Annual Report
2023
Saferoads Holdings Limited
ABN 81 116 668 538
Improving
public safety
Saferoads is an ASX listed company specialising in the provision of innovative
road safety solutions throughout Australia, New Zealand and North America. 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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Contents
Chairman’s Overview
Managing Director’s Review of Operations and Activities
Reasearch & Development - Rubber T-Lok Barrier
Year in Review - Chief Operating Officer
Year in Review - Road Safety Rental VIC
Year in Review - Road Safety Rental NSW
Directors’ Report
Remuneration Report (Audited)
Auditor’s Independence Declaration
Corporate Governance Statement
Financial Statements
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional Information
Corporate Directory
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Chairman’s Overview
Financial Overview
I am pleased to report underlying EBITDA grew by $249k to $2.145 million. This result
was achieved despite increasing our investment in research and development and
incurring additional costs in expanding our equipment rental services offering to the
Queensland market. After taking up a $325k provision relating to the November 2021
workplace incident, the Group reported a loss after tax of $197k for the year.
Revenue from product sales and services grew $2.3 million, or 18.6% to $14.6 million in
FY2023, resulting in a 13.2% improvement in underlying EBITDA.
The expansion of our equipment rental services fleet - Road Safety Rental – continued
in earnest with $1.17 million in new assets added to the fleet and the opening of a new
depot in Queensland. This growth led to an increase in depreciation and amortisation
charges of 9.4%.
Finance costs grew by 8.5%, despite reducing debt levels by $0.34 million or 9.8%,
due to the increasing interest rate environment. Over 62% of our debt is fixed interest
equipment finance loans and will not be impacted by further increases in interest rates.
The table below summarises the key metrics over the past three financial years:
Operating revenue
Profit/(Loss) after tax
Underlying EBITDA (non-IFRS
financial measure)*
Operating cash flows
Gearing ** (net debt / net debt + equity)
2021
$’000
13,250
535
1,679
1,513
26.7%
Year ending 30 June
2022
$’000
12,349
64
1,896
944
29.6%
David Ashmore
Chairman
2023
$’000
14,648
(197)
2,145
2,378
25.8%
* Earnings before interest, tax, depreciation, and amortisation excluding COVID-19 Government support and the provision for the November 2021
workplace incident.
** Excluding right-of-use asset lease liabilities.
Our gearing ratio decreased to 25.8%. We continue to receive support from our primary financier, with the Commonwealth Bank approving an
additional $0.62 million in asset finance facilities during the year to enable the expansion of our equipment rental services fleet.
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Non-IFRS Financial Measures
The Group uses certain measures to manage and report on its business that are not recognised under Australian Accounting Standards. These
measures are collectively referred to as “Non-IFRS financial measures”. Non-IFRS financial measures are intended to supplement the measures
calculated in accordance with Australian Accounting Standards and are not a substitute for those measures. Underlying statutory results
and measures are intended to provide shareholders additional information to enhance their understanding of the performance of the Group. A
reconciliation between Profit/(Loss) after tax to the underlying EBITDA of the Group has been included in the table below.
2021
$’000
535
260
46
1,212
-
(375)
1,679
Year ending 30 June
2022
$’000
64
281
-
1,565
-
(15)
1,896
2023
$’000
(197)
305
-
1,712
325
-
2,145
Profit/(Loss) after tax
Finance costs
Income tax
Depreciation and amortisation
Provision for workplace incident
COVID-19 government support
Underlying EBITDA
Outlook
The expansion of Road Safety Rental remains a key strategic objective, with further investment planned to build our NSW and Queensland branches.
The benefits of this strategy are well established, with the addition of our own proprietary products to the rental fleet providing a lower investment
cost as compared to most of our competitors.
Other factors that ensure the business prospects for the Group remain strong include the following:
• The Federal Government recently recommitting to their 10-year $120 billion infrastructure pipeline.
•
Initial orders have been received for our new Rubber T-Lok temporary barrier on the Melbourne North East link project and we anticipate further
orders over the next 12 months on other large projects.
• Additional orders from the USA distributor of our HV2TM temporary barrier system, who in conjunction with us, are increasing their marketing
efforts for this product.
Acknowledgments
I would like to acknowledge and thank our staff and management team for their ongoing commitment to the business.
I also sincerely thank all our shareholders for their continued support. Our primary focus continues to be the improvement of the financial performance
and sustainability of our Company, and we believe we have the right strategies going forward to achieve this.
Finally, I wish to acknowledge the extensive work of my fellow directors and their diligent and collaborative efforts and ongoing contribution over
the past year.
David Ashmore
Chairman of the Board
29 September 2023
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Managing Director’s Review of
Operations and Activities
Performance During 2022 - 2023
Excluding the provision for the November 2021 workplace incident, the Company delivered
underlying EBITDA growth of $249k for FY2023. This result was achieved through growing
product sales and profits while continuing the expansion of our Road Safety Rental brand
along the east coast of Australia, with the opening of a new depot in Queensland.
Australian Product Sales
Australian product sales grew by 17.5% compared to the prior period with previous international
shipping and supply chain issues attributable to the COVID-19 pandemic largely resolved.
International Product Sales
As anticipated, international activity rebounded as restrictions on travel eased and freight
logistics improved post pandemic. We saw increased interest in our HV2TM temporary barrier
system in the USA and delivered our first order of 165 units (approximately one kilometre) to
North Dakota. We anticipate this to be the first of many orders for the HV2TM temporary barrier
system in the USA.
Road Safety Rental
Darren Hotchkin
Managing Director
Our Road Safety Rental equipment rental offering continues to expand with the establishment of a depot in south east Queensland.
After further investments totalling $1.3 million, the value of our rental fleet assets has grown to approximately $9.6 million (at original purchase price).
Additional investment is planned in future years across all three state depots but with a particular focus on scaling up the NSW and Queensland
operations to be similar in size to Victoria. The Federal Government recently recommitted to the 10-year $120 billion infrastructure pipeline, and we are
well positioned as a specialist solutions provider to benefit from this.
Innovation Initiatives
Our continued investment in R&D provided a significant milestone for the business during the year with the delivery of the first USA order of our HV2TM
temporary barrier system. We also successfully crash tested and received regulatory approvals in Australia for the new Rubber T-Lok temporary barrier.
The Rubber T- Lok combines the design of the existing T-Lok temporary barrier with the use of a recycled rubber in the concrete mix.
In Summary
In another challenging year we are pleased to have delivered underlying EBITDA growth as well as continuing our investment in R&D and the
expansion of Road Safety Rental.
Finally, I would like to acknowledge the support of all the Saferoads team, who are focused on delivering profitable growth in the coming year.
Darren Hotchkin
Managing Director
29 September 2023
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Research & development
Rubber T-Lok Barrier
“The 100km/h crash test of the Rubber
T-Lok has demonstrated that the inclusion
of rubber enhances the flexibility and
durability of the concrete T-Lok barrier,
resulting in better energy absorption,
reduced risk to vehicle occupants
and increased barrier lifespan.”
Darren Hotchkin
Saferoads
Managing Director
Innovative barrier developed to improve
safety and combat waste
A prototype temporary road barrier, the Rubber T-Lok, was successfully
crash tested on September 8th, 2022, in a joint venture between
Saferoads and the University of Melbourne, with funding and support
from Tyre Stewardship Australia.
The project sought to address the issue of waste tyres in Australia - a
significant environmental problem with an estimated 56 million tyres
generated nationally each year, and 60% of end-of-life tyres being
disposed of improperly, in landfill or illegal dumping.
115 tonnes of recycled rubber are utilised in every ten kilometres of
barriers, reducing the environmental impact of end-of-life tyres.
The design team celebrated after watching the barrier withstand the
impact of a vehicle at 100km/h, demonstrating that the inclusion of
rubber in the concrete barrier enhanced safety, in addition to increasing
the lifespan of the barriers.
The successful test demonstrated:
• Compliance to Australian and New Zealand Standard 3845.1:2015
for Road Safety Barrier Systems and Devices
• Significantly reduced deceleration forces on the vehicle occupants
• Dramatically reduced barrier damage and debris entering the work zone
The Rubber T-Lok offers Saferoads customers a superior and more
cost-effective product for construction and government road projects.
With serious interest and enquiries from major contractors regarding this
product, the Saferoads team are looking forward to seeing it deployed
on a number of significant roadwork projects in the coming year.
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“This full-scale test is a tangible success for our project to invent
sustainable uses for waste tyres. Road users are the winners here.
The test showed that designed rubberised concrete road barriers
will help reduce the force of impact thereby reducing the likelihood
of injury and death, as well as being less damaging to the barrier
itself. We are very passionate about our work in this area and
very keen to share outcomes that can save lives, increase road
safety, and use recycled materials in a cost-effective manner.”
Tuan Ngo
University of Melbourne
Professor Research Lead - Advanced Protective Technologies
of Engineering Structures (APTES) Research Group
The Rubber T-Lok has received formal regulatory approval from the
Austroads Safety Barrier Assessment Panel (ASBAP). ASBAP assessed
that the Saferoads Rubber T-Lok Barrier meets the crash test and
evaluation criteria as outlined in the Manual for Assessing Safety
Hardware (MASH) for Level 3 (TL-3), which is 2.27 tonne quad cab
pickup at a speed of 100km/h, at an angle of 25 degrees.
The product has also gained approval from Vicroads, Transport for NSW
and Queensland Government Department of Main Roads.
The Rubber T-Lok temporary barrier was also the winner of the
Concrete Institute of Australia’s Victorian Branch Award for Excellence
in Concrete 2023, in the category Technology and Innovation. The
award recognises an outstanding contribution in construction, concrete
design and materials.
“We are all excited to see the research and
development process for this innovative
product successfully completed and it become
available to customers. This product is the first
of its kind in the temporary crash barrier market
in terms of contributing to sustainability.”
Casey McMaster
Saferoads
Engineering Manager
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“This is yet another example of
Australian ingenuity and innovation at
its best, and we’re very proud to have
supported a new home-grown product
go from the lab to the real world.”
Lina Goodman
Tyre Stewardship Australia
CEO
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Year in Review
Chief Operating Officer
FY23 started with some significant wins amongst some enormous
challenges across the entire business. In the July to December, 2022
period, our business was still pouring record numbers of T-Lok Barriers
in two states, while managing our resource base in Victoria had its own
challenges amid a construction boom period.
We also encountered significant pricing increases with international
logistics and supply chain issues, yet during these challenging times
were able to generate a 19% improvement in revenue for the full year.
The team saw a number of highlights and success which we hope will
continue to shape stronger sales and profitability in the years to come.
The Australian product sales department have enjoyed success in
introducing the first “green” barrier in the form of our Rubber T-Lok
product, for which we have now secured orders from one of the largest
civil construction projects the country has ever seen (SPARK-North
East Link).
Meanwhile, the rental business has sought every opportunity to increase
utilisation of barrier and electronic products by strategically moving
fleet interstate for projects that offer optimum long term returns.
The rental business now sees two full-scale branch operations in Victoria
and New South Wales, and a start up business model in Queensland,
which has already started to deliver some promising results.
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Trent Loveless
Chief Operating Officer
Highlights and major achievements – national product sales:
• Strong revenue growth in FY23 (up 19% on FY22)
• Developing the first ever “green” crash barrier, Rubber T-Lok Barrier
•
•
• Major redevelopment of Saferoads CPU and Zone platform supporting all VMS, now complete with 4G upgrade options
Improvements in digital advertising and content, resulting in significant increases in online enquiries
Introduction of new concepts and technology in the NOVA Variable Message Sign (VMS) product offering
Highlights and major achievements – Road Safety Rental
• Significant Ironman Barrier project in the ports precinct – Port Kembla
• Continued to develop demands for HV2 barrier product (and increased fleet during this year to ensure we capitalise on TL-4
freestanding opportunities)
• A multi-staged project in Pakenham on the Healesville-Koo Wee Rup Road duplication sees a significant quantity of T-Lok
Barriers remaining on site during Stage 2 (estimated completion mid to late 2024)
• Continued success with excellent utilisation of Ironman Hybrid barrier product across Victoria, including some Tier 1 and Tier
2 level crossing removal projects
• New branch in Queensland starting to generate some real traction and a contractor base appreciating the benefits and the
expertise the Road Safety Rental team offers
• First barrier project with Transport for New South Wales was delivered in early 2023; a significant win
• Continued onboarding of new personnel joining rental teams in both Victoria and New South Wales, in support of growth
trajectory
Looking ahead
The Saferoads team are excited about the genuine sales boost we can expect with the complete rejuvenation of the solar
lighting product range, and our environmentally friendly and sustainable barrier product, the Rubber T-Lok.. The advantages that
the Nova VMS can bring to the market already shows early signs of becoming a great success for Saferoads for many years to
come. We expect huge growth in these areas, while established product ranges will continue to be profitable.
The capacity to work more closely with some of the largest projects and Tier 1 contractors has been enhanced with the addition
of two experienced national business development managers joining the team in recent months. Therefore we expect to see
some real progress and traction within this part of the business during the next 12 months.
Saferoads ability to innovate and develop future market leading products becomes even more important as the market appetite
changes; there is no doubt the contracting world is seeking improved environmental solutions, so sustainability and ensuring a
circular economy become a larger part of the developmental scope as we continue to innovate our way forward in FY24 and beyond.
Trent Loveless
Chief Operating Officer
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Solar Lighting Project – JLE Group Parkes
Special Activation Precinct
JLE Group are a reputable electrical contracting company that values safety, quality
and customer satisfaction. They required a solar lighting product that offered simple
installation, exceptional light output and increased battery storage for a large industrial
precinct project in Central New South Wales.
Our Solution
Saferoads Roadway Solar V-LED Lights offered the customer an ideal solar lighting
solution, designed to provide bright light throughout the night. The Roadway Solar V-LED
Light outperforms the average on-grid street light. This light has the battery storage to run
at full capacity for several days, even in the case of inclement weather.
Outcome
Saferoads Roadway Solar V-LED Lights have provided the Parkes Special Activation
Precinct with a powerful spread of light, due to improved technology in solar panels,
batteries and LEDs. The lights were simple to install and do not require deep cycle gel
batteries which need to be buried in the ground. These solar lights were aligned with the
projects sustainability goals, without compromise on performance.
Roadway Solar V-LED Light
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Temporary Barrier Project – North Dakota
Department of Transport, USA
North Dakota Department of Transport, USA, required a freestanding temporary barrier
product that offered fast installation and exceptional safety for use on bridge decks and
road maintenance projects. Saferoads steel and concrete ballasted temporary barrier,
the HV2 Barrier was selected due being an MASH TL-4 unanchored steel barrier, ideal for
situations where anchoring is not desired or possible.
Our Solution
With patented hybrid technology and unique connectors, the HV2 Safety Barrier offered
the customer high containment and low deflection upon impact, without requiring time-
consuming anchoring. The HV2 Barrier has been successfully tested to MASH TL-4 and is
approved in 20 states of the USA, including the key cornerstone states of California and
Texas.
This world-first unanchored TL-4 barrier is attractive to major industry end users which
is why Saferoads have engaged with a long standing American road safety products
company, Traffix Devices to promote and sell this product.
Outcome
HV2 Barrier
Saferoads HV2 Barrier have provided the Department of Transport North Dakota with a
lightweight, temporary, freestanding barrier that is superior in terms of speed and safety of
deployment and retrieval. The barriers require no anchoring or maintenance, are economical
to transport and can be used with a number of end treatments.
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Year in Review
Road Safety Rental VIC
FY23 has presented a range of opportunities and challenges for the
Road Safety Rental – Victoria team. With the increase in government
funding levels for infrastructure, the demand in the industry remains
strong, and looking ahead, the pipeline continues to look positive. This
provides a level of certainty for the future growth within the Road
Safety Rental – Victorian Branch.
Despite these favourable conditions there are a number of challenges
we continue to face as a business. Road Safety Rental – Victoria did not
meet its budgeted forecast for FY23, however it was able to maintain
similar profitability to the prior year through cost control efforts and an
all hands on deck approach to maximize resources.
During the year, the team implemented and embraced an improved
safety focus and further branding initiatives continue to provide more
exposure for the business. The recruitment space was difficult, and
securing new team members to fill vacancies has been challenging.
However, progress is being made and a full team next year is expected
to ensure performance. Overall, we were able to navigate staffing issues
and demand pressures to deliver a favourable result through teamwork,
adaptability and resourcefulness.
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Ash Farr
Road Safety Rental Branch Manager - Victoria
HV2 Deployment
Melton Highway, Victoria
The Road Safety Rental team embarked on their
largest deployment of HV2 Barrier yet, on a night
shift along the Melton Hwy. Unprecedented traffic
volumes delayed the start and traffic set up, but
in less that 5 hours and in challenging conditions,
650m of HV2 barrier was installed, leaving the client,
subcontractors and workforce stunned! HV2 is
proving to be sought after for its superior deflection,
small footprint, and record deployment times.
T-Lok Deployment
Apollo Bay, Victoria
Colac Otway Shire Council required barriers to contain
a landslip. This deployment involved a high degree
of difficulty and risk, being a landslip with instability
on the high side. The Road Safety Rental team and
the project client undertook significant assessment
of safety aspects throughout the project, including
geotechnical investigation.
Working closely with Colac Otway Shire Council on
the methodology, as well as regularly reviewing the
site before commencing the deployment, ensured the
safety of all involved. The Road Safety Rental team
successfully deployed the barrier, with a professional
and expert approach to a complex project.
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Year in Review
Road Safety Rental NSW
Road Safety Rental – New South Wales has grown from strength
to strength this financial year. With the move into a more useable,
safer yard located in the Smeaton Grange industrial precinct, we are
better positioned and able to store the full range of products, with the
resources to support future growth.
This year we have shown our ability to tackle larger projects, including
some interesting deployments. The large T-Lok project in Western
Sydney finished up with a happy client that has recommended Road
Safety Rental on a number of current and future projects. It was
exciting to secure our first two HV2 deployments in New South Wales,
and increase our fleet with 600m of HV2 Barrier.
This investment will allow us to further service highway and TL-4 project
requirements. We have also been successful in adding this project into
the current Transport for NSW tender list, allowing it to be hired on any
Transport for NSW projects, so a significant opportunity awaits.
Jonathan Finney
Road Safety Rental Branch Manager - New South Wales
The current market trends still show a heavy reliance upon water barrier, a traditional legacy within the New South Wales market, however, time
spent detailing the advantages of Road Safety Rental barrier offerings has resulted some sites opting for the lower deflections and cost savings
Ironman and T-Lok Barriers provide. In turn, this has opened opportunities to jobs that would have previously been overlooked with our barrier fleet.
Our team has also been servicing the Queensland location, with a soft start to our brand in the South East region of the state, servicing predominately
the barrier market . So far, our expertise in this area has secured opportunities, with a strong appetite demonstrated in this market for T-Lok Barrier.
The recent addition of 600m of T-Lok Barrier into the Queensland fleet will facilitate these opportunities, and next year the branch will also benefit
from a full time manager presence.
The year has not been without challenges. Resource constraints have pushed the small team at times, yet the results have been successfully
delivered in a timely and safe manner. We are also up against some significant competition in the marketplace that can drive hire rates down on
certain projects, however, we continue to rely on our positioning as being the expertise in the barrier market rather than lower price point.
FY24 looks to be an exciting prospect, with further capital to be invested into the growth of the business in both New South Wales and Queensland,
the addition of further resources and our team’s drive to be the best in the market for barriers. I look forward to seeing the results come to fruition.
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HV2 Deployment
Canterbury, New South Wales
Road Safety Rental were engaged for a busy Canterbury Road project
due to the unique requirements of the project. The head contractor was
required to maintain maximum lane width whilst also protecting workers
upgrading slip lanes for future growth. The HV2 Barrier was perfect for
this project with its narrow 450mm footprint, and freestanding TL-4
rating ensuring the protection required.
A maximum lane width could be maintained in a tight job. Deployed at
night within the road closure time to allow for road opening on the next
day and incorporating the T-Lok and T-Lok wedge to provide maximum
protection around the intersection, Road Safety Rental delivered the
perfect solution for the clients needs.
T-Lok Deployment
Brisbane, Queensland
Road Safety Rental were contacted and engaged to
provide temporary barrier with anti-gawk protection
to the new Skye by Pikos residential apartment tower
being built by Tomkins Commercial on the Kangaroo
Point cliffs, in the heart of Brisbane.
Road Safety Rental were the preferred supplier due
to their attention to detail and quality product with
screens.
The deployment was efficient with communication
with the client and attention to detail maintained
throughout. The team delivered the barriers as per
site requirements in half a day, allowing the job to
continue without interruption.
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Directors’ Report
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the ‘Group’) consisting
of Saferoads Holdings Limited (referred to hereafter as the ‘company’ or ‘parent entity’) and the entities it controlled at the end of, or during, the
year ended 30 June 2023.
Directors
The following persons were directors of Saferoads Holdings Limited during the whole of the financial year and up to the date of this report, unless
otherwise stated:
David Ashmore
Darren Hotchkin
Steven Difabrizio
Non-Executive Chairman
Appointed 22 November 2012
Managing Director
Appointed 21 October 2005
Non-Executive Director
Appointed 7 September 2021
Directors’ Profiles
David Ashmore (FCA GAICD F.FIN)
Non-Executive Chairman
David Ashmore was appointed to the Board on 22 November 2012. He was appointed Chairman of the Board on 19 August 2013. He is Chairman of
the Audit and Risk Committee and a member of the Remuneration/Nomination 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.
He is a Fellow of the Institute of Chartered Accountants in Australia, a Graduate member of the Australian Institute of Company Directors and a
Fellow of the Financial Services Institute of Australia.
David has not served as a Director of any other listed companies during the preceding three years.
Darren Hotchkin
Managing Director
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. He was re- appointed as Managing Director 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 Managing Director, 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.
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Steven Difabrizio (MBA) (BEng (Civ)) (MAICD)
Non-Executive Director
Steven Difabrizio was appointed to the Board on 7 September 2021. He is Chairman of the Remuneration/Nomination Committee and a member of
the Audit and Risk Committee.
Mr. Difabrizio has over 20 years’ experience in industrial rental businesses. Steven commenced his rental industry career in 1998 with Preston Hire.
Preston Hire introduced a patented crane loading platform for high rise building construction to the rental market. The business grew to become an
industry leader in Victoria and South Australia and in 2015 was sold into the National Preston Hire Group to consolidate the national brand.
Preston Hoists offered vertical hoist access rental solutions for multi-story construction projects. Preston Hoists became the largest supplier of
these products in Victoria and South Australia and was subsequently purchased by Coates Hire in 2003.
Steven then turned his focus to another venture, Cassaform, a business that offered construction formwork and propping systems to the industrial
building market, with both product sales and rental services. The business grew rapidly with a focus on the Victorian market and was sold in 2019 to
an internal business partner.
Steven is a civil engineer, has completed a Masters of Business Administration and is currently a member of the Australian Institute of Company
Directors.
Steven has not served as a Director of any other listed companies during the preceding three years.
Company Secretary
Aimee Taylor (BComm (Hons) (GCert HR Mgt)
Aimee joined Saferoads in November 2018 and is the Company’s Media, Communications and Human Resources Manager. She was appointed
Company Secretary on 28 October 2020. Aimee has completed a Bachelor of Media and Communications, majoring in Public Relations, and a
Graduate Certificate of Human Resource Management at Deakin University.
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Interest in Shares
As at the date of this report, Directors’ interests in the shares of the Company are:
Name
David Ashmore
Darren Hotchkin
Steven Difabrizio
Dividends
Shares
1,462,755
9,765,937
4,340,549
No dividends have been paid or declared since the start of the period and the directors do not recommend the payment of a dividend in respect of
the period.
Principal Activities
The principal activity of the Group during the year continued to be the sale or rental of road safety products and solutions primarily to end users.
Products and services provided include flexible guideposts and signage; rubber-based traffic calming products including separation kerbing and
wheel stops; variable messaging sign boards; permanent and temporary public solar lighting poles; permanent and temporary crash cushions
including bollards and safety barriers.
In all its activities, the Group remains focused on providing innovative products and materials that protect the safety of all road users – motorists,
road construction workers and pedestrians.
Operating and Financial Review
Revenue from product sales and services grew 18.6% to $14,648,496 (2022: $12,439,416) due to shipping and supply chain constraints
providing less of a sales bottleneck and international sales activity rebounding as restrictions on travel eased post pandemic. This sales growth
resulted in a 13.2% improvement in underlying EBITDA to $2,145,281 (2022: 1,895,760). However, the Group reported a loss after tax for the
year of $197,407 (2022: $64,289 profit) primarily attributable to the following factors:
• The continued expansion of our equipment rental services fleet - Road Safety Rental – led to an increase in depreciation and amortisation
charges of 9.4% to $1,712,609 (2022: $1,565,395).
• The unfavourable interest rate environment resulted in an 8.5% increase in finance charges to $305,079 (2022: $281,076).
• The Group booked a provision of $325,000 relating to the November 2021 workplace fatality.
Debt levels decreased by 9.8%, to $3,165,863 (2022: $3,509,087) largely driven by repayments on the term loan facility. Over 62% of the
Group’s debt is fixed interest equipment finance loans, which won’t be impacted by further interest rate increases.
The gearing ratio decreased to 25.8% (2022: 29.6%). We continue to receive support from our primary financier, with the Commonwealth Bank
approving an additional $0.62 million in asset finance facilities during the year to enable the expansion of our equipment rental services fleet.
Road Safety Rental’s contribution to net profit is expected to grow in future years with investment planned across all three state depots but
with a particular focus on scaling up the NSW and Queensland operations. This investment should ensure the business is well positioned to
benefit from the Federal Government’s 10- year $120 billion infrastructure pipeline.
Significant Changes in State of Affairs
There were no significant changes in the state of affairs of the Group during the financial year.
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Significant Events after Reporting Date
Following legal advice received during September 2023, the Directors have resolved to initiate negotiations with WorkSafe regarding the charges
relating to the November 2021 workplace fatality.
There has been no other matter or circumstance which has arisen since 30 June 2023 that has significantly affected, or may significantly affect the
Group’s operations, the results of those operations, or the Group’s state of affairs in future financial years.
Likely Developments and Expected Results
Likely developments in the operations of the Group and the expected results of these operations have been set out in the Chairman’s Overview and
the Managing Director’s Review of Operations and Activities.
Indemnification and Insurance of Directors, Officers and Auditors
The company has indemnified the directors and executives of the Group for costs incurred, in their capacity as a director or executive, for which they may
be held personally liable, except where there is a lack of good faith.
During the financial year, the company paid a premium in respect of a contract to insure the directors and executives of the Group against a liability to
the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the
premium.
Indemnification and Insurance of Auditor
The company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the company or any related entity
against a liability incurred by the auditor.
During the financial year, the company has not paid a premium in respect of a contract to insure the auditor of the company or any related entity.
Environmental Regulation and Performance
The Group’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 Group 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.
23
Remuneration Report (A U DITED)
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.
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.
The key management personnel of the Group consisted of the following Directors and executives during the year:
David Ashmore
Non-Executive Chairman
Darren Hotchkin
Managing Director
Steven Difabrizio
Non-Executive Director
Peter Fearns
Chief Financial Officer (resigned 28 February 2023)
Mark Langham
Chief Financial Officer (appointed 27 March 2023)
Trent Loveless
Chief Operating Officer
Remuneration of Directors and Key Management Personnel
Non-Executive Directors
Total remuneration for non-executive Directors for 2022-23 was $128,000. 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, Managing Director, received total remuneration of $355,123, including statutory superannuation. In addition, Mr Hotchkin was
eligible for a discretionary bonus based on the Company’s financial performance exceeding the targeted profit for FY2023. This did not eventuate.
Performance-Based Remuneration
No performance-based remuneration (bonus incentives) was paid or payable to key management personnel, including the Managing Director, for
the year (FY2022: NIL). The criteria for discretionary bonuses were the Company’s financial performance exceeding the targeted profit for FY2023.
This did not eventuate.
A summary of Company performance for the past five financial years is below.
EPS (cents)
2023
(0.53)
Net profit/(loss) ($)
(197,407)
Share price ($)
$0.13
2022
0.17
64,289
$0.14
2021
1.44
535,173
$0.21
2020
1.43
521,029
$0.20
2019
(0.11)
(41,586)
$0.22
Employment Contracts
Executive employment agreements have been entered into with the Managing Director, Chief Operating 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.
24
Remuneration of Directors and Key Management Personnel
30 June 2023
Short Term
Long Term
Share
Based
Payment
Salaries
& Fees
Non-
monetary
Cash Bonus
Termination
Payment
Super-
annuation
Long
Service
Leave
Options
Total
Perform-
ance
Related
$
$
$
$
$
$
$
$
%
Non Executive Directors
D Ashmore
S. Difabrizio
65,158
56,000
Executive Director
-
-
D Hotchkin
300,815
31,123
Executive
P Fearns#
M Langham*
T Loveless
Total
138,666
56,539
218,400
835,578
-
-
-
31,123
-
-
-
-
-
-
-
-
-
-
15,734
-
-
15,734
6,842
-
23,185
14,560
5,936
22,932
73,455
-
-
-
-
12
5,708
5,720
-
-
-
-
-
-
-
72,000
56,000
355,123
168,960
62,487
247,040
961,610
# Mr. Fearns resigned as Chief Financial Officer on 28 February 2023
*Mr. Langham was appointed Chief Financial Officer on 27 March 2023
** Non-monetary benefits comprise entirely of motor vehicle fringe benefits
30 June 2022
Short Term
Long Term
Share
Based
Payment
Salaries
& Fees
Non-
monetary
Cash Bonus
Termination
Payment
Super-
annuation
Long
Service
Leave
Options
Total
Perform-
ance
Related
$
$
$
$
$
$
$
$
%
Non Executive Directors
D Ashmore
S. Difabrizio
H. Wallace
75,000
49,048
10,124
Executive Director
-
-
-
D Hotchkin
367,200
31,122
Executive
P Fearns
200,000
T Loveless*
70,000
-
-
Total
771,372
31,122
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,500
-
1,012
23,568
20,000
7,000
59,080
-
-
-
-
161
1,008
1,169
-
-
-
-
-
-
-
82,500
49,048
11,136
421,890
220,161
78,008
862,743
* Mr. Loveless was appointed Chief Operating Officer on 1 March 2022
** Non-monetary benefits comprise entirely of motor vehicle fringe benefits
-
-
-
-
-
-
-
-
-
-
-
-
25
Shareholdings of Key Management Personnel
Shares held in Saferoads Holdings Limited:
Balance at 1
July 2022
Acquired through
On-Market trade
Acquired through Dividend
Reinvestment Plan
Sold
Other*
Balance at 30
June 2023
Directors
D Hotchkin
D Ashmore
S Difabrizio
Executive
P Fearns *
M Langham
T Loveless
Total
9,765,937
1,462,755
4,340,549
33,000
-
-
15,602,241
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,765,937
1,462,755
4,340,549
(33,000)
-
-
-
-
-
-
15,569,241
*Mr Ferns resigned as Chief Financial Officer on 28 February 2023 – quantity represents shareholding at time of resignation.
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.
Other Transactions With Key Management Personnel
During the financial year the Group acquired certain consumable manufacturing materials from an entity related to Mr D. Hotchkin at normal
commercial rates aggregating $46,033 (2022: $42,815), with $19,707 included in Trade payables at 30 June 2023 (2022: $13,300).
During the financial year the Group leased premises from an entity related to Mr D. Hotchkin at normal commercial rates aggregating $8,583 (2022:
$19,425), with no security deposits paid at 30 June 2023 (2022: $1,667).
During the financial year the Group received design and modelling services from an entity related to Mr D. Hotchkin at normal commercial rates
aggregating $147,158 (2022: $38,753), with $12,447 in Trade payables at 30 June 2023 (2022: NIL).
During the financial year an entity related to Mr D. Hotchkin purchased goods at normal commercial rates for $12,682 (2022: NIL), with $13,951 in
Trade receivables at 30 June 2023 (2022: NIL).
End of audited Remuneration Report.
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 S Difabrizio
5
5
5
5
5
5
2
-
2
2
-
2
-
-
-
-
-
-
26
Non-Audit Services
During the year, Grant Thornton, the Company’s auditors, performed certain other services in addition to their statutory audit duties.
The Board has considered the non-audit services provided during the year by the auditor and, in accordance with written advice provided by
resolution of the Audit and Risk Committee, is satisfied that the provision of those non-audit services during the year is compatible with, and did not
compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons:
• All non-audit services were subject to the corporate governance procedures adopted by the Company and have been reviewed by the Audit
and Risk Committee to ensure they do not impact upon the impartiality and objectivity of the auditor
• The non-audit services do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for
Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision-making
capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards
Details of the amounts paid to the auditors of the Company, Grant Thornton, and its related practices for audit and non-audit services provided
during the year are set out in Note 21 to the financial statements.
Rounding of Amounts
Saferoads Holdings Limited is a type of Company that is referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument
2016/191 and therefore the amounts contained in this report and in the financial report have been rounded to the nearest dollar.
Auditor’s Independence Declaration
The attached independence declaration has been obtained from the Company’s auditors, Grant Thornton.
Signed in accordance with a resolution of Directors
David Ashmore
Director
29 September 2023
27
Grant Thornton Audit Pty Ltd
Level 22 Tower 5
Collins Square
727 Collins Street
Melbourne VIC 3008
GPO Box 4736
Melbourne VIC 3001
T +61 3 8320 2222
Auditor’s Independence Declaration
To the Directors of Saferoads Holdings Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit
of Saferoads Holdings Limited for the year ended 30 June 2023, I declare that, to the best of my knowledge and
belief, there have been:
a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
b no contraventions of any applicable code of professional conduct in relation to the audit.
Grant Thornton Audit Pty Ltd
Chartered Accountants
T S Jackman
Partner – Audit & Assurance
Melbourne, 29 September 2023
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 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 Limited 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 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
15
w
28
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 2023 is dated as at 30 June 2023 and was approved by the
Board on 29 September 2023. 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.
29
30
Saferoads Holdings Limited
Consolidated Statement of Profit or Loss and Other Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2023
Revenue
Revenue from product sales and services
Other income
Total revenue and other income
Raw material, finished goods and logistics
Employee benefits
Fines and penalties
Insurance
Motor vehicle costs
Occupancy costs
Professional fees
Travel and accommodation costs
IT & Communications costs
Warehouse costs
Marketing costs
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
CONSOLIDATED
2023
$
2022
$
14,648,496
232,598
14,881,094
(7,128,972)
(3,805,518)
(325,000)
(215,988)
(170,987)
(66,240)
(218,708)
(105,680)
(132,258)
(272,214)
(198,318)
(420,929)
1,820,281
12,349,416
116,767
12,466,183
(5,466,503)
(3,506,874)
-
(155,253)
(144,448)
(57,949)
(161,934)
(79,753)
(136,237)
(278,402)
(193,748)
(374,322)
1,910,760
(1,712,609)
(1,565,395)
107,672
(305,079)
(197,407)
345,365
(281,076)
64,289
-
-
(197,407)
64,289
(197,407)
64,289
-
(197,407)
-
64,289
(197,407)
64,289
Cents
(0.53)
(0.53)
-
Cents
0.17
0.17
-
31
4
4
4
4
5
6
6
7
Saferoads Holdings Limited
Consolidated Statement of Financial Position
AS AT 30 JUNE 2023
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
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
The accompanying notes form part of these financial statements
32
CONSOLIDATED
2023
$
2022
$
220,111
1,498,671
2,119,887
283,867
4,122,536
4,219
1,801,267
2,542,621
170,789
4,518,896
8,456,959
8,300,595
1,131,861
1,152,593
159,501
10,900,914
15,023,450
1,080,405
268,344
3,054,459
614,796
771,051
1,215,695
1,152,593
182,136
10,851,019
15,369,915
1,390,327
141,791
1,027,339
517,946
395,752
5,789,055
3,473,155
111,404
960,529
21,771
1,093,704
6,882,759
8,140,691
5,593,998
2,546,693
8,140,691
2,481,748
1,063,637
13,277
3,558,662
7,031,817
8,338,098
5,593,998
2,744,100
8,338,098
8
9
10
11
12
5
13
14
15
16
14
15
16
17
17
Saferoads Holdings Limited
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2023
CONSOLIDATED
At 1 July 2021
Net profit/(loss) for the period
Other comprehensive income for the period
Total comprehensive income for the period
At 30 June 2022
At 1 July 2022
Net profit/(loss) for the period
Other comprehensive income for the period
Total comprehensive income for the period
At 30 June 2023
The accompanying notes form part of these financial statements
Contributed Equity
Retained Earnings
Total Equity
$
$
$
5,593,998
-
-
-
2,679,811
64,289
-
64,289
8,273,809
64,289
-
64,289
5,593,998
2,744,100
8,338,098
5,593,998
2,744,100
8,338,098
-
-
-
5,593,998
(197,407)
(197,407)
-
(197,407)
2,546,693
-
(197,407)
8,140,691
33
Saferoads Holdings Limited
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2023
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Net cash flows from operating activities
Cash flows from investing activities
Proceeds from sale of non-trade inventory, 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 borrowings
Repayment of loans and borrowings
Repayment of lease liabilities
Interest received
Interest paid
Net cash flows from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Effects of exchange rate changes on cash
Cash and cash equivalents at end of period
The accompanying notes form part of these financial statements
CONSOLIDATED
2023
$
2022
$
16,396,421
13,295,209
(14,018,813)
(12,350,782)
8
2,377,608
944,427
109,554
(788,204)
(294,776)
-
(973,426)
761,464
(1,104,688)
(542,645)
4
(302,431)
(1,188,296)
215,886
4,219
6
220,111
6,241
(636,925)
(130,577)
178,932
(582,329)
206,830
(520,237)
(509,200)
17
(281,076)
(1,103,666)
(741,568)
745,787
-
4,219
12
4
8
34
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
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards
Board (‘AASB’) that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
The adoption of these Accounting Standards and interpretations did not have any significant impact on the financial performance or position
of the Group.
The financial statements were authorised for issue by the Directors on 29 September 2023. 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.
35
Saferoads Holdings LimitedNotes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 (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 or prime cost method, over the estimated useful life, as denoted below:
• Property/leasehold improvements (prime cost - 10% to 50%)
• Plant and equipment (diminishing value and prime cost - 5% to 50%)
• Motor vehicles (diminishing value - 18% to 25%)
• Rental equipment (prime cost - 5% to 33%)
(f) Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in which
they are incurred.
(g) Impairment of non-financial assets other than goodwill
The Group assesses whether there is any indication that an asset may be impaired when events or changes in circumstances indicate the carrying
value may not be recoverable. Where an indicator of impairment exists, the Group makes a formal estimate of recoverable amount. Where the
carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.
Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the asset’s value
in use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are largely independent of
those from other assets or groups of assets, in which case, the recoverable amount is determined for the cash- generating unit to which the
asset belongs.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset.
(h) Intangible assets
Intangibles
Intangible assets acquired separately are capitalised at cost. 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 (between 1 to 10 years) or indefinite.
Where amortisation is charged on assets with finite lives, this expense is taken to the statement of profit or loss and other comprehensive
income through the amortisation line item.
Intangible assets, excluding development costs, created within the business are not capitalised and expenditure is charged against profits in the
period in which the expenditure is incurred.
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. Research and Development tax rebates are recognised when they are considered to be probable and reliably estimated.
36
Saferoads Holdings LimitedNotes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 (i) Inventories
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
• Raw materials: purchase cost on a first-in, first-out basis;
• Finished goods and work-in-progress: cost of direct materials and labour and a proportion of manufacturing overheads based on normal
operating capacity but excluding borrowing costs.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs
necessary to make the sale.
(j) Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any
allowance for expected credit losses. Trade receivables are generally due for settlement within 30 days.
The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance.
To measure the expected credit losses, trade receivables have been grouped based on days overdue.
(k) Cash and cash equivalents
Cash in the statement of financial position comprises cash at bank.
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.
(i) 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.
(m) Leases
For any new contracts entered into, 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.
37
Saferoads Holdings LimitedNotes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 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.
(n) 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.
(o) 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.
(p) 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 is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange for transferring
goods or services to a customer. For each contract with a customer, the Group: identifies the contract with a customer; identifies the performance
obligations in the contract; determines the transaction price which takes into account estimates of variable consideration and the time value
of money; allocates the transaction price to the separate performance obligations on the basis of the relative stand-alone selling price of each
distinct good or service to be delivered; and recognise revenue when or as each performance obligation is satisfied in a manner that depicts the
transfer to the customer of the goods or services promised.
Revenue from the sale of goods is recognised at the point in time when the performance obligation is satisfied and the customer obtains control
of the goods, which is generally at the time of delivery.
38
Saferoads Holdings LimitedNotes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 Rendering of services
The Group rents its equipment to customers and recognises revenue over time based on fixed daily rental rates. Revenue for these transactions
is therefore recognised over time based on monthly billing in arrears for rental services provided. In this respect, the Group has a right to the
consideration and the amount billed corresponds directly with the value to the customer for the Group’s performance completed to date. If
a product is returned before month end, revenue is recognised when returned for the period it has been rented. Customers are charged a fee
for the deployment to site and the demobilisation of the rental unit. Lease components are recognised separately from performance revenue.
(q) 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.
(r) 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.
(s) 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.
(t) 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.
39
Saferoads Holdings LimitedNotes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 (u) 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
The provision for impairment of receivables assessment requires a degree of estimation and judgement. It is based on the lifetime expected
credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit loss rate for each group. These
assumptions include recent sales experience, historical collection rates and forward-looking information that is available. The provision for
impairment of receivables is calculated based on the information available at the time of preparation. The actual credit losses in future years
may be higher or lower.
(ii) Provision for impairment of inventories
The provision for impairment of inventories assessment requires a degree of estimation and judgement. The level of the provision is assessed
by taking into account the recent sales experience, the ageing of inventories and other factors that affect inventory obsolescence.
(iii) 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.
(iv) 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.
(v) Impairment of non-financial assets
At the end of each reporting period, the Group assesses whether there is any indication that an asset may be impaired. The assessment will
include the consideration of external and internal sources of information including whether the net assets of the Group exceed its market
capitalisation at reporting date. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable
amount of the asset, being the higher of the asset’s fair value less costs of disposal and value in use, to the asset’s carrying amount.
Any excess of the asset’s carrying amount over its recoverable amount is recognised immediately in profit or loss. The Group specifically
considers the potential impairment of non-financial assets, largely represented by:
• Property, plant and equipment
• Capitalised development costs
• Right of use assets
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-
generating unit to which the asset belongs.
(vi) Provision for the workplace fatality
The provision for the workplace fatality assessment requires a degree of estimation and judgement. The level of the provision is assessed
by taking into account legal advice, historical outcomes of comparable cases, and applying probability-weighted and simple average
techniques to quantify the best estimate for the provision’s amount. The provision for the workplace fatality is calculated based on the
information available at the time of preparation. The actual fines and additional legal fees associated with charges brought by WorkSafe may
be higher or lower.
40
Saferoads Holdings LimitedNotes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 (vii) Going concern
The financial statements have been prepared on the basis that the Group is a going concern, which assumes that the Group will continue
normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.
The Group has a term loan of $1,179,263 and asset finance loans of $1,642,939 at balance date that are subject to terms contained in the
facility agreements with our long term bankers. One of those terms is that all borrowings of the Group cannot exceed a 2.5 times multiple
of the adjusted EBITDA. Because of the recent expensing of the workplace fatality provision, as detailed in note 16 to these accounts,
that measure has increased from a compliant position to 2.8 times that now constitutes a breach of the loan agreement. Accordingly, and
pursuant to accounting standards, all of the CBA loans have now been classified as a current liability resulting in the Group disclosing current
liabilities in excess of current assets by $1,666,519. The Group has now relodged its 30 June 2023 covenant certification and will continue
discussions with its bankers on this matter. The bank has the ability to call the debt under the facility agreement as a result of the covenant
breach, they have not done so at this time.
Should the bank require us to rectify this breach in order for us to continue to retain their support with this loan the directors have multiple
options available to them to deal with that situation including renegotiating some of the loan conditions or a modest capital injection. The
directors have reasonable grounds to believe that this adverse situation can be satisfactorily resolved with its bankers to retain its current
level of their financial support and maintain our normal business operations as a going concern.
Until this covenant breach is rectified there does however exist a material going concern uncertainty in that the Group may not be able to
continue normal business operations and realise its assets and settle its liabilities at the values noted in the Statement of Financial Position.
(v) Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the group
will comply with all the attached conditions.
Government grants relating to costs are deferred and recognised in the profit or loss over the period necessary to match them with the costs
that they are intended to compensate.
Government grants relating to cash subsidies are recognised in the profit or loss as other income. Where the cost has previously been capitalised,
the income is offset against the relevant asset.
3. SEGMENT INFORMATION
The Group’s chief operating decision maker (Managing Director) reviews financial information on a consolidated basis and makes strategic
decisions based on this consolidated information.
The Group operates predominantly in Australia.
During 2023, $1,559,930 or 10.6% of the Group’s revenues were generated from a single customer (2022: $1,321,479 or 10.7% from a single customer).
41
Saferoads Holdings LimitedNotes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 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:
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
(i) Revenue
Revenue from product sales - point in time
Revenue from provision of services - over time
(ii) Other income
Net gain/(loss) on sale of assets
Net profit/(loss) on termination of lease
Interest
R&D tax rebate
Government grant
Net foreign exchange gains/(losses)
Other
(iii) Expenses
Depreciation and amortisation
- Property, plant & equipment
- Right-of-use assets
- Intangible assets
Impairment of plant and equipment
Finance costs
- Bank borrowings
- Leasing arrangements
Bad debts written off
Provision for expected credit losses
42
CONSOLIDATED
2023
$
2022
$
9,667,448
7,495,668
4,981,048
4,853,748
14,648,496
12,349,416
(2,614)
14,756
4
205,911
-
8,194
6,347
232,598
2,598
-
17
88,400
15,000
2,498
8,254
116,767
14,881,094
12,466,183
1,056,211
458,939
197,459
922,016
422,491
220,888
1,712,609
1,565,395
-
-
110,915
194,164
305,079
-
8,873
77,164
203,912
281,076
-
-
Saferoads Holdings LimitedNotes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 5.
INCOME TAX
(a) Income tax (expense) / benefit
Numerical reconciliation of income tax benefit and tax at the statutory rate
Profit before income tax expense
CONSOLIDATED
2023
$
2022
$
127,592
64,289
Tax at the statutory tax rate of 25.00% (Previous year 25.00%)
31,898
16,072
Tax effect amounts which are not (deductible) / taxable in calculating taxable income:
Temporary differences
Non-deductible expenses
Effect of R&D Rebate @ 43.5% of eligible expenses
R&D tax incentive income - non assessable
Recognition of prior year unbooked tax losses
(b) Deferred income tax at 30 June relates to the following:
Deferred tax assets attributable to unused tax losses carried forward
Net deferred tax assets/(liabilities) attributable to temporary differences
Tax losses not brought to account
(c) Deferred tax assets not brought to account at reporting date
Operating losses
Capital losses
(11,216)
25
56,839
(51,478)
(26,068)
-
1,545,694
(245,256)
(147,845)
1,152,593
-
34
-
-
(16,106)
-
1,652,345
-
(499,752)
1,152,593
147,845
458,037
499,752
458,037
As at 30 June 2023, the Group has carry forward tax losses with a tax effect of $1,545,694, measured at the corporate tax rate of 25%. Carry
forward tax losses with a tax effect of $1,152,593 (2022: $1,152,593) have been brought to account as a net deferred tax asset. Carry forward
tax losses with a tax effect of $147,845 relating to a prior year have not been brought to account.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable
amounts will be available to utilise those temporary differences and losses.
The Group has realised capital losses with a gross amount of $1,832,149 that is available for offset against any future taxable capital gains.
43
Saferoads Holdings LimitedNotes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 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
2023
$
2022
$
Net profit/(loss) attributable to equity holders from continuing operations
Net profit/(loss) attributable to equity holders of the parent
(197,407)
(197,407)
64,289
64,289
Net profit/(loss) attributable to ordinary shareholders for diluted earnings per share
(197,407)
64,289
Weighted average number of ordinary shares for basic earnings per share
Adjusted weighted average number of ordinary shares for diluted earnings per share
37,461,783
37,461,783
37,461,783
37,461,783
- Basic for profit/(loss) for the full year
- Diluted for profit/(loss) for the full year
Cents
(0.53)
(0.53)
Cents
0.17
0.17
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 37,461,783 (2022: 37,461,783) shares on issue.
7. DIVIDENDS PAID AND PROPOSED
Equity dividends on ordinary shares:
Interim franked dividend paid for 2023: 0.0 cents (2022: 0.0 cents)
Dividends proposed and not recognised as a liability:
Final franked dividend for 2023: 0.0 cents (2022: 0.0 cents)
Franking Credit Balance:
CONSOLIDATED
2023
$
2022
$
-
-
-
-
The amount of franking credits available for future reporting periods after the payment of income
tax payable and the impact of dividends proposed.
3,316,423
3,476,246
44
Saferoads Holdings LimitedNotes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 8. NOTES TO THE STATEMENT OF CASH FLOWS
Reconciliation of cash
For the purposes of the statement of cash flows, cash and cash
equivalents comprise the following at 30 June:
CONSOLIDATED
2023
$
2022
$
Cash at bank and on hand
220,111
4,219
Reconciliation from the net profit/(loss) after tax to the net cash flows from operations
Profit/(loss) after tax for the year
(197,407)
64,289
Adjustments for:
Depreciation and amortisation
Net (profit)/loss on disposal of plant and equipment
Net (profit)/loss on termination of lease
Movement in slow moving stock provision
Movement in expected credit loss provision
Effects of exchange rate changes on cash
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 trade and other payables
(Decrease)/increase in contract liabilities
(Decrease)/increase in provisions
Net cash from operating activities
1,712,609
2,614
(14,756)
23,748
8,873
(6)
(4)
302,431
474,874
(45,349)
(90,443)
(309,922)
126,553
383,793
2,377,608
1,565,395
(2,598)
-
-
-
-
(17)
281,076
(285,492)
(225,588)
61,007
(692,670)
127,812
51,213
944,427
45
Saferoads Holdings LimitedNotes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 9. TRADE AND OTHER RECEIVABLES (CURRENT)
Trade receivables
Other receivables
Less: Allowance for expected credit losses
Ageing of trade receivables (net of allowance for expected credit losses)
1 - 30 days
31 - 60 days
61 - 90 days
91 days and over
Trade receivables are non-interest bearing.
Movement in allowance for expected credit losses
Balance at the beginning of financial year
Amounts written off
Additional allowance for expected credit losses recognised/(released)
10. INVENTORIES
Stock on hand
Less: Allowance for slow moving or obsolete stock
CONSOLIDATED
2023
$
2022
$
1,084,303
439,271
(24,903)
1,498,671
576,177
453,693
19,165
10,366
1,817,297
-
(16,030)
1,801,267
1,031,001
734,076
22,267
13,923
1,059,400
1,801,267
16,030
-
8,873
24,903
16,030
-
-
16,030
CONSOLIDATED
2023
$
2022
$
2,174,386
(54,499)
2,119,887
2,573,372
(30,751)
2,542,621
During the year, the Group recognised a $23,748 expense relating to the write-down of inventories (2022: NIL).
46
Saferoads Holdings LimitedNotes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 11. PROPERTY, PLANT AND EQUIPMENT
Property, plant & equipment at cost
Less accumulated depreciation
Total plant & equipment
Movements in Carrying Amounts
Balance at 1 July 2021
Additions
Depreciation expense
Disposals
Assets transferred from inventories
Impairment
CONSOLIDATED
2023
$
2022
$
14,905,113
(6,448,154)
8,456,959
13,567,305
(5,266,710)
8,300,595
Property/
Leasehold
improvements
$
1,436,719
61,945
Plant &
equipment
Motor vehicles
Rental
equipment
Total
$
$
598,939
149,500
$
$
284,247
5,794,126
8,114,031
50,025
951,120
1,212,590
(396,504)
(140,426)
(79,244)
(728,333)
(1,344,507)
-
-
-
(9,021)
-
-
-
-
-
(15,587)
343,089
-
(24,608)
343,089
-
Carrying amount at 30 June 2022
1,102,160
598,992
255,028
6,344,415
8,300,595
Balance at 1 July 2022
Additions
Depreciation expense
Disposals
Assets transferred from inventories
Impairment
1,102,160
419,748
598,992
277,930
255,028
6,344,415
8,300,595
57,909
728,772
1,484,359
(446,352)
(171,939)
(59,179)
(837,680)
(1,515,150)
(145,012)
(238)
-
-
-
-
-
-
-
(111,930)
(257,180)
444,335
444,335
-
-
Carrying amount at 30 June 2023
930,544
704,745
253,758
6,567,912
8,456,959
Included in Property, plant and equipment are right-of-use assets as follows:
2022
Property
Equipment under finance lease
Total right-of-use assets
2023
Property
Equipment under finance lease
Total right-of-use assets
Net carrying
amount b/f
Additions
Disposals
Depreciation
$
$
$
$
1,337,421
496,033
26,383
-
1,833,454
26,383
-
-
-
(370,340)
(52,151)
(422,491)
1,437,346
Net carrying
amount b/f
Additions
Disposals
Depreciation
$
$
$
$
993,464
443,882
1,437,346
319,295
696,155
376,860
(145,012)
(400,269)
-
(58,669)
(145,012)
(458,938)
1,529,550
47
Net carrying
amount
$
993,464
443,882
Net carrying
amount
$
825,043
704,508
Refer to note 15 for further information on Right-of-use asset leases.
Saferoads Holdings LimitedNotes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 12. INTANGIBLE ASSETS
Product development costs
Less accumulated amortisation
Website development costs
Less accumulated amortisation
Patents and product approvals
Less accumulated amortisation
Movement in carrying amounts
Balance at 1 July 2021
Capitalisation of costs
R&D tax rebate allocation
Amortisation expense
Carrying amount at 30 June 2022
Balance at 1 July 2022
Capitalisation of costs
R&D tax rebate allocation
Amortisation expense
Carrying amount at 30 June 2023
CONSOLIDATED
2023
$
2022
$
1,972,955
(1,070,060)
902,895
56,427
(56,427)
-
359,656
(130,690)
228,966
1,131,861
1,865,119
(907,126)
957,993
56,427
(56,019)
408
353,867
(96,573)
257,294
1,215,695
Website dev’t
costs
Patents/Product
approvals
Product dev’t costs
Total
$
$
$
$
6,413
-
-
(6,005)
408
408
-
-
(408)
-
276,176
18,482
-
(37,364)
257,294
257,294
5,789
-
(34,117)
228,966
1,113,949
112,095
(90,532)
(177,519)
957,993
957,993
288,987
(181,151)
(162,934)
902,895
1,396,538
130,577
(90,532)
(220,888)
1,215,695
1,215,695
294,776
(181,151)
(197,459)
1,131,861
Patents/product approvals predominantly relate to various applications for new products that have yet to be commercialised. Once the related
asset is in use, then the relevant patent/product approval will be amortised over its expected useful life.
48
Saferoads Holdings LimitedNotes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 12. INTANGIBLE ASSETS (continued)
At the reporting date, the net assets of the Group exceed its market capitalisation and impairment testing was performed. The Group’s intangible
assets are not capable of generating cash flows independently but form part of a larger cash generating unit (CGU) with various sales and support
departments, and other assets. For impairment testing purposes, the carrying amount of intangible assets are compared to the recoverable
amount of the Group’s single CGU. The recoverable amount of the CGU has been determined by a value-in-use calculation using a discounted
cash flow model, based on a 5 year projection period approved by management, together with a terminal value. Key assumptions to which the
recoverable amount of the CGU is most sensitive are listed in the table below.
Item
Assumption
Rationale
Revenue Growth Rates
Expenditure
Growth Rates
10% p.a annual
average growth
5% p.a annual
average growth
The Groups’s strategy is expected to continue to increase both the scale
of the rentals business and generate additional international revenues
The business has existing capacity to deliver increased revenues
without adding significant costs. Managements estimate also takes into
account the prevailing interest rate and efforts to contain costs.
Years forecasted
Tax Rate
5 years
25%
5 years as per recommended length of time per AASB136
Base rate entity company tax rate
Working Capital
17% of revenues
Average working capital required
Discount Rate
10% pre-tax
Management’s estimate of the Groups's weighted average cost of capital, the
risk free rate and the volatility of the share price relative to market movements
Sensitivity
As disclosed in note 2, the directors have made judgements and estimates in respect of impairment testing. Should these judgements and
estimates not occur, the resulting carrying amount of the intangible assets may decrease. The sensitivities are as follows: (a) Revenue and cost
of sales growth would need to decrease to 7.2% for the CGU before intangible assets would need to be impaired, with all other assumptions
remaining constant. (b) The discount rate for the CGU would be required to increase by at least 7.5% before intangible assets would need to be
impaired, with all other assumptions remaining constant.
The directors believe that other reasonable changes in the key assumptions on which the recoverable amount of the Groups’s intangible assets
is based on would not cause the CGU’s carrying amount to exceed its recoverable amount.
13. TRADE AND OTHER PAYABLES (CURRENT)
Trade payables
Accrued expenses
GST payable
Payables are non-interest bearing and are normally settled between 30 and 60-day terms.
CONSOLIDATED
2023
$
2022
$
803,347
245,256
31,802
1,148,063
193,970
48,294
1,080,405
1,390,327
49
Saferoads Holdings LimitedNotes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 14. INTEREST-BEARING LOANS AND BORROWINGS
Current
Bank loans
Borrowings for asset finance
Non-current
Bank loans
Borrowings for asset finance
Financing facilities available
At reporting date, the Company had the following financing facilities provided by Commonwealth
Bank available:
Total facilities:
- term loan
- asset finance
- overdraft
- bank charge card
Facilities used at reporting date
- term loan
- asset finance
- overdraft
- bank charge card
Facilities unused at reporting date
- term loan
- asset finance
- overdraft
- bank charge card
CONSOLIDATED
2023
$
2022
$
1,179,263
1,875,196
3,054,459
-
111,404
111,404
170,579
856,759
1,027,338
1,176,429
1,305,319
2,481,748
CONSOLIDATED
2023
$
2022
$
1,183,128
2,000,000
500,000
75,000
3,758,128
1,179,263
1,642,939
-
9,830
2,832,032
3,865
357,061
500,000
65,170
922,231
1,347,008
2,000,000
1,000,000
75,000
4,422,008
1,347,008
1,675,184
-
61,000
3,083,192
-
324,816
1,000,000
14,000
1,338,816
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.
The term loan facility had a variable interest rate of 7.75% at 30 June 2023 (30 June 2022: 4.50%). The term loan facility matures in December 2024.
The weighted average interest rate of borrowings for asset finance was 5.52% at 30 June 2023.
After recognising a $325,000 provision for estimated fines and additional legal fees associated with the November 2021 workplace fatality, the
Group was in breach of its facility covenants with the Commonwealth Bank at 30 June 2023. As a consequence $995,428 of the term loan and
$942,654 of the borrowings for asset finance have now been reclassified as current. The covenant breach has not been rectified nor the terms
of the loan renegotiated before the financial statements were authorised for issue.
50
Saferoads Holdings LimitedNotes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
15. LEASE LIABILITIES
Current
Right-of-use asset leases
Non-current
Right-of-use asset leases
CONSOLIDATED
2023
$
2022
$
614,796
614,796
517,947
517,947
960,529
960,529
1,063,637
1,063,637
Hire purchase liabilities are secured by a charge over the related non-financial assets.
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 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:
Short-term leases
Leases of low value assets
2023
$
2022
$
28,271
7,926
36,197
19,425
7,926
27,351
The Group leases its head office and warehouse facility and other warehouse sites with terms ranging from ‘month to month’ to 10 years.
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, 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-of-use assets in a consistent manner to
its property, plant and equipment (see Note 11).
Refer to note 18 for further information on financial instruments.
51
Saferoads Holdings LimitedNotes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 16. PROVISIONS
Current
Employee benefits
Workplace fatality
Non-Current
Employee benefits
Movements in provisions
CONSOLIDATED
2023
$
2022
$
446,051
325,000
771,051
21,771
21,771
395,752
-
395,752
13,277
13,277
Movements in the employee benefits and workplace fatality provisions during the current financial year are set out below:
Employee benefits
Carrying amount at the start of the year
Additional provisions recognised
Workplace fatality
Carrying amount at the start of the year
Additional provisions recognised
Workplace Fatality Provision
2023
$
2022
$
409,029
58,793
467,822
-
325,000
325,000
357,816
51,213
409,029
-
-
-
The Group is actively collaborating with our legal team to address charges brought forward by WorkSafe, based on a brief of evidence presented
by them. Following the advice of our legal team, the Directors have resolved to initiate negotiations with WorkSafe to work towards resolving
the matter.
In accordance with AASB 137, the Group has recognised a provision for estimated fines and additional legal fees associated with charges
brought by WorkSafe. This provision is based on a legal obligation stemming from the ongoing matter.
Significant uncertainty remains about the quantum and timing of any fine, however in determining the provision amount, the Directors have:
• Consulted with legal advisors
• Examined historical outcomes of comparable cases
• Applied probability-weighted and simple average techniques to quantify the best estimate for the provision’s amount.
Due to regulatory changes, insurance coverage for these fines is not permissible, which is reflected in our provision estimate.
The provision includes the Directors best estimate of uninsured legal fees which may be incurred in addition to the fine, this amount is likely to
be immaterial based on the existing insurance coverage.
While the actual financial penalty levied might differ from the provisioned amount, the Directors hold the opinion that a material variance is not
probable.
The provision will be reassessed at each reporting date to reflect current best estimates.
52
Saferoads Holdings LimitedNotes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 17. EQUITY
Contributed Equity
Ordinary shares
Share issue costs
Issued and fully paid
Movements in ordinary shares on issue (legal parent)
Balance at beginning of the period
Shares issued under Dividend Reinvestment Plan
At 30 June
CONSOLIDATED
2023
$
2022
$
5,593,998
5,593,998
5,593,998
5,593,998
No. of shares
37,461,783
37,461,783
-
-
37,461,783
37,461,783
Ordinary shares carry one vote per share, either in person or by proxy, at a meeting of the Company, and carry the rights to dividends and the
proceeds on winding up of the parent entity in proportion to the number of shares held.
There is no current on-market buy-back of ordinary shares.
Retained Earnings
Movements in retained earnings are as follows:
Balance at beginning of period
Net profit for the year
Less: Dividend paid (refer note 7)
Balance at 30 June 2023
CONSOLIDATED
2023
$
2022
$
2,744,100
(197,407)
-
2,679,811
64,289
-
2,546,693
2,744,100
53
Saferoads Holdings LimitedNotes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
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 amortised cost
CONSOLIDATED
2023
$
2022
$
220,111
1,498,671
4,219
1,801,267
Total Financial Assets
1,718,782
1,805,486
Financial Liabilities
- Financial liabilities at amortised cost
5,576,337
6,287,027
Total Financial Liabilities
5,576,337
6,287,027
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.
54
Saferoads Holdings LimitedNotes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 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
Fixed Interest Rate Maturing
Non Interest
Bearing
Variable
Interest Rate
Within 1 year
2 to 5 years
Later than
5 years
%
$
$
$
$
$
N/A
N/A
N/A
6.53%
5.52%
5.33%
220,111
1,498,671
1,718,782
835,148
-
-
-
-
-
-
-
1,179,263
-
-
-
-
-
-
-
-
-
-
-
-
1,875,196
111,404
614,796
960,529
Total
$
220,111
1,498,671
1,718,782
835,148
1,179,263
1,986,600
1,575,325
-
-
-
-
-
-
-
2023
Financial Assets
- Cash
- Receivables
Total Financial Assets
Financial Liabilities
- Payables
- Bank loans
- Asset finance borrowings
- Lease liabilities
Total Financial Liabilities
835,148
1,179,263
2,489,992
1,071,933
-
5,576,337
$
$
$
$
$
$
2022
Financial Assets
- Cash
- Receivables
Total Financial Assets
Financial Liabilities
- Payables
- Bank loans
- Asset finance borrowings
- Lease liabilities
%
N/A
N/A
N/A
3.80%
5.77%
5.78%
4,219
1,801,267
1,805,486
1,196,357
-
-
-
-
-
-
-
1,347,008
-
-
-
-
-
-
-
-
-
-
-
-
856,759
1,305,319
517,947
1,063,637
Total Financial Liabilities
1,196,357
1,347,008
1,374,706
2,368,956
-
-
-
-
-
-
-
-
4,219
1,801,267
1,805,486
1,196,357
1,347,008
2,162,078
1,581,584
6,287,027
55
Saferoads Holdings LimitedNotes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
18. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(b) Credit risk
The Group trades only with recognised, credit worthy third parties.
It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures and pre-agreed credit limits.
In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is managed closely.
The maximum exposure to credit risk, excluding the value of any collateral or other security, at reporting date recognised as financial assets is
the carrying amount, net of any provisions for doubtful debts which is $24,903 at 30 June 2023 (2022: $16,030), as disclosed in the statement
of financial position and notes to the financial statements. The Group 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 $29,530 (2022: $36,190).
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 Group.
(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:
Within 1 Year
1 to 5 Years
Over 5 Years
$
$
$
2023
- Payables
- Bank loans
- Borrowings for asset finance
- Lease liabilities
835,148
1,179,263
1,875,196
614,796
-
-
111,404
960,529
Total Financial Liabilities
4,504,404
1,071,933
Within 1 Year
1 to 5 Years
Over 5 Years
$
$
$
2022
- Payables
- Bank loans
- Borrowings for asset finance
- Lease liabilities
1,196,357
170,579
856,759
517,947
-
1,176,429
1,305,319
1,063,637
Total Financial Liabilities
2,741,642
3,545,385
Total
$
835,148
1,179,263
1,986,600
1,575,325
5,576,337
Total
$
1,196,357
1,347,008
2,162,078
1,581,584
6,287,027
-
-
-
-
-
-
-
-
-
-
(d) 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.
(e) 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.
56
Saferoads Holdings LimitedNotes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 18. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(f) 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 2022
+/-2% in interest rates
+/-5c in AUD / USD
CONSOLIDATED
Profit/(loss)
$
Equity
$
+/-23,585
+/-174,816
+/-23,585
+/-174,816
Year Ended 30 June 2021
$
$
+/-2% in interest rates
+/-5c in AUD / USD
19. SUBSIDIARIES
+/-26,940
+/-143,560
+/-26,940
+/-143,560
The consolidated financial statements include the financial statements of Saferoads Holdings Limited and the subsidiaries listed in the following table.
Name
Country of incorporation
Saferoads Pty Ltd
Australia
% equity interest
2023
100%
2022
100%
57
Saferoads Holdings LimitedNotes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 20. RELATED PARTIES
Transactions with Key Management Personnel
During the financial year the Group acquired certain consumable manufacturing materials from an entity related to Mr D. Hotchkin at normal
commercial rates aggregating $46,033 (2022: $42,815), with $19,707 included in Trade payables at 30 June 2023 (2022: $13,300).
During the financial year the Group leased premises from an entity related to Mr D. Hotchkin at normal commercial rates aggregating $8,583
(2022: $19,425), with no security deposits paid at 30 June 2023 (2022: $1,667).
During the financial year the Group received design and modelling services from an entity related to Mr D. Hotchkin at normal commercial rates
aggregating $147,158 (2022: $38,753), with $12,447 in Trade payables at 30 June 2023 (2022: NIL).
During the financial year an entity related to Mr D. Hotchkin purchased goods at normal commercial rates for $12,682 (2022: NIL), with $13,951
in Trade receivables at 30 June 2023 (2022: NIL).
21. AUDITORS’ REMUNERATION
Amounts received or due and receivable by:
- Grant Thornton, for the audit of the financial report
95,275
76,000
- Other services (R&D tax rebate): Grant Thornton
55,305
20,000
2023
$
2022
$
22. KEY MANAGEMENT PERSONNEL DISCLOSURES
(a)
Details of Management Personnel
(i) Directors
David Ashmore
Darren Hotchkin
Steven Difabrizio
(ii) Executives
Peter Fearns
Mark Langham
Trent Loveless
Non-Executive Chairman
Managing Director
Non-Executive
Chief Financial Officer (resigned 28 February 2023)
Chief Financial Officer (appointed 27 March 2023)
Chief Operating Officer
(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
58
2023
$
2022
$
882,435
73,455
5,720
961,610
802,494
59,080
1,169
862,743
Saferoads Holdings LimitedNotes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 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
2023
$
2022
$
-
-
5,600,022
5,600,022
-
-
5,600,022
5,593,998
6,024
-
-
-
-
5,600,022
5,593,998
6,024
-
-
Guarantees entered into by the parent entity in relation to debts of its subsidiaries
576,051
486,894
24. CONTINGENT ASSETS AND LIABILITIES
There are no contingent liabilities as at 30 June 2023 (2022: regulatory penalties relating to November 2021 workplace fatality).
There are no contingent assets as at 30 June 2023 (2022: NIL).
25. SUBSEQUENT EVENTS
Following legal advice received during September 2023, the Directors have resolved to initiate negotiations with WorkSafe regarding the
charges relating to the November 2021 workplace fatality.
There has been no matter or circumstance which has arisen since 30 June 2023 that has significantly affected or may significantly affect the
operations of the Group or the results of those operations or the state of affairs of the Group.
59
Saferoads Holdings LimitedNotes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 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 2023 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 Managing Director
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
29 September 2023
60
Grant Thornton Audit Pty Ltd
Level 22 Tower 5
Collins Square
727 Collins Street
Melbourne VIC 3008
GPO Box 4736
Melbourne VIC 3001
T +61 3 8320 2222
Independent Auditor’s Report
To the Members of Saferoads Holdings Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Saferoads Holdings Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2023, the
consolidated statement of profit or loss and other comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, and notes to the
consolidated financial statements, including a summary of significant accounting policies, and the Directors’
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its performance for
the year ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the 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 Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 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 Limited 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 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
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61
Material uncertainty related to going concern
We draw attention to Note 2 in the financial statements, which indicates that the Group has current liabilities in
excess of current assets by $1,666,519. As stated in Note 2, these events or conditions, along with other matters
as set forth in Note 2, indicate that a material uncertainty exists that may cast doubt on the Group’s ability to
continue as a going concern. Our opinion is not modified in respect of this matter.
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.
In addition to the matter described in the Material uncertainty related to going concern section, we have
determined the matters described below to be the key audit matters to be communicated in our report.
Key audit matter
How our audit addressed the key audit matter
Revenue from product sales and services – Note 4
The total revenues from product sales and services
earned by Saferoads Holdings Limited was
$14,648,496 as at 30 June 2023.
The Group derives revenue through the sale of goods
and the rendering of services which are performed
under a combination of individual agreements and
contractual arrangements.
Under AASB 15 Revenue from Contracts with
Customers, revenue may be recognised at a point in
time or over time, as performance obligations are
satisfied.
This is a key audit matter due to the volume of
associated transactions, the level of management
judgement applied due to the complexity of assessing
the revenue recognition point in the contracts.
Intangible assets – Note 12
Capitalised product development costs, in respect to
databases and software, had a net carrying value of
$1,131,861 on 30 June 2023.
AASB 136 - Impairment of Assets require an entity to
assess at the end of each reporting period whether
there are any indicators of impairment and, if any such
indicators exist, assess the recoverable amount of the
assets.
This area is a key audit matter due to the significant
level of management estimation and judgement in
determining the key inputs and assumptions used in
the impairment assessments.
Our procedures included, amongst others:
• Documenting the design and effectiveness of
internal controls relating to revenue streams;
•
•
•
•
Assessing revenue recognition policies to ensure
compliance with AASB 15;
Selecting and testing a sample of revenue
recognised during the year to supporting
documentation to verify occurrence in accordance
with AASB 15;
Evaluating sales transactions around reporting date
to assess whether revenue is recognised in the
correct period; and
Assessing the adequacy of related disclosures in the
financial statements.
Our procedures included, amongst others:
• Assessing the determination of cash generating
units (CGUs) to be assessed for impairment for
appropriateness;
•
•
•
•
Engaging our auditor’s valuation expert to
independently evaluate the methodology to ensure
compliance with AASB 136, and the reasonableness
of the discount rate used in determining recoverable
amount;
Reviewing forecast cash flows against historical
trends and actual performance to date, and
considered management explanations;
Performing sensitivity analysis on key assumptions
in order to understand the potential impact of
changes to the key assumptions; and
Assessing the adequacy of related disclosures in the
financial statements.
Grant Thornton Audit Pty Ltd
62
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 2023, 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.
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.
Responsibilities of the Directors for the financial report
The Directors of the Group are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the Directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
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.
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_2020.pdfThis
description forms part of our auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 5 to 8 of the Directors’ report for the year
ended 30 June 2023.
In our opinion, the Remuneration Report of Saferoads Holdings Limited, for the year ended 30 June 2023
complies with section 300A of the Corporations Act 2001.
Grant Thornton Audit Pty Ltd
63
64
Grant Thornton Audit Pty LtdResponsibilitiesThe Directors of the Groupare 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. Grant Thornton Audit Pty LtdChartered AccountantsT S JackmanPartner –Audit & AssuranceMelbourne, 29 September 2023 ASX Additional Information
Top Holders Grouped Report
Saferoads Holdings Limited
Security Class(es): SRH - ORDINARY FULLY PAID SHARES
Display Top: 20
Postion Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
*Darren John Hotchkin & Jennifer Ann Hotchkin
*CONTEMPLATOR PTY LTD
*CIMTECK SUPER PTY LTD
MR GLENN SCOTT WADSWORTH & MR RICKI MARK WADSWORTH
MR DUNCAN FRANCIS SMITH
MR DAVID ALBERT McCLURE ASHMORE & MRS NOLA JOY
ASHMORE
MR PHILIP BOMFORD
*Noel Thompson & Lorraine Thompson
CARRIER INTERNATIONAL PTY LIMITED
MRS JANET GRIFFITHS
MAXLEK PTY LTD
PARK ROAD SF PTY LTD
ELFIC INDUSTRIES PTY LTD
LIVINGSTONE SERVICES PTY LTD
*Peter Frost
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
*Bruce Allan Head & Beth Alison Head
ROADWORX GROUP PTY LTD
MONEX BOOM SECURITIES (HK) LTD
20
ARJAYM NOMINEES PTY LTD
As at Date: 29 September 2023
Holding
9,765,937
4,753,978
4,340,549
1,589,594
1,466,074
1,462,755
1,130,000
835,438
801,449
544,630
450,557
406,311
388,913
376,836
365,000
324,623
300,000
292,095
285,087
250,000
% IC
26.07%
12.69%
11.59%
4.24%
3.91%
3.90%
3.02%
2.23%
2.14%
1.45%
1.20%
1.08%
1.04%
1.01%
0.97%
0.87%
0.80%
0.78%
0.76%
0.67%
* Holding is aggregated over a shareholder group
TOTAL
30,129,826
Total Issued Capital
37,461,783
80.43%
100.00%
Report generated on 11-Oct-2023 at 12:39 PM
65
Corporate Directory
Directors
David Ashmore
Non-Executive Chairman
Darren Hotchkin
Managing Director
Steven Difabrizio
Non-Executive Director
Company Secretary
Aimee Taylor
Bankers
Commonwealth Bank of Australia
Registered Office
PO Box 2030
22 Commercial Drive,
Pakenham VIC 3810
1800 060 672
+61 3 5945 6600 (International)
sales@saferoads.com.au
saferoads.com.au
Share Registry
Automic Registry Services
Level 5, 126 Phillip Street
Sydney NSW 2000
GPO Box 5193
Sydney NSW 2001
1300 288 664
+61 2 9698 5414 (International)
hello@automic.com.au
automicgroup.com.au
Auditors
Grant Thornton
GPO Box 4736
Melbourne VIC 3001
ASX Code
SRH
66
67
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