Brand Guidelines
Brand Colors
Logo Variations
Dark Cerulean
#0A5080
10, 80, 128
C:92 M:38 Y:0 K:50
White
#FFFFFF
255, 255, 255
C:0 M:0 Y:0 K:0
Chinese Bronze
#D6802A
214, 128, 42
C:0 M:40 Y:80 K:16
Android Green
#ABB83A
171, 184, 58
C:7 M:0 Y:69 K:28
Black
#000000
0,0,0
C:0 M:0 Y:0 K:100
Font Family
Roboto
Aa
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incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis
nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat.
Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat
nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui
officia deserunt mollit anim id est laborum.
Creating
Communities.
2022 Annual Report
ABCDEFGHIJKLMNOP QRSTUVWXYZabcdefghijklmnopqrst uvwxyz
Contents
2022 Annual Report
FY22 Results Overview
Executive Chairman’s Report
5-year Growth Trends
2022 Financial Report
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
ii
iv
xii
1
18
22
62
63
68
69
70
71
i
Eureka Group Holdings Annual Report FY22 Results Overview
Revenue
Profit after tax
Underlying EBITDA
$29.7m
8%
$8.2m
30%
$10.5m
$10.57m [FY21]
ii
Eureka Group Holdings Annual Report FY22 Results Overview
Underlying
EBITDA margin
35.3%
38.3% [FY21]
Earnings per share
Dividends per share
3.48c
27%
1.26c
7%
iii
Eureka Group Holdings Annual Report Executive
Chairman’s Report
Eureka has delivered growth in maintainable earnings and asset
values while enhancing the Five Pillar operating platform.
Financial Review
For the year ended 30 June 2022 (the year), Eureka Group
Holdings Limited (Eureka) reported a profit after tax of
$8.17 million. This is a 30% increase in profit after tax
compared to $6.28m for FY21.
Key operating financial metrics for the year were:
δ Underlying earnings before interest, tax and
depreciation (EBITDA) was $10.51 million, down 1%
on the prior year Underlying EBITDA of $10.57 million.
δ Net operating cash flow was $8.28 million,
up 5.5% on prior year.
δ Net tangible assets per share was 38.2 cents,
up 2% on prior year of 37.5 cents.
Profit after tax included a net gain on the change in fair
value of investment properties of $9.96 million before a loss
on the change in fair value of the Lismore, NSW property of
$7.15 million following the devastating flood in the Northern
Rivers region of New South Wales. The property revaluations
were the main contributor to the 27% increase in earnings
per share to 3.48 cents (2021: 2.73 cents).
The weighted average capitalisation rate for investment
properties was 9.43% compared with 9.92% in 2021. The
increase in fair values was primarily driven by an uplift in
future maintainable earnings, rather than the change in
capitalisation rate.
Net debt increased by $13.0 million to $68.2 million and the
gearing ratio, calculated as net debt to net debt plus equity
at 40.8% compared to 37.8% in 2021.
Total assets increased by 15% to $182.8 million. The asset
recycling program and strong operating cash flow supported
funding for acquisitions and capital expenditure during
the year.
During the year the debt facility with the National Australia
Bank remained at $77.5 million. After balance date, the
facility was increased by $3 million to $80.5 million to
accommodate the acquisition of the Eagleby village in
South-East Qld. The facility will increase by a further
$2.5 million on settlement of the deferred consideration
payable for the Hervey Bay acquisition and return of the
associated bank guarantee in November 2022.
In September 2021, the Corporate Office was relocated from
the Gold Coast to Brisbane. The transition to Brisbane was
the catalyst for a strategic decision to accelerate investment
in staff capability and skill base. Positions were upgraded
and new senior appointments were made resulting in an
impact on the Underlying EBITDA margin which at 35.3%
was lower than that for 2021 of 38.3%. The relocation and
investment in people were considered a necessary pre-
requisite to ensuring the appropriate resources were in
place to meet future business growth plans and a scaling
of the business.
iv
Eureka Group Holdings Annual Report v
Eureka Group Holdings Annual Report Portfolio Highlights
Maintained the occupancy rate at 98%.
Settled the $6.50 million acquisition of the Brassall,
Qld village comprising 59 units and land for
development of a further 47 units.
Acquisition of a 2-hectare greenfield site at Kingaroy
in the South Burnett region of Qld in October 2021.
Development approval has been obtained for 110 units.
Disposal of two Townsville, Qld villages comprising
32 units for $3.0 million.
Acquired the management and letting rights for six
villages in South-East Qld for $6.1 million, comprising
approximately 330 units under management.
Sale of vacant land at Terranora, NSW for $1.8 million
(net of GST).
Acquired a 46-unit village at Bowen, Qld for
$5.05 million with potential to acquire adjacent
land for expansion.
Completion of the 22-unit village expansion at
Wynnum, Qld in January 2022 which was fully let
from completion.
Disposal of 14 owned units in managed villages for
$1.09 million.
Acquired 55 units and the management and letting
rights at a village in Eagleby, South-East Qld for
$7.3 million subsequent to year end.
Investment Property Values ($m) at 30 June 22
2,507 Units under
management 44 Villages
QLD $104.6m
NSW $16.2m
VIC $10.9m
SA $28.0m
TAS (Joint Venture)
$23.9m
$183.6m
2,507
+ 14%
98%
9.4%
Total
Total units
Occupancy
Capitalisation rate
Eureka now has more than 2,500 owned and managed
units in its portfolio which represents a 14% increase on
FY21, net of 91 units at the Lismore village devastated
by the floods. Since FY17, Eureka has disposed of
approximately 360 units and acquired 955 units. The units
disposed of were not suitable for senior rental living or
did not meet target financial hurdles.
vi
254
861
1,392
5
14
25
Owned
Managed
Joint Venture
Owned
Managed
Joint Venture
Growth in revenue and unit numbers
3,000
$29.4m
$30.9m
2,500
$23.2m
$23.4m
$26.1m
2,000
1,500
1,000
s
r
e
b
m
u
N
t
i
n
U
500
0
2018
2019
2020
2021
2022
Owned Units
Managed Units
Joint Venture Units
Total Revenue and Other Income
Eureka Group Holdings Annual Report
Operations
Management has continued to build on the Five Pillar
Operating Platform. A recalibration of the platform
functionality now includes an Environmental, Social and
Governance (ESG) section. The implementation of a fit for
purpose ESG framework is an essential component of the
operating platform.
During the year, a program commenced to upgrade the
internal and exterior presentation of villages and this will
continue into 2023. The program is central to ensuring
consistent standards are maintained throughout the village
network and forms part of the Eureka value proposition,
enhancing day to day village life in a safe and attractive
physical environment.
A resident survey undertaken in the first half of FY22
resulted in a very high satisfaction rating above 80%. This
demonstrates that the Resident First philosophy and
deliverables under the Five Pillar Operating Platform are
meeting residents’ expectations.
Operating Platform
During the year, the reset of the village management model
continued. The new model has achieved improved connection
between village teams and residents and was inherent in the
significant cultural shift centred on an empathetic and caring
workforce in the village and support teams.
The maintaining of a high occupancy rate has been achieved
through the restructuring of the village manager role to
enable a focus on the Resident First philosophy and
community engagement. This is backed by a support team
with strong lines of communication to village managers.
This has facilitated a village manager role that focuses on
the wellbeing and independence of residents in a safe,
secure and active community.
While the risk of Covid-19 remains, we have preventative
measures in place and ongoing protocols are embedded in
our day-to-day wellbeing management to ensure the
Covid-19 risk to residents and staff is minimal.
Occupancy and
Revenue Initiatives
Team Culture
and Engagement
Safety, Risk and
Compliance
Technology
and Brand
ESG
l Implementation of
a fit for purpose
ESG framework
l Continued
investment in
support office
functions to
enhance growth
capability
l Upskilling and
training to develop
specialist skills
l Regular review of
risk management
systems
l Policies and
procedures ensure
ongoing safety and
compliance
l Periodic review of
policies and training
to maintain
awareness
l Analysis of key
processes and
system
requirements
completed
l Implementation of
enhanced
technology systems
during FY23
l Commenced
revitalising and
positioning Eureka’s
brand in the
affordable rental
retirement market
l Resident First culture
driving sustainable
occupancy and
organic revenue
growth
l Independent Voice of
the Resident survey
results confirm village
priorities:
{ supportive village
team
{ sense of security
and safety
{ activities to
enhance connection
{ food quality
l Resident value
proposition supports
national rental pricing
strategy
l Revenue growth
inflation-hedged to
Government pension
vii
Eureka Group Holdings Annual Report Environmental, Social and
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 and social
responsibilities is being developed. Eureka has in place
a well-developed governance framework.
The ESG Committee has been established to:
δ oversee the implementation of ESG programs and
measurement of outcomes; and
δ monitor emerging ESG principles to understand their
applications to Eureka and the long-term value
proposition
An ESG Charter has been adopted for the ESG issues
relevant to the company.
During the year ERIAS Group, an environmental and social
impact management consultancy was appointed to assist
Eureka in establishing an integrated ESG framework and
action plan. Workshops are under way and the first phase is
to be completed by 31 December 2022 with measurements
and outputs to be completed by 30 June 2023.
ESG targets have been introduced in the short term
incentive program for the senior leadership team.
A planned and responsible
approach to the implementation
of environmental standards and
social responsibilities is being
developed.
viii
Eureka Group Holdings Annual Report ESG Overview
Social
Resident First
One team
Social connections
Village activity programs
Community engagement
Environmental
Solar energy
Waste management and recycling
Community gardens
Governance
Ethical business practices
Risk mitigation systems
Safety and compliance
Board governance
COVID-19 response
ix
Eureka Group Holdings Annual Report
Business fundamentals and
market drivers remain strong.
Village trading momentum and
the acquisitions completed in
FY22 are providing a solid start
to the FY23 year.
Eureka has a sound financial base and is building a
sustainable business in the affordable rental retirement
segment of social infrastructure.
Eureka has identified a pipeline of acquisition and
development opportunities and has a capital management
plan to fund and underpin an earnings accretive scaling of
the business.
FY23 Priorities
Eureka will continue to build on its Resident First
philosophy with investment in key areas to enhance the
resident experience and the resident value proposition.
The establishment of the Brisbane office and investment in
employee and support services is setting the foundation for
the medium-term growth program.
Business fundamentals and market drivers remain strong.
Village trading momentum and the acquisitions completed
in FY22 are providing a solid start to the 2023 year.
The technology upgrade remains a high priority for FY23.
The systems selection process is well under way and
implementation will commence in the second half of the year.
A brand repositioning and revitalising project is underway.
The objective is to define and position Eureka as a leader
in the affordable rental retirement market.
Dividends
Eureka has paid the following unfranked dividends to
shareholders for the year ended 30 June 2022:
δ an interim dividend of 0.63 cents per share was paid
on 23 March 2022; and
δ a final dividend of 0.63 cents per share was paid on
6 October 2022.
Eureka has a Dividend Reinvestment Plan (DRP) as a capital
management initiative which was active for the above
dividends.
Again, there was a high DRP participation rate. The issue of
shares was fully underwritten by Taylor Collison Limited
stockbrokers with the support of new and existing
institutional and sophisticated investors.
x
Eureka Group Holdings Annual Report
Directors and Staff
Eureka has a 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.
Employee capability and skills have been repositioned at all
levels of the organisation. Inherent in this change has been a
major cultural shift. Cameron Taylor, Chief Executive Officer,
has done an excellent job in leading the cultural change
predicated on the Resident First philosophy characterised by
compassion, respect and trust in the village and support
office teams.
I welcome our new employees
and thank them and all staff for
their commitment and effort
during a year of significant
organisational change.
To my fellow directors, I thank you for your leadership,
support and contribution to the development of the Eureka
business model.
To our shareholders and other stakeholders, thank you for
your continued support.
Murray Boyte
Executive Chairman
xi
Eureka Group Holdings Annual Report 5-year Growth Trends
Revenue and Other Income $m
Dividends – cents per share
29.4
30.9
23.2
23.4
26.1
1.26
1.18
1.10
1.00
2018
2019
2020
2021
2022
2018
2019
2020
2021
2022
Profit Before Tax $m
Net Assets $m
10.5
9.1
8.7
6.8
99.0
90.9
85.9
81.5
74.4
-0.3
2018
2019
2020
2021
2022
2018
2019
2020
2021
2022
Underlying EBITDA $m
Operating Cash Flow $m
38.3%
35.3%
10.6
10.5
33.7%
35.1%
8.7
7.8
30.8%
6.9
7.6
7.8
8.3
4.7
4.2
2018
2019
2020
2021
2022
Underlying EBITDA
Underlying EBITDA Margin
2018
2019
2020
2021
2022
δ Reduction in margin due to essential investment in people
and resources
δ Improvement expected from late FY23 through organic
growth, acquisitions and economies of scale
xii
Eureka Group Holdings Annual Report
Brand Guidelines
Brand Colors
Logo Variations
Dark Cerulean
#0A5080
10, 80, 128
C:92 M:38 Y:0 K:50
White
#FFFFFF
255, 255, 255
C:0 M:0 Y:0 K:0
Chinese Bronze
#D6802A
214, 128, 42
C:0 M:40 Y:80 K:16
Android Green
#ABB83A
171, 184, 58
C:7 M:0 Y:69 K:28
Black
#000000
0,0,0
C:0 M:0 Y:0 K:100
Font Family
Roboto
Aa
Paragraph
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor
incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis
nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat.
Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat
nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui
officia deserunt mollit anim id est laborum.
2022
Financial
Report
xiii
ABCDEFGHIJKLMNOP QRSTUVWXYZabcdefghijklmnopqrst uvwxyzEureka Group Holdings Annual Report
Eureka Group Holdings Limited and controlled entities
Eureka Group Holdings Limited and controlled entities
Directors’ Report
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 2022 (the year).
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 2022 (the year).
DIRECTORS
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:
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
Murray Boyte
Russell Banham
Sue Renkin
Greg Paramor AO
Russell Banham
Greg Paramor AO
PRINCIPAL ACTIVITIES
PRINCIPAL ACTIVITIES
The principal activities of the Group include the provision of:
The principal activities of the Group include the provision of:
•
•
•
•
REVIEW OF OPERATIONS AND RESULTS
Accommodation and services to independent senior residents; and
Specialist property management and caretaking services for seniors’ independent living communities.
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 $10.48 million (2021: $8.74 million) and a profit after tax of $8.17
million (2021: $6.28 million). Underlying EBITDA1 was $10.51 million (2021: $10.57 million) and Underlying Profit before tax1
The Group has reported a profit before tax for the year of $10.48 million (2021: $8.74 million) and a profit after tax of $8.17
was $7.67 million (2021: $7.36 million).
million (2021: $6.28 million). Underlying EBITDA1 was $10.51 million (2021: $10.57 million) and Underlying Profit before tax1
was $7.67 million (2021: $7.36 million).
The Group’s results are underpinned by organic growth in existing villages, increased revenue and profit contribution from
acquisitions and improved maintainable earnings. These results have been achieved despite a significant flood event affecting
The Group’s results are underpinned by organic growth in existing villages, increased revenue and profit contribution from
the Lismore property during the year, as noted below.
acquisitions and improved maintainable earnings. These results have been achieved despite a significant flood event affecting
the Lismore property during the year, as noted below.
With occupancy across the portfolio having stabilised at 98%, strategies to increase village revenue, while maintaining
affordability for residents, have contributed to the organic revenue growth experienced during the year. The resulting
With occupancy across the portfolio having stabilised at 98%, strategies to increase village revenue, while maintaining
improvement in maintainable earnings combined with gradual firming of capitalisation rates have resulted in a significant net
affordability for residents, have contributed to the organic revenue growth experienced during the year. The resulting
increase during the year in the fair value of the Group’s investment properties (excluding the Lismore property) and the
improvement in maintainable earnings combined with gradual firming of capitalisation rates have resulted in a significant net
Tasmanian assets which are owned in a joint venture.
increase during the year in the fair value of the Group’s investment properties (excluding the Lismore property) and the
Tasmanian assets which are owned in a joint venture.
Revenue growth is also attributable to acquisitions during the year and ownership of the villages in Hervey Bay, Qld and
Earlville, Qld for the whole year, noting the impact of lost revenue due to the Lismore flood event. Current year acquisitions
Revenue growth is also attributable to acquisitions during the year and ownership of the villages in Hervey Bay, Qld and
comprised villages in Brassall, Qld, and Bowen, Qld as well as the management and letting rights for 6 villages in south-east
Earlville, Qld for the whole year, noting the impact of lost revenue due to the Lismore flood event. Current year acquisitions
Qld (the Oxford Crest acquisition).
comprised villages in Brassall, Qld, and Bowen, Qld as well as the management and letting rights for 6 villages in south-east
Qld (the Oxford Crest acquisition).
Occupancy has been stable during the year and was 98% at balance date (30 June 2021: 98%). Most villages are operating
at a consistent occupancy rate in excess of 98%. The Group actively manages its asset base and from time to time, certain
Occupancy has been stable during the year and was 98% at balance date (30 June 2021: 98%). Most villages are operating
assets are repositioned for the long-term benefit of the village and Group performance but may experience a temporary
at a consistent occupancy rate in excess of 98%. The Group actively manages its asset base and from time to time, certain
reduction in occupancy during this process.
assets are repositioned for the long-term benefit of the village and Group performance but may experience a temporary
reduction in occupancy during this process.
As at 30 June 2022, Eureka owned 30 villages (2021: 32), 5 of which are owned in a joint venture and has 14 villages under
management (2021: 8), representing 2,507 units at the end of the year (2021: 2,191 units). The weighted average
As at 30 June 2022, Eureka owned 30 villages (2021: 32), 5 of which are owned in a joint venture and has 14 villages under
capitalisation rate at balance date was 9.43% (2021: 9.92%).
management (2021: 8), representing 2,507 units at the end of the year (2021: 2,191 units). The weighted average
capitalisation rate at balance date was 9.43% (2021: 9.92%).
The Group is committed to growth through asset acquisition and development opportunities. During the year, the Group
established a corporate office in Brisbane, relocated several positions to Brisbane from the Gold Coast, invested in people to
The Group is committed to growth through asset acquisition and development opportunities. During the year, the Group
enhance team capability and commenced the technology improvement project. Investment in these critical areas has caused
established a corporate office in Brisbane, relocated several positions to Brisbane from the Gold Coast, invested in people to
employee expenses and overhead costs to increase compared with the prior year. This investment in people, systems and
enhance team capability and commenced the technology improvement project. Investment in these critical areas has caused
brand is a prerequisite to upscaling the business in future years.
employee expenses and overhead costs to increase compared with the prior year. This investment in people, systems and
brand is a prerequisite to upscaling the business in future years.
1 The terms EBITDA, Underlying EBITDA and Underlying Profit before tax are defined on page 2.
1 The terms EBITDA, Underlying EBITDA and Underlying Profit before tax are defined on page 2.
1
ANNUAL REPORT 2022
ANNUAL REPORT 2022
1
1
Eureka Group Holdings Annual ReportDirectors’ Report
Eureka Group Holdings Limited and controlled entities
Directors’ Report
The Group’s statutory tax rate is 25% (2021: 26%). 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 $8.28 million (2021: $7.85 million).
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 (cents)
Diluted earnings per share (cents)
Underlying EBITDA1 reconciliation
Profit after income tax expense
Income tax expense
Depreciation and amortisation
Finance costs
EBITDA1
Net (gain)/loss on change in fair value of:
Investment properties excluding Lismore, including joint venture properties
Lismore property, due to flood impact
-
-
- Non-current assets held for sale
Impairment of other assets
(Profit)/loss on sale of assets
Lismore flood event – insurance income less expenses
Transaction costs including acquisitions, disposals and asset realisations
Strategic projects including support office relocation, technology and brand
Property expenses – non-recurring3
Other
Underlying EBITDA1
Consolidated
30 June 2022
$’000
30 June 2021
$’000
10,483
8,173
3.48
3.47
8,173
2,310
737
2,106
13,326
(9,961)
7,150
(20)
-
136
(655)
9,976
40
562
(152)
87
10,513
8,742
6,283
2.73
2.72
6,283
2,459
587
2,626
11,955
(2,942)
-
525
1,050
(741)
-
9,847
271
45
279
127
10,569
Underlying Profit before tax2
7,670
7,356
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 and reversal of overprovision.
1
2
3
Lismore flood event
The inundation of the Group’s property in Lismore, NSW during a significant flood event in February 2022 has had a material
impact on the Group’s result for the year. The Group had limited insurance for flood damage for this property due to its
Lismore location. The financial impact of this event on the result for the year is set out below:
ANNUAL REPORT 2022
2
2
Eureka Group Holdings Annual ReportDirectors’ Report
Eureka Group Holdings Limited and controlled entities
Directors’ Report
Estimated forgone contribution to Underlying EBITDA1 (from March to June 2022)
Insurance proceeds received
Expenses incurred as a result of the flood
Loss on change in fair value of investment property
Net loss before tax attributable to flood
Net loss after tax attributable to flood
$’000
(300)
1,016
(361)
(7,150)
(6,795)
(5,028)
The Lismore property has not been operational since the flood occurred. Although the Directors have assessed the fair value
of the site to be $nil at balance date, opportunities to realise value from this site in the future are being considered in
conjunction with the relevant authorities.
If not for the inundation of the Lismore property, the Directors estimate that the Group’s Underlying EBITDA1 would have been
$10.81 million (2021: $10.57 million) and the profit after tax would have been $13.20 million (2021: $8.17 million) for the year.
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 2022
30 June 2021
182,768
99,033
1,837
70,075
237,187
38.2
40.8
158,969
90,880
1,890
57,175
232,384
37.5
37.8
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.
Acquisitions and asset management
During the year, the Group made the following acquisitions:
•
•
•
•
•
•
A rental village for consideration of $6.50 million in Brassall, Qld consisting of 59 relocatable homes and land for
development;
A greenfield development site in Kingaroy, Qld comprising a 2.09 hectare parcel of land for consideration of $0.74 million;
The management and letting rights and associated managers’ units for 6 villages in south-east Qld operated by Oxford
Crest for consideration of $6.10 million;
A village in Bowen, Qld comprising 46 units for consideration of $5.05 million;
Two additional units in its strata-titled village in Rockhampton, Qld for $0.26 million; and
One additional unit in its strata-title village in Orange, Qld for $0.14 million.
The Group spent $3.35 million on asset developments including completion of the 22-unit expansion at the Wynnum village,
planning for the 47-unit Brassall expansion and obtaining development approval for the 110-unit Kingaroy development. A
further $2.88 million was spent on enhancing its owned villages through capital improvements including expenditure on its
solar energy program, community room upgrades and unit refurbishments. There were no other significant acquisitions made
during the year.
There were no other significant acquisitions made during the year.
Disposals
Capital recycling is a key factor in the Group’s growth strategy. Assets will be recycled where they are non-core or cease to
meet target performance levels, risk appetite levels or efficiency metrics.
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During the year, the Group completed its disposal of two villages in Townsville, Qld comprising 32 units for total proceeds of
$3.00 million.
The Group also disposed of its 4.8 hectare parcel of vacant land at Terranora, NSW for proceeds of $2.00 million including
GST. A central facility with a carrying value of $0.6 million (30 June 2021: $0.6 million) continues to be held as investment
property and opportunities for the realisation of this asset are being considered.
During the year, the Group sold and settled 12 rental units at the Tivoli, Qld village for consideration of $0.65 million, and two
units were sold and settled for consideration of $0.44 million at the Caboolture village previously managed by the Group.
Capital management – debt & equity
Debt
During the year, the Group’s National Australia Bank (NAB) facility remained at $77.50 million which was sufficient to facilitate
the acquisitions and capital expenditure during the year as noted above. 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 $70.08 million (2021: $57.18 million). The loan expiry is 31 March 2024. Details are contained in Note 19.
Equity
Equity movements and balances for the year are as follows:
•
•
•
•
Dividends of $2.85 million (2021: $2.62 million) were paid during the year, comprising cash dividends of $2.25 million
(2021: $1.98 million) and shares issued to existing shareholders pursuant to the Dividend Reinvestment Plan (DRP)
of $0.60 million (2021: $0.64 million).
The DRP was active for all dividends paid during the year and for the interim dividend paid in the prior year. The DRP
was fully underwritten resulting in proceeds being received from the underwriter of $2.24 million (2021: $0.71 million).
The DRP resulted in 4,802,104 shares being issued (2021: 2,346,779) for proceeds of $2.84 million (2021: $1.35
million).
There were 783,145 share rights outstanding at balance date (30 June 2021: 429,362). Further details are provided in
the Remuneration Report.
DIVIDENDS
Dividends paid during the year were as follows:
Final dividend – 2021: 0.59 cents per share (2020: 0.55 cents per share)
Interim dividend – 2022: 0.63 cents per share (2021: 0.59 cents per share)
Total dividends paid
30 June 2022
$’000
30 June 2021
$’000
1,371
1,478
2,849
1,265
1,357
2,622
A final dividend for the year of 0.63 cents per share, amounting to $1.49 million, was declared at the date of signing these
financial statements and is payable on 6 October 2022. The record date is 16 September 2022. 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 2022 and will be recognised in subsequent financial reports.
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LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Eureka is committed to:
•
•
•
•
•
Implementing its social, environmental and governance framework. The Board established an Environmental, Social
& Governance (ESG) Committee during the year that is responsible for overseeing 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.
An external advisory firm has been engaged to establish an integrated ESG framework and action plan;
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 Brassall, Qld, development of the Group’s greenfield
site in Kingaroy, Qld and the transition of the village in Bowen, Qld to rental retirement living;
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:
•
•
•
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;
Interest rate risk – the Group’s borrowings are at fully variable interest rates at balance date which may have a material
impact on profitability in an environment where interest rates are changing frequently. The Group will mitigate this risk
through its capital management plan and interest rate hedging; 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.
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EVENTS SINCE THE END OF THE FINANCIAL YEAR
Subsequent to year end, the following significant transactions have occurred:
•
•
Eagleby acquisition – the Group entered into a conditional contract to purchase the management and letting rights and
55 of 72 residential units at a village in Eagleby, Qld for $7.3 million. The acquisition is conditional upon financial
approval and certain body corporate approvals and is scheduled for completion in September 2022.
Debt facility increase – the Group’s NAB loan facility limit has increased by $3.00 million to $80.50 million to fund the
Eagleby acquisition.
No other matter or circumstance has arisen since balance date that has significantly affected the group’s operations, results
or state of affairs.
ANNUAL REPORT 2022
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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 restructures, 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:
Experience & expertise:
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).
925,205
Nil
Sue Renkin
Non-Executive Director
RN, MBA, FCDA, GradDip Corp Gov, MAICD
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 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 Environmental,
Special responsibilities:
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.
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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:
Nil
Member of Audit & Risk Committee (appointed 14 July 2020), Chair of the
Environmental, Social & Governance Committee (appointed 10 August 2021)
5,388,011
Nil
Interests in shares:
Interests in options:
COMPANY SECRETARIES
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.
Geoffrey Stirton, B. Comm, CA, FAICD, FGIA (from 6 April 2022)
Geoffrey has over 30 years’ experience working with listed and unlisted companies as well as not for profits in both governance
and line management roles. He has primarily worked in financial services for a number of ASX 100 companies. He is a
Chartered Accountant and Chartered Secretary and a Fellow of both the Australian Institute of Company Directors and the
Governance Institute of Australia.
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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:
Directors’
Meetings
Audit & Risk
Committee
Meetings
Name
Murray Boyte
Sue Renkin
Russell Banham
Greg Paramor
Held 1
12
12
12
12
Attended
12
12
12
12
Held 1
5
5*
5
5
Attended
5
5*
5
5
Nomination &
Remuneration
Committee Meetings
Attended
2
2
2
2*
Held 1
2
2
2
2*
Environmental,
Social & Governance
Committee Meetings
Attended
2
2
2
2
Held 1
2
2
2
2
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 not 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. 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.
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.
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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 prior 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.
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 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.
Short term incentives (STIs)
Senior executives’ entitlement to an STI is based upon achievement of agreed performance objectives including:
•
•
•
•
•
Financial performance;
Operational performance;
Strategic and innovative initiatives;
Workplace health and safety; and
Risk mitigation and management.
Actual performance criteria may vary between executives, having regard to their roles and responsibilities.
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The Board applies the following general principles when determining and measuring performance targets and any STI. The
Board retains discretion in relation to the impact that non-recurring or unusual items may have on achievement of the STIs.
STI Pool
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
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.
Financial gateway
Achievement of budgeted Underlying EBITDA1.
Structure
Performance targets
A portion of the STI is linked to the achievement of the budgeted Underlying EBITDA
financial hurdle (2022: 55%; 2021: 60%); and
A portion of the STI is linked to the achievement of non-financial performance objectives
(2022: 45%; 2021: 40%).
For the proportion of the STI linked to financial performance, entitlement is based on a tiered
approach, with 100% of the financial portion only being paid if the budgeted Underlying
EBITDA is exceeded by a predetermined amount.
1
Refer to page 2 for the definition of Underlying EBITDA.
During the year, the financial gateway was not met so no STI were awarded to KMP. However, the Board resolved to award
small discretionary bonuses to the executives.
The actual amounts received by executives are listed in the remuneration tables below.
Long term incentives (LTIs)
Equity instruments may be granted under the Omnibus Equity Plan (OEP) which was adopted on 23 November 2017. Each
equity instrument entitles the participant to subscribe for one ordinary share in the Company. The specific terms of a grant
are set out in an offer from the Company to the executive which contains details of the application price (if any), the expiry
date, the exercise price, the vesting date, any applicable performance conditions and other specific terms.
Share rights
During the year, 353,783 new share rights were approved for issue by the Board - 226,830 were issued to the Chief Executive
Officer and 126,953 were issued to the Chief Financial Officer pursuant to the OEP on the following key terms:
•
•
•
•
•
The Vesting Date of the share rights is 30 September 2024, subject to meeting the performance and service conditions;
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 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 61.72 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 2021 on 30 August 2021)
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 2024); and
Exercise price - $nil.
The last day on which the share rights may be exercised is 30 September 2026, at which time the rights expire and lapse.
At 30 June 2022 there were 783,145 share rights outstanding (2021: 429,362).
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(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
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
Details of the remuneration of the Group's key management personnel for the years ended 30 June 2022 and 30 June 2021
are set out in the following tables.
Short term
Post
employment
Salary/
fees3
$
STI/
bonus
$
Non-
monetary
$
Super-
annuation
$
Share
based
payments
$
Termi-
nation
benefits
$
30 June 2022
Directors
Murray Boyte1
321,188
Sue Renkin
Russell Banham
Greg Paramor
76,364
79,091
76,364
Total Directors
553,007
Executives
-
-
-
-
-
Cameron Taylor
326,432
30,000
Laura Fanning
237,619
20,000
Total Executives
564,051
50,000
Total KMP
1,117,058
50,000
-
-
-
-
-
-
-
-
-
23,568
7,636
7,909
7,636
46,749
23,568
23,568
47,136
-
-
-
-
-
56,508
2,935
59,443
93,885
59,443
-
-
-
-
-
-
-
-
-
Total
$
344,756
84,000
87,000
84,000
599,756
436,508
284,122
720,630
1,320,386
% of TFR
that was
awarded
as LTI
-
-
-
-
-
40
30
-
-
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Short term
Post
employment
Salary/
fees3
$
STI/
bonus
$
Non-
monetary
$
Super-
annuation
$
Share
based
payments
$
Termin-
ation
benefits
$
30 June 2021
Directors
Murray Boyte
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
Laura Fanning 2
296,315
76,260
136,762
25,076
Tracey Campion 2
86,142
17,689
Total Executives
519,219
119,025
Total KMP
1,040,808
269,025
-
-
-
-
-
-
-
-
-
-
21,694
6,680
6,941
6,096
41,411
21,694
13,065
8,365
-
-
-
-
-
51,263
-
-
43,124
51,263
-
-
-
-
-
-
-
-
-
% of TFR
that was
awarded
as LTI
-
-
-
-
-
-
-
-
Total
$
486,000
77,000
80,000
70,000
713,000
445,532
174,903
112,196
732,631
84,536
51,263
1,445,631
-
-
1
2
3
Murray Boyte’s fixed remuneration includes his chairman’s fee of $120,548 per annum (2021: $120,000) and an additional $224,208
per annum for the period he is Executive Chair (2021: $216,000).
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/bonuses are paid subsequent to balance date.
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
Executives
Cameron Taylor
Laura Fanning
Fixed remuneration
At Risk - STI
At Risk - LTI
2022
2021
2022
2021
2022
2021
100%
100%
100%
100%
100%
100%
100%
100%
-
-
-
-
-
-
-
-
-
-
-
-
50%
83%
77%
83%
25%
17%
23%
17%
25%
-
-
-
-
-
-
-
The proportion of cash STI paid/payable or forfeited:
Executives
Cameron Taylor
Laura Fanning
Cash STI paid/payable
Cash STI forfeited
2022
2021
2022
2021
-%
-%
82%
88%
100%
100%
18%
12%
No STIs were paid in FY22. However the Board resolved to award small discretionary bonuses.
13
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Directors’ Report
(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 is $600,000 in aggregate (2021: $450,000) 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
Audit and Risk
Remuneration and Nomination
Environmental, Social and Governance
2022
$
120,548
75,000
12,000
9,000
9,000
2021
$
120,000
70,000
10,000
7,000
-
Annualised Board and Committee fees
375,548
347,000
Directors may also be reimbursed for travelling and other expenses incurred in connection with their Company duties.
(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 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 1 July 2021
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 Executive Officer included total fixed remuneration (TFR) of $350,000,
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 50% of
his base salary and long term incentives of up to 50% of his TFR in the form of share rights, as determined
by the Board from time to time. During the year 226,830 share rights were issued to Mr Taylor. Mr Taylor
is responsible for management of the Group’s operations and reports to the Executive Chairman.
Laura Fanning - Chief Financial Officer and Company Secretary
Commencement 1 December 2020
Term
Details:
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 $261,187, 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. During the year, 126,953 share rights were issued to Ms Fanning. Ms Fanning is responsible
for the accounting and finance functions of the Company and its associated companies. Ms Fanning
reports to the Chief Executive Officer.
ANNUAL REPORT 2022
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Directors’ Report
(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 over this period demonstrate the effectiveness of the current policy.
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
2022
30,882
10,513
10,483
8,173
3.48
61.0
1.22
2.0
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
7,832
6,794
6,794
2.95
26.0
0.00
2018
23,212
6,942
(276)
(276)
(0.12)
28.0
0.00
(7.1)
(24.3)
1,320
1,446
1,201
868
1,445
4.3
4.9
4.6
3.7
6.2
1
Refer to page 2 for the definition of Underlying EBITDA. Prior to 2021, EBITDA from core operations was the term used to describe
Underlying EBITDA.
(f) REMUNERATION CONSULTANTS
The Group utilised the services of remuneration consultants (Egan Associates Pty Ltd) during the year, at a total cost of $9,009
(2021: $nil). The services were in relation to advice and recommendation on remuneration of non-executive directors.
(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
Total
Balance
1 July 2021
Acquired
during the year
Disposed
during the year
Other changes
during the year
Balance
30 June 2022
782,920
142,285
-
-
-
-
5,337,500
50,511
-
-
-
-
6,120,420
192,796
-
-
-
-
-
-
-
-
-
-
-
-
-
-
925,205
-
-
5,388,011
-
-
6,313,216
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Eureka Group Holdings Limited and controlled entities
Directors’ Report
Share rights held
The number of share rights held during the financial year by each director and other key management personnel are set out
below. No share rights were issued in the prior year.
KMP
Directors
Murray Boyte
Sue Renkin
Russell Banham
Greg Paramor
Executives
Cameron Taylor
Laura Fanning
Total
Balance
1 July 2021
Issued
during the year
Vested during
the year
Balance
30 June 2022
-
-
-
-
-
-
-
-
429,362
-
429,362
226,830
126,953
353,783
-
-
-
-
-
-
-
-
-
-
-
656,192
126,953
783,145
There were 353,783 new share rights granted as compensation to key management personnel during the year. The table
below discloses details of all share rights held during the year.
KMP
Number of share
rights granted
during 2022
Grant date
FV at grant
date per
share right
Exercise
price per
share right
Value of share
rights granted
$
Expiry date
Cameron Taylor
Laura Fanning
Cameron Taylor
226,830
126,953
429,362
4-May-22
4-May-22
27-May-20
0.357
0.357
0.280
-
-
-
80,978
45,322
120,221
30-Sep-26
30-Sep-26
30-Sep-24
For details on the valuation of the share rights, refer to Note 27.
Options held
There were no options granted as compensation to key management personnel during the year.
(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.
(i) OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
There were no other transactions with key management personnel at any time during the year.
This concludes the remuneration report, which has been audited.
SHARES UNDER OPTION & SHARE RIGHTS
There were 783,145 share rights on issue as at the date of this report.
INDEMNIFICATION AND INSURANCE OF OFFICERS
During or since the end of the financial year, the Company has indemnified the directors and executives of the Company for
costs incurred, in their capacity as a director or executive, for which they may be held personally liable, except where there is
a lack of good faith.
During the financial year, the Group paid a premium in respect of a contract to insure the directors and executives of the
Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure
of the nature of the liability and the amount of the premium.
ANNUAL REPORT 2022
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Eureka Group Holdings Annual ReportDirectors’ Report
Eureka Group Holdings Limited and controlled entities
Directors’ Report
INDEMNIFICATION AND INSURANCE OF AUDITORS
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young Australia, as part of the
terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount).
No payment has been made to indemnify Ernst & Young during or since the financial year.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the Company or intervene in any proceedings to which the Company is a party for the purposes of taking responsibility on
behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during
the year.
NON-AUDIT SERVICES
Ernst & Young did not provide any non-audit services during the current or prior years.
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 68.
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 2022
17
ANNUAL REPORT 2022
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Eureka Group Holdings Annual ReportDirectors’ Report
Eureka Group Holdings Limited and controlled entities
Consolidated Statement of Profit or Loss and Other
Consolidated Statement of Profit or
Comprehensive Income
Loss and Other Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2022
FOR THE YEAR ENDED 30 JUNE 2022
Note
30 June 2022
$’000
30 June 2021
$’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:
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
11
12
9
8
5
26
26
20,395
4,842
4,512
29,749
21
1,112
30,882
(14,558)
(4,497)
(2,106)
(119)
(737)
(2,193)
(24,210)
1,500
2,291
20
-
3,811
10,483
(2,310)
8,173
-
-
-
8,173
3.48
3.47
18,831
4,544
4,207
27,582
25
1,827
29,434
(13,687)
(3,867)
(2,626)
(68)
(587)
(2,201)
(23,036)
1,558
2,361
(525)
(1,050)
2,344
8,742
(2,459)
6,283
-
-
-
6,283
2.73
2.72
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes.
ANNUAL REPORT 2022
18
18
Eureka Group Holdings Annual Report
Eureka Group Holdings Limited and controlled entities
Consolidated Statement
of Financial Position
Consolidated Statement of Financial Position
AS AT 30 JUNE 2022
AS AT 30 JUNE 2022
Current assets
Cash and cash equivalents
Trade and other receivables
Loans receivable
Other assets
Non-current assets held for sale
Total current assets
Non-current assets
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
Borrowings
Deferred tax liability
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Share based payment reserve
Retained profits / (Accumulated losses)
Total equity
30 June 2022
$’000
30 June 2021
$’000
Note
22
6
7
8
9
7
11
12
13
14
15
8
16
17
18
16
17
18
19
5
20
20
1,837
756
340
1,287
-
4,220
42
7,196
159,660
523
1,265
8,471
1,391
178,548
1,890
414
214
1,486
2,258
6,262
346
6,846
139,037
504
487
3,827
1,660
152,707
182,768
158,969
3,231
671
2,847
6,749
161
41
1,053
70,018
5,713
76,986
3,744
535
163
4,442
184
83
2,902
57,039
3,439
63,647
83,735
68,089
99,033
90,880
98,422
115
496
99,033
95,652
56
(4,828)
90,880
The consolidated statement of financial position is to be read in conjunction with the accompanying notes.
19
ANNUAL REPORT 2022
19
Eureka Group Holdings Annual Report
Eureka Group Holdings Limited and controlled entities
Consolidated Statement
of Cash Flows
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2022
Note
30 June 2022
$’000
30 June 2021
$’000
FOR THE YEAR ENDED 30 JUNE 2022
Cash flows from operating activities
Receipts from customers
Payments to suppliers & employees
Distributions from joint venture
Insurance proceeds
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 for other assets
Payments to sell property assets
Proceeds from sale of investment properties
Proceeds from sale of non-current assets held for sale
Proceeds from sale of inventory
Proceeds from the sale of intangible assets
Proceeds from repayments of loans provided
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
Payment 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)
29,386
(21,073)
1,150
1,027
21
(2,228)
8,283
(21,457)
-
(102)
(5,309)
(83)
(245)
664
5,478
-
-
162
(20,892)
23,100
(10,200)
(2,246)
2,240
(98)
(223)
(17)
12,556
(53)
1,890
1,837
27,857
(19,040)
667
595
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
The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.
ANNUAL REPORT 2022
20
20
Eureka Group Holdings Annual Report
Eureka Group Holdings Limited and controlled entities
Consolidated Statement
Consolidated Statement of Changes in Equity
of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2022
Note
Share
capital
$’000
Retained
profits /
(Accumulated
losses)
$’000
Share
based
payment
reserve
$’000
Total
$’000
For the year ended 30 June 2022
Balance at 1 July 2021
Profit for the year, representing total comprehensive
income for the year
Transactions with owners in their capacity as owners:
Issue of share capital
Transactions costs from share issue (net of tax)
Share based payments
Dividends paid
20
20
20
21
Balance at 30 June 2022
For the year ended 30 June 2021
Balance at 1 July 2020
Profit for the year, representing total comprehensive
income for the year
Transactions with owners in their capacity as owners:
Issue of share capital
Transactions costs from share issue
Share based payments
Dividends paid
Balance at 30 June 2021
20
20
20
21
95,652
-
2,844
(74)
-
-
98,422
94,352
-
1,354
(54)
-
-
95,652
(4,828)
8,173
-
-
-
(2,849)
496
(8,489)
6,283
-
-
-
(2,622)
(4,828)
56
90,880
-
8,173
-
-
59
-
115
2,844
(74)
59
(2,849)
99,033
5
-
85,868
6,283
-
-
51
-
56
1,354
(54)
51
(2,622)
90,880
The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.
21
ANNUAL REPORT 2022
21
Eureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
1. INTRODUCTION
The financial statements cover Eureka Group Holdings Limited and its subsidiaries (Eureka, the Group or the Consolidated
Entity) for the year ended 30 June 2022. Eureka Group Holdings Limited is a company incorporated and domiciled in
Australia. Eureka is a for-profit entity for the purposes of preparing the financial statements.
The Group’s operations and principal activities comprise ownership and property management of senior independent living
communities.
The financial report is presented in Australian dollars and all values are rounded to the nearest thousand dollars ($'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 2022 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 and some assets held for sale.
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 2022 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.
ANNUAL REPORT 2022
22
22
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
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.
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
23
ANNUAL REPORT 2022
23
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022 Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
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.
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.
ANNUAL REPORT 2022
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Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022 Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
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.
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.
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Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022 Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
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
If any such indication exists, the asset’s recoverable amount is estimated. For
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.
goodwill and intangible assets that have indefinite lives, recoverable amount is estimated at each reporting date.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs
to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-
tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates
cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the
“cash-generating unit”). The goodwill acquired in a business combination, for the purpose of impairment testing, is
allocated to cash-generating units that are expected to benefit from the synergies of the combination.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable
amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating
ANNUAL REPORT 2022
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Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022 Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
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.
Non-current assets (including those that are part of the disposal group) are not depreciated or amortised while they are
classified as held for sale. Non-current assets classified as held for sale and the assets of a disposal group classified as
held for sale are presented separately from the other assets in the statement of financial position. The liabilities of a
disposal group classified as held for sale are presented separately from other liabilities in the statement of financial
position.
TRADE AND OTHER PAYABLES
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year
and which are unpaid at that date. The amounts are unsecured and are generally settled within 30-60 days.
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Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022 Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
BORROWINGS
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured
at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised
in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of
loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility
will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it
is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services
and amortised over the period of the facility to which it relates.
Borrowings are 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
another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised
in profit or loss as other income or finance costs.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting period.
EMPLOYEE BENEFITS
Short-term Employee Benefits
Liabilities for wages and salaries, annual leave and long service leave expected to be settled within 12 months of the
reporting date are recognised in current liabilities and are measured as the amounts expected to be paid when the liabilities
are settled inclusive of on-costs. Sick leave is non-vesting and is expensed as paid.
Long-term Employee Benefits
The liabilities for annual leave and long service leave not expected to be settled within 12 months of the reporting date are
recognised in non-current liabilities, provided there is an unconditional right to defer settlement of the liability. The liability
is measured as the present value of expected future payments to be made in respect of services provided by employees
up to the reporting date. Consideration is given for expected future wage and salary levels, experience of employee
departures and periods of service. Expected future payments are discounted using market yields as at the reporting date
on corporate bond rates with the terms to maturity that match, as closely as possible, the estimated future cash outflows.
Share based payments
Employees of the Group receive remuneration in the form of share based payments, whereby employees render services
as consideration for equity instruments (equity-settled transactions).
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an
appropriate valuation model.
That cost is recognised in employee benefits expense, together with a corresponding increase in equity (share based
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
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.
Service and non-market performance conditions are not taken into account when determining the grant date fair value of
awards, but the likelihood of the conditions being met is assessed as part of the Group’s best estimate of the number of
equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value.
Any other conditions attached to an award, but without an associated service requirement, are considered to be non-
vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing
of an award unless there are also service and/or performance conditions.
No expense is recognised for awards that do not ultimately vest because non-market performance and/or service
conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as
vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or
service conditions are satisfied.
PROVISIONS
Provisions are recognised when the Group has a present obligation, the future sacrifice of economic benefits is probable,
and the amount of the provision can be measured reliably.
ANNUAL REPORT 2022
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Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022 Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
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.
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
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Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022 Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
The Group applies the short-term lease recognition exemption to 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:
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.
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Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022 Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
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.
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 15 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.
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 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 8 for significant assumptions made in the assessment
of impairment for this asset.
31
ANNUAL REPORT 2022
31
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022 Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
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.
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 2022
32
32
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
3. REVENUE
Rental income
Revenue from contracts with customers
Catering – owned properties
Catering – managed properties
Total catering income
Service fees
Caretaking fees
Total service and caretaking fees
Total revenue from contracts with customers
Consolidated
30 June 2022
$’000
30 June 2021
$’000
20,395
18,831
3,230
1,612
4,842
3,439
1,073
4,512
9,354
3,036
1,508
4,544
3,307
900
4,207
8,751
Total revenue
29,749
27,582
Other income
Insurance proceeds 1
Gain on sale of inventory 2
Gain on sale of investment property
Gain on sale of intangible assets
Other
Total other income
1,028
-
20
-
64
595
731
-
10
491
1,112
1,827
1
2
Insurance proceeds in the current year included $1.02 million for losses sustained in a flood event in Lismore,
NSW.
The gain on sale of inventory in the prior year relates to the disposal of 31 units at Terranora, NSW as part of
the Group’s capital disposal program comprising sales proceeds of $6.02 million less cost of sales of $5.14
million and a write down to net realisable value of $0.15 million.
33
ANNUAL REPORT 2022
33
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022 Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
Disaggregation of revenue from contracts with customers
The Group derives revenue from the transfer of goods at a point in time (catering
income) and services over time (service and caretaking fees) 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
Interest and finance charges paid/payable for lease liabilities
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 2022
$’000
30 June 2021
$’000
4,842
4,512
9,354
4,544
4,207
8,751
Consolidated
30 June 2022
$’000
30 June 2021
$’000
2,058
48
2,106
2,587
39
2,626
46
15
9
302
372
355
4
6
365
737
745
36
15
10
176
237
342
3
5
350
587
553
ANNUAL REPORT 2022
34
34
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
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
Income tax calculated at 25% (2021: 26%)
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
Over provision
Recognition of 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
Movement in deferred tax balances charged/(credited):
In profit or loss
Directly to equity – transaction costs
Acquisition of investment property
Total deferred tax recognised
Consolidated
30 June 2022
$’000
30 June 2021
$’000
-
2,310
2,310
-
2,459
2,459
10,483
8,742
2,621
29
91
-
-
(431)
-
2,310
2,310
(24)
(12)
2,274
2,273
(95)
364
507
(108)
(214)
(268)
2,459
2,459
-
-
2,459
35
ANNUAL REPORT 2022
35
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022 Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
Deferred tax balances have been stated at 25% (2021: 25%).
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 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 2022
$’000
30 June 2021
$’000
6,498
(578)
(11,633)
(5,713)
192
1,299
1,491
1,831
(409)
91
(22)
-
(340)
1,491
6,734
(434)
(9,739)
(3,439)
601
1,230
1,831
1,472
(214)
871
(29)
(269)
359
1,831
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.
36
ANNUAL REPORT 2022
36
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022 Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
6. TRADE AND OTHER RECEIVABLES
Trade receivables
Accrued income
Consolidated
30 June 2022
$’000
30 June 2021
$’000
361
395
756
220
194
414
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. LOANS RECEIVABLE
Current
Vendor finance 1
West Cabin loan 2
Non-current
Vendor finance 1
West Cabin loan 2
Consolidated
30 June 2022
$’000
30 June 2021
$’000
134
206
340
42
-
42
79
135
214
166
180
346
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 each loan pertains. The loans
have maturity dates at year end of between 0.6 and 1.2 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.
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.
37
ANNUAL REPORT 2022
37
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022 Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
8. OTHER ASSETS
Current
Prepayments and other assets
Bartercard 1
Capital replacement funds
Non-current
Bartercard 1
Couran Cove loan 2
Consolidated
30 June 2022
$’000
30 June 2021
$’000
684
396
207
1,287
1,391
-
1,391
1,116
140
230
1,486
1,660
-
1,660
1
2
Bartercard is an alternative currency and operates as a trade exchange. At balance date, the Bartercard carrying
value was $1.79 million (2021: $1.80 million) which is recorded at cost less any impairment. There was no impairment
expense during the year (2021: $nil). 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 expired on 31 August 2021. Eureka has reserved its rights under the loan agreement and the security.
In the prior 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, which was updated in the current year, the directors assessed the fair value
of the loan to be $nil (2021: $nil) and an impairment charge of $1.05 million was recorded in the prior year. 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.
9. NON-CURRENT ASSETS HELD FOR SALE
Current
Opening balance
Transfers from investment property
Net gain/(loss) on change in fair value
Disposals
Closing balance
Consolidated
30 June 2022
$’000
30 June 2021
$’000
2,258
2,886
20
(5,164)
-
483
2,300
(525)
-
2,258
During the year, disposals included 2 villages in Townsville, Qld, vacant land at Terranora, NSW and two units at the
Caboolture village previously managed by the Group.
Refer to Note 24 for fair value hierarchy disclosures.
ANNUAL REPORT 2022
38
38
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022 Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
10.
INVESTMENT IN SUBSIDIARIES
Country of
Incorporation
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 Bowen Pty Ltd
Eureka Bundamba Pty Ltd
Eureka Brassall Pty Ltd
Eureka Eagleby Pty Ltd
Eureka Earlville Pty Ltd
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
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
Australia
Australia
Australia
Equity Holding
30 June 2022
%
100%
30 June 2021
%
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%
100%
100%
100%
100%
100%
100%
100%
There are no significant restrictions on the Company’s ability to access or use the assets and settle the liabilities of the
Group.
39
ANNUAL REPORT 2022
39
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022 Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
11. 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 2022
$’000
30 June 2021
$’000
6,846
1,500
(1,150)
7,196
5,955
1,558
(667)
6,846
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 $0.52 million (2021: $0.58 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 2022
$’000
30 June 2021
$’000
256
23,876
(460)
(9,280)
14,392
7,196
357
22,468
(333)
(8,800)
13,692
6,846
Group’s carrying amount of the investment
7,196
6,846
1
2
Current liabilities includes borrowings of $0.14 million (2021: $0.10 million), repayable within 12 months.
Non-current liabilities includes long term borrowings of $9.28 million (2021: $8.80 million). $0.50 million of the loan
facility is undrawn at balance date and is able to be used for working capital purposes.
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 2022
30 June 2021
$’000
$’000
5,738
(2,520)
(218)
3,000
-
3,000
3,000
1,500
5,751
(2,363)
(272)
3,116
-
3,116
3,116
1,558
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 expense in the JV.
ANNUAL REPORT 2022
40
40
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022 Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
Summarised statement of financial position of Affordable Living Services Unit Trust:
This entity has been dormant since May 2020.
The joint venture had no contingent liabilities or commitments as at 30 June 2022 (2021: $nil).
12. INVESTMENT PROPERTY
Consolidated
30 June 2022
$’000
30 June 2021
$’000
Investment properties at fair value
159,660
139,037
Movements in investment properties:
Balance at beginning of year
Acquisitions
Disposals
Development costs 1
Capital expenditure
Transfer to non-current assets held for sale
Transfer from intangibles – management rights 2
Transfer from property, plant and equipment
Net gain on change in fair value
Balance at end of year
139,037
15,377
(684)
3,347
2,878
(2,886)
300
-
2,291
159,660
121,443
14,265
-
1,215
1,970
(2,300)
-
83
2,361
139,037
1
2
Includes Wynnum expansion costs of $2.73 million (2021: $1.21 million).
Management rights held in relation to villages for which no future material external revenue stream exists were
reclassified to investment property and included in the fair value of the respective properties.
The Group’s investment properties are shown individually in this note and consist of 25 rental village assets (2021: 27)
along with associated manager’s units, other rental units, the Kingaroy development and the Lismore property. The Group
considers investment properties reside in one class of asset, being seniors’ rental villages.
At 30 June 2022, 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 $2.29 million (2021: $2.36 million). In the current year, the net increase includes a loss
on the change in fair value of the Lismore property of $7.15 million. Due to damage sustained in a flood event during the
year, the directors have assessed the fair value of the property to be $nil at balance date. The net gain on the change in
fair value of the remaining investment properties was $9.44 million.
The net gain on change in fair value 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 continued during the year, with 12 properties being independently valued.
Refer to Note 24 for fair value hierarchy disclosures relating to investment properties.
41
ANNUAL REPORT 2022
41
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022 Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
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 2022
$’000
30 June 2021
$’000
20,395
3,230
(12,749)
2,291
18,831
3,036
(12,268)
2,361
The Group has no restrictions on the realisability of its investment properties. There are no other contractual obligations
to either purchase, construct or develop investment properties or for repairs, maintenance and enhancements apart from
those referred to in Note 33. Certain assets are pledged as security for borrowings as detailed in Note 19.
A summary of the investment properties by state is as follows:
State
Queensland
New South Wales
Victoria
South Australia
Details of investment properties are as follows:
Property
Albury Village, NSW
Ayr Village, Qld
Belgian Gardens Village, Qld
Bowen Village, Qld
Brassall Village, Qld
Broken Hill Village, NSW
Bundamba Village Lots 18,28,29 and 30, Qld
Bundaberg Avenell Village, Qld
Bundaberg Liberty Village, Qld
Cairns Smithfield Village, Qld
Cairns Earlville Village, Qld
Elizabeth Vale Scenic Village 1, SA
Elizabeth Vale Scenic Village 2, SA
Rockhampton Village 1, Qld
Rockhampton Village 2, Qld
Gympie Village, Qld
Hervey Bay Village, Qld
Kingaroy development, Qld
Lismore Village, NSW
Mackay Village, Qld
Margate Village, Qld
Mildura Village, Vic
Mt Gambier Village, SA
Orange Village, NSW
Salisbury Village, SA
Shepparton Village, Vic
Southport Village, Qld
Tivoli Village Lots 6,8,9,21 & 22, Qld
South Townsville Village, Qld
Whyalla Village, SA
Wynnum Village, Qld
Managers’ units
Carrying amount
30-Jun-22
$’000
Carrying amount
30-Jun-21
$’000
104,564
16,160
10,900
28,036
159,660
83,360
20,992
9,740
24,945
139,037
Carrying amount
30-Jun-22
$’000
Carrying amount
30-Jun-21
$’000
5,700
1,870
-
5,440
7,617
4,000
221
5,560
16,250
5,400
9,001
6,800
4,841
4,088
5,820
4,563
5,780
1,196
-
10,899
5,036
4,900
4,840
5,859
5,900
6,000
4,299
-
-
4,769
10,090
2,921
4,778
1,317
1,488
-
-
3,032
-
5,304
14,748
4,973
8,777
6,329
4,680
3,562
5,644
4,492
5,702
-
6,992
9,527
4,908
4,668
3,392
5,590
4,971
5,072
4,286
667
940
4,700
6,894
1,604
159,660
139,037
ANNUAL REPORT 2022
42
42
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022 Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
13.
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:
Opening balance at 1 July 2020
Additions at cost
Transfers to investment property
Depreciation expense
Closing balance at 30 June 2021
Opening balance at 1 July 2021
Additions at cost
Disposals
Transfer to investment property
Depreciation expense
Closing balance at 30 June 2022
Consolidated
30 June 2022
$’000
30 June 2021
$’000
619
(264)
355
325
(167)
158
36
(26)
10
523
619
(249)
370
223
(131)
92
81
(39)
42
504
Buildings
$’000
Plant &
equipment
$’000
Motor
vehicles
$’000
Total
$’000
385
-
-
(15)
370
370
-
-
-
(15)
355
157
54
(83)
(36)
92
92
118
(6)
-
(46)
158
52
-
-
(10)
42
42
-
(23)
-
(9)
10
594
54
(83)
(61)
504
504
118
(29)
-
(70)
523
43
ANNUAL REPORT 2022
43
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
14. RIGHT OF USE ASSETS
Leased property
Opening balance
Additions
Modification on leases
Depreciation expense
Closing balance
Leased equipment
Opening balance
Depreciation expense
Closing balance
Consolidated
30 June 2022
$’000
30 June 2021
$’000
482
1,176
(96)
(299)
1,263
5
(3)
2
714
-
(59)
(173)
482
8
(3)
5
Total right of use assets
1,265
487
Income received from sub-leasing right of use assets was $0.03 million for the year (2021: $0.03 million).
15. 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 2022
$’000
30 June 2021
$’000
8,548
(2,119)
6,429
3,627
(1,852)
1,775
140
(56)
84
25
(22)
3
140
(52)
88
25
(16)
9
1,955
1,955
8,471
3,827
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 asset 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.
ANNUAL REPORT 2022
44
44
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
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.
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 (2021: 2%);
the terminal value was calculated using a growth rate of 2% (2021: 2%);
cash flows have been discounted using a pre-tax discount rate of 15% (2021: 15%); and
cash flows assume no additional villages will be managed.
There were no reasonably possible changes in assumptions used to determine the CGU’s recoverable amount that would
cause an impairment.
Reconciliation of movements in intangible assets:
Management
rights
$’000
Rent rolls
$’000
Goodwill
$’000
Other
intangibles
$’000
Total
$’000
Opening balance at 1 July 2020
Amortisation expense
Closing balance at 30 June 2021
Opening balance at 1 July 2021
Additions at cost
Transfer to investment property
Amortisation expense
Closing balance at 30 June 2022
2,117
(342)
1,775
1,775
5,309
(300)
(355)
6,429
91
(3)
88
1,955
-
1,955
88
1,955
-
-
(4)
84
-
-
-
1,955
14
(5)
9
9
-
-
(6)
3
4,177
(350)
3,827
3,827
5,309
(300)
(365)
8,471
The remaining amortisation period for the management rights, on a weighted average basis, is 35 years (2021: 11 years),
the increase being attributable to the acquisition of the Oxford Crest acquisition with longer term agreements.
16. TRADE & OTHER PAYABLES
Current
Trade creditors and accruals
Accrued interest
Capital replacement fund liability
Non-current
Capital replacement fund liability
Consolidated
30 June 2022
$’000
30 June 2021
$’000
2,957
234
40
3,231
161
161
3,192
506
46
3,744
184
184
The carrying amounts of trade and other payables are considered to be the same as their fair value, due to their
short term nature.
45
ANNUAL REPORT 2022
45
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
17. PROVISIONS
Current
Employee benefits
Non-current
Employee benefits
Other
18. OTHER FINANCIAL LIABILITIES
Current
Lease liability
Deferred consideration 1
Non-current
Deferred consideration 1
Lease liability
Consolidated
30 June 2022
$’000
30 June 2021
$’000
671
671
31
10
41
535
535
83
-
83
Consolidated
30 June 2022
$’000
30 June 2021
$’000
364
2,483
2,847
-
1,053
1,053
163
-
163
2,431
471
2,902
1 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 2022 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 2022
46
46
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
19. BORROWINGS
Non-current
Bank loan – secured 1
Borrowing costs
Consolidated
30 June 2022
$’000
30 June 2021
$’000
70,075
(57)
70,018
57,175
(136)
57,039
1
As at 30 June 2022, the Group has access to National Australia Bank (NAB) facilities with the following terms:
•
•
Maximum limit of $77.50 million (2021: $77.50 million). Total drawings on this facility were $70.08 million
(2021: $57.18 million). The facility expires on 31 March 2024. Interest is payable at variable rates (3.76% at
1 July 2022) 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 Note 18.
The NAB facilities are secured by a first priority general security over all present and future acquired property and
specified management letting rights. As at 30 June 2022, property assets and management letting rights, with a
carrying value of $164.94 million (2021: $141.30 million), have been pledged by the Group.
During the year, the facility terms were amended to add the acquired Oxford Crest management letting rights to the
security pool. The limit will increase by $2.50 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.
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 under the Dividend
Reinvestment Plan
Transaction costs (net of tax)
Closing balance
Consolidated
30 June 2022
Number
232,384,417
4,802,104
-
237,186,521
30 June 2022
$’000
95,652
2,844
(74)
98,422
30 June 2021
Number
230,037,638
2,346,779
-
232,384,417
30 June 2021
$’000
94,352
1,354
(54)
95,652
Pursuant to the Company’s fully underwritten Dividend Reinvestment Plan:
• On 21 April 2021, 2,346,779 shares were issued at $0.5773 for the 2021 financial year interim dividend.
• On 28 September 2021, 2,284,531 shares were issued at $0.5988 for the 2021 financial year final dividend.
• On 23 March 2022, 2,517,573 shares were issued at $0.5862 for the 2022 financial year interim dividend.
47
ANNUAL REPORT 2022
47
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
Share buy back
In the prior year the Company closed the on-market share buyback. No ordinary shares were bought back and cancelled
during the year.
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 - 2021: 0.59 cents per share (2020: 0.55 cents per share)
Interim dividend - 2022: 0.63 cents per share (2021: 0.59 cents per share)
30 June 2022
$’000
30 June 2021
$’000
56
59
115
5
51
56
30 June 2022
$’000
30 June 2021
$’000
1,371
1,478
2,849
1,265
1,357
2,622
The Dividend Reinvestment Plan (DRP) was fully underwritten for the final dividend for 2021 and the interim dividends for
2021 and 2022. Details of shares issued under the DRP are shown in Note 20. Proceeds received from the underwriter
were $2.24 million (2021: $0.71 million).
Since 30 June 2022, the Board has declared a final dividend of 0.63 cents per share, amounting to $1.49 million payable
on 6 October 2022. The financial effect of this dividend has not been brought to account in the financial statements for the
year ended 30 June 2022 and will be recognised in subsequent financial reports.
48
ANNUAL REPORT 2022
48
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
22. CASH FLOW INFORMATION
(a) Reconciliation of cash
Cash at bank and on hand
Consolidated
30 June 2022
$’000
30 June 2021
$’000
1,837
1,890
(b) Reconciliation of profit before tax to net cash flow from operating activities
Profit after income tax expense
Depreciation and amortisation
Bad and doubtful debts expense
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
Loss on sale of non-current assets held for sale
Loss on disposal of plant & equipment
Share based payments expense
Lease modification
Non-cash purchases
(Increase)/decrease in:
- Trade and other receivables
- Other current assets
Increase/(decrease) in:
- Trade and other payables
- Provisions
- Deferred tax liability
Net cash provided by operating activities
(c) Non-cash investing and financing activities
Consolidated
30 June 2022
30 June 2021
$’000
$’000
8,173
737
14
(2,291)
(20)
-
(1,500)
1,150
(124)
-
-
78
29
59
(52)
-
(329)
(66)
31
84
2,310
8,283
6,283
587
-
(2,361)
525
1,050
(1,558)
667
-
(731)
(10)
-
-
51
-
35
(1)
(86)
916
22
2,459
7,848
During the year, the Group acquired goods and services of $0.01 million with Bartercard dollars (2021: $0.13 million).
Shares valued at $0.60 million were issued pursuant to the Dividend Reinvestment Plan in lieu of the payment of dividends
(2021: $0.64 million).
49
ANNUAL REPORT 2022
49
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
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
Consolidated
30 June 2022
$’000
30 June 2021
$’000
1,837
756
382
1,787
4,762
1,890
414
560
1,800
4,664
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 counterparty or resident is analysed individually for creditworthiness
before the Group enters into a services agreement with them. The Group monitors 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.
ANNUAL REPORT 2022
50
50
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
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 2022
$’000
30 June 2021
$’000
596
61
33
66
756
362
44
2
6
414
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 7. The vendor finance loan book consists of 6
individual loan contracts (2021:7). 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 2022
$’000
30 June 2021
$’000
340
42
382
214
346
560
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 (2021: $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 prior year, the asset was impaired by $1.05 million and the carrying
value at year end is $nil (2021: $nil). Refer Note 8 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.
At balance date, the Group had a current asset deficiency of $2.53 million (2021: surplus of $1.82 million), $2.48 million of
which is a deferred consideration payment relating to the Hervey Bay village acquisition that is due for payment in
November 2022. The bank loan facility has sufficient undrawn funds to enable this payment to be made and the total facility
limit will increase on payment and return of the associated bank guarantee. Under the terms of the loan facility, Eureka is
able to deposit and withdraw funds in accordance with its working capital needs, subject to satisfaction of the bank’s
covenants. Refer further to Note 18 and 19.
The Group had unused borrowing facilities of $7.43 million (2021: $20.32 million) at the reporting date.
The tables below show the Group’s financial liabilities classified into relevant maturity groupings based on their contractual
maturities.
51
ANNUAL REPORT 2022
51
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
30 June 2022
Trade and other payables
Loans - secured 1
Other financial liabilities
Deferred payment liability
Total
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
3,158
75,032
1,606
2,500
82,296
3,158
1,068
181
2,500
6,907
-
1,348
183
-
-
72,616
278
-
1,531
72,894
-
-
964
-
964
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
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 2022, all of the Group’s bank loan is at variable rates (refer to Note 19).
The impact of a +/- 100 basis points movement in variable interest rates would result in an increase or decrease in profit
after tax of $0.53 million (2021: $0.17 million).
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.
ANNUAL REPORT 2022
52
52
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
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 – 2022
Assets
Other assets – loan including land option
Investment property
Total assets
Consolidated – 2021
Assets
Other assets – loan including land option
Non-current assets held for sale
Investment property
Total assets
-
-
-
-
-
-
-
-
-
-
-
159,660
159,660
-
159,660
159,660
-
2,258
-
2,258
-
-
139,037
139,037
-
2,258
139,037
141,295
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 2022, 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) was assessed in the prior
year 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 8 for further details.
53
ANNUAL REPORT 2022
53
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
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
2022
N/A
Costs to realise
the loan
N/A
2021
N/A
N/A
The external valuation of the
secured land 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).
Investment
properties –
rental villages
Capitalisation
method 1
Capitalisation
rate
7.00%-10.50%
(9.43%) 2,4
9.00%-
11.00%
(9.92%)
Capitalisation rate has an
inverse relationship to
valuation.
Stabilised
occupancy
94%-99%
(97.9%) 3,4
88%-100%
(97.2%)
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
3
4
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 one apartment-style complex with a capitalisation rate of 6.5%, and a village in which National Disability Insurance Scheme
services revenue is earned with a capitalisation rate of 7.5%.
Excludes one short stay village with a stabilised occupancy rate of 65%.
The range excludes the Lismore property which is non-operational following a significant flood event during the year and has an
assessed fair value of $nil at 30 June 2022.
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 8, 9, 12 and 16.
25.
COMMITMENTS AND CONTINGENCIES
As at the 30 June 2022, the Group had the following commitments:
•
•
Bank guarantees to various landlords of $0.09 million (2021: $0.03 million); and
Bank guarantee facility of $2.50 million to secure deferred consideration payable for the acquisition of the Hervey
Bay village.
The Group had no other material commitments as at 30 June 2022.
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.
54
ANNUAL REPORT 2022
54
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
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 2022
$’000
30 June 2021
$’000
8,173
6,283
#’000
234,738
#’000
230,494
Effects of dilution from share rights 1
485
429
Weighted average number of ordinary shares & potential ordinary shares
used in calculating diluted earnings per share
235,223
230,923
Basic earnings per share
Diluted earnings per share
3.48 cents
3.47 cents
2.73 cents
2.72 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.
27. SHARE BASED PAYMENTS
Share rights
The Company has a long term incentive plan pursuant to which share rights may be granted to key management personnel.
During the current year 353,783 share rights were issued with an exercise price of $nil. These share rights vest on
30 September 2024, subject to the satisfaction of performance and service conditions. No share rights were issued in the
prior year.
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 either a Black Scholes or Monte Carlo valuation
methodology, 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 2022.
55
ANNUAL REPORT 2022
55
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
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 2022
$’000
30 June 2021
$’000
59
51
The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share
rights during the year:
Share rights
30 June 2022
Number
2022 WEAP
30 June 2021
Number
2021 WAEP
Outstanding at the beginning of the year
Granted during the year
Forfeited during the year
Outstanding at the end of the year
429,362
353,783
-
783,145
-
-
-
-
429,362
-
-
429,362
-
-
-
-
The following table list the inputs to the model used to value the share rights issued to key management personnel:
Grant date
Expiry date
Share price at grant date ($)
Exercise price ($)
Fair value of right ($)
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Expected life of share rights (years)
Model used
30 June 2022
Share rights
4 May 22
30 September 2026
0.665
0.000
0.357
1.8
30.00
2.89
4.41
Monte Carlo
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 2022
30 June 2021
$’000
$’000
1,167
94
59
1,320
1,310
85
51
1,446
Detailed disclosures relating to key management personnel are set out in the remuneration report within the Directors'
Report.
56
ANNUAL REPORT 2022
56
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
(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 2022
$’000
30 June 2021
$’000
30 June 2022
$’000
30 June 2021
$’000
304
294
50
41
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 or the prior year.
29. ULTIMATE PARENT ENTITY
The parent entity within the group is Eureka Group Holdings Limited, which is the ultimate parent entity within Australia.
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.
57
ANNUAL REPORT 2022
57
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
Rental villages
$’000
Property
management
$’000
Unallocated
$’000
Total
$’000
Consolidated - 30 June 2022
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
Total other items
Profit/(loss) before income tax expense
Income tax (expense)/benefit
Profit/(loss) after income tax expense
Segment assets
Segment liabilities
26,003
-
1,112
27,115
(12,749)
(2,038)
(14,787)
2,291
20
1,500
3,811
16,139
(3,552)
12,587
168,187
72,592
Non-cash and other significant items included in profit:
Gain on change in fair value of:
- Investment property
- Other assets
Share of profit of joint venture
Depreciation & amortisation
Amortisation of borrowing costs
Segment acquisitions:
Acquisition and subsequent expenditure of
investment property
Acquisition of property, plant and equipment
Acquisition of intangible assets
2,291
20
1,500
(23)
(96)
21,602
-
-
3,746
-
-
3,746
(2,590)
(45)
(2,635)
-
-
-
-
1,111
(249)
862
9,382
3,450
-
-
-
(451)
-
-
-
5,309
-
21
-
21
(6,765)
(23)
(6,788)
-
-
-
-
(6,767)
1,491
(5,276)
5,199
7,693
-
-
-
(263)
-
-
118
-
29,749
21
1,112
30,882
(22,104)
(2,106)
(24,210)
2,291
20
1,500
3,811
10,483
(2,310)
8,173
182,768
83,735
2,291
20
1,500
(737)
(96)
21,602
118
5,309
ANNUAL REPORT 2022
58
58
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
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
24,271
-
688
24,959
(12,268)
(2,575)
(14,843)
2,361
(59)
1,558
-
3,860
13,976
(3,634)
10,342
147,430
62,592
Non-cash and other significant items included in profit:
Gain/(loss) on change in fair value of:
- Investment property
- 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
-
-
3,311
-
10
3,321
(2,193)
(37)
(2,230)
-
-
-
-
-
1,091
(375)
716
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
66
59
ANNUAL REPORT 2022
59
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
31.
REMUNERATION OF AUDITORS
Consolidated
30 June 2022
30 June 2021
$
$
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
190,700
200,000
32.
PARENT ENTITY DISCLOSURES
30 June 2022
30 June 2021
$’000
$’000
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
3,398
-
3,398
1,731
119,084
120,815
994
65,306
66,300
98,398
115
(43,999)
54,514
12,789
-
12,789
3,466
106,216
109,682
1,262
57,252
58,514
95,652
56
(44,540)
51,168
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 2022. 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 2022.
60
ANNUAL REPORT 2022
60
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022
Eureka Group Holdings Limited and controlled entities
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
33. SUBSEQUENT EVENTS
Subsequent to year end, the following significant transactions have occurred:
•
•
•
Eagleby acquisition – the Group entered into a conditional contract to purchase the management and letting rights
and 55 of 72 residential units at a village in Eagleby, Qld for $7.3 million. The acquisition is conditional upon financial
approval and certain body corporate approvals and is scheduled for completion in September 2022.
Debt facility increase – the Group’s NAB loan facility limit has increased by $3.00 million to $80.50 million to fund
the Eagleby acquisition.
Dividend – the Company declared a final dividend in respect of the year of 0.63 cents per share, payable on 6
October 2022 amounting to $1.49 million.
Other than the abovementioned items, no other matter or circumstance has arisen since 30 June 2022 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.
61
ANNUAL REPORT 2022
61
Notes to the Financial StatementsEureka Group Holdings Annual ReportFOR THE YEAR ENDED 30 JUNE 2022
Eureka Group Holdings Limited and controlled entities
Directors’ Declaration
Directors’ Declaration
FOR THE YEAR ENDED 30 JUNE 2022
FOR THE YEAR ENDED 30 JUNE 2022
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 2022 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 2022.
On behalf of the Board
Murray Boyte
Executive Chair
Dated in Brisbane this 30th of August 2022.
ANNUAL REPORT 2022
62
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Eureka Group Holdings Annual Report
Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
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
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
Limited
Report on the Audit of the Financial Report
Opinion
Report on the Audit of the Financial Report
We have audited the financial report of Eureka Group Holdings Limited (the Company) and its
Opinion
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
as at 30 June 2022, 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
We have audited the financial report of Eureka Group Holdings Limited (the Company) and its
ended, notes to the financial statements, including a summary of significant accounting policies, and
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
the directors' declaration.
as at 30 June 2022, 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
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
ended, notes to the financial statements, including a summary of significant accounting policies, and
Act 2001, including:
the directors' declaration.
a)
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2022
and of its consolidated financial performance for the year ended on that date; and
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 2022
and of its consolidated financial performance for the year ended on that date; and
Basis for Opinion
b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
Basis for Opinion
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
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
Report section of our report. We are independent of the Group in accordance with the auditor
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
independence requirements of the Corporations Act 2001 and the ethical requirements of the
the Code.
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
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
our opinion.
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
Key Audit Matters
our opinion.
Key audit matters are those matters that, in our professional judgment, were of most significance in our
Key Audit Matters
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
Key audit matters are those matters that, in our professional judgment, were of most significance in our
the matter is provided in that context.
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
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Eureka Group Holdings Annual Report 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
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 the matter. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of material
misstatement of the financial report. The results of our audit procedures, including the procedures
Report on the Audit of the Financial Report
performed to address the matter below, provide the basis for our audit opinion on the accompanying
financial report.
Opinion
We have audited the financial report of Eureka Group Holdings Limited (the Company) and its
Valuation of Investment Properties
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
as at 30 June 2022, 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
the directors' declaration.
How our audit addressed the key audit matter
Our audit procedures included the following:
Why significant
At 30 June 2022, the Group had investment
properties carried at $159.7m, representing
87% of total assets at that date.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
• Evaluated the appropriateness of the valuation
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2022
and of its consolidated financial performance for the year ended on that date; and
methodology used across the portfolio by the Group
and tested the inputs and assumptions including
capitalisation rates, occupancy levels and
maintainable earnings.
a)
Investment properties are initially recognised
at cost, including transaction costs, and
subsequently measured at fair value. Gains or
losses arising from changes in fair value are
recognised in the statement of profit or loss
and other comprehensive income.
b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
• Held inquiries of management to assess the inputs
and assumptions used in the valuations at 30 June
2022.
Basis for Opinion
• Assessed the qualifications, competence and
Fair value measurement involves a high
degree of estimation and judgement, and the
involvement of external valuation specialists.
The key inputs include capitalisation rates,
occupancy levels and maintainable earnings.
The fair value of investment property is
estimated based on conditions existing at 30
June 2022.
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.
Review and assess a sample of external property
valuations completed by the Group’s
independent valuation experts.
objectivity of the independent valuation experts used
by the Group.
Involved our real estate valuation specialists to:
•
•
Note 2, 12 and 24 of the financial report
details the accounting policy for investment
property assets, key inputs and sensitivities
associated with reasonably possible changes
in those inputs.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Assist with the assessment of capitalisation
rates adopted by the Group across the portfolio.
•
•
Assessed the adequacy of disclosures included in
the Notes to the financial report.
Key Audit Matters
Valuation of investment property is
considered a key audit matter due to the
significance of this balance and the level of
estimation and judgement involved in
determining its carrying value.
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
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
63
64
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Eureka Group Holdings Annual Report 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
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the
information included in the Group’s Annual Report, but does not include the financial report and our
Report on the Audit of the Financial Report
auditor’s report thereon. We obtained the directors’ report that is to be included in the annual report,
prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the annual
Opinion
report after the date of this auditor’s report.
We have audited the financial report of Eureka Group Holdings Limited (the Company) and its
Our opinion on the financial report does not cover the other information and accordingly we do not
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
express any form of assurance conclusion thereon, with the exception of the Remuneration Report and
as at 30 June 2022, the consolidated statement of profit or loss and other comprehensive income,
our related assurance opinion.
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
In connection with our audit of the financial report, our responsibility is to read the other information
the directors' declaration.
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.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
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.
a)
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2022
and of its consolidated financial performance for the year ended on that date; and
Responsibilities of the Directors for the Financial Report
b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
Basis for Opinion
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
fraud or error.
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
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
independence requirements of the Corporations Act 2001 and the ethical requirements of the
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
operations, or have no realistic alternative but to do so.
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
Auditor's Responsibilities for the Audit of the Financial Report
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
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
Key Audit Matters
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
Key audit matters are those matters that, in our professional judgment, were of most significance in our
if, individually or in the aggregate, they could reasonably be expected to influence the economic
audit of the financial report of the current year. These matters were addressed in the context of our
decisions of users taken on the basis of this financial report.
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
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
the matter is provided in that context.
judgment and maintain professional scepticism throughout the audit. We also:
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Eureka Group Holdings Annual Report 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
•
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
Report on the Audit of the Financial Report
Opinion
•
Obtain an understanding of internal control relevant to the audit in order to design audit
We have audited the financial report of Eureka Group Holdings Limited (the Company) and its
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
opinion on the effectiveness of the Group’s internal control.
as at 30 June 2022, 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
the directors' declaration.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
•
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
and, based on the audit evidence obtained, whether a material uncertainty exists related to
Act 2001, including:
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
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2022
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
and of its consolidated financial performance for the year ended on that date; and
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
complying with Australian Accounting Standards and the Corporations Regulations 2001.
cease to continue as a going concern.
b)
a)
•
Basis for Opinion
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
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
•
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
Report section of our report. We are independent of the Group in accordance with the auditor
business activities within the Group to express an opinion on the financial report. We are
independence requirements of the Corporations Act 2001 and the ethical requirements of the
responsible for the direction, supervision and performance of the Group audit. We remain solely
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
responsible for our audit 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.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
identify during our audit.
our 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
Key Audit Matters
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
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
From the matters communicated to the directors, we determine those matters that were of most
audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a
significance in the audit of the financial report of the current year and are therefore the key audit
separate opinion on these matters. For each matter below, our description of how our audit addressed
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
the matter is provided in that context.
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
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Eureka Group Holdings Annual Report 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 Remuneration Report
Opinion on the Remuneration Report
Report on the Audit of the Financial Report
We have audited the Remuneration Report included in pages 9 to 16 of the directors' report for the
year ended 30 June 2022.
Opinion
In our opinion, the Remuneration Report of Eureka Group Holdings Limited for the year ended 30 June
2022, complies with section 300A of the Corporations Act 2001.
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 2022, 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
the directors' declaration.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express
an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a)
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2022
and of its consolidated financial performance for the year ended on that date; and
b)
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complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
Wade Hansen
Partner
Brisbane
30 August 2022
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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Eureka Group Holdings Annual Report 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
Holdings Limited
Opinion
We have audited the financial report of Eureka Group Holdings Limited (the Company) and its
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
As lead auditor for the audit of the financial report of Eureka Group Holdings Limited for the financial
as at 30 June 2022, the consolidated statement of profit or loss and other comprehensive income,
year ended 30 June 2022, I declare to the best of my knowledge and belief, there have been:
consolidated statement of changes in equity and consolidated statement of cash flows for the year then
ended, notes to the financial statements, including a summary of significant accounting policies, and
the directors' declaration.
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit;
b) no contraventions of any applicable code of professional conduct in relation to the audit; and
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
c) no non-audit services provided that contravene any applicable code of professional conduct
in relation to the audit.
a)
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2022
and of its consolidated financial performance for the year ended on that date; and
This declaration is in respect of Eureka Group Holdings Limited and the entities it controlled during the
financial year.
b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
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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.
Wade Hansen
Partner
Brisbane
30 August 2022
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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Eureka Group Holdings Annual Report Eureka Group Holdings Limited and controlled entities
Corporate Governance Statement
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/.
69
ANNUAL REPORT 2022
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Eureka Group Holdings Annual Report
Eureka Group Holdings Limited and controlled entities
Security Holder Information
Security Holder Information
Distribution of Securities as at 15 August 2022
Number of
Securities
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total Security Holders
No of
Shareholders
362
200
85
241
91
979
Marketable Shares
There were 330 holders of less than a marketable parcel
of 826 shares holding a total of 63,638 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 15 August 2022
NAOS Asset Management Limited
Cooper Investors Pty Limited
Tribeca Investment Partners
Ethical Partners Funds Management Pty Ltd
Charter Hall Property Securities Management Limited 1
Australian Retirement Trust Pty Ltd
Total
1
Includes One Management Investment Funds Limited
Twenty Largest Ordinary Shareholders as at 15 August 2022
National Nominees Limited
HSBC Custody Nominees (Australia) Limited
One Managed Investment Funds Limited
J P Morgan Nominees Australia Pty Limited
Tolani Estate Pty Ltd
Bond Street Custodians Limited
H & G Limited
Bond Street Custodians Limited
Citicorp Nominees Pty Limited
NEJA Pty Ltd
Gold Tiger Investments Pty Ltd
HIDIV Pty Ltd
Mr Alister C Wright
Strategic Value Pty Ltd
Acadia Park Pty Ltd
EXLDATA Pty Ltd
EXLDATA Pty Ltd
Cobbitty Garden Centre Pty Ltd
Larnpace Pty Ltd
Mr Murray Raymond Boyte & Mrs Jane Elizabeth Boyte
Total
No of Ordinary
Shares Held
% of Issued
Share Capital
49,888,002
32,934,541
25,365,406
23,085,250
19,706,125
17,881,208
168,860,532
11,865,789
21.03
14.32
11.03
9.84
8.56
7.62
72.40
6.19
No of Ordinary
Shares Held
110,393,289
% of Issued
Share Capital
46.54
39,598,535
15,550,000
10,445,385
4,750,511
4,676,790
3,195,359
2,452,332
2,137,633
2,000,000
1,948,743
1,898,075
1,346,265
1,249,000
1,219,370
1,207,507
1,145,772
1,000,000
925,000
900,205
16.70
6.56
4.40
2.00
1.97
1.35
1.03
0.90
0.84
0.82
0.80
0.57
0.53
0.51
0.51
0.48
0.42
0.39
0.38
208,039,771
87.71
Performance Rights
As at the Reporting Date, there are 2 holders of a total of 783,145 performance rights of the Company. There were held by Cameron
Taylor, 656,192 rights, and Laura Fanning, 126,953 rights. These 2 holders held 100% of the rights of the Company.
ANNUAL REPORT 2022
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Eureka Group Holdings Annual Report
Corporate Directory
Registered Address & Contact Details
Company Secretary
Registered Address
Suite 2D 7 Short St, Southport QLD 4215
Brisbane Office
Level 5, 120 Edward St, Brisbane QLD 4000
Postal Address
PO Box 10819,
Southport BC QLD 4215
Phone Number
07 5568 0205
Website
www.eurekagroupholdings.com.au
Email
Geoffrey Stirton
Solicitors
Hamilton Locke
Riverside Centre
Level 28/123 Eagle Street
Brisbane QLD 4000
Tel: 07 3036 7886
Auditors
Ernst & Young
111 Eagle St
Brisbane Qld 4000
Tel: 07 3011 3333
Fax: 07 3011 3344
Share Registry
info@eurekagroupholdings.com.au
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
Board of Directors
Murray Boyte
Executive Chair
Russell Banham
Sue Renkin
Greg Paramor AO
Senior Management
Cameron Taylor
Chief Executive Officer
Laura Fanning
Chief Financial Officer & Company Secretary
71
Eureka Group Holdings Annual Report
Contact Details
ABN 15 097 241 159
Level 5, 120 Edward Street,
Brisbane QLD 4000
Level 2, 7 Short Street,
Southport QLD 4215
P: (07 ) 5568 0205
E: info@eurekagroupholdings.com.au