2024
Annual Report
2024 ANNUAL REPORT
i
2024 ANNUAL REPORT
i
Contents
2024 ANNUAL REPORT
FY24 Results Overview
Chairman’s Report
5 Year Growth Trends
2024 FINANCIAL REPORT
Directors’ Report
Auditor’s Independence Declaration
Financial Statements
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Corporate Governance Statement
Shareholder Information
Corporate Directory
ii
iv
xii
3
21
22
27
85
86
91
92
94
2024 ANNUAL REPORT
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FY24 Results Overview
2024 ANNUAL REPORT
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Revenue
$41.1m
13%
Profit after tax
$13.2m
$19.2m (FY23)
Underlying EBITDA
$15.2m
20%
2024 ANNUAL REPORT
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2024 ANNUAL REPORT
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Underlying EBITDA
margin
36.9%
34.6% (FY23)
Dividends per share
1.40c
4%
Earnings per share
4.37c
6.97c (FY23)
2024 ANNUAL REPORT
iv
Chairman’s Report
Eureka’s FY24 results reflect the quality of
our assets and sustained high demand and
occupancy levels across the portfolio. New
appointments to the Board and CEO have
strengthened Eureka’s ability to deliver on
its growth strategy and enhances Eureka’s
value proposition as the pure-play leader in
the specialised affordable seniors build to rent
sector.
Financial Review
For the 2024 financial year (the year), Eureka Group Holdings
Limited (Eureka) achieved a profit after tax of $13.2 million. The
result includes strong growth in revenue and underlying earnings.
The FY24 result is lower than the FY23 profit after tax of $19.2
million due to lower levels of property revaluations, an increase
in finance costs and costs to defend Aspen Group Limited’s
unsuccessful takeover offer. Although the revaluations were lower
than the prior year, they demonstrate continued improvement in
maintainable earnings while capitalisation rates remained stable.
Key financial metrics for the year were:
Underlying earnings before interest, tax, depreciation
and amortisation (EBITDA) was $15.2 million, up 20%
on the prior year Underlying EBITDA of $12.6 million.
Underlying earnings per share was 3.02 cents, up
from 2.93 cents in the prior year.
Earnings per share was 4.37 cents, compared with
the prior year 6.97 cents.
Net operating cash flow was $8.1 million, down 7%
on the prior year due to a $1.7 million increase in
interest payments during the current year.
Net tangible assets per share was 48.3 cents, up 7%
on the prior year of 45.0 cents.
The strong operating result was driven by ongoing high resident
demand, rental growth, improvement in maintainable earnings
across the portfolio and asset acquisitions and expansion. During
the year, the Group invested $9 million in the Eureka Villages WA
Fund which was established to acquire six villages comprising
321 units in Western Australia. Eureka also completed and fully
leased the $12.6 million, 51-unit expansion of the Brassall, Qld
village during the year.
Underlying EBITDA margin has expanded to 36.9% compared to
the margin for the previous year of 34.6% due to organic growth
and impact of acquisitions. Underlying EBITDA margin will
continue to improve through organic growth, acquisitions and
economies of scale.
Profit after tax included a net gain on the change in fair value of
investment properties of $14.1 million, including assets held in a
joint venture. The valuation uplift was driven by improvements in
maintainable earnings while capitalisation rates remained stable.
The weighted average capitalisation rate was 8.17% compared
with 8.3% in FY23.
More than 90% of the property portfolio has been independently
valued on or since 30 June 2023. Acquisitions, developments,
capital improvements and revaluations during the year
contributed to a $78 million (31%) increase in assets under
management.
During the year, the debt facility with the National Australia Bank
increased to $101.0 million to facilitate the investment in the
Eureka Villages WA Fund and the expansion of the Brassall village.
The expiry date of the $96.0 million core facility is 31 March 2026.
A $5.0 million facility expires on 31 October 2025.
Net debt was $89.1 million and Eureka has fixed interest rate
swaps covering 55% of drawn debt at year end with a weighted
average expiry of 1.15 years. The gearing ratio, calculated as net
debt to net debt plus equity, was 36.6% at 30 June 2024, up from
32.1% in the prior year and remains within the target range.
A growing reliance on the Government age pension coupled with
demand for low-cost, quality rental accommodation highlights
the increasing importance of the affordable build to-rent sector
in which we operate and underpins future demand for Eureka’s
villages.
Eureka’s strong balance sheet is supported by its capital
management plan which includes traditional and alternative
funding options to support growth across acquisitions and
developments.
Eureka has demonstrated its ability to access alternative sources
of funding to grow the business via a new wholesale property
fund, Eureka Villages WA Fund.
2024 ANNUAL REPORT
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Our Villages
28
13
5
6
52
Village Numbers
1,640
620
254
321
2,835
Unit Numbers
Owned
Managed
Joint Venture
Managed Fund
52
Villages
2024 ANNUAL REPORT
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Portfolio Highlights
Maintained an occupancy rate in excess of 98%.
Strong like-for-like organic revenue growth.
Invested $9.0 million in the Eureka Villages WA Fund which
was established to acquire six villages comprising 321 units
in Western Australia for $44.0 million with an average
occupancy exceeding 98%. This cornerstone investment
was reduced to $8.0 million following year end. Eureka is
the manager of the Fund.
Completed and fully leased the $12.6 million, 51-unit
expansion of the Brassall, Qld village. Common area
facilities were also upgraded.
Acquired 14 higher yielding individual units in managed
villages for $1.5 million. Since FY23, the Group has made
51 individual unit acquisitions in key managed villages,
with the strategy continuing into FY25.
Acquired vacant land in Gladstone, Qld for the purpose
of greenfield development for $1.0 million plus GST. The
land is adjacent to an existing village which is managed by
Eureka.
Progressed planning for the proposed 124-unit Kingaroy
greenfield development.
Eureka has more than 2,800 owned and managed units in its portfolio which spans 52 villages across six
Australian states. Acquisitions and village expansion resulted in an 11% increase in the total number of
units during the year.
Key portfolio highlights for the year were:
Capital recycling remains part of the Group’s capital management and growth strategy. Assets will be recycled where they are non-core
or cease to meet target performance levels, risk appetite levels or efficiency metrics. The Group’s Whyalla and Mt Gambier villages are
currently for sale.
Investment Property Values ($m) at 30 June 24
QLD $161.1m
NSW $28.6m
VIC $19.0m
SA $33.2m
TAS $16.8m
(Joint Venture)
WA $14.9m
(32%)
$274m
Total
Portfolio snapshot at 30 June 2024
Total units
Occupancy
Capitalisation rate
2,835
98%
8.2%
Investment Property Values ($m)
20% growth in portfolio driven by WA Investment, Brassall development and revaluations
FY23
valuation
Aquisitions
and transfers
WA
Investment
Development
& capex
Net change
in fair value
FY24
valuation
229
3
15
13
14
274
2024 ANNUAL REPORT
vii
Operations
Eureka’s operational strategy continues to be
guided by our Five Pillar Operating Platform,
which reflects a steadfast commitment to
three key areas: our residents, our team, and
our assets. By maintaining strong oversight of
our risk and compliance obligations, we ensure
a well-rounded approach that balances the
well-being of our community with operational
excellence.
Our Resident First approach has been instrumental in driving
our operational success. It is the cornerstone of our ability to
attract and retain new residents and a key factor in recruiting
and retaining staff aligned with our core values.
During the year, a key priority was to enhance the resident
experience by expanding our activity program to provide a
diverse and engaging calendar of social events. Activities
targeting cognitive and physical stimulation is a core part of our
health and well-being strategy and contributes to extending
tenure of our residents.
A focus on team development cultivates a culture of service
excellence, enabling staff to deliver on the Resident First
philosophy.
Eureka’s commitment to creating a supportive environment for
both residents and employees enhances our village communities
and has resulted in an 83% intent-to-recommend score in the
internal Resident Pulse survey, reinforcing the strength of our
value proposition.
We continue to sustain high occupancy through organic local
networking efforts building natural connections within the
community by collaborating with local businesses and healthcare
providers, hosting seniors’ forums, and attending community
events. These efforts continue to create important relationships
that promote the business minimising the need for formal
advertising.
The brand repositioning also facilitates a connection, visibility and
consistency in service delivery for all stakeholders from investors
to residents and the communities we work in.
By fostering a strong safety culture through continuous education
and proactive risk management, we have ensured all operations
meet regulatory requirements, whilst robust monitoring and
reporting systems continue to identify and mitigate potential risks.
We prioritise regular audits and compliance checks, alongside
investing in staff training to uphold high safety standards and
maintain a risk-aware environment.
The implementation of improved technology and digital innovation
in FY25, coupled with the delivery of a change management
strategy to facilitate adoption of new processes & technologies,
will deliver operational efficiencies across procurement, asset
lifecycle management and financial oversight.
Operating Platform
Occupancy and
Revenue Initiatives
Team Culture and
Engagement
Safety, Risk
and Compliance
Technology
and Brand
Environmental, Social
and Governance
2024 ANNUAL REPORT
viii
Environmental, Social and
Governance (ESG)
Eureka is committed to creating sustainable,
socially responsible communities and value for
all stakeholders.
Eureka’s ESG framework and 4-year action plan was established to
guide a planned and responsible approach to the implementation
of environmental standards and social responsibilities. Eureka
has in place a well-developed governance framework.
The Board’s ESG Committee is overseeing the implementation of
the action plan. During the year a formal sustainability policy and
ESG materiality matrix have been developed. During the second
year of the action plan, Eureka will:
•
Expand the solar power installation program across the
portfolio targeting installations in at least 50% of villages
by the end of FY25.
•
Continue to upgrade energy services in communities and
units to improve energy efficiencies and consumption.
•
Increase recycled waste in villages, with a target of 40% of
volume of waste recycled by end of FY25.
•
Foster enhanced employee and resident well-being
through the implementation of the Human Rights Policy
adopted by Eureka.
•
Maintain strong representation in leadership roles in
accordance with Eureka’s Diversity, Equity and Inclusion
Policy.
•
Invest in employee training and development, prioritising
continuous learning and upskilling to drive growth and
performance across the organisation.
•
Reduce environmental risk across the portfolio through
continued upgrading of Eureka’s Resilience Plans.
Eureka’s ESG initiatives and focus areas are considered
to enhance social responsibility obligations, risk focused
management and environmental practices:
Environmental
Solar energy
Energy efficiency
Waste management and recycling
Build environment
Social
Resident engagement and well-being
Employee engagement and well-being
Governance
Ethical business practices
Risk mitigation systems
Safety and compliance
Eureka has set measurable targets for its key initiatives
and will also measure performance and impact against
recognised standards and frameworks.
2024 ANNUAL REPORT
ix
Corporate activity
During the second half of the year, the management of the
defence of the unsolicited, under-valued takeover offer launched
by Aspen Group Limited in January 2024 was a significant
strategic and operational distraction for Eureka.
A number of constraints were placed on Eureka whilst that offer
was in progress which meant that planned initiatives such as the
recruitment of a new Chief Executive Officer, asset acquisitions
and advancement of the systems technology implementation
Dividends
were placed on hold until the end of May 2024 when the offer
lapsed.
Significant Board and management time was also committed to
the assessment and response to the offer.
Recruitment of a Chief Executive Officer has now been completed
and the Board and management have recommenced actioning
those strategic initiatives.
Your Board is pleased to have declared and paid
unfranked dividends of 1.4 cents per share for
the year, an increase of 4% over the prior year.
The Dividend Reinvestment Plan (DRP) remained in operation
during the year as a capital management initiative to support our
ongoing investment in growth.
2024 ANNUAL REPORT
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FY25 Priorities
Eureka has a well progressed strategy to
drive growth and achieve institutional scale,
leveraging its existing resource base.
The growth plan encompasses multiple channels including:
•
organic growth
•
acquisition of operating villages
•
purchase of individual units in managed villages
•
brownfield opportunities to expand existing villages
•
greenfield developments
We will continue to pursue earnings accretive acquisitions and
deliver on development opportunities.
Capital management planning to support growth is fundamental
to Eureka achieving its strategic aim of institutional scale
which will generate improved returns and value enhancement
for shareholders. Access to capital will include traditional and
alternative funding sources, driven by growth opportunities and
market conditions.
While we are focused on securing scalability in a sustainable
way, we are mindful of our operating cost structure. The
implementation of preferred technology systems across the
business in the coming financial year is a key priority and will
underpin efficiency gains in the growth platform.
2024 ANNUAL REPORT
xi
Directors and Staff
As we look forward to FY25, the Board and
management team have been strengthened
by the appointments of Mr John Whiteman as
an Independent Non-Executive Director and
Mr Simon Owen as Chief Executive Officer in
September 2024.
As part of our growth strategy, the Board is committed to ensuring
the Board’s skill set, knowledge and experience is well-balanced
and John’s broad range of funds management experience will be
an asset to the Board and Eureka as the Company embarks on its
next stage of growth.
Simon is a highly experienced and respected leader with over
25 years’ experience in leading property and retirement living
businesses, including most recently 14 years as Chief Executive
Officer and Managing Director of Ingenia Communities Group
Limited.
Simon is well-known in Australia as a trusted, respected and
experienced retirement industry Chief Executive. The Board is
confident that he is the right person to lead our people and build
upon the growth that the business has achieved to date.
Following Simon’s appointment, I have transitioned from
executive duties to Non-Executive Chairman of Eureka from 12
September 2024.
On behalf of the Board, I welcome John and Simon and look
forward to working with them.
Eureka continues to have a cohesive board with knowledge and
experience covering property investment and management,
property funds management, finance, healthcare, organisational
development, commercial experience and corporate governance
including a comprehensive understanding of ESG principles and
application.
Eureka has a senior leadership group with the experience and
skills across real estate, finance, operations, people and culture
and business transformation that are engaged and empowered to
drive Eureka’s strategic growth plans. This group is aligned with
Eureka’s cultural values characterised by compassion, respect
and trust in the village and support office teams.
I would like to take this opportunity to thank my Board colleagues
for their support and contribution throughout the year.
On behalf of the Board, I thank the management team and all
our people for their commitment and achievements this year.
Attracting and retaining the best people is critical to Eureka’s
success. Investing in our people to support our future continues
to be a priority.
To our shareholders and other stakeholders your continued
support is respected and appreciated.
Murray Boyte
Chairman
2024 ANNUAL REPORT
xii
5 Year Growth Trends
2020
2021
2022
2023
2024
9.1
8.7
10.5
29.8
19.3
Profit Before Tax ($m)
2020
2021
2022
2023
2024
26.1
29.4
30.9
36.6
41.4
Revenue and Other Income ($m)
2020
2021
2022
2023
2024
1.10
1.18
1.26
1.34
1.40
Dividends (cents per share)
2020
2021
2022
2023
2024
7.6
7.8
8.3
8.7
8.1
Operating Cash Flows ($m)
9.1
8.7
10.5
29.8
19.3
2020
2021
2022
2023
2024
85.9
90.9
99.0
144.0
154.2
Net Assets ($m)
2020
2021
2022
2023
2024
8.7
10.6
10.5
12.6
15.2
Underlying EBITDA ($m)
35.1%
38.3%
35.3%
34.6%
36.9%
2024
Financial Report
2024 ANNUAL REPORT
2
Directors’ report
3
Remuneration report
11
Auditor’s independence declaration
21
Consolidated financial report
22
Directors’ declaration
85
Independent auditor’s report
86
Corporate governance statement
91
Shareholder information
92
Corporate directory
94
Contents
2024 ANNUAL REPORT
3
Directors’ report
Your directors present their report on the consolidated entity consisting of Eureka Group Holdings Limited and the entities it controlled at
the end of, or during, the year ended 30 June 2024 (the year). Throughout the report, the consolidated entity is referred to as the Group.
Directors
The following persons were directors of Eureka Group Holdings Limited during the whole of the financial year and up to the date of this
report:
Murray Boyte
Russell Banham
Sue Renkin
Greg Paramor
Principal activities
During the year the principal continuing activities of the Group consisted of:
Accommodation and services to independent senior residents, and
Specialist property management and caretaking services for seniors’ independent living communities.
Review of operations and financial review
The Group has reported a profit before tax for the period of $19.27 million (2023: $29.75 million) and a profit after tax of $13.21 million
(2023: $19.16 million). The profit after tax is lower than the prior year due to a lower level of property revaluations, an increase in finance
costs and costs of defending the Aspen Group Limited (Aspen) takeover bid. Although lower than the prior year, the revaluations reflect
continued improvement in maintainable earnings while capitalisation rates remained stable.
Underlying EBITDA1 increased by 20.5% to $15.20 million (2023: $12.61 million) while underlying profit before tax increased by 13.2%
to $9.11 million (2023: $8.05 million). Underlying earnings per share1 was 3.02 cents (2023: 2.93 cents).
Growth in the Group’s revenue and underlying results reflects organic growth in existing villages, the impact of current and prior period
acquisitions and developments and improved maintainable earnings.
Occupancy remained stable across the portfolio and was 98% at balance date (30 June 2023: 99%). Strategies to increase village
revenue, while maintaining affordability for residents, have contributed to the organic revenue growth experienced during the period. The
Group achieved a $14.08 million net gain on change in the fair value of the Group’s investment properties, including those of the
Tasmanian assets which are owned in a joint venture (2023: $25.28 million). Improvement in maintainable earnings and the completion
of the 51-unit expansion of the village in Brassall, Qld were key drivers of the increase. The weighted average capitalisation rate at
balance date was 8.17% (30 June 2023: 8.32%).
The Group invested $9.00 million in the Eureka Villages WA Fund (the Fund) during the year which acquired a portfolio of six rental
villages in Western Australia (WA) for $44.00 million (excluding transaction costs) in December 2023. Eureka is the manager of the Fund.
The Group’s investment has reduced to $7.98 million post balance date.
At balance date, Eureka owned 33 villages (30 June 2023: 33), of which 5 are held in a joint venture. It also has 19 villages under
management including the 6 in the Fund (30 June 2023: 13). Total units at balance date were 2,835 (30 June 2023: 2,551 units).
The Group is committed to growth through asset acquisition and development opportunities. Costs of defending the takeover bid by
Aspen were $2.10 million during the year. During the year, the Group progressed its technology improvement project.
The management of the defence of the unsolicited, under-valued takeover offer launched by Aspen in January 2024 was a significant
strategic and operational distraction for Eureka during the second half of the year. A number of constraints were placed on Eureka whilst
that offer was in progress which meant that planned initiatives such as the recruitment of a new Chief Executive Officer, asset acquisitions
and advancement of the systems technology implementation were placed on hold until the end of May 2024 when the offer lapsed. There
was significant Board and management time committed to the assessment and response to the offer as shown, for example, by the large
number of Board meetings held during the year. The directors have now recommenced actioning those strategic initiatives.
The Group’s statutory tax rate is 25% (2023: 25%). Deferred tax balances have been stated at 30% (30 June 2023: 30%), resulting in an
effective tax rate of 31% for the year (2023: 36%). No cash income tax will be payable until the Group has utilised its carry forward
revenue tax losses.
Net operating cash flow for the year was $8.14 million (2023: $8.71 million). Interest payments were $1.72 million higher than the prior
year.
Directors’ report
2024 ANNUAL REPORT
4
A summary of the Group’s performance and reconciliation to the Group’s Underlying EBITDA1 is shown below:
2024
2023
$’000
$’000
Performance summary
Profit before tax
19,267
29,751
Profit after tax
13,207
19,158
Basic earnings per share (cents)
4.37
6.97
Diluted earnings per share (cents)
4.36
6.95
Underlying EBITDA1 reconciliation
Profit after tax
13,207
19,158
Income tax expense
6,060
10,593
Depreciation and amortisation
695
846
Finance costs
5,114
3,720
EBITDA 1
25,076
34,317
Net gain on change in fair value of:
Investment properties
(12,978)
(22,051)
Investment properties held in equity accounted investments
(1,100)
(3,233)
Impairment of:
Financial assets
-
146
Other assets
564
1,756
(Profit)/loss on sale of assets
(180)
46
11,382
10,981
Costs to defend Aspen takeover bid
2,102
-
Transaction costs including acquisitions, disposals and asset realisations
754
515
Strategic projects including technology and capital funding
685
895
Other
274
223
Underlying EBITDA 1
15,197
12,614
Underlying profit before tax 2
9,114
8,049
Underlying earnings per share 3 (cents)
3.02
2.93
1.
EBITDA (Earnings before interest, tax, depreciation, and amortisation) is an unaudited non-IFRS measure. The Directors believe it is a readily
calculated measure that has broad acceptance and is referred to by regular users of published financial statements as a proxy for overall
operating performance. EBITDA is calculated from amounts disclosed in the financial statements.
Underlying EBITDA is an unaudited non-IFRS measure that represents the operating performance of the Group and excludes valuation
adjustments, asset disposals and certain non-core or non-recurring transactions.
2.
Underlying profit before tax is an unaudited non-IFRS measure and equals Underlying EBITDA less finance costs, depreciation and
amortisation.
3.
Underlying profit before tax divided by weighted number of shares on issue.
Directors’ report
2024 ANNUAL REPORT
5
Financial position
Summary information in relation to the Group’s financial position is shown below:
2024
2023
Total assets ($’000)
275,230
237,412
Net assets ($’000)
154,241
143,956
Cash and cash equivalents ($’000)
2,257
1,815
Debt – bank loan ($’000)
91,331
69,724
Shares on issue (‘000)
303,859
301,063
Net tangible assets per share (cents)
48.3
45.0
Balance sheet gearing 1 (%)
36.6
32.1
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 disclosed below.
Acquisitions and asset management
During the year, the Group made the following investment property acquisitions:
14 additional units in its managed strata-titled villages in Qld for a consideration of $1.49 million, and
Vacant land in Gladstone, Qld for consideration of $1.00 million plus GST. This site has been acquired for the purpose of
greenfield development and adjoins the existing Gladstone village which is managed by Eureka.
The Group spent $9.47 million on village developments including:
the 51-unit Brassall, Qld expansion ($8.72 million), and
planning for the proposed 124-unit Kingaroy greenfield development ($0.74 million).
Brassall development
Construction commenced in February 2023 on a 51-unit development at Brassall, Qld. The development was completed across four
stages during the year. All new units have been fully leased since their completion. In addition to developing the new units, Eureka’s
investment in the upgrade of the common area facilities was completed in May 2024.
Kingaroy development
The site was acquired in October 2021 with an existing development approval for a 40-unit village. The Group has incurred the costs of
obtaining a development approval for a 124-unit village and preliminary costs associated with the planned construction of the village.
Other village capital improvements
A further $3.47 million was spent on enhancing owned villages through capital improvements.
Investment in Eureka Villages WA Fund
During the year, Eureka invested $9.00 million in a new Eureka-managed wholesale property fund, Eureka Villages WA Fund (the Fund),
which is an unlisted and unregistered fund. The Fund was established for the purpose of owning and operating a portfolio of six seniors’
rental villages in Western Australia. These villages were acquired in December 2023 for a purchase price of $44.00 million excluding
transaction costs with an average occupancy exceeding 98%. At balance date, the Group’s investment represents 31.61% of the
securities issued in the Fund.
There were no other significant acquisitions made during the year.
Disposals
Capital recycling remains part of 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.
At balance date, the Group has classified its Whyalla and Mt Gambier villages as held for sale. An expression of interest campaign has
been completed and disposal of the assets is expected in the 2025 financial year.
During the year, the Group sold the community centre at its managed village in Caboolture, Qld to the body corporate of that village for
$0.45 million. The Group realised a gain on sale of $0.18 million. Consideration comprised $0.07 million in cash and the Company has
entered into an 8-year loan agreement with the body corporate for payment of the balance of the purchase price. Contemporaneously
with the sale, the Group negotiated a 25-year extension of the caretaking and letting agreement for the village.
Directors’ report
2024 ANNUAL REPORT
6
There were no other significant disposals made during the period.
Capital management – debt & equity
Debt
During the year, the Group’s National Australia Bank (NAB) facilities increased to $101.00 million (2023: $83.00 million) to fund the $9.00
million investment in the Eureka Villages WA Fund and working capital requirements. The Group was in compliance with all banking
covenants during the year. Under the terms of its NAB debt facility, Eureka can deposit and withdraw funds in accordance with its working
capital needs, subject to satisfaction of the bank covenants.
At balance date, the drawn amount under the facility was $91.33 million (2023: $69.72 million) with 55% of the debt being hedged using
interest rate swaps (2023: 72%). The core facility of $96.00 million expires on 31 March 2026. A $5.00 million facility expires on 31 October
2025.
Equity
The equity movements and balances for the year are as follows:
Dividends of $4.13 million (2023: $3.51 million) were paid, comprising:
-
cash dividends of $2.73 million (2023: $2.60 million), and
-
shares issued to existing shareholders pursuant to the Dividend Reinvestment Plan (DRP) of $1.40 million (2023: $0.91
million), resulting in 2,796,000 shares being issued, and
226,830 share rights lapsed during the year following the resignation Mr Cameron Taylor, the Group’s former Chief Executive
Officer. Mr Taylor resigned effective 17 July 2023 following a period of personal leave due to a non-work-related accident.
Executive Chairman, Mr Murray Boyte, has been the interim Chief Executive Officer (CEO) during the year.
Dividends
Dividends paid during the year were as follows:
2024
2023
$’000
$’000
Final dividend for the year ended 30 June 2023 of 0.67 cents
(2022: 0.63 cents) per fully paid share
2,018
1,496
Interim dividend for the year ended 30 June 2024 of 0.70 cents
(2023: 0.67 cents) per fully paid share
2,112
2,014
Total paid during the year
4,130
3,510
Subsequent to balance date, the Company has declared a final dividend for the year of 0.7 cents per share, amounting to $2.13 million,
to be paid on 14 October 2024. The record date is 23 September 2024. 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 2024 and will be recognised in
subsequent financial reports.
Sustainability statement
The Company is committed to delivering sustainable, socially responsible communities that benefit our residents, employees and the
environment. We envision seniors’ living spaces that are comfortable, secure, environmentally conscious and socially inclusive.
Sustainability can be achieved through integration of green practices such as reducing waste, conserving water and increasing energy
efficiency, while ensuring that we use eco-friendly materials in our facilities. Sustainability extends beyond environmental stewardship
and encompasses social responsibilities. This means creating a positive impact on the lives of our residents, supporting our staff and
engaging with the broader community.
We endeavour to foster an inclusive culture that empowers everyone in our community to make choices that support both their well-being
and the environment. Through resourceful solutions and strong partnerships, we aim to lead the seniors’ living industry in providing
homes within a community that lives in harmony with the environment and upholds the highest standards of social responsibility.
Directors’ report
2024 ANNUAL REPORT
7
Likely developments and expected results
Eureka is committed to:
Implementing its environmental, social and governance framework. The Company’s Environmental, Social & Governance (ESG)
Committee 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
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
development of the Group’s greenfield sites in Kingaroy, Qld and Gladstone, Qld
Improving the performance of the existing portfolio with continued focus on maintaining and improving occupancy through the
ongoing strengthening of our relationships within our communities
Implementing operational efficiencies, cost reduction and streamlined support services through process and systems
improvements across our villages and support office, and
Recycling of capital through the divestment of the Group’s non-core assets and active portfolio management including the
disposal of assets which may cease to meet target performance levels, risk appetite levels or efficiency metrics.
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the Group, other than those addressed in the Directors’ Report.
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:
Business strategy risk – Eureka’s business strategy is focused on growing its portfolio through earnings accretive acquisitions
and identified development opportunities in high demand regional markets. A key element to this strategy is ensuring ongoing
capital recycling and strong capital management planning. Eureka’s future growth is dependent on the successful execution of
this strategy. Any change or impediment to implementing this strategy may adversely impact on Eureka’s operations and future
financial performance.
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 and integrating properties and conducts comprehensive
analysis and due diligence as part of its acquisition process.
Interest rate risk – interest rate changes may have a material impact on profitability. The Group mitigates this risk through its
capital management plan and interest rate hedging.
Cyber risk – the Group recognises the importance of cyber security in safeguarding digital assets, systems, and information
from unauthorised access or disruption. The Group mitigates this risk through various security measures and a contingency
Cyber Security Incident Response Plan for business continuity.
Changes in Government legislation or 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 legislation or
funding may have a direct impact on village occupancy, profitability and asset values. The Group manages its village costs
having regard to revenue and occupancy levels.
Environmental and insurance risk – Eureka’s properties are subject to environmental risks including loss of property and profits
due to bushfires, floods, cyclones, erosion of waterways and other events. These risks and potential losses may increase in
future as the climate continues to change. Eureka carries insurance for some of these events, however insurance may not cover
all or any of the losses incurred, insurance may prove increasingly difficult to obtain or the cost may become prohibitive.
Asset valuation risk - Assets are assessed for changes in fair value or impairment (as required) whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. Factors affecting property valuations include
capitalisation and discount rates, occupancy and costs, the economic growth outlook, land resumptions and releases and major
infrastructure projects.
Operational risk - Routine village operations require Eureka to manage risks related to maintenance of a safe environment
including property condition, food service, building compliance and resident well-being. Compliance and management systems,
including third party inspections where appropriate, have been established to manage these risks.
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.
Directors’ report
2024 ANNUAL REPORT
8
Events since the end of the financial year
Subsequent to balance date, the following significant transactions have occurred:
Dividend – the Company declared a final dividend in respect of the year of 0.70 cents per share, payable on 14 October 2024
amounting to $2.13 million. The record date is 23 September 2024. The Group’s dividend reinvestment plan is effective for this
dividend.
Appointment of new Chief Executive Officer - On 15 August 2024, the Company announced that Mr Simon Owen has been
appointed to commence in the role of Chief Executive Officer of Eureka Group Holdings Limited on 12 September 2024.
Board changes - Mr Murray Boyte will transition from executive duties to Non-executive Chairman from 12 September 2024. Mr
John Whiteman will commence as an Independent Non-Executive Director from 2 September 2024.
There were no other significant events since the end of the financial year for the Group, other than those addressed in the Directors’
Report.
Directors’ report
2024 ANNUAL REPORT
9
Information on directors
The following information is current as at the date of this report.
Murray Boyte BCA, MAICD, CMInstD, CA - Executive Chair and Interim CEO
Qualifications
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.
Experience and expertise
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.
Other current directorships
National Tyre & Wheel Limited (ASX: NTD), Hillgrove Resources Ltd (ASX: HGO) and
Eumundi Group Ltd (ASX: EBG).
Former directorships in last 3 years
Abano Healthcare Group Limited (NZX)
Special responsibilities
Chair of the Board, Member of the Audit & Risk Committee, Member of the Nomination &
Remuneration Committee, Member of the Environmental, Social & Governance
Committee.
Interests in shares and options
1,204,180 ordinary shares – Eureka Group Holdings Limited
Sue Renkin RN, MBA, FCDA, Grad Dip Corp Gov, MAICD – Non-executive
Qualifications
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.
Experience and expertise
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 Businesswoman of the year.
Other current directorships
Nil
Former directorships in last 3 years
Nil
Special responsibilities
Chair of the Nomination & Remuneration Committee, Member of the Environmental, Social
& Governance Committee
Interests in shares and options
Nil
Russell Banham, B Com, GAICD, FCA – Non-executive
Qualifications
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.
Experience and expertise
Russell is an experienced company director with a demonstrated history of working in
Various industries including mining & metals, property development and management,
manufacturing and gaming and hospitality. He is skilled in financial management, risk
management and corporate governance. He was an audit partner and had functional
leadership responsibilities at Deloitte, Ernst & Young and Andersen. Russell is an
independent non-executive director of HKSE listed MGM China Holdings Limited and, until
May 2023, of LSE listed National Atomic Company Kazatomprom. He is also a member of
the Audit and Risk Management Committee of the Queensland Audit Office.
Other current directorships
MGM China Holdings Limited (HKSE)
Former directorships in last 3 years
Nil
Special responsibilities
Chair of Audit & Risk Committee, Member of the Nomination & Remuneration Committee,
Member of the Environmental, Social & Governance Committee.
Interests in shares and options
Nil
Directors’ report
2024 ANNUAL REPORT
10
Greg Paramor, AO, FAPI, FAICD, FRICS – Non-executive
Experience and expertise
Greg has extensive property expertise with more than 50 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 current directorships
Charter Hall Group Ltd (ASX: CHC).
Former directorships in last 3 years
Nil
Special responsibilities
Member of Audit & Risk Committee, Chair of the Environmental, Social & Governance
Committee
Interests in shares and options
5,748,657 ordinary shares – Eureka Group Holdings Limited
Joint company secretaries
Mrs Laura Fanning B Bus, CA, FCG (CS, CGP)
Ms Fanning is a Chartered Accountant and Fellow of the Governance Institute of Australia with more than 25 years’ financial, governance
and commercial experience and was appointed to the position of company secretary in 2018. Ms Fanning is Eureka’s Chief Financial
Officer and was previously the company secretary at National Tyre and 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 property
funds management, veterinary services, wholesale distribution and franchising.
Ms Stephanie So BCom, LLB, GradDipCA, FGIA
Ms So was appointed to the position of company secretary in June 2024. Ms So has over 13 years of governance experience working
with private, public and listed companies across a number of industries, and has significant expertise in company secretarial, board and
corporate governance matters. Stephanie was previously a principal listings adviser at the ASX where she had extensive involvement in
the oversight of listed entities and specialised in ASX Listing Rules compliance including policy and development, initial public offerings,
capital raisings and other corporate transactions. Ms So is dual qualified in law and commerce and is a Fellow of the Governance Institute
of Australia.
Meetings of directors
The numbers of meetings of the company’s board of directors and of each board committee held during the year ended 30 June 2024,
and the numbers of meetings attended by each director were:
Full meetings
of directors
Meetings of committees
Audit & Risk
Committee
Meetings
Nomination &
Remuneration
Committee Meetings
Environmental, Social
& Governance
Committee Meetings
Name
A
B
A
B
A
B
A
B
Murray Boyte
31
32
4
4
3
3
2
2
Sue Renkin
32
32
4
4*
3
3
2
2
Russell Banham
32
32
4
4
3
3
2
2
Greg Paramor
30
32
3
4
3
3*
2
2
A = Number of meetings attended
B = Number of meetings held during the time the director held office or was a member of the committee during the year
* Attended by invitation. All directors have a standing invitation to attend Committee meetings, even when they are not a member
Directors’ report
2024 ANNUAL REPORT
11
Remuneration report (Audited)
The Directors present the Eureka Group Holdings Limited remuneration report, outlining key aspects of the Company’s remuneration
policy and framework, and remuneration awarded this year.
The report is structured as follows:
Section Contents
Page
(a)
Key management personnel (KMP) covered in this report
11
(b)
Remuneration policy and link to performance
11
(c)
Elements of remuneration
12
(d)
Link between remuneration and performance
14
(e)
Remuneration expenses for executive KMP
16
(f)
Contractual arrangements with executive KMP
17
(g)
Non-executive director arrangements
17
(h)
Additional statutory information
18
(a) Key management personnel covered in this report
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.
Non-executive and executive Directors (see pages 9 to 10 for details about each Director)
Murray Boyte – Executive Chair and Interim Chief Executive Officer
Sue Renkin
Russell Banham
Greg Paramor, AO
Other key management personnel
Name
Position
Cameron Taylor
Chief Executive Officer 1
Laura Fanning
Chief Financial Officer and Joint Company Secretary
1.
Cameron Taylor resigned from the position of Chief Executive Officer on 17 July 2023.
(b) Remuneration policy and link to performance
The Nomination and Remuneration committee reviews and determines remuneration policy and structure annually to ensure it remains
aligned to business needs and meets market-based remuneration principles. In particular, the Board aims to ensure that remuneration
practices are:
•
competitive and reasonable, enabling the Company to attract and retain key talent
•
aligned to the company’s strategic and business objectives and the creation of shareholder value
•
transparent and easily understood, and
•
acceptable to shareholders.
The Remuneration Framework in place during the year is shown in Figure 1.
Remuneration report
2024 ANNUAL REPORT
12
Figure 1: Remuneration framework
Element
Purpose
Performance metrics
Potential
value
Changes for
FY24
Fixed remuneration
(FR)
Provide competitive market salary
including superannuation and non-
monetary benefits
Nil
Positioned at
median market
rate
No changes
Short term incentive
(STI)
Reward for in-year performance
Financial Performance
Budgeted underlying EBITDA:
30%
Non-financial performance: 70%
1.
Operational performance
2.
Strategic initiatives
3.
Workplace health and safety
4.
Risk mitigation and
management
CFO:
30% of TFR
No changes
Long term incentive
(LTI)
Alignment to long-term
shareholder value
3-year total shareholder return
(TSR) compound annual growth
rate
CFO:
30% of TFR
Increased
percentage of
TFR
Balancing short-term and long-term performance
Annual incentives are set to drive annual performance without encouraging undue risk-taking.
Long-term incentives are assessed over a three-year period and are designed to promote retention of key staff as well as alignment
with shareholders’ interests.
The remuneration mix for the year includes:
•
Short-term incentives (STI) opportunity for the current year that will be available if the performance conditions are satisfied,
and
•
the value of the Long-Term Incentive Program (LTIP) rights granted during the year.
Assessing performance and claw-back of remuneration
The Nomination & Remuneration Committee is responsible for assessing performance against key performance indicators and
determining the STI and LTI to be paid. To assist in this assessment, the Committee receives detailed reports on performance from
management which are based on independently verifiable data such as financial measures and data from surveys.
(c) Elements of remuneration
(i) Total fixed remuneration (TFR)
Executives may receive their fixed remuneration as:
•
cash, or
•
cash with non-monetary benefits such as car allowances, motor vehicle and car parking benefits.
TFR is reviewed annually, or on promotion. It is benchmarked against market data for comparable roles in companies in a similar industry
and with similar market capitalisation. The Nomination & Remuneration Committee aims to position executives at or near the median,
with flexibility to take into account capability, experience, value to the organisation and performance of the individual.
For all the executives, superannuation is included in TFR.
Remuneration report
2024 ANNUAL REPORT
13
(ii) Short-term incentives
Figure 2: Structure of the FY24 STI plan
Feature
Description
Max opportunity
CFO: 30% of Total fixed remuneration
Structure
30% of the STI is linked to the achievement of the budgeted Underlying EBITDA financial hurdle (2023: 30%)
70% of the STI is linked to the achievement of non-financial performance objectives (2023: 70%)
Performance
metrics
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.
Metric Weighting Reason for selection
Company financial
performance
30% Reflects improvements in both revenue and cost control.
Financial gateway
1. Performance
against budgeted
underlying EBITDA
Non-financial
performance
1.
Operational
performance
2.
Strategic initiatives
3.
Workplace health
and safety
4.
Risk mitigation and
management
70% Reflects improvements which will support Eureka’s growth strategies.
Supports culture and values. Ensures focus on key strategic and
operational initiatives.
Delivery of STI
If eligible, 100% of the STI award is paid in cash after the end of the financial year.
Board discretion
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.
The Board has discretion to adjust remuneration outcomes up or down to prevent any inappropriate reward
outcomes, including reducing (down to zero if appropriate) any STI award.
Remuneration report
2024 ANNUAL REPORT
14
(iii) Long-term incentives
During the year, executive KMP participated in the LTIP which included the grant of share rights which are subject to a 3-year service
condition and target total shareholder return. Further detail is shown in figure 3 below:
Figure 3: Structure of the FY24 LTIP
(d) Link between remuneration and performance
Current year performance and impact on remuneration
During the year, management delivered an underlying EBITDA result in line with the budgeted underlying EBITDA. As the financial
gateway was met, the Board determined to award executive KMP 62% of the maximum short-term incentives.
Feature
Description
Opportunity/
Allocation
CFO: 30% of total fixed remuneration (excluding superannuation). The opportunity is divided by a Board-
determined volume weighted average price (VWAP) of shares to determine the number of instruments.
Performance
hurdle – TSR
CAGR
(100% weighting)
Total shareholder return (TSR) compound annual growth rate (CAGR) is assessed over 3 years to 30
September 2026.
This is designed to focus executives on delivering sustainable long-term shareholder returns.
TSR CAGR Proportion to vest
Less than 7%
0%
Between 7%
& 10%
50%
Pro rate vesting occurs
between 10% and 15%
70% to 100% on a straight-line basis
At or above 15%
100%
Service
condition
The employee must remain employed by the Group from the Grant Date to the Vesting Date.
Vesting
Rights are granted under the plan for no consideration. When vested, each right converts into one ordinary
share and carry no dividend or voting rights. The number of rights granted is based on the VWAP at which
the Company’s shares are traded on the ASX on 5 days after the release of the Company’s Financial Report
in the financial year to which they relate.
Forfeiture and
termination
Rights will lapse if performance conditions are not met. Rights will be forfeited on cessation of employment
unless the board determines otherwise, e.g. in the case of retirement due to injury, disability, death or
redundancy.
Board discretion
The Board retains discretion to relax the performance measures if warranted by relevant circumstances at the
time of vesting. The Board may also cancel some or all individual share rights on the basis they constitute an
inappropriate benefit to the KMP due to any unacceptable conduct, including fraud or dishonesty of acting in
manner which brings the Group into disrepute.
Remuneration report
2024 ANNUAL REPORT
15
Statutory performance indicators
The Company aims to align executive remuneration to strategic and business objectives and the creation of shareholder wealth. 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 EBITDA and therefore earnings per share. The LTI program
is weighted towards total shareholder returns.
Figure 5 below shows measures of the Group’s financial performance over the last five years as required by the Corporations Act 2001.
There has been steady growth across earnings-based metrics and dividends across the period. Sustainable share price growth remains
a focus for the Board and management.
Figure 4: Statutory key performance indicators of the Group over the last five years
Metric
Measure
2024
2023
2022
2021
2020
Total revenue and other income 1
$’000
41,354
36,564
30,882
29,434
26,068
Underlying EBITDA 1
$’000
15,197
12,614
10,620
10,569
8,700
Profit before tax
$’000
19,267
29,751
10,483
7,742
9,075
Profit after tax
$’000
13,207
19,158
8,173
6,283
8,095
Basic earnings per share
cents
4.37
6.97
3.48
2.73
3.52
Dividend paid per share
cents
1.37
1.30
1.22
1.14
1.55
Share price at year end
cents
53.5
46.5
61.0
61.0
32.5
Total shareholder return – 1 year
% of share price at
start of year
+18.0
-21.6
+2.0
+91.2
+31.0
Total shareholder return – 3 year
% per annum
-2.0
+15.6
+35.7
+31.5
-2.7
KMP remuneration
$’000
1,482
1,520
1,320
1,446
1,201
KMP remuneration
% of total revenue
and other income
3.6
4.2
4.3
4.9
4.6
1 Refer to page 4 for the definition of Underlying EBITDA. Prior to 2021, EBITDA from core operations was the term used to describe Underlying EBITDA
Remuneration report
2024 ANNUAL REPORT
16
(e) Remuneration expenses for executive KMP
The following table shows details of the remuneration expense recognised for the group’s executive key management personnel for the
current and previous financial year measured in accordance with the requirements of the accounting standards.
Figure 5: Executive remuneration
Fixed remuneration
Other
Variable remuneration
Name
Salary
(1)
Annual
and long
service
leave
(2)
Post-
employment
benefits
STI
Share rights
granted
(3)
Total
Performance
related
(%)
Executive Director
Murray Boyte 4
2024
313,415
-
27,500
195,000
-
-
535,915
-
2023
322,598
-
25,292
-
-
347,890
-
Other KMP (group)
Laura Fanning
2024
320,000
6,911
27,500
-
65,000
25,187
444,598
20%
2023
250,708
-
25,292
-
60,000
18,798
354,798
22%
Cameron Taylor 5
2024
18,380
-
6,850
194,170
-
-
219,400
-
2023
349,708
-
25,292
-
115,000
46,509
536,509
-
Total executive director
and other KMPs
2024
651,795
6,911
61,850
389,170
65,000
25,187
1,199,913
2023
923,014
-
75,876
-
175,000
65,307
1,239,197
Total NED remuneration
(see Figure 7 below)
2024
254,299
-
27,972
-
-
-
282,271
-
2023
254,299
-
26,701
-
-
-
281,000
-
Total KMP remuneration
expensed
2024
906,094
6,911
89,822
389,170
65,000
25,187
1,482,184
2023
1,177,313
-
102,577
-
175,000
65,307
1,520,197
(1) Short-term benefits as per Corporations Regulation 2M3.03 (1) Item 6
(2) Other long-term benefits as per Corporations Regulation 2M.3.03(1) Item 16.8. The amounts disclosed in this column represent the increase in the
associated provisions.
(3) Share rights granted under the LTIP are expensed over the performance period, which includes the year to which the rights relate.
(4) Murray Boyte’s fixed remuneration includes his chairman’s fee of $121,096 per annum (2023: $121,096) and an additional $226,246 per annum for
the period he is Executive Chair (2023: $226,246). He also earned additional director’s fees of $195,000 relating to key transactions including
defence of the Aspen takeover bid and the establishment of the Eureka Villages WA Fund which will be paid in cash in FY25. Mr Boyte assumed
the duties of the Chief Executive Officer on 24 May 2023 while Mr Taylor was on medical leave. He has continued in this role following Mr Taylor’s
resignation on 17 July 2023.
(5) Mr Taylor was on medical leave from 24 May 2023 until his resignation on 17 July 2023. He received a gross payment in July 2023 of $219,400
comprising salary of $18,380, superannuation of $6,850 and termination benefits of $194,170 including unused leave entitlements, payment in lieu
of notice and extended personal leave.
Remuneration report
2024 ANNUAL REPORT
17
(f) Contractual arrangements with executive KMP
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 for the year are as follows:
Murray Boyte
Executive Chair and Interim CEO
Term
As required by the Board
Details
In addition to the director’s fees payable for his Chairman role, 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. Mr Boyte assumed the duties of the Chief Executive Officer on 24 May 2023. Mr
Boyte did not participate in the STI or LTI programs during the year.
Cameron Taylor Chief Executive Officer
Commencement
1 July 2021 until 17 July 2023
Term
The agreement has no fixed term and may be terminated by either the Company or Mr Taylor with 2 months’ notice
or without notice by the Company in the event of a material breach or misconduct by Mr Taylor.
Details
Mr Taylor’s remuneration as Chief Executive Officer included total fixed remuneration (TFR) of $375,000, 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 TFR 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. Mr Taylor was
responsible for management of the Group’s operations and reported to the Executive Chairman. Mr Taylor was on
medical leave from 24 May 2023 until his resignation on 17 July 2023.
Laura Fanning Chief Financial Officer and Company Secretary
Commencement
1 December 2020
Term
The agreement has no fixed term and may be terminated by either the Company or Ms Fanning with 2 months’ notice
or without notice by the Company in the event of a material breach or misconduct by Ms Fanning.
Details:
Ms Fanning’s remuneration includes a TFR of $347,500, 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 30% of her TFR and long-term incentives of up to 30% of her TFR in the form of share rights,
as determined by the Board from time to time. 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.
(g) Non-executive Director arrangements
Non-executive Directors receive a board fee only, see table below. They do not receive performance-based pay or retirement allowances.
The fees are inclusive of superannuation. The Chairman does not receive additional fees for participating in or chairing committees.
Fees are reviewed annually by the Board taking into account comparable roles. The current base fees were reviewed with effect from
1 July 2023. A Director may also be remunerated for additional or special duties undertaken.
The maximum annual aggregate directors’ fee pool limit is $600,000 and was approved by shareholders at the 2021 annual general
meeting on 5 November 2021.
2024
$
2023
$
Base fees (including superannuation)
Chairman
121,096
121,096
Other non-executive directors
81,407
81,000
Additional fees
Audit and Risk Committee - Chair
20,000
20,000
Remuneration and Nomination Committee - Chair
9,000
9,000
Environmental, Social and Governance Committee - Chair
9,000
9,000
Annualised Board and Committee fees
403,317
402,096
There are no additional fees payable for being a member of a Board committee.
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.
Directors may also be reimbursed for travelling and other expenses incurred in connection with their Company duties.
Remuneration report
2024 ANNUAL REPORT
18
Figure 6: Non-executive Director remuneration
Name
Year
Base
fee
$
Super-
annuation
$
Total
$
Russell Banham
2024
91,403
10,054
101,457
2023
91,403
9,597
101,000
Sue Renkin
2024
81,448
8,959
90,407
2023
81,448
8,552
90,000
Greg Paramor
2024
81,448
8,959
90,407
2023
81,448
8,552
90,000
Total non-executive director remuneration
2024
254,299
27,972
282,271
2023
254,299
26,701
281,000
(h) Additional statutory information
(i) Performance based remuneration granted and forfeited during the year
Figure 7 shows for each KMP how much of their STI cash bonus was awarded and how much was forfeited. It also shows the value of
share rights that were granted, vested and forfeited during FY 2024. The number of rights and percentages vested/forfeited for each
grant are disclosed in section (iii) on page 17 below.
Figure 7: Performance based remuneration granted and forfeited during the year
(1) STI awarded in FY24 and to be paid in FY25.
(ii) Share rights held
Figure 8: Share rights
The table below shows a reconciliation of unvested rights held by each KMP during the year. There were no vested rights at the
beginning or during the year.
1. The maximum value of the deferred shares yet to vest has been determined as the amount of the grant date fair value of the rights that is yet to be
expensed.
Total STI bonus (cash)
LTI Share Rights
Total
opportunity
$
Awarded (1)
%
Forfeited
%
FY24
Granted
$
Laura Fanning
104,220
62%
38%
36,274
2024
Name and
Grant dates
Balance
1 July 2023
Number
Granted
during year
Number
Vested
Number
%
Forfeited
Number
%
Balance
30 June 2024
Number
Maximum
value yet to
vest (1)
Laura Fanning
4 May 2022
126,953
-
-
-
-
-
126,953
4,438
8 January 2024
-
213,001
-
-
-
-
213,001
29,937
Cameron Taylor
4 May 2022
226,830
-
-
-
(226,830) 100
-
Total
353,783
213,001
-
-
(226,830)
339,954
34,975
Remuneration report
2024 ANNUAL REPORT
19
The terms and conditions of each grant of share rights affecting remuneration in the current or a future reporting period are as follows:
Grant date
Number
Vesting and
exercise date
Expiry date
Value per
right at grant
date
Exercise price
$
%
vested
4 May 2022
126,953
30 Sep 2024
30 Sep 2026
$0.357
-
n/a
8 Jan 2024
213,001
30 Sep 2026
30 Sep 2028
$0.170
-
n/a
See page 13 for the conditions that must be satisfied for the rights to vest. When vested, each right is convertible into one ordinary share
of Eureka Group Holdings Limited.
(iii) Shares held
. Figure 9: Shareholdings
1.
Mr Taylor’s shareholdings were removed as a result of his resignation in July 2023 when he ceased to be KMP.
(iv) Loans given to KMP
There were no loans given to any KMP during the year.
(v) Other transactions with KMP
A director, Mr Greg Paramor is a director and shareholder of Leftfield Investments Pty Ltd (Leftfield). During the year, the Group entered
into an Authorised Representative Agreement with Leftfield. The fee payable to Leftfield by the Group is $60,000 per annum. Leftfield is
also the trustee of the Eureka Villages WA Fund, in which the Group has a 31.61% interest at 30 June 2024 (30 June 2023: nil). Leftfield
is entitled to trustee fees of $30,000 per annum from the Fund, which comprises two stapled trusts. The agreement was based on normal
commercial terms and conditions.
(vi) Reliance on external remuneration consultants
The Group utilised the services of remuneration consultants during the year at a total cost of $7,600 (2023: $nil).
(vii) Voting of shareholders at last year’s annual general meeting
Eureka Group Holdings Limited received 99.98% of “yes” votes on its remuneration report for the 2023 financial year. The company did
not receive any specific feedback at the AGM or throughout the year on its remuneration practices.
END OF REMUNERATION REPORT
2024
Name
Balance
1 July 2023
Acquired during
the year
Other change
during the year
Balance
30 June 2024
Ordinary shares
Murray Boyte
1,186,497
17,683
-
1,204,180
Sue Renkin
-
-
-
-
Russell Banham
-
-
-
-
Greg Paramor
5,674,002
74,655
-
5,748,657
Laura Fanning
-
-
-
-
Cameron Taylor
429,362
-
(429,362) 1
-
Total
7,289,861
92,338
(429,362)
6,952,837
Remuneration report
2024 ANNUAL REPORT
20
Shares under option and share rights
There were 712,706 share rights on issue as at the date of this report.
Insurance of officers and indemnities
(a) 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 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.
(b) Indemnity 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 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 to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the
Company for all or part of those proceedings. The Company was not a party to any such proceedings during the year.
Audit and non-audit services
Details of the amounts paid or payable to the auditor (Ernst and Young Australia) for audit and non-audit services during the year are
disclosed in note 18 Remuneration of auditors.
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise
and experience with the Company and/or the Group are important.
The board of directors, in accordance with advice provided by the audit committee, reviews the provision of non-audit services to ensure
they are compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
Ernst & Young did not provide any non-audit services during the current or prior years.
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 21.
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 ASIC2016/191
The company is of a kind referred to in ASIC Legislative Instrument 2016/191, relating to the ‘rounding off’ of amounts in the directors’
report. Amounts in the directors’ report have been rounded off in accordance with the instrument to the nearest thousand dollars, or in
certain cases, to the nearest dollar.
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.
Murray Boyte
Executive Chair
Brisbane
28 August 2024
Directors’ report
2024 ANNUAL REPORT
21
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
Auditor’s Independence Declaration to the Directors of Eureka Group
Holdings Limited
As lead auditor for the audit of the financial report of Eureka Group Holdings Limited for the financial
year ended 30 June 2024, I declare to the best of my knowledge and belief, there have been:
a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit;
b)
no contraventions of any applicable code of professional conduct in relation to the audit; and
c)
No non-audit services provided that contravene any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of Eureka Group Holdings Limited and the entities it controlled during the
financial year.
Ernst & Young
Wade Hansen
Partner
Brisbane
28 August 2024
Auditor’s independence declaration
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
2024 ANNUAL REPORT
22
Consolidated financial statements
Consolidated statement of comprehensive income
23
Consolidated statement of financial position
24
Consolidated statement of changes in equity
25
Consolidated statement of cash flows
26
Notes to the consolidated financial statements
27
Consolidated entity disclosure statement
Directors’ declaration
83
85
Consolidated financial report
30 June 2024
2024 ANNUAL REPORT
23
2024
2023
Notes
$’000
$’000
Rental income
29,311
24,795
Catering income
3(a) 6,043
5,533
Service and caretaking fees
3(a) 5,787
6,092
Total revenue
41,141
36,420
Finance income
17
19
Other income
4(a) 196
125
Total revenue and other income
41,354
36,564
Village operating expenses
4(b)
(18,972)
(17,441)
Employee expenses
(6,525)
(5,617)
Finance costs
4(c)
(5,114)
(3,720)
Marketing expenses
(96)
(386)
Depreciation and amortisation expense
4(b)
(695)
(846)
Other expenses
(5,704)
(3,198)
Total operating expenses
(37,106)
(31,208)
Share of net profit of equity accounted investments
12(b) 2,605
4,246
Net gain on change in the fair value of:
Investment property
7(c) 12,978
22,051
Impairment of:
Financial assets
-
(146)
Other assets
(564)
(1,756)
Profit before tax
19,267
29,751
Income tax expense
5
(6,060)
(10,593)
Profit after tax
13,207
19,158
Other comprehensive income
Items that may be reclassified to profit or loss
(Losses)/gains in the fair value of cash flow hedges
8(c) (265)
535
Share of other comprehensive (expense) of equity accounted investment
(2)
-
Income tax benefit/(expense)
8(c) 81
(161)
Other comprehensive (expense)/income for the period, net of tax
(186)
374
Total comprehensive income for the period
13,021
19,532
Cents
Cents
Earnings per share attributable to ordinary equity holders of the Company:
Basic earnings per share
19(a)
4.37
6.97
Diluted earnings per share
19(a)
4.36
6.95
Consolidated statement of comprehensive income
for the year ended 30 June 2024
2024 ANNUAL REPORT
24
2024
2023
Notes
$’000
$’000
ASSETS
Current assets
Cash and cash equivalents
9(a)
2,257
1,815
Trade and other receivables
6(a)
741
499
Other financial assets at amortised cost
6(b)
37
-
Derivative financial instruments
11(d)
56
-
Other current assets
7(g)
1,364
991
4,455
3,305
Non-current assets classified as held for sale
7(d)
10,492
-
Total current assets
14,947
3,305
Non-current assets
Investment properties
7(c)
231,391
213,072
Investments accounted for using the equity method
12(b)
20,219
10,934
Intangible assets
7(e)
7,505
8,452
Derivative financial instruments
11(d)
214
535
Property, plant and equipment
7(a)
75
348
Right-of-use assets
7(b)
540
766
Other financial assets at amortised cost
6(b)
339
-
Total non-current assets
260,283
234,107
Total assets
2(b)
275,230
237,412
LIABILITIES
Current liabilities
Trade and other payables
6(c)
5,899
5,936
Lease liabilities
7(b)
188
248
Employee benefit obligations
7(h)
1,088
946
Total current liabilities
7,175
7,130
Non-current liabilities
Trade and other payables
6(c)
161
161
Borrowings
6(d)
91,223
69,579
Lease liabilities
7(b)
435
606
Deferred tax liabilities
7(f)
21,931
15,949
Employee benefit obligations
7(h)
54
21
Provisions
10
10
Total non-current liabilities
113,814
86,326
Total liabilities
2(c)
120,989
93,456
Net assets
154,241
143,956
EQUITY
Share capital
8(a)
128,775
127,378
Reserves
8(c)
245
434
Retained earnings
8(d)
25,221
16,144
Total equity
154,241
143,956
Consolidated statement of financial position
At 30 June 2024
2024 ANNUAL REPORT
25
Attributable to owners of Eureka Group Holdings Limited
Note
Share
capital
$’000
Reserves
$’000
Retained
earnings
$’000
Total
equity
$’000
Balance at 1 July 2022
98,422
115
496
99,033
Profit after tax
-
-
19,158
19,158
Other comprehensive income, net of tax
8(c)
-
374
-
374
Total comprehensive income
-
374
19,158
19,532
Transactions with owners in their capacity as
owners:
Contributions of equity
8(a)
30,152
-
-
30,152
Transaction costs - contributions of equity (net of tax)
(1,196)
-
-
(1,196)
Issues of shares to employees
8(c)
-
(120)
-
(120)
Share-based payments
8(c)
- 65
-
65
Dividends paid
8(b)
-
-
(3,510)
(3,510)
28,956
(55)
(3,510)
25,391
Balance at 30 June 2023
127,378 434 16,144
143,956
Profit after tax
- -
13,207
13,207
Other comprehensive expense, net of tax
8(c)
-
(186)
-
(186)
Total comprehensive income/(expense)
-
(186)
13,207
13,021
Transactions with owners in their capacity as
owners:
Contributions of equity
8(a)
1,397 -
-
1,397
Transaction costs - contributions of equity (net of tax)
- -
-
-
Share-based payments
8(c)
- (3)
-
(3)
Dividends paid
8(b)
-
-
(4,130)
(4,130)
1,397 (3)
(4,130)
(2,736)
Balance at 30 June 2024
128,775 245
25,221
154,241
Consolidated statement of changes in equity
for the year ended 30 June 2024
2024 ANNUAL REPORT
26
2024
2023
Note
$’000
$’000
Cash flows from operating activities
Receipts from customers
40,813
36,964
Payments to suppliers and employees
(30,084)
(25,777)
Distributions received
2,140
508
Insurance proceeds
4(a)
-
29
Interest received
13
11
Interest paid
(4,747)
(3,029)
Net cash inflow from operating activities
9(b)
8,135
8,706
Cash flows from investing activities
Payments for investment property
(16,970)
(32,465)
Payments for investments in associates
(9,000)
-
Payments for property, plant and equipment
(42)
(31)
Payments for intangible assets
-
(749)
Payments for other assets
(171)
(65)
Payments to sell property assets
-
(10)
Proceeds from sale of property, plant and equipment
450
-
Proceeds from sale of investment properties
-
35
Proceeds from sale of intangible assets
-
330
Loan advanced to third party
(382)
-
Repayment of loans by third party
46
91
Net cash (outflow) from investing activities
(26,069)
(32,864)
Cash flows from financing activities
Proceeds from borrowings
42,887
34,989
Repayment of borrowings
(21,280)
(35,340)
Proceeds from issues of shares and other equity securities
-
29,126
Payments for share issue transactions
-
(1,711)
Dividends paid
(2,732)
(2,602)
Principal elements of lease payments
(346)
(276)
Payment of transaction costs related to borrowings
(153)
(50)
Net cash inflow from financing activities
18,376
24,136
Net increase/(decrease) in cash and cash equivalents
442
(22)
Cash and cash equivalents at the beginning of the financial year
1,815
1,837
Cash and cash equivalents at end of year
9(a)
2,257
1,815
Consolidated statement of cash flows
for the year ended 30 June 2024
2024 ANNUAL REPORT
27
1
Introduction 28
How numbers are calculated 29
2
Segment information 30
3
Revenue 33
4
Other income and expense items 34
5
Income tax expense 35
6
Financial assets and financial liabilities 36
7
Non-financial assets and liabilities 41
8
Equity 54
9
Cash flow information 57
Risk 58
10
Critical estimates and judgements 59
11
Financial risk management 59
Group structure 64
12
Interests in other entities 65
Unrecognised items 68
13
Contingent liabilities and contingent assets 69
14
Commitments 69
15
Events occurring after the reporting period 69
Further details 70
16
Related party transactions 71
17
Share-based payments 72
18
Remuneration of auditors 74
19
Earnings per share 74
20
Parent entity financial information 75
21
Summary of other material accounting policy information 76
Contents of the notes to the consolidated financial statements
2024 ANNUAL REPORT
28
1. Introduction
These financial statements are consolidated financial statements for the Group consisting of Eureka Group Holdings Limited and its
subsidiaries. A list of subsidiaries is included in note 12.
The financial statements are presented in the Australian currency which is Eureka Group Holdings Limited’s functional and presentation
currency.
The company is of a kind referred to in ASIC Legislative Instrument 2016/191, relating to the ‘rounding off’ of amounts in the financial
statements. Amounts in the financial statements have been rounded off in accordance with the instrument to the nearest thousand dollars,
or in certain cases, the nearest dollar.
Eureka Group Holdings Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office and principal
place of business is:
Eureka Group Holdings Limited
Level 5, 120 Edward Street
Brisbane QLD 4000
The financial statements were authorised for issue by the directors on 28 August 2024.
All ASX announcements, financial reports and other information are available on the website: www.eurekagroupholdings.com.au.
Notes to the consolidated financial statements
2024 ANNUAL REPORT
29
This section provides additional information about those individual line items in the financial statements that the Directors consider most
relevant in the context of the operations of the entity, including:
(a) material accounting policy information that is relevant for an understanding of the items recognised in the financial
statements. These cover situations where the Accounting Standards either allow a choice or do not deal with a particular type
of transaction
(b) analysis and subtotals, including segment information, and
(c) information about estimates and judgements made in relation to particular items.
2
Segment information 30
3
Revenue 33
4
Other income and expense items 34
5
Income tax expense 35
6
Financial assets and financial liabilities 36
7
Non-financial assets and liabilities 41
8
Equity 54
9
Cash flow information 57
How numbers are calculated
2024 ANNUAL REPORT
30
2. Segment information
(a) Description of segments and principal activities
The Group’s Board of directors examines the Group’s performance from an ownership and management perspective and has identified
two reportable segments of its business:
(i) Rental villages
Rental villages relate to the ownership of seniors’ rental villages.
(ii) Property management
Property management relates to the 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 21 and Australian Accounting Standards.
Balances have been allocated to segments as follows:
Rental villages include equity accounted investments
Property management includes management rights, and
Unallocated includes support office costs, corporate overheads, cash and support office right of use assets. 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.
2. Segment information
2024 ANNUAL REPORT
31
Rental villages
Property management
Unallocated
Total
2024
2023
2024
2023
2024
2023
2024
2023
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Revenue
35,220
30,828
5,921
5,592
-
-
41,141
36,420
Finance income
-
-
-
-
17
19
17
19
Other income
-
56
180
69
16
-
196
125
Total revenue and other income
35,220
30,884
6,101
5,661
33
19
41,354
36,564
Village operating expenses
(15,678)
(14,224)
(3,294)
(3,217)
-
-
(18,972)
(17,441)
Employee benefits expense
-
-
-
-
(6,525)
(5,617)
(6,525)
(5,617)
Finance costs
(4,951)
(3,551)
(144)
(144)
(19)
(25)
(5,114)
(3,720)
Marketing expenses
-
-
-
-
(96)
(386)
(96)
(386)
Depreciation and amortisation expense
(8)
(16)
(370)
(540)
(317)
(290)
(695)
(846)
Other expenses
(54)
-
(4)
(67)
(5,646)
(3,517)
(5,704)
(3,198)
Total operating expenses
(20,690)
(17,791)
(3,812)
(3,968)
(12,603)
(9,835)
(37,106)
(31,208)
Share of net profit of equity accounted investments
2,605
4,246
-
-
-
-
2,605
4,246
Net gain on change in the value of:
Financial assets
12,978
22,051
-
-
-
-
12,978
22,051
Impairment of:
Financial assets
-
-
-
-
-
(146)
-
(146)
Other assets
-
-
-
-
(564)
(1,756)
(564)
(1,756)
Profit/(loss) before tax
30,112
39,390
2,289
1,692
(13,134)
(11,332)
19,267
29,751
Income tax (expense)/benefit
(9,144)
(13,976)
(807)
(523)
3,891
3,906
(6,060)
(10,593)
Profit/(loss) after tax
20,968
25,414
1,482
1,169
(9,243)
(7,425)
13,207
19,158
Non-cash and other significant items included in profit
Amortisation of borrowing costs
(100)
(53)
-
-
-
-
(100)
(53)
Segment acquisitions
Acquisition and subsequent expenditure of investment property
15,790
31,141
-
-
-
-
15,790
31,141
Acquisition of property, plant and equipment
-
-
-
-
42
34
42
34
Acquisition of intangible assets
-
-
-
916
-
-
-
916
2. Segment information
2024 ANNUAL REPORT
32
(b) Segment assets
Segment assets are measured in the same way as in the financial statements. These assets are allocated based on the operations of
the segment and the physical location of the asset (which is all in Australia).
2024
2023
$’000
$’000
Rental villages
263,491
224,703
Property management
7,801
8,960
Unallocated
3,938
3,749
Total assets as per the statement of financial position
275,230
237,412
(c) Segment liabilities
Segment liabilities are measured in the same way as in the financial statements. These liabilities are allocated based on the operations
of the segment.
Other includes a deferred tax asset which is netted off against deferred tax liabilities in the Group statement of financial position
2024
2023
$’000
$’000
Rental villages
91,964
72,271
Property management
3,670
3,426
Unallocated
25,356
17,759
Total liabilities as per the statement of financial position
120,990
93,456
2. Segment information
2024 ANNUAL REPORT
33
3. Revenue from contracts with customers
(a) Disaggregation of revenue from contracts with customers
The Group derives revenue from the transfer of goods at a point in time and services over time in the following revenue streams in
Australia:
Rental villages
Property management
Total
2024
2023
2024
2023
2024
2023
$’000
$’000
$’000
$’000
$’000
$’000
Segment revenue
Catering services
3,707
3,570
2,336
1,963
6,043
5,533
Service and caretaking fees
2,202
2,463
3,585
3,629
5,787
6,092
Revenue from external customers
5,909
6,033
5,921
5,592
11,830
11,625
Timing of revenue recognition
At a point in time
3,707
3,570
2,336
1,963
6,043
5,533
Over time
2,202
2,463
3,585
3,629
5,787
6,092
5,909
6,033
5,921
5,592
11,830
11,625
Revenue from external customers come from the provision of seniors’ rental accommodation services. The Group does not derive any
revenue from any single external customer which is greater than 10% of total revenue.
3. Revenue from contracts with customers
2024 ANNUAL REPORT
34
4. Other income and expense items
This note provides a breakdown of the items included in other income, and an analysis of expenses by nature. Information about specific
profit and loss items (such as gains and losses in relation to financial instruments) is disclosed in the related balance sheet notes.
(a) Other income
2024
2023
$’000
$’000
Insurance proceeds
-
28
Gain on sale of assets
180
13
Other
16
84
196
125
(b) Breakdown of expenses by nature
2024
2023
Note
$’000
$’000
Village operating expenses
Staff and village manager expenses
8,769
8,701
Catering expenses
3,689
2,889
Other village expenses
6,514
5,851
2
18,972
17,441
Depreciation
383
381
Amortisation
312
465
2
695
846
(c) Finance income and costs
2024
2023
Note
$’000
$’000
Finance income
Interest from financial assets
17
19
Finance costs
Interest and finance charges paid/payable for financial liabilities not at fair
value through profit or loss
(5,094)
(3,693)
Interest and finance charges paid/payable for lease liabilities
7(b)
(20)
(27)
Finance costs expensed
(5,114)
(3,720)
Net finance costs
(5,097)
(3,701)
4. Other income and expense items
2024 ANNUAL REPORT
35
5. Income tax expense
This note provides an analysis of the Group’s income tax expense, shows what amounts are recognised directly in equity and how the tax
expense is affected by non-assessable and non-deductible items. It also explains significant estimates made in relation to the Group’s tax
position.
(a) Income tax expense
2024
2023
$’000
$’000
Current income tax
-
-
Deferred income tax
6,060
10,593
Income tax expense reported in the statement of profit or loss
6,060
10,593
(b) Numerical reconciliation of income tax expense to prima facie tax payable
2024
2023
$’000
$’000
Profit before tax
19,267
29,751
Tax at the Australian tax rate of 25% (2023: 25%)
4,817
7,438
Tax effect of amounts which are not deductible (taxable) in calculating taxable
income:
Permanent differences
11
30
Capital loss not recognised
-
32
Deferred tax assets not recognised
219
396
Recognition of deferred tax assets not previously recognised
-
(21)
Tax effect of recognising deferred tax balances at 30% tax rate
1,013
2,718
Income tax expense
6,060
10,593
(c) Movement in deferred tax balances charged/(credited)
2024
2023
$’000
$’000
In profit or loss
6,060
10,593
Directly in equity – transaction costs
-
(514)
In other comprehensive income
(81)
161
Acquisition of investment property
-
(4)
Total deferred tax recognised
5,979
10,236
5. Income tax expense
2024 ANNUAL REPORT
36
6. Financial assets and financial liabilities
This note provides information about the Group’s financial instruments, including:
an overview of all financial instruments held by the Group
specific information about each type of financial instrument
accounting policy information, and
information about determining the fair value of the instruments, including judgements and estimation uncertainty involved (note
6(e)).
The Group holds the following financial instruments:
2024
2023
Financial assets
Note
$’000
$’000
Financial assets at amortised cost
Trade and other receivables
6(a)
741
499
Other financial assets
6(b)
376
-
Cash and cash equivalents
9(a)
2,257
1,815
Derivative financial instruments
Used for hedging
11(d)
270
535
3,644
2,849
2024
2023
Financial liabilities
Note
$’000
$’000
Liabilities at amortised cost
Trade and other payables
6(c)
6,060
6,097
Borrowings
6(d)
91,223
69,579
Lease liabilities
7(b)
623
854
97,906
76,530
6. Financial assets and financial liabilities
2024 ANNUAL REPORT
37
(a) Trade and other receivables
2024
2023
$’000
$’000
Current
Trade receivables from contracts with customers
198
246
Loss allowance
(15)
(33)
183
213
Other receivables
558
286
741
499
(i) Classification as trade receivables
Trade receivables are amounts due from customers for services performed in the ordinary course of business. They are generally due for
settlement within 30 days and are therefore all classified as current.
Details about the Group’s impairment policies and the calculation of the loss allowance are provided in note 11(a).
(ii) Fair values of trade receivables
Due to the short-term nature of the current receivables, their carrying amount is the same as their fair value.
(iii) Impairment and risk exposure
Information about the impairment of trade receivables and the Group’s exposure to credit risk can be found in note 11(a).
(iv) Other receivables
This includes distributions receivable from the Group’s equity accounted investments.
(b) Other financial assets at amortised cost
(i) Classification of financial assets at amortised cost
The Group classifies its financial assets as at amortised cost only if both of the following criteria are met:
the asset is held within a business model whose objective is to collect the contractual cash flows, and
the contractual terms give rise to cash flows that are solely payments of principal and interest. See note 21(o) for the remaining
relevant accounting policies.
2024
2023
$’000
$’000
Current
Vendor finance
37
-
37
-
Non-current
Vendor finance
339
West Cabin loan
-
-
339
-
6. Financial assets and financial liabilities
2024 ANNUAL REPORT
38
Terms and conditions of loans
Vendor finance
During the year, the Company entered into an 8-year loan agreement with the body corporate of its managed village in Caboolture, Qld
for $0.38 million, being the balance of the purchase price for the community centre at the village. The loan is unsecured. Interest is
payable under the loan agreement at commercial rates.
West Cabin Loan
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. The amount owed of $0.12 million (2023: $0.15 million), 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 a director of Onterran Ltd and is a director of CCH. Recourse against
CCH in respect of the loan is limited to the two existing cabins. Interest accrues on this loan.
The Group received repayments of $0.04 million (2023: $0.09 million) during the year. Despite the validity and enforceability of the
security held by Eureka, the Group recorded an impairment expense of $0.15 million during the prior year due to commercial
considerations related to land holdings at Couran Cove.
Eureka has reserved its rights under the loan agreement and the security.
(ii) Impairment and risk exposure
Information about the impairment of loans to third parties and the Group’s exposure to credit risk can be found in note 11(a).
(c) Trade and other payables
2024
2023
$’000
$’000
Current liabilities
Trade payables
964
1,820
Payroll accruals and other statutory liabilities
948
803
Unearned income
380
666
Accrued interest
1,230
854
Capital replacement fund liability
14
27
Other payables and accruals
2,363
1,766
5,899
5,936
Non-current liabilities
Capital replacement fund liability
161
161
161
161
Total
6,060
6,097
The carrying amounts of trade and other payables are considered to be the same as their fair values, due to their short-term nature.
6. Financial assets and financial liabilities
2024 ANNUAL REPORT
39
(d) Borrowings
Financing arrangements
The Group’s borrowing facilities were as follows:
2024
2023
Note
$’000
$’000
Secured
Bank loans (i)
11(b)
91,331
69,724
Total secured borrowings
91,331
69,724
Borrowing costs
(108)
(145)
91,223
69,579
Non-current
91,223
69,579
The Group has access to bank facilities with the following terms:
2024
2023
Total facility limit ($’000)
101,000
83,000
Undrawn amount ($’000)
9,669
13,276
Facility amount ($’000)
96,000
83,000
Facility expiry date
31 Mar 2026
31 Mar 2026
Facility amount ($’000)
5,000
-
Bank guarantee facility ($’000)
350
350
Facility expiry date
31 Oct 2025
31 Oct 2025
Hedged amount ($’000)
50,000
50,000
Weighted average interest rate (including margin) (%)
6.13
5.96
Weighted average term to hedge expiry (years)
1.15
2.15
(i)
Facility limit increase
During the year, the Group’s National Australia Bank (NAB) facilities increased to $101.00 million (2023: $83.00 million) to fund the $9.00
million investment in the Eureka Villages WA Fund and working capital requirements. Under the terms of its NAB debt facility, Eureka
can deposit and withdraw funds in accordance with its working capital needs, subject to satisfaction of the bank covenants. The bank
loan facility has sufficient undrawn funds to enable payments to be made as and when they fall due.
(ii) Assets pledged as security
Of the bank loans, 100% is secured by a first priority general security over all present and future acquired property and specified
management letting rights. At 30 June 2024, property assets and management letting rights, with a carrying value of $246.9 million (2023:
$218.9 million), have been pledged by the Group.
(iii) Compliance with loan covenants
The Group has complied with the financial covenants of its bank loans during both financial years presented.
(iv) Fair value
The fair values of the borrowings are not materially different from their carrying amounts, since either the:
interest payable on those borrowings is either close to current market rates, or
borrowings are of a short-term nature.
(v) Risk exposures
Details of the Group’s exposure to risks arising from non-current borrowings are set out in note 11(c).
6. Financial assets and financial liabilities
2024 ANNUAL REPORT
40
(e) Recognised fair value measurements
(i) Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are recognised
and measured at fair value in the financial statements. To provide an indication about the reliability of the inputs used in determining fair
value, the Group has classified its financial instruments into the three levels prescribed under the accounting standards. An explanation
of each level follows underneath the table.
Recurring fair value measurements
Level 1
Level 2
Level 3
Total
At 30 June 2024 Note
$’000
$’000
$’000
$’000
Financial assets
Hedging derivatives – interest rate swaps 11(d)
-
270
-
270
Total financial assets
-
270
-
270
Recurring fair value measurements
Level 1
Level 2
Level 3
Total
At 30 June 2023
$’000
$’000
$’000
$’000
Financial assets
Hedging derivatives – interest rate swaps 11(d)
-
535
-
535
Total financial assets
-
535
-
535
The Group’s policy is to recognise transfers into and out of fair value hierarchy levels as at the end of the reporting period.
The Group did not measure any financial assets or financial liabilities at fair value on a non-recurring basis as at 30 June 2024.
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives and equity securities) is based
on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the Group is the
current bid price. The quoted market price incorporates the market's assumptions with respect to changes in economic climate such as
rising interest rates and inflation. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (e.g. over-the counter derivatives) is determined
using valuation techniques that maximise the use of observable market data and rely as little as possible on entity-specific estimates. If
all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
(ii) Valuation techniques used to determine fair values
Specific valuation techniques used to value financial instruments include:
the use of quoted market prices or dealer quotes for similar instruments
for interest rate swaps – the present value of the estimated future cash flows based on observable yield curves, and
for other financial instruments – discounted cash flow analysis.
The Group did not change any valuation techniques in determining the level 2 fair values during the period.
(iv) Transfers between levels and changes in valuation techniques
There were no transfers between the levels of the fair value hierarchy during the year. There were also no changes made to any of the
valuation techniques applied during the year.
6. Financial assets and financial liabilities
2024 ANNUAL REPORT
41
7. Non-financial assets and financial liabilities
This note provides information about the Group’s non-financial assets and liabilities, including:
specific information about each type of non-financial asset and non-financial liability
- plant and equipment (note 7(a))
- leases (note 7(b))
- investment properties (note 7(c))
- assets held for sale (note 7(d))
- intangible assets (note 7(e))
- deferred tax balances (note 7(f))
- other assets (note 7(g))
- employee benefit obligations (note 7(h))
accounting policy information
information about determining the fair value of the assets and liabilities, including judgements and estimation uncertainty involved (note
7(i)).
(a) Property, plant and equipment
Buildings
Plant and
equipment
Motor
vehicles
Total
Non-current assets
$’000
$’000
$’000
$’000
Year ended 30 June 2023
Cost
398 316
36
750
Accumulated depreciation
(183)
(186)
(33)
(402)
Net carrying value
215
130
3
348
Opening net carrying value
355 158
10
523
Additions
- 34
-
34
Reclassifications
(125)
(10)
-
(135)
Disposals
-
(2)
-
(2)
Depreciation charge
(15)
(50)
(7)
(72)
Closing net carrying value
215 130
3
348
Year ended 30 June 2024
Cost
-
286
36
322
Accumulated depreciation
-
(211)
(36)
(247)
Net carrying value
-
75
-
75
Opening net carrying value
215 130
3
348
Additions
-
42
-
42
Reclassifications
-
(2)
-
(2)
Disposals
(208)
(44)
-
(252)
Depreciation charge
(7)
(51)
(3)
(61)
Closing net carrying value
-
75
-
75
7. Non-financial assets and financial liabilities
2024 ANNUAL REPORT
42
(b) Leases
This note provides information on leases where the Group is a lessee.
(i) Amounts recognised in the statement of financial position
The statement of financial position shows the following amounts relating to leases:
2024
2023
$’000
$’000
Right-of-use-assets
Premises
534
758
Equipment
6
8
540
766
Lease liabilities
Current
188
248
Non-current
435
606
623
854
Additions to the right-of-use assets during the 2024 financial year were $99,000 (2023: $9,000).
(ii) Amounts recognised in the statement of profit or loss
2024
2023
Note
$’000
$’000
Depreciation charge of right-of-use-assets
Premises
(316)
(306)
Equipment
(2)
(3)
(318)
(309)
Interest expense (included in finance costs)
4(c)
(20)
(27)
Expense relating to short-term leases (included in other expenses)
(9)
(10)
The total cash outflow for leases during the year was $366,000 (2023: $303,000).
7. Non-financial assets and financial liabilities
2024 ANNUAL REPORT
43
(c) Investment properties
2024
2023
Note
$’000
$’000
Non-current assets – at fair value
Opening balance at 1 July
213,072
159,660
Acquisitions 1
2,845
23,400
Development costs 2
9,471
4,171
Capitalised subsequent expenditure 3
3,474
3,569
Disposals
-
(81)
Net gain from fair value adjustment
2
12,978
22,051
Transfer from intangibles – management rights
43
167
Transfer from property, plant and equipment
-
135
Transfer to assets held for sale
7(d)
(10,492)
-
Closing balance at 30 June
231,391
213,072
1 Acquisitions during the year include land in Gladstone, Qld and units across various strata-titled villages. Prior year acquisitions include a village in
Horsham, Vic, Tamworth, NSW and Eagleby, Qld along with units across various strata-titled villages.
2 The Group spent $9.47 million (2023: $4.17 million) on village developments including $8.72 million (2023: $3.65 million) for the 51-unit Brassall, Qld
expansion and $0.72 million (2023: $0.43 million) planning for the proposed 124-unit Kingaroy greenfield development.
3 A further $3.47 million (2023: $3.57 million) was spent on enhancing its owned villages through capital improvements including expenditure on community
room upgrades and unit refurbishments.
(i) Amounts recognised in profit or loss for investment properties
2024
2023
Note
$’000
$’000
Rental income
29,311
24,795
Catering income
3
3,707
3,570
Direct operating expenses generating rental and catering income
(15,678)
(14,224)
Fair value gain recognised in profit or loss
2
12,978
22,051
(ii) Measuring investment property at fair value
Investment properties consist of 28 rental village assets (2023: 28) along with manager’s units and individual rental units in managed
villages. It also includes land for development in Kingaroy, Qld and Gladstone, Qld and land in Lismore, NSW. The Group considers
investment properties reside in one class of asset, being seniors’ rental villages. They are carried at fair value. Changes in fair values
are presented in profit or loss.
(iii) Presenting cash flows
The Group classifies cash outflows to acquire or develop investment property as investing and rental inflows as operating cash flows.
7. Non-financial assets and financial liabilities
2024 ANNUAL REPORT
44
(iv) Significant judgements
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:
1. Valuations undertaken by accredited external independent valuers
2. Acquisition price paid for the property
3. 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
4. Capitalised income projections based upon a property’s estimated maintainable earnings and capitalisation rate.
Classification
The Group classifies property as investment property when it meets the following key criteria:
1. The property is held by the Group to generate long term investment growth and ongoing rental returns, and
2. 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:
1. Value of the ancillary services to the total income generated from the property, and
2. Profit generated from ancillary services to the total profit generated from the property.
Properties that do not meet these criteria are classified as property, plant and equipment.
(v) Significant estimate – fair value of investment property
Information about the valuation of investment properties is provided in note 7(i) below.
7. Non-financial assets and financial liabilities
2024 ANNUAL REPORT
45
Details of carrying value of investment properties by state are as follows:
2024
2023
$’000
$’000
Queensland
Ayr Village
2,820
2,300
Bowen Village
5,581
5,526
Brassall Village
22,350
11,479
Bundaberg Avenell Village
7,950
6,200
Bundaberg Liberty Village
24,260
22,050
Bundamba Village (20 Lots)
2,462
1,714
Cairns Earlville Village
8,930
10,000
Cairns Smithfield Village
6,400
5,900
Eagleby Village (58 Lots)
7,546
6,882
Gladstone Village (14 Lots)
1,991
1,427
Gladstone development
1,245
-
Gympie Village
5,340
5,050
Hervey Bay Village
6,500
6,000
Kingaroy development
2,156
1,433
Mackay Village
13,530
12,300
Margate Village
8,492
8,300
Rockhampton Village 1
6,717
6,550
Rockhampton Village 2
6,709
6,300
Southport Village
5,640
5,359
Wynnum Village
12,800
11,950
Managers’ units in managed villages
1,662
1,813
161,081
138,533
NSW
Albury Village
7,150
6,500
Broken Hill Village
4,710
4,059
Orange Village
8,250
7,200
Tamworth Village
7,830
7,175
Managers’ units in managed villages
635
609
28,575
25,543
Victoria
Horsham Village
5,525
5,447
Mildura Village
6,500
5,350
Shepparton Village
6,974
6,800
18,999
17,597
South Australia
Elizabeth Vale Scenic Village 1
9,310
7,900
Elizabeth Vale Scenic Village 2
6,270
5,500
Mt Gambier Village
-
5,900
Salisbury Village
6,253
6,012
Whyalla Village
-
5,196
Managers’ units in managed villages
903
891
22,736
31,399
231,391
213,072
7. Non-financial assets and financial liabilities
2024 ANNUAL REPORT
46
(d) Assets held for sale
(a) Description
The Group has determined it will sell the Mount Gambier and Whyalla villages and has initiated an active program to locate a buyer.
Disposal is expected in the first half of the next financial year. The assets were consequently presented as non-current assets held for
sale in this financial report.
The assets will continue to be measured at fair value until disposal. The carrying values reflect the sale price.
The non-current asset is presented under the Rental villages operating segment in accordance with AASB 8 Operating Segments.
(b) Assets classified as held for sale
The following assets were reclassified as held for sale at balance date (2023: $nil):
Mt Gambier
Whyalla
Total
$’000
$’000
$’000
Assets classified as held for sale
Investment properties
5,051
5,441
10,492
Total assets held for sale
5,051
5,441
10,492
(e) Intangible assets
Goodwill
Management
rights
Rent
rolls
Other
Total
Non-current assets
$’000
$’000
$’000
$’000
$’000
Year ended 30 June 2023
Cost
1,955
8,820
140
33
10,948
Accumulated amortisation and impairment
-
(2,413)
(59)
(24)
(2,496)
Net carrying value
1,955 6,407
81
9
8,452
Opening net carrying value
1,955
6,429
84
3
8,471
Additions
-
908
-
8
916
Disposals
-
(303)
-
-
(303)
Transfers to investment property
-
(167)
-
-
(167)
Amortisation charge
-
(460)
(3)
(2)
(465)
Closing net carrying value
1,955
6,407
81
9
8,452
Year ended 30 June 2024
Cost
1,955
8,200
140
33
10,328
Accumulated amortisation and impairment
(2,734)
(63)
(26)
(2,823)
Closing net carrying value
1,955
5,466
77
7
7,505
Opening net carrying value
1,955
6,407
81
9
8,452
Impairment charge
-
(591)
-
-
(591)
Transfers to investment property
-
(44)
-
-
(44)
Amortisation charge
-
(306)
(4)
(2)
(312)
Closing net carrying value
1,955
5,466
77
7
7,505
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.
7. Non-financial assets and financial liabilities
2024 ANNUAL REPORT
47
(i) Amortisation methods and useful lives
The remaining amortisation period for the management rights, on a weighted average basis, is 35 years (30 June 2023: 36 years).
See note 21(l) for the other accounting policies relevant to intangible assets and note 21(m) for the Group’s policy regarding
impairments.
Significant estimates
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 result in Eureka’s management rights contract not being renewed.
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.
(ii) Impairment tests for goodwill
Goodwill is monitored by the Board of directors at the level of the Property management segment identified in note 2(a).
A summary of the goodwill allocation by segment is presented below:
2024
2023
$’000
$’000
Goodwill carrying amount
Property management
1,955
1,955
Significant estimate: key assumptions used for value-in-use calculations
The Group tests whether goodwill has suffered any impairment on an annual basis. For the current and prior reporting periods, the
recoverable amount of the Property Management cash-generating unit (CGU) was determined based on value-in-use calculations which
require the use of assumptions. The calculations use cash flow projections covering a five-year period comprising a one-year budget
period and four-year forecast period. Cash flows are forecasted by management taking into account historical results and current
expectations of future performance including renewal of existing management agreements but assume no additional villages will be
managed. Cash flows beyond the five-year period is extrapolated using the estimated growth rates stated below. These growth rates
are consistent with both historical trends and future forecasts projected.
The following table sets out the key assumptions for the Property Management CGU that has significant goodwill allocated to it:
2024
2023
Annual growth rate (%)
2.0
2.0
Long-term growth rate (%)
2.0
2.0
Pre-tax discount rate (%)
15.0
15.0
7. Non-financial assets and financial liabilities
2024 ANNUAL REPORT
48
Management has determined the values assigned to each of the above key assumptions as follows:
Assumption Approach used to determine values
Annual growth rate Average annual growth rate over the five-year forecast period is based on past
performance, FY25 budget and management’s expectations of future changes in the
market.
Long-term growth rate This is the weighted average growth rate used to extrapolate cash flows beyond the
budget period. The rates are consistent with forecasts included in industry reports.
Pre-tax discount rates Reflect specific risks relating to the Property management segment and the jurisdictions in which it
operates.
(iii) Significant estimate: impairment charge
Based on the impairment testing performed, the results of the impairment testing of the Property Management CGU concluded that no
impairment charge against goodwill is to be recognised at 30 June 2024.
(iv) Significant estimate: impairment if changes in key assumptions
The Directors have considered and assessed reasonably possible changes for other key assumptions and have not identified any
instances that could cause the carrying amount of the Property Management CGU to exceed its recoverable amount that would cause
impairment.
7. Non-financial assets and financial liabilities
2024 ANNUAL REPORT
49
(f) Deferred tax balances
(i) Recognised in the statement of financial position
2024
2023
$’000
$’000
Deferred tax assets
Tax losses - revenue
8,257
8,125
8,257
8,125
Deferred tax liabilities
Investment properties, property, plant and equipment
(28,685)
(22,933)
Sundry net (assessable) and deductible differences
(1,503)
(1,141)
(30,188)
(24,074)
Net deferred tax liabilities
(21,931)
(15,949)
Offsetting within tax consolidated Group
Eureka Group Holdings Limited and its wholly owned Australian subsidiaries have applied the tax consolidation legislation which means
that these entities are taxed as a single entity. Consequently, the deferred tax assets and deferred tax liabilities of these entities have
been offset in the consolidated financial statements.
(ii) Not recognised in the statement of financial position
2024
2023
$’000
$’000
Unrecognised deferred tax assets
Tax losses – capital
268
269
Non-deductible capital items
2,271
2,009
Net unrecognised deferred tax assets
2,539
2,278
Reconciliation of unrecognised tax balances
Opening balance
2,278
1,491
Deferred tax assets not recognised / (recognised)
-
32
Movement attributable to non-deductible capital items
219
375
Tax effect of changing deferred tax balances to 30% tax rate at 30 June 2023
42
380
Total movement
261
787
Closing balance
2,539
2,278
7. Non-financial assets and financial liabilities
2024 ANNUAL REPORT
50
Significant estimates and judgement
Recognised deferred tax assets include an amount of $8.26 million (2023: $8.13 million) which relates to Australian carried-forward
revenue tax losses. Unrecognised deferred tax assets include carried-forward capital losses and temporary differences relating to non-
deductible capital items.
Recovery of deferred tax assets
A deferred tax asset is only recognised if the Group considers it probable that future taxable profits will be available against which the
Group can utilise benefits.
The tax losses and temporary differences do not expire under current tax legislation. 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 “Business Continuity Test” as defined in section 165-210 of the Income Tax Assessment Act 1997.
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 “Business Continuity Test” referred to above;
• the Group earns taxable income in future periods, and
• applicable tax laws are not changed, causing the losses to be unavailable.
Measurement of deferred tax balances
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the
laws that have been enacted or substantively enacted by the reporting date. The Group is currently a base rate entity and subject to a
25% tax rate. Judgment is required in assessing the tax rate that will apply with the temporary differences reverse. Deferred tax balances
have been reported at a 30% tax rate at balance date.
7. Non-financial assets and financial liabilities
2024 ANNUAL REPORT
51
(g) Other assets
2024
2023
Note
$’000
$’000
Current
Prepayments
1,195
802
Capital replacement funds
169
189
1,364
991
Non-current
Other
(i)
-
-
-
-
(i) Other non-current assets include:
Bartercard dollars
Bartercard is an alternative currency and operates as a trade exchange. At balance date, the Bartercard carrying value was $nil (30
June 2023: $nil). The Group continues to hold Barter dollars with a face value of $2.63 million (30 June 2023: $2.63 million). Barter
dollars spent or sold during the year was negligible (2023: $0.03 million). In the prior year, Eureka recorded an impairment expense of
$1.76 million after a thorough assessment of the options for Eureka to realise the asset.
Couran Cove loan
The assessed fair value of the loan receivable is $nil (2023: $nil).
The carrying value of the loan receivable from CCH Developments No 1 Pty Ltd (with a face value of $3.00 million), including land
option, which gives the Group a first right of refusal to purchase 60 proposed cabin sites for $50,000 per site at Couran Cove, Qld has
been assessed based on a thorough review including independent assessment of the land held as security for the loan.
There has been no change to the Group’s security arrangements, including a mortgage over the land. The loan expiry date was 31
August 2021. Eureka has reserved its rights in relation to the recovery of this loan. This loan is guaranteed by Onterran Ltd. No interest
accrues on this loan.
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 do not consider this to be the most viable means of realising the
asset.
(h) Employee benefit obligations
2024
2023
$’000
$’000
Current
1,088
946
Non-current
54
21
1,142
967
Leave obligations
The leave obligations cover the Group’s liabilities for long service leave and annual leave which are classified as either other long-term
benefits or short-term benefits, as explained in note 21(r).
The current portion of this liability includes:
all the accrued annual leave
the unconditional entitlements to long service leave where employees have completed the required period of service, and
for those employees who are entitled to pro-rata payments in certain circumstances.
7. Non-financial assets and financial liabilities
2024 ANNUAL REPORT
52
(i) Recognised fair value measurements
(i) Fair value hierarchy
This note explains the judgements and estimates made in determining the fair values of the non-financial assets that are recognised and
measured at fair value in the financial statements. To provide an indication about the reliability of the inputs used in determining fair
value, the Group has classified its non-financial assets and liabilities into the three levels prescribed under the accounting standards. An
explanation of each level is provided in note 6(e).
Level 1
Level 2
Level 3
Total
At 30 June 2024 Note
$’000
$’000
$’000
$’000
Non-financial assets
Investment properties 7(c)
-
-
231,391
231,391
Assets held for sale – investment properties 7(d) -
-
10,492
10,492
Other assets – loan including land option 7(g)
-
-
-
-
Total non-financial assets
-
-
241,883
241,883
Level 1
Level 2
Level 3
Total
At 30 June 2023
$’000
$’000
$’000
$’000
Non-financial assets
Investment properties 7(c)
-
-
213,072
213,072
Other assets – loan including land option 7(g) -
-
-
-
Total non-financial assets
-
-
213,072
213,072
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.
(ii) Fair value measurements using significant unobservable inputs
Movements in level 3 asset items during the current and previous financial year are set out in Notes 7(c).
(iii) Transfers between levels and changes in valuation techniques
There were no transfers between the levels of the fair value hierarchy during the year. There were also no changes made to any of the
valuation techniques applied during the year.
7. Non-financial assets and financial liabilities
2024 ANNUAL REPORT
53
(iv) Valuation inputs and relationships to fair value
The following table summarises the quantitative information about the significant unobservable inputs used in level 3 fair value
measurements (see (ii) above for the valuation techniques adopted).
Description
Valuation
technique
Significant
unobservable
inputs
Range
(weighted average)
Relationship of
unobservable input to fair
value
2024
2023
Investment
properties –
rental villages
Capitalisation
method 1
Capitalisation
rate
6.5% -
11.0%
(8.17%) 2,4, 5
6.5% -
11.0%
(8.32%) 2,4
Capitalisation rate has an
inverse relationship to
valuation.
Stabilised
occupancy
93%-99%
(97.9%) 3,4, 5
95%-99%
(97.8%) 3,4
Occupancy has a direct
correlation to valuation (i.e. the
higher the occupancy, the
greater the value).
Investment
properties –
individual
village units
Direct
comparison
approach
Comparable
sales evidence
N/A
N/A
Comparable sales evidence
has a direct relationship to
valuation.
Other assets –
loan including
land option
External valuation
Comparable
sales evidence
N/A
N/A
The external valuation of the
secured land has a direct
correlation to the loan’s value.
Costs to realise
the loan
N/A
N/A
Costs of realisation have an
indirect correlation to the
loan’s value (i.e. the lower they
are, the greater the value).
1
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.
2
Excludes one apartment-style complex with a capitalisation rate of 6.25% (2023: 6.25%) and a village in which National Disability Insurance
Scheme services revenue is earned with a capitalisation rate of 7.5% (2023: 7.5%).
3
Excludes one short stay village with a stabilised occupancy rate of 73% (2023: 70%).
4 The range excludes the Lismore property which is non-operational following a significant flood event during the 2022 year.
5 Excludes two held for sale assets with a capitalisation rate of 9.5% (2023: 9.5%).
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 investment 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 were obtained for eleven (11) 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 at balance date, 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 direct comparison method is used for assessing the fair value of individual units acquired.
The fair value of nil ascribed to Eureka’s $3.00 million loan receivable (including land option at Couran Cove) was determined in a prior
period having regard to an independent external valuation of the secured land, 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 to Note 7(g) for further
details.
7. Non-financial assets and financial liabilities
2024 ANNUAL REPORT
54
8. Equity
(a) Share capital
2024
2023
2024
2023
Number of
Shares
Number of
Shares
$’000
$’000
Ordinary shares
Fully paid
303,859,458
301,063,458
128,775
127,378
Total share capital
303,859,458
301,063,458
128,775
127,378
(i) Movements in ordinary shares
Number of
shares
$’000
Details
Opening balance 1 July 2023
237,186,521
98,422
Dividend reinvestment plan issues
3,372,347
1,796
Employee share scheme issues
429,362
120
Shares issued under entitlement offer
60,075,228
28,236
301,063,458
128,574
Less: Transaction costs arising on share issues
-
(1,196)
Balance at 30 June 2023
301,063,458
127,378
Dividend reinvestment plan issues
2,796,000
1,397
Balance at 30 June 2024
303,859,458
128,775
Pursuant to the Company’s Dividend Reinvestment Plan:
2024
On 12 October 2023, 684,145 shares were issued at $0.4377 for the 2023 financial year final dividend, and
On 29 April 2024, 2,111,855 shares were issued at $0.4424 for the 2024 financial year interim dividend.
2023
On 6 October 2022, 2,685,348 shares were issued at $0.5557 for the 2022 financial year final dividend, and
On 6 April 2023, 686,999 shares were issued at $0.4424 for the 2023 financial year interim dividend.
Pursuant to the Company’s Omnibus Equity Plan:
2024
There were no shares issued during the year.
2023
On 30 September 2022, 429,362 shares were issued at $nil consideration upon vesting and exercise of employee share rights. $0.12
million was transferred from the share-based payments reserve to share capital.
Pursuant to the Company’s Entitlement Offer:
2024
There were no shares issued during the year.
2023
On 3 November 2022, 50,153,787 institutional shares were issued at $0.47, and
On 28 November 2022, 9,921,441 retail shares were issued at $0.47.
8. Equity
2024 ANNUAL REPORT
55
(ii) Ordinary shares
Ordinary shares entitle the holder to participate in dividends, and to share in the proceeds of winding up 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.
The Company does not have a limited amount of authorised capital.
(iii) Dividend reinvestment plan
The company has established a dividend reinvestment plan under which holders of ordinary shares can elect to have all or part of their
dividend entitlements satisfied by the issue of new ordinary shares rather than by being paid in cash.
(iv) Employee share scheme issues
Information relating to the Company’s Omnibus Equity Plan, including details of share rights issued, exercised and lapsed during the
financial year and rights outstanding at the end of the reporting period, is set out in note 19.
(v) Share buy-back
There is no current on-market buy-back.
(b) Dividends
(i) Ordinary shares
2024
2023
$’000
$’000
Final dividend for the year ended 30 June 2023 of 0.67 cents
(2022: 0.63 cents) per fully paid share
2,018
1,496
Interim dividend for the year ended 30 June 2024 of 0.70 cents
(2023: 0.67 cents) per fully paid share
2,112
2,014
Total paid during the year
4,130
3,510
(ii) Dividends not recognised at the end of the reporting period
Since balance date, the Board has declared a final dividend of 0.70 cents per share, amounting to $2.13 million payable on
14 October 2024. The financial effect of this dividend has not been brought to account in the financial statements for the year ended 30
June 2024 and will be recognised in subsequent financial reports.
(iii) Franking of dividends
All dividends are currently unfranked. There are no franking credits within the Group as the Group does not pay income tax due to carry
forward tax losses.
8. Equity
2024 ANNUAL REPORT
56
(c) Reserves
The following table shows a breakdown of the balance sheet line item ‘Reserves’ and the movements in these reserves during the year. A
description of the nature and purpose of each reserve is provided below the table.
Share-
based
payments
Hedging
Total
reserves
Note
$’000
$’000
$’000
At 1 July 2022
115
-
115
Change in fair value of cash flow hedge
-
535
535
Income tax expense
-
(161)
(161)
Other comprehensive income
- 374
489
Transactions with owners in their capacity as owners:
Share-based payment expense
9(b)
65
-
65
Issue of shares to employees
(120) -
(120)
At 30 June 2023
60 374
434
Change in fair value of cash flow hedge
-
(265)
(265)
Share of loss of change in fair value of cashflow hedge in equity
accounted investment
-
(2)
(2)
Income tax benefit
-
81
81
Other comprehensive income
-
(186)
(186)
Transactions with owners in their capacity as owners:
Share-based payment expense
9(b)
(3) -
(3)
At 30 June 2024
57 188
245
(i) Nature and purposes of other reserves
Hedging reserve
The hedging reserve includes the cash flow hedge reserve, see note 11(c) for details. The cash flow hedge reserve is used to recognise the
effective portion of gains or losses on derivatives that are designated and qualify as cash flow hedges, as described in note 21(q).
Share-based payments
The share-based payments reserve is used to recognise:
the grant date fair value of share rights granted to employees but not yet vested, and
the allocation of shares under the Company’s Omnibus Equity Plan to employees.
(d) Retained earnings
Movement in retained earnings were as follows:
2024
2023
Notes
$’000
$’000
Balance 1 July
16,144
496
Profit after tax
13,207
19,158
Dividends paid
8(b)
(4,130)
(3,510)
Balance at 30 June
25,221
16,144
8. Equity
2024 ANNUAL REPORT
57
9. Cash flow information
(a) Reconciliation of cash
2024
2023
$’000
$’000
Current assets
Cash at bank and in hand
2,257
1,815
Balance per statement of cash flows
2,257
1,815
(b) Reconciliation of profit after income tax to net cash inflow from operating activities
2024
2023
$’000
$’000
Profit for the year
13,207
19,158
Adjustments for:
Depreciation and amortisation
695
846
Non-cash employee benefits expense(income) – share-based payments
(3)
65
Expected credit loss income
(6)
(2)
Impairment of financial assets
-
146
Impairment of other assets
566
1,756
Fair value adjustment to investment property
(12,978)
(22,051)
Distributions received
2,320
508
Share of profits of joint venture
(2,605)
(4,246)
Loss on sale of investment property
-
128
(Gain) on sale of management rights
-
(21)
(Gain) on sale of property, plant and equipment
(180)
-
Loss on sale of non-current assets held for sale
-
10
Lease modification
-
(69)
Non-cash transactions
4
168
Changes in operating assets and liabilities
(Decrease)/increase in trade receivables
(63)
504
(Decrease) in other assets
(200)
(119)
Increase in trade and other payables
1,143
1,067
Increase in deferred tax liabilities
6,060
10,593
Increase in employee benefit obligations
175
265
Net cash inflow from operating activities
8,135
8,706
(c) Non-cash investing and financing activities
During the year, goods and services acquired with Bartercard dollars was negligible (2023: $0.03 million).
Shares valued at $1.40 million were issued pursuant to the Dividend Reinvestment Plan in lieu of the payment of dividends (2023: $0.91
million).
9. Cash flow information
2024 ANNUAL REPORT
58
This section of the notes discusses the Group’s exposure to various risks and shows how these could affect the Group’s financial position
and performance.
10. Critical estimates and judgements 59
11. Financial risk management 59
Risk
2024 ANNUAL REPORT
59
10. Critical estimates and judgements
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results.
Management also needs to exercise judgement in applying the Group’s accounting policies.
This note provides an overview of the areas that involve a higher degree of judgement or complexity, and of items which are more likely to
be materially adjusted due to estimates and assumptions turning out to be different. Detailed information about each of these estimates and
judgements is included in other notes together with information about the basis of calculation for each affected line item in the financial
statements.
Significant estimates and judgements
The areas involving significant estimates or judgements are:
fair value of certain financial assets – note 6(e)
fair values, measurement and classification of investment property – note 7(c)
amortisation of management rights – note 7(e)
goodwill – note 7(e)
deferred taxes – note 7(f)
fair value measurement hierarchy – note 7(i)
Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations
of future events that may have a financial impact on the Group and that are believed to be reasonable under the circumstances.
11. Financial risk management
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.
This note explains the Group’s exposure to financial risks and how these risks could affect the Group’s future financial performance.
Current year profit and loss information has been included where relevant to add further context.
Risk
Exposure arising from
Measurement
Management
Credit risk
Cash and cash equivalents,
trade receivables
Ageing analysis
Credit ratings
Approved financial institutions for
bank deposits and credit limits for
trade receivables
Liquidity risk
Borrowings and other
liabilities
Rolling cash flow forecasts
Availability of committed credit
lines and borrowing facilities
Market risk – interest rate
Long-term borrowings at
variable rates
Sensitivity analysis
Interest rate swaps
(a) Credit risk
Credit risk arises from:
cash and cash equivalents
deposits with banks and financial institutions, and
credit exposures to customers, including outstanding receivables.
(i) Risk management
Credit risk is managed on a Group basis.
Cash and cash equivalents
Deposits of cash are only held with approved banks and financial institutions. The Group banks with National Australia Bank.
10. Critical estimates and judgements
11. Financial risk management
2024 ANNUAL REPORT
60
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
Current
More than 30
days past
due
More than
60 days
past due
More than
90 days
past due
Total
30 June 2024
Gross carrying amount ($’000)
678
20
20
23
741
30 June 2023
Gross carrying amount ($’000)
482
13
2
2
499
Bartercard
Bartercard is an alternative currency and operates as a trade exchange. Bartercard is recorded at cost less any accumulated impairment.
The asset was fully impaired by $1.76 million during the prior year and the carrying value at year end is $nil (2023: $nil).
Other financial assets at amortised cost
Other financial assets at amortised cost include a:
vendor finance loan, and
the West Cabin loan.
The vendor finance loan has no balances that are past due. The Group has not provided a loss allowance at 30 June 2024 as
management believes these amounts will be received over the course of the loan.
The West Cabin loan is past due and was fully impaired during the prior year. Subsequent recoveries of amounts previously written off
are credited against the same line item.
(b) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of
committed credit facilities and loan facilities to meet obligations when due and especially in relation to financing of proposed acquisitions.
At the end of the reporting period the Group held cash at hand of $2.26 million (2023: $1.82 million).
The Group’s liquidity management policy involves projecting cash flows, monitoring balance sheet liquidity ratios and maintaining debt
financing plans. The Group maintains and updates cash flow forecasts and, when necessary, obtains additional loan facilities and standby
credit arrangements.
At balance date, the Group had net current assets of $7.78 million (including held for sale assets of $10.49 million) (2023: deficiency of
$3.82 million). The Group actively manages its cash and drawn debt to minimise interest costs. The bank loan facility has sufficient
undrawn funds for working capital needs. 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.
(i) Financing arrangements
The Group had access to the following undrawn borrowing facilities at the end of the reporting period:
2024
2023
$’000
$’000
Variable rate
Expiring beyond one year (bank loans)
9,669
13,280
9,669
13,280
11. Financial risk management
2024 ANNUAL REPORT
61
(ii) Maturities of financial liabilities
The tables below analyse the Group’s financial liabilities into relevant maturity groupings based on their contractual maturities for all non-
derivative financial liabilities.
Contractual maturities of financial
liabilities
Less than 6
months
6-12
months
Between
1-2
years
Between 2-5
years
Total
contractual
cash flows
Carrying
amount
$’000
$’000
$’000
$’000
$’000
$’000
At 30 June 2024
Non-derivatives
Trade and other payables
4,275
-
-
-
4,275
4,275
Borrowings 1
4,016
2,696
95,507
-
102,219
91,331
Lease liabilities
95
96
199
244
634
623
Total non-derivatives
8,386
2,792
95,706
244
107,128
96,229
At 30 June 2023
Non-derivatives
Trade and other payables
4,486
-
-
-
4,486
4,486
Borrowings 1
2,086
2,122
4,266
75,747
84,221
69,724
Lease liabilities
172
177
191
444
984
1,124
Total non-derivatives
6,744
2,299
4,457
76,191
89,691
75,334
1 This amount includes estimated interest during the contractual period.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying
balances as the impact of discounting is not significant.
(c) Market risk
(i) Cash flow and interest rate risk
The Group’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Group to cash flow interest
rate risk. The Group manages its interest rate risk by regularly monitoring interest rates. Eureka’s policy is to maintain a portion of
borrowings at fixed rates. To manage this, from time-to-time Eureka enters into interest rate swaps, in which it agrees to exchange, at
specified intervals, the difference between floating and fixed rate interest amounts calculated by reference to an agreed-upon notional
principal amount.
The Board periodically reviews the Group’s interest rate exposure, taking into account potential renewals of existing finance facilities,
alternative financing, hedging and the mix of fixed and variable interest rates. During the year, the Group’s borrowings at variable rate
were denominated in Australian dollars only.
The Group’s borrowings and receivables are carried at amortised cost. The borrowings are periodically contractually repriced and to that
extent are also exposed to the risk of future changes in market interest rates.
The exposure of the Group’s borrowings to interest rate changes and the contractual repricing dates at the end of the reporting period
are as follows:
2024
% of total
2023
% of total
Note
$’000
loans
$’000
loans
Variable rate borrowings
1 – 5 years 6(d)
91,331
100%
69,579
100%
91,331
100%
69,579
100%
An analysis by maturities is provided in note 11(b)(ii). The percentage of total borrowings shows the proportion of borrowings that are
currently at variable rates in relation to the total amount of borrowings.
11. Financial risk management
2024 ANNUAL REPORT
62
Instruments used by the Group
Three (3) fixed interest rate swaps are currently in place covering approximately 55% (2023: 72%) of the variable loan principal
outstanding.
The swap contracts swap the liability to pay interest based on variable BBSY for fixed interest rates. The swaps require settlement of net
interest receivable or payable every 90 days. The settlement dates coincide with the dates on which interest is payable on the underlying
debt.
Effects of hedge accounting on the financial position and performance
The effects of the interest rate swaps on the Group’s financial position and performance are as follows:
Interest rate swap
#1
#2
#3
2024
Notional amount ($’000)
20,000
20,000
10,000
Maturity date
30 Dec 2024
30 Dec 2025
30 Mar 2026
Hedge ratio
1:1
1:1
1:1
Interest rate (including margin) (%)
5.81
5.80
5.84
Carrying amount (current and non-current asset) ($’000)
56
144
70
Change in fair value of hedges recognised in other comprehensive
income
(137)
(90)
(38)
2023
Notional amount ($’000)
20,000
20,000
10,000
Maturity date
30 Dec 2024
30 Dec 2025
30 Mar 2026
Hedge ratio
1:1
1:1
1:1
Interest rate (including margin) (%)
5.86
5.85
5.89
Carrying amount (current and non-current asset) ($’000)
193
234
108
Change in fair value of hedges recognised in other comprehensive
income
193
234
108
The weighted average interest rate including margin is 6.13% (2023: 5.96%).
The weighted average term to hedge expiry is 1.15 years (2023: 2.15 years).
Sensitivity
Profit or loss is sensitive to higher/lower interest income from floating rate liabilities as a result of changes in interest rates. The analysis
is prepared assuming the amount of variable rate loans outstanding at the reporting date, for which fixed interest rate swaps were not in
place, was outstanding for the whole year.
Impact on post-tax profit
2024
2023
$’000
$’000
Australian variable interest rates – increase by 100 basis points (bps)
(2023: 100 bps) *
(310)
(148)
Australian variable interest rates – decrease by 100 basis points (bps)
(2023: 100 bps) *
310
148
* Holding all other variables constant
11. Financial risk management
2024 ANNUAL REPORT
63
(d) Derivatives
The Group has the following derivative financial instruments in the following line items in the statement of financial position:
2024
2023
$’000
$’000
Current assets
Interest rate swaps – cash flow hedges (b)(ii)
56
-
Total current derivative financial instrument assets
56
-
Non-current assets
Interest rate swaps – cash flow hedges (b)(ii)
214
535
Total non-current derivative financial instrument assets
214
535
Total derivative financial instruments
270
535
(i) Classification of derivatives
Derivatives are only used for economic hedging purposes and not as speculative investments. However, where derivatives do not meet
the hedge accounting criteria, they are classified as ‘held for trading’ for accounting purposes and are accounted for at fair value through
profit or loss. They are presented as current assets or liabilities to the extent they are expected to be settled within 12 months after the
end of the reporting period. The full fair value of hedging derivatives is classified as a non-current asset or liability when the remaining
maturity of the hedged item is more than 12 months. It is classified as a current asset or liability when the remaining maturity of the
hedged item is less than 12 months. The Group’s accounting policy for its cash flow hedges is set out in note 21(q).
(ii) Fair value measurement
For information about the methods and assumptions used in determining the fair value of derivatives see note 6(e).
(iii) Hedging reserves
The Group’s hedging reserves disclosed in note 8(c) relate to interest rate swaps.
Hedge effectiveness
Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments
to ensure that an economic relationship exists between the hedged item and hedging instrument. The Group enters into interest rate
swaps that have similar critical terms as the hedged item, such as:
reference rate
reset dates
payment dates
maturities, and
notional amount.
The Group does not hedge 100% of its loans, therefore the hedged item is identified as a proportion of the outstanding loans up to the
notional amount of the swaps. As all critical terms matched during the year, there is an economic relationship.
Hedge ineffectiveness for interest rate swaps may occur due to:
the credit value/debit value adjustment on the interest rate swaps which is not matched by the loan, and
differences in critical terms between the interest rate swaps and loans.
Hedge ineffectiveness in relation to the interest rate swaps was nil for 2024 and 2023.
(e) Capital management
The Group’s objectives when managing capital is to:
safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for
other stakeholders, and
maintain an optimal capital structure to reduce the cost of capital.
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.
11. Financial risk management
2024 ANNUAL REPORT
64
This section provides information which will help users understand how the Group structure affects the financial position and performance
of the Group. In particular, there is information about:
Investments in other entities, and
changes to the structure that occurred during the year
A list of subsidiaries is provided in note 12. This note also discloses details about the Group’s equity-accounted investments.
12. Interests in other entities 65
Group structure
2024 ANNUAL REPORT
65
12. Interests in other entities
(a) Subsidiaries
The Group’s subsidiaries at 30 June 2024 are set out below. Unless otherwise stated, they have share capital consisting solely of ordinary
shares that are held directly by the Group, and the proportion of ownership interests held equals the voting rights held by the Group. The
country of incorporation or registration is also their principal place of business.
Place of business/
country of
incorporation
Ownership interest held
by the Group
2024
2023
Name of entity
%
%
Comptons Caboolture Pty Ltd
Australia
100
100
Comptons Villages Australia Unit Trust
Australia
100
100
Easy Living (Bundaberg) Unit Trust
Australia
100
100
Easy Living Unit Trust
Australia
100
100
ECG No. 1 Pty Ltd
Australia
100
100
EGL Finance Pty Ltd
Australia
100
100
Elizabeth Vale Scenic Village Pty Ltd
Australia
100
100
Eureka Asset Management Pty Ltd
Australia
100
-
Eureka Bowen Pty Ltd
Australia
100
100
Eureka Brassall Pty Ltd
Australia
100
100
Eureka Bundamba Pty Ltd
Australia
100
100
Eureka Care Communities (Morphetville) Pty Ltd
Australia
100
100
Eureka Care Communities (Mount Gambier) Pty Ltd
Australia
100
100
Eureka Care Communities (Salisbury) Pty Ltd
Australia
100
100
Eureka Care Communities (Wynnum) Pty Ltd
Australia
100
100
Eureka Care Communities Pty Ltd
Australia
100
100
Eureka Care Communities Unit Trust
Australia
100
100
Eureka Cascade Gardens (Albert Gardens) Pty Ltd
Australia
100
100
Eureka Cascade Gardens (Ayr) Pty Ltd
Australia
100
100
Eureka Cascade Gardens (Belgian Gardens) Pty Ltd
Australia
100
100
Eureka Cascade Gardens (Bowen) Pty Ltd
Australia
100
100
Eureka Cascade Gardens (Broken Hill) Pty Ltd
Australia
100
100
Eureka Cascade Gardens (Cairns) Pty Ltd
Australia
100
100
Eureka Cascade Gardens (Couran Cove) Pty Ltd
Australia
100
100
Eureka Cascade Gardens (Gladstone) Pty Ltd
Australia
100
100
Eureka Cascade Gardens (Lismore) Pty Ltd
Australia
100
100
Eureka Cascade Gardens (Margate) Pty Ltd
Australia
100
100
Eureka Cascade Gardens (Orange) Pty Ltd
Australia
100
100
Eureka Cascade Gardens (Southport) Pty Ltd
Australia
100
100
Eureka Cascade Gardens (Terranora) Pty Ltd
Australia
100
100
Eureka Cascade Gardens (Tivoli) Pty Ltd
Australia
100
100
Eureka Cascade Gardens (Townsville) Pty Ltd
Australia
100
100
Eureka Cascade Gardens Pty Ltd
Australia
100
100
Eureka Eagleby Pty Ltd
Australia
100
100
Eureka Earlville Pty Ltd
Australia
100
100
Eureka Group Care Pty Ltd
Australia
100
100
Eureka Hervey Bay Pty Ltd
Australia
100
100
Eureka Horsham Pty Ltd
Australia
100
100
Eureka Kingaroy Pty Ltd
Australia
100
100
Eureka Liberty Villas Pty Ltd
Australia
100
100
Eureka Living Pty Ltd
Australia
100
100
Eureka New Auckland Pty Ltd
Australia
100
-
Eureka Property Pty Ltd
Australia
100
100
12. Interests in other entities
2024 ANNUAL REPORT
66
Place of business/
country of
incorporation
Ownership interest held
by the Group
2024
2023
Name of entity
%
%
Eureka Tamworth Pty Ltd
Australia
100
100
Eureka Village Management Pty Ltd (formerly SCV Manager Pty Ltd)
Australia
100
100
Eureka WA Investment Pty Ltd
Australia
100
-
Eureka Whitsunday Pty Ltd
Australia
100
100
Fig Investments Pty Ltd
Australia
100
100
Rockham Two Pty Ltd
Australia
100
100
Rockham Two Unit Trust
Australia
100
100
SCV Leasing Pty Ltd
Australia
100
100
SCV No. 1 Pty Ltd
Australia
100
100
(b) Investments in joint ventures and associates
Set out below are the joint ventures and associates of the Group as at 30 June 2024.The proportion of ownership interest is the same as
the proportion of voting rights held.
% of ownership
interest
Nature of
relationship
Carrying amount
2024
2023
Measurement
method
2024
2023
%
%
$’000
$’000
Name of entity
Affordable Living Unit Trust and Affordable Living
Services Unit Trust 1
50
50
Joint venture
Equity
11,176
10,934
Eureka Villages WA Fund 2
31.6
-
Associate
Equity
9,043
-
20,219
10,934
1. Owns five rental villages in Tasmania. The joint venture comprises Affordable Living Unit Trust and Affordable Living Services Trust, the latter of which
has been dormant since May 2020 and is in the process of being deregistered.
2. Owns six rental villages in Western Australia. The Fund was established in November 2023. The fund comprises two stapled trusts being the Eureka
Villages Operating Trust and the Eureka Villages Property Trust. The trustee is a licensed corporate trustee
(i) Commitments and contingencies
Neither the Affordable Living Unit Trust nor the Eureka Villages WA Fund had any contingent liabilities or commitments at balance date
(2023: $nil).
12. Interests in other entities
2024 ANNUAL REPORT
67
(iii) Summarised financial information for joint ventures and associates
The tables below provide summarised financial information for the investment in a joint venture and an associate. The information
disclosed reflects the amounts presented in the financial statements of the relevant joint venture and associate and not the Group’s share
of those amounts.
Affordable Living Unit Trust Eureka Villages WA Fund
Summarised statement of financial position
2024
2023
2024
2023
Current assets 1
392
132
3,548
-
Non-current assets 2
33,573
30,950
47,218
-
Current liabilities
(659)
(489)
(2,208)
-
Non-current liabilities 3
(10,955)
(8,725)
(20,936)
-
Net assets
22,351
21,868
27,622
-
Reconciliation to carrying amounts
Opening net assets
21,868
14,392
-
-
Issue of units
-
-
27,478
-
Profit for the year
4,303
8,491
1,432
-
Other comprehensive income
-
-
(5)
-
Distributions paid
(3,820)
(1,015)
(1,283)
-
Closing net assets
22,351
21,868
27,622
-
Group’s share in %
50%
50%
31.6% 4
-
Group’s share in $’000
11,176
10,934
8,728
-
Carrying amount
11,176
10,934
9,043
-
1 Including cash and cash equivalents
2 Comprising investment property
3 For Affordable Living Unit Trust – includes non-current borrowings of $11.26 million (30 June 2023: $8.71 million). For Eureka Villages WA Fund –
includes non-current borrowings of $21.00 million (30 June 2023: $nil)
4 For Eureka Villages WA Fund - The Group’s share reduced from 32.76% to 31.6% from 1 February 2024
Affordable Living Unit Trust Eureka Villages WA Fund
2024
2023
2024
2023
Summarised statement of comprehensive income
$’000
$’000
$’000
$’000
Revenue
5,467
5,066
4,077
-
Costs of sales
(2,760)
(2,581)
(1,653)
-
Other income
36
-
-
-
Net gain from fair value adjustment on investment property
2,201
6,465
-
-
Finance income
-
-
75
-
Finance costs
(617)
(459)
(762)
-
Other expenses
(24)
-
(305)
-
Income tax expense 1
-
-
-
-
Profit for the year
4,303
8,491
1,432
-
Other comprehensive income
-
-
(5)
-
Total comprehensive income
4,303
8,491
1,427
-
Group’s share of profit for the year
2,151
4,246
454
-
1 Eureka and other investors are presently entitled to the net income of the respective trusts for tax purposes. As a result, there is no tax payable or tax
expense in the equity accounted investments.
12. Interests in other entities
2024 ANNUAL REPORT
68
This section of the notes provides information about items that are not recognised in the financial statements as they do not satisfy the
recognition criteria.
13. Contingent liabilities and contingent assets 69
14. Commitments 69
15. Events occurring after the reporting period 69
Unrecognised items
2024 ANNUAL REPORT
69
13. Contingent liabilities and contingent assets
(a) Bank guarantees
Bank guarantees are contracts that are measured in accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets.
The Group’s bank guarantees are as follows:
2024
2023
$’000
$’000
Bank Guarantee Facility
Limit
350
350
Unused
261
261
(b) Contingent assets
The Group had no contingent liabilities at 30 June 2024 (2023: $nil).
(b) Contingent assets
The Group had no contingent assets at 30 June 2024 (2023: $nil).
14. Commitments
The Group had no commitments at balance date. In the prior year, the Group disclosed commitments relating to the development of its
Brassall village which have been satisfied during the year.
15. Events occurring after the reporting period
Subsequent to balance date, the following significant transactions have occurred:
Dividend – the Company declared a final dividend in respect of the year of 0.70 cents per share, payable on 14 October 2024
amounting to $2.13 million. The record date is 23 September 2024. The Group’s dividend reinvestment plan is effective for this
dividend.
Appointment of new Chief Executive Officer - On 15 August 2024, the Company announced that Mr Simon Owen has been
appointed to commence in the role of Chief Executive Officer of Eureka Group Holdings Limited on 12 September 2024.
Board changes - Mr Murray Boyte will transition from executive duties to Non-executive Chairman from 12 September 2024.
Mr John Whiteman will commence as an Independent Non-Executive Director from 2 September 2024.Mr Murray Boyte will
transition from executive duties to Non-executive Chairman from 12 September 2024.
13 - 15. Unrecognised items
2024 ANNUAL REPORT
70
This section of the notes includes other information that must be disclosed to comply with the accounting standards and other
pronouncements, but that is not immediately related to individual line items in the financial statements.
16. Related party transactions 71
17. Share-based payments 72
18. Remuneration of auditors 74
19. Earnings per share 74
20. Parent entity financial information 75
21. Summary of material accounting policy information 76
Further details
2024 ANNUAL REPORT
71
16. Related party transactions
(a) Parent entities
The Group is controlled by the following entity:
Name
Type
Place of
incorporation
Eureka Group Holdings Limited
Immediate and ultimate Australian parent entity
Australia
(b) Subsidiaries
Interests in subsidiaries are set out in note 12(a).
(c) Key management personnel compensation
2024
2023
$’000
$’000
Short-term employee benefits
1,173
1,352
Post-employment benefits
90
103
Termination benefits 1
194
-
Share-based payments
25
65
1,482
1,520
1.
This relates to Cameron Taylor who resigned as Chief Executive Officer on 17 July 2023.
Detailed remuneration disclosures are provided in the remuneration report on pages 16 to 18.
(d) Transactions with other related parties
The following transactions occurred with related parties:
Sales to/(purchases from)
related parties
Amounts owed by
(payable to) related parties
2024
2023
2024
2023
$’000
$’000
$’000
$’000
Joint venture
Management fees
394
329
-
50
Recoverable expenses
39
-
-
-
Associate
Fund management fees
124
-
21
-
Asset management fees
42
-
11
-
Acquisition fees
220
-
-
-
Recoverable expenses
490
-
-
-
Director-related entities
Financial services
(35)
-
(5)
-
(e) Loans to related parties
There were no loans to related parties at 30 June 2024 (30 June 2023: $nil).
(f) Authorised representative agreement
During the period, the Group entered into an Authorised Representative Agreement with Leftfield Investments Pty Ltd (Leftfield), a
director-related entity of Mr Greg Paramor. The fee payable to Leftfield by the Group is $60,000 per annum. Leftfield is also the trustee
of the Eureka Villages WA Fund, in which the Group has a 31.61% interest at 30 June 2024 (30 June 2023: nil). Leftfield is entitled to
trustee fees of $30,000 per annum from the Fund, which comprises two stapled trusts.
(g) Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates. Outstanding balances are unsecured and
are repayable in cash.
16. Related party transactions
2024 ANNUAL REPORT
72
17. Share-based payments
(a) Employee Share long-term incentive scheme
The establishment of the Eureka Group Holdings Limited Omnibus Equity Plan (the Plan) was approved by shareholders on 26 October
2023. The Plan is designed to amalgamate retention strategies as well as providing long-term incentives for senior managers and create
alignment with shareholders. Under the Plan, participants are granted Share rights which only vest if certain performance criteria are met.
Participation in the Plan is at the Board’s discretion and no individual has a contractual right to participate in the scheme or to receive any
guaranteed benefits.
The amount of Share rights that will vest depends on:
Total shareholders return compound annual growth rate (TSR CAGR) – 100% weighting, including share price growth,
dividends and capital returns, achieving cumulative annual TSR CAGR of an average of 15% during the Performance Period, with
partial vesting (straight line vesting between 50% and 100%) if 7-15% return is achieved.
The Board retains a discretion to adjust the performance measures if warranted by relevant circumstances at the time of vesting.
Share rights are granted under the long-term incentive program (LTIP) for no consideration and carry no dividend or voting rights. When
vested, each right converts into one Share. The vesting price on which the number of rights granted is based is the weighted average price
at which the Company’s shares are traded on the ASX 5 days after the release of the Eureka Group Annual Report in the financial year to
which they relate.
Share rights outstanding at the end of the year were as follows:
Grant date
Expiry date
of performance
period
Number of
rights
2024
Number of
rights
2023
4 May 2022 (FY22 LTIP)
30 September 2024
126,953
353,783
8 January 2024 (FY24 LTIP)
30 September 2026
585,753
-
Total
712,706
353,783
Set out below are summaries of rights granted under the Program:
2024
2023
Number
Number
FY22 issuance
Balance at start of year
353,783
783,145
Vested and exercised during the year
-
(429,362)
Forfeited during the year
(226,830)
-
Balance at 30 June
126,953
353,783
FY24 issuance
Balance at start of year
-
-
Granted during the year
665,628
-
Forfeited during the year
(79,875)
-
Balance at 30 June
585,753
-
Total
712,706
353,783
17. Share-based payments
2024 ANNUAL REPORT
73
(i) Fair value of rights granted
The assessed fair value at grant date of Share rights granted during the year ended 30 June 2024 was $0.17 per right.
The fair value at grant date is independently determined using an adjusted form of the Black Scholes model which includes a Monte Carlo
simulation model that considers the:
term of the rights
impact of dilution (where material)
share price at grant date
expected price volatility of the underlying share
expected dividend yields
risk-free interest rate for the term of the right, and
correlations and volatilities of the peer group companies.
The model inputs for rights granted during the year included:
rights are granted for no consideration and vest based on TSR CAGR over a three-year period.
grant date: 8 January 2024
expiry date of performance period: 30 September 2026
share price at grant date: $0.44
expected price volatility of the company’s shares: 30.0%
expected dividend yield: 3.37%
risk-free interest rate: 3.81%
The expected price volatility is based on the historic volatility (based on the remaining life of the rights), adjusted for any expected changes
to future volatility due to publicly available information.
The fair value of the rights at grant date of $0.17 was estimated by taking the market price of the Company’s shares on that date less the
present value of expected dividends that will not be received by the executives on their rights during the three-year vesting period.
(b) Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period as part of employee benefit expense were as
follows:
2024
2023
$’000
$’000
Rights issued under long-term incentive schemes
(3)
65
17. Share-based payments
2024 ANNUAL REPORT
74
18. Remuneration of auditors
During the year, the following fees were paid or payable for services provided by Ernst and Young (EY) as the auditor of the parent entity,
Eureka Group Holdings Limited, by EY’s related network firms and by non-related audit firms:
2024
2023
$
$
(a) Auditors of the Group – EY (Australia) and related network firms
Audit and review of financial reports
Group
303,263
217,132
Total audit and review of financial reports
303,263
217,132
Total services provided by EY
303,263
217,132
19. Earnings per share
2024
2023
Cents
Cents
(a) Basic earnings per share
Attributable to the ordinary equity holders of the company
4.37
6.97
(b) Diluted earnings per share
Attributable to the ordinary equity holders of the company
4.36
6.95
(c) Reconciliation of earnings used in calculated earnings per share
2024
2023
$’000
$’000
Basic earnings per share
Profit attributable to the ordinary equity holders of the Company used in
calculating basic earnings per share
13,207
19,158
Diluted earnings per share
Profit attributable to the ordinary equity holders of the Company used in
calculating diluted earnings per share:
13,207
19,158
(d) Weighted average number of shares used as the denominator
2024
2023
Number
Number
Weighted average number of ordinary shares used as the denominator in
calculating basic earnings per share
301,913,269
275,029,000
Adjustments for calculation of diluted earnings per share:
Deferred shares
939,536
461,000
Weighted average number of ordinary shares and potential ordinary shares
used as the denominator in calculating diluted earnings per share
302,852,805
275,490,000
(e) Information concerning the classification of securities
Deferred shares
Rights to deferred shares granted to executives and employees under the Group’s long-term incentive scheme are included in the
calculation of diluted earnings per share assuming all outstanding rights will vest. The rights are not included in the determination of
basic earnings per share. Further information about the rights is provided in note 19.
18. Remuneration of auditors
19. Earnings per share
2024 ANNUAL REPORT
75
y
20. Parent entity financial information
(a) Summary financial information
The individual financial statements for the parent entity, Eureka Group Holdings Limited, show the following aggregate amounts:
2024
2023
$’000
$’000
Financial position of the parent entity
Current assets
796
1,784
Total assets
173,254
150,079
Current liabilities
(3,105)
(1,839)
Total liabilities
(83,207)
(63,386)
Shareholders’ equity
Issued capital
128,775
127,378
Reserves
Cash flow hedges
189
374
Share-based payments
57
60
Accumulated losses
(38,974)
(41,119)
Total equity
90,047
86,693
Results of the parent entity
Profit after tax for the year
6,275
3,512
Other comprehensive (loss)/income
(186)
374
Total comprehensive income
6,089
3,886
At balance date, the Parent had a net current asset deficiency of
$2.31 million (2023: deficiency of $0.06 million). The Group’s
bank loan facility has sufficient undrawn funds for working capital
needs. 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.
(b) Guarantees entered into by the parent entity
From time to time, the parent entities provide financial
guarantees in relation to the debts of its subsidiaries, in the
ordinary course of business.
(c) Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 30
June 2024 or 30 June 2023.
(d) Contractual commitments for the acquisition of plant or
equipment
The Parent had no commitments as at balance date. In the prior
year, the parent disclosed commitments relating to the
development of a subsidiary’s Brassall village which have been
satisfied during the year.
(e) Determining the parent entity financial information
The financial information for the parent entity has been prepared
on the same basis as the consolidated financial statements, except
as set out below.
(i) Investments in subsidiaries
Investments in subsidiaries are accounted for at cost in the
financial statements of Eureka Group Holdings Limited.
(ii) Tax consolidation
Eureka Group Holdings Limited and its wholly owned Australian
controlled entities have implemented the tax consolidation
legislation.
The head entity, Eureka Group Holdings Limited, and the
controlled entities in the tax consolidated group account for their
own current and deferred tax amounts. These tax amounts are
measured as if each entity in the tax consolidated group continues
to be a stand-alone taxpayer.
In addition to its own current and deferred tax amounts, Eureka
Group Holdings Limited also recognises the current tax liabilities
(or assets) and the deferred tax assets arising from unused tax
losses and unused tax credits assumed from controlled entities in
the tax consolidated group.
The entities have also entered into a tax funding agreement under
which the wholly owned entities fully compensate Eureka Group
Holdings Limited for any current tax payable assumed and are
compensated by Eureka Group Holdings Limited for any current
tax receivable and deferred tax assets relating to unused tax
losses or unused tax credits that are transferred to Eureka Group
Holdings Limited under the tax consolidation legislation. The
funding amounts are determined by reference to the amounts
recognised in the wholly owned entities’ financial statements.
The amounts receivable/payable under the tax funding agreement
are due upon receipt of the funding advice from the head entity,
which is issued as soon as practicable after the end of each
financial year. The head entity may also require payment of interim
funding amounts to assist with its obligations to pay tax
instalments.
Assets or liabilities arising under tax funding agreements with the
tax consolidated entities are recognised as current amounts
receivable from or payable to other entities in the Group.
Any difference between the amounts assumed and amounts
receivable or payable under the tax funding agreement are
recognised as a contribution to (or distribution from) wholly owned
tax consolidated entities.
20. Parent entity financial information
2024 ANNUAL REPORT
76
21. Summary of other material accounting policy
information
This note provides a list of other potentially material accounting
policies adopted in the preparation of these consolidated financial
statements to the extent they have not already been disclosed in
the other notes above. These policies have been consistently
applied to all the years presented, unless otherwise stated. The
financial statements are for the group consisting of Eureka Group
Holdings Limited and its subsidiaries.
(a) Basis of preparation
These general-purpose financial statements have been prepared
in accordance with:
Australian Accounting Standards
Interpretations issued by the Australian Accounting
Standards Board, and
the Corporations Act 2001.
Eureka Group Holdings Limited is a for-profit entity for the purpose
of preparing the financial statements.
(i) Compliance with IFRS
The consolidated financial statements of Eureka Group Holdings
Limited also comply with International Financial Reporting
Standards (IFRS) as issued by the International Accounting
Standards Board (IASB).
(ii) 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.
(iii) New and amended 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.
(iv) New standards and interpretations not yet adopted
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.
(b) Principles of consolidation and equity accounting
(i) 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 2024 and the results of all controlled
entities for the year then ended. The effects of all transactions
between entities in the Group are eliminated in full.
Subsidiaries are entities controlled by the Company. Control
exists when the Company is exposed to or has rights to variable
returns from its involvement with the entity and has the ability to
affect those returns through its power to direct the activities of the
entity. In assessing control, potential voting rights that presently
are exercisable or convertible are taken into account. The
financial statements of subsidiaries are included in the financial
report from the date that control commences until the date that
control ceases.
Where the Group loses control over a subsidiary, it derecognises
the assets including goodwill, liabilities and non-controlling
interest in the subsidiary together with any cumulative translation
differences recognised in equity. The Group recognises the fair
value of the consideration received and the fair value of any
investment retained together with any gain or loss in profit or loss.
(ii) Equity accounted investments
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.
Associates
Associates are entities over which the Group has significant
influence but not control or joint control. Significant influence is
the power to participate in the financial and operating policy
decisions of the investee but is not control or joint control over
these policies. This is generally the case where the Group holds
between 20% and 50% of the voting rights. The considerations
made in determining significant influence are similar to those
necessary to determine control over subsidiaries.
Accounting treatment
The Group’s investment in associates and its joint venture are
accounted for using the equity method.
Under the equity method, the investment 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
investee since the acquisition date. Goodwill relating to the
investment 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 investment. Any change in other
comprehensive income (OCI) of the investment is presented as
part of the Group’s OCI. In addition, when there has been a
change recognised directly in the equity of the investee, 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 investee
are eliminated to the extent of the interest in the investment.
The aggregate of the Group’s share of profit or loss of an equity
accounted investment 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 investee.
The financial statements of the investments 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 the investee. At each reporting date, the Group
determines whether there is objective evidence that the
investment in the joint venture or associate is impaired. If there
is such evidence, the Group calculates the amount of impairment
as the difference between the recoverable amount of the
21. Summary of other material accounting policy information
2024 ANNUAL REPORT
77
investee and its carrying value, and then recognises the loss
within the ‘share of profit of equity accounted investments’ in the
statement of profit or loss.
Upon loss of significant influence over an associate or joint
control over a joint venture, the Group measures and recognises
any retained investment at its fair value. Any difference between
the carrying amount of the equity accounted investment upon
loss of significant influence or joint control and the fair value of
the retained investment and proceeds from disposal is
recognised in profit or loss.
(c) 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.
(d) 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.
(e) Income tax
Income tax expense comprises current and deferred tax. Income
tax expense is recognised in profit and loss except to the extent
that it relates to items recognised directly in equity, in which case
it is recognised in equity.
Deferred tax is recognised using the balance sheet method,
providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes. Deferred tax is not
recognised for the differences relating to investments in
subsidiaries to the extent that it is probable that it will not reverse
in the foreseeable future. Deferred tax is measured at the tax
rates that are expected to be applied to the temporary differences
when they reverse, based on the laws that have been enacted or
substantively enacted by the reporting date. Deferred tax assets
and liabilities are offset when there is a legally enforceable right
to offset current tax assets and liabilities and when the deferred
tax balances relate to the same taxation authority. A deferred tax
asset is recognised to the extent that it is probable that future
taxable profits will be available against which the temporary
difference can be utilised. Deferred tax assets are reviewed at
each reporting date and are reduced to the extent that it is no
longer probable that the related tax benefit will be realised.
(f) 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.
21. Summary of other material accounting policy information
2024 ANNUAL REPORT
78
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.
(g) 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.
(h) 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.
(i)
Investment property
Investment property comprises land and/or buildings held to earn
rental income and/or for capital appreciation. In accordance with
applicable accounting standards, the buildings, including plant
and equipment, are not depreciated.
Investment property is initially measured at cost, including
transaction costs. Subsequent to initial recognition, investment
property is stated at fair value, which reflects market conditions
at the reporting date. Gains or losses arising from changes in the
fair values of investment property are recognised in profit or loss
in the period in which they arise.
Transfers are made to (or from) investment property only when
there is a change in use.
For a transfer from investment property to owner-occupied
property, the deemed cost for subsequent accounting is the
fair value at the date of change in use. If owner-occupied
property becomes an investment property, the Group
accounts for such property in accordance with the policy
stated under property, plant and equipment up to the date of
change in use.
For a transfer from investment property to inventory, the
deemed cost for subsequent accounting is the fair value at
the date of change in use. If inventory becomes an
investment property, the Group accounts for it in accordance
with the policy stated under inventory up to the date of
change in use.
For a transfer from investment property to intangibles, the
deemed cost for subsequent accounting is the fair value at
the date of change in use. If an intangible (management
rights) becomes an investment property, the Group
accounts for it in accordance with the policy stated under
intangibles up to the date of change in use.
Transfers are made from investment property to non-current
assets held for sale when the carrying amount will be
recovered principally through a sale transaction rather than
continuing use.
The Group’s policy is to have all investment properties externally
valued at intervals of not less than three years or a third of the
properties each year. Internal valuations are undertaken with
reference to current market conditions and available information
for those investment properties not externally valued at each
reporting date. It is the policy of the Group to review the fair value
of each investment property at each reporting date.
Any gain or loss on disposal of investment property (calculated
as the difference between the net proceeds from disposal and
the carrying amount of the item) is recognised in profit or loss.
(j)
Non-current assets (or disposal groups) held for sale
Non-current assets (or 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 and a sale
is considered highly probable. They are measured at the lower of
their carrying amount and fair value less costs to sell, except for
assets such as deferred tax assets, assets arising from employee
benefits, financial assets and investment property that are carried
at fair value and contractual rights under insurance contracts,
which are specifically exempt from this requirement.
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 a disposal
group) are not depreciated or amortised while they are classified
as held for sale. Interest and other expenses attributable to the
liabilities of a disposal group classified as held for sale continue
to be recognised.
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.
(k) Property, plant and 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
Rate
Method
Plant and
equipment
6-33%
Straight-line or
Diminishing
value
Buildings
2.5%
Straight-line
21. Summary of other material accounting policy information
2024 ANNUAL REPORT
79
(l)
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
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
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 3-15 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
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.
(m) Impairment of assets
Non-financial assets
The carrying amounts of the Group’s non-financial assets are
reviewed at each reporting date to determine whether there is
any indication of impairment. If any such indication exists, the
asset’s recoverable amount is estimated. For goodwill and
intangible assets that have indefinite lives, recoverable amount
is estimated at each reporting date.
The recoverable amount of an asset or cash-generating unit is
the greater of its value in use and its fair value less costs to sell.
In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of
money and the risks specific to the asset. For the purpose of
impairment testing, assets are grouped together into the smallest
group of assets that generates cash inflows from continuing use
that are largely independent of the cash inflows of other assets
or groups of assets (the “cash-generating unit”). The goodwill
acquired in a business combination, for the purpose of
impairment testing, is allocated to cash-generating units that are
expected to benefit from the synergies of the combination.
An impairment loss is recognised if the carrying amount of an
asset or its cash-generating unit exceeds its recoverable
amount. Impairment losses are recognised in profit or
loss. Impairment losses recognised in respect of cash-
generating units are allocated first to reduce the carrying amount
of any goodwill allocated to the units and then to reduce the
carrying amount of the other assets in the unit (group of units) on
a pro rata basis.
Impairment losses recognised in prior periods are assessed at
each reporting date for any indications that the loss has
decreased or no longer exists. Except for goodwill, an impairment
loss is reversed if there has been a change in the estimates used
to determine the recoverable amount. An impairment loss is
reversed only to the extent that the asset’s carrying amount does
not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment
loss had been recognised.
(n) 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.
(o) Financial assets and financial liabilities
Current and non-current financial assets and liabilities within the
scope of AASB 9 are classified as fair value through profit or loss,
21. Summary of other material accounting policy information
2024 ANNUAL REPORT
80
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.
(p) 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.
(q) Derivative financial instruments and hedge accounting
A derivative is a type of financial instrument typically used to
manage risk. A derivative’s value changes over time in response
to an underlying benchmark, such as interest rates, exchange
rates, or asset values, and is entered into for a fixed period. A
hedge is where a derivative is used to manage an underlying
exposure.
The Group is exposed to certain risks relating to its ongoing
business operations. The primary risk managed using derivative
instruments is interest rate risk.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows
of a financial instrument will fluctuate because of changes in
market interest rates. The Group’s exposure to the risk of
changes in market interest rates relates primarily to the Group’s
current and future debt obligations with floating interest rates.
Initial recognition and subsequent measurement
The Group uses derivative financial instruments, such as interest
rate swaps, to hedge its interest rate risk. Such derivative
financial instruments are initially recognised at fair value on the
date on which a derivative contract is entered into and are
subsequently remeasured at fair value. Derivatives are carried
as financial assets when the fair value is positive and as financial
liabilities when the fair value is negative.
The Group’s interest rate swaps are classified as cash flow
hedges because they hedge the exposure to variability in cash
flows that is attributable to a particular risk associated with a
recognised liability.
At the inception of a hedge relationship, Eureka formally
designates and documents the hedge relationship to which it
wishes to apply hedge accounting and the risk management
objective and strategy for undertaking the hedge.
The documentation includes identification of the hedging
instrument, the hedged item, the nature of the risk being hedged
and how the Group will assess whether the hedging relationship
meets the hedge effectiveness requirements (including the
analysis of sources of hedge ineffectiveness and how the hedge
ratio is determined). A hedging relationship qualifies for hedge
accounting
if
it
meets
all
the
following
effectiveness
requirements:
There is “an economic relationship” between the
hedged item and the hedging instrument
The effect of credit risk does not “dominate the value
changes” that result from that economic relationship
and
The hedge ratio of the hedging relationship is the same
as that resulting from the quantity of the hedged item
that Eureka actually hedges and the quantity of the
hedging instrument that Eureka actually uses to hedge
that quantity of hedged item.
Hedges that meet all the qualifying criteria for hedge accounting
are accounted for, as described below.
The effective portion of the gain or loss on the hedging instrument
is recognised in other comprehensive income (OCI) in the cash
flow hedge reserve, while any ineffective portion is recognised
immediately in the statement of profit or loss in other operating
income or expenses.
The Group uses interest rate swaps as hedges of its exposure to
interest rate risk arising from debt obligations. The ineffective
portion relating to interest rate swaps is recognised in other
operating income or expenses.
The amount accumulated in OCI is reclassified to profit or loss
as a reclassification adjustment in the same period or periods
during which the hedged cash flows affect profit or loss.
If cash flow hedge accounting is discontinued, the amount that
has been accumulated in OCI must remain in accumulated OCI
if the hedged future cash flows are still expected to occur.
Otherwise, the amount will be immediately reclassified to profit
or loss as a reclassification adjustment. After discontinuation,
once the hedged cash flow occurs, any amount remaining in
accumulated OCI must be accounted for depending on the
nature of the underlying transaction.
(r) 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.
(s) 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.
21. Summary of other material accounting policy information
2024 ANNUAL REPORT
81
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.
(t) Provisions
Provisions are recognised when the Group has a present
obligation, the future sacrifice of economic benefits is probable,
and the amount of the provision can be measured reliably.
The amount recognised as a provision is the best estimate of the
consideration required to settle the present obligation at reporting
date, taking into account the risks and uncertainties surrounding
the obligation.
(u) 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.
(v) Good 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.
(w) 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.
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.
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
21. Summary of other material accounting policy information
2024 ANNUAL REPORT
82
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.
Short-term leases and leases of low-value assets
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.
(x) 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.
(y) 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.
(z) 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.
(aa) 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 20. 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 a joint venture and associate 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.
(ab) Comparatives
Where necessary, comparative information has been reclassified
to achieve consistency in disclosure with current financial year
amounts and other disclosures.
21. Summary of other material accounting policy information
2024 ANNUAL REPORT
83
As at 30 June 2024
Entity name
Entity type
Country of
incorporation
% of share
capital held
Country of tax
residence
Comptons Caboolture Pty Ltd 1
Trustee
Australia
100%
Australia
Comptons Villages Australia Unit Trust
Trust
Australia
100%
Australia
Easy Living (Bundaberg) Unit Trust
Trust
Australia
100%
Australia
Easy Living Unit Trust
Trust
Australia
100%
Australia
ECG No. 1 Pty Ltd
Body corporate
Australia
100%
Australia
EGL Finance Pty Ltd
Body corporate
Australia
100%
Australia
Elizabeth Vale Scenic Village Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Asset Management Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Bowen Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Brassall Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Bundamba Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Care Communities (Morphetville) Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Care Communities (Mount Gambier) Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Care Communities (Salisbury) Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Care Communities (Wynnum) Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Care Communities Pty Ltd 1
Trustee
Australia
100%
Australia
Eureka Care Communities Unit Trust
Body corporate
Australia
100%
Australia
Eureka Cascade Gardens (Albert Gardens) Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Cascade Gardens (Ayr) Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Cascade Gardens (Belgian Gardens) Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Cascade Gardens (Bowen) Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Cascade Gardens (Broken Hill) Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Cascade Gardens (Cairns) Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Cascade Gardens (Couran Cove) Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Cascade Gardens (Gladstone) Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Cascade Gardens (Lismore) Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Cascade Gardens (Margate) Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Cascade Gardens (Orange) Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Cascade Gardens (Southport) Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Cascade Gardens (Terranora) Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Cascade Gardens (Tivoli) Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Cascade Gardens (Townsville) Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Cascade Gardens Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Eagleby Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Earlville Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Group Care Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Hervey Bay Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Horsham Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Kingaroy Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Liberty Villas Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Living Pty Ltd 1
Trustee
Australia
100%
Australia
Eureka New Auckland Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Property Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Tamworth Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Village Management Pty Ltd
(formerly SCV Manager Pty Ltd)
Body corporate
Australia
100%
Australia
Consolidated entity disclosure statement
2024 ANNUAL REPORT
84
As at 30 June 2024
Entity name
Entity type
Country of
incorporation
% of share
capital held
Country of tax
residence
Eureka WA Investment Pty Ltd
Body corporate
Australia
100%
Australia
Eureka Whitsunday Pty Ltd
Body corporate
Australia
100%
Australia
Fig Investments Pty Ltd
Body corporate
Australia
100%
Australia
Rockham Two Pty Ltd 1
Trustee
Australia
100%
Australia
Rockham Two Unit Trust
Trust
Australia
100%
Australia
SCV Leasing Pty Ltd
Body corporate
Australia
100%
Australia
SCV No. 1 Pty Ltd
Body corporate
Australia
100%
Australia
1 . Trustee of a trust in the consolidated entity
Consolidated entity disclosure statement
2024 ANNUAL REPORT
85
In the Directors’ opinion:
(a) the accompanying financial statements and are in accordance with the Corporations Act 2001, including:
(i)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements, and
(ii) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2024 and of its performance for the
financial year ended on that date, and
(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
(c) the accompanying consolidated entity disclosure statement required by section 295(3A) of the Corporations Act is true and
correct.
Note 21(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by section 295A of
the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Directors.
Murray Boyte
Executive Chair
Brisbane
28 August 2024
Directors’ declaration
2024 ANNUAL REPORT
86
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Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
Independent auditor's report to the members of Eureka Group Holdings
Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Eureka Group Holdings Limited (the Company) and its
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
as at 30 June 2024, the consolidated statement of comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, notes to the
financial statements, including a material accounting policy information, the consolidated entity
disclosure statement and the directors' declaration.
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
2024 and of its consolidated financial performance for the year ended on that date; and
b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
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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Independent auditor’s report
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A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
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 performed to address the matter below, provide the basis for our audit opinion on the
accompanying financial report.
Valuation of Investment Properties
Why significant
How our audit addressed the key audit matter
At 30 June 2024, the Group had investment
properties carried at $241.9 million of which
$10.5 million were classified as held for sale.
The Group’s investment properties represent
88% of its total assets at 30 June 2024.
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 consolidated statement of
comprehensive income.
Fair value measurement involves a high
degree of estimation and judgement. The
Group updates its assessment of fair value
each reporting period, taking into
consideration recent external valuations
performed by independent experts. 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 2024.
Notes 8(c) and 8(h) of the financial report
detail the Group’s accounting policy for
investment properties, its methods of fair
value measurement, the key inputs to its fair
value measurement and sensitivities
associated with reasonably possible changes
in those key inputs.
Valuation of investment properties is
considered a key audit matter due to the
significance of this balance and the level of
estimation and judgement involved in
determining fair value.
Our audit procedures included the following:
•
With the assistance of our real estate valuation
specialists we:
•
Evaluated the valuation methodology used by
the Group against the requirements of
Australian Accounting Standards and industry
practice.
•
Assessed the competence, capabilities and
objectivity of the independent valuation experts
used by the Group.
•
Compared the capitalisation rates used to a
reasonable range determined from our analysis
of published reports, recent market transactions
and industry experience.
•
For a sample of investment properties, we
challenged significant assumptions, such as
capitalisation rates, discount rates, occupancy
and future maintainable earnings, taking into
account geographies and characteristics of
individual investment properties. We did this by
analysing market transactions, Eureka’s
historical performance of the investment
property and using our industry experience.
•
We evaluated the reasonableness of key assumptions
of occupancy levels and future maintainable earnings
by comparing them to historical actual results. In
addition, we assessed the future maintainable
earnings assumptions used as an input for internal
valuations by comparing to recent independent
valuations.
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Independent auditor’s report
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A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Why significant
How our audit addressed the key audit matter
•
We tested the mathematical accuracy of the internal
valuation model.
•
For investment properties classified as held for sale,
we assessed the fair value of the properties against
external evidence.
•
We assessed the adequacy of disclosures included in
the Notes to the financial report against the
requirements of relevant accounting standards.
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 2024 Annual Report, but does not include the financial report and
our 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 report after the date of this auditor’s report.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report and
our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of:
►
The financial report (other than the consolidated entity disclosure statement) that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001; and
►
The consolidated entity disclosure statement that is true and correct in accordance with the
Corporations Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
►
The financial report (other than the consolidated entity disclosure statement) that gives a true and
fair view and is free from material misstatement, whether due to fraud or error; and
►
The consolidated entity disclosure statement that is true and correct and is free of misstatement,
whether due to fraud or error.
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A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
•
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
•
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group
to cease to continue as a going concern.
•
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
•
Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
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Liability limited by a scheme approved under Professional Standards Legislation
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 11 to 19 of the directors' report for the
year ended 30 June 2024.
In our opinion, the Remuneration Report of Eureka Group Holdings Limited for the year ended 30
June 2024, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
Wade Hansen
Partner
Brisbane
28 August 2024
90
Independent auditor’s report
2024 ANNUAL REPORT
91
The Company’s directors and management are committed to achieving and demonstrating the highest standards of corporate
governance.
The Company has reviewed its corporate governance practices against the Corporate Governance Principles and Recommendations
(4th edition) published by the ASX Corporate Governance Council.
The 2024 corporate governance statement reflects the corporate governance practices in place throughout the 2024 financial year to 30
June 2024 and was approved by the Board. This can be viewed at www.eurekagroupholdings.com.au/investors/corporate-governance.
Corporate governance statement
2024 ANNUAL REPORT
92
The shareholder information set out below was applicable as at 26 July 2024.
A Distribution of equity securities
Analysis of the number of equity security holders by size of holding and the total percentage of securities in that class held by the
holders in each category:
Ordinary shares
Range
No.
holders
% of
holders
100,001 and over
67
97.18
10,001 to 100,000
200
2.46
5,001 to 10,000
73
0.18
1,001 to 5,000
185
0.15
1 to 1000
329
0.03
854
100.00
B Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest holders of quoted equity securities are listed below:
Ordinary shares
Name
Number
held
% of
issued
shares
1. Aspen Group Limited
109,009,330
35.87
2. Filetron Pty Ltd
59,788,323
19.68
3. HSBC Custody Nominees (Australia) Limited
31,994,594
10.53
4. Citicorp Nominees Pty Ltd
30,556,615
10.06
5. J P Morgan Nominees Australia Pty Limited
29,267,248
9.63
6. Tolani Estate Pty Ltd
4,951,782
1.63
7. BNP Paribas Noms Pty Ltd
3,546,937
1.17
8. National Nominees Limited
3,061,477
1.01
9. UBS Nominees Pty Ltd
1,880,000
0.62
10. Acadia Park Pty Ltd
1,610,182
0.53
11. Keiser Investments Pty Ltd
1,200,044
0.39
12. Mr Murray Boyte & Mrs Jane Elizabeth Boyte
1,172,930
0.39
13. Mr Alister Charles Wright
987,922
0.33
14. Friday Investments Pty Ltd
819,137
0.27
15. Armada Trading Pty Ltd
805,493
0.27
16. Paramor Super Pty Ltd
796,875
0.26
17. Cobbity Garden Centre Pty Ltd
750,000
0.25
18. ACN 002 938 614 Limited
750,000
0.25
19. Mr Glen Coutinho & Mrs Susan Clare Tahir
549,407
0.18
20. HSBC Custody Nominees (Australia) Limited- GSI EDA
518,045
0.17
284,016,341
93.47
Shareholder information
2024 ANNUAL REPORT
93
C Substantial holders
Ordinary shares
Name
Number
held
% of
issued
shares
1. Aspen Group Limited
109,009,330
35.87
2. Filetron Pty Ltd as trustee for Hunter Discretionary Trust
59,788,323
19.68
3. Tribeca Investment Partners 1
35,761,887
11.77
4. Copia Investment Partners Ltd
23,263,769
7.66
5. 1851 Capital Pty Ltd
14,693,725
4.84
242,517,034
79.82
1. Includes Australian Retirement Trust
D Share rights
There are 712,706 unquoted share rights on issue which are held by four (4) employees and were granted under an employee
incentive scheme.
E Voting rights
The voting rights attaching to each class of equity securities are set out below:
(a) Ordinary shares: On a show of hands every member present at a meeting in person or by proxy shall have one vote and
upon a poll each share shall have one vote.
(b) Share rights: No voting rights.
F Shareholders with less than a marketable parcel
There were 302 holders of less than a marketable parcel of 56,047 Shares holding a total of 0.02% shares.
G On Market Buy Back
There is no current on-market buy-back.
H Restricted Securities
The Company has no restricted securities on issue.
I List of Stock Exchanges where the Company’s securities are currently quoted
The Company’s ordinary shares are listed on the Australian Securities Exchange.
Shareholder information
2024 ANNUAL REPORT
94
Directors Murray Boyte, Non-Executive Chairman
Sue Renkin, Non-Executive Director
Russell Banham, Non-Executive Director
Greg Paramor AO, Non-Executive Director
John Whiteman, Non-Executive Director
Senior management Simon Owen, Chief Executive Officer
Laura Fanning, Chief Financial Officer and Company Secretary
Company Secretary Stephanie So
Notice of annual general meeting The annual general meeting of Eureka Group Holdings Limited
Will be held at The Brisbane Club, 241 Adelaide Street, Brisbane City
Time 10am AEST
Date Thursday, 31 October 2024
Registered office Level 5, 120 Edward St
Brisbane QLD 4000
(07) 2145 6322
info@eurekagroupholdings.com.au
Postal address GPO Box 2245
Brisbane QLD 4000
Website www.eurekagroupholdings.com.au
Share register Link Market Services – Brisbane
Level 21, 10 Eagle Street
Brisbane QLD 4000
(02) 8280 7454
Auditor Ernst & Young
111 Eagle St
Brisbane QLD 4000
Solicitors Hamilton Locke
Riverside Centre
Level 28, 123 Eagle Street
Brisbane QLD 4000
Bank National Australia Bank
Level 17, 259 Queen Street
Brisbane QLD 4000
Stock exchange listing Eureka Group Holdings Limited shares are listed on the
Australian Securities Exchange (ASX) with ticker code EGH
Corporate directory
September 2024
2024 ANNUAL REPORT
95