Annual
Report
a
Annual Report 20232023 Contents
At a Glance .............................................................. 2
Performance Highlights ........................................... 4
Chairman’s Message ............................................... 6
Managing Director and CEO’s Message ................. 8
Safety .................................................................... 10
Leadership ............................................................. 12
People and Capability ........................................... 14
Client Focus .......................................................... 16
Innovation .............................................................. 18
Sustainability ......................................................... 20
Engineering Construction ...................................... 22
Civil ........................................................................ 24
Asset Services ....................................................... 26
Automation ............................................................ 28
Growth Markets ..................................................... 30
Governance, Financial Report and Other .............. 33
ABOUT THIS REPORT
The Saunders 2023 Annual Report is a summary
of Saunders International Limited’s operations,
performance and financial position for the Financial
Year ended 30 June 2023.
In this report unless otherwise stated, references to
‘Saunders’, ‘Company’, ‘the Group’, ‘us’, ‘we’, and
‘our’ refer to Saunders International Limited.
References to ‘year’, ‘Financial Year’, ‘2023’, ‘FY23’,
or ‘FY2023’ all refer to the Financial Year ended
30 June 2023. All dollar figures are expressed in
Australian dollars unless otherwise stated.
Annual Report 2023
b
Annual Report 2023 ACKNOWLEDGEMENT OF COUNTRY
We acknowledge the
Traditional Owners
and Custodians of
Country throughout
Australia. We pay our
respects to all First
Nations peoples and
acknowledge Elders
past and present.
As a business
that works across
many locations, we
recognise and support
their continuing
connection to lands,
waters, cultures,
languages, and
traditions.
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Annual Report 2023 We’re an integrated engineering construction and
infrastructure company recognised for innovation and
expertise in bulk storage terminal construction, piping,
civil works, asset services and industrial automation.
Regardless of a project’s size, complexity, value or
location, our national team of over 400 are ready to
respond to our customers and deliver to the highest
quality and safety standards.
We’re helping deliver
a better future, today.
We’re proud to work with some of the world’s largest oil
and gas companies, tier-one construction contractors
and across all levels of government.
Our specialist teams are the greatest contributors to
our success, combining deep sector knowledge with
strong customer relationships to identify, optimise and
deliver the ideal solutions across:
Defence
Oil & Gas
Power & Water
Infrastructure
Mining &
Minerals
New Energy
We have metropolitan and regional offices located
strategically across Australia, along with established
operations in Papua New Guinea and a new presence
in New Zealand.
Founded in 1951, we’ve been listed on the Australian
Securities Exchange (ASX: SND) since 2007.
422
in our workforce
NINE
metropolitan &
regional offices
38
major projects
in delivery
FOUR
operational
areas
Engineering
Construction
Asset
Services
Civil
Automation
Annual Report 2023
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Annual Report 2023At a Glance KEY
Office locations
Major projects in delivery
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Annual Report 2023 In 2023, we produced a strong
financial result with a record
revenue and EBIT; Saunders’
fourth consecutive year of growth.
This year, we focused on our continuing strategic growth
trajectory and delivering on that growth, providing attractive
returns for our shareholders.
In the last 12 months, we secured three projects with values
in excess of $40 million each.
Revenue
$200.9m
54.5%
from $130.0m
Cash
$12.8m
65.1%
from $36.7m
EBIT
$14.4m
51.6%
from $9.5m
Market capitalisation
$120.6m
11.6%
from $108.1m
Pipeline
$1.6b at 31 July 2023
Order book
$201.0m at 31 July 2023
23.1%
from $1.3b at 30 June 2022
4.2%
from $192.9m at 30 June 2022
Annual dividend distribution
4.0¢
46.5% payout
from 3.0¢
Earnings per share (basic)
8.84¢
41.7%
from 6.24¢
Full time employees
422
19.9%
from 352
Annual Report 2023
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Annual Report 2023Performance HighlightsAll comparisons are against Financial Year 2022 unless otherwise stated MAJOR PROJECTS SECURED
$44.4 million contract to deliver the Western
Sydney International (Nancy Bird Walton) Airport
Aviation Fuel Terminal for Multiplex in NSW
Secured October 2022
$9.0 million contract to design and construct
a new diesel storage tank for Park Fuels at
Kooragang Island in Newcastle, NSW
Secured October 2022
$8.5 million US Defence contract with Nova
Nacap Joint Venture to design and construct
two bulk liquid storage tanks in Katherine, NT
Secured December 2022
$11.2 million contact with Port Macquarie
Hastings Council to replace five existing timber
bridges with concrete bridges, NSW
Secured May 2023
$42.4 million contract to provide tank
refurbishment and modification services for bp
at its Kwinana Energy Hub in WA
Secured June 2023
$9.3 million contract to deliver a new fuel
storage tank at Ampol’s Lytton Refinery, located
in the Port of Brisbane, QLD
Secured July 2023
$44.1 million contract to expand diesel
storage capacity at Quantem’s Pelican Point
Terminal in SA
Secured July 2023
ADDITIONAL HIGHLIGHTS
Acquisition of Automation IT, expanding Saunders’
capabilities across industrial automation and
technology solutions, following the acquisition of
PlantWeave Technologies in 2021
Securing our Defence Industry Security Program
(DISP) accreditation and finalisation of Federal
Safety Commissioner (FSC) accreditation
Strong safety performance with a Lost Time
Injury (LTI) and a Total Recordable Incident
Frequency Rate (TRIFR121)metric of 1.68,
representing a 13% improvement on 2022’s
TRIFR12 of 1.93
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Annual Report 20231 TRIFR12 is the number of occurrences of injury for each 200,000 hours worked. SAUNDERS INTERNATIONAL BOARD OF DIRECTORS
Back row (left - right): Greg Fletcher, Mark Benson, Brendan York
Front row (left - right): Timothy Burnett, Nick Yates
Annual Report 2023
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Annual Report 2023Chairman’s Message On behalf of Saunders’ Board of
Directors, I am pleased to present
the 2023 Annual Financial Report
and provide shareholders with
an update on our progress and
achievements in the year.
APPOINTMENT AS CHAIRMAN
After serving as Chairman for 16 years, Timothy Burnett
stepped down from the role on 30 June 2023, and I was
privileged to assume the role on 1 July 2023. This change
was a part of the ongoing board renewal process and
Timothy continues to serve as a Non-Executive Director of
the Board in the short term.
Timothy has made an outstanding contribution to Saunders,
and on behalf of Directors and shareholders, I would like to
thank him for his long-standing commitment to Saunders and
leadership of the Board for the past 16 years.
SAFETY
The Group and Board are committed to ensuring the safety,
health and wellbeing of our workforce, subcontractors,
and the community. We do this by investing in our safety
culture, proactively managing the risks associated with our
operations and continually reviewing Workplace Health and
Safety Standards.
In 2023, we delivered a strong safety performance which
has been recognised by our clients and invested in proactive
initiatives to keep our people safe and healthy in the years
ahead. I’m also pleased to report the Group has secured new
federal safety and security accreditations in the period.
The Managing Director and CEO’s report will outline our
safety performance in further detail.
FINANCIAL PERFORMANCE
Despite challenging global economic conditions, our financial
performance in 2023 has been strong, with record revenue of
$200.9 million, EBIT of $14.4 million and a solid order book of
$201.0 million.
This success reflects the Group’s ability to secure key
new opportunities and repeat business with our clients,
particularly as they seek to reposition existing and build new
assets in the renewable energy sector. The Group continues
to position for opportunities in its pipeline.
Earnings per share for the period was 8.84 cents. The
Financial Reports will outline our results in further detail.
STRATEGIC GROWTH
While Saunders has a long history as one of Australia’s
finest tank builders, our business continues to grow and
evolve. We now have dedicated operational areas across
Engineering Construction, Asset Services, Automation and
Civil and are leaders in major projects for blue-chip and
government clients across our key sectors.
Our focus is now on fostering strategic growth, expansion
into new regions and markets, and evolving our client offering
as a one-stop multidisciplinary integrated team.
At the same time, we are building our front-end, design
engineering, tendering and operational capability to support
this growth and position Saunders for future success,
ensuring we continue to deliver with excellence while being
competitive and profitable.
SUSTAINABILITY
We recognise Saunders has a unique opportunity and role to
play in helping our clients to reach their sustainability goals.
Working with major international organisations including bp,
Ampol and Lendlease provides the ability to not only support
them to achieve their bold sustainability targets, but to have
insight into their plans to do so.
We’re leveraging these learnings to define our own
Environment, Social and Governance sustainability targets
across the Group and I look forward to sharing our progress
in these key areas.
OUTLOOK
The outlook for Saunders continues to be positive. Our
growth strategy is on track, and we continue to deliver strong
returns for shareholders. With strong orderbook and recurring
revenues, we are well-positioned to deliver on the embedded
earnings in our pipeline.
In closing, it is an honour to have been appointed to lead the
accomplished and dedicated Saunders Board of Directors
this year. Together, we are committed to working with the
Saunders Executive and Senior Management teams to build
on the strong progress achieved in 2023 and to continue to
deliver rewarding outcomes for shareholders, clients and our
people in the years ahead.
Nick Yates
Chairman
Saunders International
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Annual Report 2023 I’m proud to present Saunders’ Annual
Report for 2023. I would like to extend
a warm welcome to Nick Yates, who
has assumed the role of Chairman,
and express my sincere gratitude to
Timothy Burnett for his 16 years of
exceptional Chairmanship.
SAFETY FIRST
As Managing Director and CEO, ensuring the safety of our
people, subcontractors, and the community is my number
one priority.
In 2023, we achieved a strong safety performance, with a
Total Recordable Injury Frequency Rate (‘TRIFR12’) metric
of 1.68 (compared to 1.93 in 2022) and received client
recognition for our high safety performance in the period.
This year we have taken significant steps to qualify under
the Australian Government Building and Construction
WHS Accreditation Scheme, which represents the highest
workplace health and safety standards in Australian building
and construction projects.
Unfortunately, we recorded a lost-time injury this year after
reporting a zero lost-time injury record for over 4.3 million
hours in 2022. Moving forward, we are focused on fostering
our safety culture and implementing new initiatives, such
as our upcoming safety program that will roll out across the
business in 2024.
FINANCIAL SUMMARY
Despite enduring macro market challenges such as supply
chain disruptions, inflation, weather, and labour constraints,
Saunders’ financial strength has continued to shine this year.
I am pleased to share that we have achieved another year of
record revenues and secured three major projects with values
exceeding $40 million each in the last 12 months.
Mark Benson, Chief Executive Officer
and Managing Director
Annual Report 2023
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Annual Report 2023Managing Director and CEO’s Message (Left-right) Mark Benson, Managing Director and
Chief Executive Officer and Timothy Burnett, Saunders’
Chairman for 16 years. Timothy elected to step down
from the role in 2023 and is now Non-Executive Director.
Our earnings have steadily improved for the fourth
consecutive year through our disciplined approach to risk
management during the tender stage and our exceptional
project execution.
This includes the work we performed on Project Caymus
in Darwin up to the point in April, where our client’s own
strategic reasons we were terminated for convenience from
the project, despite being near the completion of construction
of the 11 jet fuel storage tanks.
While this has had a negative impact on our cash
balance as of 30 June 2023, we anticipate this will
improve upon finalising contract closure with our client
in the coming months.
GROWTH MARKETS
Our focus remains on pursuing key clients and excelling in
our core sectors while identifying opportunities in growth
markets such as Defence, Water, and New Energy.
Our ability to tender directly for larger government funded
projects and compete at scale within the Defence sector
is bolstered by the finalisation of our Defence Industry
Security Program (DISP) and Federal Safety Commissioner
(FSC) accreditations.
We are actively pursuing projects in new regions, including
New Zealand, and are reviewing opportunities for further
geographic expansion.
PEOPLE AND CAPABILITY
2024 AND BEYOND
The collective energy, passion, and commitment to
excellence exhibited by the Saunders team has been the
driving force behind our performance in 2023.
This year, we experienced significant growth, with our
employee numbers increasing by 19.9% to support the
delivery of our newly secured work, positioning our business
for continued success.
We have also invested in new executive and senior talent
to enhance our in-house capabilities. We are now able to
provide our clients a ‘one-stop shop’ for their projects after
bolstering our capability across the Group and forming a
multidisciplinary integrated offering.
STRATEGIC ACQUISITIONS
In May 2023, we welcomed Automation IT to the
Saunders team, a specialist automation and control
systems engineering business operating in the energy,
water, defence and mining industries.
This follows our acquisition of PlantWeave in 2021 and further
expands our industrial automation and technology-based
infrastructure offering for our clients who are increasingly
moving towards technology-driven solutions.
As we embark on the new financial year, we have a strong
operational platform, a strengthened executive and senior
leadership team, and a continued commitment to our
strategic initiatives.
The outlook for Saunders and the markets we operate in is
positive. We are well-positioned to leverage the significant
pipeline of opportunities before us and continue on our
growth trajectory.
We are focused on delivering quality outcomes for our clients
and safe outcomes with on-time delivery and on budget.
This commitment will underpin the strength of our financial
performance in the years ahead.
Thank you to our shareholders for your ongoing support
and to the entire Saunders team for your commitment and
valuable contributions throughout 2023.
I am genuinely excited about the year ahead and look
forward to sharing the stories of our progress, our people,
and our projects with you.
We continue to assess various opportunities to diversify and
grow our operations and provide increased earnings to the
Group and shareholders through acquisitions.
Mark Benson
Managing Director and Chief Executive Officer
Saunders International
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Annual Report 2023 At Saunders, our core value
of ‘Zero Harm’ forms the
foundation of our safety
culture and underpins
our commitment to the
wellbeing of our people,
subcontractors, and the
communities we operate in.
It is our promise to our people
and their loved ones, and our
number one priority.
2023 HIGHLIGHTS
Achieved a strong safety performance, with a
(‘TRIFR12’) metric of 1.68
This year’s TRIFR12 metric represents a
13% improvement on 2022’s TRIFR, which
was 1.93. Unfortunately, we recorded a lost-
time injury this year after maintaining a zero
lost-time injury record for over 4.3 million
hours in 2022
Received client recognition for our outstanding
safety performance during this period
By investing in our safety culture, proactively managing
the risks associated with our operations, and continually
reviewing Workplace Health and Safety Standards, we’re
continuing to deliver a strong safety performance.
Celebrated our team members that
champion safety in the field through project-
based awards
We’re also continuing to invest in proactive initiatives to
keep our people safe and healthy today and in the years
ahead. Because we know we have no greater responsibility
than to ensure everyone gets home safely at the end of their
day’s work.
Conducted a program of executive team site
visits and engagement with team
Utilised industry-leading safety equipment,
including Powered Air Purifying Respirators
(PAPR) welding helmets
1010
Annual Report 2023
Safety FEDERAL SAFETY COMMISSIONER
ACCREDITATION
This year, we qualified for the Australian Government Building
and Construction WHS Accreditation Scheme, the highest
standard for workplace health and safety in Australian
construction projects.
This accreditation is facilitated by the Office of the Federal
Safety Commissioner (OFSC) and is designed to improve
workplace health and safety practices in our industry.
We’re proud to have received formal Federal Safety
Commissioner Accreditation on July 17, 2023. This will
enable us to tender directly for larger government funded
projects in the future.
is proud to be accredited under
the Australian Government
Building and Construction WHS
Accreditation Scheme.
2024 FOCUS AREAS
In 2024, our primary objective is to strengthen our safety
culture, emphasising leadership behaviour and encouraging
ownership of risk at all organisational levels.
We are committed to investing in building our team’s
capabilities to ensure a safer workplace, including the
rollout of an upcoming safety leadership and attitudes
program in 2024.
We will continue to emphasise mental health, workplace
culture and environmental compliance.
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Meet the team that leads our business, working together
to deliver successful outcomes for our people, clients,
shareholders, and communities each and every day.
Executive Management Team
Mark Benson
Managing Director and
Chief Executive Officer
Brett Gregory
Chief Financial Officer and
Company Secretary
Angelo De Angelis
Chief Operating Officer
With an executive career spanning
over 30 years, Mark Benson is a
seasoned leader in the engineering and
construction industry.
Prior to joining Saunders, Mark served
as the General Manager of RCR Energy,
a division of ASX-listed RCR Tomlinson.
He also held senior executive positions
with RICO, HIS Engineering, VRBT
Group and major utility alliances
including AGL, Origin, and NRG.
Mark was appointed as Managing
Director and a Director of the Saunders
Board in 2015.
Brett is an accomplished financial
leader and was permanently appointed
Saunders’ Chief Financial Officer
and Company Secretary in August
2023. This follows his initial interim
engagement as interim Chief Financial
Officer from 9 January 2023 and his
appointment as Company Secretary
from 28 February 2023.
Prior to joining Saunders, Brett spent
18 years at Lendlease in various
Executive and General Manager roles
in Finance, including five years as the
Chief Financial Officer for Lendlease’s
Australian Construction business.
Angelo De Angelis brings a wealth of
executive and industry experience to
his role as Chief Operating Officer
at Saunders.
Prior to joining Saunders in 2021,
Angelo worked at Ventia for over 25
years, including acquired organisations
Broadspectrum and Transfield.
In this time, Angelo held various senior
and executive management roles in
Australia and the US including
Head of Strategy and Development,
President - Transportation Infrastructure
US, and Executive General Manager,
Resources and Energy.
Annual Report 2023
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Annual Report 2023Leadership Senior Management Team
Trevor Walker
General Manager, Growth and Innovation
Kala Notley
People and Capability Manager
Claude Poffandi
General Manager, Commercial
Rick Burke
General Manager, Engineering
Construction
Jonathon Bromilow
General Manager, Saunders Civilbuild
Waleed Mansour
Operations Manager, Asset Services
Eric Collins
Operations Manager, Defence Programs
Robert Harvey
General Manager, Saunders PlantWeave
Geoff Bladon
General Manager, Saunders AIT
Frank Kraft
General Manager, Business
Development and Strategy
Wayne Mastello
SHEQ Manager
Anthony Templeton
General Manager, Operations
Saunders AIT
Muhammad Sharim
HSE Manager
Please note: Board Members biographies are featured on page 95.
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Annual Report 2023 We’re recognised for
our commitment to
safety, collaborating
with our clients to find
new and smarter ways
to support them, and
coming together as
‘One Team’ – because
we know we’re
stronger when we work
together to achieve
our goals.
At Saunders, we strive to be an inclusive, flexible,
encouraging and diverse environment for all our people. We
invest in our people because we believe it makes our team
stronger and better equipped to deliver on our promise of
innovation, growth, and excellence.
We’re passionate about giving back to communities where
we work and to which we belong, both through our projects
and as a part of broader group-wide initiatives.
2023 HIGHLIGHTS
Enhancing our employee benefits offering
including development of learning and
development capabilities and career
progression strategies
Launching an Employee Referral Program to
boost our talent finding power
Contributing to the community through
fundraising challenges and charitable events
Congratulating and rewarding our team from
5-40 years of service
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People and Capability 2024 FOCUS AREAS
Continued focus on developing, retaining and
attracting talent, setting up our teams up to
match our strong pipeline
Implementing a new employee value proposition
which includes benefits such as parental leave,
wellbeing days, professional development
opportunities and cost-of-living discounts
Investing in continuous improvement in
diversity and inclusion
OUR VALUES
Guiding our behaviours and underpinning our culture are our
core values:
Zero Harm We are committed to the practice
of Zero Harm behaviour at work and at home
One Team We are better together when we
collaborate with each other and our customers
Excellence We commit to delivering
excellence in everything we do
Innovation We continually challenge ourselves to
create innovative solutions for our customers
Integrity We hold ourselves to the highest
standards and deliver on our commitments
Respect We act with respect to our people,
customers, communities and the environment
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Our clients appoint us to manage
complexity, drive delivery, provide
long-term strategic value, and develop
innovative solutions. Together, we
establish a foundation of trust and
collaborate together to achieve
excellent project outcomes, enjoying
the journey along the way.
We take pride in nurturing enduring partnerships, and
our repeat clients are our ultimate performance indicator.
Remarkably, we still work with clients who have been with us
since the 1960s, including Mobil, bp, and Ampol.
We’ve long been regarded as one of Australia’s best tank
builders. However, as our business continues to grow and
evolve, so does our service model.
We’ve taken the time to listen to what’s most important to
our clients, not only to meet their current needs but also to
understand their future requirements.
We’re investing in our front-end design engineering and
operational capability. We’re proud to now be able to provide
our clients with a one-stop multidisciplinary integrated
offering across Engineering Construction, Civil, Asset
Services, and Automation. The acquisition of Automation IT
in 2023 will further enhance our capabilities across industrial
automation and technology solutions and further enable our
integrated service offering.
We continue to expand into new regions and markets
to support the business interests of national and
international clients.
CURRENT KEY CLIENTS
Ampol
Ausgrid
Australian Department
of Defence
bp
CPB
John Holland
Laing O’Rourke
Lendlease
Mobil
Origin Energy
Quantem
Seymour Whyte
Sydney Water
Thiess
TransGrid
Veolia
Viva Energy
Local Government
Councils across NSW
Annual Report 2023
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Annual Report 2023Client Focus PROJECT PROFILE
CLIENT FEEDBACK
Now that works are
complete, I would once again
like to thank you and your team
for all of the great work. The
final weeks of the project saw
many different activities being
completed in a limited amount of
time, all completed safely and to
a high standard.
Over the last couple of months
we have seen all of the Saunders
team roll up their sleeves and do
what needed to be done to bring
this project home. The end result
was a product that we can all be
proud of.
Your management of the project
has been strong throughout,
working hard behind the scenes
to ensure the best outcome for
your client. Thank you.
Project Manager
Australian Fuel Major, QLD.
June 2023
Pelican Point Terminal
Client
Value
Quantem
$44 million
Location
Adelaide, SA
Date secured
July 2023
Operational Area
Construction
This project is a great example of the innovation and
high‐quality, fast‐tracked results that can be achieved
with early collaboration between client and contractor.
In 2023, Saunders’ multi‐disciplinary in‐house
engineering and operational teams worked closely with
long-term and repeat client Quantem to value engineer,
optimise constructability and conduct a full lifecycle
analysis on a critical new project at Quantem’s Pelican
Point terminal in Adelaide.
Together, we were able to proactively manage risk and
unlock extra value for our client as they looked to more
than double diesel storage capacity at the site – it was a
fantastic result and an impressive team effort.
We announced the $44 million contract win in July
2023. The scope of work includes detailed design,
procurement, construction, fabrication, installation,
and commissioning of three 30,000 cubic metre diesel
storage tanks and associated structural, mechanical
and piping infrastructure, adding significant new diesel
storage capacity for the fuel industry in South Australia.
The project is supported by Quantem’s successful funding
application under the Australian Government’s Boosting
Australia’s Diesel Storage Program. Investing in Australia’s
diesel storage capacity will help protect against future
supply chain disruptions and will help the industry to meet
new minimum stockholding obligations introduced as one
of the measures in the Fuel Security Act (2021).
This safeguard is essential for Australia’s energy security
as diesel currently underpins our critical infrastructure,
transport and industries, as well as the ability to respond
to critical emergencies.
Construction is set to begin on site in Q4 calendar 2023,
with the site commissioned by Q2 calendar 2025. The
project will contribute to Saunders’ revenue and earnings
in 2024 and 2025.
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Annual Report 2023 Our operating model
is underpinned by 73
years of construction and
engineering expertise and
further strengthened by
our ongoing investment in
innovation, pioneering of
new world-class solutions.
At Saunders, we’re focused on finding new and better
ways to do things. In fact, innovation is one of our core
values – it’s in our DNA.
We’re focused on continual improvement, working with
our clients and project partners to solve problems and
create opportunities.
These solutions, along with our learnings from
developing them, are shared with our teams to support
extended utilisation wherever possible.
CURRENT EXAMPLES
Leading the way in geodesic
dome roof construction and
installation
We are the premier Australian contractor for constructing
and installing geodesic dome roofs for storage tanks, with
12 roofs installed in 2023.
In May, we successfully completed our largest-ever
geodesic dome roof lift, using a 600-tonne crane to position
the circa 52-tonne roof atop an existing 64-metre-wide tank.
We are especially proud of our team for accomplishing this
remarkable lift and are grateful for the positive feedback we
received from our long-term client regarding this project.
Using a unique tank jacking
and rotating system on our
projects
We employ a unique system for constructing tanks when site
conditions limit the use of traditional construction methods.
We are the sole company in the region utilising the jacking
and rotating system, which allows us to construct tanks
from the top down, including the roof first, and then jack
each completed strake into place.
The jacking process for the tank enables simultaneous
rotation of the entire tank, effectively creating a single work
front for constructing the strakes, welding, and painting.
This system significantly enhances productivity and safety,
especially on compact sites where existing infrastructure
precludes the use of traditional cranes and adjacent
laydown areas in close proximity to the tank’s location.
Annual Report 2023
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Annual Report 2023Innovation We continually
challenge
ourselves
to create
innovative
solutions for
our customers
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Annual Report 2023 We recognise that every decision
and action we take is an opportunity
to make a positive impact on the
people and the world around us.
We are proud to be a strategic
enabler of our client’s bold
sustainability initiatives and as we
support them on their journey,
we’re also learning and defining
our own Environment, Social and
Governance targets.
We’re fortunate to be working with leading organisations
including bp, Ampol and Lendlease, supporting them to
not only deliver their projects, but also achieve their bold
sustainability targets.
We’re doing this through repurposing and repositioning
assets, supporting carbon reduction initiatives, and aiding
sustainable and ethical procurement.
We’re also leveraging their plans and learnings as we
embark on our own sustainability journey, focused on
meeting the expectations of our people, our investors and
our communities.
KEY FOCUS AREAS IN 2024
Environment
Helping clients to achieve their sustainability targets.
Growing our commitment to environmental sustainability.
Setting our own carbon reduction targets and plan.
Continued focus on environmental protection and
enhancement.
Social
Creating value through our local and diverse supply chain.
Engaging and respecting the communities we work in.
Increasing procurement activity with Aboriginal and
Torres Strait islander businesses.
Investing in continuous improvement in diversity
and inclusion.
Governance
Embedding sustainability in our
decision making.
Building trust in our sustainable business practices.
Advancing sustainable and ethical procurement.
Annual Report 2023
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Annual Report 2023Sustainability
OPERATIONS UPDATE
PROJECT PROFILE
Kwinana Renewable
Fuels project
Client
Value
bp
$42 million
Location
Kwinana, WA
Date secured
June 2023
Operational Area
Asset Services
We’re particularly proud of our Kwinana Renewable Fuels
Project win this year. Not only because it’s the largest project
ever awarded to our Asset Services operational area, but
also because of its bold sustainability ambitions.
We’re refurbishing and modifying 25 tanks so they can be
used for feedstock or biofuels storage, helping to repurpose
bp’s former refinery site at Kwinana into a new integrated
energy hub.
The project plans to reutilise some infrastructure at the bp
Kwinana site to produce lower-carbon fuel products that
have the ability to support the decarbonisation of aviation
and heavy industry. The project is subject to regulatory and
State government approvals.
The project commenced in July 2023 and will contribute to
Saunders’ revenue and earnings from 2024 to 2026.
The Kwinana project is the first
of its kind globally for bp and a
first for Australia. Our work will
help bp produce sustainable
aviation fuel and renewable
diesel, supporting their net zero
sustainability ambitions.
21
21
Annual Report 2023 Though Saunders boasts a rich history as one of Australia’s
premier bulk liquid storage and geodesic dome construction
contractors, our business has significantly evolved from its
modest origins 73 years ago. Today, we stand as leaders
in executing construction projects for blue-chip and
government clients.
We provide our clients with a scalable model and a
multidisciplinary integrated team. The Saunders ‘one-stop
shop’ draws from our pool of expert talent and resources to
carefully guide the project from initial feasibility through to
engineering and construction, commissioning and handover.
Our scalable model provides
us with the agility and
flexibility to deliver projects of
all shapes and sizes across
our key disciplines, sectors,
and regions.
OUR SERVICES
y Front End Engineering Design (FEED)
y Structural Mechanical & Piping design
y 3D drafting of large fuel terminals
y Control system design and implementation
y Network design and implementation
y High Voltage and Low Voltage electrical design and
implementation
y Engineering, Procurement and Construction (EPC) &
Engineering, Procurement, Construction and Management
(EPCM) services
y New tank builds for bulk fuel and chemical storage
terminals
y Water reservoirs and pumping stations
y Tank Jacking technology (top down construction)
Annual Report 2023
22
22
Annual Report 2023Engineering Construction OPERATIONS UPDATE
2023 HIGHLIGHTS
PROJECT PROFILE
$44 million contract to deliver the Western
Sydney International (Nancy Bird Walton)
Airport Aviation Fuel Terminal for Multiplex in
NSW (secured October 2022)
$9.0 million contract to design and construct
a new diesel storage tank for Park Fuels at
Kooragang Island, Newcastle, NSW
(secured October 2022)
$8.5 million contract with Nova Nacap
Joint Venture to design and construction two
bulk liquid storage tanks in Katherine, NT
(secured December 2022)
Delivery of 11 jet fuel storage tanks with
a capacity of 300 megalitres for the US
Defence in Darwin, NT
Significant progress at our $31 million
Defence Fuel Infrastructure project for Laing
O’Rourke, a part of the Larrakeyah Defence
Precinct Redevelopment Program in Darwin,
NT (due for completion December 2023)
Western Sydney International
(Nancy Bird Walton) Airport
Client
Value
Multiplex
$44 million
Location
Luddenham, NSW
Date secured
October 2022
Operational Area
Construction and Automation
In late 2022, we were awarded a significant contract to
build the aviation fuel terminal at the new Western Sydney
International Airport, now also known as Nancy Bird Walton
Airport for Multiplex.
The project brings together an integrated Saunders team
across both Construction and Automation, reinforcing our
ability to leverage multi-disciplined solutions to deliver
operational excellence for our clients.
Our scope includes the design and construction of:
y three aviation fuel storage tanks
y the aviation fuel terminal’s mechanical piping, valves,
pumps, filters, instrumentation, and controls
y the aviation fuel terminal’s electrical services, including
cabling and switchboards, SCADA electrical, and controls
The project will contribute to our revenue and earnings in
2023 and 2024.
23
23
Annual Report 2023 PROJECT PROFILE
Port Macquarie
Bridges Project
Client
Value
Port Macquarie Hastings Council
$11.2 million
Date secured
May 2023
We are proud to build upon our strong track record as
trusted partners for Port Macquarie Hastings Council with a
new contract. This project involves the replacement of five
existing timber bridges with concrete bridges.
The project is scheduled for completion over a 12-month
period. Once completed, the new concrete bridges will
reduce future ongoing maintenance costs for the Council
and increase connectivity by allowing increased vehicle
load limits.
The project is being funded by Council and Transport for
NSW under the NSW Government’s Fixing Country
Bridges Program.
The project will contribute to our revenue and earnings
through 2023 and 2024.
With over five decades of experience, our Civil team
has earned a stellar reputation in the industry for our
multidisciplinary approach to bridge design and construction.
Beyond bridges, we excel in concrete construction projects,
including wharves and jetties, foundation projects, culvert
installations, and rail works.
We are trusted by Tier-1 contractors for their complex and
precision precast requirements. Our purpose-built precast
facility specialises in pre-stressed bridge girders, Super T’s,
and specialty precast items, with a production capacity of
over 200 metres per day at full capacity.
OUR SERVICES
y Road and rail bridge construction
y Marine structures
y Precast fabrication
y Concrete foundation systems
y Manufacturing of complex Super T and planks for
infrastructure projects
y Excavation and installation of support structures
y Road works
2023 HIGHLIGHTS
$11.2 million contract with Port Macquarie
Hastings Council to replace five existing
timber bridges with concrete bridges
(secured May 2023)
Significant progress on our biggest civil
project to date: the delivery of precast Super
T girders for the Sydney Gateway project, for
John Holland and Seymour Whyte
Successful completion of the Boston Street
Bridge replacement in Boggabri for Narrabri
Shire Council
24
24 Annual Report 2023
Civil OPERATIONS UPDATE
We’ve earned
a reputation for
successfully
delivering
challenging civil
projects using
innovative design
alternatives and
construction
methods, on time
and to budget.
25
Saunders are at the forefront of providing asset services,
with a specialised focus on inspection, repair, modification,
and maintenance solutions. Our expertise lies in reviving and
revitalising our clients’ assets, enhancing their condition and
availability, right through the asset’s lifecycle to decommission.
We recognise the critical importance of timely rehabilitation
and preservation of our clients’ assets and infrastructure and
ensuring the uninterrupted flow of their business operations.
Our expertise extends beyond the oil and gas, bulk fuels,
power generation, mining, and resources sectors; we also
excel in remediation projects involving bridges, marine
structures, and water infrastructure.
Our Asset Services work provides
stable recurring revenues from
long-term, blue-chip clients
including Ampol, bp, Chevron,
Mobil, Quantem, Viva Energy
and Vopak.
OUR SERVICES
y Repair and maintenance of bulk liquid and chemical
storage tanks
y Asset management services
y Industrial boiler work
y Plant and facility shutdowns and decommissioning
y Facilities maintenance
y Shutdowns and upgrades
y Structural Mechanical Piping installation
y Pump and valve overhauls or replacements
y Pressure welding
y Electrical and automation upgrades
Annual Report 2023
26
26
Annual Report 2023Asset Services OPERATIONS UPDATE
2023 HIGHLIGHTS
PROJECT PROFILE
$42 million contract to provide tank
refurbishment and modification services
for BP at its Kwinana Energy Hub in WA
(secured June 2023)
Significant progress in mechanical
modifications and supply and installation of
two aluminium geodesic dome roofs at BP’s
Bulwer Island fuel terminal, QLD with a total
value of over $9 million
Continuing delivery of our longer, cornerstone
contracts, including year three of our
five-year maintenance program for Mobil in
Altona, Yarraville VIC with expected revenue
of over $13 million in 2023
Continuing to support Viva Energy with their
tanks maintenance program across Australia,
currently executing maintenance projects
in three locations, Gore Bay NSW, Newport
VIC and Townsville Qld with a total combined
revenue of $12 million
Continuing our ongoing support for
Ampol in both Lytton Refinery and Kurnell
Terminal delivering large number of tanks
modifications projects for a combined value
of over $8 million in 2023
Viva Gore Bay
Client
Value
Viva Energy
$5.7 million
Location
Gore Bay, NSW
Date secured
July 2022
We’ve been trusted by repeat client Viva Energy to help
maintain one of their important projects; 70-year-old Tank
6030 at the iconic Gore Bay Terminal on Sydney Harbour.
The much-loved tank is getting some much-needed TLC.
We’re replacing the floor and bottom strake and installing
a concrete reinforced ring beam as part of our preventative
maintenance program to ensure the tank continues to reliably
service the Sydney market for many decades to come.
At 36m in diameter and 14m high, Tank 6030 holds
approximately 9,000m3 of heavy marine fuel oil (50% of Gore
Bay’s capacity), making it a crucial part of the infrastructure
to supply the cruise ship market.
Located in a challenging spot between a 17m high
sandstone cliff to the West and the iconic Sydney Harbour
to the East, a tower crane had to be utilised to access the
difficult work front.
Repairs are progressing very well and we’re estimating it to
be ready just in time for the upcoming cruise season in
early 2024.
27
27
Annual Report 2023 As our clients increasingly embrace technology-driven
solutions for their infrastructure and operations, we ensure
that their projects and facilities operate at peak efficiency,
productivity, reliability, and safety through our specialised
industrial automation services.
Our team excels at auditing and streamlining processes,
integrating Information Technology (IT) and Operational
Technology (OT) systems, boosting output, enhancing
efficiency, and ensuring overall process quality, enabling our
clients to achieve key production goals.
We provide cutting-edge automation and energy
management services to commercial, industrial and data
centre clients. Our services include round-the-clock
emergency support, cybersecurity, continuous control system
enhancements, troubleshooting, maintenance, remote
monitoring, as well as intuitive and tailored dashboard and
reporting solutions.
The acquisition of Automation
IT will accelerate Saunders’
market expansion into
Industrial Automation and
Control Systems, building on
our acquisition of PlantWeave
in 2021.
OUR SERVICES
y Operational Technology
y Industrial automation solutions
y Networking and OT cybersecurity solutions - auditing and
hardening to ISA/IEC Standards
y Electrical engineering and control system design
y Control system and telemetry upgrades
y Electrical Panel manufacturing, testing and installation
y Machine learning and statistical/physical process
modelling
y Functional safety of machinery - design and auditing
y Asset and inventory management
y Energy management systems and automated meter
reading systems
y Instrumentation selection, installation and calibration
y Plant commissioning
y Process optimisation
y Preventative maintenance
y Data centre monitoring
2023 HIGHLIGHTS
Automation IT acquisition
In May 2023, we welcomed Automation IT, a specialist
automation and control systems engineering business
operating in the energy, water, defence and mining industries
to the Saunders team.
This follows our acquisition of PlantWeave in 2021 and
further expands our industrial automation and technology-
based infrastructure offering for our clients who are
increasingly moving towards technology driven solutions.
Automation IT and PlantWeave have commenced the
integration of their team and operations to form
Saunders Automation.
28
Annual Report 2023
Automation
OPERATIONS UPDATE
PROJECT PROFILE
PROJECT PROFILE
Barangaroo South
Client
Lendlease
Location
Barangaroo, NSW
Gatton Prison complex
infrastructure
Client
Confidential
Location
Gatton, QLD
Operational Area
Saunders PlantWeave (now Automation)
Operational Area
Automation IT (now Automation)
Lendlease has trusted our expert industrial automation
team at Barangaroo South, Australia’s first carbon-neutral
precinct, since it was first constructed in 2015.
We’ve successfully delivered the OT solutions that not only
provide chilled water for air conditioning, but also critical real-
time analysis and automated system responsiveness, ensuring
the precinct continues to achieve carbon neutral and water
positive outcomes.
We continue to expand, optimise and support this incredible
subterranean infrastructure across the:
y 62MW District Cooling Plant (DCP)
y Recycled Water Plant
y High Voltage Embedded Electrical Network
y Implementation and monitoring of an ISA/IEC
62443-based Cybersecurity Solution
Currently, we are engaged in full electrical, instrumentation,
and controls, as well as mechanical commissioning,
to expand the DCP to service the residential towers at
One Sydney Harbour.
Our Gatton Prison complex infrastructure project is a crucial
component of the Southern Queensland Correctional
Precinct, a two-stage expansion and upgrade initiative.
The project includes the construction of a new 1,500-cell,
high security facility for male prisoners in Gatton, in order
to address growing demand for correctional facilities in
Queensland over the next three to five years.
We were appointed to deliver the design, supply,
programming, testing and commissioning of power Network
Control System, generator control and Energy Management
System and Sewage Treatment Plant control system.
We are able to provide a diverse range of technical
solutions to handle all the power, water and sewage
control requirements.
29
Our focus remains on
pursuing key clients and
excelling in our core
sectors while identifying
opportunities in growth
markets such as Defence,
Water, and New Energy.
We are actively pursuing
projects in new regions,
including New Zealand,
and reviewing opportunities
for further geographic
expansion.
DEFENCE
We’re seeing direct outcomes and significant progress
following investment in our Defence sector strategy and
specialist resources this year.
In December 2022, we were awarded a $8.5 million
project by the Nova Nacap Joint Venture in the Northern
Territory. Our ability to tender directly and compete at
scale within the Defence sector has been bolstered
by securing our Defence Industry Security Program
(DISP) accreditation and finalisation of Federal Safety
Commissioner (FSC) accreditation.
We are well-positioned to benefit from increased
momentum and spend in the Defence sector as projects
are brought to market in early 2024.
WATER
Saunders has a long history in the design, construction,
and maintenance of bulk water storage tanks and
reservoirs. In 2023, we were appointed to design and
construct a two-megalitre column-supported tank for
Fulton Hogan in Victoria – considered a core service
offering for our organisation.
However, our capability in the water sector has grown
following the recent acquisitions of PlantWeave and
Automation IT, and formation of our Automation
business unit.
This additional capability and client offering, along
with increased capital investment in the sector, have
heightened our focus on this market.
We are well-positioned to secure a new Government-
funded water project in Queensland, to be formally
awarded in early 2024.
Annual Report 2023
30
30
Annual Report 2023Growth Markets NEW ENERGY
PROJECT PROFILE
Fuelled by technological advancements and a growing global
sustainability movement, the new energy sector is rapidly
transforming the global energy landscape.
Nova Nacap
Several clients are increasing their attention to this sector, not
only because it addresses environmental concerns, but also
due to governments’ heavy investments in renewable energy
projects, which present economic opportunities, foster
innovation, and create jobs.
Client
Value
Nova Nacap Joint Venture
$8.5 million
We’re currently working with several fuel majors, energy
majors and key clients, including bp, Ampol, and UGL on
new energy projects and anticipate significant future growth
in this sector.
Location
Katherine, NT
Date secured
December 2022
GEOGRAPHIC GROWTH
We currently have a strong geographic presence across New
South Wales, Queensland, Victoria, Western Australia, South
Australia, Northern Territory and Papua New Guinea.
We’re building a new presence in New Zealand and
will explore additional regions to follow key clients and
opportunities when they align with our strategic direction.
Operational Area
Construction
Our scope of work for this project includes the design and
construction of two 4-megalitre aviation fuel tanks at RAAF
Base Tindal in Katherine, NT.
It is subcontracted through the Nova Nacap Joint Venture,
which is contracted to the Naval Facilities Engineering
Command (NAVFAC) Pacific, US Department of Defence.
The project continues to strengthen our relationship with
the repeat client Nova Nacap, while also enhancing our
capability and track record within the Defence sector.
This project will contribute to Saunders’ revenue and
earnings through 2023 and into 2024.
31
31
Annual Report 2023 32
Annual Report 2023 Governance,
Financial
Report and
Other
Directors’ Report ................................................... 34
Auditor’s Independence Declaration ..................... 46
Auditor’s Report .................................................... 47
Directors’ Declaration ............................................ 51
Financial Report .................................................... 52
Corporate Governance .......................................... 92
Shareholder Information ........................................ 94
Board of Directors information and profiles .......... 95
Corporate Directory ............................................... 96
33
Annual Report 2023 The Directors present their report on Saunders International
Limited (“Saunders” or the “Group”) for the financial year
ended 30 June 2023 and the independent audit report
thereon. In order to comply with the provisions of the
Corporations Act 2001, the Directors report as follows:
DIRECTORS
The Directors as at the date of this Directors’ Report are:
y Timothy Burnett (retired as Chairman 30 June 2023)
y Mark Benson
y Greg Fletcher
y Nick Yates (appointed Chairman 1 July 2023)
y Brendan York (appointed 24 July 2023)
Unless stated otherwise the above-named directors held
office during the whole of the financial year and since the end
of the financial year up the date of this report.
COMPANY SECRETARY
Rudy Sheriff was the Company Secretary during the period
1 July 2022 to 28 February 2023 when he resigned and left
Saunders. Brett Gregory has been the Company Secretary
from the date of his appointment on 28 February 2023 up to
the date of this report. Brett is also Saunders Chief Financial
Officer; he is a Chartered Accountant and holds a Bachelor of
Commerce from the University of Wollongong.
PRINCIPAL ACTIVITIES
Saunders is a multi-disciplined engineering and construction
company. During the financial year, the principal activities
of the Group involved providing design, fabrication,
construction, shutdown, maintenance, and industrial
automation services to leading organisations across Australia
and the Pacific Region. The Group performs these activities
across the oil & gas, infrastructure, water, power, new energy,
mining & minerals, and defence sectors.
REVIEW OF OPERATIONS
A summary of the revenues and results is as follows:
Revenue
Profit before income tax
Income tax expense
Profit attributable to the members of Saunders International Limited
Reconciliation of profit before income tax to EBITDA (unaudited):
Profit before income tax
Add:
Net interest expense
Depreciation of owned and hire purchase assets
Depreciation of right of use assets
EBITDA
2023
$’000
200,886
14,151
(4,660)
9,491
2023
$’000
14,151
265
1,800
1,236
17,452
2022
$’000
129,955
9,379
(2,828)
6,551
2022
$’000
9,379
106
1,590
656
11,731
Saunders’ revenue for the year was $200.9 million, an
increase of $70.9 million or 54.5% (2022: $130.0 million).
The net profit after tax was $9.5 million, an improvement of
$2.9 million or 43.9% (2022: $6.6 million), EBITDA was
$17.5 million, an improvement of $5.8 million or 49.6%
(2022: $11.7 million).
Earnings per share for the year was 8.84 cents (2022:
6.24 cents).
Saunders has strengthened its financial position at year end
with net assets of $39.3 million, an increase of $7.3 million
or 22.8% (2022: $32.0 million). At year end, the Group only
had interest-bearing loans relating to leases. We anticipate
cash will improve from $12.8 million at 30 June 2023 (2022:
$36.7 million) upon finalising Project Caymus contract
closure with our client in the coming months. With growth
in larger project activity expected to continue into 2024,
realisation of project margins will also further strengthen the
Group’s cash reserves.
34
Annual Report 2023Directors’ Report DIRECTORS’ REPORT (cont.)
The record revenue performance of the Group over the past
12 months is due to a combination of strong operational
execution of projects across the Group and increased
opportunities in the markets within which the Group operates.
Key Highlights
y Safety performance remained strong in 2023 even as we
grew our employee numbers to record levels through the
delivery of Project Caymus, achieving a TRIFR121 metric
of 1.68 (2022: TRIFR12 1.93).
y The Group gained the Federal Safety Commissioner
(FSC) and Defence Industry Security Program (DISP)
accreditations during the last 12 months. This will enable
us to tender for larger head contract infrastructure and
defence projects funded directly or indirectly by the
Australian Federal Government.
y Saunders announced the acquisition of Automation
IT in May 2023 which will further expand and diversify
our operations into technology‐based infrastructure
(following the August 2021 acquisition of PlantWeave)
and further expand Saunders’ capabilities across
industrial automation and technology solutions.
y Secured three projects with values in excess of $40m
each in the last 12 months, including the Western
Sydney Airport Aviation Fuel Terminal for Multiplex, bp’s
renewable fuels tank refurbishment project at Kwinana
in Western Australia and a project for Quantem to more
than double diesel storage capacity at its Pelican Point
terminal in Adelaide, South Australia.
y Leading Australian contractor for the construction and
installation of geodesic dome roofs for storage tanks,
with 12 roofs installed over 2023.
y Secured a $10 million increase to the Bank Guarantee
facility since 30 June 2022. The now $40 million limit
across our bank guarantee and surety facilities will
support our current order book and the strong pipeline
of opportunities.
y Continued focus on Environmental, Social and
Governance matters across the Group
1TRIFR12 is the number of occurrences of injury for each 200,000 hours worked.
OUTLOOK
Saunders Work in Hand at 30 June 2023 was $159.1 million
(2022: $192.9 million) and had increased to $201.0 million
at 31 July 2023. Tendering activity shows the value of live
tenders as at 31 July 2023 was $442 million, while the
pipeline (yet to be tendered) is at $1.2 billion. This strong
pipeline of opportunities reflects the Group’s diversification
across each of the operating sectors and represents a mix of
new and existing customers.
We will continue focusing on our strategic growth trajectory
and delivering on that growth. This includes increasing
our support of the Defence, Oil and Gas and Infrastructure
sectors, while positioning the company to increasingly secure
opportunities in the New Energy sector. As this sector grows,
Saunders will be ready to provide the comprehensive, full
asset lifecycle solutions that will be required.
The acquisition of Automation IT in 2023 will further enhance
our capabilities across industrial automation and technology
solutions and contribute to Saunders’ increasing ability to
provide fully integrated service offerings to our clients.
After bolstering our project delivery and executive teams
with experienced personnel during 2023, we start the new
year well positioned to take advantage of opportunities
across our services and sectors. Our disciplined approach
to contracting is ensuring our projects are protected from
the risks of increasing costs, constrained logistics and
inclement weather.
EMPLOYEES
The Group’s total workforce managed by Saunders was 422
at 30 June 2023 (2022: 352). Saunders remain focused on
investing in people and capability to ensure the achievement
of our vision and strategic objectives.
The directors wish to take this opportunity to thank the
entire Saunders Team for their continued dedication in
safely delivering the financial results through another
challenging year.
SAFETY & ENVIRONMENT
The Group is committed to the safety of our people, clients
and the communities in which we operate. During the year,
Saunders TRIFR12 was 1.68, a 13% improvement over the
prior year (2022: TRIFR12 1.93). The Group recorded a lost
time injury in 2023, after reporting in 2022 a zero lost time
injury free record for in excess of 4.3 million hours.
The environment remains a key focus for the Group, and
we will be focusing heavily on improving our sustainability
and climate change initiatives in the next year. The Group
recognises the material environmental and social risks that
are relevant to its activities and takes action to manage those
risks. Working with major international organisations including
bp, Ampol and Lendlease provides the ability to not only
support them to achieve their bold sustainability targets, but
to have insight into their plans to do so. We’re leveraging
these learnings to define our own Environment, Social and
Governance sustainability targets across the Group.
EARNINGS PER SHARE
The basic and diluted earnings per share is calculated using
the weighted average number of shares. This shows the
basic earnings per share of 8.84 cents (2022: 6.24 cents) and
diluted earnings per share of 8.71 cents (2022: 6.07 cents).
35
Annual Report 2023 DIRECTORS’ REPORT (cont.)
DIVIDEND
The Board declared on 28 August 2023 that there will be a
final dividend payable of 1.0 cents per share fully franked and
special dividend of 1.00 cents per share fully franked (2022
1.00 cents per share final dividend and 1.00 cents per share
special dividend paid). Both dividends will be payable on 16
October 2023 with the record date for determining dividends
on 18 September 2023.
The board has previously decided to deactivate the (DRP)
Dividend reinvestment plan and it will not be offered in this
dividend payment.
DIRECTORS ATTENDANCE AT
MEETINGS
ATTENDANCE AT MEETINGS
The following table sets out the number of meetings in the year
to 30 June 2023, held during the period that the individual was
a director and the number of meetings attended.
Nick Yates
Timothy Burnett
Mark Benson
Greg Fletcher
Brendan York 1
Directors
Meetings
Audit and Risk
Committee Meetings
Remuneration
Committee Meetings
Held
Attended
Held
Attended
Held
Attended
8
8
8
8
-
7
8
8
8
-
4
4
4
4
-
4
4
4
4
-
3
3
3
3
-
3
3
3
3
-
1 Brendan York was appointed to the Board on 24 July 2023
Individual Directors and the Board also holds regular calls with the Managing Director and CEO and other executives to stay
abreast of current matters between meetings. These meetings, for example, may consider material transactions or projects,
and are held to support the decision-making of the full Board in relation to those matters. These update calls and meetings are
not included in the above table.
INFORMATION ON DIRECTORS
Information on the directors who held office during and since the end of the financial year is as follows:
Directors
Nick Yates
Qualifications, Experience and Special Responsibilities
Non-Executive Director up to 30 June 2023
Non-Executive Chairman from 1 July 2023
Member of the Audit & Risk Committee
Member of the Remuneration Committee
Director since 16 September 2020
36 years of relevant industry experience
BE
Other listed company directorships in the last 3 years
y Chairman - BSA Limited
Relevant Interest in
Shares of Saunders
International Limited
35,211
36
Annual Report 2023 DIRECTORS’ REPORT (cont.)
Directors
Qualifications, Experience and Special Responsibilities
Timothy Burnett
Non-Executive Chairman until 30 June 2023
Relevant Interest in
Shares of Saunders
International Limited
11,686,311
Member of the Audit & Risk Committee
Member of the Remuneration Committee
Director since 28 November 1990
BE, MBA
50 years of relevant industry experience
Other listed company directorships in the 3 years immediately before the end of
the financial year – Nil
Mark Benson
Managing Director from 5 October 2015
3,233,286
Director since 10 August 2015
AdvDipMan, AdvDipProjMgt, GAICD
30 years of relevant industry experience
Other listed company directorships in the 3 years
Immediately before the end of the financial year - Nil
Greg Fletcher
Non-Executive Director
5,599
Chairman of the Audit & Risk Committee
Member of the Remuneration Committee
Director since 1 July 2015
BCom, CA
y Chairman of the NSW Electoral Commission,
NSW eHealth/ HealthShare Audit and Risk Committees
y Member of the NSW Police Force and NSW Health Infrastructure Audit
and Risk Committees
Other listed company directorships
y Co Vice Chairman Yancoal Australia Limited
Other listed company directorships in the 3 years immediately before the
end of the financial year
y Director Yancoal SNC Limited
Greg was a Partner of Deloitte Touche Tohmatsu until 31 May 2009, and Deloitte
Touche Tohmatsu has been the registered auditor of Saunders since the year
ended 30 June 2007
Non-Executive Director
Member of the Audit & Risk Committee
Chairman of the Remuneration Committee
Director since 24 July 2023
Other listed company directorships in the 3 years Immediately before the end of
the financial year
y Big River Industries Limited (BRI)
y BSA Limited (BSA)
y BTC Health Limited (BTC) and
y Wingara AG Limited (WNR)
Other current appointments
y MitchCap Pty Limited (Non-Executive Director)
y NAOS Asset Management Limited (Portfolio Manager)
NIL
Brendan York
37
Annual Report 2023
Excellence
Innovation
Growth
38
Annual Report 2023 DIRECTORS’ REPORT (cont.)
AUDITED REMUNERATION REPORT
This remuneration report, which forms part of the directors’
report, contains information about the remuneration of
Saunders International Limited’s directors and its key
management personnel for the financial year ended 30 June
2023. The Remuneration Report sets out, in accordance
with section 300A of the Corporations Act: (i) the Group’s
governance relating to remuneration, (ii) the policy for
determining the nature and amount or value of remuneration
of key management personnel; (iii) the various components
or framework of that remuneration; (iv) the prescribed details
relating to the amount or value paid to key management
personnel, as well as a description of any performance
conditions; (v) the relationship between the policy and the
performance of the Group.
Key management personnel are the non-executive directors,
the executive directors and employees who have authority
and responsibility for planning, directing and controlling the
activities of the entity.
REMUNERATION POLICY AND
GOVERNANCE
The board of directors, through the Remuneration
Committee, review and approve remuneration of the
non-executive directors, the managing director and key
management personnel. Remuneration policy is determined
by the needs of the Group and the individual talents,
capabilities and experience of relevant executives, and the
need to attract and retain talent are considered important
factors in assessing remuneration.
NON-EXECUTIVE DIRECTORS
Non-executive directors are paid fees and, where applicable,
compulsory superannuation contributions. The current
fees are based on the level of fees for comparable listed
companies and were reviewed during the year.
The managing director has also participated in the Employee
Share Plan and the Performance Rights Plan. Mark Benson
holds 269,100 options within the Employee Share Plan and
967,282 performance rights under the Saunders International
Performance Rights Plan.
KEY MANAGEMENT PERSONNEL
Key management personnel are remunerated based on a
number of factors, including experience, qualifications, job
level and over performance of the company and individual.
The remuneration includes a variable short-term incentive
(STI), between 0%-60% of salary component. This incentive
rewards the key management personnel achieving; financial
and operational key performance indicators; progress with the
delivery of the Group’s business plan and strategic objectives;
and specific goals in relation to the development of people
within the Group and its profile within the business community.
Examples of key performance indicators measured to assess
STI for the Key Management Personnel and Managing
Director include:
y achievement of target work in hand levels at 30 June
of each year to ensure the sustainability of revenue in
subsequent years;
y targets set in relation to the achievement of the Group’s
business plan such as the diversification of the business
and entry into new markets; and
y targets set for safety performance based on Total
Recordable Injury Free.
These indicators form approximately 50% of assessable
STI with the remaining 50% focused on the Financial
Performance of the Group; EBIT and Cash at hand.
Key management personnel as disclosed on page 42 of
the remuneration report have participated in the Employee
Share Plan.
LONG-TERM INCENTIVE
The non-executive directors have not been granted options
and have not participated in the Employee Share Plan or the
Performance Rights Plan.
The board of directors have considered the issue of long-term
incentive as a component of the remuneration of executive
directors and key management personnel.
MANAGING DIRECTOR
The managing director is remunerated on a salary package
basis which is a component of a formal employment contract.
The salary package is considered to be appropriate for the
experience and expertise needed for the position and is
comparable to other similar sized companies and operational
areas of larger companies. The salary package contains
a fixed component and a variable bonus component. The
bonus is based on an annual performance appraisal as
conducted by the remuneration committee of the board of
directors. The performance is measured against a range of
objectives set annually by the board. The important objectives
are safety, quality, personnel development, quantitative Group
financial performance and certain other (subjective and
objective) criteria.
Saunders operates two Long-Term Incentive (“LTI”) plans,
which are described below:
y Employee Share Plan
y Performance Rights Plan
As of the date of this report a number of executive officers’
own shares in the Group or interests via the Employee Share
Plan and the Performance Rights Plan.
The breadth and depth of share ownership fosters an
alignment of objectives between shareholders and directors
and management of the Group.
39
Annual Report 2023 DIRECTORS’ REPORT (cont.)
AUDITED REMUNERATION REPORT (CONT.)
EMPLOYEE SHARE PLAN
Under the Employee Share Plan (ESP), the Group provides
interest free loans to employees to acquire shares in
Saunders International Limited, at a specified price per
share. The loans are secured by the shares acquired by the
eligible employees. The shares will vest and the loans will
be repaid, upon a specified anniversary of the issue of the
shares. If an eligible employee’s employment with the Group
is terminated prior to the specified anniversary of the issue
of the shares, the shares will be forfeited, and the Group
will be entitled to the total amount raised pursuant to the
divestment of the shares. The shares are accounted for as in
substance options.
Each employee share option converts into one ordinary share
of Saunders International Limited on exercise. No amounts
are paid or payable by the recipient on receipt of the option.
The options carry a right to dividends but not voting rights.
Options may be exercised at any time from the date of
vesting to the date of their expiry.
During the year no options were granted to Key Management
Personnel (CEO and CFO) under the ESP. The former CFO,
who was not a director, forfeited his interest in 141,460
shares under the ESP when he resigned from the Company
on 28 February 2023. In addition, other employees hold an
interest in 1,062,313 shares under the ESP.
PERFORMANCE RIGHTS PLAN
RTSR will be measured by comparing the Group’s TSR
over the measurement period with the TSRs achieved by
companies that are in a comparator group and remain listed
on the ASX. TSR is the percentage return generated from
an investment in a Group’s shares over the measurement
period assuming that dividends are reinvested into the
Group’s shares.
NEPSG will be assessed as the compound annual growth
rate (CAGR) reflected in the increase in normalised earnings
per share (EPS) from the base year (2022) for Tranche 20 and
(2023) for Tranche 22. Normalised EPS will relate to normal
operations and will exclude abnormal items as determined by
the Board in its discretion.
For the phase in tranches where the measurement period
is less than three years, performance will be evaluated by
the Board’s assessment of the establishment of strategic
foundations for superior TSR and NESPG over the long-term.
For future grants, it is currently intended that the qualitative
vesting conditions will be removed (but retaining TSR and
NESPG), and that measurement periods will be no shorter
than 3 years.
The vesting scale will be applied to the tranches subject to
objective measurement of Saunders performing relative to
the comparator group and NEPSG, as appropriate, with the
vesting scale ranging continuously from 0% for very poor
performance to 100% for very good performance with 50%
for on-target performance.
The Saunders International Rights Plan was approved by the
Board and approved by shareholders at the Annual General
Meeting in November 2015.
The long-term incentive is aimed at aligning remuneration
with the longer-term performance of the Group and retaining
the long-term services of the key management personnel.
The features of the long-term incentive comprise the grant
of equity in the form of Performance Rights which vest over
a three year period. The maximum number of Performance
Rights will vest only if stretch objectives for each tranche are
achieved. Half of the Performance Rights will vest if the on-
target objectives are achieved. The end of the measurement
period for a tranche of Performance Rights will be extended
by up to two years at the Board’s discretion if significantly
less than target vesting would have been achieved for that
tranche at the end of the measurement period, adjusted
for the pro-rata increase in hurdles to take into account the
additional time. The two vesting conditions that will be used
will be relative total shareholder return (RTSR) and normalised
earnings per share growth (NEPSG).
During the year 250,000 Performance Rights were granted
to the CEO under the LTI Plan. The aggregate fair value of
the Performance Rights granted is $230,198 as set out on
page 42. A further 44,506 Performance rights were granted to
the new CFO under the LTI Plan. The aggregate fair value of
the Performance Rights granted to the new CFO is $48,516
as set out on page 42. The former CFO forfeited 229,571
Performance Rights when he resigned from the Company on
28 February 2023.
40
Annual Report 2023
DIRECTORS’ REPORT (cont.)
AUDITED REMUNERATION REPORT (CONT.)
KEY TERMS OF EMPLOYMENT
CONTRACTS
The Group entered into an executive service agreement with
Mark Benson as Managing Director and Chief Executive
Officer effective 5 October 2015. The remuneration
component of the agreement is in line with relevant industry
comparables. The variable component (Performance Bonus)
can range anywhere between 0% to 60% of the fixed
component based on performance measured against a
range of key performance indicators and targets, set annually
by the directors. The attainment of realistically achievable
performance and targets on a weighted average measure
would result in a bonus of 30% of the fixed component
and bonus above and below this would result from overall
superior or poorer performance.
RELATIONSHIP BETWEEN
REMUNERATION POLICY AND COMPANY
PERFORMANCE
The remuneration of executive officers contains an
annual cash bonus. The total cash bonus paid in a year is
discretionary and is closely related to and determined by the
current profit levels of the Group.
Executive officer’s remuneration is aligned with the long-
term Group performance via the shareholdings that these
individuals retain in the Group.
The executive service agreement contains the following key terms:
Annual Salary:
Total fixed remuneration of $568,124
Performance Bonus:
Variable, ranging from 0% to 60% of total fixed annual remuneration, based on performance
measured against a range of key performance indicators
Long-term Incentive:
Variable, ranging from 0% to 40% of total fixed annual remuneration, based on performance
measured against a range of key performance indicators
Notice Period:
Six months’ notice
Executive officers are employed under ongoing employment arrangements. Their employment thus entails between three to six
months’ notice. This is considered appropriate because they have many years of service with the Group and are shareholders
of the company.
The tables below set out summary information about the Group’s earnings and movements in shareholder wealth for the five
years to June 2023:
Revenue
Net profit/(loss) before income tax
Net profit/(loss) after income tax
Share price at end of year
Interim dividend (cents per share)
Final dividend (cents per share)
Basic earnings/(losses) per share
Diluted earnings/(losses) per share
30 June
2023
$’000
200,886
14,151
9,491
30 June
2023
1.12
2.00
2.00
8.84
8.71
30 June
2022
$’000
129,955
9,379
6,551
30 June
2022
1.02
1.00
2.00
6.24
6.07
30 June
2021
$’000
101,242
8,085
5,542
30 June
2021
0.79
0.75
1.75
5.36
5.21
30 June
2020
$’000
66,462
1,853
1,266
30 June
2020
0.48
0.00
0.00
1.23
1.20
30 June
2019
$’000
50,126
(2,260)
(1,610)
30 June
2019
0.33
0.00
0.00
(1.72)
(1.72)
All dividends above were franked to 100% at 30% corporate tax rate.
41
Annual Report 2023 DIRECTORS’ REPORT (cont.)
AUDITED REMUNERATION REPORT (CONT.)
Particulars of Directors and Executive Officers interests, including interests under the ESP and Performance Rights Plan during
the year ended 30 June 2023 were:
Fully paid
ordinary
shares issued/
purchased
during 2023
Fully paid
ordinary
shares at end
2023
Fully paid
ordinary
shares 2022
Share options
2022
Share options
vested/
lapsed during
2023
Share options
granted
during 2023
Share options
at end 2023
Performance
rights at end
2022
Performance
rights granted
during 2023
Performance
rights vested/
lapsed during
2023
Performance
rights at end
2023
Number
Number
Number
Number
Number
Number
Number
Number
Number
Number
Non-executive Directors
Timothy Burnett
11,686,311
5,599
35,211
11,727,121
-
-
-
-
11,686,311
5,599
35,211
11,727,121
-
-
-
-
-
-
-
-
2,295,824
937,462
3,233,286
319,100
(50,000)
-
-
244,360
(244,360)
-
-
-
-
141,460
(141,460)
2,540,184
693,102
3,233,286
460,560
(191,460)
Greg Fletcher
Nick Yates
TOTAL
Executive Officers
Mark Benson1
Brett Gregory2
Former Executive Officers
Rudy Sheriff3
TOTAL
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
269,100
1,660,852
250,000
(943,570)
967,282
-
-
-
44,506
-
44,506
507,553
-
(507,553)
-
269,100
2,168,405
294,506
(1,451,123)
1,011,788
269,100
2,168,405
294,506
(1,451,123)
1,011,788
GRAND TOTAL
14,267,305
693,102
14,960,407
460,560
(191,460)
1. Managing Director & Chief Executive Officer, 2. Appointed Chief Financial Officer from 9 January 2023, 3. Resigned as Chief Financial Officer 28 February 2023.
The following table summarises the value of options and performance rights granted during the financial year, in relation to
options granted to key management personnel as part of their remuneration:
Share options granted
during 2023
Share options forfeited
during 2023
Share options vested
during 2023
Performance rights
granted during 2023
Performance rights
forfeited during 2023
Performance rights
vested during 2023
Fair Value
$
Fair Value
$
Fair Value
$
Fair Value
$
Fair Value
$
Fair Value
$
Non-executive Directors
Timothy Burnett
Greg Fletcher
Nick Yates
TOTAL
Executive Officers
Mark Benson1
Brett Gregory2
Former Executive Officers
Rudy Sheriff3
TOTAL
GRAND TOTAL
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(95,756)
(95,756)
(95,756)
-
-
-
-
25,000
-
-
25,000
25,000
-
-
-
-
230,198
48,516
-
278,714
278,714
-
-
-
-
-
-
(138,562)
(138,562)
(138,562)
-
-
-
-
264,195
-
-
264,195
264,195
1. Managing Director & Chief Executive Officer, 2. Appointed Interim Chief Financial Officer from 9 January 2023, 3. Resigned as Chief Financial Officer 28 February 2023.
The value of the options and rights granted to key management personnel as part of their remuneration is calculated as at the
grant date using a Black-Scholes-Merton pricing model. The amounts disclosed as part of remuneration for the financial year,
as disclosed on page 43, have been determined by allocating the grant date value on a straight-line basis over the period from
grant date to vesting date. Further details are set out in Note 12.
42
Annual Report 2023 DIRECTORS’ REPORT (cont.)
AUDITED REMUNERATION REPORT (CONT.)
REMUNERATION OF EXECUTIVE OFFICERS AND KEY MANAGEMENT PERSONNEL
Short-term Benefits
Post-employment
Benefits
Non-monetary
Benefit5
Superannuation
Long-term employee benefits
Cash settled
share based
payments
Equity settled
share-based
payments
$
$
$
$
2023
Cash
Fees/Salary
$
Cash
Bonus4
$
Non-executive Directors
Timothy Burnett
Greg Fletcher
Nick Yates
Brendan York
TOTAL
Executive Officers
Mark Benson1
Brett Gregory2
Former Executive Officers
Rudy Sheriff3
Total
110,481
72,118
72,118
-
254,717
548,239
184,384
289,245
1,021,868
-
-
-
-
-
353,243
67,242
80,000
500,485
Grand total
1,276,585
500,485
-
-
-
-
-
14,427
-
3,303
17,730
17,730
11,601
7,573
7,573
-
26,747
27,132
13,256
16,862
57,250
83,997
-
-
-
-
-
-
48,516
-
48,516
Percentage of
remuneration
related to
performance
Cash Bonus as
a percentage
of maximum
achievable4
%
%
Total
$
122,082
79,691
79,691
-
281,464
-
-
-
-
-
107,601
1,050,642
313,398
43.9%
36.9%
82.0%
82.0%
-
-
389,410
20.5%
98.0%
107,601
1,753,450
48,516
107,601
2,034,914
1 Managing Director & Chief Executive Officer, 2 Appointed Interim Chief Financial Officer from 9 January 2023, 3 Resigned as Chief Financial Officer 28 February
2023, 4 Cash bonuses are disclosed on an accruals basis and represent the amount earned in respect of the current financial year. Cash bonuses are discretionary,
are determined by the Board in August of each year and exclude equity settled share based payments. Mark Benson’s 2023 bonus includes $60,000 that was paid
in January 2023 but which related to FY22, 5 Non-monetary benefits relate to motor vehicle or other expenses packaged within the employee’s salary package.
No director or senior management person appointed during the year received a payment as part of his or her remuneration
for agreeing to hold the position. Non-executive directors have no entitlement to cash bonus or non-monetary benefits.
The key management personnel are the Executive Officers of the Group. The value of the options and rights granted to key
management personnel as part of their remuneration is calculated as at the grant date using a Black-Scholes-Merton pricing
model. The amounts disclosed as part of remuneration for the financial year have been determined by allocating the grant date
value on a straight-line basis over the period from grant date to vesting date.
Short-term Benefits
Post-employment
Benefits
Non-monetary
Benefit4
Superannuation
Long-term employee benefits
Cash settled
share based
payments
Equity settled
share-based
payments
Total
Percentage of
remuneration
related to
performance
Cash Bonus as
a percentage
of maximum
achievable4
2022
Non-executive Directors
Timothy Burnett
Greg Fletcher
Nick Yates
TOTAL
Executive Officers
Mark Benson1
Rudy Sheriff3
TOTAL
Cash
Fees/Salary
$
Cash
Bonus3
$
104,545
68,182
68,182
240,909
516,813
326,637
843,450
-
-
-
-
280,404
97,141
377,545
Grand total
1,084,359
377,545
$
$
$
$
$
%
%
-
-
-
-
13,185
6,192
19,377
19,377
10,455
6,818
6,818
24,091
23,568
23,568
47,136
71,227
-
-
-
-
-
-
-
-
-
-
-
-
111,300
34,932
146,232
115,000
75,000
75,000
265,000
945,270
488,470
1,433,740
146,232
1,698,740
41.4%
27.0%
86.0%
90.0%
1 Managing Director & CEO, 2 Chief Financial Officer, 3 Cash bonuses are disclosed on an accruals basis and represent the amount earned in respect of the current
financial year. Cash bonuses are discretionary, are determined by the Board in August of each year and exclude equity settled share based payments.
4 Non-monetary benefits relate to motor vehicle or other expenses packaged within the employee’s salary package.
43
Annual Report 2023
DIRECTORS’ REPORT (cont.)
SUBSEQUENT EVENTS
NON-AUDIT SERVICES
Details of amounts paid or payable to the auditor for
non-audit services are outlined in Note 25 to the financial
statements. During this financial year there was nil paid or
payable for non-audit services (2022: $4,075).
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration is included on
page 46 of the annual report.
ROUNDING OFF OF AMOUNTS
The Group is of the kind referred to in ASIC Corporations
(Rounding in Financials/Directors’ Reports) Instrument
2016/191, dated 24 March 2016, and in accordance with
that Corporations Instrument amounts in the directors’ report
and the financial statements are rounded off to the nearest
thousand dollars, unless otherwise indicated.
This directors’ report is signed in accordance with a
resolution of directors made pursuant to s298(2) of the
Corporations Act 2001.
On behalf of the Directors
Mark Benson
Director
Sydney, 29 August 2023
Nick Yates
Director
Sydney, 29 August 2023
Subsequent to year end, management are continuing to
finalise the contract with our client in relation to Project
Caymus in Darwin, NT.
Other than the above, there have been no other matters
or circumstances occurring subsequent to the end of
the financial year, that have significantly affected, or may
significantly affect, the operations of the Group, the results of
those operations, or the state of affairs of the Group in future
financial years.
ENVIRONMENTAL REGULATION AND
PERFORMANCE
Saunders is subject to a range of State and Federal
environmental regulations in Australia. In line with our Safety,
Health and Quality objectives, Saunders strives to continually
improve its environmental performance.
The Group recognises the material environmental and
social risks that are relevant to its activities and takes
action to manage those risks. Discussion across a range of
sustainability related topics, including climate change, occur
frequently at Board meetings. Climate change risk has been
included in the internal management process governing
investment decisions.
The Board provides oversight and strategic direction
to sustainability and has ultimate responsibility for our
Company’s consideration of climate-related risk. It is guided
by our Audit and Risk Committee.
During the financial year, Saunders were compliant with the
reporting requirements under relevant legislation. There were
no material incidents which required reporting.
FUTURE DEVELOPMENTS
Details around the Operating and Financial Review and
Outlook are disclosed on pages 34 and 35.
INDEMNIFICATION OF OFFICERS AND
AUDITORS
During the financial year, the Group paid a premium in
respect of a contract insuring the directors of the Group, the
Group secretary, and all executive officers of the Group and
of any related body corporate against a liability incurred by
such a director, secretary or executive officer 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.
The Group has not otherwise, during or since the end of
the financial year, except to the extent permitted by law,
indemnified or agreed to indemnify an officer or auditor of
the Group or of any related body corporate against a liability
incurred as such an officer or auditor.
44
Annual Report 2023
Our core
values guide
our behaviours
and underpin
our culture
45
Annual Report 2023 Deloitte Touche Tohmatsu
ABN 74 490 121 060
8 Parramatta Square
10 Darcy Street
Parramatta, NSW, 2150
Australia
Phone: +61 2 9840 7000
www.deloitte.com.au
The Board of Directors
Saunders International Limited
L2 Building F, Rhodes Corporate Park
1 Homebush Bay Drive
Rhodes NSW 2138
29 August 2023
Dear Board Members,
AAuuddiittoorr’’ss IInnddeeppeennddeennccee DDeeccllaarraattiioonn ttoo SSaauunnddeerrss IInntteerrnnaattiioonnaall LLiimmiitteedd
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration
of independence to the Directors of Saunders International Limited.
As lead audit partner for the audit of the financial report of Saunders International Limited for the year ended 30
June 2023, I declare that to the best of my knowledge and belief, there have been no contraventions of:
• The auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
• Any applicable code of professional conduct in relation to the audit.
Yours faithfully
DELOITTE TOUCHE TOHMATSU
David Sartorio
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
46
Annual Report 2023Auditor’s Independence Declaration
Deloitte Touche Tohmatsu
ABN 74 490 121 060
8 Parramatta Square
10 Darcy Street
Parramatta, NSW, 2150
Australia
Phone: +61 2 9840 7000
www.deloitte.com.au
Independent Auditor’s Report to the Members of
Saunders International Limited
RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
Opinion
We have audited the financial report of Saunders International 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, the consolidated statement of changes in equity
and the consolidated statement of cash flows for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies and other explanatory information, and the directors’
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
• Giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its financial performance
for the year then ended; and
• 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 & 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 confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
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 for 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.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
47
Annual Report 2023Auditor’s Report
AUDITOR’S REPORT (cont.)
KKeeyy AAuuddiitt MMaatttteerr
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt
MMaatttteerr
RReeccooggnniittiioonn ooff ccoonnssttrruuccttiioonn rreevveennuuee
Our procedures included, but were not limited to:
§
§
Evaluating management’s processes and controls in
respect of the recognition of construction revenue;
Selecting a sample of contracts for testing based on a
number of quantitative and qualitative factors which
may indicate that a greater level of judgement is
required in recognising revenue and:
§
agreed the contract terms to the initial contract
price;
tested contractual entitlements for changes,
variations and claims recognised within contract
revenue to supporting documentation, and by
reference to the underlying contract,
assessed management’s basis for estimates of
unapproved variations and claims brought to
account within contract revenue,
tested a sample of costs incurred to date to
supporting documentation;
assessed the forecast costs to complete through
discussion and challenge of project managers and
finance personnel;
recalculated the percentage of completion based
on costs incurred to date relative to total forecast
costs;
of
assessed
allowances within forecast costs;
evaluated exposure to liquidated damages for
late delivery of works; and
challenged management’s ability to forecast
margins on contracts by analysing the accuracy
of previous margin forecasts to actual outcomes.
• Assessing the adequacy of the relevant disclosures in
appropriateness
contingency
§
§
§
§
§
§
the financial statements.
Evaluating management’s processes and controls in
respect of the recognition of construction revenue
We also assessed the appropriateness of the disclosures
in Notes 1(c), 1(i), 2 and 3 to the financial statements.
Refer to Note 1(c) ‘Construction Contracts’, Note
1(i) ‘Revenue’, Note 2 ‘Critical accounting
judgements and key sources of estimation
uncertainty’ and Note 3 ‘Revenue’.
•
•
As at 30 June 2023 the Group’s revenue from
construction contracts is $200.9 million.
Construction revenue is recognised over time as
performance obligations are fulfilled. Construction
revenue is recognized by management after
assessing all factors relevant to each contract,
including specifically assessing the following as
applicable:
•
•
Estimation of total contract revenue, including
determination of contractual entitlement and
assessment of the probability of customer
approval of variations and acceptance of
claims;
Estimation of total contract revenue, including
variable consideration, and costs including the
estimation of cost contingencies;
• Determination of stage of completion and
measurement of progress towards satisfaction
of performance obligations;
Estimation of project completion date.
•
We focused on recognition of construction revenue
and as a key audit matter due to the number and
type estimation events over the course of a
contract
individual
life, the unique nature of
contract terms leading to complex and judgmental
revenue recognition from contracts.
48
Annual Report 2023
AUDITOR’S REPORT (cont.)
Other Information
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 Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group 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 has 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.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
maintain professional skepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Group to cease to continue as a going concern.
49
Annual Report 2023
AUDITOR’S REPORT (cont.)
• Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the direction,
supervision and performance of the Group’s audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards
applied.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt
Opinion on the Remuneration Report
We have audited the Remuneration Report included in page 39 to 43 of the Directors’ Report for the year ended
30 June 2023.
In our opinion, the Remuneration Report of Saunders International Limited, for the year ended 30 June 2023,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
DELOITTE TOUCHE TOHMATSU
David Sartorio
Partner
Chartered Accountants
Parramatta, 29 August 2023
50
Annual Report 2023
Directors’
Declaration
The directors declare that:
a. in the directors’ opinion, there are reasonable grounds to
believe that the Company will be able to pay its debts as
and when they become due and payable;
b. in the directors’ opinion, the attached financial statements
are in compliance with International Financial Reporting
Standard, as stated in Note 1 to the financial statements;
c. in the directors’ opinion, the attached financial statements
and notes thereto are in accordance with the Corporations
Act 2001, including compliance with accounting standards
and giving a true and fair view of the financial position and
performance of the Group, and
d. the directors have been given the declarations required by
s.295A of the Corporations Act 2001.
Signed in accordance with a resolution of the directors made
pursuant to s295(5) of the Corporations Act 2001.
On behalf of the Directors
Mark Benson
Director
Sydney, 29 August 2023
Nick Yates
Director
Sydney, 29 August 2023
51
Annual Report 2023
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Revenue
Other income
Materials and third-party costs charged to projects
Employee benefits expense
Depreciation expense
Motor vehicle expense
Occupancy and operating lease expense
Finance costs
Other expenses
Profit before income tax
Income tax expense
Profit for the year attributable to shareholders of the parent entity
Other comprehensive income
Total comprehensive profit attributable to shareholders of the parent entity
Earnings per share
Basic (cents per share)
Diluted (cents per share)
The accompanying notes form part of these financial statements.
Note
3
4
4
4
4
5
14
14
2023
$’000
2022
$’000
200,886
129,955
436
(115,078)
(60,754)
(3,036)
(426)
(866)
(397)
(6,614)
14,151
(4,660)
9,491
-
9,491
8.84
8.71
897
(87,552)
(27,709)
(2,246)
(365)
(468)
(106)
(3,027)
9,379
(2,828)
6,551
-
6,551
6.24
6.07
52
Annual Report 2023Financial Report FINANCIAL REPORT (cont.)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
Note
18
6
10
7
8
20
5
9
10
11
5
8
11
8
5
12
12
13
2023
$’000
12,833
23,099
33,145
136
196
2022
$’000
36,746
28,946
9,340
189
192
69,409
75,413
11,495
4,952
3,978
823
21,248
90,657
25,727
11,174
6,887
2,300
1,838
12,086
3,674
321
-
16,081
91,494
35,500
13,023
4,427
2,089
1,191
47,926
56,230
809
2,647
-
3,456
51,382
39,275
24,104
(1,475)
572
16,074
39,275
839
2,328
72
3,239
59,469
32,025
22,482
(1,806)
384
10,965
32,025
Current assets
Cash and cash equivalents
Trade and other receivables
Contract Assets
Inventories
Other current Assets
Total current assets
Non-current assets
Property Plant and equipment
Right-of-use assets
Intangible asset
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Contract liabilities
Provisions
Current tax liability
Lease liabilities
Total current liabilities
Non-current liabilities
Provisions
Lease liabilities
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Treasury shares under employee share plan
Share based payments reserve
Retained earnings
Total equity
The accompanying notes form part of these financial statements.
53
Annual Report 2023 FINANCIAL REPORT (cont.)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Share
Based
Payments
Reserve
$’000
Treasury
Shares
$’000
Retained
Earnings
$’000
(674)
736
7,358
Issued
Capital
$’000
20,687
Balance at 1 July 2021
Profit and other comprehensive income
Profit for the year
Total profit and other comprehensive income
Transactions with owners in their capacity as owners
Dividends paid
-
-
93
-
-
-
Treasury Shares issued during the year
1,132
(1,132)
Share based payments vested/lapsed
Share-based payments expense
Total transactions with owners in their capacity as
owners
Balance at 30 June 2022
Balance at 1 July 2022
Profit and other comprehensive income
Profit for the year
Total profit and other comprehensive income
Transactions with owners in their capacity as owners
Dividends paid
Shares issued during the year
Treasury Shares issued during the year
Shares vested during the year
Share-based payments expense
Total transactions with owners in their capacity as
owners
570
-
-
-
1,795
(1,132)
22,482
(1,806)
22,482
(1,806)
-
-
-
1,400
(274)
496
-
1,622
-
-
-
-
331
-
-
331
Total
$’000
28,107
6,551
6,551
6,551
6,551
(2,944)
(2,851)
-
-
-
-
-
218
(2,944)
(2,633)
10,965
32,025
10,965
32,025
9,491
9,491
9,491
9,491
(4,382)
-
-
-
-
(4,382)
1,400
57
-
684
(4,382)
(2,241)
-
-
-
-
(570)
218
(352)
384
384
-
-
-
-
-
(496)
684
188
Balance at 30 June 2023
24,104
(1,475)
572
16,074
39,275
The accompanying notes form part of these financial statements.
54
Annual Report 2023 Net cash (outflow) / inflow from operating activities
18
(14,096)
FINANCIAL REPORT (cont.)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Finance costs paid
Income taxes paid
Cash flows from investing activities
Payments for plant and equipment
Proceeds from sale of assets
Payments for business acquisition
Net cash used in investing activities
Cash flows from financing activities
Dividends paid
Proceeds from issue of shares
Proceeds of borrowings
Repayment of borrowings
Repayments of interest bearing liabilities
Net cash used in financing activities
Net (decrease) / increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate fluctuations on cash held
Note
2023
$’000
2022
$’000
200,483
126,504
(210,304)
(105,496)
132
(397)
(4,010)
(1,135)
331
(2,754)
21
-
(105)
(1,140)
19,763
(3,124)
30
(185)
(3,558)
(3,279)
(4,382)
57
2,128
(1,951)
(2,113)
(6,261)
(23,915)
36,746
2
(2,851)
-
1,407
(1,407)
(798)
(3,649)
12,835
23,816
95
Cash and cash equivalents at the end of the financial year
18
12,833
36,746
The accompanying notes form part of these financial statements.
55
Annual Report 2023 NOTES TO THE FINANCIAL
STATEMENTS
1. SUMMARY OF ACCOUNTING POLICIES
Statement of Compliance
The financial statements are general purpose financial
statements which have been prepared in accordance with
the Corporations Act 2001, Accounting Standards and other
authoritative pronouncements issued by the Australian
Accounting Standards Board (AASB), and comply with other
requirements of the law.
The financial statements comprise the consolidated
financial statements of the Group. For the purposes of
preparing the consolidated financial statements, the Group
is a for-profit entity.
Accounting Standards include Australian Accounting
Standards (‘AAS’). Compliance with AAS ensures that the
financial statements and notes of the Group comply with
International Financial Reporting Standards (‘IFRS’).
The financial statements were authorised for issue by the
directors on 29 August 2023.
Basis of Preparation
The financial statements for the Group have been prepared
on the basis of historical cost. Cost is based on the fair
values of the consideration given in exchange for goods and
services. All amounts are presented in Australian dollars,
unless otherwise noted.
The Group is of the kind referred to in ASIC Corporations
(Rounding in Financials/Directors’ Reports) Instrument
2016/191, dated 24 March 2016, and in accordance with
that Corporations Instrument amounts in the directors’ report
and the financial statements are rounded off to the nearest
thousand dollars, unless otherwise indicated.
(a) Amendments to Accounting Standards that are
mandatorily effective for the current reporting
period
The Group has adopted all of the new and revised Standards
and Interpretations issued by the Australian Accounting
Standards Board (the AASB) that are relevant to its
operations and effective for an accounting period that begins
on or after 1 July 2021.
Accounting Standard in issue but not yet effective
Certain Australian Accounting Standards and amendments
to standards have been published that are not mandatory for
reporting period commencing 1 July 2023 and not been early
adopted by the Group. These standards are not expected to
have a material impact on the entity in the current or future
reporting periods and on foreseeable future transactions.
56
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
(b) Cash and Cash Equivalents
Cash of the Group comprises cash on hand and demand
deposits. Cash equivalents are short-term, highly liquid
investments that are readily convertible to known amounts of
cash and which are subject to an insignificant risk of changes
in value.
(c) Construction Contracts
The Group recognises a contract asset for any work
performed. Any amount previously recognised as a contract
asset is reclassified to trade receivables at the point at which
it is invoiced to the customer. If the amount invoiced exceeds
the revenue recognised to date, then the Group recognises
a contract liability for the difference. There is not considered
to be a significant financing component in construction
contracts with customers as the period between the
recognition of revenue and the receipt of payment is always
expected to be less than one year.
(d) Employee Benefits
A liability of the Group is recognised for benefits accruing to
employees in respect of wages and salaries, annual leave,
long service leave, and sick leave when it is probable that
settlement will be required and they are capable of being
measured reliably.
Liabilities recognised in respect of employee benefits
expected to be settled within 12 months, are measured at
their nominal values using the remuneration rate expected to
apply at the time of settlement.
Liabilities recognised in respect of employee benefits
which are not expected to be settled within 12 months are
measured as the present value of the estimated future cash
outflows to be made by the Group in respect of services
provided by employees up to reporting date.
(e) Income Tax
Current Tax
Current tax is calculated by reference to the amount of
income taxes payable or recoverable in respect of the taxable
profit or tax loss for the period. It is calculated using tax
rates and tax laws that have been enacted or substantively
enacted by reporting date. Current tax for current and prior
periods is recognised as a liability (or asset) to the extent that
it is unpaid (or refundable).
Deferred Tax
Deferred tax is recognised on temporary differences
between the tax base of an asset or liability and its carrying
amount in the financial statements. The tax base of an asset
or liability is the amount attributed to that asset or liability
for tax purposes.
In principle, deferred tax liabilities are recognised for all
taxable temporary differences. Deferred tax assets are
recognised to the extent that it is probable that sufficient
taxable amounts will be available against which deductible
temporary differences or unused tax losses and tax offsets
can be utilised.
57
However, deferred tax assets and liabilities are not
recognised if the temporary differences giving rise to them
arise from the initial recognition of assets and liabilities
(other than as a result of a business combination) which
affects neither taxable income nor accounting profit.
Furthermore, a deferred tax liability is not recognised in
relation to taxable temporary differences arising from the
initial recognition of goodwill.
Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply to the period(s) when the
asset and liability giving rise to them are realised or settled,
based on tax rates (and tax laws) that have been enacted or
substantively enacted by reporting date. The measurement
of deferred tax liabilities and assets reflects the tax
consequences that would follow from the manner in which
the Group expects, at the reporting date, to recover or settle
the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when they relate
to income taxes levied by the same taxation authority and the
Group intends to settle its current tax assets and liabilities on
a net basis.
Current and Deferred Tax for the Period
Current and deferred tax is recognised as an expense or
income in profit and loss, except when it relates to items
credited or debited directly to equity, in which case the
deferred tax is also recognised directly in equity, or where it
arises from the initial accounting for a business combination,
in which case it is taken into account in the determination of
goodwill or excess.
(f) Leases
The Group as lessee
The Group assesses whether a contract is or contains a
lease, at inception of the contract. The Group recognises a
right-of-use asset and a corresponding lease liability with
respect to all lease arrangements in which it is the lessee,
except for short-term leases (defined as leases with a lease
term of 12 months or less) and leases of low value assets
(such as tablets and personal computers, small items of
office furniture and telephones). For these leases, the Group
recognises the lease payments as an operating expense on
a straight-line basis over the term of the lease unless another
systematic basis is more representative of the time pattern
in which economic benefits from the leased assets are
consumed.
The lease liability is initially measured at the present value of
the lease payments that are not paid at the commencement
date, discounted by using the rate implicit in the lease. If
this rate cannot be readily determined, the Group uses its
incremental borrowing rate.
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
Lease payments included in the measurement of the lease
liability comprise:
y fixed payments, less any lease incentives receivable;
y variable lease payment that are based on an index or a
rate, initially measured using the index or rate as at the
commencement date;
y amounts expected to be payable by the lessee under
residual value guarantees;
y the exercise price of a purchase option if the lessee is
reasonably certain to exercise that option; and
y payments of penalties for terminating the lease, if the lease
term reflects the lessee exercising that option.
The lease liability is presented as a separate line in the
consolidated statement of financial position.
The lease liability is subsequently measured by increasing the
carrying amount to reflect interest on the lease liability (using
the effective interest method) and by reducing the carrying
amount to reflect the lease payments made.
The Group remeasures the lease liability (and makes a
corresponding adjustment to the related right-of-use
asset) whenever:
y The lease term has changed or there is a significant event
or change in circumstances resulting in a change in the
assessment of exercise of a purchase option, in which
case the lease liability is remeasured by discounting the
revised lease payments using a revised discount rate.
y The lease payments change due to changes in an
index or rate or a change in expected payment under a
guaranteed residual value, in which cases the lease liability
is remeasured by discounting the revised lease payments
using an unchanged discount rate (unless the lease
payments change is due to a change in a floating interest
rate, in which case a revised discount rate is used).
y A lease contract is modified and the lease modification
is not accounted for as a separate lease, in which case
the lease liability is remeasured based on the lease term
of the modified lease by discounting the revised lease
payments using a revised discount rate at the effective
date of the modification.
The Group did not make any such adjustments during the
periods presented.
The right-of-use assets comprise the initial measurement of
the corresponding lease liability, lease payments made at
or before the commencement day, less any lease incentives
received and any initial direct costs. They are subsequently
measured at cost less accumulated depreciation and
impairment losses.
Whenever the Group incurs an obligation for costs to
dismantle and remove a leased asset, restore the site on
which it is located or restore the underlying asset to the
condition required by the terms and conditions of the lease,
a provision is recognised and measured under AASB 137.
To the extent that the costs relate to a right-of-use asset, the
costs are included in the related right-of-use asset.
58
Right-of-use assets are depreciated over the shorter period
of lease term and useful life of the underlying asset. If a
lease transfers ownership of the underlying asset or the cost
of the right-of-use asset reflects that the Group expects to
exercise a purchase option, the related right-of-use asset is
depreciated over the useful life of the underlying asset. The
depreciation starts at the commencement date of the lease.
The right-of-use assets are presented as a separate line in
the consolidated statement of financial position.
The Group applies AASB 136 to determine whether a right-
of-use asset is impaired and accounts for any identified
impairment loss, as described in Note 1(l).
(g) Plant and Equipment
Plant and equipment and leasehold improvements
are stated at cost less accumulated depreciation and
impairment. Note 7 provides more detail. Cost includes
expenditure that is directly attributable to the acquisition
of the item. In the event that settlement of all or part of
the purchase consideration is deferred, cost is determined
by discounting the amounts payable in the future to their
present value as at the date of acquisition.
Depreciation is provided on plant and equipment.
Depreciation is calculated on a straight-line basis so as
to write off the net cost over its expected useful life to its
estimated residual value. Leasehold improvements are
depreciated over the period of the lease or estimated useful
life, whichever is the shorter, using the straight-line method.
The estimated useful lives, residual values and depreciation
method are reviewed at the end of each annual reporting
period, with the effect of any changes recognised on a
prospective basis. Freehold Land is not depreciated.
The following estimated useful lives are used in the
calculation of depreciation:
Buildings
40 years
Plant and Equipment
3 – 20 years
Office Furniture and Equipment
3 – 7 years
(h) Provisions
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past event,
it is probable that the Group will be required to settle the
obligation, and a reliable estimate can be made of the
amount of the obligation.
The amount recognised as a provision is the best estimate of
the consideration required to settle the present obligation at
reporting date, taking into account the risks and uncertainties
surrounding the obligation. Where a provision is measured
using the cashflows estimated to settle the present
obligation, its carrying amount is the present value of those
cashflows.
When some or all of the economic benefits required to settle
a provision are expected to be recovered from a third party,
the receivable is recognised as an asset if it is virtually certain
that reimbursement will be received and the amount of the
receivable can be measured reliably.
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
A restructuring provision is recognised when the Group has
developed a detailed formal plan for the restructuring and
has raised a valid expectation in those affected that it will
carry out the restructuring by starting to implement the plan
or announcing its main features to those affected by it. The
measurement of a restructuring provision includes only the
direct expenditures arising from the restructuring, which
are those amounts that are both necessarily entailed by the
restructuring and not associated with ongoing activities of
the entity.
(i) Revenue
Engineering and Construction revenue
The Group derives revenue from the long-term construction
of tanks across Australia and the Pacific region. Contracts
entered into may be for the construction of one or several
inter-linked pieces of large infrastructure. These contracts
include two performance obligations being:
I. The design and provision of plans for the construction of
tanks; and
II. The construction, site establishment, erection,
commissioning and testing of tanks.
Each tank is referred to as a project. Where contracts are
entered into for the design and construction of several
projects the total transaction price is allocated across each
performance obligation based on stand-alone selling prices.
The transaction price typically contains a fixed lump sum
amount. It is normal practice for contracts to include bonus
and penalty elements based on timely construction or
other performance criteria known as variable consideration,
discussed below.
The performance obligations are fulfilled over time and
as such revenue is recognised over time. This is because
as work is performed on the assets being designed or
constructed, they are controlled by the customer and have
no alternative use to the Saunders Group, with the Group
having a right to payment for the performance to date.
Thus control of the goods and services is transferred to the
customer over time.
Revenue earned is typically invoiced monthly or in some
cases on achievement of milestones or in line with costs
incurred. Invoices are paid on commercial terms, which may
include the customer withholding a retention amount until
finalisation of the construction. Where payment is received
prior to or post recognition of revenue using the percentage
cost of completion method, revenue is deferred or accrued
for on the balance sheet.
Services revenue
Fixed price contracts
For fixed price services contracts, revenue arises from
maintenance and other services supplied to infrastructure
assets and facilities which may involve a range of services
and processes. For the majority of fixed price contracts
the Group has assessed the services provided to be one
performance obligation. The transaction price typically
contains a fixed lump sum amount. The total transaction
price may include variable consideration.
59
Performance obligations are fulfilled over time as the
customer simultaneously receives and consumes the benefits
provided by the Group’s performance as the Group performs,
and the Group enhances assets which the customer controls
as the Group performs. Thus control of the goods and
services is transferred to the customer over time. Revenue
is recognised as the services are provided using cost as the
measure of progress.
Customers are in general invoiced on a monthly basis for an
amount that is in line with costs incurred. Payment is received
following invoicing on normal commercial terms. Where
payment is received prior to or post recognition of revenue
using the percentage cost of completion method, revenue is
deferred or accrued for on the balance sheet.
Cost plus contracts
For cost plus services contracts, revenue arises from
maintenance and other services supplied to infrastructure
assets and facilities which may involve a range of services
and processes. The Group has assessed the services
provided to be one performance obligation.
Performance obligations are fulfilled over time as the
customer simultaneously receives and consumes the benefits
provided by the Group’s performance as the Group performs,
and Group enhances assets which the customer controls as
the Group performs. Thus control of the goods and services
are transferred to the customer over time.
Customers are in general invoiced on a monthly basis for
an amount that is which is calculated on a cost plus basis
that are aligned with the stand alone selling prices for each
performance obligation. As the amount the Group is entitled
to invoice to a customer corresponds directly with the value
provided to the customer under the Group’s performance
completed to date, the Group has applied the practical
expedient under AASB 15 and recognised revenue in the
amount that they are entitled to invoice. Payment is received
on normal commercial terms.
Fabrication and construction revenue
Fabrication and construction revenue arises from contracts
maintained by the Group to fabricate components and
construct bridges. These contracts include two performance
obligations being:
I. The design and provision of plans for the construction of
bridges; and
II. The fabrication, construction, site establishment, erection,
commissioning and testing of bridges.
The transaction price typically contains a fixed lump sum
amount. The total transaction price is allocated across
each performance obligation based on stand-alone selling
prices. It is normal practice for contracts to include bonus
and penalty elements based on timely construction or
other performance criteria known as variable consideration,
discussed below.
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
Each performance obligation is fulfilled over time as the
Group enhances assets which the customer controls, for
which the Group does not have alternative use and for which
the Group has right to payment for performance to date. In
some cases, the fabrication of bridge components can be
contracted for by itself and in these cases, revenue will be
recorded over time. Revenue is recognised as the services
are provided using cost as the measure of progress.
Customers are in general invoiced on a monthly basis for an
amount that is in line with costs incurred. Payment is received
following invoice on normal commercial terms. Where
payment is received prior to or post recognition of revenue
using the percentage cost of completion method, revenue is
deferred or accrued for on the balance sheet.
Variable consideration
Where consideration in respect of a contract is variable,
the expected value of revenue is only recognised when the
uncertainty associated with the variable consideration is
subsequently resolved, known as “constraint” requirements.
The Group assesses the constraint requirements on a
periodic basis when estimating the variable consideration to
be included in the transaction price. When calculating the
estimates of variable consideration, the Group considers
available information including historic performance on
similar contracts and other information regarding events that
affect the variability that are out of the control of the Group.
Where modifications in design or contract requirements
are entered into, these are treated as a continuation of
the original contract in accordance with the contract
modification guidance in AASB 15, and the transaction price
and measure of progress is updated to reflect these. Where
the price of the modification has not been confirmed, this is
treated as variable consideration and an estimate is made of
the amount of revenue to recognise whilst also considering
the constraint requirement.
Tender and contract costs
Costs incurred prior to the commencement of a contract
that give rise to resources that will be used in the anticipated
delivery of the contract and are expected to be recovered are
capitalised. Typically, these are design costs. Where these
contract assets are capitalised, they are amortised over the
course of the contract consistent with the transfer of service
to the customer. Tenders costs which are capitalised are only
costs incremental in the winning of a contract.
(j) Financial assets
All regular way purchases or sales of financial assets are
recognised and derecognised on a trade date basis. Regular
way purchases or sales are purchases or sales of financial
assets that require delivery of assets within the time frame
established by regulation or convention in the marketplace.
All recognised financial assets are measured subsequently in
their entirety at either amortised cost or fair value, depending
on the classification of the financial assets.
60
Classification of financial assets
Debt instruments that meet the following conditions are
measured subsequently at amortised cost:
y the financial asset is held within a business model whose
objective is to hold financial assets in order to collect
contractual cash flows; and
y the contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
Debt instruments that meet the following conditions
are measured subsequently at fair value through other
comprehensive income (FVTOCI) :
y the financial asset is held within a business model whose
objective is achieved by both collecting contractual cash
flows and selling the financial assets; and
y the contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
By default, all other financial assets are measured
subsequently at fair value through profit or loss (FVTPL).
Despite the foregoing, the Group may make the following
irrevocable election / designation at initial recognition of a
financial asset:
y the Group may irrevocably elect to present subsequent
changes in fair value of an equity investment in other
comprehensive income if certain criteria are met; and
y the Group may irrevocably designate a debt investment
that meets the amortised cost or FVTOCI criteria as
measured at FVTPL if doing so eliminates or significantly
reduces an accounting mismatch.
(i) Amortised cost and effective interest method
The effective interest method is a method of calculating the
amortised cost of a debt instrument and of allocating interest
income over the relevant period.
For financial assets other than purchased or originated
credit- impaired financial assets (i.e. assets that are credit-
impaired on initial recognition) , the effective interest rate is
the rate that exactly discounts estimated future cash receipts
( including all fees and points paid or received that form an
integral part of the effective interest rate, transaction costs
and other premiums or discounts) excluding expected credit
losses, through the expected life of the debt instrument, or,
where appropriate, a shorter period, to the gross carrying
amount of the debt instrument on initial recognition. For
purchased or originated credit- impaired financial assets,
a credit- adjusted effective interest rate is calculated by
discounting the estimated future cash flows, including
expected credit losses, to the amortised cost of the debt
instrument on initial recognition.
Annual Report 2023 Zero Harm:
We are
committed to the
practice of Zero
Harm behaviour
at work and at
home
61
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
The amortised cost of a financial asset is the amount at which
the financial asset is measured at initial recognition minus the
principal repayments, plus the cumulative amortisation using
the effective interest method of any difference between that
initial amount and the maturity amount, adjusted for any loss
allowance. The gross carrying amount of a financial asset is
the amortised cost of a financial asset before adjusting for
any loss allowance.
Interest income is recognised using the effective interest
method for debt instruments measured subsequently at
amortised cost and at FVTOCI. For financial assets other
than purchased or originated credit- impaired financial
assets, interest income is calculated by applying the effective
interest rate to the gross carrying amount of a financial
asset, except for financial assets that have subsequently
become credit- impaired ( see below) . For financial assets
that have subsequently become credit- impaired, interest
income is recognised by applying the effective interest rate
to the amortised cost of the financial asset. If, in subsequent
reporting periods, the credit risk on the credit- impaired
financial instrument improves so that the financial asset is
no longer credit- impaired, interest income is recognised
by applying the effective interest rate to the gross carrying
amount of the financial asset.
For purchased or originated credit- impaired financial assets,
the Group recognises interest income by applying the credit-
adjusted effective interest rate to the amortised cost of the
financial asset from initial recognition. The calculation does
not revert to the gross basis even if the credit risk of the
financial asset subsequently improves so that the financial
asset is no longer credit- impaired.
Interest income is recognised in profit or loss and is included
in the other income line item (note 4).
(ii) Financial assets at FVTPL
Financial assets that do not meet the criteria for being
measured at amortised cost or FVTOCI are measured at
FVTPL. Specifically:
y Investments in equity instruments are classified as
at FVTPL, unless the Group designates an equity
investment that is neither held for trading nor a contingent
consideration arising from a business combination as at
FVTOCI on initial recognition;
y Debt instruments that do not meet the amortised cost
criteria or the FVTOCI criteria are classified as at FVTPL. In
addition, debt instruments that meet either the amortised
cost criteria or the FVTOCI criteria may be designated
as at FVTPL upon initial recognition if such designation
eliminates or significantly reduces a measurement
or recognition inconsistency (so called ‘accounting
mismatch’) that would arise from measuring assets or
liabilities or recognising the gains and losses on them on
different bases. The Group has not designated any debt
instruments as at FVTPL.
62
Financial assets at FVTPL are measured at fair value at the
end of each reporting period, with any fair value gains or
losses recognised in profit or loss to the extent they are not
part of a designated hedging relationship. The net gain or
loss recognised in profit or loss includes any dividend or
interest earned on the financial asset and is included in the
other income line item.
The directors of the Group always measure the loss
allowance on amounts due from customers at an amount
equal to lifetime ECL, taking into account the historical
default experience and the future prospects of the
construction industry. There has been no change in the
estimation techniques or significant assumptions made
during the current reporting period in assessing the loss
allowance for the amounts due from customers under
construction contracts. Refer to Note 6 for the risk profile
of amounts due from customers based on the Group’s
provision matrix.
(k) Goods and Services Tax
Revenues, expenses and assets are recognised net of the
amount of goods and services tax (GST), except:
(i) where the amount of GST incurred is not recoverable from
the taxation authority, it is recognised as part of the cost of
acquisition of an asset or as part of an item of expense; or
(ii) for receivables and payables which are recognised
inclusive of GST.
The net amount of GST recoverable from, or payable to, the
taxation authority is included as part of receivables or payables.
Cash flows are included in the statement of cash flows on a
gross basis. The GST component of cash flows arising from
investing and financing activities which is recoverable from,
or payable to, the taxation authority is classified as operating
cash flows.
(l)
Impairment of Assets
At each reporting date, the Group reviews the carrying
amounts of its tangible assets to determine whether there is
any indication that those assets have suffered an impairment
loss. If any such indication exists, the recoverable amount of
the asset is estimated in order to determine the extent of the
impairment loss (if any). Where the asset does not generate
cash flows that are independent from other assets, the Group
estimates the recoverable amount of the cash-generating unit
to which the asset belongs.
Recoverable amount is the higher of fair value less costs to
sell and value in use. 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 for which the estimates of future cash
flows have not been adjusted.
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
If the recoverable amount of an asset (or cash-generating
unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (cash-generating unit) is
reduced to its recoverable amount. An impairment loss is
recognised in profit or loss immediately, unless the relevant
asset is carried at fair value, in which case the impairment
loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (cash-generating unit) is increased to the
revised estimate of its recoverable amount, but only to the
extent that the increased carrying amount does not exceed
the carrying amount that would have been determined had
no impairment or loss been recognised for the asset (cash-
generating unit) in prior years. A reversal of an impairment loss
is recognised in profit or loss immediately, unless the relevant
asset is carried at fair value, in which case the reversal of the
impairment loss is treated as a revaluation increase.
(m) Issued Share Capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of
new shares are shown in equity as a deduction, net of
income tax. Incremental costs directly attributable to the
issue of new shares for the acquisition of a business are
not included in the cost of the acquisition as part of the
purchase consideration.
(n) Basis of Consolidation
The consolidated financial statements incorporate the
financial statements of the Company and entities (including
structured entities) controlled by the Company and its
subsidiaries. Control is achieved when the Company:
(i) has power over the investee;
(ii) is exposed, or has rights, to variable returns from its
involvement with the investee; and
(iii) has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an
investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control
listed above.
When the Company has less than a majority of the voting
rights of an investee, it has power over the investee when
the voting rights are sufficient to give it the practical ability to
direct the relevant activities of the investee unilaterally. The
Company considers all relevant facts and circumstances in
assessing whether or not the Company’s voting rights in an
investee are sufficient to give it power, including:
(i) the size of the Company’s holding of voting rights
relative to the size and dispersion of holdings of the
other vote holders;
(ii) potential voting rights held by the Company, other vote
holders or other parties;
63
(iii) rights arising from other contractual arrangements; and
(iv) any additional facts and circumstances that indicate that
the Company has, or does not have, the current ability
to direct the relevant activities at the time that decisions
need to be made, including voting patterns at previous
shareholders’ meetings.
Consolidation of a subsidiary begins when the Company
obtains control over the subsidiary and ceases when the
Company loses control of the subsidiary. Specifically, income
and expenses of a subsidiary acquired or disposed of during
the year are included in the consolidated statement of profit
or loss and other comprehensive income from the date the
Company gains control until the date when the Company
ceases to control the subsidiary. Profit or loss and each
component of other comprehensive income are attributed
to the owners of the Company and to the non-controlling
interests. Total comprehensive income of subsidiaries is
attributed to the owners of the Company and to the non-
controlling interests even if this results in the non-controlling
interests having a deficit balance.
When necessary, adjustments are made to the financial
statements of subsidiaries to bring their accounting policies
into line with the Group’s accounting policies.
All intragroup assets and liabilities, equity, income, expenses
and cash flows relating to transactions between members of
the Group are eliminated in full on consolidation.
Changes in the Group’s ownership interests in existing
subsidiaries
Changes in the Group’s ownership interests in subsidiaries
that do not result in the Group losing control over the
subsidiaries are accounted for as equity transactions. The
carrying amounts of the Group’s interests and the non-
controlling interests are adjusted to reflect the changes in
their relative interests in the subsidiaries. Any difference
between the amount by which the non-controlling interests
are adjusted and the fair value of the consideration paid or
received is recognised directly in equity and attributed to
owners of the Company.
When the Group loses control of a subsidiary, a gain or
loss is recognised in profit or loss and is calculated as the
difference between (i) the aggregate of the fair value of the
consideration received and the fair value of any retained
interest and (ii) the previous carrying amount of the assets
(including goodwill), and liabilities of the subsidiary and any
non-controlling interests. All amounts previously recognised
in other comprehensive income in relation to that subsidiary
are accounted for as if the Group had directly disposed of the
related assets or liabilities of the subsidiary (i.e. reclassified to
profit or loss or transferred to another category of equity as
specified/permitted by applicable AASB’s).
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
(o) Business combinations
Acquisitions of businesses are accounted for using the
acquisition method. The consideration transferred in a
business combination is measured at fair value, which is
calculated as the sum of the acquisition-date fair values of
the assets transferred by the Group, liabilities incurred by the
Group to the former owners of the acquiree and the equity
interests issued by the Group in exchange for control of the
acquiree. Acquisition-related costs are generally recognised
in profit or loss as incurred. At the acquisition date, the
identifiable assets acquired and the liabilities assumed are
recognised at their fair value, except that:
y deferred tax assets or liabilities, and assets or liabilities
related to employee benefit arrangements are recognised
and measured in accordance with AASB 112 Income
Taxes and AASB 119 respectively;
y liabilities or equity instruments related to share-based
payment arrangements of the acquiree or share-based
payment arrangements of the Group entered into to
replace share-based payment arrangements of the
acquiree are measured in accordance with AASB 2 at the
acquisition date); and
y assets (or disposal groups) that are classified as held for
sale in accordance with AASB 5 Non-current Assets Held
for Sale and Discontinued Operations are measured in
accordance with that Standard.
Goodwill is measured as the excess of the sum of the
consideration transferred, the amount of any non-controlling
interests in the acquiree, and the fair value of the acquirer’s
previously held equity interest in the acquiree (if any) over the
net of the acquisition-date amounts of the identifiable assets
acquired and the liabilities assumed. If, after reassessment,
the net of the acquisition-date amounts of the identifiable
assets acquired and liabilities assumed exceeds the sum
of the consideration transferred, the amount of any non-
controlling interests in the acquiree and the fair value of the
acquirer’s previously held interest in the acquiree (if any),
the excess is recognised immediately in profit or loss as a
bargain purchase gain. Non-controlling interests that are
present ownership interests and entitle their holders to a
proportionate share of the entity’s net assets in the event of
liquidation may be initially measured either at fair value or
at the non-controlling interests’ proportionate share of the
recognised amounts of the acquiree’s identifiable net assets.
The choice of measurement basis is made on a transaction-
by-transaction basis. Other types of non-controlling interests
are measured at fair value or, when applicable, on the basis
specified in another AASB.
When the consideration transferred by the Group in a
business combination includes assets or liabilities resulting
from a contingent consideration arrangement, the contingent
consideration is measured at its acquisition-date fair value
and included as part of the consideration transferred in
a business combination. Changes in the fair value of the
contingent consideration that qualify as measurement
period adjustments are adjusted retrospectively, with
corresponding adjustments against goodwill. Measurement
period adjustments are adjustments that arise from additional
information obtained during the ‘measurement period’ (which
cannot exceed one year from the acquisition date) about
facts and circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair value
of the contingent consideration that do not qualify as
measurement period adjustments depends on how
the contingent consideration is classified. Contingent
consideration that is classified as equity is not remeasured
at subsequent reporting dates and its subsequent settlement
is accounted for within equity. Contingent consideration
that is classified as an asset or a liability is remeasured at
subsequent reporting dates in accordance with AASB 139, or
AASB 137 Provisions, Contingent Liabilities and Contingent
Assets, as appropriate, with the corresponding gain or loss
being recognised in profit or loss.
When a business combination is achieved in stages, the
Group’s previously held equity interest in the acquiree
is remeasured to its acquisition-date fair value and the
resulting gain or loss, if any, is recognised in profit or loss.
Amounts arising from interests in the acquiree prior to the
acquisition date that have previously been recognised in
other comprehensive income are reclassified to profit or loss
where such treatment would be appropriate if that interest
were disposed of. If the initial accounting for a business
combination is incomplete by the end of the reporting
period in which the combination occurs, the Group reports
provisional amounts for the items for which the accounting is
incomplete. Those provisional amounts are adjusted during
the measurement period (see above), or additional assets or
liabilities are recognised, to reflect new information obtained
about facts and circumstances that existed at the acquisition
date that, if known, would have affected the amounts
recognised at that date.
(p) Share Based Payments
Equity-settled share-based payments with employees and
others providing similar services are measured at the fair
value of the equity instrument at the grant date. Fair value is
measured by use of a Black-Scholes-Merton model, which
requires the input of highly subjective assumptions.
The fair value determined at the grant date of the equity-
settled share-based payments is expensed on a straight-line
basis over the vesting period, based on the Group’s estimate
of shares that will eventually vest.
64
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
Equity-settled share-based payment transactions with
other parties are measured at the fair value of the goods
and services received, except where the fair value cannot
be estimated reliably, in which case they are measured at
the fair value of the equity instruments granted, measured
at the date the entity obtains the goods or the counterparty
renders the service.
For cash-settled share-based payments, a liability equal to
the portion of the goods or services received is recognised at
the current fair value determined at each reporting date.
(q) Government Grants
During the previous Financial Year, the Group continued to
be eligible for certain government support in response to the
coronavirus pandemic, as explained in Note 4. The Group’s
accounting policy for government grants is explained below.
Government grants are not recognised until there is reasonable
assurance that the Group will comply with the conditions
attaching to them and that the grants will be received.
Government grants are recognised in profit or loss on
a systematic basis over the periods in which the Group
recognises as expenses the related costs for which the
grants are intended to compensate. Specifically, wage
subsidies received under the JobSaver/JobKeeper schemes
are presented as other income in profit or loss. Government
grants whose primary condition is that the Group should
purchase, construct or otherwise acquire non-current assets
(including property, plant and equipment) are recognised as
deferred income in the consolidated statement of financial
position and transferred to profit or loss on a systematic and
rational basis over the useful lives of the related assets.
Government grants that are receivable as compensation
for expenses or losses already incurred or for the purpose
of giving immediate financial support to the Group with no
future related costs are recognised in profit or loss in the
period in which they become receivable.
The benefit of a government loan at a below-market rate of
interest is treated as a government grant, measured as the
difference between proceeds received and the fair value of
the loan based on prevailing market interest rates.
2. CRITICAL ACCOUNTING JUDGEMENTS
AND KEY SOURCES OF ESTIMATION
UNCERTAINTY
In the application of Saunders’ accounting policies, which are
described in Note 1, the directors of the Group are required
to make judgements, estimates and assumptions about the
carrying amounts of assets and liabilities that are not readily
apparent from other sources. The estimates and associated
assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results may
differ from these estimates.
The estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if
the revision affects only that period, or in the period of the
revision and future periods if the revision affects both current
and future periods.
Key Sources of Estimation Uncertainty
The following are the key assumptions concerning the
future, and other key sources of estimation uncertainty at the
balance date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities
within the next financial year.
Construction contracts
Construction revenue is recognised by management after
assessing all factors relevant to each contract. Significant
management estimation is required in assessing the
following:
y Estimation of total contract revenue, including
determination of contractual entitlement and assessment
of the probability of customer approval of variations and
acceptance of claims;
y Estimation of total contract costs, including revisions to
total forecast costs for events or conditions that occur
during the performance of the contract, or are expected to
occur to complete the contract;
y Estimation of project contingencies; and
y Estimation of stage of completion including determination
of project completion date;
y On 14 April 2023, the Group was terminated from Project
Caymus in Darwin, NT. Management is finalising contract
closure of the project with the client, including estimating
the total contract revenue based on determination of
contract entitlement.
Goodwill
The Group determined whether goodwill is impaired on an
annual basis. This requires an estimation of the recoverable
amount of the CGU’s to which the goodwill is allocated.
65
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
3. REVENUE
Revenue stream
Revenue
recognition
Engineering & Construction
Over time
Services
Over time
Fabrication & Construction
Over time
Total revenue
Australia
$’000
128,360
43,425
29,101
200,886
Other
regions
$’000
-
-
-
-
Total
2023
$’000
128,360
43,425
29,101
Australia
$’000
73,073
24,518
32,364
200,886
129,955
Other
regions
$’000
-
-
-
-
4. PROFIT BEFORE TAX FOR THE YEAR
Note
Other income
JobSaver/JobKeeper subsidy (Government grants)
Profit on sale of property, plant and equipment
Interest Income
Sale of scrap material and other
Total other income
2023
$’000
-
-
132
304
436
Total
2022
$’000
73,073
24,518
32,364
129,955
2022
$’000
744
26
-
127
897
Profit before income tax has been arrived at after (crediting)/charging the following expenses:
Cost of sales
Loss on sale of Property, plant and equipment
166,895
109,250
116
-
The cost of sales above relates to labour, materials and subcontractor costs directly incurred in deriving revenue for the Group
during the financial year.
Depreciation expense
Buildings
Plant, equipment and motor vehicles
Right-of-use-assets
Office furniture and other equipment
Total Depreciation expense
Finance costs
Finance cost on lease liabilities
Other
Total finance costs
Employee benefits expense
Post-employment benefits – defined contributions
Payroll tax expense
Workers compensation insurance
Employee Share Plan
Salary and wages (net of recharge to work-in-progress)
Total employee benefits expense
66
2023
$’000
11
1,607
1,236
182
3,036
338
59
397
4,741
2,897
1,748
684
50,684
60,754
2022
$’000
27
1,364
656
199
2,246
106
-
106
2,114
1,305
596
218
23,476
27,709
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
5. INCOME TAX
Income tax recognised in profit
Income tax expense comprises:
Current income tax (benefit) / expense
Deferred tax expense / (benefit) relating to the origination and reversal of temporary
differences
Total income tax expense
2023
$’000
5,356
(696)
2022
$’000
2,693
135
4,660
2,828
The prima facie income tax expense on pre-tax accounting profit reconciles to income tax expense in the financial
statements as follows:
Profit before taxation
Income tax at 30%
Non-temporary differences
Total income tax expense
Current tax liability
14,151
4,245
415
4,660
9,379
2,814
14
2,828
(2,300)
(2,089)
The income tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate entities
on taxable profits under Australian tax law. There has been no change in the corporate tax rate when compared with the
previous reporting period.
Deferred Tax Balances
The deferred tax expense above is itemised as follows:
Opening
balance
$’000
(Charged)/
Credited to
income
$’000
Business
Combination
$’000
Closing
balance
$’000
881
708
1
218
79
63
281
2,231
(2,020)
(262)
(21)
(2,303)
(72)
115
261
2
63
-
(63)
329
747
(17)
(54)
20
(51)
696
193
1,229
-
-
-
-
-
8
201
(2)
-
-
(2)
199
969
3
281
79
-
618
3,179
(2,039)
(316)
(1)
(2,356)
823
2023
Deferred tax assets
Employee benefits
Provisions
Contract assets
Lease liabilities
Tax losses
Share issue costs
Accruals and other payables
Deferred tax assets
2023
Deferred tax liabilities
Property, plant and equipment
Right of use asset
Other
Deferred tax liabilities
Net deferred tax (liabilities) / assets
67
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
5. INCOME TAX (CONT.)
2022
Deferred tax assets
Employee benefits
Provisions
Contract assets
Lease liabilities
Tax losses
Share issue costs
Accruals and other
Deferred tax assets
2022
Deferred tax liabilities
Property, plant and equipment
Right of use asset
Other
Deferred tax liabilities
Net deferred tax assets / (liabilities)
Opening
balance
$’000
(Charged)/
Credited to
income
$’000
Business
Combination
$’000
Closing
balance
$’000
736
129
4
306
43
63
353
1,634
(1,186)
(366)
(19)
(1,571)
63
145
579
(3)
(88)
36
-
(72)
597
(834)
104
(2)
(732)
(135)
-
-
-
-
-
-
-
-
-
-
-
-
-
881
708
1
218
79
63
281
2,231
(2,020)
(262)
(21)
(2,303)
(72)
68
Annual Report 2023 One Team:
We are better
together when
we collaborate
with each
other and our
customers
69
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
6. TRADE AND OTHER RECEIVABLES
Gross trade and other receivables
Credit loss allowance
Net trade and other receivables 1
2023
$’000
23,191
(92)
23,099
2022
$’000
28,946
-
28,946
A provision matrix is determined based on historic credit loss rates for each group of customers, adjusted for any material
expected changes to the customer’s future credit risk. On that basis, the credit loss allowance as at 30 June 2023 and
30 June 2022 was determined as follows:
Provision matrix
Current
1 to 30 days
30 to 60 days
60 to 90 days
Over 90 days
Contract assets
Receivables
Current
1 to 30 days
30 to 60 days
60 to 90 days
Over 90 days
Gross trade and other
receivables
Allowance based on historic
credit losses
Adjustment for expected
changes in credit risk ¹
Credit loss allowance
Net trade and other
receivables 2
Contract assets (Note 10)
Total receivables and contract
assets
2023
Australia
2023
Other
regions
2022
Australia
2022
Other
regions
0.0%
0.1%
0.2%
0.4%
6.6%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2023
Australia
$’000
2023
Other
regions
$’000
2023
Total Group
$’000
2022
Australia
$’000
2022
Other
regions
$’000
2022
Total Group
$’000
16,466
4,323
434
246
1,281
22,750
-
(92)
(92)
441
-
-
-
-
441
-
-
-
16,907
4,323
434
246
1,281
23,191
-
(92)
(92)
25,038
2,304
148
768
369
319
-
-
-
-
25,357
2,304
148
768
369
28,627
319
28,946
-
-
-
-
-
-
-
-
-
22,658
441
23,099
28,627
319
28,946
33,145
55,803
-
441
33,145
56,244
9,340
37,967
-
319
9,340
38,286
¹ Adjustment to reflect the lower credit risk and probability of default relating to customers that are over 90 days past due. 2 The average credit period on sale of
goods and rendering of services is approximately 35 days. No interest is charged on trade receivables. Each receivable 60 days overdue has been reviewed to
assess whether there is a risk that it might be irrecoverable.
Trade receivables and contract assets are written off when there has been a significant change in the risk characteristics of
a debtor and there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery
include, amongst others, the failure of a debtor to engage in a repayment plan with the Group.
70
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
7. PROPERTY, PLANT AND EQUIPMENT
Impairment Testing
Saunders International Limited reviews the carrying amounts of its tangible assets annually at each reporting date to
determine whether there is any impairment. As at 30 June 2023 the directors reviewed the future budgets of the Group to
determine whether there are any indications of impairment. No indicators of impairment were noted and no impairment
losses are recorded.
Gross carrying amount
Balance at 1 July 2021
Business acquisition
Additions
Disposals
Land at
cost
$’000
Buildings at
cost
$’000
Plant and
Equipment
at cost
$’000
Office
furniture and
equipment
at cost
$’000
Total
$’000
3,400
1,150
15,659
1,117
21,326
-
-
-
-
-
-
-
2,980
(85)
16
144
-
16
3,124
(85)
Balance at 30 June 2022
3,400
1,150
18,554
1,277
24,381
Business acquisition
Additions
Disposals
-
-
-
-
-
-
106
905
(182)
Balance at 30 June 2023
3,400
1,150
19,383
Accumulated depreciation
Balance at 1 July 2021
Reclassification to right-of-use assets
Disposals
Depreciation expense
Balance at 30 June 2022
Reclassification to right-of-use assets
Disposals
Depreciation expense
Balance at 30 June 2023
Net book value
As at 30 June 2022
As at 30 June 2023
-
-
-
-
-
-
-
-
-
121
-
-
27
148
-
-
11
159
3,400
3,400
1,002
991
9,965
(67)
(81)
1,364
11,181
-
(147)
1,607
12,641
7,373
6,742
89
187
(146)
1,407
195
1,092
(328)
25,340
767
10,853
-
-
199
966
-
(103)
182
1,045
311
362
(67)
(81)
1,590
12,295
-
(250)
1,800
13,845
12,086
11,495
71
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
8. LEASES
The Group is lessee to numerous office leases, motor vehicle leases and construction equipment loans. All office leases have
fixed annual rent increases. Motor vehicle leases and equipment loans do not have repayment increases, with instalments
being fixed over the term of the lease. The average lease term for office leases is 3.9 years. The average lease term for motor
vehicles and other equipment is 4.4 years.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease
agreements do not impose any covenants other than security interests in the leased assets that are held by the lessor. Leased
asset may not be used as security for borrowing purposes. This note provides information for leases where the Group is a lessee.
Amounts recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income
includes the following amounts relating to leases:
Depreciation Charge for Right of Use Assets
Total Depreciation Charge for Right of Use Assets
Other cost relating to leases
Interest expense on lease liabilities (included in Finance Costs)
Expenses relating to leases of low value assets
Expenses relating to variable lease payments not included in the measurement of the lease
liabilities
Total costs relating to leases
2023
$’000
1,236
1,236
338
-
-
338
2022
$’000
656
656
106
24
74
204
Amounts recognised in the Consolidated Statement of Financial Position includes the following amounts
relating to leases:
Right of use assets
Gross amount
Opening balance, 1 July 2021
Reallocation
Additions
Balance as at 30 June 2022
Additions
Disposal
Balance as at 30 June 2023
Accumulated depreciation
Opening balance, 1 July 2021
Reallocation
Depreciation expense
Balance as at 30 June 2022
Disposals
Depreciation expense
Balance as at 30 June 2023
Net book value
As at 30 June 2022
As at 30 June 2023
72
Property
Other
1,342
-
73
1,415
679
-
2,094
378
188
294
860
-
398
1,258
555
837
2,172
-
1,790
3,962
2,426
(705)
5,683
602
(121)
362
843
(114)
838
1,567
3,119
4,116
Total
$’000
3,514
-
1,863
5,377
3,105
(705)
7,777
980
67
656
1,703
(114)
1,236
2,825
3,674
4,952
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
8. LEASES (CONT.)
Lease liabilities
Current
Non-Current
Total lease liabilities
Maturity analysis
Year 1
Year 2
Year 3
Year 4
Year 5
Onwards
2023
$’000
1,838
2,647
4,485
2023
$’000
1,838
1,185
805
521
136
-
2022
$’000
1,191
2,328
3,519
2022
$’000
1,191
1,005
646
416
261
-
Total lease liabilities
4,485
3,519
9. TRADE AND OTHER PAYABLES
Current
Trade payables 1
Other payables
Goods and services tax payable
Accruals
Total trade and other payables
2023
$’000
2022
$’000
16,339
17,267
1,148
120
8,120
25,727
1,731
1,960
14,542
35,500
1 Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period taken for trade
purchases is 45 days. For most suppliers no interest is charged on the trade payables for the first 45 days from the date of the invoice.
73
Annual Report 2023 Excellence:
We commit
to delivering
excellence in
everything we do
74
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
10. CONTRACT ASSETS AND CONTRACT LIABILITIES
Contract assets related to contracts
Contract liabilities relating to contracts
Contract assets
2023
$’000
33,145
11,174
2022
$’000
9,340
13,023
Contract assets are balances due from customers under long-term contracts as work is performed and therefore a contract
asset is recognised over the period in which the performance obligation is fulfilled. This represents the Group’s right to
consideration for the services transferred to date. Amounts are generally reclassified to accounts receivable when these have
been invoiced to a customer.
Contract liabilities
Contract liabilities relating to construction contracts are balances due to customers under construction contracts. These
arise if a particular milestone payment exceeds the revenue recognised to date under the percentage cost complete method.
Revenue recognised in the reporting period that was included in the contract liability balance at the beginning of the period
was $13.023 million (2022: $5.68 million). Revenue recognised in the reporting period from performance obligations satisfied
or partially satisfied in previous periods was nil (2022: nil). Partially satisfied performance obligations continue to incur revenue
and costs in the period.
Remaining performance obligations (Work in hand)
Contracts which have remaining performance obligations as at 30 June 2023 and 30 June 2022 are set out below.
Revenue stream
Engineering & Construction
Services
Fabrication & Construction
Total work in hand
2023
$’000
58,672
78,868
21,601
2022
$’000
127,941
17,981
46,973
159,141
192,895
Contracts in the different sectors have different lengths. The average duration of contracts is 12 – 24 months, however some
contracts will vary from these typical lengths. Revenue is typically earned over these varying timeframes, however more of the
revenue noted above is expected to be earned within 12 months.
11. PROVISIONS
Current
Employee benefits
Warranty and maintenance provisions
Total current provisions
Non-current
Employee benefits
Other provisions
Total Non-current provisions
75
2023
$’000
3,287
3,600
6,887
809
-
809
2022
$’000
2,155
2,272
4,427
782
57
839
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
12. ISSUED CAPITAL
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
Ordinary shares
Ordinary shares at beginning of financial year
Shares issued to vendors for acquisitions
Shares issued under Dividend Reinvestment Plan
Shares issued under Employee Share and Performance Rights Plans
Treasury shares vested during the year
Net Treasury shares issued during the year
Ordinary shares at end of financial year
Fully paid ordinary shares
Balance at beginning of financial year
Shares issued to vendors for acquisitions
Shares issued under Dividend Reinvestment Plan
Shares issued under Performance Rights Plan
Shares issued under Employee Share Plan
Net Treasury shares issued (lapsed) during the year
Balance at end of financial year
Treasury shares under employee share plan
Balance at beginning of financial year
Treasury shares vested during the year
Net Treasury shares issued during the year
Balance at end of financial year
Treasury shares under employee share plan
Balance at beginning of financial year
Net Treasury shares lapsed (issued) during the year
Balance at end of financial year
Reserves
Nature and purpose of reserves
(a) Treasury shares under employee share plan
The value of shares bought back are allocated to this reserve.
(b) Share-based payments reserve
2023
Number
2022
Number
105,895,210
103,990,067
1,331,091
-
-
112,880
1,445,496
1,654,588
358,026
622,703
-
(485,028)
109,029,823
105,895,210
2023
$’000
22,482
1,400
-
496
-
(274)
24,104
2023
Number
2022
$’000
20,687
-
93
436
134
1,132
22,482
2022
Number
2,207,950
2,345,625
(358,026)
(622,703)
-
485,028
1,849,924
2,207,950
2023
$’000
(1,806)
331
(1.475)
2022
$’000
(674)
(1,132)
(1,806)
The share-based payments reserve is for the fair value of options granted and recognised to date but not yet exercised, and
treasury shares purchased and recognised to date which have not yet vested.
76
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
12. ISSUED CAPITAL (CONT.)
Employee Share Plan
The Board has approved and implemented an Employee Share Plan (“ESP”).
Under the ESP, the Group provides interest free loans to employees to acquire shares in Saunders International Limited, at a
specified price per share. The loans are secured by the shares acquired by the eligible employees. The shares will vest and
the loans will be repaid, upon a specified anniversary of the issue of the shares. If an eligible employee’s employment with the
Group is terminated prior to the specified anniversary of the issue of the shares, the shares will be forfeited, and the Group will
be entitled to the total amount raised pursuant to the divestment of the shares. The shares are accounted for as in substance
options.
Each employee share option converts into one ordinary share of Saunders International Limited on exercise. No amounts are
paid or payable by the recipient on receipt of the option. The options carry neither right to dividends nor voting rights. Options
may be exercised at any time from the date of vesting to the date of their expiry.
At balance date, a total of 17 tranches of the ESP have been issued.
Tranche 8: Offer of 400,000 shares in January 2016 with all offers accepted. The tranche has been modified, by the Board in
February 2020, to vest in February 2022. During the previous financial year, 400,000 shares vested and there was no forfeiture.
Tranche 9: During the previous financial year 65,000 shares vested and there was no forfeiture.
Tranche 10: During the previous financial year 145,000 shares vested and there was no forfeiture.
Tranche 11: During the previous financial year 95,000 shares vested and there was no forfeiture.
Tranche 12: During the previous financial year 165,000 shares vested and 15,000 shares were forfeited.
Tranche 13: During the current financial year 185,000 shares vested and 90,000 shares were forfeited.
Tranche 14: During the current financial year 100,000 shares were forfeited.
Tranche 15: During the current financial year 120,000 shares were forfeited.
Tranche 16: During the current financial year 10,000 shares were forfeited.
Tranche 17: During the current financial year 114,015 shares were forfeited.
The fair value of the share options granted during the financial year is included in below table. Options have been valued using the
Black-Scholes-Merton pricing model. Expected volatility is based on the historical share price volatility over the past 3 years.
One individual employee holds more than 200,000 options under the ESP
Details of the fair value assumptions used are as follows:
Grant Date
Grant Price
Tranche 8
Tranche 9
Tranche 10
Tranche 11
Tranche 12
Tranche 13
Tranche 14
Tranche 15
Tranche 16
Tranche 17
Jan 2016
Feb 2016
Feb 2017
Oct 2017
Feb 2018
Feb 2019
Feb 2020
Feb 2021
Aug 2021
Feb 2022
$0.58
$0.58
$0.58
$0.50
$0.59
$0.33
$0.38
$0.69
$0.80
$1.02
Opening Volume
400,000
65,000
145,000
95,000
180,000
275,000
397,500
557,500
235,000
485,428
New grants
Exercised
Forfeitures
Closing Volume
Exercise Price
Expected
Volatility
Option Life
-
-
-
-
-
-
-
-
-
-
(400,000)
(65,000)
(145,000)
(95,000)
(165,000)
(185,000)
-
-
$0.58
45%
-
-
$0.58
45%
-
-
$0.58
45%
-
-
$0.50
45%
(15,000)
(90,000)
(100,000)
(120,000)
(10,000)
(114,015)
-
$0.59
45%
-
$0.33
45%
297,500
437,500
225,000
371,413
$0.38
45%
$0.69
45%
$0.80
45%
$1.02
45%
6 years
6 years
5 years
5 years
4 years
4 years
4 years
4 years
4 years
4 years
Dividend Yield
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Risk Free Interest
Rate
Grant date fair
value
2.05%
1.72%
2.00%
2.75%
2.82%
2.82%
2.82%
2.82%
2.82%
2.82%
$0.22
$0.21
$0.22
$0.19
$0.23
$0.12
$0.15
$0.27
$0.31
$0.39
There has been no alteration of the terms and conditions of the above share-based payment arrangements since the grant date.
77
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
12. ISSUED CAPITAL (CONT.)
Movement in share options during the year
The following reconciles the share options outstanding at the beginning and end of the year.
2023
2022
Weighted
average
exercise
price
Number of
options
Weighted
average
exercise
price
Number of
options
Balance at beginning of year
1,950,428
0.67
2,255,000
Granted during the year
Forfeited during the year
Exercised during the year
Balance at end of year
Exercisable at end of year
Performance Rights Plan
-
(434,015)
(185,000)
1,331,413
-
-
0.63
0.33
0.73
-
720,428
(155,000)
(870,000)
1,950,428
-
0.53
0.95
0.48
0.57
0.67
-
The Saunders International Limited Rights Plan was approved by the Board and approved by shareholders at the Annual
General Meeting in October 2015.
The features of the long-term incentive comprises the grant of equity in the form of Performance Rights which vest over a three
year period. The maximum number of Performance Rights will vest only if stretch objectives for each tranche are achieved.
Half of the Performance Rights will vest if the target objectives are achieved. The end of the measurement period for a tranche
of Performance Rights will be extended by up to two years at the Board’s discretion if significantly less than target vesting
would have been achieved for that tranche at the end of the measurement period, adjusted for the pro-rata increase in hurdles
to take into account the additional time. The two vesting conditions that will be used will be relative total shareholder return
(RTSR) and normalised earnings per share growth (NEPSG).
RTSR will be measured by comparing the Group’s TSR over the measurement period with the TSRs achieved by companies
that are in a comparator group and remain listed on the ASX. TSR is the percentage return generated from an investment in a
Group’s shares over the measurement period assuming that dividends are reinvested into the Group’s shares. NEPSG will be
assessed as the compound annual growth rate (CAGR) reflected in the increase in normalised earnings per share (EPS) from
the base year to normalised EPS for the final year of the measurement period. Normalised EPS will relate to normal operations
and will exclude abnormal items as determined by the Board in its discretion.
For the phase in tranches where the measurement period is less than three years, performance will be evaluated by the
Board’s assessment of the establishment of strategic foundations for superior TSR and NESPG over the long-term. For future
grants, it is currently intended that the qualitative vesting conditions will be removed (but retaining TSR and NESPG), and that
measurement periods will be no shorter than 3 years.
The vesting scale will be applied to the tranches subject to objective measurement of Saunders performing relative to the
comparator group and NEPSG, as appropriate, with the vesting scale ranging continuously from 0% for very poor performance
to 100% for very good performance with 50% for on-target performance.
The long-term incentive is aimed at aligning remuneration with the longer term performance of the Group and retaining the
long-term services of the key management personnel.
78
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
12. ISSUED CAPITAL (CONT.)
The Managing Director & Chief Executive Officer and certain Key Management Personnel participate in the Saunders
International Rights Plan. This plan is part of the long-term incentive component of the respective remuneration packages.
The total number of unvested Performance Rights issued under the plan at the beginning of the financial year was 2,937,094.
During the financial year, 1,445,496 rights vested, 318,842 rights were forfeited, 51,652 rights lapsed and 625,770 new rights
were granted.
Details of the fair value assumptions used are as follows:
Tranche 15
Tranche 16
Tranche 17
Tranche 18
Tranche 19
Tranche 20
Tranche 21
Tranche 22
Tranche 23
Tranche 24
1 Sept 2019
1 Sept 2019
1 Sept 2020
1 Sept 2020
1 Sept 2021
1 Sept 2021
1 Sept 2022
1 Sept 2022
9 Jan 2023
13 Mar 2023
$0
$0
$0
$0
$0
$0
Opening Volume
748,574
748,574
374,373
374,373
345,600
345,600
$0
-
$0
-
$0
-
$0
-
5,605
5,605
12,434
12,434
250,093
250,093
44,506
45,000
-
(51,652)
-
-
-
-
(696,922)
(748,574)
-
-
-
-
-
-
-
-
(88,744)
(88,744)
(70,677)
(70,677)
-
-
-
-
-
-
-
-
-
-
-
-
Grant Date
Grant Price
New grants
Lapsed
Forfeited
Vested
Closing Volume
Exercise Price
-
$0
-
$0
291,234
291,234
287,357
287,357
250,093
250,093
44,506
45,000
$0
$0
$0
$0
$0
$0
$0
$0
Expected
Volatility
Option Life
Dividend value
Risk Free Interest
Rate
Grant date fair
value
26.87%
26.87%
26.87%
26.87%
26.87%
26.87%
26.87%
26.87%
26.87%
26.87%
0 years
0 years
0.17 years
0.17 years
1.18 years
1.18 years
2.18 years
2.18 years
0.19 years
0.21 years
$0.06
1.93%
$0.06
1.93%
$0.06
1.93%
$0.06
1.93%
$0.06
1.93%
$0.06
1.93%
$0.06
1.93%
$0.06
1.93%
$0.06
1.93%
$0.06
1.93%
$0.29
$0.29
$0.52
$0.52
$0.70
$0.70
$0.92
$0.92
$1.09
$1.15
There has been no alteration of the terms and conditions of the above share-based payment arrangements since the grant
date and number of options granted were outstanding at the end of the year. The weighted average exercise price of the
Performance Rights is $0.00 per right and the share price on grant date was $0.29 per share for tranches 15 and 16, $0.52 per
share for tranches 17 and 18, $0.70 per share for tranches 19 and 20, $0.92 per share for tranches 21 and 22, $1.09 per share
for tranche 23 and $1.15 per share for tranche 24.
Remaining period refers to the remaining contractual life of the Performance Rights prior to their expiry. Tranche 15 and 16
expired during the current year and therefore, these tranches have nil remaining period at the end of the year. As at year end,
tranches 17 and 18 have 0.17 year, tranches 19 and 20 have 1.17 years, tranches 21 and 22 have 2.18 years, tranche 23 has
0.19 years and tranche 24 has 0.21 years contractual life remaining prior to their expiry. The Performance Rights outstanding at
the end of the year has a weighted average remaining contractual life of 1.08 years.
79
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
13. RETAINED EARNINGS
Balance at beginning of financial year
Profit after tax for the year
Dividends provided for or paid
Balance at end of financial year
14. EARNINGS PER SHARE
Basic earnings/(losses) per share
Diluted earnings/(losses) per share
2023
$’000
10,965
9,491
(4,382)
16,074
2022
$’000
7,358
6,551
(2,944)
10,965
2023
Cents
per share
2022
Cents
per share
8.84
8.71
6.24
6.07
The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows:
Net profit/(loss)
Earnings used in the calculation of basic and diluted EPS
Weighted average number of ordinary shares for the purposes of basic earnings per share
Diluted earnings per share
Weighted average numbers of ordinary shares and potential ordinary shares used in the
calculation of diluted earnings per share reconciles to the weighted average number of
ordinary shares used in the calculation of basic earnings per share as follows:
2023
$’000
9,491
9,491
2023
No.’000
107,329
2022
$’000
6,551
6,551
2022
No.’000
104,955
Weighted average number of ordinary shares used in the calculation of basic EPS
107,329
104,955
Shares deemed to be issued for no consideration in respect of employee options and
performance rights 1
1,694
2,955
Weighted average number of ordinary shares and potential ordinary shares used in the
calculation of diluted earnings per share
109,023
107,910
1 During the year ended 30 June 2023 a portion of the potential ordinary shares associated with the employee share option plan as set out in Note 12 are dilutive
and therefore included in the weighted average number of ordinary shares for the purposes of diluted earnings per share. The potential ordinary shares associated
with the Performance Rights are dilutive and have been included in the weighted average number of ordinary shares for the purposes of diluted earnings per share.
80
Annual Report 2023 Innovation:
We continually
challenge
ourselves to
create innovative
solutions for our
customers
81
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
15. DIVIDENDS
Recognised amounts
Fully paid ordinary shares
Final dividend (prior year)
Fully franked at a 30% tax rate
Interim dividend (current year)
Fully franked at a 30% tax rate
Unrecognised amounts
Fully paid ordinary shares
Final dividend (current year):
2023
2022
Cents
per share
Total
$’000
Cents
per share
Total
$’000
2.00
2,191
1.75
1,863
2.00
4.00
2,191
4,382
1.00
2.75
1,081
2,944
2.00
2,218
2.00
2,162
The Board declared on 28 August 2023 that there will be a final dividend payable of 1.00 cents per share fully franked and
special dividend of 1.00 cents per share fully franked (2022 1.00 cents final dividend and 1.00 cents special dividend). Both
dividends will be payable on 16 October 2023 with the record date for determining dividends on 18 September 2023.
Adjusted franking account balance
16. SEGMENT INFORMATION
2023
$’000
7,020
2022
$’000
3,098
The Group operates in one reporting segment being the provision of design, construction, fabrication, shutdown, maintenance
and industrial automation services to leading organisations of steel storage tanks and concrete bridges.
In the current period 3 customers made up 58% of the revenue earned (2022: 3 customers made up 53% of the revenue
earned). These customers accounted for $115,791 million of the Groups’ total revenue (2022: $69,220 million).
17. CONTINGENT LIABILITIES AND CONTINGENT ASSETS
There are a number of commercial and legal claims and exposures that may arise from the normal course of the Group’s
business in respect of which no provision has been made.
82
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
18. NOTES TO THE STATEMENT OF CASH FLOWS
(a) Cash and cash equivalents
For the purposes of the statement of cash flows, cash and cash equivalents includes cash on hand and in banks and
investments in money market instruments. Cash and cash equivalents at the end of the financial year as shown in the
statement of cash flows is reconciled to the related items in the statement of financial position as follows:
Cash and cash equivalents
12,833
36,746
(b) Reconciliation of profit/(loss) for the year to net cash flows from operating activities
2023
$’000
2022
$’000
Profit for the year
Share-based payments expense
Depreciation
Loss (gain) on disposal of non-current assets
Unrealised foreign exchange loss
(Increase)/decrease in assets:
Current tax liability
Deferred tax assets
Deferred tax liabilities
Trade and other receivables
Contract assets
Inventories
Other assets
Increase/(decrease) in liabilities:
Trade and other payables
Contract liabilities
Provisions
Net cash (outflow) / inflow from operating activities
(c) Financing facilities
9,491
684
3,036
116
(2)
351
(623)
(73)
7,260
(23,805)
53
(4)
(10,519)
(1,849)
1,788
(14,096)
6,551
218
2,246
(26)
(95)
1,565
63
72
(18,687)
(6,466)
(26)
(41)
24,806
7,340
2,243
19,763
The Group’s principal financing facilities for the provision of bank guarantees and bonding as described in Note 19 is
secured by a fixed and floating charge over the assets of the Group.
Amount used
Amount unused
25,698
14,302
40,000
18,551
11,449
30,000
The facilities have financial covenants relating to the Group’s capital adequacy ratio and its leverage ratio. During the financial
year, the total facilities increased from $30 million to $40 million.
(d) Asset and liabilities
The table below details changes in the Group’s liabilities arising from financing activities, including both cash and non-cash
changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified
in the Group’s consolidated statement of cash flows from financing activities.
Balance at
1 July 2022
$’000
Financing
Cash Flows1
$’000
Non -Cash
Movement
in Finance
Leases
$’000
Balance
at 30 June
2023
$’000
Lease liabilities
3,519
(2,113)
3,079
4,485
1 Financing cash flows comprise of repayment of borrowings and payments in relation to finance leases.
83
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
19. FINANCIAL INSTRUMENTS
The Group has three significant categories of financial
instruments which are described below together with the
policies and risk management processes which the
Group utilises:
(a) Cash and cash equivalents
The Group deposits its cash and cash equivalents with
Australian banks. Funds can be deposited in cheque
accounts, cash management accounts and term deposits.
The policy is to utilise at least two Australian banks for cash
management accounts and term deposits.
(b) Debtors and credit risk management
The Group has a credit risk policy to protect against the
risk of debtor default. The majority of the Group’s debtors
are long-term customers and are multinational oil and gas
companies, government authorities and large Australian
corporations where the credit risk is considered to be low.
Categories of financial instruments
Financial assets
Cash and cash equivalents
Accounts receivables
Total financial assets
Financial liabilities
Trade and other payables
Lease Liabilities
Total financial liabilities
New customers are assessed for credit risk using credit
references and reports from credit agencies as necessary.
(c) Bank guarantees and insurance bonds
The Group has a preference to provide bank guarantees or
bonding to customers in lieu of the cash retention required under
contracts. This preference is pursued subject to specific contract
requirements and the Group’s finance facility requirements.
Capital risk management
The Group’s capital structure currently consists of equity
and retained earnings. The only external long-term debt or
short-term debt relates to lease liabilities. The operating
cash flows of the Group are used to finance short-term
capital expenditure. The Group’s capital risk management is
continuously reviewed and adjusted based on surplus cash
available for investment.
2023
$’000
12,833
23,099
35,932
17,487
4,485
21,972
2022
$’000
36,746
28,946
65,692
18,998
3,519
22,517
Obligations under finance leases
Liquidity risk management
Leasing arrangements
The Group leases certain of its construction equipment under
finance leases. The average lease term is 4.3 years. The
Group’s obligations under finance leases are secured by the
lessor’s title to the leased assets.
Financial risk management objectives
The Group’s exposure to market risk mainly arising from
interest rate risk (including currency risk, fair value interest
rate risk and price risk) and cash flow interest rate risk, is
disclosed in the interest rate sensitivity analysis below. Credit
risk is monitored monthly through continuous management of
the ongoing projects.
Ultimate responsibility for liquidity risk management rests with
the board of directors, who have built an appropriate liquidity
risk management framework for the management of the
Group’s short, medium and long-term liquidity management
requirements. The Group manages liquidity risk by continually
monitoring and maintaining adequate banking facilities. Cash
flows are monitored and matched to the maturity profiles of
financial assets and liabilities.
Liquidity and interest risk tables
The following table details the Group’s remaining contractual
maturity for its non-derivative financial assets and liabilities.
The tables have been drawn up based on the undiscounted
cash flows of financial assets and liabilities based on the
earliest date on which the Group can be required to receive or
pay. The table includes both interest and principal cash flows.
84
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
19. FINANCIAL INSTRUMENTS (CONT.)
2023
Financial assets
Cash and cash equivalents
Trade receivables
Financial liabilities
Trade payables and other payables
Lease liabilities
2022
Financial assets
Cash and cash equivalents
Trade receivables
Financial liabilities
Trade payables and other payables
Lease liabilities
Weighted
average effective
interest rate
%
Less than
1 month
$’000
1 to 3
months
$’000
3 months to
5 years
$’000
Total
$’000
0.51%
0.00%
0.00%
6.76%
0.54%
0.00%
0.00%
5.0%
12,833
16,815
5,936
158
36,746
27,661
4,668
100
-
5,003
11,333
321
-
916
12,947
201
-
1,281
218
4,006
-
369
1,383
3,218
12,833
23,099
17,487
4,485
36,746
28,946
18,998
3,519
Interest rate sensitivity analysis
The sensitivity analysis has been determined based on exposure
to interest rates for cash and cash equivalents that were subject
to interest rate fluctuations at the reporting date. At reporting
date, if interest rates had been 1% higher or lower and all other
variables were held constant, the Group’s profit or loss would
increase or decrease by $61 thousand (2022: $163 thousand).
Foreign currency risk
The Group manages its foreign currency risk arising from
significant supplier contracts in foreign currencies by holding
foreign currency. As a result of operations in Papua New
Guinea the Group’s statement of financial position can be
affected by movements in the PGK/A$ exchange rate. The
Group also has transactional currency exposures. Such
exposure arises from sales or purchases by an operating
entity in currencies other than the functional currency. Where
possible, Saunders does not take on foreign exchange risk.
At 30 June 2023, the Group had no forward contracts.
The Group also mitigates its exposure to foreign currency risk
by minimising excess foreign currency balances in overseas
jurisdictions not required for working capital. At 30 June 2023,
the Group had A$77 thousand (2022: $688 thousand) of cash
in PGK. At reporting date, if the PKG/AUD exchange rate
had moved by 5%, with all other variables held constant, the
group’s profit or loss would increase or decrease by
$4 thousand (2022: $34 thousand).
Fair value of financial instruments
No financial asset or financial liability is held at fair value. The
directors consider the fair value of the financial assets and
financials liabilities to approximate their carrying amounts.
85
Annual Report 2023 Integrity: We hold
ourselves to the
highest standards
and deliver on our
commitments
86
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
20. INTANGIBLE ASSETS
Goodwill
Balance at beginning of financial year
Additions through business combinations
- PlantWeave Technologies
- Automation IT
Balance at end of financial year
2023
$’000
321
-
3,657
3,978
2022
$’000
-
321
-
321
On 30 July 2021, the Group acquired PlantWeave Technologies (PlantWeave), a specialist in industrial process automation and
electrical solutions. The purchase was made with the Group’s cash reserves and resulted in recognition of intangible assets of
$321 thousands. The nature of this amount is Goodwill arising from the acquisition of PlantWeave Technologies. Refer to Note
21 for details of the acquisition of Automation IT Pty Limited, effective from 1 April 2023, and detailed calculation of goodwill
recognised in relation to the acquisition.
Goodwill acquired through business combinations is allocated to the lowest level within the entity at which the goodwill is
monitored, being the two cash generating units (or ‘CGU’s) – PlantWeave and Automation IT. The assessment of goodwill
recoverable amounts was determined based on value-in-use calculations using cash flow projections, which are based on
approved strategic plans or forecasts, and discounted to their present value. Based on the assessment as at 30 June 2023,
no impairment of goodwill was identified in any of the Group’s CGU’s.
21. ACQUISITION OF SUBSIDIARIES
Automation IT Pty Limited
Saunders announced the acquisition of Automation IT Pty Limited (AIT) on 9 May 2023. Under the terms of the Share Purchase
Agreement (SPA), 100% of the issued share capital and control of AIT was effectively acquired on 1 April 2023. AIT is a
specialist automation and control systems engineering business operating in the energy, water, defence and mining industries.
It qualifies as a business as defined in AASB3 Business Combinations. It was acquired to further expand and diversify
Saunders capabilities across industrial automation and technology solutions following the 2021 acquisition of Saunders
PlantWeave (formerly PlantWeave Technologies). The amounts recognised in respect of the identifiable assets acquired and
liabilities assumed are set out in the table below.
Financial assets
Property, plant and equipment
Financial liabilities
Deferred tax assets / (liabilities)
Total identified assets acquired and liabilities assumed
Goodwill
Total Consideration¹
Satisfied by:
Cash
Equity
Total consideration transferred¹
Net cash outflow arising on acquisition:
Cash consideration
Less: cash and cash equivalent balances acquired
2023
$’000
1,798
195
(1,449)
199
743
3,657
4,400
3,000
1,400
4,400
3,000
(246)
2,754
¹ There remains an element of deferred cash payments which may or may not be payable based on the Earn-Out consideration conditions within the SPA. Under
the terms of the SPA, the final instalment will be a maximum of $1.10 million based on 4.00x AIT’s Earnings Before Interest and Tax (‘EBIT’) for the year ending 30
June 2024. If the earn-out consideration conditions are achieved, it will be payable in cash ($0.825m) and equity ($0.275m). Based on the total maximum price of
$5.50 million, the consideration will be cash (70%) and equity (30%).
87
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
22. DIRECTORS AND KEY MANAGEMENT PERSONNEL COMPENSATION
The board of directors approves on an annual basis the amounts of compensation for directors and key management
personnel with reference to the Group’s performance and general compensation levels in equivalent companies and industries.
(a) Remuneration of Directors and Key Management Personnel
Short-term employee benefits
Post-employment benefits
Share-based payments
Total remuneration of directors and key management personnel
2023
$
2022
$
1,794,800
1,481,281
83,997
71,227
156,117
146,232
2,034,914
1,698,740
The names of and positions held by the key management are set out in the Remuneration Report on page 42. Further details of
the remuneration of key management are disclosed in the Remuneration Report.
(b) Other Transactions with Key Management Personnel
There were no transactions with directors and other key management personnel apart from those disclosed in this note.
(c) Directors’ and Key Management Equity Holdings
Refer to the table in the Remuneration Report on page 42.
23. SUBSIDIARIES
Details of the Group’s material subsidiaries at the end of the reporting period are as follows.
Proportion of ownership interest
and voting power held by the Group
2023
100%
100%
100%
100%
100%
2022
100%
100%
100%
100%
100%
-
-
Name of Subsidiary
Saunders Civilbuild Pty Ltd
Saunders Property (NSW) Pty Ltd
Place of
incorporation
and operation
Australia
Australia
Principal activity
Bridge
construction and
maintenance
Real property
investments
Saunders Asset Services Pty Ltd
Maintenance
Australia
Saunders PNG Limited
Saunders PlantWeave Pty Ltd
Saunders International (NZ) Ltd
Automation IT Pty Ltd
Tank construction
and maintenance
Industrial
automation
Tank construction
and maintenance
Industrial
automation
PNG
Australia
New Zealand
100%¹
Australia
100%2
1 Saunders International (NZ) Ltd was incorporated on 1 June 2023 2 Saunders acquired Automation IT Pty Ltd with effect from 1 April 2023.
88
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
24. PARENT ENTITY INFORMATION
The accounting policies of the parent entity, which have been applied in determining the financial information shown below, are
the same as those applied in the consolidated financial statements except as set out below. See Note 1 for a summary of the
significant accounting policies relating to the Group.
Investments in subsidiaries, associates and joint ventures
Investments in subsidiaries, associates and joint ventures are accounted for at cost. Dividends received from subsidiaries,
associates and joint ventures are recognised in profit or loss when a right to receive the dividend is established (provided that it
is probable that the economic benefits will flow to the Parent and the amount of income can be measured reliably).
Tax consolidation
The company and its wholly owned Australian resident entities are members of a tax-consolidated group under Australian tax
law. The company is the head entity within the tax-consolidated group. In addition to its own current and deferred tax amounts,
the company also recognises the current tax liabilities and assets and deferred tax assets arising from unused tax losses and
relevant tax credits of the members of the tax-consolidated group.
Amounts payable or receivable under the tax-funding arrangement between the company and the entities in the tax
consolidated group are determined using a ‘separate taxpayer within group approach to determine the tax contribution
amounts payable or receivable by each member of the tax-consolidated group. This approach results in the tax effect of
transactions being recognised in the legal entity where that transaction occurred, and does not tax effect transactions that
have no tax consequences to the group. The same basis is used for tax allocation within the tax-consolidated group.
Summary financial information
The individual financial statements for the parent entity, Saunders International Limited show the following aggregate amounts:
Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Total Net Assets
Equity
Issued capital
Shares buy-back reserve under employee share plan
Share based payments reserve
Retained earnings
Total equity
Financial Performance
Profit for the year
Other comprehensive income
Total comprehensive income
The parent entity has no capital commitments.
89
2023
$’000
53,122
25,655
78,777
37,251
1,291
38,542
40,235
24,104
(1,475)
572
17,034
40,235
2023
$’000
10,845
-
10,845
2022
$’000
58,355
17,473
75,828
42,644
1,563
44,207
31,621
22,482
(1,806)
384
10,561
31,621
2022
$’000
7,640
-
7,640
Annual Report 2023 FINANCIAL REPORT (cont.)
Notes to the Financial Statements (cont.)
25. REMUNERATION OF AUDITOR
Audit or review of the financial report
Other services
Total Auditor’s remuneration
The auditor of Saunders International Limited is Deloitte Touche Tohmatsu.
26. SUBSEQUENT EVENTS
2023
$
2022
$
317,507
185,000
-
4,075
317,507
189,075
Subsequent to year end, management are continuing to finalise the contract with our client in relation to Project Caymus
in Darwin, NT.
Other than the above, there have been no other matters or circumstances occurring subsequent to the end of the financial
year, that have significantly affected, or may significantly affect, the operations of the Group, the results of those operations,
or the state of affairs of the Group in future financial years.
27. ADDITIONAL COMPANY INFORMATION
General Information
Saunders International Limited is incorporated and operating in Australia.
Saunders International Limited’s registered office and its principal place of business is as follows:
Registered office
Suite 2.04, Level 2 Building F
Principal place of business
Suite 2.04, Level 2 Building F
Rhodes Corporate Park, 1 Homebush Bay Drive
Rhodes Corporate Park, 1 Homebush Bay Drive
Tel: (02) 9792 2444
Tel: (02) 9792 2444
90
Annual Report 2023 We act with
respect to
our people,
customers,
communities
and the
environment
91
Annual Report 2023 The Board of Saunders
International Limited
has adopted a suite of
Corporate Governance
Practices to ensure that
the company effectively
identifies, monitors and
manages risks, with the
appropriate disclosures.
92
92
Annual Report 2023
Annual Report 2023CorporateGovernance In developing and adopting the Practices, the Board
considered the fourth edition of the ASX Corporate
Governance Principles and Recommendations. The Board
incorporates the Principles and Recommendations into its
Practices to the extent that they are appropriate, taking into
account the Company’s size, activities and resources.
The Board has adopted the following Charters, Policies
and Codes:
THE BOARD CHARTER
The Board Charter sets out matters relating to the
responsibilities of the Board and its directors and matters
relating to the composition of the Board and appointment
of directors.
BOARD COMMITTEES AND THEIR
CHARTERS
In order to better manage its responsibilities, the Board
has established an Audit and Risk Committee and a
Remuneration Committee. Each committee has adopted a
Charter approved by the Board.
POLICIES AND CODES OF CONDUCT
The Company has adopted Policies and Codes of Conduct
which are available on the Company’s website.
CORPORATE GOVERNANCE STATEMENT
AND APPENDIX 4G
The Company reports on an annual basis, its compliance and/
or reasons for non-compliance with the fourth edition of the
ASX Corporate Governance Principles and Recommendations.
The Corporate Governance Statement and the Appendix 4G
have been released on the ASX The Corporate Governance
Statement and the Appendix 4G have been released on the
ASX Announcements platform and are on the Company’s
website. Further information on the above Charters Policies
and Codes can be found on the Company’s website
www.saundersint.com/investors/corporate-governance/.
93
93 Annual Report 2023
Annual Report 2023CorporateGovernance ORDINARY SHARE CAPITAL
There are 105,895,210 fully paid ordinary shares held by 554 individual shareholders. In addition, there are 2,207,950 shares
issued to employees under the Employee Share Purchase Plan (ESP). There ESP shares are not included for the purpose of
calculating the totals and percentages used in this section. There are no options issued.
SUBSTANTIAL SHAREHOLDERS
Substantial shareholders
NAOS Asset Management
Mr Desmond Bryant
Anacacia Pty Ltd (Wattle Fund)
Mr Timothy Burnett
Distribution of shares
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and Over
Total
NO. OF SHARES
PERCENTAGE
26,431,554
24,316,811
12,369,453
11,686,311
24.57%
22.58%
11.49%
10.85%
106
148
76
194
47
571
Twenty largest registered holders name
NO. OF SHARES
PERCENTAGE
National Nominees Limited
Mr Desmond Bryant
Anacacia Pty Ltd
Debry Pty Ltd
Tivolico Pty Ltd
Marlot Pty Ltd
Mr John Power
Benson Family Holdings P/L
Effjay Holdings Pty Limited
Citicorp Nominees Pty Limited
R & B Invest Pty Ltd
Pacbay Pty Ltd
Sagimo Holdings Pty Ltd
Mrs Karyn May Mcclelland
Donald Cant Pty Ltd
Parmelia Pty Ltd
Mr Robert Graburn Patterson
Woodscenic Pty Ltd
Flagstaff Superannuation Pty Ltd
Mr Ronald Mcphail
Total
94
28,763,860
13,322,343
12,369,453
8,677,667
6,878,987
4,807,324
3,401,453
2,918,286
2,316,801
1,780,464
1,700,000
1,699,289
1,301,208
1,229,012
1,057,931
755,969
553,530
437,970
419,134
400,000
26.71%
12.37%
11.49%
8.06%
6.39%
4.46%
3.16%
2.71%
2.15%
1.65%
1.58%
1.58%
1.21%
1.14%
0.98%
0.70%
0.51%
0.41%
0.39%
0.37%
94,790,681
88.01%
Annual Report 2023Shareholder Information NICK YATES
CHAIRMAN
GREG FLETCHER
NON-EXECUTIVE DIRECTOR
Nick has over 35 years of experience in engineering services
and construction. He has held several CEO and Board
positions in both listed and private companies, including
Chief Executive, Infrastructure ANZ at Transfield Services,
followed by Chief Executive Officer and now Chairman of
ASX-listed BSA Limited.
Nick was appointed to the Saunders Board in September
2020 and has since served as a Non-Executive Director and a
member of the Remuneration Committee and Audit and Risk
Committee. He was appointed Chairman on 1 July 2023.
Greg is a company director who retired from the Deloitte
partnership in 2009 to pursue board roles.
He currently holds the position of Co-Vice Chairman at
Yancoal Australia Limited and serves as Chairman of the
NSW Electoral Commission and NSW eHealth / HealthShare
Audit & Risk Committees. Additionally, he is a member of the
NSW Police Force and the NSW Health Infrastructure Audit &
Risk Committees.
Greg has been a Director on the Saunders Board since July
2015 and is Chairman of the Audit and Risk Committee and
member of the Remuneration Committee.
MARK BENSON
MANAGING DIRECTOR AND
CHIEF EXECUTIVE OFFICER
BRENDAN YORK
NON-EXECUTIVE DIRECTOR
With an executive career spanning 30 years, Mark is a
seasoned leader in the engineering and construction industry.
Prior to joining Saunders, Mark served as the General
Manager of RCR Energy, a division of ASX-listed RCR
Tomlinson. He also held senior executive positions with
RICO, HIS Engineering, VRBT Group and major utility
alliances including AGL, Origin, and NRG.
Mark was appointed as Managing Director and
Chief executive Officer, and a Director of the Saunders
Board in 2015.
Brendan is an experienced executive and director. He is
currently a Portfolio Manager with NAOS Asset Management
Ltd (NAOS), a substantial and significant shareholder in
Saunders. Brendan has over 19 years of finance, accounting,
and M&A experience.
He currently serves as a Non-Executive Director for the
following ASX-listed companies: Big River Industries Limited
(BRI), BSA Limited (BSA), BTC Health Limited (BTC), and
Wingara AG Limited (WNR).
Brendan joined the Saunders Board in July 2023. He is the
Chair of Saunders’ Remuneration Committee and a member
of the Audit and Risk Committee.
TIMOTHY BURNETT
NON-EXECUTIVE DIRECTOR
BRETT GREGORY
CHIEF FINANCIAL OFFICER
AND COMPANY SECRETARY
Timothy brings to the board over 50 years of experience in
managing engineering and construction projects and companies,
including 15 years as Managing Director of Saunders.
Before joining Saunders, he held a senior management
position with Brown & Root Inc for nine years, overseeing the
construction of marine oil and gas facilities across Europe,
Asia, and Australia.
Timothy has been a Director on the Saunders Board since 1990,
serving as Chairman for 16 years. He transitioned from this role
in July 2023 as part of the ongoing board renewal process and
continues to serve as a Non-Executive Director of the Board.
He is a member of the Audit and Risk Committee and the
Remuneration Committee.
Brett is an accomplished financial leader and was
permanently appointed Saunders’ Chief Financial Officer and
Company Secretary in August 2023. This follows his initial
interim engagement as interim Chief Financial Officer from 9
January 2023 and his appointment as Company Secretary
from 28 February 2023.
Prior to joining Saunders, Brett spent 18 years at Lendlease
in various Executive and General Manager roles in Finance,
including five years as the Chief Financial Officer for
Lendlease’s Australian Construction business.
95
Annual Report 2023Board of Directors information and profiles
Saunders Asset Services
ABN 95 610 760 426
Saunders Property Group
ABN 39 617 486 021
Lot 4740, 2 Cochrane Rd
East Arm NT 0822
Unit 2 / 100 Champion Rd
Newport VIC 3015
Automation IT
ABN 92 093 758 564
Unit 7, Springwood Business Centre
Cnr. Murrajong Rd & Pacific Hwy
Springwood QLD 4127
Phone (07) 3299 3844
Unit A2, Airport Park
20 Tarlton Cr
Perth WA 6105
(08) 6102 3144
Saunders International Sydney
ABN 14 050 287 431
Level 2, 1F Homebush Bay Dr
Rhodes NSW 2138
Phone (02) 9792 2444
Saunders Civilbuild
ABN 86 617 431 562
Level 5, 250 Pacific Hwy
Charlestown NSW 2290
74 Kalaroo Rd,
Redhead NSW 2290
Phone (02) 4946 0266
Saunders PlantWeave
ABN 14 652 303 305
Unit 10, 47-48 Buffalo Rd
Gladesville NSW 2111
Phone (02) 9848 4488
Saunders (PNG) Limited
1-114512
Ground Floor, Century 21 House
Lot 51, Section 35 Kunai St
Hohola National Capital District
Papua New Guinea
Saunders International (NZ) Limited
NZBN 9429051370466
Level 2, 142 Broadway
Newmarket Auckland NZ 1023
Board of Directors
Nick Yates - Chairman
Mark Benson - Managing Director and
Chief Executive Officer
Timothy Burnett - Non-Executive Director
Greg Fletcher - Non-Executive Director
Brendan York - Non-Executive Director
Brett Gregory - Company Secretary
Auditors
Deloitte Touche Tohmatsu
Eclipse Tower
Level 19 60 Station St
Parramatta NSW 2150
Principal Banker
Commonwealth Bank
Corporate Financial Services
Level 1, 430 Forest Rd
Hurstville NSW 2220
Share Register Link Market
Services Limited
Level 12, 680 George St
Sydney NSW 2000
Phone (02) 8280 7111
Stock Exchange Listing
Australia Securities Exchange
20 Bridge St
Sydney NSW 2000
Website
www.saundersint.com
For the Financial Year ended 30 June 2023
ABN 14 050 287 431
Saundersint.com
@saunders-international-limited
96
Annual Report 2023Corporate DirectorySaunders International Limited