ANNUAL
REPORT
2016
MITCHELL SERVICES LTD
ACN 149 206 333
ANNUAL REPORT
30 JUNE 2016
CONTENTS
Chairman’s Report
Chief Executive Officer’s Report
Directors’ Report
Corporate Governance Statement
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Additional Australian Stock Exchange Information
Corporate Directory
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CHAIRMAN’S REPORT
FOR THE YEAR ENDED 30 JUNE 2016
Nathan Andrew Mitchell
Executive Chairman
Despite subdued global economic growth and commodity
prices, Mitchell Services has made significant progress towards
delivering on its long term strategy.
‘Our key achievements have aligned
closely with these objectives and our
broader strategy’
From the outset it has been Mitchell Services’ vision to become
Australia’s leading provider of drilling services. To achieve this
vision we put in place a three phase process:
Phase 1 – Business Ready
Phase 2 – Ramp up
Phase 3 – Business Refinement
With phases 1 - 2 completed our 2016 objectives were very
much focused on phase three. Phase three was the process of
taking advantage of our strong position in the drilling market and
capitalising on long term revenue streams from high quality Tier
1 clients. This phase also involved a focus on reducing costs
in the business, delivering efficient, safe and quality services to
our clients and identifying appropriate levels of surplus assets
that could potentially be sold to reduce debt levels.
Looking back over this past year, it is pleasing to note that our
key achievements have aligned so closely with these objectives
and our broader strategy;
Long term revenue streams with Tier 1 clients
Our Tier 1 client base has strengthened significantly during
the 2016 financial year, with 88% of the Group’s total revenue
attributable to revenue from long term contracts with major
Tier 1 mining companies. As a result, the Group has again
recorded strong year on year revenue growth with total revenue
increasing from $25.2 million in 2015 to $33.0 million in 2016.
Efficient service delivery and cost reduction
Following the successful acquisition and integration of assets
previously owned by Nitro Drilling in July 2015, Mitchell
Services has assembled one of the highest quality fleets in
Australia capable of providing outstanding service to clients
across the resources industry. An added focus on innovation
and cost reduction has resulted in positive EBITDA at a
utilisation level of less than 30%, with the Group recording
EBITDA of $522k for the year compared to negative EBITDA of
$4,322k in 2015.
Safety
The team has made significant progress with regards to the
safety of our most valuable assets - our people. Improved
safety and risk management systems have resulted in both the
frequency and severity of injuries reducing across all areas of
the business.
Rationalisation and debt reduction
In late 2015, we embarked on a strategic asset rationalisation
and debt reduction process. During this process the Group
realised $6 million in proceeds from asset sales which were
used to fund necessary capital expenditure and reduce debt.
We will continue to be heavily reliant on the general
strengthening of our sector, however the broader strategy of the
business remains; that upon return to normal market conditions
with a significantly diminished competitor base, we will be well
placed to deliver strong returns to our shareholders. That said,
it is extremely pleasing to note that this year’s growth and
improvements were achieved in a subdued market that
remains challenging.
‘Mitchell Services has assembled one of the
highest quality fleets in Australia’
We remain mindful of the fact that business growth such as that
achieved in 2016 should be done so in a measured, structured
manner and in an environment of sound risk management and
corporate governance. In October 2015 the Company appointed
Mr Neal O’Connor as Non-Executive Director and Chairman
of the Audit and Risk Committee and Remuneration and
Nominations Committee. Neal’s extensive industry experience
and added focus on corporate governance makes him a
valuable addition to the Mitchell Services Board.
In closing I would like to thank all shareholders for your
continued patience and support. I would also like to thank our
team of dedicated employees who enthusiastically drive the
vision and the values of Mitchell Services every day. On behalf
of the Board, thank you.
Nathan Andrew Mitchell
Executive Chairman
WE HAVE
MADE
SIGNIFICANT
PROGRESS
TOWARDS
DELIVERING
ON OUR
LONG TERM
STRATEGY
3
4
MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016
CHIEF EXECUTIVE OFFICER’S REPORT
FOR THE YEAR ENDED 30 JUNE 2016
Revenue from underground drilling has grown by 681%
compared to 2015 and now accounts for 23% of our total
operating revenue.
Geographical diversity remains a key longer term goal and
we are actively exploring opportunities across other states of
Australia and internationally.
THE FUTURE
The business is better positioned than ever to move forward
into the future on the strong foundation of contracted revenue
from Tier 1 clients. Mitchell Services will use this foundation to
further deliver on our vision of being Australia’s leading provider
of drilling services to the global exploration, mining and energy
industries.
In FY17 our goal is to further build on this strong foundation
by converting tender pipeline opportunities into contract wins.
We will focus on utilising assets that we have acquired whilst
increasing the geographical spread of our rigs into other key
markets.
I would like to thank the Board for their on-going support and
guidance, my senior executive and all of our teams that have
gone above and beyond in another very challenging year in the
mining services industry.
I look forward to a safe and productive year ahead and
hopefully with some big contract wins.
Some of the notable achievements include:
•
•
•
•
No lost time injuries in FY16.
Revenue has grown by 120% since the lows of FY14 and
increased 31% year on year.
Tier 1 client revenue has increased significantly as a
percentage of overall income.
EBITDA positive with less than 30% of our fleet being
utilised.
•
Tender pipeline of opportunities continues to grow.
Andrew Michael Elf
Chief Executive Officer
We have refined the business over the last year which was
the final phase in our business optimisation strategy. The key
points below demonstrate the focus of work undertaken over
the last year as part of this strategy.
Take advantage of our strong position in key markets.
Capitalise on long term revenue streams from Tier 1
clients.
Focus on reducing costs in the business.
Deliver efficient, safe and quality services to our clients.
Acquisition and integration of Nitro Drilling assets.
•
•
•
•
•
•
Upgrade asset fleet and sell non-core assets to reduce
commercial debt levels and optimise asset mix.
REVENUE DIVERSIFICATION
I am pleased with the progress the Company has made over the
last year given the continued challenges we face as a mining
services provider under the current general market conditions.
‘I am pleased with the progress the Company
has made over the last year’
Management remains mindful of the importance of
diversification in the revenue streams of the business. Key
areas in this regard include diversity in commodity mix, diversity
in the mix between underground and surface drilling and
geographical diversity.
I am extremely proud of our achievements in this regard during
2016. Our commodity mix remains well balanced with revenue
from coal and revenue from minerals accounting for 46% and
51% of total operating revenue respectively.
Andrew Michael Elf
Chief Executive Officer
EBITDA
POSITIVE
WITH LESS
THAN 30%
OF THE FLEET
UTILISED.
REVENUE HAS
GROWN BY
120%
SINCE THE
LOWS OF FY14
5
6
MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016 CURRENT BUSINESS SUMMARY
VISION
TO BE AUSTRALIA’S LEADING PROVIDER OF
DRILLING SERVICES TO THE GLOBAL EXPLORATION,
MINING AND ENERGY INDUSTRIES
NO LOST TIME
INJURIES
SINCE NOVEMBER 2014
REVENUE FOR
2015/16
FULL YEAR
$32.97M UNDERGROUND
REVENUE
INCREASED
FROM 3.8%
TO 22.6% OF
GROUP REVENUE
140+
EXPERIENCED
EMPLOYEES
INCREASE IN TIER 1 REVENUE
FROM $16.3M IN 2015 TO
$28.9M IN 2016
TENDER
PIPELINE
CONTINUES
TO GROW
7
8
MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016 DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2016
The Directors of Mitchell Services Limited submit herewith the
financial report of Mitchell Services Limited (Company) and its
subsidiaries (Group) for the year ended 30 June 2016. In order
to comply with the provisions of the Corporations Act 2001, the
Directors’ report as follows:
Robert Barry Douglas BCom, LLB (Non-Executive Director)
Mr Douglas was appointed as Non-Executive Director on 29
November 2013. Mr Douglas has over 15 years of experience
in finance and investment banking and is currently an Executive
Director of Morgans Financial.
DIRECTORS
The names and particulars of the Directors of the Company during
or since the end of the financial year are:
Nathan Andrew Mitchell (Executive Chairman)
Mr Mitchell was appointed to the Board on 29 November 2013 and
appointed as Executive Chairman on 19 March 2014.
Mr Mitchell has been involved in the drilling industry for virtually his
entire life. With a career spanning almost 30 years, he has a proven
track record as an industry leader in technical development and
business growth.
Mr Mitchell is currently Executive Chairman of Mitchell Group
Holdings Pty Ltd including Ports, Energy and Equipment.
Previously, as CEO of Mitchell Drilling Contractors, Mr Mitchell led
the Company through a period of rapid local growth and directed
an international expansion into India, China, Indonesia, the United
States and southern Africa. Other directorships include Mitchell
Drilling International Pty Ltd, Sub 161 Pty Ltd and Verso Energy Pty
Ltd. Mr Mitchell also previously served on the board of Tlou Energy
Limited (ASX:TOU) from June 2009 to February 2016.
At the date of this report, Mr Mitchell has relevant interests in
314,763,177 shares.
Mr Douglas has experience in all aspects of corporate advisory
and equity capital raising for listed public companies and
companies seeking to list, including offer structure, prospectus
preparation, due diligence, accounts and forecasting, risk
management, sales and marketing, logistics and legal
requirements. During his time Mr Douglas has worked
extensively with energy and resource companies. Mr Douglas
has served on both the Audit and Risk Committee and the
Remuneration and Nomination Committee since 20 March 2014
and was Chairman of both Committees between 21 November
2014 and 20 October 2015.
At the date of this report, Mr Douglas has relevant interests in
1,964,921 shares.
Neal Macrossan O’Connor LLB, GAICD (Non-Executive
Director)
Mr O’Connor was appointed as Non-Executive Director on 21
October 2015 and is also Chairman of the Audit and Risk and
Remuneration and Nomination Committees.
Mr O’Connor was formerly General Counsel and Company
Secretary and an Executive Committee member of the global
Xstrata Copper. He has extensive experience in the resource
industry and brings an added focus on Corporate Governance
and Risk Management to the Board.
Peter Richard Miller (Non-Executive Director)
Mr Miller was appointed as Director on 8 February 2011.
At the date of this report, Mr O’Connor has relevant interests in
1,039,000 shares.
Mr Miller has been involved in all aspects of the drilling industry for
the past 29 years and founded Drill Torque in 1992. His experience
encompasses working with all types of drilling rigs, building rigs and
managing drilling companies. Having worked in most exploration
areas in Australia he is intimately familiar with drilling conditions,
equipment requirements and pricing structures to maximise fleet
productivity. Mr Miller is widely known and well regarded in the
industry.
At the date of this report, Mr Miller has relevant interests in
23,905,045 shares.
9
Grant Eric Moyle
Mr Moyle was appointed as Alternate Director for Mr Nathan
Mitchell on 30 May 2014.
Mr Moyle is the Chief Executive Officer of Mitchell Group
Holdings in Brisbane. He brings to the Group his management
and board experience in International Mining Services,
Governance and Strategic Business Growth.
At the date of this report, Mr Moyle has relevant interests in
2,369,143 shares.
CHIEF EXECUTIVE OFFICER
The names and particulars of the Chief Executive Officer of the
Company during or since the end of the financial year are:
The Group’s offerings include coal exploration, mineral
exploration, mine services, large diameter, coal seam gas,
directional drilling services, coal mine gas drainage and
wireline services.
Andrew Michael Elf BCom, FCPA, MBA, GAICD
Andrew was appointed as Chief Executive Officer on 20 March
2014.
There were no significant changes in the Group’s nature of
activities during the year.
REVIEW OF OPERATIONS
Andrew has over 15 years finance, commercial and operational
experience working in various senior roles both in Australia and
overseas and was a Financial Director in Indonesia for a top
100 ASX listed company before transitioning into the drilling
industry in early 2004. Andrew held several senior roles with
Boart Longyear before joining Mitchell Group in March 2010,
where he spearheaded the growth of the African business to an
annual turnover in excess of $30 million.
Andrew has extensive experience in managing drilling
companies in various regions around the world which have
worked for global Tier 1 mining and energy houses.
CHIEF FINANCIAL OFFICER & COMPANY SECRETARY
The names and particulars of the Chief Financial Officer and
Company Secretary of the Company during or since the end of
the financial year are:
Gregory Michael Switala BCom (Hons), CA
Gregory Michael Switala was appointed to the position of Chief
Financial Officer and Company Secretary on 1 December 2014.
Greg joined Mitchell Services in 2014 and has lead the finance
team through a period of substantial growth. Greg has over 10
years’ experience in audit and commercial finance roles.
PRINCIPAL ACTIVITIES
The Group provides exploration and mine site drilling services
to the exploration, mining, and energy industries, primarily in
Australia and is currently headquartered in Seventeen Mile
Rocks, Queensland.
The Group specialises in various segments of the drilling
market and has a history of innovation in the drilling industry.
Despite challenging market conditions, revenue for the Group
grew by 31% to $32.9 million for the year ended 30 June 2016
compared to $25.2 million in 2015. This substantial increase in
revenue was due to a significant increase in contract wins with
Tier 1 mining clients. Revenue from Tier 1 clients made up 88%
of total 2016 revenue compared to 65% in 2015.
The Group generated positive EBITDA of $0.5 million for
the year ended 30 June 2016 compared to a 2015 negative
EBITDA of $4.3 million. The Group’s operating result after
income tax for the year ended 30 June 2016 was a loss of $6.0
million (2015: $17.0 million loss).
Further detailed comments on operations and financial
performance are included in the Chairman’s Report, Chief
Executive Officer’s Report and Financial Statements included in
this Annual Report.
CHANGES IN STATE OF AFFAIRS
Acquisition of Assets from Nitro Drilling Pty Ltd (in
Liquidation) and its related entities
On 6 July 2015, the Group acquired assets from Nitro Drilling
Pty Ltd (Receivers and Managers appointed) (In Liquidation) for
$16.1 million, funded by a combination of $8.4 million in equity
raised and $8.5 million debt provided by major shareholders,
Washington H. Soul Pattinson & Company Limited and Mitchell
Family Investments (Qld) Pty Ltd as trustee for the Mitchell
Family Investment Trust.
Further details on the acquisition along with the associated
funding instruments are included in the Financial Statements
included in this Annual Report.
10
MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016
SUBSEQUENT EVENTS
Pursuant to the facility agreements with Washington H. Soul Pattinson & Company Limited and Mitchell Family Investments (Qld)
Pty Ltd as trustee for the Mitchell Family Investment Trust, the Company issued 53,125,000 new fully paid ordinary shares on 6 July
2016 as consideration for the second years interest payable under those facilities, bringing the total number of shares on hand on 6
July 2016 to 1,471,498,973.
LIKELY DEVELOPMENTS
The Group will continue to pursue its principal activities during the next financial year.
ENVIRONMENTAL REGULATIONS
The Group’s operations are not subject to any particular and significant environmental regulation under a law of the Commonwealth
or of a State or Territory. However, the Group does provide services to entities that are licensed or otherwise subject to conditions
for the purposes of environmental legislation or regulation. In these instances, the Group undertakes its compliance duties in
accordance with the contractor regime implemented by the licensed or regulated entity.
DIVIDENDS
There were no dividends paid in respect of the year ended 30 June 2016.
SHARES UNDER OPTION
Details of unissued shares or interests under option as at the date of this report are:
Grant Date
23 May 2016
Exercise Price
Number under Option
$0.0395
16,362,395
16,362,395
INDEMNIFICATION OF OFFICERS AND AUDITORS
During the financial year, the Company has given an indemnity or entered into an agreement to indemnify, or paid or agreed to pay
insurance premiums as follows:
The Company has paid premiums to insure each of the Directors and Company Officers against liabilities for costs and expenses
incurred by them in defending legal proceedings arising from their conduct while acting in the capacity of Director or Officer of the
Company other than conduct involving a wilful breach of duty in relation to the Company. The total premiums paid in this regard
amounted to $41,190.52.
The Company has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or
agreed to indemnify an officer or auditor of the Company against a liability incurred as such an Officer or auditor.
DIRECTORS’ MEETINGS
The following table sets out the number of Directors’ meetings (including meetings of Committees of Directors) held during the
financial year and the number of meetings attended by each Director (while they were a Director or Committee Member). During the
financial year, 14 Board meetings, 1 Remuneration and Nomination Committee meeting and 4 Audit and Risk Committee meetings
were held.
Directors
Board of Directors
Remuneration and
Nomination Committee
Audit and Risk Committee
Entitled to Attend
Attended
Entitled to Attend
Attended
Entitled to Attend
Attended
N.A. Mitchell
P.R Miller
R.B Douglas
N.M O'Connor
G.E. Moyle
14
14
14
8
-
NON-AUDIT SERVICES
14
13
14
8
-
-
-
1
1
-
-
-
1
1
-
1
-
4
3
-
1
-
4
3
-
There were no amounts paid or payable to the auditor for non-audit services provided during the year by the auditor. Refer to note 26
to the Financial Statements.
During the year ended 30 June 2016, the Company established an Executive Share and Option Plan (ESOP) as a mechanism to
incentivise and retain senior management personnel.
AUDITOR’S INDEPENDENCE DECLARATION
Pursuant to offers made under the ESOP, 16,362,395 options were granted to certain members of the Senior Management Team on
the following terms:
(a) Subject to the satisfaction of vesting conditions, each option entitles the holder to purchase one fully paid ordinary share
(b) The options will expire as specified in the offer – that is, the earlier of:
the date upon which it is deemed that the vesting conditions have not been met
the date upon which the employee ceases employment
i.
ii.
iii. seven years after vesting date.
Further details with regards to the ESOP are provided as part of the Remuneration Report on pages 12 to 16.
During the year ended 30 June 2016, there were no shares in Mitchell Services Limited issued on the exercise of options granted.
11
The Auditor’s Independence Declaration is included on page 24 of the Annual Report.
REMUNERATION REPORT
This Remuneration Report, which forms part of the Directors’ Report, sets out information about the remuneration of the Group’s
Key Management Personnel (KMP) for the financial year ended 30 June 2016. The term Key Management Personnel refers to those
persons having authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly,
including any Director (whether executive or otherwise) of the Group.
12
MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016DIRECTORS’ REPORT CONTINUEDFOR THE YEAR ENDED 30 JUNE 2016
Key Management Personnel
The Directors and other KMP of the Group during or since the end of the financial year were:
Nathan Andrew Mitchell (Executive Chairman)
Peter Richard Miller (Non-Executive Director)
Robert Barry Douglas (Non-Executive Director)
Neal Macrossan O’Connor (Non-Executive Director – appointed 21 October 2015)
Andrew Michael Elf (Chief Executive Officer)
Gregory Michael Switala (Chief Financial Officer and Company Secretary)
Remuneration Policy
The Remuneration Policy of the Group has been designed to align KMP objectives with shareholder and business objectives by
providing a fixed remuneration component and offering specific long-term incentives to key employees based on key performance
areas affecting the Group’s financial results. The Board believes the Remuneration Policy to be appropriate and effective in its ability
to attract and retain high quality KMP to run and manage the Group.
The Board’s policy for determining the nature and amount of remuneration for KMP of the Group is as follows:
The Board’s policy is to remunerate Non-Executive Directors at market rates for time, commitment and responsibilities. The
Remuneration and Nomination Committee determines payments to the Non-Executive Directors and reviews their remuneration
annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum
aggregate amount of fees that can be paid to Non-Executive Directors is subject to approval by shareholders at the Annual
General Meeting.
Relationship between the Remuneration Policy and Group performance
The Remuneration Policy has been tailored to align the pursuit of the growth and success of the Group between shareholders,
Directors and Executives. To achieve this aim, shares and options have been issued to specific Executives to encourage the
alignment of personal and shareholder interests. The Group believes this policy will assist in increasing shareholder wealth in
future years.
Employment details of members of Key Management Personnel
Andrew Michael Elf
Gregory Michael Switala
Notice Period
3 months
4 weeks
•
•
•
•
•
The remuneration policy is to be developed by the Remuneration and Nomination Committee and approved by the Board.
Professional advice may be sought from independent external consultants if required;
All KMP receive a base salary (which is based on factors such as length of service and experience), superannuation, and may
receive fringe benefits, options and performance incentives;
Any performance incentives will generally only be paid once predetermined key performance indicators have been met;
The performance criteria relating to incentives are aligned with the interests of the Group and therefore shareholders;
The employment terms and conditions of KMP are formalised in contracts of employment. A contracted person deemed employed on
a permanent basis may terminate their employment by providing the relevant notice period as outlined below.
Long-term employee benefits
During the year ended 30 June 2016, the Company established an Executive Share and Option Plan (ESOP).
KMP participate in the ESOP to align Directors’ and management’s interests with shareholders’ interests and to ensure that a
suitable mechanism is in place to assist in retaining and incentivising key Executives and Senior Managers.
The Remuneration and Nomination Committee reviews KMP packages annually by reference to the Group’s performance,
executive performance and comparable information from industry sectors.
The following shares issued and options granted pursuant to the ESOP during the 2016 financial year to KMP still exist at the date of
this report:
The performance of executive KMP is measured against criteria agreed annually based predominantly on the growth of the Group’s
profits and shareholder’s value and take into account critical safety and operational metrics
Any bonuses and incentives awarded must be linked to predetermined performance criteria. The Board may, however, exercise
its discretion in relation to approving incentives, bonuses and options, and can recommend changes to the Remuneration and
Nomination Committee’s recommendations. Any change must be justified by reference to measurable performance criteria. The
policy is designed to attract the highest calibre of Executives and Senior Managers and reward them for performance results leading
to long-term growth in shareholder wealth.
KMP receive a superannuation guarantee contribution required by the government, which is currently 9.5% of the individual’s
ordinary earnings, and do not receive any other retirement benefits. Some individuals have chosen to sacrifice part of their salary to
increase payments towards superannuation.
Upon retirement, KMP are paid employee benefit entitlements accrued to the date of retirement. KMP will receive redundancy
benefits if applicable. Any options not exercised before or on the date of termination of employment with the Group will lapse.
KMP
Award
Grant date
Granted in
FY2016
Fair value per
instrument at
grant date
Vested in
FY2016
Held at 30
June 2016
Exercisable
at 30 June
2016
Date award
may vest
Andrew Michael Elf
Options
23 May 2016
6,643,133
Gregory Michael
Switala
Shares
23 May 2016
1,995,531
Options
23 May 2016
4,581,471
Shares
23 May 2016
1,376,228
0.0074
0.0140
0.0074
0.0140
-
-
-
-
6,643,133
1,995,531
4,581,471
1,376,228
- 01 May 2018
- 01 May 2018
- 01 May 2018
- 01 May 2018
13
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MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016DIRECTORS’ REPORT CONTINUEDFOR THE YEAR ENDED 30 JUNE 2016
Pursuant to offers made under the ESOP, options were granted and shares were issued under the following major terms.
Remuneration of Key Management Personnel
The compensation of each member of the KMP of the Group is set out below:
In the case of the options:
(a) Subject to the satisfaction of vesting conditions*, each option entitles the holder to purchase one fully paid ordinary share.
(b) The options will expire as specified in the offer – that is, the earlier of:
the date upon which it is deemed that the vesting conditions have not been met
the date upon which the employee ceases employment
(i)
(ii)
(iii) seven years after vesting date.
(c) The exercise price is $0.0395 for each option.
(d) Options granted do not carry dividend or voting rights.
In the case of the shares:
(a) Shares issued under the ESOP are held by a designated Corporate Trustee subject to the satisfaction of vesting conditions*.
(b) Upon satisfaction of vesting conditions, shares will be issued for nil consideration.
* Subject to the discretion of the Board, the extent to which an employee’s shares or options will vest under the ESOP will be determined having regard to EBITDA
performance, share price, safety performance, operational performance and the relevant employees individual KPIs.
Fixed remuneration paid
Short-term
employee
benefits
Post-
employment
benefits
Termination
benefits
Non-
monetary
benefits
Long-term employee
benefits2
Salary
Superannuation
Motor
Vehicles1
Shares
Options
$
$
$
$
$
$
Nathan Andrew Mitchell
Executive Chairman
Peter Richard Miller
Non-Executive Director
Robert Barry Douglas
Non-Executive Director
Ralph Howard Craven
Former Non-Executive Director
Neal Macrossan O’Connor
Non-Executive Director
Andrew Michael Elf
Chief Executive Officer
Gregory Michael Switala
Chief Financial Officer and Company Secretary
Robert Ian Witty
Former Chief Financial Officer and Company Secretary
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
80,000
80,000
36,000
36,000
36,000
36,000
-
20,367
36,344
-
260,000
254,604
180,000
104,999
-
7,599
7,599
3,419
3,419
3,419
3,419
-
1,935
1,806
-
24,699
24,187
17,099
9,974
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
96,611
9,392
129,179
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14,902
14,861
4,200
4,744
-
-
1,414
2,353
-
975
-
-
-
-
1,623
-
-
-
1. The figures in this column relate to use of a Company motor vehicle to carry out duties as well as reasonable personal use. The amount included in the above remuneration table is the
value attributable to such personal use calculated in accordance with the statutory requirements of the Fringe Benefits Tax Act 1986.
2. The figures in these columns for share-based payments were not actually provided to the KMP during the financial year. These amounts are calculated in accordance with the Accounting
Standards and are the amortised AASB fair values of equity and equity-related instruments that have been granted to KMP. Refer to note 20 in the Notes to the Financial Statements.
15
16
MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016DIRECTORS’ REPORT CONTINUEDFOR THE YEAR ENDED 30 JUNE 2016
This Directors’ Report, incorporating the Remuneration Report, is signed in accordance with a resolution of Directors made pursuant
to section 298(2) of the Corporations Act 2001.
On behalf of the Directors
Nathan Andrew Mitchell
Executive Chairman
Dated at Brisbane this 30th day of August 2016
17
CORPORATE GOVERNANCE STATEMENT
FOR THE YEAR ENDED 30 JUNE 2016
The Board considers there to be a clear and positive
relationship between the creation and delivery of long-term
shareholder value and high-quality corporate governance.
Accordingly, in pursuing its objective, the Board has committed
to corporate governance arrangements that strive to foster
the values of integrity, respect, trust and openness amongst
and between the Board members, management, employees,
customers and suppliers.
Unless stated otherwise in this document, the Board’s corporate
governance arrangements comply with the recommendations of
the ASX Corporate Governance Council for the entire financial
year ended 30 June 2016.
1. Board of Directors
The full Board currently holds not less than 10 scheduled
meetings each year, plus strategy meetings and any
extraordinary meetings at such other times as may be
necessary to address any specific significant matters that
may arise.
The agenda for meetings is prepared by the Company
Secretary in conjunction with the Chairperson. Standing
items include the Chief Executive Officer report, People and
Risk report, Area Manager’s reports, Financial reports and
Commercial and Business Development reports. The Board
package is provided to all concerned in advance of meetings.
Executives are regularly involved in Board discussions and
Directors have other opportunities, including visits to business
operations, for contact with a wider group of employees.
1.1. Role of the Board
The Board’s primary role is the protection and enhancement of
long-term shareholder value.
The Company Secretary is accountable directly to the
Board, through the chair, on all matters to do with the proper
functioning of the Board.
To fulfil this role, the Board is responsible for the overall
corporate governance of the Group including formulating
its strategic direction, approving and monitoring capital
expenditure, setting remuneration, appointing, removing
and creating succession policies for Directors and Senior
Executives, establishing and monitoring the achievement
of management’s goals and ensuring the integrity of
risk management, internal control, legal compliance and
management information systems. It is also responsible for
approving and monitoring financial and other reporting.
The Board has delegated responsibility for operation and
administration of the Group to the Chief Executive Officer and
Executive Management. Responsibilities are delineated by
formal authority delegations.
1.2. Board processes
To assist in the execution of its responsibilities, the Board has
established 2 board committees which include Remuneration
and Nomination Committee and an Audit and Risk Committee.
Both committees have written charters which are reviewed on
a regular basis. The Board has also established a framework
for the management of the Group including a system of
internal control, a business risk management process and the
establishment of appropriate ethical standards.
1.3. Director and executive education
The Group has an informal induction process to educate new
Directors about the nature of the business, current issues, the
corporate strategy, the culture and values of the Group, and the
expectations of the Group concerning performance of Directors.
In addition, Directors are also educated regarding meeting
arrangements and Director interaction with each other, Senior
Executives and other stakeholders. Directors also have the
opportunity to visit Group facilities and meet with management
to gain a better understanding of business operations. Directors
are given access to continuing education opportunities to
update and enhance their skills and knowledge.
The Group also has an informal process to educate new senior
executives upon taking such positions. This involves reviewing
the Group’s structure, strategy, operations, financial position
and risk management policies.
Independent professional advice and access to
1.4.
Group information
Each Director has the right of access to all relevant Group
information and to the Group’s Executives and, subject to
prior consultation with the Chairman, may seek independent
professional advice from a suitably qualified adviser at the
Group’s expense. The Directors must consult with an adviser
suitably qualified in the relevant field and obtain the Chairman’s
18
MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016DIRECTORS’ REPORT CONTINUEDFOR THE YEAR ENDED 30 JUNE 2016
approval of the fee payable for the advice before proceeding
with the consultation. A copy of the advice received by the
Directors is made available to all other members of the Board.
1.5. Composition of the Board
The names of the Directors of the Company in office at the
date of this report together with their respective mix of skills,
experience and length of service are set out in the Directors’
Report on page 9 and 10 of this report.
The Group believes it is in its best interests to maintain a
small but efficient Board. On 20 October 2015 the Company
appointed Mr Neal O’Connor as Non-Executive Director.
Following Mr O’Connor’s appointment, the Board consisted of
3 Non-executive Directors (being Peter Miller, Robert Douglas
and Neal O’Connor) and Executive Chairman, Nathan Mitchell.
As at the date of this report two of the four board members
are considered independent, being Robert Douglas and
Neal O’Connor.
The Executive Chairman is Mr Nathan Mitchell. Under
the guidelines, Mr Mitchell does not meet the criteria for
independence as he is a Director of a substantial shareholder.
Peter Richard Miller is also a substantial shareholder and does
not meet the criteria for independence. Under the guidelines,
the majority of the Board should be independent as should the
Chair. All Directors are committed to bringing their independent
views and judgement to the Board and, in accordance with the
Corporations Act 2001, must inform the Board if they have any
interest that could conflict with those of the Group. Where the
Board considers that a conflict exists, the Director concerned
will not be present at the meeting while the item is considered.
For these reasons, the Board believes that each of these
Directors may be considered to be acting independently in the
execution of their duties.
The Board considers the mix of skills and the diversity of
Board members when assessing the composition of the Board.
The Board assesses existing and potential Directors’ skills to
ensure they have appropriate industry expertise in the Group’s
business operations. The Board undertakes appropriate checks
before appointing a person as a Director and provides security
holders with all material information relevant to a decision on
whether or not to elect a Director. The Board’s policy is to seek
a diverse range of Directors who have a range of skills, ages,
genders and ethnicity that complements the environment in
19
which the Group operates and having due regard to the current
size of the Group (refer section 8 below on skills and diversity).
2. Remuneration and Nomination Committee
Under the principles and recommendations of the ASX
Corporate Governance Council, the Remuneration and
Nomination Committee should consist of at least 3 members,
each of whom should be Non-Executive Directors. Given the
relatively small size of the Board, the Directors are of the
opinion that 2 members are sufficient to properly discharge the
duties of the committee. The Chairman of the Committee should
be an independent Director. The Committee has 2 distinct roles
as follows:
•
•
Remuneration related matters; and
Nomination related matters.
The members of the Remuneration and Nomination Committee
during the year were:
• Mr Neal Macrossan O’Connor – Chairman and Non-
Executive Director
• Mr Robert Barry Douglas – Non-Executive Director and
former Chairman
Mr Neal O’Connor was appointed Chairman of the Committee
on 21 October 2015. Whilst remaining on the Committee,
Mr Robert Douglas resigned as Chairman following
Mr O’Connor’s appointment.
All Directors are invited to Remuneration and Nomination
Committee meetings at the discretion of the Committee. The
Committee met once during the year and Committee members’
attendance record is disclosed in the table of Directors’
meetings on page 12 of this report.
Remuneration related matters
The Committee assists the Board in the general application
of the remuneration policy. In doing so, the Committee is
responsible for:
•
•
Developing remuneration policies for Directors and Key
Management Personnel;
Reviewing Key Management Personnel packages annually
and, based on these reviews, making recommendations
to the Board on remuneration levels for Key Management
Personnel; and
Assisting the Board in reviewing Key Management
Personnel performance annually.
•
Executive Directors and Senior Executives are remunerated
by way of salary, non-monetary benefits and statutory
superannuation in accordance with written agreements that set
out the terms of their appointments. Non-Executive Directors
are remunerated by way of salary and statutory superannuation.
There are no schemes for retirement benefits for Directors other
than statutory superannuation arrangements for Non-Executive
Directors. Further disclosure on the policies and practices
regarding remuneration is contained in the Remuneration
Report of this Annual Report.
in relation to the external audit function, accounting policies,
financial reporting, funding, financial risk management,
business risk monitoring and insurance.
The members of the Audit and Risk Committee during the
year were:
• Mr Neal Macrossan O’Connor – Chairman and Non-
Executive Director
• Mr Robert Barry Douglas – Non-Executive Director and
former Chairman
Mr Neal O’Connor was appointed Chairman of the Committee
on 21 October 2015. Whilst remaining on the Committee,
Mr Robert Douglas resigned as Chairman following
Mr O’Connor’s appointment.
Nomination related matters
The Committee assists the Board in ensuring that the Board
comprises Directors with a range and mix of attributes
appropriate for achieving its objective. The Committee does
this by:
The external auditors and the Chief Executive Officer are invited
to Audit and Risk Committee meetings at the discretion of the
Committee. The Committee met 3 times during the year and
Committee members’ attendance record is disclosed in the
table of Directors’ meetings on page 12 of this report.
• Overseeing the appointment and induction process
•
for Directors;
Reviewing the skills and expertise of Directors and
identifying potential deficiencies;
Identifying suitable candidates for the Board;
•
• Overseeing Board and Directors reviews on an annual
•
basis; and
Establishing succession planning arrangements for the
Executive team.
The Chief Executive Officer and the Chief Financial Officer
declared in writing to the Board that the financial records of the
Group for the financial year have been properly maintained, the
Group’s financial reports for the financial year ended 30 June
2016 comply with accounting standards and present a true
and fair view of the Group’s financial condition and operational
results and that the opinion has been formed on the basis of a
sound system of risk management and internal control which is
operating effectively. This statement is required annually.
3. Audit and Risk Committee
4. Performance evaluation
The Audit and Risk Committee has a documented
charter, approved by the Board. Under the principles and
recommendations of the ASX Corporate Governance Council,
the Committee should consist of at least 3 members, each of
whom should be Non-Executive Directors. Given the relatively
small size of the Board, the Directors are of the opinion that
2 members are sufficient to properly discharge the duties
of the Committee for the present time. The Chairman of the
Committee should be an independent Director and should not
be Chairman of the Board. The purpose of the Committee is to
assist the Board in the effective discharge of its responsibilities
The Remuneration and Nomination Committee is required
to annually review the effectiveness of the functioning of
the Board, its committees, individual Directors and Senior
Executives through internal peer review.
5. Risk management
The Board considers identification and management of key
risks associated with the business as vital to creating and
delivering long-term shareholder value.
20
MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016CORPORATE GOVERNANCE STATEMENT CONTINUEDFOR THE YEAR ENDED 30 JUNE 2016 The main risks that could negatively impact on the performance
of the Group’s business activities include:
•
•
•
•
Safety of our people and our contractors;
Seasonal conditions and business interruptions;
Dependence on key personnel and labour shortages;
Customer demand and outlook for the resources industry.
An assessment of the business’s risk profile is undertaken and
reviewed by the Board annually, covering all aspects of the
business from the operational level through to strategic level
risks. Executive management has been delegated the task of
implementing internal controls to identify and manage risks for
which the Board provides oversight. The effectiveness of these
controls is monitored and reviewed regularly by management.
Executive management has reported on an ongoing basis (via
monthly board meetings) to board as to whether the Group’s
business risks have been effectively managed.
In addition to their regular reporting on business risks, risk
management and internal control systems, the Chief Executive
Officer and Chief Financial Officer have provided assurance, in
writing to the Board:
•
•
That the financial reporting risk management and
associated compliance and controls have been assessed
and found to be operating effectively; and
The Group’s financial reports are founded on a sound
system of risk management and internal compliance
and control.
The Board is responsible for the overall internal control
framework, but recognises that no cost-effective internal control
system will preclude all errors and irregularities. In the absence
of an internal audit function, comprehensive practices have
been established to ensure:
Capital expenditure and revenue commitments above a
certain size obtain prior Board approval;
Financial exposures are controlled;
Health and safety standards and management systems
are monitored and reviewed to achieve high standards of
performance and compliance with regulations;
Business transactions are properly authorised
and executed;
The quality and integrity of personnel;
•
•
•
•
•
21
•
•
Financial reporting accuracy and compliance with the
financial reporting regulatory framework. Monthly actual
results are reported against budgets approved by the
Directors and revised forecasts for the year are prepared
regularly; and
Regulation compliance. The Group’s health, safety,
environment and sustainability obligations are monitored
by all members of the Board.
6. Ethical standards
All Directors, managers and employees are expected to act
with the utmost integrity and objectivity, striving at all times to
enhance the reputation and performance of the Group. Every
employee has a nominated supervisor to whom they may refer
any issues arising from their employment. The Board reviews
its Code of Conduct and Ethics regularly and processes are in
place to promote and communicate these policies.
Conflict of interest
Directors must keep the Board advised, on an on-going basis,
of any interest that could potentially conflict with those of the
Group. The Board has developed procedures to assist Directors
to disclose potential conflicts of interest.
Where the Board believes that a conflict exists the Director
concerned will not be present at the meeting while the item is
considered. Details of Director related entity transactions with
the Group are set out in note 24 to the financial statements.
Code of conduct
The Group has advised each Director, manager and employee
that they must comply with the Group’s Code of Conduct and
Ethics. The code requires all Directors, management and
employees to at all times with all relevant stakeholders:
•
•
•
•
•
•
Act honestly and in good faith;
Exercise due care and diligence in fulfilling the functions of
office;
Avoid conflicts and make full disclosure of any possible
conflict of interest;
Comply with both the letter and spirit of the law;
Encourage the reporting and investigation of unlawful and
unethical behaviour; and
Comply with the share trading policy.
Share trading policy
The Share Trading Policy restricts Directors and employees
from acting on price sensitive information (which is not available
to the public) until it has been released to the market and
adequate time has been given for this to be reflected in the
company’s share price.
•
•
Directors and other Key Management Personnel are also
prohibited from trading during closed periods. Closed periods
are periods other than 6 weeks commencing from:
•
•
•
The release of the Group’s annual result to the ASX;
The release of the Group’s half-yearly result to the ASX;
and
The date of the Annual General Meeting.
7. Communication with shareholders
The Board provides shareholders with information using a
comprehensive Continuous Disclosure Policy and investor
relations program which includes identifying matters that may
have a material effect on the price of the Company’s shares and
notifying them to the ASX.
In summary, the Continuous Disclosure Policy operates as
follows:
•
•
•
•
The Company Secretary (also the Chief Financial
Officer) and the Chief Executive Officer are responsible
for interpreting the Group’s policy and where necessary
informing the Board. The Company Secretary is
responsible for all communications with the ASX. Such
matters are advised to the ASX after they are discovered
but are referred to the Board in the first instance.
The full Annual Report is provided via the Company’s
website to all shareholders (unless a shareholder has
specifically requested to receive a physical copy or not
to receive the document). It provides relevant information
about the operations of the Group during the year, changes
in the state of affairs and details of future developments.
The half-yearly report contains summarised financial
information and a review of the operations of the Group
during the period. The half-year reviewed financial report
is lodged with the ASX and sent to any shareholder who
requests it.
Proposed major changes in the Group which may impact
on share ownership rights are submitted to a vote of
shareholders.
All announcements made to the market can be accessed
via the company’s website after they have been released
to the ASX.
The external auditor attends the Annual General
Meetings to answer questions concerning the conduct
of the audit, the preparation and content of the auditor’s
report, accounting policies adopted by the Group and the
independence of the auditor in relation to the conduct of
the audit.
The Board encourages full participation of shareholders at the
Annual General Meeting, to ensure a high level of accountability
and identification with the Group’s strategy and goals. Important
issues are presented to the shareholders as single resolutions.
8. Skills and diversity
Diversity
The Company has an established Equity and Diversity Policy
relating to its Board Members, Senior Executives and across
the whole organisation with an objective to recruit and manage
on the basis of qualification for the position and performance;
regardless of gender, age, nationality, race, religious beliefs,
cultural background or sexuality.
In summary, the Equity and Diversity Policy operates as follows:
The Company has zero tolerance toward discrimination.
To achieve this, we are committed to:
•
•
•
•
•
Ensuring a working environment that is free of all forms
of harassment.
Valuing the diversity among our employees, and all those
with whom we do business.
Conducting business activities such as the hiring,
promotion, and compensation of employees without
regard to race, colour, religion, gender, gender identity or
expression, sexual orientation, national origin, genetics,
disability, or age.
The employment and development of Indigenous
employees in all the countries where we operate.
Complying with all applicable legislative requirements.
22
MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016CORPORATE GOVERNANCE STATEMENT CONTINUEDFOR THE YEAR ENDED 30 JUNE 2016 To achieve this, we will:
•
•
•
Adhere to the Company Code of Conduct and be guided by the Company’s Values.
Recruit a diverse range of people with a diverse range of talents to help us achieve our goals.
Employ the best person for the job regardless of race, colour, religion, gender, gender identity or expression, sexual orientation,
national origin, genetics, disability, or age.
Select on the principles of merit and fairness in all employment practices.
Ensure that all reports of workplace discrimination are treated seriously, promptly and fairly with due regard to the principals of
procedural fairness, natural justice and confidentiality.
Take appropriate action against individuals engaging in discriminatory conduct.
Build relationships and promote opportunities for Indigenous peoples throughout all of our operations, while encouraging
cultural awareness and respect amongst our staff.
•
•
•
•
• Make confidential counselling and support available to employees to as assist with any workplace issues that may arise.
The proportion of women employees in the whole organisation is detailed below:
Women on the Board
Women in senior management roles1
Women employees in the Group
2016
2015
No.
-
1
7
%
-
14.29
4.76
No.
-
-
4
%
-
-
3.33
AUDITOR’S INDEPENDENCE DECLARATION
FOR THE YEAR ENDED 30 JUNE 2016
Auditors Independence Declaration under Section 307C of the Corporations Act 2001 to the Directors of Mitchell
Services Limited
As lead engagement auditor for the review of Mitchell Services Limited for the period ended 30 June 2016, I declare that, to the best
of my knowledge and belief, there have been:
no contraventions of independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
(i)
(ii)
Jessups
1. The Company has defined senior management roles as those roles which are responsible for a key business function and that report directly to either the Chief Executive Officer or Chief
Financial Officer.
Rodger Dunstan
Partner
Skills matrix
The Company aims to maintain a diverse, multi-skilled Board with a range of different skills and expertise. At a minimum, these skills
and expertise include:
•
•
•
•
•
•
•
•
•
Capital management and corporate finance experience
Experience at both executive and non-executive levels
An understanding of the drilling industry and mining services sector
Exceptional leadership skills
Experience in workplace health and safety
An understanding of technological advances in the mining services industry
Financial acumen and strategic capabilities
Environment and sustainability experience
An understanding of risk management
Dated this day the 17th August 2016
Level 1, 19 Stanley Street
TOWNSVILLE QLD 4810
23
24
MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016CORPORATE GOVERNANCE STATEMENT CONTINUEDFOR THE YEAR ENDED 30 JUNE 2016 CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2016
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 30 JUNE 2016
Continuing operations
Revenue
Gain/(loss) on sale of assets
Advertising
Drilling consumables
Employee and contract labour expenses
Fuel and oil
Freight and couriers
Hire of plant and equipment
Insurances
Legal and consultant fees
Rent
Service and repairs
Travel expenses
Other expenses
EBITDA
Change in fair value of investment property
Impairment of goodwill
Depreciation expense
EBIT
Finance expenses
Profit/(loss) before tax
Income tax expense
Profit/(loss) for the period from continuing operations
Discontinued operations
Profit/(loss) for the period from discontinued operations
Profit/(loss) for the period
Other comprehensive income, net of income tax
Other comprehensive income for the period, net of income tax
Total comprehensive income for the period
Profit attributable to:
Owners of the parent
Total comprehensive income attributable to:
Owners of the parent
Earnings per share
From continuing and discontinued operations
Basic (cents per share)
Diluted (cents per share)
From continuing operations
Basic (cents per share)
Diluted (cents per share)
25
Note
2 & 3
3
15
28
28
28
28
2016
$
2015
$
32,970,247
(31,279)
(31,583)
(5,624,283)
(16,810,104)
(1,056,296)
(603,461)
(1,422,765)
(707,452)
(551,150)
(590,090)
(1,946,706)
(1,801,799)
(1,270,881)
522,398
-
-
(5,317,026)
(4,794,628)
(1,254,203)
(6,048,831)
-
(6,048,831)
25,174,687
(713,310)
(67,229)
(4,495,425)
(13,254,828)
(1,975,127)
(913,405)
(1,608,672)
(499,588)
(146,249)
(392,253)
(2,860,539)
(1,367,977)
(1,202,532)
(4,322,447)
(414,282)
(4,481,519)
(3,429,323)
(12,647,571)
(526,579)
(13,174,150)
(3,825,333)
(16,999,483)
-
-
(6,048,831)
(16,999,483)
-
-
(6,048,831)
(16,999,483)
(6,048,831)
(16,999,483)
(6,048,831)
(16,999,483)
(0.43)
(0.43)
(0.43)
(0.43)
(2.20)
(2.20)
(2.20)
(2.20)
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Right to purchase assets
Other assets
Inventories
Total current assets
Non-current assets
Other financial assets
Property, plant and equipment
Investment property
Other assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Bank overdraft
Trade and other payables
Other financial liabilities
Provisions
Total current liabilities
Non-current liabilities
Other financial liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Issued capital
Share issue costs
Contingent option reserve
Retained earnings
Total equity
Note
4(a)
5
6
7
8
6
13
14
7
4(b)
10
11
12
11
12
17
18
19
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements.
2016
$
2015
$
468,973
6,107,742
981
-
461,808
1,335,189
8,374,693
281
27,275,611
2,975,000
18,000
30,268,892
38,643,585
600,088
4,795,263
2,154,437
726,271
8,276,059
12,274,422
121,534
12,395,956
20,672,015
17,971,570
48,604,378
(2,514,522)
2,122,402
(30,240,688)
17,971,570
515,679
7,148,908
3,724
16,125,000
440,156
1,869,518
26,102,985
3,195
18,286,816
2,975,000
18,000
21,283,011
47,385,996
1,130,013
24,587,154
2,293,225
367,360
28,377,752
3,655,853
97,963
3,753,816
32,131,568
15,254,428
39,219,134
(1,922,724)
2,122,402
(24,164,384)
15,254,428
26
MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2016
CONSOLIDATED STATEMENT OF OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2016
Note
Issued
Capital
Contingent
Option
Reserve
Retained
Earnings
Attributable
to Owners
of the Parent
Total
$
$
$
$
$
Balance at 1 July 2014
17,824,156
2,122,402
(7,135,246)
12,811,312
12,811,312
Comprehensive income
Profit/(loss) for the period
Other comprehensive income for the period
Total comprehensive income for the period
Issue of ordinary shares related to rights issue
Share issue costs
Recognition of share-based payments
Balance at 30 June 2015
Comprehensive income
Profit/(loss) for the period
Other comprehensive income for the period
Total comprehensive income for the period
Issue of ordinary shares
Share issue costs
Recognition of share-based payments
19
19
17
18
20
-
-
-
20,195,034
(722,780)
-
-
-
-
-
-
-
(16,999,483)
(16,999,483)
(16,999,483)
-
-
-
(16,999,483)
(16,999,483)
(16,999,483)
-
-
20,195,034
20,195,034
(722,780)
(722,780)
(29,655)
(29,655)
(29,655)
37,296,410
2,122,402
(24,164,384)
15,254,428
15,254,428
-
-
-
9,385,244
(591,798)
-
-
-
-
-
-
-
(6,048,831)
(6,048,831)
(6,048,831)
-
-
-
(6,048,831)
(6,048,831)
(6,048,831)
-
-
9,385,244
9,385,244
(591,798)
(591,798)
(27,473)
(27,473)
(27,473)
Balance at 30 June 2016
46,089,856
2,122,402
(30,240,688)
17,971,570
17,971,570
Note
2016
$
2015
$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Income tax paid
Net cash provided by/(used in) operating activities
21
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment
Payment for other property, plant and equipment
Net cash provided by/(used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Payments for share issue costs
Proceeds from borrowings
Repayment of borrowings
Net cash provided by/(used in) financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
4(c)
32,142,839
(31,852,086)
4,426
(360,900)
-
(65,721)
6,251,012
(18,811,975)
(12,560,963)
8,535,244
(591,798)
8,500,000
(3,333,543)
13,109,903
483,219
(614,334)
(131,115)
21,669,432
(25,822,159)
52,706
(498,287)
(117,767)
(4,716,075)
551,916
(11,992,763)
(11,440,847)
20,195,034
(1,032,542)
1,282,532
(2,775,739)
17,669,285
1,512,363
(2,126,697)
(614,334)
27
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements.
28
MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
1. SIGNIFICANT ACCOUNTING POLICIES
(a) General information
Mitchell Services Ltd (Company) is a limited company
incorporated in Australia. The addresses of its registered office
and principal place of business are disclosed in the Corporate
Directory of this Annual Report. The principal activities of the
Company and its subsidiaries (Group) involve the provision of
exploration and mine site drilling services to the mining industry.
(b) Statement of compliance
These financial statements are general purpose financial
statements which have been prepared in accordance with
the Corporations Act 2001, Accounting Standards and
Interpretations, and comply with other requirements of the law.
The financial statements comprise the consolidated financial
statements of the Group. For the purposes of preparing
the consolidated financial statements, the Company is a
for-profit entity.
Accounting Standards include Australian Accounting Standards.
Compliance with Australian Accounting Standards ensures that
the financial statements and notes of the Group comply with
International Financial Reporting Standards (IFRS).
The financial statements were authorised for issue by the
Directors on the date shown in the Directors’ Declaration.
(c) Basis of preparation
The consolidated financial statements have been prepared
on the basis of historical cost, except for certain non-current
assets and financial instruments that are measured at re-valued
amounts or fair values, as explained in the accounting policies
below. Historical cost is generally based on the fair values of
the consideration given in exchange for assets. All amounts are
presented in Australian dollars, unless otherwise noted.
(d) Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the
Company (its subsidiaries). Control is achieved where the
Company has the power to govern the financial and operating
policies of an entity so as to obtain benefits from its activities.
Income and expense of subsidiaries acquired or disposed of
during the year are included in the consolidated statement
of profit or loss and other comprehensive income from the
effective date of acquisition and up to the effective date of
disposal, as appropriate. Total comprehensive income of
subsidiaries is attributed to the owners of the Company.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring their accounting policies into
line with those used by other members of the Group.
All intra-group transactions, balances, income and expenses
are eliminated in full on consolidation.
Changes in the Group’s ownership interests in subsidiaries
that do not result in the Group losing control are accounted for
as equity transactions. The carrying amounts of the Group’s
interest’s and the non-controlling interests are adjusted to reflect
the changes in their relative interests in the subsidiaries. Any
difference between the amount by which the non-controlling
interests are adjusted and the fair value of the consideration
paid or received is recognised directly in equity and attributed to
owners of the Company.
When the Group loses control of a subsidiary, a gain or loss is
recognised in profit or loss and is calculated as the difference
between (i) the aggregate of the fair value of the consideration
received and the fair value of any retained interest and (ii) the
previous carrying amount of the assets (including goodwill),
and liabilities of the subsidiary and any non-controlling interests.
When assets of the subsidiary are carried at re-valued
amounts or fair values and the related cumulative gain or loss
has been recognised in other comprehensive income and
accumulated in equity, the amounts previously recognised in
other comprehensive income and accumulated in equity are
accounted for as if the Group had directly disposed of the
relevant assets (i.e. reclassified to profit or loss or transferred
directly to retained earnings as specified by applicable
Standards).
The fair value of any investment retained in the former
subsidiary at the date when control is lost is regarded as the
fair value on initial recognition for subsequent accounting
under AASB 139 “Financial Instruments: Recognition
and Measurement” or, when applicable, the cost on initial
recognition of an investment in an associate or jointly
controlled entity.
(e) Business combinations
Business combinations are accounted for using the acquisition
method as at the acquisition date (i.e. when control is
transferred to the Group). Control is the power to govern the
financial and operating policies of an entity so as to obtain
benefits from its activities.
The Group measures goodwill at the acquisition date as:
•
•
•
•
the fair value of the consideration transferred; plus
the recognised amount of any non-controlling interests in
the acquiree; plus
if the business combination is achieved in stages, the fair
value of the existing equity interest in the acquiree; less
the net recognised amount (generally fair value) of the
identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is
recognised immediately in profit or loss.
(f) Goodwill and impairment
Goodwill arising on an acquisition of a business is carried at
cost as established at the date of the acquisition of the business
less accumulated impairment losses, if any.
For the purpose of impairment testing, goodwill is allocated to
each of the Group’s cash-generating units (or groups of cash-
generating units) that is expected to benefit from the synergies
of the combination.
A cash-generating unit to which goodwill has been allocated is
tested for impairment annually, or more frequently when there
is an indication that the unit may be impaired. If the recoverable
amount of the cash-generating unit is less than its carrying
amount, the impairment loss is allocated first to reduce the
carrying amount of any goodwill allocated to the unit and then
to the other assets of the unit pro rata based on the carrying
amount of each asset in the unit. Any impairment loss
for goodwill is recognised directly in profit or loss. An
impairment loss recognised for goodwill is not reversed in
subsequent periods.
On disposal of the relevant cash-generating unit, the
attributable amount of goodwill is included in the determination
of the profit or loss on disposal.
(g) Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable. Amounts disclosed as revenue are
net of returns, trade allowances and amounts collected on
behalf of third parties. The Group recognises revenue when
the amount of revenue can be reliably measured, it is probable
that economic benefits will flow to the entity and specific criteria
have been met for each of the Group’s activities as described
below. The amount of revenue is not considered to be reliably
measureable until all contingencies relating to the sale have
been resolved.
Revenue is recognised for the major business activities
as follows:
Drilling revenue
Drilling revenue is derived from the depth and type of drilling
and the hours worked on the specific site.
Interest income
Interest income from a financial asset is recognised when it
is probable that the economic benefits will flow to the Group
and the amount of revenue can be measured reliably. Interest
income is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable, which
is the rate that exactly discounts estimated future cash receipts
through the expected life of the financial asset to that asset’s
net carrying amount on initial recognition.
Other revenue is recognised when the right to receive the
revenue has been established.
All revenue is stated net of the amount of goods and services
tax (GST).
(h) Leases
Leases are classified as finance leases whenever the terms
of the lease transfer substantially all the risks and rewards
of ownership to the lessee. All other leases are classified as
operating leases.
29
30
MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016 Assets held under finance leases are initially recognised as
assets of the Group at their fair value at the inception of the
lease or, if lower, at the present value of the minimum lease
payments. The corresponding liability to the lessor is included in
the statement of financial position as a finance lease obligation.
Lease payments are apportioned between finance expenses
and reduction of the lease obligation so as to achieve a
constant rate of interest on the remaining balance of the liability.
Finance expenses are recognised immediately in profit or loss,
unless they are directly attributable to qualifying assets, in
which case they are capitalised in accordance with the Group’s
general policy on borrowing costs. Contingent rentals are
recognised as expenses in the periods in which they
are incurred.
Operating lease payments are recognised as an expense
on a straight-line basis over the lease term, except where
another systematic basis is more representative of the time
pattern in which economic benefits from the leased asset are
consumed. Contingent rentals arising under operating leases
are recognised as an expense in the period in which they
are incurred.
In the event that lease incentives are received to enter into
operating leases, such incentives are recognised as a liability.
The aggregate benefit of incentives is recognised as a reduction
of rental expense on a straight-line basis, except where another
systematic basis is more representative of the time pattern in
which economic benefits from the leased asset are consumed.
(i) Employee benefits
A liability is recognised for benefits accruing to employees in
respect of wages and salaries, annual leave and long service
leave when it is probable that settlement will be required and
they are capable of being measured reliably.
Liabilities recognised in respect of short-term employee
benefits, are measured at their nominal values using the
remuneration rate expected to apply at the time of settlement.
Liabilities recognised in respect of long term employee benefits
are measured as the present value of the estimated future
cash outflows to be made by the Group in respect of services
provided by employees up to reporting date.
31
Payments to defined contribution plans are recognised as an
expense when employees have rendered service entitling them
to the contributions.
Income taxes
(j)
The Company and its wholly-owned Australian resident entities
are part of a tax-consolidated group. As a consequence, all
members of the tax-consolidated group are taxed as a single
entity. The head entity within the tax-consolidated group is
Mitchell Services Ltd.
Income tax expense represents the sum of the tax currently
payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from profit before tax as reported
in the consolidated statement of profit or loss and other
comprehensive income because of items of income or expense
that are taxable or deductible in other years and items that are
never taxable or deductible. The Group’s liability for current
tax is calculated using tax rates that have been enacted or
substantively enacted by the end of the reporting period.
Deferred tax
Deferred tax is recognised on temporary differences between
the carrying amounts of assets and liabilities in the consolidated
financial statements and the corresponding tax bases used
in the computation of taxable profit. Deferred tax liabilities are
generally recognised for all taxable temporary differences.
Deferred tax assets are generally recognised for all deductible
temporary differences to the extent that it is probable that
taxable profits will be available against which those deductible
temporary differences can be utilised. Such deferred tax assets
and liabilities are not recognised if the temporary difference
arises from goodwill or from the initial recognition (other than
in a business combination) of other assets and liabilities in
a transaction that affects neither the taxable profit nor the
accounting profit.
The carrying amount of deferred tax assets is reviewed at the
end of each reporting period and reduced to the extent that it is
no longer probable that sufficient taxable profits will be available
to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates
that are expected to apply in the period in which the liability is
settled or the asset realised, based on tax rates (and tax laws)
that have been enacted or substantively enacted by the end of
the reporting period. The measurement of deferred tax assets
and liabilities reflects the tax consequences that would follow
from the manner in which the Group expects, at the end of the
reporting period, to recover or settle the carrying amount of its
assets and liabilities.
Deferred tax liabilities and assets are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes
levied by the same taxation authority and the Group intends to
settle its current tax assets and liabilities on a net basis.
Current and deferred tax for the year
Current and deferred tax are recognised in profit or loss,
except when they relate to items that are recognised in other
comprehensive income or directly in equity, in which case
the current and deferred tax are also recognised in other
comprehensive income or directly in equity, respectively. Where
current tax or deferred tax arises from the initial accounting
for a business combination, the tax effect is included in the
accounting for the business combination.
recognised in profit or loss.
Subsequent expenditure is capitalised only when it is probable
that future economic benefits associated with the expenditure
will flow to the Group. On-going repairs and maintenance are
expensed as incurred.
Depreciation
Items of property, plant and equipment are depreciated from the
date that they are installed and are ready for use, or in respect
of internally constructed assets, from the date that the asset is
completed and ready for use.
Depreciation is calculated to write off the cost of property,
plant and equipment using both the diminishing value basis or
straight-line basis over their estimated useful lives. Depreciation
is generally recognised in profit or loss. Leased assets are
depreciated over the shorter of the lease term and their
useful lives unless it is reasonably certain that the Group will
obtain ownership by the end of the lease term. Land is not
depreciated.
The depreciation rates used for the current and comparative
years of significant items of property, plant and equipment are
as follows:
(k) Property, plant and equipment
Recognition and measurement
Items of property, plant and equipment are measured at
cost less accumulated depreciation and accumulated
impairment losses.
Classes of Fixed Asset
2.5%
Buildings
6.67% - 40%
Plant & Equipment
Motor Vehicles
12.50% - 50%
Office Equipment, Furniture & Fittings 10% - 67.67%
Cost includes expenditure that is directly attributable to the
acquisition of the asset. The cost of self-constructed assets
includes the cost of materials and direct labour and any other
costs directly attributable to bringing the assets to a working
condition for their intended use.
Where parts of an item of property, plant and equipment have
different useful lives, they are accounted for as separate items
(major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and
equipment (calculated as the difference between the net
proceeds from disposal and the carrying amount of the item) is
Depreciation methods and useful lives are reviewed at each
reporting date and adjusted if appropriate.
Impairment of property, plant and equipment
At the end of each reporting period, the Group reviews the
carrying amounts of its tangible assets to determine whether
there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the
extent of the impairment loss (if any). When it is not possible
to estimate the recoverable amount of an individual asset,
the Group estimates the recoverable amount of the cash-
generating unit to which the asset belongs. When a reasonable
32
MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFOR THE YEAR ENDED 30 JUNE 2016
and consistent basis of allocation can be identified, corporate
assets are also allocated to individual cash-generating units,
or otherwise they are allocated to the smallest group of
cash-generating units for which a reasonable and consistent
allocation basis can be identified.
Recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the
asset for which the estimates of future cash flows have
not been adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to
its recoverable amount. An impairment loss is recognised
immediately in profit or loss, unless the relevant asset is carried
at a re-valued amount, in which case the impairment loss is
treated as a revaluation decrease.
When an impairment loss subsequently reverses, the carrying
amount of the asset (or cash-generating unit) is increased to
the revised estimate of its recoverable amount, but so that the
increased amount does not exceed the carrying amount that
would have been determined had no impairment loss been
recognised for the asset (or cash-generating unit) in prior years.
A reversal of an impairment loss is recognised immediately in
profit or loss, unless the relevant asset is carried at a re-valued
amount, in which case the reversal of the impairment loss is
treated as a revaluation increase.
Inventories
(l)
Inventories are stated at the lower of cost and net realisable
value. Costs of inventories are determined on first-in-first-out
basis. Net realisable value represents the estimated selling
price for inventories less all estimated costs of completion and
costs necessary to make the sale. The cost of manufactured
products includes direct materials, direct labour and an
appropriate portion of variable and fixed overheads. Overheads
are applied on the basis of normal operating capacity. Costs are
assigned on the basis of weighted average costs.
33
(m) Provisions
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past event, it
is probable that the Group will be required to settle the
obligation, and a reliable estimate can be made of the amount
of the obligation.
The amount recognised as a provision is the best estimate of
the consideration required to settle the present obligation at the
end of the reporting period, taking into account the risks and
uncertainties surrounding the obligation. When a provision is
measured using the cash flows estimated to settle the present
obligation, its carrying amount is the present value of those
cash flows (where the effect of the time value of money
is material).
When some or all of the economic benefits required to settle
a provision are expected to be recovered from a third party,
a receivable is recognised as an asset if it is virtually certain
that reimbursement will be received and the amount of the
receivable can be measured reliably.
(n) Financial instruments
Financial assets
The only category of financial assets held by the Group relates
to “loans and receivables”.
Loans and receivables
Loans and receivables comprise cash and cash equivalents
and, trade and other receivables. The Group initially recognises
loans and receivables on the date that they are originated.
Loans and receivables are financial assets with fixed or
determinable payments that are not quoted in an active market.
Such assets are recognised initially at fair value plus any
directly attributable transaction costs. Subsequent to initial
recognition, loans and receivables are measured at amortised
cost using the effective interest method, less any
impairment losses.
Amortised cost is the amount at which the financial asset or
financial liability is measured at initial recognition less principal
repayments and any reduction for impairment, and adjusted
for any cumulative amortisation of the difference between that
initial amount and the maturity amount calculated using the
effective interest method.
The effective interest method is used to allocate interest
income or interest expense over the relevant period and is
equivalent to the rate that discounts estimated future cash
payments or receipts (including fees, transaction costs and
other premiums or discounts) over the expected life (or when
this cannot be reliably predicted, the contractual term) of the
financial instrument to the net carrying amount of the financial
asset or financial liability. Revisions to expected future net cash
flows will necessitate an adjustment to the carrying value with a
consequential recognition of an income or expense item in
profit or loss.
Impairment of financial assets
The Group’s financial assets are assessed for indicators of
impairment at the end of each reporting period. Financial assets
are considered to be impaired when there is objective evidence
that, as a result of one or more events that occurred after the
initial recognition of the financial asset, the estimated future
cash flows of the financial asset have been affected.
For financial assets carried at amortised cost, objective
evidence of impairment may include: indications that the
debtors or a group of debtors are experiencing significant
financial difficulty, default or delinquency in interest or principal
payments; indications that they will enter bankruptcy or other
financial reorganisation; and changes in arrears or economic
conditions that correlate with defaults.
For financial assets carried at amortised cost, the amount of
the impairment loss recognised is the difference between the
asset’s carrying amount and the present value of estimated
future cash flows, discounted at the financial asset’s original
effective interest rate.
The carrying amount of the financial asset is reduced by
the impairment loss directly for all financial assets with the
exception of trade receivables, where the carrying amount
is reduced through the use of an allowance account. When
a trade receivable is considered uncollectable, it is written
off against the allowance account. Subsequent recoveries
of amounts previously written off are credited against the
allowance account. Changes in the carrying amount of the
allowance account are recognised in profit or loss.
For financial assets measured at amortised cost, if, in a
subsequent period, the amount of the impairment loss
decreases and the decrease can be related objectively to
an event occurring after the impairment was recognised, the
previously recognised impairment loss is reversed through profit
or loss to the extent that the carrying amount of the financial
asset at the date the impairment is reversed does not exceed
what the amortised cost would have been had the impairment
not been recognised.
De-recognition of financial assets
The Group derecognises a financial asset when the contractual
rights to the cash flows from the asset expire, or it transfers the
rights to receive the contractual cash flows in a transaction in
which substantially all the risks and rewards of ownership of the
financial asset are transferred. Any interest in such transferred
financial assets that is created or retained by the Group is
recognised as a separate asset or liability.
On de-recognition of a financial asset in its entirety, the
difference between the asset’s carrying amount and the sum of
the consideration received and receivable is recognised in profit
or loss.
Financial liabilities
The only category of financial liabilities owed by the Group
relates to “other financial liabilities”.
Other financial liabilities
Other financial liabilities comprise loans and borrowings, bank
overdrafts, and trade and other payables. The Group initially
recognises other financial liabilities on the trade date, which
is the date that the Group becomes a party to the contractual
provisions of the instrument.
Other financial liabilities are recognised initially at fair value less
any directly attributable transaction costs. Subsequent to initial
recognition, these financial liabilities are measured at amortised
cost using the effective interest method, with interest expense
recognised on an effective yield basis.
De-recognition of financial liabilities
The Group de-recognises financial liabilities when, and only
when, the Group’s obligations are discharged, cancelled or
they expire. The difference between the carrying amount of the
34
MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFOR THE YEAR ENDED 30 JUNE 2016
financial liability de-recognised and the consideration paid and
payable is recognised in profit or loss.
(o) Trade and other receivables
Trade and other receivables include amounts due from
customers for goods and services performed in the ordinary
course of business. Receivables expected to be collected within
12 months of the end of the reporting period are classified as
current assets. All other receivables are classified as non-
current assets.
Trade and other receivables are initially recognised at fair
value and subsequently measured at amortised cost using the
effective interest method, less any provision for impairment.
Refer to note 1(n) for further discussion on the determination of
impairment losses.
(p) Trade and other payables
Trade and other payables represent the liabilities for goods and
services received by the Group that remain unpaid at the end
of the reporting period. The balance is recognised as a current
liability with the amounts normally paid within 30 days after the
end of the month in which they were initially recognised as
a liability.
(q) Goods and services tax
Revenues, expenses and assets are recognised net of the
amount of goods and services tax (GST), except:
•
•
where the amount of GST incurred is not recoverable from
the Australian Taxation Office (ATO), it is recognised as
part of the cost of acquisition of an asset or as part of an
item of expense; or
for receivables and payables which are recognised
inclusive of GST.
The net amount of GST recoverable from, or payable to, the
ATO is included as part of receivables or payables.
Cash flows are included in the cash flow statement on a gross
basis. The GST component of cash flows arising from investing
and financing activities which is recoverable from, or payable to,
the ATO is classified within operating cash flows.
35
Investment property
(r)
Investment property is property held to earn rentals or for
capital appreciation or both, rather than for either use in the
production or supply of goods or services or for administrative
purposes or sale in the ordinary course of business.
The Group uses the fair value model for investment property.
The Group’s investment property is assessed for indicators
of impairment at the end of each reporting period. Financial
assets are considered to be impaired when there is objective
evidence that, as a result of one or more events that occurred
after the initial recognition of the financial asset, the estimated
future cash flows of the financial asset have been affected.
An impairment loss is recognised immediately in profit or loss,
unless the investment property is carried at a re-valued
amount, in which case the impairment loss is treated as a
revaluation decrease.
When an impairment loss subsequently reverses, the carrying
amount of the investment property is increased to the revised
estimate of its recoverable amount, but so that the increased
amount does not exceed the carrying amount that would have
been determined had no impairment loss been recognised
for the investment property in prior years. A reversal of an
impairment loss is recognised immediately in profit or loss,
unless the relevant asset is carried at a re-valued amount, in
which case the reversal of the impairment loss is treated as a
revaluation increase.
(s) Critical accounting judgements and key sources of
estimation uncertainty
In the application of the Group’s accounting policies, the
Directors are required to make judgements, estimates and
assumptions about the carrying amounts of assets and liabilities
that are not readily apparent from other sources. The estimates
and associated assumptions are based on historical experience
and other factors that are considered to be relevant. Actual
results may differ from these estimates.
The estimates and underlying assumptions are reviewed on
an on-going basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the
revision affects only that period, or in the period of the revision
and future periods if the revision affects both current and
future periods.
Key estimates – impairment
The Group assesses impairment at each reporting date by evaluating conditions specific to the Group that may lead to impairment of
assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value in use calculations performed
in assessing recoverable amounts incorporate a number of key estimates.
(t) Application of new and revised Accounting Standards
Standards and Interpretations affecting amounts reported in the current period (and/or prior periods)
AASB 2015-3 ‘Amendments to Australian Accounting Standards arising from the Withdrawal of AASB 1031 Materiality’.
Impact of the application of AASB 2015-3 ‘Amendments to Australian Accounting Standards arising from the Withdrawal of
AASB 1031 Materiality’
Completes the withdrawal of references to AASB 1031 in all Australian Accounting Standards and Interpretations.
Standards and Interpretations in issue not yet adopted
At the date of authorisation of the financial statements, the Standards and Interpretations listed below were in issue but not
yet effective.
Standard/Interpretation
Effective for annual
reporting periods
beginning on or after
AASB 9 Financial Instruments
AASB 15 Revenue from Contracts with Customers
AASB 16 Leases
AASB 1057 Application of Australian Accounting Standards
AASB 2014-3 Amendments to Australian Accounting Standards – Accounting for
Acquisitions of Interests in Joint Operations
AASB 2014-4 Amendments to Australian Accounting Standards – Clarification of
Acceptable Methods of Depreciation and Amortisation
AASB 2014-9 Amendments to Australian Accounting Standards – Equity Method in
Separate Financial Statements
AASB 2015-1 Amendments to Australian Accounting Standards – Annual Improvements to
Australian Accounting Standards 2012-2014 Cycle
AASB 2015-2 Amendments to Australian Accounting Standards – Disclosure Initiative:
Amendments to AASB 101
AASB 2016-1 Amendments to Australian Accounting Standards – Recognition of Deferred
Tax Assets for Unrealised Losses
AASB 2016-2 Amendments to Australian Accounting Standards – Disclosure Initiative:
Amendments to AASB 107
1-Jan-18
1-Jan-18
1-Jan-19
1-Jan-16
1-Jan-16
1-Jan-16
1-Jan-16
1-Jan-16
1-Jan-16
1-Jul-17
1-Jul-17
Expected to be
initially applied in
the financial year
ending
30-Jun-19
30-Jun-19
30-Jun-20
30-Jun-17
30-Jun-17
30-Jun-17
30-Jun-17
30-Jun-17
30-Jun-17
30-Jun-18
30-Jun-18
36
MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFOR THE YEAR ENDED 30 JUNE 2016 2. REVENUE
From continuing operations
Income from operations
Interest received
Management fees
Recoveries
Rental income
Other
Total income from continuing operations
3. RECLASSIFICATION OF OTHER EXPENSES
2016
$
2015
$
32,630,989
24,691,591
4,426
52,794
-
282,038
-
339,258
32,970,247
52,706
204,515
67,182
158,193
500
483,096
25,174,687
5. TRADE AND OTHER RECEIVABLES
Trade debtors
Less provision for doubtful debts
Bonds and deposits
GST receivable
5(a) CREDIT RISK AND AGEING OF TRADE DEBTORS
2016
$
2015
$
6,102,542
-
5,200
-
6,107,742
5,569,827
(34,258)
2,000
1,611,339
7,148,908
The class of assets described as “trade debtors” is considered to be the main source of credit risk related to the Group. The Group
does not hold any collateral over these balances. A single counterparty made up of 37.12% of the total trade receivables at 30 June
2016. All invoices to this counterparty included in the total trade and other receivables at 30 June 2016 have been received as at the
date of this report. The ageing of trade debtors (financial assets) is as follows:
Items reported as other expenses in the 2015 Annual Report have been reclassified into separate categories in this report as
management believe providing more detailed disclosure is relevant to an understanding of the entity’s financial performance. Details
of this reclassification is provided in the table below.
Previous
Classification
Current
Classification
$
$
25,290,974
25,174,687
(829,597)
(713,310)
From continuing operations
Revenue
Gain/(loss) on sale of assets
4. CASH AND CASH EQUIVALENTS
For the purposes of the Consolidated Statement of Cash Flows, cash and cash equivalents include cash on hand and in banks, net
of outstanding bank overdrafts. Cash and cash equivalents at the end of the year shown in the consolidated statement of cash flows
can be reconciled to the related items in the consolidated statement of financial position as follows.
4(a)
In funds accounts
Bank balances
4(b) Bank overdraft
Bank overdraft
4(c) Net cash at bank
37
2016
$
2015
$
468,973
515,679
(600,088)
(1,130,013)
(131,115)
(614,334)
< 1 month
1 to 3 months
3 to 6 months
6. OTHER FINANCIAL ASSETS
Current
Borrowing costs
Non-current
Borrowing costs
6(a) AGEING OF OTHER FINANCIAL ASSETS
The ageing of other financial assets – current is as follows:
< 1 year
The ageing of other financial assets - non-current is as follows:
1 to 5 years
5,866,056
233,674
2,812
6,102,542
4,551,084
863,514
155,229
5,569,827
981
981
281
281
981
981
281
281
3,724
3,724
3,195
3,195
3,724
3,724
3,195
3,195
38
MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFOR THE YEAR ENDED 30 JUNE 2016
7. OTHER ASSETS
Current
Prepayments
Non-current
Property held for sale
Shares in listed company
8.
INVENTORIES
Finished goods
2016
$
2015
$
461,808
461,808
18,000
-
18,000
440,156
440,156
18,000
-
18,000
1,335,189
1,335,189
1,869,518
1,869,518
The cost of inventories recognised as an expense during the year in respect of continuing operations was $5,624,283 (2015:
$4,495,425)
9. GOODWILL
Balance at the beginning of the period
Impairment loss
10. TRADE AND OTHER PAYABLES
Current
Trade creditors
Other creditors
Accrued expenses
GST payable
Income received in advance
10(a) AGEING OF TRADE AND OTHER PAYABLES
The ageing of trade creditors (financial liabilities) is as follows:
< 1 month
1 to 3 months
> 3 months
39
-
-
-
4,481,519
(4,481,519)
-
2,896,084
-
1,490,024
380,191
28,964
4,795,263
21,393,159
1,300,000
1,893,995
-
-
24,587,154
1,280,501
1,513,021
102,562
2,896,084
18,989,048
2,383,258
20,853
21,393,159
11. OTHER FINANCIAL LIABILITIES
Current
Equipment finance leases
Equipment line loan
Working capital loan 1
Working capital loan 2
Insurance premium funding
Non-current
Equipment finance leases
Equipment line loan
Working capital loan 1
Working capital loan 2
Shareholder loan
11(a) FINANCE LEASES
Current
Non-current
Minimum future lease payments
Not later than 1 year
Later than 1 year and not later than 5 years
Minimum future lease payments
Less future finance charges
Present value of minimum future lease payments
Not later than 1 year
Later than 1 year and not later than 5 years
2016
$
2015
$
1,651,354
1,483,169
-
-
211,572
291,511
2,154,437
224,949
124,882
198,875
261,350
2,293,225
3,547,466
2,426,634
-
-
226,956
8,500,000
12,274,422
1,651,354
3,547,466
5,198,820
1,893,043
3,860,500
5,753,543
(554,723)
5,198,820
1,862,926
3,335,894
5,198,820
216,451
575,118
437,650
-
3,655,853
1,483,169
2,426,634
3,909,803
1,665,107
2,618,474
4,283,581
(373,778)
3,909,803
1,469,260
2,440,543
3,909,803
The Group leases certain items of equipment under finance leases. The average term is 3.83 years (2015: 3.32 years). The Group’s
obligations under finance leases are secured by lessor’s title to goods under finance lease.
The Group’s exposure to interest rate risk has been mitigated in that interest rates have been fixed for the duration of the finance
period. Effective interest rates payable under finance leases are between 4.45% and 8.33% (2015: 4.45% and 9.61%).
The fair value of the finance lease liabilities is approximately equal to the carrying amount.
40
MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFOR THE YEAR ENDED 30 JUNE 2016 11(b) LOANS
13. PROPERTY, PLANT AND EQUIPMENT
A summary of borrowing arrangements applicable to all loans is included in Note 22(a). Security pledged in respect of the equipment
line loan and working capital loan 1 is detailed in Note 13(a).
12. PROVISIONS
Annual leave provision - current
Opening balance
Movement
Closing balance
Long service leave provision - current
Opening balance
Movement
Closing balance
Provision for relocation costs
Opening balance
Movement
Closing balance
Total current provisions
Long service leave provision - non-current
Opening balance
Movement
Closing balance
Total non-current provisions
2016
$
2015
$
367,360
240,533
607,893
-
9,708
9,708
-
108,670
108,670
726,271
97,963
23,571
121,534
121,534
213,391
153,969
367,360
23,657
(23,657)
-
-
-
-
367,360
45,107
52,856
97,963
97,963
The above provisions represent annual leave and long service leave entitlements accrued by the Group’s employees.
At 1 July 2015
Cost or fair value
Accumulated depreciation
Net book amount
Year ended 30 June 2016
Opening net book amount
Additions
Disposals
Depreciation
At 30 June 2016
Cost or fair value
Accumulated depreciation
Net book amount
At 1 July 2014
Cost or fair value
Accumulated depreciation
Net book amount
Year ended 30 June 2015
Opening net book amount
Additions
Disposals
Depreciation
Land and
buildings
Plant and
equipment
Motor
vehicles
Furniture
and fittings
Total
$
$
$
$
$
33,900
(2,224)
22,874,594
13,273,131
182,981
36,364,606
(7,724,484)
(10,242,001)
(109,081)
(18,077,790)
31,676
15,150,110
3,031,130
73,900
18,286,816
31,676
15,150,110
3,031,130
73,900
18,286,816
-
15,381,215
5,245,348
37,452
20,664,015
-
(4,531,024)
(1,827,170)
-
(6,358,194)
(12,344)
(4,026,133)
(1,235,201)
(43,348)
(5,317,026)
19,332
21,974,168
5,214,107
68,004
27,275,611
33,900
31,037,599
14,329,331
220,433
45,621,263
(14,568)
(9,063,431)
(9,115,224)
(152,429)
(18,345,652)
19,332
21,974,168
5,214,107
68,004
27,275,611
3,625,070
12,600,751
12,868,490
146,047
29,240,358
(182,684)
(5,221,932)
(9,746,429)
(79,983)
(15,231,028)
3,442,386
7,378,819
3,122,061
66,064
14,009,330
3,442,386
7,378,819
3,122,061
66,064
14,009,330
-
-
10,540,700
704,847
36,934
11,282,481
(121,288)
(65,103)
-
(186,391)
(36,500)
(2,633,050)
(730,675)
(29,098)
(3,429,323)
Transfer to investment property
(3,374,210)
(15,071)
-
-
(3,389,281)
31,676
15,150,110
3,031,130
73,900
18,286,816
At 30 June 2015
Cost or fair value
Accumulated depreciation
Net book amount
33,900
22,874,594
13,273,131
182,981
36,364,606
(2,224)
(7,724,484)
(10,242,001)
(109,081)
(18,077,790)
31,676
15,150,110
3,031,130
73,900
18,286,816
41
42
MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFOR THE YEAR ENDED 30 JUNE 2016 Plant and equipment and motor vehicles comprise mainly of drilling rigs and associated vehicles and equipment. Directors and
management continually monitor both domestic and overseas markets on new and used drill rig pricing and availability and
as a result are of the opinion that the net written down book value of the Group’s property, plant and equipment is less than its
recoverable amount. Remaining mindful of the volatility of the mining industry, Directors and management have no current intention
of changing the current depreciation and amortisation rates.
Acquisition of Assets from Nitro Drilling Pty Ltd (in Liquidation) and its related entities
On 6 July 2015, the Group acquired assets from Nitro Drilling Pty Ltd (Receivers and Managers appointed) (In Liquidation) for $16.1
million. The acquisition further strengthened the Group’s position as a leading provider in the eastern Australian drilling market
and provided capacity to fulfil the Group’s tender pipeline for Tier 1 contracts. The acquired assets include 25 drilling rigs and an
extensive array of other support equipment and inventory.
13(a) ASSETS PLEDGED AS SECURITY
The following has been pledged as security in relation to the Group’s bank overdraft and other financial liabilities.
Bank overdraft
The following securities will secure the repayment of the above facilities:
•
An existing registered mortgage given by Mitchell Services Ltd over the property situated at 133-137 Crocodile Crescent, Mount
St John, Qld (carrying amount of $2,975,000).
Registered general security agreement given by Notch Holdings Pty Ltd as grantor, over all of its present and after acquired
personal and real property including, the goodwill of its business, uncalled and unpaid capital and proceeds.
Existing registered company charge given by Mitchell Services Ltd over all the assets and undertakings of the company
including uncalled and unpaid capital.
Guarantee and indemnity given by Mitchell Services Limited, Well Drilled Pty Ltd, Notch Holdings Pty Ltd and Mitchell
Operations Pty Ltd.
•
•
•
Working capital loan 2
The following rigs have been pledged as security:
•
•
2008 UDR1200 Rotadrill drill rig (carrying amount of $213,406)
2007 Schramm T685WS Rotadrill drill rig (carrying amount of $388,636).
Shareholder loan
These loans were provided by major shareholders Washington H Soul Pattinson Limited and Mitchell Family Investments (Qld) Pty
Ltd as trustee for the Mitchell Family Investments Trust in order to partly fund the Nitro asset acquisition. These assets are held by a
wholly owned subsidiary of the Company, Notch No 2 Pty Ltd.
The shareholder loans are secured by a grant of a general security agreement over all Notch No 2 Pty Ltd assets. The carrying
amount of these assets is $13,667,823.
Equipment finance leases
The Group has entered into a number of equipment finance lease arrangements with a range of lenders. Under the terms of these
facilities, security is limited to the assets to which the facility relates.
43
14.
INVESTMENT PROPERTY
Balance at the beginning of the period
Transfer from land and buildings
Revaluation to fair value
15.
INCOME TAX EXPENSE
Income tax expense recognised in profit/(loss)
Income tax expense comprises
Current tax
Deferred tax
Derecognised tax losses and tax losses not recognised in current year
2016
$
2015
$
2,975,000
-
-
2,975,000
-
3,389,282
(414,282)
2,975,000
-
(1,809,488)
1,809,488
-
117,769
(2,603,381)
6,310,945
3,825,333
The income tax expense for the year can be reconciled to the accounting profit as follows:
Profit/(loss) before tax from continuing operations
(6,048,831)
(13,174,150)
Income tax expense calculated at 30%
Effect of expenses that are not deductible in determining taxable profit
Derecognised tax losses and tax losses not recognised in current year
Effect of tax rates in foreign jurisdictions (PNG)
Adjustments recognised in current year in relation to current tax of prior years
(1,814,649)
5,161
1,809,488
-
-
-
(3,952,245)
1,348,864
6,310,945
117,769
-
3,825,333
The tax rate used for 2016 and 2015 reconciliations above is the corporate tax rate of 30% payable by Australian corporate entities
on taxable profits under Australian tax law.
16. TAX ASSETS AND LIABILITIES
Tax assets - current
Income tax receivable
Tax assets - non-current
Deferred tax asset
Tax liabilities - current
Provision for foreign contractor withholding tax PNG
16(a) UNRECOGNISED AMOUNTS
Unused tax losses
Other unrecognised temporary differences
Franking account balance
-
-
-
22,596,123
3,993,230
872,635
-
-
-
16,188,710
4,847,773
872,635
44
MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFOR THE YEAR ENDED 30 JUNE 2016 17.
ISSUED CAPITAL
Fully paid ordinary shares
Balance at the beginning of the period
Issue of shares - rights issue
Issue of shares - first tranche
Issue of shares - second tranche
Issue of shares - option conversion
Issue of shares - share based payments
Fully paid ordinary shares
Balance at the beginning of the period
Issue of shares - rights issue
Issue of shares - first tranche
Issue of shares - second tranche
Issue of shares - option conversion
Issue of shares - share based payments
2016
$
2015
$
39,219,134
8,422,288
-
-
-
962,956
48,604,378
19,024,100
11,672,504
1,522,500
7,000,000
30
-
39,219,134
Number of Shares Number of Shares
290,000,005
867,000,217
495,428,698
-
-
-
55,945,053
333,500,111
43,500,001
200,000,000
100
-
1,418,373,968
867,000,217
Issue of shares
The following shares were issued during the year ended 30 June 2016:
•
•
•
•
On 3 July 2015, 495,428,698 fully paid ordinary shares were issued at a price of $0.017 by way of a 4 for 7 non-renounceable
rights issue.
On 6 July 2015, 29,411,765 fully paid ordinary shares were issued to Washington H Soul Pattinson & Company Limited at an
issue price of $0.017 per share in lieu of interest payable for the first 12 month period in accordance with the terms of the of the
shareholder loan.
On 23 October 2015, 20,588,235 fully paid ordinary shares were issued to Mitchell Family Investments (Qld) Pty Ltd as trustee
for the Mitchell Family Investments Trust at an issue price of $0.017 per share in lieu of interest payable for the first 12 month
period in accordance with the terms of the of the shareholder loan.
On 7 December 2015, 5,945,053 fully paid ordinary shares were issued at $0.019 in lieu of payment of 50% of the commission
payable for asset sales under an agency agreement with Pickles Auctions Pty Ltd.
The transaction costs directly attributable to the above issue of shares that otherwise would have been avoided have been
accounted for as a deduction from equity, net of income tax benefit (refer note 18).
18. SHARE ISSUE COSTS
Balance at the beginning of the period
Share issue costs
19. RETAINED EARNINGS
Balance at the beginning of the period
Profit/(loss) attributable to owners of the company
Share based payment transactions (refer note 20)
20. SHARE BASED PAYMENT TRANSACTIONS
Expense recognised in profit or loss
Equity-settled share-based payment transactions
Replacement awards granted on 29 November 2013
Executive share and option plan
Total expense/(income) recognised for equity-settled share-based payment
2016
$
2015
$
(1,922,724)
(591,798)
(2,514,522)
(1,199,944)
(722,780)
(1,922,724)
(24,164,384)
(6,048,831)
(27,473)
(7,135,246)
(16,999,483)
(29,655)
(30,240,688)
(24,164,384)
(36,750)
9,277
(27,473)
(29,655)
-
(29,655)
Payment in lieu of interest
On 6 July 2015, major shareholders Washington H. Soul Pattinson & Company Limited (WHSP) and Mitchell Family Investments
(Qld) Pty Ltd as trustee for the Mitchell Family Investment Trust (Mitchell Group) provided $8.5 million to the Group in the form of
long term shareholder loans in order to partially fund the Nitro asset purchase (refer note 11 for further details).
On 6 July 2015, 29,411,765 new ordinary shares were issued to WHSP at an issue price of $0.017 per share in lieu of interest
payable for the first 12 month period in accordance with the terms of the of the shareholder loan.
Following the required shareholder approval granted at the Company’s Annual General Meeting held on 20 October 2015,
20,588,235 new ordinary shares were issued to Mitchell Group on 23 October 2015 in lieu of interest payable for the first 12 month
period in accordance with the terms of the shareholder loan.
The above share based payments have been recognised in the current period as a finance expense to the extent that they relate to
periods between 1 July 2015 and 30 June 2016.
Payment in lieu of commission
On 7 December 2015, 5,945,053 fully paid ordinary shares were issued at $0.019 in lieu of payment of 50% of the commission
payable for asset sales under an agency agreement with Pickles Auctions Pty Ltd. This share based payment has been recognised
in the current period as an expense to the extent that the commission payable related to services performed before 30 June 2016.
45
46
MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFOR THE YEAR ENDED 30 JUNE 2016 Replacement awards (equity-settled)
The Group has recognised a credit to the Consolidated Statement of Profit or Loss and Other Comprehensive Income of $36,750 for
the year ended 30 June 2016 with regards to replacement award options issued in 2013. The vesting conditions attached to these
replacement awards required the Group to generate FY2016 EBITDA of at least $7million. Given that this EBITDA hurdle was not
met, the value of any expense previously recognised in this regard was derecognised in the current year.
Executive share and option plan
On 23 May 2016, the Company issued rights to receive 4,915,099 fully paid ordinary shares (Rights) and granted options to
purchase 16,362,395 fully paid ordinary shares (Options) under an Executive Share and Option Plan (ESOP).
These instruments are subject to certain vesting conditions which will be tested after two years (the vesting period).
The Group accounts for the above equity-settled share based payment by recognising the fair value of the relevant equity
instruments as an expense over the vesting period. The fair value of the equity instruments is calculated at each reporting period
and vesting conditions are taken into account by adjusting the number of equity instruments included in the measurement of
the transaction amount so that, ultimately, the amount recognised for goods or services received as consideration for the equity
instruments granted is based on the number of equity instruments that eventually vest.
Measurement of fair values
The calculated fair value of the Rights under the ESOP was $83,557 at 30 June 2016 and has been determined with reference to the
closing price of the Company’s fully paid ordinary shares.
The calculated fair value of the Options was $139,080 at 30 June 2016 and has been determined using the Black-Scholes option
pricing model. Expected volatility is estimated by considering historical volatility of comparable company share prices. The inputs in
the measurement of the fair value of the equity-settled share-based payment plans at 30 June 2016 were as follows:
Share price
Exercise price
Expected volatility
Time to maturity
Risk-free interest rate
Dividend yield (assumed no dividends paid)
Fair value per option
Number of options
Total fair value of options
$0.0155
$0.0395
66%
9 years
2.19%
0%
$0.0085
16,362,395
$139,080
21. RECONCILIATION OF PROFIT/(LOSS) FOR THE YEAR TO NET CASH FLOWS FROM OPERATING ACTIVITIES
2016
$
2015
$
Profit/(loss) for the year
Adjustments for:
Depreciation and amortisation
Fair value adjustment
Goodwill impairment
Profit on sale of assets
Loss on sale of assets
Income tax expense
Change in trade and other receivables
Change in other assets
Change in inventories
Change in trade payables and accruals
Change in insurance premium funding balance
Change in provisions
Recognition of share based payment
Income tax paid
22. FINANCIAL RISK MANAGEMENT
(6,048,831)
(16,999,483)
5,317,026
-
-
(1,293,437)
1,324,716
-
(307,846)
(19,196)
534,329
(807,652)
30,161
382,482
822,527
-
(65,721)
3,429,323
414,282
4,481,519
(116,287)
146,249
3,825,333
(4,800,394)
(133,583)
202,480
4,971,929
(58,074)
68,053
(29,655)
(117,767)
(4,716,075)
The Group’s financial instruments mainly consist of deposits with banks, trade receivables and payables and borrowings and leases
from financial institutions. The Board of Directors are responsible for monitoring and managing the financial risks. They monitor these
risks through regular meetings with the Group’s management. The Group does not enter into derivative financial instruments and
does not speculate in any type of financial instrument.
Specific financial risk exposures and management thereof
The main risks the Group is exposed to through its financial instruments are interest rate risk, liquidity risk and credit risk. There have
been no substantive changes in the types of risks the Group is exposed to, how these risks arise, or the Board’s objectives, policies
and processes for managing or measuring the risks from the previous reporting period.
Interest rate risk
22(a)
Exposure to interest rate risk arises on financial assets and liabilities recognised at reporting date whereby a future change in
interest rates will affect future cash flows or the fair value of fixed rate financial instruments. The Group is also exposed to earnings
volatility on floating rate instruments.
47
48
MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFOR THE YEAR ENDED 30 JUNE 2016 The following tables set out the Group’s exposure to interest rate risk.
22(b) Liquidity risk
2016
Bank overdraft
Equipment finance leases
Premium insurance
Equipment line loan
Working capital loan 1
Working capital loan 2
Shareholder loan
Expected duration until repayment
Within 1
year
$
1 to 2
years
$
2 to 3
years
$
More than
3 years
$
Total
$
600,088
-
-
-
600,088
1,651,354
1,167,849
1,137,295
1,242,322
5,198,820
291,511
-
-
-
291,511
-
-
-
-
-
-
-
-
-
-
211,572
226,956
-
-
438,528
-
-
-
8,500,000
8,500,000
2,754,525
1,394,805
1,137,295
9,742,322
15,028,947
(a)
(b)
(c)
(d)
(e)
(f)
(g)
Interest rates have varied between 5.43% and 5.78% per annum.
Interest rates are commercial lease finance rates and are fixed for the duration of the loan period.
Interest rate is fixed at a flat rate of 2.2592% of the amount initially financed.
(a)
(b)
(c)
(d) Facility was fully repaid during the period
(e) Facility was fully repaid during the period
(f)
(g)
Interest is fixed at a commercial lease finance rate of 6.6546% for the duration of the loan period
Interest is fixed at 10% for the duration of the loan period
2015
Bank overdraft
Equipment finance leases
Premium insurance
Equipment line loan
Working capital loan 1
Working capital loan 2
Expected duration until repayment
Within 1
year
$
1 to 2
years
$
2 to 3
years
$
More than
3 years
$
Total
$
1,130,013
-
-
-
1,130,013
1,469,260
1,224,777
543,779
671,987
3,909,803
261,350
225,712
144,972
197,996
-
215,688
132,650
211,512
-
-
-
-
140,901
227,017
281,477
-
261,350
441,400
700,000
636,525
3,429,303
1,784,627
911,697
953,464
7,079,091
(a)
(b)
(c)
(d)
(e)
(f)
Interest rates have varied between 5.48% and 6.12% per annum.
Interest rates are commercial lease finance rates and are fixed for the duration of the loan period.
Interest rate is fixed at a flat rate of 2.3273% of the amount initially financed.
Interest is variable with rates varying between 7.74% and 8.25% per annum.
Interest is variable with rates varying between 5.24% and 5.88% per annum.
Interest is fixed at a commercial lease finance rate of 6.6546% for the duration of the loan period
(a)
(b)
(c)
(d)
(e)
(f)
49
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that
are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible,
that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Group’s reputation.
The Group manages this risk through the following mechanisms:
ensuring that there is access to adequate capital;
preparing forward looking cash flow analyses in relation to its operational, investing and financial activities;
obtaining funding from a variety of sources;
•
•
• monitoring undrawn credit facilities;
•
• maintaining a reputable credit profile;
• managing credit risk related to financial assets;
•
•
investing surplus cash only with major financial institutions; and
comparing the maturity profile of financial liabilities with the realisation profile of financial assets.
The table below reflects an undiscounted contractual maturity analysis for financial liabilities, compared with financial assets. Bank
overdrafts have been excluded from the analysis below as management does not consider that there is any material risk that the
bank will terminate such facilities.
Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation. Actual timing may
therefore differ from that disclosed. The timing of cash flows presented in the table to settle financial liabilities reflect the earliest
contractual settlement dates and do not reflect management’s expectations that banking facilities will be rolled forward. The
deficiency identified in the table will be met from cash flows generated by the Group’s normal operations.
Financial liability and financial asset maturity analysis
Financial liabilities due for payment
Trade and other payables (excluding estimated
employee entitlements)
Within 1 year
1 to 7 Years
Total
2016
$
2015
$
2016
$
2015
$
2016
$
2015
$
4,795,263
24,587,154
-
-
4,795,263
24,587,154
Financial liabilities
Total contractual outflows
Total expected outflows
2,154,437
1,249,828
12,274,422
4,699,250
14,428,859
5,949,078
6,949,700
25,836,982
12,274,422
4,699,250
19,224,122
30,536,232
6,949,700
25,836,982
12,274,422
4,699,250
19,224,122
30,536,232
Financial assets - cash flows realisable
Cash and cash equivalents
Trade and other receivables
Total anticipated inflows
468,973
515,679
-
-
468,973
515,679
6,107,742
7,148,908
-
-
6,107,742
7,148,908
6,576,715
7,664,587
-
-
6,576,715
7,664,587
Net (outflow)/inflow on financial instruments
(372,985)
(18,172,395)
(12,274,422)
(4,699,250)
(12,647,407)
(22,871,645)
50
MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFOR THE YEAR ENDED 30 JUNE 2016 22(c) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Group’s trade and other receivables from customers. The Group has adopted a policy of
only dealing with creditworthy counterparties and uses publicly available financial information and its own trading records to rate its
customers. The Group’s exposure and the credit ratings of its counterparties are continuously monitored to mitigate financial loss.
The maximum exposure to credit risk by class of recognised financial assets at balance date, excluding the value of any collateral or
other security held, is equivalent to the carrying value and classification of those financial assets (net of any provisions) as presented
in the Consolidated Statement of Financial Position.
The Group has no significant concentration of credit risk with any single counterparty or group of counterparties. Details with respect
to credit risk of trade and other receivables is provided in note 5(a).
Trade and other receivables that are neither past due or impaired are considered to be of high credit quality. Aggregates of such
amounts are detailed at note 5(a).
The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international
credit-rating agencies.
23. NET FAIR VALUES
Fair value estimation
The carrying values of financial assets and financial liabilities as detailed in the Consolidated Statement of Financial Position and
these notes approximate their fair values at reporting date.
24. RELATED PARTY TRANSACTIONS
24(a) Related parties
The Group’s main related parties are as follows.
(i) Entities exercising control over the Group
The ultimate parent entity that exercises control over the Group is Mitchell Services Ltd ACN 149 206 333. The subsidiary companies
in the Group are Notch Holdings Pty Ltd ACN 009 271 461, Well Drilled Pty Ltd ACN 123 980 343, Mitchell Operations Pty Ltd ACN
165 456 066, Notch No. 2 Pty Ltd ACN 606 170 138 and Mitchell Services Share Plan Pty Ltd ACN 610 901 221.
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been
eliminated on consolidation and are not disclosed in this note.
(ii) Key management personnel
Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly,
including any Director (whether executive or otherwise) of that entity are considered KMP.
Disclosures relating to Key Management Personnel are set out in the remuneration report.
(iii) Other related parties
Other related parties include entities over which KMP have control or joint control.
24(b) Transactions with related parties
Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to
other parties unless otherwise stated. The following transactions occurred with related parties.
Transactions with Manutech Engineering and Maintenance
The Group engages Manutech Engineering and Maintenance to purchase parts and in some instances perform repair and
maintenance type services. Manutech Engineering and Maintenance is an entity controlled by Peter Miller. The amount incurred
during the reporting period in relation to these services was $224,440 excluding GST. Amounts were billed on normal market rates
for such services and were due and payable under normal payment terms. An amount of $5,525 remains owing to this related entity
at the end of the reporting period.
Transactions with Mitchell Group private entities
MEH Equipment Hire Pty Ltd
MEH Equipment Hire Pty Ltd is an entity controlled by Nathan Mitchell. In order to satisfy specific contract requirements, the Group
hired plant and equipment not available in its fleet from MEH Equipment Hire. Hire of plant and equipment from this related entity
for the reporting period amounted to $367,929 excluding GST and was based on normal market rates and under normal payment
terms. An amount of $32,174 remains owing to this related entity at the end of the reporting period. MEH Equipment Hire purchased
$90,200 worth of equipment (including GST) from the Group, there is nil outstanding for these purchases.
Mitchell African Holdings Pty Ltd
Mitchell African Holdings Pty Ltd is an entity controlled by Nathan Mitchell. The Group provided management and administrative
support services, and other service activities conducted from time to time. The Group charged Mitchell African Holdings a
management fee of approximately $13,000 per month and at times paid for expenses on their behalf to be recharged. Management
fee income for the year amounted to $52,794. $8,038 remains owing to the Group at the end of the reporting period.
Mitchell Family Investments (QLD) Pty Ltd
Mitchell Family Investments (QLD) Pty Ltd is an entity controlled by Nathan Mitchell. The Group leases part of the office building
located at 112 Bluestone Circuit, Seventeen Mile Rocks Brisbane, which is owned by Mitchell Family Investments (QLD) Pty Ltd.
The rental associated with this lease is $9,420 plus GST per month and an amount of $32,244 remains owing to this related entity at
the end of the reporting period.
On 6 July 2015, the Group entered into a 5 year debt facility agreement of $3.5million with Mitchell Family Investments (QLD) Pty
Ltd at an interest rate of 10%. Interest accruing on the loan for the first two years is payable in MSV shares. 20,588,235 MSV shares
were issued to Mitchell Family Investments (QLD) Pty Ltd on 23 October 2015 as settlement for the first years’ interest. Shareholder
approval in relation to the grant of a General Security Agreement over asset owned by Notch No. 2 Pty Ltd and the issue of MSV
shares in lieu of paying interest during the first two year period was obtained at the Annual General Meeting on 20 October 2015.
VMW Engineering Pty Ltd
VMW Engineering Pty Ltd supplies the Group with equipment and rig components to be used in the day to day operations of the
business. Nathan Mitchell is a substantial shareholder of VMW Engineering and served on its board of Directors until 28 August
2015. Amounts were billed on normal market rates for such goods and were due and payable under normal payment terms. Total
purchases amounted to $28,979 excluding GST and an amount of $856 was outstanding at the end of the reporting period.
51
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MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFOR THE YEAR ENDED 30 JUNE 2016
25. KEY MANAGEMENT PERSONNEL
29. SUPERANNUATION CONTRIBUTIONS
Refer to the Remuneration Report contained in the Directors’ Report for details of the remuneration paid or payable to each member
of the Group’s KMP for the year ended 30 June 2016.
26. AUDITORS REMUNERATION
During the year, the following fees were paid or payable for services provided by the auditor or its related practices:
The Group contributes superannuation on behalf of qualifying employees to superannuation funds. The only obligation of the
Group is to make specified contributions in accordance with contractual employment and statutory obligations. The total expense
recognised in the statement of profit or loss and other comprehensive income of $1,184,386 (2015: $843,568) represents the
contributions payable by the Group to these plans in accordance with contractual employment and statutory obligations. As at 30
June 2016, contributions of $332,437 due in respect of the 2016 reporting period (2015: $293,744) had not been paid over to the
plans. These amounts were paid subsequent to the end of the 2016 reporting period.
30. OPERATING SEGMENTS
The Group operates primarily within Australia, providing services wholly to a discrete industry segment (provision of drilling services
to the mining industry). These geographic and operating segments are considered based on internal management reporting and the
allocation of resources by the Group’s chief decision makers (Board of Directors). On this basis, the financial results of the reportable
operating and geographic segments are equivalent to the financial statements of the Group as a whole and no separate segment
reporting is disclosed in these financial statements.
31. EVENTS AFTER THE REPORTING DATE
Issue of Ordinary Shares
On 6 July 2016, MSV issued a combined 53,125,000 new fully paid ordinary shares in the Company to Mitchell Family Investments
(Qld) Pty Ltd as trustee for the Mitchell Family Investment Trust and Washington H Soul Pattinson & Company Limited as
consideration for the second years interest payable under the facility.
Audit and review of financial statements
Other
27. OPERATING LEASE COMMITMENTS
2016
$
2015
$
85,796
-
85,796
84,208
-
84,208
Operating leases relate to leases of land and buildings with varying lease terms not exceeding five (2015: five) years. Some lease
contracts contain provision for market rental reviews within the remaining lease term.
Non-cancellable operating lease commitments:
Not later than 1 year
Between 1 and 3 years
Later than 3 years
28. EARNINGS PER SHARE
Basic earnings per share
From continuing operations
Diluted earnings per share
From continuing operations
259,049
170,943
-
429,992
(0.43)
(0.43)
241,496
281,157
22,632
545,285
(2.20)
(2.20)
Basic earnings per share and diluted earnings per share are calculated using earnings and weighted average number of ordinary
shares as follows:
Profit/(loss) for the year attributable to owners
Weighted average number of ordinary shares
(6,048,831)
1,404,763,006
(16,999,483)
773,536,939
The weighted number of ordinary shares for the period ended 30 June 2015 has been restated for the rights issue on 3 July 2015. An
adjustment factor of 1.058 has been used. This adjustment factor is calculated as the fair value per share before exercise of rights
divided by the theoretical ex-rights value per share.
53
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MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFOR THE YEAR ENDED 30 JUNE 2016
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF MITCHELL SERVICES LTD ACN 149 206 333
FOR THE YEAR ENDED 30 JUNE 2016
The Directors declare that:
Report on the Financial Report
in the Directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when
(a)
they become due and payable;
in the Directors’ opinion, the attached financial statements are in compliance with International Financial Reporting Standards,
(b)
as stated in note 1(b) to the financial statements;
in the Directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001,
(c)
including compliance with accounting standards and giving a true and fair view of the financial position and performance of the
consolidated entity; and
(d)
the Directors have been given the declarations required by section 295A of the Corporations Act 2001.
I have audited the accompanying financial report of Mitchell Services Ltd, which comprises the consolidated statement of financial
position as at 30 June 2016, the consolidated statement of profit or loss and other comprehensive income, consolidated statement
of changes in equity and consolidated statement of cash flows for the year then ended, notes comprising a summary of significant
accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the
Company and the entities it controlled at the year’s end or from time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance
with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is
necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement,
whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB101: Presentation of
Financial Statements, that the financial statements comply with International Financial Reporting Standards (IFRS).
Signed in accordance with a resolution of the Directors made pursuant to section 295(5) of the Corporations Act 2001.
Auditor’s Responsibility
On behalf of the Directors
Nathan Mitchell
Executive Chairman
My responsibility is to express an opinion on the financial report based on our audit. I conducted our audit in accordance
with Australian Auditing Standards. Those standards require that I comply with relevant ethical requirements relating to audit
engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The
procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the
financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the
Company’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An
audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by the directors, as well as evaluating the overall presentation of the financial report.
I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.
Dated at Brisbane this 30th day of August 2016
Independence
In conducting my audit, I have complied with the independence requirements of the Corporations Act 2001. I confirm that the
independence declaration required by the Corporations Act 2001, which has been given to the directors of Mitchell Services Ltd,
would be in the same terms if given to the directors as at the time of this auditor’s report.
Auditor’s Opinion
In my opinion the financial report of Mitchell Services Ltd is in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the Company’s financial position as at 30 June 2016 and of its performance for the year ended on
that date; and
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
55
56
MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016 INDEPENDENT AUDITOR’S REPORT CONTINUED
TO THE MEMBERS OF MITCHELL SERVICES LTD ACN 149 206 333
FOR THE YEAR ENDED 30 JUNE 2016
ADDITIONAL AUSTRALIAN STOCK EXCHANGE
INFORMATION
Report on the Remuneration Report
I have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2016. The directors of the
Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the
Corporations Act 2001. My responsibility is to express an opinion on the Remuneration Report, based on my audit conducted in
accordance with Australian Auditing Standards.
Auditor’s Opinion
In my opinion, the Remuneration Report of Mitchell Services Ltd for the year ended 30 June 2016 complies with section 300A of the
Corporations Act 2001.
The following information is current as at 9 August 2016.
MSV Quoted Ordinary Shares
Spread of holdings
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
Greater than 100,000
Total
Holding less than a marketable parcel
Number of
holders
Shares % of total capital
issued
9
22
37
257
445
770
87
1,391
65,363
327,398
13,771,542
1,462,248,378
1,476,414,072
n/a
0.00%
0.01%
0.02%
0.93%
99.04%
100%
n/a
Rodger Dunstan
Jessups
Level 1 19 Stanley Street
TOWNSVILLE QLD 4810
Dated this 30th day of August 2016
57
58
MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016 The twenty largest listed security holders comprise:
Unquoted and Restricted Securities
Rank
Shareholder
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Washington H Soul Pattinson and Company Ltd
Mitchell Group Holdings Pty Ltd
Mitchell Family Investments (QLD) Pty Ltd
CVC Limited
J P Morgan Nominees Australia
Farjoy Pty Ltd
National Nominees Limited
Jumani Pty Ltd
Citicorp Nominees Pty Limited
Pybar Holdings Pty Limited
CVC Private Equity Limited
HSBC Custody Nominees (Australia) Limited
Sonya Miller
Peter Miller
Pacific Development Corporation Pty Ltd
BNP Paribas Noms Pty Ltd
Clapsy Pty Ltd
Banjo Superannuation Fund Pty Ltd
Mirrabooka Investments Limited
Australian Executor Trustees Limited
Ordinary
Shares
180,427,561
176,785,715
136,964,022
100,696,309
80,537,951
56,114,711
52,612,750
25,985,037
24,175,716
23,803,771
21,843,076
20,367,346
19,816,810
19,816,809
15,000,001
12,659,282
12,004,233
11,740,000
11,456,859
10,801,395
Total
1,013,609,354
% of total
capital issued
12.22%
11.97%
9.28%
6.82%
5.45%
3.80%
3.56%
1.76%
1.64%
1.61%
1.48%
1.38%
1.34%
1.34%
1.02%
0.86%
0.81%
0.80%
0.78%
0.73%
69%
The following options granted as part of the Employee Share and Option Plan are on issue. The exercise of these options is subject
to vesting conditions. For more information, refer to the Directors’ Report.
Class
Management options
Number of options
16,362,395
Substantial Shareholders
Rank
Shareholder
1
2
3
4
Mitchell Group Holdings Pty Ltd and associates
Washington H Soul Pattinson and Company Limited
Acorn Capital Limited
CVC Limited
Voting Rights
Ordinary shares
The voting rights attached to ordinary shares is set out below:
Ordinary Shares
% of total
capital issued
314,763,177
180,427,561
127,914,648
122,539,385
21.32%
12.22%
8.66%
8.30%
On a show of hands, every member present at a meeting in person, or by proxy, shall have one vote, and upon a poll, each share
shall have one vote.
No other classes of securities have voting rights.
Recently listed entities
For the period from 1 July 2015 to 30 June 2016, the Group has used the cash and assets in a form readily convertible to cash that it
had at the time of admission in a way that is consistent with its business objectives.
59
60
MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016ADDITIONAL AUSTRALIAN STOCK EXCHANGE INFORMATION CONTINUED
CORPORATE DIRECTORY
Board of Directors
Executive Chairman
Nathan Andrew Mitchell
Directors
Peter Richard Miller
Robert Barry Douglas
Neal Macrossan O’Connor
Chief Executive Officer
Andrew Michael Elf
Chief Financial Officer and Company Secretary
Gregory Michael Switala
Registered Office
Mitchell Services Ltd
ABN 31 149 206 333
112 Bluestone Circuit
Seventeen Mile Rocks
Qld 4073
Principal Place of Business
112 Bluestone Circuit
Seventeen Mile Rocks
Qld 4073
PO Box 3250
Darra Qld 4076
Share Registry
Advanced Share Registry
110 Stirling Highway
Nedlands Western Australia 6909
Ph: 08 9389 8033
Fax: 08 9262 3723
Website: www.advancedshare.com.au
Auditors
Jessups
Level 1, 19 Stanley Street
Townsville Qld 4810
Ph: 07 4755 3330
Fax: 07 4721 4513
Website: www.jessupsnq.com.au
Taxation Advisors
PricewaterhouseCoopers
123 Eagle Street
Brisbane Qld 4000
Ph: 07 4721 8500
Fax: 07 4721 8599
Website: www.pwc.com.au
Bankers
Suncorp Metway Ltd
61-73 Sturt St
Townsville Qld 4810
Ph: 07 3722 7222
Fax: 07 3722 7256
Website: www.mitchellservices.com.au
Ph: 07 4760 8229
Fax: 07 4771 6348
Website: www.suncorpbank.com.au
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MITCHELL SERVICES LTD MITCHELL SERVICES LTD ANNUAL REPORT 2016ANNUAL REPORT 2016 www.mitchellservices.com.au