Cedar Woods Properties Limited
2016 Annual Report
ABN 47 009 259 081
About Cedar Woods
Cedar Woods Properties Limited is an Australian property development company. The
company was established in 1987, was listed on the Australian Securities Exchange in 1994
and was admitted to the ASX 300 in 2013. The company’s shares trade under the security
code ‘CWP’.
The company’s principal interests are in urban land subdivision and built form development for residential, commercial and
retail purposes. Its portfolio of assets is located in Western Australia, Victoria, Queensland and South Australia. 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.
Downloadable content
Cedar Woods Properties has taken the opportunity to publish the Corporate Governance statement on its website rather
than include in the annual report. A copy of the 2016 Corporate Governance statement can be downloaded from the
investor relations section of the website. www.cedarwoods.com.au
Other information that is available in the investor relations section is listed below.
• Board Committee Charters
• Risk Management Policy and Internal Compliance and Control System
•
Investor Communications Policy
• Continuous Disclosure Policy
• Performance Evaluation Policy
• Privacy Policy
• Primary Objectives and Company Code of Conduct
• Securities Trading Policy
• Diversity Policy
Sustainability Reports are available on our website in the Shareholder Reports section.
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Table of Contents
Cedar Woods’ Charter ....................................................................................................................................................... 5
Our Strategy and Business Model ..................................................................................................................................... 7
Financial and Operating Review ......................................................................................................................................... 8
Project Pipeline as at 30 June 2016 ................................................................................................................................. 16
Environmental and Social Governance ............................................................................................................................. 18
Directors’ Report ............................................................................................................................................................. 23
Directors’ Report: Chair of the Human Resources and Remuneration Committee’s Letter to Shareholders ...................... 28
Directors’ Report: Remuneration Report .......................................................................................................................... 30
Auditor’s Independence Declaration ................................................................................................................................. 47
Financial Statements .................................................................................................................................................... 48
Consolidated Statement of Profit or Loss and Other Comprehensive Income .................................................................. 49
Consolidated Balance Sheet ............................................................................................................................................ 50
Consolidated Statement of Changes in Equity ................................................................................................................. 51
Consolidated Cash Flow Statement ................................................................................................................................. 52
Notes to the Financial Statements ............................................................................................................................. 53
Section A: How the Numbers are Calculated ............................................................................................................ 54
A1. Profit or Loss Information ........................................................................................................................................ 55
A2. Financial Assets and Financial Liabilities .................................................................................................................. 57
A3. Non-Financial Assets and Liabilities ........................................................................................................................ 62
A4. Equity ..................................................................................................................................................................... 68
A5. Cash Flow Information ............................................................................................................................................ 70
Section B: Financial Risks ........................................................................................................................................... 71
B1. Significant Estimates and Judgements .................................................................................................................... 72
B2. Financial Risk Management .................................................................................................................................... 73
B3. Capital Management Objectives and Gearing ........................................................................................................ 78
Section C: Group Structure ......................................................................................................................................... 80
C1. Interests in Other Entities ........................................................................................................................................ 81
Section D: Unrecognised Items .................................................................................................................................. 84
D1. Contingent Liabilities ............................................................................................................................................... 85
D2. Commitments ......................................................................................................................................................... 86
D3. Events Occurring After the Reporting Period ........................................................................................................... 87
Section E: Other Information ....................................................................................................................................... 88
E1. Related Party Transactions ..................................................................................................................................... 89
E2. Remuneration of Auditors ....................................................................................................................................... 90
E3. Employee Share Scheme ........................................................................................................................................ 91
E4. Summary of Accounting Policies ............................................................................................................................. 92
E5. Segment Information ............................................................................................................................................ 100
E6. Parent Entity Financial Information ........................................................................................................................ 101
Section F: Declaration and Independent Auditor’s Report ..................................................................................... 102
F1. Directors’ Declaration ........................................................................................................................................... 103
F2. Independent Auditor’s Report to the Members of Cedar Woods Properties Limited .............................................. 104
Section G: Shareholders’ Information ...................................................................................................................... 106
G1. Investors Summary ............................................................................................................................................... 107
G2. Five Year Financial Performance ............................................................................................................................ 110
Corporate Directory ....................................................................................................................................................... 111
2016 ANNUAL REPORT
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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.
We are guided by four key values. They act as critical drivers of Cedar Woods’ culture.
Integrity
• Do what is right and do what we say we will do.
• Uphold honesty, truthfulness and sincerity whilst remaining fair and ethical with all stakeholders.
Performance
• Meet or exceed the expectations of stakeholders, communities, customers and suppliers.
• Maintain a strong financial position to allow us to be competitive and engage in opportunities when they arise.
Innovation
• Strive to create and deliver new products to develop and grow as a business.
• Foster a culture that encourages learning, new ideas and rewards creativity.
People and Environment
• Make positive contributions to communities in which we operate.
• Attract, develop and retain the best talent for our business, challenging our people, demonstrating a can do attitude
and fostering a collaborative and mutually supportive environment.
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.
Against this backdrop, we manage our portfolio with the aim of delivering consistent annual growth in profits and dividends.
2016 ANNUAL REPORT
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Our Strategy and Business Model
Our Strategy
“To grow and develop our national project portfolio, diversified by:
•
•
•
geography
product type
price point
so that it continues to hold broad customer appeal and performs well in a range of market conditions.”
Delivering on strategy in FY2016
We have further diversified our portfolio geographically with the acquisition of the Wooloowin project in Brisbane and the
Glenside project in Adelaide. We were also selected as preferred proponent for the acquisition of land at Port Adelaide.
We launched our first apartment project at the Williams Landing Town Centre and we are planning new medium density
product at Wooloowin and Glenside, while we have now launched new residential estates at Ellendale in Brisbane and
Bushmead in Perth.
The first home buyer, upgrader and investor segments are all well catered for in our product range and the Brisbane, Perth
and Adelaide markets offer excellent affordability.
Our Business Model
Property Acquisitions
Development
Marketing & Sales
Disciplined approach
to acquisitions
Research, design,
planning and delivery
Positioning projects
to meet demand
Identify projects that meet
closely defined criteria
Assess prospects in line
with corporate strategy and
financial targets
Structure contracts to
minimise risks and optimise
exposure (including Joint
Ventures)
Designs to meet agreed
project vision
Achieve required approvals
Ongoing market research
and assessment of designs
to meet financial and non-
financial objectives
Manage construction within
annual budget, cost and
timeframe
Generate pre-sales to
underwrite stages of
projects
Ongoing monitoring of
sales conditions and buyer
groups
Efficient settlement
management
2016 ANNUAL REPORT
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Financial and Operating Review
On behalf of the Board, we are pleased to present the financial and operating review of Cedar
Woods Properties Limited to shareholders.
The following summarises the results of operations during the year and the financial position of the consolidated entity at
30 June 2016:
a) 2016 Financial Highlights
•
•
•
•
record net profit of $43,602,000, up 2.4 per cent;
record full year dividends of 28.5 cents per share, up 1.8 per cent;
record earnings per share of 55.3 cents, up 1.8 per cent;
low level of bank debt;
• strong interest cover;
• approval received from financiers to increase our corporate finance facility from $135,000,000 to
$175,000,000 to provide funding for acquisitions.
b) Growth in Net Profit After Tax (NPAT) and Dividends Paid
Cedar Woods has a track record of growth over the past five years with Net Profit after Tax growing from $34.3m in
FY12 to $43.6m in FY2016 and dividends declared growing from 25 cents to 28.5 cents per share.
NPAT and Dividends paid for the past 5 years
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$
45
40
35
30
25
20
15
10
5
0
FY12
FY13
FY14
FY15
FY16
Net Profit After Tax
Dividends Paid
30
25
20
15
10
5
0
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c) 2016 Financial Results Summary
Year ended 30 June
Revenue
2016
$’000
2015
$’000
% Change
175,159
178,637
(1.9%)
Proceeds from Masters store sale
-
36,000
-
Total revenue and other proceeds from property sales
175,159
214,637
(18.4%)
Net profit after tax
Total assets
Net bank debt
Shareholders’ equity
d) Key Performance Indicators
Year ended 30 June
Basic and diluted 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
e) Financial Year Overview
43,602
42,585
452,729
383,330
50,344
27,908
307,188
285,605
2.4%
18.1%
80.4%
7.6%
2015
% Change
¢
¢
%
%
%
%
x
$
2016
55.3
28.5
14.2
18.3
(9.6)
16.4
16.6
3.89
54.3
28.0
14.9
19.5
(24.3)
9.8
9.9
3.62
’000
$’000
$
78,892
78,892
343,179
414,970
4.35
5.26
1.8
1.8
(0.7)
(1.2)
14.7
6.6
67.7
7.5
0.0
(17.3)
(17.3)
During FY2016, market conditions remained challenging in Western Australia, while Eastern States property markets
continued to perform well. The company continued to diversify its national portfolio with an acquisition at Wooloowin in
Brisbane, as well as being chosen by the South Australian Government as preferred proponent for the Glenside project
in Adelaide. Shortly after the end of the financial year a conditional contract was secured for the acquisition of the
Glenside site, and the company was also selected as the preferred proponent for the redevelopment of two precincts at
Port Adelaide.
During the year, significant progress was made with stages developed across the company’s property portfolio of
active projects. In particular, the company’s Ellendale development in Upper Kedron, Brisbane, received initial planning
approval for the first 480 lots in FY2016, with the planning process now underway for the balance of the 228ha site. In
addition, plans and approvals were progressed for a number of developments anticipated to commence in future years,
with important planning milestones achieved at Bushmead and Mangles Bay. Further details of achievements in the
property portfolio follow in the next section.
The year closed with a record full year net profit of $43.6m, being the sixth consecutive year of record profit and
earnings, allowing the Board to declare a record full year dividend of 28.5 cents per share.
As a result, earnings per share for FY2016 was 55.3 cents, an increase of 1.8 per cent on the previous year.
Return on equity of 14.2 per cent and return on capital of 18.3 per cent were well above the company’s benchmarks of
12 per cent and 14 per cent respectively.
The 1 year total shareholder return was -9.6%. Despite the record profit, the company’s share price continued to be
impacted by negative market sentiment towards WA exposed companies and the residential property sector in general.
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f) Operational Review of Developments
The housing sector has experienced strong levels of activity in FY2016 with housing starts running at record levels
nationally, fuelled by low interest rates and improving consumer sentiment. Building approvals continue at high levels
in all states except WA, but are expected to ease in FY2017. The HIA economics group is forecasting annual dwelling
starts to decrease in FY2017 with FY2016 the peak year in the cycle, but demand is forecast to continue at historically
robust levels.
In Victoria demand remains strong, particularly for well-located property close to transport infrastructure and other
amenities. Solid price gains have been experienced in the Melbourne market over the last twelve months although
prices are now beginning to moderate.
In WA, ongoing population growth, relatively low unemployment and improving affordability continue to sustain demand.
Recent data has shown an uptick in land sales and new building activity after easing from the resources driven upswing.
In Queensland, State Treasury is forecasting 4% growth in the economy in FY2017, faster than every other state
in Australia, driven by strong export activity. Dwelling investment is forecast to continue to grow at a steady rate
with Queensland at an earlier phase in the housing cycle than the other states. Current high prices in Sydney and
Melbourne are expected to cause increased demand for property in Brisbane, as investors chase higher yields and
owner-occupiers seek greater affordability.
In South Australia, the economy is expected to grow by 2% in FY2017 as low interest rates, government infrastructure
spending and shipbuilding stimulate that market.
i. Victoria
The company’s projects in Victoria again performed well during the year, with strong sales and settlement results
and good margins achieved.
Construction of the Botanica Apartments in Footscray, comprising 101 apartments, was completed with
settlements occurring in June and July 2016. Two other townhouse stages at the Banbury Village development in
Footscray were also developed with settlements now complete.
Several residential stages were completed at Williams Landing and good presales achieved for stages to be
delivered in FY2017. The Newton Apartments project, comprising 57 one & two bedroom apartments, was
successfully launched with 100% presales being achieved and construction underway. Completion is expected in
FY2017. Planning for the next apartment project, Oxford apartments, is well advanced with a launch expected in
mid FY2017.
While the shopping centre now operates with a high level of occupancy, some of the original specialty retailers
have underperformed and provisions of approximately $800,000, covering outstanding rent and impaired lease
incentives, were made in the second half FY2016. Strategies have been implemented to improve tenancy
performance and minimise vacancies in the short term while, in the long term, performance of the shopping centre
is expected to improve as the Town Centre matures.
Planning work for strata offices, a hotel and other commercial uses in the Town Centre is underway. The
company sold a site to aged care facility developer and operator, Tricare, during the year adding to the diversity of
developments at Williams Landing.
The company’s new housing developments, St A. in St Albans and Jackson Green in Clayton South, have
progressed well with civil contractors and home builders appointed, and planning permits in place for the initial
stages of housing at both projects.
The Victorian State Government is well progressed with the new station and level crossing removal at St. Albans,
with completion expected in FY2017. Level crossing removal and the commencement of station construction
works at Clayton, near the Jackson Green development, is also expected in FY2017.
ii. Western Australia
Market conditions in Western Australia eased during FY2015 and FY2016 after the resource driven peak, however
early signs of improved conditions are now emerging. Although overall sales volumes declined, Cedar Woods has
continued to achieve steady sales during FY2016, particularly at its estates in high-growth areas where limited
competing product is available.
The marketing launch of an exciting new project at Bushmead took place in late July to encouraging early results,
with all 15 lots in the first release sold within three days. This project is located 15 kilometres north-east of the Perth
CBD and is in close proximity to the Midland town centre and the Perth Airport precinct.
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Two thirds of the land at Bushmead will be set aside as park and recreational reserves, creating a unique
environment for the enjoyment of local residents. The total project site covers 273 hectares and will be developed in
stages to deliver approximately 935 lots over the next 8-10 years.
Consistent sales have been achieved in the final canal stage of Mariners Cove in Mandurah and there are only a
small number of lots remaining. Plans for the development of a waterfront site, allowing medium density housing,
are being progressed.
At Ariella Estate in Brabham, which is located 17 kilometres north-east of Perth’s CBD and within a strong growth
corridor, construction of the 94-lot Stage 2 was completed in April 2016. The Sales and Marketing Centre is now
open, with pleasing levels of enquiry and sales continuing. The commencement of construction of Stage 3 is
expected during FY2017.
During the first half of FY2016 Cedar Woods completed the acquisition of 51 hectares of land at North Baldivis,
located 36 kilometres south of Perth, adjoining an existing Cedar Woods landholding of 68 hectares. The combined
landholding of 119 hectares will enable economies of scale and provide opportunities for efficiency in estate design
and, being located next to the Kwinana Freeway, is expected to be a landmark project for the Baldivis corridor. The
company is well established in this region and this project will provide an extended presence in the area. It will yield
approximately 1580 lots over the next 10-15 years.
Planning continues for the Mangles Bay marina-based tourist precinct, 39 kilometres south of the Perth CBD. With
all environmental approvals achieved, completion of statutory planning is anticipated in the first quarter of calendar
2017 and construction is anticipated to commence in FY2018. This mixed use project will provide much needed
boating and tourism facilities, together with a range of housing options for the Rockingham region, as well as
improved public access to the Mangles Bay beach front.
The Batavia Coast Marina Apartments project in Geraldton has underperformed, reflecting the property downturn
in the resources-exposed regions of WA. The company has further impaired the carrying value of its investment in
the trust by $1 million during the year, ($300,000 impairment recognised in the first half and $700,000 in the second
half) with the investment now fully impaired as at 30 June 2016. A full provision was also made for a $400,000 loan
to the trust.
iii. Queensland
Planning at the company’s new Ellendale project in Upper Kedron in Queensland was progressed during the year,
with approval for the first stages granted. Construction has commenced and the project recently launched with
approximately 50 sales already achieved.
Home builders have expressed strong interest in the display village which will commence construction following
completion of civil works. The Queensland State Government approved the initial 480 dwellings on the site. The
balance of the project is subject to a further planning process which is expected to conclude in late 2017.
In December 2015 the company purchased another well located site in Brisbane, being 3.8 hectares in Wooloowin,
a sought after suburb 6 kilometres north of the Brisbane CBD. Design work is underway for a medium-density
residential development on the site; a process expected to conclude in FY2018. The site is well located in relation
to train stations, shopping centres, schools and parks.
iv. South Australia
In July 2016 Cedar Woods confirmed the purchase of a 16.5 hectare site from the State Government at Glenside
in the city’s inner eastern suburbs, just 3 kilometres from the CBD. Settlement of the purchase will occur upon
finalisation of the rezoning, which is expected to occur later this year. The site will accommodate approximately
1,000 dwellings.
The company was also selected as preferred developer by the State Government for a site at Port Adelaide.
The site is 14 kilometres north-west of the Adelaide CBD and only 1.5 kilometres from Semaphore Beach. The
12.6 hectare site covers two precincts (North West and Fletcher’s Slip) which form part of a larger 40 hectare
redevelopment area.
Port Adelaide is located 7 kilometres from the Techport precinct, which is the confirmed build location for Australia’s
next generation Future Submarines and Future Frigates Program commencing in 2018, creating thousands of new
long-term jobs. The project site will accommodate approximately 500 dwellings across the two precincts with the
majority being two and three storey townhouses.
The State Government’s agency, Renewal SA, and Cedar Woods will work together over the next six months to
develop a master plan for the Port Adelaide project, in consultation with the community.
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g) 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 consistent 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 2.4 per cent and dividend growth of
1.8 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 key areas of focus, as set out in the Corporate Plan and shown in our business model on page 7 are:
i. Acquisition of properties
The focus on the project pipeline guides management’s activities by ensuring there is sufficient diversity by
geography and product to meet the company’s ongoing earnings objectives in the years ahead and influences the
company’s acquisition strategy. Consequently, progress with acquisitions in FY2016 was achieved in 3 different
states and with regard to a variety of housing types.
In the last year the company acquired an additional 51 hectares of land at North Baldivis (WA), adjacent to the
company’s existing land holding purchased in 2011. Fully developed, the additional land is expected to produce
approximately 700 residential lots and the combined land holding will have a total lot yield of approximately 1580 lots.
In Dec 2015 the company purchased another well located site in Brisbane (QLD), 3.8ha in Wooloowin, a sought
after suburb 6 kilometres north of the Brisbane CBD. Progress was made towards the acquisition of two
landholdings in Adelaide (SA) as detailed in the preceding sections.
A summary of the project pipeline may be found at the end of this Financial and Operating Review on page 16.
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
Western Australia, Victoria, Queensland and South Australia 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 continued 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. The company sold a site to aged care facility developer and operator, Tricare, during the year adding to the
diversity of developments at Williams Landing.
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 successfully launched new projects at Ellendale
(Upper Kedron) in Brisbane’s western corridor and at Bushmead in Perth’s eastern corridor during the year and
progressed approvals for a number of other projects across its portfolio that will contribute in future years.
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h) 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), Queensland (metropolitan) and South Australia (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
various consumer segments.
Whilst house and land prices fluctuate, underlying demand will be driven by population growth and changing
demographics. 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 “call in” of the Upper Kedron project by
the Queensland Government provides an example of such risks, with the company’s program for that project delayed
by approximately twelve months, although approval has now been received to enable development to commence.
The company aims to balance its portfolio at any time in favour of mature projects where the project risks are generally
diminished.
i) Capital Management
The company reviewed its credit facilities during the year, maintaining the corporate bank facility limit at $135m, and
extending the tenure by a further year to November 2018. The company has received recent approval from its financiers
to increase its current corporate facility from $135m to $175m to provide funding for the Glenside and Port Adelaide
opportunities. In addition, the company has a facility of $30m in place for the Williams Landing Shopping Centre,
expiring in February 2019. The year concluded with a low net debt to equity of 16.4 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 16.6 times.
The dividend policy, which is to distribute approximately 50 per cent of the annual net profit, was maintained. The
company suspended the dividend reinvestment plan and bonus share plan during the year in response to capital
management initiatives, having regard to the company share price.
j) 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.
k) People
Cedar Woods remains committed to an inclusive workplace that embraces and promotes diversity. 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.
During the year the company introduced new staff induction and retention initiatives, including an Employee Service
Recognition Policy.
l) 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 has reviewed its corporate governance framework and practices and has implemented a
number of key changes:
• a review of the company’s Board committees that has resulted in the company achieving a fully independent
Audit & Risk Management committee,
• a review of the remuneration framework for the key management personnel, including improved linkage of
the performance assessment to the company’s balanced scorecard, and greater weighting towards variable
components of executive remuneration,
•
the implementation of a new equity based long term incentive plan that was announced last year.
Further details of these changes are contained in this Annual Report and the Corporate Governance Statement which is
available on the company’s website and also on the ASX website.
2016 ANNUAL REPORT
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m) Outlook
Cedar Woods is well positioned moving into FY2017 with strong pre-sales of $184 million, low debt, funding capacity
and a diverse portfolio of developments in established growth corridors in Melbourne, Perth and Brisbane and, soon,
Adelaide.
The development program for FY2017 will see the completion of a number of stages at new projects, including at
Bushmead, Ellendale and in the Williams Landing Town Centre. The company anticipates that earnings will be skewed
significantly to the second half of FY2017, with the first half result considerably lower than the first half of FY2016.
Assuming current market conditions continue in FY2017, the company is well placed to maintain profit momentum
during the current financial year and into FY2018. The company anticipates a similar profit result in FY2017 to that
achieved in FY2016.
A number of new projects, including Jackson Green and St A. in Victoria, where the first stages are already under
construction, and North Baldivis and Mangles Bay in Western Australia, where development is expected to proceed
over the next 12 months, together with the recent move into the Adelaide market, provide a positive growth outlook for
future financial years.
William Hames
Chairman
Paul Sadleir
Managing Director
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Project Pipeline
as at 30 June 2016
PROJECT NAME
CORRIDOR /
LOCATION
PROJECT TYPE
LOTS / UNITS
PROJECT
LOTS / UNITS
REMAIN
FY17
FY18
FY19
FY20
FY21
FY22
PROJECT LIFE
WESTERN AUSTRALIA - PERTH
Mariners Cove
The Brook at Byford
Rivergums Baldivis
Ariella
South
Canal
South East
Residential Land
South
Residential Land
North East
Residential Land
Byford on the Scarp
South East
Residential Land
Piara Waters / Forrestdale
South East
Residential Land
Bushmead
North Baldivis
Pinjarra
East
South
South
Residential Land
Residential Land
Residential Land
WESTERN AUSTRALIA - REGIONAL
(As of 1/7/16)
40
277
457
425
262
443
935
1580
1080
948
405
1413
480
324
443
935
1580
1080
Elements South Hedland
Pilbara
Residential Land
136
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WESTERN AUSTRALIA - “JV” PROJECTS
Cedar Woods Wellard (Emerald Park)
South
Residential Land
Batavia Coast Marina Apartments
Mid-West
Apartments
Harrisdale Green
Mangles Bay
Western Edge
South East
Residential Land
South
Pilbara
Mixed Use
Residential Land
VICTORIA - MELBOURNE
Banbury Village
Carlingford
St Albans
Jackson Green
Inner West
Houses & Apartments
North
Residential Land
North West
Houses & Apartments
South East
Houses & Apartments
Williams Landing Residential
Williams Landing Town Centre
West
West
Residential Land
Retail / Mixed Use / Apartments
QUEENSLAND - BRISBANE
Ellendale
Wooloowin
North West
Residential
Inner North
Houses & Apartments
SOUTH AUSTRALIA - ADELAIDE
Glenside (proposed)
Inner South East Houses & Apartments
Port Adelaide (proposed)
North West
Houses & Apartments
665
54
427
TBD
600
430
650
250
350
2385
600
480
279
1000
500
135
27
262
TBD
600
6,538
62
141
250
350
721
600
2,124
480
279
759
1000
500
1,500
CEDAR WOODS PROPERTIES LIMITED
PROJECT NAME
CORRIDOR /
LOCATION
PROJECT TYPE
LOTS / UNITS
LOTS / UNITS
PROJECT
REMAIN
FY17
FY18
FY19
FY20
FY21
FY22
PROJECT LIFE
Planning & Design
Development & Sales
Leasing, Development & Sales
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Elements South Hedland
Pilbara
Residential Land
136
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WESTERN AUSTRALIA - PERTH
Mariners Cove
The Brook at Byford
Rivergums Baldivis
Ariella
Bushmead
North Baldivis
Pinjarra
South
Canal
South East
Residential Land
South
Residential Land
North East
Residential Land
East
South
South
Residential Land
Residential Land
Residential Land
Byford on the Scarp
South East
Residential Land
Piara Waters / Forrestdale
South East
Residential Land
WESTERN AUSTRALIA - “JV” PROJECTS
Cedar Woods Wellard (Emerald Park)
South
Residential Land
Batavia Coast Marina Apartments
Mid-West
Apartments
Harrisdale Green
Mangles Bay
Western Edge
Banbury Village
Carlingford
St Albans
Jackson Green
VICTORIA - MELBOURNE
South East
Residential Land
South
Pilbara
Mixed Use
Residential Land
Inner West
Houses & Apartments
North
Residential Land
North West
Houses & Apartments
South East
Houses & Apartments
Williams Landing Residential
Williams Landing Town Centre
West
West
Residential Land
Retail / Mixed Use / Apartments
QUEENSLAND - BRISBANE
Ellendale
Wooloowin
North West
Residential
Inner North
Houses & Apartments
SOUTH AUSTRALIA - ADELAIDE
Glenside (proposed)
Inner South East Houses & Apartments
Port Adelaide (proposed)
North West
Houses & Apartments
948
405
1413
480
324
443
935
1580
1080
665
54
427
TBD
600
430
650
250
350
2385
600
480
279
1000
500
(As of 1/7/16)
40
277
457
425
262
443
935
1580
1080
135
27
262
TBD
600
6,538
62
141
250
350
721
600
480
279
759
2,124
1000
500
1,500
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Environmental and
Social Governance
ESG Reporting
Cedar Woods seeks to integrate sustainability best practice into all levels of decision making and project outcomes. To
achieve this, leadership is provided at senior executive level to ensure that sustainability management and performance is
integrated into the company’s culture, processes and stakeholder relationships. This helps us manage the non-financial
impacts and performance of our projects.
In addition, the company is working to embed innovation as a consistent business practice. It recently established an
‘Innovation and Business Development Committee’ in its Perth and Melbourne offices. Current areas of focus include:
strengthening links with universities, housing construction efficiencies, affordability, shared equity, sales and marketing,
finance packaging, deposit funding and existing business processes. These initiatives tie in with Cedar Woods emerging
‘continuous improvement’ approach to business.
This section summaries our sustainability performance for the past financial year. It provides updates and progress against
targets and outcomes identified in the balanced scorecard reporting and allows us to communicate our achievements to our
business, industry and stakeholder parties. It should be read in conjunction with Cedar Woods’ annual Sustainability Report.
Sustainability Objective:
Integrate sustainability best practice into all levels of decision making and project outcomes.
Environment and Climate Change - enhance and rehabilitate environmental assets; remediate contamination as an
integral part of project delivery; and promote renewable energy, energy efficiency and reduced energy consumption.
FY2016 Highlights and Achievements
• Cedar Woods continues to build on its track record of being an environmentally responsible developer. All greenfield
projects continue to be subject to thorough site analysis and surveys at the outset to determine biodiversity
objectives. This highlights the required local, state and commonwealth approvals and opportunities for retention
and management of biodiversity to improve project outcomes.
• Bushmead has been recognised by the State government as delivering an improved environmental outcome,
based on Cedar Woods gifting two-thirds of the site for conservation management and the remediation of site
contamination. Commonwealth environmental approval has now been granted. The first stage subdivision has now
commenced.
• The Ellendale masterplan dedicates 40% of the site as a greenspace corridor. It has received Federal, State and local
government environmental approvals. A Queensland State government review concluded that the Cedar Woods
project would result in overall environment enhancement, including restored habitat linkages, improved wildlife
movement networks, including fauna underpasses, squirrel glider poles and nesting boxes and ecological buffers.
• Cedar Woods’ Sustainability Checklist and Sustainable Living Guide template continues to be rolled out in new
estates, encouraging new home builders to make smart choices to address escalating energy costs, water scarcity
and other impacts of climate change.
Optimising Land Use - delivering the best use of land by optimising land use mix and product yield in the context of high
quality urban places that deliver quality of life.
FY2016 Highlights and Achievements
• By the nature of our business, a key outcome of our project delivery is to assist with residential and commercial
land supply in line with the Perth, Melbourne, Brisbane and now Adelaide strategic planning frameworks. The
company has developed a proven model for delivering quality, medium-density projects in middle and inner
suburbs. This year saw an expansion of this model with the acquisition of an infill site in Wooloowin, in Brisbane’s
inner north, Glenside, just 3 kilometres from the Adelaide CBD, which will see 1,000 medium to high density homes,
and the company’s selection as preferred proponent for two redevelopment precincts in Port Adelaide.
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• Our Melbourne office has continued to deliver strategic urban renewal projects along public transport corridors with
further progress at Williams Landing Town Centre, St Albans, Jackson Green and the completion of Banbury Village.
• Perth based projects continue to be characterised by the acquisition of government priority green fields projects in
urban corridors, with the acquisition of an additional 50.7ha in Baldivis.
• The Ellendale project is one of three broadacre development areas identified within the urban footprint in the South
East Queensland Regional Plan. It will optimise disused rural land by providing residential housing supply that
compliments an established residential area, capitalising on existing transport and service infrastructure.
Housing Diversity - promote equality of access to housing for all sectors of the community.
FY2016 Highlights and Achievements
• Cedar Woods commitment to providing affordable housing was highlighted through the Elements project which
won the 2015 UDIA Russel Perry Excellence Award and Affordable Housing Excellence Award. Affordable Housing
strategies have continued to be delivered at Carine Rise, Harrisdale and The Rivergums.
• Cedar Woods selection on Glenside, a strategic infill site just 3 kilometres from the Adelaide CBD, will include 1,000
medium to high density homes and includes 15% affordable housing.
• Cedar Woods selection as preferred proponent to purchase two precincts in Port Adelaide also includes the provision
of 15% affordable housing.
Heritage - recognising Indigenous and cultural heritage.
FY2016 Highlights and Achievements
• Cedar Woods has continued to respect Indigenous and European cultural heritage at all of its project sites.
Ethnographic and architectural research is undertaken for all projects to ensure that Indigenous and European
heritage is identified and managed appropriately. Glenside contains four heritage buildings which will be adaptively
reused for residential homes and/or services such as a café or childcare facility.
Stakeholder Engagement - maintain Cedar Woods’ position as a competent and trustworthy company and joint venture
partner and a valuable contributor to the property industry.
FY2016 Highlights and Achievements
• Engagement with our government stakeholders is guided by targeted relationship engagement and communication
plans which are developed for each project and updated annually.
• Cedar Woods is a trusted joint venture partner with each of the Western Australian State land development agencies
through the following projects: Carine Rise (LandCorp); Mangles Bay Marina (LandCorp); Harrisdale Green (Housing
Authority); Elements, South Hedland (Dept of Lands) and Western Edge, South Hedland (LandCorp).
• Cedar Woods has maintained its membership with key industry associations, including the Urban Development
Institute of Australia, Property Council Australia and Housing Institute Australia. Company staff participate on many
industry committees.
• Project operations with industry consultants and contractors involve day to day communications and attendance at
project and operational meetings. Consultant and contractor performance assessments are carried out bi-annually.
• Cedar Woods continues to acknowledge the importance of adopting a proactive approach to community
engagement which often provides opportunities to mitigate and address community concerns. Active engagement
strategies were undertaken for planning at Glenside, Ellendale, Bushmead and The Rivergums with the
advancement of planning approvals.
Community Investment, Development and Integration - create vibrant communities by investing in their wellbeing,
nurturing a strong ‘sense of community’ and maximising social connectivity.
FY2016 Highlights and Achievements
• Cedar Woods continued its sponsorship of the Perth International Arts Festival with an annual investment of
$30,000. This sponsorship not only allows The Festival to deliver world-class performances to the people of
Western Australia, it also provides Cedar Woods valuable opportunity to share the enriching experience of the
various performances with investors, key stakeholders and amongst staff.
• The Cedar Woods Neighbourhood Cinema tradition also continued in FY2016. WA estates at The Brook at Byford
/ Byford on the Scarp, Piara Central, Harrisdale Green and The Rivergums enjoyed family and neighbours coming
together. The movie events were well attended and feedback was very positive. They will continue across all major
WA estates in FY2017.
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• Cedar Woods is committed to creating vibrant sustainable urban communities. Part of this vision includes the
support of new emerging and existing community groups. At the project level, Cedar Woods has continued its
Community Grants program at Byford on the Scarp, The Brook at Byford, Piara Central, Harrisdale Green, The
Rivergums and Williams Landing. Over $23,000 of grants were awarded in FY2016. The total contribution to date
has benefitted over 100 community groups which provide local services.
•
In an effort to foster a vibrant business community in the Wyndham region and Williams Landing, Cedar Woods is
continuing its major sponsorship of the Wyndham Business Awards.
• Other local project based events extended across Ariella, The Brook at Byford, The Rivergums and Mariners Cove,
with a community investment of over $70,000.
Occupational Health & Safety - providing a safe working environment for staff and stakeholders.
FY2016 Highlights and Achievements
• Early in FY2016 Cedar Woods adopted a new Work Health & Safety System (WHS) in order to prepare for the
introduction of the Model Work Health and Safety Act as it is enacted across Australia to harmonise workplace
Health and Safety law.
• Management and staff have undertaken extensive training on the new requirements and procedures that have been
adopted. In addition consultants and contractors working for the company on construction projects have all been
briefed on the new policy and the requirements that follow as they relate to contractors and consultants.
• Cedar Woods’ contractors are required to prepare OH&S plans for construction projects prior to commencement
of works which are audited by independent third party assessors. A further audit is carried during the construction
works. Contractors are required to report to Cedar Woods on performance of WHS matters on a regular basis
during the contracted works. Contractors are assessed on their performance on WHS matters as part of any future
award of contracts.
• There has not been any WHS incidents of a significant nature on any Cedar Woods construction sites during
FY2016.
• The WHS system is being further developed and enhanced to improve the management of construction sites by
Cedar Woods contractors and consultants.
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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 2016.
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
Valerie Anne Davies (appointed on 21 September 2015)
Paul Stephen Sadleir (Managing Director)
Timothy Robert Brown (Alternate for R S Brown)
The qualifications, experience and other details of the directors in office at the date of this report appear on page 24 of
this report.
b) Principal activities
The principal continuing activities of the consolidated entity in the course of the year ended 30 June 2016 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 2015 of 16.0 cents
(2014 - 15.5 cents) per fully paid share, paid on 30 October 2015 (2014 – 31
October 2014)
Interim fully franked ordinary dividend for the year ended 30 June 2016 of 12 cents
(2015 – 12.0 cents) per fully paid share, paid on 29 April 2016 (2015 – 30 April 2015)
2016
$’000
2015
$’000
12,622
12,142
9,467
22,089
9,248
21,390
Since the end of the financial year the directors have recommended the payment of a final fully franked ordinary dividend
of $13,017,127 (16.5 cents per share) to be paid on 28 October 2016 out of retained earnings at 30 June 2016.
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 8 of this annual report.
e) Business strategies and prospects for future financial years
The consolidated entity will continue property development operations in Western Australia, Victoria and Queensland
and expects to commence property development operations in South Australia.
Subject to market conditions continuing at current levels, the group anticipates that it is well placed to maintain profit
momentum into FY2017, with a similar profit result to that achieved in FY2016, underpinned by a significant bank of
presales already in place at the date of this report.
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f) Significant changes in the state of affairs
There were no significant changes in the state of affairs of the consolidated entity during the year.
g) Matters subsequent to the end of the financial year
On 12 July 2016 Cedar Woods announced that the South Australian Government approved the conditional purchase of
a 16.5ha site in Glenside, Adelaide for a price of $25.8m plus GST. The Glenside site is located 3 kilometres south east
of Adelaide CBD and adjacent to over 700 hectares of parkland which surrounds the city. Settlement of the purchase
will occur upon finalisation of the rezoning, which is expected to occur mid FY2017. The site will accommodate
approximately 1000 dwellings.
The company was also selected as preferred developer by the State Government for a 12.6ha site at Port Adelaide
(Port Adelaide). The site will accommodate about 500 homes with the majority being 2 to 3 storey townhouses. The
State Government (Renewal SA) and Cedar Woods will work together over the next six months to develop a master
plan in consultation with the community. The State Government will then determine whether to accept Cedar Woods’
proposal.
Other than the above, no matters or circumstances have arisen since 30 June 2016 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
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-six 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 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-eight 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 the lead independent director of the Board, bringing 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 ten 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
• Member of the Human Resources and Remuneration Committee
• Member of the Nominations Committee
Mr Pearce is currently the Chief Financial Officer and Executive Director of the Board of Fortescue Metals Group Limited and
Non-executive Chairman of The Lions Eye Institute. He has 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 a Fellow of the Institute of Chartered Accountants, a Member of the Governance
Institute of Australia and the Australian Institute of Company Directors. Mr Pearce has served as a director for 2 years.
Other current listed company directorships and former listed company directorships in the last three years:
Fortescue Metals Group Limited (effective from 21 June 2016).
Ms Valerie A Davies, FAICD
• Non-executive director
• Member of the Audit and Risk Management Committee
Ms Davies is an experienced company director and leading communications advisor to numerous Tier 1 companies.
Via her own consultancy, One.2.One Communications Pty Ltd, she has worked for nearly two decades on issues
management and presentation skills delivery with senior corporate leaders across the spectrum of business and industry,
at all levels of government, as well as sport. She is a previous winner of the Telstra Business Woman of the Year (WA)
Award. Concurrently, Ms Davies has over the past 20 years established herself as one of Western Australia’s leading non-
executive directors. She serves on the boards of major entertainment, hospitality and leisure operator Event Hospitality &
Entertainment Ltd as well as the HBF Health Fund and Tourism Western Australia. Previous non-executive director roles
include global mineral sands resources company, Iluka Resources Limited and labour hire firm Integrated Group (now
Programmed Maintenance Services). She has also held positions on the boards of government trading enterprises such
as Tourism Australia, Gold Corporation and the TAB (WA), as well as Screenwest and Fremantle Hospital & Health Service.
Beyond Ms Davies’ day to day work, she has contributed to peak business groups such as the Australian Institute of
Company Directors (AICD), where she was a Councillor and co-Vice President of the WA branch. Ms Davies is a non-
executive, independent Director. Ms Davies was appointed on 21 September 2015.
Other current listed company directorships and former listed company directorships in the last three years:
Event Hospitality & Entertainment Ltd.
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
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Power and Barrack Mines. He is currently a Board member of the Brightwater 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. Mr Sadleir has served as a director for thirteen years.
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 over twenty years in financial management in the property
industry, preceded by employment in senior roles with major accountancy firms.
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
Valerie A Davies
Paul S Sadleir
Timothy R Brown*
Interest in ordinary shares
10,064,952
7,982,584
167,859
20,000
15,000
1,057,445
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)
V A Davies
S T Pearce
R S Brown
S T Pearce
R S Brown
S T Pearce
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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 2016, 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
V A Davies
P S Sadleir
T Brown (alternate director)
* Not a member of this committee.
10
9
10
10
10
† 7
10
-
4
*
3
4
4
† 1
*
-
4
*
4
4
3
*
*
-
3
*
3
3
3
*
*
-
† V A Davies was appointed to the Board on 21 September 2015 and has attended 7 of the 8 Board meetings held
after this date. V A Davies was appointed to the Audit and Risk Management Committee on 1 December 2015 and has
attended all meetings held after this date.
R S Brown was a member of the Audit and Risk Management Committee until 1 December 2015.
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Directors’ Report:
Chairman of the Human Resources and
Remuneration Committee’s Letter to Shareholders
Dear Shareholders,
I am pleased to provide this letter setting out the key highlights in relation to remuneration matters for FY2016. As outlined
in the Financial & Operating Review, Cedar Woods had another successful year, reporting a record profit and achievements
across the various areas within the company’s operations, as described in our “balanced scorecard” in section r) of this
report. The balanced scorecard provides the company’s FY2016 objectives and performance against targets as assessed
by the Board.
In my letter last year, I noted shareholders and proxy advisory groups had sought greater transparency and enhanced
structures around the short and long term incentive arrangements for executives. The Board then engaged Ernst & Young
(EY) to provide advice as outlined in the table below.
Review of the
executive remuneration
framework
Fixed remuneration
Last year the company engaged EY to provide advice on Cedar Woods’ executive
remuneration framework with the objective of improving the link between shareholder
returns and executive remuneration as well as a closer alignment of remuneration with the
Corporate strategy. Aspects of the new executive remuneration framework applied from 1
July 2015 including transitioning to a greater emphasis on variable pay with the introduction
of a new long-term incentive program (as outlined below).
The company identified where adjustments were appropriate, based on market
benchmarking information. For FY2016 the Managing Director’s (MD’s) fixed remuneration
remained unchanged and other executives’ fixed remuneration increases were between 2%
& 3%, reflecting sustained high performance of the individuals and alignment with market
remuneration levels in both listed and non-listed property companies.
Short-term incentives
(“STIs”)
To ensure the STI’s were appropriately aligned to the Corporate plan, the company
continued with its balanced scorecard of measures for determining the STI awards for
FY2016.
Long-term incentives
(“LTIs”)
Consistent with the intention stated in the FY2014 Remuneration Report, the former LTI plan
has been reviewed and replaced by a new LTI plan effective from 1 July 2015 for FY2016
and which will continue in FY2017.
The new LTI plan has two vesting conditions a) a 3 year service condition and b) two
performance conditions measured over a 3 year period: 50 percent of the LTI grant will be
tested against a relative total shareholder return (“TSR”) hurdle (measured against the S&P
/ ASX Small Industrials Index) and 50 per cent against earnings per share (“EPS”) growth
targets, set in the context of the Corporate plan.
The relative TSR performance condition was chosen as it offers a relevant indicator
of measuring changes in shareholder value by comparing the company’s return to
shareholders against the returns of companies of a similar size and investment profile.
The EPS performance condition was chosen as it is a primary determinant of shareholder
value in a listed company context.
The potential maximum aggregate Non Executive Director remuneration for FY2016 was
$750,000, as approved by shareholders at the company’s FY2014 AGM. Chair and NED
fees were increased by 2% effective 1 July 2015 to maintain market competitiveness. Total
NED fees paid for FY2016 were $544,502.
NED fees
CEDAR WOODS PROPERTIES LIMITED
Clawback policy
The company implemented an incentive clawback policy for executives and other staff that
applies for FY2015 onwards. Under the policy, the Board may at its absolute discretion
claw back vested and unvested incentives in the case where an “inappropriate benefit” has
arisen, as may be the case in a material mis-statement of financial results.
The Remuneration Report provides information on Non Executive Directors and executives and the remuneration outcomes
for FY2016.
It was pleasing to note that shareholders voted overwhelmingly in favour of the FY2015 Remuneration Report at the 2015
Annual General Meeting, with 97.7 per cent of votes in favour. I look forward to answering any questions you may have at
our 2016 Annual General Meeting in November.
Yours faithfully,
Ronald Packer
Chairman of the Human Resources and Remuneration Committee
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Directors’ Report:
Remuneration Report
The directors present Cedar Woods Properties Limited’s FY2016 Remuneration Report which sets out remuneration
information for the directors and other key management personnel (“KMP”) for the year ended 30 June 2016.
The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations
Act 2001.
The Remuneration Report is presented under the following sections:
o)
p)
q)
r)
s)
t)
Introduction
Remuneration governance
Executive remuneration policy and framework
Executive remuneration outcomes for FY2016 (including link to performance)
Executive contracts
Non-Executive Director fee arrangements
u)
Additional statutory disclosures
o) Introduction
Page
30
31
32
37
42
43
44
The Remuneration Report details the remuneration arrangements for KMP who are defined as those persons having
authority and responsibility for planning, directing and controlling the major activities of the company, directly or
indirectly.
The table below outlines the KMP of the company during the financial year ended 30 June 2016. Unless otherwise
indicated, the individuals were KMP for the entire financial year. For the purposes of this report, the term “executive”
includes the executive director and senior executives of the company.
KMP
Position
Term as KMP
Non-Executive directors (“NEDs”)
W G Hames
R S Brown
R Packer
S T Pearce
V A Davies
Executive directors
P S Sadleir
Senior executives
N Blackburne
P Freedman
B Rosser
Non-Executive Chair
Non-Executive Deputy Chair
Lead Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
(appointed to the board on 21 September 2015)
Full year
Full year
Full year
Full year
Part year
Managing Director (“MD”)
Full year
State Manager - Victoria and Queensland
Full year
Chief Financial Officer (“CFO”) and Company Secretary
Full year
State Manager - Western Australia (commenced
employment with the company on 20 July 2015)
Part year
There were no changes to KMP after the reporting date and before the date the financial report was authorised for
issue.
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p) Remuneration governance
Role of the Human Resources and Remuneration Committee
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,
NED fees,
operation of incentive plans and key performance hurdles for the executive team, and
remuneration levels of the MD and other executives.
The Human Resources and Remuneration Committee’s objective is to ensure 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 NED fees and executive remuneration
packages are appropriate and in line with the market, please refer to the Use of remuneration advisors section below.
The Corporate Governance Statement provides further information on the role of the Human Resource and
Remuneration Committee, and may be found on the company’s website under the Investor Relations link.
Use of remuneration advisors
In FY2015 the Human Resources and Remuneration Committee appointed EY as its external remuneration advisor to
assist with the review of the overall executive remuneration framework.
EY’s terms of engagement include specific measures designed to protect its independence. The Human Resources and
Remuneration Committee recognises that, to effectively perform its role, it is necessary for EY to interact with members
of Cedar Woods’ management. However, to ensure EY remains independent, members of Cedar Woods’ management
are precluded from requesting services that would be considered to be a ‘remuneration recommendation’ as defined by
the Corporations Amendment (improving Accountability on Director and Executive Remuneration) Act 2011.
During the year ended 30 June 2016, EY provided the Human Resources and Remuneration Committee with:
• guidance in the review and design of the executive remuneration framework; and
• assistance in drafting of remuneration report disclosures.
No remuneration recommendations were provided by EY or any other advisor during the reporting period.
Clawback of remuneration
For FY2015 and subsequent years, vested and unvested STI’s & LTI’s are subject to potential clawback based on the
Board’s judgment.
The Board may exercise its judgment in relation to STI or LTI outcomes:
STI
LTI
at the end of the financial year when assessing performance against scorecard objectives to determine the STI
payments, when determining if there are any matters impacting the initial performance assessment.
at any time prior to, or at, the final vesting date of the performance rights and will take account of factors such
as any material misstatements of financial results or individual instances of non-compliance with Cedar Woods’
policies.
The clawback policy also provides that the Board can recover an STI or LTI award previously paid to an employee.
Remuneration Report approval at FY2015 Annual General Meeting (“AGM”)
At the company’s 2015 AGM, 97.7 per cent of eligible votes cast were in favour of the Remuneration Report for
FY2015. The company received one question at the AGM when the resolution concerning the Remuneration Report
was considered by shareholders. The question related to the weightings applied to components of the company’s
business model for assessing executive responsibilities and the structuring of the STI and LTI components of the
remuneration framework. Cognisant of these comments the Board has reviewed and changed some of the weightings
applied to the components of the company’s business model in the table on page 34 and will consider the other
comments on structuring going forward.
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q) Executive remuneration policy and framework
The information contained within this section outlines the details pertaining to the executive remuneration policy and
framework for FY2016. As noted, following a review of the executive remuneration program last year, changes have
been initiated and applied from 1 July 2015. Where relevant, these changes have been highlighted.
i. Principles and strategy
Company objective
To create long-term value for shareholders through
the disciplined acquisition, development and marketing of properties
Remuneration strategy linkages to company objective
The Board of directors ensures our approach to
executive reward satisfies the following key criteria for
good reward governance practices:
Attract, motivate and retain high performing
individuals:
• The remuneration offering rewards capability and
• Competitiveness and reasonableness
experience
• Acceptability to shareholders
• Reflects competitive reward for contribution to
• Alignment of executive remuneration to company
growth in shareholder wealth
performance
• Transparency of the link between performance
and reward
The framework is aligned to shareholders’ interests by
having:
• STIs linked to current year performance and
subject to clawback
• From 1 July 2015 - LTIs linked to both long term
external (relative total shareholder return (“TSR”))
and internal (earnings per share (“EPS”) growth)
performance. Unvested LTIs also subject to
clawback
Component
Vehicle
Purpose
Link to performance
Fixed
remuneration
Comprises base
salary, superannuation
and non-monetary
benefits
STIs
Paid in cash
LTIs
From 1 July 2015 –
new equity based LTI
grants awarded in
Performance Rights
)
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To provide
competitive fixed
remuneration set with
reference to role,
market and skills
and experience of
individuals
Rewards executives
for their contribution
to achievement of
company outcomes
Rewards executives
for their contribution
to the creation of
shareholder value
over the longer term
Group and individual performance are
considered during the annual remuneration
review process
No guaranteed fixed remuneration
increases included in executives’ contracts
Linked to the Corporate Plan and
achievement of personal objectives
established at the start of the year
From 1 July 2015 - Vesting of new grants
is dependent on TSR performance relative
to S&P / ASX Small Industrials Index and
annual compound growth rate in EPS, both
over a three year period
Performance related outcomes are determined each year following the audit of the annual results. Outcomes may be
adjusted up or down in line with over and under achievement against the target performance levels, at the discretion of
the Board (based on a recommendation from 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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ii. Approach to setting remuneration
In FY2016, the executive remuneration framework consisted of fixed remuneration and short and long-term incentives
as outlined below.
The company aims to reward executives with a level and mix of remuneration appropriate to their position,
responsibilities and performance within the organisation and aligned with market practice.
The company’s approach is generally to position Total Remuneration between the median and upper quartile of our
direct industry peers, both listed and unlisted, and other Australian listed companies of a similar size and complexity.
Based on performance and experience, individuals have the potential to move from median to upper quartile over a
period of time.
Remuneration levels are reviewed annually through a process that considers market data, insights into remuneration
trends, the performance of the company and the individual, and the broader economic environment.
The “at risk” components (STI’s and LTI’s) ensure a proportion of remuneration varies with performance of both the
individual and the company. The 2015 review of executive remuneration identified a need for a greater weighting of “at
risk” components within the total remuneration opportunity (remuneration mix) particularly for the MD and a need for an
equity based LTI plan. The Board intends continuing the transitioning to the new remuneration mix over the next two
financial years, noting some variations may occur during this time due to influencing factors such as changing market
conditions. In making this transition, the Board wishes to keep total remuneration increases at modest levels, with the
majority of increases directed into LTI’s.
The graph below illustrates the current (FY2016) and anticipated remuneration mix by FY2018.
Managing Director - remuneration mix
FY15
Current
By FY18
63%
60%
35%
32%
2%
8%
50%
25%
25%
State Managers - remuneration mix
FY15
Current
By FY18
69%
68%
67%
CFO and Company Secretary – remuneration mix
FY15
Current
By FY18
78%
77%
75%
19%
19%
20%
12%
13%
13%
15%
15%
7%
8%
15%
10%
STI and LTI are based on the maximum opportunity when remuneration levels are determined by the HR&R committee.
Fixed remuneration
Max STI opportunity
Max LTI opportunity
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iii. Details of incentive plans
Short-term incentives (STI)
Who participates?
Executives
How is the STI delivered?
Cash
What is the STI opportunity?
Each executive has a target STI opportunity depending on the accountabilities
of the role and impact on organisational performance. The company seeks to
deliver steady annual growth and accordingly the maximum STI opportunity is the
target opportunity. The maximum STI opportunity for KMP’s is detailed in section r)
Executive remuneration outcomes.
What are the performance
conditions for FY2016?
Actual STI payments to each executive depend on the extent to which specific
targets set at the beginning of the financial year are met with regard to both company
and individual performance criteria.
The weightings that applied in FY2016 to components of the company’s business
model are set out in the table below:
Business development
Developments
Sales and customer experience
Financial performance and risk
management
People and culture
Shareholder engagement and
satisfaction
Sustainability
Weighting (%)
State
Managers
CFO and
Company
Secretary
15%
20%
20%
15%
20%
5%
5%
15%
0%
5%
40%
20%
20%
0%
MD
15%
20%
20%
20%
10%
10%
5%
Refer to section r) Executive remuneration outcomes for further details of
performance outcomes for FY2016, and STI awards to KMP.
The categories of “Developments” and “Sales and customer experience” involve
close monitoring of revenues and financial expenditure and together with “Financial
performance and risk management” provide a significant weighting to overall financial
performance.
On an annual basis, after consideration of performance against set balanced scorecard
objectives, the Chairman and Chair of the Human Resource and Remuneration
Committee recommends to the Board the amount of STI to be paid to the MD.
For senior executives, the Human Resource and Remuneration Committee will seek
recommendations from the MD before making its determination.
The Human Resources and Remuneration Committee has the discretion to determine
STI outcomes in the light of personal and company performance.
How is performance
assessed?
What happens if an Executive
leaves Cedar Woods?
Executives who leave prior to the end of the financial year generally forego their
entitlement. The Human Resources and Remuneration Committee has discretion in
this regard.
Long-term incentives (LTI)
FY2015 LTI plan
The company operated a long term incentive plan, which first commenced in FY2012 with the final grants made
in FY2015. The incentive was 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 company for
the remaining two years. The FY2015 LTI awards were based on the same criteria used for FY2015 STI awards, with
KMP amounts detailed in section r) Executive remuneration outcomes.
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If the employee left the company before the vesting date no bonus was paid, although the Board may waive this
restriction at its discretion, for example when an employee retires. If an employee was made redundant after the award
but before the vesting date then the bonus would be paid out.
In FY2015 a total of $447,000 was awarded under the incentive plan for participants, which will vest on 1 July 2017.
The total awarded under the plan in previous years which has vested on 1 July 2016 is $260,750.
New LTI plan effective 1 July 2015
The company has introduced a new LTI plan, effective 1 July 2015. Key features of the new LTI plan are as follows:
Why have a new LTI plan?
To encourage a greater alignment of the interests of executives and shareholders,
focus on sustainable long term growth and attract and retain key executives.
Who participates?
Executives and key staff. NEDs are not eligible to participate in the LTI plan.
What LTI’s are available?
How is the LTI delivered?
How are the number of rights
determined for each LTI
grant?
When does the LTI vest?
Each executive has a maximum LTI opportunity depending on the accountabilities
of the role and impact on organisational performance.
It is intended for annual grants to be made under the plan and over time for these to
become a larger proportion of total remuneration, so as to keep total remuneration
in check.
The maximum LTI for each KMP is detailed in section r) Executive remuneration
outcomes.
Awards under the LTI plan are made in the form of performance rights, which
provide, when vested, one share at nil cost (provided the specified performance
hurdle is met). No dividends are paid on unvested LTI awards. A new share will be
issued for each vested performance right.
The number of performance rights allocated for each executive is calculated by
reference to the maximum LTI opportunity outlined in the prior section.
Allocations are made based on a face value approach using the Volume Weighted
Average Price of Cedar Woods’ shares over the first five trading days of the 2016
financial year. This fixes the maximum number of shares and the actual number will
vest in accordance with the performance conditions set out below.
The Board will determine the outcomes at the end of the three year performance
period (1 July 2015 to 31 August 2018), with vesting, if any, occurring once results
are released and within a trading window. Once vested, there are no restrictions on
trading the shares, subject to the company’s Securities Trading Policy.
What happens if an Executive
leaves Cedar Woods?
If cessation of employment occurs, the following treatment will apply in respect of
unvested Shares:
• If the Participant ceases employment with Cedar Woods on resignation or on
termination for cause, unvested Rights will normally be forfeited.
• If the Participant ceases employment in other circumstances (for example,
due to illness, total or permanent disablement, retirement, redundancy or
other circumstances determined by the Board), unvested Shares will stay ‘on
foot’ and may vest at the end of the original performance period to the extent
performance conditions are met. The Board may determine in its discretion that
the number of Rights available to vest will be reduced pro-rata for time at the
date employment ceases.
The Board will retain discretion to allow for accelerated vesting (pro-rated for
performance and/or time) in special circumstances (as opposed to allowing
unvested Shares to remain ‘on foot’ on cessation of employment).
Unless the Board determines otherwise, a pro-rata number of the participant’s
unvested awards will vest based on the proportion of the performance period that
has passed at the time of the change of control. Vesting will also be subject to
the achievement of pro-rata performance conditions at the time of the change of
control.
Not prior to any vesting.
No, there are no further retests of the performance conditions.
What happens in the event of
change of control
Do participants receive
dividends on LTI grants?
Is performance retested if
performance hurdles are not
exceeded?
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Do clawback provisions apply
to LTI’s?
The company has an incentive claw back policy in place for executives and other
staff. Under the policy, the Board may at its absolute discretion claw back vested
and unvested incentives in the case of an “inappropriate benefit” arising.
How is performance assessed
and rewarded against these
hurdles?
The awards are subject to two equally weighted performance conditions which
operate independently, so that awards can be made under either or both
categories.
Relative TSR hurdle (50%): The relative TSR hurdle provides a comparison
of external performance. The ASX Small Industrials Index is comprised of the
companies included in the S&P/ASX 300 (excluding companies in the S&P/ASX
100) who have a Global Industry Classification Standard (GICS) classification other
than Energy or Metals & Mining, with Cedar Woods ranked approximately 130th of
168 companies in this index at present. TSR (Total Shareholder Return) measures
changes to share price and dividends paid to show the total return and is widely
used in the investment community.
Executives will only derive value from this component of the LTI if the company’s
TSR performance is greater than the Index. Maximum vesting of the TSR hurdle at
or above 15% of the Index recognises significant out-performance of the company
over 3 years.
The vesting schedule is as follows:
Relative TSR performance outcome
Percentage of TSR-tested rights vesting
< Index
At the Index
Nil
50%
> Index and up to 15% above the Index
Pro-rata between 50% and 100%
> = 15% above the Index
100%
EPS compound annual growth rate (50%): EPS is a method of calculating the
performance of an organisation, capturing information regarding an organisation’s
earnings in proportion to the total number of shares issued by the organisation. The
EPS calculation is:
EPS =
Statutory net profit after tax
Weighted number of shares on issue
Where:
Statutory net profit after tax:
Weighted number of shares on issue:
as reported by a company at the most
recent financial-year end preceding the
calculation date.
The weighted number of shares on issue
for the financial year.
The relevant inputs when setting the EPS target range are generally:
• The earnings and EPS targets contained in the Corporate plan, particularly with
reference to the most recent internal five year forecasts;
• The level of stretch associated with those business plan targets;
• Any earnings guidance that has been provided to the market;
• Shareholder and analyst (individual and consensus) expectations.
The vesting schedule for this component of the LTI is as follows:
EPS compound annual growth rate
Percentage of EPS-tested rights
vesting
<5%
5%
Nil
50%
Between 5% - 10%
Pro-rata between 50% and 100%
> = 10%
100%
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r) Executive remuneration outcomes for FY2016 (including link to performance)
Performance against STI balanced scorecard objectives
The table below outlines FY2016 STI objectives and performance against target outcomes as assessed by the Board.
This performance measurement framework provides a close alignment to the company’s overriding objective of providing
long term value to shareholders and links to our business model as described on page 7.
Objective
Measures
Outcomes
Business development
To build and replenish
the portfolio by
acquiring quality
assets
Undertake due diligence
investigations for new acquisitions
consistent with approved checklist
and reporting measures in a
thorough and disciplined manner
Acquire 1-2 new complementary
projects each year, consistent with
the corporate growth strategy
Pursue joint venture
opportunities
Respond to existing joint venture
partners with professionalism,
transparency and quality outcomes
Detailed assessment of numerous
properties in VIC and QLD and to
a lesser extent WA and SA. The
acquisitions environment continues
to be highly competitive in VIC but
less so in other states.
Four projects were secured -
Wooloowin, QLD and North Baldivis,
WA
Glenside SA (‘preferred’ status), Port
Adelaide SA (‘preferred’ status)
Existing joint ventures (or
development agreements) in WA
with LandCorp (Mangles Bay &
Western Edge) and Dept. of Housing
(Harrisdale)
Seek new joint venture opportunities
to add to project diversity and
corporate reputation
No new joint ventures initiated
but opportunities continue to be
evaluated on various projects
Residential and
commercial building
Establish strategic alliances to
add value, product diversity and
profitability
Builder alliances operating in both
WA and VIC across a number of
estates
Developments
Maximise value,
minimize risk with
project delivery on
time and on budget
Timely approvals achieved
Enhanced value of sites
Monthly reporting of actual vs
budget development costs and
program
Compliance with Corporate
Sustainability Policy
Innovation and quality in projects
Create quality
communities which
embrace innovation
and sustainable
development
Approvals generally received in line
with programs for mature projects
but delays experienced with
approvals for the Jackson Green &
St Albans projects. Servicing delays
have occurred on a small number of
projects.
Approvals generally received in
line with highest and best use
applications. At the Ellendale project
approval was received for residential
use over one third of the site with the
application on the remaining part of
the land ongoing.
Costs generally kept well within
budget. Delayed expenditure at
several projects was a result of
project approvals behind schedule.
Good environmental initiatives
achieved across the projects. The
2015 Russel Perry Award for Urban
Development Excellence was
presented by the Urban Development
Institute of Australia to Cedar Woods
for the Elements Estate in Western
Australia. This is the most prestigious
recognition that is awarded by UDIA
in Western Australia.
Performance
assessment
Achieved
Achieved
Achieved
Not achieved
Achieved
Partly
achieved
Achieved
Partially
achieved
Achieved
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Objective
Measures
Outcomes
Sales and customer experience
Position projects to
meet market and
customer demand
Settlements
Sales
Enquiry & conversion rates
Budget expenditure
Pricing
Customer satisfaction
Settlements achieved to meet
company forecast
Budgeted sales not achieved,
primarily due to weakness in WA
market
Enquiry achieved target in VIC
and QLD but not in WA. Enquiry
conversion was satisfactory
Expenditure was controlled and
lower than budget due to delays in
launching new projects
Pricing generally at budget levels in
Victoria but marginally below budget
in WA
Good levels of referral and low
incidence of complaints
Performance
assessment
Achieved
Not achieved
Partially
achieved
Partially
achieved
Partially
achieved
Achieved
Financial performance and risk management
Continued growth in a
risk controlled manner
Growth in NPAT and EPS
NPAT up 2.4% and EPS up 1.8%,
below EPS target
Not achieved
Satisfactory ROE and ROC
Conservative gearing (debt/equity)
Capital management
ROE 14.2% and ROC 18.3%, both
above company benchmarks
Gearing 16.4%, below target range
but conservative
Maintained capital availability on
satisfactory terms to remain well
positioned for potential acquisitions
Achieved
Achieved
Achieved
Risk management framework in place Risks identified and mitigated
Achieved
People and culture
Attract, motivate and
retain staff
Be a preferred employer
Experienced and qualified staff were
attracted to the business
Partly
Achieved
Succession planning & leadership
training
Staff productivity
Staff development
Progressive HR policies were
introduced:
- Employee referral policy,
- Employee service recognition
policy
A number of staff received
promotions during the year.
Leadership programs were
undertaken by selected managers
and are programmed for other staff.
An executive manager undertook the
Advanced Management Course at
Harvard University.
Cost levels were consistent with
the budget and corporate plan.
Performance management was
undertaken.
Numerous group and individual
training programs undertaken
including management and
leadership courses, on the job
training and attendance of industry
events.
Achieved
Achieved
Achieved
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Objective
Measures
Outcomes
Performance
assessment
Shareholder engagement and satisfaction
Shareholders support
the company
Participation in share issues
No share issues and dividend
reinvestment plan and bonus share
plans suspended
N/A
Company investor relations program Positive feedback including from
Achieved
Total shareholder return (TSR)
Support for board resolutions
survey of institutional investors and
brokers
TSR for 1 and 3 years unsatisfactory.
Five year return satisfactory (CWP
9.5% - compared to Small industrials
index 9.2%)
Board resolutions supported by
shareholders at 2015 AGM
Proxy advisors support board
resolutions
Proxy advisor firms supported all
resolutions at 2015 AGM
Enhance and rehabilitate
environmental assets and rehabilitate
contamination as an integral part of
project delivery
Environmental assessment and
statutory approvals achieved
(Commonwealth, State and Local)
across all projects
Promote total water cycle
management and efficient water use
Promote energy efficiency and use of
renewables
Deliver the best use of land by
optimising land use mix and
densities in the context of high
quality urban places that deliver safe
and healthy lifestyles
Urban water management strategies
and plans prepared and at various
stages of implementation across all
projects
Sustainable Living Guide applied
to new Perth Projects. Solar panel
rebates offered at Harrisdale
All projects addressing statutory land
use and housing density targets
Achieved
Partially
achieved
Achieved
Achieved
Achieved
Achieved
Achieved
Sustainability
Environment &
Climate Change;
Optimising Land Use;
Housing Diversity
& Affordability;
Heritage; Stakeholder
Engagement;
Community
Investment,
Development &
Integration
Promote equality of access to
housing for all sectors of the
community through diversity of
product and embracing opportunities
to assist those disadvantaged by the
market
Housing diversity initiatives continue.
Specific affordable housing
strategies implemented across
all Perth projects. Cedar Woods
won the 2015 UDIA WA Affordable
Housing excellence award.
Recognising indigenous and cultural
heritage
Engage with key stakeholders
throughout project delivery
Create vibrant communities by
investing in their wellbeing, nurturing
a strong ‘sense of community’ and
maximizing social connectivity
Heritage assessments undertaken
throughout for all projects. Heritage
values recognised through project
themes and street names.
For all projects, key stakeholders are
identified during project planning,
leading to the preparation of
Communication Strategies to guide
effective engagement throughout
project delivery
Preparation and implementation
of sponsorship strategies at both
corporate and project levels.
Successful implementation of the
project Fun Days and Movie Nights
and neighbourhood grants program
Achieved
Achieved
Achieved
Achieved
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The following table outlines the proportion of maximum STI earned and forfeited in relation to FY2016 and the maximum
STI that was available.
Proportion of maximum STI
earned in FY2016
Proportion of maximum STI
forfeited in FY2016
MD
State
Manager
VIC &
QLD
State
Manager
WA
CFO and
Company
Secretary
MD
State
Manager
VIC &
QLD
State
Manager
WA
CFO and
Company
Secretary
82%
80%
73%
82%
18%
20%
27%
18%
$328,000
$88,000
$54,750
$57,400
$72,000
$22,000
$20,250
$12,600
$400,000
$110,000
$75,000
$70,000
Total %
Total $
Max STI
opportunity
Performance against LTI objectives
The company introduced a new equity based LTI scheme in FY2016. The plan has two vesting conditions a) a 3 year
service condition and b) two performance conditions measured over a 3 year period: 50 percent of the LTI grant will be
tested against a relative total shareholder return (“TSR”) hurdle (measured against the S&P / ASX Small Industrials Index)
and 50 per cent against earnings per share (“EPS”) growth compared with the Corporate plan targets.
The relative TSR performance condition was chosen as it offers a relevant indicator of measuring changes in
shareholder value by comparing the company’s return to shareholders against the returns of companies of a similar size
and investment profile.
The EPS performance condition was chosen as it is a primary determinant of shareholder value in a listed company
context.
The following table outlines the proportion of maximum LTI that were granted to KMP during FY2016.
LTI awards in FY2016
MD
State Manager
VIC & QLD
CFO and
Company
Secretary
State Manager
WA
Value granted (max LTI opportunity)
$100,000
$80,000
$40,000
$50,000
The LTI awards earned vest on 31 August 2018 subject to the two vesting conditions.
Terms and conditions of the share-based payment arrangements
The terms and conditions of each grant of rights affecting remuneration in the current or a future reporting period are as
follows:
Incentive Plan
Grant
date
Performance
period
Vesting
date
Value
at start of
performance
period
Performance
hurdle
Value
per share
right at grant
date
Performance
achieved
%
Vested
FY2016 –
Award 1
(Employees)
FY2016 –
Award 2
(MD)
28/08/2015
9/11/2015
1/7/15
to
30/6/18
1/7/15
to
30/6/18
31/08/2018
$5.33
EPS Growth
Relative TSR
$4.12
$2.04
to be
determined
31/08/2018
$5.33
EPS Growth
Relative TSR
$3.43
$0.96
to be
determined
n/a
n/a
The number of share rights granted to key management personnel under the LTI scheme during FY2016 is shown in
the table below. Rights granted will only vest upon satisfaction of the Performance Conditions which are measured
over the Performance Period. The number of rights granted has been determined by dividing the FY2016 LTI grant
opportunity by the market value of shares at the beginning of the performance period, which is the volume weighted
average price of the company’s shares over the first five trading days in FY2016 ($5.33). The market value of the shares
is not discounted.
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Upon vesting, each right is convertible into one fully paid ordinary share in the company. The executives do not receive
any dividends in relation to the rights during the vesting period. If an executive ceases employment before the rights
vest, the rights will normally be forfeited, except in limited circumstances that are approved by the board on a case-by-
case basis.
The fair value of the rights has been determined using the amount of the grant date fair value.
Reconciliation of share rights held by KMP
The following table shows how many share rights were granted, vested and forfeited during the year for KMP.
Name &
grant dates
Balance at
start of year
Number
Granted
during year
Number
Vested
Number
Vested
%
Forfeited
Number
Forfeited
%
Executive director
P S Sadleir
9 Nov 2015
Senior executives
N Blackburne
28 Aug 2015
P Freedman
28 Aug 2015
B Rosser
28 Aug 2015
-
-
-
-
18,762
15,009
7,505
9,381
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance at
end of year
(unvested)
Number
Maximum
value yet
to vest *
18,762
$41,182
15,009
$46,228
7,505
$23,115
9,381
$28,893
* The LTI awards earned vest on 31 August 2018 subject to the two vesting conditions. The maximum value of the
deferred shares yet to vest has been determined as the amount of the grant date fair value of the rights that is yet to be
expensed.
Performance of shareholder return metrics
In FY2016, the company delivered a record profit of $43.6 million, an increase of 2.4 per cent. This was the sixth
consecutive record profit for the company.
The returns to shareholders of Cedar Woods Properties Limited over the last 1, 3 and 5 years are detailed in the table
below:
Returns to shareholders over 1, 3 and 5 years (%)
EPS growth
Share price growth
Dividend growth (paid dividend)
CWP TSR (change in share price and dividends)
S&P Small Industrials Index (XSIAI)
1 year
1.8
(17.3)
1.8
(9.6)
12.8
3 years
3.5
(5.6)
3.8
1.0
11.5
5 years
3.8
1.7
8.1
9.5
9.2
The total shareholder return in FY2016 was -9.6 per cent which compared unfavourably with the S&P Small Industrials
Index total return of 12.8 per cent over the same period. However, the returns over 5 years compare favourably to the
returns of the S&P Small Industrials Index. Management is focussed on delivering consistent earnings per share and
dividend growth. The company’s share price is subject to market factors that are beyond the company’s control.
The measures of the company’s financial performance over the last five years as required by the Corporations Act 2001
are shown in the table below. However, these are not necessarily consistent with the measures used in determining
the variable amounts of remuneration awarded to KMP, the basis for which is outlined above. As a consequence, there
may not always be a direct correlation between the statutory key performance measures and the variable remuneration
awarded.
Profit for the year ($’000)
Basic earnings per share (cents)
Dividends per share (cents)
Increase (decrease) in share price (%)
2016
43,602
55.3
28.5
(17.3)
2015
42,585
54.3
28.0
(28.0)
2014
40,313
54.4
27.5
41.4
2013
36,337
49.9
26.0
45.2
2012
34,250
53.2
25.0
(11.0)
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Executive remuneration for the years ended 30 June 2016 and 30 June 2015
Details of the remuneration of each executive of Cedar Woods Properties Limited is set out below.
Short-term benefits
Post
Employ-
ment
Long-term benefits
Cash
salary
and fees
$
Cash
bonus
$
Non-
monetary
benefits
$
Super-
annuation
$
Cash
bonus
$
Share
based
payment #
$
Long-
service
leave
$
Termination
Benefit
$
Total
$
Perfor-
mance
related
%
Financial
year
Name
Executive director
P S Sadleir
2016
2015
762,383
328,000
765,393
387,000
9,434
7,990
33,699
-
9,423
13,375
33,699
21,500
-
13,338
Senior executives
N Blackburne
P Freedman
B Rosser *
S Duplock
Total
2016
2015
2016
2015
2016
2015
2016
2015
390,692
88,000
381,217
95,700
341,000
57,400
330,000
57,850
8,411
7,972
1,075
1,112
19,308
-
12,944
18,783
60,900
-
35,000
-
6,472
9,074
9,362
9,410
35,000
35,600
-
11,432
255,727
54,750
-
19,273
33,353
-
1,085
5,833
1,749,802 528,150
18,920
107,280
-
-
-
8,090
-
495
-
1,509,963 540,550
18,159
93,315
118,000
-
34,132
124,500 2,438,619
36,929
32,354
-
2,473,435
-
-
-
-
-
-
-
1,156,314
1,228,920
29%
33%
528,429
573,934
450,357
470,994
338,335
19%
27%
14%
20%
19%
124,500
164,771
-
* The company appointed Ben Rosser as the Western Australian State Manager on 20 July 2015. Stuart Duplock
ceased employment with the company on 14 August 2014.
# Equity-settled share-based payments relate to the component of the fair value of awards from the 2016 LTI scheme
attributable to the year measured in accordance with AASB 2 Share Based Payments. No awards vested in FY2016.
When determining the remuneration mix for executives, the human resources & remuneration committee used the
maximum STI and LTI opportunities contained in the tables on page 40, which differ from the amounts calculated in the
table above.
s) Executives contracts
Remuneration arrangements for executives are formalised in employment agreements. The following outlines the details
of these agreements.
Details of renegotiated executive service contract for the Managing Director
The Managing Director, Mr Sadleir is employed under an ongoing contract.
Mr Sadleir’s total remuneration package for FY2016 was as follows:
• Fixed remuneration of $800,000 per annum
• Maximum STI opportunity of 32% of total remuneration
• Maximum LTI opportunity of 8% of total remuneration.
Service agreements
Remuneration and other terms of employment for the executives are formalised in employment agreements. The
agreements for the executives provide for performance related cash bonuses and other benefits. The agreements are
reviewed annually by the Human Resources and Remuneration Committee for each KMP and details are as follows:
Executive director
P S Sadleir
Contract term
Notice required to
terminate contract
Termination benefit*
No fixed term
12 months
See below**
Other senior executives
No fixed term
Up to 3 months
Up to 3 months base salary
*For treatment of STI and LTI awards upon cessation of employment please refer to iii. Details of incentive plans section
of the Directors Report.
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**As well as allowing for participation (subject to shareholder approval) in the LTI Plan, Mr Sadleir’s contract has been
varied such that on termination by the company on ordinary notice or if he resigns following a material variation/
diminution in his role, responsibilities or status he will be entitled to be paid the maximum amount permitted under
section 200G of the Corporations Act. Taking into account Mr. Sadleir’s period of service, the maximum payment
under the Act would be the average annual base salary that Mr. Sadleir received from the company and related bodies
corporate during the previous 3 years.
t) Non-Executive Director (NED) fee arrangements
Determination of fees and maximum aggregate NED fee pool
On appointment to the Board, all NEDs enter into a service agreement with the company in the form of a letter of
appointment. The letter details the terms, including fees, relevant to the office of the NED. Fees and payments to NEDs
reflect the demands which are made on, and the responsibilities of the NEDs.
NEDs’ receive an additional fee for chairing committees (no additional fees are paid for committee membership). No
additional fees are paid for memberships of directors on subsidiary Boards. NEDs’ fees and payments are reviewed
from time to time by the Board, taking into account comparable roles and market data. NEDs do not receive
performance based remuneration.
Remuneration of NEDs is determined by the Board, after receiving recommendations from the Human Resources and
Remuneration Committee, within the maximum aggregate amount approved by the shareholders from time to time
(currently set at $750,000). The total of NED fees paid in FY2016 was $544,502.The Board will not seek any increase
for the NED maximum aggregate fee pool at the FY2016 AGM.
Fee policy
NEDs’ annual fees were last reviewed from FY2016 (effective date: 1 July 2015).
The annual fees (inclusive of superannuation) for FY2015 and FY2016 are set out in the table below:
Chair
Deputy Chair
Other NEDs
Committee Chair
Committee member
FY2016
$
154,734
119,187
83,640
12,546
Nil
FY2015
$
151,700
116,850
82,000
12,300
Nil
The table below outlines fees paid to NEDs for FY2016 and FY2015 in accordance with statutory rules and applicable
accounting standards.
NED remuneration for the years ended 30 June 2016 and 30 June 2015
Name
W G Hames
R S Brown
R Packer
S T Pearce*
V A Davies *
Total
Short-term
benefits
Board and
committee fees
$
Post employment
Superannuation
$
Financial year
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
141,310
138,538
108,847
106,712
87,831
85,201
76,384
74,885
59,966
-
474,338
405,336
13,424
13,162
10,340
10,138
33,447
33,698
7,256
7,115
5,697
-
70,164
64,113
Total
$
154,734
151,700
119,187
116,850
121,278
118,899
83,640
82,000
65,663
-
544,502
469,449
* Ms V A Davies was appointed on 21 September 2015.
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u) Additional statutory disclosures
Equity instrument disclosures relating to KMP
The numbers of ordinary shares in the company held during the financial year by each director and other KMP of Cedar
Woods Properties Limited, including their personally-related parties, are set out below. There were no shares granted
during the period as remuneration.
2016
NEDs
W G Hames†
RS Brown*
R Packer
S T Pearce
V A Davies
T S Brown (alternate for R S Brown)*
Executive Directors
P S Sadleir
Senior executives
P Freedman
N J Blackburne
B G Rosser
2015
NEDs
W G Hames†
RS Brown*
R Packer
S T Pearce
T S Brown (alternate for R S Brown)*
Executive Directors
P S Sadleir
Senior executives
P Freedman
N J Blackburne
S A Duplock
Number of
shares at the
start of the year
Other changes
during the year
Number of
shares at the
end of the year
10,082,559
112,532
10,195,091
7,985,584
167,859
15,000
0
4,639,980
0
0
5,000
15,000
0
7,985,584
167,859
20,000
15,000
4,639,980
1,049,529
42,000
1,091,529
105,912
18,303
0
0
7,336
0
105,912
25,639
0
Number of
shares at the
start of the year
Other changes
during the year
Number of
shares at the
end of the year
9,905,406
7,973,135
166,782
15,000
4,639,980
1,049,529
103,619
17
0
177,153
10,082,559
12,449
1,077
0
0
0
2,293
18,286
0
7,985,584
167,859
15,000
4,639,980
1,049,529
105,912
18,303
0
† Includes 2,014,439 (2015 – 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 KMP.
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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. Accordingly the company has a high level of knowledge regarding commercial rates
for these 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. The value of services provided was higher than in the previous year as a result of
architectural and design work performed on the Williams Landing Shopping Centre and the Glenside master plan.
During the year creative design services were provided by Axiom Design, an entity associated with the family of Mr W
G Hames. Mr Hames has no beneficial interest in Axiom Design. The services were performed on normal commercial
terms and conditions. The level of services increased during the year due to additional shareholder reporting and
increased corporate marketing activities.
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. At the estates where Westland
Settlement Services was engaged, the number of lots that settled in FY2016 was lower than that of the previous year
and as a result the value of transactions with Westland Settlement Services Pty Ltd decreased.
Cedar Woods has for many years been a member of the Australian Institute of Company Directors (AICD). During the
2015 year Mr P S Sadleir became a council member of AICD WA. The annual subscriptions paid in 2015 and 2016
were performed on normal commercial terms and conditions.
In 2015 and 2016 payments were made for sponsorship of the Warren Jones Foundation Inc. of 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
Subscriptions
Sponsorships
Amounts recognised as inventory / investment property
Architectural fees
Total amounts recognised in year
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
Investment property
2016
$
62,323
24,500
78,355
10,000
9,500
184,678
153,995
338,673
90,020
63,975
153,995
2015
$
59,585
0
131,440
10,000
7,650
208,675
59,749
268,424
0
59,749
59,749
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.
v)
Independent audit of remuneration report
The remuneration report has been audited by PricewaterhouseCoopers (PwC). See page 104 of this annual report for
PwC’s report on the remuneration report.
2016 ANNUAL REPORT
45
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Directors’ Report (continued)
w) Retirement, election and continuation in office of directors
Mr Robert Brown and Mr Ron Packer retire by rotation at the forthcoming Annual General Meeting and being eligible,
will offer themselves for re-election.
x)
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, V A Davies, 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.
y) 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.
z) 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 47.
aa) Rounding of amounts
The company is of a kind referred to in Class Order 2016/191, 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.
The directors reporting including the remuneration report is signed in accordance with a resolution of the directors of
Cedar Woods Properties Ltd.
P S Sadleir
Managing Director
24 August 2016
CEDAR WOODS PROPERTIES LIMITED
Auditor’s Independence Declaration
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2016 ANNUAL REPORT
47
Financial Statements
Consolidated Statement of Profit or Loss and Other Comprehensive Income .................................................................... 49
Consolidated Balance Sheet .............................................................................................................................................. 50
Consolidated Statement of Changes in Equity ................................................................................................................... 51
Consolidated Cash Flow Statement ................................................................................................................................... 52
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 24 August 2016. The directors have the power to
amend and reissue the financial statements.
48
Financial StatementsCEDAR WOODS PROPERTIES LIMITED Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 30 June 2016
Note
Revenue from operations
Sale of land and buildings
Services
Rent from properties
Interest revenue
Gain on sale of investment property
A1(a)
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
A1(b)
A1(b)
C1(d)i
A1(c)
Consolidated
2016
$’000
2015
$’000
169,181
170,359
787
3,892
1,299
2,830
4,018
1,430
175,159
178,637
-
76
19,969
60
(77,715)
(71)
(14,911)
(597)
(14,483)
(1,912)
(3,755)
41
61,832
(18,230)
(99,438)
(949)
(17,583)
(739)
(13,442)
(6,368)
(3,397)
1,073
57,823
(15,238)
Profit for the year
A4(c) & A1(d)
43,602
42,585
Total comprehensive income for the year
43,602
42,585
Total comprehensive income attributable to members of
Cedar Woods Properties Limited
43,602
42,585
Earnings per share for profit attributable to the ordinary
equity holders of the company:
Basic and diluted earnings per share
A1(d)
55.3 cents
54.3 cents
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
2016 ANNUAL REPORT
49
Financial Statements
Consolidated Balance Sheet
As at 30 June 2016
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
Lease incentives
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Other financial liabilities
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)
A3(c)
A2(c)
A3(d)
A3(e)
A3(e)
A2(d)
A2(f)
A2(g)
A3(g)
A2(f)
A2(g)
A3(f)
A3(g)
A2(e)
A4(a)
A4(b)
A4(c)
Consolidated
2016
$’000
2015
$’000
1,697
8,374
55,644
6,535
72,250
6,890
311,542
11,836
4,016
-
4,080
41,542
573
380,479
452,729
13,494
-
27,446
6,070
7,128
54,138
52,041
34,086
4,277
271
728
91,403
145,541
307,188
119,525
159
187,504
307,188
1,886
9,475
59,181
6,495
77,037
3,069
251,109
5,868
3,975
1,029
2,479
37,982
782
306,293
383,330
16,063
22,481
-
8,679
8,365
55,588
7,313
32,106
2,236
414
68
42,137
97,725
285,605
119,525
186
165,894
285,605
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
50
Financial StatementsCEDAR WOODS PROPERTIES LIMITED Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2016
Consolidated
Note
Contributed
equity
$’000
Reserves
$’000
Retained
profits
$’000
Total
$’000
Balance at 1 July 2014
116,716
309
144,576
261,601
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)
Balance at 30 June 2015
A4(a)
2,809
-
-
2,809
119,525
-
-
-
(123)
-
(123)
186
42,585
42,585
42,585
42,585
-
123
(21,390)
(21,267)
2,809
-
(21,390)
(18,581)
165,894
285,605
Balance at 1 July 2015
119,525
186
165,894
285,605
Profit for the year
Total comprehensive income for the year
Transactions with owners in their
capacity as owners:
Transfers from reserves to retained profits
Dividends provided for or paid
Employee share plan reserve
B3(b)
A4(b)
-
-
-
-
-
-
-
-
43,602
43,602
43,602
43,602
(97)
-
70
(27)
97
-
(22,089)
(22,089)
-
70
(21,992)
(22,019)
Balance at 30 June 2016
119,525
159
187,504
307,188
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
2016 ANNUAL REPORT
51
Financial Statements
Consolidated Cash Flow Statement
For the Year Ended 30 June 2016
Cash flows from operating activities
Receipts from customers (incl. GST)
Payments to suppliers and employees (incl. GST)
Note
Consolidated
2016
$’000
190,846
(51,468)
2015
$’000
194,015
(46,777)
Payments for land and development
(112,887)
(120,620)
Interest received
Borrowing costs paid
Income taxes paid
516
(3,941)
(18,799)
595
(6,163)
(12,502)
Net cash inflows from operating activities
A5(a)
4,267
8,548
Cash flows from investing activities
Proceeds from sale of investment properties
Repayments of loan by joint ventures
Advance of loan to joint ventures
Payments for investment properties
Payments for property, plant and equipment
-
1,108
-
(3,656)
(2,052)
36,000
2,796
(7,005)
(15,938)
(1,130)
Net cash (outflows) inflows from investing activities
(4,600)
14,723
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Payment of share issue expenses
Dividends paid
44,708
(22,481)
-
(22,083)
22,481
(34,082)
(15)
(18,565)
B3(b)
Net cash inflows (outflows) from financing activities
144
(30,181)
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
(189)
1,886
(6,910)
8,796
Cash and cash equivalents at the end of the year
A2(a)
1,697
1,886
The above consolidated cash flow statement should be read in conjunction with the accompanying notes.
52
Financial StatementsCEDAR WOODS PROPERTIES LIMITED s
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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 C1a.
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, explains 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 report.
2016 ANNUAL REPORT
53
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 ................................................................................................................................... 55
a)
b)
c)
d)
Gain on sale of investment property ..................................................................................................................... 55
Expense items ..................................................................................................................................................... 55
Income tax ........................................................................................................................................................... 56
Earnings per share ............................................................................................................................................... 56
A2.
Financial assets and financial liabilities ............................................................................................................ 57
a)
b)
c)
d)
e)
f)
g)
Cash and cash equivalents .................................................................................................................................. 58
Trade and other receivables ................................................................................................................................. 58
Available-for-sale financial assets ......................................................................................................................... 59
Trade and other payables ..................................................................................................................................... 59
Derivative financial instruments ............................................................................................................................ 59
Borrowings .......................................................................................................................................................... 60
Other financial liabilities ........................................................................................................................................ 61
A3.
Non-Financial assets and liabilities .................................................................................................................. 62
a)
b)
c)
d)
e)
f)
g)
Inventories ........................................................................................................................................................... 62
Deferred development costs ................................................................................................................................ 63
Investments accounted for using the equity method ............................................................................................ 63
Property, plant and equipment ............................................................................................................................. 63
Investment properties .......................................................................................................................................... 64
Deferred tax ......................................................................................................................................................... 65
Provisions ............................................................................................................................................................ 67
A4.
Equity ................................................................................................................................................................. 68
a)
b)
c)
Movement in ordinary share capital ...................................................................................................................... 68
Reserves .............................................................................................................................................................. 69
Retained profits .................................................................................................................................................... 69
A5.
Cash flow information ........................................................................................................................................ 70
a)
Reconciliation of profit after income tax to net cash outflows from operating activities .......................................... 70
54
A – How the Numbers are CalculatedCEDAR WOODS PROPERTIES LIMITED
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A1. Profit or Loss Information
a) Gain on sale of investment property
Gain on sale of investment property
Proceeds from sale of investment property
Carrying value of investment property disposed
Net gain on disposal of investment property
Notes
b) Expense items
Profit before income tax expense includes the following specific expenses:
Finance costs
Interest and finance charges
Interest – other financial liabilities
Unrealised financial instrument losses (gains)
Less: amount capitalised
Finance costs expensed
i. Capitalised borrowing costs
Notes
i
Consolidated
2016
$’000
-
-
-
2015
$’000
36,000
(16,031)
19,969
Consolidated
2016
$’000
3,861
2,564
660
(3,330)
3,755
2015
$’000
5,822
2,592
(577)
(4,440)
3,397
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 3.68% (2015 – 5.10%) per annum. Where qualifying assets are financed by specific
facilities, the applicable borrowing costs of those facilities are capitalised.
Consolidated
Net loss on disposal of property, plant and equipment
Rental expense relating to operating leases
Minimum lease payments
Other provisions
Provision for customer rebates
Provision for impairment of trade receivables
Superannuation
Depreciation of property, plant and equipment
Depreciation of investment properties
Employee benefits expense
Other
Impairment of available for sale financial assets: units in the
BCM Apartment Trust
A2(c)
Impairment of loan to the BCM Apartment Trust
Impairment of lease incentives and capitalised lease costs
2016
$’000
2
696
1,647
348
809
458
996
9,743
1,029
449
434
1,912
2015
$’000
18
803
3,671
-
778
301
1,015
8,996
6,368
-
-
6,368
2016 ANNUAL REPORT
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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
Consolidated
Current tax
Deferred tax
Adjustments for current tax of prior periods
Income tax expense attributable to profit
Deferred income tax expense (revenue) included in income
tax expense comprises:
(Increase) in deferred tax assets
Increase in deferred tax liabilities
Notes
A3(f)
A3(f)
ii. Numerical reconciliation of income tax expense to prima facie tax payable
Profit before income tax
2016
$’000
16,511
2,041
(322)
18,230
(35)
2,076
2,041
Consolidated
2016
$’000
61,832
2015
$’000
16,987
55
(1,804)
15,238
(3,065)
3,120
55
2015
$’000
57,823
Tax at the Australian tax rate of 30% (2015 – 30%)
18,550
17,347
Tax effect of amounts which are not deductible in calculating
taxable income:
- Share of net profit of joint venture
- Sundry items
Adjustments for current tax of prior periods:
- Research and development
Income tax expense
d) Earnings per share
Basic earnings per share (cents)
Diluted earnings per share (cents)
Net profit attributable to the ordinary owners of the
company ($’000)
Weighted average number of ordinary shares used as the
denominator in the calculation of earnings per share and
diluted earnings per share
(13)
15
2
(322)
(322)
(322)
17
(305)
(1,804)
(1,804)
18,230
15,238
2016
55.3
55.3
2015
54.3
54.3
43,602
42,585
78,891,681
78,430,698
CEDAR WOODS PROPERTIES LIMITED
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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
2016
Cash and cash equivalents
Trade and other receivables*
Total
2015
Cash and cash equivalents
Trade and other receivables*
Available-for-sale financial assets
Total
* Excluding prepayments
Financial Liabilities
2016
Trade and other payables
Borrowings
Derivative financial instruments
Other financial liabilities
Total
2015
Trade and other payables
Borrowings
Derivative financial instruments
Other financial liabilities
Total
Notes
A2(a)
A2(b)
A2(a)
A2(b)
A2(c)
Available
for sale
$’000
-
-
-
-
-
1,029
1,029
Financial
assets at
amortised cost
$’000
1,697
13,331
15,028
1,886
10,796
-
12,682
Notes
Derivatives used
for hedging
Liabilities at
amortised cost
A2(d)
A2(f)
A2(e)
A2(g)
A2(d)
A2(f)
A2(e)
A2(g)
$’000
-
-
728
-
728
-
-
68
-
68
$’000
13,494
52,041
-
61,532
127,067
16,063
29,794
-
32,106
77,963
Total
$’000
1,697
13,331
15,028
1,886
10,796
1,029
13,711
Total
$’000
13,494
52,041
728
61,532
127,795
16,063
29,794
68
32,106
78,031
2016 ANNUAL REPORT
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a) Cash and cash equivalents
Cash at bank and in hand
Consolidated
2016
$’000
1,697
1,697
2015
$’000
1,886
1,886
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 2.3% (2015: 0 – 2.0%) per annum depending on the balances.
The Group’s exposure to interest rate risk is discussed in section 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
Consolidated
Current
Trade receivables
Provision for impairment
Other receivables
Loan to BCM Apartment Trust (Secured)
Prepayments
Non-Current
Loans to BCM Apartment Trust (Secured)
Provision for impairment
Loans – employee share scheme (discontinued)
Notes
i & ii
i & ii
i & ii
iii
iii
iii
E3
2016
$’000
2,213
(348)
2,578
1,998
1,933
8,374
7,317
(449)
22
6,890
2015
$’000
982
-
122
6,623
1,748
9,475
3,040
-
29
3,069
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) and E4(x).
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. A
provision for impaired trade receivables of $348,000 was made at 30 June 2016 (2015 – $nil) for Williams Landing
Shopping Centre rental that is past due, where there is low probability of recovery in full. Other receivables includes
GST receivable in relation to the payment of Other financial liabilities - Current in note A2(g).
The fair values of non-current receivables of the group approximate the carrying values.
Other non-current receivables and loans under the discontinued employee share scheme are non-interest bearing.
None of these are impaired, or past due but not impaired.
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iii. Secured loan to BCM Apartment Trust
In the year ended 30 June 2016, finance facilities continued to be provided by Cedar Woods Properties Limited to
BCM Apartment Trust, secured over all of the apartments in the Batavia Coast Marina Apartments development.
The interest rate on these facilities is BBSY plus 4.5% per annum.
A provision for doubtful debts of $449,000 was made at 30 June 2016 (2015 - $nil) for a loan to Champion Bay
Nominees Pty Ltd ATF the BCM Apartment Trust.
c) Available-for-sale financial assets
Unlisted securities
Special unit in unit trust – at fair value
i. Unlisted securities
Consolidated
2016
$’000
-
-
2015
$’000
1,029
1,029
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 A3(c) and the 1 special unit (class B) is disclosed as an available-for-sale financial asset above.
The special unit (class B) has been assessed for impairment and a write-down of $1,029,000 (2015: $6,368,000)
recorded.
ii. Non-current assets pledged as security
Refer to note A2(f) for information on non-current assets pledged as security by the parent entity or its controlled
entities.
d) Trade and other payables
Trade payables
Accruals
GST payable
Other payables
Consolidated
2016
$’000
7,053
3,853
2,256
332
2015
$’000
6,275
6,226
3,560
2
13,494
16,063
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.
e) Derivative financial instruments
Non-current liabilities
Interest rate swap contracts
Consolidated
2016
$’000
728
728
2015
$’000
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2016 ANNUAL REPORT
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i.
Instruments used by the group
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 loans currently bear an average variable interest rate of 3.28% per annum (2015 – 3.72% 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 part of the consolidated entity’s
projected borrowings are protected for the period from 1 July 2016 to 30 June 2020.
The swaps effectively fix interest rates applicable to bank bills issued with a duration of 1 month (BBSY Bid) at
certain levels between 2.255% - 2.495% per annum (2015 – 2.49% - 2.50% per annum). Swaps currently in place
cover approximately 61% (2015 – 66%) of the variable loans outstanding at balance date, with terms expiring
in 2019 and 2020. 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.
f) Borrowings
Current
Bank loan – secured (Williams Landing Shopping Centre facility)
Non-Current
Bank loans – secured (Corporate facilities)
Bank loan – secured (Williams Landing Shopping Centre facility)
Facility fees capitalised (amortised over the period of facility)
Amortisation of facility fees
Consolidated
2016
$’000
-
-
26,400
25,909
(558)
290
52,041
2015
$’000
22,481
22,481
7,600
-
(702)
415
7,313
The fair value of non-current borrowings equals their carrying amount.
i. Security for borrowings
All of the consolidated entity’s assets are pledged as security for the group’s finance facilities.
Bank loans of $13,200,000 provided by ANZ Bank (2015 - $3,800,000) and $13,200,000 provided by
Commonwealth Bank trading as Bankwest (2015 - $3,800,000) 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).
The Williams Landing Shopping Centre facility is secured by a first registered mortgage over the Williams Landing
Shopping Centre disclosed in investment properties at A3(e).
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CEDAR WOODS PROPERTIES LIMITED
ii. Financing arrangements
Unrestricted access was available to the following lines of credit at balance date:
Corporate facilities
Total facilities (loan and guarantees)
Used at balance date
Unused at balance date
Williams Landing Shopping Centre facility
Total facility
Used at balance date
Unused at balance date
Total Facilities
Used at balance date
Unused at balance date
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Consolidated
2016
$’000
2015
$’000
135,000
40,545
94,455
30,000
25,909
4,091
165,000
66,454
98,546
135,000
21,288
113,712
23,000
22,481
519
158,000
43,769
114,231
The consolidated entity has total corporate 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 2018. Approval
has been received from financiers to increase the corporate facility to $175,000,000. 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 interest on the
corporate loan facilities is variable and at 30 June 2016 was an average rate of 3.28% per annum (2015 – 3.72%).
The corporate facilities include bank guarantee facilities of $18,000,000 (2015 - $15,000,000) subject to similar
terms and conditions, which were drawn to a total amount of $14,145,000 at 30 June 2016 (2015 - $13,688,000).
The consolidated entity has a facility of $30m (2015 - $23m) in place for the development of the Williams Landing
Shopping Centre provided by Commonwealth Bank trading as Bankwest. The conditions of the facility impose
certain covenants including loan-to-valuation ratio and interest cover ratio. The facility extends to February 2019.
The interest on the Williams Landing Shopping Centre loan facility is variable and at 30 June 2016 was an average
rate of 3.20% (2015 – 3.99%) per annum.
Details of the group’s exposure to risk arising from current and non-current borrowings are set out in note B2
Financial risk management.
g) 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
2016
$’000
27,446
27,446
34,086
34,086
2015
$’000
-
-
32,106
32,106
2016 ANNUAL REPORT
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A3. Non-Financial Assets and Liabilities
a)
Inventories
Total Inventory
Current inventory
Non-current inventory
Aggregate carrying amount
Current
Property held for resale
- land at cost
- at valuation 30 June 1992
- capitalised development costs
Notes
i & ii
i & ii
Consolidated
2016
$’000
55,644
311,542
367,186
2015
$’000
59,181
251,109
310,290
Consolidated
2016
$’000
2015
$’000
9,433
87
46,124
55,644
16,031
178
42,972
59,181
The 1992 valuations were independent valuations which were based on current market values at that time.
Non-Current
Property held for resale
- land at cost
- at valuation 30 June 1992
- capitalised development costs
- at net realisable value
Consolidated
2016
$’000
2015
$’000
251,330
203,787
74
54,994
5,144
151
42,054
5,117
311,542
251,109
The 1992 valuations were independent valuations which were based on current market values at that time.
i.
i. Current and non-current assets pledged as security
Refer to note A2(f) for information on current assets pledged as security by the parent entity or its controlled entities.
ii. Accounting for inventory
Refer to note E4(g) for the recognition and classification of inventory.
CEDAR WOODS PROPERTIES LIMITED
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b) Deferred development costs
Current
Deferred development costs
Non-Current
Deferred development costs
c)
Investments accounted for using the equity method
Unlisted securities
Shares in joint ventures
i. Cedar Woods Wellard Limited
Consolidated
2016
$’000
6,535
6,535
11,836
11,836
2015
$’000
6,495
6,495
5,868
5,868
Consolidated
2016
$’000
2015
$’000
4,016
3,975
The consolidated entity owns a 32.5% (2015: 32.5%) interest in Cedar Woods Wellard Limited, a property
development company incorporated in Australia. Refer to 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. Refer to note C1(b).
d) 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
2016
$’000
4,586
2,052
(4)
6,634
2,107
458
(11)
2,554
4,080
2015
$’000
3,486
1,130
(30)
4,586
1,818
301
(12)
2,107
2,479
Non-current assets pledged as security
Refer to note A2(f) for information on non-current assets pledged as security by the parent entity or its controlled entities.
2016 ANNUAL REPORT
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e)
Investment properties
Consolidated
Notes
Non-current assets – at cost
Opening balance at the start of the year
Capitalised expenditure
Transfer from inventory
Depreciation
Investment properties disposed
A1(a)
Impairment of capitalised lease costs
Closing balance at the end of the year
Represented by:
Property under construction
Completed investment property
Closing balance at the end of the year
i.
Investment properties under construction
i
2016
$’000
37,982
4,631
-
(996)
-
(75)
41,542
4,547
36,995
41,542
2015
$’000
34,929
15,143
4,956
(1,015)
(16,031)
-
37,982
-
37,982
37,982
For investment properties that are under construction at 30 June 2016 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
Impairment of lease incentives and capitalised lease costs
Net gain on disposal of investment property
Consolidated
2016
$’000
3,627
(2,709)
(434)
-
2015
$’000
3,700
(1,545)
-
19,969
iii. Fair value of investment property
The fair value of the Williams Landing Shopping Centre which makes up completed investment property at 30
June 2016 is $58.8m (2015 - $52.3m) exclusive of GST, based on an independent valuation. This includes land
surrounding the shopping centre for future development which is on the same title and adding subsequent
development.
iv. Leasing arrangements
Investment properties are leased to tenants under long term operating 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
2016
$’000
3,070
12,571
30,552
46,193
2015
$’000
2,867
11,835
32,972
47,674
CEDAR WOODS PROPERTIES LIMITED
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v. Leasing incentives
Lease incentives
Amortisation of lease incentives
Impairment of lease incentives
Consolidated
2016
$’000
1,118
(186)
(359)
573
2015
$’000
830
(48)
-
782
vi. Non-current assets pledged as security
Refer to note A2(f) for information on non-current assets pledged as security by the parent entity or its controlled
entities.
f) Deferred tax
i. Assets
Consolidated
The balance comprises temporary differences
attributable to:
Inventory
Available for sale financial assets at fair value
Notes
Provision for customer rebates
Provision for employee benefits
Other
Receivables
Derivative financial instruments
Share issue expenses
Borrowing costs
Other
Sub-total other
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
2016
$’000
2,328
1,858
1,743
776
6,705
239
218
102
18
52
629
7,334
(7,334)
-
7,299
35
-
7,334
3,445
3,889
7,334
2015
$’000
2,501
1,549
2,117
834
7,001
-
20
210
35
33
298
7,299
(7,299)
-
4,230
3,065
4
7,299
3,801
3,498
7,299
2016 ANNUAL REPORT
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Available for
sale financial
assets at
fair value
$’000
Inventory
$’000
Provision for
customer
rebates
$’000
Provision for
employee
benefits
$’000
507
-
1,774
772
Movements
At 1 July 2014
(Charged)/credited
- to profit or loss
1,994
1,549
- directly to equity
-
-
343
-
At 30 June 2015
2,501
1,549
2,117
(Charged)/credited
- to profit or loss
- directly to equity
At 30 June 2016
ii. Liabilities
(173)
-
2,328
309
-
1,858
(374)
-
1,743
62
-
834
(58)
-
776
Other
$’000
1,177
(883)
4
298
331
-
629
Total
4,230
3,065
4
7,299
35
-
7,334
Notes
Consolidated
2016
$’000
2015
$’000
The balance comprises temporary differences
attributable to:
Amounts recognised in profit or loss
Deferred development costs
Inventory
Prepayments
Investment Property
Other
Lease incentives
Revaluation reserve
Other
Sub-total other
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
Increase in deferred tax liabilities 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
5,372
5,212
439
367
11,390
172
38
11
221
11,611
(7,334)
4,277
9,535
2,076
11,611
3,643
7,968
11,611
3,706
4,872
411
215
9,204
235
81
15
331
9,535
(7,299)
2,236
6,415
3,120
9,535
3,908
5,627
9,535
CEDAR WOODS PROPERTIES LIMITED
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Movements
At 1 July 2014
Charged/(credited)
- to profit or loss
At 30 June 2015
Charged/(credited)
- to profit or loss
At 30 June 2016
Deferred
development
costs
$’000
Inventory
$’000
Prepayments
$’000
Investment
Property
$’000
2,694
2,932
115
143
1,012
3,706
1,666
5,372
1,940
4,872
340
5,212
296
411
28
439
72
215
152
367
Other
$’000
531
(200)
331
(110)
221
g) Provisions
Current
Employee benefits
Dividends
Customer rebates
Non-current
Employee benefits
i. Movements in customer rebate provisions
Carrying amount at start of year
Charged to profit or loss
Payments
Carrying amount at end of year
Notes
i
Consolidated
2016
$’000
1,316
3
5,809
7,128
Consolidated
2016
$’000
271
271
Consolidated
2016
$’000
7,057
1,647
(2,895)
5,809
Total
$’000
6,415
3,120
9,535
2,076
11,611
2015
$’000
1,305
3
7,057
8,365
2015
$’000
414
414
2015
$’000
5,914
3,671
(2,528)
7,057
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.
2016 ANNUAL REPORT
67
A4. Equity
a) Movement in ordinary share capital
2016
Shares
2015
Shares
2016
$’000
2015
$’000
Start of the year
78,891,681 78,336,371
119,525
116,716
Shares issued pursuant to the dividend reinvestment plan:
Ordinary shares issued on 30 April 2015 at $5.35
Transaction costs arising on share issues
Share issued pursuant to the bonus share plan:
Ordinary shares issued on 30 April 2015
-
-
-
-
526,833
-
28,477
555,310
-
-
-
-
2,819
(10)
-
2,809
End of the year
78,891,681 78,891,681
119,525
119,525
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.
The dividend reinvestment plan and bonus share plan were suspended during the 2016 financial year in response to capital
management initiatives, having regard to the company share price.
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b) Reserves
The following table shows the composition and movement in reserves during the year. A description of the nature and
purpose of reserves is provided below the table.
Composition
a) Asset revaluation reserve (pre 1992)
b) Employee share plan reserve
Movements
a) Asset revaluation reserve
Balance at the beginning of the year
Transfer to retained profits
Balance at the end of the year
b) Share-based payments reserve
Balance at the beginning of the year
Share-based payments expense
Balance at the end of the year
Notes
A4(c)
Consolidated
2016
$’000
89
70
159
186
(97)
89
-
70
70
2015
$’000
186
-
186
309
(123)
186
-
-
-
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).
The share-based payments reserve is used to recognise the grant date fair value of the rights issued to employees
adjusted for those rights not expected to vest. Refer to note E3.
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
2016
$’000
2015
$’000
165,894
144,576
43,602
97
(22,089)
187,504
42,585
123
(21,390)
165,894
2016 ANNUAL REPORT
69
A5. Cash Flow Information
a) Reconciliation of profit after income tax to net cash inflows from operating activities
Consolidated
Profit after income tax
Depreciation
Amortisation of lease incentives
Write down of assets – investment property and lease incentives
Loss on sale of non-current assets
Gain on sale of investment properties
Write down of assets - Available for sale financial assets – BCM Apartment Trust
Write down of assets - Impairment of loan to the BCM Apartment Trust
Fair value loss (gain) on derivative financial instrument
Non-cash share based payments expense
Accrued interest on receivables
Share of profit in equity accounted investment
Changes in operating assets and liabilities
(Decrease) increase in provisions for employee benefits
(Decrease) increase in provisions
(Increase) decrease in inventories
Transfer from inventories to investment properties
(Increase) in other deferred development costs
(Increase) in deferred tax assets
Increase (Decrease) in current income tax payable
Increase in deferred tax liability
Decrease (increase) in capitalised borrowing costs
(Increase) decrease in debtors
Decrease in creditors
Increase (decrease) in other financial liabilities
Net cash inflows from operating activities
2016
$’000
43,602
1,454
138
434
2
-
1,029
449
660
70
(760)
(41)
(132)
(1,248)
(56,896)
-
(6,008)
(35)
(2,609)
2,076
20
(3,752)
(3,612)
29,426
4,267
2015
$’000
42,585
1,316
48
-
18
(19,969)
6,368
-
(577)
-
(870)
(1,073)
377
1,143
20,303
(4,956)
(3,375)
(3,069)
2,681
3,120
(2)
7,434
(10,503)
(32,451)
8,548
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CEDAR WOODS PROPERTIES LIMITED
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.
Significant estimates and judgements .......................................................................................................... 72
a)
Significant estimates and judgements ................................................................................................................. 72
B2.
Financial risk management ............................................................................................................................. 73
a)
b)
c)
d)
Market risk ...........................................................................................................................................................73
Credit risk ........................................................................................................................................................... 75
Liquidity risk ........................................................................................................................................................ 75
Fair value measurement ...................................................................................................................................... 76
B3. Capital management objectives and gearing ............................................................................................... 78
a)
b)
Capital management objectives and gearing ....................................................................................................... 78
Dividends ............................................................................................................................................................ 79
2016 ANNUAL REPORT
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B – Financial Risks B1. Significant 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 inaccurate. 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 significantly impaired. Refer also to note E4(g).
iii. Estimated fair value of available for sale financial assets
The recoverability of the secured loans to BCM Apartment Trust is estimated based on assumptions in relation to
market conditions existing at the end of each reporting period. These include sales rates, sales prices and future
contracts.
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
2016
$’000
1,697
15,264
-
16,961
13,494
61,532
52,041
728
127,795
2015
$’000
1,886
12,544
1,029
15,459
16,063
32,106
29,794
68
78,031
The consolidated entity has no foreign exchange exposure and minimal exposure to price risk on equity securities.
The fair value of the available-for-sale financial assets is determined using valuation techniques, considering a
variety of scenarios and making assumptions that are based on market conditions, including sales prices and sales
rates. An increase in sales prices of 10% has a +$157,000 impact on net profit after tax (2015: +$1,000,000), while
a decrease in sales prices of 10% has no impact on net profit after tax as the available-for-sale financial asset has
been impaired to nil (2015: -$1,000,000).
The recoverability of other receivables is also determined considering a variety of scenarios and making
assumptions that are based on market conditions, including sales prices and sales rates. An increase in sales
prices of 10% has a +$449,000 impact on net profit after tax (2015: nil), while a decrease in sales prices of 10%
has no impact on net profit after tax (2015: nil).
2016 ANNUAL REPORT
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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.
The group has issued loans to the BCM Apartment Trust that bears an interest rate of BBSY plus 4.5%. 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 2016 to 30 June 2020.
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 2.255% - 2.495% (2015 – 2.49% - 2.495%) per annum. Swaps currently in
place cover 61% (2015 - 66%) of the variable loan outstanding at balance date, with terms expiring in 2019 and 2020.
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 61% of the bank
loan at balance sheet date because the balance of the loan was $52,309,000 (2015 - $30,081,000), 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
Interest
bearing
- variable
$’000
2016
Non-
interest
bearing
$’000
Interest
bearing
- variable
$’000
Total
$’000
2015
Non-
interest
bearing
$’000
Total
$’000
-
-
8,866
8,866
6,376
6,376
22
-
22
8,866
6,398
15,264
-
-
9,663
9,663
2,852
2,852
29
-
29
9,663
2,881
12,544
The weighted average interest rate at year end is 6.41% (2015: 6.59%)
Interest
bearing
- fixed
$’000
2016
Interest
bearing
- variable
$’000
Total
$’000
Interest
bearing
- fixed
$’000
2015
Interest
bearing
- variable
$’000
Total
$’000
Interest bearing liabilities
Bank loans
-
52,309
52,309
-
30,081
30,081
Other financial liabilities
34,086
-
34,086
32,106
-
32,106
34,086
52,309
86,395
32,106
30,081
62,187
The weighted average interest rate at year end is 3.28% (2015: 3.72%)
An analysis by maturity is provided in B2(c) below.
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.
CEDAR WOODS PROPERTIES LIMITED
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b) Credit risk
The consolidated entity has minimal exposure to credit risk from customers as title to lots or units in the consolidated
entity’s developments does not generally pass to customers until funds are received.
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 A3(c) 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 loans to BCM Apartment Trust, loans are secured by way of registered first mortgages over property
held by the BCM Apartment Trust. The majority of the loans take priority over payment of any return to the special units
(class A, class B and class C). The portion of the loans that rank behind the payment of any returns to the special units
has been impaired.
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 2016 the group had undrawn committed facilities of $94,455,000 (2015 - $113,712,000) and cash of
$1,697,000 (2015 - $1,886,000) to cover short term funding requirements. Refer to A2(f) ii for details.
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 2016
Non-derivatives
Non-interest bearing
Fixed rate
Variable rate
Derivatives
Total
Less than
1 year
$’000
Between 1
and 2 years
$’000
Between 2
and 5 years
$’000
Total
contractual
cash flows
$’000
13,494
25,037
-
-
38,531
-
-
-
-
-
-
39,000
57,607
728
13,494
64,037
57,607
728
Carrying
amount
$’000
13,494
61,532
52,041
728
97,335
135,866
127,795
2016 ANNUAL REPORT
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Group – at 30 June 2015
Non-derivatives
Non-interest bearing
Fixed rate
Variable rate
Derivatives
Total
d) Fair value measurement
Less than
1 year
$’000
Between 1
and 2 years
$’000
Between 2
and 5 years
$’000
Total
contractual
cash flows
$’000
16,063
-
23,145
-
39,208
-
-
-
-
-
-
39,000
8,453
68
16,063
39,000
31,598
68
47,521
86,729
78,031
Carrying
amount
$’000
16,063
32,106
29,794
68
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 2016 and 30 June 2015:
As at 30 June 2016
Notes
Assets
Available-for-sale financial assets
A2(c)
Total assets
Liabilities
Derivatives used for hedging
A2(e)
Total liabilities
As at 30 June 2015
Notes
Assets
Available-for-sale financial assets
A2(c)
Total assets
Liabilities
Derivatives used for hedging
A2(e)
Total liabilities
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
-
-
-
-
-
-
728
728
-
-
-
-
Level 1
$’000
Level 2
$’000
Level 3
$’000
-
-
-
-
-
-
68
68
1,029
1,029
-
-
-
-
728
728
Total
$’000
1,029
1,029
68
68
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.
CEDAR WOODS PROPERTIES LIMITED
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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 2016:
Opening balance 30 June 2015
Impairment of Available-for-sale financial assets
Closing balance 30 June 2016
Available
For sale
$’000
1,029
(1,029)
-
Total
$’000
1,029
(1,029)
-
The reduction in fair value of the equity securities in the table above reflects the reduced return expected to be
received and the extended period over which the return is now expected to be received. Refer to note A2(c) for
details.
2016 ANNUAL REPORT
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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(f)
A2(a)
2016
$’000
52,041
(1,697)
50,344
2015
$’000
29,794
(1,886)
27,908
307,188
16.4%
285,605
9.8%
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.
78
CEDAR WOODS PROPERTIES LIMITED
b) Dividends
i. Ordinary shares
Fully franked based on tax paid at 30%
Final dividend for the year ended 30 June 2015 of 16.0 cents
(2014 – 15.5 cents) per fully paid share
- Paid in cash
- Applied to the employee share loans
Interim dividend for the year ended 30 June 2016 of 12.0 cents (2015 –
12.0 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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Consolidated
2016
$’000
2015
$’000
12,619
3
12,138
3
9,464
-
3
22,089
6,427
2,819
3
21,390
In addition to the above dividends, since year end the directors have recommended the payment of a final dividend
of 16.5 cents per fully paid ordinary share (2015 – 16.0 cents), fully franked based on the tax paid at 30%. The
aggregate amount of the proposed dividend expected to be paid on 28 October 2016 out of retained profits at 30
June 2016, but not recognised as a liability at year end is below:
Dividends not recognised at year end
iii. Franked Dividends
Consolidated
2016
$’000
13,017
2015
$’000
12,623
The franked portions of the final dividend proposed at 30 June 2016 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% (2015 – 30%)
Consolidated
2016
$’000
2015
$’000
70,516
64,443
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 $5,579,000 (2015 - $5,410,000).
2016 ANNUAL REPORT
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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 ............................................................................................................................... 81
a)
b)
c)
d)
Subsidiaries ........................................................................................................................................................ 81
Interests in joint ventures ..................................................................................................................................... 82
Commitments and contingent liabilities in respect of the joint ventures ................................................................ 82
Summarised financial information for joint ventures ............................................................................................. 83
80
C – Group StructureCEDAR WOODS PROPERTIES LIMITED C1. Interests in Other Entities
a) Subsidiaries
The group’s subsidiaries at 30 June 2016 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
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Cedar Woods Properties Harrisdale Pty Ltd
Cedar Woods Properties Investments Pty Ltd
Cedar Woods Properties Management Pty Ltd
Cedar Woods Property Sales Pty Ltd
Cranford Pty Ltd
Daleford Property Pty Ltd
Dunland Property Pty Ltd
Esplanade (Mandurah) Pty Ltd
Eucalypt Property Pty Ltd
Flametree Property Pty Ltd
Galaway Holdings Pty Ltd
Gaythorne 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
Williams Landing Home Improvement Pty Ltd
Williams Landing Home Improvement Trust
Williams Landing Shopping Centre Pty Ltd
Williams Landing Shopping Centre Trust
Williams Landing Town Centre Pty Ltd
Woodbrooke Property Pty Ltd
Yonder Property Pty Ltd
Zamia Property Pty Ltd
2016
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%
2015
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%
2016 ANNUAL REPORT
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b) Interests in joint arrangements
Set out below are the joint ventures of the group as at 30 June 2016. The principal place of business and country of
incorporation (or origin) is Australia for all entities.
Name of entity
% of ownership
interest
Nature of
relationship
Measurement
method
2016
%
2015
%
Carine Joint Venture
-
50
Joint Operation
Share of assets,
liabilities, income
and expenses
Carrying amount
2016
$’000
2015
$’000
-
(38)
Cedar Woods Wellard Limited
32.5
32.5
Joint Venture
Equity method
4,016
3,975
BCM Apartment Trust
50
50
Joint Venture
Equity method
-
-
The carrying amount represents the amount attributable to the group.
Carine Joint Venture (CJV) was 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 consolidated entity had a 50% participating interest in the CJV and was entitled to 50% of its
revenue and assets, however the CJV was terminated in December 2015 and thus the consolidated entity’s interest in
the assets employed in the CJV are nil in the balance sheet at 30 June 2016 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.
BCM Apartment Trust, owns the Batavia Coast Marina Apartments project in Geraldton. 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 2016 (2015: nil).
Cedar Woods Wellard Limited has commitment for expenditure at 30 June 2016 of $111,263 (2015: $2,865,262)
and provided $2,075,100 (2015: $27,667) bank guarantees to various local authorities supporting development and
maintenance commitments.
BCM Apartment Trust has no commitments for expenditure or contingent liabilities at 30 June 2016 (2015: nil).
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d) Summarised financial information for joint ventures
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 after income tax
At end of the year
Share of profit before income tax
Income tax expense
Share of profit after income tax
Share of joint venture’s revenue, assets, liabilities and
contingent liabilities
Revenue
Assets
Liabilities
Contingent liabilities (bank guarantees)
2016
$’000
867
7,745
8,612
9,538
18,150
3,807
-
3,807
14,343
32.5%
4,661
2016
$’000
3,975
41
4,016
59
(18)
41
1,091
5,899
(1,237)
(674)
2015
$’000
2,183
8,617
10,800
5,502
16,302
2,086
-
2,086
14,216
32.5%
4,620
2015
$’000
2,902
1,073
3,975
1,533
(460)
1,073
4,748
5,298
(678)
(9)
The consolidated entity owns a 32.5% (2015 – 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 ...................................................................................................................................... 85
D2.
Commitments ................................................................................................................................................. 86
D3.
Events occurring after the reporting period ................................................................................................ 87
84
D – Unrecognised ItemsCEDAR WOODS PROPERTIES LIMITED D1. Contingent Liabilities
At 30 June 2016 the group had contingent liabilities in respect of:
a) Bank guarantees
At 30 June 2016 bank guarantees totalling $14,145,000 (2015 - $13,688,000) 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
2016
$’000
683
1,294
1,977
2015
$’000
711
2,167
2,878
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.
b) Capital commitments
At 30 June 2016 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 $19,220,000 (2015 - $11,331,000), for building construction was $34,931,000
(2015 - $22,982,000) and for landscaping construction was $2,375,000 (2015 - $987,000). This work will be
substantially completed in the next 12 months.
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D3. Events occurring after the reporting period
On 12 July 2016 Cedar Woods announced that the South Australian Government approved Cedar Woods’ conditional
purchase of a 16.5ha site in Glenside, Adelaide for a price of $25.8m plus GST. The Glenside site is located 3 kilometres
south east of Adelaide CBD and adjacent to over 700 hectares of parkland which surrounds the city. Settlement of the
purchase will occur upon finalisation of the rezoning, which is expected to occur mid FY2017. The site will accommodate
over 1,000 dwellings.
The company was also selected as preferred developer by the State Government for a 12.6ha site at Port Adelaide.
The site will accommodate about 500 homes with the majority being 2 to 3 storey townhouses. The State Government
(Renewal SA) and Cedar Woods will work together over the next six months to develop a master plan in consultation with
the community.
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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 ............................................................................................................................ 89
E2.
Remuneration of auditors .............................................................................................................................. 90
E3.
Employee share scheme ................................................................................................................................ 91
E4.
Summary of accounting policies ................................................................................................................... 92
E5.
Segment information .................................................................................................................................... 100
E6.
Parent entity financial information .............................................................................................................. 101
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E – Other InformationCEDAR WOODS PROPERTIES LIMITED
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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
Termination benefit
b) Group
Consolidated
2016
$
2015
$
2,771,210
2,474,008
177,444
69,283
-
157,429
152,133
124,500
3,017,937
2,908,070
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 $312,413 (2015 - $1,361,275) from Cedar Woods Wellard Limited.
Detailed disclosures on transactions with key management personnel or their related entities are set out in the Directors’
Report.
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) 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
g) Loans to related parties
Loan to Cedar Woods Wellard Limited
Beginning of the year
Loan repayments received
Interest charged
End of year
2016
$
315
315
2016
$
-
-
-
-
2015
$
-
-
2015
$
2,610,154
(2,796,146)
185,992
-
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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
2016
$
2015
$
- Audit and review of the financial statements of the parent entity,
controlled entities and co-development projects
196,238
239,007
Non-audit services
- Research and development advice
- Accounting advice
- Other taxation advice and reviews
Total fees for non-audit services
-
1,530
7,575
9,105
205,343
266,649
-
29,325
295,974
534,981
The statutory audit requirements for the group vary from year to year and can have an impact on the level of audit fees.
Audit Fees in FY2016 include $11,936 in relation to the FY2015 audit that were subsequently billed in FY2016.
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 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.
The auditor has provided an independence declaration and the committee is satisfied that the work performed on non-audit
services is conducted by a team separate from the audit team and does not impact the independence of the auditor.
The majority of non-audit services fees in FY2015 related to research and development (R&D) tax incentive work. The
work on R&D is now performed by a different firm to the auditor. The company has an objective that the value of non-audit
services provided by the audit firm does not exceed the value of the audit services.
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E3. Employee Share Scheme
The former 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 2016, $22,000 (2015 - $29,000) remained
outstanding from employees in relation to loans granted in financial years prior to 2010. No amounts were due from former
employees.
The former employee share plan has been reviewed and replaced by a new Long Term Incentive (LTI) plan effective from
1 July 2015 for FY2016 and which will continue in FY2017.
The new LTI plan has two vesting conditions a) a 3 year service condition and b) two performance conditions measured
over a 3 year period: 50 percent of the LTI grant will be tested against a relative total shareholder return (“TSR”) hurdle
(measured against the S&P / ASX Small Industrials Index) and 50 per cent against earnings per share (“EPS”) growth
targets, set in the context of the Corporate plan.
Full details of the operation of the LTI plan are set out in the remuneration report on pages 35 and 36 of this annual report.
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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 2016 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 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.
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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
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.
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.
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j) Business combinations
The 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 of disposal 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 substantially made up of furniture, fittings and equipment and 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:
• 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, other financial assets and other financial liabilities
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.
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.
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Other financial liabilities at fair value through profit or loss are financial liabilities due to vendors of properties under
contracts of sale. 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.
n)
Investment property
i.
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 buildings 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. Net gains or losses on sale are disclosed in the profit or loss.
ii. Lease incentives
Lease incentives provided under an operating lease by the Group as lessor are recognised on a straight line basis
against rental income over the lease period.
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 corporate 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.
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.
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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 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.
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.
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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 2015:
AASB 2014-1 Amendments to Australian Accounting Standards
The amended standards only affected the disclosures in the notes to the financial statements.
New accounting standards not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2016
reporting periods and have not been early adopted by the group. The group’s assessment of the impact of these new
standards and interpretations is set out below.
Mandatory application date /
Date of adoption by group
Must be applied for financial
years commencing on or after
1 January 2018.
Mandatory for financial years
commencing on or after 1
January 2018.
Expected date of adoption by
the group: 1 July 2018.
Mandatory for financial years
commencing on or after 1
January 2019. At this stage,
the group does not intend to
adopt the standard before its
effective date.
Title of Standard
Nature of change
Impact
AASB 9
Financial
Instruments
AASB 15
Revenue from
Contracts with
Customers
AASB 16
Leases
AASB 9 addresses the
classification, measurement
and derecognition of financial
assets and financial liabilities,
introduces new rules for
hedge accounting and a new
impairment model for financial
assets.
The AASB has issued a new
standard for the recognition
of revenue. This will replace
AASB 118 which covers
revenue arising from the sale
of goods and the rendering
of services and AASB 111
which covers construction
contracts.
The new standard is based
on the principle that revenue
is recognised when control of
a good or service transfers to
a customer.
The standard permits either a
full retrospective or a modified
retrospective approach for
the adoption.
AASB 16 was issued in
February 2016. It will result
in almost all leases being
recognised on the balance
sheet, as the distinction
between operating and
finance leases is removed.
Under the new standard,
an asset (the right to use
the leased item) and a
financial liability to pay rentals
are recognised. The only
exceptions are short-term
and low-value leases.
The accounting for lessors
will not significantly change.
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.
Management is currently
assessing the effects of
applying the new standard
on the group’s financial
statements.
At this stage, the group is not
able to estimate the effect of
the new rules on the group’s
financial statements. The
group will make more detailed
assessments of the impact
over the next twelve months.
The standard will affect
primarily the accounting for
the group’s operating leases.
As at the reporting date, the
group has operating lease
commitments of $1,977,000.
However, the group has not
yet determined to what extent
these commitments will
result in the recognition of an
asset and a liability for future
payments and how this will
affect the group’s profit and
classification of cash flows.
Some of the commitments
may relate to arrangements
that will not qualify as leases
under AASB 16.
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.
CEDAR WOODS PROPERTIES LIMITED
bb) Rounding of amounts
The company is of a kind referred to in Class Order 2016/191, 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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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
Reserves
Retained earnings
Profit for the year
Total comprehensive income
i.
Investments in subsidiaries and joint venture entities
2016
$’000
2015
$’000
48,760
355,945
(98,884)
(126,107)
229,838
51,095
315,404
(89,411)
(97,212)
218,192
119,525
119,525
70
110,243
229,838
28,790
28,790
-
98,667
218,192
31,525
31,525
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.
2016 ANNUAL REPORT
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Section F:
Declaration and Independent
Auditor’s Report
F1.
Directors’ Declaration .................................................................................................................................. 103
F2.
Independent Auditor’s Report to the Members of Cedar Woods Properties Limited ............................ 104
102
F – Declaration and Independent Auditor’s ReportCEDAR WOODS PROPERTIES LIMITED
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F1. Directors’ Declaration
In the directors’ opinion:
a)
the financial statements that are set out in the financial statements section and notes on pages 48 to 101 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 2016 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
24 August 2016
2016 ANNUAL REPORT
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F2. Independent Auditor’s Report
to the members of Cedar Woods Properties Limited
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CEDAR WOODS PROPERTIES LIMITED
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2016 ANNUAL REPORT
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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 ........................................................................................................................................ 107
a)
b)
c)
d)
e)
f)
Dividend and dividend policy .............................................................................................................................. 107
Shareholder discount scheme ............................................................................................................................ 107
Electronic payment of dividends ......................................................................................................................... 107
Dividend re-investment plan and Bonus share plan ............................................................................................ 107
Shareholders’ timetable ..................................................................................................................................... 107
Shareholder information ..................................................................................................................................... 108
G2.
Five year financial performance .................................................................................................................... 110
106
G – Shareholders’ InformationCEDAR WOODS PROPERTIES LIMITED
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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 2016
financial year is 16.5 cents per share, fully franked. The dividend will be paid on 28 October 2016.
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 1,000 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 are currently suspended.
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
25 August 2016
6 October 2016
28 October 2016
October 2016
10 November 2016
February 2017
April 2017
May 2017
August 2017
2016 ANNUAL REPORT
107
f) Shareholder Information
The shareholder information set out below was applicable at 31 August 2016.
i) Distribution of ordinary shares
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,000 and over
Number
of holders
965
1,266
435
443
59
Number
of shares
411,777
3,460,230
3,280,264
11,451,297
60,288,113
3,168
78,891,681
There were 254 holders of less than a marketable parcel of shares.
ii) Twenty largest shareholders of ordinary shares as disclosed in the share register
JP Morgan Nominees Australia Limited
HSBC Custody Nominees (Australia) Limited
Hamsha Nominees Pty Ltd (The Nowra Projects Unit Fund A/C)
Westland Group Holdings Pty Ltd
Zero Nominees Pty Ltd
National Nominees Limited
Beach Corporation Pty Ltd
Citicorp Nominees Pty Ltd
Australian Executor Trustees Limited (No 1 Account)
Helen Kaye Poynton
Joia Holdings Pty Ltd
Mr Paul Sadleir
Australian Foundation Investments Company Limited
BNP Paribas Nominees Pty Ltd (Agency Lending DRP A/C)
Leblon Holdings Pty Ltd (William Hames Super Fund A/C)
RBC Investor Services Australia Pty Ltd (VFA A/C)
Dr A Gerraty & Mrs P Gerraty (A & P Gerraty S/F A/C)
HSBC Custody Nominees (Australia) Limited (NT-Comnwlth Super Corp A/C)
Netwealth Investments Limited (Wrap Services A/C)
Mr JH Tucker & Mrs KJ Tucker (Tucker Family Super Fund A/C)
Number
of shares
10,341,125
9,300,214
5,040,216
4,596,980
4,059,874
2,706,545
2,384,963
2,258,742
1,806,934
1,677,095
1,177,922
1,045,445
800,000
736,952
708,456
696,474
600,000
543,422
478,950
460,002
Percentage
of shares
13.11
11.79
6.39
5.83
5.15
3.43
3.02
2.86
2.29
2.13
1.49
1.33
1.01
0.93
0.90
0.88
0.76
0.69
0.61
0.58
51,420,311
65.18
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iii) Substantial shareholders of ordinary shares
As disclosed in substantial shareholder notices lodged with the ASX at 31 August 2016.
William George Hames and related entities
Robert Stanley Brown and related entities
Westpac Banking Corporation
Westoz Funds Management Pty Ltd
AustralianSuper Pty Ltd
Number
of shares
Percentage
of shares 1
9,314,668
7,967,627
4,752,159
4,025,000
3,984,733
12.90
10.87
6.02
5.10
5.05
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.
2016 ANNUAL REPORT
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G2. Five Year Financial Performance
All figures in $’000 except where stated
Financial Year
Financial Performance
Revenue from operations
Proceeds from investment Properties
Earnings before interest and tax
Finance costs
Operating profit before tax
Income tax expense
Net profit after tax
Financial Position
Total assets
Total liabilities
2016
2015
2014
2013
2012
175,159
178,637
214,465
172,751
170,474
-
65,587
3,755
61,832
18,230
43,602
36,000
61,220
3,397
57,823
15,238
42,585
-
382
1,271
56,172
53,022
53,092
606
55,566
15,253
40,313
1,580
51,442
15,105
36,337
3,819
49,273
15,023
34,250
452,729
383,330
409,948
301,024
238,314
145,541
97,725
148,347
93,280
53,688
Shareholders’ equity
307,188
285,605
261,601
207,744
184,626
Number of shares on issue – end of year (‘000)
78,892
78,892
78,336
73,360
72,190
Earnings per share (cents)
55.3
54.3
54.4
49.9
53.2
Key Performance Measures
Dividend per share, fully franked (cents)
28.5
28.0
27.5
26.0
25.0
EBIT Margin
Interest cover (times)
Return on Equity
37.4%
34.3%
26.2%
30.7%
31.1%
16.6
9.9
10.4
12.6
14.2%
14.9%
15.4%
17.5%
Investment in inventory during year
112,887
120,620
158,149
145,474
Net tangible assets backing per share ($)
Net bank debt
Net bank debt to equity
Share price – end of year ($)
3.89
50,344
16.4%
4.35
3.62
27,908
9.8%
5.26
3.34
32,602
12.5%
7.31
2.83
37,762
18.2%
5.17
Stock Market capitalisation at 30 June
343,179
414,970
572,639
379,269
256,995
Number of employees at 30 June
67
62
56
54
48
Returns to shareholders over 1, 3, & 5 years
Earnings per share growth %
Share price growth %
Dividend growth % (paid dividend)
Total shareholder return %
1 Year
1.8
(17.3)
1.8
(9.6)
3 Year
5 Year
3.5
(5.6)
3.8
1.0
3.8
1.7
8.1
9.5
8.8
18.6%
97,401
2.56
3,822
2.1%
3.56
CEDAR WOODS PROPERTIES LIMITED
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
Valerie Anne Davies, FAICD
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 11, 172 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: Thursday 10 November 2016
2016 ANNUAL REPORT
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www.cedarwoods.com.au