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Y E A R E N D E D 3 0 J U N E 2 0 2 1
2021
Viva Leisure’s mission
is to connect as
many people as
possible to a healthy
lifestyle, delivering
to its members an
uncompromising
fitness experience via
accessible, affordable
and quality facilities
and services.
About this Report
This 2021 Annual Report for Viva Leisure Limited (ACN 607 079 792) has been prepared
as at 1 October 2021. Please note that terms such as Viva Leisure, VVA and Viva Leisure
Limited have the same meaning unless the context requires otherwise.
Viva Leisure is committed to reducing the environmental footprint associated with the
production of this annual report and printed copies are only posted to shareholders
who have elected to receive a printed copy. Shareholders can request a printed copy of
the Annual Report free of charge by emailing investor.relations@vivaleisure.com.au or by
writing to the Company Secretary, PO Box 1, Mitchell ACT 2911.
c o n t
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O UR LO C ATI O NS AND B RANDS
2020 HI GHLI GHTS
A LET T ER FRO M T HE CHAI R
CE O ’S REPO R T
D IR ECTO R S’ REPO R T
RE M UNER ATI O N R EPO RT ( AUD I TE D)
AU DI TOR S IND EPEND ENCE DE CL ARATI O N
CO RPO R ATE GOV ERNANC E STATE ME NT
CO NSO LI DATED FINANCI AL STAT EM EN TS
Consolidated Statement of Profit or Loss
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
SI GNED R EPO RTS
Directors’ Declaration
Independent Auditor’s Report
AD DI TI O NAL I NFO RM AT IO N FO R L ISTE D CO MPANIE S
Shareholder Information
Corporate Directory
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VIVA
16 PLUS
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Viva corporate owned Plus Fitness locations included in Plus numbers
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REVENUE - UP 104.8%
$83.7m
MEMBERSHIPS - UP 33.8%
126,006
LOCATIONS - UP 45.5%
115
EBITDA* - UP 97.0%
$11.95m
EBITDA MARGIN*
- DOWN FROM 14.8%
14.3%
*E xcludi ng imp acts of A ASB 16.
REVENUE
($m)
83.7m
%
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G
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40.9m
33.1m
24.1m
20.7m
18.4m
+105%
EBITDA
($m)
12.0m
+97%
C A G R + 4 6 %
7.3m
6.1m
5.2m
3.3m
1.8m
FY2016 FY2017 FY2018 FY2019 FY2020 FY2021
FY2016 FY2017 FY2018 FY2019 FY2020 FY2021
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MEMBERS
298,376
EBITDA
MARGIN
(%)
C A G R +62%
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+217%
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5
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,
22.0%
21.6%
94,196
54,039
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15.8%
14.8%
14.3%
10.0%
26,754
29,124
35,631
FY2016 FY2017 FY2018 FY2019 FY2020 FY2021
FY2016 FY2017 FY2018 FY2019 FY2020 FY2021
HEALTH CLUBS & OTHERS
HIIT REPUBLIC
PLUS FITNESS (AU/NZ)
Plus Fitness Corporate Owned locations
now in Health Club & others
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Dear Fellow Shareholders
MEET IN G THE CHALLENGES
On behalf of the Board, I am pleased to present the
Viva Leisure Limited 2021 Annual Report.
The operations for the year have once again been
severely impacted by the effects of COVID-9. Suffice to
say that there are three financial years now impacted
(including the current year). During each of the years,
your Board and management team have not lost
sight of the underpinning strategy to the continued
development of our Company.
The last financial year saw the acquisition of the
Plus Fitness franchisor as an opportunity to add
substantially to the offering formats by the Company.
Over the past 12 months we have worked to further
develop the management skill base associated with
franchising, as complementary to the existing traditional
base of the company. That extension, together with our
continued technology development and support, we
believe, augers well for the future.
The recent announcements of expected location re-
openings, based on vaccination rates, is welcomed. We
are sure that the whole community looks forward to a
future uninterrupted by the pandemic.
Once again, in 2021 our staff have been magnificent
in the face of the stress of closedowns, re-openings
and further closedowns. We do not underestimate the
personal toll on all of our staff, all of whom have shown
resilience and understanding of the difficult position
imposed by various Governments.
The continued support of our shareholders by
subscribing to the capital raise in the 2021 year, and
recently, evidences the continued appreciation of the
development of the company and the achievement of
objectives. Likewise, the rapid take-up of suspended
membership once our facilities have been permitted to
be open, is evidence not only of the community need of
the services we provide, but also a wonderful statement
of loyalty by our members. Thank you to each.
Important highlights in the COVID-19 affected results
were:
• Whilst every step has been taken for the
rationalisation of costs, there has been an impact to
the financial result.
• Total revenues were $83.7 million compared with
$40.9 million in the financial year ended 30 June
2020, an increase of 104.8%;
• Earnings before Interest, Tax, Depreciation and
Amortisation (EBITDA) increased to $11.95 million
from $6.07 million in the previous year, excluding
the impacts of AASB16;
DIVIDENDS
As set out in the report to shareholders last year and,
as foreshadowed in the 2019 Prospectus, reflecting
Viva Leisure’s growth profile and continuing
investment opportunities, and the present impact of
COVID-19 related closedowns, the Directors confirm
that no dividend will be paid in respect of the 2021
Financial Year.
O PERAT ING HI GHLI GHTS FO R T HE Y E AR
Highlights for the year were:
• An increase in operating locations/clubs from 79 to
115;
• A strong pipeline of new locations secured,
consistent with the strategic vision of growth;
• The hiit republic boutique concept continues to
be rolled out as part of Viva Leisure’s unique hub
and spoke model. In addition, the development of
our new concept Groundup represents the further
extension of the suite of offerings;
• Despite the impact of COVID -19, Viva Leisure
membership increased by over 31,800 members and
additionally, 170,000 Plus Fitness members;
• The acquisition of Plus Fitness franchisor represents
a strong opportunity to extend opportunities to
Viva Leisure, as well as having a small overseas
footprint available for future development.
SO C IAL AND CO M M UNI TY CO M M IT ME NT
Viva Leisure has again continued its commitment to
ongoing support of the local communities in which
we operate. That contribution has continued to be
necessarily moderated in 2021 by the impact of the
pandemic. The Company continues to strive to be a
responsible corporate citizen.
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B OARD AND M ANAGE ME NT
I am delighted that Louise Bolger joined the Board in
July 2021. Louise has a deep corporate and commercial
experience and has made a valued contribution since
her appointment.
As shareholders will see from the number of meetings
reported, the year has again been highly active.
Not only have the effects of COVID-19, but also the
continued acquisitions achieved and proposed have
been dealt within the meetings and interactivity of the
Board. During all of that time, the spirit of contribution
and sustained vision of outcomes sought, together
with the continued positive culture, has maintained the
highest quality of relationships between the Board and
management team. The Board and I appreciate the
significant contribution of Harry Konstantinou and the
executive team together with the entire Viva Leisure
team of over 1,600 amazing members.
In closing, I extend the gratitude of the Board to our
shareholders, our team, and our members for their
continued support throughout this most challenging
year.
Yours sincerely,
B R U C E G L A N V I L L E
Chair
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Together with new club openings and acquisitions
during the year, our existing like-for-like locations
continued to grow membership and visitations which
are two key metrics that we constantly monitor.
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As we closed the FY2021 financial year, part of our
business was in lockdown. As I write this in September
2021, we still have parts of the business in lockdown due
to COVID-19, however we now have a clear path out less
than a month away.
It is unfortunate that FY2021 was another year impacted by
COVID-19 for the Viva Leisure business. Since listing in June
2019, the business has not had the opportunity to operate
a full 12 months without interruptions, however as they say
where there is confusion there are opportunities.
There are some significant milestones reached during the
year, and with the pent-up demand expected from the
latest round of lockdowns, we expect to see an acceleration
in growth upon reopening. The importance of a healthy
lifestyle has never been more important than through this
experience, and I truly believe that this now resonates with
more and more members of our community.
Our hiit republic brand has gone from strength to
strength and we now operate in four States and
Territories with 22 locations. I expect this to grow to
approximately 35 locations at the end of this financial
year. This is an outstanding achievement considering
the first hiit republic only opened in March 2019.
The first GroundUp boutique Pilates, Yoga and Barre
studio opened in July 2021 with two further locations
currently being planned. The GroundUp concept builds
on our unique hub and spoke approach to fitness where
one size, service and product does not fulfil all members
needs and requirements.
Key highlights for the year included:
TALENT
• Direct membership increased 33.8% to 126,006
members, and increased to 298,376 members including
the Plus Fitness network of members;
• Locations increased 45.5% to 115, adding a further 36
locations during the year, essentially one new location
joined the Viva Leisure network every 1.4 weeks of the
year;
• Revenue more than doubled to $83.7 million, an
increase of 104.8%; and
• EBITDA was up 97.0% to $11.95 million (excluding the
impacts of AASB-16)
OVE RVIEW
Viva Leisure owned and operated 115 locations as at 30
June 2021. As of the date of this report, this has increased
to 118 locations. This represents a 4-fold increase from
the 29 locations we owned and operated at our IPO in
June 2019.
To support our ambitious future growth, and as we
have done in the past, our executive team is focused
on attracting the best possible talent, as well as
retaining, fostering and offering growth opportunities
to our already bright shining stars. Viva Leisure offers
a unique career path for anyone who wishes to work
in the fitness industry and nearly all of our senior
management have come through the ranks and worked
their way up. Our business is all about experiences,
and these can only be offered sincerely when we have
the very best, working in harmony. Our team is highly
motivated, excited, and constantly educating and
adapting to remain at the forefront.
During the year, our team grew from 1,100 strong
to over 1,600, and each team member plays a very
important part of the experience which we offer our
members. Our senior management team has also
grown which allows us to support the strong strategic
growth prospects which are in front of us. Company-
wide our female/male team mix is now made up of 70%
female and 30% male, up from 67% and 33% in FY2020.
Our Head Office and Management team members are
more evenly split with 48% female and 52% male as at
the end of FY2021. It is important for me and the Viva
Leisure board to be an equal opportunity employer and
our human resources team works hard to ensure the
right balance is maintained.
ACQ UI SI TI O NS
During the financial year, we negotiated, settled and
more importantly, integrated various acquisitions.
These included 15 health club locations in eight separate
acquisitions, which included our first four Plus Fitness
corporate owned locations.
In addition, in August 2020, Viva Leisure completed its
largest ever acquisition to date with the purchase of
the Plus Fitness master franchisor (Australian Fitness
Management). The acquisition has introduced nearly
200 locations to the Viva Leisure network, a new
market segment we can now target, and an existing
network in both New Zealand and India we can expand
on. The Viva Leisure team has learnt and has been
able to contribute a lot to the Plus Fitness business
and team members. Over the next 12-18 months we
expect to start to integrate key Viva Leisure technology
and systems into the Plus Fitness network which will
help our franchisees operate more efficiently and
more profitably.
I am very excited about what the introduction of our
technology can do to the existing Plus Fitness network
to help our franchisees grow their businesses which will,
in turn, grow our business.
T HE FUT URE
The future, while extremely exciting, will continue our
‘more of the same’ model. A model which we have
proven over the past 17 years since we opened our
first location. Viva Leisure is committed to continue
and even accelerate our strategic, controlled and well-
planned growth trajectory in all key market segments
in which we operate and potentially some new markets
we are currently exploring. With the acquisition of the
Plus Fitness master franchisor, Viva Leisure has added
another option to select from in entering new markets.
We now have a combination of brands available to us
which are suitable in all markets and all price-points,
which is something our competitors simply do not
offer nor can easily replicate. We are a dynamic
business that can pivot, adapt and grow.
I expect in the coming twelve months our level of
innovation will surprise not only our members but also
our competitors.
I look forward to leading the team into the next period
of growth, continuing to extend our services into more
markets, increasing the opportunities for our team and
growing the value of the company for our shareholders.
It is encouraging to see so many of our members as
shareholders of the business.
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H A R R Y K O N S T A N T I N O U
Founder, Managing Director and
Chief Executive Officer
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The Directors of Viva Leisure Limited present their
report together with the financial statements of the
consolidated entity, being Viva Leisure Limited and its
controlled entities (the Group) for the financial year
ended 30 June 2021.
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BR UCE GLANV ILLE
Independent Non-Executive Director
Independent Chair
Member of the Audit and Risk Committee and
Chair of the People and Culture Committee
Appointed 12 October 2018
Qualifications
Fellow Chartered Accountants Australia
and New Zealand
Experience
Appointed Board, Committee member
and Chair on 12 October 2018.
Bruce is a Chartered Accountant and was
formerly a partner at Duesburys, Rolins and
Deloitte. He has extensive experience providing
Board leadership and governance in addition
to driving growth strategies to the businesses
he has led.
Other Current Directorships
None
Directorships held in other listed entities
during the three years prior to the current year
None
Interest in Shares and Options
300,000 ordinary shares and options to acquire
a further 200,000 ordinary shares
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HARRY KONSTANTINOU
RHYS HOLLERAN
Managing Director and Chief Executive Officer
Appointed 15 July 2015
Independent Non-Executive Director
Member of the Audit and Risk Committee
Member of the People and Culture Committee
Appointed 12 October 2018
Member of the People and Culture Committee
Appointed 30 September 2020
Qualifications
BA, (University of Canberra)
Experience
Company co-founder and Director since 2004.
Harry has over 25 years of experience
developing, managing and selling technology
services business.
Other Current Directorships
None
Directorships held in other listed entities
during the three years prior to the current year
None
Interest in Shares and Options
23,346,701 ordinary shares and options to
acquire a further 3,090,000 ordinary shares.
Qualifications
Bachelor of Economics and Member of Certified
Practising Accountants Australia
Experience
Appointed Board and Committee member on 30
September 2020.
Rhys has 30 years of executive management
expertise ranging from micro-cap to ASX 200
companies in the media sector including as
Chief Executive of two public listed companies
- RG Capital Radio Limited (ASX:REG) and
Macquarie Media Group (ASX:MMG, now
ASX:SXL)
Other Current Directorships
None
Directorships held in other listed entities
during the three years prior to the current year
None
Interest in Shares and Options
30,000 ordinary shares.
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LOUISE B OLGE R
KYM GALLAGHER
Independent Non-Executive Director
Member of the People and Culture Committee
Appointed 5 July 2021
Qualifications
Bachelor of Laws (Hons)
Bachelor of Arts
Bachelor of Education
Experience
Louise is an experienced telecommunications,
media and technology lawyer and company
secretary having held Director, General Counsel
and Company Secretary roles with various ASX
listed companies. Her experience as a non-
executive director extends to listed and not-for-
profit organisations.
Other Current Directorships
None
Directorships held in other listed entities
during the three years prior to the current year
Superloop Limited (ASX: SLC) resigned 23
November 2018
Interest in Shares and Options
Nil
Company Secretary and Chief Financial Officer
Appointed 12 October 2018
Qualifications
Bachelor of Economics,
Member of Chartered Accountants ANZ
Experience
Kym has considerable experience as the CFO
and other senior management roles of numerous
ASX listed companies, commencing with RG
Capital Radio (ASX:REG) in 2000, followed by
Macquarie Media Group (ASX:MMG) in 2005 and
Southern Cross Media (ASX:SXL) in 2010
Other Current Directorships
None
Directorships held in other listed entities
during the three years prior to the current year
None
Interest in Shares and Options
140,000 ordinary shares and options to acquire
a further 476,667 ordinary shares.
RETIRED DIRECTORS
MARK MCCON N E LL
SUSAN FORR ESTER AM
Non-Executive Director
Independent Non-Executive Director
Member of the People and Culture Committee
Appointed 12 October 2018 and retired on
6 November 2020
Audit and Risk Committee Chair
Appointed 12 October 2018 and retired on
31 December 2020
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PR INC IPA L ACTIVITIES
Operational highlights for the financial year:
• Completed several acquisitions comprising:
The principal activities of the consolidated group during the financial year were the operation of health club services. No
significant change in the nature of these activities occurred during the year.
R EVIEW OF OPERATIONS AND
F IN A NCIA L RESULTS
Financial highlights for the year:
• Total revenues were $83,718,105 compared with $40,855,697 in the financial year ended 30 June 2020;
• Loss before income tax was $8,793,735, compared to a loss of $9,343,618 in the financial year ended 30 June 2020;
• Net loss After Tax (NPAT) from continuing operations and attributable to members was $6,384,898 compared with a
financial year ended 30 June 2020 loss of $6,246,345;
• Cash and cash equivalent reserves is strong at $17,290,971, down from $30,103,095 in the financial year ended 30
June 2020; and
• There was an increase in net assets to $86,352,203 compared to $63,316,761 in the financial year ended 30 June 2020
Impact of AASB16
The statutory financial results have been significantly impacted by the application of AASB16. Below is a reconciliation of
the underlying statutory results to the pre-AASB16 results.
Profit and Loss ($m)
FY21
Statutory
AASB16
Impact
FY21
(pre AASB16)
• An increase in operating locations/clubs from 79 to 115;
• Member numbers increasing from 94,196 at June 2020
to 126,006 at 30 June 2021;
• Now operating 22 hiit republic boutique studios;
COVID-19 Impacts
With the exception of the Group’s ACT clubs, all of Viva
Leisure Limited’s clubs have had intermittent closures
during the financial year due to mandated Government
directives.
The Company has in place a comprehensive safety and
communications plan to keep its members informed and
safe during the closure periods.
Judgement has been exercised in considering the impacts
that the Coronavirus (COVID-19) pandemic has had, or
may have, on the group based on known information. This
consideration extends to the nature of the products and
services offered, customers, supply chain, staffing and
geographic regions in which the group operates.
Revenues and profits were significantly impacted during
the closure periods and where appropriate, this has been
addressed in the specific notes, estimates and judgements
in the Financial Statements. There remains uncertainty
with respect to future events or circumstances which may
continue to impact the financial results of the consolidated
entity.
83,718,105
83,718,105
Dispute with Plus Franchisees
Revenue
Expenses
EBITDA
49,639,347
22,126,667
71,766,014
34,078,758
11,952,091
Depreciation and Amortisation
30,076,823
(21,114,439)
8,962,384
EBIT
Finance Costs
Profit / (loss) Before Tax
Income Tax Expense
Net Profit After Tax
Earnings per share (basic - cents)
4,001,936
2,989,707
12,795,671
(11,098,610)
1,697,061
(8,793,735)
(2,408,837)
(6,384,898)
(8.24)
1,292,646
387,794
904,852
1.17
As announced to the ASX on 17 May 2021, the Company
received a draft statement of claim prepared on behalf of
a number of Plus Fitness franchisees. The draft statement
of claim advised of the possibility of proceedings being
commenced against Viva Leisure and its subsidiary
Australian Fitness Management (AFM).
No claim has been filed with any Court as at the date of
this report, and accordingly no provision or contingent
liability has been recorded. Viva Leisure is confident that
it and its group companies are dealing with franchising
appropriately and in accordance with the law.
All legal costs incurred to date in relation to this matter
have been expensed as incurred.
SI GNIFI CANT C HANGES IN T HE
STATE O F AFFAIR S
During the year, the following significant changes occurred
within the Group:
• Completed a fully underwritten $30 million equity
raising by way of an institutional placement of
approximately 10.34 million ordinary shares at $2.90
• New credit terms were agreed with the
Commonwealth Bank of Australia in relation to
a $35.35 million five-year senior secured facility,
comprising a $25 million Market Rate Loan facility
(currently drawn to $10.00 million) to assist in
financing future acquisitions, a bank guarantee facility
and a direct debit facility
• 100% of the issued capital of Australian Fitness
Management Pty Limited (AFM), the master
franchisor for the Plus Fitness group of health
clubs
• The assets of FitHQ, a health club based in
Campbelltown NSW
• The assets of Active Life, a health club based in
Norman Park, QLD
• The assets of G Fitness, a health club based in
Rhodes, NSW
• The assets of two Coffs Coast health clubs, based
in Moonee and Tormina, NSW
• The assets of four separate Plus Fitness sites,
based in Everton Park and Morayfield, QLD,
Shepparton, VIC, Goulburn, NSW
• Total growth in club numbers from acquisitions and
new club openings were as follows:
• 26 Health clubs
• 10 Hiit Republics
EV ENTS S UB SE QU ENT TO TH E E ND O F TH E
RE PO RT ING PE RI O D
Since the end of the financial year, the Company has
entered into binding agreements or completed the
following acquisitions:
• The assets of One Health, a health club based in South
Morang, VIC
• The assets of Plus Fitness sites in, Manly and Mona
Vale, NSW, Beerwah, QLD
In addition, the Company has opened the Group’s first
GroundUp site – a Reformer and Mat Pilates, Barre and
Yoga studio.
As at the date of this report the Group has mandatory
temporary closures of some of its clubs in NSW, Victoria
and ACT due to COVID-19.
No other matters or circumstances have arisen since the
end of the financial year which significantly affected or
may significantly affect the operations of the consolidated
group, the results of those operations, or the state of
affairs of the consolidated group in future financial years,
other than the impacts of COVID-19 mentioned above.
LI KELY DE VELO PM ENTS A ND E XPE CTE D
RE SU LTS O F OPE RAT IO NS
Likely developments in the operations of the consolidated
group and the expected results of those operations in
future financial years have not been included in this report
as the inclusion of such information is likely to result in
unreasonable prejudice to the consolidated group.
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DIRECTORS’ MEETINGS
D IV ID ENDS
Indemnity of auditors
The number of meetings of the Board (including meetings of Committees of Directors) held during the year and the
number of meetings attended by each Director is as follows:
There were no dividends paid or declared since the start
of the financial year (2020: nil).
Director’s name
Board Meetings
Audit and Risk Committee
People and Culture
Committee
INDEMNITIES GIVEN TO, AND INSURANCE
PREMIUMS PAID FOR AUDITORS AND OFFICERS
The Group has agreed to indemnify its auditors, Hall
Chadwick, to the extent permitted by law, against any
claim by a third party arising from the Group’s breach of its
agreement. The indemnity requires the Group to meet the full
amount of any such liabilities including a reasonable amount
of legal costs.
Harry Konstantinou
Bruce Glanville
Mark McConnell*
Susan Forrester^
Rhys Holleran
A
17
17
6
10
13
B
17
17
6
10
13
A
0
3
0
1
2
B
2
3
1
1
2
A
4
6
5
5
1
B
4
6
5
5
1
*Resigned 6 November 2020 ^Resigned 31 December 2020
Where:
• column A: is the number of meetings the Director was entitled to attend
• column B: is the number of meetings the Director attended
During the year, there were 8 scheduled Board Meetings. The additional meetings held and attended by Directors were
for special matters, such as for acquisitions, capital raises and COVID-19 matters.
UN ISSUED SHARES UNDER OPTION
Unissued ordinary shares of the Company under option at the date of this report are:
Date options granted
Expiry date
Exercise price of shares
($)
Number under option
2-May-19
2-May-19
7-Jun-19
30-Oct-19
12-Nov-20
2-May-23
2-May-23
31-Aug-23
31-Aug-24
16-Oct-25
1.34
1.43
0.00
0.00
3.34
1,400,000
1,000,000
295,000
295,000
1,213,334
4,203,334
These options were issued under either the LTI, Tranche 1 or Tranche 2 Plans (described in Note 20.2 to the financial
statements) and have been allotted to individuals on conditions as follows:
• LTI Plan Options: The vesting of those options and will be subject to the satisfaction of appropriate service-based
conditions and/or performance hurdles determined by the Board. Options issued under the LTI program expire on
the earlier of their expiry date or termination of the employee’s employment;
• Tranche 1 and Tranche 2 Plan Options: The options are currently vested. Options issued under the Tranche 1 and
Tranche 2 program expire four years from the date of grant of the options.
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S HARES ISSUED DURING OR SINCE THE E ND
OF TH E YEA R AS A RESULT OF EXERCISE
OF O PTION S
There were 100,000 issued ordinary shares as a result of
the exercise of options during the financial year.
ENVIRONMENTAL LEGI SLATION
The consolidated 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 in
Australia.
Insurance of Officers
Non-audit services
During the year, Viva Leisure paid a premium to insure
officers of the Group. The officers of the Group covered by
the insurance policy include all Directors and Secretaries.
The liabilities insured are legal costs that may be incurred
in defending civil or criminal proceedings that may be
brought against the officers in their capacity as officers
of the Group, and any other payments arising from
liabilities incurred by the officers in connection with such
proceedings, other than where such liabilities arise out of
conduct involving a wilful breach of duty by the officers
or the improper use by the officers of their position or of
information to gain advantage for themselves or someone
else to cause detriment to the Group.
Details of the amount of the premium paid in respect of
insurance policies are not disclosed as such disclosure is
prohibited under the terms of the contract of insurance.
The Group has not otherwise, during or since the end of
the financial year, except to the extent permitted by law,
indemnified or agreed to indemnify any current or former
officer of the Group against a liability incurred as such by
an officer. No indemnities have been given or insurance
premiums paid, during or since the end of the financial
year, for any person who is or has been an officer or
auditor of the consolidated group.
Indemnity of officers
The Company has entered into deeds of access, indemnity
and insurance with each Director (Director’s Protection
Deed) which confirm and extend the Director’s statutory
and general law rights of access to Board papers and the
books and records of the Company and its Subsidiaries.
The Director’s Protection Deeds provide that the Director
be allowed access to and a copy of records in certain
circumstances.
In accordance with the Constitution, the Company must
indemnify any current and former Directors and officers
of the Company and its Subsidiaries against any liability
incurred by that person in that capacity, including legal
costs. The Director’s Protection Deed also requires the
Company to indemnify the Director for liability incurred as
an officer of the Company and its Subsidiaries, including
reasonably incurred legal costs, to the maximum extent
permitted by law.
The Constitution also allows the Company to enter into
and pay premiums on contracts insuring any liability
incurred by any current and former Directors and officers
of the Company and its Subsidiaries, which is incurred by
them in that capacity, including legal costs.
Accordingly, the Director’s Protection Deed requires the
Company to maintain, to the extent permitted by law,
an insurance policy which insures Directors and officers
against liability as a Director or officer of the Company
and its Subsidiaries.
During the year, Hall Chadwick, the Company’s auditors,
performed certain other services in addition to their statutory
audit duties.
The Board of directors has considered the position and,
in accordance with the advice received from the audit
committee, is satisfied that the provision of the non-
audit services is compatible with the general standard of
independence for auditors imposed by the Corporations
Act 2001. The directors are satisfied that the provision of
non-audit services by the auditor, as set out below, did not
compromise the auditor independence requirements of the
Corporations Act 2001 for the following reasons:
• All non-audit services have been reviewed by the audit
committee to ensure they do not impact the impartiality
and objectivity of the auditor; and
• None of the services undermine the general principles
relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants.
Details of the amounts paid to the auditors of the Company,
Hall Chadwick, for audit and non-audit services provided
during the year are set out in Note 26 to the financial
statements. The total paid for non-audit services was
$26,500. This comprised tax and other business services.
PRO C EED INGS O N B E HAL F OF TH E
CO NSO LI DATED GRO UP
No person has applied for leave of Court to bring
proceedings on behalf of the consolidated group or intervene
in any proceedings to which the consolidated group is a
party for the purpose of taking responsibility on behalf of the
consolidated group for all or any part of those proceedings.
The consolidated group was not a party to any such
proceedings during the year.
AU DI TO R’S I NDEPE NDE NCE DE CLA RATIO N
A copy of the auditor’s independence declaration as required
under section 307C of the Corporations Act 2001 is set out
on page 31.
This directors’ report including the Remuneration Report
is signed in accordance with a resolution of the Board of
Directors:
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H A R R Y K O N S T A N T I N O U
D i r e c t o r
Dated this
17 day of AUGUST 2021.
1 5
1 6
rem u n e ra t i o n
re po rt AUDITED
• fixed remuneration being annual salary including
• short term incentives (STIs), being cash based
directly related statutory obligations;
payments;
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The Directors of Viva Leisure Ltd (Viva Leisure, the
Group, or the Company) present the Remuneration
Report for Non-Executive Directors, Executive Directors
and other Key Management Personnel, prepared in
accordance with the Corporations Act 2001 and the
Corporations Regulations 2001.
The Remuneration Report is set out under the following
main headings:
a. Principles used to determine the nature and
amount of remuneration;
b. Details of remuneration;
c. Service agreements; and
d. Share-based remuneration
A . P RINC IP LES USED TO DETERMINE TH E
N AT URE A ND AMOUNT OF REMUNERATION
The principles of the Group’s executive strategy and
supporting incentive programs and frameworks are:
• to align rewards to business outcomes that deliver
value to shareholders;
• to drive a high performance culture by setting
challenging objectives and rewarding high
performing individuals; and
• to ensure remuneration is competitive in the
relevant employment market place to support the
attraction, motivation and retention of executive
talent
Viva Leisure has structured a remuneration framework
that is market competitive and complementary to the
reward strategy of the Group.
The Board has established a People and Culture
Committee which operates in accordance with its
charter as approved by the Board and is responsible for
determining and reviewing compensation arrangements
for the Directors and the Executive Team.
The Committee has engaged independent remuneration
consultants to provide any necessary information to
assist in the discharge of its responsibilities (refer to the
disclosures below).
The remuneration structure that has been adopted by
the Group consists of the following components:
•
long term incentives (LTIs), being participation
in the form of options. The People and Culture
Committee assess the appropriateness of the
nature and amount of remuneration on a periodic
basis by reference to recent employment market
conditions with the overall objective of ensuring
maximum stakeholder benefit from the retention of
a high quality Board and Executive Team.
The payment of incentive salaries, share options and
other incentive payments are reviewed by the People
and Culture Committee annually as part of the review
of executive remuneration and a recommendation is
put to the Board for approval. All incentive salaries,
options and incentives are linked to pre-determined
performance criteria, and subject to the usual discretion
of the Board.
Short Term Incentives (STIs)
Performance measures involve the use of annual
performance objectives, metrics, performance
appraisals and continuing emphasis on living the
Company values.
The performance measures are set annually after
consultation with the Board and executives and are
specifically tailored to the areas where each executive
has a level of control. The measures target areas the
Board believes hold the greatest potential for expansion
and profit and cover financial and non-financial
measures.
Entitlement to an annual STI payment for the Executive
Team is subject to the following:
• the achievement of targets as against key
performance indicators (KPIs) and the budget
adopted by the Board for the financial year ending
30 June of each year;
• an unqualified audit report for that financial year;
• the People and Culture Committee will assess
whether those KPIs have been achieved or
otherwise and provide a recommendation to the
Board;
• where the KPIs are only partially achieved, the
Board will, wholly at its sole discretion, determine
the basis upon which any STI payment will be
calculated in those circumstances; and
• any STI amount is only payable upon finalisation of
the financial accounts by the Company.
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Long Term Incentives (LTIs)
The table below describes the performance hurdles and vesting conditions that apply as at the date of this report and in
relation to the 1,803,334 options granted to senior executives:
Earnings per Share (EPS) and Total Shareholder Return (TSR) Cumulative Compound Annual Growth Rate (CAGR)
The percentage of options that vest for each % EPS CAGR is illustrated in the following table:
LTIs (Granted 7 June 2019)
EPS CAGR over the two Financial Years Ending 30 June 2021
Percentage of Options that Vest
Less than 15% (minimum Target)
0%
15% to 20% (within target range)
50% - 100%
(on a straight-line basis)
Greater than 20% (above maximum target)
100%
LTIs (Granted 30 October 2019)
EPS CAGR over the three Financial Years Ending 30 June 2022
Percentage of Options that Vest
Less than 15% (minimum Target)
0%
15% to 20% (within target range)
50% - 100%
(on a straight-line basis)
Greater than 20% (above maximum target)
100%
LTIs
(Granted 12 November 2020)
Tranche 1 (50% of Options
– based on EPS CAGR)
Tranche 2 (50% of Options
– based on TSR CAGR)
CAGR over the three Financial
Years Ending 30 June 2023
Percentage of Options that Vest
Percentage of Options that Vest
Less than 10% (minimum Target)
0%
10% to 15% (within target range)
50% - 100% (on a straight-line
basis)
Greater than 15%
(above maximum target)
100%
0%
0%
100%
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• For the purposes of the above performance hurdles, EPS means the Basic Earnings per Share calculated by
reference to the Company’s audited financial statements.
• For the purposes of the above performance hurdles, TSR means Total Shareholder Return and will be measured
using the VVA 20-day Volume Weighted Average Market Price (VWAP) for the twenty (20) trading days
commencing from the announcement of results for the financial year ended 30 June 2020 (TSR measure start
date) to the same 20 trading period VWAP post the date of announcement of results for the year ended 30 June
2023 (TSR measure end date).
• The Basic EPS may be adjusted for items which the Board, in its discretion, considers should be excluded from
the EPS result (such as items of a one-off and non-recurring nature).
• The performance hurdles will be tested only once the vesting condition has been met by the grantee senior
executive and following the Company’s audited accounts being finalised for each respective financial year end.
US E OF RE MU NERATI ON CO NS ULTANTS
Viva Leisure Limited’s Board engaged the services
of Crichton & Associates to review and to provide
recommendations in respect of the amount and elements
of executive remuneration, including short-term and long-
term incentives.
Crichton & Associates was engaged by, and reported
directly to, the Board of Directors. The agreement for
the provision of remuneration consulting services was
executed by the Chair of the Board of Directors on behalf
of the Board.
Under the terms of the engagement, Crichton &
Associates provided remuneration recommendations as
defined in section 9B of the Corporations Act 2001 for
fees of $28,114 for these services.
Crichton & Associates confirmed that any
recommendations have been made free from undue
influence by members of the Group’s key management
personnel.
The report containing the remuneration recommendations
was provided by Crichton & Associates directly to the
Chair of the Board of Directors.
The Board is satisfied that the recommendations were
made free from undue influence from any members of the
key management personnel.
CO M PANY PE RFO RM ANCE
The tables below set out summary information about the consolidated entity’s earnings and movements in shareholder
wealth for the period from listing to 30 June 2021:
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Revenue
Net profit before tax
Net profit after tax
Share price at start of the year
Share price at end of the year
Interim dividend
Final dividend
Basic earnings pe share*
Diluted earnings per share*
30 June 2021
30 June 2020
30 June 2019*
83,718,105
40,885,697
31,160,220
(8,793,735)
(9,343,618)
3,975,945
(6,384,898)
(6,246,345)
2,855,103
$2.62
$1.64
nil
nil
(8.2)
(7.9)
$0.88
$2.62
nil
nil
(10.9)
(10.4)
N/A
$0.88
nil
nil
5.4
5.2
* 30 June 2019 results did not include the impacts of AASB16 as the standard was not adopted at that date.
1 9
2 0
B. DE TAILS OF REMUNERATION
Details of the nature and amount of each element of the remuneration of each Key Management Personnel (KMP) of Viva
Leisure are shown in the table below:
The relative proportions of remuneration that are linked to performance and those that are fixed for the financial year are
as follows:
Directors and
other Key
Management
Personnel
Short-term
Employee Benefits
Post-
employment
Benefits
Long-term Benefits
Share-
based
Payments
Performance
based on % of
Remuneration
Fixed remuneration
($)
At Risk Short-Term
Incentives (STI)
At risk options
Employee
Year
Cash
salary and
fees ($)
Incentives
($)
Super-
annuation
($)
Long
Service
($)
Termination
benefits ($)
Options
($)
Total
($)
Executive Directors
Harry Konstantinou
2021
425,000
-
2 5,0 00
7,109
(Managing Director)
2020
425,000
90,000
2 5,0 00
7,125
Non-executive Directors
Bruce Glanville*
2021
86,795
(Independent)
2020
89,124
Rhys Holleran
2021
51,962
(Independent)#
2020
-
Mark McConnell
2021
25,385
(Non-Independent)*
2020
53,076
Susan Forrester
2021
37,500
(Independent)^
2020
65,625
Other Key Management Personnel
2021
315,000
-
-
-
-
-
-
-
-
-
25,000
20,620
-
-
-
-
-
-
-
-
-
-
-
-
-
-
25,000
7,009
Kym Gallagher
(Chief Financial
Officer)
Angelo Konstantinou
(Chief Technology
Officer)
Sean Hodges
(Chief Operating
Officer)
Total
Total
2020
275,000
60,000
25,000
4,799
2021
2 1 9 , 1 7 8
-
20,822
8,856
2020
200,000
4 4 ,1 1 9
20,597
3,353
2021
210,045
-
19,954
7,455
2020
175,000
20,000
18,678
13,281
2021
1,370,865
-
115,776
30,429
2020
1,282,825
2 1 4 , 1 1 9
109,895
28,558
1
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0
2
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-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
65,869
522,979
11,689
558,814
12.6%
18.2%
-
-
-
-
-
-
-
-
111 ,794
109,744
51,962
-
25,385
53,076
37,500
65,625
19,907
366,916
5,157
369,956
14,052
262,908
3,438
271,507
6,733
244,187
-
226,959
106,562
1,623,631
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
5.4%
17.6%
5.3%
17.5%
2.8%
8.8%
6.6%
Directors voluntarily reduced Directors fees by 50% during the period 27 March 2020 to 14 June 2020.
*Resigned 6 November 2020, remuneration shown is until the date of retirement
^Resigned 31 December 2020, remuneration shown is until the date of retirement
#Appointed 30 September 2020
% Calculated in accordance with AASB 2: Share Based Payments
Executive Directors
Harry Konstantinou
Other Key Management Personnel
Kym Gallagher
Angelo Konstantinou
Sean Hodges
450,000
Up to 50% of fixed
remuneration
Up to 100% of fixed
remuneration
340,000
240,000
230,000
Up to 25% of fixed
remuneration
Up to 40% of fixed
remuneration
Up to 25% of fixed
remuneration
Up to 40% of fixed
remuneration
Up to 15% of fixed
remuneration
Up to 20% of fixed
remuneration
Since the long-term incentives for the financial year are provided exclusively by way of options, the percentages disclosed
also reflect the value of remuneration consisting of options.
The relative proportions of remuneration that are linked to performance and those that are fixed for subsequent financial
years are as follows:
Fixed remuneration
($)
At Risk Short-Term
Incentives (STI)
At risk options
Executive Directors
Harry Konstantinou
Other Key Management Personnel
Kym Gallagher
Sean Hodges
FY2022 changes to STIs and LTIs
650,000
Up to 40% of fixed
remuneration
Up to 60% of fixed
remuneration
380,000
264,000
264,000
Up to 25% of fixed
remuneration
Up to 30% of fixed
remuneration
Up to 25% of fixed
remuneration
Up to 30% of fixed
remuneration
Up to 25% of fixed
remuneration
Up to 30% of fixed
remuneration
Based on remuneration structure review conducted by the People and Culture Committee there is no change to the
underlying performance metrics for either the FY22 STI or LTI. The performance targets have been adjusted by the Board
to reflect the current market conditions and align incentives with shareholder interests.
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20,284
1,655,681
14.2%
Angelo Konstantinou
2 1
2 2
1
2
0
2
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C . SERVIC E AGREEMENTS
Remuneration and other terms of employment for the Executive Directors and other Key Management Personnel are
formalised in a Service Agreement. The major provisions of the agreements relating to remuneration for the financial year
are set out below:
Employee
Number
granted
Grant date
Value per
Option at
Grant Date
($)
Value of
Options at
Grant Date
($)
Number
Exercised
Exercise
Proceeds
($)
Options
held at
Balance
Date
Vesting
and First
Exercise
Date
Last
Exercise
Date
Employee
Base Remuneration
($)
Term of Agreement
Notice Period
Non-Executive Directors
Directors and other Key Management Personnel
Harry Konstantinou
4 5 0 , 0 0 0
Three years
Six months
Kym Gallagher
3 4 0 , 0 0 0
Three years
Three months
Angelo Konstantinou
24 0 , 0 0 0
Three years
Three months
Bruce Glanville
Tranche 1
200,000
2-May-19
0.055
11,064
-
-
200,000
7-Jun-19
2-May-23
Susan
Forrester*
Tranche 1
100,000
2-May-19
0.055
5,532
100,000
134,000
-
7-Jun-19
2-May-23
Other Key Management Personnel
Sean Hodges
2 3 0 , 0 0 0
Three years
Three months
Tranche 1
100,000
2-May-19
0.055
The major provisions of the agreements relating to remuneration for subsequent financial years are set out below:
Employee
Base Remuneration
($)
Term of Agreement
Notice Period
Harry Konstantinou
65 0,000
Three years
Six months
Kym Gallagher
3 8 0 , 0 0 0
Three years
Three months
Angelo Konstantinou
2 6 4 , 0 0 0
Three years
Three months
Sean Hodges
2 6 4 ,0 0 0
Three years
Three months
5,532
-
5,157
Kym Gallagher
LTI
LTI
LTI
75,000
7-Jun-19
-
75,000
30-Oct-19
0.069
226,667
12-Nov-20
0.391
88,587
Tranche 1
100,000
2-May-19
0.055
5,532
Angelo
Konstantinou
LTI
LTI
50,000
7-Jun-19
-
-
50,000
30-Oct-19
0.069
3,438
LTI
160,000
12-Nov-20
Sean Hodges
LTI
76,667
12-Nov-20
0.391
0.391
62,532
3,438
*Resigned 31 December 2020, holdings shown are as at the date of retirement
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100,000
7-Jun-19
2-May-23
75,000
31-Aug-21
31-Aug-23
75,000
31-Aug-22
31-Aug-24
226,667
16-Oct-23
16-Oct-25
100,000
7-Jun-19
2-May-23
50,000
31-Aug-21
31-Aug-23
50,000
31-Aug-22
31-Aug-24
160,000
16-Oct-23
16-Oct-25
76,667
16-Oct-23
16-Oct-25
D. SHARE- BASED REM UNERAT ION
E. S HARES HEL D BY D IR EC TO RS AND KEY M ANAGE ME NT PER S ON NE L
All options refer to options over ordinary shares of the Company, which are exercisable on a one-for- one basis under the
terms of the agreements.
The number of ordinary shares in the Company during the 2021 reporting period held by each of the Group’s key
management personnel, including their related parties, is set out below
Options granted to the Executive Team are under the LTI Plan and under Tranche 1 and Tranche 2 Plans:
• LTI Plan Options: The vesting of those options and will be subject to the satisfaction of appropriate service-based
conditions and/or performance hurdles determined by the Board;
Directors and other Key
Management Personnel
Balance at
Start of Year
Granted as
Remuneration
• Tranche 1 and Tranche 2 Plan Options: These options are currently vested.
Options granted under the LTI, Tranche 1 and Tranche 2 Plans carry no dividends or voting rights.
Details of options over ordinary shares in the Company that were granted as remuneration to each key management
personnel are set out in the table below. Non-Executive Directors are not entitled to participate in the LTI Plan.
No options under the LTI Plan have been exercised or forfeited during the year.
Employee
Number
granted
Grant date
Value per
Option at
Grant Date
($)
Value of
Options at
Grant Date
($)
Number
Exercised
Exercise
Proceeds
($)
Options
held at
Balance
Date
Vesting
and First
Exercise
Date
Last
Exercise
Date
Directors and other Key Management Personnel
Executive Directors
Tranche 1
1,000,000
2-May-19
Tranche 2
1,000,000
2-May-19
Harry
Konstantinou
LTI
LTI
170,000
7-Jun-19
0.055
0.072
-
55,320
72,232
-
-
-
-
-
-
-
-
-
-
-
1,000,000
7-Jun-19
2-May-23
170,000
31-Aug-21
31-Aug-23
170,000
31-Aug-22
31-Aug-24
750,000
16-Oct-23
16-Oct-25
170,000
30-Oct-19
0.069
11,689
LTI
750,000
12-Nov-20
0.391
293,119
Executive Directors
Harry Konstantinou
23,290,066
Non-Executive Directors
Bruce Glanville
Rhys Holleran#
300,000
Other Key Management Personnel
Kym Gallagher
140,000
Angelo Konstantinou
23,230,502
Sean Hodges
40,000
Mark McConnell*
Susan Forrester^
4,543,296
326,668
1,000,000
7-Jun-19
2-May-23
Retired Non-Executive Directors
Received on
Exercised
Options
Shares
Purchased
Shares
Sold
Held at the
End of the
Reporting
Period
-
-
-
-
-
-
-
-
-
-
-
-
-
56,635
-
30,000
-
-
-
-
-
-
23,346,701
300,000
30,000
140,000
1,100,000
22,130,502
6,667
-
46,667
29,400
1,000,000
3,572,696
100,000
-
-
426,668
2 3
2 4
*Resigned 6 November 2020, holdings shown are as at the date of retirement
^Resigned 31 December 2020, holdings shown are as at the date of retirement
#Appointed 30 September 2020
At 30 June 2021 there were no loans outstanding to Directors or Key Management Personnel.
AUDITOR’S
INDEPENDENCE
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2 5
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VIVA LEISURE LIMITED
ABN 76 607 079 792
AND ITS CONTROLLED ENTITIES
AUDITOR’S INDEPENDENCE DECLARATION
UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF VIVA LEISURE LIMITED
In accordance with Section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of Viva Leisure Limited. As the lead
audit partner for the audit of the financial report of Viva Leisure Limited for the year ended 30
June 2021, I declare that, to the best of my knowledge and belief, there have been no
contraventions of:
(i)
the auditor independence requirements as set out in the Corporations Act 2001 in
relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
Hall Chadwick (NSW)
Level 40, 2 Park Street
Sydney NSW 2000
Sandeep Kumar
Partner
Dated: 17 August 2021
A Member of PrimeGlobal
An Association of Independent
Accounting Firms
SYDNEY · PENRITH · MELBOURNE · ADELAIDE · PERTH · DARWIN · BRISBANE
Liability limited by a scheme approved under Professional Standards Legislation
www.hallchadwick.com.au
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2 6
c o rpo ra t e
go ve rn a n c e
STATEMENT
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The Board is committed to achieving and
demonstrating the highest standards of corporate
governance. As such, Viva Leisure Ltd and its
Controlled Entities (the Group) have adopted
the fourth edition of the Corporate Governance
Principles and Recommendations.
The Group’s Corporate Governance Statement for
the financial year ended 30 June 2021 is available
on the investor relations website at
https://investors.vivaleisure.com.au.
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2 7
2 8
c o nSoli date d
PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
StaTem e nt
FOR THE Y EAR ENDED 30 JUN E 2021
Note
2021
$
Earnings per share
2020
Cents
2020
$
2021
Cents
24
1
Basic earnings per share:
Earnings from continuing operations
Diluted earnings per share:
Earnings from continuing operations
(8.2)
(7.9)
(10.9)
(10.4)
Revenue
Rental and outgoings expense
Employee benefits expense
Bank Charges
Advertising and marketing costs
Utilities and cleaning
Licences and subscriptions
Insurances
Repairs and maintenance
Professional fees
Depreciation and amortisation expense
Finance costs
Costs of capital raisings, acquisitions and contractual matters
Other expenses
Loss before income tax
Income tax benefit
Loss for the year
4
83,718,105
40,885,697
(2,021,447)
(135,325)
20
(26,384,475)
(13,551,344)
(1,217,433)
(2,133,953)
(657,908)
(1,322,313)
(6,618,395)
(3,507,656)
(1,984,615)
(473,408)
(1,241,134)
(261,635)
(826,882)
(236,809)
(817,151)
(255,002)
(30,076,823)
(17,006,278)
(12,795,671)
(8,063,229)
(1,044,935)
(1,051,385)
(6,257,916)
(2,798,033)
(8,793,735)
(9,343,618)
2,408,837
3,097,273
(6,384,898)
(6,246,345)
6
5
8
Total other comprehensive income for the year
-
-
Total comprehensive loss for the year
(6,384,898)
(6,246,345)
This statement should be read in conjunction with the notes to the financial statements.
2 9
3 0
2
0
2
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A
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N
N
A
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R
U
S
I
E
L
A
V
I
V
C
O
N
S
O
L
L
I
D
A
T
E
D
S
T
A
T
E
M
E
N
T
P
R
O
F
I
T
O
R
L
O
S
S
A
N
D
O
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H
E
R
C
O
M
P
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E
H
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N
S
I
V
E
I
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a
c i a
n
SiTio
AS AT 30 JUN E 2021
CONSOLIDATED
STATEMENT OF
f i n
o
p
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2
0
2
T
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R
L
A
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N
N
A
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R
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S
I
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L
A
V
I
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ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
Property, plant, and equipment
Right of use assets
Intangible assets
Deferred tax assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Borrowings
Lease liabilities
Contract liabilities
Current tax liabilities
Provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Borrowings
Lease liabilities
Provisions
Deferred tax liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Retained earnings
TOTAL EQUITY
Note
2021
$
2020
$
9
10
11
12
10
14
19
15
16
17
13
19
18
16
21
13
19
21
16
17,290,971
30,103,095
2,719,211
899,521
2,692,697
23,602,400
130,423
51,707,684
204,883,653
47,915,884
69,896,036
2,652,313
158,200
2,814,156
35,727,764
-
28,646,732
176,881,777
20,529,715
57,726,670
374,533,680
283,784,894
398,136,080
319,512,658
6,383,048
2,080,500
22,873,600
4,437,889
1,560,361
1,875,182
39,210,580
7,927,000
197,287,676
6,794,176
60,564,445
272,573,297
311,783,877
86,352,203
5,096,543
1,272,500
14,829,663
863,350
704,386
1,655,033
24,421,475
6,716,000
167,797,430
4,476,841
52,784,151
231,774,422
256,195,897
63,316,761
22
23
116,677,780
(21,607,131)
(8,718,446)
87,375,694
(21,725,385)
(2,333,548)
86,352,203
63,316,761
C
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N
S
O
L
I
D
A
T
E
D
S
T
A
T
E
M
E
N
T
O
F
F
I
N
A
N
C
I
A
L
P
O
S
I
T
I
O
N
This statement should be read in conjunction with the notes to the financial statements.
3 1
3 2
CONSOLIDATED
STATEMENT OF
h
e
c
i n
1
2
0
2
T
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P
E
R
L
A
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N
A
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R
U
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I
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L
A
V
I
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FOR THE Y EAR ENDED
30 JU NE 2021
n
e
g
u it
a
q
s
y
Share Capital
Reserves
Retained
Earnings
(Accumulated
losses)
Total Equity
$
$
$
$
Balance at 1 July 2019
43,715,691
(21,430,110)
3,476,477
25,762,057
Impact of initial recognition of AASB16,
net of tax
-
-
436,320
436,320
Balance at 1 July restated
43,715,691
(21,430,110)
3,912,797
26,198,377
Issue of shares, net of transaction costs
and tax
Common control reserve arising from group
restructure in prior year
Share option premium reserve
43,660,003
-
-
-
(315,559)
20,284
Total transactions with owners
43,660,003
(295,275)
-
-
-
-
43,660,003
(315,559)
20,284
43,364,728
Loss for the year
Total comprehensive loss for the year
attributable to members of the entity
Total transactions with owners and other
transfers
-
-
-
-
(6,246,345)
(6,246,345)
(6,246,345)
(6,246,345)
43,660,003
(295,275)
(6,246,345)
37,118,383
Balance at 30 June 2020
87,375,694
(21,725,385)
(2,333,548)
63,316,760
Balance at 1 July 2020
87,375,694
(21,725,385)
(2,333,548)
63,316,761
Issue of shares, net of transaction costs
and tax
29,162,554
-
Exercise of share options
Share option premium reserve
139,532
-
Total transactions with owners
29,302,086
(5,532)
123,786
118,254
-
-
-
-
-
-
-
-
29,162,554
134,000
123,786
29,420,340
(6,384,898)
(6,384,898)
(6,384,898)
(6,384,898)
Loss for the year
Total comprehensive loss for the year
attributable to members of the entity
Total transactions with owners and
other transfers
29,302,086
118,254
(6,384,898)
23,035,442
C
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N
S
O
L
I
D
A
T
E
D
S
T
A
T
E
M
E
N
T
O
F
C
H
A
N
G
E
S
I
N
E
Q
U
I
T
Y
Balance at 30 June 2021
116,677,780
(21,607,131)
(8,718,446)
86,352,203
This statement should be read in conjunction with the notes to the financial statements.
3 3
3 4
CONSOLIDATED
STATEMENT OF
h
o w S
S
l
a
f
FOR THE YEAR EN DE D
30 JUN E 2021
c
1
2
0
2
T
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P
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A
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N
A
E
R
U
S
I
E
L
A
V
I
V
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Payments of income tax
Note
2021
$
2020
$
95,961,521
45,894,517
(57,098,045)
(32,816,827)
72,568
199,463
(12,795,671)
(8,063,229)
(779,854)
(1,575,870)
Net cash provided by operating activities
25
25,360,519
3,638,054
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of intangibles
(27,105,482)
(17,314,639)
598,208
(755,869)
583,015
(601,652)
Payments for business combinations, net of cash acquired
29
(27,540,181)
(17,729,613)
Net cash (used in) investing activities
(54,803,324)
(35,062,889)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Direct costs of issue of shares
Proceeds from borrowings
Repayment of borrowings
Reduction in equipment leases principal
22
30,139,532
45,000,000
(1,200,000)
(1,848,761)
3,112,500
7,988,500
(1,093,500)
(3,299,791)
(1,759,274)
Reduction in property leases principal
19
(11,028,057)
(2,238,429)
Net cash provided by financing activities
Net decrease in cash held
Cash at beginning of financial year
16,630,684
47,142,036
(12,812,121)
15,717,201
30,103,095
14,385,895
Cash at end of financial year
9
17,290,974
30,103,095
This statement should be read in conjunction with the notes to the financial statements.
C
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3 6
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2
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2
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3
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R
A
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Y
E
H
T
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D
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T
A
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I
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O
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I
F
› NOTE 1 – NATUR E OF OPERATIONS
The principal activities of the consolidated group
during the financial year were health club operations.
No significant change in the nature of these activities
occurred during the year.
› NOTE 2 – GENERAL INFORMATION AND
STATEMENT OF COMPLIANCE
The consolidated general purpose financial statements
of the Group have been prepared in accordance
with the requirements of the Corporations Act
2001, Australian Accounting Standards and other
authoritative pronouncements of the Australian
Accounting Standards Board (AASB). Compliance
with Australian Accounting Standards results in full
compliance with the International Financial Reporting
Standards (IFRS) as issued by the International
Accounting Standards Board (IASB). Viva Leisure
Limited is a for-profit entity and statements are
prepared on accruals basis under the historical cost
convention.
Viva Leisure Limited is the Group’s Ultimate Parent
Company. Viva Leisure Limited is a Public Company
incorporated and domiciled in Australia. The address of
its registered office and its principal place of business is
Unit 7, 141 Flemington Road, Mitchell, ACT, Australia.
The consolidated financial statements for the year
ended 30 June 2021 were approved and authorised for
issue by the Board of Directors on 17 August 2021.
› NOTE 3 – SUMMARY OF
ACCOUNTI NG POLI CIES
a. Overall Considerations
The consolidated financial statements have been
prepared using the significant accounting policies and
measurement bases summarised below.
b. COVID-19
Judgement has been exercised in considering the
impacts that the Coronavirus (COVID-19) pandemic
has had, or may have, on the group based on known
information. This consideration extends to the nature
of the products and services offered, customers,
supply chain, staffing and geographic regions in which
the group operates. The Group has the majority of
NSW, Victorian and ACT locations currently closed
due mandatory shutdowns imposed by the respective
State Governments and there remains uncertainty
with respect to future events or circumstances which
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S
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t
o
n
may continue to impact the financial results of the
consolidated entity.
Assets acquired and liabilities assumed are generally
measured at their acquisition date fair values.
The Directors monitor the Group’s liquidity and believe
that the strong balance sheet position, together
with the ability to raise funds if required, provide a
reasonable expectation that the Group will be able
to pay its debts as and when they become due and
payable. Accordingly, the Directors believe that the
preparation of the financial statements on a going
concern basis is still appropriate.
c. Basis of Consolidation
The Group financial statements consolidate those of
the Parent Company and all of its subsidiaries as at
30 June 2021. The parent controls a subsidiary if it
is exposed, or has rights, to variable returns from its
involvement with the subsidiary and has the ability
to affect those returns through its power over the
subsidiary. All subsidiaries have a reporting date of 30
June. Refer to Note 30 for the list of subsidiaries.
All transactions and balances between Group
companies are eliminated on consolidation, including
unrealised gains and losses on transactions between
Group companies. Where unrealised losses on intra-
group asset sales are reversed on consolidation, the
underlying asset is also tested for impairment from a
group perspective. Amounts reported in the financial
statements of subsidiaries have been adjusted where
necessary to ensure consistency with the accounting
policies adopted by the Group.
Profit or loss and other comprehensive income of
subsidiaries acquired or disposed of during the year are
recognised from the effective date of acquisition, or up
to the effective date of disposal, as applicable.
d. Business Combinations
The Group applies the acquisition method in
accounting for business combinations. The
consideration transferred by the Group to obtain
control of a subsidiary is calculated as the sum of
the acquisition-date fair values of assets transferred,
liabilities incurred and the equity interests issued by
the Group, which includes the fair value of any asset
or liability arising from a contingent consideration
arrangement.
Acquisition costs are expensed as incurred.
The Group recognises identifiable assets acquired and
liabilities assumed in a business combination regardless
of whether they have been previously recognised in the
acquiree’s financial statements prior to the acquisition.
Goodwill is stated after separate recognition of
identifiable intangible assets. It is calculated as the
excess of the sum of: (a) fair value of consideration
transferred, (b) the recognised amount of any non-
controlling interest in the acquiree, and (c) acquisition
date fair value of any existing equity interest in the
acquiree, over the acquisition date fair values of
identifiable net assets. If the fair values of identifiable
net assets exceed the sum calculated above, the excess
amount (i.e. gain on a bargain purchase) is recognised
in profit or loss immediately. See note 15.
e. Fair Value of Assets and Liabilities
Where applicable, the Group measures some of its
assets and liabilities at fair value on either a recurring or
non-recurring basis, depending on the requirements of
the applicable Accounting Standard.
Fair value is the price the Group would receive to sell
an asset or would have to pay to transfer a liability
in an orderly (i.e. unforced) transaction between
independent, knowledgeable and willing market
participants at the measurement date.
As fair value is a market-based measure, the closest
equivalent observable market pricing information
is used to determine fair value. Adjustments to
market values may be made having regard to the
characteristics of the specific asset or liability. The fair
values of assets and liabilities that are not traded in
an active market are determined using one or more
valuation techniques. These valuation techniques
maximise, to the extent possible, the use of observable
market data.
To the extent possible, market information is extracted
from either the principal market for the asset or liability
(i.e. the market with the greatest volume and level of
activity for the asset or liability) or, in the absence of
such a market, the most advantageous market available
to the entity at the end of the reporting period (i.e. the
market that maximises the receipts from the sale of the
asset or minimises the payments made to transfer the
liability, after taking into account transaction costs and
transport costs).
For non-financial assets, the fair value measurement
also takes into account a market participant’s ability to
use the asset in its highest and best use or to sell it to
another market participant that would use the asset in
its highest and best use.
The fair value of liabilities and the entity’s own equity
instruments (excluding those related to share-based
N
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A
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M
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payment arrangements) may be valued, where there is no
observable market price in relation to the transfer of such
financial instruments, by reference to observable market
information where such instruments are held as assets.
Where this information is not available, other valuation
techniques are adopted and, where significant, are
detailed in the respective note to the financial statements.
f. Revenue
Revenue is derived mainly from the sale of health club
membership services to its customers.
To determine whether to recognise revenue, the Group
follows a 5-step process:
(i) Identifying the contract, or otherwise,
with a customer;
(ii) Identifying the performance obligations
(iii) Determining the transaction price
All revenue is stated net of the amount of goods and
services tax.
g. Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of a qualifying asset are
capitalised during the period of time that is necessary to
complete and prepare the asset for its intended use or
sale. Other borrowing costs are expensed in the period in
which they are incurred and reported in finance costs.
h. Goodwill
Goodwill represents the future economic benefits arising
from a business combination that are not individually
identified and separately recognised.
Goodwill is carried at cost less any accumulated
impairment losses. Goodwill is calculated as the excess of
the sum of:
(iv) Allocating the transaction price to the
(i) the consideration transferred at fair value;
performance obligations
(v) Recognising revenue when/as performance
(ii) any non-controlling interest (determined under
either the fair value or proportionate interest
obligation(s) are satisfied
method); and
The health club membership services revenue stream
focuses on providing customers with access to the groups’
gym facilities. Revenue is recognised as the customers
are provided access to the gym. Under AASB 15: Revenue
from Contracts with Customers, this happens over time
as customers pay in advance of receipt of this service.
The consideration received in advance of providing these
services, which is generally two weeks in advance, is
recognised as a contract liability.
Therefore, revenue is recognised over time as the
customer consumes these services. The transaction price
is determined with reference to the contract price as
stated in the customer’s contract.
Franchise Operations
Following the acquisition of Australian Fitness
Management, the following additional revenue recognition
policies are now applicable for the group
The group enters into franchise licence agreements,
whereby franchisees pay an upfront five year licence
fee, and ongoing monthly franchise fees. The licence fee
consideration is received in advance of providing the
services attaching to the licence, which is generally over
a five year period, and is recognised as a contract liability.
The monthly franchise fees are recorded as revenue as
they are derived. The transaction price is determined with
reference to the contract price as stated in the franchise
agreement.
The group provides equipment to franchisees as part
of establishing the licence. The equipment is invoiced in
advance of the supply and is recognised as a contract
liability until the point in time the franchise commences
operation. On commencement of the franchises operation
the revenue is recognised. The transaction price is
determined by the amount invoiced to the franchise.
Interest revenue is recognised using the effective interest
method, which for floating rate financial assets is the rate
inherent in the instrument.
(iii) the acquisition date fair value of any previously
held equity interest;
over the acquisition date fair value of any identifiable
assets acquired and liabilities assumed.
The acquisition date fair value of the consideration
transferred for a business combination plus the acquisition
date fair value of any previously held equity interest shall
form the cost of the investment in the separate financial
statements.
Goodwill on acquisition of subsidiaries is included in
intangible assets.
Goodwill is tested for impairment annually and is allocated
to the Group’s cash-generating units or groups of cash-
generating units, representing the lowest level at which
goodwill is monitored and not larger than an operating
segment. Gains and losses on the disposal of an entity
include the carrying amount of goodwill related to the
entity disposed of.
i. Other Intangible Assets
Intangible assets acquired as part of a business
combination, other than goodwill, are initially measured
at their fair value at the date of acquisition. Intangible
assets acquired separately are initially recognised at cost.
Intangible assets are subsequently measured at cost less
amortisation and any impairment. The gains or losses
recognised in the profit or loss arising from derecognition
of an intangible asset is measured as the difference
between net disposal proceeds and the carrying amount
of the intangible asset. The method and useful lives of
finite life intangibles are reviewed annually. Changes
in expected pattern of consumption or useful life are
accounted for prospectively by changing the amortisation
method or period.
Amortisation
The amortisable amount of all intangibles is amortised
on a straight-line basis over the asset’s useful life to the
consolidated group commencing from the time the asset
is held ready for use.
The amortisation rates used for each class of amortisable
assets are:
Class of Intangible
Trademarks
Capitalised Software
Digital Assets
j. Plant and Equipment
Amortisation
Rate per annum
5-10%
33%
10%
Each class of plant and equipment is carried at cost or fair
value less, where applicable, any accumulated depreciation
and impairment losses.
Plant and equipment are measured on the cost basis and
are therefore carried at cost less accumulated depreciation
and any accumulated impairment losses. In the event the
carrying amount of plant and equipment is greater than
the estimated recoverable amount, the carrying amount
is written down immediately to the estimated recoverable
amount and impairment losses are recognised either in
profit or loss. A formal assessment of recoverable amount
is made when impairment indicators are present (refer to
Note 4 k. for details of impairment).
The cost of fixed assets constructed within the
consolidated group includes the cost of materials, direct
labour, borrowing costs and an appropriate proportion of
fixed and variable overheads.
Subsequent costs are included in the asset’s carrying
amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits
associated with the item will flow to the consolidated
group and the cost of the item can be measured reliably.
All other repairs and maintenance are recognised as
expenses in profit or loss in the financial period in which
they are incurred.
Depreciation
The depreciable amount of all fixed assets including
buildings and capitalised lease assets, but excluding
freehold land, is depreciated on a straight-line basis
over the asset’s useful life to the consolidated group
commencing from the time the asset is held ready for
use. Leasehold improvements are depreciated over the
shorter of either the unexpired period of the lease or the
estimated useful lives of the improvements.
The depreciation rates used for each class of depreciable
assets are:
Class of Fixed Asset
Depreciation
Rate
Plant and equipment
Furniture and fittings
Motor Vehicles
Leased plant and equipment
Leasehold improvements
10-40%
10-20%
15-25%
5-20%
5-20%
The assets’ residual value and useful lives are reviewed,
and adjusted if appropriate, at the end of each reporting
period.
An asset’s carrying amount is written down immediately
to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
Gains and losses on disposals are determined by
comparing proceeds with the carrying amount. These
gains or losses are recognised in profit or loss when the
item is derecognised.
k. Leases
The Group as a lessee
At inception of a contract, the Group assesses if the
contract contains or is a lease. If there is a lease present,
a right-of-use asset and a corresponding lease liability
are recognised by the Group where the Group is a lessee.
However, all contracts that are classified as short-term
leases (ie leases with a remaining term of 12 months or
less) and leases of low value assets are recognised as
operating expenses on a straight-line basis over the term
of the lease.
Initially the lease liability is measured at the present
value of the lease payments still to be paid at the
commencement date. The lease payments are discounted
at the interest rate implicit in the lease. If this rate cannot
be readily determined, the Group uses the incremental
borrowing rate.
• Lease payments included in the measurement of the
lease liability are as follows:
• fixed lease payments less any lease incentives;
• variable lease payments that depend on an index or
rate, initially measured using the index or rate at the
commencement date;
• the amount expected to be payable by the lessee
under residual value guarantees;
• the exercise price of purchase options, if the lessee is
reasonably certain to exercise the options; and
• payments of penalties for terminating the lease, if
the lease term reflects the exercise of an option to
terminate the lease.
The right-of-use assets comprise the initial measurement
of the corresponding lease liability, any lease payments
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made at or before the commencement day and any initial
direct costs. The subsequent measurement of the right-
of-use assets is at cost less accumulated depreciation and
impairment losses.
Right-of-use assets are depreciated over the lease term
or useful life of the underlying asset, whichever is the
shortest.
Where a lease transfers ownership of the underlying
asset or the cost of the right-of-use asset reflects that
the Group anticipates to exercise a purchase option, the
specific asset is depreciated over the useful life of the
underlying asset.
Short-term leases
generating unit’s recoverable amount exceeds its carrying
amount.
m. Financial Instruments
Recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised
when the Group becomes a party to the contractual
provisions of the financial instrument, and are measured
initially at fair value adjusted by transactions costs, except
for those carried at fair value through profit or loss,
which are measured initially at fair value. Subsequent
measurement of financial assets and financial liabilities are
described below.
The Group has elected not to recognise lease liabilities for
short-term leases that have a lease term of 12 months or
less. The Group recognises the lease payments associated
with these leases as an expense on a straight-line basis
over the lease term.
Financial assets are derecognised when the contractual
rights to the cash flows from the financial asset expire,
or when the financial asset and all substantial risks and
rewards are transferred. A financial liability is derecognised
when it is extinguished, discharged, cancelled or expires.
l. Impairment Testing of Goodwill, Other Intangible
Assets and Property, Plant and Equipment
Classification and
subsequent measurement
For impairment assessment purposes, assets are
grouped at the lowest levels for which there are largely
independent cash inflows (cash-generating units). As a
result, some assets are tested individually for impairment
and some are tested at cash-generating unit level.
Goodwill is allocated to those cash-generating units that
are expected to benefit from synergies of the related
business combination and represent the lowest level within
the Group at which management monitors goodwill.
Except for those trade receivables that do not contain a
significant financing component and are measured at the
transaction price in accordance with AASB 15, all financial
assets are initially measured at fair value adjusted for
transaction costs (where applicable)
For the purpose of subsequent measurement, financial
assets other than those designated and effective as
hedging instruments are classified into the following
categories upon initial recognition:
Cash-generating units to which goodwill has been
allocated (determined by the Group’s management as
equivalent to its operating segments) are tested for
impairment at least annually. All other individual assets or
cash-generating units are tested for impairment whenever
events or changes in circumstances indicate that the
carrying amount may not be recoverable.
An impairment loss is recognised for the amount by
which the asset or cash-generating unit’s carrying amount
exceeds its recoverable amount, which is the higher of fair
value less costs to sell and value-in- use. To determine the
value-in-use, management estimates expected future cash
flows from each cash- generating unit and determines
a suitable interest rate in order to calculate the present
value of those cash flows. The data used for impairment
testing procedures are directly linked to the Group’s latest
approved budget, adjusted as necessary to exclude the
effects of future reorganisations and asset enhancements.
Discount factors are determined individually for
each cash-generating unit and reflect management’s
assessment of respective risk profiles, such as market and
asset-specific risks factors.
Impairment losses for cash-generating units reduce
first the carrying amount of any goodwill allocated to
that cash-generating unit. Any remaining impairment
loss is charged pro rata to the other assets in the cash-
generating unit. With the exception of goodwill, all
assets are subsequently reassessed for indications that
an impairment loss previously recognised may no longer
exist. An impairment charge is reversed if the cash-
• amortised cost
• fair value through profit or loss (FVPL)
• equity instruments at fair value through other
comprehensive income (FVOCI)
• debt instruments at fair value through other
comprehensive income (FVOCI)
Classifications are determined by both:
• The entities business model for managing
the financial asset
• The contractual cash flow characteristics of the
financial assets
All income and expenses relating to financial assets that
are recognised in profit or loss are presented within
finance costs, finance income or other financial items,
except for impairment of trade receivables, which is
presented within other expenses.
Subsequent measurement financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if
the assets meet the following conditions (and are not
designated as FVPL):
• they are held within a business model whose
objective is to hold the financial assets and collect its
contractual cash flows
• the contractual terms of the financial assets give rise
to cash flows that are solely payments of principal and
interest on the principal amount outstanding
After initial recognition, these are measured at amortised
cost using the effective interest method. Discounting is
omitted where the effect of discounting is immaterial. The
Group’s cash and cash equivalents, trade and most other
receivables fall into this category of financial instruments.
Impairment of Financial assets
AASB 9’s impairment requirements use more forward
looking information to recognise expected credit losses
– the ‘expected credit losses (ECL) model’. Instruments
within the scope of the new requirements include
loans and other debt-type financial assets measured at
amortised cost and FVOCI, trade receivables, contract
assets recognised and measured under AASB 15 and loan
commitments and some financial guarantee contracts (for
the issuer) that are not measured at fair value through
profit or loss.
the ability of the borrower to fulfil its contractual cash
flow obligations.
A financial asset is not considered to carry low credit
risk merely due to existence of collateral, or because a
borrower has a risk of default lower than the risk inherent
in the financial assets, or lower than the credit risk of the
jurisdiction in which it operates.
Recognition of expected credit losses in
financial statements
At each reporting date, the Group assesses the credit
risk and recognises a loss allowance if appropriate. Any
movement in the loss allowance from prior year is treated
as an impairment gain or loss in the statement of profit or
loss and other comprehensive income.
The carrying amount of financial assets measured at
amortised cost includes the loss allowance relating to
that asset.
Classification and measurement of financial liabilities
The Group considers a broader range of information when
assessing credit risk and measuring expected credit losses,
including past events, current conditions, reasonable
and supportable forecasts that affect the expected
collectability of the future cash flows of the instrument.
As the accounting for financial liabilities remains largely
unchanged from AASB 139, the Group’s financial liabilities
were not impacted by the adoption of AASB 9. However,
for completeness, the accounting policy is disclosed
below.
In applying this forward-looking approach, a distinction is
made between:
The Group’s financial liabilities include borrowings, trade
and other payables.
• financial instruments that have not deteriorated
significantly in credit quality since initial recognition or
that have low credit risk (‘Stage 1’) and
• financial instruments that have deteriorated
Financial liabilities are initially measured at fair value, and,
where applicable, adjusted for transaction costs unless the
Group designated a financial liability at fair value through
profit or loss.
significantly in credit quality since initial recognition
and whose credit risk is not low (‘Stage 2’).
Subsequently, financial liabilities are measured at
amortised cost using the effective interest method.
Stage 3’ would cover financial assets that have objective
evidence of impairment at the reporting date.
‘12-month expected credit losses’ are recognised for the
first category while ‘lifetime expected credit losses’ are
recognised for the second category.
Measurement of the expected credit losses is determined
by a probability-weighted estimate of credit losses over
the expected life of the financial instrument.
Low credit risk operational simplification approach
If a financial asset is determined to have low credit risk
at the initial reporting date, the Group assumes that the
credit risk has not increased significantly since initial
recognition.
In order to make such a determination that the financial
asset has low credit risk, the Group applies its internal
credit risk ratings or other methodologies using a globally
comparable definition of low credit risk.
A financial asset is considered to have low credit risk if:
• there is a low risk of default by the borrower;
• the borrower has strong capacity to meet its
All interest-related charges and, if applicable, changes in
an instrument’s fair value that are reported in profit or loss
are included within finance costs or finance income.
n. Trade and other payables
Trade and other payables represent the liabilities for
goods and services received by the consolidated group
that remain unpaid at the end of the reporting period.
The balance is recognised as a current liability with the
amounts normally paid within 30 days of recognition of
the liability.
o. Inventories
Inventories are stated at the lower of cost and net
realisable value. Cost includes all expenses directly
attributable to the manufacturing process as well as
suitable portions of related production overheads,
based on normal operating capacity. Costs of ordinarily
interchangeable items are assigned using the first in, first
out cost formula. Net realisable value is the estimated
selling price in the ordinary course of business less any
applicable selling expenses.
contractual cash flow obligations in the near term;
p. Income taxes
• adverse changes in economic and business conditions
in the longer term may, but not necessarily will, reduce
Tax expense recognised in profit or loss comprises the
sum of deferred tax and current tax not recognised in
other comprehensive income or directly in equity.
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Current income tax assets and / or liabilities comprise
those obligations to, or claims from, the Australian
Taxation Office (ATO) and other fiscal authorities relating
to the current or prior reporting periods that are unpaid at
the reporting date. Current tax is payable on taxable profit,
which differs from profit or loss in the financial statements.
Calculation of current tax is based on tax rates and tax
laws that have been enacted or substantively enacted by
the end of the reporting period.
Deferred income taxes are calculated using the liability
method on temporary differences between the carrying
amounts of assets and liabilities and their tax bases.
However, deferred tax is not provided on the initial
recognition of goodwill or on the initial recognition of an
asset or liability unless the related transaction is a business
combination or affects tax or accounting profit. Deferred
tax on temporary differences associated with investments
in subsidiaries and joint ventures is not provided if reversal
of these temporary differences can be controlled by the
Group and it is probable that reversal will not occur in the
foreseeable future.
Deferred tax assets and liabilities are calculated, without
discounting, at tax rates that are expected to apply
to their respective period of realisation, provided the
expected rates are enacted or substantively enacted by
the end of the reporting period.
Deferred tax assets are recognised to the extent that it is
probable that they will be able to be utilised against future
taxable income, based on the Group’s forecast of future
operating results which is adjusted for significant non-
taxable income and expenses and specific limits to the use
of any unused tax loss or credit. Deferred tax liabilities are
always provided for in full.
Deferred tax assets and liabilities are offset only when
the Group has a right and intention to set off current tax
assets and liabilities from the same taxation authority.
Changes in deferred tax assets or liabilities are recognised
as a component of tax income or expense in profit or loss,
except where they relate to items that are recognised in
other comprehensive income (such as the revaluation
of land) or directly in equity, in which case the related
deferred tax is also recognised in other comprehensive
income or equity, respectively.
Viva Leisure Limited and its wholly-owned Australian
controlled entities have implemented the tax consolidation
legislation. As a consequence, these entities are taxed as
a single entity and the deferred tax assets and liabilities
of these entities are set off in the consolidated financial
statements.
q. Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits
held at call with banks, other short-term highly liquid
investments with original maturities of three months or
less, and bank overdrafts. Bank overdrafts are shown
within borrowings in current liabilities on the statement of
financial position.
r. Employee Benefits
Short-term employee benefits
Provision is made for the consolidated group’s obligation
for short-term employee benefits. Short-term employee
benefits are benefits (other than termination benefits)
that are expected to be settled wholly before 12 months
after the end of the annual reporting period in which the
employees render the related service, including wages and
salaries. Short-term employee benefits are measured at
the (undiscounted) amounts expected to be paid when
the obligation is settled.
The consolidated group’s obligations for short-term
employee benefits such as wages, salaries and sick leave
are recognised as part of current trade and other payables
in the statement of financial position.
Other long-term employee benefits
Provision is made for employees’ long service leave and
annual leave entitlements not expected to be settled
wholly within 12 months after the end of the annual
reporting period in which the employees render the
related service. Other long-term employee benefits are
measured at the present value of the expected future
payments to be made to employees. Expected future
payments incorporate anticipated future wage and salary
levels, durations of service and employee departures and
are discounted at rates determined by reference to market
yields at the end of the reporting period on government
bonds that have maturity dates that approximate the
terms of the obligations. Upon the remeasurement of
obligations for other long-term employee benefits, the net
change in the obligation is recognised in profit or loss as
part of employee benefits expense.
The consolidated group’s obligations for long-term
employee benefits are presented as non-current provisions
in its statement of financial position, except where the
consolidated group does not have an unconditional right
to defer settlement for at least 12 months after the end
of the reporting period, in which case the obligations are
presented as current provisions.
All employees of the consolidated group receive defined
contribution superannuation entitlements, for which
the consolidated group pays the fixed superannuation
guarantee contribution (currently 9.5% of the applicable
employee’s average ordinary salary) to the employee’s
superannuation fund of choice. All contributions in respect
of employees’ defined contribution entitlements are
recognised as an expense when they become payable.
The consolidated group’s obligation with respect to
employees’ defined contribution entitlements is limited to
its obligation for any unpaid superannuation guarantee
contributions at the end of the reporting period. All
obligations for unpaid superannuation guarantee
contributions are measured at the (undiscounted)
amounts expected to be paid when the obligation is
settled and are presented as current liabilities in the
consolidated group’s statement of financial position.
s. Share-based Employee Remuneration
The Group operates equity-settled share-based
remuneration plans for its employees (see note 20).
None of the Group’s plans feature any options for a cash
settlement.
All goods and services received in exchange for the grant
of any share-based payment are measured at their fair
values. Where employees are rewarded using share-based
payments, the fair values of employees’ services are
determined indirectly by reference to the fair value of the
equity instruments granted. This fair value is appraised
at the grant date and excludes the impact of non-market
vesting conditions (for example profitability and sales
growth targets and performance conditions).
All share-based remuneration is ultimately recognised as
an expense in profit or loss with a corresponding credit to
share option reserve. If vesting periods or other vesting
conditions apply, the expense is allocated over the vesting
period, based on the best available estimate of the number
of share options expected to vest.
Non-market vesting conditions are included in
assumptions about the number of options that are
expected to become exercisable. Estimates are
subsequently revised if there is any indication that the
number of share options expected to vest differs from
previous estimates. Any cumulative adjustment prior to
vesting is recognised in the current period. No adjustment
is made to any expense recognised in prior periods if share
options ultimately exercised are different to that estimated
on vesting.
Upon exercise of share options, the proceeds received net
of any directly attributable transaction costs are allocated
to share capital up to the nominal (or par) value of the
shares issued with any excess being recorded as share
premium.
t. Provisions
Provisions are recognised when the consolidated group
has a legal or constructive obligation, as a result of
past events, for which it is probable that an outflow of
economic benefits will result, and that outflow can be
reliably measured. Provisions are measured using the best
estimate of the amounts required to settle the obligation
at the end of the reporting period.
u. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the
amount of GST, except where the amount of GST incurred
is not recoverable from the Australian Taxation Office
(ATO). In these circumstances the GST is recognised as
part of the cost of acquisition of the asset or as part of an
item of the expense.
Receivables and payables are stated inclusive of the
amount of GST receivable or payable. The net amount of
GST recoverable from, or payable to, the ATO is included
with other receivables or payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST
components of cash flows arising from investing or
financing activities, which are recoverable from or payable
to the ATO, are presented as operating cash flows included
in receipts from customers or payments to suppliers.
v. Comparative Figures
When required by Accounting Standards, comparative
figures have been adjusted to conform to changes
in presentation for the current financial year. The
comparatives reflect the consolidated group.
Where the consolidated group retrospectively applies
an accounting policy, makes a retrospective restatement
of items in the financial statements or reclassifies items
in its financial statements, a third statement of financial
position as at the beginning of the preceding period in
addition to the minimum comparative financial statements
is presented.
w. Changes in Significant Accounting Policies
There were no changes in significant accounting policies
during the year.
x. New and revised Australian Accounting Standards and
Interpretations on issue but not yet effective
At the date of the financial statements, the Group has
not applied the following new and revised Australian
Accounting Standards, Interpretations and amendments
that have been issued but are not yet effective:
Standard/amendment
Effective for annual
reporting periods
beginning on or after
AASB 2020-1 Amendments to Australian Accounting Standards – Classification of
Liabilities as Current or Non-Current and AASB 2020-6 Amendments to Australian
Accounting Standards – Classification of Liabilities as Current or Non-current – Deferral
of Effective Date
AASB 2020-3 Amendments to Australian Accounting Standards – Annual Improvements
2018-2020 and Other Amendments
AASB 2020-8 Amendments to Australian Accounting Standards – Interest Rate
Benchmark Reform – Phase 2
AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of
Accounting Policies and Definition of Accounting Estimates
AASB 2021-3 Amendments to Australian Accounting Standards – Covid-19-Related Rent
Concessions beyond 30 June 2021*
1 January 2022
1 January 2022
1 June 2021
1 January 2023
1 April 2021
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y. Critical Accounting Estimates and Judgements
Inventories
Inventories
› NOT E 5 – LOSS FO R T HE Y E AR
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The directors evaluate estimates and judgements
incorporated into the financial statements based
on historical knowledge and best available current
information. Estimates assume a reasonable expectation
of future events and are based on current trends and
economic data, obtained both externally and within the
consolidated group.
Key estimates and uncertainty
Information about estimates and assumptions that
have the most significant effect on recognition and
measurement of assets, liabilities, income and expenses
is provided below. Actual results may be substantially
different.
Impairment
Impairment
In assessing impairment, management estimates the
recoverable amount of each asset or cash- generating unit
based on expected future cash flows and uses an interest
rate to discount them. Estimation uncertainty relates
to assumptions about future operating results and the
determination of a suitable discount rate.
Useful lives of depreciable assets
Useful lives of depreciable assets
Management reviews its estimate of the useful lives of
depreciable assets at each reporting date, based on the
expected utility of the assets.
Management estimates the net realisable values of
inventories, taking into account the most reliable evidence
available at each reporting date. The future realisation of
these inventories may be affected by future technology
or other market-driven changes that may reduce future
selling prices.
Business combinations
Business combinations
Management uses valuation techniques in determining
the fair values of the various elements of a business
combination. Particularly, the fair value of contingent
consideration is dependent on the outcome of many
variables that affect future profitability.
Lease term and option to extend under AASB16
Lease term and option to extend under AASB16
The lease term is defined as the non-cancellable period
of a lease together with periods covered by an option
to extend the lease if the lessee is reasonably certain
to exercise that option; and also periods covered by an
option to terminate the lease if the lessee is reasonably
certain not to exercise that option.
The decision on whether or not the options to extend are
reasonably going to be exercised is a key management
judgement that the entity will make. The Group determines
the likeliness to exercise on a lease-by-lease basis looking
at various factors such as which assets are strategic and
which are key to future strategy of the entity.
› N OTE 4 –REVENUE AND OTHER INCOME
Revenue from contracts with customers
Income from franchise operations
Other sources of income
Total revenue and other income
The group operates in one segment, health club services.
a. Revenue from contracts with customers:
a. Income from franchise operations:
4a
4a
4b
Timing of revenue recognition
Over time
At a point in time
Total revenue from contracts with customers
b. Other Revenue
Interest received
Rent received
Gain on disposal of property, plant and equipment
Management fees received
Total other revenue
2021
$
2020
$
75,135,620
8,460,040
40,367,123
-
83,595,660
40,367,123
122,445
518,574
83,718,105
40,885,697
75,135,620
40,367,123
8,460,041
-
83,595,660
40,367,123
78,951,201
4,644,459
40,367,123
-
83,595,660
40,367,123
72,568
39,442
10,435
-
122,445
199,463
-
71,616
247,495
518,574
2021
$
2020
$
Loss before income tax from continuing operations includes the following
specific expenses:
• Amounts expensed as part of business combinations and acquisition
4 5 5 , 1 1 1
733,789
opportunities
• Short term lease payments
• Amounts expensed as part of capital raises and debt restructure
• Costs relating to contractual matters with AFM Franchisees
219,027
206,795
383,029
135,325
317,596
-
› NOT E 6 – FI NANCE COSTS AND FI NANCE I NCO ME
Interest expense from borrowings at amortised cost:
External entities
Interest expenses for finance lease arrangements
Total interest expense
› NOT E 7 – SE GM ENT REPO RT I NG
2021
$
2020
$
922,234
11,873,437
12,795,671
758,649
7,304,580
8,063,229
Management have determined that the Group operates in one business segment – health club operations; and one main
geographic segment. Refer to Note 4 for the revenue splits between the revenue with contracts from customers and
franchise operations.
› NOT E 8 – I NCO ME TAX EXPE NSE
The major components of tax expense and the reconciliation of expected tax expense based on the effective tax rate of
Viva Leisure Limited at 27.5% (2020: 27.5%) and the reported tax expense in profit or loss are as follows:
Profit / (loss) before tax
Domestic tax rate
Prima facie tax expense
Adjustment for non-deductible expenses:
Non-deductible expenses
Tax effect of change in tax rate on DTA/DTL
Prior year’s over provision of tax
Income tax (benefit)/expense
Tax expense comprises
Current tax expense
Deferred tax expense
2021
$
2021
$
(8,793,735)
(9,343,618)
30.0%
27.5%
(2,638,121)
(2,569,495)
66,313
-
162,971
14,819
(411,877)
(115,315)
(2,408,837)
(3,097,273)
1,573,022
717,046
(3,981,859)
(3,814,318)
(2,408,837)
(3,097,273)
N
O
T
E
S
T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D
S
T
A
T
E
M
E
N
T
S
F
O
R
T
H
E
Y
E
A
R
E
N
D
E
D
3
0
J
U
N
E
2
0
2
1
4 5
4 6
› N OTE 9 – CASH AND CASH EQUIVALENTS
› NOT E 1 1 – INVE NTO R IES
Cash at bank and on hand
Short-term bank deposits
Cash backed bank guarantees
2021
$
3,261,521
9,678,852
4,350,598
2020
$
3,870,360
23,203,643
3,029,092
17,290,971
30,103,095
Current
At cost or lower of net realisable value
Finished goods
The effective interest rate on short-term bank deposits was 0.01% (2020: 0.65%); these deposits are held at call.
› NOT E 1 2 – OT HER C UR RENT ASSE TS
› N OTE 10 – TRADE AND OTHER RECEIVABL ES
Current
Trade receivables
Other receivables
Sub leases receivable
2021
$
2020
$
2,549,312
112,748
57,151
143,380
2,508,933
-
Current
Prepayments
Bonds and other deposits
2021
$
2020
$
899,521
899,521
158,200
158,200
2021
$
2020
$
991,848
1,700,849
2,692,697
286,260
2,527,896
2,814,156
Total current trade and other receivables
2,719,211
2,652,313
Bonds relate to amounts set aside against rental obligations to landlords where the Company is a lessee.
Non-current
Sub leases receivable
Total non-current trade and other receivables
130,423
130,423
-
-
› NOT E 1 3 - B O RR OWI NGS
Current
>30 days
past due
>60 days
past due
>90 days
past due
Total
$
$
$
$
$
At amortised cost:
Bank loans
2021
Australian Fitness Management - franchise fees
1,979,632
-
-
-
1,979,632
Trade receivables
338,306
20,785
18,848
191,741
569,680
Other receivables and sub leases receivable
169,899
-
-
-
169,899
2,487,837
20,785
18,848
191,741
2,719,211
The amount in current receivables for Australian Fitness Management – licence fees relates to franchise sites that are in
various stages of development. The fees become payable 14 days prior to the club opening.
The net carrying of trade receivables is considered a reasonable approximation of fair value.
Current
Non-current
2021
$
2020
$
2021
$
2020
$
2,080,500
1,272,500
7,927,000
6,716,000
2,080,500
1,272,500
7,927,000
6,716,000
There are several asset specific security interests registered on the PPS Register against members of the Group listed at
Note 30.
In addition, the bank loans mature on 28 May 2025 and the facility agreement specifies the following security interests:
1.
First ranking General Security Interest from each Obligor comprising first ranking charge over all present and after
acquired property.
2. First ranking charge over any assets financed under the Equipment Finance Facility.
3. Account Set offs from Viva Leisure Property Pty Ltd over Deposits totalling $3,250,000 (relating to security for all
cash covered bank guarantees issued in the name of Viva Leisure Property Pty Ltd).
4. The interest rate payable on the drawn balance of the market rate loan is BBSY plus 4.30%, at 30 June 2021 this
amounted to 4.55%
Finance lease liabilities are secured against the underlying leased equipment and are at an average interest rate of 4.8%
1
2
0
2
T
R
O
P
E
R
L
A
U
N
N
A
E
R
U
S
I
E
L
A
V
I
V
N
O
T
E
S
T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D
S
T
A
T
E
M
E
N
T
S
F
O
R
T
H
E
Y
E
A
R
E
N
D
E
D
3
0
J
U
N
E
2
0
2
1
4 7
4 8
› N OTE 14 - P ROPERTY, PLANT AND EQUIPMENT
› NOT E 1 5 – INTANGI B LES
Details of the Group’s property, plant and equipment and their carrying amounts are as follows:
Details of the Group’s intangibles and their carrying amounts are as follows:
Plant and
Equipment
Furniture
and
Fittings
Motor
Vehicles
Leasehold
Improvements
$
$
$
$
Total
$
Gross carrying amount
Balance at 1 July 2020
Additions
5,894,069
1,016,890
9,351,082
358,689
Acquisitions through business combinations
1,942,276
-
319,197
146,771
-
21,416,576
28,646,732
17,248,941
27,105,483
-
1,942,276
Disposals
Depreciation expense
(465,901)
(15,503)
(20,026)
(2,821)
(504,251)
(1,790,063)
(307,351)
(159,868)
(3,225,274)
(5,482,555)
Carrying amount at 30 June 2021
14,931,463
1,052,725
286,074
35,437,422
51,707,684
Gross carrying amount
Balance at 1 July 2020
Additions
Goodwill
Trademarks
Capitalised
Software
Digital
Assets
$
$
$
$
Total
$
19,744,625
126,585
604,033
54,472
20,529,715
-
14,323
738,775
2,771
755,869
Acquisitions through business combination
27,160,604
-
-
-
27,160,604
Amortisation expense
-
(13,283)
(511,060)
(5,961)
(530,304)
Carrying amount at 30 June 2021
46,905,229
127,625
831,748
51,282
47,915,884
At cost
Accumulated depreciation
Written down value
20,222,349
2,315,423
630,788
41,035,766
64,204,326
(5,290,887)
(1,262,697)
(344,714)
(5,598,344)
(12,496,642)
14,931,462
1,052,726
286,074
35,437,422
51,707,684
At cost
Accumulated depreciation
Written down value
46,905,229
159,056
1,711,086
60,873
48,836,244
-
(31,431)
(879,338)
(9,591)
(920,360)
46,905,229
127,625
831,748
51,282
47,915,884
Plant and
Equipment
Furniture
and
Fittings
Motor
Vehicles
Leasehold
Improvements
Total
$
$
$
$
$
Gross carrying amount
Balance at 1 July 2019
Additions
Goodwill
Trademarks
Capitalised
Software
Digital
Assets
$
$
$
$
Total
$
6,163,027
50,470
337,695
12,889
6,564,081
-
84,429
472,170
45,052
601,651
Balance at 1 July 2019
Additions
2,854,883
370,299
168,080
6,375,931
9,769,193
3,122,699
232,725
212,187
13,747,029
17,314,640
Acquisitions through business combinations
1,434,429
533,630
Disposals
Depreciation expense
Carrying amount at 30 June 2020
At cost
Accumulated depreciation
Written down value
(670,698)
(4,931)
-
-
2,328,680
4,296,739
(4,251)
(679,880)
(847,244)
5,894,069
9,460,802
(3,566,733)
5,894,069
(114,833)
(61,070)
(1,030,813)
(2,053,960)
1,016,890
319,197
21,416,576
28,646,732
1,972,439
520,679
23,789,646
35,743,567
(955,549)
(201,482)
(2,373,070)
(7,096,834)
1,016,890
3 1 9,1 97
21,416,576
28,646,732
Acquisitions through business combination
13,581,598
Disposals
Amortisation expense
-
-
-
(1,927)
-
-
-
-
13,581,598
(1,927)
(6,387)
(205,832)
(3,469)
(215,688)
Carrying amount at 30 June 2020
19,744,625
126,585
604,033
54,472
20,529,715
At cost
Accumulated depreciation
Written down value
19,744,625
144,734
972,311
58,102
20,919,773
-
(18,149)
(368,278)
(3,630)
(390,058)
19,744,625
126,585
604,033
54,472
20,529,715
1
2
0
2
T
R
O
P
E
R
L
A
U
N
N
A
E
R
U
S
I
E
L
A
V
I
V
All depreciation charges are included within depreciation, amortisation and impairment of non-financial assets.
All amortisation is included in within depreciation and amortisation expense. Customer contracts are typically short term,
with low barriers to cancellation and as such, no value has been recognised during the year. Prior year balances have
been adjusted to goodwill.
4 9
5 0
N
O
T
E
S
T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D
S
T
A
T
E
M
E
N
T
S
F
O
R
T
H
E
Y
E
A
R
E
N
D
E
D
3
0
J
U
N
E
2
0
2
1
15.1 Impairment Testing
For the purpose of annual impairment testing, the Group has one cash-generating unit which is expected to benefit from
the synergies of the business combinations in which the goodwill arises.
The following key assumptions were used in the value-in-use calculations:
Growth Rate
Discount Rate
Health Clubs
5%
6.55%
The recoverable amount above is determined based on value-in-use calculations. Value-in-use is calculated based on the
present value of cash flow projections over a five-year period plus a terminal value calculated using a terminal growth
rate of 5% less selling costs as determined by management. The present value of the expected cash flows is determined
by applying an estimated weighted average cost of capital (WACC) of 6.55%.
15.2 Growth Rates
The growth rates reflect the estimated long-term average growth rates for mature health clubs.
15.3 Discount Rates
The discount rates reflect appropriate adjustments relating to market risk and any specific risk factors.
15.4 Cash Flow Assumptions
Management’s key assumptions include stable profit margins, based on past experience in this market. The Group’s
management believes that this is the best available input for forecasting this mature market. Cash flow projections reflect
stable profit margins achieved immediately before the budget period. No expected efficiency improvements have been
taken into account and prices and wages reflect publicly available forecasts of inflation for the industry.
Apart from the considerations described in determining the value-in-use of the cash-generating units above, and in Note
3 b. relating to the current COVID-19 lockdowns, management is not currently aware of any other probable changes that
would necessitate changes in its key estimates.
› NOTE 16 – TAX
Non-Current Assets
Property, plant and equipment
Leased assets
Other intangible assets
Non-Current Liabilities
Provisions
Lease liabilities
Deferred legal costs
Current Liabilities
Provisions
Accruals
Lease liabilities
Contract liabilities
Equity
Costs of IPO allocated direct to equity
1 July
2020
$
Recognised
in Equity
Recognised in
Profit and Loss
30 June
2021
$
$
$
289,610
(53,064,533)
(9,228)
1,343,052
50,339,229
624,968
496,510
30,000
4,448,899
-
444,012
4,942,519
-
-
-
-
-
-
-
-
631,399
921,009
(8,400,563)
(61,465,096)
(60,557)
(69,785)
695,201
2,038,253
8,926,715
59,265,944
360,260
985,228
66,045
(9,000)
562,555
21,000
2,333,540
6,782,439
362,555
362,555
(516,523)
4,026,517
290,044
9,331,591
1
2
0
2
T
R
O
P
E
R
L
A
U
N
N
A
E
R
U
S
I
E
L
A
V
I
V
Non-Current Assets
Property, plant and equipment
Leased assets
Other intangible assets
Non-Current Liabilities
Provisions
Lease liabilities
Deferred legal costs
Current Liabilities
Provisions
Accruals
Lease liabilities
Contract liabilities
Equity
Costs of IPO allocated direct to equity
1 July
2019
Recognised
in Equity
Recognised in
Profit and Loss
30 June
2020
$
$
$
$
(77,485)
(2,592,602)
(5,757)
171,408
1,558,931
183,507
184,005
24,750
625,574
418,700
293,906
784,937
-
-
-
-
-
-
-
-
-
367,095
289,610
(50,471,931)
(53,064,533)
(3,471)
(9,228)
1,171,644
1,343,052
48,780,298
50,339,229
441,461
624,968
312,505
5,250
3,823,325
(418,700)
496,510
30,000
4,448,899
-
343,264
343,264
(193,157)
444,012
3,814,319
4,942,519
All deferred tax assets have been recognised in the statement of financial position.
Tax Payable
CURRENT
Income tax payable
› NOT E 1 7 – T RAD E AND OT HER PAYAB LE S
CURRENT
Trade payables
Sundry payables and accrued expenses
2021
$
2020
$
1,560,361
704,386
2021
$
2020
$
5,235,112
1,147,936
4,452,036
644,507
6,383,048
5,096,543
All amounts are short-term. The carrying values of trade and other payables are considered to be the
fair value.
› NOT E 1 8 – CO NTR ACT L IAB IL IT I ES
CURRENT
Amounts received in advance for sale of gym memberships
Amounts received in advance for franchise licence sales
Total contract liabilities
2020
$
2019
$
1,442,538
2,995,351
4,437,889
863,350
-
863,350
N
O
T
E
S
T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D
S
T
A
T
E
M
E
N
T
S
F
O
R
T
H
E
Y
E
A
R
E
N
D
E
D
3
0
J
U
N
E
2
0
2
1
5 1
Refer to note 3 f. for the revenue recognition policy.
5 2
› N OTE 19 – L EASES
2021
$
2020
$
2021
$
2020
$
(i) AASB 16 related amounts recognised in the balance sheet
Net carrying amount
RIGHT OF USE ASSETS
Leased buildings:
Opening balance
Additions to right-of-use assets
Depreciation expense
Net carrying amount
Leased equipment: *
Opening balance
Additions to right-of-use assets
Disposals of right-of-use assets
Depreciation expense
Net carrying amount
160,836,896
-
47,699,023
173,822,889
(21,114,439)
(12,985,993)
187,421,480
160,836,896
16,044,881
4,319,065
(93,956)
(2,807,817)
17,462,173
9,427,644
8,452,127
(7,011)
(1,827,879)
16,044,881
Total right-of-use assets
204,883,653
176,881,777
LEASE LIABILITIES
Leased buildings:
Opening balance
Additions to lease liabilities
Principal repayments
Net carrying amount
Leased equipment:
Opening balance
Additions to lease liabilities
Principal repayments
Net carrying amount
Total lease liabilities
Current liabilities
Non-current liabilities
168,106,082
-
47,579,096
170,390,976
(11,065,065)
(2,284,894)
204,620,113
168,106,082
14,521,011
4,319,944
7,943,655
8,332,235
(3,299,792)
(1,754,879)
15,541,163
14,521,011
220,161,276
182,627,093
22,873,600
197,287,676
220,161,276
14,829,663
167,797,430
182,627,093
(ii) AASB 16 related amounts recognised in the statement of profit or loss
Depreciation charge related to right-of-use assets (included in total
depreciation and amortisation expense)
24,033,264
14,941,974
Interest expense on lease liabilities (included in total finance costs)
11,873,437
7,911,181
(iii) Cash outflows relating to leases / rental payments
Property lease payments
Equipment lease payments
Total cash outflows for leases / rental payments
22,126,667
4,074,620
26,201,287
9,658,521
2,292,434
11,950,955
a. Options to Extend or Terminate
The options to extend or terminate are contained in several of the property leases of the Group. There were no
extension options for equipment leases. These clauses provide the Group opportunity to manage leases in order to
align with its strategies. All of the extension or termination options are only exercisable by the Group. The extension
options or termination options which management were reasonably certain to be exercised have been included in the
calculation of the lease liability.
› NOT E 20 – NOTE 20 EM PLOY EE RE MU NERATI O N
20.1 Employee benefits - expense
Expenses recognised for employee benefits are analysed below:
Wages and salaries
Employee leave entitlements
Share based payments
Superannuation
Employee Benefits Expense
2021
$
2020
$
23,092,699
907,214
106,562
2,278,000
11,739,107
703,702
20,284
1,088,251
26,384,475
13,551,344
The Company received JobKeeper payments of $3.437 million. These payments have been offset against wages and
salaries for the year
N
O
T
E
S
T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D
S
T
A
T
E
M
E
N
T
S
F
O
R
T
H
E
Y
E
A
R
E
N
D
E
D
3
0
J
U
N
E
2
0
2
1
5 3
5 4
VIVA LEISURE ANNUAL REPORT 2021
20.2 Share-Based Employee Remuneration
As at 30 June 2021, the Company maintained a Long-Term Incentive (LTI) share-based payment scheme for employee
remuneration, which will be settled in equity. In addition, the Company has issued Tranche 1 and Tranche 2 options.
Options granted to the Executive Team are under the LTI Plan and under Tranche 1 and Tranche 2 Plans:
• LTI Plan Options: The vesting of those options and will be subject to the satisfaction of appropriate service-based
conditions and/or performance hurdles determined by the Board;
• Tranche 1 and Tranche 2 Plan Options: These options are currently vested.
Options granted under the LTI, Tranche 1 and Tranche 2 Plans carry no dividends or voting rights.
Long Term Incentives (LTIs)
The table below describes the performance hurdles and vesting condition that in accordance with the Long Term
Incentive Plan in relation to the 1,803,334 options granted to senior executives:
Earnings per Share (EPS) Compound Annual Growth Rate (CAGR)
The percentage of options that vest for each % EPS and %TSR CAGR is illustrated in the following tables:
LTIs (Granted 7 June 2019)
EPS CAGR over the two Financial
Years Ending 30 June 2021*
Less than 15% (minimum Target)
15% to 20% (within target range)
Percentage of Options that Vest
0%
50% - 100%
(on a straight-line basis)
Greater than 20% (above maximum target)
100%
* the performance hurdles have not been met and it is the Company’s intention to cancel the options before vesting date
LTIs (Granted 30 October 2019)
EPS CAGR over the three Financial Years Ending 30 June 2022
Percentage of Options that Vest
Less than 15% (minimum Target)
0%
15% to 20% (within target range)
50% - 100%
(on a straight-line basis)
Greater than 20% (above maximum target)
100%
LTIs (Granted 12 November 2020)
Tranche 1 (50% of Options
– based on EPS CAGR)
Tranche 2 (50% of Options
– based on TSR CAGR)
CAGR over the three Financial Years
Ending 30 June 2023
Percentage of Options that Vest
Percentage of Options that Vest
Less than 10% (minimum Target)
0%
10% to 15% (within target range)
Greater than 15%
(above maximum target)
50% - 100%
(on a straight-line basis)
100%
0%
0%
100%
• For the purposes of the above performance hurdles, EPS means the basic Earnings per Share recorded in the
Company’s audited financial statements.
• For the purposes of the above performance hurdles, TSR means Total Shareholder Return and will be measured using
the VVA 20-day Volume Weighted Average Market Price (VWAP) for the twenty (20) trading days commencing from
the announcement of results for the financial year ended 30 June 2020 (TSR measure start date) to the same 20
trading period VWAP post the date of announcement of results for the year ended 30 June 2023 (TSR measure end
date).
1
2
0
2
T
R
O
P
E
R
L
A
U
N
N
A
E
R
U
S
I
E
L
A
V
I
V
• The Basic EPS may be adjusted for items which the Board, in its discretion, considers should be excluded from the
EPS result (such as the impacts of AASB 16 and items of a one-off and non-recurring nature).
• The performance hurdles will be tested only once the vesting condition has been met by the grantee senior executive
and following the Company’s audited accounts being finalised for each respective financial year end.
All options refer to options over ordinary shares of the Company, which are exercisable on a one-for- one basis under the
terms of the agreements.
There were 100,000 share options exercised during the reporting period.
LTI
(Tranche 1)
LTI
(Tranche 2)
LTI
(Tranche 3)
No of
Options
No of
Options
No of
Options
Tranche
1
No of
Options
Tranche
2
No of
Options
Outstanding at 30 June 2020
295,000
295,000
-
1,500,000
1,000,000
Granted
Exercised
-
-
-
-
1,213,334
-
-
100,000
-
-
Outstanding at 30 June 2021
295,000
295,000
1,213,334
1,400,000
1,000,000
Exercisable at 30 June 2021
-
-
-
1,400,000
1,000,000
The fair values of options granted were determined using the Black Scholes option pricing model. The following
principal assumptions were used in the valuation:
LTI
(Tranche 1)
LTI
(Tranche 2)
LTI
(Tranche 3)
Tranche
1
Tranche
2
Options
Options
Options
Options
Options
7 June 2019
30 October
2019
12 November
2020
Release of
FY2021 results
Release of
FY2022 results
Release of
FY2023 results
7 June 2019
7 June 2019
Vested
Vested
1.00
25%
1.00
25%
2.75
25%
1.00
25%
1.00
25%
5 years
5 years
5 years
4 years
4 years
0%
2%
Nil
Nil
0%
2%
Nil
Nil
0%
2%
Nil
3.34
0%
2%
82,979
1.34
0%
2%
72,232
1.43
Release of
FY2021 Results
31 August
2023
Release of
FY2022
Results
31 August
2024
Release of
FY2023
Results
16 October
2025
7 June 2020
7 June 2020
2 May 2023
2 May 2023
2.25 Years
3.25 Years
4.30 Years
1.94 Years
1.94 Years
Grant date
Vesting period ends
Share price at grant date ($)
Volatility
Option Life
Dividend yield
Risk free investment rate
Fair value at grant date
Exercise price at date of grant
Exercisable from
Exercisable to
Weighted average remaining
contractual life
The underlying expected volatility was determined by reference to historical data of comparable listed entities over a
period of time. No special features inherent to the options granted were incorporated into measurement of fair value.
In total, $106,562 (2020: $20,284) of employee remuneration expense (all of which related to equity-based payment
transactions) has been included in profit or loss and credited to share option reserve.
N
O
T
E
S
T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D
S
T
A
T
E
M
E
N
T
S
F
O
R
T
H
E
Y
E
A
R
E
N
D
E
D
3
0
J
U
N
E
2
0
2
1
5 5
5 6
20.3 Employee benefits - liabilities
Current:
Employee leave entitlements
Non-Current:
Employee leave entitlements
Total employee obligations
› N OTE 2 1 – P ROVISIONS
Consolidated Group
Opening balance at 1 July 2020
Additional provisions
Amounts used
Balance at 30 June 2021
Provision for Employee Benefits
1
2
0
2
T
R
O
P
E
R
L
A
U
N
N
A
E
R
U
S
I
E
L
A
V
I
V
1,808,079
1,804,957
(907,214)
4,323,795
1,639,741
-
2,705,822
5,963,536
6,131,874
3,444,698
(907,214)
8,669,358
Provision for employee benefits represents amounts accrued for annual leave and long service leave. The current portion
for this provision includes the total amount accrued for annual leave entitlements and the amounts accrued for long
service leave entitlements that have vested due to employees having completed the required period of service. Based on
past experience, the Group does not expect the full amount of annual leave or long service leave balances classified as
current liabilities to be settled within the next 12 months. However, these amounts must be classified as current liabilities
since the Group does not have an unconditional right to defer the settlement of these amounts in the event employees
wish to use their leave entitlement.
The non-current portion for this provision includes amounts accrued for long service leave entitlements that have not yet
vested in relation to those employees who have not yet completed the required period of service.
In calculating the present value of future cash flows in respect of long service leave, the probability of long service leave
being taken is based on historical data. The measurement and recognition criteria relating to employee benefits have
been discussed in Note 3 (r).
Provision for Property Make Good
A provision has been recognised for the costs to be incurred for the restoration of property leases for which the Group
is a lessee and where the obligation to make good is included as a condition of the lease. The provision is based on the
present value of estimated costs to restore the property at the end of each property lease term.
2021
$
2020
$
1,875,182
1,655,033
830,640
153,046
2,705,822
1,808,079
› NOT E 22 – EQ UI TY
22.1 Share Capital
The share capital of Viva Leisure consists only of fully paid ordinary shares. All shares are equally eligible to receive
dividends and the repayment of capital and represent one vote at the shareholders’ meeting of Viva Leisure.
2021
Shares
2020
Shares
2021
$
2020
$
Shares issued and fully paid:
Beginning of the year
71,511,393
52,600,000
87,375,694
43,715,691
Shares issued (less costs of offer)
10,344,828
18,911,393
29,162,554
43,660,003
Shares issued through exercise of options
100,000
-
139,532
Total contributed equity at 30 June
81,956,221
71,511,393
116,677,780
87,375,694
Employee
Benefits
Property Make
Good
$
$
Total
$
Capital Management
Capital Management
Management controls the capital of the Group in order to maintain a sustainable debt to equity ratio, generate long-term
shareholder value and ensure that the Group can fund its operations and continue as a going concern.
The Group’s debt and capital include ordinary share capital and financial liabilities, supported by financial assets.
The Group is not subject to any externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital
structure in response to changes in these risks and in the market. These responses include the management of debt
levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by management to control the capital of the Group since the prior
year. This strategy is to ensure that the Group’s gearing ratio remains below 70%. The gearing ratios for the years ended
30 June 2021 and 30 June 2020 are as follows:
Total borrowings - Market Rate loan
Total borrowings – equipment finance leases
Total borrowings
Less cash and cash equivalents
Net debt
Total equity
Total capital
Gearing ratio
2021
$
2020
$
10,007,500
15,541,986
25,549,486
17,290,971
8,258,515
7,988,500
14,521,011
22,509,511
30,103,095
(7,593,584)
86,352,203
63,316,762
94,610,718
55,723,178
8.7%
N/A
N
O
T
E
S
T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D
S
T
A
T
E
M
E
N
T
S
F
O
R
T
H
E
Y
E
A
R
E
N
D
E
D
3
0
J
U
N
E
2
0
2
1
5 7
5 8
› N OTE 2 3 – RESERVES
a. Common Control Reserve
A common control reserve was created when the Group restructure took place during the financial year ended 30 June
2019 as it was determined to occur under the control of the same shareholders. A business combination involving entities
or businesses under common control is a business combination in which all of the combining entities or businesses are
ultimately controlled by the same party or parties both before and after the business combination, and that the control is
not transitory.
Where an entity within the group acquires an entity under common control, the acquirer consolidates the carrying values
of the acquired entity’s assets and liabilities from the date of acquisition. The consolidated financial statements of the
group include the acquired entity’s income and expenses from the date of acquisition onwards. Any difference between
the fair value of the consideration paid/transferred by the acquirer and the net assets/ (liabilities) of the acquired entity
are taken to the common control reserve.
2021
$
2020
$
› NOT E 24 – E ARNI NGS PE R SH ARE AN D D IV ID E NDS
24.1 Earnings per Share
Both the basic and diluted earnings per share have been calculated using the profit attributable to shareholders of the
Parent Company as the numerator (i.e. no adjustments to profit were necessary in 2021 or 2020).
The reconciliation of the weighted average number of shares for the purposes of diluted earnings per share to the
weighted average number of ordinary shares used in the calculation of basic earnings per share is as follows:
Weighted average number of shares used in basic earnings per share
77,516,637
57,335,790
Shares deemed to be issued for no consideration in respect of options granted
3,804,446
3,090,000
Weighted average number of shares used in diluted earnings per share
81,321,103
60,425,790
2021
$
2020
$
Common Control Reserve
Beginning of the year
Net movement in common control reserve
(21,900,880)
-
(21,585,321)
(315,559)
24.2 Dividends
There were no dividends declared or paid during the year (2020: nil)
Total common control reserve at 30 June
(21,900,880)
(21,900,880)
24.3 Franking Credits
b. Share Options Reserve
The share option reserve records items recognised as expenses on valuation of employee share options.
Share Options Reserve
Beginning of the year
Issue of options to key management personnel
Total share options reserve at 30 June
2021
$
2020
$
175,495
118,254
293,749
155,211
20,284
175,495
The amount of franking credits available for subsequent reporting periods are:
Balance at the end of the reporting period
Franking credits that will arise from payment of the amount of provision for
income tax
Total franking credits
2021
$
2020
$
2,825,510
2,045,656
1,560,361
704,386
4,385,871
2,750,042
N
O
T
E
S
T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D
S
T
A
T
E
M
E
N
T
S
F
O
R
T
H
E
Y
E
A
R
E
N
D
E
D
3
0
J
U
N
E
2
0
2
1
5 9
6 0
VIVA LEISURE ANNUAL REPORT 2021
› NOTE 25 – RECONCILIATION OF CASH FLOWS
› NOT E 27 – REL ATE D PAR T Y T R AN SACT I O NS
Cash flows from operating activities
Profit / (loss) after income tax
Non-cash flows in profit / (loss)
— depreciation and amortisation
— net (gain)/loss on disposal of property, plant and equipment
— tax effect of expenses taken to equity
— tax effect of initial adoption of AASB 16 taken to equity
— charges to common control reserve
— share based payments
2021
$
2020
$
(6,384,898)
(6,246,344)
-
-
30,076,823
17,211,622
-
362,554
-
-
118,254
71,616
508,764
(165,500)
(315,559)
20,284
The Group’s related parties include key management of the Group which are considered to be any person(s) having
authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly,
including any director (whether executive or otherwise) of that entity.
Related parties continue to own several properties which are leased by the Group as described below. The Board
considers that each of these arrangements are on arm’s length terms, commercial terms and are subject to the usual
risks associated with other leases entered by the Company. The Board has obtained independent valuation advice to
confirm that the arrangements are arm’s length.
27.1 Transactions with Directors and Key Management Personnel
Short-term Employee Benefits:
Wages and salaries (including bonuses and Annual Leave entitlements)
1,318,903
1,696,944
2021
$
2020
$
Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries
— (increase)/decrease in trade and term debtors
1 ,1 5 5 , 8 6 3
(4,847,535)
(225,786)
(4,389,071)
557,269
901,634
948,157
(79,155)
(4,157,583)
2,980,097
(790,763)
(1,067,559)
2,239,720
515,668
25,360,519
3,638,054
Superannuation
Long service leave
Share-based payments
Total remuneration
Short-term employee benefits
115,776
30,429
106,562
109,895
28,558
20,284
1,623,631
1,655,681
These amounts include fees and benefits paid to the non-executive Chair and non-executive directors as well as all salary,
paid leave benefits, fringe benefits and cash incentives awarded to KMP.
Post-employment benefits
These amounts are the superannuation contributions made during the year.
Other long-term benefits
These amounts represent long service leave benefits accruing during the year, long-term disability benefits and deferred
incentives payments.
2021
$
2020
$
Share-based payments
These amounts represent the expense related to the participation of certain KMP in equity-settled benefit schemes as
measured by the fair value of the options granted on grant date (see Note 20.2).
Further information in relation to KMP remuneration can be found in the directors’ report and at Note 20.
2021
$
2020
$
27.2 Related Party Properties
Total related party property transactions
3,014,870
2,464,167
63,500
31,500
9,500
104,500
26,500
26,500
131,000
50,500
25,500
-
76,000
53,000
53,000
129,000
N
O
T
E
S
T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D
S
T
A
T
E
M
E
N
T
S
F
O
R
T
H
E
Y
E
A
R
E
N
D
E
D
3
0
J
U
N
E
2
0
2
1
1
2
0
2
T
R
O
P
E
R
L
A
U
N
N
A
E
R
U
S
I
E
L
A
V
I
V
— (increase)/decrease in other assets
— (increase)/decrease in deferred tax
— increase/(decrease) in payables
— increase/(decrease) in current tax
— increase/(decrease) in other liabilities
— increase/(decrease) in provisions
Net cash from operating activities
› N OTE 2 6 - AUDITOR REMUN ERATION
Remuneration of the auditor for:
Audit and review of financial statements
Financial year ended 30 June
Half year ended 31 December
Other assurance engagements
Total audit services
Other non-audit services
Taxation and business services
Total non-audit services
Total auditor remuneration
6 1
6 2
› N OTE 2 8 – CONTINGENT LIABILITIES
› NOT E 3 0 – I NTE RESTS I N SU B SID I ARI ES
Under the Share Sale Agreement relating to the acquisition of Australian Fitness Management Pty Limited, the Group will
be required to make an additional payment as part of the acquisition consideration to the vendors of up to $2 million if
certain hurdles are achieved prior to the first anniversary of the acquisition. No amount has been included or provided in
the accounts as at 30 June as the achievement of the hurdles is considered unlikely.
No amount has been included or provided in respect to the threatened claim by certain franchisees of Australian Fitness
Management Pty Limited. Legal costs incurred in relation to the matter have been expensed as incurred.
1
2
0
2
T
R
O
P
E
R
L
A
U
N
N
A
E
R
U
S
I
E
L
A
V
I
V
› NOTE 29 – B USINESS COMBINATIONS
During the period the Group acquired 15 clubs from various vendors in addition to Australian Fitness Management Pty
Limited, the master franchisor for the Plus Fitness network as outlined below:
Number of clubs
Acquisition
Purchase consideration
4
6
5
PLUS Sites
Pinnacle
Other Sites
AFM*
$
$
$
15
Total
$
Amount settled in cash, net of cash acquired
1,239,401
6,118,627
2,753,846
17,428,307
27,540,181
Assets and liabilities acquired at fair value
Property, plant and equipment
208,985
1,281,650
300,460
151,181
1,942,276
Other net identifiable assets /(liabilities) acquired
(28,099)
(252,698)
(106,154)
(1,175,748)
(1,562,699)
Goodwill
1,058,515
5,089,675
2,559,540
18,452,874
27,160,604
1,239,401
6,118,627
2,753,846
17,428,307
27,540,181
Revenue and profit contribution from the date of acquisition until 30 June 2021
Revenue
354,412
2,094,693
1,658,963
8,499,856
12,607,924
Profit before depreciation, amortisation, interest
and tax
165,466
492,380
781,083
2,545,364
3,984,293
*AFM is Australian Fitness Management Pty Limited the master franchisor for the Plus Fitness network
Acquisition-related costs amounting to $274,332 for all acquisitions have been recognised as an expense in the
consolidated statement of profit or loss and other comprehensive income. Certain costs relating to the acquisition of
AFM were included in the previous financial year.
The goodwill arising from these business combinations is not expected to be deductible for tax purposes.
The above contributions to of revenue and profit from the date of acquisition to 30 June 2021 were impacted by the
mandatory shutdowns due to COVID-19.
Name of Subsidiary
Principal Activity
Proportion of Ownership
Interests held by the Group
30 June 2021 30 June 2020
Viva Leisure Operations Pty Limited
Viva Leisure People Pty Limited
Viva Leisure Property Pty Limited
Viva Leisure Memberships Pty Limited
Psycle Life Pty Limited
The Club Group Pty Limited
The Club Group (Greenway) Pty Limited
Club MMM! Pty Limited
HIIT Republic Australia Pty Limited
Australian Fitness Management Pty Limited
Viva Leisure (NZ) Limited
Viva Leisure Operations (NZ) Limited
Plus Fitness (NZ) Limited
Club Lime Pty Limited
Club Pink Pty Limited
Club Blue Pty Limited
Club Swim Pty Limited
Club Team Pty Limited
Health club operation
Health club operation
Health club operation
Health club operation
Health club operation
Health club operation
Health club operation
Health club operation
Health club operation
Master franchisor for
Plus Fitness (Aust)
NZ Parent
NZ operations
Master franchisor for
Plus Fitness (NZ)
Dormant
Dormant
Dormant
Dormant
Dormant
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
-
-
100%
100%
100%
100%
100%
› NOT E 3 1 – CAPI TAL AND LEASI NG CO MM I T ME NTS
At 30 June 2021, Viva Leisure Limited has entered into binding agreements totalling $2.85 million to purchase the
following health clubs:
• Plus Fitness - Mona Vale, NSW
• Plus Fitness – Beerwah, QLD
• One Health and Fitness - South Morang, VIC
The Company entered into a binding agreement to acquire Australian Fitness Management Pty Limited at 30 June 2020,
which completed on 21 August 2020.
Contractual Commitments
Within 1 Year
$
1 to 5 Years
$
After 5 Years
$
Total
$
30 June 2021
30 June 2020
2,850,000
18,000,000
-
-
-
-
-
-
N
O
T
E
S
T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D
S
T
A
T
E
M
E
N
T
S
F
O
R
T
H
E
Y
E
A
R
E
N
D
E
D
3
0
J
U
N
E
2
0
2
1
6 3
6 4
› NOTE 32 – FINANCIAL INST RUMENT RISK
32.2 Credit Risk Analysis
The Group is exposed to various risks in relation to financial instruments. The main types of risks are market risk, credit
risk and liquidity risk.
Credit risk is the risk that a counterparty fails to discharge an obligation to the Group. The Group is exposed to this risk
for various financial instruments, for example receivables to customers, placing deposits, investment in term deposits,
etc..
The Group’s risk management is coordinated at its headquarters, in close cooperation with the Board, and focuses on
actively securing the Group’s short to medium-term cash flows by minimising the exposure to financial markets.
Credit risk management
Credit risk management
The Group does not actively engage in the trading of financial assets for speculative purposes nor does it write options.
The most significant financial risks to which the Group is exposed are described below.
32.1 Market Risk Analysis
The Group is exposed to market risk through its use of financial instruments and specifically to interest rate risk, which
result from its operating and investing activities.
30 June 2021
Financial assets
Financial liabilities
Total exposure
30 June 2020
Financial assets
Financial liabilities
Total exposure
Interest rate sensitivity
Interest rate sensitivity
Short term exposure
$
Long term exposure
$
20,010,182
-
(12,864,607)
(19,067,929)
7,145,575
(19,067,929)
35,283,303
(9,198,855)
-
(18,407,199)
26,084,448
(18,407,199)
The Group’s policy is to minimise interest rate cash flow risk exposures on long-term financing. Longer- term borrowings
such as equipment lease financed amounts are therefore usually at fixed rates. At 30 June 2021, the Group is exposed to
changes in market interest rates as its Bank Debt is at variable interest rates. The Group’s investments in term deposits all
pay fixed interest rates.
The following table illustrates the sensitivity of profit and equity to a reasonably possible change in interest rates of
+/- 1% (2020: +/- 1%). These changes are considered to be reasonably possible based on observation of current market
conditions. The calculations are based on a change in the average market interest rate for each period, and the financial
instruments held at each reporting date that are sensitive to changes in interest rates. All other variables are held
constant.
Profit for the Year
Equity
$
+1%
$
-1%
$
+1%
$
-1%
30 June 2021
30 June 2020
71,456
260,845
(71,456)
(260,845)
71,456
260,845
(71,456)
(260,845)
1
2
0
2
T
R
O
P
E
R
L
A
U
N
N
A
E
R
U
S
I
E
L
A
V
I
V
The credit risk is managed on a group basis based on the Group’s credit risk management policies and procedures.
The credit risk in respect of cash balances held with banks and deposits with banks are managed via diversification of
bank deposits and are only with major reputable financial institutions.
The majority of the Group’s customer pay on an upfront basis by way of direct debit and as such, the Group does not
provide for bad debts as revenue is not recorded until received.
32.3 Liquidity Risk Analysis
Liquidity risk is the risk that the Group might be unable to meet its obligations. The Group manages its liquidity needs
by monitoring scheduled debt servicing payments for long-term financial liabilities as well as forecast cash inflows and
outflows due in day-to-day business. The data used for analysing these cash flows is consistent with that used in the
contractual maturity analysis below.
See Note 13 for details of borrowings during the financial periods under review.
32.4 Financial Risk Management
Within 1 Year
1 to 5 Years
Over 5 Years
Total
2021
$
2020
$
2021
$
2020
$
2021
$
2020
$
2021
$
2020
$
Consolidated Group
Financial liabilities due for payment
Trade and other
payables
Contract
liabilities
6,383,048
5,096,543
4,437,889
863,350
-
-
-
-
Bank loans
2,080,500
1,272,500
7,927,000
6,716,000
-
-
-
-
-
-
6,383,048
5,096,543
4,437,889
863,350
10,007,500
7,988,500
Finance lease
liabilities
Total expected
outflows
22,873,600
14,829,663
95,466,815
89,720,302
101,820,861
78,077,128
220,161,276
182,627,093
35,775,037
22,062,056
103,393,815
96,436,302
101,820,861
78,077,128
240,989,713
196,575,486
Financial assets – cash flows realisable
Cash and cash
equivalents
Trade
receivables
Total
17,290,971
30,103,095
2,719,211
2,652,313
anticipated
20,010,182
32,755,408
-
-
-
-
-
-
-
-
-
-
-
-
17,290,971
30,103,095
2,719,211
2,652,313
20,010,182
32,755,408
inflows
Net (outflow)/
inflow on
financial
instruments
(15,764,855)
10,693,352 (103,393,815)
(96,436,302)
(101,820,861)
(78,077,128)
(220,979,531)
(163,820,078)
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6 6
› N OTE 33 – FAIR VALUE MEASUREMENT
Contractual commitments
Financial assets and financial liabilities measured at fair value in the statement of financial position are measured at
amortised cost.
At 30 June 2021, Viva Leisure Limited has entered into binding agreements totalling $2.85 million to purchase the
following health clubs:
› N OTE 34 – PARENT ENTITY INFORMATION
Statement of Financial Position
Current Assets
Non-Current Assets
Total Assets
Current Liabilities
Total Liabilities
Net Assets
Issued Capital
Reserves
Retained Earnings
Total Equity
Statement of Profit and Loss and Other Comprehensive Income
Loss for the year
Other comprehensive income
Total Comprehensive Income
Guarantees and Security Interests
1
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2
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2021
$
2020
$
94,669,485
65,735,485
11,838
11,838
94,681,323
65,747,323
12,087
12,087
12,087
12,087
94,669,236
65,735,236
116,538,248
87,375,694
(21,467,599)
(21,725,385)
(401,413)
84,927
94,669,236
65,735,236
(486,340)
(213,489)
-
-
(486,340)
(213,489)
There are several asset specific security interests registered on the PPS Register against each of the members of the
Group listed at Note 31.
In addition, the bank loans mature on 28 May 2025 and the facility agreement specifies the following security interests:
1.
First ranking General Security Interest from each Obligor comprising first ranking charge over all present and after
acquired property.
2. First ranking charge over any assets financed under the Equipment Finance Facility.
3. Account Set offs from Viva Leisure Property Pty Ltd over Deposits totalling $3,250,000 (relating to security for all
cash covered bank guarantees issued in the name of Viva Leisure Property Pty Ltd)
4. The interest rate payable on the market rate loan is BBSY plus 4.0%
• Plus Fitness - Mona Vale, NSW
• Plus Fitness – Beerwah, QLD
• One Health and Fitness - South Morang, VIC
The Company entered into a binding agreement to acquire Australian Fitness Management Pty Limited at 30 June 2020,
which completed on 21 August 2020.
30 June 2021
30 June 2020*
Within 1 Year
$
2,850,000
18,000,000
Contractual Commitments
1 to 5
Years
$
After 5 Years
Total
$
$
-
-
-
-
-
-
› NOT E 35 – EVENTS AFTE R T HE R EPO R TI NG PER IO D
The following events occurred after the reporting period:
Since the end of the financial year, the Company has entered into binding agreements or completed the following
acquisitions:
• The assets of One Health, a health club based in South Morang, VIC
• The assets of Plus Fitness sites in, Manly and Mona Vale, NSW, Beerwah, QLD
In addition, the Company has opened the Group’s first GroundUp site – a Reformer and Mat Pilates, Barre and Yoga
studio
As at the date of this report the Group has mandatory temporary closures of some of its clubs in NSW, Victoria and ACT
due to COVID-19.
No other matters or circumstances other than as referred to in this report, have arisen since the end of the financial year
which significantly affected or may significantly affect the operations of the consolidated group, the results of those
operations, or the state of affairs of the consolidated group in future financial years, other than the impacts of COVID-19
referred to above.
› NOT E 3 6 - CO MPANY I NFO R M AT IO N
Viva Leisure Limited is the Group’s Ultimate Parent Company. Viva Leisure Limited is a Public Company incorporated
and domiciled in Australia. The address of its registered office and its principal place of business is Unit 7, 141 Flemington
Road, Mitchell, ACT, Australia.
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VI VA L EI SUR E GRO UP DI RE CTO RS D EC LARATI O N
In the opinion of the Directors of Viva Leisure Ltd:
a) The consolidated financial statements and notes of Viva Leisure Ltd are in accordance with the
Corporations Act
i) Giving a true and fair view of its financial position as at 30 June 2021 and of its performance
for the financial year ended on that date; and
ii) Complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001; and
b) There are reasonable grounds to believe that Viva Leisure Ltd will be able to pay its debts as and
when they become due and payable.;
2) The Directors have been given the declarations required by Section 295A of the Corporations Act 2001
from the Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2021.
3) Note 2 confirms that the consolidated financial statements also comply with International Financial
Reporting Standards.
Signed in accordance with a resolution of the Directors.
Director
H A R R Y K O N S T A N T I N O U
Dated this
17 day of AUGUST 2021.
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7 7
FOR LISTED
COMPANIES
a d d i t i o n a l
i n fo
3 . 20 LAR GEST SHARE HOL D ER S
The following information is current as at 24th September 2021
1. DIST RIBUTION OF SHAREHOLDERS
The Distribution of issued capital is as follows:
Holding
100,001 and over
10,001 – 100,000
5,001 – 10,000
1,001 – 5,000
1 – 1,000
2 . DIST RIBUTION OF OPTIONS
Holding
100,001 and over
10,001 – 100,000
5,001 – 10,000
1,001 – 5,000
1 – 1,000
Total No. of
Shares Held
No. of
Shareholders
79,862,204
6,035,793
1,743,333
1,520,703
352,207
89,514,240
40
243
233
606
757
1,879
Total No. of
Options Held
No. of
Shareholders
3,831,667
76,667
-
-
-
3,908,334
4
1
-
-
-
5
Shareholder
Number Held
SHJA MANAGEMENT PTY LTD
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BOND STREET CUSTODIANS LIMITED
HARRY KONSTANTINOU
MR JOHN KONSTANTINOU
BNP PARIBAS NOMS PTY LTD
CAPITAL PROPERTY CORPORATION PTY LTD
CAPITAL PROPERTY CORPORATION PTY LTD
BNP PARIBAS NOMINEES PTY LTD
SPIROS KONSTANTINOU
BROADGATE INVESTMENTS PTY LTD
PORTMAN TRADING PTY LTD
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
BNP PARIBAS NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
EASTY HOLDINGS PTY LTD
MR ANGELO KONSTANTINOU
21,688,434
16,303,096
14,991,844
5,238,470
2 ,1 1 0,1 4 5
1,690,000
1,542,068
1,442,067
1,436,314
1,226,433
1,185,448
1,170,407
1,042,067
949,036
900,000
883,519
847,065
510,500
466,667
442,068
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F
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P
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% of Issued
Shares
24.23%
18.21%
16.75%
5.85%
2.36%
1.89%
1.72%
1.61%
1.60%
1.37%
1.32%
1.31%
1.16%
1.06%
1.01%
0.99%
0.95%
0.57%
0.52%
0.49%
1
1
2
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7 9
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8 0
8 0
4. SU BSTA NTIAL SHAREHOLDERS
RE LAT ED PART Y L EAS E AG REE M ENTS
The names of the substantial shareholders listed in the holding company’s register as at 24 September 2021 are:
Shareholder
SHJA MANAGEMENT PTY LTD
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
Number of
Shares
% of Issued
Shares
21,688,434
16,303,096
14,991,844
5,238,470
3,729,451
24.23%
18.21%
16.75%
5.85%
5.2%
5. LESS THA N MARKETABLE PARCEL OF ORDINARY SHARES
There are 139 shareholders with unmarketable parcels totalling 18,695 shares.
6. UN QUOTED EQUITY SECURITIES
The company had the following unquoted securities on issue as at 24 September 2021:
Security
Unquoted Options
No. of Securities
3,908,334
7. RE STRICTED SECURITIES
The company had no restricted securities on issue as at 24 September 2021.
8 . VOT ING RIGHTS
In accordance with the Constitution each member present at a meeting whether in person, or by proxy, or by power
of attorney, or in a duly authorised representative in the case of a corporate member, shall have one vote on a show of
hands, and one vote for each fully paid ordinary share, on a poll. Performance rights and Options have no voting rights.
9. ON - MA RKET BUY BACKS
There is no current on-market buy-back in relation to the Company’s securities
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The Company received a waiver from Listing 10.1 at time of listing to the extent necessary to permit the Company not
to seek shareholder approval in relation to rental payments made during the remaining initial terms of certain lease
agreements as set out in the following table. A condition of the ASX waiver is for inclusion of a summary of the material
terms of these lease agreements in each annual report of the Company during the terms of the leases. The table below
sets out the material terms of these lease agreements.
Location
Lessor
Mitchell
Office space
Dimensional
Developments
Australia Pty Ltd
Club Lime
Mitchell
Dimensional
Developments
Australia Pty Ltd
Mitchell
Expanded
office space
Dimensional
Developments
Australia Pty Ltd
Term and options
to renew
5 years commencing on 1
August 2018.
3 further options to renew
for 5 years each.
5 years commencing on 1
August 2018.
3 further options to renew
for 5 years each.
4 years commencing on 1
July 2019.
3 further options to renew
for 5 years each.
Club Lime
and Ladies
Only Gym
and Pool
CISAC
Sports Centres
Australia Pty Ltd
10 years commencing 1
August 2018.
2 further options to renew
for 10 years each.
ClubMMM
at CISAC
Sports Centres
Australia Pty Ltd
5 years commencing 1
August 2018.
2 further options to renew
for 5 years each.
Speedo shop
at CISAC
Sports Centres
Australia Pty Ltd
5 years commencing 1
August 2018.
2 further options to renew
for 5 years each.
Club Lime
Curtin
Akon Holdings Pty
Ltd
5 years commencing 1
July 2018
2 further options to renew
for 5 years each.
Club Lime
Kambah
Jenke Investments
Pty Ltd
5 years commencing 1
August 2018.
2 further options to renew
for 5 years each.
Current annual rent (plus GST) and future increases
$105,746
Rent increases by 3% per annum in the initial term, after which
the base rent is set by market review on each exercise of the
options with further fixed annual increases of 3% per annum.
$165,229
Rent increases by 3% per annum in the initial term, after which
the base rent is set by market review on each exercise of the
options with further fixed annual increases of 3% per annum.
$105,746
Rent is fixed yearly (increasing incrementally year on year by
3%) for the initial term of the lease, after which the base rent
is set by market review on each exercise of the options with
further fixed annual increases of 3% per annum.
$1,713,920
Rent is fixed yearly (increasing incrementally year on year by
4%) for the initial term of the lease, after which the base rent
is set by market review on each exercise of the options with
further fixed annual increases of 4% per annum.
$196,458
Rent is fixed yearly (increasing incrementally year on year by
4%) for the initial term of the lease, after which the base rent
is set by market review on each exercise of the options with
further fixed annual increases of 4% per annum.
$37,492
Rent is fixed yearly (increasing incrementally year on year by
4%) for the initial term of the lease, after which the base rent
is set by market review on each exercise of the options with
further fixed annual increases of 4% per annum.
$148,194
Rent is fixed yearly (increasing incrementally year on year by
$10,000) for the initial term of the lease, after which the base
rent is set by market review on each exercise of the options with
further fixed annual increases of 3.5% per annum.
$254,745
Rent is fixed yearly (increasing incrementally year on year by
3%) for the initial term of the lease, after which the base rent
is set by market review on each exercise of the options with
further fixed annual increases of 3% per annum.
OT HER KEY TE RM S
The Board considers that the leases are on arms’ length terms which reflect customary provisions commonly found in
commercial leases of a similar nature. Set out below are some key terms of these leases (other than those set out in
the other columns of this table). Rent is payable in advance by monthly instalments and the lessor may charge daily
interest on any late payment at 2% above the rate that would be charged by the lessor’s bank for unsecured overdrafts.
On termination of the lease, the lessee is responsible for make good of the premises. The lessee is responsible for
maintaining insurance to cover standard risks applicable to a lessee in the health club industry, public liability and for the
plate glass on the premises. The lessee releases the lessor from, and indemnifies the lessor against, claims for damages,
loss, injury or death.
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CE O :
Harry Konstantinou
CO M PANY S ECR ETARY:
Kym Gallagher
RE GISTE RED O FFI CE AND PR INCIPAL PL ACE
O F B U SINE SS :
Unit 7, 141 Flemington Road, Mitchell ACT 2911
02 6163 8011
investor.relations@vivaleisure.com.au
www.vivaleisure.com.au
RE GISTE RS O F S ECU RI TI ES AR E H E LD AT
T HE FOL LOWI NG AD DR ESS:
Link Market Services
Level 12, 680 George Street, Sydney NSW 2000
1300 554 474
registrars@linkmarketservices.com.au
www.linkmarketservices.com.au
STO CK EXCHANGE LI ST ING
Quotation has been granted for all the ordinary shares
of the company on all Member Exchanges of the
Australian Securities Exchange Limited under the code
“VVA”.
AU DI TOR S
Hall Chadwick
Level 40, 2 Park St, Sydney NSW 2000
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8 3
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8 4
8 4