2021
Annual
Report
ANNUAL REPORT 2021
Contents
Executive Chairman’s Report
Environmental, Social & Governance
2021 Results at a Glance
Results Summary
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
i
vii
xiii
xv
1
17
21
64
65
71
72
73
74
2 0 2 1 Annual Report
EXECUTIVE CHAIRMAN’S REPORT
Contents
Executive Chairman’s Report
Environmental, Social & Governance
2021 Results at a Glance
Results Summary
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
i
vii
xiii
xv
1
17
21
64
65
71
72
73
74
2 0 2 1 Annual Report
ANNUAL REPORT 2021
Executive Chairman’s Report
Portfolio Highlights
Financial Review
For the year ended 30 June 2021 (the year), Eureka
Group Holdings Limited (Eureka) reported a profit
after tax of $6.28 million. This compares to a profit
after tax of $8.10 million in 2020.
Key operating financial metrics improved over the
prior year:
Underlying earnings before interest,
tax and depreciation (EBITDA) was
$10.57 million, up 21%;
Net operating cash flow was $7.85
million, up 13% after adjusting for a
$0.64 million in 2020; and
Net tangible assets per share was
37.5 cents, up 6% from 35.5 cents
in 2020.
The profit included a net gain on the revaluation of
investment properties, including those held in a joint
venture, of $2.94 million (2020: $2.47 million) and a
gain on the sale of Terranora units of $0.73 million
(2020: $1.03 million).
Eureka achieved improved returns from its core asset
base during the year, however, earnings per share
growth stalled. The reduction in profit after tax and
earnings per share compared to the prior year was
caused by provisions made against legacy assets of
$1.57 million and a higher effective tax rate of 28%
(2020: 11%). Earnings per share was 2.80 cents, down
from 3.52 cents.
Net debt increased by $3.26 million to $55.28 million
and the gearing ratio, calculated as net debt to net
debt plus equity, was stable at 37.8% (2020: 37.7%).
Total assets increased by 9.5% to $158.97 million.
The asset recycling program and improved net
operating cash flow
for
acquisitions made during the year. The weighted
average capitalisation rate for the core portfolio was
9.9% (2020: 10.1%).
supported
funding
During the year, the debt facility with the National
Australia Bank increased to $77.5 million to facilitate
acquisitions and the expiry date was extended to 31
March 2024. The facility will increase to $80 million
upon settlement of
the deferred consideration
payable for the Hervey Bay acquisition and return of
the associated bank guarantee in November 2022.
i
2 0 2 1 Annual Report
Achieved year-end occupancy rate of 98%
Building an acquisition pipeline with network
compared to 95% in 2020.
synergies and incremental growth.
Acquisition of two villages in Earlville (Cairns)
Disposal of the final 31 units at Terranora, NSW
and Hervey Bay, Qld comprising 123 units for
for gross sale proceeds of $6.02 million. This
$13 million in total.
completes the sale of the 60 strata title units
generating gross proceeds of $12.9 million.
The 22-unit expansion of the Wynnum village,
Brisbane is well progressed with target
Solar energy enhancement completed at 13
completion in December 2021.
villages.
Development application lodged for a 110-unit
Acquisition of a village in Brassall, South-East
greenfield development in Kingaroy, Qld and
Qld in July 2021 for $6.5 million comprising 59
feasibility is underway.
units and land for development of a further 47
lots.
Net gain on revaluation of investment properties including joint venture
Key Results
Profit after tax
Income tax expense
EBITDA
Depreciation, amortisation & finance costs
Gain on sale of Terranora units
Impairment of legacy assets
Transaction costs and non-recurring items
Refund of prior period GST
Underlying EBITDA
Underlying Profit before tax
Net operating cashflow
Earnings per share
Dividends per share
FY2021
FY2020
$’000
6,283
2,459
3,214
11,956
(2,942)
(741)
1,575
721
--
10,569
7,356
7,849
Cents
2.73
1.18
$’000
8,095
980
3,099
12,174
(2,418)
(1,031)
619
--
(644)
8,700
5,601
7,614
Cents
3.52
1.10
21%
31%
3%
7%
Executive Chairman’s Report
Portfolio Highlights
EXECUTIVE CHAIRMAN’S REPORT
Financial Review
For the year ended 30 June 2021 (the year), Eureka
Eureka achieved improved returns from its core asset
Group Holdings Limited (Eureka) reported a profit
base during the year, however, earnings per share
after tax of $6.28 million. This compares to a profit
growth stalled. The reduction in profit after tax and
after tax of $8.10 million in 2020.
earnings per share compared to the prior year was
caused by provisions made against legacy assets of
Key operating financial metrics improved over the
$1.57 million and a higher effective tax rate of 28%
prior year:
(2020: 11%). Earnings per share was 2.80 cents, down
Underlying earnings before interest,
tax and depreciation (EBITDA) was
$10.57 million, up 21%;
Net operating cash flow was $7.85
million, up 13% after adjusting for a
$0.64 million in 2020; and
9.9% (2020: 10.1%).
from 3.52 cents.
Net debt increased by $3.26 million to $55.28 million
and the gearing ratio, calculated as net debt to net
debt plus equity, was stable at 37.8% (2020: 37.7%).
Total assets increased by 9.5% to $158.97 million.
The asset
recycling program and improved net
operating
cash
flow supported
funding
for
acquisitions made during the year. The weighted
average capitalisation rate for the core portfolio was
During the year, the debt facility with the National
Australia Bank increased to $77.5 million to facilitate
acquisitions and the expiry date was extended to 31
March 2024. The facility will increase to $80 million
upon settlement of
the deferred consideration
payable for the Hervey Bay acquisition and return of
the associated bank guarantee in November 2022.
Net tangible assets per share was
37.5 cents, up 6% from 35.5 cents
in 2020.
The profit included a net gain on the revaluation of
investment properties, including those held in a joint
venture, of $2.94 million (2020: $2.47 million) and a
gain on the sale of Terranora units of $0.73 million
(2020: $1.03 million).
Achieved year-end occupancy rate of 98%
compared to 95% in 2020.
Building an acquisition pipeline with network
synergies and incremental growth.
Acquisition of two villages in Earlville (Cairns)
and Hervey Bay, Qld comprising 123 units for
$13 million in total.
Disposal of the final 31 units at Terranora, NSW
for gross sale proceeds of $6.02 million. This
completes the sale of the 60 strata title units
generating gross proceeds of $12.9 million.
The 22-unit expansion of the Wynnum village,
Brisbane
target
completion in December 2021.
is well progressed with
Solar energy enhancement completed at 13
villages.
Development application lodged for a 110-unit
greenfield development in Kingaroy, Qld and
feasibility is underway.
Acquisition of a village in Brassall, South-East
Qld in July 2021 for $6.5 million comprising 59
units and land for development of a further 47
lots.
Key Results
Profit after tax
Income tax expense
Depreciation, amortisation & finance costs
EBITDA
Net gain on revaluation of investment properties including joint venture
Gain on sale of Terranora units
Impairment of legacy assets
Transaction costs and non-recurring items
Refund of prior period GST
Underlying EBITDA
Underlying Profit before tax
Net operating cashflow
Earnings per share
Dividends per share
FY2021
$’000
FY2020
$’000
6,283
2,459
3,214
11,956
(2,942)
(741)
1,575
721
--
10,569
7,356
7,849
Cents
2.73
1.18
8,095
980
3,099
12,174
(2,418)
(1,031)
619
--
(644)
8,700
5,601
7,614
Cents
3.52
1.10
21%
31%
3%
7%
2 0 2 1 Annual Report
ii
ANNUAL REPORT 2021
Operations
Update
Management has continued to build on the Five Pillar operating platform first implemented in 2019.
Five Pillar Operating Platform - FY21 Update
Occupancy, Revenue
+ Cost Initiatives
Team Culture
+ Engagement
Safety, Risk
+ Compliance
Information Systems
+ Technology
Applications
Resident First culture
Redefined roles
is driving occupancy
Regular review of
risk management
Improve and
standardise
Digital marketing
initiatives
and revenue
Upskilling and
systems
training
Productivity
improvement
Policies &
procedures ensure
ongoing safety and
compliance
Voice of the
Resident survey
underway
Cost reduction
initiatives enhance
profitability
Enhanced
community
engagement
Improved enquiry
levels
The benefits of occupancy, revenue and cost
initiatives are now reflected in village performance
which has seen Underlying EBITDA grow 35% over
the past 3 years. Over this period, the number of
units owned and managed has increased by 3% to
2,191. Programs have commenced to upgrade the
internal and external presentation of villages and to
maintain consistent standards throughout the village
network.
Team culture and engagement was a significant
focus during the year. The redefining of support
office and village manager roles continues to evolve
through the upskilling of staff, team development
and training programs resulting
in productivity
improvement. Eureka has transitioned away from
having independent village managers to employee
village managers. Inherent in this structure is a
cultural shift characterised by employees with
empathy, purpose and accountability.
Employees have embraced Eureka's Resident First
culture based on social engagement, care advocacy,
safety and security. Risk management systems are
reviewed regularly and have been modified, where
appropriate, to manage the COVID-19 environment.
Cost-effective digital marketing initiatives have
proven effective in generating enquiry and
relationship building within
local communities is
strengthening the network for potential resident
leads.
To complement and capitalise on the investment
made in Eureka’s support office and village teams
during the year and to ensure scalability of the
business into the future, attention has now turned to
improving Eureka's
technology platform and
operating systems.
iii
2 0 2 1 Annual Report
Environmental, Social and Corporate
Governance (ESG)
Eureka
is
focused
on
creating
sustainable
communities within the social infrastructure segment
in which it operates. A planned and responsible
approach to the implementation of environmental
standards is being developed.
The ESG Committee will beresponsible for:
Overseeing the implementation of ESG
programs and measurement of
The ‘Resident-first’ experience is facilitated through a
high level of interaction between residents and staff
outcomes; and
and community engagement across the village
Monitoring emerging ESG principles to
network. A strong corporate governance culture
exists throughout the organisation.
understand their application to Eureka
and long-term value proposition.
Eureka has established an ESG Committee chaired
by Mr Greg Paramor AO.
COVID-19 Vigilance
During the year, Eureka has continued to assiduously manage COVID-19 risks through a range of best practice
and preventative measures to protect the well-being and health of all concerned and to minimise the risk of
infection and transmission among employees and residents. Eureka acknowledges that many of its residents
have a higher risk of serious illness if they were to contract COVID-19 due to their age and propensity for
underlying health issues.
Eureka strongly recommends and actively encourages residents to be vaccinated against COVID-19 and is
developing a policy to mandate vaccinations for all village and support office staff.
Operations
Update
Management has continued to build on the Five Pillar operating platform first implemented in 2019.
Five Pillar Operating Platform - FY21 Update
Occupancy, Revenue
+ Cost Initiatives
Team Culture
+ Engagement
Safety, Risk
+ Compliance
Information Systems
Applications
+ Technology
Resident First culture
Redefined roles
is driving occupancy
Regular review of
risk management
Improve and
standardise
Digital marketing
initiatives
and revenue
Upskilling and
systems
training
Productivity
improvement
Policies &
procedures ensure
ongoing safety and
compliance
Voice of the
Resident survey
underway
Cost reduction
initiatives enhance
profitability
Enhanced
community
engagement
Improved enquiry
levels
The benefits of occupancy,
revenue and cost
Employees have embraced Eureka's 'Resident-first'
initiatives are now reflected in village performance
culture based on social engagement, care advocacy,
which has seen Underlying EBITDA grow 35% over
safety and security. Risk management systems are
the past 3 years. Over this period, the number of
reviewed regularly and have been modified, where
units owned and managed has increased by 3% to
appropriate, to manage the COVID-19 environment.
2,191. Programs have commenced to upgrade the
internal and external presentation of villages and to
Cost-effective digital marketing initiatives have
maintain consistent standards throughout the village
proven effective in generating enquiry and
network.
relationship building within local communities is
strengthening the network for potential
resident
Team culture and engagement was a significant
leads.
focus during the year. The redefining of support
office and village manager roles continues to evolve
To complement and capitalise on the investment
through the upskilling of staff, team development
made in Eureka’s support office and village teams
and training programs resulting in productivity
during the year and to ensure scalability of
the
improvement. Eureka has transitioned away from
business into the future, attention has now turned to
village managers.
Inherent
in this structure is a
operating systems.
cultural shift characterised by employees with
empathy, purpose and accountability.
EXECUTIVE CHAIRMAN’S REPORT
Environmental, Social and Corporate
Governance (ESG)
Eureka
is
focused on creating
sustainable
communities within the social infrastructure segment
in which it operates. A planned and responsible
approach to the implementation of environmental
standards is being developed.
The ESG Committee will be responsible for:
Overseeing the implementation of ESG
programs and measurement of
The Resident First experience is facilitated through a
high level of interaction between residents and staff
outcomes; and
and community engagement across the village
Monitoring emerging ESG principles to
network. A strong corporate governance culture
exists throughout the organisation.
understand their application to Eureka
and long-term value proposition.
Eureka has established an ESG Committee chaired
by Mr Greg Paramor AO.
having independent village managers to employee
improving
Eureka's
technology
platform and
have a higher risk of serious illness if they were to contract COVID-19 due to their age and propensity for
COVID-19 Vigilance
During the year, Eureka has continued to assiduously manage COVID-19 risks through a range of best practice
and preventative measures to protect the well-being and health of all concerned and to minimise the risk of
infection and transmission among employees and residents. Eureka acknowledges that many of its residents
underlying health issues.
Eureka strongly recommends and actively encourages residents to be vaccinated against COVID-19 and is
developing a policy to mandate vaccinations for all village and support office staff.
2 0 2 1 Annual Report
iv
ANNUAL REPORT 2021
Dividends
Eureka has paid the following unfranked
dividends to shareholders for the year ended
30 June 2021:
An interim dividend of 0.59 cents per share
was paid on 21 April 2021; and
A final dividend of 0.59 cents per share was
paid on 28 September 2021.
Eureka’s Dividend Reinvestment Plan (DRP) was established during the year as a capital management initiative
and was active for both of the above dividends.
The DRP participation rate was very strong. The issue of shares under the DRP was also fully underwritten by
Taylor Collison Limited stockbrokers with the support of new and existing institutional and sophisticated
investors.
FY22 Priorities
Considerable progress has been made in improving
Eureka has a sound financial platform and is well
resident experience, embedded in the Resident
placed to accelerate
its village acquisition and
First culture. Eureka will continue to build on this
development program. A capital management plan is
ethos as it expands its business.
being developed to support the strategic growth plan.
Eureka’s corporate office has been established in
Brisbane from September 2021. The relocation was
driven by access to a deeper talent pool for
recruitment of staff, intra and interstate travel
advantages and domicile of key support services.
Further assets have been identified for recycling and
a pipeline of acquisitions, brownfield and greenfield
development opportunities are being identified to
underpin an earnings accretive scaling of the
business.
The upgrade of the technology platform remains a
priority.
v
“Eureka is committed to
profitable expansion that
will enhance shareholder
value on a sustainable
basis.”
2 0 2 1 Annual Report
Directors
& Staff
Eureka has a small, cohesive board that has a well-balanced skill
set covering property investment and management, property
funds management, finance, healthcare, organisational
development,
commercial
experience
and
corporate
governance including a comprehensive understanding of ESG
principles and application.
Eureka’s Board and management have undertaken a
comprehensive review of human resource requirements and
consequently key roles have been reset and upskilled to ensure
the Company has in place the necessary capabilities for
execution of its strategic plan. The Company has transitioned a
successful cultural shift to empowering employees with a higher
level of accountability and purpose while maintaining a
philosophy of empathy, care and safety, fundamental to the
services we provide in the social infrastructure sector.
Cameron Taylor was the Group’s Chief Operating Officer during
the year and has been appointed Chief Executive Officer
effective 1 July 2021, reflecting Cameron’s continuing progress
and the Board’s confidence for him to lead the growth path.
In December 2020, Laura Fanning, Company Secretary was
appointed Chief Financial Officer (CFO). Laura brings a wealth of
experience and competency to this role having undertaken
Company Secretary, CFO, corporate governance and finance
leadership roles for nearly 20 years in the listed sector.
Tracey Campion, the former CFO, was appointed General
Manager - Operations. Tracey has a strong finance background
and understanding of operating systems which has enhanced
the focus on village performance, safety, security and support
office and village team engagement.
I thank all staff for their contribution and effort during a year of
change. To our shareholders, the Board thanks you for your
continued support.
Murray Boyte
EXECUTIVE CHAIRMAN
MBoyte Dividends
Eureka has paid the following unfranked
dividends to shareholders for the year ended
30 June 2021:
An interim dividend of 0.59 cents per share
was paid on 21 April 2021; and
A final dividend of 0.59 cents per share was
paid on 28 September 2021.
Eureka’s Dividend Reinvestment Plan (DRP) was established during the year as a capital management initiative
and was active for both of the above dividends.
The DRP participation rate was very strong. The issue of shares under the DRP was also fully underwritten by
Taylor Collison Limited stockbrokers with the support of new and existing institutional and sophisticated
investors.
FY22 Priorities
Considerable progress has been made in improving
Eureka has a sound financial platform and is well
resident experience, embedded in the ‘Resident-
placed to accelerate
its village acquisition and
first’ culture. Eureka will continue to build on this
development program. A capital management plan is
ethos as it expands its business.
being developed to support the strategic growth plan.
Eureka’s corporate office has been established in
Brisbane from September 2021. The relocation was
driven by access to a deeper talent pool for
recruitment of staff,
intra and
interstate travel
advantages and domicile of key support services.
Further assets have been identified for recycling and
a pipeline of acquisitions, brownfield and greenfield
development opportunities are being identified to
underpin an earnings accretive scaling of the
business.
priority.
The upgrade of the technology platform remains a
“Eureka is committed to
profitable expansion that
will enhance shareholder
value on a sustainable
basis.”
EXECUTIVE CHAIRMAN’S REPORT
Directors
& Staff
Eureka has a small, cohesive board that has a well-balanced skill
set covering property investment and management, property
funds management, finance, healthcare, organisational
development,
commercial
experience
and
corporate
governance including a comprehensive understanding of ESG
principles and application.
Eureka’s Board and management have undertaken a
comprehensive review of human resource requirements and
consequently key roles have been reset and upskilled to ensure
the Company has in place the necessary capabilities for
execution of its strategic plan. The Company has transitioned a
successful cultural shift to empowering employees with a higher
level of accountability and purpose while maintaining a
philosophy of empathy, care and safety, fundamental to the
services we provide in the social infrastructure sector.
Cameron Taylor was the Group’s Chief Operating Officer during
the year and has been appointed Chief Executive Officer
effective 1 July 2021, reflecting Cameron’s continuing progress
and the Board’s confidence for him to lead the growth path.
In December 2020, Laura Fanning, Company Secretary was
appointed Chief Financial Officer (CFO). Laura brings a wealth of
experience and competency to this role having undertaken
Company Secretary, CFO, corporate governance and finance
leadership roles for nearly 20 years in the listed sector.
Tracey Campion, the former CFO, was appointed General
Manager - Operations. Tracey has a strong finance background
and understanding of operating systems which has enhanced
the focus on village performance, safety, security and support
office and village team engagement.
I thank all staff for their contribution and effort during a year of
change. To our shareholders, the Board thanks you for your
continued support.
Murray Boyte
EXECUTIVE CHAIRMAN
2 0 2 1 Annual Report
vi
MBoyte ANNUAL REPORT 2021
Eureka's approach to ESG
As a leading provider in the rental retirement
living sector, we value the contribution we
make within
infrastructure
this social
segment and we have made a corporate
commitment to uphold high Environmental,
Social and Governance (ESG) standards.
Integrating ESG considerations into our
portfolio management and operational
decision-making processes is fundamental
to delivering the results our investors seek
and the experience our employees and
residents deserve.
including
Our corporate commitment to ESG extends
to our people,
residents,
shareholders, employees and stakeholders
alike, the environment and our climate, the
communities we are part of and our
governance structure.
Our social conscience is at the heart of our
business and drives our Resident First
culture. We value and engage with our
residents, employees, and
the wider
communities in which we operate.
promoting
We are committed to creating sustainable
communities,
greater
environmental responsibility and resource
Eureka’s
efficient
operations and activities and driving positive
change in our sector, within a framework of
strong corporate governance.
processes
across
The Board has commenced developing an
investing and environmental sustainability
strategy to guide the Group over the next
few years to deliver on its broader economic,
environmental, and social goals.
Environmental, Social
and Governance
The Company’s core values are central to the Group’s Resident
First philosophy. Teamwork, respect, empathy, community and
kindness enable Eureka to make a difference in the lives of
residents and to create communities that empower residents to
live independently and provide enrichment through community
engagement.
Operating ethically, legally and with integrity, while maintaining
safety and compliance standards ensures our residents can live in
safe, secure communities.
Our robust risk management framework with documented policies
facilitates legislative and regulatory compliance and reporting. We
are proud to be able to deliver strong business returns to
shareholders that are underpinned by strong corporate values.
We are pleased to present several new initiatives which have been
implemented throughout the business over the past year as part of
our commitment to our corporate ESG strategy. We will continue to
develop our ESG footprint in the coming year.
Environmental
Governance
Corporate Social
Responsibility
Solar energy
Resident First
Ethical business practices
Water recyling
Risk management systems
One team
Community engagement
Dedicated dog parks
Waste management
Safety & compliance
Community gardens
The Kitchen Club
Board governance
“Our social conscience is at the heart of
our business and drives our Resident
First culture.”
vii
2 0 2 1 Annual Report
Environmental, Social
and Governance
EXECUTIVE CHAIRMAN’S REPORT
RESULTS SUMMARY
Eureka's approach to ESG
As a leading provider in the rental retirement
living sector, we value the contribution we
make within
this social
infrastructure
segment and we have made a corporate
commitment to uphold high Environmental,
Social and Governance (ESG) standards.
Integrating ESG considerations
into our
portfolio management and operational
decision-making processes is fundamental
to delivering the results our investors seek
and the experience our employees and
residents deserve.
Our corporate commitment to ESG extends
to our people,
including
residents,
shareholders, employees and stakeholders
alike, the environment and our climate, the
communities we are part of and our
governance structure.
Our social conscience is at the heart of our
business and drives our Resident First
culture. We value and engage with our
residents, employees, and
the wider
communities in which we operate.
We are committed to creating sustainable
communities,
promoting
greater
environmental responsibility and resource
efficient
processes
across
Eureka’s
operations and activities and driving positive
change in our sector, within a framework of
strong corporate governance.
The Board has commenced developing an
investing and environmental sustainability
strategy to guide the Group over the next
few years to deliver on its broader economic,
environmental, and social goals.
The Company’s core values are central to the Group’s Resident
First philosophy. Teamwork, respect, empathy, community and
kindness enable Eureka to make a difference in the lives of
residents and to create communities that empower residents to
live independently and provide enrichment through community
engagement.
Operating ethically, legally and with integrity, while maintaining
safety and compliance standards ensures our residents can live in
safe, secure communities.
Our robust risk management framework with documented policies
facilitates legislative and regulatory compliance and reporting. We
are proud to be able to deliver strong business returns to
shareholders that are underpinned by strong corporate values.
We are pleased to present several new initiatives which have been
implemented throughout the business over the past year as part of
our commitment to our corporate ESG strategy. We will continue to
develop our ESG footprint in the coming year.
Environmental
Corporate Social
Responsibility
Governance
Solar energy
Resident First
Ethical business practices
Water recyling
Risk management systems
One team
Community engagement
Waste management
Safety & compliance
Dedicated dog parks
Community gardens
The Kitchen Club
Board governance
“Our social conscience is at the heart of
our business and drives our Resident
First culture.”
2 0 2 1 Annual Report
2 0 2 1 Annual Report
viii
ANNUAL REPORT 2021
Social Focus
Resident First
Philosophy
Our mission is to empower our residents to live
independently
in
safe and
secure
village
communities and to provide enrichment through
social engagement.
We have
introduced our
Resident First culture which puts our residents at the
heart of all decisions.
This philosophy
is
underpinned by compassion, respect and trust and it
is this mindset that ensures we can improve people’s
lives while being a leading rental retirement living
provider.
Our team’s empathy and genuine interest in our
residents
is fundamental to our Resident First
philosophy.
Ensuring that we listen to and continue to meet our
The inaugural VOR will provide a baseline measure of
residents’ wants and needs is important to our
resident satisfaction.
Once
the baseline
is
success. In July 2021, we commenced an inaugural
established, the survey will be conducted annually to
resident satisfaction survey across 16 villages to
assess improvement. VOR results will become part of
measure the Voice of the Resident (VOR).
our everyday language as we continually shape our
Resident First Philosophy into the future.
Community
Engagement
Engaging local business operators and continually improving our social connections with charities and network
groups cements our role as a leading provider of rental retirement villages in the local communities in which we
operate.
Work has commenced on establishing a program for cause associations, charity sponsorships and
volunteering. Residents and employees enjoy supporting local and national charities through donations and
fundraising. A highlight for Eureka in FY21 was a collective fundraising contribution for the Cancer Council
through Australia’s Biggest Morning Tea event.
ix
2 0 2 1 Annual Report
One Team
Culture
Eureka fosters a culture which encourages diversity, and an inclusive workplace where employee differences
in areas such as gender, age, culture, disability, and lifestyle choice are valued. Women represent more than
60% of employees, hold 50% of executive positions, and 25% of board positions.
In addition to this, our mission to attract and retain employees who are empathetic and care about making a
difference in the lives of our residents’ is also vital to building our ‘One Team Culture’.
Our operations centre around our villages and our residents. Our village and support office teams have been
chosen for their respective skills and experience to create ‘one team’ with a common goal. This has been an
important cultural shift during the FY21 year and has translated into improved shareholder returns.
Dedicated
Dog Parks
Pets are an important part of our
lives and play a vital role in our
residents’ overall wellbeing. As
part of our
commitment
to
ensuring our villages are pet
friendly and provide improved
facilities
for our
four-legged
residents, we commenced the
installation of dedicated dog
parks in villages with open space.
Social Focus
Resident First
Philosophy
Our mission is to empower our residents to live
independently
in
safe and
secure
village
communities and to provide enrichment through
social engagement.
We have
introduced our
Resident First culture which puts our residents at the
heart of all decisions.
This
philosophy
is
underpinned by compassion, respect and trust and it
is this mindset that ensures we can improve people’s
lives while being a leading rental retirement living
provider.
philosophy.
Our team’s empathy and genuine interest in our
residents
is fundamental to our Resident First
Ensuring that we listen to and continue to meet our
The inaugural VOR will provide a baseline measure of
residents’ wants and needs is important to our
resident satisfaction.
Once
the baseline
is
success. In July 2021, we commenced an inaugural
established, the survey will be conducted annually to
resident satisfaction survey across 16 villages to
assess improvement. VOR results will become part of
measure the Voice of the Resident (VOR).
our everyday language as we continually shape our
Resident First Philosophy into the future.
Community
Engagement
Engaging local business operators and continually improving our social connections with charities and network
groups cements our role as a leading provider of rental retirement villages in the local communities in which we
operate.
Work has commenced on establishing a program for cause associations, charity sponsorships and
volunteering. Residents and employees enjoy supporting local and national charities through donations and
fundraising. A highlight for Eureka in FY21 was a collective fundraising contribution for the Cancer Council
through Australia’s Biggest Morning Tea event.
ENVIRONMENTAL, SOCIAL & GOVERNANCE
One Team
Culture
Eureka fosters a culture which encourages diversity, and an inclusive workplace where employee differences
in areas such as gender, age, culture, disability, and lifestyle choice are valued. Women represent more than
60% of employees, hold 50% of executive positions, and 25% of board positions.
In addition to this, our mission to attract and retain employees who are empathetic and care about making a
difference in the lives of our residents’ is also vital to building our ‘One Team Culture’.
Our operations centre around our villages and our residents. Our village and support office teams have been
chosen for their respective skills and experience to create ‘one team’ with a common goal. This has been an
important cultural shift during the FY21 year and has translated into improved shareholder returns.
Dedicated
Dog Parks
Pets are an important part of our
lives and play a vital role in our
residents’ overall wellbeing. As
part of our commitment
to
ensuring our villages are pet
friendly and provide improved
facilities
for our
four-legged
residents, we commenced the
installation of dedicated dog
parks in villages with open space.
2 0 2 1 Annual Report
x
ANNUAL REPORT 2021
The Kitchen
Club
Nothing brings people together like
good food. A new initiative aimed at
bringing together the talented chefs
and cooks at our catered villages is
The Kitchen Club. The Kitchen Club
provides our kitchen teams with a
platform to share meal ideas, menus
and photos of food presentation and
to inspire one another to provide our
residents with nutritionally balanced,
delicious, and eye-catching menus
that they will enjoy.
xi
2 0 2 1 Annual Report
Environmental Initiatives
Sustainability
A core business focus
in FY21 has
centred around conserving energy,
waste management, recycling and water
storage.
Key initiatives including a water recycling
program and a biodegradable waste
management plan have been introduced
to
ensure
our
environmental
sustainability into the future.
Building community gardens and veggie
patches has been a welcomed initiative
throughout our
villages. Providing
residents with the ability to be part of the
beautification of our villages, creates a
sense of pride in their home, a thriving
community and a wonderful opportunity
for social engagement.
Solar
Program
As part of our commitment to
reducing our carbon footprint
and to providing affordable
electricity for our residents,
solar panels have been
installed in 13 of our villages.
With
an
additional
five
villages due to receive solar
panels over the coming year,
our goal by 2025 is for solar
energy to be our main source
of energy throughout all our
villages.
The Kitchen
Club
Nothing brings people together like
good food. A new initiative aimed at
bringing together the talented chefs
and cooks at our catered villages is
The Kitchen Club. The Kitchen Club
provides our kitchen teams with a
platform to share meal ideas, menus
and photos of food presentation and
to inspire one another to provide our
residents with nutritionally balanced,
delicious, and eye-catching menus
that they will enjoy.
ENVIRONMENTAL, SOCIAL & GOVERNANCE
Environmental Initiatives
Sustainability
A core business focus
in FY21 has
centred around conserving energy,
waste management, recycling and water
storage.
Key initiatives including a water recycling
program and a biodegradable waste
management plan have been introduced
to
environmental
our
sustainability into the future.
ensure
Building community gardens and veggie
patches has been a welcomed initiative
villages. Providing
throughout our
residents with the ability to be part of the
beautification of our villages, creates a
sense of pride in their home, a thriving
community and a wonderful opportunity
for social engagement.
Solar
Program
As part of our commitment to
reducing our carbon footprint
and to providing affordable
electricity for our residents,
solar panels have been
installed in 13 of our villages.
With
an
additional
five
villages due to receive solar
panels over the coming year,
our goal by 2025 is for solar
energy to be our main source
of energy throughout all our
villages.
2 0 2 1 Annual Report
xii
ANNUAL REPORT 2021
2,191
TOTAL UNITS UNDER MANAGEMENT
2%
WA
NT
SA
40 VILLAGES
32 OWNED 8 UNDER
MANAGEMENT
2021
results
at a
UNDERLYING EBITDA
$10.57M
21%
UNDERLYING PROFIT
BEFORE TAX
glance $7.36M
31%
“Growth in core
operations.”
EARNINGS
PER SHARE
2.73 cents
3.52 cents [FY20]
DIVIDENDS
PER SHARE
1.18 cents
7%
INVESTMENT PROPERTY
VALUES
SA
$24.9m
VIC
$9.7m
NSW
$21.0m
QLD
$83.4m
OCCUPANCY
98%
FROM 95%
CAPITALISATION RATE
9.9%
10.1% [FY20]
37.8%
GEARING
NET DEBT TO NET DEBT
PLUS EQUITY
4.5times
INTEREST
COVER
QLD
NSW
VIC
TAS
xiii
2 0 2 1 Annual Report
2,191
TOTAL UNITS UNDER MANAGEMENT
2%
WA
NT
SA
40 VILLAGES
32 OWNED 8 UNDER
MANAGEMENT
QLD
NSW
VIC
TAS
2021 RESULTS AT A GLANCE
UNDERLYING EBITDA
$10.57M
2021
results
at a
glance $7.36M
UNDERLYING PROFIT
BEFORE TAX
21%
31%
“Growth in core
operations.”
EARNINGS
PER SHARE
2.73 cents
3.52 cents [FY20]
DIVIDENDS
PER SHARE
1.18 cents
7%
INVESTMENT PROPERTY
VALUES
SA
$24.9m
VIC
$9.7m
NSW
$21.0m
QLD
$83.4m
OCCUPANCY
98%
FROM 95%
CAPITALISATION RATE
9.9%
10.1% [FY20]
37.8%
GEARING
NET DEBT TO NET DEBT
PLUS EQUITY
4.5times
INTEREST
COVER
2 0 2 1 Annual Report
xiv
ANNUAL REPORT 2021
Results Summary
I
A
D
T
B
E
g
n
i
y
l
r
e
d
n
U
$12m
$10m
$8m
$6m
$4m
$2m
$m
40.0%
30.0%
20.0%
10.0%
0.0%
i
I
%
n
g
r
a
M
A
D
T
B
E
g
n
i
y
l
r
e
d
n
U
FY17
FY18
FY19
FY20
FY21
1H
2H
Underlying EBITDA margin
Revenue
& Other
Income - $m
Revenue growth driven by acquisition.
2017
2018
2019
2020
2021
Underlying
EBITDA
Growth in Underlying EBITDA and underlying
EBITDA margin achieved through acquisition and
recycling of non-core assets.
35% increase in Underlying EBITDA over 3 years
while unit numbers increased by 3%.
Profit Before
Tax - $m
FY21 profit was reduced by a $1.6m
impairment of legacy assets.
-0.3
2017
2018
2019
2020
2021
6.5
6.8
9.1
8.7
25.4
23.2
23.4
26.1
29.4
2017
2018
2019
2020
2021
Dividends -
cents per share
Steady dividend growth. Introduction of
dividend reinvestment plan in FY21.
1.00
1.10
1.18
2017
2018
2019
2020
2021
4.1
4.2
4.7
Operating Cash
Flow - $m
Cash flow from operating activities increased by
3% in FY21 on a statutory basis and 13%
excluding the impact of a prior year GST refund
received in FY20.
7.6
7.8
Net
Assets - $m
Annual profits increasing net assets.
2017
2018
2019
2020
2021
74.9
74.7
81.5
85.9
90.9
xv
2 0 2 1 Annual Report
Results Summary
A
D
T
I
B
E
g
n
i
y
l
r
e
d
n
U
$12m
$10m
$8m
$6m
$4m
$2m
$m
40.0%
30.0%
20.0%
10.0%
0.0%
%
n
i
g
r
a
M
A
D
T
I
B
E
g
n
i
y
l
r
e
d
n
U
Underlying
EBITDA
Growth in Underlying EBITDA and underlying
EBITDA margin achieved through acquisition and
recycling of non-core assets.
35% increase in Underlying EBITDA over 3 years
while unit numbers increased by 3%.
FY17
FY18
FY19
FY20
FY21
1H
2H
Underlying EBITDA margin
Revenue
& Other
Income - $m
Revenue growth driven by acquisition.
2017
2018
2019
2020
2021
RESULTS SUMMARY
Profit Before
Tax - $m
FY21 profit was reduced by a $1.6m
impairment of legacy assets.
-0.3
2017
2018
2019
2020
2021
6.5
6.8
9.1
8.7
25.4
23.2
23.4
26.1
29.4
2017
2018
2019
2020
2021
Dividends -
cents per share
Steady dividend growth. Introduction of
dividend reinvestment plan in FY21.
1.00
1.10
1.18
2017
2018
2019
2020
2021
4.1
4.2
4.7
Operating Cash
Flow - $m
Cash flow from operating activities increased by
3% in FY21 on a statutory basis and 13%
excluding the impact of a prior year GST refund
received in FY20.
7.6
7.8
Net
Assets - $m
Annual profits increasing net assets.
2017
2018
2019
2020
2021
74.9
74.7
81.5
85.9
90.9
2 0 2 1 Annual Report
xvi
2021
Financial
Report
Eureka Group Holdings Limited and controlled entities
Directors’ Report
The Directors present their report on Eureka Group Holdings Limited (the Company) and its controlled entities (the Group,
Eureka or the Consolidated Entity) for the year ended 30 June 2021 (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
Russell Banham
Greg Paramor AO
PRINCIPAL ACTIVITIES
The principal activities of the Group include the provision of:
•
•
Accommodation and services to independent senior residents; and
Specialist property management and caretaking services for seniors’ independent living communities.
REVIEW OF OPERATIONS AND RESULTS
The Group has reported a profit before tax for the year of $8.74 million (2020: $9.08 million) and a profit after tax of $6.28
million (2020: $8.10 million). Underlying EBITDA1 was $10.57 million (2020: $8.70 million) and Underlying Profit before tax1
was $7.36 million (2020: $5.60 million).
The growth in the Group’s underlying results is due to the increased revenue and profit contribution from the Group’s portfolio
of residential village assets, including the acquisition during the year of two rental villages, ownership of the 124-unit rental
village in Bundaberg for the whole year and improved occupancy across the portfolio of owned villages to 98% (2020: 95%).
The strong village performance has resulted in a net increase in the fair value of investment properties during the year,
including the Tasmanian assets which are owned in a joint venture. The Group’s profit before tax is lower than the previous
year due to a lesser gain on the sale of units at Terranora, a reduction in the carrying value of the Terranora land held for sale,
impairment of the Couran Cove loan and receipt in the previous year of a multi-period goods and services tax (GST) refund.
The financial impact of COVID-19 has been minimal with increased operating costs mitigated by Government support.
The current year income tax expense of $2.46 million (2020: $0.98 million) is higher than the prior year because deferred tax
assets relating to all carry forward revenue tax losses were recognised in the prior year. The Group’s statutory tax rate is
26% (2020: 30%). No cash tax will be payable until the Group has utilised its carry forward revenue tax losses.
Net operating cash flow for the year was $7.85 million (2020: $7.61 million).
At 30 June 2021, Eureka owned 32 villages (2020: 30), 5 of which are owned in a joint venture, and has 8 villages under
management, representing 2,191 units (2020: 2,147 units).
A summary of the Group’s performance and reconciliation to the Group’s Underlying EBITDA1 is shown below:
Performance summary
Profit before income tax expense
Profit after income tax expense
Basic earnings per share
Diluted earnings per share
Consolidated
30 June 2021
$’000
30 June 2020
$’000
8,742
6,283
2.73
2.72
9,075
8,095
3.52
3.52
1
The terms EBITDA, Underlying EBITDA and Underlying Profit before tax are defined on page 2.
1
ANNUAL REPORT 2021
1
2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Directors’ Report
Consolidated
30 June 2021
$’000
30 June 2020
$’000
Underlying EBITDA1 reconciliation
Profit after income tax expense
Income tax expense
Depreciation and amortisation
Finance costs
EBITDA1
Net gain on revaluation of investment properties, including joint venture properties
Net loss on revaluation of assets held for sale
Impairment of intangible and other assets
Profit on sale of non-core assets
Refund of prior periods GST
Transaction costs – acquisitions, disposals and asset realisations
Property expenses – non-recurring3
Other
Underlying EBITDA1
6,283
2,459
587
2,626
11,955
(2,942)
525
1,050
(741)
-
316
279
127
10,569
8,095
980
591
2,508
12,174
(2,471)
53
619
(1,031)
(644)
-
-
-
8,700
Underlying Profit before tax2
7,356
5,601
EBITDA (Earnings before interest, tax, depreciation and amortisation) is an unaudited non-IFRS measure. 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 is calculated from amounts disclosed in the financial statements.
Underlying EBITDA is an unaudited non-IFRS measure that represents the operating performance of the Group and excludes valuation
adjustments, asset disposals and certain non-core or non-recurring transactions.
Underlying Profit before tax is an unaudited non-IFRS measure and equals Underlying EBITDA less finance costs, depreciation and
amortisation.
Prior year land tax estimate.
1
2
3
Financial Position
Summary information in relation to the Group’s financial position is shown below:
Total assets
Net assets
Cash and cash equivalents
Debt – bank loan
Shares on issue
Net tangible assets per share
Balance sheet gearing1
$’000
$’000
$’000
$’000
‘000
cents
%
Consolidated
30 June 2021
30 June 2020
158,969
90,880
1,890
57,175
232,384
37.5
37.8
145,205
85,868
2,451
54,472
230,038
35.5
37.7
1
Balance sheet gearing is calculated as net debt (being interest-bearing drawn debt net of cash) divided by net debt plus equity.
Significant balance sheet movements during the year are described below.
ANNUAL REPORT 2021
2
2
2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Directors’ Report
Acquisitions and asset management
The Group acquired two rental villages for a total consideration of $13.00 million (excluding transactions costs) in November
2020 consisting of a 70-unit village in Earlville (Cairns), Qld and a 53 unit village in Hervey Bay, Qld. The Group also acquired
an additional 3 units in its strata-titled village in Elizabeth Vale, South Australia for $0.35 million.
The Group spent $3.19 million (2020: $1.94 million) on enhancing its owned villages through capital improvements including
expenditure on its solar energy program, security and safety upgrades and progression of the Wynnum village expansion.
There were no other significant acquisitions made during the year.
Disposals – Terranora, NSW
During the year, the Group completed the sale of all remaining units at Terranora, NSW. 31 units (2020: 27 units) were sold
and settled for total consideration of $6.02 million (2020: $6.39 million) resulting in a gain on sale of $0.73 million (2020: $1.03
million). The total consideration and gain realised from the sale of the 60 units at Terranora since 2019 was $12.95 million
and $1.76 million respectively.
The Group still owns a vacant 4.8 hectare parcel of land at Terranora with a carrying value of $1.83 million (2020: $2.30
million) and a manager’s unit with a carrying value of $0.60 million (2020: $0.60 million). The land has been reclassified from
investment property to non-current assets held for sale and a fair value decrement of $0.47 million (2020: $nil) has been
recorded. A conditional contract for the sale of the land has been entered into since balance date for a value in line with the
carrying value at year end. The contract is subject to due diligence and has a six month settlement period.
The manager’s unit continues to be held as investment property and opportunities for the realisation of this asset are being
considered.
Couran Cove loans receivable
The carrying value of the West Cabin loan receivable ($0.32 million) has not changed during the year. Since balance date, a
12 month repayment plan has been agreed. Two cabins at Couran Cove, Qld continue to be held as security against the
loan. Details are contained in Note 8.
The carrying value of a loan receivable for $3 million, including land option, which gives the Group a first right of refusal to
purchase 60 proposed cabin sites for $50,000 per site at Couran Cove, Qld has been reassessed following a thorough review
during the year including independent assessment of the land held as security for the loan. The assessed fair value of $nil
(2020: $1.05 million), resulted in an impairment charge of $1.05 million (2020: $0.19 million) being recorded during the year.
There has been no change to the Group’s security arrangements, including a mortgage over the land. The loan expiry date
was extended to 31 August 2021 during the year. Details are contained in Note 9.
Capital management – debt & equity
Debt
During the year, the Group’s National Australia Bank (NAB) facility was increased from $60.00 million to $77.50 million to
facilitate the acquisition of the new villages in Hervey Bay and Cairns, expansion of the Wynnum village and to provide
headroom for future acquisitions. The expiry date was extended to 31 March 2024 and the limit will increase to $80 million
upon settlement of the deferred consideration payable for the Hervey Bay acquisition and return of the associated bank
guarantee in November 2022.
The Group was in compliance with all banking covenants during the year. Under the terms of its NAB debt facility, Eureka is
able to deposit and withdraw funds in accordance with its working capital needs, subject to satisfaction of the bank’s
covenants. At balance date, the drawn amount under the facility was $57.18 million (2020: $54.47 million). Details are
contained in Note 19.
Equity
Equity movements and balances for the year are as follows:
•
Dividends of $2.62 million (2020: $3.57 million) were paid during the year, comprising $1.98 million in cash (2020:
$3.57 million) and $0.64 million in shares (2020: $nil) pursuant to the Dividend Reinvestment Plan (DRP) established
during the year.
3
ANNUAL REPORT 2021
3
2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Directors’ Report
•
•
•
The DRP was in effect for the interim dividend paid in April 2021 and was fully underwritten resulting in 2,346,779
shares being issued for 57.73 cents per share on 21 April 2021. Existing shareholders subscribed for $0.64 million in
shares and proceeds of $0.71 million were received from the DRP underwriter;
There were 429,362 share rights outstanding at 30 June 2021 (2020: 429,362). Further details are provided in the
Remuneration Report; and
The on-market share buy-back was cancelled on 16 March 2021. No shares were bought back and cancelled during
the year (2020: nil).
DIVIDENDS
Dividends paid during the year were as follows:
Final dividend - 2020: 0.55 cents per share (2019: 1.0 cent per share)
Interim dividend - 2021: 0.59 cents per share (2020: 0.55 cents per share)
Total dividends paid
30 June 2021
$’000
30 June 2020
$’000
1,265
1,357
2,622
2,300
1,265
3,565
A final dividend for the year of 0.59 cents per share, amounting to $1.37 million, was declared at the date of signing these
financial statements and is payable on 28 September 2021. The record date is 6 September 2021. The DRP will be in effect
for this dividend. The financial effect of this dividend has not been brought to account in the financial statements for the year
ended 30 June 2021 and will be recognised in subsequent financial reports.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Eureka is committed to:
•
•
•
•
•
Developing its social, environmental and governance framework. The Board established an Environmental, Social
& Governance Committee on 10 August 2021 that will be responsible for providing recommendations for
social governance and environmental initiatives in accordance with the Group’s Resident First philosophy, its social
licence to provide affordable rental accommodation to a growing number of seniors and minimising the Group’s
environmental impact;
Further expanding its core business of providing rental accommodation for independent seniors through the active
management of existing assets, the acquisition of additional villages and units, and the realisation of development
opportunities, including the expansion of the Group’s village in Wynnum, Qld;
Improving the performance of the 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; and
Recycling of capital through the divestment of the Group’s non-core assets and active portfolio management including
the disposal of assets which may cease to meet target performance levels, risk appetite levels or efficiency metrics.
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 33.
MATERIAL BUSINESS RISKS
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:
ANNUAL REPORT 2021
4
4
2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Directors’ Report
•
•
•
Covid-19 - The health, safety and wellbeing of Eureka’s staff, residents and families and the local communities in which
it operates is paramount to the Company. The Group acknowledges that many of its residents have a higher risk of
serious illness if they were to contract Covid-19, due to their age and propensity for underlying health issues. The
Group has implemented a range of best practice and preventative measures as recommended by the relevant
authorities to protect the health and well-being of all concerned and to minimise the risk of infection and transmission
amongst residents and staff. The Group actively and strongly encourages residents to be vaccinated against Covid-19
and is developing its policy to mandate vaccinations for all village and support office staff;
The independent-living nature of the accommodation in Eureka’s villages means that residents are able to self-isolate
readily and effectively to minimise the risk of viral transmission. Further, having a village network that is geographically
widespread through predominantly regional centres of Australia mitigates the risk of Covid-19 spreading from one
village to another. The Group continues to closely monitor information and recommendations in relation to Covid-19;
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 conducts
comprehensive analysis and due diligence as part of its acquisition process; and
Changes in Government funding (pension, rent assistance and National Disability Insurance Scheme (NDIS)) – the
Group provides affordable rental accommodation predominantly 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.
SUBSEQUENT EVENTS
Details of events that occurred after the end of the financial year are contained in Note 33.
ENVIRONMENTAL REGULATION
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:
Murray Boyte
Executive Chairman
BCA, MAICD, CMInstD, CA
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. 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.
Other listed company directorships: National Tyre & Wheel Limited (ASX: NTD), Hillgrove Resources Ltd (ASX: HGO) and
Former directorships (last 3 years)
Special responsibilities:
Interests in shares:
Interests in options:
Name:
Title:
Qualifications:
Eumundi Group Ltd (ASX: EBG).
Abano Healthcare Group Limited (NZX)
Chair of the Board, Member of the Audit & Risk Committee, Member of the Nomination
& Remuneration Committee, Member of the Environmental, Social & Governance
Committee (appointed 10 August 2021).
782,920
Nil
Sue Renkin
Non-Executive Director
RN, MBA, FCDA, GradDip Corp Gov, MAICD
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Directors’ Report
Experience & expertise:
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 Chair of Executive Growth, a Director of GMHBA Health Insurance, a Director
of the National Imaging Facility’s Governing Board, Chair of the South Eastern
Melbourne Primary Health Network and a strategic advisor to McKenzie Aged Care
Group. She is also a previous Telstra Business Woman of the year.
Other listed company directorships: Nil
Nil
Former directorships (last 3 years)
Chair of the Nomination & Remuneration Committee, Member of the Audit & Risk
Special responsibilities:
Committee until 14 July 2020, Member of the Environmental, Social & Governance
Committee (appointed 10 August 2021).
Nil
Nil
Interests in shares:
Interests in options:
Name:
Title:
Qualifications:
Experience & expertise:
Russell Banham
Non-Executive Director
B. Com, GAICD, FCA
Russell has a Bachelor of Commerce degree, is a Graduate Member of the Australian
Institute of Company Directors and is a fellow of the Institute 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.
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:
Interests in shares:
Interests in options:
Name:
Title:
Qualifications:
Experience & expertise:
and AIX)
Nil
Chair of Audit & Risk Committee, Member of the Nomination & Remuneration
Committee, Member of the Environmental, Social & Governance Committee
(appointed 10 August 2021).
Nil
Nil
Greg Paramor AO
Non-Executive Director (appointed 19 June 2020)
FAPI, FAICD, FRICS
Greg has extensive property expertise with more than 40 years’ experience in the real
estate and fund management industry. He was the co-founder of Growth Equities
Mutual, Paladin Australia and the James Fielding Group. He was the CEO of Mirvac
Group between 2004 and 2008 before becoming the Managing Director of Folkestone
Limited, a specialist property funds management group.
Greg is currently a non-executive director of ASX-listed Charter Hall Group, a board
member of the Sydney Swans, the Chair of BackTrack Youth Works, a Trustee of The
Nature Conservancy (Australia) and a board member of the Garvan Research
Foundation.
He was awarded an Officer in the General Division (AO) of the Order of Australia in
January 2015.
Other listed company directorships: Charter Hall Group Ltd (ASX: CHC).
Former directorships (last 3 years)
Special responsibilities:
Folkestone Limited
Member of Audit & Risk Committee (appointed 14 July 2020), Chair of the
Environmental, Social & Governance Committee (appointed 10 August 2021)
5,337,500
Nil
Interests in shares:
Interests in options:
ANNUAL REPORT 2021
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COMPANY SECRETARY
Laura Fanning, B. Bus, CA, ACG (CS, CGP)
Laura is a Chartered Secretary and Chartered Accountant with more than 25 years’ financial, governance and commercial
experience. Laura is Eureka’s Chief Financial Officer and was previously the Company Secretary at National Tyre & Wheel
Limited. She has 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.
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
Russell Banham
Greg Paramor
Directors’
Meetings
Audit & Risk Committee
Meetings
Held 1
15
15
15
15
Attended
15
15
15
15
Held 1
7
7*
7
7
Attended
7
7*
7
6
Nomination &
Remuneration
Committee Meetings
Held 1
Attended
1
1
1
1
1
1
1*
1*
1
*
Number of meetings held while a director during the financial year.
Attended by invitation. All directors have a standing invitation to attend Committee meetings, even when they are a member.
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 2021. 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)
b)
c)
d)
e)
f)
g)
h)
i)
Principles of compensation of key management personnel
Details of remuneration
Non-executive director remuneration policy
Service agreements
Relationship between remuneration policy and Company performance
Remuneration consultants
Equity instruments held by key management personnel
Loans to/from key management personnel
Other transactions with key management personnel
(a) PRINCIPLES OF COMPENSATION OF KEY MANAGEMENT PERSONNEL
Compensation for 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.
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Directors’ Report
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 upon 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 achievement of profit goals as a core component of the plan design;
focusing on sustained growth in total shareholder returns, consisting of dividends and growth in share price, delivering
constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value including
initiatives aligned to the Group’s commitment to social, governance and environmental focus areas; 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 total remuneration including both fixed
and variable components.
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. His agreed remuneration comprises fixed
remuneration only. During the year, the non-executive Directors considered and resolved to pay the Executive Chairman a
discretionary bonus of $150,000 (inclusive of superannuation) in recognition and acknowledgement of his contribution to
Eureka’s growth, restructuring, capital recycling achievements and total shareholder return since his appointment as Executive
Chairman in 2018. Given the Group’s sustained improvements in performance and total shareholder returns, the non-
executive Directors consider the payment of a discretionary bonus, which Mr Boyte had no expectation of receiving or ability
to influence the payment of, to be appropriate.
For other executives, the 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;
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 include financial and non-financial KPIs and, commencing from the year ended 30 June 2021, include a
financial gateway hurdle. The percentage of fixed remuneration received as an STI will be capped and may vary
between individuals, depending on the level of performance achieved. 100% of the STI is paid as cash; and
LTI program – an ‘at risk’ component of remuneration for senior executives where 100% is awarded as equity
instruments (such as options and share rights) which are subject to 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 elements 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.
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Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Directors’ Report
Directors’ Report
Directors’ Report
Short term incentives (STIs)
Short term incentives (STIs)
Senior executives’ entitlement to an STI is based upon achievement of agreed performance objectives including:
Short term incentives (STIs)
Senior executives’ entitlement to an STI is based upon achievement of agreed performance objectives including:
Senior executives’ entitlement to an STI is based upon achievement of agreed performance objectives including:
•
Financial performance;
•
Financial performance;
•
Operational performance;
•
Financial performance;
•
Operational performance;
•
Strategic and innovative initiatives;
•
Operational performance;
•
Strategic and innovative initiatives;
•
Workplace health and safety; and
•
Strategic and innovative initiatives;
•
Workplace health and safety; and
•
Risk mitigation and management.
•
Workplace health and safety; and
•
Risk mitigation and management.
•
Risk mitigation and management.
Actual performance criteria may vary between executives, having regard to their roles and responsibilities.
Actual performance criteria may vary between executives, having regard to their roles and responsibilities.
Actual performance criteria may vary between executives, having regard to their roles and responsibilities.
The Board applies the following general principles when determining and measuring performance targets and any STI
The Board applies the following general principles when determining and measuring performance targets and any STI
incentive:
The Board applies the following general principles when determining and measuring performance targets and any STI
incentive:
incentive:
STI Pool
STI Pool
STI Pool
Financial gateway
Financial gateway
Financial gateway
Structure
Structure
Structure
Performance targets
Performance targets
Performance targets
The size of the STI pool is determined by the Board, upon advice from the Nomination &
The size of the STI pool is determined by the Board, upon advice from the Nomination &
Remuneration Committee, having regard to individual employment contracts.
The size of the STI pool is determined by the Board, upon advice from the Nomination &
Remuneration Committee, having regard to individual employment contracts.
In consultation with the Nomination & Remuneration Committee, the Board assesses the
Remuneration Committee, having regard to individual employment contracts.
In consultation with the Nomination & Remuneration Committee, the Board assesses the
Group’s financial performance and the performance of KMP against agreed performance
In consultation with the Nomination & Remuneration Committee, the Board assesses the
Group’s financial performance and the performance of KMP against agreed performance
objectives.
Group’s financial performance and the performance of KMP against agreed performance
objectives.
Payment of any STI is subject to achievement of the financial gateway.
objectives.
Payment of any STI is subject to achievement of the financial gateway.
Achievement of budgeted Underlying EBITDA1 (introduced from the year ended 30 June
Payment of any STI is subject to achievement of the financial gateway.
Achievement of budgeted Underlying EBITDA1 (introduced from the year ended 30 June
2021).
Achievement of budgeted Underlying EBITDA1 (introduced from the year ended 30 June
2021).
2021).
60% of the STI linked to the achievement of the budgeted Underlying EBITDA financial
60% of the STI linked to the achievement of the budgeted Underlying EBITDA financial
hurdle; and
60% of the STI linked to the achievement of the budgeted Underlying EBITDA financial
hurdle; and
40% of the STI linked to the achievement of non-financial performance objectives in the
hurdle; and
40% of the STI linked to the achievement of non-financial performance objectives in the
categories noted above.
40% of the STI linked to the achievement of non-financial performance objectives in the
categories noted above.
categories noted above.
For the proportion of the STI linked to financial performance, entitlement is based
For the proportion of the STI linked to financial performance, entitlement is based
on the following tiers:
For the proportion of the STI linked to financial performance, entitlement is based
on the following tiers:
on the following tiers:
Entitlement
Entitlement
Entitlement
75% of the financial portion
75% of the financial portion
75% of the financial portion
90% of the financial portion
90% of the financial portion
90% of the financial portion
100% of the financial portion
100% of the financial portion
100% of the financial portion
Financial hurdle
Financial hurdle
Financial hurdle
Achievement of budgeted Underlying
Achievement of budgeted Underlying
EBITDA from core operations
Achievement of budgeted Underlying
EBITDA from core operations
EBITDA from core operations
Budget exceeded between 5% and 15%
Budget exceeded between 5% and 15%
Budget exceeded between 5% and 15%
Budget exceeded by at least 15%
Budget exceeded by at least 15%
Budget exceeded by at least 15%
The Board retains discretion in relation to the impact that non-recurring or unusual
The Board retains discretion in relation to the impact that non-recurring or unusual
items may have on achievement of the STIs.
The Board retains discretion in relation to the impact that non-recurring or unusual
items may have on achievement of the STIs.
items may have on achievement of the STIs.
1
1
Refer to page 2 for the definition of Underlying EBITDA.
Refer to page 2 for the definition of Underlying EBITDA.
Refer to page 2 for the definition of Underlying EBITDA.
1
During the year, 83% of the total STI pool available for KMP was awarded, including 90% of the financial portion based on
During the year, 83% of the total STI pool available for KMP was awarded, including 90% of the financial portion based on
the budgeted Underlying EBITDA being exceeded by between 5% and 15%. Across the Group, 80% of the total STI pool was
During the year, 83% of the total STI pool available for KMP was awarded, including 90% of the financial portion based on
the budgeted Underlying EBITDA being exceeded by between 5% and 15%. Across the Group, 80% of the total STI pool was
awarded.
the budgeted Underlying EBITDA being exceeded by between 5% and 15%. Across the Group, 80% of the total STI pool was
awarded.
awarded.
The actual amounts received by executives, as a result of achieving the above financial hurdle and any non-financial KPIs,
The actual amounts received by executives, as a result of achieving the above financial hurdle and any non-financial KPIs,
are listed in the remuneration tables below.
The actual amounts received by executives, as a result of achieving the above financial hurdle and any non-financial KPIs,
are listed in the remuneration tables below.
are listed in the remuneration tables below.
Long term incentives (LTIs)
Long term incentives (LTIs)
Equity instruments may be granted under the Omnibus Equity Plan (OEP) which was adopted on 23 November 2017. Each
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
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
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.
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.
date, the exercise price, the vesting date, any applicable performance conditions and other specific terms.
Share rights
Share rights
During the year, no new share rights were approved for issue by the Board. During the prior year, 429,362 share rights were
Share rights
During the year, no new share rights were approved for issue by the Board. During the prior year, 429,362 share rights were
issued to the Chief Operating Officer pursuant to the OEP on the following key terms:
During the year, no new share rights were approved for issue by the Board. During the prior year, 429,362 share rights were
issued to the Chief Operating Officer pursuant to the OEP on the following key terms:
issued to the Chief Operating Officer pursuant to the OEP on the following key terms:
•
•
•
The Vesting Date of the share rights is 30 September 2022, subject to meeting the performance and service conditions;
The Vesting Date of the share rights is 30 September 2022, subject to meeting the performance and service conditions;
The Vesting Date of the share rights is 30 September 2022, subject to meeting the performance and service conditions;
ANNUAL REPORT 2021
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•
•
•
•
Performance condition – total shareholder return (TSR) compound annual growth rate (CAGR) hurdle, to be tested on
the Vesting Date:
TSR CAGR1
Less than 7% per annum
At least 7% but less than 10%
At least 10% but less than 15%
At least 15%
1 TSR CAGR is an unaudited non-IFRS measure.
% of Rights to vest
0%
50%
70% to 100% on a straight-line basis
100%
Service condition – the employee must remain employed by the Group from the Grant Date until the Last Vesting
Date;
TSR includes share price appreciation, capital returns and dividends. Share price appreciation is determined as being
the difference between the base VWAP of 28.88 cents (being the volume weighted average price of shares over the 5
trading days immediately after the release of Eureka’s results for the year ended 30 June 2019 on 31 August 2019)
and vesting VWAP (the volume weighted average price of shares over the 5 trading days immediately after the release
of Eureka’s results for the year ended 30 June 2022); and
Exercise price - $nil.
The last day on which the share rights may be exercised is 30 September 2024, at which time the rights expire and lapse.
At 30 June 2021 there were 429,362 share rights outstanding (2020: 429,362).
(b) DETAILS OF REMUNERATION
The names of persons who were key management personnel of Eureka at any time during the financial year and at the date
of this report are shown in the following table:
Name
Directors
Murray Boyte
Sue Renkin
Role
Period in role
Executive Chair
24 November 2017 – ongoing
Non-Executive Director
24 November 2017 – ongoing
Russell Banham
Non-Executive Director
21 November 2018 – ongoing
Greg Paramor
Executives
Cameron Taylor
Cameron Taylor
Laura Fanning
Tracey Campion
Non-Executive Director
19 June 2020 – ongoing
Chief Operating Officer
18 March 2019 – 30 June 2021
Chief Executive Officer
1 July 2021– ongoing
Chief Financial Officer
1 December 2020 - ongoing
Chief Financial Officer
21 January 2019 – 30 November 2020
Details of the remuneration of the Group's key management personnel for the years ended 30 June 2021 and 30 June 2020
are set out in the following tables.
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Short term
Post
employment
Salary/
fees3
$
STI/
bonus
$
Non-
monetary
$
Super-
annuation
$
Share
based
payments
$
Termi-
nation
benefits
$
Total
$
% of LTI
that was
awarded
30 June 2021
Directors
21,694
6,680
6,941
6,096
41,411
21,694
13,065
8,365
-
-
-
-
-
51,263
-
-
43,124
51,263
-
-
-
-
-
-
-
-
-
486,000
77,000
80,000
70,000
713,000
445,532
174,903
112,196
732,631
-
-
-
-
-
-
-
Murray Boyte1
314,306
150,000
Sue Renkin
Russell Banham
Greg Paramor
70,320
73,059
63,904
-
-
-
Total Directors
521,589
150,000
Executives
Cameron Taylor
296,315
76,260
Laura Fanning2
136,762
25,076
Tracey Campion2
86,142
17,689
Total Executives
519,219
119,025
Total KMP
1,040,808
269,025
-
-
-
-
-
-
-
-
-
-
Short term
30 June 2020
Directors
Salary/
fees3
$
STI/
bonus
$
Non-
monetary
$
Super-
annuation
$
84,536
Post
employment
51,263
1,445,631
-
Share
based
payments
$
Termin-
ation
benefits
$
Total
$
% of LTI
that was
awarded
Murray Boyte1
314,997
Sue Renkin
Russell Banham
Greg Paramor2
Lachlan McIntosh2
67,123
68,493
1,967
35,000
Total Directors
487,580
-
-
-
-
-
-
Executives
Cameron Taylor
309,403
71,454
Tracey Campion
217,405
21,699
Total Executives
526,808
93,153
Total KMP
1,014,388
93,153
-
-
-
-
-
-
1,436
1,436
2,872
2,872
21,003
6,377
6,507
187
-
34,074
29,729
22,579
52,308
86,382
-
-
-
-
-
-
4,775
-
4,775
4,775
-
-
-
-
-
-
-
-
-
-
336,000
73,500
75,000
2,154
35,000
521,654
416,797
263,119
679,916
1,201,570
-
-
-
-
-
100
-
1
2
3
Murray Boyte’s fixed 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.
KMP for part of the year only.
Disclosure in remuneration includes executives’ annual remuneration as per their service agreement as well as accrued leave
entitlements.
The STIs will be paid subsequent to balance date.
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Directors’ Report
The proportion of remuneration linked to performance and the fixed proportion (at maximum performance levels) are as
follows:
Directors
Murray Boyte
Sue Renkin
Russell Banham
Greg Paramor
Lachlan McIntosh
Executives
Cameron Taylor
Laura Fanning
Tracey Campion
Fixed remuneration
At Risk - STI
At Risk - LTI
2021
2020
2021
2020
2021
2020
100%
100%
100%
100%
N/A
77%
83%
83%
100%
100%
100%
100%
100%
60%
-
83%
-
-
-
-
-
-
-
-
-
-
23%
17%
17%
16%
-
17%
-
-
-
-
-
-
-
-
-
-
-
-
-
24%
-
-
The proportion of cash bonus paid/payable or forfeited:
Executives
Cameron Taylor
Laura Fanning
Tracey Campion
Cash bonus paid/payable
Cash bonus forfeited
2021
2020
2021
2020
82%
88%
83%
92%
-
54%
18%
12%
17%
8%
-
46%
(c) 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 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 table below summarises Board and Committee fees payable to non-executive directors (inclusive of superannuation):
Board fees
Chair
Non-executive director
Committee fees payable to Chair of Committees (from 1 January 2020)
Audit and Risk
Remuneration and Nomination
Annualised Board and Committee fees as at 30 June 2021
There was no increase in non-executive fees during the year.
$120,000
$70,000
$10,000
$7,000
$347,000
Directors may also be reimbursed for travelling and other expenses incurred in connection with their Company duties.
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Directors’ Report
(d) SERVICE AGREEMENTS
Directors
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. In addition, the Executive Chair has received written confirmation of additional remuneration of $18,000 per month
($216,000 per year) for the additional responsibility and time required to fulfil the executive chairman role, payable during his
time in this role.
Executives
Remuneration and other terms of employment for 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 to 30 June 2021; Chief Executive Officer from 1 July 2021
Commencement 18 March 2019
Term
Details
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.
Mr Taylor’s remuneration as Chief Operating Officer included total fixed remuneration (TFR) of $315,000,
including a base salary, superannuation and car allowance. Certain benefits such as car parking, mobile
phone expenses and use of laptop are also provided. His remuneration also included STI of up to 30% of
his base salary and long term incentives of up to 40% of his TFR in the form of share rights, as determined
by the Board from time to time. No share rights were issued during the year. Mr Taylor is responsible for
management of the Group’s operations and reports to the Executive Chairman.
Mr Taylor’s TFR was increased to $350,000 from 1 July 2021 upon his appointment as Chief Executive
Officer. He is eligible for annual STI of up to 50% of his TFR and annual LTI of up to 50% of his TFR, as
determined by the Board from time to time.
Laura Fanning - Chief Financial Officer and Company Secretary
Commencement 1 December 2020
Term
The agreement has no fixed term and may be terminated by either the Company or Ms Fanning with 2
months’ notice or without notice by the Company in the event of a material breach or misconduct by Ms
Fanning.
Ms Fanning’s remuneration includes a TFR of $260,000, including a base salary and superannuation.
Certain benefits such as car parking, mobile phone expenses and use of laptop are also provided. Her
remuneration also comprises additional STI of up to 20% of her TFR. Entitlement to LTI is at the discretion
of the Board. Ms Fanning is responsible for the accounting, finance and governance functions of the
Company and its associated companies. Ms Fanning reports to the Chief Executive Officer.
Tracey Campion - Chief Financial Officer
Commencement 21 January 2019 ending 30 November 2020
Term
The agreement had 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.
Ms Campion’s remuneration included a TFR of $220,000, including a base salary and superannuation.
Certain benefits such as car parking, mobile phone expenses and use of laptop are also provided. Her
remuneration also comprises additional STI of up to 20% of her TFR. Entitlement to LTI was at discretion
of the Board. Ms Campion was responsible for the accounting and finance functions of the Company and
its associated companies. Ms Campion reported to the Chief Operating Officer.
Details:
Details:
(e) RELATIONSHIP BETWEEN REMUNERATION POLICY AND COMPANY PERFORMANCE
The Group’s current remuneration policy provides executives with a base level of remuneration as well as ‘at-risk’ components
that are aligned with shareholder returns. The STI program is weighted towards Underlying EBITDA1 and therefore earnings
per share. The LTI program is weighted towards total shareholder returns.
The following table shows key metrics for the past 5 years of the Company. The improvements in earnings per share, share
price and total shareholder return from 2018 to 2021 demonstrate the effectiveness of the current policy.
13
ANNUAL REPORT 2021
13
2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Directors’ Report
Metric
Total revenue and other income
Underlying EBITDA1
Profit/(loss) before tax
Profit/(loss) after tax
Earnings per share (basic)
Share price at year end
Dividend paid per share
Total shareholder return
KMP remuneration
KMP remuneration
Measure
$’000
$’000
$’000
$’000
cents per share
cents per share
cents per share
% of share price
at start of year
$’000
% of total revenue
and other income
2021
29,434
10,569
8,742
6,283
2.73
61.0
1.14
91.2
2020
26,068
8,700
9,075
8,095
3.52
32.5
1.55
31.0
2019
23,394
2018
23,212
7,832
6,794
6,794
2.95
26.0
0.00
6,942
(276)
(276)
(0.12)
28.0
0.00
2017
25,427
5,931
6,538
6,538
2.84
37.0
0.00
(7.1)
(24.3)
(53.2)
1,446
1,201
868
1,445
1,042
4.9
4.6
3.7
6.2
4.1
1
Refer to page 2 for the definition of Underlying EBITDA. In prior years, EBITDA from core operations was the term used to describe
Underlying EBITDA.
(f) REMUNERATION CONSULTANTS
The Group did not engage any remuneration consultants during the year.
(g) 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.
KMP
Directors
Murray Boyte
Sue Renkin
Russell Banham
Greg Paramor
Executives
Cameron Taylor
Laura Fanning
Tracey Campion
Total
Balance
1 July 2020
Acquired
during the year
Disposed
during the year
Other changes
during the year
Balance
30 June 2021
250,000
532,920
-
-
-
-
4,700,000
637,500
-
-
-
-
-
-
4,950,000
1,170,420
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
782,920
-
-
5,337,500
-
-
-
6,120,420
ANNUAL REPORT 2021
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Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Directors’ Report
Directors’ Report
Share rights held
Share rights held
There were no share rights granted as compensation to key management personnel during the reporting period. In the prior
There were no share rights granted as compensation to key management personnel during the reporting period. In the prior
period, the following share rights were granted and a Black-Scholes methodology was used to value the share rights.
period, the following share rights were granted and a Black-Scholes methodology was used to value the share rights.
KMP
KMP
Number of share
rights granted
Number of share
during 2020
rights granted
during 2020
Grant date
Grant date
FV at grant
date per
FV at grant
share right
date per
share right
Exercise
price per
Exercise
share right
price per
share right
Value of share
rights granted
Value of share
rights granted
Expiry date
Expiry date
Cameron Taylor
Cameron Taylor
429,362
429,362
27-May-20
27-May-20
$0.28
$0.28
-
-
$120,221
$120,221
30-Sep-24
30-Sep-24
The Vesting Date of the share rights is 30 September 2022, subject to meeting the performance and service conditions.
The Vesting Date of the share rights is 30 September 2022, subject to meeting the performance and service conditions.
Options held
Options held
There were no options granted as compensation to key management personnel during the year.
There were no options granted as compensation to key management personnel during the year.
(h) LOANS TO/FROM KEY MANAGEMENT PERSONNEL
(h) LOANS TO/FROM KEY MANAGEMENT PERSONNEL
There were no loans to any director or other key management personnel at any time during the year.
There were no loans to any director or other key management personnel at any time during the year.
(i) OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
(i) OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
There were no other transactions with key management personnel at any time during the year.
There were no other transactions with key management personnel at any time during the year.
This concludes the remuneration report, which has been audited.
This concludes the remuneration report, which has been audited.
SHARES UNDER OPTION & SHARE RIGHTS
SHARES UNDER OPTION & SHARE RIGHTS
There were 429,362 share rights on issue as at the date of this report.
There were 429,362 share rights on issue as at the date of this report.
INDEMNIFICATION AND INSURANCE OF OFFICERS
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
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
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.
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
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
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.
of the nature of the liability and the amount of the premium.
INDEMNIFICATION AND INSURANCE OF AUDITORS
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
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).
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.
No payment has been made to indemnify Ernst & Young during or since the financial year.
PROCEEDINGS ON BEHALF OF THE COMPANY
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
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
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
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.
the year.
NON-AUDIT SERVICES
NON-AUDIT SERVICES
Ernst & Young did not provide any non-audit services during the current year but was engaged to advise the Group on tax
Ernst & Young did not provide any non-audit services during the current year but was engaged to advise the Group on tax
related matters during the prior year. Details of the amounts paid or payable to the auditor for non-audit services provided are
related matters during the prior year. Details of the amounts paid or payable to the auditor for non-audit services provided are
set out in Note 31.
set out in Note 31.
The Directors are satisfied that the provision of the non-audit services is compatible with the general standard of independence
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.
for auditors imposed by the Corporations Act 2001.
15
ANNUAL REPORT 2021
ANNUAL REPORT 2021
15
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2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Directors’ Report
The Directors are of the opinion that the services as disclosed in Note 31 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 it undertook the audit of the Company.
ROUNDING OF AMOUNTS
The company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument
2016/191’Class issued by the Australian Securities and Investment Commission, relating to ‘rounding-off’. The amounts
contained in the financial and directors’ report have been rounded to the nearest $1,000 (where rounding is applicable) where
noted ($’000).
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on
page 71.
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 2021
ANNUAL REPORT 2021
16
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2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2021
Note
30 June 2021
$’000
30 June 2020
$’000
Rental income
Catering income
Service and caretaking fees
Total revenue
Finance income
Other income
Total revenue and other income
Property expenses
Employee expenses
Finance costs
Marketing expenses
Depreciation & amortisation
Other expenses
Total operating expenses
Share of profit of a joint venture
Net gain/(loss) on change in fair value of:
Investment property
Non-current assets held for sale
Impairment of:
Intangible assets
Other assets
Total other items
Profit before income tax expense
Income tax expense
Profit after income tax expense
Other comprehensive income
Items that may be reclassified to profit or loss
Items that will not be reclassified to profit or loss
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
3
3
3
3
4
4
12
13
10
9
5
26
26
18,831
4,544
4,207
27,582
25
1,827
29,434
(13,687)
(3,550)
(2,626)
(68)
(587)
(2,518)
(23,036)
1,558
2,361
(525)
-
(1,050)
2,344
8,742
(2,459)
6,283
-
-
-
6,283
2.73
2.72
16,874
4,223
3,712
24,809
36
1,223
26,068
(11,705)
(3,027)
(2,508)
(95)
(591)
(1,758)
(19,684)
1,980
1,383
(53)
(80)
(539)
2,691
9,075
(980)
8,095
-
-
-
8,095
3.52
3.52
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes.
17
ANNUAL REPORT 2021
17
2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Consolidated Statement of Financial Position
AS AT 30 JUNE 2021
30 June 2021
$’000
30 June 2020
$’000
Note
Current assets
Cash and cash equivalents
Trade and other receivables
Inventory
Loans receivable
Other assets
Non-current assets held for sale
Total current assets
Non-current assets
Inventory
Loans receivable
Joint venture investment
Investment property
Property, plant and equipment
Right of use assets
Intangible assets
Other assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Provisions
Other financial liabilities
Total current liabilities
Non-current liabilities
Trade and other payables
Provisions
Other financial liabilities
Deferred tax liability
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Share based payment reserve
Accumulated losses
Total equity
22
6
7
8
9
10
7
8
12
13
14
15
16
9
17
18
19
17
18
19
5
20
20
1,890
414
-
214
1,486
2,258
6,262
-
346
6,846
139,037
504
487
3,827
1,660
152,707
2,451
316
3,778
396
750
483
8,174
1,102
353
5,955
121,443
594
722
4,177
2,685
137,031
158,969
145,205
3,238
535
669
4,442
184
83
59,941
3,439
63,647
2,125
523
752
3,400
-
73
54,884
980
55,937
68,089
59,337
90,880
85,868
95,652
56
(4,828)
90,880
94,352
5
(8,489)
85,868
The consolidated statement of financial position is to be read in conjunction with the accompanying notes.
ANNUAL REPORT 2021
18
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2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2021
Note
30 June 2021
$’000
30 June 2020
$’000
Cash flows from operating activities
Receipts from customers
Payments to suppliers & employees
Interest received
Interest paid
Net cash provided by operating activities
22(b)
Cash flows from investing activities
Payments for additions to investment property
Payments for additions to inventory
Payments for property, plant & equipment
Payments for intangible assets
Payments made to sell inventory
Payments made to sell non-current assets held for sale
Payment of residential obligation loans
Proceeds from sale of inventory
Proceeds from sale of investment properties
Proceeds from the sale of intangible assets
Proceeds from repayments of loans provided
Proceeds from sale on non-current assets held for sale
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Payment of dividends
Proceeds from share issue
Payments for share issue transactions
Principal portion of lease payments
Payments of transaction costs related to borrowings
Net cash provided by financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
22(a)
29,119
(19,040)
64
(2,295)
7,848
(15,170)
(66)
(55)
-
(344)
-
-
6,023
-
10
178
-
(9,424)
10,954
(8,250)
(1,981)
713
(54)
(210)
(157)
1,015
(561)
2,451
1,890
25,783
(15,884)
43
(2,328)
7,614
(16,585)
(407)
(17)
(12)
(462)
(27)
(99)
5,738
1,525
-
208
540
(9,598)
15,500
(10,263)
(3,565)
-
-
(209)
(88)
1,375
(609)
3,060
2,451
The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.
19
ANNUAL REPORT 2021
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2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2021
Note
Share
capital
$’000
Accumulated
losses
$’000
Share
based
payment
reserve
$’000
Total
$’000
For the year ended 30 June 2021
Balance at 1 July 2020
Profit for the year, representing total comprehensive
income for the year
94,352
-
(8,489)
6,283
5
-
85,868
6,283
Transactions with owners in their capacity as owners:
Issue of share capital
Transactions costs from share issue
Share based payments
Dividends paid
20
20
20
21
Balance at 30 June 2021
For the year ended 30 June 2020
Balance at 1 July 2019
Opening adjustment on adoption of AASB 16 Leases
Balance at 1 July 2019 (Restated)
Profit for the year, representing total comprehensive
income for the year
Transactions with owners in their capacity as owners:
Share based payments
Dividends paid
Balance at 30 June 2020
20
21
1,354
(54)
-
-
95,652
94,352
-
94,352
-
-
-
94,352
-
-
-
(2,622)
(4,828)
(12,870)
(149)
(13,019)
8,095
-
(3,565)
(8,489)
-
-
51
-
56
1,354
(54)
51
(2,622)
90,880
-
-
-
-
5
-
5
81,482
(149)
81,333
8,095
5
(3,565)
85,868
The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.
ANNUAL REPORT 2021
20
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Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
1. INTRODUCTION
The financial statements cover Eureka Group Holdings Limited and its subsidiaries (Eureka, the Group or the Consolidated
Entity) for the year ended 30 June 2021. Eureka Group Holdings Limited is a company incorporated and domiciled in
Australia. Eureka is a for-profit entity for the purposes of preparing the financial statements.
The Group’s operations and principal activities comprise ownership and property management of senior independent living
communities.
The financial report is presented in Australian dollars and all values are rounded to the nearest thousand dollars ($'000)
unless otherwise stated.
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 2021 by the Directors.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PREPARATION
The principal accounting policies adopted by the Group 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 the Group complies with International Financial Reporting Standards (IFRS) and
interpretations adopted by the International Accounting Standards Board (IASB).
New, revised and amended Accounting Standards adopted by the Group
Several amendments and interpretations apply for the first time for the year but do not have an impact on the consolidated
financial statements of the Group. The Group has not early adopted any standards, interpretations or amendments that
have been issued or which are not yet effective. This includes IFRS Interpretations Committee agenda decision
Configuration or Customisation Costs in a Cloud Computing Arrangement, which includes software-as-a-service
arrangements. The Group does not have any capitalised configuration or customisation costs.
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.
HISTORICAL COST CONVENTION
The financial statements have been prepared under the historical cost convention, except for, where applicable, financial
assets and liabilities at fair value through profit or loss, investment properties, some assets held for sale 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 2021 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.
21
ANNUAL REPORT 2021
21
2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
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.
REVENUE FROM CONTRACTS WITH CUSTOMERS
Catering income
The revenue from contracts with residents for the provision of catering services includes one performance obligation.
Revenue is recognised at a point in time when services are provided to the resident.
Service and Caretaking fees
The revenue from service and caretaking fees is recognised over time, as the customer simultaneously receives and
consumes the benefits provided by the Group.
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.
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.
ANNUAL REPORT 2021
22
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2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
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.
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 for 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 ECL 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.
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ANNUAL REPORT 2021
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Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
INVESTMENT PROPERTY
Investment property comprises land and/or buildings held to earn rental income and/or for capital appreciation. 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 are 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.
•
•
•
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.
For a transfer from investment property to intangibles, the deemed cost for subsequent accounting is the fair value
at the date of change in use. If an intangible (management rights) becomes an investment property, the Group
accounts for it in accordance with the policy stated under intangibles up to the date of change in use.
Transfers are made from investment property to non-current assets held for sale when the carrying amount will be
recovered principally through a sale transaction rather than continuing use.
The Group’s policy is 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 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.
ANNUAL REPORT 2021
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Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
Upon loss of significant influence over the joint venture, 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 or
diminishing value 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
Plant and equipment
Rate
6-33%
Method
Straight-line or
Diminishing value
Buildings
2.5%
Straight-line
INTANGIBLE ASSETS
Only intangible assets that have been purchased or paid for by the Group are recognised in the accounts.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there
is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an
intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected
useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to
modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The
amortisation expense on intangible assets with finite lives is recognised in the statement of profit or loss in the expense
category that is consistent with the function of the intangible assets.
Management rights have a finite life and are carried at cost less accumulated amortisation and accumulated impairment
losses. The management rights are amortised using the straight-line method over their estimated useful life. If the
contractual or other legal rights of the management rights can be renewed, the useful life of the intangible asset includes
the renewal period if there is evidence to support renewal by the entity without significant cost. Otherwise the management
rights are amortised over the life of the contract.
Rent rolls have a finite life and are carried at cost less accumulated amortisation and accumulated impairment losses.
Rent rolls are amortised using the straight-line method over 15 years being the estimated useful life.
Other intangible assets relate to website development which is amortised using the straight-line method over 3-10 years
being the estimated useful life.
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.
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.
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Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
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.
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.
ANNUAL REPORT 2021
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Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
FOR THE YEAR ENDED 30 JUNE 2021
FOR THE YEAR ENDED 30 JUNE 2021
FOR THE YEAR ENDED 30 JUNE 2021
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
Non-current assets (including those that are part of the disposal group) are not depreciated or amortised while they are
held for sale are presented separately from the other assets in the statement of financial position. The liabilities of a
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
Non-current assets (including those that are part of the disposal group) are not depreciated or amortised while they are
disposal group classified as held for sale are presented separately from other liabilities in the statement of financial position.
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
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.
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
disposal group classified as held for sale are presented separately from other liabilities in the statement of financial position.
TRADE AND OTHER PAYABLES
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
TRADE AND OTHER PAYABLES
which are unpaid at that date. The amounts are unsecured and are generally settled within 30-60 days.
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and
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.
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
which are unpaid at that date. The amounts are unsecured and are generally settled within 30-60 days.
BORROWINGS
BORROWINGS
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured
BORROWINGS
at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured
in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of
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
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured
loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility
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
at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised
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
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
in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of
is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services
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
loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility
and amortised over the period of the facility to which it relates.
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
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.
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 derecognised from the balance sheet when the obligation specified in the contract is discharged, cancelled
and amortised over the period of the facility to which it relates.
or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to
Borrowings are derecognised from the balance sheet when the obligation specified in the contract is discharged, cancelled
another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised
Borrowings are derecognised 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
Borrowings are derecognised from the balance sheet when the obligation specified in the contract is discharged, cancelled
in profit or loss as other income or finance costs.
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
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.
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
in profit or loss as other income or finance costs.
for at least 12 months after the reporting period.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability
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.
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.
for at least 12 months after the reporting period.
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS
Short-term Employee Benefits
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
Short-term Employee Benefits
reporting date are recognised in current liabilities and are measured as the amounts expected to be paid when the liabilities
Liabilities for wages and salaries, annual leave and long service leave expected to be settled within 12 months of the
Short-term Employee Benefits
are settled inclusive of on-costs. Sick leave is non-vesting and is expensed as paid.
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
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.
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
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 not expected to be settled within 12 months of the reporting date are
Long-term Employee Benefits
recognised in non-current liabilities, provided there is an unconditional right to defer settlement of the liability. The liability
The liabilities for annual leave and long service leave not expected to be settled within 12 months of the reporting date are
Long-term Employee Benefits
is measured as the present value of expected future payments to be made in respect of services provided by employees
The liabilities for annual leave and long service leave not expected to be settled within 12 months of the reporting date are
recognised in non-current liabilities, provided there is an unconditional right to defer settlement of the liability. The liability
The liabilities for annual leave and long service leave not expected to be settled within 12 months of the reporting date are
up to the reporting date. Consideration is given for expected future wage and salary levels, experience of employee
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
recognised in non-current liabilities, provided there is an unconditional right to defer settlement of the liability. The liability
departures and periods of service. Expected future payments are discounted using market yields as at the reporting date
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
is measured as the present value of expected future payments to be made in respect of services provided by employees
on corporate bond rates with the terms to maturity that match, as closely as possible, the estimated future cash outflows.
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
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.
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
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
Share based payments
as consideration for equity instruments (equity-settled transactions).
Employees of the Group receive remuneration in the form of share based payments, whereby employees render services
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).
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
as consideration for equity instruments (equity-settled transactions).
appropriate valuation model.
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an
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.
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 (share based
appropriate valuation model.
payment reserve), over the period in which the service and, where applicable, the performance conditions are fulfilled (the
That cost is recognised in employee benefits expense, together with a corresponding increase in equity (share based
vesting period). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting
That cost is recognised in employee benefits expense, together with a corresponding increase in equity (share based
payment reserve), over the period in which the service and, where applicable, the performance conditions are fulfilled (the
That cost is recognised in employee benefits expense, together with a corresponding increase in equity (share based
date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity
payment reserve), 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
payment reserve), over the period in which the service and, where applicable, the performance conditions are fulfilled (the
instruments that will ultimately vest. The expense or credit in the statement of profit or loss for a period represents 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
vesting period). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting
movement in cumulative expense recognised as at the beginning and end of that period.
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
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.
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.
Service and non-market performance conditions are not taken into account when determining the grant date fair value of
movement in cumulative expense recognised as at the beginning and end of that period.
awards, but the likelihood of the conditions being met is assessed as part of the Group’s best estimate of the number of
Service and non-market performance conditions are not taken into account when determining the grant date fair value of
equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value.
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
Service and non-market performance conditions are not taken into account when determining the grant date fair value of
Any other conditions attached to an award, but without an associated service requirement, are considered to be non-
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.
awards, but the likelihood of the conditions being met is assessed as part of the Group’s best estimate of the number of
vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing
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-
equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value.
of an award unless there are also service and/or performance conditions.
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
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.
27
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.
27
of an award unless there are also service and/or performance conditions.
27
27
ANNUAL REPORT 2021
ANNUAL REPORT 2021
ANNUAL REPORT 2021
ANNUAL REPORT 2021
27
2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
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.
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 use or sale, subsequent finance costs are expensed when
incurred. All other finance costs are expensed when incurred.
GOODS AND SERVICES TAX
Revenues, expenses, assets and liabilities 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
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the
right to control the use of an identified asset for a period of time in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases
of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing
the right to use the underlying assets.
i) Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is
available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses
and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease
liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any
lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term
and the estimated useful lives of the assets.
If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a
purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also
subject to impairment. Refer to the accounting policy on Impairment of non-financial assets.
ii) Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed
payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts
expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase
option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease
term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a
rate are recognised as expenses in the period in which the event or condition that triggers the payment occurs.
ANNUAL REPORT 2021
28
28
2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease
commencement date where the interest rate implicit in the lease is not readily determinable. After the commencement
date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments
made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease
term, a change in the lease payments (e.g. changes to future payments resulting from a change in an index or rate used
to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.
The Group’s lease liabilities are included in financial liabilities.
iii) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of plant and equipment (i.e. leases
that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also
applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low
value. Lease payments on short-term leases and leases of low value assets are recognised as expense on a straight-line
basis over the lease term.
Group as a lessor
Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are
classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms and is
included in revenue in the statement of profit or loss due to its operating nature. Initial direct costs incurred in negotiating
and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease
term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are
earned.
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.
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:
29
ANNUAL REPORT 2021
29
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Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
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:
•
•
•
•
Valuations undertaken by accredited external independent valuers;
Acquisition price paid for the property;
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
Capitalised income projections based upon a property’s estimated maintainable earnings and capitalisation rate.
Investment Property – Classification
The Group classifies property as investment property when it meets the following key criteria:
•
•
The property 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.
The returns from the Group’s investment property include rental income and income from provision of ancillary services,
including 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 qualitative factors, which include
both operational and legislative considerations, and quantitative factors, which includes comparing:
•
•
the value of the ancillary services to the total income generated from the property; and
the profit generated from ancillary services to the total profit generated from the property
Properties that do not meet this criteria are classified as property, plant and equipment.
Inventory
Inventory consists of property being sold as part of a capital disposal program and is valued at the lower of cost and net
realisable value.
Net realisable value is the estimated selling price of the inventory, less estimated costs of completion and the estimated
costs necessary to make the sale.
Goodwill
Goodwill is allocated to the property management cash-generating unit (CGU). 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 amount of the CGU is 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 their estimated useful life. If the contractual or other legal rights of the management
rights can be renewed, the useful life of the intangible asset includes the renewal period if there is evidence to support
renewal by the entity without significant cost. Otherwise the management rights are amortised over the life of the contract.
For strata-titled villages (where units are individually owned by third parties) where management rights are attached, the
Group generally 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. Where there is evidence to support renewal of
the management rights, the amortisation period is 40 years, similar to the life of the property the management rights are
attached to, otherwise the amortisation period is the term of the management rights agreement.
ANNUAL REPORT 2021
30
30
2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
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. Eureka considers that it has materially less
control over future contract renewals in single-owner villages than it does with the strata-titled 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.
The amortisation period and the amortisation method for management rights are reviewed at least at the end of each
reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits
embodied in the asset are considered to modify the amortisation period or method, as appropriate.
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). 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, or become unlikely to be, exercised and this asset reverts back to a receivable it will be assessed for
impairment as a loan receivable at that point in time. Refer to Note 9 for significant assumptions made in the assessment
of impairment for this asset.
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.
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 and income tax losses. These assets are only
recognised if the Group considers it probable that future taxable amounts will be available to utilise those temporary
difference assets. Judgement is required in assessing the availability of income tax losses and satisfaction by the relevant
Group entities of legislative requirements at each reporting date, including for certain years satisfaction of the “Same
Business Test” as defined in S.165-210 of the Income Tax Assessment Act 1997.
Fair value measurement hierarchy
The consolidated entity is required to classify all assets and liabilities, 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; and
Level 3: Unobservable inputs for the asset or liability.
Considerable judgement is required to determine what is significant to fair value and therefore which category the asset or
liability is placed in can be subjective.
The fair value of assets and liabilities classified as level 3 is determined by the use of valuation models. These include
discounted cash flow analysis or the use of significant unobservable inputs as disclosed in Note 24.
31
ANNUAL REPORT 2021
31
2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
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 32. The accounting policies of the parent entity are
consistent with those of the Group, as disclosed above, except for the following where in the parent entity:
•
•
Investments in subsidiaries are accounted for at cost, less any impairment; and
Investments in joint ventures are accounted for at cost, less any impairment.
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.
ANNUAL REPORT 2021
32
32
2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
3. REVENUE
Rental income
Revenue from contracts with customers
Catering – managed properties
Catering – owned properties
Total catering income
Service fees
Caretaking fees
Total service and caretaking fees
Total revenue from contracts with customers
Total revenue
Other income
Gain on sale of inventory
Gain on sale of investment property
Gain on sale of intangible assets
Insurance proceeds
Other
Total other income
The gain on sale of inventory relates to the disposal of units at Terranora, NSW
as part of the Group’s non-core capital asset disposal program and comprises
the following:
Units sold
Sale proceeds 1
Cost of sales
Write down to net realisable value
Gain on sale of inventory
Consolidated
30 June 2021
$’000
30 June 2020
$’000
18,831
16,874
1,508
3,036
4,544
3,307
900
4,207
1,544
2,679
4,223
2,822
890
3,712
8,751
7,935
27,582
24,809
731
-
10
595
491
1,827
1,031
3
-
-
189
1,223
Consolidated
30 June 2021
#
30 June 2020
#
31
27
$’000
$’000
6,023
(5,140)
(152)
731
6,386
(5,356)
-
1,030
1
Sales proceeds in the prior year comprised $0.65 million in Bartercard and the balance in cash.
33
ANNUAL REPORT 2021
33
2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
Disaggregation of revenue from contracts with customers
The Group derives revenue from the transfer of goods (catering income) and
services (service and caretaking fees) over time and at a point in time in
Australia.
Timing of revenue recognition
At a point in time
Over time
Total
4. ITEMS INCLUDED IN PROFIT
Profit before income tax expense includes the following specific items:
Finance costs
Interest and finance charges paid/payable for financial liabilities not at fair value
through profit or loss
Total finance costs
Depreciation
Plant & equipment
Buildings
Motor vehicles
Right of use assets
Total depreciation
Amortisation
Management rights
Rent rolls
Other
Total amortisation
Total depreciation and amortisation
Defined contribution superannuation expense
Consolidated
30 June 2021
$’000
30 June 2020
$’000
4,544
4,207
8,751
4,223
3,712
7,935
Consolidated
30 June 2021
$’000
30 June 2020
$’000
2,626
2,626
2,508
2,508
36
15
10
176
237
342
3
5
350
587
553
39
33
10
216
298
285
3
5
293
591
451
ANNUAL REPORT 2021
34
34
2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
5. INCOME TAX
The major components of income tax expense are as follows:
Consolidated Statement of Profit or Loss
Current income tax
Deferred income tax
Income tax expense reported in the Statement of Profit or Loss
A reconciliation of income tax expense and the profit before tax multiplied by
the applicable tax rate is as follows:
Profit before tax
Consolidated
30 June 2021
$’000
30 June 2020
$’000
-
2,459
2,459
-
980
980
Consolidated
30 June 2021
$’000
30 June 2020
$’000
8,742
9,075
Income tax calculated at 26% (2020: 30%)
2,273
2,722
Tax effect of permanent differences
Non-deductible capital items - deferred tax assets not recognised in year
Non-deductible capital items - deferred tax assets ceased to be recognised
Under provision
Recognition of net deferred tax assets not previously recognised
Tax effect of changing deferred tax balances to 25% tax rate at 30 June 2021
Income tax expense reported in the Statement of Profit or Loss
(95)
364
507
(108)
(214)
(268)
2,459
(20)
-
-
-
(1,722)
-
980
35
ANNUAL REPORT 2021
35
2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
Deferred tax balances have been stated at 25% (2020: 30%).
Recognised in the Statement of Financial Position
Deferred tax assets
Tax losses - revenue
Net (assessable) and deductible differences on sundry items
Deferred tax liabilities
Investment properties, property, plant and equipment
Net deferred tax liability
Not recognised in the Statement of Financial Position
Unrecognised deferred tax assets
Tax losses - capital
Non-deductible capital items
Net unrecognised deferred tax assets
Reconciliation of unrecognised tax balances:
Opening balance
Recognition and use of revenue tax losses
Recognition and use of capital tax losses
Movement attributable to non-deductible capital items
Adjustment to prior period balances
Tax effect of changing deferred tax balances to 25% tax rate at 30 June 2021
Total movement
Closing balance
Consolidated
30 June 2021
$’000
30 June 2020
$’000
6,734
(434)
(9,739)
(3,439)
601
1,230
1,831
1,472
-
(214)
871
(29)
(269)
359
1,831
8,665
167
(9,812)
(980)
968
504
1,472
1,828
(1,828)
-
-
1,472
-
(356)
1,472
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 because they relate to capital assets.
The benefits of the Group’s recognised and unrecognised tax losses will only be realised if:
•
the Group continues to meet the requirements of applicable tax laws to allow the losses to be carried forward and
utilised, including for certain years satisfaction of the “Same Business Test” as defined in S.165-210 of the Income
Tax Assessment Act 1997;
•
•
the Group earns taxable income in future periods; and
applicable tax laws are not changed, causing the losses to be unavailable.
ANNUAL REPORT 2021
36
36
2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
6. TRADE AND OTHER RECEIVABLES
Trade receivables
Accrued income and other
Consolidated
30 June 2021
$’000
30 June 2020
$’000
220
194
414
192
124
316
Trade receivables are non-interest bearing unless otherwise stated and are generally on 30 day terms. Expected credit
loss was considered not material at each reporting date.
7. INVENTORY
Opening balance
Additions
Disposals
Write down to net realisable value
Closing balance
Current
Non-current
Consolidated
30 June 2021
$’000
30 June 2020
$’000
4,880
66
(4,793)
(153)
-
-
-
-
9,215
463
(4,798)
-
4,880
3,778
1,102
4,880
Inventory comprises the rental units at Terranora, NSW which were sold as part of the Group’s non-core capital asset
disposal program. The costs of development at Terranora were capitalised to the inventory as incurred. Further details
are contained in Note 3.
37
ANNUAL REPORT 2021
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Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
8. LOANS RECEIVABLE
Current
Vendor finance 1
West Cabin loan 2
Non-current
Vendor finance 1
West Cabin loan 2
Consolidated
30 June 2021
$’000
30 June 2020
$’000
79
135
214
166
180
346
81
315
396
353
-
353
1
2
The Group acquired loans receivable 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 at year end of between 1.7 and 2.2 years and interest is payable on these loans at a rate of
between 5.50% to 6.25% per annum.
The West Cabin Loan is a secured loan to CCH Developments No 1 Pty Ltd (CCH) in its personal capacity and as
trustee of the CCH Developments No 1 Trust. No interest accrues on this loan.
The loan is secured by a real property mortgage over two existing cabins owned by CCH at Couran Cove, Qld and is
guaranteed by Onterran Ltd and Mr Lachlan McIntosh in his personal capacity. Mr McIntosh was a director of Eureka
until 31 December 2019, is the Executive Chairman of Onterran Ltd and a director of CCH. Recourse against CCH
in respect of the loan is limited to the two existing cabins.
Subsequent to balance date, a repayment plan for the loan has been agreed. Eureka has reserved its rights under
the loan agreement and the security.
The Directors consider that the amount owed is recoverable due to the repayment plan agreed between the parties,
the validity and enforceability of the real property mortgages held by Eureka and the personal guarantee provided by
Mr McIntosh.
9. OTHER ASSETS
Current
Prepayments and other assets 1
Bartercard 2
Capital replacement funds
Non-current
Bartercard 2
Other 3
Consolidated
30 June 2021
$’000
30 June 2020
$’000
1,116
140
230
1,486
1,660
-
1,660
450
300
-
750
1,635
1,050
2,685
ANNUAL REPORT 2021
38
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Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
1
2
3
Includes deposits for asset purchases.
Bartercard is an alternative currency and operates as a trade exchange. At 30 June 2021, the Bartercard carrying
value was $1.80 million (2020: $1.94 million) which is recorded at cost less any impairment. There was no impairment
expense during the year (2020: $0.35 million). The amount classified in current assets is based on expected utilisation
of Bartercard in the next 12 months.
A loan to CCH Developments No 1 Pty Ltd (CCH) was formalised with effect from 31 December 2016 with a face
value of $3.00 million. It is secured by a real property mortgage over land owned by CCH relating to 60 proposed
cabin sites at Couran Cove, Qld. This loan is guaranteed by Onterran Ltd. No interest accrues on this loan.
The loan was extended until 31 August 2021 during the year. Eureka has the option to extend the repayment date
to 31 August 2023.
During the year, a thorough review was undertaken by the Group of the recoverability of the loan including likely
realisation methods. This included consideration of legal advice, an independent valuation of the relevant land which
acts as security for the loan and the commercial arrangements applicable to land holdings and development at
Couran Cove. As a result of this review, the directors have assessed the fair value of the loan to be $nil (2020: $1.05
million) and an impairment charge of $1.05 million was recorded for the year (2020: $0.19 million). The Group intends
to pursue its rights for collection of the loan receivable.
Although the loan and land option give Eureka a right of first refusal to purchase the proposed cabin sites for $50,000
per site, to be paid by way of set off against the loan on settlement, the Directors no longer consider this to be the
most viable means of realising the asset.
Refer to Note 24 for fair value hierarchy disclosures.
10. NON-CURRENT ASSETS HELD FOR SALE
Current
Opening balance
Disposals
Transfers from investment property
Net loss on change in fair value
Closing balance
Consolidated
30 June 2021
$’000
30 June 2020
$’000
483
-
2,300
(525)
2,258
519
(517)
534
(53)
483
The balance at 30 June 2021 includes vacant land at Terranora for $1.83 million (2020: $nil). The net loss on change in
fair value includes $0.46 million (2020: $nil) relating to the vacant Terranora land.
Refer to Note 24 for fair value hierarchy disclosures.
39
ANNUAL REPORT 2021
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Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
11.
INVESTMENT IN SUBSIDIARIES
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 (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 Brassall Pty Ltd
Eureka Earlville Pty Ltd 1
Eureka Glenvale Pty Ltd
Eureka Group Care Pty Ltd
Eureka Hervey Bay Pty Ltd
Eureka Kingaroy Pty Ltd
Eureka Liberty Villas Pty Ltd
Eureka Living Pty Ltd
Eureka Property Pty Ltd
Eureka Whitsunday Pty Ltd
Fig Investments Pty Ltd
Rockham Two Pty Ltd
SCV Leasing Pty Ltd
SCV Manager Pty Ltd
SCV No. 1 Pty Ltd
The Trustee for Rockham Unit Trust
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
Australia
Australia
Australia
Australia
Equity Holding
30 June 2021
%
100%
30 June 2020
%
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%
100%
100%
100%
100%
1 Eureka Earlville Pty Ltd was formerly Eureka Care Communities (Mount Gambier 3) Pty Ltd
There are no significant restrictions on the Company’s ability to access or use the assets and settle the liabilities of the
Group.
ANNUAL REPORT 2021
40
40
2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
12. JOINT VENTURE INVESTMENT
The Group has a 50% interest in a joint venture (JV) comprising Affordable Living Unit Trust and Affordable Living Services
Unit Trust. The JV 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, and a reconciliation with the carrying amount of
the investment in the consolidated financial statements are set out below:
Movements in carrying amount:
Opening balance
Share of profit from JV 1
Cash distribution received
Closing balance
Consolidated
30 June 2021
$’000
30 June 2020
$’000
5,955
1,558
(667)
6,846
4,661
1,980
(686)
5,955
1
Share of profit from JV includes a net increase in the fair value of the Tasmanian village property assets. The Group’s
50% share was $0.58 million (2020: $1.09 million).
Summarised statement of financial position of Affordable Living Unit Trust:
Current assets, including cash and cash equivalents
Non-current assets, comprising investment property
Current liabilities 1
Non-current liabilities 2
Net assets
Group’s share in net assets – 50%
30 June 2021
$’000
30 June 2020
$’000
357
22,468
(333)
(8,800)
13,692
6,846
172
21,146
(523)
(8,885)
11,910
5,955
Group’s carrying amount of the investment
6,846
5,955
1
2
Current liabilities includes borrowings of $0.10 million (2020: $0.30 million), repayable within 12 months.
Non-current liabilities includes long term borrowings of $8.80 million (2020: $8.88 million).
Summarised statement of profit or loss of Affordable Living Unit Trust:
Revenue and other income
Cost of sales
Finance costs
Profit before tax
Income tax expense1
Profit for the year
Total comprehensive income for the year
Group’s share of profit for the year
30 June 2021
30 June 2020
$’000
$’000
5,751
(2,363)
(272)
3,116
-
3,116
3,116
1,558
6,177
(1,908)
(335)
3,934
-
3,934
3,934
1,967
1
Eureka and its JV partner are presently entitled to the net income of the trust for tax purposes. As a result, there is
no tax payable or expensed in the JV.
41
ANNUAL REPORT 2021
41
2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
Summarised statement of financial position of Affordable Living Services Unit Trust:
This entity has been dormant since May 2020.
Summarised statement of profit or loss of Affordable Living Services Unit Trust:
Revenue and other income
Cost of sales
Finance costs
Profit before tax
Income tax expense1
Profit for the year
Total comprehensive income for the year
Group’s share of profit for the year
30 June 2021
$’000
30 June 2020
$’000
-
-
-
-
-
-
-
-
386
(360)
-
26
-
26
26
13
1
Eureka and its JV partner are presently entitled to the net income of the trust for tax purposes. As a result, there is
no tax payable or expensed in the JV.
The joint venture had no contingent liabilities or commitments as at 30 June 2021 (2020: nil).
13. INVESTMENT PROPERTY
Consolidated
30 June 2021
$’000
30 June 2020
$’000
Investment properties at fair value
139,037
121,443
Movements in investment properties:
Balance at beginning of year
Acquisitions 1
Disposals 2
Capital expenditure
Transfer of Bartercard deposit to other assets
Transfer to non-current assets held for sale
Transfer from intangibles – management rights 3
Transfer from property, plant and equipment
Net gain on change in fair value
Balance at end of year
121,443
14,265
-
3,185
-
(2,300)
-
83
2,361
139,037
105,406
14,667
(1,516)
1,941
(714)
(534)
810
-
1,383
121,443
1
2
Includes the acquisition of villages in Cairns and Hervey Bay on 4 November 2020 and 3 individual units in the
Group’s its strata-titled village in Elizabeth Vale, South Australia. The prior period includes the acquisition of a 124-
unit rental village in Bundaberg, Qld, acquired on 28 February 2020 and 7 individual units in strata-titled villages.
During the prior year, the Group divested a property located in Bowen, Qld.
3 Management rights held in relation to villages and units that are wholly owned by the Group, for which no external
revenue stream exists and which were previously classified as intangibles, have been reclassified to investment
property and are included in the fair value of the respective properties.
The Group’s investment properties are shown individually in this note and consist of 27 rental village assets (2020: 25)
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.
ANNUAL REPORT 2021
42
42
2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
At 30 June 2021, the Group undertook a review of the fair value of all investment properties held and recorded a net
increase in fair value for the year of $2.36 million (2020: $1.38 million). This adjustment related to all assets in the asset
class and was based on inputs and assumptions disclosed in Note 24. The net change in fair value is recognised in profit
or loss in the reporting period in which the assessment is made.
The Group’s external valuation program resumed during the year, with nine properties being independently valued. These
included the four properties which were due for an independent external valuation by 30 June 2020 but which were deferred
due to the outbreak of COVID-19 and consequent visitor restrictions at the villages.
The external valuations undertaken during the year but before February 2021 noted that due to COVID-19, there was a
market uncertainty resulting in significant valuation uncertainty. As a result, the reports note that the assessed values
could change significantly and unexpectedly over a short period of time. The external valuer has confirmed that as at
30 June 2021, there was no longer a market uncertainty resulting in significant valuation uncertainty and that had those
properties been valued at 30 June 2021, such a comment would not have been included.
The directors have taken this into account in assessing the fair value of the properties at 30 June 2021 and note that the
financial impact of COVID-19 on the Group’s business has been minimal to date, there continues to be strong demand for
affordable retirement living options as evidenced by the Group’s increased occupancy levels during the current year, and
the results of independent and internal appraisals performed in the year which support key estimates of maintainable
earnings and capitalisation rates used in valuation assessments.
Refer to Note 24 for fair value hierarchy disclosures relating to investment properties.
Amounts recognised in profit or loss for investment properties:
Rental income
Catering income
Direct operating expenses generating rental and catering income
Net gain on change in fair value of investment properties
Consolidated
30 June 2021
$’000
30 June 2020
$’000
18,831
3,036
(12,268)
2,361
16,874
2,679
(9,894)
1,383
The Group has no restrictions on the realisability of its investment properties. It has contractual obligations to expand the
Wynnum village, complete the acquisition of a village in Brassall, Qld for $6.50 million and acquire two units in its strata-
titled village in Rockhampton for $0.26 million. There are no other contractual obligations to either purchase, construct or
develop investment properties or for repairs, maintenance and enhancements. Certain assets are pledged as security for
borrowings as detailed in Note 19.
43
ANNUAL REPORT 2021
43
2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
Details of investment properties are as follows:
Property
33 Mardross Court Lavington
Koinonia Village
92 Primrose Street Belgian Gardens
61 Marana Street Bilambil Heights (Terranora)
Broken Hill Village
Avenell Village on Vasey Bundaberg
3 Ovens Street Bundaberg
Cascade Gardens Cairns
Lot 51 Christie Downs Community Centre (manager’s unit)
60-66 Ishmael Rd Earlville
Elizabeth Vale Scenic Village 1
Elizabeth Vale Scenic Village 2
Rockhampton Village 1
Rockhampton Village 2
15/8 Wicks Street, New Auckland
Freshwater Villas
Lot 49 Hackham Community Centre (manager’s unit)
Lot 97 144 Main South Road Hackham
15-23 McNally St Scarness
Lismore Village
Cascade Gardens Mackay
43 Macdonnell Court Margate
344 San Mateo Avenue Mildura
Mt Gambier 2 Village
Albert Street Gardens Village
Salisbury
60 Poplar Avenue Shepparton
7 Meron Street Southport
Lot 6,8,9,20,21&22 56A Moores Pocket Road Tivoli
Galilee Lodge
Myall Place Village
40 Federation Street Wynnum
A summary of the investment properties by state is as follows:
State
Queensland
New South Wales
Victoria
South Australia
Carrying amount
30 Jun 21
Carrying amount
30-Jun-20
$’000
4,778
1,317
1,488
600
3,032
5,304
14,748
4,973
316
8,777
6,329
4,680
3,562
5,644
50
4,492
266
291
5,702
6,992
9,527
4,908
4,668
3,392
5,590
4,971
5,072
4,286
748
940
4,700
6,894
139,037
$’000
4,741
1,296
1,469
2,900
2,609
5,202
14,017
4,773
301
-
5,902
4,760
3,810
5,733
50
4,428
266
285
-
5,816
9,344
4,866
4,595
3,363
5,724
4,883
4,674
4,261
452
929
4,404
5,590
121,443
Carrying amount
30 Jun 21
Carrying amount
30-Jun-20
$’000
$’000
83,360
20,992
9,740
24,945
139,037
66,220
21,790
9,269
24,164
121,443
ANNUAL REPORT 2021
44
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2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
14. PROPERTY, PLANT & EQUIPMENT
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:
Consolidated
30 June 2021
$’000
30 June 2020
$’000
619
(249)
370
223
(131)
92
81
(39)
42
504
619
(234)
385
320
(163)
157
81
(29)
52
594
Opening balance at 1 July 2019
Additions at cost
Depreciation expense
Closing balance at 30 June 2020
Opening balance at 1 July 2020
Additions at cost
Transfer to investment property
Depreciation expense
Closing balance at 30 June 2021
Buildings
$’000
Plant &
equipment
$’000
Motor
vehicles
$’000
Total
$’000
417
-
(32)
385
385
-
-
(15)
370
178
18
(39)
157
157
54
(83)
(36)
92
64
-
(12)
52
52
-
-
(10)
42
659
18
(83)
594
594
54
(83)
(61)
504
45
ANNUAL REPORT 2021
45
2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
15. RIGHT OF USE ASSETS
Leased property
Opening balance
Modification on leases
Depreciation expense
Closing balance
Leased equipment
Opening balance
Depreciation expense
Closing balance
30 June 2021
$’000
30 June 2020
$’000
714
(59)
(173)
482
8
(3)
5
869
58
(213)
714
11
(3)
8
Total right of use assets
487
722
Income received from sub-leasing right of use assets was $0.03 million for the year (2020: $0.03 million).
16. INTANGIBLE ASSETS
Management rights – at cost
Accumulated amortisation and impairment
Net
Rent rolls – at cost
Accumulated amortisation
Net
Other intangibles – at cost
Accumulated amortisation
Net
Goodwill
Total intangible assets
Consolidated
30 June 2021
$’000
30 June 2020
$’000
3,547
(1,772)
1,775
3,547
(1,430)
2,117
140
(52)
88
25
(16)
9
140
(49)
91
25
(11)
14
1,955
1,955
3,827
4,177
The Group’s business activities include the ownership and management (through management letting rights agreements)
of seniors’ rental accommodation throughout Australia. The intangible assets were separately classified in accordance
with accounting standards following village acquisitions.
Impairment tests for goodwill
Goodwill is monitored by the Board of Directors (who are identified as the chief operating decision makers) based upon
the net profit of the villages managed by Eureka, after allowing for overhead costs attributable to respective village
management. Goodwill has been allocated to the property management CGU.
The Group tests goodwill for impairment on at least an annual basis. The recoverable amount of a CGU is determined
based on value-in-use calculations which require the use of assumptions.
The calculations use cash flow projections covering a five-year period comprising a one-year budget period and four-year
forecast period. Cash flows beyond the five-year period are extrapolated using an estimated long term growth rate.
ANNUAL REPORT 2021
46
46
2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
Key assumptions are those to which the recoverable amount of an asset or CGU is most sensitive. The following key
assumptions were used in the discounted cash flow model:
•
•
•
•
•
cash flows are forecast by management taking into account historical results and current expectations of future
performance including renewal of management agreements;
cash flows were projected over a five-year period by applying a 2% growth rate (2020: 2%);
the terminal value was calculated using a growth rate of 2% (2020: 2%);
cash flows have been discounted using a pre-tax discount rate of 15% (2020: 15%); and
cash flows assume no additional villages will be managed.
Reconciliation of movements in intangible assets:
Management
rights
$’000
Rent rolls
$’000
Goodwill
$’000
Other
intangibles
$’000
Total
$’000
Opening balance at 1 July 2019
Additions at cost
Disposals (cost)
Disposals (accumulated amortisation)
Impairment expense
Transfer to investment property
Amortisation expense
Closing balance at 30 June 2020
Opening balance at 1 July 2020
Amortisation expense
Closing balance at 30 June 2021
3,291
-
-
-
(80)
(810)
(284)
2,117
2,117
(342)
1,775
95
-
-
-
-
-
(4)
91
91
(3)
88
1,955
-
-
-
-
-
-
1,955
1,955
-
1,955
7
12
(28)
28
-
-
(5)
14
14
(5)
9
5,348
12
(28)
28
(80)
(810)
(293)
4,177
4,177
(350)
3,827
The remaining amortisation period for the management rights, on a weighted average basis, is 11 years (2020: 12 years).
17. TRADE & OTHER PAYABLES
Current
Trade creditors and accruals
Capital replacement fund liability
Non-current
Capital replacement fund liability
Consolidated
30 June 2021
$’000
30 June 2020
$’000
3,192
46
3,238
184
184
2,125
-
2,125
-
-
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
47
Consolidated
30 June 2021
$’000
30 June 2020
$’000
535
535
83
83
523
523
73
73
ANNUAL REPORT 2021
47
2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
19. OTHER FINANCIAL LIABILITIES
Current
Accrued interest
Lease liability
Insurance funding
Non-current
Bank loan - secured1
Deferred consideration liability2
Lease liability
Borrowing costs
1
Bank loan - secured
Consolidated
30 June 2021
$’000
30 June 2020
$’000
506
163
-
669
57,175
2,431
471
(136)
59,941
467
221
64
752
54,472
-
646
(234)
54,884
As at 30 June 2021, the Group has access to National Australia Bank (NAB) facilities with the following terms:
•
•
Maximum limit of $77.50 million (2020: $60.00 million). Total drawings on this facility were $57.18 million
(2020: $54.47 million). The facility expires on 31 March 2024. Interest is payable at a fixed rate of 4.77% on
$35.00 million until 31 December 2021 and at variable rates (currently 1.98%) on the remaining drawn amount,
inclusive of facility fees. A facility fee applies to any undrawn amount. No principal payments are required and
interest is paid quarterly.
$2.50 million bank guarantee facility to secure the deferred consideration payable for the acquisition of the
new village at Hervey Bay. Refer to footnote 2 below.
The NAB facilities are secured by a first priority general security over all present and future acquired property. As at
30 June 2021, the Group’s property assets, with a carrying value of $141.30 million (2020: $126.81 million), have
been pledged by the Group.
During the year, the facility terms were amended to extend the expiry date from 31 January 2022 to 31 March 2024
and to increase the facility limit from $60.00 million to $77.50 million to facilitate the acquisition of two new villages,
expansion of the Wynnum village and to provide headroom for future acquisitions. The limit will increase to $80.00
million upon settlement of the deferred consideration payable for Hervey Bay and return of the associated bank
guarantee in November 2022.
The loan 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.
2
Vendor finance arrangement relating to the acquisition of the Hervey Bay village on 4 November 2020. $2.50 million
is payable 2 years after settlement date with no interest. The balance at 30 June 2021 represents the present value
of the amount payable to the vendor. The Group has provided a $2.50 million bank guarantee to the vendor as
security, the costs of which are borne by the vendor.
ANNUAL REPORT 2021
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2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
20. SHARE CAPITAL
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.
Opening balance
Shares issued at $0.5773 under the
Dividend Reinvestment Plan
Transaction costs
Closing balance
Consolidated
30 June 2021
Number
230,037,638
2,346,779
-
232,384,417
30 June 2021
$’000
94,352
1,354
(54)
95,652
30 June 2020
Number
230,037,638
30 June 2020
$’000
94,352
-
-
-
-
230,037,638
94,352
Share buy back
The Company closed the on-market share buyback on 15 March 2021. No ordinary shares were bought back and cancelled
during the year (2020: nil).
Share based payment reserve
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 27 for further details of
these plans.
Opening balance
Share based payments expense
Closing balance
21. DIVIDENDS
Dividends on ordinary shares declared and paid:
Final dividend - 2020: 0.55 cents per share (2019: 1.0 cents per share)
Interim dividend - 2021: 0.59 cents per share (2020: 0.55 cents per share)
30 June 2021
$’000
30 June 2020
$’000
5
51
56
-
5
5
30 June 2021
$’000
30 June 2020
$’000
1,265
1,357
2,622
2,300
1,265
3,565
The 2021 interim dividend was fully underwritten. Details of shares issued under the Dividend Reinvestment Plan are
shown in Note 20. Proceeds received from the underwriter were $0.71 million.
Since 30 June 2021, the Board has declared a final dividend of 0.59 cents per share, amounting to $1.37 million payable
on 28 September 2021. The financial effect of this dividend has not been brought to account in the financial statements
for the year ended 30 June 2021 and will be recognised in subsequent financial reports.
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ANNUAL REPORT 2021
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2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
22. CASH FLOW INFORMATION
(a) Reconciliation of cash
Cash at bank and on hand
Consolidated
30 June 2021
$’000
30 June 2020
$’000
1,890
2,451
(b) Reconciliation of profit before tax to net cash flow from operating activities
Profit after income tax expense
Depreciation and amortisation
Net (gain)/loss on change in fair value of investment properties
Net (gain)/loss on change in fair value of other assets
Impairment of intangibles and other assets
Share of profit of joint venture
Distribution received from joint venture
Gain on sale of investment property
Gain on sale of inventory
Gain on sale of management rights
Share based payments expense
Non-cash purchases
(Increase)/decrease in:
- Trade and other receivables
- Other current assets
Increase/(decrease) in:
- Trade and other payables
- Provisions
- Other financial liabilities
- Deferred tax liability
Net cash provided by operating activities
(c) Non-cash investing and financing activities
Consolidated
30 June 2021
30 June 2020
$’000
$’000
6,283
587
(2,361)
525
1,050
(1,558)
667
-
(731)
(10)
51
35
(1)
(86)
916
22
-
2,459
7,848
8,095
591
(1,383)
53
619
(1,980)
686
(3)
(1,031)
-
5
38
(76)
(71)
974
168
(46)
980
7,614
During the year, the Group acquired goods and services of $0.13 million with Bartercard dollars (2020: $0.06 million).
Shares valued at $0.64 million were issued pursuant to the Dividend Reinvestment Plan in lieu of the payment of dividends.
Details of other prior year non-cash transactions are disclosed are contained in the Group’s financial report for the year
ended 30 June 2020.
ANNUAL REPORT 2021
50
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Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
23.
FINANCIAL INSTRUMENTS
Overall policy
The Board has overall responsibility for the establishment and oversight of the Group’s risk management framework. The
Board 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.
CAPITAL MANAGEMENT
When managing capital, the objective is to ensure the Group has sufficient funds available for working capital and to meet
its commitments, 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 to ensure
that there is sufficient cash flow for working capital, settling obligations when due and ensuring funding is available for
growth opportunities.
(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 cash and cash equivalents, receivables from residents and
amounts due from the seniors’ independent living communities in accordance with management agreements in place,
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 2021
$’000
30 June 2020
$’000
1,890
414
560
1,800
-
4,664
2,451
316
749
1,935
1,050
6,501
Cash and cash equivalents
Deposits of cash are only held with approved banks and financial institutions. The Group 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 counterparty or resident.
The Group has a diverse range of counterparties and residents and therefore there is no significant concentration of credit
risk with any single counterparty or group of counterparties. Exposure to credit risk is limited as the majority of residents
are supported by the government pension.
The Group has a credit policy under which each new counter party or resident is analysed individually for creditworthiness
before the Group enters into a services agreement 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 is 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. The 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 amounts past due as management believes these amounts will be received.
51
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Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
The ageing of trade receivables and other receivables at the reporting date was:
Trade and other receivables - gross amount receivable
Due 0-30 days
Past due 30-60 days
Past due 60-90 days
Past due 90 + days
Consolidated
30 June 2021
$’000
30 June 2020
$’000
362
44
2
6
414
240
-
9
67
316
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 West Cabin loan as detailed in Note 8. The vendor finance loan book consists of 7
individual loan contracts (2020: 10). The Group manages the units which are being held as security for the vendor finance
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.
Loans receivable – gross amount receivable
Current
Non-current
Consolidated
30 June 2021
$’000
30 June 2020
$’000
214
346
560
396
353
749
Bartercard
Bartercard is an alternative currency and operates as a trade exchange. Bartercard is recorded at cost less any
accumulated impairment, 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. The use of Bartercard dollars to purchase goods and services
is actively managed to reduce this exposure.
Other assets
Eureka has a $3.00 million loan receivable from CCH Developments No 1 Pty Ltd (2020: $3.00 million). It is secured by a
real property mortgage over 60 proposed cabin sites at Couran Cove. Eureka has a right of first refusal (option) to purchase
the proposed cabin sites to offset the loan. During the year, the asset has been impaired by $1.05 million (2020: $0.19
million) and its carrying value at year end is $nil (2020: $1.05 million). Refer Note 9 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 especially in relation to financing of proposed acquisitions.
The Group had unused borrowing facilities of $20.32 million (2020: $5.53 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 2021
Trade and other payables
Loans - secured 1
Other financial liabilities
Deferred payment liability
Total
Contractual
cash flows
$’000
Less than 6
months
$’000
Consolidated
6 - 12
months
$’000
1 – 2 years
$’000
More than 2
years
$’000
3,422
61,481
841
2,500
68,244
3,422
1,137
64
-
4,623
-
893
64
-
957
-
1,300
128
2,500
3,928
-
58,151
585
-
58,736
ANNUAL REPORT 2021
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Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
30 June 2020
Trade and other payables
Loans - secured 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
2,125
58,201
1,256
61,582
2,125
1,555
185
3,865
-
1,087
100
1,187
-
55,559
128
55,687
-
-
843
843
1
This amount includes estimated interest during the contractual period.
(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 bank borrowings. Borrowings issued at variable rates
expose the Group to interest rate risk. At 30 June 2021, $22.18 million of the Group’s bank loan is at variable rates while
$35.00 million is fixed (refer to Note 19).
The Group regularly reviews its interest rate exposure, taking into account potential renewals of existing finance facilities,
alternative financing, hedging options and the mix of fixed and variable interest rates.
24. FAIR VALUE MEASUREMENTS
Fair value hierarchy
Investment properties, non-current assets held for sale and other assets (Couran Cove loan including land option) are
measured at fair value, using a three level hierarchy, based upon 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.
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Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
Fair value of financial instruments (unrecognised)
The Group has a number of financial assets and financial liabilities which are required to be 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.
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
Consolidated – 2021
Assets
Other assets – loan including land option
Non-current assets held for sale
Investment property
Total assets
Consolidated – 2020
Assets
Other assets – loan including land option
Non-current assets held for sale
Investment property
Total assets
-
-
-
-
-
-
-
-
-
2,258
-
2,258
-
483
-
483
-
-
139,037
139,037
1,050
-
121,443
122,493
-
2,258
139,037
141,295
1,050
483
121,443
122,976
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 two 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 future maintainable earnings of each village into perpetuity and
applying a capitalisation rate. The capitalisation rate is based on current market evidence. Future earnings projections take
into account occupancy rates, 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 in accordance
with the Group’s accounting policy and were used as the basis for determining their related 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 2021, management has
estimated the fair values by performing internal valuations using the capitalisation method taking into account the most
recent external valuation undertaken by an independent valuer.
The fair value of Eureka’s $3.00 million loan receivable (including land option at Couran Cove) has been assessed having
regard to an independent external valuation of the secured land as at 30 June 2021, commercial considerations related to
land holdings and development at Couran Cove and legal advice as to the avenues available to the Group to realise the
asset. Refer Note 9 for further details. In the prior year, the fair value assessment was based on the net present value of
the loan over the period it was expected to be realised, using a discount rate of 30%. It has been classified as a non-
current other asset as it is not expected to be realised within 12 months.
ANNUAL REPORT 2021
54
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Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
The level 3 assets significant unobservable inputs and sensitivity are as follows:
Description
Valuation
technique
Significant
unobservable
inputs
Range
(weighted average)
Relationship of
unobservable input to fair
value
Other assets –
loan including
land option
External valuation Comparable
sales evidence
2021
N/A
Costs to realise
the loan
N/A
Net present value
(NPV)
Discount pre-tax
rate
N/A
2020
N/A
N/A
30%
The external valuation has a
direct correlation to the
loan’s value.
Costs of realisation have an
indirect correlation to the
loan’s value (i.e. the lower
they are, the greater the
value).
A change in the discount rate
would result in the following
impact on NPV. In 2020:
+5%: NPV decreases by
$147,000
- 5%: NPV increases by
$178,000
Time frame of
realisation
N/A
3 – 5 years A change in the timeframe
for realisation would result in
the following impact on NPV.
In 2020:
+1 year: NPV decreases by
$242,000
- 1 year: NPV increases by
$315,000
Investment
properties –
rental villages
Capitalisation
method 1
Capitalisation
rate
9.00%-11.00%
(9.92%) 2
8.25%-
11.38%
(10.08%) 2
Capitalisation rate has an
inverse relationship to
valuation.
Stabilised
occupancy
88%-100%
(97.2%)
87%-100%
(95.8%)
Investment
properties –
individual
village units
Direct
comparison
approach
Comparable
sales evidence
N/A
N/A
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.
1
2
Significant changes in any of the significant unobservable valuation inputs under the capitalisation method would result in a
significantly lower or higher fair value measurement.
Excludes four apartment-style complexes with a capitalisation rate range of 6.5% to 8% and a village in which National Disability
Insurance Scheme services revenue is earned with a capitalisation rate of 14%.
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 9, 10, 13 and 17.
55
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Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
25.
COMMITMENTS AND CONTINGENCIES
As at the 30 June 2021, the Group had the following commitments:
•
•
•
•
•
Bank guarantees to various landlords of $0.03 million (2020: $0.05 million);
Bank guarantee facility of $2.50 million to secure deferred consideration payable for the acquisition of the Hervey
Bay village;
Unconditional contract to acquire 2 units at its strata titled village in Rockhampton, Qld for $0.26 million;
Unconditional contract to acquire Gainsborough Lifestyle Village in Brassall, Qld for $6.50 million; and
Wynnum construction costs of $1.80 million.
The Group had no other material commitments as at 30 June 2021.
From time to time Eureka may be subject to various claims and litigation from third parties during the ordinary course of
its business. The directors have given consideration to such matters which are, or may, be subject to claims or litigation at
year end and, unless specific provisions have been made, are of the opinion that no material contingent liability for such
claims exists.
26. EARNINGS PER SHARE
Basic earnings per share is determined by dividing profit attributable to the ordinary shareholders by the weighted average
number of ordinary shares on issue during the year.
Diluted earnings per share is determined by dividing profit attributable to the ordinary shareholders by the weighted average
number of ordinary shares and dilutive potential ordinary shares on issue during the year.
Profit after income tax expense
Weighted average number of ordinary shares used in calculating basic
earnings per share
30 June 2021
$’000
30 June 2020
$’000
6,283
8,095
#’000
230,494
#’000
230,038
Effects of dilution from share rights 1
429
41
Weighted average number of ordinary shares & potential ordinary shares
used in calculating diluted earnings per share
230,923
230,079
Basic earnings per share
Diluted earnings per share
2.73 cents
2.72 cents
3.52 cents
3.52 cents
1
The share rights (refer to Note 27) are unquoted securities. Conversion to ordinary shares and vesting to executives
is subject to performance and service conditions.
There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date
and the date of authorisation of these financial statements.
ANNUAL REPORT 2021
56
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Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
27. SHARE BASED PAYMENTS
Share rights
The Company has a long term incentive plan pursuant to which share rights are granted to key management personnel,
subject to service and performance conditions.
No share rights were issued during the year. In the prior year 429,362 share rights were issued with an exercise price of
$nil. The share rights vest on 30 September 2022, subject to the satisfaction of performance and service conditions.
Share rights do not have any voting rights, rights to dividends, rights to capital and have no entitlement to participate in
new issues offered to ordinary shareholders of the Company.
The fair value of the share rights is estimated at the grant date using the Black Scholes pricing model, taking into account
the terms and conditions on which the share rights were granted.
There are no cash settlement alternatives. The Group accounts for the share rights as an equity settled plan.
Options
No options were issued during the year or outstanding at 30 June 2021.
Share based payment expense
The expense recognised during the year is shown in the following table:
Total expense arising from share based payment transactions
Movements during the year
30 June 2021
$’000
30 June 2020
$’000
51
5
The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share
rights during the year:
Share rights
30 June 2021
Number
2021 WEAP
30 June 2020
Number
2020 WAEP
Outstanding at the beginning of the year
429,362
Granted during the year
Forfeited during the year
Outstanding at the end of the year
-
-
429,362
-
-
-
-
-
429,362
-
429,362
-
-
-
-
The following table list the inputs to the model used to value the share rights issued to key management personnel in the
prior period:
Grant date
Expiry date
Share price at grant date ($)
Exercise price ($)
Fair value of right ($)
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Expected life of share rights (years)
Model used
57
2020
Share rights
27 May 2020
30 September 2024
0.315
0.00
0.28
3.5
32.15
0.26
4.35
Black Scholes
ANNUAL REPORT 2021
57
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Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
The expected volatility reflects the assumption that the historical volatility over the last 12 months will be an indication of
the expected future volatility of the Company’s share price, which may not necessarily be the actual outcome.
28. RELATED PARTY TRANSACTIONS
(a) Key management personnel compensation
Short term employee benefits
Post-employment benefits
Other employee benefits
Total
Consolidated
30 June 2021
30 June 2020
$’000
$’000
1,310
85
51
1,446
1,110
86
5
1,201
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) Sales and purchases
The following table shows the income earned, expenses incurred and balances arising from related party transactions
during the year:
Joint venture
Management fees
Sales to related parties
Amounts owed by related
parties
30 June 2021
$’000
30 June 2020
$’000
30 June 2021
$’000
30 June 2020
$’000
294
282
41
24
Amounts owed by related parties are classified as trade receivables.
All transactions were made on commercial terms and conditions and at market rates. Outstanding balances are unsecured
and are repayable in cash.
There were no transactions with parties related to a director during the year. Details of prior period transactions with former
director-related entities are contained in the Group’s financial report for the year ended 30 June 2020.
29. ULTIMATE PARENT ENTITY
The parent entity within the group is Eureka Group Holdings Limited, which is the ultimate parent entity within Australia.
ANNUAL REPORT 2021
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Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
30. OPERATING SEGMENTS
Identification of reportable operating segments and principal services
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 and 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 segment’s 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 per Note 2 and Australian
Accounting Standards.
Balances have been allocated to segments as follows:
•
•
•
Rental villages includes the investment in the joint venture;
Property management includes management rights; and
Unallocated includes Terranora inventory and the sale of units, Terranora vacant land, Couran Cove assets and
other loans receivable, Bartercard, cash, support office costs and corporate overheads. Segment liabilities include
a deferred tax asset which is netted off against deferred tax liabilities in the Group balance sheet.
Cash flows are not measured or reported by segment.
59
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Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
Rental villages
$’000
Property
management
$’000
Unallocated
$’000
Total
$’000
Consolidated - 30 June 2021
Revenue
Finance income
Other income
Total revenue and other income
Expenses
Finance costs
Total operating expenses
Net gain/(loss) on change in fair value of:
Investment property
Other assets
Share of profit of a joint venture
Impairment of intangibles and other assets
Total other items
Profit/(loss) before income tax expense
Income tax (expense)/benefit
Profit/(loss) after income tax expense
Segment assets
Segment liabilities
24,126
-
688
24,814
(12,268)
(2,575)
(14,843)
2,361
(59)
1,558
-
3,860
13,831
(3,596)
10,235
147,430
62,592
Non-cash and other significant items included in profit:
Gain on revaluation of investment property
Loss on revaluation of other assets
Share of profit of joint venture
Impairment of intangibles and other assets
Depreciation & amortisation
Amortisation of borrowing costs
Segment acquisitions:
Acquisition and subsequent expenditure of
investment property
Acquisition of property, plant and equipment
Additions to inventory
2,361
(59)
1,558
-
(39)
(266)
17,450
-
-
3,456
-
10
3,466
(2,193)
(37)
(2,230)
-
-
-
-
-
1,236
(413)
823
4,799
880
-
-
-
-
(438)
-
-
-
-
-
25
1,129
1,154
(5,949)
(14)
(5,963)
-
(466)
-
(1,050)
(1,516)
(6,325)
1,550
(4,775)
6,740
4,617
-
(466)
-
(1,050)
(110)
-
-
55
66
27,582
25
1,827
29,434
(20,410)
(2,626)
(23,036)
2,361
(525)
1,558
(1,050)
2,344
8,742
(2,459)
6,283
158,969
68,089
2,361
(525)
1,558
(1,050)
(587)
(266)
17,450
55
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Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
Consolidated - 30 June 2020
Revenue
Finance income
Other income
Rental villages
$’000
Property
management
$’000
21,426
3,383
-
50
-
-
Total revenue and other income
21,476
3,383
Expenses
Finance costs
Total operating expenses
(9,894)
(2,460)
(12,354)
(2,222)
(45)
(2,267)
Net gain/(loss) on change in fair value of:
Investment property
Other assets
Share of profit of a joint venture
Impairment of intangibles and other assets
Total other items
Profit/(loss) before income tax expense
Income tax (expense)/benefit
Profit/(loss) after income tax expense
Segment assets
Segment liabilities
1,383
(53)
1,980
-
3,310
12,432
(3,730)
8,702
129,236
60,131
Non-cash and other significant items included in profit:
Gain on revaluation of investment property
Loss on revaluation of other assets
Share of profit of joint venture
Impairment of intangibles and other assets
Depreciation & amortisation
Amortisation of borrowing costs
Segment acquisitions:
Acquisition and subsequent expenditure of
investment property
Acquisition of property, plant and equipment
Additions to inventory
1,383
(53)
1,980
-
(82)
(207)
16,608
-
-
-
-
-
(80)
(80)
1,036
(311)
725
4,977
1,393
-
-
-
(80)
(380)
-
-
-
-
Unallocated
$’000
Total
$’000
-
36
1,173
1,209
(5,060)
(3)
(5,063)
-
-
-
(539)
(539)
(4,393)
3,061
(1,332)
10,992
(2,187)
-
-
-
(539)
(129)
-
-
18
463
24,809
36
1,223
26,068
(17,176)
(2,508)
(19,684)
1,383
(53)
1,980
(619)
2,691
9,075
(980)
8,095
145,205
59,337
1,383
(53)
1,980
(619)
(591)
(207)
16,608
18
463
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Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
31.
REMUNERATION OF AUDITORS
During the year the following fees were paid or payable for services provided
by the auditor of the Company and its related practices:
Fees to Ernst & Young (Australia)
Fees for auditing the statutory financial report of the parent covering the Group
and auditing the statutory financial reports of any controlled entities
Fees for tax advice
Total auditor’s remuneration
32.
PARENT ENTITY DISCLOSURES
Information relating to Eureka Group Holdings Limited (parent entity):
Results of the parent entity
Profit for the year
Other comprehensive income
Total comprehensive income 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
Consolidated
30 June 2021
30 June 2020
$
$
200,000
-
200,000
146,100
20,900
167,000
30 June 2021
30 June 2020
$’000
$’000
12,789
-
12,789
3,466
106,216
109,682
1,262
57,252
58,514
95,652
56
(44,540)
51,168
5,303
-
5,303
1,915
93,848
95,763
895
55,218
56,113
94,353
5
(54,708)
39,650
Guarantees entered into by the parent entity
From time to time, the parent entities provides financial guarantees in relation to the debts of its subsidiaries, in the ordinary
course of business.
Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 30 June 2021. Refer to Note 25 for further details.
Contractual commitments for capital items
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2021.
ANNUAL REPORT 2021
62
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2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
33. SUBSEQUENT EVENTS
Subsequent to year end, the following significant transactions have occurred:
•
•
•
Brassall acquisition – the purchase of Gainsborough Lifestyle village (Brassall, Qld) was completed on 9 July 2021
which consists of 59 relocatable homes and surplus land. Total consideration paid was $6.50 million excluding
transaction costs. A deposit of $0.32 million is recorded in other assets – current at year end.
Terranora disposal – the Group entered into a conditional contract for the sale of the vacant land at Terranora,
NSW for total sale proceeds of $2.1 million including GST. The contract is subject to the purchaser’s due diligence
and contains a 6 month settlement period. If the contract becomes unconditional, settlement would be expected in
early 2022. Eureka continues to own the manager’s unit at the property.
Dividend – the Company declared a final dividend in respect of the year of 0.59 cents per share, payable on
28 September 2021 amounting to $1.37 million.
Other than the above mentioned items, no other matter or circumstance has arisen since 30 June 2021 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.
63
ANNUAL REPORT 2021
63
2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Directors’ Declaration
FOR THE YEAR ENDED 30 JUNE 2021
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 2021 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 2021.
On behalf of the Board
Murray Boyte
Executive Chair
Dated in Brisbane this 30th of August 2021.
ANNUAL REPORT 2021
64
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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
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
Independent Auditor's Report to the Members of Eureka Group Holdings
Report on the Audit of the Financial Report
Limited
Opinion
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
Opinion
as at 30 June 2021, the consolidated statement of profit or loss and other comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows for the year then
ended, notes to the financial statements, including a summary of significant accounting policies, and
We have audited the financial report of Eureka Group Holdings Limited (the Company) and its
the directors' declaration.
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
as at 30 June 2021, the consolidated statement of profit or loss and other comprehensive income,
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
consolidated statement of changes in equity and consolidated statement of cash flows for the year then
Act 2001, including:
ended, notes to the financial statements, including a summary of significant accounting policies, and
the directors' declaration.
a)
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
b)
a)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2021
and of its consolidated financial performance for the year ended on that date; and
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2021
and of its consolidated financial performance for the year ended on that date; and
Basis for Opinion
complying with Australian Accounting Standards and the Corporations Regulations 2001.
b)
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
Basis for Opinion
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
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
Accountants including Independence Standards (the Code) that are relevant to our audit of the financial
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
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
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
our opinion.
Accountants including Independence Standards (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
Key Audit Matters
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
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
Key Audit Matters
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.
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.
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Ernst & Young
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Fax: +61 7 3011 3100
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Independent Auditor's Report to the Members of Eureka Group Holdings
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
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
Limited
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
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
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
Report on the Audit of the Financial Report
performed to address the matters below, provide the basis for our audit opinion on the accompanying
financial report.
financial report.
Opinion
Valuation of Investment Properties
Valuation of Investment Properties
•
•
•
•
complying with Australian Accounting Standards and the Corporations Regulations 2001.
• Held inquiries of management to assess:
• Held inquiries of management to assess:
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2021
and of its consolidated financial performance for the year ended on that date; and
methodology used across the portfolio and tested the
methodology used across the portfolio and tested the
inputs and assumptions including capitalisation rates,
inputs and assumptions including capitalisation rates,
occupancy levels and maintainable earnings.
occupancy levels and maintainable earnings.
The inputs and assumptions used in valuations at
The inputs and assumptions used in valuations at
30 June 2021.
30 June 2021.
Asset specific matters that are factored in the
Asset specific matters that are factored in the
valuations such as major development activity.
valuations such as major development activity.
How our audit addressed the key audit matter
How our audit addressed the key audit matter
In conducting our audit we performed the following audit
procedures:
In conducting our audit we performed the following audit
procedures:
• Evaluated the suitability of the valuation
• Evaluated the suitability of the valuation
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
Why significant
as at 30 June 2021, the consolidated statement of profit or loss and other comprehensive income,
Why significant
consolidated statement of changes in equity and consolidated statement of cash flows for the year then
At 30 June 2021, the Group had investment
ended, notes to the financial statements, including a summary of significant accounting policies, and
At 30 June 2021, the Group had investment
properties carried at $139.0m, representing
the directors' declaration.
properties carried at $139.0m, representing
87% of total assets at that date.
87% of total assets at that date.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Investment properties are initially recognised
Act 2001, including:
Investment properties are initially recognised
at cost, including transaction costs, and
at cost, including transaction costs, and
subsequently measured at fair value. Gains or
a)
subsequently measured at fair value. Gains or
losses arising from changes in fair value are
losses arising from changes in fair value are
recognised in the statement of profit or loss
recognised in the statement of profit or loss
and other comprehensive income.
b)
and other comprehensive income.
Fair value measurement involves a high
Fair value measurement involves a high
degree of estimation and judgement, and the
Basis for Opinion
degree of estimation and judgement, and the
involvement of external valuation specialists.
involvement of external valuation specialists.
The key inputs include capitalisation rates,
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
The key inputs include capitalisation rates,
occupancy levels and maintainable earnings.
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
occupancy levels and maintainable earnings.
Report section of our report. We are independent of the Group in accordance with the auditor
Significant assumptions and judgements used
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Significant assumptions and judgements used
in the valuation of investment property are
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
in the valuation of investment property are
inherently subjective and in times of
• Assessed the qualifications, competence and
Accountants including Independence Standards (the Code) that are relevant to our audit of the financial
inherently subjective and in times of
economic uncertainty the degree of
• Assessed the qualifications, competence and
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
economic uncertainty the degree of
subjectivity higher than it might be otherwise.
subjectivity higher than it might be otherwise.
The fair value of investment property is
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
The fair value of investment property is
estimated based on conditions existing at 30
our opinion.
estimated based on conditions existing at 30
June 2021.
June 2021.
Review and assess a sample of external property
Note 2, 13 and 24 of the financial report
Review and assess a sample of external property
valuations.
Key Audit Matters
Note 2, 13 and 24 of the financial report
details the accounting policy for investment
valuations.
details the accounting policy for investment
property assets, key inputs and sensitivities
•
Assist with the assessment of capitalisation
Key audit matters are those matters that, in our professional judgment, were of most significance in our
property assets, key inputs and sensitivities
associated with reasonably possible changes
•
Assist with the assessment of capitalisation
rates adopted by management across the
audit of the financial report of the current year. These matters were addressed in the context of our
associated with reasonably possible changes
in those inputs.
rates adopted by management across the
portfolio .
audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a
in those inputs.
portfolio .
separate opinion on these matters. For each matter below, our description of how our audit addressed
Valuation of investment property is
the matter is provided in that context.
Valuation of investment property is
considered a key audit matter due to the
considered a key audit matter due to the
significance of this balance and the level of
significance of this balance and the level of
estimation and judgement involved in
estimation and judgement involved in
determining its carrying value
determining its carrying value
objectivity of the independent valuation experts used
objectivity of the independent valuation experts used
by the Group.
by the Group.
Involved our real estate valuation specialists to:
Involved our real estate valuation specialists to:
•
•
• Conducted site visits to selected assets to understand
• Conducted site visits to selected assets to understand
asset specific adjustments factored in the valuation.
asset specific adjustments factored in the valuation.
• Assessed whether the valuations appropriately
• Assessed whether the valuations appropriately
considered the impact of COVID-19.
considered the impact of COVID-19.
• Assessed appropriateness of disclosures included in
• Assessed appropriateness of disclosures included in
the financial report, particularly those in relation to
the financial report, particularly those in relation to
investment property valuation.
65
investment property valuation.
•
•
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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
Impairment Testing of Goodwill
Limited
Impairment Testing of Goodwill
Generating Units.
Generating Units.
model prepared to test goodwill impairment.
How our audit addressed the key audit matter
requirements of Australian Accounting Standards.
• Tested the mathematical accuracy of the impairment
model prepared to test goodwill impairment.
• Assessed whether the impairment model met the
• Evaluated the Group’s assessment of Cash
• Tested the mathematical accuracy of the impairment
How our audit addressed the key audit matter
In conducting our audit we performed the following audit
procedures:
In conducting our audit we performed the following audit
procedures:
• Evaluated the Group’s assessment of Cash
Why significant
Report on the Audit of the Financial Report
Why significant
As at 30 June 2021, the Group carried
$2.0m of goodwill.
Opinion
As at 30 June 2021, the Group carried
$2.0m of goodwill.
As described in Note 16, the Group tests
We have audited the financial report of Eureka Group Holdings Limited (the Company) and its
goodwill for impairment on an annual basis.
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
As described in Note 16, the Group tests
as at 30 June 2021, the consolidated statement of profit or loss and other comprehensive income,
goodwill for impairment on an annual basis.
The recoverable amount has been determined
consolidated statement of changes in equity and consolidated statement of cash flows for the year then
for goodwill based on a value in use model
ended, notes to the financial statements, including a summary of significant accounting policies, and
The recoverable amount has been determined
based on discounted forecast cash flows. This
the directors' declaration.
for goodwill based on a value in use model
model contains estimates and significant
based on discounted forecast cash flows. This
judgements and inputs regarding forecast
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
• Assessed whether the impairment model met the
model contains estimates and significant
cashflows, discount rate and growth rate.
Act 2001, including:
requirements of Australian Accounting Standards.
judgements and inputs regarding forecast
• Tested the accuracy of the Group’s historical cash
cashflows, discount rate and growth rate.
flow forecasts. We agreed the forecasts to Board
Significant assumptions and judgements used
a)
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2021
• Tested the accuracy of the Group’s historical cash
approved budgets and compared those forecasts to
in the impairment testing referred to above
and of its consolidated financial performance for the year ended on that date; and
flow forecasts. We agreed the forecasts to Board
Significant assumptions and judgements used
previously achieved results and considered any
are inherently subjective and in times of
approved budgets and compared those forecasts to
in the impairment testing referred to above
adjustments required for current trading and market
economic uncertainty the degree of
b)
previously achieved results and considered any
are inherently subjective and in times of
activities.
subjectivity is higher than it might otherwise
adjustments required for current trading and market
economic uncertainty the degree of
be. The estimate of carrying value is based on
activities.
subjectivity is higher than it might otherwise
conditions existing at 30 June 2021.
Basis for Opinion
be. The estimate of carrying value is based on
• Assessed key assumptions within the impairment
conditions existing at 30 June 2021.
Due to the significance of this balance and the
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
level of estimation and judgement involved,
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Due to the significance of this balance and the
the impairment assessment of goodwill was
Report section of our report. We are independent of the Group in accordance with the auditor
level of estimation and judgement involved,
considered a key audit matter.
independence requirements of the Corporations Act 2001 and the ethical requirements of the
the impairment assessment of goodwill was
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
June 2021 to the net assets of the Group.
considered a key audit matter.
Accountants including Independence Standards (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
model including the growth rate, forecast cash flows
and discount rate.
model including the growth rate, forecast cash flows
and discount rate.
• Compared the Group’s market capitalisation at 30
• Assessed the appropriateness of disclosures included
in the financial report, particularly those in relation to
• Assessed the appropriateness of disclosures included
goodwill impairment testing included in Note 16.
in the financial report, particularly those in relation to
goodwill impairment testing included in Note 16.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
complying with Australian Accounting Standards and the Corporations Regulations 2001.
• Compared the Group’s market capitalisation at 30
• Assessed key assumptions within the impairment
June 2021 to the net assets of the Group.
Information Other than the Financial Report and Auditor’s Report Thereon
Key Audit Matters
The directors are responsible for the other information. The other information comprises the
Information Other than the Financial Report and Auditor’s Report Thereon
information included in the Group’s Annual Report, but does not include the financial report and our
The directors are responsible for the other information. The other information comprises the
Key audit matters are those matters that, in our professional judgment, were of most significance in our
auditor’s report thereon.
information included in the Group’s Annual Report, but does not include the financial report and our
audit of the financial report of the current year. These matters were addressed in the context of our
auditor’s report thereon.
audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a
Our opinion on the financial report does not cover the other information and accordingly we do not
separate opinion on these matters. For each matter below, our description of how our audit addressed
express any form of assurance conclusion thereon, with the exception of the Remuneration Report and
Our opinion on the financial report does not cover the other information and accordingly we do not
the matter is provided in that context.
our related assurance opinion.
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
In connection with our audit of the financial report, our responsibility is to read the other information
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
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.
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111 Eagle Street
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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
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.
Report on the Audit of the Financial Report
Responsibilities of the Directors for the Financial Report
Opinion
The directors of the Company are responsible for the preparation of the financial report that gives a
We have audited the financial report of Eureka Group Holdings Limited (the Company) and its
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
and for such internal control as the directors determine is necessary to enable the preparation of the
as at 30 June 2021, the consolidated statement of profit or loss and other comprehensive income,
financial report that gives a true and fair view and is free from material misstatement, whether due to
consolidated statement of changes in equity and consolidated statement of cash flows for the year then
fraud or error.
ended, notes to the financial statements, including a summary of significant accounting policies, and
the directors' declaration.
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
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
Act 2001, including:
operations, or have no realistic alternative but to do so.
a)
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2021
and of its consolidated financial performance for the year ended on that date; and
Auditor's Responsibilities for the Audit of the Financial Report
complying with Australian Accounting Standards and the Corporations Regulations 2001.
b)
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
Basis for Opinion
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
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
if, individually or in the aggregate, they could reasonably be expected to influence the economic
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
decisions of users taken on the basis of this financial report.
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
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
judgment and maintain professional scepticism throughout the audit. We also:
Accountants including Independence Standards (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
•
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
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
our opinion.
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.
Key Audit Matters
•
Obtain an understanding of internal control relevant to the audit in order to design audit
Key audit matters are those matters that, in our professional judgment, were of most significance in our
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
audit of the financial report of the current year. These matters were addressed in the context of our
opinion on the effectiveness of the Group’s internal control.
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.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
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Fax: +61 7 3011 3100
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Report on the Audit of the Financial Report
Independent Auditor's Report to the Members of Eureka Group Holdings
Limited
•
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.
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 2021, the consolidated statement of profit or loss and other comprehensive income,
•
Evaluate the overall presentation, structure and content of the financial report, including the
consolidated statement of changes in equity and consolidated statement of cash flows for the year then
disclosures, and whether the financial report represents the underlying transactions and events
ended, notes to the financial statements, including a summary of significant accounting policies, and
in a manner that achieves fair presentation.
the directors' declaration.
Opinion
•
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
business activities within the Group to express an opinion on the financial report. We are
Act 2001, including:
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2021
and of its consolidated financial performance for the year ended on that date; and
a)
We communicate with the directors regarding, among other matters, the planned scope and timing of
complying with Australian Accounting Standards and the Corporations Regulations 2001.
b)
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
Basis for Opinion
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
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
matters that may reasonably be thought to bear on our independence, and where applicable, actions
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
taken to eliminate threats or safeguards applied.
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
From the matters communicated to the directors, we determine those matters that were of most
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
significance in the audit of the financial report of the current year and are therefore the key audit
Accountants including Independence Standards (the Code) that are relevant to our audit of the financial
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
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
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
reasonably be expected to outweigh the public interest benefits of such communication.
our opinion.
Report on the Audit of the Remuneration Report
Key Audit Matters
Opinion on the Remuneration Report
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
We have audited the Remuneration Report included in the directors' report for the year ended 30 June
audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a
2021.
separate opinion on these matters. For each matter below, our description of how our audit addressed
the matter is provided in that context.
In our opinion, the Remuneration Report of Eureka Group Holdings Limited for the year ended 30 June
2021, complies with section 300A of the Corporations Act 2001.
A member firm of Ernst & Young Global Limited
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69A member firm of Ernst & Young Global Limited
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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
Responsibilities
Report on the Audit of the Financial Report
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
Opinion
Auditing Standards.
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 2021, the consolidated statement of profit or loss and other comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows for the year then
ended, notes to the financial statements, including a summary of significant accounting policies, and
Ernst & Young
the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a)
Wade Hansen
Partner
Brisbane
b)
30 August 2021
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2021
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 including Independence Standards (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial report of the current year. These matters were addressed in the context of our
audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a
separate opinion on these matters. For each matter below, our description of how our audit addressed
the matter is provided in that context.
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Liability limited by a scheme approved under Professional Standards Legislation
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
65
70
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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
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
Auditor’s Independence Declaration to the Directors of Eureka Group
Opinion
Holdings Limited
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 2021, the consolidated statement of profit or loss and other comprehensive income,
As lead auditor for the audit of the financial report of Eureka Group Holdings Limited for the financial
consolidated statement of changes in equity and consolidated statement of cash flows for the year then
year ended 30 June 2021, I declare to the best of my knowledge and belief, there have been:
ended, notes to the financial statements, including a summary of significant accounting policies, and
the directors' declaration.
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
b) no contraventions of any applicable code of professional conduct in relation to the audit.
Act 2001, including:
a)
This declaration is in respect of Eureka Group Holdings Limited and the entities it controlled during the
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2021
financial year.
and of its consolidated financial performance for the year ended on that date; and
b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
Ernst & Young
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants including Independence Standards (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
Wade Hansen
Partner
Brisbane
30 August 2021
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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
71 A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
65
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2 0 2 1 Annual Report
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 (4th 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:
https://www.eurekagroupholdings.com.au/investors/corporate-governance/.
ANNUAL REPORT 2021
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Eureka Group Holdings Limited and controlled entities
Security Holder Information
Distribution of Securities as at 6 August 2021
Number of
Securities
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
No of
Shareholders
350
221
100
297
98
Total Security Holders
1,066
Marketable Shares
There were 314 holders of less than a marketable parcel
of 826 shares holding a total of 55,712 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 6 August 2021
NAOS Asset Management Limited
Cooper Investors Pty Limited
Tribeca Investment Partners
Charter Hall Property Securities Management Limited 1
Ethical Partners Funds Management Pty Ltd
Sunsuper Pty Ltd
Total
No of Ordinary
Shares Held
% of Issued
Share Capital
46,213,010
32,934,541
25,365,406
19,706,125
19,268,057
14,632,669
158,119,808
19.89
14.17
10.92
8.48
8.29
6.30
68.05
1
Includes One Management Investment Funds Limited
11,865,789
5.11
Twenty Largest Ordinary Shareholders as at 6 August 2021
National Nominees Limited
HSBC Custody Nominees (Australia) Limited
J P Morgan Nominees Australia Pty Limited
One Managed Investment Funds Limited
Netwealth Investments Limited
Bond Street Custodians Limited
H & G Limited
Mr Alister C Wright
HIDIV Pty Ltd
NEJA Pty Ltd
Gold Tiger Investments Pty Ltd
Citicorp Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited – A/C 2
Acadia Park Pty Ltd
EXLDATA Pty Ltd
Cobbitty Garden Centre Pty Ltd
Strategic Value Pty Ltd
EXLDATA Pty Ltd
Mr Murray Raymond Boyte & Mrs Jane Elizabeth Boyte
ACN 002 938 614 Limited
Armada Trading Pty Ltd
Total
73
No of Ordinary
Shares Held
% of Issued
Share Capital
97,537,012
38,592,495
19,576,578
13,300,000
5,337,500
4,987,505
3,195,359
1,975,000
1,898,075
1,848,743
1,648,743
1,555,188
1,554,668
1,439,563
1,207,507
1,000,000
1,000,000
841,001
782,920
750,000
747,021
41.97
16.61
8.42
5.72
2.30
2.15
1.38
0.85
0.82
0.80
0.71
0.67
0.67
0.62
0.52
0.43
0.43
0.36
0.34
0.32
0.32
200,774,878
86.40
ANNUAL REPORT 2021
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2 0 2 1 Annual Report
Eureka Group Holdings Limited and controlled entities
Corporate Directory
Registered Address & Contact Details
Suite 2D 7 Short St, Southport QLD 4215
PO Box 10819, Southport BC QLD 4215
07 5568 0205
www.eurekagroupholdings.com.au
info@eurekagroupholdings.com.au
Executive Chair
Chief Executive Officer
Chief Financial Officer & Company Secretary
General Manager - Operations
Registered Address
Postal Address
Phone number
Website
Email
Board of Directors
Murray Boyte
Russell Banham
Sue Renkin
Greg Paramor AO
Senior Management
Cameron Taylor
Laura Fanning
Tracey Campion
Solicitors
Jones Day
Riverside Centre
Level 31/123 Eagle Street
Brisbane QLD 4000
Tel: 07 3085 7000
Fax: 07 3085 7099
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
ANNUAL REPORT 2021
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2 0 2 1 Annual Report Contact Details
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