ANNUAL REPORT 2018
S A F E R O A D S H O L D I N G S L I M I T E D
ABN 81 116 668 538
HV2TM Barrier successful
TL-4 crash test - January 2018
IMPROVING PUBLIC SAFETY
2
CONTENTS
Chairman’s Overview .............................................................................................................................................. 4
Chief Executive Officer’s Review of Operations and Activities ................................................................................ 6
The Year in Review.................................................................................................................................................... 8
Directors’ Report ...................................................................................................................................................... 12
Auditor’s Independence Declaration ....................................................................................................................... 19
Corporate Governance Statement........................................................................................................................... 20
Financial Statements ............................................................................................................................................... 21
Notes to the Financial Statements........................................................................................................................... 25
Directors’ Declaration .............................................................................................................................................. 43
Independent Auditor’s Report .................................................................................................................................. 44
ASX Additional Information ...................................................................................................................................... 47
Corporate Directory ................................................................................................................................................. 48
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 C I A L O V E R V I E W
On behalf of the Board, I am pleased to report a profit after tax for the financial year of $710k that is an
excellent result reflecting solid organic sales growth and good cost management. This profit is however only
a solid start towards a much larger goal but it does reflect our ongoing sustainable transformation 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 was up $2.2 million, or 13% to $19.2 million. There was an improvement in gross margins, which
is pleasing given the highly competitive nature of the markets we operate in. Our continued focus on supply
side cost reductions and product quality control has certainly enhanced our ability to organically generate
sales. Of particular importance has been the interest in our products from national industrial hire companies
that underscores the quality and regulatory acceptance of our barriers and our solar light products.
Further scheduled bank debt reduction of $134k for the year saw it reduce to $1.86 million and with the full
year effect of our revised facility rates, our finance costs reduced further. We have used hire purchase
finance as necessary for our rental fleet expansion and replacement motor vehicles. Our overall net debt to
equity gearing has reduced further from 20.2% to 15.6%.
We again generated strong operating cash flows during the year, allowing us to maintain adequate cash
reserves to support the working capital needs of the business and provide the basic funding for our significant
product innovation projects.
The table below summarizes the key metrics of the transformation over the past three financial years:
Revenue
EBITDA
Profit/(loss) after tax
Operating cash flows
Gearing (net debt / net debt + equity)
Year ending 30 June
2017
$'000
2016
$'000
2018
$'000
16,269
16,936
19,193
504
(116)
1,227
24.4%
800
119
1,218
20.2%
1,371
710
1,470
15.6%
4
S T R A T E G I C O P P O R T U N I T I E S
During 2018, we have achieved good underlying profitability and our main priority continues to be organic
growth in sales to regain our former market share and in turn enhanced profits. Each of our products have,
S T R A T E G I C O P P O R T U N I T I E S
for their respective markets, key initiatives that are gaining momentum and enhancing our profitability.
During 2018, we have achieved good underlying profitability and our main priority continues to be organic
National transport infrastructure spending continues to grow with committed funding from State and Federal
growth in sales to regain our former market share and in turn enhanced profits. Each of our products have,
Governments for major Australian transport infrastructure projects continuing to be a high priority. The
for their respective markets, key initiatives that are gaining momentum and enhancing our profitability.
majority of these are on the eastern seaboard where we are involved in some significant major projects. Our
concrete temporary barrier solution in particular continues to be an attractive offering for major road works
National transport infrastructure spending continues to grow with committed funding from State and Federal
along the Pacific Highway in northern NSW and southern Queensland. Our RoadQuakeTM rumble strip is
Governments for major Australian transport infrastructure projects continuing to be a high priority. The
gaining significant acceptance for its ability to physically enforce roadworks speed limits.
majority of these are on the eastern seaboard where we are involved in some significant major projects. Our
concrete temporary barrier solution in particular continues to be an attractive offering for major road works
Another area of strategic focus for us is pedestrian safety. The ongoing events around the world involving
along the Pacific Highway in northern NSW and southern Queensland. Our RoadQuakeTM rumble strip is
vehicles deliberately driven into urban precincts designated predominantly for pedestrians is a major concern.
gaining significant acceptance for its ability to physically enforce roadworks speed limits.
In response, we have developed our new OmniStopTM High Security Pedestrian Safety Bollard and we are
looking at further more flexible temporary solutions designed to do this in such a way that does not decrease
Another area of strategic focus for us is pedestrian safety. The ongoing events around the world involving
the ambience of the urban area designated to be people-friendly.
vehicles deliberately driven into urban precincts designated predominantly for pedestrians is a major concern.
In response, we have developed our new OmniStopTM High Security Pedestrian Safety Bollard and we are
We will remain focused on innovations that have the potential to capitalize on both domestic and the
looking at further more flexible temporary solutions designed to do this in such a way that does not decrease
significant overseas markets. Accordingly, we are developing strong relationships with key players to take
the ambience of the urban area designated to be people-friendly.
our products to market.
We will remain focused on innovations that have the potential to capitalize on both domestic and the
significant overseas markets. Accordingly, we are developing strong relationships with key players to take
our products to market.
A C K NO W L E D G M E N T S
It has been another busy and successful year for the Company. This is attributable to the dedication, skills
and ongoing efforts of our loyal staff who continue to find ways to provide innovative and value-added
A C K NO W L E D G M E N T S
solutions for our customers.
It has been another busy and successful year for the Company. This is attributable to the dedication, skills
Finally, I sincerely thank all our shareholders for their ongoing patience and continued support. Our
and ongoing efforts of our loyal staff who continue to find ways to provide innovative and value-added
primary focus continues to be the substantial improvement in the financial performance and sustainability of
solutions for our customers.
your Company and I am sure you can see that we are making steady progress towards this outcome.
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 Company and I am sure you can see that we are making steady progress towards this outcome.
David Ashmore
Chairman of the Board
David Ashmore
Chairman of the Board
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 7 - 2 0 1 8
The past financial year has been another successful one for Saferoads, having achieved a significant
improvement in profit of $591k over the previous year to give us $710k net profit after tax.
This was on the back of a 13% increase in revenue to $19.2 million and a corresponding $0.9 million increase
in gross profit, driven by increased volume and margin. This was achieved through continued organic growth
across most sectors of our business and the almost doubling of International sales year on year, particularly
from the USA.
Domestically, we secured our first sale of IronmanTM Hybrid temporary barriers to a major equipment hire
company and we anticipate further transactions in the new financial year.
We continued to secure significant contracts for our exclusively licensed concrete barrier solution, the T-
LOKTM barrier with additional sections of the Pacific Highway upgrade in northern NSW as well as major
projects in Tasmania and some Victorian metropolitan construction work zones. The introduction of our
exclusively licensed SLEDTM end terminal during FY2018 allowed us to offer a more holistic temporary barrier
solution to customers.
Our Rental portfolio, now branded Road Safety Rental, broadened its offering during the year to not only
provide our proprietary IronmanTM Hybrid temporary barrier system but also our proprietary ZONE VMS
trailers. With our specialised knowledge in flexible deployments and expertise in required traffic layouts we
have specifically targeted second tier contractors who require our expertise to mobilise their work zones,
skillsets these customers generally don’t have internally.
Our Public Lighting portfolio reported significant growth, mainly in the area of solar solutions, where we were
successful in procuring a significant order of portable solar light towers by a major Australian equipment hire
company, some of which were utilised at this year’s Commonwealth Games on the Gold Coast in
Queensland.
Our initiatives in adapting solar lighting for public spaces has seen us successfully deliver solutions for
customers including portable solar light poles (incorporating CCTV) for public events and site security and
even solar lights mounted on sound walls and other public infrastructure to prevent graffiti.
Our urban street lighting portfolio grew by 10% year on year as we maintained our leading market share in
the Victorian residential development space. With urban population growth expected to continue at current
rates, we continue to provide the best range of product and an exemplary service to site for our broadening
customer base.
Internationally, we doubled our revenue from the past financial year. This included further orders from our
USA distributor of IronmanTM barriers. We had additional orders for our flexible signage from a European
customer and we continue to sell our Traffic products into New Zealand.
We also successfully introduced our portable solar lighting products to the New Zealand market.
6
I N N O V A T I O N I N I T I A T I V E S
I N N O V A T I O N I N I T I A T I V E S
Saferoads prides itself on being able to develop new and innovative public safety solutions and we achieved
a great deal in the past financial year. The main areas of focus were on our new HV2 TM temporary barrier
Saferoads prides itself on being able to develop new and innovative public safety solutions and we achieved
system and our OmniStopTM pedestrian safety bollard range.
a great deal in the past financial year. The main areas of focus were on our new HV2 TM temporary barrier
system and our OmniStopTM pedestrian safety bollard range.
The most significant development for the year was the very successful crash testing of our new HV2TM barrier
system in January. The HV2TM Barrier is a free standing, temporary longitudinal barrier system successfully
The most significant development for the year was the very successful crash testing of our new HV2TM barrier
crash tested to the MASH TL-4 standard, which included redirecting a 10 tonne truck. This is a major
system in January. The HV2TM Barrier is a free standing, temporary longitudinal barrier system successfully
development for this product that now complies with the new benchmark crash test standard to be in force in
crash tested to the MASH TL-4 standard, which included redirecting a 10 tonne truck. This is a major
the USA from 2020 onwards. We have now applied for the necessary regulatory approvals to give us a fully
development for this product that now complies with the new benchmark crash test standard to be in force in
compliant and marketable system for the huge market in the USA and also here in Australia.
the USA from 2020 onwards. We have now applied for the necessary regulatory approvals to give us a fully
compliant and marketable system for the huge market in the USA and also here in Australia.
During the year we also successfully crash tested two OmniStopTM pedestrian Security bollards and both
stop a vehicle travelling at 50kph. Our 2,270kg (SUV) version complied with the leading USA standard
During the year we also successfully crash tested two OmniStopTM pedestrian Security bollards and both
(ASTM 3016-14). The 1,600kg (family sedan) version was approved for use by VicRoads and NSW RMS
stop a vehicle travelling at 50kph. Our 2,270kg (SUV) version complied with the leading USA standard
during the year. This represents very substantial steps forward in effective and convenient pedestrian
(ASTM 3016-14). The 1,600kg (family sedan) version was approved for use by VicRoads and NSW RMS
protection and each is capable of use as either a fixed or a removable temporary deployment depending on
during the year. This represents very substantial steps forward in effective and convenient pedestrian
the intended safety-zone application.
protection and each is capable of use as either a fixed or a removable temporary deployment depending on
the intended safety-zone application.
These OmniStopTM Bollard products are being developed for sale into global markets to help address the
very real issue of pedestrian protection.
These OmniStopTM Bollard products are being developed for sale into global markets to help address the
very real issue of pedestrian protection.
L O O K I N G A H E A D
L O O K I N G A H E A D
With committed domestic future road infrastructure spend at record levels, now is the right time to invest in
our industry. We are very optimistic that we have the right product and service offerings to obtain our share
With committed domestic future road infrastructure spend at record levels, now is the right time to invest in
of this expected growth and have already benefited from this in the past financial year.
our industry. We are very optimistic that we have the right product and service offerings to obtain our share
of this expected growth and have already benefited from this in the past financial year.
We intend to invest further in our Road Safety Rental brand, through offering a broader range of work zone
products and services for the construction sector, particularly in Victoria.
We intend to invest further in our Road Safety Rental brand, through offering a broader range of work zone
products and services for the construction sector, particularly in Victoria.
We anticipate we will receive regulatory approval of our new HV2TM barrier solution in both Australia and
USA, which will enable full commercialisation into markets that will require this type of barrier solution.
We anticipate we will receive regulatory approval of our new HV2TM barrier solution in both Australia and
USA, which will enable full commercialisation into markets that will require this type of barrier solution.
We will continue to build on our public lighting business, with particular focus on our diversified solar lighting
opportunities.
We will continue to build on our public lighting business, with particular focus on our diversified solar lighting
opportunities.
Finally, I would like to acknowledge the support of all the Saferoads team, who have delivered a solid financial
performance for FY2018 and with the progress of our current initiatives we are focussed on delivering another
Finally, I would like to acknowledge the support of all the Saferoads team, who have delivered a solid financial
year of sustainable profit growth.
performance for FY2018 and with the progress of our current initiatives we are focussed on delivering another
year of sustainable profit growth.
Darren Hotchkin
Chief Executive Officer
Darren Hotchkin
Chief Executive Officer
7
THE YEAR IN REVIEW
O M N I - S T O P T M B O L L A R D S
Civil engineering contractors, RJ Vincent & Co (“RJV”), was commissioned
to develop the new Aveley residential estate in Ellenbrook, WA. This included
the construction of a bridge over a lake for vehicles and pedestrians to enter
or exit the new estate.
Vehicle speed was to be a maximum 40 kmh so they required protection for pedestrians
walking across the bridge. RJV wanted a solution that would not only protect pedestrians,
but also look aesthetically pleasing and would blend in with the ambience of the new
community.
The Omni-StopTM Ultra 50 kmh Bollard was the best solution
and RJV were very satisfied with
the outcome. So much so that
Saferoads have subsequently
installed Omni-StopTM Ultra
Bollards on three additional
bridge sites in
the Aveley Estate.
I R O N M A N T M H Y B R I D B A R R I E R R E N T A L S O L U T I O N
Civil construction company, Negri Contractors, was awarded a contract for the reconstruction of
Bulban Road, Werribee, which had been impacted in recent years by increasing traffic volumes
from the rapidly developing Wyndham West area, which includes Werribee, Wyndham Vale and
Manor Lakes.
The Bulban Road Project included widening the road, additional bicycle paths, pedestrian crossings, bus stop
infrastructure, new pavements, underground stormwater drainage and associated landscape works. Negri sought
Saferoads to provide temporary road barriers for these works and we undertook a huge task to deploy 2,288
metres of IronmanTM Hybrid barriers in a very tight timeframe.
Ricardo Lima, Project Manager at Negri Contractors said “This was a record deployment and Saferoads
and their subcontract crane team conducted themselves very professionally and performed
amazingly well to install this amount of barriers in just 48 hours with just a four-man team. It
really was an incredible team effort, assisted by Negri Contractors
and our traffic management team.”
8
C A R P A R K A N D E X T E R I O R L I G H T I N G
Gumbuya World, located 50 minutes from Melbourne, is Victoria’s newest
theme park, located in a natural bush setting. The park opened just prior to
Christmas 2017.
Part owner, Ron Weinzierl said “Saferoads was instrumental in supplying
all the carpark and exterior lighting throughout the park area. With an
extremely short timeframe, they achieved an excellent result through the
expertise and dedication of the sales staff and manufacturing area. This
included designing, on short notice, unique pole mounted speaker boxes
within 5 days”.
“Redesigning the carpark lighting to achieve an approved
layout and supplying a solution
within 12 weeks contributed
greatly to us meeting our
deadline of opening prior to
last Christmas.”
S O U N D W A L L B A R R I E R L I G H T I N G
The sound wall barriers along Memorial Drive at Woonona, a northern suburb
of Wollongong, NSW have long been a target of graffiti and become an
eyesore for both motorists and pedestrians. Roads and Maritime Services
(“RMS”) hired Nowra Aboriginal artist Warwick Keen and owner of Port
Kembla’s Urban Art Australia, Anthony Jones, to improve the look of the wall.
After consulting Saferoads about its solar wall brackets, RMS purchased and installed them to highlight the mural artwork
and deter graffiti at night, which was costing up to $100,000 a year to clean up. They also light up the adjacent pathway
to make it safer for pedestrians at night.
9
THE YEAR IN REVIEW
T - L O K T M C O N C R E T E B A R R I E R R E N T A L S O L U T I O N
Saferoads was engaged to provide workzone protection for A1 Civil Pty Ltd for a new
freeway on ramp at Nar Nar Goon, 70km south-east of Melbourne.
“We engaged Saferoads Rental due to their expertise around barriers, compliance
and deployment. Given the sensitivity of this project, we needed to ensure things
ran smoothly right from the beginning as all stakeholders were keeping a watchful eye on progress and performance.
Saferoads were able to deliver a 550 metre T-Lok concrete barrier deployment in just over 7 hours on night shift with a
4-man team and deployed the barriers with precision. A1 Civil were able to construct safely behind the barriers for the
duration of the project until the barriers were removed. Again, Saferoads performed well during the demobilisation where
they were working against the clock all night.”
Michael McGill – Project Manager, A1 Civil
I N T E R T R A F F I C
A M S T E R D A M – M A R C H 2 0 1 8
Intertraffic Amsterdam is the platform of choice for transport
professionals from around the world to meet. It is a biennial event organised to stay up to speed on the developments in
the fields of infrastructure, safety, parking, smart mobility and traffic management, with some 800 exhibiting companies
from 47 countries and over 30,000 visitors from 134 countries worldwide.
Saferoads exhibited again this year and it was a great opportunity to meet with our existing international partners as well
as find some new opportunities and to see what’s new in our industry. We displayed for the first time our HV2TM Barrier as
well as OmniStopTM Bollards and KangouTM flexible signage.
We received a very good response to all of these products and we
should gain some new export orders and opportunities from this
over the coming year.
10
R E S E A R C H & D E V E L O P M E N T
H V 2 T M H Y B R I D W O R K Z O N E B A R R I E R
Our key R&D project continued this year with
four highly successful crash tests, meeting
requirements for MASH TL4 (Manual
for Assessing Safety Hardware - Test
Level 4). The HV2TM Hybrid Workzone
Barrier system has now been submitted
to both FHWA (Federal Highway
Administration) and ASBAP (Austroads
Safety Barrier Assessment Panel) and
is currently awaiting approval in USA
and Australia.
Three tests were completed
at Texas A&M University (USA) in January. The first two tests,
a 2,270kg and a 1,100kg vehicle, met requirements for MASH TL3. The
third test, a 10,000kg truck, met requirements
for MASH TL4. The HV2TM Hybrid Workzone
Barrier is the first freestanding barrier to
meet MASH TL4, with a deflection of less
than 2.5m. Each test closely reflected our
expected results using FEA (Finite Element
Analysis) computer simulations.
A fourth test was completed in
New Zealand to test the transition
between HV2TM Hybrid Workzone
Barrier and QuadGuard End Terminal.
This transition was also designed
using FEA simulations, with results
of the test as predicted.
O M N I - S T O P T M P O R T A B L E B O L L A R D
Continuing to expand on our OmniStopTM Bollard range, a new freestanding portable bollard system has recently been
successfully crash tested to contain a 2,270kg vehicle at over 55km/h. This product has been designed using FEA
simulation, and successfully crash tested.
The OmniStopTM Portable Bollard system combines OmniStopTM
Bollard technology, with patented connector and hybrid technology from
our HV2TM Barrier, to create the first temporary,
freestanding bollard system to protect public
events from vehicle intrusion, whilst allowing
unimpeded pedestrian access.
11
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Your Directors submit their report for the year ended 30 June 2018.
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 66) (FCA GAICD F.FIN)
Non-Executive Chairman
David Ashmore was appointed to the Board on 22 November 2012 and was re-elected at the November
2013, October 2015 and October 2017 AGM’s. He was appointed Chairman of the Board on 19 August
2013. He is Chairman of the Remuneration Committee and a member of the Audit and Risk Committee.
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 54)
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 as Chief Executive Officer on
10 April 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 guidepost, 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 that have the potential to find a sustainable place in the Australian
market. Darren is also an eagerly sought-after international expert speaker on road safety barriers, having
presented at various International Road Federation conferences.
Darren has not served as a Director of any other listed companies during the preceding three years.
12
David Cleland (Age 73) (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 Chairman of the Audit and Risk
Committee and a member of 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
trust member of the Greater Metropolitan
mergers and acquisitions. He was formerly an inaugural
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 SECRETARY
Peter Fearns (CPA, BBus (Acctg))
Peter joined Saferoads in December 2011 as Chief Financial Officer and was appointed Company Secretary
on 22 December 2016. He has over 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.
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
1,326,807
7,641,655
508,610
No interim or final dividend was paid or declared for the financial year ended 30 June 2018.
No interim or final dividend was declared or paid for the financial year ended 30 June 2017.
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.
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.
13
DIRECTORS’ REPORT
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 2017-18 year, there has been no significant change in the Company’s state of affairs other than
as disclosed in this financial report.
SIGNIFICANT EVENTS AFTER REPORTING DATE
There has been no matter or circumstance which has arisen since 30 June 2018 that has significantly affected
or may significantly affect the operations of the consolidated entity or the results of those operations or the
state of affairs of the consolidated entity.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Likely developments in the operations of the entity and the expected results of these operations have been
set out in the Chairman’s Overview and the Chief Executive Officer’s Review of Operations and Activities.
INDEMNIFICATION AND INSURANCE OF DIRECTORS, OFFICERS AND AUDITORS
During the year, Directors’ and Officers’ insurance premiums were paid for any person who was a Director
and/or Officer of the Company.
The Group has not agreed to indemnify its auditors, Grant Thornton.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Company’s operations are not regulated by any significant environmental regulations under a law of the
Commonwealth or of a state or territory.
In respect of its own activities, the Company is not a major emitter
of greenhouse gases and falls well below the reporting thresholds set by the National Greenhouse and
Energy Reporting Act 2007.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party,
for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings
OPTIONS
At the date of this report, there were no un-issued shares of the company under option.
14
R EM U N E RA T I O N R EP 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 2017-18 was $147,500. Their remuneration packages
comprised only fixed Directors’ fees plus statutory superannuation (where applicable) and were within the
limits set out in the Company’s constitution. Currently this limit is set at $350,000 per annum, and can only
be changed at a general meeting.
EXECUTIVE DIRECTOR
Mr Darren Hotchkin, Chief Executive Officer, received total remuneration of $260,049, including statutory
superannuation. In addition, Mr Hotchkin is eligible for a discretionary bonus of $45,000 based on the
Company’s financial performance exceeding budget targets for FY2018.
KEY MANAGEMENT PERSONNEL
Key Management Personnel (“KMP”) is defined by AASB 124 - Related Party Disclosures. Only Directors
and Executive Management that have the authority and responsibility for planning, directing and controlling
the activities of Saferoads, directly or indirectly and are responsible for the entity’s governance are classified
as KMP.
PERFORMANCE-BASED REMUNERATION
Performance-based remuneration (bonus incentives) paid or payable to key management personnel,
including the CEO, for the year totalled $55,000 and have been accrued in the financial statements. These
were discretionary and were based on the Company’s financial performance exceeding budget targets for
FY2018.
A summary of Company performance for the past five financial years is below.
EPS (cents)
2018
1.9
2017
0.3
2016
(0.3)
2015
(0.2)
2014
(3.6)
Net profit/(loss) ($)
709,692
118,847
(116,082)
(72,228)
(930,978)
Share price ($)
$0.20
$0.11
$0.13
$0.10
$0.13
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.
15
DIRECTORS’ REPORT
REMUNERATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL
30 June 2018
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
69,092
65,000
240,000
166,250
540,342
-
-
-
-
-
-
-
45,000
10,000
55,000
-
-
-
-
-
13,408
-
20,049
24,554
58,011
-
-
-
4,619
4,619
-
-
-
-
-
82,500
65,000
-
-
305,049
15%
205,423
5%
657,972
* 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 2017
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
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
-
-
-
-
16
SHAREHOLDINGS OF KEY MANAGEMENT PERSONNEL
Shares held in Saferoads Holdings Limited:
Balance at
1 July 2017
Acquired
through
On-Market
trade
Sold
Balance at
30 June 2018
7,522,585
1,301,807
508,610
33,000
119,070
25,000
-
-
9,366,002
144,070
-
-
-
-
-
7,641,655
1,326,807
508,610
33,000
9,510,072
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
13
13
13
13
13
13
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.
17
DIRECTORS’ REPORT
S T R A T E G I C O P P O R T U N I T I E S
During 2018, we have achieved good underlying profitability and our main priority continues to be organic
ROUNDING OF AMOUNTS
growth in sales to regain our former market share and in turn enhanced profits. Each of our products have,
for their respective markets, key initiatives that are gaining momentum and enhancing our profitability.
Saferoads Holdings Limited is a type of Company that is referred to in ASIC Corporations (Rounding in
National transport infrastructure spending continues to grow with committed funding from State and Federal
Financial/Directors’ Reports) Instrument 2016/191 and therefore the amounts contained in this report and in
Governments for major Australian transport infrastructure projects continuing to be a high priority. The
the financial report have been rounded to the nearest dollar.
majority of these are on the eastern seaboard where we are involved in some significant major projects. Our
concrete temporary barrier solution in particular continues to be an attractive offering for major road works
AUDITORS’ INDEPENDENCE DECLARATION
along the Pacific Highway in northern NSW and southern Queensland. Our RoadQuakeTM rumble strip is
gaining significant acceptance for its ability to physically enforce roadworks speed limits.
The attached independence declaration has been obtained from the Company’s auditors, Grant Thornton.
Another area of strategic focus for us is pedestrian safety. The ongoing events around the world involving
vehicles deliberately driven into urban precincts designated predominantly for pedestrians is a major concern.
In response, we have developed our new OmniStopTM High Security Pedestrian Safety Bollard and we are
looking at further more flexible temporary solutions designed to do this in such a way that does not decrease
ROUNDING OF AMOUNTS
ROUNDING OF AMOUNTS
Signed in accordance with a resolution of Directors
the ambience of the urban area designated to be people-friendly.
Saferoads Holdings Limited is a type of Company that is referred to in ASIC Corporations (Rounding in
Saferoads Holdings Limited is a type of Company that is referred to in ASIC Corporations (Rounding in
We will remain focused on innovations that have the potential to capitalize on both domestic and the
Financial/Directors’ Reports) Instrument 2016/191 and therefore the amounts contained in this report and in
Financial/Directors’ Reports) Instrument 2016/191 and therefore the amounts contained in this report and in
significant overseas markets. Accordingly, we are developing strong relationships with key players to take
the financial report have been rounded to the nearest dollar.
the financial report have been rounded to the nearest dollar.
our products to market.
AUDITORS’ INDEPENDENCE DECLARATION
AUDITORS’ INDEPENDENCE DECLARATION
A C K NO W L E D G M E N T S
The attached independence declaration has been obtained from the Company’s auditors, Grant Thornton.
The attached independence declaration has been obtained from the Company’s auditors, Grant Thornton.
It has been another busy and successful year for the Company. This is attributable to the dedication, skills
and ongoing efforts of our loyal staff who continue to find ways to provide innovative and value-added
David Ashmore
solutions for our customers.
Director
Signed in accordance with a resolution of Directors
Signed in accordance with a resolution of Directors
Finally, I sincerely thank all our shareholders for their ongoing patience and continued support. Our
23 August 2018
primary focus continues to be the substantial improvement in the financial performance and sustainability of
your Company and I am sure you can see that we are making steady progress towards this outcome.
David Ashmore
David Ashmore
David Ashmore
Chairman of the Board
Director
Director
23 August 2018
23 August 2018
18
AUDITOR’S INDEPENDENCE DECLARATION
Auditor’s Independence Declaration
The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000
To the Directors of Saferoads Holdings Limited
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
Collins Square, Tower 1
727 Collins Street
Docklands VIC 3008
Correspondence to:
GPO Box 4736
Melbourne VIC 3001
T +61 3 8320 2222
Collins Square, Tower 1
F +61 3 8320 2200
727 Collins Street
E info.vic@au.gt.com
W www.grantthornton.com.au
Docklands VIC 3008
Correspondence to:
GPO Box 4736
Melbourne VIC 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
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 2018, I declare that, to the best of my knowledge and belief, there have been:
Auditor’s Independence Declaration
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
no contraventions of any applicable code of professional conduct in relation to the audit.
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
a
To the Directors of Saferoads Holdings Limited
b
AUDITOR’S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF SAFEROADS HOLDINGS LIMITED
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 2018, I declare that, to the best of my knowledge and belief, there have been:
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor
a
for the audit of Saferoads Holdings Limited for the year ended 30 June 2017, I declare that, to the
Grant Thornton Audit Pty Ltd
b
best of my knowledge and belief, there have been:
Chartered Accountants
no contraventions of any applicable code of professional conduct in relation to the audit.
a
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
Michael Climpson
Grant Thornton Audit Pty Ltd
b
Partner – Audit & Assurance
Chartered Accountants
no contraventions of any applicable code of professional conduct in relation to the audit.
Melbourne, 23 August 2018
Michael Climpson
Partner – Audit & Assurance
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
Melbourne, 23 August 2018
M A Cunningham
Partner - Audit & Assurance
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
‘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
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
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
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
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
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
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
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Grant Thornton Australia Limited.
Grant Thornton Audit Pty Ltd ACN 130 913 594
Liability limited by a scheme approved under Professional Standards Legislation.
Liability limited by a scheme approved under Professional Standards Legislation.
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.
Liability limited by a scheme approved under Professional Standards Legislation.
www.grantthornton.com.au
www.grantthornton.com.au
19
CORPORATE GOVERNANCE STATEMENT
CORPORATE GOVERNANCE STATEMENT
The Board of Directors of Saferoads Holdings Limited is responsible for the corporate governance of the
Saferoads group. The Board has considered the ASX Corporate Governance Principles and
Recommendations (“ASX Governance Principles”) and reports on compliance with these Principles.
The Board’s objective is to ensure investor confidence in the Company and its operations given its size, stage
of development and complexity.
The Group’s Corporate Governance Statement for the financial year ending 30 June 2018 is dated as at 30
June 2018 and was approved by the Board on 20 August 2018. 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).
SAFEROADS HOLDINGS LIMITED
Consolidated Statement of Profit or Loss and Other Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2018
Revenue
Revenue from product sales and services
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
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 expense
Net profit/(loss) for the period
Net profit/(loss) attributable to members of the parent
709,692
118,847
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)
Notes
CONSOLIDATED
2018
$
2017
$
4
4
4
4
5
6
6
7
19,192,803
16,909,644
-
26,048
19,192,803
16,935,692
(12,896,121)
(11,492,588)
239,194
183,232
6,535,876
5,626,336
124,315
101,697
(3,590,726)
(3,277,238)
(128,789)
(337,787)
(173,411)
(151,400)
(906,536)
(133,654)
(362,430)
(182,765)
(159,526)
(812,694)
1,371,542
799,726
(515,454)
(458,894)
856,088
340,832
(143,496)
(186,757)
712,592
154,075
(2,900)
(35,228)
709,692
118,847
- -
709,692
118,847
709,692
118,847
Cents
1.95
1.95
Cents
0.33
0.33
- -
20
The accompanying notes form part of these financial statements
SAFEROADS HOLDINGS LIMITED
Consolidated Statement of Profit or Loss and Other Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2018
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Consolidated Statement of Profit or Loss and Other Comprehensive Income
CONSOLIDATED
Consolidated Statement of Profit or Loss and Other Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2018
FOR THE YEAR ENDED 30 JUNE 2018
Notes
2018
$
2017
$
Revenue
Revenue from product sales and services
Product royalty income
Revenue
Revenue from product sales and services
Product royalty income
Cost of direct materials and labour
Movement in inventories
Gross profit
Cost of direct materials and labour
Movement in inventories
Gross profit
Other income
Employee benefits
Other income
Employee benefits
Motor vehicle costs
Motor vehicle costs
Occupancy costs
Occupancy costs
Travel and accommodation costs
Travel and accommodation costs
IT & Communications costs
IT & Communications costs
Other expenses
Other expenses
Earnings before interest, tax, depreciation and amortisation
Earnings before interest, tax, depreciation and amortisation
(EBITDA)
(EBITDA)
Depreciation, amortisation and impairment
Depreciation, amortisation and impairment
Earnings before interest and tax (EBIT)
Finance costs
Earnings before interest and tax (EBIT)
Profit/(loss) before income tax
Finance costs
Income tax expense
Profit/(loss) before income tax
Net profit/(loss) for the period
Income tax expense
Net profit/(loss) attributable to members of the parent
Net profit/(loss) for the period
Other comprehensive income
Total comprehensive income for the period
Net profit/(loss) attributable to members of the parent
Total comprehensive income attributable to members of the
parent
Other comprehensive income
Total comprehensive income for the period
Earnings per share
- Basic for profit/(loss) for the full year
- Diluted for profit/(loss) for the full year
Total comprehensive income attributable to members of the
parent
Dividend paid per share (cents)
The accompanying notes form part of these financial statements
Earnings per share
- Basic for profit/(loss) for the full year
- Diluted for profit/(loss) for the full year
Dividend paid per share (cents)
Notes
CONSOLIDATED
2018
$
19,192,803
2017
$
-
4
4
4
4
5
6
6
7
4
4
4
16,909,644
26,048
16,935,692
(11,492,588)
183,232
5,626,336
101,697
(3,277,238)
(133,654)
(362,430)
(182,765)
(159,526)
(812,694)
799,726
19,192,803
-
19,192,803
19,192,803
16,909,644
26,048
(12,896,121)
239,194
16,935,692
(12,896,121)
239,194
6,535,876
(11,492,588)
183,232
5,626,336
6,535,876
124,315
(3,590,726)
(128,789)
(337,787)
(173,411)
(151,400)
(906,536)
124,315
(3,590,726)
(128,789)
(337,787)
(173,411)
(151,400)
(906,536)
101,697
(3,277,238)
(133,654)
(362,430)
(182,765)
(159,526)
(812,694)
1,371,542
799,726
(515,454)
1,371,542
(458,894)
4
856,088
(515,454)
340,832
(458,894)
(143,496)
(186,757)
856,088
712,592
154,075
(143,496)
(2,900)
(35,228)
709,692
712,592
118,847
340,832
(186,757)
154,075
5
709,692
(2,900)
118,847
(35,228)
- -
709,692
118,847
709,692
118,847
709,692
118,847
709,692
118,847
- -
Cents
1.95
1.95
709,692
Cents
0.33
0.33
118,847
- -
709,692
118,847
6
6
7
Cents
1.95
1.95
Cents
0.33
0.33
- -
The accompanying notes form part of these financial statements
21
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Consolidated Statement of Financial Position
Consolidated Statement of Financial Position
AS AT 30 JUNE 2018
AS AT 30 JUNE 2018
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
2018
$
2017
$
9
10
11
12
5
13
14
15
14
15
16
16
1,074,808
2,537,306
3,072,365
272,218
6,956,697
3,619,210
1,438,943
1,254,412
17,935
6,330,500
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
13,287,197
12,225,332
2,648,032
118,128
305,718
516,486
3,588,364
2,148,487
86,132
2,234,619
5,822,983
7,464,214
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
5,353,905
2,110,309
7,464,214
5,353,905
1,400,617
6,754,522
22
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Consolidated Statement of Changes in Equity
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2018
FOR THE YEAR ENDED 30 JUNE 2018
Contributed
Equity
$
Retained
Earnings
$
Total Equity
$
CONSOLIDATED
At 1 July 2016
Net profit/(loss) for the period
Other comprehensive income for the period
At 30 June 2017
5,353,905
1,281,770
118,847
-
- -
6,635,675
118,847
-
5,353,905
1,400,617
6,754,522
At 1 July 2017
Net profit/(loss) for the period
Other comprehensive income for the period
5,353,905
1,400,617
6,754,522
-
709,692
709,692
- -
-
At 30 June 2018
5,353,905
2,110,309
7,464,214
The accompanying notes form part of these financial statements
23
SAFEROADS HOLDINGS LIMITED
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2018
SAFEROADS HOLDINGS LIMITED
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2018
Notes
CONSOLIDATED
2018
$
2017
$
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
21,439,479
(19,968,933)
19,265,263
(18,047,629)
Net cash flows from operating activities
8
1,470,546
1,217,634
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
Interest received
Interest paid
Net cash flows from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
9,479
(88,785)
(758,067)
281,630
(555,743)
(361,217)
727
(145,420)
(505,910)
408,893
665,915
Cash and cash equivalents at end of period
8
1,074,808
The accompanying notes form part of these financial statements
25,546
(321,046)
(447,035)
237,405
(505,130)
(670,253)
3,219
(187,950)
(854,984)
(142,480)
808,395
665,915
24
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2018
FOR THE YEAR ENDED 30 JUNE 2018
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 2017. 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 2018 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.
25
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2018
FOR THE YEAR ENDED 30 JUNE 2018
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 23 August 2018. 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.
26
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2018
FOR THE YEAR ENDED 30 JUNE 2018
(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.
27
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2018
FOR THE YEAR ENDED 30 JUNE 2018
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.
28
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2018
FOR THE YEAR ENDED 30 JUNE 2018
(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.
29
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2018
FOR THE YEAR ENDED 30 JUNE 2018
(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.
30
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2018
FOR THE YEAR ENDED 30 JUNE 2018
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.
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 2018, $4,017,036 or 21% (2017: $3,589,484 or 21%) of the Group’s revenues depended on a single customer.
4
REVENUES AND EXPENSES
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:
CONSOLIDATED
2017
$
2018
$
(i) Revenue
Revenue from product sales
Revenue from provision of services
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
Bad debts written off
Provision for doubtful debts
17,967,139
15,714,106
1,225,664 1,195,538
26,048
-
19,192,803
16,935,692
116,597
4,377
727
-
2,614
124,315
58,861
(9,030)
3,219
18,355
30,292
101,697
19,317,118
17,037,389
390,717
124,737
515,454
355,513
103,381
458,894
-
-
-
30,000
31
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2018
FOR THE YEAR ENDED 30 JUNE 2018
5
INCOME TAX
Major components of income tax expense for the year ended 30 June 2018 are:
CONSOLIDATED
2017
$
2018
$
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
2,900
2,900
35,228
35,228
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
712,592
154,075
At the statutory income tax rate of (2018: 27.5%; 2017: 30%)
Non-deductible expenses
Effect of change in income tax rates on deferred tax assets
Recognition of prior year unbooked tax losses
195,963
2,900
-
(195,963)
2,900
46,223
2,979
107,711
(121,685)
35,228
Deferred income tax
Deferred income tax at 30 June relates to the following:
CONSOLIDATED
Deferred income tax asset/(liability)
Employee entitlements
Capitalised Research & Development Costs
Other
Effect of change in income tax rates on deferred tax assets
Deferred tax assets relating to other temporary differences not
brought to account
Carry forward tax losses brought to account
Gross deferred income tax (liability)/asset
Deferred income tax charge
Statement of Financial
Position
2018
$
2017
$
Statement of Profit or Loss
and Other Comprehensive
Income
2018
$
2017
$
148,714
(333,668)
42,882
-
133,149
(245,855)
45,722
107,711
142,072
(40,727)
1,254,412 1,257,312
1,254,412 1,257,312
(15,565)
87,813
2,840
107,711
(378,762)
195,963
(10,858)
35,330
(40,039)
(107,711)
1,593
121,685
-
-
As as 30 June 2018, the consolidated entity has carry forward tax losses with a tax effect of $1,963,651, measured at the current
corporate tax rate of 27.5%. Carry forward tax losses with a tax effect of $1,254,412 have been brought to account as a deferred tax
asset. Carry forward tax losses with a tax effect of $709,239 relating to a prior year have not been brought to account.
The consolidated entity has realised capital losses with a gross amount of $1,832,149 that is available for offset against any future
taxable capital gains.
32
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2018
FOR THE YEAR ENDED 30 JUNE 2018
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
2017
$
2018
$
Net profit/(loss) attributable to equity holders from continuing
operations
Net profit/(loss) attributable to equity holders of the parent
709,692
709,692
118,847
118,847
Net profit/(loss) attributable to ordinary shareholders for diluted
earnings per share
709,692
118,847
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
1.95
1.95
Cents
0.33
0.33
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 2018: 0.0 cents (2017: 0.0 cents)
Dividends proposed and not recognised as a liability:
Final franked dividend for 2018: 0.0 cents (2017: 0.0 cents)
CONSOLIDATED
2017
$
2018
$
-
-
-
-
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.
4,629,030 5,391,050
33
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2018
FOR THE YEAR ENDED 30 JUNE 2018
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
1,074,808
665,915
CONSOLIDATED
2017
$
2018
$
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
Net (profit)/loss on disposal of plant and equipment
Interest received
Interest paid
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
709,692
118,847
515,454
(4,377)
(727)
143,496
458,894
9,030
(3,219)
187,950
374,264
(239,194)
(186,690)
2,900
(36,411)
74,977
117,162
544,377
(183,232)
92,675
35,228
(139,340)
37,548
58,876
1,470,546 1,217,634
Non-cash financing and investing activities
During the year, the Group acquired property, plant and equipment with an aggregate value of $441,065 (2017: $120,211) 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
215,326
(30,000)
2,351,980 2,711,191
236,467
(30,000)
2,537,306 2,917,658
1,657,254 1,964,361
716,830
664,726
-
-
-
-
2,321,980 2,681,191
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
34
30,000
-
-
30,000
-
-
30,000
30,000
CONSOLIDATED
2017
$
2018
$
3,072,365 2,833,171
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2018
FOR THE YEAR ENDED 30 JUNE 2018
11
PLANT AND EQUIPMENT
Plant & equipment at cost
Less accumulated depreciation
Total plant & equipment
CONSOLIDATED
2017
$
2018
$
6,583,682 6,143,851
(2,964,472)
(2,638,613)
3,619,210 3,505,238
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
Assets transferred to product development costs
Disposals
Carrying amount at 30 June
12
INTANGIBLE ASSETS
Product development costs
Less accumulated amortisation
Website development costs
Less accumulated amortisation
Patents and product approvals
Movement in carrying amounts
Balance at 1 July 2016
Capitalisation of costs
R&D tax rebate allocation
Amortisation expense
Carrying amount at 30 June 2017
Balance at 1 July 2017
Capitalisation of costs
Assets transferred from plant & equipment
R&D tax rebate allocation
Amortisation expense
Carrying amount at 30 June 2018
CONSOLIDATED
2017
$
2018
$
531,561
(390,717)
(11,559)
(15,313)
3,505,238 3,474,070
441,257
(355,513)
-
(54,576)
3,619,210 3,505,238
CONSOLIDATED
2017
$
2018
$
1,518,400
(305,062)
1,213,338
1,210,594
(391,077)
819,517
32,914
(2,932)
29,982
195,623
1,438,943
-
-
-
124,982
944,499
Website dev't
costs
$
-
-
-
-
-
-
32,914
-
-
(2,932)
29,982
Patents/
Product
approvals
$
70,051
54,931
-
-
124,982
124,982
70,641
-
-
-
Product dev't
costs
$
Total
$
701,751
392,104
(170,957)
(103,381)
819,517
819,517
654,512
11,559
(150,445)
(121,805)
771,802
447,035
(170,957)
(103,381)
944,499
944,499
758,067
11,559
(150,445)
(124,737)
195,623 1,213,338 1,438,943
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.
35
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2018
FOR THE YEAR ENDED 30 JUNE 2018
13
TRADE AND OTHER PAYABLES (CURRENT)
Trade payables
Accrued expenses
GST payable
CONSOLIDATED
2017
$
2018
$
413,969
78,677
2,155,386 2,314,768
182,585
70,493
2,648,032 2,567,846
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
2017
$
2018
$
229,318
178,434
76,400 1,992,000
305,718 2,170,434
367,063
1,781,424
203,923
-
2,148,487
203,923
During the financial year the Company entered into a revised facility agreement with its financier, Commonwealth Bank of Australia,
providing an extended term of three years (expiring September 2020) and significantly more favourable terms and conditions on the
back of the improved operational performance and financial position of the Company.
The Group was in compliance with its reporting covenants at 30 June 2018 and its scheduled debt repayment plan.
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:
- term loan
- bank bills
- overdraft
- bank charge card
Facilities used at reporting date
- term loan
- bank bills
- overdraft
- bank charge card
Facilities unused at reporting date
- overdraft
- bank charge card
CONSOLIDATED
2017
$
2018
$
1,857,824
-
250,000
75,000
-
1,992,000
-
75,000
1,857,824
-
-
-
1,992,000
-
67,000
65,500
250,000
8,000
-
9,500
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 quarterly financial information.
36
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2018
FOR THE YEAR ENDED 30 JUNE 2018
15
PROVISIONS
Current
Employee benefits
Non-Current
Employee benefits
Deferred rent liability
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
2017
$
2018
$
516,486
516,486
411,708
411,708
24,292
61,840
86,132
32,123
41,625
73,748
CONSOLIDATED
2017
$
2018
$
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
CONSOLIDATED
2017
$
2018
$
1,400,617
709,692
2,110,309
1,281,770
118,847
1,400,617
37
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2018
FOR THE YEAR ENDED 30 JUNE 2018
17
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group's principal financial instruments comprise commercial bills, hire purchase contracts, cash and short-term deposits. The
main purpose of these financial instruments is to raise finance for the Group's operations.
The totals for each category of financial instruments are as follows:
Financial Assets
- Cash and cash equivalents
- Loans and receivables
Total Financial Assets
Financial Liabilities
- Financial liabilities at amortised cost
Total Financial Liabilities
CONSOLIDATED
2017
$
2018
$
1,074,808
2,537,306
665,915
2,917,658
3,612,114
3,583,573
5,102,237
4,942,203
5,102,237
4,942,203
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.
38
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2018
FOR THE YEAR ENDED 30 JUNE 2018
(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
2018
Financial Assets
- Cash
- Receivables
%
0.70%
N/A
-
603,735,2
1,074,808
-
$
$
$
$
$
-
-
-
-
-
-
1,074,808
2,537,306
3,612,114
Total Financial Assets
603,735,2
1,074,808
Financial Liabilities
- Payables
- Bank borrowings
- Hire purchase
Total Financial Liabilities
2017
Financial Assets
- Cash
- Receivables
Total Financial Assets
Financial Liabilities
- Payables
- Bank borrowings
- Hire purchase
N/A
5.05%
6.74%
%
1.35%
N/A
N/A
6.15%
7.25%
230,846,2
-
-
-
1,857,824
-
-
-
229,318
-
-
367,063
2,648,032
1,857,824
596,381
230,846,2
1,857,824
229,318
367,063
5,102,237
$
$
$
$
$
-
856,719,2
665,915
-
856,719,2
665,915
-
-
-
-
-
-
665,915
2,917,658
3,583,573
648,765,2
-
-
-
1,992,000
-
-
-
178,434
-
-
203,923
2,567,846
1,992,000
382,357
Total Financial Liabilities
648,765,2
1,992,000
178,434
203,923
4,942,203
(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
managed closely.
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 2018 (2017: $30,000), 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 $23,125 (2017: $27,609).
The Group does not have any material unmanaged credit risk to any single debtor or group of debtors under financial instruments
entered into by the company.
39
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2018
FOR THE YEAR ENDED 30 JUNE 2018
(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:
2018
- Payables
- Bank borrowings
- Hire purchase
Total Financial Liabilities
2017
- Payables
- Bank borrowings
- Hire purchase
Total Financial Liabilities
Within 1 Year
1 to 5 Years
Over 5 Years
$
$
$
2,648,032
76,400
229,318
-
1,781,424
367,063
2,953,750
2,148,487
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
Total
$
2,648,032
1,857,824
596,381
5,102,237
Total
$
2,567,846
1,992,000
382,357
4,942,203
-
-
-
-
-
-
-
-
(d)
(e)
(f)
Fair Values
The carrying amount of financial assets and liabilities recorded in the financial statements represents their respective fair values,
determined in accordance with the accounting policies disclosed in Note 2 to the financial statements.
Foreign Exchange Risk
Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial
instrument fluctuating due to
movement in foreign exchange rates of currencies in which the Group holds financial instruments which are other than the AUD
functional currency of the Group.
At reporting date, the Group did not hold any significant financial
Group's functional currency (AUD).
instruments denominated in foreign currencies other than the
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 2018
+/-2% in interest rates
+/-5c in AUD / USD
Year Ended 30 June 2017
+/-2% in interest rates
+/-5c in AUD / USD
CONSOLIDATED
Profit/(loss)
$
Equity
$
+/-40,000
+/-250,000
+/-40,000
+/-250,000
$
$
+/-40,000
+/-160,000
+/-40,000
+/-160,000
40
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2018
FOR THE YEAR ENDED 30 JUNE 2018
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
2017
$
2018
$
239,468
964,600
639,531
242,447
936,505
891,476
1,843,599 2,070,428
15,464
29,779
4,596
12,639
45,243
17,235
1,888,842 2,087,663
265,942
415,340
681,282
(84,901)
596,381
229,318
367,063
596,381
201,148
216,892
418,040
(35,683)
382,357
178,434
203,923
382,357
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
2018
2017
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 $36,801 (2017: $76,939), with $8,959 included in Trade payables at 30 June 2018 (2017:
$15,887).
41
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2018
FOR THE YEAR ENDED 30 JUNE 2018
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: 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 / Company Secretary
2018
$
2017
$
70,500
70,000
24,500
2,500
15,000
1,800
(b)
Compensation of Key Management Personnel
Details of the nature and amount of each element of the remuneration of Key Management Personnel ("KMP") are disclosed in the
Remuneration Report section of the Directors' Report.
Compensation of Key Management Personnel by category:
- Short-term employee benefits
- Post-employment benefits
- Long-term employee benefits
23
PARENT ENTITY DISCLOSURES
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Issued capital
Retained earnings
Profit/(loss) of the parent entity
Total comprehensive income of the parent entity
Guarantees entered into by the parent entity in relation to debts of
its subsidiaries
24
SUBSEQUENT EVENTS
2018
$
2017
$
595,342
58,011
4,619
657,972
501,516
83,028
2,904
587,448
2018
$
2017
$
-
-
5,359,929 5,359,929
-
-
-
-
5,359,929 5,359,929
5,353,905 5,353,905
6,024
6,024
-
-
-
-
-
-
There has been no matter or circumstance which has arisen since 30 June 2018 that has significantly affected or may significantly
affect the operations of the consolidated entity or the results of those operations or the state of affairs of the consolidated entity.
42
DIRECTORS’ DECLARATION
DIRECTORS’ DECLARATION
In the opinion of the Directors of Saferoads Holdings Limited and its controlled entities:
(a)
the financial statements and notes of the consolidated entity and the remuneration disclosures that
are contained in the Remuneration Report that forms part of the Directors’ Report are in accordance
with the Corporations Act 2001 (Cth), including:
i)
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2018
and of its performance for the year ended that date; and
ii)
ROUNDING OF AMOUNTS
complying with Accounting Standards and Corporations Regulations 2001.
(b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable;
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
(c) The financial statements have been prepared in accordance with International Financial Reporting
the financial report have been rounded to the nearest dollar.
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
AUDITORS’ INDEPENDENCE DECLARATION
Chief Executive Officer and the Chief Financial Officer in accordance with section 295A of the Corporations
Act 2001 (Cth).
The attached independence declaration has been obtained from the Company’s auditors, Grant Thornton.
Signed in accordance with a resolution of the Directors.
On behalf of the Board.
Signed in accordance with a resolution of Directors
David Ashmore
Director
23 August 2018
David Ashmore
Director
23 August 2018
43
INDEPENDENT AUDITOR’S REPORT
Collins Square, Tower 1
727 Collins Street
Docklands VIC 3008
Correspondence to:
GPO Box 4736
Melbourne VIC 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
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
Report on the audit of the financial report
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF SAFEROADS HOLDINGS LIMITED
Opinion
We have audited the financial report of Saferoads Holdings Limited (the Company) and its subsidiaries (the Group), which
Report on the audit of the financial report
comprises the consolidated statement of financial position as at 30 June 2018, the consolidated statement of profit or loss
and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows
Opinion
for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting
We have audited the financial report of Saferoads Holdings Limited (the Company) and its
policies, and the Directors’ declaration.
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,
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
consolidated statement of changes in equity and consolidated statement of cash flows for the year
a giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its performance for the year
then ended, and notes to the consolidated financial statements, including a summary of significant
accounting policies, and the directors’ declaration.
ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
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
Basis for opinion
performance for the year ended on that date; and
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
b Complying with Australian Accounting Standards and the Corporations Regulations 2001.
independent of the Group in accordance with the auditor 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
Basis for Opinion
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
our other ethical responsibilities in accordance with the Code.
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
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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 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
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
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
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
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
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
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
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
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
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.
44
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
The Rialto, Level 30
forming our opinion thereon, and we do not provide a separate opinion on these matters.
525 Collins St
Melbourne Victoria 3000
Key audit matter
Intangible Assets - Note 12
As disclosed in Note 12 to the consolidated financial
statements, as at 30 June 2018 the carrying value of
capitalised development costs and patents was $1,438,943.
How our audit addressed the key audit matter
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
Our procedures included, amongst others:
• Obtaining an understanding of management’s policies
relating to the capitalisation of development costs;
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
During the year management capitalised $758,067 of patent
and development related expenditure. No impairment loss
INDEPENDENT AUDITOR’S REPORT
in relation to intangible assets was recognised.
TO THE MEMBERS OF SAFEROADS HOLDINGS LIMITED
• Evaluating the appropriateness of expenses capitalised, on
a sample basis, by agreeing to underlying supporting
documentation;
In accordance with AASB 138 Intangible Assets only
directly attributable costs incurred during the development
Report on the audit of the financial report
phase may be capitalised and recognised as an asset.
• Assessing the valuation methodology applied in
managements value in use calculations, challenging the
reasonableness of key assumptions based on our
knowledge of the business and industry;
• Reviewing sales results and identifying any discontinued
products through discussions with management;
• Performing sensitivity analysis on the impairment model
using varied discount rates and growth projections; and
• Assessing the adequacy of the financial statement
AASB 136 Impairment of Assets requires that an 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 estimate the recoverable
amount of the asset.
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.
Determining whether research and development costs
should be expensed or capitalised together with the process
undertaken by management to forecast future performance
and the viability of products and the assessment of
impairment triggers involves an element of management
judgement.
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
disclosures
This area is a key audit matter due to the inherent
performance for the year ended on that date; and
subjectivity that is involved in the entity making judgements
in relation to the capitalisation of their development costs
under the requirements of AASB 138 Intangible Assets, as
well as the evaluation for any impairment indicators.
b Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Information other than the financial report and 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.
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 2018, but does not include the financial report and our auditor’s report
thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
conclusion thereon.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
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.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
Grant Thornton Audit Pty Ltd ACN 130 913 594
required to report that fact. We have nothing to report in this regard.
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.
Liability limited by a scheme approved under Professional Standards Legislation.
45
INDEPENDENT AUDITOR’S REPORT
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.
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.
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
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.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF SAFEROADS HOLDINGS LIMITED
The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000
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
Report on the remuneration 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
Opinion
auditor’s report.
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
Opinion on the remuneration report
then ended, and notes to the consolidated financial statements, including a summary of significant
accounting policies, and the directors’ declaration.
We have audited the Remuneration Report included in the Directors’ report for the year ended 30 June 2018.
In our opinion, the Remuneration Report of Saferoads Holdings Limited, for the year ended 30 June 2018 complies with
In our opinion, the accompanying financial report of the Group, is in accordance with the
section 300A of the Corporations Act 2001.
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
Responsibilities
performance for the year ended on that date; and
b Complying with Australian Accounting Standards and the Corporations Regulations 2001.
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.
Grant Thornton Audit Pty Ltd
Chartered Accountants
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Michael Climpson
Partner – Audit & Assurance
Melbourne, 23 August 2018
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.
Liability limited by a scheme approved under Professional Standards Legislation.
46
ASX ADDITIONAL INFORMATION
The shareholder information set out below was applicable as at 31 August 2018. At this date the Company had on
issue 36,400,000 ordinary shares in the company held by 554 shareholders.
S U B S T A N T I A L S H A R E H O L D E R S
The names of substantial shareholders who have notified the Company in accordance with section 671B of the Cor-
porations Act.
Holder name
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 E N T Y L A R G E S T S H A R E H O L D 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
CARRIER INTERNATIONAL PTY LTD
CONTEMPLATOR PTY LTD
MR PHILIP BOMFORD
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
MR BRUCE ALLAN HEAD & MRS BETH ALISON HEAD
ROADWORX GROUP PTY LTD
C J CORNWELL & SON PTY LTD
MRS JANET GRIFFITHS
D I S T R I B U T I O N O F S H A R E H O L D 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
106
171
83
151
43
554
Total Units
55,724
527,478
688,461
5,049,371
30,078,966
36,400,000
The number of shareholders’ holdings less than a marketable parcel is 142.
V O T I N G R I G H T S
All ordinary shares carry one vote per share.
N U M B E R O F O R D I N A R Y S H A R E S S U B J E C T T O E S C R O W
Nil.
No. of ordinary shares in which interest
is held
7,641,655
4,555,897
2,807,666
2,277,428
1,904,409
No. of shares
% Held
7,598,955
20.88
3,208,163
2,807,666
2,277,428
1,804,409
1,326,807
1,128,450
1,023,418
844,522
800,000
508,610
503,212
490,000
470,000
434,000
378,936
295,000
279,925
250,009
222,900
26,652,410
8.81
7.71
6.26
4.96
3.65
3.10
2.81
2.32
2.20
1.40
1.38
1.35
1.29
1.19
1.04
0.81
0.77
0.69
0.61
73.22
%
0.15
1.45
1.89
13.87
82.63
100.00
47
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:
Email:
Website:
1800 060 672
+61 3 5945 6600
sales@saferoads.com.au
www.saferoads.com.au
Share Registry
Automic Registry Services
Level 5,
126 Phillip Street
Sydney NSW 2000
PO Box 2226
Strawberry Hills NSW 2012
Telephone
Within Australia: 1300 288 664
International:
Email:
Website:
+61 2 9698 5414
hello@automic.com.au
www.automic.com.au
Bankers
Commonwealth Bank of Australia
Warragul VIC 3820
Auditors
Grant Thornton
Collins Square, Tower 1
727 Collins Street
Docklands VIC 3008
ASX Code
SRH
ISO CERTIFICATIONS:
PROFESSIONAL AFFILIATIONS:
48
NOTES
49
NOTES
50
NOTES
51
IMPROVING PUBLIC SAFETY