2024
ANNUAL REPORT
Annual Report 2024
b
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.
Annual Report 2024
Annual Report 2024
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ABOUT THIS REPORT
The Saunders 2024 Annual Report is a summary
of Saunders International Limited’s operations,
performance and financial position for the Financial
Year ended 30 June 2024.
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’, ‘2024’, ‘FY24’,
or ‘FY2024’ all refer to the Financial Year ended
30 June 2024. All dollar figures are expressed in
Australian dollars unless otherwise stated.
Contents
About Us................................................................................2
Performance Highlights.....................................................4
Chairman’s Message...........................................................6
Managing Director and CEO’s Message.......................8
Safety.................................................................................... 10
People and Capability...................................................... 12
Client Focus.........................................................................14
Innovation............................................................................ 16
Sustainability....................................................................... 18
Operations.......................................................................... 20
Markets................................................................................ 22
Defence & Government.................................................. 24
Energy.................................................................................. 28
Water.................................................................................... 30
Resources & Industrials................................................... 32
Governance, Financial Report and Other....................34
Annual Report 2024
Annual Report 2024
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About Us
Our Partnerships
We take pride in our work with some of the world’s largest
energy companies, leading construction contractors, and
various levels of government. As trusted partners with a proven
track record of long-term, repeat clients, we are dedicated to
delivering exceptional value to both our clients and investors.
Delivering Solutions
Our partnerships are centred on providing solutions, not
problems. Our success is fuelled by specialised teams that
work collaboratively with our clients to identify, optimise, and
deliver tailored solutions.
Working together with our
clients as 'OneTeam' to
provide certainty in a fast
evolving environment.
Our Team
With a national team of over 500 employees, we are
committed to delivering solutions that meet the highest
standards of quality and safety, regardless of a project’s size,
complexity, value, or location.
Our Presence
With metropolitan and regional offices strategically located
across Australia, and established operations in Papua New
Guinea and New Zealand, we are well-positioned to serve our
clients’ needs.
We are a trusted partner supporting
our clients across all aspects of the
asset lifecycle, covering design,
build and maintenance, focusing on
these key markets.
Saunders provides a
multidisciplinary, integrated
offering across the complete asset
lifecycle, specialising in bulk fluid
storage and transfer solutions.
PARTNERS AND COLLABORATORS
Our portfolio blends traditional
construction contracts with annuity-
style earnings. We focus on creating
a diverse portfolio that minimises risk
and delivers earnings consistency.
RESILIENT PORTFOLIO
EXPERT CAPABILITY
RESOURCES & INDUSTRIALS
DEFENCE & GOVERNMENT
ENERGY
WATER
Bulk Fluid Storage
Structural, Mechanical and Piping (SMP)
Civil Infrastructure
Industrial Asset Services
Industrial Automation and Electrical
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02
04
05
03
Annual Report 2024
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Annual Report 2024
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Saunders is an integrated industrial engineering and
construction company, proudly Australian-owned and
operated since its founding in 1951 and listed on the
Australian Securities Exchange (ASX: SND) since 2007.
KEY
Office locations
Major projects in delivery
Annual Report 2024
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8
metropolitan &
regional offices
41
major projects
in delivery*
*As at July 2024.
Annual Report 2024
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Performance
Highlights
In 2024, we focused on the strategic
evolution and targeted growth of
our business and operations.
We made significant investments to secure our immediate
pipeline and position ourselves for long-term opportunities
in our key markets: Defence & Government, Energy, Water,
Resources & Industrials.
We continue to leverage our multidisciplinary offering,
enhanced by the acquisition of Piping Solutions, effective
31 October 2023. Our robust pipeline of opportunities
demonstrates the Group’s diversification across our
core capabilities and includes a mix of new and existing
customers, as well as key positioning on larger
integrated projects.
1. All comparisons are against Financial Year 2023 unless otherwise stated.
Adjusted NPAT2
11.9% from $10.1m adjusted
$11.3m
Cash
54.7% from $12.8m
$19.8m
Revenue
7.6% from $200.9m
$216.1m
$9.3 million
Contract at Ampol’s Lytton Refinery
Future Fuels Desulphurisation Project
The scope includes the design and
construction of a new 31-metre-wide,
20-metre-high jet fuel storage tank
and will comply with the strict quality
assurance requirements associated
with the storage and distribution of
aviation fuels to airports.
Announced 6 July 2023
$31.5 million
Contract at Kalgoorlie Consolidated
Gold Mines (KCGM) in Western Australia
The CIL3 Tanks Replacement
project at Kalgoorlie Consolidated
Gold Mines (KCGM), awarded by
Northern Star Resources, involves
the reconstruction and upgrade of six
carbon-in-leach (CIL) tanks, along with
associated pipework, structural steel,
and interconnecting launders.
Announced 5 August 2024
Strategic Partnership
Signing of a Memorandum of
Understanding (MOU) with Optimal
Renewable Gas (ORG)
A strategic partnership to facilitate the
establishment of biomethane facilities
throughout Australia, exemplifying our
deepening involvement in the new
energy sector. The agreement marks
a significant step towards enhancing
Australia’s renewable
energy infrastructure.
Partnership announced 6 February 2024
$44.2 million
Contract to expand diesel storage capacity
at Quantem’s Pelican Point Terminal
The scope of work includes
detailed design, procurement,
construction, fabrication, installation,
and commissioning of three 30,000
cubic metre diesel storage tanks and
associated interconnecting piping,
automation and electrical upgrades
adding significant new diesel storage
capacity for the fuel industry in
South Australia.
Announced 31 July 2023
$17.7 million
New water sector contracts reinforcing
our commitment to the sector
New Bald Hill Tanks, Sunbury, VIC: The
project is being delivered for Aqua Metro
on behalf of Greater Western Water, who
are a repeat Saunders end-client.
Marsfield Reservoir New Build, Marsfield,
NSW: Contracted by Confluence Water
to deliver the project for Sydney Water,
marking Saunders’ fourth tank project
with Sydney Water in the last five years.
Announced 30 May 2024
$20.59 million
New civil infrastructure projects across NSW
Each of the four projects involves
demolishing an existing bridge and
designing and constructing a new concrete
bridge. Funded by local councils, the NSW
Government, and the Federal Government,
these projects aim to ensure that local road
networks are safer and fit for purpose for
years to come.
Announced 7 August 2024
MAJOR PROJECTS SECURED
Annual Report 2024
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2. The FY24 and FY23 Statutory EBITDA, EBITDA Margin, NPAT and Earnings per share have been adjusted to add back the impact of acquisition related
expenses incurred by Saunders which are considered non-recurring. See page 36 for further details.
Pipeline
25% from $1.6b at 31 July 2023
$2.0b at 31 July 2024
Order book
5.8% from $201.0m at 31 July 2023
$189.3m at 31 July 2024
Annual dividend distribution
6.25% from 4.0¢
4.25¢
Adjusted earnings per share (basic)2
5.4% from 9.45¢ adjusted
9.96¢
Adjusted EBITDA2
17.7% from $18.1m adjusted
$21.3m
Adjusted EBITDA margin2
9.6% from 9.0% adjusted
9.9%
Our First Reconciliation Action Plan
A significant step that marks our
commitment to better engage with First
Nations communities across Australia.
Modern Slavery Statement
We are dedicated to delivering on the
commitments outlined in our Modern
Slavery Statement, including developing
robust processes for managing our
supply chain.
Customer Engagement Program
This program has been designed
to establish a deeper, unbiased
understanding of our customers’ priorities
and the performance of our business,
which we can track annually.
Together for Safety Program
A program that focuses our commitment to
safety, performance, and each other as we
enhance our safety leadership skills and
culture over the next five years.
Two Hours for Safety
Every Thursday, all operational
management teams dedicate two hours
solely to safety activities, reinforcing our
commitment to safety culture, performance,
and a healthier work environment.
Safety Performance
In FY24, we achieved a TRIFR12
metric of 1.35 (based on 1 million
hours worked), representing an 83.9%
decrease from 8.39 in FY23. This
substantial decrease demonstrates
our tangible progress in improving
safety outcomes*.
*Note: This TRIFR metric does not include Piping
Solutions’ safety statistics, as the business was
acquired partway through the financial year.
Acquisition of Piping Solutions
Specialists in steel pipelines, structures,
pressure vessels, and refuelling systems.
The acquisition accelerates the execution
of Saunders’ strategic expansion into the
Defence sector and delivers complementary
steel piping capabilities in the Aviation,
Energy, and Infrastructure industries.
Effective 31 October 2023
ACQUISITIONS
ADDITIONAL HIGHLIGHTS
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Chairman’s
Message
Overview
I am very pleased to report that 2024 has been a year of
strong achievement for Saunders across a range of areas.
Our goal to maintain revenues after the large lift in 2023 and
to strategically reposition the Saunders offering to provide
a one-stop multidisciplinary service have been realised.
Importantly, all of this has been done while producing another
excellent financial result.
Changes to the Board of Directors
As part of our board renewal process, we enhanced our board
with the appointment of Brendan York as a Non-Executive
Director, effective 24 July 2023.
Brendan also Chairs our Remuneration Committee and serves
on the Audit and Risk Committee. Brendan’s experience as a
Non-Executive Director for several ASX-listed companies has
brought valuable expertise to our Board.
We also bid farewell to Timothy Burnett, who served as
Saunders’ Chair for 16 years. Timothy resigned as a Director,
effective 21 November 2023, marking his retirement. We
extend our heartfelt thanks for his outstanding contributions
and dedicated service.
Safety
As Chair, ensuring the safety of our people, subcontractors,
and the communities we serve is my highest priority. Our 'Zero
Harm' commitment is at the heart of our safety culture. This
year, we intensified our focus on safety by implementing new
initiatives including the 'Together for Safety' program, weekly
safety sessions, and successful Federal Safety Commissioner
accreditation (further outlined in page 10 of this document).
Thanks to these initiatives and the dedication of our teams,
we achieved an 83.9% reduction in our Total Recordable Injury
Frequency Rate (TRIFR) compared to June 2023. We remain
committed to further enhancing our safety culture in FY25,
with a focus on leadership behaviour, risk ownership, mental
health, and environmental compliance.
Financial performance
Despite global economic challenges, our financial
performance in 2024 was robust. We achieved record revenue
of $216.1 million and an Adjusted EBITDA of $21.3 million.
Our order book stands at $189.3 million, reflecting our strong
market position. Adjusted Earnings Per Share for the period
were 9.96 cents.
Our success is attributed to strategic growth and the
integration of our multidisciplinary offerings, including the
acquisition of Piping Solutions, effective 31 October 2023.
Our focus remains on leveraging our $2 billion pipeline
in Defence & Government, Energy, Water, Resources &
Industrials, with an emphasis on larger, integrated projects.
Further details are available in our Financial Reports.
Environmental, Social, and Governance
We are committed to advancing our ESG targets and
supporting sustainability efforts. In 2024, we initiated our
ESG Roadmap, finalised our first Reflect Reconciliation Action
Plan (RAP), and released a new Modern Slavery Statement.
The RAP aims to engage with First Nations communities and
improve cultural awareness, while the Modern Slavery Policy
addresses risks and upholds human rights.
Looking ahead to 2025, we will develop an Environmental
Sustainability Plan, further advance our RAP, and enhance
our ESG reporting. We are excited to share our progress in
these areas.
On behalf of the Saunders Board of Directors,
I am pleased to present the 2024 Annual Financial
Report, providing shareholders with an update on
our progress and achievements over the past year.
Annual Report 2024
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Outlook
Saunders continues to thrive as one of Australia's leading tank
builders while expanding our capabilities and market reach.
Our strategy now focuses on fostering growth, entering new
regions and markets including new energy and evolving our
multidisciplinary offering to meet future client needs.
Our outlook remains positive, driven by our effective growth
strategy, solid order book and recurring revenues that position
us to capitalise on future earnings.
Our leadership and project teams are committed to delivering
high-quality, safe, on-time, and on-budget results. This
dedication will continue to drive our financial performance
and success in the coming years.
In closing, I would like to express my thanks to our dedicated
staff, our shareholders and my fellow directors for their support
and counsel.
We look forward to continuing to provide innovative and
market leading outcomes and to delivering sustainable value
for all our stakeholders
Nicholas Yates
Chairman
Saunders International
*Note: This TRIFR metric does not include Piping Solutions' safety statistics, as
the business was acquired partway through the financial year.
Nicholas Yates,
Chairman
Annual Report 2024
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Managing Director
and CEO’s Message
I’m proud to present Saunders’
2024 Annual Report, highlighting
the exceptional work of our team.
Safety First
As Managing Director and CEO, the safety of our people,
and every individual who interacts with Saunders, is my
daily priority. I am proud of the progress we have made in
improving our safety performance this year. As noted in
the Chair’s message, we have significantly strengthened
our safety culture. Our robust programs and initiatives are
designed to mitigate risks, enhance safety practices across
the organisation, and ensure that safety is a way of life for
our people.
Thanks to these efforts and the dedication of our teams,
we achieved an impressive 83.9% reduction in our Total
Recordable Injury Frequency Rate (TRIFR) compared with
June 2023. This success reflects our collective achievement,
and we are committed to advancing our safety programs
in FY25.
Financial summary
I am pleased to report another record year of performance,
driven by the hard work of our dedicated Saunders
'OneTeam'. In 2024, our objective was to sustain the step
up in revenue following Project Caymus, a US defence fuel
storage facility in Darwin, and strategically evolve our core
offering. This included leveraging our acquisitions in piping
and automation to deepen our pipeline of opportunities.
Our financial performance has remained strong, with
revenue increasing by 7.6% to $216.1 million, Adjusted
EBITDA rising by 17.7% to $21.3 million, and our Adjusted
EBITDA margin improved from 9.0% to 9.9%.
We have secured multiple projects and strengthened our
pipeline in our key markets of Defence & Government,
Energy, Water, Resources & Industrials. This, combined with
our strong balance sheet positions us well for continued
growth in FY25.
Mark Benson,
Chief Executive Officer
and Managing Director
Annual Report 2024
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Strategic acquisitions
The acquisition of Piping Solutions, effective 31 October 2023,
accelerates our strategic expansion into the Defence
sector, enhancing our core business with complementary
capabilities. The successful integration of this acquisition
underscores our commitment to the multidisciplinary
offering to our clients. It acknowledges and builds on the
positive impact of our earlier acquisitions, Automation IT in
April 2023 and PlantWeave Technologies in August 2021,
which have now been combined as Saunders Automation.
These strategic acquisitions support our operating model,
and we are already seeing this strength enable us to tender
larger-scale, multidisciplinary projects.
Customer Satisfaction
This year, we conducted in-depth interviews with key
clients and major investors to actively listen to their insights
on working with Saunders. The research, facilitated by
an external party, provided valuable information about
our customers’ needs and expectations. Their feedback
is helping us identify our strengths and shape our FY25
strategy. Our growth plans will incorporate ways to meet
their ongoing needs while anticipating and serving their
future demands.
I would like to personally thank all participants for their
contributions to this research.
Operating Model
We have long been recognised as one of Australia’s premier
tank builders and are now building on our automation and
piping acquisitions, along with regional expansion. As our
business grows, our service model expands to broaden our
capabilities and offerings.
As 'OneTeam', we are now unified in designing, building,
and maintaining projects across our key markets and core
capabilities, specialising in bulk fluid storage and transfer
solutions. By integrating our expertise into a seamless,
multidisciplinary delivery platform, we ensure efficient
and predictable project outcomes, fostering sustainable
growth. Saunders expert capabilities are directly applicable
to emerging and adjacent new energy opportunities as
Australia undertakes its energy transition.
People and Capability
In 2024, our team grew to 505 permanent employees,
reflecting our expansion and successful acquisitions. The
dedication and excellence of our team have driven our strong
performance, and I am proud to highlight their achievements
throughout this report.
Together, we remain committed to fostering an inclusive and
diverse environment. Our ‘OneTeam’ approach allows us to
partner with clients to discover innovative solutions, achieving
more together.
We enter the new financial year with a solid operational
foundation. Our strong leadership and FY25 strategy are
designed to drive growth, create new opportunities, and
ensure continued excellence, competitiveness,
and profitability.
A ‘OneTeam’ Thank You
As Saunders continues to grow and evolve, I am excited about
the opportunities our enhanced model will bring to our people,
clients, and shareholders.
Thank you to our shareholders for your ongoing support and
to the entire Saunders team for your dedication and valuable
contributions throughout 2024.
Mark Benson
Managing Director and Chief Executive Officer
Saunders International
2024
HIGHLIGHTS
Annual Report 2024
10
Safety
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.
This promise to our people and
their loved ones is our number
one priority.
As the Group continues to grow, we remain focused on
improving our safety performance to ensure we achieve
‘Zero Harm’ for everyone who works for us and with us.
By investing in our safety culture and continually reviewing
Workplace Health and Safety Standards, we consistently
deliver a strong safety performance.
The Board, through to our project teams, are dedicated to
proactive reporting and structured reviews of high-potential
incidents to prevent injuries. We continue to invest in
proactive initiatives to keep our people safe and healthy
today and in the years ahead, knowing that our greatest
responsibility is to ensure everyone returns home safely
at the end of their workday.
Safety Performance
This year, our dedication and focus on safety have
resulted in a significant reduction in our Total Recordable
Injury Frequency Rate (TRIFR).
Key Initiatives
Here are some key initiatives delivered during the
period that have directly supported this result.
These initiatives actively engage our teams and
empower our workforce to take ownership of safety at
every level. We have implemented robust programs and
initiatives to mitigate risks and foster a strong safety
culture across the organisation.
Together for Safety
'Together for Safety' is a safety training program aimed
at enhancing our safety leadership skills and fostering a
safety-oriented culture over the next five years. Launched
in November 2023, this business-critical initiative is
designed to engage and upskill our teams, positively
influencing our safety culture and performance. 'Together
for Safety' emphasises collective responsibility, ensuring
that everyone gets home safely every day.
As part of this program, we introduced the 'Two Hours
for Safety' initiative in 2024, held every Thursday for
all operational management teams. During this time,
all personnel are dedicated solely to safety activities.
‘Two Hours for Safety’ is not just a time allocation; it
is a commitment to our safety culture, performance,
and teammates. By dedicating focused time to safety,
we have contributed to a safer and healthier work
environment for everyone, embedding a culture of
safety in our everyday actions.
*Note: This TRIFR metric does not include Piping Solutions' safety
statistics, as the business was acquired partway through the financial year.
In FY24, we achieved a
TRIFR12 metric of 1.35 as of
June 2024 (based on 1 million
hours worked), representing
an 83.9% decrease from 8.39
in June 2023. This substantial
decrease demonstrates our
tangible progress in improving
safety outcomes*.
Annual Report 2024
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Federal Safety Commissioner Accreditation
In 2023, 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
enables us to tender directly for larger government-
funded projects in the future.
This year, Saunders underwent another successful
assessment of the maturity and effectiveness of our
Health & Safety Management System by the Office of
the Federal Safety Commissioner (OFSC) auditor. The
assessment lowered our risk profile from Medium to
Low Risk, indicating that Saunders has a robust and
effective Health & Safety system in place, resulting
in less frequent FSC audits in future.
Safety Engagement
In addition, we continued to engage our teams
and clients on our safety culture and performance
through regular initiatives:
2025
FOCUS AREAS
Our primary objective is to further embed our
‘Together for Safety’ program, strengthening
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 rolling out a safety leadership and
attitudes program. We will also continue to
prioritise mental health, workplace culture,
and environmental compliance.
Conducted a comprehensive program of
site visits and engagements by the Board,
Executive, and broader teams.
Rolled out monthly safety themes
to address high-risk areas.
Celebrated team members who
champion safety in the field through
project-based awards.
Received client recognition for
our outstanding safety performance
during this period.
2024
HIGHLIGHTS
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People and
Capability
At Saunders, our dedication to
safety, collaboration, and teamwork
is embedded in our cultural DNA.
We partner with our clients to
discover innovative and efficient
solutions, embracing our ‘OneTeam’
approach because we know that
together, we achieve more.
We strive to foster an inclusive, flexible, encouraging,
and diverse environment for all our people. By investing
in our employees, we strengthen our team and enhance
our ability to deliver on our promises of innovation, growth,
and excellence. We are passionate about giving back to
the communities where we work and live, both through
our projects and broader group-wide initiatives.
These initiatives delivered during the year reflect our
commitment to creating a supportive and dynamic
work environment that fosters growth, development,
and wellbeing for all our team members:
Reconciliation Action Plan: We supported the
creation of our Reflect Reconciliation Action Plan,
marking a significant step in our commitment to
better engage with First Nations communities across
Australia. (See page 18 for more information).
New Employee Value Proposition: We implemented
a comprehensive employee value proposition that
includes benefits such as parental leave, wellbeing
days, professional development opportunities, and
cost-of-living discounts.
Successful Onboarding: Over 80 employees
were successfully onboarded through the Piping
Solutions acquisition, with their people systems
seamlessly integrated.
Recruitment expansion: Our People and Capability
team has expanded to include additional white and
blue collar recruitment experts, effectively boosting
our ability to fill roles in a tight labour market.
Enhanced Annual Performance & Development
Review: We are building on the data we gather from
our annual performance and development reviews,
integrating it with our Learning and Development
strategy to ensure continuous improvement and
alignment with business goals.
Upgraded HRIS: Our upgraded Human Resources
Information System (HRIS) now includes enhanced
reporting capabilities, improved process efficiencies,
a payroll integration option, and increased visibility for
managers through an organisational chart model.
Comprehensive Training Audit: We conducted
a full qualification and training audit, embedding
system checkpoints to ensure compliance and
ongoing development.
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
'OneTeam': 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
Annual Report 2024
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In 2024, we proudly
expanded our Saunders
team to 505 employees,
reflecting our growth and
expansion during the period.
2025
FOCUS
AREAS
Adapting to Technological Advancements:
As the workforce and economy evolve, the role
of the People & Capability team is changing. In the
coming year, Saunders’ People & Capability team
will focus on enhancing automated processes and
collaborating closely with the HRIS developer to
maximise system efficiencies.
Workforce Planning and Data Integration: We will
consolidate data from multiple company systems
to develop a comprehensive workforce planning
tool, ensuring information is readily available for
mandatory reporting and strategic planning.
Employee Engagement and Feedback: In our
continuous quest to enhance the employee
experience, we will conduct a company-wide
employee engagement survey and targeted
surveys for specific functional areas in FY25 to
gather valuable feedback.
Supporting Reconciliation: We will actively support
the implementation of our Reflect Reconciliation
Action Plan (RAP). With our People & Capability
Manager as a nominated RAP champion, the
team will facilitate meaningful engagement in
reconciliation efforts across the organisation.
Diversity and Inclusion: We will continue to invest
in diversity and inclusion initiatives, focusing on
recruitment and employee experience. Our goal
is to increase diversity and support retention by
fostering an inclusive workplace environment.
05
01
02
03
04
2024
HIGHLIGHTS
Customer Engagement Program
This year, we launched a comprehensive customer
engagement program that includes in-depth, externally
facilitated interviews with key clients. This initiative is
designed to establish a deeper, unbiased understanding
of our customers’ needs, priorities, and perceptions.
PROGRAM AIMS
Gain comprehensive customer insights:
Understand what drives our clients' decisions
and identify key market trends.
Evaluate our performance: Assess how well we
are meeting client expectations across key markets
and capabilities.
Inform strategic growth: Use annual tracking of these
insights to prepare for our next phase of growth.
By listening to what’s most important to our clients, we
can meet their current needs and anticipate their future
requirements. This proactive approach ensures that we
remain aligned with our clients' evolving demands and
continue to deliver excellent value.
Annual Report 2024
14
Client
Focus
At Saunders, our clients
are at the heart of everything
we do. We are committed to
understanding their unique needs
and delivering tailored solutions
that exceed expectations.
Through constant innovation we work to ensure our
clients receive the highest quality service and support.
Our dedicated teams work collaboratively to foster strong,
long-term relationships built on trust and reliability.
Our clients rely on us to manage complexity, drive delivery,
provide long-term strategic value, and develop innovative
solutions. Together, we establish a foundation of trust,
collaborating to achieve excellent project outcomes and
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.
KEY CLIENTS
Laing O’Rourke
Lendlease
Multiplex
NSW Local Councils
Transport for NSW
DEFENCE &
GOVERNMENT
AGL
Anglo Coal
APA
Cleanaway
Jemena
Northern Star Resources
Orica
RESOURCES &
INDUSTRIALS
Ampol
bp
CleanCo Queensland
Mobil
Quantem
UGL
Viva Energy Australia
ENERGY
Aqua Metro
Confluence Water
Fulton Hogan
Sydney Water
West Region Delivery Team
WATER
Annual Report 2024
15
WHAT OUR CLIENTS SAY ABOUT US
“It's growing, it's hungry and serious, very serious,
and capable…They are reputable. And they're a very
well-regarded supplier.”
“They're super personable as well. That's the other
thing that we've found. We've managed to forge a
pretty close relationship with them. It doesn't seem to
be transactional. That's what we like about engaging
with them so far today, has been the ability to pick
up the phone and have a conversation, have a frank
conversation with them, but it's not throwing mud
or anything like that. It's always, ultimately with the
success of the project for both parties in mind.”
“I think they provide a quality service. Their sector
performance is top in class. Their capability in the tank
space is very, very capable."
“So for me, they've always delivered what I've
expected from them, and we have had some
good safety and quality outcomes on a number
of successfully delivered projects. Safety, quality,
program, risk and cost control and that’s Construction
in the nutshell, isn't it?”
“I have a belief that you overcome any challenges
as long as there's an intent that parties come together,
discuss, and work through the challenges, and
Saunders displayed that throughout.”
We are dedicated to delivering
solutions, one client at a time.
By fostering strong relationships,
leveraging comprehensive
customer insights, and
continuously improving our
offerings, we are well-positioned
to support our clients and
drive future growth.
2025
FOCUS AREAS
Looking ahead to 2025, we are dedicated to
enhancing client satisfaction by actively seeking
feedback and continuously improving our
services. Our goal is to build on our reputation
as a trusted partner in the industry and
respond to our client research feedback, which
highlighted the importance of partnership and
an increasing desire for integrated solutions.
KEY FOCUS AREAS
Market-Focused Offering: We will evolve our
offering to provide a market-led, integrated
offering across: Defence, Energy, Water, and
Resources & Industrials.
Multi-disciplinary Integrated Capabilities:
Delivering a broad range of integrated
services across our core capabilities and
recent strategic acquisitions:
y Bulk Fluid Storage
y Structural, Mechanical and Piping
y Industrial Automation and Electrical
y Civil Infrastructure
y Industrial Asset Services
Investment in Front-End Design
Engineering and Operational Capability:
We will further enhance our capabilities to better
serve our clients.
2024
HIGHLIGHTS
Annual Report 2024
16
Innovation
Our operating model is
underpinned by 73 years of
engineering and construction
expertise, further strengthened by
our ongoing investment in high-
value, complementary capabilities
and pioneering new solutions. At
Saunders, innovation is one of our
core values, and we are dedicated
to finding new and better ways to
help our clients achieve their goals.
We focus on continual improvement by working closely
with our clients and project partners to solve problems
and create opportunities—both on-site and in our offices.
The solutions we develop, along with the insights gained
from their development, are shared across our teams to
maximise their impact and applicability.
We continually challenge ourselves to create innovative
solutions for our customers, ensuring we stay at the
forefront of the industry and support their strategic goals.
PROJECT PROFILE
ECU City
Capability Engineering and Industrial Automation
and Electrical
Value
$821,000
Location
Perth, WA
ECU City is a significant project for Edith Cowan
University, featuring a 65,000 square metre campus
spanning 11 levels across two towers located within
Perth’s CBD. Construction is well underway and is
set to be completed by the end of 2025.
Saunders has been engaged to provide a turn-key
solution for the emergency power network control
and site-wide energy management system. Our scope
of work includes design, procurement, construction,
programming, and commissioning.
We were selected for this project due to our industry-
leading expertise and the utilisation of state-of-the-art
operational technology (OT) solutions. Our innovative
approach and commitment to excellence ensure
that ECU City will have a robust and efficient energy
management system, supporting the university’s needs
for years to come.
Annual Report 2024
17
2025
FOCUS AREAS
NEW ENERGY
We are gearing up to meet the opportunities of
New Energy as a key strategic priority, investing
in innovation in areas such as hydrogen,
ammonia, and biofuels.
This year, we announced the signing of a
Memorandum of Understanding (‘MoU’) with
Optimal Renewable Gas (‘ORG’) to facilitate
the establishment of biomethane facilities
throughout Australia. The agreement marks a
significant step towards enhancing Australia’s
renewable energy infrastructure, with the first
facility slated for Westbury, Tasmania.
We are well-positioned to support our clients
in delivering their New Energy projects and
achieving their bold sustainability targets. A
great example of this is the work we are already
doing with bp at their Kwinana Energy Hub. Read
more about this project on pages 28 and 29.
PROJECT PROFILE
Western Sydney Airport
Capability
Bulk Fluid Storage, Industrial Automation
and Electrical, Structural, Mechanical
and Piping
Value
$70.0 million
Location
Luddenham, NSW
In late 2022, we were awarded a significant contract
by Multiplex to build the aviation fuel terminal at the
new Western Sydney International Airport, also known
as Nancy Bird Walton Airport. This project showcases
our ability to deliver integrated, multidisciplinary
solutions by bringing together a Saunders team
specialising in both Bulk Fluid Storage, SMP and
Industrial Automation and Electrical.
This contract 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, Supervisory
Control and Data Acquisition (SCADA) electrical,
and controls.
As part of the overall project, in 2021 the independent
Piping Solutions business was appointed to deliver a
new hydrant line. This aspect of the project involves the
installation and commissioning of 10.5 km of aviation
fuel hydrant lines, leveraging our team’s expertise in
fuel infrastructure. In 2023, we also secured additional
SMP works which connect the newly installed fuel
hydrant main system to the fuel farm facility.
This project highlights the value of our new piping
expertise in providing a one-stop solution to our
clients, reinforcing our commitment to delivering
multidisciplinary, integrated capabilities.
Annual Report 2024
18
Sustainability
2024
HIGHLIGHTS
At Saunders, we understand that
every decision and action is an
opportunity to make a positive impact
on our people and the world around
us. We are committed to our own
sustainability journey, aiming to meet
the expectations of our employees,
investors, and communities.
By defining and advancing plans to support our
Environmental, Social, and Governance (ESG)
targets, we strive to create lasting value. We are
also dedicated to supporting our clients in their
sustainability efforts, helping them achieve their
goals and contribute to a sustainable future.
This year, we have taken significant steps in
our sustainability journey by commencing the
development of an integrated ESG Roadmap,
which has led to the release of our first RAP
and a new Modern Slavery Statement.
Together, we
want to make
a meaningful
difference.
We are proud to have finalised Saunders’ first Reflect
Reconciliation Action Plan (RAP). This significant step
marks our commitment to better engage with First Nations
communities across Australia.
Recognising our responsibility as a large business operating
on Country, including sites in regional and remote areas, we
aim to foster relationships with Aboriginal and Torres Strait
Islander communities, improve employment opportunities
and career pathways, and increase our support for
Indigenous Enterprise within our supply chain.
Our RAP embodies our dedication to learning from First
Nations cultures, improving cultural awareness, and
implementing change at all levels. This whole-of-business
approach will include education initiatives and the adoption
of cultural protocols.
While we are early in our journey, we are inspired by RAP
leaders in the Australian construction community. We want
to learn from their example and look forward to collaborative
reconciliation and engagement efforts.
As we embark on this path, we commit to developing strong
community partnerships, enhancing our organisational
awareness of First Nations cultures and respectful
interaction with Country.
REFLECT
RECONCILIATION
ACTION PLAN (RAP)
2025
FOCUS AREAS
Developing an overarching Environmental
Sustainability Plan with clear, measurable, and
realistic objectives for our sustainability journey.
Advancing our Reconciliation Action Plan (RAP)
and beginning Saunders’ reconciliation journey.
Implementing the commitments of our Modern
Slavery Policy, including processes for managing
our supply chain.
Enhancing organisational understanding of
ESG reporting obligations and the foundations
of our reporting system.
Annual Report 2024
19
At Saunders, we are dedicated to addressing modern
slavery risks within our operations and supply chains.
We are making progress by enhancing due diligence
processes and driving operational consistency across
the organisation. Our goal is to foster a business
environment that upholds human rights and promotes
a sustainable, responsible future.
We assess the risk of modern slavery in our immediate
supply chain as low, due to our geographic focus and
predominantly domestic supply chain. However, we
recognise the importance of addressing any residual
risks. We approach this through four key areas:
governance and leadership, policies and frameworks,
training and education, and processes and procedures.
Our policy is central to creating a safe, fair, and
respectful working environment for everyone
associated with our business.
MODERN SLAVERY
POLICY
Operations
Our commitment to operational
excellence ensures that we
work together as 'OneTeam' to
exceed client expectations and
drive sustainable value across
all projects and partnerships.
Saunders operates as a leading provider of
multidisciplinary engineering and infrastructure
solutions across New South Wales, Queensland,
Victoria, Western Australia, South Australia,
Northern Territory, New Zealand and
Papua New Guinea.
We continuously explore additional regions to
follow key clients and opportunities that align
with our strategic direction, expanding into
new markets to support the business interests
of both national and international clients.
2024
HIGHLIGHTS
Geographic Expansion
WESTERN AUSTRALIA
In March 2024, we celebrated the opening of our
newest corporate office on St Georges Terrace, in the
heart of the Perth CBD. This milestone signifies more
than just a move—it's a testament to our dedication to
expanding our presence and enhancing our services
in Western Australia. The office will service our growing
customer base in the region, including:
y bp’s Kwinana Renewable Fuels Project
y Kalgoorlie Consolidated Gold Mines (KCGM)
for Northern Star Resources
y Australian Department of Defence bases
in the region.
We are actively pursuing new projects in Western Australia,
with a pipeline of opportunities exceeding $100 million.
QUEENSLAND
Our presence in Queensland is expanding, driven by
our recent piping and automation acquisitions. We
now have a new workshop in Brisbane to support
our integrated delivery capabilities, along with a
new corporate office to accommodate our growing
engineering team.
Annual Report 2024
20
2025
FOCUS AREAS
Strengthening our established Melbourne
presence, built on our long-standing contracts
at Mobil’s Altona and Yarraville refineries.
Enhancing client value by integrating
and expanding our acquired capabilities
to lower costs and reduce delivery risks.
Expanding our addressable market
by broadening our range of services.
01
02
04
05
03
Our operations cover
a wide range of expert
capabilities, including:
Bulk Fluid Storage
Structural, Mechanical and Piping
Industrial Automation and Electrical
Civil Infrastructure
Industrial Asset Services
Annual Report 2024
21
Annual Report 2024
22
Markets
We provide a multidisciplinary,
integrated offering across
the complete asset lifecycle,
specialising in these
key markets:
DEFENCE &
GOVERNMENT
ENERGY
RESOURCES
& INDUSTRIALS
WATER
Annual Report 2024
23
Annual Report 2024
24
Defence &
Government
2024
HIGHLIGHTS
We are committed to serving the
Australian Department of Defence
& Government departments at
local, state, and federal levels.
By leveraging our extensive
market expertise, multidisciplinary
capabilities, and strong supply
chain relationships, we deliver
tailored, innovative, and reliable
solutions that support growing
national security and public
infrastructure needs.
Our specialist Defence teams, led by sector
experts, are dedicated to delivering projects that
meet the stringent requirements of the Australian
Defence Force. By combining our expertise in
Defence infrastructure with extensive experience
and robust supply chain relationships, we ensure
project certainty and reliability for our clients, and
the Department of Defence.
We uphold the highest standards of quality,
safety, and reliability through our multidisciplinary
capabilities. Our commitment to innovation and
continuous improvement allows us to address the
evolving needs of the defence industry, supporting
national security and resilience across all project
phases, from planning and design to construction,
commissioning, and handover.
Serving the Australian
Department of Defence
PROJECT PROFILE
Larrakeyah Defence
Precinct Redevelopment
Program (LDPRP)
Capability
Bulk Fluid Storage, Industrial Automation
and Electrical, Structural, Mechanical
and Piping
Value
$33.7 million
Location
Darwin, NT
This year, Saunders successfully completed a contract
for the Larrakeyah Defence Precinct Redevelopment
Program (LDPRP), with Laing O’Rourke serving as the
Managing Contractor.
Saunders designed and constructed four new bulk
fuel storage tanks, and undertook the installation of
fuel quarantine and sampling systems, offloading
and dispensing filtration and pump stations, electrical
and instrumentation, and safety and process control
systems with connection to site-wide piping and wharf
hydrant lines at a major operational defence base.
DEFENCE
EXPERTS
Annual Report 2024
25
PROJECT PROFILE
RAAF Base Tindal
Capability
Bulk Fluid Storage, Industrial Automation
and Electrical, Structural, Mechanical
and Piping
Value
$31.0 million
Location
Katherine, NT
Saunders has been appointed to two projects at RAAF
Base Tindal, located south of Darwin. Our initial scope of
work at this base includes the design and construction of
two new bulk fuel tanks, subcontracted through the Nova
Nacap Joint Venture, which is contracted by the Naval
Facilities Engineering Command (NAVFAC) Pacific, US
Department of Defence.
The project strengthens our relationship with repeat
client Nova Nacap while enhancing our capability and
track record within the Defence sector.
Separately, in 2022, the former Piping Solutions
business was sub-subcontracted to install critical Fuel
Infrastructure for the new Australian Defence Force Fuel
Farm at RAAF Base Tindal.
This project includes the installation of an underground
pipeline, multiple tanks, a gantry building, a filter building,
pumphouses, and an underground line linking to the
USAF refuelling system, along with a complex network of
valves and large turbine pumps.
This project further highlights the value of our Piping
Solutions acquisition.
PROJECT PROFILE
Shoalwater Bay Training Area
Capability
Industrial Automation and Electrical
Value
$600,000
Location
Byfield, QLD
To enhance military training capabilities for both local
and international partners, the Shoalwater Bay training facility
is undergoing significant infrastructure upgrades. We were
engaged to design, program, and commission the HV/LV Power
Control & Monitoring System (PCMS) for the new facilities. The
PCMS provides real-time analysis and diagnostics of the power
network, including feedback on load demand, load shedding,
power outages, supply authority loading, load bank control,
alarming, and fault conditions. Collaborating with project
partners and the Australian Department of Defence, we are
nearing the final stages of commissioning, with completion
anticipated in 2024.
PROJECT PROFILE
RAAF Richmond Fuel Hydrant
Line Works
Capability
Pipeline construction and commissioning
Value
$8.0 million (approved to date)
Location
Richmond, NSW
The project includes the decommissioning of an existing
underground hydrant pipeline and the installation of a new
fuel supply line, underground hydrant, and return line. The
supply line will deliver fuel from the base’s fuel farm to the
underground hydrant line, and the return line will recycle
excess fuel back into the supply tank at the fuel farm.
Our scope involves managing the replacement of the
existing buried spur carbon steel pipe on the northern line
at the apron with a new stainless-steel supply and return
pipeline, connecting back to the site's existing storage tanks.
This work is performed in a brownfield environment. The
new underground hydrant line will include multiple new
hydrant refueling positions to service aircraft on the existing
pavement. Saunders is collaborating with its client and other
disciplines to perform the construction and commissioning of
the project in an operationally critical infrastructure facility.
Annual Report 2024
26
2024
HIGHLIGHTS
Supporting Public
Infrastructure Needs
PROJECT PROFILE
Four new bridge projects
We have recently announced that we have been
awarded four contracts in the civil infrastructure
sector, totalling $20.59 million.
Each of the four projects includes the demolition
of an existing bridge, as well as the design
and construction of a new concrete bridge
structure. The projects have been funded by local
councils, the NSW Government and the Federal
Government, aiming to ensure that local road
networks are safer and fit-for-purpose for
years to come.
The projects include:
y Brunners Bridge, Singleton, NSW
y Spring Creek Bridge, Narrabri, NSW
y Melville Ford Bridge, Aberglasslyn, NSW
y Molong Street Bridge and Burrendong
Bridge No 1, Dubbo, NSW
PROJECT PROFILE
Port Macquarie Bridges project
Capability
Civil Infrastructure
Value
$11.2 million
Location
Various locations, Port Macquarie, NSW
Saunders was awarded a new contract for $11.2 million
to replace five existing timber bridges across the Port
Macquarie Hastings Council area with concrete bridges.
Once finished, 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 is due for completion in calendar
year 2024.
Defence &
Government
PROJECT PROFILE
Mater Private Hospital
Capability
Industrial Automation and Electrical
Value
$1.5 million
Location
Springfield, Qld
The Springfield Mater campus is expanding the existing
private hospital with a new central energy plant and a
174-bed public hospital. To support this development and
future expansions, a new high-availability power distribution
network is required.
Our specialist industrial automation team has been engaged
to design, engineer, and deliver the HV power network
and LV load shedding control systems. A high-availability
communications network is also needed to connect the
distributed power assets across the 52-hectare precinct.
Saunders is collaborating with major consultants NDY and
contractors John Holland and Stowe to deliver a best-in-
class power automation solution for Mater.
Annual Report 2024
27
PROJECT PROFILE
Gold Coast University
Hospital (GCUH)
Capability
Industrial Automation and Electrical
Value
$850,000
Location
Southport, Qld
Located in one of Australia's fastest-growing regions, the
GCUH is expanding with two new dedicated support facilities:
1. Sub-Acute Building: 70-bed facility
2. Secure Mental Health Rehabilitation Unit: 40-bed facility
Our Industrial Automation team has a proven track record
with Queensland Health and the GCUH site, providing
system design, support, and ongoing maintenance. Our
expertise covers generator control and monitoring, HV/LV
monitoring, load shedding, third-party system interfacing,
and networking.
The integration of additional control systems will offer
hospital staff a comprehensive view of the power network
and facilities. In the event of a power outage or blackout,
the control system enables personnel to quickly identify
and address fault conditions via user-friendly interfaces.
This capability is crucial for maintaining safety and care
in critical infrastructure settings like hospitals.
Annual Report 2024
28
Energy
Annual Report 2024
28
Saunders is emerging as a
key player in the energy sector,
delivering comprehensive
capabilities and solutions
across both traditional and
renewable energy projects.
With Australia transitioning towards a more
sustainable future, our emphasis on New Energy is a
key strategic priority.
We are investing our efforts in innovation across solar,
wind, and hydroelectric power, along with cutting-edge
technologies such as hydrogen, ammonia, and biofuels.
This dual focus ensures that Australia remains a leading
player in the global energy market, balancing economic
growth with environmental responsibility.
By partnering with
clients to deliver
traditional and renewable
energy solutions, we
help meet growing
energy demands while
supporting environmental
sustainability and
ambitious energy targets.
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.
Annual Report 2024
29
Annual Report 2024
29
2024
HIGHLIGHTS
PROJECT PROFILE
bp Kwinana Renewable Fuels
Capability
Industrial Asset Services
Value
$42.4 million
Location
Kwinana, WA
We are particularly proud of our Kwinana Renewable
Fuels Project because of its bold sustainability ambitions.
We are 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.
PROJECT PROFILE
Mobil Altona
Capability
Industrial Asset Services
Value
$37.5 million (to date, 4/5 year program)
Location
Altona, VIC
We are continuing delivery of our longer, cornerstone
contracts, including year four of our five-year
maintenance program for Mobil in Altona.
Saunders is 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.
PROJECT PROFILE
Barron Gorge Hydroelectric
Power Station
Capability
Industrial Automation and Electrical
Value
$3.9 million
Location
Barron Gorge, Qld
Commissioned in 1963, the Barron Gorge Hydro sources
water from the Barron River to produce electricity before
releasing the water back into the river.
Barron Gorge Hydro’s ability to quickly start its two
33 MW generators makes it an important asset for
providing a secure, reliable energy supply
for Queensland.
Saunders Automation was contracted to perform a
complete turn-key control system upgrade for the dual
turbine 66MW power station including PLC & SCADA
systems, OT network infrastructure, installation, testing
and commissioning.
PROJECT PROFILE
Pelican Point
Capability
Bulk Fluid Storage and Industrial Automation
and Electrical
Value
$44.2 million
Location
Pelican Point, SA
Our multidisciplinary 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
this critical new diesel storage project in Adelaide.
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.
`
2024
HIGHLIGHTS
PROJECT PROFILE
Bald Hill
Capability
Bulk Fluid Storage
Value
$8.4 million
Location
Sunbury, VIC
A design and construction contract for two 10 mega-litre
water tanks dedicated to storing potable water.
The project is being delivered for Aqua Metro on
behalf of Greater Western Water, who are a repeat
Saunders end-client.
Saunders will deliver the project under an expedited
design and construction program to minimise
disruption to local residents. This will be achieved
by close engagement with the supply chain and
constructing both tanks in parallel.
Annual Report 2024
30
Water
Saunders has a strong legacy
in water tank and reservoir
construction, it’s a cornerstone
of our service portfolio. We are
committed to delivering quality,
long-term critical infrastructure
to our local communities,
ensuring water supply meets
growing demand while
safeguarding water security.
Our expertise in the water sector has expanded
significantly with recent acquisitions, enhancing our
capabilities and client offerings. Increased capital
investment in the sector further underscores our
commitment to this market, driving our focus on
providing innovative solutions and sustaining
water infrastructure for the future.
In 2024, we were pleased
to announce we had been
awarded two contracts in
the water sector, totalling
circa $17 million.
PROJECT PROFILE
Marsfield Reservoir
Capability
Bulk Fluid Storage
Value
$8.4 million
Location
Marsfield, NSW
A design and construction project for a single 10 mega-litre
water tank. Saunders has been contracted by Confluence
Water to deliver the project for Sydney Water, marking
Saunders’ fourth tank project with Sydney Water in the
last five years.
Saunders will self-perform the complete scope, employing
a just-in-time delivery strategy to manage operations
efficiently and prevent capacity overload on the highly
constrained site. The tank will be delivered with a design
life of 100 years, aligning with Sydney Water's asset
requirements and long-term growth strategy.
Annual Report 2024
31
PROJECT PROFILE
The Boyne River HDD*
Gas Pipeline
Capability
Structural, Mechanical and Piping
Value
$3.0 million
Location
Gladstone, Qld
In 2024, we replaced 470 metres of gas pipeline beneath
the Boyne River, servicing Australia's east coast energy
needs. The team faced challenges including proximity to
a high-pressure gas line, the world’s busiest coal port at
Gladstone, harsh conditions, and the remote location.
We collaborated with our client and HDD partner, Maxibor
Australia, to deliver the project safely and with zero
incidents under challenging conditions.
*Horizontal Directional Drilling
Annual Report 2024
32
Annual Report 2024
32
Resources &
Industrials
`
2024
HIGHLIGHTS
Australia’s resources and
industrials markets are crucial
to the economy, fuelled by rich
natural resources and a strong
industrial foundation. These
markets, focusing on mining and
heavy industry, play a significant
role in exports, job creation, and
supporting economic
growth and infrastructure
development nationwide.
Resources & Industrials are central to Saunders' offerings.
With over 70 years of experience, we manage both
greenfield and brownfield projects, from comprehensive
Engineering, Procurement and Construction (EPC)
solutions for mine expansions and process optimisations
to long-term service agreements that ensure the ongoing
productivity of our customers’ assets.
PROJECT PROFILE
Kalgoorlie Consolidated Gold
Mines (KCGM) CIL3 Tanks
Replacement
Capability
Structural, Mechanical and Piping
Value
$31.5 million
Location
Kalgoorlie, WA
Saunders was awarded a $31.5 million contract by
Northern Star Resources to undertake the CIL3 Tanks
Replacement project at the Kalgoorlie Consolidated Gold
Mines (KCGM) in Western Australia.
This project involves the reconstruction and upgrade
of six carbon-in-leach (CIL) tanks, each measuring
12.7 meters in diameter and 13.5 meters in height. The
scope also includes associated pipework, structural
steel, and interconnecting launders within a complex
brownfield environment.
The project aims to increase the throughput and enhance
the reliability of the Fimiston Processing Plant. Saunders'
advanced construction methodology ensures that
the plant remains fully operational during the project,
minimizing shutdowns and maintaining continuous
revenue for Northern Star Resources.
This project marks Saunders' growing presence in
Western Australia, supported by the recent opening of
a new regional office in Perth.
Annual Report 2024
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Annual Report 2024
33
Annual Report 2024
34
Governance,
Financial
Report and
Other
Directors' Report............................................................... 36
Auditor’s Independence Declaration........................... 48
Auditor’s Report................................................................. 49
Directors’ Declaration...................................................... 53
Financial Report................................................................ 54
Corporate Governance................................................... 90
Shareholder Information................................................. 92
Board of Directors Information and Profiles.............. 93
Corporate Directory......................................................... 94
Annual Report 2024
35
Annual Report 2024
36
The Directors present their report on Saunders International
Limited (“Saunders” or the “Group”) for the financial year
ended 30 June 2024 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 Mark Benson
y Greg Fletcher
y Nicholas 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 from the end of the
financial year up to the date of this report. Timothy Burnett
resigned as a director effective 21 November 2023.
COMPANY SECRETARY
Brett Gregory has been the Co-Company Secretary from
the date of his appointment on 28 February 2023 up to
the 28 August 2024. Alex Dunne has replaced Brett as
Chief Financial Officer and Co-Company Secretary from
28 August 2024. Alex is a Chartered Accountant and holds
an MBA from University of Technology, Sydney.
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, piping and industrial automation services
to leading organisations across Australia and the Pacific Region.
The Group performs these activities across the key markets of
Defence & Government, Energy, Water, Resources & Industrials.
REVIEW OF OPERATIONS
A summary of the revenues and results is as follows:
2024
$’000
2023
$’000
Revenue
216,079
200,886
Profit before income tax
14,604
14,151
Income tax expense
(5,241)
(4,660)
Statutory profit attributable to the members of Saunders International Limited
9,363
9,491
Addback: Impact of expenses relating to acquisitions
- Automation IT Earn-out employee remuneration
1,100
-
- Advisory and legal fees
811
647
Total impact of expenses relating to acquisitions
1,911
647
Non-statutory adjusted profit attributable to the members of Saunders
International Limited
11,274
10,138
Reconciliation of profit before income tax to EBITDA (unaudited):
2024
$’000
2023
$’000
Profit before income tax
14,604
14,151
Add:
Net interest expense
536
265
Depreciation of owned and hire purchase assets
2,315
1,800
Depreciation of right of use assets
1,977
1,236
Statutory EBITDA
19,432
17,452
Addback: Total impact of expenses relating to acquisitions (excluding the
adjustment above for the higher effective tax rate)
1,911
647
Non-statutory adjusted EBITDA
21,343
18,099
Saunders’ revenue for the year was $216.1 million, an increase
of $15.2 million or 7.6% (2023: $200.9 million). The adjusted
net profit after tax was $11.3 million, an increase of $1.2 million
or 11.9% (2023: $10.1 million adjusted), adjusted EBITDA was
$21.3 million, an improvement of $3.2 million or 16.7% (2023:
$18.1 million adjusted).
Adjusted earnings per share for the year were 9.96 cents
(2023: 9.45 cents adjusted).
Saunders has strengthened its financial position at year end
with net assets of $51.3 million, an increase of $12.0 million or
30.5% (2023: $39.3 million).
Directors' Report
Annual Report 2024
37
A key contributor to the increase in Net Assets being the
Goodwill recognised following the acquisition of the Piping
Solutions business, effective 31 October 2023. Cash improved
to $19.8 million on 30 June 2024, an increase of $7.0 million or
54.7% (2023: $12.8 million).
The record revenue performance of the Group over the past
12 months is due to a combination of ongoing strong operational
execution of projects across the Group and revenue from
acquisitions of the Piping Solutions and Automation IT businesses
over the last 15 months in April, the Group completed the
divestment of its precast concrete operations, which were an
immaterial contributor to the Group's results.
Key Highlights
y Achieved a TRIFR12 metric of 1.35 as of June 2024 (based
on 1 million hours worked and a non-IFRS), representing
an 83.9% decrease from 8.39 in June 2023. This
substantial decrease demonstrates our tangible progress
in improving safety outcomes.1
y Implemented a ‘Together for Safety’ program that
symbolises our commitment to safety, performance, and
each other as we enhance our safety leadership skills and
culture over the next five years.
y Announced the acquisition of Piping Solutions in
November 2023 (following the May 2023 acquisition
of Automation IT); specialists in steel pipelines,
structures, pressure vessels, and refueling systems.
The acquisition accelerates the execution of Saunders’
strategic expansion into the Defence sector and delivers
complementary steel piping capabilities in the Aviation,
Energy, and Infrastructure industries
y Secured two projects with values more than $30 million
each in the last 12 months. This includes a project for
Quantem to more than double diesel storage capacity
at its Pelican Point terminal in Adelaide, South Australia
and a project for Northern Star Resources involving the
replacement of carbon-in-leach tanks at its Kalgoorlie
Consolidated Gold mine.
y Signed of a Memorandum of Understanding (MOU) with
Optimal Renewable Gas (ORG). A strategic partnership
to facilitate the establishment of biomethane facilities
throughout Australia, exemplifying our deepening
involvement in the new energy sector.
y Launched a comprehensive customer engagement
program that included in-depth, externally facilitated
interviews with key clients. This initiative was designed
to establish a deeper, unbiased understanding of our
customers’ needs, priorities, and perceptions.
y Taken significant steps in our sustainability journey by
commencing the development of an integrated ESG
Roadmap, which has led to the release of our first Reflect
Reconciliation Action Plan (RAP) and a new Modern
Slavery Statement.
1The TRIFR metric does not include Piping Solutions’ safety statistics, as the business was
acquired partway through the financial year.
OUTLOOK
Saunders had work-in-hand as at 30 June 2024 of $148.6
million (FY23: $159.1 million), which increased to $189.3 million
as at 31 July 2024. The value of live tenders as at 31 July 2024
was $1.3 billion (31 July 2023: $1.0 billion). The pipeline (yet to
be tendered) is at $0.7 billion (31 July 2023: $0.6 billion). This
strong pipeline of opportunities reflects the Group’s strong
and diversified capabilities, positioning us well across our key
markets: Defence & Government, Energy, Water, and Resources
& Industrials.
We will continue to leverage our multi-disciplinary offering in
key growth markets such as Defence, where investment in the
modernisation of fuel infrastructure is set to accelerate and Water,
where there is significant ongoing investment in asset renewal
programs across Australia. With a broad customer base, we are
well placed to secure larger-scale integrated projects, and expect
further growth in FY25.
EMPLOYEES
The Group’s total permanent workforce employed by Saunders
was 505 at 30 June 2024 (2023: 422). Saunders remains
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 and 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 1.35 (based on 1 million hours worked), an 83.9%
improvement over the prior year (2023: TRIFR12 8.39).
The environment remains a key focus for the Group, and we
will be focusing on improving our sustainability 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 Multiplex 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 are leveraging these learnings to define our own
Environment, Social and Governance sustainability targets
across the Group.
Directors' Report (cont.)
Annual Report 2024
38
EARNINGS PER SHARE
The basic and diluted earnings per share is calculated using
the weighted average number of shares. This shows the
statutory basic earnings per share of 8.27 cents (2023: 8.84
cents) and statutory diluted earnings per share of 8.16 cents
(2023: 8.71 cents). After adjusting the statutory net profit after
tax for the impact of acquisition related expenses, the adjusted
basic earnings per share improves to 9.96 cents (2023: 9.45
cents adjusted) and the adjusted diluted earnings per share
improves to 9.83 cents (2023: 9.30 cents adjusted).
DIRECTORS ATTENDANCE AT
MEETINGS
ATTENDANCE AT MEETINGS
The following table sets out the number of meetings in the year
to 30 June 2024, held during the period that the individual was
a director, and the number of meetings attended.
DIVIDEND
The Board declared on 27 August 2024 that there will be a
final dividend payable of 2.25 cents per share fully franked
(2023: 1.00 cents per share final dividend and 1.00 cents per
share special dividend paid). The dividend will be payable
on 15 October 2024 with the record date for determining
dividends on 17 September 2024.
The board has previously decided to deactivate the (DRP)
Dividend reinvestment plan and it will not be offered in this
dividend payment.
Directors Meetings
Audit and Risk Committee
Meetings
Remuneration Committee
Meetings
Held
Attended
Held
Attended
Held
Attended
Nicholas Yates
9
9
3
3
2
2
Mark Benson
9
9
3
3
2
2
Greg Fletcher
9
9
3
3
2
2
Brendan York1
9
9
3
3
2
2
Timothy Burnett2
2
2
1
1
1
1
1 Brendan York was appointed to the Board on 24 July 2023
2 Timothy Burnett resigned from the Board on 21 November 2023
Individual Directors and the Board also hold regular calls with the Managing Director and Chief Executive Officer 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.
Directors' Report (cont.)
Annual Report 2024
39
INFORMATION ON DIRECTORS
Information on the directors who held office during and since the end of the financial year is as follows:
Directors
Qualifications, Experience and Special Responsibilities
Relevant Interest in
Shares of Saunders
International Limited
at the date of this
report
Nicholas Yates
Non-Executive Chairman from 1 July 2023 Member of the Audit & Risk Committee
Member of the Remuneration Committee Director since 16 September 2020
Over 35 years of relevant industry experience Bachelor of Engineering (BE)
Other listed company directorships in the last 3 years
y Chairman - BSA Limited
35,211
Mark Benson
Managing Director from 5 October 2015
Director since 10 August 2015
AdvDipMan, AdvDipProjMgt, GAICD
Over 30 years of relevant industry experience
3,673,303
Greg Fletcher
Non-Executive Director
Chairman of the Audit & Risk Committee and Member of the Remuneration
Committee Director since 1 July 2015
Bachelor of Commerce, Chartered Accountant
y Chairman of HealthShare Audit and Risk Committee
y Member of the NSW Police Force, NSW Health Infrastructure and Western Sydney
Local Health District Audit and Risk Committees
Other listed company directorships
y Co Vice Chairman Yancoal Australia 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
5,599
Brendan York
Non-Executive Director
Chairman of the Remuneration Committee and Member of the Audit & Risk
Committee 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)
y Wingara AG Limited (WNR)
y MaxiParts Limited (MXI)
Other current appointments
y MitchCap Pty Limited (Non-Executive Director)
y NAOS Asset Management Limited (Portfolio Manager)
Nil
Directors' Report (cont.)
Annual Report 2024
40
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 2024. 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 non-executive directors can not be granted options
and can not participate in the Employee Share Plan or the
Performance Rights Plan.
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 short term incentive (STI). The STI
bonus is based on an annual performance appraisal 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.
The managing director has also participated in the Employee
Share Plan and the Performance Rights Plan. Mark Benson
holds 169,100 options within the Employee Share Plan and
924,145 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 STI, capped at 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 and target project
pipeline 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 65% of assessable STI
with the remaining 35% focused on the Financial Performance
of the Group, EBIT and Cash at hand.
Key management personnel, as disclosed on page 43 of
the remuneration report, have participated in the Employee
Share Plan.
LONG-TERM INCENTIVE AND 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.
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 hold 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.
Directors' Report (cont.)
Annual Report 2024
41
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. In addition, other
employees hold an interest in 709,898 shares under the ESP.
PERFORMANCE RIGHTS PLAN
The Saunders International Rights Plan was approved by the
Board and approved by shareholders at the Annual General
Meeting in October 2023.
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 can 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 adjusted earnings per share
(EPS) from the base year. Adjusted EPS will exclude specific
one off for abnormal items by the Board at its discretion.
The vesting scale applied to the tranches are subject to
objective measurement of Saunders performing relative
to the comparator group and NEPSG, as appropriate, with
the vesting scale ranging continuously from very poor
performance (CAGR of 5%), to on-target performance (CAGR
of 10%), to very good performance (CAGR of 15%).
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.
During the year 364,090 Performance Rights were granted
to the CEO under the LTI Plan. The aggregate fair value of
the Performance Rights granted is $176,247 as set out on
page 43. A further 160,434 Performance rights were granted
to the CFO under the LTI Plan. The aggregate fair value of
the Performance Rights granted to the CFO is $77,662 as
set out on page 43. Under the rules of the Performance
Rights Plan, cessation of employment after the first year of
the measurement period will generally not result in forfeiture
of unvested Performance Rights, unless the cessation of
employment relates to termination for cause, or another clause
of the rules allows for Board discretion to trigger forfeiture or
lapsing of the performance rights.
Directors' Report (cont.)
Annual Report 2024
42
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 financial
performance levels of the Group.
Executive officers’ 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 for the Managing Director and Chief Executive Officer of $628,100 (excluding
superannuation conttributions)
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 50% 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 agreements include employee or
employer initiated notice periods between three to six months. 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 2024:
30 June 2024
$’000
30 June 2023
$’000
30 June 2022
$’000
30 June 2021
$’000
30 June 2020
$’000
Revenue
216,079
200,886
129,955
101,242
66,462
Net profit/(loss) before income tax
14,604
14,151
9,379
8,085
1,853
Net profit/(loss) after income tax
9,363
9,491
6,551
5,542
1,266
30 June 2024
30 June 2023
30 June 2022
30 June 2021
30 June 2020
Share price at end of year
0.81
1.12
1.02
0.79
0.48
Interim dividend (cents per share)
2.00
2.00
1.00
0.75
0.00
Final dividend (cents per share)
2.25
2.00
2.00
1.75
0.00
Basic earnings/(losses) per share
8.27
8.84
6.24
5.36
1.23
Diluted earnings/(losses) per share
8.16
8.71
6.07
5.21
1.20
All dividends above were franked to 100% at 30% corporate tax rate.
Directors' Report (cont.)
Annual Report 2024
43
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 2024 were:
Fully paid
ordinary
shares 2023
Fully paid
ordinary
shares issued/
purchased
during 2024
Fully paid
ordinary
shares at
end 2024
Share options
2023
Share options
vested/ lapsed
during
2024
Share options
granted
during 2024
Share options
at end 2024
Performance
rights at end
2023
Performance
rights granted
during 2024
Performance
rights vested/
lapsed during
2024
Performance
rights at end
2024
Number
Number
Number
Number
Number
Number
Number
Number
Number
Number
Non-executive Directors
Nicholas Yates
35,211
-
35,211
-
-
-
-
-
-
-
-
Greg Fletcher
5,599
-
5,599
-
-
-
-
-
-
-
-
Brendan York1
-
-
-
-
-
-
-
-
-
-
-
Former Non-executive Directors
Timothy Burnett2
11,686,311
(11,686,311)
-
TOTAL
11,727,121
(11,686,311)
40,810
-
-
-
-
-
-
-
-
Executive Officers
Mark Benson3
3,233,286
440,017
3,673,303
269,100
(100,000)
-
169,100
967,282
364,090
(407,226)
924,146
Brett Gregory4
-
44,504
44,504
-
-
-
-
44,504
160,434
(44,504)
160,434
TOTAL
3,233,286
484,521
3,717,807
269,100
(100,000)
-
169,100
1,011,786
524,524
(451,730)
1,084,580
GRAND TOTAL
14,960,407
(11,201,790)
3,758,617
269,100
(100,000)
-
169,100
1,011,786
524,524
(451,730)
1,084,580
1. Appointed a Non-executive Director on 24 July 2023.
2. Resigned as Non-executive Director 21 November 2023. The reduction in shares in 2024 only reflects the fact that Mr Burnett is no longer a Non-executive Director.
3. Managing Director & Chief Executive Officer.
4. Appointed Chief Financial Officer 9 January 2023. Resigned on 28 August 2024.
The following table summarises the value of options and performance rights granted during the financial year to non-executive
directors and key management personnel as part of their remuneration:
Share options granted
during 2024
Share options forfeited
during 2024
Share options vested
during 2024
Performance rights
granted during 2024
Performance rights
forfeited / (lapsed)
during 2024
Performance rights
vested during 2024
Fair Value
$
Fair Value
$
Fair Value
$
Fair Value
$
Fair Value
$
Fair Value
$
Non-executive Directors
Nicholas Yates
-
-
-
-
-
-
Greg Fletcher
-
-
-
-
-
-
Brendan York1
-
-
-
-
-
-
Timothy Burnett2
-
-
-
-
-
-
TOTAL
-
-
-
-
-
-
Executive Officers
Mark Benson3
-
-
15,330
176,247
(13,260)
198,905
Brett Gregory4
-
-
-
77,662
-
49,110
TOTAL
-
-
15,330
253,909
(13,260)
248,015
GRAND TOTAL
-
-
15,330
253,909
(13,260)
248,015
1. Appointed Non-executive Director 24 July 2023.
2. Resigned as Non-executive Director 21 November 2023.
3. Managing Director & Chief Executive Officer.
4. Appointed Chief Financial Officer 9 January 2023. Resigned on 28 August 2024.
The value of the options and rights granted to non-executive directors and 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.
Directors' Report (cont.)
Annual Report 2024
44
AUDITED REMUNERATION REPORT (CONT.)
REMUNERATION OF EXECUTIVE OFFICERS AND KEY MANAGEMENT PERSONNEL
2024
Short-term Benefits
Post-
employment
Benefits -
Superannuation
Long-term employee benefits7
Total
Percentage of
remuneration
related to
performance
Cash Fees/
Salary
Cash Bonus5
Non-monetary
Benefit6
Cash settled
share-based
payments
Equity settled
share-based
payments
$
$
$
$
$
$
$
%
Non-executive Directors
Nicholas Yates
117,647
-
-
12,941
-
-
130,588
-
Greg Fletcher
76,923
-
-
8,462
-
-
85,385
-
Brendan York1
72,322
-
-
7,955
-
-
80,277
-
Timothy Burnett2
32,051
-
-
3,526
-
-
35,577
-
TOTAL
298,943
-
-
32,884
-
-
331,827
-
Executive Officers
Mark Benson3
614,895
341,129
3,610
27,500
-
368,460
1,355,594
52.3%
Brett Gregory4
464,500
163,455
-
25,208
2,734
77,662
733,559
32.9%
Total
1,079,395
504,584
3,610
52,708
2,734
446,122
2,089,153
Grand total
1,378,338
504,584
3,610
85,592
2,734
446,122
2,420,980
1 Appointed a Non-executive Director on 24 July 2023. 2 Resigned as Non-executive Director on 21 November 2023. 3 Managing Director & Chief Executive Officer. 4. Appointed Chief Financial Officer 9 January 2023. Resigned on
28 August 2024. 5 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 2024 bonus includes $71,841 that was paid in FY24 but which related to FY23 and Brett Gregory’s 2024 bonus includes $11,888 that was paid in FY24 but which related to
FY23, as the decision to award these additional incentives was made after the 30 June 2023 Annual Report was approved. 6 Non-monetary benefits relate to motor vehicle or other expenses packaged within the Executive Officer‘s
salary package. 7 Share-based long-term employee benefits reflect the accounting expense on a fair value basis.
2023
Short-term Benefits
Post-
employment
Benefits -
Superannuation
Long-term employee benefits7
Total
Percentage of
remuneration
related to
performance
Cash Fees/
Salary
Cash Bonus5
Non-monetary
Benefit6
Cash settled
share-based
payments
Equity settled
share-based
payments
$
$
$
$
$
$
$
%
Non-executive Directors
Timothy Burnett
110,481
-
-
11,601
-
-
122,082
Greg Fletcher
72,118
-
-
7,573
-
-
79,691
Nicholas Yates
72,118
-
-
7,573
-
-
79,691
Brendan York1
-
-
-
-
-
-
-
TOTAL
254,717
-
-
26,747
-
-
281,464
Executive Officers
Mark Benson2
548,239
353,243
14,427
27,132
-
107,601
1,050,642
43.9%
Brett Gregory3
184,384
67,242
-
13,256
48,516
-
313,398
36.9%
Former Executive Officers
Rudy Sheriff4
289,245
80,000
3,303
16,862
-
-
389,410
20.5%
Total
1,021,868
500,485
17,730
57,250
48,516
107,601
1,753,450
Grand total
1,276,585
500,485
17,730
83,997
48,516
107,601
2,034,914
1 Appointed a Non-executive Director on 24 July 2023. 2 Managing Director & Chief Executive Officer. 3. Appointed Chief Financial Officer 9 January 2023. Resigned on 28 August 2024. 4 Resigned as Chief Financial Officer 28
February 2023. 5 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. 6 Non-monetary benefits relate to motor vehicle or other expenses packaged
within the employee’s salary package. 7 Share-based long-term employee benefits reflect the accounting expense on a fair value basis.
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 a 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.
Directors' Report (cont.)
Annual Report 2024
45
AUDITED REMUNERATION REPORT (CONT.)
SHORT TERM INCENTIVE (STI)PERFORMANCE OUTCOMES
2024
Name
Actual
STI¹
Actual STI
% of TFR
Maximum
STI
% of maximum
payable
% of maximum
forfeited
Mark Benson
$269,288
41.1%
$393,360
68.5%
31.5%
Brett Gregory
$151,567
30.8%
$221,400
68.5%
31.5%
1 Actual STI relates to assessed STI for financial year. Refer to table on page 44 for total STI paid or payable for the year including adjustments from prior year.
2023
Name
Actual
STI¹
Actual STI
% of TFR
Maximum
STI
% of maximum
payable
% of maximum
forfeited
Mark Benson
$293,243
49.2%
$357,600
82.0%
18.0%
Brett Gregory2
$67,242
24.6%
$82,000
82.0%
18.0%
Rudy Sheriff3
$80,000
29.4%
$81,630
98.0%
2.0%
1 Actual STI relates to assessed STI for financial year. Refer to the above remuneration table on this page for total STI paid or payable for the year including
adjustments from prior year.
2 Appointed Chief Financial Officer 9 January 2023. The 2023 STI represents an 8 month pro-rata of a full financial year entitlement.
3 Resigned as Chief Financial Officer 28 February 2023.
Directors' Report (cont.)
Annual Report 2024
46
SUBSEQUENT EVENTS
On 5 August 2024, Saunders secured the CIL3 Tanks
Replacement project at Kalgoorlie Consolidated Gold Mines,
awarded by Northern Star Resources at a contract value
of $31.5 million. The project will contribute to revenue and
earnings in FY25 through to FY27.
On 7 August 2024, Saunders secured four contracts in the
civil infrastructure sector, totalling $20.59 million. Each of the
four projects includes the demolition of an existing bridge as
well as the design and construction of a new concrete bridge
structure. These projects will contribute to Saunders revenue
and earnings in FY25 and FY26.
Other than the dividends described in Note 15 of the
Consolidated Financial Report on page 80, 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 occur frequently at Board meetings.
During the financial year, Saunders was 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 36 and 37.
INDEMNIFICATION OF OFFICERS AND
AUDITORS
During the financial year, the Group paid a premium in respect
of a contract ensuring 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.
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 $62,398 paid or payable
for non-audit services (2023: Nil).
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration is included on
page 48 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
Nicholas Yates
Director
Director
Sydney, 28 August 2024
Sydney, 28 August 2024
Directors' Report (cont.)
Annual Report 2024
47
Annual Report 2024
48
Auditor’s Independence Declaration
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
Deloitte Touche Tohmatsu
ABN 74 490 121 060
8 Parramatta Square
Level 37, 10 Darcy Street
Parramatta NSW, 2150
Australia
Phone: +61 2 9322 7000
www.deloitte.com.au
28 August 2024
The Board of Directors
Saunders International Limited
Suite 101, Level 1
3 Rider Boulevard
Rhodes, NSW, 2138
Dear Board Members
Auditor’s Independence Declaration to Saunders International Limited
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 2024, 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
Annual Report 2024
49
Auditor’s Report
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
Deloitte Touche Tohmatsu
ABN 74 490 121 060
8 Parramatta Square
Level 37, 10 Darcy Street
Parramatta NSW, 2150
Australia
Phone: +61 2 9322 7000
www.deloitte.com.au
Independent Auditor’s Report to the Members of
Saunders International Limited
Report on the Audit of the Financial Report
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 2024, 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 material accounting policy information and other explanatory information, the directors’ declaration and
the Consolidated Entity Disclosure Statement.
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 2024 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.
Annual Report 2024
50
Key Audit Matter
How the scope of our audit responded to the Key Audit
Matter
Recognition of construction revenue
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 2024 the Group’s revenue from
construction contracts is $216 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 life, the unique nature of individual
contract terms leading to complex and judgmental
revenue recognition from contracts.
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;
§
assessed
appropriateness
of
contingency
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
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.
Auditor’s Report (cont.)
Annual Report 2024
51
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 2024, 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 in accordance with the Corporations Act 2001, including giving a
true and fair view of the financial position and performance of the Group in accordance with Australian
Accounting Standards; and
•
For such internal control as the directors determine is necessary to enable the preparation of the financial
report in accordance with the Corporations Act 2001, including giving a true and fair view of the financial
position and performance of the Group, 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 scepticism 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.
Auditor’s Report (cont.)
Annual Report 2024
52
•
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.
•
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.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 40 to 45 of the Directors’ Report for the year ended
30 June 2024. In our opinion, the Remuneration Report of Saunders International Limited, for the year ended 30
June 2024, 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, 28 August 2024
Auditor’s Report (cont.)
Annual Report 2024
53
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 Standards, 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;
d.
the directors have been given the declarations required
by s.295A of the Corporations Act 2001; and
e.
in the directors' opinion, the attached consolidated entity
disclosure statement is true and correct.
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
Nicholas Yates
Director
Director
Sydney, 28 August 2024
Sydney, 28 August 2024
Directors’
Declaration
Annual Report 2024
54
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2024
Note
2024
$’000
2023
$’000
Revenue
3
216,079
200,886
Other income
4
556
436
Materials and third-party costs charged to projects
(108,675)
(115,078)
Employee benefits expense
4
(77,050)
(60,754)
Depreciation expense
4
(4,292)
(3,036)
Motor vehicle expense
(413)
(426)
Occupancy and operating lease expense
(1,191)
(866)
Finance costs
4
(653)
(397)
Other expenses
(9,757)
(6,614)
Profit before income tax
14,604
14,151
Income tax expense
5
(5,241)
(4,660)
Profit for the year attributable to shareholders of the parent entity
9,363
9,491
Net other comprehensive expenses - exchange differences on translating foreign
currency transactions
(33)
-
Total comprehensive profit attributable to shareholders of the parent entity
9,330
9,491
Basic (cents per share)
14
8.27
8.84
Diluted (cents per share)
14
8.16
8.71
The accompanying notes form part of these financial statements.
Financial
Report
Annual Report 2024
55
Financial Report (cont.)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024
Note
2024
$’000
2023
$’000
Current assets
Cash and cash equivalents
18
19,807
12,833
Trade and other receivables
6
25,623
23,099
Contract Assets
10
20,566
33,145
Inventories
359
136
Other current Assets
538
196
Total current assets
66,893
69,409
Non-current assets
Property, plant and equipment
7
14,809
11,495
Right-of-use assets
8
12,434
4,952
Intangible asset
20
17,392
3,978
Deferred tax assets
5
1,671
823
Total non-current assets
46,306
21,248
Total assets
113,199
90,657
Current liabilities
Trade and other payables
9
28,194
25,727
Contract liabilities
10
5,600
11,174
Provisions
11
5,231
6,887
Other financial liabilities
21
8,100
-
Current tax liability
5
1,478
2,300
Lease liabilities
8
2,251
1,838
Total current liabilities
50,854
47,926
Non-current liabilities
Provisions
11
1,358
809
Lease liabilities
8
9,692
2,647
Total non-current liabilities
11,050
3,456
Total liabilities
61,904
51,382
Net assets
51,295
39,275
Equity
Issued capital
12
30,918
24,104
Treasury shares under employee share plan
12
(1,230)
(1,475)
Share based payments reserve
799
572
Foreign currency translation reserve
(33)
-
Retained earnings
13
20,841
16,074
Total equity
51,295
39,275
The accompanying notes form part of these financial statements.
Annual Report 2024
56
Financial Report (cont)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2024
Issued
Capital
$’000
Treasury
Shares
$’000
Share
Based
Payments
Reserve
$’000
Foreign
Currency
Translation
Reserve
$’000
Retained
Earnings
$’000
Total
$’000
Balance at 30 June 2022
22,482
(1,806)
384
-
10,965
32,025
Balance at 1 July 2022
22,482
(1,806)
384
-
10,965
32,025
Profit and other comprehensive income
-
-
-
-
-
-
Profit for the year
-
-
-
-
9,491
9,491
Total profit and other comprehensive income
-
-
-
-
9,491
9,491
Transactions with owners in their capacity as Owners
Dividends paid
-
-
-
-
(4,382)
(4,382)
Shares issued during the year
1,400
-
-
-
-
1,400
Treasury Shares issued during the year
(274)
331
-
-
-
57
Shares vested during the year
496
-
(496)
-
-
-
Share-based payments expense
-
-
684
-
-
684
Total transactions with owners in their
capacity as owners
1,622
331
188
-
(4,382)
(2,241)
Balance at 30 June 2023
24,104
(1,475)
572
-
16,074
39,275
Balance at 1 July 2023
24,104
(1,475)
572
-
16,074
39,275
Profit and other comprehensive income
-
-
-
(33)
-
(33)
Profit for the year
-
-
-
-
9,363
9,363
Total profit and other comprehensive income
-
-
-
(33)
9,363
9,330
Dividends paid
(4,596)
(4,596)
Shares issued during the year
6,500
-
-
-
-
6,500
Treasury Shares issued during the year
(129)
245
-
-
-
116
Shares vested during the year
443
-
(443)
-
-
-
Share-based payments expense
-
-
670
-
-
670
Total transactions with owners in their
capacity as owners
6,814
245
227
-
(4,596)
2,690
Balance at 30 June 2024
30,918
(1,230)
799
(33)
20,841
51,295
The accompanying notes form part of these financial statements.
Annual Report 2024
57
Financial Report (cont.)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2024
Note
2024
$’000
2023
$’000
Cash flows from operating activities
Receipts from customers
223,255
200,483
Payments to suppliers and employees
(196,691)
(210,304)
Interest received
117
132
Finance costs paid
(653)
(397)
Income taxes paid
(6,707)
(4,010)
Net cash inflow / (outflow) from operating activities
18
19,321
(14,096)
Cash flows from investing activities
Payments for plant and equipment
(2,648)
(1,135)
Proceeds from sale of assets
1,657
331
Payments for business acquisition
21
(4,500)
(2,754)
Net cash used in investing activities
(5,491)
(3,558)
Cash flows from financing activities
Dividends paid
(4,596)
(4,382)
Proceeds from issue of shares
116
57
Proceeds of borrowings
1,974
2,128
Repayment of borrowings
(1,974)
(1,951)
Repayments of interest bearing liabilities
(2,379)
(2,113)
Net cash used in financing activities
(6,859)
(6,261)
Net increase/ (decrease) in cash and cash equivalents
6,971
(23,915)
Cash and cash equivalents at the beginning of the financial year
12,833
36,746
Effects of exchange rate fluctuations on cash held
3
2
Cash and cash equivalents at the end of the financial year
18
19,807
12,833
The accompanying notes form part of these financial statements.
Annual Report 2024
58
Financial Report (cont)
NOTES TO THE FINANCIAL
STATEMENTS
1. SUMMARY OF MATERIAL 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 28 August 2024.
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 2023.
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.
Financial Report (cont.)
Annual Report 2024
59
Financial Report (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.
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.
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
60
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.
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.
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.
Financial Report (cont.)
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
61
Financial Report (cont.)
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.
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.
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.
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
62
Financial Report (cont)
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.
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.
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
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
63
Financial Report (cont.)
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.
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.
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.
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
64
Financial Report (cont)
(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.
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;
(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.
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
65
Financial Report (cont.)
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).
(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.
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
66
Financial Report (cont)
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.
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.
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.
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.
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
67
Financial Report (cont.)
3. REVENUE
Revenue stream
Revenue
recognition
Australia
$’000
Other
regions
$’000
Total
2024
$’000
Australia
$’000
Other
regions
$’000
Total
2023
$’000
Engineering & Construction
Over time
102,373
1,082
103,455
128,360
-
128,360
Services
Over time
67,875
-
67,875
43,425
-
43,425
Fabrication & Construction
Over time
44,749
-
44,749
29,101
-
29,101
Total revenue
214,997
1,082
216,079
200,886
-
200,886
4. PROFIT BEFORE TAX FOR THE YEAR
Note
2024
$’000
2023
$’000
Other income
Interest Income
117
132
Sale of scrap material and other
439
304
Total other income
556
436
Profit before income tax has been arrived at after (crediting)/charging the following expenses:
Cost of sales1
165,118
166,895
Loss on sale of property, plant & equipment and right-of-use assets2
558
116
1 The cost of sales above relates to labour, materials and subcontractor costs directly incurred in deriving revenue for the Group during the financial year.
2 During FY24, the precast operations were divested, resulting in a loss on sale of property plant & equipment and right-of-use assets of $0.7 million.
2024
$’000
2023
$’000
Depreciation expense
Buildings
49
11
Plant, equipment and motor vehicles
2,065
1,607
Right-of-use-assets
1,977
1,236
Office furniture and other equipment
201
182
Total Depreciation expense
4,292
3,036
Finance costs
Finance cost on lease liabilities
534
338
Other
119
59
Total finance costs
653
397
Employee benefits expense
Post-employment benefits – defined contributions
6,419
4,741
Payroll tax expense
3,802
2,897
Workers compensation insurance
1,436
1,748
Employee share based payment expense
670
684
Salary and wages (net of recharge to work-in-progress)
64,723
50,684
Total employee benefits expense
77,050
60,754
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
68
Financial Report (cont)
5. INCOME TAX
Income tax recognised in profit
2024
$’000
2023
$’000
Income tax expense comprises:
Current income tax expense – current year
5,844
5,356
Current income tax expense – prior year
38
-
Deferred tax (benefit) relating to the origination and reversal of temporary differences
(641)
(696)
Total income tax expense
5,241
4,660
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
14,604
14,151
Income tax at 30%
4,381
4,245
Non-temporary differences
816
415
Under / (over) provision in prior years
44
-
Total income tax expense
5,241
4,660
Current tax liability
1,478
2,300
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.
(a) 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
2024
Deferred tax assets
Employee benefits
1,229
223
207
1,659
Provisions
969
(673)
-
296
Provision for losses end of site
3
19
-
22
Lease liabilities
281
523
2,034
2,838
Tax losses
79
(63)
-
16
Share issue costs
-
-
-
-
Accruals and other
618
181
-
799
Deferred tax assets
3,179
210
2,241
5,630
2024
Deferred tax liabilities
Property, plant and equipment
(2,039)
929
-
(1,110)
Right of use asset
(316)
(499)
(2,034)
(2,849)
Other
(1)
1
-
-
Deferred tax liabilities
(2,356)
431
(2,034)
(3,959)
Net deferred tax assets / (liabilities)
823
641
207
1,671
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
69
Financial Report (cont.)
5. INCOME TAX (CONT.)
Opening
balance
$’000
(Charged)/
Credited to
income
$’000
Business
Combination
$’000
Closing
balance
$’000
2023
Deferred tax assets
Employee benefits
881
155
193
1,229
Provisions
708
261
-
969
Contract assets
1
2
-
3
Lease liabilities
218
63
-
281
Tax losses
79
-
-
79
Share issue costs
63
(63)
-
-
Accruals and other payables
281
329
8
618
Deferred tax assets
2,231
747
201
3,179
2023
Deferred tax liabilities
Property, plant and equipment
(2,020)
(17)
(2)
(2,039)
Right of use asset
(262)
(54)
-
(316)
Other
(21)
20
-
(1)
Deferred tax liabilities
(2,303)
(51)
(2)
(2,356)
Net deferred tax (liabilities) / assets
(72)
696
199
823
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
70
Financial Report (cont)
6. TRADE AND OTHER RECEIVABLES
2024
$’000
2023
$’000
Gross trade and other receivables
25,624
23,191
Credit loss allowance
(1)
(92)
Net trade and other receivables
25,623
23,099
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 2024 and
30 June 2023 was determined as follows:
Provision matrix
2024
Australia
2024
Other
regions
2023
Australia
2023
Other
regions
Current
0.0%
0.0%
0.0%
0.0%
1 to 30 days
0.0%
0.0%
0.1%
0.0%
30 to 60 days
0.0%
0.0%
0.2%
0.0%
60 to 90 days
0.0%
0.0%
0.4%
0.0%
Over 90 days
0.0%
0.0%
6.6%
0.0%
Contract assets
0.0%
0.0%
0.0%
0.0%
2024
Australia
$’000
2024
Other
regions
$’000
2024
Total Group
$’000
2023
Australia
$’000
2023
Other
regions
$’000
2023
Total Group
$’000
Receivables
Current
15,332
-
15,332
16,466
441
16,907
1 to 30 days
5,164
465
5,629
4,323
-
4,323
30 to 60 days
961
-
961
434
-
434
60 to 90 days
834
-
834
246
-
246
Over 90 days
2,836
32
2,868
1,281
-
1,281
Gross trade and other
receivables
25,127
497
25,624
22,750
441
23,191
Allowance based on historic
credit losses
-
-
-
-
-
-
Adjustment for expected
changes in credit risk ¹
(1)
-
(1)
(92)
-
(92)
Credit loss allowance
(1)
-
(1)
(92)
-
(92)
Net trade and other receivables 2
25,126
497
25,623
22,658
441
23,099
Contract assets (Note 10)
20,442
124
20,566
33,145
-
33,145
Total receivables and contract
assets
45,568
621
46,189
55,803
441
56,244
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.
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
71
Financial Report (cont.)
7. PROPERTY, PLANT AND EQUIPMENT
(a) 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 2024 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.
Land at
cost
$’000
Buildings at
cost
$’000
Plant and
Equipment
at cost
$’000
Office
furniture and
equipment
at cost
$’000
Total
$’000
Gross carrying amount
Balance at 30 June 2022
3,400
1,150
18,554
1,277
24,381
Business acquisition
-
-
106
89
195
Additions
-
-
905
187
1,092
Disposals
-
-
(182)
(146)
(328)
Balance at 30 June 2023
3,400
1,150
19,383
1,407
25,340
Business acquisition
-
-
4,662
156
4,818
Additions
-
-
2,231
455
2,686
Disposals1
-
-
(8,915)
(286)
(9,201)
Balance at 30 June 2024
3,400
1,150
17,361
1,732
23,643
Accumulated depreciation
Balance at 30 June 2022
-
148
11,181
966
12,295
Disposals
-
-
(147)
(103)
(250)
Depreciation expense
-
11
1,607
182
1,800
Balance at 30 June 2023
-
159
12,641
1,045
13,845
Disposals1
-
-
(7,118)
(208)
(7,326)
Depreciation expense
-
49
2,065
201
2,315
Balance at 30 June 2024
-
208
7,588
1,038
8,834
Net book value
As at 30 June 2023
3,400
991
6,742
362
11,495
As at 30 June 2024
3,400
942
9,773
694
14,809
1 During FY24, Saunders divested the precast operations. This included Plant and Equipment with a net book value of $1.7 million. There were other asset disposals in
the ordinary course of business that had a net book value of $0.1 million. A detailed review of Property, Plant and Equipment also resulted in write-off of $5.0 million
of assets that had been fully depreciated.
8. LEASES
The Group is lessee to numerous office leases, motor vehicle leases and construction equipment loans. Office leases have a mix
of variable and 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 4.8 years. The average lease term
for motor vehicles and other equipment is 4.3 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.
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
72
Financial Report (cont)
8. LEASES (CONT.)
Amounts recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income includes
the following amounts relating to leases:
2024
$’000
2023
$’000
Depreciation Charge for Right of Use Assets
1,977
1,236
Total Depreciation Charge for Right of Use Assets
1,977
1,236
Other cost relating to leases
Interest expense on lease liabilities (included in Finance Costs)
534
338
Total costs relating to leases
534
338
Amounts recognised in the Consolidated Statement of Financial Position includes the following amounts relating to leases:
Property
Other
Total
$’000
Right of use assets
Gross amount
Opening balance, 1 July 2022
1,415
3,962
5,377
Additions
679
2,426
3,105
Disposal
-
(705)
(705)
Balance as at 30 June 2023
2,094
5,683
7,777
Additions
9,376
424
9,800
Disposal1
(1,342)
(709)
(2,051)
Balance as at 30 June 2024
10,128
5,398
15,526
Accumulated depreciation
Opening balance, 1 July 2022
860
843
1,703
Disposals
-
(114)
(114)
Depreciation expense
398
838
1,236
Balance as at 30 June 2023
1,258
1,567
2,825
Right of use assets
Disposals1
(1,342)
(368)
(1,710)
Depreciation expense
1,161
816
1,977
Balance as at 30 June 2024
1,077
2,015
3,092
Net book value
As at 30 June 2023
836
4,116
4,952
As at 30 June 2024
9,051
3,383
12,434
1 During FY24, Saunders divested the precast operations. This included right-of-use assets with a net book value of $0.3 million. A detailed review of Property, Plant
and Equipment also resulted in write-off of $1.5 million of assets that had been fully depreciated.
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
73
Financial Report (cont.)
8. LEASES (CONT.)
Lease liabilities
2024
$’000
2023
$’000
Current
2,251
1,838
Non-Current
9,692
2,647
Total lease liabilities
11,943
4,485
Maturity analysis
2024
$’000
2023
$’000
Year 1
2,251
1,838
Year 2
2,082
1,185
Year 3
1,837
805
Year 4
1,291
521
Year 5
1,183
136
Onwards
3,299
-
Total lease liabilities
11,943
4,485
9. TRADE AND OTHER PAYABLES
2024
$’000
2023
$’000
Current
Trade payables 1
15,572
16,339
Other payables
3,552
1,148
Goods and services tax payable
1,332
120
Accruals
7,738
8,120
Total trade and other payables
28,194
25,727
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.
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
74
Financial Report (cont)
10. CONTRACT ASSETS AND CONTRACT LIABILITIES
2024
$’000
2023
$’000
Contract assets related to contracts
20,566
33,145
Contract liabilities relating to contracts
(5,600)
(11,174)
Contract assets
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
$11,174 million (2023: $13.023 million). Revenue recognised in the reporting period from performance obligations satisfied or
partially satisfied in previous periods was $13,744 million (2023: 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 2024 and 30 June 2023 are set out below.
Revenue stream
2024
$’000
2023
$’000
Engineering & Construction
59,897
58,672
Services
57,354
78,868
Fabrication & Construction
31,342
21,601
Total work in hand
148,593
159,141
Contracts in the different revenue streams 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
2024
$’000
2023
$’000
Current
Employee benefits
4,245
3,287
Warranty and maintenance provisions
986
3,600
Total current provisions
5,231
6,887
Non-current
Employee benefits
1,284
809
Other provisions
74
-
Total Non-current provisions
1,358
809
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
75
Financial Report (cont.)
12. ISSUED CAPITAL
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
Ordinary shares
2024
Number
2023
Number
Ordinary shares at beginning of financial year
109,029,823
105,895,210
Shares issued to vendors for acquisitions
6,762,704
1,331,091
Shares issued under Dividend Reinvestment Plan
-
-
Shares issued under Employee Share and Performance Rights Plans
645,572
1,445,496
Treasury shares vested during the year
383,432
358,026
Net Treasury shares issued during the year
-
-
Ordinary shares at end of financial year
116,821,531
109,029,823
Fully paid ordinary shares
2024
$’000
2023
$’000
Balance at beginning of financial year
24,104
22,482
Shares issued to vendors for acquisitions
6,500
1,400
Shares issued under Dividend Reinvestment Plan
-
-
Shares issued under Performance Rights Plan
443
496
Shares issued under Employee Share Plan
-
-
Net Treasury shares issued (lapsed) during the year
(129)
(274)
Balance at end of financial year
30,918
24,104
Treasury shares under employee share plan
2024
Number
2023
Number
Balance at beginning of financial year
1,849,924
2,207,950
Treasury shares vested during the year
(383,432)
(358,026)
Net Treasury shares issued during the year
-
-
Balance at end of financial year
1,466,492
1,849,924
Treasury shares under employee share plan
2024
$’000
2023
$’000
Balance at beginning of financial year
(1,475)
(1,806)
Net Treasury shares lapsed (issued) during the year
245
331
Balance at end of financial year
(1,230)
(1,475)
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
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.
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
76
Financial Report (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. No new tranches have been issued since 28 February 2022.
Tranches 1 to 12 all vested in financial years up to 30 June 2022.
Tranche 13: During the prior financial year 185,000 shares vested and 90,000 shares were forfeited.
Tranche 14: During the current financial year 10,000 shares were re-issued and 307,500 shares vested.
Tranche 15: During the current financial year 10,000 shares were re-issued and 20,000 shares were forfeited.
Tranche 16: During the current financial year 100,000 shares were forfeited.
Tranche 17: During the current financial year 44,915 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.
Two employees hold more than 150,000 options under the ESP. Details of the fair value assumptions used are as follows:
Tranche 13
Tranche 14
Tranche 15
Tranche 16
Tranche 17
Grant Date
Feb 2019
Feb 2020
Feb 2021
Aug 2021
Feb 2022
Grant Price
$0.33
$0.38
$0.69
$0.80
$1.02
Opening Volume
275,000
297,500
437,500
225,000
371,413
New grants
-
-
-
-
-
Grant re-issued
-
10,000
10,000
-
-
Exercised
(185,000)
(307,500)
-
-
-
Forfeitures
(90,000)
-
(20,000)
(100,000)
(44,915)
Closing Volume
-
-
427,500
125,000
326,498
Exercise Price
$0.33
$0.38
$0.69
$0.80
$1.02
Expected Volatility
45%
45%
45%
45%
45%
Option Life
4 years
4 years
4 years
4 years
4 years
Dividend Yield
0%
0%
0%
0%
0%
Risk Free Interest Rate
2.82%
4.33%
4.33%
4.33%
4.33%
Grant date fair value
$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.
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
77
Financial Report (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.
2024
2023
Number of
options
Weighted
average
exercise
price
Number of
options
Weighted
average
exercise
price
Balance at beginning of year
1,331,413
0.73
1,950,428
0.67
Granted during the year
-
-
-
-
Re-issued during the year
20,000
0.54
-
-
Forfeited during the year
(164,915)
0.85
(434,015)
0.63
Exercised during the year
(307,500)
0.38
(185,000)
0.33
Balance at end of year
878,998
0.83
1,331,413
0.73
Exercisable at end of year
-
-
-
-
Performance Rights Plan
The Saunders International Limited Rights Plan was approved by the Board and approved by shareholders at the Annual General
Meeting in October 2023.
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 can 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.
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 very poor performance (CAGR of
5%), to on-target performance (CAGR of 10%), to very good performance (CAGR of 15%).
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
Some Performance Rights may be granted over periods shorter or longer than the standard long-term incentive which vest over
a 3 year period. To date these performance rights have been granted to certain management personnel at the commencement of
their employment with Saunders, or during their employment with Saunders, and primarily have a service based vesting condition.
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
78
Financial Report (cont)
12. ISSUED CAPITAL (CONT.)
The Managing Director & Chief Executive Officer and certain 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 1,746,874. During the financial year,
645,571 rights vested, 27,964 rights were forfeited, 36,405 rights lapsed and 1,433,013 new rights were granted; resulting in total
unvested Performance Rights at the end of the financial year totaling 2,469,947.
Details of the fair value assumptions used are as follows:
Tranche 17
Tranche 18
Tranche 19
Tranche 20
Tranche 21
Tranche 22
Tranche 23
Tranche 24
Grant Date
1 Sep 2020
1 Sep 2020
1 Sep 2021
1 Sep 2021
1 Sep 2022
1 Sep 2022
9 Jan 2023
13 Mar 2023
Grant Price
$0.61
$0.61
$0.78
$0.78
$1.07
$1.07
$1.12
$1.17
Opening Volume
291,235
291,235
287,358
287,358
250,094
250,094
44,506
45,000
New grants
-
-
-
-
-
-
-
-
Lapsed
(36,405)
-
-
-
-
-
-
-
Forfeited
-
-
(7,804)
(7,804)
(6,178)
(6,178)
-
-
Vested
(254,830)
(291,235)
-
-
-
-
(44,506)
(45,000)
Closing Volume
-
-
279,554
279,554
243,916
243,916
-
-
Exercise Price
$0
$0
$0
$0
$0
$0
$0
$0
Expected Volatility
26.87%
26.87%
26.87%
26.87%
26.87%
26.87%
26.87%
26.87%
Option Life Remaining
0 years
0 years
0.17 years
0.17 years
1.17 years
1.17 years
0 years
0 years
Dividend value
$0.06
$0.06
$0.06
$0.06
$0.06
$0.06
$0.06
$0.06
Risk Free Interest Rate
1.93%
1.93%
1.93%
1.93%
1.93%
1.93%
1.93%
1.93%
Grant date fair value
$0.52
$0.52
$0.70
$0.70
$0.92
$0.92
$1.10
$1.15
Tranche 25
Tranche 26
Tranche 27(a)1
Tranche 27(b)1
Tranche 28
Tranche 291
Grant Date
1 Sep 2023
1 Sep 2023
1 Nov 2022
1 Nov 2022
1 Dec 2023
1 Aug 2021
Grant Price
$1.07
$1.07
$1.05
$1.05
$0.96
$0.79
Opening Volume
-
-
-
-
-
-
New grants
550,011
550,011
10,000
20,000
208,085
94,900
Lapsed
-
-
-
-
-
-
Forfeited
-
-
-
-
-
-
Vested
-
-
(10,000)
-
-
-
Closing Volume
550,011
550,011
-
20,000
208,085
94,900
Exercise Price
$0
$0
$0
$0
$0
$0
Expected Volatility
26.87%
26.87%
26.87%
26.87%
26.87%
26.87%
Option Life Remaining
2.17 years
2.17 years
0 years
0.34 years
2.0 years
0.08 years
Dividend value
$0.06
$0.06
$0.06
$0.06
$0.06
$0.06
Risk Free Interest Rate
1.93%
1.93%
1.93%
1.93%
1.93%
1.93%
Grant date fair value
$0.92
$0.92
$1.00
$0.95
$0.84
$0.71
1 Tranches 27(a), 27(b), and 29 were granted in the 2022 and 2023 financial years. The disclosure and accounting of these tranches did not commence until the
current financial year.
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. Option Life Remaining period refers to the remaining
contractual life of the Performance Rights prior to their vesting date. Dividend value relates to the estimated value of dividends
not payable to rights holders from the date of grant to the vesting date. The Performance Rights outstanding at the end of the
year has a weighted average remaining contractual life of 1.41 years.
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
79
Financial Report (cont.)
13. RETAINED EARNINGS
2024
$’000
2023
$’000
Balance at beginning of financial year
16,074
10,965
Profit after tax for the year
9,363
9,491
Dividends provided for or paid
(4,596)
(4,382)
Balance at end of financial year
20,841
16,074
14. EARNINGS PER SHARE
2024
Cents per
share
2023
Cents per
share
Basic earnings per share
8.27
8.84
Diluted earnings per share
8.16
8.71
The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows:
2024
$’000
2023
$’000
Net profit after tax
9,363
9,491
Earnings used in the calculation of basic and diluted EPS
9,363
9,491
2024
No.’000
2023
No.’000
Weighted average number of ordinary shares for the purposes of basic earnings per share
113,226
107,329
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:
Weighted average number of ordinary shares used in the calculation of basic EPS
113,226
107,329
Shares deemed to be issued for no consideration in respect of employee options and
performance rights 1
1,502
1,694
Weighted average number of ordinary shares and potential ordinary shares used in the
calculation of diluted earnings per share
114,728
109,023
1 During the year ended 30 June 2024 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.
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
80
Financial Report (cont)
15. DIVIDENDS
2024
2023
Cents per
share
Total
$’000
Cents per
share
Total
$’000
Recognised amounts
Fully paid ordinary shares
Final dividend (prior year) Fully franked at a 30% tax rate
2.00
2,230
2.00
2,191
Interim dividend (current year) Fully franked at a 30% tax rate
2.00
2,366
2.00
2,191
4.00
4,596
4.00
4,382
Unrecognised amounts
Fully paid ordinary shares
Final dividend (current year):
2.25
2,671
2.00
2,218
The Board declared on 27 August 2024 that there will be a final dividend payable of 2.25 cents per share fully franked
(2023: 1.00 cents final dividend and 1.00 cents special dividend). The dividend will be payable on 15 October 2024 with the
record date for determining dividends on 17 September 2024.
2024
$’000
2023
$’000
Franking account balance
10,956
7,020
16. SEGMENT INFORMATION
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 38% of the revenue earned (2023: 58% of the revenue earned). These customers
accounted for $81.1 million of the Groups’ total revenue (2023: $115.8 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 as no claim has been deemed material.
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
81
Financial Report (cont.)
18. NOTES TO THE STATEMENT OF CASH FLOWS
2024
$’000
2023
$’000
(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
19,807
12,833
(b) Reconciliation of profit/(loss) for the year to net cash flows from operating activities
Profit for the year
9,363
9,491
Share-based payments expense
670
684
Depreciation
4,292
3,036
Loss on disposal of non-current assets
558
116
Unrealised foreign exchange loss
(32)
(2)
(Increase)/decrease in assets:
Current tax liability
(822)
351
Deferred tax assets
(645)
(623)
Deferred tax liabilities
-
(73)
Trade and other receivables
(268)
7,260
Contract assets
12,579
(23,805)
Inventories
28
53
Other assets
(342)
(4)
Increase/(decrease) in liabilities:
Trade and other payables
211
(10,519)
Contract liabilities
(5,574)
(1,849)
Provisions
(697)
1,788
Net cash inflow / (outflow) from operating activities
19,321
(14,096)
(c) Financing facilities
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
19,296
25,698
Amount unused
20,704
14,302
40,000
40,000
The facilities have financial covenants relating to the Group’s liquidity ratio.
(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
30June 2023
$’000
Financing
Cash Flows1
$’000
Non -Cash
Movement
in Finance
Leases
$’000
Balance at
30 June
2024
$’000
Lease liabilities
4,485
(2,379)
9,837
11,943
1 Financing cash flows comprise of repayment of borrowings and payments in relation to finance leases.
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
82
Financial Report (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.
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.
Categories of financial instruments
2024
$’000
2023
$’000
Financial assets
Cash and cash equivalents
19,807
12,833
Trade and other receivables
25,623
23,099
Total financial assets
45,430
35,932
Financial liabilities
Trade and other payables
19,124
17,487
Lease Liabilities
11,943
4,485
Total financial liabilities
31,067
21,972
Obligations under finance leases
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.
Liquidity risk management
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.
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
83
Financial Report (cont.)
19. FINANCIAL INSTRUMENTS (CONT.)
Weighted
average
effective
interest rate
%
Less than 1
month
$’000
1 to 3
months
$’000
3 months to
5 years
$’000
Total
$’000
2024
Financial assets
Cash and cash equivalents
0.56%
19,807
-
-
19,807
Trade receivables
0.00%
15,331
7,424
2,868
25,623
Financial liabilities
Trade and other payables
0.00%
10,564
8,294
266
19,124
Lease liabilities
5.88%
200
364
11,379
11,943
2023
Financial assets
Cash and cash equivalents
0.51%
12,833
-
-
12,833
Trade receivables
0.00%
16,815
5,003
1,281
23,099
Financial liabilities
Trade and other payables
0.00%
5,936
11,333
218
17,487
Lease liabilities
6.76%
158
321
4,006
4,485
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 $52 thousand (2023: $61 thousand).
Foreign currency risk
The Group manages its foreign currency risk arising from significant supplier contracts in foreign currencies by holding foreign
currency. As a result of operations in Papua New Guinea the Group’s statement of financial position can be affected by
movements in the PGK/A$ 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 2024, 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 2024, the Group had A$3 thousand (2023: $77 thousand) of cash in PGK.
At reporting date, if the PGK/AUD exchange rate had moved by 5%, with all other variables held constant, the group’s profit or loss
would increase or decrease by $0 thousand (2023: $4 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.
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
84
Financial Report (cont)
20. INTANGIBLE ASSETS
Goodwill
2024
$’000
2023
$’000
Balance at beginning of financial year
3,978
321
Additions through business combinations
- Saunders Automation (formerly Automation IT)
-
3,657
- Saunders Piping Solutions
13,414
-
Balance at end of financial year
17,392
3,978
Goodwill acquired through business combinations is allocated to the lowest level within the entity at which the goodwill is
monitored, being the grouped cash generating unit (CGU) comprising the Engineering, Construction, Piping and Automation
operations of Saunders. Refer to Note 21 for details of the acquisition of the Piping Solutions business, effective from 31 October
2023, and detailed calculation of goodwill recognised in relation to the acquisition.
The key assumptions used in the value in use calculations include the financial budget for the 2025 financial year, revenue
growth, EBITDA margin growth, depreciation growth, capital expenditure growth and the discount rate. These assumptions are
based on past experience and the Company’s forecast operating and financial performance of the CGU taking into account
current market and economic conditions, risks, uncertainties and opportunities for improvement.
The value in use calculations use cash flow projections over a 5 year period, extrapolated into perpetuity using a long-term
growth rate. The cash flow projects in Year 1 are based on financial budgets for the 2025 financial year, as approved by the
Board. The cash flow projections for years 2-5 assume a growth rate of 10.0% p.a. The terminal growth rate into perpetuity is
assumed to be 2.5%, which is consistent with the mid-point of long term inflation forecasts by recognised bodies. A weighted
average cost of capital of 12.5% has been used in determining the present value of future cash flows for the CGU.
The Group has conducted sensitivity analysis taking into consideration the current uncertain macro-economic conditions, which
indicated that no reasonably possible change in key assumptions, including changes to the weighted average cost of capital
and changes to the growth rate, would result in an impairment loss. Accordingly, the Group has concluded that no impairment is
required based on current market and economic conditions and expected future performance.
21. ACQUISITION OF SUBSIDIARIES
Automation Pty Limited (now known as Saunders Automation Pty Limited 'SNA')
Saunders announced the acquisition of SNA, effective 1 April 2023. Under the terms of the Share Purchase Agreement (SPA),
100% of the issued share capital and control of SNA was effectively acquired on 1 April 2023. SNA is a specialist automation and
control systems engineering business operating in the energy, water, defence and mining industries. 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).
Saunders Piping Solutions Pty Limited
Saunders announced the acquisition of the Piping Solutions business on 8 November 2023. Under the terms of the Business
Purchase Deed, control of the business was effectively acquired on 31 October 2023. Piping Solutions specialise in the
fabrication, installation and maintenance of steel pipelines, structures, pressure vessels, and refuelling systems for the Defence,
Aviation, Energy and Infrastructure industries. The acquisition qualifies as a business as defined in AASB3 Business Combinations.
It was acquired to facilitate Saunders strategic expansion into the Defence sector and addition of complementary capabilities
across complex steel piping fabrication, installation and maintenance. This will provide a more attractive vertically integrated
offering and enable better penetration into New Energy markets. The amounts recognised in respect of the identifiable assets
acquired and liabilities assumed are set out in the table below.
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
85
Financial Report (cont.)
21. ACQUISITION OF SUBSIDIARIES (CONT.)
Saunders Piping Solutions Pty Limited (cont.)
2024
$’000
Inventory
251
Trade and other receivables
2,256
Property, plant and equipment
4,818
Right of use assets
6,174
Deferred tax asset
207
Trade and other payables
(2,256)
Employee benefits provisions
(690)
Other interest-bearing liabilities
(6,174)
Total identified assets acquired and liabilities assumed
4,586
Goodwill
13,414
Total Consideration
18,000
Satisfied by:
Cash
4,500
Equity comprising ordinary shares in Saunders International Limited
6,500
Contingent consideration¹
- To be settled in cash
3,500
- To be settled in equity
3,500
Total consideration transferred
18,000
Net cash outflow arising on acquisition:
Cash consideration
4,500
Less: cash and cash equivalent balances acquired
-
Net cash outflow arising on acquisition during the year ended 30 June 2024
4,500
1 The contingent consideration is subject to achievement of earn-out Earnings Before Interest & Tax (EBIT) targets that apply for the period from 1 November 2023 to
31 October 2024. It will be settled in cash (50%) and equity (50%). The acquisition is structured to promote the continued performance of Piping Solutions.
Current other financial liabilities
In the prior financial year, Saunders announced the SNA acquisition included an element of deferred cash payments, based on
the earn-out consideration conditions within the Share Purchase Agreement. In the current financial year, SNA achieved the
required earn-out consideration conditions for the year ending 30 June 2024. As a result, Saunders recognised the maximum
final instalment payable of $1.10 million within the Consolidated Statement of Profit or Loss and as an Other Financial Liability
within the Consolidated Financial Position. In early August 2024, SNA’s former owners received the deferred payments in
cash ($0.825 million) and equity ($0.275 million which converted to 326,046 Saunders shares (ASX code: SND) issued on
1 August 2024).
Current other financial liabilities recognised in the Consolidated Statement of
Financial Position relating to acquisition of subsidiaries:
2024
$
2023
$
Saunders Piping Solutions Pty Ltd
7,000
-
Saunders Automation Pty Ltd
1,100
-
Total current other financial liabilities
8,100
-
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
86
Financial Report (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
2024
$
2023
$
Short-term employee benefits
1,886,532
1,794,800
Post-employment benefits
85,592
83,997
Share-based payments
448,856
156,117
Total remuneration of directors and key management personnel
2,420,980
2,034,914
The names of and positions held by the key management are set out in the Remuneration Report on page 43. 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 43.
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
Name of Subsidiary
Principal activity
Place of
incorporation
and operation
2024
2023
Saunders Civilbuild Pty Ltd
Bridge construction and maintenance
Australia
100%
100%
Saunders Property (NSW) Pty Ltd
Real property investments
Australia
100%
100%
Saunders Asset Services Pty Ltd
Maintenance
Australia
100%
100%
Saunders PNG Limited
Tank construction and maintenance
PNG
100%
100%
Saunders PlantWeave Pty Ltd
Industrial automation and electrical
Australia
100%
100%
Saunders International (NZ) Ltd
Tank construction and maintenance
New Zealand
100%¹
100%¹
Saunders Automation Pty Ltd
Industrial automation and electrical
Australia
100%2
100%2
Saunders Piping Solutions Pty Ltd
Structural, Mechanical, Piping (SMP)
Australia
100%3
-
1 Saunders International (NZ) Ltd was incorporated on 1 June 2023.
2 Saunders acquired Automation IT Pty Ltd with effect from 1 April 2023.
3 Saunders acquired the Piping Solutions business and formed Saunders Piping Solutions Pty Ltd with effect from 31 October 2023.
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
87
Financial Report (cont.)
Financial Report (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
2024
$’000
2023
$’000
Assets
Current assets
42,049
53,122
Non-current assets
33,969
25,655
Total assets
76,018
78,777
Liabilities
Current liabilities
23,539
37,251
Non-current liabilities
4,204
1,291
Total liabilities
27,743
38,542
Total Net Assets
48,275
40,235
Equity
Issued capital
30,918
24,104
Shares buy-back reserve under employee share plan
(1,230)
(1,475)
Share based payments reserve
799
572
Retained earnings
17,788
17,034
Total equity
48,275
40,235
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Financial Report (cont)
Annual Report 2024
88
24. PARENT ENTITY INFORMATION (CONT.)
Financial Performance
2024
$’000
2023
$’000
Profit for the year
5,350
10,845
Other comprehensive income
-
-
Total comprehensive income
5,350
10,845
The parent entity has no capital commitments.
25. REMUNERATION OF AUDITOR
2024
$
2023
$
Audit or review of the financial report
444,401
317,507
Other services 2
62,397
-
Total Auditor’s remuneration
506,798
317,507
1 The auditor of Saunders International Limited is Deloitte Touche Tohmatsu.
2 Other services provided relate to Saunders PNG Limited and included taxation, financial statement preparation and annual return lodgement.
26. SUBSEQUENT EVENTS
On 5 August 2024, Saunders secured the CIL3 Tanks Replacement project at Kalgoorlie Consolidated Gold Mines, awarded by
Northern Star Resources at a contract value of $31.5 million. The project will contribute to revenue and earnings in FY25 through
to FY27.
On 7 August 2024, Saunders secured four contracts in the civil infrastructure sector, totalling $20.59 million. Each of the four
projects includes the demolition of an existing bridge as well as the design and construction of a new concrete bridge structure.
These projects will contribute to Saunders revenue and earnings in FY25 and FY26.
Other than the dividends described in Note 15 of the Consolidated Financial Report on page 80, 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
(a) 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
Principal place of business
Suite 101, Level 1, 3 Rider Boulevard
Rhodes NSW 2138
Tel: (02) 9792 2444
Suite 101, Level 1, 3 Rider Boulevard
Rhodes NSW 2138
Tel: (02) 9792 2444
NOTES TO THE FINANCIAL STATEMENTS (cont.)
Annual Report 2024
89
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
Body Corporates
Tax Residency
Name of Subsidiary
Principal Activity
Entity
Type
Place of
Incorporation
and Operation
% of Share
Capital
Held
Australian
or Foreign4
Foreign
Jurisdiction
Saunders International
Limited
Holding Company,
construction and
maintenance
Body
Corporate
Australia
N/A
Australian
N/A
Saunders Civilbuild Pty Ltd
Bridge construction and
maintenance
Body
Corporate
Australia
100%
Australian
N/A
Saunders Property (NSW)
Pty Ltd
Real property
investments
Body
Corporate
Australia
100%
Australian
N/A
Saunders Asset Services
Pty Ltd
Maintenance
Body
Corporate
Australia
100%
Australian
N/A
Saunders PNG Limited
Tank construction and
maintenance
Body
Corporate
PNG
100%
Foreign
PNG
Saunders PlantWeave Pty
Ltd
Industrial Automation
and Electrical
Body
Corporate
Australia
100%
Australian
N/A
Saunders International (NZ)
Ltd
Tank construction and
maintenance
Body
Corporate
New Zealand
100%¹
Foreign
NZ
Saunders Automation Pty
Ltd (formerly Automation IT
Pty Ltd)
Industrial Automation
and Electrical
Body
Corporate
Australia
100%2
Australian
N/A
Saunders Piping Solutions
Pty Limited
Structural, mechanical,
piping (SMP)
Body
Corporate
Australia
100%3
Australian
N/A
1 Saunders International (NZ) Ltd was incorporated on 1 June 2023.
2 Saunders acquired Saunders Automation Pty Ltd (formerly Automation IT Pty Ltd) with effect from 1 April 2023.
3 Saunders acquired the Piping Solutions business and formed Saunders Piping Solutions Pty Limited with effect from 31 October 2023.
4 All 100% Australian owned subsidiary companies of Saunders International Limited are part of a tax-consolidated group under Australian tax law, for which Saunders
International Limited is the head entity.
Financial Report (cont)
Annual Report 2024
90
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
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:
The Board has adopted the following
Charters, Policies and Codes:
www.saundersint.com/investors/
corporate-governance/
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.
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.
Corporate
Governance
Annual Report 2024
90
Annual Report 2024
91
Financial Report (cont.)
Annual Report 2024
91
Annual Report 2024
92
ORDINARY SHARE CAPITAL
At 30 June 2024, there are 116,821,531 fully paid ordinary shares held by 627 individual shareholders. In addition, there are
1,466,492 shares issued to employees under the Employee Share Purchase Plan (ESPP) and 6,762,704 shares that are subject to
voluntary escrow for 12 months until 21 December 2024. These ESPP shares and voluntary escrow shares are not included for the
purpose of calculating the totals and percentages used in this section.
SUBSTANTIAL SHAREHOLDERS
Substantial shareholders
NO. OF SHARES
PERCENTAGE
NAOS Asset Management
26,431,554
24.57%
Mr Desmond Bryant
24,316,811
22.09%
Anacacia Pty Ltd (Wattle Fund)
12,369,453
11.24%
Mr Timothy Burnett
11,069,595
10.06%
Distribution of shares
1 to 1,000
115
1,001 to 5,000
148
5,001 to 10,000
92
10,001 to 100,000
219
100,001 and Over
53
Total 1
627
1 82 shareholders have less than a marketable parcel (minimum $500.00), representing a total of 15,921 shares.
Twenty largest registered holders name
NO. OF SHARES
PERCENTAGE
JP Morgan Australia Nominees Pty Limited
28,309,505
25.72%
Mr Desmond Bryant
13,322,343
12.10%
Anacacia Pty Ltd
12,369,453
11.24%
Debry Pty Ltd
8,677,667
7.88%
Tivolico Pty Ltd
6,262,271
5.69%
Marlot Pty Ltd
4,807,324
4.37%
Mr John Power
3,401,453
3.09%
Benson Family Holdings P/L
3,358,303
3.05%
Effjay Holdings Pty Limited
2,316,801
2.11%
R&B Invest Pty Ltd
1,700,000
1.54%
Pacbay Pty Ltd
1,699,289
1.54%
Citicorp Nominees Pty Limited
1,485,507
1.35%
HSBC Custody Nominees (Australia) Limited
1,471,104
1.34%
Sagimo Holdings Pty Ltd
1,301,208
1.18%
Mrs Karyn May McClelland
1,229,012
1.12%
Donald Cant Pty Ltd
1,057,931
0.96%
Julie-Ann Bladon
831,932
0.76%
Parmelia Pty Ltd
755,969
0.69%
Mr Robert Graburn Patterson
553,530
0.50%
Anthony Robert Templeton
499,159
0.45%
Total
95,409,761
86.69%
Shareholder
Information
Annual Report 2024
93
Board of Directors
Information and Profiles
Nicholas Yates
Chair
Nicholas 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 Chair
of ASX-listed BSA Limited.
Nicholas 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 Chair on 1 July 2023.
Mark Benson
Managing Director and Chief
Executive Officer
With an executive career spanning over 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.
Greg Fletcher
Non-Executive Director
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 Chair of the HealthShare Audit & Risk
Committee. Additionally, he is a member of the NSW Police
Force, Western Sydney Local Health District and the NSW
Health Infrastructure Audit & Risk Committees.
Greg has been a Director on the Saunders Board since July
2015 and is Chair of the Audit and Risk Committee
and member of the Remuneration Committee.
Brendan York
Non-Executive Director
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 20 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), MaxiParts
Limited (MXI) 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.
Annual Report 2024
94
Annual Report 2024
94
Corporate
Directory
BOARD OF DIRECTORS
Nicholas Yates
Chair
Mark Benson
Managing Director and Chief Executive Officer
Greg Fletcher
Non-Executive Director
Brendan York
Non-Executive Director
AUDITORS
Deloitte Touche Tohmatsu
8 Parramatta Square
Level 37, 10 Darcy 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
Australian Securities Exchange
20 Bridge St
Sydney NSW 2000
WEBSITE
www.saundersint.com
Annual Report 2024
95
For the Financial Year ended 30 June 2024
ABN 14 050 287 431
Saundersint.com
@saunders-international-limited
Saunders International Limited