ANNUAL REPORT 2019
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
IMPROVING PUBLIC SAFETY
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CONTENTS
Chairman’s Overview ...................................................................................................................................................... 4
Chief Executive Officer’s Review of Operations and Activities ........................................................................................6
The Year in Review............................................................................................................................................................8
Directors’ Report ..............................................................................................................................................................12
Auditor’s Independence Declaration ...............................................................................................................................19
Corporate Governance Statement...................................................................................................................................20
Financial Statements .......................................................................................................................................................21
Notes to the Financial Statements...................................................................................................................................25
Directors’ Declaration ......................................................................................................................................................47
Independent Auditor’s Report ..........................................................................................................................................48
ASX Additional Information ..............................................................................................................................................51
Corporate Directory .........................................................................................................................................................52
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.
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CHAIRMAN’S OVERVIEW
CHAIRMAN’S OVERVIEW
Dear Shareholder;
CHAIRMAN’S OVERVIEW
F I N A N C I A L O V E R V I E W
Dear Shareholder,
Dear Shareholder,
On behalf of the Board, it is disappointing to report a minor $41k loss following
promising profit reports for the prior two years.
F I N A N C I A L O V ER V I E W
F I N A N C I A L O V ER V I E W
This was primarily due to an increasingly competitive market environment,
On behalf of the Board, it is disappointing to report a minor $41k loss following promising profit reports for
On behalf of the Board, it is disappointing to report a minor $41k loss following promising profit reports for
particularly in our on-grid lighting, and customer deferrals for some of our
the prior two years.
the prior two years.
domestic product sales, with various project delays resulting in reduced
This was primarily due to an increasingly competitive market environment, particularly in our on-grid lighting,
volumes in comparison to the previous financial year.
This was primarily due to an increasingly competitive market environment, particularly in our on-grid lighting,
and customer deferrals for some of our domestic product sales, with various project delays resulting in
and customer deferrals for some of our domestic product sales, with various project delays resulting in
Total revenue was down $1.2 million, or 8% to $17.9 million. There was
reduced sales volumes in comparison to the previous financial year.
reduced sales volumes in comparison to the previous financial year.
however an improvement in overall gross margin, which is pleasing given
Total revenue was down $1.2 million, or 6% to $17.9 million. There was however an improvement in overall
the highly competitive nature of the markets we operate in. This improvement
Total revenue was down $1.2 million, or 6% to $17.9 million. There was however an improvement in overall
gross margin, which is pleasing given the highly competitive nature of the markets we operate in. This
is driven by a progressive strategic change in product mix and supply cost
gross margin, which is pleasing given the highly competitive nature of the markets we operate in. This
improvement is driven by a progressive strategic change in product mix and supply cost reductions. In
reductions. In FY2019, we also significantly invested in various business
improvement is driven by a progressive strategic change in product mix and supply cost reductions. In
FY2019, we also significantly invested in various business development initiatives, in particular to open up
FY2019, we also significantly invested in various business development initiatives, in particular to open up
development initiatives, in particular to open up export markets. It is our view
export markets. It is our view that these initiatives continue to be a vital component needed for the full
export markets. It is our view that these initiatives continue to be a vital component needed for the full
that these initiatives continue to be a vital component needed for the full
commercialisation of our new products, particularly in our target US and NZ markets. These new products
commercialisation of our new products, particularly in our target US and NZ markets. These new products
commercialisation of our new products, particularly in our target US and NZ markets. These new products
take time and patience to achieve customer acceptance and will provide returns for the medium to long term,
take time and patience to achieve customer acceptance and will provide returns for the medium to long term,
take time and patience to achieve customer acceptance and will provide returns for the medium to long
demonstrated by the recent HV2TM barrier sale to NZ.
demonstrated by the recent HV2TM barrier sale to NZ.
term, demonstrated by the recent HV2TM barrier sale to NZ.
The table below summarizes the key metrics over the past three financial years:
The table below summarizes the key metrics over the past three financial years:
Revenue
Revenue
Gross profit
Gross profit
EBITDA *
EBITDA *
Profit/(loss) after tax
Profit/(loss) after tax
Operating cash flows
Operating cash flows
Gearing ** (net debt / net debt + equity)
Gearing ** (net debt / net debt + equity)
* Incorporating first time adoption of AASB 16 – Leases for FY2019
* Incorporating first time adoption of AASB 16 – Leases for FY2019
** Excluding right -of -use asset lease liabilities for FY2019
** Excluding right -of -use asset lease liabilities for FY2019
Year ending 30 June
Year ending 30 June
2018
2018
$'000
$'000
19,193
19,193
6,536
6,536
1,371
1,371
710
710
1,470
1,470
15.6%
15.6%
2019
2019
$'000
$'000
17,946
17,946
6,571
6,571
1,070
1,070
(41)
(41)
542
542
29.7%
29.7%
2017
2017
$'000
$'000
16,936
16,936
5,626
5,626
800
800
119
119
1,218
1,218
20.2%
20.2%
Whilst the overall financial performance of the company was disappointing, there were some significant
Whilst the overall financial performance of the company was disappointing, there were some significant
milestones achieved during the year.
milestones achieved during the year.
International sales growth continued over the previous 12 months, up $700k (or 80%), including our first sale
International sales growth continued over the previous 12 months, up $700k (or 80%), including our first sale
of our new HV2TM temporary barrier system in New Zealand, as well as another order under the distributor
of our new HV2TM temporary barrier system in New Zealand, as well as another order under the distributor
agreement for our patented IronmanTM barrier in the USA. We also had additional sales of our flexible
agreement for our patented IronmanTM barrier in the USA. We also had additional sales of our flexible
signage products into Belgium, and further orders for our solar lighting products to New Zealand, and traffic
signage products into Belgium, and further orders for our solar lighting products to New Zealand, and traffic
calming products into New Zealand and Malaysia.
calming products into New Zealand and Malaysia.
We expanded our equipment rental business during the year, adding T-LOKTM concrete temporary barriers,
We expanded our equipment rental business during the year, adding T-LOKTM concrete temporary barriers,
our proprietary solar powered Variable Message Sign (VMS) trailers, and portable light towers to our existing
our proprietary solar powered Variable Message Sign (VMS) trailers, and portable light towers to our existing
IronmanTM Hybrid steel temporary barrier system, to provide a broader offering to our key customers for their
IronmanTM Hybrid steel temporary barrier system, to provide a broader offering to our key customers for their
work zone needs. This growth was facilitated by additional borrowings of $1.36 million in equipment finance
work zone needs. This growth was facilitated by additional borrowings of $1.36 million in equipment finance
during the year.
during the year.
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CHAIRMAN’S OVERVIEW
Dear Shareholder,
F I N A N C I A L O V ER V I E W
the prior two years.
On behalf of the Board, it is disappointing to report a minor $41k loss following promising profit reports for
This was primarily due to an increasingly competitive market environment, particularly in our on-grid lighting,
and customer deferrals for some of our domestic product sales, with various project delays resulting in
reduced sales volumes in comparison to the previous financial year.
Total revenue was down $1.2 million, or 6% to $17.9 million. There was however an improvement in overall
gross margin, which is pleasing given the highly competitive nature of the markets we operate in. This
improvement is driven by a progressive strategic change in product mix and supply cost reductions. In
FY2019, we also significantly invested in various business development initiatives, in particular to open up
export markets. It is our view that these initiatives continue to be a vital component needed for the full
commercialisation of our new products, particularly in our target US and NZ markets. These new products
take time and patience to achieve customer acceptance and will provide returns for the medium to long term,
demonstrated by the recent HV2TM barrier sale to NZ.
The table below summarizes the key metrics over the past three financial years:
Revenue
Gross profit
EBITDA *
Profit/(loss) after tax
Operating cash flows
Year ending 30 June
2017
$'000
2018
$'000
2019
$'000
16,936
19,193
17,946
5,626
800
119
1,218
20.2%
6,536
1,371
710
1,470
15.6%
6,571
1,070
(41)
542
29.7%
Gearing ** (net debt / net debt + equity)
* Incorporating first time adoption of AASB 16 – Leases for FY2019
** Excluding right -of -use asset lease liabilities for FY2019
Whilst the overall financial performance of the company was disappointing, there were some significant
milestones achieved during the year.
International sales growth continued over the previous 12 months, up $700k (or 80%), including our first sale
of our new HV2TM temporary barrier system in New Zealand, as well as another order under the distributor
agreement for our patented IronmanTM barrier in the USA. We also had additional sales of our flexible
signage products into Belgium, and further orders for our solar lighting products to New Zealand, and traffic
calming products into New Zealand and Malaysia.
We expanded our equipment rental business during the year, adding T-LOKTM concrete temporary barriers,
our proprietary solar powered Variable Message Sign (VMS) trailers, and portable light towers to our existing
IronmanTM Hybrid steel temporary barrier system, to provide a broader offering to our key customers for their
work zone needs. This growth was facilitated by additional borrowings of $1.36 million in equipment finance
Whilst sales of our off-grid (solar) lighting products continued to achieve solid growth, we were unable to
during the year.
replicate the same volumes of the prior year, which included the significant sale of portable solar light towers
Whilst sales of our off-grid (solar) lighting products continued to achieve solid growth, we were unable to
for the Gold Coast Commonwealth Games.
replicate the same volumes of the prior year, which included the significant sale of portable solar light towers
Whilst sales of our off-grid (solar) lighting products continued to achieve solid growth, we were unable to
for the Gold Coast Commonwealth Games.
replicate the same volumes of the prior year, which included the significant sale of portable solar light towers
We have now secured regulatory approvals for our HV2TM temporary barrier system in eight US States, as
for the Gold Coast Commonwealth Games.
well as Ontario Province in Canada. We continue to seek opportunities to partner with a local provider to
We have now secured regulatory approvals for our HV2TM temporary barrier system in eight US States, as
distribute this (and other products) in this vast market region.
well as Ontario Province in Canada. We continue to seek opportunities to partner with a local provider to
We have now secured regulatory approvals for our HV2TM temporary barrier system in eight US States, as
distribute this (and other products) in this vast market region.
well as Ontario Province in Canada. We continue to seek opportunities to partner with a local provider to
distribute this (and other products) in this vast market region.
O U T L O O K
O U T L O O K
We have commenced the new financial year with secured work in hand of $2.2 million at the date of this
report. We have initiated a focus on growing key customer accounts and the CEO is leading our sales team
O U T L O O K
We have commenced the new financial year with secured work in hand of $2.2 million at the date of this
to identify and leverage these key relationships.
report. We have initiated a focus on growing key customer accounts and the CEO is leading our sales team
We have commenced the new financial year with secured work in hand of $2.2 million at the date of this
to identify and leverage these key relationships.
We have also upgraded our website to enable online purchasing, which will create greater operational
report. We have initiated a focus on growing key customer accounts and the CEO is leading our sales team
efficiencies for some of our smaller volume sales without inhibiting quality or service.
to identify and leverage these key relationships.
We have also upgraded our website to enable online purchasing, which will create greater operational
efficiencies for some of our smaller volume sales without inhibiting quality or service.
Our equipment rental business expansion will continue to generate strong returns and we will selectively use
We have also upgraded our website to enable online purchasing, which will create greater operational
debt to grow our rental equipment to meet our customers’ road safety needs.
efficiencies for some of our smaller volume sales without inhibiting quality or service.
Our equipment rental business expansion will continue to generate strong returns and we will selectively use
debt to grow our rental equipment to meet our customers’ road safety needs.
Our equipment rental business expansion will continue to generate strong returns and we will selectively use
Whilst we have now delivered our first sale of the new HV2TM temporary barrier system, we envisage further
debt to grow our rental equipment to meet our customers’ road safety needs.
sales both domestically and overseas in the near future.
Whilst we have now delivered our first sale of the new HV2TM temporary barrier system, we envisage further
sales both domestically and overseas in the near future.
Whilst we have now delivered our first sale of the new HV2TM temporary barrier system, we envisage further
We are also finalising commercialisation of our new OmniStopTM portable bollard system and are in
sales both domestically and overseas in the near future.
discussions with various major events organisers about how this product can assist in meeting their needs
We are also finalising commercialisation of our new OmniStopTM portable bollard system and are in
and responsibilities in ensuring a high standard of public safety.
discussions with various major events organisers about how this product can assist in meeting their needs
We are also finalising commercialisation of our new OmniStopTM portable bollard system and are in
and responsibilities in ensuring a high standard of public safety.
discussions with various major events organisers about how this product can assist in meeting their needs
We will remain focused on innovations that have the potential to capitalize on both domestic and the
and responsibilities in ensuring a high standard of public safety.
significant overseas markets. Accordingly, we are developing strong relationships with key players to take
We will remain focused on innovations that have the potential to capitalize on both domestic and the
our products to market.
significant overseas markets. Accordingly, we are developing strong relationships with key players to take
We will remain focused on innovations that have the potential to capitalize on both domestic and the
our products to market.
significant overseas markets. Accordingly, we are developing strong relationships with key players to take
our products to market.
A C K N O W L E D G M E N T S
A C K N O W L E D G M E N T S
It has been another busy year for the Company. Whilst we are disappointed we have not been able to
replicate the ongoing improvement of the previous year, our staff continue to dedicate their efforts towards
A C K N O W L E D G M E N T S
It has been another busy year for the Company. Whilst we are disappointed we have not been able to
improving sales, service and returns for all stakeholders.
replicate the ongoing improvement of the previous year, our staff continue to dedicate their efforts towards
It has been another busy year for the Company. Whilst we are disappointed we have not been able to
improving sales, service and returns for all stakeholders.
replicate the ongoing improvement of the previous year, our staff continue to dedicate their efforts towards
Finally, I sincerely thank all our shareholders for their ongoing patience and continued support. Our primary
improving sales, service and returns for all stakeholders.
focus continues to be the substantial improvement in the financial performance and sustainability of your
Finally, I sincerely thank all our shareholders for their ongoing patience and continued support. Our primary
Company and whilst we didn’t quite achieve our targets in FY2019, I am sure you can see that we are striving
focus continues to be the substantial improvement in the financial performance and sustainability of your
Finally, I sincerely thank all our shareholders for their ongoing patience and continued support. Our primary
towards this outcome.
Company and whilst we didn’t quite achieve our targets in FY2019, I am sure you can see that we are striving
focus continues to be the substantial improvement in the financial performance and sustainability of your
towards this outcome.
Company and whilst we didn’t quite achieve our targets in FY2019, I am sure you can see that we are striving
towards this outcome.
David Ashmore
Chairman of the Board
David Ashmore
Chairman of the Board
David Ashmore
Chairman of the Board
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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 8 - 2 0 1 9
CHIEF EXECUTIVE OFFICER’S REVIEW OF
It was pleasing to secure the first sale of our new HV2TM temporary barrier
system at the end of the financial year, to a major equipment hire company
OPERATIONS AND ACTIVITIES
in New Zealand. This has been a four year journey from conceptual design
to full commercialisation and it is highly rewarding to have developed
the first MASH (Manual for Assessing Safety Hardware) tested TL-4
P E R F O R M A N C E D U R I N G 2 0 1 8 - 2 0 1 9
freestanding temporary barrier system in the world. Whilst we await initial
It was pleasing to secure the first sale of our new HV2TM temporary barrier system at the end of the financial
customer feedback, we expect further orders for this unique product in the
year, to a major equipment hire company in New Zealand. This has been a four year journey from conceptual
new financial year, not only from New Zealand but also Australia, the United
design to full commercialisation and it is highly rewarding to have developed the first MASH (Manual for
States and also Canada.
Assessing Safety Hardware) tested TL-4 freestanding temporary barrier system in the world. Whilst we await
initial customer feedback, we expect further orders for this unique product in the new financial year, not only
Domestically, we secured another sale of IronmanTM Hybrid temporary
from New Zealand but also Australia, the United States and also Canada.
barriers to a major equipment hire company and expanded the offering with
Domestically, we secured another sale of IronmanTM Hybrid temporary barriers to a major equipment hire
our exclusively licensed SLEDTM end terminal. However, fierce competition
company and expanded the offering with our exclusively licensed SLEDTM end terminal. However, fierce
in our other traffic products inhibited growth in these areas.
competition in our other traffic products inhibited growth in these areas.
Road Safety Rental, our equipment hire portfolio, broadened its offering during the year (and in so doing,
contributed increased revenue), to not only provide our proprietary IronmanTM Hybrid temporary barrier
system but also our exclusive licensed T-LOKTM concrete temporary barriers, our proprietary ZONE Variable
Message Sign (“VMS”) trailers and also portable light tower trailers. With our specialised knowledge in
flexible deployments and expertise in required traffic layouts, we continued to grow our relationships with
contractors who have come to rely on this expertise to mobilise their work zones promptly and efficiently and
with a broader offering.
Our Public Lighting portfolio did not achieve the growth of previous years, with the new residential housing
market slowing in the lead up to the recent Federal Election. In addition, a major customer requested an
extension to (unsecured) trading terms that were not acceptable to the Company. This led to reduced
volumes, but also reduced reliance on a single large customer in a segment which is experiencing some
slowdown. We attempted to mitigate this slowdown with our move into off-grid solar lighting solutions, and
were able to secure a number of projects with local government for permanent solar lighting solutions and
equipment hire and construction companies with portable solar lighting solutions. Unfortunately, we were
not able to replicate the significant sale of the portable solar light trailers that we achieved the previous year
for the Gold Coast Commonwealth Games.
Internationally, we almost doubled our revenue from the past financial year. This included further orders
from our USA distributor of IronmanTM barriers and the abovementioned first HV2TM barrier sale to New
Zealand. We had additional orders for our flexible signage from a European customer and we continue to
sell our Traffic products into New Zealand and Malaysia.
I N N O V A T I O N I N I T I A T I V E S
The main areas of focus on research and development (“R&D”) for FY2019 were the final crash tests for our
new HV2TM temporary barrier system and further enhancement to our OmniStopTM pedestrian safety bollard
range, particularly the portable bollard system. We invested a further $336k in R&D during the financial year.
Other projects are in conceptual design stage and as we see commercial merit in these, we will advance to
simulation modelling and prototypes to test our assumptions. Ideas come from a wide variety of sources,
including customers, staff, and through industry contacts and trade shows.
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L O O K I N G A H E A D
L O O K I N G A H E A D
Whilst overall, FY2019 was somewhat of a setback on the financial performance front, we have taken steps
to better focus on our key target markets and customers to gain a better understanding of their requirements
Whilst overall, FY2019 was somewhat of a setback on the financial performance front, we have taken steps
and ensure we have the products and align services to their needs when required. We are definitely focussed
to better focus on our key target markets and customers to gain a better understanding of their requirements
on returning the company to the levels of profitability we achieved in FY2018.
and ensure we have the products and align services to their needs when required. We are definitely focussed
on returning the company to the levels of profitability we achieved in FY2018.
We have upgraded our website and are receiving an increasing number of sales enquiries through this mode.
We are also establishing an online store to provide our regular customers with the means to make regular
We have upgraded our website and are receiving an increasing number of sales enquiries through this mode.
procurement orders in a more efficient and effective manner. We expect this to be live in the current quarter.
We are also establishing an online store to provide our regular customers with the means to make regular
Of course, we still have the more traditional means of sales through direct contact as well.
procurement orders in a more efficient and effective manner. We expect this to be live in the current quarter.
Of course, we still have the more traditional means of sales through direct contact as well.
We continue to look at optimising our supply chain to ensure we remain price competitive in an ever-
increasing competitive world.
We continue to look at optimising our supply chain to ensure we remain price competitive in an ever-
increasing competitive world.
We are in negotiations with an industry business partner in North America to enable us to commercialise
product in this extensive market more effectively and efficiently.
We are in negotiations with an industry business partner in North America to enable us to commercialise
product in this extensive market more effectively and efficiently.
We will continue to selectively invest further in our Road Safety Rental brand, through offering a broader
range of work zone products and services for the construction sector, focussing mainly in Victoria.
We will continue to selectively invest further in our Road Safety Rental brand, through offering a broader
range of work zone products and services for the construction sector, focussing mainly in Victoria.
We will continue to diversify our public lighting business, with particular focus on solar lighting opportunities,
which will assist in mitigating any adverse exposure to the uncertain nature of the new residential housing
We will continue to diversify our public lighting business, with particular focus on solar lighting opportunities,
development market.
which will assist in mitigating any adverse exposure to the uncertain nature of the new residential housing
development market.
Finally, I would like to acknowledge the support of all the Saferoads team, who are focussed on returning the
company to profitability in the coming year.
Finally, I would like to acknowledge the support of all the Saferoads team, who are focussed on returning the
company to profitability in the coming year.
Darren Hotchkin
Chief Executive Officer
Darren Hotchkin
Chief Executive Officer
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THE YEAR IN REVIEW
T - L O K B A R R I E R R E N T A L S O L U T I O N
Saferoads Road Safety Rental team were pleased to be awarded by Fulton
Hogan the subcontract to supply temporary barrier deployment and delivery
for the amazing transformation of one of the busiest intersections in Australia -
Hoddle Street in Melbourne, Victoria.
The works saw a myriad of upgrades
and improvements where the end
result was a continuous flow
improved
intersection. This has
traffic flow and commuting times
in and around this incredibly busy
precinct.
With the volume of traffic in
the vicinity,
the enormity
of pedestrians, and extra
patrons within Melbourne’s
the
sporting
intersection underwent a
substantial upgrade.
hub,
Saferoads are delighted to have been
a part of this project and look forward
to continuing to prioritise the stages
of this incredibly complex project
delivery.
R O A D S A F E T Y R E N T A L
rebranded
rental was
this year
Saferoads equipment
successfully
and relocated from the head office
in Pakenham to new premises
located in Nar Nar Goon in July
2018.
General manager of Road
Safety Rental, Trent Loveless,
said “It has been an exciting
year as the Rental Team
relocated to a facility more
suited to the demands of
the rental business unit. We’re situated in Nar Nar Goon, with
ease and proximity to the freeway and a yard that allows for
quite straight forward loading and unloading operations, as
well as simple dispatch of inwards and outwards products.
“We have enjoyed a year that has seen us grow by an exceptional 80% on the prior year, and, with additional personnel
on board for FY19-20, we look forward to continuing to grow our business in the Road Safety Rental space. Our recent
re-brand has also been an exciting period with many customers commenting on our name and new identity. Most of the
feedback has been centred around high visibility and strength and something that’s synonymous with roads and traffic. It’s
been a very positive step forward for the team and the business unit – Road Safety Rental. Our team is excited about the
upcoming year and committed to doing our absolute best.”
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S A F E R O A D S P R O D U C T S S A V I N G L I V E S
SLED End Terminal
This image shows the result of the first SLED end treatment impact in Australia. The SLED end terminal was hit by a truck
and trailer at the beginning of a Saferoads T-LOK barrier deployment at a construction site on the North Coast of New South
Wales.
The truck and trailer well exceeded the capacity of the barrier, and importantly the driver of the vehicle was unharmed after
the impact. This would be extremely unlikely to have been the case if the SLED end terminal had not been fitted.
I R O N M A N 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
Rokon are undertaking works along Craigieburn Road East, in Wollert, Victoria. These
incorporate a new signalised intersection with turning lanes from feeder roads and
preparatory works with duplications and separation between east and west bound lanes.
The Ironman Hybrid Barrier has offered Rokon the right combination of flexibility, ability
to take corners and curves and allowed the contractor additional onsite capacity to
temporarily remove and relocate as needed. The Ironman Hybrid Barriers will be out
on site for some time and will continue to provide superior work zone protection for the
duration of the works.
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THE YEAR IN REVIEW
C C T V S O L A R L I G H T I N G
A new partnership between Energy Australia, Melbourne Cricket Ground and Yarra Park were
looking for a lighting and CCTV solution to increase security for pedestrians in Melbourne’s
sporting and entertainment precinct. These were required to operate 24 hours a day to
enhance the safety of Yarra Park, between MCG gates two and three, after dark. Solar
lighting solutions were chosen because they were estimated to save 1.3 tonnes of carbon
per year, greatly reducing Yarra Park’s energy consumption.
Saferoads supplied and installed twelve 30W Ultra CCTV Solar Lights for this project.
Stuart Fox, CEO Melbourne Cricket Club said “Improving safety in Yarra Park is very
important to us and we’re pleased to work with Energy Australia on this energy-themed
initiative to help deliver a safer environment for local residents, MCG fans and other park
users. The lighting produced is 100 per cent sustainable. LED street lights are becoming
increasingly popular because not only do they have a long life but
they reduce carbon emissions.”
3 0 W D E L T A S O L A R
L I G H T I N G S O L U T I O N
Solar lights were required by the Gympie Regional Council to illuminate a pathway
in Gympie, QLD, from Grevillea Gardens to Heather Street. These were required to
improve night time use, as the pathway is a trunk pedestrian route for the Southside. A
section of the pathway had no street lighting for approximately 500 metres.
The area was not serviced by mains power supply. To install mains
power supply would have been expensive and also required the
removal of significant vegetation.
Saferoads were able to successfully fulfil this brief with the supply
and installation of 30 Watt Delta solar lights, 5.5 metre Promenade
Single Outreach In-ground light poles and Rag Bolt Cages.
“We used the Saferoads integrated solar lighting in a location
that didn’t have an existing network electrical supply. This
option provided a solution to illuminating a section of
pathway that experienced regular night use. We have
experienced positive results.”
- G. Alexander, Gympie Regional Council
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A U S T R A L I A N R O A D S A F E T Y
F O U N D A T I O N P A R T N E R S H I P
Saferoads was proud to support the Australian Road Safety
Foundation this year. The organisation is a not-for-profit seeking
to reduce the road toll in Australia. We recently attended one of their many initiatives, the 8th Annual Australian Road Safety
Awards Luncheon, to present the Local Government Initiatives Award.
The Australian Road Safety Awards have been designed to acknowledge the achievements of leading road safety
stakeholders and provide an opportunity to formally recognise their commitment to improving road safety outcomes. A big
congratulations to Strathfield Council who won the local government award. Their prize included a Saferoads voucher,
which was used to purchase Kangou Signs, Rubber Speed Cushions and Blockout Barriers.
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DIRECTORS’ REPORT
DIRECTORS’ REPORT
Your Directors submit their report for the year ended 30 June 2019.
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 67) (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 55)
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
10
David Cleland (Age 74) (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, October 2016 and October 2018 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
mergers and acquisitions. He was formerly an inaugural
trust member of the Greater Metropolitan
Cemeteries Trust and is a Director of a privately owned company.
David has not served as a Director of any other listed companies during the preceding three years.
COMPANY 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
1,341,807
8,641,655
508,610
No interim or final dividend was paid or declared for the financial year ended 30 June 2019.
No interim or final dividend was declared or paid for the financial year ended 30 June 2018.
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
11
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 2018-19 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 2019 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
12
R E M U N E R A T I O N R E P O R T
The Company’s remuneration policy is to ensure that the level of remuneration paid to key personnel is
market competitive and will help to attract and retain the skills and expertise required. To determine what is
a competitive level of remuneration the Company refers to salary information provided by various professional
organisations.
REMUNERATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL
NON-EXECUTIVE DIRECTORS
Total remuneration for non-executive Directors for 2018-19 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 $361,635, including statutory
superannuation. In addition, Mr Hotchkin was eligible for a discretionary bonus of $50,000 based on the
Company’s financial performance exceeding budget targets for FY2019. This did not eventuate.
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
No performance-based remuneration (bonus incentives) were paid or payable to key management
personnel, including the CEO, for the year (FY2018: $55,000). The criteria for discretionary bonuses were
the Company’s financial performance exceeding budget targets for FY2019. This did not eventuate.
A summary of Company performance for the past five financial years is below.
EPS (cents)
2019
(0.1)
2018
1.9
2017
0.3
2016
(0.3)
2015
(0.2)
Net profit/(loss) ($)
(41,586)
709,692
118,847
(116,082)
(72,228)
Share price ($)
$0.22
$0.20
$0.11
$0.13
$0.10
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 four months’ salary as redundancy or termination pay.
15
13
DIRECTORS’ REPORT
REMUNERATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL
30 June 2019
Non Executive
Directors
D Ashmore
D Cleland
Executive
Director
D Hotchkin
Executive *
P Fearns
Total
Short Term
Salaries &
Fees
Non-
monetary
Cash
Bonus
Termination
Payment
Super-
annuation
Total
Perform
-ance
Related
Share
Based
Payment
Options
Long
Term
Long
Service
Leave
$
$
$
$
$
$
$
$
%
75,342
42,798
-
-
323,333
17,771
168,250
-
609,723
17,771
-
-
-
-
-
-
-
-
-
-
7,158
22,202
20,531
22,554
72,445
-
-
-
3,652
3,652
-
-
-
-
-
82,500
65,000
361,635
194,456
703,591
-
-
-
-
* 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 2018
Short Term
Salaries &
Fees
Non-
monetary
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
16
-
-
-
-
-
-
-
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
14
SHAREHOLDINGS OF KEY MANAGEMENT PERSONNEL
Shares held in Saferoads Holdings Limited:
Acquired
through
Balance at
1 July 2018
On-Market
trade
Acquired
through
Off-Market
trade
Balance at
Sold
30 June 2019
7,641,655
1,326,807
508,610
33,000
-
1,000,000
15,000
-
-
-
-
-
9,510,072
15,000
1,000,000
-
-
-
-
-
8,641,655
1,341,807
508,610
33,000
10,525,072
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 number of meetings 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
15
DIRECTORS’ REPORT
ROUNDING OF AMOUNTS
Saferoads Holdings Limited is a type of Company that is referred to in ASIC Corporations (Rounding in
Financial/Directors’ Reports) Instrument 2016/191 and therefore the amounts contained in this report and in
the financial report have been rounded to the nearest dollar.
AUDITORS’ INDEPENDENCE DECLARATION
The attached independence declaration has been obtained from the Company’s auditors, Grant Thornton.
ROUNDING OF AMOUNTS
Saferoads Holdings Limited is a type of Company that is referred to in ASIC Corporations (Rounding in
Signed in accordance with a resolution of Directors
Financial/Directors’ Reports) Instrument 2016/191 and therefore the amounts contained in this report and in
the financial report have been rounded to the nearest dollar.
AUDITORS’ INDEPENDENCE DECLARATION
The attached independence declaration has been obtained from the Company’s auditors, Grant Thornton.
Signed in accordance with a resolution of Directors
David Ashmore
Director
9 August 2019
David Ashmore
Director
9 August 2019
18
16
16
Collins Square, Tower 5
727 Collins Street
Collins Square, Tower 5
Melbourne VIC 3008
727 Collins Street
Melbourne VIC 3008
Correspondence to:
GPO Box 4736
Correspondence to:
Melbourne VIC 3001
GPO Box 4736
Melbourne VIC 3001
T +61 3 8320 2222
F +61 3 9320 2200
T +61 3 8320 2222
E info.vic@au.gt.com
F +61 3 9320 2200
W www.grantthornton.com.au
E info.vic@au.gt.com
W www.grantthornton.com.au
Collins Square, Tower 5
727 Collins Street
Melbourne VIC 3008
Correspondence to:
GPO Box 4736
Melbourne VIC 3001
Collins Square, Tower 5
727 Collins Street
Melbourne VIC 3008
Correspondence to:
GPO Box 4736
Melbourne VIC 3001
AUDITOR’S INDEPENDENCE DECLARATION
Auditor’s Independence Declaration
Auditor’s Independence Declaration
To the Directors of Saferoads Holdings Limited
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
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 2019, I declare that, to the best of my knowledge and belief, there have been:
Holdings Limited for the year ended 30 June 2019, I declare that, to the best of my knowledge and belief, there have been:
T +61 3 8320 2222
F +61 3 9320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000
T +61 3 8320 2222
F +61 3 9320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
a
a
b
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
Auditor’s Independence Declaration
Correspondence to:
GPO Box 4736
no contraventions of any applicable code of professional conduct in relation to the audit.
Melbourne Victoria 3001
no contraventions of any applicable code of professional conduct in relation to the audit.
b
Auditor’s Independence Declaration
To the Directors of Saferoads Holdings Limited
To the Directors of Saferoads Holdings Limited
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
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 2019, I declare that, to the best of my knowledge and belief, there have been:
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Saferoads
Holdings Limited for the year ended 30 June 2019, I declare that, to the best of my knowledge and belief, there have been:
Grant Thornton Audit Pty Ltd
Chartered Accountants
a
AUDITOR’S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF SAFEROADS HOLDINGS LIMITED
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
Grant Thornton Audit Pty Ltd
Chartered Accountants
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
for the audit of Saferoads Holdings Limited for the year ended 30 June 2017, I declare that, to the
no contraventions of any applicable code of professional conduct in relation to the audit.
best of my knowledge and belief, there have been:
b
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
Michael Climpson
Michael Climpson
relation to the audit; and
a
b
Partner - Audit & Assurance
Partner - Audit & Assurance
b
Melbourne, 9 August 2019
Grant Thornton Audit Pty Ltd
Melbourne, 9 August 2019
Chartered Accountants
Grant Thornton Audit Pty Ltd
Chartered Accountants
no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
Michael Climpson
Michael Climpson
Partner - Audit & Assurance
Partner - Audit & Assurance
Melbourne, 9 August 2019
Melbourne, 9 August 2019
M A Cunningham
Partner - Audit & Assurance
Melbourne, 28 August 2017
Grant Thornton Audit Pty Ltd ACN 130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
www.grantthornton.com.au
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
‘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
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
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
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
‘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
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
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
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
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 ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
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
Grant Thornton Australia Limited.
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.
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.
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17
17
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 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’ 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
www.grantthornton.com.au
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
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
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
Liability limited by a scheme approved under Professional Standards Legislation.
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
19
17
17
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 2019 is dated as at 30
June 2019 and was approved by the Board on 17 July 2019. 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-governance).
20
18
SAFEROADS HOLDINGS LIMITED
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
SAFEROADS HOLDINGS LIMITED
FOR THE YEAR ENDED 30 JUNE 2019
Consolidated Statement of Profit or Loss and Other Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2019
Revenue
Revenue from product sales and services
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
Warehouse costs
Impairment gain of financial assets
Other expenses
Earnings before interest, tax, depreciation and amortisation
(EBITDA)
Depreciation and amortisation
Earnings before interest and tax (EBIT)
Finance costs
Profit/(loss) before income tax
Income tax benefit/(expense)
Net profit/(loss) for the period
Net profit/(loss) attributable to members of the parent
Other comprehensive income
Total comprehensive income/(loss) for the period
Total comprehensive income/(loss) attributable to members
of the parent
Earnings per share
- Basic for profit/(loss) for the full year
- Diluted for profit/(loss) for the full year
Dividend paid per share (cents)
The accompanying notes form part of these financial statements
Notes
CONSOLIDATED
2019
$
2018
$
4
17,946,570
19,192,803
(11,629,058)
253,336
(12,896,121)
239,194
6,570,848
6,535,876
4
9
4
4
5
6
6
7
162,248
(3,926,670)
(173,173)
(85,634)
(283,664)
(138,195)
(128,126)
30,000
(957,682)
124,315
(3,590,726)
(128,789)
(337,787)
(173,411)
(151,400)
(120,103)
-
(786,433)
1,069,952
1,371,542
(869,687)
(515,454)
200,265
856,088
(255,292)
(143,496)
(55,027)
712,592
13,441
(2,900)
(41,586)
709,692
(41,586)
709,692
- -
(41,586)
709,692
(41,586) 709,692
Cents
(0.11)
(0.11)
Cents
1.95
1.95
- -
20
21
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Consolidated Statement of Financial Position
Consolidated Statement of Financial Position
AS AT 30 JUNE 2019
AS AT 30 JUNE 2019
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Total Current Assets
Non-current Assets
Property, 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
Contract liabilities
Unearned income
Interest-bearing loans and borrowings
Lease liabilities
Provisions
Total Current Liabilities
Non-current Liabilities
Interest-bearing loans and borrowings
Lease liabilities
Provisions
Total Non-current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Retained earnings
TOTAL EQUITY
Notes
CONSOLIDATED
2019
$
2018
$
8
9
10
11
12
5
13
14
15
16
14
15
16
17
17
529,231
2,412,465
3,325,701
197,353
6,464,750
5,982,324
1,642,231
1,267,853
17,937
8,910,345
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
15,375,095
13,287,197
2,336,266
76,509
2,648,032
-
-
79,773
687,759
487,037
118,128
76,400
229,318
516,486
3,667,344
3,588,364
1,704,286
2,644,548
17,403
4,366,237
8,033,581
7,341,514
1,781,424
367,063
86,132
2,234,619
5,822,983
7,464,214
5,353,905
1,987,609
7,341,514
5,353,905
2,110,309
7,464,214
The accompanying notes form part of these financial statements
22
21
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Consolidated Statement of Changes in Equity
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Contributed
Equity
$
Retained
Earnings
$
Total Equity
$
CONSOLIDATED
At 1 July 2017
Net profit/(loss) for the period
Other comprehensive income for the period
5,353,905
1,400,617
-
- - -
709,692
6,754,522
709,692
At 30 June 2018
5,353,905
2,110,309
7,464,214
At 1 July 2018
5,353,905
2,110,309
7,464,214
Adjustment from adoption of AASB 16 (refer note 2(b))
-
(81,114)
Net profit/(loss) for the period
-
(41,586)
(81,114)
(41,586)
Other comprehensive income for the period
- - -
At 30 June 2019
5,353,905
1,987,609
7,341,514
The accompanying notes form part of these financial statements
22
23
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Notes
CONSOLIDATED
2019
$
2018
$
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
19,739,579
(19,197,256)
21,439,479
(19,968,933)
Net cash flows from operating activities
8
542,323
1,470,546
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
Proceeds from lease liabilities
Repayment of loans and borrowings
Repayment of lease liabilities
Interest received
Interest paid
Net cash flows from financing activities
9,479
-
(88,785)
(339,689)
(758,067)
(336,702)
212,414 281,630
(463,977)
(555,743)
356,386
(73,765)
(653,832)
2,582
(255,294)
-
(134,176)
(227,041)
727
(145,420)
(623,923)
(505,910)
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
(545,577)
1,074,808
408,893
665,915
Cash and cash equivalents at end of period
8
529,231
1,074,808
The accompanying notes form part of these financial statements
24
23
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
SAFEROADS HOLDINGS LIMITED
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
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
Standards and other authoritative pronouncements of the Australian Accounting Standards Board (AASB). Compliance with Australian
Accounting Standards results in full compliance with the International Financial Reporting Standards (IFRS) as issued by 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 2018. The impact on the
Group of these new and revised standards is outlined below.
AASB 16 - Leases
The Group has adopted AASB 16 Leases as of 1 July 2018, but has not restated comparatives for the 2018 reporting period as
permitted under the specific transition provisions in the standard. On adoption of AASB 16, the Group recognised lease liabilities in
relation to leases which had previously been classified as ‘operating leases’ under the principles of AASB 117 Leases. These liabilities
were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate
applicable to debt of similar characteristics with the same underlying security as of 1 July 2018. The weighted average lessee’s
incremental borrowing rate applied to the lease liabilities on 1 July 2018 was 5.05%.
The adoption of this new Standard has resulted in the Group recognising a right-of-use asset of $1,381,277 and related lease liability of
$1,524,231 in connection with all former operating leases except for those identified as low-value or having a remaining lease term of
less than 12 months from the date of initial application.
The new Standard has been applied using the modified retrospective approach, with the cumulative effect of adopting AASB 16 being
recognised in equity as a reduction to the opening balance of retained earnings of $81,114 for the current period. Prior periods have not
been restated.
For contracts in place at the date of initial application, the Group has elected to apply the definition of a lease from AASB 117 and has
not applied AASB 16 to arrangements that were previously not identified as a lease under AASB 117.
On transition, for leases previously accounted for as operating leases with a remaining lease term of less than 12 months and for leases
of low-value assets, the Group has applied the optional exemptions to not recognise right-of-use assets but to account for the lease
expense on a straightline basis over the remaining lease term.
AASB 9 - Financial Instruments
AASB 9 Financial Instruments replaces AASB 109 Financial Instruments: Recognition and Measurement .
It makes major changes to
the previous guidance on the classification and measurement of financial assets and introduces an 'expected credit loss' model for
impairment of financial assets.
When adopting AASB 9, the Group has applied transitional relief and opted not to restate prior periods. Differences arising from the
adoption of AASB 9 in relation to classification, measurement, and impairment are recognised in opening retained earnings as at 1 July
2018.
The adoption of AASB 9 has impacted the following areas:
Impairment of financial assets
For trade receivables and contract assets under AASB 15 the Group applies a simplified approach of recognising lifetime expected
credit losses as these items do not have a significant financing component. There was no change to impairment allowance at 1 July
2018.
25
24
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
AASB 15 Revenue from Contracts with Customers
AASB 15 replaces AASB 118 Revenue , AASB 111 Construction Contracts and several revenue-related interpretations. The new
Standard has been applied as at 1 July 2018 using the modified retrospective approach. Under this method, the cumulative effect of
initial application is recognised as an adjustment to the opening balance of retained earnings at 1 July 2018 and comparatives are not
restated. In accordance with the transition guidance, AASB 15 has only been applied to contracts that are incomplete as at 1 July 2018.
While this represents significant new guidance, the implementation of this new guidance had no impact on the timing or amount of
revenue recognised by the Group during the financial year. The adoption of AASB 15 had no impact on the Group's statement of cash
flows.
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 2019 reporting periods
and have not been early adopted by the group. The group’s initial assessment of the impact of these new standards and interpretations
is that there will be no material impact upon future application.
The financial statements were authorised for issue by the Directors on 9 August 2019. 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 date of 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.
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.
26
25
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
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.
(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 leasehold improvements and rental
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.
It is determined for an individual asset, unless the
Recoverable amount is the greater of fair value less costs to sell and value in use.
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.
27
26
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
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 (10 years) or indefinite.
Where amortisation is charged on assets with finite lives,
comprehensive income through the amortisation line item.
this expense is taken to the statement of profit or loss and other
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.
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
The Group makes use of a simplified approach in accounting for trade and other receivables and records the loss allowance at the
amount equal to the expected lifetime credit losses.
In using this practical expedient, the Group uses its historical experience, external
indicators and forward-looking information to calculate the expected credit losses using a provision matrix. The Group assesses
impairment of trade receivables on a collective basis as they possess credit risk characteristics based on the days past due.
Accounting policy applicable prior to 1 July 2018
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.
28
27
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
(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 any 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.
(m)
Interest-bearing loans and borrowings
All loans and borrowings are initially recognised at cost, being the fair value of the consideration received net of issue costs 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
As described in Note 2(b), the Group has applied AASB 16 using the modified retrospective approach and therefore comparative
information has not been restated. This means comparative information is still reported under AASB 117.
For any new contracts entered into on or after 1 July 2018, the Group considers whether a contract is, or contains a lease. A lease is
defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange
for consideration’. To apply this definition the Group assesses whether the contract meets three key evaluations which are whether:
• the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at
the time the asset is made available to the Group
• the Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use,
considering its rights within the defined scope of the contract
• the Group has the right to direct the use of the identified asset throughout the period of use. The Group assess whether it has the right
to direct ‘how and for what purpose’ the asset is used throughout the period of use.
At lease commencement date, the Group recognises a right-of-use asset and a lease liability on the balance sheet. The right-of-use
asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the
Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance
of the lease commencement date (net of any incentives received).
The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of
the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for impairment when
such indicators exist.
At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date,
discounted using the interest rate implicit in the lease if that rate is readily available or the Group’s incremental borrowing rate.
Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed),
variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising
from options reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect
any reassessment or modification, or if there are changes in in-substance fixed payments.
The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of
recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a
straight-line basis over the lease term.
29
28
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Accounting policy applicable prior to 1 July 2018
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
To determine whether to recognise revenue, the Group follows a 5-step process:
1. Identifying the contract with a customer
2. Identifying the performance obligations
3. Determining the transaction price
4. Allocating the transaction price to the performance obligations
5. Recognising revenue when/as performance obligation(s) are satisfied
In all transactions, the total price for a contract is allocated amongst the various performance obligations based on their relative stand-
alone selling prices. The transaction price for a contract excludes any amounts collected on behalf of third parties.
Revenue is recognised either at a point in time or over time, when (or as) the Group satisfies performance obligations by transferring the
promised goods or services to its customers.
The Group’s future obligation to transfer goods or services to a customer for which the Group has received consideration from the
customer is recognised as a contract liability, and reports these amounts as such in its statement of financial position, until such time as
the performance obligations are satisfied. If the Group satisfies a performance obligation before it receives the consideration, the Group
recognises either a contract asset or a receivable in its statement of financial position, depending on whether something other than the
passage of time is required before the consideration is due.
Sales of goods
Revenue from sales of goods for a fixed fee with no significant service obligation is recognised when or as the Group has transferred
control of the assets to the customer. Control of the asset is considered to transfer to the buyer at the time of delivery of the goods to
the customer.
Rendering of services
Revenue from the provision of services is recognised over time on a straight line basis. The Group utilises the output method to
measure the progress of the services provided.
Accounting policy applicable prior to 1 July 2018
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.
30
29
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
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.
Equipment rental income
The Group also earns rental
recognised on a straight-line basis over the term of the hire.
income from hiring out certain plant and equipment on variable terms. Equipment rental
income is
(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.
30
31
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
(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.
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.
(ii) Intangible assets - capitalised development costs
Development expenditure incurred on an individual project is carried forward when its future recoverability can reasonably be regarded
as assured. Determining whether the recognition requirements for the capitalisation of these development costs are met requires
judgement. After capitalisation, management monitors whether the recognition requirements continue to be met and whether there are
any indicators that capitalised costs may be impaired.
(iii) Recognition of deferred tax assets
The extent to which deferred tax assets can be recognised is based on an assessment of the probability that future taxable income will
be available against which the deductible temporary differences and tax loss carry-forwards can be utilised.
3
SEGMENT INFORMATION
The Group's chief operating decision maker (Chief Executive Officer) reviews financial information on a consolidated basis and makes
strategic decisions based on this consolidated information.
The Group operates predominantly in Australia. In the current year the Group considers there to be one material segment being the
operations within Australia.
During 2019, $2,363,107 or 13% (2018: $4,017,036 or 21%) of the Group’s revenues depended on a single customer.
32
31
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
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:
(i) Revenue
Revenue from product sales - point in time
Revenue from provision of services - over time
(ii) Other income
R&D tax rebate
Product royalty income - International
Net gain/(loss) on sale of assets
Interest
Government grant (export market development)
Other
(iii) Expenses
Depreciation and amortisation
- Property, plant & equipment
- Right-of-use assets
- Intangible assets
Impairment of assets
Finance costs
- Bank borrowings
- Leasing arrangements
Bad debts written off
Provision (writeback) for doubtful debts
CONSOLIDATED
2018
$
2019
$
17,843,127
15,862,949
2,083,621 1,349,676
17,946,570 19,192,803
88,191 116,597
-
56,362
- 4,377
2,582 727
-
20,348
(5,235) 2,614
162,248 124,315
18,108,818 19,317,118
523,506 390,717
-
237,159
109,022 124,737
869,687 515,454
3,585
-
102,954 109,895
152,338 33,601
255,292 143,496
- -
-
(30,000)
33
32
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
5
INCOME TAX
Major components of income tax expense for the year ended 30 June 2019 are:
CONSOLIDATED
2018
$
2019
$
Statement of Profit or Loss and Other Comprehensive income
Current income tax charge/(benefit)
Income tax expense/(benefit) reported in statement of profit or loss and
other comprehensive income
(13,441) 2,900
(13,441) 2,900
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
(55,027) 712,592
At the statutory income tax rate of (2019: 27.5%; 2018: 27.5%)
Non-deductible expenses
Recognition of prior year unbooked tax losses
(15,132) 195,963
1,691 2,900
(195,963)
(13,441) 2,900
-
Statement of Financial
Position
2019
$
2018
$
Statement of Profit or Loss
and Other Comprehensive
Income
2019
$
2018
$
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
Carry forward tax losses brought to account
Gross deferred income tax (liability)/asset
Deferred income tax charge
(369,749)
138,721 148,714 9,993
(15,565)
(333,668) 36,081 87,813
11,144 42,882 31,738 2,840
- - - 107,711
219,884 142,072
(378,762)
- 195,963
1,267,853 1,254,412
1,267,853 1,254,412
(77,812)
- -
As as 30 June 2019, the consolidated entity has carry forward tax losses with a tax effect of $2,218,661, measured at the current
corporate tax rate of 27.5%. Carry forward tax losses with a tax effect of $1,267,853 have been brought to account as a deferred tax
asset. Carry forward tax losses with a tax effect of $950,808 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.
34
33
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
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
2018
$
2019
$
Net profit/(loss) attributable to equity holders from continuing operations
Net profit/(loss) attributable to equity holders of the parent
(41,586) 709,692
(41,586) 709,692
Net profit/(loss) attributable to ordinary shareholders for diluted earnings
per share
(41,586) 709,692
Weighted average number of ordinary shares for basic earnings per
Adjusted weighted average number of ordinary shares for diluted
earnings per share
36,400,000 36,400,000
36,400,000 36,400,000
- Basic for profit/(loss) for the full year
- Diluted for profit/(loss) for the full year
Cents
(0.11)
(0.11)
Cents
1.95
1.95
For the purpose of calculating earnings and dividends per share, it is the ordinary shares of the legal parent that is used, being the
proportionate weighting of the 36,400,000 shares on issue.
7
DIVIDENDS PAID AND PROPOSED
CONSOLIDATED
2018
$
2019
$
Equity dividends on ordinary shares:
Interim franked dividend for 2019: 0.0 cents (2018: 0.0 cents)
- -
Dividends proposed and not recognised as a liability:
Final franked dividend for 2019: 0.0 cents (2018: 0.0 cents)
- -
Franking Credit Balance:
The amount of franking credits available for future reporting periods after
the payment of income tax payable and the impact of dividends
proposed.
4,347,400 4,629,030
35
34
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
8
NOTES TO THE STATEMENT OF CASH FLOWS
CONSOLIDATED
2018
$
2019
$
Reconciliation of cash
For
equivalents comprise the following at 30 June:
the purposes of
the statement of cash flows, cash and cash
Cash at bank and on hand
529,231 1,074,808
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
Impairment of assets
Proivision for doubtful debts
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
(41,586) 709,692
866,102 515,454
(4,377)
-
-
3,585
-
(30,000)
(727)
(2,582)
143,496
255,292
(253,336)
74,865
69,728 374,264
(239,194)
(186,690)
(13,441) 2,900
(36,411)
(41,619) 74,977
(36,338) 117,162
542,323 1,470,546
(308,347)
Non-cash financing and investing activities
During the year, the Group acquired plant and equipment (excluding right-of-use assets) with an aggregate value of $1,253,652 (2018:
$441,065) by means of 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
Trade receivables are non-interest bearing.
Movement in provision for impairment
Balance at the beginning of financial year
Amounts written off
Additional impairment provision recognised/(released)
CONSOLIDATED
2018
$
2019
$
2,225,146 2,351,980
187,319 215,326
(30,000)
-
2,412,465 2,537,306
1,525,734 1,657,254
628,207 664,726
-
71,205
- -
2,225,146 2,321,980
30,000 30,000
- -
-
- 30,000
(30,000)
36
35
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
10
INVENTORIES
Stock on hand
11
PROPERTY, PLANT AND EQUIPMENT
Property, plant & equipment at cost
Less accumulated depreciation
Total plant & equipment
Movements in Carrying Amounts
Balance at 1 July 2017
Additions
Depreciation expense
Assets transferred to product development costs
Disposals
Carrying amount at 30 June 2018
Balance at 1 July 2018
Adjustment on transition of AASB 16* (refer note 2(b))
Additions
Depreciation expense
Assets transferred to product development costs
Assets transferred to inventories
Impairment
Carrying amount at 30 June 2019
* First time recognition of right-of-use assets
CONSOLIDATED
2018
$
2019
$
3,325,701 3,072,365
CONSOLIDATED
2018
$
2019
$
9,671,215 6,583,682
(3,688,891)
(2,964,472)
5,982,324 3,619,210
Plant &
equipment
$
Motor
vehicles
$
Rental
equipment
$
Total
$
Property/
Leasehold
improvements
$
117,421
3,507
(13,878)
(118,720)
- -
-
(7,305)
107,050
773,674 358,979 2,255,164 3,505,238
59,478 235,715 232,861 531,561
(390,717)
(11,559)
(15,313)
707,127 491,841 2,313,192 3,619,210
(173,121)
-
(1,712)
(84,998)
(11,559)
(6,296)
107,050
1,381,277
163,331
(246,805)
707,127 491,841 2,313,192 3,619,210
- - - 1,381,277
134,549 237,714 1,285,573 1,821,167
(760,665)
(14,718)
(60,362)
(3,585)
706,373 591,843 3,279,255 5,982,324
(122,994)
(135,303)
- -
(14,718)
- - -
- - -
1,404,853
(255,563)
-
(60,362)
(3,585)
Included in the net carrying amount of Property, plant and equipment are right-of-use assets as follows:
2019
Property
Plant & equipment
Total right-of-use assets
Initial
recognition
$
Additions
$
Depreciation
$
Net carrying
amount
$
1,381,277
133,425
- 30,455
(227,007) 1,287,695
(10,152) 20,303
1,381,277
163,880
(237,159) 1,307,998
37
36
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
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 2017
Capitalisation of costs
Assets transferred from plant & equipment
R&D tax rebate allocation
Amortisation expense
Carrying amount at 30 June 2018
Balance at 1 July 2018
Capitalisation of costs
Assets transferred from plant & equipment
R&D tax rebate allocation
Amortisation expense
Carrying amount at 30 June 2019
CONSOLIDATED
2018
$
2019
$
1,745,821
(401,280)
1,344,541
1,518,400
(305,062)
1,213,338
49,077 32,914
(2,932)
(15,737)
33,340 29,982
264,350 195,623
1,642,231 1,438,943
Website
dev't costs
$
Patents/
Product
approvals
$
Product dev't
costs
$
Total
$
- 124,982 819,517 944,499
32,914 70,641 654,512 758,067
- - 11,559 11,559
(150,445)
- -
(124,737)
-
29,982 195,623 1,213,338 1,438,943
(150,445)
(121,805)
(2,932)
29,982 195,623 1,213,338 1,438,943
16,162 68,727 251,813 336,702
- - 14,718 14,718
(39,110)
- -
(109,022)
-
33,340 264,350 1,344,541 1,642,231
(39,110)
(96,218)
(12,804)
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.
38
37
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
13
TRADE AND OTHER PAYABLES (CURRENT)
Trade payables
Accrued expenses
GST payable
CONSOLIDATED
2018
$
2019
$
2,056,581 2,155,386
217,105 413,969
62,580 78,677
2,336,266 2,648,032
Payables are non-interest bearing and are normally settled between 30 and 60-day terms.
14
INTEREST-BEARING LOANS AND BORROWINGS
Current
Bank loans
Non-current
Bank loans
CONSOLIDATED
2018
$
2019
$
79,773 76,400
1,704,286 1,781,424
1,784,059 1,857,824
The Group was in compliance with its facility covenants at 30 June 2019.
Financing facilities available
At reporting date, the following financing facilities had been negotiated
and were available:
Total facilities:
- term loan
- overdraft
- bank charge card
CONSOLIDATED
2018
$
2019
$
1,784,059 1,857,824
500,000 250,000
75,000 75,000
Facilities used at reporting date
- term loan
- overdraft
- bank charge card
Facilities unused at reporting date
- overdraft
- bank charge card
1,784,059 1,857,824
- -
54,000 67,000
500,000 250,000
21,000 8,000
The bank facilities are secured by a registered charge over certain 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.
39
38
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
15
15
LEASE LIABILITIES
LEASE LIABILITIES
Current
Current
Hire purchase (refer note 2(n))
Hire purchase (refer note 2(n))
Right-of-use asset leases* (refer note 2(b))
Right-of-use asset leases* (refer note 2(b))
Non-current
Non-current
Hire purchase (refer note 2(n))
Hire purchase (refer note 2(n))
Right-of-use asset leases* (refer note 2(b))
Right-of-use asset leases* (refer note 2(b))
* First time recognition of right-of-use asset leases
* First time recognition of right-of-use asset leases
Hire purchase liabilities are secured by a charge over the financial assets.
Hire purchase liabilities are secured by a charge over the financial assets.
CONSOLIDATED
CONSOLIDATED
2018
2019
2018
2019
$
$
$
$
465,035 229,318
465,035 229,318
-
222,724
-
222,724
687,759 229,318
687,759 229,318
1,378,730 367,063
1,378,730 367,063
-
1,265,818
-
1,265,818
2,644,548 367,063
2,644,548 367,063
CONSOLIDATED
CONSOLIDATED
2018
2019
2018
2019
$
$
$
$
2019
2019
$
$
30,533
30,533
6,468
6,468
37,001
37,001
$
$
1,888,842
1,888,842
(303,750)
(303,750)
596,381
596,381
Lease liability commitments payable:
Lease liability commitments payable:
- less than one year
- less than one year
- later than one year but less than five years
- later than one year but less than five years
- later than five years
- later than five years
Less future finance charges
Less future finance charges
Total lease liabilities
Total lease liabilities
Lease payments not recognised as a liability
Lease payments not recognised as a liability
The Group has elected not to recognise a lease liability for short term leases (leases with an expected term of 12 months or less) or for
The Group has elected not to recognise a lease liability for short term leases (leases with an expected term of 12 months or less) or for
leases of low value assets. Payments made under such leases are expensed on a straight-line basis.
leases of low value assets. Payments made under such leases are expensed on a straight-line basis.
The expense relating to payments not included in the measurement of the lease liability is as follows:
The expense relating to payments not included in the measurement of the lease liability is as follows:
886,491 265,942
886,491 265,942
2,670,571 415,340
2,670,571 415,340
-
380,027
-
380,027
3,937,089 681,282
3,937,089 681,282
(84,901)
(604,782)
(84,901)
(604,782)
3,332,307 596,381
3,332,307 596,381
Short-term leases
Short-term leases
Leases of low value assets
Leases of low value assets
The following is a reconciliation of total operating lease commitments at 30 June 2018 (as disclosed in the financial statements to 30
The following is a reconciliation of total operating lease commitments at 30 June 2018 (as disclosed in the financial statements to 30
June 2018) to the lease liabilities recognised at 1 July 2018:
June 2018) to the lease liabilities recognised at 1 July 2018:
Total operating lease commitments disclosed at 30 June 2018
Total operating lease commitments disclosed at 30 June 2018
Discounted using the Group's incremental borrowing rate of 5.05%
Discounted using the Group's incremental borrowing rate of 5.05%
Add: finance lease liabilities recognised as at 30 June 2018
Add: finance lease liabilities recognised as at 30 June 2018
(less): short-term leases recognised on a straight-line basis as an
(less): short-term leases recognised on a straight-line basis as an
expense
expense
(less): low-value leases recognised on a straight-line basis as an
(less): low-value leases recognised on a straight-line basis as an
expense
expense
(less): other adjustments relating to commitment disclosures
(less): other adjustments relating to commitment disclosures
Lease liability recognised as at 1 July 2018
Lease liability recognised as at 1 July 2018
The Group leases its head office and warehouse facility and other warehouse sites with terms ranging from 3 to 10 years.
The Group leases its head office and warehouse facility and other warehouse sites with terms ranging from 3 to 10 years.
The Group leases warehouse plant and equipment with a term of 3 years.
The Group leases warehouse plant and equipment with a term of 3 years.
There are no material make good obligations with leases, individually or in the aggregate.
There are no material make good obligations with leases, individually or in the aggregate.
The Group has leases for the main warehouse and related facilities, an office and production building, equipment rental assets,
The Group has leases for the main warehouse and related facilities, an office and production building, equipment rental assets,
company motor vehicles, production equipment and office equipment. With the exception of short-term leases and leases of low-value
company motor vehicles, production equipment and office equipment. With the exception of short-term leases and leases of low-value
underlying assets, each lease is reflected on the balance sheet as a right-of-use asset and a lease liability. The Group classifies its right-
underlying assets, each lease is reflected on the balance sheet as a right-of-use asset and a lease liability. The Group classifies its right-
of-use assets in a consistent manner to its property, plant and equipment (see Note 11).
of-use assets in a consistent manner to its property, plant and equipment (see Note 11).
There are no other commitments or contingent liabilities of the Group.
There are no other commitments or contingent liabilities of the Group.
(15,618)
(15,618)
(12,639)
(12,639)
(32,604)
(32,604)
2,153,216
2,153,216
40
39
39
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
16
PROVISIONS
Current
Employee benefits
Non-Current
Employee benefits
Deferred rent liability
17
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
There were no ordinary share movements during the year.
CONSOLIDATED
2018
$
2019
$
487,037 516,486
487,037 516,486
17,403 24,292
- 61,840
17,403 86,132
CONSOLIDATED
2018
$
2019
$
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
Adjustment from the adoption of AASB 16 (refer note 2(b))
Net profit/(loss) for the year
Balance at 30 June
CONSOLIDATED
2018
$
2019
$
2,110,309
(81,114)
(41,586)
1,987,609
1,400,617
-
709,692
2,110,309
41
40
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
18
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group's principal financial instruments comprise a term loan, lease liabilities, 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
- Financial assets at fair value through profit & loss
- Loans and receivables
Total Financial Assets
Financial Liabilities
- Financial liabilities at amortised cost
Total Financial Liabilities
CONSOLIDATED
2018
$
2019
$
529,231
2,412,465
-
1,074,808
-
2,537,306
2,941,696
3,612,114
7,452,632
5,102,237
7,452,632
5,102,237
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.
42
41
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
18
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(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
Variable Interest
Rate
Within 1 year
2 to 5 years
Later than 5
years
Fixed Interest Rate
Maturing
%
$
$
$
$
$
2019
Financial Assets
- Cash
- Receivables
1.06%
N/A
-
2,412,465
529,231
-
Total Financial Assets
2,941,696
529,231
-
-
-
-
-
-
Total
$
-
-
-
529,231
2,412,465
3,470,927
Financial Liabilities
- Payables
- Bank borrowings
- Lease liabilities
N/A
5.05%
6.78%
2,336,266
-
-
-
1,784,059
-
-
-
687,759
-
-
2,276,804
-
-
367,744
2,336,266
1,784,059
3,332,307
Total Financial Liabilities
4,120,325
1,784,059
687,759
2,276,804
367,744
7,452,632
%
$
$
$
$
$
$
2018
- Cash
- Receivables
Total Financial Assets
2,537,306
1,074,808
0.70%
N/A
-
2,537,306
1,074,808
-
-
-
-
-
-
-
Financial Liabilities
- Payables
- Bank borrowings
- Lease liabilities
N/A
5.05%
6.74%
2,648,032
-
-
-
1,857,824
-
-
-
229,318
-
-
367,063
Total Financial Liabilities
2,648,032
1,857,824
229,318
367,063
(b)
Credit risk
The Group trades only with recognised, credit worthy third parties.
-
-
-
-
-
-
-
1,074,808
2,537,306
3,612,114
2,648,032
1,857,824
596,381
5,102,237
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 $nil at 30 June 2019 (2018: $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 $71,205 (2018: $23,125).
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.
42
43
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
18
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(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 lease liabilities.
Maturity analysis of financial liabilities:
2019
- Payables
- Bank borrowings
- Lease liabilities
Within 1 Year
1 to 5 Years
Over 5 Years
$
$
$
Total
$
2,336,266
79,773
687,759
-
1,704,286
2,276,804
-
-
367,744
2,336,266
1,784,059
3,332,307
Total Financial Liabilities
3,103,798
3,981,090
367,744
7,452,632
2018
- Payables
- Bank borrowings
- Lease liabilities
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
Total
$
2,648,032
1,857,824
596,381
5,102,237
-
-
-
-
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 instruments denominated in foreign currencies other than the Group's
functional currency (AUD).
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 2019
+/-2% in interest rates
+/-5c in AUD / USD
Year Ended 30 June 2018
+/-2% in interest rates
+/-5c in AUD / USD
CONSOLIDATED
Profit/(loss)
$
Equity
$
+/-35,000
+/-160,000
+/-35,000
+/-160,000
$
$
+/-40,000
+/-250,000
+/-40,000
+/-250,000
(d)
(e)
(f)
44
43
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
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
2019
2018
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 $92,700 (2018: $36,801), with $50,939 included in Trade payables at 30 June 2019 (2018:
$8,959).
During the financial year the Company received professional consulting services from an entity related to Mr D. Hotchkin at normal
commercial rates aggregating $9,900 (2018: nil), with $1,430 included in Trade payables at 30 June 2019 (2018: nil).
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
2019
$
2018
$
72,000 70,500
11,000 24,500
- 2,500
(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
2019
$
2018
$
627,494 595,342
72,445 58,011
3,652 4,619
703,591 657,972
45
44
SAFEROADS HOLDINGS LIMITED
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
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
2019
$
2018
$
- -
5,359,929 5,359,929
- -
- -
5,359,929 5,359,929
5,353,905 5,353,905
6,024 6,024
- -
- -
Guarantees entered into by the parent entity in relation to debts of its
subsidiaries
1,222,290 141,239
24
SUBSEQUENT EVENTS
There has been no matter or circumstance which has arisen since 30 June 2019 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.
46
45
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 2019
and of its performance for the year ended that date; and
ii)
complying with Accounting Standards and Corporations Regulations 2001.
(b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable;
(c) The financial statements have been prepared in accordance with International Financial Reporting
Standards (IFRS) as reported in Note 2.
This declaration has been made after receiving the declarations required to be made to the Directors by the
Chief Executive Officer and the Chief Financial Officer in accordance with section 295A of the Corporations
Act 2001 (Cth).
Signed in accordance with a resolution of the Directors.
On behalf of the Board.
David Ashmore
Director
9 August 2019
47
46
Collins Square, Tower 5
727 Collins Street
Melbourne Victoria 3008
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
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Collins Square, Tower 5
727 Collins Street
Melbourne Victoria 3008
Collins Square, Tower 5
727 Collins Street
Melbourne Victoria 3008
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
INDEPENDENT AUDITOR’S REPORT
Independent Auditor’s Report
To the Members of Saferoads Holdings Limited
Report on the audit of the financial report
The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000
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ended on that date; and
ended on that date; and
ended on that date; and
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
Report on the audit of the financial report
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Opinion
Independent Auditor’s Report
Independent 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 2019, the consolidated statement of profit or loss
To the Members of Saferoads Holdings Limited
and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows
To the Members of Saferoads Holdings Limited
for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting
policies, and the Directors’ declaration.
Report on the audit of the financial report
Report on the audit of the financial report
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:
Opinion
Opinion
a giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its performance for the year
In our opinion, the accompanying financial report of the Group, is in accordance with the
Corporations Act 2001, including:
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF SAFEROADS HOLDINGS LIMITED
We have audited the financial report of Saferoads Holdings Limited (the Company) and its subsidiaries (the Group), which
a giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its performance for the year
comprises the consolidated statement of financial position as at 30 June 2019, the consolidated statement of profit or loss
and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting
policies, and the Directors’ declaration.
Opinion
We have audited the financial report of Saferoads Holdings Limited (the Company) and its
subsidiaries (the Group), which comprises the consolidated statement of financial position as at
30 June 2017, the consolidated statement of profit or loss and other comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows for the year
then ended, and notes to the consolidated financial statements, including a summary of significant
accounting policies, and the directors’ declaration.
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 2019, 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
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
policies, and the Directors’ declaration.
Basis for opinion
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
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
a giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its performance for the year
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
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
Basis for opinion
our other ethical responsibilities in accordance with the Code.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
Basis for opinion
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
Key audit matters
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
our other ethical responsibilities in accordance with the Code.
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
forming our opinion thereon, and we do not provide a separate opinion on these matters.
our other ethical responsibilities in accordance with the Code.
Key audit matters
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
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.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
b Complying with Australian Accounting Standards and the Corporations Regulations 2001.
a Giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its
performance for the year ended on that date; and
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
‘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
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
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
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
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
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
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
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
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Grant Thornton 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
Liability limited by a scheme approved under Professional Standards Legislation.
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.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
Liability limited by a scheme approved under Professional Standards Legislation.
48
‘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
47
47
47
www.grantthornton.com.au
Key audit matter
Intangible Assets – Note 12
As disclosed in Note 12 to the consolidated financial
statements, as at 30 June 2019 the carrying value of
capitalised development costs and patents was $1.6 million.
During the year management capitalised $336,702 of patent
and development related expenditure. No impairment loss in
relation to intangible assets was recognised.
In accordance with AASB 138 Intangible Assets only directly
attributable costs incurred during the development phase may
be capitalised and recognised as an asset.
AASB 136 Impairment of Assets requires that an entity shall
INDEPENDENT AUDITOR’S REPORT
assess at the end of each reporting period whether there is
TO THE MEMBERS OF SAFEROADS HOLDINGS LIMITED
any indication that an asset may be impaired. If any indication
exists, the entity shall estimate the recoverable amount of the
asset.
Report on the audit of the financial report
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.
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.
This area is a key audit matter due to the inherent subjectivity
that is involved in the entity making judgements in relation to
In our opinion, the accompanying financial report of the Group, is in accordance with the
the capitalisation of their development costs under the
Corporations Act 2001, including:
requirements of AASB 138 Intangible Assets, as well as the
evaluation for any impairment indicators.
a Giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its
disclosures.
How our audit addressed the key audit matter
Our procedures included, amongst others:
Obtaining an understanding of management’s policies
The Rialto, Level 30
relating to the capitalisation of development costs;
525 Collins St
Melbourne Victoria 3000
Evaluating the appropriateness of expenses capitalised, on
a sample basis, by agreeing to underlying supporting
documentation and consideration of the criteria within
AASB 138;
Correspondence to:
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Melbourne Victoria 3001
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Assessing the valuation methodology applied in
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prepared to assess impairment for intangibles not available
for use, including:
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
b Complying with Australian Accounting Standards and the Corporations Regulations 2001.
performance for the year ended on that date; and
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 30 June 2019, 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.
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.
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
required to report that fact. We have nothing to report in this regard.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
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.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
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.
‘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.
49
48
INDEPENDENT AUDITOR’S REPORT
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.
The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our
auditor’s report.
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Report on the remuneration report
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF SAFEROADS HOLDINGS LIMITED
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 15 to 16 of the Directors’ report for the year ended 30 June
2019.
Report on the audit of the financial report
In our opinion, the Remuneration Report of Saferoads Holdings Limited, for the year ended 30 June 2019 complies with
section 300A of the Corporations Act 2001.
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.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report,
based on our audit conducted in accordance with Australian Auditing Standards.
In our opinion, the accompanying financial report of the Group, is in accordance with the
Corporations Act 2001, including:
a Giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its
performance for the year ended on that date; and
b Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Grant Thornton Audit Pty Ltd
Basis for Opinion
Chartered Accountants
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.
Michael Climpson
Partner – Audit & Assurance
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Melbourne, 9 August 2019
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.
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ASX ADDITIONAL INFORMATION
The shareholder information set out below was applicable as at 30 August 2019. At this date, the Company had on
issue 36,400,000 ordinary shares in the company held by 526 shareholders.
S U B S T A N T I A L S H A R E H O L D E R S
The names of substantial shareholders who have notified the Company in accordance with section 671B of the
Corporations Act.
Holder name
MR DARREN JOHN HOTCHKIN & MRS JENNIFER ANN HOTCHKIN
RUMINATOR PTY LTD and related entities
MR STEVEN DI FABRIZIO
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
CAON PTY LTD
RUMINATOR PTY LTD
MR DARREN JOHN HOTCHKIN & MRS JENNIFER ANN HOTCHKIN
NLKM PTY LTD
MR DAVID ALBERT McCLURE ASHMORE & MRS NOLA JOY ASHMORE
MR DUNCAN FRANCIS SMITH
MR GLENN SCOTT WADSWORTH & MR RICKI MARK WADSWORTH
CARRIER INTERNATIONAL PTY LTD
MR PHILIP BOMFORD
CONTEMPLATOR PTY LTD
LIVINGSTONE SERVICES PTY LTD
STITCHING PTY LTD
MR ROSS GEORGE YANNIS
ELFIC INDUSTRIES PTY LTD
MRS JANET GRIFFITHS
MR BRUCE ALLAN HEAD & MRS BETH ALISON HEAD
ROADWORX GROUP PTY LTD
MR PETER FROST
C J CORNWELL & SON PTY LTD
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
101
168
81
131
45
526
Total Units
50,717
507,291
667,558
4,592,073
30,582,361
36,400,000
The number of shareholders’ holdings less than a marketable parcel is 189.
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
9,259,025
4,555,897
3,703,315
No. of shares
% Held
7,598,955
3,653,315
3,208,163
1,660,070
1,362,359
1,341,807
1,277,428
1,128,450
904,055
900,000
844,522
508,610
503,212
434,000
320,000
302,900
291,624
279,925
275,000
250,009
27,044,404
20.88
10.04
8.81
4.56
3.74
3.69
3.51
3.10
2.48
2.47
2.32
1.40
1.38
1.19
0.88
0.83
0.80
0.77
0.76
0.69
74.30
%
0.14
1.39
1.83
12.62
84.02
100.00
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CORPORATE DIRECTORY
Directors
David Ashmore (Chairman)
Darren Hotchkin (Chief Executive Officer)
David Cleland
Company Secretary
Peter Fearns
Registered Office
PO Box 2030
22 Commercial Drive
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
GPO Box 5193
Sydney NSW 2001
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
GPO Box 4736
Collins Square, Tower 5
727 Collins Street
Melbourne VIC 3008
ASX Code
SRH
ISO CERTIFICATIONS:
PROFESSIONAL AFFILIATIONS:
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NOTES
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NOTES
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NOTES
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IMPROVING PUBLIC SAFETY