Annual Report
2019
Contents
Executive Chairman’s report
FY2019 Highlights
Directors’ report
Financial statements
Notes to the financial statements
Directors’ declaration
Independent Auditor’s report
Auditor’s independence declaration
Corporate Governance Statement
Security Holder information
Corporate Directory
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Executive
Chairman’s Report
Financial Review
For the year ended 30 June 2019, Eureka Group Holdings
Limited (Eureka) achieved a significantly improved financial
result over that for the previous year, reporting a net profit
before (and after) tax of $6.79 million. This compares with a
prior year net loss of $0.28 million. Net profit prior to asset
revaluations was $4.84 million (2018: $4.05 million). This is a
very satisfactory result and reflects the strength of the core
operating business.
Earnings before interest, tax and depreciation (EBITDA) and
before asset revaluations of $7.83 million was up 11% on prior
year of $7.05 million. Core operating cash flow of $4.75
million was up 13% on prior year of $4.21 million. Proceeds
from asset sales were primarily applied against debt. Net
debt at year end was $46.17 million. This compares to prior
year of $53.85 million, a reduction of 14%. This has resulted
in an improved net debt to total tangible assets ratio of 36%
(2018: 42%).
Investment property revaluations of $2.25 million were
recognised in the year compared to prior year net write downs
of $1.44 million. The prior year revaluations included write
downs on the supported residential facilities of $2.67 million.
The weighted average capitalisation rate for the retirement
village properties is 10.22% (2018: 10.31%).
Operations Review
Focus in FY2019 was to improve operational performance
while maintaining a diligent approach to the sale of non-core
assets. Specific comments are made later in my report about
Terranora. Proceeds from non-core asset sales were $5.90
million, including $3.60 million from a settlement reached
in relation to Couran Cove and $1.10 million from the sale of
Lambert village, the Mount Gambier Supported Residential
Facility (SRF). Eureka also owns two houses associated with
the facility and settlement for the sale of these properties
will be in September 2019. The remaining SRF located in
Adelaide has been granted accreditation under the National
Disability Insurance Scheme (NDIS). An upgrade of the facility
and a renewed management focus has significantly improved
profitability of this asset which will in due course reflect an
improved capital value.
The appointment of a new Chief Financial Officer (CFO)
and Chief Operating Officer (COO) in the third quarter has
strengthened the management team, enabling renewed
leadership focus on business process and operational
effectiveness at the support office and throughout the village
network. A comprehensive review has been undertaken of all
operational aspects. As a result of this review, management
has developed and commenced the implementation of a two
year business plan to reset the operating platform based on
five pillars
Net profit before and after tax
Net (gain)/loss on revaluation of investment property and other property assets
Impairment of Couran Cove assets
Net profit prior to asset revaluations
Depreciation, amortisation & finance costs
EBITDA prior to asset revaluations
Operating cashflow
Earnings per share
Dividends per share
4
FY2019
$’000
6,794
(1,953)
–
4,841
2,991
7,832
4,745
Cents
2.95
1.00
FY2018
$’000
(276)
1,439
2,887
4,050
3,004
7,054
4,214
Cents
(0.12)
–
Operating Pillars
• Safety, Risk and Compliance
• Information Systems and Technology
• Applications (including Customer Relationship
Management and Analytics)
• Team Culture and Engagement
• Occupancy, Revenue and Cost Initiatives
Terranora
Disappointingly, the final regulatory approvals for the
Terranora development were not completed until May 2019,
delaying the recycling of capital from this project. An intensive
sales and marketing campaign commenced in May and has
resulted in encouraging early sales of the 60 strata titled
units owned by Eureka. The sale of the strata titled units is
expected to generate net proceeds at least equivalent to
book value. To date six contracts have settled with a sales
value of $1.68 million. A further four contracts with a sales
value of $1.23 million are unconditional. In the short-term,
Eureka will retain the management rights for this asset.
A feasibility study will be undertaken on the 4.8 hectare
of land which is separately titled. The analysis will include
assessing the suitability for a senior rental living facility. Our
research suggests the Tweed - Gold Coast corridor has a
strong demographic profile for independent seniors’ living.
Portfolio Occupancy
The number of owned and managed village units at 30
June 2019 was 2,119 which is a 3% reduction on units held
at 30 June 2018 of 2,182. The reduction in units under
management results from the disposal of the SRF located in
South Australia. Year-end occupancy remains strong at 91%
(2018: 93%). We expect occupancy to improve in FY2020
as a consequence of new marketing initiatives and product
improvement programs.
Blue Care Alliance
Our strategic alliance with Blue Care provides Eureka’s
residents with a range of services, offering individually tailored
care and support programs. These provide benefits for our
residents, enabled through government funded programs.
Both Blue Care and Eureka are committed to expanding the
program and have agreed a range of initiatives to improve
outcomes for all residents who use these services. During
FY2019 the number of residents taking up Blue Care services
showed a modest increase over FY2018, with a continuing
upward trend. Under the broader strategic partnership, Eureka
and Blue Care will explore management and development
opportunities in senior rental independent living.
Eureka remains committed to
accelerating the asset recycling
program and to the profitable
expansion of its business that will
enhance shareholder value on a
sustainable basis.
4
5
I assumed the role of Executive Chairman on the retirement
of Jeff Weigh, the former CEO, on 31 May 2018. It is with
sadness that the Board and management acknowledge Jeff’s
passing during the year and extend condolences to Jeff’s
family and friends.
In January 2019, Ms Tracey Campion was appointed CFO,
following Mr Paul Cochrane’s resignation in December
2018. Ms Campion has more than 10 years’ senior financial
management experience gained in roles held in Australia and
overseas. She is skilled in financial management, control and
systems implementation, and has significant experience in
financial services and property related industries.
The Board determined that Eureka’s short term needs
are best served by the appointment of a COO with strong
operational and property skills. Mr Cameron Taylor was
appointed COO in March 2019, bringing executive level
property and operational experience to the management
team. Mr Taylor joined Eureka from the Woolworths Group
having spent more than 10 years as the Queensland State
Property Manager and more recently, the Head of Property
and Facilities for Big W. His career also includes senior
property positions with Flight Centre and Westfield.
Dividend
The Directors are pleased to announce that Eureka will pay a
final dividend of 1.0 cent per share for the year ended 30 June
2019 (2018: $nil). The dividend will be paid to shareholders on
17 October 2019. Payment of this dividend demonstrates the
progress the company has made over the reporting period
and confidence in future business operations and growth.
Outlook
Concurrent with the operational plan, Eureka is implementing
a targeted marketing plan directed at identifying prospective
tenants through traditional media outlets and expanding into
digital marketing channels. The strategy will include providing
assistance to prospective tenants with the transition to
independent village living including support as they navigate
the regulatory environment in relation to care packages.
Eureka has a sound financial platform and along with the
further recycling of assets in FY2020, it is well positioned to
recommence acquisitions and scale the business. Eureka
has identified a number of acquisition opportunities in the
traditional village model. Within the existing portfolio,
development opportunities exist at Terranora, Wynnum,
Gympie and Townsville. The focus on Eureka’s core business
as a senior rental living service provider will stabilise and grow
cash flows enabling a level of debt to be carried on operating
assets in a low risk social infrastructure framework
Directors and Staff
There were a number of changes in Eureka’s Board and
management during the year.
Following the 2018 Annual General Meeting, Mr Nirmal Hansra
retired from the Board. Mr Hansra served on the Board and
its Committees from 2012. The Board thanks Mr Hansra for his
efforts and commitment during the term of his appointment.
At that time, Mr Russell Banham was appointed a non-
executive director of Eureka. Mr Banham is an experienced
company director with a demonstrated history of working
in various industries including mining metals, property
development management, manufacturing and hospitality.
He is skilled in financial management, risk management and
corporate governance and has a professional services career
that spans 40 years in Australia and abroad.
Mr Banham was appointed chair of the Audit and Risk
Committee and Ms Sue Renkin assumed the role of chair of
the Nomination and Remuneration Committee.
6
I thank all staff for their contribution and effort during the
year. To our Shareholders, the Board and management
thank you for your continued support during what has been a
challenging period for Eureka.
Eureka remains committed to accelerating the asset recycling
program and to the profitable expansion of its business
that will enhance shareholder value on a sustainable basis.
Eureka is now positioned to scale its platform providing
secure, safe residential accommodation in the social
infrastructure segment of retirement living.
Yours faithfully
The new management team has quickly implemented a
two year business plan now approved by the Board. The
plan’s implementation is based upon a range of priorities and
initiatives that I believe will contribute to improved financial
performance and the establishment of a sustainable platform
for future growth.
Murray Boyte
Executive Chairman
30 August 2019
6
7
FY2019 Highlights
Capital recycling
$5.9M
from non-core asset disposals
realised
14% in
Net debt
to $46.2M
Focus on sustainable growth
1 cent
Commencement of
Dividend
Strength of core operations
11% in EBITDA
pre asset revaluations
$7.83M
$7.05M
FY19
FY18
Assets
under management
$133M
Including + $2.3M revaluations
91%
Occupancy remains strong
FY18: 93%
2,119
Units under management
after sale of non-core assets.
FY18: 2,182
8
EUREKA GROUP HOLDINGS
Eureka has a strong platform to expand its business through acquisitions
and infill developments at some existing villages. An excellent opportunity
exists to scale its platform of providing secure, safe and friendly residential
accommodation in the social infrastructure segment of retirement living.
39
7
19
6
2
5
30 Owned
9 Under Management
8
30 Owned
9 under management
9
03
Financial Report
2019
Eureka Group Holdings Limited and controlled entities
Directors’ Report
The Directors present their report on Eureka Group Holdings Limited (the “Company”, “EGH” or “Eureka”) and its controlled
entities (the “Group”, or the “Consolidated Entity”) for the year ended 30 June 2019 (“the year”).
DIRECTORS
The following persons were directors of the Company during the whole of the financial year and up to the date of this report,
unless otherwise stated:
Murray Boyte
Sue Renkin
Lachlan McIntosh
Russell Banham
Nirmal Hansra
PRINCIPAL ACTIVITIES
The principal activities of EGH include:
Appointed 21 November 2018
Resigned 21 November 2018
•
•
Providing independent living accommodation and services to a broad market of senior residents; and
Providing specialist property asset management through property ownership, caretaking and infrastructure
management.
REVIEW OF OPERATIONS AND RESULTS
The Group has reported a profit before and after tax for the year of $6.79 million (2018: loss of $0.28 million) and the Group’s
EBITDA prior to asset revaluations was $7.83 million (2018: $7.05 million).The Group’s portfolio of residential village assets
performed well with increased revenue primarily due to additional service fees from the management of the properties in the
Tasmania joint venture and improved operations. Profit before and after tax for the period included a full year contribution
from the joint venture which owns and operates the villages in Tasmania.
A summary of the Group’s performance is shown in Table 1.
Table 1: Performance Summary
Consolidated
30 June 2019
$’000
30 June 2018
$’000
Profit/(loss) before and after tax
Depreciation and amortisation
Finance costs
EBITDA1
Net (gain)/loss on revaluation of investment property and other property assets
Impairment of Couran Cove assets2
EBITDA1 prior to asset revaluations
6,794
225
2,766
9,785
(1,953)
-
7,832
(276)
251
2,753
2,728
1,439
2,887
7,054
1
2
EBITDA (Earnings before interest, tax, depreciation and amortisation) is an unaudited non-IFRS measure, however, the Directors believe
it is a readily calculated measure that has broad acceptance and is referred to by regular users of published financial statements as a
proxy for overall operating performance. EBITDA presented has been calculated from amounts disclosed in the financial statements.
Further details about the Couran Cove investment are contained in Note 28.
Eureka owns 30 villages, 5 of which are owned in a joint venture, and has 9 villages under management, representing 2,119
units (2018: 2,182 units) .
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EGH ANNUAL REPORT 2019
1
The following persons were directors of the Company during the whole of the financial year and up to the date of this report,
Eureka Group Holdings Limited and controlled entities
Directors’ Report
DIRECTORS
unless otherwise stated:
Murray Boyte
Sue Renkin
Lachlan McIntosh
Russell Banham
Nirmal Hansra
PRINCIPAL ACTIVITIES
The principal activities of EGH include:
management.
REVIEW OF OPERATIONS AND RESULTS
Appointed 21 November 2018
Resigned 21 November 2018
•
•
Providing independent living accommodation and services to a broad market of senior residents; and
Providing specialist property asset management through property ownership, caretaking and infrastructure
The Group has reported a profit before and after tax for the year of $6.79 million (2018: loss of $0.28 million) and the Group’s
EBITDA prior to asset revaluations was $7.83 million (2018: $7.05 million).The Group’s portfolio of residential village assets
performed well with increased revenue primarily due to additional service fees from the management of the properties in the
Tasmania joint venture and improved operations. Profit before and after tax for the period included a full year contribution
from the joint venture which owns and operates the villages in Tasmania.
Table 1: Performance Summary
Profit/(loss) before and after tax
Depreciation and amortisation
Finance costs
EBITDA1
Impairment of Couran Cove assets2
EBITDA1 prior to asset revaluations
Net (gain)/loss on revaluation of investment property and other property assets
Consolidated
30 June 2019
30 June 2018
$’000
6,794
225
2,766
9,785
(1,953)
-
7,832
$’000
(276)
251
2,753
2,728
1,439
2,887
7,054
1
2
EBITDA (Earnings before interest, tax, depreciation and amortisation) is an unaudited non-IFRS measure, however, the Directors believe
it is a readily calculated measure that has broad acceptance and is referred to by regular users of published financial statements as a
proxy for overall operating performance. EBITDA presented has been calculated from amounts disclosed in the financial statements.
Further details about the Couran Cove investment are contained in Note 28.
Eureka owns 30 villages, 5 of which are owned in a joint venture, and has 9 villages under management, representing 2,119
units (2018: 2,182 units) .
The Directors present their report on Eureka Group Holdings Limited (the “Company”, “EGH” or “Eureka”) and its controlled
Financial Position
entities (the “Group”, or the “Consolidated Entity”) for the year ended 30 June 2019 (“the year”).
Key financial information in relation to the Group’s financial position is shown below:
Eureka Group Holdings Limited and controlled entities
Directors’ Report
$’000
Total Assets
Net assets
$’000
Working capital (current assets less current liabilities) $’000
$’000
Cash and cash equivalents
$’000
Debt
‘000
Shares on issue
cents
Earnings per share (basic and diluted)
cents
Net tangible assets per share
Consolidated
30 June 2019
30 June 2018
133,072
81,482
10,887
3,060
49,234
230,038
2.95
33.1
133,300
74,700
16,191
1,986
55,837
230,038
(0.12)
29.8
Significant balance sheet movements during the financial year were as follows:
•
•
•
•
Total assets decreased by $0.23 million, due to repayment of borrowings from cash received from the sale of Couran
Cove units ($2.01 million), receipt of loan repayment related to Couran Cove ($1.59 million) and the sale of gaming
licences ($0.60 million), offset by additions to and revaluation of investment properties ($4.65 million).
Total liabilities decreased by $7.01 million primarily due to repayment of borrowings ($6.60 million).
Working capital decreased by $5.30 million, due to reclassification of borrowings that are repayable within 12 months
and the reduction in inventory and assets held for sale.
Cash balances increased by $1.07 million. Net operating cash inflow was $4.75 million (2018 $4.21 million).
Under the terms of its National Australia Bank (NAB) debt facility, Eureka is able to deposit and withdraw funds in accordance
with its working capital needs. At balance date the undrawn amount under the facility was $7.53 million.
Further details on changes in the Group’s financial position are provided below.
A summary of the Group’s performance is shown in Table 1.
Acquisitions
No significant acquisitions of properties were made during the year. The Group spent $1.62 million on enhancing its owned
villages through capital improvements and increased its ownership in non-wholly owned villages by acquiring two units for
$0.18 million.
Disposals
The Group’s program of realising non-core and underperforming assets continued during the year including:
•
•
•
•
the sale of Lambert Village, in Mt Gambier, for $1.10 million;
partial realisation of the Couran Cove investment for $3.60 million;
disposal of the remaining gaming licences for $0.60 million; and
settlement of two units at Terranora for $0.54 million.
Couran Cove
On 30 August 2018, Eureka reached agreement with Onterran Limited (ASX: OTR) (Onterran), certain of its subsidiaries
(Couran Cove entities) and other parties in relation to outstanding loans and property assets at Couran Cove on South
Stradbroke Island. The financial impact of these agreements was reflected in the Group’s financial statements for the year
ended 30 June 2018.
In line with these agreements, cash of $3.60 million was received during the year, comprising $2.01 million from the sale of
all of Eureka’s units at Couran Cove and loan repayments totalling $1.59 million.
Note 28 contains further details in relation to these transactions.
12
EGH ANNUAL REPORT 2019
1
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EGH ANNUAL REPORT 2019
2
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Directors’ Report
Terranora
During the year, individual unit titles were issued for 61 units on the 2.04 hectare site, enabling the Group to commence
realisation of its investment in the Terranora project. Two units were sold for total proceeds of $0.54 million. An additional four
unit sales totalling $1.14 million have settled subsequent to year end. The marketing program for the remaining units is
ongoing.
At 30 June 2019, the investment property balance relating to Terranora consists of the land ($2.30 million) and manager’s unit
($0.60 million) which was transferred to investment property at fair value.
Capital management – debt & equity
Debt
The Group was in compliance with all banking covenants during the year. The Group’s NAB facilities were consolidated into
one facility of $55.0 million maturing on 31 December 2021. This reflects a two-year extension for $20.0 million of the facility.
The Group intends to refinance a Westpac debt facility of $1.76 million, expiring in November 2019, into the existing NAB
facility.
Equity
The following changes in equity occurred during the year:
•
•
the on-market share buy-back was extended until 16 March 2020. No shares were bought back and cancelled
during the year (2018: nil); and
319,375 performance rights (2018: 559,090) and 500,000 options (2018: 1,000,000) were forfeited during the year.
There were no share options or share rights outstanding at 30 June 2019.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There were no significant changes in the state of affairs of the Group, other than those addressed in the Directors’ Report and
in Note 34.
DIVIDENDS
At the date of signing these financial statements, the Company has declared an unfranked final dividend of 1.0 cent per share
(2018: $nil) with a record date of 1 October 2019 and a payment date of 17 October 2019. The total dividend payable is $2.30
million. The financial effect of this dividend has not been brought to account in the financial statements for the year ended 30
June 2019 and will be recognised in subsequent financial reports.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
In the 2020 financial year, Eureka is committed to:
•
•
•
•
Further expanding Eureka’s core business of providing affordable rental accommodation for seniors through the
active management of existing assets, the acquisition of additional villages and units, and the realisation of
development opportunities;
Improving the performance of our existing portfolio with continued focus on maintaining and improving
occupancy through the ongoing strengthening of our relationships within our communities.
Implementing operational efficiencies, cost reduction and streamlined support services through process and
systems improvements across our villages and support office;
Disposing of the Group’s non-core assets.
14
EGH ANNUAL REPORT 2019
3
Terranora
ongoing.
Debt
facility.
Equity
•
•
in Note 34.
DIVIDENDS
Eureka Group Holdings Limited and controlled entities
Directors’ Report
Eureka Group Holdings Limited and controlled entities
Directors’ Report
MATERIAL BUSINESS RISKS
During the year, individual unit titles were issued for 61 units on the 2.04 hectare site, enabling the Group to commence
realisation of its investment in the Terranora project. Two units were sold for total proceeds of $0.54 million. An additional four
unit sales totalling $1.14 million have settled subsequent to year end. The marketing program for the remaining units is
At 30 June 2019, the investment property balance relating to Terranora consists of the land ($2.30 million) and manager’s unit
($0.60 million) which was transferred to investment property at fair value.
Capital management – debt & equity
The Group was in compliance with all banking covenants during the year. The Group’s NAB facilities were consolidated into
one facility of $55.0 million maturing on 31 December 2021. This reflects a two-year extension for $20.0 million of the facility.
The Group intends to refinance a Westpac debt facility of $1.76 million, expiring in November 2019, into the existing NAB
The following changes in equity occurred during the year:
The Board is committed to monitoring and mitigating business risks faced by the Group, including the following key risks that
have the potential to materially impact its financial prospects:
• Acquisition risk – acquiring villages has and will continue to be a source of growth for the Group. Identifying properties
that meet the Group’s target performance hurdle rate and sit within the risk appetite set by the Board is critical to the
Group’s performance. The Group’s Board and management is experienced in acquiring properties and will conduct
comprehensive analysis and due diligence as part of its acquisition process.
• Changes in Government funding (pension, rent assistance and National Disability Insurance Scheme (NDIS)) – the Group
provides affordable rental accommodation to seniors and many of the villages’ residents are reliant on government
funding in the form of pensions or rent assistance and NDIS. An adverse change in government funding, may have a
direct impact on village occupancy, profitability and asset values. The Group manages its village and support office costs
having regard to occupancy levels.
• Demand for non-core products – the Group has exposure to non-core investments at Terranora (units) and Couran Cove
(loans). The Group’s successful exit from these investments is dependent on approvals and/or sales occurring at forecast
values within an acceptable timeframe.
the on-market share buy-back was extended until 16 March 2020. No shares were bought back and cancelled
during the year (2018: nil); and
Details of events that occurred after the end of the financial year are contained in Note 34.
319,375 performance rights (2018: 559,090) and 500,000 options (2018: 1,000,000) were forfeited during the year.
There were no share options or share rights outstanding at 30 June 2019.
ENVIRONMENTAL REGULATION
SUBSEQUENT EVENTS
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There were no significant changes in the state of affairs of the Group, other than those addressed in the Directors’ Report and
At the date of signing these financial statements, the Company has declared an unfranked final dividend of 1.0 cent per share
(2018: $nil) with a record date of 1 October 2019 and a payment date of 17 October 2019. The total dividend payable is $2.30
million. The financial effect of this dividend has not been brought to account in the financial statements for the year ended 30
June 2019 and will be recognised in subsequent financial reports.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
In the 2020 financial year, Eureka is committed to:
•
•
•
•
Further expanding Eureka’s core business of providing affordable rental accommodation for seniors through the
active management of existing assets, the acquisition of additional villages and units, and the realisation of
development opportunities;
Improving the performance of our existing portfolio with continued focus on maintaining and improving
occupancy through the ongoing strengthening of our relationships within our communities.
Implementing operational efficiencies, cost reduction and streamlined support services through process and
systems improvements across our villages and support office;
Disposing of the Group’s non-core assets.
The Group’s operations are not subject to any particular or significant environmental regulation under a law of the
Commonwealth or of a State or Territory.
INFORMATION ON DIRECTORS
The details of each Director’s qualifications, experience and special responsibilities for those in office during the year are:
Name:
Title:
Qualifications:
Experience & expertise:
Other listed company directorships:
Former directorships (last 3 years)
Special responsibilities:
Interests in shares:
Interests in options:
Murray Boyte
Executive Chairman
Murray holds a Bachelor of Commerce and Administration from the Victoria University
in Wellington and is a member of the Australian Institute of Company Directors, the
Institute of Directors of New Zealand and Chartered Accountants Australia & New
Zealand.
Murray has over 35 years’ experience in merchant banking and finance, undertaking
company reconstructions, mergers and acquisitions in Australia, New Zealand, North
America and Hong Kong. In addition, Murray has held executive positions and
Directorships in the transport, horticulture, financial services, investment, health
services and property industries. He was the Chief Executive Officer of ASX listed
Ariadne Australia Limited from 2002 to 2015.
Abano Healthcare Group Limited (NZX), National Tyre & Wheel Limited (ASX: NTD)
and Hillgrove Resources Ltd (ASX: HGO).
Unity Pacific Group (ASX: UPG)
Chair of the Board, Member of the Audit & Risk Committee, Member of the Nomination
& Remuneration Committee.
250,000
Nil
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EGH ANNUAL REPORT 2019
3
15
EGH ANNUAL REPORT 2019
4
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Directors’ Report
Name:
Title:
Qualifications:
Experience & expertise:
Sue Renkin
Non-Executive Director
Sue holds a Master of Business Administration from Monash University, a Graduate
Diploma in Corporate Governance from UNE and attended Harvard Business School
for a course on Competition and Strategy.
Sue enjoyed almost thirty years as CEO for private hospitals, emergency services and
not for profit entities. She now operates a portfolio career as a non-executive director
and executive coach and mentor.
Sue is a past National Telstra Business Woman of the year. She is the current
Chairman of Southern Metropolitan Cemeteries Trust, a Director of GMHBA Limited,
member of the Global Leadership Board International Women’s Forum and Director
of the National Imaging Facility’s Governing Board.
Other listed company directorships: Nil
Nil
Former directorships (last 3 years)
Member of the Audit & Risk Committee (including as Chair until 31 January 2019),
Special responsibilities:
Chair of the Nomination & Remuneration Committee from 31 January 2019.
Nil
Nil
Interests in shares:
Interests in options:
Name:
Title:
Qualifications:
Experience & expertise:
Lachlan McIntosh
Non-Executive Director
Lachlan has a Bachelor of Commerce degree and is a Member of Chartered
Accountants Australia and New Zealand.
Lachlan specialises in corporate finance and mergers and acquisitions. He has had
substantial experience in the real estate and retirement accommodation industry along
with significant experience in the franchising industries and mining services industries.
Other listed company directorships: Onterran Limited (ASX: OTR).
Former directorships (last 3 years)
Special responsibilities:
Interests in shares:
Interests in options:
Name:
Title:
Qualifications:
Experience & expertise:
Nil
Member of the Audit & Risk Committee, Member of the Nomination & Remuneration
Committee.
6,700,138
Nil
Russell Banham
Non-Executive Director (appointed 21 November 2018)
Russell has a Bachelor of Commerce degree, is a Graduate Member of the Australian
Institute of Company Directors and is a fellow of Chartered Accountants Australia and
New Zealand.
Russell is an experienced company director with a demonstrated history of working in
various industries including mining & metals, property development and management,
manufacturing and gaming and hospitality. He is skilled in financial management, risk
management and corporate governance. He was an audit partner and had functional
leadership responsibilities at Deloitte, Ernst & Young and Andersen.
Russell currently serves as an independent non-executive director of HKSE listed
MGM China Holdings Limited, LSE listed National Atomic Company Kazatomprom
and Wiggins Island Coal Export Terminal Pty Ltd. He is also a member of the Audit
and Risk Management Committee of the Queensland Audit Office.
Other listed company directorships: MGM China Holdings Limited (HKSE); National Atomic Company Kazatomprom (LSE)
Former directorships (last 3 years)
Special responsibilities:
Nil
Member of Audit & Risk Committee from 21 November 2018 (including as Chair from
31 January 2019).
Nil
Nil
Interests in shares:
Interests in options:
16
EGH ANNUAL REPORT 2019
5
Eureka Group Holdings Limited and controlled entities
Directors’ Report
Name:
Title:
Qualifications:
Experience & expertise:
Other listed company directorships: Nil
Former directorships (last 3 years)
Nil
Interests in shares:
Interests in options:
Nil
Nil
Name:
Title:
Qualifications:
Experience & expertise:
Special responsibilities:
Member of the Audit & Risk Committee (including as Chair until 31 January 2019),
Chair of the Nomination & Remuneration Committee from 31 January 2019.
Lachlan McIntosh
Non-Executive Director
Lachlan has a Bachelor of Commerce degree and is a Member of Chartered
Accountants Australia and New Zealand.
Lachlan specialises in corporate finance and mergers and acquisitions. He has had
substantial experience in the real estate and retirement accommodation industry along
with significant experience in the franchising industries and mining services industries.
Other listed company directorships: Onterran Limited (ASX: OTR).
Former directorships (last 3 years)
Nil
Special responsibilities:
Member of the Audit & Risk Committee, Member of the Nomination & Remuneration
Interests in shares:
Interests in options:
Name:
Title:
Qualifications:
Experience & expertise:
Committee.
6,700,138
Nil
Russell Banham
New Zealand.
Non-Executive Director (appointed 21 November 2018)
Russell has a Bachelor of Commerce degree, is a Graduate Member of the Australian
Institute of Company Directors and is a fellow of Chartered Accountants Australia and
Russell is an experienced company director with a demonstrated history of working in
various industries including mining & metals, property development and management,
manufacturing and gaming and hospitality. He is skilled in financial management, risk
management and corporate governance. He was an audit partner and had functional
leadership responsibilities at Deloitte, Ernst & Young and Andersen.
Russell currently serves as an independent non-executive director of HKSE listed
MGM China Holdings Limited, LSE listed National Atomic Company Kazatomprom
and Wiggins Island Coal Export Terminal Pty Ltd. He is also a member of the Audit
and Risk Management Committee of the Queensland Audit Office.
Other listed company directorships: MGM China Holdings Limited (HKSE); National Atomic Company Kazatomprom (LSE)
Special responsibilities:
Member of Audit & Risk Committee from 21 November 2018 (including as Chair from
Former directorships (last 3 years)
Nil
Interests in shares:
Interests in options:
31 January 2019).
Nil
Nil
Eureka Group Holdings Limited and controlled entities
Directors’ Report
Sue Renkin
Non-Executive Director
Sue holds a Master of Business Administration from Monash University, a Graduate
Diploma in Corporate Governance from UNE and attended Harvard Business School
for a course on Competition and Strategy.
Sue enjoyed almost thirty years as CEO for private hospitals, emergency services and
not for profit entities. She now operates a portfolio career as a non-executive director
and executive coach and mentor.
Sue is a past National Telstra Business Woman of the year. She is the current
Chairman of Southern Metropolitan Cemeteries Trust, a Director of GMHBA Limited,
member of the Global Leadership Board International Women’s Forum and Director
of the National Imaging Facility’s Governing Board.
Name:
Title:
Qualifications:
Experience & expertise:
Nirmal Hansra
Non-Executive Director (resigned 21 November 2018)
Nirmal holds a Master of Commerce (Business Management) degree from University
of NSW and is a Fellow of the Australian Institute of Company Directors, Fellow of the
Governance Institute of Australia, Fellow of Chartered Accountants Australia and New
Zealand and Fellow of Australian Society of Certified Practicing Accountants.
Nirmal has over 35 years of senior executive management experience and 12 years
of board and corporate advisory experience. During this time Nirmal had roles as Chief
Financial Officer/Finance Director of listed companies such as Industrea Limited, ISoft
Group Limited, Australian Pharmaceutical Industries Limited and Ruralco Holdings
Limited.
Whilst a director of Eureka, Nirmal was Chair of Campbell Page Limited and non-
executive director of Kuringai Financial Services Limited, Link Housing Limited,
Council of the Ageing (COTA) in New South Wales, Children’s Tumour Foundation of
Australia Limited and Have A Voice Pty Limited. He was also an independent Member
of the Audit & Risk Committee for the Department of Finance, Services and Innovation
and the Property & Advisory Group of the NSW Government.
Other listed company directorships: Nil
Nil
Former directorships (last 3 years)
Chair of Nomination & Remuneration Committee until 21 November 2018, Member of
Special responsibilities:
Audit & Risk Committee until 21 November 2018.
As per Remuneration Report for the period Nirmal was a director.
Nil
Interests in shares:
Interests in options:
COMPANY SECRETARIES
Laura Fanning – Company Secretary
Laura is a Chartered Secretary and Chartered Accountant with more than 20 years’ financial, governance and commercial
experience. Laura is currently the Company Secretary at National Tyre & Wheel Limited and has previously held Chief
Financial Officer and Company Secretary roles at National Veterinary Care Limited and Unity Pacific Group Limited, as well
as senior management positions in other listed and unlisted companies. She has gained broad financial and secretarial
experience across several industries including funds management, property, veterinary services, wholesale distribution and
franchising.
Paul Cochrane – Chief Financial Officer and Company Secretary (resigned 21 December 2018)
Paul Cochrane holds a Bachelor of Commerce from University of Queensland, is a Member of The Chartered Accountants
Australia and New Zealand and holds an REIQ Real Estate License. He spent three years as Chief Financial Officer and
Company Secretary at Ariadne Australia Ltd, followed by 7 years in a variety of senior roles at Lend Lease Ltd, including 3
years as Project Director of Springfield Lakes. Paul was General Manager – Finance at Aveo Ltd, a full service property group
with a principal focus on retirement living and was Chief Financial Officer for Devine Ltd for 5 years, ultimately assuming the
role of Company Secretary. He began his career with Price Waterhouse in the audit Division in Brisbane, followed by tenures
in Hong Kong and London.
DIRECTORS AND MEETINGS ATTENDED
The number of meetings of the Company’s Board of Directors (‘the Board’) and of each Board Committee held during the
year, and the number of meetings attended by each Director were:
Name
Murray Boyte
Sue Renkin
Lachlan McIntosh
Russell Banham
Nirmal Hansra
Directors’
Meetings
Audit & Risk Committee
Meetings
Held1
16
16
16
8
8
Attended
16
16
13
8
8
Held1
6
6
6
5
1
Attended
6
6
4
5
1
Nomination &
Remuneration
Committee Meetings
Held1
Attended
1
1
1
1
1
1
1*
1*
-
-
1 Number of meetings held while a director during the financial year
* Attended by invitation only
16
EGH ANNUAL REPORT 2019
5
17
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6
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Directors’ Report
REMUNERATION REPORT (AUDITED)
This report outlines the remuneration arrangements in place for Eureka’s non-executive directors’, executive directors and
other key management personnel (“KMP”) for the year ended 30 June 2019. The information provided in this remuneration
report has been audited as required by Section 308(3C) of the Corporations Act 2001.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all directors.
This remuneration report has been set out under the following headings:
a) Principles of compensation of key management personnel
b) Details of remuneration
c) Non-executive director remuneration policy
d) Service agreements
e) Relationship between remuneration and Company performance
f) Remuneration consultants
g) Equity Instruments held by Key Management Personnel
h) Loans to/from Key Management Personnel
i) Other transactions with Key Management Personnel
(a) PRINCIPLES OF COMPENSATION OF KEY MANAGEMENT PERSONNEL
Compensation of key management personnel comprises remuneration determined having regard to industry practice and the
need to attract and retain appropriately qualified persons. Compensation aligns executive reward with the achievement of
strategic objectives and the creation of value for shareholders and conforms to the market best practice for remuneration and
reward. The Board of Directors (‘the Board’) ensures that executive reward satisfies the following key criteria for good
remuneration governance practices:
•
•
•
•
competitiveness and reasonableness;
acceptability to shareholders;
performance linkage/alignment of executive compensation, and
transparency.
The Nomination & Remuneration Committee is responsible for determining and reviewing remuneration arrangements for the
Group’s directors and executives and making recommendations to the Board for consideration and approval. The
performance of the Group depends on the quality of its directors and executives. The remuneration philosophy is to attract,
motivate and retain high performance and high quality personnel.
The reward framework is designed to align executive reward to shareholders' interests. The Board considers that it should
seek to enhance shareholders' interests by:
•
•
•
having economic profit as a core component of plan design;
focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering
constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value; and
attracting and retaining high calibre executives.
Additionally, the reward framework should seek to enhance executives' interests by:
•
•
•
rewarding capability and experience;
reflecting competitive reward for contribution to growth in shareholder wealth; and
providing a clear structure for earning rewards.
In accordance with best practice corporate governance, the structure of non-executive director and executive director
remuneration is separate.
Executive remuneration
The Group aims to reward executives based on their position and responsibilities, with a level and mix of remuneration which
has both fixed and variable components.
The executive remuneration framework includes the following components:
•
Fixed remuneration – comprising base salary, superannuation contributions and other benefits, having regard to
comparable market benchmarks. Executives may receive their fixed remuneration in the form of cash or other fringe
benefits where it does not create any additional costs to the Group and provides additional value to the executive;
18
EGH ANNUAL REPORT 2019
7
Eureka Group Holdings Limited and controlled entities
Directors’ Report
REMUNERATION REPORT (AUDITED)
This report outlines the remuneration arrangements in place for Eureka’s non-executive directors’, executive directors and
other key management personnel (“KMP”) for the year ended 30 June 2019. The information provided in this remuneration
report has been audited as required by Section 308(3C) of the Corporations Act 2001.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all directors.
This remuneration report has been set out under the following headings:
a) Principles of compensation of key management personnel
b) Details of remuneration
c) Non-executive director remuneration policy
d) Service agreements
e) Relationship between remuneration and Company performance
f) Remuneration consultants
g) Equity Instruments held by Key Management Personnel
h) Loans to/from Key Management Personnel
i) Other transactions with Key Management Personnel
•
•
•
•
•
•
•
•
•
•
(a) PRINCIPLES OF COMPENSATION OF KEY MANAGEMENT PERSONNEL
Compensation of key management personnel comprises remuneration determined having regard to industry practice and the
need to attract and retain appropriately qualified persons. Compensation aligns executive reward with the achievement of
strategic objectives and the creation of value for shareholders and conforms to the market best practice for remuneration and
reward. The Board of Directors (‘the Board’) ensures that executive reward satisfies the following key criteria for good
remuneration governance practices:
competitiveness and reasonableness;
acceptability to shareholders;
performance linkage/alignment of executive compensation, and
transparency.
The Nomination & Remuneration Committee is responsible for determining and reviewing remuneration arrangements for the
Group’s directors and executives and making recommendations to the Board for consideration and approval. The
performance of the Group depends on the quality of its directors and executives. The remuneration philosophy is to attract,
motivate and retain high performance and high quality personnel.
The reward framework is designed to align executive reward to shareholders' interests. The Board considers that it should
seek to enhance shareholders' interests by:
having economic profit as a core component of plan design;
focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering
constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value; and
attracting and retaining high calibre executives.
Additionally, the reward framework should seek to enhance executives' interests by:
rewarding capability and experience;
reflecting competitive reward for contribution to growth in shareholder wealth; and
providing a clear structure for earning rewards.
In accordance with best practice corporate governance, the structure of non-executive director and executive director
remuneration is separate.
Executive remuneration
has both fixed and variable components.
The Group aims to reward executives based on their position and responsibilities, with a level and mix of remuneration which
The executive remuneration framework includes the following components:
•
Fixed remuneration – comprising base salary, superannuation contributions and other benefits, having regard to
comparable market benchmarks. Executives may receive their fixed remuneration in the form of cash or other fringe
benefits where it does not create any additional costs to the Group and provides additional value to the executive;
Eureka Group Holdings Limited and controlled entities
Directors’ Report
• STI program – an ‘at risk’ component of remuneration where, if individual and Group performance measures are met,
senior executives will be awarded cash bonuses equal to a percentage of their fixed remuneration. Performance
measures will include a financial gateway hurdle and non-financial KPIs. The percentage of fixed remuneration
received as an STI will be capped, but may vary, between individuals and depending on the level of performance
achieved; and
•
LTI program – an ‘at risk’ component of remuneration where senior executives are awarded equity instruments (eg
options and share rights) which are subject to certain performance and service conditions. The number of equity
instruments to be awarded will be determined by the Board having regard to the overall amount of executive
remuneration.
The combination of these comprises the executives’ total remuneration. The Board believes that this remuneration framework
ensures that remuneration outcomes link to company performance and the long-term interests of shareholders.
All executives have detailed job descriptions with identified key performance indicators against which annual reviews are
undertaken.
The executive remuneration for the Executive Chairman was determined by the Nomination & Remuneration Committee,
having regard to the additional responsibilities required in his executive capacity. It comprises fixed remuneration only.
Short term incentives (STIs)
No STIs were awarded to executives during the year following the changes in key management personnel that occurred.
From FY20, senior executives’ entitlement to an STI will be based upon achievement of agreed performance objectives
including:
•
Financial performance
• Operational performance
• Strategy and innovative initiatives
• Workplace health and safety
• Risk mitigation and management.
Actual performance criteria may vary between executives, having regard to their roles and responsibilities.
Long term incentives (LTIs)
Equity instruments may be granted under the Omnibus Equity Plan (OEP) which was adopted on 23 November 2017. Each
equity instrument entitles the participant to subscribe for one ordinary share in the Company. The specific terms of a grant
are set out in an offer from the Company to the executive which contains details of the application price (if any), the expiry
date, the exercise price, the vesting date, any applicable performance conditions and other specific terms.
No LTIs were awarded to executives during the year due to the changes of key management personnel that occurred. The
Board is currently considering the implementation of LTIs for executives for FY20.
During the year, share rights and options granted to the former Chief Financial Officer (Paul Cochrane) lapsed as a result of
his resignation. At 30 June 2019 there were no share rights or options outstanding (2018: 319,375 share rights and 500,000
options).
18
EGH ANNUAL REPORT 2019
7
19
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8
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Directors’ Report
DETAILS OF REMUNERATION
The names of persons who were key management personnel of Eureka at any time during the financial year are shown in the
following table. At the date of this report and during the year, the key management personnel of the Group are:
Name
Directors
Murray Boyte
Sue Renkin
Role
Period in role/s
Executive Chair
24 November 2017 – ongoing
Non-Executive Director
24 November 2017 – ongoing
Lachlan McIntosh
Non-Executive Director
20 July 2009 – ongoing
Russell Banham
Non-Executive Director
21 November 2018 - ongoing
Nirmal Hansra
Executives
Cameron Taylor
Tracey Campion
Paul Cochrane
Non-Executive Director
24 April 2012 – 21 November 2018
Chief Operating Officer
18 March 2019 - ongoing
Chief Financial Officer
21 January 2019 - ongoing
Chief Financial Officer
28 June 2017 – 21 December 2018
Details of the remuneration of the Group's key management personnel for the years ended 30 June 2019 and 30 June 2018
are set out in the following tables:
Short term
Salary/
fees
$
Bonus
$
Post
employment
Super-
annuation
$
Share
based
payments
$
Termin-
ation
benefits
$
Performance
related
%
% of
bonus that
was
achieved
Total
$
30 June 2019
Directors
Murray Boyte1
Sue Renkin
Lachlan McIntosh
Russell Banham2
Nirmal Hansra2
324,082
59,361
65,000
36,600
25,000
Directors Total
510,043
Executives
Tracey Campion2
Cameron Taylor2
Paul Cochrane2
91,540
82,768
139,452
Executives Total
313,760
Total
823,803
-
-
-
-
-
-
-
-
-
-
-
20,531
5,639
-
3,477
-
29,647
8,075
6,084
-
-
-
-
-
-
-
-
13,062
(11,967)
27,221
(11,967)
56,868
(11,967)
-
-
-
-
-
-
-
-
-
-
-
344,613
65,000
65,000
40,077
25,000
539,690
99,615
88,852
140,547
329,014
868,704
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 Murray Boyte’s remuneration includes his chairman’s fee of $120,000 per annum and an additional $216,000 per annum for the period he
is Executive Chair.
2 Key management personnel for part of the year only.
20
EGH ANNUAL REPORT 2019
9
Eureka Group Holdings Limited and controlled entities
Directors’ Report
DETAILS OF REMUNERATION
The names of persons who were key management personnel of Eureka at any time during the financial year are shown in the
following table. At the date of this report and during the year, the key management personnel of the Group are:
Role
Period in role/s
Name
Directors
Murray Boyte
Sue Renkin
Nirmal Hansra
Executives
Cameron Taylor
Tracey Campion
Paul Cochrane
Executive Chair
24 November 2017 – ongoing
Non-Executive Director
24 November 2017 – ongoing
Lachlan McIntosh
Non-Executive Director
20 July 2009 – ongoing
Russell Banham
Non-Executive Director
21 November 2018 - ongoing
Non-Executive Director
24 April 2012 – 21 November 2018
Chief Operating Officer
18 March 2019 - ongoing
Chief Financial Officer
21 January 2019 - ongoing
Chief Financial Officer
28 June 2017 – 21 December 2018
Details of the remuneration of the Group's key management personnel for the years ended 30 June 2019 and 30 June 2018
are set out in the following tables:
Short term
employment
Post
Super-
Share
based
Termin-
ation
Bonus
annuation
payments
benefits
$
$
$
$
Total
$
Salary/
fees
$
Performance
related
%
% of
bonus that
was
achieved
30 June 2019
Directors
Murray Boyte1
324,082
Sue Renkin
Lachlan McIntosh
Russell Banham2
Nirmal Hansra2
59,361
65,000
36,600
25,000
Directors Total
510,043
Executives
Tracey Campion2
Cameron Taylor2
Paul Cochrane2
91,540
82,768
139,452
Executives Total
313,760
Total
823,803
-
-
-
-
-
-
-
-
-
-
-
20,531
5,639
3,477
-
-
29,647
8,075
6,084
-
-
-
-
-
-
-
-
13,062
(11,967)
27,221
(11,967)
56,868
(11,967)
-
-
-
-
-
-
-
-
-
-
-
344,613
65,000
65,000
40,077
25,000
539,690
99,615
88,852
140,547
329,014
868,704
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 Murray Boyte’s remuneration includes his chairman’s fee of $120,000 per annum and an additional $216,000 per annum for the period he
is Executive Chair.
2 Key management personnel for part of the year only.
Eureka Group Holdings Limited and controlled entities
Directors’ Report
Short term
Salary/
fees
$
Bonus
$
Post
employment
Super-
annuation
$
Share
based
payments
$
Termin-
ation
benefits
$
Performance
related
%
% of
bonus that
was
achieved
Total
$
30 June 2018
Directors
Murray Boyte 1, 2
Nirmal Hansra
Robin Levison 2
Lachlan McIntosh
Sue Renkin 2
86,407
60,000
70,000
60,000
31,823
Directors Total
308,230
-
-
-
-
-
-
Executives
Paul Cochrane
Jeff Weigh 2
278,779
77,568
342,744
215,880
Executives Total
621,523
293,448
Total
929,753
293,448
8,209
-
-
-
3,023
11,232
25,924
35,886
61,810
73,042
-
-
-
-
-
-
11,997
-
-
-
-
-
-
-
-
136,667
94,616
60,000
70,000
60,000
34,846
319,462
394,268
731,177
11,997
136,667
1,125,445
11,997
136,667
1,444,907
-
-
-
-
-
-
-
-
-
-
20%
30%
74%
74%8
1 Murray Boyte’s remuneration includes his chairman’s fee of $120,000 per annum and an additional $216,000 per annum for the period he
is Executive Chair.
2 Key management personnel for part of the year only.
(b) NON-EXECUTIVE DIRECTOR REMUNERATION POLICY
Fees and payments to non-executive directors reflect the demands that are made on, and the responsibilities of, the directors.
The Nomination & Remuneration Committee reviews non-executive directors’ fees and payments annually. Non-executive
directors do not receive share options or other incentives.
Non-executive directors’ fees are determined within an aggregate directors’ fee pool limit, which is periodically recommended
for approval by shareholders. The maximum currently stands at $450,000 in aggregate which provides the Board with flexibility
to appoint additional directors to broaden the skill base of the Board collectively.
The annual non-executive directors’ fees paid by the Company are $120,000 per annum for the chairman and $70,000 per
annum for other non-executive Directors. Non-executive directors’ fees were increased from $60,000 per annum with effect
from 1 January 2019. Directors may also be reimbursed for travelling and other expenses incurred in connection with their
Company duties.
(c) SERVICE AGREEMENTS
On appointment to the Board, all non-executive directors enter into a service agreement with the Company in the form of a
letter of appointment. The letter summarises the Board policies and terms, including remuneration, relevant to the office of
director. Remuneration and other terms of employment for the Chief Operating Officer, Chief Financial Officer and other key
management personnel are formalised in service agreements.
The details of these agreements for executive key management personnel are as follows:
Cameron Taylor (Chief Operating Officer)
Agreement Commenced 18 March 2019
Term of the Agreement:
The agreement has no fixed term and may be terminated by either the Company or Mr Taylor with 2 months’ notice or without
notice by the Company in the event of a material breach or misconduct by Mr Taylor.
Details:
Mr Taylor’s remuneration comprises a base salary of $285,000 (inclusive of 9.5% superannuation), additional car allowance
of $25,000 and certain benefits such as car parking, mobile phone expenses and use of laptop. His remuneration also
comprises additional short-term incentives of up to 30% of his base salary. His entitlement to long term incentives is currently
being considered by the Board. Mr Taylor is responsible for management of the Group’s operations and reports to the
Executive Chairman.
EGH ANNUAL REPORT 2019
10
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21
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Directors’ Report
Tracey Campion (Chief Financial Officer)
Agreement Commenced 21 January 2019
Term of the Agreement:
The agreement has no fixed term and may be terminated by either the Company or Ms Campion with 2 months’ notice or
without notice by the Company in the event of a material breach or misconduct by Ms Campion.
Details:
Ms Campion’s remuneration comprises a base salary of $220,000 (inclusive of 9.5% superannuation) and certain benefits
such as car parking, mobile phone expenses and use of laptop. Her remuneration also comprises additional short-term
incentives of up to 20% of her base salary. Her entitlement to long term incentives is currently being considered by the Board.
Ms Campion is responsible for the accounting and finance functions of the Company and its associated companies. Ms
Campion reports to the Executive Chairman.
Paul Cochrane (former Chief Financial Officer)
Agreement Commenced 28 June 2017 and ceased on 21 December 2018
Term of the Agreement:
The agreement had no fixed term and was able to be terminated by either the Company or Mr Cochrane with 3 months’ notice
or without notice by the Company in the event of a material breach or misconduct by Mr Cochrane.
Details:
Mr Cochrane’s remuneration comprised a base salary of $275,000 plus 9.5% superannuation and certain benefits such as
car parking, mobile phone expenses and use of laptop. His remuneration also comprised additional short-term incentives
equal to 35% of his base salary and long-term incentive equal to 35% of his base salary. In addition, the Board had approved
that in the event of termination of employment arising from the change of control during the 3 years from the date of
employment, the Company would pay 6 months of fixed remuneration. Mr Cochrane was responsible for the accounting and
finance functions of the Company and its associated companies.
(d) RELATIONSHIP BETWEEN REMUNERATION AND COMPANY PERFORMANCE
The following table shows the revenue, net profit before tax, EBITDA1, earnings per share, share price and dividend per share
for the past 5 years of the Company.
Total Revenue and Income $’000
Net Profit/(loss) before tax $’000
EBITDA1 prior to asset revaluations $’000
Earnings per share (cents per share)
Share price at year end
Dividend per share
2019
25,786
6,794
7,832
2.95
0.26
0.00
2018
22,574
(276)
7,054
(0.12)
0.28
0.00
2017
24,053
6,538
8,379
2.84
0.37
0.00
2016
19,106
10,467
7,977
5.19
0.79
0.00
2015
10,851
3,105
2,956
2.24
0.51
0.00
1
EBITDA (Earnings before interest, tax, depreciation and amortisation) is an unaudited non-IFRS measure however, the Directors believe
that it is a readily calculated measure that has broad acceptance and is used by regular users of published financial statements as proxy for
overall operating performance. EBITDA presented has been calculated from amounts disclosed in the financial statements.
(e) REMUNERATION CONSULTANTS
The Group did not engage any remuneration consultants during the 2019 financial year.
(f) EQUITY INSTRUMENTS HELD BY KEY MANAGEMENT PERSONNEL
Shares held
The numbers of securities held during the financial year by each director and other key management personnel of the Group,
including their personally related parties, are set out below. There were no shares granted during the reporting period as
compensation.
22
EGH ANNUAL REPORT 2019
11
Eureka Group Holdings Limited and controlled entities
Directors’ Report
Tracey Campion (Chief Financial Officer)
Agreement Commenced 21 January 2019
Term of the Agreement:
The agreement has no fixed term and may be terminated by either the Company or Ms Campion with 2 months’ notice or
without notice by the Company in the event of a material breach or misconduct by Ms Campion.
Details:
Ms Campion’s remuneration comprises a base salary of $220,000 (inclusive of 9.5% superannuation) and certain benefits
such as car parking, mobile phone expenses and use of laptop. Her remuneration also comprises additional short-term
incentives of up to 20% of her base salary. Her entitlement to long term incentives is currently being considered by the Board.
Ms Campion is responsible for the accounting and finance functions of the Company and its associated companies. Ms
Campion reports to the Executive Chairman.
Paul Cochrane (former Chief Financial Officer)
Agreement Commenced 28 June 2017 and ceased on 21 December 2018
The agreement had no fixed term and was able to be terminated by either the Company or Mr Cochrane with 3 months’ notice
or without notice by the Company in the event of a material breach or misconduct by Mr Cochrane.
Term of the Agreement:
Details:
Mr Cochrane’s remuneration comprised a base salary of $275,000 plus 9.5% superannuation and certain benefits such as
car parking, mobile phone expenses and use of laptop. His remuneration also comprised additional short-term incentives
equal to 35% of his base salary and long-term incentive equal to 35% of his base salary. In addition, the Board had approved
that in the event of termination of employment arising from the change of control during the 3 years from the date of
employment, the Company would pay 6 months of fixed remuneration. Mr Cochrane was responsible for the accounting and
finance functions of the Company and its associated companies.
(d) RELATIONSHIP BETWEEN REMUNERATION AND COMPANY PERFORMANCE
The following table shows the revenue, net profit before tax, EBITDA1, earnings per share, share price and dividend per share
for the past 5 years of the Company.
Total Revenue and Income $’000
Net Profit/(loss) before tax $’000
EBITDA1 prior to asset revaluations $’000
Earnings per share (cents per share)
Share price at year end
Dividend per share
2019
25,786
6,794
7,832
2.95
0.26
0.00
2018
22,574
(276)
7,054
(0.12)
0.28
0.00
2017
24,053
6,538
8,379
2.84
0.37
0.00
2016
19,106
10,467
7,977
5.19
0.79
0.00
2015
10,851
3,105
2,956
2.24
0.51
0.00
1
EBITDA (Earnings before interest, tax, depreciation and amortisation) is an unaudited non-IFRS measure however, the Directors believe
that it is a readily calculated measure that has broad acceptance and is used by regular users of published financial statements as proxy for
overall operating performance. EBITDA presented has been calculated from amounts disclosed in the financial statements.
(e) REMUNERATION CONSULTANTS
The Group did not engage any remuneration consultants during the 2019 financial year.
(f) EQUITY INSTRUMENTS HELD BY KEY MANAGEMENT PERSONNEL
Shares held
compensation.
The numbers of securities held during the financial year by each director and other key management personnel of the Group,
including their personally related parties, are set out below. There were no shares granted during the reporting period as
Eureka Group Holdings Limited and controlled entities
Directors’ Report
Balance
1 July 2018
Shares
acquired
Ceased
employment
Shares
disposed
Balance
30 June 2019
Directors
Murray Boyte
Sue Renkin
-
-
Lachlan McIntosh
11,916,166
Russell Banham
Nirmal Hansra
Executives
Cameron Taylor
Tracey Campion
Paul Cochrane
Total
-
839,834
-
-
-
250,000
-
-
-
-
-
-
-
-
-
-
-
(839,834)
-
-
-
-
-
250,000
-
(5,216,028)
6,700,138
-
-
-
-
-
-
-
-
-
-
12,756,000
250,000
(839,834)
(5,216,028)
6,950,138
Options and share rights held
There were no options or share rights granted as compensation to key management personnel during the year.
No options vested during the financial year.
During the year, 319,375 share rights ($55,138 fair value at grant date) and 500,000 options ($7,210 fair value at grant date)
granted to the former Chief Financial Officer (Paul Cochrane) lapsed as a result of his resignation.
Value of options
The movement during the reporting period, by value, of options over ordinary shares in the Company held by each key
management personnel is detailed below.
Options granted
Paul Cochrane
Value of share rights
Value of options
granted in the year
Value of options
exercised in year
Value of options lapsed
in the year
-
-
-
-
($7,210)
($7,210)
The movement during the reporting period, by value, of share rights in the Company held by each key management
personnel is detailed below.
Share rights granted
Paul Cochrane
Value of share rights
granted in the year
Value of share rights
exercised in year
Value of share rights
lapsed in the year
-
-
-
-
($55,138)
($55,138)
22
EGH ANNUAL REPORT 2019
11
23
EGH ANNUAL REPORT 2019
12
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Directors’ Report
Reconciliation of options and share rights held by key management personnel
The table below shows a reconciliation of options held by each KMP during the financial year.
Balance at start of
year
Balance at end of year
Vested Unvested
Granted as
compensation
Vested
Exercised
Forfeited
Vested and
exercisable
Unvested
Paul Cochrane
Total
-
-
500,000
500,000
-
-
-
-
-
-
(500,000)
(500,000)
-
-
-
-
The table below shows how many share rights were granted, vested and forfeited during the year.
Balance at start
of year
Granted during
year
Vested
Forfeited
Balance at end
of year
Paul Cochrane
Total
319,375
319,375
-
-
-
-
(319,375)
(319,375)
-
-
(g) LOANS TO/FROM KEY MANAGEMENT PERSONNEL
As part of the settlement and re-negotiated terms that were agreed with respect to the Group’s interests in Couran Cove on
South Stradbroke Island, a loan of $0.35 million was assumed by Lachlan McIntosh in his personal capacity and is due for
repayment on 31 December 2019. Interest has accrued at an average rate of 8.96% per annum and repayments of $0.06
million were received during the year. The balance of the loan receivable at 30 June 2019 was $0.31 million.
Mr McIntosh is also a guarantor of the West Cabin Loan. The balance of the loan receivable at 30 June 2019 was $0.32
million.
Further details about these loans are contained in Note 28.
There were no other loans to any director or other key management personnel at any time during the year and prior year.
(h) OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL AND THEIR RELATED PARTIES DURING THE
YEAR
Griffith Scenic Village Pty Ltd
Griffith Scenic Village Pty Ltd, an entity associated with Lachlan McIntosh, paid the Group management fees of $7,038 on
commercial terms (2018: $6,263). As at 30 June 2019 the amount outstanding from Griffith Scenic Village Pty Ltd was $nil
(2018: $nil).
Griffith Scenic Village Pty Ltd, an entity associated with Lachlan McIntosh, was paid $22,178 for a manager’s unit rental fees
on commercial terms (2018: $22,178). As at 30 June 2019 the amount outstanding to Griffith Scenic Village Pty Ltd was $nil
(2018: $nil).
Leisure Living Gladstone Pty Ltd
Leisure Living Gladstone Pty Ltd, an entity associated with Lachlan McIntosh, paid the Group management fees of $16,411
on commercial terms (2018: $14,846). As at 30 June 2019 the amount outstanding from Leisure Living Gladstone Pty Ltd was
$nil (2018: $nil).
Leisure Living Gladstone Pty Ltd, an entity associated with Lachlan McIntosh, was paid $29,229 for a manager’s unit rental
fees on commercial terms (2018: $29,229). As at 30 June 2019 the amount outstanding to Leisure Living Gladstone Pty Ltd
was $nil (2018: $nil).
22 Resolution Pty Ltd
22 Resolution Pty Ltd, an entity associated with Lachlan McIntosh, earned $33,000 in project consulting fees (2018: $nil). At
30 June 2019, the amount outstanding to Lachlan McIntosh was $33,000 (2018: $nil).
This concludes the remuneration report, which has been audited.
24
EGH ANNUAL REPORT 2019
13
Eureka Group Holdings Limited and controlled entities
Directors’ Report
Eureka Group Holdings Limited and controlled entities
Directors’ Report
Reconciliation of options and share rights held by key management personnel
SHARES UNDER OPTION & PERFORMANCE RIGHTS
The table below shows a reconciliation of options held by each KMP during the financial year.
There were no unissued ordinary shares of Eureka Group Holdings Limited under option and no performance rights on issue
as at the date of this report.
Balance at start of
year
Vested Unvested
compensation
Vested
Exercised
Forfeited
Granted as
Balance at end of year
Vested and
exercisable
Unvested
Paul Cochrane
Total
-
-
500,000
500,000
-
-
-
-
-
-
(500,000)
(500,000)
-
-
-
-
The table below shows how many share rights were granted, vested and forfeited during the year.
Balance at start
Granted during
of year
year
Vested
Forfeited
Balance at end
of year
Paul Cochrane
Total
319,375
319,375
-
-
-
-
(319,375)
(319,375)
-
-
(g) LOANS TO/FROM KEY MANAGEMENT PERSONNEL
As part of the settlement and re-negotiated terms that were agreed with respect to the Group’s interests in Couran Cove on
South Stradbroke Island, a loan of $0.35 million was assumed by Lachlan McIntosh in his personal capacity and is due for
repayment on 31 December 2019. Interest has accrued at an average rate of 8.96% per annum and repayments of $0.06
million were received during the year. The balance of the loan receivable at 30 June 2019 was $0.31 million.
Mr McIntosh is also a guarantor of the West Cabin Loan. The balance of the loan receivable at 30 June 2019 was $0.32
Further details about these loans are contained in Note 28.
There were no other loans to any director or other key management personnel at any time during the year and prior year.
(h) OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL AND THEIR RELATED PARTIES DURING THE
Griffith Scenic Village Pty Ltd
Griffith Scenic Village Pty Ltd, an entity associated with Lachlan McIntosh, paid the Group management fees of $7,038 on
commercial terms (2018: $6,263). As at 30 June 2019 the amount outstanding from Griffith Scenic Village Pty Ltd was $nil
Griffith Scenic Village Pty Ltd, an entity associated with Lachlan McIntosh, was paid $22,178 for a manager’s unit rental fees
on commercial terms (2018: $22,178). As at 30 June 2019 the amount outstanding to Griffith Scenic Village Pty Ltd was $nil
million.
YEAR
(2018: $nil).
(2018: $nil).
Leisure Living Gladstone Pty Ltd
Leisure Living Gladstone Pty Ltd, an entity associated with Lachlan McIntosh, paid the Group management fees of $16,411
on commercial terms (2018: $14,846). As at 30 June 2019 the amount outstanding from Leisure Living Gladstone Pty Ltd was
$nil (2018: $nil).
was $nil (2018: $nil).
22 Resolution Pty Ltd
22 Resolution Pty Ltd, an entity associated with Lachlan McIntosh, earned $33,000 in project consulting fees (2018: $nil). At
30 June 2019, the amount outstanding to Lachlan McIntosh was $33,000 (2018: $nil).
This concludes the remuneration report, which has been audited.
INDEMNIFICATION AND INSURANCE OF OFFICERS
During or since the end of the financial year, the Company has indemnified the directors and executives of the Company for
costs incurred, in their capacity as a director or executive, for which they may be held personally liable, except where there is
a lack of good faith.
During the financial year, the Group paid a premium in respect of a contract to insure the directors and executives of the
Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure
of the nature of the liability and the amount of the premium.
INDEMNIFICATION AND INSURANCE OF AUDITORS
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young Australia, as part of the
terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount).
No payment has been made to indemnify Ernst & Young during or since the financial year.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the Company or intervene in any proceedings to which the Company is a party for the purposes of taking responsibility on
behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during
the year.
NON-AUDIT SERVICES
Ernst & Young were engaged to review and advise the Group on GST related matters during the year. Details of the amounts
paid or payable to the auditor for non-audit services provided during the year are set out in Note 32.
The Directors 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 of the opinion that the services as disclosed in Note 32 do 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 they do not impact the
impartiality and objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants.
OFFICERS OF THE COMPANY WHO ARE FORMER PARTNERS OF ERNST & YOUNG
No officers of the Company were partners of Ernst & Young at the time they undertook the audit of the Company.
ROUNDING OF AMOUNTS
The amounts contained in the financial and directors’ report have been rounded to the nearest $1,000 (where rounding is
applicable) where noted ($’000) 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 this legislative instrument applies.
AUDITOR’S INDEPENDENCE DECLARATION
Leisure Living Gladstone Pty Ltd, an entity associated with Lachlan McIntosh, was paid $29,229 for a manager’s unit rental
fees on commercial terms (2018: $29,229). As at 30 June 2019 the amount outstanding to Leisure Living Gladstone Pty Ltd
A copy of the auditors’ independence declaration as required under section 307C of the Corporations Act 2001 is set out on
page 81.
79.
24
EGH ANNUAL REPORT 2019
13
25
EGH ANNUAL REPORT 2019
14
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Directors’ Report
AUDITOR
Ernst & Young continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of the Directors, pursuant to section 298(2)(a) of the Corporations Act
2001.
On behalf of the directors
Murray Boyte
Executive Chair
Dated in Brisbane this 30th day of August 2019.
26
EGH ANNUAL REPORT 2019
15
Ernst & Young continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of the Directors, pursuant to section 298(2)(a) of the Corporations Act
Eureka Group Holdings Limited and controlled entities
Directors’ Report
AUDITOR
2001.
On behalf of the directors
Murray Boyte
Executive Chair
Dated in Brisbane this 30th day of August 2019.
Eureka Group Holdings Limited and controlled entities
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2019
Note
30 June 2019
$’000
30 June 2018
$’000
Rental income
Catering income
Service and caretaking fees
Revenue from asset sales - inventory
Finance income
Other income
Property expenses
Cost of sales - inventory
Employee expenses
Finance costs
Marketing expenses
Depreciation & amortisation
Other expenses
Net gain/(loss) on change in fair value of:
Investment property
Other assets
Impairment of Couran Cove assets
Share of profit of a joint venture
Profit/(loss) before income tax expense
Income tax expense
Profit/(loss) after income tax expense
3
3
3
3
3
4
4
14
28
13
5
Other comprehensive income/(loss)
Items that may be reclassified to profit or loss
Items that will not be reclassified to profit or loss
Other comprehensive income/(loss) for the year, net of tax
Total comprehensive income/(loss) for the year
Basic and diluted earnings per share (cents per share)
25
15,847
4,257
3,132
2,550
57
101
(11,658)
(2,550)
(2,191)
(2,766)
(187)
(225)
(2,238)
2,253
(300)
-
712
6,794
-
6,794
-
-
-
6,794
2.95
15,674
4,274
2,626
-
41
597
(11,910)
-
(1,884)
(2,753)
(136)
(251)
(2,147)
(1,439)
(253)
(2,887)
172
(276)
-
(276)
-
-
-
(276)
(0.12)
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes.
26
EGH ANNUAL REPORT 2019
15
27
EGH ANNUAL REPORT 2019
1
6
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Consolidated Statement of Financial Position
AS AT 30 JUNE 2019
30 June 2019
$’000
30 June 2018
$’000
Note
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventory
Other assets
Loans receivable
Non-current assets held for sale
Total current assets
Non-Current Assets
Loans receivable
Joint Venture Investment
Other assets
Investment property
Property, plant and equipment
Intangible assets
Total non-current assets
Total Assets
Current Liabilities
Trade and other payables
Other financial liabilities
Provisions
Total current liabilities
Non-current liabilities
Other financial liabilities
Provisions
Total non-current liabilities
Total Liabilities
Net Assets
Equity
Share capital
Equity reserve
Accumulated losses
Total Equity
21
6
7
9
11
8
11
13
9
14
15
16
17
19
18
19
18
20
20
3,060
391
9,215
1,464
698
14,828
519
15,347
414
4,661
1,237
105,406
659
5,348
117,725
1,986
142
11,783
1,469
2,332
17,712
1,750
19,462
456
4,672
1,237
100,756
682
6,035
113,838
133,072
133,300
1,672
2,372
416
4,460
47,118
12
47,130
2,709
163
399
3,271
55,320
9
55,329
51,590
58,600
81,482
74,700
94,352
-
(12,870)
81,482
94,352
12
(19,664)
74,700
The consolidated statement of financial position is to be read in conjunction with the accompanying notes.
28
EGH ANNUAL REPORT 2019
17
Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Consolidated Statement of Financial Position
AS AT 30 JUNE 2019
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2019
30 June 2019
30 June 2018
$’000
$’000
Note
Note
30 June 2019
$’000
30 June 2018
$’000
Cash Flows from Operating Activities
Receipts from customers
Payments to suppliers & employees
Interest received
Interest paid
Net Cash provided by Operating Activities
21(b)
Cash Flows from Investing Activities
Payments for additions to investment property
Payments for additions to inventory
Payments for property, plant & equipment
Payments for Joint Venture investment
Proceeds from sale of assets held for sale
Proceeds from sale of inventory
Proceeds from sale of investment property
Proceeds from the sale of intangible assets
Proceeds from the sale of property, plant & equipment
Proceeds from repayments of loans provided
Payment of residential obligation loans
Net Cash provided by/(used) in Investing Activities
Cash Flows from Financing Activities
Proceeds from borrowings
Repayment of borrowings
Payments of transaction costs related to borrowings
Payments for share issue and buy back transaction costs
Net Cash provided by/(used in) Financing Activities
23,925
(17,150)
3
(2,033)
4,745
(1,589)
(1,270)
(61)
-
1,100
2,550
-
606
4
1,660
-
3,000
-
(6,605)
(66)
-
(6,671)
24,439
(17,456)
8
(2,777)
4,214
(8,704)
(1,688)
(30)
(4,500)
2,200
160
1,335
312
-
335
(832)
(11,412)
9,425
(4,559)
(75)
(2)
4,789
Net increase/(decrease) in cash and cash equivalents
1,074
(2,409)
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
21(a)
1,986
3,060
4,395
1,986
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventory
Other assets
Loans receivable
Non-current assets held for sale
Total current assets
Non-Current Assets
Loans receivable
Joint Venture Investment
Other assets
Investment property
Property, plant and equipment
Intangible assets
Total non-current assets
Total Assets
Current Liabilities
Trade and other payables
Other financial liabilities
Provisions
Total current liabilities
Non-current liabilities
Other financial liabilities
Provisions
Total non-current liabilities
Total Liabilities
Net Assets
Equity
Share capital
Equity reserve
Accumulated losses
Total Equity
21
6
7
9
11
8
11
13
9
14
15
16
17
19
18
19
18
20
20
3,060
391
9,215
1,464
698
14,828
519
15,347
414
4,661
1,237
105,406
659
5,348
117,725
1,672
2,372
416
4,460
47,118
12
47,130
1,986
142
11,783
1,469
2,332
17,712
1,750
19,462
456
4,672
1,237
100,756
682
6,035
113,838
2,709
163
399
3,271
55,320
9
55,329
133,072
133,300
51,590
58,600
81,482
74,700
94,352
-
(12,870)
81,482
94,352
12
(19,664)
74,700
The consolidated statement of financial position is to be read in conjunction with the accompanying notes.
The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.
28
EGH ANNUAL REPORT 2019
17
29
EGH ANNUAL REPORT 2019
18
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2019
Share Capital
$’000
Note
Accumulated
Losses
$’000
Equity
Reserves
$’000
Total
$’000
For the year ended 30 June 2019
Balance at 1 July 2018
94,352
(19,664)
12
74,700
Profit for the year
Total comprehensive income for the year
Transactions with owners in their capacity as
owners:
Cancellation of share rights and options
Balance at 30 June 2019
20
-
-
-
6,794
6,794
-
94,352
(12,870)
-
-
6,794
6,794
(12)
-
(12)
81,482
For the year ended 30 June 2018
Balance at 1 July 2017
94,255
(19,388)
Loss for the year
Total comprehensive loss for the year
Transactions with owners in their capacity as
owners:
Shares issued during the year
Share based payment
Capital raising costs
Balance at 30 June 2018
-
-
100
-
(3)
(276)
(276)
-
-
-
94,352
(19,664)
20
20
20
-
-
-
74,867
(276)
(276)
-
12
-
12
100
12
(3)
74,700
The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.
30
EGH ANNUAL REPORT 2019
19
Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Share Capital
Note
$’000
Accumulated
Losses
$’000
Equity
Reserves
$’000
Total
$’000
For the year ended 30 June 2019
Balance at 1 July 2018
94,352
(19,664)
12
74,700
Profit for the year
Total comprehensive income for the year
6,794
6,794
-
-
6,794
6,794
Transactions with owners in their capacity as
owners:
Cancellation of share rights and options
20
Balance at 30 June 2019
94,352
(12,870)
Balance at 1 July 2017
94,255
(19,388)
74,867
-
-
-
(276)
(276)
(276)
(276)
For the year ended 30 June 2018
Loss for the year
Total comprehensive loss for the year
Transactions with owners in their capacity as
owners:
Shares issued during the year
Share based payment
Capital raising costs
Balance at 30 June 2018
20
20
20
100
-
(3)
94,352
(19,664)
12
-
-
12
100
12
(3)
74,700
-
-
-
-
-
-
-
-
-
1. INTRODUCTION
The financial statements cover Eureka Group Holdings Limited and its subsidiaries (“EGH” or the “Group” or the
“Consolidated Entity”) for the year ended 30 June 2019. Eureka Group Holdings Limited is a company incorporated and
domiciled in Australia. EGH is a for-profit entity for the purposes of preparing the financial statements.
The Group’s operations and principal activities comprise ownership and property management of senior independent living
communities.
The financial report is presented in Australian dollars. The company is of a kind referred to in ASIC Corporations (Rounding
in Financial/Directors’ Reports) Instrument 2016/191’, issued by the Australian Securities and Investments Commission,
relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that instrument to the nearest
thousand dollars, or in certain cases, the nearest dollar.
The registered office of the company is Suite 2D 7 Short St, Southport QLD 4215
The financial report was authorised for issue on 30 August 2019 by the Directors.
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2. SUMMARY OF ACCOUNTING POLICIES
BASIS OF PREPARATION
The principal accounting policies adopted by the Group, comprising the parent entity Eureka Group Holdings Limited and
its subsidiaries, are stated in order to assist in the general understanding of the financial report. These policies have been
consistently applied to all the years presented, unless otherwise stated.
The consolidated financial report is a general purpose financial report which has been prepared in accordance with
Australian Accounting Standards and the Corporations Act 2001.
Compliance with IFRS
The consolidated financial report of EGH complies with International Financial Reporting Standards (IFRSs) and
interpretations adopted by the International Accounting Standards Board (IASB).
New, revised and amended Accounting Standards adopted by the Group
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board that are mandatory for the current period. The adoption of these Accounting
Standards and Interpretations did not have a significant impact on the financial performance or position of the Group.
AASB 15 Revenue from Contracts with Customers
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard replaces all
existing revenue recognition accounting standards and interpretations. The core principle of the standard is that an entity
will recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the
consideration to which the entity expects to be entitled in exchange for those goods or services. For goods, the
performance obligation is satisfied when the customer obtains control of the goods. For services, the performance
obligation is satisfied when the service has been provided, typically for promises to transfer services to customers. For
performance obligations satisfied over time, an entity would select an appropriate measure of progress to determine how
much revenue should be recognised as the performance obligation is satisfied. Sufficient quantitative and qualitative
disclosures are required to enable users to understand the contracts with customers; the significant judgments made in
applying the guidance to those contracts; and any assets recognised from the costs to obtain or fulfil a contract with a
customer.
The Group adopted AASB 15 on 1 July 2018, using the full retrospective method of adoption. The effect of adopting AASB
15 was not material for the Group:
•
In respect to revenue from contracts with residents for the provision of catering services, revenue recognition
generally includes only one performance obligation. The Group concluded that the revenue from the provision
of catering services should be recognised at a point in time when services are provided to the resident.
Adoption of AASB 15 did not have an impact on timing, measurement and recognition of revenue.
Eureka Group Holdings Limited and controlled entities
The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.
30
EGH ANNUAL REPORT 2019
19
•
•
In respect to revenue from the provision of support services, revenue is recognized over time. The customer
simultaneously receives and consumes the benefits provided by the entity. Adoption of AASB 15 did not have
an impact on timing, measurement and recognition of revenue.
2
In respect to revenue from rental of units in owned villages, AASB 117 Leases rather than AASB 15 is the
applicable accounting standard, and therefore the adoption of AASB 15 did not have an impact on the timing and
recognition of revenue.
EGH ANNUAL REPORT 2019
31
0
•
Notes to the Financial Statements
In respect to revenue from management and caretaking services, revenue is recognized over time. The
customer simultaneously receives and consumes the benefits provided by the entity. Adoption of AASB 15 did
not have an impact on timing, measurement and recognition of revenue.
FOR THE YEAR ENDED 30 JUNE 2019
AASB 9 Financial Instruments
AASB 9 Financial Instruments replaces AASB 139 Financial Instruments: Recognition and Measurement for reporting
beginning on or after 1 January 2018 bringing together all three aspects of the accounting for financial instruments:
classification and measurement; impairment; and hedge accounting.
The Group adopted AASB 9 on 1 July 2018 using the modified retrospective method of adoption. The effect of adopting
AASB 9 was not material for the Group.
Current and non-current financial assets and liabilities within the scope of AASB 9 are classified as fair value through profit
or loss, fair value through other comprehensive income or amortised cost. The Group determines the classification of its
financial assets and liabilities at initial recognition with the classification depending on the purpose for which the asset or
liability was acquired or issued. Financial assets and liabilities are initially recognised at fair value plus directly attributable
transaction costs, unless their classification is at fair value through profit or loss. They are subsequently measured at fair
value or amortised cost using the effective interest method.
The Group’s financial assets at amortised cost includes trade and other receivables and loan receivables. The principal
related to trade and other receivables is deemed to be the amount resulting from the transaction in the scope of AASB 15.
The Group determines that trade receivables do not include a significant financing component and hence, there is no
interest to be recognised.
Under AASB 9, the Group’s impairment allowances are now to be based on a forward-looking expected credit loss (ECL)
approach. AASB 9 requires the Group to record an allowance for ECLs for all loans not held at FVPL. The Group’s
previously applied impairment assessment which incorporated historical experiences, resulted in similar impairment
expectations under the forward looking ECL approach.
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of available-for-sale financial assets, financial assets and liabilities at fair value through profit or loss,
investment properties and derivative financial instruments.
CONSOLIDATION
This financial report covers the consolidated entity consisting of Eureka Group Holdings Limited and its controlled entities.
Eureka Group Holdings Limited is the ultimate parent entity.
The consolidated financial statements incorporate the assets and liabilities of all entities controlled by Eureka Group
Holdings Limited as at 30 June 2019 and the results of all controlled entities for the year then ended. The effects of all
transactions between entities in the Group are eliminated in full.
Subsidiaries are entities controlled by the Company. Control exists when the Company 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. In assessing control, potential voting rights that presently are exercisable or convertible are
taken into account. The financial statements of subsidiaries are included in the financial report from the date that control
commences until the date that control ceases.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The Group
recognises the fair value of the consideration received and the fair value of any investment retained together with any gain
or loss in profit or loss.
BUSINESS COMBINATIONS
The acquisition method of accounting is used to account for business combinations regardless of whether equity
instruments or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments
issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest
in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value
or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to
profit or loss.
EGH ANNUAL REPORT 2019
21
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
•
•
•
•
FOR THE YEAR ENDED 30 JUNE 2019
In respect to revenue from the provision of support services, revenue is recognized over time. The customer
simultaneously receives and consumes the benefits provided by the entity. Adoption of AASB 15 did not have
an impact on timing, measurement and recognition of revenue.
In respect to revenue from the provision of support services, revenue is recognized over time. The customer
In respect to revenue from rental of units in owned villages, AASB 117 Leases rather than AASB 15 is the
simultaneously receives and consumes the benefits provided by the entity. Adoption of AASB 15 did not have
applicable accounting standard, and therefore the adoption of AASB 15 did not have an impact on the timing and
an impact on timing, measurement and recognition of revenue.
recognition of revenue.
In respect to revenue from rental of units in owned villages, AASB 117 Leases rather than AASB 15 is the
applicable accounting standard, and therefore the adoption of AASB 15 did not have an impact on the timing and
recognition of revenue.
AASB 9 Financial Instruments
AASB 9 Financial Instruments replaces AASB 139 Financial Instruments: Recognition and Measurement for reporting
beginning on or after 1 January 2018 bringing together all three aspects of the accounting for financial instruments:
AASB 9 Financial Instruments
classification and measurement; impairment; and hedge accounting.
AASB 9 Financial Instruments replaces AASB 139 Financial Instruments: Recognition and Measurement for reporting
beginning on or after 1 January 2018 bringing together all three aspects of the accounting for financial instruments:
The Group adopted AASB 9 on 1 July 2018 using the modified retrospective method of adoption. The effect of adopting
classification and measurement; impairment; and hedge accounting.
AASB 9 was not material for the Group.
The Group adopted AASB 9 on 1 July 2018 using the modified retrospective method of adoption. The effect of adopting
Current and non-current financial assets and liabilities within the scope of AASB 9 are classified as fair value through profit
AASB 9 was not material for the Group.
or loss, fair value through other comprehensive income or amortised cost. The Group determines the classification of its
financial assets and liabilities at initial recognition with the classification depending on the purpose for which the asset or
Current and non-current financial assets and liabilities within the scope of AASB 9 are classified as fair value through profit
liability was acquired or issued. Financial assets and liabilities are initially recognised at fair value plus directly attributable
or loss, fair value through other comprehensive income or amortised cost. The Group determines the classification of its
transaction costs, unless their classification is at fair value through profit or loss. They are subsequently measured at fair
financial assets and liabilities at initial recognition with the classification depending on the purpose for which the asset or
value or amortised cost using the effective interest method.
liability was acquired or issued. Financial assets and liabilities are initially recognised at fair value plus directly attributable
transaction costs, unless their classification is at fair value through profit or loss. They are subsequently measured at fair
The Group’s financial assets at amortised cost includes trade and other receivables and loan receivables. The principal
value or amortised cost using the effective interest method.
related to trade and other receivables is deemed to be the amount resulting from the transaction in the scope of AASB 15.
The Group determines that trade receivables do not include a significant financing component and hence, there is no
The Group’s financial assets at amortised cost includes trade and other receivables and loan receivables. The principal
interest to be recognised.
related to trade and other receivables is deemed to be the amount resulting from the transaction in the scope of AASB 15.
The Group determines that trade receivables do not include a significant financing component and hence, there is no
Under AASB 9, the Group’s impairment allowances are now to be based on a forward-looking expected credit loss (ECL)
interest to be recognised.
approach. AASB 9 requires the Group to record an allowance for ECLs for all loans not held at FVPL. The Group’s
previously applied impairment assessment which incorporated historical experiences, resulted in similar impairment
Under AASB 9, the Group’s impairment allowances are now to be based on a forward-looking expected credit loss (ECL)
expectations under the forward looking ECL approach.
approach. AASB 9 requires the Group to record an allowance for ECLs for all loans not held at FVPL. The Group’s
previously applied impairment assessment which incorporated historical experiences, resulted in similar impairment
Historical cost convention
expectations under the forward looking ECL approach.
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of available-for-sale financial assets, financial assets and liabilities at fair value through profit or loss,
Historical cost convention
investment properties and derivative financial instruments.
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of available-for-sale financial assets, financial assets and liabilities at fair value through profit or loss,
CONSOLIDATION
investment properties and derivative financial instruments.
This financial report covers the consolidated entity consisting of Eureka Group Holdings Limited and its controlled entities.
CONSOLIDATION
Eureka Group Holdings Limited is the ultimate parent entity.
This financial report covers the consolidated entity consisting of Eureka Group Holdings Limited and its controlled entities.
The consolidated financial statements incorporate the assets and liabilities of all entities controlled by Eureka Group
Eureka Group Holdings Limited is the ultimate parent entity.
Holdings Limited as at 30 June 2019 and the results of all controlled entities for the year then ended. The effects of all
transactions between entities in the Group are eliminated in full.
The consolidated financial statements incorporate the assets and liabilities of all entities controlled by Eureka Group
Holdings Limited as at 30 June 2019 and the results of all controlled entities for the year then ended. The effects of all
Subsidiaries are entities controlled by the Company. Control exists when the Company is exposed to or has rights to
transactions between entities in the Group are eliminated in full.
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. In assessing control, potential voting rights that presently are exercisable or convertible are
Subsidiaries are entities controlled by the Company. Control exists when the Company is exposed to or has rights to
taken into account. The financial statements of subsidiaries are included in the financial report from the date that control
variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct
commences until the date that control ceases.
the activities of the entity. In assessing control, potential voting rights that presently are exercisable or convertible are
taken into account. The financial statements of subsidiaries are included in the financial report from the date that control
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
commences until the date that control ceases.
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The Group
recognises the fair value of the consideration received and the fair value of any investment retained together with any gain
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
or loss in profit or loss.
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The Group
recognises the fair value of the consideration received and the fair value of any investment retained together with any gain
or loss in profit or loss.
BUSINESS COMBINATIONS
The acquisition method of accounting is used to account for business combinations regardless of whether equity
BUSINESS COMBINATIONS
instruments or other assets are acquired.
The acquisition method of accounting is used to account for business combinations regardless of whether equity
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments
instruments or other assets are acquired.
issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest
in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments
or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to
issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest
profit or loss.
in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value
or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to
profit or loss.
EGH ANNUAL REPORT 2019
21
32
EGH ANNUAL REPORT 2019
21
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
Eureka Group Holdings Limited and controlled entities
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the Financial Statements
•
•
•
•
In respect to revenue from the provision of support services, revenue is recognized over time. The customer
FOR THE YEAR ENDED 30 JUNE 2019
simultaneously receives and consumes the benefits provided by the entity. Adoption of AASB 15 did not have
an impact on timing, measurement and recognition of revenue.
In respect to revenue from the provision of support services, revenue is recognized over time. The customer
In respect to revenue from rental of units in owned villages, AASB 117 Leases rather than AASB 15 is the
simultaneously receives and consumes the benefits provided by the entity. Adoption of AASB 15 did not have
applicable accounting standard, and therefore the adoption of AASB 15 did not have an impact on the timing and
an impact on timing, measurement and recognition of revenue.
recognition of revenue.
In respect to revenue from rental of units in owned villages, AASB 117 Leases rather than AASB 15 is the
applicable accounting standard, and therefore the adoption of AASB 15 did not have an impact on the timing and
AASB 9 Financial Instruments
recognition of revenue.
AASB 9 Financial Instruments replaces AASB 139 Financial Instruments: Recognition and Measurement for reporting
beginning on or after 1 January 2018 bringing together all three aspects of the accounting for financial instruments:
classification and measurement; impairment; and hedge accounting.
AASB 9 Financial Instruments replaces AASB 139 Financial Instruments: Recognition and Measurement for reporting
AASB 9 Financial Instruments
beginning on or after 1 January 2018 bringing together all three aspects of the accounting for financial instruments:
The Group adopted AASB 9 on 1 July 2018 using the modified retrospective method of adoption. The effect of adopting
classification and measurement; impairment; and hedge accounting.
AASB 9 was not material for the Group.
The Group adopted AASB 9 on 1 July 2018 using the modified retrospective method of adoption. The effect of adopting
Current and non-current financial assets and liabilities within the scope of AASB 9 are classified as fair value through profit
AASB 9 was not material for the Group.
or loss, fair value through other comprehensive income or amortised cost. The Group determines the classification of its
financial assets and liabilities at initial recognition with the classification depending on the purpose for which the asset or
Current and non-current financial assets and liabilities within the scope of AASB 9 are classified as fair value through profit
liability was acquired or issued. Financial assets and liabilities are initially recognised at fair value plus directly attributable
or loss, fair value through other comprehensive income or amortised cost. The Group determines the classification of its
transaction costs, unless their classification is at fair value through profit or loss. They are subsequently measured at fair
financial assets and liabilities at initial recognition with the classification depending on the purpose for which the asset or
value or amortised cost using the effective interest method.
liability was acquired or issued. Financial assets and liabilities are initially recognised at fair value plus directly attributable
interest to be recognised.
transaction costs, unless their classification is at fair value through profit or loss. They are subsequently measured at fair
The Group’s financial assets at amortised cost includes trade and other receivables and loan receivables. The principal
value or amortised cost using the effective interest method.
related to trade and other receivables is deemed to be the amount resulting from the transaction in the scope of AASB 15.
The Group determines that trade receivables do not include a significant financing component and hence, there is no
The Group’s financial assets at amortised cost includes trade and other receivables and loan receivables. The principal
related to trade and other receivables is deemed to be the amount resulting from the transaction in the scope of AASB 15.
The Group determines that trade receivables do not include a significant financing component and hence, there is no
Under AASB 9, the Group’s impairment allowances are now to be based on a forward-looking expected credit loss (ECL)
approach. AASB 9 requires the Group to record an allowance for ECLs for all loans not held at FVPL. The Group’s
interest to be recognised.
previously applied impairment assessment which incorporated historical experiences, resulted in similar impairment
Under AASB 9, the Group’s impairment allowances are now to be based on a forward-looking expected credit loss (ECL)
expectations under the forward looking ECL approach.
approach. AASB 9 requires the Group to record an allowance for ECLs for all loans not held at FVPL. The Group’s
previously applied impairment assessment which incorporated historical experiences, resulted in similar impairment
Historical cost convention
expectations under the forward looking ECL approach.
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of available-for-sale financial assets, financial assets and liabilities at fair value through profit or loss,
investment properties and derivative financial instruments.
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of available-for-sale financial assets, financial assets and liabilities at fair value through profit or loss,
CONSOLIDATION
investment properties and derivative financial instruments.
This financial report covers the consolidated entity consisting of Eureka Group Holdings Limited and its controlled entities.
CONSOLIDATION
Eureka Group Holdings Limited is the ultimate parent entity.
This financial report covers the consolidated entity consisting of Eureka Group Holdings Limited and its controlled entities.
The consolidated financial statements incorporate the assets and liabilities of all entities controlled by Eureka Group
Eureka Group Holdings Limited is the ultimate parent entity.
Holdings Limited as at 30 June 2019 and the results of all controlled entities for the year then ended. The effects of all
transactions between entities in the Group are eliminated in full.
The consolidated financial statements incorporate the assets and liabilities of all entities controlled by Eureka Group
Holdings Limited as at 30 June 2019 and the results of all controlled entities for the year then ended. The effects of all
Subsidiaries are entities controlled by the Company. Control exists when the Company is exposed to or has rights to
transactions between entities in the Group are eliminated in full.
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. In assessing control, potential voting rights that presently are exercisable or convertible are
Subsidiaries are entities controlled by the Company. Control exists when the Company is exposed to or has rights to
taken into account. The financial statements of subsidiaries are included in the financial report from the date that control
variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct
commences until the date that control ceases.
the activities of the entity. In assessing control, potential voting rights that presently are exercisable or convertible are
taken into account. The financial statements of subsidiaries are included in the financial report from the date that control
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
commences until the date that control ceases.
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The Group
or loss in profit or loss.
recognises the fair value of the consideration received and the fair value of any investment retained together with any gain
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The Group
recognises the fair value of the consideration received and the fair value of any investment retained together with any gain
or loss in profit or loss.
BUSINESS COMBINATIONS
The acquisition method of accounting is used to account for business combinations regardless of whether equity
BUSINESS COMBINATIONS
instruments or other assets are acquired.
The acquisition method of accounting is used to account for business combinations regardless of whether equity
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments
instruments or other assets are acquired.
issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest
in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments
or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to
issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest
in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value
or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to
EGH ANNUAL REPORT 2019
profit or loss.
profit or loss.
EGH ANNUAL REPORT 2019
21
21
32
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
On the acquisition of a business, the Group assesses the financial assets acquired and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic conditions, the Group's operating or
accounting policies and other pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the Group remeasures its previously held equity interest in the
acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount is
recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent
changes in the fair value of contingent consideration classified as an asset or liability is recognised in profit or loss.
Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within
equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling
interest in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment
in the acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the
fair value of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as
a gain directly in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification
and measurement of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration
transferred and the acquirer's previously held equity interest in the acquiree.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the
provisional amounts recognised and also recognises additional assets or liabilities during the measurement period, based
on new information obtained about the facts and circumstances that existed at the acquisition-date. The measurement
period ends on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the
information possible to determine fair value.
INCOME TAX
Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit and loss except to
the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred
tax is not recognised for the differences relating to investments in subsidiaries to the extent that it is probable that it will
not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the
temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the
reporting date. 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. A deferred tax asset is
recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference
can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer
probable that the related tax benefit will be realised.
TAX CONSOLIDATION
The Company and its wholly-owned Australian resident entities have formed a tax-consolidation group with effect from 1
July 2003 and are therefore taxed as a single entity from that date. The head entity within the tax-consolidation group is
Eureka Group Holdings Limited.
Current income tax expense, deferred tax liabilities and deferred assets arising from temporary differences of the members
of the tax-consolidation group are recognised in the separate financial statements of the members of the tax-consolidation
group using the ‘separate taxpayer within group’ approach by reference to the carrying amounts of assets and liabilities in
the separate financial statements of each entity and the tax values applying under tax consolidation.
Any current tax liabilities (assets) and deferred tax assets arising from unused tax losses of the subsidiaries is assumed
by the head entity in the tax-consolidation group and are recognised by the Company as amounts payable/(receivable)
to/(from) other entities in the tax-consolidation group in conjunction with any tax funding arrangement amounts (refer
below). Any difference between these amounts is recognised by the Company as an equity contribution or distribution.
The Company recognises deferred tax assets arising from unused tax losses of the tax-consolidation group to the extent
that it is probable that future taxable profits of the tax-consolidation group will be available against which the asset can be
utilised.
Any subsequent period adjustments to deferred tax assets arising from unused tax losses as a result of revised
assessments of the probability of recoverability is recognised by the head entity only.
33
EGH ANNUAL REPORT 2019
22
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Nature of Tax Funding Arrangements and Tax Sharing Arrangements
The head entity in conjunction with other members of the tax-consolidation group has entered into a tax funding
arrangement which sets out the funding obligations of members of the tax-consolidation group in respect of tax amounts.
The tax funding arrangements require payments to/from the head entity to the current tax liability/ (asset) assumed by the
head entity and any tax-loss deferred tax asset assumed by the head entity, resulting in the head entity recognising an
inter-entity receivable/ (payable) equal in amount to the tax liability/ (asset) assumed. The inter-entity receivables/
(payables) are at call.
Contributions to fund the current tax liabilities are payable as per the tax funding arrangement and reflect the timing of the
head entity’s obligation to make payments for tax liabilities to the relevant authorities.
The head entity, in conjunction with other members of the tax-consolidated group, has also entered into a tax sharing
agreement. The tax sharing agreement provides for the determination of the allocation of income tax liabilities between
the entities should the head entity default on its tax payment obligations.
CASH AND CASH EQUIVALENTS
For the purpose of the statement of cash flows, cash includes cash at bank and on hand as well as highly liquid investments
with short periods to maturity which are readily convertible to cash on hand and are subject to an insignificant risk of
changes in value, net of outstanding bank overdrafts.
TRADE AND OTHER RECEIVABLES
Trade and other receivables are recognised initially at original invoice amount, and subsequently adjusted for Expected
Credit Loss (ECL). An allowance is recognised by analysing the age of outstanding balances and applying historical default
percentages. Historical loss rates are adjusted to reflect forward-looking observable data affecting the ability of customers
to settle debts.
INVESTMENT PROPERTY
Land and buildings have the function of investment and are regarded as composite assets. In accordance with applicable
accounting standards, the buildings, including plant and equipment, are not depreciated.
Investment property is initially measured at cost, including transaction costs. Subsequent to initial recognition, investment
property is stated at fair value, which reflects market conditions at the reporting date. Gains or losses arising from changes
in the fair values of investment property is recognised in profit or loss in the period in which they arise.
Transfers are made to (or from) investment property only when there is a change in use. For a transfer from investment
property to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in
use. If owner-occupied property becomes an investment property, the Group accounts for such property in accordance
with the policy stated under property, plant and equipment up to the date of change in use.
Transfers are made to (or from) investment property to inventory only when there is a change in use. For a transfer from
investment property to inventory, the deemed cost for subsequent accounting is the fair value at the date of change in use.
If inventory becomes an investment property, the Group accounts for it in accordance with the policy stated under inventory
up to the date of change in use.
It is the Group’s policy to have all investment properties externally valued at intervals of not less than three years or a third
of the properties each year. Internal valuations are undertaken with reference to current market conditions and available
information for those investment properties not externally valued at each reporting date. It is the policy of the Group to
review the fair value of each investment property at each reporting date.
Any gain or loss on disposal of investment property (calculated as the difference between the net proceeds from disposal
and the carrying amount of the item) is recognised in profit or loss.
INVESTMENT IN JOINT VENTURE
A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to
the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which
exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.
The considerations made in determining joint control are similar to those necessary to determine control over subsidiaries.
The Group’s investments in its joint venture are accounted for using the equity method. Under the equity method, the
investment in a joint venture is initially recognised at cost. The carrying amount of the investment is adjusted to recognise
changes in the Group’s share of net assets of the joint venture since the acquisition date. Goodwill relating to the joint
venture is included in the carrying amount of the investment and is not tested for impairment separately.
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23
Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Nature of Tax Funding Arrangements and Tax Sharing Arrangements
The head entity in conjunction with other members of the tax-consolidation group has entered into a tax funding
arrangement which sets out the funding obligations of members of the tax-consolidation group in respect of tax amounts.
The tax funding arrangements require payments to/from the head entity to the current tax liability/ (asset) assumed by the
head entity and any tax-loss deferred tax asset assumed by the head entity, resulting in the head entity recognising an
inter-entity receivable/ (payable) equal in amount to the tax liability/ (asset) assumed. The inter-entity receivables/
(payables) are at call.
Contributions to fund the current tax liabilities are payable as per the tax funding arrangement and reflect the timing of the
head entity’s obligation to make payments for tax liabilities to the relevant authorities.
The head entity, in conjunction with other members of the tax-consolidated group, has also entered into a tax sharing
agreement. The tax sharing agreement provides for the determination of the allocation of income tax liabilities between
the entities should the head entity default on its tax payment obligations.
For the purpose of the statement of cash flows, cash includes cash at bank and on hand as well as highly liquid investments
with short periods to maturity which are readily convertible to cash on hand and are subject to an insignificant risk of
changes in value, net of outstanding bank overdrafts.
Trade and other receivables are recognised initially at original invoice amount, and subsequently adjusted for Expected
Credit Loss (ECL). An allowance is recognised by analysing the age of outstanding balances and applying historical default
percentages. Historical loss rates are adjusted to reflect forward-looking observable data affecting the ability of customers
CASH AND CASH EQUIVALENTS
TRADE AND OTHER RECEIVABLES
to settle debts.
INVESTMENT PROPERTY
Land and buildings have the function of investment and are regarded as composite assets. In accordance with applicable
accounting standards, the buildings, including plant and equipment, are not depreciated.
Investment property is initially measured at cost, including transaction costs. Subsequent to initial recognition, investment
property is stated at fair value, which reflects market conditions at the reporting date. Gains or losses arising from changes
in the fair values of investment property is recognised in profit or loss in the period in which they arise.
Transfers are made to (or from) investment property only when there is a change in use. For a transfer from investment
property to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in
use. If owner-occupied property becomes an investment property, the Group accounts for such property in accordance
with the policy stated under property, plant and equipment up to the date of change in use.
Transfers are made to (or from) investment property to inventory only when there is a change in use. For a transfer from
investment property to inventory, the deemed cost for subsequent accounting is the fair value at the date of change in use.
If inventory becomes an investment property, the Group accounts for it in accordance with the policy stated under inventory
up to the date of change in use.
It is the Group’s policy to have all investment properties externally valued at intervals of not less than three years or a third
of the properties each year. Internal valuations are undertaken with reference to current market conditions and available
information for those investment properties not externally valued at each reporting date. It is the policy of the Group to
review the fair value of each investment property at each reporting date.
Any gain or loss on disposal of investment property (calculated as the difference between the net proceeds from disposal
and the carrying amount of the item) is recognised in profit or loss.
INVESTMENT IN JOINT VENTURE
A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to
the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which
exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.
The considerations made in determining joint control are similar to those necessary to determine control over subsidiaries.
The Group’s investments in its joint venture are accounted for using the equity method. Under the equity method, the
investment in a joint venture is initially recognised at cost. The carrying amount of the investment is adjusted to recognise
changes in the Group’s share of net assets of the joint venture since the acquisition date. Goodwill relating to the joint
venture is included in the carrying amount of the investment and is not tested for impairment separately.
The statement of profit or loss reflects the Group’s share of the results of operations of the joint venture. Any change in
other comprehensive income (OCI) of those investees is presented as part of the Group’s OCI. In addition, when there
has been a change recognised directly in the equity of the joint venture, the Group recognises its share of any changes,
when applicable, in the statement of changes in equity. Unrealised gains and losses resulting from transactions between
the Group and the joint venture are eliminated to the extent of the interest in the joint venture.
The aggregate of the Group’s share of profit or loss of a joint venture is shown on the face of the statement of profit or loss
outside operating profit and represents profit or loss after tax and non-controlling interests in the subsidiaries of the joint
venture.
The financial statements of the associate or joint venture are prepared for the same reporting period as the Group. When
necessary, adjustments are made to bring the accounting policies in line with those of the Group.
After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on
its investment in its joint venture. At each reporting date, the Group determines whether there is objective evidence that
the investment in the joint venture is impaired. If there is such evidence, the Group calculates the amount of impairment
as the difference between the recoverable amount of the joint venture and its carrying value, and then recognises the loss
as ‘Share of profit of a joint venture’ in the statement of profit or loss.
Upon loss of significant influence over the joint control, the Group measures and recognises any retained investment at its
fair value. Any difference between the carrying amount of the joint venture upon loss of joint control and the fair value of
the retained investment and proceeds from disposal is recognised in profit or loss.
PROPERTY PLANT & EQUIPMENT
Property plant and equipment is recognised at cost. Depreciation and amortisation is calculated on the straight line (SL)
or diminishing value (DV) basis so as to write off the net cost of each item of property, plant and equipment over its
expected useful life to the Group. Rates used for each class of asset are:
Class
Rate
Method
Plant and equipment
6-33%
SL/DV
Buildings
2.5%
SL
INTANGIBLE ASSETS
Only intangible assets that have been purchased or paid for by the Group are recognised in the accounts.
Management rights and letting rights have a finite life and are carried at the lower of cost or recoverable amount. The
management rights and letting rights are amortised using the straight line method over 40 years being the estimated useful
life (for strata-titled villages), or over the period of the management rights contract (for single-owner villages).
Rent rolls have a finite life and are carried at the lower of cost or recoverable amount. Rent rolls are amortised using the
straight line method over 15 years being the estimated useful life.
Other intangible assets relate to sundry operational licences. These assets have an indefinite life as their renewal and
maintenance is routine.
Intangible assets with indefinite useful lives are not amortised, but tested for impairment annually, either individually or at
the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite
life continues to be supportable.
Goodwill is measured at cost less any accumulated impairment losses. Goodwill is not amortised, instead goodwill is
reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value
may be impaired. Goodwill acquired is allocated to each of the cash-generating units expected to benefit from the
combination’s synergies. Impairment is determined by assessing the recoverable amount of the cash-generating unit to
which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an
impairment loss is recognised. Impairment losses for goodwill are not subsequently reversed.
34
EGH ANNUAL REPORT 2019
23
35
EGH ANNUAL REPORT 2019
24
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
IMPAIRMENT OF ASSETS
Non-Financial Assets
The carrying amounts of the Group’s non-financial assets are reviewed at each reporting date to determine whether there
is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. For goodwill
and intangible assets that have indefinite lives, recoverable amount is estimated at each reporting date.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs
to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For
the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-
generating unit”). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to
cash-generating units that are expected to benefit from the synergies of the combination.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable
amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating
units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying
amount of the other assets in the unit (group of units) on a pro rata basis.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has
decreased or no longer exists. Except for goodwill, an impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s
carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised.
FAIR VALUE MEASUREMENT
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the
fair value is based on 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; and assumes that the transaction will take place either: in the
principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non-financial assets including investment properties, the fair value
measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for
which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and
minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and
transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the fair
value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either
not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge
and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an
analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison,
where applicable, with external sources of data.
FINANCIAL ASSETS AND LIABILITIES
Current and non-current financial assets and liabilities within the scope of AASB 9 are classified as fair value through profit
or loss, fair value through other comprehensive income or amortised cost. The Group determines the classification of its
financial assets and liabilities at initial recognition with the classification depending on the purpose for which the asset or
liability was acquired or issued. Financial assets and liabilities are initially recognised at fair value plus directly attributable
transaction costs, unless their classification is at fair value through profit or loss. They are subsequently measured at fair
value or amortised cost using the effective interest method. The application of the standard does not have any material
impact on the Group’s financial statements.
36
EGH ANNUAL REPORT 2019
25
Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
IMPAIRMENT OF ASSETS
Non-Financial Assets
The carrying amounts of the Group’s non-financial assets are reviewed at each reporting date to determine whether there
is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. For goodwill
and intangible assets that have indefinite lives, recoverable amount is estimated at each reporting date.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs
to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For
the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-
generating unit”). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to
cash-generating units that are expected to benefit from the synergies of the combination.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable
amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating
units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying
amount of the other assets in the unit (group of units) on a pro rata basis.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has
decreased or no longer exists. Except for goodwill, an impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s
carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised.
FAIR VALUE MEASUREMENT
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the
fair value is based on 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; and assumes that the transaction will take place either: in the
principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non-financial assets including investment properties, the fair value
measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for
which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and
minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and
transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the fair
value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either
not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge
and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an
analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison,
where applicable, with external sources of data.
FINANCIAL ASSETS AND LIABILITIES
Current and non-current financial assets and liabilities within the scope of AASB 9 are classified as fair value through profit
or loss, fair value through other comprehensive income or amortised cost. The Group determines the classification of its
financial assets and liabilities at initial recognition with the classification depending on the purpose for which the asset or
liability was acquired or issued. Financial assets and liabilities are initially recognised at fair value plus directly attributable
transaction costs, unless their classification is at fair value through profit or loss. They are subsequently measured at fair
value or amortised cost using the effective interest method. The application of the standard does not have any material
impact on the Group’s financial statements.
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EGH ANNUAL REPORT 2019
25
NON-CURRENT ASSETS (OR DISPOSAL GROUPS) CLASSIFIED AS HELD FOR SALE
Non-current assets and assets of disposal groups are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continuing use. They are measured at the lower of their carrying
amount and fair value less costs to sell. For non-current assets or assets of disposal groups to be classified as held for
sale, they must be available for immediate sale in their present condition and their sale must be highly probable.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less
costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal
group), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised
by the date of the sale of the non-current asset (or disposal group) is recognised at the date of derecognition.
Non-current assets (including those that are part of the disposal group) are not depreciated or amortised while they are
classified as held for sale. Non-current assets classified as held for sale and the assets of a disposal group classified as
held for sale are presented separately from the other assets in the statement of financial position. The liabilities of a
disposal group classified as held for sale are presented separately from other liabilities in the statement of financial position.
TRADE AND OTHER PAYABLES
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and
which are unpaid at that date. The amounts are unsecured and are generally settled within 30-60 days.
BORROWINGS
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured
at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised
in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of
loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility
will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it
is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services
and amortised over the period of the facility to which it relates.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or
expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to
another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised
in profit or loss as other income or finance costs.
Borrowings 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 reporting period.
EMPLOYEE BENEFITS
Short-term Employee Benefits
Liabilities for wages and salaries, annual leave and long service leave expected to be settled within 12 months of the
reporting date are recognised in current liabilities and are measured as the amounts expected to be paid when the liabilities
are settled inclusive of on-costs. Sick leave is non-vesting and is expensed as paid.
Long-term Employee Benefits
The liabilities for annual leave and long service leave expected to not be settled within 12 months of the reporting date are
recognised in non-current liabilities, provided there is an unconditional right to defer settlement of the liability. The liability
is measured as the present value of expected future payments to be made in respect of services provided by employees
up to the reporting date. Consideration is given for expected future wage and salary levels, experience of employee
departures and periods of service. Expected future payments are discounted using market yields as at the reporting date
on corporate bond rates with the terms to maturity that match, as closely as possible, the estimated future cash outflows.
Share based payments
Employees of the Group receive remuneration in the form of share-based payments, whereby employees render services
as consideration for equity instruments (equity-settled transactions).
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an
appropriate valuation model.
That cost is recognised in employee benefits expense, together with a corresponding increase in equity (other capital
reserves), over the period in which the service and, where applicable, the performance conditions are fulfilled (the vesting
period). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date
reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity
instruments that will ultimately vest. The expense or credit in the statement of profit or loss for a period represents the
movement in cumulative expense recognised as at the beginning and end of that period.
EGH ANNUAL REPORT 2019
26
37
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Service and non-market performance conditions are not taken into account when determining the grant date fair value of
awards, but the likelihood of the conditions being met is assessed as part of the Group’s best estimate of the number of
equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value.
Any other conditions attached to an award, but without an associated service requirement, are considered to be non-
vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing
of an award unless there are also service and/or performance conditions.
No expense is recognised for awards that do not ultimately vest because non-market performance and/or service
conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as
vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or
service conditions are satisfied.
PROVISIONS
Provisions are recognised when the Group has a present obligation, the future sacrifice of economic benefits is probable,
and the amount of the provision can be measured reliably.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at
reporting date, taking into account the risks and uncertainties surrounding the obligation.
RETIREMENT VILLAGE RESIDENT LOANS
These loans, which are repayable on the departure of the resident, are classified as financial liabilities at fair value through
profit and loss with resulting fair value adjustments recognised in the income statement. The loans do not meet the solely
payments of principal and interest criteria. The fair value of the obligation is measured as the ingoing contribution plus the
resident’s share of capital appreciation to reporting date. Although the expected average residency term is between one
to ten years, these obligations are classified as current liabilities, as required by Accounting Standards, because the Group
does not have an unconditional right to defer settlement to more than twelve months after reporting date.
This liability is stated net of accrued deferred management fees at reporting date, because the Group’s contracts with
residents require net settlement of those obligations.
FINANCE COSTS
Finance costs include interest on short-term and long-term borrowings, amortisation of discounts or premiums relating to
borrowings, amortisation of ancillary costs in connection with the arrangement of borrowings and finance lease charges.
Finance costs incurred whilst qualifying assets are under construction are capitalised in the period in which they are
incurred. Once each project is completed and ready for sale, subsequent finance costs are expensed when incurred. All
other finance costs are expensed when incurred.
GOODS AND SERVICES TAX
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the
amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of
an asset or as part of an item of expense.
Receivables and payables are recognised inclusive of GST. The net amount of GST recoverable from, or payable to, the
taxation authority is included as part of receivables or payables.
LEASES
Leases of property, plant and equipment where the group, as lessee, has substantially all the risks and rewards of
ownership are classified as finance leases. Finance leases are capitalised at inception of the lease at the fair value of the
leased property or, if lower, at the present value of the minimum lease payments. The corresponding rental obligations,
net of finance charges, are included in financial liabilities. Each lease payment is allocated between the liability and finance
cost. The finance cost is charged to the profit and loss over the lease period so as to produce a constant periodic rate of
interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance
leases is depreciated over the asset’s useful life or over the shorter of the asset’s useful life and the lease term if there is
no reasonable certainty that the group will obtain ownership at the end of the lease term.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the group as lessee are
classified as operating leases. Operating lease payments are recognised as an expense on a straight line basis over the
lease term.
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EGH ANNUAL REPORT 2019
27
Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Service and non-market performance conditions are not taken into account when determining the grant date fair value of
awards, but the likelihood of the conditions being met is assessed as part of the Group’s best estimate of the number of
equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value.
Any other conditions attached to an award, but without an associated service requirement, are considered to be non-
vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing
of an award unless there are also service and/or performance conditions.
No expense is recognised for awards that do not ultimately vest because non-market performance and/or service
conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as
vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or
service conditions are satisfied.
PROVISIONS
Provisions are recognised when the Group has a present obligation, the future sacrifice of economic benefits is probable,
and the amount of the provision can be measured reliably.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at
reporting date, taking into account the risks and uncertainties surrounding the obligation.
RETIREMENT VILLAGE RESIDENT LOANS
These loans, which are repayable on the departure of the resident, are classified as financial liabilities at fair value through
profit and loss with resulting fair value adjustments recognised in the income statement. The loans do not meet the solely
payments of principal and interest criteria. The fair value of the obligation is measured as the ingoing contribution plus the
resident’s share of capital appreciation to reporting date. Although the expected average residency term is between one
to ten years, these obligations are classified as current liabilities, as required by Accounting Standards, because the Group
does not have an unconditional right to defer settlement to more than twelve months after reporting date.
This liability is stated net of accrued deferred management fees at reporting date, because the Group’s contracts with
residents require net settlement of those obligations.
FINANCE COSTS
Finance costs include interest on short-term and long-term borrowings, amortisation of discounts or premiums relating to
borrowings, amortisation of ancillary costs in connection with the arrangement of borrowings and finance lease charges.
Finance costs incurred whilst qualifying assets are under construction are capitalised in the period in which they are
incurred. Once each project is completed and ready for sale, subsequent finance costs are expensed when incurred. All
other finance costs are expensed when incurred.
GOODS AND SERVICES TAX
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the
amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of
an asset or as part of an item of expense.
Receivables and payables are recognised inclusive of GST. The net amount of GST recoverable from, or payable to, the
taxation authority is included as part of receivables or payables.
LEASES
Leases of property, plant and equipment where the group, as lessee, has substantially all the risks and rewards of
ownership are classified as finance leases. Finance leases are capitalised at inception of the lease at the fair value of the
leased property or, if lower, at the present value of the minimum lease payments. The corresponding rental obligations,
net of finance charges, are included in financial liabilities. Each lease payment is allocated between the liability and finance
cost. The finance cost is charged to the profit and loss over the lease period so as to produce a constant periodic rate of
interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance
leases is depreciated over the asset’s useful life or over the shorter of the asset’s useful life and the lease term if there is
no reasonable certainty that the group will obtain ownership at the end of the lease term.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the group as lessee are
classified as operating leases. Operating lease payments are recognised as an expense on a straight line basis over the
lease term.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
DIVIDENDS
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 reporting period but not distributed at the end of the reporting period.
CAPITAL MANAGEMENT
The Group considers its share capital and accumulated losses as capital. When managing capital, the objective is to
ensure the Group continues as a going concern, as well as to maintain optimum returns to shareholders and benefits for
other stakeholders. The Group also aims to maintain a capital structure that ensures the lowest cost of capital available to
the entity.
The Group does not have any specific capital targets and nor is it subject to any external capital restrictions. The Board
and senior management meet regularly and review in detail the current cash position and cash flow forecasts having regard
to planned expansions and take the necessary action to ensure sufficient funds are available.
CONTRIBUTED EQUITY
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly
attributable costs is recognised as a deduction from equity.
EARNINGS PER SHARE
Basic Earnings Per Share
Basic earnings per share is calculated by dividing the profit attributable to the owners of the Company, excluding any costs
of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the
financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted Earnings Per Share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
USE OF JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect
the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results
may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.
Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that
have the most significant effect on the amount recognised in the financial statements are:
Investment Property – Classification
The Group classifies property as investment property when it meets the following key criteria:
The asset is held by the Group to generate long term investment growth and ongoing rental returns; and
•
• Ancillary services are insignificant to the arrangement as a whole.
Associated with these properties are insignificant ancillary services, principally the provision of food services to residents.
Judgement is required as to whether the ancillary services are significant. Management has determined that the ancillary
services are not significant by assessing quantitative and qualitative factors, which includes comparing the fair value of the
ancillary services to the total income generated from the property, as well as operational and legislative considerations.
Properties that do not meet this criteria are classified as property, plant and equipment.
38
EGH ANNUAL REPORT 2019
27
39
EGH ANNUAL REPORT 2019
28
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Investment Property – Measurement
The Group carries its investment property at fair value, with changes in fair value being recognised in profit or loss. The
best evidence of fair value is current selling prices in an active market for similar investment properties. Where such
information is not available, the Group determines a property’s value within a range of reasonable fair value estimates. In
making its judgment, the Group considers information from a variety of sources including:
a) Valuations undertaken by accredited external independent valuers;
b) Acquisition price paid for the property;
c) Recent prices of similar properties with adjustments to reflect any changes in economic conditions since the
date of the transactions that occurred at those prices; and
d) Capitalised income projections based upon a property’s estimated maintainable earnings and capitalisation rate
derived from analysis of market evidence.
Inventory
Inventory is valued at the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion
and the estimated costs necessary to make the sale.
Goodwill
The Group tests the carrying value of goodwill on an annual basis to assess for any impairment, or more frequently, if
events or changes in circumstances indicate impairment. The recoverable amounts of cash-generating units have been
determined based on value-in-use calculations. These calculations require the use of assumptions, including estimated
discount rates based on the current cost of capital and growth rates of the estimated future cash flows. Refer to Note 16
for further information.
Amortisation of Management Rights
Management rights are amortised over either 40 years (for strata-titled villages) or the period of the management right
contract (for single-owner villages).
For strata-titled villages (where units are individually owned by third parties) where management rights are attached, the
Group amortises its management rights over a period of 40 years (being the estimated useful life). The amortisation period
used reflects the pattern in which the asset’s future economic benefits are expected to be consumed by the Group. In
determining the useful life, the Group considers the expected usage of the assets, the legal rights over the asset and the
renewal period of the management rights agreements. The management rights are attached to each individual village’s
property and include options or the ability to renew the contract. Taking these points into consideration, the Directors
believe the amortisation period should be similar to the life of the property rather than the agreement period.
For single-owner villages (where all units in the village are owned by a single third party) where management rights are
attached, the management rights are amortised over the life of the contract. This is because Eureka has materially less
control over future contract renewals than it does with the strata-titled villages. Eureka considers that it has materially less
control over future contract renewals in single-owner villages primarily because it does not own or have any sort of tenure
in respect of the managers unit and a single vote of the owner can elect to not renew Eureka’s management rights contract.
Recovery of Receivables
At each reporting date the Group assesses the recoverability of trade, loan and other receivables by reference to the
expected future cash flows, the credit worthiness of the borrowers and the value of security provided. For trade and other
receivables, the Group applies a simplified approach in calculating expected credit losses (ECLs). Therefore, the Group
does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting
date.
Non-Current Amount Receivable and Associated Option over property
Options over property are initially measured at cost. Subsequent to acquisition, options continue to be recorded at cost,
however are tested for impairment on an annual basis. Impairment is tested by reference to the assessed value of the
underlying property assets or final cash settlement alternatives. Impairment losses are recorded as incurred. Should these
options not be exercised and this asset revert back to a receivable it will be assessed for impairment as a loan receivable
at that point in time. Refer to Note 28 for significant assumptions made in the assessment of impairment for these assets.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The consolidated entity assesses impairment of non-financial assets other than goodwill and other indefinite life intangible
assets at each reporting date by evaluating conditions specific to the consolidated entity and to the particular asset that
may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves
fair value less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and
assumptions.
40
EGH ANNUAL REPORT 2019
29
Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Investment Property – Measurement
The Group carries its investment property at fair value, with changes in fair value being recognised in profit or loss. The
best evidence of fair value is current selling prices in an active market for similar investment properties. Where such
information is not available, the Group determines a property’s value within a range of reasonable fair value estimates. In
making its judgment, the Group considers information from a variety of sources including:
a) Valuations undertaken by accredited external independent valuers;
b) Acquisition price paid for the property;
c) Recent prices of similar properties with adjustments to reflect any changes in economic conditions since the
date of the transactions that occurred at those prices; and
d) Capitalised income projections based upon a property’s estimated maintainable earnings and capitalisation rate
derived from analysis of market evidence.
Inventory
Goodwill
Inventory is valued at the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion
and the estimated costs necessary to make the sale.
The Group tests the carrying value of goodwill on an annual basis to assess for any impairment, or more frequently, if
events or changes in circumstances indicate impairment. The recoverable amounts of cash-generating units have been
determined based on value-in-use calculations. These calculations require the use of assumptions, including estimated
discount rates based on the current cost of capital and growth rates of the estimated future cash flows. Refer to Note 16
for further information.
Amortisation of Management Rights
contract (for single-owner villages).
Management rights are amortised over either 40 years (for strata-titled villages) or the period of the management right
For strata-titled villages (where units are individually owned by third parties) where management rights are attached, the
Group amortises its management rights over a period of 40 years (being the estimated useful life). The amortisation period
used reflects the pattern in which the asset’s future economic benefits are expected to be consumed by the Group. In
determining the useful life, the Group considers the expected usage of the assets, the legal rights over the asset and the
renewal period of the management rights agreements. The management rights are attached to each individual village’s
property and include options or the ability to renew the contract. Taking these points into consideration, the Directors
believe the amortisation period should be similar to the life of the property rather than the agreement period.
For single-owner villages (where all units in the village are owned by a single third party) where management rights are
attached, the management rights are amortised over the life of the contract. This is because Eureka has materially less
control over future contract renewals than it does with the strata-titled villages. Eureka considers that it has materially less
control over future contract renewals in single-owner villages primarily because it does not own or have any sort of tenure
in respect of the managers unit and a single vote of the owner can elect to not renew Eureka’s management rights contract.
Recovery of Receivables
At each reporting date the Group assesses the recoverability of trade, loan and other receivables by reference to the
expected future cash flows, the credit worthiness of the borrowers and the value of security provided. For trade and other
receivables, the Group applies a simplified approach in calculating expected credit losses (ECLs). Therefore, the Group
does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting
date.
Non-Current Amount Receivable and Associated Option over property
Options over property are initially measured at cost. Subsequent to acquisition, options continue to be recorded at cost,
however are tested for impairment on an annual basis. Impairment is tested by reference to the assessed value of the
underlying property assets or final cash settlement alternatives. Impairment losses are recorded as incurred. Should these
options not be exercised and this asset revert back to a receivable it will be assessed for impairment as a loan receivable
at that point in time. Refer to Note 28 for significant assumptions made in the assessment of impairment for these assets.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The consolidated entity assesses impairment of non-financial assets other than goodwill and other indefinite life intangible
assets at each reporting date by evaluating conditions specific to the consolidated entity and to the particular asset that
may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves
fair value less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and
assumptions.
Recovery of Deferred Tax Assets
Deferred tax assets are recognised for deductible temporary differences only if the Group considers it is probable that
future taxable amounts will be available to utilise those temporary difference and tax losses.
Bartercard
Bartercard assets are initially recorded at cost. At each balance date an assessment is made of the cash equivalent value
obtainable on the expenditure of Bartercard. If this value exceeds cost, no adjustment is made, however if the cash price
equivalent is less than cost, an impairment charge is made to this asset.
PARENT ENTITY
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only.
Supplementary information about the parent entity is disclosed in Note 33. The accounting policies of the parent entity are
consistent with those of the Group, as disclosed above, except for the following:
•
•
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Investments in joint ventures are accounted for at cost, less any impairment, in the parent entity.
Financial Guarantees
Where the parent entity has provided financial guarantees in relation to loans and payables of subsidiaries for no
compensation, the fair values of these guarantees are accounted for as contributions and recognised as part of the cost
of the investment.
COMPARATIVES
Where necessary, comparative information has been reclassified to achieve consistency in disclosure with current financial
year amounts and other disclosures.
NEW ACCOUNTING STANDARDS AND INTERPRETATIONS NOT YET ADOPTED
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2019
reporting periods. Eureka Group Holdings Limited assessment of the impact of these new standards and interpretations is
set out below.
AASB 16 Leases
The new standard will be effective for annual periods beginning on or after 1 January 2019. The Group has not early
adopted this standard. AASB 16 sets out the principles for the recognition, measurement, presentation and disclosure of
leases and requires lessees to account for leases under a single on-balance sheet model similar to the accounting for
finance leases under AASB 117 Leases. The standard includes two recognition exemption for leases – lease of “low-value”
assets (i.e. personal computers) and leases with a lease term of 12 months or less.
Under AASB 16, the distinction between finance and operating lease is eliminated for lessees (with the exception of short-
term and low value leases). Both finance leases and operating leases will result in the recognition of right-of-use (ROU)
asset and a corresponding lease liability on the balance sheet. The liability is initially measured at the present value of
future lease payments for the lease term and the ROU asset reflects the lease alibility and initial direct costs, less any
lease incentives and amounts required for dismantling.
Lessees will be also required to remeasure the lease liability upon the occurrence of certain events (e.g. a change in the
lease term, a change in future lease payments resulting from a change in an index or rate used to determine those
payments). The lessee will generally recognise the amount of remeasurement of the lease liability as an adjustment to
ROU asset.
The Group intends to use a modified retrospective adoption approach and is currently finalising the assessment regarding
the use of the practical expedients provided by the Standard. As the Group continues to evaluate this standard and the
effect on related disclosures, the primary effect of adoption will be to record right-of-use assets and corresponding lease
obligations for current operating leases. The adoption is expected to have a financial impact on the Group’s consolidated
balance sheet, consolidated cash flow statement and statement of comprehensive income. While the assessment is
progressed, there are items still under consideration (such as discount rates) before quantitative impact of this standard
can be disclosed.
The Group does not expect significant changes for leases acting as lessor.
Other new accounting standards, amendments to accounting standards, and interpretations have been published that are
not mandatory for the current reporting period and are not expected to have a material impact on the Group’s future
financial reporting.
40
EGH ANNUAL REPORT 2019
29
41
EGH ANNUAL REPORT 2019
30
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
3. REVENUE
Rental income
Revenue from contracts with customers
Catering – managed properties
Catering – owned properties
Total catering income
Service fees
Caretaking fees
Revenue from asset sales - inventory
Total Revenue from contracts with customers
Total Revenue
Other Income
Gain on sale of investment property
Gain on sale of intangibles
Other income
Disaggregation of revenue from contracts with customers
The Group derives revenue from the transfer of goods and services over time and at
a point in time in the following geographical regions.
Timing of revenue recognition
At a point in time
Over time
Total
Consolidated
30 June 2019
$’000
30 June 2018
$’000
15,847
15,674
2,105
2,152
4,257
2,334
798
2,550
9,939
25,786
-
69
32
101
2,193
2,081
4,274
1,762
864
-
6,900
22,574
501
60
36
597
Australia
$’000
Australia
$’000
6,807
3,132
9,939
4,274
2,626
6,900
42
EGH ANNUAL REPORT 2019
31
Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
3. REVENUE
Rental income
Revenue from contracts with customers
Catering – managed properties
Catering – owned properties
Total catering income
Service fees
Caretaking fees
Revenue from asset sales - inventory
Total Revenue from contracts with customers
Total Revenue
Other Income
Gain on sale of investment property
Gain on sale of intangibles
Other income
Disaggregation of revenue from contracts with customers
The Group derives revenue from the transfer of goods and services over time and at
a point in time in the following geographical regions.
Timing of revenue recognition
At a point in time
Over time
Total
Consolidated
30 June 2019
30 June 2018
$’000
$’000
15,847
15,674
2,105
2,152
4,257
2,334
798
2,550
9,939
25,786
-
69
32
101
2,193
2,081
4,274
1,762
864
-
6,900
22,574
501
60
36
597
Australia
Australia
$’000
$’000
6,807
3,132
9,939
4,274
2,626
6,900
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
4. ITEMS INCLUDED IN PROFIT/(LOSS)
Profit/(loss) before income tax expense includes the following specific items:
Rental expense relating to operating leases
- Minimum lease payments
Finance cost
- Interest and finance charges paid/payable for financial liabilities not at fair value
through profit or loss
Total finance cost
Amortisation
- Management rights
- Rent rolls
- Other
Total amortisation
Depreciation
- Plant & equipment
- Buildings
- Motor vehicles
Total depreciation
Total amortisation and depreciation
Defined contribution superannuation expense
5.
INCOME TAX
The major components of income tax expense for the years ended
30 June 2019 and 2018 are:
Consolidated Statement of Profit or Loss
Current income tax
Deferred income tax
Income tax expense reported in the Statement of Profit or Loss
Consolidated
30 June 2019
$’000
30 June 2018
$’000
279
280
2,766
2,766
2,753
2,753
146
3
2
151
50
17
7
74
225
393
134
4
2
140
81
16
14
111
251
431
Consolidated
30 June 2019
$’000
30 June 2018
$’000
-
-
-
-
-
-
42
EGH ANNUAL REPORT 2019
31
43
EGH ANNUAL REPORT 2019
32
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
A reconciliation of tax expense and the accounting profit/(loss) multiplied by the applicable tax rate of 30% presents as
follows:
Accounting profit/(loss) before tax
Income tax calculated at 30%
Tax effect of permanent differences – non deductible land option amounts
Recognition of deferred tax assets not previously recognised
Income tax expense reported in the Statement of Profit or Loss
6. TRADE AND OTHER RECEIVABLES
Trade receivables
Other debtors
Provision for expected credit loss
Consolidated
30 June 2019
$’000
30 June 2018
$’000
6,794
(276)
(2,038)
-
2,038
-
(83)
533
(450)
-
Consolidated
30 June 2019
$’000
30 June 2018
$’000
88
303
-
391
132
186
(176)
142
Trade receivables are non-interest bearing unless otherwise stated and are generally on 30 day terms.
7. INVENTORY
Terranora units
Couran Cove units
Consolidated
30 June 2019
$’000
30 June 2018
$’000
9,215
-
9,215
9,783
2,000
11,783
During the year, the Terranora manager’s unit was transferred to Investment property at fair value ($0.60 million) and two
units were sold for a total consideration of $0.54 million. The cost of additional development at Terranora are capitalised
to the inventory as incurred. The inventory is expected to be realised within 12 months via sales to third parties.
The sale of the Couran Cove units was completed during the year for a cash consideration of $2.01 million. Details are
contained in Note 28.
8. NON-CURRENT ASSETS HELD FOR SALE
Current
Non-current assets held for sale
Consolidated
30 June 2019
$’000
30 June 2018
$’000
519
519
1,750
1,750
At 30 June 2019, this asset comprised two residential houses in Mt Gambier. Subsequent to year end, contracts for their
sale have been executed, with settlement expected to be completed in September 2019. The combined carrying value at
30 June 2019 reflects the contract prices less selling costs.
The sale of Lambert Village in Mt Gambier was completed on 18 January 2019 for a consideration of $1.10 million which
equated to the carrying value.
44
EGH ANNUAL REPORT 2019
33
Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
A reconciliation of tax expense and the accounting profit/(loss) multiplied by the applicable tax rate of 30% presents as
9. OTHER ASSETS
follows:
Current
Prepayments and other assets (i)
Bartercard (ii)
Non-current
Couran Cove land option (iii)
Consolidated
30 June 2019
$’000
30 June 2018
$’000
871
593
1,464
1,237
1,237
842
627
1,469
1,237
1,237
(i) Amounts included relate to prepaid expenses, deposits for assets and other operational assets used in ordinary business
activities.
(ii) Bartercard is an alternative currency and operates as a trade exchange. EGH has utilised Bartercard over recent years.
At 30 June 2019, the Bartercard balance is $0.59 million, which is recorded at cost. In addition, amounts of Bartercard
have been advanced to suppliers in exchange for future supply of goods. These are recorded at the fair value of goods to
be received and are disclosed in prepayments and other assets ($0.46 million) and Investment Property ($0.71 million).
(iii) Couran Cove
Details about the Couran Cove land option are contained in Note 28.
10. DEFERRED TAX ASSETS AND LIABILITIES
Recognised in the Statement of Financial Position
Deferred tax assets
Tax losses
Deferred tax liabilities
Intangible assets
Investment properties, property, plant and equipment
Net (assessable) and deductible differences on sundry items
Net deferred tax assets/liability opening balance adjustment
Not recognised in the Statement of Financial Position
Unrecognised deferred tax assets
Tax losses
Net (assessable) and deductible differences on sundry items
Net unrecognised deferred tax assets
Reconciliation of Unrecognised tax balances
Opening unrecognised amounts
Recognition of temporary differences
Recognition and use of tax losses
Adjustment to prior period balances
Total movement
Closing balance
Consolidated
30 June 2019
$’000
30 June 2018
$’000
5,884
4,330
-
(6,421)
537
-
-
2,589
4,205
-
(2,013)
397
(1,616)
2,589
-
(5,049)
719
-
-
4,205
3,968
-
(181)
418
237
4,205
44
EGH ANNUAL REPORT 2019
33
45
EGH ANNUAL REPORT 2019
34
Accounting profit/(loss) before tax
Income tax calculated at 30%
Tax effect of permanent differences – non deductible land option amounts
Recognition of deferred tax assets not previously recognised
Income tax expense reported in the Statement of Profit or Loss
6. TRADE AND OTHER RECEIVABLES
Consolidated
30 June 2019
30 June 2018
$’000
$’000
6,794
(276)
(2,038)
2,038
-
-
88
303
-
391
(83)
533
(450)
-
132
186
(176)
142
Consolidated
30 June 2019
30 June 2018
$’000
$’000
Consolidated
30 June 2019
30 June 2018
$’000
$’000
9,215
-
9,215
9,783
2,000
11,783
Consolidated
30 June 2019
30 June 2018
$’000
$’000
519
519
1,750
1,750
Trade receivables are non-interest bearing unless otherwise stated and are generally on 30 day terms.
Trade receivables
Other debtors
Provision for expected credit loss
7. INVENTORY
Terranora units
Couran Cove units
Current
Non-current assets held for sale
During the year, the Terranora manager’s unit was transferred to Investment property at fair value ($0.60 million) and two
units were sold for a total consideration of $0.54 million. The cost of additional development at Terranora are capitalised
to the inventory as incurred. The inventory is expected to be realised within 12 months via sales to third parties.
The sale of the Couran Cove units was completed during the year for a cash consideration of $2.01 million. Details are
contained in Note 28.
8. NON-CURRENT ASSETS HELD FOR SALE
At 30 June 2019, this asset comprised two residential houses in Mt Gambier. Subsequent to year end, contracts for their
sale have been executed, with settlement expected to be completed in September 2019. The combined carrying value at
30 June 2019 reflects the contract prices less selling costs.
The sale of Lambert Village in Mt Gambier was completed on 18 January 2019 for a consideration of $1.10 million which
equated to the carrying value.
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax assets have
not been recognised in respect of these items until it is probable that future taxable profits will be available against which
the Group can utilise these benefits. The benefits of the Group’s recognised and unrecognised tax losses will only be
realised if:
a.
the Group continues to meet the requirements of applicable tax laws to allow the losses to be carried forward and
utilised;
the Group earns taxable income in future periods; and
b.
c. applicable tax laws are not changed, causing the losses to be unavailable.
11. LOANS RECEIVABLE
Vendor finance (1)
McIntosh Loan (2)
West Cabin Loan (3)
Couran Cove receivable (3)
Current
Non-current
Consolidated
30 June 2019
$’000
30 June 2018
$’000
486
306
320
-
1,112
698
414
1,112
528
-
-
2,260
2,788
2,332
456
2,788
(1) The Group acquired a loan book as part of the purchase of Elizabeth Vale Scenic Village Pty Ltd in 2015. Security
for the loans consists of a first ranking mortgage over the property to which the loan pertains. The loans have maturity
dates of between 5 and 8.1 years and interest is payable on these loans at a rate of between 5.50%-6.25% per annum.
(2) As part of the Couran Cove settlement, which is detailed in Note 28, a new loan of $0.35 million was assumed by Mr
Lachlan McIntosh (a Director of EGH) in his personal capacity (the McIntosh Loan). The due date for repayment is
31 December 2019. The balance of the loan receivable at 30 June 2019 was $0.31 million.
The loan is on substantially the same terms as the former loan to Couran Cove Holdings Pty Ltd. Interest accrues on
the loan at the general interest charge set by the Australian Taxation Office from time to time, which for the June 2019
quarter is set at 8.96% per annum, and repayments have been made during the year.
The loan agreement provides that a fee of up to $0.13 million may be payable by the borrower in certain circumstances.
At any time prior to 31 December 2019, subject to the satisfaction of certain conditions, Eureka may issue a notice
requiring payment of the fee.
The Board considers this loan to be on arm’s length terms and expects that it will be repaid by the due date.
(3) Details about the West Cabin Loan and Couran Cove receivable are contained in Note 28.
46
EGH ANNUAL REPORT 2019
35
Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax assets have
12.
INVESTMENT IN SUBSIDIARIES
not been recognised in respect of these items until it is probable that future taxable profits will be available against which
the Group can utilise these benefits. The benefits of the Group’s recognised and unrecognised tax losses will only be
a.
the Group continues to meet the requirements of applicable tax laws to allow the losses to be carried forward and
realised if:
utilised;
b.
the Group earns taxable income in future periods; and
c. applicable tax laws are not changed, causing the losses to be unavailable.
11. LOANS RECEIVABLE
Vendor finance (1)
McIntosh Loan (2)
West Cabin Loan (3)
Couran Cove receivable (3)
Current
Non-current
Consolidated
30 June 2019
30 June 2018
$’000
$’000
486
306
320
-
1,112
698
414
1,112
528
-
-
2,260
2,788
2,332
456
2,788
(1) The Group acquired a loan book as part of the purchase of Elizabeth Vale Scenic Village Pty Ltd in 2015. Security
for the loans consists of a first ranking mortgage over the property to which the loan pertains. The loans have maturity
dates of between 5 and 8.1 years and interest is payable on these loans at a rate of between 5.50%-6.25% per annum.
(2) As part of the Couran Cove settlement, which is detailed in Note 28, a new loan of $0.35 million was assumed by Mr
Lachlan McIntosh (a Director of EGH) in his personal capacity (the McIntosh Loan). The due date for repayment is
31 December 2019. The balance of the loan receivable at 30 June 2019 was $0.31 million.
The loan is on substantially the same terms as the former loan to Couran Cove Holdings Pty Ltd. Interest accrues on
the loan at the general interest charge set by the Australian Taxation Office from time to time, which for the June 2019
quarter is set at 8.96% per annum, and repayments have been made during the year.
The loan agreement provides that a fee of up to $0.13 million may be payable by the borrower in certain circumstances.
At any time prior to 31 December 2019, subject to the satisfaction of certain conditions, Eureka may issue a notice
requiring payment of the fee.
The Board considers this loan to be on arm’s length terms and expects that it will be repaid by the due date.
(3) Details about the West Cabin Loan and Couran Cove receivable are contained in Note 28.
Comptons Caboolture Pty Ltd
Comptons Villages Australia Unit Trust
Easy Living (Bundaberg) Unit Trust
Easy Living Unit Trust
ECG No. 1 Pty Ltd
EGL Finance Pty Ltd
Elizabeth Vale Scenic Village Pty Ltd
Eureka Care Communities Pty Ltd
Eureka Care Communities (Morphetville) Pty Ltd
Eureka Care Communities (Mount Gambier) Pty Ltd
Eureka Care Communities (Mount Gambier 2) Pty Ltd
Eureka Care Communities (Mount Gambier 3) Pty Ltd
Eureka Care Communities (Salisbury) Pty Ltd
Eureka Care Communities (Wynnum) Pty Ltd
Eureka Care Communities Unit Trust
Eureka Cascade Gardens Pty Ltd
Eureka Cascade Gardens (Albert Gardens) Pty Ltd
Eureka Cascade Gardens (Ayr) Pty Ltd
Eureka Cascade Gardens (Belgian Gardens) Pty Ltd
Eureka Cascade Gardens (Bowen) Pty Ltd
Eureka Cascade Gardens (Broken Hill) Pty Ltd
Eureka Cascade Gardens (Cairns) Pty Ltd
Eureka Cascade Gardens (Couran Cove) Pty Ltd
Eureka Cascade Gardens (Gladstone) Pty Ltd
Eureka Cascade Gardens (Lismore) Pty Ltd
Eureka Cascade Gardens (Margate) Pty Ltd
Eureka Cascade Gardens (Orange) Pty Ltd
Eureka Cascade Gardens (Southport) Pty Ltd
Eureka Cascade Gardens (Terranora) Pty Ltd
Eureka Cascade Gardens (Tivoli) Pty Ltd
Eureka Cascade Gardens (Townsville) Pty Ltd
Eureka Group Care Pty Ltd
Eureka Property Pty Ltd
Eureka Whitsunday Pty Ltd
Fig Investments Pty Ltd
Eureka Living Pty Ltd
Rockham Two Pty Ltd
Rockham Unit Trust
SCV Leasing Pty Ltd
SCV Manager Pty Ltd
SCV No. 1 Pty Ltd
Country of
Incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Equity Holding
30 June 2019
%
100%
30 June 2018
%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
46
EGH ANNUAL REPORT 2019
35
47
EGH ANNUAL REPORT 2019
36
There are no significant restrictions on the Company’s ability to access or use the assets and settle the liabilities of the
Group.
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
13. JOINT VENTURE INVESTMENT
The Group has a 50% Joint Venture (JV) interest in Affordable Living Services Unit Trust and Affordable Living Unit Trust,
a JV which owns five retirement villages in Tasmania. The Group’s interest in the JV is accounted for using the equity
method in the consolidated financial statements. The accounting policies adopted by the JV are consistent with the Group’s
accounting policies. Summarised financial information of the JV, based on management accounts, and a reconciliation
with the carrying amount of the investment in the consolidated financial statements are set out below:
Movements in aggregate carrying amount:
Opening balance
Investment
Share of profit
Distributions received
Closing balance
Summarised statement of financial position of Affordable Living Unit Trust:
Current assets, including cash and cash equivalents
Non-current assets1
Current liabilities2
Non-current liabilities3
Equity
Group’s share in equity – 50%
30 June 2019
$’000
30 June 2018
$’000
4,672
-
712
-
4,500
172
(723)
-
4,661
4,672
30 June 2019
$’000
30 June 2018
$’000
125
18,844
(483)
(9,166)
9,320
4,660
497
18,776
(381)
(9,550)
9,342
4,671
Group’s carrying amount of the investment
4,660
4,671
1 Non-current assets includes investment properties of $18.84 million (2018: $18.77 million).
2 Current liabilities includes long term borrowings of $0.30 million (2018: $0.30 million).
3 Non-current liabilities includes long term borrowings of $9.16 million (2018: 9.55 million).
Summarised statement of profit or loss of Affordable Living Unit Trust:
Revenue
Cost of Sales
Finance costs
Profit before tax
Income tax expense
Profit for the year
Total comprehensive income for the year
Group’s share of profit for the year
30 June 2019
30 June 2018
$’000
$’000
3,611
(1,733)
(456)
1,422
807
(358)
(107)
342
-
-
1,422
342
1,422
342
711
171
48
EGH ANNUAL REPORT 2019
37
Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
13. JOINT VENTURE INVESTMENT
Summarised statement of financial position of Affordable Living Services Unit Trust:
Current assets, including cash and cash equivalents
Non-current assets
Current liabilities
Non-current liabilities
Equity
Group’s share in equity – 50%
Group’s carrying amount of the investment
Summarised statement of profit or loss of Affordable Living Services Unit Trust:
Revenue
Cost of Sales
Finance costs
Profit before tax
Income tax expense
Profit for the year
Total comprehensive income for the year
Group’s share of profit for the year
30 June 2019
$’000
30 June 2018
$’000
87
210
3
-
(88)
(208)
-
-
2
2
1
1
1
1
30 June 2019
$’000
30 June 2018
$’000
440
(438)
-
2
102
(100)
-
2
-
-
2
2
1
2
2
1
Group’s carrying amount of the investment
4,660
4,671
The joint venture had no other contingent liabilities or commitments as at 30 June 2019 (2018: nil).
The Group has a 50% Joint Venture (JV) interest in Affordable Living Services Unit Trust and Affordable Living Unit Trust,
a JV which owns five retirement villages in Tasmania. The Group’s interest in the JV is accounted for using the equity
method in the consolidated financial statements. The accounting policies adopted by the JV are consistent with the Group’s
accounting policies. Summarised financial information of the JV, based on management accounts, and a reconciliation
with the carrying amount of the investment in the consolidated financial statements are set out below:
Movements in aggregate carrying amount:
Opening balance
Investment
Share of profit
Distributions received
Closing balance
Summarised statement of financial position of Affordable Living Unit Trust:
Current assets, including cash and cash equivalents
Non-current assets1
Current liabilities2
Non-current liabilities3
Equity
Group’s share in equity – 50%
1 Non-current assets includes investment properties of $18.84 million (2018: $18.77 million).
2 Current liabilities includes long term borrowings of $0.30 million (2018: $0.30 million).
3 Non-current liabilities includes long term borrowings of $9.16 million (2018: 9.55 million).
Summarised statement of profit or loss of Affordable Living Unit Trust:
Revenue
Cost of Sales
Finance costs
Profit before tax
Income tax expense
Profit for the year
Total comprehensive income for the year
Group’s share of profit for the year
30 June 2019
30 June 2018
$’000
$’000
4,672
-
712
4,500
-
172
(723)
-
4,661
4,672
30 June 2019
30 June 2018
$’000
$’000
125
18,844
(483)
(9,166)
9,320
4,660
497
18,776
(381)
(9,550)
9,342
4,671
30 June 2019
30 June 2018
$’000
$’000
3,611
(1,733)
(456)
1,422
807
(358)
(107)
342
-
-
1,422
342
1,422
342
711
171
48
EGH ANNUAL REPORT 2019
37
49
EGH ANNUAL REPORT 2019
38
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
14. INVESTMENT PROPERTY
Investment properties at fair value
105,406
100,756
Consolidated
30 June 2019
$’000
30 June 2018
$’000
Movements in investment properties:
Balance at beginning of year
Acquisitions
Disposals
Capital expenditure
Transfer to inventory – Couran Cove cabins
Transfer to inventory – Terranora Manager’s residence
Transfer to non-current assets held for sale
Transfer from inventory – Terranora Manager’s residence
Net increment/(decrement) due to fair value adjustment
Balance at end of year
100,756
100,666
177
-
1,620
-
-
-
600
2,253
105,406
6,257
(791)
3,104
(2,747)
(400)
(3,894)
-
(1,439)
100,756
The Group’s investment properties are shown individually in the table below. The investments consist of 25 retirement
village assets along with associated manager’s units and other rental units. The Group considers investment properties
reside in one class of asset, being seniors’ rental villages.
At 30 June 2019, the Group undertook a review of the fair value of all investment properties held and recorded a net
revaluation gain of $2.25 million (2018: loss of $1.44 million). This adjustment related to all assets in the asset class and
was based on inputs and assumptions disclosed in Note 23.
The net change in fair value is recognised in profit or loss as “Net gain/(loss) on change in fair value of investment property”.
Fair value hierarchy disclosures for investment properties have been provided in Note 23.
Amounts recognised in profit or loss for investment property:
Rental income
Direct operating expenses generating rental income
Net gain/(loss) on revaluation of investment property to fair value
Consolidated
30 June 2019
$’000
30 June 2018
$’000
15,847
(9,500)
2,253
15,674
(9,596)
(1,439)
The Group has no restrictions on the realisability of its investment properties and no contractual obligations to either
purchase, construct or develop investment properties or for repairs, maintenance and enhancements. Certain assets are
pledged as security for borrowings – Refer to Note 19(a).
50
EGH ANNUAL REPORT 2019
39
Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
14. INVESTMENT PROPERTY
Details of investment properties are as follows:
Consolidated
30 June 2019
30 June 2018
$’000
$’000
Property
Location
Acquisition
date
Carrying
amount
Carrying
amount
30 Jun 19
30-Jun-18
$’000
$’000
Investment properties at fair value
105,406
100,756
Movements in investment properties:
Balance at beginning of year
Acquisitions
Disposals
Capital expenditure
Transfer to inventory – Couran Cove cabins
Transfer to inventory – Terranora Manager’s residence
Transfer to non-current assets held for sale
Transfer from inventory – Terranora Manager’s residence
Net increment/(decrement) due to fair value adjustment
Balance at end of year
100,756
100,666
177
1,620
-
-
-
-
600
2,253
105,406
6,257
(791)
3,104
(2,747)
(400)
(3,894)
-
(1,439)
100,756
The Group’s investment properties are shown individually in the table below. The investments consist of 25 retirement
village assets along with associated manager’s units and other rental units. The Group considers investment properties
reside in one class of asset, being seniors’ rental villages.
At 30 June 2019, the Group undertook a review of the fair value of all investment properties held and recorded a net
revaluation gain of $2.25 million (2018: loss of $1.44 million). This adjustment related to all assets in the asset class and
was based on inputs and assumptions disclosed in Note 23.
The net change in fair value is recognised in profit or loss as “Net gain/(loss) on change in fair value of investment property”.
Fair value hierarchy disclosures for investment properties have been provided in Note 23.
Amounts recognised in profit or loss for investment property:
Rental income
Direct operating expenses generating rental income
Net gain/(loss) on revaluation of investment property to fair value
The Group has no restrictions on the realisability of its investment properties and no contractual obligations to either
purchase, construct or develop investment properties or for repairs, maintenance and enhancements. Certain assets are
pledged as security for borrowings – Refer to Note 19(a).
Consolidated
30 June 2019
30 June 2018
$’000
$’000
15,847
(9,500)
2,253
15,674
(9,596)
(1,439)
Ayr QLD
Belgian Gardens QLD
Bilambil Heights NSW
Bowen QLD
Broken Hill NSW
Bundaberg QLD
Caboolture QLD
Caboolture QLD
Cairns QLD
Koinonia Village
92 Primrose Street Belgian Gardens
61 Marana Street Bilambil Heights (Terranora)
Bowen Village
Broken Hill Village
Avenell Village on Vasey Bundaberg
Lot 43 134-136 King Street Caboolture (manager’s unit)
80 134-136 King Street Caboolture (manager’s unit)
Cascade Gardens Cairns
Lot 51 Christie Downs Community Centre (manager’s unit) Christie Downs SA
Elizabeth Vale SA
Elizabeth Vale Scenic Village 1
Elizabeth Vale SA
Elizabeth Vale Scenic Village 2
Frenchville QLD
Rockhampton Village 1
Frenchville QLD
Rockhampton Village 2
Gladstone QLD
15/8 Wicks Street, New Auckland
Gympie QLD
Freshwater Villas
Hackham SA
Lot 49 Hackham Community Centre (manager’s unit)
Hackham SA
Lot 97 144 Main South Road Hackham
Lavington NSW
33 Mardross Court Lavington
Lismore NSW
Lismore Village
Mackay QLD
Cascade Gardens Mackay
Margate QLD
43 Macdonnell Court Margate
Mildura VIC
344 San Mateo Avenue Mildura
Mt Gambier SA
Mt Gambier 2 Retirement Village
Orange NSW
Albert Street Gardens Village
Salisbury East SA
Salisbury
Shepparton VIC
60 Poplar Avenue Shepparton
Southport QLD
7 Meron Street Southport
Tivoli QLD
Lot 6,8,9,20,21&22 56A Moores Pocket Road Tivoli
Townsville QLD
Galilee Lodge
Whyalla SA
Myall Place Retirement Village
Wynnum QLD
40 Federation Street Wynnum
In Progress
Investment Property Enhancements
Aug-17
Jun-16
Dec-15
Dec-15
Dec-16
Oct-14
May-14
Jan-15
Jul-14
Dec-14
Oct-14
Apr-15
Oct-15
Dec-15
Sep-16
Jul-17
Oct-14
May-15
Jun-15
May-15
Apr-14
Jun-16
Jun-15
Dec-15
Sep-16
Feb-16
Jun-15
Jun-16
Mar-15
Aug-17
Jan-15
Oct-15
Jun-17
1,260
1,382
2,900
1,543
2,016
5,060
268
271
4,680
301
5,662
4,740
3,010
5,520
50
4,400
266
285
4,700
5,657
9,156
4,217
4,550
3,314
5,338
4,094
4,290
4,233
541
922
4,527
5,540
714
1,245
1,364
2,300
1,523
1,979
5,250
268
265
4,610
299
5,237
4,350
3,054
5,485
50
4,367
266
285
4,034
5,000
8,493
4,187
4,052
3,830
5,318
3,656
4,138
4,219
535
917
4,340
5,090
750
105,406
100,756
50
EGH ANNUAL REPORT 2019
39
51
EGH ANNUAL REPORT 2019
40
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
15. PROPERTY, PLANT & EQUIPMENT
Buildings at cost
Accumulated depreciation
Plant & equipment at cost
Accumulated depreciation
Motor Vehicles at cost
Accumulated depreciation
Total property, plant & equipment
Consolidated
30 June 2019
$’000
30 June 2018
$’000
619
(202)
417
302
(124)
178
81
(17)
64
659
625
(191)
434
345
(134)
211
54
(17)
37
682
Reconciliation of movements in property, plant & equipment:
Opening balance at 1 July 2017
Additions at cost
Disposals
Depreciation expense
Closing balance at 30 June 2018
Opening balance at 1 July 2018
Additions at cost
Disposals
Depreciation expense
Closing balance at 30 June 2019
Buildings
$’000
Plant &
Equipment
$’000
Motor
Vehicle
$’000
Total
$’000
451
-
-
(17)
434
434
-
-
(17)
417
1,146
35
(890)
(80)
211
211
17
-
(50)
178
68
-
(17)
(14)
37
37
41
(7)
(7)
64
1,665
35
(907)
(111)
682
682
58
(7)
(74)
659
52
EGH ANNUAL REPORT 2019
41
Buildings at cost
Accumulated depreciation
Plant & equipment at cost
Accumulated depreciation
Motor Vehicles at cost
Accumulated depreciation
Total property, plant & equipment
Reconciliation of movements in property, plant & equipment:
Opening balance at 1 July 2017
Additions at cost
Disposals
Depreciation expense
Closing balance at 30 June 2018
Opening balance at 1 July 2018
Additions at cost
Disposals
Depreciation expense
Closing balance at 30 June 2019
Plant &
Buildings
Equipment
$’000
$’000
Motor
Vehicle
$’000
Total
$’000
451
(17)
434
434
-
-
-
-
(17)
417
1,146
35
(890)
(80)
211
211
17
-
(50)
178
68
-
(17)
(14)
37
37
41
(7)
(7)
64
1,665
35
(907)
(111)
682
682
58
(7)
(74)
659
Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
15. PROPERTY, PLANT & EQUIPMENT
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
16. INTANGIBLE ASSETS
Consolidated
30 June 2019
30 June 2018
$’000
$’000
619
(202)
417
302
(124)
178
81
(17)
64
659
625
(191)
434
345
(134)
211
54
(17)
37
682
Management rights – at cost
Accumulated amortisation
Carrying amount of management rights
Rent rolls – at cost
Accumulated amortisation
Carrying amount of rent rolls
Other intangibles – at cost
Accumulated amortisation
Carrying amount of other intangibles
Goodwill
Total intangible assets
Consolidated
30 June 2019
$’000
30 June 2018
$’000
4,695
(1,404)
3,291
4,695
(1,258)
3,437
140
(45)
95
41
(34)
7
140
(42)
98
577
(32)
545
1,955
1,955
5,348
6,035
The Group’s business activities include the ownership and management (through management rights agreements) of
seniors’ rental accommodation throughout Australia. The Group’s intangible assets are management rights and goodwill.
These intangible assets, although separately classified in accordance with accounting standards, relate to the
management of seniors’ rental accommodation. The separate categorisation of these assets has arisen from acquisitions.
During the year, the Group divested certain trading and operating licences. These were included in other intangibles.
Impairment tests for Goodwill
Goodwill is monitored by the Board of Directors (who are identified as the chief operating decision makers) based on the
net profit of the villages that EGH manages, after allowing for overhead costs attributable to the management of these
villages. Goodwill has been allocated to the property management cash generating unit.
The Group tests goodwill for impairment on an annual basis. The recoverable amount of a cash generating unit (CGU) is
determined based on value-in-use calculations which require the use of assumptions.
The calculations use cash flow projections based on financial budgets covering a five-year period. Cash flows beyond the
five-year period are extrapolated using an estimated long term growth rate.
Key assumptions are those to which the recoverable amount of an asset or cash-generating units is most sensitive. The
following key assumptions were used in the discounted cash flow model:
•
•
•
•
•
•
cash flows were projected over a five year period by applying a 2% growth rate (2018: 2%) to the most recent
year's cash flows;
the terminal value was calculated using a growth rate of 2% (2018: 2%);
cash flows have been discounted using a pre-tax discount rate of 15% (2018: 15%);
cash flows do not take into account the management of any new villages; and
cash flows are based on historical results.
existing management contracts had a cash flow estimate based on current earnings applied to a multiple
applied from an independent management rights broker.
52
EGH ANNUAL REPORT 2019
41
53
EGH ANNUAL REPORT 2019
42
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Reconciliation of movements in intangible assets:
Opening balance at 1 July 2017
3,471
102
1,955
799
6,327
Management
Rights
$’000
Rent
Rolls
$’000
Goodwill
$’000
Other
intangibles
$’000
Total
$’000
Additions at cost
Transfer to assets held for sale
Amortisation expense
Closing balance at 30 June 2018
Opening balance at 1 July 2018
Additions at cost
Disposals
Amortisation expense
Closing balance at 30 June 2019
100
-
(134)
3,437
3,437
-
-
(146)
3,291
-
-
(4)
98
98
-
-
(3)
95
-
-
-
1,955
-
(252)
(2)
545
100
(252)
(140)
6,035
1,955
545
6,035
-
-
-
1,955
-
(536)
(2)
7
-
(536)
(151)
5,348
The remaining amortisation period for the management rights, on a weighted average basis, is 20 years (2018: 21 years).
17. TRADE & OTHER PAYABLES
Trade creditors and accruals
Retirement Village Resident Loans
Acquisition related accruals
Consolidated
30 June 2019
$’000
30 June 2018
$’000
1,367
98
207
1,672
2,255
96
358
2,709
The carrying amounts of trade and other payables are considered to be the same as their fair value, due to their
short term nature.
18. PROVISIONS
Current
Employee benefits
Non-current
Employee benefits
Consolidated
30 June 2019
$’000
30 June 2018
$’000
416
416
12
12
399
399
9
9
54
EGH ANNUAL REPORT 2019
43
Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Reconciliation of movements in intangible assets:
19. OTHER FINANCIAL LIABILITIES
Opening balance at 1 July 2017
3,471
102
1,955
799
6,327
Management
Rights
$’000
Rent
Rolls
$’000
Goodwill
intangibles
$’000
Other
$’000
Total
$’000
Additions at cost
Transfer to assets held for sale
Amortisation expense
Closing balance at 30 June 2018
Additions at cost
Disposals
Amortisation expense
100
-
(134)
3,437
3,437
-
-
(146)
3,291
1,955
-
-
-
-
-
-
-
-
(4)
98
98
-
-
(3)
95
-
(252)
(2)
545
-
(536)
(2)
7
100
(252)
(140)
6,035
-
(536)
(151)
5,348
Opening balance at 1 July 2018
1,955
545
6,035
Current
Commercial bills – secured
Insurance funding
Finance lease
Motor vehicle loan
Non-current
Commercial bills – secured
Borrowing costs
(a) Commercial bills - secured
Consolidated
30 June 2019
$’000
30 June 2018
$’000
(a)
(a)
2,262
110
-
-
2,372
47,471
(353)
47,118
17
144
1
1
163
55,837
(517)
55,320
Closing balance at 30 June 2019
1,955
As at 30 June 2019, the balance included accrued interest of $0.50 million (2018: $0.02 million) and the Group has access
to the following facilities:
The remaining amortisation period for the management rights, on a weighted average basis, is 20 years (2018: 21 years).
National Australia Bank (“NAB”):
The carrying amounts of trade and other payables are considered to be the same as their fair value, due to their
17. TRADE & OTHER PAYABLES
Trade creditors and accruals
Retirement Village Resident Loans
Acquisition related accruals
short term nature.
18. PROVISIONS
Current
Employee benefits
Non-current
Employee benefits
Consolidated
30 June 2019
30 June 2018
$’000
$’000
1,367
98
207
1,672
2,255
96
358
2,709
Consolidated
30 June 2019
30 June 2018
$’000
$’000
416
416
12
12
399
399
9
9
• Maximum limit of $55.00 million. Interest is payable at a fixed rate of 4.97% on $35.0 million and at variable rates
(currently 3.27%) on the remaining drawn amount. The facility expires on 31 December 2021. Quarterly interest
only repayments are required. At 30 June 2019, total drawings on the facility were $47.47 million.
•
The facility was renegotiated during the year, with two facilities being consolidated into one facility maturing on
31 December 2021. This represented a two year extension for a $20.00 million component of the facility.
• Prior to the consolidation, the details of the facilities were as follows:
Facility 1 – maximum limit of $24.5 million until 29 September 2018, reducing to $20.0 million until 31 December
2019. The reduction of the facility limit did not require the repayment of any drawn debt within 12 months of 30
June 2018. Interest was payable at a variable rate on this facility (2018: 4.31%). At 30 June 2018, $19.1 million
had been drawn on the facility.
Facility 2 – maximum limit of $35.0 million, expiring on 31 December 2021. Monthly interest only repayment.
Interest on this facility was fixed until 31 December 2021. Interest was payable at the rate of 4.97%.
At 30 June 2018, total drawings on these facilities were $54.1 million.
Westpac Banking Corporation (“Westpac”):
• Commercial bill – secured fully drawn limit of $1.76 million (2018: $1.76 million). The facility expires on 29
November 2019 and it is the Group’s intention to refinance the loan with NAB upon expiry. Interest is payable at
a variable rate on this facility (currently 4.87% (2018: 5.44%).
The NAB facilities and the Westpac facility are secured against the Group’s property assets of $115.15 million (2018:
$114.29 million). This value represents the carrying value of assets pledged by the Group.
The commercial bill facilities are subject to covenants which are commensurate with normal secured lending terms.
The Group complied with its covenants throughout the current and prior year.
54
EGH ANNUAL REPORT 2019
43
55
EGH ANNUAL REPORT 2019
44
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
20. SHARE CAPITAL AND RESERVES
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and proceeds on winding up of the Company in proportion to
the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a
meeting in person or by proxy is entitled to one vote, and on a poll, each share is entitled to one vote.
Ordinary shares have no par value and the company does not have a limited amount of authorised capital.
Balance at start of year
Shares issued at $0.273 for acquisition of management
rights
Capital raising costs
Consolidated
30 June 2019
Number
30 June 2019
$’000
30 June 2018
Number
30 June 2018
$’000
230,037,638
94,352
229,671,923
94,255
-
-
-
-
365,715
-
100
(3)
On issue at end of the year
230,037,638
94,352
230,037,638
94,352
Share Buy Back
The Company extended the share buy back period for a further 1 year from 16 March 2019. No ordinary shares were
bought back and cancelled during the year (2018: nil).
Equity Reserves
Share based payments
The share-based payment reserve is used to recognise the value of equity-settled share-based payments provided to
employees, including key management personnel, as part of their remuneration. Refer to Note 26 for further details of
these plans.
As at 1 July 2017
Share-based payments expense during the year
At 30 June 2018
Share options and share rights forfeited during the year
At 30 June 2019
Share based
payments
$000
-
12
12
(12)
-
56
EGH ANNUAL REPORT 2019
45
Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
20. SHARE CAPITAL AND RESERVES
Ordinary shares
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
21. CASH FLOW INFORMATION
Ordinary shares entitle the holder to participate in dividends and proceeds on winding up of the Company in proportion to
the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a
meeting in person or by proxy is entitled to one vote, and on a poll, each share is entitled to one vote.
Ordinary shares have no par value and the company does not have a limited amount of authorised capital.
(a) Reconciliation of cash
Cash at bank and on hand
Consolidated
30 June 2019
$’000
30 June 2018
$’000
3,060
1,986
(b) Reconciliation of profit/(loss) for the year to net cash flow from operating activities
The Company extended the share buy back period for a further 1 year from 16 March 2019. No ordinary shares were
(Gain)/Loss on revaluation – investment properties and other assets
Profit/(loss) for the year
Depreciation and amortisation
Couran Cove inventory write down and transaction costs
Couran Cove land option write down
Share based
payments
$000
-
12
12
(12)
-
Share of profit of joint venture
Distribution received from joint venture
(Gain)/loss on sale of investment property
(Gain)/loss on sale of management rights and managers’ units
(Gain)/loss on sale of gaming licenses
(Gain)/loss on sale of property, plant and equipment
(Increase)/decrease in:
- Trade and other receivables
- Other current assets
- Other capital reserves
Increase/(decrease) in:
- Trade and other payables
- Provisions
- Other financial liabilities
Net cash flow from operating activities
Consolidated
30 June 2019
30 June 2018
$’000
$’000
6,794
225
-
-
(1,953)
(712)
723
-
-
(69)
3
(249)
(11)
12
(4)
20
(34)
4,745
(276)
251
1,124
1,763
1,692
(172)
-
(501)
17
(60)
-
398
(81)
(12)
(47)
(26)
144
4,214
30 June 2019
30 June 2019
30 June 2018
30 June 2018
Number
$’000
Number
$’000
Consolidated
Balance at start of year
230,037,638
94,352
229,671,923
94,255
Shares issued at $0.273 for acquisition of management
rights
Capital raising costs
-
-
-
-
365,715
-
100
(3)
On issue at end of the year
230,037,638
94,352
230,037,638
94,352
The share-based payment reserve is used to recognise the value of equity-settled share-based payments provided to
employees, including key management personnel, as part of their remuneration. Refer to Note 26 for further details of
bought back and cancelled during the year (2018: nil).
Share Buy Back
Equity Reserves
Share based payments
these plans.
Share-based payments expense during the year
Share options and share rights forfeited during the year
As at 1 July 2017
At 30 June 2018
At 30 June 2019
Cash receipts from the following transactions have been reclassified from operating activities to investing activities:
• Sale of Terranora units $0.54 million (2018: $nil);
•
• Sale of Couran Cove units $2.01 million (2018: $0.16 million).
Loan repayments from Couran Cove Holdings Pty Ltd $1.59 million (2018: $0.25 million); and
Cash payments from the following transactions have been reclassified from operating activities to investing activities:
• Capitalised development and selling costs on inventory held at Terranora $1.09 million (2018: $1.67 million);
and
Legal fees and sales commissions paid for the sale of Couran Cove units $0.18 million in (2018: $0.02 million).
•
The comparatives have been updated to reflect the above changes.
(c) Non-cash investing and financing activities
During the year, the Group acquired goods and services of $0.03 million with Bartercard dollars.
56
EGH ANNUAL REPORT 2019
45
57
EGH ANNUAL REPORT 2019
46
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
22. FINANCIAL INSTRUMENTS
Overall policy
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.
The Board of Directors is responsible for developing and monitoring the Group’s risk management policy to identify and
analyse the risks faced by the entity, to set limits and controls, and to monitor risks and adherence to limits. Risk
management policy and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.
The Group aims to develop a disciplined and constructive control environment in which all employees understand their
roles and obligations.
a) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations and arises principally from the Group’s receivables from customers and amounts due from the
seniors’ independent living communities in accordance with management agreements in place.
Credit risk arises principally from the Group’s cash and cash equivalents, receivables, other assets and loans receivable.
Maximum exposure to credit risk
Cash and cash equivalents
Trade and other receivables
Loans receivable
Bartercard
Other assets
Consolidated
30 June 2019
$’000
30 June 2018
$’000
3,060
391
1,112
593
1,237
6,393
1,986
142
2,788
627
1,237
6,780
Cash and cash equivalents
Deposits of cash are only held with approved banks and financial institutions. The Group predominantly banks with National
Australia Bank.
Trade and other receivables
The Group’s exposure to credit risk is influenced mainly by the individual characteristic of each customer or resident. The
Group has a diverse range of customers and residents and therefore there is no significant concentration of credit risk with
any single counterparty or group of counterparties.
The Group has a credit policy under which each new customer is analysed individually for creditworthiness before the
Group does business with them. The Group monitors and follows-up its accounts receivable to ensure collections are
being made promptly in accordance with contractual terms and conditions and actively pursues amounts past due.
Where applicable, an allowance for impairment has been made, that represents the estimate of impairment losses in
respect to trade and other receivables. The Group has no concentrations of credit risk that have not been provided for. A
significant component of trade debtors that are past due and greater than 90 days ageing are either on a payment plan or
considered recoverable. The Group has not provided for the remaining amounts past due as management believes these
amounts will be received.
The ageing of trade receivables and other receivables at the reporting date was:
Due 0-30 days
Past due 30-60 days
Past due 60-90 days
Past due 90 + days
Consolidated
30 June 2019
30 June 2018
Gross amount
receivable
$’000
Provision for
Impairment
$’000
Gross amount
receivable
$’000
Provision for
Impairment
$’000
391
-
-
-
391
58
-
-
-
-
-
255
-
1
62
318
(117)
-
-
(59)
(176)
EGH ANNUAL REPORT 2019
47
Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.
The Board of Directors is responsible for developing and monitoring the Group’s risk management policy to identify and
analyse the risks faced by the entity, to set limits and controls, and to monitor risks and adherence to limits. Risk
management policy and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.
The Group aims to develop a disciplined and constructive control environment in which all employees understand their
Loans receivable
The Group’s exposure to credit risk arises from the vendor finance loans which were part of the acquisition of Elizabeth
Vale Scenic Village Pty Ltd and the loans receivable as detailed in Note 28 being the McIntosh Loan and West Cabin Loan.
The vendor finance loan book consists of 10 individual loan contracts. The Group manages the units which are being held
as security for the loans. Repayments are received monthly in accordance with the individual contracts or alternative
agreed arrangements in place.
Where applicable, an allowance for impairment has been made that represents the estimate of impairment losses in
relation to the loans receivable. The Group has no concentrations of credit risk that have not been provided for.
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations and arises principally from the Group’s receivables from customers and amounts due from the
seniors’ independent living communities in accordance with management agreements in place.
Credit risk arises principally from the Group’s cash and cash equivalents, receivables, other assets and loans receivable.
Loans receivable
Current
Non-current
Consolidated
30 June 2019
30 June 2018
Gross amount
receivable
$’000
Provision for
Impairment
$’000
Gross amount
receivable
$’000
Provision for
Impairment
$’000
698
414
1,112
-
-
-
2,332
456
2,788
-
-
-
Bartercard
Bartercard is an alternative currency and operates as a trade exchange. Bartercard is recorded at cost, or at fair value,
where Bartercard has been advanced to suppliers in exchange for future supply of goods. Eureka will no longer receive
Bartercard dollars except for some committed Terranora sales. The use of Bartercard dollars to purchase goods and
services is actively managed to reduce this exposure.
Other assets
The Couran Cove option is a right of first refusal for the Group to purchase proposed cabin sites at Couran Cove to offset
against a $3.00 million loan receivable from CCH Developments No 1 Pty Ltd. It is secured by a real property mortgage
over the proposed cabin sites. Refer Note 28 for further details.
b) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach
to managing liquidity is to ensure, as far as possible, that it has sufficient liquidity to meet its liabilities when due. This
process involves the review and updating of cash flow forecasts and, when necessary, the obtaining of credit standby
arrangements and loan facilities.
There were unused borrowing facilities of $7.53 million at the reporting date.
The tables below show the Group’s financial liabilities classified into relevant maturity groupings based on their contractual
maturities.
30 June 2019
Trade and other payables
Commercial bills 1
Other financial liabilities
Total
30 June 2018
Trade and other payables
Commercial bills 1
Other financial liabilities
Total
Contractual
cash flows
$’000
Less than 6
months
$’000
Consolidated
6 - 12
months
$’000
1 – 2 years
$’000
More than 2
years
$’000
1,367
55,315
110
56,792
1,367
3,406
110
4,883
-
-
-
1,110
2,218
48,581
-
-
-
1,110
2,218
48,581
Contractual
cash flows
$’000
Less than 6
months
$’000
Consolidated
6 - 12
months
$’000
1 – 2 years
$’000
More than 2
years
$’000
2,255
63,310
146
65,711
2,255
1,345
146
3,746
-
-
-
1,329
23,027
37,609
-
-
-
1,329
23,027
37,609
1 This amount includes estimated interest during the contractual period.
59
EGH ANNUAL REPORT 2019
48
22. FINANCIAL INSTRUMENTS
Overall policy
roles and obligations.
a) Credit risk
Maximum exposure to credit risk
Cash and cash equivalents
Trade and other receivables
Loans receivable
Bartercard
Other assets
Cash and cash equivalents
Australia Bank.
Trade and other receivables
Consolidated
30 June 2019
30 June 2018
$’000
$’000
3,060
391
1,112
593
1,237
6,393
1,986
142
2,788
627
1,237
6,780
Deposits of cash are only held with approved banks and financial institutions. The Group predominantly banks with National
The Group’s exposure to credit risk is influenced mainly by the individual characteristic of each customer or resident. The
Group has a diverse range of customers and residents and therefore there is no significant concentration of credit risk with
any single counterparty or group of counterparties.
The Group has a credit policy under which each new customer is analysed individually for creditworthiness before the
Group does business with them. The Group monitors and follows-up its accounts receivable to ensure collections are
being made promptly in accordance with contractual terms and conditions and actively pursues amounts past due.
Where applicable, an allowance for impairment has been made, that represents the estimate of impairment losses in
respect to trade and other receivables. The Group has no concentrations of credit risk that have not been provided for. A
significant component of trade debtors that are past due and greater than 90 days ageing are either on a payment plan or
considered recoverable. The Group has not provided for the remaining amounts past due as management believes these
amounts will be received.
The ageing of trade receivables and other receivables at the reporting date was:
Due 0-30 days
Past due 30-60 days
Past due 60-90 days
Past due 90 + days
Consolidated
30 June 2019
30 June 2018
Gross amount
Provision for
Gross amount
Provision for
receivable
Impairment
receivable
Impairment
$’000
$’000
$’000
$’000
391
-
-
-
391
58
-
-
-
-
-
255
-
1
62
318
(117)
-
-
(59)
(176)
EGH ANNUAL REPORT 2019
47
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
c) Market risk
Market risk is the risk that changes in market prices such as interest rates will affect the Group’s income or the value of its
holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures
within acceptable parameters, while optimising the return.
d) Interest rate risk
The Group’s exposure to market interest rates arises from long term borrowings in the form of commercial bills. Borrowings
issued at variable rates expose the Group to interest rate risk. $14.2 million of the commercial bills are at variable rates
while $35.0 million is fixed (refer to Note 19). The variable portion of the debt does not expose the Group to any material
interest rate risk.
The Group regularly reviews its interest rate exposure, taking into account potential renewals of existing positions,
alternative financing, alternate hedging positions and the mix of fixed and variable interest rates.
23. FAIR VALUE MEASUREMENTS
Fair value hierarchy
Investment properties and retirement village resident loans are measured at fair value, using a three level hierarchy, based
on the lowest level of input that is significant to the entire fair value measurement, being:
•
•
•
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access
at the measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly
Level 3: Unobservable inputs for the asset or liability
There were no transfers between levels during the financial year. The Group’s policy is to recognise transfers into and
transfers out of fair value hierarchy levels as at the end of the reporting period.
The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair
values due to their short-term nature.
Fair value of financial instruments (unrecognised)
The Group has a number of financial assets and financial liabilities (loans receivable and commercial bills) which are not
measured at fair value in the statement of financial position. The fair values are not materially different to their carrying
amounts, since the interest receivable/payable is either close to current market rates or the instruments are short-term in
nature, and therefore have not been disclosed. Refer to Note 28 for details regarding the fair value and impairment
assessment of the Couran Cove land option. These are not shown in the table below.
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
Consolidated – 2019
Assets
Investment property
Total assets
Liabilities
Retirement Village Resident Loans
Total liabilities
Consolidated – 2018
Assets
Investment property
Total assets
Liabilities
Retirement Village Resident Loans
Total liabilities
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
105,406
105,406
105,406
105,406
98
98
98
98
100,756
100,756
100,756
100,756
96
96
96
96
60
EGH ANNUAL REPORT 2019
49
Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
c) Market risk
d) Interest rate risk
interest rate risk.
Market risk is the risk that changes in market prices such as interest rates will affect the Group’s income or the value of its
holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures
within acceptable parameters, while optimising the return.
The Group’s exposure to market interest rates arises from long term borrowings in the form of commercial bills. Borrowings
issued at variable rates expose the Group to interest rate risk. $14.2 million of the commercial bills are at variable rates
while $35.0 million is fixed (refer to Note 19). The variable portion of the debt does not expose the Group to any material
The Group regularly reviews its interest rate exposure, taking into account potential renewals of existing positions,
alternative financing, alternate hedging positions and the mix of fixed and variable interest rates.
23. FAIR VALUE MEASUREMENTS
Fair value hierarchy
Investment properties and retirement village resident loans are measured at fair value, using a three level hierarchy, based
on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
•
•
•
at the measurement date
directly or indirectly
Level 3: Unobservable inputs for the asset or liability
There were no transfers between levels during the financial year. The Group’s policy is to recognise transfers into and
transfers out of fair value hierarchy levels as at the end of the reporting period.
The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair
values due to their short-term nature.
Fair value of financial instruments (unrecognised)
The Group has a number of financial assets and financial liabilities (loans receivable and commercial bills) which are not
measured at fair value in the statement of financial position. The fair values are not materially different to their carrying
amounts, since the interest receivable/payable is either close to current market rates or the instruments are short-term in
nature, and therefore have not been disclosed. Refer to Note 28 for details regarding the fair value and impairment
assessment of the Couran Cove land option. These are not shown in the table below.
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
Consolidated – 2019
Assets
Investment property
Total assets
Liabilities
Total liabilities
Retirement Village Resident Loans
Consolidated – 2018
Assets
Investment property
Total assets
Retirement Village Resident Loans
Liabilities
Total liabilities
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
105,406
105,406
105,406
105,406
98
98
98
98
100,756
100,756
100,756
100,756
96
96
96
96
Valuation techniques for fair value measurements categorised within level 2 and level 3
At the end of each reporting period, the directors update their assessment of the fair value of each property, taking into
account the most recent independent valuations. The directors determine a property’s value within a range of reasonable
fair value estimates.
Investment properties may be valued using 2 methods, the capitalisation method and direct comparison approach. Under
the capitalisation method, fair value is estimated using assumptions regarding the expectation of future benefits. The
capitalisation method involves estimating the expected income projections of the property into perpetuity and applying a
capitalisation rate. The capitalisation rate is based on current market evidence. Future income projections take into account
occupancy, rental income and operating expenses.
Under the direct comparison approach, key inputs are the recent sales of comparable units in comparable villages. All
resulting fair value estimates for properties are included in level 3.
Valuation processes
Independent valuations have been obtained for a number of investment property assets during the year ended 30 June
2019 in accordance with the Group’s accounting policy and were used as the basis for determining their fair values. Valuer
selection criteria include market knowledge, experience and qualifications, reputation, independence and whether
professional standards are maintained.
Where an independent valuation was not performed on an investment property as at 30 June 2019, management has
estimated the fair values by performing internal valuations based on the capitalisation method taking into account the most
recent external valuation undertaken by an independent valuer.
Retirement village resident loans are measured as the ingoing contribution less deductions over time for the period of
tenancy as a percentage of the length of expected residence term. Although the expected average residency term is
between one to ten years, these obligations are classified as current liabilities, as required by the Accounting Standards,
because the Group does not have an unconditional right to defer settlement to more than twelve months after reporting
date. The liability is stated net of accrued deferred management fees at reporting date, because the Group’s contract with
residents require net settlement of those obligations. These are included in trade payables.
The level 3 assets significant unobservable inputs and sensitivity are as follows:
Description
Valuation
technique
Significant
unobservable
inputs
Range
(weighted average)
2019
2018
Investment
properties –
Retirement
Villages
Capitalisation
method 1
Capitalisation
rate
8.25%-11.00%
(10.22%) 2
8.25%-12.00%
(10.31%) 2
Stabilised
occupancy
85%-100%
(93%)
86%-100%
(94%)
Investment
properties –
Individual
Village Units
Direct
comparison
approach
Comparable
sales evidence
N/A
N/A
Retirement
village resident
loans
Ingoing
contribution less
deductions for
length of stay
Estimated length
of stay of
residents
1 – 10 years
1 – 10 years
Relationship of
unobservable
input to fair value
Capitalisation rate
has an inverse
relationship to
valuation.
Occupancy has a
direct correlation to
valuation (i.e. the
higher the
occupancy, the
greater the value).
Comparable sales
evidence has a
direct relationship
to valuation.
The longer the
length of stay, the
lower the value of
resident loans.
60
EGH ANNUAL REPORT 2019
49
61
(1) Significant changes in any of the significant unobservable valuation inputs under the capitalisation method would result in a
(2)
significantly lower or higher fair value measurement.
Investment properties include three unit complexes with a capitalisation rate range of 6% to 6.5% and the NDIS facility with a
capitalisation rate of 16%. These have been excluded from the weighted average calculation above.
EGH ANNUAL REPORT 2019
50
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Fair value measurements using significant unobservable inputs (level 3)
Movements in level 3 asset items during the current and previous financial year are set out in Note 14.
24. COMMITMENTS
a) Operating leases: Group as lessee
Non‑cancellable operating leases
The Group leases various managers’ units under non-cancellable operating leases expiring within two to twenty-five years.
The leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are
renegotiated.
The Group also leases office space. The amount disclosed for the lease of office space does not include any adjustments
for CPI or market rental reviews.
Within 1 year
Greater than 1 year but not longer than 5 years
Greater than 5 years
b) Capital expenditure
The Group had no capital commitments as at 30 June 2019.
25.
EARNINGS PER SHARE
Consolidated
30 June 2019
$’000
30 June 2018
$’000
274
507
604
1,385
270
617
729
1,616
Net profit/(loss) used in calculating basic and diluted earnings per share
Weighted average number of ordinary shares used in calculating basic
earnings per share
Weighted average number of ordinary shares & potential ordinary shares used
in calculating diluted earnings per share
Basic earnings per share
Diluted earnings per share
30 June 2019
$’000
30 June 2018
$’000
6,794
(276)
#’000
230,686
#’000
230,686
230,686
230,686
2.95 cents
(0.12) cents
2.95 cents
(0.12) cents
For the year ended 30 June 2019, there were no dilutive transactions to be included in the diluted earnings per share
calculation.
26. SHARE BASED PAYMENTS
The Company has a long term incentive (LTI) plan pursuant to which share rights and options were granted to key
management personnel in the prior year, subject to service and performance conditions.
Share rights
Rights were issued at face value having regard to the volume weighted average share price of shares over the 30 trading
days following the announcement of the company’s 2017 results.
The share rights did not have any voting rights, rights to dividends, rights to capital and had no entitlement to participate
in new issues offered to ordinary shareholders of the company.
A total of 878,465 share rights were issued during the prior year but 559,090 lapsed upon the retirement of the Chief
Executive Officer. The remaining 319,375 share rights were forfeited during the current year upon the resignation of the
former Chief Financial Officer. No share rights were issued during the year or outstanding at 30 June 2019.
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EGH ANNUAL REPORT 2019
51
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Fair value measurements using significant unobservable inputs (level 3)
Movements in level 3 asset items during the current and previous financial year are set out in Note 14.
24. COMMITMENTS
a) Operating leases: Group as lessee
Non‑cancellable operating leases
renegotiated.
for CPI or market rental reviews.
The Group leases various managers’ units under non-cancellable operating leases expiring within two to twenty-five years.
The leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are
Within 1 year
Greater than 5 years
Greater than 1 year but not longer than 5 years
b) Capital expenditure
The Group had no capital commitments as at 30 June 2019.
25.
EARNINGS PER SHARE
Net profit/(loss) used in calculating basic and diluted earnings per share
Weighted average number of ordinary shares used in calculating basic
earnings per share
Weighted average number of ordinary shares & potential ordinary shares used
in calculating diluted earnings per share
Consolidated
30 June 2019
30 June 2018
$’000
$’000
274
507
604
1,385
270
617
729
1,616
30 June 2019
30 June 2018
$’000
$’000
6,794
(276)
#’000
230,686
#’000
230,686
230,686
230,686
2.95 cents
(0.12) cents
2.95 cents
(0.12) cents
Basic earnings per share
Diluted earnings per share
calculation.
26. SHARE BASED PAYMENTS
For the year ended 30 June 2019, there were no dilutive transactions to be included in the diluted earnings per share
The Company has a long term incentive (LTI) plan pursuant to which share rights and options were granted to key
management personnel in the prior year, subject to service and performance conditions.
The share rights did not have any voting rights, rights to dividends, rights to capital and had no entitlement to participate
in new issues offered to ordinary shareholders of the company.
A total of 878,465 share rights were issued during the prior year but 559,090 lapsed upon the retirement of the Chief
Executive Officer. The remaining 319,375 share rights were forfeited during the current year upon the resignation of the
former Chief Financial Officer. No share rights were issued during the year or outstanding at 30 June 2019.
Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
The fair value of the share rights were estimated at the grant date using the Monte Carlo pricing model, taking into account
the terms and conditions on which the share rights were granted.
There were no cash settlement alternatives. The Group accounted for the share rights as an equity settled plan.
Options
A total of 1,500,000 share options were granted in the prior year but 1,000,000 lapsed upon the retirement of the Chief
Executive Officer. The remaining 500,000 share options were forfeited upon the resignation of the former Chief Financial
Officer during the year. No share options were issued or outstanding at 30 June 2019.
The fair value of the share options were estimated at the grant date using the Monte Carlo pricing model, taking into
account the terms and conditions on which the share options were granted.
The Group also leases office space. The amount disclosed for the lease of office space does not include any adjustments
There were no cash settlement alternatives. The Group accounted for the share options as an equity settled plan.
The expense recognised during the year is shown in the following table:
Expense arriving from equity-settled share based payment transactions
Total expense arising from share-based payment transactions
30 June 2019
$’000
30 June 2018
$’000
(12)
(12)
12
12
There were no cancellations or modifications to the awards in 2019 or 2018, other than the lapsing of the share rights and
options noted above. The share based payment expense previously recognised under AASB 2 has been reversed for the
awards forfeited during the year.
Movements during the year
The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share
rights during the year:
Share rights
Outstanding at 1 July
Granted during the year
Forfeited during the year
Outstanding at 30 June
Exercisable at 30 June
2019
Number
2019 WEAP
2018
Number
2018 WAEP
319,375
-
(319,375)
-
-
-
-
-
-
-
-
878,465
(559,090)
319,375
-
-
-
-
-
-
The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share
options during the year:
Options
Outstanding at 1 July
Granted during the year
Forfeited during the year
Outstanding at 30 June
Exercisable at 30 June
2019
Number
2019 WEAP
2018
Number
2018 WAEP
500,000
$0.33
-
-
(500,000)
-
-
-
-
-
-
1,500,000
(1,000,000)
500,000
-
-
$0.33
-
$0.33
-
Share rights
days following the announcement of the company’s 2017 results.
Rights were issued at face value having regard to the volume weighted average share price of shares over the 30 trading
No options or share rights were issued during the year or outstanding at 30 June 2019.
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EGH ANNUAL REPORT 2019
51
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52
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
27. RELATED PARTY TRANSACTIONS
(a) Key management personnel compensation
Short term employee benefits
Post-employment benefits
Other employee benefits
Total
Consolidated
30 June 2019
30 June 2018
$’000
$’000
824
57
(12)
869
1,223
73
149
1,445
Detailed disclosures relating to key management personnel are set out in the remuneration report within the Directors'
Report.
(b) Other transactions with related parties
(i) Purchases from related parties
The Group acquired the following goods and services from entities that are related parties:
Key management personnel and their controlled entities
Manager’s units rental fees
Consulting fees
Amounts outstanding at the end of the reporting period in relation to these
transactions (included in Trade and other payables)
Consolidated
30 June 2019
30 June 2018
$’000
$’000
51
33
33
51
-
-
(ii) Fees received from related parties
The Group received fees for the following services from entities that are related parties:
Key management personnel and their controlled entities
Management fees
Joint venture
Management fees
Amounts outstanding at the end of the reporting period in relation to these
transactions (included in Trade and other receivables)
(iii) Terms and conditions
Consolidated
30 June 2019
30 June 2018
$’000
$’000
23
262
29
21
59
22
All transactions were made on commercial terms and conditions and at market rates. Outstanding balances are
unsecured and are repayable in cash.
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EGH ANNUAL REPORT 2019
53
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
27. RELATED PARTY TRANSACTIONS
(a) Key management personnel compensation
Short term employee benefits
Post-employment benefits
Other employee benefits
Total
Report.
(b) Other transactions with related parties
(i) Purchases from related parties
Key management personnel and their controlled entities
Manager’s units rental fees
Consulting fees
Amounts outstanding at the end of the reporting period in relation to these
transactions (included in Trade and other payables)
(ii) Fees received from related parties
The Group received fees for the following services from entities that are related parties:
Consolidated
30 June 2019
30 June 2018
$’000
$’000
824
57
(12)
869
1,223
73
149
1,445
Consolidated
30 June 2019
30 June 2018
$’000
$’000
51
33
33
23
262
29
51
-
-
21
59
22
Consolidated
30 June 2019
30 June 2018
$’000
$’000
Key management personnel and their controlled entities
Management fees
Joint venture
Management fees
Amounts outstanding at the end of the reporting period in relation to these
transactions (included in Trade and other receivables)
(iii) Terms and conditions
All transactions were made on commercial terms and conditions and at market rates. Outstanding balances are
unsecured and are repayable in cash.
Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
(iv) Loans to related parties
Key management personnel and their controlled entities
Opening balance
Loans advanced
Loan repayments received
Net interest charged
Closing balance
Consolidated
30 June 2019
30 June 2018
$’000
$’000
-
350
(61)
17
306
-
-
-
-
-
Detailed disclosures relating to key management personnel are set out in the remuneration report within the Directors'
No provisions for doubtful debts have been raised in relation to any outstanding balances.
Lachlan McIntosh (a director) has also provided a personal guarantee in respect to the West Cabin Loan. Refer to
Note 28 for further details.
28. OTHER MATERIAL TRANSACTIONS WITH DIRECTOR RELATED ENTITIES
The Group acquired the following goods and services from entities that are related parties:
Couran Cove
On 30 August 2018, Eureka reached agreement with several parties including Onterran Limited (ASX: OTR) (Onterran)
and certain of its subsidiaries (Couran Cove entities) with respect to amounts and assets associated with the Group’s
interests in Couran Cove on South Stradbroke Island.
The Executive Chairman of Onterran is Mr Lachlan McIntosh who is also a director of Eureka. Mr McIntosh does not have
control over Onterran or the Couran Cove entities.
The financial impact of these settlement reached was reflected in the Group’s financial statements for the year ended 30
June 2018.
The material balances related to this transaction and key elements of the agreement are set out below.
Assets
Inventory 1
Loan Receivable – Couran Cove 2
Loan Receivable - McIntosh Loan 3
Loan Receivable – West Cabin Loan 4
Other non-current assets - land option 5
Expense
Impairment of Couran Cove assets1 5
Financial
statement disclosure
Note
30 June 2019
$‘000
30 June 2018
$’000
7
11
11
11
9
28
-
-
306
320
1,237
2,010
2,260
-
-
1,237
-
2,887
1
2
Inventory - 28 cabins and apartments owned by Eureka were sold during the year ended 30 June 2019 for $2.01
million. Cash settlement was completed on 7 September 2018. The assets were written down to the net realisable
value in the prior year, resulting in a write-down of $1.124 million.
Loan receivable – Couran Cove - a loan repayment of $1.59 million was received on 7 September 2018, being part
payment of the $2.26 million loan owed to Eureka by Couran Cove Holdings Pty Ltd. The remaining loan receivable
was restructured into the McIntosh Loan and the West Cabin Loan (see below).
3 McIntosh Loan - a new loan of $0.35 million assumed by Mr Lachlan McIntosh (a Director of EGH) in his personal
capacity. Details are contained in Note 11.
64
EGH ANNUAL REPORT 2019
53
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EGH ANNUAL REPORT 2019
54
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
4 West Cabin Loan - a new secured loan was provided to CCH Developments No 1 Pty Ltd (CCH Developments) in its
personal capacity and as trustee of the CCH Developments No 1 Trust for $0.32 million. No interest accrues on this
loan.
The loan is secured by a real property mortgage over two existing cabins owned by CCH Developments and is
guaranteed by Onterran and Mr McIntosh in his personal capacity. Mr McIntosh is a director of Eureka, the Executive
Chairman of Onterran and a director of CCH Developments. Recourse against CCH Developments in respect of the
loan is limited to the two existing cabins.
The repayment date for the loan was previously 15 April 2019. Repayment of the loan is expected to be made by
CCH Developments from the proceeds of the sale of the two cabins. Separate titles for the cabins have now been
issued and CCH Developments has advised Eureka that it expects that the sale contract for the cabins will be
completed in September 2019. Eureka has agreed to extend the repayment date of the loan until the settlement date
for the sale contract. Eureka has reserved its rights under the loan agreement and the security.
5
Land option
Prior to the settlement reached on 30 August 2018, Eureka was owed $3.0 million by Couran Cove Holdings Pty Ltd,
a subsidiary of Onterran. This amount has been refinanced under a new secured loan to CCH Developments. No
interest accrues on this loan. The loan is secured by a real property mortgage over land owned by CCH Developments
relating to 60 proposed cabin sites and is guaranteed by Onterran.
Eureka has a right of first refusal to purchase the proposed cabin sites for $50,000 per site. The purchase price is to
be paid by way of set off against the loan on settlement. The right can be exercised until the repayment date for the
loan. The loan is due for repayment on 31 August 2020. Eureka has the option to extend the repayment date, and the
time in which it can exercise its right of first refusal, to 31 August 2023.
In order for Eureka to realise value from this agreement, Eureka intends to reach arrangements for developers to
construct dwellings on the proposed cabin sites and ultimately acquire the sites from Eureka. Eureka’s interests will
be protected by its mortgage under any such arrangements with developers.
Although the intention is to recover this loan in full, the Directors assessed its fair value to be $1.24 million at 30 June
2019 (2018: $1.24 million). The assets were written down to the assessed fair value in the prior year, resulting in a
write-down of $1.76 million.
Other relevant information
In addition to the above elements of the agreements, upon satisfaction of the conditions precedent to the transaction during
the year, Eureka released the parties from existing loan agreements, and agreed to forgo its entitlement to 30% of the
proceeds of the sale of certain management and infrastructure rights related to the Couran Cove resort. Eureka also
released its specific charge over the management and infrastructure rights and a general security agreement over the
entity that owned the rights. The Directors placed no value on this entitlement as receipt of any benefit was dependent on
the owner taking a voluntary action to sell the rights, and if they were not sold, Eureka’s entitlement would have expired.
In March 2019, Onterran entered voluntary administration and announced the sale of its subsidiary that owns CCH
Developments to an unrelated Sydney property group. In June 2019, Onterran also executed a Deed of Company
Arrangement (DOCA). Upon completion of the DOCA, which includes a Creditors’ Trust Fund of $250,000, all claims
against Onterran (including any guarantees) will be extinguished and released.
The Directors consider that these transactions do not, and will not, have a material effect on Eureka’s security in relation
to the West Cabin loan and the Couran Cove land option, or the recoverability of the amounts owed, due to the validity
and enforceability of the real property mortgages provided to Eureka.
29. ULTIMATE PARENT ENTITY
The parent entity within the group is Eureka Group Holdings Limited, which is the ultimate parent entity within Australia.
30. CONTINGENT ASSETS AND LIABILITIES
There are no contingent liabilities or contingent assets at 30 June 2019 that require disclosure in the financial report.
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EGH ANNUAL REPORT 2019
55
Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
4 West Cabin Loan - a new secured loan was provided to CCH Developments No 1 Pty Ltd (CCH Developments) in its
personal capacity and as trustee of the CCH Developments No 1 Trust for $0.32 million. No interest accrues on this
31. OPERATING SEGMENTS
loan.
Identification of reportable operating segments and principal services
For the period ended 30 June 2019, the Group is organised into two operating segments located in Australia:
• Rental Villages – ownership of seniors’ rental villages; and
• Property Management - management of seniors’ independent living communities.
The operating segments have been identified based upon reports reviewed by the Board of Directors (who are identified
as the chief operating decision makers) who are responsible for assessing performance and determining the allocation of
resources. There is no aggregation of operating segments and the Board of Directors views each segments performance
based on profit after tax. The accounting policies adopted for internal reporting to the chief operating decision makers are
consistent with those adopted in the financial statements.
Segment information is prepared in conformity with the accounting policies of the Group as discussed in Note 2 and
Accounting Standard AASB 8.
Cash flows are not measured or reported by segment.
Rental
Villages
$’000
19,363
2,550
-
10
Property
Management
$’000
3,873
-
-
-
21,923
3,873
Consolidated - 30 June 2019
Revenue
Revenue from asset sales – inventory
Interest revenue
Other revenue
Total Revenue
Expenses
Cost of sales – inventory
Interest expense
Total expenses
Net gain/(loss) on change in fair of:
Investment property
Other assets
Share of profit of a joint venture
Profit/(loss) before income tax expense
Income tax expense
Profit/(loss) after income tax expense
Segment Assets
Segment Liabilities
9,500
2,550
2,760
14,810
2,253
(300)
712
9,778
-
9,778
112,2832
51,131
Non-cash and other significant items included in profit:
Gain on revaluation of investment property
Depreciation & amortisation
Amortisation of borrowing costs
Loss on revaluation of other assets
Share of profit of joint venture
2,253
(74)
(232)
(300)
712
67
Unallocated
$’000
Total
$’000
-
-
57
91
148
4,4621
-
-
4,462
-
-
-
(4,314)
-
(4,314)
14,897 3
355 4
-
-
-
-
-
23,236
2,550
57
101
25,944
16,505
2,550
2,760
21,815
2,253
(300)
712
6,794
-
6,794
133,072
51,590
2,253
(225)
(232)
(300)
-
EGH ANNUAL REPORT 2019
56
2,543
-
-
2,543
-
-
-
1,330
-
1,330
5,892
104
-
(151)
-
-
-
The loan is secured by a real property mortgage over two existing cabins owned by CCH Developments and is
guaranteed by Onterran and Mr McIntosh in his personal capacity. Mr McIntosh is a director of Eureka, the Executive
Chairman of Onterran and a director of CCH Developments. Recourse against CCH Developments in respect of the
loan is limited to the two existing cabins.
The repayment date for the loan was previously 15 April 2019. Repayment of the loan is expected to be made by
CCH Developments from the proceeds of the sale of the two cabins. Separate titles for the cabins have now been
issued and CCH Developments has advised Eureka that it expects that the sale contract for the cabins will be
completed in September 2019. Eureka has agreed to extend the repayment date of the loan until the settlement date
for the sale contract. Eureka has reserved its rights under the loan agreement and the security.
5
Land option
Prior to the settlement reached on 30 August 2018, Eureka was owed $3.0 million by Couran Cove Holdings Pty Ltd,
a subsidiary of Onterran. This amount has been refinanced under a new secured loan to CCH Developments. No
interest accrues on this loan. The loan is secured by a real property mortgage over land owned by CCH Developments
relating to 60 proposed cabin sites and is guaranteed by Onterran.
Eureka has a right of first refusal to purchase the proposed cabin sites for $50,000 per site. The purchase price is to
be paid by way of set off against the loan on settlement. The right can be exercised until the repayment date for the
loan. The loan is due for repayment on 31 August 2020. Eureka has the option to extend the repayment date, and the
time in which it can exercise its right of first refusal, to 31 August 2023.
In order for Eureka to realise value from this agreement, Eureka intends to reach arrangements for developers to
construct dwellings on the proposed cabin sites and ultimately acquire the sites from Eureka. Eureka’s interests will
be protected by its mortgage under any such arrangements with developers.
Although the intention is to recover this loan in full, the Directors assessed its fair value to be $1.24 million at 30 June
2019 (2018: $1.24 million). The assets were written down to the assessed fair value in the prior year, resulting in a
write-down of $1.76 million.
Other relevant information
In addition to the above elements of the agreements, upon satisfaction of the conditions precedent to the transaction during
the year, Eureka released the parties from existing loan agreements, and agreed to forgo its entitlement to 30% of the
proceeds of the sale of certain management and infrastructure rights related to the Couran Cove resort. Eureka also
released its specific charge over the management and infrastructure rights and a general security agreement over the
entity that owned the rights. The Directors placed no value on this entitlement as receipt of any benefit was dependent on
the owner taking a voluntary action to sell the rights, and if they were not sold, Eureka’s entitlement would have expired.
In March 2019, Onterran entered voluntary administration and announced the sale of its subsidiary that owns CCH
Developments to an unrelated Sydney property group. In June 2019, Onterran also executed a Deed of Company
Arrangement (DOCA). Upon completion of the DOCA, which includes a Creditors’ Trust Fund of $250,000, all claims
against Onterran (including any guarantees) will be extinguished and released.
The Directors consider that these transactions do not, and will not, have a material effect on Eureka’s security in relation
to the West Cabin loan and the Couran Cove land option, or the recoverability of the amounts owed, due to the validity
and enforceability of the real property mortgages provided to Eureka.
The parent entity within the group is Eureka Group Holdings Limited, which is the ultimate parent entity within Australia.
29. ULTIMATE PARENT ENTITY
30. CONTINGENT ASSETS AND LIABILITIES
There are no contingent liabilities or contingent assets at 30 June 2019 that require disclosure in the financial report.
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EGH ANNUAL REPORT 2019
55
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Consolidated - 30 June 2019
Segment acquisitions:
Acquisition of property, plant and equipment
Acquisition and subsequent expenditure of
investment property
Acquisition of inventory
Rental
Villages
$’000
Property
Management
$’000
Unallocated
$’000
Total
$’000
-
1,797
-
-
-
-
58
-
564
58
1,797
564
1 Included within unallocated expenses is employee benefits expense of $2.49 million, directors fees $0.31 million, office expenses of $0.39
million, professional fees $0.44 million and other administrative expenses of $0.83 million.
2 Included within rental villages assets is the investment in the Joint Venture of $4.66 million, which is accounted for under the equity
method.
3 Included within unallocated segment assets is inventory of $9.22 million, Couran Cove land option of $1.24 million, trade and other
receivables of $0.66 million, cash balances of $3.06 million, and other assets of $0.72 million.
4 Included within unallocated segment liabilities is Superannuation and PAYG withholding payable $0.10 million and accrued expenses
$0.25 million.
Consolidated - 30 June 2018
Revenue
Interest revenue
Other revenue
Total Revenue
Expenses
Interest expense
Total expenses
Net gain/(loss) on change in fair of:
Investment property
Other assets
Impairment of Couran Cove assets
Share of profit of a joint venture
Profit/(loss) before income tax expense
Income tax expense
Profit/(loss) after income tax expense
Segment Assets
Segment Liabilities
Rental
Villages
$’000
Property
Management
$’000
18,665
3,909
-
26
-
-
18,691
3,909
9,596
2,745
12,341
(1,439)
-
-
172
5,083
-
5,083
108,2402
57,833
2,806
-
2,806
-
-
-
-
1,103
-
1,103
6,138
65
Unallocated
$’000
Total
$’000
-
41
571
612
3,9261
8
3,934
-
(253)
(2,887)
-
(6,462)
-
(6,462)
18,922 3
702 4
22,574
41
597
23,212
16,328
2,753
19,081
(1,439)
(253)
(2,887)
172
(276)
-
(276)
133,300
58,600
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EGH ANNUAL REPORT 2019
57
Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Rental
Villages
$’000
Property
Management
Unallocated
$’000
$’000
Total
$’000
Consolidated - 30 June 2018
Rental
Villages
$’000
Property
Management
$’000
Unallocated
$’000
Total
$’000
58
-
564
58
1,797
564
Non-cash and other significant items included in profit/(loss)
above:
Loss on revaluation of investment property
Depreciation & amortisation
Gain on disposal of Victoria St, Mackay
(1,439)
(111)
-
(140)
Segment acquisitions:
Acquisition of property, plant and equipment
Acquisition and subsequent expenditure of
investment property
Acquisition of Joint Venture investment
Acquisition of intangibles
Acquisition of inventory
-
9,361
4,500
-
-
-
-
-
100
-
-
-
501
35
-
-
-
4,134
(1,439)
(251)
501
35
9,361
4,500
100
4,134
1 Included within unallocated expenses is employee benefits expense of $2.16 million, office expenses of $0.45 million and other
administrative expenses of $1.31 million.
2 Included within rental villages assets is the investment in the Joint Venture of $4.72 million, which is accounted for under the equity
method.
3 Included within unallocated segment assets is inventory of $11.78 million, Couran Cove land option of $1.24 million, trade and other
receivables of $2.26 million, cash balances of $1.98 million, and other assets of $1.67 million.
4 Included within unallocated segment liabilities is provisions of $0.12 million, Superannuation and PAYG withholding payable $0.10 million
and accrued expenses $0.48 million.
32.
REMUNERATION OF AUDITORS
During the financial year the following fees were paid or payable for
services provided by the auditor of the company and its related practices:
(i) Audit and other assurance services – Ernst and Young
Audit and review of financial statements
(ii) Other services – Ernst and Young
GST advice
Consolidated
30 June 2019
30 June 2018
$
$
145,454
152,150
7,000
-
152,454
152,150
Consolidated - 30 June 2019
Segment acquisitions:
Acquisition of property, plant and equipment
Acquisition and subsequent expenditure of
investment property
Acquisition of inventory
1,797
-
-
1 Included within unallocated expenses is employee benefits expense of $2.49 million, directors fees $0.31 million, office expenses of $0.39
million, professional fees $0.44 million and other administrative expenses of $0.83 million.
2 Included within rental villages assets is the investment in the Joint Venture of $4.66 million, which is accounted for under the equity
3 Included within unallocated segment assets is inventory of $9.22 million, Couran Cove land option of $1.24 million, trade and other
receivables of $0.66 million, cash balances of $3.06 million, and other assets of $0.72 million.
4 Included within unallocated segment liabilities is Superannuation and PAYG withholding payable $0.10 million and accrued expenses
method.
$0.25 million.
Consolidated - 30 June 2018
Revenue
Interest revenue
Other revenue
Total Revenue
Expenses
Interest expense
Total expenses
Net gain/(loss) on change in fair of:
Investment property
Other assets
Impairment of Couran Cove assets
Share of profit of a joint venture
Income tax expense
Segment Assets
Segment Liabilities
Rental
Villages
$’000
Property
Management
Unallocated
$’000
$’000
Total
$’000
18,665
3,909
18,691
3,909
2,806
2,806
-
26
9,596
2,745
12,341
(1,439)
172
-
-
-
-
41
571
612
3,9261
8
3,934
(253)
(2,887)
-
-
-
108,2402
57,833
6,138
65
18,922 3
702 4
22,574
41
597
23,212
16,328
2,753
19,081
(1,439)
(253)
(2,887)
172
(276)
-
(276)
133,300
58,600
Profit/(loss) before income tax expense
5,083
1,103
(6,462)
Profit/(loss) after income tax expense
5,083
1,103
(6,462)
-
-
-
-
-
-
-
-
-
-
-
68
EGH ANNUAL REPORT 2019
57
69
EGH ANNUAL REPORT 2019
58
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
33.
PARENT ENTITY DISCLOSURES
Information relating to Eureka Group Holdings Limited (parent entity):
Results of the parent entity
Profit/(loss) for the period
Other comprehensive income
Total comprehensive income/(loss) for the year
Financial position of parent entity at year-end
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Share capital
Equity reserve
Accumulated losses
Total equity
30 June 2019
30 June 2018
$’000
$’000
(4,915)
-
(4,915)
79,403
6,523
85,926
887
47,118
48,005
94,353
-
(56,432)
37,921
(7,077)
-
(7,077)
90,099
7,162
97,261
711
53,702
54,413
94,353
12
(51,517)
42,848
Guarantees entered into by the parent entity
The parent entity has not provided financial guarantees in relation to the debts of its subsidiaries.
Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 30 June 2019.
Contractual commitments for capital items
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2019.
34. SUBSEQUENT EVENTS
Subsequent to year end, the following significant transactions have occurred:
•
Terranora - the sale of four units at Terranora was completed for a total consideration of $1.14 million, including
$0.27 million Barter dollars.
• Assets held for sale – separate contracts for the sale of two residential houses in Mt Gambier for total proceeds
of $0.57 million have been executed, with settlement expected in September 2019.
•
Investment Property – the Group acquired four additional units in Rockhampton Village 1 for $0.34 million and
two additional units in Albert Street Gardens in Orange for $0.22 million.
• Dividend - the Company has declared a final dividend in respect of the year of 1.0 cent per share, payable on
17 October 2019 amounting to $2.30 million.
Other than the above mentioned items, no other matter or circumstance has arisen since 30 June 2019 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 subsequent financial years.
70
EGH ANNUAL REPORT 2019
59
Eureka Group Holdings Limited and controlled entities
Directors’ Declaration
FOR THE YEAR ENDED 30 JUNE 2019
30 June 2019
30 June 2018
$’000
$’000
In accordance with a resolution of the directors of Eureka Group Holdings Limited, I state:
1.
In the opinion of the Directors of Eureka Group Holdings Limited (“the Company”):
a. The accompanying financial statements and notes are in accordance with the Corporations Act 2001,
including:
i. giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its performance
for the financial year ended on that date; and
ii. complying with Australian Accounting Standards and the Corporations Regulations 2001;
b. There are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable; and
c. The financial statements and notes thereto are in accordance with International Financial Reporting
Standards as disclosed in Note 2.
2. This declaration has been made after receiving the declarations required to be made to the directors in accordance
with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2019.
On behalf of the Board
Guarantees entered into by the parent entity
The parent entity has not provided financial guarantees in relation to the debts of its subsidiaries.
Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 30 June 2019.
Murray Boyte
Executive Chair
Contractual commitments for capital items
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2019.
Dated in Brisbane this 30th day of August 2019.
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
33.
PARENT ENTITY DISCLOSURES
Information relating to Eureka Group Holdings Limited (parent entity):
Results of the parent entity
Profit/(loss) for the period
Other comprehensive income
Total comprehensive income/(loss) for the year
Financial position of parent entity at year-end
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Share capital
Equity reserve
Accumulated losses
Total equity
(4,915)
-
(4,915)
79,403
6,523
85,926
887
47,118
48,005
94,353
-
(56,432)
37,921
(7,077)
-
(7,077)
90,099
7,162
97,261
711
53,702
54,413
94,353
12
(51,517)
42,848
34. SUBSEQUENT EVENTS
Subsequent to year end, the following significant transactions have occurred:
•
•
Terranora - the sale of four units at Terranora was completed for a total consideration of $1.14 million, including
$0.27 million Barter dollars.
• Assets held for sale – separate contracts for the sale of two residential houses in Mt Gambier for total proceeds
of $0.57 million have been executed, with settlement expected in September 2019.
Investment Property – the Group acquired four additional units in Rockhampton Village 1 for $0.34 million and
two additional units in Albert Street Gardens in Orange for $0.22 million.
• Dividend - the Company has declared a final dividend in respect of the year of 1.0 cent per share, payable on
17 October 2019 amounting to $2.30 million.
Other than the above mentioned items, no other matter or circumstance has arisen since 30 June 2019 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 subsequent financial years.
70
EGH ANNUAL REPORT 2019
59
71
EGH ANNUAL REPORT 2019
6
0
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
Independent Auditor's Report to the Members of Eureka Group Holdings
Limited
Report on the Audit of the Financial Report
financial report.
Opinion
We have audited the financial report of Eureka Group Holdings Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 30 June
2019, the consolidated statement of comprehensive income, consolidated statement of changes in equity
and consolidated statement of cash flows for the year then ended, notes to the financial statements,
including a summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
a)
b)
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2019
and of its consolidated financial performance for the year ended on that date; and
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 (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. 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
Recognition and Valuation of Investment Properties
Why significant
How our audit addressed the key audit matter
The recognition and valuation of investment
Our audit procedures included the following:
properties was a key audit matter due to the value of
the recorded asset (30 June 2019: $105,406,000)
relative to total assets and the degree of estimation
and judgement required to be made by the Group,
specifically concerning classification and fair value.
The Group assesses whether new acquisitions are
classified as an asset acquisition (individual
acquisitions of investment property assets) or
business acquisitions. Investment properties are
assessed each year by the Group to determine if they
continue to meet the requirements under Australian
Accounting Standards to be classified as investment
property.
All investment properties are recorded at their fair
value. Fair values are determined every six months by
reference to independent valuations or internal
valuations with reference to current market
conditions. Changes in fair values are recognised in
the consolidated statement of comprehensive income.
Notes 2 and 14 to the financial report disclose the
investment property assets and Note 23 discloses the
assumptions used in the valuation of these assets.
• Assessing significant investment property acquisitions
made during the year as to whether they were correctly
classified as an asset or business acquisition. In doing
so, we analysed related contracts of purchase and
settlement statements.
• Evaluating the Group’s assessment of properties
classified as investment properties under Australian
Accounting Standards, with consideration as to how
significant returns are derived from these assets.
• On a sample basis we agreed investment properties to
applicable title and other documents evidencing
ownership.
• Assessing the Group’s fair value determination of
investment properties. In doing so, we performed the
following procedures with the involvement of our real
estate valuation specialists:
• Assessed the sustainable earnings for each
property, including occupancy assumptions.
•
Considered the capitalisation rates for each
property.
• Assessed the independent valuations obtained by
the Group including, the qualifications,
competence and objectivity of the valuation
experts and the methodology of the valuations.
• Selected a sample of properties to determine whether
fair values were supported by comparable sales
evidence.
• Evaluated the compliance of the note disclosures with
Australian Accounting Standards.
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A member firm of Ernst & Young Global Limited
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72
72
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
Independent Auditor's Report to the Members of Eureka Group Holdings
Report on the Audit of the Financial Report
We have audited the financial report of Eureka Group Holdings Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 30 June
2019, the consolidated statement of comprehensive income, consolidated statement of changes in equity
and consolidated statement of cash flows for the year then ended, notes to the financial statements,
including a summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2019
and of its consolidated financial performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
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 (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
Limited
Opinion
2001, including:
a)
b)
Basis for Opinion
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. For each matter below, our description of how our audit addressed the matter
is provided in that context.
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
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.
Recognition and Valuation of Investment Properties
Why significant
How our audit addressed the key audit matter
The recognition and valuation of investment
properties was a key audit matter due to the value of
the recorded asset (30 June 2019: $105,406,000)
relative to total assets and the degree of estimation
and judgement required to be made by the Group,
specifically concerning classification and fair value.
The Group assesses whether new acquisitions are
classified as an asset acquisition (individual
acquisitions of investment property assets) or
business acquisitions. Investment properties are
assessed each year by the Group to determine if they
continue to meet the requirements under Australian
Accounting Standards to be classified as investment
property.
All investment properties are recorded at their fair
value. Fair values are determined every six months by
reference to independent valuations or internal
valuations with reference to current market
conditions. Changes in fair values are recognised in
the consolidated statement of comprehensive income.
Notes 2 and 14 to the financial report disclose the
investment property assets and Note 23 discloses the
assumptions used in the valuation of these assets.
Our audit procedures included the following:
• Assessing significant investment property acquisitions
made during the year as to whether they were correctly
classified as an asset or business acquisition. In doing
so, we analysed related contracts of purchase and
settlement statements.
• Evaluating the Group’s assessment of properties
classified as investment properties under Australian
Accounting Standards, with consideration as to how
significant returns are derived from these assets.
• On a sample basis we agreed investment properties to
applicable title and other documents evidencing
ownership.
• Assessing the Group’s fair value determination of
investment properties. In doing so, we performed the
following procedures with the involvement of our real
estate valuation specialists:
• Assessed the sustainable earnings for each
property, including occupancy assumptions.
Considered the capitalisation rates for each
property.
•
• Assessed the independent valuations obtained by
the Group including, the qualifications,
competence and objectivity of the valuation
experts and the methodology of the valuations.
• Selected a sample of properties to determine whether
fair values were supported by comparable sales
evidence.
• Evaluated the compliance of the note disclosures with
Australian Accounting Standards.
A member firm of Ernst & Young Global Limited
A member firm of Ernst & Young Global Limited
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Liability limited by a scheme approved under Professional Standards Legislation
73
73
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Impairment Testing of Intangible Assets
Non-Core Assets
Why significant
How our audit addressed the key audit matter
Why significant
How our audit addressed the key audit matter
Impairment testing of intangible assets was a key
audit matter due to the value of the recorded asset
(30 June 2019: $5,348,000) and the degree of
estimation required to be made by the Group in
calculating the value-in- use using discounted cash
flow forecasts.
Note 16 of the financial report discloses the Group’s
intangible assets and the key assumptions used in
testing these assets for impairment, including those
used in the cash flow forecasts.
The Group performs an annual impairment
assessment of goodwill, while amortising intangible
assets, such as management letting rights, are
assessed for indicators of impairment.
Our audit procedures included the following:
The Group is in the process of realising a number of
Our audit procedures concerning the land option included
non-core assets. These assets are:
the following:
•
•
•
•
Evaluating the Group’s assessment of impairment
indicators for management letting rights.
Evaluating the Group’s assessment of Cash
Generating Units.
Testing the mathematical accuracy of the
impairment model.
Considering the accuracy of the Group’s historical
cash flow forecasts. We agreed the forecasts to
Board approved budgets and compared those
forecasts to previously achieved results and
considered any adjustments required for current
trading and market activities.
• Assessing the key assumptions within the
impairment model including the growth rate and
discount rate.
• Applying our knowledge of the business and
corroborated our work with external information
where possible, including published earnings
multiples for similar assets, specifically
management letting rights based on profitability
and tenure.
• Assessing the adequacy of the impairment tests
disclosure included in Note 16 to the financial
report.
•
•
•
•
•
•
Couran Cove Land Option (Note 9) -
$1,237,000
Loans Receivable from related parties (Note
11) - $306,000 and $320,000
Terranora Unit Inventory (Note 7) -
$9,215,000
These assets are material to the Group, require
judgment in determining the appropriate accounting
treatment and in assessing their carrying value. As a
result, this was considered to be a key audit matter.
The Group assesses the recoverability of these assets
at each reporting date as follows:
The Couran Cove Land Option has been
assessed based on estimates of future cash
flows expected to be received from these
assets.
Loans Receivable has been assessed based
on expected future cash flows, the credit
worthiness of the borrowers and the value of
security provided.
The Terranora asset has been assessed to be
inventory and is carried at the lower of cost
and net realisable value which has been
assessed by management using external
independent valuations and estimates of cost
to complete and realise this asset.
The Group has also assessed the expected time frames
for recovery of these assets in order to determine
their recording as either current or non-current
basis.
assets.
• Reviewing contractual terms and other legal
correspondence in the period to assess if the
Group has the legal title to the assets.
•
Comparing key market-derived estimates,
including expected selling price, to external data,
• Understanding changes and developments in the
where available.
asset in the period.
•
•
Performing sensitivity analyses to assess the
range of acceptable recoverable value estimates.
Testing the mathematical accuracy of the models.
• Assessing the adequacy of the related disclosure
in the financial report.
Our audit procedures relating to loans receivable included
the following:
• Reviewing the loan agreement.
• Obtaining confirmation of the loan.
• Reviewing management’s assessment of
recoverability of the loan, including
creditworthiness of the borrowers, and security
on the loan.
• Assessing the adequacy of the provision for
expected credit losses.
•
Testing the mathematical accuracy of the interest
calculation.
• Assessing the adequacy of the related disclosure
in the financial report.
Our audit procedures concerning the Terranora inventory
included the following:
• Testing additions and disposals to supporting
documentation and bank statements on a sample
• Testing net realisable value by involving our real
estate valuation specialists to assess the
independent valuation obtained by the Group
including the qualifications, competence and
objectivity of the valuation experts and the
methodology used in the valuations.
•
Testing the costs of completion and realisation.
• Assessing the adequacy of the related disclosure
in the financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
74
74
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Impairment Testing of Intangible Assets
Non-Core Assets
Why significant
How our audit addressed the key audit matter
Why significant
How our audit addressed the key audit matter
Impairment testing of intangible assets was a key
Our audit procedures included the following:
The Group is in the process of realising a number of
non-core assets. These assets are:
Our audit procedures concerning the land option included
the following:
•
•
•
Couran Cove Land Option (Note 9) -
$1,237,000
Loans Receivable from related parties (Note
11) - $306,000 and $320,000
Terranora Unit Inventory (Note 7) -
$9,215,000
These assets are material to the Group, require
judgment in determining the appropriate accounting
treatment and in assessing their carrying value. As a
result, this was considered to be a key audit matter.
The Group assesses the recoverability of these assets
at each reporting date as follows:
•
•
•
The Couran Cove Land Option has been
assessed based on estimates of future cash
flows expected to be received from these
assets.
Loans Receivable has been assessed based
on expected future cash flows, the credit
worthiness of the borrowers and the value of
security provided.
The Terranora asset has been assessed to be
inventory and is carried at the lower of cost
and net realisable value which has been
assessed by management using external
independent valuations and estimates of cost
to complete and realise this asset.
The Group has also assessed the expected time frames
for recovery of these assets in order to determine
their recording as either current or non-current
assets.
• Reviewing contractual terms and other legal
correspondence in the period to assess if the
Group has the legal title to the assets.
Comparing key market-derived estimates,
including expected selling price, to external data,
where available.
•
• Understanding changes and developments in the
•
asset in the period.
Performing sensitivity analyses to assess the
range of acceptable recoverable value estimates.
Testing the mathematical accuracy of the models.
•
• Assessing the adequacy of the related disclosure
in the financial report.
Our audit procedures relating to loans receivable included
the following:
• Reviewing the loan agreement.
• Obtaining confirmation of the loan.
• Reviewing management’s assessment of
recoverability of the loan, including
creditworthiness of the borrowers, and security
on the loan.
• Assessing the adequacy of the provision for
•
expected credit losses.
Testing the mathematical accuracy of the interest
calculation.
• Assessing the adequacy of the related disclosure
in the financial report.
Our audit procedures concerning the Terranora inventory
included the following:
• Testing additions and disposals to supporting
documentation and bank statements on a sample
basis.
• Testing net realisable value by involving our real
estate valuation specialists to assess the
independent valuation obtained by the Group
including the qualifications, competence and
objectivity of the valuation experts and the
methodology used in the valuations.
Testing the costs of completion and realisation.
•
• Assessing the adequacy of the related disclosure
in the financial report.
audit matter due to the value of the recorded asset
(30 June 2019: $5,348,000) and the degree of
estimation required to be made by the Group in
calculating the value-in- use using discounted cash
flow forecasts.
Note 16 of the financial report discloses the Group’s
intangible assets and the key assumptions used in
testing these assets for impairment, including those
used in the cash flow forecasts.
The Group performs an annual impairment
assessment of goodwill, while amortising intangible
assets, such as management letting rights, are
assessed for indicators of impairment.
•
•
•
•
Evaluating the Group’s assessment of impairment
indicators for management letting rights.
Evaluating the Group’s assessment of Cash
Generating Units.
impairment model.
Testing the mathematical accuracy of the
Considering the accuracy of the Group’s historical
cash flow forecasts. We agreed the forecasts to
Board approved budgets and compared those
forecasts to previously achieved results and
considered any adjustments required for current
trading and market activities.
• Assessing the key assumptions within the
impairment model including the growth rate and
discount rate.
• Applying our knowledge of the business and
corroborated our work with external information
where possible, including published earnings
multiples for similar assets, specifically
management letting rights based on profitability
• Assessing the adequacy of the impairment tests
disclosure included in Note 16 to the financial
and tenure.
report.
A member firm of Ernst & Young Global Limited
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75
75
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
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 Group’s 2019 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 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 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 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 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 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.
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, related safeguards.
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.
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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 Group’s 2019 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 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 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:
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
•
•
•
•
•
•
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 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 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 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.
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, related safeguards.
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.
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77
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Ernst & Young
111 Eagle Street
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
Brisbane QLD 4000 Australia
ey.com/au
GPO Box 7878 Brisbane QLD 4001
Report on the Audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors' report for the year ended 30 June
2019.
In our opinion, the Remuneration Report of Eureka Group Holdings Limited for the year ended 30 June
2019, 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.
Auditor’s Independence Declaration to the Directors of Eureka Group
Holdings Limited
As lead auditor for the audit of the financial report of Eureka Group Holdings Limited for the financial
year ended 30 June 2019, 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 Eureka Group Holdings Limited and the entities it controlled during the
Ernst & Young
Brad Tozer
Partner
Brisbane
30 August 2019
financial year.
Ernst & Young
Brad Tozer
Partner
30 August 2019
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78
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
Report on the Audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors' report for the year ended 30 June
In our opinion, the Remuneration Report of Eureka Group Holdings Limited for the year ended 30 June
2019, complies with section 300A of the Corporations Act 2001.
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
Auditor’s Independence Declaration to the Directors of Eureka Group
Holdings Limited
As lead auditor for the audit of the financial report of Eureka Group Holdings Limited for the financial
year ended 30 June 2019, 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 Eureka Group Holdings Limited and the entities it controlled during the
financial year.
Ernst & Young
Brad Tozer
Partner
30 August 2019
2019.
Responsibilities
Auditing Standards.
Ernst & Young
Brad Tozer
Partner
Brisbane
30 August 2019
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Liability limited by a scheme approved under Professional Standards Legislation
78
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Liability limited by a scheme approved under Professional Standards Legislation
79
79
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Corporate Governance Statement
The Company’s directors and management are committed to achieving and demonstrating the highest standards of
corporate governance.
The Company has prepared a Corporate Governance Statement which sets out the corporate governance practices that
were in operation during the financial year.
The Board has adopted
the ASX Corporate Governance Principles and Recommendations (3rd Edition)
(‘Recommendations’) to the extent considered appropriate for the size and nature of the Group’s operations. The
Corporate Governance Statement identifies any Recommendations that have not been followed, and provides reasons for
not following those Recommendations.
The Company’s Corporate Governance Statement and key policies can be found on its website:
http://www.eurekagroupholdings.com.au/governance.
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EGH ANNUAL REPORT 2019
69
Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Corporate Governance Statement
Security Holder Information
The Company’s directors and management are committed to achieving and demonstrating the highest standards of
corporate governance.
The Company has prepared a Corporate Governance Statement which sets out the corporate governance practices that
were in operation during the financial year.
The Board has adopted
the ASX Corporate Governance Principles and Recommendations (3rd Edition)
(‘Recommendations’) to the extent considered appropriate for the size and nature of the Group’s operations. The
Corporate Governance Statement identifies any Recommendations that have not been followed, and provides reasons for
not following those Recommendations.
The Company’s Corporate Governance Statement and key policies can be found on its website:
http://www.eurekagroupholdings.com.au/governance.
Distribution of Securities as at 14 August 2019
Number
of
Securities
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total Security
Holders
No of
Shareholders
323
196
97
271
141
1,028
Marketable Shares
There were 369 holders of less than a marketable parcel of 1,786
shares holding a total of 152,616 shares.
Voting Rights
Ordinary Shares carry voting rights of one vote per share. Options
and share rights carry no voting rights.
Substantial Holders as at 14 August 2019
Cooper Investors Pty Limited
Tribeca Investment Partners
Salt Funds Management
Charter Hall Property Securities Management Limited
Ignition Capital Pty Ltd, Ignition Capital No 2 Pty Ltd, Mr Robin Levison
Total
No of Ordinary
Shares Held
% of Issued
Share
Capital
35,378,273
25,365,406
16,678,819
15,800,658
12,590,808
15.38%
11.03%
7.25%
6.87%
5.45%
105,813,964
45.98%
Twenty Largest Ordinary Shareholders as at 14 August 2019
No of Ordinary
Shares Held
National Nominees Limited
J P Morgan Nominees Australia Pty Limited
HSBC Custody Nominees (Australia) Limited
Wavet Fund No 2 Pty Ltd
Ignition Capital Pty Ltd
One Managed Investment Funds Limited
Equipment Company of Australia Pty Limited
Kathlac Pty Ltd
Tolani Estate Pty Ltd
Placement Pty Ltd
Mr Alister Charles Wright
SMN Holdings Pty Ltd
H & G Limited
Luton Pty Ltd
Brazil Farming Pty Ltd
Ignition Capital No 2 Pty Ltd
Mr Victor John Plummer
Mr Richard Mews & Mrs Wee Khoon Mews
HIDIV Pty Ltd
Graeme Webb Holdings Pty Ltd
Total
% of Issued
Share
Capital
23.21%
8.65%
7.31%
4.99%
3.90%
3.55%
3.12%
2.91%
1.91%
1.74%
1.61%
1.59%
1.39%
1.24%
1.20%
1.12%
1.09%
0.95%
0.83%
0.77%
53,401,683
19,896,562
16,819,118
11,500,000
8,976,534
8,161,000
7,185,360
6,700,138
4,400,000
4,000,000
3,700,000
3,651,028
3,195,359
2,850,000
2,767,172
2,580,000
2,500,000
2,188,607
1,898,075
1,770,000
168,140,636
73.08%
80
EGH ANNUAL REPORT 2019
69
81
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70
EUREKA GROUP HOLDINGS ANNUAL REPORT 2019
Eureka Group Holdings Limited and controlled entities
Corporate Directory
Registered Address & Contact Details
Registered Address
Postal Address
Phone number
Website
Email
Suite 2D 7 Short St, Southport QLD 4215
PO Box PO Box 10819, Southport BC QLD 4215
07 5568 0205
www.eurekagroupholdings.com.au
info@eurekagroupholdings.com.au
Board of Directors
Murray Boyte (Executive Chair)
Russell Banham
Lachlan McIntosh
Sue Renkin
Chief Operating Officer
Chief Financial Officer
Senior Management
Cameron Taylor
Tracey Campion
Company Secretary
Laura Fanning
Solicitors
Jones Day
Riverside Centre
Level 31/123 Eagle Street
Brisbane QLD 4000
Tel: 07 3085 7000
Fax: 07 3085 7099
Mills Oakley
Level 14
145 Ann Street
Brisbane QLD 4000
Tel: 07 3228 0400
Fax: 07 3012 8777
Auditors
Ernst & Young
111 Eagle St
Brisbane Qld 4000
Tel: 07 3011 3333
Fax: 07 3011 3344
Share Registry
Link Market Services – Brisbane
Level 21, 10 Eagle Street
Brisbane Qld 4000
Call Centre: 02 8280 7454
Fax: 07 3228 4999
Securities Exchange Listing
ASX Limited
ASX Code: EGH (ordinary shares)
Australian Business Number
15 097 241 159
82
EGH ANNUAL REPORT 2019
71
Eureka Group Holdings Limited and controlled entities
Corporate Directory
Registered Address & Contact Details
Registered Address
Suite 2D 7 Short St, Southport QLD 4215
PO Box PO Box 10819, Southport BC QLD 4215
Postal Address
Phone number
Website
Email
07 5568 0205
www.eurekagroupholdings.com.au
info@eurekagroupholdings.com.au
Board of Directors
Murray Boyte (Executive Chair)
Chief Operating Officer
Chief Financial Officer
Russell Banham
Lachlan McIntosh
Sue Renkin
Senior Management
Cameron Taylor
Tracey Campion
Company Secretary
Laura Fanning
Solicitors
Jones Day
Riverside Centre
Level 31/123 Eagle Street
Brisbane QLD 4000
Tel: 07 3085 7000
Fax: 07 3085 7099
Mills Oakley
Level 14
145 Ann Street
Brisbane QLD 4000
Tel: 07 3228 0400
Fax: 07 3012 8777
Auditors
Ernst & Young
111 Eagle St
Brisbane Qld 4000
Tel: 07 3011 3333
Fax: 07 3011 3344
Share Registry
Link Market Services – Brisbane
Level 21, 10 Eagle Street
Brisbane Qld 4000
Call Centre: 02 8280 7454
Fax: 07 3228 4999
Securities Exchange Listing
ASX Limited
ASX Code: EGH (ordinary shares)
Australian Business Number
15 097 241 159
82
EGH ANNUAL REPORT 2019
71
Head Office
ABN 15 097 241 159
Level 2, 7 Short Street,
Southport Qld 4215
P: (07) 5568 0205
F: (07) 5302 6605
E: info@eurekagroupholdings.com.au