1.  Description of business

 

The consolidated financial statements of Mincon Group Plc (also referred to as "Mincon" or "the Group") comprises the Company and its subsidiaries (together referred to as "the Group"). The companies registered address is Smithstown Industrial Estate, Smithstown, Shannon, Co. Clare, Ireland.

 

The Group is an Irish engineering Group, specialising in the design, manufacturing, sale and servicing of rock drilling tools and associated products. Mincon Group Plc is domiciled in Shannon, Ireland.

 

On 26 November 2013, Mincon Group plc was admitted to trading on the Enterprise Securities Market (ESM) of the Euronext Dublin and the Alternative Investment Market (AIM) of the London Stock Exchange.

 

2.  Basis of preparation

 

These consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards as adopted by the European Union (EU IFRS), which comprise standards and interpretations approved by the International Accounting Standards Board (IASB), and endorsed by the EU.

 

The individual financial statements of the Company have been prepared in accordance with IFRSs as adopted by the EU and as applied in accordance with the Companies Act 2014 which permit a company that publishes its Group and Company financial statements together to take advantage of the exemption in Section 304 of the Companies Act 2014 from presenting to its members its Company income statement, statement of comprehensive income and related notes that form part of the approved Company financial statements.

 

The accounting policies set out in note 3 have been applied consistently in preparing the Group and Company financial statements for the years ended 31 December 2020 and 31 December 2019.

 

The Group and Company financial statements are presented in euro, which is the functional currency of the Company and also the presentation currency for the Group's financial reporting. Unless otherwise indicated, the amounts are presented in thousands of euro. These financial statements are prepared on the historical cost basis.

 

The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The judgements, estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results could differ materially from these estimates. The areas involving a high degree of judgement and the areas where estimates and assumptions are critical to the consolidated financial statements are discussed in note 3.

 

The directors believe that the Group has adequate resources to continue in operational existence for the foreseeable future and that it is appropriate to continue to prepare our consolidated financial statements on a going concern basis.

 

 

3.  Significant accounting principles, accounting estimates and judgements

 

The accounting principles as set out in the following paragraphs have, unless otherwise stated, been consistently applied to all periods presented in the consolidated financial statements and for all entities included in the consolidated financial statements. The Group has initially adopted Definition of a Business (Amendments to IFRS 3) and it has not had a significant impact on the Groups financial statements.   The Group applied Definitions of a Business (Amendments to IFRS 3) to business combinations whose acquisition dates are on or after 1 January 2020 in assessing whether it had acquired a business or a group of assets. See Note 9 for the details of the Groups acquisitions of subsidiary during the year.       3.  Significant accounting principles, accounting estimates and judgements (continued)   Revenue Recognition The Group is involved in the sale and servicing of rock drilling tools and associated products. Revenue from the sale of these goods and services to customers is measured at the fair value of the consideration received or receivable (excluding sales taxes). The Group recognises revenue when it transfers control of goods to a customer.   The following provides information about the nature and timing of the satisfaction of performance obligations in contracts with customers, including significant payment terms, and the related revenue recognition policies.   Customers obtain control of products when one of the following conditions are satisfied:   1.   The goods have been picked up by the customer from Mincon's premises. 2.   When goods have been shipped by Mincon, the goods are delivered to the customer and have been accepted at their premises.   Invoices are generated when the above conditions are satisfied. Invoices are payable within the timeframe as set in agreement with the customer at the point of placing the order of the product. Discounts are provided from time-to-time to customers.   Customers may be permitted to return goods where issues are identified with regard to quality of the product. Returned goods are exchanged only for new goods or a credit note. No cash refunds are offered.   Where the customer is permitted to return an item, revenue is recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. Therefore, the amount of revenue recognised is adjusted for expected returns, which are estimated based on the historical data for specific types of product. In these circumstances, a refund liability and a right to recover returned goods asset are recognised.   Government Grants Amounts recognised in the profit and loss account are presented under the heading Operating Costs on a systematic basis in the periods in which the expenses are recognised, unless the conditions for receiving the grant are met after the related expenses have been recognised. In this case, the grant is recognised when it is receivable.

 

Earnings per share

Basic earnings per share is calculated based on the profit for the year attributable to owners of the Company and the basic weighted average number of shares outstanding. Diluted earnings per share is calcu-lated based on the profit for the year attributable to owners of the Company and the diluted weighted average number of shares outstanding.

 

Taxation

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends.

 

Current tax assets and liabilities are offset only if certain criteria are met.

 

Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:

 

•           temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;

•           temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

•           taxable temporary differences arising on the initial recognition of goodwill.

 

 

 

 

 

3.  Significant accounting principles, accounting estimates and judgements (continued)

 

Taxation (continued)

Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Future taxable profits are determined based on the reversal of relevant taxable temporary differences. If the amount of taxable temporary differences is insufficient to recognise a deferred tax asset in full, then future taxable profits, adjusted for reversals of existing temporary differences, are considered, based on the business plans for individual subsidiaries in the Group. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves.

 

Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used.

 

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.

 

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

 

Deferred tax assets and liabilities are offset only if certain criteria are met.

 

Leases

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group uses the definition of a lease in IFRS 16.

 

(i) As a lessee

At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices.

 

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

 

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

 

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate.

 

The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources.

 

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group's estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.

 

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

 

 

 

3.  Significant accounting principles, accounting estimates and judgements (continued)

 

Leases (continued)

(ii) As a lessor

At inception or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices.

 

When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.

 

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset.

 

Short term leases and leases of low-value assets

The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases, including IT equipment. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

 

Inventories and capital equipment

Inventories and capital equipment are valued at the lower of cost or net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and selling expenses. The cost of inventories is based on the first-in, first-out principle and includes the costs of acquiring inventories and bringing them to their existing location and condition. Inventories manufactured by the Group and work in progress include an appropriate share of production overheads based on normal operating capacity. Inventories are reported net of deductions for obsolescence.

 

Intangible Assets and Goodwill

 

Goodwill

The Group accounts for acquisitions using the purchase accounting method as outlined in IFRS 3 Business Combinations. Group management has determined that the Group has one operating segment and therefore all goodwill is tested for impairment at Group level and this is tested for impairment annually.

 

Intangible assets

Expenditure on research activities is recognised in profit or loss as incurred.

 

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 Group intends to and has sufficient resources to complete development and to use or sell the asset. Otherwise, it is recognised in the profit or loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost less accumulated amortisation and any accumulated impairment losses.

 

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred.

 

Foreign Currency

Foreign currency transactions

Transactions in foreign currencies (those which are denominated in a currency other than the functional currency) are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the foreign exchange rate at the statement of financial position date. Exchange gains and losses related to trade receivables and payables, other financial assets and payables, and other operating receiv-ables and payables are separately presented on the face of the income statement.

 

Exchange rate differences on translation to functional currency are reported in profit or loss, except when reported in other compre-hensive income for the translation of intra-group receivables from, or liabilities to, a for-eign operation that in substance is part of the net investment in the foreign operation.

Exchange rates for major currencies used in the various reporting periods are shown in note 23.

 

 

 

 

 

3.  Significant accounting principles, accounting estimates and judgements (continued)

 

Foreign Currency (continued) 

 

Translation of accounts of foreign entities

The assets and liabilities of foreign entities, including goodwill and fair value adjustments arising on consolidation, are translated to euro at the exchange rates ruling at the reporting date. Revenues, expenses, gains, and losses are translated at average exchange rates, when these approximate the exchange rate for the respective transaction. Foreign exchange differences arising on translation of foreign entities are recognised in other comprehensive income and are accumulated in a separate component of equity as a translation reserve. On divestment of foreign entities, the accumulated exchange differences, are recycled through profit or loss, increasing or decreasing the profit or loss on divestments.

 

Business combinations and consolidation

The consolidated financial statements include the financial statements of the Group and all companies in which Mincon Group plc, directly or indirectly, has control. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

The consolidated financial statements have been prepared in accordance with the acquisition method. According to this method, business combinations are seen as if the Group directly acquires the assets and assumes the liabilities of the entity acquired. At the acquisition date, i.e. the date on which control is obtained, each identifiable asset acquired and liability assumed is recognised at its acquisition-date fair value.

 

Consideration transferred is measured at its fair value. It includes the sum of the acquisition date fair values of the assets transferred, liabilities incurred to the previous owners of the acquiree, and equity interests issued by the Group. Deferred contingent consideration is initially measured at its acquisition-date fair value. Any subsequent change in such fair value is recognised in profit or loss, unless the deferred contingent consideration is classified as equity. In that case, there is no remeasurement and the subsequent settlement is accounted for within equity. Deferred contingent consideration arises in the current year where part payment for an acquisition is deferred to the following year or years.

Transaction costs that the Group incurs in connection with a business combination, such as legal fees, due diligence fees, and other professional and consulting fees are expensed as incurred.

 

Goodwill is measured as the excess of the fair value of the consideration transferred, the amount of any non-controlling interest in the acquiree, and the fair value of the Group's previously held equity interest in the acquiree (if any) over the net of acquisition-date fair values of the identifiable assets acquired and liabilities assumed. Goodwill is not amortised but tested for impairment at least annually.

 

Non-controlling interest is initially measured either at fair value or at the non-controlling interest's proportionate share of the fair value of the acquiree's identifiable net assets. This means that goodwill is either recorded in "full" (on the total acquired net assets) or in "part" (only on the Group's share of net assets). The choice of measurement basis is made on an acquisition-by-acquisition basis.

 

Earnings from the acquirees are reported in the consolidated income statement from the date of control.

 

Intra-group balances and transactions such as income, expenses and dividends are eliminated in preparing the consolidated financial statements. Profits and losses resulting from intra-group transactions that are recognised in assets, such as inventory, are eliminated in full, but losses are only eliminated to the extent that there is no evidence of impairment.

 

Property, plant and equipment

Items of property, plant and equipment are carried at cost less accumulated depreciation and impairment losses. Cost of an item of property, plant and equipment comprises the purchase price, import duties, and any cost directly attributable to bringing the asset to its location and condition for use. The Group capitalises costs on initial recognition and on replacement of significant parts of property, plant and equipment, if it is probable that the future economic benefits embodied will flow to the Group and the cost can be measured reliably. All other costs are recognised as an expense in profit or loss when incurred.

 

 

 

 

 

 

 

3.  Significant accounting principles, accounting estimates and judgements (continued)

 

Property, plant and equipment (continued)

 

Depreciation

Depreciation is calculated based on cost using the straight-line method over the estimated useful life of the asset. The following useful lives are used for depreciation:

 

                                                Years

Buildings                                  20-30

Plant and equipment                  3-10

 

The depreciation methods, useful lives and residual values are reassessed annually. Land is not depreciated.

 

Right of use assets are depreciated using the straight-line method over the estimated useful life of the asset being the remaining duration of the lease from inception date of the asset. The depreciation methods, useful lives and residual values are reassessed annually.

 

Financial Assets and Liabilities

 

Recognition and derecognition

Financial assets and liabilities are recognised at fair value when the Group becomes a party to the contractual provisions of the instrument. Purchases and sales of financial assets are accounted for at trade date, which is the day when the Group contractually commits to acquire or dispose of the assets. Trade receivables are recognised on delivery of product. Liabilities are recognised when the other party has performed and there is a contractual obligation to pay. Derecognition (fully or partially) of a financial asset occurs when the rights to receive cash flows from the financial instruments expire or are transferred and substantially all of the risks and rewards of ownership have been removed from the Group. The Group derecognises (fully or partially) a financial liability when the obligation specified in the contract is discharged or otherwise expires. A financial asset and a financial liability are offset and the net amount presented in the statement of financial position when there is a legally enforceable right to set off the recognised amounts and there is an intention to either settle on a net basis or to realise the asset and settle the liability simultaneously.

 

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial asset or a financial liability and of allocating the interest income or interest expense over the relevant periods. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument, or when appropriate a shorter period, to the net carrying amount of the financial asset or financial liability. The calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs, and all other premiums or discounts.

 

Borrowing costs

All borrowing costs are expensed in accordance with the effective interest rate method.

 

Investments in subsidiaries - Company

Investments in subsidiary undertakings are stated at cost less provision for impairment in the Company's statement of financial position. Loans to subsidiary undertakings are initially recorded at fair value in the Company statement of financial position and subsequently at amortised cost using an effective interest rate methodology.

 

Impairment of financial assets

Financial assets are assessed at each reporting date to determine whether there is any objective evidence that they are impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.

 

Equity

Shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effect.

 

Contingent liabilities

A contingent liability is a possible obligation or a present obligation that arises from past events that is not reported as a liability or provision, as it is not probable that an outflow of resources will be required to settle the obligation or that a sufficiently reliable calculation of the amount cannot be made.

 

 

 

 

3.  Significant accounting principles, accounting estimates and judgements (continued)

 

Financial Assets and Liabilities (continued)

 

Financial instruments carried at fair value: Non-derivative financial liabilities

Fair value is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date. 

 

Finance income and expenses

Finance income and expense are included in profit or loss using the effective interest method.

 

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits with maturities of three months or less.

 

Provisions

A provision is recognised in the statement of financial position when the Group has a legal or constructive obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and the outflow can be estimated reliably. The amount recognised as a provision is the best estimate of the expenditure required to settle the present obligation at the reporting date. If the effect of the time value of money is material, the provision is determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and, where appropriate, the risks specific to the liability. 

 

A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan and the restructuring has either commenced or been announced publicly. Future operating losses are not provided for. 

 

Exceptional Items

The Group has adopted an Income Statement format which seeks to highlight significant items within the Group results for the year. Exceptional items may include restructuring, profit or loss on disposal or termination of operations, litigation costs and settlements, profit or loss on disposal of investments, profit or loss on disposal of property, plant and equipment, acquisition costs, adjustment to contingent consideration and impairment of assets relating to significant transactions. Judgement is used by the Group in assessing particular items, which by virtue of their scale and nature, should be presented in the Income Statements and disclosed in the related notes as exceptional items.

 

Defined contribution plans

A defined contribution retirement benefit plan is a post-employment benefit plan under which the Group pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution retirement benefit plans are recognised as an employee benefit expense in profit or loss when employees provide services entitling them to the contributions.

 

Share-based payment transactions

The Group operates a long term incentive plan which allows the Company to grant Restricted Share Awards ("RSAs") to executive directors and senior management. All schemes are equity settled arrangements under IFRS 2 Share-based Payment.

 

The grant-date fair value of share-based payment awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date.

 

 

 

 

3.  Significant accounting principles, accounting estimates and judgements (continued)

 

Critical accounting estimates and judgements

The preparation of financial statements requires management's judgement and the use of estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the prevailing circumstances. Actual results may differ from those estimates. The estimates and assumptions are reviewed on an ongoing basis. Revisions to the accounting estimates are recognised in the period in which they are revised and in any future periods affected.

 

Following are the estimates and judgements which, in the opinion of management, are significant to the underlying amounts included in the financial reports and for which there is a significant risk that future events or new information could entail a change in those estimates or judgements.

 

Deferred contingent consideration

The deferred contingent consideration payable represents management's best estimate of the fair value of the amounts that will be payable, discounted as appropriate using a market interest rate. The fair value was estimated by assigning probabilities, based on management's current expectations, to the potential pay-out scenarios. The fair value of deferred contingent consideration is primarily dependent on the future performance of the acquired businesses against predetermined targets and on management's current expectations thereof.

 

Goodwill

The initial recognition of goodwill represents management' best estimate of the fair value of the acquired entities value less the identified assets acquired.

 

During the annual impairment assessment over goodwill, management calculate the recoverable value of the group using their best estimate of the discounted future cash flows of the group. The fair values were estimated using management's current and future projections of the Mincon Group's performance as well as appropriate data inputs and assumptions

 

Trade and other receivables

Trade and other receivables are included in current assets, except for those with maturities more than 12 months after the reporting date, which are classified as non-current assets. The Group estimates the risk that receivables will not be paid and provides for doubtful debts in line with IFRS 9.

 

 

4.  Revenue

 

In the following table, revenue is disaggregated between Mincon manufactured product and product that is purchased outside the Group and resold through Mincon distribution channels.

 

	2020	2019
	€'000	€'000
Product revenue:
Sale of Mincon product	108,556	103,797
Sale of third party product	21,347	19,948
Total revenue	129,903	123,745

 

 

 

 

 

5.  Operating Segment

 

An operating segment is a component of the Group that engages in busi-ness activities from which it may earn revenue and incur expenses, and for which discrete financial information is available. The operating results of the operating segment is reviewed regularly by the Board of Directors, the chief operating decision maker, to make deci-sions about allocation of resources and also to assess  performance.

 

Results are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (CODM). Our CODM has been identified as the Board of Directors.

 

The Group has determined that it has one reportable segment. The Group is managed as a single business unit that sells drilling equipment, primarily manufactured by Mincon manufacturing sites.

 

The CODM assesses operating segment performance based on a measure of operating profit. Segment revenue for the year ended 31 December 2020 of €129.9million (2019: €123.7 million) is wholly derived from sales to external customers.

 

Entity-wide disclosures

 

The business is managed on a worldwide basis but operates manufacturing facilities and sales offices in Ireland, UK, Sweden, Finland, South Africa, Western Australia, the United States and Canada and sales offices in nine other locations including Eastern Australia, South Africa, France, Spain, Namibia, Sweden, Chile and Peru. In presenting information on geography, revenue is based on the geographical location of customers and non-current assets based on the location of these assets.

 

 

Revenue by region (by location of customers):

	2020	2019
	€'000	€'000
Region:
Ireland	1,487	772
Americas	43,640	39,410
Australasia	24,754	27,351
Europe, Middle East, Africa	60,022	56,212
Total revenue from continuing operations	129,903	123,745

 

During 2020 Mincon had sales in the USA of €24.7 million (2019: €20.8 million), Australia of €14.6 million (2019: €18.5 million) and Sweden of €13.5 million (2019: €12.8 million), these separately contributed to more than 10% of the entire Group's sales for 2020.

 

Non-current assets by region (location of assets):
	2020	2019
	€'000	€'000
Region:
Ireland	18,315	17,064
Americas	11,310	21,846
Australasia	11,338	11,144
Europe, Middle East, Africa	41,844	23,055
Total non-current assets(1)	82,807	73,109
(1) Non-current assets exclude deferred tax assets.

 

During 2020 Mincon held non-current assets (excluding deferred tax assets) in the USA of €9.4 million, these separately contributed to more than 10% of the entire Group's non-current assets (excluding deferred tax assets) for 2020.

 

 

 

 

6.  Cost of Sales and operating expenses

 

Included within cost of sales and operating costs were the following major components: 

 

Cost of sales
	2020	2019
	€'000	€'000
Raw materials	33,913	39,190
Third party product purchases	16,098	14,204
Employee costs	17,504	14,045
Depreciation (note 13)	4,216	3,312
Distribution costs	3,106	2,380
Energy costs	1,623	1,450
Maintenance of machinery	1,392	1,363
Impairment of finished goods inventory	-	1,692
Cost of sales of disposed operations(note 8)	-	2,489
Subcontracting	4,311	2,102
Other	2,023	420
Total cost of sales	84,186	82,647

 

 

 

Operating costs

	2020	2019
	€'000	€'000
Employee costs (including director emoluments)	17,438	15,899
Depreciation (note 13)	2,266	1,930
Rent	793	865
Travel	775	2,375
Professional costs	1,814	1,938
Administration	2,007	2,247
Marketing	542	886
Salary and termination payments for redundant employees (note 8)	-	2,754
Impairment of trade receivable	-	799
Operating costs of disposed operations (note 8)	-	2,359
Other	1,833	1,764
Total other operating costs	27,468	33,816

 

The Group invested approximately €3.7 million on research and development projects in 2020 (2019: €3.2 million). €2.6 million of this has been expensed in the period (2019: €1.8 million), with the balance of €1.1 million capitalised (2019: €1.4 million) (note 12).

 

The Group recognised €1.3 million in Government Grants in 2020 (2019:NIL). These grants differ in structure from country to country, they primarily relate to personnel costs.

 

 

7.  Employee information
	2020	2019
	€'000	€'000
Wages and salaries - excluding directors	28,753	25,088
Wages, salaries, fees and retirement benefit - directors (note 10)	795	760
Salary and termination payments for redundant employees	-	2,754
Social security costs	3,029	2,677
Retirement benefit costs of defined contribution plans	1,735	1,064
Share based payment expense (note 22)	630	355
Total employee costs	34,942	32,698

 

The Group capitalised payroll costs of  €0.5 million in 2020 (2019: €0.5 million) in relation to research and development.
The average number of employees was as follows:
	2020	2019
	Number	Number
Sales and distribution	126	124
General and administration	66	56
Manufacturing, service and development	360	290
Average number of persons employed	552	470

 

Retirement benefit and Other Employee Benefit Plans

 

The Group operates various defined contribution retirement benefit plans. During the year ended 31 December 2020, the Group recorded €1.7 million (2019: €1.1 million) of expense in connection with these plans.

 

 

8.  Exceptional Items

 

	2020	2019
	€'000	€'000
Revenue
Revenue from disposed operations	-	3,074
Total Revenue	-	3,074
Cost of sales
Impairment of capital equipment inventory		-
Cost of sales of disposed operations	-	(2,489)
Total cost of sales	-	(2,489)
Operating costs
Salary and termination payments for redundant employees	-	(2,754)
Acquisition related costs	-	-
Operating costs of disposed operations	-	(2,359)
Total operating costs	-	(5,113)
Tax on disposals and discontinued operations	-	(127)
Profit on Disposal (note 9)	-	7,489
Total exceptional profit after tax	-	2,834

 

 

 

 

 

 

8.  Exceptional Items (continued)

 

The Group had undertaken a reorganisation of its activities across all regions during 2019, including relocation of activities, closing of regional offices and redundancies where necessary.

 

The Group had also disposed of operations in two distribution centres, Mincon Tanzania and Mincon Russia, following a strategic decision to place greater focus and emphasis on the Groups key competencies while focusing on the profitability of the core business activities and growth areas where there are synergies and tangible growth opportunities.

 

The Group has chosen to present exceptional items separately from the reorganisation.

 

 

9.  Acquisitions & Disposals

 

In January 2020, Mincon acquired 100% shareholding in Lehti Group, a Finnish based product manufacturing and distributing company, for a consideration of €7.7 million. The transaction included a cash consideration of €7 million and deferred consideration of €706,000.

 

In May 2020, Mincon acquired 100% shareholding in Rocdrill, a French-based construction product distributor

and drilling specialist, for a consideration of €1 million. The transaction included a cash consideration of €450,000 and deferred consideration of €550,000.

 

 

A.    Consideration transferred

 

The following table summarises the acquisition date fair value of each major class of consideration transferred.

 

			EURL Rocdrill	Lehti  Group	Total
			€'000	€'000	€'000
Cash			450	7,000	7,450
Deferred contingent consideration			550	706	1,256
Total consideration transferred			1,000	7,706	8,706

 

 

B.    Identifiable assets acquired and liabilities assumed

 

The following table summarises the recognised amounts of assets and liabilities assumed at the date of acquisition.

 

	Total
	€'000
Property, plant and equipment	2,637
Right of use assets	3,385
Inventories	3,582
Trade receivables	4,704
Other assets	322
Trade and other payables	(2,022)
Right of use liabilities	(3,385)
Other accruals and liabilities	(5,050)
Fair value of identifiable net assets acquired	4,173

 

 

 

 

9.  Acquisitions & Disposals (continued)

 

Measurement of fair values

The valuation techniques used for measuring the fair value of material assets acquired were as follows.

 

Assets acquired

Valuation Technique

 

Property, plant and equipment

Market comparison technique and cost technique: The valuation model considers quoted market prices for similar items when they are available, and depreciated replacement cost when appropriate. Depreciated replacement cost reflects adjustments for physical deterioration as well as functional and economic obsolescence.

 

Inventories

Market comparison technique: The fair value is determined based on the estimated selling price in the ordinary course of business less the estimated costs of completion and sale, and a reasonable profit margin based on the effort required to complete and sell the inventories.

 

 

 

Goodwill

 

Goodwill arising from the acquisition has been recognised as follows.

 

 

	Total 2020 €'000	Total 2019 €'000
Consideration transferred	8,706	1,802
Fair value of identifiable net assets	(4,173)	(916)
Goodwill	4,533	886

 

 

 

 

C.   Profit on Disposal

 

During 2019 the Group disposed of two subsidiaries in Sweden (Hardtekno and Cebeko) and a distribution subsidiary in South Africa (Premier Drilling Solutions).

 

	Total 2020 €'000	Total 2019 €'000
Consideration received	-	8,997
Cash and cash equivalents disposed of	-	(480)
Net assets	-	(1,028)
Profit on Disposal	-	7,489
		Total
Profit on disposal of Hardtekno	-	7,551
Profit on disposal of Cebeko	-	106
Profit on disposal of Premier Drilling Solutions	-	98
Cost on disposal	-	(266)
Profit on Disposal	-	7,489

 

 

 

 

10.  Statutory and other required disclosures

 

Operating profit is stated after charging the following amounts:	2020	2019
	€'000	€'000
Directors' remuneration
Fees	165	192
Wages and salaries	574	511
Other emoluments	-	-
Retirement benefit contributions	56	57
Total directors' remuneration	795	760

 

Auditor's remuneration	2020 €'000	2019 €'000
Auditor's remuneration - Fees payable to lead audit firm
Audit of the Group financial statements	205	195
Audit of the Company financial statements	15	15
Other assurance services	20	20
Tax advisory services (a)	-	-
Other non-audit services	-	2
	240	232
Auditor's remuneration - Fees payable to other firms in lead audit firm's network
Audit services	112	158
Other assurance services	2	2
Tax advisory services	9	63
Total auditor's remuneration	123	223

 

(a) Includes tax compliance work on behalf of Group companies.

 

 

11.  Income tax

 

Tax recognised in income statement:

	2020	2019
Current tax expense	€'000	€'000
Current year	3,224	1,648
Adjustment for prior years	(103)	(89)
Total current tax expense	3,121	1,559
Deferred tax expense
Origination and reversal of temporary differences	(438)	231
Adjustment for prior years	-	3
Total deferred tax (credit)/expense	(438)	234
Total income tax expense	2,683	1,793

 

A reconciliation of the expected income tax expense for continuing operations is computed by applying the standard Irish tax rate to the profit before tax and the reconciliation to the actual income tax expense is as follows:

 

	2020	2019
	€'000	€'000
Profit before tax from continuing operations	17,069	14,176
Irish standard tax rate (12.5%)	12.5%	12.5%
Taxes at the Irish standard rate	2,134	1,772
Foreign income at rates other than the Irish standard rate	849	957
Losses creating no income tax benefit	(843)	288
Other	543	(1,224)
Total income tax expense	2,683	1,793

 

 

 

11.  Income tax (continued)

 

The Group's net deferred taxation liability was as follows:

 

	2020	2019
	€'000	€'000
Deferred taxation assets:
Reserves, provisions and tax credits	585	610
Accrued income	31	-
Tax losses and unrealised FX gains	477	6
Total deferred taxation asset	1,093	616
Deferred taxation liabilities:
Property, plant and equipment	(1,780)	(1,742)
Profit not yet taxable	(52)	(52)
Total deferred taxation liabilities	(1,832)	(1,794)
Net deferred taxation liability	(739)	(1,178)

 

The movement in temporary differences during the year were as follows:

 

 

	Balance	Recognised in	Acquired in a	Balance
	1 January	Profit or Loss	Business combination	31 December
1 January 2019 - 31 December 2019	€'000	€'000	€'000	€'000
Deferred taxation assets:
Reserves, provisions and tax credits	278	332	-	610
Tax losses	-	6	-	6
Total deferred taxation asset	278	338	-	616
Deferred taxation liabilities:
Property, plant and equipment	(1,154)	(588)	-	(1,742)
Accrued income	-	-	-	-
Profit not yet taxable	(68)	16	-	(52)
Total deferred taxation liabilities	(1,222)	(572)	-	(1,794)
Net deferred taxation liability	(944)	(234)	-	(1,178)

 

 

	Balance	Recognised in	Acquired in a	Balance
	1 January	Profit or Loss	Business combination	31 December
1 January 2020 - 31 December 2020	€'000	€'000	€'000	€'000
Deferred taxation assets:
Reserves, provisions and tax credits	610	(25)	-	585
Accrued income	-	31	-	31
Tax losses	6	471	-	477
Total deferred taxation asset	616	477	-	1,093
Deferred taxation liabilities:
Property, plant and equipment	(1,742)	(38)	-	(1,780)
Profit not yet taxable	(52)	-	-	(52)
Total deferred taxation liabilities	(1,794)	(38)	-	(1,832)
Net deferred taxation liability	(1,178)	439	-	(739)

 

Deferred taxation assets have not been recognised in respect of the following items:

	2020	2019
	€'000	€'000
Tax losses	3,269	4,112
Total	3,269	4,112

 

 

 

12.  Intangible assets and goodwill

	Product development	Goodwill	Total
	€'000	€'000	€'000
Balance at 1 January 2019	3,377	27,376	30,753
Internally developed	1,405	-	1,405
Acquisitions	-	886	886
Disposal (note 9)	-	(1,529)	(1,529)
Translation differences	-	422	422
Balance at 31 December 2019	4,782	27,155	31,937
Internally developed	1,065	-	1,065
Acquisitions (note 9)	-	4,533	4,533
Disposal (note 9)	-	-	-
Translation differences	-	(548)	(548)
Balance at 31 December 2020	5,847	31,140	36,987

 

Goodwill relates to the acquisition of the below companies, being the dates that the Group obtained control of these business:

·..... The remaining 60% of DDS-SA Pty Limited in November 2009.

·..... The 60% acquisition of Omina Supplies in August 2014.

·..... The 65% acquisition of Rotacan in August 2014.

·..... The acquisition of ABC products in August 2014.

·..... The acquisition of Ozmine in January 2015.

·..... The acquisition of Mincon Chile in March 2015.

·..... The acquisition of and Mincon Tanzania in March 2015.

·..... The acquisition of Premier in November 2016.

·..... The acquisition of Rockdrill Engineering in November 2016.

·..... The acquisition of PPV in April 2017.

·..... The acquisition of Viqing July 2017.

·..... The acquisition of Driconeq in March 2018.

·..... The acquisition of Pacific Bit of Canada in January 2019

·..... The acquisition of Lehti Group in January 2020

·..... The acquisition of Rocdrill in May 2020

 

The Group accounts for acquisitions using the purchase accounting method as outlined in IFRS 3 Business Combinations.

 

The businesses acquired were integrated with other Group operations soon after acquisition. Impairment testing (including sensitivity analysis) is performed at each period end. Group management has determined that the Group has one cash generating unit and one operating segment and therefore all goodwill is tested for impairment at Group level.

 

The recoverable amount of goodwill has been assessed based on estimates of fair value less costs to sell (FVLCS). The FVLCS valuation is calculated on the basis of a discounted cash flow ("DCF") model. The most significant assumptions within the DCF are weighted average cost of capital ("WACC"), tax rates and terminal value assumptions. Goodwill impairment testing did not indicate any impairment during any of the periods being reported. Four sensitivities are applied as part of the analysis considering the effects of changes in 1) the WACC, 2) the EBITDA margin, 3) the long term growth rate and 4) the level of terminal value capital expenditure. The sensitivities calculate downside scenarios to assess potential indications of impairments due to changes in key assumptions. The results from the sensitivity analysis did not suggest that goodwill would be impaired when those sensitivities were applied.

 

The carrying amount of the CGU was determined to be lower than its fair value less cost to sell by €68.4 million, giving management substantial headroom and comfort in the above stated impairment assessment.

 

The key assumptions used in the estimation of the fair value less cost calculation were as follows:

 

 

 

 

 

 

 

12.  Intangible assets and goodwill(continued)

 

	2020
WACC	10.5%
EBIDTA margin	17.8%
Long term growth rate	2.25%
Terminal value capital expenditure	€7.1 million

 

The WACC calculation considers market data and data from comparable public companies. Peer group data was especially considered for the beta factor and assumed financing structure (gearing level). The analysis resulted in a discount rate range of 9.60% to 11.35%. This results in a midpoint WACC being used of 10.5%.

 

The Long term growth rate of 2.25% applied is based on a weighted average of the long term inflation rates of the countries in which Mincon generates revenues and earnings.

 

The budgeted EBITDA was based on expectations of future outcomes, taking account for past experience, adjusted for anticipated revenue growth as detailed in managements approved Budget. No EBITDA margin effect is assumed in the terminal value i.e. the budgeted EBITDA margin of 17.8% for 2023 is assumed in the Terminal Value calculation used to arrive at the FVLCS.

 

Terminal value Capital expenditure assumes no balance sheet growth is assumed in the terminal value, CAPEX is assumed to equal depreciation of €7.1 million.

 

Investment expenditure of €1.1 million, which has been capitalised, is in relation to ongoing product development within the Group. Amortisation will begin at the stage of commercialisation and charged to the income statement over a period of three to five years, or the capitalised amount will be written off if the project is deemed no longer viable by management.

 

Change in estimates

During 2020, the Group performed a review of their goodwill impairment assessment method and concluded that the fair value less costs of disposal was greater than the value in use. As a result, the recoverable amount has been calculated using the fair value less costs of disposal model in the current year. There was no impact on the financial statements of this change in estimate.

 

.

 

 

 

13.  Property, plant and equipment

	Land &	Plant &	ROU
	Buildings	Equipment	Assets	Total
	€'000	€'000	€'000	€'000
Cost:
At 1 January 2019	15,650	40,347	-	55,997
Acquisitions through business combinations	-	75	-	75
Right of use asset on inception	-	-	4,683	4,683
Additions	1,223	6,707	490	8,420
Disposals	(482)	(2,913)	(455)	(3,850)
Foreign exchange differences	(163)	1,613	114	1,564
At 31 December 2019	16,228	45,829	4,832	66,889
Acquisitions through business combinations	95	2,542	3,385	6,022
Additions	387	6,835	102	7,324
Disposals and derecognition of ROU assets	-	(2,282)	(1,199)	(3,481)
Foreign exchange differences	(419)	(1,384)	(233)	(2,036)
At 31 December 2020	16,291	51,540	6,887	74,718
Accumulated depreciation:
At 1 January 2019	(2,855)	(18,212)	-	(21,067)
Charged in year	(442)	(3,456)	(1,344)	(5,242)
Disposals	279	1,582	-	1,861
Foreign exchange differences	(9)	(1,260)	-	(1,269)
At 31 December 2019	(3,027)	(21,346)	(1,344)	(25,717)
Charged in year	(461)	(4,205)	(1,816)	(6,482)
Disposals	-	1,969	432	2,401
Foreign exchange differences	68	750	82	900
At 31 December 2020	(3,420)	(22,832)	(2,646)	(28,898)
Carrying amount: 31 December 2020	12,871	28,708	4,241	45,820
Carrying amount: 31 December 2019	13,201	24,483	3,488	41,172
Carrying amount: 1 January 2019	12,795	22,135	-	34,930

Right of use assets

 

 

The depreciation charge for property, plant and equipment is recognised in the following line items in the income statement:

 

	2020	2019
	€'000	€'000
Cost of sales	4,216	3,312
General, selling and distribution expenses	922	586
General, selling and distribution expenses ROU asset	1,344	1,344
Total depreciation charge for property, plant and equipment	6,482	5,242

 

 

 

 

14.  Inventory and capital equipment

	2020	2019
	€'000	€'000
Finished goods and work-in-progress	42,326	38,212
Capital equipment	504	962
Raw materials	10,187	9,416
Total inventory	53,017	48,590

 

The Group recorded an impairment of €80,000 against inventory to take account of net realisable value during the year ended 31 December 2020 (2019: €1.7 million). Write-downs are included in cost of sales.

 

At 31 December 2020 and 31 December 2019, capital equipment are rigs held in South Africa for resale.

 

 

15.  Trade and other receivables and other current assets

 

a) Trade and other receivables

	2020	2019
	€'000	€'000
Gross receivable	21,830	21,424
Provision for impairment	(1,190)	(1,078)
Net trade and other receivables	20,640	20,346

 

	Provision for impairment
	€'000
Balance at 1 January 2020	(1,078)
Additions	(112)
Balance at 31 December 2020	(1,190)

 

 

	2020	2019
	€'000	€'000
Less than 60 days	17,878	17,112
61 to 90 days	1,350	1,659
Greater than 90 days	1,412	1,575
Net trade and other receivables	20,640	20,346

 

At 31 December 2020, €2.8 million of trade receivables balances (13%) were past due but not impaired (2019: €3.2 million (16%).

 

b) Prepayments and other current assets

	2020	2019
	€'000	€'000
Plant and machinery prepaid	1,597	3,332
Prepayments and other current assets	2,589	2,766
Prepayments and other current assets	4,186	6,098

 

 

 

 

16. Trade creditors, accruals and other liabilities

	2020	2019
	€'000	€'000
Trade creditors	10,457	10,853
Total creditors and other payables	10,457	10,853

 

 

	2020	2019
	€'000	€'000
VAT	390	207
Social security costs	1,088	674
Other accruals and liabilities	4,051	4,946
Total accruals and other liabilities	5,529	5,827

 

 

 

17.  Capital management

 

The Group's policy is to have a strong capital base in order to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital, as well as the level of dividends to ordinary shareholders.

 

The Board of Directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowing and the advantages and security afforded by a sound capital position.

 

The Group monitors capital using a ratio of 'net debt' to equity. Net debt is calculated as total liabilities less cash and cash equivalents (as shown in the statement of financial position).

 

	2020	2019
	€'000	€'000
Total liabilities	(46,163)	(39,784)
Less: cash and cash equivalents	17,045	16,368
Net debt	(29,118)	(23,416)
Total equity	132,936	126,144
Net debt to equity ratio	0.22	0.18

 

 

18.  Loans and borrowings

		2020	2020
	Maturity	€'000	€'000
Bank loans	2021-2034	11,090	4,879
Finance leases	2021-2026	5,494	5,903
Right of Use leases	2020-2029	5,027	4,140
Total loans and borrowings		21,611	14,922
Current		6,822	4,043
Non-current		14,789	10,879

 

The Group has a number of bank loans and finance leases with a mixture of variable and fixed interest rates. The Group has not been in default on any of these debt agreements during any of the periods presented. The Group has been in compliance with all debt agreements during the periods presented. The loan agreements in Ireland carry restrictive financial covenants. Interest rates on current borrowings are at an average rate of 4.56%

 

During 2020 the Group availed of the option to enter into overdraft facilities and to draw down loans of €6.6 million with interest rate between 1% and 10.5%.

 

 

 

 

 

 

18.  Loans and borrowings (continued)

 

Reconciliation of movements of liabilities to cash flows arising from financing activities

 

 

	Balance at 1 January 2020	Arising from acquisition	Cash movements	Non-cash movements	Foreign exchange differences	Balance at 31 December 2020
	€'000	€'000	€'000	€'000	€'000	€'000
Loans and borrowings	4,879	3,144	3,210	-	(143)	11,090
Finance leases	5,903	-	(1,579)	1,276	(106)	5,494
Right of use leases	4,140	3,385	-	(2,331)	(167)	5,027
Retained earnings	-	-	(2,222)	-	-	(2,222)
Total	14,922	6,529	(591)	(1,055)	(416)	19,389

 

19.  Non-controlling interest

 

  (a) Non-controlling interest

 

The following table summarises the information relating to the Group's subsidiary, Mincon West Africa SL, that has material non-controlling interests, before any intra-group eliminations. The non-controlling interest was 20%  of this subsidiary until the date of the transaction described in note 19b.

 

	2020	2019
Non-controlling Interest 20%	€'000	€'000
Non-current assets	-	97
Current assets	-	4,253
Non-current liabilities	-	-
Current liabilities	-	(874)
Net assets	-	3,476
Net assets attributable to NCI	-	695
Revenue	6,919	6,176
Profit	826	272
OCI	-	-
Total comprehensive income	826	272
Profit allocated to NCI	165	54

 

 

  (b) Acquisition of non-controlling interest

 

Mincon Group plc acquired the additional 20% interest in the voting shares of Mincon West Africa on 1 October 2020, increasing its ownership interest to 100%. The carrying amount of Mincon West Africa's NCI portion in the Group's consolidated financial statements on the date of acquisition was €1.28 million.

	€'000
Cash consideration paid to NCI	1,000
Deferred consideration due to NCI	1,000
Carrying amount of NCI acquired	(1,280)
Decrease in equity attributable to owners of the company	720

 

 

 

 

 

 

 

 

 

 

 

20.  Share capital and reserves

 

At 31 December 2020
Authorised Share Capital	Number	€000
Ordinary Shares of €0.01 each	500,000,000	5,000

 

Allotted, called-up and fully paid up shares	Number	€000
Ordinary Shares of €0.01 each	211,675,024	2,117

 

Share issuances

On 26 November 2013, Mincon Group plc was admitted to trading on the Enterprise Securities Market (ESM) of the Euronext Dublin and the Alternative Investment Market (AIM) of the London Stock Exchange.

 

 

Voting rights

The holders of Ordinary Shares have the right to receive notice of and attend and vote at all general meetings of the Company and they are entitled, on a poll or a show of hands, to one vote for every Ordinary Share they hold. Votes at general meetings may be given either personally or by proxy. Subject to the Companies Act and any special rights or restrictions as to voting attached to any shares, on a show of hands every member who (being an individual) is present in person and every proxy and every member (being a corporation) who is present by a representative duly authorised, shall have one vote, so, however, that no individual shall have more than one vote for every share carrying voting rights and on a poll every member present in person or by proxy shall have one vote for every share of which he is the holder.

 

Dividends

In September 2020, Mincon Group plc paid a final dividend for 2019 of €0.0105 (1.05 cent) per ordinary share. In September 2019, Mincon Group plc paid an interim dividend for 2019 of €0.0105 (1.05 cent) per ordinary share. In June 2019, Mincon Group plc paid a final dividend for 2018 of €0.0105 (1.05 cent) per ordinary share. 

The Board of Mincon Group plc is recommending the payment of a full year dividend for the year ended 31 December 2020 in the amount of €0.021 (2.10 cent) per ordinary share, which will be subject to approval at the Annual General Meeting of the Company in May 2021. This dividend, is in respect to an interim dividend of 1.05 cent and final dividend of 1.05 cent. Subject to Shareholder approval at the Company's annual general meeting on 28 May 2021.

 

Share premium and other reserves

As part of a Group reorganisation of the Company, Mincon Group plc, became the ultimate parent entity of the Group. On 30 August 2013, the Company acquired 100% of the issued share capital in Smithstown Holdings and acquired (directly or indirectly) the shareholdings previously held by Smithstown Holdings in each of its subsidiaries, thereby creating a merger reserve.  

 

 

 

 

 

 

 

21.  Earnings per share

 

Basic earnings per share (EPS) is computed by dividing the profit for the period available to ordinary shareholders by the weighted average number of Ordinary Shares outstanding during the period. Diluted earnings per share is computed by dividing the profit for the period by the weighted average number of Ordinary Shares outstanding and, when dilutive, adjusted for the effect of all potentially dilutive shares. The following table sets forth the computation for basic and diluted net profit per share for the years ended 31 December:

 

	2020	2019
Numerator (amounts in €'000):
Profit attributable to owners of the Parent	14,221	12,329
Denominator (Number): Basic shares outstanding Restricted share awards Diluted weighted average shares outstanding
	211,675,024	210,973,102
	4,825,517	1,546,189
	216,500,544	212,519,291
Earnings per Ordinary Share
Basic earnings per share, € Diluted earnings per share, €	6.72               6.57	5.84 5.80

 

22.  Share based payment

 

During the year ended 31 December 2020, the Remuneration Committee made a grant of approximately 3,981,250 Restricted Share Options (RSAs) to members of the senior management team.

 

The vesting conditions of the scheme state that the minimum growth in EPS shall be CPI plus 5% per annum, compounded annually, over the relevant three accounting years up to the share award of 100% of the participants

basic salary. Where awards have been granted to a participant in excess of 100% of their basic salary, the performance condition for the element that is in excess of 100% of basic salary is that the minimum growth in EPS shall be CPI plus 10% per annum, compounded annually, over the three accounting years.

Reconciliation of outstanding share awards	Number of Awards in thousand
Outstanding on 1 January 2020	1,546
Forfeited during the year	-
Exercised during the year	(702)
Granted during the year	-
Outstanding at 31 December 2020	844

 

Reconciliation of outstanding share options	Number of Options in thousands
Outstanding on 1 January 2020	-
Forfeited during the year	-
Exercised during the year	-
Granted during the year	3,981
Outstanding at 31 December 2020	3,981

 

 

 

 

23.  Financial risk management

 

The Group is exposed to various financial risks arising in the normal course of business. Its financial risk exposures are predominantly related to changes in foreign currency exchange rates and interest rates, as well as the creditworthiness of our counterparties.

 

The Company's Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework. The Board of directors has established the risk management committee, which is responsible for developing and monitoring the Group's risk management policies. The committee reports regularly to the Board of Directors on its activities.

 

The Group's risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities. The Group, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

 

The Group audit committee oversees how management monitors compliance with the Group's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.

 

a) Liquidity and capital

The Group defines liquid resources as the total of its cash, cash equivalents and short term deposits. Capital is defined as the Group's shareholders' equity and borrowings.

 

The Group's objectives when managing its liquid resources are: •           To maintain adequate liquid resources to fund its ongoing operations and safeguard its ability to continue as a going concern, so that it can continue to create value for investors; •           To have available the necessary financial resources to allow it to invest in areas that may create value for shareholders; and •           To maintain sufficient financial resources to mitigate against risks and unforeseen events.

 

Liquid and capital resources are monitored on the basis of the total amount of such resources available and the Group's anticipated requirements for the foreseeable future. The Group's liquid resources and shareholders' equity at 31 December 2020 and 31 December 2019 were as follows:

	2020	2019
	€'000	€'000
Cash and cash equivalents	17,045	16,368
Loans and borrowings	21,611	14,922
Shareholders' equity	132,936	125,029

 

The Group frequently assess its liquidity requirements, together with this requirement and the rate return of long term euro deposits, the Group has decided to keep all cash readily available that is accessible within a month or less. Cash at bank earns interest at floating rates based on daily bank deposits. The fair value of cash and cash equivalents equals the carrying amount.

 

Cash and cash equivalents are held by major Irish, European, United States and Australian institutions with credit rating of A3 or better. The Company deposits cash with individual institutions to avoid concentration of risk with any one counterparty. The Group has also engaged the services of a depository to ensure the security of the cash assets.

 

Risk of counterparty default arising on cash and cash equivalents and derivative financial instruments is controlled by dealing with high-quality institutions and by policy, limiting the amount of credit exposure to any one bank or institution.

 

The Group is also exposed to credit risk on its liquid resources (cash), of which the euro equivalent of €2.8 million was held in US dollar (USD 3.5 million), €2.4 million was held in Swedish krona (SEK 24.7 million) and the euro equivalent of €1.7 million was held Australian dollar (AUD 2.7 million). The Directors actively monitor the credit risk associated with this exposure.

 

 

 

 

23.  Financial risk management (continued)

 

a) Liquidity and capital (continued)

 

At year-end, the Group's total cash and cash equivalents were held in the following jurisdictions:

	31 December	31 December
	2020	2019
	€'000	€'000
Ireland	1,870	5,759
Americas	2,989	2,339
Australasia	1,723	1,625
Europe, Middle East, Africa	10,463	6,645
Total cash, cash equivalents and short term deposits	17,045	16,368

 

There are currently no restrictions that would have a material adverse impact on the Group in relation to the intercompany transfer of cash held by its foreign subsidiaries. The Group continually evaluates its liquidity requirements, capital needs and availability of resources in view of, among other things, alternative uses of capital, the cost of debt and equity capital and estimated future operating cash flow.

 

In the normal course of business, the Group may investigate, evaluate, discuss and engage in future company or product acquisitions, capital expenditures, investments and other business opportunities. In the event of any future acquisitions, capital expenditures, investments or other business opportunities, the Group may consider using available cash or raising additional capital, including the issuance of additional debt. The maturity of the contractual undiscounted cash flows (including estimated future interest payments on debt) of the Group's financial liabilities at 31 December were as follows:

 

	Total
	Fair Value of	Less than			More than
	Cash Flows	1 Year	1-3 Years	3-5 Years	5 Years
	€'000	€'000	€'000	€'000	€'000
At 31 December 2019:
Deferred contingent consideration	4,962	2,452	2,510	-	-
Loans and borrowings	4,879	1,441	847	782	1,809
Finance leases	5,903	1,244	2,895	1,764	-
Right of use leases	4,140	1,360	1,807	735	238
Trade and other payables	10,853	10,853	-	-	-
Accrued and other financial liabilities	5,827	5,827	-	-	-
Total at 31 December 2019	36,564	23,177	8,059	3,281	2,047
At 31 December 2020:
Deferred contingent consideration	4,723	2,068	2,186	359	110
Loans and borrowings	11,090	3,666	3,875	1,881	1,668
Finance leases	5,494	1,448	2,924	1,030	92
Right of use leases	5,027	1,707	2,449	850	21
Trade and other payables	10,457	10,457	-	-	-
Accrued and other financial liabilities	5,529	5,529	-	-	-
Total at 31 December 2020	42,320	24,875	11,434	4,120	1,891

 

b) Foreign currency risk

The Group is a multinational business operating in a number of countries and the euro is the presentation currency. The Group, however, does have revenues, costs, assets and liabilities denominated in currencies other than euro.

 

Transactions in foreign currencies are recorded at the exchange rate prevailing at the date of the transaction. The resulting monetary assets and liabilities are translated into the appropriate functional currency at exchange rates prevailing at the reporting date and the resulting gains and losses are recognised in the income statement. The Group manages some of its transaction exposure by matching cash inflows and outflows of the same currencies. The Group does not engage in hedging transactions and therefore any movements in the primary transactional currencies will impact profitability. The Group continues to monitor appropriateness of this policy

 

 

 

 

23.  Financial risk management (continued)

 

b) Foreign currency risk (continued)

 

The Group's global operations create a translation exposure on the Group's net assets since the financial statements of entities with non-euro functional currencies are translated to euro when preparing the consolidated financial statements. The Group does not use derivative instruments to hedge these net investments.

 

The principal foreign currency risks to which the Group is exposed relate to movements in the exchange rate of the euro against US dollar, South African rand, Australian dollar, Swedish krona and Canadian dollar.

 

The Group has material subsidiaries with a functional currency other than the euro, such as US dollar, Australian dollar, South African rand, Canadian dollar, British pound and Swedish krona.

 

The Group's worldwide presence creates currency volatility when compared year on year. During 2020, currencies were extremely volatile due to the Covid-19 Global pandemic, however the euro remained relatively steady against all major currencies the Group trades in.

 

The US dollar, the largest currency the Group trades in outside the euro began to weaken at the beginning of H2 2020, and steadily declined during that period and ended the year 9% weaker compared with 2019 year end. This weakening was directly linked with economic uncertainty, with the US presidential elections tension that continued in 2021 while in the midst of the Covid-19 Global pandemic.

 

In South Africa, where Mincon has a large presence in relative terms to the Group, the South Africa rand weakened at the beginning of the Covid-19 Global pandemic as South Africa temporarily closed a large portion of its economy and more specifically most of its mining sector. However, the South African rand did recover towards the latter stages of 2020 and finished 14% behind the year end 2019.

 

The Australian dollar weakened in 2019, and the beginning of the Covid-19 Global pandemic compounded this in Q1 2020, as the Australian economy is very much dependent on the mining sector. As mining proved to be resilient during this pandemic the Australian dollar began to recover through the remainder of the year and finished 2020 flat against the euro.

 

·      The US dollar decreased by 9% against the closing 2019 euro rate (2019 increase of 2% against 2018).

·      The Australian dollar remained flat against the closing 2019 euro rated (2019 increase of 2% against 2018).

·      The South African rand has decreased 14% against the closing 2019 euro rated (2019 increase of 4% against 2018).

·      The Swedish Krona has increased 4% against the closing 2019 euro rated (2019 decrease of 3% against 2018).

 

In 2020, 57% (2019: 60%) of Mincon's revenue €130 million (2019: €124 million) was generated in AUD, SEK and USD. The majority of the Group's manufacturing base has a euro, US dollar or Swedish Krona cost base. While Group management makes every effort to reduce the impact of this currency volatility, it is impossible to eliminate or significantly reduce given the fact that the highest grades of our key raw materials are either not available or not denominated in these markets and currencies. Additionally, the ability to increase prices for our products in these jurisdictions is limited by the current market factors.

 

	2020		2019
Euro exchange rates	Closing	Average	Closing	Average
US Dollar	1.22	1.14	1.12	1.11
Australian Dollar	1.59	1.66	1.59	1.61
South African Rand	17.91	18.76	15.72	15.93
Swedish Krona	10.06	10.48	10.51	10.53

 

 

 

 

 

 

23.  Financial risk management (continued)

 

c) Credit risk

 

Credit risk is the risk that the possibility that the Group's customers may experience financial difficulty and be unable to meet their obligations. The Group monitors its collection experience on a monthly basis and ensures that a stringent policy is adopted to provide for all past due amounts. The majority of the Group's customers are third party distributors and end users of drilling tools and equipment.

 

Expected credit loss assessment

The Group allocates each exposure to a credit risk grade based on data that is determined to be predictive of the risk of loss and applying experienced credit judgement. Credit risk grades are defined using quantitative factors that are indicative of the risk of default and are aligned to past experiences. Loss rates are based on accrual credit loss experience over the past five years.

 

The maximum exposure to credit risk for trade and other receivables at 31 December 2020 and 31 December 2019 by geographic region was as follows:

 

	2020	2019
	€'000	€'000
Ireland	121	88
Americas	7,298	6,141
Australasia	2,540	4,495
Europe, Middle East, Africa	10,681	9,622
Total amounts owed	20,640	20,346

 

The Group is also exposed to credit risk on its liquid resources (cash), of which the euro equivalent of €2.8 million was held in US dollar (USD 3.5 million), €2.4 million was held in Swedish krona (SEK 24.7 million) and the euro equivalent of €1.7 million was held Australian dollar (AUD 2.7 million). The Directors actively monitor the credit risk associated with this exposure, cash and cash equivalents are held by major Irish, European, United States and Australian institutions with credit rating of A3 or better.

 

d) Interest rate risk

 

Interest Rate Risk on financial liabilities Movements in interest rates had no significant impact on our financial liabilities or finance cost recognised in either 2019 or 2020.   Interest Rate Risk on cash and cash equivalents Our exposure to interest rate risk on cash and cash equivalents is actively monitored and managed, the rate risk on cash and cash equivalents is not considered material to the Group.

 

e) Fair values

 

Fair value is the amount at which a financial instrument could be exchanged in an arms-length transaction between informed and willing parties, other than in a forced or liquidation sale. The contractual amounts payable less impairment provision of trade receivables, trade payables and other accrued liabilities approximate to their fair values. Under IFRS 7, the disclosure of fair values is not required when the carrying amount is the reasonable approximation of fair value.

 

There are no material differences between the carrying amounts and fair value of our financial liabilities as at 31 December 2019 or 2020.

 

Financial instruments carried at fair value

The deferred contingent consideration payable represents management's best estimate of the fair value of the amounts that will be payable, discounted as appropriate using a market interest rate. The fair value was estimated by assigning probabilities, based on management's current expectations, to the potential pay-out scenarios.

 

 

 

23.  Financial risk management (continued)

 

e) Fair values (continued)

 

Movements in the year in respect of Level 3 financial instruments carried at fair value

The movements in respect of the financial assets and liabilities carried at fair value in the year to 31 December 2020 are as follows:

	Deferred contingent consideration
	€'000
Balance at 1 January 2020	4,962
Arising on acquisition	1,257
Purchase of NCI	1,000
Cash payment	(2,460)
Foreign currency translation adjustment	(25)
Fair value movement on deferred contingent consideration	(11)
Balance at 31 December 2020	4,723

 

 

 

24.  Subsidiary undertakings

 

At 31 December 2020 the Group had the following subsidiary undertakings:

 

Company	Group Share %	Registered Office & Country of Incorporation
Mincon International Limited	100%	Smithstown, Shannon, Co. Clare, Ireland
Manufacturer of rock drilling equipment
Mincon Rockdrills PTY Ltd	100%	8 Fargo Way, Welshpool, WA 6106, Australia
Manufacturer of rock drilling equipment
1676427 Ontario Inc. (Operating as Rotacan)	100%	400B Kirkpatrick Street, North Bay, Ontario, P1B 8G5, Canada
Manufacturer of rock drilling equipment
Mincon Carbide Ltd	100%	Windsor St, Sheffield S4 7WB, United Kingdom
Manufacturer of tungsten carbide
Viqing Drilling Equipment AB	100%*	Svarvarevagen 1, SE-686 33 Sunne, Sweden
Manufacturer of drill pipe equipment
Mincon Inc.	100%	603 Centre Avenue, N.W. Roanoke, VA 24016, USA
Sales company
Mincon Sweden AB	100%	Industrivagen 2-4, 61202 Finspang, Sweden
Sales company
Mincon Nordic OY	100%	Hulikanmutka 6, 37570 Lempäälä, Finland
Sales company
Mincon Holdings Southern Africa (Pty)	100%	1 Northlake, Jetpark 1469, Gauteng, South Africa
Sales company
ABC Products (Rocky) Pty Ltd	100%	2/57 Alexandra Street, North Rockhampton, Queensland, 4701 Australia
Sales company
Mincon West Africa SARL	80%	Villa TF 4635 GRD, Almadies, Dakar B.P. 45534, Senegal
Dormant company
Mincon West Africa SL	100%	Calle Adolfo Alonso Fernández, s/n, Parcela P-16, Planta 2, Oficina 23, Zona Franca de Gran Canaria, Puerto de la Luz, Código Postal 35008, Las Palmas de Gran Canari
Sales company
Mincon Poland	100%	ul.Mickiewicza 32, 32-050 Skawina, Poland
Dormant company
Pacific Bit of Canada	100%	9485 189 Unit204, Surrey, BC V4N 5L8, Canada
Sales company

 

 

24.  Subsidiary undertakings (continued)

 

Company	Group Share %	Registered Office & Country of Incorporation
Mincon Rockdrills Ghana Limited	100%	P.O. Box CT5105, Accra, Ghana
Dormant company
Mincon S.A.C.	100%	Calle La Arboleda 151, Dpto 201, La Planicie, La Molina, Peru
Sales company
Ozmine International Pty Limited	100%	Gidgegannup, WA 6083, Australia
Sales company
Mincon Chile	100%	Av. La Dehesa #1201, Torre Norte, Lo Barnechea, Santiago, Chile
Sales company
Mincon Tanzania	100%	Plot 1/3 Nyakato Road, Mwanza, Tanzania
Dormant company
Mincon Namibia Pty Ltd	100%	Ausspannplatz, Windhoek, Namibia
Sales company
Mincon Russia	100%	4,4 Lesnoy In,125047  Moscow, Russia
Dormant Company
Mincon Mining Equipment Inc	100%*	19789-92a Avenue, Langley, British Columbia V1M3B3, Canada
Sales company
Pirkanmaan Poraveikot OY PPV	100%*	Hulikanmutka 6, 37570 Lempäälä, Finland
Engineering company
Mincon Exports USA Inc.	100%	603 Centre Ave, Roanoke VA 24016, USA
Group finance company
Mincon International Shannon	100%*	Smithstown, Shannon, Co. Clare, Ireland
Dormant company
Smithstown Holdings	100%	Smithstown, Shannon, Co. Clare, Ireland
Holding company
Mincon Canada Drilling Products Inc.	100%	Suite 1800-355 Burrard Street, Vancouver, BC V6C 268, Canada
Holding company
Lotusglade Limited	100%*	Smithstown, Shannon, Co. Clare, Ireland
Holding company
Floralglade Company	100%	Smithstown, Shannon, Co. Clare, Ireland
Holding company
24.  Subsidiary undertakings (continued)

 

Company	Group Share %	Registered Office & Country of Incorporation
Castle Heat Treatment Limited	100%*	Smithstown, Shannon, Co. Clare, Ireland
Holding company
Mincon Microcare Limited	100%*	Smithstown, Shannon, Co. Clare, Ireland
Holding company
Cebeko Elast AB	100%*	Svarvarevagen 1, SE-686 33 Sunne, Sweden
Holding company
Driconeq AB	100%	Svetsarevägen 4, 686 33, Sunne, Sweden
Holding company
Driconeq Production AB	100%	Svetsarevägen 4, 686 33, Sunne, Sweden
Manufacturing facility
Driconeq Fastighet AB	100%	Svetsarevägen 4, 686 33, Sunne, Sweden
Property holding company
Driconeq Do Brasil	100%	Rua Dr. Ramiro De Araujo Filho, 348, Jundai, SP, Brasil
Sales company
Driconeq Africa Ltd	100%	Cnr of Harriet and James Bright Avenue, Driehoek. Germiston 1400
Manufacturing facility
Driconeq Australia Holdings Pty Ltd	100%	47 Greenwich Parade, AU-6031 Neerabup, WA, Australia
Holding company
Driconeq Australia Pty Ltd	100%	47 Greenwich Parade, AU-6031 Neerabup, WA, Australia
Manufacturing facility
Mincon Drill String AB	100%	Svetsarevägen 4, 686 33, Sunne, Sweden
Holding company
EURL Roc Drill	100%	Rue Charles Rolland, 29650 Guerlesquin, France

 

 

 

25.  Leases

 

A.   Leases as Lessees (IFRS 16) 

 

The group leases property, plant and equipment across its global operations.

 

During 2020, one of the leased properties in Finland was sublet. The lease and sublease expire in 2023

 

During 2019, one of the leased properties in Australia was sublet. The lease and sublease expire in 2024.

 

The Group leases IT and other equipment with contract terms of less than 12 months and also for low value items.

The Group has elected not to recognise right-of -use assets and lease liabilities for these leases in line with availing of the exemptions for such leases allowable under IFRS16.

 

Information about leases for which the Group is a lessee is presented below.

 

 

i)          Right-of-use assets                                                                                                                                 

		31 December 2019
		€'000
Balance at 1 January		4,683
Depreciation charge for the year		(1,344)
Additions to right of use assets		490
Derecognition of right of use asset*		(455)
Foreign exchange difference		114
Balance at 31 December 2019		3,488
	31 December 2020
	€'000
Balance at 1 January	3,488
Depreciation charge for the year	(1,816)
Additions to right of use assets	3,487
Disposal of right of use asset	(536)
Derecognition of right of use asset*	(231)
Foreign exchange difference	(151)
Balance at 31 December 2020	4,241

*Derecognition of the right of use asset during 2020 is as a result of entering into a finance sub-lease.

.

 

 

ii)          Amounts recognised in income statement.

	2020	2019
	€'000	€'000
Interest on lease liabilities	332	247
Expenses related to short term leases	314	363
Expenses related to leases of low value assets	95	28
-Leases under IFRS 16	741	638

 

 

 

iii)         Amounts recognised in statement of cash flows

	2020	2019
	€'000	€'000
Total cash outflow for leases	1,579	2,121
Total cash outflow of leases	1,579	2,121

 

 

25.  Leases (continued)

 

iv)         Extension options

 

Some property leases contain extension options exercisable by the Group. The Group assesses at lease commencement date whether it is reasonably certain to exercise the extension options. The Group is reasonably certain it will not incur future lease liabilities beyond what is currently calculated.

 

B.   Leases as Lessor (IFRS 16)

 

i)          Financing Lease

The group subleased a properties that had been recognised as a right of use asset in Finland and Australia. The group recognised income interest in the year in relation to this totalling  €143,000.

 

The following table sets out a maturity analysis of lease receivable, showing the undiscounted lease payments to be received after the reporting date.

 

	31 December 2020	31 December 2019
	€'000	€'000
Less than one year	188	138
One to two years	185	138
Two to three years	140	135
Three to four years	-	135
More than five years	-	-
Balance at 31 December 2020	513	546
Unearned finance income	(43)	(62)
Total undiscounted lease receivable	470	484

 

ii)          Operating leases

                                                                                                                       

The group leases company owned property out to tenants in the USA under various agreements. The group recognises these leases as operating leases from a lessor perspective due to the fact they do not transfer substantially all of the risks and rewards incidental to the ownership of the assets. 

 

Rental income recognised by the Group during 2020 was €213,000 (2019: €125,000). 

 

The following table sets out a maturity analysis of lease receivable, showing the undiscounted lease payments to be received after the reporting date.

 

		31 December 2020
		€'000
Less than one year		107
One to two years		67
Two to three years		21
Three to four years		-
More than five years		-
Total		195

 

 

 

26.  Commitments

 

The following capital commitments for the purchase of property, plant and equipment had been authorised by the directors at 31 December 2020:

 

	31 December	31 December
	2020	2019
	€'000	€'000
Contracted for	3,044		358
Not-contracted for	521		-
Total	3,565		358

 

27.  Litigation

 

The Group is not involved in legal proceedings that could have a material adverse effect on its results or financial position.

 

28.  Related parties

 

As at 31 December 2020, the share capital of Mincon Group plc was 56.54% owned by Kingbell Company which is ultimately controlled by Patrick Purcell and members of the Purcell family. Patrick Purcell is also a director of the Company.

 

In September 2020, the Group paid a final dividend for 2019 of €0.0105 to all shareholders. The total dividend paid to Kingbell Company was €1,256,551 (September 2019: €1,256,551).

 

The Group has a related party relationship with its subsidiary and its joint venture undertakings (see note 24) for a list of these undertakings), directors and officers. All transactions with subsidiaries eliminate on consolidation and are not disclosed.

 

Transactions with Directors

The Group is owed €Nil from directors and shareholders at 31 December 2020 and 2019. The Group has amounts owing to directors of €Nil as at 31 December 2020 and 2019.

 

Key management compensation

The profit before tax from continuing operations has been arrived at after charging the following key management compensation:

	2020	2019
	€'000	€'000
Short term employee benefits	1,441	1,369
Share based payment charged in the year	-	67
Bonus and other emoluments	347	10
Post-employment contributions	126	68
Social security costs	86	133
Total	2,000	1,647

 

The key management compensation amounts disclosed above represent compensation to those people having the authority and responsibility for planning, directing and controlling the activities of the Group, which comprises the Board of Directors and executive management (ten in total at year end). Amounts included above are time weighted for the period of the individuals employment.

 

 

 

 

29.  Events after the reporting date

 

The Board of Mincon Group plc is recommending the payment of a full year dividend for the year ended 31 December 2020 in the amount of €0.021 (2.10 cent) per ordinary share, which will be subject to approval at the Annual General Meeting of the Company in May 2021. This dividend, is in respect to an interim dividend of 1.05 cent and final dividend of 1.05 cent. Subject to Shareholder approval at the Company's annual general meeting, the final dividend will be paid on 18 June 2021 to Shareholders on the register at the close of business on 28 May 2021.

 

Acquisition of the Hammer Drilling Rigs

 

On 1 January 2021, the Group completed the acquisition of the Hammer Drilling Rigs (HDR), a specialist in supply of hard rock drilling attachments based in the USA, for a consideration of €2.1 million. There is zero goodwill arising on acquisition as the Group acquired the IP of the business, the full consideration will be amortised over the next five years.  

 

 

30.  Approval of financial statements

 

The Board of Directors approved the consolidated financial statements on 19 March 2021.