ANNUAL
REPORT
2021
OPTIMISING PERFORMANCE
A
CONTENTS
BUSINESS AND STRATEGY
Corporate Profile
Chairman’s Statement
Chief Executive Officer’s Review
Strategy of the Group – Business Model and Strategy
Strategy of the Group – Principal Risks and Uncertainties
Chief Financial Officer’s Review
GOVERNANCE
Board of Directors
Key Management
Directors’ Report
Directors’ Statement on Corporate Governance
Audit Committee Report
Nominations Committee Report
Remuneration Committee
Statement of Directors Responsibilities
Corporate Responsibility
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15
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42
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51
54
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58
FINANCIAL STATEMENTS
Independent Auditor’s Report
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
Notes to the Consolidated Financial Statements
SEPARATE FINANCIAL STATEMENTS
OF THE COMPANY
Company Statement of Financial Position
Company Statement of Cash Flows
Company Statement of Changes in Equity
Notes to the Company Financial Statements
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B
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CORPORATE
PROFILE
Mincon Group Plc (“the Company” or “the Group”)
is an Irish engineering Group with its shares trading
on the AIM market of the London Stock Exchange
and the Euronext Growth Market.
The Company specialises in the design,
manufacture, sale and servicing of rock drilling
tools and associated products. The Company’s
strategy is to increase its share of the global rock-
drilling consumables market through organic growth
and acquisitions. Its manufacturing facilities are
located in Ireland, the UK, Finland, the USA, South
Africa, Canada, Sweden and Australia. The Company
also maintains a network of sales and distribution
companies in a number of international markets to
provide after sales support and service to customers.
DIRECTORS:
Hugh McCullough – Non Executive Chairman (Irish)
John Doris – Senior Independent Non-Executive Director (Irish)
Patrick Purcell – Non Executive Director (Irish)
Paul Lynch – Non Executive Director (Irish)
Joseph Purcell – Chief Executive Officer (Irish)
Thomas Purcell – (Regional Executive – Americas) (USA)
COMPANY SECRETARY:
Barry Vaughan (Irish)
REGISTERED OFFICE:
Smithstown Industrial Estate, Shannon, Co. Clare, Ireland
NOMINATED ADVISER,
EURONEXT GROWTH
ADVISER AND BROKER:
Davy, 49 Dawson Street, Dublin 2, Ireland
JOINT BROKER:
Shore Capital, Cassini House, 57 St James’s Street,
London SW1A 1LD, United Kingdom
LEGAL ADVISERS TO
THE COMPANY:
William Fry, 2 Grand Canal Square, Dublin 2, Ireland
AUDITOR:
KPMG, Chartered accountants, 1 Stokes Place,
St. Stephen’s Green, Dublin 2, Ireland
REGISTRAR:
Computershare Investor Services (Ireland) Limited
Heron House, Corrig Road, Sandyford Industrial Estate,
Dublin 18, Ireland
PRINCIPAL BANK:
Allied Irish Banks plc, Shannon, Co. Clare, Ireland
COMPANY WEBSITE:
www.mincon.com
TICKER SYMBOLS:
Euronext Growth: MIO.IR
AIM: MCON.L
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MINCON GROUP
FOUR GLOBAL
REGIONS
Americas Region
Europe and Middle East Region
Africa Region
Australia Pacific Region
These regions are being led by regional
VPs – proven leaders with Mincon, each
with a history of working effectively and
collaborating within the Group.
AMERICAS REGION
North and South
American Continents
EME EUROPE & MIDDLE
EAST REGION
All European Countries
Middle East Countries
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AFRICA REGION
African Continent
APAC AUSTRALIA
PACIFIC REGION
Australia, Papua New Guinea, Indonesia
CHAIRMAN’S
STATEMENT
At Mincon, we pride ourselves on our
engineering excellence and we are
always striving to deliver improved
performance with lower energy input
in all our products.
I am very pleased to be able to report to shareholders on another
year of growth for the Group. This has been achieved through
our continuing focus on innovative engineering solutions that
respond to our customers’ needs and resolve the problems that
they experience in their day-to-day operations.
Despite the difficulties thrown up by the pandemic
during 2021, we succeeded in increasing our revenue
by 11% over the prior year. At €14.6 million, our profit
after tax shows a modest increase on 2020.
Our profit margins were adversely affected by increased raw
material costs and significantly higher freight charges, not all of
which were recoverable through product price increases in the
reported year.
At Mincon, we pride ourselves on our engineering excellence and
we are always striving to deliver improved performance with
lower energy input in all our products. For example, one of our
most recent innovations has been the large diameter, down the
hole hammer. This was recently successfully tested on a
pile-boring project in Malaysia. With a drilled hole diameter of
1,750mm, we believe they are the largest diameter holes ever
drilled with a single down the hole hammer system. It has
achieved penetration rates that are a multiple of times faster
than those achieved with existing methods. With sustained
productivity rates at these levels, this system can be
transformational for the large diameter piling industry, especially
in areas of high building density, such as Hong Kong. We have
other new drilling tools coming through our research and
development programmes and we expect at least one of these
to begin commercial operations this year.
2021 was a difficult year for many of our clients, particularly in the
South African and Australian mines, where extended lockdowns
limited our ability to develop new business, and in some cases,
limited our ability to give our desired level of customer service.
With considerable effort from our regional service teams, we were
able to overcome many of the COVID-19 related problems that
arose, even if we were precluded from developing the new
business that had been primed prior to the onset of COVID-19.
Chief amongst these delays has been the delay in the
commercialisation of our leading hydraulic hammer system,
known as the “Greenhammer”.
On behalf of the Board
of Mincon I am delighted
to present the Annual
Report for the year ended
31 December 2021.
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CHAIRMAN’S
STATEMENT
CONTINUED
We successfully field-tested it in a major open pit operation in
There is great pride in working for a company where its
Australia, but almost continuous COVID-19 lockdown
regulations at that pit have precluded us from bringing it to full
commercial operation. We are currently examining potential
technical ambitions and abilities are continually demonstrated
across the globe.
routes to commerciality with other clients, and subject to the
I would like to thank all our staff worldwide for their hard work
lifting of COVID-19 restrictions, we expect that it will start
and dedication to the aims and ethos of the Group. I would
generating revenue in 2022.
also like to thank my colleagues on the board for their
continuing support and insights into the Group’s business.
Although it was quieter in 2021, the construction sector
Finally, I would like to thank our excellent management team
continues to provide excellent growth potential for the Group,
who set the example for all to follow.
and we have tendered for a number of major geotechnical
projects, mainly in the United States. We fully expect to be
awarded some of these contracts, which, as we saw in 2020,
significantly boost our revenue and profit performance. We are
Hugh McCullough
Chairman
also developing new drilling technology for the renewable
11 March 2022
energy sector for anchoring offshore wind turbines.
As can be seen in our product development
programme, we continue to focus on our
Environmental, Social and Governance (“ESG”)
performance. The nature of our research and
development programme for new drilling tool
applications concentrates on reducing energy input
while increasing operating efficiency.
We will complete a detailed review of our ESG performance
with recommendations for improvement in the first half of 2022.
Over the 45 years that the Group has been trading, we have
developed and maintained an extremely capable and loyal
staff. Many of these employees have been with the Group long
before our IPO in 2013. I believe that the excitement of working
for a company that is committed to developing new innovative
tools for our customers is a significant factor in retaining
excellent people, as is the confidence that our senior
management will continue to deliver on the Group’s mission
to be “The Driller’s Choice”.
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CHIEF EXECUTIVE
OFFICER’S REVIEW
Following a very challenging year in
2021, we are pleased to report growth
in revenue and profitability in 2021.
The start of the year was particularly
challenging due to the impact of
the COVID-19 pandemic, but we
worked hard to mitigate the impact
by adapting our operations to suit
the conditions. While strict COVID-19
health measures remained in place
through the year in some areas, such
as Western Australia, we still delivered
a strong performance for the year.
The areas of procurement and logistics remained difficult
during the period with issues on availability, raw material price
increases, higher freight costs and longer transit times. As a
result, we chose to increase both raw materials and finished
goods to ensure strong service to our customers. Price increases
are being passed through where possible to maintain margins.
Our strong regional management structure and global
coverage reduced the potential impact of COVID-19
on the business and has meant that we can continue
to operate with minimal cross-regional travel. We are
keeping this situation under review, and provided
that the global situation continues in the current
positive direction, we intend to ease our restrictions
on travel. It is important to note that we will control
this travel expenditure carefully and continue to
leverage the strength of our global organisation.
The pandemic impacted on product development throughout
2021. However, we achieved some important milestones towards
the end of the year. Our hydraulic Greenhammer ran successfully
on our own Mincon rig at a major open pit iron ore mine in north-
western Australia. Stringent COVID-19 restrictions in Western
Australia curtailed our ability to put the revolutionary results, in
terms of penetration rate increases and reliability, to commercial
use. As a result, and subject to pandemic restrictions easing
in Western Australia, we are working on alternative routes to
commercialising this transformational opportunity for the Mincon
Group and the hard rock surface mining industry. It is important
to note that protecting our hard earned IP will be at the forefront
of any agreements that we commit to.
Another testing win was the successful drilling that we carried
out in Malaysia with a new large diameter hammer system to
drill 1750mm diameter rock socket friction piles. We believe that
these are the largest holes ever drilled with a single hammer.
While we need to drill more metres using the system, the
performance, which is several times faster than the existing
technology, gives us great encouragement. We believe that
there is great potential for this product globally as the
preferred method for drilling large diameter construction
piles more efficiently.
Following a very
challenging year in 2021
we are pleased to report
growth in revenue and
profitability in 2021.
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CHIEF EXECUTIVE
OFFICER’S REVIEW
CONTINUED
Another important milestone during the year
was the Disruptive Technology Innovation Fund
award to a Mincon - led consortium involved
in developing a certified anchor foundation
solution for the offshore wind industry.
In July 2021 we acquired Attakroc, a distribution company.
Which has contributed positively to our revenue and
profitability since joining the Group. The strong customer
service ethos that the team has brought will serve us
well in our efforts to grow our market share in the three
industries that the Group serves today in eastern Canada.
We have made good progress on this project with our
consortium partners, Subsea Micropiles, University of
Limerick and University College Dublin. One of the key
aspects of the project is the self-drilling seawater powered
micropile anchor that we have designed in Mincon. A
small scale prototype has been test drilled onsite at the
Shannon plant and we are continuing to refine this. We are
also working with our partners to develop a seabed drill
rig as part of an overall system to drill, load test and certify
anchor installations at an offshore test site. The future global
requirement for offshore wind power is well chronicled
which provides a very attractive future market for Mincon.
An important contributor towards our development of the
seabed drill rig has been Hammer Drilling Rigs. In January
2021, Mincon acquired the intellectual property including,
the knowledge and designs for developing bespoke rigs
for terrestrial applications. This has been, and will continue
to be, very important in our subsea rig development.
There is also a growing interest in and growing order book
for the rigs and masts produced by Hammer Drilling Rigs
for terrestrial applications such as construction and solar
field applications, which will complement the consumable
range that we already have within the Group. We are very
happy with the successful integration of the engineering and
production teams into our facility in Benton, and we believe
that the product range has a bright future within the Group.
In January 2022, we completed the acquisition of Spartan
Drill Tools, based in Fruita Colorado, which produces high
quality drill pipes and related products. This strategic
acquisition introduces this capability into the Americas
region to further strengthen our full package offering for the
mining, construction, and waterwell/geothermal markets.
An important aspect of this deal is that we can integrate
certain aspects of drill pipe manufacturing with available
capacity and skillsets that we already have in Benton to
leverage more efficiencies and hence improve our margins.
Our engineering focus on the efficiency of the products that we
manufacture means that we have always sought to minimise
our carbon footprint. This is more obvious on projects such as
Greenhammer and will be further emphasised by our move into
renewables with solar energy and offshore wind installations.
We are also increasing production efficiencies and are investing
in new technologies in this area to further reduce our impact
on the environment. We are in the process of a conducting a
detailed review of our carbon emissions and will be reporting
on this with reduction targets in the first half of 2022.
As a truly global Group, we are embedded in a
wide range of cultures and communities across
our operations and markets. As a significant
employer in these communities, Mincon has a
meaningful role to play in these societies and we
are committed to increasing opportunities for our
employees as well as the wider communities.
As with the carbon emissions project, we will be reporting
on Corporate Social Responsibility (CSR) initiatives, on our
website, in a more formal manner in the coming year to reflect
our continued commitment to the communities in which we
operate.
CONCLUDING COMMENTS
Since our IPO in 2013, we have been on a journey that has
filled out our product offering so that we can now supply a
full range of consumables to the mining, construction, and
waterwell/geothermal markets. Our engineering capacity has
been transformed by adding to our team through acquisition
and strategic hiring.
Our desire to focus on efficiency through ambitious product
development projects that have challenged us, but which are
now poised to deliver, has built a knowledge base and honed
our abilities. These engineering skillsets can now be deployed
for new product development in existing markets as well as
new areas such as our move into the renewables space.
Our increased manufacturing capacity, combined with the
global spread of our factories and customer service centres,
means that we have created a platform for future growth.
Of course, we remain cognisant of the challenges that the
COVID-19 pandemic still presents, and we will endeavour to
mitigate the effect on our people. On that note I wish to thank
our Board and investors for their continued support, and all my
colleagues for their work, vigilance and perseverance through
these challenging times and look forward to better days ahead.
Joseph Purcell
Chief Executive Officer
11 March 2022
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STRATEGY OF THE GROUP
BUSINESS MODEL AND
STRATEGY
STRATEGY OF THE GROUP
PRINCIPAL RISKS AND
UNCERTAINTIES
The Group has a five-year rolling strategy,
which is reviewed by the Executive and
the Board each year, and as necessary.
We examine and reflect on our decisions,
continually review our processes and act to
mitigate adverse outcomes.
Mincon manufactured product can be broken down into
eight distinct product lines:
1. Conventional down the hole (DTH) product
2. Reverse circulation (RC) product
3. Horizontal directional drilling (HDD) product
4. Rotary drilling product
5. Geotechnical product
6. Drill pipe product
7. Tungsten carbide product
8. Mast attachments for excavators
Mincon manufactured hammers, bits (including rotary bits),
pipes and mast attachments are used in a variety of drilling
industries including production and exploration mining,
waterwell, geothermal, construction, quarrying oil and gas and
seismic drilling. Mincon also provides a hard-rock HDD system
to provide access for fibre optic cable laying and similar
activities. In addition, Mincon, through its subsidiary Mincon
Carbide Limited, manufactures tungsten carbide inserts, its
core markets being mining and the construction industry.
DTH, RC & HDD products have distinct sales lines for
associated parts, namely hammers, spares, bits and pipes.
Bits and pipes can be sold separate from the hammer.
Mincon manufactures a range of bits and pipes to an industry
standard size which can be used in conjunction with hammers
manufactured by competitors. Rotary bits are made to industry
standard size and are used in the same mining applications as
Mincon’s DTH hammers and bits. Ring bits, pilot bits, casing
systems and forepoling systems are generally sold with DTH
products but can be sold separately. Tungsten carbide high
quality impact buttons are used on the face of DTH, RC, HDD
& tricone drill bits and ring and pilot bits.
The Mincon hammers, bits, casing systems, forepoling systems
and pipes are considered consumable items in the drilling
industry in contrast with capital items such as truck/track-
The Group manufactures and sells rock drilling consumable
PRINCIPAL RISKS RELATING TO THE GROUP’S INDUSTRY
mounted drilling rigs and large air compressors. As products of
products, and the timely supply and service of these products
a consumable nature, Mincon products have a shorter life cycle
is paramount to our business model. Since the markets that we
than capital goods (such as rigs and compressors).
serve across the world are geographically dispersed, and the
lead times for delivery are set by customer requirements and
The Group’s strategy and business model and amendments
competition to a large degree, we have built a wide network
thereto, are developed by the Chief Executive Officer and
his Executive team, and approved by the Board. The senior
management team, led by the Chief Executive Officer, is
of customer service centres backed by manufacturing plants
in key markets. We continue to review our factory operations
and from time to time we relocate the manufacture or part
responsible for implementing the strategy and managing the
manufacture of some products from one factory to another, in
business at an operational level.
some cases, to achieve better economies of scale, and in other
cases, to manufacture products with long lead times closer
The Group’s overall strategic objective is to develop long term
to their markets so that we can adapt to changing customer
sustainable competitive advantage with our products and
needs in a more timely fashion. These factory reviews are
services for customers, for the benefit of our shareholders and
ongoing as part of the company’s rolling strategic plan.
all stakeholders.
We continue to look for opportunities to increase our
The Group focus has been on manufacturing hammers and bits
geographical footprint and the vertical integration of supply
for surface drilling for mining production, mining exploration,
lines where they add strategic value for the Group and add
horizontal drilling, geotechnical projects, waterwell and
margin. However, in the immediate years ahead the company
geothermal applications. We continue to diversify our income
will focus more closely on organic growth of existing products
streams by extending our addressable market into those
in the regions that we service, and on bringing new drilling
industries. We continue to extend the ranges of hammers and
technologies, currently in development, to the market.
bits that we offer, not only to further our market reach, but also
to complement our complete range of surface drilling solutions.
In executing the Group’s strategy and operational plans,
We continue to develop the drill string components that
management will typically confront a range of day-to-day
support a full product range and service offering. Our strategic
challenges associated with key risks and uncertainties, and
direction is to provide market leading products, manufactured,
through compliance, audit, risk management and policy
supplied and serviced by the Group, to a diversified range of
setting, we will aim to mitigate these risks and maximise the
industries. The diversification of income streams into industries
sustainable opportunity for success.
with differing business cycles is designed to minimise volatility
in earnings growth.
We are committed to:
We seek to market competitive products centred on an ethos
of innovative engineering and service, and are committed to
adding value for our customers by partnering with them to
find lower total drilling cost solutions. We supply markets and
customers across the world. Our broad geographical spread
enables us to obtain feedback from the use of our products in
•
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innovative engineering and industry leading quality
the creation of new drilling products and technologies and
associated intellectual property, supported, inter alia, by
patents
industry leading field service delivery, and
improving the skill sets of our teams.
a wide range of drilling environments. This constant iteration
The Group’s principal risks and uncertainties are outlined in
from the end customer to engineering and back to the market
this section. Mincon has adopted appropriate controls and
drives our design and process improvements. We continue to
recruited management with the necessary skills and experience
devote significant resources to refining and improving current
to manage and mitigate these risks where possible and thus
products.
enable execution of the Group’s business strategy as outlined
in this section.
The Group’s products are used in industries which are either
cyclical or affected by general economic conditions
The demand for the Group’s products and services is affected
by changes in customers’ investment plans and activity levels.
Customers’ investment plans can change depending on global,
regional and national economic conditions or a widespread
financial crisis or economic downturn. The demand for the
Group’s products is affected by the level of construction and
mining activities as well as mineral prices. A financial crisis
may also have an impact on customers’ ability to finance their
investments. In addition, changes in the political situation in
a region or country or political decisions affecting an industry
or country can also materially impact on investments in
consumable equipment. Although the Group believes that its
sales are well diversified with customers located in disparate
geographic markets and industry segments, it is likely that
the Group would be affected by an economic downturn in the
markets in which it operates.
The Group is exposed to risks associated with operations in
emerging markets
The Group’s international operations may be susceptible
to political, social and economic instability and civil
disturbances. Risks of the Group operating in such areas
may include:
• disruption to operations, including strikes, civil actions,
international conflict or political interference;
• changes to the fiscal regime including changes in the rates
of income and corporation taxes;
•
reversal of current policies encouraging foreign investment
or foreign trade by the governments of certain countries in
which the Group operates;
limited access to markets for periods of time;
increased inflation; and
•
•
• expropriation or forced divestment of assets.
Any of the above factors could result in disruptions to the
Group’s business, increased costs or reduced future growth
opportunities. Potential losses caused by these disruptions
may not be covered by insurance.
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STRATEGY OF THE GROUP
PRINCIPAL RISKS AND
UNCERTAINTIES
CONTINUED
PRINCIPAL RISKS RELATING TO THE GROUP’S INDUSTRY
While the Group continuously invests in research and
(CONTINUED)
The Group operates in countries with less developed
legal systems
Some countries in which the Group operates may have
less developed legal systems than countries with more
established economies, which may result in risks such as:
• effective legal redress in the courts of such jurisdictions,
whether in respect of a breach of law or regulation or in an
ownership dispute, being more difficult to obtain;
• a higher degree of discretion on the part of governmental
authorities;
• a lack of judicial or administrative guidance on interpreting
applicable rules and regulations;
• an inability on the part of the Group to adequately protect
its assets in these jurisdictions;
•
inconsistencies or conflicts between and within various
laws, regulations, decrees, orders and resolutions; or
•
relative inexperience of the judiciary and courts in such
matters.
In some jurisdictions, the commitment of local business
people, government officials and agencies and the judicial
system to abide by legal requirements and negotiated
agreements may be more uncertain, creating particular
concerns with respect to licences and agreements for
business. These may be susceptible to revision or cancellation
and legal redress may be uncertain or delayed. There can
be no assurance that joint ventures, licences or other legal
arrangements will not be adversely affected by the actions
of government authorities or others and the effectiveness of
and enforcement of such arrangements in these jurisdictions
cannot be assured.
If the Group fails to develop, launch and market new
products, respond to technological development or compete
effectively, its business and revenues may suffer
The Group’s long-term growth and profitability is dependent
on our ability to develop and successfully launch and market
new products. The Group’s revenues and market share may
suffer if it is unable to successfully introduce new products in a
timely fashion or if any new or enhanced products or services
are introduced by our competitors that customers find more
advanced and/or better suited to their needs.
development to develop products in line with customer
demand and expectations, if it is not able to keep pace with
product development and technological advances, including
also shifts in technology in the markets in which it operates, or
to meet customer demands, this could have a material adverse
effect on the Group’s business, results and financial condition.
The Group’s products may be duplicated by competitors or
its intellectual property may be misappropriated
The Groups proprietary products may be duplicated either
directly or by misappropriation of intellectual property. The
Group files patents where appropriate and limits access to
technical information on Research and Development. However
some jurisdictions, in which the Group operates and in which
our competitors manufacture, may not have the same level of
patent protection as others and enforcement of patents may
be a lengthy process. If competitors’ duplicate the Groups
proprietary products, it could have a material adverse effect on
the Group’s revenues and results.
If the Group’s manufacturing and production facilities are
damaged, destroyed or closed for any reason, our ability to
distribute products will be significantly affected
The Group has nine manufacturing facilities located in Ireland,
the UK, Sweden, Finland, Australia, South Africa, Canada
and the United States. Should any of these facilities be
destroyed or closed for any reason, or the equipment in the
facilities be significantly damaged, the Group is likely to face
setbacks in our ability to manufacture and distribute products
to customers. Such circumstances, to the extent that it is not
possible to find an alternative manufacturing and production
facility, or transfer manufacturing to other Group facilities
or repair the damaged facilities or damaged equipment in a
timely and cost-efficient manner, could have a material adverse
effect on the Group’s business, results and financial condition.
In addition, the availability of manufacturing components
is dependent on suppliers to the Group and, if they suffer
interruptions or if they do not have sufficient capacity, this
could have an adverse effect on the Group’s business and
results.
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STRATEGY OF THE GROUP
PRINCIPAL RISKS AND
UNCERTAINTIES
CONTINUED
FINANCIAL CONDITION RISKS
The Group is exposed to the risk of currency fluctuation
The Group is exposed to fluctuations in the price of
Cyber Risk
Future Revenues
The Group relies on the ability to secure orders from new
customers as well as maintaining relationships with existing
customers to generate most of its revenue. Investors should
not rely on period to period comparisons of revenue as an
indicator of future performance.
Competition
The markets for the Group’s products are highly competitive in
terms of pricing, product design, service and quality, the timing
and development and introduction of new products, customer
services and terms of financing. The Group faces intense
competition from significant competitors and to a lesser extent
small regional companies. If we do not compete successfully in
all of our business areas and do not anticipate and respond to
changes in evolving market demands, including new products,
we will not be able to compete successfully in our markets,
which could have a material adverse effect on the Group’s
business, its results and financial condition.
The Group is subject to competition in the markets in which
it operates and some of its competitors are significantly
larger and have significantly greater resources than the
Group. The Group’s principal competitors are Epiroc which
is headquartered in Stockholm, Sweden, with a global reach
spanning more than 150 countries and Sandvik, which is also
headquartered in Stockholm, Sweden, with business activities
in more than 160 countries. There can be no guarantee that
the Group’s competitors or new market entrants will not
introduce superior products or a superior service offering.
Such competitors may have greater development, marketing,
personnel and financial resources than the Group. Should
these or other competitors decide to compete aggressively
with the Group on price in the markets and industries in which
it operates while offering comparable or superior quality
products, this could have a material adverse effect on the
Group’s financial position, trading performance and prospects.
The Group’s financial condition and results of operations are
raw materials
Cyber fraud is an increasing risks as the business relies more
reported in euro but a large proportion of its revenues are
denominated in currencies other than euro, including the US
dollar, the Canadian dollar, the Australian dollar, the Swedish
The Group’s operations give rise to risks due to changes in
on online systems, this is inclusive of our manufacturing
the price of market-quoted raw materials, mainly steel and
software systems, customer service systems and banking
tungsten. The prices can vary significantly during a year. If the
systems. The security and processes around the Group’s
Krona, Sterling and the South African rand. Adverse currency
market does not permit a transfer of the effects of changing
IT and banking systems are subject to review by subsidiary
exchange rate movements may hinder the Group’s ability to
procure important materials and services from vendors and
suppliers, may affect the value of its level of indebtedness,
and may have a significant adverse effect on its revenues and
raw material prices into the end-price of the products, this may
management, regional management and Group management.
have a material adverse effect on the Group’s business, results
of operations and financial condition.
Mincon has adopted the appropriate controls and procedures
to mitigate the risks detailed above. The Group has recruited
overall financial results. In the past, the Group has experienced
Risks related to COVID-19 pandemic
experienced management with the necessary skills and
gains and losses from exchange rate fluctuations, including
foreign exchange gains and losses from transactions risks
The Group is exposed to risks to business interruption caused
experience to manage and alleviate risk where possible.
by the global COVID-19 pandemic. These risks may relate to
associated with assets and liabilities denominated in foreign
interruptions in raw materials supply, interruptions in end user
The Group management report to the Audit Committee
currencies, including inter-company financings.
markets through work stoppages or shipping difficulties or
annually with a detailed risk report, including all possible risks
Contractual Arrangements
interruptions in manufacturing capacity caused by a potential
to the Group. This report covers, but is not limited to, level
outbreak of infection in the communities where one or more of
of acceptable risk to ensure that risk awareness is set at an
The Group derives some of its revenue from large transactions
our plants is located, with a consequent material adverse effect
appropriate level and mitigating factors around these risks.
(which may be non-recurring in nature). Prospective sales are
on the Group’s revenue and results.
subject to delays or cancellation which the Group has little
This enables execution of the Group’s business strategy as
outlined above while the comfort of mitigating the Group’s
or no control and these delays could adversely affect results.
Climate Change
overall risk exposure.
Also, to address the non-recurring nature of some of these
The Group is at risk from climate change. This is demonstrated
transactions, the Group needs to focus on securing new lines
in ways such as pollution, access to resources which can effect
of business on a regular basis.
Customer Concentration
supply chain, raw material prices, changes to local laws and
regulations, increases in taxes and local tariffs. If the Group
does not seek new methods of manufacturing to reduce our
During 2021, the Group’s top ten customers have accounted
carbon footprint, or continue to resource raw materials from
for approximately 28% of its revenues. If, in the future, these
ethical supply chain, the Group risk to climate change will
customers fail to meet their contractual obligations, decide not
increase. The ongoing projects the Group is directly involved
to purchase the Group’s products or decide to purchase fewer
products, this could disrupt the Group’s business and require
in relation to climate change can be viewed on our
corporate website at corporate.mincon.com/esg/
it to expend time and effort to develop relationships with new
environmental-governance/
customers, which could have a material adverse effect on the
Group’s business, results of operations and financial condition.
There can be no assurance that, even if the Group could find
alternate customers, the Group could receive the same price
for its products.
18
19
CHIEF FINANCIAL
OFFICER’S REVIEW
We continued to develop the business in 2021 with further
revenue growth both organically and through our 2021
acquisitions. In achieving this growth, we also addressed
major operational hurdles, especially those brought about by
the pandemic, including raw material supply shortages and
disrupted sea freight conditions. The Group revenue grew
by 11% in 2021 (10% on a constant currency basis), 8%
organically and 3% through acquisitions.
The mining industry continued with its robust performance from
2020 into 2021 as the price of precious metals remained high
throughout the year, along with a strong annual average iron ore
price for 2021. Our revenue expansion in the mining industry
was particularly encouraging, with organic growth of 16%.
Our ongoing development with a more direct sales approach
in our European/Middle East and North America regions has
paid dividends with a strong growth in the mining industry
in these regions during the year, particularly in H2 2021.
Revenue in Australasia in H1 2021 was impacted by
COVID-19 restrictions. There was some recovery in H2
2021 across this region as restrictions eased in a number of
the region’s countries. Africa is an important mining region
for the Group, and we developed our operations further
in the region in 2021 on the back of growth in 2020.
Our revenue growth in the construction industry in recent
years has mainly been driven by supply for large geotechnical
projects in North America. Given the nature and size of these
construction projects, the tender process can take time to
complete and therefore impacts on the recording of revenue
year on year. During 2021 there were fewer larger construction
projects in North America, though we have built a strong
pipeline for 2022 and beyond.
We were successful in winning smaller construction projects
in Europe in 2021 and overall, after taking account of our
acquisition of Attakroc, total construction revenue for the
Group grew by 7% in 2021.
The majority of our waterwell/geothermal revenue was earned
in Europe through the sale of our products for geothermal
drilling and casing. We have a mature business in the European
geothermal industry given our dominant market position. We
are focused on new revenue opportunities in new geographical
markets through acquisitions or start-ups to increase revenue
in this industry. During 2021 we had growth of 5% in this
industry and this was all achieved through acquisition.
GROSS MARGIN
Our gross margin for 2021 increased by €3 million compared
to 2020, this increase was achieved in H2 2021. This
increase was achieved in H2 2021 through the additional
capacity commissioned in our factories coupled with less
pandemic related manufacturing interruption. However,
our gross margin as a percentage decreased from 35.2%
in 2020 to 33.8% in 2021. This decrease as a percentage
was due to product mix, additional operational costs
brought about by the on-going pandemic, raw material
price increases and disruption in the freight industry.
OUR THREE MAIN INDUSTRIES ARE MINING, CONSTRUCTION AND WATERWELL/GEOTHERMAL.
2021 SALES MIX
2020 SALES MIX
Mining
53%
Construction
30%
Waterwell/
Geothermal
17%
Mining
51%
Construction
31%
Waterwell/
Geothermal
18%
GROSS MARGIN INCREASE 2021
€3M
Compared to 2020
GROUP REVENUE
UP 11%
On 2020
INCREASE IN MINING
UP 16%
On 2020
We increased the revenue earned in all product categories
in 2021, however the increase was much higher on
products with lower gross margin such as Mincon drill
pipe and non-Mincon products. The change in mix of
Mincon and non-Mincon product sales year on year was
mostly due to the acquisition of Attakroc, this company
sells a much larger proportion of non-Mincon products.
The COVID-19 pandemic had a direct impact on our
manufacturing in January and February 2021. Up to 35% of
our Shannon - based manufacturing employees were absent
due to the pandemic restrictions at the worst point during that
period. This reduced manufactured output volumes from this
plant and lowered the gross margin as fixed overheads do not
reduce accordingly. We also experienced similar pandemic
related issues in our other plants, but to a lesser degree.
We incurred several raw material price increases during
2021, and at much higher percentages than prior years.
We pass on increases in manufacturing input costs to
customers, when it is possible to do so, therefore we
may have to absorb these input costs in our gross margin
for a period during a year. The frequency and level of
raw material price increases during 2021 meant that we
absorbed significantly more in 2021 than prior years.
The challenges experienced in the distribution of our products
also impacted on our gross margin in 2021. We used additional
air freight when sea freight timings were unfavourable. We
also incurred a full year sea freight price increase that was
introduced in 2020. As a result, our overall manufacturing
freight cost increased by 18%. We were also compelled to
purchase local non-Mincon products to fulfil our customer
requirements when Mincon manufactured products were
delayed in delivery due to freight interruptions at seaports,
and this impacted adversely on our gross margin.
OPERATING PROFIT
We expanded the Group operational footprint in the Americas
through the opening of new sales centres as we continued
to develop our direct sales approach in the region. This
increased employee costs and rent, and as a result impacted
our operational profit for the year. As those new sales
centres develop more local business, we expect to achieve
improved returns on this investment in the coming years.
We also expanded our operations with the acquisition of
Attakroc in Canada, Hammer Drill Rigs and Campbell’s Welding
& Fabrication in the USA. These businesses brought in new
products, increased our sales footprint and provided additional
expertise to support our growing product offering. These
businesses increased our costs by 4% in 2021.
Our sales distribution costs increased significantly during the
year, as we increased airfreight when sea freight estimated
delivery times were not viable. Travel and marketing costs
also increased in 2021, as our sales force physically visited
our distribution network and attended trade shows to display
and advertise our current product range and future product
offerings.
20
21
CHIEF FINANCIAL
OFFICER’S REVIEW
CONTINUED
BALANCE SHEET
To ensure that the supply of products to our customers is
on time and is available in the appropriate locations, and to
ensure that our factories have a suitable level of raw material,
we decided to invest further in our inventory during 2021.
However, our inventory in terms of months on hand remained
relatively flat compared with 2020.
The largest investment in inventory was in finished products,
an increase of 18% (including acquisitions and on a constant
currency basis). Our rationale behind the increase in finished
product inventory was:
• Trans-ocean freight transit times doubled in 2021 and;
• We continued to build out or direct sales approach to
increase market share.
The delivery of finished product from our factories to our
customers and Mincon sales centres often encountered sea
freight delays in 2021. We used airfreight to move smaller
volumes of product if sea freight was not a viable option.
Sea freight is the more cost-efficient method of transport for
heavy products and is therefore the preferred option. Mincon
manufactured product in transit increased by 34% due to
trans-ocean sea freight times doubling during 2021.
Our continued direct sales approach, particularly in North
America, required new sales and warehouse locations.
Through these locations we increased our market share and
footprint in North America.
The sourcing of raw material and the lead times on delivery
were key challenges for our factories to overcome in 2021. To
help mitigate those challenges we decided to invest further
in our raw material inventory, which increased our holdings
by 6%, on a constant currency basis, to ensure supply of all
required material types and sizes. A shortage of a particular
raw material could delay the completion of finished product
and hence reduce the timely availability of products to
customers which could endanger future supply contracts.
Our debtors increased by €2.9 million (on a constant currency
basis and excluding acquisitions) during the year. The high
level of turnover achieved during the final months of the year
pushed our debtors days ahead of the prior year end by 8%.
We invested a net €6.8 million in capital equipment into the
business in 2021, through this investment and the prior year
investment we increased the capacity of our manufacturing
plants. The standout investments for 2021 were the
commissioning of a new PVA furnace in our carbide business
in the UK, and a total refurbishment of our factory in Australia.
Our increase in net borrowings in 2021 was €8.4 million. We
invested the majority of this into our factories through capital
expenditure. The remaining borrowing was by way of overdraft
facilities across the Group to fund increased working capital.
We paid out a total of €3 million in 2021 to bring other
businesses into the Group, which is inclusive of 2021
acquisitions, non-business combinations and historical
acquisitions. We also paid dividends of €6.7 million to our
shareholders in 2021.
CONCLUDING COMMENTS
The year presented challenges in increased costs, raw material
shortages and extended freight times due to the pandemic, but
we expect a more normal trading environment as the effects of
the pandemic begins to ease.
Our intention is to invest further in new and improved
manufacturing techniques to increase efficiencies in our
manufacturing processes, as the business continues to grow.
Mark McNamara
Chief Financial Officer
11 March 2022
Our intention is to invest
further in new and improved
manufacturing techniques to
increase efficiencies in our
manufacturing processes, as
the business continues to grow.
22
2323
EME EUROPE &
MIDDLE EAST REGION
AVERAGE
STAFF
NUMBERS
297
NUMBERS OF
CUSTOMER SERVICE
CENTRES IN REGION
02
COUNTRIES
OFFICES
06
Ireland
Finland
Sweden
UK
France
FACTORIES
04
• Factory floor space:
19,862 SQM
• Manufacturing:
DTH Hammers,
RC Hammers, DTH Bits,
Large-Diameter Hammers,
Drill Pipes, Drilling
Accessories, Tungsten
Carbide Buttons
MOST ACTIVE
CUSTOMER
MARKETS
• Construction and Technical
• HDD
• Waterwell
• Production Mining
• Quarrying
24
24
25
25
APAC AUSTRALIA
PACIFIC REGION
AVERAGE
STAFF
NUMBERS
56
COUNTRIES
WITH DIRECT
REPRESENTATION
03
Australia
Papua New Guinea
Indonesia
NUMBERS OF
CUSTOMER SERVICE
CENTRES IN REGION
FACTORIES
MOST ACTIVE
CUSTOMER
MARKETS
03
• Production Mining
• Exploration Mining
• Quarrying
• Construction and
Geotechnical
• Waterwell
01
• Factory floor space:
6,850 SQM
• Manufacturing:
DTH Drill Bits
RC Drill Bits
RC Drill Pipes
Drilling Accessories
26
26
27
27
AMERICAS
REGION
AVERAGE
STAFF
NUMBERS
160
NUMBERS OF
CUSTOMER SERVICE
CENTRES IN REGION
13
COUNTRIES
WITH DIRECT
REPRESENTATION
04
Canada
USA
Peru
Chile
FACTORIES
02
• Factory floor space:
7,900 SQM
• Manufacturing:
DTH Drill Bits
Rotary Drill Bits
MOST ACTIVE
CUSTOMER
MARKETS
• Construction and
Geotechnical
• Waterwell
• Geothermal
• Production Mining
• Exploration Mining
• HDD
• Quarrying
28
28
29
29
AFRICA
REGION
AVERAGE
STAFF
NUMBERS
81
OFFICES
03
Region headquarters:
Las Palmas
Coutry office:
(South Africa, Namibia)
NUMBERS OF
CUSTOMER SERVICE
CENTRES IN REGION
FACTORIES
MOST ACTIVE
CUSTOMER
MARKETS
04
• Production Mining
• Exploration Mining
• Waterwell
01
• Factory floor space:
2,216 SQM
• Manufacturing:
Drill Pipes
Drilling Accessories
30
30
31
31
BOARD OF
DIRECTORS
At 31 December 2021, the Board of Mincon comprised
of four non-executive directors and two executive
directors. Details of the directors are set out below:
NON-EXECUTIVE
DIRECTORS
HUGH MCCULLOUGH
Age 71
Non-Executive Chairman
JOHN DORIS
Age 75
Senior Independent Non-Executive
PATRICK PURCELL
Age 84
Non-Executive Director
PAUL LYNCH
Age 55
Non-Executive Director
Hugh has over 40 years’ experience in gold and
John has broad experience across a number of sectors
base metal exploration, principally in Ireland, Ghana,
including manufacturing, lending and corporate finance. He
Mali and Papua New Guinea. Having previously
worked as a project geologist, in 1982 he became
chief executive of Glencar Mining plc. Hugh was
responsible for the management, financing and
strategy of Glencar for over 27 years until it was
acquired by Gold Fields Limited in September 2009.
Hugh is a geologist and holds an honours degree in
geology from University College Dublin and a degree
has been an independent consultant and a non-executive
director for over twenty years. Prior to becoming an
independent consultant, he was a director of ABN Amro
Corporate Finance (Ireland) Limited where he managed the
successful Riada Business Expansion Funds.
John graduated from University College Dublin with a B.Sc. in
physics in 1969 and returned to University College Dublin to
complete his M.B.A. in 1977. He qualified as an ACCA in 1974
of Barrister-at-Law from the King’s Inns, Dublin.
and is a former president of ACCA Ireland.
Patrick served an apprenticeship in the Irish Air Corps in the
1950s and later qualified as an accountant in Australia in
1961. When he returned to Ireland in 1967 he joined Shannon
Diamond & Carbide Ltd, (later Boart Longyear) and worked
in various capacities with their European Group Companies
for the next 10 years. His roles with Shannon Diamond
& Carbide included that of cost accountant, sales and
marketing director and a period as a general manager of their
manufacturing plant in Norway before becoming their director
for European sales companies and product development.
Patrick set up Mincon in 1977 and developed the Group,
firstly in Ireland and then into overseas areas including
USA, Canada, Australia, South Africa and Sweden. Patrick
remained as executive chairman until 2012 but continued
to work with the company as an adviser on new projects.
Paul currently acts as strategic adviser for a number of
companies having recently served as Chief Financial Officer of
Applegreen plc, a quoted petrol forecourt retailer in the Republic
of Ireland and the United Kingdom, between 2014 and 2017.
Paul qualified as a chartered accountant with Arthur Andersen
in 1990, after which followed a wide-ranging career in corporate
finance and senior management across a number of industry
sectors. He was a director of Heiton Group plc for seven years,
from 2000 to 2007, initially as Head of Corporate Development
and subsequently as Managing Director of its Retail Division.
Paul served as chief executive of large-scale businesses in
the retail, manufacturing, waste management and facility
services sectors and he has led and concluded over 20 M&A
transactions across diverse industries and jurisdictions.
32
32
33
33
BOARD OF
DIRECTORS
KEY
MANAGEMENT
Mincon has a highly experienced team of senior managers that has helped to
drive the development of the Group across its global locations. Brief profiles of
the Mincon senior management team are set out below:
EXECUTIVE
DIRECTORS
COMPANY
SECRETARY
EXECUTIVE
MANAGEMENT
JOSEPH PURCELL
Age 55
Chief Executive Officer
THOMAS PURCELL
Age 50
Regional Executive - Americas
BARRY VAUGHAN
Age 39
Company Secretary
MARK MCNAMARA
Age 41
STEPHEN ATKINSON
Age 60
JUSSI RAUTIAINEN
Age 57
MARTIN VAN GEMERT
Age 57
Chief Financial Officer
Regional Executive - Australasia
Regional Executive - EME
Regional Executive - Africa
Joseph qualified as a mechanical
Thomas Purcell had a background in
Barry qualified as a Certified
engineer in 1988 at University College
accounting prior to emigrating to the USA
Public Accountant in 2009 having
Galway, in Ireland and since then
to work with Mincon on a new joint venture
has worked with Mincon in various
opportunity in the country. He worked
capacities. DTH hammer design has
for the Mincon Group in the dimensional
been his main area of specialisation
stone quarrying industry during which
although he has extensive experience
time he was key in setting up operations
in manufacturing methods, heat-
in Virginia and North Carolina. In 1996,
commenced his finance career
in public practice. He has held
various management roles within
both public practise and industry.
This included four years providing
business partnering and financial
treatment and process development.
Mincon sold its investment in the quarrying
management support to executives
His hammer design work has included
entities to Marlin Group of South Africa.
within an international telco
seven years in Perth, Australia where
He worked in various positions with their
company based in Australia. Having
he developed a successful range of
USA subsidiary from Purchasing and Safety
joined Mincon in August 2017 as
reverse circulation and conventional
Manager of four quarrying companies,
DTH hammers for local and export
to CFO and Operations Manager for
markets. Joseph was appointed as chief
their Atlanta based operation, Stone
Financial Controller of Mincon
International Ltd, Barry currently
oversees the Group’s Financial
technical officer for the Mincon Group
Connection. He re-joined the Mincon Group
Compliance across the regions.
on his return from Australia in 1998. In
in 1999 as President of Mincon, Inc.
May 2015, Joseph was appointed Chief
Executive Officer of Mincon Group plc.
Jussi joined Mincon Group in
January 2017. He was chief
executive officer of Robit
Rocktools Ltd. from 2005 to
January, 2016. Prior to that, he
held international management
positions at Huhtamäki Oyj and
UPM Kymmene Corporation.
Jussi holds a Bachelor of
Economics degree and has
also an Executive Master of
Business Administration degree.
Mark began his finance career
in public practice in 2004 where
he qualified as a Certified
Public Accountant (“CPA”). He
began working with Mincon
as Financial Controller of
Mincon International Ltd. in
March 2010. He moved into
the position as Group Financial
Controller in 2013 prior to the
IPO of Mincon where he was
the lead accountant. Preceding
his finance career Mark
worked in airline operations
and holds a bachelor’s degree
in Information Technology.
Stephen joined Mincon in 2016
after the acquisition of OZmine,
where he was the CEO. He has
over 35 years’ experience in
manufacturing and servicing
the oil, gas and mining sectors.
Stephen has formed many
successful start-up businesses
throughout his career, one
such business began in 1991,
where Stephen together with
his business partner and 700
employees, traded through
their company Oilmin Tools,
a company specialising
in manufacturing drilling
consumables and selling direct
to the end user, Oilmin Tools
had five manufacturing facilities
across Australia, Indonesia and
Singapore securing contracts
with blue chip companies
throughout those regions.
Stephen completed his
Boilermaker First Class Welding
Apprenticeship In 1980.
Martin joined Mincon in 2010,
when he set up the Mincon
West Africa business and
started the Group’s expansion
into Africa. He has more than
three decades of experience in
the construction, geotechnical,
exploration, and mining
industries, in various operational
management capacities with
drilling contractors and drilling
equipment manufacturers. In
2007 he established a country
office for Sandvik in Mali and
was appointed as the country
manager for that business, where
he managed a team of technicians
and sales personnel, as well
as the supply of capital mining
equipment and consumables to
three large gold mines. He has
managed drilling and blasting
operations at major construction
projects and opencast gold mines
across Southern Africa, where his
operational experience includes
operating drilling equipment,
specialised geotechnical,
ground stabilisation, controlled
construction, and opencast mine
blasting techniques.
34
34
35
35
DIRECTORS’
REPORT
The Directors present the directors’ report
and the consolidated financial statements
of Mincon Group plc (“Mincon”) for the year
ended 31 December 2021.
PRINCIPAL ACTIVITIES OF THE GROUP
BUSINESS REVIEW
DIVIDEND
Commentaries on performance in the year ended 31 December
In June 2021, Mincon Group plc paid a final dividend for 2020 of €0.021 (2.10 cent) per ordinary share. In September 2021,
2021, including information on recent events and likely future
Mincon Group plc paid an interim dividend for 2021 of €0.0105 (1.05 cent) per ordinary share.
developments, as reviewed by the Board of Directors are
contained in the Chairman’s Statement (page 6 to 9), Chief
The Directors recommend the payment of a final dividend of €0.0105 (1.05 cent) per share for the year ended 31 December 2021
Executive Officer’s Review (page 10 to 13) and Chief Financial
(31 December 2020: 2.10 cent per share).
Officer’s Review (page 20 to 22). The performance of the
Mincon is an Irish engineering Group, specialising in the
business and its financial position is included in the Chief
DIRECTORS AND SECRETARY
design, manufacture, sales and servicing of rock drilling tools
Financial Officer’s Review.
and associated products. The Group’s manufacturing facilities
are located in Shannon, Ireland, in Sheffield, in the UK, in
The Director’s review KPI’s for Operating Profit, Inventory and
Sunne, Sweden, in Tampere, Finland, in Perth, Australia, in
Debtors throughout the year.
Johannesburg, South Africa, in Benton, Illinois in the USA,
and in North Bay, Ontario in Canada, and recently in January
The principal risks faced by the Group are reflected in the risk
2022 in Fruita, Colorado in the USA through the acquisition of
review section.
Spartan Drill Tools.
Mincon has a clear vision and determined focus giving
priority towards:
• Highest design specifications
• Best manufacturing methods and processes and;
• Delivery of superior products to our customers.
Mincon also maintains a network of sales and distribution
companies in a number of international markets to provide
after-sales support and service to customers. Products,
comprising both Mincon manufactured products and third party
products that are complementary to Mincon’s own products,
are sold directly to the end user or through distributors.
The dates of appointments and resignations of the Company’s directors and secretary are set out in the table below:
DIRECTOR
DATE OF APPOINTMENT
Patrick Purcell
16 August 2013
John Doris
16 February 2017
Hugh McCullough
13 December 2016
Joseph Purcell
23 September 2013
Thomas Purcell
23 September 2013
Paul Lynch
05 December 2019
COMPANY SECRETARY
Barry Vaughan
13 March 2020
36
37
DIRECTORS’
REPORT
CONTINUED
SUBSTANTIAL SHAREHOLDERS
As at close of business on 11 March 2021, in so far as is known to the Company, the following persons are, directly or
indirectly, interested in 3% or more of the issued share capital of the Company:
SHAREHOLDER
Kingbell Company
Setanta Asset Management
Fidelity Investments (Boston)
ORDINARY SHARES AS AT THE
DATE OF THIS DOCUMENT
PERCENTAGE OF ISSUED
ORDINARY SHARE CAPITAL
119,671,200
25,476,384
20,036,326
56.32%
11.99%
9.43%
8.84%
Invest fur Langfristige Investoren
18,773,990
RESEARCH AND DEVELOPMENT
The Group’s strategy around research and development is set
out in the Strategy section of this Annual Report. The Group
invested €3.9 million on research and development in 2021
(2020: €3.7 million), €1.1 million of which has been capitalised
(2020: €1.1 million).
RESEARCH DEVELOPMENT INVESTMENT
€3.9M
2021
None of the Group’s major shareholders, as listed above, have different voting rights attaching to ordinary shares held by them
in the Group. The Purcell family vehicle, Kingbell Company, have certain Board nomination rights for so long as their respective
CORPORATE GOVERNANCE
shareholdings remain above certain thresholds.
A breakdown of the Directors’ and Company Secretarys’ interest in the issued shared capital of the company is detailed in page 46.
FINANCIAL RISK MANAGEMENT
The Group’s operations expose it to financial risks including credit risk, interest rate risk and foreign currency risk. The Group
manages risk in order to reduce the impact of these risks on the performance of the Group and it is the Group’s policy to
manage these risks on a non-speculative manner. The Group does not utilise derivative financial instruments to hedge economic
exposures. Details of the Group’s financial risk management objectives and policies are set out in note 23 to the financial
statements.
COMPLIANCE STATEMENT
The directors acknowledge that they are responsible for securing compliance by Mincon Group plc (the ‘Company’) with its
relevant obligations as are defined in the Companies Act, 2014 (the ‘Relevant Obligations’). The directors further confirm the
Company has put in place appropriate arrangements or structures that are, in the directors’ opinion, designed to secure material
compliance with its relevant obligations including reliance on the advice of persons employed by the company and external
legal and tax advisers as considered appropriate from time to time and that they have reviewed the effectiveness of these
arrangements or structures during the financial year to which this report relates.
POLITICAL CONTRIBUTIONS
The Group and Company did not make any contributions during the year disclosable in accordance with the Electoral Act 1997.
The Board of Mincon is committed to achieving high standards
of corporate governance, integrity and business ethics for all
activities as set out in the Directors’ Statement on Corporate
Governance of this Annual Report.
ACCOUNTING RECORDS
The directors believe that they have complied with the
requirement of Sections 281 to 285 of the Companies Act 2014
with regard to maintaining adequate accounting records by
employing accounting personnel with appropriate expertise
and by providing adequate resources to the financial function.
The accounting records of the company are maintained at the
company’s offices at Smithstown Industrial Estate, Shannon,
Co Clare.
SIGNIFICANT EVENTS SINCE YEAR-END
Details of significant events since year-end are set out in note
29 to the financial statements.
GOING CONCERN
The Directors, having made enquiries, have a reasonable
expectation that the Group and the Company have adequate
resources to continue in operational existence for the
foreseeable future.
The Group availed of the option to enter into overdraft facilities
and to draw down loans of €15.2 million during 2021. Mincon
Group has loans and borrowings totalling €34.5 million as at
31 December 2021, of which €11.2 million is recognised as
current, as detailed in note 18 to the financial statements. The
low level of total debt as a percentage of total assets and the
availability of funds if required gives the directors comfort that
there are minimal Going Concern indicators as at 31
December 2021.
The directors have also taken account of the financial outlook
to 31 March 2023 which included reviewing the Group’s
cash flow forecast. The directors separately considered the
Fair Value less Cost to Sell (FVLCS) impairment assessment
highlighted in note 12 of the financial statements which did
not indicate an impairment issue. This compounded with the
Groups cash forecast review indicates the appropriateness
of the Director’s opinion on adopting the Going Concern
basis of accounting. Mincon Group also has identified a
number of other mitigating factors that can be implemented to
preserve cash and other resources in the event of any decline
in operations. The Directors believe that sufficient financial
resources are available to enable the Group to meet its
liabilities as they fall due for at least 12 months from the date
of approval of the financial statements. For this reason, they
continue to adopt the going concern basis in preparing the
financial statements.
DISCLOSURE OF INFORMATION TO THE AUDITOR
Each of the Directors individually confirm that:
•
in so far as they are aware, there is no relevant audit
information of which the Company’s statutory auditor is
unaware;
• and that they have taken all the steps that they ought to
have taken as a Director in order to make themselves aware
of any relevant audit information and to establish that the
Company’s statutory auditor is aware of such information.
AUDITOR
KPMG, Chartered Accountants continue in office in accordance
with Section 383(2) of the Companies Act 2014.
On behalf of the board
Hugh McCullough
Joseph Purcell
38
39
Mincon Group continues to monitor the COVID-19 global
pandemic and review the procedures that we have in place to
mitigate the effects the global health emergency is having on
our operations.
Chairman
11 March 2022
Chief Executive Officer
40
40
4141
At Mincon, we strive
to be a responsible
global business, which
includes actions to
reduce our impact on
the environment.
STATEMENT OF DIRECTORS
CORPORATE GOVERNANCE
The Board of Mincon is committed to
maintaining the highest standards of
corporate governance. The Group is required
to apply the principles of a recognised
corporate governance code, and the Board
acknowledges the importance of adhering to
this code.
The Board confirm that the Group complies with the principles
and provisions of the QCA Corporate Governance Code,
as issued by the Quoted Companies Alliance in April 2018.
This includes a code of best practice for AIM companies,
comprising principles intended as a minimum standard, and
recommendations for reporting corporate governance matters.
The directors recognise the importance of sound corporate
governance and have taken account of the principles of the
QCA Guidelines, wherever possible and as appropriate to
the size, nature and resources of the Group. It is also our
intention to be as open and transparent about our governance
arrangements as possible and use the annual report to give
details of changes and improvements made during the year.
THE BOARD
The Company is controlled through its Board of Directors.
The Board comprises four non-executive directors and two
executive directors. Biographical details on the Board members
are set out in the section entitled “Board of Directors”. The
Board’s primary roles are to create value for shareholders,
to provide leadership to the Group, to approve the Group’s
strategic objectives and to ensure that the necessary financial
and other resources are made available to the Group to enable
them to meet those objectives.
All of the directors are subject to election by shareholders
at the first Annual General Meeting after their appointment
to the Board and seek re-election at least once every three
years. When a director retires or resigns the Board seat is
filled through the nominations committee of the Board and the
individual is also subject to regulatory approval by the Stock
Exchange, and the support of our Nomad.
The Board is responsible to the shareholders for the proper
management of the Group and the directors hold Board
meetings at least six times per annum and at other times as
and when required to review the operational and financial
performance of the business, and to be updated on strategic,
commercial, product and service matters. All key capital
investment decisions, and acquisitions, new activities and
distribution points are subject to approval by the Board of
Directors.
The Board considers itself to be sufficiently independent. The
QCA Code suggests that a board should have at least two
independent non-executive Directors. One of the four non-
executive directors, Mr. Patrick Purcell, is the company founder
and majority shareholder through a trust. None of the rest of
the Board is a significant shareholder, save through that trust
for certain executive members. The Senior Independent Non-
Executive director is Mr. John Doris, who is also the Chairman
of the Audit Committee.
Non-Executive Directors receive their fees only in the form of
cash emoluments fully taxed in compliance with the income tax
regime of the Irish residence of the Mincon Group plc. Certain
receipted travel expenses are also paid to accommodate the
attendance at Board meetings.
The Board is responsible for formulating, reviewing and
approving the Group’s strategy, budgets and corporate
actions. The Board has delegated responsibility for the day
to day management of the Group to the Group’s executive
management. There are clear divisions of responsibilities
between the roles of the Chairman and Chief Executive Officer.
MANAGING AND COMMUNICATING RISK AND
IMPLEMENTING INTERNAL CONTROL
The Board is responsible for putting in place and communicating
a sound system to manage risk and implementing internal
control.
The Board is responsible for reviewing the effectiveness of the
systems of risk management and internal control. The internal
controls are designed to manage rather than eliminate risk
and provide reasonable but not absolute assurance against
material misstatement or loss. Through the activities of the
Audit Committee, the effectiveness of these internal controls
is reviewed annually, progress is reported on as systems and
procedures are developed, and explanations are requested from
management on such matters as may come or be brought to the
attention of the committee.
The Audit Committee meets with the auditors both separately
and with invited executive management attendance, to
consider such matters as may be reported on formally
and regularly, but also to discuss the business compliance
with, and the development of systems, risk mitigation and
commercial procedures.
The directors have outlined in the Principal Risks and
Uncertainties section the key risks facing the Group and
strategies to manage these risks.
commentators on an individual and collective basis. These
meetings have been carried out by way of online video calls
during the COVID-19 pandemic. It also occurs during any
particular year on an ad hoc basis with the announcements
of key events around contracts, products, and corporate
transactions. We have introduced a specific investor review
document on our corporate website, to update both existing
and prospective shareholders on the Groups business and
performance.
A comprehensive budgeting process is completed once a year
for the coming year, and this sits within an updated rolling
three-year plan. It is reviewed and approved by the Board. The
Group’s results, compared with the budget and the prior year,
together with any foreseen risk and other matters, are reported
in detail to the Board on a monthly basis.
The Group maintains appropriate insurance cover in respect of
actions taken against the directors because of their roles, as
well as against material loss or claims against the Group. The
insured values and type of cover are comprehensively reviewed
on a periodic basis.
We provide further updates as required on acquisitions,
performance of key elements, products and markets as may be
necessary and which may be important to the understanding
of the strategy, the market position, the business, the products
and the team. In addition, though there is no regulatory
requirement for it, the Group has decided to provide detailed
quarterly updates over recent years to provide more timely
insight for stakeholders, and to provide a platform for more
informed decision making and questioning by stakeholders.
Attention is drawn to these announcements on the corporate
website. In addition to this, shareholders are actively
encouraged to visit key sites, meet key people and discuss the
business of the Group.
The compliance, audit, risk and policy matters are reported
to the executive as they occur, are discussed among the
executive and reported on to the Board and to the Chair
together with the actions taken and proposed to respond
appropriately to the matter flagged.
The Company is also a regular presenter at invited investor
events, providing an opportunity for investors to meet with
representatives from the Group in a more informal setting. The
contact numbers for the relevant executives are provided with
company announcements.
CORPORATE COMMUNICATION AND INVESTOR
RELATIONS
NECESSARY UP-TO-DATE EXPERIENCE, SKILLS AND
CAPABILITIES
The Group recognises the importance of shareholder
communications. The Group seeks to maintain a regular
dialogue with both existing and potential new shareholders in
order to communicate the Group’s strategy and progress and
to understand the needs and expectations of shareholders.
Beyond the Annual General Meeting, the Chief Executive
Officer, Chief Financial Officer, and such other key executive
members as may be relevant to the matter, meet regularly
with investors and analysts to provide them with updates on
the Group’s business and to obtain feedback regarding the
market’s expectations of the Group.
The Board considers that all of the Non-Executive Directors
are of sufficient competence and calibre to add strength and
objectivity to its activities, and bring considerable experience
in our industry, and in the general operational and financial
development of our companies. This may be direct experience
of corporate finance and investment and the mining industry in
general from hands on experience.
The Board regularly reviews the composition of the Board to
ensure that it has the necessary breadth and depth of skills to
support the ongoing development of the Group.
This follows on from the half year and full year announcements
of the results for the Group when the Chief Executive Officer,
Chief Financial Officer and certain other key executives travel
to meet existing and prospective shareholders and analysts/
The Chairman, in conjunction with the Company Secretary,
ensures that the directors’ knowledge is kept up to date on key
issues and developments pertaining to the Group, and on its
operational environment and to the directors’ responsibilities as
members of the Board.
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43
STATEMENT OF DIRECTORS
CORPORATE GOVERNANCE
CONTINUED
BOARD EVALUATION
The Board has established an Audit Committee, a
The Board engaged an external party to conduct a
performance review of the Board and its committees in 2021.
The main recommendations arising from the review were
prioritised to be actioned during 2021/2022. The Board will
have another independent review carried out in 2023.
DIRECTORS’ INDEPENDENCE
Remuneration Committee and a Nominations Committee with
formally delegated duties and responsibilities. The Board deals
with matters relating to health and safety and risk through the
Board (as opposed to through a separate committee).
The ultimate responsibility for reviewing and approving the
annual financial statements and interim statements remains
with the Board. The Audit Committee works with the executive
The Board has determined that Hugh McCullough, John Doris
team to obtain such explanations and information as it
and Paul Lynch are independent within the meaning of the
requires, and may, supported by the external auditors, ask that
QCA Guidelines. Patrick Purcell is not considered independent
the executive amend, adjust or provide explanations to the
within the requirements of the QCA Guidelines by virtue of his
Board, through the Board to the Stock Market, on our website,
shareholding in the Company. The two executive directors on
or in the annual or other reports as it may see fit.
the Board are Joseph Purcell and Thomas Purcell.
GOVERNANCE STRUCTURES AND PROCESSES
COMMUNICATION ON HOW THE GROUP IS GOVERNED
The Group places a high priority on regular communications
The Board has overall responsibility for promoting the success
with its various stakeholder groups and aims to ensure that all
of the Group through the management team. The Executive
communications concerning the Group’s activities are clear,
Directors and the executive team have day-to-day responsibility
fair and accurate. The Board communicates on such matters
for the operational management of the Group’s activities.
and on how the Group is governed through the annual report,
The Non-Executive Directors are responsible for bringing
and may also give updates through announcements and
independent and objective judgement to Board decisions.
presentations to shareholders on an individual or Group basis.
There is a clear separation of the roles of Chief Executive
The Group’s website is regularly updated, and users can
Officer and Non-Executive Chairman. The CEO is the chief
register to be alerted when announcements or details of
engineer and is the principal designer of the current range
presentations and events are posted onto the website. The
of products. The Chairman is responsible for overseeing the
Group’s financial reports and notices of General Meetings of
running of the Board, ensuring that no individual or group
the Company can be found on the website.
dominates the Board’s decision-making and that the Non-
Executive Directors are properly briefed on matters. The
The results of voting on all resolutions are posted to the RNS
Chairman has overall responsibility for corporate governance
section of the Group’s website, including any actions to be
matters in the Group.
taken as a result of resolutions for which votes against have
The Chief Executive Officer has the responsibility for
implementing the strategy approved by the Board and
AUDIT COMMITTEE
been received.
managing the day-to-day business activities of the Group. In
addition the CEO has primary responsibility for engagement
with the shareholders and other stakeholder Groups. The
Company Secretary is responsible for ensuring that Board
procedures are followed and that the Group complies with
applicable rules and regulations.
Further details on the duties and activities of the Audit
Committee can be found in the Audit Committee Report on
page 48 to 50.
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45
STATEMENT OF DIRECTORS
CORPORATE GOVERNANCE
CONTINUED
NOMINATION COMMITTEE
Further details on the duties and activities of the Nomination Committee can be found in the Nomination Committee Report on
page 51 to 53.
REMUNERATION COMMITTEE
Further details on the duties and activities of the Remuneration Committee can be found in the Remuneration Committee Report
on page 54 to 56.
Share Ownership and Dealing
Mincon has adopted a share dealing policy that complies with Rule 21 of the AIM Rules and Rule 21 of the Euronext Growth Rules
relating to directors’ dealings as applicable to AIM and Euronext Growth companies respectively. Mincon takes all reasonable
steps to ensure compliance by applicable employees.
Directors’ Remuneration
Details of individual remuneration of directors are set out in the Remuneration Committee Report page 54 to 56.
DIRECTORS’ AND COMPANY SECRETARY’S SHARE INTERESTS
The beneficial interests of the directors and Company Secretary (including those of their spouses and children) who held office at
31 December 2021 in the share capital of the Company was as follows:
NAME
ORDINARY
SHARES HELD
PERCENTAGE OF ISSUED
ORDINARY SHARE CAPITAL
Kingbell Company
119,671,200
Hugh McCullough
46,763
Paul Lynch
35,000
56.32%
0.02%
0.02%
Kingbell Company, is a company controlled by Patrick Purcell and members of the Purcell family (including Joseph Purcell and
Thomas Purcell).
No director or member of a director’s family has a related financial product referenced to the Company’s share capital. There are
no outstanding loans as at 31 December 2021 (2020: €Nil) granted or guarantees provided by any company in the Group to or
for the benefit of any of the directors other than amounts disclosed in note 28 to the financial statements. There have been no
changes in the interests of the other directors and the Company Secretary in the period to 11 March 2022.
Other transactions with the directors are set out in note 28 to the consolidated financial statements.
STAKEHOLDER’S AND SOCIAL RESPONSIBILITIES AND
Mincon Group plc’s energy management policy aims to;
THEIR IMPLICATIONS FOR LONG-TERM SUCCESS
• avoid unnecessary energy costs
The Group understands that a number of different stakeholders
have an interest and are impacted by the activities of the
Group. Amongst those stakeholders are the direct owners
and employees of the Group, investors and dependents, and
our suppliers and customers. There are also the regulatory
authorities in the jurisdictions in which we have activities,
employees and customers, and legal and environmental
frameworks with which our businesses are required to comply.
The Group is aware of its corporate social responsibilities and
the need to maintain effective working relationships across
• monitor overall electricity, gas, oil, process
gases and lubricant oils usage on a regular
basis,
• monitor electricity usage of the significant energy using
equipment,
•
report energy performance indicators (EnPIs) at monthly,
quarterly and annual management review meetings,
•
improve the cost effectiveness of producing a safe,
comfortable working environment and,
• comply with current energy and environmental legislation
and protect the environment by minimising CO2 emissions.
a range of stakeholder Groups. These include the Group’s
You can see further details regarding these planned objectives
employees, partners, suppliers, regulatory authorities and
on page 58 to 61.
the customers involved in the Group’s activities. The Group’s
operations and working methodologies take account of the
CORPORATE CULTURE
need to balance the needs of all of these stakeholder groups
while maintaining focus on the Board’s primary responsibility
to promote the success of the Group for the benefit of its
members as a whole.
The Group endeavours to take account of feedback
received from stakeholders, making amendments to working
arrangements and operational plans where appropriate and
where such amendments are consistent with the Group’s
longer-term strategy.
The Group takes seriously the well-being of its employees
consistent with the guidelines in the various jurisdictions and
industries within which it works.
The Board seeks to maintain the highest standards of integrity
and probity in the conduct of the Group’s operations. These
values are preserved in the written policies and working
practices adopted by all employees in the Group. An
open culture is encouraged within the Group, with regular
communications to staff regarding progress and staff feedback
regularly sought. The Executive Committee regularly monitors
the Group’s cultural environment and seeks to address any
concerns that may arise, escalating these to Board level as
necessary.
The Group seeks to act with fairness towards its stakeholders,
and its competitors, in the conduct of its business, and expects
that this would be reciprocated.
The Group takes due account of any impact that its activities
may have on the environment and seeks to minimise this
impact wherever possible, as detailed on page 58 to 61.
Through the various procedures and systems, that it operates,
the Group works to ensure full compliance with health and
safety and environmental legislation relevant to its activities.
The Group reviews its environmental footprint, across our
manufacturing sites, with goals being set and targets to be
achieved.
The objectives are to reduce our footprint, to reduce the energy
and waste costs of our business, and to achieve a higher rating
for environmental considerations while also reducing the cost
The Group is committed to providing a safe environment for
its staff and all other parties for which the Group has a legal
or moral responsibility in this area. The Executive operates a
Health and Safety Committee in each of the manufacturing
facilities which meets monthly to monitor, review and make
decisions concerning health and safety matters.
The Group’s health and safety policies and procedures are
enshrined in the Group’s documented quality systems, which
encompass all aspects of the Group’s day-to-day operations.
The Board asks for a quarterly report on health and safety
matters encompassing the compliance, audit, risk and policy
development of the Group and the subsidiaries. There were
no significant OHS incidents during the year. The Groups
OHS policy can be viewed on our website at
associated with our production.
https://mincon.com/our-company/health-safety.
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47
AUDIT COMMITTEE
REPORT
As chairman of the Audit Committee,
I am pleased to present the report of the
Committee for the year ended 31 December
2021.This report details how the Audit
Committee has met its responsibilities, as per
the committee’s Terms of Reference, in the
last twelve months.
ROLE OF THE AUDIT COMMITTEE
The role, responsibilities and authorities of the Audit Committee
(‘the Committee’) are clearly communicated in our written
Terms of Reference’ as displayed on our corporate website.
The Committee is responsible for providing oversight and
confidence to the Board regarding the following:
• monitoring the integrity of the Group’s financial statements
•
•
including reviewing significant financial reporting
judgements/estimates and changes in accounting policies
reviewing internal control and risk management systems
reviewing periodically the requirement for an Internal Audit
function and the performance of Internal audit duties in the
absence of such a specific function
• making a recommendation to the Board in relation to the
continued appointment of the External Auditor and the
remuneration of the external auditor
• assess the performance of the External Auditor, including
their independence and objectivity.
MEMBERSHIP
Members are appointed to the Committee by the Board, based
on the recommendations of the Nomination Committee in
consultation with the chairman of the Committee. The Audit
Committee comprises John Doris (chair), Hugh McCullough,
Paul Lynch and Patrick Purcell. The Board is satisfied that the
members of the Committee bring a wide range of skills, expertise
and experience in commercial, financial and audit matters
arising from the senior positions they hold or held in other
organisations. The Board is satisfied that the mix of business and
financial experience enables the Committee to effectively fulfil its
responsibilities. The company secretary or his nominee acts as
the secretary to the Committee and the Committee may obtain,
at the Group’s expense, outside legal or other professional
advice needed to perform its duties. The Committee has
unrestricted access to the Group’s Finance team.
MEETINGS
The Committee meets at least three times a year In line with
the Committee’s Terms of Reference and otherwise as is
required. During 2021, the Committee met on four occasions
and all members were present at these meetings. Meetings
are generally scheduled around the financial reporting cycle
to allow the Committee to carry out its duties in relation to the
financial statements. Meetings are called by the Secretary at
the request of any of the Committee members or at the request
of the Group Auditor. Reports are circulated in advance of
the meetings to allow the Committee access to information
in a sufficiently timely manner. The Committee also regularly
invites the Chief Financial Officer and other members from
the finance function to attend the Committee meetings. The
Auditor (KMPG) is invited to attend some meetings of the
Committee on a regular basis. In general, the Committee
meets in advance of Board meetings and reports to the Board
on the key outcomes from each meeting. The Committee has
unrestricted access to the Group’s Auditor, with whom it meets
at least three times a year. The Committee meets with the
Group Auditor, without Executive Management being present
on an annual basis in order to discuss any issues which may
have arisen during the year.
GOING CONCERN
The Committee considered the use of the going concern
basis of accounting and reviewed the assessment prepared
by management. The Committee was comfortable with the
assessment and has a reasonable expectation that the Group
has adequate resources to continue in operation for the
foreseeable future.
FINANCIAL REPORTING AND SIGNIFICANT
FINANCIAL ISSUES
The Audit Committee considers significant accounting policies,
any changes to them and any significant estimates and
judgements. The Committee also considers the methods used
to account for significant or unusual transactions where the
accounting treatment is open to different approaches. Pending
the Group Auditor’s view, the Committee considered whether
the Group, in its financial statements, has adopted appropriate
accounting policies and, where necessary, made appropriate
estimates and judgements.
The Audit Committee also reviewed the transparency and
integrity of disclosures in the financial statements. The
Committee reviewed in detail the areas of significant judgement
in respect of the financial statements for the year ended 31
December 2021. The Committee also had detailed discussions
on these matters with senior management. In this regard the
Committee considered a report from the Group Auditor on its
work undertaken and conclusions reached. A summary of this
report is included in the Audit Report set out on pages 64 to 68.
The Committee receives and reviews the Group’s risk register.
As the Group continues to grow, there is particular focus
on ensuring that any changes to the Group’s risk profile are
matched by appropriate mitigating factors. The Group’s
principal risks and uncertainties are outlined on pages 15 to 19.
The Committee also engages regularly with both the Group
Finance Team and the Group Auditor to ensure that appropriate
measures are taken to address risks as they are identified or as
their risk profile changes.
The Committee continues to encourage the development
of policies, procedures, management systems and internal
controls that are designed to enhance the existing risk
management framework.
INTERNAL AUDIT
The Committee revisited the need for an Internal audit function
during the year through engagement with the ‘Groups’ Finance
Team and the Senior Management team. The Committee
reviewed a summary report on the findings from the subsidiary
compliance reviews completed to date. The Committee
approved the continuation of these compliance reviews using
the existing resources available to the Group Finance Team,
by way of performing tests of control, tests on adherence to
company policies and business risk reviews at subsidiary level.
GOODWILL IMPAIRMENT ASSESSMENT
The Committee considered the goodwill impairment
assessment carried out by management, in accordance with
the requirements of IAS 36 ‘Impairment of assets’ as set out in
note 12 of the financial statements.
In performing their impairment assessment management
determined the recoverable amount of the Cash Generating
Unit (‘’CGU”) and compared this to the carrying value at
the date of testing. The recoverable amount of the CGU is
determined based on fair value less cost to sell calculation.
The Committee considered and discussed with management
and KPMG, the key assumptions to understand their impact on
the CGU’s recoverable amount.
The Committee was satisfied that the methodology used by
management and the results of the assessment, together with
the disclosures were appropriate.
RISK MANAGEMENT AND INTERNAL CONTROL
The Board has a responsibility for maintaining effective
systems in relation to risk management and internal control.
On behalf of the Board, the Audit Committee has a role in the
continued development of a risk awareness culture by driving
the integration of risk and strategy, and behaviours and beliefs
at all levels of the organisation.
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49
AUDIT COMMITTEE
REPORT
CONTINUED
NOMINATION COMMITTEE
REPORT
EXTERNAL AUDITORS
The Committee has an important role in supporting the Board
discharge its duties by providing independent oversight over
Group audit.
Independence and Provision of Non-Audit Services
The Committee is responsible for ensuring that the Group
Auditor is objective and independent. KPMG has been the
Group’s Auditor since 2013. KPMG as Group Auditor is
prevented from engaging in certain non-audit services that
would compromise its independence, violate any laws and
regulations, and affect its appointment as Auditor.
The Committee performed a review of the audit and non-audit
services provided by the External Auditor and the fees charged
for those services in respect of the year ending 31 December
2021. Following this review and the confirmation in writing
received from the Group’s Auditor reaffirming its independence
and objectivity, the Committee is satisfied as to KPMG’s
independence and objectivity.
Effectiveness
The Committee assessed the Auditor’s performance at our
December 2021 meeting when the audit plan for the year
ended 31 December 2021 was presented. The Committee
discussed the significant audit risks and key audit matters,
audit scope and materiality amongst other matters. The
Committee reviewed and appropriately challenged the Auditor
before agreeing the proposed audit scope and approach.
KPMG presented an interim finding report in August 2021 and
presented a final detailed report of their audit findings to the
Committee at our meeting in March 2022. These findings were
reviewed and appropriately challenged by the Committee. In
determining the appropriateness of the Auditor, the Committee
had full regard to the Auditor’s competence, the quality and
efficiency of the audit, and whether the audit fee is appropriate
in relation to size, complexity, and risk and control profile of the
Group. On reviewing all of the above factors, the Committee
continues to be satisfied with the performance of KPMG and
has informed the Board accordingly.
On behalf of the Audit Committee
John Doris
Chairman of the Audit Committee
11 March 2022
On behalf of the Nomination Committee and
the Board, I am delighted to present the
report of the Committee for the year ended
31 December 2021.This report details the
Nomination Committee’s responsibilities and
how the Committee discharged these duties
in 2021.
ROLE OF THE NOMINATION COMMITTEE
The duties, responsibilities and authorities of the Nomination
Committee are clearly communicated in our written Terms of
Reference as displayed on our corporate website.
These include, but are not limited to, the following:
MEETINGS
The Committee meets at least twice a year In line with the
Committee’s Terms of Reference and otherwise as is required.
During 2021, the Committee met on four occasions and all
members were present at these meetings. The matters dealt
with by the Committee during 2021 included the following:
Boardroom Diversity and search for a new
non-executive director
The Committee agreed to recruit another independent non-
executive board member. The candidate would ideally be
non-Irish and female, satisfying both gender and geographical
diversity criteria. They should also have experience and
knowledge of the renewable energy sector as the Committee
agreed that this sector was one which was likely to be a
•
reviewing the structure, size and composition of the
significant growth market for the Group in coming years. The
Board compared to its current position and make
Committee obtained the services of a recruitment firm to locate
recommendations to the Board with regard to any changes
a suitable candidate and are in the process of finalising a visit
•
identifying and nominating candidates for approval by the
to Group headquarters in Shannon for their preferred candidate
Board to fill Board vacancies, considering candidates on
once the Covid-19 situation permits.
merit and against objective criteria and with due regard to
the benefits of diversity on the Board, including gender,
Board Performance Evaluation
taking care that appointees have enough time available to
The Board engaged an external party to conduct a
devote to the position
performance review of the Board and its committees in 2021.
• considering succession planning for the directors and
The main recommendations arising from the review were
senior executives in the course of its work, accounting for
prioritised to be actioned during 2021/2022. The Board will
the challenges and opportunities facing the Group, and the
have another independent review carried out in 2023.
skills and expertise needed on the Board and by the Group
in the future
Proposed ESG Reporting
• evaluating the balance of skills, knowledge, experience, and
The Committee discussed the Groups ESG performance as
diversity on the Board
disclosed in our latest annual report. The Committee informed
• carry out a biennial performance evaluation of the board, its
management that ESG reporting in the annual report could
Committees, and individual directors.
MEMBERSHIP
Members, including the Chairman, are appointed to the
Committee by the Board. The Nomination Committee
comprises Hugh McCullough (Chair), John Doris and Patrick
Purcell. The Board is satisfied that the members of the
Committee are Independent. The biographical details of each
member are set out on page 32 to 34. Only members of the
Committee have the right to attend Committee meetings,
however, the Chief Executive Officer and external advisers may
be strengthened and improved upon. As a result it’s the
Group’s intention to complete a detailed review of our ESG
performance with recommendations for improvement in the
first half of 2022, and thus will be detailed in the 2022 annual
report.
Review of Term Limits for Non-Executive directors
The Committee discussed proposed term limits for non-
executive directors, and it was agreed that a normal term of 7
years followed by an additional potential term of up to 3 years
with Board approval should be the appropriate limits. The
be invited to attend, as and when appropriate. The Company
Board approved this proposal from the Committee.
Secretary or his nominee acts as the Secretary
to the Committee.
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51
NOMINATION COMMITTEE
REPORT
CONTINUED
BOARD COMMITTEES AND DURATION OF TENURE
The appointment dates, of the Directors, on the three Board Committees as at 31 December 2021
can be seen below.
NOMINATION COMMITTEE
Hugh McCullough (Chair)
Appointed 2018
Independent
Patrick Purcell
Appointed 2013
John Doris
Appointed 2020
Independent
AUDIT COMMITTEE
John Doris (Chair)
Appointed 2018
Independent
Hugh McCullough
Appointed 2016
Independent
Paul Lynch
Appointed 2019
Independent
Patrick Purcell
Appointed 2013
REMUNERATION COMMITTEE
Paul Lynch (Chair)
Appointed 2020
Independent
Patrick Purcell
Appointed 2013
John Doris
Appointed 2017
Independent
On behalf of the Nomination Committee
Hugh McCullough
Chairman of the Nomination Committee
11 March 2022
52
53
53
REMUNERATION
COMMITTEE REPORT
On behalf of the Remuneration Committee and
the Board, I am pleased to present the report of
the Committee for the year ended 31 December
2021.This report details the Remuneration
Committees responsibilities and how the
Committee discharged these duties in 2021.
RESPONSIBILITIES OF THE REMUNERATION COMMITTEE
The role, responsibilities and authorities of the Remuneration
Committee are clearly communicated in the Committee’s Terms
of Reference’ as displayed on our corporate website.
The primary duties include the following:
• ensuring that remuneration policy and practise is aligned to
the Groups values and is clearly linked to the delivery of the
Groups long term goals
The Committee’s overall remuneration philosophy is to ensure
Executive Directors and Senior Executives of the Group
are incentivised to implement the board’s strategy and that
remuneration is aligned with the interests of shareholders and
•
in arriving at this policy ensuring all factors such as relevant
other stakeholders over the longer term.
legal and regulatory requirements are followed, these
factors should include the suggestions and provisions in the
MEETINGS
Quoted Companies Alliance Corporate Governance Code
for Small and Mid-Size Quoted Companies
The Committee meets at least three times a year In line with the
Committee’s Terms of Reference and otherwise as is required.
• establish and agree with the board the framework for
During 2021, the committee met on three occasions and all
the remuneration of the Chief Executive Officer and the
members were present at these meetings. The matters dealt
Chief Financial Officer. The Committee can recommend
with by the Committee during 2021 included the following:
and monitor the level and structure of remuneration for
other senior executives as determined by the board. The
Remuneration structure
Committee Chairman, together with a Committee of the
The Committee had reviewed the remuneration for the Senior
executive directors, shall make recommendations to the
Executive team and determined that it should continue to
Board in relation to the remuneration of non-executive
incorporate a mix of salary, benefits along with participation
directors that will be within the limits set by shareholders.
in a short-term bonus scheme and the Long-Term Incentive
Programme (LTIP).
• determine the total individual remuneration package of
the Chief Executive Officer, the Chief Financial Officer,
and other senior executives, including bonuses, incentive
payments and share options or other share awards
• direct and approve targets for performance related pay
schemes to be implemented by the Group and approve the
total annual payments under such schemes.
MEMBERSHIP
Members, including the Chairman, are appointed to the
Committee by the Board on the recommendation of the
Nomination Committee. At least two members of the
Committee shall be independent non-executive directors of
Bonus scheme for senior management
The CEO presented to the Committee a proposal to award
The Committee agreed a short-term incentive program
Options to subscribe for 2,060,000 Ordinary Shares to 50
for the 2021 financial year, in line with the 2020 scheme,
employees. The Committee recommended the approval
through which the senior management team could earn up
of these awards to the Board. On the 20h April the Board
to 50% of their salary based on:
the Group. The Remuneration Committee comprises Paul
• The achievement of budgeted profit after tax for the year
Lynch (chair), John Doris and Patrick Purcell. Only members of
(up to 40% of salary)
the Committee have the right to attend Committee meetings,
• The delivery of targeted number of weeks’ inventory being
however other individuals including external advisers may be
carried at the end of the year (up to 7.5% of salary)
invited to attend, as and when appropriate. The Company
• The delivery of a targeted number of debtors days (up to
Secretary acts as the secretary to the Committee.
2.5% of salary)
approved the award of 2,060,000 options to 50 employees.
According to the rules of the 2013 Plan the exercise price
is deemed to be the closing market price on day before the
award. The Exercise price for the options awarded on the 20th
of April was therefore determined to be €1.35.
PERFORMANCE OUTCOME AND REMUNERATION FOR
2021
OUR APPROACH TO REMUNERATION
Vesting of 2018 share awards
The Group’s performance for 2021 was very good, particularly
The Committee considered whether the vesting conditions
in light of the difficulties associated with the COVID-19
associated with the 2018 Share awards were met by reviewing
pandemic.
calculations prepared by management on the reported earnings
for the previous three years. The Committee determined that
the criterion for the vesting of 797,390 shares was met and
accordingly recommended that the Board approve the issue of
a corresponding number of shares.
Issuing of Awards under The 2013 Long Term Incentive Plan
(‘the 2013 Plan’)
The Committee considered a range of alternative awards that
could be issued under the 2013 Long Term Incentive Plan.
It recommended that they should take the form of options
to purchase ordinary shares in the Company which would
vest in three years from the date of grant on meeting the
following conditions:
• The employee receiving the award remains in the Group’s
employment at the conclusion of the vesting period unless
the Remuneration Committee agrees otherwise
• The compound annual growth rate in the EPS (as defined
in the rules of the 2013 Plan) of Mincon Group PLC for the
three years ending 31 December 2023 would be equal to or
in excess of 5% plus the average CPI over the same period
•
the options will lapse 7 years after the award date
The Remuneration Committee noted that this proposal was in
line with the rules and parameters laid out in the 2013 Plan. The
Committee and Board approved the adoption of this proposal.
54
55
REMUNERATION
COMMITTEE REPORT
CONTINUED
STATEMENT OF
DIRECTORS’
RESPONSIBILITIES
DIRECTORS’ REMUNERATION
Details of individual remuneration of directors are set out in the table below:
31 DECEMBER 2021
31 DECEMBER 2020
NAME
SALARY
BONUS
FEES
PENSION
TOTAL
SALARY
BONUS
FEES
PENSION
TOTAL
€’000
€’000
€’000
€’000
€’000
€’000
€’000
€’000
€’000
€’000
Non-Executive Chairman
Hugh McCullough
Non-Executive Director
Patrick Purcell
Non-Executive Director
John Doris
Non-Executive Director
Paul Lynch
-
-
-
-
-
-
-
-
Chief Executive Officer
Joseph Purcell
200
64
194
64
Regional Executive-
Americas
Thomas Purcell
Total executive
and non-executive
remuneration
60
55
55
50
-
-
-
-
-
-
60
55
55
50
-
-
-
-
-
-
-
-
29
293
200
85
26
284
204
85
60
-
55
50
-
-
-
-
-
-
60
-
55
50
29
314
27
316
394
128
220
55
797
404
170
165
56
795
Evaluation of the Remuneration Committee
The performance of the Committee is evaluated by the Nomination Committee as detailed in the terms of reference (7.1.11) of the
Nomination Committee as displayed our corporate website.
On behalf of the Remuneration Committee
Paul Lynch
Chairman of the Remuneration Committee
11 March 2022
Statement Of Directors’ Responsibilities In
Respect Of The Annual Report And The
Financial Statements
The directors are responsible for keeping adequate accounting
records which disclose with reasonable accuracy at any time
the assets, liabilities, financial position of the Group and Parent
Company and the profit and loss of the Group and which
enable them to ensure that the financial statements comply
The directors are responsible for preparing the annual report
with the provision of the Companies Act 2014. The directors
and the Group and Parent Company financial statements in
are also responsible for taking all reasonable steps to ensure
accordance with applicable law and regulations.
such records are kept by its subsidiaries which enable them
to ensure that the financial statements of the Group comply
Company law requires the directors to prepare Group and
with the provisions of the Companies Act 2014. They are
Parent Company financial statements for each financial year.
responsible for such internal controls as they determine is
As required by the AIM Rules, they are required to prepare
necessary to enable the preparation of financial statements
the Group financial statements in accordance with IFRS as
that are free from material misstatement, whether due to fraud
adopted by the EU. The directors have elected to prepare
or error, and have a general responsible for safeguarding the
the Group financial statements in accordance with IFRS as
assets of the Company and the Group, and hence for taking
adopted by the European Union (“EU”) and as applied in
reasonable steps for the prevention and detection of fraud
accordance with the Companies Act 2014. The Directors have
and other irregularities. The directors are also responsible
elected to prepare the parent Company financial statements in
for preparing a directors’ report that complies with the
accordance with FRS 101 Reduced Disclosure Framework as
requirements of the Companies Act 2014.
applied in accordance with the provisions of the Companies
Act 2014.
The directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Under company law the directors must not approve the
Company’s website. Legislation in the Republic of Ireland
Group and Parent Company financial statements unless they
governing the preparation and dissemination of financial
are satisfied that they give a true and fair view of the assets,
statements may differ from legislation in other jurisdictions.
liabilities and financial position of the Group and Parent
Company and of the Group’s profit or loss for that year.
On behalf of the Board
Hugh McCullough
Joseph Purcell
Director
11 March 2022
Director
In preparing each of the Group and Parent Company
financial statements, the directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable and
prudent;
• state whether applicable Accounting Standards have been
followed, subject to any material departures disclosed and
explained in the financial statements;
• assess the Group and Parent Company’s ability to continue
as a going concern, disclosing, as applicable, matters
related to going concern; and
• use the going concern basis of accounting unless they
either intend to liquidate the Group or Parent Company or
to cease operations, or have no realistic alternative but to
do so.
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57
The CDP will help identify trends and areas where investments
WASTE MANAGEMENT
HUMAN RIGHTS POLICY
CORPORATE
RESPONSIBITIES
Mincon has a vision to build a sustainable,
long-term business. Included in this is a
responsibility to take the necessary steps
for reducing our carbon footprint by through
environmentally-friendly practices and
advancements in the products that we
develop and manufacture.
The process of rock drilling is extremely energy-intensive and
Mincon meets this challenge by designing and manufacturing
highly efficient rock-drilling solutions to make the most of
the planet’s limited natural resources. Mincon’s rock-drilling
solutions offer ongoing savings for fuel and energy, rather than
single, one-time savings. Additionally, Mincon’s solutions are
increasingly being used for the installation of environmentally
friendly geothermal energy systems. This emphasis on
efficiency and sustainability will also give Mincon a business
advantage as our customers start favouring suppliers that can
help reduce their own carbon emissions.
In our own business practices Mincon’s environmental
policy comprises three pillars: energy management, waste
management, and sustainable practices.
ENERGY MANAGEMENT
can be made to allow a more efficient use of energy.
Successful measures and technologies will be shared with
other businesses in the Group for implementation, where
possible, to reach the Group-wide goal of reducing emissions
and energy consumption.
Potential solutions for energy optimisation are continuously
being evaluated by Mincon facilities, in conjunction with
independent suppliers. Solutions under consideration include
heat-treatment equipment that will help reduce reliance on
natural gas as a fuel source, which will bring a commensurate
reduction in carbon dioxide emissions. In areas where it is
feasible, heat reclamation technologies are being considered
to harvest wasted energy from the heat-treatment process
and use it for heating water in facilities. Investigations are
also underway to determine the possibility of installing solar
panels at sites that have the available space, thus reducing
the reliance on a grid that may use fossil fuels for electricity
generation.
Solutions and innovations that yield positive results will
be shared with all businesses in the Group to encourage
investment that will lead to lower emissions and ongoing
savings in the future. This will be done in conjunction with
guidelines for ISO certification and environmental legislation
that applies in each country where Mincon has a local
Mincon is committed to responsible energy management and
presence.
the Group practices energy-efficient thinking throughout the
enterprise. This includes the use of reliable sources of energy
As with Mincon’s product engineering, our energy consumption
and water to sustain our activities, with the aim to procure and
efforts will be subject to an ethos of continuous improvement,
manage these supplies in the most cost-effective manner.
with the eventual goal of achieving a carbon-neutral status. The
Mincon’s energy management policy includes a Carbon
long-term savings for the Group, and a reputation as a
Disclosure Project (CDP) – an EU initiative for businesses to
responsible business with a mindset for sustainability.
value of these investments will be realised through ongoing,
declare their energy usage and associated carbon dioxide
emissions. As part of this, Mincon has implemented, and
continues to implement, solutions for measuring and
monitoring all forms of energy usage – gas, oil, diesel, petrol,
and electricity – and reporting these performance indicators
at regular intervals. The outcome of this is to reduce carbon
dioxide emissions, comply with environmental legislation, and
improve cost-effectiveness.
Mincon’s factories actively reclaim and recycle waste material
generated during manufacturing. Additionally, our global
network of service centres have procedures for recycling or
safely disposing of waste. Recycled materials include, but
are not limited to scrap metal, swarf, offcuts, lubricating oils,
cutting fluids, and solid oily waste. Recycling and collection is
Mincon’s Board of Directors, CEO, and
Senior Management teams are committed to
ensuring all Mincon businesses respect human
rights throughout their operations.
done in conjunction with certified local recyclers and waste-
Mincon’s human rights policy is modelled on the UN guiding
management experts.
principles for business and human rights. We provide all the
basic needs to our employees as set out in these guidelines.
Wood, cardboard, and office wastepaper are also recycled.
Additionally, Mincon’s commitment to human rights extends
Efforts have been made to reduce single-use packaging.
to dealings with suppliers, who are critical to the success of
In instances where Mincon products are shipped in crates,
the business. Mincon endeavours to ensure that products and
the wood is recycled or provided to local communities to be
services provided by suppliers are ethically sourced and do
repurposed.
not breach human rights laws in the countries in which they
originate. This will be achieved through intense scrutiny of the
Electronic waste, including unused computers, printers,
ethical and moral values of potential new suppliers.
batteries, and consumables, are also recycled in conjunction
with local recyclers or council-provided facilities (in the case of
We are committed to operating our businesses in compliance
jurisdictions where disposal fees are included in taxes or the
with all applicable laws, to respect human rights and to
conduct business in an honest, open, and ethical manner. We
expect employees to comply with all relevant laws relating to
human rights wherever we operate, and to abide by Mincon’s
human rights policy. Trust and respect in all business dealings
are core values that the Group upholds.
Mincon’s regional and country managers have been
entrusted to respect the local communities and to abide by
the company’s values. Each manager will ensure that their
business, and by extension, Mincon, is not in breach of local
or national regulations and laws. Those employees found to be
in breach of these regulations and laws will face disciplinary
action, while corrective measures will be implemented.
purchase price).
SUSTAINABLE PRACTICES
Mincon educates employees about the importance of the
planet’s limited resources, to foster a culture of sustainability
and environmentally friendly practices. Employees are
encouraged to be vigilant about the environment and are given
opportunities to present improvements that can be made for
the benefit of the business or local communities.
The result of this is seen at Mincon offices around the world,
where consideration is given to using low-energy lighting and
appliances; plants that require less water in arid climates;
participation in recycling initiatives; the use of environmentally
friendly alternatives; products that have less single-use
plastics; and consumption of food and/or drinks that result in
compostable organic waste.
Where possible, products are manufactured as close as
possible to customer operations, thus reducing or avoiding
carbon emissions for the transport of those products. The
Group strives to partner with suppliers that share our values
when it comes to sustainable practices, and this includes
working with low-carbon logistics providers.
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59
CORPORATE
RESPONSIBITIES
CONTINUED
EMPLOYEES
Mincon realises the value of honest and
trustworthy employees. Creating a safe
and positive work environment for our
employees is a high priority across the
Mincon Group. Employees are treated with
dignity and respect. The resulting employee
morale and work ethic is evident in the
important business metrics that we use
to report on the success of the Group.
We are committed to developing the skills of our employees.
Many of our manufacturing facilities engage in co-operative
learning programs with universities and colleges. Mincon
invests time and finances in developing undergraduates and
postgraduates, benefiting both the participants and the Group.
As the Group grows, we strive to communicate efficiently
with our employees across the Group. A quarterly company
newsletter is published to update employees on different
aspects of the business.
During the COVID-19 pandemic, the Group took extraordinary
measures to provide a safe and healthy workplace for
employees. Investments were made in sanitation, procedures,
and technologies to lower the risk of virus transmission in the
workplace. Business continuity processes were developed and
rolled out at certain offices to mitigate health risks and ensure
ongoing operations.
Additionally, Mincon accommodated the requirements of
employees considered to be high-risk, as well as those who
were unable to perform their duties due to restrictions imposed
by health authorities. Investments have also been made to
accommodate work-from-home arrangements for office
employees during the pandemic, reducing footfall and lowering
risk for essential staff.
Consideration will be given to a formal remote-working policy
that extends beyond the pandemic. Mincon Group strives to
be a progressive employer that is willing to embrace change
and use technology that enables the workforce regardless of
physical location.
Mincon is committed to complying with all labour laws in the
countries that it operates.
Policies have been developed to include:
Induction programs for new employees
•
• Working conditions
• Hours of work & overtime
• Breaks and rest periods
• Health and safety policies
• Accident reporting & first aid
• Use of personal protective equipment
• Smoke-free workplace
• Alcohol and drug free workplaces
We are committed to equality of opportunity for existing
and potential employees and to creating a workplace
which provides for:
• Equal opportunities for all staff and potential staff and
where their dignity is protected and respected at all times.
• All persons regardless of gender, civil status, family status,
race, religious beliefs, sexual orientation, disability, age, or
ethnic minorities will be provided with equality of access to
employment. All persons will be encouraged and assisted
to achieve their full potential. We will continue with a culture
of equality right through our businesses.
We aim to ensure that no job applicant or employee receives
less favourable treatment on any grounds which cannot be
shown to be justified. This applies to recruitment and selection,
training, promotion, pay and employee benefits, employee
grievances, discipline procedures and all terms and conditions
of employment.
We select those suitable for employment solely based
on merit. Any job advertisements, application forms and
publicity material will encourage applications from all suitable
candidates and will not discriminate against any group or
individual on any unjustifiable grounds. The objective is to
ensure that all candidates have equality of access to all job
vacancies.
We place considerable emphasis on Health and Safety matters.
We undertake our business in a manner that will ensure the
safety, health, and welfare of all our employees, visitors, and
the public. This commitment is in accordance with applicable
Environmental Health and Safety legislation.
We are committed to providing a safe and secure working
environment that is free from all forms of harassment and
bullying. We have set a standard for all members of staff to be
treated with the utmost levels of dignity and respect. Mincon
is committed to the implementation of all necessary measures
required to protect the dignity of employees and to encourage
respect in the workplace. We achieve this by implementing
effective procedures to deal with any complaints of such
conduct as it may arise.
CORRUPTION AND BRIBERY ISSUES
We are committed to continuously operating
our business with integrity and being
accountable for our actions. We maintain a
strict stance against bribery and corruption
across all our businesses. Our internal
control structures are designed to mitigate
reputational risk and to assist in preventing
any potential corruption and bribery. We
consistently review and assess the robustness
of our internal controls to further strengthen
our business.
Corruption is dishonest and illegal behaviour by those in a
position of trust in order to gain an undue advantage. The risks
of corruption are not always obvious, therefore we inform our
employees how corruption and bribery may occur through our
corruption and bribery policy.
Corruption and bribery issues are the responsibility of our
Executive Management team. Once a claim is made, the
Executive Management team will respond to the allegation
within a reasonable length of time and an investigation will
begin. Such an investigation may include internal reviews or
reviews by external lawyers, accountants or an appropriate
external body. If the claim of malpractice or misconduct is
substantiated, appropriate disciplinary action will be taken
against the responsible individuals.
Our whistleblowing policy exists to enable all staff across our
Group to feel confident that they can expose wrongdoing
without any risk to themselves. Mincon will not tolerate
malpractice and attaches extreme importance to identifying
and remedying any issues in relation to corruption or bribery.
CORPORATE ENVIRONMENTAL RESPONSIBILITY
At Mincon, we strive to be a responsible global business, which
includes actions to reduce our impact on the environment.
Our Group goal is to achieve net zero emissions by 2040
– one decade ahead of the 2050 deadline for EU member
states to achieve carbon neutrality.
Energy efficiency is the core focus of our engineering
efforts. As such, we’re also motivated to reduce the energy
requirements – and related emissions – associated with
the manufacturing of our products. Our engineering ethos
complements our environmental approach, and as such
our efficiently manufactured drilling solutions will continue
delivering energy savings when in our customers’ hands.
Our corporate environmental responsibility goals will be
achieved by implementing guidelines set out in the Greenhouse
Gas (GHG) protocol – a groupwide effort that will span all areas
of our operations.
For our full environmental statement, emissions reduction plan,
and related updates, please visit:
corporate.mincon.com/esg/environmental
CORPORATE SOCIAL RESPONSIBILITY
Mincon has always been an active member of the communities
in which it which it does business.
Originally founded in 1977, as a family-run business, our core
values today continue to build on that heritage. This includes:
• Creating opportunities for those in need
• Making a positive impact on society
• Leaving a better world for the next generation
In addition to the Group-funded CSR activities, all Mincon
businesses participate in programmes that benefit their local
communities, such as;
• Equality: We are removing social obstacles for young girls
to attend school in developing communities
• Water: We will be providing essential needs for schools
such as clean water
• Education: We will be providing internet access for rural
schools
• Community: We have been working with charities to give
back to local communities around the world
• Environment: Offering waste-management systems and
education and schools.
For our full CSR statement, social programmes, and updates,
please visit: corporate.mincon.com/esg/social-responsibility.
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61
GROUP
FINANCIAL
STATEMENTS
FINANCIAL STATEMENTS
Independent Auditor’s Report
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
Notes to the Consolidated Financial Statements
SEPARATE FINANCIAL STATEMENTS
OF THE COMPANY
Company Statement of Financial Position
Company Statement of Cash Flows
Company Statement of Changes in Equity
Notes to the Company Financial Statements
64
69
70
71
72
73
74
114
115
116
117
62
6262
63
63
INDEPENDENT AUDITOR’S
REPORT
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MINCON GROUP PLC
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
Report on the audit of the financial statements
Opinion
We have audited the financial statements of Mincon Group plc (‘the Company’) and its consolidated undertakings (‘the Group’)
for the year ended 31 December 2021 set out on pages 69 to 113, which comprise the Consolidated Income Statement, the
Consolidated Statement of Comprehensive Income, the Consolidated and Company Statements of Financial Position, the
Consolidated and Company changes in Equity, the Consolidated Statement of Cash flows, and related notes, including the
summary of significant accounting policies set out in note 3. The financial reporting framework that has been applied in their
preparation is Irish Law and International Financial Reporting Standards (IFRS) as adopted by the European Union.
In our opinion:
• The financial statements give a true and fair view of the assets, liabilities and financial position of the Group and Company
as at 31 December 2021 and of the Group’s profit for the year then ended;
• The Group financial statements have been properly prepared in accordance with IFRS as adopted by the European Union;
• The Company financial statements have been properly prepared in accordance with IFRS as adopted by the European
Union, as applied in accordance with the provisions of the Companies Act 2014; and
• The Group and Company financial statements have been properly prepared in accordance with the requirements of the
Companies Act 2014.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (Ireland) (ISAs (Ireland)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the audit of the financial
statements section of our report. We have fulfilled our ethical responsibilities under, and we remained independent of the Group
in accordance with ethical requirements that are relevant to our audit of financial statements in Ireland, including the Ethical
Standard issued by the Irish Auditing and Accounting Supervisory Authority (IAASA), as applied to listed entities.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director’s use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. The directors have concluded there are no material uncertainties that
may cast significant doubt over the Company’s ability to continue as a going concern for at least twelve months from the date of
approval of the financial statements (“the going concern period”). Our evaluation of the director’s assessment of the Company’s
ability to continue to adopt the going concern basis of accounting included using our knowledge of the Company, its industry,
and the general economic environment to identify the inherent risks to its business model and analysed how those risks might
affect the Company’s financial resources or ability to continue operations over the going concern period.
We considered whether the going concern disclosure in the Directors’ report on page 39 and note 1 of the financial statements
gives a full and accurate description of the Directors’ assessment of going concern, including the identified risks and
dependencies.
We also considered less predictable but realistic second order impacts that could affect demand in the Company’s markets
such as the prolonged impact of the COVID-19 pandemic on the Group’s results and operations, from risks related to
interruptions in raw materials supply, interruptions in end user markets through work stoppages and shipping difficulties.
individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a period of at
least twelve months from the date when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections
of this report.
Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the financial
Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the financial
statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified
by us, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit;
and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
In arriving at our audit opinion above, the key audit matters, in decreasing order of audit significance, were as follows
(unchanged from 2020):
Revenue recognition: Cut-off (2021: €144.3 million; 2020: €129.9 million)
Refer to pages 75 to 76 (accounting policy) and page 83 (financial disclosures)
THE KEY AUDIT MATTER
HOW THE MATTER WAS ADDRESSED IN OUR AUDIT
Revenue of €144.3 million was recognised for the year
ended 31 December 2021 (2020: €129.9 million).
There is a risk that revenue may be recognised in an
incorrect period as a result of management accelerating
revenue recognition to overstate current year operating
results.
The Group’s standard policy is to recognise revenue
on shipment of inventory or collection of inventories
by customer. As a consequence, some revenue
arrangements have a cut-off risk at period end.
.
The procedures that we performed, among other, to
assess the appropriateness of revenue recognition,
included:
• We obtained and documented our understanding of
the revenue recognition process and evaluated the
design and implementation of key controls therein.
• We agreed a sample of deliveries occurring near
31 December 2021 to supporting documentation to
ensure transactions were recorded in the correct
period.
• We agreed a sample of sales transactions to proof
of delivery documentation to ensure that they were
complete and accurate.
• We inquired with management the basis for
determining the point of sale for material deliveries
near year-end.
• We assessed whether the related disclosures in the
financial statements are appropriate.
• We requested that component auditors perform
similar procedures as outlined above.
Based on the results of our testing we considered
that the policies applied to revenue recognition are
reasonable, and we did not identify any material
misstatements. We found the disclosures in respect of
revenue to be appropriate.
64
64
65
65
INDEPENDENT AUDITOR’S
REPORT CONTINUED
Valuation of Intangible assets and Goodwill (2021: €40.2 million; 2020: €36.9 million)
Refer to page 78 (accounting policy) and pages 92 to 93 (financial disclosures)
THE KEY AUDIT MATTER
HOW THE MATTER WAS ADDRESSED IN OUR AUDIT
Intangible assets and Goodwill of €40.2 million were
recognised as at 31 December 2021 (2020: €36.9 million).
An annual impairment test was performed in respect of
goodwill and intangible assets at 31 December 2021.
Conducting an impairment test to determine whether the
carrying amount of assets is recoverable is complex and
judgemental and involved significant assumptions around
revenue forecasts, EBITDA margin, WACC and terminal
values.
The procedures that we performed, among others, to
assess the appropriateness of the carrying value of
intangibles and goodwill, included:
• We obtained an understanding of the process and
perceived risks over the valuation of intangibles and
goodwill and tested the design and implementation of
the key controls over the valuation of intangibles and
goodwill.
• We obtained and critically assessed the impairment
models and the supporting documentation prepared
by management regarding the recoverability of both
the intangibles related to product development and
the Goodwill held on the balance sheet at year-end.
• With the support of our specialist, we considered the
significant underlying assumptions and checked the
mathematical accuracy of the model. We performed a
number of stress tests to assess the sensitivity of the
model to changes in significant assumptions and the
resulting impact on headroom.
• We evaluated the significant assumptions by
reference to past performance and discussion with
management.
• We reviewed the appropriateness of the accounting
treatment of recognition of intangibles and adequacy
of the disclosures in line with the accounting
requirements.
Based on the results of our testing we considered that
the policies applied to valuation of intangibles and
goodwill are reasonable. We found that management’s
significant judgements were appropriate and supported
by reasonable assumptions, and we did not identify any
material misstatements. We found the disclosures to be
adequate in providing an understanding of the basis of
the impairment assessment.
Key Audit matter impacting the parent company
Investment in subsidiary undertakings (2021: €77.4 million; 2020: €67.2 million)
Refer to page 81 (accounting policy) and page 118 (financial disclosures)
THE KEY AUDIT MATTER
HOW THE MATTER WAS ADDRESSED IN OUR AUDIT
The investment in subsidiary undertakings is carried by
the Company at cost less impairment.
There is a risk in respect of the carrying value of these
investments if future cash flows and performance
of these subsidiaries is not sufficient to support the
Company’s investment.
The area has been identified as a key audit matter due to
the significance of the balance to the Company.
Our audit procedures in this area included:
• We obtained and documented the process surrounding
impairment considerations and tested the design and
implementation of the relevant key controls therein.
• We considered management’s assessment of
impairment indicators.
• We compared the carrying value of investments to the
net assets of the subsidiary companies.
We found management’s assessment of the carrying
value of the investment in subsidiary undertakings and
related disclosures to be appropriate, and we did not
identify any material misstatements.
Our application of materiality and an overview of the scope of our audit
The materiality for the Group financial statements as a whole was set at €0.8 million (2020: €0.8 million).
This has been calculated using a benchmark of Group profit before taxation, from continuing operations (of which it represents
5% (2020: 5%)), which we have determined, in our professional judgement, to be one of the principal financial benchmarks
relevant to members of the Group in assessing financial performance.
Materiality for the parent company financial statements as a whole was set at €0.3 million (2020: €0.3 million), determined with
reference to a benchmark of total assets, of which it represents 30%.
We report to the Audit Committee all corrected and uncorrected misstatements we identified through our audit with a value
in excess of €39,000 (2020: €40,000), in addition to other audit misstatements below that threshold that we believe warrant
reporting on qualitative grounds.
Of the Group’s 42 (2020: 43) reporting components, we subjected 11 (2020: 11) to full scope audits for Group purposes. An
additional 3 components (2020: 2) were subjected to account balance testing in order to provide sufficient coverage over
the Group’s key financial statement lines. In addition, we conducted reviews of financial information (including inquiry) for all
remaining non-significant components. The components for which we performed a review of financial information (including
inquiry) were not individually significant enough to require an audit for Group reporting purposes but a review was performed
to provide further coverage over the Group’s results. The Group audit team instructed component auditors as to the significant
areas to be covered, including the relevant risks detailed above and the information to be reported back. The Group audit
team approved the materiality for components which ranged from €109,000 to €430,000, having regard to the mix of size
and risk profile of the Group across the components. The Group team held telephone and video conference meetings with all
component auditors to assess the audit risk and strategy.
Other information
The directors are responsible for the preparation of the other information presented in the Annual Report together with the
financial statements. The other information comprises the information included in the directors’ report and the Corporate
Profile, Chairman’s Statement, Chief Executive Officer’s Review, Strategy of the Group, Chief Financial Officer’s Review,
Board of Directors, Key Management, Directors’ Statement on Corporate Governance, Audit Committee Report, Nominations
Committee Report, Remuneration Committee Report, Statement of Directors’ Responsibilities and Corporate Responsibility.
The financial statements and our auditor’s report thereon do not comprise part of the other information. Our opinion on the
financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as
explicitly stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit
work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based
solely on that work we have not identified material misstatements in the other information.
Based solely on our work on the other information undertaken during the course of the audit, we report that:
• we have not identified material misstatements in the directors’ report;
•
•
in our opinion, the information given in the directors’ report is consistent with the financial statements; and
in our opinion, the directors’ report has been prepared in accordance with the Companies Act 2014.
66
66
67
67
INDEPENDENT AUDITOR’S
REPORT CONTINUED
CONSOLIDATED
INCOME STATEMENT
For the year ended 31 December 2021
Continuing operations
Revenue
Cost of sales
Gross profit
Operating costs
Operating profit
Finance costs
Finance income
Foreign exchange gain/(loss)
Movement on deferred consideration
Profit before tax
Income tax expense
Profit for the period
Profit attributable to:
- owners of the Parent
- non-controlling interests
Earnings per Ordinary Share
Basic earnings per share
Diluted earnings per share
The notes on pages 74 to 113 are an integral part of these consolidated financial statements.
2021
€’000
144,362
(95,599)
48,763
(30,656)
18,107
(927)
20
630
(2)
2020
€’000
129,903
(84,186)
45,717
(27,468)
18,249
(857)
42
(376)
11
17,828
17,069
(3,228)
14,600
14,600
-
6.87
6.69
(2,683)
14,386
14,221
165
6.72
6.57
Notes
4
6
6
7
23
11
19
21
21
Our opinions on other matters prescribed the Companies Act 2014 are unmodified
We have obtained all the information and explanations which we consider necessary for the purpose of our audit.
In our opinion, the accounting records of the Company were sufficient to permit the financial statements to be readily and
properly audited and the Company’s balance sheet and the profit and loss account is in agreement with the accounting
records.
We have nothing to report on other matters on which we are required to report by exception
The Companies Act 2014 requires us to report to you if, in our opinion:
•
•
the disclosures of directors’ remuneration and transactions required by Sections 305 to 312 of the Act are not made.
the Company has not provided the information required by section 5(2) to (7) of the European Union (Disclosure of Non-
Financial and Diversity Information by certain large undertakings and groups) Regulations 2017 for the year ended 31
December 2021 as required by the European Union (Disclosure of Non-Financial and Diversity Information by certain large
undertakings and groups) (amendment) Regulations 2018.
We have nothing to report in this regard.
Respective responsibilities and restrictions on use
Directors’ responsibilities
As explained more fully in their statement set out on page 57, the directors are responsible for: the preparation of the financial
statements including being satisfied that they give a true and fair view; such internal control as they determine is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing
the Group and Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern;
and using the going concern basis of accounting unless they either intend to liquidate the Group or the Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (Ireland) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
A fuller description of our responsibilities is provided on IAASA’s website at http://www.iaasa.ie/Publications/Auditing-
standards/International-Standards-on-Auditing-for-use-in-Ire/Description-of-the-auditor-s-responsibilities-for.
The purpose of our audit work and to whom we owe our responsibilities
Our report is made solely to the Company’s members, as a body, in accordance with Section 391 of the Companies Act 2014.
Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state
to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s members, as a body, for our audit work, for this report, or
for the opinions we have formed.
Michael Gibbons
for and on behalf of
KPMG
Chartered Accountants, Statutory Audit Firm
1 Stokes Place, St Stephen’s Green, Dublin, Ireland
11 March 2022
68
68
69
69
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
For the year ended 31 December 2021
As at 31 December 2021
Profit for the year
Other comprehensive loss
Items that are or may be reclassified subsequently to profit or loss:
Foreign currency translation – foreign operations
Other
Other comprehensive income/(loss) for the year
Total comprehensive income for the year
Total comprehensive income attributable to:
- owners of the Parent
- non-controlling interests
The notes on pages 74 to 113 are an integral part of these consolidated financial statements.
2021
€’000
2020
€’000
14,600
14,386
2,865
-
2,865
17,465
17,465
-
(4,165)
156
(4,009)
10,377
10,212
165
Non-Current Assets
Intangible assets and goodwill
Property, plant and equipment
Deferred tax asset
Total Non-Current Assets
Current Assets
Inventory and capital equipment
Trade and other receivables
Prepayments and other current assets
Current tax asset
Cash and cash equivalents
Total Current Assets
Total Assets
Equity
Ordinary share capital
Share premium
Undenominated capital
Merger reserve
Share based payment reserve
Foreign currency translation reserve
Retained earnings
Total Equity
Non-Current Liabilities
Loans and borrowings
Deferred tax liability
Deferred consideration
Other liabilities
Total Non-Current Liabilities
Current Liabilities
Loans and borrowings
Trade and other payables
Accrued and other liabilities
Current tax liability
Total Current Liabilities
Total Liabilities
Total Equity and Liabilities
Notes
12
13
11
14
15a
15b
23
20
18
11
23
18
16
16
2021
€’000
40,157
50,660
1,075
91,892
63,050
25,110
8,822
521
19,049
116,552
2020
€’000
36,987
45,820
1,093
83,900
53,017
20,640
4,186
311
17,045
95,199
208,444
179,099
2,125
67,647
39
(17,393)
2,695
(5,168)
94,207
2,117
67,647
39
(17,393)
2,259
(8,033)
86,300
144,152
132,936
23,265
1,622
4,224
852
29,963
11,205
15,683
6,027
1,414
34,329
64,292
14,789
1,832
4,723
503
21,847
6,822
10,457
5,529
1,508
24,316
46,163
208,444
179,099
The notes on pages 74 to 113 are an integral part of these consolidated financial statements.
On behalf of the Board:
Hugh McCullough
Joseph Purcell
Chairman
Chief Executive Officer
11 March 2022
70
70
71
71
CONSOLIDATED STATEMENT
OF CASH FLOWS
For the year ended 31 December 2021
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
For the year ended 31 December 2021
Operating activities:
Profit for the period
Adjustments to reconcile profit to net cash provided by operating activities:
Depreciation
Amortisation of intangible assets
Movement on deferred consideration
Finance cost
Finance income
(Gain)/Loss on sale of property, plant and equipment
Income tax expense
Other non-cash movements
Changes in trade and other receivables
Changes in prepayments and other assets
Changes in inventory
Changes in trade and other payables
Cash provided by operations
Interest received
Interest paid
Income taxes paid
Net cash provided by operating activities
Investing activities
Purchase of property, plant and equipment
Proceeds from the sale of property, plant and equipment
Investment in intangible assets
Proceeds from the issuance of share capital
Acquisitions of subsidiary, net of cash acquired
Investment in acquired intangible assets
Payment of deferred consideration
Proceeds from the sale of subsidiaries
Net cash used in investing activities
Financing activities
Dividends paid
Repayment of borrowings
Repayment of lease liabilities
Drawdown of loans
Purchase of NCI
Net cash provided by/(used in) financing activities
Effect of foreign exchange rate changes on cash
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Notes
2021
€’000
2020
€’000
13
12
18
18
14,600
14,386
7,105
6,482
105
2
927
(20)
(177)
3,228
(633)
25,137
(2,695)
(4,502)
(7,468)
5,240
15,712
20
(927)
(3,627)
11,178
(7,567)
543
(1,139)
8
(681)
(275)
(2,082)
111
-
(11)
857
(42)
18
2,683
1,092
25,465
919
1,209
(3,228)
(1,812)
22,553
42
(857)
(2,389)
19,349
(7,222)
331
(1,065)
7
(7,156)
-
(2,460)
706
(11,082)
(16,859)
(6,693)
(3,262)
(3,590)
15,236
-
1,691
217
2,004
17,045
19,049
(2,222)
(1,536)
(3,455)
6,622
(1,000)
(1,591)
(222)
677
16,368
17,045
The notes on pages 74 to 113 are an integral part of these consolidated financial statements.
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73
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS
The consolidated financial statements of Mincon Group plc (also referred to as “Mincon” or “the Group”) comprises the
Company and its subsidiaries (together referred to as “the Group”). The companies registered address is Smithstown
Industrial Estate, Smithstown, Shannon, Co. Clare, Ireland.
The Group is an Irish engineering Group, specialising in the design, manufacturing, sale and servicing of rock drilling tools
and associated products. Mincon Group Plc is domiciled in Shannon, Ireland.
3. SIGNIFICANT ACCOUNTING PRINCIPLES, ACCOUNTING ESTIMATES
AND JUDGEMENTS
The accounting principles as set out in the following paragraphs have, unless otherwise stated, been consistently applied
to all periods presented in the consolidated financial statements and for all entities included in the consolidated financial
statements. The Group has initially adopted Interest rate Benchmark Reform- Phase 2 (Amendments to IFRS 9, IAS 39,
IFRS 7, IFRS 4 and IFRS 16) and it has not had a significant impact on the Groups financial statements.
The following new and amended standards are not expected to have a significant impact on the Group’s
On 26 November 2013, Mincon Group plc was admitted to trading on the Euronext Growth and the Alternative Investment
consolidated financial statements:
Market (AIM) of the London Stock Exchange.
2. BASIS OF PREPARATION
These consolidated financial statements have been prepared in accordance with the International Financial Reporting
Standards as adopted by the European Union (EU IFRS), which comprise standards and interpretations approved by the
International Accounting Standards Board (IASB), and endorsed by the EU.
The accounting policies set out in note 3 have been applied consistently in preparing the Group and Company financial
statements for the years ended 31 December 2021 and 31 December 2020.
Effective 01/04/2021
• COVID-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16)
Effective 01/01/2022
• Annual Improvements to IFRS Standards 2018–2020.
• Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16).
• Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37)
• Reference to Conceptual Framework (Amendments to IFRS 3).
Effective 01/01/2023
The Group and Company financial statements are presented in euro, which is the functional currency of the Company and
also the presentation currency for the Group’s financial reporting. Unless otherwise indicated, the amounts are presented in
• Classification of Liabilities as Current or Non-current (Amendments to IAS 1).c
•
IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts.
thousands of euro. These financial statements are prepared on the historical cost basis.
• Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2).
• Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)
The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgements,
• Definition of Accounting Estimates (Amendments to IAS 8).
estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and
expenses. The judgements, estimates and associated assumptions are based on historical experience and various other
factors that are believed to be reasonable under the circumstances. Actual results could differ materially from these estimates.
The areas involving a high degree of judgement and the areas where estimates and assumptions are critical to the consolidated
financial statements are discussed in note 3.
The directors believe that the Group has adequate resources to continue in operational existence for the foreseeable future and
that it is appropriate to continue to prepare our consolidated financial statements on a going concern basis.
Revenue Recognition
The Group is involved in the sale and servicing of rock drilling tools and associated products. Revenue from the sale of
these goods and services to customers is measured at the fair value of the consideration received or receivable (excluding
sales taxes). The Group recognises revenue when it transfers control of goods to a customer or has completed a service
over a set period (typically one month) for a customer.
The following provides information about the nature and timing of the satisfaction of performance obligations in contracts
with customers, including significant payment terms, and the related revenue recognition policies.
Customers obtain control of products when one of the following conditions are satisfied:
1. The goods have been picked up by the customer from Mincon’s premises.
2. When goods have been shipped by Mincon, the goods are delivered to the customer and have been accepted at their
premises, or;
3. The customer accepts responsibility of the goods during transit that is in line with international commercial terms.
Where the Group provides a service to a customer, who also purchases Mincon manufactured product from the Group, the
revenue associated with this service is separately identified in a set period (typically one month) and is recognised in the
Groups revenue as it occurs.
Invoices are generated when the above conditions are satisfied. Invoices are payable within the timeframe as set in
agreement with the customer at the point of placing the order of the product or service. Discounts are provided from time-
to-time to customers.
74
74
75
75
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
3. SIGNIFICANT ACCOUNTING PRINCIPLES, ACCOUNTING ESTIMATES
AND JUDGEMENTS (CONTINUED)
Customers may be permitted to return goods where issues are identified with regard to quality of the product. Returned
goods are exchanged only for new goods or a credit note. No cash refunds are offered.
Where the customer is permitted to return an item, revenue is recognised to the extent that it is highly probable that a
significant reversal in the amount of cumulative revenue recognised will not occur. Therefore, the amount of revenue
recognised is adjusted for expected returns, which are estimated based on the historical data for specific types of product.
In these circumstances, a refund liability and a right to recover returned goods asset are recognised.
Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become
probable that future taxable profits will be available against which they can be used.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using
tax rates enacted or substantively enacted at the reporting date.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group
expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset only if certain criteria are met.
Government Grants
Leases
Amounts recognised in the profit and loss account are presented under the heading Operating Costs on a systematic basis
in the periods in which the expenses are recognised, unless the conditions for receiving the grant are met after the related
expenses have been recognised. In this case, the grant is recognised when it is receivable.
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease
if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
To assess whether a contract conveys the right to control the use of an identified asset, the Group uses the definition of a
Earnings per share
Basic earnings per share is calculated based on the profit for the year attributable to owners of the Company and the basic
lease in IFRS 16.
(i) As a lessee
weighted average number of shares outstanding. Diluted earnings per share is calculated based on the profit for the year
At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration
attributable to owners of the Company and the diluted weighted average number of shares outstanding.
in the contract to each lease component on the basis of its relative stand-alone prices.
Taxation
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is
initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at
to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best
or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove
estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is
the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
measured using tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising
from dividends.
Current tax assets and liabilities are offset only if certain criteria are met.
Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:
•
temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination
and that affects neither accounting nor taxable profit or loss;
•
temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that
the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not
reverse in the foreseeable future; and
•
taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to
the extent that it is probable that future taxable profits will be available against which they can be used. Future taxable
profits are determined based on the reversal of relevant taxable temporary differences. If the amount of taxable temporary
differences is insufficient to recognise a deferred tax asset in full, then future taxable profits, adjusted for reversals of
existing temporary differences, are considered, based on the business plans for individual subsidiaries in the Group.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the
related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end
of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or
the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset
will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property
and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for
certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s
incremental borrowing rate.
The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a
change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of
the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will
exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-
of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
76
76
77
77
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
3. SIGNIFICANT ACCOUNTING PRINCIPLES, ACCOUNTING ESTIMATES
AND JUDGEMENTS (CONTINUED)
(ii) As a lessor
At inception or on modification of a contract that contains a lease component, the Group allocates the consideration in the
contract to each lease component on the basis of their relative stand-alone prices.
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating
lease.
When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It
assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with
reference to the underlying asset.
Short term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-
term leases, including IT equipment. The Group recognises the lease payments associated with these leases as an expense
on a straight-line basis over the lease term.
Inventories and capital equipment
Inventories and capital equipment (rigs) are valued at the lower of cost or net realisable value. Net realisable value is the
estimated selling price in the ordinary course of business less the estimated costs of completion and selling expenses. The
cost of inventories is based on the first-in, first-out principle and includes the costs of acquiring inventories and bringing
them to their existing location and condition. Inventories manufactured by the Group and work in progress include an
appropriate share of production overheads based on normal operating capacity. Inventories are reported net of deductions
for obsolescence.
Intangible Assets and Goodwill
Goodwill
The Group accounts for acquisitions using the purchase accounting method as outlined in IFRS 3 Business Combinations.
Goodwill is not amortised and is tested annually.
Intangible assets
Expenditure on research activities is recognised in profit or loss as incurred.
Development expenditure is capitalised only if the Group can demonstrate if the expenditure can be measured reliably, the
product or process is technically and commercially feasible, future economic benefits are probable and the Group intends
to and has sufficient resources to complete development and to use or sell the asset. Otherwise, it is recognised in the
profit or loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost less accumulated
amortisation and any accumulated impairment losses.
Acquired IP which has been obtained at a cost that can be measured reliably, and that meets the definition and recognition
criteria of IAS38, will be accounted for as an intangible asset.
Foreign Currency
Foreign currency transactions
Transactions in foreign currencies (those which are denominated in a currency other than the functional currency) are
translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in
foreign currencies are translated using the foreign exchange rate at the statement of financial position date. Exchange gains
and losses related to trade receivables and payables, other financial assets and payables, and other operating receiv¬ables
and payables are separately presented on the face of the income statement.
Exchange rate differences on translation to functional currency are reported in profit or loss, except when reported in other
compre¬hensive income for the translation of intra-group receivables from, or liabilities to, a for-eign operation that in
substance is part of the net investment in the foreign operation.
Exchange rates for major currencies used in the various reporting periods are shown in note 23.
Translation of accounts of foreign entities
The assets and liabilities of foreign entities, including goodwill and fair value adjustments arising on consolidation, are
translated to euro at the exchange rates ruling at the reporting date. Revenues, expenses, gains, and losses are translated
at average exchange rates, when these approximate the exchange rate for the respective transaction. Foreign exchange
differences arising on translation of foreign entities are recognised in other comprehensive income and are accumulated
in a separate component of equity as a translation reserve. On divestment of foreign entities, the accumulated exchange
differences, are recycled through profit or loss, increasing or decreasing the profit or loss on divestments.
Business combinations and consolidation
The consolidated financial statements include the financial statements of the Group and all companies in which Mincon
Group plc, directly or indirectly, has control. The Group controls an entity when it is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The
financial statements of subsidiaries are included in the consolidated financial statements from the date on which control
commences until the date on which control ceases.
The consolidated financial statements have been prepared in accordance with the acquisition method.
According to this method, business combinations are seen as if the Group directly acquires the assets and assumes the
liabilities of the entity acquired. At the acquisition date, i.e. the date on which control is obtained, each identifiable asset
acquired and liability assumed is recognised at its acquisition-date fair value.
Consideration transferred is measured at its fair value. It includes the sum of the acquisition date fair values of the assets
transferred, liabilities incurred to the previous owners of the acquiree, and equity interests issued by the Group. Deferred
consideration is initially measured at its acquisition-date fair value. Any subsequent change in such fair value is recognised
in profit or loss, unless the deferred consideration is classified as equity. In that case, there is no remeasurement and the
subsequent settlement is accounted for within equity. Deferred consideration arises in the current year where part payment
for an acquisition is deferred to the following year or years.
Transaction costs that the Group incurs in connection with a business combination, such as legal fees, due diligence fees,
and other professional and consulting fees are expensed as incurred.
Goodwill is measured as the excess of the fair value of the consideration transferred, the amount of any non-controlling
interest in the acquiree, and the fair value of the Group’s previously held equity interest in the acquiree (if any) over the net of
acquisition-date fair values of the identifiable assets acquired and liabilities assumed. Goodwill is not amortised but tested
for impairment at least annually.
Non-controlling interest is initially measured either at fair value or at the non-controlling interest’s proportionate share
of the fair value of the acquiree’s identifiable net assets. This means that goodwill is either recorded in “full” (on the total
acquired net assets) or in “part” (only on the Group’s share of net assets). The choice of measurement basis is made on an
acquisition-by-acquisition basis.
Earnings from the acquirees are reported in the consolidated income statement from the date of control.
Intra-group balances and transactions such as income, expenses and dividends are eliminated in preparing the
consolidated financial statements. Profits and losses resulting from intra-group transactions that are recognised in assets,
such as inventory, are eliminated in full, but losses are only eliminated to the extent that there is no evidence of impairment.
78
78
79
79
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
3. SIGNIFICANT ACCOUNTING PRINCIPLES, ACCOUNTING ESTIMATES
AND JUDGEMENTS (CONTINUED)
Property, plant and equipment
Items of property, plant and equipment are carried at cost less accumulated depreciation and impairment losses. Cost of
an item of property, plant and equipment comprises the purchase price, import duties, and any cost directly attributable
to bringing the asset to its location and condition for use. The Group capitalises costs on initial recognition and on
replacement of significant parts of property, plant and equipment, if it is probable that the future economic benefits
embodied will flow to the Group and the cost can be measured reliably. All other costs are recognised as an expense in
profit or loss when incurred.
Depreciation
Depreciation is calculated based on cost using the straight-line method over the estimated useful life of the asset.
The following useful lives are used for depreciation:
Investments in subsidiaries - Company
Investments in subsidiary undertakings are stated at cost less provision for impairment in the Company’s statement of
financial position. Loans to subsidiary undertakings are initially recorded at fair value in the Company statement of financial
position and subsequently at amortised cost using an effective interest rate methodology.
Impairment of financial assets
Financial assets are assessed at each reporting date to determine whether there is any objective evidence that they are
impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a
negative effect on the estimated future cash flows of that asset.
Equity
Shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are
recognised as a deduction from equity, net of any tax effect.
Buildings
Plant and equipment
Years
20–30
3–10
Contingent liabilities
A contingent liability is a possible obligation or a present obligation that arises from past events that is not reported as a liability
or provision, as it is not probable that an outflow of resources will be required to settle the obligation or that a sufficiently
reliable calculation of the amount cannot be made.
The depreciation methods, useful lives and residual values are reassessed annually. Land is not depreciated.
Right of use assets are depreciated using the straight-line method over the estimated useful life of the asset being the
remaining duration of the lease from inception date of the asset. The depreciation methods, useful lives and residual values
Fair value is calculated based on the present value of future principal and interest cash flows, discounted at the market rate
of interest at the reporting date. These are set amounts detailed in each contract.
Financial instruments carried at fair value: Deferred consideration
are reassessed annually.
Financial Assets and Liabilities
Recognition and derecognition
Financial assets and liabilities are recognised at fair value when the Group becomes a party to the contractual provisions
of the instrument. Purchases and sales of financial assets are accounted for at trade date, which is the day when the
Group contractually commits to acquire or dispose of the assets. Trade receivables are recognised once the responsibility
associated with control of the product has transferred to the customer. Liabilities are recognised when the other party has
performed and there is a contractual obligation to pay. Derecognition (fully or partially) of a financial asset occurs when
the rights to receive cash flows from the financial instruments expire or are transferred and substantially all of the risks and
rewards of ownership have been removed from the Group. The Group derecognises (fully or partially) a financial liability
when the obligation specified in the contract is discharged or otherwise expires. A financial asset and a financial liability are
offset and the net amount presented in the statement of financial position when there is a legally enforceable right to set off
the recognised amounts and there is an intention to either settle on a net basis or to realise the asset and settle the liability
simultaneously.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial asset or a financial liability and
of allocating the interest income or interest expense over the relevant periods. The effective interest rate is the rate that
exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument, or when
appropriate a shorter period, to the net carrying amount of the financial asset or financial liability. The calculation includes
all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate,
transaction costs, and all other premiums or discounts.
Borrowing costs
All borrowing costs are expensed in accordance with the effective interest rate method.
Finance income and expenses
Finance income and expense are included in profit or loss using the effective interest method.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with maturities of three months or less.
Provisions
A provision is recognised in the statement of financial position when the Group has a legal or constructive obligation as a
result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and the
outflow can be estimated reliably. The amount recognised as a provision is the best estimate of the expenditure required
to settle the present obligation at the reporting date. If the effect of the time value of money is material, the provision is
determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of
the time value of money and, where appropriate, the risks specific to the liability.
A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan and the
restructuring has either commenced or been announced publicly. Future operating losses are not provided for.
Defined contribution plans
A defined contribution retirement benefit plan is a post-employment benefit plan under which the Group pays fixed
contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for
contributions to defined contribution retirement benefit plans are recognised as an employee benefit expense in profit or
loss when employees provide services entitling them to the contributions.
80
80
81
81
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
3. SIGNIFICANT ACCOUNTING PRINCIPLES, ACCOUNTING ESTIMATES
AND JUDGEMENTS (CONTINUED)
Share-based payment transactions
The Group operates a long term incentive plan which allows the Company to grant Restricted Share Awards (“RSAs”) to
executive directors and senior management. All schemes are equity settled arrangements under IFRS 2 Share-based
Payment.
The grant-date fair value of share-based payment awards granted to employees is recognised as an employee expense,
with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the awards.
The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-
market performance conditions are expected to be met, such that the amount ultimately recognised as an expense is based
on the number of awards that meet the related service and non-market performance conditions at the vesting date.
Critical accounting estimates and judgements
The preparation of financial statements requires management’s judgement and the use of estimates and assumptions
that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates and
associated assumptions are based on historical experience and various other factors that are believed to be reasonable
under the prevailing circumstances. Actual results may differ from those estimates. The estimates and assumptions are
reviewed on an ongoing basis. Revisions to the accounting estimates are recognised in the period in which they are revised
and in any future periods affected.
Following are the estimates and judgements which, in the opinion of management, are significant to the underlying amounts
included in the financial reports and for which there is a significant risk that future events or new information could entail a
change in those estimates or judgements.
Deferred consideration
The deferred consideration payable represents management’s best estimate of the fair value of the amounts that will be
payable, discounted as appropriate using a market interest rate. The fair value was estimated by assigning probabilities,
based on management’s current expectations, to the potential pay-out scenarios. The fair value of deferred consideration
is primarily dependent on the future performance of the acquired businesses against predetermined targets and on
management’s current expectations thereof.
Goodwill
The initial recognition of goodwill represents management’ best estimate of the fair value of the acquired entities value less
the identified assets acquired.
4. REVENUE
In the following table, revenue is disaggregated between Mincon manufactured product and product that is purchased
outside the Group and resold through Mincon distribution channels.
Product revenue:
Sale of Mincon product
Sale of third-party product
Total revenue
2021
€’000
2020
€’000
118,802
25,560
144,362
108,556
21,347
129,903
5. OPERATING SEGMENT
An operating segment is a component of the Group that engages in busi¬ness activities from which it may earn revenue
and incur expenses, and for which discrete financial information is available. The operating results of the operating segment
is reviewed regularly by the Board of Directors, the chief operating decision maker, to make deci¬sions about allocation of
resources and also to assess performance.
Results are reported in a manner consistent with the internal reporting provided to the chief operating decision maker
(CODM). Our CODM has been identified as the Board of Directors.
The Group has determined that it has one reportable segment. The Group is managed as a single business unit that sells
drilling equipment, primarily manufactured by Mincon manufacturing sites.
The CODM assesses operating segment performance based on operating profit. Segment revenue for the year ended 31
December 2021 of €144.4 million (2020: €129.9 million) is wholly derived from sales to external customers.
Entity-wide disclosures
The business is managed on a worldwide basis but operates manufacturing facilities and sales offices in Ireland, UK,
Sweden, Finland, South Africa, Western Australia, the United States and Canada and sales offices in ten other locations
including Eastern Australia, South Africa, France, Spain, Namibia, Sweden, Chile and Peru. In presenting information on
geography, revenue is based on the geographical location of customers and non-current assets based on the location of
During the annual impairment assessment over goodwill, management calculate the recoverable value of the group using
their best estimate of the discounted future cash flows of the group. The fair values were estimated using management’s
current and future projections of the Mincon Group’s performance as well as appropriate data inputs and assumptions.
these assets.
Revenue by region (by location of customers):
Trade and other receivables
Trade and other receivables are included in current assets, except for those with maturities more than 12 months after the
reporting date, which are classified as non-current assets. The Group estimates the risk that receivables will not be paid and
provides for doubtful debts in line with IFRS 9.
The Group applies the simplified approach to providing for expected credit losses (ECL) permitted by IFRS 9 Financial
Instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables. Loss rates
are calculated using a “roll rate” method based on the probability of a receivable progressing through successive chains of
non-payment to write-off.
Trade receivables are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a
repayment plan with the company. Where recoveries are made, these are recognised in the Consolidated Income Statement.
Region:
Ireland
Americas
Australasia
Europe, Middle East, Africa
2021
€’000
1,859
45,908
17,327
79,268
2020
€’000
1,487
43,640
24,754
60,022
Total revenue from continuing operations
144,362
129,903
During 2021 Mincon had sales in the USA of €24.4 million (2020: €24.7 million), Australia of €14.7 million (2020: €14.6 million,
these separately contributed to more than 10% of the entire Group’s sales for 2021.
82
82
83
83
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
5. OPERATING SEGMENT (CONTINUED)
Non-current assets by region (location of assets):
Region:
Americas
Australasia
Europe, Middle East, Africa
Total non-current assets(1)
(1) Non-current assets exclude deferred tax assets.
2021
€’000
14,682
11,838
64,297
90,817
2020
€’000
11,310
11,338
60,159
82,807
Operating costs
Employee costs (including director emoluments)
Depreciation (note 13)
Amortisation of acquired IP
Travel
Professional costs
Administration
Marketing
Legal cost
Other
During 2021 Mincon held non-current assets (excluding deferred tax assets) in Ireland of €18.3 million (2020: €18.3 million), in the
Total other operating costs
USA of €10.7 million (2020: €9.4 million) these separately contributed to more than 10% of the entire Group’s non-current assets
2021
€’000
18,615
2,304
105
1,238
2,589
2,841
694
629
1,641
30,656
2020
€’000
17,438
2,266
-
964
2,291
2,007
542
878
1,082
27,468
(excluding deferred tax assets) for 2021.
6. COST OF SALES AND OPERATING EXPENSES
Included within cost of sales and operating costs were the following major components:
The Group recognised €450,000 in Government Grants in 2021 (2020: €1.3 million). These grants differ in structure from
country to country, they primarily relate to personnel costs.
Included in professional costs are acquisition costs of €63,000, relating to acquisition of Attakroc and the acquisition of the IP
of Campbell’s Welding and Fabrication. Also included in professional fees is costs relating to the Non-Business Combination of
Cost of sales
Raw materials
Third-party product purchases
Employee costs
Depreciation (note 13)
In bound costs on purchases
Energy costs
Maintenance of machinery
Subcontracting
Other
Total cost of sales
Hammer Drill Rigs for 2021.
7. FINANCE COSTS
Interest on lease liabilities
Interest on loans and borrowings
Finance costs
2021
€’000
37,081
19,275
19,764
4,801
3,772
2,188
1,711
5,463
1,544
2020
€’000
32,860
16,098
17,504
4,216
3,106
1,623
1,392
5,364
2,023
95,599
84,186
The Group invested approximately €3.9 million on research and development projects in 2021 (2020: €3.7 million). €2.8 million
of this has been expensed in the period (2020: €2.6 million), with the balance of €1.1 million of development costs capitalised
(2020: €1.1 million) (note 12).
2021
€’000
684
243
927
2020
€’000
741
116
857
84
84
85
85
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
8. EMPLOYEE INFORMATION
9. ACQUISITIONS & DISPOSALS
Wages and salaries – excluding directors
Wages, salaries, fees and retirement benefit – directors (note 10)
Social security costs
Retirement benefit costs of defined contribution plans
Share based payment expense (note 22)
2021
€’000
2020
€’000
31,830
28,753
797
3,357
1,959
436
795
3,029
1,735
630
In June 2021, Mincon acquired the business of Campbell’s Welding & Fabrication, for a consideration of €421,000. This was
made up of a cash consideration of €84,000 and deferred consideration of €337,000. Mincon acquired Campbell’s Welding
& Fabrication to bring in-house their knowhow and processes.
In June 2021, Mincon acquired 100% shareholding in Attakroc, a Canadian-based mining and construction product
distributor, for a consideration of €1.8 million. The Group acquired Attakroc to bring in-house their vast experience in selling
and servicing the mining and construction industries in western Canada. Attakroc brings their knowledge of the local
market conditions and give Mincon a distinctive advantage in this region. The transaction included a cash consideration of
Total employee costs
38,379
34,942
€600,000 and deferred consideration of €1.2 million.
In addition to the above employee costs, the Group capitalised payroll costs of €700,000 in 2021 (2020: 500,000) in relation
A. Consideration transferred
to development.
The following table summarises the acquisition date fair value of each major class of consideration transferred.
At 31 December 2021 there was €256,000 (2020: €219,000) accrued for and not in paid pension contributions.
The average number of employees was as follows:
Sales and distribution
General and administration
Manufacturing, service and development
Average number of persons employed
2021
Number
2020
Number
136
75
383
594
126
66
360
552
Retirement benefit and Other Employee Benefit Plans
The Group operates various defined contribution retirement benefit plans. During the year ended 31 December 2021, the
Group recorded €2 million (2020: €1.7 million) of expense in connection with these plans.
Cash
Deferred onsideration
Total consideration transferred
Campbell
Welding &
Fabrication
€’000
84
337
421
Attakroc
€’000
597
1,227
1,824
B. Identifiable assets acquired and liabilities assumed
The following table summarises the recognised amounts of assets and liabilities assumed at the date of acquisition.
Property, plant and equipment
Right of use assets
Inventories
Trade receivables
Other assets
Trade and other payables
Right of use liabilities
Other accruals and liabilities
Fair value of identifiable net assets acquired
Total
€’000
681
1,564
2,245
Total
€’000
176
39
958
1,174
15
(699)
(39)
(615)
1,009
86
86
87
87
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
9. ACQUISITIONS & DISPOSALS (CONTINUED)
10. STATUTORY AND OTHER REQUIRED DISCLOSURES
Measurement of fair values
Operating profit is stated after charging the following amounts:
The valuation techniques used for measuring the fair value of material assets acquired were as follows.
Assets acquired
Valuation Technique
Property, plant
and equipment
Inventories
Market comparison technique and cost technique: The valuation model considers quoted market prices for
similar items when they are available, and depreciated replacement cost when appropriate. Depreciated
replacement cost reflects adjustments for physical deterioration as well as functional and economic
obsolescence.
Market comparison technique: The fair value is determined based on the estimated selling price in the ordinary
course of business less the estimated costs of completion and sale, and a reasonable profit margin based on
the effort required to complete and sell the inventories.
Directors’ remuneration
Fees
Wages and salaries
Retirement benefit contributions
Total directors’ remuneration
Auditor’s remuneration
Goodwill
Goodwill arising from the acquisition has been recognised as follows.
Consideration transferred
Fair value of identifiable net assets
Goodwill
Attakroc
€’000
1,824
(1,009)
815
Total
€’000
1,824
(1,009)
815
Auditor’s remuneration – Fees payable to lead audit firm
Audit of the Group financial statements
Audit of the Company financial statements
Other assurance services
Auditor’s remuneration – Fees payable to other firms in lead audit firm’s network
Audit services
Other assurance services
Tax advisory services
Total auditor’s remuneration
2021
€’000
2020
€’000
220
165
522
55
574
56
797
795
2021
€’000
2020
€’000
205
15
20
240
149
3
-
152
205
15
20
240
112
2
9
123
88
88
89
89
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
11. INCOME TAX
Tax recognised in income statement:
Current tax expense
Current year
Adjustment for prior years
Total current tax expense
Deferred tax expense
Origination and reversal of temporary differences
Adjustment for prior years
Total deferred tax expense
Total income tax expense
2021
€’000
3,427
(7)
3,420
(192)
-
(192)
2020
€’000
3,224
(103)
3,121
(438)
-
(438)
3,228
2,683
A reconciliation of the expected income tax expense for continuing operations is computed by applying the standard
Irish tax rate to the profit before tax and the reconciliation to the actual income tax expense is as follows:
Profit before tax from continuing operations
Irish standard tax rate (12.5%)
Taxes at the Irish standard rate
Foreign income at rates other than the Irish standard rate
Losses created/(utilised)
Other
Total income tax expense
The Group’s net deferred taxation liability was as follows:
Deferred taxation assets:
Reserves, provisions and tax credits
Accrued income
Tax losses and unrealised FX gains
Total deferred taxation asset
Deferred taxation liabilities:
Property, plant and equipment
Profit not yet taxable
Total deferred taxation liabilities
Net deferred taxation liability
2021
€’000
17,828
12.5%
2,229
691
277
31
3,228
2021
€’000
741
-
334
1,075
(1,332)
(290)
(1,622)
(547)
2020
€’000
17,069
12.5%
2,134
849
(843)
543
2,683
2020
€’000
585
31
477
1,093
(1,780)
(52)
(1,832)
(739)
11. INCOME TAX (CONTINUED)
The movement in temporary differences during the year were as follows:
1 January 2020 – 31 December 2020
Deferred taxation assets:
Reserves, provisions and tax credits
Accrued income
Tax losses
Total deferred taxation asset
Deferred taxation liabilities:
Property, plant and equipment
Profit not yet taxable
Total deferred taxation liabilities
Net deferred taxation liability
1 January 2021 – 31 December 2021
Deferred taxation assets:
Reserves, provisions and tax credits
Accrued income
Tax losses
Total deferred taxation asset
Deferred taxation liabilities:
Property, plant and equipment
Profit not yet taxable
Total deferred taxation liabilities
Balance
1 January
€’000
Recognised in
Profit or Loss
€’000
Acquired in a
Business
combination
€’000
Balance
31 December
€’000
610
-
6
616
(1,742)
(52)
(1,794)
(1,178)
(25)
31
471
477
(38)
-
(38)
439
-
-
-
-
-
-
-
-
585
31
477
1,093
(1,780)
(52)
(1,832)
(739)
Balance
1 January
€’000
Recognised in
Profit or Loss
€’000
Acquired in a
Business
combination
€’000
Balance
31 December
€’000
585
31
477
1,093
(1,780)
(52)
(1,832)
156
(31)
(143)
(18)
448
(238)
210
-
-
-
-
-
-
-
-
2021
€’000
566
566
741
-
334
1,075
(1,332)
(290)
(1,622)
(547)
2020
€’000
843
843
Net deferred taxation liability
(739)
192
Deferred taxation assets have not been recognised in respect of the following items:
Tax losses
Total
90
90
91
91
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
12. INTANGIBLE ASSETS AND GOODWILL
12. INTANGIBLE ASSETS AND GOODWILL (CONTINUED)
Balance at 1 January 2020
Internally developed
Acquisitions
Translation differences
Balance at 31 December 2020
Internally developed
Acquisitions (note 9)
Acquired intellectual property
Amortisation of intellectual property
Translation differences
Balance at 31 December 2021
Product development
Goodwill
€’000
4,782
1,065
-
-
5,847
1,139
-
-
-
-
€’000
27,155
-
4,533
(548)
31,140
-
815
-
-
590
6,986
32,545
Acquired
intellectual
property
€’000
-
-
-
-
-
-
-
696*
(105)
35
626
Total
€’000
31,937
1,065
4,533
(548)
36,987
1,139
815
696
(105)
625
40,157
* Included is €275,000 for the Non-Business Combination of Hammer Drilling Rigs in January 2021. Also included is the
acquisition of the IP of Campbell Welding & Fabrication €421,000.
Goodwill relates to the acquisition of the below companies, being the dates that the Group obtained control of these business:
• The remaining 60% of DDS-SA Pty Limited in November 2009.
• The 60% acquisition of Omina Supplies in August 2014.
• The 65% acquisition of Rotacan in August 2014.
• The acquisition of ABC products in August 2014.
• The acquisition of Ozmine in January 2015.
• The acquisition of Mincon Chile in March 2015.
• The acquisition of and Mincon Tanzania in March 2015.
• The acquisition of Premier in November 2016.
• The acquisition of Rockdrill Engineering in November 2016.
• The acquisition of PPV in April 2017.
• The acquisition of Viqing July 2017.
• The acquisition of Driconeq in March 2018.
• The acquisition of Pacific Bit of Canada in January 2019.
• The acquisition of Lehti Group in January 2020.
• The acquisition of Rocdrill in May 2020.
• The acquisition of Attakroc in June 2021.
The Group accounts for acquisitions using the purchase accounting method as outlined in IFRS 3 Business Combinations.
The businesses acquired were integrated with other Group operations soon after acquisition. Impairment testing (including sensitivity
analysis) is performed at each period end. Group management has determined that the Group has one cash generating unit and one
operating segment and therefore all goodwill is tested for impairment at Group level.
The recoverable amount of goodwill has been assessed based on estimates of fair value less costs to sell (FVLCS). The FVLCS valuation is
calculated on the basis of a discounted cash flow (“DCF”) model. The most significant assumptions within the DCF are weighted average
cost of capital (“WACC”), tax rates and terminal value assumptions. Goodwill impairment testing did not indicate any impairment during
any of the periods being reported. Four sensitivities are applied as part of the analysis considering the effects of changes in:
(1) the WACC
(2) the EBITDA margin
(3) the long term growth rate and
(4) the level of terminal value capital expenditure.
The sensitivities calculate downside scenarios to assess potential indications of impairments due to changes in key assumptions.
The results from the sensitivity analysis did not suggest that goodwill would be impaired when those sensitivities were applied.
The carrying amount of the CGU was determined to be lower than its fair value less cost to sell by €42.9 million (2020:
€68.4 million), giving management substantial headroom and comfort in the above stated impairment assessment.
The key assumptions used in the estimation of the fair value less cost calculation were as follows:
WACC
EBIDTA margin
Long term growth rate
Terminal value capital expenditure
2021
9.60%
16.69%
2.24%
2020
10.50%
17.84%
2.25%
€9.3 million
€7.1 million
The WACC calculation considers market data and data from comparable public companies. Peer group data was especially
considered for the beta factor and assumed financing structure (gearing level). The analysis resulted in a discount rate range of 8.70%
to 10.50%. This results in a midpoint WACC being used of 9.6%.
The Long term growth rate of 2.24% applied is based on a weighted average of the long term inflation rates of the countries in which
Mincon generates revenues and earnings.
The budgeted EBITDA was based on expectations of future outcomes, taking account for past experience, adjusted for anticipated
revenue growth as detailed in managements approved Budget. No EBITDA margin effect is assumed in the terminal value i.e. the
budgeted EBITDA margin of 16.69% for 2024 is assumed in the Terminal Value calculation used to arrive at the FVLCS.
Terminal value capital expenditure assumes no balance sheet growth is assumed in the terminal value, capital expenditure is assumed
to equal depreciation of €9.3 million.
The following table shows the amount by which the two assumptions below would need to change to individually for the estimated
recoverable amount to be equal to the carrying amount.
WACC
Long term growth rate
2021
10.60%
1.48%
2020
13.28%
1.50%
Investment expenditure of €1.1 million, which has been capitalised, is in relation to ongoing product development within the Group.
Amortisation will begin at the stage of commercialisation and charged to the income statement over a period of three to five years, or
the capitalised amount will be written off if the project is deemed no longer viable by management.
92
92
93
93
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
13. PROPERTY, PLANT AND EQUIPMENT
14. INVENTORY AND CAPITAL EQUIPMENT
Cost:
At 1 January 2020
Acquisitions through business combinations
Additions
Disposals and derecognition of ROU assets
Foreign exchange differences
At 31 December 2020
Acquisitions through business combinations
Additions
Disposals and derecognition of ROU assets
Foreign exchange differences
At 31 December 2021
Accumulated depreciation:
At 1 January 2020
Charged in year
Disposals
Foreign exchange differences
At 31 December 2020
Charged in year
Disposals
Foreign exchange differences
At 31 December 2021
Carrying amount: 31 December 2021
Carrying amount: 31 December 2020
Carrying amount: 1 January 2020
Land and
Buildings
Plant and
Equipment
€’000
€’000
ROU
Assets
€’000
16,228
95
387
-
(419)
16,291
-
1,524
(264)
496
45,829
2,542
6,835
(2,282)
(1,384)
51,540
176
6,043
(570)
1,586
18,047
58,775
(3,027)
(21,346)
(461)
-
68
(4,205)
1,969
750
4,832
3,385
102
(1,199)
(233)
6,887
39
3,419
(1,022)
122
9,445
(1,344)
(1,816)
432
82
Total
€’000
66,889
6,022
7,324
(3,481)
(2,036)
74,718
215
10,986
(1,856)
2,204
86,267
(25,717)
(6,482)
2,401
900
Finished goods
Work-in-progress
Raw materials
Capital equipment
Total inventory
2021
€’000
42,396
9,596
11,058
-
63,050
2020
€’000
34,120
8,206
10,187
504
53,017
The Group recorded an impairment of €22,000 against inventory to take account of net realisable value during the year ended
31 December 2021 (2020: €80,000). Write-downs are included in cost of sales.
At 31 December 2020, capital equipment are rigs held in South Africa for resale, during 2021 these rigs were sold.
15. TRADE AND OTHER RECEIVABLES AND OTHER CURRENT ASSETS
(a) Trade and other receivables
Gross receivable
Provision for impairment
(3,420)
(22,832)
(2,646)
(28,898)
Net trade and other receivables
(524)
18
(79)
(4,005)
14,042
12,871
13,201
(4,685)
450
(786)
(27,853)
30,922
28,708
24,483
(1,896)
866
(73)
(3,749)
5,696
4,241
3,488
(7,105)
1,334
(938)
(35,607)
50,660
45,820
41,172
Balance at 1 January 2021
Reduction in provision arising from prior years receivables impairment
Reduction in ECL model
Balance at 31 December 2021
The following table provides the information about the exposure to credit risk and ECL’s for trade receivables as at 31 December 2021.
ROU assets includes Property of €5 million (2020: €3.6 million) and Plant and Equipment of €700,000 (2020: €1.1 million).
The depreciation charge for property, plant and equipment is recognised in the following line items in the income statement:
Cost of sales
Cost of sales ROU assets
Operating expenses
Operating expenses ROU asset
Total depreciation charge for property, plant and equipment
2021
€’000
4,413
388
796
1,508
7,105
2020
€’000
3,744
472
922
1,344
6,482
Current (not past due)
1-30 days past due
31-60 days past due
61 to 90 days
More than 90 days past due
Net trade and other receivables
2021
€’000
26,047
(937)
25,110
2020
€’000
21,830
(1,190)
20,640
Provision for impairment
€’000
(1,190)
136
117
(937)
Weighted
average loss
rate %
1%
5%
14%
17%
100%
Gross
carrying
amount
€’000
19,804
3,749
1,649
628
216
26,047
Loss
allowance
€’000
198
187
230
106
216
937
94
94
95
95
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
15. TRADE AND OTHER RECEIVABLES AND OTHER CURRENT ASSETS
(CONTINUED)
The following table provides the information about the exposure to credit risk and ECL’s for trade receivables as at 31 December 2020.
Weighted
average loss
rate %
2%
5%
14%
9%
100%
Current (not past due)
1-30 days past due
31-60 days past due
61 to 90 days
More than 90 days past due
Net trade and other receivables
(b) Prepayments and other current assets
Plant and machinery prepaid
Prepayments and other current assets
Prepayments and other current assets
16. TRADE CREDITORS, ACCRUALS AND OTHER LIABILITIES
Trade creditors
Total creditors and other payables
VAT
Social security costs
Other accruals and liabilities
Total accruals and other liabilities
Gross
carrying
amount
€’000
12,709
5,169
1,350
2,312
290
21,830
2021
€’000
5,781
3,041
8,822
2021
€’000
15,683
15,683
2021
€’000
31
768
5,228
6,027
Loss
allowance
€’000
254
258
189
199
290
1,190
2020
€’000
1,597
2,589
4,186
2020
€’000
10,457
10,457
2020
€’000
390
1,088
4,051
5,529
17. CAPITAL MANAGEMENT
The Group’s policy is to have a strong capital base in order to maintain investor, creditor and market confidence and to sustain
future development of the business. Management monitors the return on capital, as well as the level of dividends to ordinary
shareholders.
The Board of Directors seeks to maintain a balance between the higher returns that might be possible with higher levels of
borrowing and the advantages and security afforded by a sound capital position.
The Group monitors capital using a ratio of ‘net debt’ to equity. Net debt is calculated as total liabilities less cash and cash
equivalents (as shown in the statement of financial position).
Total liabilities
Less: cash and cash equivalents
Net debt
Total equity
Net debt to equity ratio
2021
€’000
(64,292)
19,049
2020
€’000
(46,163)
17,045
(45,243)
(29,118)
144,152
132,936
0.31
0.22
96
96
97
97
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
18. LOANS AND BORROWINGS
19. NON-CONTROLLING INTEREST
The following table summarises the information relating to the Group’s subsidiary, Mincon West Africa SL, Mincon Group plc
acquired the additional 20% interest in the voting shares of Mincon West Africa on 1 October 2020, increasing its ownership
interest to 100%.
Non-controlling Interest 20%
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets
Net assets attributable to NCI
Revenue
Profit
OCI
Total comprehensive income
Profit allocated to NCI
2021
€’000
2020
€’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,919
826
-
826
165
Bank loans
Lease Liabilities
Total loans and borrowings
Current
Non-current
Maturity
2022-2036
2022-2031
2021
€’000
23,391
11,079
34,470
11,205
23,265
2020
€’000
11,090
10,521
21,611
6,822
14,789
The Group has a number of bank loans and lease liabilities with a mixture of variable and fixed interest rates. The Group has not
been in default on any of these debt agreements during any of the periods presented. The loans are secured against the assets
for which they have been drawn down for.
The Group has been in compliance with all debt agreements during the periods presented. The loan agreements in Ireland of
€10.5 million (2020: €4 million) carry restrictive financial covenants including, EBITA to be no less than €18 million at end of each
reporting period, interest cover to be 3:1 and to maintain a minimum cash balance of €5 million.
Interest rates on current borrowings are at an average rate of 4.64%
During 2021, the Group availed of the option to enter into overdraft facilities and to draw down loans of €15.2 million, €12.4
million in loans and €2.8 million in overdraft facilities. At 31 December 2021, Mincon Group has €2.5 million to drawdown on
existing loan facilities.
Loans are repayable in line with their specific terms, the Group has one bullet repayment due in 2026 of €5 million.
Reconciliation of movements of liabilities to cash flows arising from financing activities:
Loans and borrowings
Lease liabilities
Total
Bank loans
Lease Liabilities
Balance at
1 January
2021
€’000
Arising
from
acquisition
€’000
11,090
10,521
21,611
83
39
122
Cash
movements
Non-cash
movements
€’000
11,974
(3,590)
8,384
€’000
-
3,943
3,943
Foreign
exchange
differences
€’000
Balance at
31 December
2021
€’000
244
166
410
23,391
11,079
34,470
Interest
rate range
Effective
interest rate
1% - 7.8%
2% - 15%
3.4%
5.4%
98
98
99
99
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
20. SHARE CAPITAL AND RESERVES
21. EARNINGS PER SHARE
At 31 December 2021
Authorised Share Capital
Ordinary Shares of €0.01 each
Allotted, called-up and fully paid up shares
Ordinary Shares of €0.01 each
Opening Share Capital
Share Awards vested during year
Authorised Share Capital
Number
500,000,000
Number
212,472,413
€000
5,000
€000
2,125
2021
2020
211,675,024
210,973,102
797,389
701,922
212,472,413
211,675,024
Share issuances
On 26 November 2013, Mincon Group plc was admitted to trading on the Euronext Growth and the Alternative Investment Market
(AIM) of the London Stock Exchange.
Voting rights
The holders of Ordinary Shares have the right to receive notice of and attend and vote at all general meetings of the Company and
they are entitled, on a poll or a show of hands, to one vote for every Ordinary Share they hold. Votes at general meetings may be
given either personally or by proxy. Subject to the Companies Act and any special rights or restrictions as to voting attached to
any shares, on a show of hands every member who (being an individual) is present in person and every proxy and every member
(being a corporation) who is present by a representative duly authorised, shall have one vote, so, however, that no individual shall
have more than one vote for every share carrying voting rights and on a poll every member present in person or by proxy shall
have one vote for every share of which he is the holder.
Dividends
In June 2021, Mincon Group plc paid a final dividend for 2020 of €0.021 (2.10 cent) per ordinary share (€4.5 million).
In September 2021, Mincon Group plc paid an interim dividend in the amount of €0.0105 (1.05 cent) per ordinary share (€2.2 million
total payment), which was paid to shareholders on the register at the close of business on 20 August 2021.
The Directors recommend the payment of a final dividend of €0.0105 (1.05 cent) per share for the year ended 31 December 2021
(31 December 2020: 2.10 cent per share).
Share premium and other reserves
As part of a Group reorganisation of the Company, Mincon Group plc, became the ultimate parent entity of the Group. On 30
August 2013, the Company acquired 100% of the issued share capital in Smithstown Holdings and acquired (directly or indirectly)
the shareholdings previously held by Smithstown Holdings in each of its subsidiaries, thereby creating a merger reserve.
100
100
Basic earnings per share (EPS) is computed by dividing the profit for the period available to ordinary shareholders by the
weighted average number of Ordinary Shares outstanding during the period. Diluted earnings per share is computed by dividing
the profit for the period by the weighted average number of Ordinary Shares outstanding and, when dilutive, adjusted for the
effect of all potentially dilutive shares. The following table sets forth the computation for basic and diluted net profit per
share for the years ended 31 December:
Numerator (amounts in €’000):
Profit attributable to owners of the Parent
Denominator (Number):
Basic shares outstanding
Restricted share awards
Diluted weighted average shares outstanding
Earnings per Ordinary Share
Basic earnings per share, €
Diluted earnings per share, €
2021
€’000
2020
€’000
14,600
14,221
212,472,413
211,675,024
5,820,000
4,825,517
218,292,413
216,500,544
6,87
6.69
6.72
6.57
22. SHARE-BASED PAYMENT
The vesting conditions of the scheme state that the minimum growth in EPS shall be CPI plus 5% per annum, compounded
annually, over the relevant three accounting years up to the share award of 100% of the participants basic salary. Where awards
have been granted to a participant in excess of 100% of their basic salary, the performance condition for the element that is in
excess of 100% of basic salary is that the minimum growth in EPS shall be CPI plus 10% per annum, compounded annually,
over the three accounting years.
i.) Share Awards
In March 2021, 516,128 Restricted Share Awards (RSAs) met the vesting conditions set down by the board of directors and were
allotted to the recipients of the awards.
In April 2021, a further 281,261 Restricted Share Awards (RSAs) met the vesting conditions set down by the board of directors
and were allotted to the recipients of the awards.
Reconciliation of outstanding share awards
Number of Awards in thousand
Outstanding on 1 January 2021
Forfeited during the year
Exercised during the year
Granted during the year
Outstanding at 31 December 2021
844
(47)
(797)
-
-
101
101
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
22. SHARE-BASED PAYMENT (CONTINUED)
ii.) Share Options
During the year ended 31 December 2021, the Remuneration Committee made a grant of approximately 2,060,000 Restricted
Share Options (RSAs) to members of the senior management team.
Reconciliation of outstanding share awards
Number of Awards in thousand
Outstanding on 1 January 2021
Forfeited during the year
Exercised during the year
Granted during the year
Outstanding at 31 December 2021
LTIP Scheme
Conditional Award Invitation date
Year of Potential vesting
Share price at grant date
Exercise price per share/share options
Expected Volatility
Expected life
Risk free rate
Expected dividend yield
Fair value at grant date
Valuation model
23. FINANCIAL RISK MANAGEMENT
The Group is exposed to various financial risks arising in the normal course of business. Its financial risk exposures are
predominantly related to changes in foreign currency exchange rates and interest rates, as well as the creditworthiness of our
counterparties.
The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management
framework. The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to
set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems
are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training and
management standards and procedures, aims to maintain a disciplined and constructive control environment in which all
employees understand their roles and obligations.
The Group audit committee oversees how management monitors compliance with the Group’s risk management policies and
procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.
3,981
(221)
-
2,060
5,820
2021
Conditional Award at Grant Date
2020
Conditional Award at Grant Date
The Group defines liquid resources as the total of its cash, cash equivalents and short term deposits. Capital is defined as the
Group’s shareholders’ equity and borrowings.
a) Liquidity and capital
April 2021
2024/2028
€1.35
€1.35
36.57%
7 years
(0.53%)
1.58%
€0.39
April 2020
2023/2027
€0.80
€0.80
36.81%
7 years
(0.50%)
2.53%
€0.21
Black & Scholes Model
Black & Scholes Model
The Group’s objectives when managing its liquid resources are:
• To maintain adequate liquid resources to fund its ongoing operations and safeguard its ability to continue as a going
concern, so that it can continue to create value for investors;
• To have available the necessary financial resources to allow it to invest in areas that may create value for shareholders; and
• To maintain sufficient financial resources to mitigate against risks and unforeseen events.
Liquid and capital resources are monitored on the basis of the total amount of such resources available and the Group’s
anticipated requirements for the foreseeable future. The Group’s liquid resources and shareholders’ equity at 31 December
2021 and 31 December 2020 were as follows:
Cash and cash equivalents
Loans and borrowings
Shareholders’ equity
2021
€’000
19,049
34,470
144,152
2020
€’000
17,045
21,611
132,936
The Group frequently assess its liquidity requirements, together with this requirement and the rate return of long term euro
deposits, the Group has decided to keep all cash readily available that is accessible within a month or less. Cash at bank earns
interest at floating rates based on daily bank deposits. The fair value of cash and cash equivalents equals the carrying amount.
Cash and cash equivalents are held by major Irish, European, United States and Australian institutions with credit rating of A3
or better. The Company deposits cash with individual institutions to avoid concentration of risk with any one counterparty. The
Group has also engaged the services of a depository to ensure the security of the cash assets.
Risk of counterparty default arising on cash and cash equivalents and derivative financial instruments is controlled by dealing
with high-quality institutions and by policy, limiting the amount of credit exposure to any one bank or institution.
102
102
103
103
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
23. FINANCIAL RISK MANAGEMENT (CONTINUED)
23. FINANCIAL RISK MANAGEMENT (CONTINUED)
a) Liquidity and capital (continued)
b) Foreign currency risk
At year-end, the Group’s total cash and cash equivalents were held in the following jurisdictions:
The Group is a multinational business operating in a number of countries and the euro is the presentation currency. The
Ireland
Americas
Australasia
Europe, Middle East, Africa
Total cash, cash equivalents and short term deposits
31 December
2021
31 December
2020
€’000
4,760
3,136
1,108
10,045
19,049
€’000
1,870
2,989
1,723
10,463
17,045
There are currently no restrictions that would have a material adverse impact on the Group in relation to the intercompany
Group, however, does have revenues, costs, assets and liabilities denominated in currencies other than euro.
Transactions in foreign currencies are recorded at the exchange rate prevailing at the date of the transaction. The resulting
monetary assets and liabilities are translated into the appropriate functional currency at exchange rates prevailing at the
reporting date and the resulting gains and losses are recognised in the income statement. The Group manages some of
its transaction exposure by matching cash inflows and outflows of the same currencies. The Group does not engage in
hedging transactions and therefore any movements in the primary transactional currencies will impact profitability. The Group
continues to monitor the appropriateness of this policy.
The Group has material subsidiaries with a functional currency other than the euro, such as US dollar, Australian dollar, South
African rand, Canadian dollar, British pound and Swedish krona. Changes in the exchange rate year on year between the
transfer of cash held by its foreign subsidiaries. The Group continually evaluates its liquidity requirements, capital needs and
reporting currencies of these operations and the Euro, have an impact on the Group’s consolidated reported result.
availability of resources in view of, among other things, alternative uses of capital, the cost of debt and equity capital and
estimated future operating cash flow.
The Group’s worldwide presence creates currency volatility when compared year on year. During 2021, currencies were
volatile due to the COVID-19 Global pandemic, however the euro remained relatively steady against all major currencies the
In the normal course of business, the Group may investigate, evaluate, discuss and engage in future company or product
Group trades in.
acquisitions, capital expenditures, investments and other business opportunities. In the event of any future acquisitions, capital
expenditures, investments or other business opportunities, the Group may consider using available cash or raising additional
capital, including the issuance of additional debt. The maturity of the contractual undiscounted cash flows (including
estimated future interest payments on debt) of the Group’s financial liabilities at 31 December were as follows:
Total
Current
Value of
Cash Flows
€’000
Total
Undiscounted
contractual
Cash Flows
€’000
Less than
1 Year
€’000
1-3 Years
€’000
3-5 Years
€’000
More than
5 Years
€’000
4,723
11,090
10,521
10,457
5,529
42,320
4,224
23,391
11,079
15,683
6,027
60,404
4,803
11,313
10,742
10,457
5,529
42,844
4,281
23,866
11,302
15,683
6,027
61,159
2,068
3,666
3,155
10,457
5,529
24,875
2,319
7,565
3,640
15,683
6,027
35,234
2,252
3,991
5,534
-
-
11,777
1,759
7,163
5,249
-
-
14,171
370
1,937
1,936
-
-
4,243
203
4,409
1,699
-
-
6,311
113
1,719
117
-
-
1,949
-
4,729
714
-
-
5,443
At 31 December 2020:
Deferred consideration
Loans and borrowings
Lease liabilities
Trade and other payables
Accrued and other financial liabilities
Total at 31 December 2020
At 31 December 2021:
Deferred consideration
Loans and borrowings
Lease liabilities
Trade and other payables
Accrued and other financial liabilities
Total at 31 December 2021
• The US dollar increased by 7% against the closing 2020 euro rate (2020 decrease of 9% against 2019).
• The Australian dollar increased by 2% against the closing 2020 euro rated (2020 remained flat against 2019).
• The South African rand remained flat against the closing 2020 euro rated (2020 decrease of 14% against 2019).
• The Swedish Krona has decreased 2% against the closing 2020 euro rated (2020 increase of 4% against 2019).
In 2021, 54% (2020: 57%) of Mincon’s revenue €144 million (2020: €130 million) was generated in AUD, SEK and USD. The
majority of the Group’s manufacturing base has a euro, US dollar or Swedish Krona cost base. While Group management
makes every effort to reduce the impact of this currency volatility, it is impossible to eliminate or significantly reduce given
the fact that the highest grades of our key raw materials are either not available or not denominated in these markets and
currencies. Additionally, the ability to increase prices for our products in these jurisdictions is limited by the current market
factors.
The Group is also exposed to foreign currency risk on its liquid resources (cash), of which the euro equivalent of €4.8 million
was held in US dollar (USD 5.5 million), €2.5 million was held in Swedish krona (SEK 25.6 million) and the euro equivalent of
€1.1 million was held in Australian dollar (AUD 1.7 million).
Euro exchange rates
US Dollar
Australian Dollar
South African Rand
Swedish Krona
2021
2020
Closing
Average
Closing
Average
1.13
1.56
18.06
10.26
1.18
1.57
17.47
10.14
1.22
1.59
17.91
10.06
1.14
1.66
18.76
10.48
104
104
105
105
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
23. FINANCIAL RISK MANAGEMENT (CONTINUED)
c) Credit risk
23. FINANCIAL RISK MANAGEMENT (CONTINUED)
e) Fair values
Credit risk is the risk that the possibility that the Group’s customers may experience financial difficulty and be unable to
Fair value is the amount at which a financial instrument could be exchanged in an arms-length transaction between informed
meet their obligations. The Group monitors its collection experience on a monthly basis and ensures that a stringent policy is
and willing parties, other than in a forced or liquidation sale. The contractual amounts payable less impairment provision of
adopted to provide for all past due amounts. The majority of the Group’s customers are third party distributors and end users of
trade receivables, trade payables and other accrued liabilities approximate to their fair values.
drilling tools and equipment.
Expected credit loss assessment
The Group allocates each exposure to a credit risk grade based on data that is determined to be predictive of the risk of loss and
applying experienced credit judgement. Credit risk grades are defined using quantitative factors that are indicative of the risk of
default and are aligned to past experiences. Loss rates are based on accrual credit loss experience over the past five years.
The maximum exposure to credit risk for trade and other receivables at 31 December 2021 and 31 December 2020 by
geographic region was as follows:
Americas
Australasia
Europe, Middle East, Africa
Total amounts owed
d) Interest rate risk
Interest Rate Risk on financial liabilities
2021
€’000
7,969
3,330
13,811
25,110
2020
€’000
7,298
2,540
10,802
20,640
There were no significant changes in interest rates during 2021 and therefore there was no significant impact. Movements in
interest rates had no significant impact on our financial liabilities or finance cost recognised in either 2020 or 2021.
Interest Rate Risk on cash and cash equivalents
Our exposure to interest rate risk on cash and cash equivalents is actively monitored and managed, the rate risk on cash and cash
equivalents is not considered material to the Group.
f) Deferred consideration
The movements in respect of the deferred consideration value in the year to 31 December 2021 are as follows:
Balance at 1 January 2021
Arising on acquisition
Cash payment
Foreign currency translation adjustment
Unwinding of discount on deferred consideration
Balance at 31 December 2021
Deferred contingent consideration
€’000
4,723
1,564
(2,082)
17
2
4,224
106
106
107
107
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
24. SUBSIDIARY UNDERTAKINGS
24. SUBSIDIARY UNDERTAKINGS (CONTINUED)
At 31 December 2021 the Group had the following subsidiary undertakings:
At 31 December 2021 the Group had the following subsidiary undertakings:
Company
Group Share % Registered Office and Country of Incorporation
Company
Group Share % Registered Office and Country of Incorporation
Mincon International Limited
Manufacturer of rock drilling equipment
Mincon Rockdrills PTY Ltd
Manufacturer of rock drilling equipment
100%
Smithstown, Shannon, Co. Clare, Ireland
100%
8 Fargo Way, Welshpool, WA 6106, Australia
1676427 Ontario Inc. (Operating as Mincon Canada)
Manufacturer of rock drilling equipment
100%
400B Kirkpatrick Street, North Bay,
Ontario, P1B 8G5, Canada
Mincon Carbide Ltd
Manufacturer of tungsten carbide
100%
Windsor St, Sheffield S4 7WB, United Kingdom
Mincon Inc.
Sales company
Mincon Sweden AB
Sales company
Mincon Nordic OY
Sales company
100%
603 Centre Avenue, N.W. Roanoke, VA 24016, USA
100%
Industrivagen 2-4, 61202 Finspang, Sweden
100%
Hulikanmutka 6, 37570 Lempäälä, Finland
Mincon Holdings Southern Africa (Pty)
Sales company
100%
1 Northlake, Jetpark 1469, Gauteng, South Africa
ABC Products (Rocky) Pty Ltd
Sales company
100%
2/57 Alexandra Street, North Rockhampton,
Queensland, 4701 Australia
Mincon West Africa SARL
Dormant company
Mincon West Africa SL
Sales company
Mincon Poland
Dormant company
100%
Villa TF 4635 GRD, Almadies, Dakar B.P. 45534, Senegal
100%
Calle Adolfo Alonso Fernández, s/n, Parcela P-16, Planta 2,
Oficina 23, Zona Franca de Gran Canaria, Puerto de la Luz,
Código Postal 35008, Las Palmas de Gran Canaria
100%
ul.Mickiewicza 32, 32-050 Skawina, Poland
Mincon Canada – Western Service Centre
(previously Pacific Bit of Canada) Sales company
100%
3568-191 Street, Unit 101, Surrey BC, V3Z 0P6, Canada
Mincon Rockdrills Ghana Limited
Dormant company
Mincon S.A.C.
Sales company
Ozmine International Pty Limited
Dormant company
Mincon Chile
Sales company
Mincon Tanzania
Dormant company
Mincon Namibia Pty Ltd
Sales company
Mincon Russia
Dormant Company
100%
P.O. Box CT5105, Accra, Ghana
100%
Calle La Arboleda 151, Dpto 201, La Planicie, La Molina, Peru
100%
Gidgegannup, WA 6083, Australia
100%
Av. La Dehesa #1201, Torre Norte, Lo Barnechea, Santiago, Chile
100%
Plot 1/3 Nyakato Road, Mwanza, Tanzania
100%
Ausspannplatz, Windhoek, Namibia
100%
4,4 Lesnoy In,125047 Moscow, Russia
Mincon Mining Equipment Inc
Sales company
Mincon Exports USA Inc.
Group finance company
Mincon International Shannon
Dormant company
Smithstown Holdings
Holding company
100%
19789-92a Avenue, Langley, British Columbia V1M3B3, Canada
100%
603 Centre Ave, Roanoke VA 24016, USA
100%
Smithstown, Shannon, Co. Clare, Ireland
100%
Smithstown, Shannon, Co. Clare, Ireland
Mincon Canada Drilling Products Inc.
Holding company
100%
Suite 1800-355 Burrard Street, Vancouver, BC V6C 268, Canada
Lotusglade Limited
Holding company
Floralglade Company
Holding company
Castle Heat Treatment Limited
Holding company
Mincon Microcare Limited
Holding company
Driconeq AB
Holding company
Driconeq Production AB
Manufacturing facility
Driconeq Fastighet AB
Property holding company
Driconeq Do Brazil
Sales company
Driconeq Africa Ltd
Manufacturing facility
Driconeq Australia Holdings Pty Ltd
Holding company
Driconeq Australia Pty Ltd
Manufacturing facility
Mincon Drill String AB
Holding company
EURL Roc Drill
Sales company
Attakroc Inc
Sales company
Mincon Quebec
Holding company
100%
Smithstown, Shannon, Co. Clare, Ireland
100%
Smithstown, Shannon, Co. Clare, Ireland
100%
Smithstown, Shannon, Co. Clare, Ireland
100%
Smithstown, Shannon, Co. Clare, Ireland
100%
Svarvarevagen 4, 686 33 Sunne, Sweden
100%
Svarvarevagen 4, 686 33 Sunne, Sweden
100%
Svarvarevagen 4, 686 33 Sunne, Sweden
100%
Rua Dr. Ramiro De Araujo Filho, 348, Jundai, SP, Brazil
100%
Cnr of Harriet and James Bright Avenue, Driehoek. Germiston 1400
100%
47 Greenwich Parade, AU-6031 Neerabup, WA, Australia
100%
47 Greenwich Parade, AU-6031 Neerabup, WA, Australia
100%
Svetsarevägen 4, 686 33, Sunne, Sweden
100%
Rue Charles Rolland, 29650 Guerlesquin, France
100%
601, rue Adanac, Quebec, G1C 7G6, Canada
100%
601, rue Adanac, Quebec, G1C 7G6, Canada
108
108
109
109
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
25. LEASES
A. Leases as Lessees (IFRS 16)
The Group leases property, plant and equipment across its global operations.
During 2020, one of the leased properties in Finland was sublet. The lease and sublease expire in 2023.
During 2019, one of the leased properties in Australia was sublet. The lease and sublease expire in 2024.
The Group leases IT and other equipment with contract terms of less than 12 months and also for low value items. The
Group has elected not to recognise right-of -use assets and lease liabilities for these leases in line with availing of the
exemptions for such leases allowable under IFRS16.
Information about leases for which the Group is a lessee is presented below.
(i) Right-of-use assets
Balance at 1 January
Depreciation charge for the year
Additions to right of use assets
Disposal of right of use asset
Derecognition of right of use asset*
Foreign exchange difference
Balance at 31 December 2020
Balance at 1 January
Depreciation charge for the year
Additions to right of use assets
Disposal of right of use asset
Derecognition of right of use asset*
Foreign exchange difference
Balance at 31 December 2021
*Derecognition of the right of use asset during 2020 is as a result of entering into a finance sub-lease.
(ii) Amounts recognised in income statement.
Interest on lease liabilities
Expenses related to short term leases
Expenses related to leases of low value assets
-Leases under IFRS 16
110
110
2021
€’000
308
311
65
684
31 December 2020
€’000
3,488
(1,816)
3,487
(536)
(231)
(151)
4,241
31 December 2021
€’000
4,241
(1,896)
3,458
(156)
-
49
5,696
2020
€’000
332
314
95
741
25. LEASES (CONTINUED)
(iii) Amounts recognised in statement of cash flows
Total cash outflow for leases
Total cash outflow of leases
(iv) Extension options
2021
€’000
3,590
3,590
2020
€’000
3,455
3,455
Some property leases contain extension options exercisable by the Group. The Group assesses at lease commencement date
whether it is reasonably certain to exercise the extension options. The Group is reasonably certain it will not incur future lease
liabilities beyond what is currently calculated.
B. Leases as Lessor (IFRS 16)
(i) Financing Lease
The Group subleased a properties that had been recognised as a right of use asset in Finland and Australia. The Group
recognised income interest in the year in relation to this totalling €194,000.
The following table sets out a maturity analysis of lease receivable, showing the undiscounted lease payments to be received
after the reporting date.
Less than one year
One to two years
Two to three years
Balance at 31 December 2021
Unearned finance income
Total undiscounted lease receivable
(ii) Operating leases
31 December 2021
€’000
31 December 2020
€’000
192
146
-
338
(22)
316
188
185
140
513
(43)
470
The group leases company owned property out to tenants in the USA under various agreements. The group recognises these
leases as operating leases from a lessor perspective due to the fact they do not transfer substantially all of the risks and
rewards incidental to the ownership of the assets.
Rental income recognised by the Group during 2021 was €214,000 (2020: €213,000).
The following table sets out a maturity analysis of lease receivable, showing the undiscounted lease payments to be received
after the reporting date.
Less than one year
One to two years
Total
31 December 2021
€’000
65
20
85
111
111
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
26. COMMITMENTS
29. EVENTS AFTER THE REPORTING DATE
The following capital commitments for the purchase of property, plant and equipment had been authorised by the
The Board of Mincon Group plc is recommending the payment of a final dividend for the year ended 31 December 2021 in
directors at 31 December 2021:
Contracted for
Not-contracted for
Total
27. LITIGATION
31 December 2021
€’000
31 December 2020
€’000
2,837
772
3,609
3,044
521
3,565
the amount of €0.0105 (1.05 cent) per ordinary share, which will be subject to approval at the Annual General Meeting of the
Company in May 2022. Subject to Shareholder approval at the Company’s annual general meeting, the final dividend will be
paid on 17 June 2022 to Shareholders on the register at the close of business on 27 May 2022.
Acquisition of the Spartan Drilling Tools
On 1 January 2022, the Group acquired 100% shareholding in Spartan Drilling Tools, a manufacturer of drill pipe and related
products based in the USA for a consideration of €925,000. The goodwill arising on acquisition is circa €200,000, with expected
2022 revenue of €3 million.
The Group is not involved in legal proceedings that could have a material adverse effect on its results or financial position.
30. APPROVAL OF FINANCIAL STATEMENTS
The Board of Directors approved the consolidated financial statements on 11 March 2022.
28. RELATED PARTIES
As at 31 December 2021, the share capital of Mincon Group plc was 56.32% owned by Kingbell Company which is ultimately
controlled by Patrick Purcell and members of the Purcell family. Patrick Purcell is also a director of the Company.
In June 2021, the Group paid a final dividend for 2020 of €0.210 to all shareholders. The total dividend paid to Kingbell
Company was €2,411,545.
In September 2021, the Group paid an interim dividend for 2021 of €0.0105 to all shareholders. The total dividend paid to
Kingbell Company was €1,261,385 (September 2020: €1,256,551).
The Group has a related party relationship with its subsidiary and its joint venture undertakings (see note 24) for a list of these
undertakings), directors and officers. All transactions with subsidiaries eliminate on consolidation and are not disclosed.
Transactions with Directors
The Group is owed €Nil from directors and shareholders at 31 December 2021 and 2020. The Group has amounts owing to
directors of €Nil as at 31 December 2021 and 2020.
Key management compensation
The profit before tax from continuing operations has been arrived at after charging the following key management
compensation:
Short term employee benefits
Bonus and other emoluments
Post-employment contributions
Social security costs
Share based payment charged in the year
Total
2021
€’000
1,514
320
145
109
221
2020
€’000
1,441
347
126
86
96
2,309
2,096
The key management compensation amounts disclosed above represent compensation to those people having the authority
and responsibility for planning, directing and controlling the activities of the Group, which comprises the Board of Directors and
executive management (ten in total at year end). Amounts included above are time weighted for the period of the individuals
employment.
112
112
113
113
COMPANY STATEMENT
OF FINANCIAL POSITION
As at 31 December 2021
COMPANY STATEMENT
OF CASH FLOWS
For the year ended 31 December 2021
Non-Current Assets
Investments in subsidiary undertakings
Total Non-Current Assets
Current Assets
Loan amounts owing from subsidiary companies
Other assets
Cash and cash equivalents
Total Current Assets
Total Assets
Equity
Ordinary share capital
Share premium
Undenominated capital
Share based payment reserve
Retained earnings
Total Equity
Non-Current Liabilities
Loans and borrowings
Total Non-Current Liabilities
Current Liabilities
Loans and borrowings
Accrued and other liabilities
Amounts owed to subsidiary companies
Total Current Liabilities
Total Liabilities
Total Equity and Liabilities
Notes
3
5
5
2
7
7
5
2021
€’000
77,352
77,352
12,666
76
4,041
16,783
94,135
2,125
67,647
39
2,695
10,415
2020
€’000
67,242
67,242
25,447
90
1,334
26,871
94,113
2,117
67,647
39
2,259
17,260
Operating activities:
(Loss)/Profit for the year
Share based payments
Movement in loans to subsidiaries
Movement in other current assets
Movement in accruals
Net cash provided by operating activities
Investing activities
Proceeds from the issuance of share capital
Investment in subsidiary undertakings
Net cash provided by/(used in) investing activities
Financing activities
Dividends
Repayment of loans
Drawdown of loan
82,921
89,322
Net cash provided by/(used in) financing activities
9,000
9,000
1,500
556
158
2,214
11,214
94,135
3,000
3,000
1,000
633
158
1,791
4,791
94,113
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
The accompanying notes on page 117 to 119 are an integral part of these financial statements.
2021
€’000
(152)
436
12,781
14
(77)
2020
€’000
12,126
630
(2,987)
279
239
13,002
10,287
8
(10,110)
2,900
(6,693)
(1,000)
7,500
(193)
2,707
1,334
4,041
7
(15,744)
(5,450)
(2,222)
(1,000)
5,000
1,778
(3,672)
5,006
1,334
The accompanying notes on page 117 to 119 are an integral part of these financial statements.
On behalf of the Board:
Hugh McCullough
Joseph Purcell
Chairman
Chief Executive Officer
11 March 2022
114
114
115
115
COMPANY STATEMENT
OF CHANGES IN EQUITY
For the year ended 31 December 2021
Balance at 01 January 2020
2,110
67,647
39
1,629
7,356
78,781
Share
capital
€’000
Share
premium
€’000
Unde-
nominated
Capital
€’000
Share
based
payment
reserve
€’000
Retained
earnings
€’000
Total
equity
€’000
Comprehensive income:
Profit for the year
Total comprehensive income
Transactions with Shareholders:
Equity settled share based payments
Share based payments
Dividends
Total transactions with Shareholders
-
7
-
-
7
-
-
-
-
-
-
-
-
-
-
-
-
630
-
630
12,126
12,126
-
-
(2,222)
12,126
12,126
7
630
(2,222)
(2,222)
(1,585)
Balances at 31 December 2020
2,117
67,647
39
2,259
17,260
89,322
Comprehensive income:
Loss for the year
Total comprehensive income
Transactions with Shareholders:
Equity settled share based payments
Share based payments
Dividends
Total transactions with Shareholders
-
8
-
-
8
-
-
-
-
-
-
-
-
-
-
-
-
436
-
436
(152)
(152)
-
-
(6,693)
(152)
(152)
8
436
(6,693)
(6,693)
(6,249)
Balances at 31 December 2021
2,125
67,647
39
2,695
10,415
82,921
The accompanying notes are an integral part of these financial statements.
The accompanying notes on page 117 to 119 are an integral part of these financial statements.
NOTES TO THE COMPANY
FINANCIAL STATEMENTS
1. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES.
These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure
Framework (“FRS 101”). There have been no material departures from the Standards. The functional and presentation
currency of these financial statements is EUR. All amounts in the financial statements have been rounded to the nearest
thousand. In preparing these financial statements, the Company applies the recognition, measurement and disclosure
requirements of International Financial Reporting Standards as adopted by the EU (“Adopted IFRSs”), but makes
amendments where necessary in order to comply with the Companies Act 2014 and has set out below where advantage of
the FRS 101 disclosure exemptions has been taken.
The Company is the ultimate parent company of the Mincon Group which includes the Company in its
consolidated financial statements. In these financial statements, the company has applied the exemptions
available under FRS 101 in respect of the following disclosures:
• cash flow statement and related notes;
• comparative period reconciliations for tangible fixed assets and intangible assets;
• disclosures in respect of transactions with wholly owned subsidiaries;
• disclosures in respect of capital management;
• the effects of new but not yet effective IFRSs;
• disclosures in respect of the compensation of Key Management Personnel;
• disclosures of transactions with a management entity that provides Key Management Personnel services to the
company; and
• certain disclosures regarding revenue.
As the consolidated financial statements of the Mincon Group include the equivalent disclosures, the
Company has also taken the exemptions under FRS 101 available in respect of the following disclosures:
• IFRS 2 Share-based Payments in respect of group settled Share-based payments;
• certain disclosures required by IAS 36 Impairment of assets in respect of the impairment of goodwill and indefinite life
intangible assets;
• certain disclosures required by IFRS 3 Business Combinations in respect of business combinations undertaken by the
Company; and
• certain disclosures required by IFRS 13 Fair Value Measurement and the disclosures required by IFRS 7 Financial
Instrument Disclosures.
As permitted by section 304 of the Companies Act 2014, no separate profit and loss account is presented in respect of the
Company. The Company recorded a loss for the year of €152,000 (2020: €12.6 million), which included dividends received
of €2.3 million (2020: €15.3 million) from subsidiary companies.
Recent accounting pronouncements The IASB have issued the following standards, policies, interpretations and
amendments which were effective for the Company for the first time in the year ended 31 December 2020:
• amendments to References to Conceptual Framework in IFRS Standards;
• amendments to IFRS 3: Definition of a Business;
• amendments to IAS 1 and IAS 8: Definition of Material;
• amendments to IFRS 9, IAS 39 and IFRS 7: Interest Rate Benchmark Reform; and
• amendment to IFRS 16: Covid Related Rent Concessions.
The adoption of the above new standards and interpretations did not have a significant impact on the Company’s financial
statements.
Going concern
The Company is in a net asset position of €94.1 million at year-end. The Directors are satisfied that there are no material
uncertainties with regard to the going concern of the Company and as a result have a reasonable expectation that the
Company has adequate resources to continue in operational existence for a period of at least 12 months from the date
of approval of these consolidated financial statements, and therefore they continue to adopt the going concern basis of
accounting in preparation of its financial statements. The group’s and company’s business activities, together with the
factors likely to affect its future development, performance and position are set out in the business and strategy review
section of the Group annual report.
The accounting policies set out in note 3 of the Group financial statements have been applied consistently to all periods
presented in these financial statements.
116
116
117
117
NOTES TO THE COMPANY
FINANCIAL STATEMENTS
CONTINUED
NOTES TO THE COMPANY
FINANCIAL STATEMENTS
CONTINUED
2. SHARE CAPITAL
7. LOANS AND BORROWINGS
See note 20 of the Mincon Group plc consolidated financial statements for details of the authorised and issued share
capital of the company.
3. INVESTMENTS IN SUBSIDIARY UNDERTAKINGS
During the year ended 31 December 2021, Mincon Group plc subscribed for equity in the following subsidiaries as follows:
Balance at 1 January 2021
Investment in Mincon Inc
Investment in Mincon Chile
Investment in Mincon Peru
Investment in Pacific Bit
Investment in Mincon South Africa
Investment in EURL Roc Drill
Investment in Mincon West Africa
Investment in Viqing
Balance at 31 December 2021
Investments in subsidiary
€’000
67,242
5,730
2,131
1,131
516
392
310
250
(350)
77,352
Mincon Single Entity own all entities (either directly or indirectly) in note 24. The investment in subsidiary undertakings is carried
by the Company at cost less impairment. There is a risk in respect of the carrying value of these investments if future cash flows
and performance of these subsidiaries is not sufficient to support the Company’s investment. Investments were impaired by
€NIL during the year ended 31 December 2021 (2020: €NIL).
4. TRANSACTIONS WITH SUBSIDIARY COMPANIES
At 31 December 2021, the Company had repayments of €12.8 million (2020: loans given of €3 million) to subsidiary companies
by way of loans.
During 2021, the Company drew down loans of €7.5 million (2020: €5 million). At 31 December 2021, the Company has €2.5
million to drawdown on an existing loan facility.
Repayments are made quarterly, with a €5 million bullet repayment due in 2026. The effective rate for the loans and
borrowings is 2.5%.
Balance at 1 January 2021
Bank loan drawdowns
Repayment of bank loan
Total loans and borrowings 31 December 2021
Current
Non-current
8. SHARE BASED PAYMENTS
Bank Loans
€’000
4,000
7,500
(1,000)
10,500
1,500
9,000
The Company operates two share-based payment schemes, one for share awards and another for share options. Further
details of the two schemes are given in the Group financial statements at note 22.
9. CREDIT RISK
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at
31 December was:
Carrying Value
31 December
2021
€’000
31 December
2020
€’000
4,041
1,334
5. AMOUNTS AMOUNTS OWING TO/FROM SUBSIDIARY COMPANIES
Cash and cash equivalents
At 31 December 2021, the company has €12.7 million (2020: €25.4million) owed from Group companies.
The maximum amount of credit exposure on amounts owed by subsidiary undertakings is €12.6 million. The fair value of the
amounts owed to and from subsidiary undertakings approximated their carrying value.
The expected loss on default in respect of amounts owed by subsidiary undertakings is not considered to be significant and
therefore no provision of impairment is required.
The Company has issued loans in non-euro, which the euro equivalent of €2.9 million was held in US dollar (USD 3.3 million),
€1.1 million was held in Swedish krona (SEK 11.5 million), €735,000 was held in Canadian dollar (AUD 1.1 million), the euro
equivalent of €1.8 million was held in South African rand (ZAR 33 million).
The loans owed to the Company carry effective interest rates between 2% - 9%.
At 31 December 2021, the Company owed €158,000 (2020: €158,000) to subsidiary companies in relation to costs incurred on
its behalf.
6. SHORT-TERM DEPOSITS
At 31 December 2021, the Company had €4 million cash readily available (2020: €1.3 million).
10. TRANSITION TO FRS 101
The Company transition to FRS 101 during the year. There was no impact to the Company’s reported assets and liabilities as at
1 January 2020 and 31 December 2020, nor was there any impact on reported profits for the year ended 31 December 2020.
11. APPROVAL OF FINANCIAL STATEMENTS
The Board of Directors approved the financial statements on 11 March 2022.
118
118
119
119
120
120
121
121
MINCON GROUP PLC
Smithstown Industrial Estate,
Shannon, Co. Clare, Ireland.
T. +353 (61) 361 099
E. investorrelations@mincon.com
W. mincon.com
122122