Australasian Mining Services Pty Ltd
ABN 83 612 994 822
Annual Report for the year ended 31 December 2022
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Australasian Mining Services Pty Ltd
31 December 2022
TABLE OF CONTENTS
Directors' report ............................................................................................................................................. 3
Auditor's independence declaration ........................................................................................................... 5
Statement of profit or loss and other comprehensive income ................................................................. 6
Statement of financial position .................................................................................................................... 7
Statement of changes in equity .................................................................................................................. 8
Statement of cash flows ............................................................................................................................... 9
Notes to the financial statements ............................................................................................................. 10
Directors' declaration .................................................................................................................................. 23
independent auditor's report ...................................................................................................................... 24
2
Australasian Mining Services Pty Ltd
Directors' report
For the year ended 31 December 2022
The directors present their report, together with the financial statements, consisting of Australasian Mining Services Pty Ltd
(referred to hereafter as the 'company') for the year ended 31 December 2022.
Directors
The following persons were directors of Australasian Mining Services Pty Ltd during the year and up to the date of this report
unless otherwise stated:
Andrew Andreou Director
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GuoZhu Liu Director
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HeHong Richard Wu Director
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Paul James Mander Director
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Jieqiang Qin Director
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Principal activities
The principal activities of the company during the year was sales and after-sales service to the mining and drilling industry.
Dividends
A total of $6,500,000 in dividends was declared on 1 February 2023 in relation to the year ended 31 December 2022. A total
of $5,000,000 in dividends was declared and paid during the year ended 31 December 2022 in relation to the year ended 31
December 2021.
Review of operations
The profit for the company after providing for income tax was $10,744,870 (2021: $9,831,431).
Significant changes in the state of affairs
There were no other significant changes in the state of affairs of the company during the financial year.
Events subsequent to reporting date
On 1 February 2023, a dividend of $6,500,000 in total was declared and fully paid from the retained profits of the company
by cash, in satisfaction of part of the dividend policy agreed by the shareholders of the company under the Shareholders
agreement.
Other than the above, no other matter or circumstance has arisen since 31 December 2022 that has significantly affected,
or may significantly affect the company's operations, the results of those operations, or the company's state of affairs in
future financial years.
Likely developments and expected results of operations
Information on likely developments in the operations of the company and the expected results of operations have not been
included in this report because the directors believe it would be likely to result in unreasonable prejudice to the company.
Environmental regulation
The company is not subject to any significant environmental regulation under Australian Commonwealth or State law.
Shares options and interest
No options over issued shares or interests in the company were granted during or since the end of the financial year and
there were no options outstanding at the date of this report.
Indemnity and insurance of auditor
The company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
company or any related entity against a liability incurred by the auditor.
During the financial year, the company has not paid a premium in respect of a contract to insure the auditor of the company
or any related entity.
Proceedings on behalf of the company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the company, or to intervene in any proceedings to which the company is a party for the purpose of taking responsibility
on behalf of the company for all or part of those proceedings.
3
Australasian Mining Services Pty Ltd
Directors' report
For the year ended 31 December 2021
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 3070 of the Corporations Act 2001 is set out
immediately after this directors' report.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001
On behalf of the directors
Andrew Andreou
Director
15 March 2023
Perth, Western Australia
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
1+61(0)892619100
F +61 (0) 8 9261 9111
wwwrsmcom,au
AUDITOR'S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Australasian Mining Services Pty Ltd for the year ended 31
December 2022, I declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii) any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
Perth, WA TUTU PHONG
Dated: 15 March 2023 Partner
THE POWER OF BEING UNDERSTOOD
AUDIT I TAX I CONSULTING
RSM Australia Partners isa member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network Is not itself a separate legal entity in any Jurisdiction.
RSM Austraiia Partners AEN 36 966 185 035
Liability limited by a scheme approved under Professional Standards Legislation
Australasian Mining Services Pty Ltd
Statement of profit or loss and other comprehensive income
For the year ended 31 December 2022
31 December 2022 31 December 2021
$ $
Revenue from continuing operations 4 75,439,632 63,391,399
Cost of sales 6 (52,088,224) (42,230,275)
Gross profit 23,351,408 21,161,124
Other income 5 144,085 60,464
Expenses
Sales expenses (2,374,434) (2,428,150)
Management expenses (1,285,048) (1,077,619)
Warehouse expenses (1,957,302) (1,411,197)
Administrative expenses (2,314,050) (2,173,214)
Financial expenses 6 (177,904) (75,573)
Profit before income tax expense 15,386,755 14,055,835
Income tax expense 7 (4,641,885) (4,224,404)
Profit after income tax expense 10.744,870 9,831,431
Other comprehensive income for year, net of tax
Total comprehensive income for the year 10,744,870 9,831,431
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
6
Australasian Mining Services Pty Ltd
Statement of Financial Position
As at 31 December2022
Note 31 December 2022 31 December 2021
$ $
Assets
Current assets
Cash and cash equivalents 8 9,101,740 8,214,324
Trade and other receivables 9 12,534,502 11,783,039
Inventories 10 23,723,950 24,095,670
Total current assets 45,360,192 44,093,033
Non -current assets
Plant and equipment 11 1,132,387 895,777
Intangibles 12 14,467 17,614
Security bond 40,150 -
Deferred tax assets 13 405,792 361,795
Right of use assets 14 3,185,351 3,109,070
Total non -current assets 4,778,147 4,384,256
Total assets 50,138,339 48,477,289
Liabilities
Current liabilities
Trade and other payables 15 10,796,486 15,156,758
Provision for income tax 20 356,202 606,729
Provision for employee entitlements 21 221,900 216,035
Lease liabilities 16 471,609 399,734
Borrowings 22 168,051 80,520
Total current liabilities 12,014,248 16,459,776
Non -current liabilities
Provision for employee entitlements 21 95,175 53,347
Deferred tax liabilities 17 297,077 197,819
Lease liabilities 16 2,892,284 2,790,557
Borrowings 22 264,610 145,715
Total non -current liabilities 3,549,146 3,187,438
Total liabilities 15,563,394 19,647,214
Net assets 34,574,945 28,830,075
Equity
Issued capital 18 9,013,481 9,013,481
Retained earnings 19 25,561,464 19,816,594
Total equity 34,574,945 28,830,075
The above statement of financial position should be read in conjunction with the accompanying notes
Australasian Mining Services Pty Ltd
Statement of Changes in Equity
For the year ended 31 December 2022
Issued Retained Total equity
capital earnings
$ $ $
Balance at 1 January 2022 9,013,481 19,816,594 28,830,075
Profit after income tax expense for the year -
10,744,870 10,744,870
Total comprehensive income for the year -
-
10,744,870 10,744,870
Transactions with owners in their capacity as owners.
Dividends paid or payable (Note 26) -
(5,000,000) (5,000,000)
Balance at 31 December 2022 9,013,481 25,561,464 34,574,945
Balance at 1 January 2021 9,013,481 14,985,163 23,998,644
Profit after income tax expense for the year -
9,831,431 9,831,431
Total comprehensive income for the year -
9,831,431 9,831,431
Transactions with owners in their capacity as owners:
Dividends paid or payable (Note 26) -
(5,000,000) (5,000,000)
Balance at 31 December 2021 9,013,481 19,816,594 28,830,075
The above statement of changes in equity should be read in conjunction with the accompanying notes
8
Australasian Mining Services Pty Ltd
Statement of Cash Flows
For the year ended 31 December 2022
31 December 2022 31 December 2021
$ $
Cash flows from operating activities
Receipts from customers 74,680,353 60,483,893
Payments to suppliers and employees (63,157,031) (50,995,237)
Interest received 7,818 1,634
Interest paid (160,048) (178,713)
Taxes paid (4,837,152) (4,060,787)
Net cash flows provided by operating activities 6,533,940 5,250,790
Cash flows from investing activities
Payments for plant and equipment (544,626) (505,123)
Payments for intangibles (7,165) (2,324)
Proceeds from sale of plant and equipment 110,000 36,182
Net cash flows used in investing activities (441,791) (471,265)
Cash flows from financing activities
Payment of dividends (5,000,000) (5,000,000)
Proceeds from borrowings 334,449 194,720
Repayment of borrowings (128,023) (45,317)
Repayment of lease liabilities (411,159) (336,453)
Net cash flows used in financing activities (5,204,733) (5,187,050)
Net increase/(decrease) in cash and cash equivalents 887,416 (407,525)
Cash and cash equivalents at beginning of year 8,214,324 8,621,849
cash and cash equivalents at end of year 9,101,740 8,214,324
The above statement of cash flows should be read in conjunction with the accompanying notes
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Australasian Mining Services Pty Ltd
Notes to the financial statements
31 December2022
1. General information
Australasian Mining Services Pty Ltd (the "company") is a company limited by shares, incorporated and domiciled in Australia.
The registered office and principal place of business is at 303 Berkshire Road, Forrestfield WA 6058.
The financial statements cover Australasian Mining Services Pty Ltd as an individual entity. The financial statements are
presented in Australian dollars, which is the company's functional and presentation currency.
2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated.
New, revised or amending Accounting Standards and Interpretations adopted
The company has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial
performance or position of the company.
Basis of preparation
These general purpose financial statements have been prepared in accordance with the Australian Accounting Standards -
Simplified Disclosures issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as
appropriate for for-profit oriented entities.
Historical cost convention
The financial statements have been prepared under the historical cost convention.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the company's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements, are disclosed in Note 3.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions andfrom the translation
at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in
profit or loss.
The following significant accounting policies have been adopted in the preparation and presentation of the financial report:
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Australasian Mining Services Pty Ltd
Notes to the financial statements
31 December2022
2. Significant accounting policies (cont'd)
Revenue recognition
Revenue is recognised as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the company is expected to be entitled in
exchange for transferring goods or services to a customer. For each contract with a customer, the company: identifies the
contract with a customer; identifies the performance obligations in the contract; determines the transaction price which takes
into account estimates of variable consideration and the time value of money; allocates the transaction price to the separate
performance obligations on the basis of the relative stand-alone selling price of each distinct good or service to be delivered;
and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the
customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts,
rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates
are determined using either the 'expected value' or 'most likely amount' method. The measurement of variable consideration
is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly probable that a
significant reversal in the amount of cumulative revenue recognised will not occur. The measurement constraint continues
until the uncertainty associated with the variable consideration is subsequently resolved. Amounts received that are subject
to the constraining principle are recognised as a refund liability.
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods, which is
generally at the time of delivery.
Interest
Interest revenue is recognised as interest accrues.
Other re venue
Other revenue is recognised when it is received or when the right to receive payment is established.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable
income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary
differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the
assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
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When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor
taxable profits; or
-
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, arid the
timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable
future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary differences and tosses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax
assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the
carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable
that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against
current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on
either the same taxable entity or different taxable entities which intend to settle simultaneously.
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Australasian Mining Services Pty Ltd
Notes to the financial statements
31 December 2022
2. Significant accounting policies (cont'd)
Current and non -current classification
Assets and liabilities are presented in the statement of financial position based on current and non -current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the company's
normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the
reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for
at least 12 months after the reporting period. All other assets are classified as non -current.
A liability is classified as current when: it is either expected to be settled in the company's normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional
right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as
non -current.
Deferred tax assets and liabilities are always classified as non -current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30
days.
The company has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss
allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Inventories
Inventories are valued at the lower of cost and net realisable value. Cost of purchased inventory is determined on the basis
of weighted average costs. Cost of manufactured and work in progress stock includes direct materials, direct labour, and an
appropriate proportion of variable and fixed factory overhead expenditure directly related to production. These costs are
assigned to all items of inventory on a standard cost basis.
Stock in transit is stated at the lower of cost and net realisable value, Cost comprises of purchase and delivery costs, net of
rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion
and the estimated costs necessary to make the sale.
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Australasian Mining Services Pty Ltd
Notes to the financial statements
31 December 2022
2. Significant accounting policies (cont'cl)
Property, plant and equipment
Property, plant and equipment are measured on the cost basis less where applicable, any accumulated depreciation and
impairment losses. The carrying amount of property, plant and equipment is reviewed annually by directors to ensure it is not
in excess of the recoverable amount from those assets. The recoverable amount is assessed on the basis of the expected
net cash flows which will be received from the asset's employment and subsequent disposal. The expected net cash flows
have not been discounted to present values in determining recoverable amounts.
The depreciable amount of all property, plant and equipment are depreciated on a straight-line basis over their estimated
useful lives to the company commencing from the time the asset is held ready for use.
The useful lives of property, plant and equipment have been estimated to be:
Electrical equipment 5 years
Machinery 10 years
Leasehold improvements 3-5 years
Motor vehicles 4 years
Other plant and equipment 10 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
Leasehold improvements and plant and equipment under lease are depreciated over the unexpired period of the lease or
the estimated useful life of the assets, whichever is shorter.
An item of plant and equipment is derecognised upon disposal or when there is no future economic benefit to the company.
Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss. Any revaluation surplus
reserve relating to the item disposed of is transferred directly to retained profits.
Intangible assets
Intangible assets acquired separately are initially recognised at cost. Finite life intangible assets are subsequently measured
at cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising from the derecognition
of intangible assets are measured as the difference between net disposal proceeds and the carrying amount of the intangible
asset. The method and useful lives of finite life intangible assets are reviewed annually. Changes in the expected pattern of
consumption or useful life are accounted for prospectively by changing the amortisation method or period.
Software
Significant costs associated with software are deferred and amortised on a straight-line basis over the period of their expected
benefit, being their finite life of 5 years.
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Australasian Mining Services Pty Ltd
Notes to the financial statements
31 December 2022
2. Significant accounting policies (cont'd)
Right -of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right -of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the
cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and
restoring the site or asset.
Right -of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful
life of the asset, whichever is the shorter. Where the company expects to obtain ownership of the leased asset at the end of
the lease term, the depreciation is over its estimated useful life. Right -of use assets are subject to impairment or adjusted for
any remeasurement of lease liabilities.
The company has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with
terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss
as incurred.
Impairment of non -financial assets
Non -financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount
exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in -use. The value -in -use is the
present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or
cash -generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to
form a cash -generating unit.
Trade and other payables
These amounts represent liabilities for goods and services provided to the company prior to the end of the financial year and
which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts
are unsecured and are usually paid within 30 days of recognition.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or,
if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments comprise of fixed
payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected
to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably
certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or a
rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if
there is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee;
lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is
made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right -of-use asset is fully written
down.
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Australasian Mining Services Pty Ltd
Notes to the financial statements
31 December2022
2. Significant accounting policies (cont'd)
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non -monetary benefits, annual leave and long service leave expected to be settled
within 12 months of the reporting date are recognised in current liabilities in respect of employees' services up to the reporting
date and are measured at the amounts expected to be paid when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are
recognised in non -current liabilities, provided there is an unconditional right to defer settlement of the liability. The liability is
measured as the present value of expected future payments to be made in respect of services provided by employees up to
the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels,
experience of employee departures and periods of service. Expected future payments are discounted using market yields at
the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the
estimated future cash oufflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the company.
Goods and Services Tax ('GST) and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of
the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
15
Australasian Mining Services Pty Ltd
Notes to the financial statements
31 December 2022
2. Significant accounting policies (cont'd)
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial
measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at either
amortised cost or fair value depending on their classification. Classification is determined based on both the business model
within which such assets are held and the contractual cash flow characteristics of the financial asset unless, an accounting
mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the
company has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of
recovering part or all of a financial asset, it's carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as
financial assets at fair value through profit or loss. Typically, such financial assets will be either: (i) held for trading, where they
are acquired for the purpose of selling in the short-term with an intention of making a profit, or a derivative; or (ii) designated
as such upon initial recognition where permitted. Fair value movements are recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the company intends to
hold for the foreseeable future and has irrevocably elected to classify them as such upon initial recognition.
Impairment of financial assets
The company recognises a loss allowance for expected credit losses on financial assets which are either measured at
amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon the
company's assessment at the end of each reporting period as to whether the financial instrument's credit risk has increased
significantly since initial recognition, based on reasonable and supportable information that is available, without undue cost or
effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12 -month expected credit
loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a
default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is
determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit
losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of
anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance is recognised within other
comprehensive income. In all other cases, the loss allowance is recognised in profit or loss.
Provisions
Provisions are recognised when the company has a present (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 using the best estimate of the amounts required to settle the obligation at the end of the reporting
period.
Australasian Mining Services Pty Ltd
Notes to the financial statements
31 December 2022
3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses.
Management bases its judgements, estimates and assumptions on historical experience and on other various factors,
including expectations of future events, management believes to be reasonable under the circumstances. The resulting
accounting jucigements and estimates will seldom equal the related actual results. The judgements, estimates and
assumptions in these financial statements that have a significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year are disclosed below.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the
lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit
loss rate for each group. These assumptions include recent sales experience and historical collection rates.
Provision for impairment of inventories
The provision for impairment of inventories assessment requires a degree of estimation and judgement. The level of the
provision is assessed by taking into account the recent sales experience, the ageing of inventories and other factors that
affect inventory obsolescence.
4. Revenue
31 December 2022 31 December 2021
$ $
Revenue from contracts with customers
Sale of goods mining equipment
-
75,439,632 63,391,399
75,439,632 63,391,399
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
31 December 2022 31 December 2021
$ S
Geographical regions
Australia 73,090,765 61,933,480
USA 95,505 587,863
New Zealand -
6,789
Rest of the World 2,253,362 863,267
75,439,632 63,391,399
Timing of revenue recognition.
Goods transferred at a point in time 75,439,632 63,391,399
17
Australasian Mining Services Pty Ltd
Notes to the financial statements
31 December2022
5. Other income
31 December 2022 31 December 2021
$ $
Interest received 7,818 1,634
Other Inca me 35,035 30,996
Gain on disposal of property, plant and equipment 101 .232 27.834
144,085 60,464
6. Expenses
31 December 2022 31 December 2021
$ $
Profit before income tax includes the following specific expenses:
Cost of sales
Cost of sales 52,088,224 42,230,275
Finance costs
Interest and finance charges on borrowings 17,857 6,490
Interest and finance charges on lease liabilities 160,047 69,083
177,904 75.573
Net foreign exchange loss
Net foreign exchange loss 213,383 153,519
Leases
Short-term and low-value assets lease payments 122,629 58,324
Superannuation expense
Defined contribution superannuation expense 400,600 346,511
Impairment of assets
Inventories 12,127 27
18
Australasian Mining Services Pty Ltd
Notes to the financial statements
31 December2022
7. Income tax expense
31 December 2022 31 December 2021
$ $
Income tax expense
Current tax 4,595,866 4,155,957
Deferred tax origination and reversal of temporary differences
-
55,261 153,051
Adjustment recognised for prior periods (9,242) (84,604)
Aggregate income tax expense 4,641,885 4,224,404
Deferred tax included in income tax expense comprises:
Decrease in deferred tax assets (43,997) 65,856
Increase in deferred tax liabilities 99,258 87.195
Deferred tax origination and reversal of temporary differences
- 55,261 153,051
Numerical reconciliation of income tax expense and tax at the
statutory rate
Profit before income tax expense 15,386,755 14,055,835
Tax at the statutory tax rate of 30% 4,616,027 4,216,751
Tax effect amounts which are not deductible/(taxable) in calculating
taxable income:
Entertainment expenses 30,339 24,244
Net unrealised foreign exchange movements (5,867) -
Non-deductible donations 3,300 -
4,643,799 4,240,995
Adjustment recognised for prior periods (1,914) (16,591)
Income tax expense 4,641,885 4,224,404
19
Australasian Mining Services Pty Ltd
Notes to the financial statements
31 December2022
8. Cash and cash equivalents
31 December 2022 31 December 2021
$ $
Cash at bank 9,101,527 8,214,163
Cash on hand 213 161
9,101,740 8,214,324
9. Trade and other receivables
31 December 2022 31 December 2021
$ $
Trade receivable 11,670,244 10,662,888
Prepayments and other receivables 864,258 1,120,151
12,534,502 11,783,039
10. Inventories
31 December 2022 31 December 2021
$ $
Inventories 24,453,365 24,832,648
Provision for impairment (729,415) (736,978)
23,723,950 24,095,670
20
Australasian Mining Services Pty Ltd
Notes to the financial statements
31 December 2022
11. Plant and equipment
31 December 2022 31 December 2021
$ $
Electrical equipment
At cost 164,423 146,918
Accumulated depreciation (95,349) (76,395)
69,074 70,523
Machinery
At cost 182,760 181,065
Accumulated depreciation (88,809) (70,622)
93,951 110,443
Other plant and equipment
At cost 585,237 496,816
Accumulated depreciation (152,965) (98,975)
432,272 397,841
Motor vehicles
At cost 1,366,809 1,056,193
Accumulated depreciation (846,456) (754,073)
520,353 302,120
Leasehold improvements
At cost 45,160 32,750
Accumulated depreciation (28,423) (17,900)
16,737 14,850
Total plant and equipment 1,132,387 895,777
Re conciliations
Reconciliations of the written down values at the beginning and end of the current financial year are set out below:
31 December 2022 31 December 2021
Movement in carrying amount: $ $
Carrying amount at 1 January 895,777 669,691
Additions 544,625 505,123
Disposals (8,768) (8,348)
Depreciation expense (299,247) (270,689)
Carrying amount at 31 December 1,132,387 895,777
21
Australasian Mining Services Pty Ltd
Notes to the financial statements
31 December2022
12. Intangibles
31 December 2022 31 December 2021
$ $
Computer software
At cost 97062 89,897
Accumulated amortisation (82,595) (72,283)
14,467 17,614
Re conciliations
Recortdlliations of the written down values at the beginning and end of the current financial year are set out below:
31 December 2022 31 December 2021
$ $
Carrying amount at 1 January 17,614 30,222
Additions 7,165 2,324
Amortisation expense (10,312) (14,932)
Carrying amount at 31 December 14467 17.614
13. Deferred tax assets
31 December 2022 31 December 2021
$ $
Deferred tax asset comprises tempora,y differences attributable to:
Amounts recognised in profit or loss:
Inventories 218,825 221,093
Provision for employee benefits 109,391 80,815
Leases 53,563 24,366
Accrued expenses 23,259 27,722
Others 754 7.799
Deferred tax asset 405,792 361,795
Movements:
Opening balance 361,795 427,651
Expensed/(Credited) to profit or loss 43,997 (65,856)
Closing balance 405,792 361,795
22
Australasian Mining Services Pty Ltd
Notes to the financial statements
31 December2022
14. Right-of-use assets
31 December 2022 31 December 2021
$ $
Cost
Balance at 1 January 3,544,466 3,127,883
Additions during the year 584,761 3,153,481
Disposal during the year -
(2,736,898)
Balance at 31 December 4,129,227 3,544,466
Accumulated depreciation
Balance at 1 January 435,396 430,636
Depreciation for the year 508,480 448,892
Disposal during the year -
(444,132)
Balance at 31 December 943,876 435,396
Carrying amount at 1 January 3,109,070 2,697,247
Carrying amount at 31 December 3,185,351 3,109,070
The company. leases land and buildings for its offices, warehouses under agreements of between one to five years with, in
some cases, options to extend. The leases have various escalation clauses. On renewal, the terms of the leases are
renegotiated.
One lease for office is on monthly basis. This lease is short-term, so have been expensed as incurred and not capita Used as
right -of-use assets.
15. Trade and other payables
31 December 2022 31 December 2021
$ $
Trade payables 10,339,660 14,854,929
Other payables and accrued expenses* 456,826 301,829
10,796,486 15,156,758
*lnclude $75,000 (2021: $115,000) bonus accrued to Andrew Andreou for the year ended 31 December 2022.
23
Australasian Mining Services Pty Ltd
Notes to the financial statements
31 December2022
16. Lease liabilities
31 December 2022 31 December 2021
$ $
Current 471,609 399,734
Non -current 2,892,284 2,790,557
3,363,893 3,190,291
31 December 2022 31 December 2021
$ $
Future lease payments
Future lease payments are due as follows:
Within one year 626,689 551,440
One to five years 2,239,773 2,529,634
More than five years 1,099,495 672,423
3,965,957 3,753,497
17. Deferred tax liabilities
31 December 2022 31 December 2021
$ $
Deferred tax liability comprises temporaiy differences attributable to:
Amounts recognised in profit or loss:
Plant and equipment 263,983 183,244
Other current asset 33,094 14,575
Deferred tax liability 297.077 197819
Movements:
Opening balance 197,819 110,624
Expensed to profit or loss (Note 7) 99,258 87,195
Closing balance 297,077 197,819
24
Australasian Mining Services Pty Ltd
Notes to the financial statements
31 December2022
18. Issue capital
2022 2022 2021 2021
Shares $ Shares $
Ordinary shares fuHy paid
- 100000 9,013,481 100,000 9,013,481
Ordinanj shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion
to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company
does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shaH have one vote and upon a poll each share
shall have one vote.
19. Retained earnings
31 December 2022 31 December 2021
$ $
Retained earnings at the beginning of the financial year 19,816,594 14,985,163
Profit after income tax expense for the year 10,744,870 9,831,431
Dividend paid (5,000,000) (5,000,000)
Retained earnings at the end of the financial year 25,561,464 19,816,594
20. Provision for income tax
31 December 2022 31 December 2021
$ $
Provision for income tax 356,202 606,729
21. Provision for employee entitlements
31 December 2022 31 December 2021
$ $
Current 221,900 216,035
Non-current 95,175 53,347
22. Borrowings
31 December2022 31 December2021
$ $
Current -
Chattel mortgages 168,01 80,520
Non -current -
Chattel mortgages 264,610 145,715
The chattel mortgages represents the loan used to acquire motor vehicles.
Assets pledged as security
The chattel mortgages are secured by mortgages over the company's motor vehicle.
The chattel mortgages are principal and interest payment loan, repayable in monthly instalments and due to mature in 2025.
The fixed interest rate is 4.19% (2021: 3.56%).
25
Australasian Mining Services Pty Ltd
Notes to the financial statements
31 December2022
23. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of the company is set
out below:
31 December 2022 31 December 2021
$ $
Aggregate compensation 1,204,533 1,054,948
24. Contingent assets and contingent liabilities
The company has no contingent liabilities and contingent assets as at 31 December 2022 (2021: Nil).
25. Remuneration of auditors
During the financial year, the following fees were paid or payable for services provided by RSM Australia Partners, the auditor
of the company:
31 December 2022 31 December 2021
$ $
Audit services
Audit of the financial statements 175 62.500
26. Dividends
Dividends
Dividends paid or payable during the financial year were as follows:
31 December 2022 31 December 2021
$ $
Dividend declared and paid (2021: dividend was declared during the year
ended 31 December 2020 and paid during the year 31 December 2021) 5,000,000 5,000,000
Franking credits
31 December 2022 31 December 2021
$ $
Franking credits available for subsequent financial years based on a tax rate
of 30% 11,610,427 8,916,132
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:
franking credits that will arise from the payment of the amount of the provision for income tax at the reporting date;
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.
Australasian Mining Services Pty Ltd
Notes to the financial statements
31 December2022
27. Related party transactions
Parent entity
Shareate Tools Ltd is the ultimate parent entity.
Key management personnel
Disclosures relating to key management personnel are set out in Note 23.
Transactions with related parties
The following transactions occurred with related parties:
31 December 2022 31 December 2021
$ $
Purchase of goods from:
-
Ultimate parent 9,040,751 11,407,188
-
Subsidiary of ultimate parent- Suzhou Shareate Trade Co Ltd 584,083 1,413,656
Payment of office rent to director-related entity 499,197 465,702
Payment received for financial servicse provided by immediate parent 21,913 19,391
Sale of goods to subsidiary of immediate parent American Mining
-
Services LLC 95,505 -
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
31 December2022
$
Current payables:
Trade payables to ultimate parent 3,032,751
Trade payables to subsidiary of ultimate parent- Suzhou Shareate Trade Co Ltd 44,219
Accrual 75,000
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
28. Commitments
The company had no commitments as at 31 December2022 and 31 December2021.
27
Australasian Mining Services Pty Ltd
Notes to the financial statements
31 December2022
29. Events subsequent to reporting date
On 1 February 2023, a dividend of $6,500,000 in total was declared and fully paid from the retained profits of the company by
cash, in satisfaction of part of the dividend policy agreed by the shareholders of the company under the Shareholders
agreement.
Other than the above, no other matter or circumstance has arisen since 31 December 2022 that has significantly affected, or
may significantly affect the company's operations, the results of those operations, or the company's state of affairs in future
financial years.
28
Australasian Mining Services Pty Ltd
ABN 83 612 994 822
DIRECTORS' DECLARATION
In the directors' opinion:
the attached financial statements and notes comply with the Corporations Act 2001, the Australian Accounting Standards
-
Simplified Disclosures, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes give a true and fair view of the company's financial position as at
31 December 2022 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
WAou
Director
Dated at Perth the 15th day of March 2023
oiii I
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61(0) 8 9261 9100
F +61 (0)892619111
www.rsm.com.au
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF
AUSTRALASIAN MINING SERVICES PTY LTD
Opinion
We have audited the financial report of Australasian Mining Services Pty Ltd (the Company), which comprises the
statement of financial position as at 31 December 2022, the statement of profit or loss and other comprehensive
income, the statement of changes in equity and the statement of cash flows for the year then ended, and notes
to the financial statements, including a summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Company is in accordance with the Corporations Act
2001, including:
(i) giving a true and fair view of the Company's financial position as at 31 December 2022 and of its financial
performance for the year then ended; and
(ii) complying with Australian Accounting Standards Simplified Disclosures under AASB 1060 Genera/Purpose
-
Financial Statements Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities and the
-
Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. 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 Company in accordance with the auditor independence requirements of
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 (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
THE POWER OF BEING UNDERSTOOD
AUDIT! TAX I CONSULTING
RSM Australia Partners isa member of the RSM network and trados as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itseif a separate iogal entity in any Jsrisdiction.
RSM Austrafla Partners AGN 36 965 i65 036
Liability limited by a scheme approved under Professional Standards Legislation
USM
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Company's annual report, but does not include the financial report and the auditor's report thereon
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, 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.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards Simplified Disclosures under AASB 1060 General
-
Purpose Financial Statements Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities and the
-
Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the
preparation of the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Company to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the 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 objectives are 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 the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this 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.pov.au/audjtors responsibilities/ar4. Ddf. This
description forms part of our auditor's report.
RSM AUSTRALIA PARTNERS
-
Perth, WA TUTU PHONG
Dated: 15 March 2023 Partner
