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Railcare Group ABN 21 080 415 407
ABN 21 080 415 407
ABN 21 080 415 407
Traffic Technologies Ltd.
Traffic Technologies Ltd.
Traffic Technologies Ltd.
address. 31 Brisbane Street, Eltham Victoria 3095 Australia
address. 31 Brisbane Street, Eltham Victoria 3095 Australia
address. 31 Brisbane Street, Eltham Victoria 3095 Australia
PO Box 828, Eltham Victoria 3095 Australia
PO Box 828, Eltham Victoria 3095 Australia
PO Box 828, Eltham Victoria 3095 Australia
phone. + 61 3 9430 0222 facsimile. + 61 3 9430 0244
phone. + 61 3 9430 0222 facsimile. + 61 3 9430 0244
phone. + 61 3 9430 0222 facsimile. + 61 3 9430 0244
web. www.trafficltd.com.au
web. www.trafficltd.com.au
web. www.trafficltd.com.au
Traffic Technologies Ltd and Controlled Entities
Traffic Technologies Ltd and Controlled Entities
Traffic Technologies Ltd and Controlled Entities
Chairman’s Letter
Chairman’s Letter
Chairman’s Letter
Dear Shareholder,
Dear Shareholder,
Dear Shareholder,
I have pleasure in enclosing the Annual Report for Traffic Technologies Ltd for the year ended 30 June 2011.
I have pleasure in enclosing the Annual Report for Traffic Technologies Ltd for the year ended 30 June 2011.
I have pleasure in enclosing the Annual Report for Traffic Technologies Ltd for the year ended 30 June 2011.
The past year has again been challenging for the Company and its shareholders and it is disappointing that a number
The past year has again been challenging for the Company and its shareholders and it is disappointing that a number
The past year has again been challenging for the Company and its shareholders and it is disappointing that a number
of achievements by the Company have not so far been reflected in its share price.
of achievements by the Company have not so far been reflected in its share price.
of achievements by the Company have not so far been reflected in its share price.
I am pleased to report that earnings have improved significantly with a further improvement in profitability and
I am pleased to report that earnings have improved significantly with a further improvement in profitability and
I am pleased to report that earnings have improved significantly with a further improvement in profitability and
reduction in costs and that the Group has achieved a positive net profit after tax. The Group achieved a significant
reduction in costs and that the Group has achieved a positive net profit after tax. The Group achieved a significant
reduction in costs and that the Group has achieved a positive net profit after tax. The Group achieved a significant
improvement in its operating result for the financial year ended 30 June 2011 compared to the previous financial year
improvement in its operating result for the financial year ended 30 June 2011 compared to the previous financial year
improvement in its operating result for the financial year ended 30 June 2011 compared to the previous financial year
with EBITDA before non-recurring items, increasing by 35% to $6.1m. Revenue from continuing operations for the
with EBITDA before non-recurring items, increasing by 35% to $6.1m. Revenue from continuing operations for the
with EBITDA before non-recurring items, increasing by 35% to $6.1m. Revenue from continuing operations for the
financial year ended 30 June 2011 was $49.7m compared to $47.8m in the previous financial year.
financial year ended 30 June 2011 was $49.7m compared to $47.8m in the previous financial year.
financial year ended 30 June 2011 was $49.7m compared to $47.8m in the previous financial year.
The Traffic Products Division has continued to perform well. During the year the Company was awarded a $13.7
The Traffic Products Division has continued to perform well. During the year the Company was awarded a $13.7
The Traffic Products Division has continued to perform well. During the year the Company was awarded a $13.7
million contract by VicRoads for the replacement of incandescent and hybrid (incandescent and quartz halogen)
million contract by VicRoads for the replacement of incandescent and hybrid (incandescent and quartz halogen)
million contract by VicRoads for the replacement of incandescent and hybrid (incandescent and quartz halogen)
traffic signals, with LED traffic signals at over 700 intersections in Victoria, which is expected to be completed in
traffic signals, with LED traffic signals at over 700 intersections in Victoria, which is expected to be completed in
traffic signals, with LED traffic signals at over 700 intersections in Victoria, which is expected to be completed in
early 2012. The Traffic Products Division provides a significant opportunity for the Group through its dominant
early 2012. The Traffic Products Division provides a significant opportunity for the Group through its dominant
early 2012. The Traffic Products Division provides a significant opportunity for the Group through its dominant
position in the Australian and New Zealand markets for LED traffic signals and has a strategic program to develop
position in the Australian and New Zealand markets for LED traffic signals and has a strategic program to develop
position in the Australian and New Zealand markets for LED traffic signals and has a strategic program to develop
export markets in Europe and Asia. The Traffic Products Division includes the development of products such as
export markets in Europe and Asia. The Traffic Products Division includes the development of products such as
export markets in Europe and Asia. The Traffic Products Division includes the development of products such as
electronic signage and the Clearsonics emergency telephone. Costs have been reduced across the Group which has
electronic signage and the Clearsonics emergency telephone. Costs have been reduced across the Group which has
electronic signage and the Clearsonics emergency telephone. Costs have been reduced across the Group which has
also assisted the improvement in profitability.
also assisted the improvement in profitability.
also assisted the improvement in profitability.
The sale of the Traffic Management business, completed in August 2010, has enabled the Company to reduce debt
The sale of the Traffic Management business, completed in August 2010, has enabled the Company to reduce debt
The sale of the Traffic Management business, completed in August 2010, has enabled the Company to reduce debt
by $15.0m (including $2.5m finance leases). A priority for the Group is to improve shareholder value and to reduce
by $15.0m (including $2.5m finance leases). A priority for the Group is to improve shareholder value and to reduce
by $15.0m (including $2.5m finance leases). A priority for the Group is to improve shareholder value and to reduce
gearing and associated finance costs. The Board and management are continuing to investigate ways in which
gearing and associated finance costs. The Board and management are continuing to investigate ways in which
gearing and associated finance costs. The Board and management are continuing to investigate ways in which
shareholder value can be enhanced and debt reduced.
shareholder value can be enhanced and debt reduced.
shareholder value can be enhanced and debt reduced.
The Group continues to maintain a strong position in the traffic signals market, bolstered by an innovative track
The Group continues to maintain a strong position in the traffic signals market, bolstered by an innovative track
The Group continues to maintain a strong position in the traffic signals market, bolstered by an innovative track
record of developing new products such as electronic signage. The Group is well positioned to take advantage of the
record of developing new products such as electronic signage. The Group is well positioned to take advantage of the
record of developing new products such as electronic signage. The Group is well positioned to take advantage of the
opportunities presented by the Federal and State Government road infrastructure spending programs.
opportunities presented by the Federal and State Government road infrastructure spending programs.
opportunities presented by the Federal and State Government road infrastructure spending programs.
Along with my fellow directors, thank you for your continued support. We look forward to the restoration of
Along with my fellow directors, thank you for your continued support. We look forward to the restoration of
Along with my fellow directors, thank you for your continued support. We look forward to the restoration of
shareholder value in the year ahead.
shareholder value in the year ahead.
shareholder value in the year ahead.
Alan Brown
Alan Brown
Alan Brown
Chairman
Chairman
Chairman
ABN 21 080 415 407
ABN 21 080 415 407
ABN 21 080 415 407
Traffic Technologies Ltd.
Traffic Technologies Ltd.
Traffic Technologies Ltd.
address. 31 Brisbane Street, Eltham Victoria 3095 Australia
address. 31 Brisbane Street, Eltham Victoria 3095 Australia
address. 31 Brisbane Street, Eltham Victoria 3095 Australia
PO Box 828, Eltham Victoria 3095 Australia
PO Box 828, Eltham Victoria 3095 Australia
PO Box 828, Eltham Victoria 3095 Australia
phone. + 61 3 9430 0222 facsimile. + 61 3 9430 0244
phone. + 61 3 9430 0222 facsimile. + 61 3 9430 0244
phone. + 61 3 9430 0222 facsimile. + 61 3 9430 0244
web. www.trafficltd.com.au
web. www.trafficltd.com.au
web. www.trafficltd.com.au
Traffic Technologies Ltd and Controlled Entities
Traffic Technologies Ltd and Controlled Entities
Traffic Technologies Ltd and Controlled Entities
Managing Directors’ Report
Managing Directors’ Report
Managing Directors’ Report
Dear Shareholder,
Dear Shareholder,
Dear Shareholder,
The 2011 financial year has seen a major milestone achieved by the Company with a significant improvement in
The 2011 financial year has seen a major milestone achieved by the Company with a significant improvement in
The 2011 financial year has seen a major milestone achieved by the Company with a significant improvement in
profitability. The results for the financial year reflect the ongoing commitment by management in remaining focused
profitability. The results for the financial year reflect the ongoing commitment by management in remaining focused
profitability. The results for the financial year reflect the ongoing commitment by management in remaining focused
on operational efficiencies along with the continued drive for new markets and the accelerated research and
on operational efficiencies along with the continued drive for new markets and the accelerated research and
on operational efficiencies along with the continued drive for new markets and the accelerated research and
development programs in order to provide “greener” and more efficient products.
development programs in order to provide “greener” and more efficient products.
development programs in order to provide “greener” and more efficient products.
The Group achieved revenues from continuing operations of $49.7 million and EBITDA of $6.1 million before non-
The Group achieved revenues from continuing operations of $49.7 million and EBITDA of $6.1 million before non-
The Group achieved revenues from continuing operations of $49.7 million and EBITDA of $6.1 million before non-
recurring items in the 2011 financial year. This represents an increase of 4% in revenue and a major increase of 35%
recurring items in the 2011 financial year. This represents an increase of 4% in revenue and a major increase of 35%
recurring items in the 2011 financial year. This represents an increase of 4% in revenue and a major increase of 35%
in EBITDA from continuing operations before non-recurring items compared to the previous financial year.
in EBITDA from continuing operations before non-recurring items compared to the previous financial year.
in EBITDA from continuing operations before non-recurring items compared to the previous financial year.
Of major note has been the significant increase of more than 300% improvement in net profit after tax over the 2010
Of major note has been the significant increase of more than 300% improvement in net profit after tax over the 2010
Of major note has been the significant increase of more than 300% improvement in net profit after tax over the 2010
financial year. The performance over the past four financial years is illustrated in the graph below which clearly
financial year. The performance over the past four financial years is illustrated in the graph below which clearly
financial year. The performance over the past four financial years is illustrated in the graph below which clearly
indicates the results from the profit improvement program put in place in 2007.
indicates the results from the profit improvement program put in place in 2007.
indicates the results from the profit improvement program put in place in 2007.
Net Profit after tax
Net Profit after tax
2008
2009
2010
2011
Financial Year
)
0
0
0
$
(
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x
a
t
r
e
t
f
a
)
s
s
o
L
(
/
t
i
f
o
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P
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e
N
$2,000
$0
-$2,000
-$4,000
-$6,000
-$8,000
-$10,000
-$12,000
-$14,000
-$16,000
-$18,000
Review of Operations
Review of Operations
Review of Operations
Traffic Products
Traffic Products
Traffic Products
The Traffic Products Division has continued to deliver upon expectations and remains the dominant supplier of LED
The Traffic Products Division has continued to deliver upon expectations and remains the dominant supplier of LED
The Traffic Products Division has continued to deliver upon expectations and remains the dominant supplier of LED
traffic signals throughout the Australian and New Zealand markets with a 5% increase in revenue and EBITDA
traffic signals throughout the Australian and New Zealand markets with a 5% increase in revenue and EBITDA
traffic signals throughout the Australian and New Zealand markets with a 5% increase in revenue and EBITDA
before non-recurring items. Even with an appreciating currency, the Group has continued to develop its export
before non-recurring items. Even with an appreciating currency, the Group has continued to develop its export
before non-recurring items. Even with an appreciating currency, the Group has continued to develop its export
program to various countries including Europe and Asia.
The Company has also accelerated its research and
program to various countries including Europe and Asia.
The Company has also accelerated its research and
program to various countries including Europe and Asia.
The Company has also accelerated its research and
development programs in order to deliver more efficient and innovative products to the ever growing Intelligent
development programs in order to deliver more efficient and innovative products to the ever growing Intelligent
development programs in order to deliver more efficient and innovative products to the ever growing Intelligent
Transport Systems (“ITS”) industry. Key products developed include the 240/42 volt LED Traffic Signal and
Electronic Speed Limit Signs for the Australian and New Zealand markets and the 230/48 volt LED Traffic Signal
and LED pedestrian countdown timers for the UK market.
During the financial year the Company was awarded a $13.7 million contract by VicRoads for the replacement of
incandescent and hybrid (incandescent and quartz halogen) traffic signals with LED traffic signals at over 750
intersections in Victoria, which is expected to be completed in early 2012. In addition the Company was successful
in securing the supply and installation of 60 off traffic signal controllers which is consistent with the Group’s
strategy of delivering “ITS” to road authorities.
The Group plans to expand its business in the ITS sector, which incorporates the deployment of technology to
improve the safety, access, mobility and environmental performance of the road system and represents a significant
opportunity for the Group.
The Signage business has continued to face strong competition in the financial year. However, a continued focus on
cost control, factory efficiency and, along with the expansion of Northern Territory and Queensland operations and
the consolidation of South Australia and New South Wales, has led to improved profitability in the 2011 financial
year.
Traffic Services
The Traffic Services Division now comprises the Group’s Traffic Hire business, which includes the hire of
temporary steel barrier and portable roadside technology such as arrow boards and variable message signs. Traffic
Hire has continued to trade profitably although, with the sale of the Traffic Management business in 2010, there has
been less “cross-hire” business where equipment was on-hired to Traffic Management.
In August 2010 the Group completed the sale of its Traffic Management business, which previously formed part of
the Traffic Services Division. The results of the Traffic Management business have been presented as “discontinued
operations” in the Financial Report.
Outlook
As the leading provider of innovative technical products and services to the industry, Traffic Technologies is well
positioned to benefit from opportunities presented by Federal and State government spending on road infrastructure
projects, along with the growing and expanding export opportunities.
The Group plans to continue to build on the success of the Traffic Products Division and in particular the lucrative
road lighting market and to take advantage of the opportunities presented by Road Authorities in the Intelligent
Transport Systems sector.
With an extremely professional and experienced management team and the benefit of cost reductions and efficiency
improvements in the last four years, the Group will continue to roll out its strategy and position itself for solid
earnings in a demanding industry in the coming years.
Con Liosatos
Managing Director
Corporate Information
This annual report covers both Traffic Technologies Ltd (ABN 21 080 415 407) and its subsidiaries. The Group’s
functional and presentation currency is AUD ($).
A description of the Group’s operations and of its principal activities is included in the review of operations and
activities in the Directors’ Report.
Directors
Mr. Alan Brown
Mr. Con Liosatos
Mr. Ray Horsburgh
Mr. Ken Jarrett
(resigned 27 June 2011)
Company Secretary & Chief Financial Officer
Mr. Peter Crafter
Registered Office & Principal Place of Business
Traffic Technologies Ltd
31 Brisbane Street
Eltham VIC 3095
Share Register
Computershare Investor Services Pty Limited
Yarra Falls, 452 Johnson Street
Abbotsford VIC 3067
Tel: 1300 787 272
Traffic Technologies Ltd shares are listed on the Australian Securities Exchange (stock code: “TTI”).
Lawyers
Middletons
Level 25
525 Collins Street
Melbourne VIC 3000
Bankers
Westpac
Level 10
360 Collins Street
Melbourne VIC 3000
Auditors
BDO Audit (NSW-VIC) Pty Ltd
The Rialto
525 Collins Street
Melbourne VIC 3000
Traffic Technologies Ltd and Controlled Entities
Financial Report for the year ended 30 June 2011
Contents
Directors’ Report
Auditor’s Independence Declaration
Corporate Governance Statement
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Audit Report
ASX Additional Information
Page No.
1
15
16
24
25
26
27
28
95
96
98
Traffic Technologies Ltd
Directors’ Report
Your directors submit their report for the year ended 30 June 2011.
Directors
The names and details of the Company’s Directors in office during the financial year and until the date of this report
are as follows. Directors were in office for the entire period unless otherwise stated.
Name
Qualifications, Experience and Special Responsibilities
Mr. Alan J Brown
FAICD
(Age 65) Non-Executive Chairman Appointed January 2004.
Mr. Constantinos L
Liosatos
MAICD
Mr. Raymond K
Horsburgh AM
B.Eng (Chem.)
FAICD
(Hon D Univ)
FIEAust
Mr. Brown has extensive experience in both the private and public sectors. He is a Director
of a range of private companies and has established several over a thirty-year period. He was
a Member of the Victorian Parliament from 1979-97 and is a former Leader of the Victorian
Liberal Party. As Minister for Transport he implemented major reforms to Victoria’s
transport infrastructure. He was Agent General for Victoria in London from 1997-2000. He
is Chairman of Apprenticeships Plus and Bass Coast Community Foundation. He is also
Chairman of Tasmanian Company Work & Training Limited. Mr. Brown was appointed a
non-executive Director of Traffic Technologies Ltd in January 2004 and was appointed
Chairman in October 2010. Mr. Brown is Chairman of the Company, Chairman of the
Nomination & Remuneration and Corporate Governance committees and a member of the
Audit & Risk committee. Mr. Brown has not served as a Director of any other listed
companies during the three years prior to June 2010.
(Age 49) Managing Director. Appointed April 2003.
Mr. Liosatos has over 20 years experience in the construction industry and 12 years
experience in the traffic industry. Mr. Liosatos has qualifications in Mechanical Design and
Lighting Engineering. Mr. Liosatos is the Managing Director of Traffic Technologies Ltd.
Mr. Liosatos was appointed as a Director of Traffic Technologies Ltd in April 2003. Mr
Liosatos is a member of the Corporate Governance committee. Mr. Liosatos has not served
as a Director of any other listed companies during the three years prior to June 2011.
(Age 68) Non-Executive Director. Appointed November 2006.
Mr. Horsburgh held various positions with Australian Consolidated Industries from 1963 to
1994 including the position of Chief Executive Officer of ACI Glass which he held from
1991 to 1994. In 1994 he was appointed Chief Executive Officer of Smorgon Steel Group
Limited and was Group Managing Director and Chief Executive Officer until 2007. He is a
former Director of the Business Council of Australia, ANI Limited, Email Limited,
Metalcorp Limited and a former President of Williamstown Rotary Club. He is currently
Chairman of Toll Holdings Limited, a Director of the Essendon Football Club, a Non
Executive Director of CSR Limited and National Can Industries Limited. Mr. Horsburgh
was awarded an Order of Australia on Australia Day 2006 for Service to the Steel Industry
and Service to Disadvantaged Youth. He was appointed to the Board of Traffic
Technologies Ltd in November 2006 and was Chairman from 2007 to 2010. Mr. Horsburgh
is Chairman of the Audit & Risk Committee and is a member of the Nomination &
Remuneration and Corporate Governance committees. Mr. Horsburgh has also served as a
director and remains a director of the following listed companies during the last three years:
CSR Limited, Toll Holdings Limited and National Can Industries Limited.
1
Traffic Technologies Ltd
Directors’ Report (Continued)
Name
Qualifications, Experience and Special Responsibilities
Company
Secretary
Mr. Peter K Crafter
LL.B (Hons), MBA,
FCA, CA, MCT,
FAICD, FCIS
(Age 54) Company Secretary and Chief Financial Officer. Appointed Company Secretary
March 2004; appointed Chief Financial Officer October 2007.
Mr. Crafter is a Chartered Accountant in both Australia and the UK and qualified
Corporate Treasurer with extensive experience in financial management including several
years with KPMG and Touche Ross in the United Kingdom. He holds an honours degree
in Law from the University of London and an MBA from Heriot-Watt University,
Scotland. He was Chief Financial Officer of ASX-listed Software Communication Group
Limited from 1999 to 2002 and was Acting Chief Executive Officer of that Company from
2001 to 2002. He was Chief Financial Officer of ASX-listed CBD Energy Limited from
2002 to 2003. He was Company Secretary of ASX-listed The Swish Group Limited from
2003 to 2009. He was appointed Chief Financial Officer and Company Secretary of
Traffic Technologies Ltd in March 2004 and retired as Chief Financial Officer in February
2006. He was reappointed Chief Financial Officer of Traffic Technologies Ltd in October
2007.
The following director also served on the Company’s Board during the year and resigned on 27 June 2011:
Mr. Ken Jarrett
Interests in the share and options of the Company and related bodies corporate
As at the date of this report, the interests of the Directors in the shares and options of Traffic Technologies Ltd were:
Director
Mr. Alan Brown
Mr. Con Liosatos
Mr. Ray Horsburgh
Dividends
Number
Preference
Shares
-
-
-
Ordinary
Shares
2,856,965
10,129,377
328,400
Options over
Ordinary Shares
-
-
-
The Directors do not recommend the payment of a dividend for the financial year ended 30 June 2011 (2010: $Nil).
2
Traffic Technologies Ltd
Directors’ Report (Continued)
PRINCIPAL ACTIVITIES
In its goal of providing a suite of traffic products and traffic services to the traffic industry, the Group operates through
its Traffic Products and Traffic Services divisions.
The Traffic Products division specialises in the design, manufacture and installation of traffic signals, emergency
telephones and portable roadside technology and provides a wide range of directional and regulatory traffic signs and
traffic control products to road traffic authorities, municipal councils and construction companies.
Traffic Services provides equipment hire (barrier guard and portable roadside technology) services to road traffic
authorities and construction companies.
The Group completed the sale of its labour hire (traffic controllers) business on 9 August 2010.
OPERATING AND FINANCIAL REVIEW
The following table summarises the Group’s results for the financial years ended 30 June 2011 and 2010.
Year Ended 30 June ($’m)
Sales revenue from continuing operations
EBITDA from continuing operations before non-
recurring items from continuing operations
Non-recurring items
Depreciation and amortisation expenses
Finance costs
Income tax benefit/(expense)
Discontinued operations
Net profit/(loss)
2011
49.7
6.1
(0.9)
(2.1)
(3.8)
0.7
0.6
0.6
2010 #
47.8
4.5
(1.0)
(2.2)
(4.1)
(0.2)
2.7
(0.3)
# - Comparative figures have been restated – refer note 1 to the financial statements
The Group’s results for the 2011 financial year reflect an improvement in trading conditions in which the Group
operates and improved profitability resulting from management’s continued focus on cost control and operating
efficiencies.
In August 2010 the Group completed the sale of its Traffic Management business. Net cash consideration for the sale
was $11.4m. The net proceeds of the sale, which included the collection of net debtors, have been applied in reducing
net debt by $15m (including $2.5m finance leases). The results of the Traffic Management business have been
presented as discontinued operations in the Annual Financial Report.
Comments on the Group’s results are set out below.
Segmental Performance
The following table summarises revenue and EBITDA from continuing operations before non-recurring items for the
Group’s business segments for the financial years ended 30 June 2011 and 2010 and excludes the results of the Traffic
Management business which have been classified as “discontinued operations”.
3
Traffic Technologies Ltd
Directors’ Report (Continued)
Earnings before interest, income tax, depreciation, amortisation expenses and non-recurring items (“EBITDA before
non-recurring items”) reflects the results from continuing, recurring operational performance. This is believed to be a
relevant and useful financial measure used by management to measure the Group’s ongoing performance.
Traffic Products
Traffic Services
Other
Total Group
Revenue $m
EBITDA^ $m
2011
48.4
1.8
(0.5)
49.7
2010
46.1
3.4
(1.7)
47.8
2011
7.6
0.7
(2.2)
6.1
2010 #
7.2
1.1
(3.8)
4.5
^ - EBITDA is before non-recurring items
# - Comparative figures have been restated – refer note 1 to the financial statements
Traffic Products
Traffic Products EBITDA increased from $7.2m to $7.6m. Sales of traffic signals continue to be strong and the
Company continues to maintain a dominant position in the traffic signals market. During the financial year the
Company was awarded a $13.7 million contract by VicRoads for the replacement of incandescent and hybrid
(incandescent and quartz halogen) traffic signals, with LED traffic signals at over 700 intersections in Victoria, which
is expected to be completed in early 2012. The signage business has continued to face strong competition.
Traffic Services
Traffic Services comprises the Group’s equipment hire business, including the hire of temporary steel barrier and
portable roadside technology such as arrow boards and variable message signs. EBITDA decreased from $1.1m to
$0.7m. With the sale of the Traffic Management business in 2010, there has been less “cross-hire” business where
equipment was on-hired to the Traffic Management business.
Corporate
Corporate costs reduced from $3.8m to $2.2m, reflecting cost savings made during the year.
Non-recurring Items
During the 2011 financial year, the Group incurred $0.9m expenditure on items of a non-recurring nature (2010:
$1.0m). These costs included $0.5m incurred in connection with a legal dispute which has now been settled, further
details of which are provided in note 3 to the financial statements.
Finance costs
Finance costs reduced from $4.1m to $3.8m, as a result of the reduction of debt during the financial year following the
sale of the Traffic Management business.
Discontinued operations
The results of Traffic Management have been presented as “discontinued operations” in the Annual Financial Report.
Financial position
Net assets of $18.6m at 30 June 2011 (2010: $18.1m) include intangible assets of $34.4m and net debt of $27.6m.
During the financial year the net proceeds of the Traffic Management sale were applied in reducing net debt by $15m
(including $2.5m of finance leases). The Group’s term debt facility reduced from $34.0m to $24.0m at 30 June 2011
and the working capital facility from $12.0m to $8.6m at 30 June 2011.
4
Traffic Technologies Ltd
Directors’ Report (Continued)
Risk Management
The Group takes a proactive approach to risk management. The Board is responsible for ensuring that risks, and also
opportunities, are identified on a timely basis and that the Group’s objectives and activities are aligned with the risks
and opportunities identified by the Board.
The Group believes that it is crucial for all Board members to be a part of this process and, as such, the Board has not
established a separate risk management committee. Instead sub-committees are convened as appropriate in response to
issues and risks identified by the Board as a whole and the sub-committee further examines the issues and reports back
to the Board.
The Board has a number of mechanisms in place to ensure that management’s objectives and activities are aligned with
the risks identified by the Board. These include the following:
Board approval of a strategic plan, which encompasses the Group’s vision, mission and strategy statements,
designed to meet stakeholder’s needs and manage business risk;
Implementation of Board approved business plans and budgets and Board monitoring of progress against
those budgets, including the establishment and monitoring of KPIs of both a financial and non-financial
nature; and
The establishment of sub-committees to report on and monitor specific business risks.
Statement of Compliance
This operating and financial review is based on the guidelines in The Group of 100 Incorporated publication Guide to
the Review of Operations and Financial Condition.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There have been no significant changes in the nature of these activities during the year.
SIGNIFICANT AFTER BALANCE DATE EVENTS
Subsequent to balance date there have been no significant events which have affected the operations of the Group.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
For the financial year ending 30 June 2012 the Group will continue to pursue the goals identified in its strategic plan.
Potential strategic acquisitions will be investigated in order to augment and strengthen the Group’s portfolio of
products and services together with pursuing continual development of the existing businesses to drive organic growth
and further efficiency gains. One of the key priorities for the Group in the year ahead is to reduce gearing and the
associated finance costs. With this in mind, the Board and management have been investigating ways in which debt
can be further reduced. This may involve further cost savings and the restructure of non-core parts of the business.
With the continued uncertainty in the world economy, the Group remains cautious about the economic outlook and
accordingly is not yet in a position to give earnings guidance for the financial year ending 30 June 2012.
5
Traffic Technologies Ltd
Directors’ Report (Continued)
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Traffic Products segment is regulated by the Environmental Protection Act 1970 (8056/1970) and the
Occupational Safety Regulations 2009 (54/2009) with regard to waste water run-off and the storage and treatment of
chemicals. These operations are regularly audited by an independent environmental consultancy that reports directly to
the Environmental Protection Authority.
There have been no significant known breaches of the Group’s compliance with environmental regulations.
Other Group operations are not regulated by any significant environmental regulation under a law of the
Commonwealth or of a State or Territory.
SHARE OPTIONS
Unissued Shares
As at the date of this report, there were nil unissued ordinary shares under option (nil at the reporting date). Refer to
note 17 of the financial statements for further details of options.
Option holders do not have any right, by virtue of their yet to be exercised options, to participate in any share issue of
the Company or any related body corporate or in the interest issue of any other registered scheme.
Shares Issued as a Result of the Exercise of Options
During the year, there were no options to acquire fully paid ordinary shares exercised by Directors, executives or
employees. Since the end of the financial year, no Directors, executives or employees have exercised options.
INDEMNIFICATION AND INSURANCE OF DIRECTORS, OFFICERS AND AUDITORS
During the financial year ended 30 June 2011, the Group paid premiums of $60,061 in respect of a Directors’ and
Officers’ insurance policy insuring Directors and Officers in respect of claims which may be brought against them.
The contract of insurance prohibits disclosure of the nature of the liability.
The Company 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 Company or any related body corporate against a
liability incurred as such by an officer or auditor.
6
Traffic Technologies Ltd
Directors’ Report (Continued)
DIRECTORS’ MEETINGS
The number of meetings of Directors (including meetings of committees of Directors) held during the financial year
and the number of meetings attended by each Director was as follows:
Directors’ Meetings
Audit & Risk
Committee
Number
attended
Number eligible
Number
to attend
attended
Nomination &
Remuneration
Committee
Corporate
Governance
Committee
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
17
17
15
16
4
-
4
4
4
-
2
4
2
-
2
2
2
-
2
2
1
1
1
1
1
1
1
1
Number
eligible
to attend
17
17
17
16
Mr. Alan Brown
Mr. Con Liosatos
Mr. Ray Horsburgh
Mr. Ken Jarrett
Committee Membership
As at the date of this report the Company had an Audit & Risk Committee, a Nomination & Remuneration Committee
and a Corporate Governance Committee of the Board of Directors.
The eligibility and attendance of each of the Directors is as disclosed in the table above. The chairman of each
committee was:
Audit & Risk – Mr. Ray Horsburgh
Nomination & Remuneration – Mr. Alan Brown
Corporate Governance – Mr. Alan Brown
Prior to October 2010 Mr. Brown was chairman of the Audit & Risk Committee and Mr. Horsburgh was chairman of
the Nomination & Remuneration and Corporate Governance Committees.
ROUNDING
The amounts contained in this report and in the financial report have been rounded to the nearest $1,000 (unless
otherwise stated) under the option available to the Company under ASIC Class Order 98/0100. The Company is an
entity to which the Class Order applies.
AUDITOR’S INDEPENDENCE AND NON-AUDIT SERVICES
A copy of the auditor’s independence declaration in relation to the audit for the financial year is provided immediately
following this report.
During the financial year, the Company’s auditor, BDO Audit (NSW-VIC) Pty Ltd, did not provide any non-audit
services.
7
Traffic Technologies Ltd
Directors’ Report (Continued)
REMUNERATION REPORT (AUDITED)
This Remuneration Report outlines the Director and executive remuneration arrangements of the Group in accordance
with the requirements of the Corporations Act 2001 and its Regulations. For the purposes of this report, Key
Management Personnel (KMP) of the Group are defined as those persons having authority and responsibility for
planning, directing and controlling the major activities of the Group, directly or indirectly, including any Director
(whether executive or otherwise) of the parent company.
For the purposes of this report, the term “executive” encompasses the Managing Director, Chief Financial Officer and
senior managers of the Group.
Nomination & Remuneration Committee
The Nomination & Remuneration Committee of the Board of Directors of the Company is responsible for determining
and reviewing remuneration arrangements for the Directors and executives.
The Nomination & Remuneration Committee comprises all non-executive Directors and is chaired by Mr. Alan
Brown, who is an independent Director. The Nomination & Remuneration Committee assesses the appropriateness of
the nature and amount of remuneration of executives on a periodic basis by reference to relevant employment market
conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality,
high performing director and executive team.
Remuneration Philosophy
The performance of the Group depends upon the quality of its directors and executives. To prosper, the Group must
attract, motivate and retain highly skilled directors and executives.
Remuneration Structure
In accordance with best practice corporate governance, the structure of non-executive director and executive
remuneration is separate and distinct.
Non-executive Director Remuneration
Objective
The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and
retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
Structure
The Company’s Constitution and the ASX Listing Rules specify that the aggregate remuneration of non-executive
directors shall be determined from time to time by a general meeting. The notice convening a general meeting at
which it is proposed to seek approval to increase that maximum aggregate sum must specify the proposed new
maximum aggregate sum and the amount of the proposed increase. Aggregate maximum non-executive Directors’
remuneration is currently $400,000 per year.
It is considered good governance for directors to have a stake in the Company on whose board they sit. Non-executive
directors have long been encouraged to hold shares in the Company (purchased by the director on market). The
Company also facilitates this through the Company Share Option Plan.
The non-executive Directors do not receive retirement benefits, other than statutory superannuation, nor do they
participate in any incentive programs.
8
Traffic Technologies Ltd
Directors’ Report (Continued)
The remuneration of non-executive Directors for the financial years ended 30 June 2011 and 30 June 2010 is detailed
in Table 1 and Table 2 respectively of this report.
Executive Remuneration
Objective
The Group aims to reward executives with a level and mix of remuneration commensurate with their position and
responsibilities within the Company so as to:
Reward executives for Group and individual performance;
Align the interests of executives with those of shareholders;
Link reward with the strategic goals and performance of the Group; and
Ensure total remuneration is competitive by market standards.
Structure
Currently remuneration is paid in the form of cash remuneration, superannuation contributions and share options where
applicable.
The Company paid a bonus of $19,541 to Mr. Raj Bhat during the financial year ended 30 June 2011. The Company
paid no other bonuses, nor accrued any bonuses, to Key Management Personnel during the financial year ended 30
June 2011. Further details of the remuneration of Directors and executives are provided in Table 1 and Table 2 of this
report.
The Nomination & Remuneration Committee is responsible for determining the level and make-up of executive
remuneration and makes reference to a wide range of available external research as well assessments of individual
performance in determining the appropriate level of executive remuneration.
Share Options
All Directors and executives have the opportunity to qualify for participation in the Company Share Option Plan
(which forms part of long term incentive variable remuneration). The issue of options under this plan is at the
discretion of the Board. Options are used by the Company as a non-cash form of remuneration and have the objective
of aligning employee interests with the objective of increasing shareholder wealth. Any issue of options under the plan
to Directors is subject to shareholder approval.
During the financial year ended 30 June 2011 no options were granted as equity compensation benefits to key
management personnel and no options vested during the year (2010: nil). There were no options outstanding as at 30
June 2011 or at the date of this report.
The Board has no policy with regard to key management personnel limiting the risk of their exposure to options.
9
Traffic Technologies Ltd
Directors’ Report (Continued)
Executive Service and Management Agreements
Executives are given the opportunity to receive their fixed remuneration in a variety of forms including cash,
superannuation contributions and fringe benefits such as motor vehicles. It is intended that the manner of payment
chosen will be optimal for the recipient without creating undue cost for the Group. The service contracts entered into
with executives do not prescribe how compensation levels are to be modified from year to year. Compensation levels
are reviewed each year to take into account cost-of-living changes, any change in the scope of the role performed by
the senior executive and any changes required to meet the principles of the compensation policy.
Director and Executive Details
The following persons acted as Directors of the Company during or since the end of the financial year:
Mr Alan Brown
Chairman
Mr. Con Liosatos
Managing Director
Mr. Ray Horsburgh
Non-Executive Director
Mr. Ken Jarrett
Non-Executive Director
Resigned 27 June 2011
The term “executives” is used in this remuneration report to refer to the following persons. Except as noted, the named
persons held their current position for the whole of the financial year and since the end of the financial year:
Mr. Peter Crafter
Chief Financial Officer and Company Secretary
Mr. Raj Bhat
Executive Manager Traffic Products Division
Mr. George Kotsopoulos
Group Financial Controller
Mr. Murray Jackman
Northern Territory Branch Manager
Mr. Soon Chua
Group Management Accountant
Managing Director
The Managing Director, Mr. Liosatos, is employed under a rolling contract. Employment may be terminated by the
giving, by either party, of 9 months’ notice, or by the payment or forfeiture of an equivalent amount of pay in lieu of
notice from any monies owing. The Company retains the right to terminate the contract at any time without notice in
the case of serious misconduct. Mr. Liosatos is also entitled to receive a bonus of up to 20% of base salary if certain
KPI’s in respect of the 2012 financial year are achieved.
Mr. Liosatos’ performance is reviewed annually by the Nomination & Remuneration Committee.
Key Management Personnel and Other Executives
Mr. Peter Crafter, Company Secretary and Chief Financial Officer, is employed under a rolling employment contract.
Employment may be terminated by the giving, by either party, of 6 months’ notice, or by the payment or forfeiture of
an equivalent amount of pay in lieu of notice from any monies owing. The Company retains the right to terminate the
contract at any time without notice in the case of serious misconduct. Mr. Crafter is also entitled to receive a bonus of
up to 10% of base salary if certain KPI’s in respect of the 2012 financial year are achieved.
Mr. Raj Bhat, Operations Manager in the Traffic Products Division, is employed under a rolling employment contract.
Employment may be terminated by the giving, by either party, of four weeks’ notice, or by the payment or forfeiture of
an equivalent amount of pay in lieu of notice from any monies owing. The Company retains the right to terminate the
contract at any time without notice in the case of serious misconduct.
10
Traffic Technologies Ltd
Directors’ Report (Continued)
Mr. George Kotsopoulos, Group Financial Controller, is employed under a rolling employment contract. Employment
maybe terminated by the giving, by either party, of 3 months’ notice, or by the payment or forfeiture of an equivalent
amount of pay in lieu of notice from monies owning. The Company retains the right to terminate the contract at any
time without notice in the case of serious misconduct.
is employed under a rolling employment contract.
Mr. Murray Jackman, Northern Territory Branch Manager,
Employment may be terminated by the giving, by either party, of 4 weeks’ notice, or by the payment or forfeiture of an
equivalent amount of pay in lieu of notice from monies owing. The Company retains the right to terminate the contract
at any time without notice in the case of serious misconduct. Mr. Jackman is entitled to receive a bonus of up to
$15,000 on achieving budgeted KPI’s.
Mr. Soon Chua, Group Management Accountant, is employed under a rolling employment contract. Employment may
be terminated by the giving, by either party, of 4 weeks’ notice, or by the payment of forfeiture of an equivalent
amount of pay in lieu of notice from monies owing. The Company retains the right to terminate the contract at any
time without notice in the case of serious misconduct.
Non-executive Director Agreements
The non-executive Directors have entered into non-executive Director Agreements with the Company. The non-
executive Director agreements:
-
-
-
entrench a Director’s rights to be indemnified by the Company to the maximum extent permitted by law;
require the Company to take out an appropriate Directors’ and officers’ insurance policy to protect the
Director from liability (to the extent permitted by law); and
access the books and records of the Company, which relate to the period the Director acted as a Director of
the Company. After resignation as a Director, the Director can only use this information for the purposes of
defending a claim.
Group Performance and Shareholder Returns
EBITDA before non-recurring items from continuing
operations ($’000)
Net profit /(loss) attributable to equity holders of the parent
($’000)
Basic earnings / (loss) per share from continuing operations
Share price at balance date
Share price growth over year ended 30 June
2011
$6,052
2010
$4,489+
$582
(0.01 cents)
1.5 cents
(46%)
($254)
(2.02 cents)
2.8 cents
22%
+ Comparative figures have been restated – refer note 1 to the financial statements
Management remuneration is not related to group performance and shareholder returns except to the extent that the
Managing Director and Chief Financial Officer are entitled to receive a bonus if certain KPI’s in respect of the 2012
financial year are achieved.
11
Traffic Technologies Ltd
Directors’ Report (Continued)
TABLE 1: REMUNERATION OF KEY MANAGEMENT PERSONNEL AND OTHER EXECUTIVES FOR THE YEAR ENDED 30 JUNE 2011 (AUDITED)
Short-term benefits
Post-employment
benefits
Termination
Benefits
Long-term
benefits
Share based
payments
Total
Salary & fees
$
Non-monetary
$
Cash
Bonus
$
Superannuation
$
$
Long service
leave
$
Options
$
Non-executive Directors
Mr. Alan Brown
Mr Ray Horsburgh
Mr. Ken Jarrett
76,666
63,333
45,000
Sub-total non-executive Directors
184,999
-
-
-
-
Key Management Personnel
Mr. Con Liosatos
Mr. Peter Crafter
406,788
207,108
613,896
40,269
14,033
54,302
Sub-total
798,895
54,302
-
-
-
-
-
-
-
-
Other Executives
Mr. Raj Bhat
Mr. George Kotsopoulos
Mr. Murray Jackman
Mr. Soon Chua
191,856
165,138
137,550
149,419
643,963
12,158
43,278
32,596
5,897
93,929
19,541
-
-
-
19,541
6,900
5,700
4,050
16,650
36,611
44,800
81,411
98,061
18,933
14,862
12,830
13,384
60,009
Total
1,442,858
148,231
19,541
158,070
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,309
4,781
11,090
11,090
2,441
2,379
16,062
654
21,536
32,626
$
83,566
69,033
49,050
201,649
489,977
270,722
760,699
962,348
244,929
225,657
199,038
169,354
838,978
-
-
-
-
-
-
-
-
-
-
-
-
- 1,801,326
%
performance
related
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12
Traffic Technologies Ltd
Directors’ Report (Continued)
TABLE 2: REMUNERATION OF KEY MANAGEMENT PERSONNEL AND OTHER EXECUTIVES FOR THE YEAR ENDED 30 JUNE 2010 (AUDITED)
Short-term benefits
Post-employment
benefits
Termination
Benefits
Long-term benefits
Share based
payments
Total
Salary & fees
$
Non-monetary
$
Other
$
Superannuation
$
$
Long service leave
$
Options
$
8,100
4,500
1,742
1,688
1,688
17,718
36,000
44,250
28,647
46,257
15,970
171,124
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,874
2,293
2,616
748
-
8,531
$
98,100
54,500
21,097
18,751
19,097
211,545
488,647
263,813
259,726
206,592
193,411
-
-
-
-
-
-
-
7,423
-
-
-
7,423 1,412,189
%
performance
related
-
-
-
-
-
-
-
-
-
-
-
-
-
188,842
-
8,531
7,423 1,623,734
Non-executive Directors
Mr Ray Horsburgh
Mr. Alan Brown
Mr. Ken Jarrett
Mr. Rajeev Dhawan
Mr. Garry Sladden
90,000
50,000
19,355
17,063
17,409
Sub-total non-executive Directors
193,827
Executive officers
Mr. Con Liosatos
Mr. Peter Crafter
Mr. Andrew Bull
Mr. Graham Sergeant
Mr. Mark Faunt
400,000
201,000
198,677
143,970
177,441
-
-
-
-
-
-
49,773
8,847
29,786
15,617
-
Sub-total executive officers
1,121,088
104,023
Total
1,314,915
104,023
-
-
-
-
-
-
-
-
-
-
-
-
-
13
Traffic Technologies Ltd
Traffic Technologies Ltd
Traffic Technologies Ltd
Directors’ Report (Continued)
Directors’ Report (Continued)
Directors’ Report (Continued)
Signed in accordance with a resolution of the Directors.
Signed in accordance with a resolution of the Directors.
Signed in accordance with a resolution of the Directors.
Mr. Alan Brown
Mr. Alan Brown
Mr. Alan Brown
Independent Non-Executive Chairman
Independent Non-Executive Chairman
Independent Non-Executive Chairman
22 August 2011
22 August 2011
22 August 2011
Melbourne
Melbourne
Melbourne
14
14
14
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’ (cid:9)(cid:12)(cid:5)(cid:15)(cid:10)(cid:11)(cid:12)(cid:1)(cid:1)
(cid:1)
(cid:14)(cid:2) (cid:10) (cid:1)(cid:6) (cid:22)(cid:23)(cid:24)(cid:25)(cid:1)(cid:26)(cid:11) (cid:17)(cid:27) (cid:28)(cid:29) (cid:9)(cid:4) (cid:30)(cid:1)(cid:13)(cid:25)(cid:31)(cid:1)(cid:5)(cid:25)(cid:23)(cid:1)
(cid:1)
(cid:1)
( (cid:5)(cid:4)(cid:29)(cid:11)(cid:8)(cid:12)(cid:17)(cid:5)(cid:27)(cid:1)(cid:25)(cid:25)(cid:17)(cid:7)(cid:1)(cid:7)(cid:6)(cid:21)(cid:1)(cid:11)(cid:13)(cid:1)(cid:2)(cid:8)(cid:18)(cid:8)(cid:3)(cid:10)(cid:1)(cid:25)(cid:23)(cid:26)(cid:26)(cid:1)
Traffic Technologies Ltd
Corporate Governance Statement
The Board of Directors of Traffic Technologies Ltd is responsible for the corporate governance framework of the
Group having regard to the ASX Corporate Governance Council’s published guidelines as well as its corporate
governance principles and recommendations. The Board guides and monitors the business and affairs of the
Company on behalf of the shareholders by whom they are elected and to whom they are accountable.
The Board of Directors has implemented the Recommendations of the ASX Corporate Governance Council to the
extent appropriate for the size and nature of the Company’s business as described below. The format of the
Corporate Governance Statement follows the ASX Corporate Governance Council’s “Second Edition - Revised
Corporate Governance Principles and Recommendations”. The Corporate Governance Statement must contain
specific information and also report on the Company’s adoption of the Council’s best practice recommendations on
an exception basis, whereby disclosure is required of any recommendation that has not been adopted by the
Company, together with the reasons it has not been adopted.
The Board has established a Corporate Governance Committee, which is responsible for reviewing the Company’s
compliance with best practice corporate governance requirements, including compliance with the ASX Corporate
Governance Council’s Recommendations. The Corporate Governance Committee comprises all Board members and
is chaired by Mr. Alan Brown. For details of meetings of the Corporate Governance Committee held during the year
and attendance at those meetings, refer to the Directors’ Report.
The Company’s corporate governance practices have been in place throughout the year ended 30 June 2011. With
the exception of the departures from the Corporate Governance Council recommendations detailed below, the
corporate governance practices of the Company are compliant with the Council’s best practice recommendations.
Principle 1: Lay solid foundations for management and oversight
The Board guides and monitors the business and affairs of the Company on behalf of the shareholders by whom they
are elected and to whom they are accountable. The Board acts on behalf of and is accountable to shareholders. The
Board seeks to identify the expectations of shareholders, as well as other regulatory and ethical expectations and
obligations. In addition, the Board is responsible for identifying areas of significant business risk and ensuring
arrangements are in place to adequately manage these risks. The Board guides and monitors and fulfils its
responsibility to protect shareholder interests and enhance shareholder value by:
Approving and periodically reviewing the business and financial objectives, strategies and plans of the
consolidated entity;
Monitoring the financial performance of the consolidated entity, including approval of the consolidated
entity’s financial statements;
Ensuring that adequate internal control systems and procedures exist and that compliance with these
systems and procedures is maintained;
Identifying areas of significant business or financial risk to the consolidated entity and ensuring
management takes appropriate action to manage those risks;
Reviewing the performance and remuneration of Board members and key members of staff;
Monitoring the operations of the consolidated entity and the performance of management;
Establishing and maintaining appropriate ethical standards; and
Reporting to the shareholders, the Australian Securities and Investments Commission and the Australian
Securities Exchange as required.
Whilst at all times the Board retains full responsibility for guiding and monitoring the Group, in discharging its
stewardship it makes use of Committees. Board Committees are able to focus on a particular responsibility and
provide informed feedback to the Board. The Board has established the following Committees:
Corporate Governance;
Audit & Risk; and
Nomination & Remuneration.
16
Traffic Technologies Ltd
Corporate Governance Statement (Continued)
The Board delegates to the Managing Director and the executive management team responsibility for the operation
and administration of the consolidated entity. The Board ensures that this team is appropriately qualified and
experienced to discharge their responsibilities and has in place procedures to assess the performance of the Managing
Director and the executive management team.
The Board is responsible for ensuring that management’s objectives and activities are aligned with the expectations
and risks identified by the Board. The Board has a number of mechanisms in place to ensure this is achieved
including:
Board approval of a strategic plan designed to meet stakeholders’ needs and manage business risk;
Ongoing development of the strategic plan and approving initiatives and strategies designed to ensure the
continued growth and success of the entity; and
Implementation of budgets by management and monitoring progress against budget, via the establishment
and reporting of both financial and non financial key performance indicators.
Other functions reserved to the Board include:
Approval of the annual and half-yearly financial reports;
Approving and monitoring the progress of major capital expenditure, capital management and acquisitions
and divestments;
Ensuring that any significant risks that arise are identified, assessed, appropriately managed and monitored;
and
Reporting to shareholders.
Principle 2: Structure the Board to add value
The Board has been structured to ensure that an appropriate mix of experience and expertise is available to provide
strategic guidance for the Company and effective oversight of management. It is the policy of the Company that the
composition of the Board is determined having regard to the following concepts:
That the Board will comprise a majority of independent Directors;
That the Board will comprise a minimum of three Directors and the actual number may be higher where
additional expertise is required in specific areas and an outstanding candidate is located;
That the Chairman of the Board will be an independent Non-Executive Director; and
That the Board members should represent a broad range of expertise and experience
The skills, experience and expertise relevant to the position held by each Director in office at the date of the Annual
Report is included in the Directors’ Report.
The Directors in office and the term in office held by each Director at the date of this report are as follows:
Name
Mr. Alan Brown
Mr. Con Liosatos
Mr. Ray Horsburgh
Position
Independent Non-Executive Chairman
Managing Director
Independent Non-Executive Director
Term in Office
7 years, 7 months
8 years, 3 months
4 years, 9 months
The following Director resigned during the year:
Mr. Ken Jarrett
(resigned 27 June 2011)
Non-Executive Director
17
Traffic Technologies Ltd
Corporate Governance Statement (Continued)
A director will be considered an independent director if the director:
(a)
(b)
(c)
(d)
(e)
is not a substantial shareholder of the Company, being a shareholder who does not have more than a 5%
interest in the Company;
has not been employed within the last 3 years as an executive of the Company;
has not within the last 3 years been a principal of a material professional adviser or consultant to the
Company;
is not a material supplier, customer or other contractor of the Company; and
is otherwise considered by the Board to be independent.
In accordance with the definition of independence above, two of the four Directors of the Company who served
during the year ended 30 June 2011 were independent. Mr. Liosatos, the Managing Director, is a full time executive
and substantial shareholder of the Company. Mr. Jarrett is a substantial shareholder of the Company. The Company
had an independent chairman throughout the year ended 30 June 2011.
The Company’s constitution provides that a Director other than the Managing Director may not retain office for
more than three calendar years or beyond the third Annual General Meeting following his or her election, whichever
is longer, without submitting for re-election. One third of the Directors retire each year and are eligible for re-
election. The Directors who retire by rotation at each annual general meeting are those with the longest length of
time in office since their appointment or last election. All Directors must be elected by the members of the
Company. It is not a requirement for a person who is a Director to own shares in the Company.
The Chair is held by an independent Director, Mr. Brown. The roles of Chair (Mr. Brown) and Managing Director
(Mr. Liosatos) are not exercised by the same individual.
Recommendation 2.4 requires listed entities to establish a Nomination Committee to oversee the appointment and
induction process for Directors and committee members, and the selection, appointment and succession planning
process of the Company’s chief executive officer. All non-executive Directors are members of the Nomination &
Remuneration Committee, which is chaired by Mr. Brown.
In considering board candidates, the Nomination &
Remuneration Committee will identify potential skill gaps and seek suitable qualified candidates to fill such gaps,
using external recruitment tools where necessary.
The Company provides the capacity for any Director to obtain separate professional advice on any matter being
discussed by the Board and for the Company to pay the cost incurred. Before the engagement is made, the Director
is required to obtain the Chairman of the Board’s approval. Approval will not be unreasonably denied and the
Director will be expected to provide the Board with a copy of that advice.
Performance
The performance of the Board, Board Committees and individual Directors is reviewed regularly by the Board as a
whole. During the reporting period, the Board reviewed the performance of each Board member and key executive.
The performance criteria against which Directors and executives are assessed are aligned with the financial and non-
financial objectives of the Company. Directors whose performance is consistently unsatisfactory may be asked to
retire.
18
Traffic Technologies Ltd
Corporate Governance Statement (Continued)
Principle 3: Promote ethical and responsible decision-making
All Directors and officers of the Company are required to discharge their responsibilities ethically and with integrity.
The Board has drawn up a code of conduct to guide Board members, executives and employees in carrying out their
duties and responsibilities, to guide compliance with legal and other obligations and to maintain confidence in the
Company’s integrity. Executives and employees are encouraged to report to Board members any concerns regarding
potentially unethical practices.
The Board of is committed to good corporate governance and aims for continuous improvement in these practices.
The Company embraces high ethical standards and requires its employees to demonstrate both personal and
corporate responsibility. Directors, officers and employees are required to safeguard the integrity of the Company
and to act in the best interests of its stakeholders (generally, shareholders).
There must be no conflict, or perception of a conflict, between the interests of any Director, officer or employee of
the Company and the responsibility of that person to the Company and to the stakeholders. No Director, officer or
employee may improperly use their position for personal or private gain to themselves, a family member, or any
other person (“associates”).
The Company has established a trading policy governing the trading of its securities. As required by the ASX
Listing Rules, a copy of the Company's trading policy is available from the Company's ASX announcements
platform.
The Company has established a diversity policy. The policy requires the board to establish measurable objectives for
achieving gender diversity and to annually assess the Company's progress toward achieving those objectives. The
Board is still in the process of determining suitable measurable objectives and is not able to disclose further details
until they are determined and adopted by the Board. However, all appointments are, and will continue to be, made
on the basis of merit.
Currently the female workforce of the Company constitutes 18.4% of full-time staff and 100% of part-time staff.
There are no women in senior executive positions or on the board at present.
Principle 4: Safeguard integrity in financial reporting
It is the Board’s responsibility to ensure that an effective internal control framework exists within the Group. This
includes internal controls to deal with both the effectiveness and efficiency of significant business processes, the
safeguarding of assets, the maintenance of proper accounting records and the reliability of financial information.
Audit & Risk Committee
The Audit & Risk Committee plays a key role in assisting the Board of Directors with its responsibilities relating to
accounting, developing internal control systems, reporting practices and risk management and ensuring the
independence of the Company’s auditors. The Charter for this Committee incorporates policies and procedures to
ensure an effective focus from an independent perspective.
The Audit & Risk Committee oversees and appraises the quality of the audits conducted by the auditors of the
Company. BDO Audit (NSW-VIC) Pty Ltd are the currently appointed auditors of Traffic Technologies. Their
appointment will be reviewed periodically. The Company believes in the ongoing assessment of its audit
arrangements and complies with any regulatory requirements to rotate its external audit partner.
The Audit & Risk Committee includes in its Charter a review of the effectiveness of administrative, operating and
accounting controls.
Meetings of the Committee will be held a minimum of twice per annum, represented by one meeting for each of the
full-year and half-year financial accounts review, approval and recommendation to the Board. Further meetings may
19
Traffic Technologies Ltd
Corporate Governance Statement (Continued)
be held for discussion on policies and procedures and risk management matters. The auditors of the company will
also be invited to make recommendations to the Committee on policies and procedures for discussion.
The Company’s Audit & Risk Committee follows each of the principles listed below:
Consists only of non-executive Directors;
Consists of a majority of independent Directors;
Has an independent Chairperson, who is not Chairperson of the Board
Has at least one member who is a qualified accountant or finance professional with experience of financial
and accounting matters; and
Has at least three members
All members of the Board with the exception of the Managing Director are members of the Audit & Risk
Committee. The Audit & Risk Committee is chaired by Mr. Horsburgh, who is an independent chairman and who is
not Chairman of the Board.
Qualifications of Audit & Risk Committee members
None of the Audit & Risk Committee members have formal accountancy qualifications. However, all Audit & Risk
Committee members have extensive business experience at Board level and in senior management positions.
Audit & Risk Committee meetings are attended by the partner responsible for the Company’s audit. For details of
meetings of the Audit & Risk Committee held during the year and attendance at those meetings, refer to the
Directors’ Report.
Principle 5: Make timely and balanced disclosure
The Company has established written policies and procedures designed to ensure compliance with ASX Listing Rule
disclosure requirements and to ensure accountability at a senior management level for that compliance, as required
by Recommendation 5.1.
The Company’s Continuous Disclosure Policy is designed to promote transparency and investor confidence and
ensure that all interested parties have an equal opportunity to obtain information which is issued by the Company.
The Company is committed to complying with the continuous disclosure obligations contained in the Listing Rules
of the Australian Securities Exchange (ASX) and under the Corporations Act 2001 and ensuring that all shareholders
and the market have an equal opportunity to obtain and review full and timely information about the Company’s
securities.
The ASX defines continuous disclosure in its Listing Rules as “the timely advising of information to keep the market
informed of events and developments as they occur”. The Listing Rules and the Corporations Act 2001 require that
a listed entity disclose to the market matters which a reasonable person would expect to have a material effect on the
price or value of the entity’s securities. A reasonable person is taken to expect information to have a material effect
on the price or value of securities if it would, or would be likely to, influence persons who commonly invest in
securities in deciding whether or not to subscribe for, buy or sell the securities.
The Managing Director controls all the Company’s communications with assistance from the Company Secretary in
carrying out this responsibility. The Managing Director and Chairman are the only two officers allowed to authorise
the release of material information to the market. The Company Secretary is responsible for administering this
policy and is responsible for dealing with the ASX in relation to all Listing Rule issues. The procedures which have
been developed to comply with these rules include immediate reporting of any matter which could potentially have a
material effect, via established reporting lines to the Managing Director and/or the Company Secretary.
Disclosure of such price-sensitive information to the ASX must not be delayed and is disclosed, in the first instance,
to the ASX and only after receiving confirmation that a release of this disclosure has been made to the market will it
20
Traffic Technologies Ltd
Corporate Governance Statement (Continued)
then be placed on the Company’s website. Material information must not be selectively disclosed (i.e. to analysts,
the media or shareholders) prior to being announced to the ASX, and all media releases must be referred to the
Managing Director for approval prior to any release.
Principle 6: Respect the rights of shareholders
The Company’s communication strategy is to promote effective communication with shareholders.
The Company is committed to:
ensuring that shareholders and the financial markets are provided with full and timely information about the
Company’s activities in a balanced and understandable way;
complying with continuous disclosure obligations contained in the applicable ASX Listing Rules and the
Corporations Act 2001; and
communicating effectively with its shareholders and making it easier for shareholders to communicate with
the Company.
To promote effective communication with shareholders and encourage effective participation at general meetings,
information will be communicated to shareholders:
through the release of information to the market via the ASX;
through the distribution of the Annual Report and Notices of Annual General Meeting;
through shareholder meetings;
through letters and other forms of communications directly to shareholders;
by posting relevant information on the Company’s website; and
by providing shareholders with a choice of information delivery i.e. paper or electronic means.
The Company’s website has a dedicated Shareholder Information section and endeavours to publish on the website
all important company information and relevant announcements made to the market.
The Company’s reports and ASX announcements may be viewed and downloaded from the ASX website: (Stock
code: TTI).
The Board encourages full participation of shareholders at the Annual General Meeting to ensure a high level of
accountability and identification with the Group’s strategy and goals. The external auditor is required to attend the
Annual General Meeting of the Company and is available to answer shareholder questions about the conduct of the
audit and the preparation and content of the auditor’s report.
Principle 7: Recognise and manage risk
The Board of the Company takes a proactive approach to the Company’s risk management and internal compliance
and control system. This function is dealt with by the Audit & Risk Committee.
The Audit & Risk Committee is responsible for ensuring that adverse risks and mitigation of these risks are
identified on a timely basis and that the Company’s objectives and activities are aligned with the risks and
opportunities identified by the Audit & Risk Committee and the Board of Directors.
The Company has developed a policy on risk oversight and management and will undertake a detailed risk
assessment of the company’s operations, procedures and processes. The risk assessment will be aimed at identifying
the following:
21
Traffic Technologies Ltd
Corporate Governance Statement (Continued)
a culture of risk control and the minimisation of adverse risk throughout the Company, which is being done
through natural or instinctive process by employees of the Company;
a culture of risk control that can easily identify adverse risks as they arise and amend practices;
the installation of practices and procedures in all areas of the business that are designed to minimise an event
or incident that could have a financial or other effect on the business and its day to day management;
adoption of practices and procedures to minimise many of the standard adverse commercial risks, i.e., taking
out the appropriate insurance policies, or ensuring compliance reporting is up to date; and
adoption of regular risk management controls reporting to the Board, via the Audit & Risk Committee.
For the purposes of assisting investors to understand better the nature of the risks faced by the Company, the Board
has prepared a list of adverse operational risks as part of these disclosures. However the Board notes that this does
not necessarily represent an exhaustive list and that it may be subject to change based on underlying market events:
Adverse change in economic conditions affecting demand for the Company’s products or services;
Decrease in Federal or State government expenditure on road infrastructure;
Deferral of major projects through circumstances outside the Company’s control;
Adverse operating conditions, including prolonged periods of adverse weather conditions affecting operations;
and
Increasing costs of operations, including labour costs.
Managing Director and Chief Financial Officer certification
In accordance with section 295A of the Corporations Act 2001, the Managing Director and the Chief Financial
Officer have provided a written statement to the Board that:
In their view the Company’s financial report is founded on a sound system of risk management and internal
compliance and control which implements the financial policies adopted by the Board; and
The Company’s risk management and internal compliance and control system is operating effectively in all
material respects.
Principle 8: Remunerate fairly and responsibility
It is the Company’s objective to provide maximum stakeholder benefit from the retention of a high quality Board and
executive team by remunerating Directors and key executives fairly and appropriately with reference to relevant
employment market conditions. To assist in achieving this objective, the Nomination & Remuneration Committee
takes account of the Company’s financial and operating performance in setting the nature and amount of executive
Directors’ and executives’ remuneration. In relation to the payment of bonuses, options or other incentive payments,
discretion is exercised by the Nomination & Remuneration Committee, having regard to the overall performance of
the Company and the performance of the individual during the period. The expected outcomes of the remuneration
structure are:
Retention and motivation of key executives;
Attraction of high quality management to the Company; and
Performance incentives that allow executives to share in the success of the Company.
For a full discussion of the Company’s remuneration philosophy and framework and the remuneration received by
Directors and executives in the current period, please refer to the Remuneration Report which is contained within the
Directors’ Report.
22
Traffic Technologies Ltd
Corporate Governance Statement (Continued)
Nomination & Remuneration Committee
The Company has a Nomination & Remuneration Committee which is responsible for determining and reviewing
compensation arrangements for the Directors and the Managing Director and for approving parameters within which
the review of the compensation arrangements for the senior executive team can be conducted by the Managing
Director.
The Nomination & Remuneration Committee comprises all non-executive Directors and is chaired by Mr. Brown,
who is an independent Director. For details of meetings of the Nomination & Remuneration Committee held during
the year and the attendance at those meetings, refer to the Directors’ Report.
The details of the remuneration paid to Directors and Officers are included in the Remuneration Report contained in
the Director’s Report.
Non-executive Directors’ remuneration
Certain non-executive Directors have previously been issued share options as part of their remuneration. All
Directors and executives have the opportunity to qualify for participation in the Company Share Option Plan,
including non-executive Directors. Shareholder approval is required and has been obtained for all equity-based
remuneration payable to Board members. The payment of part of the remuneration of non-executive Directors in a
non-cash form preserves cash for use in the business. In common with other smaller-cap listed companies, the
Company believes that it must pay its non-executive Directors adequate remuneration in the form of cash and options
in order to attract and retain non-executive Directors of appropriate qualifications and experience. Details of
Directors’ option holdings are disclosed in the Annual Report.
There is no scheme to provide retirement benefits, other than statutory superannuation, to non-executive Directors.
23
Traffic Technologies Ltd and Controlled Entities
Statement of Comprehensive Income
For the year ended 30 June 2011
Note
Consolidated
Continuing operations
Revenue
Other income
Changes in inventories of finished goods and work
in progress
Raw materials and consumables used
Employee benefits expense
Occupancy costs
Advertising and marketing expense
Equipment rental
Other expenses
Earnings before interest, tax, depreciation,
amortisation expense and non-recurring items
Non-recurring items
Depreciation, amortisation and impairment expense
Finance costs
Loss for the year from continuing operations
before income tax
Income tax benefit / (expense)
Loss for the year from continuing operations
Discontinued operations
Profit for the year from discontinued operations
Net profit/(loss) for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Earnings/ (loss) per share
From continuing operations
- Basic (cents per share)
- Diluted (cents per share)
From discontinued operations
- Basic (cents per share)
- Diluted (cents per share)
From continuing and discontinued operations
- Basic (cents per share)
- Diluted (cents per share)
2a
2b
3a
3b
3c
3d
3e
4b
6b
5
5
5
5
5
5
2011
$’000
49,727
345
650
(24,075)
(16,923)
(2,177)
(223)
(212)
(1,060)
2010
$’000
47,801
380
(251)
(20,776)
(17,012)
(2,061)
(209)
(706)
(2,677)
6,052
4,489
(899)
(2,057)
(3,774)
(955)
(2,186)
(4,052)
(678)
(2,704)
654
(24)
606
582
-
582
Cents
(0.01)
(0.01)
0.35
0.35
0.34
0.34
(218)
(2,922)
2,668
(254)
-
(254)
Cents
(2.02)
(2.02)
(1.84)
(1.84)
(0.18)
(0.18)
The Statement of Comprehensive Income should be read in conjunction with the notes to the financial statements.
24
Traffic Technologies Ltd and Controlled Entities
Statement of Financial Position
As at 30 June 2011
Note
20a
7
8
6c
10
11
9
4c
12
13
14
16
6c
12
13
14
16
15
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Assets of disposal group classified as held for sale
Total Current Assets
Non-Current Assets
Property, plant and equipment
Intangible assets and goodwill
Other financial assets
Deferred tax assets
Total Non-Current Assets
TOTAL ASSETS
Current Liabilities
Trade and other payables
Interest bearing loans and borrowings
Provisions
Derivative financial instruments
Liabilities directly associated with assets of disposal
group classified as held for sale
Total Current Liabilities
Non-Current Liabilities
Trade and other payables
Interest bearing loans and borrowings
Provisions
Derivative financial instruments
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
Equity
Contributed equity
Accumulated losses
Share-based payments reserve
TOTAL EQUITY
Consolidated
2011
$’000
2010
$’000
3,005
12,178
7,887
-
3,457
17,290
7,237
13,171
23,070
41,155
5,489
34,406
1
488
5,699
34,241
1
316
40,384
40,257
63,454
81,412
11,953
6,519
1,945
151
-
13,750
19,135
2,392
-
3,597
20,568
38,874
56
24,087
104
-
116
23,936
96
333
24,247
24,481
44,815
63,355
18,639
18,057
41,663
(24,024)
1,000
41,663
(24,606)
1,000
18,639
18,057
The Statement of Financial Position should be read in conjunction with the notes to the financial statements.
25
Traffic Technologies Ltd and Controlled Entities
Statement of Changes in Equity
For the year ended 30 June 2011
Ordinary
Shares
$’000
Convertible
redeemable
preference
shares
$’000
Share based
payments
Reserve
Accumulated
Losses
Total
$’000
$’000
$’000
33,062
8,000
993
(24,352)
17,703
CONSOLIDATED
At 1 July 2009
Loss for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Share Placement
18,838,717 new ordinary shares issued at 3.5 cents
per share – 10 August 2009
Transaction costs
Deferred tax on transaction costs
Share Conversion
Conversion of 500,000 preference shares to 500,000
ordinary shares - 15 December 2009
Share Conversion
Conversion of 15,000,000 preference shares to
15,000,000 ordinary shares – 11 May 2010
Transaction costs
Share-based payment
-
-
-
659
(69)
21
125
3,750
(10)
-
-
-
-
-
-
-
(125)
(3,750)
-
-
-
-
-
-
-
-
-
-
-
7
(254)
-
(254)
(254)
-
(254)
-
-
-
-
-
-
-
659
(69)
21
-
-
(10)
7
At 30 June 2010
37,538
4,125
1,000
(24,606)
18,057
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Conversion of 16,191,208 preference shares into
16,191,208 ordinary shares –
21 October 2010
Conversion of 1,000 preference shares into
1,000 ordinary shares –
28 April 2011
At 30 June 2011
-
-
-
-
-
-
4,048
(4,048)
77
41,663
(77)
-
-
-
-
-
582
-
582
582
-
582
-
-
1,000
(24,024)
18,639
Share-based Payment Reserve
The share based payments reserve is used to record the value of share based payments provided to employees,
including key management personnel, as part of their remuneration and the value of share based payments provided
to vendors as part of the consideration in business combinations.
The Statement of Changes in Equity should be read in conjunction with the notes to the financial statements.
26
Traffic Technologies Ltd and Controlled Entities
Statement of Cash Flows
For the year ended 30 June 2011
Note
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Net cash provided by operating activities
20b
Cash flows from investing activities
Proceeds from disposal of plant and equipment
Proceeds from disposal of business assets
Proceeds from disposal of intangible assets
Payment of development costs
Purchase of property, plant and equipment
Purchase of intangible assets
Transaction costs – sale of business assets
Net cash (used in) investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Proceeds from share issues
Capital raising fees
Payment for finance facility fees
Net cash (used in) financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of the
financial year
Cash and cash equivalents at end of the financial year
20a
Consolidated
2011
Inflows /
(Outflows)
$'000
2010
Inflows /
(Outflows)
$'000
64,665
(58,350)
67
(3,564)
98,637
(92,371)
77
(3,464)
2,818
2,879
50
11,400
-
(963)
(476)
(336)
(341)
125
5
32
(1,205)
(1,090)
(323)
-
9,334
(2,456)
3,275
(15,716)
-
-
(163)
(12,604)
(452)
3,457
3,005
-
(1,021)
659
(80)
(115)
(557)
(134)
3,591
3,457
The Statement of Cash Flows should be read in conjunction with the notes to the financial statements.
27
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
The financial report of Traffic Technologies Ltd (the Company) for the year ended 30 June 2011 was authorised for
issue in accordance with a resolution of the Directors on 22 August 2011. The Company is a company limited by
shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange. The nature
of the operations and principal activities of the Group are described in the Directors’ Report.
1.
Summary of Significant Accounting Policies
a) Basis of Preparation
This financial report is a general purpose financial report that has been prepared in accordance with the
requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative
pronouncements of the Australian Accounting Standards Board (AASB) and AASB Interpretations. The
consolidated financial statements of Traffic Technologies Ltd and its subsidiaries also comply with
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards
Board. The financial report has been prepared on an accruals basis and under the historical cost
convention.
The financial report covers Traffic Technologies Ltd and its subsidiaries (the Group). Traffic
Technologies Ltd is an Australian listed public company limited by shares, incorporated and domiciled in
Australia. The nature and operations and principal activities of the Group are described in the Directors’
Report. The following is a summary of material accounting policies adopted by the Group in the
preparation and presentation of the financial report. The accounting policies have been consistently
applied, unless otherwise stated.
Rounding
The amounts contained in the financial report have been rounded to the nearest thousand dollars ($’000)
(unless otherwise stated) under the option available to the Company under ASIC Class Order 98/0100.
The Company is an entity to which the Class Order applies.
Clarification of terminology used in statement of comprehensive income
Under the requirements of AASB 101 Presentation of Financial Statements, expenses (apart from finance
costs) must be classified according to either the nature (type) of the expense or the function (activity to
which the expense relates). Expenses have been classified using the nature classification as it more
accurately reflects the type of operations undertaken. The presentation in the statement of comprehensive
income has been amended where necessary to present expense items more clearly using the nature
classification and comparatives have been restated accordingly. This has resulted in adjustments to the
following line items:
Other income
Changes in inventories of finished goods and work in progress
Changes in inventories
Raw materials and consumables used
Employee benefits expense
Advertising and marketing expense
Equipment rental
Other expenses
Finance costs
Net change
28
2010
$’000
330
31,470
(251)
(20,776)
(9,502)
(209)
(706)
(26)
(330)
-
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
1.
Summary of Significant Accounting Policies (continued)
Earnings before interest, income tax, depreciation, amortisation expenses and non-recurring items
(“EBITDA before non-recurring items”) reflects the results from continuing, recurring operational
performance. This is believed to be a relevant and useful financial measure used by management to
measure the Group’s ongoing performance.
b)
Changes in accounting policies and disclosures
The accounting policies adopted are consistent with those of the previous financial year except as follows:
The Group has adopted the following new and amended Australian Accounting Standards and AASB
Interpretations as of 1 July 2010:
Further Amendments to Australian Accounting Standards arising from the Annual Improvements
Project – AASB 2009-5
Improvements to IFRSs – AASB 2010-03.
Significant effects on current, prior or future periods arising from the first-time application of these new
requirements in respect of presentation, recognition and measurement are described below. An overview
of standards, amendments and interpretations to IFRSs and AASBs issued but not yet effective is given
below.
Adoption of Improvements to IFRSs 2009 – AASB 2009-5
The Improvements to IFRSs 2009 (issued as AASB 2009-5 Further Amendments to Australian
Accounting Standards arising from the Annual Improvements Project) made several minor amendments to
IFRSs. The only amendment relevant to the Group relates to AASB 117 Leases. The amendment requires
that leases of land are classified as finance or operating by applying the general principles of AASB 117.
Prior to this amendment, AASB 117 generally required a lease of land to be classified as an operating
lease. The Group has reassessed the classification of the land elements of its unexpired leases at 1 July
2010 on the basis of information existing at the inception of those leases and has determined that none of
its leases require reclassification.
Accounting standards and interpretations issued but not yet effective
At the date of authorisation of these financial statements certain new standards, amendments and
interpretations to existing standards have been published but are not yet effective and have not been
adopted early by the Group.
Management anticipates that all of the relevant pronouncements will be adopted in the Group’s accounting
policies for the first period beginning after the effective date of the pronouncement. Information on new
standards, amendments and interpretations that are expected to be relevant to the Group’s financial
statements is provided below. Certain other new standards and interpretations have been issued but are
not expected to have a material impact on the Group’s financial statements.
AASB 9 Financial Instruments (issued December 2009 and amended December 2010)
This standard is applicable to periods beginning on or after 1 January 2013 and will amend requirements
for classification and measurement of financial assets.
29
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
1. Summary of Significant Accounting Policies (continued)
AASB 9 requires that gains or losses on financial liabilities measured at fair value are recognised in profit
or loss, except that the effects of changes in the liability’s credit risk are recognised in other
comprehensive income. At 30 June 2011, the entity has $151,000 of financial liabilities measured at fair
value through profit or loss. The amendments require that any changes in fair value attributable to the
liability’s credit risk be recognised in other comprehensive income instead of profit or loss. The
amendments apply retrospectively from date of initial application, which will be 1 July 2012. Therefore, at
this stage, it is not yet possible for the entity to quantify the impact on the financial statements of first time
application of these amendments.
IFRS 13 Fair Value Measurement (issued May 2011)
This standard is applicable to periods beginning on or after 1 January 2013. The standard requires
additional disclosures for items measured at fair value in the statement of financial position, as well as
items merely disclosed at fair value in the notes to the financial statements. When this standard is
adopted for the first time on 1 July 2013, the financial statements will include additional disclosures about
items measured at fair value.
The standard also establishes a single framework for measuring the fair value of financial and non-
financial items recognised at fair value in the statement of financial position or disclosed in the notes in
the financial statements. Due to the recent release of this standard, the entity has yet to conduct a detailed
analysis of the differences between the current fair valuation methodologies used and those required
by IFRS 13. However, when this standard is adopted for the first time for the year ended 30 June 2014,
there will be no impact on the financial statements because the revised fair value measurement
requirements apply prospectively from 1 July 2013.
IAS 1 Presentation of Items of Other Comprehensive Income (issued June 2011)
This standard is applicable to periods beginning on or after 1 January 2013 and requires amendments to
the presentation of items of other comprehensive income (OCI) to align the presentation with US
GAAP. This will involve a name change for the statement of comprehensive income, which will be
referred to as the 'statement of profit or loss and other comprehensive income.' OCI items will also be
grouped into two categories - those that could subsequently be reclassified into profit or loss and those that
cannot. When this standard is first adopted for the year ended 30 June 2014, there will be no impact on
amounts recognised for transactions and balances for 30 June 2014 (and comparatives). However the
statement of comprehensive income will include name changes and include subtotals for any items of OCI
that can subsequently be reclassified to profit or loss in future and those that cannot subsequently be
reclassified.
AASB 2010-4 Further Amendments to Australia Accounting Standards Arising from the Annual
Improvements Process (issued June 2010)
This standards is applicable to periods beginning on or after 1 January 2011 and reduces the level of
disclosure required for credit risk, renegotiated loans and receivables and the fair value of collateral held.
On initial adoption for the year ended 30 June 2012, there will be no impact on amounts recognised in the
financial statements as the amendment results in fewer disclosures only.
30
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
1.
Summary of Significant Accounting Policies (continued)
c)
Basis of consolidation
The consolidated financial statements comprise the financial statements of Traffic Technologies Ltd and
its subsidiaries as at 30 June each year (the Group).
Subsidiaries are all those entities over which the Group has the power to govern the financial and
operating policies so as to obtain benefits from their activities. The existence and effect of potential
voting rights that are currently exercisable or convertible are considered when assessing whether a Group
controls another entity. The financial statements of the subsidiaries are prepared for the same reporting
period as the parent company, using consistent accounting policies.
In preparing the consolidated
financial statements, all intercompany balances and transactions, income and expenses and profit and
Subsidiaries are fully
losses resulting from intra-group transactions have been eliminated in full.
consolidated from the date on which control is obtained by the Group and cease to be consolidated from
the date on which control is transferred out of the Group.
d)
Significant accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts in the financial statements. Management continually
evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and
expenses. Management bases its judgements and estimates on historical experience and other various
factors it believes to be reasonable under the circumstances, the result of which form the basis of the
carrying values of assets and liabilities that are not readily apparent from other sources. Actual results
may differ from these estimates under different assumptions and conditions.
Management has identified the following critical accounting policies for which significant judgements,
estimates and assumptions are made. Actual results may differ from these estimates under different
assumptions and conditions and may materially affect financial results or the financial position reported in
future periods.
Further details of the nature of these assumptions and conditions may be found in the relevant notes to the
financial statements.
Significant accounting judgements
Impairment of non-financial assets other than goodwill
The Group assesses impairment of all assets at each reporting date by evaluating conditions specific to the
Group and to the particular asset that may lead to impairment. These include product and manufacturing
performance, technology, economic and political environments and future product and service delivery
expectations. If an impairment trigger exists the recoverable amount of the asset is determined. This
involves value in use calculations, which incorporate a number of key estimates and assumptions.
31
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
1.
Summary of Significant Accounting Policies (continued)
Classification of assets and liabilities as held for sale
The Group classifies assets and liabilities as held for sale when its carrying amount will be recovered
through a sale transaction. The assets and liabilities must be available for immediate sale and the Group
must be committed to selling the asset either through the entering into a contractual sale agreement or the
activation and commitment to a program to locate a buyer and dispose of the assets and liabilities.
Capitalised development costs
Development costs are only capitalised by the Group only when the Group can demonstrate the technical
feasibility of completing the intangible asset so that it will be available for use or sale, its intention to
complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the
availability of resources to complete the development and the ability to measure reliably the expenditure
attributable to the intangible asset during its development.
Taxation
The Group's accounting policy for taxation requires management's judgement as to the types of
arrangements considered to be a tax on income in contrast to an operating cost. Judgement is also required
in assessing whether deferred tax assets and certain deferred tax liabilities are recognised in the statement
of financial position. Deferred tax assets, including those arising from unrecouped tax losses, capital
losses and temporary differences, are recognised only where it is considered more likely than not that they
will be recovered, which is dependent on the generation of sufficient future taxable profits. Assumptions
about the generation of future taxable profits depend on management's estimates of future cash flows.
These depend on estimates of future production and sales volumes, operating costs, restoration costs,
capital expenditure, dividends and other capital management transactions. Judgements are also required
about the application of income tax legislation. These judgements and assumptions are subject to risk and
uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may
impact the amount of deferred tax assets and deferred tax liabilities recognised in the statement of
financial position and the amount of other tax losses and temporary differences not yet recognised. In such
circumstances, some or all of the carrying amounts of recognised deferred tax assets and liabilities may
require adjustment, resulting in a corresponding credit or charge to profit or loss.
Significant accounting estimates and assumptions
Estimated impairment of goodwill
The Group determines whether goodwill is impaired at least on an annual basis. This requires an
estimation of the recoverable amount of the cash-generating units, using a value in use discounted cash
flow methodology, to which the goodwill and intangibles with indefinite useful lives are allocated. The
assumptions used in the estimation of recoverable amount and the carrying amount of goodwill including
a sensitivity analysis are discussed in note 11.
Unfavourable contracts
In determining its liability under unfavourable contracts, the Group first assesses which of its contracts are
loss making and then ascertains whether the contract can be renegotiated or cancelled at no cost. In the
event the Group is unsuccessful with an unfavourable contract, a provision is calculated in accordance
with the lesser amount of cancelling the contract and performing its obligation under the contract.
32
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
1. Summary of Significant Accounting Policies (continued)
Long service leave provision
As discussed in note 1(s), the liability for long service leave is recognised and measured at the present
value of the estimated future cash flows to be made in respect of all employees at balance date. In
determining the present value of the liability, attrition rates and pay increases through inflation and
promotion have been taken into account.
Allowance for impairment loss on receivables
Where receivables are outstanding beyond the normal trading terms, the likelihood of recovery of these
receivables is assessed by management. Debts that are considered to be uncollectible are written off when
identified.
Estimation of useful lives of assets
The estimation of useful lives of assets has been based on historical experience (for plant and equipment),
lease terms (for leased equipment) and turnover policies (for motor vehicles). In addition, the condition of
assets is assessed at least once a year and considered against the remaining useful life. Adjustments to
useful life are made when considered necessary. Depreciation charges are disclosed in note 10.
Maintenance warranty
In determining the level of the provision required for warranties, the Group has made judgements in
respect of the expected performance of the products and any liability resulting from installation works.
Historical experience and current knowledge of the performance of products has been used in determining
this provision. The related carrying amounts are disclosed in note 14.
e)
Revenue recognition
Revenue is recognised and measured at the fair value of the consideration received or receivable to the
extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably
measured. The following specific recognition criteria must be met before revenue is recognised:
(i) Sale of goods
Revenue from the sale of goods is recognised when there is persuasive evidence, usually in the form of an
executed sales agreement at the time of delivery of the goods to customer, indicating that there has been a
transfer of risks and rewards to the customer, no further work or processing is required, the quantity and
quality of the goods has been determined, the price is fixed and generally title has passed (for shipped
goods this is the bill of lading date).
(ii) Rendering of services
Revenue is recognised by reference to the stage of completion of a contract. Stage of completion is
measured by reference to labour hours incurred to date as a percentage of total estimated labour hours for
each contract. When the contract outcome cannot be estimated reliably, revenue is recognised only to the
extent of the expenses recognised that are recoverable.
33
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
1.
Summary of Significant Accounting Policies (continued)
(iii) Interest revenue
Interest revenue is recognised as interest accrues using the effective interest rate method. This is a method
of calculating the amortised cost of a financial asset and allocating the interest income over the relevant
period using the effective interest rate, which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
f)
Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the
arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the
use of a specific asset or assets and the arrangement conveys a right to use the asset.
Group as a lessee
Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership
of the leased item, are capitalised at the inception of the lease at the fair value of the leased property or, if
lower, at the present value of the minimum lease payments. Lease payments are apportioned between the
finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the
remaining balance of the liability. Finance charges are recognised as an expense.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the
lease term if there is no reasonable certainty that the Group will obtain ownership by the end of the lease
term.
Operating lease payments are recognised as an expense on a straight-line basis over the lease term. Lease
incentives are recognised as an integral part of the total lease expense.
g)
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand and
short-term deposits with an original maturity of three months or less.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash
equivalents as defined above, net of outstanding bank overdrafts.
h)
Trade and other receivables
Trade receivables, which generally have 30 day terms, are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest rate method, less an allowance for
any uncollectible amounts.
Collectability of trade receivables is reviewed on an ongoing basis. Debts that are known to be
uncollectible are written off when identified. An allowance for doubtful debts is raised when there is
objective evidence that the Group will not be able to collect the receivable. Financial difficulties of the
debtor, default payments or debts more than 90-120 days overdue are considered objective evidence of
impairment. The amount of the impairment loss is the receivable carrying amount compared to the
present value of estimated future cash flows, discounted at the original effective interest rate.
34
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
1. Summary of Significant Accounting Policies (continued)
i)
Inventories
Inventories including raw materials, work-in-progress and finished goods are valued at the lower of cost
and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
Raw materials – purchase cost on a first-in, first-out basis. The cost of purchase comprises the
purchase price, import duties and other taxes (other than those subsequently recoverable by the entity
from the taxing authorities), transport, handling and other costs directly attributable to the acquisition
of raw materials and volume discounts and rebates.
Finished goods and work-in-progress – cost of direct materials and labour and a proportion of
variable and fixed manufacturing overheads based on normal operating capacity but excluding
borrowing costs.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion and the estimated costs necessary to make the sale.
j)
Income tax and other taxes
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to
be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the
amount are those that are enacted or substantively enacted by the balance date.
Deferred income tax is provided on all temporary differences at the balance date between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
When the deferred income tax liability arises from the initial recognition of goodwill or of an asset or
liability in a transaction that is not a business combination and that, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss; or
When the taxable temporary difference is associated with investments in subsidiaries and the timing
of the reversal of the temporary difference can be controlled and it is probable that the temporary
difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences and unused tax losses,
to the extent that is probable that taxable profit will be available against which the deductible temporary
differences and the carry forward of unused tax credits and unused tax losses can be utilised, except:
When the deferred income tax asset relating to the deductible temporary difference arises from the
initial recognition of an asset or liability in a transaction that is not a business combination and, at the
time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
When the deductible temporary difference is associated with investments in subsidiaries in which
case a deferred tax asset is only recognised to the extent that it is probable that the temporary
difference will reverse in the foreseeable future and taxable profit will be available against which the
temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the
deferred income tax asset to be utilised.
35
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
1.
Summary of Significant Accounting Policies (continued)
Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the
extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the balance date.
Income taxes relating to items recognised directly in equity are recognised in equity.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off
current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same
taxable entity and the same taxation authority.
Tax consolidation
The Company and all its wholly owned Australian entities are part of a tax consolidated group as of 1 July
2005 under Australian taxation law.
Traffic Technologies Ltd is the head entity in the tax consolidated group. Tax expense/income, deferred tax
liabilities and deferred tax assets arising from temporary differences of the members of the tax consolidated
group are recognised in the separate financial statements of the members of the tax consolidated group
using the ‘stand alone taxpayer’ approach by reference to the carrying amounts in the separate financial
statements of each entity and the tax values applying under tax consolidation. 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 are recognised by the Company (as head entity in the tax consolidated group).
Due to the existence of a tax funding arrangement between the entities in the tax consolidated group,
amounts are recognised as payable to or receivable by the Company and each member of the Group in
relation to the tax contribution amounts paid or payable between the parent entity and the other members of
the tax consolidated group in accordance with the arrangement. Further information about the tax funding
arrangement is detailed in note 4 to the financial statements. Where the tax contribution amount recognised
by each member of the tax consolidated group for a particular period is different to the aggregate of the
current tax liability or asset and any deferred tax asset arising from unused tax losses and tax credits in
respect of that period, the difference is recognised as a contribution from (or distribution to) equity
participants.
Other taxes
Revenues, expenses and assets are recognised net of the amount of Goods and Services Tax (GST) except:
When the GST incurred on a purchase of goods and services is not recoverable from the taxation
authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of
the expense item as applicable; and
Receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash
flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation
authority, are classified as operating cash flows.
36
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
1. Summary of Significant Accounting Policies (continued)
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to,
the taxation authority.
k) Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and any accumulated
impairment losses. Such cost includes the cost of replacing parts that are eligible for capitalisation when the
cost of replacing the parts is incurred. Similarly, when each major inspection is performed, its cost is
recognised in the carrying amount of the plant and equipment as a replacement only if it is eligible for
capitalisation. All other repairs and maintenance are recognised in profit or loss as incurred.
Buildings are measured at cost less accumulated depreciation on buildings.
Depreciation is calculated on a straight-line basis over the estimated useful life of the specific assets as
follows:
Buildings
Leasehold improvements
Office furniture and fittings
Office furniture and fittings under finance lease
Motor vehicles
Motor vehicles under finance lease
2011
40 years
10 years
4 to 10 years
4 to 10 years
8 years
8 years
2010
40 years
10 years
4 to 10 years
4 to 10 years
8 years
8 years
Plant and equipment, including signage
1 to 15 years
1 to 15 years
The assets' residual values, useful lives and amortisation methods are reviewed and adjusted, if appropriate,
at each financial year end.
Derecognition
An item of property, plant and equipment is derecognised upon disposal or when no further future economic
benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset
(calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is
included in profit or loss in the year the asset is derecognised.
l) Assets held for sale and discontinued operations
Assets are classified as held for sale and measured at the lower of their carrying amount and fair value less
costs to sell if their carrying amount will be recovered principally through a sale transaction. They are not
depreciated or amortised. For an asset to be classified as held for sale it must be available for immediate
sale in its present condition and its sale must be highly probable.
An impairment loss is recognised for any initial or subsequent write down of the asset to fair value less
costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset, but
not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously
recognised by the date of the sale of the sale of the non-current asset is recognised at the date of
derecognition.
37
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
1. Summary of Significant Accounting Policies (continued)
A discontinued operation is a component of the entity that has been disposed of or is classified as held for
sale and that represents a separate major line of business or geographical area of operations, is part of a
single coordinated plan to dispose of such a line of business or area of operations or is a subsidiary acquired
exclusively with a view to resale. The results of discontinued operations are presented separately in profit or
loss and the assets and liabilities are presented separately in the statement of financial position.
m) Goodwill
Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of the
business combination over the Group’s interest in the net fair value of the acquiree's identifiable assets,
liabilities and contingent liabilities.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.
Goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances
indicate that the carrying value may be impaired.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition
date, allocated to each of the Group’s cash-generating units, or groups of cash-generating units, that are
expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities
of the Group are assigned to those units or groups of units. Each unit or group of units to which the
goodwill is so allocated:
represents the lowest level within the Group at which the goodwill is monitored for internal
management purposes; and
is not larger than an operating segment determined in accordance with AASB 8 Segment Reporting.
Impairment is determined by assessing the recoverable amount of the cash-generating unit (group of cash-
generating units) to which the goodwill relates.
The Group performs its impairment testing as at 30 June each year using a value in use, discounted cash
flow methodology for its cash-generating units to which goodwill has been allocated. Impairment testing
may be performed at other dates where an indicator of impairment exists.
When the recoverable amount of the cash-generating unit (group of cash-generating units) is less than the
carrying amount, an impairment loss is recognised. When goodwill forms part of a cash-generating unit
(group of cash-generating units) and an operation within that unit is disposed of, the goodwill associated
with the operation disposed of is included in the carrying amount of the operation when determining the
gain or loss on disposal of the operation. Goodwill disposed of in this manner is measured based on the
relative values of the operation disposed of and the portion of the cash-generating unit retained.
Impairment losses recognised for goodwill are not subsequently reversed.
38
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
1. Summary of Significant Accounting Policies (continued)
n)
Intangible assets
Intangible assets acquired separately or in a business combination are initially measured at cost. The cost of
an intangible asset acquired in a business combination is its fair value as at the date of acquisition.
Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any
accumulated impairment losses. Internally generated intangible assets, excluding capitalised development
costs, are not capitalised and expenditure is recognised in profit or loss in the year in which the expenditure
is incurred.
The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite
lives are amortised over the useful life and tested for impairment whenever there is an indication that the
intangible asset may be impaired (see note 1(o) for methodology). The amortisation period and the
amortisation method for an intangible asset with a finite useful life is reviewed at least at each financial
year-end. Changes in the expected useful life or the expected pattern of consumption of future economic
benefits embodied in the asset are accounted for prospectively by changing the amortisation period or
method, as appropriate, which is a change in accounting estimate. The amortisation expense on intangible
assets with finite lives is recognised in profit or loss.
Development Expenditure
Research costs are expensed as incurred. An intangible asset arising from development expenditure on an
internal project is recognised only when the Group can demonstrate the technical feasibility of completing
the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use
or sell the asset, how the asset will generate future economic benefits, the availability of resources to
complete the development and the ability to measure reliably the expenditure attributable to the intangible
asset during its development. Following the initial recognition of the development expenditure, the cost
model is applied requiring the asset to be carried at cost less any accumulated amortisation and accumulated
impairment losses.
Any expenditure so capitalised is amortised over the period of expected benefit from the related project.
Any expenditure so capitalised is amortised over the period of expected benefit from the related project
which is generally 5 years (2010: 5 years). The amortisation has been recognised in profit or loss in the line
item ‘depreciation, amortisation and impairment expense’.
The carrying value of an intangible asset arising from development expenditure is tested for impairment
annually when the asset is not yet available for use, or more frequently when an indication of impairment
arises during the reporting period.
Type approval certification
Type approval certification internally generated or acquired in a business combination is carried at cost less
accumulated amortisation and accumulated impairment losses and is amortised using the straight line
method over a period of 5 years (2010: 5 years). Type approval certification represents the Group’s
‘licence’ to sell its light-emitting diode (“LED”) traffic light signals and other products.
Brand names
Brand names acquired in business combinations are assessed to have a finite life and are amortised over a
period of 10 years (2010: 10 years).
39
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
1. Summary of Significant Accounting Policies (continued)
Patents and trademarks
Patents and trademarks acquired separately or in a business combination are initially measured at cost. The
cost of an intangible asset acquired in a business combination is its fair value as at the date of acquisition.
Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any
accumulated impairment losses.
Patents and trademarks are amortised on a straight line basis over a period of 3-10 years (2010: 3-10 years).
Customer contracts and relationships
Customer contracts and relationships acquired in a business combination are carried at cost less
accumulated amortisation and accumulated impairment losses. These intangible assets have been assessed
as having a finite life and are amortised using the straight line method over their existing contract life and
existing customer base. The amortisation has been recognised in profit or loss in the line item ‘depreciation,
amortisation and impairment expense’.
Software development
Purchased software development is assessed to have a finite life and is amortised over a period of 1-4 years
(2010: 1-4 years).
o)
Impairment of non-financial assets other than goodwill
Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment, or more frequently if events or changes in circumstances indicate that they might be impaired.
Other assets are tested for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable.
The Group conducts an annual internal review of asset values, which is used as a source of information to
assess for any indicators of impairment. External factors, such as changes in expected future processes,
technology and economic conditions, are also monitored to assess for indicators of impairment. If any
indication of impairment exists, an estimate of the asset's recoverable amount is calculated.
An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its
recoverable amount. Recoverable amount is the higher of an asset's fair value less costs to sell and value in
use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash inflows that are largely independent of the cash inflows from other assets or
groups of assets (cash-generating units). Non-financial assets other than goodwill that have suffered an
impairment are tested for possible reversal of the impairment whenever events or changes in circumstances
indicate that the impairment may have reversed.
p) Trade and other payables
Trade and other payables are carried at amortised cost due to their short term nature and are not discounted.
They represent liabilities for goods and services provided to the Group prior to the end of the financial year
that are unpaid and arise when the Group becomes obliged to make future payments in respect of the
purchase of these goods and services. The amounts are unsecured and are usually paid within 60 days of
recognition.
40
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
1. Summary of Significant Accounting Policies (continued)
q)
Interest bearing loans and borrowings
All loans and borrowings are initially recognised at the fair value of the consideration received less directly
attributable transaction costs. After initial recognition, interest bearing loans and borrowings are
subsequently measured at amortised cost using the effective interest rate method. Fees paid on the
establishment of loan facilities that are yield related are included as part of the carrying amount of the loans
and borrowings.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after balance date.
r) Derivative financial instruments and hedging
The Group uses derivative financial instruments to hedge its interest rate risk exposures, including interest
rate swaps and interest rate caps.
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are
subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in
profit or loss immediately.
Derivatives are carried as assets when their fair value is positive and as liabilities when their fair value is
negative.
The fair values of forward currency contracts are calculated by reference to current forward exchange rates
for contracts with similar maturity profiles. The fair values of interest rate swap contracts and interest rate
cap contracts are determined by reference to market values for similar instruments.
s) Provisions and employee benefits
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and a reliable estimate can be made of the amount of the obligation.
When the Group expects some or all of a provision to be reimbursed, for example under an insurance
contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually
certain. The expense relating to any provision is presented in profit or loss net of any reimbursement.
Provisions are measured at the present value of management's best estimate of the expenditure required to
settle the present obligation at balance date using a discounted cash flow methodology. The risks specific to
the provision are factored into the cash flows and as such a risk-free government bond rate relative to the
expected life of the provision is used as a discount rate. If the effect of the time value of money is material,
provisions are discounted using a current pre-tax rate that reflects the time value of money and the risks
specific to the liability. The increase in the provision resulting from the passage of time is recognised in
finance costs.
41
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
1. Summary of Significant Accounting Policies (continued)
Employee leave benefits
(i)
Wages, salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled
within 12 months of the reporting date are recognised in current payroll liabilities (note 12) and current
provisions (note 14) in respect of employees’ services up to the balance date. They are measured at the
amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are
recognised when the leave is taken and are measured at the rates paid or payable.
(ii)
Long service leave
The liability for long service leave is recognised in the provision for employee benefits and is measured as
the present value of expected future payments to be made in respect of services provided by employees up
to the balance date using the projected unit credit method. Consideration is given to expected future wage
and salary levels, experience of employee departures and periods of service. Expected future payments are
discounted using market yields at the balance date on national government bonds with terms to maturity and
currencies that match, as closely as possible, the estimated future cash outflows.
t) Foreign currency translation
(i) Functional and presentation currency
The individual financial statements of each Group entity are presented in the currency of the primary
economic environment in which the entity operates (its functional currency). The consolidated financial
statements, are presented in Australian dollars, which is the functional and presentation currency of the
Group.
(ii) Transactions & balances
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange
rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies
are retranslated at the rate of exchange ruling at the balance date. Non-monetary items that are measured in
terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the
initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value was determined.
u) Share-based payment transactions
Equity settled transactions
The Group provides benefits to employees (including key management personnel) in the form of share-
based payments, whereby employees render services in exchange for shares or rights over shares (equity-
settled transactions).
The cost of these equity-settled transactions with employees is measured by reference to the fair value of the
equity instruments at the date at which they are granted.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over
the period in which the performance and/or service conditions are fulfilled (the vesting period), ending on
the date on which the relevant employees become fully entitled to the award (the vesting date).
The charge to profit or loss for the period is the cumulative amount as calculated above less the amounts
already charged in previous periods. There is a corresponding entry to equity.
42
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
1.
Summary of Significant Accounting Policies (continued)
v) Contributed equity
Convertible non-cumulative redeemable preference shares
The component of convertible non-cumulative redeemable preference shares that exhibits characteristics of
a liability is recognised as a liability in the statement of financial position, net of transaction costs.
On issuance of the convertible redeemable preference shares, the fair value of the liability component is
determined using a market rate for an equivalent non-convertible bond and this amount is carried as a long-
term liability on the amortised cost basis until extinguished on conversion or redemption.
The remainder of the proceeds is allocated to the conversion option that is recognised and included in
shareholders’ equity, net of transaction costs. The carrying amount of the conversion option is not re-
measured in subsequent years.
Ordinary Shares
Ordinary shares are classified as contributed equity. Incremental costs directly attributable to the issue of
new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
w) Earnings per share
Basic earnings per share is calculated as net profit/loss attributable to members of the parent entity, adjusted
to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by
the weighted average number of ordinary shares.
Diluted earnings per share is calculated as net profit/loss attributable to members of the parent entity,
adjusted for:
costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have
been recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the
dilution of potential ordinary shares, divided by the weighted average number of ordinary shares and
dilutive potential ordinary shares, adjusted for any bonus element.
x) Business combinations
Business combinations are accounted for using the acquisition method. The acquisition method of
accounting involves recognising at acquisition date, separately from goodwill, the identifiable assets
acquired, the liabilities assumed and any non-controlling interest in the acquiree. The identifiable assets
acquired and the liabilities assumed are measured at their acquisition date fair values.
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 acquirer, the liabilities incurred by the
acquirer to former owners of the acquiree and the equity issued by the acquirer and the amount of any non-
controlling interest in the acquiree. For each business combination, the acquirer measures the non-
controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree's
identifiable net assets. Acquisition-related costs are expensed as incurred.
43
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
1. Summary of Significant Accounting Policies (continued)
The difference between the above items and the fair value of the consideration (including the fair value of
any pre-existing investment in the acquiree) is goodwill or a discount on acquisition.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic conditions, the Group’s
operating or accounting policies and other pertinent conditions as at the acquisition date. If the business
combination is achieved in stages, the acquisition date fair value of the acquirer's previously held equity
interest in the acquiree is remeasured at fair value as at the acquisition date through the statement of
comprehensive income.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the
acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be
an asset or liability will be recognised in accordance with AASB 139 in profit or loss. If the contingent
consideration is classified as equity, it will not be remeasured.
y) Operating segments
An operating segment is a component of an entity that engages in business activities from which it may earn
revenues and incur expenses (including revenues and expenses relating to transactions with other
components of the same entity), whose operating results are regularly reviewed by the entity's chief
operating decision maker to make decisions about resources to be allocated to the segment and assess its
performance and for which discrete financial information is available. Management will also consider other
factors in determining operating segments such as the existence of a line manager and the level of segment
information presented to the Board of Directors.
Operating segments have been identified based on the information provided to the chief operating decision
maker. The Group aggregates two or more operating segments when they have similar economic
characteristics and the segments are similar in each of the following respects:
Nature of the products and services;
Nature of the production processes;
Type or class of customer for the products and services;
Methods used to distribute the products or provide the services; and
Nature of the regulatory environment.
Operating segments that meet the quantitative criteria as prescribed by AASB 8 are reported separately.
However, an operating segment that does not meet the quantitative criteria is still reported separately where
information about the segment would be useful to users of the financial statements. Information about other
business activities and operating segments that are below the quantitative criteria are combined and
disclosed in a separate category for “all other segments”.
44
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
2. Revenues
(a) Revenue
Continuing operations
Sale of goods
Rendering of services
Bank interest receivable
Discontinued operations
Rendering of services
Total revenue
(b) Other income
Fair value of interest rate contracts
Net gain on disposal of fixed assets
Other income
Consolidated Consolidated
2011
$’000
2010
$’000
47,655
2,005
67
49,727
43,989
3,740
72
47,801
4,229
44,184
53,956
91,985
182
12
151
345
330
45
5
380
45
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
3.
Expenses
(a) Employee related expenses
Wages and salaries
Superannuation (defined contribution)
Other employee benefits expense
Share-based payment expense
(b) Other expenses
Administrative costs
Public company costs
(c) Non-recurring items
Costs in relation to prior year business combinations
Consultancy costs – assessment of non-core assets
Consultancy costs - other
Redundancy costs
EGM costs
Lease termination costs
Legal costs*
Other
* Relate to dispute with Build 1 (Qld) Pty Ltd which was settled in April 2011.
Consolidated
2011
$’000
Consolidated
2010
$’000
9,007
947
6,969
-
16,923
805
255
1,060
180
-
3
172
-
18
493
33
899
11,370
970
4,665
7
17,012
2,002
675
2,677
41
342
76
173
294
18
-
11
955
46
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
3.
Expenses (continued)
(d) Depreciation, amortisation and
impairment expense
Depreciation of non-current assets:
Plant and equipment
Office furniture and fittings
Motor vehicles
Land and Buildings
Leasehold improvements
Amortisation of non-current assets:
Development costs
Type approvals
Software costs
Patents and trademarks
Brand names
Impairment of non-current assets:
Other financial assets
Development costs
Total depreciation, amortisation and impairment
expense
(e) Finance costs
Amortisation of capitalised transaction costs
Bank loans and overdrafts
Lease interest
Other
Total finance costs
(f) Research and development costs
Research and development costs charged directly to
cost of sales in profit or loss
47
Consolidated
2011
$’000
Consolidated
2010
$’000
672
78
148
8
17
923
279
520
236
51
48
1,134
-
-
-
686
107
120
8
40
961
301
314
277
135
47
1,074
67
84
151
2,057
2,186
210
3,460
49
55
3,774
160
3,803
41
48
4,052
66
57
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
4.
Income Tax
(a) Income tax expense / (benefit)
Consolidated
2011
$’000
Consolidated
2010
$’000
The major components of income tax expense / (benefit) are:
Statement of Comprehensive Income
Current income tax
Current income tax charge / (benefit)
Adjustment recognised in the current year in relation to the current
tax of prior years
Deferred income tax
Relating to origination and reversal of temporary differences
Derecognition of tax losses
Income
comprehensive income
tax expense/(benefit)
statement of
reported
the
in
(b) Numerical reconciliation between aggregate tax expense
recognised in the statement of comprehensive income and tax
expense calculated per the statutory income tax rate
Accounting loss before income tax from continuing operations
Accounting profit before income tax from discontinued operations
Prima facie income tax expense /(benefit) at the Group’s statutory
income tax rate of 30% (2010: 30%)
Incidental on sale of assets
Gain on sale of fixed assets
Current losses not recognised
Under provision in respect of fixed assets
Over provision for income tax in prior years
Benefit arising from previously unrecognised tax losses of a prior
period that is used to reduce probable future income tax
Share-based payment (equity settled)
Amortisation of other intangible assets
Impairment of non-current assets
(Income) / expenses that are not deductible in determining taxable
profit
Deferred tax expense / (income) relating to origination and reversal
of temporary differences
Temporary differences now derecognised / (recognised) as deferred
tax assets/liabilities
Aggregate income tax expense / (benefit)
Aggregate income tax expense / (benefit) is attributable to:
Continuing operations
Discontinued operations
Income tax expense / (benefit)
48
-
-
(454)
-
(454)
(678)
806
128
38
101
(374)
868
196
(1,404)
-
-
-
-
121
-
-
(454)
(654)
200
(454)
-
-
93
-
93
(2,704)
2,543
(161)
(48)
-
-
-
-
-
93
2
293
45
68
-
(360)
93
218
(125)
93
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
4.
Income Tax (continued)
(c) Deferred tax balances
Deferred tax assets/(liabilities) arise from the following:
Charged/
(credited) to
income
$’000
Consolidated
Charged to
equity
Disposals
Closing balance
$’000
$’000
$’000
(35)
167
302
(3)
(51)
23
(5)
(108)
(33)
11
186
454
-
454
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(282)
-
-
-
-
-
-
-
-
(282)
-
(282)
(1,070)
167
585
30
-
98
2
22
13
455
186
488
-
488
(1,121)
1,609
488
30 June 2011
Temporary differences
Intangible assets
Property, plant and
equipment
Employee provisions
Warranty provisions
Unfavourable contract
provision
Inventory provisions
Doubtful debts
Credit notes
Unclaimed share issue costs
Accruals
Capital expenditure
Unused tax losses
Opening
balance
$’000
(1,035)
-
565
33
51
75
7
130
46
444
-
316
-
316
Presented in the statement of financial position as follows:
Deferred tax liability
Deferred tax assets
49
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
4.
Income Tax (continued)
30 June 2010
Temporary differences
Intangible assets
Property, plant and
equipment
Employee provisions
Warranty provisions
Restructuring provisions
Unfavourable contract
provision
Inventory provisions
Doubtful debts
Credit notes
Unclaimed share issue costs
Accruals
Unused tax losses
Opening
balance
$’000
Charged/
Credited) to
income
$’000
(915)
(120)
-
573
34
19
53
44
6
31
73
470
388
-
388
-
(8)
(1)
(19)
(2)
31
1
99
(48)
(26)
(93)
-
(93)
Presented in the statement of financial position as follows:
Deferred tax liability
Deferred tax assets
The following deferred tax assets and deferred tax
liabilities have not been brought to account as assets:
Property, Plant and Equipment
Inventory Provisions
Doubtful debts
Accruals and employee provisions
Tax losses – revenue
Tax losses – capital
Total deferred tax assets
Consolidated
Charged to
equity
Disposals
Closing balance
$’000
$’000
$’000
-
-
-
-
-
-
-
-
-
21
-
21
-
21
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,035)
-
565
33
-
51
75
7
130
46
444
316
-
316
(1,035)
1,351
316
Consolidated
2011
$’000
Consolidated
2010
$’000
-
-
-
-
4,930
100
5,030
921
36
87
595
4,062
100
5,801
“Tax losses – revenue” are available to carry forward against future “taxable profits – revenue” (but not against capital related
profits) without expiry.
50
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
4.
Income Tax (continued)
Unrecognised temporary differences
At 30 June 2011 there are no unrecognised temporary differences associated with the Group’s investment in
subsidiaries or associates as the Group has no liability for additional taxation should unremitted earnings be remitted
(2010: $nil).
(d)
Tax consolidation
Traffic Technologies Ltd and its 100% owned Australian resident subsidiaries formed a tax consolidated group with
effect from 1 July 2005 and are therefore taxed as a single entity from that date. The head entity within the tax
consolidated group is Traffic Technologies Ltd. Each wholly owned subsidiary of Traffic Technologies Ltd is a
member of the tax consolidated group, as identified at note 22.
(e)
Nature of tax funding and tax sharing agreements
Entities within the tax consolidated group have entered into a tax funding arrangement and a tax sharing arrangement
with the head entity. Under the terms of the tax funding arrangement, Traffic Technologies Ltd and each of the
entities in the tax consolidated group has agreed to pay a tax equivalent payment to or from the head entity, based on
the current tax liability or current tax asset of the entity. Such amounts are reflected in amounts receivable from or
payable to other entities in the tax consolidated group.
The tax sharing agreement entered into between members of the tax consolidated group provides for the
determination of the allocation of income tax liabilities between the entities should the head entity default on its tax
payment obligations or if an entity should leave the tax consolidated group. The effect of the tax sharing agreement
is that each member’s liability for the tax payable by the tax consolidated group is limited to the amount payable to
the head entity under the tax funding agreement.
51
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
5.
Earnings per Share
The following reflects the income and share data used in the basic and diluted earnings per share computations:
(a) Earnings used in calculating earnings per share
Consolidated
Consolidated
For basic and diluted earnings per share:
Net loss from continuing operations attributable to ordinary equity holders
of the parent
Profit attributable to discontinued operations
Net profit/(loss) attributable to ordinary equity holders of the parent
(b) Weighted average number of shares
Weighted average number of ordinary shares used in calculating basic
earnings per share
Effect of dilution:
Share options
Redeemable preference shares
Weighted average number of ordinary shares adjusted for the effect of
dilution
2011
$’000
2010
$’000
(24)
606
582
(2,922)
2,668
(254)
Consolidated
Consolidated
2011
Thousands
2010
Thousands
171,109
144,639
-
-
-
29,367
171,109
174,006
There are no instruments (e.g. share options) excluded from the calculation of diluted earnings per share that
could potentially dilute earnings per share in the future because they are anti-dilutive for 2011. For 2010 the
redeemable preference shares were excluded from the calculation of diluted earnings per share because they
were anti-dilutive.
There have been no other transactions involving ordinary shares or potential ordinary shares between the
reporting date and the date of completion of these financial statements.
(c) Weighted average number of shares
(i) Options
Options granted to employees (including KMP) as described in note 17 are considered to be potential ordinary
shares and have been included in the determination of diluted earnings per share to the extent they are dilutive.
These options have not been included in the determination of basic earnings per share.
(ii) Redeemable preference shares
The redeemable preference shares as described in note 15 are considered to be potential ordinary shares and
have been included in the determination of diluted earnings per share to the extent they are dilutive. These
shares have not been included in the determination of basic earnings per share.
52
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
6. Discontinued operations
(a) Details of operations disposed
On 29 June 2010 the Group entered into a sale agreement to dispose of its Traffic Management business and assets
(“Traffic Management”), a business which was involved in the hiring out of traffic controllers to road authorities,
contractors and local councils. The disposal was completed on 9 August 2010, on which date control of the business
passed to the acquirer.
(b) Financial performance of operations disposed
The results of discontinued operations for the year until disposal are presented below:
Revenue
Other income
Expenses
EBITDA before non-recurring items
Non-recurring items
Depreciation and amortisation expenses
Finance costs
(Loss) / profit before tax from discontinued operations
Income tax (expense) / benefit
(Loss) / profit after tax from discontinued operations
Gain on sale before income tax
Income tax expense
Gain on sale after income tax
Traffic Management
2011
$’000
4,229
1
(4,556)
(326)
-
(94)
(21)
(441)
(200)
(641)
1,247
-
1,247
2010
$’000
44,184
44
(40,277)
3,951
(42)
(1,182)
(184)
2,543
125
2,668
-
-
-
Profit from discontinued operations
606
2,668
(c) Assets and liabilities and cash flow information of discontinued operations
The major classes of assets and liabilities disposed of in the year ended 30 June 2011 (2010: held for sale) were:
Traffic Management
Assets
Prepayments
Property, plant and equipment
Intangibles
Other financial assets
Deferred tax asset
Assets classified as discontinued operations
Liabilities
Other payables
Finance lease liabilities
Employee entitlements
Liabilities directly associated with assets classified as discontinued operations
Net assets attributable to discontinued operations
53
2011
Disposed of
$’000
2010
Held for sale
$’000
52
3,295
9,626
124
283
13,380
89
2,514
965
3,568
9,812
52
3,315
9,680
124
-
13,171
88
2,567
942
3,597
9,574
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
6.
Discontinued operations (continued)
The net cash flows of discontinued operations are as follows:
Operating activities
Investing activities
Financing activities
Net cash outflow
Consideration received:
Net cash consideration
Less transaction costs
Less net assets disposed
Gain on disposal before income tax expense
Income tax expense
Gain on disposal after income tax expense
Net cash flow on disposal
Cash and cash equivalents consideration
Reflected in the statement of cash flows
7.
Trade and Other Receivables (Current)
Trade receivables
Allowance for impairment loss (a)
Prepayments
Other receivables
2011
$’000
2010
$’000
4,918
-
-
4,918
3,339
(637)
(2,749)
(47)
2011
$’000
2010
$’000
11,400
(341)
(9,812)
1,247
-
1,247
11,400
11,400
-
-
-
-
-
-
-
-
Consolidated
2011
$’000
Consolidated
2010
$’000
11,464
(8)
11,456
570
152
12,178
16,310
(28)
16,282
784
224
17,290
(a)
Allowance for impairment loss – trade receivables
Trade receivables are non-interest bearing, are generally on 30 day terms and can vary depending on any individual
contract. An allowance for impairment loss is recognised when there is objective evidence that an individual trade
receivable is impaired. A net impairment loss of $8,166 (2010: $28,000) has been recognised by the Group. This
amount has been included in the administration costs line item, within other expenses. The amount of the allowance
for impairment loss has been measured as the difference between the carrying amount of the trade receivables and
the estimated future cash flows expected to be received from the relevant debtors.
54
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
7.
Trade and Other Receivables (Current) - (continued)
Movements in the allowance for impairment loss were as follows:
Balance at the beginning of the year
Charge for the year
Amounts written off as uncollectible
Amounts recovered during the year
Allowance no longer required
Balance at the end of the year
At 30 June, the ageing analysis of trade receivables was as follows:
Consolidated
2011
$’000
Consolidated
2010
$’000
28
8
-
(4)
(24)
8
20
28
-
-
(20)
28
TOTAL
Not
past
due
$’000
1 – 30
days
PDNI*
$’000
1 – 30
days
CI*
$’000
31 – 60
days
PDNI*
$’000
31 – 60
days
CI*
$’000
+ 61
days
PDNI*
$’000
+ 61
days
CI*
$’000
2011
Group
11,464
8,315
2,337
2010
Group
16,310
8,667
5,485
-
-
482
1,173
-
-
322
957
8
28
* - Table Legend
Past due not impaired (PDNI)
Considered impaired (CI)
Receivables past due but not considered impaired are: Group $3,141,000 (2010: $7,615,000). Payment terms on
these amounts have not been renegotiated; however credit has been stopped until full payment is made. Each
operating unit has been in direct contact with the relevant debtor and is satisfied that payment will be received in full.
Other balances within trade and other receivables do not contain impaired assets and are not past due. It is expected
that these other balances will be received when due.
(b)
Fair value and credit risk
Due to the short term nature of trade and other receivables, their carrying value is assumed to approximate their fair
value. The maximum exposure to credit risk is the fair value of receivables. Collateral is not held as security, nor is
it the Group’s policy to transfer (on-sell) receivables to special purpose entities.
(c)
Foreign exchange and interest rate risk
Details regarding foreign exchange and interest rate risk exposure are disclosed in note 18.
55
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
8.
Inventories (Current)
Raw materials
Work in progress
Finished goods
Consolidated
2011
$’000
Consolidated
2010
$’000
4,252
214
3,421
7,887
3,259
229
3,749
7,237
Inventory write-downs recognised as an expense totalled $60,000 (2010: $42,154) for the Group. During the year,
inventory write-downs of $104,000 were reversed following the disposal of associated aged/impaired inventory
(2010: $75,000). This expense/benefit is included in the statement of comprehensive income in changes in
inventories of finished goods and work in progress.
9. Other Financial Assets (Non-current)
Listed investments, at market value
Consolidated
2011
$’000
Consolidated
2010
$’000
1
1
1
1
56
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
10. Property, Plant and Equipment
Consolidated
2011
$’000
Consolidated
2010
$’000
8,447
(3,871)
4,576
8,122
(3,255)
4,867
170
(5)
165
1,090
(945)
145
459
(280)
179
256
(96)
160
200
(46)
154
691
(581)
110
-
-
-
1,053
(905)
148
584
(307)
277
235
(104)
131
200
(38)
162
677
(563)
114
11,313
(5,824)
5,489
10,871
(5,172)
5,699
a) Carrying values
Plant and equipment:
At cost
Accumulated depreciation*
Total plant and equipment
Plant and equipment under
lease:
At cost
Accumulated depreciation*
Total plant and equipment
Office furniture and fittings
At cost
Accumulated depreciation*
Total office furniture and fittings
Motor vehicles
At cost
Accumulated depreciation*
Total motor vehicles
Motor vehicles under lease
At cost
Accumulated depreciation*
Total motor vehicles under lease
Buildings
At cost
Accumulated depreciation
Total land and buildings
Leasehold improvements
At cost
Accumulated depreciation*
Total leasehold improvements
Total property, plant and
equipment
At cost
Accumulated depreciation*
Total net book value
* - Includes impairment
57
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
10.
Property, Plant and Equipment (continued)
b) Reconciliation of carrying amounts at the beginning and end of period
CONSOLIDATED
Year ended 30 June 2011
Balance at the beginning of the year,
net of accumulated depreciation
Additions
Disposals
Depreciation expense as part of
continuing operations
Balance at the end of the year, net of
accumulated depreciation
Year ended 30 June 2010
Balance at the beginning of the year,
net of accumulated depreciation
Additions
Disposals
Depreciation expense as part of
continuing operations
Depreciation expense as part of
discontinued operations
Assets transferred to discontinued
operations
Balance at the end of the year, net of
accumulated depreciation
Plant &
Equipment
$’000
Plant &
Equipment
under lease
$’000
Office
furniture &
fittings
$’000
Office
equipment
under lease
$’000
Motor
vehicles
$’000
Motor
vehicles
under lease
$’000
Leasehold
improveme
nts
$’000
Total
$’000
Buildings
$’000
4,867
376
-
(667)
4,576
5,686
916
(29)
(686)
(575)
(445)
4,867
-
170
-
(5)
165
-
-
-
-
-
-
-
148
75
-
(78)
145
384
67
-
(107)
(69)
(127)
148
-
-
-
-
-
23
19
-
-
(16)
(26)
-
277
12
(38)
(72)
179
578
82
(31)
(83)
(85)
(184)
277
131
105
-
(76)
160
2,431
607
(54)
(37)
(350)
(2,466)
162
-
-
(8)
154
170
-
-
(8)
-
-
131
162
114
13
-
(17)
110
229
6
-
(40)
(15)
(66)
114
5,699
751
(38)
(923)
5,489
9,501
1,697
(114)
(961)
(1,110)
(3,314)
5,699
58
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
10.
Property, Plant and Equipment (continued)
c) Property, plant and equipment pledged as security for liabilities
Leased assets are pledged as security for the related finance lease liabilities.
The Group’s property, plant and equipment is pledged as security against the borrowings with Westpac Bank as
disclosed in note 13.
11.
Intangible Assets
a) Carrying values
Development costs
At cost
Accumulated amortisation
Accumulated impairment
Type approval certification
At cost
Accumulated amortisation
Software costs
At cost
Accumulated amortisation
Patents and trademarks
At cost
Accumulated amortisation
Brand names
At cost
Accumulated amortisation
Goodwill
At cost
Accumulated impairment
Total intangibles
At cost
Accumulated amortisation*
Total net book value
* - Includes impairment
59
Consolidated
2011
$’000
Consolidated
2010
$’000
2,655
(722)
(400)
1,533
3,267
(1,640)
1,627
901
(598)
303
239
(109)
130
477
(199)
278
33,023
(2,488)
30,535
40,562
(6,156)
34,406
2,566
(443)
(400)
1,723
2,393
(1,120)
1,273
613
(362)
251
191
(58)
133
477
(151)
326
33,023
(2,488)
30,535
39,263
(5,022)
34,241
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
11.
Intangible Assets (continued)
b) Reconciliation of carrying amounts at the beginning and end of period
Development
Costs*
$’000
Type
Approval
$’000
Software
Costs
$’000
Consolidated
Patents and
Trademarks
$’000
Brands
Goodwill
TOTAL
$’000
$’000
$’000
At 1 July 2010 net book value
Additions
Disposals
Amortisation as part of continuing
operations
At 30 June 2011 net book value
At 1 July 2009 net book value
Additions
Disposals
Amortisation as part of continuing
operations
Amortisation as part of discontinued
operations
Impairment
Assets transferred to discontinued
operations
1,723
89
-
(279)
1,533
920
1,205
(17)
(301)
-
(84)
-
1,273
874
-
(520)
1,627
1,587
-
-
(314)
-
-
-
At 30 June 2010 net book value
1,723
1,273
*- Internally generated intangible asset
133
48
-
(51)
130
175
93
-
(135)
-
-
-
326
-
-
(48)
278
373
-
-
(47)
-
-
-
30,535
-
-
-
30,535
40,162
-
-
-
-
-
34,241
1,299
-
(1,134)
34,406
43,641
1,528
(17)
(1,074)
(72)
(84)
(9,627)
(9,681)
133
326
30,535
34,241
251
288
-
(236)
303
424
230
-
(277)
(72)
-
(54)
251
60
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
11.
Intangible Assets (continued)
c) Description of the Group’s intangible assets and goodwill
(i) Development costs
Development costs, including type approval work-in-progress, are carried at cost less accumulated amortisation
and accumulated impairment losses. This intangible asset has been assessed as having a finite life and is
amortised using the straight line method over a period of 5 years. Once type approval projects have been
certified by the State Road Transport Authority, the costs are transferred to a separate category of intangible
assets, “type approval certification” at which point amortisation commences. The amortisation has been
recognised in the profit or loss in the line item ‘depreciation, amortisation and impairment expense’.
(ii) Type approval certification
Type approval certification internally generated or acquired in a business combination is carried at cost less
accumulated amortisation and accumulated impairment losses and is amortised using the straight line method
over a period of 5 years. Type approval certification represents the Group’s ‘licence’ to sell its light-emitting
diode (“LED”) traffic light signals. The amortisation has been recognised in the profit or loss in the line item
‘depreciation, amortisation and impairment expense’.
(iii) Software costs
These intangible assets have been assessed as having a finite life and are amortised using the straight line
method over a period of 1-4 years. The amortisation has been recognised in the profit or loss in the line item
‘depreciation, amortisation and impairment expense’.
(iv) Patents and trademarks
Patents and trademarks acquired separately or in a business combination are carried at cost less accumulated
amortisation and accumulated impairment losses. These intangible assets have been assessed as having finite
lives and are amortised using the straight line method over a period of 3-10 years. The amortisation has been
recognised in the profit or loss in the line item ‘depreciation, amortisation and impairment expense’.
(v) Customer contracts
Customer contracts and relationships acquired in a business combination are carried at cost less accumulated
amortisation and accumulated impairment losses. These intangible assets have been assessed as having a finite
life and are amortised using the straight line method using existing contract life and existing customer base.
The amortisation has been recognised in the profit or loss in the line item ‘depreciation, amortisation and
impairment expense’.
(vi) Brand names
After initial recognition brand names acquired in a business combination are measured at cost less any
accumulated impairment losses. These intangible assets have been assessed as having finite lives and are
amortised using the straight line method over a period of 10 years. The amortisation has been recognised in the
profit or loss in the line item ‘depreciation, amortisation and impairment expense’.
(vii) Goodwill
After initial recognition goodwill acquired in a business combination is measured at cost less any accumulated
impairment losses. Goodwill is not amortised but is subject to impairment testing on an annual basis or
whenever there is an indication of impairment (refer note 11(d)).
61
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
11.
Intangible Assets (continued)
d) Impairment tests for goodwill and intangible assets with indefinite useful lives
(i) Description of the cash-generating units and other relevant information
Goodwill and brand names acquired through business combinations have been allocated to the Signals cash-
generating unit for impairment testing.
The recoverable amount of the Signals cash-generating unit has been determined based on a value in use
calculation using cash flow projections based on financial budgets prepared by management covering a five
year period.
The pre tax discount rate applied to the cash flow projections is 13.0% (2010: 13.0%), which is the Group’s
WACC. The growth rate used to extrapolate the cash flows for periods beyond the five year period is 3%
(2010: 3%).
The Group believes that the growth rate selected is justified based on expected growth in demand due to
increased road infrastructure investment in line with government projections.
(ii) Carrying amount of goodwill and indefinite life intangible assets allocated to the cash-generating unit
Signals
Consolidated
2011
$’000
Consolidated
2010
$’000
30,535
30,535
(iii) Key assumptions used in value in use calculations for the cash-generating unit at 30 June 2011 and 30
June 2010
The Group has based its cash flow projections on budgets prepared by management.
The cash flows have been extrapolated using the expected growth rate of 5% for the Signals cash-generating
unit for both the 30 June 2011 and 30 June 2010 financial years.
The Group believes that the growth rates selected are justified based on expected growth in demand over the
next 5 years in line with government projections.
It has been assumed that the current market share achieved by the Group will be maintained and that the
budgeted growth rates will be achieved through expected growth in market demand.
The projections are based on the gross margins achieved in the period immediately before the budget period,
increased for expected efficiency improvements. The Group believes that efficiency improvements of up to
5% per year can be reasonably achieved in the Signals cash generating units.
The key assumptions used in the value in use calculations represent management’s best estimates at 30 June
2011. Management has considered the sensitivity of the value in use calculations to changes in assumptions
and does not believe there are reasonably possible changes in the key assumptions which would cause the
carrying value of the unit to materially exceed its recoverable amount.
62
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
12. Trade and Other Payables
Current
Trade creditors (i)
Sundry creditors and accruals (ii)
Deferred income
Provision for legal case (see note 21)
Current Trade and Other Payables
Non-current
Sundry creditors and accruals (ii)
Non-current Trade and Other Payables
(i) Trade creditors
Consolidated Consolidated
2011
$’000
2010
$’000
6,645
2,477
1,631
1,200
8,618
3,932
-
1,200
11,953
13,750
56
56
116
116
Trade payables are non-interest bearing and are normally settled on 60-day terms.
(ii) Sundry creditors and accruals
Current
Current sundry creditors and accruals are non-trade payables, non-interest bearing and have an average
term of 3 months.
Non-current
Non-current sundry creditors and accruals are long-term, unamortised property lease incentives ranging
from 2-5 years maturity.
(iii) Fair value
Due to the short term nature of these payables, their carrying value is assumed to approximate their fair
value.
(iv) Interest rate, foreign exchange and liquidity risk
Information regarding the effective interest rate, foreign exchange and liquidity risk exposure is set out in
note 18.
63
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
13.
Interest Bearing Loans and Borrowings
Nominal
interest rate
Year of
maturity
Consolidated
2011
$’000
Consolidated
2010
$’000
Current borrowings
Term bank facility (secured) – (i) (ii)
Working capital facility (secured)
(iii)
Lease liabilities (iv)
BBR + 4.50%
BBR + 3.25%
2012
2012
5.6% - 11.3%
2011-2012
Non-current borrowings
Term bank facility (secured) – (i) (ii)
Lease liabilities (iv)
BBR + 4.50%
5.6% - 11.3%
2012
2012-2016
-
6,400
119
6,519
23,843
244
24,087
10,000
8,997
138
19,135
23,796
140
23,936
All loans are denominated in Australian Dollars. The carrying amount of the Group’s current and non-
current borrowings approximates their fair value.
(i) Reconciliation of Term Bank Facility
Term bank facility balance comprises:
Term bank facility – Principal loan amounts
payable
Less: capitalised transaction costs
Current borrowings
Non-current borrowings
Consolidated
2011
$’000
Consolidated
2010
$’000
24,000
(157)
23,843
-
23,843
23,843
34,000
(204)
33,796
10,000
23,796
33,796
64
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
13.
Interest Bearing Loans and Borrowings (continued)
Terms and conditions relating to the above financial instruments:
(ii) Term Facility
The term facility has been scheduled for repayment on 1 October 2012 and has been presented as non-
current in accordance with AASB 101 Presentation of Financial Statements. The term facility is secured
by fixed and floating charges over the total assets of the Group.
(iii) Working Capital Facility
The working capital facility comprises a bank overdraft facility, a bank guarantee commitment and a
revolving cash advance facility. The combination of these facilities must not exceed $8.6m at any point in
time. The facility has been scheduled for repayment on 1 October 2012 and has been presented as current
in accordance with the economic substance of a working capital facility. The working capital facility is
secured by fixed and floating charges over the total assets of the Group.
(iv)
Information regarding the effective interest rate risk of borrowings is set out in note 18.
(v) During the current and prior years, there were no defaults or breaches on any of the loans.
(vi) Refer to note 20(c) for details regarding the financing facilities available.
14. Provisions
Current
Annual leave
Long service leave
Restructuring
Unfavourable contracts
Maintenance warranties
Non-current
Long service leave
Total provisions
Consolidated
2011
$’000
Consolidated
2010
$’000
982
863
-
-
100
1,945
104
104
2,049
921
753
100
170
448
2,392
96
96
2,488
65
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
14.
Provisions (continued)
(a) Movements in provisions
Movements in each class of provisions during the financial year, other than provisions relating to employee
benefits, are set out below:
Restructuring
$’000
Unfavourable
Contracts
$’000
Maintenance
Warranties
$’000
Total
$’000
CONSOLIDATED
At 1 July 2010
Arising during the year
Unused amounts reversed
At 30 June 2011
Current 2011
Non-current 2011
Current 2010
Non-current 2010
100
-
(100)
-
-
-
-
100
-
100
170
-
(170)
-
-
-
-
170
-
170
448
-
(348)
100
100
-
100
448
-
448
718
-
(618)
100
100
-
100
718
-
718
(b) Nature and timing of provision for restructuring
In line with the Group’s ongoing implementation of its Profit Improvement Program, the Group recognised a
provision for restructure. The provision represented the present value of the Directors’ best estimate of the
future outflow of economic benefits that will be required in order to effect the restructuring plan.
(c) Nature and timing of provision for unfavourable contracts
The Group has recognised a provision for an unfavourable contract in relation to its former Guard Rail
Installations business disposed in a prior year. The contract was identified during that year and further that it
had not been assigned to the purchaser on disposal of the business. The provision recognised represents the
present value of the Directors’ best estimate of the future outflow of economic benefits that will be required in
order to either complete the requirements of the contract or to settle any claim brought against the Group in the
event that it does not complete the requirements of the contract.
(d) Nature and timing of provision for maintenance warranties
The Group has recognised a provision for expected warranty claims on products sold by the Traffic Products
division during the last five years, based on current sales levels, current information available about past returns
and repairs and the five year warranty period for all products sold. The provision for warranty claims represents
the present value of the Directors’ best estimate of the future outflow of economic benefits that will be required
under warranties offered for traffic signals and emergency telephones produced by the Traffic Products division.
66
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
15. Contributed Equity
Ordinary shares
Convertible non-cumulative redeemable preference shares
a) Ordinary shares
At 1 July 2009
Share Placement
18,838,717 new ordinary shares issued at 3.5 cents per share – 10 August 2009
Transaction costs
Deferred tax on transaction costs
Share Conversion
Conversion of 500,000 preference shares to 500,000 ordinary shares at 25 cents per share
- 15 December 2009
Share Conversion
Conversion of 15,000,000 preference shares to 15,000,000 ordinary shares at 25 cents per
share – 11 May 2010
Transaction costs
At 30 June 2010
At 1 July 2010
Share Conversion
Conversion of 16,191,208 preference shares to 16,191,208 ordinary shares at 25 cents per
share – 21 October 2010
Share Conversion
Conversion of 1,000 preference shares to 1,000 ordinary shares at 25 cents per share – 28
April 2011
At 30 June 2011
Terms and conditions of contributed equity
Consolidated
2011
$’000
Consolidated
2010
$’000
41,663
-
41,663
37,538
4,125
41,663
No. Of
Shares ‘000
$’000
125,591
33,062
18,839
-
-
659
(69)
21
500
125
15,000
-
3,750
(10)
159,930
37,538
159,930
37,538
16,191
4,048
1
77
176,122
41,663
Effective 1 July 1998, the Corporations legislation abolished the concepts of authorised capital and par value shares.
Accordingly the Company does not have authorised capital nor par value in respect of its issued capital. Ordinary
shares have the right to receive dividends as declared and, in the event of winding up of the Company, to participate
in the proceeds from the sale of all surplus assets in proportion to the number and amounts paid up on shares held.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
67
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
15.
Contributed Equity (continued)
b) Movement in convertible non-cumulative redeemable preference shares
At 1 July 2009
31,692
8,000
Conversion of 15,500,000 preference shares to 15,500,000 ordinary shares at $0.25 per share
(15,500)
(3,875)
No. of
Shares ‘000
$’000
At 30 June 2010
At 1 July 2010
16,192
16,192
4,125
4,125
Conversion of 16,191,208 preference shares to 16,191,208 ordinary shares at $0.25 per share
(16,191)
(4,048)
Conversion of 1,000 preference shares to 1,000 ordinary shares at $0.25 per share
At 30 June 2011
(1)
-
(77)
-
Terms and conditions of convertible non-cumulative redeemable preference shares
Preference shares were convertible into fully paid ordinary shares on the basis that each preference share was
convertible at the option of the preference shareholder into one ordinary share. There was no time limit specified
within which Preference shares must be converted. No additional consideration was payable on conversion.
The remaining preference shares held by Equity Partners Two Pty Ltd (Equity Partners) were converted into
ordinary shares on 28 April 2011 and the Investment Agreement which conferred various rights on Equity Partners
various rights has been terminated.
c) Capital risk management
When managing capital, management's objective is to ensure the entity continues as a going concern as well as to
maintain optimal returns to shareholders and benefits for other stakeholders. Management also aims to maintain a
capital structure that ensures the lowest cost of capital available to the entity.
The Group’s overall strategy remains unchanged from 2010.
The capital structure of the Group consists of debt, which includes borrowings disclosed in note 13, cash and cash
equivalents disclosed in note 20 and equity attributable to equity holders of the parent, comprising issued capital,
reserves and retained earnings as disclosed in the Statement of Changes in Equity.
Operating cash flows are used to maintain and expand the Group’s manufacturing and distribution assets, as well as
to make the routine outflows of tax and repayment of maturing debt. The Group’s policy is to borrow centrally
through the parent entity, using a variety of capital market issues and borrowing facilities, to meet anticipated
funding requirements.
68
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
15.
Contributed Equity (continued)
Gearing ratio
The Directors review the capital structure on a monthly basis. As a part of this review the Board considers the cost
of capital and risks associated with each class of capital. The Group has a target gearing ratio of 30-45%, which is
determined as the proportion of net debt to total capital. The Group will balance its overall capital structure through
new share issues and the redemption of existing debt, as market conditions allow. The Group is not subject to any
externally imposed capital requirements.
The gearing ratios based on continuing operations at 30 June 2011 and 2010 were as follows:
Total borrowings (i)
Cash and cash equivalents
Net debt
Equity (ii)
Total capital
Gearing ratio
Consolidated
2011
$’000
Consolidated
2010
$’000
30,606
(3,005)
27,601
18,639
46,240
60%
43,071
(3,457)
39,614
18,057
57,671
69%
(i) Total borrowings includes long and short-term interest bearing liabilities, as detailed in note 13.
(ii) Equity includes all capital and reserves.
69
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
16. Derivative Financial Instruments
Current liabilities
Interest rate swap contract
Interest rate cap contract
Non-current liabilities
Interest rate swap contract
Interest rate cap contract
(i)
Interest rate contracts
Consolidated
2011
$’000
Consolidated
2010
$’000
151
-
151
-
-
-
-
-
-
329
4
333
Interest bearing loans of the Group currently bear an average floating interest rate of 4.8% (2010: 4.4%). In order to
protect against rising interest rates the Group has entered into an interest rate swap contract and an interest rate cap
contract under which it has a right to receive interest at variable rates and to pay interest at fixed rates. The swap
covers approximately 37.5% (2010: 37.5%) of the notional principal outstanding and the cap covers approximately
37.5% (2010: 37.5%); both contracts are timed to expire on 1 May 2012 (being the original expiry date of the term
loan to which the interest rate contracts relate). The fixed interest rate on both contracts is 7.1% (2010: 7.1%) and
the floating interest rate on the both contracts is the Australian BBR. The term loan, whose interest is hedged
through these interest rate contracts, is fully disclosed in note 13. The interest rate contracts settle on a quarterly
basis. The interest payments on the term facility loan and the interest rate contracts occur simultaneously. The
difference, if any, is recognised directly in profit or loss.
At 30 June 2011, the notional principal amounts and period of expiry of the interest rate contracts are as follows:
0 – 1 years
1 – 2 years
Consolidated
2011
$’000
Consolidated
2010
$’000
15,513
-
15,513
2,550
15,513
18,063
70
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
17. Share-based Payment Plans
Summary of options granted under the Company’s share-based payment plan
The number (No.) and weighted average exercise prices (WAEP) of movements in share options during the year are
as follows:
2011
No.
Thousand
2011
WAEP
$
2010
No.
Thousand
2010
WAEP
$
987
-
-
(987)
-
-
0.44
-
-
0.44
-
-
2,937
-
-
(1,950)
987
887
0.41
-
-
0.40
0.44
0.42
Outstanding at the beginning of the year
Granted during the year
Forfeited during the year
Expired during the year
Outstanding at the end of the year
Exercisable at the end of the year
18. Financial risk management objectives and policies
Financial risk management objectives and policies
The Group’s principal financial instruments comprise a term loan facility, with an associated interest rate
swap contract and interest rate cap contract, working capital facility, finance leases, hire purchase contracts,
forward contracts to purchase foreign currency and cash and short-term deposits.
The Group manages its exposure to key financial risks, including interest rate and currency risk in accordance
with the Group's financial risk management policy. The objective of the policy is to support the delivery of
the Group's financial targets whilst protecting future financial security.
The Group enters into derivative transactions, principally interest rate swaps and forward currency contracts.
The purpose is to manage the interest rate and currency risks arising from the Group's operations and its
sources of finance. The Group has various other financial assets and liabilities such as trade receivables and
trade payables, which arise directly from its operations.
It is the Group’s policy that no trading in financial instruments shall be undertaken.
The main risks arising from the Group’s financial instruments are cash flow interest rate risk, liquidity risk,
credit risk and foreign exchange rate risk.
The Group uses different methods to measure and manage different types of risks to which it is exposed.
These include monitoring levels of exposure to interest rate and foreign exchange risk and assessments of
market forecasts for interest rate and foreign exchange prices. Ageing analyses and monitoring of specific
credit allowances are undertaken to manage credit risk. Liquidity risk is monitored through the preparation of
future rolling cash flow forecasts.
The Board reviews and agrees policies for managing each of these risks as summarised below.
Primary responsibility for identification and control of financial risks rests with the Audit & Risk Committee
under the authority of the Board. The Board reviews and agrees policies for managing each of the risks
identified below, including the setting of limits for hedging cover of foreign currency and interest rate risk,
credit allowances and future cash flow forecasts.
71
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
18.
Financial risk management objectives and policies (continued)
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the
basis of measurement and the basis on which income and expenses are recognised, in respect of each class of
financial asset, financial liability and equity instrument are disclosed in note 1 to the financial statements.
Risk exposures and responses
Fair value of financial instruments
The Directors consider that the carrying amount of financial assets and financial liabilities recorded in the
financial statements approximates their fair values (2010: fair values).
The fair values and net fair values of financial assets and financial liabilities are determined as follows:
The fair value of financial assets and financial liabilities with standard terms and conditions and traded
on active liquid markets are determined with reference to quoted market prices; and
The fair value of other financial assets and financial liabilities are determined in accordance with
generally accepted pricing models based on discounted cash flow analysis.
Interest rate risk
The Group's exposure to market interest rates relates primarily to the Group's long-term debt obligations.
Details of the Group’s debt are disclosed in note 13.
At balance date the Group had the following mix of financial assets and liabilities exposed to Australian
variable interest rate risk that are not designated in cash flow hedges:
Financial assets
Cash and cash equivalents
Other financial assets
Financial liabilities
Term bank facility (net of capitalised transaction costs)
Working capital facility
Derivative financial instruments
Consolidated
2011
$’000
Consolidated
2010
$’000
3,005
1
3,006
23,843
6,400
151
30,394
3,457
1
3,458
33,796
8,997
333
43,126
Net exposure
(27,388)
(39,668)
The Group’s policy is to manage its finance costs using a mix of fixed and variable rate debt. To manage this
mix in a cost-efficient manner the Group enters into interest rate swaps and interest rate cap contracts, in
which the Group agrees to exchange, at specified intervals, the difference between fixed and variable rate
interest amounts calculated by reference to an agreed-upon notional principal amount. These swaps and caps
are designated to hedge underlying debt obligations. At 30 June 2011, after taking into account the effect of
interest rate swaps and caps, approximately 59% of the Group's borrowings were at a fixed rate of interest
(2010: 56%).
72
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
18.
Financial risk management objectives and policies (continued)
Interest rate exposure
The Group constantly analyses its interest rate exposure. Within this analysis consideration is given to
potential renewals of existing positions, alternative financing, alternative hedging positions and the mix of
fixed and variable interest rates. The following sensitivity analysis is based on the interest rate risk exposures
in existence at the balance date and is net of the hedging affect of the interest rate swap and interest rate cap
contracts.
At 30 June, if interest rates had moved, as illustrated in the table below, with all other variables held constant,
pre tax loss and other equity reserves would have been affected as follows:
Judgments of reasonably possible
movements:
Group
+1% (100 basis points)
- 0.5% ( 50 basis points)
Pre Tax Profit/ (Loss)
Increase / (Decrease)
2010
$’000
2011
$’000
Other Equity Reserves
Increase / (Decrease)
2010
$’000
2011
$’000
423
(211)
53
(193)
-
-
-
-
The movements in profit/loss are due to higher/lower interest costs from variable rate debt and cash balances.
The change in sensitivity between 2010 and 2011 is due to the mix of interest rate swap and interest rate cap
contracts and the associated fair value of those contracts and the underlying variable interest rates.
Foreign currency risk
The Group currently purchases certain components denominated in foreign currency, hence exposures to
exchange rate fluctuations can arise. Where appropriate, the Group enters into forward foreign exchange
contracts to manage the risk associated with anticipated purchase transactions up to 6 months out to hedge the
exposure generated. The exchange gain or loss on these transactions is recognised directly in the statement of
comprehensive income.
At balance date the Group had no commitments to purchase foreign currency.
Credit risk
Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents, trade and
other receivables, available-for-sale financial assets and derivative financial
instruments. The Group's
exposure to credit risk arises from potential default of the counter party, with a maximum exposure equal to
the carrying amount of these instruments. Exposure at balance date is addressed in each applicable note.
The Group does not hold any credit derivatives to offset its credit exposure.
73
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
18.
Financial risk management objectives and policies (continued)
The Group trades only with recognised, creditworthy third parties and, as such, collateral is not requested nor
is it the Group's policy to securitise its trade and other receivables. It is the Group's policy that all customers
who wish to trade on credit terms are subject to credit verification procedures including an assessment of their
independent credit rating, financial position, past experience and industry reputation. Risk limits are set for
each individual customer in accordance with parameters set by the Board. These risk limits are regularly
monitored.
In addition, receivable balances are monitored on an ongoing basis with the result that the Group's exposure to
bad debts is not significant.
For transactions that are not denominated in the functional currency of the relevant operating unit, the Group
does not offer credit terms without the specific approval of senior management.
There are no significant concentrations of credit risk within the Group.
Price risk
The Group’s exposure to equity securities price risk is minimal. Equity price risk arises from investments in
equity securities, which are carried at cost as an approximation to fair value. The price risk is immaterial in
terms of a possible impact on profit or loss or total equity and as such a sensitivity analysis has not been
completed.
Liquidity risk
Ultimate responsibility for liquidity risk management rests with the Board, which has built an appropriate
liquidity risk management framework for the management of the Group’s short, medium and long-term
funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate
reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual
cash flows and matching the maturity profiles of financial assets and liabilities. Included in note 20(c) is a
listing of additional undrawn facilities that the Group has at its disposal to further reduce liquidity risk.
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use
of bank overdrafts, bank loans, recycling of assets through sale, finance leases and committed available credit
lines.
The Group’s policy is that not more than 20% of borrowings should mature in any 12 month period. At 30
June 2011, 0.4% of the Group’s debt is due to be retired in less than one year (2010: 23.4%), 98.8% of the
Group’s debt will mature within 18 months’ time (2010: 75.7%) and the balance of the Group’s debt will
mature in more than one year but not more than 5 years.
The following table details the Group’s remaining contractual maturity for its financial liabilities. The table
has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date in
which the Group can be required to pay. The table includes both interest and principal cash flows. Cash
flows for financial liabilities without fixed timing of amount are based on conditions existing at 30 June.
74
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
18.
Financial risk management objectives and policies (continued)
The remaining contractual maturities of the Group’s financial liabilities are:
6 months or less
6 – 12 months
1 – 5 years
Over 5 years
Consolidated
2011
$’000
2010
$’000
13,466
1,664
31,368
-
46,498
17,114
11,690
34,072
-
62,876
Maturity analysis of financial assets and liabilities in accordance with management’s expectation
The risk implied from the values shown in the table below reflects a balanced view of cash inflows and
outflows. Leasing obligations, trade payables and other financial liabilities mainly originate from the
financing of assets used in the Group’s ongoing operations such as property, plant, equipment and investments
in working capital (e.g. inventories and trade receivables). These assets are considered in the Group’s overall
liquidity risk. To monitor existing financial assets and liabilities, as well as to enable an effective controlling
of future risks, the Group has established comprehensive risk reporting covering its business segments that
reflects management’s expectations of expected settlement of financial assets and liabilities, as illustrated in
the tables below.
Year ended 30 June 2011
Consolidated
Financial assets
Cash & cash equivalents
Trade & other receivables
Financial liabilities
Trade & other payables
Interest bearing loans & borrowings
Bank guarantee
Net maturity
≤ 6
months
$’000
6-12 months
$’000
3,005
12,168
15,173
10,753
119
-
10,872
4,301
-
-
-
-
-
-
-
-
1 – 5
years
$’000
-
10
10
1,200
30,488
1,092
32,780
(32,770)
> 5 years
$’000
Total
$’000
-
-
-
-
-
-
-
-
3,005
12,178
15,183
11,953
30,607
1,092
43,652
(28,469)
The difference between the contractual maturities of the Group’s financial liabilities and management
expectation of when those financial liabilities will be settled is explained by a provision in respect of a legal
claim of $1,200,000 (refer note 21(i)).
75
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
18.
Financial risk management objectives and policies (continued)
Year ended 30 June 2010
Consolidated
Financial assets
Cash & cash equivalents
Trade & other receivables
Financial liabilities
Trade & other payables
Interest bearing loans & borrowings
Bank guarantee
Net maturity
≤ 6
months
$’000
6-12 months
$’000
1 – 5
years
$’000
> 5 years
$’000
Total
$’000
3,457
16,458
19,915
12,550
10,138
-
22,688
(2,773)
-
-
-
-
-
-
-
-
-
48
48
1,200
32,933
857
34,990
(34,942)
-
-
-
-
-
-
-
-
3,457
16,506
19,963
13,750
43,071
857
57,678
(37,715)
The difference between the contractual maturities of the Group’s financial liabilities and management
expectation of when those financial liabilities will be settled is explained by a provision in respect of a legal
claim of $1,200,000 (refer note 21(i)).
Derivative financial liabilities maturity
Due to the unique characteristics and risks inherent to derivative instruments, the Group (through the Group
Treasury Function) separately monitors the liquidity risk arising from transacting derivative instruments.
The table below details the liquidity arising from the derivative liabilities held by the Group at balance date.
Net settled derivative liabilities comprise swap and cap contracts that are used as economic hedges of the
Groups term facility. Gross settled derivatives mainly comprise forward interest rate cap and swap contracts
that are used to hedge against future interest rate fluctuations.
≤ 6
months
$’000
6-12 months
$’000
1 – 5
years
$’000
> 5 years
$’000
Total
$’000
Year ended 30 June 2011
Derivative liabilities – net settled
Net maturity
Year ended 30 June 2010
Derivative liabilities – net settled
Net maturity
(151)
(151)
-
-
-
-
(329)
(329)
-
-
-
-
(151)
(151)
(329)
(329)
-
-
-
-
76
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
18.
Financial risk management objectives and policies (continued)
Fair value
The Group uses various methods in estimating the fair value of a financial instrument. The methods comprise:
Level 1 – the fair value is calculated using quoted prices in active markets.
Level 2 – the fair value is estimated using inputs other than quoted prices included in Level 1 that are
observable for the asset or liability, either directly (as prices) or indirectly (derived from prices).
Level 3 – the fair value is estimated using inputs for the asset or liability that are not based on observable
market date.
The fair value of the financial instruments as well as the methods used to estimate the fair value are
summarised in the table below.
Consolidated
Financial Assets
Unlisted investments
Financial Liabilities
Derivative instruments
Interest rate swap
Interest rate cap
Quoted
market
price
(Level 1)
$’000
30 June 2011
Valuation
technique –
market
observable
(Level 2)
$’000
Valuation
technique – non
market
observable
(Level 3)
$’000
Quoted
market
price
(Level 1)
$’000
30 June 2010
Valuation
technique –
market
observable
(Level 2)
$’000
Valuation
technique –
non market
observable
(Level 3)
$’000
1
1
-
-
-
-
-
(151)
-
(151)
-
-
-
-
-
1
1
-
-
-
-
-
(329)
(4)
(333)
-
-
-
-
-
Quoted market price represents the fair value determined based on quoted prices on active markets as at the
reporting date without any deduction for transaction costs. The fair value of the listed equity investments are
based on quoted market prices.
For financial instruments not quoted on active markets, the Group uses valuation techniques such as present
value techniques, comparisons to similar instruments for which market observable prices exist and other
relevant models used by market participants. These valuation techniques use both observable and
unobservable market inputs.
Financial instruments that use valuation techniques with only observable market inputs or unobservable
inputs that are not significant to the overall valuation include interest rates swaps and caps.
77
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
19. Expenditure Commitments
a) Operating lease commitments -
Premises
Within 1 year
After 1 year but not more than 5 years
More than 5 years
Consolidated
2011
Minimum
rentals
$’000
Consolidated
2010
Minimum
rentals
$’000
2,040
2,467
-
4,507
1,655
1,073
-
2,728
The Group leases a number of warehouse, factory and office facilities under operating leases. The leases typically run
for periods of 1 to 5 years with an option to renew the lease after that date.
b) Operating lease commitments –
Motor vehicles
Within 1 year
After 1 year but not more than 5 years
65
8
73
134
117
251
The Group leases a fleet of vehicles under operating leases. The leases typically run for periods of 2 to 5 years with an
option to renew after that date.
c) Finance lease & hire purchase
Within 1 year
After 1 year but not more than 5 years
Minimum future lease payments
Less future finance charges
Lease liability
Consolidated
2011
Minimum lease
payments
$’000
Consolidated
2011
Present value of
lease payments
$’000
Consolidated
2010
Minimum lease
payments
$’000
Consolidated
2010
Present value of
lease payments
$’000
179
256
435
(72)
363
118
245
363
-
363
170
143
313
(35)
278
138
140
278
-
278
The Group has entered into finance and hire purchase contracts in respect of various items of plant and machinery and
motor vehicles. These finance and hire purchase contracts expire within 1 to 5 years. Subsequent renewal of the
contracts is at the option of the entity that holds the lease.
78
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
20. Statement of Cash Flows
a) Reconciliation of Cash
Cash at bank and in hand
Short term deposits
Consolidated
2011
$’000
Consolidated
2010
$’000
3,005
-
3,005
3,435
22
3,457
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Short term deposits are made for varying periods of between one day and 3 months, depending on the
immediate cash requirements of the Group and earn interest at the respective short-term deposit rates.
b) Reconciliation of net profit/(loss) after tax to net cash flows from operations
Net profit/(loss)
Adjustments for:
Depreciation, amortisation and impairment of non-current assets
Fair value of interest rate contracts
Loss/(profit) on sale of fixed assets
Gain on sale of discontinued operations
Deferred tax on discontinued operations
Foreign exchange gain
Amortisation of capitalised finance fees
Share options expensed
Doubtful debts expense
Stock obsolescence (benefit)/expense
Changes in assets and liabilities:
(Increase)/decrease in trade and other receivables
(Increase)/decrease in inventories
Increase/(decrease) in trade and other payables
(Increase)/decrease in deferred tax assets
Increase/(decrease) in provisions
Net cash provided by operating activities
Non cash financing and investing activities
Consolidated
2011
$’000
Consolidated
2010
$’000
582
(254)
2,057
(182)
(12)
(1,247)
(482)
(280)
208
-
8
(44)
5,112
(650)
(1,642)
(171)
(439)
2,818
3,371
-
(45)
-
-
-
-
7
8
75
(2,418)
251
1,387
72
425
2,879
During the year the Group acquired property, plant and equipment with an aggregate value of $274,970 (2010:
$606,904) by means of finance leases. These acquisitions are not reflected in the Statement of Cash Flows.
79
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
20.
Statement of Cash Flows (continued)
c) Financing facilities available
Total facilities at reporting date
Term facility
Working capital facility comprising:
- revolving cash advance facility
- bank overdraft facility
- bank guarantee facility
- bank letters of credit facility
Facilities used at reporting date
Term facility
Working capital facility comprising:
- revolving cash advance facility
- bank overdraft facility
- bank guarantee facility
- bank letters of credit facility
Facilities unused at reporting date
Term facility
Working capital facility comprising:
- revolving cash advance facility
- bank overdraft facility
- bank guarantee facility
- bank letters of credit facility
Consolidated
2011
$’000
Consolidated
2010
$’000
24,000
6,400
1,000
1,200
-
32,600
24,000
6,400
-
1,092
-
31,492
-
-
1,000
108
-
1,108
34,000
9,800
1,000
1,200
-
46,000
34,000
8,997
-
857
-
43,854
-
803
1,000
343
-
2,146
80
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
21. Claims and Contingencies
(i)
Legal claims
A vendor of a business acquired in a prior year lodged a claim in a Supreme Court proceeding against the
Group in a prior year relating to amounts to be paid pursuant to the business sale agreement. The Group has
denied liability for any further amounts payable and is defending the action. While liability is not admitted, the
maximum amount payable by the Group under this claim is $0.9m plus contractual interest under the business
sale agreement but excluding possible cost judgements. The vendor has also recently brought a second claim
against the Group in the same proceeding for additional amounts to be paid pursuant to the business sale
agreement. This claim has previously been noted as a potential claim. The Group also denies liability in respect
of this claim and is defending the action. While liability is not admitted in respect of the second claim, the
maximum amount payable by the Group under this claim is estimated at approximately $1.75m plus contractual
interest and excluding possible cost judgements. The outcome of these actions is uncertain and cannot be
reliably measured at balance date. The Group has provided $1.2m as an estimate in respect of both claims as at
30 June 2011 (see note 12).
(ii) Guarantees
As detailed in note 22, the Company is party to a deed of cross guarantee with its wholly-owned subsidiaries.
The extent to which an outflow of funds will be required is dependent on the future operations of the entities
that are party to the deed of cross guarantee. No liability is expected to arise. The deed of cross guarantee will
continue to operate indefinitely.
As detailed in note 13, the Company is party to a finance facility agreement with Westpac Banking Corporation
to which the Company’s subsidiaries are guarantors. The extent to which an outflow of funds will be required is
dependent on the risk of default under the finance facility agreement. The Directors do not expect default to
occur.
81
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
22. Related Party Disclosures
The ultimate parent
Traffic Technologies Ltd is the ultimate parent Company.
Subsidiary entities
Traffic Technologies Signal & Hardware
Division Pty Ltd
Traffic Technologies Traffic Management
Division Pty Ltd
De Neefe Signs Pty Ltd
Traffic Technologies Traffic Hire Pty Ltd
Sunny Sign Company Pty Ltd
Pro-Tech Traffic Management Pty Ltd
KJ Aldridge Investments Pty Ltd
- Aldridge Traffic Group Pty Ltd
- Excelsior Diecasting Pty Limited
- Aldridge Traffic Systems Pty Ltd
- Aldridge Plastics Pty Ltd
Entities subject to Individual Order
Pursuant to the Individual Order granted by ASIC under subsection 340(1) of the Corporations Act 2001, relief
has been granted to the subsidiary companies from the Corporations Act 2001 requirements for preparation,
audit and lodgement of their financial reports. The relief granted under the Individual Order is equivalent to the
advantage of the relief offered by ASIC Class Order 98/1418.
As a condition of the Individual Order, Traffic Technologies Ltd and its subsidiary entities (the “Closed
Group”) entered into a Deed of Cross Guarantee on 28 June 2007. The effect of the deed is that Traffic
Technologies Ltd has guaranteed to pay any deficiency in the event of winding up of any controlled entity or if
they do not meet their obligations under the terms of overdrafts, loans, leases or other liabilities subject to the
guarantee. The controlled entities have also given a similar guarantee in the event that Traffic Technologies Ltd
is wound up or if it does not meet its obligation under the terms of overdrafts, loans or other liabilities subject to
the guarantee.
The consolidated statement of consolidated income and statement of financial position of the closed group is
equivalent to the group’s statement of consolidated income and statement of financial position.
Transactions with Directors or Director-related entities
There were no other transactions or balances receivable from or payable to Directors or executives during the
financial year or at the date of this report.
23. Events after the Balance Date
Subsequent to balance date there have been no significant events which have affected the operations of the
Group.
82
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
24. Auditor’s Remuneration
Amounts received or due and receivable by BDO Audit (NSW-VIC) Pty Ltd (2010: Ernst & Young):
Audit or review of the financial report of the
entity and any other entity in the Group
Consolidated Consolidated
2011
$
109,500
109,500
2010
$
205,000
205,000
83
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
25. Key Management Personnel Disclosures
a) Compensation of Key Management Personnel
(i) Remuneration of Key Management Personnel
Details of the nature and amount of each element of the remuneration of key management personnel are
disclosed in the Remuneration Report section of the Directors’ Report.
Compensation by Category:
Key Management Personnel
Short-term employee benefits
Post employment benefits
Other long-term benefits
Share-based payment
Consolidated
2011
$
853,197
98,061
11,090
-
962,348
2010
$
1,418,938
188,842
8,531
7,423
1,623,734
The 2010 KMP disclosures include General Managers. During the course of the financial year ended 30
June 2011 management implemented a personnel restructure as part of a cost cutting initiative. General
Manager roles no longer exist and accordingly are not included in the 2011 disclosure.
b)
Shares issued on exercise of remuneration options
No shares have been issued to key management personnel as a result of the exercise of remuneration
options.
84
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
25.
Key Management Personnel Disclosures (continued)
c) Option holdings of Key Management Personnel
There have been no cancellations or modifications to the Company’s share option plan during 2011 and 2010.
Fair value of options
The basis on which the fair value of each option (granted during the year) has been valued is described in note 17.
30 June 2011
Directors
Mr. Alan Brown
Mr. Con Liosatos
Mr. Ray Horsburgh
Mr. Ken Jarrett
Total
Executives
Mr. Peter Crafter
Total
Balance at
beginning of
period
1 July 2010
No.
Granted
As
remuneration
Net change
other #
No.
No.
Balance at
end
of period
30 June 2011
No.
Vested at 30 June 2011
No.
Total
Exercisable
Not Exercisable
300,000
-
300,000
-
600,000
100,000
100,000
-
-
-
-
-
-
-
(300,000)
-
(300,000)
-
(600,000)
(100,000)
(100,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
# - lapses. The value of these options at the date they lapsed was minimal as they were heavily out of the money.
85
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
25.
Key Management Personnel Disclosures (continued)
Balance at
beginning of
period
1 July 2009
No.
Granted
As
remuneration
Net change
other #
No.
No.
Balance at
end
of period
30 June 2010
No.
Vested at 30 June 2010
No.
Total
Exercisable
Not Exercisable
600,000
1,000,000
600,000
-
-
-
2,200,000
200,000
250,000
450,000
-
-
-
-
-
-
-
-
-
-
(300,000)
300,000
300,000
300,000
(1,000,000)
-
-
-
(300,000)
300,000
300,000
300,000
-
-
-
-
-
-
-
-
-
-
-
-
(1,600,000)
600,000
600,000
600,000
(100,000)
(250,000)
100,000
-
(350,000)
100,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30 June 2010
Directors
Mr. Ray Horsburgh
Mr. Con Liosatos
Mr. Alan Brown
Mr. Ken Jarrett
Mr. Rajeev Dhawan
Mr. Garry Sladden
Total
Executives
Mr. Peter Crafter
Mr. Andrew Bull
Total
# - lapses
86
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
25.
Key Management Personnel Disclosures (continued)
d) Shareholdings of Key Management Personnel
Ordinary shares held in Traffic Technologies Ltd
30 June 2011
Directors
Mr. Alan Brown
Mr. Con Liosatos
Mr Ray Horsburgh
Mr. Ken Jarrett
Total
Executives
Mr. Peter Crafter
Total
# - includes the resignation of Mr. Ken Jarrett.
Balance at
beginning of
period
1 July 2010
No.
2,056,965
8,374,949
150,000
9,452,563
20,034,477
10,000
10,000
Granted
as remuneration
On exercise
of Options
Net change
other #
No.
No.
No.
Balance at
end of
period
30 June 2011
No.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
800,000
2,856,965
1,754,428
10,129,377
178,400
(9,452,563)
328,400
-
(6,719,735)
13,314,742
-
-
10,000
10,000
87
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
25.
Key Management Personnel Disclosures (continued)
Ordinary shares held in Traffic Technologies Ltd
30 June 2010
Directors
Mr Ray Horsburgh
Mr. Constantinos Liosatos
Mr. Alan Brown
Mr. Ken Jarrett
Mr. Rajeev Dhawan
Mr. Garry Sladden
Total
Executives
Mr. Peter Crafter
Mr. Andrew Bull
Mr. Graham Sergeant
Mr. Mark Faunt
Total
Balance at
beginning of
period
1 July 2009
No.
Granted
as remuneration
On exercise
of Options
Net change
other #
No.
No.
No.
150,000
4,888,945
2,056,965
-
1,100
-
7,097,010
10,000
1,276,738
230,000
-
1,516,738
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance at
end of
period
30 June 2010
No.
150,000
8,374,949
2,056,965
9,452,563
-
-
-
3,486,004
-
9,452,563
(1,100)
-
12,937,467
20,034,477
-
(1,276,738)
-
-
10,000
-
230,000
-
(1,276,738)
240,000
# - includes the resignations of Mr. Rajeev Dhawan, Mr. Garry Sladden and Mr. Andrew Bull. Mr. Ken Jarrett’s shareholding was purchased on-market prior to his appointment to
the Board and not granted either as remuneration during employ or on the exercise of options in the Company.
e) Loans to Key Management Personnel
There were no loans made to Directors or executives during the financial year and none are outstanding as at the date of this report.
88
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
26. Operating Segments
Identification of reportable segments
The Group has identified its operating/reportable segments based on the internal reports that are reviewed and used
by the Managing Director (the chief operating decision maker) in assessing performance and in determining the
allocation of resources.
The reportable segments are identified by management based on the manner in which the products are sold and the
nature of the services provided. Discrete financial information about each of these operating businesses is reported
to the Managing Director on at least a monthly basis. The reportable segments are based on aggregated operating
segments determined by the similarity of the products produced and sold and/or the services provided, as these are
the sources of the Group’s major risks and have the most effect on the rates of return.
Types of products and services
Traffic Products
The Traffic Products division specialises in the design, manufacture and installation of traffic signals, emergency
telephones and portable roadside technology and provides a wide range of directional and regulatory traffic signs and
traffic control products to road traffic authorities, municipal councils and construction companies.
Traffic Services
Traffic Services provides equipment hire (barrier guard and portable roadside technology) services to road traffic
authorities and construction companies.
Traffic Management
Traffic Management involved the hiring out of traffic controllers to road authorities, contractors and local councils.
The Group completed the sale of this business on 9 August 2010. Information about this discontinued segment is
included in note 6.
Accounting policies and intersegment transactions
The accounting policies used by the Group in reporting segments internally are the same as those contained in note 1
to the accounts and in the comparative period except as detailed below.
Inter-entity sales
Inter-entity sales are recognised based on internally set transfer prices. The prices are reviewed periodically to reflect
what the business operations could achieve if they sold their output and services to external parties at arm’s length.
Segment loans payable and loans receivable
Segment loans are initially recognised at the consideration received excluding transaction costs. Inter-segment loans
receivable and loans payable that earn or incur non-market interest are not adjusted to fair value based on market
interest rates.
Income tax expense
Current income tax expense is not calculated at the operating segment level; however, effect is given for taxable or
deductible temporary differences (deferred tax expense) at the operating segment level. It is the Group’s policy that
if items of revenue and expense are not allocated to operating segments then any associated assets and liabilities are
also not allocated to segments. This is to avoid asymmetrical allocations within segments which management believe
would be inconsistent.
89
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
26. Operating Segments (continued)
Reportable segments
The following tables present revenue and profit information and certain asset information regarding reportable
segments for the financial years ended 30 June 2011 and 30 June 2010.
Year Ended 30 June 2011
Traffic
Products
$'000
Traffic
Services
$'000
Total
$’000
Traffic
Management
$'000
Consol-
idated
$'000
Revenue
Sales to external customers
Inter-segment sales
47,896
474
1,764
92
49,660
566
4,229
-
53,889
566
Total segment revenue
48,370
1,856
50,226
4,229
54,455
Inter-segment elimination
Interest revenue
Total revenue (refer to note 2)
Segment EBITDA before non-
recurring items
Non-recurring items
Depreciation & amortisation
Finance costs
7,612
-
(1,108)
(3,035)
714
-
(347)
(5)
8,326
-
(1,455)
(3,040)
(326)
-
(94)
(21)
(566)
67
53,956
8,000
-
(1,549)
(3,061)
Segment gain before tax
3,469
362
3,831
(441)
3,390
Total segment gain before tax
Non-recurring items
Depreciation & amortisation
Finance costs
Discontinued operations
Corporate costs
Loss for the year from
continuing operations before
income tax per the statement of
comprehensive income
Segmental income tax
benefit/(expense)
Total segment income tax
benefit/(expense)
Discontinued operations
Corporate costs
Total income tax
benefit/(expense)
3,390
(899)
(602)
(734)
441
(2,274)
(678)
330
330
200
124
654
688
(158)
530
(200)
90
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
26. Operating Segments (continued)
Year Ended 30 June 2011
Segment assets
Total segment assets
Unallocated:
Cash
Receivables
Property, plant & equipment
Intangible assets
Deferred tax asset
Total assets as per the statement
of financial position
Segment liabilities
Total segment liabilities
Unallocated:
Payables
Interest-bearing liabilities
Provisions
Total liabilities as per the
statement of financial position
Traffic
Products
$'000
Traffic
Services
$'000
Total
$’000
Traffic
Management
$'000
Consol-
idated
$'000
27,012
3,346
30,358
13,012
162
13,174
-
-
30,358
30,358
1,543
33
133
31,201
186
63,454
13,174
13,174
1,121
30,293
227
44,815
91
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
26. Operating Segments (continued)
Year Ended 30 June 2010
Traffic
Products
$'000
Traffic
Services
$'000
Total
$’000
Traffic
Management
$'000
Consol-
idated
$'000
Revenue
Sales to external customers
Inter-segment sales
45,122
888
2,607
747
47,729
1,635
44,184
284
91,913
1,919
Total segment revenue
46,010
3,354
49,364
44,468
93,832
Inter-segment elimination
Interest revenue
Total revenue (refer to note 2)
Segment EBITDA before non-
recurring items
Non-recurring items
Depreciation & amortisation
Finance costs
7,217
-
(1,176)
(3,021)
1,131
-
(335)
(13)
8,348
-
(1,511)
(3,034)
3,951
(42)
(1,182)
(184)
(1,919)
72
91,985
12,299
(42)
(2,693)
(3,218)
Segment gain before tax
3,020
783
3,803
2,543
6,346
Total segment gain before tax
Non-recurring items
Depreciation & amortisation
Finance costs
Discontinued operations
Corporate costs
Loss for the year from
continuing operations before
income tax per the statement of
comprehensive income
Segmental income tax
benefit/(expense)
Total segment income tax
benefit/(expense)
Discontinued operations
Corporate costs
Total income tax
benefit/(expense)
6,346
(955)
(675)
(1,018)
(2,543)
(3,859)
(2,704)
(305)
113
(192)
125
(67)
(67)
(125)
(26)
(218)
92
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
26. Operating Segments (continued)
Year Ended 30 June 2010
Segment assets
Total segment assets
Unallocated:
Cash
Receivables
Property, plant & equipment
Intangible assets
Deferred tax asset
Total assets as per the statement
of financial position
Segment liabilities
Total segment liabilities
Unallocated:
Payables
Interest-bearing liabilities
Provisions
Total liabilities as per the
statement of financial position
Major customers
Traffic
Products
$'000
Traffic
Services
$'000
Total
$’000
Traffic
Management
$'000
Consol-
idated
$'000
21,973
4,410
26,383
13,171
10,005
1,180
11,185
3,597
39,554
39,554
1,673
7,915
94
31,632
544
81,412
14,782
14,782
4,723
43,237
613
63,355
The Group has a number of customers to which it provides both products and services. The Group supplies a
number of government agencies that combined account for 25% of external revenue within the Traffic Products and
Traffic Services segments (2010: 12%). The next most significant client accounts for 4% (2010: 8%) of external
revenue within the Traffic Products and Traffic Services segments.
Geographical information
The Group operates in one principal geographical location, namely Australia.
Revenue by geographic location:
Consolidated
2011
$’000
Consolidated
2010
$’000
47,287
2,440
49,727
45,680
2,121
47,801
Australia
Overseas
Total
All the Group’s non-current assets are located in Australia.
93
Traffic Technologies Ltd and Controlled Entities
Notes to the Financial Statements
For the year ended 30 June 2011
27.
Parent Entity Information
Information relating to Traffic Technologies Ltd:
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Retained earnings
Share-based payments reserve
Total shareholders’ equity
Profit or loss of the parent entity
Total comprehensive income of the parent entity
2011
$’000
1,686
45,649
34,158
58,063
41,663
(55,077)
1,000
(12,414)
(4,502)
(4,502)
2010
$’000
21,589
68,115
32,539
68,859
41,663
(43,407)
1,000
(744)
(5,532)
(5,532)
Details of any guarantees entered into by the parent entity in relation to the
debts of its subsidiaries ^
1,092
857
^ As a condition of the Individual Order, Traffic Technologies Ltd and its subsidiary entities (the “Closed Group”)
entered into a Deed of Cross Guarantee on 28 June 2007. The effect of the deed is that Traffic Technologies Ltd has
guaranteed to pay any deficiency in the event of winding up of any controlled entity or if they do not meet their
obligations under the terms of overdrafts, loans, leases or other liabilities subject to the guarantee. The controlled
entities have also given a similar guarantee in the event that Traffic Technologies Ltd is wound up or if it does not
meet its obligation under the terms of overdrafts, loans or other liabilities subject to the guarantee.
94
Traffic Technologies Ltd
Traffic Technologies Ltd
Traffic Technologies Ltd
Directors’ Declaration
Directors’ Declaration
Directors’ Declaration
For the year ended 30 June 2011
For the year ended 30 June 2011
For the year ended 30 June 2011
Directors’ Declaration
Directors’ Declaration
Directors’ Declaration
The directors of the company declare that:
The directors of the company declare that:
The directors of the company declare that:
1.
1.
1.
The financial statements, comprising the statement of comprehensive income, statement of financial position,
The financial statements, comprising the statement of comprehensive income, statement of financial position,
The financial statements, comprising the statement of comprehensive income, statement of financial position,
statement of cash flows, statement of changes in equity, accompanying notes, are in accordance with the
statement of cash flows, statement of changes in equity, accompanying notes, are in accordance with the
statement of cash flows, statement of changes in equity, accompanying notes, are in accordance with the
Corporations Act 2001 and:
Corporations Act 2001 and:
Corporations Act 2001 and:
(a)
(a)
(a)
(b)
(b)
(b)
comply with Accounting Standards and the Corporations Regulations 2001; and
comply with Accounting Standards and the Corporations Regulations 2001; and
comply with Accounting Standards and the Corporations Regulations 2001; and
give a true and fair view of the consolidated entity’s financial position as at 30 June 2011 and of its
give a true and fair view of the consolidated entity’s financial position as at 30 June 2011 and of its
give a true and fair view of the consolidated entity’s financial position as at 30 June 2011 and of its
performance for the year ended on that date.
performance for the year ended on that date.
performance for the year ended on that date.
1.
1.
1.
2.
2.
2.
3.
3.
3.
4.
4.
4.
The company has included in the notes to the financial statements an explicit and unreserved statement of
The company has included in the notes to the financial statements an explicit and unreserved statement of
The company has included in the notes to the financial statements an explicit and unreserved statement of
compliance with International Financial Reporting Standards.
compliance with International Financial Reporting Standards.
compliance with International Financial Reporting Standards.
In the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts
In the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts
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.
as and when they become due and payable.
as and when they become due and payable.
The remuneration disclosures included in pages 8 to 13 of the directors’ report (as part of audited Remuneration
The remuneration disclosures included in pages 8 to 13 of the directors’ report (as part of audited Remuneration
The remuneration disclosures included in pages 8 to 13 of the directors’ report (as part of audited Remuneration
Report), for the year ended 30 June 2011, comply with section 300A of the Corporations Act 2001.
Report), for the year ended 30 June 2011, comply with section 300A of the Corporations Act 2001.
Report), for the year ended 30 June 2011, comply with section 300A of the Corporations Act 2001.
The directors have been given the declarations by the chief executive officer and chief financial officer required
The directors have been given the declarations by the chief executive officer and chief financial officer required
The directors have been given the declarations by the chief executive officer and chief financial officer required
by section 295A.
by section 295A.
by section 295A.
The members of the Closed Group identified in note 22 are parties to the deed of cross guarantee under which each
The members of the Closed Group identified in note 22 are parties to the deed of cross guarantee under which each
The members of the Closed Group identified in note 22 are parties to the deed of cross guarantee under which each
company guarantees the debts of the others. At the date of this declaration there are reasonable grounds to believe
company guarantees the debts of the others. At the date of this declaration there are reasonable grounds to believe
company guarantees the debts of the others. At the date of this declaration there are reasonable grounds to believe
that the companies which are parties to this deed of cross guarantee will as a consolidated entity be able to meet any
that the companies which are parties to this deed of cross guarantee will as a consolidated entity be able to meet any
that the companies which are parties to this deed of cross guarantee will as a consolidated entity be able to meet any
obligations or liabilities to which they are, or may become, subject to, by virtue of the deed of cross guarantee
obligations or liabilities to which they are, or may become, subject to, by virtue of the deed of cross guarantee
obligations or liabilities to which they are, or may become, subject to, by virtue of the deed of cross guarantee
described in note 22.
described in note 22.
described in note 22.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of
the directors by:
the directors by:
the directors by:
On behalf of the Board
On behalf of the Board
On behalf of the Board
Alan Brown
Alan Brown
Alan Brown
Chairman
Chairman
Chairman
Melbourne
Melbourne
Melbourne
22 August 2011
22 August 2011
22 August 2011
95
95
95
(cid:1)
(cid:1)
(cid:2)(cid:3) (cid:4) (cid:5)(cid:6)(cid:5)(cid:3) (cid:4) (cid:5)(cid:3) (cid:7) (cid:1)(cid:8) (cid:9) (cid:4) (cid:2)(cid:7) (cid:10) (cid:11)(cid:12)(cid:13)(cid:1)(cid:11) (cid:5)(cid:6)(cid:10) (cid:11) (cid:7)(cid:1)(cid:1)
(cid:1)(cid:2)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:7)(cid:6)(cid:7)(cid:8)(cid:6)(cid:9)(cid:10)(cid:3)(cid:2)(cid:11)(cid:3)(cid:1)(cid:9)(cid:12)(cid:11)(cid:11)(cid:13)(cid:14)(cid:3)(cid:1)(cid:6)(cid:14)(cid:5)(cid:15)(cid:2)(cid:16)(cid:2)(cid:17)(cid:13)(cid:6)(cid:10)(cid:3)(cid:18)(cid:13)(cid:7)(cid:13)(cid:4)(cid:6)(cid:19)(cid:3)
(cid:11) (cid:14)(cid:15)(cid:16)(cid:17)(cid:18)(cid:1)(cid:16)(cid:19)(cid:1)(cid:18)(cid:20)(cid:14)(cid:1)(cid:21)(cid:22)(cid:19)(cid:23)(cid:19) (cid:24)(cid:22)(cid:23)(cid:25)(cid:1)(cid:11) (cid:14)(cid:15)(cid:16)(cid:17)(cid:18)(cid:1)
(cid:20) (cid:6)(cid:3)(cid:5)(cid:12)(cid:21)(cid:6)(cid:3)(cid:12)(cid:22)(cid:19)(cid:13)(cid:4)(cid:6)(cid:19)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:12)(cid:14)(cid:14)(cid:2)(cid:7)(cid:23)(cid:12)(cid:15)(cid:24)(cid:13)(cid:15)(cid:17)(cid:3)(cid:11)(cid:13)(cid:15)(cid:12)(cid:15)(cid:14)(cid:13)(cid:12)(cid:16)(cid:3)(cid:9)(cid:6)(cid:23)(cid:2)(cid:9)(cid:4)(cid:3)(cid:2)(cid:11)(cid:3)(cid:1)(cid:9)(cid:12)(cid:11)(cid:11)(cid:13)(cid:14)(cid:3)(cid:1)(cid:6)(cid:14)(cid:5)(cid:15)(cid:2)(cid:16)(cid:2)(cid:17)(cid:13)(cid:6)(cid:10)(cid:3)(cid:18)(cid:13)(cid:7)(cid:13)(cid:4)(cid:6)(cid:19)(cid:25)(cid:3)(cid:26) (cid:5)(cid:13)(cid:14)(cid:5)(cid:3)(cid:14)(cid:2)(cid:7)(cid:23)(cid:9)(cid:13)(cid:10)(cid:6)(cid:10)(cid:3)
(cid:4)(cid:5)(cid:6)(cid:3)(cid:14)(cid:2)(cid:15)(cid:10)(cid:2)(cid:16)(cid:13)(cid:19)(cid:12)(cid:4)(cid:6)(cid:19)(cid:3)(cid:10)(cid:4)(cid:12)(cid:4)(cid:6)(cid:7)(cid:6)(cid:15)(cid:4)(cid:3)(cid:2)(cid:11)(cid:3)(cid:11)(cid:13)(cid:15)(cid:12)(cid:15)(cid:14)(cid:13)(cid:12)(cid:16)(cid:3)(cid:23)(cid:2)(cid:10)(cid:13)(cid:4)(cid:13)(cid:2)(cid:15)(cid:3)(cid:12)(cid:10)(cid:3)(cid:12)(cid:4)(cid:3)(cid:27)(cid:28)(cid:3)(cid:29)(cid:22)(cid:15)(cid:6)(cid:3)(cid:30)(cid:28)(cid:31)(cid:31)(cid:25)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:14)(cid:2)(cid:15)(cid:10)(cid:2)(cid:16)(cid:13)(cid:19)(cid:12)(cid:4)(cid:6)(cid:19)(cid:3)(cid:10)(cid:4)(cid:12)(cid:4)(cid:6)(cid:7)(cid:6)(cid:15)(cid:4)(cid:3)(cid:2)(cid:11)(cid:3)
(cid:14)(cid:2)(cid:7)(cid:23)(cid:9)(cid:6)(cid:5)(cid:6)(cid:15)(cid:10)(cid:13)(cid:21)(cid:6)(cid:3)(cid:13)(cid:15)(cid:14)(cid:2)(cid:7)(cid:6)(cid:25)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:14)(cid:2)(cid:15)(cid:10)(cid:2)(cid:16)(cid:13)(cid:19)(cid:12)(cid:4)(cid:6)(cid:19)(cid:3)(cid:10)(cid:4)(cid:12)(cid:4)(cid:6)(cid:7)(cid:6)(cid:15)(cid:4)(cid:3)(cid:2)(cid:11)(cid:3)(cid:14)(cid:5)(cid:12)(cid:15)(cid:17)(cid:6)(cid:10)(cid:3)(cid:13)(cid:15)(cid:3)(cid:6) (cid:22)(cid:13)(cid:4)(cid:24)(cid:3)(cid:12)(cid:15)(cid:19)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:14)(cid:2)(cid:15)(cid:10)(cid:2)(cid:16)(cid:13)(cid:19)(cid:12)(cid:4)(cid:6)(cid:19)(cid:3)
(cid:10)(cid:4)(cid:12)(cid:4)(cid:6)(cid:7)(cid:6)(cid:15)(cid:4)(cid:3)(cid:2)(cid:11)(cid:3)(cid:14)(cid:12)(cid:10)(cid:5)(cid:3)(cid:11)(cid:16)(cid:2)(cid:26) (cid:10)(cid:3)(cid:11)(cid:2)(cid:9)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:24)(cid:6)(cid:12)(cid:9)(cid:3)(cid:4)(cid:5)(cid:6)(cid:15)(cid:3)(cid:6)(cid:15)(cid:19)(cid:6)(cid:19)(cid:25)(cid:3)(cid:15)(cid:2)(cid:4)(cid:6)(cid:10)(cid:3)(cid:14)(cid:2)(cid:7)(cid:23)(cid:9)(cid:13)(cid:10)(cid:13)(cid:15)(cid:17)(cid:3)(cid:12)(cid:3)(cid:10)(cid:22)(cid:7)(cid:7)(cid:12)(cid:9)(cid:24)(cid:3)(cid:2)(cid:11)(cid:3)(cid:10)(cid:13)(cid:17)(cid:15)(cid:13)(cid:11)(cid:13)(cid:14)(cid:12)(cid:15)(cid:4)(cid:3)(cid:12)(cid:14)(cid:14)(cid:2)(cid:22)(cid:15)(cid:4)(cid:13)(cid:15)(cid:17)(cid:3)
(cid:23)(cid:2)(cid:16)(cid:13)(cid:14)(cid:13)(cid:6)(cid:10)(cid:3)(cid:12)(cid:15)(cid:19)(cid:3)(cid:2)(cid:4)(cid:5)(cid:6)(cid:9)(cid:3)(cid:6)!(cid:23)(cid:16)(cid:12)(cid:15)(cid:12)(cid:4)(cid:2)(cid:9)(cid:24)(cid:3)(cid:13)(cid:15)(cid:11)(cid:2)(cid:9)(cid:7)(cid:12)(cid:4)(cid:13)(cid:2)(cid:15)(cid:25)(cid:3)(cid:12)(cid:15)(cid:19)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:19)(cid:13)(cid:9)(cid:6)(cid:14)(cid:4)(cid:2)(cid:9)(cid:10)"(cid:3)(cid:19)(cid:6)(cid:14)(cid:16)(cid:12)(cid:9)(cid:12)(cid:4)(cid:13)(cid:2)(cid:15)(cid:3)(cid:2)(cid:11)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:14)(cid:2)(cid:15)(cid:10)(cid:2)(cid:16)(cid:13)(cid:19)(cid:12)(cid:4)(cid:6)(cid:19)(cid:3)(cid:6)(cid:15)(cid:4)(cid:13)(cid:4)(cid:24)(cid:3)
(cid:14)(cid:2)(cid:7)(cid:23)(cid:9)(cid:13)(cid:10)(cid:13)(cid:15)(cid:17)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:14)(cid:2)(cid:7)(cid:23)(cid:12)(cid:15)(cid:24)(cid:3)(cid:12)(cid:15)(cid:19)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:6)(cid:15)(cid:4)(cid:13)(cid:4)(cid:13)(cid:6)(cid:10)(cid:3)(cid:13)(cid:4)(cid:3)(cid:14)(cid:2)(cid:15)(cid:4)(cid:9)(cid:2)(cid:16)(cid:16)(cid:6)(cid:19)(cid:3)(cid:12)(cid:4)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:24)(cid:6)(cid:12)(cid:9)"(cid:10)(cid:3)(cid:6)(cid:15)(cid:19)(cid:3)(cid:2)(cid:9)(cid:3)(cid:11)(cid:9)(cid:2)(cid:7)(cid:3)(cid:4)(cid:13)(cid:7)(cid:6)(cid:3)(cid:4)(cid:2)(cid:3)(cid:4)(cid:13)(cid:7)(cid:6)(cid:3)(cid:19)(cid:22)(cid:9)(cid:13)(cid:15)(cid:17)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)
(cid:11)(cid:13)(cid:15)(cid:12)(cid:15)(cid:14)(cid:13)(cid:12)(cid:16)(cid:3)(cid:24)(cid:6)(cid:12)(cid:9)#(cid:3)
(cid:4) (cid:22)(cid:17)(cid:14)(cid:24)(cid:18)(cid:16)(cid:17)(cid:26)(cid:12)(cid:1)(cid:11) (cid:14)(cid:26)(cid:15)(cid:16)(cid:19)(cid:26)(cid:22)(cid:27)(cid:22)(cid:25)(cid:22)(cid:18)(cid:28)(cid:1)(cid:29)(cid:16)(cid:17)(cid:1)(cid:18)(cid:20)(cid:14)(cid:1)(cid:21)(cid:22)(cid:19)(cid:23)(cid:19)(cid:24)(cid:22)(cid:23)(cid:25)(cid:1)(cid:11) (cid:14)(cid:15)(cid:16)(cid:17)(cid:18)(cid:1)
(cid:1)(cid:5)(cid:6)(cid:3)(cid:19)(cid:13)(cid:9)(cid:6)(cid:14)(cid:4)(cid:2)(cid:9)(cid:10)(cid:3)(cid:2)(cid:11)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:14)(cid:2)(cid:7)(cid:23)(cid:12)(cid:15)(cid:24)(cid:3)(cid:12)(cid:9)(cid:6)(cid:3)(cid:9)(cid:6)(cid:10)(cid:23)(cid:2)(cid:15)(cid:10)(cid:13)(cid:8)(cid:16)(cid:6)(cid:3)(cid:11)(cid:2)(cid:9)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:23)(cid:9)(cid:6)(cid:23)(cid:12)(cid:9)(cid:12)(cid:4)(cid:13)(cid:2)(cid:15)(cid:3)(cid:2)(cid:11)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:11)(cid:13)(cid:15)(cid:12)(cid:15)(cid:14)(cid:13)(cid:12)(cid:16)(cid:3)(cid:9)(cid:6)(cid:23)(cid:2)(cid:9)(cid:4)(cid:3)(cid:4)(cid:5)(cid:12)(cid:4)(cid:3)(cid:17)(cid:13)(cid:21)(cid:6)(cid:10)(cid:3)(cid:12)(cid:3)
(cid:4)(cid:9)(cid:22)(cid:6)(cid:3)(cid:12)(cid:15)(cid:19)(cid:3)(cid:11)(cid:12)(cid:13)(cid:9)(cid:3)(cid:21)(cid:13)(cid:6)(cid:26) (cid:3)(cid:13)(cid:15)(cid:3)(cid:12)(cid:14)(cid:14)(cid:2)(cid:9)(cid:19)(cid:12)(cid:15)(cid:14)(cid:6)(cid:3)(cid:26) (cid:13)(cid:4)(cid:5)(cid:3)$ (cid:22)(cid:10)(cid:4)(cid:9)(cid:12)(cid:16)(cid:13)(cid:12)(cid:15)(cid:3)$(cid:14)(cid:14)(cid:2)(cid:22)(cid:15)(cid:4)(cid:13)(cid:15)(cid:17)(cid:3)%(cid:4)(cid:12)(cid:15)(cid:19)(cid:12)(cid:9)(cid:19)(cid:10)(cid:3)(cid:12)(cid:15)(cid:19)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:1)(cid:2)(cid:3)(cid:4)(cid:2)(cid:3)(cid:5)(cid:6)(cid:7)(cid:2)(cid:8)(cid:9)(cid:10)(cid:11)(cid:12)(cid:6)(cid:10)(cid:13)(cid:14)(cid:14)(cid:15)(cid:10)
(cid:12)(cid:15)(cid:19)(cid:3)(cid:11)(cid:2)(cid:9)(cid:3)(cid:10)(cid:22)(cid:14)(cid:5)(cid:3)(cid:13)(cid:15)(cid:4)(cid:6)(cid:9)(cid:15)(cid:12)(cid:16)(cid:3)(cid:14)(cid:2)(cid:15)(cid:4)(cid:9)(cid:2)(cid:16)(cid:3)(cid:12)(cid:10)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:19)(cid:13)(cid:9)(cid:6)(cid:14)(cid:4)(cid:2)(cid:9)(cid:10)(cid:3)(cid:19)(cid:6)(cid:4)(cid:6)(cid:9)(cid:7)(cid:13)(cid:15)(cid:6)(cid:3)(cid:13)(cid:10)(cid:3)(cid:15)(cid:6)(cid:14)(cid:6)(cid:10)(cid:10)(cid:12)(cid:9)(cid:24)(cid:3)(cid:4)(cid:2)(cid:3)(cid:6)(cid:15)(cid:12)(cid:8)(cid:16)(cid:6)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:23)(cid:9)(cid:6)(cid:23)(cid:12)(cid:9)(cid:12)(cid:4)(cid:13)(cid:2)(cid:15)(cid:3)(cid:2)(cid:11)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)
(cid:11)(cid:13)(cid:15)(cid:12)(cid:15)(cid:14)(cid:13)(cid:12)(cid:16)(cid:3)(cid:9)(cid:6)(cid:23)(cid:2)(cid:9)(cid:4)(cid:3)(cid:4)(cid:5)(cid:12)(cid:4)(cid:3)(cid:13)(cid:10)(cid:3)(cid:11)(cid:9)(cid:6)(cid:6)(cid:3)(cid:11)(cid:9)(cid:2)(cid:7)(cid:3)(cid:7)(cid:12)(cid:4)(cid:6)(cid:9)(cid:13)(cid:12)(cid:16)(cid:3)(cid:7)(cid:13)(cid:10)(cid:10)(cid:4)(cid:12)(cid:4)(cid:6)(cid:7)(cid:6)(cid:15)(cid:4)(cid:25)(cid:3)(cid:26) (cid:5)(cid:6)(cid:4)(cid:5)(cid:6)(cid:9)(cid:3)(cid:19)(cid:22)(cid:6)(cid:3)(cid:4)(cid:2)(cid:3)(cid:11)(cid:9)(cid:12)(cid:22)(cid:19)(cid:3)(cid:2)(cid:9)(cid:3)(cid:6)(cid:9)(cid:9)(cid:2)(cid:9)#(cid:3)&(cid:15)(cid:3)’ (cid:2)(cid:4)(cid:6)(cid:3)(cid:31)(cid:3)(cid:12)((cid:25)(cid:3)
(cid:4)(cid:5)(cid:6)(cid:3)(cid:19)(cid:13)(cid:9)(cid:6)(cid:14)(cid:4)(cid:2)(cid:9)(cid:10)(cid:3)(cid:12)(cid:16)(cid:10)(cid:2)(cid:3)(cid:10)(cid:4)(cid:12)(cid:4)(cid:6)(cid:25)(cid:3)(cid:13)(cid:15)(cid:3)(cid:12)(cid:14)(cid:14)(cid:2)(cid:9)(cid:19)(cid:12)(cid:15)(cid:14)(cid:6)(cid:3)(cid:26) (cid:13)(cid:4)(cid:5)(cid:3)$(cid:14)(cid:14)(cid:2)(cid:22)(cid:15)(cid:4)(cid:13)(cid:15)(cid:17)(cid:3)%(cid:4)(cid:12)(cid:15)(cid:19)(cid:12)(cid:9)(cid:19)(cid:3)$$%)(cid:3)(cid:31)(cid:28)(cid:31)(cid:3)(cid:16)(cid:3)(cid:17)(cid:9)(cid:17)(cid:8)(cid:6)(cid:5)(cid:6)(cid:7)(cid:2)(cid:8)(cid:10)(cid:2)(cid:18)(cid:10)(cid:19)(cid:7)(cid:8)(cid:5)(cid:8)(cid:12)(cid:7)(cid:5)(cid:20)(cid:10)
(cid:21)(cid:6)(cid:5)(cid:6)(cid:17)(cid:22) (cid:17)(cid:8)(cid:6)(cid:9)(cid:25)(cid:3)(cid:4)(cid:5)(cid:12)(cid:4)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:11)(cid:13)(cid:15)(cid:12)(cid:15)(cid:14)(cid:13)(cid:12)(cid:16)(cid:3)(cid:10)(cid:4)(cid:12)(cid:4)(cid:6)(cid:7)(cid:6)(cid:15)(cid:4)(cid:10)(cid:3)(cid:14)(cid:2)(cid:7)(cid:23)(cid:16)(cid:24)(cid:3)(cid:26) (cid:13)(cid:4)(cid:5)(cid:3)(cid:23)(cid:8)(cid:6)(cid:17)(cid:3)(cid:8)(cid:5)(cid:6)(cid:7)(cid:2)(cid:8)(cid:5)(cid:20)(cid:10)(cid:19)(cid:7)(cid:8)(cid:5)(cid:8)(cid:12)(cid:7)(cid:5)(cid:20)(cid:10)(cid:24)(cid:17)(cid:4)(cid:2)(cid:3)(cid:6)(cid:7)(cid:8)(cid:25)(cid:10)(cid:21)(cid:6)(cid:5)(cid:8)(cid:26)(cid:5)(cid:3)(cid:26)(cid:9)#(cid:3)
(cid:8) (cid:30)(cid:31)(cid:22)(cid:18)(cid:16)(cid:17)(cid:12)(cid:26)(cid:1)(cid:11) (cid:14)(cid:26)(cid:15)(cid:16)(cid:19)(cid:26)(cid:22)(cid:27)(cid:22)(cid:25)(cid:22)(cid:18)(cid:28)(cid:1)(cid:1)
* (cid:22)(cid:9)(cid:3)(cid:9)(cid:6)(cid:10)(cid:23)(cid:2)(cid:15)(cid:10)(cid:13)(cid:8)(cid:13)(cid:16)(cid:13)(cid:4)(cid:24)(cid:3)(cid:13)(cid:10)(cid:3)(cid:4)(cid:2)(cid:3)(cid:6)!(cid:23)(cid:9)(cid:6)(cid:10)(cid:10)(cid:3)(cid:12)(cid:15)(cid:3)(cid:2)(cid:23)(cid:13)(cid:15)(cid:13)(cid:2)(cid:15)(cid:3)(cid:2)(cid:15)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:11)(cid:13)(cid:15)(cid:12)(cid:15)(cid:14)(cid:13)(cid:12)(cid:16)(cid:3)(cid:9)(cid:6)(cid:23)(cid:2)(cid:9)(cid:4)(cid:3)(cid:8)(cid:12)(cid:10)(cid:6)(cid:19)(cid:3)(cid:2)(cid:15)(cid:3)(cid:2)(cid:22)(cid:9)(cid:3)(cid:12)(cid:22)(cid:19)(cid:13)(cid:4)#(cid:3)(cid:20) (cid:6)(cid:3)(cid:14)(cid:2)(cid:15)(cid:19)(cid:22)(cid:14)(cid:4)(cid:6)(cid:19)(cid:3)(cid:2)(cid:22)(cid:9)(cid:3)
(cid:12)(cid:22)(cid:19)(cid:13)(cid:4)(cid:3)(cid:13)(cid:15)(cid:3)(cid:12)(cid:14)(cid:14)(cid:2)(cid:9)(cid:19)(cid:12)(cid:15)(cid:14)(cid:6)(cid:3)(cid:26) (cid:13)(cid:4)(cid:5)(cid:3)$ (cid:22)(cid:10)(cid:4)(cid:9)(cid:12)(cid:16)(cid:13)(cid:12)(cid:15)(cid:3)$ (cid:22)(cid:19)(cid:13)(cid:4)(cid:13)(cid:15)(cid:17)(cid:3)%(cid:4)(cid:12)(cid:15)(cid:19)(cid:12)(cid:9)(cid:19)(cid:10)#(cid:3)(cid:1)(cid:5)(cid:2)(cid:10)(cid:6)(cid:3)(cid:10)(cid:4)(cid:12)(cid:15)(cid:19)(cid:12)(cid:9)(cid:19)(cid:10)(cid:3)(cid:9)(cid:6) (cid:22)(cid:13)(cid:9)(cid:6)(cid:3)(cid:4)(cid:5)(cid:12)(cid:4)(cid:3)(cid:26) (cid:6)(cid:3)(cid:14)(cid:2)(cid:7)(cid:23)(cid:16)(cid:24)(cid:3)(cid:26) (cid:13)(cid:4)(cid:5)(cid:3)
(cid:9)(cid:6)(cid:16)(cid:6)(cid:21)(cid:12)(cid:15)(cid:4)(cid:3)(cid:6)(cid:4)(cid:5)(cid:13)(cid:14)(cid:12)(cid:16)(cid:3)(cid:9)(cid:6) (cid:22)(cid:13)(cid:9)(cid:6)(cid:7)(cid:6)(cid:15)(cid:4)(cid:10)(cid:3)(cid:9)(cid:6)(cid:16)(cid:12)(cid:4)(cid:13)(cid:15)(cid:17)(cid:3)(cid:4)(cid:2)(cid:3)(cid:12)(cid:22)(cid:19)(cid:13)(cid:4)(cid:3)(cid:6)(cid:15)(cid:17)(cid:12)(cid:17)(cid:6)(cid:7)(cid:6)(cid:15)(cid:4)(cid:10)(cid:3)(cid:12)(cid:15)(cid:19)(cid:3)(cid:23)(cid:16)(cid:12)(cid:15)(cid:3)(cid:12)(cid:15)(cid:19)(cid:3)(cid:23)(cid:6)(cid:9)(cid:11)(cid:2)(cid:9)(cid:7)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:12)(cid:22)(cid:19)(cid:13)(cid:4)(cid:3)(cid:4)(cid:2)(cid:3)(cid:2)(cid:8)(cid:4)(cid:12)(cid:13)(cid:15)(cid:3)
(cid:9)(cid:6)(cid:12)(cid:10)(cid:2)(cid:15)(cid:12)(cid:8)(cid:16)(cid:6)(cid:3)(cid:12)(cid:10)(cid:10)(cid:22)(cid:9)(cid:12)(cid:15)(cid:14)(cid:6)(cid:3)(cid:12)(cid:8)(cid:2)(cid:22)(cid:4)(cid:3)(cid:26) (cid:5)(cid:6)(cid:4)(cid:5)(cid:6)(cid:9)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:11)(cid:13)(cid:15)(cid:12)(cid:15)(cid:14)(cid:13)(cid:12)(cid:16)(cid:3)(cid:9)(cid:6)(cid:23)(cid:2)(cid:9)(cid:4)(cid:3)(cid:13)(cid:10)(cid:3)(cid:11)(cid:9)(cid:6)(cid:6)(cid:3)(cid:11)(cid:9)(cid:2)(cid:7)(cid:3)(cid:7)(cid:12)(cid:4)(cid:6)(cid:9)(cid:13)(cid:12)(cid:16)(cid:3)(cid:7)(cid:13)(cid:10)(cid:10)(cid:4)(cid:12)(cid:4)(cid:6)(cid:7)(cid:6)(cid:15)(cid:4)#(cid:3)(cid:3)(cid:3)
$(cid:15)(cid:3)(cid:12)(cid:22)(cid:19)(cid:13)(cid:4)(cid:3)(cid:13)(cid:15)(cid:21)(cid:2)(cid:16)(cid:21)(cid:6)(cid:10)(cid:3)(cid:23)(cid:6)(cid:9)(cid:11)(cid:2)(cid:9)(cid:7)(cid:13)(cid:15)(cid:17)(cid:3)(cid:23)(cid:9)(cid:2)(cid:14)(cid:6)(cid:19)(cid:22)(cid:9)(cid:6)(cid:10)(cid:3)(cid:4)(cid:2)(cid:3)(cid:2)(cid:8)(cid:4)(cid:12)(cid:13)(cid:15)(cid:3)(cid:12)(cid:22)(cid:19)(cid:13)(cid:4)(cid:3)(cid:6)(cid:21)(cid:13)(cid:19)(cid:6)(cid:15)(cid:14)(cid:6)(cid:3)(cid:12)(cid:8)(cid:2)(cid:22)(cid:4)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:12)(cid:7)(cid:2)(cid:22)(cid:15)(cid:4)(cid:10)(cid:3)(cid:12)(cid:15)(cid:19)(cid:3)(cid:19)(cid:13)(cid:10)(cid:14)(cid:16)(cid:2)(cid:10)(cid:22)(cid:9)(cid:6)(cid:10)(cid:3)(cid:13)(cid:15)(cid:3)
(cid:4)(cid:5)(cid:6)(cid:3)(cid:11)(cid:13)(cid:15)(cid:12)(cid:15)(cid:14)(cid:13)(cid:12)(cid:16)(cid:3)(cid:9)(cid:6)(cid:23)(cid:2)(cid:9)(cid:4)#(cid:3)(cid:1)(cid:5)(cid:6)(cid:3)(cid:23)(cid:9)(cid:2)(cid:14)(cid:6)(cid:19)(cid:22)(cid:9)(cid:6)(cid:10)(cid:3)(cid:10)(cid:6)(cid:16)(cid:6)(cid:14)(cid:4)(cid:6)(cid:19)(cid:3)(cid:19)(cid:6)(cid:23)(cid:6)(cid:15)(cid:19)(cid:3)(cid:2)(cid:15)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:12)(cid:22)(cid:19)(cid:13)(cid:4)(cid:2)(cid:9)"(cid:10)(cid:3)+(cid:22)(cid:19)(cid:17)(cid:6)(cid:7)(cid:6)(cid:15)(cid:4)(cid:25)(cid:3)(cid:13)(cid:15)(cid:14)(cid:16)(cid:22)(cid:19)(cid:13)(cid:15)(cid:17)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)
(cid:12)(cid:10)(cid:10)(cid:6)(cid:10)(cid:10)(cid:7)(cid:6)(cid:15)(cid:4)(cid:3)(cid:2)(cid:11)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:9)(cid:13)(cid:10),(cid:10)(cid:3)(cid:2)(cid:11)(cid:3)(cid:7)(cid:12)(cid:4)(cid:6)(cid:9)(cid:13)(cid:12)(cid:16)(cid:3)(cid:7)(cid:13)(cid:10)(cid:10)(cid:4)(cid:12)(cid:4)(cid:6)(cid:7)(cid:6)(cid:15)(cid:4)(cid:3)(cid:2)(cid:11)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:11)(cid:13)(cid:15)(cid:12)(cid:15)(cid:14)(cid:13)(cid:12)(cid:16)(cid:3)(cid:9)(cid:6)(cid:23)(cid:2)(cid:9)(cid:4)(cid:25)(cid:3)(cid:26) (cid:5)(cid:6)(cid:4)(cid:5)(cid:6)(cid:9)(cid:3)(cid:19)(cid:22)(cid:6)(cid:3)(cid:4)(cid:2)(cid:3)(cid:11)(cid:9)(cid:12)(cid:22)(cid:19)(cid:3)(cid:2)(cid:9)(cid:3)(cid:6)(cid:9)(cid:9)(cid:2)(cid:9)#(cid:3)
&(cid:15)(cid:3)(cid:7)(cid:12),(cid:13)(cid:15)(cid:17)(cid:3)(cid:4)(cid:5)(cid:2)(cid:10)(cid:6)(cid:3)(cid:9)(cid:13)(cid:10),(cid:3)(cid:12)(cid:10)(cid:10)(cid:6)(cid:10)(cid:10)(cid:7)(cid:6)(cid:15)(cid:4)(cid:10)(cid:25)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:12)(cid:22)(cid:19)(cid:13)(cid:4)(cid:2)(cid:9)(cid:3)(cid:14)(cid:2)(cid:15)(cid:10)(cid:13)(cid:19)(cid:6)(cid:9)(cid:10)(cid:3)(cid:13)(cid:15)(cid:4)(cid:6)(cid:9)(cid:15)(cid:12)(cid:16)(cid:3)(cid:14)(cid:2)(cid:15)(cid:4)(cid:9)(cid:2)(cid:16)(cid:3)(cid:9)(cid:6)(cid:16)(cid:6)(cid:21)(cid:12)(cid:15)(cid:4)(cid:3)(cid:4)(cid:2)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:6)(cid:15)(cid:4)(cid:13)(cid:4)(cid:24)"(cid:10)(cid:3)
(cid:23)(cid:9)(cid:6)(cid:23)(cid:12)(cid:9)(cid:12)(cid:4)(cid:13)(cid:2)(cid:15)(cid:3)(cid:12)(cid:15)(cid:19)(cid:3)(cid:11)(cid:12)(cid:13)(cid:9)(cid:3)(cid:23)(cid:9)(cid:6)(cid:10)(cid:6)(cid:15)(cid:4)(cid:12)(cid:4)(cid:13)(cid:2)(cid:15)(cid:3)(cid:2)(cid:11)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:11)(cid:13)(cid:15)(cid:12)(cid:15)(cid:14)(cid:13)(cid:12)(cid:16)(cid:3)(cid:9)(cid:6)(cid:23)(cid:2)(cid:9)(cid:4)(cid:3)(cid:13)(cid:15)(cid:3)(cid:2)(cid:9)(cid:19)(cid:6)(cid:9)(cid:3)(cid:4)(cid:2)(cid:3)(cid:19)(cid:6)(cid:10)(cid:13)(cid:17)(cid:15)(cid:3)(cid:12)(cid:22)(cid:19)(cid:13)(cid:4)(cid:3)(cid:23)(cid:9)(cid:2)(cid:14)(cid:6)(cid:19)(cid:22)(cid:9)(cid:6)(cid:10)(cid:3)(cid:4)(cid:5)(cid:12)(cid:4)(cid:3)(cid:12)(cid:9)(cid:6)(cid:3)
(cid:12)(cid:23)(cid:23)(cid:9)(cid:2)(cid:23)(cid:9)(cid:13)(cid:12)(cid:4)(cid:6)(cid:3)(cid:13)(cid:15)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:14)(cid:13)(cid:9)(cid:14)(cid:22)(cid:7)(cid:10)(cid:4)(cid:12)(cid:15)(cid:14)(cid:6)(cid:10)(cid:25)(cid:3)(cid:8)(cid:22)(cid:4)(cid:3)(cid:15)(cid:2)(cid:4)(cid:3)(cid:11)(cid:2)(cid:9)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:23)(cid:22)(cid:9)(cid:23)(cid:2)(cid:10)(cid:6)(cid:3)(cid:2)(cid:11)(cid:3)(cid:6)!(cid:23)(cid:9)(cid:6)(cid:10)(cid:10)(cid:13)(cid:15)(cid:17)(cid:3)(cid:12)(cid:15)(cid:3)(cid:2)(cid:23)(cid:13)(cid:15)(cid:13)(cid:2)(cid:15)(cid:3)(cid:2)(cid:15)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:6)(cid:11)(cid:11)(cid:6)(cid:14)(cid:4)(cid:13)(cid:21)(cid:6)(cid:15)(cid:6)(cid:10)(cid:10)(cid:3)
(cid:2)(cid:11)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:6)(cid:15)(cid:4)(cid:13)(cid:4)(cid:24)"(cid:10)(cid:3)(cid:13)(cid:15)(cid:4)(cid:6)(cid:9)(cid:15)(cid:12)(cid:16)(cid:3)(cid:14)(cid:2)(cid:15)(cid:4)(cid:9)(cid:2)(cid:16)#(cid:3)$(cid:15)(cid:3)(cid:12)(cid:22)(cid:19)(cid:13)(cid:4)(cid:3)(cid:12)(cid:16)(cid:10)(cid:2)(cid:3)(cid:13)(cid:15)(cid:14)(cid:16)(cid:22)(cid:19)(cid:6)(cid:10)(cid:3)(cid:6)(cid:21)(cid:12)(cid:16)(cid:22)(cid:12)(cid:4)(cid:13)(cid:15)(cid:17)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:12)(cid:23)(cid:23)(cid:9)(cid:2)(cid:23)(cid:9)(cid:13)(cid:12)(cid:4)(cid:6)(cid:15)(cid:6)(cid:10)(cid:10)(cid:3)(cid:2)(cid:11)(cid:3)(cid:12)(cid:14)(cid:14)(cid:2)(cid:22)(cid:15)(cid:4)(cid:13)(cid:15)(cid:17)(cid:3)
(cid:23)(cid:2)(cid:16)(cid:13)(cid:14)(cid:13)(cid:6)(cid:10)(cid:3)(cid:22)(cid:10)(cid:6)(cid:19)(cid:3)(cid:12)(cid:15)(cid:19)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:9)(cid:6)(cid:12)(cid:10)(cid:2)(cid:15)(cid:12)(cid:8)(cid:16)(cid:6)(cid:15)(cid:6)(cid:10)(cid:10)(cid:3)(cid:2)(cid:11)(cid:3)(cid:12)(cid:14)(cid:14)(cid:2)(cid:22)(cid:15)(cid:4)(cid:13)(cid:15)(cid:17)(cid:3)(cid:6)(cid:10)(cid:4)(cid:13)(cid:7)(cid:12)(cid:4)(cid:6)(cid:10)(cid:3)(cid:7)(cid:12)(cid:19)(cid:6)(cid:3)(cid:8)(cid:24)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:19)(cid:13)(cid:9)(cid:6)(cid:14)(cid:4)(cid:2)(cid:9)(cid:10)(cid:25)(cid:3)(cid:12)(cid:10)(cid:3)(cid:26) (cid:6)(cid:16)(cid:16)(cid:3)(cid:12)(cid:10)(cid:3)
(cid:6)(cid:21)(cid:12)(cid:16)(cid:22)(cid:12)(cid:4)(cid:13)(cid:15)(cid:17)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:2)(cid:21)(cid:6)(cid:9)(cid:12)(cid:16)(cid:16)(cid:3)(cid:23)(cid:9)(cid:6)(cid:10)(cid:6)(cid:15)(cid:4)(cid:12)(cid:4)(cid:13)(cid:2)(cid:15)(cid:3)(cid:2)(cid:11)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:11)(cid:13)(cid:15)(cid:12)(cid:15)(cid:14)(cid:13)(cid:12)(cid:16)(cid:3)(cid:9)(cid:6)(cid:23)(cid:2)(cid:9)(cid:4)#(cid:3)(cid:3)(cid:3)
(cid:3)
(cid:1)
(cid:20) (cid:6)(cid:3)(cid:8)(cid:6)(cid:16)(cid:13)(cid:6)(cid:21)(cid:6)(cid:3)(cid:4)(cid:5)(cid:12)(cid:4)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:12)(cid:22)(cid:19)(cid:13)(cid:4)(cid:3)(cid:6)(cid:21)(cid:13)(cid:19)(cid:6)(cid:15)(cid:14)(cid:6)(cid:3)(cid:26) (cid:6)(cid:3)(cid:5)(cid:12)(cid:21)(cid:6)(cid:3)(cid:2)(cid:8)(cid:4)(cid:12)(cid:13)(cid:15)(cid:6)(cid:19)(cid:3)(cid:13)(cid:10)(cid:3)(cid:10)(cid:22)(cid:11)(cid:11)(cid:13)(cid:14)(cid:13)(cid:6)(cid:15)(cid:4)(cid:3)(cid:12)(cid:15)(cid:19)(cid:3)(cid:12)(cid:23)(cid:23)(cid:9)(cid:2)(cid:23)(cid:9)(cid:13)(cid:12)(cid:4)(cid:6)(cid:3)(cid:4)(cid:2)(cid:3)(cid:23)(cid:9)(cid:2)(cid:21)(cid:13)(cid:19)(cid:6)(cid:3)(cid:12)(cid:3)(cid:8)(cid:12)(cid:10)(cid:13)(cid:10)(cid:3)
(cid:11)(cid:2)(cid:9)(cid:3)(cid:2)(cid:22)(cid:9)(cid:3)(cid:12)(cid:22)(cid:19)(cid:13)(cid:4)(cid:3)(cid:2)(cid:23)(cid:13)(cid:15)(cid:13)(cid:2)(cid:15)#(cid:3)(cid:3)(cid:3)
(cid:2)(cid:19)(cid:31)(cid:14)(cid:15)(cid:14)(cid:19) (cid:31)(cid:14)(cid:19)(cid:24)(cid:14)(cid:1)(cid:1)
&(cid:15)(cid:3)(cid:14)(cid:2)(cid:15)(cid:19)(cid:22)(cid:14)(cid:4)(cid:13)(cid:15)(cid:17)(cid:3)(cid:2)(cid:22)(cid:9)(cid:3)(cid:12)(cid:22)(cid:19)(cid:13)(cid:4)(cid:25)(cid:3)(cid:26) (cid:6)(cid:3)(cid:5)(cid:12)(cid:21)(cid:6)(cid:3)(cid:14)(cid:2)(cid:7)(cid:23)(cid:16)(cid:13)(cid:6)(cid:19)(cid:3)(cid:26) (cid:13)(cid:4)(cid:5)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:13)(cid:15)(cid:19)(cid:6)(cid:23)(cid:6)(cid:15)(cid:19)(cid:6)(cid:15)(cid:14)(cid:6)(cid:3)(cid:9)(cid:6) (cid:22)(cid:13)(cid:9)(cid:6)(cid:7)(cid:6)(cid:15)(cid:4)(cid:10)(cid:3)(cid:2)(cid:11)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:1)(cid:2)(cid:3)(cid:4)(cid:2)(cid:3)(cid:5)(cid:6)(cid:7)(cid:2)(cid:8)(cid:9)(cid:10)
(cid:11)(cid:12)(cid:6)(cid:10)(cid:13)(cid:14)(cid:14)(cid:15)#(cid:3)(cid:20) (cid:6)(cid:3)(cid:14)(cid:2)(cid:15)(cid:11)(cid:13)(cid:9)(cid:7)(cid:3)(cid:4)(cid:5)(cid:12)(cid:4)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:13)(cid:15)(cid:19)(cid:6)(cid:23)(cid:6)(cid:15)(cid:19)(cid:6)(cid:15)(cid:14)(cid:6)(cid:3)(cid:19)(cid:6)(cid:14)(cid:16)(cid:12)(cid:9)(cid:12)(cid:4)(cid:13)(cid:2)(cid:15)(cid:3)(cid:9)(cid:6) (cid:22)(cid:13)(cid:9)(cid:6)(cid:19)(cid:3)(cid:8)(cid:24)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:1)(cid:2)(cid:3)(cid:4)(cid:2)(cid:3)(cid:5)(cid:6)(cid:7)(cid:2)(cid:8)(cid:9)(cid:10)(cid:11)(cid:12)(cid:6)(cid:10)(cid:13)(cid:14)(cid:14)(cid:15)(cid:25)(cid:3)(cid:26) (cid:5)(cid:13)(cid:14)(cid:5)(cid:3)
(cid:5)(cid:12)(cid:10)(cid:3)(cid:8)(cid:6)(cid:6)(cid:15)(cid:3)(cid:17)(cid:13)(cid:21)(cid:6)(cid:15)(cid:3)(cid:4)(cid:2)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:19)(cid:13)(cid:9)(cid:6)(cid:14)(cid:4)(cid:2)(cid:9)(cid:10)(cid:3)(cid:2)(cid:11)(cid:3)(cid:1)(cid:9)(cid:12)(cid:11)(cid:11)(cid:13)(cid:14)(cid:3)(cid:1)(cid:6)(cid:14)(cid:5)(cid:15)(cid:2)(cid:16)(cid:2)(cid:17)(cid:13)(cid:6)(cid:10)(cid:3)(cid:18)(cid:13)(cid:7)(cid:13)(cid:4)(cid:6)(cid:19)(cid:25)(cid:3)(cid:26) (cid:2)(cid:22)(cid:16)(cid:19)(cid:3)(cid:8)(cid:6)(cid:3)(cid:13)(cid:15)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:10)(cid:12)(cid:7)(cid:6)(cid:3)(cid:4)(cid:6)(cid:9)(cid:7)(cid:10)(cid:3)(cid:13)(cid:11)(cid:3)(cid:17)(cid:13)(cid:21)(cid:6)(cid:15)(cid:3)(cid:4)(cid:2)(cid:3)
(cid:4)(cid:5)(cid:6)(cid:3)(cid:19)(cid:13)(cid:9)(cid:6)(cid:14)(cid:4)(cid:2)(cid:9)(cid:10)(cid:3)(cid:12)(cid:10)(cid:3)(cid:12)(cid:4)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:4)(cid:13)(cid:7)(cid:6)(cid:3)(cid:2)(cid:11)(cid:3)(cid:4)(cid:5)(cid:13)(cid:10)(cid:3)(cid:12)(cid:22)(cid:19)(cid:13)(cid:4)(cid:2)(cid:9)"(cid:10)(cid:3)(cid:9)(cid:6)(cid:23)(cid:2)(cid:9)(cid:4)#(cid:3)
(cid:10) (cid:15)(cid:22)(cid:19)(cid:22)(cid:16)(cid:19) (cid:1)(cid:1)
&(cid:15)(cid:3)(cid:2)(cid:22)(cid:9)(cid:3)(cid:2)(cid:23)(cid:13)(cid:15)(cid:13)(cid:2)(cid:15)-(cid:3)(cid:3)
.(cid:12)((cid:3)(cid:3) (cid:4)(cid:5)(cid:6)(cid:3)(cid:11)(cid:13)(cid:15)(cid:12)(cid:15)(cid:14)(cid:13)(cid:12)(cid:16)(cid:3)(cid:9)(cid:6)(cid:23)(cid:2)(cid:9)(cid:4)(cid:3)(cid:2)(cid:11)(cid:3)(cid:1)(cid:9)(cid:12)(cid:11)(cid:11)(cid:13)(cid:14)(cid:3)(cid:1)(cid:6)(cid:14)(cid:5)(cid:15)(cid:2)(cid:16)(cid:2)(cid:17)(cid:13)(cid:6)(cid:10)(cid:3)(cid:18)(cid:13)(cid:7)(cid:13)(cid:4)(cid:6)(cid:19)(cid:3)(cid:13)(cid:10)(cid:3)(cid:13)(cid:15)(cid:3)(cid:12)(cid:14)(cid:14)(cid:2)(cid:9)(cid:19)(cid:12)(cid:15)(cid:14)(cid:6)(cid:3)(cid:26) (cid:13)(cid:4)(cid:5)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:1)(cid:2)(cid:3)(cid:4)(cid:2)(cid:3)(cid:5)(cid:6)(cid:7)(cid:2)(cid:8)(cid:9)(cid:10)(cid:11)(cid:12)(cid:6)(cid:10)
(cid:13)(cid:14)(cid:14)(cid:15)(cid:25)(cid:3)(cid:13)(cid:15)(cid:14)(cid:16)(cid:22)(cid:19)(cid:13)(cid:15)(cid:17)-(cid:3)(cid:3)
.(cid:13)( (cid:17)(cid:13)(cid:21)(cid:13)(cid:15)(cid:17)(cid:3)(cid:12)(cid:3)(cid:4)(cid:9)(cid:22)(cid:6)(cid:3)(cid:12)(cid:15)(cid:19)(cid:3)(cid:11)(cid:12)(cid:13)(cid:9)(cid:3)(cid:21)(cid:13)(cid:6)(cid:26) (cid:3)(cid:2)(cid:11)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:14)(cid:2)(cid:15)(cid:10)(cid:2)(cid:16)(cid:13)(cid:19)(cid:12)(cid:4)(cid:6)(cid:19)(cid:3)(cid:6)(cid:15)(cid:4)(cid:13)(cid:4)(cid:24)"(cid:10)(cid:3)(cid:11)(cid:13)(cid:15)(cid:12)(cid:15)(cid:14)(cid:13)(cid:12)(cid:16)(cid:3)(cid:23)(cid:2)(cid:10)(cid:13)(cid:4)(cid:13)(cid:2)(cid:15)(cid:3)(cid:12)(cid:10)(cid:3)(cid:12)(cid:4)(cid:3)(cid:27)(cid:28)(cid:3)(cid:29)(cid:22)(cid:15)(cid:6)(cid:3)(cid:30)(cid:28)(cid:31)(cid:31)(cid:3)(cid:12)(cid:15)(cid:19)(cid:3)
(cid:2)(cid:11)(cid:3)(cid:13)(cid:4)(cid:10)(cid:3)(cid:23)(cid:6)(cid:9)(cid:11)(cid:2)(cid:9)(cid:7)(cid:12)(cid:15)(cid:14)(cid:6)(cid:3)(cid:11)(cid:2)(cid:9)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:24)(cid:6)(cid:12)(cid:9)(cid:3)(cid:6)(cid:15)(cid:19)(cid:6)(cid:19)(cid:3)(cid:2)(cid:15)(cid:3)(cid:4)(cid:5)(cid:12)(cid:4)(cid:3)(cid:19)(cid:12)(cid:4)(cid:6)/(cid:3)(cid:12)(cid:15)(cid:19)(cid:3)(cid:3)
.(cid:13)(cid:13)( (cid:14)(cid:2)(cid:7)(cid:23)(cid:16)(cid:24)(cid:13)(cid:15)(cid:17)(cid:3)(cid:26) (cid:13)(cid:4)(cid:5)(cid:3)$ (cid:22)(cid:10)(cid:4)(cid:9)(cid:12)(cid:16)(cid:13)(cid:12)(cid:15)(cid:3)$(cid:14)(cid:14)(cid:2)(cid:22)(cid:15)(cid:4)(cid:13)(cid:15)(cid:17)(cid:3)%(cid:4)(cid:12)(cid:15)(cid:19)(cid:12)(cid:9)(cid:19)(cid:10)(cid:3)(cid:12)(cid:15)(cid:19)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:1)(cid:2)(cid:3)(cid:4)(cid:2)(cid:3)(cid:5)(cid:6)(cid:7)(cid:2)(cid:8)(cid:9)(cid:10)(cid:24)(cid:17)(cid:25)(cid:27)(cid:20)(cid:5)(cid:6)(cid:7)(cid:2)(cid:8)(cid:9)(cid:10)(cid:13)(cid:14)(cid:14)(cid:15)/(cid:3)(cid:12)(cid:15)(cid:19)(cid:3)(cid:3)
.(cid:8)((cid:3) (cid:4)(cid:5)(cid:6)(cid:3)(cid:11)(cid:13)(cid:15)(cid:12)(cid:15)(cid:14)(cid:13)(cid:12)(cid:16)(cid:3)(cid:9)(cid:6)(cid:23)(cid:2)(cid:9)(cid:4)(cid:3)(cid:12)(cid:16)(cid:10)(cid:2)(cid:3)(cid:14)(cid:2)(cid:7)(cid:23)(cid:16)(cid:13)(cid:6)(cid:10)(cid:3)(cid:26) (cid:13)(cid:4)(cid:5)(cid:3)(cid:23)(cid:8)(cid:6)(cid:17)(cid:3)(cid:8)(cid:5)(cid:6)(cid:7)(cid:2)(cid:8)(cid:5)(cid:20)(cid:10)(cid:19)(cid:7)(cid:8)(cid:5)(cid:8)(cid:12)(cid:7)(cid:5)(cid:20)(cid:10)(cid:24)(cid:17)(cid:4)(cid:2)(cid:3)(cid:6)(cid:7)(cid:8)(cid:25)(cid:10)(cid:21)(cid:6)(cid:5)(cid:8)(cid:26)(cid:5)(cid:3)(cid:26)(cid:9)(cid:3)(cid:12)(cid:10)(cid:3)(cid:19)(cid:13)(cid:10)(cid:14)(cid:16)(cid:2)(cid:10)(cid:6)(cid:19)(cid:3)(cid:13)(cid:15)(cid:3)
’ (cid:2)(cid:4)(cid:6)(cid:3)(cid:31)(cid:3)(cid:12)(#(cid:3)
(cid:11) (cid:14)(cid:15)(cid:16)(cid:17)(cid:18)(cid:1)(cid:16)(cid:19)(cid:1)(cid:18)(cid:20)(cid:14)(cid:1)(cid:11) (cid:14) (cid:30)(cid:19)(cid:14)(cid:17)(cid:23)(cid:18)(cid:22)(cid:16)(cid:19)(cid:1)(cid:11) (cid:14)(cid:15)(cid:16)(cid:17)(cid:18)(cid:1)
(cid:20) (cid:6)(cid:3)(cid:5)(cid:12)(cid:21)(cid:6)(cid:3)(cid:12)(cid:22)(cid:19)(cid:13)(cid:4)(cid:6)(cid:19)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)0(cid:6)(cid:7)(cid:22)(cid:15)(cid:6)(cid:9)(cid:12)(cid:4)(cid:13)(cid:2)(cid:15)(cid:3)0(cid:6)(cid:23)(cid:2)(cid:9)(cid:4)(cid:3)(cid:13)(cid:15)(cid:14)(cid:16)(cid:22)(cid:19)(cid:6)(cid:19)(cid:3)(cid:13)(cid:15)(cid:3)(cid:23)(cid:12)(cid:17)(cid:6)(cid:10)(cid:3)1(cid:3)(cid:4)(cid:2)(cid:3)(cid:31)(cid:27)(cid:3)(cid:2)(cid:11)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:19)(cid:13)(cid:9)(cid:6)(cid:14)(cid:4)(cid:2)(cid:9)(cid:10)"(cid:3)(cid:9)(cid:6)(cid:23)(cid:2)(cid:9)(cid:4)(cid:3)(cid:11)(cid:2)(cid:9)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)
(cid:24)(cid:6)(cid:12)(cid:9)(cid:3)(cid:6)(cid:15)(cid:19)(cid:6)(cid:19)(cid:3)(cid:27)(cid:28)(cid:3)(cid:29)(cid:22)(cid:15)(cid:6)(cid:3)(cid:30)(cid:28)(cid:31)(cid:31)#(cid:3)(cid:1)(cid:5)(cid:6)(cid:3)(cid:19)(cid:13)(cid:9)(cid:6)(cid:14)(cid:4)(cid:2)(cid:9)(cid:10)(cid:3)(cid:2)(cid:11)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:14)(cid:2)(cid:7)(cid:23)(cid:12)(cid:15)(cid:24)(cid:3)(cid:12)(cid:9)(cid:6)(cid:3)(cid:9)(cid:6)(cid:10)(cid:23)(cid:2)(cid:15)(cid:10)(cid:13)(cid:8)(cid:16)(cid:6)(cid:3)(cid:11)(cid:2)(cid:9)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:23)(cid:9)(cid:6)(cid:23)(cid:12)(cid:9)(cid:12)(cid:4)(cid:13)(cid:2)(cid:15)(cid:3)(cid:12)(cid:15)(cid:19)(cid:3)
(cid:23)(cid:9)(cid:6)(cid:10)(cid:6)(cid:15)(cid:4)(cid:12)(cid:4)(cid:13)(cid:2)(cid:15)(cid:3)(cid:2)(cid:11)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)0(cid:6)(cid:7)(cid:22)(cid:15)(cid:6)(cid:9)(cid:12)(cid:4)(cid:13)(cid:2)(cid:15)(cid:3)0(cid:6)(cid:23)(cid:2)(cid:9)(cid:4)(cid:3)(cid:13)(cid:15)(cid:3)(cid:12)(cid:14)(cid:14)(cid:2)(cid:9)(cid:19)(cid:12)(cid:15)(cid:14)(cid:6)(cid:3)(cid:26) (cid:13)(cid:4)(cid:5)(cid:3)(cid:10)(cid:6)(cid:14)(cid:4)(cid:13)(cid:2)(cid:15)(cid:3)(cid:27)(cid:28)(cid:28)$(cid:3)(cid:2)(cid:11)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:1)(cid:2)(cid:3)(cid:4)(cid:2)(cid:3)(cid:5)(cid:6)(cid:7)(cid:2)(cid:8)(cid:9)(cid:10)(cid:11)(cid:12)(cid:6)(cid:10)
(cid:13)(cid:14)(cid:14)(cid:15)#(cid:3)* (cid:22)(cid:9)(cid:3)(cid:9)(cid:6)(cid:10)(cid:23)(cid:2)(cid:15)(cid:10)(cid:13)(cid:8)(cid:13)(cid:16)(cid:13)(cid:4)(cid:24)(cid:3)(cid:13)(cid:10)(cid:3)(cid:4)(cid:2)(cid:3)(cid:6)!(cid:23)(cid:9)(cid:6)(cid:10)(cid:10)(cid:3)(cid:12)(cid:15)(cid:3)(cid:2)(cid:23)(cid:13)(cid:15)(cid:13)(cid:2)(cid:15)(cid:3)(cid:2)(cid:15)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)0(cid:6)(cid:7)(cid:22)(cid:15)(cid:6)(cid:9)(cid:12)(cid:4)(cid:13)(cid:2)(cid:15)(cid:3)0(cid:6)(cid:23)(cid:2)(cid:9)(cid:4)(cid:25)(cid:3)(cid:8)(cid:12)(cid:10)(cid:6)(cid:19)(cid:3)(cid:2)(cid:15)(cid:3)(cid:2)(cid:22)(cid:9)(cid:3)(cid:12)(cid:22)(cid:19)(cid:13)(cid:4)(cid:3)
(cid:14)(cid:2)(cid:15)(cid:19)(cid:22)(cid:14)(cid:4)(cid:6)(cid:19)(cid:3)(cid:13)(cid:15)(cid:3)(cid:12)(cid:14)(cid:14)(cid:2)(cid:9)(cid:19)(cid:12)(cid:15)(cid:14)(cid:6)(cid:3)(cid:26) (cid:13)(cid:4)(cid:5)(cid:3)$(cid:22)(cid:10)(cid:4)(cid:9)(cid:12)(cid:16)(cid:13)(cid:12)(cid:15)(cid:3)$ (cid:22)(cid:19)(cid:13)(cid:4)(cid:13)(cid:15)(cid:17)(cid:3)%(cid:4)(cid:12)(cid:15)(cid:19)(cid:12)(cid:9)(cid:19)(cid:10)#(cid:3)(cid:3)
(cid:10) (cid:15)(cid:22)(cid:19)(cid:22)(cid:16)(cid:19) (cid:1)(cid:1)
&(cid:15)(cid:3)(cid:2)(cid:22)(cid:9)(cid:3)(cid:2)(cid:23)(cid:13)(cid:15)(cid:13)(cid:2)(cid:15)(cid:25)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)0(cid:6)(cid:7)(cid:22)(cid:15)(cid:6)(cid:9)(cid:12)(cid:4)(cid:13)(cid:2)(cid:15)(cid:3)0(cid:6)(cid:23)(cid:2)(cid:9)(cid:4)(cid:3)(cid:2)(cid:11)(cid:3)(cid:1)(cid:9)(cid:12)(cid:11)(cid:11)(cid:13)(cid:14)(cid:3)(cid:1)(cid:6)(cid:14)(cid:5)(cid:15)(cid:2)(cid:16)(cid:2)(cid:17)(cid:13)(cid:6)(cid:10)(cid:3)(cid:18)(cid:13)(cid:7)(cid:13)(cid:4)(cid:6)(cid:19)(cid:3)(cid:11)(cid:2)(cid:9)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:24)(cid:6)(cid:12)(cid:9)(cid:3)(cid:6)(cid:15)(cid:19)(cid:6)(cid:19)(cid:3)(cid:27)(cid:28)(cid:3)(cid:29)(cid:22)(cid:15)(cid:6)(cid:3)
(cid:30)(cid:28)(cid:31)(cid:31)(cid:3)(cid:14)(cid:2)(cid:7)(cid:23)(cid:16)(cid:13)(cid:6)(cid:10)(cid:3)(cid:26) (cid:13)(cid:4)(cid:5)(cid:3)(cid:10)(cid:6)(cid:14)(cid:4)(cid:13)(cid:2)(cid:15)(cid:3)(cid:27)(cid:28)(cid:28)$(cid:3)(cid:2)(cid:11)(cid:3)(cid:4)(cid:5)(cid:6)(cid:3)(cid:1)(cid:2)(cid:3)(cid:4)(cid:2)(cid:3)(cid:5)(cid:6)(cid:7)(cid:2)(cid:8)(cid:9)(cid:10)(cid:11)(cid:12)(cid:6)(cid:10)(cid:13)(cid:14)(cid:14)(cid:15)#(cid:3)(cid:3)
!(cid:4) (cid:10) (cid:1)(cid:8) (cid:30)(cid:31)(cid:22)(cid:18)(cid:1)"(cid:3) (cid:13)# $% (cid:2)& ’(cid:1)(cid:6)(cid:18)(cid:28)(cid:1)((cid:18)(cid:31)(cid:1)
(cid:3)
(cid:3)
(cid:3) (cid:2)& ) (cid:10) ((cid:8) (cid:13)(cid:1)(cid:5)*(cid:1)!(cid:9) (cid:11) (cid:3) (cid:5) (cid:3)
2 (cid:13)(cid:9)(cid:6)(cid:14)(cid:4)(cid:2)(cid:9)(cid:3)
(cid:3)
3 (cid:6)(cid:16)(cid:8)(cid:2)(cid:22)(cid:9)(cid:15)(cid:6)(cid:25)(cid:3)(cid:30)(cid:30)(cid:15)(cid:19)(cid:3)(cid:19)(cid:12)(cid:24)(cid:3)(cid:2)(cid:11)(cid:3)$(cid:22)(cid:17)(cid:22)(cid:10)(cid:4)(cid:3)(cid:30)(cid:28)(cid:31)(cid:31)
ASX Additional Information
As at 10 August 2011
Additional information required by the Australian Stock Exchange and not shown elsewhere in this report is as
follows. The information is current as at 10 August 2011.
(ii) Distribution of Equity Securities
The number of shareholders, by size of holding, in each class of share are:
Ordinary Shares
Number of
Holders
Number of
Shares
1,848
261
186
647
200
3,142
2,680
290,146
794,829
1,640,592
23,515,706
149,881,098
176,122,371
10,079,826
1
1,001
5,001
10,001
-
-
-
-
1,000
5,000
10,000
100,000
100,001 and over
Holdings less than a marketable parcel
d) Twenty Largest Holders
The names of the twenty largest holders of quoted shares are:
Name
Ordinary Shares
Number
Percentage
K J ALDRIDGE INVESTMENT GROUP PTY LTD
CJT NOMINEES PTY LTD
1.
2.
3. MR MICHAEL JOHN DE LA HAYE + MR ROSS DE LA HAYE
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