting as
well.
As a result of our CEO, Mr Darren Hotchkin’s continued efforts on international markets, we secured further
orders under our international distribution agreement which realised sales of $325k in the past year, with a
As a result of our CEO, Mr Darren Hotchkin’s continued efforts on international markets, we secured further
In addition, we have secured new
further $325k order delivered at the start of the 2018 financial year.
orders under our international distribution agreement which realised sales of $325k in the past year, with a
relationships in Belgium for our flexible signage and the USA for our bollards and traffic calming products.
In addition, we have secured new
further $325k order delivered at the start of the 2018 financial year.
relationships in Belgium for our flexible signage and the USA for our bollards and traffic calming products.
We will remain focused on innovation and will continue to bring to market products with both domestic and
international sales potential. Of particular focus will be the formal MASH testing in the USA of the next
We will remain focused on innovation and will continue to bring to market products with both domestic and
generation Hybrid temporary barrier system (“HV2”) that passed our initial crash test in February this year.
international sales potential. Of particular focus will be the formal MASH testing in the USA of the next
In addition, we will continue to develop and progressively crash test our new High Security Pedestrian Safety
generation Hybrid temporary barrier system (“HV2”) that passed our initial crash test in February this year.
Bollard.
In addition, we will continue to develop and progressively crash test our new High Security Pedestrian Safety
Bollard.
Since year end, we have secured a significantly enhanced facility with our financier, Commonwealth Bank,
for a new term of three years, which will allow us to continue to invest in new innovations as well as have the
Since year end, we have secured a significantly enhanced facility with our financier, Commonwealth Bank,
working capital facilities needed to manage the organic growth of the business. We appreciate the support
for a new term of three years, which will allow us to continue to invest in new innovations as well as have the
the bank has provided us over the past few years of serious business transformation and are pleased at the
working capital facilities needed to manage the organic growth of the business. We appreciate the support
continued confidence the bank is showing in the direction and advances the Company is now taking.
the bank has provided us over the past few years of serious business transformation and are pleased at the
continued confidence the bank is showing in the direction and advances the Company is now taking.
A C K N O W L E D G M E N T S
It has been another busy year for the Company, one that has finally produced a bottom line profit. This is
A C K N O W L E D G M E N T S
down to the ongoing efforts and dedication of our loyal staff who continue to find ways to provide innovative
It has been another busy year for the Company, one that has finally produced a bottom line profit. This is
and value-added solutions for our customers.
down to the ongoing efforts and dedication of our loyal staff who continue to find ways to provide innovative
and value-added solutions for our customers.
Finally, I sincerely thank all our shareholders for their ongoing patience and continued support. Our primary
focus continues to be the substantial improvement in the financial performance and sustainability of your
Finally, I sincerely thank all our shareholders for their ongoing patience and continued support. Our primary
Company and I hope you can see that we are making steady progress towards this outcome.
focus continues to be the substantial improvement in the financial performance and sustainability of your
Company and I hope you can see that we are making steady progress towards this outcome.
David Ashmore
Chairman of the Board
David Ashmore
Chairman of the Board
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5
CHIEF EXECUTIVE OFFICER’S REVIEW OF
OPERATIONS AND ACTIVITIES
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 6 - 2 0 1 7
I am very pleased to report that the Company has achieved a net profit before tax for the past financial year.
The Company generated annual operating revenues of $16.9 million (FY2016: $16.3 million) and a net profit
before tax of $154k (FY2016: $157k loss). This was achieved on the back of continued organic growth
across all sectors of our business and the first significant International sales, particularly in the USA.
During the year we rationalised our domestic business into two (customer centric) streams – Traffic
Solutions and Public Lighting Solutions. This was to enable greater focus on the core customer bases
of the two portfolios and it is pleasing that we derived top line growth through this initiative, even allowing
for the loss of the third party license agreement for the energy absorbing bollard in July 2016.
Our Traffic Solutions portfolio reported annual ongoing revenue growth of 20%.
This was on the back of solid growth in our posts and rubber traffic calming product range with significant
orders fulfilling various requirements for Melbourne’s Monash Freeway upgrade and Sydney’s upgrade
of roads around the new Northern Beaches Hospital, to name two high profile projects.
Last year’s introduction and initial trials of the temporary portable rumble strip product – RoadquakeTM
– have led to widespread industry interest and growing acceptance, particularly in regional areas, of
this unique workzone safety product.
We continued to secure significant contracts for our exclusively licensed concrete barrier solution, the
T-LOKTM barrier during the financial year, with additional sections of the Pacific Highway upgrade in
northern NSW as well as major projects in Melbourne including Metro Tunnel, Webb Dock and Victoria
Harbour. Our barriers were also selected to safeguard the 57,000 fans who attended the 2016 Rally
Australia event at Coffs Harbour in November last year.
The introduction of our new Zone Essential variable messaging sign (“VMS”) trailer in the latter part of
the financial year led to us winning a tender for the Sydney Olympic Park Authority. The customer
selected our solution on the basis of its high quality build, its superior cloud-based communication
software, and its excellent value for money. We have also continued to rollout our proprietary VMS
web-based management platform – Zone2 to existing and new customers nationwide.
Our IronmanTM Hybrid barrier rental offering grew 73% over the year with increased demand for our
specialised knowledge in flexible deployments and expertise in required traffic layouts providing a fully
outsourced barrier solution for our customers, whose primary focus is to construct a roadway. We have
broadened our offering recently by including our new Zone Essential VMS to our equipment rental fleet
and we will look at other products to allow us to become a more holistic provider of workzone solutions
to our customers who value our expertise in determining and implementing their workzone safety
obligations.
Our Public Lighting solutions portfolio reported annual revenue growth of 10%.
This was on the back of established customer relationships and solid demand for our urban street
lighting solutions, maintaining our leading market share in the Victorian residential development space.
In addition, we have successfully introduced some solar public lighting solutions, targeted initially at the
local government market, to provide more flexible options in facilitating safer public spaces in areas that
are not easily accessible and/or in a more environmentally friendly and cost effective way. This is
definitely a targeted growth area for us as annual revenues for our solar lighting offering trebled year
on year, albeit coming off an initial low base.
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6
Internationally, we generated $467k in revenue from overseas sources, including our initial order from
our USA distributor of IronmanTM barriers. We have also secured our first overseas customer for our
flexible signage (in Europe) and we continue to sell our Traffic products into New Zealand.
We have had great success during the year with regards to our innovative product research and
development as a result of our previous investment in a sophisticated product performance and
simulation software program, which enabled us to achieve a successful crash test of our next generation
HV2 Hybrid workzone barrier in its first impact, with the actual results closely aligned to the simulation
models we had run. This has demonstrated the advantage of this software tool in reducing the time
and in particular, the significant costs associated in running a physical crash test.
We also launched a portable off-grid solar light solution in the past year. We have seen significant initial
demand for this product, which provides for temporary deployment of an energy-efficient light, ideal for
night works, public events and night-time security at a fraction of the cost to maintain and power
alternate solutions.
In response to global concerns associated with vehicles being used to cause mass death and injury in
urban precincts, we have developed a new High Security Pedestrian Safety Bollard. Whilst various
authorities have deployed interim pedestrian protection systems we believe that with our extensive
knowledge and understanding of how various barriers perform under a multitude of vehicle impact scenarios,
we are best-placed to assist authorities in providing permanent long-term solutions to at least minimize the
impact of these horrendous acts.
L O O K I N G A H E A D
We enter our 25th year of operation in a strong position, further enhanced with the recent confirmation
from our financier to extend our banking facilities for a further three years on better terms and conditions.
We are now able to pursue our growth strategies without any concerns around our debt funding.
We anticipate another year of improved profitability, taking advantage of the projected growth in
committed Australian construction sector projects, particularly along the eastern seaboard.
We will keep building on the achievements made to date on both the domestic and international front
and I believe we have the broad product range, in-depth industry knowledge and expertise to continue
to seek business opportunities in assisting our customers in providing solutions to their various road
and public safety needs.
Finally, I would like to acknowledge the support of all the Saferoads Team, who have worked tirelessly
to achieve a positive result for FY2017. We are all focussed on driving sustainable growth and profit
improvement for the foreseeable future.
Darren Hotchkin
Chief Executive Officer
7
THE YEAR IN REVIEW
R E S E A R C H & D E V E L O P M E N T
HV2 HYBRID WORKZONE BARRIER
One of our key R&D projects over the year passed its first major milestone when we crash-tested the HV2 Hybrid
workzone barrier at the NSW Roads and Maritime Services Crashlab testing facility in Sydney in February 2017.
It passed the toughest of the two tests needed to achieve TL-3 MASH (“Manual for Assessing Safety Hardware”)
crash performance standards that become mandatory for Temporary Road Safety Barrier Systems in the USA from
31st December 2020 and are likely to become the rule here in Australia in the forseeable future.
The test was a 100 kph test for a 2,270 kg vehicle, impacting at a 25 degree angle. The deflection result was less
than 1 metre, which is extremely low for a free-standing temporary barrier, particularly given the weight of this
new barrier is half the weight of conventional concrete temporary barriers most commonly used. Our barrier is an
unanchored steel and concrete barrier using our patented technology.
As well as the very pleasing actual test result, we are also delighted at how close the physical crash test result
was to the simulations we had done during the design and development phase of the project using our new Finite
Element Modelling software.
O M N I - S T O P T M ULTRA SECURITY BOLLARD CRASH TEST
In May this year Saferoads conducted a full-scale crash test to evaluate the performance of its new Omni-StopTM
Ultra Security Bollard. A 1,600kg Ford Falcon Station Wagon was chosen as the impacting vehicle so the bollard’s
performance could be compared against other similar bollards tested in Australia. The Bollard was impacted at a
speed of 50 kph. The Omni-StopTM Ultra Security Bollard succeeded in containing the vehicle and prevented the
vehicle from continuing past the bollard.
Whilst the Omni-StopTM Ultra Security Bollard was specifically
developed as a Security bollard, not a Road Safety device, the
performance was evaluated against the current Standard for Road
Safety Devices, to see how it faired.
In conclusion, the Omni-StopTM Ultra Security Bollard has
proven to be a very effective low-cost Security Bollard that
can be utilised for pedestrian safety, asset protection and is
removable for controlled access requirements.
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T- L O K T M B A R R I E R S O N PA C I F I C C O M P L E T E P R O J E C T
Saferoads have been contracted on several stages of the Pacific Complete project
to provide Safety Barriers and deployment solutions during the extensive upgrade
of the Pacific Hwy (Woolgoolga to Ballina).
T-LOKTM Barriers can currently be seen from as far south as Halfway Creek to as
far north as Chatsworth Island and there’s approximately 7-10 km’s currently on
site, with further deployments planned in Tyndale, Woodburn and further north over
the coming months. The T-LOKTM precast concrete barrier is a well-established,
versatile system with a diverse range of applications over and above their typical
road and crash tested use.
T- L O K T M – F L E X I B L E A N D A D A P TA B L E
In a completely different application, Saferoads provided T-LOKTM barriers to protect spectators and officials in Rally
Australia’s Coffs Harbour Jetty Super Special Stage in November 2016.
Safety is the number one priority in this world class event.
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THE YEAR IN REVIEW
V M S Z O N E E S S E N T I A L
DELIVERY FOR SYDNEY OLYMPIC PARK AUTHORITY
Saferoads’ Sales representative, Luke McIlwraith, was pleased to report the smooth delivery of 10 brand new
Zone Essential VMS boards to Sydney Olympic Park Authority (“SOPA”) in June. After a short tendering process,
Saferoads were awarded the contract. The boards were delivered on time, to specification, as requested.
SOPA advised they were very pleased with the recent delivery of both
the Colour and Amber VMS Boards. It was reported that Saferoads’
competitive pricing and 24 hour, 7 day Help Line and Customer
Service through Zone Care, cemented SOPA’s decision as
Saferoads being the preferred supplier over its competitors.
S E PA R AT I O N K E R B
BRISBANE CITY COUNCIL PROJECT
The Brisbane City Council engaged Saferoads to provide over 50 meters of Separation Kerb
to a black spot area in the city, that was renowned for many accidents. This trouble spot is
located at the Eastern end of Fortitude Valley, as traffic enters the M7 Clem Jones Tunnel,
on the Corner of Adelaide and Ivory Streets. The Separation Kerb was installed to prevent
motorists from cutting corners and to separate traffic.
This highly successful installation of Separation Kerb has seen an
exceptional decrease in traffic related accidents in this area.
10
I R O N M A N T M H Y B R I D R E N TA L B A R R I E R P R O J E C T
Saferoads were engaged to supply safety barriers to the Roadtek QLD Project on
the Sunshine Coast. The deployment included 300 meters of IronmanTM Hybrid
Barrier. Saferoads have completed many projects, requiring high level TL-3
Barrier protection over the course of the past 12 months and one of the ongoing requirements for these complex projects
is night works. Having the capacity to deploy at night is safer and easier to achieve with reduced traffic volumes.
Saferoads have completed several, large scale night works projects and our barrier specialists and subcontracting teams
are well equipped to manage these types of projects and installations, with safety being our number one priority.
On this project we were asked to provide a turn-key solution including delivery, installation and certification of the barriers
installation. The deployment was a great success and one where our customer will return to Saferoads again due to our
expertise and guidance through the process.
P O R TA B L E S O L A R L I G H T I N G S O L U T I O N S
EAT STREET PROJECT, BRISBANE
The Queensland State Government required an easy,
portable solar lighting solution for their Eat Street Market,
Northshore in Hamilton. The Eat Street Markets are Hamilton’s
iconic riverfront shipping container markets, that add a blazing coloured landmark to
the Brisbane and South East Queensland dining and entertainment scene.
Saferoads supplied and installed three units on the opposing street and entrance to the
Market.
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THE YEAR IN REVIEW
G R I D D E D L I G H T I N G S O L U T I O N S
WARRNAMBOOL NETBALL COURTS
Saferoads has identified a new market opportunity in the supply of Sports and Court
Lighting, Car Parks and Floodlighting. With this regional Victorian project, Saferoads was
asked to quote and supply all required lighting Solutions for the Allansford Netball Courts
for the Warrnambool City Council.
Photometric data and luminous data sheets were supplied by lighting engineers to
formulate the Lumen Output to reach the levels required for a safe playing surface.
Along with one of our business partners - Sonaray, we were able to calculate the
6,800-lumen required via 8 x 520 Watt LED Flood lights and 2 x 250 Watt LED Flood
Lights @ 5,000 Kelvin at a 40 degree beam spread.
Hose Electrical and Shane Byron of The Midfield Group were the local
contractors who completed the installation.
®
P E R M A N E N T S O L A R L I G H T I N G S O L U T I O N S
HOBSONS BAY CITY COUNCIL, VICTORIA
Saferoads were approached by the Hobsons Bay City
Council to complete their permanent solar lighting upgrade
at the Altona foreshore in Victoria. The project consisted of
the decommissioning of seven gridded light poles and the
installation of seven new off-grid, Solar Light Poles.
After a short tendering process, Saferoads were
awarded the project, as we offered a turn-key solution
with the decommissioning of the old lights, and then
the supply and installation of the new Solar Lights.
Our lighting specialists and subcontracting team
(S & R Foot) were all well equipped to manage
this complex installation project that had limited
access and challenging climatic conditions, with
safety being Saferoads number one priority.
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DIRECTORS’ REPORT
DIRECTORS’ REPORT
Your Directors submit their report for the year ended 30 June 2017.
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 65) (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 focused 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 (2014-2016).
Darren Hotchkin (Age 53)
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.
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13
DIRECTORS’ REPORT
David Cleland (Age 72) (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,
November 2014 and October 2016 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
Peter Fearns (CPA, BBus (Acctg)) (appointed 22 December 2016)
Peter joined Saferoads in December 2011 as Chief Financial Officer and was appointed Company Secretary
on 22 December 2016. He has 20 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 former ASX listed UXC Limited. Prior to Saferoads he was Chief
Financial Officer of a national privately-owned urban planning and property advisory business.
Peter is a Certified Practising Accountant (CPA) and holds a Bachelor of Business degree majoring in
Accounting.
Sonia Joksimovic (appointed 10 August 2015, resigned 22 December 2016)
Sonia was Company Secretary of Saferoads from 10 August 2015 to 22 December 2016. 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.
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
DIVIDENDS
Shares
1,301,807
7,522,585
508,610
No interim or final dividend was paid or declared for the financial year ended 30 June 2017.
No interim or final dividend was declared or paid for the financial year ended 30 June 2016.
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 and permanent and temporary public solar lighting poles;
permanent and temporary crash cushions including bollards and safety barriers.
14
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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 2016-17 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
Extension and Revision of Banking Facilities
Since the end of the financial year the Company has entered into a revised facility agreement with its
financier, Commonwealth Bank of Australia, offering an extended term of three years and significantly more
favourable terms and conditions on the back of the improved operational performance and financial position
of the Company.
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.
Page 13
15
DIRECTORS’ REPORT
R E M U N E R A T 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 salary information provided by various professional
organisations.
REMUNERATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL
NON-EXECUTIVE DIRECTORS
Total remuneration for non-executive Directors for 2016-17 was $140,125. 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 $253,615, including statutory
superannuation. This was a reduction from the prior year where a component of his previous year’s
remuneration covered his secondment to the USA for part of the financial year to establish business
opportunities in that market.
KEY MANAGEMENT PERSONNEL
Key Management Personnel (“KMP”) is defined by AASB 124 - Related Party Disclosures. Only Directors
and Executive Management that have the authority and responsibility for planning, directing and controlling
the activities of Saferoads, directly or indirectly and are responsible for the entity’s governance are classified
as KMP.
PERFORMANCE-BASED REMUNERATION
There was no performance-based remuneration (bonus incentives) paid or payable to key management
personnel for the year.
A summary of Company performance for the past five financial years is below.
EPS (cents)
2017
0.3
2016
(0.3)
2015
(0.2)
2014
(3.6)
2013
(5.3)
Net profit/(loss) ($)
118,847
(116,082)
(72,228)
(930,978)
(1,388,899)
Share price ($)
$0.11
$0.13
$0.10
$0.13
$0.06
EMPLOYMENT CONTRACTS
Executive employment agreements have been entered into with the Chief Executive Officer and the Chief
Financial Officer 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.
16
REMUNERATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL
30 June 2017
Short Term
Salaries &
Fees
Fringe
Benefits
Cash
Bonus
Termination
Payment
Super-
annuation
Total
Perform
-ance
Related
Long
Term
Long
Service
Leave
Share
Based
Payment
Options
$
$
$
$
$
$
$
$
%
Non Executive
Directors
D Ashmore
D Cleland
Executive
Director
D Hotchkin
Executive *
P Fearns
Total
43,516
61,750
234,000
162,250
501,516
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
34,859
-
19,615
28,554
83,028
-
-
-
2,904
2,904
-
-
-
-
-
78,375
61,750
253,615
193,708
587,448
-
-
-
-
* 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 2016
Short Term
Salaries &
Fees
Fringe
Benefits
Cash
Bonus
Termination
Payment
Super-
annuation
Total
Perform
-ance
Related
Share
Based
Payment
Options
Long
Term
Long
Service
Leave
$
$
$
$
$
$
$
$
%
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
-
-
-
-
17
DIRECTORS’ REPORT
SHAREHOLDINGS OF KEY MANAGEMENT PERSONNEL
Shares held in Saferoads Holdings Limited:
Balance at
1 July 2016
Acquired
through
On-Market
trade
Sold
Balance at
30 June 2017
7,479,885
1,256,807
508,610
33,000
42,700
45,000
-
-
9,278,302
87,700
-
-
-
-
-
7,522,585
1,301,807
508,610
33,000
9,366,002
Directors
D Hotchkin
D Ashmore
D Cleland
Executive
P Fearns
Total
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.
18
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.
AUDITORS’ 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
28 August 2017
19
AUDITOR’S INDEPENDENCE DECLARATION
The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
AUDITOR’S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF SAFEROADS HOLDINGS LIMITED
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
AUDITOR’S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF SAFEROADS HOLDINGS LIMITED
for the audit of Saferoads Holdings Limited for the year ended 30 June 2017, I declare that, to the
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor
best of my knowledge and belief, there have been:
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 2017, I declare that, to the
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
a
best of my knowledge and belief, there have been:
relation to the audit; and
a
b
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
b
no contraventions of any applicable code of professional conduct in relation to the audit.
relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
M A Cunningham
M A Cunningham
Partner - Audit & Assurance
Partner - Audit & Assurance
Melbourne, 28 August 2017
Melbourne, 28 August 2017
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘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.
‘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 limited by a scheme approved under Professional Standards Legislation.
20
CORPORATE GOVERNANCE STATEMENT
CORPORATE GOVERNANCE STATEMENT
The Board of Directors of Saferoads Holdings Limited is responsible for the corporate governance of the
the ASX Corporate Governance Principles and
Saferoads group. The Board has considered
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 Group’s Corporate Governance Statement for the financial year ending 30 June 2017 is dated as at 30
June 2017 and was approved by the Board on 25 July 2017. The Board advises that it complies with the
ASX Corporate Governance Principles set out in the Company’s Corporate Governance Statement which is
located on the Company’s website (www.saferoads.com.au/investors/corporate-policies).
21
SAFEROADS HOLDINGS LIMITED
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
FOR THE YEAR ENDED 30 JUNE 2017
Notes
CONSOLIDATED
2017
$
2016
$
Revenue
Revenue from product sales and rentals
Product royalty income
Cost of direct materials and labour
Movement in inventories
Gross profit
Other income
Employee benefits
Motor vehicle costs
Occupancy costs
Travel and accommodation costs
IT & Communications costs
Relocation costs
Other expenses
Earnings before interest, tax, depreciation and amortisation
(EBITDA)
Depreciation, amortisation and impairment
Earnings before interest and tax (EBIT)
Finance costs
Profit/(loss) before income tax
Income tax benefit/(expense)
Net profit/(loss) for the period
Net profit/(loss) attributable to members of the parent
Other comprehensive income
Total comprehensive income for the period
Total comprehensive income attributable to members of the
parent
Earnings per share
- Basic for profit/(loss) for the full year
- Diluted for profit/(loss) for the full year
Dividend paid per share (cents)
The accompanying notes form part of these financial statements
4
4
4
4
4
4
4
4
5
6
6
7
16,909,644
26,048
15,904,666
364,084
16,935,692
16,268,750
(11,492,588)
183,232
(10,219,077)
(103,247)
5,626,336
5,946,426
101,697
(3,277,238)
(133,654)
(362,430)
(182,765)
(159,526)
-
(812,694)
113,359
(3,230,079)
(143,533)
(352,703)
(308,140)
(155,863)
(207,037)
(1,158,624)
799,726
503,806
(458,894)
(450,878)
340,832
52,928
(186,757)
(209,988)
154,075
(157,060)
(35,228)
40,978
118,847
(116,082)
118,847
(116,082)
- -
118,847
(116,082)
118,847
(116,082)
Cents
0.33
0.33
Cents
(0.32)
(0.32)
- -
22
SAFEROADS HOLDINGS LIMITED
Consolidated Statement of Financial Position
AS AT 30 JUNE 2017
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Total Current Assets
Non-current Assets
Plant and equipment
Intangible assets
Deferred tax assets
Other non-current assets
Total Non-current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Unearned income
Interest-bearing loans and borrowings
Provisions
Total Current Liabilities
Non-current Liabilities
Interest-bearing loans and borrowings
Provisions
Total Non-current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Retained earnings
TOTAL EQUITY
The accompanying notes form part of these financial statements
Notes
CONSOLIDATED
2017
$
2016
$
9
10
11
12
5
13
14
15
14
15
16
16
665,915
2,917,658
2,833,171
83,622
6,500,366
3,505,238
944,499
1,257,312
17,917
5,724,966
808,395
3,462,035
2,649,939
176,297
7,096,666
3,474,070
771,802
1,292,540
17,917
5,556,329
12,225,332
12,652,995
2,567,846
43,151
2,170,434
411,708
5,193,139
203,923
73,748
277,671
5,470,810
6,754,522
2,640,738
5,603
659,333
387,434
3,693,108
2,285,066
39,146
2,324,212
6,017,320
6,635,675
5,353,905
1,400,617
6,754,522
5,353,905
1,281,770
6,635,675
23
SAFEROADS HOLDINGS LIMITED
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2017
Contributed
Equity
$
Retained
Earnings
$
Total Equity
$
CONSOLIDATED
At 1 July 2015
Net profit/(loss) for the period
Other comprehensive income for the period
At 30 June 2016
5,353,905
1,397,852
-
(116,082)
- -
6,751,757
(116,082)
-
5,353,905
1,281,770
6,635,675
At 1 July 2016
Net profit/(loss) for the period
Other comprehensive income for the period
5,353,905
1,281,770
6,635,675
-
118,847
118,847
- -
-
At 30 June 2017
5,353,905
1,400,617
6,754,522
The accompanying notes form part of these financial statements
24
SAFEROADS HOLDINGS LIMITED
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2017
Notes
CONSOLIDATED
2017
$
2016
$
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Net cash flows from operating activities
8
Cash flows from investing activities
Proceeds from sale of plant and equipment
Purchase of plant and equipment
Product development costs
R&D tax rebate received
Net cash flows from investing activities
Cash flows from financing activities
Repayment of borrowings
Net cash flows from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
8
The accompanying notes form part of these financial statements
19,265,263
(18,047,629)
17,969,712
(16,743,096)
1,217,634
3,219
(187,950)
1,032,903
1,226,616
6,911
(211,125)
1,022,402
25,546
(321,046)
(447,035)
237,405
(505,130)
(670,253)
(670,253)
(142,480)
808,395
665,915
35,288
(316,088)
(263,752)
220,624
(323,928)
(610,263)
(610,263)
88,211
720,184
808,395
25
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
1
CORPORATE INFORMATION
Saferoads Holdings Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the
Australian Securities Exchange (ASX).
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a)
Basis of preparation
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
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.
(b)
Statement of compliance
The financial report has been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting
the Australian Accounting Standards Board (AASB). Compliance with
Standards and other authoritative pronouncements of
Australian Accounting Standards results in full compliance with the International Financial Reporting Standards (IFRS) as issued by
the International Accounting Standards Board (IASB).
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 2016. There was no
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
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2017 reporting
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.
AASB 9 Financial Instruments replaces AASB 139 Financial Instruments: Recognition and Measurement and is effective from 1
It introduces new requirements for the classification and measurement of financial assets and liabilities and includes
January 2018.
impairment model and a substantially-changed approach to hedge accounting. These
a forward-looking ‘expected loss’
requirements improve and simplify the approach for classification and measurement of
financial assets compared with the
requirements of AASB 139. AASB 9 requirements regarding hedge accounting represent a substantial overhaul of hedge
accounting that enable entities to better reflect their risk management activities in the financial statements.
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
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
revenue-related Interpretations and is effective from 1 January 2018. The new standard:
- 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
- provides new and more detailed guidance on specific topics (e.g. multiple element arrangements, variable pricing, rights of return,
warranties and licensing)
- 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
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.
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
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.
26
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
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 will be:
- a significant increase in lease assets and financial liabilities recognised on the balance sheet
- there will be a reduction in the reported equity 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 28 August 2017. 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.
27
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
(e)
Property, plant and equipment
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
depreciated using the prime cost method.
Plant and equipment - 5% to 50%
(f)
Borrowing costs
Borrowing costs are recognised as an expense when incurred.
(g)
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
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
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
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
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
reflects current market assessments of the time value of money and the risks specific to the asset.
(h)
Goodwill and intangible assets
Goodwill
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.
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
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
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
- is not larger than a segment based on either the group's primary or the group's secondary reporting format determined in
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
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-
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
manner is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained.
Intangibles
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.
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
comprehensive income through the amortisation line item.
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.
28
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
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 a sale 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.
29
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
(m)
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
All
associated with the borrowing.
Interest expense is recognised as it accrues.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective
interest method.
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.
(n) Leases
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.
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
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.
Finance charges are charged directly against income. Finance leased assets are amortised over the estimated useful life of the
asset.
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.
(o)
Provisions
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
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
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.
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.
(p)
Contributed equity
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.
(q)
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
reliably measured. The following specific recognition criteria must also be met before revenue is recognised.
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
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.
Rental income
The Group also earns rental income from operating leases of certain plant and equipment. Rental income is recognised on a straight-
line basis over the term of the lease.
Product royalties
Revenue is recognised when the Group's right to receive the royalty is established.
Interest
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.
30
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
(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
The group may use derivative financial
instruments such as forward currency contracts to hedge risks associated with foreign
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.
31
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
Key Judgements
(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
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.
(x) Going Concern
The consolidated entity generated an operating profit after tax of $118,847 for the financial year ended 30 June 2017.
The Company reduced core debt by $504,000 in the financial year and was in compliance with the repayment plan with its financier,
In addition, the Company also met its single financial covenant for the financial year ended 30
Commonwealth Bank of Australia.
June 2017. The Company has met all its obligations under the present facility agreement.
At the date of this report, the Company has entered into a revised facility agreement with its financier, offering an extended term of
three years and significantly more favourable terms and conditions on the back of the improved operational performance and
financial position of the Company.
The Company's ongoing financial turnaround in 2017 resulted from continuing to manage the performance of the business, including
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
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
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.
3
SEGMENT INFORMATION
The Group's chief operating decision maker (Chief Executive Officer) reviews financial
makes strategic decisions based on this consolidated information.
information on a consolidated basis and
The Group operates predominantly in Australia.
During 2017, $3,589,484 or 21% (2016: $3,531,985 or 22%) of the Group’s revenues depended on a single customer.
32
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
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
(ii) Other income
R&D tax rebate
Net gain/(loss) on sale of assets
Interest
Government grant
Other
(iii) Expenses
Depreciation and amortisation
- Plant & equipment
- Intangible assets
Impairment of plant & equipment
Relocation costs
Bad debts written off
Provision for doubtful debts / (provision writeback)
Motor vehicle costs
Occupancy costs
CONSOLIDATED
2016
$
2017
$
16,909,644
26,048
15,904,666
364,084
16,935,692
16,268,750
58,861
(9,030)
3,219
18,355
30,292
101,697
121,863
(21,976)
6,911
-
6,561
113,359
17,037,389
16,382,109
355,513
103,381
-
458,894
-
-
30,000
312,149
86,159
52,570
450,878
207,037
92
(3,835)
133,654
143,533
362,430
352,703
Travel and accommodation costs
182,765
308,140
IT & Communications costs
159,526
155,863
33
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
5
INCOME TAX
Major components of income tax expense for the year ended 30 June 2017 are:
CONSOLIDATED
2016
$
2017
$
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
35,228
(40,978)
35,228
(40,978)
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
154,075
(157,060)
At the statutory income tax rate of 30%
Non-deductible expenses
Effect of change in income tax rates on deferred tax assets
Recognition of prior year unbooked tax losses
46,223
2,979
107,711
(121,685)
(47,118)
6,140
-
-
35,228
(40,978)
Statement of Financial
Position
2017
$
2016
$
Statement of Profit or Loss
and Other Comprehensive
Income
2017
$
2016
$
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
Effect of change in income tax rates on deferred tax assets
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
133,149
(245,855)
45,722
107,711
122,291
(210,525)
5,683
-
(10,858)
35,330
(40,039)
(107,711)
(33,300)
8,769
159,768
-
(40,727)
82,551
1,257,312 1,292,540
1,257,312 1,292,540
1,593
121,685
(135,237)
-
-
-
As as 30 June 2017, the consolidated entity has carry forward tax losses with a tax effect of $2,108,296, measured at the new
corporate tax rate of 27.5%. Carry forward tax losses with a tax effect of $1,257,312 have been brought to account as a deferred tax
asset. Carry forward tax losses with a tax effect of $850,984 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.
34
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
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:
CONSOLIDATED
2016
$
2017
$
Net profit/(loss) attributable to equity holders from continuing
operations
Net profit/(loss) attributable to equity holders of the parent
118,847
118,847
(116,082)
(116,082)
Net profit/(loss) attributable to ordinary shareholders for diluted
earnings per share
118,847
(116,082)
Weighted average number of ordinary shares for basic earnings
Adjusted weighted average number of ordinary shares for diluted
earnings per share
36,400,000
36,400,000
36,400,000
36,400,000
- Basic for profit/(loss) for the full year
- Diluted for profit/(loss) for the full year
Cents
0.33
0.33
Cents
(0.32)
(0.32)
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
Equity dividends on ordinary shares:
Interim franked dividend for 2017: 0.0 cents (2016: 0.0 cents)
Dividends proposed and not recognised as a liability:
Final franked dividend for 2017: 0.0 cents (2016: 0.0 cents)
CONSOLIDATED
2016
$
2017
$
-
-
-
-
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
35
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
8
NOTES TO THE STATEMENT OF CASH FLOWS
Reconciliation of cash
For the purposes of the statement of cash flows, cash and cash
equivalents comprise the following at 30 June:
Cash at bank and on hand
665,915
808,395
CONSOLIDATED
2016
$
2017
$
Reconciliation from the net profit/(loss) after tax to the net
cash flows from operations
Profit/(loss) after tax for the year
Adjustments for:
Depreciation and amortisation
Impairment of plant and equipment
Net (profit)/loss on disposal of plant and equipment
Changes in assets and liabilities
(Increase)/decrease in trade and other receivables
(Increase)/decrease in inventories
(Increase)/decrease in other assets
Decrease/(increase) in deferred tax asset
(Decrease)/increase in trade and other payables
(Decrease)/increase in unearned income
(Decrease)/increase in provisions
Net cash from operating activities
118,847
(116,082)
458,894
-
9,030
398,308
52,570
21,976
544,377
(183,232)
92,675
35,228
(139,340)
37,548
58,876
97,724
103,247
2,938
(40,978)
386,314
(13,559)
129,944
1,032,903 1,022,402
Non-cash financing and investing activities
During the year, the Group acquired property, plant and equipment with an aggregate value of $120,211 (2016: $448,040) by means
of finance leases.
9
TRADE AND OTHER RECEIVABLES (CURRENT)
Trade receivables
Other receivables
Provision for impairment
Ageing of trade receivables not impaired
1 - 30 days
31 - 60 days
61 - 90 days
91 days and over
236,467
(30,000)
2,711,191 3,191,402
270,633
-
2,917,658 3,462,035
1,964,361 1,886,760
716,830 1,154,916
147,226
2,500
2,681,191 3,191,402
-
-
Trade receivables are non-interest bearing. Amounts over 60 days are deemed overdue.
Movement in provision for impairment
Balance at the beginning of financial year
Amounts written off
Additional impairment provision recognised/(released)
10
INVENTORIES
Stock on hand
36
-
-
30,000
30,000
3,835
-
(3,835)
-
CONSOLIDATED
2016
$
2017
$
2,833,171 2,649,939
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
11
PLANT AND EQUIPMENT
Plant & equipment at cost
Less accumulated depreciation
Total plant & equipment
CONSOLIDATED
2016
$
2017
$
6,143,851 5,860,065
(2,638,613)
(2,385,995)
3,505,238 3,474,070
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
Disposals
Carrying amount at 30 June
12
INTANGIBLE ASSETS
Licence agreements at cost
Less accumulated amortisation
Product development costs
Less accumulated amortisation
Patents and product approvals
Movement in carrying amounts
Balance at 1 July 2015
Capitalisation of costs
R&D tax rebate allocation
Amortisation expense
Carrying amount at 30 June 2016
Balance at 1 July 2016
Capitalisation of costs
R&D tax rebate allocation
Amortisation expense
Carrying amount at 30 June 2017
CONSOLIDATED
2016
$
2017
$
441,257
(355,513)
3,474,070 3,131,925
850,129
(312,149)
(52,570)
(143,265)
3,505,238 3,474,070
(54,576)
-
CONSOLIDATED
2016
$
2017
$
-
-
-
73,677
(73,677)
-
1,210,594
(391,077)
819,517
124,982
944,499
Licence
Agreement
$
8,855
-
-
(8,855)
-
-
-
-
-
-
989,446
(287,695)
701,751
70,051
771,802
Patents/
Product
approvals
$
-
70,051
-
-
70,051
70,051
54,931
-
-
124,982
Product Devt
Costs
$
Total
$
672,519
193,701
(87,165)
(77,304)
701,751
701,751
392,104
(170,957)
(103,381)
819,517
681,374
263,752
(87,165)
(86,159)
771,802
771,802
447,035
(170,957)
(103,381)
944,499
Patents/product approvals predominantly relate to various applications for new products that have yet to be commercialised and so
have not been amortised as they have indefinite future benefit to the Group. Once the related asset is in use, then the relevant
patent/product approval will be amortised over its expected useful life.
37
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
13
TRADE AND OTHER PAYABLES (CURRENT)
Trade payables
Accrued expenses
GST payable
CONSOLIDATED
2016
$
2017
$
182,585
70,493
2,314,768 2,337,295
266,902
36,541
2,567,846 2,640,738
Payables are non-interest bearing and are normally settled between 30 and 60-day terms.
14
INTEREST-BEARING LOANS AND BORROWINGS
Current
Hire purchase
Bank loans
Non-current
Hire purchase
Bank loans
CONSOLIDATED
2016
$
2017
$
178,434
1,992,000
2,170,434
155,333
504,000
659,333
203,923
293,066
1,992,000
203,923 2,285,066
-
The Group was in compliance with its reporting covenants at 30 June 2017 and is subject to a scheduled debt repayment plan. The
current facility expires within 12 months therefore, in accordance with Australian Accounting Standard AASB 101, the Company's
term loan has been classified as current as at balance date.
Since the end of the financial year the Company has entered into a revised facility agreement with its financier, Commonwealth Bank
of Australia, offering an extended term of three years and significantly more favourable terms and conditions on the back of the
improved operational performance and financial position of the Company.
Hire purchase liabilities are secured by a charge over the financial assets.
the following financing facilities had been
reporting date,
Financing facilities available
At
negotiated and were available:
Total facilities:
- bank bills
- bank charge card
Facilities used at reporting date
- bank bills
- bank charge card
Facilities unused at reporting date
- bank charge card
CONSOLIDATED
2016
$
2017
$
1,992,000 2,496,000
75,000
75,000
1,992,000 2,496,000
72,000
65,500
9,500
3,000
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.
Saferoads Pty Ltd is required to provide the Commonwealth Bank with half yearly financial statements.
15
PROVISIONS
Current
Employee benefits
Non-Current
Employee benefits
Deferred rent liability
38
CONSOLIDATED
2016
$
2017
$
411,708
387,434
32,123
41,625
73,748
20,203
18,943
39,146
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
16
EQUITY
Contributed Equity
Ordinary shares
Balance at beginning of period
Issued and fully paid
Movements in ordinary shares on issue (legal parent)
Balance at beginning of the period
At 30 June
CONSOLIDATED
2016
$
2017
$
5,353,905 5,353,905
5,353,905 5,353,905
No. of shares
36,400,000
36,400,000
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
Movements in retained earnings are as follows:
Balance at beginning of period
Net profit/(loss) for the year
Balance at 30 June
17
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
CONSOLIDATED
2016
$
2017
$
1,281,770
118,847
1,400,617
1,397,852
(116,082)
1,281,770
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
2016
$
2017
$
665,915
2,917,658
808,395
3,462,035
3,583,573
4,270,430
4,942,203
5,585,137
4,942,203
5,585,137
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.
39
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
(a)
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 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
liabilities, is as follows:
Weighted
Average
Interest
Rate
Non Interest Bearing
Fixed Interest Rate
Maturing
Variable
Interest Rate
Within 1 year
1 to 5 years
Total
2017
Financial Assets
- Cash
- Receivables
%
1.35%
N/A
-
2,917,658
665,915
-
$
$
$
$
$
-
-
-
-
-
-
665,915
2,917,658
3,583,573
Total Financial Assets
2,917,658
665,915
Financial Liabilities
- Payables
- Bank borrowings
- Hire purchase
Total Financial Liabilities
2016
Financial Assets
- Cash
- Receivables
Total Financial Assets
Financial Liabilities
- Payables
- Bank borrowings
- Hire purchase
N/A
6.15%
7.25%
%
1.36%
N/A
N/A
6.52%
7.42%
2,567,846
-
-
-
1,992,000
-
-
-
178,434
-
-
203,923
2,567,846
1,992,000
382,357
2,567,846
1,992,000
178,434
203,923
4,942,203
$
$
$
$
$
-
3,462,035
808,395
-
3,462,035
808,395
-
-
-
-
-
-
808,395
3,462,035
4,270,430
2,640,738
-
-
-
2,496,000
-
-
-
155,333
-
-
293,066
2,640,738
2,496,000
448,399
Total Financial Liabilities
2,640,738
2,496,000
155,333
293,066
5,585,137
(b)
Credit risk
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-
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
significant.
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 $30,000 at 30 June 2017 (2016: nil), as disclosed in
the statement of financial position and notes to the financial statements. The company holds no collateral or security in relation to
financial assets.
As at reporting date, the amount of financial assets past due, but not impaired, is $27,609 (2016: $149,726).
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.
40
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
(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:
2017
- Payables
- Bank borrowings
- Hire purchase
Total Financial Liabilities
2016
- Payables
- Bank borrowings
- Hire purchase
Total Financial Liabilities
Within 1 Year
1 to 5 Years
Over 5 Years
$
$
$
2,567,846
1,992,000
178,434
-
-
203,923
4,738,280
203,923
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
Total
$
2,567,846
1,992,000
382,357
4,942,203
Total
$
2,640,738
2,496,000
448,399
5,585,137
-
-
-
-
-
-
-
-
(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
instrument fluctuating due to
Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial
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 2017
+/-2% in interest rates
+/-5c in AUD / USD
CONSOLIDATED
Profit/(loss)
$
Equity
$
+/-40,000
+/-160,000
+/-40,000
+/-160,000
Year Ended 30 June 2016
$
$
+/-2% in interest rates
+/-5c in AUD / USD
+/-50,000
+/-155,000
+/-50,000
+/-155,000
41
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
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
2016
$
2017
$
263,207
242,447
936,505 1,177,510
909,305
891,476
2,070,428 2,350,022
4,596
12,639
11,518
17,235
17,235
28,753
2,087,663 2,378,776
201,148
216,892
418,040
(35,683)
382,357
178,434
203,923
382,357
185,799
320,867
506,666
(58,267)
448,399
155,333
293,066
448,399
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
Country of
incorporation
% equity interest
2017
2016
Saferoads Pty Ltd
Australia
100%
100%
20
RELATED PARTIES
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 $76,939 (2016: $24,410), with $15,887 included in Trade payables at 30 June 2017 (2016:
$2,628).
Mr D. Hotchkin procured certain Public lighting products at normal commercial rates totalling $7,162 during the year.
42
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
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
Other services (government grant): 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
2017
$
2016
$
70,000
78,500
15,000
1,800
18,000
-
(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
2017
$
2016
$
501,516
83,028
2,904
587,448
622,533
55,771
3,162
681,466
2017
$
2016
$
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Issued capital
Retained earnings
-
-
5,359,929 5,359,929
-
-
5,359,929 5,359,929
5,353,905 5,353,905
6,024
6,024
-
-
Profit/(loss) of the parent entity
Total comprehensive income of the parent entity
Guarantees entered into by the parent entity in relation to debts of
its subsidiaries
-
-
-
(21)
(21)
-
24
SUBSEQUENT EVENTS
Extension and Revision of Banking Facilities
Since the end of the financial year the Company has entered into a revised facility agreement with its financier, Commonwealth Bank
of Australia, offering an extended term of three years and significantly more favourable terms and conditions on the back of the
improved operational performance and financial position of the Company.
43
DIRECTORS’ DECLARATION
DIRECTORS’ DECLARATION
DIRECTORS’ DECLARATION
DIRECTORS’ DECLARATION
In the opinion of the Directors of Saferoads Holdings Limited and its controlled entities:
In the opinion of the Directors of Saferoads Holdings Limited and its controlled entities:
(a)
(a)
(a)
In the opinion of the Directors of Saferoads Holdings Limited and its controlled entities:
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
the financial statements and notes of the consolidated entity and the remuneration disclosures that
with the Corporations Act 2001 (Cth), including:
are contained in the Remuneration Report that forms part of the Directors’ Report are in accordance
the financial statements and notes of the consolidated entity and the remuneration disclosures that
with the Corporations Act 2001 (Cth), including:
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2017
are contained in the Remuneration Report that forms part of the Directors’ Report are in accordance
and of its performance for the year ended that date; and
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2017
with the Corporations Act 2001 (Cth), including:
and of its performance for the year ended that date; and
complying with Accounting Standards and Corporations Regulations 2001.
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2017
complying with Accounting Standards and Corporations Regulations 2001.
and of its performance for the year ended that date; and
(b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when
(b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when
complying with Accounting Standards and Corporations Regulations 2001.
ii)
i)
ii)
i)
i)
ii)
they become due and payable;
they become due and payable;
(c) The financial statements have been prepared in accordance with International Financial Reporting
(b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when
(c) The financial statements have been prepared in accordance with International Financial Reporting
Standards (IFRS) as reported in Note 2.
they become due and payable;
Standards (IFRS) as reported in Note 2.
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
(c) The financial statements have been prepared in accordance with International Financial Reporting
Chief Executive Officer and the Chief Financial Officer in accordance with section 295A of the Corporations
This declaration has been made after receiving the declarations required to be made to the Directors by the
Act 2001 (Cth).
Chief Executive Officer and the Chief Financial Officer in accordance with section 295A of the Corporations
This declaration has been made after receiving the declarations required to be made to the Directors by the
Act 2001 (Cth).
Signed in accordance with a resolution of the Directors.
Chief Executive Officer and the Chief Financial Officer in accordance with section 295A of the Corporations
Signed in accordance with a resolution of the Directors.
Act 2001 (Cth).
On behalf of the Board.
On behalf of the Board.
Signed in accordance with a resolution of the Directors.
On behalf of the Board.
David Ashmore
David Ashmore
Director
Director
David Ashmore
28 August 2017
28 August 2017
Director
28 August 2017
44
INDEPENDENT AUDITOR’S REPORT
The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF SAFEROADS HOLDINGS LIMITED
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Report on the audit of the financial report
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF SAFEROADS HOLDINGS LIMITED
Report on the audit of the financial report
Opinion
We have audited the financial report of Saferoads Holdings Limited (the Company) and its
subsidiaries (the Group), which comprises the consolidated statement of financial position as at
30 June 2017, the consolidated statement of profit or loss and other comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows for the year
then ended, and notes to the consolidated financial statements, including a summary of significant
accounting policies, and the directors’ declaration.
Opinion
We have audited the financial report of Saferoads Holdings Limited (the Company) and its
subsidiaries (the Group), which comprises the consolidated statement of financial position as at
30 June 2017, the consolidated statement of profit or loss and other comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows for the year
then ended, and notes to the consolidated financial statements, including a summary of significant
In our opinion, the accompanying financial report of the Group, is in accordance with the
accounting policies, and the directors’ declaration.
Corporations Act 2001, including:
In our opinion, the accompanying financial report of the Group, is in accordance with the
Corporations Act 2001, including:
a Giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its
performance for the year ended on that date; and
a Giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its
performance for the year ended on that date; and
b Complying with Australian Accounting Standards and the Corporations Regulations 2001.
b Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance with the
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have
also fulfilled our other ethical responsibilities in accordance with the Code.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance with the
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have
also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
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
‘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.
‘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 limited by a scheme approved under Professional Standards Legislation.
45
INDEPENDENT AUDITOR’S REPORT
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report of the current period. These matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000
Key audit matter
Intangible Assets
Note 12
The Group has material intangible assets which
consist of development costs for their various
innovative products.
AASB 138 Intangible Assets sets our specific criteria
to be met in order to capitalise development costs.
INDEPENDENT AUDITOR’S REPORT
AASB 136 Impairment of Assets requires that an
TO THE MEMBERS OF SAFEROADS HOLDINGS LIMITED
entity shall assess at the end of each reporting period
whether there is any indication that an asset may be
impaired. If any indication exists, the entity shall
Report on the audit of the financial report
estimate the recoverable amount of the asset.
This area is a key audit matter due to the inherent
subjectivity that is involved in the Company making
judgements in relation to the capitalisation of their
development costs, as well as the evaluation for any
impairment indicators.
Opinion
We have audited the financial report of Saferoads Holdings Limited (the Company) and its
subsidiaries (the Group), which comprises the consolidated statement of financial position as at
30 June 2017, the consolidated statement of profit or loss and other comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows for the year
then ended, and notes to the consolidated financial statements, including a summary of significant
accounting policies, and the directors’ declaration.
–
–
In our opinion, the accompanying financial report of the Group, is in accordance with the
Corporations Act 2001, including:
a Giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its
performance for the year ended on that date; and
How our audit addressed the key audit matter
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
Our procedures included, amongst others:
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• Enquiring with management to obtain and
W www.grantthornton.com.au
document an understanding of management’s
process and controls related to the capitalisation of
development costs and assessment of impairment;
• Testing significant additions that have been
capitalised in the period and assessing compliance
with the recognition requirements under AASB
138;
• Reviewing management’s value in use calculations
for each product to critically assess inputs and
assumptions applied, including:
–
Challenging the associated underlying
forecast cash flows and comparing key
assumptions to historical results and business
trends;
Evaluating appropriateness of the discount
rate applied; and
Performing sensitivity analysis on the
significant inputs and assumptions and
comparing to the carrying amount of the
product development costs;
•
Identifying any discontinued products through
discussions with management and review of sales
results; and
• Assessing the adequacy of related disclosures
within the financial report.
b Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Information Other than the Financial Report and Auditor’s Report Thereon
The Directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2017, but does not
include the financial report and our auditor’s report thereon.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance with the
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have
also fulfilled our other ethical responsibilities in accordance with the Code.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘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.
Responsibilities of the Directors for the Financial Report
The Directors of the Company are responsible for the preparation of the financial report that gives
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the Directors determine is necessary to enable the
preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
Liability limited by a scheme approved under Professional Standards Legislation.
46
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the Directors either intend to liquidate the Group or
to cease operations, or have no realistic alternative but to do so.
The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with the Australian Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of this financial report.
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF SAFEROADS HOLDINGS LIMITED
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
Report on the audit of the financial report
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our
auditor’s report.
Opinion
We have audited the financial report of Saferoads Holdings Limited (the Company) and its
subsidiaries (the Group), which comprises the consolidated statement of financial position as at
30 June 2017, the consolidated statement of profit or loss and other comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows for the year
then ended, and notes to the consolidated financial statements, including a summary of significant
accounting policies, and the directors’ declaration.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended
30 June 2017.
In our opinion, the accompanying financial report of the Group, is in accordance with the
Corporations Act 2001, including:
In our opinion, the Remuneration Report of Saferoads Holdings Limited, for the year ended
30 June 2017, complies with section 300A of the Corporations Act 2001.
a Giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its
performance for the year ended on that date; and
b Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Responsibilities
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.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance with the
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have
also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘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.
M A Cunningham
Liability limited by a scheme approved under Professional Standards Legislation.
Partner - Audit & Assurance
Melbourne, 28 August 2017
47
ASX ADDITIONAL INFORMATION
The shareholder information set out below was applicable as at 31 August 2017. At this date the Company had on
issue 36,400,000 ordinary shares in the company held by 575 shareholders.
SUBSTANTIAL SHAREHOLDERS
porations Act.
Holder name
any in accordance with section 671B of the Cor-
No. of ordinary shares in which interest
is held
7,522,585
4,555,897
2,609,429
2,277,428
1,904,409
No. of shares
% Held
7,479,885
3,208,163
2,609,429
2,277,428
1,804,409
1,301,807
1,125,650
844,522
800,000
625,848
508,610
503,212
490,000
470,000
434,000
368,936
279,925
271,464
250,009
222,900
25,876,197
20.55
8.81
7.17
6.26
4.96
3.58
3.09
2.32
2.20
1.72
1.40
1.38
1.35
1.29
1.19
1.01
0.77
0.75
0.69
0.61
71.09
%
0.16
1.49
2.00
14.36
81.98
100.00
MR DARREN JOHN HOTCHKIN & MRS JENNIFER ANN HOTCHKIN
RUMINATOR PTY LTD and related entities
MR STEVEN DI FABRIZIO
MR DUNCAN FRANCIS SMITH
MR NOEL THOMPSON
T W EN T Y L A RG E S T SH A RE H O LD E R S
Name
MR DARREN JOHN HOTCHKIN & MRS JENNIFER ANN HOTCHKIN
RUMINATOR PTY LTD
CAON PTY LTD
MR DUNCAN FRANCIS SMITH
NLKM PTY LTD
MR DAVID ALBERT McCLURE ASHMORE & MRS NOLA JOY ASHMORE
MR GLENN SCOTT WADSWORTH & MR RICKI MARK WADSWORTH
CONTEMPLATOR PTY LTD
MR PHILIP BOMFORD
CARRIER INTERNATIONAL PTY LTD
LIVINGSTONE SERVICES PTY LTD
STITCHING PTY LTD
KOONUNG NOMINEES PTY LTD
WAVET FUND NO. 2 PTY LTD
MR ROSS GEORGE YANNIS
MR EDWARD JAMES DALLY & MRS SELINA DALLY
ROADWORX GROUP PTY LTD
MR BRUCE ALLAN HEAD & MRS BETH ALISON HEAD
C J CORNWELL & SON PTY LTD
MRS JANET GRIFFITHS
D I S TR I B UT I ON O F SH A RE H O LD I N G S
Holdings Ranges
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-and over
Holders
120
176
88
153
46
575
Total Units
59,897
544,124
728,819
5,227,425
29,839,735
36,400,000
The number of shareholders’ holdings less than a marketable parcel is 226.
V O T IN G R I GH T S
All ordinary shares carry one vote per share.
N U M BE R O F OR DI N AR Y S H A RE S SU B JE C T T O E SC RO W
Nil.
48
CORPORATE DIRECTORY
Directors
David Ashmore (Chairman)
Darren Hotchkin (Chief Executive Officer)
David Cleland
Company Secretary
Peter Fearns
Registered Office
22 Commercial Drive
PO Box 2030
Pakenham VIC 3810
Telephone:
Within Australia:
International:
Facsimile:
Email:
Website:
1800 060 672
+61 3 5945 6600
03 5940 9420
sales@saferoads.com.au
www.saferoads.com.au
Share Registry
Automic Registry Services
Suite 310, Level 3
50 Holt Street
Surry Hills NSW 2010
PO Box 2226
Strawberry Hills NSW 2012
Bankers
Commonwealth Bank of Australia
Warragul VIC 3820
Auditors
Grant Thornton
The Rialto, Level 30
525 Collins Street
Melbourne VIC 3000
ASX Code
SRH
Telephone
Within Australia: 1300 288 664
International:
Facsimile:
Email:
Website:
02 8583 3040
info@automic.com.au
www.automic.com.au
+61 2 9698 5414
ISO CERTIFICATIONS:
PROFESSIONAL AFFILIATIONS:
49
NOTES
50
NOTES
51