Annual Report 2024
DESERT SANDS
TO GLOBAL LANDS
CULTIVATING GLOBAL GROWTH
2024 is the
Year of the Camel
2024 is the
Year of the Camel
DESERT SANDS
TO GLOBAL LANDS
CULTIVATING GLOBAL GROWTH
SERVCORP'S AIM
To be the world's finest Workspace Solutions provider;
providing IT and commercial services second to none;
giving our clients a commercial advantage; paying our
people reasonable wages; and giving our shareholders
an acceptable return on the funds they invest.
CONTENTS!!
1978
Servcorp was founded
in Sydney, Australia by
Alf Moufarrige, CEO.
1986
Servcorp Coworking
Product is introduced
to our clients.
1998
Servcorp is first to provide
instant broadband internet
access with the launch of
Servcorp Smart Office®.
1999
Publicly listed on the
Australian Securities
Exchange (ASX:SRV).
Servcorp operated in 8
countries with 35 floors.
2002
Servcorp wins Deloitte Fast
50 Award for IT excellence.
Launched Servcorp Hottdesk®
and IP communications
systems.
2010-2011
During the 2010 and 2011 years,
Servcorp opened a further 53
floors and expanded into 26
new cities and 7 new countries.
2009
Launch of Servcorp Onefone and
Servcorp Onefax. Servcorp wins
Australian Export Award – Large
Services. Servcorp operated in 14
countries, with 73 floors; in 10 years
Servcorp had doubled its size.
2020-2022
The COVID-19 pandemic
creates unprecedented
challenges.
OUR JOURNEY SO FAR
OUR SERVICES
Offices
Dedicated
Desk
Hot Desk
Virtual
Offices
2024
Servcorp announces expansion
plans for the Middle East.
Operating in 20 countries, 40 cities
and 125+ locations globally.
Servcorp Limited ABN 97 089 222 506
02
2024 in Review
04
Global Locations
06
Chairman’s Message
08
CEO’s Message
10
Our Workplace
12
Servcorp Home
14
Information & Communication Technology
16
ESG
18
Environment
20
Charities and Cultural Support
23
Our Directors and Executives
24
Global Communications Network
27
Corporate Governance
32
Directors’ Report
41
Remuneration Report
55
Financial Report
102
Consolidated Entity Disclosure Statement
107
Auditor’s Report
113
Shareholder Information
115
Corporate Information
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
01
YEAR OF THE CAMEL...WE ARE OVER THE HUMP
SERVCORP GEOGRAPHIC SPREAD
(by Floors)
1. “Underlying” is a non-statutory measure and is the primary reporting measure used by senior management & Board of Directors for the purpose of assessing the
performance of the business.
2. “Underlying free cash” is net operating cash flows before tax, minus cash rent paid, adjusted for significant items (before tax) which relate to the reported financial year
however, because of timing, either occurred in the preceding financial year or will occur in the subsequent financial year.
3. “NPBIT” is the Statutory NPBT adjusted for significant items (before tax) that are one-off in nature and that do not reflect the underlying performance of the business,
and includes mature floors only.
RESULTS SUMMARY
12 months ended 30 June
2020
$’000
2021
$’000
2022
$’000
2023
$’000
2024
$’000
Revenue and other income
352,872
275,655
275,573
295,546
317,013
Net operating cash flows
182,266
139,650
145,583
155,531
165,791
Underlying free cash 1, 2
66,132
49,067
52,486
61,667
72,454
Underlying net profit before non-cash impairments and tax 1, 3
37,580
30,045
31,026
42,255
56,650
Return on funds invested
30%
28%
39%
54%
68%
Cash and investments
109,100
104,542
108,230
116,354
115,692
Net assets
220,961
194,614
198,254
187,778
194,617
cents
cents
cents
cents
cents
Earnings per share
7.2
24.3
28.9
11.4
39.9
Dividends per share
20.0
18.0
20.0
22.0
25.0
1
Philippines
23 australia
4 thailand
30 japan
8 USA
7 UAE
4 qatar
1
kuwait
7 france
5 belgium
3 UK
3 lebanon
2 turkey
1
germany
17 saudi arabia
3 bahrain
1
malaysia
4 singapore
2 new zealand
6 greater china
1. Before Non-cash impairments and tax
110% GAIN IN 4 YEARS
Underlying free cash
$ MILLIONS
61.7
72.5
FY23
52.5
FY22
49.1
FY21
75.0
FY25
FY24
Actual
Guidance Minimum
Underlying net profit1
$ MILLIONS
42.3
56.6
FY23
31.0
FY22
30.0
FY21
63.0
FY25
FY24
Actual
Guidance Median
REVENUE
$ MILLIONS
295.5
FY23
275.6
FY22
275.7
FY21
317.0
FY24
Actual
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
02
03
servcorp floors and locations
(30 JUNE)
126
111
125
129
129
132
108
107
106
112
FY20
FY21
FY22
FY23
FY24
Locations
Floors
servcorp offices
(30 JUNE)
FY24
5,326
FY23
5,150
FY22
5,162
FY21
5,141
FY20
5,039
OUR OASES
GREATER CHINA
BEIJING
• Level 24, Tower 3, China Central Place
• Level 26, Fortune Financial Center
CHENGDU
• Level 18, Shangri-La Office Tower
GUANGZHOU
• Level 54, Guangzhou IFC
SHANGHAI
• Level 23, Citigroup Tower
• Level 40, One Museum Place
MALAYSIA
KUALA LUMPUR
• Level 33, Ilham Tower
PHILIPPINES
MANILA
• Level 24, One Bonifacio High Street
SINGAPORE
SINGAPORE
• Level 42, Suntec Tower Three
• Level 39, Marina Bay Financial Centre
Tower 2
• Level 8, The Metropolis Tower 2
• Level 24, CapitaGreen
THAILAND
BANGKOK
• Level 11, Mercury Tower
• Level 18, Park Ventures Ecoplex
• Level 29, The Offices at Centralworld
• Level 8, Zuellig House Building,
1 Silom Road
JAPAN
FUKUOKA
• Level 15, Fukuoka Tenjin Fukoku
Seimei Building
• Level 2, NMF Hakata Ekimae Building
NAGOYA
• Level 40, Nagoya Lucent Tower
• Level 4, Nagoya Nikko Shoken Building
• Level 16, Enishio Meieki
OSAKA
• Level 9, Edobori Center Building
• Levels 18 & 19, Hilton Plaza West
Office Tower
• Level 7, Honmachi Minami Garden City
TOKYO
• Level 11, Aoyama Palacio Tower
• Level 14, Hibiya Central Building
• Level 20, Marunouchi Trust Tower
• Levels 2 & 3, Marunouchi
Nijubashi Building
• Level 1, Yusen Building
• Level 7, Wakamatsu Building
• Level 8, Nittochi Nishi-Shinjuku Building
• Level 9, Ariake Frontier Building Tower B
• Level 28, Shinagawa Intercity Tower A
• Level 32, Shinjuku Nomura Building
• Level 21, Shiodome Shibarikyu Building
• Level 27, Shiroyama Trust Tower
• Level 45, Sunshine 60
• Level 27, Tokyo Sankei Building
• Level 18, Yebisu Garden Place Tower
• Level 8, Tri-Seven Roppongi
• Level 7, The Nihonbashi Daiei Building
• Level 12, Yanmar Tokyo
• Level 11, Toho Hibiya Promenade Building
YOKOHAMA
• Level 10, Hulic Minato Mirai
KINGDOM OF BAHRAIN
MANAMA
• Levels 22 & 41, West Tower Bahrain
Financial Harbour
• Level 13, Diplomatic Commercial
Office Tower
KUWAIT
KUWAIT CITY
• Level 18, Sahab Tower
LEBANON
BEIRUT
• Levels 2 & 3, Louis Vuitton Building
• Level 9, Qubic Square
QATAR
DOHA
• Levels 14 & 15, Commercial Bank Plaza
• Level 22, Tornado Tower
• Level 21, Doha Tower
KINGDOM OF SAUDI ARABIA
AL KHOBAR
• Level 21, Al Khobar Gate Tower
JEDDAH
• Level 26, King’s Road Tower
• Level 7, Al Murjanah Tower
MADINAH
• Level 7, Abu Ouf Plaza Center
RIYADH
• Level 6, Gate D, Al Akaria Plaza
• Levels 13 & 18, Al Faisaliah Center
• Level 1, BuiIding No. 7, The Business Gate
• Level 29, Olaya Towers Tower B
• Ground Floor, Levels 1 & 2, Roshn
Business Front
• Ground Floor, Levels 1, 2 & 3, Building 13,
Laysen Valley
• Levels 2 & 3, Building 12, Laysen Valley
• Level 7, Building 4.07, King Abdullah
Financial District
UNITED ARAB EMIRATES
ABU DHABI
• Level 36, Etihad Towers
• Level 17, World Trade Center
DUBAI
• Level 23, Boulevard Plaza 2
• Levels 41 & 42, Emirates Towers
• Level 21, Al Habtoor Business Tower
• Level 54, Almas Tower
BELGIUM
BRUSSELS
• Levels 11 & 12, Bastion Tower
• Levels 0, 5 & 6, 2-4 Schuman Roundabout
FRANCE
PARIS
• Ground Floor to Level 6, 10 Avenue Kléber
GERMANY
BERLIN
• Level 8, Linkstrasse 2 Potsdamer Platz
TURKEY
ISTANBUL
• Levels 5 & 6, Louis Vuitton Orjin Building
UNITED KINGDOM
LONDON
• Level 18, 40 Bank Street, Canary Wharf
• Level 30, The Leadenhall Building
• Level 1, Devonshire House, One
Mayfair Place
UNITED STATES OF AMERICA
CHICAGO
• Level 42, 155 North Wacker
• Level 17, River Point
HOUSTON
• Level 39, TC Energy Center
• Level 56, Williams Tower
NEW YORK CITY
• Level 23, 1330 Avenue of the Americas
• Level 40, 17 State Street
• Level 85, One World Trade Center
WASHINGTON D.C.
• Level 10, 1717 Pennsylvania Avenue
AUSTRALIA
ADELAIDE
• Levels 24 & 30, Westpac House
BRISBANE
• Level 19, 10 Eagle Street
• Level 27, Santos Place
CANBERRA
• Level 1, The Realm
• Level 9, Nishi Building
HOBART
• Level 6, Reserve Bank Building
MELBOURNE
• Level 27, 101 Collins Street
• Level 40, 140 William Street
• Level 2, 1 Southbank Boulevard
• Level 19, 263 William Street
PERTH
• Level 28, AMP Tower
• Level 25, 1 Spring Street, Capital Square
SYDNEY
• Level 35, Tower One, Barangaroo
• Level 17, Chifley Tower
• Level 36, Gateway
• Levels 57 & 63, 25 Martin Place
• Level 26, 44 Market Street
• Level 22, Westfield Tower Two,
Bondi Junction
• Level 14, 3 Parramatta Square,
Parramatta
• Level 9, Avaya House, Macquarie Park
• Level 5, Nexus Norwest
• Level 25, 100 Mount Street, North Sydney
NEW ZEALAND
AUCKLAND
• Level 8, 139 Quay Street
WELLINGTON
• Level 2, Bell Gully Building
8 NEW LOCATIONS
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
04
05
CHAIRMAN’S REPORT - IT’S BEEN AN
EXCITING RIDE
The 2024 financial year was a landmark year for Servcorp.
We benefited from improved trends in many of our markets, achieving record underlying
net profit before non-cash impairments and tax.
Servcorp is a proven, innovative business
and well positioned to capitalise on the
evolution of flexible working. After a period
of consolidation, we have returned to
floor growth, and have seen continued
like‑for‑like improvement in both our office
and coworking revenue.
Revenue for the year was $317.0 million, up
7% on last year.
Statutory net profit before tax for the year
was $42.9 million, an increase of 153%.
Net profit after tax was $39.0 million, with
earnings per share of 39.9 cents, up 249% on
last year. Our mature business result, before
non-cash impairments and tax (NPBIT)
was $56.6 million, up 18% on 2023, and
exceeding our 2024 financial year guidance.
During the 2024 financial year, the
business generated underlying free cash
of $72.5 million, up 18% on 2023. Cash
and investment balances at 30 June 2024
were $115.7 million, a decrease of 0.6%; the
Company has no external debt. Having
strong cash balances positions Servcorp
to capitalise on our growth strategy.
Directors have declared a final dividend
of 13.0 cents per share, 20% franked. This
final dividend brings total dividends for
the 2024 financial year to 25.0 cents per
share, resulting in a payout to shareholders
of approximately $24.6 million, up 16%
on 2023. Directors expect to maintain
future dividend payments consistent with
our long-term history and commitment
to shareholders.
Due to our strong balance sheet, cash
reserves and global presence, we were
able to expand our footprint in select
markets in 2024. We have already
committed to growth in the 2025 financial
year, particularly in Saudi Arabia, and
continue to look for further opportunities
for growth, in mature markets with proven
management performance.
While we are still seeing the impacts of an
inflationary environment and uncertainty
about the global economy, we enter the
2025 financial year with a positive mindset.
For the 2025 financial year, our view is
that, subject to no worsening near‑term
economic conditions globally, Servcorp’s
mature net profit before non-cash
impairment of assets and tax will be
between $61.0 million and $65.0 million. In
line with this guidance and performance,
we expect to produce more than
$75.0 million in underlying free cash.
These forecasts are subject to currencies
remaining constant, global financial
markets remaining stable and any
continued impacts of global economic
uncertainties on our operations.
Demand for Coworking has surged
as businesses evolve to adopt flexible
workspace capability. Servcorp has
provided this capability for four decades
and is determined to stay ahead in this
changing competitive landscape utilising
our unparalleled technology platform,
which provides the capability to adapt to
the requirements for flexibility.
Servcorp has the leading products in
the industry, a unique value proposition
that truly differentiates, global reach,
strong cash generation and healthy net
cash position; all of which reinforce our
confidence in Servcorp’s potential to
continue to drive healthy returns for our
shareholders, and maintain our position
as the world’s premium provider of
Workspace Solutions.
On behalf of the Board, I want to
acknowledge the outstanding efforts of our
CEO, Alf Moufarrige; our leadership group;
and all the Servcorp Team Members, for
their dedication and commitment during
the past year.
We look to the future with optimism, and
thank you, our shareholders, for your
continuing support.
THE HON. MARK VAILE AO
CHAIRMAN
$317.0M
REVENUE
Up 7% on LY
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
06
07
YEAR IN REVIEW
CHAIRMAN’S MESSAGE
THE CEO’S REPORT
CAFE >
< GIFT SHOP
As predicted, an all-time record underlying operating profit of AU$56million has
been achieved.
Our underlying operating profit has
doubled in 3 years.
Free cash produced above AU$70million.
A record dividend projected for next year.
No debt. Over AU$120million in cash. Plus,
our push into Saudi Arabia, and the overall
position of this little Aussie company
is excellent!
Most chief executives would love to be in
this position.
We’ve projected further growth in this
Financial Year as we continue to prudently
expand when we see opportunities that
have a high probability of success.
It’s the product, our great team,
and the geographic spread that has
given us the critical mass supported by a
complete set of I.T. solutions to enhance our
service levels.
Designer locations commissioned
by building owners and wannabe
Servcorps, that empty Starbucks in an
attempt to protect capital values have
been unsuccessful.
The work from home with the ability to
seamlessly transit to the office is Servcorp’s
exclusive territory and very difficult to beat.
Our team this year has made an untiring
effort supported by an able active Board.
I would like to thank them all.
Let’s hope we have another great year!
A G MOUFARRIGE AO
CEO
THE 56 REPORT
$71.2M
FREE CASH
Up 22% on LY
Record
Underlying NPBIT
$56.6M
CHAIRMAN’S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
08
09
YEAR IN REVIEW
CEO'S MESSAGE
If you are a key player in the market and require shared workspace, you need support,
service and IT capabilities. Don’t be tricked by what others are offering...it’s a mirage.
Since 1978, Servcorp has been the answer for any business, enabling our clients to
work from anywhere in the world.
SERVCORP WILL HELP YOU FIND
YOUR OASIS IN THE DESERT
The past few years have changed the way
people choose to work.
Servcorp has always been better positioned
than any other workspace solutions
operator to provide all facilities a business
needs to operate with flexibility.
Businesses have evolved and their
requirements for space are in a state of
change. Servcorp’s solution for those that
require flexibility and working from home
capability is a Serviced Office, Virtual
Office, or Coworking, because this allows
businesses to continue operating using
our team and technology; a dedicated
receptionist, mail management, IT
solutions, local phone number, Onefone
and many other services.
Servcorp is perfectly able to continue
answering calls from clients, no matter
where they are based, and forward them
to wherever they are requested. Call
forwarding can be controlled by the client
through remote access.
Servcorp is the only Workspace Solutions
provider that has built the support
infrastructure for remote work. We have
been the incubator for many entrepreneurs
who have been working remotely yet still
conquering the world.
A COMPANY WITH 45 YEARS OF
UNBEATABLE SOLUTIONS
Servcorp, since its inception in 1978, has
always led the development of workspace
solutions, and has grown organically
since its IPO in 1999. At the time of the IPO,
Servcorp operated in 8 countries with 35
floors. By June 2009, Servcorp operated
in 14 countries, with 73 floors; in 10 years
Servcorp had doubled its size.
In 2009 the global market conditions
created an opportunity to secure leases on
what was expected to be very favourable
terms. This represented an attractive
opportunity for aggressive expansion.
During October and November 2009,
Servcorp successfully undertook an equity
capital raising of $80 million to fund a
global expansion program. During the 2010
and 2011 years Servcorp opened a further
53 floors and expanded into 26 new cities
and 7 new countries.
At 30 June 2024, Servcorp operated 132
floors in 40 cities across 20 countries.
THE FUTURE
Demand for Coworking has surged
as businesses evolve to adopt flexible
workspace capability. Servcorp is
determined to stay ahead in this changing
competitive landscape utilising our
unparalleled technology platform, which
provides the capability to adapt to the
requirements for flexibility.
Competition may be fierce, but nobody
has the focus of Servcorp on building the
infrastructure that clients need to succeed
in the digital age.
We select only the most premium buildings,
in the most dynamic locations, so that
our clients’ business benefits from a
recognisable CBD address. The spectacular
views welcome clients and business
partners as they arrive in the lobby; they
get the ‘wow’ factor with highest standards
of interior styling, hand-chosen original
art-work, fine leather furniture and our
signature checkerboard granite floor.
We have absolute confidence that our
product is better and our team is motivated.
OUR NEW OASIS LOCATIONS
During the year we opened eight floors
across six new locations. Our new locations
include Laysen Valley in Riyadh, Toho Hibiya
Promenade Building in Tokyo, Quay Street
in Auckland, Enishio Meieki Building in
Nagoya, 263 William Street in Melbourne
and King Abdullah Financial District
in Riyadh.
• Laysen Valley is situated at the
crossroads of King Khalid Road &
Aluruba Road and across the street
from the Diplomatic Quarter. Laysen
Valley features a distinctive & vibrant
design which is inspired from the Salmani
architecture. The development consists
of several facilities; The Garden, Mosque,
Retail Zone and Administrative Towers
which serve the community and act as
a center for business, leisure, shopping
& hospitality.
• The Toho Hibiya Promenade Building
overlooks the lush greenery of Hibiya
Park and the Outer Gardens of the
Imperial Palace - the views from the
building are spectacular. The building
has acquired the CASBEE Smart Wellness
Office Evaluation Certification, a
building environment evaluation system,
featuring specifications and performance
that support the maintenance and
improvement of the health and comfort
of our clients and team working in
the building.
• Located at the base of the Princes
Wharf on Auckland Harbour, in the
heart of Auckland’s CBD, 139 Quay
Street is the epitome of convenience.
Visitors will be impressed with the
building’s grand hotel‑style lobby
entrance and original artwork. As well
as the views across stunning Auckland
Harbour and city skyline, the building
features views of Whangaparoa
Peninsula, the North Shore and
Auckland Museum.
• KAFD is proudly home to the tallest
skyscraper in Riyadh. The overall
destination of KAFD spans over a total
gross floor area of 3.2 million square
meters, encompassing a land area
of 1.6 million square meters. KAFD
boasts the prestigious honour of being
the largest LEED ND (Leadership in
Energy and Environmental Design for
Neighbourhood Development) Stage 2
platinum certified project in the world.
QUAY ST, AUCKLAND
WORK REMOTELY YET STILL HAVE:
WORK REMOTELY….
CONQUER THE WORLD
FROM ANYWHERE
BUILDING 4.07,
KAFD RIYADH
TOHO HIBIYA
PROMENADE,
TOKYO
SPACE TO SUIT
YOUR WORK STYLE
CALL SYD
OUR CALM SPACE IN THE WORKPLACE DESERT
Servcorp …. If you are not
with us, you may as well be
lost in the desert!
GROW INTO AN OFFICE — ACROSS THE COUNTRY — ACROSS THE GLOBE!
From the desert to
the sea, Servcorp
is the answer to
your workplace
requirements.
We believe in taking a genuine interest in the growth
and success of your business, after all your success
means we are doing something right! To this end, our
focus is on providing business solutions to help you
save time and money, allowing you vital portability
and flexibility to do business anywhere, any time.
10
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
11
A TRUSTED BUSINESS COMMUNITY
TO GROW YOUR BUSINESS WITH
Servcorp’s Community allows businesses to
connect, collaborate and come together
with over 50,000 fellow businesses globally.
Consider it a private global business
network. The Community consists of
businesses from 41 major cities across the
globe, coming together in one location:
SERVCORP HOME
(https://home.servcorp.com).
Servcorp’s difference, compared to other
business communities and associated
platforms, is that every individual business
as well as its registered employees, go
through a verification process. Access to
the platform is contingent on the successful
verification of both the business and the
individuals. At Servcorp, we have over
45 years of experience, so we know that
one of the fundamental requirements of
running a successful business is having the
right trusted connections. This is the very
reason we built our community platform
for our clients.
YOUR BUSINESS MARKETPLACE
No matter how big your business is or
where you run it from, using Servcorp’s
Community platform, you will be in
constant contact with those that you buy
from or sell to, consult to or seek advice
from. The platform allows each business
and employee to establish a profile that
is published and searchable by other
community members. Members have
the option of communicating within the
platform using the inbuilt messaging tool,
using Global Dial, which is a free call over
the Servcorp network, or offline using any
of the contact options provided within the
member profiles.
Like any good community, one of the
most valuable features is the sharing of
knowledge amongst community members.
In Servcorp Community, articles are used
to share information whilst also providing
value to the contributor by marketing
their business. We have found over the
long period we have had the Servcorp
Community platform in place, articles have
been a great tool to initiate discussions
and increase collaboration amongst our
community members.
STAYING FLEXIBLE
@ SERVCORP HOME
In addition to the Community, Servcorp
Home provides our clients with the
ability to manage their workspaces and
communication services. In an environment
where workplace flexibility has become the
norm, our real-time Workspace booking
tool has been very effective in supporting
our clients’ ongoing needs, meeting
both their workspace and budgetary
requirements. This flexibility and in
particular, mobility, is also supported in our
clients’ communication needs with Servcorp
Home providing a unique capability of
allowing clients to update, in real-time,
their call answering, handling and diversion
settings of their designated Servcorp
telephone numbers.
Servcorp Home, maintained by our I.T.
Enablers, gives Servcorp clients a real
market advantage.
YOUR GLOBAL MARKETPLACE
WHAT IS COMING?
The primary focus for Servcorp Home in
FY 2024/2025 is to enhance the Servcorp
Marketplace as an environment and
platform for increased engagement,
targeting what every client needs – SALES!
• Update the Servcorp Home User Interface
to provide more targeted support for
advertising client products with an
intelligent search capability to help
promote interaction.
• Enhance the client experience of Servcorp
Home, with a strategic target on
Marketplace services.
• Establish a Servcorp Mobile Application
utilising native capabilities to notify
clients of any opportunities in the
Marketplace and subsequently support
ongoing collaboration to support the
sales process.
YOUR WISH IS
OUR COMMAND!
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
12
13
OUR REFRESHING SPRING OF TECHNOLOGY
Our vision is to empower Servcorp and its clients with market-leading Information and
Communication Technology (ICT) products and services that provide a competitive
advantage in an experience that is smart, simple, and consistent.
SERVCORP’S ICT MISSION IS TO
DELIVER ON THE FOLLOWING:
• To evolve our products and services to
allow Servcorp clients to establish a
competitive market edge;
• Innovate with purpose-built technology
that underpins our key product and
service offerings;
• Enhance our client experiences
stemming from new capabilities, insights,
and systems;
• Provide a global IT team to support the
business 24 hours a day, seven days a
week, delivering a stable and reliable
service to clients; and
• Promote ongoing exposure to innovative
technology to ensure Servcorp, and
subsequently, Servcorp’s clients, remain
ahead of the curve.
Here are several key ICT initiatives and
activities for FY 2023/2024:
NEW CLIENT MANAGEMENT
APPLICATION ROLLOUT
Servcorp developed a new proprietary
purpose-built client management
application that is used internally by
our enterprise users. The purpose of the
application is to allow for the effective
servicing, support and billing of clients
whilst establishing a performance
management dashboard to allow for
real‑time tracking and forecasting of
Servcorp’s operation. In FY 2023/2024,
the application was successfully rolled
out and is now supporting Servcorp’s
entire operation.
SMART OFFICE® DIGITAL
ECOSYSTEM
The purpose-built Servcorp digital
ecosystem, SmartOffice, has continued to
evolve with ongoing development targeting
key areas which are aimed at supporting
Servcorp’s strategic goals. The following
enhancements were completed:
BOOKINGS
A new booking system has been architected
to extend on the current system whilst
capturing a greater range of billable
resources across Servcorp’s portfolio,
with support for flexible pricing models
to accommodate future commercial
requirements. In FY 2023/2024, the system
went through various iterations before
commencement of the migration program
in May 2024.
The migration is due to be completed by
early FY 2024/2025.
CHECK-INS
Servcorp has developed a SmartOffice
application that digitises the current
process of managing and tracking a client’s
consumption of flexible workspace. In
FY 2023/2024, several successful field trials
were conducted trialling various methods
and technologies, with a final version
approved for deployment. The deployment
program has been established and
commenced in June 2024.
The deployment program is targeted to be
completed by the end of FY 2024/2025.
MESSAGING
As an ongoing effort to streamline and
enhance client communication, the
Servcorp proprietary messaging application
is undergoing an upgrade. In FY 2023/2024,
further enhancement of the application
commenced with development focusing
on extending other messaging capabilities
outside of traditional email and SMS
services and the addition of further tooling
to increase communication productivity,
consistency and security.
The application is currently under
development and is targeted to be released
at the end of FY 2024/2025.
5. ACCESS THE MOST ADVANCED GLOBAL
COMMUNICATION SYSTEM
Global Redundancy
& Disaster Recovery
Conference
Calling
Voicemail
To SMS
Video
Conferencing
Voicemail
Notifications
Zoom Rooms
Automated
Attendant
Secure Wi-Fi
Security
Voicemail &
Fax to Email
IP Video Phones
Internet Exchange
Peering
4. TAKE YOUR OFFICE WITH YOU ANYWHERE YOU GO
Onefone
Global Dial
3. EXPAND YOUR BUSINESS WITH EASE
Local
Number
Professional Phone
Greetings
2. RUN YOUR BUSINESS MORE EFFICIENTLY
IT Support
IT Enablers
Call
Screening
Security
Tier 1 Internet
Connectivity
1. NEVER MISS THAT IMPORTANT CALL
Live
Receptionist
Call
Diversion
Find Me
Follow Me
TAKEN BY OUR CEO - A 5 MINUTE BIKE RIDE FROM SERVCORP MAYFAIR
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
14
15
ESG: A HANDS-ON APPROACH
The Servcorp Board and Management recognises the importance of sound
Environmental, Social and Governance (ESG) practices as part of their responsibility
to our clients, shareholders, communities, team members and the environment in
which Servcorp operates.
ESG AT SERVCORP
Our sustainability strategy is in progress.
The landscape of ESG reporting is evolving
rapidly; changes in regulations will result in
Servcorp becoming subject to mandatory
climate disclosures for the year ending
30 June 2027, and we have commenced the
process of assessing the actions that will be
needed, with a view to incorporating this for
future reports. The Company’s sustainability
approach moves beyond compliance,
to help shape Servcorp’s role in driving
meaningful change.
The increasing adoption of digital
innovation and other technologies are
changing the shape of the workspace
solutions industry. There are increasing
awareness of and expectations around
ESG from all stakeholders.
Servcorp continues to focus on increasing
our understanding of the potential impacts
of significant climate events, and climate
change more broadly, on our business, and
implementing mitigation and adaptation
actions to manage current and future risk
according to our management framework.
We judge that the likely impact of potential
climate risks on Servcorp’s business
continuity, and on our ability to continue to
provide professional services effectively, is
low. Our products and services have proven
to mitigate the risks for our clients.
ENVIRONMENTAL GREENPRINT FOR THE FUTURE
There is growing need for businesses to
become sustainable to ensure the protection
of the environment from further damage.
Servcorp acknowledges the seriousness
and the challenges of climate change;
challenges drive progress, and our ambition
is to become a sustainability leader in our
industry. Opportunities exist to embed
sustainability in many ways, and we have
three distinct areas of focus; Reduce, Offset
and Educate.
As a global company, we have a
responsibility for taking a leadership role
amongst both team members and clients
worldwide to educate them on our values
and attitude towards the environment. We
will endeavour to make everyday changes,
such as reducing paper use, recycling
waste materials and using energy efficient
processes, to help make a difference.
As Servcorp continues to grow and open
new locations, we choose green buildings
as another step in the right direction,
and further reduce our impact on the
environment. See more about our new
buildings on page 11.
Servcorp also takes a proactive approach
to re-establishing natural ecosystems
through revegetation, offsetting
greenhouse emissions and conservation
projects. Since 2007, Servcorp has
supported The Green Offices Project as
our global platform for these initiatives.
See our full Greenfleet journey on page 18.
ETHICAL STANDARDS
Servcorp is serious about social
responsibility, and we respect human
rights as fundamental to our business and
the communities in which the Company
operates. Servcorp is fully committed to
operating responsibly, establishing, and
adhering to, the highest ethical standards
across its global operations.
We seek to protect against all forms of
modern slavery and serious exploitation
including human trafficking, forced labour
and child labour within our organisation
and its supply chain. Training resources are
available online for the continual education
of all team members. Servcorp lodges an
annual statement in accordance with the
Commonwealth Modern Slavery Act 2018.
Servcorp holds a high ethical standard in
all aspects in which we conduct business.
Due to the impact bribery and corruption
would have on our team members and
stakeholders, we are committed to acting
professionally, fairly and with integrity in
all our business dealings and relationships,
wherever we operate. By incorporating
preventative measures through our training
resources, in conjunction with our Code of
Conduct, our team members understand
and can recognise fraudulent behaviour,
and through such culture, develop a
workplace with integrity.
DIVERSITY
Servcorp has a culture that both embraces
and achieves diversity in its global
operations, we pride ourselves on being
an industry leader. Servcorp is culturally
diverse in its employment practices and
has a global culture of employing the
best available talent for any position
regardless of gender, age, race or religion.
Servcorp benefits from the diversity of its
team members.
Continual access to training and
development assists with developing
our team members’ skills and career
progression, providing global opportunities
for upward mobility into leadership roles.
Servcorp has a high participation of women
across all employment levels; women
comprise 54.5% of our executive team
and 82.3% off all team members globally.
We are particularly proud that our Saudi
Arabian workforce consists of 60% female
team members.
CHARITY AND CULTURAL SUPPORT
We are grateful that, as a global Company,
we work with our local communities to
bring about real change for good.
Servcorp also encourages team members
to give back to the communities in
which they live and work by contributing
service, leadership and financial support
to the causes and organisations they
feel passionately about. Over the years,
Servcorp has held charity functions and
balls, runs raffles and undertakes donation
drives; every dollar raised by our teams
on the ground is matched dollar for dollar
by Servcorp.
Servcorp supports cultural organisations
such as Australian Chamber Orchestra, The
Art Gallery of NSW, and The St James’ Music
Foundation and provides a platform for
local artists by commissioning their artwork
for our global locations.
We are passionate about supporting
continuing research into the prevention,
support and cure of terminally ill members
of the community. See the organisations we
have supported this year on page 20.
We thank our clients and those who
contributed to the success of our
fundraising for the year.
SOCIAL RESPONSIBILITIES
Servcorp’s global footprint goes hand in hand with a social responsibility to respect
the basic principles for the ways in which people live and work together.
CAPITAGREEN, SINGAPORE
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
16
17
CHIPPING IN FOR THE ENVIRONMENT
Since 2007, Servcorp has supported
The Green Offices Project as our global
platform for re-establishing natural
ecosystems through revegetation,
offsetting greenhouse emissions and
conservation project initiatives.
As part of The Green Offices Project,
Servcorp plants a tree for every Virtual
Office sold online through the Servcorp
website. Virtual Offices, which are
inherently environmentally friendly,
continue to be a driving force behind
the Green Offices Project.
The Project aims to reduce our carbon
emissions, offset our existing footprint
and educate our teams and clients
about improving their day-to-day
impact on the environment. As well as
offsetting greenhouse gas, this action is
helping improve water quality, reduce
soil degradation and provide essential
habitat for native wildlife.
Servcorp’s partnership with Greenfleet
is supporting the restoration of
approximately 83,000 native trees
across multiple forest sites. Our climate
action is resulting in approximately
830,000 square metres of regional land
being restored. This is greater than the
combined floor space occupied by our
network of offices, globally.
Now, we are working with Greenfleet
to grow the ‘Servcorp Forest’ which
is restoring more legally protected
ecosystems and supporting the
reforestation of a Nature Reserve. It
is removing carbon dioxide from the
atmosphere, conserving biodiversity
and restoring habitat for wildlife,
including many endangered species.
Servcorp acknowledges the seriousness of climate change and the impact high
concentrations of greenhouse gases in the atmosphere are having on our planet.
There is growing need for businesses to become sustainable to ensure the protection
of the environment from further damage. We have three distinct areas of focus;
Reduce, Offset and Educate.
OUR GREENFLEET COMMITMENT
Since 2007, Servcorp’s contributions to leading environmental not-for-
profit, Greenfleet, have made a large difference through multiple projects
in various communities around Australia. In 2022, Servcorp expanded our
long-term partnership with Greenfleet, with the intention of contributing
up to $1 million over 10 years to projects for native ecosystem restoration.
MAREEBA WETLANDS (QLD)
Located within the Mareeba Wetlands
Nature reserve on Muluridgi Country,
this project is re-establishing the natural
ecosystem. This property is being restored
over three years and is restoring over
30 hectares of valuable wetland ecosystem
in North Queensland across 3 years.
The Mareeba Wetlands offer critical
conservation opportunities for more
than 220 species of birds, as well as frogs,
reptiles, and fish. Through this project
we will also be supporting restoration of
an area with one of the highest mammal
diversities in the Cape York region, including
the northern quoll (Dasyurus hallucatus),
which is classified as endangered.
CHERRY GULLY & AVON (QLD)
Located north-west of Brisbane, over 250
hectares these two properties are being
restored with Servcorp’s help. This project
will provide extensive wildlife habitat
along the Cherry Gully riparian corridor,
particularly for koalas, which are listed as
endangered in Queensland. With existing
koalas confirmed on the property, this work
will extend habitat and food sources for
the species. By restoring native forest along
Cherry Gully, Ivory Creek and Brisbane River
Catchment, this project will also improve
water quality.
WURNEET LAANG LAANG (VIC)
Servcorp supported the restoration of
Wurneet Laang Laang; a project that has
seen over 60,000 native trees planted since
2016. The property is located at the head
of the Lang Lang River in South Gippsland,
and forms part of Greenfleet’s Stzrelecki
Nature Link. More than 20 different native
species have been planted, including Silver
Wattle (Acacia dealbata) and the Critically
Endangered Stzelecki Gum (Eucalyptus
strzeleckii). In 2019, koalas were found
already living in the three-year-old trees
on the property. The forest is extending
biodiversity and creating habitat and
sources of food for a wealth of native
birds on the property.
CORYMBIA FARM (VIC)
In 2018, Servcorp supported this project
which saw the restoration of more than
26,000 native trees and shrubs at Corymbia
Farm in West Gippsland. This area is
home to the endangered Giant Gippsland
Earthworm (Megascolides australis or
Karmai in the Boon Wurrung language),
which is found nowhere else in the world.
This area is vulnerable to landslides
that disrupt the earthworm’s habitat
and threaten the population. Greenfleet
planted trees strategically to protect the
earthworms from damage and longer-term
habitat degradation.
AVOCA (NSW)
This 1,700-hectare property had been
extensively cleared with the remaining
native vegetation fragmented. Adjacent to
the property is the Buddigower State Forest,
and nearby Buddigower Nature Reserve,
an area of significance for its biological
values containing a critically endangered
ecological community, more than 20 animal
species listed as endangered or vulnerable,
including migrating species such as the
Swift Parrot. This project is creating much
needed landscape connectivity and
enhancing conservation values.
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
19
18
GIVING WATER TO THE DESERT
As a global organisation, Servcorp seeks to support members of the community
through meaningful change. Through this ethos, Servcorp, and our CEO personally,
have donated in excess of $1.20 million to help with many organisations
around the world.
The organisations we would like to highlight this year are:
FY24
FY24
FY24
FY24
$25K
$21K
$25K
$200K
RUN FOR THE CURE
JAPAN
YOUNGCARE
WANDERING
WARRIORS
ST VINCENT’S
HOSPITAL
Servcorp support
RFTC in their efforts to
raise awareness of the
importance for early breast
cancer detection.
RFTC also fund education
programs, such as therapies,
treatment, support groups,
and prevention.
Servcorp’s long standing
relationship with
Youngcare looks to resolve
accommodation needs in
Australia for young people
with specialist disabilities.
Working with Youngcare
since 2007, we continue to
raise awareness and funds
to support Youngcare’s
education pathways and
grants program.
Servcorp contributes to
Wandering Warriors, a
not-for-profit ex-Service
organisation and registered
charity that supports
veterans of Australia’s
Special Operations
Command and their families
transitioning from military to
civilian life.
Wandering Warriors’
support is provided through
education, employment,
mentoring and respite
programs. Servcorp’s
donations assist Wandering
Warriors to provide
these programs.
Servcorp remains passionate
in our fundraising efforts,
ensuring we can assist St
Vincent’s patients, staff
and families.
Our recent donations
contributed towards the
ongoing redevelopment
of the hospital, life saving
equipment and cutting edge
technology for patient care.
SERVCORP ALSO CONTRIBUTED TO MANY OTHER LOCAL CHARITABLE ORGANISATIONS AROUND THE WORLD.
WE WOULD LIKE TO SHARE THE FOLLOWING ORGANISATIONS:
• Cancer Council
• Cerebral Palsy Alliance
• Lifeline
• Maji Zima (Kenya)
• McGrath Foundation
• Movember Australia
• Royal Flying Doctor Service
• Save the Children Australia
• Smith Family
• Special Olympics Australia
• The Fred Hollows Foundation - NZ
• The Friends of Mater Foundation
• Wesley Mission
HILLS WILDLIFE
SANCTUARY
Located in Sydney’s Northwest, spanning across
35 acres of bushland, the Hills Wildlife Sanctuary
provides refuge for Australian native wildlife,
supports the recovery of threatened species and
is working toward establishing an Emergency
Response Centre with the aim to be on the front lines
in natural disasters, treating injured wildlife.
Servcorp is happy to support this organisation,
which is committed to the protection and
treatment of Australia’s unique wildlife.
Meet some of the Aussie battlers Hills Wildlife
Sanctuary is helping and that Servcorp Countries will
be sponsoring.
MORRIS
BOB THE SHINGLEBACK LIZARD
TERRENCE
SPIKE
UAE
DJARA
LARRY
KEVIN
HARRY AND JEMIMA
NIOKA
HTTPS://WWW.HILLSWILDLIFESANCTUARY.ORG/
USA
UK
CHINA
JAPAN
SINGAPORE
SAUDI ARABIA
AUSTRALIA
EUROPE
SQUID THE SQUIRREL GLIDER
QATAR
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
20
21
OUR CAMELEERS
THE BOARD AND EXECUTIVES
ALF MOUFARRIGE AO
Executive Director, CEO
THE HON. MARK VAILE AO
Chairman
WALLIS GRAHAM
Non-executive Director
TONY MCGRATH
Non-executive Director
DAVID HUNT
(B Com, CPA, FINSIA) Chief Financial Officer & Head of South East Asia
GREG PEARCE
(B Com, CA, FGIA, FCG (CS)) Company Secretary
OPERATIONAL EXECUTIVES
OLGA VLIETSTRA
(BA) General Manager | Japan
DAVID GODCHAUX
(MSc Hons) CEO | Europe, Middle East & USA
FABIENNE MOUKHEIBER HAJJAR
(PharmD) General Manager | UK, Germany, Qatar & Lebanon
MANAMI ALBERTO
(BA) Sales Director | Japan
HEAD OFFICE AND ADMINISTRATIVE EXECUTIVES
SHUKRI DOZOM
(BS Chemistry (Applied Chemistry Branch)) Regional Online Marketing Manager | Middle East, Europe & USA
STEVE GAINER
Global Accounts | Japan
MEGAN GALE
International Training & Development Manager
DANIEL KUKUCKA
(MBA, BE) Chief Information Officer
JON PARK
(BBus) Vice President | Product and marketing
ELENA SHI
(BCom, MPAcc, CPA) General Manager | Global Finance
REBECCA DEVLIN
(Dip Leadership Management) Regional Director | AUNZ
JESSICA BRUNEN
(BEc (SocSc)) Regional Director | AUNZ
BRYCE RYAN
(AdvDipNetSec) Chief Technology Officer
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
23
OUR SANDSTORM OF
COMMUNICATIONS
Chicago
Houston
London
Istanbul
Beirut
Kuwait City
Manama
Abu Dhabi
Bangkok
Kuala Lumpur
Singapore
Chengdu
Beijing
Manila
Guangzhou
Shanghai
Osaka
Yokohama
Tokyo
Perth
Brisbane
Auckland
Sydney
Canberra
Wellington
Hobart
Melbourne
Adelaide
Nagoya
Fukuoka
Doha
Jeddah
Riyadh
Al Khobar-dammam
Paris
New York City
Washington D.C.
Berlin
Brussels
Dubai
“WE WROTE THE
BOOK ON THE REMOTE
WORK WORLD”
enishio meieki nagoya
KAFD, Riyadh
toho hibiya
promenade tokyo
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
24
25
CORPORATE GOVERNANCE
The Board of Directors of Servcorp Limited (Servcorp or the Company) has responsibility for
the long term financial health and prosperity of Servcorp. The Directors are responsible to the
shareholders for the performance of the Company and the Consolidated Entity and to ensure
that it is properly managed.
The Board is committed to the principles underpinning the ASX Corporate Governance
Council Principles and Recommendations. The Board is continually working to improve
Servcorp’s governance policies and practices, where such practices will bring benefits or
efficiencies to Servcorp.
Details of Servcorp’s compliance are set out below, and in the ASX principles compliance
statement on Servcorp’s website; servcorp.com.au. The information in this statement is
current as at 22 August 2024 and has been approved by the Board.
ROLE OF THE BOARD
The central role of the Board is to set Servcorp’s strategic direction and to oversee Servcorp’s management and
business activities.
Responsibility for management of Servcorp’s business activities is delegated to the CEO and management.
The Board’s primary responsibilities are:
demonstrating leadership;
the protection and enhancement of long term shareholder value;
ensuring Servcorp has appropriate corporate governance structures in place;
defining Servcorp’s purpose and setting strategic direction;
approving Servcorp’s statement of values and code of conduct to underpin the desired culture within Servcorp;
monitoring Servcorp’s performance and overseeing management in its implementation of the strategic direction and instilling
Servcorp’s values;
appointing the Chief Executive Officer and evaluating his performance and remuneration;
overseeing the integrity of the entity’s accounting and corporate reporting systems, including the external audit;
monitoring business performance and results, including whenever required, challenging management and holding them to
account;
identifying areas of significant risk and setting the risk appetite within which the Board expects management to operate, and
satisfying itself that Servcorp has in place an appropriate risk management framework (for both financial and non-financial
risks), including monitoring and reporting mechanisms to manage those risks;
establishing appropriate standards of ethical behaviour and a culture of corporate and social responsibility;
approving senior executive remuneration policies, and satisfying itself those remuneration policies align with the entity’s
purpose, values, strategic objectives and risk appetite;
ratifying the appointment of the Chief Operating Officer, Chief Financial Officer and the Company Secretary, and ensuring
appropriate pre-appointment checks have been undertaken;
monitoring compliance with continuous disclosure policy in accordance with the Corporations Act 2001 and the Listing Rules
of the Australian Securities Exchange;
monitoring that Servcorp acts lawfully and responsibly;
reporting to shareholders;
addressing all matters in relation to issued securities of the Company including the declaration of dividends;
ensuring the Board is, and remains, appropriately skilled to meet the changing needs of Servcorp.
The Board Charter is available on Servcorp’s website; servcorp.com.au
SOLUTIONS FOR EVERY
BUSINESS LANDSCAPE!
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
26
27
CORPORATE GOVERNANCE
COMPOSITION OF THE BOARD
The size and composition of the Board is determined by the Board, subject to the limits set out in the Company's Constitution
which requires a minimum of three Directors and a maximum of twelve Directors.
The Board comprises four Directors (one executive and three non-executive). All three non-executive Directors are considered
to be independent.
There has been no change to the Board since the last annual report.
The Chair of the Board, The Hon. Mark Vaile, is an independent non-executive Director.
The non-executive Directors bring to the Board an appropriate range of skills, experience and expertise to ensure that Servcorp
is run in the best interest of all stakeholders. The skills, experience and expertise of each Director in office at the date of this
annual report are set out on pages 32 and 33 of this annual report. The Board will continue to be made up of a majority of
independent non-executive Directors. The performance of non-executive Directors was reviewed during the year.
The names of the Directors of the Company in office at the date of this annual report are set out in the table below.
DIRECTORS’ INDEPENDENCE
It is important that the Board is able to operate independently of executive management.
The non-executive Directors are considered by the Board to be independent of management. Independence is assessed by
determining whether the Director is free of any business interest or other relationship which could materially interfere with the
exercise of their unfettered and independent judgement and their ability to act in the best interests of Servcorp.
NAMES OF DIRECTORS IN OFFICE AT THE DATE OF THIS ANNUAL REPORT
DIRECTOR
FIRST APPOINTED
NON-
EXECUTIVE
INDEPENDENT
RETIRING AT
2024 AGM
SEEKING
RE-ELECTION
A G Moufarrige
24 August 1999
No
No
No
N/A
M Vaile
27 June 2011
Yes
Yes
No
N/A
W Graham
3 October 2017
Yes
Yes
No
N/A
T McGrath
27 August 2019
Yes
Yes
Yes
Yes
ELECTION OF DIRECTORS
The Company’s Constitution specifies that an election of Directors must take place each year. One-third of the Board (excluding
the Managing Director and rounded down to the nearest whole number), and any other Director who has held office for three or
more years since they were last elected, must retire from office at each annual general meeting. The Directors are eligible for re-
election. Directors may be appointed by the Board during the year. Directors appointed by the Board must retire from office at
the next annual general meeting.
All Director appointments or changes are dealt with by the Nomination Committee.
CONFLICT OF INTEREST
In accordance with the Corporations Act 2001 and the Company’s Constitution, Directors must keep the Board advised, on an
ongoing basis, of any interest that would potentially conflict with those of Servcorp. Where the Board believes that an actual or
potential significant conflict exists, the Director concerned, if appropriate, will not take part in any discussions or decision making
process on the matter and will abstain from voting on the item being considered. Details of Director related entity transactions
with the Company and the Consolidated Entity are set out in Note 29 to the Consolidated financial report.
DIRECTOR AND OFFICER DEALINGS IN COMPANY SHARES
Servcorp policy prohibits Directors, officers and senior executives from dealing in Company shares or exercising options:
in the six weeks prior to the announcement to the ASX of the Company’s half-year and full-year results; or
whilst in possession of non-public price sensitive information.
Directors must discuss proposed purchases or sales of shares in the Company with the Chair before proceeding. If the Chair
proposes to purchase or sell shares in the Company, he must receive approval from the next most senior non-executive Director
before proceeding. Directors must also notify the Company Secretary when they buy or sell shares in the Company. This is
reported to the Board.
In accordance with the provisions of the Corporations Act 2001 and the Listing Rules of the ASX, each Director has entered into
an agreement with the Company that requires disclosure to the Company of all information needed for it to comply with the
obligation to notify the ASX of Directors’ holdings and interests in its securities.
The Company’s Securities Trading Policy is available on Servcorp’s website; servcorp.com.au
CORPORATE GOVERNANCE
INDEPENDENT PROFESSIONAL ADVICE
Each Director has the right to seek independent professional advice, at Servcorp’s expense, to help them carry out their
responsibilities. Prior approval of the Chair is required, which will not be unreasonably withheld. A copy of any written advice
received by the Director is made available to all other members of the Board.
CONTINUOUS DISCLOSURE
Servcorp is committed to ensuring that all shareholders and investors are provided with full and timely information and that all
stakeholders have equal and timely access to material information concerning Servcorp. Procedures are in place to ensure that
all price sensitive information is disclosed to the ASX in accordance with the continuous disclosure requirements of the
Corporations Act 2001 and ASX Listing Rules.
The Company Secretary has been appointed as the person responsible for communications with the ASX.
AUDITOR INDEPENDENCE
The Company’s auditor KPMG was appointed at the annual general meeting of the Company on 5 November 2020.
KPMG rotate their audit engagement partner every five years.
KPMG have established policies and procedures designed to ensure their independence, and provide the Audit and Risk
Committee with an annual confirmation as to their independence.
ETHICAL STANDARDS
Servcorp’s global network goes hand in hand with a social responsibility to respect the basic principles for the ways in which
people live and work together. Servcorp is serious about its social responsibility, and we respect human rights as fundamental to
our business and the communities in which the Company operates.
All Directors, Executives and Team Members acknowledge their responsibility and commitment to act with the utmost integrity
and objectivity, striving at all times to enhance and protect the reputation and performance of Servcorp.
Servcorp’s core values are encompassed in our Code of Conduct, Whistleblower Policy and Modern Slavery Statement, which
all Directors, Executives and Team Members are expected to uphold and promote. These provide clear expectations of the way
in which Servcorp must conduct business lawfully, ethically and responsibly, and sets out the standards of conduct and
personal behaviour required.
The Code of Conduct, Whistleblower Policy and Modern Slavery Statement are available on Servcorp’s website;
servcorp.com.au.
DIVERSITY
Servcorp has a culture that both embraces and achieves diversity in its global operations.
Servcorp is culturally diverse in its employment practices and has a global culture of employing the best qualified available talent
for any position regardless of gender, age, race or religion. Servcorp benefits from the diversity of its team members and has
training programs to assist with developing their skills and with career advancement. Servcorp has a practice of traveling team
members to work in its global locations, giving them exposure to and understanding of various differing cultures and marketplaces.
Servcorp has a high participation of women across all employment levels. The proportion of women team members in the whole
organisation, senior executive positions and on the Board is set out in the following table.
FULL TIME
EMPLOYEES
TOTAL
NO.
WOMEN
%
MEN
%
BY REGION
TOTAL
NO.
WOMEN
%
MEN
%
Consolidated entity
674
82%
18%
ANZ/ SEA
244
81%
19%
Senior executive
13
54%
46%
North Asia
195
92%
8%
Board
4
25%
75%
EME
201
73%
17%
USA
34
88%
12%
“Senior executive” are general managers, senior managers and head office executives who report directly to the CEO.
Under the Workplace Gender Equality Act 2012 (WGE Act), any employer with 100 or more employees must submit an Annual
Compliance Report detailing the composition of its workplace profile in Australia. Servcorp has lodged its WGE Report for 2024
with the WGE Agency; since inception of the WGE reporting requirements, the Company and its Australian subsidiaries have
been compliant with the WGE Act.
Shareholders may access the report on Servcorp’s website; servcorp.com.au
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
28
29
CORPORATE GOVERNANCE
COMMITTEES
The Board does not delegate major decisions to Committees. Committees are responsible for considering detailed issues and
making recommendations to the Board. The Board has established three Committees to assist in the implementation of its
corporate governance practices. Details of these Committees are set out on the following pages.
AUDIT AND RISK COMMITTEE
The members of the Audit and Risk Committee during the year were:
Mr T McGrath (Chair)
Mrs W Graham
The Hon. M Vaile
All three current members are independent non-executive Directors.
The Chair of the Audit and Risk Committee is independent and is not the Chair of the Board.
The primary function of the Audit and Risk Committee is to assist the Board to meet its oversight responsibilities in relation to:
ensuring the Company adopts, maintains and applies appropriate accounting and financial reporting processes and
procedures;
reviewing and monitoring the integrity of the Company’s financial reports and statements;
ensuring the Company maintains an effective risk management framework and internal control systems;
monitoring the performance and independence of the external audit process and addressing issues arising from the audit
process.
It is the Committee’s responsibility to maintain free and open communication between the Committee and the external auditor
and the management of Servcorp.
The external auditors attend all meetings of the Committee. The Chief Executive Officer, the Chief Financial Officer and other
senior management attend Committee meetings by invitation.
The Audit and Risk Committee met four times during the year. The Committee meets with the external auditors without
management being present before signing off its reports each half year. The Committee Chairman also meets with the auditors
at regular intervals during the year.
The responsibilities of the Audit and Risk Committee, as stated in its charter, include:
reviewing the financial reports and other financial information distributed externally;
reviewing the Company’s policies and procedures for compliance with Australian equivalents to International Financial
Reporting Standards;
monitoring the procedures in place to ensure compliance with the Corporations Act 2001, ASX Listing Rules and all other
regulatory requirements;
assisting management in improving the quality of the accounting function;
monitoring the internal control framework and compliance structures and considering enhancements;
overseeing the risk management framework;
reviewing external audit reports to ensure that, where major deficiencies or breakdown in controls or procedures have been
identified, appropriate and prompt remedial action is taken by management;
reviewing reports on any major defalcations, frauds and thefts from the Company;
considering the appointment and fees of the external auditor;
reviewing and approving the terms of engagement and fees of the external auditor at the start of each audit;
considering and reviewing the scope of work, reports and activities of the external auditor;
establishing appropriate policies in regard to the independence of the external auditor and assessing that independence;
liaising with the external auditor to ensure that the statutory annual audit and half-yearly review are conducted in an effective
manner;
addressing with management any matters outstanding with the auditors, taxation authorities, corporate regulators,
Australian Securities Exchange and financial institutions;
monitoring the establishment of appropriate ethical standards.
The Audit and Risk Committee Charter is available on Servcorp’s website; servcorp.com.au
CORPORATE GOVERNANCE
NOMINATION COMMITTEE
The Nomination Committee members during the year were:
The Hon. M Vaile (Chair)
Mrs W Graham
Mr T McGrath
The primary function of the Nomination Committee is to support and advise the Board in fulfilling its responsibility to shareholders
in ensuring the Board is comprised of individuals who are best able to discharge the responsibilities of Directors.
Specifically, this will include establishing and reviewing the following matters for non-executive Directors on the Board and Board
Committees:
processes for identification of suitable candidates for an appointment or re-election to the Board, and selection procedures;
necessary and desirable competencies and experience;
processes to review Director contributions and the performance of the Board as a whole;
succession plans;
induction programs;
assessment of the independence of Directors;
gender diversity.
The Nomination Committee met one time during the year.
The Nomination Committee Charter is available on Servcorp’s website; servcorp.com.au
REMUNERATION COMMITTEE
The Remuneration Committee members during the year were:
Mrs W Graham (Chair)
The Hon. M Vaile
Mr T McGrath
The primary function of the Remuneration Committee is to assist the Board in adopting remuneration policy and
practices that:
supports the Board’s overall strategy and objectives;
attracts and retains key team members;
links total remuneration to financial performance and the attainment of strategic objectives.
Specifically, this will include:
making recommendations to the Board on appropriate remuneration, in relation to both the amount and its composition, for
the Chief Executive Officer and senior executives who report to the Chief Executive Officer;
developing and recommending to the Board short term and long term incentive programs;
monitoring superannuation arrangements for the Company;
reviewing recruitment, retention and termination strategies and procedures;
ensuring the total remuneration policy and practices are designed with proper consideration of accounting, legal and
regulatory requirements for both local and foreign jurisdictions;
reviewing the Remuneration Report for the Company and ensuring that publicly disclosed information meets all legal
requirements and is accurate.
The Remuneration Committee shall ensure the Company is committed to the principles of accountability and transparency and
to ensuring that remuneration arrangements achieve a balance between shareholder and executive rewards.
The Remuneration Committee reviews the executive remuneration structures each year to ensure they continue to be appropriate.
Details are included in the Remuneration Report on pages 41 to 52 of this annual report.
The Remuneration Committee met two times during the year. The Chief Executive Officer attends Committee meetings by
invitation to assist the Committee in its deliberations.
The Remuneration Committee Charter is available on Servcorp’s website; servcorp.com.au
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
30
31
DIRECTORS’ REPORT
The Directors of Servcorp Limited (“the Company”) present their report together with the
Consolidated financial report of the “Consolidated Entity”, being the Company and its
controlled entities, for the financial year ended 30 June 2024.
DIRECTORS
The Directors of the Company at any time during or since the end of the financial year are:
ALF MOUFARRIGE AO
THE HON. MARK VAILE AO
WALLIS GRAHAM
Managing Director
Chair
Independent Non-executive Director
FAICD
Independent Non-executive Director
GAICD
Appointed August 1999
Appointed June 2011
Member of Audit and Risk Committee
Appointed October 2017
Member of Audit and Risk Committee
Chief Executive Officer
Member of Remuneration Committee
Chair of Nomination Committee
Chair of Remuneration Committee
Member of Nomination Committee
Alf is one of the global leaders in the
serviced office industry, with over 45
years of experience. Alf is primarily
responsible for Servcorp’s expansion,
profitability, cash generation and currency
management.
Directorships of listed entities in the last
three years:
•
None.
Mark had a distinguished career as an
Australian Federal Parliamentarian from
1993 to 2008. Ministerial Portfolios held
by Mark during his five terms in Federal
Parliament include Minister for Transport
and Regional Development, Minister for
Agriculture,
Fisheries
and
Forestry,
Minister for Trade, and Minister for
Transport and Regional Services.
Mark also served as Deputy Prime
Minister of Australia from July 2005
through to December 2007. He was
instrumental in securing or initiating a
range of free trade agreements between
Australia
and
the
United
States,
Singapore, Thailand, China, Malaysia
and the ASEAN countries.
Since leaving the Federal Parliament in
July 2008, Mark has embarked on a
career in the private sector utilising his
extensive experience across a number of
portfolio areas. He is Chair of Whitehaven
Coal Limited and AAM Investment Group,
a diversified agricultural investment fund,
and is a Director of the Australian
American Leadership Dialogue. Mark is
also a member of the Advisory Council of
the
Australia
Japan
Business
Co-
Operation Committee. Mark was a
Director of StamfordLand Limited from
2009 until July 2024, and Director/
Trustee of Hostplus Superfund Limited,
until 30 June 2021.
Directorships of listed entities in the last
three years:
•
StamfordLand Corporation Ltd (SLC -
listed on SGX) from August 2009 to
July 2024;
•
Whitehaven Coal Limited (WHC)
since May 2012 (Chair).
Wallis has had over 20 years of
experience in finance, including funds
management, corporate finance, private
equity and investment banking. Her
responsibilities have spanned multiple
industries, including business services,
and she has a strong understanding of
emerging technologies and the digital
landscape. She also holds a Senior
Consulting role with Energy Capital
Partners.
Wallis
has
involvement
with
many
community and charitable organisations.
She is currently a Director of Wenona
School Limited, the Garvan Research
Foundation,
the
Sydney
Youth
Orchestras, the Wenona Foundation and
the John Brown Cook Foundation.
Directorships of listed entities in the last
three years:
•
Whitehaven Coal Limited (WHC)
since February 2023.
DIRECTORS’ REPORT
TONY MCGRATH
GREGORY PEARCE
Independent Non-executive Director
BBus (Accounting and Finance) CA
Company Secretary
B Com, CA, FGIA, FCG (CS)
Appointed August 2019
Appointed August 1999
Chair of Audit and Risk Committee
Member of Remuneration Committee
Member of Nomination Committee
Tony has many years of experience in the
Australian financial sector, specialising in
corporate restructuring and governance
advisory related matters. During his
career, Tony has undertaken some of
Australia’s largest and most complex
insolvencies and restructurings.
Tony’s initial career was with KPMG
where he led the Sydney restructuring
team.
In
2004
Tony
founded
McGrathNicol, a national restructuring
and insolvency practice. Tony retired as
a partner of McGrathNicol in 2018 and
remains a consultant to the firm.
Tony has a range of experience with
governance issues, advising boards and
undertaking roles on audit committees.
Over the last 12 years, Tony has
developed a range of specific board skills
in undertaking non-executive roles in
both the corporate and NFP sectors.
Directorships of listed entities in the last
three years:
•
360 Capital Group Limited (TGP)
since March 2022.
Greg joined Servcorp in 1996 as
Financial Controller and was appointed to
his current role of Company Secretary
during the Company’s IPO in 1999. Prior
to joining Servcorp, Greg spent 10 years
working in the Information Technology
business and the 11 years prior to that
working in Audit and Business Services.
Greg
is
a
member
of
Chartered
Accountants Australia and New Zealand
and is a Fellow of the Governance
Institute of Australia.
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
32
33
DIRECTORS’ REPORT
DIRECTORS’ MEETINGS HELD AND ATTENDANCES AT MEETINGS
The number of Directors’ and Board Committee meetings held, and the number of meetings attended by each of the Directors of
the Company, during the financial year is set out in the following table. Only those Directors who are members of the relevant
Committees have their attendance recorded. Other Directors do attend Committee meetings from time to time.
DIRECTOR
BOARD
AUDIT & RISK
COMMITTEE
REMUNERATION
COMMITTEE
NOMINATION
COMMITTEE
Number of meetings held
6
4
2
1
NUMBER OF MEETINGS ATTENDED
A G Moufarrige
6
M Vaile
6
4
2
1
W Graham
6
4
2
1
T McGrath
6
4
2
1
The details of the function and membership of the Committees are presented in the Corporate Governance statement on pages
30 and 31.
DIRECTORS’ INTERESTS
The relevant interest of each Director in the share capital of the companies within the Consolidated Entity, as notified by the
Directors to the Australian Securities Exchange in accordance with s205G(1) of the Corporations Act 2001, at the date of this
report is set out in the following table.
DIRECTOR
ORDINARY SHARES IN SERVCORP LIMITED
OPTIONS OVER
ORDINARY SHARES
DIRECT
INDIRECT
M Vaile
-
35,050
-
A G Moufarrige
547,436
51,475,715
1,000,000
W Graham
14,000
-
-
T McGrath
-
66,853
-
DIRECTORS’ BENEFITS
Since the end of the previous financial year, no Director of the Consolidated Entity has received or become entitled to receive a
benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors shown
in the Consolidated financial report, or the fixed salary of a full-time employee of the Consolidated Entity or of a related entity) by
reason of a contract made by the Consolidated Entity or a related entity with the Director or with a firm of which a Director is a
member, or with an entity in which a Director has a substantial financial interest.
DIRECTORS’ REPORT
PERFORMANCE RIGHTS AND OPTIONS GRANTED
During the year, or since the end of the financial year 2,675,000 Options over unissued ordinary shares of the Company were
issued (2023: 160,000 Performance Rights and 1,002,000 Options).
Performance Rights and Options granted to Directors or the five most highly remunerated officers of the Company, as part
of their remuneration during the year, is set out in the following table.
2024
2023
OPTIONS
PERFORMANCE RIGHTS
SRVAH
SRVAG
SRVAE
Alf Moufarrige
1,000,000
-
-
David Hunt
-
150,000
40,000
David Godchaux
-
200,000
40,000
Fabienne Moukheiber Hajjar
-
100,000
20,000
Olga Vlietstra
-
400,000
60,000
PERFORMANCE RIGHTS AND OPTIONS ON ISSUE
At the date of this report, unissued ordinary shares of the Company under option are:
OPTIONS
PERFORMANCE
RIGHTS
ASX code
SRVAB
SRVAC
SRVAD
SRVAF
SRVAG
SRVAH
SRVAE
Number of
shares
612,500
87,500
100,000
1,002,000
1,675,000
1,000,000
160,000
Exercise price
$2.48
$3.35
$3.54
$3.50
$3.00
$3.35
$0.00
Expiry date
18 September
2025
3 September
2026
19 May
2027
1 September
2027
1 September
2028
1 September
2028
30 September
2025
The Performance Rights and Options do not entitle the holder to participate in any share issue of the Company or any other
body corporate.
OPTIONS EXPIRED
During the year, 18,750 Options over unissued shares expired or were cancelled (2023: 305,000).
During the year, nil Options over unissued shares lapsed (2023: nil).
SHARES ISSUED ON THE EXERCISE OF OPTIONS
During the year, or since the end of the financial year, the Company has issued 1,602,500 Ordinary shares as a result of the
exercise of an option over unissued shares (2023: nil). The amount paid on each share was $2.48.
SHARE BUY-BACK
During the year, or since the end of the financial year, the Company has not bought back any shares.
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
34
35
DIRECTORS’ REPORT
CORPORATE GOVERNANCE
A statement of the Board’s governance practices is set out on pages 27 to 31 of this annual report and on Servcorp’s website,
servcorp.com.au
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The constitution of the Company provides that the Company must indemnify, on a full indemnity basis and to the full extent
permitted by law, each current and former Director, alternate Director or executive officer against all losses or liabilities
incurred in that capacity in defending any proceedings, whether civil or criminal, in which judgement is given in their favour
or in which they are acquitted or in connection with any application in relation to any such proceedings in which relief is
granted under the Corporations Act 2001.
The Company has agreed to indemnify the following current and former Directors of the Company, Mr A G Moufarrige, The Hon.
M Vaile, Mrs W Graham, Mr T McGrath, Mr B Corlett, Mr R Holliday-Smith, Mr T Moufarrige and Mrs J King against any loss
or liability that may arise from their position as Directors of the Company and its controlled entities, except where the liability
arises out of conduct involving a wilful breach of duty. The agreement stipulates that the Company will meet the full amount
of any such liabilities to the extent permitted by law, including reasonable costs and expenses.
The Company has not, during or since the financial year, indemnified or agreed to indemnify an auditor of the Company.
During the financial year the Company has paid insurance premiums in respect of Directors’ and officers’ liability and legal
expenses insurance contracts, for current and former Directors, secretaries and officers of the Company and its controlled
entities. The insurance policies prohibit disclosure of the nature of the liability insured against and the amount of the
premiums.
STATE OF AFFAIRS
There were no significant changes in the state of affairs of the Consolidated Entity during the financial year.
PRINCIPAL ACTIVITIES
The principal activities of the Consolidated Entity during the financial year were the provision of Executive Serviced and Virtual
Offices, Coworking and IT, Communications and Secretarial Services.
There were no significant changes in the nature of the activities of the Consolidated Entity during the year.
CONSOLIDATED RESULTS
Net profit after tax for the financial year was $39.04 million (2023: 11.07 million). Operating revenue was $317.01 million (2023:
$295.55 million). Basic and diluted earnings per share were 39.9 cents and 39.8 cents, respectively (2023: 11.4 cents).
2024
$’000
2023
$’000
Revenue & other income
317,013
295,546
Net profit before tax
42,947
16,993
Underlying net profit before non-cash
impairment of assets and tax (i)
56,650
42,255
Net profit after tax
39,038
11,067
Underlying free cash (ii)
72,454
61,667
Net operating cash flows
165,791
155,531
Cash & investment balances
115,692
116,354
Net assets
194,617
187,778
Return on net funds employed
68%
55%
Cents
Cents
Earnings per share (basic)
39.9
11.4
Dividends per share
25.0
22.0
Notes:
i. Underlying net profit before non-cash impairment of assets and tax is the statutory net profit before tax adjusted for significant items (before tax) that are one-off in
nature and that do not reflect the underlying performance of the business and includes mature floors only. In the 2024 financial year, it excludes operating losses from
new floors pre-maturity and closed floors post-closure of $5.5 million (2023: $9.4 million) and impairment losses, closure costs and other non-recurring costs of $8.2
million (2023: $21.4 million).
ii. Underlying free cash is net operating cash flows before tax paid, less cash rent paid, adjusted for significant items (before tax) which relate to the reported financial
year however, because of timing, either occurred in the preceding financial year or will occur in the subsequent financial year.
DIRECTORS’ REPORT
DIVIDENDS PAID AND DECLARED
Dividends totalling $24.60 million have been paid or declared by the Company in relation to the financial year ended 30 June
2024 (2023: $21.30 million). Information relating to dividends in respect of the prior and current financial year, including dividends
paid or declared by the Company since the end of the previous year, is set out in the following table.
DIVIDEND
CENTS
PER
SHARE
TOTAL
AMOUNT
$’000
DATE OF
PAYMENT
FRANKED
%
TAX RATE FOR
FRANKING
CREDIT
In respect of the previous financial
year: 2023
Interim Ordinary shares
10.00
9,682
5 April 2023
0%
30%
Final Ordinary shares
12.00
11,618
5 October 2023
20%
30%
In respect of the current financial
year: 2024
Interim Ordinary shares
12.00
11,810
4 April 2024
20%
30%
Final Ordinary shares
13.00
12,795
2 October 2024
20%
30%
REVIEW OF OPERATIONS
Revenue and other income from ordinary activities for the twelve months ended 30 June 2024 was $317.01 million, up 7% from
the twelve months ended 30 June 2023. In constant currency terms, mature revenue increased by 8% compared to the 2023
year.
Net profit before tax for the twelve months to 30 June 2024 was $42.95 million, up 153% from $16.99 million in the prior year,
which included one-off expenses totalling $21.42 million.
Underlying net profit before tax was $56.65 million, up 18% compared to the 2023 year, calculated before operating losses from
new floors pre-maturity and closed floors post-closure of $5.52 million and impairment losses, closure costs and other non-
recurring costs of $8.18 million (2023(i): $47.82 million before operating losses from new floors pre-maturity and closed floors
post-closure of $9.39 million, and impairment losses, closure costs and other non-recurring costs of $21.44 million).
Net profit after tax for the twelve months to 30 June 2024 was $39.04 million, up from $11.07 million in the prior year.
Cash and investment balances (unencumbered) were $115.05 million at 30 June 2024 (30 June 2023: $115.65 million).
Return on funds employed was 68% in the 2024 financial year, up from 62% in the 2023 financial year.
The business generated strong net operating cash flows during the 2024 financial year of $165.79 million, up 7% compared to
the 2023 financial year (2023: $155.53 million). The underlying free cash generated during the 2024 financial year was up 18%
to $72.50 million, after adding back tax paid of $10.51 million and deducting cash rent adjustments of $6.20 million and lease
liability payments of $101.40 million, and adding other timing differences of $3.80 million (2023: underlying free cash generated
$61.67 million, after adding back tax paid of $2.06 million and deducting cash rent adjustments of $1.62 million and lease liability
payments of $98.01 million, and adding other timing differences of $3.70 million).
The 2024 financial year marked a year of significant progress, with Servcorp delivering record underlying NPBIT and achieving
substantial improvements across a majority of performance indicators, particularly in revenue growth from sustainable income
sources. Most countries experienced positive progress year on year.
The global migration to the new Smart Office® Digital Ecosystem was completed in December 2023. The new platform enhances
operating capabilities and provides instant updates on revenue generation.
The Middle East reorganisation has been completed to establish the Servcorp Middle East Group. All other work streams are
progressing on schedule for a potential listing in 2025.
The success achieved in the 2024 financial year sets a solid foundation for Servcorp to achieve long-term sustainable growth.
Notes:
i. Underlying results for the 2023 financial year comparisons, as stated in the Review of operations and in the region reports on the following pages, have been restated to
remove the impact of mature floors in 2023 that were closed in the 2024 financial year; to include immature floors in 2023 that have become mature in 2024; and remove
one-off income.
SERVCORP FOOTPRINT
Organic expansion continues to extend Servcorp’s footprint. In the 2024 financial year, net capacity increased by 176 offices.
During the year, eight floors opened in six new locations and six floors were closed. In addition, Servcorp commenced ownership
of the two Canberra floors.
As at 30 June 2024, Servcorp operated 132 floors in 40 cities across 20 countries.
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
36
37
DIRECTORS’ REPORT
AUSTRALIA, NEW ZEALAND AND SOUTHEAST ASIA (ANZ/ SEA)
Australia, New Zealand and South East Asia continues to strengthen its market position.
Mature revenue is up $8.2 million or 13.0% year-on-year, with enhanced management focus on improving occupancy and service
conversion. Approximately half of the revenue increase was successfully translated into the profit line. The Margin in the 2024
financial year was 24% (2023: 20%).
NORTH ASIA
North Asia overall maintained solid results. Revenue declined as a result of ongoing challenges in Greater China, coupled with a
decade-weak Japanese Yen (JPY).
A further $2.2 million impairment was recognised for China in the 2024 financial year.
$62.7
$70.9
$12.7
$16.7
$17.9
$21.4
$0.0
$20.0
$40.0
$60.0
$80.0
FY23
FY24
$'m
Mature: Revenue, Segment Profit & Cash Earnings
Revenue
Segment Profit
Cash Earnings
$94.5
$85.4
$15.9
$12.7
$20.5
$16.6
$0.0
$25.0
$50.0
$75.0
$100.0
FY23
FY24
$'m
Mature: Revenue, Segment Profit & Cash Earnings
Revenue
Segment Profit
Cash Earnings
DIRECTORS’ REPORT
EUROPE AND THE MIDDLE EAST (EME)
Mature revenue was up by $25.3 million on the 2023 financial year.
In the 2024 financial year, two new operations were added to the portfolio, with another two opened in July 2024.
Segment Profit and Cash Earnings for the region were up $11.5 million and $11.4 million, respectively, on the 2023 financial year.
The Margin for the 2024 financial year was 24% (2023: 18%).
USA
The segment loss for the 2024 financial year was $1.3 million. The segment remained cash breakeven in the 2024 financial year.
The Margin for the 2024 financial year was -7% (2023: 0%).
$17.7
$18.9
($0.1)
($1.3)
$0.1
$0.0
($2.0)
$3.0
$8.0
$13.0
$18.0
$23.0
FY23
FY24
$'m
Mature: Revenue, Segment Profit & Cash Earnings
Revenue
Segment Profit
Cash Earnings
$94.5
$119.8
$16.8
$28.3
$23.2
$34.6
$0.0
$25.0
$50.0
$75.0
$100.0
$125.0
FY23
FY24
$'m
Mature: Revenue, Segment Profit & Cash Earnings
Revenue
Segment Profit
Cash Earnings
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
38
39
DIRECTORS’ REPORT
EVENTS SUBSEQUENT TO BALANCE DATE
Dividend
On 22 August 2024, the Directors declared a final dividend of 13.00 cents per share, franked at 20%, payable on 2 October 2024.
The financial effect of the above transaction has not been brought to account in the financial statements for the year ended 30
June 2024.
The Directors are not aware of any matter or circumstance, other than that referred to above or in the financial statements or
notes thereto, that has arisen since the end of the year that has significantly affected, or may significantly affect, the operations
of the Consolidated Entity, the results of those operations, or the state of affairs of the Consolidated Entity, in future financial
years.
LIKELY DEVELOPMENTS
The Consolidated Entity will continue to pursue its policy of seeking to increase the profitability and market share of its major
business sectors during the next financial year.
The Middle East reorganisation has been completed to establish the Servcorp Middle East Group. All other work streams are
progressing on schedule for a potential listing in 2025. A final decision is expected to be made early 2025 calendar year.
ENVIRONMENTAL MANAGEMENT
The Consolidated Entity’s operations are not subject to any particular and significant environmental regulation under a law of the
Commonwealth or of a State or Territory.
ROUNDING OFF
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/ Directors' Reports) Instrument 2016/191 dated
24 March 2016 and, in accordance with that Instrument, amounts in the Financial Report and the Directors’ Report have been
rounded off to the nearest thousand dollars, unless otherwise stated.
NON-AUDIT SERVICES
During the year KPMG, the Company’s auditor, has performed certain “non-audit services” in addition to their statutory duties.
The Board of Directors has considered the non-audit services provided during the year by the auditor and, in accordance with
written advice provided by resolution of the Audit and Risk Committee, is satisfied that the provision of those non-audit services,
during the year, by the auditor is compatible with the general standard of independence for auditors imposed by, and did not
compromise the auditor independence requirements of, the Corporations Act 2001 for the following reasons:
non-audit services were subject to the corporate governance procedures adopted by the Company and have been reviewed
by the Audit and Risk Committee; and
the non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES
110 Code of Ethics for Professional Accountants as they did not involve reviewing or auditing the auditor’s own work, acting
in a management or decision making capacity for the Company or jointly sharing risks and rewards.
Details of the amounts paid or payable to the auditor of the Company, KPMG and its related practices for audit and non-audit
services provided during the year are set out in Note 30 to the Consolidated financial report.
A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act 2001 is set out on page
53 and forms part of this report.
REMUNERATION REPORT
The Remuneration Report for the financial year ended 30 June 2024 is set out on pages 41 to 52 and forms part of this report.
Signed in accordance with a resolution of the Directors pursuant to section 298(2) of the Corporations Act 2001.
A G Moufarrige AO
Managing Director and CEO
Dated at Sydney this 22nd day of August 2024
REMUNERATION REPORT
CONTENTS
42
INTRODUCTION
Describes the scope of the Remuneration Report and the key management personnel (KMP) whose remuneration
details are disclosed.
43
REMUNERATION GOVERNANCE
Describes the role of the Board and the Remuneration Committee, and the use of remuneration consultants when
making remuneration decisions.
44
KEY MANAGEMENT PERSONNEL
Provides details of names, titles and any changes in key management personnel.
45
NON-EXECUTIVE DIRECTOR REMUNERATION
Provides details regarding the fees paid to non-executive Directors.
45
EXECUTIVE REMUNERATION
Outlines the principles applied to executive KMP remuneration decisions and the framework used to deliver the various
components of remuneration.
48
RELATIONSHIP BETWEEN CONSOLIDATED ENTITY PERFORMANCE AND REMUNERATION
Provides an explanation of the linkages between Company performance and remuneration.
50
EMPLOYMENT AGREEMENTS
Provides details regarding the contractual arrangements between Servcorp and the executives whose remuneration
details are disclosed.
50
EMPLOYEE SHARE SCHEME AND OTHER EQUITY INCENTIVE INFORMATION
Provides details regarding Servcorp’s employee equity plans including that information required by the Corporations
Act 2001 and applicable accounting standards.
51
NON-EXECUTIVE DIRECTOR REMUNERATION TABLE
Provides details of the nature and amount of each element of the remuneration of each non-executive Director
of Servcorp Limited for the year ended 30 June 2024.
52
EXECUTIVE KMP REMUNERATION TABLE
Provides details of the nature and amount of each element of the remuneration of each executive KMP of Servcorp
Limited for the year ended 30 June 2024.
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
40
41
REMUNERATION REPORT
INTRODUCTION
We are pleased to present Servcorp’s Remuneration report for the 2024 financial year.
Servcorp’s aim is to provide the finest workspace solutions to our customers by providing the best locations, facilities, technology
and people crucial to making businesses successful. Our operations span 20 countries, 40 cities and 108 locations globally, via
serviced offices, co-working, and virtual offerings. This global footprint provides leverage to exploit our brand, take advantage of
new market opportunities and diversify our risk. Notably, for the 2024 financial year offshore revenue represented more than 82%
of our total revenue. Skilled, experienced local management in each jurisdiction, supported by Servcorp’s market leading IT
platform and proprietary product offerings, are critical to our continued success, and with the increasingly competitive environment
for talent, we need to have an appropriate reward framework in place. We are highly aware that the markets in which we operate
are subject to changing economic factors, and often these may be counter cyclical to the Australian market. Therefore, it is the
Board’s view that our remuneration strategy should reflect both our vision as a global company and the diversity of our regional
businesses.
Over the past several years, the Company has been presented with unprecedented challenges. We have managed to navigate
through an intense competitive environment and a pandemic, the latter of which has caused tremendous change in how and
where people work. While sales, floor growth and profits weakened through that period we managed to cut costs, retain a
dedicated team, drive strong cash flow, and pay continued dividends for our shareholders. We have seen these efforts pay off in
subsequent periods as the environment has improved, and the Board acknowledges the hard work of the Servcorp Team.
In 2024, we have benefited from improved trends in many of our markets, and we believe we are well positioned to capitalise on
the evolution of flexible working. After a period of consolidation, we have returned to floor growth, and have seen continued like-
for-like improvement in both our office and virtual revenue. While we are still seeing the impacts of an inflationary environment
and uncertainty about the global economy, management has focused on controllable drivers of business performance and
achieved impressive results, outperforming global profit and cash flow targets, which were increased from 2023 despite sector
headwinds. We also had some standout regional performances, so we feel that the STIs earned are a fair reflection of the team’s
efforts and resulting outcomes for the Company.
The Board believes that shareholder experience has been aligned to profit growth and remuneration outcomes, with TSR for the
2024 financial year of 46%, and 35% for the 3-year period ended 30 June 2024.
The Board’s philosophy and approach to executive remuneration is to attract and retain team members with a fair yet challenging
compensation structure which rewards excellence at the regional level, properly incentivises those whose roles span multiple
geographies, and supports the growth aspirations of Servcorp as a global business. For Servcorp, we believe financial
performance is the key driver of shareholder value, so we have structured our framework to reflect both regional and global
contributions of our executives to group performance.
In July 2022, the Board appointed independent consultant Crichton & Associates to undertake a remuneration strategy review to
ensure we have a modern best practice framework for fiscal 2023 and beyond. The key outcomes of this review, as disclosed in
the 2022 and 2023 Remuneration reports, were to introduce an LTI performance rights plan to supplement our options program,
with both plans featuring extended (3-year) vesting criteria, the reassessment of our KMP structure, and the introduction of a
malus and clawback policy.
The goals of these changes are to ensure our competitiveness in the market, improve long-term alignment between remuneration,
business performance, and shareholder interests, and provide an additional long-term compensation mechanism.
In the 2024 financial year:
the Board did not introduce any new short term executive remuneration components;
in recognition of profit expectations, the Board increased the global gateway, target and out-perform net profit before
impairment and tax for the 2024 financial year, and has improved disclosure around these metrics;
the Board left non-executive Director base fees constant;
in November 2023, the Board issued Options to senior executives, including both executive KMP.
For the 2025 financial year, the initiatives will be assessed and, where suitable, implemented by the Board and communicated to
shareholders.
In summary, the Board believes Servcorp’s approach to non-executive Director and executive KMP remuneration is balanced,
fair and equitable and designed to achieve alignment of executive reward with shareholder expectations and value. We will
continue to assess our practices to ensure they support Servcorp’s strategy, our desired business outcomes, and our goal of
retaining and motivating our employees in an increasingly competitive environment for talent.
The Board is committed to ensuring our remuneration practices continue to evolve to support the interests of our shareholders.
We welcome feedback from shareholders and proxy advisors, and we thank you for your continued support of Servcorp.
This Remuneration Report sets out, in accordance with the relevant Corporations Act 2001 (Corporations Act) and accounting
standard requirements, the remuneration arrangements in place for KMP of Servcorp during the financial year ended 30 June
2024.
REMUNERATION GOVERNANCE
This section explains the role of the Board and the Remuneration Committee, and use of remuneration consultants when making
remuneration decisions in respect of non-executive Directors and executive KMP.
Role of the Board and the Remuneration Committee
The Board is responsible for Servcorp’s global remuneration strategy and policy. Consistent with this responsibility, the Board
has established the Remuneration Committee, which comprises solely non-executive Directors, all being independent.
The role of the Remuneration Committee is set out in its Charter, which is reviewed annually. In summary, the Remuneration
Committee’s role includes:
ensure that the appropriate procedures exist to assess the remuneration levels of the Chair, other non-executive Directors,
executive Directors, direct reports to the CEO, Board Committees and the Board as a whole;
ensure that Servcorp meets the requirements of ASX Corporate Governance Principles and Recommendations, and other
relevant guidelines;
ensure that Servcorp adopts, monitors and applies appropriate remuneration policies and procedures;
ensure that reporting disclosures related to remuneration meet the Board’s disclosure objectives and all relevant legal and
accounting standard requirements;
develop, maintain and monitor appropriate talent management programs including succession planning, recruitment,
development; and retention and termination policies and procedures for senior management; and
develop, maintain and monitor appropriate superannuation and other relevant pension benefit arrangements for Servcorp
as required by law.
Further information on the Remuneration Committee’s role, responsibilities and membership are contained in the Corporate
Governance section on page 31.
Use of remuneration consultants
During the 2024 financial year, a remuneration consultancy contract was entered into by Servcorp with respect to the grant and
valuation of Options.
During the 2023 financial year, a remuneration consultancy contract was entered into by Servcorp with respect to drafting a new
Employee Incentive Plan, and the grant and valuation of Performance Rights and Options.
ADVISOR / CONSULTANT
SERVICES PROVIDED
REMUNERATION
CONSULTANT
FOR THE PURPOSE OF THE
CORPORATIONS ACT
Ian Crichton, Remuneration Consultant
Crichton & Associates Pty Ltd
2024
Valuations of Options offers.
2023
Remuneration strategy review.
Overview of Servcorp’s existing short term and
long term incentive programs.
Provision of new Employee Incentive Plan rules,
and supporting documentation.
No
No
Key questions regarding use of remuneration consultants
QUESTION
ANSWER
Did the remuneration consultant provide remuneration
recommendations in relation to any of the executive
KMP for the 2024 or 2023 financial year?
No.
How much was the remuneration consultant paid by
Servcorp for remuneration related and other services?
Remuneration services: Crichton & Associates Pty Ltd $8,728 (2023: $30,860);
Other services: Nil (2023: Nil).
What arrangements did Servcorp make to ensure that
the making of the remuneration recommendations
would be free from undue influence by the executive
KMP?
Servcorp maintains a protocol which governs the procedure for procuring advice
relating to KMP remuneration. The protocol includes a process for the engagement
of the remuneration consultant, the provision of information to the remuneration
consultant and the communication of remuneration recommendations.
Is the Board satisfied that the remuneration information
provided was free from any such undue influence?
Yes, the Board is satisfied.
What are the reasons for the Board being so satisfied?
The Chairman of the Remuneration Committee had oversight of all requests for
remuneration information, and the protocol with respect to the procurement of
remuneration related advice remains in place.
REMUNERATION REPORT
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
42
43
REMUNERATION REPORT
KEY MANAGEMENT PERSONNEL
Key management personnel have authority and responsibility for planning, directing and controlling the activities of Servcorp and
comprise the non-executive Directors, and executive KMP (being the Executive Director and other senior executives named in
this report).
Details of the KMP during the year are provided in the following table.
NAME
TITLE
CHANGE IN 2024
Non-executive Directors
The Hon. Mark Vaile
Chairman
Member, Audit & Risk Committee
Member, Remuneration Committee
Chair, Nomination Committee
Full year | No change
Wallis Graham
Director
Member, Audit & Risk Committee
Chair, Remuneration Committee
Member, Nomination Committee
Full year | No change
Tony McGrath
Director
Chair, Audit & Risk Committee
Member, Remuneration Committee
Member, Nomination Committee
Full year | No change
Executive Director
Alf Moufarrige
Chief Executive Officer
Full year | No change
Other Group-level executive
David Hunt
Chief Financial Officer & Head of South East Asia
Full year | No change
NON-EXECUTIVE DIRECTOR REMUNERATION
Fees and payments to non-executive Directors reflect the demands which are made on, and the responsibilities of, the Directors.
Non-executive Directors’ fees and payments are reviewed by the Board. The Board ensures non-executive Directors’ fees and
payments are appropriate and in line with the market. Non-executive Directors are not employed under a contract and do not
receive share options or other equity-based remuneration.
Directors’ fees
Non-executive Directors’ fees are determined by the Board within an aggregate Directors’ fees limit approved by shareholders.
The fees limit currently stands at $500,000 per annum inclusive of payments for superannuation. This limit was approved at the
2011 annual general meeting.
The most recent review of Directors’ fees was effective 1 July 2013. Effective 1 July 2013, non-executive Directors’ fees were set
as:
Chair - $175,000 per annum including superannuation;
Non-executive - $100,000 per annum including superannuation;
Chair of the Audit and Risk Committee - an additional $10,000 per annum including superannuation.
From 1 July 2021, the Superannuation Guarantee rate is scheduled to increase progressively, from 9.5% to 12.0%. To comply
with the legislation, and allow these increases to be provided to the Directors, effective 1 July 2021, the non-executive Directors’
base fees have been held at the same rates, with superannuation increasing in line with these progressive increases. For the
2024 financial year fees were as follows:
Chair - $159,818 per annum plus superannuation, for a total of $177,398;
Non-executive - $91,325 per annum plus superannuation, for a total of $101,371;
Chair of the Audit and Risk Committee - an additional $9,132 per annum plus superannuation, for a total of $10,136.
The increased Superannuation Guarantee amount was a total of $1,758 for all non-executive Directors (2023: $1,757).
For the 2025 financial year, the Board have resolved to keep non-executive Director base fees constant.
Additional fees are not paid for membership of Board committees other than as referred to in the previous paragraph.
Retirement allowances for Directors
Non-executive Directors are not entitled to retirement allowances.
Details of remuneration
Details of the nature and amount of each element of the remuneration of each non-executive Director of Servcorp Limited for the
year ended 30 June 2024 are set out in the table on page 51.
Minimum shareholding requirement
Servcorp does not have a minimum shareholding requirement for non-executive Directors. It is noted, however, that all non-
executive Directors are shareholders of the Company.
EXECUTIVE REMUNERATION
Remuneration philosophy and principles
The Board recognises that the Consolidated Entity’s performance is dependent on the quality and contribution of its team
members, particularly the executive KMP and regional executives. To achieve its financial and operating objectives, Servcorp
must be able to attract, retain and motivate appropriately qualified and skilled executives at the regional and global level.
The objective of the executive reward framework is to ensure reward for performance is competitive and appropriate for the
results delivered. The framework aligns executive reward with achievement of Servcorp’s strategic objectives particularly its short,
medium and long term earnings; being operating profits at a regional level; and consolidated mature net profit before impairments
and tax and EPS at a global level. The Board believes that earnings are the metric which best corresponds to value creation for
the Company and its shareholders in both the short and longer term, but will continue to assess the merits of using other
performance indicators in our remuneration framework in the future.
Executive remuneration is a balanced mix of fixed and incentive (‘at risk’) remuneration. In determining the appropriate balance,
regular reviews are undertaken that involve cross-referencing position descriptions to reliable accessible remuneration data in
the markets in which Servcorp operates.
Servcorp’s executive remuneration policy and principles are designed to ensure that the Consolidated Entity:
provides competitive rewards that attract, retain and motivate our key executives;
encourages loyalty and commitment to Servcorp;
builds a structure for growth and includes appropriate succession planning;
structures remuneration at a level that reflects the executive’s duties and accountabilities and is competitive in the markets
in which it operates;
complies with applicable legal requirements and appropriate standards of governance.
The Company’s remuneration framework is reviewed annually, and the Board is committed to engaging with shareholders,
consultants and proxy advisors as required to ensure proper evolution of its remuneration strategy.
REMUNERATION REPORT
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
44
45
REMUNERATION REPORT
Remuneration structure and elements
The executive KMP remuneration and reward framework at Servcorp consisted of three components:
fixed remuneration;
short term incentives; and
long term incentives.
The combination of these comprises the executive KMP total remuneration opportunity.
The CEO’s total target remuneration opportunity, in respect of the 2024 financial year, consisted of 66% fixed and 34% variable
pay. The CEO did not participate in the STI plan for the 2024 financial year. He was given an LTI (Options) grant in the 2024
financial year, representing 52% of his fixed remuneration, which was approved by shareholders at the 2023 annual general
meeting.
The CFO’s total target remuneration opportunity, in respect of the 2024 financial year, consisted of 84% fixed and 16% variable
pay. Target variable opportunity (STI + LTI) as a percentage of fixed pay was 19%, and at out-perform levels of global financial
performance was 29%.
Fixed remuneration
Fixed remuneration is reviewed each year and adjusted to changes in job role, promotion, market practice, internal relativities
and performance.
Remuneration for the 2024 financial year and changes from 2023 are set out in the tables on page 52.
The base salary of the CEO remained constant.
For the 2024 financial year, the base salary of the CFO increased, as set out in his employment agreement. This reflects tenure
in the business and increased responsibilities over time.
Short term incentives
Short term incentives (STI) are awarded, in cash, based on achievement against targets set at the beginning of each financial
year. The basis of the STI scheme was established for the 2014 financial year and has been applied consistently in subsequent
financial years. Alf Moufarrige, the CEO, founder and major shareholder, has elected not to participate in the STI scheme.
Under the STI scheme, an STI dollar value is set for senior executives, which represents the target STI that can be awarded for
achieving target for the relevant year. The total target STI opportunity for executive KMP for the 2024 financial year was $54,000
and the out-perform STI was $108,000. The target STI opportunity as a percentage of associated fixed remuneration was 9.9%.
STI targets are set in advance each year and are challenging. The STI targets for the 2024 financial year were determined based
on a matrix of Consolidated Entity mature net profit before impairments and tax (global STI target) and region mature operating
profit (region STI target), where appropriate based on regional responsibilities. To ensure STI targets remained challenging, the
global STI target, in the 2024 financial year, was set above 2023 financial year results, and the sum of region STI targets was set
above the global STI target. Region STI is only paid if the region STI target is met; there is no gateway.
A gateway consolidated mature net profit before impairment and tax is set each year, and must be achieved before any global
STI payout is made. It is intended that a similar approach to STI will be applied for the 2025 financial year. Despite potential
recessionary pressures, the gateway consolidated net profit before impairment and tax increased for the 2024 financial year. The
gateway has been further increased for the 2025 financial year in anticipation of continued improvement in results, balanced by
economic uncertainty and global political events, as provided in the following table.
FINANCIAL YEAR
ENDING 30 JUNE
2023
ACTUAL
2024
GATEWAY
2024
TARGET
2024
OUT-
PERFORM
2024
ACTUAL
2025
GATEWAY
2025
TARGET
2025
OUT-
PERFORM
Consolidated mature net
profit before impairments
and tax ($ million)
42.3
44.0
47.0
50.0
56.6
57.0
61.0
65.0
Global STI is calculated as follows:
if consolidated mature net profit before impairment and tax meets the global gateway - 50% of the global STI target
opportunity;
if consolidated mature net profit before impairment and tax meets the global target - 100% of the global STI target
opportunity;
if consolidated mature net profit before impairment and tax falls between the global gateway and target - the global STI paid
is calculated as a percentage between 50% and 100% of global STI target opportunity on an incremental basis, in the same
proportion as the net profit before tax is to gateway and target.
There are also additional STI opportunities to provide incentive for executive KMP to out-perform these targets:
if the global target is exceeded by more than a set amount, representing out-perform profit levels, executive KMP receive
double their global STI target opportunity. In the 2024 financial year, this metric was set at $3 million, representing a global
outperform consolidated mature net profit before impairments and tax of $50 million. This out-perform metric was achieved
in 2024, so these payments were made;
executive KMP with a region target receive an extra $50,000 for each $2 million by which they out-perform their region
mature operating profit target. In addition, the Board has discretion to reward executive KMP who achieve 'super out-
perform' region results with additional STI payments. There were no executive KMP on regional targets in the 2024 financial
year.
Long term equity incentives
Servcorp Employee Incentive Plan (SEIP)
In August 2022, the Board approved a new Servcorp Employee Incentive Plan (SEIP) with the purpose of encouraging executives
and other team members to share in the ownership of the Company and to promote the long-term success of the Consolidated
Entity as a shared goal.
this program is designed to improve executive alignment with our long-term goals, and ensure we evolve with market
practice by introducing a 3-year testing horizon;
the SEIP provides for various types of awards, including Options and Performance Rights;
Options were granted to executive KMP during the 2024 financial year and Performance Rights were granted to executive
KMP during the 2023 financial year, with vesting based on service and a 3-year cumulative EPS measure. The targets are
intended to be rigorous yet achievable in the event of strong group performance;
a summary of the terms of the Performance Rights and Options currently on issue to KMP under the SEIP are detailed in
the following table.
Performance Rights and Options currently on issue to executive KMP under the SEIP:
ASX code
SRVAE (Performance Rights)
SRVAG (Options)
SRVAH (Options)
Grant date
1 December 2022
6 November 2023
7 December 2023
Issue date
19 December 2022
14 November 2023
7 December 2023
Exercise price
$0.00
$3.00
$3.35
Vesting
conditions
3-year cumulative EPS performance
target, representing 10% pa growth
between the 2022 and 2025 financial
years
Threshold
performance
for
50%
vesting, representing 5% pa growth
between the 2022 and 2025 financial
years, with pro- rata vesting between
threshold and target
Continuous service until 1 September
2025
3-year cumulative EPS performance
target, representing 10% pa growth
between the 2023 and 2026 financial
years
Threshold
performance
for
50%
vesting, representing 5% pa growth
between the 2023 and 2026 financial
years, with pro- rata vesting between
threshold and target
Continuous service until 1 September
2026
3-year cumulative EPS performance
target, representing 10% pa growth
between the 2023 and 2026 financial
years
Threshold
performance
for
50%
vesting, representing 5% pa growth
between the 2023 and 2026 financial
years, with pro- rata vesting between
threshold and target
Continuous service until 1 September
2026
Vesting date
1 September 2025
1 September 2026
1 September 2026
Exercise
period
30 days from vesting date to expiry
date
2 years from vesting date to expiry
date
2 years from vesting date to expiry
date
Expiry date
30 September 2025
1 September 2028
1 September 2028
Option value
$2.7982
$0.3192
$0.2450
Status
Not vested
Not Vested
Not Vested
REMUNERATION REPORT
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
46
47
REMUNERATION REPORT
Servcorp Executive Share Option Scheme (ESOS)
In 2016 the Board updated the Servcorp Limited Executive Share Option Scheme (ESOS). From time to time, the Board granted
Options to senior executives to encourage and reward superior long term performance. These options were granted subject to
vesting criteria based on 3-year service and 2-year EPS growth.
Options were granted to executive KMP during the 2021 and 2022 financial years;
a summary of the terms of the Options currently on issue under the ESOS are detailed in the table below.
Options currently on issue to executive KMP under the ESOS:
ASX code
SRVAB
SRVAB
SRVAD
Grant date
27 August 2020
27 August 2020
11 May 2022
Issue date
18 September 2020
4 November 2020
19 May 2022
Exercise price
$2.48 per Option
$2.48 per Option
$3.54 per Option
Vesting conditions
EPS performance hurdle of 15%
pa cumulative growth between
the 2020 and 2022 financial
years
Continuous service until 18
September 2023
EPS performance hurdle of 15%
pa cumulative growth between
the 2020 and 2022 financial
years
Continuous service until 18
September 2023
EPS performance hurdle of 15%
pa cumulative growth between
the 2022 and 2024 financial
years
Continuous service until 19 May
2025
Vesting date
18 September 2023
18 September 2023
19 May 2025
Exercise period
Two years from vesting date to
expiry date
Two years from vesting date to
expiry date
Two years from vesting date to
expiry date
Expiry date
18 September 2025
18 September 2025
19 May 2027
Option value
$0.5825
$0.5368
$0.5145
Status
Vested (i) Exercisable (i)
Vested (i) Exercised (ii)
Not vested
i. Effective 25 August 2022, the Options issued on 18 September 2020 and 4 November 2020 vested, as the EPS Performance of the Company met the applicable
Vesting Percentage. Continuous service was met on 18 September 2023, and the Options became exercisable.
ii. The Options issued on 4 November 2020 were exercised in full on 7 November 2023 and 1,500,000 Ordinary shares of the Company were issued.
RELATIONSHIP BETWEEN CONSOLIDATED ENTITY PERFORMANCE, EXECUTIVE KMP REMUNERATION AND
SHAREHOLDER WEALTH
The relationship between Consolidated Entity performance and executive KMP remuneration is important to ensure that there is
a clear and appropriate correlation and alignment of interests between shareholders and executive KMP.
Key financial indicators
Servcorp’s principal activities and financial performance are explained in detail in the Review of Operations section of the
Directors' Report on pages 36 to 39.
A summary of Servcorp’s financial performance over the last five years is provided in the following table.
FINANCIAL YEAR ENDED 30 JUNE
MEASURE
2020
2021
2022
2023
2024
Total revenue ($million)
352
276
276
296
317
Net profit before tax ($million)
15.6
30.6
34.4
17.0
42.9
Net profit after tax ($million)
6.9
23.5
28.0
11.1
39.0
Basic earnings per share (cents)
7.2
24.3
28.9
11.4
39.9
Dividend per share (cents)
20.0
18.0
20.0
22.0
25.0
Share price as at 30 June ($)
$2.32
$3.50
$3.30
$3.00
$4.09
Offices
5,039
5,141
5,162
5,150
5,326
Number of locations
112
111
107
106
108
The first three quarters of the 2020 financial year had continued from the strong profit in the second half of the 2019 financial
year. The Company’s strong performance was evident across all key metrics, including occupancy, operating margins, net profit
after tax, and free cash, with record revenues recorded, despite a very challenging competitive environment. COVID-19 impacted
on trading conditions in the last quarter, however the Company still recorded a solid underlying performance; revenue and other
income was up 5%, underlying net profit before tax was up 17% and underlying free cash was up 3%.
The 2021 and 2022 financial years saw challenging COVID-19 trading conditions and a difficult global economic environment. In
particular, there was downward price pressure across our global footprint, affecting revenue. We also experienced notable
variation in performance across regions, as the severity of lockdowns and other restrictions differed across geographies. An
improving environment, disciplined cost management and minimal impact from non-underlying items saw net profit after tax, and
associated earnings per share (EPS), return to higher levels, with EPS up 237% in 2021, and 19% in 2022. In the 2023 financial
year, consolidated mature net profit before impairments and tax increased 36%, meeting the market guidance and representing
a significant uplift from the prior year.
In the 2024 financial year, the trajectory of improvement continued, with consolidated net profit before tax increasing 153% on
the prior year, our best result since 2017.
Through all years, cash flows have remained strong, allowing interim and final dividends to continue to be paid to our shareholders.
Dividends have increased each year since 2021, and in total, Servcorp returned $23.4 million to shareholders via dividends in
the 2024 financial year. In total, the Company has returned $98.9 million to shareholders over the last 5 years, representing $1.02
per share, in dividends.
Servcorp’s share price has varied considerably over the last several years. It closed at $2.32 on 30 June 2020, predominately
due to the effects of COVID. Since that time, it has traded in the low $3.00 range. The continuing underlying performance, and
associated upgraded market guidance, has led to a steady increase in the 2024 financial year, with Servcorp’s share price closing
at $4.09 at 30 June 2024.
Over the three year period from 1 July 2021 to 30 June 2024 Servcorp’s total shareholder return (TSR) was 35.0%.
Servcorp is in a financially sound position and we are confident that we will continue to achieve higher profit levels which, when
combined with healthy dividends, will contribute to a satisfactory total shareholder return (TSR) performance over the coming
years.
In the 2024 financial year, consolidated mature net profit before impairments and tax came in above global “out-perform” levels,
and accordingly the out-perform global STI opportunity was paid.
The STI paid out to executive KMP represents 200% of the target opportunity, and 100% of the out-perform opportunity. KMP
target STI opportunity forfeited was 0%. The individual 'at risk' rewards paid in the 2024 financial year to executive KMP and the
percentage of their target opportunity is provided in the following table.
EXECUTIVE KMP
REGION
STI
AWARDED
% OF
TARGET
OPPORTUNITY
OPTIONS
AWARDED
NO.
FAIR VALUE OF
OPTIONS
AWARDED
Alf Moufarrige
Head Office
N/A
N/A
1,000,000
$245,000
David Hunt
Head Office & SEA
$108,000
200%
150,000
$47,880
Servcorp has a very strong culture focusing on sales and generation of shareholder wealth. Our executive KMP and regional
executives include a balance of long-serving team members together with new executive talent, who reflect Servcorp’s investment
in the future. All executives are aware of the need to perform. Each executive is involved in the target setting for the business
and accepts the challenging targets set.
If our forward net profit before tax targets are met, then shareholders, in the opinion of the Board, will be satisfied with the
Consolidated Entity’s performance and executives will receive their target remuneration opportunity.
If executives fail to meet their targets, the 'at risk' component of executive KMP and regional executive remuneration will be
heavily discounted, or in certain circumstances, not be awarded. In this way the alignment of Consolidated Entity performance
and executive KMP and regional executive remuneration will be in direct correlation and be unambiguous. The Board also
considers shareholder experience when assessing alignment, and reserves the right to exercise discretion to avoid unintended
remuneration outcomes.
REMUNERATION REPORT
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
48
49
REMUNERATION REPORT
EMPLOYMENT AGREEMENTS
There are no fixed term employment agreements in place for any executive KMP.
Termination benefits
There are no termination of employment agreements in place for executive KMP. Any termination benefit paid to executive KMP
would be limited to 12 months remuneration as required by law and in most cases would be determined based on statutory
minimum requirements, years of service and the nature of the termination.
Malus and Clawback
Servcorp introduced a Malus and Clawback Policy in August 2022.
The Policy applies for current executive KMP, to unvested Short Term Incentive and Long Term Incentive awards. The Policy is
designed to be preventative rather than a purely remedial or punitive measure. Under the Policy, the Board may take action to
adjust downwards (malus) or recover (clawback) unvested ‘at risk’ remuneration, where there is reasonable evidence that an
executive KMP has materially contributed to, or been materially responsible for, the need for the restatement of financial results
for defined reasons. Any application of the policy will be disclosed to shareholders.
The Malus and Clawback Policy is available on Servcorp’s website; servcorp.com.au
Minimum shareholding requirements
Servcorp does not have a minimum shareholding requirement for executive KMP.
EMPLOYEE SHARE SCHEME AND OTHER EQUITY INCENTIVE INFORMATION
As mentioned previously in this report, the Board introduced the Servcorp Employee Incentive Plan (SEIP) in August 2022, with
the purpose of encouraging executives and other team members to share in the ownership of the Company and to promote the
long-term success of the Consolidated Entity as a shared goal. The SEIP provides for various types of awards, including Options
and Performance Rights.
In prior years, this was achieved by issuing Options under the Servcorp Limited Executive Share Option Scheme (ESOS).
In the 2024 financial year, the Board granted 1,675,000 Options under the SEIP including 150,000 to the CFO, an executive KMP.
In addition, 1,000,000 options were granted to the CEO, an executive KMP.
In the 2023 financial year, the Board granted 160,000 Performance Rights and 1,000,002 Options under the SEIP to senior
executives, including 40,000 Performance Rights to the CFO, an executive KMP.
Details of the Performance Rights and Options granted, on issue and lapsed are provided in the Directors' Report on page 35.
Details of the Performance Rights and Options granted to each key management personnel are provided in the following table.
Other than the Performance Rights and Options issued as detailed below, at the date of this report there are no shares, rights,
options or other equity incentives held by executive KMP and subject to vesting restrictions.
ALF MOUFARRIGE
DAVID HUNT
OPTIONS
OPTIONS
OPTIONS
PERFORMANCE
RIGHTS
OPTIONS
ASX code
SRVAB
SRVAH
SRVAD
SRVAE
SRVAG
Grant Year
2021
2024
2022
2023
2024
Held 1 July 2023
No.
1,500,000
-
100,000
40,000
-
Granted
No.
-
1,000,000
-
-
150,000
Fair Value of Grant
$
-
$245,000
-
-
$47,880
Lapsed/ Expired
No.
-
-
-
-
-
Exercised
No.
1,500,000i
-
-
-
-
Value at Exercise
$
$896,250
-
-
-
-
Held 30 June 2024
No.
-
1,000,000
100,000
40,000
150,000
Vested
No.
-
-
-
-
-
Exercisable
No.
-
-
-
-
-
Notes:
i. In November 2023, the Company issued 1,500,000 ordinary shares as a result of the exercise of 1,500,000 options, at an exercise price of $2.48 per option.
KEY MANAGEMENT PERSONNEL EQUITY HOLDINGS AND MOVEMENTS
The number of Ordinary shares held by each key management personnel in the share capital of the Company, and the movement
on those holdings during the financial year, is set out in the following table.
KMP
TOTAL HELD
AT 1 JULY
2023
GRANTED
DURING THE
YEAR
EXERCISED
OPTIONS
PURCHASED
DURING THE
YEAR
DISPOSED
DURING THE
YEAR
TOTAL HELD
AT 30 JUNE
2024
HELD
DIRECTLY
AT 30 JUNE
2024
HELD
INDIRECTLY
AT 30 JUNE
2024(i)
M Vaile
35,050
-
-
-
-
35,050
-
35,050
W Graham
14,000
-
-
-
-
14,000
14,000
-
T McGrath
66,853
-
-
-
-
66,853
-
66,853
A Moufarrige
50,486,283
-
1,500,000
36,868
-
52,023,151
547,436
51,475,715
D Hunt
20,000
-
-
-
-
20,000
10,000
10,000
Notes:
i. Shares held indirectly are included in the “total held at 30 June 2024” column. Total shares are held directly by the KMP and indirectly by the KMP’s related parties,
inclusive of spouse, dependents, and entities controlled or significantly influenced by the KMP.
NON-EXECUTIVE DIRECTOR REMUNERATION
Amount in AUD
Short term
benefits
Post-
employment
benefits
Total
Name & title
Year
Fees
Superannuation
benefits (i)
(ii)(iii)
M Vaile
2024
159,818
17,580
177,398
Non-Executive Director
2023
159,818
16,781
176,599
W Graham
2024
91,325
10,046
101,371
Non-Executive Director
2023
91,325
9,589
100,914
T McGrath
2024
100,457
11,050
111,507
Non-Executive Director
2023
100,457
10,548
111,005
Aggregate
2024
351,600
38,676
390,276
2023
351,600
36,918
388,518
Notes:
i. Superannuation benefits have increased due to an increase in the Superannuation Guarantee rate from 10.5% to 11%, effective 1 July 2023.
ii. Directors’ and officers’ indemnity insurance has not been included in the above figures since it is impractical to determine an appropriate allocation basis.
iii. Non-executive Directors do not participate in any short term or long term incentive schemes.
REMUNERATION REPORT
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
50
51
REMUNERATION REPORT
KEY MANAGEMENT PERSONNEL REMUNERATION
Amount in AUD
Short term benefits
Post-
employment
Other
long
term
benefits
Term-
ination
benefits
Share
based
payments
Total
% of
performance
related
remuneration
Name & title
Year
Salary
Cash
STI
(i,ii)
Non-
monetary
benefits
Other
short term
benefits
Super-
annuation
benefits
Long
service
leave
Rights &
Options
(iii)
A G Moufarrige (iv)
2024
412,560
-
26,791
-
33,000
-
-
77,546
549,897
16.4%
CEO
2023
425,104
-
25,576
-
31,500
-
-
210,328
692,508
43.6%
D Hunt (v)
2024
475,000
108,000
18,121
-
52,250
-
-
14,975
668,346
12.6%
CFO &
Head of SEA
2023
450,000
54,000
14,483
-
47,250
-
-
6,097
571,830
17.6%
Aggregate (vi)
2024
887,560
108,000
44,912
-
85,250
-
-
92,521
1,218,243
14.4%
2023
875,104
54,000
40,059
-
78,750
-
-
216,425
1,264,338
30.2%
Notes:
i. Amounts disclosed as short term cash STI in the 2024 year represent STI paid in August 2024 based on 2024 financial year global and region targets.
ii. Amounts disclosed as short term cash STI in the 2023 year represent STI paid in August 2023 based on 2023 financial year global and region targets.
iii. Amounts disclosed as share based payments relate to Performance Rights issued on 19 December 2022 and Options issued on 5 November 2020, 19 May 2022, 14
November 2023, or 7 December 2023. Details are set out on pages 47, 48 and 50 of this annual report.
iv. The salary of A G Moufarrige includes a component paid in Yen, and the amount disclosed above will vary based on the foreign currency exchange rates. Base salary
has been unchanged during the last two years. A G Moufarrige does not receive an STI and has waived his entitlement to annual leave and long service leave.
v. D Hunt commenced employment with Servcorp effective 19 April 2022 as CFO. His annual base salary increased in the 2024 financial year due to tenure with the
Company and increased responsibilities in the business.
vi. The Aggregate reflects the relevant KMP attributable to each financial year.
KEY MANAGEMENT PERSONNEL REMUNERATION
Amount in AUD
Short term incentive grants
Name & title
Year
STI paid
in cash
STI Accrued
and not yet due
STI
forfeited
Maximum
future value
of vested STI
%
of Target
%
%
of Target
$
A G Moufarrige
2024
-
-
-
-
CEO
2023
-
-
-
-
D Hunt
2024
200.0%
0.0%
0.0%
-
CFO & Head of SEA
2023
64.3%
0.0%
35.7%
-
Aggregate
2024
200%
0.0%
0.0%
-
2023
64.3%
0.0%
35.7%
-
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 Servcorp Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Servcorp 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
Paul Thomas
Partner
Sydney
22 August 2024
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
52
53
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Consolidated Financial Statements
Consolidated Statement of Profit or Loss and Other Comprehensive Income
56
Consolidated Statement of Financial Position
57
Consolidated Statement of Changes in Equity
58
Consolidated Statement of Cash Flows
59
Notes to the Consolidated Financial Statements
1
About this report
60
2
Operating segments
63
3
Revenue and other income
66
4
Expenses
67
5
Income tax expense
67
6
Earnings per share
68
7
Cash and cash equivalents
69
8
Trade and other receivables
69
9
Other financial assets
71
10
Tax assets and liabilities
71
11
Property, plant and equipment
74
12
Intangible asset
75
13
Right of use assets
76
14
Goodwill
78
15
Trade and other payables
16
Lease liabilities
80
17
Provisions
81
18
Commitments for expenditure
82
19
Contributed equity
82
20
Foreign currency translation reserve
82
21
22
Bank guarantees and contingent liabilities
Business combinations
23
Equity settled employee benefits reserve
83
24
Distributions
85
25
Capital structure and risks
86
26
Financial risk management
87
27
Fair value measurement of financial instruments
92
28
Organisational structure
93
29
Key management personnel remuneration
97
30
Auditors' remuneration
99
31
Contingencies
99
32
Events occurring after the reporting date
100
33
Parent entity
100
34
Reconciliation of profit to operating cash flow
101
Consolidated Entity Disclosure Statement
102
Directors' Declaration
106
Flexibility in
Every Step, Just
Like a Camel.
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
54
55
54
CONSOLIDATED STATEMENT OF PROFIT OR
LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
Revenue
3
314,106
292,473
Other revenue and income
3
2,907
3,073
Total revenue
317,013
295,546
Service expenses
(76,056)
(74,485)
Marketing expenses
(21,363)
(18,354)
Occupancy expenses
(38,132)
(38,189)
Administrative expenses
(27,847)
(22,318)
Amortisation of right of use asset
13
(95,200)
(101,943)
Finance costs attributable to lease liabilities
16
(13,986)
(11,221)
Net impairment of property, plant and equipment and right of use assets
13
(2,470)
(15,061)
Net foreign exchange gain (realised and unrealised)
1,004
1,804
Fair value gains on derivatives
(131)
1,292
Share of gains of joint ventures
783
556
Other losses
(668)
(634)
Total expenses
4
(274,066)
(278,553)
Profit before income tax expense
42,947
16,993
Income tax expense
5
(3,909)
(5,926)
Profit for the year
39,038
11,067
Other comprehensive income
Items that may be reclassified to profit or loss
Translation of foreign operations (items may be reclassified subsequent to profit or
loss)
(13,406)
(2,285)
Other comprehensive loss for the year (net of tax)
(13,406)
(2,285)
Total comprehensive income/(loss) for the year
25,632
8,782
Earnings per share
Cents
Cents
Basic EPS
6
39.9
11.4
Diluted EPS
6
39.8
11.4
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
AS AT 30 JUNE 2024
Note
2024
$ 000
2023
$ 000
Assets
Current assets
Cash and cash equivalents
7
103,300
105,364
Trade and other receivables
8
35,852
27,778
Other financial assets
9
13,543
13,458
Current tax receivable
10
9,515
5,506
Prepayments and other assets
5,180
6,893
Total current assets
167,390
158,999
Non-current assets
Other financial assets
9
36,682
37,808
Property, plant and equipment
11
89,616
80,358
Intangible assets
12
2,708
2,433
Right of use assets
13
316,490
305,311
Deferred tax assets
10
44,193
42,283
Goodwill
14
17,274
13,775
Total non-current assets
506,963
481,968
Total assets
674,353
640,967
Liabilities
Current liabilities
Trade and other payables
15
63,684
43,545
Other financial liabilities
30,502
27,160
Lease liabilities
16
94,364
106,037
Provisions
17
12,563
13,057
Total current liabilities
201,113
189,799
Non-current liabilities
Lease liabilities
16
276,834
261,808
Provisions
17
1,789
1,582
Total non-current liabilities
278,623
263,390
Total liabilities
479,736
453,189
Net assets
194,617
187,778
Equity
Contributed equity
19
155,567
151,594
Reserves
20, 23
(36,909)
(24,165)
Retained earnings
75,959
60,349
Total equity
194,617
187,778
The accompanying notes form part of these financial statements.
The accompanying notes form part of these financial statements.
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
56
57
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
Contributed
equity
$ 000
Share
buy back
reserve
$ 000
Foreign
currency
translation
reserve
$ 000
Employee
equity
settled
benefits
reserve
$ 000
Retained
earnings
$ 000
Total
$ 000
Balance at 1 July 2023
151,594
(4,733)
(20,370)
938
60,349
187,778
Profit for the year
-
-
-
-
39,038
39,038
Translation of foreign operations
(net of tax)
-
-
(13,406)
-
-
(13,406)
Total comprehensive income
for the year
-
-
(13,406)
-
39,038
25,632
Share-based payments
3,973
-
-
662
-
4,635
Payment of dividends
-
-
-
-
(23,428)
(23,428)
Balance at 30 June 2024
155,567
(4,733)
(33,776)
1,600
75,959
194,617
Contributed
equity
$ 000
Share
buy back
reserve
$ 000
Foreign
currency
translation
reserve
$ 000
Employee
equity
settled
benefits
reserve
$ 000
Retained
earnings
$ 000
Total
$ 000
Balance at 1 July 2022
151,594
(4,733)
(18,085)
832
68,646
198,254
Profit for the year
-
-
-
-
11,067
11,067
Translation of foreign operations
(net of tax)
-
-
(2,285)
-
-
(2,285)
Total comprehensive income
for the year
-
-
(2,285)
-
11,067
8,782
Share-based payments
-
-
-
106
-
106
Payment of dividends
-
-
-
-
(19,364)
(19,364)
Balance at 30 June 2023
151,594
(4,733)
(20,370)
938
60,349
187,778
The accompanying notes form part of these financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024
Note
2024
$ 000
2023
$ 000
Cash flows from operating activities
Receipts from customers
342,382
317,741
Payments to suppliers and employees
(154,804)
(151,983)
Franchise fees received
-
226
Interest and other items of similar nature received
2,706
2,830
Interest and other costs of finance paid
(13,986)
(11,221)
Tax paid
(10,507)
(2,062)
Net cash generated from operating activities
34
165,791
155,531
Cash flows from investing activities
Proceeds from sale of plant and equipment
3,914
744
Payments for property, plant and equipment
11
(34,882)
(19,404)
Payment for intangible assets
12
(1,403)
(1,185)
Payments for landlord lease deposits
(1,821)
(1,348)
Payments for variable rate bonds and listed ordinary shares
(1,585)
(3,739)
Proceeds from sale of variable rate bonds and listed ordinary shares
365
277
Payment for purchase of business, net of cash acquired
(3,277)
-
Net cash used in investing activities
(38,689)
(24,655)
Cash flows from financing activities
Proceeds from issue of equity securities of the parent
3,811
-
Repayment of lease liabilities relating to future occupancy years
16
(3,324)
(5,433)
Dividends paid
(23,428)
(19,364)
Repayment of lease liabilities relating to current year occupancy
16
(102,244)
(98,008)
Net cash used in financing activities
(125,185)
(122,805)
Effects of exchange rate changes on cash and cash equivalents
(3,981)
(3,473)
Net increase in cash and cash equivalents held
(2,064)
4,598
Cash and cash equivalents at beginning of financial year
105,364
100,766
Cash and cash equivalents at end of financial year
7
103,300
105,364
The accompanying notes form part of these financial statements.
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
58
59
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
1
About this report
1.1 Reporting entity
Servcorp Limited ("the Company") and the subsidiaries ("the Consolidated Entity") is a company limited by shares
incorporated and domiciled in Australia whose shares publicly traded on Australian Securities Exchange. The address of
the Consolidated Entity's registered office is Level 63, 25 Martin Place, Sydney NSW 2000. Servcorp Limited is a for-profit
entity, and the principal activities of the Consolidated Entity are the provision of a global network of the finest flexible
workspace solutions.
The financial report of the Consolidated Entity for the year ended 30 June 2024 was authorised for issue in accordance
with a resolution of the Directors on 22 August 2024.
1.2 Basis of preparation
The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of
the Corporations Act 2001 (Cth), Australian Accounting Standards (AAS) and other authoritative pronouncements of the
Australian Accounting Standards Board (AASB). The financial report also complies with International Financial Reporting
Standards (IFRS) issued by the International Accounting Standards Board (IASB) and interpretations of the International
Financial Reporting Interpretations Committe (IFRIC).
The Financial Report has been prepared on the basis of historical cost, except for financial instruments that are measured
at their fair value. Cost is based on the fair value of the consideration given in exchange for assets. All amounts are
presented in Australian dollars, unless otherwise noted. The Consolidated Financial Statements comprise the Financial
Statements of the Company and all its subsidiaries.
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors' Reports) Instrument 2016/191
dated 24 March 2016 and, in accordance with that Instrument, amounts in the Financial Report and the Directors' Report
have been rounded off to the nearest thousand dollars, unless otherwise stated.
1.3 Judgements and estimates
In the application of the accounting policies, management is required to make judgements, estimates and assumptions
about carrying values of assets and liabilities that are not readily apparent from other sources.
The estimates and associated assumptions are based on historical experience and various other factors that are believed
to be reasonable under the circumstances, the results of which form the basis of making the judgements. Actual results
may differ from these estimates.
These estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the year in which the estimate is revised if the revision affects only that year, or in the year of the revision
and future years if the revision affects both current and future years.
Impairment of ROU and leasehold improvements
Judgements
Information about judgements made in applying accounting policies that have the most significant effects on the amounts
recognised in the financial statements is included in the following notes:
-Note 13 Right of use assets: lease terms - whether the Consolidated Entity is reasonably certain to exercise extension
options.
-Note 11 Property, plant and equipment: usefule life of leasehold improvement assets - the period over which the leasehold
improvement assets is expected to be available for use.
Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties at the reporting date that have a significant risk of resulting in
material adjustment to the carrying amounts of assets and liabilities within the next financial year is included in the
following notes:
-Note 13 Right of use assets and Note 14 Goodwill: key assumptions underlying recoverable amounts and the discount
rate used to estimate the lease liabilities at the commencement of leases, lease term, or when the leases are modified.
-Note 10 Tax assets and liabilities: availability of future taxable profit against which deductible temporary differences and
tax losses carried forward can be utilised.
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
1.4 Material accounting policies
The accounting policies set out below and in the notes have been applied consistently to all periods presented in these
consolidated financial statements, and have been applied consistently by all subsidiaries in the Consolidated Entity. Other
material accounting policies are contained in the notes to the consolidated financial statements to which they relate.
(a)
Basis for consolidation
The Consolidated Financial Statements incorporate the Financial Statements of the Company and entities controlled by
the Company (its subsidiaries). Control is achieved when the Company has the power, rights to variable returns and the
ability to use its power to affect the amount of the returns. Consistent accounting policies are employed in the preparation
and presentation of the Consolidated Financial Statements.
On acquisition, the assets, liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date
of acquisition. Any excess in the cost of acquisition over the fair value of the identifiable net assets acquired is recognised
as goodwill. If, after reassessment, the fair value of the identifiable net assets acquired exceeds the cost of acquisition, the
difference is credited to the Consolidated Statement of Profit or Loss and Other Comprehensive Income in the period of
acquisition.
The Consolidated Financial Statements include the information and results of each subsidiary from the date on which the
Company obtains control, and until such time as the Company ceases to control an entity. In preparing the Consolidated
Financial Statements, all intercompany balances and transactions, and unrealised profits arising are eliminated in full.
(b)
Foreign currency transactions and balances
Transactions
Foreign currency transactions are translated to Australian currency at the rates of exchange ruling at the dates of the
transactions. Amounts receivable and payable in foreign currencies at reporting date are translated at the rates of
exchange ruling on that date.
Foreign currency monetary items at reporting date are translated at the exchange rates existing at reporting date. Non-
monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates
prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical
cost in a foreign currency are not re-translated.
Exchange differences are recognised in profit and loss in the year in which they arise except exchange differences on
monetary items receivable from or payable to a foreign operation for which settlement is neither planned or likely to occur,
which form part of the net investment in a foreign operation. Such exchange differences are recognised in the foreign
currency translation reserve and in the profit and loss on disposal of the net investment.
When a foreign operation is reconsolidated or borrowings that form part of the net investment are repaid, the cumulative
exchange differences are recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income as
part of the gain or loss on sale.
(c)
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 Tax Office (ATO). In these circumstances the GST is
recognised as part of the cost of acquisition of the asset or as part of an item of expense.
Receivables and payables are stated inclusive of GST.
The net amount of GST recoverable from or payable to the ATO is included as a current asset or liability in the
Consolidated Statement of Financial Position. Cash flows are included in the Consolidated Statement of Cash Flows on a
gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from
or payable to the ATO are classified as operating cash flows.
(d)
Notes to the consolidated financial statements
The notes to these Consolidated Financial Statements have been organised into logical groupings to present more
meaningful and dynamic information to users. To the extent possible, the relevant accounting policies and numbers have
been provided in the same note. The Consolidated Entity has also reviewed the notes for materiality and relevance, and
provided additional information where considered material and relevant to the operations, financial position or performance
of the Consolidated Entity.
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
60
61
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
1.5 Going concern
The Consolidated Entity reported a profit after tax of $39.0 million (2023: $11.1 million) from continuing operations for the
year, while net cash of $165.8 million (2023: $155.5 million) was generated from operations during the year. Although The
Consolidated Entity's balance sheet as at 30 June 2024 reports a net current liability position of $33.7 million (2023: $30.8
million) which could give rise to a potential liquidity risk, the Directors concluded and are satisfied after a comprehensive
review that no liquidity risk exists after taking into account the following factors:
the Consolidated Entity has a cash balance totaling $103.3 million;
the Consolidated Entity produced positive operating cash flows of $165.8 million (2023: $155.5 million);
the Consolidated Entity is in a net current liabilities position due to the capitalisation of lease commitments. The
corresponding right of use asset is classified as a non-current asset. Net current liabilities are impacted by the current
position of lease liabilities of $94.4 million which is forecast to be funded out of operating cash flows;
the Consolidated Entity has no external debt; and
the Consolidated Entity has net assets of $194.6 million as at reporting date.
Based on the above, the Directors consider that the Consolidated Entity is well placed to successfully manage the actual
and potential liquidity risks faced by the organisation.
On the basis of their assessment, the Directors have a reasonable expectation that the Consolidated Entity has and will
generate or obtain adequate resources for a period of at least 12 months from the date of approval of these financial
statements and consider it appropriate to continue to adopt the going concern basis in preparing the financial statements
of the Consolidated Entity as it will continue to pay its debts as and when they fall due.
1.6 New accounting standards and amendments effective from 1 January 2023
In the current year, the Consolidated Entity has adopted other amended standards and amendments. The adoption of the
standards and interpretations had no significant impact on the current year or any prior year and are not likely to have a
significant impact in future years.
Standard name
Effective date for
entity
IFRS 17 Insurance Contracts
1 January 2023
Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2
1 January 2023
Definition of Accounting Estimates - Amendments to IAS 8
1 January 2023
Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments
to IAS 12
1 January 2023
Material Accounting Policy Information
The Consolidated Entity has adopted Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice
Statement 2) from 1 January 2023. The amendments require the disclosure of ‘material’, rather than ‘significant’,
accounting policies. The amendments also provide guidance on the application of materiality to disclosure of accounting
policies, assisting entities to provide useful, entity-specific accounting policy information that users need to understand
other information in the financial statements.
Management reviewed the accounting policies and concluded that the information disclosed in Note 1.4 Material
Accounting Policies is in line with the amendments, therefore, no material changes have been made in this regard.
International Tax Reform—Pillar Two Model Rules – Amendments to IAS 12
The amendments to IAS 12 have been introduced in response to the OECD’s BEPS Pillar Two rules and include:
A mandatory temporary exception to the recognition and disclosure of deferred taxes arising from the jurisdictional
implementation of the Pillar Two model rules; and
Disclosure requirements for affected entities to help users of the financial statements better understand an entity’s
exposure to Pillar Two income taxes arising from that legislation, particularly before its effective date.
The mandatory temporary exception – the use of which is required to be disclosed – applies immediately. The remaining
disclosure requirements apply for annual reporting periods beginning on or after 1 January 2023, but not for any interim
periods ending on or before 30 June 2024.
The amendments had no impact on the Company’s financial statements as the Company is not in scope of the Pillar Two
model rules as its revenue is less than AUD 1.2 billion/year.
Other than above, the adoption of the new accounting standards and amendments did not have a significant impact on the
Consolidated Entity's financial statements.
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
1.7 Amendments to accounting standards not yet effective, but available for early adoption
The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory application dates
for future reporting years. The Consolidated Entity has decided not to early adopt these Standards. The following table
summarises those future requirements, and their impact on the Consolidated Entity where the standard is relevant:
Standard name
Effective date for
entity
Lease Liability in a Sale and Leaseback - Amendments to IFRS 16 Leases
1 January 2024
Non-current Liabilities with Covenants – Amendments to IAS 1
1 January 2024
Classification of Liabilities as Current or Non-current – Amendments to IAS 1
1 January 2024
Supplier Finance Arrangements – Amendments to IAS 7 and IFRS 7
1 January 2024
Lack of Exchangeability – Amendments to IAS 21
1 January 2025
Sale or Contribution of Assets between an Investor and its Associate or Joint
Venture – Amendments to IFRS 10 and IAS 28
1 January 2025
IFRS S1 – General Requirements for Disclosure of Sustainability-related Financial
Information
1 July 2026
IFRS S2 – Climate-related Disclosures
1 July 2026
There are no standards or interpretations that are not yet effective that would be expected to have a material impact on the
Consolidated Entity.
The Consolidated Entity has not early adopted any standard, interpretation or amendment that has been issued but is not
yet effective.
2
Operating segments
The Consolidated Entity identifies its operating segments based on the business activities it engages from which it earns
revenues and incurs expenses. These are reviewed regularly by the chief operating decision makers of the Consolidated
Entity.
The geographic segments are based on the geographic regions in which business units largely share a high level of
similarity in regulatory, economic relationships, time zones, market characteristics, cultural similarities, language clusters,
which form the basis for geographic results to the chief operating decision maker. Each reportable segment has its own
distinct senior manager responsible for the performance of the segment. The chief operating decision maker is responsible
for performance and resource allocation amongst operating segments. All reportable segments are involved in the
provision of workspace solutions.
In line with the requirements under AASB 8 Operating Segments (AASB 8), the Consolidated Entity is run on a worldwide
basis but has four reportable segments: Australia, New Zealand and South East Asia (ANZ/SEA); United States of
America (USA); Europe and Middle East (EME); North Asia. Information about other business activities and operating
segments that are not reportable under the four reportable segments identified under AASB 8 is aggregated and disclosed
as Other.
The Consolidated Entity’s reportable operating segments under AASB 8 are presented below. The accounting policies of
the reportable operating segments are the same as the Consolidated Entity’s accounting policies. Intersegment sales were
eliminated in full.
For the year ended 30 June 2024, the Consolidated Entity’s Virtual Office revenue, and Serviced Office revenue were
$96.6 million and $217.5 million respectively (2023: $88.3 million and $204.2 million, respectively).
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
62
63
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2
Operating segments (continued)
Lease
revenue
2024
$ 000
Service &
other
revenue
2024
$ 000
Total
revenue
2024
$ 000
Lease
revenue
2023
$ 000
Service &
other
revenue
2023
$ 000
Total
revenue
2023
$ 000
Segment
profit/(loss)
2024
$ 000
Segment
profit/(loss)
2023
$ 000
Continuing operations
Australia, New Zealand & South East Asia
62,184
17,350
79,534
53,432
14,299
67,731
16,319
9,820
North Asia
66,376
21,896
88,272
71,712
23,207
94,919
11,253
14,554
Europe & Middle East
78,767
45,763
124,530
65,658
30,196
95,854
27,055
10,640
United States of America
16,354
4,097
20,451
16,699
2,437
19,136
(938)
777
Other
213
553
766
2,245
468
2,713
(4,370)
(295)
Total continuing operations
223,894
89,659
313,553
209,746
70,607
280,353
49,319
35,496
Closed floors (i)
Australia, New Zealand & South East Asia
444
128
572
2,740
669
3,409
8
72
North Asia
(7)
(12)
(19)
7,445
1,040
8,485
(37)
(6,255)
Europe & Middle East
-
-
-
-
-
-
(22)
(20)
United States of America
-
-
-
-
-
-
(15)
(3)
437
116
553
10,185
1,709
11,894
(66)
(6,206)
Franchise fee income
-
-
-
-
226
226
-
225
Consolidated total
224,331
89,775
314,106
219,931
72,542
292,473
49,253
29,515
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2
Operating segments (continued)
Lease
revenue
2024
$ 000
Service &
other
revenue
2024
$ 000
Total
revenue
2024
$ 000
Lease
revenue
2023
$ 000
Service &
other
revenue
2023
$ 000
Total
revenue
2023
$ 000
Segment
profit/(loss)
2024
$ 000
Segment
profit/(loss)
2023
$ 000
Other material items
Interest revenue
-
2,609
2,609
-
2,830
2,830
2,609
2,830
Foreign exchange gains
-
-
-
-
-
-
873
3,096
Centralised unrecovered head office overheads
-
-
-
-
-
-
(2,157)
(3,246)
Share of profit of joint venture
-
-
-
-
-
-
783
556
Gain/(loss) on asset disposal
-
-
-
-
-
-
(668)
(633)
Impairment of right of use assets (ii)
-
-
-
-
-
-
(2,470)
(15,061)
Amortisation of intangible asset
-
-
-
-
-
-
(631)
-
Restructure
-
-
-
-
-
-
(4,572)
-
Unallocated
-
298
298
-
243
243
(73)
(64)
Profit before tax
42,947
16,993
Income tax expense
(3,909)
(5,926)
Consolidated segment revenue and profit
224,331
92,682
317,013
219,931
75,615
295,546
39,038
11,067
Notes:
i. Closed floors represent floors no longer operational, either through deconsolidation or termination.
ii. Refer to note 13 for details on the net impairment of the right of use assets and leasehold improvements.
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
64
65
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2
Operating segments (continued)
30 June 2024
30 June 2023
Segment
assets
$ 000
Segment
liabilities
$ 000
Net assets
$ 000
Segment
assets
$ 000
Segment
liabilities
$ 000
Net assets
$ 000
Australia, New Zealand &
South East Asia
256,610
(89,328)
167,282
266,685
(111,337)
155,348
North Asia
156,952
(137,510)
19,442
172,219
(147,026)
25,193
Europe & Middle East
271,448
(149,766)
121,682
224,166
(103,705)
120,461
United States of America
(27,429)
(85,589)
(113,018)
(21,370)
(91,085)
(112,455)
Other
(727)
(44)
(771)
(733)
(36)
(769)
656,854
(462,237)
194,617
640,967
(453,189)
187,778
3
Revenue and other income
For the year ended 30 June 2024 The Consolidated Entity has three main revenue streams: lease, communications and
service.
2024
$ 000
2023
$ 000
Revenue
Lease revenue
224,331
219,931
Service revenue
49,732
39,765
Communication revenue
40,043
32,551
Franchise fee income
-
226
Total revenue
314,106
292,473
Other income
Interest income - bank deposits
2,609
2,830
Other income
298
243
Total other income
2,907
3,073
Total revenue and other income
317,013
295,546
Recognition and measurement
Revenue
Lease Revenue from leases with customers in the capacity as lessor, is accounted for in accordance with AASB 16 on a
straight line basis according to contractual terms.
Services revenue, communications revenue and franchise fees are accounted for according to AASB 15 Revenue from
Contracts with Customers (AASB 15).
Service revenue comprises revenue earned from telephone, communications, service and franchise fees net of the amount
of goods and services tax from the provision of services to entities outside the Consolidated Entity. Services revenue are
typically invoiced in advance and are recognised in the period in which the services are provided. The services provided
under contract are provided over time as the customer simultaneously receives and consumes the benefit of the service.
The contract liability associated with consideration received in advanced has been presented as deferred contract liabilities
in the trade and other payables balance on the Consolidated Statement of Financial Position.
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
3
Revenue and other income (continued)
Other income
Interest income
Interest income is recognised on an accrual basis using the effective interest method.
4
Expenses
Expenses and outgoings include rates and taxes and are recognised on an accruals basis.
Profit before income tax was arrived at after charging/(crediting) the following from/(to) continuing operations:
Note
2024
$ 000
2023
$ 000
Amortisation of right of use assets
13
95,200
101,943
Depreciation of property, plant and equipment
11
18,206
19,125
Amortisation of intangible assets
12
1,128
827
Loss on disposal of property, plant & equipment
815
789
(Gain)/loss on disposal of financial assets
(137)
(35)
Increase in fair value of financial assets classified as fair value through the
profit & loss
131
(1,292)
Net movement in provision for ECL
(80)
38
Impairment of property, plant and equipment and right of use assets
13
2,470
15,061
Refer to Note 13 for further details on impairment.
Refer to notes 11, 12 and 13 on depreciation and amortisation.
5
Income tax expense
The major components of tax expense comprise:
2024
$ 000
2023
$ 000
Current tax expense
Local income tax - current year
6,410
8,376
Under/(over) provision in prior years – current tax
193
(604)
Deferred tax expense
Origination and reversal of temporary differences
(2,645)
(3,772)
(Over)/under provision in prior years – deferred tax
(49)
1,926
Income tax expense
3,909
5,926
All of the Consolidated Entity’s tax is calculated using tax rates and tax laws that have been enacted or substantively
enacted by the reporting date. Tax is calculated by reference to the amount of income tax payable or recoverable in
respect of the taxable profit or loss for the year.
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
66
67
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
5
Income tax expense (continued)
Reconciliation of income tax to accounting profit:
2024
$ 000
2023
$ 000
Profit before income tax
42,947
16,993
Tax percentage
%
30.00
%
30.00
Income tax expense
12,884
5,098
Add/(less) the tax effect of:
Income tax under/(over) provision in prior years
144
1,322
Unused tax losses and tax offsets not recognised as deferred tax assets
592
2,724
Deductible local taxes
(107)
(293)
Effect of different tax rates of subsidiaries operating in other jurisdictions
(7,232)
(6,045)
Other non-deductible/(non-assessable) items
(2,336)
3,120
Tax losses of controlled entities recouped
(36)
-
Income tax expense
3,909
5,926
Recognition and measurement
Current taxes
Current income tax is calculated by reference to the amount of income tax payable or recoverable in respect of the taxable
profit or loss for the year. Income tax is calculated using tax rates and tax laws that have been enacted or substantively
enacted by the reporting date. Current income tax for current and prior year is recognised as a liability or asset to the
extent that it is unpaid or refundable.
6
Earnings per share
(a)
Earnings used to calculate overall Earning Per Share ("EPS")
2024
$ 000
2023
$ 000
Profit attributable to shareholders used to calculate basic and diluted EPS
39,038
11,067
(b)
Weighted Average Number of Ordinary Shares ("WANOS") outstanding during the year used in calculating
EPS
2024
000
2023
000
WANOS used in calculating basic EPS
97,850
96,818
WANOS used in calculating diluted EPS
98,174
96,818
(c)
Earnings per share
2024
Cents
2023
Cents
Basic EPS
39.9
11.4
Diluted EPS
39.8
11.4
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
6
Earnings per share (continued)
Recognition and measurement
Basic earnings per share
Basic EPS is calculated by dividing the net profit attributable to members of the Consolidated Entity for the year by the
weighted average number of ordinary shares of the Company.
Diluted earnings per share
Diluted EPS is calculated by adjusting the basic EPS earnings by the effect of conversion to ordinary shares of the
associated dilutive potential ordinary shares. The notional earnings on the funds that would have been received by the
entity had the potential ordinary shares been converted are not included.
The diluted EPS weighted average number of shares includes the number of shares assumed to be issued for no
consideration in relation to dilutive potential ordinary shares.
The identification of dilutive potential ordinary shares is based on net profit or loss from continuing ordinary operations and
is applied on a cumulative basis, taking into account the incremental earnings and incremental number of shares for each
series of potential ordinary shares. There is no impact on diluted EPS resulting from shares under option.
7
Cash and cash equivalents
2024
$ 000
2023
$ 000
Cash at bank and in hand
89,401
69,481
Bank short term deposits
13,899
35,883
103,300
105,364
Bank short term deposits mature within an average of 28 days (2023: 69 days) and are considered cash and cash
equivalents on the basis of being short term and subject to an insignificant risk of change in value. These deposits and the
interest-earning portion of the cash balance earn interest at a weighted average rate of 0.48% (2023: 2.27%).
Recognition and measurement
Cash and cash equivalents comprises cash on hand, demand deposits and short-term investments which are readily
convertible to known amounts of cash and which are subject to an insignificant risk of change in value.
Bank overdrafts also form part of cash equivalents for the purpose of the Consolidated Statement of Cash Flows and are
presented within current liabilities on the Consolidated Statement of Financial Position.
8
Trade and other receivables
2024
$ 000
2023
$ 000
Trade receivables
35,988
28,765
Less: impairment of trade receivables
(1,796)
(1,876)
Net trade receivables
34,192
26,889
Other receivables
1,660
889
35,852
27,778
The carrying value of trade receivables is considered a reasonable approximation of fair value due to short-term nature of
balances.
There has been no change to the Consolidated Entity's accounting policies in relation to trade receivables and provision for
expected credit loss (ECL).
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
68
69
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
8
Trade and other receivables (continued)
All of the Consolidated Entity’s trade receivables relate to customers purchasing workplace solutions and associated
services and no individual customer has a material balance owing as a trade receivable. The Consolidated Entity applies
the simplified approach to trade receivables and recognises expected credit losses by establishing a provision matrix for
forward-looking factors specific to the debtors and the economic environment. The average credit period allowed on
rendering of services is 7 days. The Consolidated Entity has applied the expected credit loss model to account for
expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk
since initial recognition of the assets. Receivables are assessed for impairment at each reporting date and as at 30 June
2024 the Directors believe the provisions raised are sufficient.
The Consolidated Entity's impairment of trade receivables includes an ECL allowance for the financial year ended 30 June
2024 totaling $1.8 million (2023: $1.9 million).
Reconciliation of changes in the provision for expected credit loss:
2024
$ 000
2023
$ 000
Balance at beginning of the year
(1,876)
(1,838)
Amounts written off
1,925
1,048
Provision (recognised) / reversed
(1,845)
(1,086)
Balance at end of the year
(1,796)
(1,876)
Trade receivables - days past due
30 June 2024
Current
< 30 days
overdue
31 - 60 days
overdue
> 61 days
overdue
Total
$ '000
$ '000
$ '000
$ '000
$ '000
Trade receivables
27,788
3,525
1,611
3,064
35,988
Expected credit loss rate
%
-
%
14
%
20
%
60
30 June 2023
Trade receivables
14,877
8,112
1,617
4,159
28,765
Expected credit loss rate
%
-
%
12
%
15
%
60
The Consolidated Entity calculated expected credit losses based on the anticipated impact of default events arising either
in the 12 months after reporting date, or the entire lifetime of the asset. Receivables are initially recognised at fair value
and subsequently at amortised cost using the effective interest rate method less any loss allowance. All receivables with
maturities greater than 12 months after balance date are classified as non-current. The decrease in provisions during the
year ended 30 June 2024 represents Management’s judgement based on information available at the time on the impact of
economic conditions and the recoverability of debtors. The decrease of $0.1 million (2023: increase of $0.1 million) was
recognised through the Consolidated Statement of Profit or Loss and Other Comprehensive Income during the year.
Considering the current economic environment and global disruptions, the Consolidated Entity reviewed the recoverability
of its debtor profile and is satisfied with the expected credit-loss for the financial year ended 30 June 2024. The
recoverability of outstanding balances are estimated to remain stable. Historically the overall debtor profile of the
Consolidated Entity has not incurred significant credit losses and continues to maintain significant customer deposits as
additional security in the rare event of non-performance of customer contracts.
Recognition and measurement
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using effective
interest rate method, less any allowance for impairment. Recoverability of trade receivables is reviewed ongoing basis.
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
9
Other financial assets
2024
$ 000
2023
$ 000
Current
At fair value through profit or loss
Investment in bank hybrid variable rate
securities
4,737
4,597
Listed ordinary shares
7,655
6,393
At amortised cost
Lease deposits
1,151
2,468
13,543
13,458
Non-current
At fair value through profit or loss
Forward foreign currency exchange contracts
1,473
566
At amortised cost
Lease deposits
35,156
36,234
Other
53
1,008
36,682
37,808
Australia has $0.7 million in securities which is encumbered (2023: $0.7 million).
No expected credit loss has been provided on lease deposits as, based on past experience, these are expected to be
recovered in full.
Lease deposits are accessable upon expiration of the lease.
Recognition and measurement
All recognised financial assets that are within the scope of AASB 9 are required to be initially recognised at fair value and
subsequently measured at amortised cost or fair value on the basis of the entity’s business model for managing the
financial assets and the contractual cash flow characteristics of the financial assets.
10
Tax assets and liabilities
Current tax asset
2024
$ 000
2023
$ 000
Net tax refunds receivable
9,515
5,506
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
70
71
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
10
Tax assets and liabilities (continued)
Deferred tax assets
30 June 2024
Balance
at 1 July
$ 000
Recognised
in profit or
loss
$ 000
Balance
at 30 June
$ 000
Deferred
tax asset
$ 000
Deferred
tax liability
$ 000
Accruals not currently deductible
8,577
2,071
10,648
11,057
(409)
Doubtful debts
571
(9)
562
562
-
Depreciable and amortisable assets
12,437
352
12,789
12,887
(98)
Tax losses
6,328
2,522
8,850
8,850
-
Foreign exchange
(875)
(712)
(1,587)
(413)
(1,174)
Deferred rent incentive
(8)
8
-
-
-
Lease asset and liability
14,552
(2,286)
12,266
96,836
(84,570)
Others
701
(36)
665
1,074
(409)
Tax assets/(liabilities) before set-off
42,283
1,910
44,193
130,853
(86,660)
Set-off of tax
-
-
-
(86,660)
86,660
Net tax assets/(liabilities)
42,283
1,910
44,193
44,193
-
30 June 2023
Balance
at 1 July
$ 000
Recognised
in profit or
loss
$ 000
Balance
at 30 June
$ 000
Deferred
tax asset
$ 000
Deferred
tax liability
$ 000
Accruals not currently deductible
6,946
1,631
8,577
9,694
(1,117)
Doubtful debts
1,388
(817)
571
571
-
Depreciable and amortisable assets
12,914
(477)
12,437
12,459
(22)
Tax losses
5,917
411
6,328
6,328
-
Foreign exchange
(747)
(128)
(875)
(226)
(649)
Deferred rent incentive
(3)
(5)
(8)
(1)
(7)
Lease asset and liability
12,685
1,867
14,552
94,316
(79,764)
Others
674
27
701
1,031
(330)
Tax assets/(liabilities) before set-off
39,774
2,509
42,283
124,172
(81,889)
Set-off of tax
-
-
-
(81,889)
81,889
Net tax assets/(liabilities)*
39,774
2,509
42,283
42,283
-
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
10
Tax assets and liabilities (continued)
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following:
2024
$ 000
2023
$ 000
Temporary difference
16
16
Tax losses - capital
2,086
2,086
Tax losses - revenue
29,350
28,930
31,452
31,032
The movements in deferred taxes included above are after the offset of deferred tax assets and deferred tax liabilities
where there is a legally enforceable right to set off and they relate to income taxes levied by the same taxation authority.
The closing deferred tax position above represents the aggregated deferred tax asset or liability position within individual
legal entities, with some companies recognising deferred tax assets and others recognising deferred tax liabilities. The
closing position is a net deferred tax asset of $44.2 million (2023: $42.3 million).
Recognition and measurement
Deferred tax is accounted for using the comprehensive balance sheet liability method in respect of temporary differences
arising from differences between the carrying amount of assets and liabilities in the Consolidated Financial Statements
and the corresponding tax base of those items.
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised
to the extent that it is probable that future taxable profits will be available against which they can be used. However,
deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arises from the initial
recognition of assets and liabilities, other than as a result of a business combination, which affects neither taxable income
nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences
arising from goodwill.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, branches
and associates except where the Consolidated Entity is able to control the reversal of the temporary differences and it is
probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets arising from
deductible temporary differences associated with these investments are only recognised to the extent that it is probable
that there will be sufficient taxable profits against which to utilise benefits of the temporary differences and they are
expected to reverse in the foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the assets and
liabilities giving rise to them are realised or settled, based on tax rates and tax laws that have been enacted or
substantially enacted by the reporting date.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in
which the Consolidated Entity expects, at the reporting date, to recover or settle the carrying amount of its assets and
liabilities.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the
Consolidated Entity intends to settle its current tax assets and liabilities on a net basis.
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
72
73
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
11
Property, plant and equipment
Freehold
land and
buildings
$ 000
Leasehold
improve-
ments
$ 000
Office
furniture
and fittings
$ 000
Office
equipment
$ 000
Capital
works in
progress
$ 000
Total
$ 000
Year ended 30 June 2024
Balance at the beginning of
year
6,482
61,583
8,582
3,191
520
80,358
Additions
-
21,164
4,558
2,151
7,009
34,882
Disposals
(3,124)
(1,320)
(197)
(87)
-
(4,728)
Depreciation expense
(46)
(14,018)
(2,558)
(1,584)
-
(18,206)
Foreign exchange movements
(150)
(2,036)
(386)
(118)
-
(2,690)
Net book value
3,162
65,373
9,999
3,553
7,529
89,616
Cost
3,517
223,626
41,192
49,290
7,529
325,154
Accumulated depreciation
(355)
(158,253)
(31,193)
(45,737)
-
(235,538)
Balance at the end of the year
3,162
65,373
9,999
3,553
7,529
89,616
Freehold
land and
buildings
$ 000
Leasehold
improve-
ments
$ 000
Office
furniture
and fittings
$ 000
Office
equipment
$ 000
Capital
works in
progress
$ 000
Total
$ 000
Year ended 30 June 2023
Balance at the beginning of
year
6,600
60,939
9,530
2,820
593
80,482
Additions and transfers
-
14,816
2,162
2,499
(73)
19,404
Disposals
-
(607)
(404)
(522)
-
(1,533)
Depreciation expense
(129)
(14,565)
(2,812)
(1,619)
-
(19,125)
Foreign exchange movements
11
1,000
106
13
-
1,130
Net book value
6,482
61,583
8,582
3,191
520
80,358
Cost
7,489
212,499
39,163
48,706
520
308,377
Accumulated depreciation
(1,007)
(150,916)
(30,581)
(45,515)
-
(228,019)
Balance at the end of the year
6,482
61,583
8,582
3,191
520
80,358
Leasehold improvements are assessed for indicators of impairment under AASB 136. Refer to note 13 for further details of
impairment testing.
Recognition and measurement
The carrying value of property, plant and equipment is measured as the cost of the asset, less accumulated deprecation
and impairment.
Depreciation
Items of property, plant and equipment, including buildings and leasehold property but excluding freehold land, are
depreciated using the straight line method over their estimated useful lives. Leasehold improvements are depreciated over
the useful life of the asset using the straight line method.
Leasehold improvements are depreciated over the period the assets are expected to be available for use by the
Consolidated Entity.
All other Property, plant and equipment is depreciated on a straight-line basis over the asset's useful life to the
Consolidated Entity, commencing when the asset is ready for use.
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
11
Property, plant and equipment (continued)
Recognition and measurement (continued)
The estimated useful lives used for each class of asset are as follows:
The depreciation rates used for each class of depreciable asset are shown below:
Fixed asset class
Depreciation rate
Buildings
40 years
Leasehold improvements
Useful life of the asset
Office furniture and fittings
7.7 years
Office equipment
3 - 4 years
Software
3.7 years
Motor vehicles
6.7 years
The estimated useful lives, residual value and depreciation methods are reviewed annually and, where changed, are
accounted for as a change in accounting estimate. Where depreciation rates or methods are changed, the net written
down value of the asset is depreciated from the date of the change in accordance with the new depreciation rate or
method.
Assets are depreciated from the date of acquisition or from the time an asset is completed and ready for use.
At the end of each annual reporting period, the depreciation method, useful life and residual value of each asset is
reviewed. Any revisions are accounted for prospectively as a change in estimate.
Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are
expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying value of the asset) is recorded in profit and loss in the year the asset
is derecognised.
12
Intangible asset
Intangible assets relate to assets other than goodwill. For detailed disclosure of goodwill refer to note 14.
2024
$ 000
2023
$ 000
Opening balance
2,433
2,075
Additions
1,403
1,185
Amortisation
(1,128)
(827)
2,708
2,433
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
74
75
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
12
Intangible asset (continued)
Recognition and measurement
Intangible assets relate to internally developed software and is initially recognised at cost.
Development expenditure is capitalised only if the expenditure can be measured reliably, the product or process is
technically and commercially feasible, future economic benefits are probable and the the Consolidated Entity intends to
and has sufficient resources to complete development and to use or sell the asset. Otherwise, it is recognised in profit or
loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost less accumulated
amortisation and any accumulated impairment losses.
Subsequent to initial recognition the intangible assets is carried at cost less accumulated amortisation and impairment
losses.
Amortisation is calculated to write off the cost of the intangible assets over the estimated useful lives using the straight-line
method.
The estimated useful lives are as follows:
Asset class
Amortisation rate
Internally developed software
4-10 years
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
Software-as-a-Service (SaaS) arrangements
SaaS arrangements are service contracts providing the Consolidated Entity with the right to access the cloud provider’s
application software over the contract period. As such the Consolidated Entity does not receive a software intangible asset
at the contract commencement date.
For SaaS arrangements, the Consolidated Entity assesses if the contract involves a software that it can ‘control’ to
determine whether an intangible asset is present. If the Consolidated Entity cannot determine control of the software, the
arrangement is deemed a service contract and any implementation costs including cost of configuration and customisation
of the software are recognised as operating expenses when incurred.
13
Right of use assets
The Consolidated Entity leases property. Information about leased property for which the Consolidated Entity is a lessee is
presented below:
2024
$ 000
2023
$ 000
Balance at beginning of year
305,311
259,998
Additions to right of use assets
110,374
157,098
Acquired through business combinations (i)
6,302
-
Amortisation charge for the year
(95,200)
(101,943)
Impairment of right of use assets
(2,470)
(15,061)
Foreign exchange movements
(7,827)
5,219
316,490
305,311
(i) Refer to Note 22 for further details
Right of use assets and leasehold improvements are assessed for indicators of impairment under AASB 136. Where
impairment indicators exist, the CGU is tested for impairment. This test has respective assets grouped into CGUs to
determine its “Value in Use” (ViU). The ViU assessment is conducted using a discounted cash flow methodology requiring
the Directors to estimate the discounted future cash flows expected to arise from the respective CGU. When applying the
ViU approach to calculate the recoverable amount for each CGU, we deduct the carrying amount of the lease liability both
from the CGU’s carrying amount and from its ViU.
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
13
Right of use assets (continued)
Inflationary pressures and the uncertain economic climate worldwide is expected to continue to impact the business in the
financial year to 30 June 2024. As a result of these conditions, the Consolidated Entity carried out a comprehensive review
for potential impairments across the whole portfolio at a CGU level by city.
Impairment tests for right of use assets are performed on a CGU basis when impairment triggers arise. CGUs are defined
as individual cities, being the smallest identifiable group of assets that generate cash flows that are largely independent of
other groups of assets. The Consolidated Entity assesses whether there is an indication that a CGU may be impaired,
including persistent operating losses, net cash outflows and poor performance against forecasts. The recoverable amounts
of right of use assets are based on the higher of fair value less costs to sell and ViU. The Consolidated Entity considered
ViU in the impairment testing on a city by city level. Value in use calculations are based on cash flow projections and
discount rates that are developed using market participant based assumptions for items of right of use assets. The post-
tax WACC used in the Consolidated Entity’s calculations range between 6.7% and 47.9% (2023: 6.7% and 10.4%).
Impairment charges are recognised within the Consolidated Statement of Profit or Loss and Other Comprehensive
Income.
In the approach detailed above, an impairment loss of $2.5 million was raised in relation to CGUs in Europe and North
Asia for the year ended 30 June 2024. As a result of the the extended underperformance and continued uncertainty in
global economic conditions, no previously recognised impairment loss was reversed.
Recognition and measurement
The Consolidated Entity assesses whether a contract is or contains a lease, at inception of the contract. For lease
arrangements in which the Consolidated Entity is a lessee, a right of use asset and a corresponding liability is recognised
at the date at which the leased asset is available for use by the Consolidated Entity.
When the contract does not exceed 12 months the lease is classified as short term in nature and not recognised in terms
of IFRS 16. Lease payments are expensed in profit and loss.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a
change in future lease payments arising from a change in rate, if there is a change in the Consolidated Entity’s estimate of
the amount expected to be payable under a residual value guarantee, or if the Consolidated Entity changes its assessment
of whether it will exercise a purchase, extension or termination option.
Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit and loss over
the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each
period.
Assets and liabilities arising from a lease are initially measured on a present value basis.
Lease liabilities include the net present value of the following lease payments:
fixed payments, less any lease incentives receivables;
variable lease payments that are based on an index or a rate;
amounts expected to be payable by the lessee under residual value guarantees;
the exercised price of a purchase option if the lessee is reasonably certain to exercise that option; and
payments of penalties for terminating the lease, if the term reflects the lessee exercising that option.
The lease liability is presented as a separate line in the Consolidated Statement of Financial Position.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the
lessee’s incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds
necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability
(using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The Consolidated Entity recognises right of use assets at the commencement date of the lease (i.e. the date the underlying
asset is available for use), measured at cost.
The cost of right of use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease
payments made at or before the commencement date less any lease incentives received. Right of use assets are
subsequently measured at cost, less any accumulated depreciation and impairment losses, and are adjusted for any
remeasurement of lease liabilities.
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
76
77
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
13
Right of use assets (continued)
Recognition and measurement (continued)
Whenever the Consolidated Entity incurs an obligation for costs to dismantle and remove a leased asset, restore the site
on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a
provision is recognised and measured under AASB 137 Provisions, Contingent Liabilities and Contingent Assets (AASB
137). To the extent that the costs relate to a right of use asset, the costs are included in the related right of use asset.
Right of use assets are depreciated over the lease term of the underlying asset. If a lease transfers ownership of the
underlying asset or the cost of the right of use asset reflects that the Consolidated Entity expects to exercise a purchase
option, the related right of use asset is depreciated over the useful life of the underlying asset. The depreciation starts at
the commencement date of the lease.
The right of use assets are initially measured at cost, which comprises:
the amount of the initial measurement of the lease liability;
any lease payments made at or before the commencement date, less any lease incentives and any initial direct costs
incurred by the lessee; and
an estimate of the costs to dismantle and remove the underlying asset or to restore the underlying asset.
Subsequently the right of use asset is measured at cost less any accumulated depreciation and impairment losses and
adjusted for certain remeasurements of the lease liability.
Right of use assets are subject to impairment in accordance with AASB 136 Impairment of Assets (AASB 136). Any
identified impairment loss is accounted for in line with our accounting policy for ‘Property, plant and equipment.
The Consolidated Entity is currently party to a lease portfolio of 123 leases as lessee.
Multiple lease term amendments (referred to Modifications as described above) have been accounted for as a lease
modification to the existing lease by remeasuring the lease liability using a revised discount rate with the corresponding
change in lease liability reflected against the right of use asset.
14
Goodwill
Allocation of goodwill to cash generating units
Each of the following countries is a stand-alone group of CGUs :
Japan, Australia, New Zealand, China, Malaysia, Singapore, Thailand, Belgium, United Arab Emirates, Bahrain, Qatar,
Saudi Arabia, Philippines, Lebanon, Turkey, France, Germany, United States of America, Kuwait and United Kingdom.
Goodwill was allocated to the CGU in which goodwill arose. Not every CGU has goodwill allocated to it.
The carrying amounts of goodwill relating to each group of CGU as at 30 June 2024 were as follows:
2024
$ 000
2023
$ 000
Japan
9,161
9,161
Australia
6,136
2,636
New Zealand
785
785
Singapore
706
706
Thailand
326
326
China
160
161
17,274
13,775
The Consolidated Entity tested goodwill for impairment as at 30 June 2024. The recoverable amount of a CGU or group of
CGUs to which goodwill is allocated is determined based on the greater of its value in use and its fair value less costs of
disposal. Fair value is determined as being the amount obtainable from the sale of a CGU in an arm’s length transaction
between knowledgeable and willing parties. If relevant, this fair value assessment less costs of disposal is conducted by
management based on extensive knowledge of the industry including the current market conditions prevailing. The value in
use (ViU) assessment is conducted using a discounted cash flow methodology requiring the Directors to estimate the
discounted future cash flows expected to arise from the CGU.
During the financial year ending 30 June 2024, Goodwill of $3.5 million was recognised as part of the business
combination. Refer to Note 22 for further details.
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
14
Goodwill (continued)
When applying the ViU approach to calculate the recoverable amount for each CGU, the Consolidated Entity incorporates
the use of projected financial information and a discount rate that are developed using market participant based
assumptions. The cash-flow projections are based on financial forecasts for the remainder of the useful life five-year
financial forecasts developed by management that include revenue projections, capital spending trends, and investment in
working capital to support anticipated revenue growth. The selected discount rate considers the risk and nature of the
respective reporting unit’s cash flows and the rates of return market participants would require to invest their capital in the
Consolidated Entity's reporting units. The Consolidated Entity's methodology for determining recoverable amounts
remained consistent for the years presented.
The following key assumptions have been used in calculating the ViU for each country:
future cash flows are based on forecasts prepared by management. The model excludes cost savings and
restructurings that are anticipated but had not been committed to at the date of the determination of the ViU;
these forecasts exclude the impact of acquisitive growth expected to take place in future periods;
management considers these forecasts to be a reasonable projection of margins. Cash flows beyond 30 June 2028
have been extrapolated using a nil growth rate which management believes is a reasonable long-term growth rate for
any of the markets in which the Consolidated Entity operates.
the Consolidated Entity applies a country specific post-tax discount rate to the post-tax cash flows for each country.
The country specific discount rate is based on the underlying weighted average cost of capital (WACC) for the
Consolidated Entity. The WACC is then adjusted for each country to reflect the assessed market risk specific to that
country.
The recoverable amount of goodwill relating to each group of CGU was determined based on ViU calculations, which is
based on a discounted cash flow ("DCF") analysis by discounting the estimated future cash flows over the next five year to
their present value in order to estimate the value-in-use. Cash flows beyond the five year period have been extrapolated
using estimated nil growth rates (2023: nil growth rate).
For the year ended 30 June 2024, the post-tax discount rate applied to the above countries ranged from 6.0%-9.0% (2023:
6.7%-10.4%).
Downside sensitivity analysis has been performed on the assumptions used in the model and concluded that there is no
risk of impairment as at 30 June 2024.
Recognition and measurement
Goodwill arising on acquisition is recognised as an asset and initially recognised at cost, representing the excess of the
cost of acquisition over the net fair value of the identifiable assets, liabilities and contingent liabilities acquired. Goodwill is
not amortised, but is tested for impairment at each reporting date and whenever there is an indication that goodwill may be
impaired. Any impairment of goodwill is recognised immediately in the Consolidated Statement of Profit or Loss and Other
Comprehensive Income and is not subsequently reversed.
For the purpose of impairment testing, goodwill is allocated to each of the Consolidated Entity’s CGU, or groups of CGUs,
expected to benefit from the synergies of the business combination. Each CGU or group of CGUs to which the goodwill is
allocated represents the lowest level within the entity at which the goodwill is monitored for internal management
purposes, and is not larger than an operating segment of the Consolidated Entity. CGUs (or groups of CGUs) to which
goodwill has been allocated are tested for impairment annually, or more frequently if events or changes in circumstances
indicate that goodwill might be impaired.
If the recoverable amount of the CGU (or group of CGUs) is less than the carrying amount of the CGU, the impairment
loss is allocated to reduce the carrying amount of any goodwill allocated to the CGU (or group of CGUs) and then to the
other assets of the CGUs pro-rata on the basis of the carrying amount of each asset in the CGU (or group of CGUs). On
disposal of an operation within a CGU, the attributable amount of goodwill is included in the determination of the profit or
loss on disposal of the operation.
15
Trade and other payables
2024
$ 000
2023
$ 000
Trade creditors
9,788
5,427
Contract liabilities
28,568
19,207
Other creditors and accruals
25,328
18,911
63,684
43,545
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
78
79
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
15
Trade and other payables (continued)
Recognition and measurement
Trade and other payables are initially recognised at fair value and subsequently measured at amortised cost when goods
and services are received, whether or not billed to The Consolidated Entity, prior to the end of the reporting period.
16
Lease liabilities
The Consolidated Entity has 123 (2023:121) leasing arrangements as lessee comprising leased offices as at 30 June
2024. These leases have been accounted for in line with AASB 16.
Refer to note 13 for a detailed breakdown of the right of use asset amount. Information about lease liabilities and variable
lease payments incurred during the year is presented below:
Future minimum lease payments
The maturity analysis of lease liabilities based on contractual undiscounted cash flows is shown in the table below:
< 1 year
$ 000
1 - 5 years
$ 000
> 5 years
$ 000
Total
undiscounted
lease liabilities
$ 000
Carrying
amount
$ 000
2024
Lease liabilities
111,892
236,756
60,154
408,802
371,198
2023
Lease liabilities
114,261
222,524
70,198
406,983
367,845
Lease liabilities included in the Consolidated Statement of Financial Position
2024
$ 000
2023
$ 000
Current
94,364
106,037
Non-current
276,834
261,808
371,198
367,845
Amounts recognised in Consolidated Statement of Profit or Loss and Other Comprehensive Income
2024
$ 000
2023
$ 000
Interest expense on lease liability
13,986
11,221
Short term lease expenses
1,269
1,501
Amortisation of right of use assets
95,200
101,943
110,455
114,665
Short term lease expenses are leases with terms of less than 12 months.
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
16
Lease liabilities (continued)
Amounts recognised in the Consolidated Statement of Cash Flows
2024
$ 000
2023
$ 000
Repayment of lease liabilities relating to current year
occupancy (financing cashflows)
(102,244)
(98,008)
Interest expense on lease liability
(13,986)
(11,221)
Repayment of lease liabilities relating to future
occupancy years (financing cashflows)
(3,324)
(5,433)
(119,554)
(114,662)
Recognition and measurement
Refer to note 13 for the details on lease liabilities.
17
Provisions
2024
$ 000
2023
$ 000
Current
Employee benefits
9,321
8,349
Other
3,242
4,708
12,563
13,057
Non-current
Employee benefits
1,789
1,582
The current provision for employee benefits includes $9.0 million of annual leave and vested long service leave
entitlements accrued (2023: $8.0 million).
Employee
benefits
$ 000
Others
$ 000
Total
$ 000
Year ended 30 June 2024
Opening balance at 1 July 2023
9,931
4,708
14,639
Additional provisions raised
5,365
5,289
10,654
Provisions utilised
(4,113)
(6,755)
(10,868)
Foreign exchange translation movement
(73)
-
(73)
Balance at 30 June 2024
11,110
3,242
14,352
Employee
benefits
$ 000
Others
$ 000
Total
$ 000
Opening balance at 1 July 2022
8,746
2,650
11,396
Additional provisions raised
5,897
8,066
13,963
Provisions utilised
(4,721)
(6,008)
(10,729)
Foreign exchange translation movement
9
-
9
Balance at 30 June 2023
9,931
4,708
14,639
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
80
81
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
21
Bank guarantees and contingent liabilities
The Consolidated Entity has bank guarantees and letters of credit held with certain banks, predominantly in support of
leasehold contracts with a variety of landlords, amounting to $28.5 million (30 June 2023: $26.6 million).
22
Business combinations
On 3 July 2023, the Consolidated Entity completed the acquisition of two serviced office businesses in Canberra, ACT,
Australia, for a net consideration of $4.2 million, payable in two instalments. The terms of the acquisition did not include
any contingent consideration.
The businesses were previously owned by Enideb Pty Ltd, a related entity, and were operated under a Servcorp franchise
arrangement.
The fair values of the identifiable assets and liabilities acquired as of the date of acquisition were:
2024
000
$
Assets:
Property, plant and equipment
70
Right of use asset
6,302
Intangible asset – customer contracts*
630
Intangible asset – goodwill
3,500
Total assets
10,502
Liabilities:
Lease liabilities
6,302
Total liabilities
6,302
Identifiable net asset acquired
4,200
Cash consideration paid
3,277
Working capital adjustment
713
Deferred cash consideration payable
210
Total consideration
4,200
Goodwill of $3.5 million has been recognised, representing the excess of consideration paid above the fair value of the
acquired assets and liabilities. The goodwill is primarily attributable to the complementary business procedures developed
and implemented in the businesses acquired, manifest in the outperforming occupancy and profit margin achieved by the
businesses. The acquisition is underpinned by the following strategic rationale for the Consolidated Entity:
Expands the organic footprint of the Consolidated Entity in Canberra, ACT with a strong track record of operating
performance and a high brand awareness;
Brings complementary business procedures and strategies to improve occupancy, client retention, space utilisation
and service conversion across the whole Australian portfolio;
Increases the scale of business in Australia to optimize the benefits of shared services at minimal incremental costs;
Re-energises the Australian operations with a unified value proposition, product line and service quality;
Post acquisition, the operations in Canberra produces positive net cash flow and contributes profit to the Consolidated
Entity.
* Intangible asset – customer contracts is included in the additions to the intangible asset Note 12.
23
Equity settled employee benefits reserve
The equity settled employee benefits reserve arises on the grant of rights to Key Management Personnel (KMP), senior
executives and managers in accordance with the provisions of Servcorp’s Executive Share Option Scheme and the
Servcorp Employee Incentive Plan. Amounts are transferred out of the reserve and into share capital when the rights vest,
17
Provisions (continued)
Recognition and measurement
Provisions are recognised when the Consolidated Entity has a legal or constructive obligation, as a result of past events,
for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
Provisions are measured at the present value of management's best estimate of the outflow required to settle the
obligation at the end of the reporting period. The discount rate used is a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the
unwinding of the discount is taken to finance costs in the Consolidated Statement of Profit or Loss and Other
Comprehensive Income.
18
Commitments for expenditure
2024
$ 000
2023
$ 000
Capital expenditure commitments - property, plant & equipment
Committed but not provided for and payable
Not later than 1 year
8,376
15,654
8,376
15,654
19
Contributed equity
2024
$ 000
2023
$ 000
30 June 2024: 98,420,388 ( 30 June 2023: 96,817,888) ordinary shares
Opening balance
151,594
151,594
Exercise of share options
3,973
-
Total
155,567
151,594
20
Foreign currency translation reserve (FCTR)
Servcorp has controlled entities operating in 20 countries and its presentation currency is Australian dollars. The assets
and liabilities are translated to Australian dollars using the exchange rate at year end; income and expenses are translated
using an average exchange rate for the year. On translation of foreign operations, exchange differences are recognised in
other comprehensive income and the FCTR.
2024
$ 000
2023
$ 000
Balance 1 July
(20,370)
(18,085)
Exchange difference on translation of foreign operations
(13,406)
(2,285)
Balance at 30 June
(33,776)
(20,370)
Recognition and measurement
The individual financial statements of each controlled foreign entity are presented in its functional currency, being the
currency of the primary economic environment in which the entity operates. For the purpose of the Consolidated Financial
Statements, the results and financial position of each entity are expressed in Australian dollars, which is the functional
currency of the Company and the presentation currency for the Consolidated Financial Statements.
Total
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
82
83
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
23
Equity settled employee benefits reserve (continued)
the rights are exercised and shares issued. Further information about the share-based payments to employees is set out in
the Remuneration Report contained in the Annual Report for the year ended 30 June 2024.
For the year ended 30 June 2024 the following rights were granted:
Balance
1 July
Issued
Exercised
Forfeited
Balance
30 June
Total options FY24
3,423,250
2,675,000
(1,602,500)
(18,750)
4,477,000
Total options FY23
2,726,250
1,002,000
-
(305,000)
3,423,250
Total performance rights FY24
160,000
-
-
-
160,000
Total performance rights FY23
-
160,000
-
-
160,000
(a)
Inputs used to determine fair value at grant date under the ESOS
SRVAD
Options
SRVAC
Options
SRVAB
Options
Grant date
11 May 2022 6 August 2021
27 August 2020
Share price at grant date
$3.35
$3.21
$2.29 - $2.48
Exercise price
$3.54
$3.35
$2.48
Expected volatility
30.29%
56.29%
54.78% - 54.87%
Expected life
1,826 days
1,826 days
1,779 - 1,825 days
Expected dividends
5.60%
10.11%
7.53%
Risk free interest rate
2.77%
0.66%
0.26% - 0.36%
Fair value at grant date
$0.5145
$0.7206
$0.5368 - $0.5825
(b)
Inputs used to determine fair value at grant date under the SEIP
SRVAH
Options
SRVAG
Options
SRVAF
Options
SRVAE
Performance
Rights
Grant date
6 Dec 2023
6 Nov 2023
1 Dec 2022
1 Dec 2022
Share price at grant date
$3.35
$2.91
$3.39
$3.39
Exercise price
$3.35
$3.00
$3.50
$Nil
Expected volatility
23.90%
23.95%
28.34%
28.34%
Expected life
1,387 days
1,388 days
1,735 days
1,034 days
Expected dividends
6.96%
6.96%
6.77%
6.77%
Risk free interest rate
4.17%
4.14%
3.42%
3.42%
Fair value at grant date
$0.2450
$0.3192
$0.4302
$2.7982
On 14 November 2023, 1,675,000 unquoted options over unissued shares in Servcorp Limited were issued to senior
executives and managers. The options expire 1 September 2028 with vesting conditions of cumulative EPS of 10% per
annum over the three financial years ending 30 June 2026 and continual service until 1 September 2026 (vesting date).
The contractual life of the options is 4 years and 9 months, with the last exercise date occurring 1 September 2028 (unless
the options lapse earlier in accordance with the terms). The fair value of the services received in return for share options
granted is based on the fair value of share options granted, measured using the Binomial approximation model.
On 7 December 2023, 1,000,000 unquoted options over unissued shares in Servcorp Limited were issued to the CEO. The
options expire on 1 September 2028 with vesting conditions of cumulative EPS of 10% per annum over the three financial
years ending 30 June 2026 and continual service until 1 September 2026 (vesting date). The contractual life of the options
is 4 years and 8 months, with the last exercise date occurring 1 September 2028 (unless the options lapse earlier in
accordance with the terms). The fair value of services received in return for share options granted is based on the fair
value of share options granted, measured using Binomial approximation model.
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
23
Equity settled employee benefits reserve (continued)
Options over unissued ordinary shares in Servcorp Limited, cancelled due to the optionholders ceasing to be an employee
of Servcorp Limited, are as follows:
22 May 2024
18,750 options expiring on 18 September 2025
The movements in the equity settled employee benefits reserve are as follows:
2024
$ 000
2023
$ 000
Balance 1 July
938
832
Total movement taken to reserve
662
106
Balance 30 June
1,600
938
The Consolidated Entity recognised $0.7 million (2023: $0.1 million) as a share based payment expense for the year
ended 30 June 2024. These costs have been included in administrative expenses.
Recognition and measurement
The Board may grant options to eligible executives in accordance with the Servcorp Employee Incentive Plan. These
equity settled share based payments are non-market based.
Equity settled share based payments with employees are measured at the fair value of the equity instrument at the grant
date. Fair value is measured by use of a Black Scholes model. The expected life used in the model has been adjusted,
based on management’s best estimate for the effects of non-transferability, exercise restrictions, and behavioural
considerations.
The fair value determined at the grant date of the equity settled share based payments is expensed on a straight line basis
over the vesting period, based on the Company's estimate of equity instruments that will eventually vest.
At each reporting date, the Company revises its estimate of the number of equity instruments that are expected to vest.
The impact of the revision of the original estimates, if any, is recognised in profit or loss, with a corresponding adjustment
to the equity settled employee benefits reserve.
24
Distributions
Recognised distributions
Ordinary distributions paid/payable and distribution per share:
Cents per
share
Total
amount $
'000
Date of payment
Tax rate for
franking
credits
Percentage
franked
2024
Final
Fully paid ordinary shares
12.00
11,618
5 October 2023
%
30
%
20
Interim
Fully paid ordinary shares
12.00
11,810
4 April 2024
%
30
%
20
2023
Final
Fully paid ordinary shares
10.00
9,682
6 October 2022
%
30
%
-
Interim
Fully paid ordinary shares
10.00
9,682
5 April 2023
%
30
%
-
Unrecognised amounts
Since the end of the financial year, the Directors have declared the following dividend:
Final
Fully paid ordinary shares
13.00
12,795
2 October 2024
%
30
%
20
In determining the level of future dividends, the Directors will seek to balance growth objectives and rewarding
shareholders with income. This policy is subject to the cash flow requirements of the Consolidated Entity and its
investment in new opportunities aimed at growing earnings. The Directors cannot give any assurances concerning the
extent of future dividends, or the franking of such dividends, as they are dependent on future profits, the financial and
taxation position of the Company and the impact of taxation legislation.
$
amount
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
84
85
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
24
Distributions (continued)
Dividend franking account
2024
$ 000
2023
$ 000
30% franking credit available
551
1,129
The above available balance is based on the dividend franking account at year-end adjusted for:
franking debits that will arise from the payment of dividends recognised as a liability at the reporting date; and
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date;
The tax rate at which paid dividends have been franked at 30 June 2024 is 30% (2023: 30%). Dividends declared and
unpaid will be franked at the rate of 30% as at 30 June 2024 (2023: 30%).
25
Capital structure and risks
This section outlines the market, credit and liquidity risks that the Consolidated Entity is exposed to and how it manages
these risks. Capital comprises shareholders’ equity and financing arrangements.
Capital management
The Company’s Audit and Risk Committee oversees the establishment of the capital and financial risk management
system, which identifies, evaluates, classifies, monitors, qualifies and reports significant risks to the Board of Directors. All
controlled entities in the Consolidated Entity apply this risk management system to manage their own risks.
The Company's objective when managing capital is to ensure that entities within the Consolidated Entity will be able to
continue as a going concern while maximising the return to stakeholders.
The Company’s overall strategy remains unchanged from the prior year. The capital structure of the Consolidated Entity
consists of equity attributable to equity holders of the parent company issued capital, reserves and retained earnings.
The Consolidated Entity operates globally, primarily through subsidiary companies established in the markets in which the
Consolidated Entity operates. Operating cash flows are used to maintain and expand the Consolidated Entity, as well as to
make routine outflows of tax and dividend payments.
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
25
Capital structure and risks (continued)
Financing facilities and liquidity
The Consolidated Entity has access to financing facilities.
Bank guarantees have been issued to secure rental bonds over premises. Details are in note 33.
Payroll and other facilities have been established to facilitate the encashment of cheques, and to accommodate direct
entry payroll and direct entry supplier payments.
The Consolidated Entity has access to the following finance facilities:
2024
$ 000
2023
$ 000
Total facilities available
Bank guarantees
30,000
30,000
Bank overdrafts and loans
583
559
Payroll/other facilities
4,150
4,150
34,733
34,709
Facilities utilised at reporting date
Bank guarantees
28,501
26,598
Bank overdrafts and loans
50
50
28,551
26,648
Facilities not utilised at reporting date
Bank guarantees
1,499
3,402
Bank overdrafts and loans
533
509
Payroll/other facilities
4,150
4,150
6,182
8,061
26
Financial risk management
The Consolidated Entity activities expose it primarily to the financial risks of changes in foreign currency exchange rates.
The Consolidated Entity enters into forward foreign currency exchange contracts to economically hedge anticipated
transactions.
(a)
Financial risk management objectives
The financial risks that result from the Consolidated Entity’s activities are credit risk and market risk (interest rate risk and
foreign exchange risk).
The Consolidated Entity’s corporate treasury function provides services to the business, co-ordinates access to domestic
and international financial markets, and manages the financial risks relating to the operations of the Consolidated Entity.
The Consolidated Entity does not apply hedge accounting. The use of financial derivatives is governed by policies
approved by the Board of Directors.
The Consolidated Entity’s corporate treasury function reports to the Company’s Audit and Risk Committee, an independent
body that monitors risks and policies implemented to mitigate risk exposures.
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
86
87
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
26
Financial risk management (continued)
(b)
Market risk
The Consolidated Entity’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates.
The Consolidated Entity enters into forward foreign currency exchange contracts to economically hedge anticipated
transactions.
(i) Foreign exchange risk
The Consolidated Entity operates internationally and is exposed to foreign exchange risk arising from various
currency exposures.
The Consolidated Entity’s foreign exchange risk arises primarily from:
risk of fluctuations in foreign exchange rates to the Australian dollar (the functional and presentation currency);
firm commitments of receipts and payments settled in foreign currencies or with prices dependent
on foreign currencies;
investments in foreign operations; and
loans and trading accounts to foreign operations.
Foreign currency assets and liabilities
For accounting purposes, net investment in foreign operations are revalued at the end of each reporting year with the
movement reflected as a movement in the foreign currency translation reserve. Borrowings and forward exchange
contracts not forming part of the net investment in foreign operations are revalued at the end of each reporting year with
the fair value movement reflected in the Consolidated Statement of Profit or Loss and Other Comprehensive Income as
exchange gains or losses.
Foreign currency sensitivity analysis
The following table summarises the material sensitivity of financial instruments held at reporting date to movements in the
exchange rate of the Australian dollar to foreign exchange rates, with all other variables held constant. The sensitivity is
based on reasonably possible changes, over a financial year, using the observed range of actual historical rates for the
preceding five-year period.
Sensitivity analysis – foreign exchange risk and interest rate risk
Impact on profit
Impact on equity
Pre-tax gain/(loss)
2024
$ 000
2023
$ 000
2024
$ 000
2023
$ 000
AUD/USD +5% (2023: +6%)
(2,518)
(676)
(676)
2,842
AUD/USD - 5% (2023: -6%)
2,925
596
596
(3,148)
AUD/AED +6% (2023: +7%)
161
1,151
1,151
72
AUD/AED -6% (2023: +7%)
(169)
(1,326)
(1,326)
(81)
AUD/JPY +8% (2023: +7%)
(4,297)
(2,088)
(2,088)
3,030
AUD/JPY -8% (2023: -7%)
5,080
2,382
2,382
(3,434)
AUD/EUR +3% (2023 +4%)
(128)
(54)
(54)
151
AUD/EUR -3% (2023: -4%)
137
58
58
(87)
AUD/HKD +5% (2023: +5%)
(82)
379
379
-
AUD/HKD -5% (2023: -5%)
91
(421)
(421)
-
AUD/RMB +2% (2023: +2%)
(136)
(203)
(203)
(276)
AUD/RMB -2% (2023: -2%)
140
213
213
293
AUD/SGD +4% (2023: +5%)
1,395
(530)
(530)
-
AUD/SGD -4% (2023: -5%)
(1,520)
584
584
-
AUD/QAR +6% (2023: +7%)
(298)
(157)
(157)
-
AUD/QAR -6% (2023: -7%)
335
181
181
-
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
26
Financial risk management (continued)
Forward foreign currency exchange contracts
The following table sets out the details of forward foreign currency exchange contracts in place as at 30 June 2024. These
are level 2 fair value measurements derived from inputs as defined in note 27.
Average exchange rate
Foreign currency
Fair value movement
2024
2023
2024
million
2023
million
2024
$ 000
2023
$ 000
Outstanding contracts
Sell USD
No later than one year
0.68
0.69
3
1
(54)
(39)
Later than one year and not later
than five years
0.65
0.67
4
4
110
(36)
(ii) Interest rate risk
Interest rate risk on cash or short term deposits is not considered to be a material risk due to the short-term nature of
these financial instruments.
The following table summarises the sensitivity of the financial instruments held at reporting date, following a movement to
interest rates, with all other variables held constant. The sensitivity is based on reasonably possible changes over a
financial year, using the observed range of actual historical rates. Nil impact on equity.
Impact on profit
2024
$ 000
2023
$ 000
Pre-tax gain/(loss)
AUD balances
125 basis point increase
138
435
125 basis point decrease
(137)
(218)
Other balances
125 basis point increase
22
23
125 basis point decrease
(16)
(15)
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
88
89
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
26
Financial risk management (continued)
(c)
Liquidity risk
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who have built an appropriate
liquidity risk management framework for the management of short, medium and long term funding. The Consolidated
Entity manages liquidity risk by maintaining adequate reserves, banking facilities and borrowing facilities.
The following table details the Consolidated Entity’s expected maturity for its financial assets. The table below was drawn
up based on the undiscounted contractual maturities of the financial assets including interest that will be earned.
2024
Less than
1 month
$ 000
1 to 3
months
$ 000
3 months
to 1 year
$ 000
1 to 5
years
$ 000
5 + years
$ 000
Total
$ 000
Weighted
average
effective
interest
rate %
Non-interest bearing
Receivables
35,852
-
-
-
-
35,852
Lease deposits
416
201
3,959
29,345
1,365
35,286
Forward foreign currency
exchange contracts
-
-
3,672
5,350
-
9,022
Listed ordinary shares
7,655
-
-
-
-
7,655
Interest bearing
Cash and cash equivalents
89,401
-
-
-
-
89,401
1.91
Bank short term deposits
11,529
-
1,205
-
-
12,734
0.48
Variable rate securities
4,737
-
-
-
-
4,737
3.44
149,590
201
8,836
34,695
1,365
194,687
2023
Less than
1 month
$ 000
1 to 3
months
$ 000
3 months
to 1 year
$ 000
1 to 5
years
$ 000
5 + years
$ 000
Total
$ 000
Weighted
average
effective
interest
rate %
Non-interest bearing
Receivables
27,778
-
-
-
-
27,778
Lease deposits
45
1,584
3,916
22,153
8,536
36,234
Forward foreign currency
exchange contracts
-
-
1,449
5,944
-
7,393
Listed ordinary shares
6,393
-
-
-
-
6,393
Interest bearing
Cash and cash equivalents
69,481
-
-
-
-
69,481
3.53
Bank short term deposits
13,324
22,527
32
-
-
35,883
2.14
Variable rate securities
4,597
-
-
-
-
4,597
3.76
121,618
24,111
5,397
28,097
8,536
187,759
26
Financial risk management (continued)
(c)
Liquidity risk (continued)
The following table details the Consolidated Entity’s remaining contractual maturity for its financial liabilities. The table is
based on the earliest date on which undiscounted cash flows of financial liabilities are contractually to be paid. The table
includes both principal and interest cash flows.
2024
Less than
1 month
$ 000
1 to 3
months
$ 000
3 months
to 1 year
$ 000
1 to 5
years
$ 000
5 + years
$ 000
Total
$ 000
Weighted
average
effective
interest
rate %
Non-interest bearing
Payables
9,788
25,328
-
-
-
35,116
Forward foreign currency
exchange contracts
-
-
3,748
5,247
-
8,995
Security deposits
-
-
30,502
-
-
30,502
Interest bearing
Lease liability
11,772
38,198
61,924
236,755
60,154
408,803
3.63
21,560
63,526
96,174
242,002
60,154
483,416
2023
Less than
1 month
$ 000
1 to 3
months
$ 000
3 months
to 1 year
$ 000
1 to 5
years
$ 000
5 + years
$ 000
Total
$ 000
Weighted
average
effective
interest
rate %
Non-interest bearing
Payables
5,427
18,911
-
-
-
24,338
Forward foreign currency
exchange contracts
-
-
1,501
6,005
-
7,506
Security deposits
-
-
27,160
-
-
27,160
Interest bearing
Lease liability
13,229
16,853
84,179
222,524
70,199
406,984
3.33
18,656
35,764
112,840
228,529
70,199
465,988
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
90
91
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
26
Financial risk management (continued)
(d) Credit risk
Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial loss to the
Consolidated Entity. The Consolidated Entity has adopted a policy of only dealing with creditworthy counterparties and
obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults.
Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas.
Ongoing credit evaluation is performed on the financial condition of accounts receivable. The Consolidated Entity does not
have any significant credit risk exposure to any single counterparty or any group of any counterparties having similar
characteristics. Security deposits are received from customers when entering into a contract which reduces the credit risk.
Security deposits held are disclosed in the Consolidated Statement of Financial Position as Other financial liabilities.
Credit risk on cash and short-term fixed deposits is limited because counterparties are banks with high credit ratings
assigned by international credit rating agencies. These liquid funds are managed centrally by the Company’s senior
management on a daily basis.
27
Fair value measurement of financial instruments
Fair value hierarchy
Servcorp measures various financial assets and liabilities at fair value which, in some cases, may be subjective and depend
on the inputs used in the calculations. The different levels of measurement are described below:
Level 1
Unadjusted quoted prices in active markets for identical assets or liabilities that the entity can
access at the measurement date.
Level 2
Inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly.
Level 3
Unobservable inputs for the asset or liability.
The Board of Directors consider that the carrying amount of financial assets and financial liabilities approximate their fair
value other than in respect of the Company’s investment in subsidiaries.
Financial instruments that are measured subsequent to initial recognition at fair value are grouped into Levels 1 to 3 based
on the degree to which fair value is observable:
The table below shows the assigned level for each asset and liability held at fair value by the Consolidated Entity:
30 June 2024
Level 1
$ '000
Level 2
$ '000
Level 3
$ '000
Total
$ '000
Financial assets
Bank hybrid variable rate securities
4,737
-
-
4,737
Listed ordinary shares
7,655
-
-
7,655
Forward foreign currency exchange contracts
-
1,473
-
1,473
30 June 2023
Level 1
$ '000
Level 2
$ '000
Level 3
$ '000
Total
$ '000
Financial assets
Bank hybrid variable rate securities
4,597
-
-
4,597
Listed ordinary shares
6,393
-
-
6,393
Forward foreign currency exchange contracts
-
566
-
566
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
27
Fair value measurement of financial instruments (continued)
Fair value hierarchy (continued)
There were no transfers between the fair value hierarchy levels during the year. The following table gives information about
how the fair values of these financial assets are determined (in particular, the valuation technique(s) and inputs used).
Asset category
Fair value
2024
$ 000
Fair value
2023
$ 000
Fair value
hierarchy
Valuation technique & key
inputs
Bank hybrid variable rate securities
4,737
4,597
Level 1 Quoted prices in an active market
Listed ordinary shares
7,655
6,393
Level 1 Quoted prices in an active market
Forward foreign currency exchange contracts
1,473
566
Level 2 Future cash flows are estimated
based on observable forward
exchange rates
28
Organisational structure
This section explains how the Consolidated Entity is structured, and disclosures for the parent entity.
Subsidiary entities
The Consolidated Financial Statements of Servcorp incorporate the assets, liabilities and results of all controlled entities.
Controlled entities are all entities over which the Consolidated Entity has power to direct the activities of the entity and an
exposure to and ability to influence its variable returns from its involvement with the entity.
An entity, including a structured entity, is considered a subsidiary when we determine that the Company has control over
the entity. Control exists when the Consolidated Entity is exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through its power over the entity. The Consolidated Entity
assesses power by examining existing rights that give the Company the current ability to direct the relevant activities of the
entity. The effect of all transactions between entities in the Consolidated Entity have been eliminated on consolidation.
Controlled entities are fully consolidated from the date control is obtained until the date that control ceases. Inter-entity
transactions and balances are eliminated.
Name of entity
Country of
incorporation
Ownership
interest
2024
%
Ownership
interest
2023
%
Parent entity
Servcorp Limited
Australia
Controlled entities
Servcorp Australian Holdings Pty Ltd
Australia
100
100
Servcorp Offshore Holdings Pty Ltd
Australia
100
100
Servcorp Exchange Square Pty Ltd
Australia
100
100
Servcorp Air Office Pty Ltd
Australia
100
100
Servcorp (North Ryde) Pty Ltd
Australia
100
100
Servcorp Smart Office Pty Ltd
Australia
100
100
Servcorp Smart Homes Pty Ltd
Australia
100
100
Servcorp Business Service (Beijing) Pty Ltd
Australia
100
100
Servcorp Virtual Pty Ltd
Australia
100
100
Servcorp Holdings Pty Ltd
Australia
100
100
Servcorp Administration Pty Ltd
Australia
100
100
Servcorp Adelaide Pty Ltd
Australia
100
100
Servcorp Barangaroo Pty Ltd
Australia
100
100
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
92
93
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
28
Organisational structure (continued)
Subsidiary entities (continued)
Name of entity
Country of
incorporation
Ownership
interest
2024
%
Ownership
interest
2023
%
Servcorp Brisbane Pty Ltd
Australia
100
100
Servcorp Mount Street Pty Ltd
Australia
100
100
Servcorp Gateway Pty Ltd
Australia
100
100
Servcorp Chifley 29 Pty Ltd
Australia
100
100
Servcorp Communications Pty Ltd
Australia
100
100
Servcorp IT Pty Ltd
Australia
100
100
Servcorp Melbourne Virtual Pty Ltd
Australia
100
100
Servcorp MLC Centre Pty Ltd
Australia
100
100
Servcorp Melbourne 27 Pty Ltd
Australia
100
100
Servcorp Sydney Virtual Pty Ltd
Australia
100
100
Servcorp William Street Pty Ltd
Australia
100
100
Servcorp Melbourne 19 Pty Ltd (formerly Servcorp
Melbourne 18 Pty Ltd)
Australia
100
100
Servcorp Perth Pty Ltd
Australia
100
100
Servcorp Brisbane Riverside Pty Ltd
Australia
100
100
Servcorp Market Street Pty Ltd
Australia
100
100
Office Squared Pty Ltd
Australia
100
100
Servcorp WA Pty Ltd
Australia
100
100
Servcorp Parramatta Pty Ltd
Australia
100
100
Servcorp Sydney 56 Pty Ltd
Australia
100
100
Servcorp Norwest Pty Ltd
Australia
100
100
Servcorp Level 12 Pty Ltd
Australia
100
100
Servcorp Western Australia Pty Ltd
Australia
100
100
Office Squared (Nexus) Pty Ltd
Australia
100
100
Servcorp SA 30 Pty Ltd
Australia
100
100
Servcorp City Square Pty Ltd
Australia
100
100
Servcorp North Sydney 32 Pty Ltd
Australia
100
100
Servcorp Docklands Pty Ltd
Australia
100
100
Servcorp Sydney 22 Pty Ltd
Australia
100
100
Servcorp Hobart Pty Ltd
Australia
100
100
Servcorp Brisbane 400 Pty Ltd
Australia
100
100
Servcorp Southbank Pty Ltd
Australia
100
100
Office Squared (Atlas) Pty Ltd
Australia
100
100
Gnee Pty Ltd
Australia
100
100
Servcorp Enterprise Pty Ltd
Australia
100
100
Servcorp Realm Pty Ltd
Australia
100
100
Servcorp Nishi Canberra Pty Ltd
Australia
100
100
Beechreef (New Zealand) Limited
New Zealand
100
100
Servcorp New Zealand Limited
New Zealand
100
100
Company Headquarters Limited
New Zealand
100
100
Servcorp Wellington Limited
New Zealand
100
100
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
28
Organisational structure (continued)
Subsidiary entities (continued)
Name of entity
Country of
incorporation
Ownership
interest
2024
%
Ownership
interest
2023
%
Servcorp Queen Street Limited
New Zealand
100
100
Servcorp Quay Street Limited
New Zealand
100
100
Servcorp BFH W.L.L
Bahrain
100
100
Servcorp Brussels Sprl
Belgium
100
100
Servcorp Business Service (Shanghai) Co. Ltd
China
100
100
Servcorp Business Service (Beijing) Co., Ltd
China
100
100
Beijing Servcorp Sihui Business Service Co., Ltd
China
100
100
Guangzhou Servcorp Business Service Co., Ltd
China
100
100
Chengdu Servcorp (OAC) Business Service Co., Ltd
China
100
100
Servcorp Hong Kong Limited
China
100
100
Servcorp HK Central Limited (in liquidation)
China
100
100
Shanghai Servcorp Business Service Co., Ltd
China
100
100
Servcorp Paris SARL
France
100
100
Servcorp Edouard VII SARL
France
100
100
Servcorp Berlin GmbH
Germany
100
100
Servcorp Japan KK
Japan
100
100
Servcorp Tokyo KK
Japan
100
100
Servcorp Shinagawa KK
Japan
100
100
Servcorp Co-working GK
Japan
100
100
Servcorp Phoenicia SAL
Lebanon
100
100
Servcorp Beirut LLC
Lebanon
100
-
Amalthea Nominees (Malaysia) Sdn Bhd
Malaysia
100
100
Office Squared Malaysia Sdn Bhd
Malaysia
100
100
SRV KL Sdn Bhd
Malaysia
100
100
SRV Central Sdn Bhd
Malaysia
100
100
Servcorp Manila, Inc. (in liquidation)
Philippines
100
100
Servcorp Bonifacio, Inc.
Philippines
100
100
Branches of Servcorp Square Pte Ltd
Saudi Arabia
100
100
Office Services Company
Saudi Arabia
97.5
-
Regional Headquarters Company
Saudi Arabia
100
-
Servcorp Serviced Offices Pte. Ltd
Singapore
100
100
Servcorp Franchising Pte. Ltd (struck off 8 January 2024)
Singapore
-
100
Servcorp Battery Road Pte. Ltd
Singapore
100
100
Servcorp Marina Pte. Ltd
Singapore
100
100
Servcorp Singapore Holdings Pte. Ltd
Singapore
100
100
Servcorp Hottdesk Singapore Pte. Ltd (struck off 8 January
2024)
Singapore
-
100
Servcorp Metropolis Pte. Ltd
Singapore
100
100
Servcorp Square Pte. Ltd
Singapore
100
100
Servcorp SR Pte. Ltd
Singapore
100
100
Servcorp Co., Ltd
Thailand
100
100
Servcorp Thai Holdings Ltd
Thailand
100
100
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
94
95
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
28
Organisational structure (continued)
Subsidiary entities (continued)
Name of entity
Country of
incorporation
Ownership
interest
2024
%
Ownership
interest
2023
%
Headquarters Co., Ltd
Thailand
100
100
Servcorp Is Merkezi Isletmeciligi Limited Sirketi
Turkey
100
100
Servcorp Sixteen Paylasimli Ofis Isletmeciligi Limited Sirketi
Turkey
100
100
Servcorp LLC
UAE
100
49
Servcorp Administration Services LLC
UAE
100
49
Servcorp Level 54 DMCC
UAE
100
100
Servcorp EMEIA Holdings Ltd
UAE
100
100
Servcorp DIFC Holdings Ltd
UAE
100
-
Servcorp UK Limited
UK
100
100
Servcorp Leadenhall Limited
UK
100
100
Servcorp Mayfair Limited
UK
100
100
Servcorp Europe Holdings Limited
UK
100
100
Servcorp Middle East Holdings Limited
UK
100
-
Servcorp US Holdings, Inc
USA
100
100
Servcorp America LLC
USA
100
100
Servcorp New York LLC
USA
100
100
Servcorp Washington LLC
USA
100
100
Servcorp Houston LLC
USA
100
100
Servcorp State Street LLC
USA
100
100
Servcorp Fulton Street LLC
USA
100
100
Servcorp West Lake LLC
USA
100
100
Servcorp Battery Park LLC
USA
100
100
Servcorp Madison LLC
USA
100
100
Servcorp Manhattan LLC
USA
100
100
Servcorp Philadelphia LLC (in liquidation)
USA
100
100
Servcorp Dallas LLC (in liquidation)
USA
100
100
The following subsidiaries are not wholly owned by the Consolidated Entity. However, the Consolidated Entity still controls
these subsidiaries because it has power to direct the activities of the entity and an exposure to and ability to influence its
variable returns from its involvement with the entity. These entities are fully consolidated from the date control is obtained
until the date that control ceases. Inter-entity transactions and balances are eliminated. The table below sets out the
Company’s ownership interest:
Name of subsidiary
Country of
incorporation
& tax
residency
Ownership
interest
2024
%
Ownership
interest
2023
%
Servcorp Aswad Real Estate Company WLL
Kuwait
49
49
Servcorp Qatar LLC
Qatar
49
49
A Company in the Consolidated Entity exercises control over Servcorp Aswad Real Estate Company WLL and Servcorp
Qatar LLC, despite owning 49% of the issued capital. Arrangements are in place that entitle the Company or its controlled
entities to the benefits and risks of ownership notwithstanding that the majority shareholding may be vested in another
party.
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
28
Organisational structure (continued)
Name of joint venture
Country of
incorporation
Ownership
interest
2024
%
Ownership
interest
2023
%
Etihad Towers Service Offices LLC
UAE
49
49
A subsidiary in the Consolidated Entity entered into a joint venture with Emirates Consortium LLC. The joint venture is
accounted for using the equity method in the Consolidated Financial Statements. The investment in the joint venture has
been fully impaired in prior years.
The tax residency of each entity which is included in the Consolidated Financial Statements is the same as the country of
incorporation. Refer to the Consolidated Entity Disclosure Statement for further details.
29
Key management personnel remuneration
Compensation of key management personnel
The key management personnel of the Company are the Directors and Executives of the Consolidated Entity who have the
authority and responsibility for planning, directing and controlling the activities of the Company, either directly or indirectly.
Key management personnel compensation is as follows.
2024
$ 000
2023
$ 000
Long term and short term employee benefits
1,392
1,321
Post-employment benefits
124
116
Share-based payments
93
216
1,609
1,653
Dividends totaling $23.4 million have been paid during the year (2023: $19.4 million), which include amounts paid to
Directors and other key management personnel.
Details of key management personnel
The Directors of the Company at any time during or since the end of the financial year 30 June 2024 are:
Non-executive Directors
The Hon. Mark Vaile AO
Chair and Non-Executive Director
Appointed June 2011
Wallis Graham
Non-Executive Director
Appointed October 2017
Tony McGrath
Non-Executive Director
Appointed August 2019
Executive Director
Alf Moufarrige AO
Chief Executive Officer
Appointed August 1999
Other Group-level executive
David Hunt
Chief Financial Officer & Head of SEA
Appointed April 2022
Key management personnel related party transactions
Several key management personnel, or their related parties, hold positions in other entities that result in them having control
or significant influence over the financial or operating policies of those entities. A number of these entities transacted in
conjunction with the Consolidated Entity in the reporting year or prior year. The terms and conditions of the transactions with
key management personnel and their related parties were no more favourable than those available, or which might
reasonably be expected to be available, on similar transactions to non-key management personnel related entities on an
arm’s length basis. For further details and information related to key management personnel remuneration, please refer to
the Remuneration Report.
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
96
97
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
29
Key management personnel remuneration (continued)
Key management personnel related party transactions (continued)
From time to time Directors of the Company and its controlled entities, or their Director-related entities, may purchase
services from or provide services to the Consolidated Entity. These purchases or sales are on the same terms and
conditions as those entered into by other employees, suppliers or customers of the Consolidated Entity and are trivial or
domestic in nature. All transactions with Director-related entities are disclosed to the Board and reviewed to ensure they
bring a benefit to the Consolidated Entity.
Related parties entered into the following transactions with the Consolidated Entity.
Mr. A G Moufarrige has an interest in and is a Director of Tekfon Pty Ltd (Tekfon). Servcorp has a lease on arm’s length
terms with Tekfon for the use of Tekfon’s premises for storage. Servcorp utilises off-site storage facilities in many of its
global locations, for storage of office furniture and retention of records. Tekfon’s premises are in a suburb of Sydney, and
have been utilised by Servcorp’s Sydney locations and head office for storage since before the Consolidated Entity’s IPO in
1999. Research confirms that the lease is at arm’s length terms for similar facilities in the area. The Board, with Mr. A G
Moufarrige absent, reviews the lease with Tekfon on an annual basis to ensure that the terms are at market rate or better.
A relative of Mr. A G Moufarrige has an interest in Enideb Pty Ltd (Enideb). Mr. A G Moufarrige has no interest in the affairs
of Enideb. Until June 2023, Enideb operated the Servcorp franchise in Canberra, on arm’s length terms. The Canberra
franchise had been operating for more than 29 years, and the Canberra locations brought a benefit to Servcorp’s operations.
The Board reviewed the terms of the franchise agreement on a regular basis to ensure that it was conducted on proper
commercial terms, consistent with any other franchise operations. Effective 3 July 2023, companies within the Consolidated
Entity acquired the serviced office businesses carried on by Enideb Pty Ltd. The franchise agreement was terminated upon
acquisition.
Relatives of Mr. A G Moufarrige have an interest in Refrigerated Display Lighting Pty Ltd (RDL) (formely Nualight AUSNZ Pty
Ltd), Light Energy Australia Pty Ltd (LEA) and Ility Pty Ltd (Ility), who are clients of Servcorp in Sydney, Melbourne, Adelaide,
New York, London and China. Mr A G Moufarrige has no interest in the affairs of RDL or LEA, and owns 5% of the issued
shares in Ility.
On 17 May 2024, Servcorp entered into a Master Access and Service Agreement with Ility. Ility is contracted to develop a
tenant-facing web platform accessable to Servcorp tenants.
Mr. A G Moufarrige has an interest in and is a Director of Sovori Pty Ltd (Sovori). Mr. A G Moufarrige has personal credit
cards which, in the main, are used to pay for Servcorp expenses during his business travels. For convenience, these are
often paid by Servcorp whilst he travels and they are then reconciled upon his return and personal expenses are repaid, on a
monthly basis, to Servcorp by Sovori.
Servcorp has in excess of 55,000 clients globally. From time to time a client will be an entity which is defined as a Director
related party, even though the Director has had no involvement in the decision to become a client of Servcorp. The following
disclosures fall into this category.
Mrs. W Graham has an involvement with ECP Management, LP (ECP), a US-based private equity firm. ECP is a client of
Servcorp in Sydney. Mrs. W Graham did not have any involvement in negotiation of the arrangement with ECP, which are at
arm's length terms.
The terms and conditions of the transactions with Directors and their Director-related parties were no more favourable than
those available, or which might reasonably be expected to be available, on similar transactions to non-Director-related
parties on an arm’s length basis.
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
29
Key management personnel remuneration (continued)
Key management personnel related party transactions (continued)
Director
Director related entity
Transaction
2024
$
2023
$
A G Moufarrige
Tekfon Pty Ltd
Premises rental
109,480
103,272
Enideb Pty Ltd
Franchisee
-
513,038
Sovori Pty Ltd
Reimbursements
231,974
299,389
Refrigerated Display Lighting Pty Ltd
and Light Energy Australia Pty Ltd
Client
2,409
1,365
Ility Pty Ltd
Client
34,125
95,231
Ility Pty Ltd
Supplier
110,000
-
W Graham
ECP Management, LP
Client
3,100
3,067
Amounts receivable from and payable to Directors and their Director-related entities at balance sheet date arising from
these transactions were as follows:
Current receivables/(payable)
2024
$
2023
$
Enideb Pty Ltd
-
11,906
Refrigerated Display Lighting Pty Ltd
508
-
Ility Pty Ltd
2,614
9,109
ECP Management, LP
143
262
30
Auditors' remuneration
KPMG and related network firms
2024
$
2023
$
Core audit fee:
KPMG Australia
999,213
896,844
KPMG Overseas firms
885,141
1,093,648
Total audit fees
1,884,354
1,990,492
KPMG overseas firms - other audit services
250,920
-
KPMG overseas firms - other advisory services
23,776
7,541
2,159,050
1,998,033
31
Contingencies
In the opinion of the Directors, the Company did not have any contingencies at 30 June 2024 (30 June 2023: None).
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
98
99
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
32
Events occurring after the reporting date
The Financial Report was authorised for issue on 22 August 2024 by the Board of Directors.
On 22 August 2024 the Directors declared a final dividend of 13.0 cents per share franked to 20%, payable on 2 October
2024.
No other matters or circumstances have arisen since the end of the financial year which significantly affected or could
significantly affect the operations of the Consolidated Entity, the results of those operations, or the state of affairs of the
Consolidated Entity in future financial years.
33
Parent entity
The financial information for the parent entity, Servcorp Limited, is prepared on the same basis as the Consolidated
Financial Statements.
2024
$ 000
2023
$ 000
Statement of Financial Position
Assets
Current assets
134,803
127,669
Non-current assets
32,768
32,754
Total Assets
167,571
160,423
Liabilities
Current liabilities
1,707
95
Non-current liabilities
-
1,458
Total Liabilities
1,707
1,553
Net assets
165,864
158,870
Equity
Contributed equity
155,567
151,594
Retained earnings
15,030
12,009
Share buy back reserve
(4,733)
(4,733)
Total Equity
165,864
158,870
Statement of Profit or Loss and Other
Comprehensive Income
Total profit or loss for the year
33,779
13,806
Total comprehensive income
33,779
13,806
As at 30 June 2024:
Servcorp Limited has a Corporate Guarantee and Indemnity with the Australian and New Zealand Banking Group
Limited, pursuant to which the bank agreed to make available to the Consolidated Entity a $30 million interchangeable
facility for general corporate purposes. The liability under the deed by and between the Australian and New Zealand
companies is limited to $52 million. Refer to note 25 for details;
there were no contingent liabilities of the parent entity;
there were no commitments for the acquisition of property, plant and equipment by the parent entity.
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
34
Reconciliation of profit to operating cash flow
Reconciliation of result for the year to cashflows from operating activities
For the purpose of presentation in the Consolidated Statement of Cash Flows, cash and cash equivalents includes cash at
bank and short term deposits at call.
2024
$ 000
2023
$ 000
Profit for the year
39,038
11,067
Non-cash flows in profit:
(Decrease)/increase in provisions
(287)
3,243
Depreciation and amortisation of non-current assets
19,334
19,952
Share of profits of joint venture
783
556
Impairment of non-current assets
2,470
15,061
Gain on sales of financial assets
(182)
(70)
Loss on disposal of non-current assets
815
789
Amortisation of right of use assets
95,200
101,943
(Increase)/decrease in current tax asset
(4,009)
5,596
(Increase) in deferred tax balances
(1,910)
(2,509)
Unrealised foreign exchange gain
(595)
2,571
Share based payment expense
662
106
Changes in assets and liabilities:
Decrease/(increase) in prepayments
1,713
(2,476)
(Increase in trade debtors and other receivables
(8,593)
(7,820)
Decrease/(increase) in current and non-current assets
1,041
(941)
Increase/(decrease) in client security deposits
3,342
(128)
Increase in accounts payable
16,969
8,591
Cashflows from operations
165,791
155,531
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
100
101
CONSOLIDATED ENTITY
DISCLOSURE STATEMENT
ENTITY NAME
ENTITY TYPE
PLACE
INCORP-
ORATED OR
FORMED
% OF ISSUED
SHARE
CAPITAL HELD
DIRECTLY OR
INDIRECTLY BY
THE PUBLIC
COMPANY
AUSTRALIAN
OR FOREIGN
TAX RESIDENT
JURIS-
DICTION
FOR
FOREIGN
TAX
RESIDENT
Servcorp Limited (Public Company)
Body Corporate
Australia
Australian
N/A
Servcorp Australian Holdings Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Offshore Holdings Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Exchange Square Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Air Office Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp (North Ryde) Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Smart Office Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Smart Homes Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Business Service (Beijing)
Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Virtual Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Holdings Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Administration Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Adelaide Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Barangaroo Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Brisbane Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Mount Street Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Gateway Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Chifley 29 Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Communications Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp IT Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Melbourne Virtual Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp MLC Centre Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Melbourne 27 Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Sydney Virtual Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp William Street Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Melbourne 19 Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Perth Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Brisbane Riverside Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Market Street Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Office Squared Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp WA Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Parramatta Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Sydney 56 Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Norwest Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Level 12 Pty Ltd
Body Corporate
Australia
100
Australian
N/A
CONSOLIDATED ENTITY
DISCLOSURE STATEMENT
ENTITY NAME
ENTITY TYPE
PLACE
INCORP-
ORATED OR
FORMED
% OF ISSUED
SHARE
CAPITAL HELD
DIRECTLY OR
INDIRECTLY BY
THE PUBLIC
COMPANY
AUSTRALIAN
OR FOREIGN
TAX RESIDENT
JURIS-
DICTION
FOR
FOREIGN
TAX
RESIDENT
Servcorp Western Australia Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Office Squared (Nexus) Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp SA 30 Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp City Square Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp North Sydney 32 Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Docklands Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Sydney 22 Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Hobart Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Brisbane 400 Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Southbank Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Office Squared (Atlas) Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Gnee Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Enterprise Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Realm Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Servcorp Nishi Canberra Pty Ltd
Body Corporate
Australia
100
Australian
N/A
Beechreef (New Zealand) Limited
Body Corporate
New Zealand
100
Foreign
New
Zealand
Servcorp New Zealand Limited
Body Corporate
New Zealand
100
Foreign
New
Zealand
Company Headquarters Limited
Body Corporate
New Zealand
100
Foreign
New
Zealand
Servcorp Wellington Limited
Body Corporate
New Zealand
100
Foreign
New
Zealand
Servcorp Queen Street Limited
Body Corporate
New Zealand
100
Foreign
New
Zealand
Servcorp Quay Street Limited
Body Corporate
New Zealand
100
Foreign
New
Zealand
Servcorp BFH W.L.L
Body Corporate
Bahrain
100
Foreign
Bahrain
Servcorp Brussels Sprl
Body Corporate
Belgium
100
Foreign
Belgium
Servcorp Business Service
(Shanghai) Co. Ltd
Body Corporate
China
100
Foreign
China
Servcorp Business Service (Beijing)
Co., Ltd
Body Corporate
China
100
Foreign
China
Beijing Servcorp Sihui Business
Service Co., Ltd
Body Corporate
China
100
Foreign
China
Guangzhou Servcorp Business
Service Co., Ltd
Body Corporate
China
100
Foreign
China
Chengdu Servcorp (OAC) Business
Service Co., Ltd
Body Corporate
China
100
Foreign
China
Servcorp Hong Kong Limited
Body Corporate
China
100
Foreign
China
Servcorp HK Central Limited (in
liquidation)
Body Corporate
China
100
Foreign
China
Shanghai Servcorp Business
Service Co., Ltd
Body Corporate
China
100
Foreign
China
Servcorp Paris SARL
Body Corporate
France
100
Foreign
France
Servcorp Edouard VII SARL
Body Corporate
France
100
Foreign
France
Servcorp Berlin GmbH
Body Corporate
Germany
100
Foreign
Germany
Servcorp Japan KK
Body Corporate
Japan
100
Foreign
Japan
Servcorp Tokyo KK
Body Corporate
Japan
100
Foreign
Japan
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
102
103
CONSOLIDATED ENTITY
DISCLOSURE STATEMENT
ENTITY NAME
ENTITY TYPE
PLACE
INCORP-
ORATED OR
FORMED
% OF ISSUED
SHARE
CAPITAL HELD
DIRECTLY OR
INDIRECTLY BY
THE PUBLIC
COMPANY
AUSTRALIAN
OR FOREIGN
TAX RESIDENT
JURIS-
DICTION
FOR
FOREIGN
TAX
RESIDENT
Servcorp Shinagawa KK
Body Corporate
Japan
100
Foreign
Japan
Servcorp Co-working GK
Body Corporate
Japan
100
Foreign
Japan
Servcorp Aswad Real Estate
Company WLL
Body Corporate
Kuwait
49
Foreign
Kuwait
Servcorp Phoenicia SAL
Body Corporate
Lebanon
100
Foreign
Lebanon
Servcorp Beirut LLC
Body Corporate
Lebanon
100
Foreign
Lebanon
Amalthea Nominees (Malaysia) Sdn
Bhd
Body Corporate
Malaysia
100
Foreign
Malaysia
Office Squared Malaysia Sdn Bhd
Body Corporate
Malaysia
100
Foreign
Malaysia
SRV KL Sdn Bhd
Body Corporate
Malaysia
100
Foreign
Malaysia
SRV Central Sdn Bhd
Body Corporate
Malaysia
100
Foreign
Malaysia
Servcorp Manila, Inc. (in liquidation)
Body Corporate
Philippines
100
Foreign
Philippines
Servcorp Bonifacio, Inc.
Body Corporate
Philippines
100
Foreign
Philippines
Servcorp Qatar LLC
Body Corporate
Qatar
49
Foreign
Qatar
Branch of Servcorp Square Pte Ltd
Body Corporate
Saudi Arabia
100
Foreign
Saudi Arabia
Office Services Company
Body Corporate
Saudi Arabia
97.5
Foreign
Saudi Arabia
Regional Headquarters Company
Body Corporate
Saudi Arabia
100
Foreign
Saudi Arabia
Servcorp Serviced Offices Pte. Ltd
Body Corporate
Singapore
100
Foreign
Singapore
Servcorp Battery Road Pte. Ltd
Body Corporate
Singapore
100
Foreign
Singapore
Servcorp Marina Pte. Ltd
Body Corporate
Singapore
100
Foreign
Singapore
Servcorp Singapore Holdings Pte.
Ltd
Body Corporate
Singapore
100
Foreign
Singapore
Servcorp Metropolis Pte. Ltd
Body Corporate
Singapore
100
Foreign
Singapore
Servcorp Square Pte. Ltd
Body Corporate
Singapore
100
Foreign
Singapore
Servcorp SR Pte. Ltd
Body Corporate
Singapore
100
Foreign
Singapore
Servcorp Co., Ltd
Body Corporate
Thailand
100
Foreign
Thailand
Servcorp Thai Holdings Ltd
Body Corporate
Thailand
100
Foreign
Thailand
Headquarters Co., Ltd
Body Corporate
Thailand
100
Foreign
Thailand
Servcorp Is Merkezi Isletmeciligi
Limited Sirketi
Body Corporate
Turkey
100
Foreign
Turkey
Servcorp Sixteen Paylasimli Ofis
Isletmeciligi Limited Sirketi
Body Corporate
Turkey
100
Foreign
Turkey
Servcorp LLC
Body Corporate
UAE
100
Foreign
UAE
Servcorp Administration Services
LLC
Body Corporate
UAE
100
Foreign
UAE
Servcorp Level 54 DMCC
Body Corporate
UAE
100
Foreign
UAE
Servcorp EMEIA Holdings Ltd
Body Corporate
UAE
100
Foreign
UAE
Servcorp DIFC Holdings Ltd
Body Corporate
UAE
100
Foreign
UAE
Servcorp UK Limited
Body Corporate
UK
100
Foreign
UK
Servcorp Leadenhall Limited
Body Corporate
UK
100
Foreign
UK
Servcorp Mayfair Limited
Body Corporate
UK
100
Foreign
UK
Servcorp Europe Holdings Limited
Body Corporate
UK
100
Foreign
UK
CONSOLIDATED ENTITY
DISCLOSURE STATEMENT
ENTITY NAME
ENTITY TYPE
PLACE
INCORP-
ORATED OR
FORMED
% OF ISSUED
SHARE
CAPITAL HELD
DIRECTLY OR
INDIRECTLY BY
THE PUBLIC
COMPANY
AUSTRALIAN
OR FOREIGN
TAX RESIDENT
JURIS-
DICTION
FOR
FOREIGN
TAX
RESIDENT
Servcorp Middle East Holdings
Limited
Body Corporate
UK
100
Foreign
UK
Servcorp US Holdings, Inc
Body Corporate
USA
100
Foreign
USA
Servcorp America LLC
Body Corporate
USA
100
Foreign
USA
Servcorp New York LLC
Body Corporate
USA
100
Foreign
USA
Servcorp Washington LLC
Body Corporate
USA
100
Foreign
USA
Servcorp Houston LLC
Body Corporate
USA
100
Foreign
USA
Servcorp State Street LLC
Body Corporate
USA
100
Foreign
USA
Servcorp Fulton Street LLC
Body Corporate
USA
100
Foreign
USA
Servcorp West Lake LLC
Body Corporate
USA
100
Foreign
USA
Servcorp Battery Park LLC
Body Corporate
USA
100
Foreign
USA
Servcorp Madison LLC
Body Corporate
USA
100
Foreign
USA
Servcorp Manhattan LLC
Body Corporate
USA
100
Foreign
USA
Servcorp Philadelphia LLC (in
liquidation)
Body Corporate
USA
100
Foreign
USA
Servcorp Dallas LLC (in liquidation)
Body Corporate
USA
100
Foreign
USA
Key assumptions and judgements
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 TR 2018/5 and Practical Compliance Guidance PCG 2018/9.
•
Foreign tax residency
The Consolidated Entity has applied current legislation and where available judicial precedent in the determination of
foreign tax residency. Where necessary, the Consolidated Entity has used independent tax advisers in foreign
jurisdictions to assist in its determination of tax residency to ensure applicable tax legislation has been complied with.
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
YEAR IN REVIEW
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
104
105
YEAR IN REVIEW
FINANCIAL REPORT
DIRECTORS’ DECLARATION
The Directors of the Servcorp Limited declare that:
a)
in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable;
b)
the attached Consolidated Financial Statements are in compliance with International Financial Reporting Standards, as
stated in Note 1 to the Consolidated Financial Report;
c)
in the Directors’ opinion, the attached Consolidated Financial Statements and notes thereto and the Remuneration
Report on pages 41 to 52 in the Directors' report are in accordance with the Corporations Act 2001, including:
i.
compliance with Australian Accounting Standards and the Corporations Regulations 2001; and
ii.
giving a true and fair view of the financial position as at 30 June 2024 and performance for the financial year ended
on that date;
d) in the Directors' opinion, the attached Consolidated Entity Disclosure Statement on pages 102 to 105 is true and
correct as at 30 June 2024;
e) the Directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of the Directors made pursuant to section 295(5) of the Corporations Act 2001.
A G Moufarrige AO
Managing Director and CEO
Dated 22 August 2024
107
Independent Auditor’s Report
To the shareholders of Servcorp Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of
Servcorp Limited (the Company).
In our opinion, the accompanying Financial
Report of the Company gives a true and
fair view, including of the Consolidated
Entity’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; and
• Directors’ Declaration.
The Consolidated Entity 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 Consolidated Entity 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.
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.
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
106
107
YEAR IN REVIEW
108
Key Audit Matters
The Key Audit Matters we identified are:
• Accounting for leases; and
• Recoverability of right-of-use assets
and leasehold improvements.
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.
These matters were 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 these matters.
Accounting for leases
Refer to Note 13 ‘Right of use assets’ ($316.5m) and Note 16 ‘Lease Liabilities’ ($371.2m) in the
Financial Report
The key audit matter
How the matter was addressed in our audit
Accounting for leases in accordance with AASB
16 Leases is a key audit matter due to the:
•
significance of leases to the financial
statements; and
•
large volume of individual lease
agreements which increase the complexity
and judgement required by management in
determining the right-of-use asset and
lease liability balances.
We focused our testing on the accounting for
leases that were new or modified during the
financial year.
The Consolidated Entity, when calculating the
right-of-use asset and lease liability balances,
applied judgement to determine the effective
date, expected lease term, application of the
rent review terms and lease incentives as the
incremental borrowing rate (IBR). These were
key features subject to our audit testing.
We involved our senior audit team members in
assessing this key audit matter, along with our
debt advisory specialists.
Our procedures included:
•
We assessed the appropriateness of the
Consolidated Entity’s accounting policies
against the requirements of the accounting
standard and our understanding of the
business.
•
We assessed the completeness of the
Consolidated Entity’s leases by comparing
each location published on the Servcorp global
website to the Consolidated Entity’s lease
listing and checking for a corresponding lease.
•
For a sample of new and modified leases, we
agreed key inputs, such as the effective date
of lease modification, changes to contractual
terms and conditions and the commencement
date of the lease, used in the Consolidated
Entity’s lease calculation model to underlying
source documents including the current lease
agreement.
•
We assessed the Consolidated Entity’s
determination of lease terms based on the
probability of the Group exercising lease
renewal options. We compared key
management decisions for consistency to
board plans, strategies and past practices.
•
Working together with our debt advisory
specialists, we independently assessed a
sample of incremental borrowing rates applied
109
to the leases using the publicly sourced yield
curve, adjusted by credit risk specific to the
Consolidated entity, and each lease term.
•
We assessed the integrity of the Consolidated
Entity’s AASB 16 lease calculation model
used, including the accuracy of the underlying
calculation formulas. For a sample of leases,
we recalculated the amount of lease liability,
right-of-use asset, depreciation and interest
expense, relevant to this financial year and
compared our recalculated amounts against
the amounts recorded by the Consolidated
Entity.
•
We assessed the Consolidated Entity’s
disclosures in the financial report using our
understanding obtained from our testing and
against the requirements of the accounting
standard.
Recoverability of right-of-use assets and leasehold improvements
Refer to Note 11 ‘Property, plant and equipment’ (Leasehold improvements: $65.4m) and Note 13
‘Right of use assets’($316.5m) in the Financial Report
The key audit matter
How the matter was addressed in our audit
The recoverability of right-of-use assets and
leasehold improvements is a key audit matter
due to:
•
the significance of these assets to the
financial statements; and
•
the impact of the current economic
conditions on the business globally.
We focused on the following forward-looking
assumptions the Consolidated Entity applied in
its Value-In-Use (VIU) models, including:
•
Forecast pricing and occupancy growth
rates – these assumptions are influenced
by lease duration, renewal and terms of
tenant contracts, competitive market
conditions and the economic outlook for
each Cash Generating Unit (CGU);
Our procedures included:
•
We assessed the Consolidated Entity’s
determination of CGUs based on our
understanding of the operations of the
Consolidated Entity’s business, and how
independent cash inflows were generated,
against the requirements of the accounting
standards AASB 136 Impairment of assets
(AASB 136).
•
We assessed the Consolidated Entity’s
indicators of impairment analysis for each
CGU based on current and historical business
performance.
•
Together with our valuation specialists, we
assessed the appropriateness of the VIU
methodology applied by the Consolidated
Entity against the requirements of AASB 136.
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
108
109
YEAR IN REVIEW
110
•
Forecast operating cash flows – estimating
projected cash flow forecasts is inherently
subjective and susceptible to differences in
outcome, in particular due to external
market conditions; and
•
Discount rates - these are subjective in
nature and vary according to the specific
conditions and environment of the relevant
CGU. We involved our valuation specialists
with this assessment.
The Consolidated Entity has a high number of
individual CGUs during the year necessitating
our consideration of the Consolidated Entity’s
determination of CGUs, based on the smallest
group of assets to generate largely independent
cash inflows.
The Consolidated Entity has recorded an
impairment of $2.5m in this financial year.
•
We assessed the integrity of the VIU models
used, including the accuracy of the underlying
calculation formulas.
•
We compared the forecast cash flows
contained in the VIU models to forecasts
presented to the Board.
•
We assessed the accuracy of previous
Consolidated Entity forecasts to inform our
evaluation of forecasts incorporated in the
models. We applied increased scepticism to
forecasts in areas where previous forecasts
were not achieved.
•
We challenged the Consolidated Entity’s
forecast cash flow and growth assumptions,
such as forecast pricing and occupancy rates.
We used our knowledge of the Consolidated
Entity’s past performance, their business plan
and our industry experience.
•
Working with our valuation specialists, we
independently developed a discount rate
range using publicly available market data for
comparable entities, adjusted by risk factors
specific to the CGUs environment and the
geography it operates in.
•
We assessed the disclosures in the financial
report using our understanding obtained from
our testing against the requirements of the
accounting standards.
Other Information
Other Information is financial and non-financial information in Servcorp 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.
111
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report in accordance with the Corporations Act, including giving a true
and fair view of the financial position and performance of the Consolidated Entity, 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 Consolidated Entity, and that is free from material
misstatement, whether due to fraud or error
• assessing the Consolidated Entity 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 Consolidated Entity and Company or to
cease operations, or have no realistic alternative but to do so.
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.
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
OTHER INFORMATION
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
110
111
YEAR IN REVIEW
112
Report on the Remuneration Report
Opinion
In our opinion, the Remuneration Report
of Servcorp 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 41 to 52 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.
KPMG
Paul Thomas Ashley Trang
Partner Partner
Sydney Sydney
22 August 2024 22 August 2024
SHAREHOLDER INFORMATION
The shareholder information set out below is provided in accordance with the Listing
Rules and was applicable as at 2 September 2024.
CLASS OF SHARES AND VOTING RIGHTS
ORDINARY SHARES
There were 1,938 holders of the ordinary shares of the Company.
At a general meeting:
• on a show of hands, every member present in person or by direct vote, proxy, attorney or representative has one vote;
• on a poll, every member present has one vote for each fully paid share held.
OPTIONS AND PERFORMANCE RIGHTS
There were 97 holders of options and performance rights over 4,289,500 unissued ordinary shares of the Company, granted to employees
under the Servcorp Executive Share Option Scheme and the Servcorp Employee Incentive Plan.
There are no voting rights attached to the options or performance rights. Voting rights will be attached to the unissued ordinary shares when
the options or performance rights have been exercised. The options and performance rights are unquoted.
ON-MARKET BUY-BACK
There is no current on-market buy-back.
DISTRIBUTION OF EQUITY SECURITIES
SIZE OF
HOLDING
ORDINARY
SHARES
OPTIONS
SRVAB
OPTIONS
SRVAD
OPTIONS
SRVAF
OPTIONS
SRVAG
OPTIONS
SRVAH
PERFORMANCE
RIGHTS
SRVAE
1 – 1,000
No. of Holders
No. of Securities
% of Securities
860
362,582
0.37%
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,001 –
5,000
No. of Holders
No. of Securities
% of Securities
637
1,615,907
1.64%
2
10,000
2.26%
—
—
—
—
—
—
6
30,000
1.83%
—
—
—
—
—
—
5,001 –
10,000
No. of Holders
No. of Securities
% of Securities
198
1,527,107
1.55%
15
117,500
26.55%
—
—
—
2
20,000
2.10%
9
90,000
5.50%
—
—
—
—
—
—
10,001 –
100,000
No. of Holders
No. of Securities
% of Securities
215
6,167,213
6.26%
3
115,000
25.99%
1
100,000
100%
25
932,000
97.90%
25
765,000
46.79%
—
—
—
4
160,000
100%
100,001
and over
No. of Holders
No. of Securities
% of Securities
28
88,917,579
90.19%
1
200,000
45.20%
—
—
—
—
—
—
3
750,000
45.87%
1
1,000,000
100%
—
—
—
Totals
No. of Holders
No. of Securities
% of Securities
1,938
98,590,388
100%
21
442,500
100%
1
100,000
100%
27
952,000
100%
43
1,635,000
100%
1
1,000,000
100%
4
160,000
100%
There were 202 holders of ordinary shares holding less than a marketable parcel, based on the closing market price at the specified date.
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
112
113
YEAR IN REVIEW
OTHER INFORMATION
SHAREHOLDER INFORMATION
CORPORATE INFORMATION
DIRECTORS
The Hon. Mark Vaile
Chairman & non-executive Director, independent
Wallis Graham
Non-executive Director, independent
Tony McGrath
Non-executive Director, independent
Alf Moufarrige
CEO & Managing Director
COMPANY SECRETARY
Gregory Pearce
REGISTERED OFFICE AND PRINCIPAL OFFICE
Level 63
25 Martin Place
Sydney NSW 2000
Telephone: + 61 (2) 9231 7500
Facsimile:
+ 61 (2) 9231 7665
AUDITOR
KPMG
Tower Three, International Towers Sydney
300 Barangaroo Avenue
Sydney NSW 2000
SHARE REGISTRY
Boardroom Pty Limited
Level 8
210 George Street
Sydney NSW 2000
GPO Box 3993
Sydney NSW 2001
Telephone: 1300 737 760
+ 61 (2) 9290 9600
Email: enquiries@boardroomlimited.com.au
STOCK EXCHANGE
Servcorp Limited shares are quoted on the Australian Securities Exchange under the code SRV.
The Home Exchange is Sydney.
ANNUAL GENERAL MEETING
The annual general meeting of Servcorp Limited will be held as a hybrid meeting, at 4.30pm on Thursday, 14 November 2024. Shareholders
may participate online, or in person at:
Servcorp Limited
Level 63
25 Martin Place
Sydney NSW 2000
Details about how shareholders may attend online are set out in the Notice of Meeting.
SUBSTANTIAL SHAREHOLDERS
The following organisations have given a substantial shareholder notice to Servcorp.
TWENTY LARGEST SHAREHOLDERS
NAME
NUMBER OF SHARES
% OF VOTING POWER
FMR LLC
9,262,560
9.57%
Perpetual Limited
7,801,528
7.93%
Sovori Pty Ltd
51,338,105
53.03%
HOLDER NAME
NUMBER OF ORDINARY SHARES HELD
% OF CAPITAL HELD
BNP Paribas Noms Pty Ltd
223,015
0.23%
BNP Paribas Noms (NZ) Ltd
439,275
0.45%
BNP Paribas Nominees Pty Ltd
392,187
0.40%
BNP Paribas Nominees Pty Ltd
207,971
0.21%
Citicorp Nominees Pty Limited
5,886,800
5.97%
Eniat Pty Ltd
1,800,000
1.83%
HSBC Custody Nominees (Australia) Limited
19,371,267
19.65%
HSBC Custody Nominees (Australia) Limited A/C 2
4,221,305
4.28%
JP Morgan Nominees Australia Pty Limited
3,179,680
3.23%
MFLE Pty Ltd
1,800,000
1.83%
Morgan Stanley Australia Securities (Nominee) Pty Limited
192,418
0.20%
Moufarrige, Alfred George
547,436
0.56%
Mutual Trust Pty Ltd
306,278
0.31%
Neweconomy Com Au Nominees Pty Limited <900 Account>
349,912
0.35%
Omnioffices Pty Ltd
3,296,401
3.34%
Reed, John & Janet
153,759
0.16%
Sandhurst Trustees Ltd
1,375,123
1.39%
Sovori Pty Ltd
44,564,852
45.20%
Uvira Superannuation Pty Limited
358,440
0.36%
Vanward Investments Limited
131,460
0.13%
Totals for Top 20
88,797,579
90.07%
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
114
115
YEAR IN REVIEW
OTHER INFORMATION
work from
ANYWHERE!
designdavey
illustrations by Steve Panozzo (The Cartoon Factory)
CHAIRMAN’S MESSAGE
CEO'S MESSAGE
CORPORATE GOVERNANCE
REMUNERATION REPORT
DIRECTORS’ REPORT
FINANCIAL REPORT
SERVCORP I ANNUAL REPORT 2024
YEAR IN REVIEW
OTHER INFORMATION
117
116
CONQUER THE WORLD
FROM ANYWHERE!