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SAFEROADS HOLDINGS LIMITED Annual Report 2016
65853_rns_2016-09-11_7a24dbf1-7da8-463c-8e10-08b6dd771a69.pdf
Annual Report
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POSTS
CONTENTS
| Chairman's Overview 4 | |
|---|---|
| Chief Executive Officer's Review of Operations and Activities 6 | |
| The Year in Review 8 | |
| Directors' Report 12 | |
| Auditor's Independence Declaration 18 | |
| Corporate Governance Statement 19 | |
| Financial Statements 20 | |
| Notes to the Financial Statements 24 | |
| Directors' Declaration 42 | |
| Independent Auditor's Report 43 | |
| ASX Additional Information 45 | |
| Corporate Directory 46 |
Improving public safety
Saferoads is an ASX listed company specialising in providing innovative safety solutions. Headquartered in Pakenham, Victoria with representation across Australia, New Zealand and the USA, the company provides state government departments, local councils, road construction companies and equipment hire companies with a broad range of products and services designed to direct, protect, inform and illuminate for the public's safety.
Dear Shareholder,
OPERATIONS OVERVIEW
On behalf of the board I am pleased to report a profit before tax and relocation costs of $50k compared with a corresponding loss before tax of $90k for the previous financial year. This reflects the ongoing sustainable business transformation and maintains a base platform to re-grow the business, having established a new headquarters during the year.
Revenue from ongoing product sales, royalties and rentals was up 18% or $2.5 million signifying the positive efforts of our sales force to provide value-add service offerings to our existing and new customers in what is still an exceedingly competitive market environment. Whilst there has been minimal changes in overall margins due to the highly competitive nature of the markets we operate in, our ability to deliver quality products and value-added solutions has allowed us to increase our market share in certain sectors. We have maintained a tight focus on cost rationalisation over the financial year but also selectively invested in areas which will provide greater longer term returns for the Company through improving factory efficiency and productivity and also establishing international markets. This has all led to the marginal improvement in overall profitability.
Finance cost reductions of 53% or $0.23 million resulted from the previous year's significant debt reduction by means of the rights issue and core bank debt reduced by a further $0.5 million (or 17%) to $2.5 million at 30 June 2016. We now have a more acceptable gearing ratio (net debt to net debt plus equity) which reduced from 26.1% at June 2015 to 24.4% as at 30 June 2016.
We generated over $1.0 million in operating cash flows during the year, maintaining adequate cash reserves to support the current working capital needs of the business as well as providing basic funding for our product innovation projects which totalled $0.26 million for the year.
The table below summarizes the transformation over the past three financial years:
| Year ending 30 June | ||||||
|---|---|---|---|---|---|---|
| 2014 | 2015 | 2016 | ||||
| $'000 | $'000 | $'000 | ||||
| Revenue from product sales, royalties and rentals | 12,894 | 13,761 | 16,269 | |||
| Underlying EBIT* | (539) | 239 | 260 | |||
| Profit/(loss) before tax (excluding relocation costs) | (1,283) | (90) | 50 | |||
| Operating cash flows | (329) | 98 | 1,022 | |||
| Core bank debt ** | (5,000) | (3,000) | (2,496) |
* 2016 excludes relocation costs; 2015 excludes restructuring costs & 2014 R&D tax rebate booked in 2015; 2014 excludes restructuring costs ** excludes Plant & equipment hire purchase liabilities
STRATEGIC OPPORTUNITIES
Having maintained an underlying positive earnings base in 2016, our main priority remains the growth in sales and profit. Each of our product portfolios have key budget targets in their respective market sectors and a number of initiatives are in play to continue the momentum achieved in the past financial year.
One of these initiatives relates to the increasing focus and use of alternative renewable energy sources by some of our customers which has led us to introduce new product offerings such as solar public lighting solutions and portable solar powered light towers for work zones.
Road infrastructure spending continues to grow, particularly on the eastern seaboard where there are major projects up the east coast of the country that we are participating in. Our temporary barrier portfolio in particular has positioned itself to take advantage of major road works along the Pacific Highway.
We are very pleased with the growth of our Public Lighting business, particularly its focus on the abovementioned renewable energy (solar) lighting solutions. We retain a strong market share in Victoria with urban and residential street lighting needs and have diversified into car park lighting as well.
As a result of our CEO, Mr Darren Hotchkin's secondments to the USA during the financial year, we secured our first international distribution agreement which realised an initial $0.36 million in royalties and an order worth around $0.3 million that is currently in progress and will be delivered within the next two months.
This is our initial step into the International arena and through the contacts that have been established in this region, we anticipate further developments in this space over the coming year.
We remain focussed on product development and innovation and will continue to bring to market products with both domestic and international sales potential. We've had encouraging initial sales of our flexible road-sign to numerous local government authorities. The introduction of our temporary work zone rumble-strip to various State road authorities and road contractors has reaped positive feedback from trial sites that this product has demonstrably delivered a real reduction in traffic speeds in designated road work zones.
ACKNOWLEDGMENTS
I would like to acknowledge the ongoing efforts and dedication of our staff who have not only had to work on continuing to grow this business, but also had to plan and coordinate their activities around an office and warehouse relocation in the first half of the financial year which now enables the Company to better service its growing customer base through improved operational efficiencies.
I also wish to acknowledge the significant dedication and contribution from my fellow directors and senior management team over the past year. Their expertise, clear thinking, industry insight and hard work has contributed to our ability to execute the continued business transformation in what is still a difficult trading environment.
We are especially grateful to the CEO for his secondments to the United States during the year in building a greater understanding and creating opportunities for that market and promoting our products to interested overseas parties. This is an untapped market space for us and we anticipate further significant growth in the coming years.
Finally, I sincerely thank all our shareholders for their ongoing patience and continued support. Our primary focus remains on substantially improving the financial performance and sustainability of your company.
David Ashmore Chairman of the Board
CHIEF EXECUTIVE OFFICER'S REVIEW OF OPERATIONS AND ACTIVITIES
PERFORMANCE DURING 2015 - 2016
I am very pleased to report that the Company has achieved another positive EBIT for the past financial year, which included a relocation of our headquarters to outer metropolitan Melbourne.
The Company generated annual operating revenues of $16.3 million (FY2015: $15.2 million) and an EBIT before relocation costs of $0.3 million (FY2015: $0.4 million). The past financial year was about continuing the momentum in building sales in our four key product sectors – permanent roadside products, temporary work zone products, public lighting solutions and work zone rentals. I'm pleased to report that we made significant inroads in all areas by way of sales growth, production efficiency and/or market rationalisation as we continue to adapt our business to ever-changing customer requirements. Our differentiator is that we are not just seen as a product supply business, but as a valued advisor to those customers seeking solutions to sometimes quite complex logistical situations. It's our in-depth industry knowledge and experience and our broad network of industry players that position us to be one of the premium providers of road safety solutions for any temporary or permanent purpose.
Whilst operating revenue increased 7%, this did not all convert to the bottom line as we invested in three key areas of rationalisation and future growth potential.
Firstly, we made the decision to relocate to a new purpose-built facility closer to metropolitan Melbourne. The reasons for this were threefold – it would allow us to consolidate from two production sites to one; it would reduce freight and travel costs; and provide access to a broader supply chain base and employee talent pool for recruitment needs. The overall relocation investment was $0.5 million, with $0.2 million expensed as relocation costs and a further $0.3 million of fitout, plant and equipment capitalised and financed.
Secondly, we instigated a strategy of exploring overseas market opportunities and initially targeted North America. During two secondments to the West Coast of USA, we signed up one major international road safety hardware company to distribute our IronmanTM barrier products, realising an initial royalty of $0.3 million and an additional sublicence arrangement for a region in the People's Republic of China.
Thirdly, we have recruited a senior production manager to further improve factory efficiency, productivity and cost savings. This initiative has already realised some savings through rationalising our supplier base, and improving lead times in delivering orders to customers.
Our roadside products portfolio reported annual revenue growth of 10% with improved results in our rubber traffic calming product range and the introduction of our new flexible signage offering. In addition, we secured positive feedback on initial sales and trials of our portable rumble strip product – Roadquake – and anticipate formal State road authority approvals and supporting specifications in the coming months.
Our temporary work zone products portfolio achieved annual revenue growth of 4%, with significant contracts for our exclusively licensed concrete barrier solution, the T-LOK barrier. We also had increased sales with our variable messaging sign ("VMS") trailers and we have now launched our proprietary VMS web-based management platform – Zone2.
Our IronmanTM Hybrid barrier rental portfolio suffered from market pressures as the major competitors reduced rental rates significantly to boost utilisation. However, utilisation rates improved towards the end of the financial year as we targeted niche second-tier road contractors requiring a more flexible barrier offering and deployment solution whereby the contractor could rely on our expertise for their work zone barrier needs. This has seen a dramatic improvement in our overall rental rates and utilisation with us achieving record monthly rental income from this product portfolio in the first month of this financial year.
Our Public Lighting solutions portfolio maintained the previous year's momentum and grew another 39% in 2016 on the back of established customer relationships and introducing new customers to our market leading supply and delivery service. In addition, we introduced a new solar lighting solution, targeted at the local government market in addressing issues associated with providing more secure public spaces in a more environmentally friendly way. We have partnered with a major international solar lighting provider to provide this unique offering which is gaining traction.
We continued our focus on innovative product research and development during the year and have invested in a sophisticated product performance and simulation software program to assist in reducing the time and costs involved with the creation of new high performance products. We have a number of projects we are currently working on to improve existing products and/or developing new products in response to the changing road safety environment for testing and commercialisation. We continue to fund these through a combination of working capital and funds received as part of the Australian Government's Research and Development tax rebate program. We believe it is imperative we maintain this innovative approach to our business where we are seeing an increasing predominance of imported products. We are striving to generate our own intellectual property and therefore keep government funds in Australia (with Australian-owned companies and employees) rather than going to offshore shareholders and workers.
LOOKING AHEAD
We anticipate another year of modest profitability gain as there continues to be pressure on all levels of government (ultimately the end asset owner) to optimise expenditure on road infrastructure.
The steps we continue to take to improve productivity should enable us to maintain our operating margins in what will remain a very challenging domestic market, where all significant sales are won through a competitive tender/quote process.
Our public lighting and rental barrier businesses are in strong growth phases that will require our careful allocation of additional working capital. Combining this with the launch of our new VMS products, we should more than sustain our overall sales levels.
We will keep building on the achievements made to date on our international markets expansion. There is encouraging interest from other overseas parties in our patented products and we anticipate more distribution agreements with overseas parties.
Finally, I would like to acknowledge the support of my fellow Directors, Senior Management Team and our staff, who have worked tirelessly to achieve another positive underlying result, despite the distraction of the relocation to a new facility. This should set us up to further enable the business to continue its transformation of improvement for the foreseeable future.
Darren Hotchkin Chief Executive Officer
THE YEAR IN REVIEW
Saferoads has been involved in a number of projects with its innovative solutions over the past financial year. A sample of these are outlined below.
SOLAR PUBLIC LIGHTING
Gympie Regional Council in Queensland have installed Saferoads solar powered LED street lights adjacent to a public pathway network to improve night time use. The pathway is a trunk pedestrian route for the Southside of Gympie and the section of pathway had no street lighting for approximately 500 metres. The area is not serviced by mains supply power and installation of such would require the removal of significant vegetation, or an expensive underground supply.
The Saferoads solar lighting solution was chosen because:
- it provided light duration of 23-30 hours without charge
- the light can be programmed to dim after specified times
- there are no overhead supply wires
- it has a low-carbon foot-print one solar street light saves about 1 ton of CO2 per year
- there is no heavy metal in the LED fixtures
- it supports crime prevention through environmental design (CPTED)
IRONMAN T M HYBRID BARRIER SOLUTION
In February 2016, Ace Contractors were awarded the Cardinia Road Upgrade Project in Officer, Victoria.
Included in their scope of works was a roundabout, tight intersections and several stages where barriers needed tapers, flexibility and the ability to work around some fairly tight curves.
After many meetings with the road authority, a final Traffic Management Plan was agreed upon, which included the optimal use of the IronmanTM Hybrid product, with various End Treatment solutions and the best utilisation of the many features of the barrier.
Project Manager, Pawel Bankowski said "We sought barrier solutions and proposals from several companies. Choosing Saferoads came down to three distinct factors in the end:
- The product needed to achieve minimum deflection at the speed and likely impact angle;
- We needed to achieve a tight radius through the roundabout section of our project; and
- We required a comprehensive deployment solution.
"Saferoads have delivered a very suitable product at competitive rates and are specialists in their field."
IRONMAN T M HYBRID BARRIER SOLUTION
In April 2016, Bitu-mill were awarded a project to construct a 1.5 km long overtaking lane on the Calder Highway, Nowingi (south of Mildura, Victoria). The methodology adopted by Bitu-mill included the team working in 500 metre sections at a time on the busy section of the highway.
In evaluating the barrier options it became evident that they needed a product that:
- was economical to freight
- had reasonably strong deflection performance which offered the contractor a close working proximity; and
- provided a flexible enough option to move and relocate with the staging within the construction program
Project manager, Doug Warren said "Saferoads were able to provide Bitu-Mill with an efficient barrier solution, a high quality deployment service and overall barrier and compliance expertise that we value highly."
FLEXLOC GUIDEPOST SAFETY INSTALLATION SOLUTIONS
After working closely with a number of Councils and a variety of Government bodies, it was apparent that there was a need to improve the deployment of roadside guideposts. As a result, Saferoads developed an aluminium trailer designed to securely hold a pallet of Flexloc guideposts and a lockable toolbox to store all the relevant tools and sockets.
One great innovation with the Flexloc trailer is that once the pallet is loaded, the back doors can be closed and the side-door access allows installers to work from the side of the road to keep an eye out for oncoming traffic. Another advantage is that at any given time the trailer is geared up and ready to go, making the operations side of installing roadside guideposts much more efficient.
ROADQUAKE TEMPORARY PORTABLE RUMBLE STRIPS
In the previous year we introduced a new, innovative product in the form of Temporary Portable Rumble Strips ("TPRS"). The RoadQuake solution has now been extensively tested and trialled in New South Wales and Western Australia with great success and we are now carrying out extensive trials in Queensland and Victoria.
The RoadQuake TPRS is mainly designed to alert distracted drivers of upcoming road conditions however, all the data collected so far through these trials has indicated a reduction in speed which has been a tremendous bonus to make our roads and work zones safer. In a MainRoads WA approved trial carried out
by Fulton Hogan, the speeds on average dropped by approximately 8 km/h at all sites tested. They were found to be quick and easy to install and were very effective in alerting drivers for the road works ahead.
Up until this point in time the trials have been carried out in rural conditions. The upcoming trials in Queensland are set to break new ground in Australia with a growing need for the added safety of such a device to be used in multi-lane metropolitan situations. The growing need to reduce accidents in work zone incidents is paramount to Saferoads.
T-LOK BARRIERS ON WEBB DOCK PROJECT
Saferoads has just completed supplying custom T-LOK concrete barriers to BMD Constructions for stage 1 of the new Webb Dock fully automated container terminal in Melbourne.
The ability to customise the T-LOK barrier design with our in-house engineering
team allowed us to work with the customer's engineers to build a custom T-LOK barrier to separate the Automated Container Carriers ("ACC") from other traffic and pedestrian areas at the terminal.
The custom T-LOK barriers included large reinforced galvanised fork ports, additional structural reinforcing, top mount fence ferrules, high-visibility paint scheme, and high-strength fence panels.
Custom corner blocks have also been supplied to provide a continuous interlocking system through 90 degree corners.
RELOCATION TO PAKENHAM, VICTORIA
After being based in the Warragul / Drouin area in West Gippsland, Victoria since the company was founded, Saferoads made the move closer to Melbourne in late November 2015.
This was to allow us to take advantage of various synergies and savings including the consolidation from two sites to a single site, reduced freight and travel costs and access to a broader supply chain base and employee talent pool for future recruitment needs.
The lease of our Drouin premises had expired and the Company entered into a 10 year lease of a new purpose-built facility in Pakenham, incorporating office, warehouse, assembly and hardstand yard.
DIRECTORS' REPORT
Your Directors submit their report for the year ended 30 June 2016.
DIRECTORS
| David Ashmore | Non-Executive Chairman | Appointed 22 November 2012 |
|---|---|---|
| Darren Hotchkin | Executive Director (CEO) | Appointed 21 October 2005 |
| David Cleland | Non-Executive Director | Appointed 1 December 2010 |
DIRECTOR PROFILES
David Ashmore (Age 64) (FCA GAICD F.FIN) Non-Executive Director (Appointed Non-Executive Chairman 19 August 2013)
David Ashmore was appointed to the Board on 22 November 2012 and was re-elected at the November 2013 and October 2015 AGM's. He was appointed Chairman of the Board on 19 August 2013. He is a member of the Remuneration Committee (appointed Chairman of this Committee on 19 August 2013) and the Audit and Risk Committee (as Chairman up to 19 August 2013).
David is a career Chartered Accountant with 40 years of professional public practice experience focussed on audit, finance, due diligence, risk and governance advisory. David has worked with many dynamic private and public companies where his experience has assisted them understanding their underlying financial position, their financial management issues and business growth challenges. Those challenges typically included the development of sustainable executive management structures and business value building initiatives. He also has significant experience with the identification and management of financial and business risks and the development of structured business decision making protocols.
David has considerable experience in a leadership and a chairman role through his work on numerous Audit Committee appointments and as a Senior Partner, Board Member and Practice Leader. He is a Fellow of the Institute Chartered Accountants in Australia, a Graduate member of the Australian Institute of Company Directors and a Fellow of the Financial Services Institute of Australia.
Directorships of other listed companies during the preceding three years: Respiri Limited (formerly iSonia Limited).
Darren Hotchkin (Age 52) Executive Director/Chief Executive Officer
Darren Hotchkin was appointed to the Board on 21 October 2005 as Managing Director. On 7 February 2011 he stepped aside as Managing Director but remained on the Board as a Non-Executive Director and was re-elected at the October 2011 and November 2013 AGM's. He was appointed acting Chief Executive Officer on 10 April 2012 and formal Chief Executive Officer on 30 June 2012.
Darren is the founder of Saferoads. He has a background in the automotive industry where he owned and operated several businesses. In 1992 he founded the company now trading as our wholly-owned subsidiary, Saferoads Pty Ltd, to commercialise his invention of a rubber guide post, manufactured from recycled car tyres.
As Chief Executive Officer, Darren's key contribution to the business is in the strategic development of the Company's product range and manufacturing processes as well as in business development. He continues to be active in Research and Development and in seeking to effectively expand the Company's product base through international research of products which have the potential to find a sustainable place in the Australian market. Darren is also an eagerly sought-after international expert speaker on road safety barriers, having presented at various International Road Federation conferences.
Darren has not served as a Director of any other listed companies during the preceding three years.
David Cleland (Age 71) (Dip.ME GAICD FIE (retired)) Non-Executive Director
David Cleland was appointed to the Board on 1 December 2010 and was re-elected at the October 2011 and November 2014 AGM's. He was appointed acting Chief Executive Officer on 28 November 2011, handing over the role to Darren Hotchkin on 10 April 2012. He is a member of the Audit and Risk Committee (becoming Chairman of this Committee on 19 August 2013) and the Remuneration Committee.
David is a mechanical engineer with extensive experience as Chief Executive Officer of companies manufacturing and distributing industrial products. His career includes manufacturing experience (including lean manufacturing), brand management, product research and development, outsourcing and company mergers and acquisitions. He was formerly an inaugural trust member of the Greater Metropolitan Cemeteries Trust and is a Director of a privately owned company.
David has not served as a Director of any other listed companies during the preceding three years.
COMPANY SECRETARIES
Sonia Joksimovic (appointed 10 August 2015)
Sonia joined Saferoads on 10 August 2015. Sonia is an experienced Chartered Secretary with over 8 years' experience across listed small caps, unlisted and private companies, specializing in governance and compliance matters.
Elissa Hansen
(appointed 10 October 2013, resigned 10 August 2015)
Elissa was Company Secretary of Saferoads from 10 October 2013 to 10 August 2015 where she was employed by Boardroom Pty Ltd, the company which formerly managed Saferoads' share registry. Elissa is an experienced Chartered Secretary with over 15 years' experience advising management and boards on investor relations, governance, compliance and other corporate issues.
KEY MANAGEMENT PROFILES
Peter Fearns
Chief Financial Officer
Peter joined Saferoads in December 2011. He has over 15 years' experience managing finance functions in the information technology, infrastructure and professional services sectors, covering both public listed and private companies.
He was Group Financial Controller of ASX listed UXC Limited. His most recent appointment was Chief Financial Officer of a national privately-owned urban planning and property advisory business.
Peter holds a Bachelor of Business (Accounting) and is a CPA.
INTEREST IN SHARES
As at the date of this report, Directors' interests in the shares of the Company are:
| NAME | SHARES |
|---|---|
| David Ashmore | 1,256,807 |
| Darren Hotchkin | 7,479,885 |
| David Cleland | 508,610 |
DIVIDENDS
No interim or final dividend was paid or declared for the financial year ended 30 June 2016.
No interim or final dividend was declared or paid for the financial year ended 30 June 2015.
DIRECTORS' REPORT
PRINCIPAL ACTIVITIES
The principal activity of the Group continued to be the provision of road safety products and solutions primarily to end users.
Products and services the Company provides includes flexible guide posts and signage; rubber-based traffic calming products including separation kerbing and wheel stops; variable messaging sign boards; decorative and standard street and major road light poles; permanent and temporary crash cushions including bollards and safety barriers.
In all its activities, the Company remains focused on providing innovative products and materials that protect the safety of all road users – motorists, road construction workers and pedestrians.
REVIEW AND RESULTS OF OPERATIONS
A review of the operations and activities of the Company during the financial period and the results of these operations is set out in the Chairman's Overview and Chief Executive Officer's Review of Operations and Activities.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
During the 2015-16 year, there has been no significant change in the Company's state of affairs other than as disclosed in this financial report.
SIGNIFICANT EVENTS AFTER REPORTING DATE
There has been no matter or circumstance, which has arisen since 30 June 2016 that has significantly affected or may significantly affect the operations of the consolidated entity or the results of those operations or the state of affairs of the consolidated entity.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Likely developments in the operations of the entity and the expected results of these operations have been set out in the Chairman's Overview and the Chief Executive Officer's Review of Operations and Activities.
INDEMNIFICATION AND INSURANCE OF DIRECTORS, OFFICERS AND AUDITORS
During the year, Directors' and Officers' insurance premiums were paid for any person who was a Director and/or Officer of the Company.
The Group has not agreed to indemnify its auditors, Grant Thornton.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Company's operations are not regulated by any significant environmental regulations under a law of the Commonwealth or of a state or territory. In respect of its own activities, the Company is not a major emitter of greenhouse gases and falls well below the reporting thresholds set by the National Greenhouse and Energy Reporting Act 2007.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.
OPTIONS
At the date of this report there were no un-issued shares of the company under option.
REMUNERATION REPORT
The Company's remuneration policy is to ensure that the level of remuneration paid to key personnel is market competitive and will help to attract and retain the skills and expertise required. To determine what is a competitive level of remuneration the Company refers to the Australian Institute of Management Salary Survey and to information provided by other professional organisations.
REMUNERATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL
NON-EXECUTIVE DIRECTORS
Total remuneration for non-executive Directors for 2015-16 was $147,500. Their remuneration packages comprised only fixed Directors' fees plus statutory superannuation (where applicable) and were within the limits set out in the Company's constitution. Currently this limit is set at $350,000 per annum, and can only be changed at a general meeting.
EXECUTIVE DIRECTOR
Mr Darren Hotchkin, Chief Executive Officer, received total remuneration of $340,000 including a component of the remuneration covering his secondment to the USA for part of the financial year to establish business opportunities in that market.
Note, Mr Hotchkin's actual working hours in the prior year were reduced which resulted in a lower level of remuneration.
KEY MANAGEMENT PERSONNEL
Key Management Personnel ("KMP") is defined by AASB 124 - Related Party Disclosures. Only Directors and Executive Management that have the authority and responsibility for planning, directing and controlling the activities of Saferoads, directly or indirectly and are responsible for the entity's governance are classified as KMP.
PERFORMANCE-BASED REMUNERATION
Performance-based remuneration (bonus incentives) for Key management personnel (apart from Mr Hotchkin) for the year ended 30 June 2016 was based on the Company performance (PBT) exceeding budget. As the Company did not exceed budgeted PBT for FY2016, there was no performance-based remuneration (bonus incentives) paid or payable to key management personnel for the year.
| 2016 | 2015 | 2014 | 2013 | 2012 | |
|---|---|---|---|---|---|
| EPS (cents) | (0.3) | (0.2) | (3.6) | (5.3) | (35.5) |
| Net profit/(loss) ($) | (116,082) | (72,228) | (930,978) | (1,388,899) | (9,219,362) |
| Share price ($) | $0.13 | $0.10 | $0.13 | $0.06 | $0.09 |
A summary of Company performance for the past five financial years is below.
EMPLOYMENT CONTRACTS
Executive employment agreements have been entered into with the Chief Executive Officer, the Chief Financial Officer, and other Key Management Personnel as disclosed. These agreements are of a standard form containing provisions of confidentiality and restraint of trade usually required in such agreements. Payments to be made on termination of an executive employment contract have been clearly detailed and are limited to payout of accrued leave entitlements and up to three months' salary as redundancy or termination pay.
REMUNERATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL
30 June 2016
| Short Term | LongTerm | ShareBasedPayment | Total | PerformanceRelated | |||||
|---|---|---|---|---|---|---|---|---|---|
| Salaries &Fees | FringeBenefits | CashBonus | TerminationPayment | Superannuation | LongServiceLeave | Options | |||
| $ | $ | $ | $ | $ | $ | $ | $ | % | |
| NonExecutiveDirectors | |||||||||
| D Ashmore | 47,283 | - | - | - | 35,217 | - | - | 82,500 | - |
| D Cleland | 65,000 | - | - | - | - | - | - | 65,000 | - |
| ExecutiveDirector | |||||||||
| D Hotchkin | 340,000 | - | - | - | - | - | - | 340,000 | - |
| Executive* | |||||||||
| P Fearns | 170,250 | - | - | - | 20,554 | 3,162 | - | 193,966 | - |
| Total | 622,533 | - | - | - | 55,771 | 3,162 | - | 681,466 | - |
* Key management personnel is defined as those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly.
30 June 2015
| Short Term | LongTerm | ShareBasedPayment | Total | PerformanceRelated | |||||
|---|---|---|---|---|---|---|---|---|---|
| Salaries &Fees | FringeBenefits | CashBonus | TerminationPayment | Superannuation | LongServiceLeave | Options | |||
| $ | $ | $ | $ | $ | $ | $ | $ | % | |
| NonExecutiveDirector | |||||||||
| D Ashmore | 45,000 | - | - | - | 35,000 | - | - | 80,000 | - |
| D Cleland | 60,000 | - | - | - | - | - | - | 60,000 | - |
| ExecutiveDirector | |||||||||
| D Hotchkin | 100,000 | - | - | - | 9,500 | - | - | 109,500 | - |
| Executive | |||||||||
| P Fearns | 170,000 | - | - | - | 16,150 | 2,833 | - | 188,983 | - |
| Total | 375,000 | - | - | - | 60,650 | 2,833 | - | 438,483 | - |
SHAREHOLDINGS OF KEY MANAGEMENT PERSONNEL
Shares held in Saferoads Holdings Limited:
| Balance at1 July 2015 | Acquired throughOn-Market trade | Sold | Balance at30 June 2016 | |
|---|---|---|---|---|
| Directors | ||||
| D Hotchkin | 7,479,885 | - | - | 7,479,885 |
| D Ashmore | 1,159,911 | 96,896 | - | 1,256,807 |
| D Cleland | 408,610 | 100,000 | - | 508,610 |
| Executive | ||||
| P Fearns | 18,000 | 15,000 | - | 33,000 |
| Total | 9,066,406 | 211,896 | - | 9,278,302 |
All equity transactions with Key Management Personnel have been entered into under terms and conditions no more favourable than those the entity would have adopted if dealing at arm's length.
DIRECTORS' MEETINGS
The number of meetings of Directors (including meetings of committees of Directors) held during the year, and the numbers of meeting attended by each Director, were as follows:
| Names | Directors | Audit & Risk | Remuneration / Nomination | ||||
|---|---|---|---|---|---|---|---|
| Eligible | Attended | Eligible | Attended | Attended | |||
| Mr D Ashmore | 12 | 12 | 3 | 3 | 1 | 1 | |
| Mr D Hotchkin | 12 | 12 | - | - | - | - | |
| Mr D Cleland | 12 | 12 | 3 | 3 | 1 | 1 |
NON-AUDIT SERVICES
During the year, Grant Thornton, the Company's auditors, performed certain other services in addition to their statutory audit duties.
The Board has considered the non-audit services provided during the year by the auditor and, in accordance with written advice provided by resolution of the Audit and Risk Committee, is satisfied that the provision of those nonaudit services during the year is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons:
- all non-audit services were subject to the corporate governance procedures adopted by the Company and have been reviewed by the Audit and Risk Committee to ensure they do not impact upon the impartiality and objectivity of the auditor
- the non-audit services do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards.
Details of the amounts paid to the auditors of the Company, Grant Thornton, and its related practices for audit and non-audit services provided during the year are set out in Note 21 to the financial statements.
ROUNDING OF AMOUNTS
Saferoads Holdings Limited is a type of Company that is referred to in ASIC Corporations (Rounding in Financial/ Directors' Reports) Instrument 2016/191 and therefore the amounts contained in this report and in the financial report have been rounded to the nearest dollar.
AUDITOR'S INDEPENDENCE DECLARATION
The attached independence declaration has been obtained from the Company's auditors, Grant Thornton.
Signed in accordance with a resolution of Directors.
David Ashmore Director 25 August 2016
AUDITOR'S INDEPENDENCE DECLARATION
The Rialto, Level 30 525 Collins St Melbourne Victoria 3000 The Rialto, Level 30 525 Collins St Melbourne Victoria 3000
Correspondence to: GPO Box 4736 Melbourne Victoria 3001 Correspondence to: GPO Box 4736 Melbourne Victoria 3001
T +61 3 8320 2222 F +61 3 8320 2200 E [email protected] W www.grantthornton.com.au T +61 3 8320 2222 F +61 3 8320 2200 E [email protected] W www.grantthornton.com.au
Auditor's Independence Declaration To the Directors of Saferoads Holdings Limited Auditor's Independence Declaration To the Directors of Saferoads Holdings Limited
Melbourne Victoria 3001 T +61 3 8320 2222 In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Saferoads Holdings Limited for the year ended 30 June 2016, I declare that, to the best of my knowledge and belief, there have been: In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Saferoads Holdings Limited for the year ended 30 June 2016, I declare that, to the best of my knowledge and belief, there have been:
- a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
- To the Directors of Saferoads Holdings Limited In accordance with the requirements of section 307C of the Corporations Act 2001, as lead b no contraventions of any applicable code of professional conduct in relation to the audit. bno contraventions of any applicable code of professional conduct in relation to the audit.
declare that, to the best of my knowledge and belief, there have been: a no contraventions of the auditor independence requirements of the Corporations Act
2001 in relation to the audit; and GRANT THORNTON AUDIT PTY LTD Chartered Accountants GRANT THORNTON AUDIT PTY LTD Chartered Accountants
b no contraventions of any applicable code of professional conduct in relation to the audit.
M. A. Cunningham Partner - Audit & Assurance M. A. Cunningham Partner - Audit & Assurance
Melbourne, 25 August 2016 Melbourne, 25 August 2016
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
M. A. Cunningham Partner - Audit & Assurance Melbourne, 27 August 2014 'Grant Thornton' refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another's acts or omissions. In the Australian context only, the use of the term 'Grant Thornton' may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. 'Grant Thornton' refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another's acts or omissions. In the Australian context only, the use of the term 'Grant Thornton' may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies. Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.
scheme applies.
The Board of Directors of Saferoads Holdings Limited is responsible for the corporate governance of the Saferoads group. The Board has considered the ASX Corporate Governance Principles and Recommendations ("ASX Governance Principles") and reports on compliance with these Principles.
The Board's objective is to ensure investor confidence in the Company and its operations given its size, stage of development and complexity.
The Company's Corporate Governance Charter is located on the Company's website (www.saferoads.com.au) under the Investor Relations icon.
The Board advises that it complies with the ASX Corporate Governance Principles set out on the Company's website (www.saferoads.com.au) under the Investor Relations icon.
SAFEROADS HOLDINGS LIMITED
FOR THE YEAR ENDED 30 JUNE 2016 Consolidated Statement of Profit or Loss and Other Comprehensive Income ConsolidatedStatementofProfitorLossandOtherComprehensive Income
| Notes | CONSOLIDATED | ||
|---|---|---|---|
| 2016 | 2015 | ||
| $$ | $$ | ||
| Revenue from product sales, royalties and rentals | 4 | 16,268,750 | 13,760,783 |
| Revenue from civil services | 4 | -- | 1,434,798 |
| 16,268,750 | 15,195,581 | ||
| Cost of direct materials and labourCost of direct materials and labour | (10,219,077) | (9,687,461)(9,687,461) | |
| Movement in inventoriesMovement in inventories | (103,247)(103,247) | (120,596)(120,596) | |
| Gross profit | 5,946,426 | 5,387,5245,387,524 | |
| Other income | 4 | 113,359 | 335,535 |
| Employee benefits | (3,230,079) | (2,800,130) | |
| Depreciation, amortisation and impairment of plant & equipmentDepreciation, amortisation and impairment of plant & equipment | 44 | (450,878) | (461,602)(461,602) |
| Finance costsFinance costs | (209,988)(209,988) | (443,337)(443,337) | |
| Motor vehicle costs | 4 | (143,533) | (214,383) |
| (143,533) | |||
| Occupancy costs | 4 | (352,703)(352,703) | (311,487) |
| Travel and accommodation costs | 4 | (308,140) | (139,468) |
| IT & Communications costsIT & Communications costs | 44 | (155,863) | (178,745)(178,745) |
| Relocation costs | (207,037) | - | |
| Restructuring costsRestructuringcosts | - | (56,610)(56,610) | |
| Other expenses | (1,158,624)(1,158,624) | (1,207,501) | |
| Profit/(loss) before income tax | (157,060) | (90,204)(90,204) | |
| Income tax benefit/(expense)Income tax benefit/(expense) | 55 | 40,97840,978 | 17,97617,976 |
| Net profit/(loss) for the period | (116,082) | (72,228) | |
| Net profit/(loss) attributable to members of the parentNet profit/(loss) attributable to members ofthe parent | (116,082)(116,082) | (72,228)(72,228) | |
| Other comprehensive income | |||
| Items that may be classified subsequently to profit or loss | |||
| Exchange differences on translating foreign controlled entityExchange differences on translatingforeigncontrolled entity | -- | (177) | |
| Total comprehensive income for the period | (116,082)(116,082) | (72,405) | |
| Total comprehensive income attributable to members of theTotalcomprehensive income attributable to members ofthe | |||
| parentparent | (116,082)(116,082) | (72,405)(72,405) | |
| Earnings per shareEarnings per share | CentsCents | CentsCents | |
| - Basic for profit/(loss) for the full year | 6 | (0.32)(0.32) | (0.23) |
| - Diluted for profit/(loss) for the full year | 6 | (0.32) | (0.23) |
| Dividend paid per share (cents)Dividend paid per share (cents) | 77 | - | - |
The accompanying notes form part of these financial statements
SAFEROADS HOLDINGS LIMITED Consolidated Statement of Financial Position SAFEROADS HOLDINGS LIMITED Consolidated Statement of Financial Position
AS AT 30 JUNE 2016 AS AT 30 JUNE 2016
| NotesNotes | CONSOLIDATEDCONSOLIDATED | ||
|---|---|---|---|
| 20162016 | 20152015 | ||
| $$ | $$ | ||
| ASSETSASSETS | |||
| Current AssetsCurrent Assets | |||
| Cash and cash equivalents | 808,395 | 720,184 | |
| Cash and cash equivalents | 808,395 | 720,184 | |
| Trade and other receivables | 9 | 3,462,035 | 3,559,759 |
| Trade and other receivables | 9 | 3,462,035 | 3,559,759 |
| Inventories | 10 | 2,649,939 | 2,753,186 |
| Inventories | 10 | 2,649,939 | 2,753,186 |
| Prepayments | 176,297 | 197,152 | |
| Prepayments | 176,297 | 197,152 | |
| Total Current Assets | 7,096,666 | 7,230,281 | |
| Total Current Assets | 7,096,666 | 7,230,281 | |
| Non-current AssetsNon-current Assets | |||
| Plant and equipment | 11 | 3,474,070 | 3,131,925 |
| Plant and equipment | 11 | 3,474,070 | 3,131,925 |
| Intangible assets | 12 | 771,802 | 681,374 |
| Intangible assets | 12 | 771,802 | 681,374 |
| Deferred tax assets | 5 | 1,292,540 | 1,251,562 |
| Deferred tax assets | 5 | 1,292,540 | 1,251,562 |
| Other non-current assets | 17,917 | - | |
| Other non-current assets | 17,917 | - | |
| Total Non-current Assets | 5,556,329 | 5,064,861 | |
| Total Non-current Assets | 5,556,329 | 5,064,861 | |
| TOTAL ASSETS | 12,652,995 | 12,295,142 | |
| TOTAL ASSETS | 12,652,995 | 12,295,142 | |
| LIABILITIESLIABILITIES | |||
| Current LiabilitiesCurrent Liabilities | |||
| Trade and other payablesTrade and other payablesUnearned income | 1313 | 2,640,7382,640,7385,603 | 2,120,9652,120,96519,162 |
| Unearned income | 14 | 5,603 | 19,162 |
| Interest-bearing loans and borrowings | 659,333 | 550,347 | |
| Interest-bearing loans and borrowings | 14 | 659,333 | 550,347 |
| Provisions | 15 | 387,434 | 264,406 |
| Provisions | 15 | 387,434 | 264,406 |
| Total Current Liabilities | 3,693,108 | 2,954,880 | |
| Total Current Liabilities | 3,693,108 | 2,954,880 | |
| Non-current LiabilitiesNon-current Liabilities | |||
| Interest-bearing loans and borrowings | 14 | 2,285,066 | 2,556,275 |
| Interest-bearing loans and borrowings | 14 | 2,285,066 | 2,556,275 |
| Provisions | 15 | 39,146 | 32,230 |
| Provisions | 15 | 39,146 | 32,230 |
| Total Non-current Liabilities | 2,324,212 | 2,588,505 | |
| Total Non-current Liabilities | 2,324,212 | 2,588,505 | |
| TOTAL LIABILITIES | 6,017,320 | 5,543,385 | |
| TOTAL LIABILITIES | 6,017,320 | 5,543,385 | |
| NET ASSETS | 6,635,675 | 6,751,757 | |
| NET ASSETS | 6,635,675 | 6,751,757 | |
| EQUITYEQUITYContributed equity | 16 | 5,353,905 | 5,353,905 |
| Contributed equity | 16 | 5,353,905 | 5,353,905 |
| Retained earnings | 16 | 1,281,770 | 1,397,852 |
| Retained earnings | 16 | 1,281,770 | 1,397,852 |
| TOTAL EQUITY | 6,635,675 | 6,751,757 | |
| TOTAL EQUITY | 6,635,675 | 6,751,757 |
The accompanying notes form part of these financial statements The accompanying notes form part of these financial statements
SAFEROADS HOLDINGS LIMITED
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2016
| ContributedEquity | Reserves | RetainedEarnings | Total Equity | |
|---|---|---|---|---|
| $ | $ | $ | $ | |
| CONSOLIDATED | ||||
| At 1 July 2014 | 4,130,708 | (55,878) | 1,526,135 | 5,600,965 |
| Issue of share capital | 1,248,000 | - | - | 1,248,000 |
| Share issue costs | (24,803) | - | - | (24,803) |
| Net profit/(loss) for the period | - | - | (72,228) | (72,228) |
| Cessation of foreign operation | - | 56,055 | (56,055) | - |
| Other comprehensive income for the period | - | (177) | - | (177) |
| At 30 June 2015 | 5,353,905 | - | 1,397,852 | 6,751,757 |
| At 1 July 2015 | 5,353,905 | - | 1,397,852 | 6,751,757 |
| Net profit/(loss) for the period | - | - | (116,082) | (116,082) |
| Other comprehensive income for the period | - | - | - | - |
| At 30 June 2016 | 5,353,905 | - | 1,281,770 | 6,635,675 |
The accompanying notes form part of these financial statements
SAFEROADS HOLDINGS LIMITED
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2016
| 2016$ | 2015$ |
|---|---|
| Cash flows from operating activities | |
| Receipts from customers17,969,712 | 15,880,116 |
| Payments to suppliers and employees(16,743,096) | (15,338,647) |
| 1,226,616 | 541,469 |
| Interest received6,911 | 21,629 |
| Interest paid(211,125) | (464,689) |
| 8Net cash flows from operating activities1,022,402 | 98,409 |
| Cash flows from investing activities | |
| Proceeds from sale of plant and equipment35,288 | 407,173 |
| Purchase of plant and equipment(316,088) | (331,596) |
| Product development costs(263,752) | (300,864) |
| R&D tax rebate received220,624 | 303,990 |
| Net cash flows from investing activities(323,928) | 78,703 |
| Cash flows from financing activities | |
| Proceeds from issue of shares- | 1,248,000 |
| Share issue costs- | (24,803) |
| Repayment of borrowings(610,263) | (2,035,070) |
| Net cash flows from financing activities(610,263) | (811,873) |
| Net increase/(decrease) in cash and cash equivalents88,211 | (634,761) |
| Cash and cash equivalents at beginning of period720,184 | 1,354,945 |
| Cash and cash equivalents at end of period8808,395 | 720,184 |
The accompanying notes form part of these financial statements
1 CORPORATE INFORMATION
Saferoads Holdings Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange (ASX).
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation
The financial report is a general purpose financial report which is prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations of the authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. The financial report has also been prepared on a historical cost basis.
Saferoads Holdings Limited is a for-profit entity for the purposes of preparing the financial statements.
(b) Statement of compliance
The financial report has been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board (AASB). Compliance with Australian Accounting Standards results in full compliance with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
New and revised standards that are effective for these financial statements
A number of new and revised standards were effective for annual reporting periods beginning on or after 1 July 2015. There was no material impact on the Group of these new and revised standards.
Accounting standards issued but not yet effective and not been adopted early by the Group
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2016 reporting periods and have not been early adopted by the group. The group's assessment of the impact of these new standards and interpretations is set out below.
AASB 9 Financial Instruments addresses the classification, measurement and derecognition of financial assets and financial liabilities. The standard is not applicable until 1 January 2018 but is available for early adoption. When adopted, the standard will affect in particular the accounting for available-for-sale financial assets, since AASB 9 only permits the recognition of fair value gains and losses in other comprehensive income if they relate to equity investments that are not held for trading. Fair value gains and losses on available-for-sale debt investments, for example, will therefore have to be recognised directly in profit or loss. There will be no impact on the group's accounting for financial liabilities, as the new requirements only affect the accounting for financial liabilities that are designated at fair value through profit or loss and the group does not have any such liabilities. The derecognition rules have been transferred from AASB 139 Financial Instruments: Recognition and Measurement and have not been changed.
The entity is yet to undertake a detailed assessment of the impact of AASB 9 . However, based on the entity's preliminary assessment, the Standard is not expected to have a material impact on the transactions and balances recognised in the financial statements when it is first adopted for the year ending 30 June 2019.
AASB 15 Revenue from Contracts with Customers replaces AASB 118 Revenue, AASB 111 Construction Contracts and some revenue-related Interpretations and is effective from 1 January 2018:
-
establishes a new revenue recognition model
-
changes the basis for deciding whether revenue is to be recognised over time or at a point in time
-
provides new and more detailed guidance on specific topics (e.g. multiple element arrangements, variable pricing, rights of return, warranties and licensing)
-
expands and improves disclosures about revenue
The entity is yet to undertake a detailed assessment of the impact of AASB 15 . However, based on the entity's preliminary assessment, the Standard is not expected to have a material impact on the transactions and balances recognised in the financial statements when it is first adopted for the year ending 30 June 2019.
AASB 16 Leases replaces AASB 117 Leases and some lease-related Interpretations and requires all leases to be accounted for 'onbalance sheet' by lessees, other than short-term and low value asset leases. It provides new guidance on the application of the definition of lease and on sale and lease back accounting, largely retains the existing lessor accounting requirements in AASB 117 and requires new and different disclosures about leases.
The entity is yet to undertake a detailed assessment of the impact of AASB 16. However, based on the entity's preliminary assessment, the likely impact on the first time adoption of the Standard for the year ending 30 June 2020 includes:
-
there will be a significant increase in lease assets and financial liabilities recognised on the balance sheet
-
the reported equity will reduce as the carrying amount of lease assets will reduce more quickly than the carrying amount of lease liabilities
-
EBIT in the statement of profit or loss and other comprehensive income will be higher as the implicit interest in lease payments for former off balance sheet leases will be presented as part of finance costs rather than being included in operating expenses
-
operating cash outflows will be lower and financing cash flows will be higher in the statement of cash flows as principal repayments on all lease liabilities will now be included in financing activities rather than operating activities. Interest can also be included within financing activities
The financial statements were authorised for issue by the Directors on 23 August 2016. The Directors have the power to amend and reissue the financial statements.
(c) Basis of consolidation
The consolidated financial statements comprise the financial statements of the legal parent entity, Saferoads Holdings Limited and its subsidiaries ('the Group'). The separate financial statements of the parent entity have not been presented within this financial report as permitted by the Corporations Act 2001.
The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist.
All intercompany balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full.
Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group.
Where there is loss of control of a subsidiary, the consolidated financial statements include the results for the part of the reporting period during which Saferoads Holdings Limited has control.
(d) Foreign currency translation
Functional and presentation currency
The functional currency of each of the Group's entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity's functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year end exchange rate. Non monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the statement of profit or loss and other comprehensive income, except where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the statement of profit or loss and other comprehensive income.
Group companies
The financial results and position of foreign operations whose functional currency is different from the Group's presentation currency are translated as follows:
- assets and liabilities are translated at year end exchange rates prevailing at that reporting date;
- income and expenses are translated at average exchange rates for the period; and
- retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on the translation of foreign operations are transferred directly to the Group's foreign currency translation reserve in the statement of financial position. These differences are recognised in the statement of profit or loss and other comprehensive income in the period in which the operation is disposed.
(e) Property, plant and equipment
Property, plant and equipment are stated at cost less any accumulated depreciation and any impairment in value.
Depreciation is calculated on a diminishing value basis over the estimated useful life, except for rental barrier assets which are depreciated using the prime cost method.
Plant and equipment - 5% to 50%
(f) Borrowing costs
Borrowing costs are recognised as an expense when incurred.
(g) Impairment of non-financial assets other than goodwill
The Group assesses whether there is any indication that an asset may be impaired when events or changes in circumstances indicate the carrying value may not be recoverable. Where an indicator of impairment exists, the Group makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.
Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the asset's value in use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the recoverable amount is determined for the cash-generating unit to which the asset belongs. largelyindependentofthosefromotherassetsorgroupsofassets,inwhichcase,therecoverableamountisdeterminedforthe
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
(h) Goodwill and intangible assets
Goodwill
Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of the business combination over the group's interest in the fair value of the acquiree's identifiable assets, liabilities and contingent liabilities.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the group's cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the group are assigned to those units or groups of units. Each unit or group of units to which the goodwill is so allocated : or groupofunitstowhichthegoodwillissoallocated :
-
represents the lowest level within the group at which the goodwill is monitored for internal management purposes, and
-
is not larger than a segment based on either the group's primary or the group's secondary reporting format determined in accordance with AASB 8 Operating Segments.
Impairment is determined by assessing the recoverable amount of the cash-generating unit (group of cash-generating units), to which the goodwill relates. When the recoverable amount of the cash-generating unit (group of cash-generating units) is less than the carrying amount, an impairment loss is recognised. When goodwill forms part of the cash-generating unit (group of cashgenerating 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. GoodwillImpairmentofnon-financialassetsother thangoodwillBorrowingcostsare recognisedasanexpensewhenincurred.comprehensiveincomethroughtheamortisationlineitem.Impairmentisdeterminedbyassessingtherecoverableamountofthecash-generatingunit(groupofcash-generatingunits),to
Intangibles
Intangible assets acquired separately are capitalised at cost and from a business combination are capitalised at fair value as at the date of acquisition. Following initial recognition, the cost model is applied to the class of intangible.
The useful lives of these intangible assets are assessed to be either finite or indefinite.
Where amortisation is charged on assets with finite lives, this expense is taken to the statement of profit or loss and other comprehensive income through the amortisation line item.
Intangible assets, excluding development costs, created within the business are not capitalised and expenditure is charged against profits in the period in which the expenditure is incurred.
Intangible assets are tested for impairment where an indicator of impairment exists, and in the case of indefinite life intangibles annually, either individually or at the cash generating unit level. Useful lives are also examined on an annual basis and adjustments, where applicable, are made on a prospective basis.
Research and development costs
Research costs are expensed as incurred.
Development expenditure incurred on an individual project is carried forward when its future recoverability can reasonably be regarded as assured.
Following the initial recognition of the development expenditure, the cost model is applied requiring the asset to be carried at cost less any accumulated amortisation and accumulated impairment losses.
Any expenditure carried forward is amortised over the period of expected future sales from the related project.
The carrying value of each development project is reviewed for impairment annually when the asset is not yet in use, or more frequently when an indicator of impairment arises during the reporting year indicating that the carrying value may not be recoverable.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit or loss and other comprehensive income when the asset is derecognised.
Any Research and Development tax rebates received or receivable are offset against the respective capitalised development costs to the extent to which they relate to the claim.
(i) Inventories
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
-
Raw materials: purchase cost on a first-in, first-out basis;
-
Finished goods and work-in-progress: cost of direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
(j) Trade and other receivables
Trade receivables, which generally have 30-60 day terms, are recognised and carried at original invoice amount less an allowance for any uncollectable amounts.
An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off when identified.
(k) Cash and cash equivalents
Cash in the statement of financial position comprises cash at bank and on hand.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.
(l) Assets classified as held for sale
Assets are classified as held for sale and measured at the lower of their carrying amount and fair value less costs to sell if their carrying amount will be recovered principally through a sale transaction. They are not depreciated or amortised. For an asset to be classified as held for sale it must be available for immediate sale in its present condition and its sale must be highly probable.
SAFEROADS HOLDINGS LIMITED Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2016 SAFEROADS HOLDINGS LIMITED Notes to the Financial Statements
(m) Interest-bearing loans and borrowings (m) Interest-bearing loans and borrowings
All loans and borrowings are initially recognised at cost, being the fair value of the consideration received net of issue costs associated with the borrowing. All loans and borrowings are initially recognised at cost, being the fair value of the consideration received net of issue costs associated with the borrowing.
Interest expense is recognised as it accrues.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Afterinitialrecognition,interest-bearingloansandborrowingsaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterest method.
Gains and losses are recognised in the statement of profit or loss and other comprehensive income when the liabilities are derecognised as well as through the amortisation process. Gains and losses are recognised in the statement of profit or loss and other comprehensive income when the liabilities are derecognised as well as through the amortisation process.
(n) Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and benefits of ownership to the lessee. All other leases are classified as operating leases.
Assets held under finance leases are initially recognised at fair value, or, if lower, at an amount equal to the present value of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. (n)Leases(o) tothelessee. Allother leasesareclassifiedasoperatingleases.Assets held under finance leases are initially recognised at fair value, or, if lower, at an amount equal to the present value of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability.
Finance charges are charged directly against income. Finance leased assets are amortised over the estimated useful life of the asset. Finance charges are charged directly against income. Finance leased assets are amortised over the estimated useful life of the
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are recognised as expenses in the periods in which they are incurred. expensesintheperiodsinwhichtheyareincurred.
(o) Provisions Provisions
Provisions are recognised when the Group has a present obligation (legal and constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are recognised when the Group has a present obligation (legal and constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be
Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of profit or loss and other comprehensive income net of any reimbursement. Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of profit or loss and other comprehensive income net of any reimbursement.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pretax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-
(p) Contributed equity (p)
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax from the proceeds. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax from the proceeds.
(q) Revenue (q) Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised. Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be
Sale of goods
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and can be measured reliably. Risks and rewards are considered passed to the buyer at the time of delivery of the goods to the customer, or where the customer has explicitly requested that the goods be held on their behalf. Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and can be measured reliably. Risks and rewards are considered passed to the buyer at the time of delivery of the goods to the customer, or where the customer has explicitly requested that the goods be held on their behalf.
Interest Interest
Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument) to the net carrying amount of the financial asset. Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument) to the net carrying amount of the financial asset.
Dividends
Revenue is recognised when the shareholders' right to receive the payment is established. Revenueis recognisedwhentheshareholders'rightto receivethepaymentisestablished.Page 29
(r) Income Tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to taxation authorities based on the current period's taxable income. The tax rates and tax laws used to compare the amount are those that are enacted by the reporting date.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward or unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and future unused tax assets and unused tax losses can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Deferred income tax assets are measured at the tax rates that are expected to apply to the year when the asset is realised, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
(s) Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
-
where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
-
receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising from the investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.
(t) Employee benefits
Provision is made for the Group's liability for employee benefits arising from services rendered by employees to reporting date. Employee benefits expected to be settled wholly within one year have been measured at the amounts expected to be paid when the liability is settled plus related on-costs. All other employee benefit liabilities are measured at the present value of the estimated future cash outflows to be made for those benefits.
(u) Trade and other payables
Trade payables and other payables represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services.
(v) Derivative Financial Instruments
The group may use derivative financial instruments such as forward currency contracts to hedge risks associated with foreign currency fluctuations. Such derivative financial instruments are initially recognised at fair value at the date on which the derivative contract is entered into and are subsequently remeasured to fair value. Derivatives are carried as assets when the fair value is positive and as liabilities when their fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken directly to the statement of profit or loss and other comprehensive income for the year.
(w) Critical Accounting Estimates and Judgements
The Directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group.
Key Judgements
(i) Provision for Impairment of Receivables
Collectability of Trade Receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are written off by reducing the carrying amount directly. A provision for impairment is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables. of on basis.Debtsaretouncollectableare written the amount isestablished thereis thatthe
(x) Going Concern
The consolidated entity has incurred an operating loss after tax of $116,082 for the financial year ended 30 June 2016. This included relocation costs of $207,037 before tax (or $144,926 after tax), incurred in the current year but not expected to occur in the future. not be tocollect alldueaccordingto theoriginaltermsof Company debt by in financial minimum its
The Company reduced core debt by $504,000 in the financial year and met its minimum repayment plan with its financier, Commonwealth Bank of Australia. The financier has agreed a debt repayment plan without the requirement of any financial covenants, apart from providing six monthly financial reports and the Company has subsequently met all its obligations under the present facility agreement. StatementsENDED 30 JUNE (x)Going Concern3 Commonwealth The athe providing sixand theCompanyhassubsequentlymet allitsagreement. for ImpairmentofReceivables consolidatedincurred taxof $116,082 theyear ended30 June oftax (orincurred theyearnot occurGroup'soperating (ChiefExecutiveOfficer)financialinformationaconsolidatedbasisdecisionsconsolidated information.22% (2015:or 18%) the Group's revenues31
The Company's ongoing financial turnaround in 2016 resulted from continuing to manage the performance of the business, including maintaining margins and operating cash flows and controlling overheads. Company's ongoing turnaroundin 2016 fromthe business, andcash flowscontrollingoverheads.
The Company should continue to secure further profitable sales contracts for its emerging products in existing and new markets and continue to meet the minimum debt repayment plan set by the financier. Companycontinuetoprofitable salescontractsitsproductsandmarketstomeet minimumdebt repaymentsetfinancier.
At the date of this report and having considered the above factors, the continuance of its banking relationship and the fact the Company continues to improve its operating earnings base, the directors are confident that the consolidated entity is able to continue as a going concern. Accordingly, the accounts have been prepared on this basis. Atthe date of thisreportand having consideredtheabovefactors, thecontinuanceofitsbankingrelationshipandthefactthe continues to improve operating base, directors are the consolidated a goingAccordingly, beenpreparedbasis.
3 SEGMENT INFORMATION
The Group's chief operating decision maker (Chief Executive Officer) reviews financial information on a consolidated basis and makes strategic decisions based on this consolidated information.
The Group operates predominantly in Australia. GroupAustralia.
During 2016, $3,531,985 or 22% (2015: $2,721,812 or 18%) of the Group's revenues depended on a single customer.
4 REVENUES AND EXPENSES
(a) Specific Items
Profit/(loss) before income tax expense includes the following revenues and expenses whose disclosure is relevant in explaining the performance of the entity:
| CONSOLIDATED | ||
|---|---|---|
| 2016 | 2015 | |
| $ | $ | |
| (i) Revenue | ||
| Revenue from product sales and rentals | 15,904,666 | 13,699,900 |
| Product royalty income | 364,084 | 60,883 |
| Revenue from civil services | - | 1,434,798 |
| 16,268,750 | 15,195,581 | |
| (ii) Other income | ||
| R&D tax rebate | 121,863 | 289,277 |
| Net gain/(loss) on sale of assets | (21,976) | 21,605 |
| Interest | 6,911 | 21,629 |
| Other | 6,561 | 3,024 |
| 113,359 | 335,535 | |
| 16,382,109 | 15,531,116 | |
| (iii) Expenses | ||
| Depreciation and amortisation | ||
| - Plant & equipment | 312,149 | 394,620 |
| - Intangible assets | 86,159 | 66,982 |
| Impairment of plant & equipment | 52,570 | - |
| 450,878 | 461,602 | |
| Relocation costs | 207,037 | - |
| Restructuring costs incurred and provided for | - | 56,610 |
| Bad and doubtful debts / (provision writeback) | (3,743) | (15,212) |
| Motor vehicle costs | 143,533 | 214,383 |
| Occupancy costs | 352,703 | 311,487 |
| Travel and accommodation costs | 308,140 | 139,468 |
| IT & Communications costs | 155,863 | 178,745 |
5 INCOME TAX
Major components of income tax expense for the year ended 30 June 2016 are:
| CONSOLIDATED | ||
|---|---|---|
| 2016 | 2015 | |
| $ | $ | |
| Statement of Profit or Loss and Other Comprehensive income | ||
| Current income tax charge | (40,978) | (17,976) |
| Income tax expense/(benefit) reported in statement of profit or loss | ||
| and other comprehensive income | (40,978) | (17,976) |
| A reconciliation of income tax expense applicable to accounting | ||
| profit/(loss) before income tax at the statutory income tax rate to | ||
| income tax expense at the Group's effective income tax rate is as | ||
| follows: | ||
| Accounting profit/(loss) before income tax | (157,060) | (90,204) |
| At the statutory income tax rate of 30% | (47,118) | (27,061) |
| Non-deductible expenses | 6,140 | 9,085 |
| (40,978) | (17,976) |
| Statement of Profit or Loss | ||||
|---|---|---|---|---|
| Statement of Financial | and Other Comprehensive | |||
| Position | Income | |||
| 2016 | 2015 | 2016 | 2015 | |
| $ | $ | $ | $ | |
| Deferred income tax | ||||
| Deferred income tax at 30 June relates to the following: | ||||
| CONSOLIDATED | ||||
| Deferred income tax asset/(liability) | ||||
| Employee entitlements | 122,291 | 88,991 | (33,300) | 5,238 |
| Research & Development Costs | (210,525) | (201,756) | 8,769 | (6,587) |
| Other | 5,683 | 165,451 | 159,768 | (64,197) |
| Deferred tax assets relating to temporary differences not brought to | ||||
| account | 82,551 | (52,686) | (135,237) | 65,546 |
| Carry forward tax losses brought to account | 1,292,540 | 1,251,562 | - | - |
| Gross deferred income tax (liability)/asset | 1,292,540 | 1,251,562 | ||
| Deferred income tax charge | - | - |
As as 30 June 2016, the consolidated entity has carry forward tax losses with a tax effect of $2,353,634. Carry forward tax losses with a tax effect of $1,292,540 have been brought to account as a deferred tax asset. Carry forward tax losses with a tax effect of $1,061,094 relating to a prior year have not been brought to account.
The consolidated entity has realised capital losses with a gross amount of $1,832,149 that is available for offset against any future taxable capital gains.
6 EARNINGS PER SHARE
Basic earnings per share amounts are calculated by dividing net profit/(loss) for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net profit/(loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year (adjusted for the effects of dilutive options).
The following reflects the income and share data used in the total operation's basic and diluted earnings per share computations:
| CONSOLIDATED | ||
|---|---|---|
| 2016 | 2015 | |
| $ | $ | |
| Net profit/(loss) attributable to equity holders from continuing | ||
| operations | (116,082) | (72,228) |
| Net profit/(loss) attributable to equity holders of the parent | (116,082) | (72,228) |
| Net profit/(loss) attributable to ordinary shareholders for diluted | ||
| earnings per share | (116,082) | (72,228) |
| Weighted average number of ordinary shares for basic earnings | 36,400,000 | 31,613,151 |
| Adjusted weighted average number of ordinary shares for diluted | ||
| earnings per share | 36,400,000 | 31,613,151 |
| Cents | Cents | |
| - Basic for profit/(loss) for the full year | (0.32) | (0.23) |
| - Diluted for profit/(loss) for the full year | (0.32) | (0.23) |
For the purpose of calculating earnings and dividends per share, it is the ordinary shares of the legal parent that is used, being the proportionate weighting of the 36,400,000 shares on issue.
7 DIVIDENDS PAID AND PROPOSED
| CONSOLIDATED | ||
|---|---|---|
| 2016 | 2015 | |
| $ | $ | |
| Equity dividends on ordinary shares: | ||
| Interim franked dividend for 2016: 0.0 cents (2015: 0.0 cents) | - | - |
| Dividends proposed and not recognised as a liability: | ||
| Final franked dividend for 2016: 0.0 cents (2015: 0.0 cents) | - | - |
| Franking Credit Balance: | ||
| The amount of franking credits available for future reporting periods | ||
| after the payment of income tax payable and the impact of | ||
| dividends proposed. | 5,391,050 | 5,391,050 |
8 NOTES TO THE STATEMENT OF CASH FLOWS
| NOTES TO THE STATEMENT OF CASH FLOWSNOTES TO THE STATEMENT OF CASH FLOWS | ||
|---|---|---|
| CONSOLIDATEDCONSOLIDATED | ||
| 20162016 | 20152015 | |
| $$ | $$ | |
| Reconciliation of cashReconciliation of cash | ||
| For the purposes of the statement of cash flows, cash and cashFor the purposes of the statement of cash flows, cash and cashequivalents comprise the following at 30 June:equivalents comprise the following at 30 June: | ||
| Cash at bank and on handCash at bank and on hand | 808,395808,395 | 720,184720,184 |
| Reconciliation from the net profit/(loss) after tax to the netReconciliation from the net profit/(loss) after tax to the net | ||
| cash flows from operationscashflows fromoperations | ||
| Profit/(loss) after tax for the yearProfit/(loss) after taxfor theyear | (116,082)(116,082) | (72,228)(72,228) |
| Adjustments for:Adjustments for: | ||
| Depreciation and amortisationDepreciation and amortisation | 398,308398,308 | 461,602461,602 |
| Impairment of plant and equipmentImpairmentofplantandequipment | 52,57052,570 | -- |
| Net (profit)/loss on disposal of plant and equipmentNet (profit)/lossondisposalofplantandequipment | 21,97621,976 | (21,605)(21,605) |
| Changes in assets and liabilitiesChanges in assets and liabilities | ||
| (Increase)/decrease in trade and other receivables(Increase)/decrease in trade and other receivables | 97,72497,724 | (1,028,497)(1,028,497) |
| (Increase)/decrease in inventories(Increase)/decreaseininventories | 103,247103,247 | 120,596120,596 |
| (Increase)/decrease in other assets | 2,9382,938 | 181,411181,411 |
| Decrease/(increase) in deferred tax assetDecrease/(increase) in deferred tax asset | (40,978)(40,978) | (17,976)(17,976) |
| (Decrease)/increase in trade and other payables(Decrease)/increase in trade and other payables | 386,314386,314 | 761,284761,284 |
| (Decrease)/increase in unearned income(Decrease)/increase in unearned income | (13,559)(13,559) | (132,608)(132,608) |
| (Decrease)/increase in provisions(Decrease)/increaseinprovisions | 129,944129,944 | (153,570)(153,570) |
| Net cash from operating activitiesNet cash from operating activities | 1,022,4021,022,402 | 98,40998,409 |
| Non-cash financing and investing activitiesNon-cash financing and investing activities | ||
| of finance leases.offinanceleases. |
Non-cash financing and investing activities Non-cash financing and investing activities
During the year, the Group acquired property, plant and equipment with an aggregate value of $448,040 (2015: $66,209) by means of finance leases. During the year, the Group acquired property, plant and equipment with an aggregate value of $448,040 (2015: $66,209) by means
9 TRADE AND OTHER RECEIVABLES (CURRENT) TRADE AND OTHER RECEIVABLES (CURRENT)
| (Increase)/decrease in other assets(Increase)/decreaseinother assets | 2,9382,938 | 181,411181,411 | |
|---|---|---|---|
| Decrease/(increase) in deferred tax asset | (40,978)(40,978) | (17,976)(17,976) | |
| (Decrease)/increase in trade and other payables(Decrease)/increase in trade and other payables | 386,314386,314 | 761,284761,284 | |
| (Decrease)/increase in unearned income(Decrease)/increase in unearned income | (13,559)(13,559) | (132,608)(132,608) | |
| (Decrease)/increase in provisions(Decrease)/increaseinprovisions | 129,944129,944 | (153,570)(153,570) | |
| Net cash from operating activitiesNet cash from operating activities | 1,022,4021,022,402 | 98,40998,409 | |
| Non-cash financing and investing activitiesNon-cash financing and investing activities | |||
| of finance leases.offinanceleases. | |||
| 99 | TRADE AND OTHER RECEIVABLES (CURRENT)TRADE AND OTHER RECEIVABLES (CURRENT) | ||
| Trade receivablesTrade receivables | 3,191,4023,191,402 | 3,151,3843,151,384 | |
| Other receivablesOther receivables | 270,633270,633 | 412,210412,210 | |
| Provision for impairmentProvisionfor impairment | -- | (3,835)(3,835) | |
| 3,462,0353,462,035 | 3,559,7593,559,759 | ||
| Ageing of trade receivables not impairedAgeing of trade receivables not impaired | |||
| 1 - 30 days1 - 30 days | 1,886,7601,886,760 | 2,190,9612,190,961 | |
| 31 - 60 days31 - 60 days | 1,154,9161,154,916 | 941,682941,682 | |
| 61 - 90 days61 - 90 days | 147,226147,226 | 14,90614,906 | |
| 91 days and over91 days and over | 2,5002,500 | -- | |
| 3,191,4023,191,402 | 3,147,5493,147,549 | ||
| Trade receivables are non-interest bearing. Amounts over 60 days are deemed overdue.Trade receivables are non-interest bearing. Amounts over 60 days are deemed overdue. | |||
| Movement in provision for impairmentMovement in provision for impairment | |||
| Balance at the beginning of financial year | 3,8353,835 | 26,75126,751 | |
| Amounts written offAmounts written off | -- | (7,704)(7,704) | |
| Additional impairment provision recognised/(released)Additionalimpairmentprovision recognised/(released) | (3,835)(3,835) | (15,212)(15,212) |
| Movement in provision for impairmentMovement in provision for impairment | |||
|---|---|---|---|
| Balance at the beginning of financial yearBalanceatthebeginningoffinancialyear | 3,8353,835 | 26,75126,751 | |
| Amounts written offAmounts written off | -- | (7,704)(7,704) | |
| Additional impairment provision recognised/(released) | (3,835)(3,835) | (15,212)(15,212) | |
| -- | 3,8353,835 | ||
| CONSOLIDATEDCONSOLIDATED | |||
| 20162016 | 20152015 | ||
| $$ | $$ | ||
| 1010 | INVENTORIESINVENTORIES | ||
| Stock on handStock on hand | 2,649,9392,649,939 | 2,753,1862,753,186 | |
| Page 35Page 35 |
11 PLANT AND EQUIPMENT
| CONSOLIDATED | ||
|---|---|---|
| 2016 | 2015 | |
| $ | $ | |
| Plant & equipment at cost | 5,860,065 | 5,606,403 |
| Less accumulated depreciation | (2,385,995) | (2,474,478) |
| Total plant & equipment | 3,474,070 | 3,131,925 |
Movements in Carrying Amounts
Movement in the carrying amounts of plant and equipment between the beginning and the end of the financial year.
| CONSOLIDATED | ||
|---|---|---|
| Plant & equipment | 2016$ | 2015$ |
| Balance at beginning of year | 3,131,925 | 1,317,730 |
| Additions | 850,129 | 80,536 |
| Depreciation expense | (312,149) | (394,620) |
| Impairment | (52,570) | - |
| Reclassified from assets held for sale | - | 2,189,471 |
| Disposals | (143,265) | (61,192) |
| Carrying amount at 30 June | 3,474,070 | 3,131,925 |
12 INTANGIBLE ASSETS
| CONSOLIDATED | ||
|---|---|---|
| 2016 | 2015 | |
| $ | $ | |
| Licence agreements at cost | 73,677 | 73,677 |
| Less accumulated amortisation | (73,677) | (64,822) |
| - | 8,855 | |
| Product development costs | 989,446 | 882,910 |
| Less accumulated amortisation | (287,695) | (210,391) |
| 701,751 | 672,519 | |
| Patents | 70,051 | - |
| 771,802 | 681,374 |
| License | Product Devt | |||
|---|---|---|---|---|
| Movement in carrying amounts | Agreement$ | Patents$ | Costs$ | Total$ |
| Balance at 1 July 2014 | 13,914 | - | 694,476 | 708,390 |
| Capitalisation of costs | - | - | 300,864 | 300,864 |
| R&D tax rebate allocation | - | - | (260,898) | (260,898) |
| Amortisation expense | (5,059) | - | (61,923) | (66,982) |
| Carrying amount at 30 June 2015 | 8,855 | - | 672,519 | 681,374 |
| Balance at 1 July 2015 | 8,855 | - | 672,519 | 681,374 |
| Capitalisation of costs | - | 70,051 | 193,701 | 263,752 |
| R&D tax rebate allocation | - | - | (87,165) | (87,165) |
| Amortisation expense | (8,855) | - | (77,304) | (86,159) |
| Carrying amount at 30 June 2016 | - | 70,051 | 701,751 | 771,802 |
FOR THE YEAR ENDED 30 JUNE 2016 FOR THE YEAR ENDED 30 JUNE 2016
13 2016 2015 TRADE AND OTHER PAYABLES (CURRENT) 13 2016 2015 TRADE AND OTHER PAYABLES (CURRENT)
| $$ | $$ | ||
|---|---|---|---|
| Trade payablesTrade payables | 2,337,2952,337,295 | 1,683,7571,683,757 | |
| Accrued expensesAccrued expenses | 266,902266,902 | 376,983376,983 | |
| GST payableGST payable | 36,54136,541 | 60,22560,225 | |
| 2,640,7382,640,738 | 2,120,9652,120,965 |
Payables are non-interest bearing and are normally settled between 30 and 60-day terms. Payables are non-interest bearing and are normally settled between 30 and 60-day terms.
14 INTEREST-BEARING LOANS AND BORROWINGS 14 INTEREST-BEARING LOANS AND BORROWINGS
| CONSOLIDATEDCONSOLIDATED | |||
|---|---|---|---|
| 20162016 | 20152015 | ||
| $$ | $$ | ||
| CurrentCurrent | |||
| Hire purchaseHire purchase | 155,333155,333 | 50,34750,347 | |
| Bank loansBank loans | 504,000504,000 | 500,000500,000 | |
| 659,333659,333 | 550,347550,347 | ||
| Non-currentNon-current | |||
| Hire purchaseHire purchase | 293,066293,066 | 56,27556,275 | |
| Bank loansBank loans | 1,992,0001,992,000 | 2,500,0002,500,000 | |
| 2,285,0662,285,066 | 2,556,2752,556,275 |
The Group was in compliance with its reporting covenants at 30 June 2016 and is subject to a scheduled debt repayment plan. Therefore, in accordance with Australian Accounting Standard AASB 101, the Company's long term loans are classified as current and non-current according to those amounts due within 12 months and those due after 12 months. The Group was in compliance with its reporting covenants at 30 June 2016 and is subject to a scheduled debt repayment plan. Therefore, in accordance with Australian Accounting Standard AASB 101, the Company's long term loans are classified as current and non-current according to those amounts due within 12 months and those due after 12 months.
CONSOLIDATED
CONSOLIDATED
Hire purchase liabilities are secured by a charge over the financial assets. Hire purchase liabilities are secured by a charge over the financial assets.
| Financing facilities availableFinancing facilities available | CONSOLIDATEDCONSOLIDATED | |
|---|---|---|
| Atreporting date,the followingfinancing facilitieshad beenAtreporting date,the followingfinancing facilitieshad been | 20162016 | 20152015 |
| negotiated and were available: | $ | $ |
| negotiated and were available: | $ | $ |
| Total facilities:Total facilities: | ||
| - bank bills | 2,496,000 | 3,000,000 |
| - bank bills | 2,496,000 | 3,000,000 |
| - bank charge card | 75,000 | 75,000 |
| - bank charge card | 75,000 | 75,000 |
| - trade facilities including bank guarantees | - | - |
| - trade facilities including bank guarantees | - | - |
| Facilities used at reporting dateFacilities used at reporting date | ||
| - bank bills | 2,496,000 | 3,000,000 |
| - bank bills | 2,496,000 | 3,000,000 |
| - bank charge card | 72,000 | 60,000 |
| - bank charge card | 72,000 | 60,000 |
| - bank guarantees | - | - |
| - bank guarantees | - | - |
| Facilities unused at reporting dateFacilities unused at reporting date | ||
| - bank charge card | 3,000 | 15,000 |
| - bank charge card | 3,000 | 15,000 |
| - bank guarantees | - | - |
| - bank guarantees | - | - |
The bank facilities are secured by a registered charge over the whole of its assets and undertakings, and also a registered charge over the assets and undertakings of Saferoads Holdings Ltd. The bank facilities are secured by a registered charge over the whole of its assets and undertakings, and also a registered charge over the assets and undertakings of Saferoads Holdings Ltd.
Saferoads Pty Ltd is required to provide the Commonwealth Bank with half yearly financial statements. Saferoads Pty Ltd is required to provide the Commonwealth Bank with half yearly financial statements.
15 PROVISIONS 15 PROVISIONS
| CONSOLIDATEDCONSOLIDATED | |||
|---|---|---|---|
| 20162016 | 20152015 | ||
| CurrentCurrent | $$ | $$ | |
| Employee benefitsEmployee benefits | 387,434387,434 | 264,406264,406 | |
| Non-CurrentNon-Current | |||
| Employee benefitsEmployee benefits | 20,20320,203 | 32,23032,230 | |
| Deferred rent liabilityDeferred rent liability | 18,94318,943 | -- | |
| 39,14639,146 | 32,23032,230 |
16 EQUITY
| CONSOLIDATED | ||
|---|---|---|
| 2016 | 2015 | |
| Contributed Equity | $ | $ |
| Ordinary shares | ||
| Balance at beginning of period | 5,353,905 | 4,130,708 |
| 2 for 5 entitlement issue | - | 1,248,000 |
| less share issue costs | - | (24,803) |
| Issued and fully paid | 5,353,905 | 5,353,905 |
| Movements in ordinary shares on issue (legal parent) | No. of shares | |
| Balance at beginning of the period | 36,400,000 | 26,000,000 |
| 2 for 5 entitlement issue | - | 10,400,000 |
| At 30 June | 36,400,000 | 36,400,000 |
Ordinary shares carry one vote per share, either in person or by proxy, at a meeting of the Company, and carry the rights to dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held.
There is no current on-market buy-back of ordinary shares.
Retained Earnings
| CONSOLIDATED | ||
|---|---|---|
| 2016 | 2015 | |
| $ | $ | |
| Movements in retained earnings are as follows: | ||
| Balance at beginning of period | 1,397,852 | 1,526,135 |
| Net profit/(loss) for the year | (116,082) | (72,228) |
| Transfer from Reserves re: cessation of foreign operation | - | (56,055) |
| Balance at 30 June | 1,281,770 | 1,397,852 |
17 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group's principal financial instruments comprise commercial bills, hire purchase contracts, cash and short-term deposits. The main purpose of these financial instruments is to raise finance for the Group's operations.
The totals for each category of financial instruments are as follows:
| CONSOLIDATED | |||
|---|---|---|---|
| 2016 | 2015 | ||
| $ | $ | ||
| Financial Assets | |||
| - Cash and cash equivalents | 826,312 | 720,184 | |
| - Loans and receivables | 3,462,035 | 3,559,759 | |
| Total Financial Assets | 4,288,347 | 4,279,943 | |
| Financial Liabilities | |||
| - Financial liabilities at amortised cost | 5,585,137 | 5,227,587 | |
| Total Financial Liabilities | 5,585,137 | 5,227,587 |
The Group has various financial instruments such as trade debtors and trade creditors, which arise directly from its operations.
It is, and has been throughout the period under review, the Group's policy that no trading in financial derivatives shall be undertaken.
The main risks arising from the Group's financial instruments are interest rate risk, liquidity risk, foreign currency risk and credit risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below.
The Group also monitors the market price risk arising from all financial instruments.
(a) Interest rate risk
| Interest rate riskInterest rate riskThe Group's exposure to market risk for changes in interest rates relates primarily to the Group's long-term debt obligations. | ||||||
|---|---|---|---|---|---|---|
| The company's exposure to interest rate risk, which is the risk that the Financial Instrument's value will fluctuate as a result ofchangesinmarketinterestratesandtheeffectiveweightedaverageinterestratesonclassesoffinancialassetsandfinancialchanges in market interest rates and the effective weighted average interest rates on classes of financial assets and financialliabilities, is as follows:liabilities, is as follows: | ||||||
| WeightedWeightedAverageAverage | Fixed Interest RateFixed Interest RateMaturingMaturing | |||||
| InterestInterestRateRate | NonInterestBearingNon Interest Bearing | VariableInterestRateInterest Rate | Within1yearWithin 1 year | 1to5years1 to 5 years | TotalTotal | |
| 2016 | % | $ | $ | $ | $ | $ |
| Financial AssetsFinancial Assets- Cash- Cash- Receivables | 1.36%1.36%N/A | --3,462,035 | 826,312826,312- | --- | --- | 826,312826,3123,462,035 |
| - ReceivablesTotal Financial Assets | N/A | 3,462,0353,462,035 | -826,312 | -- | -- | 3,462,0354,288,347 |
| Financial Liabilities | ||||||
| - Payables- Payables- Bank borrowings- Bank borrowings | N/A6.52%6.52% | 2,640,738-- | -2,496,0002,496,000 | --- | --- | 2,640,7382,496,0002,496,000 |
| - Hire purchase- Hire purchase | 7.42%7.42% | -- | -- | 155,333155,333 | 293,066293,066 | 448,399448,399 |
| Total Financial LiabilitiesTotal Financial Liabilities | 2,640,7382,640,738 | 2,496,0002,496,000 | 155,333155,333 | 293,066293,066 | 5,585,1375,585,137 | |
| 20152015 | %% | $$ | $$ | $$ | $$ | $$ |
| Financial AssetsFinancial Assets- Cash- Cash- Receivables | 2.32%2.32%N/A | --3,559,759 | 720,184720,184- | --- | --- | 720,184720,1843,559,759 |
| Total Financial Assets | 3,559,759 | 720,184 | - | - | 4,279,943 | |
| Financial LiabilitiesFinancial Liabilities | ||||||
| - Payables | N/A | 2,120,965 | - | - | - | 2,120,965 |
| - Bank borrowings- Hire purchase | 8.98%*7.02% | -- | 3,000,000- | -50,347 | -56,275 | 3,000,000106,622 |
| Total Financial Liabilities | 2,120,9652,120,965 | 3,000,0003,000,000 | 50,34750,347 | 56,27556,275 | 5,227,5875,227,587 |
* Actual interest rate at 30 June 2015 was 6.59%
(b) Credit risk (b)
The Group trades only with recognised, credit worthy third parties. The Group trades only with recognised, credit worthy third parties.
It is the Group's policy that all customers who wish to trade on credit terms are subject to credit verification procedures and preagreed credit limits. It is the Group's policy that all customers who wish to trade on credit terms are subject to credit verification procedures and preagreed credit limits.
In addition, receivable balances are monitored on an ongoing basis with the result that the Group's exposure to bad debts is not significant.
The maximum exposure to credit risk, excluding the value of any collateral or other security, at reporting date recognised as financial assets is the carrying amount, net of any provisions for doubtful debts which is nil at 30 June 2016 (2015: $3,835), as disclosed in the statement of financial position and notes to the financial statements. The company holds no collateral or security in relation to financial assets. Themaximumexposuretocreditrisk,excludingthevalueofanycollateralorothersecurity,atreportingdaterecognisedasfinancialassets is the carrying amount, net of any provisions for doubtful debts which is nil at 30 June 2016 (2015: $3,835), as disclosed in the statement of financial position and notes to the financial statements. The company holds no collateral or security in relation to financial assets.
As at reporting date, the amount of financial assets past due, but not impaired, is $149,726 (2015: $14,906).
The Group does not have any material credit risk to any single debtor or group of debtors under financial instruments entered into by the company.
(c) Liquidity risk
The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of current working capital, bank loans, and hire purchase contracts.
Maturity analysis of financial liabilities:
| Within 1 Year | 1 to 5 Years | Over 5 Years | Total | |
|---|---|---|---|---|
| $ | $ | $ | $ | |
| 2016 | ||||
| - Payables | 2,640,738 | - | - | 2,640,738 |
| - Bank borrowings | 504,000 | 1,992,000 | - | 2,496,000 |
| - Hire purchase | 155,333 | 293,066 | - | 448,399 |
| Total Financial Liabilities | 3,300,071 | 2,285,066 | - | 5,585,137 |
| Within 1 Year | 1 to 5 Years | Over 5 Years | Total | |
| $ | $ | $ | $ | |
| 2015 | ||||
| - Payables | 2,120,965 | - | - | 2,120,965 |
| - Bank borrowings | 500,000 | 2,500,000 | - | 3,000,000 |
| - Hire purchase | 50,347 | 56,275 | - | 106,622 |
(d) Fair Values
The carrying amount of financial assets and liabilities recorded in the financial statements represents their respective fair values, determined in accordance with the accounting policies disclosed in Note 2 to the financial statements.
(e) Foreign Exchange Risk
Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial instrument fluctuating due to movement in foreign exchange rates of currencies in which the Group holds financial instruments which are other than the AUD functional currency of the Group.
At reporting date, the Group did not hold any financial instruments denominated in foreign currencies other than the Group's functional currency (AUD).
(f) Sensitivity Analysis
The following table illustrates sensitivities to the Group's exposures to changes in interest rates on borrowings and exchange rates on purchases. The table indicates the impact on how profit and equity values reported at reporting date would have been affected by changes in the relevant risk variable that management considers to be reasonably possible. These sensitivities assume that the movement in a particular variable is independent of other variables. The following sensitivities are based on market experience over the last 12 months.
| CONSOLIDATED | |||
|---|---|---|---|
| Profit/(loss) | Equity | ||
| Year Ended 30 June 2016 | $ | $ | |
| +/-2% in interest rates | +/-50,000 | +/-50,000 | |
| +/-5c in AUD / USD | +/-155,000 | +/-155,000 | |
| Year Ended 30 June 2015 | $ | $ | |
| +/-2% in interest rates | +/-60,000 | +/-60,000 | |
| +/-5c in AUD / USD | +/-155,000 | +/-155,000 |
SAFEROADS HOLDINGS LIMITED
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
18 COMMITMENTS AND CONTINGENCIES
| CONSOLIDATED | ||||
|---|---|---|---|---|
| 2016 | 2015 | |||
| $ | $ | |||
| Operating Leases - properties | ||||
| Non-cancellable operating leases: | ||||
| - less than one year | 263,207 | 295,070 | ||
| - later than one year but less than five years | 1,177,510 | 1,162,798 | ||
| - later than five years | 909,305 | 1,096,016 | ||
| 2,350,022 | 2,553,884 | |||
| Operating Leases - equipment | ||||
| Non-cancellable operating leases: | ||||
| - less than one year | 11,518 | 18,396 | ||
| - later than one year but less than five years | 17,235 | 6,922 | ||
| 28,753 | 25,319 | |||
| Total operating lease commitments | 2,378,776 | 2,579,203 | ||
| Hire Purchases | ||||
| Hire purchase commitments payable:- less than one year | 185,799 | 56,044 | ||
| - later than one year but less than five years | 320,867 | 59,267 | ||
| 506,666 | 115,311 | |||
| Less future finance charges | (58,267) | (8,689) | ||
| Total hire purchase liability | 448,399 | 106,622 | ||
| Reconciled to: | ||||
| Current liability | 155,333 | 50,347 | ||
| Non-current liability | 293,066 | 56,275 | ||
| 448,399 | 106,622 |
The Group leases its head office and warehouse facility and other interstate office sites under non-cancellable operating leases with terms ranging from 1 to 10 years.
The Group leases various warehouse and office equipment under non-cancellable operating leases with terms ranging from 4 to 5 years.
There are no material make good obligations with operating leases.
Hire purchase commitments relate to warehouse fitout, production and rental equipment, IT software and company motor vehicles.
There are no other commitments or contingent liabilities of the Group.
19 SUBSIDIARIES
The consolidated financial statements include the financial statements of Saferoads Holdings Limited and the subsidiaries listed in the following table.
| Country of | % equity interest | ||
|---|---|---|---|
| Name | incorporation | 2016 | 2015 |
| Saferoads Pty Ltd | Australia | 100% | 100% |
20 RELATED PARTIES
Transactions with Key Management Personnel
During the financial year the Company acquired certain consumable manufacturing materials from an entity related to Mr D. Hotchkin at normal commercial rates aggregating $24,410 (2015: $14,430), with $2,628 included in Trade payables at 30 June 2016 (2015: $2,758).
21 AUDITORS' REMUNERATION
| 2016$ | 2015$ | |
|---|---|---|
| Amounts received or due and receivable by:- Current auditors: Grant Thornton, for the audit of the financial report | 78,500 | 76,500 |
| Other services (R&D tax rebate): Grant Thornton | 18,000 | 37,445 |
22 KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Details of Management Personnel (i) Directors David Ashmore Non-Executive Chairman
| Darren Hotchkin | Chief Executive Officer |
|---|---|
| David Cleland | Non-Executive |
(ii) Executives
Peter Fearns Chief Financial Officer
(b) Compensation of Key Management Personnel
Details of the nature and amount of each element of the remuneration of Key Management Personnel ("KMP") are disclosed in the Remuneration Report section of the Directors' Report.
| 2016 | 2015 | |
|---|---|---|
| $ | $ | |
| Compensation of Key Management Personnel by category: | ||
| - Short-term employee benefits | 622,533 | 375,000 |
| - Post-employment benefits | 55,771 | 60,650 |
| - Long-term employee benefits | 3,162 | 2,833 |
| 681,466 | 438,483 |
23 PARENT ENTITY DISCLOSURES
| 2016$ | 2015$ | |
|---|---|---|
| Current assets | - | 8,411 |
| Total assets | 5,359,929 | 6,750,757 |
| Current liabilities | - | - |
| Total liabilities | - | - |
| Net assets | 5,359,929 | 6,750,757 |
| Issued capital | 5,353,905 | 6,744,712 |
| Retained earnings | 6,024 | 6,045 |
| Profit/(loss) of the parent entity | (21) | (13) |
| Total comprehensive income of the parent entity | (21) | (13) |
| Guarantees entered into by the parent entity in relation to debts ofits subsidiaries | - | - |
24 SUBSEQUENT EVENTS
There has been no matter or circumstance, which has arisen since 30 June 2016 that has significantly affected or may significantly affect the operations of the consolidated entity or the results of those operations or the state of affairs of the consolidated entity.
DIRECTORS' DECLARATION
In the opinion of the Directors of Saferoads Holdings Limited and its controlled entities:
- (a) the financial statements and notes of the consolidated entity and the remuneration disclosures that are contained in the Remuneration Report that forms part of the Directors' Report are in accordance with the Corporations Act 2001 (Cth), including:
- i) giving a true and fair view of the consolidated entity's financial position as at 30 June 2016 and of its performance for the year ended that date; and
- ii) complying with Accounting Standards and Corporations Regulations 2001.
- (b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable;
- (c) The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as reported in Note 2.
This declaration has been made after receiving the declarations required to be made to the Directors by the Chief Executive Officer and the Chief Financial Officer in accordance with section 295A of the Corporations Act 2001 (Cth).
Signed in accordance with a resolution of the Directors.
On behalf of the Board.
David Ashmore Director 25 August 2016
Page 43
The Rialto, Level 30 525 Collins St Melbourne Victoria 3000 The Rialto, Level 30 525 Collins St Melbourne Victoria 3000
Correspondence to: GPO Box 4736 Melbourne Victoria 3001 Correspondence to: GPO Box 4736 Melbourne Victoria 3001
T +61 3 8320 2222 F +61 3 8320 2200 E [email protected] W www.grantthornton.com.au T +61 3 8320 2222 F +61 3 8320 2200 E [email protected] W www.grantthornton.com.au
Independent Auditor's Report To the Members of Saferoads Holdings Limited Independent Auditor's Report To the Members of Saferoads Holdings Limited
Report on the financial report Report on the financial report
GPO Box 4736 Melbourne Victoria 3001 T +61 3 8320 2222 F +61 3 8320 2200 E [email protected] W www.grantthornton.com.au Independent Auditor's Report To the Members of Saferoads Holdings Limited Report on the financial report We have audited the accompanying financial report of Saferoads Holdings Limited (the "Company"), which comprises the consolidated statement of financial position as at 30 June 2016, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information and the directors' declaration of the consolidated entity comprising the Company and the entities it controlled at the year's end or from time to time during the financial year. We have audited the accompanying financial report of Saferoads Holdings Limited (the "Company"), which comprises the consolidated statement of financial position as at 30 June 2016, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information and the directors' declaration of the consolidated entity comprising the Company and the entities it controlled at the year's end or from time to time during the financial year.
"Company"), which comprises the consolidated statement of financial position as at 30 June Directors' responsibility for the financial report Directors' responsibility for the financial report
2016, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information and the directors' declaration of the consolidated entity comprising the Company and the entities it controlled at the year's end or from time to time during the financial year. Directors' responsibility for the financial report The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001. The Directors' responsibility also includes such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. The Directors also state, in the notes to the financial report, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, the financial statements comply with International Financial Reporting Standards. The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001. The Directors' responsibility also includes such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. The Directors also state, in the notes to the financial report, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, the financial statements comply with International Financial Reporting Standards.
The Directors of the Company are responsible for the preparation of the financial report Auditor's responsibility Auditor's responsibility
that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001. The Directors' responsibility also includes such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. The Directors also state, in the notes to the financial report, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, the financial Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require us to comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require us to comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.
statements comply with International Financial Reporting Standards. Auditor's responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
require us to comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and 'Grant Thornton' refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another's acts or omissions. In the Australian context only, the use of the term 'Grant Thornton' may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. 'Grant Thornton' refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another's acts or omissions. In the Australian context only, the use of the term 'Grant Thornton' may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies. Page 44 Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.
In making those risk assessments, the auditor considers internal control relevant to the Company's preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
Auditor's opinion
In our opinion:
- a the financial report of Saferoads Holdings Limited is in accordance with the Corporations Act 2001, including:
- i giving a true and fair view of the consolidated entity's financial position as at 30 June 2016 and of its performance for the year ended on that date; and
- ii complying with Australian Accounting Standards and the Corporations Regulations 2001.
- b the financial report also complies with International Financial Reporting Standards as disclosed in the notes to the financial statements.
Report on the remuneration report
We have audited the remuneration report included in the directors' report for the year ended 30 June 2016. The Directors of the Company are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards.
Auditor's opinion on the remuneration report
In our opinion, the remuneration report of Saferoads Holdings Limited for the year ended 30 June 2016, complies with section 300A of the Corporations Act 2001.
GRANT THORNTON AUDIT PTY LTD Chartered Accountants
M. A. Cunningham Partner - Audit & Assurance
Melbourne, 25 August 2016
ASX ADDITIONAL INFORMATION
The shareholder information set out below was applicable as at 31 August 2016. At this date the Company had on issue 36,400,000 ordinary shares in the company held by 619 shareholders.
SUBSTANTIAL SHAREHOLDERS
The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations Act.
| Holder name | No. of ordinary shares in which interestis held |
|---|---|
| MR DARREN JOHN HOTCHKIN & MRS JENNIFER ANN HOTCHKIN | |
| 7,479,885 | |
| RUMINATOR PTY LTD and related entities | 4,376,335 |
| MR STEVEN DI FABRIZIO | 2,302,614 |
| MR DUNCAN FRANCIS SMITH | 2,265,984 |
TWENTY LARGEST SHAREHOLDERS
| Name | No. of shares | % Held |
|---|---|---|
| MR DARREN JOHN HOTCHKIN & MRS JENNIFER ANN HOTCHKIN | ||
| 7,479,885 | 20.55 | |
| RUMINATOR PTY LTD | 3,208,163 | 8.81 |
| CAON PTY LTD | 2,509,429 | 6.89 |
| MR DUNCAN FRANCIS SMITH | 2,277,428 | 6.26 |
| NLKM PTY LTD | 1,804,409 | 4.96 |
| MR DAVID ALBERT McCLURE ASHMORE & MRS NOLA JOY ASHMORE | ||
| 1,256,807 | 3.45 | |
| MR GLENN SCOTT WADSWORTH & MR RICKI MARK WADSWORTH | 942,934 | 2.59 |
| CONTEMPLATOR PTY LTD | 844,522 | 2.32 |
| MR PHILIP BOMFORD | 600,000 | 1.65 |
| WAVET FUND NO. 2 PTY LTD | 541,409 | 1.49 |
| LIVINGSTONE SERVICES PTY LTD | 508,610 | 1.40 |
| STITCHING PTY LTD | 503,212 | 1.38 |
| KOONUNG NOMINEES PTY LTD | 490,000 | 1.35 |
| MR ROSS GEORGE YANNIS | 434,000 | 1.19 |
| MR DANIEL FORBES SPILLMAN | 350,000 | 0.96 |
| ROADWORX GROUP PTY LTD | 279,925 | 0.77 |
| WIGRAM INVESTMENTS PTY LTD | 251,094 | 0.69 |
| MR BRUCE ALLAN HEAD & MRS BETH ALISON HEAD | 245,464 | 0.67 |
| HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED | 236,222 | 0.65 |
| MRS JANET GRIFFITHS | 222,900 | 0.61 |
| 24,986,413 | 68.64 |
DISTRIBUTION OF SHAREHOLDINGS
| Holdings Ranges | Holders | Total Units | % |
|---|---|---|---|
| 1-1,000 | 120 | 65,233 | 0.18 |
| 1,001-5,000 | 186 | 570,124 | 1.57 |
| 5,001-10,000 | 95 | 783,901 | 2.15 |
| 10,001-100,000 | 170 | 5,800,730 | 15.94 |
| 100,001-and over | 48 | 29,180,012 | 80.16 |
| 619 | 36,400,000 | 100.00 |
The number of shareholders' holdings less than a marketable parcel is 253.
VOTING RIGHTS
All ordinary shares carry one vote per share.
NUMBER OF ORDINARY SHARES SUBJECT TO ESCROW
Nil.
CORPORATE DIRECTORY
Directors
David Ashmore (Chairman) Darren Hotchkin (Chief Executive Officer) David Cleland
Company Secretary Bankers
Registered Office Auditors
22 Commercial Drive Grant Thornton PO Box 2030 The Rialto, Level 30 Pakenham VIC 3810 525 Collins Street Telephone: Melbourne VIC 3000 Within Australia: 1800 060 672 International: +61 3 5945 6600 Facsimile: 03 5940 9420
Email: [email protected] Website: www.saferoads.com.au
Share Registry ASX Code
Automic Registry Services SRH Suite 310, Level 3 50 Holt Street Surry Hills NSW 2010
PO Box 2226 Strawberry Hills NSW 2012
Telephone
Within Australia: 1300 288 664 International: +61 2 9698 5414 Facsimile: 02 8583 3040 Website: www.automic.com.au
Email: [email protected]
Sonia Joksimovic Commonwealth Bank of Australia Warragul VIC 3820
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