Cedar Woods Properties Limited
2014 Annual Report
ABN 47 009 259 081
Corporate Directory
A.B.N. 47 009 259 081
Directors
William George Hames, BArch (Hons) MCU (Harvard) LFRAIA, MPIA, FAPI (Econ) – Chairman
Robert Stanley Brown, MAICD, AIFS – Deputy Chairman
Ronald Packer, BCom (UWA), FAICD, Solicitor Supreme Court of England & Wales
Stephen Thomas Pearce, BBus(ACC), Grad Dip (Admin), FCA, AGIA, MAICD
Paul Stephen Sadleir, BE, MBA, AAPI, FAICD – Managing Director
Timothy Robert Brown, BA, LLB, M.Fin, Post Grad Dip (Phil) (Alternate for R S Brown)
Company Secretary
Paul Samuel Freedman, BSc, CA, GAICD
Registered office and principal place of business
Ground Floor, 50 Colin Street
WEST PERTH WA 6005
Postal address: P.O. Box 788 West Perth WA 6872
Phone: (08) 9480 1500
Fax: (08) 9480 1599
Email: email@cedarwoods.com.au
Website: www.cedarwoods.com.au
Share registry
Computershare Investor Services Pty Ltd
Level 2, Reserve Bank Building
45 St Georges Terrace
PERTH WA 6000
Auditor
PricewaterhouseCoopers
125 St Georges Terrace
PERTH WA 6000
Securities exchange listing
Cedar Woods Properties Limited shares are listed on the Australian Securities Exchange (ASX)
ASX code: CWP
Annual general meeting
Venue: Kings Park Function Centre, Fraser Avenue, West Perth WA 6005
Time: 10.00am
Date: Monday 10 November 2014
Table of Contents
A Message from the Chairman .......................................................................................................................................... 3
Celebrating 20 Years ......................................................................................................................................................... 4
About Cedar Woods .......................................................................................................................................................... 6
New report format ............................................................................................................................................................. 6
Cedar Woods’ Charter ....................................................................................................................................................... 7
Our Business Model ........................................................................................................................................................ 10
Our Stakeholders ............................................................................................................................................................. 11
Community Development and Sponsorship ..................................................................................................................... 12
Report to Shareholders ................................................................................................................................................ 14
Financial and Operating Review ....................................................................................................................................... 14
Project Pipeline as at 30 June 2014 ................................................................................................................................. 20
Directors’ Report ............................................................................................................................................................. 22
Directors’ Report: Remuneration Report .......................................................................................................................... 26
Directors’ Report (continued) ........................................................................................................................................... 36
Auditor’s Independence Declaration ................................................................................................................................. 37
Financial Statements .................................................................................................................................................... 39
Consolidated Statement of Profit or Loss and Other Comprehensive Income .................................................................. 40
Consolidated Balance Sheet ............................................................................................................................................ 41
Consolidated Statement of Changes in Equity ................................................................................................................. 42
Consolidated Cash Flow Statement ................................................................................................................................. 43
Notes to the Financial Statements ............................................................................................................................. 44
Section A: How the Numbers are Calculated ............................................................................................................ 45
A1. Profit or Loss Information ........................................................................................................................................ 46
A2. Financial Assets and Financial Liabilities .................................................................................................................. 49
A3. Non-Financial Assets and Liabilities ........................................................................................................................ 54
A4. Equity ..................................................................................................................................................................... 60
A5. Cash Flow Information ............................................................................................................................................ 62
Section B: Financial Risks ........................................................................................................................................... 63
B1. Critical Estimates and Judgements ......................................................................................................................... 64
B2. Financial Risk Management .................................................................................................................................... 65
B3. Capital Management Objectives and Gearing ........................................................................................................ 70
Section C: Group Structure ......................................................................................................................................... 72
C1. Interests in Other Entities ........................................................................................................................................ 73
Section D: Unrecognised Items .................................................................................................................................. 76
D1. Contingent Liabilities ............................................................................................................................................... 77
D2. Commitments ......................................................................................................................................................... 78
Section E: Other Information ....................................................................................................................................... 79
E1. Related Party Transactions ..................................................................................................................................... 80
E2. Remuneration of Auditors ....................................................................................................................................... 81
E3. Employee Share Scheme ........................................................................................................................................ 82
E4. Summary of Accounting Policies ............................................................................................................................. 83
E5. Segment Information .............................................................................................................................................. 91
E6. Parent Entity Financial Information .......................................................................................................................... 92
Section F: Declaration and Independent Auditor’s Report ....................................................................................... 93
F1. Directors’ Declaration ............................................................................................................................................. 94
F2. Independent Auditor’s Report to the members of Cedar Woods Properties Limited ................................................ 95
Section G: Shareholders’ Information ........................................................................................................................ 97
G1. Investors Summary ................................................................................................................................................. 98
G2. Five Year Financial Performance ............................................................................................................................ 101
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2014 ANNUAL REPORT
A Message from the Chairman
On behalf of the Board and management team, I am pleased to present
to shareholders our Annual Report for 2014.
From a financial perspective, the 2014 financial year saw Cedar Woods deliver its fourth straight
year of record profit and enter 2015 well placed to continue to provide strong returns to its
shareholders.
The 2014 financial year was also an important one for the company in many other ways.
Having listed in 1994 on the Australian Securities Exchange, this year Cedar Woods celebrates
its twentieth anniversary as a public company. At our forthcoming Annual General Meeting and
at a series of other events, the company will be looking back over the past twenty years to
acknowledge the progress that has been made and to celebrate this important milestone.
Reflecting on Cedar Woods’ history, we can be proud of what has been achieved to date and look forward to the future with a
sense of purpose and confidence. The company’s origin as a private company dates back to 1987 and the period up to listing
saw Cedar Woods involved with a land portfolio concentrated around canal development in Mandurah, Western Australia.
Twenty years on, Cedar Woods has grown a significant and diversified portfolio across three state capitals and has also
established a major presence in regional Western Australia. The company’s progress and growth was recognised late last year
by its inclusion in the S&P ASX 300 index.
Over the years, I have had the pleasure to work with an excellent Board, with
directors who are engaged and enthusiastic about Cedar Woods. It was
pleasing that in May 2014, Stephen Thomas Pearce joined the Board as another
independent director. Stephen brings his financial knowledge and capital market
experience to the Board and its Audit & Risk Management Committee. Your Board
remains of the view that the company has a sound strategy and an exciting future.
If I could summate what I believe to be Cedar Woods’ core strengths, they are
persistence and commitment. We determine a long term strategy and remain
committed to the purpose.
View the
20th Anniversary
video at:
cedarwoods.com.au
Cedar Woods is a well-managed company focused on growth and consistent improvement. Our Managing Director, Paul
Sadleir, and his management team have taken a disciplined approach to executing the company’s strategy, which, just this
year, has seen us deliver the first commercial buildings in the Williams Landing town centre, our first project in the Pilbara
(Western Australia), and expansion into the State of Queensland.
These strategic objectives were determined by the Board and the ground work was carefully laid by our management team
over many years. This demonstrates the long term vision necessary to prosper in our industry.
It is a credit to the entire Cedar Woods’ team that they have achieved so much in 2014 and, indeed, over the past twenty
years. The Board acknowledges the hard work and commitment from management and staff - past and present - and thanks
them for their efforts.
In addition, the Board acknowledges the contribution of many of its loyal and longstanding shareholders, some of whom have
been with the company since listing, and the many other stakeholders who have contributed to Cedar Woods’ story.
I hope I have the opportunity to catch up with many of you to reflect on this story, as we look forward to the next twenty years.
William Hames – Chairman
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Celebrating 20 Years
1994
Listed on Australian Stock Exchange
IPO raised $8 million
1998
First Melbourne project acquired
1999
Launched Mariners Cove
Port Mandurah wins third UDIA Award
2002
Established Victorian office
Diversified into medium density developments
2004
10 years as an ASX listed company
CEDAR WOODS PROPERTIES LIMITED
2006
Acquired two more Melbourne projects
2008
Nautilus Apartments wins UDIA Award for
best high density development
Won first two WA State Government tenders
2011
Launched first regional project in the Pilbara
2013
Entered ASX300 with a market cap of $550m
Banbury Village wins two UDIA awards
Brisbane
20 Years as an ASX Listed Company
Perth
Melbourne
Expanded portfolio into Queensland
2014
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2014 ANNUAL REPORT
About Cedar Woods
Cedar Woods Properties Limited is an Australian property development company. The
company was established in 1987 and has been listed on the Australian Securities Exchange
since 1994, trading under the security code ‘CWP’. Its market capitalisation is approximately
$550m.
The company’s principal interests are in urban land subdivision and built form development for residential, commercial
and industrial purposes. Its portfolio of assets is located in Western Australia, Victoria and Queensland. The board and
management of Cedar Woods have extensive experience in the property industry, with particular expertise in adding value
to land holdings through the achievement of government and local authority approvals and the planning, design and delivery
process.
Cedar Woods has consistently generated profits and dividends for shareholders, whilst achieving excellence in product
delivery, as recognised by several national awards and many state awards, including the categories “Best Residential
Estate” and “Environmental Excellence” and most recently, “Best High Density Development”. In the investor relations arena,
the company is a past winner of three ARA silver awards for its Annual Report.
Cedar Woods’ projects are sensitively developed with consideration for environmental and community interests and built
to a high quality that is renowned in the marketplace. Through the rapid expansion of its built form development portfolio,
Cedar Woods has earned a reputation of delivering high quality apartments for both the owner-occupier and investor
market.
The company has a strong focus on shareholder value and its record in delivering quality developments to the market has
produced a strong earnings stream, providing consistently high returns to shareholders.
New report format
This report has been restructured in FY2014 to merge the annual and financial reports which were published separately in
prior years. The notes to the annual report have also been reordered into a more user-friendly style.
Information about specific aspects of Cedar Woods Properties Limited’s financial position and performance is presented
together. For example there are separate sections for risks, the group structure and unrecognised items. Colour-coding
helps finding relevant information quickly.
Cedar Woods Properties has also taken the opportunity to publish the Corporate Governance statement on our website
rather than include in this report. A copy of the 2014 Corporate Governance statement can be downloaded from
www.cedarwoods.com.au
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CEDAR WOODS PROPERTIES LIMITED
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Cedar Woods’ Charter
We are Cedar Woods Properties, an ASX 300 company with a proud history of creating
communities across Australia through high-quality property development.
Our purpose is to create long-term value for our shareholders through the disciplined acquisition,
development and marketing of properties that meet the needs of our customers.
A significant part of our business involves creating vibrant residential communities, typically
in capital city growth corridors, with supporting retail and commercial developments. We are
also active in the redevelopment of major infill sites where we deliver medium and high density
residential dwellings.
Project visioning in collaboration with our key stakeholder groups to produce quality sustainable
outcomes is one of our core values.
Our customers are influenced by interest rates, the economic outlook and Government policies.
Demand in the metropolitan and regional markets in which we operate is uneven and fluctuates in
response to these factors.
Our strategy is to grow and develop our national project portfolio, diversified by geography, product
type and price point, so that it continues to hold broad customer appeal and performs well in a
range of market conditions.
Against this backdrop, we manage our portfolio with the aim of delivering consistent annual growth
in profits and dividends.
2014 ANNUAL REPORT
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Our Business Model
Acquisition of properties
Development
Marketing and Sales
• Identify projects that meet defined
criteria and fit with Corporate
Strategy.
• Undertake project visioning to fulfil
company performance standards
and ensure sustainable outcomes.
• Assess in accordance with defined
parameters and financial targets.
• Conduct research.
• Assess design against financial and
• Prepare marketing and sales
campaigns.
• Launch projects and achieve
sufficient pre-sales to underwrite
each stage of project development.
• Major risks are identified and
non-financial objectives.
• Regular monitoring of sales
contracts structured to minimise
risks.
• Achieve required approvals.
• Manage construction to meet
conditions and buyer groups.
• Manage settlements.
• Joint ventures used where required
annual budget.
or appropriate.
We have a disciplined approach
to the acquisition of new projects
ensuring fit with the Corporate
Strategy, earnings forecast and
defined project criteria.
We have a well-established network
of contacts to identify and present
sites for assessment and an
experienced team of staff ready to
conduct due diligence on sites that
meet our criteria.
We seek projects with strong
points of difference and continually
evaluate opportunities, looking for the
optimum portfolio mix.
We have well established procedures
for the research, design, planning and
delivery of our projects as outlined in
our annual Sustainability Report.
The expertise of our professional staff,
supplemented by the appointment
of the best available consultants and
contractors is a key part of getting
the best project outcomes and
managing project risks.
We have strong relationships with
various Government agencies and
consider this an important part of
successful property development.
A strong sales and marketing
function is an important part of the
company’s business model. We
have an experienced team fulfilling
this function and a well-established
approach to marketing projects.
We understand how to position
projects to maximise demand and
create marketing campaigns that
will ensure sales budgets are met or
exceeded.
The presentation of our projects and
customer service underpin our sales
results.
Achievements
Achievements
Achievements
Numerous projects were assessed
in VIC, WA and more recently south
east QLD, which is seen as an
attractive geographical diversification
to add to the portfolio.
Acquisitions were made at Byford on
the Scarp (WA), Clayton South (VIC)
and Upper Kedron (QLD).
We are in a strong presales position
for FY15 due to the successful
marketing and sales of stages in new
and existing projects. The company
has approximately 50 per cent of the
necessary presales for FY15.
Several new campaigns were
launched including The Brook
at Byford (WA), Clara (VIC) and
apartments at Banbury Village (VIC).
The company continued its
community engagement and
sponsorship program with several
successful initiatives.
Important planning, design and
delivery outcomes achieved:
Victoria
• Rezoning of St Albans site
• Completed Masters Home
Improvements store (Williams
Landing)
• Delivery of numerous stages at
Realm Camberwell, Williams
Landing and Banbury Village
Footscray
• Commenced construction of the
Williams Landing Shopping Centre.
Western Australia
• Elements project completed
(Hedland).
• Approvals advanced at Bushmead,
Mangles Bay and Brabham.
• New stages at Rivergums, Piara
Central and Emerald Park.
CEDAR WOODS PROPERTIES LIMITED
Our Stakeholders
We recognise the important role our stakeholder groups play in the implementation of our
business model. We define successful relationships, together with the related measurement
techniques, as follows:
Shareholders and investors:
• Shareholders support the company by way of their initial investment and participation in the dividend reinvestment
plan, bonus share plan and share purchase plans offered from time to time.
• The company delivers profit and earnings growth within safe gearing limits and growing dividend payments,
measured against our Corporate Plan and Budget objectives.
• The company delivers effective communication of its progress, measured by surveys of institutional shareholders,
questions received at the AGM from shareholders, proxy advisor reports, website patronage and feedback from
entries to Australian reporting awards.
Employees:
• Employees consider Cedar Woods a desirable employer with a high standard of integrity, able to offer personal
development, career progression and a fair and safe workplace. Measures include low staff turnover compared to
industry norms, development and career progression monitoring, company awards, participation in corporate social
responsibility activities, safety record and progress with diversity objectives.
Customers:
• Our customers refer their friends and families to us.
• Customer satisfaction is high and sales targets are reached.
• Measures include pre-development workshops, customer surveys, monitoring of complaints.
Consultants/contractors/suppliers:
• The best groups want to work with us.
• They assist the company in meeting its purpose.
• Monitoring of consultants’ and contractors’ performance is assisted by way of bi-annual performance reviews,
measured against set criteria.
Local / State / Federal Governments and Agencies:
• Cedar Woods is viewed as a competent and trustworthy company and joint venture partner.
• Measures include monitoring of the quality and timing of approval outcomes and review against original feasibility
criteria, internal performance assessment.
Industry bodies:
• Cedar Woods is viewed as a valuable partner by industry groups such as the Urban Development Institute of
Australia, Housing Industry Association, Property Council of Australia, Australian Property Institute, Australian
Institute of Company Directors and Committee for Perth
• Measures include development awards issued by the industry bodies.
Community and environmental groups:
• We consult widely with these groups in the planning and delivery of all of our projects. Engagement with
community groups also occurs with community based events and sponsorship initiatives.
All Stakeholder groups:
• Cedar Woods is seen as a responsible corporate citizen with strong ethics and a track record of environmental
leadership.
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Community Development
and Sponsorship
Cedar Woods’ key objectives in Community Development Strategy are to:
• Focus on creating community wellbeing
• Nurture a strong sense of community in new and existing developments
• Maximise social and environmental connectedness
Cedar Woods recognises that the success of this program is largely reliant on the strength of the partnerships we develop
with both local and state governments, the not-for-profit sector and the local/regional services and amenities available in
each individual community.
Cedar Woods strives to be facilitative and collaborative in our approach to community development and sponsorship in
order to achieve these goals.
Community Development
Throughout FY2014, Cedar Woods has contributed to various not-for-profit organisations and has provided communities a
range of engaging events.
• One of the highlights during FY2014 was the Cubby House challenge, where Cedar Woods raised $6,000 for the
Kids Under Cover Organisation and won the People’s Choice Award at the auction of their designer cubby.
• Community focused events included The Rivergums Movie Night (WA), the Piara Central Easter Event (WA) and the
Emerald Park Summer Living Event (WA) where current and future community residents were engaged through a
range of family friendly entertainment and activities.
Cedar Woods looks forward to continuing community engagement and development through a range of fund raising
initiatives and events.
Neighbourhood Grants
At the heart of the Cedar Woods’ community development strategy is our Neighbourhood Grants program.
Since launching the Neighbourhood Grants program in 2009, Cedar Woods has helped many grass roots community
organisations in and around our developments, awarding over $100,000 in grants to date.
This is a significant contribution that has been shared amongst over 70 community groups, who provide services directly to
our communities and the surrounding areas.
Grant recipients are chosen because:
• They each have diverse interests enabling us to help a wide section of the community
• They offer valuable services that Cedar Woods wants to help grow and provide residents and the wider community
a chance to get involved, be active and socialise.
Currently active at Emerald Park (WA), The Rivergums (WA) and Williams Landing (VIC), the Neighbourhood Grants program
will continue into FY2015 to continue to assist residents and the surrounding community.
Sponsorship
Cedar Woods’ sponsorship activity in FY2014 saw a continuation of our long term involvement in a variety of community,
industry and corporate sponsorships.
In addition, we also gave our support to a number of worthy causes such as the Murdoch University “Discover Your
Potential Scholarship’’ and the Perth International Arts Festival.
In the 2015 financial year Cedar Woods will continue to support a range of community focused causes.
CEDAR WOODS PROPERTIES LIMITED
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Report to Shareholders
On behalf of the Board, we are pleased to present the financial and operating review of Cedar
Woods Properties to shareholders.
Financial and Operating Review
The following summarises the results of operations during the year and the financial position of the consolidated entity at
30 June 2014:
a) 2014 financial highlights
• Revenue of $214,465,000, up 24 per cent;
•
•
record net profit of $40,313,000, up 11 per cent;
full year dividends of 27.5 cents per share, up 6 per cent;
• earnings per share of 54.4 cents, up 9 per cent;
•
low level of bank debt;
• strong interest cover;
• $135,000,000, three year bank facility extended to November 2016.
b) 2014 financial results summary
Year ended 30 June
Revenue
Net profit after tax
Total assets
Net bank debt
Shareholders’ equity
c) Key performance indicators
Year ended 30 June
Basic earnings per share
Dividends per share – fully franked
Return on equity *
Return on capital *
Total shareholder return (1 year)
Net bank debt to equity – 30 June
Interest cover
Net asset backing per share – historical cost
Shares on issue – end of year
Stock market capitalisation at 30 June
Share price at 30 June
2014
$’000
2013
$’000
% Change
214,465
172,751
40,313
36,337
409,948
301,024
32,602
37,762
261,601
207,744
24.1
10.9
36.2
(13.7)
25.9
2013
% Change
¢
¢
%
%
%
%
x
$
2014
54.4
27.5
15.4
19.1
46.6
12.5
10.4
3.34
49.9
26.0
17.5
21.6
53.8
18.2
12.6
2.83
’000
$’000
$
78,336
73,360
572,639
379,269
7.31
5.17
9.0
5.8
(2.1)
(2.5)
(7.2)
(5.7)
(17.5)
18.0
6.8
51.0
41.4
* Return on equity and return on capital are based on the 30 June 2014 balance sheet, subsequent to the May / June
2014 equity raising.
CEDAR WOODS PROPERTIES LIMITED
d) Financial year overview
The 2014 financial year was an exciting year for the company with a number of important milestones achieved. In the
first half the company’s progress and growth was acknowledged when it was admitted into the S&P ASX 300 Index for
the first time. The company also achieved completion of its first commercial development at the Williams Landing Town
Centre in Melbourne, with the opening of the Masters Home Improvement store in December 2013.
In the second half, the company conducted a $30m equity raising, comprising a $25m institutional placement and $5m
share purchase plan which received a strong response from shareholders and closed oversubscribed. The company
made its first land acquisition in Brisbane, marking its strategic entry into the Queensland property market. At the end
of the year the company completed its first project in the Pilbara, with the development of the Elements estate in South
Hedland.
Significant progress was made with stages developed across the company’s property portfolio of active projects. In
addition, plans and approvals were progressed for a number of developments anticipated to commence in future years,
with important planning milestones achieved at the Bushmead, North Baldivis, Mangles Bay (WA) and St Albans (VIC)
projects. Further details of achievements in the property portfolio follow in the next section.
The year closed with a record full year net profit of $40.3m, being the fourth consecutive year of record profit and
earnings, allowing the Board to declare a record full year dividend of 27.5 cents per share.
As a result, earnings per share for FY2014 was 54.4 cents, providing an increase of 9 per cent on the previous year.
Return on equity of 15.4 per cent and return on capital of 19.1 per cent were well above the company’s benchmarks of
12 per cent and 14 per cent respectively.
e) Operational Review of Developments
Dwelling sector indicators across the nation point to a pick-up in activity spurred by low interest rates, with the HIA
economics group forecasting a 7 per cent increase in annual housing starts for calendar 2014, with solid demand
continuing in 2015. The strong inbound migration and a shortage of supply continue to provide the underlying
fundamentals to support growing demand for residential property.
In Victoria, residential lot sales and new home sales were well above the September 2012 cyclical low point and
demand remains strong for well located property close to transport infrastructure and other amenities. The shortage of
supply in key precincts has led to solid price gains in 2014.
In WA, strong ongoing population growth, relatively low unemployment and positive consumer confidence has
underpinned the WA property market, with solid conditions over the last 12 months. Demand from first home buyers
has levelled off with upgraders and investors now driving the middle – upper market.
In Queensland, State Treasury is forecasting economic growth in FY2015 and FY2016 faster than every other State in
Australia, with dwelling investment the main driver in FY2015. Queensland is at an earlier phase in the housing cycle
than the other States and an upswing in activity is expected over the next three to four years.
i. Western Australia
Activity levels improved significantly at the company’s current Western Australian land estates, with price levels
moderately increasing during the year.
In August 2013, the portfolio of projects in WA was enhanced with the acquisition of 35.3 hectares of new land at
Byford on the Scarp for $9.3m. This acquisition followed the purchase of 32.3 hectares in February 2013 (since
launched as ‘The Brook at Byford’) giving a combined total landholding of some 68 hectares or over 670 residential
lots in this fast growing corridor. The acquisition continued a strategy to acquire and develop land in corridors
where the company has previously been unrepresented in recent years. Sales at the Byford projects have been
encouraging, with these projects expected to contribute to earnings over a number of years.
At The Rivergums Baldivis, strong activity levels continued after the opening of the Baldivis Secondary College with
the company releasing lots in adjoining stages. Similarly high levels of activity were recorded at Emerald Park in
Wellard with all available lots selling out during the year.
The Carine Rise project, a co-development between LandCorp, Cedar Woods and the St Ives Group will transform
the former TAFE site in Perth’s middle northern suburb of Carine, into a multi-use precinct incorporating residential
aged care, a retirement village, residential lots, townhouses and apartments. The civil works were completed
during the year with all but six of the titled lots sold and settled, which will enable the built form components to be
undertaken in due course.
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Elements at South Hedland is the first Cedar Woods project in the burgeoning Pilbara region consisting of over 130
lots on 11 hectares. Working with project partners, mining companies, builders and, importantly, local residents
and businesses, Cedar Woods has completed the development and delivered the titled lots during the second
half. Almost all of the lots are sold, helping to satisfy the strong housing demand in the area. The first settlements
commenced in FY2014, continuing into FY2015.
The company has invested, along with a private syndicate, in the Batavia Marina Apartments, on the waterfront in
Geraldton in the State’s mid-west. The project comprises 50 luxury apartments and four retail tenancies, mostly
with marina and ocean views. The development was completed in late 2013 and settlement of the sold apartments
commenced in the first half and continued in the second half. However, the rate of sales has been slower than
initially anticipated and although forecast income for the project has not changed significantly, the company took
the decision in the first half to write down the carrying value of its interest by $700,000 to $7.4m, as realisation of its
investment will be over a longer period than previously anticipated.
Approval milestones were achieved at three projects in the portfolio that are expected to contribute significantly
to the company’s future prospects. At Bushmead, the Town Planning Scheme amendment was approved by the
City of Swan in May 2014. At North Baldivis, the City of Rockingham at its March Council meeting initiated an
amendment to its town planning scheme to rezone the area of CWP’s landholding zoned Urban in the Metropolitan
Region Scheme from Rural to Development Zone. The Mangles Bay Marina development in Rockingham has also
recently received State Ministerial environmental approval.
ii. Victoria
The company’s major residential projects in Victoria performed well during the year, continuing to record strong pre-
sales and good levels of enquiry. Several new residential stages were completed at the Williams Landing, Banbury
Village and Camberwell developments, and strong pre-sales have already been recorded for delivery in FY2015.
During the first half, the company completed construction of the new Masters Home Improvement store in the
Williams Landing town centre, with the store opening for business before the busy Christmas trading period. Early
in the second half, the company commenced the development of the first stage of the Williams Landing Shopping
Centre. The 6,750m2 centre will comprise a Woolworths supermarket and 24 speciality shops and kiosks. The
centre, which is expected to be completed by mid FY2015, will also incorporate 1,760m2 of office space on two
storeys. These developments, together with the opening of a new 45 home builder display village, have boosted
demand for the company’s residential lots and interest in the Williams Landing Town Centre.
The company’s project at St Albans received a major boost in November when Brimbank City Council adopted an
amendment to rezone the 6.8 hectare site from industrial to residential. Work on the site is expected to commence
in mid-2015 with residents moving in halfway through 2016.
In November 2013, the company acquired a 6.5 hectare infill site in Clayton South, 19 kms south east of
Melbourne’s CBD for $25.3m. The site is approved for residential use and is expected to yield approximately 250
dwellings with a range of housing solutions, including townhouses and apartments. The acquisition will be settled in
August 2014, with construction expected to commence in 2015 and first settlements planned for 2016.
iii. Queensland
In May 2014 the company made its first investment in Queensland with the purchase of 227 hectares of land at
Upper Kedron, 13 kms west of Brisbane’s CBD.
Cedar Woods will pay $68m plus GST over four and a half years for the project and will develop a master-planned
residential community on the site, providing more than 1,000 lots over 10 years. The acquisition was funded by the
May share placement and Cedar Woods’ corporate debt facilities.
The project is close to transport infrastructure and other amenities and there are no other major master-planned
development sites in the Brisbane City area – all factors which make Upper Kedron an attractive proposition and
consistent with the company’s selection criteria.
Cedar Woods plans to deliver a high-quality development at Upper Kedron to attract a mix of buyer segments, with
particular focus on second and third home buyers. Planning for the site is underway and is expected to take six to
nine months. Construction of the first stage is expected to take approximately nine months.
CEDAR WOODS PROPERTIES LIMITED
f) Corporate Objectives, Strategy and Risks
Cedar Woods’ Corporate Plan guides management’s activities and provides a five year outlook for the company,
projecting earnings and other key performance indicators.
Cedar Woods’ primary objective is to create value for shareholders as it aims to deliver strong year on year growth
in net profit and earnings per share and put the company in the top half of all listed industrial companies based on
financial performance. This year, the company reported full year net profit growth of 11 per cent and dividend growth of
6 per cent.
The Corporate Plan sets out a number of key action items and strategies focused on achieving delivery of earnings
growth and addressing key risk factors. These key actions are implemented as performance targets by senior
executives, sales managers and other employees.
In addition, twice each year our Audit and Risk Management Committee assesses risk factors that may affect the
company including specific risks affecting individual projects and more general risks affecting our business sector.
The overarching strategic objective is to grow and develop our national project portfolio, diversified by geography,
product type and price point, so that it continues to hold broad customer appeal and performs well in a range of market
conditions.
The company’s strategies, as set out in the Corporate Plan and shown in our business model on page 10 are:
i. Acquisition of properties
In the last year the company bolstered its land bank by completing a number of key acquisitions. New land was
purchased at Byford in Perth, Clayton South in Melbourne and Upper Kedron in Brisbane. The focus on the project
pipeline guides management’s activities by ensuring there is sufficient diversity of product to meet the company’s
ongoing earnings objectives in the years ahead and influences the company’s acquisition strategy.
A summary of the project pipeline may be found at the end of this Financial and Operating Review.
Cedar Woods’ core competency is in property development and the company continues to achieve industry-
leading design, delivery and marketing of projects to maximise returns.
ii. Development
The company has a strategically located and diverse residential portfolio in urban and regional growth areas in
Victoria, WA and Queensland, offering a wide spectrum of dwelling product and price points to consumers. The
company’s offerings include small affordable housing lots at its residential estates through to high-end luxury
apartments at boutique waterfront developments.
Cedar Woods utilises joint ventures and co-development arrangements to diversify the company’s revenue streams
and efficiently manage its capital. This year, the company completed the Carine Rise project, an important co-
development with LandCorp and has progressed development by Cedar Woods Wellard Limited, which generates
ongoing revenue by way of management and selling fees.
Cedar Woods will build a limited number of commercial and retail property assets at Williams Landing and at other
estates, where the development of those buildings is consistent with the estate’s master plan objectives. The
long term ownership of those assets will be balanced against the company’s capital management objectives and
acquisition opportunities. Developments may be sold once they have achieved the amenity objectives and their
valuations have matured, with disposals likely to become a regular component of the company’s future revenue
stream.
ii. Marketing and sales
The company continually assesses the markets in which it operates in order to ensure it has a wide offering
of product to meet customer demand. Achieving sufficient pre-sales underwrites each development and is an
important performance indicator for management. The company has successfully launched new projects at
Elements in South Hedland, Carine Rise and Byford on the Brook in Perth and at Clara, at Williams Landing in
Melbourne during the year.
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g) Risks
The general risks to company performance include those relevant to the property market including government policy
in relation to immigration and support for the housing industry generally, the environmental policy framework, monetary
policy set by the Reserve Bank of Australia, the strength of the labour market and consumer confidence.
The company is also exposed to the property cycles in the markets in which it operates, i.e. Western Australia (regional
and metropolitan), Victoria (metropolitan) and Queensland (metropolitan). The fluctuations in demand in these markets
represent a risk to achieving the company’s financial objectives. The company aims to mitigate this risk by operating in
diverse geographical markets and offering a wide range of products and price points to consumers.
There has been recent speculation in the media that future house price growth will be below the rate of inflation. Whilst
house and land prices fluctuate, underlying demand will be driven by population growth. In the past, the company has
achieved its profit objective by managing both prices and volumes through the property cycle.
Individual projects are exposed to a number of risks including those related to obtaining the necessary approvals for
development, construction risks and delays, pricing risks and competition. The company aims to balance its portfolio at
any time in favour of mature projects where the project risks are generally diminished.
h) Capital management
The company enhanced its credit facilities during the year, increasing the corporate bank facility limit from $110m
to $135m, and extending the tenure by a further year to November 2016. In addition, a new $23m bank facility was
progressed to facilitate the development of the Williams Landing Shopping Centre. In June 2014, the company
completed a $30m equity raising, comprising a $25m institutional placement and a $5m share purchase plan,
considerably strengthening the balance sheet. The year concluded with a low net debt to equity of 12.5 per cent at year
end, temporarily below the company’s target debt to equity range of 20-75 per cent. Interest cover was at a favourable
10.4 times.
The dividend policy, which is to distribute approximately 50 per cent of the annual net profit, was maintained. The
dividend reinvestment plan and bonus share plans remained in operation for both of the dividends paid during the
year, although these have been suspended for the final dividend payable in October 2014 due to the company’s strong
financial position.
i) Sustainability Reporting and Corporate Governance Report
These reports are available as separate downloadable documents on our website www.cedarwoods.com.au under the
Corporate Governance and Shareholder reports pages.
j) People
Our management team continues to expand to support the growth in the business.
Cedar Woods remains committed to an inclusive workplace that embraces and promotes diversity and during the year
the company embellished its workplace policies to further those objectives. The diversity policy sets out a framework
for the company’s diversity-related initiatives, strategies and programs. Commentary is provided in the Corporate
Governance Statement on the company’s website.
The company has continued to actively support a range of industry groups including the Property Education Foundation
of WA which focuses on improving property professionals’ skills. In 2014, Cedar Woods participated in promotional
activities with the Foundation to help attract graduates to the development industry.
k) Board Matters
The board is conscious of its duty to ensure the company meets its performance objectives. During the year the board
and its committees reviewed their respective charters and performance to ensure they were properly discharging their
responsibilities. The charters were updated during the year as required and are published on the company’s website.
During the year, the company undertook a director recruitment exercise, utilising a specialist recruitment firm. The
Board’s skill matrix and Corporate Plan helped identify the required attributes for the new director. Mr Stephen Pearce
was appointed on 16 May 2014 and his financial knowledge and capital market experience strengthens the Board
and its Audit and Risk Management Committee. The Audit and Risk Management Committee now has a majority of
independent directors.
CEDAR WOODS PROPERTIES LIMITED
l) Outlook
The Australian economy is forecast to grow slightly below trend in FY2015 as the construction phase of the resources
boom continues to wind down. However, the underlying fundamentals of the property market remain solid, particularly
in Western Australia, Victoria and Queensland, where the company’s portfolio is located. Strong levels of inbound
migration, and historically low interest rates are expected to continue to support the property market, to some extent
tempered by the higher unemployment rate and softening consumer confidence.
The medium-to-long term prospects of the residential property sector remain positive in the states in which the
company operates. The Western Australian economy is forecast to grow at 2.75 per cent in FY2015 with population
growth of 2.1 per cent. Victoria’s economy is expected to grow at a steady 2.5 per cent in FY2015, with population
growth of 1.8 percent anticipated. The Queensland economy is expected to grow at 3.0 per cent in FY2015 with 2.0
per cent population growth. (State Treasury forecasts).
Cedar Woods enters FY2015 with low debt, a strong balance sheet and a diverse portfolio in major growth regions in
three States. The company has $139m of presales in place and a number of new projects commencing. Assuming
the current level of sales activity continues, the company anticipates delivering a net profit after tax at least in line with
last year’s record profit. With ample funding and approvals in place, your board remains positive about the company’s
outlook.
In FY2014, we have continued to actively engage with the investment and broking community to raise Cedar Woods’
profile and build awareness of the strength of the company’s portfolio, culminating in the company’s inclusion in the
S&P ASX 300 index. We are pleased with the support of our existing shareholders and welcome the new institutional
and retail investors onto our register, following the recent share placement.
In August 2014, the company celebrates 20 years listed on the Australian Securities Exchange, looking back on a
period that has been highly rewarding for the company’s shareholders and other stakeholders. We look forward to
further building on the strength of the company in the years ahead.
We would like to thank our fellow directors and staff for their dedication and hard work in 2014. Thanks also go to our
shareholders for their ongoing support of Cedar Woods in 2014 and in the years ahead.
William Hames
Chairman
Paul Sadleir
Managing Director
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Project Pipeline
as at 30 June 2014
PROJECT NAME
CORRIDOR /
LOCATION
PROJECT TYPE
LOTS / UNITS
PROJECT
LOTS / UNITS
REMAIN
FY15
FY16
FY17
FY18
FY19
PROJECT LIFE
(As of 30/6/14)
WESTERN AUSTRALIA - PERTH
Sutton Farm - Mandurah
South
Canal
Carine Rise - Carine
North West
Residential / Mixed Use
Emerald Park - Wellard
South West
Residential Land
Piara Central - Piara Waters
South East
Residential Land
The Brook at Byford
Byford on the Scarp
South East
Residential Land
South East
Residential Land
Mariners Cove - Mandurah
South
Canal
The Rivergums - Baldivis
South West
Residential Land
Harrisdale Green - Harrisdale
South East
Residential / Mixed Use
Brabham
North East
Residential Land
Waterline - Halls Head
Mangles Bay Marina - Rockingham
South
South
Lots
Marina / Tourist
North Baldivis
South West
Residential Land
Bushmead - Hazelmere
Pinjarra
East
South
Residential Land
Residential Land
WESTERN AUSTRALIA - REGIONAL
Batavia Marina - Geraldton
Mid-West
Apartments
Elements - South Hedland
Western Edge - South Hedland
Pilbara
Pilbara
Residential Land
Residential Land
VICTORIA - MELBOURNE
Realm - Camberwell
Clara
Banbury Village - Footscray
Carlingford
Williams Landing
Williams Landing Town Centre
Clayton South
St A - St Albans
QUEENSLAND - BRISBANE
Housing
Residential Land
Apartments & Housing
Residential Land
East
West
West
North
West
West
Retail / Mixed Use / Residential
South East
Apartments & Housing
North West
Housing
Residential Land & Housing
2,400
1,172
Upper Kedron
West
Residential Land
> 1,000
> 1,000
6
43
627
481
367
323
973
1,365
427
480
9
TBC
850
750
920
54
139
600
78
40
431
648
4
6
209
358
367
313
97
526
262
480
9
TBC
850
750
920
33
91
600
9
40
175
185
600
250
250
600
250
250
CEDAR WOODS PROPERTIES LIMITED
PROJECT NAME
CORRIDOR /
LOCATION
PROJECT TYPE
LOTS / UNITS
LOTS / UNITS
PROJECT
REMAIN
FY15
FY16
FY17
FY18
FY19
PROJECT LIFE
(As of 30/6/14)
Planning & Design
Development & Sales
Leasing, Development & Sales
WESTERN AUSTRALIA - PERTH
Sutton Farm - Mandurah
South
Canal
Carine Rise - Carine
North West
Residential / Mixed Use
Emerald Park - Wellard
South West
Residential Land
Piara Central - Piara Waters
South East
Residential Land
The Brook at Byford
Byford on the Scarp
South East
Residential Land
South East
Residential Land
Mariners Cove - Mandurah
South
Canal
The Rivergums - Baldivis
South West
Residential Land
1,365
Harrisdale Green - Harrisdale
South East
Residential / Mixed Use
Brabham
North East
Residential Land
Waterline - Halls Head
Lots
Mangles Bay Marina - Rockingham
Marina / Tourist
North Baldivis
South West
Residential Land
Bushmead - Hazelmere
Pinjarra
Residential Land
Residential Land
WESTERN AUSTRALIA - REGIONAL
Batavia Marina - Geraldton
Mid-West
Apartments
Elements - South Hedland
Western Edge - South Hedland
Pilbara
Pilbara
Residential Land
Residential Land
VICTORIA - MELBOURNE
Realm - Camberwell
Clara
Banbury Village - Footscray
Carlingford
Williams Landing
Clayton South
St A - St Albans
QUEENSLAND - BRISBANE
Housing
Residential Land
Apartments & Housing
Residential Land
South East
Apartments & Housing
North West
Housing
South
South
East
South
East
West
West
North
West
West
Williams Landing Town Centre
Retail / Mixed Use / Residential
Residential Land & Housing
2,400
1,172
Upper Kedron
West
Residential Land
> 1,000
> 1,000
6
43
627
481
367
323
973
427
480
9
TBC
850
750
920
54
139
600
78
40
431
648
600
250
250
4
6
209
358
367
313
97
526
262
480
9
TBC
850
750
920
33
91
600
9
40
175
185
600
250
250
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Directors’ Report
Your directors present their report on the consolidated entity consisting of Cedar Woods Properties Limited (‘the
company’) and the entities it controlled (together ‘the consolidated entity’ or ‘group’) at the end of, or during, the year
ended 30 June 2014.
a) Directors
The following persons were directors of Cedar Woods Properties Limited during the whole of the financial year and up
to the date of this report, except where stated:
William George Hames (Chairman)
Robert Stanley Brown (Deputy Chairman)
Ronald Packer
Stephen Thomas Pearce (appointed on 16 May 2014)
Paul Stephen Sadleir (Managing Director)
Timothy Robert Brown (Alternate for R S Brown)
b) Principal activities
The principal continuing activities of the consolidated entity in the course of the year ended 30 June 2014 were that of
property developer and investor and no significant change in the nature of those activities took place during the year.
c) Dividends
Dividends paid to members during the financial year were as follows:
Final fully franked ordinary dividend for the year ended 30 June 2013 of 15.0 cents
(2012 - 14.0 cents) per fully paid share, paid on 30 October 2013 (2013 – 31
October 2012)
Interim fully franked ordinary dividend for the year ended 30 June 2014 of 12.0 cents
(2013 – 11.0 cents) per fully paid share, paid on 30 April 2014 (2013 – 30 April 2013)
2014
$’000
2013
$’000
10,668
9,859
8,709
19,377
7,830
17,689
Since the end of the financial year the directors have recommended the payment of a final fully franked ordinary dividend
of $12,142,138 (15.5 cents per share) to be paid on 31 October 2014 out of retained earnings at 30 June 2014.
d) Financial and operating review
Information on the operations and financial position of the group and its business strategies and prospects is set out in
the financial and operating review, commencing on page 14 of this annual financial report.
e) Business strategies and prospects for future financial years
The consolidated entity will continue property development operations in Western Australia, Victoria and Queensland. It
is planned to make further additions to the property portfolio, which may include additional property joint ventures.
Subject to market conditions continuing at current levels, the group anticipates delivering a net profit at least in line with
the 2014 result, underpinned by a significant bank of presales already in place at the date of this report.
CEDAR WOODS PROPERTIES LIMITED
f) Significant changes in the state of affairs
Significant changes in the state of affairs of the consolidated entity during the year were as follows:
Contributed equity increased by $32,921,000 (from $83,795,000 to $116,716,000) as a result of the institutional
placement, the share purchase plan and the issue of shares under the dividend reinvestment plan and bonus share
plan. Details of changes in contributed equity are set out in note A4(a) of the financial statements.
The net cash received from the issue of contributed equity was applied to debt reduction, and the group makes
redraws on its debt facility to fund new acquisitions and develop new estates on existing landholdings.
g) Matters subsequent to the end of the financial year
No matters or circumstances have arisen since 30 June 2014 that have significantly affected or may significantly affect:
a.
b.
c.
the consolidated entity’s operations in future financial years; or
the results of those operations in future financial years; or
the consolidated entity’s state of affairs in future financial years.
h) Likely developments and expected results of operations
Beyond the comments at items (d) and (e), further information on likely developments in the operations of the
consolidated entity and the expected results of operations have not been included in this report because the directors
believe it would be likely to result in unreasonable prejudice to the consolidated entity.
i) Environmental regulation
To the best of the directors’ knowledge, the group complies with the requirements of environmental legislation in
respect of its developments, and obtains the planning approvals required prior to clearing or development of land under
the laws of the relevant states. There have been no instances of non-compliance during the year and up to the date of
this report.
j)
Information on directors
Mr William G Hames, B Arch (Hons) MCU (Harvard) LFRAIA, MPIA, FAPI (Econ)
• Chairman of the Board of directors, non-executive director
• Member of the Nominations Committee
Mr Hames is a co-founder of Cedar Woods Properties Limited. He is an architect and town planner by profession,
and received a Masters Degree in City Planning and Urban Design from the Harvard Graduate School of Design, at
Harvard University in Boston. He worked in the US property development market before returning to Australia in 1975
and establishing Hames Sharley Australia, an architectural and town planning consulting company. Mr Hames brings
substantial property experience to the Board upon which he has served as a director for twenty-four years.
Other current listed company directorships and former listed company directorships in the last three years:
None.
Mr Robert S Brown, MAICD, AIFS
• Deputy Chairman of the Board of directors, non-executive director
• Member of the Audit and Risk Management Committee
• Member of the Human Resources and Remuneration Committee
• Member of the Nominations Committee
Mr Brown is Executive Chairman of Westland Group Holdings Pty Ltd, with responsibilities in mining, agribusiness,
biotechnology and venture capital. He is a past president of the Federation of Building Societies of WA and has
participated in and chaired various Western Australian government advisory committees related to the housing industry.
Mr Brown brings to the Board his diversified experience as a director of these companies and other listed entities and
has served as a director of Cedar Woods Properties Limited for twenty-six years.
Other current listed company directorships and former listed company directorships in the last three years:
Luiri Gold Limited.
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Mr Ronald Packer, BCom (UWA), FAICD, Solicitor Supreme Court of England & Wales
• Non-executive director
• Chairman of the Audit and Risk Management Committee
• Chairman of the Human Resources and Remuneration Committee
• Chairman of the Nominations Committee
Mr Packer is an independent director who brings to the Board a wide range of property experience in the public and private
arena. He is the former Managing Director of PA Property Management Limited, the responsible entity for the PA Property
Trust and is currently the Chairman of Terrace Properties and Investments Pty Ltd. Mr Packer has served as a director for
eight years and chairs all of the Board’s committees.
Other current listed company directorships and former listed company directorships in the last three years:
None.
Mr Stephen T Pearce, BBus (ACC), Grad Dip (Admin), FCA, AGIA, MAICD
• Non-executive director
• Member of the Audit and Risk Management Committee
Mr Pearce is an independent director with almost 30 years’ senior executive and directorship experience at publicly-listed
companies in the resources, oil and gas, energy and utilities sectors and has significant expertise across all areas of finance
and capital markets. He is currently the Chief Financial Officer of Fortescue Metals Group Ltd. Mr Pearce previously held
the position of Managing Director and CEO of Southern Cross Electrical Engineering Limited and, before that, was Chief
Financial Officer of Alinta Limited. He is currently non-executive Chairman of the Lions Eye Institute and was previously a
member of the Salvation Army’s Business and Industry Committee. He was appointed a director on 16 May 2014.
Other current listed company directorships and former listed company directorships in the last three years:
None.
Mr Paul S Sadleir, BE, MBA, AAPI, FAICD
• Managing Director, executive director
Mr Sadleir has extensive experience in the property sector including strategic planning, portfolio management,
acquisition analysis, equity and finance raising and investor relations management. Mr Sadleir holds Masters of Business
Administration and Bachelor of Engineering degrees from the University of Western Australia. Prior to joining Cedar Woods,
he was manager of the Bunnings Warehouse Property Trust and previously held roles with Wesfarmers Limited, Western
Power and Barrack Mines. He is currently a Board member of the Bridgewater care group, one of the largest providers of
residential aged care in Western Australia, a Division Councillor at the WA Division of the Australian Institute of Company
Directors and a Senate member of Murdoch University.
Other current listed company directorships and former listed company directorships in the last three years:
None.
Mr Timothy R Brown, BA, LLB, M. Fin, Post Graduate Diploma (Phil)
• Alternate director for Mr Robert S Brown
Mr Brown is a director of Westland Group Holdings Pty Ltd, with responsibilities in mining, agribusiness, biotechnology and
venture capital. His qualifications include a Bachelor of Laws from Notre Dame Australia and a Masters of Finance from
Curtin University. Mr Brown was admitted to the Supreme Court of Western Australia as a barrister and solicitor in 2004.
Other current listed company directorships and former listed company directorships in the last three years:
None.
Company Secretary
The Company Secretary is Mr Paul S Freedman, BSc, CA, GAICD. Mr Freedman was appointed to the position in
1998. He is a member of the Institute of Chartered Accountants in Australia and is a member of the Australian Institute
of Company Directors. He brings to the company a background of twenty years in financial management in the property
industry, preceded by employment in senior roles with major accountancy firms.
CEDAR WOODS PROPERTIES LIMITED
k) Shares issued on the exercise of options
No share options were in existence during the year and none have been issued up to the date of this report.
l) Directors’ interests in shares
Directors’ relevant interests in shares of Cedar Woods Properties Limited at the date of this report, as defined by
sections 608 and 609 of the Corporations Act 2001, are as follows:
Director
William G Hames
Robert S Brown*
Ronald Packer
Stephen T Pearce
Paul S Sadleir
Timothy R Brown*
Interest in ordinary shares
9,778,488
7,970,135
166,782
15,000
1,045,445
4,639,980
*R S Brown and T R Brown have a shared interest in 4,639,980 shares.
m) Committees of the Board
As at the date of this report Cedar Woods Properties Limited had the following committees of the Board:
Audit and Risk Management
Committee
Human Resources and
Remuneration Committee
Nominations Committee
R Packer (Chairman)
R Packer (Chairman)
R Packer (Chairman)
R S Brown
S T Pearce
R S Brown
-
R S Brown
W G Hames
n) Meetings of directors
The following table sets out the numbers of meetings of the company’s directors (including meetings of committees of
directors) held during the year ended 30 June 2014, and the numbers of meetings attended by each director:
Board Meetings
Meetings of Committees
Audit and Risk
Management
Human Resources
and Remuneration
Nominations
Number of meetings held:
W G Hames
R S Brown
R Packer
S T Pearce (1)
P S Sadleir
T Brown (alternate director)
* Not a member of this committee
10
10
9
10
2
10
1
5
*
5
5
1
*
-
3
*
3
3
*
*
-
4
4
4
4
*
*
-
(1) S T Pearce was appointed on 16 May 2014 and attended the Board and Audit and Risk Management Committee
meetings for which he was eligible.
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Directors’ Report:
Remuneration Report.
The directors present Cedar Woods Properties Limited’s 2014 remuneration report which sets out remuneration information
for the directors and other key management personnel.
The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations
Act 2001.
The key management personnel of the company and the group are the directors, whose details appear on pages 23-24
above and the following executive officers:
Nathan Blackburne – Victorian & Queensland State Manager
Stuart Duplock – West Australian State Manager (ceased employment with the company 14 August 2014)
Paul Freedman – Chief Financial Officer
o) Remuneration governance
The Human Resources and Remuneration Committee is a committee of the Board. It is responsible for making
recommendations to the Board on:
•
•
•
•
the over-arching executive remuneration framework
non-executive director fees
operation of incentive plans and key performance hurdles for the executive team, and
remuneration levels of the managing director and other key management personnel.
The committee’s objective is to ensure that remuneration policies and structures are fair and competitive and aligned
with the long-term interests of the company. The Human Resources and Remuneration Committee periodically obtains
independent remuneration information to ensure directors’ fees and executive remuneration packages are appropriate
and in line with the market (see section t) v – Use of Remuneration Consultants below).
The Corporate Governance Statement provides further information on the role of this committee, and may be found on
the company’s website under the Investor Relations link.
p) Non-executive director remuneration policy
On appointment to the Board, all non-executive directors enter into a service agreement with the company in the
form of a letter of appointment. The letter details the terms, including remuneration, relevant to the office of director.
Fees and payments to non-executive directors reflect the demands which are made on, and the responsibilities of
the directors. Directors’ remuneration is inclusive of additional fees paid to directors who sit on committees, with an
additional fee payable for chairing committees. Fees take into account the memberships of directors on subsidiary
Boards. Non-executive directors’ fees and payments are reviewed from time to time by the Human Resources and
Remuneration Committee, taking into account comparable roles and market data. Non-executive directors do not
receive performance based pay.
q) Directors’ fees
Non-executive directors’ base remuneration was last reviewed from 1 July 2010 and again with effect from 1 July 2013.
Remuneration of non-executive directors is determined by the Board, after receiving recommendations from the Human
Resources and Remuneration Committee, within the maximum amount approved by the shareholders from time to time
(currently $500,000).
CEDAR WOODS PROPERTIES LIMITED
The following annual fees (inclusive of superannuation) have applied:
Chair
Deputy Chair
Other non-executive directors
Committee chair
2014
$
148,000
114,000
80,000
12,000
2013
$
130,000
100,000
70,000
10,000
r) Executive remuneration policy and framework
Our purpose is to create long-term value for shareholders with the aim of delivering consistent annual growth in profits
and dividends. Our performance measures align with our purpose. Our business model and key achievements for
FY2014 are set out on page 10.
The objective of the group’s executive reward framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework aligns executive rewards with achievement of strategic objectives
and the creation of value for shareholders. The Board of directors ensures that executive reward satisfies the following
key criteria for good reward governance practices:
• Competitiveness and reasonableness
• Acceptability to shareholders
• Alignment of executive compensation to group performance
• Transparency
• Capital management.
The framework is aligned to shareholders’ interests by having profitability and return on equity as core components of
plan design.
The framework is aligned to program participants’ interests as follows:
• Rewards capability and experience
• Reflects competitive reward for contribution to growth in shareholder wealth
• Provides a clear structure for earning rewards
• Provides recognition for contribution.
The framework provides a mix of fixed and variable pay, including appropriate incentives. Performance related
components are available to certain executives based on the earnings performance of the group measured against the
objectives set in the Corporate Plan and achievement of personal objectives established at the start of the year.
Performance related components are awarded each year following the audit of the annual results. These may be
adjusted up or down in line with under or over achievement against the target performance levels, at the discretion of
the Human Resources and Remuneration Committee.
The Human Resources and Remuneration Committee also considers issues of succession planning, career
development and staff retention.
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s) FY2014 performance measurement and assessment
Company objectives and accountability measures for key management personnel were as follows:
Objective
Measures
Outcomes
Acquisition of properties:
• Fit with current portfolio
• To enhance the portfolio
• Exceeds stock sold each year
Developments:
• On time, on budget
• Product/price/geographic
diversification
• Forecast to meet required hurdle
rate
• Rezonings and approvals achieved
versus budget (timeframes and
permitted development)
• Monthly reporting of actual vs
budget development costs
• Acquired one new project in each
state, each with point of difference
• Bolsters portfolio and strong
returns forecast
• Rezonings and approvals received
on most projects
• Some delays and cost overruns
on projects but more than
compensated by strong outcomes
on balance of portfolio
Marketing and Sales:
• Monthly reporting of sales and
• Met sales targets to ensure profit
• Achieve premium prices and
consistent sales in varying market
conditions
settlements vs budget
guidance was achieved
• Actual prices vs budget
• Prices generally at a premium and
• Marketing spend
• Customer satisfaction
above budget
• Positive referrals and feedback
Financial Performance and Health:
• Growth in NPAT and EPS
• NPAT up 11% and EPS up 9%
• Continued growth in a risk
• Satisfactory ROE and ROC
• ROE 15.4%, ROC 19.1%
controlled manner
• Gearing (debt/equity)
• Gearing 12.5%, marginally below
• Capital management
• Risk management framework in
place
bottom of target range
• Successful raising funded
Queensland entry
• Risks identified and mitigated
People:
• Staff productivity
• Key company objectives achieved
• Committed personnel in a safe
• Staff development
• Competencies improved
working environment
• Staff turnover
• OH&S
• Minimal turnover
• OH&S systems managed and
improvements underway
Shareholders and Investors:
• Participation in share issues
• Successful capital raising
• Support the company
• Company investor relations
• Positive feedback including
program
external survey of institutional
investors
This performance measurement framework is being further developed for financial year 2015 and will provide a closer
alignment to the company’s overriding objective of providing long term value to shareholders.
t) Pay of Managing Director and other executives
The executive pay and reward framework has the following components::
• Base pay and benefits
• Short-term and long term performance incentives
• Other remuneration such as superannuation.
The combination of these comprises the executive’s total remuneration.
CEDAR WOODS PROPERTIES LIMITED
i. Base pay
Base pay is structured as a total employment cost package which may be delivered as a combination of cash and
prescribed non-monetary benefits at the executives’ discretion.
Executives are offered a competitive base pay that comprises the fixed component of pay and rewards. From time
to time external remuneration consultants provide analysis and advice to ensure that remuneration is set to reflect
the market for a comparable role. Base pay for executives is reviewed annually to ensure the executive’s pay is
competitive with the market.
There are no guaranteed base pay increases included in any executives’ contracts.
ii. Non – monetary benefits
Some executives receive benefits including parking and membership of certain professional organisations.
iii. Short-term incentives (STI)
Each executive has a target STI opportunity depending on the accountabilities of the role and impact on
organisational performance. For senior executives, key accountabilities relate to operating, financial and employee
management activities within their areas of control.
Operating measures include progress with planning and development of current projects, identification and
acquisition of new projects, product positioning as well as ensuring compliance and risk management processes
are operating effectively.
Financial measures include performance against budget and corporate plan targets, including sales revenues
achieved, control of operating and capital costs and capital management.
Employee measures include recruitment, retention, training and development of staff, thereby ensuring the
company is well resourced and positioned for growth.
The bonus opportunities for each executive are set annually by the Human Resources and Remuneration
Committee.
In FY2014, the company achieved NPAT of $40.3m which exceeded the $39m hurdle set at the beginning of the
year, at which point:
• 50% of executives’ incentives were available, with the actual amount paid based on individual accountabilities
and performance.
• 25% of executives’ incentives were awarded based on exceeding the $39m hurdle.
A further 25% was awarded by the Human Resources and Remuneration Committee based on the company
meeting its earnings guidance.
The Human Resources and Remuneration Committee has the discretion to adjust STI awards in the light of
personal performance and the final profit result.
iv. Long-term incentives (LTI)
The company operates a retention incentive plan, which first commenced in FY2012, for executives and other
managers. The retention incentive is designed as a cash bonus opportunity that vests three years after award,
based on company and individual performance criteria assessed in the first year and ongoing employment with the
group for the remaining two years. The LTI is only available if the group meets the pre-determined profit target in
the first year. In FY2014 the profit target was a minimum net profit of $39m.
In financial year 2015, it is intended that the STI and LTI awards will be based on the performance measurement
framework on page 28 which encompasses a broader set of objectives than has been used in past years.
If the employee leaves the company before the vesting date no bonus is paid, although the Board may waive this
restriction at its discretion, for example when an employee retires. If an employee is made redundant after the
award but before the vesting date then the bonus is paid out.
In FY2014 a total of $335,750 was awarded under the retention incentive plan for executives and other staff, which
will vest on 1 July 2016. The total awarded under the plan in previous years which has yet to vest is $287,000.
The company moved to a cash based incentive plan following the period of pronounced share price volatility
associated with the global financial crisis and its aftermath.
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The Human Resources and Remuneration committee continues to monitor trends in the area of long term
incentives, recognising that staff retention is an important issue, whilst at the same time ensuring remuneration
levels are reasonable.
The operating, financial and employee measures used in awarding LTI’s are the same as those used in STI awards.
v. Use of remuneration consultants
In FY2012 the Human Resources and Remuneration Committee employed KPMG as remuneration consultant to
the Board to review the amount and elements of the remuneration of the Managing Director and other executives
and provide recommendations in relation thereto.
In FY2013 and FY2014 no remuneration consultants were utilised.
u) Details of remuneration
Details of the remuneration of each director of Cedar Woods Properties Limited and each of the other key management
personnel of the consolidated entity are set out in the following tables. Cash bonuses are dependent upon the
satisfaction of performance conditions as set out in the section Short-term incentives and Long-term incentives above.
All other elements of remuneration in the tables are fixed.
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CEDAR WOODS PROPERTIES LIMITED
Directors of Cedar Woods Properties Limited
2014
Name
W G Hames
R S Brown
R Packer
S T Pearce*
P S Sadleir
Total
Short-term benefits
Post
employment
Long-term
benefit
Cash salary
and fees
$
Cash bonus
$
Non-monetary
benefits
$
Super-
Annuation
$
Cash bonus
$
135,469
104,348
82,270
9,312
772,270
1,103,669
-
-
-
-
-
-
-
-
427,500
427,500
7,268
7,268
12,531
9,652
33,730
861
23,730
80,504
-
-
-
-
-
-
* Mr Pearce was appointed on 16 May 2014.
2013
Name
W G Hames
R S Brown
R Packer
P S Sadleir
Total
Short-term benefits
Post
employment
Long-term
benefit
Cash salary
and fees
$
Cash bonus
$
Non-monetary
benefits
$
Super-
Annuation
$
Cash bonus
$
119,266
91,743
76,238
726,548
1,013,795
-
-
-
380,000
380,000
-
-
-
7,199
7,199
10,734
8,257
23,762
23,452
66,205
-
-
-
-
-
Other key management personnel
Short-term benefits
Post
employment
Long-term
benefit
Cash salary
and fees
$
Cash bonus
$
Non-monetary
benefits
$
Super-
Annuation
$
Cash bonus
$
2014
Name
N Blackburne
P Freedman
S Duplock
Total
2013
Name
N Blackburne
P Freedman
S Duplock
Total
362,225
320,000
305,000
987,225
100,000
12,754
57,000
42,000
1,236
1,732
199,000
15,722
17,775
25,000
25,000
67,775
40,000
23,750
-
63,750
1,333,472
Short-term benefits
Post
employment
Long-term
benefit
Cash salary
and fees
$
Cash bonus
$
Non-monetary
benefits
$
Super-
Annuation
$
Cash bonus
$
323,530
305,000
288,530
917,060
90,000
50,000
60,000
11,611
1,217
1,702
200,000
14,530
16,470
25,000
16,470
57,940
40,000
25,000
30,000
95,000
Total
$
481,611
406,217
396,702
1,284,530
Total
$
148,000
114,000
116,000
10,173
1,230,768
1,618,941
Total
$
130,000
100,000
100,000
1,137,199
1,467,199
Total
$
532,754
426,986
373,732
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The relative proportions of remuneration for the executives that are linked to performance and those that are fixed are as
follows:
Fixed
Remuneration
%
2014
At risk –
STI
%
At risk –
LTI
%
Fixed
Remuneration
%
65
73
81
89
35
19
13
11
0
8
6
0
66
73
82
77
2013
At risk –
STI
%
34
19
12
15
At risk –
LTI
%
0
8
6
8
Name
P Sadleir
N Blackburne
P Freedman
S Duplock
Terms of employment for the Managing Director and other executives
The terms of employment for Mr P Sadleir provide for an annual base salary inclusive of superannuation and the provision of
annual performance-related short-term bonuses. Benefits comprise payment of certain professional memberships, provision
of car parking and previously, when in operation, participation in the Cedar Woods’ Employee Share Scheme. In addition,
Mr Sadleir is entitled to payment of a benefit on termination by the employer following significant restructure or takeover,
equal to his total remuneration package for one year plus normal accrued entitlements.
The terms of employment for the other specified executives provide for an annual base salary inclusive of superannuation,
the provision of annual performance-related short-term and long-term cash bonuses, and the payment of certain
professional memberships. N Blackburne was also provided car parking in addition to his annual base salary.
Notice periods for the executives other than the Managing Director do not exceed 3 months, and no other termination
benefits apply other than statutory entitlements. Senior executives hold salaried positions with no fixed terms. Mr Duplock
ceased employment with the company on 14 August 2014 and received a payment of $82,754 being his notice period and
accrued entitlements.
The remuneration for directors and specified executives is set by the Human Resources and Remuneration Committee for
each financial year ending 30 June and is reviewed annually.
Bonuses vested and forfeited
For each cash bonus included in the above tables, the percentage of the available bonus or grant available to the specified
executives based on their individual performances and that of the group, that was vested in the financial year, and the
percentage that was forfeited because the service and performance criteria were not met in full, is set out below. The 2014
STI bonuses will be paid in FY2015 and the 2014 LTI bonuses will be paid in FY2017 if the service requirements are met.
Name
P S Sadleir
N Blackburne
P Freedman
S Duplock *
2014 STI and LTI
bonus vested
%
2014 STI and LTI
bonus forfeited
%
2013 STI and LTI
bonus vested
%
2013 STI and LTI
bonus forfeited
%
95
100
95
60
5
0
5
40
95
100
100
100
5
0
0
0
* Vesting percentages relate to STI only as S Duplock’s employment ceased 14 August 2014 and no LTI accrues.
The company does not have a policy for the clawback of performance-based remuneration of key management personnel
that would apply in the event of serious misconduct or a material misstatement in the group’s financial statements, however
it is monitoring developments in this governance area and intends to implement a policy going forward.
CEDAR WOODS PROPERTIES LIMITED
v) Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Long-term employee benefits
2014
$
2013
$
2,740,384
2,532,584
148,279
63,750
124,145
95,000
2,952,413
2,751,729
w) Equity instrument disclosures relating to key management personnel
The numbers of ordinary shares in the company held during the financial year by each director of Cedar Woods
Properties Limited and each of the other key management personnel, including their personally-related parties, are set
out below. There were no shares granted during the period as compensation.
2014
Name
Number of
shares at the
start of the year
Other changes
during the year
Number of
shares at the
end of the year
Directors of Cedar Woods Properties Limited
William G Hames†
Robert S Brown*
Ronald Packer
Stephen T Pearce
Paul S Sadleir
Timothy S Brown (alternate for R S Brown)
9,708,448
7,951,808
160,586
-
1,077,087
4,639,980
Other key management personnel of the consolidated entity
196,958
21,327
6,196
15,000
(27,558)
-
(42,626)
(118,753)
(5,576)
9,905,406
7,973,135
166,782
15,000
1,049,529
4,639,980
103,619
17
0
146,245
118,770
5,576
Number of
shares at the
start of the year
Other changes
during the year
Number of
shares at the
end of the year
Directors of Cedar Woods Properties Limited
William G Hames†
Robert S Brown*
Ronald Packer
Paul S Sadleir
Timothy S Brown (alternate for R S Brown)
9,419,838
8,822,431
151,746
1,059,790
5,027,176
Other key management personnel of the consolidated entity
Paul S Freedman
Nathan J Blackburne
Stuart A Duplock
145,855
118,539
5,269
288,610
(870,623)
8,840
17,297
(387,196)
390
231
307
9,708,448
7,951,808
160,586
1,077,087
4,639,980
146,245
118,770
5,576
† Includes 2,014,439 (2013 - 2,014,439) shares over which W G Hames has voting rights and a first right of refusal to
purchase.
* Interest of T R Brown relates to shares also shown under R S Brown.
The interests shown above comply with AASB124 Related Party Disclosures and differ to those shown at item l of the
directors’ report which comply with the requirements of sections 608 and 609 of the Corporations Act 2001. The table
above includes the shares held by related parties of the key management personnel.
Paul S Freedman
Nathan J Blackburne
Stuart A Duplock
2013
Name
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x) Other transactions with key management personnel
The consolidated entity uses a number of firms for architectural, urban design and planning services, creative design
services and settlement services. Where entities related to directors are able to fulfil the requisite criteria to provide the
services at competitive rates, they may be engaged by the company to perform the services. Should entities connected
with the directors be engaged, the directors declare their interests in those dealings and take no part in decisions
relating to them.
During the year planning, architectural and consulting services were provided by Hames Sharley Architects of which Mr
W G Hames is a principal. The transactions were performed on normal commercial terms and conditions and fees paid
were consistent with market rates.
During the year creative design services were provided by Axiom Design, an entity associated with the family of Mr W
G Hames. W G Hames has no beneficial interest in Axiom Design. The services were performed on normal commercial
terms and conditions.
Property settlement charges were paid to Westland Settlement Services Pty Ltd, a company associated with the family
of Mr R S Brown. The charges were based on normal commercial terms and conditions.
During the 2013 and 2014 year a donation was paid to a scholarship fund of Murdoch University, of which Mr P S
Sadleir is a Senate member, with no beneficial interest. The transaction was performed on normal commercial terms
and conditions.
Payments were made for sponsorship of the Warren Jones Foundation Inc. (in 2013 and 2014) and the Property
Education Foundation Inc. (in 2013 only), organisations for which Mr R Packer is a trustee with no beneficial interest.
The transactions were performed on normal commercial terms and conditions.
Aggregate amounts of each of the above types of other transactions with key management personnel of Cedar Woods
Properties Limited or their related entities:
Amounts recognised as expense
Creative design services
Settlement fees
Donations
Sponsorships
Amounts recognised as inventory
Architectural fees
Aggregate amounts of assets at balance date relating to the above types of
other transactions with directors of Cedar Woods Properties Limited or their
related entities:
Inventory
2014
$
34,178
66,835
2,500
7,650
2013
$
19,475
98,907
2,500
11,286
111,163
132,168
187,903
187,903
129,236
129,236
187,903
187,903
129,236
129,236
There are no aggregate amounts payable to directors of Cedar Woods Properties Limited, or their related entities, at
balance date relating to the above types of other transactions.
y) Voting and comments made at the company’s 2013 Annual General Meeting (AGM)
At the company’s 2013 AGM, 87.9 per cent of eligible votes cast were in favour of the remuneration report for the 2013
financial year. The company received no questions at the AGM in relation to its remuneration report.
CEDAR WOODS PROPERTIES LIMITED
z) Performance of Cedar Woods Properties Limited
In FY2014, the group delivered a record profit of $40.3 million, an increase of 10.9 per cent. This was the fourth
consecutive record profit for the company.
The returns to shareholders of Cedar Woods Properties Limited over the last 1, 3 and 5 years is reflected in the table
below:
Returns to shareholders over 1, 3 and 5 years (%)
1 year
3 years
5 years
Earnings per share growth
Share price growth
Dividend growth (paid dividend)
Total shareholder return (change in share price and dividends)
9.0
41.4
8.0
46.6
5.9
22.3
12.4
28.7
27.4
38.8
22.0
45.9
The total shareholder return in FY2014 was 46.6 per cent which compared favourably with the All Ordinaries total return
of 17.6 per cent over the same period. Management is focussed on delivering earnings per share and dividend growth.
The company share price is subject to market factors that are beyond the company’s control.
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Directors’ Report (continued)
aa) Retirement, election and continuation in office of directors
Mr Ron Packer retires by rotation at the forthcoming Annual General Meeting and being eligible, will offer himself for
re-election.
Mr Stephen T Pearce was appointed a director on 16 May 2014. In accordance with the constitution, Mr Pearce retires
as a director at the annual general meeting and, being eligible, offers himself for re-election.
bb) Insurance of officers
During the financial year, Cedar Woods Properties Limited paid a premium in respect of directors’ and officers’ liabilities
that indemnifies certain officers of the company and its controlled entities. The officers of the company covered by the
insurance policy include the directors, W G Hames, R S Brown, R Packer, S T Pearce, P S Sadleir and the Company
Secretary, P S Freedman. The liabilities insured include costs and expenses that may be incurred in defending civil
or criminal proceedings that may be brought against the officers in their capacity as officers of the company and its
controlled entities. The directors have not included more specific details of the nature of the liabilities covered or the
amount of the premium paid in respect of the policy, as such disclosure is prohibited under the terms of the contract.
cc) Non-audit services
The group may decide to employ the auditor on assignments additional to their statutory audit duties where the
auditor’s expertise and experience with the company and/or group are important.
Details of the amounts paid or payable to the auditor for audit and non-audit services provided during the year are set
out in note E2 in the other information section of this report.
The Board of directors has considered the position and, in accordance with the advice received from the Audit and Risk
Management 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 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 and Risk Management Committee to ensure they do not
impact the impartiality and objectivity of the auditor
• None of the services undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants.
dd) Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 forms
part of this directors’ report and is set out on page 37.
ee) Rounding of amounts
The company is of a kind referred to in Class Order 98/0100, issued by the Australian Securities and Investments
Commission, relating to the ‘rounding off’ of amounts in the directors’ report. Amounts in the directors’ report have been
rounded off in accordance with that class order to the nearest thousand dollars, or in certain cases, to the nearest dollar.
This report is made in accordance with a resolution of the directors.
P S Sadleir
Managing Director
19 August 2014
36
CEDAR WOODS PROPERTIES LIMITED
Auditor’s Independence Declaration
Auditor’s Independence Declaration
relation to the audit; and
As lead auditor for the audit of Cedar Woods Properties Limited for the year ended 30 June 2014, I
declare that to the best of my knowledge and belief, there have been:
Auditor’s Independence Declaration
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
As lead auditor for the audit of Cedar Woods Properties Limited for the year ended 30 June 2014, I
declare that to the best of my knowledge and belief, there have been:
b) no contraventions of any applicable code of professional conduct in relation to the audit.
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
This declaration is in respect of Cedar Woods Properties Limited and the entities it controlled during
the period.
b) no contraventions of any applicable code of professional conduct in relation to the audit.
relation to the audit; and
This declaration is in respect of Cedar Woods Properties Limited and the entities it controlled during
the period.
Douglas Craig
Partner
PricewaterhouseCoopers
Douglas Craig
Partner
PricewaterhouseCoopers
Perth
19 August 2014
Perth
19 August 2014
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
Liability limited by a scheme approved under Professional Standards Legislation.
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
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2014 ANNUAL REPORT
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Financial Statements
Consolidated Statement of Profit or Loss and Other Comprehensive Income .................................................................... 40
Consolidated Balance Sheet .............................................................................................................................................. 41
Consolidated Statement of Changes in Equity ................................................................................................................... 42
Consolidated Cash Flow Statement ................................................................................................................................... 43
These financial statements are consolidated financial statements for the group consisting of Cedar Woods Properties
Limited and its subsidiaries. A list of major subsidiaries is included in note C1(a).
The financial statements are presented in the Australian currency.
Cedar Woods Properties Limited is a company limited by shares, incorporated and domiciled in Australia.
Its registered office and principal place of business is:
Ground Floor,
50 Colin Street
WEST PERTH WA 6005.
The financial statements were authorised for issue by the directors on 19 August 2014. The directors have the power to
amend and reissue the financial statements.
39
Financial Statements2014 ANNUAL REPORT Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 30 June 2014
Revenue from operations
Sale of land and buildings
Services
Other revenue
Other Income
Expenses
Cost of sales of land and buildings
Cost of providing services
Other expenses from ordinary activities:
Project operating costs
Occupancy
Administration
Other
Finance costs
Share of net profit (loss) of joint ventures accounted for using
the equity method
Profit before income tax
Income tax expense
Note
A1(a)
Consolidated
2014
$’000
195,631
15,908
2,926
214,465
2013
$’000
161,816
6,364
4,571
172,751
A1(b)
166
1,034
(121,473)
(11,167)
(13,258)
(581)
(13,312)
359
(606)
973
55,566
(15,253)
(91,805)
(3,872)
(12,405)
(577)
(11,296)
(43)
(1,661)
(684)
51,442
(15,105)
A1(b)
C1(d)i
A1(c)
Profit for the year
A4(c) & A1(d)
40,313
36,337
Total comprehensive income for the year
40,313
36,337
Total comprehensive income attributable to members of
Cedar Woods Properties Limited
40,313
36,337
Earnings per share for profit attributable to the ordinary
equity holders of the company:
Basic and diluted earnings per share
A1(d)
54.4 cents
49.9 cents
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
40
Financial StatementsCEDAR WOODS PROPERTIES LIMITED
Consolidated Balance Sheet
As at 30 June 2014
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Deferred development costs
Total current assets
Non-current assets
Receivables
Inventories
Deferred development costs
Investments accounted for using the equity method
Available-for-sale financial assets
Property, plant and equipment
Investment properties
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Other financial liabilities
Derivative financial instruments
Current tax liabilities
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Other financial liabilities
Deferred tax liabilities
Provisions
Derivative financial instruments
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Retained profits
Total equity
Note
A2(a)
A2(b)
A3(a)
A3(b)
A2(b)
A3(a)
A3(b)
A2(d)
A2(c)
A3(c)
A3(d)
A2(e)
A2(h)
A2(f)
A3(f)
A2(g)
A2(h)
A3(e)
A3(f)
A2(f)
A4(a)
A4(b)
A4(c)
Consolidated
2014
$’000
2013
$’000
8,796
10,057
80,895
134
99,882
4,618
249,698
8,854
2,902
7,397
1,668
34,929
310,066
409,948
26,306
34,316
644
5,998
6,810
74,074
41,398
30,241
2,185
449
-
74,273
148,347
261,601
116,716
309
144,576
261,601
3,017
3,409
76,009
11,037
93,472
6,674
174,864
3,412
1,929
8,073
1,299
11,301
207,552
301,024
20,951
11,603
93
8,006
6,630
47,283
40,779
-
3,436
310
1,472
45,997
93,280
207,744
83,795
496
123,453
207,744
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
41
Financial Statements2014 ANNUAL REPORT
Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2014
Consolidated
Note
Contributed
equity
$’000
Reserves
$’000
Retained
profits
$’000
Total
$’000
Balance at 1 July 2012
79,325
597
104,704
184,626
Profit for the year
Total comprehensive income for the year
-
-
Transactions with owners in their
capacity as owners:
Contributions of equity, net of transaction
costs and tax
Transfers from reserves to retained profits
Dividends provided for or paid
B3(b)
A4(a)
4,470
-
-
-
(101)
36,337
36,337
36,337
36,337
-
101
4,470
-
-
(17,689)
(17,689)
Balance at 30 June 2013
4,470
83,795
(101)
496
(17,588)
(13,219)
123,453
207,744
Balance at 1 July 2013
83,795
496
123,453
207,744
Profit for the year
Total comprehensive income for the year
-
-
Transactions with owners in their
capacity as owners:
Contributions of equity, net of transaction
costs and tax
Transfers from reserves to retained profits
Dividends provided for or paid
B3(b)
A4(a)
32,921
-
-
-
(187)
40,313
40,313
40,313
40,313
-
187
32,921
-
-
(19,377)
(19,377)
-
-
-
-
32,921
(187)
(19,190)
13,544
Balance at 30 June 2014
116,716
309
144,576
261,601
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
42
Financial StatementsCEDAR WOODS PROPERTIES LIMITED
Consolidated Cash Flow Statement
For the Year Ended 30 June 2014
Cash flows from operating activities
Receipts from customers (incl. GST)
Payments to suppliers and employees (incl. GST)
Note
Consolidated
2014
$’000
231,610
(52,179)
2013
$’000
186,104
(43,483)
Payments for land and development
(158,149)
(135,209)
Interest received
Borrowing costs paid
Income taxes paid
589
(5,400)
(18,265)
578
(4,179)
(18,586)
Net cash outflows from operating activities
A5(a)
(1,794)
(14,775)
Cash flows from investing activities
Proceeds from sale of investment properties
Proceeds from sale of property, plant and equipment
-
3
1,205
5
Repayments of loan by Cedar Woods Wellard Limited
6,000 3,500
Advance of loan to BCM Apartment Trust
Payments for investment properties
Payments for property, plant and equipment
(1,855)
(9,781)
(699)
-
(10,265)
(388)
Net cash outflows from investing activities
(6,332)
(5,943)
Cash flows from financing activities
Proceeds from borrowings
Proceeds from share placement
Proceeds from share purchase plan
Payment of share issue expenses
600
25,030
5,036
(822)
36,572
-
-
-
Dividends paid
B3(b)
(15,939)
(13,203)
Net cash inflows from financing activities
13,905
23,369
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
5,779
3,017
2,651
366
Cash and cash equivalents at the end of the year
A2(a)
8,796
3,017
The above consolidated cash flow statement should be read in conjunction with the accompanying notes.
43
Financial Statements2014 ANNUAL REPORT
Notes to the Financial Statements
These are the consolidated financial statements of Cedar Woods Properties Limited and its subsidiaries. A list of major
subsidiaries is included in note C1.
The financial statements are presented in the Australian currency.
The notes are set out in the following main sections:
A How the numbers are calculated:
Provides a breakdown of those individual line items in the financial statements that the directors consider most relevant in
the context of the operations of the group, or where there have been significant changes that required specific explanations;
the section further explains what accounting policies have been applied to determine these line items and how the amounts
were affected by significant estimates and judgements made in calculating the final numbers.
B Financial risks:
Discusses the group’s exposure to various financial risks, explain how these affect the group’s financial position and
performance and what the group does to manage these risks.
C Group structure:
Explains significant aspects of the group structure and how changes have affected the financial position and performance of
the group.
D Unrecognised items:
Provides information about items that are not recognised in the financial statements, but could potentially have a significant
impact on the group’s financial position and performance.
E Other information:
Information that is not immediately related to individual line items in the financial statements, such as related party
transactions, share based payments and a full list of the accounting policies applied by the entity.
F Declaration and independent auditor’s report
Contains the director’s declaration and the independent auditor’s report.
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CEDAR WOODS PROPERTIES LIMITED
Section A:
How the Numbers are Calculated
This section provides a breakdown of those individual line items in the financial statements that the directors consider most
relevant in the context of the operations of the group, or where there have been significant changes that required specific
explanations, what accounting policies have been applied to determine these line items and how the amounts were affected
by significant estimates and judgements made in calculating the final numbers.
A1.
Profit or loss Information ................................................................................................................................... 46
a)
b)
c)
d)
Revenue .............................................................................................................................................................. 46
Other income and expense items ......................................................................................................................... 46
Income tax ........................................................................................................................................................... 48
Earnings per share ............................................................................................................................................... 48
A2.
Financial assets and financial liabilities ............................................................................................................ 49
a)
b)
c)
d)
e)
f)
g)
h)
Cash and cash equivalents .................................................................................................................................. 50
Trade and other receivables ................................................................................................................................. 50
Available-for-sale financial assets ......................................................................................................................... 51
Investments accounted for using the equity method ............................................................................................ 51
Trade and other payables ..................................................................................................................................... 51
Derivative financial instruments ............................................................................................................................ 52
Borrowings .......................................................................................................................................................... 52
Other financial liabilities ........................................................................................................................................ 53
A3.
Non-Financial assets and liabilities .................................................................................................................. 54
a)
b)
c)
d)
e)
f)
Inventories ........................................................................................................................................................... 54
Deferred development costs ................................................................................................................................ 55
Property, plant and equipment ............................................................................................................................. 55
Investment properties .......................................................................................................................................... 55
Deferred tax ......................................................................................................................................................... 57
Provisions ............................................................................................................................................................ 59
A4.
Equity ................................................................................................................................................................. 60
a)
b)
c)
Movement in ordinary share capital ...................................................................................................................... 60
Reserves .............................................................................................................................................................. 61
Retained profits .................................................................................................................................................... 61
A5.
Cash flow information ........................................................................................................................................ 62
a)
Reconciliation of profit after income tax to net cash outflows from operating activities .......................................... 62
45
A – How the Numbers are Calculated2014 ANNUAL REPORT
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A1. Profit or Loss Information
a) Revenue
From operations
Sales revenue
Sale of land and buildings
Services
Other revenue
Interest
Lease income
Total revenue
Note
i.
i.
Consolidated
2014
$’000
2013
$’000
195,631
15,908
211,539
1,631
1,295
2,926
161,816
6,364
168,180
4,235
336
4,571
214,465
172,751
i. Recognition of revenue from operations
See note E4(c) for the recognition and measurement of revenue
b) Other income and expense items
This note provides a breakdown of the items included in other income and certain expenses by nature.
Other income
Net gain on disposal of investment properties
Sundry income
Note
i.
i. Other income
See note E4(c) for the recognition and measurement of other income
Profit before income tax expense includes the following specific expenses:
Finance costs
Interest and finance charges
Calculated using effective interest method
Unrealised financial instrument gains
Less: amount capitalised
Finance costs expensed
Note
ii.
Consolidated
2014
$’000
-
166
166
Consolidated
2014
$’000
5,458
1,330
(920)
(5,262)
606
2013
$’000
382
652
1,034
2013
$’000
4,325
609
(600)
(2,673)
1,661
CEDAR WOODS PROPERTIES LIMITED
Net loss on disposal of property, plant and equipment
Rental expense relating to operating leases
Minimum lease payments
Other provisions
Employee benefits
Customer rebates
Superannuation funds – defined contribution
Depreciation of property, plant and equipment
Depreciation of investment property
Employee benefits expense
Write down of assets / (reversal of provision)
Available for sale financial assets
Inventory
Reversal of provision for impairment of loan to
Cedar Woods Wellard Limited
ii. Capitalised borrowing costs
Consolidated
2014
$’000
43
2013
$’000
79
664
740
255
2,450
704
282
314
306
2,713
583
246
-
9,697
8,268
676
-
(1,035)
-
43
-
Where qualifying assets have been financed by the entity’s corporate facility, the capitalisation rate used to
determine the amount of borrowing costs to be capitalised is the weighted average interest rate applicable to the
entity’s corporate facility during the year, in this case 6.09% (2013 – 7.18%) per annum. Where qualifying assets are
financed by specific facilities, the applicable borrowing costs of those facilities are capitalised.
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c)
Income tax
This note provides an analysis of the group’s income tax expense and how the tax expense is affected by non-
assessable and non-deductible items.
i.
Income tax expense
Current tax
Deferred tax
Adjustments for current tax of prior periods
Income tax expense attributable to profit
Notes
Deferred income tax expense (revenue) included in income
tax expense comprises:
(Increase) in deferred tax assets
(Decrease) increase in deferred tax liabilities
A3(e)
A3(e)
Consolidated
2014
$’000
17,421
(1,004)
(1,164)
15,253
(143)
(861)
(1,004)
2013
$’000
15,398
247
(540)
15,105
(241)
488
247
ii. Numerical reconciliation of income tax expense to prima facie tax payable
Profit before income tax
55,566
51,442
Tax at the Australian tax rate of 30% (2013 – 30%)
16,670
15,433
Tax effect of amounts which are not deductible in calculating
taxable income:
- Share of net (profit) loss of joint venture
- Sundry items
Adjustments for current tax of prior periods:
- Research and development
- Sundry items
Income tax expense
d) Earnings per share
Basic earnings per share (cents)
Diluted earnings per share (cents)
Net profit attributable to the ordinary owners of the
company ($’000)
Weighted average number of ordinary shares used as the
denominator in the calculation of earnings per share and
diluted earnings per share
(292)
39
(253)
(1,164)
-
(1,164)
205
7
212
(463)
(77)
(540)
15,253
15,105
2014
54.4
54.4
2013
49.9
49.9
40,313
36,337
74,150,376
72,813,872
CEDAR WOODS PROPERTIES LIMITED
A2. Financial Assets and Financial Liabilities
This note provides information about the group’s financial instruments, including:
i. Specific information about each type of financial instrument
ii. Accounting policies
iii.
Information about determining the fair value of the instruments, including judgements and estimation uncertainty
involved
The group holds the following financial instruments:
Financial Assets
2014
Cash and cash equivalents
Trade and other receivables*
Share in joint venture
Available-for-sale financial assets
Total
2013
Cash and cash equivalents
Trade and other receivables*
Share in joint venture
Available-for-sale financial assets
Total
*Excluding prepayments
Financial Liabilities
2014
Trade and other payables
Borrowings
Derivative financial instruments
Other financial liabilities
Total
2013
Trade and other payables
Borrowings
Derivative financial instruments
Other financial liabilities
Total
Notes
A2(a)
A2(b)
A2(d)
A2(c)
A2(a)
A2(b)
A2(d)
A2(c)
Investments
accounted
for using the
equity method
Financial
assets at
amortised cost
Available
for sale
$’000
$’000
-
-
-
7,397
7,397
-
-
-
8,073
8,073
-
-
2,902
-
2,902
-
-
1,929
-
1,929
$’000
8,796
12,425
-
-
21,221
3,017
8,622
-
-
Total
$’000
8,796
12,425
2,902
7,397
31,520
3,017
8,622
1,929
8,073
11,639
21,641
Notes
Derivatives used
for hedging
Liabilities at
amortised cost
A2(e)
A2(g)
A2(f)
A2(h)
A2(e)
A2(g)
A2(f)
A2(h)
$’000
-
-
644
-
644
-
-
1,565
-
1,565
$’000
26,306
41,398
-
64,557
132,261
20,951
40,779
-
11,603
73,333
Total
$’000
26,306
41,398
644
64,557
132,905
20,951
40,779
1,565
11,603
74,898
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a) Cash and cash equivalents
Cash at bank and in hand
Consolidated
2014
$’000
8,796
8,796
2013
$’000
3,017
3,017
The above figure reconciles to the amount of cash shown in the statement of cash flows at the end of the year.
Cash at bank includes cash held in day to day bank transaction accounts and deposit accounts earning interest from 0
to 2.8% (2013: 0 – 2.75%) per annum depending on the balances.
The Group’s exposure to interest rate risk is discussed in note B2. Financial risk management. The maximum exposure
to credit risk at the reporting date is the carrying amount of each class of cash and cash equivalents mentioned above.
b) Trade and other receivables
Current
Trade receivables
Other receivables
Prepayments
Non-Current
Loans – employee share scheme
Loan to BCM Apartment Trust
Loan to Cedar Woods Wellard Limited
Provision for impairment on loan to Cedar Woods Wellard
Limited
Notes
i & ii
i & ii
E3
iv
iii
Consolidated
2014
$’000
7,759
48
2,250
10,057
34
1,974
2,610
-
4,618
2013
$’000
1,470
478
1,461
3,409
40
-
7,669
(1,035)
6,674
i. Classification as trade and other receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of
business. Loans and other receivables are non-derivative financial assets with fixed or determinable payments and
are not quoted in an active market. If collection of the amounts is expected in one year or less they are classified as
current assets. If not, they are presented as non-current assets. Trade receivables are generally due for settlement
within 30 days and therefore are all classified as current. The group’s impairment and other accounting policies for
trade and other receivables are outlined in note E4(k).
ii. Current trade and other receivables
Current trade and other receivables include interest and non-interest bearing receivables (see B2. Financial risk
management). Trade receivables are initially recorded at fair value and subsequently carried at amortised cost.
There are no past due or impaired trade receivables at 30 June 2014 (2013 – $nil).
The fair values of non-current receivables of the group approximate the carrying values.
Other non-current receivables and loans under the employee share scheme are non-interest bearing. None of
these are impaired, or past due but not impaired.
iii. Loan to Cedar Woods Wellard Limited
A mezzanine loan facility has been provided to the joint venture entity, Cedar Woods Wellard Limited. The loan has
been assessed for impairment and a provision of $nil (2013: $1,035,000) recorded.
CEDAR WOODS PROPERTIES LIMITED
iv. Loan to BCM Apartment Trust
In February 2014, a mezzanine finance facility was provided by Cedar Woods Properties Limited to BCM Apartment
Trust. The interest rate on the facility is 22.5% per annum.
c) Available-for-sale financial assets
Unlisted securities
Special unit in unit trust
i. Unlisted securities
Consolidated
2014
$’000
2013
$’000
7,397
8,073
Refer to B2. Financial risk management for further information about the methods used and assumptions applied
in determining fair value of unlisted securities. For the purposes of the Batavia Coast Marina Apartments project
in Geraldton, WA the consolidated entity acquired 100 ordinary units for $1 each and 1 special unit (class B) for
$6,000,000 in the BCM Apartment Trust (BCM), on 30 March 2012. The ordinary units are disclosed as an interest in
joint venture in note A2(d) and the 1 special unit (class B) is disclosed as an available-for-sale financial asset above.
ii. Non-current assets pledged as security
Refer to note A2(g) for information on non-current assets pledged as security by the parent entity or its controlled
entities.
d) Investments accounted for using the equity method
Unlisted securities
Shares in joint ventures
i. Cedar Woods Wellard Limited
Consolidated
2014
$’000
2013
$’000
2,902
1,929
The consolidated entity owns a 32.5% (2013: 32.5%) interest in Cedar Woods Wellard Limited, a property
development company incorporated in Australia. See note C1(b).
ii. BCM Apartment Trust
The consolidated entity owns 100 ordinary units for $1 each (a 50% interest in the ordinary units) in the BCM
Apartment Trust. The consolidated entity’s interests in the ordinary units do not entitle it to a share of the revenue,
profit/loss and net assets of BCM. Refer to note A2(c) for details.
The consolidated entity also owns 10 ordinary shares for $1 each (a 50% interest) in Champion Bay Nominees Pty
Ltd, the trustee of BCM.
e) Trade and other payables
Trade payables
Accruals
GST payable
Other payables
Consolidated
2014
$’000
11,992
11,731
2,381
202
26,306
2013
$’000
9,145
11,353
449
4
20,951
Trade payables are unsecured and are usually paid within 30 days of recognition. The carrying amounts of trade and
other payables are assumed to be the same as their fair values due to their short-term nature.
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f) Derivative financial instruments
Current liabilities
Interest rate swap contracts
Non-current liabilities
Interest rate swap contracts
i.
Instruments used by the group
Consolidated
2014
$’000
644
-
644
2013
$’000
93
1,472
1,565
The group is party to derivative financial instruments in the normal course of business in order to manage exposure
to fluctuations in interest rates in accordance with the group’s financial risk management policies.
Interest rate swap contracts
The bank loan currently bears a variable interest rate of 4.44% per annum (2013 – 4.82% per annum). It is
the group’s policy to protect part of the loans from exposure to fluctuations in interest rates. Accordingly the
consolidated entity has entered into interest rate swap contracts under which a significant part of the consolidated
entity’s projected borrowings are protected for the period from 1 July 2014 to 2 June 2015.
The swaps effectively fix interest rates applicable to bank bills issued with a duration of 1 month (BBSY Bid) at
certain levels between 5.5% - 6.0% per annum (2013 - 4.06% - 6.0% per annum). Swaps currently in place cover
approximately 72% (2013 – 98%) of the variable loans outstanding at balance date, with terms expiring in 2015.
The group is not applying hedge accounting to these derivatives. The gain or loss from re-measuring the derivative
financial instruments at fair value is recognised in profit or loss.
g) Borrowings
Bank loans – secured
Facility fees capitalised (amortised over the period of facility)
Amortisation of facility fees
The fair value of non-current borrowings equals their carrying amount.
i. Security for borrowings
Consolidated
2014
$’000
41,687
(1,285)
996
41,398
2013
$’000
41,087
(1,125)
817
40,779
All of the consolidated entity’s assets are pledged as security for the group’s finance facilities.
Bank loans of $20,843,601 provided by ANZ Bank (2013 - $20,543,601) and $20,843,601 provided by
Commonwealth Bank trading as Bankwest (2013 - $20,543,601) are secured by first registered mortgages over
some of the consolidated entity’s land holdings, and first registered charges, guarantees and indemnities provided
by Cedar Woods Properties Limited and applicable subsidiary entities. Cedar Woods Properties Limited has
provided first registered charges over its assets and undertakings in relation to the corporate loan facility (see
below).
CEDAR WOODS PROPERTIES LIMITED
ii. Financing arrangements
Unrestricted access was available to the following lines of credit at balance date:
Bank facilities
Total facilities (loan and guarantees)
Used at balance date
Unused at balance date
Consolidated
2014
$’000
2013
$’000
135,000
54,307
80,693
110,000
52,498
57,502
The consolidated entity has total finance facilities of $135,000,000, with $67,500,000 each provided by ANZ Bank
and Commonwealth Bank trading as Bankwest. The facilities expire on 30 November 2016. The conditions of the
facilities impose certain covenants as to the consolidated entity’s revenue, interest cover and loan-to-valuation ratio.
The corporate facilities provide funding for the consolidated entity’s existing operations, ongoing development and
future acquisitions. The funding structure has been set up as a club facility with a security trustee, providing the
flexibility for other banks to enter, should the group’s requirements grow and more lenders are required.
The combined facilities include bank guarantee facilities of $15,000,000 (2013 - $14,000,000) subject to similar
terms and conditions, which were drawn to a total amount of $12,620,000 at 30 June 2014 (2013 - $11,411,000).
The interest on the corporate loan facilities is variable and at 30 June 2014 was an average rate of 4.44% per
annum (2013 – 4.82%).
Details of the group’s exposure to risk arising from current and non-current borrowings are set out in note B2.
Financial risk management.
h) Other financial liabilities
Current
Due to vendors of properties under contracts of sale
Non-Current
Due to vendors of properties under contract of sale
Consolidated
2014
$’000
34,316
34,316
30,241
30,241
2013
$’000
11,603
11,603
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A3. Non-Financial Assets and Liabilities
a)
Inventories
i. Current assets pledged as security
Current
Property held for resale
- land at cost
- at valuation 30 June 1992
- capitalised development costs
Consolidated
2014
$’000
2013
$’000
23,570
327
56,998
80,895
24,157
287
51,565
76,009
Refer to note A2(g) for information on current assets pledged as security by the parent entity or its controlled
entities.
ii. Non-current assets pledged as security
Non-Current
Property held for resale
- land at cost
- at valuation 30 June 1992
- capitalised development costs
- at net realisable value
Consolidated
2014
$’000
2013
$’000
200,370
122,699
226
44,069
5,033
552
46,643
4,970
249,698
174,864
The 1992 valuations were independent valuations which were based on current market values at that time.
Refer to note A2(g) for information on non-current assets pledged as security by the parent entity or its controlled
entities.
Total Inventory
Current inventory
Non-current inventory
Aggregate carrying amount
Notes
i
ii
Consolidated
2014
$’000
80,895
249,698
330,593
2013
$’000
76,009
174,864
250,873
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CEDAR WOODS PROPERTIES LIMITED
b) Deferred development costs
Current
Deferred development costs
Non-Current
Deferred development costs
c) Property, plant and equipment
Plant and Equipment at Cost
At start of the year
Additions
Assets disposed
At end of the year
Accumulated depreciation on Plant and Equipment
At start of the year
Charge for year
Assets disposed
At end of the year
Net book value
Consolidated
2014
$’000
134
134
8,854
8,854
Consolidated
2013
$’000
11,037
11,037
3,412
3,412
2013
$’000
2014
$’000
2,850
699
(63)
3,486
1,551
282
(15)
1,818
1,668
2,598
389
(137)
2,850
1,357
246
(52)
1,551
1,299
Non-current assets pledged as security
Refer to note A2(g) for information on non-current assets pledged as security by the parent entity or its controlled entities.
d) Investment properties
Non-current assets – at cost
Opening balance at the start of the year
Capitalised expenditure
Transfer from inventory
Depreciation
Closing balance at the end of the year
Represented by:
Property under construction
Completed investment property
Closing balance at the end of the year
Notes
i
Consolidated
2014
$’000
11,301
9,781
14,161
(314)
34,929
18,405
16,524
34,929
2013
$’000
-
10,265
1,036
-
11,301
11,301
-
11,301
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i.
Investments properties under construction
For investment properties that are under construction at 30 June 2014; depreciation has not yet commenced.
ii. Amounts recognised in profit or loss for investment properties
Rental income
Direct operating expenses from property that generated rental income
Direct operating expenses from property that did not generate rental
income
iii. Measuring investment property at fair value
Consolidated
2014
$’000
769
17
-
2013
$’000
-
-
-
Investment properties include both completed developments and property that was under construction at the year
end. Management considers the fair value of the investment property under construction at 30 June 2014 equates
to cost.
The fair value of the completed investment property is $28.2m exclusive of GST, based on a recent independent
valuation by CBRE Valuations Pty Ltd.
iv. Leasing arrangements
Investment properties are leased to tenants under long term leases. Minimum lease payments under non-cancellable
leases are receivable as follows:
Within one year
Later than one year but not later than 5 years
Later than 5 years
Consolidated
2014
$’000
2,171
9,356
44,501
56,028
2013
$’000
1,127
9,087
49,610
59,824
v. Non-current assets pledged as security
Refer to note A2(g) for information on non-current assets pledged as security by the parent entity or its controlled
entities.
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e) Deferred tax
i. Assets
The balance comprises temporary differences
attributable to:
Amounts recognised in profit or loss
Provision for customer rebates
Employee benefits
Borrowing Costs
Inventory
Change in value of derivative financial instruments
Provision for impairment on loan to joint venture
Other
Amounts recognised directly in equity
Share issue expenses
Total deferred tax assets
Set-off of deferred tax assets pursuant to set-off
provisions
Net deferred tax assets
Deferred tax assets at the start of the year
Increase in deferred tax assets (credited) to income
tax expense
Increase in deferred tax assets (credited) to equity
Deferred tax assets at the end of the year
A1(c)
A4(a)
Deferred tax assets expected to be recovered within
12 months
Deferred tax assets expected to be recovered after
more than 12 months
Notes
Consolidated
2014
$’000
2013
$’000
1,774
1,755
772
640
507
193
-
30
314
4,230
(4,230)
-
3,840
143
247
4,230
2,984
1,246
4,230
644
387
-
532
311
32
179
3,840
(3,840)
-
3,594
241
5
3,840
2,721
1,119
3,840
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ii. Liabilities
The balance comprises temporary differences
attributable to:
Amounts recognised in profit or loss
Deferred development costs
Borrowing costs
Research and development
Interest receivable
Prepaid commissions
Other
Amounts recognised directly in equity
Revaluation reserve
Total deferred tax liabilities
Set off of deferred tax assets pursuant to set-off
provisions
Net deferred tax liabilities
Deferred tax liabilities at the start of the year
(Decrease) increase in deferred tax liabilities (credited)
debited to income tax expense
A1(c)
Deferred tax liabilities at the end of the year
Deferred tax liabilities expected to be settled within
12 months
Deferred tax liabilities expected to be settled after more
than 12 months
Notes
Consolidated
2014
$’000
2013
$’000
2,694
2,606
469
361
115
33
3,209
2,933
-
564
328
30
6,278
7,064
137
6,415
(4,230)
2,185
7,276
(861)
6,415
1,509
4,906
6,415
212
7,276
(3,840)
3,436
6,788
488
7,276
4,295
2,981
7,276
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CEDAR WOODS PROPERTIES LIMITED
f) Provisions
Current
Employee benefits
Dividends
Customer rebates
i. Movements in Current Provisions
Carrying amount at start of year
Charged to profit or loss
Payments
Carrying amount at end of year
Consolidated
2014
$’000
893
3
5,914
6,810
2013
$’000
777
2
5,851
6,630
Consolidated
2014
$’000
5,851
2,450
(2,387)
5,914
2013
$’000
4,451
2,713
(1,313)
5,851
Customers are generally entitled to customer rebates within 12 months of balance date, however in some instances
claims and payments may not be made within 12 months of balance date.
Non-current
Employee benefits
Carrying amount at end of year
Consolidated
2014
$’000
893
449
2013
$’000
310
310
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A4. Equity
a) Movement in ordinary share capital
2014
Shares
2013
Shares
2014
$’000
2013
$’000
Start of the year
73,359,551 72,189,514
83,795
79,325
Shares issued pursuant to the dividend reinvestment plan:
Ordinary shares issued on 31 October 2012 at $3.88
Ordinary shares issued on 30 April 2013 at $5.14
Transaction costs arising on share issues
Ordinary shares issued on 31 October 2013 at $6.95
Ordinary shares issued on 30 April 2014 at $7.21
Transaction costs arising on share issues
Share issued pursuant to the bonus share plan:
Ordinary shares issued on 31 October 2012
Ordinary shares issued on 30 April 2013
Ordinary shares issued on 31 October 2013
Ordinary shares issued on 30 April 2014
Share issued pursuant to the capital raising:
Ordinary shares issued under institutional placement
on 13 May 2014
Shares issued under shareholder purchase plan on
18 June 2014
Transaction costs arising on share issues
-
-
-
324,751
162,834
-
-
-
48,381
19,327
3,680,941
740,586
-
794,591
271,917
-
-
-
-
63,688
39,841
-
-
-
-
-
-
-
-
2,257
1,174
(11)
-
-
-
-
25,030
5,036
(565)
3,083
1,398
(11)
-
-
-
-
-
-
-
-
-
-
End of the year
78,336,371 73,359,551
116,716
83,795
4,976,820
1,170,037
32,921
4,470
Holders of ordinary shares are entitled to participate in dividends and the proceeds on any winding up of the company
in proportion to the number of shares held. On a show of hands every holder of ordinary shares present at a meeting in
person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.
i. Dividend reinvestment plan
The company has established a dividend reinvestment plan under which holders of ordinary shares may elect to
have all or part of their dividend satisfied by the issue of new ordinary shares rather than being paid in cash. Shares
may be issued under the plan at a discount to the market price, at the discretion of the Directors.
ii. Bonus share plan
The company has established a bonus share plan under which holders of ordinary shares may elect not to receive
dividends but to receive instead additional fully paid shares issued as ‘Bonus Shares’ to the equivalent value of
the dividend foregone. The entitlement for shares issued under the plan is calculated based on the same pricing
mechanism as the dividend reinvestment plan, including any discount.
CEDAR WOODS PROPERTIES LIMITED
b) Reserves
The following table shows a breakdown of the balance sheet item ‘reserves’ and the movement in these reserves during
the year. A description of the nature and purpose of each reserve is provided below the table.
Composition
a) Asset revaluation reserve (pre 1992)
Movements
a) Asset revaluation reserve
Balance at the beginning of the year
Transfer to retained profits
Balance at the end of the year
Notes
A4(c)
Consolidated
2014
$’000
309
309
496
(187)
309
2013
$’000
496
496
597
(101)
496
The asset revaluation reserve was used until 1992 to record increments and decrements on the revaluation of non-
current assets. Refer to note E4(g).
c) Retained profits
Retained profits at the start of the year
Net profit attributable to members of Cedar Woods
Properties Limited
Transfers from reserves
Dividends provided for or paid
Retained profits at the end of the year
Notes
A4(b)
B3(b)
Consolidated
2014
$’000
2013
$’000
123,453
104,704
40,313
187
(19,377)
144,576
36,337
101
(17,689)
123,453
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A5. Cash Flow Information
a) Reconciliation of profit after income tax to net cash outflows from operating activities
Consolidated
Profit after income tax
Depreciation
Loss on sale of non-current assets
Gain on sale of investment properties
Reversal of provision for impairment of loan to Cedar Woods Wellard Limited
Fair value gain on derivative financial instrument
Accrued interest on receivables
Share of (profit) loss in equity accounted investment
Changes in operating assets and liabilities
Increase in provisions for employee benefits
Increase in provisions
Increase in inventories
Transfer from inventories to investment properties
Decrease (increase) in other deferred development costs
Decrease (increase) in available-for-sale financial assets
Increase in deferred tax assets
(Decrease) in current income tax payable
(Decrease) increase in deferred tax liability
Decrease in capitalised borrowing costs
Increase in debtors
Increase in creditors
Increase in other financial liabilities
Net cash outflows from operating activities
2014
$’000
40,313
596
43
-
(1,035)
(920)
(1,060)
(973)
255
64
(79,720)
(14,162)
5,461
676
(143)
(2,008)
(861)
19
(6,648)
5,355
52,954
(1,794)
2013
$’000
36,337
246
79
(382)
-
(600)
(1,675)
684
306
1,400
(42,577)
(1,036)
(6,946)
(1,883)
(241)
(3,728)
488
3
(631)
4,772
609
(14,775)
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Section B:
Financial Risks
This section of the notes discusses the group’s exposure to various risks and shows how these could affect the group’s
financial position and performance.
B1. Critical estimates and judgements ................................................................................................................ 64
a)
Significant estimates and judgements ................................................................................................................. 64
B2.
Financial risk management ............................................................................................................................. 65
a)
b)
c)
d)
Market risk ...........................................................................................................................................................65
Credit risk ............................................................................................................................................................67
Liquidity risk ........................................................................................................................................................ 67
Fair value measurement ...................................................................................................................................... 68
B3. Capital management objectives and gearing ............................................................................................... 70
a)
b)
Capital management objectives and gearing ....................................................................................................... 70
Dividends ............................................................................................................................................................ 71
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B1. Critical Estimates and Judgements
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the
actual results. Management also needs to exercise judgement in applying the group’s accounting policies.
This note provides an overview of the areas that involved a higher degree of judgement or complexity and of items which
are more likely to be materially adjusted due to estimates and judgements turning out to be wrong. Detailed information
about each of these estimates and judgements is presented below.
a) Significant estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that may have a financial impact on the entity. The judgements that have a significant risk
of causing a material adjustment to the carrying amounts or presentation of assets and liabilities within the next financial
year are discussed below.
i.
Inventory - classification
Judgement is exercised with respect to estimating the classification of inventory between current and non-current
assets. Inventory is classified as current only when sales are expected to result in realisation of cash within the next
twelve months, based on management’s sales forecasts.
ii.
Inventory - valuation
The recoverable amount of inventory is estimated based on an assessment of net realisable value including future
development costs. This requires judgement as to the future cash flows likely to be generated from the properties
included in inventory, including in some cases, judgement regarding the likelihood and timing of obtaining
development approvals. If the approvals are not received when anticipated the recoverable amount of inventory
may be substantially impaired. Refer also to note E4(g).
iii. Accrued interest income
Interest income is accrued on the 1 special unit (class B) in the BCM Apartment Trust, disclosed as an available for
sale financial asset. Judgement is required to determine the term over which a fixed amount of interest is earned
and thus the amount recognised in each financial year. The term of repayment is forecast based on estimated cash
flows of the project for which the financial asset relates.
There were no critical judgements other than those involving estimates referred to above, that management made
in applying the group’s accounting policies.
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B2. Financial Risk Management
This note explains the group’s exposure to financial risks and how these risks could affect the group’s future financial
performance. Current year profit and loss information has been included where relevant to add further context.
The group’s activities expose it to a variety of financial risks:
Risk
Exposure arising from
Measurement
Management
Market risk –
interest rate risk
Long term borrowings at
variable rates
Cash flow forecasting
Sensitivity analysis
Interest rate swaps
Credit risk
Cash and cash equivalents,
trade and other receivables,
available-for-sale financial
assets and derivative
financial instruments
Ageing analysis
Credit ratings
Ongoing checks by
management
Management of deposits
Contractual arrangements
Liquidity risk
Borrowings and other
liabilities
Forecast and actual cash
flows
Flexibility in funding
arrangements
Financial risk management is considered part of the overall risk management program overseen by the Audit and Risk
Management committee. Further detail on the types of risks to which the group is exposed and the way the group
manages these risks is set out below.
The group holds the following financial instruments:
Financial assets
Cash and cash equivalents
Trade and other receivables
Available-for-sale financial assets
Financial liabilities
Trade and other payables
Other financial liabilities
Borrowings
Derivative financial instruments
a) Market risk
i. Price risk
2014
$’000
8,796
14,675
7,397
30,868
26,306
64,557
41,398
644
132,905
2013
$’000
3,017
10,083
8,073
21,173
20,951
11,603
40,779
1,565
74,898
The consolidated entity has no foreign exchange exposure and minimal exposure to price risk on equity securities.
ii. Cash flow and fair value interest rate risk
As the consolidated entity does not have a significant portfolio of interest-bearing assets, the income and operating
cash inflows are not materially exposed to changes in market interest rates.
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The group has issued a loan to Cedar Woods Wellard Limited that bears an interest rate of 16% (2013 – 16%). The
group has also issued a loan to the BCM Apartment Trust that bears an interest rate of 22.5%. Loans issued at
fixed rates or at a fixed range of rates expose the group to fair value interest rate risk.
Interest rate risk arises from exposures to long term borrowings, where those borrowings are issued at variable
interest rates. Borrowings issued at variable interest rates expose the group to cash flow interest rate risk. The
consolidated entity reviews the potential impact of variable interest rate changes and considers various interest rate
management products in the context of prevailing monetary policy of the Reserve Bank and economic conditions.
Accordingly the consolidated entity has entered into interest rate swap contracts under which a significant part of
the consolidated entity’s projected borrowings are protected for the period from 1 July 2014 to 2 June 2015.
There is an indirect exposure to interest rate changes caused by the impact of these changes upon the property
market. The group addresses this risk by virtue of managing its pricing, product offer and planned development
programs.
iii. Instruments used by the group
Interest rate swap contracts effectively fix interest rates applicable to bank bills issued with a duration of 1 month
(BBSY Bid) at certain levels between 5.5% - 6.0% (2013 - 4.06% - 6.0%) per annum. Swaps currently in place
cover 72% (2013 - 98%) of the variable loan outstanding at balance date, with terms expiring in 2015.
The consolidated entity’s policy is to limit a significant proportion of its borrowings to a maximum fixed rate using
interest rate swaps or caps to achieve this when necessary. The swaps described above covered 72% of the bank
loan at balance sheet date because the balance of the loan was $41,687,000 (2013 - $41,087,000), being at the
lower end of the company’s available facilities.
The consolidated entity’s exposure to interest rate risk and the effective weighted average interest rate for
receivables and borrowings is set out below.
Receivables
Other receivables
Employee share loans
Loan to BCM Apartment Trust
Loan to joint venture
Interest
bearing
- variable
$’000
2014
Non-
interest
bearing
$’000
Interest
bearing
- variable
$’000
Total
$’000
2013
Non-
interest
bearing
$’000
Total
$’000
-
-
1,974
2,610
4,584
10,057
10,057
34
-
-
34
1,974
2,610
10,091
14,675
-
-
-
7,669
7,669
3,409
3,409
40
-
-
40
-
7,669
3,449
11,118
The weighted average interest rate is 18.8% (2013: 16%)
Interest
bearing -
fixed
$’000
2014
Interest
bearing -
variable
$’000
Interest
bearing -
fixed
$’000
Total
$’000
2013
Interest
bearing -
variable
$’000
Total
$’000
Interest bearing liabilities
Bank loans
-
41,687
41,687
-
41,087
41,087
Other financial liabilities
64,557
-
64,557
11,603
-
11,603
64,557
41,687
106,244
11,603
41,087
52,690
The weighted average interest rate is 4.44% (2013: 4.82%)
An analysis by maturity is provided in B2(c) below.
CEDAR WOODS PROPERTIES LIMITED
iv. Summarised interest rate sensitivity analysis
The potential impact of a change in bank interest rates of +/-1% is not significant to the group’s net profit and
equity.
The potential impact on financials assets is not significant. Refer to comments above for further information on the
impact of changes in interest rates upon the group.
b) Credit risk
The consolidated entity has minimal exposure to credit risk as title to lots or units in the consolidated entity’s
developments does not generally pass to customers until funds are received. In limited circumstances title is allowed
to pass on certain lot sales in return for a substantial deposit and security held by way of a registered mortgage on the
title. In other limited circumstances, title is allowed to pass unsecured where a credit rating by management has taken
place, and which has assessed the customer to be of high creditworthiness.
Policies and procedures are in place to manage credit risk including management of deposits and review of the
financial capacity of customers. Ongoing checks are performed by management to ensure that settlement terms
detailed in individual contracts are adhered to. For land under option the consolidated entity secures its rights by way of
encumbrances on the underlying land titles. The maximum exposure to credit risk at the reporting date is the carrying
amount of the financial assets as summarised above.
Derivative counterparties and cash deposits are placed with high credit quality financial institutions, such as major
trading banks.
Credit risk may arise in relation to bank guarantees given to certain parties. These guarantees are supported by
contractual arrangements that bind the counterparty, providing security against inappropriate presentation of the bank
guarantees.
For the purposes of the Batavia Coast Marina Apartments project in Geraldton, WA the consolidated entity acquired
100 ordinary units for $1 each and 1 special unit (class B) for $6,000,000 in BCM Apartment Trust (BCM) on 30 March
2012. The ordinary units are disclosed as an interest in joint venture in note A2(d) and the 1 special unit (class B) is
disclosed as an available-for-sale financial asset in note A2(c). Under the BCM trust deed the 1 special unit (class
B) entitles the consolidated entity to a fixed return upon the repurchase of the 1 special unit (class B) at cost. The
fixed return is preferential to any return being received by the other ordinary unit holder and the consolidated entity is
represented on the board of the trustee company. The maximum exposure to credit risk at the reporting date is the
carrying amount of the available-for-sale financial asset.
In relation to the loan to BCM Apartment Trust, the terms of the loan provide that the loan takes priority over payment
of any return to the special units (class B and class C) and entitlement to a second mortgage over land held by BCM
Apartment Trust.
In relation to the loan to Cedar Woods Wellard Limited as set out in note A2(b), the company has secured the loan
by way of a second mortgage over land held by Cedar Woods Wellard Limited and a second ranked charge over the
assets of Cedar Woods Wellard Limited. The mortgage and charge are subordinated to those held by Cedar Woods
Wellard Limited’s bankers, via a deed of priority and subordination in favour of Cedar Woods Wellard Limited’s bankers.
Management estimates the fair value of the mortgaged land at balance date to be $14,301,745 (2013 - $24,120,000)
and the balance of the first ranked bank loan is $4,468,000 (2013 - $5,320,000), leaving surplus security in excess of
the balance of the loan.
c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and available credit facilities to manage the
consolidated entity’s financial commitments. The group manages liquidity risk by continuously monitoring forecast and
actual cash flows and matching the maturity profiles of financial assets and liabilities. Due to the dynamic nature of the
underlying businesses, the group aims at maintaining flexibility in funding by keeping committed credit lines available.
At 30 June 2014 the group had undrawn committed facilities of $80,690,000 (2013 - $57,500,000) and cash of
$8,796,000 (2013 - $3,017,000) to cover short term funding requirements.
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i. Maturities of financial liabilities
The tables below analyse the group’s financial liabilities into relevant maturity groupings based on the remaining
period at the reporting date to the contractual maturity date. The amounts disclosed in the table for non-interest
bearing liabilities are the contractual undiscounted cash flows. For variable interest rate liabilities the cash flows
have been estimated using interest rates applicable at the reporting date.
Group – at 30 June 2014
Non-derivatives
Non-interest bearing
Fixed rate
Variable rate
Derivatives
Total
Group – at 30 June 2013
Non-derivatives
Non-interest bearing
Fixed rate
Variable rate
Derivatives
Total
Carrying
amount
$’000
26,306
64,557
41,687
644
Less than
1 year
$’000
Between 1
and 2 years
$’000
Between 2
and 5 years
$’000
Total
contractual
cash flows
$’000
26,306
35,042
-
644
61,992
-
-
-
-
-
-
39,000
47,213
-
26,306
74,042
47,213
644
86,213
148,205
133,194
Less than
1 year
$’000
Between 1
and 2 years
$’000
Between 2
and 5 years
$’000
Total
contractual
cash flows
$’000
Carrying
amount
$’000
20,951
12,060
-
999
34,010
-
-
-
600
600
-
-
47,065
-
47,065
20,951
12,060
47,065
1,598
81,674
20,951
12,060
41,087
1,565
75,663
d) Fair value measurement
This note provides information on the judgements and estimates made by the group in determining the fair values of the
financial instruments.
i. Fair value hierarchy
To provide an indication about the reliability of the inputs used in determining fair value, the group classifies its
financial instruments into three levels prescribed under the accounting standards. An explanation of each level
follows underneath the table.
The following table presents the group’s financial assets and financial liabilities measured and recognised at fair
value at 30 June 2014 and 30 June 2013:
As at 30 June 2014
Notes
Assets
Derivatives used for hedging
A2(f)
Available-for-sale financial
assets
A2(c)
Total assets
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
-
-
-
644
-
644
-
644
7,397
7,397
7,397
8,041
CEDAR WOODS PROPERTIES LIMITED
As at 30 June 2013
Notes
Assets
Derivatives used for hedging
A2(f)
Available-for-sale financial
assets
A2(c)
Total assets
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
-
-
-
1,565
-
1,565
-
1,565
8,073
8,073
8,073
9,638
ii. Valuation techniques used to determine fair values
Level 1 – The fair value of financial instruments traded in active markets (such as publicly traded derivatives) is
based on quoted (unadjusted) market prices at the end of the reporting period. The quoted market price used for
the financial assets held by the group is the current bid price. These instruments are included in level 1.
Level 2 – The fair value of financial instruments that are not traded in an active market (such as derivatives
provided by trading banks) is determined using market valuations provided by those banks at reporting date. These
instruments are included in level 2.
Level 3 – If one or more of the significant inputs is not based on observable market data, the instruments is
included in level 3. This is the case for unlisted equity securities (classified as available-for-sale financial assets in the
balance sheet). The unlisted equity securities provide a fixed return and the fair value of the securities is determined
based on management’s estimate of the period over which the return will be received and the performance of the
issuer entity.
iii. Fair value measurements using significant unobservable inputs (level 3)
The following table presents the changes in level 3 instruments for the year ended 30 June 2014:
Opening balance 30 June 2013
Decrease
Closing balance 30 June 2014
Available
For sale
$’000
8,073
(676)
7,397
Total
$’000
8,073
(676)
7,397
The reduction in fair value of the equity securities in the table above reflects the extended period over which the
return is now expected to be received.
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–
3
B
a) Capital management objectives and gearing
The consolidated entity’s objectives when managing capital are to safeguard its ability to continue as a going concern,
so that it can continue to provide returns for shareholders and benefits for other stakeholders and to maintain an
optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the group will consider a range of alternatives which may include:
•
raising or reducing borrowings
• adjusting the dividend policy
•
•
•
issue of new securities
return of capital to shareholders
sale of assets.
Gearing is a measure used to monitor the levels of debt used in the business to fund operations. The gearing ratio is
calculated as interest bearing bank debt net of cash and cash equivalents divided by shareholders’ equity. Gearing is
managed by reference to a guideline which sets the desirable upper and lower limits for the gearing ratio. The group’s
gearing is then addressed by utilising capital management initiatives as discussed above.
The gearing ratios were as follows:
Total interest bearing bank debt
Less: cash and cash equivalents
Net debt
Shareholders’ equity
Gearing ratio
Note
A2(g)
A2(a)
2014
$’000
41,687
(8,796)
32,891
2013
$’000
41,087
(3,017)
38,070
261,601
12.6%
207,744
18.3%
The group’s guideline is to target gearing generally within the range of 20-75% although periods where the gearing is
outside of this range are acceptable, depending upon the timetable for acquisition payments and the construction and
settlement of developments.
i.
Loan Covenants
Under the terms of the major borrowing facilities, the group has complied with covenants throughout the reporting
period. Key covenants include requirements in relation to a maximum loan to valuation ratio and a minimum interest
cover ratio.
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b) Dividends
i. Ordinary shares
Fully franked based on tax paid at 30%
Final dividend for the year ended 30 June 2013 of 15.0 cents
(2012 – 14.0 cents) per fully paid share
- Paid in cash
- Satisfied by shares under the dividend reinvestment plan
- Applied to the employee share loans
Interim dividend for the year ended 30 June 2014 of 12.0 cents
(2013 – 11.0 cents) per fully paid share
- Paid in cash
- Satisfied by shares under the dividend reinvestment plan
- Applied to the employee share loans
Total
ii. Dividends not recognised at the year end
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2014
$’000
2013
$’000
–
3
B
8,407
2,258
3
7,532
1,174
3
19,377
6,773
3,083
3
6,430
1,398
2
17,689
In addition to the above dividends, since year end the directors have recommended the payment of a final dividend
of 15.5 cents per fully paid ordinary share (2013 – 15 cents), fully franked based on the tax paid at 30%. The
aggregate amount of the proposed dividend expected to be paid on 31 October 2014 out of retained profits at 30
June 2014, but not recognised as a liability at year end is below:
Dividends not recognised at year end
iii. Franked Dividends
Consolidated
2014
$’000
12,142
2013
$’000
11,004
The franked portions of the final dividend proposed at 30 June 2014 will be franked from existing franking credits or
from franking credits arising from the payment of income tax in the next financial year.
Franking credits available for the subsequent financial year
on a tax-paid basis of 30% (2013 – 30%)
Consolidated
2014
$’000
2013
$’000
57,458
50,979
The above amounts represent the franking accounts at the end of the financial year, adjusted for:
(a) Franking credits that will arise from the payment of the current tax liability;
(b) Franking debits that will arise from the payment of dividends recognised as a liability at the reporting date;
(c) Franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date.
The impact on the franking account of the dividend recommended by the directors since year end, but not
recognised as a liability at year end, will be a reduction in the franking account of $5,204,000 (2013 - $4,716,000).
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Section C:
Group Structure
This section provides information which will help users understand how the group structure affects the financial position and
performance of the group as a whole.
C1.
Interests in Other Entities ............................................................................................................................... 73
a)
b)
c)
d)
Subsidiaries ........................................................................................................................................................ 73
Interests in joint ventures ..................................................................................................................................... 74
Commitments and contingent liabilities in respect of the joint ventures ................................................................ 74
Summarised financial information for Cedar Woods Wellard Limited .................................................................... 75
72
C – Group StructureCEDAR WOODS PROPERTIES LIMITED C1. Interests in Other Entities
a) Subsidiaries
The group’s subsidiaries at 30 June 2014 are set out below. Unless otherwise stated, they have share capital consisting
solely of ordinary shares that are held directly by the group and the proportion of ownership interest held equals the
voting rights held by the group. The subsidiaries are incorporated or established in Australia.
The consolidated financial statements incorporate the assets, liabilities and results in accordance with the accounting
policy described in note E4(b).
Company
Equity Holding
Cranford Pty Ltd
Daleford Property Pty Ltd
Dunland Property Pty Ltd
Esplanade (Mandurah) Pty Ltd
Eucalypt Property Pty Ltd
Flametree Property Pty Ltd
Gaythorne Pty Ltd
Galaway Holdings Pty Ltd
Geographe Property Pty Ltd
Huntsman Property Pty Ltd
Jarrah Property Pty Ltd
Kayea Property Pty Ltd
Lonnegal Property Pty Ltd
Osprey Property Pty Ltd
Silhouette Property Pty Ltd
Terra Property Pty Ltd
Upside Property Pty Ltd
Vintage Property Pty Ltd
Woodbrooke Property Pty Ltd
Yonder Property Pty Ltd
Zamia Property Pty Ltd
Cedar Woods Properties Harrisdale Pty Ltd
Cedar Woods Properties Investments Pty Ltd
Cedar Woods Properties Management Pty Ltd
Cedar Woods Property Sales Pty Ltd
Williams Landing Town Centre Pty Ltd
Williams Landing Home Improvement Pty Ltd
Williams Landing Home Improvement Trust
Williams Landing Shopping Centre Pty Ltd
Williams Landing Shopping Centre Trust
2014
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%
2013
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%
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b) Interests in joint ventures
Set out below are the joint ventures of the group as at 30 June 2014. The country of incorporation and principal place
of business is Australia for both entities.
Name of entity
% of ownership
interest
Nature of
relationship
Measurement
method
2014
%
2013
%
Carine Joint Venture
50
50
Joint Operation
Share of assets,
liabilities, income
and expenses
Carrying amount
2014
$’000
2013
$’000
1,554
4,110
Cedar Woods Wellard Limited
32.5
32.5
Joint Venture
Equity method
2,902
1,929
The carrying amount represents the amount attributable to the group.
Carine Joint Venture (CJV) is a joint venture with an aged care and retirement living provider, to develop a mixed use
precinct including an aged care facility, retirement living and residential housing development on State land in Carine,
Western Australia. The subsidiary has a 50% participating interest in the CJV and is entitled to 50% of its revenue
and assets. The consolidated entities interest in the assets employed in the CJV are included in the balance sheet in
accordance with the accounting policy described in note E4(b).
Cedar Woods Wellard Limited is developing the Emerald Park residential estate at Wellard, WA.
The consolidated entity owns 100 ordinary units for $1 each (a 50% interest in the ordinary units) in the BCM Apartment
Trust, which owns the Batavia Coast Marina Apartments project in Geraldton. The consolidated entity’s interest in the
ordinary units does not entitle it to a share of the revenue, profit/loss or net assets of BCM. Refer to note A2(c) for
details.
The consolidated entity also owns 10 ordinary shares for $1 each (a 50% interest) in Champion Bay Nominees Pty Ltd,
the trustee of BCM.
c) Commitments and contingent liabilities in respect of the joint ventures
Carine Joint Venture has no commitments for expenditure or contingent liabilities at 30 June 2014 (2013: nil).
Cedar Woods Wellard Limited has no commitment for expenditure at 30 June 2014 (2013: nil) and provided $102,766
(2013: $66,919) bank guarantees to various local authorities supporting development and maintenance commitments.
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d) Summarised financial information for Cedar Woods Wellard Limited
The following table provides summarised financial information for those joint ventures that are material to the group. The
information disclosed reflects the amounts presented in the financial statements of the relevant joint ventures and not
Cedar Woods Properties Limited’s share of those amounts.
Cedar Woods Wellard Limited
Current assets
Cash
Other current assets
Total current assets
Total non-current assets
Total assets
Total current liabilities
Non-current liabilities
Total liabilities
Net assets
Group’s share in %
Group’s share in $
i. Movements in carrying amounts – Cedar Woods Wellard Limited
At start of the year
Share of profit / (losses) after income tax
At end of the year
Share of profit / (loss) before income tax
Income tax benefit / (expense)
Share of profit / (loss) after income tax
Share of joint venture’s revenue, assets, liabilities and contingent
liabilities
Revenue
Assets
Liabilities
Contingent liabilities (bank guarantees)
2014
$’000
3,316
6,093
9,409
10,351
19,760
1,871
6,975
8,846
10,914
32.5%
3,547
2014
$’000
1,929
973
2,902
369
604
973
6,080
6,422
(2,875)
(33)
2013
$’000
961
11,812
12,773
11,153
23,926
16,007
-
16,007
7,919
32.5%
2,574
2013
$’000
2,613
(684)
1,929
(327)
(357)
(684)
7,303
7,776
(5,202)
(22)
The consolidated entity owns a 32.5% (2013 – 32.5%) interest in Cedar Woods Wellard Limited, a property
development company incorporated in Australia.
The directors have determined that they do not control Cedar Woods Wellard Limited as no one investor can direct
the activities without the co-operation of the others.
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Section D:
Unrecognised Items
This section of the notes provides information about items that are not recognised in the financial statements as they do not
satisfy the recognition criteria.
D1.
Contingent liabilities ...................................................................................................................................... 77
D2.
Commitments ................................................................................................................................................. 78
76
D – Unrecognised ItemsCEDAR WOODS PROPERTIES LIMITED D1. Contingent Liabilities
At 30 June 2014 the group had contingent liabilities in respect of:
a) Bank Guarantees
At 30 June 2014 bank guarantees totalling $12,620,000 (2013 - $11,411,000) had been provided to various state and
local authorities supporting development and maintenance commitments.
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D2. Commitments
a) Non-cancellable operating leases
Commitments for minimum lease payments in relation to non-cancellable operating leases contracted for at the
reporting date but not recognised as liabilities are payable as follows:
Within 1 year
Later than 1 year but not later than 5 years
Consolidated
2014
$’000
692
1,151
1,843
2013
$’000
842
1,878
2,720
The group leases various offices under non-cancellable operating leases expiring within 5 years. The leases have
varying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are renegotiated.
At 30 June 2014 the consolidated entity had commitments under civil works, building construction and landscaping
construction for development of its projects in the ordinary course of business. The total amount contracted for work
yet to be completed for civil works was $12,079,000 (2013 - $19,461,000), for building construction was $26,810,000
(2013 - $20,808,000) and for landscaping construction was $3,069,000 (2013 - $3,537,000). This work will be
substantially completed in the next 12 months.
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Section E:
Other Information
Section E contains information that is not immediately related to individual line items in the financial statements, such as
related party transactions, share based payments and a full list of the accounting policies applied by the entity.
E1.
Related party transactions ............................................................................................................................ 80
E2.
Remuneration of auditors .............................................................................................................................. 81
E3.
Employee share scheme ................................................................................................................................ 82
E4.
Summary of accounting policies ................................................................................................................... 83
E5.
Segment information ...................................................................................................................................... 91
E6.
Parent entity financial information ................................................................................................................ 92
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E1. Related Party Transactions
a) Key management personnel compensation
Additional disclosures relating to key management personnel are set out in the Directors’ Report.
Short-term employee benefits
Post-employment benefits
Long-term employee benefits
b) Group
Consolidated
2014
$
2013
$
2,740,384
2,532,584
148,279
63,750
124,145
95,000
2,952,413
2,751,729
The group consists of Cedar Woods Properties Limited and its controlled entities. A list of these entities and the
ownership interests held by the parent entity are set out in note C1.
c) Parent entity
The parent entity within the group is Cedar Woods Properties Limited.
d) Transactions with other related parties
Cedar Woods Properties Management Pty Ltd and Cedar Woods Property Sales derived management and selling fees
totalling $1,749,173 (2013 - $2,101,285) from Cedar Woods Wellard Limited.
e) Terms and conditions
Management and selling fees are derived according to management agreements in place between the parties. These
are based on normal terms and conditions, at market rates at the time of entering into the agreements.
f) Guarantees
Cedar Woods Properties Limited has provided a performance guarantee in respect of the bank facility provided to Cedar
Woods Wellard Limited (CWWL), a joint venture entity owned 32.5% (2013 – 32.5%) by the group. The guarantee has been
given in relation to performance undertakings given by CWWL. No amount (2013 – nil) was advanced in relation to this
guarantee during the year as part of an interest bearing loan to CWWL, with interest charged at 16% (2013 – 16%-17%).
g) Outstanding balances arising from sales/purchases of goods and services
The following balances are outstanding at the end of the reporting period in relation to transactions with related parties:
Current receivables (sales of goods and services)
Cedar Woods Wellard Limited
h) Loans to related parties
Loan to Cedar Woods Wellard Limited
Beginning of the year
Loan repayments received
Interest charged
End of year
2014
$
2,060
2,060
2014
$
2013
$
1,425
1,425
2013
$
7,668,823
9,493,741
(6,000,000)
(3,500,000)
941,331
2,610,154
1,675,082
7,668,823
CEDAR WOODS PROPERTIES LIMITED
E2. Remuneration of Auditors
During the year the following fees were paid or payable to the auditor of the parent entity:
PricewaterhouseCoopers – Australian firm
Assurance services
2014
$
2013
$
- Audit and review of the financial statements of the parent entity, controlled
entities and co-development projects
176,929
172,383
Non-audit services
- Accounting advisory services
- Research and development advice
- Other taxation advice and reviews
Total fees for non-audit services
-
259,209
63,900
323,109
500,038
8,000
66,257
22,600
96,857
269,240
The statutory audit requirements for the group vary from year to year and can have an impact on the level of audit fees.
The consolidated entity may decide to engage the auditor on assignments additional to their statutory audit duties where
the auditor’s expertise and experience with the consolidated entity is important. These assignments relate to accounting
advice, tax advice and reviews, research and development advice and other advice. All non-audit services are reviewed and
approved by the Audit and Risk Management Committee to ensure they do not adversely impact the independence and
objectivity of the auditor.
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E3. Employee Share Scheme
The employee share plan has been discontinued. Under the plan, certain employees were granted shares funded by interest
free loans from the company and repaid by dividends. At 30 June 2014, $34,000 (2013 - $40,000) remained outstanding
from employees in relation to loans granted in financial years prior to 2010. No amounts were due from former employees.
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E4. Summary of Accounting Policies
The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements
are for the consolidated entity consisting of Cedar Woods Properties Limited and its subsidiaries.
a) Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards
and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001. Cedar
Woods Properties Limited is a for-profit entity for the purpose of preparing the financial statements.
i. Compliance with International Financial Reporting Standards (IFRS).
The financial statements of the Cedar Woods Properties Limited group also comply with IFRS as issued by the
International Accounting Standards Board (IASB).
ii. Historical cost convention
These financial statements have been prepared under the historical cost convention, as modified by the revaluation
of available-for-sale financial assets and derivative financial instruments.
iii. Critical accounting estimates
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the group’s accounting policies. The areas
involving a higher degree of judgement or complexity, or where assumptions and estimates are significant to the
financial statements, are disclosed in B1.
iv. Functional and presentation currency
The consolidated financial statements are presented in Australian dollars, which is the functional and presentation
currency of Cedar Woods Properties Limited.
b) Principles of consolidation
i. Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all entities controlled by Cedar
Woods Properties Limited (parent) as at 30 June 2014 and the results of all subsidiaries for the year then ended.
Cedar Woods Properties Limited and its subsidiaries together are referred to in these financial statements as the
consolidated entity or the group.
Subsidiaries are those entities over which the parent has the power to govern the financial and operating policies,
generally accompanying a shareholding of one-half or more of the voting rights.
The acquisition method of accounting is used to account for business combinations by the group. Subsidiaries are
fully consolidated from the date on which control is transferred to the parent. They are de-consolidated from the
date that control ceases.
All inter-company balances and transactions between companies within the consolidated entity are eliminated upon
consolidation.
ii. Joint arrangements
Joint arrangements – Under AASB 11 Joint Arrangements, investments in joint arrangements are classified as
either joint operations or joint ventures. The classification depends on the contractual rights and obligations of each
investor, rather than the legal structure of the joint arrangement. The consolidated entity has both joint operations
and joint ventures.
Joint operations – The consolidated entity recognises its direct right to assets, liabilities, revenues and expenses of
joint operations, which have been incorporated in the financial statements under the appropriate headings.
Joint ventures – Interest in joint ventures are accounted for using the equity method (see below), after initially being
recognised at cost in the consolidated balance sheet. Details of the joint ventures are set out in note C1(b).
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iii. Equity method
Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to
recognise the group’s share of the post-acquisition profits or losses of the investee in profit or loss, and the group’s
share of movements in other comprehensive income.
c) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and is recognised net of discounts and
taxes paid. The following specific recognition criteria must also be met before revenue is recognised:
i. Sale of land and buildings
Revenue arising from the sale of land and buildings held for resale is recognised at settlement.
ii.
Interest
Interest income is recognised on a time proportion basis using the effective interest method. When a receivable is
impaired, the group reduces the carrying amount to its recoverable amount, being the estimated future cash flow
discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest
income. Interest income on impaired loans is recognised using the original effective interest rate.
iii. Dividends
Dividends are recognised as revenue when the right to receive payment is established.
iv. Lease income
Income from operating leases is recognised on a straight line basis over the period of each lease.
v. Commissions and fees
Commission and fee income is recognised when the right to receive the income has been earned in accordance
with contractual arrangements.
d) Income tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based
on the income tax rate in Australia adjusted by changes in deferred tax assets and liabilities attributable to temporary
differences and to unused tax losses, if any.
The current income tax charge is calculated on the basis of the tax laws enacted or substantially enacted at the end of
the reporting period.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax
is determined using the tax rates expected to apply when the assets are recovered or liabilities are settled, based on
those tax rates which are enacted or substantively enacted.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority.
Cedar Woods Properties 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.
Current and deferred tax is recognised in profit and loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity respectively.
CEDAR WOODS PROPERTIES LIMITED
e) Earnings per share
i. Basic earnings per share
Basic earnings per share is determined by dividing the profit attributable to owners of Cedar Woods Properties
Limited by the weighted average number of ordinary shares outstanding during the financial year, adjusted for any
bonus elements in ordinary shares issued during the year.
ii. Diluted earnings per share
Diluted earnings per share adjusts the earnings used in the determination of basic earnings per share to take
account of any effect on borrowing costs associated with the issue of dilutive potential ordinary shares. The
weighted average number of ordinary shares is adjusted to reflect the conversion of all dilutive potential ordinary
shares.
f) Cash and cash equivalents
For cash flow statement presentation purposes, cash and cash equivalents includes cash on hand, and deposits at
call which are readily convertible to cash on hand and are subject to an insignificant risk of changes in value. Bank
overdrafts are shown within borrowings in current liabilities on the balance sheet.
g) Inventories and options over land
i. Property held for development and resale
Since 1 July 1992, property purchased for development and sale is valued at the lower of cost and net realisable
value. Cost includes acquisition and subsequent development costs, and applicable borrowing costs incurred
during development. Net realisable value is the estimated selling price in the ordinary course of business less
the estimated costs of completion and the estimated costs necessary to make the sale. All property held for
development and sale is regarded as inventory and is classified as such in the balance sheet. Property is
classified as current inventory only when sales are expected to result in realisation of cash within the next twelve
months, based on management’s sales forecasts. Borrowing costs incurred prior to active development and after
development is completed, are expensed as incurred.
Prior to 1 July 1992 the consolidated entity’s land assets were classified on acquisition as non-current investments
and initially recorded at cost with regular independent valuations being undertaken. Increments or decrements
were reflected in the balance sheet and also recognised in equity. The balance of this land is stated at 1992
valuation, which is its deemed cost. The amount remaining in the Asset Revaluation Reserve represents the balance
of the net revaluation increment for land revalued prior to 1 July 1992 which is now classified as inventory and
which is still held by the consolidated entity. When revalued assets are sold, it is policy to transfer any amounts
included in reserves in respect of those assets to retained earnings.
The acquisition of land is recognised when an unconditional purchase contract exists.
When property is sold, the cost of the land and attributable development costs, including borrowing costs, is
expensed through cost of sales.
h) Deferred development costs
Development costs incurred by the group for the development of land not held as an asset by the group are recorded
as deferred development costs in the balance sheet. They are included in current assets, except for those which are
not expected to be reimbursed within 12 months of the reporting period, which are classified as non-current assets. In
instances when the deferred development costs are reimbursed by the land owner, they are expensed in the profit or
loss.
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i) Assets classified as held for sale
Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale
transaction rather than through continuing use and a sale is considered highly probable. They are measured at the
lower of carrying amount and fair value, less costs to sell.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal) to fair value less
costs to sell. A gain is recognised for any subsequent increase in fair value less costs to sell of an asset (or disposal),
but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by
the date of the sale of the non-current asset (or disposal) is recognised at the date of derecognition.
Non-current assets are not depreciated or amortised while they are classified as held for sale. Non-current assets
classified as held for sale are presented separately from the other assets in the balance sheet.
j) Business combinations
The acquisition method of accounting is used to account for all business combinations. Cost is measured as the fair
value of the assets given, or liabilities undertaken at the date of acquisition. Acquisition related costs are expensed as
incurred.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to
their present values at the date of acquisition. The discount rate used is the incremental borrowing rate applied by the
consolidated entity’s financiers for a similar borrowing under comparable terms and conditions.
k)
Impairment of assets
Assets 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’s carrying amount exceeds
its recoverable amount. The recoverable amount of an asset is the higher of its fair value less costs to sell and value in
use. For the purposes of assessing impairment, assets are grouped at the lowest level for which there are separately
identifiable cash generating units, which is generally the project level. Assets that suffered an impairment are reviewed
for possible reversal of the impairment at the end of each reporting period.
l) Property, plant and equipment
Property, plant and equipment is stated at historical cost less depreciation. Depreciation is calculated on a straight
line or diminishing value basis to write off the net cost of each item of property, plant and equipment, including leased
equipment, over its expected useful life to the consolidated entity. The expected useful lives of items of property, plant
and equipment and the depreciation methods used are:
• Buildings – 17 years (straight line method)
• Plant and equipment – 3 to 15 years (straight line and diminishing value methods)
The assets’ residual values and useful lives are reviewed for impairment and adjusted if appropriate, at each reporting
date.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the
profit or loss.
m) Investments and other financial assets
The group classifies its financial assets in the following categories: financial assets at fair value through profit or loss,
loans and receivables and available for sale financial assets. The classification depends on the purpose for which
investments were acquired. Management determines the classification of its investments at initial recognition.
i. Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified
in this category if acquired principally for the purpose of selling in the short term. Derivatives are classified as held
for trading unless they are designed as hedges. Assets in this category are classified as current assets if they are
expected to be settled within 12 months, otherwise they are classified as non-current.
CEDAR WOODS PROPERTIES LIMITED
ii. Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market. They are included in non-current assets, except for those with maturities less than 12 months
after the reporting period which are classified as current assets. Loans and receivables are included in receivables in
the balance sheet. Loans and receivables are carried at amortised cost using the effective interest method.
iii. Available-for sale financial assets
Available-for-sale financial assets, comprising marketable equity securities and other securities, are non-derivatives
that are either designated in this category or not classified in any of the other categories. They are included in non-
current assets as management does not intend to sell them within 12 months. Available-for-sale financial assets
are carried at fair value. Changes in the fair value not arising from impairment or interest are recognised in other
comprehensive income.
The group assesses at the end of each reporting period whether there is objective evidence that a financial asset
is impaired. If there is evidence of impairment, the loss is measured as the difference between the asset’s carrying
amount and the present value of estimated future cash flows, excluding future credit losses that have not been
incurred. In the case of loans and receivables, the cash flows are discounted at the financial asset’s original effective
interest rate. The loss is recognised in profit or loss.
n)
Investment property
Investment property, principally comprising retail property, is held for long term rental yields and is not occupied by the
consolidated entity. Investment property includes properties under construction for future use as investment property
and is stated at historical cost less depreciation. Depreciation is calculated on a straight line basis to write off the net
cost of each investment over its expected useful life to the consolidated entity. The expected useful life of investment
property is 40 years.
When the company elects to dispose of investment property, it is presented as assets classified as held for sale in the
balance sheet where it meets the relevant criteria.
o) Employee benefits
i. Short term obligations
Liabilities for wages and salaries, bonuses and annual leave expected to be settled within 12 months of the
reporting date are recognised in other payables in respect of employees’ services up to the reporting date and are
measured at the amounts expected to be paid when the liabilities are settled. All other short-term employee benefit
obligations are presented as payables.
ii. Other long term employee benefit obligations
The liability for long service leave which is not expected to be settled within 12 months after the end of the period in
which the employees render the related service is recognised in the provision for employee benefits and measured
as the present value of expected future payments to be made in respect of services provided by employees up
to the reporting date. Consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service. Expected future payments are discounted using market yields at the reporting
date on national government bonds with terms to maturity that match, as closely as possible, the estimated future
cash flows.
iii. Bonus plans
The group recognises a liability and expense for bonuses earned during the financial year where contractually
obliged or where past practice has created a constructive obligation.
iv. Superannuation
Contributions by the consolidated entity to employees’ superannuation funds are charged to the profit or loss when
they are payable. The consolidated entity does not operate any defined benefit superannuation funds.
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p) Trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of
the financial year and which are unpaid. These amounts are unsecured and are usually paid within 30 to 60 days of
recognition.
q) Leases
Leases of property, plant and equipment in which a significant portion of the risks and rewards of ownership are not
transferred to the consolidated entity as lessee are classified as operating leases. Operating lease payments are
charged to the profit or loss in the periods in which they are incurred as this represents the pattern of benefit derived
from the leased assets.
Lease income from operating leases where the group is a lessor is recognised in income on a straight line basis over
the lease term. The respective leased assets are included in the balance sheet as investment properties.
r) Borrowings and borrowing costs
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of the borrowings using the effective interest method.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is
probable that some or all of the facility will be drawn down. In this case the fee is deferred until the commencement of
the facility when draw down occurs.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled
or expired. Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement
of the liability for at least 12 months after the end of the reporting period.
Borrowing costs are recognised as expenses in the period in which they are incurred, except where they are included in
the costs of qualifying assets during the period when the asset is being prepared for its intended use or sale.
s) Provisions
i. Provision for customer rebates
Provision is made for the estimated liability arising from obligations in existence at balance date to customers for the
provision of landscaping and fencing rebates and other incentives, to which customers are generally entitled within
12 months of balance date.
t) Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the
discretion of the entity, on or before the end of the financial year but not distributed at balance date.
u) Maintenance
Routine operating maintenance and repairs are charged as expenses as incurred.
v) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in
equity as a deduction, net of tax, from the proceeds.
w) Segment reporting
Management has determined the operating segment based on the reports reviewed by the Managing Director that are
used to make strategic decisions. The Managing Director has been identified as the chief operating decision maker.
x) Trade and other receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less provision for impairment. Trade receivables are generally due for settlement within one year.
Collectability of trade receivables is reviewed regularly. Receivables that are uncollectable are written off by reducing the
carrying amount directly. Receivables include prepayments and loans made under the discontinued employee share
scheme.
CEDAR WOODS PROPERTIES LIMITED
y) Derivatives
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
remeasured to their fair value at each reporting date. Changes to fair value are taken to profit or loss and are included in
other income or expenses.
z) Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is recognised as part of the cost of the asset or as part 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 taxation authority is included with other receivables or payables in the balance sheet.
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, taxation authorities, are presented as operating cash flows.
aa) New accounting standards and interpretations
The group has applied the following standards and amendments for the first time for the annual reporting period
commencing 1 July 2013:
AASB 10 Consolidated Financial Statements, AASB 11 Joint Arrangements, AASB 12 Disclosure of Interests in
Other Entities, revised AASB 127 Separate Financial Statements and AASB 128 Investments in Associates and Joint
ventures and AASB 2011-7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint
Arrangements Standards
AASB 2012-10 Amendments to Australian Accounting Standards – Transition Guidance and Other Amendments which
provides an exemption from the requirement to disclose the impact of the change in accounting policy on the current
period.
AASB 13 Fair Value Measurement and AASB 2011-8 Amendments to Australian Accounting Standards arising from
AASB 13
AASB 119 Employee Benefits (September 2011) and AASB 2011-10 Amendments to Australian Accounting Standards
arising from AASB 119 (September 2011)
AASB 2012-5 Amendments to Australian Accounting Standards arising from Annual Improvements 2009-2011 cycle, and
AASB 2012-2 Amendments to Australian Accounting Standards – Disclosures – Offsetting Financial Assets and
Financial Liabilities
The adoption of AASB 10, AASB 13 and AASB 119 explained and summarised below. The other standards only
affected the disclosures in the notes to the financial statements.
i. Consolidated financial statements and joint arrangements
AASB 10 Consolidated Financial Statements was issued in August 2011 and replaces the guidance on control and
consolidation in AASB127 Consolidated and Separate Financial Statements and in interpretation 112 Consolidation
– Special Purpose Entities.
The group has reviewed its investment in other entities to assess whether the conclusion to consolidate is different
under AASB 10 than under AASB 127. No differences were found and therefore no adjustments to any of the
carrying amounts in the financial statements are required as a result of the adoption of AASB 10.
AASB 11 Joint Arrangements, introduces a principles based approach to accounting for joint arrangements. The
focus is no longer on the legal structure of joint arrangements, but rather on how rights and obligations are shared
by the parties to the joint arrangement. Based on the assessment of rights and obligations, a joint arrangement
will be classified as either a joint operation or a joint venture. The groups accounting for its interest in joint ventures
was not affected by the adoption of the new standard since the group had already applied the equity method in
accounting for these interests.
AASB 12 Disclosure of Interests in Other Entities, sets out the required disclosures for entities reporting under the
two new standards, AASB 10 and AASB 11 and replaces the disclosure requirements currently found in AASB
127 and AASB 128. Application of this standard by the group will not affect any of the amounts recognised in the
financial statements, but will impact the type of information disclosed in relation to the groups investments.
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ii. Fair value measurement
AASB 13 Fair Value Measurement aims to provide consistency and reduce complexity by providing a precise
definition of fair value and a single source of fair value measurement and disclosure requirements for use across
Australian Accounting Standards. The standard does not extend the use of fair value accounting but provides
guidance on how it should be applied where its use is already required or permitted by other Australian Accounting
Standards.
Previously the fair value of financial liabilities was measured on the basis that the financial liability would be settled or
extinguished with the counterparty. The adoption of AASB 13 has clarified that fair value is an exit price notion, and
as such, the fair value of financial liabilities should be determined based on transfer value to a third party market
participant.
The group currently has few assets measured at fair value and therefore the adoption of this standard has not had
any material impact on the financial statements.
iii. Employee benefits
The adoption of the revised AASB 119 Employee Benefits changed the accounting for the group’s annual leave
obligations. Where the entity does not expect all annual leave to be taken within 12 months of the respective
service being provided, annual leave obligations are now classified as long-term employee benefits in their entirety.
This changes the measurement of these obligations, as the entire obligation is now measured on a discounted
basis and no longer split into short term and long term portion. However, the impact of this change was immaterial
since the majority of the leave is still expected to be taken within a short period after the end of the reporting period.
iv. New accounting standards not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June
2014 reporting periods. The group’s assessment of the impact of these new standards and interpretations is set
out below.
Title of Standard
Nature of change
Impact
AASB 9 Financial
Instruments
AASB 9 Financial
Instruments addresses the
classification, measurement
and derecognition of
financial assets and financial
liabilities. Since December
2013, it also sets out new
rules for hedge accounting.
The application of the
standard at the operative
date is not expected to
have a significant impact on
the group’s accounting for
financial assets and liabilities
as the new requirements
only affects the accounting
for assets or liabilities that
are designated at fair value
through profit or loss and
the group does not have
any such liabilities.
Mandatory application date
/ Date of adoption by group
Must be applied for financial
years commencing on or
after 1 January 2017.
The group is considering
the introduction of hedge
accounting for derivatives
and may adopt AASB 9
before its operative date.
There are no other standards that are not yet effective and that are expected to have a material impact on the
consolidated entity in the current or future reporting periods and on foreseeable future transactions.
bb) Rounding of amounts
The company is of a kind referred to in Class Order 98/0100, issued by the Australian Securities and Investments
Commission, relating to the ‘rounding off’ of amounts in the financial statements.
Amounts in the financial statements have been rounded off in accordance with that Class Order to the nearest
thousand dollars, or in certain cases, to the nearest dollar.
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CEDAR WOODS PROPERTIES LIMITED
E5. Segment Information
The board has determined the operating segment based on the reports reviewed by the Managing Director that are used to
make strategic decisions.
The board has considered the business from both a product and a geographic perspective and has determined that the
group operates a single business in a single geographic area and hence has one reportable segment.
The group engages in property investment and development which takes place in Australia. The group has no separate
business units or divisions.
The internal reporting provided to the Managing Director includes key performance information at a whole of group level.
The Managing Director uses the internal information to make strategic decisions, based primarily upon the expected future
outcome of those decisions on the group as a whole. Material decisions to allocate resources are generally made at a whole
of group level.
The group sells products to the public and is not reliant upon any single customer for 10% or more of the group’s revenue.
All of the group’s assets are held within Australia.
The Managing Director assesses the performance of the operating segment based on the net profit after tax, earnings per
share and net tangible assets per share.
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E6. Parent Entity Financial Information
The financial information for the parent entity, Cedar Woods Properties Limited, has been prepared on the same basis as
the consolidated financial statements, except as detailed in notes (i) and (ii) below.
The individual financial statements for the parent entity show the following aggregate amounts:
Balance sheet
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Shareholders’ equity
Issued capital
Retained earnings
Profit for the year
Total comprehensive income
i.
Investments in subsidiaries and joint venture entities
2014
$’000
2013
$’000
53,893
301,445
(61,687)
(103,530)
197,915
116,716
81,199
197,915
32,040
32,040
38,435
241,570
(46,680)
(89,240)
152,330
83,795
68,535
152,330
27,584
27,584
Investments in subsidiaries and joint venture entities are accounted for at cost in the financial statements of Cedar
Woods Properties Limited. Such investments include both investments in shares issued by the subsidiary and other
parent entity interests that in substance form part of the parent entity’s investment in the subsidiary. These include
investments in the form of interest free loans which have no fixed repayment terms and which have been provided
to subsidiaries as an additional source of long term capital. Dividends received from joint ventures are recognised in
the parent entity’s profit or loss, rather than being deducted from the carrying amount of these investments.
ii. Tax consolidation legislation
Cedar Woods Properties Limited and its wholly owned Australian controlled entities have implemented the tax
consolidation legislation.
The head entity, Cedar Woods Properties Limited, and the controlled entities in the tax-consolidated group
account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the
tax-consolidated group continues to be a standalone taxpayer in its own right. In addition to its own current and
deferred tax amounts, Cedar Woods Properties Limited also recognises the current tax liabilities (or assets) and the
deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the
tax-consolidated group.
The entities have also entered into a tax funding agreement under which the 100% subsidiaries fully compensate
the parent for any current tax payable assumed and are compensated by the parent for any current tax receivable
and deferred tax assets relating to unused tax losses that are transferred to the parent under the tax consolidation
legislation. The funding amounts are determined by reference to the amounts recognised in the 100% subsidiaries’
financial statements.
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from
the head entity when it is issued. The head entity may require payment of interim funding amounts to assist with its
obligations to pay tax instalments.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as current
amounts receivable from or payable to other entities in the group.
CEDAR WOODS PROPERTIES LIMITED
Section F:
Declaration and Independent
Auditor’s Report
F1.
Directors’ Declaration .................................................................................................................................... 94
F2.
Independent Auditor’s Report to the Members of Cedar Woods Properties Limited .............................. 95
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F1. Directors’ Declaration
In the directors’ opinion:
a)
the financial statements and notes set out on pages 39 to 92 are in accordance with the Corporations Act 2001,
including:
i.
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
ii. giving a true and fair view of the consolidated entity’s financial position as at 30 June 2014 and of its performance
for the financial year ended on that date; and
b)
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable.
Note E4(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by
the International Accounting Standards Board.
The directors have been given the declarations by the Managing Director and Chief Financial Officer required by section
295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
P S Sadleir
Managing Director
Perth, Western Australia
19 August 2014
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CEDAR WOODS PROPERTIES LIMITED
F2. Independent Auditor’s Report
to the members of Cedar Woods Properties Limited
Independent auditor’s report to the members of Cedar Woods
Properties Limited
Report on the financial report
Independent auditor’s report to the members of Cedar Woods
We have audited the accompanying financial report of Cedar Woods Properties Limited (the
Properties Limited
company), which comprises the balance sheet as at 30 June 2014, the statement of profit or loss and
other comprehensive income, statement of changes in equity and cash flow statement for the year
Report on the financial report
ended on that date, a summary of significant accounting policies, other explanatory notes and the
We have audited the accompanying financial report of Cedar Woods Properties Limited (the
directors’ declaration for Cedar Woods Properties Limited (the consolidated entity). The consolidated
company), which comprises the balance sheet as at 30 June 2014, the statement of profit or loss and
entity comprises the company and the entities it controlled at year’s end or from time to time during
other comprehensive income, statement of changes in equity and cash flow statement for the year
the financial year.
ended on that date, a summary of significant accounting policies, other explanatory notes and the
directors’ declaration for Cedar Woods Properties Limited (the consolidated entity). The consolidated
Directors’ responsibility for the financial report
entity comprises the company and the entities it controlled at year’s end or from time to time during
The directors of the company are responsible for the preparation of the financial report that gives a
the financial year.
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
Directors’ responsibility for the financial report
financial report that is free from material misstatement, whether due to fraud or error. In Note E4, the
The directors of the company are responsible for the preparation of the financial report that gives a
directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
Statements, that the financial statements comply with International Financial Reporting Standards.
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that is free from material misstatement, whether due to fraud or error. In Note E4, the
Auditor’s responsibility
directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
Statements, that the financial statements comply with International Financial Reporting Standards.
our audit in accordance with Australian Auditing Standards. Those standards require that we comply
with relevant ethical requirements relating to audit engagements and plan and perform the audit to
Auditor’s responsibility
obtain reasonable assurance whether the financial report is free from material misstatement.
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. Those standards require that we comply
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
with relevant ethical requirements relating to audit engagements and plan and perform the audit to
in the financial report. The procedures selected depend on the auditor’s judgement, including the
obtain reasonable assurance whether the financial report is free from material misstatement.
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the consolidated
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
entity’s preparation and fair presentation of the financial report in order to design audit procedures
in the financial report. The procedures selected depend on the auditor’s judgement, including the
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of
In making those risk assessments, the auditor considers internal control relevant to the consolidated
entity’s preparation and fair presentation of the financial report in order to design audit procedures
accounting policies used and the reasonableness of accounting estimates made by the directors, as well
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
as evaluating the overall presentation of the financial report.
effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the directors, as well
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
as evaluating the overall presentation of the financial report.
our audit opinion.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
Independence
our audit opinion.
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001.
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
Liability limited by a scheme approved under Professional Standards Legislation.
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
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Independent auditor’s report to the members of Cedar Woods
Properties Limited (continued)
Auditor’s opinion
In our opinion:
(a)
the financial report of Cedar Woods Properties Limited is in accordance with the Corporations
Act 2001, including:
(i)
(ii)
giving a true and fair view of the consolidated entity's financial position as at 30 June
2014 and of its performance for the year ended on that date; and
complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001.
(b)
the financial report and notes also comply with International Financial Reporting Standards as
disclosed in Note E4.
Report on the Remuneration Report
We have audited the remuneration report included in pages 20 to 28 of the directors’ report for the
year ended 30 June 2014. The directors of the company are responsible for the preparation and
presentation of the remuneration report in accordance with section 300A of the Corporations Act
2001. Our responsibility is to express an opinion on the remuneration report, based on our audit
conducted in accordance with Australian Auditing Standards.
Auditor’s opinion
In our opinion, the remuneration report of Cedar Woods Properties Limited for the year ended 30
June 2014 complies with section 300A of the Corporations Act 2001.
PricewaterhouseCoopers
Douglas Craig
Partner
Perth
19 August 2014
CEDAR WOODS PROPERTIES LIMITED
Section G:
Shareholders’ Information
This section provides information for shareholders on distributions and other shareholder benefits, the composition of the
share register and past financial performance.
G1.
Investors’ Summary .......................................................................................................................................... 98
a)
b)
c)
d)
e)
f)
Dividend and dividend policy ................................................................................................................................ 98
Shareholder discount scheme .............................................................................................................................. 98
Electronic payment of dividends ........................................................................................................................... 98
Dividend re-investment plan and Bonus share plan .............................................................................................. 98
Shareholders’ timetable ....................................................................................................................................... 98
Shareholder information ....................................................................................................................................... 99
G2.
Five year financial performance .................................................................................................................... 101
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G1. Investors’ Summary
a) Dividend and dividend policy
The dividend policy is to distribute approximately 50% of the full year net profit after tax. The final dividend for the 2014
financial year is 15.5 cents per share, fully franked. The dividend will be paid on 31 October 2014.
b) Shareholder discount scheme
The group operates a shareholder discount scheme which entitles shareholders to a 5% discount off the listed price of
any residential lot, or 2.5% off the listed price of houses or apartments at the group’s developments. A summary of the
main terms and conditions follows:
• Shareholders must hold a minimum number of 5,000 shares for at least 12 months before purchasing a lot or
dwelling to qualify for the discount;
• There is no limit to the number of lots or dwellings which a shareholder may purchase under the scheme, subject
to any statutory restrictions; and
• The shareholder discount scheme does not apply to lots or dwellings at joint venture projects.
The above is a summary of the main conditions and shareholders should apply to the company or visit the website for
the full terms and conditions.
c) Electronic payment of dividends
The group continues to offer the electronic payment of dividends, which is now in use by the majority of our
shareholders. Shareholders may nominate a bank, building society or credit union account for the payment of
dividends by direct credit. Payments are electronically credited on the dividend payment date and confirmed by mailed
advice. Shareholders wishing to take advantage of this facility for the first time should contact the company’s share
registrar, Computershare Investor Services Pty Ltd, by visiting www.computershare.com.au.
d) Dividend re-investment plan and Bonus share plan
The dividend re-investment plan and bonus share plan are operated from time to time as part of measures to manage
the group’s capital. Shareholders can change their participation status in the plans by completing an election form in
accordance with the rules of each plan. The dividend re-investment plan and bonus share plan have been suspended
for the final dividend for the 2014 financial year.
e) Shareholders’ timetable
Dividend announcement
Share register closes for dividend (Record date)
Final dividend payment date
First quarter update
Annual General Meeting
Half-year result announcement
Interim dividend payment date
Third quarter update
Full year result and dividend announcement
20 August 2014
3 October 2014
31 October 2014
October 2014
10 November 2014
February 2015
30 April 2015
May 2015
August 2015
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CEDAR WOODS PROPERTIES LIMITED
f) Shareholder Information
The shareholder information set out below was applicable at 31 August 2014.
i) Distribution of ordinary shares
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,000 and over
There were 154 holders of less than a marketable parcel of shares.
ii) Twenty largest shareholders of ordinary shares
National Nominees Limited
JP Morgan Nominees Australia Limited
Hamsha Nominees Pty Ltd
HSBC Custody Nominees (Australia) Limited
Westland Group Holdings Pty Ltd
Zero Nominees Pty Ltd
Australian Foundation Investments Company Limited
Australian Executor Trustees Limited
Beach Corporation Pty Ltd
Helen Kaye Poynton
Citicorp Nominees Pty Ltd
HSBC Custody Nominees (Australia) Limited
(NT - Commonwealth Super Corp A/C)
BNP Paribas Noms Pty Ltd
Mr Paul Sadleir
Citicorp Nominees Pty Ltd (Colonial First State Inv A/C)
ESA Securities Pty Ltd
Netwealth Investments Limited
Leblon Holdings Pty Ltd
R S & J P Brown Super Fund A/C
Ramneg Pty Ltd
Number
of holders
782
1,133
362
407
57
Number
of shares
336,636
2,882,037
2,634,516
10,380,766
62,102,416
2,741
78,336,371
Number
of shares
Percentage
of shares
8,184,801
7,090,024
6,285,957
5,833,980
4,639,980
4,119,503
4,060,216
2,802,231
2,772,159
1,677,095
1,437,957
1,336,799
1,129,249
1,045,445
752,698
680,221
657,544
654,024
554,996
537,031
10.45
9.05
8.02
7.45
5.92
5.26
5.18
3.58
3.54
2.14
1.84
1.71
1.44
1.33
0.96
0.87
0.84
0.83
0.71
0.69
56,251,910
71.81
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iii) Substantial shareholders of ordinary shares
As disclosed in substantial shareholder notices lodged with the ASX at 31 August 2014.
Number
of shares
Percentage
of shares 1
9,314,668
7,967,627
4,493,661
4,174,479
4,054,462
3,371,170
3,210,743
12.90
10.87
6.13
5.33
5.18
5.80
5.29
William George Hames and related entities
Robert Stanley Brown and related entities
Westoz Funds Management Pty Ltd
Acorn Capital Limited
Westpac Banking Corporation
Australian Foundation Investment Company Limited
Invesco Australia Limited
1 Percentage of issued capital held as at the date notice provided.
iv) Voting rights
The voting rights attaching to each class of equity securities are set out below:
Ordinary shares
On a show of hands every member present in person or by proxy shall have one vote and upon a poll each share
shall have one vote.
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G2. Five Year Financial Performance
All figures in $’000 except where stated
Financial Year
Financial Performance
Revenue from operations
2014
2013
2012
2011
2010
214,465
172,751
170,474
131,839
108,415
Earnings before interest and tax
56,172
53,022
53,092
42,106
26,771
Finance costs
Operating profit before tax
Income tax expense
Net profit after tax
Financial Position
Total assets
Total liabilities
606
55,566
15,253
40,313
1,580
51,442
15,105
36,337
3,819
49,273
15,023
34,250
1,866
40,240
12,180
28,060
2,036
24,735
7,494
17,241
409,948
301,024
238,314
233,595
205,657
148,347
93,280
53,688
104,046
96,867
Shareholders’ equity
261,601
207,744
184,626
129,549
108,790
Number of shares on issue – end of year (‘000)
78,336
73,360
72,190
61,818
60,565
Key Performance Measures
Earnings per share (cents)
Dividend per share, fully franked
EBIT Margin
Interest cover (times)
Return on Equity
54.4
27.5
49.9
26.0
53.2
25.0
45.8
23.0
29.0
13.0
26.2%
30.7%
31.1%
31.9%
24.7%
10.4
12.6
8.8
9.1
15.4%
17.5%
18.6%
21.7%
6.4
15.8%
56,338
1.80
39,716
36.5%
2.45
Investment in inventory during year
158,149
145,474
97,401
102,348
Net tangible assets backing per share ($)
Net bank debt
Net bank debt to equity
Share price – end of year ($)
3.34
32,602
12.5%
7.31
2.83
37,762
18.2%
5.17
2.56
3,822
2.1%
3.56
2.10
55,100
42.5%
4.00
Stock Market capitalisation at 30 June
572,639
379,269
256,995
247,272
148,383
Number of employees at 30 June
56
54
48
41
35
Returns to shareholders over 1, 3, & 5 years
1 Year
3 Year
5 Year
Earnings growth %
Share price growth %
Dividend growth % (paid dividend)
Total shareholder return %
9.0
41.4
8.0
46.6
5.9
22.3
12.4
28.7
27.4
38.8
22.0
45.9
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www.cedarwoods.com.au