Ardent Leisure Group Limited
Annual Financial Report
for the year ended 29 June 2021
The financial report was authorised for issue by the Directors of Ardent Leisure Group Limited (ABN 51 628 881 603)
on 25 August 2021. The Directors have the power to amend and reissue the financial report.
Message from the Chairman
Dear Shareholders,
I am pleased to present the Annual Report of Ardent Leisure Group Limited for the year ended 29 June 2021.
During the year, the significant impacts of COVID-19 on the travel, leisure, tourism and entertainment sectors continued
to impact the Group.
After initially closing its US venues in March 2020, the Group started the year with 38 of its 43 Main Event centres
reopened, and the addition of one new site which opened in July 2020.
In Australia, SkyPoint and Dreamworld reopened in July and September 2020 respectively, after Government restrictions
had eased and the Group secured funding for the Australian operations from the Queensland Government in August
2020.
Despite the enormous challenges and disruptions presented by the pandemic throughout the year, it has been pleasing
to see that the results of the Group have improved compared to the prior year.
In the United States, Main Event’s operations were impacted by a second wave of the pandemic which forced the re-
closure of five of its sites for several weeks in November/December 2020, with local restrictions also affecting the
operations of several other sites throughout the year. Notwithstanding these setbacks, it has been very encouraging to
see Main Event rebound strongly during the second half of the year, as the business benefitted from various positive
macro factors such as pent-up demand, Government stimulus payments and an accelerated vaccination rollout. We are
optimistic that this momentum in trading will continue into FY22.
Our partnership with Redbird Capital Partners, who invested US$80.0 million for a 24.2% interest in Main Event in June
2020, remains excellent. The recent strong performance in Main Event has reinforced our mutual confidence in the future
potential of the business and has further strengthened its liquidity position.
Main Event is well positioned for further recovery and growth, with four new centre openings in FY22.
In Australia, the Theme Parks business has continued to be significantly impacted by the COVID-19 related restrictions on
international and state borders as well as a series of snap lockdowns, which have adversely affected attendances
throughout the year. The unpredictability of these restrictions unfortunately brought a premature end to the Christmas
and Easter holidays which are typically the most material trading periods for the division. Despite these challenges, the
business has responded with initiatives to maximise volume within the local drive market, including pricing and
activations strategies which have helped to deliver strong annual pass sales and positive guest sentiment.
The $69.9 million financial assistance package (comprising a $63.7 million three-year term loan and grants of $6.2 million)
obtained from Queensland Treasury Corporation in August has provided sufficient liquidity for the business to fund
working capital and capital projects, such as the new Steel Taipan roller-coaster which is expected to open towards the
end of 2021.
During the year, Greg Yong was appointed as the new Chief Executive Officer of Theme Parks, taking over from John
Osborne in April 2021. John has been a much valued colleague since his appointment in November 2018 and he has
made an enormous contribution to the restoration of value at our Theme Parks business.
Prior to assuming the role as CEO, Greg was the Chief Operating Officer of our Theme Parks business and had worked
closely with John on all aspects of the business over the prior two years, ensuring a seamless transition of roles. Greg is an
accomplished executive with an extensive background in the theme park industry, having spent many years with Village
Roadshow Theme Parks, and this wealth of experience in the industry is proving to be highly beneficial to Ardent.
Our outlook for the business remains positive, underpinned by the rollout of vaccinations in Australia, the expected opening
of the new Steel Taipan rollercoaster and pent-up demand in local and interstate markets. The recent announcement that
the 2032 Olympics will be hosted in Brisbane is also exciting news as we believe it will invigorate the South East Queensland
region.
Message from the Chairman
The Group’s cash preservation strategy remained robust across the divisions amidst the pandemic. Our net leverage ratio
was well below the covenant required by our US lenders in June 2021, which was a great achievement reflecting strong
liquidity in the US business. This has demonstrated management’s disciplined approach in controlling operating costs and
capital expenditure to mitigate the impact of COVID-19 on the Group’s performance and cash flows.
Our priority continues to be on ensuring the health and safety of our guests and team members, with robust safety
protocols and COVID Safe plans in place. While we expect uncertainty from the pandemic and associated governmental
restrictions to continue for the remainder of this calendar year, we are confident that Ardent is well positioned for future
growth once market conditions begin to improve.
On behalf of the Board, I would like to thank all our team members for their efforts this year. Their continued hard work,
commitment and resilience in challenging conditions is very much appreciated.
Dr Gary Weiss AM
Chairman
Ardent Leisure Group Limited
Annual Financial Report
Directors’ Report
Income Statement
Statement of Comprehensive Income
Balance Sheet
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Basis of preparation
Segment information
Revenue from operating activities
Other income
Finance costs
Other expenses
Taxation
Cash flow information
Losses per share
Overview
1.
Performance
2.
3.
4.
5.
6.
7.
8.
9.
10. Dividends paid and payable
Working capital
11.
12.
13. Construction in progress
14. Other assets
15.
Payables
Long term assets
16.
17.
Property, plant and equipment
Intangible assets
Receivables
Inventories
2
27
28
29
30
31
32
32
32
35
35
38
38
39
39
39
44
46
46
46
46
47
47
48
48
48
48
52
Fair value measurement
Interest bearing liabilities
Leases
Debt and equity
18. Contributed equity
19. Other equity
20.
Reserves
21. Accumulated losses
22.
23.
Financial risk management
24. Derivative financial instruments
25. Capital and financial risk management
26.
Unrecognised items
27. Contingent liabilities
28. Capital commitments
29.
Other
30.
Investment held at fair value
31.
Provisions
32. Net tangible assets
33. Deed of Cross Guarantee
34.
Remuneration of auditor
35.
Equity-based payments
36.
Related party disclosures
37.
Parent entity financial information
Directors’ declaration to shareholders
Events occurring after reporting date
Independent auditor’s report to shareholders
Investor Analysis
Investor Relations and Corporate Directory
54
54
54
55
55
56
58
60
60
61
66
69
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Ardent Leisure Group Limited | Annual Report 2021
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Directors’ Report
Directors’ Report
The Directors of Ardent Leisure Group Limited (Company) present their report together with the consolidated financial report
of the Company and its controlled entities (collectively, the Group) for the year ended 29 June 2021 (FY21).
Ardent Leisure Group Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office
and principal place of business are Suite 601, Level 6, 83 Mount Street, North Sydney NSW 2060.
1.
Directors
The following persons have held office as Directors of the Company during the period and up to the date of this report unless
otherwise stated:
Gary Weiss AM;
David Haslingden;
Randy Garfield; and
Brad Richmond.
2.
Principal activities
The Group’s principal activity is to invest in and operate leisure and entertainment businesses in Australia and the United
States of America. There were no significant changes in the nature of the activities of the Group during the year.
3.
Dividends and distributions
No dividend was paid or declared for the half year ended 29 December 2020 (31 December 2019: Nil) or has been paid or
declared for the year ended 29 June 2021 (30 June 2020: Nil).
4.
Operating and financial review
Overview
The Group’s strategy is to focus primarily on leisure and entertainment segments within its geographical areas of operation.
During the year, two businesses contributed to the overall result: Main Event and Theme Parks.
Theme Parks funding
On 7 August 2020, the Group announced that it had received financial assistance for its Theme Parks business under the
Queensland Government’s COVID-19 Industry Support Package and Queensland Tourism Icons Program 2020.
The financial assistance package totalling $69.9 million comprises a three-year secured loan facility of $63.7 million and grants
of $6.2 million. This funding is mutually exclusive from the debt facility in place for the Group’s US Main Event business.
Queensland Work Health and Safety prosecution
On 21 July 2020 the Queensland Work Health and Safety Prosecutor filed three charges against a subsidiary of the Company,
Ardent Leisure Limited (ALL), pursuant to section 32 of the Work Health and Safety Act 2011 (Qld) in relation to the 2016
Thunder River Rapids ride incident. ALL pleaded guilty to all three charges on 29 July 2020.
On 28 September 2020, the prosecution in relation to the tragedy was finalised, with the Group accepting the Court’s
decision to impose a fine of $3.6 million for breaches of the Work Health and Safety Act 2011 (Qld).
Shareholder class action
On 18 June 2020, the Company was served with a representative shareholder class action arising from the 2016 Dreamworld
tragedy. The claim alleges contraventions of the Corporations Act 2001 (Cth). The plaintiff has not provided any expert
valuation opinion to quantify its claim, therefore the Company cannot provide any meaningful or indicative estimate of the
quantum of any potential liability (if any). The Company has previously indicated (and maintains) that it believes the
proceedings to be without merit and it will vigorously defend them.
The Company maintains appropriate insurances to respond to litigation and the majority of associated costs.
Dreamworld resort hotel and tourist park
As announced on 5 May 2021, the Group entered into a non-binding and conditional agreement for a developer to fund and
build an accommodation precinct on part of the surplus land owned by the Group adjacent to the park. The negotiation of
this project is continuing as the Group also explores additional options to maximise the value of its surplus land holdings.
2
Ardent Leisure Group Limited | Annual Report 2021
Directors’ Report
4.
Operating and financial review (continued)
Group results
The performance of the Group, as represented by the aggregated results of its operations for the period from 1 July 2020 to 29
June 2021 (364 days), was as follows:
Main Event
$’000
Theme Parks
$’000
Corporate
$’000
354,655
84,302
(52,720)
(24,837)
6,745
36,012
(11,097)
(7,710)
(64)
(18,871)
-
(5,927)
(306)
(110)
(6,343)
1 July 2020 to 29 June 2021
Segment revenue
Segment EBITDA
Depreciation and amortisation
Amortisation of lease assets
Segment EBIT
Borrowing costs
Lease liability interest expense
Interest income
Loss before tax
Income tax benefit
Net loss after tax
The segment EBITDA above has been impacted by the
following specific items:
Net impairment of property, plant and equipment and
lease right-of-use assets
Early termination of leases
Pre-opening expenses
Dreamworld incident costs, net of insurance recoveries
Restructuring and other non-recurring items
Lease payments no longer recognised in EBITDA under
AASB 16 Leases
Net loss on disposal of assets
The net loss after tax above has also been impacted by
the following specific items:
Lease asset amortisation and lease interest expense
recognised under AASB 16 Leases
Tax losses for which deferred tax asset not recognised
Tax deductible temporary differences for which deferred
tax asset not recognised
Tax impact of specific items listed above
(4,089)
(1,308)
(578)
-
(4,168)
47,710
(272)
37,295
(59,183)
(10,086)
-
4,597
(64,672)
-
-
-
(850)
-
85
(11)
(776)
(65)
(5,654)
649
252
(4,818)
Total
$’000
390,667
67,278
(60,736)
(25,011)
(18,469)
(34,762)
(34,350)
37
(87,544)
611
(86,933)
(4,089)
(1,308)
(578)
(850)
(4,118)
47,951
(313)
36,695
-
-
-
-
50
156
(30)
176
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(113)
(1,955)
(49)
(19)
(2,136)
(59,361)
(17,695)
600
4,830
(71,626)
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Ardent Leisure Group Limited | Annual Report 2021
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Directors’ Report
4.
Operating and financial review (continued)
Group results (continued)
The performance of the Group, as represented by the aggregated results of its operations for the prior period from 26 June 2019
to 30 June 2020 (371 days), was as follows:
26 June 2019 to 30 June 2020
Segment revenue
Segment EBITDA
Depreciation and amortisation
Amortisation of lease assets
Segment EBIT
Borrowing costs
Lease liability interest expense
Interest income
Loss before tax
Income tax expense
Net loss after tax
The segment EBITDA above has been impacted by the
following specific items:
Valuation gain on investment held at fair value
Impairment of property, plant and equipment and lease
right-of-use assets
Early termination of leases
Pre-opening expenses
Dreamworld incident costs, net of insurance recoveries
Restructuring and other non-recurring items
Lease payments no longer recognised in EBITDA under
AASB 16 Leases
Net gain/(loss) on disposal of assets
The net loss after tax above has also been impacted by
the following specific items:
Lease asset amortisation and lease interest expense
recognised under AASB 16 Leases
Tax losses for which deferred tax asset not recognised
Tax deductible temporary differences for which deferred
tax asset not recognised
Tax impact of specific items listed above
Main Event
$’000
Theme Parks
$’000
Restated(1)
343,807
55,268
(55,315)
(28,282)
(28,329)
54,508
(24,338)
(9,828)
(96)
(34,262)
Corporate
$’000
-
(5,598)
(497)
(124)
(6,219)
Total
$’000
Restated(1)
398,315
25,332
(65,640)
(28,502)
(68,810)
(27,614)
(36,568)
680
(132,312)
(3,783)
(136,095)
390
(17,422)
(2,758)
(4,175)
2,827
(6,952)
48,493
(795)
19,608
-
-
(15,407)
-
-
2,827
(779)
107
(3,330)
(16,582)
390
-
-
-
-
(253)
128
-
265
(2,015)
(2,758)
(4,175)
-
(5,920)
48,258
2,535
35,925
(64,837)
(7,951)
-
6,072
(66,716)
(101)
(2,639)
(8,905)
5,005
(6,640)
(132)
(17,186)
-
(40)
(17,358)
(65,070)
(27,776)
(8,905)
11,037
(90,714)
(1) The amounts disclosed are restated for the change in accounting policy disclosed in Note 16(a) to the Financial Statements.
The Group reported a net loss after tax of $86.9 million for
the year ended 29 June 2021 (comprising 52 weeks),
representing an improvement compared to a net loss of
$136.1 million in the prior year (comprising 53 weeks). This
was despite the Group’s businesses, as well as the broader
travel, tourism and entertainment sectors being impacted
by the pandemic throughout FY21.
Total segment revenue for the Group (excluding other
income from government grants/subsidies and insurance
recoveries) of $390.7 million decreased by $7.6 million in
the year, driven primarily by lower visitation in the
Australian Theme Parks venues, partially offset by strong
recovery in Main Event with all centres being progressively
reopened by the end of the financial year.
4
Ardent Leisure Group Limited | Annual Report 2021
Directors’ Report
4.
Operating and financial review (continued)
Group results (continued)
In addition to trading disruptions due to COVID-19, the
Group’s results were impacted by a number of significant
items. Nevertheless, disciplined control of operating costs
across the Group and recovery in the US business during
the second half of FY21 have mitigated the impact of
COVID-19 on the Group’s result. Consequently, total
EBITDA increased by $42.0 million, from $25.3 million in
FY20 to $67.3 million in FY21.
The year-on-year performance of the Group was driven
predominantly by the following factors:
Increased revenue and EBITDA in Main Event due to
incremental revenue from new centres that were
opened in FY20 and FY21, the lapping of initial closure
of all centres in March 2020, as well as positive
momentum in the US consumer sectors during the
latter half of FY21, partly offset by adverse foreign
exchange movements in the year;
$15.5 million (2020: $6.0 million) government support
funding being received by the Australian businesses,
primarily under the Australian Federal Government’s
JobKeeper wage subsidy programme which ended in
March 2021;
A $13.3 million decline in impairment losses on property,
plant and equipment and lease right-of-use assets. The
current year includes a $4.1 million impairment of lease
right-of-use assets relating to a Main Event centre
(2020: $1.6 million) whereas the prior year included
$15.4 million and $0.4 million impairment of property,
plant and equipment in Theme Parks and Main Event
respectively, predominantly due to the impact of COVID-
19 on trading performance and near term outlook;
A $3.6 million decrease in pre-opening expenses, with
one new Main Event centre being opened during the
current year;
A $2.8 million reduction in restructuring and other non-
recurring items due to the prior year being more
heavily impacted by several one-off expenses relating
to restructuring and capital management activities, as
well as the emergence of COVID-19;
A $1.5 million decrease in costs associated with the
early termination of Main Event leases;
A reduction in depreciation and amortisation of $4.9
million and decline in amortisation of US lease assets of
$3.5 million due to prior impairment of assets and foreign
exchange movements;
A decrease in US lease interest of $2.2 million mainly due
to foreign exchange movements; and
A $4.4 million improvement in tax benefit/expense due
to:
o A $19.6 million decrease in tax expense associated
with Australian and US tax losses and Australian
deductible temporary differences for which
deferred tax assets have not been recognised. The
recoverability of these losses and temporary
differences against future taxable income is not
currently considered probable under AASB 112
Income Taxes; and
o A decrease in partially offsetting tax benefit arising
in the current year due to the decline in reported
pre-tax losses.
The above factors were partly offset by:
Reduced revenue and EBITDA in Theme Parks due to
COVID-19, with international and domestic travel
restrictions, as well as a series of snap lock downs severely
impacting trading performance. Dreamworld and
Whitewater World were reopened on 16 September 2020
following the initial closure on 23 March 2020;
A $3.7 million increase in costs relating to the
Dreamworld incident, net of insurance recoveries, from
an income of $2.8 million in FY20 to an expense of $0.9
million in FY21; and
An increase in borrowing costs of $7.1 million mainly
due to a full period of interest in respect of the Redbird
funding, amortisation of capitalised borrowing costs
incidental to the Redbird transaction and incremental
borrowing costs related to the new Queensland
Government loan. This is partially offset by the prior
year being adversely impacted by one-off costs
associated with a reduction in Main Event’s debt facility
and covenant waivers.
Ardent Leisure Group Limited | Annual Report 2021
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Directors’ Report
4.
Operating and financial review (continued)
Main Event
The performance of Main Event, in US dollars, is summarised as follows:
2021
2020
Change
Total revenue
EBRITDA(1)
Property costs
EBITDA
Depreciation and amortisation
EBIT
US$'000
US$'000
266,871
76,832
(12,518)
64,314
(57,895)
6,419
232,756
51,352
(13,716)
37,636
(56,153)
(18,517)
(1) Earnings before property costs (predominantly land taxes and maintenance costs), interest, tax, depreciation and amortisation.
Constant centres(1)
Non-constant centres
New centre opened in FY21
Centres closed
Corporate and regional office
expenses/sales and marketing
Other specific items
Total
Revenue
2021
US$'000
221,247
35,141
10,483
-
Revenue
2020
US$'000
191,304
35,981
-
5,471
-
-
266,871
-
-
232,756
Change
%
15.7
(2.3)
(100.0)
14.7
EBRITDA
2021
US$'000
103,653
13,342
5,867
(7)
(39,187)
(6,836)
76,832
EBRITDA
2020
US$'000
78,145
12,520
-
834
(33,696)
(6,451)
51,352
%
14.7
49.6
(8.7)
70.9
3.1
(134.7)
Change
%
32.6
6.6
(100.8)
16.3
6.0
49.6
(1) Constant centres include all centres that had been operational for 18 months at the beginning of the current financial year, but excluding centres:
that were permanently closed in FY20 (Pittsburgh in January 2020 and Indianapolis in June 2020),
that were closed at the beginning of the year, for the period until re-opening; and
i)
ii)
iii) that were re-closed for more than one week in FY21, for the period subsequent to re-closure
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During the year, total US dollar revenue of US$266.9 million
was 14.7% higher than prior year, driven primarily by
incremental revenue from new centres that were opened
in FY20 and FY21, the lapping of initial closure of all centres
in March 2020, and growth in constant centres exceeding
pre-COVID levels as the business benefitted from macro
factors such as pent-up demand, government stimulus and
the accelerated US vaccine rollout during the second half
of FY21. This was partially offset by soft trading
performance during the first eight months of the year,
which includes a second wave of the pandemic in the US
which resulted in five Main Event centres being re-closed in
November/December 2020 and several centres being
closed or operating at reduced hours in February 2021 due
to winter storms. In addition, the prior year includes
revenue contributions from two centres that were
subsequently permanently closed. In Australian dollar
terms, Main Event revenue increased by 3.2% on prior year,
reflecting the movement in foreign exchange rates.
Following the initial site closures in March 2020, Main Event
started the year with 38 operational centres and
progressively reopened its remaining sites, with all centres
opened by the end of the financial year. One new centre,
Wesley Chapel opened in July 2020 and performed above
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expectations as the highest revenue centre. This brings the
number of centres to 44 across 16 states as at 29 June 2021
(2020: 43 centres across 16 states). Pre-opening expenses of
US$0.4 million in the year decreased by US$2.4 million
compared to prior year due to less centre openings in the
current year. Main Event reported EBITDA of US$64.3
million, up US$26.7 million or 70.9% on prior year as a result
of increased revenue and the high operating leverage
nature of the business. EBITDA in the current and prior year
continued to be impacted by non-recurring restructuring
expenses, non-cash impairment of lease assets, costs
associated with early termination of leases and loss/gain on
disposal of assets. Excluding Specific Items, EBITDA was
US$36.5m in FY21, up US$22.9 million or 168.1% on prior
year.
The strong momentum in trading performance during the
second half of the year has significantly improved Main
Event’s liquidity and positioned the business well for future
growth, with four new centre openings anticipated in FY22.
Management remains committed to ensuring the utmost
safety of employees and guests in all centres as the US
continues to address ongoing impacts from COVID-19.
Directors’ Report
4.
Operating and financial review (continued)
Theme Parks
The performance of the Theme Parks is summarised as follows:
Total revenue
EBRITDA(2)
Property costs
EBITDA
Depreciation and amortisation
EBIT
Attendance
Per capita spend ($)
2021
$'000
36,012
(10,438)
(659)
(11,097)
(7,774)
(18,871)
743,860
48.41
2020
$'000
Restated(1)
54,508
(23,684)
(654)
(24,338)
(9,924)
(34,262)
1,153,296
47.26
Change
%
(33.9)
(55.9)
0.8
(54.4)
(21.7)
(44.9)
(35.5)
2.4
(1) The amounts disclosed are restated for the change in accounting policy disclosed in Note 16(a) to the Financial Statements.
(2) Earnings before property costs (predominantly land taxes and council rates), interest, tax, depreciation and amortisation.
The Theme Parks business, consisting of Dreamworld,
WhiteWater World and SkyPoint, reported trading revenue
of $36.0 million for the year, down 33.9% on prior year
mainly due to the pandemic, with SkyPoint and
Dreamworld/WhiteWater World being reopened on 10 July
2020 and 16 September 2020, respectively. This, along with
ongoing international and domestic border restrictions and
a series of snap lock downs, led to a decline in attendance
and revenue compared to the prior year. The lockdowns
brought a premature end to the peak Christmas and Easter
holiday trading periods for the business.
The COVID-19 impact was partially offset by the division
receiving $15.3 million government support, primarily
under the Australian Federal Government’s JobKeeper
subsidy programme which ended in March 2021 (2020:
$5.9 million).
The division recorded an EBITDA loss of $11.1 million,
compared to a loss of $24.3 million in the prior year mainly
due to the prior period being adversely impacted by $15.4
million non-cash impairment losses relating to the
Dreamworld and SkyPoint properties and $0.8 million non-
recurring costs associated with COVID-19. In addition, there
was a $3.3 million reduction in loss on disposal of assets in
the current year, partially offset by a $3.7 million increase in
Dreamworld incident costs, net of insurance recoveries.
Excluding Specific Items, the division recorded an EBITDA
loss of $10.3 million, compared to a loss of $7.7 million in
the prior period mainly as a result of reduced revenue and
the largely semi fixed cost nature of the business.
Nevertheless, the business has managed to reduce its cost
base compared to the prior period due to targeted cost
savings.
Strong annual pass sales from the local drive market, a
disciplined approach to capital expenditure and the
JobKeeper wage subsidy have mitigated the impact of
COVID-19 on cash flows. The preservation of cash, a focus
on pricing and product for the local drive market and
operating from a lower cost base has positioned the
division well for a recovery when COVID-19 restrictions
ease.
The business outlook remains optimistic supported by pent
up demand in the local and interstate markets, the roll out
of vaccines and the new Steel Taipan multi-launch
rollercoaster which is anticipated to complete in Q2 FY22.
Strategic focus
The common theme across the Group’s assets is the
provision of leisure and entertainment experiences.
However, each business has its own unique strategic
position and objectives, and is at different stages of
evolution with discrete opportunities for growth and
unlocking value.
(i)
Main Event
Main Event’s strategic goal is to become a leading customer
experience-driven leisure and entertainment brand in the US.
This business has expanded its number of centres rapidly over
the last few years and management is focused on ensuring
there is the appropriate balance between growth of existing
business as well as new centre development through a
disciplined real estate selection process.
The spread of COVID-19 and resulting business closures has
had a significant impact on the liquidity of the business and
this slowed new centre developments in the year.
However, the partnership transaction with US-based
private investment firm, RedBird Capital Partners (RedBird),
which saw US$80.0 million invested into Main Event’s US
parent entity in June 2020, has enhanced the financial
flexibility of Main Event and positioned the business for
future growth.
Ardent Leisure Group Limited | Annual Report 2021
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4.
Operating and financial review (continued)
5.
Significant changes in the state of affairs
In the opinion of the Directors, there were no significant
changes in the state of affairs of the Group that occurred
during the year not otherwise disclosed in this report or the
financial statements.
6.
Interests in the Group
The movement in shares of the Group during the year is set
out below:
2021
2020
Shares on issue at the
beginning of the year
Shares on issue at the
end of the year
479,706,016
479,706,016
479,706,016 479,706,016
Strategic focus (continued)
(i)
Main Event (continued)
The availability of quality sites in trade areas that the
business wants to expand into, along with the long
development process to construct a Main Event family
entertainment centre, can cause variations in the number
of centres opened in a given year. In conjunction with the
business’ new strategic partner, RedBird, management are
continuing to look at strategic growth opportunities in
existing markets as well as new trade areas. Furthermore,
the business is continuing to explore ground-up
developments as well as second-generation retail
opportunities, including mall locations.
(ii)
Theme Parks
The key focus is on driving attendance back to historic
levels through a combination of “smart” capital investment,
an event pipeline, developing new and unique attractions
and food, retail and events products all of which provide
opportunities to promote and target revisitation.
Investments are targeted to drive visitation and must be
economically responsible. This includes plans to install
major new attractions at Dreamworld to increase visitation
to the Theme Parks and drive average per capita spend.
The wellbeing of Dreamworld’s staff also remains a key
focus of management, with a number of wellness and
support programs in place to assist individual team
members with resilience and coping with challenging
environments.
As previously communicated, the Group is committed to
implementing all key recommendations arising from the
Coronial Inquest.
The Group sees potential for considerable value in the
excess land that sits around the Dreamworld site. The park
currently occupies just over 50% of the land owned by the
Group and the process to ascertain the best use of this land
and optimise value for shareholders is ongoing. One of the
proposals currently being considered by the Group
includes the development of a resort style tourist park
adjacent to Dreamworld.
8 Ardent Leisure Group | Annual Report 2021
Directors’ Report
7.
Information on Directors
Gary Weiss AM
Chair
Appointed:
David Haslingden
Director
Appointed:
Ardent Leisure Group Limited – 18 September 2018
Ardent Leisure Group Limited – 18 September 2018
Age: 68
Age: 60
David Haslingden brings to the Board considerable
international business experience, particularly in North
America and Europe.
David is a director and major shareholder of RACAT Group,
a company that owns and operates several media and
mobile games companies in Australia and overseas. He is
also Chairman of the Australian Geographic Society.
Previously, David was Chairman and a non-executive
director of Nine Entertainment Co. Holdings Limited,
President and Chief Operating Officer of Fox Networks
Group and Chief Executive of Fox International Channels.
David holds a Bachelor of Arts and Bachelor of Laws from
The University of Sydney and a Master of Law from the
University of Cambridge.
David is Chair of the Remuneration & Nomination
Committee and is a member of the Safety & Risk Review
Committee. He is also Chair of the Dreamworld Wildlife
Foundation. David was appointed Lead Independent
Director in May 2018.
Former listed directorships in the last three years:
None
Interest in shares:
523,980
Dr Weiss is currently the Executive Director of Ariadne
Australia Limited. He is Chairman of Estia Health Limited
and Cromwell Property Group and a Non-Executive
Director of Thorney Opportunities Limited and Hearts and
Minds Investments Limited.
Dr Weiss was appointed a Member (AM) of the Order of
Australia in 2019 and is also a Commissioner of the
Australian Rugby League Commission.
He was formerly Chairman of Ridley Corporation Limited,
ClearView Wealth Limited and Coats Group Plc, is a former
executive director of Whitlam, Turnbull & Co and Guinness
Peat Group plc and sat on the board of Westfield Holdings
Limited, Premier Investments Limited, Pro-Pac Packaging
Limited, The Straits Trading Company Limited and a
number of other public companies. Dr Weiss has also been
involved in managing large businesses with operations in
many regions including Europe, China and India and is
familiar with investments across a wide range of industries,
corporate finance and private equity type deals.
Dr Weiss holds an LLB (Hons) and LLM from Victoria
University of Wellington and a Doctor of the Science of Law
(JSD) from Cornell University. He was admitted as a
Barrister and Solicitor of the Supreme Court of New
Zealand, a Barrister and Solicitor of the Supreme Court of
Victoria and as a Solicitor of the Supreme Court of New
South Wales.
Gary is Chair of the Safety & Risk Review Committee and a
member of the Audit & Risk Committee and the
Remuneration & Nomination Committee.
Gary is also Chairman of Ardent Leisure US Holding Inc, the
parent entity for Main Event Entertainment.
Former listed directorships in the last three years:
Premier Investments Limited (11March 1994 to 28 July 2018)
Ridley Corporation Limited (21 June 2010 to 26 August 2020)
The Straits Trading Company Limited (1 June 2014 to 30
September 2020)
Interest in shares:
45,844,317
Ardent Leisure Group Limited | Annual Report 2021
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7.
Information on Directors (continued)
Randy Garfield
Director
Appointed:
Brad Richmond
Director
Appointed:
Ardent Leisure Group Limited – 18 September 2018
Ardent Leisure Group Limited – 18 September 2018
Age: 69
Age: 62
Brad is a Certified Public Accountant with 37 years’
experience in finance, operations and strategic planning in
the full-service restaurant industry in North America. Brad
recently held the position of Senior Vice President and
Chief Financial Officer of Darden Restaurants Inc., the
world’s largest full-service restaurant company operating
multiple brands including Olive Garden, LongHorn
Steakhouse, Season’s 52, The Capital Grille, Eddie V’s, Yard
House and Bahama Breeze. Prior to this position, Brad held
a number of other roles at Darden including Senior Vice
President and Corporate Controller and Senior Vice
President, Brand Financial Leader at various Darden brands.
Before joining Darden, Brad was a senior auditor with Price
Waterhouse & Co.
Brad holds a Bachelor of Sciences/Bachelor of Arts degree
from the University of Missouri.
Brad is Chair of the Main Event Committee, a member of
the Remuneration & Nomination Committee and a
member of the Audit & Risk Committee.
Brad is also a director of Ardent Leisure US Holding Inc, the
parent entity for Main Event Entertainment.
Former listed directorships in the last three years:
None
Interest in shares:
751,500
During his 50 year travel industry career, Mr Garfield spent
over 30 years working in senior executive roles specialising
in global marketing and sales, sponsorship development
and sales operations.
As Executive Vice President of Worldwide Sales & Travel
Operations at Walt Disney Parks & Resorts, he led the
worldwide sales, convention services, resort contact
centres and distribution marketing efforts for the
Disneyland Resort, Walt Disney World Resort, Disneyland
Paris, Hong Kong Disneyland Resort, Shanghai Disney
Resort, Disney Cruise Line, Disney Vacation Club,
Adventures by Disney, Aulani-a Disney Resort & Spa in
Hawaii and Golden Oak. Throughout his 20+ year Disney
career, he also served as President of Walt Disney Travel
Company, one of the largest tour operators in the USA.
Prior to joining Disney, Randy also served as Vice President
of Sales for Universal Studios Hollywood starting in 1986
where he helped generate record attendance and trail
blazed the launch of Universal Studios Florida by crafting
their pre-opening sales plan. He moved to Orlando in
summer 1989 as Executive Vice President of Marketing and
Sales/Chief Marketing Officer and led the business through
its pre-opening launch and for the following three years
during which he also served in a key role on the team
which formulated the expansion plan including a second
theme park as well as hotels and a massive retail, dining
and entertainment complex.
Randy’s current directorships include Rocky Mountaineer,
Destination Canada, Saudi Tourism Authority and Family
Travel Association.
Previous board roles include the US Travel Association
(Chairman), Brand USA, Visit California, Visit Florida and Visit
Orlando where he served as the longest tenured Chair.
Randy is an inductee into the US Travel Hall of Leaders, and
has been recognised three times as one of the most
extraordinary sales and marketing minds by Hospitality
Sales & Marketing Association International.
Randy is a member of the Safety & Risk Review Committee
and Audit & Risk Committee.
Former listed directorships in the last three years:
None
Interest in shares:
30,000
10
Ardent Leisure Group Limited | Annual Report 2021
Directors’ Report
8.
Company Secretary
The Group’s Company Secretary is Chris Todd. Chris was appointed to the position of Company Secretary on 20 January 2021
and has acted as Group General Counsel since March 2014.
Chris holds a Bachelor of Laws and a Bachelor of Commerce from the University of Queensland and has over 20 years’
experience as a lawyer, both in private practice and in-house roles.
9. Meetings of Directors
The attendance at meetings of Directors of the Group during the year is set out in the following table:
Full meetings
of Directors
Audit & Risk
Meetings of Committees
Remuneration &
Nomination
Safety & Risk Review
E1
6
6
6
6
A2
6
6
6
6
E1
4
**
3
4
A2
4
**
3
4
E1
1
2
**
2
A2
1
2
**
2
E1
4
4
4
**
A2
4
4
4
**
Gary Weiss AM
David Haslingden
Randy Garfield
Brad Richmond
(1) Eligible to attend.
(2) Attended.
** Not a member of the relevant committee.
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10. Remuneration report
Introduction from the Chair of the Remuneration
& Nomination Committee
The Directors of Ardent Leisure Group Limited present the
FY21 Remuneration Report, which outlines the Group’s
approach to remuneration of its Directors and Executive
Key Management Personnel (KMP).
This year, the Group has continued to be impacted by
COVID-19, which has again brought challenges for our
businesses, as well as the broader travel, tourism, family
entertainment and theme parks sectors. Following the
initial site closures in mid/late March 2020, the Group
started FY21 with 38 of its 43 Main Event centres reopened
and one new site, which opened in July 2020. In Australia,
SkyPoint reopened in July 2020, followed by Dreamworld
in September 2020.
A second wave of the pandemic in the US saw five Main
Event centres needing to close again for several weeks in
November/December 2020. However, subsequent trading
in the second half of the year has been encouraging, with
strong positive signs of recovery and the business showing
strong momentum going into FY22.
In Australia, the Theme parks business has continued to be
challenged, with attendances impacted by international
and state border restrictions and snap lockdowns,
particularly during the peak Christmas and Easter holiday
periods. This was exacerbated by extreme adverse weather
during the Easter holidays. Management has responded
with strategies to maximise volume within the local drive
market, including a number of successful activations which
have helped drive strong pass sales and positive guest
sentiment. The business remains optimistic for FY22,
underpinned by the roll out of vaccinations, the expected
opening of the new Steel Taipan rollercoaster and pent up
demand in local and interstate markets.
Funding has remained a key focus in FY21, with the
Australian business securing a $69.9 million financial
assistance package from the Queensland Government in
August 2020. This followed the injection of U$80.0 million
capital into the Main Event business in June 2020, via the
Redbird partnership. The Board and management have
continued to focus on cash preservation and strong cost
control within the businesses, as well as securing
governmental and other assistance wherever possible.
In late FY20, temporary salary reductions were taken across
the broader employee base, including Executive KMP and
several of their direct reports. However, following the
reopening of the businesses and securing of funding, some
of these temporary reductions have been reversed in FY21.
Remuneration outcomes for FY21
The Board note that determining remuneration outcomes
for Executive KMP in the current environment remains
difficult, with a need to balance factors such as shareholder
expectations, the financial performance of the businesses
12
Ardent Leisure Group Limited | Annual Report 2021
and achievement of non-financial targets for employee
engagement, customer satisfaction and safety.
In recognition of the achievement of agreed financial KPIs
and strategic initiatives, and the solid performance and
recovery of Main Event under challenging conditions, the
Board have agreed bonus payments to Chris Morris and
Darin Harper for FY21. Further, in recognition of their
strong leadership during this challenging period, the time
and effort involved in securing funding for the Australian
business and the resolution of many legacy issues facing
the business, the Board have agreed bonus payments to
John Osborne and Greg Yong for FY21.
With respect to long term incentive outcomes, the Board
acknowledge the substantial impact of COVID-19 on the
cash-settled LTI plans introduced for Main Event and
Theme Parks Executive KMP and senior employees in FY19,
and the value accretion levels now required to trigger
awards. Therefore, in consultation with its US co-investor,
Redbird Capital Partners, the Board have implemented a
new replacement plan for Main Event to ensure that it
continues to incentivise and drive performance over the
longer term. A similar review is currently in progress for the
Theme Parks cash-settled LTI plan.
Board and Committee changes
In June 2020, Ms Antonia Korsanos retired as a Non-
Executive Director.
Looking towards the future
The impact of COVID-19 on our businesses continues to be
significant, and we recognise that the economic, social and
workplace consequences are likely to be felt for some time.
Looking ahead to FY22, there remains some uncertainty
regarding the pandemic, associated vaccine rollouts and
efficacy, border and trading restrictions and the timeframe
for recovery. The Board continues to be cognisant of the
need to ensure that the remuneration mix for Executive
KMP is appropriate to the current environment and aims to
set realistic incentive targets which reflect this uncertainty.
The Board is confident that the Group will emerge from this
pandemic a stronger and more efficient organisation that
continues to provide our team members with a safe
working environment and our guests with safe and
memorable family entertainment experiences.
On behalf of the Board, I would like to thank our team
members for their continued hard work and commitment
during the last 12 months. The Board remains immensely
appreciative of their efforts and is grateful for the sacrifices
made and resilience shown during a challenging year.
David Haslingden
Chair, Remuneration & Nomination Committee
Directors’ Report
10.
Remuneration report (continued)
The remuneration report for the Group for the year ended 29 June 2021 is set out as follows:
Contents
(a) Who is covered by this report
(b) Remuneration governance
(c) Remuneration framework
(d) Remuneration outcomes for executives
(e) Service agreements of Key Management Personnel
(f) Non-Executive Director fees
(g) Additional statutory disclosures
Page No.
13
14
14
17
20
20
21
The information provided in the remuneration report has been audited as required by Section 308 (3C) of the Corporations Act
2001.
(a)
Who is covered by this report
Key Management Personnel (KMP) are defined in AASB 124 Related Party Disclosures as those having authority and responsibility
for planning, directing and controlling the activities of the Group. For the year ended 29 June 2021, the KMP for the Group
comprised the following:
Position
Executive KMP
Name
President and CEO – Main Event
Group Chief Financial Officer
Chris Morris
Darin Harper
CEO – Theme Parks
Greg Yong (commenced 21 April 2021)
Former CEO – Theme Parks
John Osborne (resigned 21 April 2021)
Non-Executive Directors
Chairman
Lead Independent director
Independent director
Independent director
Gary Weiss AM
David Haslingden
Randy Garfield
Brad Richmond
(i)
Changes to KMP effective after the end of the reporting period
There were no changes to KMP after the end of the reporting period.
Primary location of
employment
US-based
US-based
Australian-based
Australian-based
Australian-based
Australian-based
US-based
US-based
Ardent Leisure Group Limited | Annual Report 2021
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10.
Remuneration report (continued)
(b)
Remuneration governance
The Remuneration & Nomination Committee’s purpose is to review, evaluate and make recommendations to the Board in
relation to, the following key remuneration areas:
Remuneration policies for remuneration programs appropriate to the Group;
The remuneration framework for Directors and executives;
Review of the performance of KMP against pre-determined criteria on an annual basis;
Recruitment, retention and termination policies and procedures for executives;
The appointment of any remuneration consultants providing advice to the Group on the scale and components of
remuneration packages of KMP; and
Reporting on executive remuneration.
The Group did not engage any consultants to provide remuneration recommendations in relation to any of the above services
during the year.
(c)
(i)
Remuneration framework
Remuneration structure
The executive remuneration framework in place during the year ended 29 June 2021 has three components:
Annual base salary
KMP and executives receive a mix of cash
salary, employer superannuation contributions
(Australian employees only) and other non-
financial benefits
Short term incentive (STI)
One-year performance period award paid in
cash for individual and division performance
Long term incentive (LTI)
One-time cash award for long term
performance of the divisions
Total fixed remuneration (TFR) reflects the executive’s role, duties
and responsibilities, their level of performance and the complexities
of their role and divisions.
Base salaries are reviewed annually to ensure that pay is competitive
with the external market. No Executive KMP is entitled to a
guaranteed pay increase.
The STI is an annual cash bonus determined by performance against
financial targets, advancement of strategic initiatives and/or
personal key performance indicators (KPIs).
The LTI for Executive KMP is a one-time cash reward linked to the
future appreciation in Equity Value of the Main Event business or
Enterprise Value of the Theme Parks business over and above
threshold amounts. It is designed to drive profitable business growth
and deliver strong returns on capital invested. Vesting under the LTI
plans occurs on a pro-rata basis over a period of five years for Main
Event and four years for Theme Parks, respectively.
LTI awards were initially granted to Executive KMP under these plans in
FY19. However, the Board acknowledge the substantial impact of
COVID-19 and the value accretion levels now required to trigger awards
under the plans. Therefore, in consultation with its US co-investor,
Redbird Capital Partners (Redbird), the Board have implemented a new
replacement plan for Main Event to ensure its effectiveness as a means
of incentivising and driving performance over the longer term. A similar
review is currently in progress for the Theme Parks cash-settled LTI plan.
14
Ardent Leisure Group Limited | Annual Report 2021
Cash STI
Cash LTI opportunity
Directors’ Report
10.
Remuneration report (continued)
(c)
(ii)
Remuneration framework (continued)
Remuneration mix – FY21
Executive KMP
Chris Morris
President and CEO –
Main Event
Annual base
salary
US$600,000
Darin Harper
Group CFO
US$360,000
As part of his
base salary
above, Mr Harper
receives
US$60,000 per
annum for
performing the
role of Group CFO
Target 100% of TFR
Stretch 150% of TFR
Target Weighted:
60% financial KPIs
15% strategic KPIs
25% Board discretion
Target 50% of TFR
Stretch 75% of TFR
Target Weighted:
60% financial KPIs
15% strategic KPIs
25% Board discretion
Greg Yong
CEO Theme Parks
$550,000
(incl. super)
Target 50% of TFR
(100% FY22 onwards)
John Osborne
Former CEO Theme
Parks
$550,000
(incl. super)
Target Weighted:
70% financial KPIs
30% personal KPIs
Target 100% of TFR
Target Weighted:
70% financial KPIs
30% personal KPIs
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The LTI opportunity for Executive KMP is a one-time
grant, subject to the achievement of appreciation in
the Equity Value of the Main Event business or
Enterprise Value of the Theme Parks business (as
applicable to the Executive KMP) over a threshold
amount, with payment on the occurrence of a future
realisation event. Further details on the LTI
opportunity can be found in Section 10(c)(iii).
LTI award percentages are as follows:
Chris Morris
Darin Harper
Greg Yong
John Osborne
3.355%
4.194% surplus component(1)
1.580%
1.975% surplus component(1)
1.000%(2)
2.000%
(1) If the value received by Main Event’s investors (the Group and
Redbird) on the occurrence of a realisation event is greater than
2.5 times the Grant Date Threshold Amount, the LTI award
percentages for the surplus component are 25% higher.
(2) Mr Yong was already a participant in the Theme Parks LTI Plan
prior to assuming the role of CEO. Given the impacts of COVID-
19, the Board proposes to review and revise the Plan to ensure
that it continues to drive performance over the longer term. Mr
Yong’s entitlement under the current plan will be substituted
with a 2% entitlement under any new Plan, consistent with the
entitlement of the former CEO, John Osborne.
Mr Harper remains a participant in the Group’s
legacy equity-settled Long Term Incentive (LTIP)
Plan, however no further grants have been made to
Mr Harper under this plan since 2017.
Change of Theme Parks CEO
On 21 April 2021, Greg Yong was appointed Chief Executive Office of the Group’s Theme Parks business, following the
resignation of John Osborne effective from that date. Mr Osborne has agreed to consult to Ardent on several projects
considered to be of strategic importance to the Group.
Mr Yong has held the role of Chief Operating Office for the Theme Parks business since May 2019. Prior to joining the Group,
Mr Yong held executive responsibilities for Village Roadshow Theme parks, including Warner Bros. Movie World, Sea World
and Wet ‘n’ Wild Gold Coast and Sydney, as well as leading the development and opening program for Topgolf.
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Directors’ Report
10.
Remuneration report (continued)
(c)
(ii)
Remuneration framework (continued)
Remuneration mix – FY21 (continued)
Short-term incentive
Who can participate?
When is the STI paid?
What performance measures
are used?
Executive KMP are able to participate in the STI; however, participation and payment of
any STI remain at the Board’s discretion.
If performance is sufficient, STI awards are payable in cash following the release of the
Group’s audited annual financial results.
Key performance indicators are split into financial and strategic/personal measure
categories. The actual split for each participant may vary and is generally weighted more
to the financial KPIs.
Financial KPIs are linked to earnings and revenue targets including, but not limited to,
EBITDA and constant centre sales (Main Event).
Strategic initiatives are associated with the achievement of specific strategic projects
that are part of the approved annual operating plan.
Personal KPIs are generally not financial in nature and are set to support execution of
improvements and initiatives in such functions as health and safety, employee and guest
engagement, compliance, business development and strategic initiatives.
(iii)
Long term incentive arrangements
The material terms of the long term incentive arrangements for Main Event and Theme Parks are set out in the respective plan
documents and apply to all grants made, including those to Executive KMP.
Details in relation to the LTI Plans are outlined below:
What are the LTI Plans?
What is the Threshold Hurdle?
The LTI Plans are incentive plans designed to attract, motivate and retain key
employees. They provide employees with a one-time grant to earn a cash incentive
based on the future appreciation in the Equity Value of the Main Event business or
Enterprise Value of the Theme Parks business, as the case may be, above a Threshold
Hurdle.
The Threshold Hurdle is the cumulative and annually compounded application of the
Hurdle Rates to Grant Date Valuations of the Main Event and Theme Parks businesses.
What are the Grant Date Valuations? US$330.0 million Equity Value for Main Event
What are the Hurdle Rates?
How do the LTI Plans drive
performance?
Who can participate in the LTI Plans?
$124.3 million Enterprise Value for Theme Parks
10% per annum for Main Event.
8.0% per annum for Theme Parks.
The plans are designed to align key employees’ incentive structure with shareholders
by encouraging and promoting desired behaviours that focus on creating sustainable
value over the long term.
Employees of Main Event and Dreamworld who are determined to be instrumental in
driving the long term growth of the business are eligible for participate at the discretion
of management and the Board. Each employee is granted an LTI award percentage with
total LTI pool caps of 12.0% for Main Event and 6.0% for Theme Parks.
How are the LTI Plans delivered?
The LTI awards are delivered in cash.
What are the vesting conditions?
The vested entitlement for the Plans accumulates evenly over a period of five years for
Main Event and four years for the Theme Parks. LTI awards immediately vest in full upon
the occurrence of a Realisation/Trigger Event provided that participants remain
employed by the businesses at the date of those events.
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Ardent Leisure Group Limited | Annual Report 2021
Directors’ Report
10.
Remuneration report (continued)
(c)
Remuneration framework (continued)
(iii)
Long term incentive arrangements (continued)
What is a Realisation/Trigger Event?
What other differences are there
between the Main Event and Theme
Parks Plans?
What are the payment conditions?
What happens if an employee leaves?
A Realisation/Trigger Event broadly refers to the earlier of:
(a) an acquisition of more than 50% of Main Event, or 75% of the Theme Parks
business, as the case may be; or
(b) the IPO of the Theme Parks business; or
(c) the seventh anniversary of the LTI award grant date of Main Event or Theme Parks,
as the case may be.
If the Threshold Hurdle is met, Participants in the Main Event plan are entitled to share
in the value differential between the Hurdle Threshold and the grant valuation.
The LTI award is paid out as follows:
If the participant remains employed, vested portion of the LTI award will be paid out
upon a change of control, an IPO (Theme Parks) or seventh anniversary of the LTI award
grant date (Main Event and Theme parks).
In the event of a participant’s employment being terminated as a result of an
Approved Separation, the participant shall be eligible to receive a pro-rata portion of
the LTI award representing the amount that has vested at the time of separation.
An ‘Approved Separation’ means a participant’s termination of employment with Main
Event for any reason other than for cause. A resignation by an employee is not an
Approved Separation.
In the case of the Theme Parks plan, if an employee leaves and the Realisation Event
occurs more than two years after an Approved Separation, all awards will lapse
without payment.
(d)
Remuneration outcomes for executives
This section sets out the actual remuneration outcomes realised by Executive KMP and the statutory remuneration disclosures
for FY21 and FY20.
(i)
STI outcomes in respect of FY21 performance
In respect of FY21 and FY20 performance, the percentage of Target STI that was awarded to the executives and the percentage
that was forfeited are set out below. Actual payments are made to individuals following the release of audited results.
Name
Chris Morris
Darin Harper
Greg Yong1
John Osborne
Financial year
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
Target STI
awarded
150%
33%
150%
29%
80%
n/a
80%2
0%
Target STI
forfeited
-
67%
-
71%
20%
n/a
20%
100%
STI outcome
US$900,000
US$200,000
US$270,000
US$60,000
$44,000
n/a
$440,000
-
(1) Became KMP on 21 April 2021 upon assuming the role of Chief Executive Officer, Theme Parks. Mr Yong’s STI outcome relates to the part of the year that he
was KMP.
(2) The FY21 STI bonus awarded to Mr Osborne is based on 80% of his annualised salary for the year.
Amounts included in the table above are different to the cash bonuses presented in Section 10(d)(v) below, which reflects cash
amounts received in the year in respect of prior years’ performance.
Ardent Leisure Group Limited | Annual Report 2021
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Directors’ Report
10.
(d)
(i)
Remuneration report (continued)
Remuneration outcomes for executives (continued)
STI outcomes in respect of FY21 performance (continued)
In recognition of the achievement of agreed financial KPIs and strategic initiatives, and the solid performance and recovery of
Main Event under challenging conditions, the Board have agreed bonus payments to Chris Morris and Darin Harper for FY21.
Further, in recognition of their strong leadership during this challenging period, the time and effort involved in securing
funding for the Australian business and the resolution of many legacy issues facing the business, the Board have agreed
bonus payments John Osborne and Greg Yong for FY21.
(ii)
Legacy equity-settled LTIP Plan
As stated above, performance rights previously granted under the Group’s legacy equity-settled LTIP Plan that are due to vest
in August 2021 have been tested against their gateway and performance hurdles.
The gateway and performance hurdles for the tranches issued to Executive KMP in FY17 and FY18 were not achieved and
therefore none of the LTIP performance rights have vested.
(iii)
Severance payments Executive KMP
There were no severance payments to Executive KMP in the year.
(iv)
Actual remuneration outcomes
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The table below sets out the total remuneration earned by Executive KMP in respect of the years ended 29 June 2021 and 30
June 2020. The LTIP vested element of realised pay relates to both the individual and the Group’s performance up to 29 June
2021. The information below is different to the information in Section 10(d)(v), which includes, for equity-based payments, the
accounting value of equity expensed in the year, rather than the actual benefit earned as shown in the table below:
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Name
Chris Morris(1)
Darin Harper(1)
Greg Yong(2)(4)
John Osborne(3)(4)(5)
Financial
year
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
Salary
(including
superannuation)
US$600,000
US$520,385
US$360,000
US$367,385
$107,940
n/a
$498,372
$497,463
Cash STI
bonus on an
accrued basis
US$900,000
US$325,000
US$270,000
US$185,000
$44,000
n/a
$440,000
-
Equity
grant
-
-
-
-
-
n/a
-
$100,000
Total realised pay in
respect of the
financial year
US$1,500,000
US$845,385
US$630,000
US$552,385
$151,940
n/a
$938,372
$597,463
(1)
In recognition of the achievement of agreed financial KPIs and strategic initiatives, and the solid performance and recovery of Main Event under
challenging conditions, the Board have agreed bonus payments to Chris Morris and Darin Harper of US$900,000 and US$270,000 respectively for FY21. In
the prior year, the Board awarded discretionary payments of US$200,000 to Mr Morris and US$60,000 to Mr Harper in recognition of the performance of
Main Event prior to the COVID-19 closures and, for the time and effort involved in finalising the RedBird partnership, transaction bonuses of US$125,000 to
each of Mr Morris and Mr Harper.
(2) Became KMP on 21 April 2021 upon assuming the role of Chief Executive Officer, Theme Parks. Mr Yong’s salary (inclusive of superannuation) disclosed
relates to the part of the year that he was KMP.
(3) Ceased employment, and ceased to be KMP, on 21 April 2021. Mr Osborne’s salary (inclusive of superannuation) disclosed relates to the part of the year
that he was KMP.
(4) In recognition of their strong leadership during this challenging period, the time and effort involved in securing funding for the Australian business and the
resolution of many legacy issues facing the business, the Board have agreed bonus payments to John Osborne and Greg Yong of $440,000 and $44,000,
respectively for FY21. Mr Yong’s bonus disclosed is in respect of the part of the year that he was KMP.
(5) During the prior year, the Board awarded to John Osborne a one-off grant of $100,000 of shares in Ardent Leisure Group Limited, based on the share price
as at the close of trading on 1 July 2019.
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Ardent Leisure Group Limited | Annual Report 2021
Directors’ Report
10.
(d)
(v)
Remuneration report (continued)
Remuneration outcomes for executives (continued)
Details of remuneration – Executive Key Management Personnel
Details of the remuneration of Executive KMP of the Group for FY21 are set out in the table below. The table sets out the total
cash benefits paid or payable to the executives in respect of the relevant year and, under the heading “Equity-based
payments”, shows a component of the fair value of the performance rights. The fair value of the performance rights is
recognised over the vesting period as an employee benefit expense.
Short term benefits
Post-
employment
benefits
Base
Salary
Cash
bonus
Annual
leave (1)
Super-
annuation
Total
remuneration
excluding
equity-based
payments
Equity-
based
payments
Total
remuneration
Equity-
based
payments
$
$
$
$
$
$
$ % of total
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Chris Morris (2)
FY21
FY20
CEO – Main Event
Darin Harper (2)
FY21
Group Chief Financial Officer FY20
Greg Yong (3)
FY21
FY20
CEO – Theme Parks
John Osborne (4)
FY21
FY20
Former CEO – Theme Parks
802,658
774,315
481,595
546,656
104,237
n/a
476,678
476,460
1,203,987
483,589
361,196
275,274
44,000
n/a
440,000
-
(6,175)
13,736
-
2,747
20,019
n/a
54,139
9,497
-
-
-
-
3,703
n/a
21,694
21,003
2,000,470 1,030,489
-
1,271,640
430,831
842,791
26,033
824,677
-
171,959
n/a
n/a
-
992,511
100,000
506,960
3,030,959
1,271,640
1,273,622
850,710
171,956
n/a
992,511
606,960
34.00%
-
33.83%
3.06%
-
n/a
-
16.48%
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FY21 1,865,168 2,049,183
758,863
FY20
1,797,431
67,983
25,980
25,397
21,003
4,007,731 1,461,320
126,033
2,603,277
5,469,051
2,729,310
26.72%
4.62%
(1) Annual leave amounts represent the increase/(decrease) in the liability for accumulated annual leave during the year.
(2) Remuneration is converted from US dollars to Australian dollars at the average exchange rate of 0.7475 (2020: 0.6721) and includes both cash-settled and
equity-settled awards.
(3) Became KMP on 21 April 2021 upon assuming the role of Chief Executive Officer, Theme Parks. Remuneration disclosed reflects the part of the year that Mr
Yong was KMP.
(4) Ceased employment, and ceased to be KMP, on 21 April 2021. Remuneration disclosed reflects the part of the year that Mr Osborne was KMP.
Equity-based payments included in the table above reflect the amounts recognised in the Income Statement of the Group in
accordance AASB 2 Share Based Payment, and are determined on the following basis:
For performance rights previously issued under the Group’s equity-settled LTIP plan, the amounts are based on the fair
value of the equity instruments at the date of the grant rather than at vesting or reporting date. If the fair value recorded
in the Income Statement was based on the movement in the fair value of the instruments between reporting dates, the
amount included in executive compensation would be increased by $46,843 to ($7,624) (2020: decreased by $37,352 to
($10,853)).
For awards issued under Main Event’s cash-settled LTI Plan, the amounts are based on the movement in the fair value of
the awards between reporting dates.
Ardent Leisure Group Limited | Annual Report 2021
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Directors’ Report
10.
Remuneration report (continued)
(e)
Service agreements of Key Management Personnel
Remuneration and other terms of employment for KMP are formalised in service agreements. The major provisions of the
agreements relating to remuneration are set out below:
Executive
Term
Termination
Chris Morris
President and CEO –
Main Event
No fixed term.
Employment shall continue with the Group unless the executive gives
the Group 90 days’ notice in writing. The Group may terminate Mr Morris’
employment at any time, subject to a requirement to provide 30 days’
notice where the Group intends to terminate Mr Morris’ employment for
certain ‘cause’ reasons.
In certain circumstances, on termination of employment, Mr Morris is
entitled to continued payment of total fixed remuneration for 12 months
plus any owed but unpaid incentive amounts.
Darin Harper
Group Chief Financial Officer
No fixed term.
Employment shall continue as Group Chief Financial Officer with the
Group unless either party provides notice in writing.
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Greg Yong
CEO – Theme Parks
No fixed term.
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John Osborne
Former CEO – Theme Parks
No fixed term.
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Employment shall continue with the Group unless the executive gives
the Group 90 days’ notice in writing. The Group may terminate Mr
Yong’s employment at any time, subject to a requirement to provide 30
days’ notice.
In certain circumstances, on termination of employment, Mr Yong is
entitled to continued payment of total fixed remuneration for 12 months
plus any owed but unpaid incentive amounts.
Employment shall continue with the Group unless the executive gives
the Group 90 days’ notice in writing. The Group could terminate Mr
Osborne’s employment at any time, subject to a requirement to
provide 30 days’ notice.
In certain circumstances, on termination of employment, Mr Osborne
was entitled to continued payment of total fixed remuneration for 12
months plus any owed but unpaid incentive amounts.
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Other than as set out above, there are no contracted termination benefits payable to any KMP.
(f)
Non-Executive Director fees
Fees paid to Non-Executive Directors reflect the demands which are made on, and the responsibilities of, the Directors. Non-
Executive Directors’ fees are reviewed annually by the Board and the Remuneration & Nomination Committee.
Non-Executive Directors are paid solely by the way of Directors’ fees and Non-Executive Directors do not participate in equity
nor cash-based incentive schemes. Non-Executive Directors bring a depth of experience and knowledge to their roles and are
a key component in the effective operation of the Board. The maximum total aggregate level of Directors’ fees payable by the
Group is $1,200,000 per annum and there is no proposal to increase the aggregate fee cap in FY22.
Board fees payable to Non-Executive Directors are as follows:
Position
Board Chair
Other Non-Executive Director
- Australia-based
Audit and Risk Committee
Other Committee
- US-based
- Chair
- Member
- Chair
- Member
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Ardent Leisure Group Limited | Annual Report 2021
FY21
$205,000
$120,000
$136,000
$20,000
$15,000
$12,500
$7,500
FY20
$205,000
$120,000
$136,000
$20,000
$15,000
$12,500
$7,500
Directors’ Report
10.
Remuneration report (continued)
(f)
Non-Executive Director fees (continued)
Details of the actual fees delivered to Non-Executive Directors of the Company for FY21 and FY20 are set out below:
Gary Weiss AM
David Haslingden
Randy Garfield
Brad Richmond
Antonia Korsanos
Salary
$
Superannuation
$
218,037
172,945
127,854
101,027
156,000
116,812
163,500
127,137
n/a
101,027
665,391
618,948
20,713
16,430
12,146
9,598
-
2,063
-
1,113
n/a
9,598
32,859
38,802
Total
$
238,750
189,375
140,000
110,625
156,000
118,875
163,500
128,250
n/a
110,625
698,250
657,750
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
(g)
(i)
Additional statutory disclosures
Directors’ interests in shares
Changes to Directors’ interests in shares of Ardent Leisure Group Limited during the year are set out below:
Gary Weiss AM
David Haslingden
Brad Richmond
Randy Garfield
(ii) Minimum share holdings
Number of shares in Ardent Leisure Group Limited
Opening
balance
45,344,317
523,980
310,000
30,000
46,208,297
Acquired
500,000
-
441,550
-
941,550
Disposed
-
-
-
-
-
Closing
balance
45,844,317
523,980
751,550
30,000
47,149,847
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Non-Executive Directors are expected to hold a minimum value of shareholdings (equivalent to the Chairman base fee or Non-
Executive Director base fee, as applicable) within four years of appointment and thereafter increase holdings over their tenure.
(iii)
Executive KMP interests in shares
Changes to the interests of Executive KMP in shares of Ardent Leisure Group Limited during the year are set out below:
Darin Harper
Greg Yong
John Osborne
Number of shares in Ardent Leisure Group Limited
Opening
balance
138,558
-
92,593
231,151
On becoming
KMP
-
64,692
-
64,692
On leaving
the Group
-
-
(92,593)
(92,593)
Closing
balance
138,558
64,692
-
203,250
During the year, certain Main Event executives also purchased equity interests in a subsidiary of the Group, Main Event’s US
holding company, Ardent Leisure US Holding Inc (ALUSH). Changes to the interests of Executive KMP in shares of ALUSH during
the year are set out below:
Chris Morris
Darin Harper
Number of shares in Ardent Leisure US Holding Inc
Opening
balance
-
-
-
Acquired
750
200
950
Disposed
-
-
-
Closing
balance
750
200
950
Ardent Leisure Group Limited | Annual Report 2021
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10.
Remuneration report (continued)
(g)
Additional statutory disclosures (continued)
(iv)
Valuation of awards under the Main Event and Dreamworld cash-settled LTI plans
Main Event LTI Plan
Awards issued under the Main Event LTI plan are accounted as cash-settled share-based payments under IFRS 2 Share-based
payment as the amounts paid under the plan are based on the equity value of Main Event Entertainment Inc. Awards under
this plan are measured at fair value at each reporting date using a Black-Scholes option pricing model. For awards issued to
Executive KMP which remain outstanding at 29 June 2021, the table below shows the fair value at the reporting date as well
as the key factors used to value the performance rights at that date. Under AASB 2 Share Based Payment, the reporting date
valuations are used to value the outstanding performance rights held by Executive KMP at 29 June 2021.
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Main Event LTI Plan
Grant date
First Vesting date(1)
Second Vesting date(1)
Third Vesting date(1)
Fourth Vesting date(1)
Fifth Vesting date(1)
Payment date(1)
Grant date Equity Valuation of Main Event
Average risk-free rate
Dividend yield
Volatility
28 January 2021
28 January 2021
31 December 2021
31 December 2022
31 December 2023
31 December 2024
28 January 2028
US$330.0 million
0.02%
0.0%
68.3%
(1) Vesting and payment dates presented in the table above apply if the plan runs for the full seven year term. However, as noted in Section 10(c)(iii) above,
vesting and payment can be accelerated if there is an earlier Trigger Event, such as a change of control of Main Event. The first vesting date of 28 January
2021 reflects vested service credit provided to employees who were participants of the previous Main Event LTI Plan (replaced by this plan).
Theme Parks LTI Plan
Awards issued under the Theme Parks LTI plan are accounted as long term remuneration under AASB 119 Employee Benefits
as the amounts paid under the plan are based on the Enterprise Value of the Theme Parks business and assets, rather than an
equity value. Amounts potentially payable under the Plan are determined based on an estimate of the future Enterprise Value
of the business compared to the plan Threshold Hurdle at the most likely realisation event, being the seventh anniversary of
the plan.
(v)
Valuation of performance rights issued under the Group’s legacy equity-settled LTIP plan
Performance rights issued to Executive KMP under the Group’s legacy equity-settled LTIP plan are valued using a combination
of the Monte Carlo simulation and the Cox-Ross-Rubenstein valuation models. For rights issued to Executive KMP which
remain outstanding at 29 June 2021, the table below shows the fair value on each grant date as well as the key factors used to
value the performance rights at that date. Under AASB 2 Share Based Payment, these grant date valuations are used to value
the outstanding performance rights held by Executive KMP at 29 June 2021.
LTIP grant
Grant date
Vesting date – year 2
Vesting date – year 3
Vesting date – year 4
Average risk-free rate
Expected price volatility
Expected distribution yield
Security price at grant date
Valuation per performance right on issue
US employees
Australian employees
2017
29 September 2017
29 August 2019
31 August 2020
31 August 2021
2.00% per annum
42.0% per annum
1.6% per annum
$1.82
2018
27 June 2019
31 August 2020
31 August 2021
31 August 2022
1.00% per annum
32.0% per annum
2.0% per annum
$1.08
$0.65
$0.19
$nil
$nil
For performance rights issued under this plan, the grant date is generally the date of issue of the offer letters to executives.
Although the grant date may vary from year to year, the testing period (subject to any hurdles) remains constant with the
vesting date being 24 hours immediately following the announcement of the Group’s full year financial results.
22
Ardent Leisure Group Limited | Annual Report 2021
Directors’ Report
10.
Remuneration report (continued)
(g)
Additional statutory disclosures (continued)
(vi)
Details of equity grant movements
The table below sets out the number of performance rights that were granted, lapsed and vested during the financial year and
that are yet to vest in respect of the Group’s equity-settled LTIP plan:
Year
granted Tranche
Financial years in
which performance
rights may vest
Number
Year
Value of
performance
rights at
grant
$
Number
lapsed
Value of
performance
rights at
lapse
$
Number
vested
Value of
performance
rights at
vesting
$
Maximum
value yet
to vest
$
Current Executive
Equity settled
Darin Harper
Total
LTIP
2017
T2
T3
2021
2022
35,677
35,678
71,355
26,458
30,308
56,766
35,677
-
35,677
15,559
-
15,559
-
-
-
-
-
-
-
30,308
30,308
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(vii)
LTIP performance rights
The number of performance rights on issue and granted to the Group’s current and former executive KMP under the LTIP is
set out below:
Darin Harper
Opening
balance
Granted as
compensation
Exercised
Lapsed
71,355
71,355
-
-
-
-
(35,677)
(35,677)
Closing
balance
35,678
35,678
Vested and
exercisable
-
-
Unvested
35,678
35,678
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(viii) Loans and other transactions with KMP
There were no loans made to KMP during the financial year, as disclosed in Note 36(e) to the financial statements. Refer to Note
36(f) to the financial statements for details of other transactions with KMP during the financial year.
11. Non-audit services
12. Auditor’s independence declaration
The Group may decide to employ the auditor on
assignments additional to their statutory audit duties
where the auditor’s expertise and experience with the
Group are important.
Details of the amounts paid to the auditor (Ernst & Young)
for audit and non-audit services provided during the year
are disclosed in Note 34 to the financial statements.
The Directors have considered the position and, in
accordance with the recommendation received from the
Audit & Risk Committee, are satisfied that the provision of
the non-audit services is compatible with the general
standard of independence for auditors imposed by the
Corporations Act 2001.
The Directors are satisfied that the provision of non-audit
services by the auditor, as set out in Note 34 to the financial
statements, did not compromise the auditor independence
requirements of the Corporations Act 2001 for the following
reasons:
All non-audit services have been reviewed by the
Audit & Risk Committee to ensure that they do not
impact the integrity and objectivity of the auditor; and
None of the services undermines the general
principles relating to auditor independence as set out
in Accounting Professional and Ethical Standards
Board APES 110 Code of Ethics for Professional
Accountants.
A copy of the auditor’s independence declaration as
required under Section 307C of the Corporations Act 2001 is
set out on page 26.
13.
Events occurring after reporting date
Since the end of the financial year, the Directors of the
Company are not aware of any matters or circumstances
not otherwise dealt with in this report or the financial
report that has significantly affected or may significantly
affect the operations of the Group, the results of those
operations or the state of affairs of the Group in financial
years subsequent to the year ended 29 June 2021.
Ardent Leisure Group Limited | Annual Report 2021
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Directors’ Report
14.
Likely developments and expected results of
operations
The threats posed by the outbreak and rapid spread of the
COVID-19 pandemic have been far reaching, with most
countries imposing severe travel restrictions and social
distancing measures. For Ardent, the economic impact has
been significant and there is continuing uncertainty
regarding the pandemic, associated vaccine roll outs and
efficacy, border and trading restrictions and the timeframe
for recovery.
The financial statements have been prepared on the basis of
the current known market conditions. The extent to which
any potential deterioration in either the capital, consumer or
physical property markets may have on the future results of
the Group is unknown. Such results could include the
potential to influence consumer discretionary expenditure,
property market values, the ability of borrowers, including
the Group, to raise or refinance debt, and the cost of such
debt and the ability to raise equity.
At the date of this report, and to the best of the Directors’
knowledge and belief, there are no other anticipated
changes in the operations of the Group which would have
a material impact on the future results of the Group.
15.
Indemnification and insurance of officers and
auditor
Under the Company’s Constitution, the Company
indemnifies:
All past and present officers of the Company, and
persons concerned in or taking part in the management
of the Company, against all liabilities incurred by them in
their respective capacities in successfully defending
proceedings against them; and
All past and present officers of the Company against
liabilities incurred by them, in their respective capacities
as an officer of the Company, to other persons (other than
the Company or its related parties), unless the liability
arises out of conduct involving a lack of good faith.
During the reporting period, the Company had in place a
policy of insurance covering the Directors and officers
against liabilities arising as a result of work performed in
their capacity as Directors and officers of the Company.
Disclosure of the premiums paid for the insurance policy is
prohibited under the terms of the insurance policy.
24
Ardent Leisure Group Limited | Annual Report 2021
16.
Environmental regulations
(a)
Governance
The Group’s operations are not subject to any ‘particular
and significant environmental regulations’ (such as the need
to hold a material environmental licence or approval) and
the Group does not currently have any ‘material exposure to
environmental risks’.
However, given the broad application of environmental
legislation and the fact that the Group’s operations in both
Australia and the United States of America concern physical
real estate sites which may affect the environment (or be
affected by environmental factors), the identification,
assessment and management of risks associated with
environmental matters form part of the Group’s risk
management framework overseen by the Board.
(b)
Theme Parks – Australia
Certain aspects of the operations of the Dreamworld and
WhiteWater World theme parks are subject to legislative
requirements in respect of the environmental impacts of
their operating activities. In particular:
The Environmental Protection Act 1994 (Qld) regulates
all activities where a contaminant may be released into
the environment and/or there is a potential for
environmental harm or nuisance (including in respect
of development on land);
Dreamworld holds the necessary regulatory
authorisations for the storage and use of
flammable/combustible goods and the storage of
hazardous chemicals;
Dreamworld is subject to local council regulations
regarding noise emissions and the staging of night-
time events and functions;
Dreamworld’s Life Sciences department is subject to
the Biosecurity Act 2015 (Cth) and maintains an
exhibition permit under the Exhibited Animals Act 2015
(Qld); and
Dreamworld holds the requisite licences relating to
water conservation and irrigation.
At this time there are no known issues of non-compliance
with any environmental regulations regarding the Group’s
theme park operations and there are no outstanding
regulatory notices.
(c)
Main Event – United States of America
Main Event is subject to various Federal, State and local
environmental requirements in the United States of
America that govern both its day-to-day operations as well
as the development of new centres.
Directors’ Report
16.
Environmental regulations (continued)
(c)
Main Event – United States of America (continued)
Research of environmental factors forms part of our site
due diligence process. In respect of new centre
construction, a prerequisite for any building permit, is
compliance with city and State planning and zoning
requirements which typically include (depending on
locality) soils reports, site line studies, storm water and
irrigation regulation compliance, asbestos testing etc. In
addition a certificate of occupancy or equivalent
certification is issued upon completion of construction and
may require refuse and grease storage permits, health and
food safety permits, and compliance with Occupational
Safety and Health Administration (OSHA) regulations prior
to issuance.
The extent of regulation regarding the use of
environmentally friendly building products and the design
of environmental efficient buildings varies significantly
across the various States and municipalities within which
Main Event operates. Where required by law, such
regulations are followed. Additionally, Main Event
procurement practices seek out energy efficient appliances,
lighting and RTUs to reduce energy consumption.
With respect to operating activities at Main Event,
environmental laws and regulations govern, among other
things:
The discharge of pollutants into the air and water;
The presence, handling, release and disposal of, and
exposure to, hazardous substances;
The reduction of greenhouse gases;
Waste disposal (i.e. recycling programs); and
Electrical and water consumption.
At this time, there are no known issues of non-compliance
with any environmental regulations regarding the Main
Event operations and there are no outstanding regulatory
notices.
With respect to our supply chain we are seeing that major
suppliers are now showing greater transparency on the
environmental and sustainability initiatives being
embedded into their operations.
(d)
Climate change
Management within each of the Group’s businesses
continue to monitor climate change risks, including the
transition to a lower carbon economy and the physical
impacts of climate change on their respective operations
(including matters such as water scarcity, alternative energy
sources and energy costs). At the same time, management
is focused on opportunities presented by climate change
such as resource efficiencies, improvements in technology
and alternate power sources.
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The Board acknowledges the demand of investors,
creditors and other participants in the financial markets for
decision-useful, climate-related information and, consistent
with the recommendations of the Task Force on Climate-
related Financial Disclosures, the Board is committed to
developing clear, transparent and useful disclosures
around climate related risks and opportunities.
The Board maintains oversight of climate change risks and
opportunities through its regular engagement with
management of both businesses at regular Board and
Audit & Risk Committee meetings.
17. Rounding of amounts to the nearest thousand
dollars
The amounts contained in this report and in the financial
report have been rounded to the nearest thousand dollars
(unless otherwise stated) under the option available to the
Company under ASIC Corporations (Rounding in
Financial/Directors’ Reports) Instrument 2016/191. The
Company is an entity to which the legislative instrument
applies.
This report is made in accordance with a resolution of the
Boards of Directors of Ardent Leisure Group Limited.
Gary Weiss AM
Chairman
Sydney
25 August 2021
Brad Richmond
Director
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Ardent Leisure Group Limited | Annual Report 2021
25
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Auditor’s Independence Declaration to the Directors of Ardent Leisure
Group Limited
As lead auditor for the audit of Ardent Leisure Group Limited for the financial year ended
29 June 2021, I declare to the best of my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Ardent Leisure Group Limited, and the entities it controlled during the
financial year.
Ernst & Young
John Robinson
Partner
25 August 2021
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Income Statement
for the year ended 29 June 2021
Income Statement
Income
Revenue from operating activities
Valuation gain - investment held at fair value
Reversal of impairment of property, plant and equipment
Interest income
Other income
Total income
Expenses
Purchases of finished goods
Salary and employee benefits
Finance costs
Property expenses
Depreciation and amortisation
Loss on disposal of assets
Advertising and promotions
Repairs and maintenance
Pre-opening expenses
impairment of property, plant and equipment
Impairment of right-of-use assets
Dreamworld incident costs
Net loss from derivative financial instruments
Other expenses
Total expenses
Loss before tax (benefit)/expense
Income tax (benefit)/expense
Loss for the year
Attributable to:
Ordinary shareholders
Loss for the year
Note
2021
$’000
3
16
4
5
23(a)
6
7
390,667
-
524
37
23,604
414,832
51,095
173,767
69,112
17,451
85,747
313
20,984
25,315
578
-
4,613
5,103
109
48,189
502,376
(87,544)
(611)
(86,933)
2020
$’000
Restated
(Note 16(a))
398,315
390
-
680
11,154
410,539
55,680
179,816
64,182
20,496
94,142
795
23,852
27,427
4,175
15,802
1,620
2,097
38
52,729
542,851
(132,312)
3,783
(136,095)
(86,933)
(86,933)
(136,095)
(136,095)
The above Income Statement should be read in conjunction with the accompanying notes.
Total basic losses per share (cents)
Total diluted losses per share (cents)
9
9
(18.12)
(18.12)
(28.37)
(28.37)
Ardent Leisure Group Limited | Annual Report 2021
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Statement of Comprehensive Income
for the year ended 29 June 2021
Statement of Comprehensive Income
Note
2021
$’000
2020
$’000
Restated
(Note 16(a))
Loss for the year
(86,933)
(136,095)
Other comprehensive (loss)/income for the year
Items that may be reclassified to profit and loss:
Foreign exchange translation difference
Items that will not be reclassified to profit and loss:
Loss on revaluation of investment held at fair value
Other comprehensive (loss)/income for the year, net of tax
Total comprehensive loss for the year, net of tax
Attributable to:
Ordinary shareholders
Total comprehensive loss for the year, net of tax
20
20
(11,810)
4,738
(1,290)
-
(13,100)
(100,033)
4,738
(131,357)
(100,033)
(100,033)
(131,357)
(131,357)
The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
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Ardent Leisure Group Limited | Annual Report 2021
Balance Sheet
as at 29 June 2021
Balance Sheet
Current assets
Cash and cash equivalents
Receivables
Derivative financial instruments
Inventories
Construction in progress inventories
Other
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Investment held at fair value
Derivative financial instruments
Livestock
Intangible assets
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Payables
Construction in progress deposits
Derivative financial instruments
Interest bearing liabilities
Current tax liabilities
Provisions
Other
Total current liabilities
Non-current liabilities
Derivative financial instruments
Interest bearing liabilities
Provisions
Non-current tax liabilities
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Other equity
Reserves
Accumulated losses
Total equity
Non-controlling interest
Total equity
Note
8(b)
11
12
13(a)
14
16
23(a)
30
24
17
7(f)
15
13(b)
24
22
31(b)
24
22
31(b)
7(h)
18
19
20
21
22(c), 22(d)
2021
$’000
2020
$’000
Restated
(Note 16(a))
2019
$’000
Restated
(Note 16(a))
114,962
1,472
-
6,333
3,368
4,464
130,599
408,511
286,712
1,358
29
187
74,553
4,656
776,006
906,605
88,652
-
-
23,507
2,717
4,302
2,386
121,564
2,434
601,194
2,827
8,902
-
615,357
736,921
169,684
777,124
-
(116,281)
(530,500)
130,343
39,341
169,684
161,617
4,760
-
7,858
11,877
3,154
189,266
453,741
327,058
3,201
29
204
80,098
4,185
868,516
1,057,782
63,699
11,413
609
28,903
1,065
2,061
1,781
109,531
1,931
662,253
3,101
10,629
453
678,367
787,898
269,884
777,124
-
(102,863)
(443,567)
230,694
39,190
269,884
92,332
12,524
13
7,782
578
8,427
121,656
455,906
311,528
2,811
177
220
78,973
22,845
872,460
994,116
64,234
-
-
20,452
6,415
1,512
4,294
96,907
505
506,607
2,985
10,000
15,187
535,194
632,101
362,015
777,124
(148)
(107,538)
(307,423)
362,015
-
362,015
The above Balance Sheet should be read in conjunction with the accompanying notes.
Ardent Leisure Group Limited | Annual Report 2021
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Statement of Changes in Equity
for the year ended 29 June 2021
Statement of Changes in Equity
Contributed
Note
equity Other equity
Reserves
Accumulated
losses
Non-
controlling
interest
$’000
$’000
$’000
$’000
$’000
Total
equity
$’000
385,102
(352)
(22,735)
362,015
(136,095)
4,738
(131,357)
(112)
285
(137)
-
-
-
-
-
-
-
-
-
-
777,124
(148)
(92,039)
(299,835)
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16(a)
-
-
-
-
-
(15,499)
(352)
(7,236)
777,124
-
(148)
-
(107,538)
-
(307,423)
(136,095)
-
-
4,738
4,738
-
(136,095)
-
285
(137)
(112)
-
-
-
-
-
Total equity at 26 June 2019, as
originally presented
Impact of change in accounting
standard, AASB 16
Change in accounting policy
Total restated equity at 26 June 2019
Loss for the year (restated)
Other comprehensive income
for the year (restated)
Total restated comprehensive
income/(loss) for the year
Transactions with owners in their
capacity as owners:
Equity-based payments
Issuance of treasury shares
Acquisition of treasury shares
Issuance of RedBird preferred stock
in subsidiary
Transfer from reserve
Total restated equity at 30 June 2020
20
19
19
22(c)
20, 21
Loss for the year
Other comprehensive loss for the year
Total comprehensive loss for the
year
Transactions with owners in their
capacity as owners:
Equity-based payments
Issuance of preferred stock in
subsidiary
20
22(d)
-
-
-
-
-
-
-
777,124
-
-
-
-
-
Total equity at 29 June 2021
777,124
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
30
Ardent Leisure Group Limited | Annual Report 2021
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-
-
-
-
-
-
-
-
-
49
(102,863)
-
(49)
(443,567)
39,190
-
39,190
39,190
-
269,884
-
(13,100)
(13,100)
(86,933)
-
(86,933)
(318)
-
-
-
-
-
-
-
(86,933)
(13,100)
(100,033)
(318)
151
151
(116,281)
(530,500)
39,341
169,684
Statement of Cash Flows
for the year ended 29 June 2021
Statement of Cash Flows
Note
2021
$’000
2020
$’000
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Property expenses paid
Early termination of forward rate contracts
Interest received
Government grants received
Payments for construction in progress inventories
Deposits received for construction in progress
Insurance recoveries
Income tax paid
Net cash flows from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangible assets
Proceeds from sale of plant and equipment
Proceeds from sale of land and buildings
Net cash flows used in investing activities
8(a)
Cash flows from financing activities
Proceeds from loans
Repayments of loans
Proceeds from issuance of preferred stock in subsidiary, net of transaction costs 22(d)
Payment of principal portion of lease liabilities
Lease interest paid
Loan interest paid
Acquisition of treasury shares
Net cash flows from financing activities
19
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the year
433,930
(346,028)
(17,451)
-
37
19,668
(4,001)
1,154
7,777
(1,176)
93,910
(37,207)
(6,464)
91
-
(43,580)
32,112
(55,065)
1,068
(12,491)
(37,366)
(15,869)
-
(87,611)
(37,281)
161,617
(9,374)
114,962
447,260
(380,546)
(20,472)
267
680
4,035
(20,882)
20,771
7,607
(6,002)
52,718
(79,447)
(6,491)
1,446
2,500
(81,992)
87,095
(23,794)
99,900
(12,049)
(28,676)
(23,384)
(137)
98,955
69,681
92,332
(396)
161,617
The above Statement of Cash Flows should be read in conjunction with the accompanying notes.
Ardent Leisure Group Limited | Annual Report 2021
31
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Notes to the Financial Statements
for the year ended 29 June 2021
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Notes to the Financial Statements
Overview
1.
Basis of preparation
Ardent Leisure Group Limited is a limited company,
incorporated and domiciled in Australia, whose shares are
publicly traded on the Australian Securities Exchange.
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Ardent Leisure Group Limited is a for-profit entity for the
purposes of preparing financial statements.
The significant policies which have been adopted in the
preparation of these consolidated financial statements for
the year ended 29 June 2021 are set out in the
accompanying notes. During the year, the Group changed
the measurement method for accounting for property,
plant and equipment as set out in Note 16(a). This change
in policy has been applied retrospectively and
comparatives have been restated in these financial
statements. All other policies have been consistently
applied to the years presented, unless otherwise stated.
These general purpose financial statements have been
prepared in accordance with the requirements of the
Australian Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board
(AASB), and the Corporations Act 2001.
(a)
Historical cost convention
The financial statements have been prepared under the
historical cost convention, as modified by the revaluation
of investments held at fair value and derivative financial
instruments held at fair value.
(b)
Compliance with IFRS as issued by the IASB
Compliance with Australian Accounting Standards ensures
that the financial statements comply with International
Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board (IASB).
Consequently, these financial statements have also been
prepared in accordance with, and comply with, IFRS as
issued by the IASB.
(c)
Principles of consolidation
Subsidiaries are entities over which the Group has control.
The Group controls an entity when the Group 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 to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which
control is transferred to the Group. They are
deconsolidated from the date that control ceases.
Inter-entity transactions, balances and unrealised gains on
transactions between Group entities are eliminated.
Unrealised losses are also eliminated unless the
transaction provides evidence of the impairment of the
asset transferred. Accounting policies of subsidiaries have
been changed where necessary to ensure consistency with
the policies adopted by the Group.
32
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(d)
Foreign currency translation
Functional and presentation currencies
Items included in the financial statements of each of the
Group’s entities are measured using the currency of the
primary economic environment in which the entity
operates (functional currency).
The consolidated financial statements are presented in
Australian dollars, which is the Group’s presentation
currency.
Transactions and balances
Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and
losses resulting from the settlement of such transactions
and from the translation at year end exchange rates of
monetary assets and liabilities denominated in foreign
currencies are recognised in the Income Statement, except
when deferred in equity as qualifying cash flow hedges and
qualifying net investment hedges or they are attributable
to part of the net investment in a foreign operation.
Foreign operations
Assets and liabilities of foreign controlled entities are
translated at exchange rates ruling at reporting date while
income and expenses are translated at average exchange
rates for the period. Exchange differences arising on
translation of the interests in foreign controlled entities are
taken directly to the foreign currency translation reserve.
On consolidation, exchange differences on loans
denominated in foreign currencies, where the loan is
considered part of the net investment in that foreign
operation, are taken directly to the foreign currency
translation reserve. At 29 June 2021, the spot rate used was
A$1.00 = US$0.7563 (2020: A$1.00 = US$0.6863). The
average spot rate during the year ended 29 June 2021 was
A$1.00 = US$0.7475 (2020: A$1.00 = US$0.6721).
(e)
Critical accounting estimates
The preparation of financial statements in conformity with
Australian Accounting Standards may require the use of
certain critical accounting estimates and management to
exercise its judgement in the process of applying the
Group’s accounting policies. Other than the estimation of
fair values described in Notes 17, 24, 26, 30, 31and 35 and
assumptions related to deferred tax assets and liabilities,
impairment testing of assets and determination of lease
periods and incremental borrowing rates, no key
assumptions concerning the future, or other estimation of
uncertainty at the reporting date, have a significant risk of
causing material adjustments to the financial statements in
the next annual reporting period.
Notes to the Financial Statements
for the year ended 29 June 2021
1.
(f)
Basis of preparation (continued)
Going concern
COVID-19 continues to significantly impact the businesses
and operations of the Group. After closing its sites in March
2020, the Group started the year with 38 of its 43 Main
Event centres reopened and one new site, which opened in
July 2020. SkyPoint and Dreamworld reopened in July and
September respectively.
During the closure periods, funding was limited with
minimal income being received and relatively high levels of
cash utilisation. Management of both businesses worked
hard to preserve liquidity, aggressively eliminating all
discretionary expenditure (both operating and capital) and
actively engaging with local, state and federal
governments and external advisors to identify additional
sources of funding and/or financial support.
Main Event
The partnership transaction with US-based private
investment firm, RedBird Capital Partners (RedBird) in June
2020 saw US$80.0 million invested by RedBird in preferred
stock of Main Event’s US parent entity. This transaction
provided liquidity for Main Event to recover from the
impact of COVID-19 and capacity to invest in future growth,
with funds invested by RedBird used exclusively to support
Main Event.
Although a second wave of the pandemic in the US forced
the temporary closure of several sites in
November/December 2020, the business has rebounded in
the second half of the year with strong signs of recovery
and momentum going into FY22.
Theme Parks and Corporate
In August 2020, the Group announced that it had secured a
financial assistance package for its Theme Parks business
under the Queensland Government’s COVID-19 Industry
Support Package and Queensland Tourism Icons Program
2020. This package totalling $69.9 million, comprises a
secured loan facility of $63.7 million (which includes
capitalised interest and fees) and grants of $6.2 million. The
loan is mutually exclusive from the debt facility in place for
the Group’s US Main Event business and is being used to
fund working capital and approved capital expenditure.
Although the Theme Parks business has continued to be
adversely impacted by international and state border
restrictions and snap lockdowns, particularly during
traditionally busy Christmas and Easter holiday periods,
management has responded with initiatives to maximise
local market opportunities. This has helped drive strong
pass sales and positive guest sentiment and the business
remains optimistic for FY22.
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Going concern assessment
There remains continuing uncertainty regarding the
severity and duration of the COVID-19 virus and associated
trading, travel and social distancing restrictions. There is
also uncertainty regarding customers’ propensity to return
to the businesses when these restrictions are lifted.
Notwithstanding, management’s forecasts, together with
available cash reserves and borrowing facilities, continue
to support the going concern assumption.
(g)
New accounting standards, amendments and
interpretations not yet adopted by the Group
Certain new standards, amendments and interpretations
to existing standards have been published that are
mandatory for the Group for accounting periods
beginning on or after 30 June 2021 but which the Group
has not yet adopted. The Group’s assessment of the
impact of those new standards, amendments and
interpretations which may have an impact is set out
below:
Classification of Liabilities as Current or Non-current –
Amendments to IAS 1
In January 2020, the IASB issued amendments to IAS 1 to
specify the requirements for classifying liabilities as current
or non-current. The amendments clarify:
What is meant by a right to defer settlement;
That a right to defer must exist at the end of the
reporting period;
That classification is unaffected by the likelihood that
an entity will exercise its deferral right; and
That only if an embedded derivative in a convertible
liability is itself an equity instrument would the terms
of a liability not impact its classification.
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The amendments are effective for annual reporting periods
beginning on or after 1 January 2023 and must be applied
retrospectively. The Group is currently assessing the impact
the amendments will have on current practice and whether
existing loan agreements may require renegotiation.
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Reference to the Conceptual Framework –
Amendments to IFRS 3
In May 2020, the IASB issued Amendments to IFRS 3
Business Combinations - Reference to the Conceptual
Framework. The amendments are intended to replace a
reference to the Framework for the Preparation and
Presentation of Financial Statements, issued in 1989, with
a reference to the Conceptual Framework for Financial
Reporting issued in March 2018 without significantly
changing its requirements.
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Ardent Leisure Group Limited | Annual Report 2021
33
Notes to the Financial Statements
for the year ended 29 June 2021
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(g)
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Basis of preparation (continued)
New accounting standards, amendments and
interpretations not yet adopted by the Group
(continued)
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IFRS 9 Financial Instruments – Fees in the ’10 per cent’
test for derecognition of financial liabilities
As part of its 2018-2020 annual improvements to IFRS
standards process, the IASB issued an amendment to IFRS
9. The amendment clarifies the fees that an entity includes
when assessing whether the terms of a new or modified
financial liability are substantially different from the terms
of the original financial liability. These fees include only
those paid or received between the borrower and the
lender, including fees paid or received by either the
borrower or lender on the other’s behalf.
The amendment is effective for annual reporting periods
beginning on or after 1 January 2022, with earlier adoption
permitted. The Group will apply the amendments to
financial liabilities that are modified or exchanged on or
after the beginning of the annual reporting period in which
the entity first applies the amendment. The amendments
are not expected to have a material impact on the Group.
(h)
New and amended standards adopted by the
Group
The new or amended accounting standards and
interpretations which became effective for the reporting
period commencing on 1 July 2020 are set out below:
Amendments to AASB 3, Definition of a Business;
Amendments to AASB 7, AASB 9 and AASB 39 Interest
Rate Benchmark Reform;
Amendments to AASB 1 and AASB 8 Definition of
Material; and
Conceptual Framework for Financial Reporting.
The adoption of new and amended standards and
interpretations has not resulted in a material change to the
financial performance or position of the Group.
(i)
Rounding
The Group has relied on the relief provided by ASIC
Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191 issued by the Australian Securities
and Investments Commission relating to the “rounding off”
of amounts in the financial report. Amounts in the financial
report have been rounded to the nearest thousand dollars
in accordance with that Instrument, unless otherwise
indicated.
Reference to the Conceptual Framework –
Amendments to IFRS 3 (continued)
The amendments are effective for annual reporting
periods beginning on or after 1 January 2022 and apply
prospectively.
The amendments are not expected to have a material
impact on the Group.
Property, Plant and Equipment: Proceeds before
Intended Use – Amendments to IAS 16
In May 2020, the IASB issued amendments to IAS 16, which
prohibit entities deducting from the cost of an item of
property, plant and equipment, any proceeds from selling
items produced while bringing that asset to the location
and condition necessary for it to be capable of operating
in the manner intended by management. Instead, an
entity recognises the proceeds from selling such items,
and the costs of producing those items, in profit or loss.
The amendments are effective for annual reporting
periods beginning on or after 1 January 2022 and must be
applied retrospectively to items of property, plant and
equipment made available for use on or after the
beginning of the earliest period presented when the entity
first applies the amendment.
The amendments are not expected to have a material
impact on the Group.
Onerous Contracts – Costs of Fulfilling a Contract –
Amendments to IAS 37
In May 2020, the IASB issued amendments to IAS 37 to
specify which costs an entity needs to include when
assessing whether a contract is onerous or loss-making.
The amendments apply a “directly related cost approach”.
The costs that relate directly to a contract to provide
goods or services include both incremental costs and an
allocation of costs directly related to contract activities.
General and administrative costs do not relate directly to a
contract and are excluded unless they are explicitly
chargeable to the counterparty under the contract.
The amendments are effective for annual reporting periods
beginning on or after 1 January 2022. The Group will apply
these amendments to contracts for which it has not yet
fulfilled all its obligations at the beginning of the annual
reporting period in which it first applies the amendments.
The amendments are not expected to have a material
impact on the Group.
34
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Notes to the Financial Statements
for the year ended 29 June 2021
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Performance
2.
Segment information
A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and
returns that are different to those of other business segments.
Segment income, expenditure, assets and liabilities are those that are directly attributable to a segment and the relevant
portion that can be allocated to the segment on a reasonable basis. Segment assets include all assets used by a segment and
consist primarily of cash, receivables (net of any related provisions), property, plant and equipment, intangible assets, lease
right-of-use assets and investments. Any assets used jointly by segments are allocated based on reasonable estimates of
usage.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Board of Directors.
The main income statement items used by management to assess each of the divisions are divisional revenue, divisional
EBITDA and divisional EBIT.
Business segments
The Group is organised on a global basis into the following divisions by product and service type:
(i)
Main Event
This segment operates solely in the United States of America and comprises 44 Main Event sites in Texas, Arizona, Georgia,
Illinois, Kentucky, Missouri, New Mexico, Ohio, Oklahoma, Kansas, Florida, Tennessee, Maryland, Delaware, Colorado and
Louisiana.
(ii)
Theme Parks
This segment comprises Dreamworld and WhiteWater World in Coomera, Queensland and the SkyPoint observation deck and
climb in Surfers Paradise, Queensland.
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Ardent Leisure Group Limited | Annual Report 2021
35
Notes to the Financial Statements
for the year ended 29 June 2021
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2.
Segment information (continued)
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Main Event
$’000
Theme Parks
$’000
Corporate
$’000
354,655
84,302
(52,720)
(24,837)
6,745
36,012
(11,097)
(7,710)
(64)
(18,871)
-
(5,927)
(306)
(110)
(6,343)
1 July 2020 to 29 June 2021
Segment revenue
Segment EBITDA
Depreciation and amortisation
Amortisation of lease assets
Segment EBIT
Borrowing costs
Lease liability interest expense
Interest income
Loss before tax
Income tax expense
Net loss after tax
The segment EBITDA above has been impacted by the
following specific items:
Net impairment of property, plant and equipment and
lease right-of-use assets
Early termination of leases
Pre-opening expenses
Dreamworld incident costs, net of insurance recoveries
Restructuring and other non-recurring items
Lease payments no longer recognised in EBITDA under
AASB 16 Leases
Net loss on disposal of assets
The net loss after tax above has also been impacted by
the following specific items:
Lease asset amortisation and lease interest expense
recognised under AASB 16 Leases
Tax losses for which deferred tax asset not recognised
Tax deductible temporary differences for which deferred
tax asset not recognised
Tax impact of specific items listed above
(4,089)
(1,308)
(578)
-
(4,168)
47,710
(272)
37,295
(59,183)
(10,086)
-
4,597
(64,672)
-
-
-
(850)
-
85
(11)
(776)
(65)
(5,654)
649
252
(4,818)
Total
$’000
390,667
67,278
(60,736)
(25,011)
(18,469)
(34,762)
(34,350)
37
(87,544)
611
(86,933)
(4,089)
(1,308)
(578)
(850)
(4,118)
47,951
(313)
36,695
-
-
-
-
50
156
(30)
176
(113)
(1,955)
(49)
(19)
(2,136)
(59,361)
(17,695)
600
4,830
(71,626)
Total assets
Acquisitions of property, plant and equipment and
intangible assets
763,216
126,168
17,221
906,605
28,052
21,657
-
49,709
36
Ardent Leisure Group Limited | Annual Report 2021
Notes to the Financial Statements
for the year ended 29 June 2021
2.
Segment information (continued)
26 June 2019 to 30 June 2020
Segment revenue
Segment EBITDA
Depreciation and amortisation
Amortisation of lease assets
Segment EBIT
Borrowing costs
Lease liability interest expense
Interest income
Loss before tax
Income tax expense
Net loss after tax
The segment EBITDA above has been impacted by the
following specific items:
Valuation gain on investment held at fair value
Impairment of property, plant and equipment and lease
right-of-use assets
Early termination of leases
Pre-opening expenses
Dreamworld incident costs, net of insurance recoveries
Restructuring and other non-recurring items
Lease payments no longer recognised in EBITDA under
AASB 16 Leases
Net gain/(loss) on disposal of assets
The net loss after tax above has also been impacted by
the following specific items:
Lease asset amortisation and lease interest expense
recognised under AASB 16 Leases
Tax losses for which deferred tax asset not recognised
Tax deductible temporary differences for which deferred
tax asset not recognised
Tax impact of specific items listed above
Main Event
$’000
343,807
55,268
(55,315)
(28,282)
(28,329)
Theme Parks
$’000
Restated
(Note 16(a))
54,508
(24,338)
(9,828)
(96)
(34,262)
Corporate
$’000
-
(5,598)
(497)
(124)
(6,219)
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a
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i
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Total
$’000
Restated
(Note 16(a))
398,315
25,332
(65,640)
(28,502)
(68,810)
(27,614)
(36,568)
680
(132,312)
(3,783)
(136,095)
390
(17,422)
(2,758)
(4,175)
2,827
(6,952)
48,493
(795)
19,608
s
t
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e
t
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o
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i
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v
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l
a
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i
p
a
c
g
n
k
r
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W
i
s
t
e
s
s
a
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e
t
g
n
o
L
y
t
i
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d
n
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D
t
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m
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g
a
n
a
M
k
s
i
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l
a
i
c
n
a
n
F
i
-
-
(15,407)
-
-
2,827
(779)
107
(3,330)
(16,582)
390
-
-
-
-
(253)
128
-
265
(2,015)
(2,758)
(4,175)
-
(5,920)
48,258
2,535
35,925
(64,837)
(7,951)
-
6,072
(66,716)
s
e
t
o
N
(101)
(2,639)
(8,905)
5,005
(6,640)
(132)
(17,186)
-
(40)
(17,358)
(65,070)
(27,776)
(8,905)
11,037
(90,714)
Total assets
Acquisitions of property, plant and equipment and
intangible assets
909,724
102,936
45,122
1,057,782
58,545
22,824
5
81,374
s
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O
Ardent Leisure Group Limited | Annual Report 2021
37
(a)
Accounting policy
4.
Other income
Notes to the Financial Statements
for the year ended 29 June 2021
i
w
e
v
r
e
v
O
s
t
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t
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C
3.
Revenue from operating activities
Revenue by type
Revenue from services
Revenue from sale of goods
Revenue from operating
activities
Revenue by geographical market
Australia
United States
Timing of revenue recognition
Goods and services transferred at a
point in time
Services transferred over time
2021
$’000
2020
$’000
262,962
127,705
247,943
150,372
390,667 398,315
2020
2021
$’000
$’000
54,508
36,012
354,655
343,807
390,667 398,315
2021
$’000
2020
$’000
380,552
386,737
10,115
11,578
390,667 398,315
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t
o
N
Revenue is measured at the fair value of the consideration
received or receivable. Revenue is recognised for the major
business activities as follows:
Rendering of services
Revenue from rendering of services is recognised when
performance obligations to the customers have been
satisfied.
In the case of Theme Parks, the performance obligation is
satisfied by the provision of entry to Dreamworld,
WhiteWater World and SkyPoint during the validity period
of the entry pass/ticket.
Revenue relating to theme park annual/season passes is
recognised on a straight-line basis over the period that the
pass allows access to the parks. The closure of the parks
due to COVID-19 resulted in pass holders being unable to
access the parks from 23 March 2020 to 16 September
2020. Accordingly, pass revenue was not recognised
during the closure period and is being recognised over the
remaining extended validity period of the affected passes
post reopening.
In the case of Main Event, the performance obligation is
satisfied by provision of a bowling, amusement or other
game/activity which has been paid for by a customer.
Sale of goods
s
e
c
i
d
n
e
p
p
A
Revenue from sale of goods including merchandise and
food and beverage items is recognised when control of
the goods has passed to the buyer, generally on delivery of
the goods at the time of sale.
38
Ardent Leisure Group Limited | Annual Report 2021
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(b)
Performance obligations
The transaction price allocated to the remaining
performance obligations (unsatisfied or partially
unsatisfied) as at end of year is as follows:
Within one year
More than one year
2021
$’000
21,131
169
21,300
2020
$’000
16,761
43
16,804
Set out below is the amount of revenue recognised from:
Amounts included in deferred
revenue at the beginning of the
year
Performance obligations
recognised in previous years
Government subsidies & grants(1)
Insurance recoveries
Other
2021
$’000
2020
$’000
13,841
11,273
-
-
2021
$’000
15,506
7,941
157
23,604
2020
$’000
5,997
5,157
-
11,154
(1) Government subsidies in the year include an amount of $13.9
million (2020: $5.9 million) relating to the Australian federal
Government’s JobKeeper wage subsidy.
(a)
Accounting policy
Government subsidies and grants are recognised where
there is reasonable assurance that the subsidy or grant will
be received, and all attached conditions will be complied
with. When the subsidy or grant relates to an expense item,
it is recognised as income on a systematic basis over the
periods that the related costs, for which it is intended to
compensate, are expensed. When the subsidy or grant
relates to an asset, it reduces the carrying amount of the
asset. The subsidy or grant is then recognised in profit and
loss over the useful life of the depreciable asset by way of a
reduced depreciable charge.
When the Group receives grants of non-monetary assets,
the asset and the grant are recorded at nominal amounts
and released to profit or loss over the expected useful life of
the asset, based on the pattern of consumption of the
benefits of the underlying asset by equal annual
instalments.
Insurance recoveries income is recognised when receipt of
proceeds is considered virtually certain.
Notes to the Financial Statements
for the year ended 29 June 2021
s
t
n
e
t
n
o
C
i
w
e
v
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e
v
O
5.
Finance costs
Interest on loans
Interest on leases
Interest on tax liabilities
Preferred dividends payable
(a)
Accounting policy
Note
23(a)
22(c)
2021
$’000
21,932
34,350
773
12,057
69,112
2020
$’000
26,506
36,568
629
479
64,182
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i
D
Finance costs are recognised as expenses using the effective interest rate method, except where they are included in the costs
of qualifying assets.
Finance costs include interest on short term and long term borrowings, amortisation of ancillary costs incurred in connection
with the arrangement of borrowings, the interest expense on lease liabilities and preferred dividends payable by a subsidiary
where the underlying preferred shares are classified as debt under AASB 132 Financial Instruments.
s
t
n
e
m
e
t
a
t
S
Finance costs associated with the acquisition or construction of a qualifying asset are capitalised as part of the cost of that
asset. Finance costs not associated with qualifying assets, are expensed in the Income Statement.
The capitalisation rate used to determine the amount of finance costs to be capitalised is the weighted average interest rate
applicable to the Group’s outstanding borrowings during the year.
6.
Other expenses
Audit fees
Consulting fees
Consumables
Electricity
Insurance
Legal fees
Merchant fees
Printing, stationery and postage
Taxation fees
Telecommunications
Travel costs
Other administrative costs
Destapling costs
Other
7.
(a)
Taxation
Income tax (benefit)/expense
Current tax
Deferred tax
Over provided in prior year
Deferred income tax (benefit)/expense included in
income tax (benefit)/expense comprises:
Decrease/(increase) in deferred tax assets
(Decrease)/increase in deferred tax liabilities
Note
7(f)
7(h)
2021
$’000
964
1,399
2,085
8,891
8,311
462
5,601
1,501
23
2,966
1,567
7,166
-
7,253
48,189
2021
$’000
(434)
(353)
176
(611)
5,451
(5,804)
(353)
Ardent Leisure Group Limited | Annual Report 2021
39
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n
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2020
$’000
931
2,096
2,154
9,650
7,545
1,124
8,268
1,727
103
3,641
2,177
4,132
403
8,778
52,729
s
e
t
o
N
2020
$’000
Restated
(Note 16(a))
(104)
3,395
492
3,783
(10,140)
13,535
3,395
s
m
e
t
i
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e
s
i
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U
s
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p
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Notes to the Financial Statements
for the year ended 29 June 2021
i
w
e
v
r
e
v
O
s
t
n
e
t
n
o
C
7.
Taxation (continued)
(b)
Numerical reconciliation of income tax (benefit)/expense to prima facie tax benefit
t
r
o
p
e
R
Prima facie loss before tax
Tax at the Australian tax rate of 30% (2020: 30%)
Tax effect of amounts which are not deductible/(taxable) in calculating taxable
income:
Entertainment
Sundry items
Dreamworld incident costs
RedBird preferred stock dividend
Employee benefits
Tax deductible temporary differences for which deferred tax asset not recognised
Tax losses for which deferred tax asset not recognised
Foreign exchange conversion differences
US State taxes
Research and development and other credits
Difference in overseas tax rates
Over provided in prior year
Income tax (benefit)/expense
(c)
Income tax benefit relating to items of other comprehensive income
Revaluation of investment held at fair value
(d) Unrecognised temporary differences
Note
20
2021
$’000
(87,544)
(26,263)
2020
$’000
Restated
(Note 16(a))
(132,312)
(39,693)
59
473
1,080
3,780
(95)
(600)
17,695
(207)
(692)
(605)
4,588
176
(611)
2021
$’000
553
553
2021
$’000
55
948
-
-
28
8,905
27,776
232
(4,009)
(708)
9,757
492
3,783
2020
$’000
Restated
(Note 16(a))
-
-
2020
$’000
Restated
(Note 16(a))
Australian deductible temporary differences for which no deferred tax asset has been
recognised:
Property, plant and equipment
Total temporary differences
Potential Australian tax benefit at 30%
(e)
Tax consolidation legislation
50,621
50,621
15,186
52,808
52,808
15,842
The Company and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation and
entered into tax sharing and tax funding agreements with the entities in the tax consolidated group. The tax sharing
agreement limits the joint and several liability of the wholly-owned entities in the case of a default by the head entity, Ardent
Leisure Group Limited.
40
Ardent Leisure Group Limited | Annual Report 2021
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s
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Notes to the Financial Statements
for the year ended 29 June 2021
7.
Taxation (continued)
(e)
Tax consolidation legislation (continued)
s
t
n
e
t
n
o
C
i
w
e
v
r
e
v
O
Under the tax funding agreement, the wholly-owned entities fully compensate the Company for any current tax payable
assumed and are compensated by the Company for any current tax receivable and deferred tax assets relating to unused tax
losses or unused tax credits that are transferred to the Company under the tax consolidation legislation. The funding amounts
are determined by reference to the amounts recognised in the wholly-owned entities’ financial statements.
The amounts receivable/payable under the tax funding agreement are payable upon demand by the head entity. The head
entity may also require payment of interim funding amounts to assist with its obligations to pay tax instalments. The funding
amounts are netted off in non-current inter-entity payables.
(f)
Deferred tax assets
t
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p
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'
s
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o
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D
Note
2021
$’000
2020
$’000
Restated
(Note 16(a))
s
t
n
e
m
e
t
a
t
S
The balance comprises temporary differences attributable to:
Allowance for expected credit losses - trade receivables
Employee benefits
Provisions and accruals
Inventory diminution
Deferred revenue
Lease liabilities
Tax losses
Other
Deferred tax assets
Set-off of deferred tax balances pursuant to set-off provisions
Australia
United States
Net deferred tax assets
Movements
Balance at the beginning of the year
Adjustment for new lease accounting standard, AASB 16 Leases
Restated opening balance
Foreign exchange differences
Credited to financial asset revaluation reserve
(Debited)/credited to the Income Statement
Balance at the end of the year
Deferred tax assets to be recovered within 12 months
Deferred tax assets to be recovered after more than 12 months
(g)
Unrecognised tax losses
Unused US revenue tax losses for which deferred tax asset not recognised
Unused Australian revenue tax losses for which deferred tax asset not recognised
Total losses
Potential US tax benefit at 21%
Potential Australian tax benefit at 30%
Potential tax benefit
7(h)
7(h)
20
7(a)
-
5,147
4,259
134
1,465
85,215
16,152
2,250
114,622
(117)
(109,849)
4,656
130,953
-
130,953
(11,433)
553
(5,451)
114,622
6,219
108,403
114,622
2021
$’000
85,891
91,446
177,337
18,037
27,434
45,471
14
2,286
10,724
147
2,295
89,891
25,298
298
130,953
(113)
(126,655)
4,185
46,822
74,238
121,060
(247)
-
10,140
130,953
4,113
126,840
130,953
2020
$’000
37,862
66,083
103,945
7,951
19,825
27,776
Ardent Leisure Group Limited | Annual Report 2021
41
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Notes to the Financial Statements
for the year ended 29 June 2021
i
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v
O
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C
7.
(h)
Taxation (continued)
Deferred tax liabilities
t
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a
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The balance comprises temporary differences attributable to:
Prepayments
Accrued revenue and other
Property, plant and equipment
Right-of-use assets
Deferred tax liabilities
Set-off deferred tax balances pursuant to set-off provisions
Australia
United States
Net deferred tax liabilities
Movements
Balance at the beginning of the year
Adjustment for new lease accounting standard, AASB 16 Leases
Restated opening balance
Foreign exchange differences
(Credited)/debited to the Income Statement
Balance at the end of the year
Deferred tax liabilities to be settled within 12 months
Deferred tax liabilities to be settled after more than 12 months
Note
7(f)
7(f)
7(a)
2021
$’000
491
32
37,953
71,490
2020
$’000
248
-
48,181
78,792
109,966
127,221
(117)
(109,849)
-
(113)
(126,655)
453
127,221
-
127,221
(11,451)
(5,804)
109,966
523
109,443
109,966
39,283
74,119
113,402
284
13,535
127,221
36
127,185
127,221
(i)
Review of prior period taxation arrangements
As noted in the June 2020 annual report, a settlement was reached in October 2019 with the ATO under which the Group is
required to make further tax payments in respect of prior periods totalling $15.9 million. Of this, $10.0 million (2020: $10.0
million) remains payable on deferred settlement terms commencing September 2021 for which a liability was recognised in the
June 2021 financial statements. The ATO has taken security over the freehold and business assets of SkyPoint until such time as
the tax liability is fully repaid.
s
e
t
o
N
s
e
c
i
d
n
e
p
p
A
42
Ardent Leisure Group Limited | Annual Report 2021
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f
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p
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s
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Notes to the Financial Statements
for the year ended 29 June 2021
Taxation (continued)
Accounting policy
7.
(j)
Tax
The income tax expense or benefit for the period is the tax
payable on the current period's taxable income based on
the applicable income tax rate for each jurisdiction
adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax
losses.
The current income tax charge is calculated on the basis of
the tax laws enacted or substantively enacted at the end of
the reporting period in the countries where the Company's
subsidiaries and associates operate and generate taxable
income. Management periodically evaluates positions
taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It
establishes provisions where appropriate on the basis of
amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability
method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in
the consolidated financial statements. However, deferred
tax liabilities are not recognised if they arise from the initial
recognition of goodwill. Deferred income tax is also not
accounted for if it arises from initial recognition of an asset
or liability in a transaction other than a business
combination that at the time of the transaction affects
neither accounting nor taxable profit or loss. Deferred
income tax is determined using tax rates (and laws) that
have been enacted or substantially enacted by the end of
the reporting period and are expected to apply when the
related deferred income tax asset is realised or the deferred
income tax liability is settled.
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 losses.
Deferred tax liabilities and assets are not recognised for
temporary differences between the carrying amount and
tax bases of investments in foreign operations where the
Company is able to control the timing of the reversal of the
temporary differences and it is probable that the
differences will not reverse in the foreseeable future.
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Deferred tax assets and liabilities are offset when there is a
legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the
same taxation authority. Current tax assets and tax
liabilities are offset where the entity has a legally
enforceable right to offset and intends either to settle on a
net basis, or to realise the asset and settle the liability
simultaneously.
Ardent Leisure Group Limited and its wholly-owned
Australian controlled entities have implemented the tax
consolidation legislation. As a consequence, these entities
are taxed as a single entity and the deferred tax assets and
liabilities of these entities are set off in the consolidated
financial statements.
Current and deferred tax is recognised in profit or loss,
except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this
case, the tax is also recognised in other comprehensive
income or directly in equity respectively.
Entities within the Group may be entitled to claim special
tax deductions for investments in qualifying assets
(investment allowances). The Group accounts for such
investment allowances as tax credits. This means that the
allowance reduces income tax payable and current tax
expense. A deferred tax asset is recognised for unclaimed
tax credits that are carried forward as deferred tax assets.
Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the
amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case, it is
recognised as part of the cost of acquisition of the asset or
as part of the expense.
s
e
t
o
N
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 taxation authority
is included with other receivables or payables in the
Balance Sheet.
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 taxation authority, are presented as operating cash
flow.
Ardent Leisure Group Limited | Annual Report 2021
43
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2021
$’000
2020
$’000
Restated
(Note 16(a))
(86,933)
(136,095)
55,673
30,074
(524)
4,613
(307)
235
(5)
313
-
69,112
-
60,718
33,424
15,802
1,620
25
559
(43)
795
(390)
64,182
2,326
109
305
3,053
1,530
81
8,295
(1,309)
20,785
2,125
(11,142)
(1,459)
-
(409)
93,910
10,870
(33)
18,660
(11,680)
5,273
(1,633)
(2,585)
11,500
(6,019)
629
(15,492)
52,718
Notes to the Financial Statements
for the year ended 29 June 2021
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O
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Cash flow information
Reconciliation of loss for the year to net cash flows from operating activities
8.
(a)
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N
s
e
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p
p
A
Loss for the year
Non-cash items
Depreciation of property, plant and equipment
Amortisation
(Reversal of impairment)/impairment of property, plant and equipment
Impairment of right-of-use assets
Equity-based payments
Expected credit losses on receivables
Inventory provision decrease
Loss on sale of property, plant and equipment
Valuation gain on investment held at fair value
Classified as financing activities
Finance costs
RedBird preferred share issue costs
Classified as investing activities
Unrealised net loss on derivative financial instruments
Changes in asset and liabilities:
Decrease/(increase) in assets:
Receivables
Inventories
Deferred tax assets
Construction in progress inventories
Other assets
Increase/(decrease) in liabilities:
Payables and other liabilities
Provisions
Construction in progress deposits
Current tax liabilities
Non-current tax liabilities
Deferred tax liabilities
Net cash flows from operating activities
44
Ardent Leisure Group Limited | Annual Report 2021
e
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f
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e
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Notes to the Financial Statements
for the year ended 29 June 2021
8.
Cash flow information (continued)
(b)
Cash and cash equivalents
Cash and cash equivalents at 29 June 2021 comprise the following:
Cash at banks and on hand
Short term deposits
Restricted cash
2021
$’000
108,638
4,098
2,226
114,962
2020
$’000
152,323
6,189
3,105
161,617
Cash at banks earn interest at floating rates based on daily bank deposit rates. Short term deposits are made for varying periods
of between one day and three months, depending on the immediate cash requirements of the Group, and earn interest at the
respective short term deposit rates. Restricted cash includes deposits held as security for ancillary merchant, hedging and bank
guarantee facilities.
Under the terms of the Group’s financing facilities, cash and debt held by the Australian and US businesses are subject to ‘ring
fencing’ provisions whereby each business cannot access cash or debt facilities held by the other. The cash available to the
respective businesses at 29 June 2021 is as follows:
Theme Parks and Corporate (Australian business)
Main Event (US business)
2021
$’000
18,067
96,895
114,962
2020
$’000
32,601
129,016
161,617
For Statement of Cash Flows presentation purposes, 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, and bank overdrafts.
(c)
Accounting policy
Interest income
Interest income is recognised on a time proportion basis using the effective interest rate method. When a receivable is
impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted
at the original effective interest rate of the instrument, and continues unwinding the discount as interest income.
(d)
Changes in interest bearing liabilities arising from financing activities
s
e
t
o
N
Interest bearing liabilities
Opening interest bearing liabilities
Adoption of new lease accounting standard
Restated opening interest bearing liabilities
Changes from financing cash flows
Effect of changes in foreign currency rates
Changes in lease liabilities
Other
Closing interest bearing liabilities
Derivative financial instruments
Opening derivatives liability
Changes from financing cash flows
Changes in fair value
Closing derivatives net liability
Total financial liabilities
2021
$’000
2020
$’000
691,156
-
691,156
(72,506)
(63,721)
54,291
15,481
624,701
2,511
-
(106)
2,405
627,106
169,429
357,630
527,059
80,911
1,882
75,037
6,267
691,156
315
1,931
265
2,511
693,667
Ardent Leisure Group Limited | Annual Report 2021
45
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Notes to the Financial Statements
for the year ended 29 June 2021
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C
9.
Losses per share
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Basic losses per share (cents) from continuing operations
Total basic losses per share (cents)
Diluted losses per share (cents) from continuing operations
Total diluted losses per share (cents)
2021
2020
Restated
(Note 16(a))
(18.12)
(18.12)
(18.12)
(18.12)
(28.37)
(28.37)
(28.37)
(28.37)
Losses used in the calculation of basic and diluted earnings per share ($'000)
(86,933)
(136,095)
Weighted average number of shares on issue used in the calculation of basic losses per
share ('000)
Weighted average number of shares held by employees under employee equity plans
(refer to Note 35) ('000)
s
t
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e
m
e
t
a
t
S
Weighted average number of shares on issue used in the calculation of diluted earnings
per share ('000)
479,706
479,661
9
141
479,706
479,661
Basic earnings per share are determined by dividing profit by the weighted average number of ordinary shares on issue
during the period.
Diluted earnings per share are determined by dividing the profit by the weighted average number of ordinary shares and
dilutive potential ordinary shares on issue during the period.
10. Dividends paid and payable
No interim or final dividend has been paid or declared for the year ended 29 June 2021 (2020: Nil).
(a)
Franking credits
The tax consolidated group has franking credits of $1,501,307 (2020: $1,501,307).
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A
Working capital
11. Receivables
Trade receivables
Allowance for expected credit losses
Other receivables
2021
$’000
1,492
(20)
-
1,472
2020
$’000
4,210
(47)
597
4,760
The Group has recognised an expense of $234,849 in respect of expected credit losses (ECLs) during the year ended 29 June
2021 (2020: $558,643). The expense has been included in other expenses in the Income Statement.
Refer to Note 25(e) for information on the Group’s management of, and exposure to, credit risk.
(a)
Accounting policy
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest rate method less allowances for ECLs. They are presented as current assets unless collection is not expected for more
than 12 months after the reporting date.
The collectability of debts is reviewed on an ongoing basis. Debts are written off when there is no reasonable expectation of
recovering the contractual cash flows.
The Group applies a provision matrix in calculating ECLs for trade receivables. The provision rates are based on days past due
for groupings of customers that have similar loss patterns and are based on the Group’s historically observed default rates and
adjusted with forward-looking information at each reporting date where applicable.
Assessment of the relationship between historical observed default rates, forecast economic conditions and ECLs requires
judgement. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. The Group’s
historical credit loss experience and forecast of economic conditions may not be representative of actual default rates in the
future.
46
Ardent Leisure Group Limited | Annual Report 2021
Notes to the Financial Statements
for the year ended 29 June 2021
11.
Receivables (continued)
(a)
Accounting policy (continued)
s
t
n
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t
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C
i
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v
O
The amount of any provision for ECLs is recognised in the Income Statement within other expenses. When a trade receivable
for which a provision has been recognised becomes uncollectible in a subsequent period, it is written off against the
provision. Subsequent recoveries of amounts previously written off are credited against other expenses in the Income
Statement.
12.
Inventories
Goods held for resale
Provision for diminution
2021
$’000
6,514
(181)
6,333
2020
$’000
8,034
(176)
7,858
The expense relating to the write-downs of inventories during the year ended 29 June 2021 was $128,432 (2020: $60,029).
(a)
Accounting policy
Inventories are valued at the lower of cost and net realisable value. Cost of goods held for resale is determined by weighted
average cost. Cost of catering stores (which by nature are perishable) and other inventories is determined by purchase price.
13. Construction in progress
Construction in progress inventories relates to a centre that is under construction by Main Event under agreements that Main
Event has entered into with a third party. Once the Group has satisfied the requirements of the agreements and acceptance of
the centre by the third party has occurred, the risks and rewards pass to the third party. The costs funded by the third party
during the course of construction are recorded as a current liability, construction in progress deposits, and upon acceptance
of the centre by the third party this liability and related construction in progress inventories are settled. Any net realisable
value adjustment is recorded in the Income Statement as a gain/loss on sale of the construction in progress inventories.
At 29 June 2021, construction of two centres are expected to be completed within 12 months and agreed timeframes.
(a)
Construction in progress inventories
A reconciliation of the carrying amount of the construction in progress inventories at the beginning and end of the current
period is set out below:
t
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R
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a
n
F
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t
a
d
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C
Carrying amount at the beginning of the year
Additions
Disposals
Foreign exchange movements
Carrying amount at the end of the year
(b)
Construction in progress deposits
s
e
t
o
N
2021
$’000
11,877
4,001
(12,296)
(214)
3,368
2020
$’000
578
20,882
(9,202)
(381)
11,877
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F
i
A reconciliation of the carrying amount of the construction in progress deposits liability at the beginning and end of the
current period is set out below:
Carrying amount at the beginning of the year
Additions
Disposals
Foreign exchange movements
Carrying amount at the end of the year
2021
$’000
11,413
1,154
(12,296)
(271)
-
2020
$’000
-
20,771
(9,271)
(87)
11,413
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O
Ardent Leisure Group Limited | Annual Report 2021
47
Notes to the Financial Statements
for the year ended 29 June 2021
i
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v
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v
O
s
t
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e
t
n
o
C
13. Construction in progress (continued)
(c)
Accounting policy
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R
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t
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r
i
D
Construction in progress inventories are valued at the lower of cost and net realisable value. Cost of construction in progress
comprises the purchase price and other costs, including labour costs which are allocated in accordance with the terms of the
agreements.
14. Other assets
Prepayments
Accrued revenue
15. Payables
s
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m
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t
a
t
S
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a
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F
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a
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o
C
Current
Interest payable
GST payable
Trade creditors
Property expenses payable
Employee benefits
Deferred revenue
Property tax payable
Capital expenditure including construction in progress inventories payable
Other payables
Total payables
(a)
Accounting policy
Payables
2021
$’000
4,162
302
4,464
2020
$’000
3,044
110
3,154
2021
$’000
2020
$’000
3,429
-
11,197
-
27,206
16,070
5,910
6,395
18,445
88,652
99
224
16,684
1,727
12,257
13,841
6,121
858
11,888
63,699
s
e
t
o
N
Liabilities are recognised for amounts to be paid in the future for goods or services received, whether or not billed to the
Group. The amounts are unsecured and are usually paid within 30 to 60 days of recognition. Trade payables are presented as
current liabilities unless payment is not due within 12 months from the reporting date. They are recognised initially at fair
value and subsequently measured at amortised cost using the effective interest rate method.
Employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be
settled within 12 months of the reporting date are recognised in other payables 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. Liabilities for non-
accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.
Long term assets
16. Property, plant and equipment
s
e
c
i
d
n
e
p
p
A
Segment
Theme Parks
Main Event
Other
Total
Accumulated
depreciation &
impairments
2021
$’000
Consolidated
book
value
2021
$’000
Cost
2021
$’000
Restated (Note 16(a))
Accumulated
depreciation &
impairments
2020
$’000
Cost
2020
$’000
Consolidated
book value
2020
$’000
309,623
593,128
4,133
906,884
(197,922)
(296,417)
(4,034)
(498,373)
111,701
296,711
99
408,511
290,841
629,676
5,341
925,858
(192,075)
(275,406)
(4,636)
(472,117)
98,766
354,270
705
453,741
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D
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48
Ardent Leisure Group Limited | Annual Report 2021
Notes to the Financial Statements
for the year ended 29 June 2021
s
t
n
e
t
n
o
C
i
w
e
v
r
e
v
O
16.
Property, plant and equipment (continued)
A reconciliation of the carrying amount of property, plant and equipment at the beginning and end of the current and previous
years is set out below:
Land and
buildings
$’000
Major rides
and
attractions
$’000
Plant and
equipment
$’000
Furniture,
fittings and
equipment
$’000
Motor
vehicles
$’000
Construction
in progress
$’000
Total
$’000
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s
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o
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D
2021
Carrying amount at the
beginning of the year
Additions
Transfer from construction
in progress
Transfer (to)/from
intangible assets
Disposals
Depreciation
Foreign exchange
movements
Impairment
Carrying amount at the
end of the year
Restated (Note 16(a))
2020
Carrying amount at the
beginning of the year
Additions
Transfer from construction
in progress
Transfer to intangible assets
Disposals
Depreciation
Foreign exchange
movements
Impairment
Carrying amount at the
end of the year
255,545
3,906
16,716
209
147,535
9,716
2,352
6,123
6,701
-
(991)
(6,209)
(18,648)
354
-
-
(2,337)
-
374
(46,289)
-
-
(12,855)
170
2,625
180
854
(1)
(129)
(795)
-
-
43
-
31,277
28,825
453,741
42,836
-
(16,030)
-
-
1
(27)
-
-
12
(67)
-
11
(812)
(55,657)
(629)
-
(32,132)
524
236,309
20,711
105,352
2,734
17
43,388
408,511
Land and
buildings
$’000
Major rides
and
attractions
$’000
Plant and
equipment
$’000
Furniture,
fittings and
equipment
$’000
Motor
vehicles
$’000
Construction
in progress
$’000
Total
$’000
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235,875
28,479
10,493
-
(5,121)
(6,633)
1,844
(9,392)
16,685
-
11,376
-
(1,999)
(3,302)
-
(6,044)
159,335
15,873
17,343
(50)
2,680
(49,632)
2,260
(274)
2,073
25
1,700
-
(18)
(1,075)
-
(80)
96
-
19
-
-
(60)
-
(12)
41,842
30,463
455,906
74,840
(40,931)
(4)
(1,723)
-
-
(54)
(6,181)
(60,702)
1,630
-
5,734
(15,802)
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255,545
16,716
147,535
2,625
43
31,277
453,741
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(a)
Changes in accounting policies and disclosures
Measurement basis for Theme Parks land, buildings and
major rides and attractions
The Group re-assessed its accounting for property, plant
and equipment (PPE) with respect to measurement of
certain classes of PPE after initial recognition. The Group
had previously measured Theme Parks land, buildings and
major rides and attractions using the revaluation model.
Assets measured under the revaluation model were carried
at a revalued amount being their fair value at the date of
revaluation less any subsequent accumulated depreciation
and subsequent accumulated impairment losses. All other
classes of PPE have been measured by the Group using the
cost model.
During the year, the Group elected to change the method
of accounting for PPE carried under the revaluation model,
as the Group believes that the cost model provides reliable
and more relevant information to the users of its financial
statements as it is more aligned to practices adopted by its
competitors and enables better comparability between
the Group’s businesses and assets, and with industry
peers. The Group has applied the cost model
retrospectively, and prior year comparatives have been
restated in these financial statements.
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Ardent Leisure Group Limited | Annual Report 2021
49
Notes to the Financial Statements
for the year ended 29 June 2021
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16. Property, plant and equipment (continued)
(a)
Changes in accounting policies and disclosures (continued)
Impact on the consolidated Income Statement:
The change in accounting policy affected the following items in the Group’s prior year Income Statement:
Income Statement
increase/(decrease) in loss
Loss on disposal of assets
Impairment of property, plant and equipment
Valuation loss – property, plant and equipment
Net impact before tax expense
Income tax expense
Net impact after tax expense
Impact on the consolidated Balance Sheet:
As reported
$’000
2020
Adjustment
$’000
407
5,436
10,366
16,209
4,701
20,910
388
10,366
(10,366)
388
(918)
(530)
Restated
$’000
795
15,802
-
16,597
3,783
20,380
The change in accounting policy affected the following items in the Group’s prior year Balance Sheets:
Balance Sheet
increase/(decrease)
As reported
$’000
Adjustment
$’000
Restated
$’000
As reported
$’000
2019
2020
2019
Adjustment
$’000
2020
Adjustment
$’000
Restated
$’000
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Assets
Property, plant and equipment:
Land and buildings
Major rides and attractions
Plant and equipment
Construction work in
progress
Furniture, fittings and
equipment
Motor vehicles
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Total impact on assets
Equity
Reserves
Accumulated losses
Total impact on equity
191,144
66,454
174,882
44,731
(49,769)
(15,547)
235,875
16,685
159,335
199,934
74,467
163,200
44,731
(49,769)
(15,547)
10,880
(7,982)
(118)
255,545
16,716
147,535
41,842
-
41,842
31,277
-
-
31,277
4,001
318
478,641
(1,928)
(222)
(22,735)
2,073
96
455,906
4,650
277
473,805
(1,928)
(222)
(22,735)
(97)
(12)
2,671
2,625
43
453,741
(92,039)
(300,187)
(392,226)
(15,499)
(7,236)
(22,735)
(107,538)
(307,423)
(414,961)
(89,505)
(436,861)
(526,366)
(15,499)
(7,236)
(22,735)
2,141
530
2,671
(102,863)
(443,567)
(546,430)
The adjustments above reflect the reversal of previously revaluation increments relating to SkyPoint and Excess Land adjacent
to Dreamworld, and the corresponding tax impact on June 2019 opening retained earnings.
Impact on Earnings per share:
The change in accounting policy affected the Group’s prior year losses per share as follows:
Losses per share
increase/(decrease)
Basic losses per share from continuing operations
Diluted losses per share from continuing operations
As reported
$’000
2020
Adjustment
$’000
28.48
28.48
(0.11)
(0.11)
Restated
$’000
28.37
28.37
50
Ardent Leisure Group Limited | Annual Report 2021
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Notes to the Financial Statements
for the year ended 29 June 2021
16.
Property, plant and equipment (continued)
(b)
Accounting policy
Property, plant and equipment is stated at cost, net of
accumulated depreciation and accumulated impairment
losses, if any. Such cost includes the cost of replacing part of
the plant and equipment and borrowing costs for long-term
construction projects if the recognition criteria are met. When
significant parts of plant and equipment are required to be
replaced at intervals, the Group depreciates them separately
based on their specific useful lives. All other repair and
maintenance costs are recognised in profit or loss as incurred.
Impairment of assets
Property, plant and equipment and lease right-of-use
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. The recoverable amount is the higher of an asset’s
fair value less costs to sell, and its value in use.
For the purposes of assessing impairment, assets are
grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of
the cash inflows from other assets or groups of assets (cash-
generating units). Non-financial assets other than goodwill
that suffered impairment are reviewed for possible reversal
of the impairment at each reporting date.
In assessing impairment of assets, the Group has
determined that it has the following CGUs:
SkyPoint, including the SkyPoint climb;
Dreamworld/WhiteWater World combined theme park;
Dreamworld excess land; and
Each individual Main Event US entertainment centre.
In the current year, the challenging conditions brought
about by COVID-19 have continued to have an adverse
impact on the carrying value of property, plant and
equipment and lease right-of-use assets. This has resulted
in an additional impairment loss of US$3.1 million (A$4.1
million) relating to these impaired centres.
Key impairment assumptions and sensitivities
The recoverable amount of assets has been determined
based on value-in-use calculations, which include the
following key assumptions:
Main Event
Pre-tax discount rate
Long term EBITDA growth rate
Dreamworld
Pre-tax discount rate
Long term EBITDA growth rate
SkyPoint
Pre-tax discount rate
Long term EBITDA growth rate
2021
$’000
15.2%
3.0%
2021
$’000
13.6%
2.5%
2021
$’000
14.3%
2.5%
2020
$’000
13.9%
1.0%
2020
$’000
13.0%
2.5%
2020
$’000
14.0%
2.5%
The assets at Dreamworld are recorded at their
recoverable amount, net of cumulative impairments.
While the directors consider the above assumptions to be
reasonable, possible changes in these assumptions could
result in further impairments or reversals of impairments.
The sensitivity of Dreamworld assets’ value-in-use to
changes in key assumptions are as follows:
In previous years, the Group performed an impairment
assessment of property, plant and equipment and lease
right-of-use assets in accordance with AASB 136 Impairment
of assets. This analysis determined that the carrying value of
these assets in four Main Event centres exceeded their
recoverable amount by US$28.5 million (A$41.5 million) and
impairment losses were recognised for this amount.
Dreamworld
Pre-tax discount rate
10-year Average Annual EBTDA
Long term EBITDA growth rate
Change in
value-in-use
$’000
(4,917)
5,149
4,129
4,129
3,705
(3,385)
+0.5%
-0.5%
+5%
-5%
+0.5%
-0.5%
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For Main Event and SkyPoint assets, the Directors do not
consider a change in any of the key assumptions which
would cause the carrying amount to exceed their
recoverable amount to be reasonably possible.
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Ardent Leisure Group Limited | Annual Report 2021
51
Notes to the Financial Statements
for the year ended 29 June 2021
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16. Property, plant and equipment (continued)
(b)
Accounting policy (continued)
Depreciation
Land and construction work in progress are not depreciated. Depreciation on other assets is calculated using the straight-line
method to allocate their cost or impaired amounts, net of their residual values, over their estimated useful lives as follows:
Buildings
Land improvements
Major rides & attractions
Plant and equipment
Furniture, fittings & equipment
Motor vehicles
2021
10 - 40 years
20 - 40 years
5 - 40 years
3 - 25 years
3 - 20 years
4 - 10 years
2020
20 - 40 years
20 - 40 years
5 - 40 years
4 - 25 years
3 - 25 years
4 - 10 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. Gains and losses
on disposals are determined by comparing proceeds with carrying amount. These are included in the Income Statement.
2021
$’000
68,284
(12,880)
55,404
36,942
(17,793)
19,149
74,553
2021
$’000
60,737
(5,333)
55,404
19,361
6,430
(11)
(18)
(5,063)
(1,550)
19,149
74,553
2020
$’000
73,617
(12,880)
60,737
35,188
(15,827)
19,361
80,098
2020
$’000
59,950
787
60,737
19,023
6,534
54
(1,525)
(4,922)
197
19,361
80,098
17.
Intangible assets
Goodwill at cost
Accumulated impairment
Other intangibles at cost
Accumulated amortisation and impairment
Total intangible assets
Goodwill
Opening net book amount
Foreign exchange movements
Closing net book amount
Other intangibles
Opening net book amount
Additions
Transfer (to)/from property, plant and equipment
Disposals
Amortisation
Foreign exchange movements
Closing net book amount
Total intangible assets
52
Ardent Leisure Group Limited | Annual Report 2021
Notes to the Financial Statements
for the year ended 29 June 2021
17.
Intangible assets (continued)
(a)
Goodwill
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Goodwill represents goodwill acquired by the Group as part of various acquisitions. Goodwill is monitored by management at
the operating segment level. Management reviews the business performance based on geography and type of business as
disclosed in Note 2.
A segment level summary of the goodwill allocation is presented below:
United States
Main Event
(i)
Impairment tests for goodwill
2021
$’000
55,404
55,404
2020
$’000
60,737
60,737
Goodwill is allocated to the Group’s cash-generating units (CGUs) identified according to business segment and country of
operation.
Key assumptions used for value in use calculations
The table below shows the key assumptions used in the value in use calculations to test for impairment in the business
segments to which a significant amount of goodwill was allocated:
Budget/forecast
period EBITDA growth rate(1)
2020
Long term EBITDA
growth rate(2)
2021
2020
% per annum % per annum % per annum % per annum % per annum % per annum
2021
2021
2020
Post-tax discount rate(3)
Main Event
15.25
19.91
2.00
2.00
15.75
12.00
(1) Compound annual growth rate over the five-year budget/forecast period.
(2) Average growth rate used to extrapolate cash flows beyond the budget/forecast period.
(3)
In performing the value in use calculation, the Group has applied a post-tax discount rate to discount the forecast future attributable post-tax
cash flows. The pre-tax discount rate is 16.26% (2020: 12.16%).
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The period over which management has projected the
CGU cash flows is five years. The weighted average
growth rates used are consistent with forecasts included in
industry reports. The discount rates used are post tax and
reflect specific risks relating to the country in which the
CGU operates.
The recoverable amount of a CGU is determined based on
value in use calculations. These calculations use cash flow
projections based on the FY22-FY26 financial year
budgets/forecasts. Cash flows beyond the budget period
are extrapolated using the growth rates stated above. The
growth rate does not exceed the long term average
growth rate for the business in which the CGU operates.
Sensitivity to changes in assumptions
Management recognises that the calculation of
recoverable amount can vary based on the assumptions
used to project or discount cash flows and those changes
to key assumptions can result in recoverable amounts
falling below carrying amounts. In relation to the CGUs
above, the recoverable amounts of Main Event centres are
in excess of their carrying amounts.
The Directors consider that the growth rates are
reasonable, and do not consider a change in any of the
key assumptions would cause the CGUs’ carrying amount
to exceed their recoverable amount to be reasonably
possible.
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(b)
Accounting policy
Software
Software is amortised on a straight-line basis over the
period during which the benefits are expected to be
received, which is between 5 – 8 years (2020: 5 – 8 years).
Goodwill
Goodwill on acquisitions of subsidiaries is included in
intangible assets. Goodwill on acquisitions of associates
is included in investments in associates. Goodwill is not
amortised but it is tested for impairment annually, or
more frequently if events or changes in circumstances
indicate that it might be impaired, and is carried at cost
less accumulated impairment losses. Gains and losses on
the disposal of an entity include the carrying amount of
goodwill relating to the entity sold.
Ardent Leisure Group Limited | Annual Report 2021
53
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Notes to the Financial Statements
for the year ended 29 June 2021
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17.
Intangible assets (continued)
(b)
Accounting policy (continued)
Goodwill (continued)
Goodwill is allocated to CGUs for the purposes of impairment testing. The allocation is made to those CGUs or groups of CGUs
that are expected to benefit from the business combination in which the goodwill arose, identified according to operating
segments (refer to Note 2).
Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment or more frequently if events or changes in circumstances indicate that they might be impaired. Other 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. The
recoverable amount is the higher of an asset’s fair value less costs to sell, and its value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely
independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than
goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.
Other intangibles
Other intangibles including the Safety Case and licence to operate for amusement parks are amortised on a straight-line basis
over the period during which the benefits are expected to be received, which is five years.
Debt and equity
18. Contributed equity
No. of
shares
Details
Date of
income
entitlement
2021
$’000
2020
$’000
479,706,016
479,706,016
Shares on issue at beginning of the year
Shares on issue at end of the year
30 Jun 2020
29 Jun 2021
777,124
777,124
777,124
777,124
19. Other equity
s
e
t
o
N
Treasury shares
Opening balance
Acquisition of treasury shares
Issuance of treasury shares
Closing balance
(a)
Accounting policy
No. of shares
2021
2020
2021
$'000
-
-
-
-
142,167
119,421
(261,588)
-
-
-
-
-
2020
148
137
(285)
-
s
m
e
t
i
d
e
s
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g
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p
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A
Treasury shares are equity investments in Ardent Leisure Group Limited that are held by the Ardent Leisure Employee Share
Trust for the purpose of issuing shares under the Group’s DSTI and LTIP. Shares issued to employees are recognised on a first-
in-first-out basis.
Own equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from equity. No gain or loss
is recognised in profit or loss on the purchase, sale, issue or cancellation of the Group’s own equity instruments. Any difference
between the carrying amount and the consideration, if reissued to employees under the Group’s LTIP and DSTI, is recognised
in the equity-based payments reserve. Performance rights vesting during the reporting period may be satisfied with treasury
shares.
54
Ardent Leisure Group Limited | Annual Report 2021
Notes to the Financial Statements
for the year ended 29 June 2021
20. Reserves
Foreign currency translation reserve
Opening balance
Transfer to accumulated losses for discontinued operation
Translation of foreign operations
Closing balance
Equity-based payment reserve
Opening balance
Option expense
Closing balance
Financial asset revaluation reserve
Opening balance
Revaluation - investment held at fair value
Tax impact of revaluation
Closing balance
Corporate restructure reserve
Opening balance
Impact of corporate restructure
Closing balance
Total reserves
Foreign currency translation reserve
Note
2021
$’000
2020
$’000
Restated
(Note 16(a))
t
r
o
p
e
R
(568)
-
(11,810)
(12,378)
(8,204)
(318)
(8,522)
-
(1,843)
553
(1,290)
(5,355)
49
4,738
(568)
(8,092)
(112)
(8,204)
-
-
-
-
(94,091)
-
(94,091)
(116,281)
(94,091)
-
(94,091)
(102,863)
30
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Exchange differences arising on the translation of foreign controlled entities are taken to the foreign currency translation
reserve. In addition, on consolidation, exchange differences on loans denominated in foreign currencies are taken directly to
the foreign currency translation reserve where the loan is considered part of the net investment in that foreign operation.
Equity-based payment reserve
The equity-based payment reserve is used to recognise the fair value of performance rights issued to employees under the
Group’s DSTI and LTIP.
Corporate restructure reserve
Under the corporate restructure in December 2018, Ardent Leisure Group Limited shares were issued to security holders in
exchange for their stapled securities. Ardent Leisure Group Limited share capital was measured at fair value at the date of the
transaction, being the market capitalisation of the previous stapled Ardent Leisure Group at the date of implementation ($777.1
million). The difference between the contributed equity of Ardent Leisure Group Limited and the pre-restructure contributed
equity of the stapled Ardent Leisure Group at the date of the transaction was recognised as a corporate restructure reserve.
s
e
t
o
N
21. Accumulated losses
Opening balance
Loss for the year
Impact of change in accounting standard
Transfer from foreign currency translation reserve
Closing balance
Note
2021
$’000
(443,567)
(86,933)
-
-
(530,500)
20
2020
$’000
Restated
(Note 16(a))
(307,071)
(136,095)
(352)
(49)
(443,567)
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O
Ardent Leisure Group Limited | Annual Report 2021
55
Notes to the Financial Statements
for the year ended 29 June 2021
i
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e
v
O
s
t
n
e
t
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C
22.
Interest bearing liabilities
t
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R
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s
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o
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c
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r
i
D
s
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m
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t
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l
i
a
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c
n
a
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a
d
i
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C
s
e
t
o
N
s
e
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i
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n
e
p
p
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n
a
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o
f
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e
P
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a
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i
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a
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W
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d
n
a
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e
D
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a
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a
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2021
$’000
2020
$’000
As at 29 June 2021, Main Event had unrestricted access to
the following credit facilities:
Current
US Term debt
Lease liabilities
Total current
Non-current
US Term debt & revolving credit
Less: unamortised loan costs
Queensland Government loan
Less: unamortised loan costs
RedBird preferred stock
Less: unamortised borrowing costs
Series B preferred stock
Lease liabilities
Total non-current
Total interest bearing liabilities
1,865
21,642
23,507
2,040
26,863
28,903
237,983
181,022
(7,445)
(5,306)
-
13,753
-
(584)
70,322
75,692
(8,685)
(6,923)
-
1,198
342,342
370,078
601,194 662,253
624,701 691,156
Main Event US$ term debt(1)
Amount used
Amount unused
Main Event US$ revolving credit
facility(2)
Amount used
Amount unused
Total facilities
Total amount used
Total amount unused
2021
$’000
2020
$’000
182,887
203,596
(182,887) (203,596)
-
-
33,056
-
33,056
36,427
(36,427)
-
215,943
240,023
(182,887) (240,023)
-
33,056
(1) Main Event US$123.5 million term debt and US$14.8 million
delayed draw term debt facilities will mature on 4 April 2025.
(2) Main Event US$25.0 million revolving credit facility will mature on
(a)
US term debt and revolving credit facilities
4 April 2024.
(b)
Queensland Government loan
On 7 August 2020, the Group secured a financial assistance
package for its Theme Parks division under the Queensland
Government’s COVID-19 Industry Support Package and
Queensland Tourism Icons Program 2020.
The package totalling $69.9 million comprises a three-year
secured loan facility of $63.7 million (which includes
capitalised interest and fees) and grants of $6.2 million
which can be used to fund working capital and approved
capital expenditure. The loan facility was effective from 15
October 2020 and is mutually exclusive from the debt
facility in place for the Group’s US Main Event business.
The weighted average interest rate payable on the
Queensland Government loan at 29 June 2021 is 4.09% per
annum.
As at 29 June 2021, the Australian business has access to
the following credit facilities:
Queensland Government loan
facility
Amount used
Amount unused
2020
$’000
63,662
(13,753)
49,909
The Group’s wholly-owned US subsidiary, Main Event
Entertainment, Inc. (Main Event) has access to a US$138.3
million (2020: US$139.7 million) term loan facility,
comprising a US$123.5 million (2020 US$124.8 million)
drawn term loan and a US$14.8 million (2020: US$14.9
million) delayed draw term loan, as well as a US$25.2
million (2020: US$25 million) revolving credit facility
(collectively, the Facility). The facility is secured and
guaranteed by Main Event and is non-recourse to the
other assets of the Group.
The term debt facilities require principal repayments equal
to 1.0% of the original principal amounts drawn on these
facilities each year.
In April 2020, Main Event’s US debt facility was amended
to remove US$60.0 million undrawn capacity from its
delayed draw term loan (DDTL) facility. This change was
required by the lender in exchange for their consent for
covenant waivers for the four quarters ending March 2021,
due to the impact of the COVID-19 pandemic.
Notwithstanding the waiver noted above, the terms of the
facility ordinarily impose a net leverage covenant on Main
Event, being the ratio of net debt to EBITDA adjusted for
unrealised and certain non-cash and other one-off items
(adjusted EBITDA) as well as a minimum cash holding
requirement.
All of Main Event’s debt facilities have a variable interest
rate. As detailed in Note 24, the interest rates on the loans
have been partially fixed during the year using interest
rate swaps and caps. The weighted average interest rates
payable on the loans at 29 June 2021, including the impact
of the interest rate caps in place at 29 June 2021, is 7.50%
per annum (2020: 7.98% per annum) for USD
denominated debt.
56
Ardent Leisure Group Limited | Annual Report 2021
Notes to the Financial Statements
for the year ended 29 June 2021
22.
Interest bearing liabilities (continued)
(c)
RedBird preferred stock
On 15 June 2020, the Group entered into a partnership
transaction with a US-based private investment firm,
RedBird Capital Partners (RedBird) under which RedBird
invested US$80.0 million via Series A Preferred Stock into
Main Event’s US parent entity, Ardent Leisure US Holding
Inc (ALUSH).
The preferred stock entitles RedBird to a 10.0% per annum
preferred coupon on the US$80.0 million invested, which is
not paid in cash but accumulates and compounds semi-
annually. RedBird is also entitled to participate in common
stock dividends of ALUSH and residual net assets in the
event of its liquidation.
In conjunction with the transaction, RedBird was granted
an option to acquire additional equity in ALUSH which
would enable it to move to a 51% controlling interest,
exercisable between 30 June 2022 and 30 June 2024.
In accordance with the requirements of AASB 132 Financial
Instruments, this investment is classified as a compound
financial instrument and split into the following
components:
Interest bearing liability
Equity (minority interest
in the Group)
Derivative option liability
Note
2021
$’000
68,769
2020
$’000
61,637
24
39,046
2,434
39,190
1,931
(d)
ALUSH series B preferred stock
On 16 March 2021, key executives of Main Event
Entertainment, Inc (Main Event) purchased 1,100 shares of
newly issued Series B Preferred Stock in ALUSH for US$1.1
million. The stock entitles each investor a preferential
dividend of 10% per annum, which is not paid in cash but
accumulates and compounds semi-annually. Investors are
also entitled to participate in common stock dividends of
ALUSH and residual net assets in the event of its
liquidation. Series B Preferred Stock will convert into
common stock when RedBird’s Series A Preferred Stock
converts to common stock.
In accordance with requirements of AASB 132 Financial
Instruments, this investment is classified as a compound
financial instrument and split into the following
components:
Interest bearing liability
Equity (minority interest in the
Group)
2021
$’000
1,198
2020
$’000
-
295
-
s
t
n
e
t
n
o
C
i
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v
O
(e)
Total secured liabilities and assets pledged as
security
The carrying amounts of Main Event assets pledged as
security for the US term debt and revolving credit facilities
are as follows:
Current assets
Non-current assets
Total assets
2020
2021
$’000
$’000
56,149
63,124
599,594 691,115
662,718 747,264
The carrying amounts of Theme Park assets pledged as
security for the Queensland Government loan facility are
as follows:
2021
$’000
22,212
116,521
138,733
Current assets
Non-current assets
Total assets
(f)
Accounting policy
Interest bearing liabilities
t
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Interest bearing liabilities are initially recognised at fair
value, net of transaction costs incurred and are
subsequently measured at amortised cost. Any difference
between the proceeds (net of transaction costs) and the
redemption amount is recognised in the Income
Statement over the period of the borrowing using the
effective interest rate method.
Interest bearing liabilities are classified as current liabilities
unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the
end of the reporting period.
s
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Ardent Leisure Group Limited | Annual Report 2021
57
Notes to the Financial Statements
for the year ended 29 June 2021
i
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23. Leases
(a)
Amounts recognised in the balance sheet
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June 2021
Right-of-use assets
At 1 July 2020
Additions
Amortisation
Modifications to lease terms
Leases terminated
Variable lease payment adjustments
Foreign exchange movements
Impairment
At 29 June 2021
June 2020
Right-of-use assets
At 26 June 2019
Additions
Amortisation
Modifications to lease terms
Leases terminated
Variable lease payment adjustments
Foreign exchange movements
Impairment
At 30 June 2020
June 2021
Lease liabilities
At 1 July 2020
Additions
Interest expenses
Modifications to lease terms
Leases terminated
Variable lease payment adjustments
Lease payments
Foreign exchange movements
At 29 June 2021
June 2020
Lease liabilities
At 26 June 2019
Additions
Interest expenses
Modifications to lease terms
Leases terminated
Variable lease payment adjustments
Lease payments
Foreign exchange movements
At 30 June 2020
Lease liabilities are presented in the balance sheet as follows:
Interest bearing liabilities
Current
Non-current
58
Ardent Leisure Group Limited | Annual Report 2021
Buildings
$’000
326,402
18,390
(24,666)
(366)
(20)
1,762
(30,671)
(4,613)
286,218
Buildings
$’000
310,560
17,705
(28,126)
30,757
(9,185)
1,595
4,716
(1,620)
326,402
Buildings
$’000
396,238
18,390
34,287
(448)
(16)
1,771
(49,464)
(37,325)
363,433
Buildings
$’000
356,662
21,365
36,492
30,757
(15,292)
1,595
(40,321)
4,980
396,238
Equipment
$’000
654
92
(342)
147
-
-
(61)
-
490
Equipment
$’000
959
44
(369)
-
-
-
20
-
654
Equipment
$’000
701
92
63
147
-
-
(387)
(66)
550
Equipment
$’000
959
44
76
-
-
-
(397)
19
701
Vehicles
$’000
2
-
(3)
5
-
-
-
-
4
Vehicles
$’000
9
-
(7)
-
-
-
-
-
2
Vehicles
$’000
2
-
-
5
-
-
(6)
-
1
Vehicles
$’000
9
-
-
-
-
-
(7)
-
2
Total
$’000
327,058
18,482
(25,011)
(214)
(20)
1,762
(30,732)
(4,613)
286,712
Total
$’000
311,528
17,749
(28,502)
30,757
(9,185)
1,595
4,736
(1,620)
327,058
Total
$’000
396,941
18,482
34,350
(296)
(16)
1,771
(49,857)
(37,391)
363,984
Total
$’000
357,630
21,409
36,568
30,757
(15,292)
1,595
(40,725)
4,999
396,941
Note
22
22
June 2021
$’000
21,642
342,342
363,984
June 2020
$’000
26,863
370,078
396,941
Notes to the Financial Statements
for the year ended 29 June 2021
23.
Leases (continued)
(b)
Additional profit or loss and cashflow information
The group recognised rent expenses from variable lease
payments of $296,584 for the year ended 29 June 2021
(2020: $98,666).
Cash flows in respect of leases in current period are $52.6
million (2020: $40.7 million). For interest expense in relation
to leasing labilities, refer to finance costs (Note 5).
(c)
Accounting policy
For new contracts entered into, the Group considers
whether the contract is, or contains a lease. A lease is a
contract, or part of a contract, that conveys the right to
control the use of an identified asset for a period of time in
exchange for consideration. To determine whether a
contract conveys the right to control the use of an
identified asset for a period of time, the Group assess
whether, throughout the period of use, it has both of the
following:
The right to obtain substantially all of the economic
benefits from use of the identified asset; and
The right to direct the use of the identified asset.
The Group recognises a right-of-use asset and a
corresponding lease liability with respect to all identified
lease contracts in which it is a lessee.
(i)
Lease liabilities
At the commencement date of the lease, the Group
recognises a lease liability measured at present value of
lease payments to be made over the lease term.
Lease payments include:
Fixed payments (including reasonably certain
extension options), less any lease incentives
receivable;
Variable lease payments that are based on an index or
a rate, initially measured using the index or rate as at
the commencement date;
The exercise price of a purchase option if the Group is
reasonably certain to exercise that option; and
Payments of penalties for terminating the lease, if the
lease term reflects the Group exercising that option.
The variable lease payments that do not depend on an
index or a rate are recognised as expenses in the period on
which the event or condition that triggers the payment
occurs.
Cash payments for the principal and interest portion of
lease liabilities are classified as financing activities within
the statement of cashflows. Cash payments for variable
lease payments not measured in lease liability are
presented within the operating activities.
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In calculating the present value of lease payments, the
Group uses the incremental borrowing rate at the lease
commencement date if the interest rate implicit in the
lease is not readily determinable. Subsequent to initial
measurement, lease liabilities increase to reflect the
accretion of interest on the balance outstanding and are
reduced for lease payments made. The finance cost for
interest on the lease is charged to profit or loss over the
lease period.
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i
D
The lease liability is remeasured to reflect any
reassessment or modification of lease term or changes in
the in-substance fixed payments. When the lease liability is
remeasured, a corresponding adjustment is reflected in
the right-of-use asset, or profit and loss if the right-of-use
asset is already reduced to zero.
s
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a
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S
The Group has not elected to apply the short-term lease
and the low-value assets lease practical expedients. These
leases are included in the measurement of lease liability.
(ii)
Right-of-use assets
The Group recognises right-of-use assets at the
commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets
are measured at cost, less any accumulated depreciation
and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use
assets includes the amount of lease liabilities recognised,
initial direct costs incurred, and lease payments made at or
before the commencement date less any lease incentives
received or make good costs to be incurred at the end of
the lease. Unless the Group is reasonably certain to obtain
ownership of the leased asset at the end of the lease term,
the recognised right-of- use assets are depreciated on a
straight-line basis over the shorter of its estimated useful
life and the lease term. Right-of-use assets are subject to
impairment and, where required, impairment testing is
performed in conjunction with property, plant and
equipment (refer to Note 16(b)).
(iii)
Significant judgement in determining the lease
term of contracts
The Group determines the lease term as the non-
cancellable period of the lease, together with any periods
covered by options to extend the lease if the Group is
reasonably certain to exercise those options. The Group
has the option, under some of its leases to extend the
lease for additional terms of 5-15 years. Management uses
its judgement and experience to determine whether or
not an option would be reasonably certain to be exercised
on a lease by lease basis. In doing so, it considers all
relevant factors that create an economic incentive for it to
exercise the renewal. After the commencement date, the
Group reassess the lease term if there is a significant event
or change in circumstances that is within its control and
affects its ability to exercise (or not exercise) the renewal
option.
Ardent Leisure Group Limited | Annual Report 2021
59
Notes to the Financial Statements
for the year ended 29 June 2021
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23.
Leases (continued)
(c)
Accounting policy (continued)
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(iii) Significant judgement in determining the lease
term of contracts (continued)
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The Main Event business has projected a 20-year operating
cycle for each entertainment centre, with further
consideration of specific facts and performance of
individual centres in determining the respective lease
terms of each of its property leases. Leases for equipment
and vehicles do not generally contain renewal option
periods.
Financial risk management
24. Derivative financial instruments
Non-current assets
Interest rate caps
Current liabilities
Forward foreign exchange contracts
Interest rate swaps
Non-current liabilities
RedBird call option (refer Note 22(c))
2021
$’000
2020
$’000
29
29
-
-
-
29
29
24
585
609
2,434
2,434
1,931
1,931
(a)
Forward foreign exchange contracts
In the prior year, the Group entered into forward foreign
exchange contracts to buy Euro and sell Australian dollars.
These contracts totalled $3.0 million at 30 June 2020.
The Group elected not to apply hedge accounting for its
forward foreign exchange contracts. Accordingly changes
in fair value of these contracts were recorded in the
Income Statement. Notwithstanding the accounting
outcome, the Group considered that these derivative
contracts were appropriate and effective in offsetting the
economic foreign exchange exposures of the Group.
(b)
Interest rate swaps and interest rate caps
During the year, the Group had interest rate swap
agreements totalling US$70.0 million (2020: US$70.0
million) that entitled it to receive interest, at
monthly/quarterly intervals, at a floating rate on a notional
principal and obliged it to pay interest at a fixed rate. The
interest rate swap agreements allowed the Group to
effectively swap a floating rate of interest on the notional
principal amount into a fixed rate. These swaps expired on
3 December 2020.
The Group also has an interest rate cap agreement in place
effective from 3 December 2020 under which it can limit
its interest expense on an initial notional principal amount
of US$70.0 million. This notional principal amount reduced
to US$55.0 million in April 2021 and will further reduce to
US$40.0 million in April 2022 and US$20.0 million in April
2023, with the agreement terminating in April 2024.
60
Ardent Leisure Group Limited | Annual Report 2021
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The Group has elected not to apply hedge accounting for
its interest rate swap and cap agreements. Accordingly,
changes in fair value of these swaps and caps are recorded
in the Income Statement. Notwithstanding the accounting
outcome, the Company considers that these derivative
contracts are appropriate and effective in offsetting
adverse economic interest rate exposures of the Group.
The table below shows the notional value and maturity
profile of the interest rate swaps and caps:
Less than 1 year
1 - 2 years
2 - 3 years
3 - 4 years
2021
$’000
2020
$’000
19,833
26,445
26,445
-
123,852
21,856
29,142
29,142
72,723 203,992
(c)
Accounting policy
Derivatives are initially recognised at fair value on the date
a derivative contract is entered into and are subsequently
remeasured to their fair value at each reporting date. The
method of recognising the resulting gain or loss depends
on whether the derivative is designated as a hedging
instrument if hedging criteria are met, and if so, the nature
of the item being hedged. The Group may designate
certain derivatives as either hedges of exposures to
variability in cash flows associated with future interest
payments on variable rate debt (cash flow hedges) or
hedges of net investments in foreign operations (net
investment hedges).
The Group documents at the inception of the hedging
transaction the relationship between the hedging
instruments and hedged items, as well as its risk
management objective and strategy for undertaking
various hedge transactions. The Group also documents its
assessment, both at hedge inception and on an ongoing
basis, of whether the derivatives that are used in hedging
transactions have been and will continue to be highly
effective in offsetting changes in fair values or cash flows of
hedged items.
The full fair value of a hedging derivative is classified as a
non-current asset or liability when the remaining maturity
is more than 12 months. They are classified as current
assets or liabilities when the remaining maturity of the
hedged item is less than 12 months. Trading derivatives
are classified as current assets or liabilities.
Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge
accounting. Changes in the fair value of any derivative
instrument that does not qualify for hedge accounting are
recognised immediately in the Income Statement.
Notes to the Financial Statements
for the year ended 29 June 2021
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24.
Derivative financial instruments (continued)
(b)
Financial risk management
(c)
Accounting policy (continued)
Cash flow hedges
The effective portion of changes in the fair value of
derivatives that are designated and qualify as cash flow
hedges is recognised in other comprehensive income and
accumulated in reserves in equity. The gain or loss relating
to the ineffective portion is recognised immediately in the
Income Statement. Amounts accumulated in equity are
recycled in the Income Statement in the period when the
hedged item impacts the Income Statement.
When a hedging instrument expires or is sold or
terminated, or when a hedge no longer meets the criteria
for hedge accounting, any cumulative gain or loss existing
in equity at that time remains in equity and is recognised
when the forecast transaction is ultimately recognised in
the Income Statement. When a forecast transaction is no
longer expected to occur, the cumulative gain or loss that
was reported in equity is immediately transferred to the
Income Statement.
25.
Capital and financial risk management
(a)
Capital risk management
The Group’s objectives when managing capital is to
optimise shareholder value through the mix of available
capital sources while complying with statutory
requirements, maintaining gearing, interest cover and debt
serviceability ratios within approved limits and continuing
to operate as a going concern.
The Group assesses its capital management approach as a
key part of the Group’s overall strategy and it is
continuously reviewed by management and the Board.
The Group is able to alter its capital mix by issuing new
shares, activating the DRP, electing to have the DRP
underwritten, adjusting the amount of dividends paid,
activating a share buy-back program or selling assets to
reduce borrowings.
The Group has a target gearing ratio of 30% to 35% of net
debt to net debt plus equity.
Protection of the Group’s equity in foreign denominated
assets was achieved through borrowing in the local
functional currency to provide a natural hedge
supplemented by the use of foreign exchange forward
contracts to provide additional hedge protection. The
Group has a target equity hedge of 50% to 100% of the
asset value by foreign currency.
The Group also protects its equity in assets by taking out
insurance with creditworthy insurers.
The Group’s principal financial instruments comprise cash,
receivables, payables, interest bearing liabilities and
derivative financial instruments.
The Group’s activities expose it to a variety of financial
risks: market risk (including foreign exchange risk and
interest rate risk), liquidity risk and credit risk. The Group
manages its exposure to these financial risks in accordance
with the Group’s Financial Risk Management (FRM) policy
as approved by the Board.
The FRM policy sets out the Group’s approach to
managing financial risks, the policies and controls utilised
to minimise the potential impact of these risks on its
performance and the roles and responsibilities of those
involved in the management of these financial risks.
The Group uses various measures to manage exposures to
these types of risks. The main methods include foreign
exchange and interest rate sensitivity analysis, ageing
analysis and counterparty credit assessment and the use
of cash flow forecasts.
The Group uses derivative financial instruments such as
forward foreign exchange contracts, interest rate swaps
and interest rate caps to manage its financial risk as
permitted under the FRM policy. Such instruments are
used exclusively for hedging purposes i.e. not for trading
or speculative purposes.
(c)
(i)
Market risk
Foreign exchange risk
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Foreign exchange risk is the risk that changes in foreign
exchange rates will change the Australian dollar value of
the Group’s net assets or its Australian dollar earnings.
Foreign exchange risk arises when future commercial
transactions and recognised assets and liabilities are
denominated in a currency that is not the functional
currency of a Group entity.
The Group is exposed to foreign exchange risk through
investing in overseas businesses and deriving operating
income from those businesses. The Group manages this
exposure on a consolidated basis.
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Ardent Leisure Group Limited | Annual Report 2021
61
Notes to the Financial Statements
for the year ended 29 June 2021
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25. Capital and financial risk management (continued)
(c) Market risk (continued)
(i)
Foreign exchange risk (continued)
Foreign investment
The Group aims to minimise the impact of fluctuations in foreign currency exchange rates on its net investments overseas by
funding such investments by borrowing in the local overseas currency or by taking out forward foreign exchange contracts.
The Group’s policy is to hedge 50% to 100% of overseas investments in this way.
The table below sets out the Group’s overseas investments, by currency, and how, through the use of forward foreign
exchange contracts, this exposure is reduced. All figures in the table below are shown in Australian dollars with foreign
currency balances translated at the year-end spot rate:
Assets
Cash and cash equivalents
Receivables, inventories and other current assets
Derivative financial instruments
Construction in progress inventories
Investment held at fair value
Property, plant and equipment
Intangible assets
Right-of-use assets
Other non-current assets
Total assets
Liabilities
Current payables and other current liabilities
Construction in progress deposits
Derivative financial instruments
Interest bearing liabilities
Non-current payables and other non-current liabilities
Total liabilities
Net assets
Notional value of derivatives
Net exposure to foreign exchange movements
Australian dollars
US dollars
2021
$’000
2020
$’000
Restated
(Note 16(a))
2021
$’000
2020
$’000
18,067
4,146
29
-
1,358
111,800
6,151
145
4,814
146,510
27,481
-
-
13,316
9,540
50,337
32,601
5,707
-
-
3,201
99,471
5,629
182
4,389
151,180
14,474
-
24
243
11,383
26,124
96,895
8,123
-
3,368
-
296,711
68,402
286,567
29
760,095
70,576
-
2,434
611,385
2,189
686,584
129,016
10,065
29
11,877
-
354,270
74,469
326,876
-
906,602
54,132
11,413
2,516
690,913
2,800
761,774
96,173
125,056
73,511
144,828
-
-
-
-
-
-
73,511
144,828
62
Ardent Leisure Group Limited | Annual Report 2021
Notes to the Financial Statements
for the year ended 29 June 2021
25.
Capital and financial risk management (continued)
(c)
(ii)
Market risk (continued)
Foreign exchange rate sensitivity
The table below demonstrates the sensitivity of the above net exposures to reasonably possible changes in foreign exchange
rates, with all other variables held constant. A negative amount in the table reflects a potential net reduction in the profit, or
equity, while a positive amount reflects a potential net increase.
AUD:USD - increase 10%
AUD:USD - decrease 10%
Foreign income
Profit movement
2021
$’000
-
-
2020
$’000
-
-
Total equity
movement
2021
$’000
2020
$’000
(6,683)
8,168
(13,184)
16,114
Through investing in overseas assets, the Group earns foreign denominated income. Net operating income derived is
naturally offset by local currency denominated expenses including interest and tax.
From time to time, the Group uses forward foreign exchange contracts to convert this net foreign denominated currency
exposure back to Australian dollars at pre-determined rates out into the future. At reporting date, the Group has no hedging
in place over its foreign income.
(iii)
Interest rate risk
Interest rate risk is the risk that changes in market interest rates will impact the earnings of the Group.
The Group is exposed to interest rate risk predominantly through borrowings. The Group manages this exposure on a
consolidated basis. The Group applies benchmark hedging bands across its differing interest rate exposures and utilises
interest rate swaps and caps, to manage its exposure between these bands. Compliance with the policy is reviewed regularly
by management and is reported to the Board at each meeting.
The Group has exposures to interest rate risk on its net monetary liabilities, mitigated by the use of interest rate swaps and
caps, as shown in the table below:
Floating rates
Cash and cash equivalents
Interest bearing liabilities
Interest rate swaps and interest rate caps
Net interest rate exposure
Australian interest
2021
$’000
2020
$’000
US interest
2021
$’000
2020
$’000
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N
18,067
(13,753)
4,314
-
32,601
-
32,601
96,895
(182,887)
(85,992)
-
72,722
4,314
32,601
(13,270)
129,016
(240,023)
(111,007)
101,996
(9,011)
Refer to Note 24 for further details on the interest rate swaps and interest rate caps.
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Ardent Leisure Group Limited | Annual Report 2021
63
Notes to the Financial Statements
for the year ended 29 June 2021
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25. Capital and financial risk management (continued)
(c) Market risk (continued)
(iv)
Interest rate sensitivity
The table below demonstrates the sensitivity to reasonably possible changes in interest rates, with all other variables held
constant. A negative amount in the table reflects a potential net reduction in the profit or equity, while a positive amount
reflects a potential net increase.
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1% increase in AUD rate
1% decrease in AUD rate
1% increase in USD rate
1% decrease in USD rate
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Profit movement
Total equity
movement
2021
$’000
43
(43)
(133)
133
2020
$’000
329
(329)
(90)
90
2021
$’000
43
(43)
(133)
133
2020
$’000
329
(329)
(90)
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At reporting date, the Group has fixed 36.98% (2020: 42.49%) of its floating interest exposure.
(d)
Liquidity risk
Liquidity risk arises if the Group has insufficient liquid assets to meet its short-term obligations. Liquidity risk is managed by
maintaining sufficient cash balances and adequate committed credit facilities. Prudent liquidity management implies
maintaining sufficient cash and marketable shares, the availability of funding through an adequate amount of committed
credit facilities and the ability to close out market positions. The instruments entered into by the Group were selected to
ensure sufficient funds would be available to meet the ongoing cash requirements of the Group.
The following tables provide the contractual maturity of the Group’s fixed and floating rate financial liabilities and derivatives
as at 29 June 2021. The amounts presented represent the future contractual undiscounted principal and interest cash flows
and therefore do not equate to the values shown in the Balance Sheet. Repayments which are subject to notice are treated as
if notice were given immediately.
2021
Payables
Lease liabilities
Term debt
Preferred shares of subsidiaries
Queensland Government loan
Current and non-current tax
liabilities
Total undiscounted financial
liabilities
2020
Payables
Lease liabilities
Term debt
Preferred shares of subsidiaries
Current and non-current tax
liabilities
Interest rate swaps and caps
Forward foreign exchange
contracts
Total undiscounted financial
liabilities
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Book
value
$’000
88,652
363,984
182,887
76,890
13,753
Less than
1 year
$’000
88,652
54,863
15,544
-
562
1 to 2
years
$’000
-
49,232
15,592
-
754
3 to 4
2 to 3
years
years
$’000
$’000
-
-
49,483
49,960
15,451 187,744
-
-
-
14,005
4 to 5
years
$’000
-
Over 5
years
$’000
-
49,872 408,553
-
-
- 209,433
-
-
Total
$’000
88,652
661,963
234,331
209,433
15,321
11,619
2,500
2,500
2,500
2,500
3,652
-
13,652
737,785 162,121
68,078
81,439 240,204
53,524 617,986 1,223,352
Book value
$’000
63,699
396,941
240,023
70,322
Less than
1 year
$’000
63,699
61,855
20,066
-
1 to 2
years
$’000
-
51,041
20,166
-
2 to 3
years
$’000
-
51,281
20,016
-
4 to 5
years
$’000
-
3 to 4
years
$’000
-
51,370
55,670 207,377
Over 5
years
$’000
-
51,085 432,939
-
- 230,795
-
Total
$’000
63,699
699,571
323,295
230,795
11,694
585
1,065
870
2,500
-
2,500
-
2,500
-
2,500
-
3,219
-
14,284
870
24
3,022
-
-
-
-
-
3,022
783,288 150,577
73,707
73,797 109,540 260,962 666,953 1,335,536
64
Ardent Leisure Group Limited | Annual Report 2021
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Notes to the Financial Statements
for the year ended 29 June 2021
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25.
Capital and financial risk management (continued)
(e)
Credit risk
Credit risk is the risk that a contracting entity will not complete its obligations under a financial instrument and will cause the
Group to make a financial loss. The Group has exposure to credit risk on all of its financial assets included in the Group’s Balance
Sheet.
The Group manages credit risk on receivables by performing credit reviews of prospective debtors, obtaining collateral where
appropriate and performing detailed reviews on any debtor arrears. The Group has policies to review the aggregate exposures
of receivables across its portfolio. The Group has no significant concentrations of credit risk on its trade receivables. The Group
holds collateral in the form of security deposits or bank guarantees, over some receivables.
For derivative financial instruments, there is only a credit risk where the contracting entity is liable to pay the Group in the event
of a close out. Similarly, for cash and cash equivalents, there is a credit risk where the contracting entity holds the Group's cash
balances and investments. The Group has policies that limit the amount of credit exposure to any financial institution. Derivative
counterparties and cash investment transactions are limited to investment grade counterparties in accordance with the Group’s
FRM policy. As such, the Group’s exposure to credit losses on derivative financial instruments and cash and cash equivalents is
considered insignificant. The Group monitors the public credit rating of its counterparties.
Credit risk adjustments relating to receivables have been applied in line with the policy set out in Note 11. No fair value
adjustment has been made to derivative financial assets or cash investments, with the impact of credit risk being assessed as
minimal. The Group’s maximum exposure to credit risk is noted in the table below.
Details of the concentration of credit exposure of the Group’s assets are as follows:
Cash and cash equivalents
Receivables - Australia
Receivables - US
Derivative financial instruments
2021
$’000
114,962
692
780
29
116,463
2020
$’000
161,617
2,679
2,081
29
166,406
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All cash, derivative financial instruments and interest-bearing receivables are neither past due nor impaired.
The table below shows the ageing analysis of those receivables which are past due or impaired:
Past due but not impaired
Impaired
Total
Less than 30
days
$’000
31 to 60
days
$’000
61 to 90
days
$’000
More than 90
days
$’000
$’000
$’000
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2021
Receivables - Australia
Receivables - US
2020
Receivables - Australia
Receivables - US
640
629
1,269
2,012
1,995
4,007
39
118
157
30
-
30
(1)
31
30
3
-
3
14
2
16
38
85
123
20
-
20
47
-
47
712
780
1,492
2,130
2,080
4,210
Based on a review of receivables by management, a provision of $19,500 (2020: $47,157) has been made against receivables
with a gross balance of $19,500 (2020: $47,157).
The Group holds collateral against the impaired receivables in the form of bank guarantees and security deposits; however,
these are not material.
There are no significant financial assets that have had renegotiated terms that would otherwise have been past due or
impaired.
Ardent Leisure Group Limited | Annual Report 2021
65
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Notes to the Financial Statements
for the year ended 29 June 2021
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26. Fair value measurement
(a) Fair value hierarchy
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The Group measures and recognises the following assets and liabilities at fair value on a recurring basis:
Derivative financial instruments; and
Investment held at fair value.
AASB 13 Fair Value Measurement requires disclosure of fair value measurements by level of the following fair value
measurement hierarchy:
(a)
(b)
(c)
Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or
indirectly (level 2); and
Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).
The following table provides the fair value measurement hierarchy of the Group’s assets and liabilities:
2021
Assets measured at fair value:
Investment held at fair value
Derivative financial instruments
Liabilities measured at fair value:
RedBird share purchase option
Liabilities for which fair values are disclosed:
Interest bearing liabilities
RedBird preferred shares
ALUSH Series B preferred stock
2020
Assets measured at fair value:
Investment held at fair value
Derivative financial instruments
Liabilities measured at fair value:
Derivative financial instruments
RedBird share purchase option
Liabilities for which fair values are disclosed:
Interest bearing liabilities
RedBird preferred shares
Note
Level 1
$’000
Level 2
$’000
Level 3
$’000
1,358
-
Total
$’000
1,358
29
-
29
24
24
26(c)
26(c)
26(c)
Note
24
24
24
26(c)
26(c)
-
-
-
-
-
-
Level 1
$’000
-
-
-
-
-
-
-
2,434
2,434
182,887
-
-
Level 2
$’000
-
75,692
1,198
Level 3
$’000
Restated
(Note 16(a))
-
29
609
-
3,201
-
-
1,931
182,887
75,692
1,198
Total
$’000
3,201
29
609
1,931
240,023
-
-
70,322
240,023
70,322
There has been no transfer between level 1, level 2 and level 3 during the year.
The Group’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the year.
The Group did not measure any financial assets or financial liabilities at fair value on a non-recurring basis as at 29 June 2021.
66
Ardent Leisure Group Limited | Annual Report 2021
Notes to the Financial Statements
for the year ended 29 June 2021
26.
Fair value measurement (continued)
(b)
Valuation techniques used to derive level 2 and
level 3 fair values
The fair value of financial instruments that are not traded
in an active market (e.g. over–the–counter derivatives) is
determined using valuation techniques. These valuation
techniques maximise the use of observable market data
where it is available and rely as little as possible on entity
specific estimates. If all significant inputs required to fair
value an instrument are observable, the instrument is
included in level 2. If one or more of the significant inputs
is not based on observable market data, the instrument is
included in level 3.
Specific valuation techniques used to value financial
instruments include:
The use of quoted market prices or dealer quotes for
similar instruments;
The fair value of interest rate swaps and caps is
calculated as the present value of the estimated
future cash flows based on observable yield curves;
and
The fair value of forward foreign exchange contracts
is determined using forward exchange rates at the
balance date.
All of the resulting fair value estimates are included in level
2 except for unlisted equity shares, where the fair values
have been determined based on present values and the
discount rates used were adjusted for counterparty or own
credit risk.
(i)
Fair value measurements using significant
unobservable inputs
Redbird share purchase option
An equity option gives the holder the right to buy or sell
the equity at a predefined strike rate at specified date(s) as
stipulated in the option agreement. The present value of
an option equals the sum of its intrinsic value and time
value. The intrinsic value of the option is its current
exercise value as determined by its strike price and current
spot price. The time value represents the likelihood of the
intrinsic value increasing and is sensitive to the volatility of
the price of the underlying asset, risk free interest rates,
and time to expiry of the option.
Management have applied a stochastic approach using a
Monte-Carlo simulation model to value the RedBird share
purchase option.
Redbird preferred shares
The initial carrying value of the liability component is
determined by discounting the contractual stream of
future cash flows (coupon of 10% and principal of US$80
million) to the present value, at the rate of interest at
inception (18.62%) applicable to instruments of
comparable credit status and within similar industries,
with similar terms.
The equity component is measured as the residual after
taking account of the option and fair value of debt.
ALUSH Series B preferred stock
The initial carrying value of the liability component is
determined by discounting the contractual stream of
future cash flows (coupon of 10% and principal of US$1.1
million) to the present value, at the rate of interest at
inception (14.35%) applicable to instruments of
comparable credit status and within similar industries,
with similar terms.
The equity component is measured as the residual after
taking account of the fair value of debt.
Changes in fair value
For changes in level 3 items for the periods ended 29
June 2021 and 30 June 2020, refer to Note 30.
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Ardent Leisure Group Limited | Annual Report 2021
67
Notes to the Financial Statements
for the year ended 29 June 2021
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26.
Fair value measurement (continued)
(c)
Fair values of other financial instruments
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The Group also has a number of financial instruments which are not measured at fair value in the Balance Sheet. For the
majority of these instruments, the fair values are not materially different to their carrying amounts, since the interest
receivable/payable is either close to the current market rates or the instruments are short term in nature. Differences were
identified for the following instruments at 29 June 2021:
US term debt and revolving credit facility
Queensland Government loan
RedBird preferred shares
ALUSH Series B preferred stock
Carrying
amount
2021
$’000
182,887
13,753
75,692
1,198
Fair value
2021
$’000
183,203
13,753
75,638
1,201
Discount
rate
2021
%
7.50
4.96
18.62
14.35
Carrying
amount
2020
$’000
240,023
-
70,322
-
Fair value
2020
$’000
240,297
-
70,302
-
Discount
rate
2020
%
7.56
-
18.62
-
In determining the fair values above, the principal amounts payable have been discounted at rates which reflect the price that
market participants would use when transferring the financial instruments, assuming that market participants act in their
economic best interest. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable
inputs, including the Group’s own credit risk.
(d)
Accounting policy
Fair value estimation
The Group measures financial instruments, such as
derivatives and investments held at fair value and non-
financial assets such as land, buildings and major rides
and attractions investment properties at fair value at each
balance date.
Fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.
The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability
takes place either:
In the principal market for the asset or liability; or
In the absence of a principal market, in the most
advantageous market for the asset or liability.
The principal or the most advantageous market must be
accessible by the Group.
The fair value of an asset or liability is measured using the
assumptions that market participants would use when
pricing the asset or liability, assuming that market
participants act in their economic best interest.
A fair value measurement of a non-financial asset takes
into account a market participant’s ability to generate
economic benefits by using the asset in its highest and
best use or by selling it to another market participant that
would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate
in the circumstances and for which sufficient data is
available to measure fair value, maximising the use of
relevant observable inputs and minimising the use of
unobservable inputs.
68
Ardent Leisure Group Limited | Annual Report 2021
The fair value of financial instruments traded in active
markets is based on quoted market prices at the reporting
date. The quoted market price used for financial assets
held by the Group is the current bid price; the appropriate
quoted market price for financial liabilities is the current
ask price.
The fair value of financial instruments that are not traded
in an active market is determined using valuation
techniques. The Group uses a variety of methods and
makes assumptions that are based on market conditions
existing at each reporting date. Quoted market prices or
dealer quotes for similar instruments are used for long
term debt instruments held. Other techniques, such as
estimated discounted cash flows, are used to determine
fair value for the remaining financial instruments. The fair
value of interest rate swaps and caps is calculated as the
present value of the estimated future cash flows. The fair
value of forward exchange contracts is determined using
forward exchange market rates at the reporting date.
The nominal value less estimated credit adjustments of
trade receivables and payables approximate their fair
values. The fair value of financial liabilities for disclosure
purposes is estimated by discounting the future
contractual cash flows at the current market interest rate
that is available to the Group for similar financial
instruments.
Notes to the Financial Statements
for the year ended 29 June 2021
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Unrecognised items
27. Contingent liabilities
30.
Investment held at fair value
A small number of civil claims relating to the 2016
Dreamworld tragedy made by families and other affected
persons have yet to be finalised. They are in the process of
being dealt with by the Company’s liability insurer. The
statutory time period for bringing civil claims has now
passed.
On 18 June 2020, the Company was served with a
representative shareholder class action arising from the
2016 Dreamworld tragedy. The claim alleges
contraventions of the Corporations Act 2001 (Cth). The
plaintiff has not provided any expert valuation opinion to
quantify its claim, therefore the Company cannot provide
any meaningful or indicative estimate of the quantum of
any potential liability (if any). The Company has previously
indicated (and maintains) that it believes the proceedings
to be without merit and it will vigorously defend them.
The Company maintains appropriate insurances to respond
to litigation and the majority of associated costs.
Unless otherwise disclosed in the financial statements,
Ardent Leisure Group Limited has no other material
contingent liabilities.
28. Capital commitments
(a)
Capital commitments
Capital expenditure contracted for at the reporting date
but not recognised as liabilities is as follows:
Property, plant and equipment
Payable:
Within one year
2021
$’000
2020
$’000
4,046
4,046
6,335
6,335
29.
Events occurring after reporting date
Since the end of the financial year, the Directors of the
Company are not aware of any matters or circumstances
not otherwise dealt with in the financial report or the
Directors’ report that have significantly affected or may
significantly affect the operations of the Group, the results
of those operations or the state of affairs of the Group in
financial years subsequent to the year ended 29 June 2021.
Other
Investment in Online Media
Holdings Limited
Opening balance
Valuation loss
Reversal of impairment
Closing balance
(a)
Accounting policy
2021
$’000
2020
$’000
1,358
1,358
3,201
3,201
2021
$’000
3,201
(1,843)
-
1,358
2020
$’000
2,811
-
390
3,201
The investment held at fair value comprises an investment
in unlisted equity shares. Upon initial recognition, the
Group can elect to classify irrevocably its equity
investments as equity instruments designated at fair value
through other comprehensive income (OCI) when they
meet the definition of equity under AASB 132 Financial
Instruments Presentation and are not held for trading. The
classification is determined on an instrument by
instrument basis.
After initial measurement, financial assets at fair value
through OCI are subsequently measured at fair value with
unrealised gains or losses recognised in OCI.
Gains and losses on these financial assets are never
recycled to profit or loss. Dividends are recognised as
other income in the Income Statement when the right of
payment has been established except when the Group
benefits from such proceeds as a recovery of part of the
cost of the financial asset, in which case, such gains are
recorded in OCI. Equity instruments designated at fair
value through OCI are not subject to impairment
assessment.
The Group elected to classify irrevocably its non-listed
equity investments under this category.
31. Provisions
(a)
Distributions to shareholders
No dividend was paid or declared for the half year ended
29 December 2020 (31 December 2019: Nil) or has been
paid or declared for the year ended 29 June 2021 (30 June
2020: Nil).
Provision is made for the amount of any dividend
declared, being appropriately authorised and no longer at
the discretion of the entity, on or before the end of the
financial year but not distributed at the reporting date.
Ardent Leisure Group Limited | Annual Report 2021
69
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Notes to the Financial Statements
for the year ended 29 June 2021
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31. Provisions (continued)
(b) Other provisions
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At 1 July 2020
Additions
Provisions utilised in the year
Foreign exchange movements
Unused amounts reversed
Unwinding of discount and changes in discount rate
At 29 June 2021
Current
Non-current
Total provisions
Employee
benefits
$’000
2,437
4,929
(2,309)
(31)
(435)
7
4,598
3,960
638
4,598
Property
make good
$’000
2,347
60
-
(218)
-
-
2,189
-
2,189
2,189
Sundry(1)
$’000
378
103
(139)
-
-
-
342
342
-
342
Total
$’000
5,162
5,092
(2,448)
(249)
(435)
7
7,129
4,302
2,827
7,129
(1) Sundry provisions include insurance excess/deductible amounts for public liability insurance, fringe benefits tax provisions and other royalty provisions.
The current provision for employee benefits includes
accrued long service leave which covers all unconditional
entitlements where employees have completed the
required period of service and also those where
employees are entitled to pro-rata payments in certain
circumstances. This is presented as current, since the
Group does not have an unconditional right to defer
settlement for any of these obligations.
(c)
Accounting policy
Provisions are recognised when the Group has a present
legal or constructive obligation as a result of past events, it
is probable that an outflow of resources will be required to
settle the obligation, and the amount can be reliably
estimated.
Where there are a number of similar obligations, the
likelihood that an outflow will be required in settlement is
determined by considering the class of obligations as a
whole. A provision is recognised even if the likelihood of
an outflow with respect to any one item included in the
same class of obligations may be small.
Provisions are measured at the present value of
management’s best estimate of the expenditure required
to settle the present obligation at the reporting date. The
discount rate used to determine the present value reflects
current market assessments of the time value of money
and the risks specific to the liability. The increase in the
provision due to the passage of time is recognised as
interest expense.
Long service leave
The liability for long service leave is recognised in the
provision for employee benefits and 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. Where amounts are not expected to be settled
within 12 months, expected future payments are
discounted to their net present value using market yields at
the reporting date on high quality corporate bonds.
The obligations are presented as current liabilities in the
Balance Sheet if the Group does not have an unconditional
right to defer settlement for at least 12 months after the
reporting date, regardless of when the actual settlement is
expected to occur.
Profit sharing and bonus plans
The Group recognises a provision where contractually
obliged or where there is a past practice that has created a
constructive obligation.
Termination benefits
Termination benefits are payable when employment is
terminated before the normal retirement date, or when an
employee accepts voluntary redundancy in exchange for
these benefits. The Group recognises termination benefits
when it is demonstrably committed to either terminating
the employment of current employees according to a
detailed formal plan without possibility of withdrawal or to
providing termination benefits as a result of an offer made
to encourage voluntary redundancy. Benefits falling due
more than 12 months after the end of the reporting period
are discounted to present value.
70
Ardent Leisure Group Limited | Annual Report 2021
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Notes to the Financial Statements
for the year ended 29 June 2021
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32. Net tangible assets
Net tangible assets are calculated as follows:
Total assets
Less: intangible assets
Less: right-of-use assets
Less: total liabilities
Add: lease liabilities
Net tangible assets
Total number of shares on issue
Net tangible asset backing per share
33. Deed of Cross Guarantee
Note
22, 23(a)
18
2021
$’000
2020
$’000
Restated
(Note 16(a))
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p
e
R
906,605
(74,553)
(286,712)
(736,921)
363,984
172,403
479,706,016
$0.36
1,057,782
(80,098)
(327,058)
(787,898)
396,941
259,669
479,706,016
$0.54
In 2019, Ardent Leisure Group Limited, Ardent Leisure Limited, Ardent Leisure Management Limited, Ardent Leisure
Entertainment Pty Ltd and Main Event Entertainment Pty Ltd entered into a Deed of Cross Guarantee under which each
company guaranteed the debts of the others.
By entering into the deeds, Ardent Leisure Limited has been relieved from the requirement to prepare a financial report and
Directors’ report under ASIC Corporations (Wholly-owned Companies) Instrument 2016/785.
(a)
Consolidated Income Statement
Ardent Leisure Group Limited, Ardent Leisure Limited, Ardent Leisure Management Limited, Ardent Leisure Entertainment Pty
Ltd and Main Event Entertainment Pty Ltd represent a ‘Closed Group’ for the purposes of the Class Order. Set out below is a
consolidated Income Statement for the year ended 29 June 2021 of the Closed Group:
Income
Revenue from operating activities
Valuation gain – investment held at fair value
Reversal of impairment of investment in subsidiary
Net gain from derivative financial instruments
Interest income
Other income
Total income
Expenses
Purchases of finished goods
Salary and employee benefits
Finance costs
Property expenses
Depreciation and amortisation
Loss on disposal of assets
Advertising and promotions
Repairs and maintenance
Impairment of investment in subsidiary
Impairment of property, plant and equipment
Dreamworld incident costs
Other expenses
Total expenses
Profit/(loss) before tax expense
Income tax expense/(benefit)
Profit/(loss) for the year
Attributable to:
Ordinary shareholders
2021
$’000
36,012
-
135,158
24
28
19,916
191,138
6,952
37,959
1,711
701
4,528
75
5,444
5,037
-
-
5,103
12,098
79,608
2020
$’000
Restated
(Note 16(a))
59,360
390
-
243
461
7,055
67,509
8,802
44,071
677
111
4,841
3,471
5,282
4,703
176,846
1,311
2,097
12,489
264,701
111,530
1,177
110,353
(197,192)
14,285)
(211,477)
110,353
(211,477)
Ardent Leisure Group Limited | Annual Report 2021
71
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Notes to the Financial Statements
for the year ended 29 June 2021
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33. Deed of Cross Guarantee (continued)
(b)
Consolidated Statement of Comprehensive Income
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Set out below is a consolidated Statement of Comprehensive Income for the year ended 29 June 2021 of the Closed Group:
Profit/(loss) for the year
Other comprehensive loss for the year
Items that will not be reclassified to profit and loss:
Loss on revaluation of investment held at fair value
Other comprehensive loss for the year, net of tax
Total comprehensive income/(loss) for the year, net of tax
Attributable to:
Ordinary shareholders
Total comprehensive income/(loss) for the year, net of tax
2021
$’000
2020
$’000
Restated
(Note 16(a))
110,353
(211,477)
(1,290)
-
(1,290)
109,063
-
(211,477)
109,063
109,063
(211,477)
(211,477)
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72
Ardent Leisure Group Limited | Annual Report 2021
Notes to the Financial Statements
for the year ended 29 June 2021
33.
Deed of Cross Guarantee (continued)
(c)
Consolidated Balance Sheet
Set out below is a consolidated Balance Sheet as at 29 June 2021 of the Closed Group:
Current assets
Cash and cash equivalents
Receivables
Inventories
Other
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Investment held at fair value
Investment in subsidiaries
Livestock
Intangible assets
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Payables
Derivative financial instruments
Interest bearing liabilities
Current tax liabilities
Provisions
Other
Total current liabilities
Non-current liabilities
Intercompany payables
Interest bearing liabilities
Provisions
Non-current tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Accumulated losses
Total equity
2021
$’000
2020
$’000
Restated
(Note 16(a))
13,797
691
1,918
1,536
17,942
60,292
145
1,358
405,395
187
3,030
4,423
474,830
492,772
22,834
-
81
2,500
1,516
4
26,935
154,814
13,169
637
8,902
177,522
204,457
288,315
777,124
(128,558)
(360,251)
288,315
26,245
2,083
2,835
790
31,953
44,301
182
3,201
270,222
204
2,508
3,995
324,613
356,566
10,882
24
233
-
1,563
4
12,706
152,907
-
754
10,629
164,290
176,996
179,570
777,124
(126,950)
(470,604)
179,570
Ardent Leisure Group Limited | Annual Report 2021
73
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Notes to the Financial Statements
for the year ended 29 June 2021
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33. Deed of Cross Guarantee (continued)
(d)
Consolidated Statement of Changes in Equity
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Set out below is a consolidated statement of Changes in Equity for the year ended 29 June 2021 of the Closed Group:
Note
Contributed
equity Other equity
Reserves
Accumulated
losses
$’000
$’000
$’000
$’000
Total
equity
$’000
Total equity at 25 June 2019, as originally presented
Impact of change in accounting standard, AASB 16
Impact of change in accounting policy
16(a)
Total restated equity at 26 June 2019
Loss for the year (restated)
Total restated comprehensive loss for the year
Total restated equity at 30 June 2020
Profit for the year
Other comprehensive loss for the year
Total comprehensive (loss)/income for the year
777,124
-
-
777,124
-
-
777,124
-
-
-
Transactions with owners in their capacity as owners:
Equity-based payments
Total equity at 29 June 2021
20
-
777,124
-
-
-
-
-
-
-
-
-
-
-
-
(126,950)
-
-
(126,950)
-
-
(254.283)
35
(4,879)
395.891
35
(4,879)
391,047
(259,127)
(211,477)
(211,477)
(211,477) (211,477)
(126,950)
(470,604)
179,570
-
(1,290)
(1,290)
110,353
-
110,353
110,353
(1,290)
109,063
(318)
(128,558)
-
(360,251)
(318)
288,315
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A
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Ardent Leisure Group Limited | Annual Report 2021
Notes to the Financial Statements
for the year ended 29 June 2021
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34.
Remuneration of auditor
The auditor of the Group in the current year, Ernst & Young (EY), earned the following remuneration:
Fees to EY Australia
Audit of financial statements of the Group
Other services:
Tax compliance
Other
Total fees to EY Australia
Fees to other overseas member firms of EY Australia (US)
Audit of financial statements of the Group and financial statements of Main Event
Other services:
Tax advice
US GAAP accounting advice
Total fees to overseas member firms of EY Australia (US)
Total auditors' remuneration
June
2021
$
June
2020
$
381,243
435,303
7,384
-
388,627
57,000
5,000
497,303
582,497
495,895
15,647
-
598,144
986,771
192,856
73,583
762,334
1,259,637
35.
Equity-based payments
(a)
Deferred Short Term Incentive Plan (DSTI)
Who can participate?
What types of securities are issued?
DSTI
All employees are eligible for participation at the discretion of the Board;
however, Non-Executive Directors do not participate in the DSTI.
Performance rights that can be converted into fully paid shares once
vested. The performance rights differ from options in that they do not
carry an exercise price. Performance rights do not represent physical
securities and do not carry any voting or distribution entitlements.
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What restrictions are there on the securities?
Performance rights are non-transferable.
When can the securities vest?
What are the vesting conditions?
The plan contemplates that the performance rights will vest equally one
year and two years following the grant date.
Plan performance rights will normally vest only if the participant remains
employed by the Group (and is not under notice terminating the contract
of employment from either party) as at the relevant vesting date.
s
e
t
o
N
(i)
Equity settled payments
Since the DSTI was approved in July 2010, incentives have
been provided to certain executives under the DSTI. Under
the terms of the DSTI, participants may be granted
performance rights of which one half will vest one year after
grant date and one half will vest two years after grant date.
A total of 24,501 performance rights vested during the year
and a corresponding number of shares were issued to
employees under the terms of the DSTI (2020: 168,995).
The characteristics of the DSTI indicate that, at the Group
level, it is an equity settled payment under AASB 2 Share-
based Payment as the holders are entitled to receive shares
as long as they meet the DSTI’s service criteria.
Fair value
The fair value of equity settled performance rights granted
under the DSTI is recognised in the Group financial
statements as an employee benefit expense with a
corresponding increase in equity. The fair value of each
grant of performance rights is determined at grant date
using a Cox-Ross Rubenstein Binomial valuation model and
then is recognised over the vesting period during which
employees become unconditionally entitled to the
underlying shares.
At each reporting date, the estimate of the number of
performance rights that are expected to vest is revised.
The employee benefit expense recognised each financial
period takes into account the most recent estimate.
Ardent Leisure Group Limited | Annual Report 2021
75
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Notes to the Financial Statements
for the year ended 29 June 2021
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35.
Equity-based payments (continued)
(a)
Deferred Short Term Incentive Plan (DSTI) (continued)
(ii)
Valuation inputs
For the performance rights outstanding at 29 June 2021, the table below shows the fair value of the performance rights on
each grant date as well as the factors used to value the performance rights at the grant date. Under AASB 2, this valuation is
used to value the equity settled performance rights granted to employees at 29 June 2021:
Grant
Grant date
Vesting date – year 1
Vesting date – year 2
Average risk-free rate
Expected price volatility
Expected distribution yield
Share price at grant date
Valuation per performance right on issue
2019
22 August 2019
7 September 2020
31 August 2021
0.74% per annum
33.0% per annum
2.0% per annum
$1.18
$1.14
Grants of performance rights are made annually with the grant date being the date of the issue of the offer letters to employees.
Although the grant date may vary from year to year, the testing period (subject to any hurdles) remains constant with the
vesting date being 24 hours immediately following the announcement of the Group’s full year financial results.
(iii) Tenure hurdle
The vesting of the performance rights is subject to a tenure hurdle and participants must remain employed by the Group (and
not be under notice terminating the contract of employment from either party) as at the relevant vesting date.
The number of rights outstanding and the grant dates of the rights are shown in the table below:
Grant date
Expiry date
Exercise
price
Grant date
Valuation
per right - ALG
Balance at the
beginning of
the year
Granted
Exercised
Forfeited
Balance at
the end of
the year
-
11,559
(12,941)
(11,560)
(8,544)
(28,125)
(24,501)
(36,669)
11,559
$Nil
24 Jun 2019 7 Sept 2020
22 Aug 2019 31 Aug 2021 $Nil
98.3 cents
114.5 cents
The rights have an average maturity of two months.
(b)
Long Term Incentive Plan (LTIP)
21,485
51,244
72,729
-
-
-
Who can participate?
All executives are eligible for participation at the discretion of the Board.
What types of securities are issued?
The LTIP is typically granted in the form of performance rights that can be converted
into fully paid shares when and if vested. Performance rights do not carry any voting or
distribution entitlements.
What restrictions are there on the
securities?
Performance rights are non-transferable. Executives may not hedge any portion of their
unvested awards.
76
Ardent Leisure Group Limited | Annual Report 2021
Notes to the Financial Statements
for the year ended 29 June 2021
35.
(b)
Equity-based payments (continued)
Long Term Incentive Plan (LTIP) (continued)
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Is there a performance gateway?
For any rights to vest under the LTIP, an initial gateway performance hurdle must be
met or exceeded. The gateway hurdle is a minimum return on equity target equal to or
greater than 2.5x the 10 year bond yield rate for Australian Government bonds.
When can the performance rights
vest?
The plan contemplates that the performance rights will vest equally two, three and four
years following the grant date, subject to achieving certain conditions.
What are the vesting conditions for
Australian employees?
Assuming the performance gateway is achieved, whether the performance rights that
can vest do in fact vest is determined as follows:
50% is subject to a relative total shareholder return (TSR) performance hurdle; and
50% is subject to a compound earnings per share (EPS) performance hurdle.
What are the vesting conditions for
US employees?
Assuming the performance gateway is achieved, whether the performance rights that
can vest do in fact vest is determined as follows:
What is relative TSR and how is it
measured?
1/3rd is subject to a relative TSR performance hurdle;
1/3rd is subject to a compound EPS performance hurdle; and
1/3rd vests automatically provided the executive has remained in continuous
employment since the date of grant.
Relative TSR is the total return an investor would receive over a set period of time,
assuming that all distributions were reinvested in the Group’s shares, measured against
the return of an external benchmark. The relative TSR definition takes account of both
capital growth and distributions.
Relative TSR is measured against the ASX Small Industrials Index over the performance
period. Relative TSR performance is measured by an independent third party. The
vesting schedule for the portion of the grant subject to the relative TSR performance
condition is as follows:
The vesting scale is as follows:
Relative TSR performance
Below 50th percentile
50th percentile
Between 50th percentile and 75th percentile
75th percentile or higher
Proportion of performance rights vesting
0%
50%
Straight-line vesting
between 50% and 100%
100%
What is EPS and how is it
measured?
The EPS hurdle refers to the compound annual growth (CAGR) of earnings per share
over the vesting period.
The vesting schedule for the portion of the grant subject to EPS performance is as
follows:
EPS CAGR performance
Below 8%
8%
Between 8% and 13%
13% or higher
0%
50%
Straight-line vesting
between 50% and 100%
100%
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Ardent Leisure Group Limited | Annual Report 2021
77
Notes to the Financial Statements
for the year ended 29 June 2021
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35.
Equity-based payments (continued)
(b)
Long Term Incentive Plan (LTIP) (continued)
(i)
Equity settled payments
Since 1 July 2009, long term incentives have been provided to certain executives under the LTIP. Under the terms of the LTIP
and the initial grant, employees may be granted performance rights which vest in accordance with the terms set out in the
table above. The percentage of performance rights which may vest is subject to the TSR performance of the Group relative to
its peer group, which is the ASX Small Industrials Index.
During the year, the relative TSR and EPS performance of the Group was tested in accordance with the LTIP for tranches issued
in 2013, 2014 and 2015 with the following results:
Tranche
T3-2017
T2-018
ROE
(10.57%)
(16.73%)
Vesting
percentage
-
-
TSR
Percentile
(50.67%)
(50.71%)
14.84
13.53
Vesting
percentage
-
-
Group CAGR
EPS
n/a(1)
179.98%(2)
Vesting
percentage
-
-
(1) Mathematically, CAGR cannot be computed when there is a positive EPS in the first year, a negative EPS in the last year and an even number of years over
which it is being measured. However, as EPS has declined over the measurement period, it has by definition failed to meet the minimum vesting hurdle of
8% CAGR EPS growth.
(2) Mathematically, CAGR is positive due to increase in losses over the test period. However, as EPS has declined over the measurement period, it is deemed to
have failed to meet the minimum vesting hurdle.
No LTIP performance rights vested on 7 September 2020 (2020: Nil).
The characteristics of the LTIP indicate that, at the Group level, it is an equity settled payment under AASB 2 Share-based
Payment as the holders are entitled to the shares as long as they meet the LTIP’s service and performance criteria.
Fair value
The fair value of the equity settled performance rights granted under the LTIP is recognised in the Group financial statements
as an employee benefit expense with a corresponding increase in equity. The fair value of the performance rights is
determined at grant date using a combination of the Monte Carlo and the Cox-Ross Rubenstein Binomial valuation models.
This is recognised over the vesting period during which employees become unconditionally entitled to the underlying shares.
At each reporting date, the estimate of the number of performance rights that are expected to vest is revised. The employee
benefit expense recognised each financial period takes into account the most recent estimate.
(ii)
Valuation inputs
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For performance rights outstanding at 29 June 2021, the table below shows the fair value of the performance rights on each
grant date as well as the factors used to value the performance rights at the grant date. Under AASB 2, this valuation is used to
value the equity settled performance rights granted to employees at 29 June 2021:
Grant
Grant date
Vesting date – year 2
Vesting date – year 3
Vesting date – year 4
Average risk-free rate
Expected price volatility
Expected distribution yield
Share price at grant date
Valuation per performance right
on issue
US employees
Australian employees
2017
29 September 2017
29 August 2019
7 September 2020
31 August 2021
2.00% per annum
42.0% per annum
1.6% per annum
$1.82
2018
27 June 2019
7 September 2020
31 August 2021
31 August 2022
1.00% per annum
32.0% per annum
2.0% per annum
$1.08
$0.65
$0.19
$Nil
$Nil
Grants of performance rights are made annually with the grant date being the date of the issue of the offer letters to employees.
Although the grant date may vary from year to year, the testing period (subject to any hurdles) remains constant with the
vesting date being 24 hours immediately following the announcement of the Group’s full year financial results.
78
Ardent Leisure Group Limited | Annual Report 2021
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Notes to the Financial Statements
for the year ended 29 June 2021
35.
Equity-based payments (continued)
(b)
Long Term Incentive Plan (LTIP) (continued)
(iii)
Performance hurdles
In order for any or all of the performance rights to vest under the LTIP, the Group's Gateway, TSR and/or the EPS performance
hurdles as set out above must be met. The number of rights outstanding and the grant dates of the rights are shown in the
table below:
Grant date
Expiry date
Exercise
price
Grant date
valuation per
right
Balance at the
beginning of
the year
Granted
Exercised
Failed to
vest
Balance at
the end of
the year
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23 Aug 2016 31 Aug 2020 $Nil
29 Sep 2017 31 Aug 2021 $Nil
31 Aug 2022 $Nil
27 Jun 2019
120.7 cents
47.5 cents
0.0 cents
86,765
633,299
191,394
911,458
-
-
-
-
-
-
-
-
(86,765)
(316,647)
(63,798)
(467,210)
-
316,652
127,596
444,248
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The rights have an average maturity of six months.
The benefit recorded in the Group financial statements in the year in relation to the DSTI and LTIP performance rights was
$307,465 (2020: expense of $136,771).
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Ardent Leisure Group Limited | Annual Report 2021
79
Notes to the Financial Statements
for the year ended 29 June 2021
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36. Related party disclosures
(a)
Directors
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The following persons have held office as Directors of the Company during the period and up to the date of this report unless
otherwise stated:
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Gary Weiss AM;
David Haslingden;
Randy Garfield; and
Brad Richmond.
(b)
Parent entity
The immediate and ultimate parent entity of the Group is Ardent Leisure Group Limited.
(c)
Key controlled entities
These financial statements incorporate the assets, liabilities and results of the following wholly-owned key subsidiaries in
accordance with the accounting policy disclosure as described in Note 1:
Entity
Activity
Controlled entities of Ardent Leisure Group Limited:
Ardent Leisure Trust
Theme parks
Ardent Leisure Limited
Theme parks, Corporate
Ardent Leisure US Holding, Inc
Family entertainment centres
Country of
establishment
Class of equity
securities
Australia
Australia
USA
Ordinary
Ordinary
Ordinary
(d)
(i)
Transactions with related parties
Key management personnel
Short term employee benefits
Post-employment benefits
Termination benefits
Share-based payments
2021
$
4,647,725
58,256
-
1,078,609
6,167,301
2020
$
3,201,222
59,805
-
126,033
3,387,060
Remuneration of key management personnel (KMP) is shown in the Directors’ report from pages 12 to 23.
(e)
Loans to KMP
There were no loans to KMP during the financial year or prior corresponding period.
(f)
Other transactions with KMP
On 16 March 2021, key executives of Main Event Entertainment, Inc (Main Event) purchased 1,100 shares of newly issued
Series B Preferred Stock in Ardent Leisure US Holding Inc for US$1.1 million. The stock entitles each investor a preferential
dividend of 10% per annum, which is not paid in cash but accumulates and compounds semi-annually. Investors are also
entitled to participate in common stock dividends of ALUSH and residual net assets in the event of its liquidation. Series B
Preferred Stock will convert into common stock when RedBird’s Series A Preferred Stock converts to common stock.
Any agreements entered have been on normal commercial bases and fees and transactions have been based on normal
commercial terms and conditions.
No Director has entered into a material contract with the Group and there were no material contracts involving Directors’
interests existing at year end not previously disclosed.
80
Ardent Leisure Group Limited | Annual Report 2021
Notes to the Financial Statements
for the year ended 29 June 2021
36.
Related party disclosures (continued)
(g)
Transactions with related parties
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All transactions with related parties were made on normal commercial terms and conditions and at market rates, except that
there are no fixed terms for the repayment of loans between the parties. Outstanding balances are unsecured and are repayable
in cash. The terms and conditions of the tax funding agreement are set out in Note 6(f). The transactions incurred in the year
with controlled entities were as follows:
Income from sale of services to related parties
Reimbursable expenses paid to related parties
37. Parent entity financial information
2021
$
-
(7,090)
2020
$
36,570
(126,104)
Subsequent to the destapling and corporatisation of the Group, effective 24 December 2018, the parent entity of the Group is
Ardent Leisure Group Limited.
(a)
Summary financial information
Balance sheet
Current assets
Total assets
Current liabilities
Total liabilities
Equity
Contributed equity
Retained earnings
Total equity
Gain/(loss) for the period
Total comprehensive gain/(loss) for the period
(b)
Guarantees
2021
$’000
1
465,424
5,197
5,197
777,124
(316,897)
460,227
211,227
221,227
2020
$’000
2,412
249,000
-
-
777,124
(528,124)
249,000
(285,617)
(285,617)
There are no material guarantees entered into by Ardent Leisure Group Limited in relation to the debts of its subsidiaries.
(c)
Contingent liabilities
A small number of civil claims relating to the 2016
Dreamworld tragedy made by families and other affected
persons have yet to be finalised. They are in the process of
being dealt with by the Company’s liability insurer. The
statutory time period for bringing civil claims has now
passed.
On 18 June 2020, the Company was served with a
representative shareholder class action arising from the
2016 Dreamworld tragedy. The claim alleges
contraventions of the Corporations Act 2001 (Cth). The
plaintiff has not provided any expert valuation opinion to
quantify its claim, therefore the Company cannot provide
any meaningful or indicative estimate of the quantum of
any potential liability (if any). The Company has previously
indicated (and maintains) that it believes the proceedings
to be without merit and it will vigorously defend them.
The Company maintains appropriate insurances to
respond to litigation and the majority of associated costs.
Unless otherwise disclosed in the financial statements,
Ardent Leisure Group Limited has no other material
contingent liabilities.
(d)
Contractual commitments for the acquisition of
property, plant and equipment
There was no capital expenditure contracted for at the
reporting date but not recognised as liabilities (2020: $nil).
Ardent Leisure Group Limited | Annual Report 2021
81
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Notes to the Financial Statements
for the year ended 29 June 2021
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37. Parent entity financial information (continued)
(e)
Accounting policy
The financial information for the parent entity of the
Group (Ardent Leisure Group Limited and, in the prior year,
Ardent Leisure Trust) has been prepared on the same basis
as the consolidated financial statements, except as set out
below:
Investments in subsidiaries
Investments in subsidiaries are accounted for at cost in the
financial statements of the parent entity. Dividends
received from subsidiaries are recognised as income in the
parent entity’s income statement.
Tax consolidation legislation
Ardent Leisure Group Limited and its wholly-owned
Australian controlled entities have implemented the tax
consolidation legislation. The head entity, Ardent Leisure
Group Limited, and the controlled entities in the tax
consolidated group account for their own current and
deferred tax amounts. These tax amounts are measured as
if each entity in the tax consolidated group continues to
be a standalone taxpayer in its own right.
In addition to its own current and deferred tax amounts,
Ardent Leisure Group Limited also recognises the current
tax liabilities (or assets) and the deferred tax assets arising
from unused tax losses and unused tax credits assumed
from controlled entities in the tax consolidated group.
The entities also entered into a tax funding agreement,
effective for the year ended 31 March 2020, under which
the wholly-owned entities fully compensate Ardent Leisure
Group Limited for any current tax payable assumed and are
compensated by Ardent Leisure Group Limited for any
current tax receivable and deferred tax assets relating to
unused tax losses or unused tax credits that are transferred
to Ardent Leisure Group Limited under the tax
consolidation legislation. The funding amounts are
determined by reference to the amounts recognised in the
wholly-owned entities' financial statements.
The amounts receivable/payable under the tax funding
agreement are due upon receipt of the funding advice
from the head entity, which is issued as soon as practicable
after the end of each financial year. The head entity may
also require payment of interim funding amounts to assist
with its obligations to pay tax instalments.
Assets or liabilities arising under tax funding agreements
with the tax consolidated entities are recognised as current
amounts receivable from or payable to other entities in the
group. Any difference between the amounts assumed and
amounts receivable or payable under the tax funding
agreement are recognised as a contribution to (or
distribution from) wholly-owned tax consolidated entities.
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Directors’ declaration to shareholders
Directors’ declaration to shareholders
In the opinion of the Directors of Ardent Leisure Group Limited:
(a) The financial statements and notes of Ardent Leisure Group Limited set out on pages 27 to 82 are in accordance with the
Corporations Act 2001, including:
(i)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
(ii) giving a true and fair view of Ardent Leisure Group Limited’s financial position as at 29 June 2021 and of its
performance, as represented by the results of its operations, its changes in equity and its cash flows, for the financial
year ended on that date;
(b) There are reasonable grounds to believe that Ardent Leisure Group Limited will be able to pay its debts as and when they
become due and payable;
(c) Note 1 confirms that the financial statements also comply with International Financial Reporting Standards as issued by
International Accounting Standards Board; and
(d) At the date of this declaration, there are reasonable grounds to believe that the members of the Closed Group identified
in Note 33 will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the
Deed of Cross Guarantee as described in Note 33.
The Directors have been given the certifications required by Section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Boards of Directors.
Gary Weiss AM
Chairman
Sydney
25 August 2021
Brad Richmond
Director
Ardent Leisure Group Limited | Annual Report 2021
83
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Independent Auditor's Report to the members of Ardent Leisure Group
Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Ardent Leisure Group Limited (the Company) and its controlled entities (collectively the
Group), which comprises the consolidated balance sheet as at 29 June 2021, the consolidated income statement, statement of
comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, notes to the
financial statements, including a summary of significant accounting policies, and the director’s declaration.
In our opinion, the accompanying financial report is in accordance with the Corporations Act 2001, including:
a)
giving a true and fair view of the consolidated financial position of the Group as at 29 June 2021 and of their financial
performance for the year ended on that date; and
b)
complying with Australian Accounting Standards 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 Group 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 (including Independence Standards) (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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, but we do not provide a separate opinion on these matters. We have determined the matters
described below to be the key audit matters to be communicated in our report. For each matter below, our description of how
our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to
respond to our assessment of the risks of material misstatement of the financial report. The results of our audit procedures,
including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying
financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 2
1. Change in Accounting Policy from Revaluation to the Cost Model for Theme Park Assets
Why significant
The Group has historically measured land, buildings and
major rides within the Theme Parks business at fair value. All
other components of property plant & equipment (PP&E)
across the Group have been measured on a cost basis. Both
bases are permitted under AASB 116 Property, Plant and
Equipment.
The Group changed its accounting policy in the current year
to measure all PP&E on a cost basis. The change was
accounted for retrospectively. The impact of the change is
disclosed in detail in Note 16(a).
A change in accounting policy is permitted where the new
policy provides reliable and more relevant information to the
users of the financial statements. Due to the nature of this
change and the impact of the change on the financial
statements, we consider this a Key Audit Matter.
How our audit addressed the key audit matter
Our audit procedures included the following:
- We reviewed the assessment prepared by management
on why this change in accounting policy is reliable and
more relevant for users of the financial statements.
- We reviewed the balances contained in the Asset
Revaluation Reserve as at 25 June 2019 and tested the
appropriateness of these amounts being written back
against land, buildings and major rides.
- We agreed the restated opening balance sheet of
comparatives as at 26 June 2019 to underlying
financial records including fixed asset registers. We
tested the mathematical accuracy of the underlying
financial records including fixed asset registers.
- We assessed the adequacy of the change in accounting
policy disclosures in the financial report outlined in
Note 16(a).
2. Recoverability of Theme Park Property, Plant and Equipment
Why significant
The Group has $112 million of property, plant and
equipment held at cost as at 29 June 2021 related to Theme
Parks as disclosed in Note 16.
Management prepared an impairment assessment to test the
recoverability of the Theme Park assets in accordance with
AASB 136 Impairment of Assets.
The value in use is based upon a number of assumptions
which are judgmental in nature, including attendance, cash
flow forecasts, discount rates and growth rates.
This was considered a Key Audit Matter due to the
significance of the carrying value of property, plant and
equipment and the judgmental nature of the assumptions
underlying the discounted cash flows used in determining
the recoverable amount.
Note 16 of the financial report outlines the accounting policy
and management’s assumptions applied in the impairment
assessment.
How our audit addressed the key audit matter
Our audit procedures included the following:
- We considered management’s analysis and the
reasonableness of the cash flows used in the discounted
cash flow model as follows:
- We assessed the historical accuracy of
management’s cash flow forecasting.
- We compared the cash flows used in the
model to management’s forecasts,
projections of future growth and capital
expenditure including the impact of COVID-19
on attendance.
- We tested the mathematical accuracy of the
model.
- We reviewed management’s determination of
the discount rate and agreed key inputs to
supporting evidence.
- We considered the appropriateness of the
discount rate by comparing it to historical
discount rates and considering any recent
market transactions, and benchmarking key
inputs into the determination of the discount
rate.
- We assessed the adequacy of the Group’s disclosures in
Note 16 in respect of asset carrying values and key
assumptions.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 3
3. Recoverability of Main Event Property, Plant and Equipment
Why significant
The Group has $297 million of property, plant and
equipment held at cost as at 29 July 2021 related to Main
Event as disclosed in Note 16.
The Group assessed each Main Event centre for impairment
indicators as at 29 June 2021 in accordance with AASB 136
Impairment of Assets.
This was considered a Key Audit Matter due to the
significance of the carrying value of the property, plant and
equipment and the judgmental nature of the assumptions
underlying the cash flows used in determining the
recoverable amount.
Note 16 of the financial report outlines the accounting policy
and management’s assumptions related to these assets.
How our audit addressed the key audit matter
Our audit procedures included the following:
- We reviewed management’s identification of
impairment indicators.
- Where indicators existed, we reviewed the
reasonableness of the inputs into the cash flow
model used to determine the recoverable amounts as
follows:
- We assessed the historical accuracy of
management’s cash flow forecasting.
- We compared the cash flows used in the
model to management’s forecasts,
projections of future growth and capital
expenditure including the impact of COVID-19
on attendance.
- We tested the mathematical accuracy of the
model.
- We engaged our Real Estate valuation
specialists to review the sub-lease income
assumptions used in determining the
impairment recognised in the year.
- We assessed the adequacy of the Group’s disclosures in
Note 16 in respect of asset carrying values and key
assumptions.
4. Main Event Goodwill Impairment Assessment
Why significant
The Group has $55 million of goodwill related to the Main
Event cash generating unit (CGU) as disclosed in Note 17.
How our audit addressed the key audit matter
Our audit procedures included the following:
The Group performed a value in use calculation to test the
Main Event Goodwill for impairment as at 29 June 2021 in
accordance with AASB 136 Impairment of Assets which
concluded that no impairment was required.
This was considered a Key Audit Matter due to the relative
size of the goodwill balance and the judgmental nature of the
assumptions underpinning the discounted cash flows used in
determining the recoverable amount.
Note 17 of the financial report discusses the accounting
policy related to the goodwill and discloses the sensitivity of
the valuation to changes in key assumptions.
- We assessed the identification of CGUs with reference
to the requirements of AASB 136 Impairment of Assets.
- We considered the reasonableness of the cash flows
used in the discounted cash flow model as follows:
- We assessed the historical accuracy of
management’s cash flow forecasting.
- We compared the cash flows used in the model to
management’s forecasts, projections of future
growth and capital expenditure including the
impact of COVID-19 on attendance.
- We tested the mathematical accuracy of the
model.
-
Our valuation specialists assisted in assessing the
overall discount rate used in the model with reference
to internally developed benchmarks which are based on
market data and industry research.
- We performed scenario-specific sensitivity tests
including changes to the discount rate, forecast cash
flows and projected capital expenditure.
- We assessed the adequacy of the Group’s disclosures in
Note 17.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 4
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the information included in the
Company’s 2020 Annual Report but does not include the financial report and our 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, with the exception of the Remuneration Report and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information 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 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 Company’s and Group’s ability to continue as a
going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the Company or Group 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.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
•
•
•
•
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Company’s or the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt
on the Company’s or Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the
date of our auditor’s report. However, future events or conditions may cause the Company or the Group to cease to
continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether
the financial report represents the underlying transactions and events in a manner that achieves fair presentation.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 5
•
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and
performance of the Group audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on
our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most significance in the audit of the
financial report of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine
that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 6
Report on the Audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 12 to 23 of the directors' report for the year ended 29 June 2021.
In our opinion, the Remuneration Report of Ardent Leisure Group Limited for the year ended 29 June 2021, complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based
on our audit conducted in accordance with Australian Auditing Standards.
Ernst & Young
John Robinson
Partner
Sydney
25 August 2021
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
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Investor Analysis
Investor Relations
Investor Analysis
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
KAYAAL PTY LTD
PORTFOLIO SERVICES PTY LTD
UBS NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMS PTY LTD
NETWEALTH INVESTMENTS LIMITED
BNP PARIBAS NOMINEES PTY LTD
RAGUSA PTY LTD
RAGUSA PTY LTD
BOND STREET CUSTODIANS LIMITED
ONE MANAGED INVT FUNDS LTD
BNP PARIBAS NOMINEES PTY LTD
PALM VILLA PTY LTD
DEEMCO PTY LIMITED
CS FOURTH NOMINEES PTY LIMITED
MR SHANE NEWMAN ABEL
Top investors as at 24 August 2021
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Total
Balance of register
Grand total
No. of shares
78,405,872
59,144,590
54,148,168
22,672,159
21,277,233
19,387,452
12,527,165
12,174,454
10,853,251
10,694,330
6,497,886
4,139,794
2,910,409
2,100,000
2,045,167
2,037,458
2,000,000
1,780,000
1,438,509
1,320,000
327,553,897
152,152,119
479,706,016
Range report as at 24 August 2021
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
No. of shares
383,315,247
72,978,532
12,719,698
9,752,841
939,698
479,706,016
% No. of holders
224
2,550
1,663
3,577
2,281
10,295
79.91
15.21
2.65
2.03
0.20
100.00
The total number of investors with an unmarketable parcel of 229,849 shares as at 24 August 2021 was 1,417.
%
16.34
12.33
11.29
4.73
4.44
4.04
2.61
2.54
2.26
2.23
1.35
0.86
0.61
0.44
0.43
0.42
0.42
0.37
0.30
0.28
68.28
31.72
100.00
%
2.18
24.77
16.15
34.75
22.16
100.00
Voting rights
In accordance with the Company’s Constitution, each member present at a meeting, whether in person, by proxy, by power of
attorney or by a duly authorised representative in the case of a corporate member, shall have one vote on a show of hands and
one vote for each fully paid ordinary share on a poll.
On-market buy-back
There is no current on-market-buy-back.
Substantial shareholder notices received as at 24 August 2021
The Ariadne Substantial Holder Group(1)
FIL Ltd
Yarra Management Nominees Pty Ltd and TA Universal Investment Holdings Ltd
Wilson Asset Management Group
No. of shares
45,344,317
47,970,601
61,085,831
38,165,794
%
9.45%
10.00%
12.73%
7.96%
(1) The Ariadne Substantial Holder Group includes the following companies and partnerships – Portfolio Services Pty Limited, Ariadne Holdings Pty
Limited, Ariadne Australia Limited, Bivaru Pty Limited and Kayaal Pty Ltd.
90
Ardent Leisure Group Limited | Annual Report 2021
Investor Relations and Corporate
Directory
Corporate Governance Statement
Investor Relations and Corporate Directory
In accordance with the ASX Listing Rules, the Group’s Corporate Governance Statement is published and located in the
Corporate Governance page of the Group’s website (http://www.ardentleisure.com.au/Company/Corporate-Governance.aspx).
A copy has also been provided to the ASX.
Contact details
Share registry
To access information on your holding or to update/change your details, contact:
Link Market Services Limited
Locked Bag A14
Sydney South NSW 1235
Telephone
1300 720 560 (within Australia)
+61 1300 720 560 (outside Australia)
Facsimile
+61 2 9287 0303
Website
www.linkmarketservices.com.au
Email
registrars@linkmarketservices.com.au
All other enquiries relating to your Ardent Leisure Group Limited investment can be directed to:
Ardent Leisure Group Limited
PO Box 1927
North Sydney NSW 2059
Telephone
+61 2 9168 4600
Facsimile
+61 2 9168 4601
Email
investor.relations@ardentleisure.com
Website
www.ardentleisure.com
Ardent Leisure Group Limited | Annual Report 2021
91
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Investor Relations and Corporate
Directory
Corporate Directory
Company
Ardent Leisure Group Limited
ABN 51 628 881 603
Registered office
Suite 601, Level 6, 83 Mount Street
North Sydney NSW 2060
Directors
Gary Weiss AM
David Haslingden
Randy Garfield
Brad Richmond
Group Chief Financial Officer
Darin Harper
Company Secretary
Chris Todd
ASX code
ALG
Auditor of the Group
Ernst & Young
200 George Street
Sydney NSW 2000
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Ardent Leisure Group Limited | Annual Report 2021