ANNUAL
REPORT
2024
Mitchell Services is Australia’s most
diverse drilling company. Our world
class fleet is located in key exploration
and mining centres throughout
Australia, providing a range of drilling
services and innovations.
1
Mitchell Services Ltd
Annual Report 2024
Chairman’s Report
2
Chief Executive Officer’s Report
4
Current Business Summary
6
Directors’ Report
8
Corporate Governance Statement
26
Auditor’s Independence Declaration
33
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
34
Consolidated Statement of Financial Position
35
Consolidated Statement of Changes in Equity
36
Consolidated Statement of Cash Flows
37
Notes to the Consolidated Financial Statements
38
Consolidated Entity Disclosure Statement
76
Directors’ Declaration
77
Independent Auditor’s Report
78
Additional Australian Stock Exchange Information
82
Corporate Directory
84
MITCHELL SERVICES LTD
ACN 149 206 333
2
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
CHAIRMAN’S
REPORT
Dear Fellow Shareholders
On behalf of the Board of Mitchell Services Limited,
I am pleased to present the FY24 Annual Report and
to reflect on the past year which has seen the
Company deliver on its strategy whilst navigating
broader industry and economic conditions that have,
at times, been challenging.
VISION
The success of the organisation and our FY24
achievements were underpinned by our vision
of finding a better way to unlock resources
for our customers, for the benefit of our
shareholders, our people and the community.
A key aspect of this year’s success was the execution
of our capital management strategy that focused on
rapid and significant debt reduction whilst concurrently
maximising cash returns to shareholders. Further
details in relation to capital management performance
are provided later in this report, however in summary
the business has reduced net debt to virtually zero
(a decrease of approximately $40.0m) whilst returning
over $17.5m to shareholders in the form of dividends
(including the FY24 final dividend) and buybacks since
the inception of the capital management strategy in
early FY23. This is an outstanding result.
SAFETY PERFORMANCE
From an already industry leading position, pleasingly,
the overall safety performance of the Group continued
to be very strong.
We are continually reminded of the safety risks
associated with our business and the importance of
robust systems and controls to manage and mitigate
those risks.
As part of its commitment to safety, the Group
implemented an industry leading critical risk
management program across the organisation
approximately two years ago. This infield program
is designed to verify the existence and effectiveness
of critical control measures to prevent life changing
injuries and fatalities. Since implementation of the
Nathan Andrew Mitchell
Executive Chairman
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Mitchell Services Ltd
Annual Report 2024
program, the Group has seen a marked decrease in the
severity of safety related incidents.
The Board is proud of the safety performance and
culture within the business and remains vigilant to
minimise risk for our people.
FINANCIAL PERFORMANCE
FY24 was a standout year for the Company from a
financial perspective with material improvements in
earnings and cashflow performance compared to
FY23, whilst the balance sheet improvement over the
same period was transformational and provides the
business with capital management optionality heading
into FY25.
Profit and Loss
The Group generated post tax profits and earnings
per share in FY24 of $9.2m and 4.3c respectively
compared to the FY23 figures of $7.6m and 3.4c.
Cash Flow
Cashflows from operating activities increased by over
20% from $35.6m in FY23 to $43.1m in FY24. After a
substantial allocation of funds to shareholder returns,
debt repayments and capex, the Company’s cash
balance increased from $11.1m at 30 June 2023 to
$16.0m at 30 June 2024.
Balance Sheet
Given the significant improvement in profitability and
cashflow, Group net debt decreased by nearly 90% to
$1.9m at 30 June 2024.
CAPITAL MANAGEMENT
As mentioned earlier in this report, a key aspect of
this year’s success was the execution of the capital
management strategy that was initially formulated in
early FY23. The objective of the strategy was to reduce
net debt (with a targeted net debt at 30 June 2024 of
no more than $15.0m) whilst maximising cash returns
to shareholders along the way.
When measuring the business performance
against this strategy, I would certainly deem
FY24 to be a resounding success with net debt
at 30 June 2024 significantly lower than the
$15.0m target.
The Company has today declared an FY24 final
dividend of 2cps. Since the inception of the capital
management strategy (and including the FY24 final
dividend declared today), the Company has paid
approximately $13m in dividends and a further $4.7m
in share buybacks. Considering that the Company
reduced net debt from $40.0m to $1.9m concurrently
over the same period, this represents an outstanding
result and demonstrates the ability of the business to
generate significant and meaningful free cash flows.
FY25 STRATEGY
The overall strategy of the Company is to optimise
the long-term growth of the business and returns to
shareholders by:
•
Maintaining and, where possible, improving the
profitability of the existing business;
•
Identifying opportunities in the domestic mining
sector to provide new services to Tier 1 clients; and
•
Identifying drilling opportunities offshore for
existing clients.
With a significantly stronger balance sheet, the
Company now has the advantage of optionality and
will seek to optimise its capital allocation across the
four pillars of growth, debt management, dividends
and share buybacks.
In closing, I would once again like to thank all staff,
customers, suppliers and shareholders for your
continued support.
On behalf of the Board, thank you.
Nathan Andrew Mitchell
Executive Chairman
A key aspect of this year’s success was
the execution of our capital management
strategy that focused on rapid debt reduction
and maximising shareholder returns.
With a stronger balance sheet the business
now has the advantage of optionality.
4
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
CHIEF EXECUTIVE
OFFICER’S REPORT
Dear Shareholders
I am pleased to provide the following report for
Mitchell Services Limited (the Company) for the
financial year ended 30 June 2024 (FY24).
Operationally, FY24 represented another successful
year which saw the business benefit from significant
investment and operational heavy lifting that took
place during previous years.
Strong organic growth in FY23 and high-quality
revenue streams positioned the business to take
advantage of favourable industry conditions with the
demand for drilling services remaining strong amongst
the global mining majors. Approximately 90% of the
Company’s revenue was derived from global mining
majors with almost all of that revenue coming from
production, development and resource definition
drilling. High prices for key commodities continue to
drive this demand with 91% of total revenue coming
from gold, copper and steelmaking coal.
Importantly, the Company has continued to grow
revenue from geotechnical drilling services offered
to the civil construction industry. Revenue from this
sector grew by over 100% and now accounts for
approximately 3% of total revenue.
Of equal importance, it is worth noting that the
business has no exposure to lithium or nickel and
a very small exposure to the greenfield exploration
market which remains soft.
Utilisation levels in FY24, whilst still strong (at circa
80% across FY24) did reduce towards the end of the
year. The decrease was primarily driven by a reduction
in operating rigs under various existing contracts that
remain in place. The Company’s customer base remains
strong and the number of operating rigs associated
with these longer-term contracts will generally increase
and decrease in the ordinary course of business
throughout the contract term.
Andrew Michael Elf
Chief Executive Officer
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Mitchell Services Ltd
Annual Report 2024
The business delivered strong revenue and EBITDA
of $237m and $40.0m respectively, slightly down on
the FY23 result of $243m and $41m with the decrease
primarily due to lower utilisation levels.
Acknowledging that the capital management
strategy is extensively addressed in the Chairman’s
letter, it would be remiss of me not to comment on
the significant FY24 highlights which included a
transformational year-on-year net debt reduction of
$16m (or 89%) as well as record full year dividends
of 4 cents per share. Total capital expenditure for
FY24 was $17.0m (in line with expectations) and
maintenance capex continues to support high levels of
availability across all equipment with breakdown rates
remaining negligible.
I would like to acknowledge the performance and
achievements of our operational, safety, and support
teams who do such a fantastic job.
The Company’s safety team was named the National
Health and Safety team of the Year in the Australian
Workplace Health and Safety awards held during
FY24 with competition extending across all industries
and organisations of all sizes. I am extremely proud of
the safety performance and culture in the business.
The Victorian Women in Resources Awards were held
recently, and Alina Tyler, from Deepcore Drilling, was
awarded the 2024 Outstanding Trade Operator Award.
The award recognises the achievements of women
currently working in trade, operational or technical
roles across the entire Victorian resources industry.
The award reflects Alina’s dedication and also talks to
the wonderful culture that exists within the Company.
Looking ahead into FY25, I am anticipating another
busy and exciting year underpinned by a large tender
and opportunity pipeline.
One such opportunity of particular interest is our
potential entry into an emerging market following
reforms to Safeguard Mechanism legislation in
Australia. Mitchell Services has recently entered into
a 50/50 Joint Venture to address this market with
specialist mining and engineering advisory firm,
Talisman Partners. The newly incorporated Loop
Decarbonisation Solutions will offer end-to-end
decarbonisation solutions to a broad market of clients
who are required to reduce fugitive emissions from
their current operations under the legislation. With
joint Mitchell and Talisman capabilities, Loop can assist
in all aspects of the decarbonisation solution from
calculating initial marginal abatement cost curves to
operational execution (including drilling) to assurance
and reporting. Its very rare in the drilling industry
(or any industry for that matter), that an entirely new
market (which is yet to be fully quantified) emerges
over such a short period of time and I am excited to
see where this leads.
In closing, I would like to again thank our employees
for their hard work and dedication and shareholders for
their continued support.
Thank you.
Andrew Michael Elf
Chief Executive Officer
I am anticipating another busy and
exciting year underpinned by a large
tender and opportunity pipeline.
It’s very rare in the drilling industry that
an entirely new market emerges over
such a short period of time.
Annual Report 2024
Mitchell Services Ltd
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RETURN ON INVESTED
CAPITAL 16.5%
34%
FROM FY23
PROFIT AFTER
TAX $9.2m
21%
FROM FY23
VISION
“Finding a better
way to unlock
resources for
our customers,
for the benefit of
our shareholders,
our people and the
community.”
CURRENT
BUSINESS
SUMMARY
Annual Report 2024
7
Mitchell Services Ltd
NET DEBT
$1.9m
89%
FROM FY23
SAFETY PERFORMANCE
WINNER OF
PRESTIGIOUS
NATIONAL
SAFETY AWARD
RECORD OPERATING
CASHFLOW $43.1m
21%
FROM FY23
FY24 DIVIDENDS
OF 4.0cps
91%
FROM FY23
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Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
DIRECTORS’
REPORT
For the year ended 30 June 2024
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 2024 (FY24). In order to comply
with the provisions of the Corporations Act 2001, the
Directors’ report as follows.
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 over
35 years, he has a proven track record as an industry
leader in technical development and business growth.
As CEO of Mitchell Drilling Contractors prior to its
sale in 2008, Mr Mitchell led that business through
a period of rapid local growth and directed an
international expansion into India, China, Indonesia,
the United States of America and southern Africa.
Other current directorships include Mitchell Drilling
International Pty Ltd.
At the date of this report, Mr Mitchell has relevant
interests in 42,228,408 shares.
Scott David Tumbridge
(Non-Executive Director)
Mr Tumbridge was appointed as Executive Director
on 29 November 2019 following the acquisition of
Deepcore Drilling by the Company. He remained an
Executive Director until 31 January 2023 and became a
Non-Executive Director on 1 February 2023.
Mr Tumbridge (the founder of Deepcore Drilling) has
over 30 years’ experience in the Australasian mining
and drilling industries and a proven track record in
business development, innovation and operational
excellence. Mr Tumbridge brings a wealth of specialist
industry knowledge to the Mitchell Services board.
At the date of this report, Mr Tumbridge has relevant
interests in 16,184,612 shares.
Peter Richard Miller
(Non-Executive Director)
Mr Miller was appointed as Director on 8 February 2011.
Mr Miller has been involved in all aspects of the drilling
industry for the past 35 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 2,412,505 shares.
Robert Barry Douglas BCom, LLB
(Non-Executive Director)
Mr Douglas was appointed as Non-Executive Director
on 29 November 2013. Mr Douglas has over 25 years’
experience in finance and investment banking and is
currently an Executive Director of Morgans Financial.
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 career, 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 248,686 shares.
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Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
DIRECTORS’
REPORT
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 Remuneration and Nomination Committee.
Mr O’Connor also previously served as Chairman
of the Audit and Risk Committee from 21 October
2015 to 18 August 2020.
Mr O’Connor was formerly General Counsel and
Company Secretary and an Executive Committee
member of 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.
Mr O’Connor has served as a Non-Executive Director of
Sunstone Metals (STM) since April 2024 and previously
served on the Board of Maas Group Holdings Limited
(ASX:MGH) from November 2020 to August 2022.
At the date of this report, Mr O’Connor has relevant
interests in 131,499 shares.
Peter Geoffrey Hudson BA (Acc), GAICD, CA
(Non-Executive Director)
Mr Hudson was appointed as Non-Executive Director
on 20 July 2020 and is also a member of the
Remuneration and Nomination Committee and the
Chairman of the Audit and Risk Committee.
Mr Hudson is an experienced corporate transaction
specialist with over 25 years’ experience in mergers,
acquisitions, capital raisings, financial analysis, and
project management in Australia and overseas.
Previously a partner at global financial services firm
KPMG, he brings a wealth of financial, risk management
and corporate governance experience to the Board.
At the date of this report, Mr Hudson has relevant
interests in 20,000 shares.
Grant Eric Moyle
(Alternate Director)
Mr Moyle was appointed as Alternate Director for
Mr Nathan Mitchell on 30 May 2014.
Mr Moyle 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 283,532 shares.
CHIEF EXECUTIVE OFFICER
Andrew Michael Elf BCom, FCPA, MBA, GAICD
Andrew was appointed as Chief Executive Officer on
20 March 2014.
Andrew has over 25 years of 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.
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
Gregory Michael Switala BCom (Hons), CA
Greg joined Mitchell Services in 2014 and has over
20 years’ experience in audit and commercial
finance roles.
Over the past ten years, Greg has led the finance
team through a period of substantial growth that
has included significant corporate activity including
substantial acquisitions and capital (both debt and
equity) raisings.
10
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
DIRECTORS’
REPORT
PRINCIPAL ACTIVITIES
The Group provides exploration, mine site and
geotechnical drilling services to the exploration,
mining and civil construction industries within Australia
and is currently headquartered in Seventeen Mile
Rocks, Queensland.
The Group provides drilling solutions at all stages of
the mining lifecycle, in both the energy and minerals
sectors. The diversity in operations allows for better
management of the cyclical nature of commodity
prices, as well as giving employees exposure to various
forms of drilling as part of their career development.
The various stages of the mining lifecycle for which the
Group provides drilling services includes:
•
Greenfield exploration;
•
Project feasibility;
•
Mine site exploration and resource definition;
•
Development; and
•
Production.
There were no significant changes in the Group’s
nature of activities during the year.
CHANGES IN STATE OF AFFAIRS
There was no significant change in the state of affairs
of the Group during the financial year.
LIKELY DEVELOPMENTS
The Group will continue to pursue its principal
activities during the next financial year.
Further information about likely developments in the
operations of the Group and the expected results
of those operations in future financial years has not
been included in this report because disclosure of the
information would be likely to result in unreasonable
prejudice to the Group.
ENVIRONMENTAL REGULATIONS
The Group’s operations are not subject to any
particular and significant environmental regulation
under a law of the Commonwealth or 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.
REVIEW OF OPERATIONS
Safety
Finishing each day without harm is a core Mitchell
Services value and the Group is committed to the
safety of its most important asset — its people. The
Group is particularly focused on training to attract,
retain and further develop its crews to ensure that
service levels and the quality of the Mitchell brand
remain high.
As part of this commitment to finishing each day
without harm, the Group has implemented an industry
leading critical risk management program across the
organisation. This infield program is designed to verify
the existence and effectiveness of critical control
measures to prevent life changing injuries and fatalities.
The Group’s safety team was named the National
Health and Safety Team of the Year in the
2023 Australian Workplace Health and Safety awards
held during FY24 with competition extending across all
industries and organisations of all sizes. The Directors
of the Company are proud of this achievement and
the overall safety performance and culture across the
Group which remains industry leading.
Activity levels
Utilisation levels have decreased with the average
rig and total shift count of 72.5 and 40,380 being
down 6.5% and 11.4% respectively on FY23 (77.5 and
45,569). The decrease in utilisation was primarily
driven by a reduction in operating rigs under various
long-term contracts, all of which remain on foot. The
number of operating rigs associated with these longer-
term contracts will generally increase and decrease
in the ordinary course of business throughout the
contract term.
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Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
DIRECTORS’
REPORT
90
70
60
50
Year to 30 June 2023
Year to 30 June 2024
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
80
4,500
4,000
3,500
2,500
3,000
Year to 30 June 2023
Year to 30 June 2024
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
The charts below illustrate utilisation (rig count) and productivity (number of shifts) over the past 24 months.
The table below illustrates the revenue impact of the utilisation, productivity, pricing and revenue mix
over the past 24 months.
FY24
FY23
MOVEMENT
MOVEMENT %
Average operating rigs
72.5
77.5
(5.0)
(6.5%)
Number of shifts
40,380
45,569
(5,189)
(11.4%)
Revenue ($’000s)
236,829
243,144
(6,315)
(2.6%)
Customer base and revenue
break-down
As the charts below demonstrate, the
Group’s revenue continues to be derived
predominantly from large, multinational
mining clients (Tier 1 clients). The drilling
services that were provided to these
Tier 1 clients were generally at producing
mine sites and linked to the resource
definition, development and production
stages within the mine life cycle as
opposed to greenfield exploration.
Diversification in revenue streams
including the mix between surface and
underground drilling as well as the mix
between different commodity types
continues to be a focus of the Board and
management. The relevant proportions of
FY24 revenue derived from surface drilling
and underground drilling of 54.2% and
45.6% respectively, while still reasonably
balanced, have changed from FY23 which
was effectively a 50-50 split.
Revenue by Client Type
Other clients
Tier 1 clients
FY22
88.4%
11.6%
FY23
88.0%
12.0%
FY24
86.7%
13.3%
Revenue by Drilling Type
46.5%
53.4%
54.2%
45.6%
50.2%
49.7%
FY22
FY23
FY24
Underground
Surface
Other
Monthly Number of Rigs Operating
(over the past 24 months)
Monthly Number of Shifts Worked
(over the past 24 months)
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Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
DIRECTORS’
REPORT
By commodity type, a proportionally
greater utilisation of surface rigs in
Queensland and New South Wales has
resulted in a higher share of revenue
contributed by steelmaking coal (44.2%
compared to 39.1% in FY23) while the
share of gold in the mix has also increased
(42.3% compared to 41.1% in FY23) given
proportionally greater revenue derived
from a gold producing client in the
Northern Territory. A reduction overall
in other base metals and an increase
in geotechnical services makes up
the balance.
The geographical mix corresponds with
drilling and commodity types referenced
above, with revenue from Queensland,
Victoria and New South Wales comprising
54.1%, 20.1% and 14.4% respectively
(FY23: 56.4%, 23.4% and 11.1%) while
FY24 operations in the Northern Territory
of 10.6% (FY23: 5.5%) are also significant.
Revenue by Commodity
FY22
FY23
FY24
44.2%
42.3%
41.1%
4.3%
6.0%
8.7%
3.1%
32.1%
55.8%
10.1%
8.2%
39.1%
Gold
Steelmaking coal
Copper
Geotech
Lead/zinc/silver
FY22
FY23
FY24
54.1%
14.4%
20.1%
10.6%
49.0%
14.1%
5.9%
28.4%
56.4%
11.1%
23.4%
2.6%
3.2%
NSW
QLD
TAS
VIC
WA
NT
5.5%
Profitability
The table below summarises the key profitability metrics for FY24 versus the prior corresponding period (FY23).
FY24
$M
FY23
$M
Movement
$M
Movement
%
Revenue1
236.8
243.1
(6.3)
(2.6%)
Operating expenses
(196.4)
(201.9)
5.5
(2.7%)
EBITDA2
40.4
41.2
(0.8)
(1.9%)
Depreciation and amortisation3
(25.6)
(28.6)
3.0
(10.5%)
EBIT
14.8
12.6
2.2
17.5%
Finance costs4
(1.5)
(2.3)
0.8
(34.8%)
EBT
13.3
10.3
3.0
29.1%
Taxation expense
(4.1)
(2.7)
(1.4)
51.9%
Profit after tax
9 .2
7.6
1.6
21.1%
Basic Earnings per share (cents per share)5
4.3
3.4
0.9
26.5%
1.
Revenue has decreased by approximately 2.6% from $243.1m in FY23 to $236.8m in FY24, with the reduction primarily driven by
lower utilisation, with average rig and total shift count down 6.5% and 11.4% respectively. FY23 benefited significantly from a larger,
unprecedented portion of the fleet providing highly technical specialist drilling services and this carried over into the earlier part of
FY24 but the majority of FY24 was more in line with normalised pricing levels while also being impacted by a reduction in operating
rigs under existing contracts.
2.
FY24 EBITDA is broadly in line with FY23 with a small decrease of $0.8m (down 1.9%) driven by lower fleet utilisation as well as the
comparatively unfavourable mix in the nature of drilling services as referenced in (i) above.
3.
Depreciation and amortisation in FY24 of $25.6m was 10.5% lower than the FY23 figure of $28.6m with the decrease being a
combination of nil FY24 amortisation being recognised on the now fully amortised customer contract intangible assets acquired per
the Deepcore acquisition in FY20 (FY23: $$1.1m) while depreciation is down $1.9m given lower overall levels of property, plant and
equipment.
4.
Finance costs in FY24 of $1.5m were 34.8% lower than the FY23 figure of $2.3m as a result of a significant decrease in gross debt
which reduced from $28.8m to $18.0m during FY24.
5.
Basic Earnings per share (EPS) in FY24 of 4.3 cents per share was 26.5% greater than FY23 (3.4 cents per share) due to a combination
of the greater Profit after tax generated compared to the previous year and also the benefit derived from the ongoing share
buyback activity during the current year which has reduced the quantum of issued capital, deriving a greater fractional return for
each shareholder.
Revenue by Geography
13
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
DIRECTORS’
REPORT
Cash flow
The table below summarises the key cashflow metrics for FY24 versus the prior corresponding period (FY23).
FY24
$M
FY23
$M
Movement
$M
Movement
%
Cash flows from operating activities1
43.1
35.6
7.5
21.1%
Payments for PPE (net of proceeds from sales)2
(10.2)
(7.8)
(2.4)
30.8%
Final Deepcore earnout payment
—
(0.2)
0.2
(100.0%)
Payments for shares bought back3
(2.2)
(2.5)
0.3
(12.0%)
Dividends paid3
(8.8)
—
(8.8)
100.0%
Net repayment of borrowings2
(17.0)
(17.7)
0.7
(4.0%)
Increase in cash and cash equivalents
4.9
7.4
(2.5)
(33.8%)
1.
Cash flow from operating activities increased by 21.1% from $35.6m in FY23 to $43.1m. This $7.5m improvement was driven by lower
finance costs and an overall improvement in the Group’s working capital position.
2.
Capital expenditure and repayment of borrowings are largely comparable with FY23 levels.
3.
In line with the capital management strategy (refer following section), the Group has returned a total of $11.0m to shareholders during
FY24 (FY23: $2.5m) leveraging from the significant operating cash flows generated during the year.
Financial position
The following table summarises the Group’s financial position at 30 June 2024 and 2023.
2024
$M
2023
$M
Movement
$M
Movement
%
Current assets
57.5
56.8
0.7
1.2%
Non-current assets
69.9
77.8
(7.9)
(10.2%)
Total assets
127.4
134.6
(7.2)
(5.3%)
Current liabilities
48.6
47.5
1.1
2.3%
Non-current liabilities
13.2
20
(6.8)
(34.0%)
Total liabilities
61.8
67.5
(5.7)
(8.4%)
Net assets
65.6
67.1
(1.5)
(2.2%)
The Group’s current ratio has remained relatively flat, reducing slightly to 1.18 at 30 June 2024 compared to 1.20
at 30 June 2023.
Strong operating cashflow generation (refer cash flow commentary) has also assisted in funding a
significant reduction in net debt. At 30 June 2024 this sits at $1.9m, down $15.7m (89.2%) on the balance
at 30 June 2023 of $17.6m.
14
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
DIRECTORS’
REPORT
Capital management
The Group remains committed to the long-term growth
of the business and optimising returns to shareholders.
The Group had targeted net debt of $15.0m by 30 June
2024 but has materially outperformed this with a
balance of $1.9m being recorded at that date. This
strengthened balance sheet has provided the Group
with the advantage of optionality and will seek to
optimise its capital allocation across the four pillars of
dividends, buybacks, growth and debt management.
While a ceiling of $15.0m will remain the longer-term
net debt target, the Group may at times and where
appropriate, look to increase or decrease this in the
short-term subject to growth opportunities that
may present.
FY24 capital management performance is
discussed below:
Dividends
During FY24, the Group paid a partially franked
dividend of 2.08 cents per share, $4.5m, in September
2023 (a final dividend in relation to FY23) and, having
substantially utilised available franking credits, an
unfranked dividend of 2.00 cents per share, $4.3m,
in March 2024 (an interim dividend in relation to FY24),
being $8.8m in total (FY23: nil).
Share buybacks
On 14 July 2022, the Group commenced a 12 month
on-market share buyback on the following key terms:
•
The price paid for shares purchased under the
buyback will be no more than 5% above the
volume weighted average price of the Company’s
shares over the five days of trading prior to the
purchase; and
•
The number of shares purchased under the
buyback will not exceed 10% of the Company’s
fully paid ordinary shares.
The buyback, initially expected to run till at least
30 June 2023, was extended by a further 12 months
and has since been extended to no later than
July 2025.
Pursuant to the terms of the on-market share buyback,
the Group purchased back approximately 5.7m shares
in FY24 for combined consideration of $2.2m (FY23:
6.8m shares for a combined consideration of $2.5m),
net of transaction costs.
As at 30 June 2024 (and since the inception of the
buyback in July 2022), the Group had purchased back
12.4m shares at a combined cost of $4.7m ($0.378 per
share) net of transaction costs.
EVENTS AFTER THE REPORTING DATE
On-market share buyback
As referred above, the Group is undergoing an
on-market share buyback with a cumulative
12.4m shares having been bought back for a combined
consideration of $4.7m, net of transaction costs, by
30 June 2024.
Subsequent to 30 June 2024 and as at 21 August 2024,
the Group has bought back an additional 64,565 shares
for a combined consideration of $25,428, meaning,
to date, the number of shares bought back total
$12.4m shares for a combined consideration of
$4.7m, net of transaction costs.
Dividends
On 21 August 2024, the Board declared an unfranked
dividend of 2.00 cents per share to holders of
fully paid ordinary shares on 29 August 2024
(Record Date). The payment date for the dividend
is 16 September 2024 and the total estimated
dividend is $4.3m.
SHARES UNDER OPTION
Details of unissued shares or interests under option as
at the date of this report are:
GRANT DATE
EXPIRY DATE
EXERCISE
PRICE
NUMBER
UNDER
OPTION
23 May 2016
23 May 2025
$0.395 1,367,898
4 August 2017
4 August 2026
$0.539
841,360
14 June 2018
14 June 2027
$0.703
811,312
14 June 2019
14 June 2028
$1.100
617,489
1 June 2020
1 June 2029
$0.910
812,462
31 May 2021
31 May 2030
$0.690 1,048,870
23 June 2022
23 June 2031
$0.630 1,436,806
31 May 2023
31 May 2032
$0.620 1,606,007
20 June 2024
20 June 2033
$0.555
1,582,115
10,124,319
Options per the above table were offered under the
Company’s Executive Share and Option Plan (ESOP).
Further details in relation to the ESOP are provided as
part of the Remuneration Report on pages 16 to 25.
During the year ended 30 June 2024, there were
no shares in Mitchell Services Limited issued on the
exercise of options (2023: nil).
15
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
DIRECTORS’
REPORT
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 $256,384.
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.
PROCEEDINGS ON BEHALF OF
THE COMPANY
No person has applied for leave of court to bring
proceedings on behalf of the Company or intervene in
any proceedings to which the Company is a party for
the purpose of taking responsibility on behalf of the
Company for all or any part of those proceedings.
The Company was not a party to any such proceedings
during the year.
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, 11 Board meetings, 2 Remuneration
and Nomination Committee meetings and 3 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. Mitchell
11
11
—
—
—
—
P. Miller
11
9
—
—
—
—
R. Douglas
11
11
2
2
3
3
N. O’Connor
11
11
2
2
3
3
S. Tumbridge
11
10
—
—
—
—
P. Hudson
11
10
2
2
3
3
NON-AUDIT SERVICES
There were no amounts paid or payable to the auditor for non-audit services provided during the year by the
auditor. Refer to Note 22 to the Financial Statements.
AUDITOR’S INDEPENDENCE DECLARATION
The Auditor’s Independence Declaration is included on page 33 of the Annual Report.
16
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
DIRECTORS’
REPORT
REMUNERATION REPORT — AUDITED
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 2024. 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.
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)
•
Scott David Tumbridge (Non-Executive Director)
•
Peter Richard Miller (Non-Executive Director)
•
Robert Barry Douglas (Non-Executive Director)
•
Neal Macrossan O’Connor (Non-Executive Director)
•
Peter Geoffrey Hudson (Non-Executive Director)
•
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 short-term and
long-term incentives to key employees based on key
performance areas affecting the Group’s financial,
operational and safety 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 Remuneration Policy is developed by the
Remuneration and Nomination Committee and
approved by the Board;
•
All KMP receive a base salary (which is based on
factors such as length of service and experience)
and superannuation. They may also receive fringe
benefits and performance incentives (both short
term and long term);
•
The extent to which KMP receive performance
incentives will depend on the performance of the
Group with reference to specific key performance
indicators;
•
The performance indicators relating to incentives
are aligned with the interests of the Group and
therefore shareholders; and
•
The Remuneration and Nomination Committee
reviews KMP packages annually by reference to the
Group’s performance, executive performance and
comparable information from industry sectors.
Executive remuneration components
Under the Group’s remuneration framework for the
year ended 30 June 2024, the following remuneration
components were available to executive KMP:
•
Fixed remuneration that comprises salary and other
benefits including superannuation.
•
Short term incentives that comprise a cash-based
performance bonus, the extent of which will depend
on the Group’s financial and safety performance
and is designed to attract the highest calibre
of executives and senior managers and reward
them for performance results leading to growth in
shareholder value.
•
Long term incentives that comprise an equity
only component whereby equity instruments
are issued (subject to financial, operational and
safety performance-based vesting conditions) to
executives and senior managers under the Group’s
Executive Share and Option Plan (ESOP) designed
to reward those executives and managers for long
term growth in shareholder value.
The above structure is designed to provide an
appropriate mix of variable and fixed remuneration and
to provide an appropriate mix of short-term and long-
term incentives to attract and retain high quality KMP
and to align incentives with the short-term and long-
term objectives of the Group.
Fixed Remuneration
The level of fixed remuneration is determined based on
various factors including length of service, experience,
qualifications and with reference to remuneration paid
by similar sized companies in similar industries and is
designed to attract and retain high quality executive
KMP. KMP receive a superannuation guarantee
contribution required by the government, which
was 11.0% (2023: 10.5%) of the individual’s ordinary
earnings, and do not receive any other retirement
benefits. Accrued entitlements are paid to KMP upon
cessation of employment. KMP will receive redundancy
benefits if applicable.
17
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
DIRECTORS’
REPORT
The fixed remuneration paid to executive KMP during the 2024 and 2023 financial years is set out below:
EXECUTIVE KMP
SHORT-TERM
EMPLOYEE
BENEFITS
POST-
EMPLOYMENT
BENEFITS
LONG-TERM
MONETARY
BENEFITS
NON-
MONETARY
BENEFITS
TOTAL FIXED
REMUNERATION
Salary
$
Superannuation
$
Long Service
Leave2
$
Motor Vehicles3
$
Total
$
Nathan Andrew Mitchell
2024
200,000
22,000
—
—
222,000
Executive Chairman
2023
200,000
21,000
—
—
221,000
Scott David Tumbridge1
2024
—
—
—
—
—
Executive Director
2023
112,154
11,776
—
—
123,930
Andrew Michael Elf
2024
427,500
47,025
8,755
21,931
505,211
Chief Executive Officer
2023
430,961
45,251
9,213
14,438
499,863
Gregory Michael Switala
2024
335,585
36,667
12,090
9,934
394,276
Chief Financial Officer
and Company Secretary
2023
324,167
31,786
11,926
9,934
377,813
1.
Effective 1 February 2023, Scott Tumbridge’s directorship appointment was amended from being executive to non-executive in nature
with his salary being revised to $70,000 from the previous $180,000 (both exclusive of superannuation). The amounts disclosed above
relate solely to earnings in his executive capacity.
2.
These amounts were not actually provided to KMP during the financial year. This is the change in accrued long service leave and is
measured in accordance with AASB 119 Employee Benefits.
3.
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.
Short term incentives
During the 2024 and 2023 financial years, the following cash-based, short-term performance bonuses were paid
to executive KMP.
EXECUTIVE KMP
PERFORMANCE BONUS
$
PERCENTAGE OF FIXED
REMUNERATION
Andrew Michael Elf
2024
168,750
33.40%
Chief Executive Officer
2023
168,750
34.39%
Gregory Michael Switala
2024
123,750
31.39%
Chief Financial Officer and
Company Secretary
2023
112,500
30.75%
The performance bonuses paid during the 2024 and 2023 financial year were based on the financial results and
safety performance of the Group during the 2023 and 2022 financial years respectively. The extent of the bonus
paid is at the discretion of the Board. To demonstrate the relationship between the short-term performance bonus
payments and Group performance, the table below sets out summary information about the Group’s revenue,
EBITDA, earnings per share, share price and safety performance between 30 June 2020 and 30 June 2024.
18
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
DIRECTORS’
REPORT
30 JUN 20
30 JUN 21
30 JUN 22
30 JUN 23
30 JUN 24
Revenue ($000’s)
175,555
191,384
213,369
243,144
236,829
EBITDA ($000’s)
34,951
25,875
32,153
41,167
40,384
Earnings per share (cents per share)
3.8
(3.0)
0.0
3.4
4.3
Share price (closing)
$0.54
$0.40
$0.32
$0.39
$0.445
Lost Time Injury Frequency Rate (LTIFR)
2.44
0.66
1.23
1.18
1.92
Long-term employee benefits
Mitchell Services Limited operates an Executive Share
and Option Plan (ESOP) for executives and senior
employees of the Group. In accordance with the
provisions of the plan, as approved by shareholders
at a previous annual general meeting, the Board may
designate a Director or employee of the Company
as an eligible participant of the ESOP (Eligible
Participant). The Board may offer rights, options or
shares to an Eligible Participant under the ESOP. A
participant is not required to pay for the grant of any
rights or options or for the issue of shares.
The objectives of the ESOP are to:
•
Attract and retain a high standard of managerial
and technical personnel for the benefit of
the Group;
•
Establish a method by which Eligible Participants
can participate in future growth and profitability of
the Group; and
•
Provide an incentive and reward for Eligible
Participants for their contributions to the Group.
Equity instruments issued under the ESOP are subject
to satisfaction of certain vesting conditions (tested
two years after the offer date). These performance
conditions are detailed on page 21.
The Board may, at its absolute discretion, vary, add,
remove or alter the vesting conditions and indicative
proportional allocation for respective Eligible
Participant roles in circumstances in which the Board
considers that such a change is appropriate to ensure
that the vesting conditions and proportional allocation
of them continue to represent a fair measure of
performance. The vesting conditions are tested two
years after the relevant securities are offered to an
Eligible Participant.
The ESOP instruments are offered under the following
major terms: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 at an agreed purchase
price (exercise price) as outlined in the offer.
b)
The options will expire on a date that is the
earlier of:
i. the date upon which it is deemed that the
vesting conditions have not been met
ii. the date upon which the employee ceases
employment
iii. seven years after vesting date.
c)
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.
Offers made under the ESOP in 2024 and 2023
The table below summarises the shares and options
offered to KMP pursuant to the ESOP during the
2024 and 2023 financial years.
Using a Black-Scholes pricing model for the options
and closing market price for the shares, the table
also sets out the estimated fair value of the ESOP
instruments at grant date (or estimated grant date)
and the percentage that value represents with
reference to the KMP’s fixed remuneration. The table
also demonstrates that a significant majority of equity
instruments granted in each year under the ESOP were
in the form of options (as opposed to shares) and that
the exercise prices (or “strike prices”) of those options
were between 25% and 60% greater than the 30-day
VWAP of MSV shares at the date of the offer. This
means that for an option granted under the ESOP to
be “in the money”, shareholder value (in the form of
the share price) would need to increase significantly
between the offer date and the exercise date.
All instruments offered under the ESOP in 2024 and
2023 and shown in the table below are subject to
vesting conditions which will be tested two years
after the offer date. That is, vesting conditions will be
tested on 31 May 2025 for offers made in 2023 and on
20 June 2026 for offers made in 2024.
19
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
DIRECTORS’
REPORT
KMP
AWARD
OFFER
DATE1
NUMBER OF
INSTRUMENTS
FAIR
VALUE PER
INSTRUMENT
AT GRANT
DATE*
FAIR
VALUE OF
INSTRUMENTS
AT GRANT
DATE*
OPTION
STRIKE
PRICE
DATE AWARD
MAY VEST
Andrew Michael Elf
Options 20 June 2024
410,528
$0.1020
$41,874
$0.555 20 June 2026
Shares
20 June 2024
123,319
$0.4450
$54,877
na 20 June 2026
Gregory Michael Switala
Options 20 June 2024
300,002
$0.1020
$30,600
$0.555 20 June 2026
Shares
20 June 2024
90,117
$0.4450
$40,102
na 20 June 2026
Andrew Michael Elf
Options 31 May 2023
414,552
$0.0723
$29,951
$0.62
31 May 2025
Shares
31 May 2023
124,528
$0.3850
$47,943
na
31 May 2025
Gregory Michael Switala
Options 31 May 2023
304,047
$0.0723
$21,967
$0.62
31 May 2025
Shares
31 May 2023
91,333
$0.3850
$35,163
na
31 May 2025
1
Reflects date these options were initially offered. These options will only become exercisable on the vesting date (the extent to which
will be subject to the achievement of vesting conditions) and, as such, the grant date for purposes of AASB 2 Share-Based Payment
expense recognition is deferred until such time. The grant date fair value is estimated at the reporting date.
*
For purposes of the above table, the fair value of the shares was determined with reference to the closing market price of a fully paid
ordinary MSV share. In the case of the options, fair value was determined using a Black-Scholes pricing model with the following key
assumptions and inputs in the measurement:
PROVISIONALLY OFFERED
DURING YEAR ENDED
30 JUNE 2024
PROVISIONALLY OFFERED
DURING YEAR ENDED
30 JUNE 2023
Share price
$0.4450
$0.3850
Exercise price
$0.5550
$0.6200
Expected volatility
47%
47%
Expected life (after vesting)
3.5 years
3.5 years
Risk-free interest rate
4.10%
4.01%
Dividend yield
5.55%
3.24%
Fair value per option
$0.1020
$0.0723
Due to the deferral of the grant date (for purposes of AASB 2 Share Based Payment expense recognition)
until the date upon which vesting is determined, the grant date fair value has been updated and provisionally
estimated at the year-end date.
With respect to the 2023 comparatives above, the fair values attributed reflect the valuations disclosed in the
2023 Remuneration Report based on valuations at that time and have not been updated to reflect the change in
market values as at 30 June 2024.
The vesting conditions in relation to the 2023 and 2024 offers are as follows:
a)
Reported profit after tax performance of the Company having regard to respective prior year’s profit
performance and performance against budget over the vesting period.
b)
The Company’s share price performance between the date of the offer and vesting date
c)
The Company’s safety performance across all operations as determined on a financial year annual LTIFR
(Lost Time Injury Frequency Rate) basis having regard to the respective prior year’s LTIFR performance, and
d)
EBITDA performance of the Company having regard to respective prior years EBITDA performance and
performance against budget over the vesting period.
20
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
DIRECTORS’
REPORT
The proportion of the vesting conditions listed above varies according to each Eligible Participant’s role, with the
following table providing indicative guidelines.
ROLE
(a)
(b)
(c)
(d)
Chief Executive Officer
25%
25%
25%
25%
Corporate Management
25%
25%
25%
25%
Operational Management
—
—
50%
50%
Vesting of 2022 and 2021 ESOP instruments in 2024 and 2023
The table below summarises the equity instruments offered to KMP pursuant to the ESOP during the 2022 and
2021 financial years and the extent of vesting of those instruments in 2024 and 2023.
KMP
AWARD
OFFER
DATE2
NUMBER OF
INSTRUMENTS
VESTED IN
FY2024
VESTED IN
FY2023
FAIR
VALUE PER
INSTRUMENT
AT VESTING
DATE
EXERCISABLE
AT 30 JUNE
2024
OPTION
STRIKE
PRICE
Andrew
Michael Elf
Options
23 June 2022
425,566
383,009
—
$0.077
383,009
$0.63
Shares
23 June 2022
127,836
115,052
—
$0.420
na
na
Gregory
Michael
Switala
Options
23 June 2022
284,285
255,857
—
$0.077
255,857
$0.63
Shares
23 June 2022
85,397
76,857
—
$0.420
na
na
Andrew
Michael Elf
Options
31 May 2021
258,366
—
180,856
$0.053
180,856
$0.69
Shares
31 May 2021
103,481
—
72,437
$0.350
na
na
Gregory
Michael
Switala
Options
31 May 2021
167,710
—
117,397
$0.053
117,397
$0.69
Shares
31 May 2021
77,610
—
54,327
$0.350
na
na
2
Reflects date these options were initially offered. These options only became exercisable on the vesting date (the extent to which was
subject to the achievement of vesting conditions) and, as such, the grant date for purposes of AASB 2 Share-Based Payment expense
recognition was deferred until 23 June 2024 for 2022 ESOP instruments and 31 May 2023 for 2021 ESOP instruments.
*
For purposes of the above table, the fair value of the shares was determined with reference to the closing price of the Company’s fully
paid ordinary shares on vesting date. In the case of the options, fair value was determined using a Black-Scholes pricing model with the
following key assumptions and inputs in the measurement:
VESTED DURING YEAR
ENDED 30 JUNE 2024
VESTED DURING YEAR
ENDED 30 JUNE 2023
Share price
$0.4200
$0.3475
Exercise price
$0.63
$0.69
Expected volatility
47%
50%
Expected life (after vesting)
3.5 years
3.5 years
Risk-free interest rate
3.92%
3.37%
Dividend yield
5.55%
3.60%
Fair value per option
$0.077
$0.053
21
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
DIRECTORS’
REPORT
In making a determination as to the extent of vesting of the 2021 ESOP instruments (in 2023), Directors
considered the Group’s performance against the following applicable vesting conditions:
a)
EBITDA performance of the Group having regard to respective prior years’ EBITDA performance,
performance against budgets and general market conditions between the date of the offer and the
vesting date
b)
share price performance between the date of the offer and the vesting date
c)
safety performance across all operations as determined on a financial year annual TRIFR basis, having regard
to respective prior years’ TRIFR performance
d)
operational performance, having particular regard to key operational metrics.
The proportion of the vesting conditions listed above varies according to each Eligible Participant’s role, with the
following table providing indicative guidelines.
ROLE
(a)
(b)
(c)
(d)
Chief Executive Officer
30%
30%
30%
10%
Corporate Management
40%
40%
20%
—
Operational Management
—
—
50%
50%
In making a determination as to the extent of vesting of the 2022 ESOP instruments (in 2024), Directors
considered the Group’s performance against the following applicable vesting conditions:
a)
NPAT performance of the Group having regard to respective prior years’ NPAT performance and performance
against budget over the vesting period;
b)
share price performance between the date of the offer and the vesting date;
c)
safety performance across all operations as determined on a financial year annual TRIFR basis, having regard
to respective prior years’ TRIFR performance; and
d)
EBITDA performance of the Group having regard to respective prior years’ EBITDA performance and
performance against budget over the vesting period.
The proportion of the vesting conditions listed above varies according to each Eligible Participant’s role, with the
following table providing indicative guidelines.
ROLE
(a)
(b)
(c)
(d)
Chief Executive Officer
25%
25%
25%
25%
Corporate Management
30%
30%
20%
20%
Operational Management
—
—
50%
50%
To demonstrate the relationship between the extent of vesting and the Group’s performance over the applicable
vesting periods, the table below sets out summary information about the EBITDA, NPAT, share price, safety and
operational (revenue) performance between 30 June 2020 and 30 June 2024.
30 Jun 20
30 Jun 21
30 Jun 22
30 Jun 23
30 Jun 24
EBITDA ($000’s)
34,951
25,875
32,153
41,167
40,384
Share price (30-day VWAP)
48.5c
40.5c
29.8c
34.3c
43.3c
Total Recordable Injury
Frequency Rate (TRIFR)
11.62
7.34
9.20
4.30
6.4
Revenue ($000’s)
175,554
191,364
213,369
243,144
236,829
NPAT ($000’s)
7,203
(5,899)
16
7,609
9,175
22
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
DIRECTORS’
REPORT
Employment details of members of Key
Management Personnel
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.
NOTICE PERIOD
Andrew Michael Elf
3 months
Gregory Michael Switala
3 months
Non-Executive Director Remuneration
Fees for Non-Executive Directors are set at a level
to attract and retain Directors with the necessary
skills and experience to allow the Board to have a
proper understanding of, and competence to deal
with, current and emerging issues. Remuneration
for Non-Executive Directors is reviewed by the
Remuneration and Nomination Committee and set by
the Board, taking into account external benchmarking
when required. The Non-Executive remuneration
levels reflect the demands and responsibilities of
the Directors but also reflect the historical financial
position and performance of the Group in recent
years following prolonged periods of subdued general
market conditions in the broader resources and mining
services sectors.
In addition to a cash-based fee (or salary), Non-
Executive Directors receive a superannuation
guarantee contribution required by the government,
which during FY24 was 11.0% of the individual’s
ordinary earnings, and do not receive any other
retirement benefits.
The aggregate cap on annual fees paid to
Non-Executive Directors is currently $450,000, as
approved by shareholders at the 2020 Annual General
Meeting. The remuneration levels for Non-Executive
Directors (including fees for the Chairman of the Audit
& Risk Committee and Remuneration and Nominations
Committee) is summarised below (exclusive of
superannuation).
FY24
$
FY23
$
Non-Executive Director Fees
70,000
70,000
Chairman of the Audit and
Risk Committee
10,000
10,000
Chairman of the Remuneration
and Nomination Committee
10,000
10,000
Committee member
5,000
5,000
23
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
DIRECTORS’
REPORT
Remuneration of Key Management Personnel
The compensation of each member of the KMP of the Group is set out below.
SHORT
TERM
EMPLOYEE
BENEFITS
SHORT
TERM
INCEN-
TIVES
NON-
MONETARY
BENEFITS
POST-
EMPLOYMENT
BENEFITS
LONG-TERM
EMPLOYEE BENEFITS
PERFORMANCE
RELATED %
Salary*
$
Bonus
$
Motor
Vehicles*2
$
Super-
annuation*
$
Long
Service
Leave*4
$
Shares3
$
Options3
$
Nathan Andrew
Mitchell
2024
200,000
—
—
22,000
—
—
—
—
Executive Chairman
2023
200,000
—
—
21,000
—
—
—
—
Scott David
Tumbridge
2024
70,000
—
—
7,700
—
—
—
—
Non-Executive
Director1
2023
135,487
—
—
14,226
—
—
—
—
Peter Richard Miller
2024
70,000
—
—
7,700
—
—
—
—
Non-Executive
Director
2023
70,000
—
—
7,350
—
—
—
—
Robert Barry
Douglas
2024
80,000
—
—
8,800
—
—
—
—
Non-Executive
Director
2023
80,000
—
—
8,400
—
—
—
—
Neal Macrossan
O’Connor
2024
85,000
—
—
9,350
—
—
—
—
Non-Executive
Director
2023
85,000
—
—
8,925
—
—
—
—
Peter Geoffrey
Hudson
2024
85,000
— —
9,350
—
—
—
—
Non-Executive
Director
2023
85,000
—
—
8,925
—
—
—
—
Andrew
Michael Elf
2024
427,500
168,750
21,931
47,025
8,755 52,077
33,289
33.5%
Chief Executive
Officer
2023
430,961
168,750
14,438
45,251
9,213
34,449
16,395
30.5%
Gregory Michael
Switala
2024
335,585
123,750
9,934
36,667
12,090
36,481
23,384
31.8%
Chief Financial
Officer and
Company Secretary
2023
324,167
112,500
9,934
31,786
11,926
23,991
10,993
28.1%
*
Represents fixed remuneration.
1
Effective 1 February 2023, Scott Tumbridge’s directorship appointment was amended from being executive to non-executive in nature
with his salary being revised to $70,000 from the previous $180,000 (both exclusive of superannuation). The disclosures above
combine his amounts earned in both capacities over the year ended 30 June 2023.
2
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.
3
These amounts were not actually provided to KMP during the financial year. The figures are calculated in accordance with the Australian
Accounting Standards and are the amortised AASB fair values of equity instruments (whether vested or not) that have been granted
to KMP. Refer to page 18 of this Remuneration Report for information on awards during the financial year and the vesting status of
previous year’s awards.
4
This is the change in accrued long service leave and is measured in accordance with AASB 119 Employee benefits.
24
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
DIRECTORS’
REPORT
KMP Shareholding
The movement during the reporting period in the number of ordinary shares in Mitchell Services Limited held
directly, indirectly or beneficially, by each KMP, including their related parties, is as follows:
HOLDING AT
1 JULY 2023
SHARES RECEIVED
PURSUANT TO ESOP
NET OTHER
CHANGES*
HOLDING AT 30 JUNE
2024
Executive KMP
Nathan Andrew Mitchell
41,858,408
—
370,000
42,228,408
Andrew Michael Elf
657,192
115,052
(772,244)
—
Gregory Michael Switala
54,372
76,857
(131,229)
—
Non-Executive KMP
Peter Richard Miller
2,412,505
—
—
2,412,505
Robert Barry Douglas
248,686
—
—
248,686
Neal Macrossan O’Connor
131,499
—
—
131,499
Peter Hudson
—
—
20,000
20,000
Scott David Tumbridge
16,184,612
—
—
16,184,612
* Net other changes represent shares that were purchased or sold during the year
The movement during the reporting period in the number of options to purchase ordinary shares in Mitchell
Services Limited held directly, indirectly or beneficially, by each KMP, including their related parties, is as follows:
HOLDING AT
1 JULY 2023
OPTIONS GRANTED
PURSUANT TO ESOP
OPTIONS THAT LAPSED
UPON VESTING
DETERMINATION
HOLDING AT
30 JUNE 2024
EXERCISABLE
AT 30 JUNE
2024*
Executive KMP
Nathan Andrew Mitchell
—
—
—
—
—
Andrew Michael Elf
2,678,686
410,528
(42,557)
3,046,657
2,221,576
Gregory Michael Switala
1,864,135
300,002
(28,428)
2,135,709
1,531,660
Non-Executive KMP
Peter Richard Miller
—
—
—
—
—
Robert Barry Douglas
—
—
—
—
—
Neal Macrossan
O’Connor
—
—
—
—
—
Scott David Tumbridge
—
—
—
—
—
* Options granted pursuant to the 2023 and 2024 ESOP offers remain subject to the determination of vesting conditions and as such are
not exercisable at 30 June 2024. The strike prices of options that are exercisable at 30 June 2024 vary between $0.395 and $1.10.
25
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
DIRECTORS’
REPORT
Other transactions with KMP
A number of KMP, or their related parties, hold
positions in other entities that result in them having
control, or joint control, over the financial or operating
policies of those entities.
A number of these entities transacted with the Group
during the year. The terms and conditions of the
transactions with KMP and their related parties were
no more favourable than those available, or which
might reasonably be expected to be available, in
similar transactions to non-KMP related entities on an
arm’s length basis.
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 21st day of August 2024
26
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
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 as outlined in the 4th edition of the Corporate
Governance Principles and Recommendations
(‘Recommendations’) for the financial year ended
30 June 2024.
1.
BOARD OF DIRECTORS
1.1.
Role of the Board
The Board’s primary role is the protection and
enhancement of long-term shareholder value.
This, together with the Board’s other roles and
responsibilities, is set out in the Board Charter, a
copy of which can be found on the Group’s website.
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 two board committees being
the Remuneration and Nominations Committee and
the 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.
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 Chairman. Standing
items include the Chief Executive Officer report,
People and Risk report, Human Resources Report,
General Manager’s reports, Financial reports, Asset
reports and Commercial and Business Development
reports. The Board package is provided to Directors
and relevant management 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.
The Company Secretary is accountable directly to the
Board, through the Chairman, on all matters associated
with the proper functioning of the Board.
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 and operating
environment. Directors are given access to continuing
education opportunities to update and enhance their
skills and knowledge.
The Group also has an informal process to induct
new senior executives upon taking such positions.
This involves educating the executives on the Group’s
structure, strategy, operations, financial position and
risk management policies.
1.4. Independent professional advice and
access to 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 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.
CORPORATE GOVERNANCE
STATEMENT
27
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
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 8 and 9 of
this report.
The Group believes, for efficiency of operations, it is
in its best interests to maintain a small but efficient
Board. During the 12 months ended 30 June 2024, the
Board consisted of five Non-executive Directors (being
Scot Tumbridge, Peter Miller, Robert Douglas, Neal
O’Connor and Peter Hudson) and Executive Chairman,
Nathan Mitchell. Throughout the 12 months ended
30 June 2024, three of the six board members are
considered independent, being Robert Douglas,
Neal O’Connor and Peter Hudson.
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 was
previously employed by the Company in an executive
capacity and as such does not meet the criteria for
independence. Mr Scott Tumbridge does not meet
the criteria for independence as he was previously
employed by the Group in an executive capacity. He
is also a director of a substantial shareholder. 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
judgment 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.
Additionally, notwithstanding Mr Mitchell’s executive
capacity and non-independent status, it is the view
of the Board that Mr Mitchell brings a particular and
unparalleled skills set to the Group, having established
the Company, been involved in the drilling industry
for his entire working life and being a pioneer of this
industry in Australia, is uniquely placed to act as
Chairman of the Group.
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 which the Group
operates and having due regard to the current size of
the Group (refer Section 8: Skills and Diversity below).
Directors each have a written agreement with the
Group setting out the terms of their appointment.
2.
REMUNERATION AND NOMINATION
COMMITTEE
The Remuneration and Nomination Committee has
a documented charter, approved by the Board.
The Remuneration and Nomination Committee
comprises three members — Neal O’Connor (Chair),
Robert Douglas and Peter Hudson — each of whom
are Non-Executive Directors. The Chairman of the
Committee, Neal O’Connor, is an independent Director.
The Committee has 2 distinct roles as follows:
•
Remuneration related matters; and
•
Nomination related matters.
All Directors are invited to Remuneration and
Nomination Committee meetings at the discretion of
the Committee. The Committee met twice during the
year and Committee members’ attendance record
is disclosed in the table of Directors’ meetings on
page 15 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,
statutory superannuation, short-term incentive
payments and participation in the Mitchell Services
Limited Executive Share and Option Plan (ESOP)
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. Further disclosure on
the policies and practices regarding remuneration
is contained in the Remuneration Report of this
Annual Report.
CORPORATE GOVERNANCE
STATEMENT
28
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
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:
•
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.
3.
AUDIT AND RISK COMMITTEE
The Audit and Risk Committee has a documented
charter, approved by the Board. The Committee
comprises three members — Peter Hudson (Chair),
Neal O’Connor and Robert Douglas — each of whom
are Non-Executive Directors
The Chairman of the Committee, Peter Hudson, is an
independent Director and is not the Chairman of the
Board. The purpose of the Committee is to assist the
Board in the effective discharge of its responsibilities
in relation to the external audit function, accounting
policies, financial reporting, funding, financial risk
management, business risk monitoring and insurance.
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
three times during the year and Committee members’
attendance record is disclosed in the table of Directors’
meetings on page 15 of this report.
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 2024 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.
The Group’s external auditor audits, or in the case of
the half-year, reviews the Group’s financial reports in
accordance with the accounting standards.
Management verifies other periodic corporate reports.
The verification processes involve a management
and operational review and include cross checking
statements, information and data to original
source reports.
All documents released to the market are subject to
final sign off and approval by relevant senior executives
and, as required, the Board.
4.
PERFORMANCE EVALUATION
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.
The main risks that could negatively impact on the
performance of the Group’s business activities include:
•
Safety of employees and contractors;
•
Seasonal conditions and business interruptions;
•
Dependence on key personnel and
labour shortages;
•
Obsolescence to certain machinery due to
technological advancements or client requirements;
•
Customer demand and outlook for the
resources industry.
An assessment of the business’ risk profile and its risk
management framework is undertaken and reviewed
by the Board at least annually, covering all aspects
of the business from the operational level through
to strategic level risks to ensure that the Group is
operating within the risk appetite set by the Board.
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 the Board
as to whether the Group’s business risks have been
effectively managed.
CORPORATE GOVERNANCE
STATEMENT
29
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
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 Group’s operations are not subject to any
particular and significant environmental regulation
under the law of the Commonwealth or 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 such cases, the Group
manages its risks and undertakes its compliance duties
in accordance with contractor regime implemented by
the licensed or regulated entity. Additionally, the Group
is not aware of any material exposure to any particular
social risks.
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. Given the size of the Group, there is no
dedicated internal audit function. 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;
•
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 AND
GROUP VALUES
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 and to live the Group’s values. 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 ongoing
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 20 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
and 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 security trading policy.
CORPORATE GOVERNANCE
STATEMENT
30
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
Whistleblower Policy
The Group is committed to encouraging and
supporting ethical and responsible behaviour. It is
also committed to creating and maintaining an open
working environment in which concerns regarding
unethical, unlawful or undesirable conduct are able to
be raised and reported. The policy sets out:
•
The process by which concerns can be reported
without fear of reprisal;
•
The investigation process to follow on receipt of
a whistleblower report;
•
The Group’s commitment to rectify any discovered
wrongdoing; and
•
The measures in place to protect the whistleblower.
Security Trading Policy
The Security 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 the following periods:
•
The period from 1 July until the first trading day
after the release of the Company’s annual result to
the ASX; and
•
The period from 1 January until the first trading day
after the release of the Company’s half yearly result
to the ASX; and
•
The period from 1 October until the first trading day
after the release of the Company’s 30 September
quarterly investor report; and
•
The period from 1 April until the first trading day
after the release of the Company’s 30 March
quarterly investor report.
Anti Bribery and Corruption Policy
The Group is committed to protecting its assets and
reputation by reinforcing the Board and management’s
commitment to identify if there are any fraudulent and
corrupt activities, for establishing policies, controls
and procedures for the prevention and detection of
any such activities that may exist and to reinforce to
all employees to report any corrupt and fraudulent
conduct that they may be aware of. The policy sets out:
•
Definitions of Bribery and Corruption;
•
Examples of conduct which amounts to bribery
and/or corruption;
•
Rules around the prohibition of bribes and
facilitation payments;
•
Rules around gifts and hospitality and gift and
entertainment expenditure; and
•
Rules around charitable contributions.
Sexual Harassment Policy
The Group is committed to providing a safe
environment for all. Pursuant to the Sexual Harassment
Policy, all complaints of sexual harassment will be
taken seriously and treated with respect and in
confidence. No person will be victimised for making
such a complaint and any person found to have
sexually harassed another will face disciplinary action.
The policy sets out:
•
Definition of Sexual Harassment;
•
The complaints procedures;
•
Sanctions and disciplinary measures; and
•
Monitoring and evaluation.
Workplace Bullying Policy
The Group is committed to preventing workplace
bullying. Pursuant to the Workplace Bullying Policy,
all staff have the right to a workplace that is free from
bullying. The policy sets out:
•
Behaviours that constitute bullying;
•
The reporting procedures;
•
The investigation procedures; and
•
Outcomes of the reporting and
investigation process.
Group Values
The Group has adopted and is committed to upholding
the following values:
•
Finish each day without harm;
•
Foster a culture of respect, support, trust
and recognition;
•
Never openly criticise any team member. Blame is
not productive;
•
Understand your role. Embrace your role.
Execute your role;
•
Provide quality services through effective strategy,
structure and systems; and
•
Continuously improve and find a better way.
The Group Values are published on the
Group’s website.
CORPORATE GOVERNANCE
STATEMENT
31
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
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.
•
The full Annual Report is provided via the
Company’s website to all shareholders. 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.
Copies of all material market announcements are
provided to the Directors promptly after such
announcements have been made to the market. Any
new and substantive investor or analyst presentations
are released by the Group to the market ahead of any
presentation to investors and/or analysts.
Governance-related materials are available for
review by shareholders under the ‘Investors’ section
of the Group’s website and includes all key corporate
policies. In the event that shareholders have any
queries as to their holding or as regards the
Group’s operations, an investor email address
(investors@mitchellservices.com.au) is available, and
all enquiries are promptly addressed. Shareholders
are welcome to attend investor briefings and to ask
questions at those briefings. Details of these briefings
are released to the market periodically by of the
ASX platform.
The Group strongly encourages shareholders to
elect to receive all communications via its registrar
(Link Market Services) electronically.
The Board encourages full participation of
shareholders at the Annual General Meeting (AGM), 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.
Shareholders are encouraged to submit questions
ahead of the AGM so that these may be addressed
at the AGM.
In determining whether resolutions put to a meeting
of shareholders are to be decided by a poll, the Group
will have regard to the requirements of the ASX
as set out in Guidance Note 35 (i.e. that all Listing
Rule resolutions be decided by a poll), as well as
the obligation of the Chair, being aware of the final
proxy count, to ensure that the will of the meeting is
delivered in the final result of the resolution.
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 areas where we operate.
•
Complying with all applicable legislative
requirements.
CORPORATE GOVERNANCE
STATEMENT
32
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
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 principles 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; and
•
Make confidential counselling and support available
to employees to assist with any workplace issues
that may arise.
The Group notes recommendation 1.5(b) of the
Recommendations in relation to the setting of
measurable objectives for achieving diversity. The
Group currently has a diverse workplace in terms of
age, skillsets, ethnicity, cultural background and gender
and as such believes that the objectives of its Equity
and Diversity Policy are currently being met. As such
the Group has not set firm gender (or other) diversity
targets. This will continue to be monitored on an
annual basis.
The proportion of women employees in the whole
organisation is detailed below:
2024
Number
%
2023
Number
%
Women on the Board
–
–
–
–
Women in senior
management roles
–
–
–
–
Women in head
office roles
16
44.44
23
42.59
Women employees
in the Group
37
5.58
39
5.17
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; and
•
An understanding of information systems,
technology and security.
CORPORATE GOVERNANCE
STATEMENT
33
Mitchell Services Ltd
Annual Report 2024
33
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG
International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used
under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under
Professional Standards Legislation.
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Mitchell Services Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Mitchell
Services Limited for the financial year ended 30 June 2024 there have been:
i.
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
ii.
no contraventions of any applicable code of professional conduct in relation to
the audit.
KPMG
M J Jeffery
Partner
Brisbane
21 August 2024
KPM_INI_01
PAR_SIG_01
PAR_NAM_01
PAR_POS_01
PAR_DAT_01
PAR_CIT_01
34
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
CONSOLIDATED STATEMENT
OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
NOTE
2024
$
2023
$
Revenue
2
236,828,634
243,144,281
Other income
221,532
149,679
Gain on sale of assets
3,273,174
3,213,495
Drilling consumables
6
(24,268,194)
(25,841,847)
Employee and contract labour expenses
(124,400,705)
(127,416,774)
Fuel and oil
(2,794,787)
(2,967,394)
Freight and couriers
(3,191,387)
(3,322,705)
Hire of plant and equipment
(12,008,232)
(11,376,630)
Insurances
(1,264,300)
(1,233,779)
Legal and consultant fees
(754,002)
(1,141,921)
Rent
8
(544,722)
(455,327)
Service and repairs
(13,609,705)
(14,327,221)
Travel expenses
(9,942,882)
(11,459,890)
Impairment of trade receivables
4
—
(2,007,782)
Fair value decrease to contingent consideration liability
—
1,652,235
Depreciation expense
(25,750,243)
(27,430,668)
Amortisation of intangibles
—
(1,100,491)
Finance costs
(1,523,924)
(2,355,265)
Other expenses
(7,001,436)
(5,441,234)
Profit before tax
13,268,821
10,280,762
Income tax expense
14
(4,094,280)
(2,672,147)
Profit for the year
9,174,541
7,608,615
Other comprehensive income, net of income tax
Other comprehensive income for the year, net of income tax
—
—
Total comprehensive income for the year
9,174,541
7,608,615
Profit attributable to:
Owners of the parent
9,174,541
7,608,615
Total comprehensive income attributable to:
Owners of the parent
9,174,541
7,608,615
Earnings per share
Basic (cents per share)
24
4.3
3.4
Diluted (cents per share)
24
4.2
3.4
The accompanying notes are an integral part of these financial statements.
35
Mitchell Services Ltd
Annual Report 2024
NOTE
30 JUNE 2024
$
30 JUNE 2023
$
ASSETS
Current assets
Cash and cash equivalents
3
16,034,832
11,107,630
Trade and other receivables
4
29,597,976
34,545,642
Other assets
5
2,052,711
2,283,570
Inventories
6
9,780,661
8,845,195
Total current assets
57,466,180
56,782,037
Non-current assets
Right-of-use assets
8
1,466,003
1,460,979
Property, plant, and equipment
12
62,719,590
70,606,167
Intangible assets
7
5,755,572
5,755,572
Total non-current assets
69,941,165
77,822,718
Total assets
127,407,345
134,604,755
LIABILITIES
Current liabilities
Trade and other payables
9
21,230,310
19,004,911
Financial liabilities
10
15,301,609
16,960,996
Provisions
11
12,004,137
11,487,929
Total current liabilities
48,536,056
47,453,836
Non-current liabilities
Financial liabilities
10
4,361,870
15,323,901
Deferred tax liabilities
14
7,555,031
3,460,752
Provisions
11
1,324,540
1,265,864
Total non-current liabilities
13,241,441
20,050,517
Total liabilities
61,777,497
67,504,353
NET ASSETS
65,629,848
67,100,402
EQUITY
Issued capital
75,553,379
77,772,294
Retained earnings
(9,923,531)
(10,671,892)
Total equity
65,629,848
67,100,402
The accompanying notes are an integral part of these financial statements.
As at 30 June 2024
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
36
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
NOTE
ISSUED
CAPITAL
$
RETAINED
EARNINGS
$
TOTAL
$
BALANCE AT 1 JULY 2022
80,241,766
(18,495,115)
61,746,651
Comprehensive income/(loss)
Profit for the year
—
7,608,615
7,608,615
Other comprehensive income for the year
—
—
—
Total comprehensive income for the year
—
7,608,615
7,608,615
Transactions with owners of the Company
Shares bought back on-market and transaction costs
15
(2,469,472)
—
(2,469,472)
Recognition of share-based payments
16
—
214,608
214,608
Total transactions with owners of the Company
(2,469,472)
214,608
(2,254,864)
Balance at 30 June 2023
77,772,294
(10,671,892)
67,100,402
Comprehensive income/(loss)
Profit for the year
—
9,174,541
9,174,541
Other comprehensive income for the year
—
—
—
Total comprehensive income for the year
—
9,174,541
9,174,541
Transactions with owners of the Company
Shares bought back on-market and transaction costs
15
(2,218,915)
—
(2,218,915)
Dividends declared
—
(8,755,642)
(8,755,642)
Recognition of share-based payments
16
—
329,462
329,462
Total transactions with owners of the Company
(2,218,915)
(8,426,180)
(10,645,095)
Balance at 30 June 2024
75,553,379
(9,923,531)
65,629,848
The accompanying notes are an integral part of these financial statements
37
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
CONSOLIDATED STATEMENT
OF CASH FLOWS
NOTE
2024
$
2023
$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
266,502,909
266,840,854
Payments to suppliers and employees
(222,067,828)
(228,965,152)
Interest received
157,328
—
Interest paid
(1,473,715)
(2,247,674)
Net cash provided by operating activities
17
43,118,694
35,628,028
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment
3,572,612
3,706,604
Payments for property, plant and equipment
(13,834,563)
(11,517,355)
Earn out payment related to purchase of Deepcore
—
(247,377)
Net cash used in investing activities
(10,261,951)
(8,058,128)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of borrowings
(16,954,984)
(17,735,193)
Share buyback
15
(2,218,915)
(2,469,472)
Dividends paid
(8,755,642)
—
Net cash used in financing activities
(27,929,541)
(20,204,665)
Net increase in cash and cash equivalents
4,927,202
7,365,235
Cash and cash equivalents at the beginning of the year
11,107,630
3,742,395
Cash and cash equivalents at the end of the year
3
16,034,832
11,107,630
The accompanying notes are an integral part of these financial statements
38
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
1.
MATERIAL 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) are exploration and mine site
drilling services to the exploration, mining, and energy
industries, primarily in Australia.
(b) Basis of preparation
These general-purpose consolidated financial
statements have been prepared in accordance with
the Corporations Act 2001, Australian Accounting
Standards and Interpretations of the Australian
Accounting Standards Board and in compliance with
International Financial Reporting Standards as issued
by the International Accounting Standards Board.
The Group is a for-profit entity for financial reporting
purposes under Australian Accounting Standards.
Material accounting policies adopted in the preparation
of these financial statements are presented below and
have been consistently applied unless stated otherwise.
Except for cash flow information, the financial
statements have been prepared on an accrual basis
and are based on historical costs, modified, where
applicable, by the measurement at fair value of
selected non-current assets, financial assets and
financial liabilities.
These consolidated financial statements are presented
in Australian Dollars which is the Company’s
functional currency.
The financial statements were authorised for issue
by the Directors on the date shown in the Directors’
Declaration.
(c) Principles of consolidation
The consolidated financial statements incorporate all
of the assets, liabilities and results of the Company and
all of the subsidiaries. Subsidiaries are entities that the
Parent controls. The Parent controls an entity when it
is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect
those returns through its power over the entity. A list
of the subsidiaries is provided in Note 18.
The assets, liabilities and results of all subsidiaries
are consolidated into the financial statements of the
Group from the date on which control is obtained
by the Group. The consolidation of a subsidiary is
discontinued from the date that control ceases.
Intercompany transactions, balances and unrealised
gains or losses on transactions between Group entities
are fully eliminated on consolidation. Accounting
policies of subsidiaries have been changed and
adjustments made where necessary to ensure
uniformity of the accounting policies adopted by
the Group.
Equity interests in a subsidiary not attributable,
directly or indirectly, to the Group are presented
as “non-controlling interests”. The Group initially
recognises non-controlling interests that are present
ownership interests in subsidiaries and are entitled to
a proportionate share of the subsidiary’s net assets on
liquidation at either fair value or at the non-controlling
interests’ proportionate share of the subsidiary’s
net assets. Subsequent to initial recognition, non-
controlling interests are attributed their share of profit
or loss and each component of other comprehensive
income. Non-controlling interests are shown separately
within the equity section of the consolidated statement
of financial position and consolidated statement of
comprehensive income.
Loop Decarbonisation Solutions Pty Ltd (Loop) is a
joint venture in which the Group has joint control and a
50 percent ownership interest. Loop is structured as a
separate vehicle and the Group has a residual interest
in its net assets. Accordingly, the Group has classified
its interest in Loop as a joint venture.
(d) Business combinations
Business combinations occur where an acquirer
obtains control over one or more businesses.
A business combination is accounted for by applying
the acquisition method, unless it is a combination
involving entities or businesses under common control.
The business combination will be accounted for from
the date that control is obtained, whereby the fair
value of the identifiable assets acquired and liabilities
(including contingent liabilities) assumed is recognised.
When measuring the consideration transferred in the
business combination, any asset or liability resulting
from a contingent consideration arrangement is also
included. Subsequent to initial recognition, contingent
consideration classified as equity is not remeasured
and its subsequent settlement is accounted for within
equity. Contingent consideration classified as an asset
or liability is remeasured in each reporting period to
fair value, recognising any change to fair value in profit
or loss, unless the change in value can be identified as
existing at acquisition date.
39
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
All transaction costs incurred in relation to business
combinations, other than those associated with the
issue of a financial instrument, are recognised as
expenses in profit or loss when incurred.
The acquisition of a business may result in
the recognition of goodwill or a gain from a
bargain purchase.
(e) Intangibles
Goodwill and Impairment
Goodwill is carried at cost less any accumulated
impairment losses. Goodwill is calculated as the excess
of the sum of:
(i)
the consideration transferred at fair value;
(ii) any non-controlling interest (determined under
either the fair value or proportionate interest
method); and
(iii) the acquisition date fair value of any previously
held equity interest;
over the acquisition date fair value of any identifiable
assets acquired and liabilities assumed.
The acquisition date fair value of the consideration
transferred for a business combination plus the
acquisition date fair value of any previously held equity
interest shall form the cost of the investment in the
separate financial statements.
Changes in the Group’s ownership interests in
subsidiaries that do not result in the Group losing
control over the subsidiaries are accounted for as
equity transactions. The carrying amounts of the
Group’s interests and the non-controlling interests
are adjusted to reflect the changes in their relative
interests in the subsidiaries. Any difference between
the amount by which the non-controlling interests are
adjusted and the fair value of the consideration paid or
received is recognised directly in equity and attributed
to owners of the Company.
When the Group loses control of a subsidiary, a gain
or loss is recognised in profit or loss and is calculated
as the difference between (i) the aggregate of the
fair value of the consideration received and the fair
value of any retained interest and (ii) the previous
carrying amount of the assets (including goodwill),
and liabilities of the subsidiary and any non-controlling
interests. All amounts previously recognised in other
comprehensive income in relation to that subsidiary
are accounted for as if the Group had directly disposed
of the related assets or liabilities of the subsidiary
(i.e., reclassified to profit or loss or transferred to
another category of equity as specified/permitted by
applicable Accounting 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, when applicable, the cost on initial
recognition of an investment in an associate or a
joint venture.
The amount of goodwill recognised on acquisition of
each subsidiary in which the Group holds less than
100% interest will depend on the method adopted
in measuring the non-controlling interest. The Group
can elect in most circumstances to measure the
non-controlling interest in the acquiree either at fair
value (full goodwill method) or at the non-controlling
interest’s proportionate share of the subsidiary’s
identifiable net assets (proportionate interest method).
In such circumstances, the Group determines which
method to adopt for each acquisition and this is stated
in the respective note to the financial statements
disclosing the business combination.
Under the full goodwill method, the fair value of the
non-controlling interest is determined using valuation
techniques which make the maximum use of market
information where available.
Goodwill on acquisition of subsidiaries is included in
intangible assets. Goodwill on acquisition of associates
is included in investments in associates.
Goodwill is tested for impairment annually and is
allocated to the Group’s cash-generating units or
groups of cash-generating units, representing the
lowest level at which goodwill is monitored and not
larger than an operating segment. Gains and losses on
the disposal of an entity include the carrying amount
of goodwill related to the entity disposed of.
Changes in the ownership interests in a subsidiary that
do not result in a loss of control are accounted for
as equity transactions and do not affect the carrying
amounts of goodwill.
Customer contracts
Customer contracts acquired are initially recognised
at fair value and are subsequently carried at fair value
less accumulated amortisation and accumulated
impairment losses. These costs are amortised to profit
or loss using the straight-line method over the contract
period or estimated useful life, whichever is shorter.
40
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
(f) Revenue recognition
Revenue is recognised, net of the amount of goods
and services tax (GST), for the major business activities
as follows:
Revenue from contracts with customers
The Group provides drilling services to the exploration,
mining and energy industries pursuant to service
contracts with a variety of clients in those sectors.
The revenue associated with these drilling contracts
is recognised in accordance with AASB 15: Revenue
from Contracts with Customers, that is in a manner that
depicts the transfer of promised goods or services to
customers in an amount that reflects the consideration
to which the Group expects to be entitled in
exchange for those goods or services. Revenue from
customer contracts is recognised upon satisfaction
of a performance obligation under those contracts
either over time in accordance with specified units
of production (for example metres drilled or hours
worked, invoiced throughout the month) or at a point
in time when control passes to the customer under
those contracts (for example the sale or hire of certain
items including consumables).
Invoices for drilling services are issued pursuant to
the terms of the contracts with customers. These are
generally issued on a monthly basis and payable within
a period of between 30 and 60 days. The timing of
revenue recognition may differ from the timing of
invoicing and may result in a contract asset or liability
being presented in the consolidated statement of
financial position.
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.
(g) Leases
The Group as lessee
At inception of a contract, the Group assesses if
the contract contains or is a lease. If there is a lease
present, a right-of-use asset and a corresponding lease
liability are recognised by the Group where the Group
is a lessee. However, all contracts that are classified as
short-term leases (i.e., a lease with a remaining lease
term of 12 months or less) and leases of low-value
assets are recognised as an operating expense on a
straight-line basis over the term of the lease.
Initially the lease liability is measured at the present
value of the lease payments still to be paid at the
commencement date. The lease payments are
discounted at the interest rate implicit in the lease. If
this rate cannot be readily determined, the Group uses
the incremental borrowing rate.
Lease payments included in the measurement of the
lease liability are as follows:
•
fixed lease payments less any lease incentives;
•
variable lease payments that depend on an index or
rate, initially measured using the index or rate at the
commencement date;
•
the amount expected to be payable by the lessee
under residual value guarantees;
•
the exercise price of purchase options, if the lessee
is reasonably certain to exercise the options;
•
lease payments under extension options, if
the lessee is reasonably certain to exercise the
options; and
•
payments of penalties for terminating the lease, if
the lease term reflects the exercise of an option to
terminate the lease.
The right-of-use assets comprise the initial
measurement of the corresponding lease liability, any
lease payments made at or before the commencement
date and any initial direct costs. The subsequent
measurement of the right-of-use assets is at cost less
accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the lease
term or useful life of the underlying asset, whichever is
the shortest.
Where a lease transfers ownership of the underlying
asset or the cost of the right-of-use asset reflects that
the Group anticipates to exercise a purchase option,
the specific asset is depreciated over the useful life of
the underlying asset.
(h) Employee benefits
Short-term employee benefits
Provision is made for the Group’s obligation for short-
term employee benefits. Short-term employee benefits
are benefits (other than termination benefits) that are
expected to be settled wholly before 12 months after
the end of the annual reporting period. Short-term
employee benefits are measured at the (undiscounted)
amounts expected to be paid when the obligation
is settled.
41
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
The Group’s obligations for short-term employee
benefits such as wages and salaries are recognised
as part of current trade and other payables in the
consolidated statement of financial position. The
Group’s obligations for employees’ annual leave
and long service leave entitlements are recognised
as provisions in the consolidated statement of
financial position.
Other long-term employee benefits
Provision is made for employees’ long service leave and
annual leave entitlements not expected to be settled
wholly within 12 months after the end of the annual
reporting period. Other long-term employee benefits
are measured at the present value of the expected
future payments to be made to employees. Expected
future payments incorporate anticipated future wage
and salary levels, durations of service and employee
departures and are discounted at rates determined by
reference to market yields at the end of the reporting
period on corporate bonds that have maturity dates
that approximate the terms of the obligations. Any
remeasurements for changes in assumptions of
obligations for other long-term employee benefits are
recognised in profit or loss in the period in which the
changes occur.
The Group’s obligations for long-term employee
benefits are presented as non-current provisions in
its statement of financial position, except where the
Group does not have an unconditional right to defer
settlement for at least 12 months after the end of the
reporting period, in which case the obligations are
presented as current provisions.
Defined contribution superannuation benefits
All employees of the Group receive defined
contribution superannuation entitlements, for which
the Group pays the fixed superannuation guarantee
contribution to the employee’s superannuation fund
of choice. All contributions in respect of employees’
defined contribution entitlements are recognised as
an expense when they become payable. The Group’s
obligation with respect to employees’ defined
contribution entitlements is limited to its obligation for
any unpaid superannuation guarantee contributions
at the end of the reporting period. All obligations for
unpaid superannuation guarantee contributions are
measured at the (undiscounted) amounts expected
to be paid when the obligation is settled and are
presented as current liabilities in the Group’s statement
of financial position.
Termination benefits
When applicable, the Group recognises a liability and
expense for termination benefits at the earlier of:
•
the date when the Group can no longer withdraw
the offer for termination benefits; and
•
when the Group recognises costs for restructuring
pursuant to AASB 137: Provisions, Contingent
Liabilities and Contingent Assets and the costs
include termination benefits.
In either case, unless the number of employees
affected is known, the obligation for termination
benefits is measured on the basis of the number of
employees expected to be affected. Termination
benefits that are expected to be settled wholly before
12 months after the annual reporting period in which
the benefits are recognised are measured at the
(undiscounted) amounts expected to be paid. All other
termination benefits are accounted for on the same
basis as other long-term employee benefits.
Equity-settled compensation
The Group operates an employee share and option
plan. Share-based payments to employees are
measured at the fair value of the instruments at grant
date and amortised over the vesting periods.
Share-based payments to non-employees are
measured at the fair value of goods or services
received or the fair value of the equity instruments
issued, if it is determined the fair value of the goods or
services cannot be reliably measured, and are recorded
at the date the goods or services are received. The
corresponding amounts are recognised in profit or loss.
The fair value of options is determined using the
Black-Scholes pricing model. The number of shares and
options expected to vest is reviewed and adjusted at
the end of each reporting period such that the amount
recognised for services received as consideration for
the equity instruments granted is based on the number
of equity instruments that eventually vest.
(i)
Income taxes
The income tax expense (benefit) for the year
comprises current income tax expense (income) and
deferred tax expense (income).
Current income tax expense charged to profit or loss
is the tax payable on taxable income for the current
period. Current tax liabilities (assets) are measured at
the amounts expected to be paid to (recovered from)
the relevant taxation authority using tax rates (and tax
laws) that have been enacted or substantively enacted
by the end of the reporting period.
Deferred tax expense reflects movements in deferred
tax asset and deferred tax liability balances during the
year as well as unused tax losses.
42
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
Current and deferred income tax expense is charged
or credited outside profit or loss when the tax relates
to items that are recognised outside profit or loss or
arising from a business combination.
A deferred tax liability shall be recognised for all
taxable temporary differences, except to the extent
that the deferred tax liability arises from: (a) the initial
recognition of goodwill; or (b) the initial recognition
of an asset or liability in a transaction which: (i) is
not a business combination; and (ii) at the time of
the transaction, affects neither accounting profit nor
taxable profit (tax loss).
Deferred tax assets and liabilities are calculated at
the tax rates that are expected to apply to the period
when the asset is realised or the liability is settled and
their measurement also reflects the manner in which
management expects to recover or settle the carrying
amount of the related asset or liability. With respect
to non-depreciable items of property, plant and
equipment measured at fair value, the related deferred
tax liability or deferred tax asset is measured on the
basis that the carrying amount of the asset will be
recovered entirely through sale.
Deferred tax assets relating to temporary differences
and unused tax losses are recognised only to the
extent that it is probable that future taxable profit
will be available against which the benefits of the
deferred tax asset can be utilised, unless the deferred
tax asset relating to temporary differences arises
from the initial recognition of an asset or liability in a
transaction that:
•
is not a business combination; and
•
at the time of the transaction, affects neither
accounting profit nor taxable profit (tax loss).
Where temporary differences exist in relation to
investments in subsidiaries, branches, associates,
and joint ventures, deferred tax assets and liabilities
are not recognised where the timing of the reversal
of the temporary difference can be controlled and
it is not probable that the reversal will occur in the
foreseeable future.
Current tax assets and liabilities are offset where
a legally enforceable right of set-off exists and it
is intended that net settlement or simultaneous
realisation and settlement of the respective asset and
liability will occur. Deferred tax assets and liabilities are
offset where: (i) a legally enforceable right of set-off
exists; and (ii) the deferred tax assets and liabilities
relate to income taxes levied by the same taxation
authority on either the same taxable entity or different
taxable entities where it is intended that net settlement
or simultaneous realisation and settlement of the
respective asset and liability will occur in future periods
in which significant amounts of deferred tax assets or
liabilities are expected to be recovered or settled.
Tax consolidation
The Company and its wholly-owned Australian resident
entities have formed a tax-consolidated group and
are therefore taxed as a single entity from that date.
The head entity within the tax-consolidated group
is Mitchell Services Ltd. The members of the tax-
consolidated Group are identified in Note 18. Tax
expense/income, deferred tax liabilities and deferred
tax assets arising from temporary differences of the
members of the tax-consolidated group are recognised
in the separate financial statements of the members
of the tax-consolidated group using the “separate
taxpayer within group” approach by reference to the
carrying amounts in the separate financial statements
of each entity and the tax values applying under tax
consolidation. Current tax liabilities and assets and
deferred tax assets arising from unused tax losses
and relevant tax credits of the members of the tax-
consolidated group are recognised by the Company
(as head entity in the tax-consolidated group). Due to
the existence of a tax funding arrangement between
the entities in the tax-consolidated group, amounts
are recognised as payable to or receivable by the
Company and each member of the Group in relation
to the tax contribution amounts paid or payable
between the parent entity and the other members of
the tax-consolidated group in accordance with the
arrangement.
(j)
Property, plant and equipment
Recognition and measurement
Items of property, plant and equipment are measured
at cost less accumulated depreciation and accumulated
impairment losses.
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 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.
43
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
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:
CLASSES OF FIXED ASSET
Leasehold improvements
20%
Plant & Equipment
6.67% — 67%
Motor Vehicles
12.50% — 50%
Furniture & Fittings
10% — 67.67%
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 are impaired. 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
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, to the extent 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.
(k) Inventories
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.
(l)
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
of the amount of the obligation can be made.
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.
44
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
(m) Financial instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised
when the Group becomes a party to the contractual
provisions to the instrument. For financial assets, this
is the date that the Group commits itself to either the
purchase or sale of the asset (i.e. trade date accounting
is adopted).
Financial instruments (except for trade receivables) are
initially measured at fair value plus transaction costs,
except where the instrument is classified “at fair value
through profit or loss”, in which case transaction costs
are expensed to profit or loss immediately. Where
available, quoted prices in an active market are used to
determine fair value. In other circumstances, valuation
techniques are adopted.
Trade receivables are initially measured at the
transaction price if the trade receivables do not contain
a significant financing component or if the practical
expedient was applied as specified in AASB 15.63.
Financial assets
Financial assets are subsequently measured at:
•
amortised cost;
•
fair value through other comprehensive income; or
•
fair value through profit or loss.
Measurement is on the basis of the two
primary criteria:
•
the contractual cash flow characteristics of the
financial asset; and
•
the business model for managing the
financial assets.
A financial asset is subsequently measured at
amortised cost if it meets the following conditions:
•
the financial asset is managed solely to collect
contractual cash flows; and
•
the contractual terms within the financial asset
give rise to cash flows that are solely payments
of principal and interest on the principal amount
outstanding on specified dates.
A financial asset is subsequently measured at fair value
through other comprehensive income if it meets the
following conditions:
•
the contractual terms within the financial asset
give rise to cash flows that are solely payments
of principal and interest on the principal amount
outstanding on specified dates; and
•
the business model for managing the financial asset
comprises both contractual cash flows collection
and the selling of the financial asset.
By default, all other financial assets that do not meet
the measurement conditions of amortised cost and
fair value through other comprehensive income
are subsequently measured at fair value through
profit or loss.
The Group initially designates a financial instrument as
measured at fair value through profit or loss if:
•
it eliminates or significantly reduces a measurement
or recognition inconsistency (often referred to as
“accounting mismatch”) that would otherwise arise
from measuring assets or liabilities or recognising
the gain or loss on them on different bases;
•
it is in accordance with the documented risk
management or investment strategy and
information about the groupings was documented
appropriately, so that the performance of the
financial liability that was part of a group of
financial liabilities or financial assets can be
managed and evaluated consistently on a fair
value basis;
•
it is a hybrid contract that contains an embedded
derivative that significantly modifies the cash flows
otherwise required by the contract.
The initial designation of the financial instruments to
measure at fair value through profit or loss is a one-
time option on initial classification and is irrevocable
until the financial asset is derecognised.
Equity instruments
At initial recognition, as long as the equity
instrument is not held for trading or not a contingent
consideration recognised by an acquirer in a business
combination to which AASB 3: Business Combinations
applies, the Group may make an irrevocable election
to measure any subsequent changes in fair value of
the equity instrument in other comprehensive income,
while the dividend revenue received on underlying
equity instruments investment will still be recognised in
profit or loss.
Regular way purchases and sales of financial assets
are recognised and derecognised at settlement date in
accordance with the Group’s accounting policy.
45
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
Derecognition
Derecognition refers to the removal of a previously
recognised financial asset or financial liability from the
consolidated statement of financial position.
Derecognition of financial liabilities
A liability is derecognised when it is extinguished (i.e.
when the obligation in the contract is discharged,
cancelled or expires). An exchange of an existing
financial liability for a new financial liability with
substantially modified terms, or a substantial
modification to the terms of a financial liability is
treated as an extinguishment of the existing liability
and recognition of a new financial liability.
The difference between the carrying amount of the
financial liability derecognised and the consideration
paid and payable, including any non-cash assets
transferred or liabilities assumed, is recognised in
profit or loss.
Derecognition of financial assets
A financial asset is derecognised when the holder’s
contractual rights to its cash flows expires, or the
asset is transferred in such a way that all the risks and
rewards of ownership are substantially transferred.
All of the following criteria need to be satisfied for
derecognition of financial assets:
•
the right to receive cash flows from the asset has
expired or been transferred;
•
all risk and rewards of ownership of the asset have
been substantially transferred; and
•
the Group no longer controls the asset (i.e. the
Group has no practical ability to make a unilateral
decision to sell the asset to a third party).
On derecognition of a financial asset measured at
amortised cost, the difference between the asset’s
carrying amount and the sum of the consideration
received and receivable is recognised in profit or loss.
On derecognition of a debt instrument classified at
fair value through other comprehensive income, the
cumulative gain or loss previously accumulated in
the investment revaluation reserve is reclassified to
profit or loss.
On derecognition of an investment in equity which was
elected to be classified as at fair value through other
comprehensive income, the cumulative gain or loss
previously accumulated in the investment’s revaluation
reserve is not reclassified to profit or loss, but is
transferred to retained earnings.
Impairment
The Group recognises a loss allowance for expected
credit losses on:
•
financial assets that are measured at amortised cost
or fair value through other comprehensive income;
•
lease receivables;
•
contract assets;
•
loan commitments that are not measured at fair
value through profit or loss; and
•
financial guarantee contracts that are not measured
at fair value through profit or loss.
Loss allowance is not recognised for:
•
financial assets measured at fair value through
profit or loss; or equity instruments measured at fair
value through other comprehensive income.
Expected credit losses are the probability-weighted
estimate of credit losses over the expected life of a
financial instrument. A credit loss is the difference
between all contractual cash flows that are due and
all cash flows expected to be received, all discounted
at the original effective interest rate of the financial
instrument.
The Group uses the following approaches to
impairment, as applicable under AASB 9: Financial
Instruments:
•
the general approach; and
•
the simplified approach;
General approach
Under the general approach, at each reporting period,
the Group assesses whether the financial instruments
are credit-impaired, and if:
•
the credit risk of the financial instrument has
increased significantly since initial recognition, the
Group measures the loss allowance of the financial
instruments at an amount equal to the lifetime
expected credit losses; or
•
there is no significant increase in credit risk since
initial recognition, the Group measures the loss
allowance for that financial instrument at an amount
equal to 12-month expected credit losses.
46
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
Simplified approach
The simplified approach does not require tracking of
changes in credit risk at every reporting period, but
instead requires the recognition of lifetime expected
credit loss at all times.
This approach is applicable to:
•
trade receivables or contract assets that result from
transactions within the scope of AASB 15 and that
contain a significant financing component; and
•
lease receivables.
In measuring the expected credit loss, a provision
matrix for trade receivables was used, taking into
consideration various data to get to an expected credit
loss (i.e., diversity of its customer base, appropriate
groupings of its historical loss experience etc).
Recognition of expected credit losses
At each reporting date, the Group recognises the
movement in the loss allowance as an impairment gain
or loss in profit or loss.
The carrying amount of financial assets measured at
amortised cost includes the loss allowance relating to
that asset.
Assets measured at fair value through other
comprehensive income are recognised at fair value,
with changes in fair value recognised in other
comprehensive income. Amounts in relation to change
in credit risk are transferred from other comprehensive
income to profit or loss at each reporting period.
Financial liabilities
Financial liabilities are subsequently measured at:
•
amortised cost; or
•
fair value through profit or loss.
A financial liability is measured at fair value through
profit or loss if the financial liability is:
•
a contingent consideration of an acquirer in a
business combination to which AASB 3 applies;
•
held for trading; or
•
initially designated as at fair value through
profit or loss.
All other financial liabilities are subsequently measured
at amortised cost using the effective interest method.
The effective interest method is a method of
calculating the amortised cost of a debt instrument
and of allocating interest expense in profit or loss
over the relevant period. The effective interest rate
is the internal rate of return of the financial asset or
liability; that is, it is the rate that exactly discounts
the estimated future cash flows through the expected
life of the instrument to the net carrying amount at
initial recognition.
A financial liability is held for trading if:
•
it is incurred for the purpose of repurchasing or
repaying in the near term;
•
part of a portfolio where there is an actual pattern
of short-term profit taking; or
•
a derivative financial instrument (except for a
derivative that is in a financial guarantee contract
or a derivative that is in an effective hedging
relationship).
Any gains or losses arising on changes in fair value are
recognised in profit or loss to the extent that they are
not part of a designated hedging relationship.
The change in fair value of the financial liability
attributable to changes in the issuer’s credit risk is
taken to other comprehensive income and are not
subsequently reclassified to profit or loss. Instead,
they are transferred to retained earnings upon
derecognition of the financial liability.
If taking the change in credit risk in other
comprehensive income enlarges or creates an
accounting mismatch, then these gains or losses
should be taken to profit or loss rather than other
comprehensive income.
A financial liability cannot be reclassified.
(n) 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 consolidated statement
of cash flows on a gross basis. The GST component
of cash flows arising from investing and financing
activities which is recoverable from, or payable to, the
ATO is classified within operating cash flows.
47
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
(o) Cash and cash equivalents
Cash and cash equivalents include cash on hand,
deposits available on demand with banks, other short-
term highly liquid investments with ongoing maturities
of 3 months or less, and bank overdrafts.
(p) Fair value of Assets and Liabilities
The Group measures some of its assets and liabilities
at fair value on either a recurring or non-recurring
basis, depending on the requirements of the applicable
Accounting Standard.
Fair value is the price the Group would receive to sell
an asset or would have to pay to transfer a liability
in an orderly (i.e., unforced) transaction between
independent, knowledgeable, and willing market
participants at the measurement date.
As fair value is a market-based measure, the closest
equivalent observable market pricing information
is used to determine fair value. Adjustments to
market values may be made having regard to the
characteristics of the specific asset or liability. The fair
values of assets and liabilities that are not traded in
an active market are determined using one or more
valuation techniques. These valuation techniques
maximise, to the extent possible, the use of observable
market data.
To the extent possible, market information is extracted
from either the principal market for the asset or liability
(i.e. the market with the greatest volume and level
of activity for the asset or liability) or, in the absence
of such a market, the most advantageous market
available to the entity at the end of the reporting
period (i.e. the market that maximises the receipts
from the sale of the asset or minimises the payments
made to transfer the liability, after taking into account
transaction costs and transport costs).
For non-financial assets, the fair value measurement
also takes into account a market participant’s ability to
use the asset in its highest and best use or to sell it to
another market participant that would use the asset in
its highest and best use. The fair value of liabilities and
the entity’s own equity instruments (excluding those
related to share-based payment arrangements) may be
valued, where there is no observable market price in
relation to the transfer of such financial instruments, by
reference to observable market information where such
instruments are held as assets. Where this information
is not available, other valuation techniques are adopted
and, where significant, are detailed in the respective
note to the financial statements.
(q) Capital management
Management controls the capital of the Group in
order to maintain an appropriate debt to equity ratio,
generate long-term shareholder value and ensure
that the Group can fund its operations and continue
as a going concern.
The Group’s debt and capital include ordinary
share capital, and financial liabilities, supported by
financial assets.
Management effectively manages the Group’s capital
by assessing the Group’s financial risks and adjusting
its capital structure in response to changes in these
risks and in the market. These responses include
the management of debt levels, distributions to
shareholders and share issues.
There have been no changes in the strategy adopted
by management to control the capital of the Group
since the prior year.
(r) Assets held for sale
The Group recognises assets as held for sale when
the sale of the asset is approved by the Board
and is actively marketed at a reasonable price for
immediate sale that is probable within 12 months.
After these conditions are met, the Group measures
the assets held for sale at the lower of carrying
amount and fair value less costs to sell and are not
depreciated.
Any reduction in value on initial recognition or any
reduction in fair value less costs to sell after initial
recognition shall be recognised as impairment in
profit or loss. A gain for any subsequent increase in
fair value less costs to sell shall be recognised in the
profit or loss to the extent that it is not in excess of
the cumulative impairment loss.
(s) Critical accounting judgements and key
sources of estimation uncertainty
In the application of the Group’s accounting policies,
management 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 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.
48
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
Key estimates — Business combination related
In accordance with accounting policies Note 1(d),
assets and liabilities acquired in a business combination
are recognised at their fair value at the date of
acquisition. The Group acquired Deepcore Holdings
Pty Ltd (Deepcore) during the year ended 30 June
2020 with accounting for the business combination
finalised per the reported financial statements for the
year ended 30 June 2020. There continues to be key
accounting considerations related to the business
combination, primarily Goodwill.
(i)
Impairment testing for CGUs
containing goodwill
Pursuant to the acquisition of Deepcore during the
year ended 30 June 2020, the Group recognised
goodwill of $5,755,572 with goodwill requiring to be
tested for impairment on an annual basis.
Goodwill is monitored by management at the level of
the lowest cash-generating-unit (CGU) being the wider
Deepcore drilling business.
The recoverable amount of this CGU was based on
value-in-use (VIU), estimated using discounted cash
flows, requires the use of certain assumptions. The key
assumptions used in the estimation of the recoverable
amount are set out below. The values assigned to the
key assumptions represent management’s assessment
of future trends in the relevant industry and have
been based on historical data from both external and
internal sources.
Key assumptions utilised within the VIU model:
•
Discount rate (post tax): 12.4% (2023: 12.4%)
•
Terminal value growth rate: 2.5% (2023: 2.0%)
•
Budgeted EBITDA growth rate (average of next five
years): 2.5% (2022: 2.0%).
The cashflow projections included specific estimates
for five years and a terminal growth rate thereafter.
The terminal growth rate was determined based on
management’s estimate of the long-term compound
annual EBITDA growth rate, consistent with the
assumptions that a market participant would make.
Budgeted EBITDA was estimated taking into account
past experience with respect to revenue generated,
adjusted for the existing contract book, change to
contract rates, drilling volume and price growth for the
next five years. This, in conjunction with forecasted
operating costs based on historical experience,
determined the budgeted EBITDA.
Management do not consider there to be a reasonably
possible change in key assumptions that cause the
carrying amount to exceed the recoverable amount.
(t) Standards issued by not yet effective
A number of new standards are effective for annual
periods beginning after 1 July 2023 and earlier
application is permitted; however, the Group has
not early adopted the new or amended standards in
preparing these consolidated financial statements.
The following new and amended standards are not
expected to have a significant impact on the Group’s
consolidated financial statements:
•
Lease Liability in a Sale and Leaseback
(Amendments to AASB 16)
•
Lack of Exchangeability (Amendments to AASB 121);
•
AASB 17: Insurance Contracts
•
Disclosure of Accounting Policies — Amendments
to AASB 101 and AASB Practice Statement 2
•
Definition of Accounting Estimates Amendments
to AASB 108
•
Deferred Tax related to Assets and Liabilities
arising from a Single Transaction — Amendments
to AASB 112
•
International Tax Reform — Pillar Two Model Rules
— Amendments to AASB 112.
(u) Comparative figures
When required by accounting standards, comparative
figures have been adjusted to conform to changes in
presentation for the current financial year.
49
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
2.
REVENUE
2024
$
2023
$
2(a) Revenue from continuing operations
Revenue from contracts with customers
236,828,634
243,144,281
236,828,634
243,144,281
2(b) Disaggregation of revenue from contracts with customers
The Group disaggregates revenue from contracts with customers by commodity, drilling type, client type and
geography, as this appropriately depicts how the nature, amount, timing and uncertainty of revenue and cash
flows are affected by economic factors.
2024
$
2023
$
Commodity
Steelmaking coal
104,718,002
94,951,195
Gold
100,171,967
99,925,713
Copper
10,092,840
24,441,739
Lead/zinc/silver
14,286,955
19,968,887
Geotech
7,558,870
3,856,747
236,828,634
243,144,281
Drilling type
Surface drilling
128,458,118
122,006,081
Underground drilling
108,092,025
120,886,426
Other revenue
278,491
251,774
236,828,634
243,144,281
Geography by State
Queensland
128,151,913
137,047,916
New South Wales
34,218,852
27,036,923
Western Australia
1,589,164
7,734,311
Victoria
47,551,137
56,963,019
Northern Territory
25,008,512
13,290,669
Tasmania
309,056
1,071,443
236,828,634
243,144,281
Timing of revenue recognition
Services transferred over time
199,121,274
207,003,474
Goods transferred at a point in time
37,707,360
36,140,807
236,828,634
243,144,281
50
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
3.
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 (where applicable). 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.
2024
$
2023
$
Bank balances
16,034,832
11,107,630
16,034,832
11,107,630
4.
TRADE AND OTHER RECEIVABLES
2024
$
2023
$
Trade debtors
13,887,073
19,244,542
Accrued income
15,647,039
15,255,111
Bonds and deposits
63,864
45,989
29,597,976
34,545,642
Impairment of trade receivables
The Group establishes an allowance for impairment by utilising the simplified approach in AASB 9 which uses an
estimation of lifetime expected credit losses.
During the year ended 30 June 2023, the Group recognised a trade receivables impairment relating to one of its
long-term customers, Balmaine Gold Pty Ltd (Balmaine). The impairment was recognised due to Balmaine being
placed into voluntary administration in March 2023 and with no payments having been received by 30 June 2023,
the Group had recognised an impairment loss of $2,007,782, net of GST, being the full amount receivable from
Balmaine at the date of entering voluntary administration.
As at 30 June 2024, and following the completion of a prolonged administration process, the Group considers it
highly unlikely any amounts will be recovered pertaining to this receivable and, as such, have written off the full
amount of $2,007,782 as a bad debt. This had no impact on the 2024 profit or loss.
The table below details gross and net receivables at 30 June 2024.
2024
$
2023
$
Gross trade debtors
13,887,073
21,252,324
Impairment loss allowance
—
(2,007,782)
Net trade debtors
13,887,073
19,244,542
A reconciliation of the movement in the impairment loss allowance provision is shown below:
2024
$
2023
$
Balance at beginning of the year
2,007,782
—
Impairment loss recognised during the year
—
2,007,782
Impairment loss reversal due to recognition of bad debt
(2,007,782)
—
Balance at end of the year
—
2,007,782
51
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
4(a) Credit risk and ageing of trade debtors
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. The ageing of trade debtors (financial assets)
is as follows:
2024
$
2023
$
< 1 month
11,565,727
15,589,690
1 to 3 months
2,321,346
3,455,827
> 3 months*
—
2,206,807
13,887,073
21,252,324
* All amounts in the >3 months category at 30 June 2023 related to Balmaine (Refer to discussion earlier in Note 4).
5.
OTHER ASSETS
2024
$
2023
$
Current
Borrowing costs
—
25,000
Prepayments
2,052,711
2,258,570
2,052,711
2,283,570
6.
INVENTORIES
2024
$
2023
$
Spare parts and consumables
9,780,661
8,845,195
9,780,661
8,845,195
The cost of inventories recognised as an expense during the year in respect of continuing operations was
$24,268,194 (2023: $25,841,847).
52
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
7.
INTANGIBLE ASSETS
GOODWILL
$
CUSTOMER
CONTRACTS
$
TOTAL
$
At 1 July 2023
Cost or fair value
5,755,572
17,129,163
22,884,735
Accumulated amortisation
—
(17,129,163)
(17,129,163)
Net book amount
5,755,572
—
5,755,572
Year ended 30 June 2024
Opening net book amount
5,755,572
—
5,755,572
Amortisation
—
—
—
Closing net book amount
5,755,572
—
5,755,572
At 30 June 2024
Cost or fair value
5,755,572
17,129,163
22,884,735
Accumulated amortisation
—
(17,129,163)
(17,129,163)
Net book amount
5,755,572
—
5,755,572
At 1 July 2022
Cost or fair value
5,755,572
17,129,163
22,884,735
Accumulated amortisation
—
(16,028,672)
(16,028,672)
Net book amount
5,755,572
1,100,491
6,856,063
Year ended 30 June 2023
Opening net book amount
5,755,572
1,100,491
6,856,063
Amortisation
—
(1,100,491)
(1,100,491)
Closing net book amount
5,755,572
—
5,755,572
At 30 June 2023
Cost or fair value
5,755,572
17,129,163
22,884,735
Accumulated amortisation
—
(17,129,163)
(17,129,163)
Net book amount
5,755,572
—
5,755,572
Refer Note 1(s) for discussion of the Group’s assessment of the Goodwill carrying value.
As at 30 June 2024, Customer Contract Intangible Assets were fully amortised, with the last contract having
expired in February 2023.
53
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
8.
RIGHT-OF-USE ASSETS
The Group’s property lease portfolio relates to leased premises with the date of expiry ranging from December
2026 to September 2027 (FY23: May 2024 through to December 2026). In certain instances, the Group’s property
leases include extension options that allow the Group to extend the lease term to beyond the original termination
date. These options are exercisable at the sole discretion of the Group and provide the Group with appropriate
flexibility to manage leases to align with its strategies. The extension options which management were reasonably
certain to be exercised have been included in the calculation of the lease liability.
AASB 16 related amounts recognised in the statement of financial position
2024
$
2023
$
Right-of-use assets
Cost
4,180,200
3,583,066
Accumulated depreciation
(2,714,197)
(2,122,087)
1,466,003
1,460,979
Movements in carrying amounts
Opening net book amount
1,460,979
1,772,390
Adjustment to carrying value of right-of-use asset*
597,134
218,053
Depreciation expense for the year
(592,110)
(529,464)
Net book amount
1,466,003
1,460,979
* During the year ended 30 June 2024 certain amendments were made to existing lease arrangements while a sublease arrangement was
also entered into as per the following:
(i) The Group exercised an option to renew the property lease on premises in Toronto, New South Wales for a further 12 months to
May 2025 with it being deemed probable this would also be extended for a further 24 months beyond that date through to May 2027;
(ii) A renegotiation in terms with the landlord of premises leased in Dysart, Queensland resulted in the lease term being extended through
to September 2027 at an increased rent; and
(iii) As discussed in note 20(b), a portion of the head office premises leased in Brisbane were subleased for a period through to
December 2026.
The effect of these separate changes was a net increase to the Group’s right-of-use lease liability with a
corresponding net increase to the carrying value of the right-of-use asset.
Amounts recognised in profit or loss relating to lease liabilities
2024
$
2023
$
Depreciation charge related to right-of-use assets
592,110
529,464
Interest expense on lease liabilities (under finance costs)
118,586
121,913
Short term leases expense
544,722
455,327
Amounts recognised in statement of cash flows relating to lease liabilities
2024
$
2023
$
Total cash outflows for leases including interest expense
727,383
640,119
54
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
9.
TRADE AND OTHER PAYABLES
2024
$
2023
$
Trade creditors
12,351,828
11,117,160
Accrued expenses
6,821,819
6,096,284
GST payable
2,056,663
1,791,467
21,230,310
19,004,911
9(a) Ageing of trade payables
The ageing of trade creditors (financial liabilities) is as follows:
2024
$
2023
$
< 1 month
6,038,903
6,801,222
1 to 3 months
6,303,333
4,315,938
> 3 months
9,592
—
12,351,828
11,117,160
10. OTHER FINANCIAL LIABILITIES
2024
$
2023
$
Current
Borrowingsi
—
3,200,000
Equipment Hire Purchase Facilitiesii
14,648,966
11,345,770
Lease liabilityiii
652,643
597,383
Insurance premium and vehicle registration funding
—
1,817,843
15,301,609
16,960,996
Non-current
Borrowingsi
—
1,333,329
Equipment Hire Purchase Facilitiesii
3,309,535
12,871,314
Lease liabilityiii
1,052,335
1,119,258
4,361,870
15,323,901
i
During the year ended 30 June 2024, the Group repaid in full the Corporate Market Loan with National Australia Bank (NAB), secured
by the Group in December 2019 to fund the acquisition of Deepcore.
ii
The Group finances certain items of equipment under hire purchase agreements with an average term of 3.0 years (2023: 3.3 years)
with these obligations secured by the lessor’s title to goods under the contract. During the year ended 30 June 2024, new facilities
were limited to the acquisition of two LF160 surface drill rigs and accompanying equipment.
The Group’s exposure to interest rate risk has been mitigated in that each individual agreement, within the wider facility, has interest
rates fixed for the duration of the finance period. Effective interest rates payable under finance leases are between 3.34% and 7.55%
(2023: 3.34% and 7.22%). The fair value of the finance lease liabilities is approximately equal to the carrying amount.
iii
Lease liability relating to the recognition of right-of-use assets as discussed in Note 8.
55
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
10(a) Reconciliation of movement in other financial liabilities
YEAR ENDED 30 JUNE 2024
AT 1 JULY
2023
$
CASH
PROCEEDS
$
NON-CASH
FUNDING
RECEIVED
$
RIGHT-OF-
USE LEASE
LIABILITY
ADJUSTMENT
$
CASH
REPAYMENTS
$
AT 30 JUNE
2024
$
Borrowings
4,533,329
—
—
—
(4,533,329)
—
Equipment Hire Purchase
Facilities
24,217,084
—
3,736,432
—
(9,995,015)
17,958,501
Lease liability
1,716,641
—
—
597,134
(608,797)
1,704,978
Insurance premium and
vehicle registration funding
1,817,843
—
—
—
(1,817,843)
—
Total
32,284,897
—
3,736,432
597,134
(16,954,984)
19,663,479
YEAR ENDED 30 JUNE 2023
AT 1 JULY
2022
$
CASH
PROCEEDS
$
NON-CASH
FUNDING
RECEIVED
$
RIGHT-OF-
USE LEASE
LIABILITY
ADJUSTMENT
$
CASH
REPAYMENTS
$
AT 30 JUNE
2023
$
Borrowings
7,733,333
—
—
—
(3,200,004)
4,533,329
Equipment Hire Purchase
Facilities
35,189,074
—
1,058,992
—
(12,030,982)
24,217,084
Lease liability
2,016,795
—
—
218,052
(518,206)
1,716,641
Insurance premium and
vehicle registration funding
441,321
—
3,362,523
—
(1,986,001)
1,817,843
Total
45,380,523
—
4,421,515
218,052
(17,735,193)
32,284,897
10(b) Equipment Hire Purchase Facilities
2024
$
2023
$
Minimum future hire purchase facility payments
Not later than 1 year
15,408,845
12,317,445
Later than 1 year and not later than 5 years
3,531,184
13,412,642
Minimum future lease payments
18,940,029
25,730,087
Less future finance charges
(981,528)
(1,513,003)
17,958,501
24,217,084
56
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
10(c) Lease Liabilities
2024
$
2023
$
Minimum future lease liability payments
Not later than 1 year
749,053
689,345
Later than 1 year and not later than 5 years
1,125,125
1,130,144
Minimum future lease payments
1,874,178
1,819,489
Less future finance charges
(169,200)
(102,848)
1,704,978
1,716,641
10(d) Loans
A summary of borrowing arrangements applicable to all loans is included in Note 10(i) through to 10(iii). Security
pledged under these borrowing arrangements is detailed in Note 13.
10(e) Credit standby arrangements with banks
The major facilities at year end are summarised below:
TOTAL
$
USED
$
UNUSED
$
NAB business overdraft facility
15,000,000
—
15,000,000
NAB hire purchase facility
30,000,000
17,039,312
12,960,688
11. PROVISIONS
2024
$
2023
$
Current
Employee benefit provisions
12,004,137
11,487,929
12,004,137
11,487,929
Non-current
Employee benefit provisions
1,324,540
1,265,864
1,324,540
1,265,864
57
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
12. PROPERTY, PLANT AND EQUIPMENT
LEASEHOLD
IMPROVEMENTS
$
PLANT AND
EQUIPMENT
$
MOTOR
VEHICLES
$
FURNITURE
AND
FITTINGS
$
CAPITAL
WIP
$
TOTAL
$
At 1 July 2023
Cost or fair value
669,113
158,356,415
21,975,892
1,507,761
1,779,743
184,288,924
Accumulated depreciation
(231,868)
(96,455,066)
(15,758,705)
(1,237,118)
—
(113,682,757)
Net book amount
437,245
61,901,349
6,217,187
270,643
1,779,743
70,606,167
Year ended 30 June 2024
Opening net book amount
437,245
61,901,349
6,217,187
270,643
1,779,743
70,606,167
Additions
—
9,443,834
808,037
48,533
7,270,590
17,570,994
Transfers
16,647
5,043,205
12,575
17,280
(5,089,707)
—
Disposals
—
(166,692)
(132,746)
—
—
(299,438)
Depreciation
(102,403)
(23,381,754)
(1,576,272)
(97,704)
—
(25,158,133)
Closing net book amount
351,489
52,839,942
5,328,781
238,752
3,960,626
62,719,590
At 30 June 2024
Cost or fair value
685,760
170,821,984
21,341,014
1,573,574
3,960,626
198,382,958
Accumulated depreciation
(334,271)
(117,982,042)
(16,012,233)
(1,334,822)
—
(135,663,368)
Net book amount
351,489
52,839,942
5,328,781
238,752
3,960,626
62,719,590
At 1 July 2022
Cost or fair value
299,267
150,878,144
19,651,821
1,351,757
2,668,720
174,849,709
Accumulated depreciation
(163,173)
(73,316,213)
(14,868,193)
(1,077,996)
—
(89,425,575)
Net book amount
136,094
77,561,931
4,783,628
273,761
2,668,720
85,424,134
Year ended 30 June 2023
Opening net book amount
136,094
77,561,931
4,783,628
273,761
2,668,720
85,424,134
Additions
—
4,916,077
1,431,059
—
6,229,210
12,576,346
Transfers
369,846
4,952,682
1,627,946
167,713
(7,118,187)
—
Disposals
—
(436,482)
(55,701)
(926)
—
(493,109)
Depreciation
(68,695)
(25,092,859)
(1,569,745)
(169,905)
—
(26,901,204)
Closing net book amount
437,245
61,901,349
6,217,187
270,643
1,779,743
70,606,167
At 30 June 2023
Cost or fair value
669,113
158,356,415
21,975,892
1,507,761
1,779,743
184,288,924
Accumulated depreciation
(231,868)
(96,455,066)
(15,758,705)
(1,237,118)
—
(113,682,757)
Net book amount
437,245
61,901,349
6,217,187
270,643
1,779,743
70,606,167
Depreciation expense recognised of $25,158,133 and $26,901,204 during the years ended 30 June 2024 and
30 June 2023 respectively, excludes depreciation of $592,110 and $529,464 on right-of-use assets recognised
during those corresponding years (refer Note 8).
Additions of $17,570,994 and $12,576,346 during the years ended 30 June 2024 and 30 June 2023 respectively
include amounts of $3,736,432 and $1,058,992 which were funded by Hire Purchase facilities as per Note 10(a).
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.
58
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
13. ASSETS PLEDGED AS SECURITY
The following has been pledged as security in relation to the Group’s bank overdraft and other financial liabilities.
Corporate Market Loan — National Australia Bank
This facility was obtained to fund the acquisition of Deepcore drilling with advances secured by way of a first
ranking general security agreement over all present and after acquired property of all companies within the
Group. The facility was repaid in full during the year ended 30 June 2024.
Bank overdraft — National Australia Bank
The advances made under this $15m facility are secured by a first ranking general security interest over all present
and after acquired property of each of the subsidiaries within the Group.
Equipment hire purchase facilities — National Australia Bank
As at 30 June 2024, the Group had entered into various individual equipment hire purchase arrangements
with National Australia Bank (NAB). Any outstanding principal balances that exist in relation to hire purchase
arrangements provided by NAB, are secured over the assets to which the equipment finance facility relates and a
first ranking general security charge over the interest over all present and after acquired property of each of the
subsidiaries within the Group.
Equipment hire purchase facilities — other lenders
The Group has also entered into minor equipment hire purchase facilities with other lenders. Under the terms of
these facilities, security is limited to the assets to which the facility relates.
14. INCOME TAX
2024
$
2023
$
Income tax expense recognised in profit or loss
Income tax expense comprises
Current tax on profit for the year
7,891,065
5,444,280
Deferred tax expense — origination and reversal of temporary differences
(3,739,887)
(2,721,800)
Adjustments recognised in current year in relation to tax of prior years
(73,198)
(50,333)
Other
16,300
—
Income tax expense
4,094,280
2,672,147
The income tax expense for the year can be reconciled to the accounting profit as follows:
Profit before tax from continuing operations
13,268,821
10,280,762
Income tax expense calculated at 30%
3,980,646
3,084,228
Tax effect of fair value decrease to contingent consideration liability
—
(495,671)
Tax effect of other expenses that are not deductible in determining
taxable profit
170,532
133,923
Adjustments recognised in current year in relation to tax of prior years
(73,198)
(50,333)
Other
16,300
—
Income tax expense
4,094,280
2,672,147
The tax rate used for 2024 and 2023 reconciliations above is the corporate tax rate of 30% payable by Australian
corporate entities on taxable profits under Australian tax law.
59
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
14(a)
Deferred Tax Balances
Deferred income tax assets and liabilities are attributable to the following tax losses and temporary differences:
DEFERRED TAX ASSETS
2024
$
2023
$
Accrued expenses
375,087
428,671
Employee benefit and other provisions
3,998,603
3,826,138
Impairment loss on trade receivables
—
602,335
Right-of-use lease liabilities
511,493
515,226
Other
116,216
173,817
Deferred tax assets on temporary differences
5,001,399
5,546,187
Deferred tax asset on tax losses
362,008
8,179,875
Total deferred tax assets
5,363,407
13,726,062
DEFERRED TAX LIABILITIES
2024
$
2023
$
Right of-use lease assets
(439,801)
(438,294)
Property, plant and equipment
(11,328,698)
(15,681,027)
Consumable inventories
(964,633)
(884,585)
Prepayments
(170,582)
(176,115)
Other
(14,724)
(6,793)
Total deferred tax liabilities
(12,918,438)
(17,186,814)
Set-off of deferred tax assets pursuant to set-off provisions
5,363,407
13,726,062
Net deferred tax liabilities
(7,555,031)
(3,460,752)
60
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
Movements in deferred tax assets on temporary differences and tax losses are as follows:
TEMPORARY DIFFERENCES
ACCRUED
EXPENSES
$
PROVISIONS
$
IMPAIRMENT
LOSS TRADE
RECEIVABLES
$
RIGHT-OF-
USE LEASE
LIABILITY
$
OTHER
$
TOTAL
$
Balance at 30 June 2022
636,769
3,161,387
—
605,272
235,671
4,639,099
Credited/(charged) to current tax
—
—
—
—
—
—
Credited/(charged) to profit or loss
(208,098)
664,751
602,335
(155,462)
(61,854)
841,672
Recognised directly in other
comprehensive income
—
—
—
—
—
—
Reduction in carrying value of
lease liability
—
—
—
65,416
—
65,416
Balance at 30 June 2023
428,671
3,826,138
602,335
515,226
173,817
5,546,187
Credited/(charged) to current tax
—
—
(602,335)
—
—
(602,335)
Credited/(charged) to profit or loss
(53,584)
172,465
—
(182,873)
(57,601)
(121,593)
Increase in carrying value of
lease liability
—
—
—
179,140
—
179,140
Balance at 30 June 2024
375,087
3,998,603
—
511,493
116,216
5,001,399
TAX LOSSES
OPENING
BALANCE
$
RELATED TO
PRIOR YEARS
$
UTILISED
DURING YEAR
$
CLOSING
BALANCE
$
30 June 2024
8,179,875
73,198
(7,891,065)
362,008
30 June 2023
13,573,822
50,333
(5,444,280)
8,179,875
As at 30 June 2024, the Group has recognised deferred tax assets of $362,008, being available tax losses per the
lodged tax return for the year ended 30 June 2023, substantially reduced by the utilisation of a portion of those
assets based on estimated taxable income for the year ended 30 June 2024.
61
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
Movements in deferred tax liabilities are as follows:
TEMPORARY DIFFERENCES
CUSTOMER
CONTRACTS
$
PROPERTY,
PLANT, AND
EQUIPMENT
$
CONSUMABLE
INVENTORIES
$
RIGHT-OF-
USE LEASE
ASSETS
$
PRE-
PAYMENTS
$
OTHER
$
TOTAL
$
Balance at 30 June 2022
(330,147)
(17,338,120)
(649,594)
(531,717)
(148,431)
(3,517)
(19,001,526)
Credited/(charged) to
current tax
—
—
—
—
—
—
—
Credited/(charged) to
profit or loss
330,147
1,657,093
(234,991)
158,839
(27,684)
(3,276)
1,880,128
Increase in carrying value
of right-of-use lease asset
—
—
—
(65,416)
—
—
(65,416)
Balance at 30 June 2023
—
(15,681,027)
(884,585)
(438,294)
(176,115)
(6,793)
(17,186,814)
Credited/(charged) to
current tax
—
—
—
—
—
—
—
Credited/(charged) to
profit or loss
—
4,352,329
(80,048)
177,633
5,533
(7,931)
4,447,516
Increase in carrying value
of right-of-use lease asset
—
—
—
(179,140)
—
—
(179,140)
Balance at 30 June 2024
—
(11,328,698)
(994,633)
(439,801)
(170,582)
(14,724)
(12,918,438)
14(b) Unrecognised amounts
2024
$
2023
$
Unused tax losses
—
—
Franking account balance
94,815
1,069,022
62
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
15. ISSUED CAPITAL
The tables below reconcile movement in the number of shares and payments for shares bought back during the
years ended 30 June 2023 and 30 June 2024 respectively.
FULLY PAID ORDINARY SHARES
NO. OF SHARES
GROSS OF
SHARE ISSUE
COSTS
$
SHARE ISSUE
COSTS
$
ISSUED CAPITAL
$
Balance at 1 July 2022
225,401,769
83,492,875
(3,251,109)
80,241,766
Shares bought back on-market and
cancelled, including transaction costs
(6,762,066)
(2,469,472)
—
(2,469,472)
Balance at 30 June 2023
218,639,703
81,023,403
(3,251,109)
77,772,294
Shares issued pursuant to Executive Share
and option plan
947,968
—
—
—
Shares bought back on-market and
cancelled, including transaction costs
(5,664,169)
(2,218,915)
—
(2,218,915)
Balance at 30 June 2024
213,923,502
78,804,488
(3,251,109)
75,553,379
* Balance is gross of share issue costs (refer Note 16).
(i)
On-market share buyback
On 14 July 2022, the Group commenced an on-market share buyback on the following key terms:
•
the price paid for shares purchased under the buyback will be no more than 5% above the volume weighted
average price of the Company’s shares over the five days of trading prior to the purchase; and
•
the number of shares purchased under the buyback will not exceed 10% of the Company’s fully paid ordinary
shares (approximately 24 million shares).
The buyback was extended by a further 12 months during the current financial year and is now intended to be in
place until July 2025.
In the year ended 30 June 2024, the Group had bought back 5,664,169 shares (2023: 6,762,066) for a combined
consideration of $2,218,915 (2023: $2,465,404) net of transaction costs.
Subsequent to 30 June 2024, the Group has bought back an additional 64,565 shares for a combined
consideration of $25,428, meaning, to date, the number of shares bought back total 12,490,800 shares for a
combined consideration of $4,713,815, net of transaction costs.
63
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
16. SHARE BASED PAYMENT TRANSACTIONS
2024
$
2023
$
Equity-settled share-based payment transactions
Executive share and option plan
329,462
214,608
Total expense recognised for equity-settled share-based payment
329,462
214,608
Executive share and option plan
Mitchell Services Limited operates an Executive Share and Option Plan (ESOP) for executives and senior
employees of the Group. In accordance with the provisions of the plan, as approved by shareholders at a
previous annual general meeting, the Board may designate a Director or employee of the Company as an eligible
participant of the ESOP (Eligible Participant). The Board may offer rights, options or shares to an Eligible
Participant under the ESOP. A participant is not required to pay for the grant of any rights or options or for the
issue of shares.
The objectives of the ESOP are to:
•
Attract and retain a high standard of managerial and technical personnel for the benefit of the Group
•
Establish a method by which Eligible Participants can participate in future growth and profitability
of the Group
•
Provide an incentive and reward for Eligible Participants for their contributions to the Group.
Equity instruments offered under the ESOP are subject to satisfaction of certain vesting conditions (tested two
years after the offer date).
The Group accounts for instruments that are still in their vesting period issued under the ESOP 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.
(i)
Measurement of fair values — Employee Option Plan
Set out below are summaries of options granted under ESOP:
YEAR ENDED 30 JUNE 2024
YEAR ENDED 30 JUNE 2023
AVERAGE
EXERCISE PRICE
PER SHARE
OPTION
NUMBER OF
OPTIONS
AVERAGE
EXERCISE PRICE
PER SHARE
OPTION
NUMBER OF
OPTIONS
As at 1 July
0.656
8,655,186
0.668
8,079,729
Offered during the year
0.555
1,582,115
0.620
1,606,007
Exercised during the year
—
—
—
—
Forfeited during the year
0.630
(112,982)
0.688
(1,030,550)
As at 30 June
0.641
10,124,319
0.656
8,655,186
Vested and exercisable at 30 June
0.665
6,936,197
0.674
5,499,391
64
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
Share options outstanding at the end of the year have the following expiry dates and exercise prices:
GRANT DATE
EXPIRY DATE
EXERCISE PRICE
OPTIONS AT
30 JUNE 2024
OPTIONS AT
30 JUNE 2023
23 May 2016
23 May 2025
0.395
1,367,898
1,367,898
4 August 2017
4 August 2026
0.539
841,360
841,360
14 June 2018
14 June 2027
0.703
811,312
811,312
14 June 2019
14 June 2028
1.100
617,489
617,489
1 June 2020
1 June 2029
0.910
812,462
812,462
31 May 2021
31 May 2030
0.690
1,048,870
1,048,870
23 June 2022
23 June 2031
0.630
1,436,806
1,549,788
31 May 2023
31 May 2032
0.620
1,606,007
1,606,007
20 June 2024
20 June 2033
0.555
1,582,115
—
Total
10,124,319
8,655,186
Weighted average remaining contractual life
of options outstanding at end of year
5.44 years
5.82 years
Fair value of shares and options not yet vested at 30 June 2024
Options
The calculated fair value at 30 June 2024 of the options provisionally offered during the years ended
30 June 2023 and 30 June 2024 was $129,725 and $145,238 respectively and has been determined using the
Black-Scholes option pricing model. Due to the deferral of the grant date until the number of options that are
vested are determined, the grant date fair value has been provisionally estimated at the year-end date. Expected
volatility is estimated by considering historical volatility of comparable company share prices. The inputs in the
measurement of the fair value at 30 June 2024 of the equity-settled share-based payment plans offered during
the years ended 30 June 2023 and 30 June 2024 were as follows:
PROVISIONALLY OFFERED1
DURING YEAR ENDED
30 JUNE 2023
PROVISIONALLY OFFERED1
DURING YEAR ENDED
30 JUNE 2024
Share price (at 30 June 2024)
$0.445
$0.445
Exercise price
$0.620
$0.555
Expected volatility
47%
47%
Time to maturity
3.5 years
3.5 years
Risk-free interest rate
4.10%
4.10%
Dividend yield
5.38%
5.38%
Fair value per option
$0.0898
$0.1020
Number of options
1,606,007
1,582,115
Total fair value of options
$129,725
$145,238
1
The options have been provisionally offered. These will only be granted post vesting and as such, the grant date is deferred
until such time.
Relating to the above, expenses of $70,268 (2023 offer) and $2,017 (2024 offer) have been recognised on a life
to date basis (offer date through to 30 June 2024) based on a straight-line amortisation of the fair value over the
two-year vesting period. Further, a weighted probability adjustment of 90 per cent has been applied based on the
estimated vesting percentage.
65
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
Shares
The calculated fair value of the shares offered during the years ended 30 June 2023 and 30 June 2024 under the
ESOP was $193,213 and $190,337 respectively at 30 June 2024 and has been determined with reference to the
closing price of the Company’s fully paid ordinary shares at the end of the financial year.
Relating to the above, expenses of $104,657 (2023 offer) and $2,644 (2024 offer) have been recognised on a life
to date basis (offer date through to 30 June 2024) based on a straight-line amortisation of the fair value over the
two-year vesting period. Further, a weighted probability adjustment of 90 per cent has been applied based on the
estimated vesting percentage.
Fair value of shares and options vested during year ended 30 June 2024
Options
The calculated fair value of the options that vested under the ESOP during the year ended 30 June 2024
(which were offered under the ESOP in 2022) was $109,916 as at the vesting date of 23 June 2024 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 at vesting date of the options were as follows:
Share price
$0.420
Exercise price
$0.630
Expected volatility
47%
Time to maturity
3.5 years
Risk-free interest rate
3.92%
Dividend yield
5.55%
Fair value per option
$0.0765
Number of options
1,436,806
Total fair value of options
$109,916
Shares
The calculated fair value of the shares that vested under the ESOP during the year ended 30 June 2024 (which
were offered under the ESOP in 2022) was $181,272 as at the vesting date of 23 June 2024 and has been
determined with reference to the closing price of the Company’s fully paid ordinary shares.
66
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
17. RECONCILIATION OF PROFIT FOR THE YEAR TO NET CASH FLOWS
FROM OPERATING ACTIVITIES
2024
$
2023
$
Profit for the year
9,174,541
7,608,615
Adjustments for:
Depreciation and amortisation
25,750,243
28,531,159
Net gain on disposal of property, plant and equipment
(3,273,174)
(3,213,495)
Income tax benefit
4,094,280
2,672,147
Fair value decrease to contingent consideration liability
—
(1,652,235)
Change in trade and other receivables
5,015,878
1,457,319
Change in other assets
231,039
(381,485)
Change in inventories
(935,466)
(1,607,703)
Change in trade payables and accruals
2,157,007
(2,778,021)
Change in insurance premium funding balance
—
3,362,523
Change in employee benefit provisions
574,884
1,414,596
Recognition of share-based payments
329,462
214,608
Net cash inflow from operating activities
43,118,694
35,628,028
18. GROUP STRUCTURE
The ultimate parent entity within the group is Mitchell Services Ltd (the Company). The consolidated financial
statements incorporate the assets, liabilities and results of the Company and the following controlled entities, that
were held in both current and prior year unless otherwise stated. All entities in the table below form part of the
tax consolidated group as disclosed in note 1(i).
OWNERSHIP INTEREST
HELD BY THE GROUP
ENTITY NAME
ACN
2023
2024
Notch Holdings Pty Ltd
009 271 461
100%
100%
Well Drilled Pty Ltd1
123 980 343
100%
100%
Mitchell Operations Pty Ltd1
165 456 066
100%
100%
Notch No. 2 Pty Ltd
606 170 138
100%
100%
Mitchell Services Share Plan Pty Ltd
610 901 221
100%
100%
Radco Technologies Pty Ltd1
137 688 227
100%
100%
Radco Group Australia Pty Ltd
137 688 745
100%
100%
Deepcore Holdings Pty Ltd1
155 701 885
100%
100%
Deepcore Australia Pty Ltd1
115 967 809
100%
100%
Deepcore Drilling Pty Ltd1
115 935 941
100%
100%
Capture Holdings Pty Ltd
676 079 628
100%
—
Loop Decarbonisation Solutions Pty Ltd
676 109 630
50%
—
1
A deed of cross guarantee was enacted between the Company and these entities during the year ended 30 June 2020. Under the deed,
each company guarantees to support the liabilities and obligations of the others and, by entering into the deed, relief was obtained
from preparing financial statements for each entity under ASIC Class Order 98/1418. These entities, being parties to the deed of cross
guarantee represent a Closed Group for the purposes of the ASIC Class Order. The consolidated income statement and balance sheet of
all entities in the Closed Group are set out below.
67
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
CLOSED GROUP — INCOME STATEMENT
2024
$
2023
$
Revenue
237,045,778
243,293,960
Gain on sale of assets
31,899
939,822
Drilling consumables
(24,268,194)
(25,841,847)
Employee and contract labour expenses
(124,400,705)
(127,416,774)
Fuel and oil
(2,794,787)
(2,967,394)
Freight and couriers
(3,191,387)
(3,322,705)
Hire of plant and equipment
(12,008,232)
(11,376,630)
Insurances
(1,264,300)
(1,233,779)
Legal and consultant fees
(753,263)
(1,139,490)
Rent
(544,722)
(455,327)
Service and repairs
(13,609,705)
(14,327,221)
Travel expenses
(9,942,882)
(11,459,890)
Impairment of trade receivables
—
(2,007,782)
Fair value decrease to contingent consideration liability
—
1,652,235
Depreciation expense
(12,754,728)
(14,627,559)
Amortisation of intangibles
—
(1,100,491)
Finance costs
(349,264)
(967,019)
Other expenses
(7,000,722)
(5,441,405)
Profit before tax
24,194,786
22,200,704
Income tax expense
7,428,968
6,248,631
Profit for the year
16,765,818
15,952,073
68
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
CLOSED GROUP — BALANCE SHEET
2024
$
2023
$
CURRENT ASSETS
Cash and cash equivalents
16,017,782
9,839,155
Trade and other receivables
29,597,976
34,545,642
Other assets
2,046,678
1,835,798
Inventories
9,780,661
8,845,195
Other financial assets
61,081,572
50,305,951
Total current assets
118,524,669
105,371,741
Non-current assets
Investments in controlled entities
15,478,503
15,478,503
Right-of-use assets
1,466,003
1,460,979
Property, plant and equipment
15,632,908
20,063,977
Intangibles at cost
5,755,572
5,755,572
Deferred tax assets
1,734,339
8,433,080
Total non-current assets
40,067,325
51,192,111
Total assets
158,591,994
156,563,852
CURRENT LIABILITIES
Trade and other payables
21,240,133
18,544,588
Other financial liabilities
5,529,756
11,111,744
Provisions
12,004,137
11,487,929
Total current liabilities
38,774,026
41,144,261
Non-current liabilities
Other financial liabilities
1,120,430
2,791,104
Provisions
1,324,540
1,265,864
Total non-current liabilities
2,444,970
4,056,968
Total liabilities
41,218,996
45,201,229
NET ASSETS
117,372,998
111,362,623
EQUITY
Issued capital
74,287,519
76,506,433
Retained earnings
43,085,479
34,856,190
Total equity
117,372,998
111,362,623
69
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
Parent entity
Summarised financial information for the parent entity is as follows:
2024
$
2023
$
Loss for the year
(5,598,930)
(4,148,217)
Other comprehensive income
—
—
Total comprehensive income for the year
(5,598,930)
(4,148,217)
Current assets
15,976,385
731,009
Total assets
67,712,962
60,348,747
Current liabilities
33,469,418
7,901,778
Total liabilities
33,602,636
10,011,028
Total equity of the parent entity comprising of:
Issued capital
74,287,519
76,506,433
Retained earnings
(40,177,193)
(26,168,714)
Total equity
34,110,326
50,337,719
Parent entity contingent liabilities
There are no contingent liabilities required to be disclosed as at 30 June 2024 (2023: nil).
Parent entity capital commitments
There are no capital commitments as at 30 June 2024 (2023: nil).
Parent entity guarantees in respect of the debts of its subsidiaries
The parent entity has entered into a Deed of Cross Guarantee with the effect that the Company guarantees debts
in respect of certain subsidiaries. Further details of the Deed of Cross Guarantee and the subsidiaries subject to
the deed are disclosed within this Note.
70
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
19. FINANCIAL RISK MANAGEMENT
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.
19(a) Interest rate risk
The Group was previously exposed to interest rate risk
on its Corporate Market Loan facility with the NAB
(discussed in Note 10) as this was subject to floating
interest rates however this was paid in full during the
year ended 30 June 2024, while all Equipment Hire
Purchase facilities are at fixed rates. A one percentage
point increase/decrease in interest rates would result
in a net profit after tax decrease/increase of $nil
(2023: $42,931).
19(b) Liquidity risk
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;
•
monitoring undrawn credit facilities;
•
obtaining funding from a variety of sources;
•
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.
71
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
The table below reflects the gross, undiscounted contractual maturity analysis for financial liabilities.
CONTRACTUAL CASH FLOWS
2024
CARRYING
AMOUNT
$
WITHIN
1 YEAR
$
1-2
YEARS
$
2-3
YEARS
$
3-5
YEARS
$
MORE
THAN
5 YEARS
$
TOTAL
$
Trade and
other payables
21,230,310
21,230,310
21,230,310
Equipment hire
purchase facilities
17,958,501 15,408,845
1,936,204
1,594,980
—
—
18,940,029
Lease liability
1,704,978
749,053
600,585
468,040
56,500
—
1,874,178
40,893,789
37,388,208
2,536,789
2,063,020
56,500
—
42,044,517
CONTRACTUAL CASH FLOWS
2023
CARRYING
AMOUNT
$
WITHIN
1 YEAR
$
1-2
YEARS
$
2-3
YEARS
$
3-5
YEARS
$
MORE
THAN
5 YEARS
$
TOTAL
$
Trade and
other payables
19,004,911
19,004,911
—
—
—
—
19,004,911
Borrowings
4,533,329
3,407,411
1,356,566
—
—
—
4,763,977
Equipment hire
purchase facilities
24,217,084
12,317,445
13,169,994
168,456
74,192
—
25,730,087
Lease liability
1,716,641
689,345
695,145
343,149
91,850
—
1,819,489
Insurance premium
and vehicle registration
funding
1,817,843
1,880,013
—
—
—
—
1,880,013
51,289,808
37,299,125
15,221,705
511,605
166,042
—
53,198,477
72
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
19(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.
Details with respect to credit risk of trade and other
receivables is provided in Note 4(a).
All trade and other receivables (whether due or past
due) are considered to be of high credit quality.
Aggregates of such amounts are detailed at Note 4(a).
The credit risk on liquid funds is limited because the
counterparties are banks with high credit-ratings
assigned by international credit-rating agencies.
19(d) Fair Values
Fair value estimation
The carrying values of financial assets and liabilities
as detailed in the Consolidated Statement of Financial
Position and these notes approximate their fair value at
reporting date.
20. RELATED PARTY TRANSACTIONS
20(a) Related parties
The Group’s main related parties are as follows.
(i) Entities exercising control over the Group
Note 18 details all subsidiary companies within the
Group. 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 (KMP)
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. Refer Note 21 for disclosures
relating to KMP.
(iii) Other related parties
Other related parties include entities over which KMP
have control or joint control.
20(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 during the year.
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
$29,333 including GST. Nil amounts remain owing to
this related entity at the end of the reporting period.
Equipment Hub Pty Ltd
In order to satisfy specific contract requirements,
the Group hired plant and equipment not available
in its fleet from Equipment Hub Pty Ltd (Equipment
Hub). Nathan Mitchell is a significant shareholder
of Equipment Hub. Hire of plant and equipment
from this related entity for the year amounted to
$739,550 including GST. In addition to equipment hire,
the Group also purchased minor parts from this entity
during the period, amounting to $49,398 including
GST. An amount of $116,270 remains owing to this
related entity at the end of the reporting period.
The Group also engaged Equipment Hub as a broker
to sell three drilling rigs and an amount of used drill
pipe to third parties. Commission of $167,625 was paid
to Equipment Hub per this arrangement. Nil amount
remains receivable from the related entity at the end of
the period.
Eastwest Drilling and Mining Supplies Pty Ltd
Eastwest Drilling and Mining Supplies Pty Ltd is an
entity controlled by Scott Tumbridge and operate
as a supplier to the Group in the ordinary course of
business. During the year, Eastwest supplied parts,
consumables and hire equipment with amounts
charged totalling $5,167,886. All amounts are inclusive
of GST and were based on normal market rates
and under normal payment terms. An amount of
$602,304 remains owing to this related entity at the
end of the reporting period.
73
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
Mitchell Family Investments (QLD) Pty Ltd
Mitchell Family Investments (QLD) Pty Ltd is an entity
controlled by Nathan Mitchell. The Group leases the
majority of the premises located at 112 Bluestone
Circuit, Seventeen Mile Rocks Brisbane, which is owned
by Mitchell Family Investments (QLD) Pty Ltd. The rent
associated with this property for the reporting period
amounted to $337,660. There are also ancillary utilities
charges of $50,186 (including GST) reflected in the
year. Amounts owing to this related entity at the end of
the year is $28,462.
Mitchell Group Pty Ltd
Mitchell Group Pty Ltd is an entity controlled by
Nathan Mitchell. The Group and this related entity
currently operate under an arrangement whereby
the services of an in-house legal counsel are shared
between the two entities. Net of minor outgoings
recovered by the Group, invoices in relation to this
shared resource totalling $164,092, inclusive of GST,
were issued to the Group by the related entity during
the period with an amount of $20,643 remaining owing
at the end of the reporting period.
As referred above, the Group leases premises at
112 Bluestone Circuit (Head Office) from Mitchell Family
Investments (QLD) Pty Ltd. On 7 December 2023, the
Group entered into an arrangement whereby it has
sublet an area of the Head Office to Mitchell Group Pty
Ltd through to 31 December 2026 with an extension
option. During the current year, the Group charged
Mitchell Group Pty Ltd rent and outgoings totalling
$25,911 and $17,604 respectively, both inclusive of GST,
with an amount of $8,909 remaining receivable by the
Group at the end of the reporting period.
The sublease arrangement discussed above replaced
a separate license deed which had been entered
into on 30 November 2016, whereby Mitchell Group
used a designated area within the Head Office for nil
consideration and on the basis that the Group was
granted the use of the Muswellbrook property (see
below) for nil consideration.
Mitchell Family Superannuation Fund
Mitchell Family Superannuation Fund is an entity
controlled by Nathan Mitchell. On 30 November 2016,
the Group entered into a licence deed with Mitchell
Family Superannuation Fund for the use by the Group
of 119 Thomas Mitchell Drive, Muswellbrook for nil
consideration. There were nil rental charges associated
with this property and the arrangement expired during
the current financial year following the Group’s exit of
this property.
PNG Drilling Trust
PNG Drilling Trust is an entity controlled by Scott
Tumbridge. During the period, the Group hired a
specialist surface rig from this entity for an amount
totalling $199,086, inclusive of GST. An amount of
$17,586 remains owing to this related entity at the end
of the reporting period.
The above related party transactions were based on
normal market rates and under normal payment terms.
21. KEY MANAGEMENT PERSONNEL
Key management personnel compensation
Key management personnel compensation comprised the following:
2024
$
2023
$
Short-term employee benefits
1,645,585
1,691,865
Post-employment benefits
148,592
145,863
Non-monetary benefits
31,865
24,372
Other long-term benefits
20,845
21,139
Share-based payments
145,231
85,828
1,992,118
1,969,067
Compensation of the Group’s key management personnel includes salaries and non-cash benefits, and certain key
management personnel also participate in the Group’s Executive share and option plan (refer Note 16).
74
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
22. AUDITOR’S REMUNERATION
During the year, the following fees were paid or payable for services provided by the auditor or its
related practices:
2024
$
2023
$
Audit and review of financial statements
200,000
172,845
200,000
172,845
23. CAPITAL COMMITMENTS
As at 30 June 2024, the Group had capital commitments of $3,414,046 (2023: $868,840), which includes the
order of a new LF160 drill rig and freedom loader, with the remainder mainly relating to certain items of drilling
equipment and improvements to existing plant and equipment.
24. EARNINGS PER SHARE
2024
$
2023
$
Basic earnings per share
From continuing operations (cents per share)
4.3
3.4
Diluted earnings per share
From continuing operations (cents per share)
4.2
3.4
Basic earnings per share is calculated using earnings and
weighted average number of ordinary shares as follows:
Profit/(loss) for the year attributable to owners
9,174,541
7,608,615
Weighted average number of ordinary shares
214,714,400
221,688,800
Diluted earnings per share is calculated using earnings and
weighted average number of ordinary shares as follows:
Profit/(loss) for the year attributable to owners
9,174,541
7,608,615
Weighted average number of ordinary shares
216,082,298
221,688,800
75
Mitchell Services Ltd
Annual Report 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2024
25. SUPERANNUATION CONTRIBUTIONS
The Group contributes superannuation on behalf of qualifying employees to superannuation funds. The Group is
required 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 $10,874,060
(2023: $10,785,296 ) represents the contributions payable by the Group to these plans in accordance with
contractual employment and statutory obligations. As at 30 June 2024, contributions of $788,314 due in respect
of the 2024 financial year (2023: $963,764) had not been paid over to the plans. These amounts were paid
subsequent to the end of the 2024 financial year.
26. OPERATING SEGMENTS
26(a) 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.
26(b) The Group generates revenue from external customers who individually account for greater than 10% of the
Groups total revenue. The below table sets out the applicable revenue percentage generated from each of these
customers.
2024
%
2023
%
External Customer 1
27.40%
28.51%
External Customer 2
8.97%
13.00%
External Customer 3
7.93%
12.25%
External Customer 4
10.69%
5.47%
27. EVENTS AFTER THE REPORTING DATE
On-market share buyback
Refer Note 15 which discusses details of shares bought back subsequent to 30 June 2024.
Dividend declaration
On 21 August 2024 a final unfranked dividend of 2.00 cents per share was declared for the year ended
30 June 2024. The total estimated dividend is $4,277,179 and is payable on 16 September 2024 to
Mitchell Services Limited shareholders on the share register at 29 August 2024.
Other than the matters noted above, there has not been any matters or circumstance occurring subsequent to
the end of the reporting period that have significantly affected, or may significantly affect, the operations of the
Group, the results of those operations, or the state of affairs of the Group in the future.
76
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
CONSOLIDATED ENTITY
DISCLOSURE STATEMENT
ENTITY NAME
BODY
CORPORATE,
PARTNERSHIP
OR TRUST
PLACE
INCORPORATED
/FORMED
% OF SHARE
CAPITAL HELD
DIRECTLY OR
INDIRECTLY BY
THE COMPANY
IN THE BODY
CORPORATE
AUSTRALIAN
OR FOREIGN
TAX
RESIDENT
JURISDICTION
FOR FOREIGN
TAX RESIDENT
Mitchell Services Ltd
(the Company)
Body corporate
Australia
—
Australian
N/A
Notch Holdings Pty Ltd
Body corporate
Australia
100%
Australian
N/A
Well Drilled Pty Ltd
Body corporate
Australia
100%
Australian
N/A
Mitchell Operations Pty Ltd
Body corporate
Australia
100%
Australian
N/A
Notch No. 2 Pty Ltd
Body corporate
Australia
100%
Australian
N/A
Mitchell Services Share Plan
Pty Ltd
Body corporate
Australia
100%
Australian
N/A
Radco Technologies Pty Ltd
Body corporate
Australia
100%
Australian
N/A
Radco Group Australia Pty Ltd
Body corporate
Australia
100%
Australian
N/A
Deepcore Holdings Pty Ltd
Body corporate
Australia
100%
Australian
N/A
Deepcore Australia Pty Ltd
Body corporate
Australia
100%
Australian
N/A
Deepcore Drilling Pty Ltd
Body corporate
Australia
100%
Australian
N/A
Capture Holdings Pty Ltd
Body corporate
Australia
100%
Australian
N/A
Determination of Tax Residency
In determining tax residency, the consolidated entity has applied the following interpretations:
Australian tax residency
The consolidated entity has applied current legislation and judicial precedent, including having regard to the
Commissioner of Taxation’s public guidance in Tax Ruling TR2018/5.
77
Mitchell Services Ltd
Annual Report 2024
For the year ended 30 June 2024
DIRECTORS’
DECLARATION
1. In the opinion of the directors of Mitchell Services Limited (“the Company”):
a. the consolidated financial statements and notes, as set out on pages 34 to 75 and the Remuneration report
on pages 16 to 25 in the Directors’ report, are in accordance with the Corporations Act 2001, including:
i.
giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its performance,
for the financial year ended on that date; and
ii. complying with Australian Accounting Standards and the Corporations Regulations 2001; and
b. the Consolidated entity disclosure statement as at 30 June 2024 set out on page 76 is true
and correct; and
c. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
2. There are reasonable grounds to believe that the Company and the group entities identified in Note 18 will be
able to meet any obligations and liabilities to which they are or may become subject to by virtue of the Deed
of Cross Guarantee between the Company and those group entities pursuant to ASIC Corporations (Wholly
owned Companies) Instrument 2016/785.
3. The Directors have been given the declarations required by s 295A of the Corporations Act 2001 from the
Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2024.
4. The directors draw attention to Note 1 to the consolidated financial statements which includes a statement
of compliance with International Financial Reporting Standards.
Signed in accordance with a resolution of the directors:
Nathan Andrew Mitchell
Executive Chairman
Dated at Brisbane this 21st day of August 2024
78
Mitchell Services Ltd
Annual Report 2024
78
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
Independent Auditor’s Report
To the shareholders of Mitchell Services Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of
Mitchell Services Limited (the Company).
In our opinion, the accompanying Financial
Report of the Company gives a true and fair view,
including of the Group’s financial position as at
30 June 2024 and of its financial performance for
the year then ended, in accordance with the
Corporations Act 2001, in compliance with
Australian Accounting Standards and the
Corporations Regulations 2001.
The Financial Report comprises:
•
Consolidated statement of financial position
as at 30 June 2024;
•
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;
•
Consolidated entity disclosure statement and
accompanying basis of preparation as at 30
June 2024;
•
Notes, including material accounting policies;
•
Directors’ Declaration.
The Group consists of the Company and the
entities it controlled at the year-end or from time
to time during the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for
the audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our
audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in
accordance with these requirements.
79
Mitchell Services Ltd
Annual Report 2024
Key Audit Matters
Key Audit Matters are those matters that, in our professional judgement, were of most significance in
our audit of the Financial Report of the current period.
This matter was addressed in the context of our audit of the Financial Report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on this matter.
Revenue recognition ($236,828,634)
Refer to Note 2 to the Financial Report
The key audit matter
How the matter was addressed in our audit
The Group’s revenue is generated from the
provision of drilling services to the exploration,
mining and energy industries.
Revenue from contracts with customers was a
key audit matter due to the quantum of the
balance, and the significant audit effort we have
applied in assessing the Group’s recognition
and measurement of revenue throughout the
period.
This was the result of the:
•
High volume of service contract revenue
transactions, with varying rates charged
under each contract.
•
The Group’s judgement involved in applying
the requirements of AASB 15 Revenue
from Contracts with Customers in
identifying the performance obligations
within the contracts; and
•
Manual interface of the Group’s systems
with the general ledger, when in
combination with a high volume of activity,
presents conditions for transactions to be
recorded incorrectly.
In assessing this key audit matter, we involved
senior audit team members who understand
the Group’s business, industry and the
economic environment it operates in.
Our procedures included:
•
Obtaining an understanding of the nature of
the revenue and the related revenue recording
processes, systems and controls. This
included the manual interface between the
drilling report system and the general ledger.
•
Evaluating and challenging the
appropriateness of the Group’s accounting
policies for revenue recognition against the
requirements of AASB 15 and our
understanding of the business.
•
Assessing a sample of customer contracts to
understand the key terms of the
arrangements and the Group’s determination
of the performance obligations.
•
Utilising rules-based analytics to identify gross
revenue transactions with specific
characteristics to focus our further testing. We
tested a sample to underlying documentation.
This included assessing:
•
Existence of an underlying arrangement
with the customer to signed customer
contracts;
•
Amounts invoiced to customers as sourced
from the general ledger against daily drilling
reports as sourced from the drilling report
system, rates per the respective contract
and subsequent receipt from the customer;
and
•
The timing and completion of performance
obligations against underlying evidence of
daily drilling reports and the Group’s revenue
recognition policies.
80
Mitchell Services Ltd
Annual Report 2024
Key Audit Matters (continued)
Revenue recognition ($236,828,634) (continued)
•
Testing a sample of revenue recognised by
the Group during the period under audit, and
one month subsequent to period end, to the
underlying customer signed or acknowledged
invoices and daily drilling reports to check
revenue recognition in the correct period;
•
Evaluating the Group’s disclosures against our
understanding obtained through our testing
and the requirements of AASB 15.
Other Information
Other Information is financial and non-financial information in Mitchell Services Limited’s annual
report which is provided in addition to the Financial Report and the Auditor’s Report. The Directors
are responsible for the Other Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other
Information. In doing so, we consider whether the Other Information is materially inconsistent with
the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
We are required to report if we conclude that there is a material misstatement of this Other
Information, and based on the work we have performed on the Other Information that we obtained
prior to the date of this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
•
preparing the Financial Report in accordance with the Corporations Act 2001, including giving
a true and fair view of the financial position and performance of Mitchell Services Limited,
and in compliance with Australian Accounting Standards and the Corporations Regulations
2001;
•
implementing necessary internal control to enable the preparation of a Financial Report in
accordance with the Corporations Act 2001, including giving a true and fair view of the
financial position and performance of the Mitchell Services Limited, and that is free from
material misstatement, whether due to fraud or error;
•
assessing the Group and Company’s ability to continue as a going concern and whether the
use of the going concern basis of accounting is appropriate. This includes disclosing, as
applicable, matters related to going concern and using the going concern basis of accounting
unless they either intend to liquidate the Group and Company or to cease operations, or have
no realistic alternative but to do so.
81
Mitchell Services Ltd
Annual Report 2024
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
to obtain reasonable assurance about whether the Financial Report as a whole is free from
material misstatement, whether due to fraud or error; and
•
to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it
exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf .This description forms part of our
Auditor’s Report.
Report on the Remuneration Report
Opinion
In our opinion, the Remuneration Report of
Mitchell Services Limited for the year ended
30 June 2024, complies with Section 300A
of the Corporations Act 2001.
Directors’ responsibilities
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration
Report in accordance with Section 300A of the
Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included in
pages 16 to 25 of the Directors’ report for the year
ended 30 June 2024.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards.
KPM_INI_01
KPMG
M J Jeffery
Partner
Brisbane
21 August 2024
82
Mitchell Services Ltd
Annual Report 2024
MSV QUOTED ORDINARY SHARES
SPREAD OF HOLDINGS
NUMBER OF
HOLDERS
SHARES
% OF TOTAL
CAPITAL ISSUED
1 – 1,000
112
39,827
0.02%
1,001 – 5,000
337
902,073
0.42%
5,001 – 10,000
195
1,576,713
0.74%
10,001 – 100,000
651
25,143,375
11.75%
Greater than 100,000
245
186,261,514
87.07%
Total
1,540
213,923,502
100.00
Holding less than a marketable parcel
137
68,461
0.03%
THE TWENTY LARGEST LISTED SECURITY HOLDERS COMPRISE:
RANK
SHAREHOLDER
ORDINARY
SHARES
% OF TOTAL
CAPITAL ISSUED
1
Mitchell Group Holdings Pty Ltd
22,374,442
10.46
2
Mitchell Family Investments (Qld) Pty Ltd
18,403,603
8.60
3
Dream Challenge Pty Ltd
14,354,068
6.71
4
HSBC Custody Nominees (Australia) Limited
10,435,028
4.88
5
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
10,362,373
4.84
6
Skye Alba Pty Ltd
6,459,331
3.02
7
Farjoy Pty Ltd
6,312,905
2.95
8
BNP PARIBAS NOMINEES PTY LTD
4,871,415
2.28
9
Rudie Pty Ltd
3,916,120
1.83
10
CITICORP NOMINEES PTY LIMITED
3,268,765
1.53
11
Glengallan Investments Pty Ltd
3,000,000
1.40
12
Banjo Superannuation Fund Pty Ltd
2,335,594
1.09
13
Certane Ct Pty Ltd
2,050,000
0.96
14
Judykaye Investments Pty Ltd
2,000,000
0.93
15
Peter Miller
1,981,681
0.93
16
Oceanwave Asset Pty Ltd
1,830,544
0.86
17
BNP PARIBAS NOMINEES PTY LTD
1,825,754
0.85
18
Sonya Miller
1,761,681
0.82
19
Mr Simon Robert Evans & Mrs Kathryn Margaret Ev-ans
1,650,000
0.77
20
BERNE NO 132 NOMINEES PTY LTD
1,500,000
0.70
Total
120,693,304
56.42
The following information is current as at 12 August 2024.
ADDITIONAL AUSTRALIAN
STOCK EXCHANGE INFORMATION
83
Mitchell Services Ltd
Annual Report 2024
UNQUOTED AND RESTRICTED SECURITIES
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
NUMBER OF OPTIONS
Management options
10,124,319
SUBSTANTIAL SHAREHOLDERS
The following is a summary of the current substantial shareholders pursuant to notices lodged with the ASX in
accordance with section 671B of the Corporations Act.
NAME
DATE OF
NOTICE
ORDINARY
SHARES1
% OF TOTAL
CAPITAL ISSUED2
Mitchell Group Holdings Pty Ltd and associates
17 May 2023
41,413,695
18.84%
Dream Challenge Pty Ltd
29 Nov 2019
14,354,068
7.20%
1
As disclosed in the most recent notice lodged with the ASX by the substantial shareholder.
2
The percentage set out in the notice lodged with the ASX is based on the total share capital at the date of interest.
VOTING RIGHTS
Ordinary shares
The voting rights attached to ordinary shares is set out below:
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.
The following information is current as at 12 August 2024.
ADDITIONAL AUSTRALIAN
STOCK EXCHANGE INFORMATION
84
Mitchell Services Ltd
Annual Report 2024
BOARD OF DIRECTORS
Executive Chairman
Nathan Andrew Mitchell
Non-Executive Directors
Peter Richard Miller
Robert Barry Douglas
Neal Macrossan O’Connor
Peter Geoffrey Hudson
Scott David Tumbridge
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
P:
07 3722 7222
W: mitchellservices.com.au
SHARE REGISTRY
Link Market Services
10 Eagle Street
Brisbane QLD 4000
P:
07 3320 2200
F:
02 9287 0309
W: linkmarketservices.com.au
AUDITORS
KPMG
Heritage Lanes
Level 11, 80 Ann Street
Brisbane QLD 4000
P:
07 3233 3111
F:
07 3233 3100
W: home.kpmg/au
TAXATION ADVISORS
PricewaterhouseCoopers
480 Queen Street
Brisbane QLD 4000
P:
07 3257 5000
F:
07 3257 5999
W: pwc.com.au
BANKERS
National Australia Bank
255 Queen Street
Brisbane QLD 4000
P:
13 22 65
F:
1300 882 536
W: nab.com.au
COMPANY
DIRECTORY