ANNUAL
REPORT
2021 Cedar Woods Properties Limited
ABN 47 009 259 081
1
Annual Report 2021 WE STRIVE TO
CREATE QUALITY
HOMES, WORKPLACES
AND COMMUNITIES
THAT PEOPLE ARE
PROUD OF.
About
Cedar Woods
Cedar Woods Properties
Limited (“Cedar Woods”)
is a national developer of
residential communities and
commercial properties.
Established in 1987, Cedar Woods has grown to
become one of the country’s leading developers.
The Company has established a reputation
for delivering long-term shareholder value
underpinned by its disciplined approach to
acquisitions, the rigour and thoughtfulness
of its designs, and the creation of dynamic
communities that meet the evolving needs
of its customers.
Cedar Woods’ diversified product mix ranges
from land subdivisions in emerging residential
communities, to medium and high-density
apartments and townhouses in vibrant inner-
city neighbourhoods and supporting retail and
commercial developments. Cedar Woods’
developments epitomise the company’s
long-standing commitment to quality.
02
Cedar Woods Properties TABLE OF
CONTENTS
Letter from Chairman ............................................... 4
Letter from Managing Director ................................. 6
Financial Performance Highlights ............................. 8
Our Business ..........................................................10
Financial and Operating review ...............................13
ESG Report ............................................................ 22
Directors Report......................................................47
Directors’ Report: Letter to Shareholders from the
Chair of the Remuneration & Nominations Committee
(The Committee) .....................................................52
Directors’ Report - Remuneration Report .............. 53
Auditor’s independence declaration ........................72
Financial Statements ...............................................73
Notes to the Financial Statements ...........................79
Section A: Key Numbers ........................................ 80
Profit or Loss Information ........................................81
Balance Sheet Information ..................................... 85
Cash Flow information ............................................ 99
Section B: Financial risks ......................................101
Significant estimates and judgements ...................102
Financial risk management ....................................103
Capital Management .............................................108
Section C: Group Structure ................................... 110
Group Structure .................................................... 111
Section D: Unrecognised Items ............................. 116
Unrecognised Items .............................................. 117
Section E: Further Information ............................... 118
Directors’ Declaration ............................................132
Independent Auditor’s report ................................133
Shareholders’ Information .....................................139
Investors’ Summary ..............................................140
Shareholder Information ........................................ 141
Five Year Financial Performance ...........................143
Banbury Village, VIC
03
Annual Report 2021 LETTER FROM
THE CHAIRMAN
A rebound year
While Financial Year 2020 was materially disrupted
by events outside the Company’s control, I am
delighted to report that Financial Year 2021 was a
sharp rebound year, firmly placing Cedar Woods on a
pathway to pre COVID-19 earnings and beyond.
Based in New South Wales, Paul’s skills and industry
network will be highly beneficial to Cedar Woods as
we pursue opportunities to grow our national portfolio
on the east coast.
ESG Strategy
Cedar Woods’ environmental and social credentials
We are proud of Cedar Woods’ reputation of being
have been well established over many years of
an innovative and diversified property company with
responsible development. We think about tomorrow,
a track record of strong financial performance and
we deliver what we promise and we abide by our
long-term value creation. We continue to deliver
code of conduct and the Company’s strong values.
against this reputation, declaring full year dividends
We seek not only to build sustainable communities
totalling 26.5 cents and delivering an impressive 31.9
for our customers but to contribute to a sustainable
per cent total shareholder return to our highly valued
investment strategy for our shareholders.
In striving to be the best Australian property company,
renowned for performance and quality, we have
integrated environmental, social and governance
(ESG) objectives into the policies and practices that
govern our business through the development of
Cedar Woods’ first ESG strategy.
Our fit-for-purpose ESG strategy focuses on the
matters that are most relevant to our operations,
industry and stakeholders. At the heart of the
strategy is our commitment to serve our customers
exceptionally and transparently; invest in our
employees and cultivate a diverse and inclusive work
environment; work to strengthen the communities we
create; and transition to more sustainable solutions
that reduce climate-related risks.
This year marks a step-change in how Cedar Woods
reports on ESG matters annually. This Annual Report
outlines the strategy, initiatives and targets we have
set for ourselves, as we commit to the continual
improvement of our reporting.
shareholders for the Financial Year 2021.
Ready for a new future
Cognisant of the fundamental changes reshaping
the Australian property market, we have challenged
ourselves to reset our view of the future, identify
emerging opportunities and ensure the Cedar Woods
business model is ready and able to capitalise on them.
We are seeing firsthand the rapid impact that technology
and remote working is having on how Australians are
choosing to live, work and play. Customer preferences
are playing out at both a micro and macro level
reshaping the way real estate and our cities will evolve in
the post COVID-19 future.
Medium density housing demand is evidence of
this change, with home buyers seeking a dedicated
workspace along with their own, private open space to
comfortably raise a family.
Bolstering the Board
Important to our strategic agenda, was the
appointment of Mr Paul Say to the Company’s Board
of Directors as an independent Non-Executive
Director on 3 May 2021. With over 40 years of
experience in the commercial and residential property
sector, Paul has bolstered the Cedar Woods Board
with his strong corporate finance, capital allocation
and investment management capability.
04
Cedar Woods Properties Creating community connection
In reflecting on our ability to make a positive social
impact, it was determined that Cedar Woods
would adopt an additional corporate value that is
immediately consistent with Our Purpose. We have
articulated this new value as ‘Creating Community
Connection’. It recognises that each day our team
makes decisions that bring people together, foster
connection and enrich the lives of people through
thoughtful placemaking.
During the year we were pleased to form a new
national community partnership with The Smith
Family – Australia’s leading children’s education
charity. The partnership aims to assist disadvantaged
Australian children get the most out of their education.
The Smith Family and Cedar Woods share the same
philosophies of developing and creating a better
tomorrow whilst providing opportunities for people to
thrive and grow.
Set to thrive
In closing, I reiterate to shareholders that your Board
is committed to good corporate governance and the
long-term value creation for shareholders.
I am honoured to Chair such an innovative Board
and on behalf of them, I acknowledge the enormous
commitment and ability of our professional team
and their consultants to embrace these new urban
challenges and build for the future.
I also take this opportunity to thank our loyal and
longstanding shareholders for your support and we
look forward to continuing to serve you.
At Cedar Woods, we have a clear view to the
opportunities of the future, we are well positioned
and prepared. Above all, we understand our purpose
and are ready to advance our vision of diversity with
discipline.
Sincerely,
William Hames
Chairman
CEDAR WOODS HAS
A CLEAR VIEW TO THE
OPPORTUNITIES OF
THE FUTURE, WE ARE
WELL POSITIONED
AND PREPARED.
William Hames, Chairman
05
Annual Report 2021
LETTER FROM THE
MANAGING DIRECTOR
Capitalising on opportunities
Cedar Woods’ diversified and quality portfolio drove
the Company’s strong performance across a year in
which the demand for new housing was boosted by
state and federal government stimulus.
are often apartment occupants. As strong demand for
land and townhouses continued, conditions started to
improve for apartments and offices towards the end
of the financial year with investors starting to re-enter
the property market.
Our long standing strategy positioned Cedar Woods
Successfully navigating challenges
well to harness the opportunities presented by a
Operationally, the highly capable team at Cedar
recovering economy that saw buyers active and
Woods navigated through snap lockdowns and the
showing a preference for Cedar Woods’ product
tightening supply of materials and labour caused by the
offering. This resulted in record presales at year end of
ongoing implications of COVID-19 and a construction
$478 million (up 33 per cent), the delivery of net profit of
sector surge. This tightening is resulting in some cost
$32.8 million (up 61 per cent) and 60 per cent growth in
pressures but to date the price growth of our products
earnings per share for the 2021 Financial Year.
has generally exceeded any cost growth.
We experienced very strong sales conditions for
2021 saw us stay the course, executing our strategy
housing lots, where the government owner occupier
to maintain broad customer appeal in varying market
housing grants were predominantly targeted, with
conditions. We continued our success in taking on
favourable conditions extending to townhouses as the
complex, large scale projects, adding value through
year progressed.
It was pleasing to see that desire to enter the property
market outlived the stimulus and new home buyers
across the country remained keen to capitalise on
record-low interest rates, forecast price growth and
increasing rental yields. Strong sales conditions
continue to prevail across the four states in which
Cedar Woods’ projects are located. In response,
we are accelerating the release of new project
stages to capture the consistent demand from new
home buyers.
Conditions for apartments and offices were
challenging for most of the financial year, as the
ongoing closure of international borders significantly
impacted migration and international students, whom
planning design and delivery and generating strong
returns from multi-year projects. This remained the
driver of our consistent shareholder returns.
Future fit
Over the year, we continued to build out Cedar Woods’
pipeline of development projects with the acquisition
of a 40.7 hectare site in South Maclean, south west
of Brisbane and a strategic 21.7 hectare site in
Melbourne’s north, immediately adjacent to Cedar
Woods’ existing Mason Quarter project in Wollert.
We also continued to invest in our people, technology
and corporate brand to support the Company’s growth
objectives. Our strong culture and systems have us well
prepared to embrace the new challenges of Australia’s
urban landscape.
06
Cedar Woods Properties OUR STRONG CULTURE
AND SYSTEMS HAVE
US WELL PREPARED
TO EMBRACE THE
NEW CHALLENGES OF
AUSTRALIA’S URBAN
LANDSCAPE.
Underpinning growth
Backed by record presales and a pipeline of more
than 8,800 lots/units Cedar Woods is making the
most of the favourable market conditions. We are
This next period looks to be both busy and rewarding
for the talented Cedar Woods team. I would like to
thank them for their relentless commitment to serve
our customers exceptionally and transparently.
excited to be presenting a steady stream of quality
Sincerely,
product to the market from Greville, Fletcher’s Slip,
Incontro, and Mason Quarter.
The future is certainly bright. Buyer confidence
remains buoyant and the current positive market
landscape is expected to endure for some time.
Nathan Blackburne
Cedar Woods is well positioned to capitalise on
Managing Director
these conditions as we release new stages across
the Cedar Woods portfolio extending our sales
momentum and underpinning the Company’s
revenue growth in future years.
Nathan Blackburne, Managing Director
07
Annual Report 2021
FINANCIAL
PERFORMANCE
HIGHLIGHTS
NET PROFIT
AFTER TAX
$32.8m
TOTAL
REVENUE
7
1
0
2
8
1
0
2
9
1
0
2
0
2
0
2
1
2
0
2
$299.8m
7
1
0
2
8
1
0
2
9
1
0
2
0
2
0
2
1
2
0
2
EARNINGS
PER SHARE
40.7c
DIVIDENDS
PER SHARE
26.5c
08
7
1
0
2
8
1
0
2
9
1
0
2
0
2
0
2
1
2
0
2
7
1
0
2
8
1
0
2
9
1
0
2
0
2
0
2
1
2
0
2
Cedar Woods Properties Rushmore Green, Bushmead WA
RETURN
ON EQUITY
TOTAL SHAREHOLDER
RETURN
8.2%
Above FY2021 target return
31.9%
Outperformed All Ordinaries of 30.2% and
S&P ASX300 of 28.5%, underperformed
Small Industrials of 33.0%
PRESALE
CONTRACTS
NET BANK DEBT
TO EQUITY
$478m
Up $118m or 33%
28.3%At the lower end of
target range of 20%-75%
09
Annual Report 2021 OUR
BUSINESS
OUR HISTORY
OUR PURPOSE, VISION & VALUES
Cedar Woods was established in 1987 and listed
Our Purpose, Vision and Values inform every decision
on the ASX (Code: CWP) in 1994. Starting out as a
we make, guide our conduct internally and our
developer of master planned communities in Western
relationships with partners, customers and investors.
Australia, the company progressively branched
out into new product areas and geographies. The
Company expanded into Melbourne in 1997, then
Brisbane in 2014 and Adelaide in 2016 and now
We are proud to be a leading national property
developer, and with an ongoing commitment to our
strategy and our values, we look forward to fulfilling
our vision of becoming the best Australian property
has a significant portfolio of quality developments
company, renowned for performance and quality.
delivering residential lots, townhouses, apartments
and commercial projects.
The company is known for taking on complex, large
scale projects, adding value through planning design
and delivery and generating strong returns from
multi-year projects. As a result, it has built a
reputation as an innovative and diversified
property company with a track record
of strong financial performance,
sustained since inception.
PURPOSE
Our purpose is to create
long-term value for shareholders
through the development of
vibrant communities.
VISION
Our vision is to be the best
Australian property company
renowned for performance
and quality.
VALUES
We do what we say we’ll do.
Having integrity, being honest
and delivering on our word for
all our stakeholders.
We think about tomorrow.
Designing sustainable and innovative
products and maintaining a long term focus.
Creating community connection.
Bringing people together, fostering
connection and enriching people’s lives
through thoughtful placemaking.
We strive to succeed.
Applying a rigorous and long-term
approach in all aspects of our business to
ensure quality, stability and success.
We are people developers.
We’re committed to developing our
people so that they can thrive in
their careers.
10
Cedar Woods Properties
OUR STRATEGY
Our strategy is to grow 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.
Geography
Product Type
Price Point
Good geographic spread
Range of housing lots,
Wide range of price
of well-located projects in
apartments, townhouses and
points offered in Queensland,
our states.
commercial properties.
South Australia, Victoria and
Western Australia.
VALUE CREATION MODEL
We deliver on our strategy via our value creation model.
Property Acquisitions
Disciplined approach
to acquisitions:
y Tactical and research based
decisions to identify projects
y Rigorous assessment and
conservative assumptions
y Structure contracts to minimise
risks and optimise returns
Development
Research, design,
planning and delivery:
y Sustainable designs that
optimise quality, functionality,
environmental outcomes and
returns
y Collaborative approach with
community and authorities
y Negotiate timely value-adding
approvals
y Structure contracts to minimise
risks
y Manage construction closely
Marketing & Sales
Integrated approach to
optimise results:
y Positioning projects to
maximise demand
y Pre-sell to underwrite projects
y Quality brands and marketing
material
y Lead generation and sales
conversion
y Customer nurturing and
referrals
11
Annual Report 2021 STRATEGIC PRIORITIES
We optimise business performance through a focus on four strategic priorities.
High Performance Culture
Financial Strength
Creating a progressive, high-spirited
Optimising performance through disciplined
work environment with strong staff alignment
capital management, a commercial focus,
to values and objectives, where top talent
cost minimisation and maintaining a strong
work collaboratively and high performance
balance sheet.
is rewarded.
Operational Excellence
Earnings Growth
Being operationally strong and safe
Pursuit of earnings growth is the key metric
through renewed and integrated systems
to achieve our primary objective of creating
and technologies, having a strong corporate
long-term value for our shareholders. This may
brand with quality projects and delivering
be achieved organically, by mergers and acquisitions
sustainable projects.
or through new business areas.
12
Rushmore Green, Bushmead WA
Cedar Woods Properties FINANCIAL AND
OPERATING REVIEW
On behalf of the Board, we are
pleased to present the financial
and operating review of Cedar
Woods to shareholders.
The following summarises the results of operations
during the year and the financial position of the
consolidated entity at 30 June 2021.
2021 FINANCIALS AT A GLANCE
y Revenue of $299,751,000 up 15.0 per cent on the
prior year
y Net profit after tax of $32,834,000, up 61.1 per cent
on the prior year
cent, generating a fully franked yield of 3.9 per cent
at year end
y Earnings per share of 40.7 cents, up 60.2 per cent
on the prior year
y Total shareholder return of 31.9 per cent
NET PROFIT AFTER TAX (NPAT)
AND DIVIDENDS
In Financial Year 2021 (FY2021), the Company
delivered a profit of $32.8 million. This was up 61.1
per cent on the COVID-19 impacted result in the prior
year. This returned the Company to a trajectory of
profit growth as delivered in eight out of the last ten
years. Dividends declared for FY2021 were 26.5 cents
per share, also up substantially on the 19.0 cents per
y Total dividends of 26.5 cents per share, up 39.5 per
share in the prior year.
NPAT AND DIVIDENDS DECLARED OVER THE LAST 10 YEARS
s
n
o
i
l
l
i
M
$
50
45
40
35
30
25
20
15
10
5
0
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Dividend H1
Dividend H2
NPAT
35
30
25
20
15
10
5
0
C
e
n
t
s
13
Annual Report 2021
2021 FINANCIAL RESULTS SUMMARY
Year ended 30 June
Revenue
Net profit after tax (NPAT)
Total assets
Net bank debt
Shareholders’ equity
Key performance indicators
Year ended 30 June
Basic earnings per share
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
Net bank debt to total tangible assets (less cash)
Interest cover
Net tangible asset backing per share – historical cost
2021
$’000
299,751
32,834
651,800
113,328
400,361
2020
*Restated
$’000
260,660
20,387
644,055
142,671
376,801
% Change
15.0
61.1
1.2
(20.6)
6.3
2020
2021
*Restated % Change
¢
¢
¢
%
%
%
%
%
x
$
40.7
40.3
26.5
8.2
9.8
31.9
28.3
17.6
12.1
4.92
25.4
25.2
19.0
5.4
6.1
-2.4
37.9
22.3
5.9
4.68
60.2
59.9
39.5
2.8
3.7
34.3
(9.6)
(4.7)
6.2
5.1
1.1
29.5
28.1
Shares on issue – end of year
Stock market capitalisation at 30 June
Share price at 30 June
’000
$’000
$
81,345
80,448
545,824
421,547
6.71
5.24
* Refer to note 40 for details regarding the restatement as a result of a change in accounting policy.
FINANCIAL YEAR OVERVIEW
Despite the ongoing pandemic, Cedar Woods
started FY2021 with expectations of delivering
higher earnings than the COVID-19 impacted result
in FY2020. This outlook was supported by the then
recently introduced federal and state government
stimulus for purchasers of new housing and pre-
sale contracts on hand at 30 June 2020 totaling
$360 million, many of which settled early in the first
half of FY2021. Sales performed well in the first half,
particularly for land lots and townhouse product,
and the Company delivered a first half result of $22.4
year result of $29 million net profit after tax when it
released the half year report in February 2021.
While the WA State Government’s significant
stimulus was no longer available for new home
buyers in the third quarter of FY2021, and the
Federal Government’s stimulus had been reduced,
sales results remained positive and project delivery
programs remained largely on track for the financial
year. In light of this and the operational savings
achieved, the Board upgraded earnings guidance for
the full year to $32 million net profit after tax when it
released its third quarter update in April 2021.
million net profit after tax with forward presales of
While sales conditions nationally for land lots and
$380 million at 31 December 2020. This gave the
townhouses were strong throughout the year, sales
Board confidence to guide the market for a full
of apartments and office product, particularly in
14
Cedar Woods Properties Melbourne, were slow, although improving more
recently. The impacts of the pandemic continued
throughout the year with closed international
CAPITAL MANAGEMENT
The Company’s history of disciplined capital
borders, intermittent capital city lockdowns and
management and continued focus on its strategic
various levels of social distancing restrictions in
priority of Financial Strength continues to position
place from time to time. Closed international borders
it well to deal with the unpredictable economic
significantly reduced international students requiring
environment that the COVID-19 pandemic presents.
accommodation and eliminated new migrants.
Intermittent capital city lockdowns and various
At 30 June 2021, net bank debt stood at $113
social distancing restrictions at times impacted
million leaving approximately $94 million in undrawn
buyer sentiment and the pace at which buildings
headroom in the Company’s long-term debt
could be constructed.
Full year net profit after tax of $32.8 million was
achieved in FY2021 from total revenue of $299.8
million and a gross margin of 31 per cent. Gross
facilities to fund the development of the Company’s
existing property portfolio and make additional
land acquisitions for growth. Following a significant
number of settlements taking place in July 2021,
margin improved from 29 per cent in FY2020
facility headroom increased to more than $100 million
as a result of changes in product mix and some
at 31 July 2021.
improvement in net prices. The Company had
settlements from 19 projects in FY2021, each with
Net bank debt-to-equity at 30 June 2021 was 28 per
different profit margins and the portion of settlements
cent, at the lower end of the Company’s target debt
from each project impacting the overall gross margin
to equity range of 20 to 75 per cent. Net debt to total
for the Company.
The improved FY2021 profit result correspondingly
impacted the Company’s returns, with return on
equity of 8.2 per cent and return on capital of 9.8 per
cent exceeding the Company’s budgeted targets
for FY2021.
tangible assets less cash was 18 per cent at year end
and corporate facility interest cover was 12 times, well
in excess of minimum facility covenant of two times.
The Company continued to operate within all of its
facility covenants throughout FY2021.
The dividend reinvestment and bonus share plans
The one-year total shareholder return of 31.9 per
were in operation for the FY2020 final dividend and
cent outperformed the S&P ASX300 (28.5 per cent)
FY2021 interim dividend raising $5 million in equity
and the All Ordinaries index (30.2 per cent), although
underperformed the Small Industrials index (33.0 per
cent). Over longer periods of, two years, three years
and five years the Company’s total shareholder return
during the year. The dividend reinvestment and bonus
share plans will continue to operate for the FY2021
final dividend to be paid in October 2021.
continues to outperform all of these major indices as
PORTFOLIO HIGHLIGHTS
well as a peer group average made up of five ASX
listed residential property developers.
The combined impact of strong sales performance
in FY2021 and the significant volume of higher value
Cedar Woods’ strategy to grow a national project
portfolio diversified by geography, product type and
price point continues to prove successful.
built form developments underway contributed to
During FY2021 Cedar Woods recorded price growth
the Company’s $478 million balance of contracted
and strong sales rates across many of the projects
pre-sales at 30 June 2021, which is $118 million (or 33
per cent) higher than the same time in the prior year.
These pre-sales are expected to settle over FY2022
and FY2023.
within its portfolio including land lots, townhouses and
apartments. The Company was able to manage its
portfolio to take advantage of the strong conditions,
bringing forward stock in markets with limited supply.
15
Annual Report 2021 In Western Australia, following the stimulus sales
townhouse project in Western Australia. The delivery
peak, the Company replenished stock at several of
of apartments also continued with the successful
its land estates to finish the year with strong presales.
launch of Monarch apartments at Glenside, South
In Victoria, the Mason Quarter project recorded over
Australia, the sellout success of Lincoln apartments at
12 months of expected land sales within its first six
Williams Landing, Victoria and the completion of two
months of selling. In Queensland, the Ellendale project
other significant apartment projects in these states.
recorded strong sales rates and price growth.
Cedar Woods’ diversified portfolio helps ensure it is
The Company’s built form projects also performed
positioned to perform well through different property
well with strong price growth and sell out success
cycles across state markets.
across several stages including the Incontro
16
Grace Apartments, Glenside SA
Cedar Woods Properties 7
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17
Annual Report 2021
CORPORATE OBJECTIVES
AND PROGRESS ON STRATEGY
Cedar Woods’ primary purpose is to create value
for shareholders through the development of vibrant
communities and deliver consistent growth in net
profit and earnings per share. This year, the Company
reported a full year net profit after tax of $32.8 million
and total fully franked dividends of 26.5 cents.
The overarching strategy, as illustrated on page 11,
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 strategy is delivered
through the operation of our value creation model,
as illustrated on page 11.
The experience of dealing with the COVID-19
pandemic over the last eighteen months has
reinforced the Board’s and Management’s view that
the Company’s strategy is appropriate for current
and future economic conditions. Diversity of product
type has ensured the Company has significant
product offering available to purchasers seeking to
take advantage of government stimulus measures.
Further, with differing conditions in each state from
time to time, the benefit of its geographical diversity
is realised.
Cedar Woods’ Corporate Plan guides management’s
activities and provides a five-year outlook for
the Company, projecting earnings and other key
performance indicators. The Corporate Plan sets out
a number of key action items under each strategic
priority focused on achieving the primary purpose
and addressing key risk factors. These key actions
are implemented as performance targets by senior
executives, sales managers and other employees.
DELIVERING ON STRATEGIC
PRIORITIES
The Company continues to deliver on its four strategic
priorities of a High Performance Culture, Operational
Excellence, Financial Strength and Earnings Growth.
High Performance Culture
A focus on maintaining a high performing and
high-spirited work environment continued in FY2021,
evidenced by strong employee engagement results.
Enhanced staff training and career development
programs were implemented, helping to build the
Company’s future workforce and adapt their skills
to align with new marketing and selling tactics that
are being deployed across the business. In addition,
SuperCedar Awards were introduced to encourage
and reward employees who are living the corporate
values, with the inaugural awards presented to staff
in June 2021.
During FY2021 approximately 10 per cent of existing
staff members were promoted to more senior
roles, continuing the Company’s culture of people
development and internal promotions.
Operational Excellence
Over the past 24 months, the Company has
progressed the implementation of its Digital and
Technology Strategy. This has so far delivered
superior cyber security, workforce mobility and
productivity with new systems providing a strong
platform to scale up the business. The vision to
craft systems for the Company that can serve as
another form of competitive advantage is now well
progressed, with other transformation projects also
underway such as the integration of human resources
software and additional initiatives in digital marketing
to improve customer experience and create a more
powerful platform for lead generation and sales.
Sustainability, efficiency and quality continue to drive
project design across the portfolio. The Company
refreshed its Environment Social and Governance
(ESG) strategy during the year and will continue to
review its sustainability practices in FY2022 with
the intention to further reducing environmental and
climate change impacts across its operations.
During the year, Cedar Woods announced a national
partnership with The Smith Family – Australia’s
leading children’s education charity.
The partnership is providing support for young
Australians from disadvantaged backgrounds through
primary and secondary education. The shared vision
of Cedar Woods and The Smith Family in developing
and creating a better tomorrow, whilst providing
opportunities for young people to grow and thrive,
forms the basis of what the Company hopes will be
a strong, long-lasting partnership.
18
Cedar Woods Properties Supporting local community groups remains an
Cedar Woods has recruited additional acquisition
important part of the Company’s core values. The
resources to support this activity and intends to
Company’s Neighbourhood Grants Scheme provides
sustain its growth focus into the future.
funds for small community groups such as sporting
clubs, special interest groups and emergency
services around the country, funding and supporting
activities that play important roles in creating and
maintaining community spirit.
Financial Strength
During the year the Company completed the annual
review of its $205 million corporate finance facility
and extended the terms to 30 January 2024 for the
three-year debt ($165 million) and to 30 January
2026 for the five-year debt ($40 million). The facility is
provided by three of the ‘big-4’ banks and provides
long tenure and security of funding with the consistent
compliance of facility covenants.
Earnings Growth
The Company sustained its focus on earnings growth
through margin improvements on existing projects
and new acquisitions to augment future earnings.
Margin improvements were recorded on many of
the Company’s projects through a combination of
price growth, due to favourable market conditions,
and diligent cost management. Price increases were
recorded in a number of the Company’s projects in all
four states with some increases exceeding 10 per cent.
In Western Australia, the Company benefitted from
long-term civil construction contracts struck in 2019
to hedge against cost increases. Other states also
benefitted from a sharp focus on cost management.
During FY2021, Cedar Woods unconditionally
acquired more than 800 lots through acquisitions
in South Maclean in South East Queensland and
Wollert in Victoria. The Company has also entered
into conditional contracts to purchase another four
land holdings in South East Queensland, Victoria and
Western Australia with the potential to add a further
1,200 lots to the portfolio if contract conditions are
satisfied. An additional unconditional acquisition
of 225 lots at Frasers Rise, Victoria was secured in
July 2021. The Company expects to make further
announcements in relation to the conditional
acquisitions during FY2022.
MARKET OUTLOOK
The residential property market remains resilient
following the end of the Federal Government’s
Homebuilder program and the tapering of state
government stimulus over the second half of FY2021.
The positive conditions and stimulus programs drove
peak sales activity across the nation and have resulted
in stock shortages in many residential growth corridors.
National Australia Bank has forecast strong median
price growth averaging 18.5 per cent across all capital
cities in 2021 followed by 3.6 per cent growth in 2022.
The median house price forecast suggests continued
price growth within the Company’s projects.
According to the Australian Bureau of Statistics,
lending increased by 116 per cent to investors and 73
per cent to first home buyers over the 12 months to
May 2021. Investor demand is being driven by falling
vacancy rates and rising rental yields in capital cities
excluding Melbourne and Sydney. The first home
buyer market is being driven by a combination of low
interest rates, improving employment conditions and
the remaining government stimulus programs. The
strength in investor and first home buyer demand has
sustained the new housing market despite a closed
national border.
The Company expects upon resumption of Australia’s
migration program, a surge of new migrants will result
in a boost to demand for new housing nationwide
which could be sustained for several years.
The government stimulus gave rise to significant
construction activity nationally and this in turn has
resulted in some materials and labour shortages,
as well as increasing costs. The Company expects
building costs to continue to increase through FY2022
and will be adjusting product pricing where possible
to maintain margins. The strength of demand for new
housing has made price increases possible at many
of Cedar Woods’ projects. To date, Cedar Woods’
building contractors have been able to secure material
supplies to maintain construction programs.
19
Annual Report 2021 COMPANY OUTLOOK
National property market conditions remain buoyant
and Cedar Woods starts FY2022 in a strong position
with $478 million in presales expected to settle
over FY2022 and FY2023. Subject to the ability of
federal and state governments to effectively manage
COVID-19, the Company is targeting continued
growth in earnings.
Cedar Woods remains well placed for the medium
term with more than 8,800 undeveloped lots/units
in its development pipeline across four states,
Australia. Demand fluctuations 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.
While 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 objectives by managing both
prices and volumes through the property cycle.
maintaining the ability to respond quickly to improved
The COVID-19 pandemic has caused major disruption
market conditions.
A number of new projects are expected to contribute
to earnings from FY2023, including Mason Quarter,
Fraser Rise and Aster apartments in Victoria, Monarch
apartments in South Australia, Incontro in Western
Australia, and Greville in Queensland. Conditionally
contracted acquisitions could add a further 1,200 lots
to the project pipeline and further acquisitions are
anticipated to supplement the Company’s portfolio in
future years.
RISKS
to the economy and business globally and within
Australia, including the business conducted by
the Company. The ongoing pandemic remains a
material risk to the Company insofar as it impacts
upon economic activity, employment and migration
to Australia and hence population growth, which are
major drivers of consumer confidence and housing
demand, as well through impacts to the supply chain
by causing delays to completion of projects and
settlements as well as impacting the availability and
cost of materials. In recent times federal and state
governments have recognised the contribution of the
residential housing industry to the economy and have
The Board has established the Audit and Risk
introduced significant stimuli which has reduced the
Management Committee to assist the Board in
economic impact of the pandemic on the Company
the effective discharge of its responsibility for
and the industry.
risk oversight and ensuring that internal control
systems are in place to identify, assess, monitor and
manage risk. A Risk Management Framework has
been established to support the integration of risk
management within the business and to promote a
culture committed to building long-term sustainable
value for stakeholders.
The general risks to the Company’s 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 stance of other
regulatory bodies such as APRA, the strength of the
labour market and consumer confidence.
The Company is also exposed to the property cycles
in the metropolitan markets in which it operates, i.e.
Western Australia, Victoria, Queensland and South
Individual projects are exposed to a number of
risks including those related to obtaining the
necessary approvals for development, construction
risks and delays, pricing risks and competition.
The Company aims to balance its portfolio at any
time in favour of mature projects where the project
risks are generally diminished.
The risk management framework also seeks to
address a range of other risks that impact the
business, such as economic and political risks,
climate change risks, competition for staff and project
opportunities, and cyber risks.
While the Company has no material exposures to
ESG risks, aside from those related to COVID-19
mentioned above, the ESG report starting on page
22 provides further details on how the Company is
managing ESG risks.
20
Cedar Woods Properties Mr Say also joined the Audit & Risk Management
Committee and the Remuneration & Nominations
Committee. Following a transitionary period, Mr
Robert Brown stepped down from the Audit & Risk
Management Committee and the Remuneration &
Nominations Committee, leaving these committees
fully comprised of independent directors
Further details of the Board members are contained
in this annual financial report and the Corporate
Governance Statement which is available on the
Company’s website.
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.
In May 2021, The Board was pleased to announce
the appointment of Mr Paul Say as an independent
Non-Executive Director. With over 40 years of
experience in the commercial and residential property
sector, Mr Say brings strong corporate finance, capital
allocation and investment management capability
to the Cedar Woods Board. Located in NSW, Mr
Say holds strong networks across the property and
finance sectors.
William Hames
Chairman
Nathan Blackburne
Managing Director
21
Annual Report 2021
ESG REPORT
INTRODUCTION
Our vision is to be the best Australian property
company renowned for performance and quality.
We aim to play a positive role in society over the
long-term, through our products and services, which
are fundamental to human wellbeing in homes and
businesses, and through behaving responsibly in our
markets and in our communities.
Cedar Woods does more than create vibrant
communities. We are proud of our reputation for
y Respect indigenous and cultural heritage
y Stimulate economic investment and jobs
y Foster cooperative stakeholder relationships
y Activate the communities we create
y Foster diversity, equal opportunity and career
development in the workplace
y Provide a safe work environment for all who work on
Cedar Woods projects
y Instill our values and promote an ethical business
culture through strong governance
being environmentally and socially responsible. We
This section communicates our progress and
continually look for ways to:
y Reduce our ecological footprint
y Promote affordable housing
achievements on sustainability, community
outcomes and governance, benefiting those
affected by our actions.
INTEGRATED APPROACH
The link between our values
and ESG objectives
Achieving our vision, purpose and strategic
priorities while upholding our corporate values
is facilitated by our commitment to robust risk
management; unwavering commitment to our
stakeholders; culture of integrity, fairness
and diversity; and reduction of contributors
to climate change in our business and
throughout our projects.
ENVIRONMENT
We think about
tomorrow.
SOCIETY
We deliver on our word
for all our stakeholders.
We create community
connection.
GOVERNANCE
We are committed to
achieving the highest
standards of Corporate
Governance.
22
Cedar Woods Properties KEY ESG OBJECTIVES & STRATEGIC RESPONSES TABLE
Our fit-for-purpose ESG strategy focuses on the ESG matters that are most relevant to our operations, industry and
stakeholders and takes into account ESG reporting trends, standards and practices relating to our industry and
ESG reporting and disclosure guidance. Further details are provided on the following pages.
ESG Matter
Governance
Strategic Response
Leadership and Management
y Board and Committees
y Executive Management
y Risk Management
Spotlight on Ethics
y Code of Conduct
Digital and Technology Strategy
y Digital Transformation
y Ethics and Responsible Business Practices
y Modern Slavery
Society
Shareholders and Investors
Our People
Customers
y Customer Centric Brand Strategy
y Cyber Security
y Value Creation
y Transparency
y High Performance Culture
y Health and Wellbeing Program
y Opportunity, Diversity and Inclusion
y COVID-19 Response
y Work, Health and Safety
y Retention and Career Progression
y Customer Engagement
y Digital Transformation
y Product Value
Communities
y Community Connection
y Our Broader Community - Smith Family Partnership
y Design Quality and Liveability
y Diversity and Inclusiveness
y Activation and Sponsorship
y Heritage
Suppliers
y Fair and Ethical Procurement
y Modern Slavery
y Performance
y Work, Health and Safety
Government and Regulators
y Land and Built Form Delivery
y Economic Impact
y Community Engagement
y Collaborative Partnerships
23
Annual Report 2021 Environment
Climate-related Risk
(Policy, Legal, Technology, Market and
Reputation)
y Financial Impact Assessment
y Risk Assessment
y Adaption and Mitigation
Climate-related Opportunity
Resource Efficiency
y Corporate Carbon Footprint
Energy Source
y Energy Efficiency
y Water Efficiency
y Renewable Energy
Products, Services and Market
y Customer Focus
Resilience
y Credentials and Capability
y Interdependencies
24
Grace Apartments, Glenside SA
Cedar Woods Properties GOVERNANCE - FY2021 HIGHLIGHTS
Taskforce on
Climate-related
Financial Disclosures
(TCFD)
recommendations incorporated
into risk management framework
ESG
Strategy
adopted to improve
Board oversight
New east-coast based
Director appointed
Annual
review of
policies
Implementing roadmap
for best-practice in
cyber security
On-going digital
transformation
in data analytics, automation
and digital marketing.
Staff training
on ethical conduct and
modern slavery
Updated
Corporate
Plan to guide
growth
Our governance framework is the foundation upon which the Company operates and defines the processes by
which authority is exercised and controlled.
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Board of Directors
The Company’s Directors exemplify our commitment to good corporate governance and the long-term interest
of shareholders. They are a diverse group who bring a strong combination of experience and skills aligned
with our vision, values, strategy and strategic priorities. The Board is committed to the highest standards
of corporate governance, of which further comprehensive details may be found in the annual Corporate
Governance Statement at https://www.cedarwoods.com.au/Our-Company/Governance.
The Board has established committees to oversee a range of matters pertaining to ESG priorities:
y The Audit and Risk Management Committee is responsible for financial reporting, risk management (including
‘ESG risks’) and external audit; and
y The Remuneration and Nominations Committee is responsible for matters relating to Board composition, human
resources, remuneration, succession, inclusion and diversity.
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Annual Report 2021
Executive Management
The Company’s management structure is intended to encourage effective leadership that is consistent with
corporate standards and promotes a strong corporate culture. The Executive Team is the Company’s most
senior management body and is responsible for preparing and implementing the Corporate Plan and managing
operations.
Risk Management
Among its many responsibilities, the Board / Audit and Risk Committee oversees risk management, with a focus
on more significant risks, including ESG risks. It has adopted a Risk Management Policy Framework which
incorporates a range of tools to assist in the identification, management, and monitoring of risks in the business.
All major decisions are guided by a comprehensive risk assessment, using the framework, together with risk
mitigation strategies, where necessary.
Risk Management Framework
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RISK REPORTING
& MONITORING
Tools
Risk Committee Report
MD Report
Risk as part of
‘business as usual’
RISK
IDENTIFICATION
Tools
Risk Reviews
Policies & Procedures
Risk Management Tools
RISK
MANAGEMENT
Tools
Board Risk Register
Project Risks Registers
Other Risk Registers
Policies and Procedures
RISK
ASSESSMENT
Tools
Risk Impact Matrix
Risk Likelihood Matrix
Risk Rating Matrix
Risk Register
Risk Appetite
Statement
Strategic Repsonse
Corporate Governance Framework
Corporate Plan and Supporting Strategies
Audit and Risk Management Committee
Strong Financial Management
Remuneration and Nomination Committee
Risk Management Framework
Risk Management Policy
Risk Register
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Cedar Woods Properties
FY2021 Highlights
During FY2021 the Remuneration and Nominations Committee and the Board considered succession planning
after the retirement of Ron Packer at the 2020 AGM and in May 2021 appointed Paul Say as an independent, non-
executive director. Paul also joined the two Board committees.
The senior management team was strengthened by the establishment of the newly created key roles of National
Acquisitions Manager and HR Business Partner. Management refreshed the corporate plan and two meetings were
held with the Board to specifically address the 5-year corporate strategy.
The Audit & Risk Management Committee reviewed and revised the Company’s Risk Framework and performed
deep dives into cyber-related, financial and environmental risks. The Company refreshed a number of corporate
policies including the Conflict of Interest Policy and IT Security policies. The environmental strategy was refreshed
with regard to the disclosure requirements of the Task Force on Climate Change Disclosures (TCFD).
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Code of Conduct
A comprehensive set of standards of conduct expected of all employees, including Directors, is provided in the
Code of Conduct. The Company has zero tolerance for corrupt practices and has a proactive approach to ethics
and accountability throughout its policies and practices.
Ethics and Responsible Business Practices
Conducting business with the utmost honesty, integrity and respect is integral the Company’s ESG priorities.
The Company’s values include, ‘Do what we say we will do’ – for all of our stakeholders. This is built on the
values of trust, reliability, dependability, honesty and reputation which form the basis of how employees
conduct business.
Modern Slavery
Interactions with key suppliers and business partners adhering to our policy and processes that address our
approach to identifying modern slavery risk and outline steps for mitigating modern slavery and human trafficking
in our operations.
Strategic Repsonse
Code of Conduct
Conflicts of Interest
Whistle Blower Policy
Anti-Bribery and Corruption Policy
Continuous Disclosure Policy
Insider Trading
Modern Slavery Policy
FY2021 Highlights
The Company reviewed its purpose, vision and values and introduced a 5th value ‘We create community
connection’ to recognise the important role it has in nurturing communities at its developments.
The Company assessed its operations and supply chain for modern slavery risk and provided its first Modern
Slavery report and conducted training for staff throughout the business on this important ethical issue.
27
Annual Report 2021
Ariella Conservation Wetland, Brabham WA
Digital Transformation
The Company has substantially progressed its Digital and Technology Strategy which provides a a high level of
resilience and ability to quickly respond to the immediate workplace risks posed by COVID-19, mainly through
pursuing a “cloud first” approach allowing all users to work remotely. The vision is embed into our ESG Strategy
systems that provide a source of advantage for the Company.
Customer Centric Brand Strategy
We devote significant resources to executing our Customer Centric Strategy and leveraging the solid foundations
we have built. Our customer focus drives us to build systems and processes that enhance customer engagement
through a strong understanding of their journey with the Company. We continue to build our digital capability by
embedding leading digital talent and systems to increase operational efficiency and productivity. Our automation
will provide platforms that capture and analyse data and lead to better insight and informed decision making.
Cyber Security
Investors, employees, and customers trust the Company with their data, so we safeguard their private information
with the highest level of care and diligence. We maintain a comprehensive data protection, privacy and
cybersecurity program, which effectively manages and protects the Company’s Personally Identifiable Information
and sensitive corporate information.
Strategic Repsonse
Digital & Technology Strategy
IT Security Policy
Cyber Security strategy
IT Acceptable Use Policy
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FY2021 Highlights
Cedar Woods is committed to the reduction of paper use to support the environment through reducing the use of
carbon, water, energy and native forests involved in paper production. The company has implemented a number of
initiatives to reduce the amount of paper being printed across the business by nearly 60%. The last 12 months has
seen the introduction of electronic expense systems, a focus on digital marketing material over print and promoting
the use of Microsoft Teams to collaborate on documents to achieve this.
28
Cedar Woods Properties
SOCIETY – FY2021 HIGHLIGHTS
Awards
UDIA WA
Environmental
excellence
Bushmead
UDIA WA Judges
Choice Award
Hamptons Edge
Urban Developers
Award (VIC)
Development
of the Year
Jackson Green
87%
Participation in staff survey
Over
$150m
total development spend and over
1,000 jobs
created in the economy
Smith Family
Partnership
Cedar Woods joins
the Smith Family to make
a difference in the lives of
disadvantaged children
Creating
Community
Connection
New Corporate Value
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internal
promotions
We are people developers
Maintaining strong stakeholder relationships is fundamental to Cedar Woods’ long-term sustainable success.
We have identified the following major stakeholder groups for our business and the related strategic initiatives:
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Value creation
We create long-term value for our shareholders.
Transparency
We interact and engage with shareholders through various forums, including half-year and annual reporting,
annual meeting of shareholders, investor presentations, web forums and ASX disclosures and announcements.
Strategic Repsonse
Shareholder returns
Continuous disclosure policy
Shareholder and Investor relations
FY2021 Highlights
Returns to shareholders are detailed in the ‘Financial Performance Highlights’ on page 8 of the annual report.
29
Annual Report 2021
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High Performance Culture
Our strategic priority is to create a progressive, high-spirited work environment with strong staff alignment to
values and objectives, where top talent works collaboratively and high performance is rewarded.
We undertake an annual internal survey to gauge staff engagement and views. Engagement represents the level
of enthusiasm and connection staff have with the Company. It’s a measure of how motivated people are to put in
extra effort and a sign of how committed they are to stay.
There are a number of staff communication platforms, including the quarterly Operational Updates and ‘Woodsy’,
our intranet platform which enable staff to keep up to date with the latest news and access company policies
and resources.
A ‘Culture Club’ operates in each state to organise team building and social events.
Health and Wellbeing Program
The Company promotes a strong health and safety culture with access to psychology and mental health support
services as part of its wellbeing program as well as providing staff with free weekly physical exercise sessions.
Opportunity, Diversity, and Inclusion
As a national property developer, we are committed to a positive, diverse and inclusive workplace which
encourages strong and productive relationships. The Company is committed to providing access to equal
opportunity at work, based on fostering a corporate culture that embraces and values diversity and inclusion and
allows people to feel safe when trying new things.
COVID-19 Response
The challenge of COVID-19 demanded an extra level of agility and resilience. The team came together, supported
each other and demonstrated the value of partnership and collective purpose. The Company has invested heavily
in technology. As a result, the national transition to remote working was managed smoothly and efficiently, with
everyone adapting quickly.
Work, Health and Safety
By prioritising the health and safety of our employees and contractors, the Company builds a culture of trust and
accountability. Our health and safety policies and practices also take into consideration the protection of the
surrounding community. Senior management are accountable for the health and safety performance across the
Company’s portfolio of projects. Cedar Woods’ Board also receives regular reporting on the Company’s health
and safety performance.
Retention and Career Progression
Consistent with our corporate value ‘We are people developers’, we value our people and their long-term success
and, therefore, we actively seek opportunities to keep them engaged and develop professionally. To this purpose
we focus on internal career development and promotion, enabling staff to develop new skills, broaden their
exposure and build relationships across the Company. Internal career progress is preferred, where appropriate.
Strategic Repsonse
Company Vision, Values and Priorities
COVID-19 Response Initiatives
Equal Employment Opportunity Policy
Health and Wellness Programs
Diversity and Inclusion Policy
Remuneration benchmarking and reviews
Employee Engagement
Staff training strategy
SuperCedar employee recognition awards
Performance management
Occupational WHS System, Reporting and Audit
Cedar Woods Advance (Career Progression)
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Cedar Woods Properties
FY2021 Highlights
The proportion of women employees currently sits at 52 per cent. The number of women in senior management is
currently at 32 per cent. The number of women on the Board is two out of six, or 33 per cent.
We are cognisant that we need to promote and recruit more women to senior positions, which is reflected in our
employee development and recruitment programs.
We were pleased that in our most recent survey 87 per cent of our people completed the employee survey. Staff
engagement is currently 71 per cent. Survey results saw a high level of interest in additional training on: people
management; mental health and wellness; and emotional intelligence. This saw the commencement of the
Company’s ‘Health and Wellbeing’ program.
Cedar Woods recognises that many of its staff require working arrangements that are outside of a traditional work
structure. Over 20 per cent of the workforce is working under the flexible working arrangements policy allowing
people to benefit from flexible working hours and working from home.
Our good health and safety record continued through the effective operation of our work, health and safety systems
resulting in no serious staff injuries or fatalities as a result of any failure of the Company’s WHS system.
Cedar Woods Advance, our career progression program was introduced during 2021, providing staff with the
opportunity to constructively manage their career advancement with the support of the company. There were 19
internal promotions during the financial year.
SuperCedar Awards were introduced to encourage and reward employees who are living our corporate values, with
the inaugural awards presented to staff in June 2021.
Greville Apartments, Wooloowin QLD
31
Annual Report 2021 Metrics and Targets
Gender Diversity
40%
52%
30%
32%
30%
0%
30%
33%
Proportion of women
employed in the whole
organisation
Proportion of women
in senior management
positions
Proportion of women in
executive positions
Proportion of women
on the Board
Long term objective %
FY21 Actuals %
Staff Engagement
Staff Retention
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Williams Landing, Vic
Cedar Woods Properties
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Customer Engagement
Customer Engagement is driven through various physical and digital platforms as well as our Customer Service
function that provide customers with product guidance, assistance and issues resolution. It also helps the Company
better understand customer needs and trends and drives improvements in customer satisfaction.
Digital Transformation
Digital Transformation will see the launch of more comprehensive and contiguous marketing platforms that are
designed for customer data collection during their engagement with our business, along the entire customer journey.
Product Value
Customers are at the centre of everything we do. Product Value is created for our customers through the delivery of a
quality land or built form product that is designed around the latest environmental and sustainability, adding to liveability.
In some instances, our communities include or are integrated into local employment, retail and sport/recreational
centres which foster relationships with businesses and local organisations and enhance the lifestyle of our residents.
Strategic Repsonse
National Marketing and Communication Strategy
Community Development Programs
Customer Inclusion Initiatives (affordability, disability, community diversity, transition to retirement)
Data driven decision making approach to Company’s operational model
Customer Service Offering
FY2021 Highlights
Feedback received from our customers from customer surveys have indicated high net promoter scores. In FY2022
we will implement a national net promoter score methodology and program across our portfolio, with the aim of a
nationally consistent approach to NPS surveys and data collection.
Our customer relationship management (CRM) system continues to be refined to enhance data analytics and learn
more about our customers’ requirements.
We have embarked on a digital strategy to more effectively capture and manage our leads and enquiries, and a
corporate marketing strategy to better co-ordinate national marketing initiatives.
Feedback received from our community engagement provides us vital feedback to help further improve our products.
Bushmead Sales Office, Bushmead WA
33
Annual Report 2021
Hamptons Edge at Mariners Cove, Dudley Park WA
Community Connection
Included in our highlights, the Company recently adopted the new Community Value, ‘Creating Community
Connection’, recognising that our projects and decisions bring people together, foster connections that enrich the
lives of people through the places we create.
Our Broader Community – The Smith Family Partnership
This year the Company formed a national community partnership with The Smith Family – Australia’s leading
children’s education charity. Our partnership aims to assist disadvantaged Australian Children get the most out of
their education.
Design Quality and Liveability
Through our projects we seek to create communities that are safe, healthy and enjoyable places to visit, work
and live. This is premised on best-practice urban planning and environmental design to meet lifestyle expectations.
Many of our projects include physical infrastructure and community amenities, such as educational facilities, retail
centres, employment centres and sport and recreational facilities that improve the lifestyle of those who live in
our communities.
Diversity and Inclusiveness
Our projects offer a range of products that not only cater for various budgets but also include specific product
types suitable for affordable housing initiatives, specialist disability housing, aged care and retirement.
Activation and Sponsorship
We create value for our customers through their purchase of land or built form product. We create value for our
communities through our direct provision of amenities, infrastructure public spaces and jobs. We continue to build
on this foundation by implementing resident onboarding initiatives and community grants for local businesses and
resident associations.
Heritage
Often we inherit a legacy from older communities, in the form or land or buildings with indigenous or cultural
heritage significance. Heritage is a focus for the Company as we maintain a strong track record of respecting
culture and heritage through restoration, recognition, project themes and branding.
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Strategic Repsonse
Company Purpose, Values and Vision
Affordable and Diverse Housing
Smith Family Partnership
Community Sponsorship
Awards
Respecting culture and heritage
34
Cedar Woods Properties
FY2021 Highlights
The Company adopted a new corporate value, ‘Creating Community Connection’ recognising that each day our
team makes decisions that bring people together, foster connections that enrich the lives of people through the
places we create.
We have committed to directly supporting 100 students through The Smith Family’s Learning for Life program, which
is delivered across 91 communities around Australia. The Learning for Life program provides school students and
their families with financial assistance for education essentials such as uniforms, school supplies and excursions;
tailored personal support from a Smith Family team member; and access to extra out-of-school learning and
mentoring programs. Sharing a common goal, The Smith Family and Cedar Woods are committed to developing
and creating a better tomorrow, whilst providing opportunities for young people to thrive.
We work hard to ensure that the planning, urban design and architectural responses of our projects lead to a high
quality liveable built environment that is responsive to the environment and community needs. A measure of our
success is how our projects rate in industry awards, measured against our peers. This year the Company won three
prestigious awards:
y UDIA WA Environmental excellence – Bushmead
y UDIA WA Judges Choice Award – Hamptons Edge
y Urban Developers Award (VIC) Development of the Year – Jackson Green
In FY2022 we aim to develop a national target for affordable housing products and include SDA in at least 30 per
cent of our apartment developments.
Since its inception, the Company’s Neighbourhood Grants program has donated more than half a million dollars to
support a range of community projects, organisations and clubs that operate in the localities of our projects.
$50,000
donated to local community groups in FY2021
Proud partnership
with The Smith Family
Williams Landing Football Club, Williams Landing Vic
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Fair and Ethical Procurement
The Company is committed to ethical, accountable and transparent procurement that maintains probity and
fairness. To achieve balanced environmental, social and economic outcomes, we rely on our network of diverse
and multidisciplinary suppliers. When delivering our projects, our suppliers are required to contribute to our forums
on innovation, cost efficiency, while maintaining quality outcomes. We also support the payment of our suppliers
on fair payment terms.
Modern Slavery
The Commonwealth Modern Slavery Act requires companies to publish annual Modern Slavery Statements. The
Company is committed to implementing effective systems and controls to ensure Modern Slavery is not taking
place in any of our supply chains.
Performance
The Company continues to undertake comprehensive contractor reviews every six months. Evaluation criteria
include overall quality, timeliness, cost efficiency, etc. Material suppliers are assessed for financial health as part of
the on-boarding process and prior to the issue of significant new contracts.
Work, Health and Safety
By prioritising the health and safety of our employees and contractors, the Company builds a culture of trust and
accountability. Our WH&S policies and practices also consider the protection of the surrounding community.
Senior management is accountable for the health and safety performance across the Company’s portfolio of
projects. Cedar Woods’ Board also receives regular reporting on the Company’s health and safety performance.
Strategic Repsonse
Supplier onboarding process
Contractor Quality and Financial Reviews
Modern Slavery Policy
Occupational Work, Health and Safety Policy and Procedures
Code of Conduct
Stakeholder and industry events
FY2021 Commentary
During the year we completed our first Modern Slavery report under the Modern Slavery Act 2018. The report is
available on our website at www.cedarwoods.com.au/Our-Company/Social-Responsibility. During the year, suppliers
representing 80 per cent of our year to date expenditure, as at the date of the review, were assessed for modern
slavery risk. Employees responsible for procurement were trained in order to help us meet our obligations.
We continually engage with our suppliers through our procurement and contract management process. Twice each
year we assess our suppliers on a range of metrics that define the quality of their services. Our most recent review of
our suppliers’ performance resulted in 98 per cent passing or exceeding the required benchmark.
COVID-19 has had a significant impact on the national economy and on the supply chains that operate. The Company
has experienced some delays during construction, increases in cost. There is growing risk of supply shortages and
cost increases for materials.
Tragically, in May 2021 the Company was informed that a supplier to one of the Company’s contractors working on the
St. A site in Melbourne, Victoria was fatally injured whilst supplying product to the contractor in question. This is the
first fatality at a Company owned site in its operating history. The investigation into the circumstances of this tragedy
is ongoing with the full support of the Company and the contractor. Based on the Company’s understanding of the
events, it believes it has fully complied with its safety obligations. The safety and wellbeing of our people, contractors
and their suppliers always remains Cedar Wood’s first priority and we will continue with uncompromising focus on the
safety of our workforce and contractors.
36
Cedar Woods Properties
Metrics and Targets
Supplier quality review score
BENCHMARK
98% of suppliers
pass biennial
reviews.
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98%
98%
Modern Slavery
The first Modern
Slavery Statement
is produced.
The Rivergums, Baldivis WA
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Land and Built Form Delivery
The Company plays a key role in the supply of land, housing and infrastructure, nationally. Our projects contribute
to land supply, increase the number homes and businesses near public transport and facilitate urban renewal.
They also contribute to the provision of essential civil and community infrastructure for broader public benefit.
These deliverables are in accordance with government urban growth strategies in each state.
Economic Impact
Importantly, we create value for government and regulators by generating private sector investment and jobs,
which is an essential part of the nation’s COVID-19 recovery strategy. We create further value through payment of
fees and taxes.
Community Engagement
Our projects often require engagement with existing local communities. The Company seeks to engage in a
meaningfully way, providing opportunity for consultation to positively influence project outcomes.
Collaborative Partnerships
The Company seeks opportunities for collaborative partnerships in land development and urban renewal projects.
We have a number of collaborative projects with government agencies which align with government strategic
priorities and objectives, including diverse and affordable housing. We seek to ensure that such collaborations
are mutually beneficial and are built on respect and common understanding.
Strategic Repsonse
Joint Venture Projects
Regular State and Local Government liaison meetings
Participation in regulatory and policy review through industry forums
Membership with industry advocacy groups (HIA, UDIA, Property Council)
FY2021 Highlights
The 2021 financial year saw the Company spend over $150 million in development spend, on all projects nationally.
We work on the formula that for every $1 million spent on civil or built form construction, seven Full Time Equivalent
(FTE) jobs are generated. This is comprised of two direct FTE construction jobs, three indirect FTE jobs, in supporting
industries such as engineering, machinery and materials, and two induced FTE jobs, in sectors that provide goods and
services to meet the consumption needs of the direct and indirect jobs created.
On this basis, Company development spend contributed to the creation of over 1,000 jobs, nationally, with 497
FTE jobs in Victoria, 315 FTE jobs in Western Australia, 217 FTE jobs in South Australia and 31 FTE jobs in Queensland.
In early 2021, Cedar Woods welcomed the news that its bid to develop land around the Swanbourne (WA)
train station progressed to Stage 2 under the Western Australian State Government’s Market Led Proposal (MLP)
process. The MLP policy provides an innovative opportunity for the State to work with the private sector to
create jobs and stimulate the local economy. Cedar Woods achieved ‘first mover’ advantage in a process to select a
developer for a best practice transit-oriented development on land around the Swanbourne train station.
The Company holds membership with the following industry and business associations:
y Urban Development Institute of Australia
y Property Council
y Housing Industry Association
38
Cedar Woods Properties
ENVIRONMENT – FY2021 HIGHLIGHTS
State
Award
for Environmental Excellence
at Bushmead (WA)
7
Transit-Oriented Projects
With a new acquisition at
Wollert ‘Mason Quarter’ (VIC)
setting the context for the
future train station
500,000
trees planted at Bushmead
721 lots
sold with energy and
water efficiency guidelines
Ellendale (QLD)
recognised for Excellence
in Land Management
Jackson Green
TOD (VIC)
wins ‘Transit Oriented
Development of the Year’
$114,000
spent on rainwater tank rebates
$1.2
million
spent on water-wise
landscaping packages
CLIMATE RELATED FINANCIAL
DISCLOSURES
Cedar Woods acknowledges that the physical
risks of climate change, along with the challenge
of transitioning to a lower carbon world, present a
material risk.
For these reasons, the Company is developing a
The following observations and assumptions are noted:
y While the Commonwealth Government has
committed to meeting the broad Paris Agreement
emission targets, there is little guidance on how
the targets will be met. There is no formal direction
as to what form climate change policy will take
and the effect it will have on the property
development industry.
climate change adaptation strategy, consistent with
y The property development sector is strongly
the Financial Stability Board’s Taskforce on Climate-
Related Financial Disclosure (TCFD) for addressing
climate change-related risks and opportunities. This
strategy seeks to quantify the impacts of climate
change on the Company’s ‘Value Creation Model’,
reflect the property development sector, and
identify strategies to adapt to and mitigate against
the impacts of climate change. Furthermore, it will
manage associated risk and identify metrics against
which the Company will report on progress and
achievements.
Climate-Related Risk Assessment and
Opportunities
Using the TCFD approach, the following provides an
assessment of climate-related risk, in the context of
Cedar Woods’ core business and value creation model.
regulated, with various mitigation and adaption
measures already being implemented at State
levels, including:
a. Sea Level Rise and Coastal Erosion: State
government coastal planning policies make
provision for the latest data on sea level rise
and storm surge; mapping of low-lying areas;
and establishes the need for coastal process
assessments to determine the need for coastal
protection and defence initiatives.
b. Changes in temperature and extreme heat
events: minimum requirements for the design,
construction and performance of residential
buildings are set by the Australian Building
Codes Board. Buildings are classified on a star-
based scale under the National House Energy
Rating Scheme (NatHERS). For commercial
buildings, the Building Energy Disclosure Act
39
Annual Report 2021 requires commercial buildings above a certain
floorspace to meet energy efficient requirements
through the National Australian Built Environment
Rating System (NABERS) certification scheme.
Other relevant elements of building design,
considering climate change, are energy efficiency
and water sensitive design.
c. Bushfire: The state governments update bushfire
risk mapping and have various land use planning
requirements relating to fire mitigation (exclusion
zones) and adaption (use of fire-retardant
materials in building construction). These policy
measures are undergoing increasing scrutiny
in light of recent catastrophic bushfire disasters
across the country.
d. Storms, cyclones and flooding: The
Commonwealth and State governments update
rainfall and runoff guidelines (looking at rainfall
intensity) flood mapping and identification of
cyclone zones where appropriate construction
standards are required.
y The discussion on the following pages on risk
relates to both climate change scenarios (>1.5°C
or >2°C). It is difficult to respond to the various
climate change scenarios as they relate more to a
scientific assessment of climate projections and the
contribution the property sector makes to those
projections. The assessment below has a broad
universal application.
y The need for effective mitigation and adaptation
strategies through the property sector needs to be
driven from the top, through policy and regulatory
change, perhaps assisted by guidance and initiatives
of industry bodies, rather than relying on the diverse
and varying initiatives of individual companies.
y Cedar Woods’ climate-related risk assessment is
focussed on project outcomes and more significantly
relate to a combination of direct delivery impacts
(loss of native bushland) and the on-going impacts of
urban development (associated travel and household
emissions over the 40-year lifecycle of buildings). At
this stage, a low priority has been given to corporate
operational impacts.
y The highest levels of perceived risk in the analysis
below are in the areas of: Policy risk – bushfire
(transitional risk); Water scarcity (transitional risk) and
Construction costs (including cost of delays) due to
severe weather (acute risk)
Board and management oversight
of climate related risks
The Board has overall responsibility for the risk
management framework and is responsible for
decisions in relation to strategies and key risks. In
turn, this authority has been delegated in part to the
Audit Risk and Management Committee (ARC), which
assists the Board to meet its risk management and
compliance obligations. The ARC considers reports
addressing Cedar Woods’ risk culture, its risk appetite
framework, its strategic risk profile, the risk registers
and emerging or notable risks, including those related
to climate change.
Major business proposals brought to the Board
are accompanied by comprehensive due diligence
incorporating risk analysis, including, where relevant,
climate-related risks. Climate-related issues are also
considered when reviewing the Corporate Plan,
annual budgets and business plans. In the future,
climate related performance targets will form part
of the corporate balanced scorecard and individual
performance metrics of staff.
The Executive Team has developed the sustainability
strategy ‘Future Proof’ and is responsible for its
delivery. Each member of the Executive Team has
specific responsibilities related to sustainability,
including initiatives related to climate related risks
and opportunities.
How Cedar Woods identifies, assesses
and manages climate-related risk
The Executive Team is responsible for developing
and facilitating the risk management framework,
advising and training the business on risk
management, and consolidating risk reporting to the
ARC and the Board.
At each stage in the project lifecycle, significant
risks (including climate-related risks) are identified
by project team leaders as part of risk assessment
procedures. The Executive team continuously liaises
with all levels of the organisation, across projects to
ensure risks are appropriately identified, assessed,
treated and monitored.
Existing and emerging regulatory requirements
related to climate change (e.g. bushfire regulations)
are incorporated into overall risk management, risk
registers and risk reporting.
40
Cedar Woods Properties Risk Assessment
Climate Related Risk
Financial Impact
Risk Adaptation & Mitigation
Policy Risk: Sea Level
Rise and Coastal
Erosion.
Time horizon: Medium to
long-term
Policy Risk: Changes
in temperature and
extreme heat events.
Time horizon: Medium to
long-term
Policy Risk: Bushfire.
Time horizon: Short to
long-term
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Policy Risk: Rainfall,
Storms, Cyclones and
Flooding.
Time horizon: Medium to
long-term
Policy: Water Scarcity.
Time horizon: Short to
long-term
Increase in coastal
setbacks, development
levels, coastal protection
measures, reduced
dwelling yield
High construction costs
associated with more
stringent performance
requirements associated
with NatHERS (residential)
or NABERS (commercial)
construction requirements.
Increased landscaping
/ reduced development
footprint. More costly built
form responses.
Increased project approval
uncertainty, loss of
developable area (exclusion
zones) and increased
cost of construction (fire
mitigation / retardant
materials), reduced land
value.
Accommodating worst-
case rainfall and flooding
scenarios will increase cost
of stormwater and drainage
infrastructure and increase
loss of developable land –
for retention /detention
Increasing cost of water
and cost associated with
securing non-potable water
sources
Policy: Enhanced
climate change
reporting and
disclosures
Time horizon: Short to
long-term
Increased resources to
respond to requirements for
increased climate change
disclosures and reporting.
Increased investor scrutiny
and activism, and potential
for limits to access to
capital for failure to respond
to business community
Measures addressed in State policies
relating to coastal protection and land
use planning. Cedar Woods has limited
exposure to coastal and estuary locations.
All buildings within Cedar Woods projects
comply with national design, construction
and performance rating requirements.
In land estates, energy efficiency and water
sensitive design is encouraged through
design guidelines.
Measures addressed in State policies
relating to medium density, such as:
reducing ‘urban heat island’ effect; focus
on natural cooling / breezeways; reduction
in hard surfaces; use of lighter-coloured
materials; and mature landscaping / tree
canopy.
More rigorous policy measures under
continuous review. Bushfire management is
becoming determinative, over-riding normal
land use and planning controls. Cedar
Woods monitors the implications on existing
and new projects and considers exposure
to native bushland at the acquisition phase.
All Cedar Woods projects comply with
water management strategies and plans
and install appropriate water management
infrastructure based on current rainfall and
runoff data.
Evidence suggests non-potable
groundwater for irrigation is becoming
scarce. Cedar Woods has responded by
using scheme water (as interim measure)
and increasing reliance on low water
nature-scape or no water use xeriscape
landscaping techniques.
In land estates, water wise landscaping
is promoted. In some cases, rebates
provide incentive for installation of rainwater
tanks, to reduce reliance on potable water
supplies.
Third-pipe reticulation is used to distribute
recycled water in most land estates in
Victoria.
Evidence indicates increase in ethical
investing, shareholder activism and
proxy firms linking ESG performance to
recommendations on AGM resolutions.
Cedar Woods is responding by
implementing an enhanced ESG strategy
and increasing disclosures.
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Annual Report 2021 Climate Related Risk
Financial Impact
Risk Adaptation & Mitigation
Legal / Liability Risk
Time horizon: Medium to
long-term
Technological Risk
Time horizon: Medium to
long-term
Evidence suggests that
existing homes directly
exposed to climate-related
risk, (particularly when
threatened by coastal
processes and bushfire)
are adversely impacted by
higher insurance premiums
(or inability to insure certain
risks), lower property
valuation and reluctance
by financial institutions to
provide finance
Out of date technology and
lack of innovation. Cost
of retrofitting to achieve
compliance
Market: Change in
Consumer Preferences
Time horizon: Short to
long-term
Reduced market share,
sales and return on
investment
Reputational Risk.
Time horizon: Short to
long-term
Physical Risk: Sea
Level Rise and Coastal
Erosion.
Time horizon: Medium to
long term
Loss of company reputation,
credentials and branding.
Loss of engagement with
staff
Cost of protective
measures, upgrade and
repair
Physical Risk: Bushfire.
Time horizon: Short to
long-term
Loss and cost of
rehabilitation, replacement,
upgrade and repair
Compliance with firebreak
requirements
Extra cost and time to
construct physical assets
Loss and cost of
rehabilitation, replacement,
upgrade and repair
Physical Risk: Increase
in construction time and
costs due to increase in
severe weather
Time horizon: Short to
long-term
Physical Risk: Rainfall,
Storms, Cyclones and
Flooding. Direct loss
or damage to property
assets.
Time horizon: Short to
long-term
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New property development is subject to
the latest climate change data reflected
in coastal protection, bushfire and
drainage and flooding management plans
/ requirements. Risk relates more to older
established dwellings in vulnerable locations
Urban and built-form design response and
incorporation of climate-related impact
mitigation and adaption can be constantly
updated and applied throughout the life of a
Cedar Woods project
Setting aside considerations relating to
location and price, new housing in estates
that are compliant with climate-related
policy settings (energy efficient design,
bushfire mitigation, drainage and flood
management etc) respond better to shifting
consumer preference than housing stock
with inferior design qualities and in more
vulnerable locations. Cost of retrofitting
older housing stock can be cost prohibitive
Performance is enhanced through
adherence to ESG strategy and transparent
reporting
Cedar Woods has limited exposure to
vulnerable coastal locations
Cedar Woods considers WH&S and duty
of care implications for communications
plans and procedures in relation to staff,
contractors and residents associated
with bushfire threat to current projects in
vulnerable locations
Cedar Woods provides additional time
to construction budgets, feasibilities and
timetables to allow for severe weather
All Cedar Woods’ projects comply
with stormwater drainage and flooding
infrastructure and flooding requirements
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Cedar Woods Properties CLIMATE-RELATED OPPORTUNITIES
Efforts to mitigate and adapt to climate change also
create opportunities. The TCFD identifies the following
asset types may lead to diversification and better
positioning to a lower-carbon economy, and
areas of opportunity:
y Resource efficiency: achieving direct cost savings
y Energy source: growing global investment in
renewable energy technologies
y Products and services: innovation in new low-energy
products and services may improve competitiveness
and capitalise on shifting consumer preferences
y Markets: opportunities for new markets and
y Resilience: where companies improve their adaptive
capacity to respond to climate change.
The TCFD recommends the formulation of
specific metrics and quantifiable targets to assess
and manage relevant climate-related risks and
opportunities. These will be developed as part of
the Company’s newly adopted ESG Strategy and
reported against in FY2022 reporting.
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Corporate Carbon Footprint
Increasing attention is being applied to minimising the carbon footprint of corporate operations. Cedar Woods
will consider how carbon footprint mapping can be used to better understand business impacts. Cedar Woods
considers climate-related risks across the lifecycle of its projects. Emissions largely relate to the operational cost
of urban development and the 40-year lifecycle of buildings. Cedar Woods’ focus on transit-oriented development
makes a significant contribution to promoting public transport use and lower emissions from private vehicle use.
Energy Efficiency
Cedar Woods helps households enhance energy efficiency and reduce energy costs. In our land development
estates we facilitate climate responsive subdivision lot layout. In the building processes which follow, we influence
energy efficiency through our design guidelines and ‘Sustainable Living Guide’.
Water Efficiency
Increasing innovation is being applied to water sensitive urban design through project initiatives which retain
stormwater for reuse and achieve reduction in mains water consumption. Third-pipe reticulation is used to
distribute recycled water in most land estates in Victoria.
FY2021 Highlights
The past year has seen a significant change in working habits through our response to COVID-19. In particular,
widespread work-from-home arrangements, reduced in-person meetings and almost no interstate travel, has
significantly cut work-related travel and associated costs. Future carbon footprint mapping may identify further
initiatives that cut carbon emissions and contribute to the Company’s cost-efficiency measures.
Many of our energy and water initiatives are realised at the building stage. FY2021 was dominated with lot sales,
where we influence buildings through recommended best practice criteria through Design Guidelines, or by providing
rebate incentives for renewable energy options, energy efficiency measures or rainwater tanks. We facilitate a climate
responsive subdivision lot layout, where the potential benefit is experienced once buildings are constructed.
Managing the total water cycle consistent with Better Urban Management Guidelines is fundamental to every Cedar
Woods project. Design Guidelines promoting water efficiency apply to all residential lot sales. Over $1.2 million was
paid in the financial year to lot purchasers for water-wise landscaping packages across land estates.
43
Annual Report 2021
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Innovative renewable power solutions are in the market and an increasing number of projects offer purchasers
substantial savings in energy costs by participating in renewable energy schemes and income generation
through the sale of surplus power back to the grid. All apartment projects in Victoria incorporate embedded
networks and solar farms on roof tops.
FY21 Highlights
At Bushmead (WA), the project has achieved UDIA EnviroDevelopment (Energy) accreditation through a range of
initiatives including climate responsive solar design; provision of renewable energy options; high-efficiency fixtures
and appliances; and initiatives to manage peak load demand. Over $115,000 was paid in FY2021 to lot purchasers for
photovoltaic solar cells at Bushmead.
Customer Focus
Demand for Cedar Woods’ products is primarily driven by location and price but there is growing
customer preference for water and energy efficient initiatives and other sustainability benefits as part of
housing packages.
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FY2021 Case Study
Monarch Apartments at Glenside (SA) highlights
growing purchaser preference for more sustainable
lifestyles. Located just over two km from the
Adelaide CBD residents benefit from high frequency
public transport and a five minute walk into the
capital centre. Already the winner of numerous
awards in Masterplanned Development, Residential
Development and Urban Renewal, the Monarch
Apartments continue to build on sustainability
credentials by offering residents:
y 7-Star NatHERS Energy Rating
y Double glazed windows
y Solar powered communal areas
y Electric car charging
y Dual water meters (remotely read) for each
apartment
y Automated natural ventilation to corridors
y Bicycle parking with secure digital access control
44
Cedar Woods Properties
Credentials and Capability
Achieving various targets relating to water and energy efficiency, and other innovative sustainability outcomes
is a pre-requisite to eligibility for government joint venture projects in some states and add to the Company’s
capabilities and credentials.
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Interdependencies
When assessing climate-related risk, it is important to consider the unique interdependencies with other important
land development considerations, specifically transport, natural environment and adaptive reuse, recycling and
waste minimisation, which are identified in Cedar Woods’ Environmental Management and Climate Change Policy.
y Transport. Transition to a low-emissions economy does not just look at the performance of buildings. The
location of Cedar Woods’ projects are increasingly middle-inner suburban locations integrated with high-frequency
public transport, encouraging people to use more public transport and replace car trips with ‘active transport’
options, such as walking and cycling (e.g. Glenside, Williams Landing / Town Centre, Jackson Green, St A,
Fletcher’s Slip and Glenside), providing low emission transport choices to the occupant.
y Natural Environment. The Company has a strong track record as being the ‘Environmentally Responsible
Developer’, with a high number of accreditations and awards for environmental excellence. While land
development has environmental impacts, it is not without significant investment in conservation, rehabilitation,
decontamination and on-going environmental management.
y Adaptive Reuse, Recycle and Waste Minimisation. Adaptive reuse, recycling and reducing waste relates to
more efficient use of resources as well as reduced emissions associated with production processes and transport.
Cedar Woods has a strong track record in the adaptive reuse of heritage buildings, the clean-up of contaminated
infill sites and the use of recycled materials in civil works. Reduced waste relates to more efficient use of resources
as well as reduced emissions associated with production processes and transport. The Company has a strong
track record in the clean-up of contaminated sites and buildings (Glenside, Carine, Subiaco, Bushmead, Banbury
Village, Byford on the Scarp, Ariella etc).
FY2021 Highlights
Cedar Woods continues its focus on urban infill in brownfield locations and connected to high-frequency public
transport, including train stations or bus transit. For decades, Cedar Woods has refined its skills in delivering
transit-oriented developments, evident by Jackson Green (VIC), winning the 2020 ‘Development of the Year – New
Communities’ in The Urban Developer Awards.
Ellendale, Upper Kedron QLD
45
Annual Report 2021 Jackson Green (VIC)
The Project will incorporate 151 townhouses and
over 400 apartments across four buildings. A short
distance to the Clayton train station, residents are
connected to a great range of amenities including
retail, medical and education, such as Monash
University. Sustainability is at the heart of Jackson
Green with 4,740m2 of public open space, retained
native vegetation, rainwater storage, kill switches
and future proofing for solar. So far, all completed
apartment buildings have achieved between
6.6 – 7.1 star energy ratings under NatHERS.
The Huntington Apartments at Jackson Green
includes the Ohmie Go Tesla3 car share, with a
booking platform for residents to further reduce
reliance on private cars.
Ellendale (QLD)
Ellendale (QLD) was recognised in the prestigious
2021 Australian Institute of Landscape Architects
Awards, being awarded Excellence in Land
Management. Cedar Woods has committed
to retaining and rehabilitating 91ha of natural
and open areas. Rehabilitation works included
revegetation planting, translocation of significant
plant species from development areas into
rehabilitation areas, seed propagation from site,
and fauna infrastructure such as nesting boxes,
gliders poles and fauna underpasses to creating
additional habitat and fauna movement pathways.
46
Bushmead (WA)
Bushmead (WA) was winner of the 2020 UDIA (WA)
Award for Environmental Excellence. The project
includes Cedar Woods rehabilitating and managing
188ha of bushland for conservation. This year
marks the planting of 500,000 trees as part of
revegetation initiatives. It has achieved UDIA’s
6-leaf EnviroDevelopment Accreditation.
Some of the reuse and recycle initiatives at
Bushmead include:
y 100 per cent road base - 18,000m3 - from
recycled material, mainly crushed concrete
y Reclaimed and repurposed products used in
parks and nature play areas
y Trees milled for seating, bollards, paths,
boardwalks, and for use in nature play areas
y Retaining walls and decking made from recycled
products
y All cleared vegetation mulched and re-used on-site
Stripped topsoil - 10,000m3 - is respread on lots and
Public Open Space.
Cedar Woods Properties DIRECTORS’ REPORT
Your directors present their report on the consolidated entity consisting of Cedar Woods Properties Limited (‘the
company’ or ‘Cedar Woods’) and the entities it controlled (together ‘the consolidated entity’ or ‘group’) at the end
of, or during, the year ended 30 June 2021.
a. Directors
The following persons were directors of Cedar Woods 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 (Independent Director, resigned 4 November 2020)
Valerie Anne Davies (Independent Director)
Jane Mary Muirsmith (Independent Director)
Paul Gilbert Say (Independent Director, appointed 3 May 2021)
Nathan John Blackburne (Managing Director)
The qualifications, experience and other details of the directors in office at the date of this report appear on pages
48 to 50 of this report.
b. Principal activities
The principal continuing activities of the consolidated entity over the course of the year ended 30 June 2021 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 2020 of 6.5 cents
(2019 – 13.5 cents) per fully paid share, paid on 30 October 2020 (2019 – 25 October 2019)
Interim fully franked ordinary dividend for the year ended 30 June 2021 of 13.0 cents
(2020 – 12.5 cents) per fully paid share, paid on 30 April 2021 (2020 – 24 April 2020)
2021
$’000
2020
$’000
5,175
10,653
10,322
10,056
15,497
20,709
Since the end of the financial year the directors have recommended the payment of a final fully franked ordinary dividend
of 13.5 cents (2020 - 6.5 cents per share) to be paid on 29 October 2021 out of retained profits at 30 June 2021.
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 13 of this annual financial report.
e. Business strategies and prospects for future financial years
The consolidated entity will continue property development operations in Western Australia, Victoria, Queensland
and South Australia.
Cedar Woods is well positioned moving into FY2022 with strong pre-sales, modest debt, substantial funding
capacity and a diverse portfolio of well-located developments.
47
Annual Report 2021 f. Significant changes in the state of affairs
While the consolidated entity continues to be impacted by the social and political response to the COVID-19
pandemic, the company benefited from government stimulus provided to its residential home buyer customers.
As a consequence of this and other factors, the consolidated entity’s revenue and profit was significantly improved
compared to the previous year. Further details can be found in the financial and operating review, commencing
on page 13 of this annual financial report. There were no other significant changes in the state of affairs of the
consolidated entity during the year.
g. Matters subsequent to the end of the financial year
In July 2021, the group settled on its contract to acquire a 40.7ha property in South Maclean, Queensland located
45km south of the Brisbane CBD for $14.7m, and completed due diligence and unconditionally contracted to
acquire a 14.6ha site in Fraser Rise in Melbourne’s west for $30.5m.
Refer to item (c) of this Directors’ Report for details of the dividend recommended by directors since the end of the
financial year.
No other matters or circumstances have arisen since 30 June 2021 that have significantly affected or may
significantly affect:
y the consolidated entity’s operations in future financial years; or
y the results of those operations in future financial years; or
y 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)
y Chairman of the Board of directors, non-executive director
Mr Hames was appointed to the Board on 23 March 1990. He is a co-founder of Cedar Woods, 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 more than thirty years.
Other current listed company directorships and former listed company directorships in the last three years:
None.
Mr Robert S Brown, MAICD, AIFS
y Deputy Chairman of the Board of directors, non-executive director
Mr Brown was appointed to the Board on 18 August 1988. He 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
48
Cedar Woods Properties experience as a director of these companies and other listed entities and has served as a director of Cedar Woods
for over thirty years.
Other current listed company directorships and former listed company directorships in the last three years:
None.
Ms Valerie A Davies, FAICD
y Non-executive director
y Chair of the Remuneration and Nominations Committee
y Member of the Audit and Risk Management Committee
Ms Davies was appointed to the Board on 21 September 2015. She is a professional company director with
broad experience across the spectrum of public and private companies, government boards and community
organisations. Apart from Cedar Woods Properties Limited, she is also currently a non-executive director of ASX-
listed Event Hospitality and Entertainment Limited.
Ms Davies previous Board positions include HBF, lluka Resources, ASG Group, and Integrated Group (now
Programmed), Tourism Western Australia, Tourism Australia, Gold Corporation and the TAB (WA), as well as
Screenwest and Fremantle Hospital & Health Service.
Apart from the boardroom Ms Davies’ career spans more than 30 years across a range of industries including
media, marketing and television production. A specialist provider of communications and strategic issues
management services, she has worked at the highest level with numerous tier 1 national and international business
organisations addressing the complexities of issues management, communications, coaching and mentoring.
Ms Davies is a member of Chief Executive Women (CEW), a former Telstra Business Woman of the Year (WA) and a
past Vice-President of the Australian Institute of Company Directors (WA).
Ms Davies is a non-executive, independent Director.
Other current listed company directorships and former listed company directorships in the last three years:
Event Hospitality & Entertainment Ltd.
Mrs Jane M Muirsmith, B Com (Hons), FCA, GAICD
y Non-executive director
y Chair of the Audit and Risk Management Committee
y Member of the Remuneration and Nominations Committee
Mrs Muirsmith was appointed to the Board on 2 October 2017. She is an accomplished digital and marketing
strategist, having held several executive positions in Sydney, Melbourne, Singapore and New York.
She is Managing Director of Lenox Hill, a digital strategy and advisory firm and is a non-executive director of
Australian Finance Group Limited (AFG), the Telethon Kids Institute and Chair of Healthdirect Australia.
Mrs Muirsmith is a Graduate of the Australian Institute of Company Directors and a Fellow of Chartered Accountants
in Australia and New Zealand, with an audit and accounting background together with deep expertise in digital
transformation. Mrs Muirsmith is a member of the Ambassadorial Council UWA Business School and is a former
President of the Women’s Advisory Council to the WA Government.
Mrs Muirsmith is a non-executive, independent Director.
Other current listed company directorships and former listed company directorships in the last three years:
Australian Finance Group Limited.
Mr Paul G Say FRICS, FAPI
y Non-executive director
y Member of the Audit and Risk Management Committee
y Member of the Remuneration and Nominations Committee
49
Annual Report 2021 Mr Say was appointed to the Board on 3 May 2021. With over 40 years of experience in the commercial and
residential property sector, Mr Say brings strong corporate finance, capital allocation and investment management
capability to the Cedar Woods’ Board. Mr Say was previously Chief Investment Officer at Dexus Property Group
and prior to that he was Head of Corporate Finance with Lendlease Corporation.
Mr Say has a Graduate Diploma in Finance and Investment and a Graduate Diploma in Financial Planning. He is a
Fellow of the Royal Institute of Chartered Surveyors, Fellow of the Australian Property Institute and a Licensed Real
Estate Agent (NSW, VIC and QLD).
Located in NSW, Mr Say holds strong networks across the property and finance sectors and is currently a
Non-Executive Director of ASX-listed ALE Property Group, SGX-listed Frasers Logistics & Industrial Fund and
the Cameron Brae Group. His is also a Board Member of Women’s Community Shelters and a Panel Member of
the NSW Urban Growth Advisory Board.
Mr Say is a non-executive, independent Director.
Other current listed company directorships and former listed company directorships in the last three years:
ALE Property Group, Frasers Logistics & Industrial Fund
Mr Nathan J Blackburne, BB (Curtin), AMP (Harvard), GAICD
y Managing Director, executive director
Mr Blackburne was appointed to the Board on 18 September 2017. He has worked since 1993 in various sectors of
the property industry including valuations, asset management, commercial leasing and property development.
He commenced his career with Cedar Woods in 2002 with the mandate to establish and grow the company in
Melbourne. Starting off as State Manager for Victoria, he later led the expansion of the company into Brisbane and
Adelaide to become State Manager for Victoria, Queensland and South Australia.
In 2016, Mr Blackburne was appointed as Chief Operating Officer for the company and in September 2017 was
appointed to the position of Managing Director.
Mr Blackburne has a Bachelor of Business degree majoring in Valuations and Land Economics and is a Graduate of
the Australian Institute of Company Directors. He is also a Graduate of Harvard Business School in Boston having
completed their Advanced Management Program. Mr Blackburne is a member of the Presbyterian Ladies College
Masterplanning, Design & Infrastructure Committee.
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
on 24 June 1998. He is a member of the Institute of Chartered Accountants in Australia and New Zealand and is a
member of the Australian Institute of Company Directors. He brings to the company a background of over twenty-
six years in financial management in the property industry, preceded by employment in senior roles with major
accountancy firms.
k. Shares under option
No shares have been issued as a result of the exercise of options during the year and up to the date of this report.
Unissued ordinary shares of Cedar Woods Properties Limited under option at the date of this report are as follows:
Date options granted
Number under option
Exercise price
Expiry date
4 November 2020
16,232
zero
30 June 2023
The options were issued to the Managing Director under the defferred short term incentive plan. No option
holder has any right under the options to participate in any other share issue of the Company or any other entity.
No options were granted to the directors or any KMP of the company since the end of the financial year.
50
Cedar Woods Properties l. Directors’ interests in shares
Directors’ relevant interests in shares of Cedar Woods 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
Valerie A Davies
Jane M Muirsmith
Paul G Say
Nathan J Blackburne
Interest in ordinary shares
10,491,103
7,818,633
16,278
18,001
14,500
83,951
Nathan J Blackburne also has an interest in zero-price options under the deferred short term incentive plan and
performance rights under the executive long term incentive plan, details of which are set out in the remuneration
report within this report.
m. Committees of the Board
As at the date of this report Cedar Woods had the following committees of the Board:
Audit and Risk Management Committee
Remuneration and Nominations Committee
J M Muirsmith (Chair)
P G Say
V A Davies
n. Meetings of directors
V A Davies (Chair)
P G Say
J M Muirsmith
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 2021, and the numbers of meetings attended by each director:
Board meetings
Meetings of Committees
Audit and Risk Management
Remuneration and Nominations
Number of meetings held:
W G Hames
R S Brown
R Packer****
V A Davies
J M Muirsmith
P G Say*****
N J Blackburne
9
9
9
3
9
9
2
9
* Not a member of this committee.
**Member of committee for 2 meetings
***Member of committee for 4 meetings
****Retired on 4 November 2020
*****Appointed on 3 May 2021
5
1*
3**
3
5
5
-
5*
6
6*
5***
2
6
6
1
6*
51
Annual Report 2021 DIRECTORS’ REPORT: LETTER TO SHAREHOLDERS FROM THE CHAIR OF THE
REMUNERATION & NOMINATIONS COMMITTEE (THE COMMITTEE)
Dear Shareholders,
Consideration of remuneration matters for FY2021 has continued to be influenced by COVID-19. In the
Financial and Operating Review section we detail how Cedar Woods operations have been further impacted by
the pandemic. The company welcomed government support by way of stimulus, provided to the property sector.
These influences are reflected in the outcomes in the “balanced scorecard” in section r) of this report. The balanced
scorecard sets out the company’s FY2021 objectives and records performance against targets as assessed by
the Board.
In seeking to align shareholders’ expectations regarding incentives, pay and performance in these unprecedented
times, we continue to engage with shareholders and proxy advisers to ensure best practice with all our
stakeholders. Please find below the main remuneration outcomes for the year and further details are provided in
the Remuneration Report.
Review of
the executive
remuneration
framework
Fixed
remuneration
Short-term
incentives
(“STIs”)
Long-term
incentives
(“LTIs”)
In FY2021 the Committee benchmarked executive remuneration levels and structures against the
market thereby ensuring that remuneration levels and structures are competitive in an environment
where the competition for talent continues to be very high around the country.
For FY2021 the Managing Director’s (MD’s) and other executives’ fixed remuneration was maintained at
the same level as the previous year, the Committee taking the view that this was appropriate given the
circumstances prevailing under the pandemic.
FY2021 STI opportunities were also maintained at the same levels as in the prior year. The company
had updated and simplified its balanced scorecard of measures for determining the STI awards in the
previous year and the scorecard underwent minimal changes in FY2021. Scorecard sections have been
grouped into financial and non-financial categories, within the relevant strategic priority areas. Part of
the Managing Director’s STI is deferred into equity as detailed later in this report.
The LTI plan continues to operate for the executives and has two vesting conditions: a) a three year
service condition and b) two performance conditions measured over a three year period: 50 per cent 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 strategy.
The relative TSR performance condition was chosen, as it offers a means 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.
Non-Executive
Director (“NED”)
fees
The potential maximum aggregate NED remuneration for FY2020 was $750,000, as approved by
shareholders at the FY2014 AGM. Chair and NED fees were maintained at the same level as in FY20.
Total NED fees paid for FY2021 were $564,585.
It was pleasing to note that shareholders voted overwhelmingly in favour of the FY2020 Remuneration Report at the
2020 Annual General Meeting, with 99.1 per cent of votes cast in favour.
I look forward to answering any questions you may have at our 2021 Annual General Meeting on 3 November.
Yours faithfully,
Valerie A Davies
Chair - Remuneration and Nominations Committee
52
Cedar Woods Properties DIRECTORS’ REPORT - REMUNERATION REPORT
The directors present Cedar Woods’ FY2021 Remuneration Report which sets out remuneration information for the
directors and other key management personnel (“KMP”) for the year ended 30 June 2021.
The information provided in this remuneration report has been audited as required by section 308(3C) of the
Corporations Act 2001.
o.
Introduction
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 2021. Unless otherwise
indicated, the individuals were KMP for the entire financial year. For the purposes of this report, the term “executive”
includes the managing director and senior executives of the company.
KMP
Position
Non-Executive Directors (“NEDs”)
W G Hames
R S Brown
R Packer
V A Davies
J M Muirsmith
P G Say
Executive Director
N J Blackburne
Senior Executives
P Archer
L M Hanrahan
P S Freedman
Non-Executive Chair
Non-Executive Deputy Chair
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Managing Director (“MD”)
Chief Operating Officer (“COO”)
Chief Financial Officer (“CFO”)
Company Secretary
Term as
KMP
Full year
Full year
Part year
Full year
Full year
Part year
Full year
Full year
Full year
Full year
Changes since last year
R Packer resigned at the 2020 AGM on 4 November 2020. P G Say was appointed on 3 May 2021.
Changes since the end of the reporting period
There were no changes to KMP after the reporting date and before the date the annual report was authorised for issue.
p. Remuneration governance
Role of the Remuneration and Nominations Committee
The Remuneration and Nominations Committee (The Committee) is a committee of the Board. In relation to
remuneration matters, it is responsible for making recommendations to the Board on:
y the over-arching executive remuneration framework;
y remuneration levels of the MD and other executives;
y operation of incentive plans and key performance hurdles for the executive team; and
y NED fees.
53
Annual Report 2021 The 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 Committee periodically obtains independent remuneration
information to ensure executive remuneration packages and NED fees are appropriate and in line with the market.
The Corporate Governance Statement provides further information on the role of the Committee and may be found
on the company’s website under the Our Company/Governance link.
Use of remuneration advisors
In May 2021, the remuneration committee engaged BDO to review its existing remuneration policies and to provide
recommendations on executive remuneration design. BDO’s fee was $23,000 plus GST for these services.
BDO has confirmed that any remuneration recommendations have been made free from undue influence by
members of the group’s key management personnel. The following arrangements were made to ensure that the
remuneration recommendations were free from undue influence:
y BDO was engaged by, and reported directly to, the chair of the remuneration committee. The agreement for the
provision of remuneration consulting services was executed by the chair of the remuneration committee under
delegated authority on behalf of the board.
y The report containing the remuneration recommendations was provided by BDO directly to the chair of the
remuneration committee; and
y BDO was permitted to speak to management throughout the engagement to understand company processes,
practices and other business issues and obtain management perspectives. However, to ensure the consultants
remained independent, members of management were precluded from requesting services that would be
considered to be a ‘remuneration recommendation ‘ as defined by the Corporations Act 2001.
As a consequence, the Board is satisfied that the recommendations were made free from undue influence from any
members of the key management personnel.
Clawback of remuneration
Vested and unvested STI’s & LTI’s are subject to potential clawback based on the Board’s judgment:
STI (cash)
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.
STI
(deferred)
at any time prior to, or at, the final vesting date of the award and will take account of factors such as any
material misstatements of financial results or instances of non-compliance with Cedar Woods’ policies.
LTI
at any time prior to, or at, the final vesting date of the award and will take account of factors such as any
material misstatements of financial results or 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 FY2020 Annual General Meeting (“AGM”)
At the 2020 AGM, 99.1 per cent of eligible votes cast were in favour of the FY2020 Remuneration Report.
54
Cedar Woods Properties q. Executive remuneration policy and framework
The information contained within this section outlines the details pertaining to the executive remuneration policy and
framework for FY2021.
(i) Principles and strategy
Company purpose
To create long-term value for shareholders through the development of vibrant communities
Remuneration strategy linkages to company purpose
The Board ensures our approach to executive reward
satisfies the following key criteria for good reward governance
practices:
y Competitiveness and reasonableness
y Acceptability to shareholders
y Alignment of executive remuneration to company
performance
y Transparency of the link between performance and reward
To attract, motivate and retain high performing individuals:
y The remuneration offering rewards capability and
experience
y Reflects competitive reward for contribution to growth in
shareholder wealth
The framework is aligned to shareholders’ interests by
having:
y STIs (cash & deferred) linked to current year performance
and subject to clawback
y LTIs linked to both long term external (relative total
shareholder return (“TSR”)) and internal (earnings per
share (“EPS”) growth) performance. LTIs are also subject
to clawback.
Component
Vehicle
Purpose
Link to performance
Fixed
remuneration
Comprises base salary,
superannuation and
non-monetary benefits
To provide competitive fixed
remuneration set with reference to role,
market and skills and experience of
individuals
Group and individual
performance are considered
during the annual remuneration
review process
n
o
i
t
a
r
e
n
u
m
e
r
l
a
t
o
T
STIs
Paid in cash
Rewards executives for their
contribution to achievement of
company outcomes
No guaranteed fixed
remuneration increases are
included in executives’ contracts
Fixed remuneration may be
phased to market benchmark
for new appointments,
conditional on performance
Linked to the Corporate Plan
and achievement of personal
objectives established at the
start of the year
Equity based STI
grants awarded in
Zero-price options
Rewards executives for their
contribution to the creation of
shareholder value over the medium
term
Vesting of Zero-price options
is dependent on a further one
year of service after the initial
performance period
LTIs
Equity based LTI
grants awarded in
Performance Rights
Rewards executives for their
contribution to the creation of
shareholder value over the longer term
Vesting of 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 Committee).
55
Annual Report 2021
(ii) Approach to setting remuneration
The company aims to reward executives with a level and mix of remuneration appropriate to their position,
responsibilities and performance within the company and aligned with market practice.
The approach is generally to position total remuneration competitively, having regard to direct industry peers, both
listed and unlisted, and other Australian listed companies of a similar size and complexity.
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 Committee will continue to review the level of fixed and ‘at risk’ pay in FY2022 with the objective of ensuring
that executive remuneration continues to meet the expectations of shareholders and candidates in a market that is
highly competitive for talent. In light of COVID-19, the Committee froze FY2021 KMP fixed remuneration and target
STI at FY2020 levels.
The graphs below illustrate the remuneration mix based on maximum opportunities for FY2021.
Managing
Director
COO
CFO
Company
Secretary
37%
13%
17%
33%
53%
20%
27%
62%
65%
14%
24%
19%
16%
Legend
Fixed Pay
Cash STI
Deferred STI
LTI
STI in the above graphs are based on 100% of the maximum opportunity. LTI’s may be awarded up to the target opportunity.
(iii) Details of incentive plans
Short-term incentives (STI)
Key features of the current STI plan are set out below.
56
Cedar Woods Properties
Managing Director
How is the STI
delivered?
45% of the STI is delivered in cash and 55% of the STI is deferred by way of a grant of zero-price options
under the Deferred Short Term Incentive (DSTI) Plan.
What STI’s are
available and
what are the
performance
conditions?
The STI awarded is based on the Committee’s assessment of the company’s overall performance using the
Balanced Scorecard system referred to in section r) Executive remuneration outcomes for FY2021 below.
Subject to board discretion, in order for any STI to be payable, the following hurdles (triggers) must be
achieved:
y NPAT trigger: NPAT to equal or exceed 90% of the budget
y Safety trigger: No reportable incident resulting in serious injury under the relevant Occupational Health &
Safety Act in CWP premises or sites as a result of failure of the company’s Work, Health & Safety system.
A performance rating of up to 150% of the STI opportunity is available to reward personal performance when
it exceeds expectations, at the Board’s discretion.
How is
performance
assessed?
On an annual basis, after consideration of performance against set balanced scorecard objectives, the
Chairman of the Board and Chair of the Committee recommends to the Board the amount of STI to be paid
to the MD.
Based on the recommendation of the Remuneration & Nominations Committee, the Board exercised
discretion with respect to the FY2021 balanced scorecard result, taking into account:
y The impact of COVID-19 and government stimulus on the property sector and the Company
y Short term results in the context of historical results and the longer term outlook
y Stakeholders’ expectations in the current economic environment
Based on the Board’s determination of overall performance, the MD received 75% of his STI opportunity in
FY2021 (FY2020 – 40%). For details refer to r) Executive remuneration outcomes for FY2021 below.
What happens
in the event
of change of
control
If a Change of Control Event occurs prior to the vesting of an award, unless the Board determines otherwise,
a pro-rata number of the MD’s unvested awards will vest immediately based on the proportion of the period
that has passed at the time of the relevant change of control event, and the extent to which any applicable
performance conditions have been satisfied (or are estimated to have been satisfied) at that time, unless
the change of control event occurs after the end of the performance period (the first year), in which case full
vesting of unvested awards will occur, to the extent to which any applicable performance conditions have
been satisfied (or are estimated to have been satisfied) at that time.
Other executives
How is the STI
delivered?
Cash
What STI’s are
available and
what are the
performance
conditions?
How is
performance
assessed?
What happens
if an Executive
leaves Cedar
Woods?
Each executive has a target STI opportunity depending on the accountabilities of the role and impact on
organisational performance.
The STI plan provides as follows:
a. Up to 50% of the bonus based on personal performance, with the actual percentage awarded based
on the executive’s overall rating measured against personal objectives as determined in the annual
performance review.
Meeting expectations generally provides for a performance rating between 80% and 100%. Performance
ratings of up to 150% of the personal component are available to encourage and reward personal
performance when it exceeds expectations.
b. Up to 50% of the cash incentive awarded based on the Committee’s assessment of the company’s
overall performance using the Balanced Scorecard system referred to in section
r) Executive remuneration outcomes for FY2021 below.
In order for any STI to be payable under the company component, the following hurdles (triggers) must be
achieved:
y NPAT trigger: NPAT to equal or exceed 90% of the budget
y Safety trigger: No reportable incident resulting in serious injury under the relevant Occupational Health &
Safety Act in CWP premises or sites as a result of failure of the company’s Work, Health & Safety system.
On an annual basis, for senior executives, the Committee will seek recommendations from the MD before
making its determination.
Based on the Company’s and individuals’ performance, no executive received more than 95% of their STI
opportunity in FY2021 (FY2020 – 40%).
Executives who resign prior to the end of the financial year generally forego their STI entitlement. The Board
has discretion in this regard.
57
Annual Report 2021 Long-term incentives (LTI)
Key features of the LTI plan are as follows:
Why have a LTI plan?
The LTI plan builds a sense of business ownership and alignment which benefits all shareholder
interests. It encourages a greater focus on sustainable long-term growth and seeks to attract
and retain key executives.
Who participates?
MD and other Executives. NEDs are not eligible to participate in the LTI plan.
What LTI’s are available?
Each participant has a maximum LTI opportunity depending on the accountabilities of the role
and impact on company performance.
How is the LTI delivered?
Awards under the LTI plan are made in the form of performance rights, which provide, when
vested, one share for each performance right at nil cost. At the discretion of the Board the LTI
awards may be satisfied in cash rather than shares.
How are the number of
rights determined for each
LTI grant?
The number of performance rights allocated for each participant is calculated by reference to
the target LTI opportunity outlined in the prior section. For the LTI, the target opportunity is the
maximum opportunity.
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 financial year. This fixes
the maximum number of shares and the actual number will vest in accordance with the
performance conditions set out below.
When does the LTI vest?
The Board will determine the outcomes at the end of the three-year performance period, with
vesting, if any, occurring once results are released and within a trading window. Once vested,
participants may trade 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
rights:
If the participant ceases employment with Cedar Woods on termination for cause, unvested
rights will normally be forfeited.
If the participant ceases employment in other circumstances (for example, due to resignation,
illness, total or permanent disablement, retirement, redundancy or other circumstances
determined by the Board), unvested rights 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 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 rights to remain ‘on foot’ on
cessation of employment).
What happens in the event
of change of control
Unless the Board determines otherwise, a pro-rata number of the participant’s unvested rights
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.
Do participants receive
dividends on LTI grants?
No dividends are paid on unvested LTI awards.
Can a participant deal with
or trade their performance
rights before vesting?
No.
58
Cedar Woods Properties 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 included in this index. 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 and is an appropriate hurdle as it aligns the experience of shareholders and
executives.
This index was chosen, rather than a peer group, as there are a limited number of companies
with similar operations and in recent years the number of these has reduced even further
through takeovers and changes to business models and operations.
Participants will only derive value from this component of the LTI if the company’s TSR
performance is equal to or 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:
as reported by a company at the most recent
financial-year end preceding the calculation date.
Weighted number of shares on issue:
the weighted number of shares on issue for the
financial year.
The relevant inputs when setting the EPS target range are generally:
y The earnings and EPS targets contained in the company’s Corporate Plan, particularly with
reference to the most recent internal five-year forecasts;
y The level of stretch associated with those Corporate Plan targets;
y Any earnings guidance that has been provided to the market;
y Shareholder and analyst (individual and consensus) expectations.
y The rate of growth in the Australian economy and the performance of the property sector.
The vesting schedule for this component of the LTI in the FY20 Plan was as follows:
EPS compound annual growth rate
Percentage of EPS-tested rights vesting
<3%
3%
Between 3% - 5%
> = 5%
Nil
50%
Pro-rata between 50% and 100%
100%
59
Annual Report 2021 The vesting schedule for this component of the LTI in the FY21 Plan was as follows:
EPS compound annual growth rate
Percentage of EPS-tested rights vesting
<10%
10%
Between 10% - 20%
> = 20%
Nil
50%
Pro-rata between 50% and 100%
100%
At commencement of each three-year plan, the Committee will consider the appropriate EPS target range and the
level of payout if targets are met. This may include setting any maximum payout under the LTI plan and minimum
levels of performance to trigger payment of LTI. The EPS target range, once set, remains in place for the three-year
performance period. The EPS target range was increased for the FY21 plan in view of the Covid-impacted result
achieved in FY20, the objective to improve profits moving forward and the economic outlook.
r. Executive remuneration outcomes for FY2021 (including link to performance)
Performance against STI balanced scorecard objectives
The table below provides a summary of the FY2021 balanced scorecard objectives and performance of the
company 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 value creation model as described on page 11.
Strategic Priority
& Measure
Financial Strength
Annual performance
and balance sheet
strength
Total Metric
Outcome
Net Profit After Tax
(NPAT)
NPAT of $32.8m exceeded the
Company’s budget
Performance
assessment
Achieved
Settlements
Revenue
Total settlements exceeded budget.
Achieved
Reported revenue was below budget
Not achieved
Return on Equity
Return on equity was 8%, above budget
Achieved
50%
Return on Capital
Borrowings
Return on capital was 10%, above
budget
Borrowings maintained within target
debt/equity range of 20 – 75%
and finance facilities extended and
maintained within covenants
Cost reduction program
Identified cost savings exceeded an
internal benchmark
Earnings Growth
Measures of future
financial health of the
Company
Presales
New projects
20%
Presales of $440m at 30 June exceed
prior year level of $360m
The company successfully acquired 2
new projects, equalling target, assisting
the replenishment of the project pipeline.
Achieved
Achieved
Achieved
Achieved
Achieved
Project cost overruns
Project development costs overruns
exceeded an internal benchmark
Not achieved
60
Cedar Woods Properties Strategic Priority
& Measure
Operational
Excellence
Measures of
customer and investor
satisfaction and risk
management
High Performance
Culture
Manage leadership
pool and strive
for strong staff
engagement and
team improvements
Total Metric
Outcome
20%
Strong customer net
promoter score
Investor perception
Product quality
Risk management
program
Compliance with the
work, health and safety
system
Employee engagement
Based on surveys the Company
exceeded its customer net promoter
score targets
Based on post roadshow surveys and
feedback the Company is perceived well
in the investor community
The company measures the quality
in the supply chain according to an in
house rating system and met internal
benchmarks
Risks managed under the company’s
risk management framework with some
risks elevated as a result of COVID-19
WHS risks monitored and there was no
reportable incident resulting in serious
injury as a result of any failure of the
Company’s WHS system
Performance
assessment
Achieved
Achieved
Achieved
Partially
achieved
Achieved
Based on staff survey, staff highly
engaged in their roles exceeded internal
benchmark
Achieved
10%
Retention of executives
and senior management
The retention rate was below an internal
benchmark
Not achieved
Gender and diversity
target
Gender diversity meets target overall
however the Company is seeking to
improve gender diversity in senior
positions
Partly achieved
The following table outlines the proportion of maximum STI earned and forfeited by executives in relation to FY2021
and the maximum STI that was available.
Total earned $
Total earned of target %
Total forfeited of target %
Total forfeited of target $
Target STI opportunity $
Total earned of maximum %
Total forfeited of maximum %
Total forfeited of maximum $
Maximum STI opportunity $
Proportion of maximum STI earned and forfeited in FY2021
MD
315,975
75%
25%
105,325
421,300
50%
50%
315,975
631,950
COO
104,000
80%
20%
26,000
130,000
64%
36%
58,500
162,500
CFO
52,250
95%
5%
2,750
55,000
76%
24%
16,500
68,750
Company Secretary
33,000
82.5%
17.5%
7,000
40,000
66%
34%
17,000
50,000
For the Managing Director, 45% of the STI earned is payable in cash ($142,189) and 55% of the STI earned
($173,786) was deferred into zero price options under the DSTI plan. For the other executives the STI is payable
in cash.
61
Annual Report 2021 Terms and conditions of the share-based payment arrangements
The terms and conditions of each grant of zero price options under the Deferred STI affecting remuneration in the
current or a future reporting period are as follows:
Incentive
Plan
Grant
date
Number
of options
Performance
period
Service
period
Vesting
date
Performance
hurdle
FY2021 –
Managing
Director
FY2020 –
Managing
Director
TBA
TBA
1/7/20 to
30/6/21
1/7/20 to
30/6/22
31/8/2022
4/11/2020
16,232
1/7/19 to
30/6/20
1/7/19 to
30/6/21
31/8/2021
Balanced
scorecard
score
Balanced
scorecard
score
Value per
option at
grant date
%
Vested
$TBA
N/A
$5.54
N/A
The 2021 grant of options to the Managing Director under the DSTI is subject to shareholder approval at the 2021 AGM.
Performance against LTI objectives
The following table shows the maximum LTI opportunities that were granted to KMP during FY2021.
Value granted (max LTI opportunity) $
689,400
212,100
120,000
The LTI awards earned will vest on 31 August 2023 subject to the vesting conditions.
LTI awards in FY2021
MD
COO
CFO
Co Sec
40,000
Terms and conditions of the share-based payment arrangements
The terms and conditions of each grant of rights under the LTI 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
FY2018 -
Executives
25/08/2017
FY2018 -
MD
9/11/2017
FY2019 -
Executives
14/09/2018
FY2019 -
MD
13/11/2018
FY2020 -
Executives
24/09/2019
FY2020 -
MD
6/11/2019
FY2021 -
Executives
27/08/2020
FY2021 -
MD
4/11/2020
1/7/17 to
30/6/20
1/7/17 to
30/6/20
1/7/18 to
30/6/21
1/7/18 to
30/6/21
1/7/19 to
30/6/22
1/7/19 to
30/6/22
1/7/20 to
30/6/23
1/7/20 to
30/6/23
31/08/2020
$5.16
EPS Growth
Relative TSR
31/08/2020
$5.16
EPS Growth
Relative TSR
31/08/2021
$6.08
EPS Growth
Relative TSR
31/08/2021
$6.08
EPS Growth
Relative TSR
31/08/2022
$5.71
EPS Growth
Relative TSR
31/08/2022
$5.71
EPS Growth
Relative TSR
31/08/2023
$5.40
EPS Growth
Relative TSR
31/08/2023
$5.40
EPS Growth
Relative TSR
$4.62
$2.68
$4.92
$2.81
$5.21
$3.01
$4.62
$2.59
$6.17
$4.45
$6.18
$4.51
$4.59
$2.37
$5.07
$2.92
No
Partial
No
Partial
No
Partial
No
Partial
to be
determined
to be
determined
to be
determined
to be
determined
30.3%
30.3%
31.7%
31.7%
n/a
n/a
n/a
n/a
62
Cedar Woods Properties The number of share rights granted to key management personnel under the LTI scheme during FY2021 is shown
in the table below. The number of rights granted has been determined by dividing the FY2021 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 FY2021 ($5.40). The market value of the shares is
not discounted.
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
Forfeited
Number
%
Max. value
yet to
vest *
Balance
at end
of year
(unvested)
Number
Executive director
N J Blackburne
4 Nov 2020**
-
127,666
6 Nov 2019**
120,735
-
13 Nov 2018**
46,875
-
-
-
-
-
-
-
-
-
-
-
-
-
127,666
$510,026
120,735
$272,257
46,875
$60,703
22 Aug 2017**
36,434
-
11,050
30.3
25,384
69.7
-
-
Senior executives
P Archer
27 Aug 2020
-
39,277
24 Sep 2019
14 Sep 2018
37,145
17,270
-
-
-
-
-
-
-
-
-
-
-
-
-
-
39,277
$136,684
37,145
17,270
$82,648
$25,991
22 Aug 2017
16,473
-
4,996
30.3
11,477
69.7
-
-
L M Hanrahan
27 Aug 2020
-
22,222
24 Sep 2019
21,015
14 Sep 2018
22 Aug 2017
P S Freedman
8,224
3,488
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
22,222
$77,333
21,015
$46,758
8,224
$12,377
1,057
30.3
2,431
69.7
-
-
27 Aug 2020
-
7,407
-
-
-
-
7,407
$25,776
22 Aug 2017
7,752
-
2,351
30.3
5,401
69.7
-
-
* The LTI awards granted in FY2021 vest on 31 August 2023 subject to the vesting conditions. The maximum value of the
deferred shares yet to vest has been determined based on the grant date fair value of the rights, adjusted to the anticipated
vesting outcomes.
** Approval for the issue of share rights to NJ Blackburne was obtained from shareholders under Australian Securities Exchange
Listing Rule 10.14.
63
Annual Report 2021 Performance of shareholder return metrics
In FY2021, the company delivered a profit of $32.8 million, an increase of 61 per cent over the prior year.
The returns to shareholders of Cedar Woods over the last 1, 3 and 5 years are detailed in the table below:
Returns to shareholders over 1, 3 and 5 years
(%, annualised)
1 year
3 years
5 years
EPS growth
Share price growth
Dividend growth (declared dividend)
Dividend growth (paid dividend)
CWP TSR (change in share price and dividends)
S&P Small Industrials Index (XSIAI) TSR
60.2
28.1
39.5
(25.0)
31.9
33.0
(8.9)
5.2
(4.1)
(13.4)
10.5
9.4
(5.9)
9.1
(1.4)
(7.0)
14.9
10.8
The total shareholder return in FY2021 was 31.9 per cent which underperformed the S&P Small Industrials Index
total return of 33.0 per cent over the same period. However, the returns over 3 & 5 years compare favourably to the
returns of the S&P Small Industrials Index. Returns over 3 & 5 years also compare favourably to listed peers in the
property sector.
Management is focused on delivering consistent earnings per share and dividend growth. The company’s share
price is subject to market factors that are beyond the company’s control. The measures of the company’s financial
performance over the last five years as required by the Corporations Act 2001 are shown in the table below.
However, these are not necessarily consistent with the measures used in determining the variable amounts of
remuneration awarded to KMP, the basis for which is outlined above. As a consequence, there may not always be a
direct correlation between the statutory key performance measures and the variable remuneration awarded.
Profit for the year ($’000)
Basic earnings per share (cents)
Dividends per share (cents)
Increase (decrease) in share price (%)
2021
32,834
40.7
26.5
28.1
2020
20,387
25.4
19.0
(8.1)
2019
48,644
60.9
31.5
(1.0)
2018
42,603
53.9
30.0
10.6
2017
45,445
57.6
30.0
19.8
Executive remuneration for the years ended 30 June 2021 and 30 June 2020
When determining the remuneration mix for executives, the Remuneration and Nominations committee used
the target STI and LTI opportunities contained in the tables on pages 61 and 62, which differ from the amounts
calculated in the table below. In the below table, the actual cash bonuses are shown, and the share based payment
is calculated in accordance with AASB 2 Share Based Payments.
64
Cedar Woods Properties %
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65
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66
Cedar Woods Properties
s. Executive contracts
Remuneration and other terms of employment for executives are formalised in employment agreements.
Details of executive service contract for the Managing Director and other executives
The Managing Director, Mr N J Blackburne is employed under an ongoing contract.
Mr Blackburne’s total remuneration package for FY2021 was as follows:
y Fixed remuneration of $766,000 per annum
y Target STI opportunity of $421,300, Maximum STI opportunity of $631,950 (45% in cash, 55% in DSTI)
y Target & Maximum LTI opportunity $689,400.
y The target STI and LTI opportunity represent 22% and 37% respectively of the total target remuneration.
The maximum STI opportunity represents 30% of the maximum remuneration.
If the Managing Director resigns following a takeover or substantial change of control of the company due to a
material variation or diminution in his position duties, reporting structure or status, he will be entitled to be paid the
maximum amount permitted under s 200G of the Corporations Act 2001.
The agreements for the executives are reviewed annually by the Committee for each KMP and details are as follows:
Executive director
N J Blackburne
Contract term
No fixed term
Notice required to
terminate contract
Termination benefit *
6 months
Either party may terminate
with 6 months’ notice
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 q) iii. Details of incentive plans.
t. 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 or
for memberships of directors on subsidiary Boards). NEDs do not receive performance-based remuneration.
Remuneration of NEDs is determined by the Board, after receiving recommendations from the Committee, within
the maximum aggregate amount approved by the shareholders from time to time (currently set at $750,000 as
approved at the 10 November 2014 annual general meeting). The total of NED fees paid in FY2021 was $564,585.
Fee policy
NEDs’ annual fees were last reviewed from FY2020 (effective date: 1 July 2019). The annual fees (inclusive of
superannuation) for FY2021 and FY2020 are set out in the table below:
Chair
Deputy Chair
Other NEDs
Committee Chair
Committee member
2021
$
174,000
137,000
94,000
15,000
Nil
2020
$
174,000
137,000
94,000
15,000
Nil
67
Annual Report 2021 NED remuneration for the years ended 30 June 2021 and 30 June 2020
The table below outlines fees paid to NEDs for FY2021 and FY2020 in accordance with statutory rules and
applicable accounting standards.
Name
W G Hames
R S Brown
R Packer
V A Davies
J M Muirsmith
P G Say
Total
Short-term benefits
Post-employment
Financial
year
Board and
committee fees $
Superannuation $
Total $
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
158,904
158,904
113,699
138,813
29,605
70,302
99,543
99,543
99,543
99,543
14,308
-
515,602
567,105
15,096
15,096
10,801
13,187
2,813
23,698
9,457
9,457
9,457
9,457
1,359
-
48,983
70,895
174,000
174,000
124,500
152,000
32,418
94,000
109,000
109,000
109,000
109,000
15,667
-
564,585
638,000
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, including their personally-related parties, are set out below.
2021
NEDs
W G Hames *
R S Brown
V A Davies
J M Muirsmith
P G Say
R Packer #
Executive director
N J Blackburne
Senior executives
P Archer
L M Hanrahan
P S Freedman
Number of
shares at the
start of the year
Received on
vesting of rights
(LTI)
Other changes
during the year
Number of shares
at the
end of the year
10,348,698
7,821,633
15,785
10,734
-
167,859
-
-
-
-
-
-
247,162
10,595,860
-
493
7,267
14,500
(167,859)
7,821,633
16,278
18,001
14,500
-
72,901
11,050
-
83,951
30,088
12,777
72,862
4,996
1,057
2,351
1,096
-
1,043
36,180
13,834
76,256
* Includes 2,014,439 (2020 – 2,014,439) shares over which W G Hames has voting rights and a first right of refusal to purchase.
# R Packer ceased to be a Director on 4 November 2020, with his holding at the date of resignation disclosed as a reduction in
his holding.
68
Cedar Woods Properties 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.
Other transactions with key management personnel
Aggregate amounts of other transactions with key management personnel of Cedar Woods or their related entities:
Amounts recognised as expense
Architectural fees
Settlement fees
Amounts recognised as inventory/ investment property
Architectural fees
2021
$
2020
$
-
364,085
364,085
289,651
289,651
6,000
196,658
202,658
127,755
127,755
Total amounts recognised in year
653,736
330,413
Aggregate amounts of assets at balance date relating to the above types of other
transactions with directors of Cedar Woods or their related entities:
Inventory
Investment property
289,651
-
289,651
123,155
4,600
127,755
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, subject to the Board considering the services under
the Conflict of Interest policy, available on the Company website. 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.
The consolidated entity uses a number of firms for architectural, urban design and planning services and settlement
services. Accordingly, the company has a high level of knowledge regarding commercial rates for these services.
In addition, tenders and market reviews are regularly conducted to ensure that services are provided on competitive
terms and conditions.
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 the timing of architectural and design work performed on the Williams Landing Town Centre in Melbourne
and the Glenside project in Adelaide. The Glenside project was introduced to the company by Hames Sharley.
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 FY2021 was significantly
higher than that of the previous year and as a result the value of transactions with Westland Settlement Services
Pty Ltd increased.
69
Annual Report 2021 There are no aggregate amounts payable to directors of Cedar Woods at balance date. An amount of $1,202 was
payable to related entities (Westland Settlement Services Pty Ltd) at balance date. There are no other amounts
payable to 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 139 of this annual
financial report for PwC’s report on the remuneration report.
w. Retirement, election and continuation in office of directors
Ms V A Davies and Mr P G Say retire at the forthcoming Annual General Meeting, and being eligible offer
themselves for re-election.
70
Cedar Woods Properties x.
Insurance of officers
During the financial year, Cedar Woods 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 and the Company Secretary. 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 39 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 72.
aa. Rounding of amounts
The company is of a kind referred to in ASIC Legislative Instrument 2016/191, relating to the ‘rounding off’ of
amounts in the directors’ report. Amounts in the directors’ report have been rounded off in accordance with the
instrument to the nearest thousand dollars, or in certain cases, to the nearest dollar.
The directors report including the remuneration report is signed in accordance with a resolution of the directors
of Cedar Woods.
N J Blackburne
Managing Director
25 August 2021
71
Annual Report 2021 AUDITOR’S INDEPENDENCE DECLARATION
Auditor’s Independence Declaration
As lead auditor for the audit of Cedar Woods Properties Limited for the year ended 30 June 2021, I
declare that to the best of my knowledge and belief, there have been:
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit, and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Cedar Woods Properties Limited and the entities it controlled during
the period.
Helen Bathurst
Partner
PricewaterhouseCoopers
Perth
25 August 2021
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
72
Cedar Woods Properties
FINANCIAL
STATEMENTS
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
For the Year Ended 30 June 2021
Consolidated Balance Sheet
As at 30 June 2021
74
75
Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2021
77
Consolidated Cash Flow Statement
For the Year Ended 30 June 2021
78
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 29.
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
25 August 2021. The directors have the power to amend and reissue
the financial statements.
73
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
For the Year Ended 30 June 2021
Continuing operations
Revenue
Cost of sale of land and buildings
Cost of providing development services
Gross profit
Project operating costs
Administration expenses
Other expenses
Other income
Operating profit
Note
2021
$’000
2020
*Restated
$’000
1
299,751
260,660
(196,887)
(184,083)
(10,786)
92,078
(1,628)
74,949
(22,358)
(23,067)
(21,491)
(21,044)
(504)
2,851
(455)
1,520
50,576
31,903
Finance costs
2
(3,049)
(2,245)
Share of net loss of joint ventures accounted
for using the equity method
Profit before income tax
Income tax expense
Profit for the year
Total comprehensive income for the year
Total comprehensive income attributable to members of
Cedar Woods Properties Limited
Earnings per share for profit attributable to the ordinary
equity holders of the company:
Basic earnings per share
Diluted earnings per share
30(iii)
3
22
(24)
47,503
(14,669)
32,834
32,834
(174)
29,484
(9,097)
20,387
20,387
32,834
20,387
4
4
40.7 cents
25.4 cents
40.3 cents
25.2 cents
* See note 40 for details regarding the restatement as a result of a change in accounting policy.
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction
with the accompanying notes.
74
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report CONSOLIDATED BALANCE SHEET
As at 30 June 2021
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Inventories
Deferred development costs
Current tax asset
Total current assets
Non-current assets
Receivables
Inventories
Deferred development costs
Investments accounted for using the equity method
Property, plant and equipment
Right-of-use assets
Investment properties
Lease incentives
Other financial assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Other financial liabilities
Current tax liabilities
Contract liabilities
Lease liabilities
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Other financial liabilities
Lease liabilities
Provisions
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Note
5
6
1(ii)
7
8
6
7
8
9
10
11
12
13
14
16
1(ii)
17
18
15
16
17
18
19
2021
$’000
5,386
6,355
4,801
194,083
5,460
-
216,085
7,046
378,821
-
-
8,048
1,290
39,635
865
10
435,715
651,800
21,633
42,927
6,906
5,396
898
1,360
79,120
118,714
50,919
650
215
1,821
172,319
251,439
400,361
2020
*Restated
$’000
2,691
8,478
3,329
157,836
3,523
787
176,644
2,123
401,314
11,010
1,576
7,700
1,906
40,701
1,076
5
467,411
644,055
26,022
32,075
-
3,894
815
1,310
64,116
145,362
49,741
1,436
210
6,389
203,138
267,254
376,801
75
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report CONSOLIDATED BALANCE SHEET (CONTINUED)
As at 30 June 2021
EQUITY
Contributed equity
Reserves
Retained profits
Total equity
Note
20
21
22
2021
$’000
133,119
1,305
265,937
400,361
2020
*Restated
$’000
127,781
568
248,452
376,801
* See note 40 for details regarding the restatement as a result of a change in accounting policy.
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
76
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Year Ended 30 June 2021
Contributed
equity
$’000
Reserves
$’000
Note
Retained
profits
* Restated
$’000
Total
$’000
125,979
427
248,754
375,160
Balance at 1 July 2019
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
20
1,632
Transfers from reserves to retained profits
Dividends provided for or paid
Employee share scheme
28
20, 21
Balance at 30 June 2020
Balance at 1 July 2020
Profit for the year
Total comprehensive income for the year
Transactions with owners in their capacity
as owners:
-
-
170
1,802
127,781
127,781
-
-
Contributions of equity, net of transaction costs
and tax
20
5,247
Transfers from reserves to retained profits
Dividends provided for or paid
Employee share scheme
28
20, 21
-
-
91
5,338
-
-
-
(20)
-
161
141
568
568
-
-
-
(148)
-
885
737
20,387
20,387
20,387
20,387
-
20
1,632
-
(20,709)
(20,709)
-
331
(20,689)
(18,746)
248,452
376,801
248,452
376,801
32,834
32,834
32,834
32,834
-
5,247
148
-
(15,497)
(15,497)
-
976
(15,349)
(9,274)
Balance at 30 June 2021
133,119
1,305
265,937
400,361
* See note 40 for details regarding the restatement as a result of a change in accounting policy.
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
77
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report CONSOLIDATED CASH FLOW STATEMENT
For the Year Ended 30 June 2021
Note
2021
$’000
2020
* Restated
$’000
Cash flows from operating activities
Receipts from customers (incl. GST)
Other income
Payments to suppliers and employees (incl. GST)
Payments for land and development
Interest received
Borrowing costs paid
Income taxes paid
Net cash inflows (outflows) from operating activities
24
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Proceeds from capital return from joint venture
Payments for investment properties
Payments for property, plant and equipment
Net cash outflows from investing activities
Cash flows from financing activities
Proceeds from (repayment of) borrowings
Principal elements of lease payments
Dividends paid
28
Net cash (outflows) inflows from financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
5
330,618
1,083
(75,591)
(198,972)
398
(4,418)
(11,531)
41,587
36
1,625
(398)
(1,584)
(321)
(27,405)
(933)
(10,233)
(38,571)
2,695
2,691
5,386
280,459
830
(71,707)
(208,952)
389
(5,865)
(11,913)
(16,759)
10
975
(361)
(1,230)
(606)
26,345
(660)
(19,071)
6,614
(10,751)
13,442
2,691
* See note 40 for details regarding the restatement as a result of a change in accounting policy.
The above consolidated cash flow statement should be read in conjunction with the accompanying notes.
78
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report NOTES TO THE FINANCIAL STATEMENTS
These are the consolidated financial statements of Cedar Woods Properties Limited and its subsidiaries. A list of
major subsidiaries is included in note 29.
The notes are set out in the following main sections:
A Key numbers:
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 Further 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.
79
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report SECTION A:
KEY NUMBERS
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.
19. Deferred tax
20. Equity
21. Reserves
22. Retained profits
23. Categories of financial assets
and financial liabilities
Cash Flow information
24. Cash Flow Information
93
96
97
97
98
99
99
Profit or Loss Information
1. Revenue
2. Expense items
3. Income tax
4. Earnings per share
81
81
82
83
84
Balance Sheet Information
85
5. Cash and cash equivalents
85
6. Trade and other receivables
85
7. Inventories
86
8. Deferred development costs
86
9. Investments accounted for
usingthe equity method
87
10. Property, plant and equipment
87
11. Right-of-use assets
12. Investment properties
13. Lease incentives
14. Trade and other payables
15. Borrowings
16. Other financial liabilities
17. Lease liabilities
18. Provisions
88
88
89
89
90
91
92
93
80
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report PROFIT OR LOSS INFORMATION
1. Revenue
(i) Disaggregation of revenue from contracts with customers
Timing of revenue recognition
At a point in time
Sale of land and buildings
Development services
Over time
Rent from properties
(ii) Assets and liabilities related to contracts with customers
Current contract assets
Commissions relating to property sales
Total contract assets
2021
$’000
2020
$’000
280,577
13,554
252,152
2,583
5,620
5,925
2021
$’000
4,801
4,801
2020
$’000
3,329
3,329
Costs to fulfil a contract that were included in the contract asset
balance at the beginning of the period
Commissions relating to property sales
657
1,503
Sales commissions incurred to fulfill a property sale contract are classified as contract assets in the balance sheet
when incurred and are expensed when associated revenue is recognised.
Current contract liabilities
Customer rebates
Total contract liabilities
2021
$’000
5,396
5,396
2020
$’000
3,894
3,894
Revenue recognised that was included in the contract liability
balance at the beginning of the period
Customer rebates
3,184
4,424
(iii) Transaction price allocated to remaining performance obligations
The transaction price allocated to partially unsatisfied performance obligations at 30 June 2021 is set out below:
Within one year
More than one year
Total
2021
$’000
341,539
145,322
486,861
2020
$’000
256,559
113,504
370,063
81
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report
2. Expense items
Profit before income tax expense includes the following specific expenses:
Finance costs
Interest and finance charges
Interest - leases
Interest – other financial liabilities
Unrealised financial instrument (gains) losses
Less: amount capitalised
Finance costs expensed
(i) Capitalised borrowing costs
Note
2021
$’000
2020
$’000
4,476
68
2,770
(68)
(4,197)
3,049
6,028
91
2,578
(116)
(6,336)
2,245
(i)
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 1.55% (2020 – 2.0%) per annum. Where qualifying assets are
financed by specific facilities, the applicable borrowing costs of those facilities are capitalised.
Net loss on disposal of property, plant and equipment
Loss allowance of trade receivables
Employee benefits expense
Superannuation
Depreciation of property, plant and equipment
Depreciation of investment properties
Depreciation of right-of-use assets
Other lease expenses
Expense relating to short-term leases
Expense relating to leases of low value assets that are not
shown above as short-term leases
Other
Write-down of inventory
Note
6
10
12
(ii), 11
(ii)
(ii)
2021
$’000
98
174
2020
*Restated
$’000
186
19
13,691
12,380
1,143
1,106
980
848
33
-
1,110
1,077
990
823
23
6
524
285
* Refer to note 40 for details regarding the restatement as a result of a change in accounting policy.
(ii) Lease costs included in profit before income tax
Depreciation of right-of-use assets is presented within Administration expenses and Project operating costs on the
Consolidated Statement of Profit or Loss and Other Comprehensive Income. Expenses relating to short-term leases
and low value assets are presented within Project operating costs on the Consolidated Statement of Profit or Loss
and Other Comprehensive Income.
82
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report 3. Income tax
This note provides an analysis of the group’s income tax expense and how the tax expense is affected by non-
assessable and non-deductible items.
(i)
Income tax expense
Current tax
Deferred tax
Income tax expense attributable to profit
Deferred income tax (revenue) expense included in income tax expense
comprises:
(Increase) decrease in deferred tax assets
(Decrease) increase in deferred tax liabilities
Note
19
19
2021
$’000
19,230
(4,561)
14,669
(805)
(3,756)
(4,561)
2020
$’000
7,303
1,794
9,097
762
1,032
1,794
* Refer to note 40 for details regarding the restatement as a result of a change in accounting policy.
(ii) Numerical reconciliation of income tax expense to prima facie tax payable
Profit before income tax
2021
$’000
47,503
2020
*Restated
$’000
29,484
Tax at the Australian tax rate of 30% (2020 – 30%)
14,251
8,845
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
- Subsidiary company loss
- Interest revenue
- Employee share scheme
- Share of net loss of joint venture
- Other income
- Permanent differences arising from capital gains
- Sundry items
Income tax expense
* Refer to note 40 for details regarding the restatement as a result of a change in accounting policy.
11
5
293
7
(22)
113
11
418
14,669
9
37
97
52
-
40
17
252
9,097
83
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report 4. Earnings per share
Basic earnings per share (cents)
Diluted earnings per share (cents)
2021
40.7
40.3
2020
* Restated
25.4
25.2
Net profit attributable to the ordinary owners of the company ($’000)
32,834
20,387
Weighted average number of ordinary shares used as the denominator in the calculation of
earnings per share
Weighted average number of ordinary shares used as the denominator in the calculation of
diluted earnings per share
80,753,378
80,352,925
81,457,949
80,873,241
The calculation of diluted earnings per share includes performance rights that may vest under the company’s
LTI plan.
* Refer to note 40 for details regarding the restatement as a result of a change in accounting policy.
84
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report BALANCE SHEET INFORMATION
5. Cash and cash equivalents
Cash at bank and in hand
2021
$’000
5,386
5,386
2020
$’000
2,691
2,691
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 0.4% (2020 - 0 to 1.55%) per annum depending on the balances.
The Group’s exposure to interest rate risk is discussed in note 26 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.
6. Trade and other receivables
Current
Trade receivables
Less: Loss allowance
Other receivables
Prepayments
Non-Current
Trade receivables
Other receivables
Loans – employee share scheme (discontinued)
Notes
(ii)
(i), (ii)
(ii)
(ii)
(iii)
38
2021
$’000
4,692
(323)
721
1,265
6,355
1,632
5,411
3
7,046
2020
$’000
6,418
(149)
796
1,413
8,478
-
2,120
3
2,123
(i) Credit risk
To measure the lifetime expected credit loss for rental debtors, a provision is raised against each debtor based
upon the payment profile over the last 12 months, adjusted for current and forward-looking information supporting
the expected settlement of the receivable.
(ii) 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. The group’s accounting policies for trade and other receivables are outlined in note 39(h).
(iii) Other non-current receivables
Other non-current receivables comprise refundable deposits paid on conditional contracts.
85
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report 7.
Inventories
Total Inventory
Current inventory
Non-current inventory
Aggregate carrying amount
Current
Property held for resale
- at cost
- at valuation 30 June 1992 *
- capitalised development costs
Notes
(i), (ii)
(i), (ii)
2021
$’000
2020
$’000
194,083
157,836
378,821
401,314
572,904
559,150
2021
$’000
2020
$’000
37,624
31,716
13
56
156,446
126,064
194,083
157,836
* The 1992 valuations were independent valuations which were based on current market values at that time.
Non-Current
Property held for resale
- at cost
- at valuation 30 June 1992 *
- capitalised development costs
- at net realisable value
2021
$’000
2020
$’000
280,172
275,541
-
19
93,378
120,462
5,271
5,292
378,821
401,314
* The 1992 valuations were independent valuations which were based on current market values at that time.
(i) Current and non-current assets pledged as security
Refer to note 15 for information on current assets pledged as security by the parent entity or its controlled entities.
(ii) Accounting for inventory
Refer to note 39(i) for the recognition and classification of inventory.
8. Deferred development costs
Current
Deferred development costs
Non-Current
Deferred development costs
2021
$’000
2020
$’000
5,460
5,460
-
-
3,523
3,523
11,010
11,010
Development costs incurred by the group for the development of land not held as inventory by the group are
recorded as deferred development costs in the balance sheet.
86
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report 9. Investments accounted for using the equity method
Unlisted securities
Shares in joint ventures
Notes
(i)
2021
$’000
2020
$’000
-
-
1,576
1,576
(i) Cedar Woods Wellard Limited
The consolidated entity owns a 32.5% (2020: 32.5%) interest in Cedar Woods Wellard Limited, a property
development company incorporated in Australia. Refer to note 30.
During the year ended 30 June 2021, capital returns from the joint venture reduced the carrying amount to nil and
other income of $73,000 has been recognised in relation to capital returns exceeding the carrying amount.
10. Property, plant and equipment
Plant and Equipment at Cost
At start of the year
Additions
Disposals
At end of the year
Accumulated depreciation on Plant and Equipment
At start of the year
Disposals
Charge for the year
At end of the year
Net book value
2021
$’000
2020
* Restated
$’000
11,491
10,659
1,602
(229)
1,300
(468)
12,864
11,491
3,791
(81)
1,106
4,816
8,048
2,927
(213)
1,077
3,791
7,700
(i) Non-current assets pledged as security
Refer to note 15 for information on non-current assets pledged as security by the parent entity or its controlled entities.
Refer to note 40 for details regarding the restatement as a result of a change in accounting policy.
87
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report 11. Right-of-use assets
Buildings
At start of the year
Effect of exercising extension options
Remeasurements
Additions
Depreciation
At end of the year
Equipment
At start of the year
Effect of exercising extension options
Depreciation
At end of the year
Note
2021
$’000
2020
$’000
1,866
104
(38)
156
(808)
1,280
40
10
(40)
10
2,405
209
-
36
(784)
1,866
79
-
(39)
40
1,290
1,906
(i)
(i)
Depreciation expense on leases is included in Administration expenses in the Consolidated Statement of Profit or
Loss and Other Comprehensive Income.
12. Investment properties
Non-current assets – at cost
Opening balance at the start of the year
Capitalised expenditure
Depreciation
Impairment of capitalised lease costs
Closing balance at the end of the year
Represented by:
Note
2021
$’000
2020
$’000
40,701
41,642
118
(980)
(204)
66
(990)
(17)
39,635
40,701
39,635
39,635
40,701
40,701
2021
$’000
5,354
2020
$’000
5,277
Completed investment property
(i),(ii),(iii),(iv)
Closing balance at the end of the year
(i) Amounts recognised in profit or loss for investment properties
Rental income
Direct operating expenses from property that generated rental income
(3,704)
(3,224)
Impairment of lease incentives and capitalised lease costs
Bad debts recovered
(10)
-
(54)
8
(ii) Fair value of investment property
The fair value of the Williams Landing Shopping Centre which makes up completed investment property at 30
June 2021 is $83.6m, based on an external valuation (2020 – management valuation of $68.5m). The investment
88
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report property includes land surrounding the shopping centre for future development which is on the same title,
contributing $20.6m to the total valuation. The 2020 management valuation applies a market capitalisation rate to
the net rent for the shopping centre and a market rate per square metre to the area of the future development land.
(iii) 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
2021
$’000
4,499
17,999
17,097
39,595
2020
$’000
4,476
18,550
19,103
42,129
(iv) Non-current assets pledged as security
Refer to note 15 for information on non-current assets pledged as security by the parent entity or its controlled entities.
13. Lease incentives
Lease incentives
Amortisation of lease incentives
Impairment of lease incentives
2021
$’000
2,120
(1,249)
(6)
865
2020
$’000
2,805
(1,106)
(623)
1,076
(i) Non-current assets pledged as security
Refer to note 15 for information on non-current assets pledged as security by the parent entity or its controlled entities.
14. Trade and other payables
Trade payables
Accruals
Other payables
2021
$’000
7,372
2020
$’000
9,526
13,984
16,075
277
421
21,633
26,022
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.
89
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report 15. Borrowings
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
2021
$’000
2020
$’000
90,000
116,750
29,193
(1,024)
545
29,193
(842)
261
118,714
145,362
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 totalling $90,000,000 provided by three major banks (2020 - $116,750,000) 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 and applicable subsidiary entities. Cedar Woods 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 note 12.
(ii) Financing arrangements
The group had access to the following lines of credit at balance date:
2021
$’000
2020
$’000
205,000
205,000
(110,997)
(137,106)
94,003
67,894
30,000
30,000
(29,193)
(29,193)
807
807
235,000
235,000
(140,190)
(166,299)
94,810
68,701
Corporate facilities
Total facilities (loan and guarantees)
Used at balance date (loan and guarantees)
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
90
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report The consolidated entity has total corporate finance facilities of $205,000,000 (2020 - $205,000,000), provided by
three major banks. The consolidated entity extended its corporate facility in February 2021 following its annual
review. The facility tenure remains comprised of three and five year debt as follows:
y $165,000,000 (approximately 80%) of the facility expiring January 2024; and
y $40,000,000 (approximately 20%) of the facility expiring January 2026.
The conditions of the facilities impose certain covenants including interest cover, loan-to-valuation ratio and
leverage ratio (net debt to EBITDA). The interest on the corporate loan facilities is variable and at 30 June 2021 was
an average rate of 1.55% (2020 – 1.59%) per annum. The corporate facilities include bank guarantee facilities of
$40,000,000 (2020 - $25,000,000) subject to similar terms and conditions, which were drawn to a total amount of
$20,997,000 at 30 June 2021 (2020 - $20,356,000).
The consolidated entity has a facility of $30,000,000 (2020 - $30,000,000) in place for the Williams Landing
Shopping Centre investment property. The conditions of the facility impose certain covenants including loan-to-
valuation ratio and interest cover ratio. During the 2020 year the facility was extended to June 2023. The interest on
the Williams Landing Shopping Centre loan facility is variable and at 30 June 2021 was an average rate of 1.96%
(2020 – 1.74%) per annum.
Details of the group’s exposure to risk arising from current and non-current borrowings are set out in note 26.
Financial risk management.
16. Other financial liabilities
Current
Due to vendors of properties under contracts of sale
Other payables
Interest rate hedge contracts
Non-current
Notes
2021
$’000
2020
$’000
(i)
(ii)
42,853
31,570
-
74
505
-
42,927
32,075
Due to vendors of properties under contract of sale
50,901
49,592
Other payables
Interest rate hedge contracts
(i) Fair value adjustment
5
(ii)
13
-
149
50,919
49,741
During the prior year the group re-assessed its cash flows associated with the other payables, resulting in a fair
value adjustment through profit or loss.
(ii)
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 hedge contracts
The group’s policy is to protect part of the loans from exposure to fluctuations in interest rates. Accordingly, the
consolidated entity has entered into interest rate hedge contracts under which part of the consolidated entity’s
projected borrowings are protected for the period from 1 July 2021 to 30 June 2023. The group uses a combination
of caps and collars to hedge interest rates.
91
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report The caps effectively cap interest rates applicable to bank bills issued with duration of 3 months (BBSY Bid) at
certain levels between 1.00% - 1.50% (2020 – 1.00% to 1.95%). The collars effectively cap interest rates applicable
to bank bills issued with duration of 3 months (BBSY Bid) at 1.50% and apply a floor to interest rates of 0.87% (2020
– 1.50% and apply a floor to interest rates of 0.87%).
Interest rate hedge contracts currently in place cover approximately 46% (2020 – 38%) of the variable loans
outstanding at balance date, with terms expiring in 2022 and 2023. 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.
17. Lease liabilities
Lease liabilities
At start of the year
Effect of exercising extension options
Remeasurements
Additions
Interest
Principal and interest repayments
At the end of the year
Comprising:
Current lease liabilities
Non-current lease liabilities
2021
$’000
2020
$’000
2,251
114
(38)
156
68
(1,003)
1,548
2021
$’000
898
650
1,548
2,666
209
-
36
91
(751)
2,251
2020
$’000
815
1,436
2,251
The total cash outflow for leases in 2021 was $1,003,000 (2020 - $751,000 excluding GST). As at 30 June 2021,
potential future cash outflows of $3,291,000 (2020 - $3,395,000) (undiscounted) have not been included in the
lease liability because it is not reasonably certain that the leases will be extended (or not terminated).
92
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report 18. Provisions
Current
Employee benefits
Non-current
Employee benefits
(i) Movements in current employee benefits
Carrying amount at start of year
Provided during the period
Payments
Carrying amount at end of year
Notes
(i)
2021
$’000
2020
$’000
1,360
1,360
215
215
2021
$’000
1,310
855
(805)
1,360
1,310
1,310
210
210
2020
$’000
1,073
850
(613)
1,310
Current leave obligations expected to be settled after 12 months
673
624
19. Deferred tax
(i) Assets
The balance comprises temporary differences attributable to:
Inventory
Special Unit in the BCM Apartment Trust
Provision for customer rebates
Property, plant and equipment
Provision for employee benefits
Notes
2021
$’000
2020
* Restated
$’000
2,782
1,745
1,619
595
824
7,565
2,196
1,858
1,168
808
682
6,712
* Refer to note 40 for details regarding the restatement as a result of a change in accounting policy.
93
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report Notes
2021
$’000
2020
* Restated
$’000
(i) Assets (continued)
Other
Derivative financial instruments
Borrowing costs
Right-of-use assets
Receivables
Share issue expenses
Other sundry items
Sub-total other
Total deferred tax assets
23
46
77
97
4
56
303
7,868
(7,868)
-
7,056
805
7
7,868
4,881
2,987
7,868
43
49
107
45
6
94
344
7,056
(7,056)
-
7,816
(762)
2
7,056
3,947
3,109
7,056
Total
$’000
7,816
(762)
2
7,056
805
7
7,868
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 (decrease) in deferred tax assets credited (debited) to income tax
expense
3
Increase in deferred tax assets credited to equity
Deferred tax assets at the end of the year
Deferred tax assets expected to be recovered within 12 months
Deferred tax assets expected to be recovered after more than 12 months
* Refer to note 40 for details regarding the restatement as a result of a change in accounting policy.
Movements
* Restated
Inventory
$’000
Provision
for
customer
rebates
$’000
Special
Unit in
the BCM
Apartment
Trust
$’000
Property,
plant &
equipment
$’000
Provision
for
employee
benefits
$’000
At 1 July 2019
2,572
1,858
1,744
588
744
(Charged) credited
- to profit or loss
- directly to equity
At 30 June 2020
(Charged) credited
- to profit or loss
- directly to equity
(376)
-
2,196
586
-
(690)
-
114
-
1,168
1,858
451
-
(113)
-
At 30 June 2021
2,782
1,619
1,745
220
-
808
(213)
-
595
(62)
-
682
142
-
824
Other
$’000
310
32
2
344
(48)
7
303
* Refer to note 40 for details regarding the restatement as a result of a change in accounting policy.
94
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report (ii) Liabilities
The balance comprises temporary differences attributable to:
Notes
2021
$’000
2020
* Restated
$’000
Amounts recognised in profit or loss
Inventory
Deferred development costs
Prepayments
Property, plant and equipment
Investment Property
Other
Lease incentives
Revaluation reserve
Other sundry items
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
(Decrease) increase in deferred tax liabilities (credited) debited to income
tax expense
3
5,768
1,638
1,522
251
239
9,418
260
1
10
271
9,689
(7,868)
1,821
13,445
(3,756)
7,622
3,923
1,134
-
430
13,109
323
16
(3)
336
13,445
(7,056)
6,389
12,413
1,032
Deferred tax liabilities at the end of the year
9,689
13,445
Deferred tax liabilities expected to be settled within 12 months
Deferred tax liabilities expected to be settled after more than 12 months
5,498
4,191
9,689
5,320
8,125
13,445
* Refer to note 40 for details regarding the restatement as a result of a change in accounting policy.
Movements
Inventory
$’000
Deferred
development
costs
$’000
Prepayments
$’000
Investment
Property
$’000
Property,
plant &
equipment
$’000
At 1 July 2019
7,671
3,371
647
324
Charged (credited)
- to profit or loss
At 30 June 2020
Charged (credited)
(49)
7,622
- to profit or loss
(1,854)
At 30 June 2021
5,768
552
3,923
(2,285)
1,638
487
1,134
388
1,522
106
430
(191)
239
-
-
-
251
251
Other
$’000
Total
$’000
400
12,413
(64)
336
(65)
271
1,032
13,445
(3,756)
9,689
95
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report 20. Equity
Movement in ordinary share capital
Start of the year
80,447,826
80,117,767
127,781
125,979
2021
Shares
2020
Shares
2021
$’000
2020
$’000
Shares issued pursuant to the dividend
reinvestment plan:
Ordinary shares issued on 30 April 2021 at $6.69
Ordinary shares issued on 30 October 2020 at $5.61
575,465
252,065
-
-
3,850
1,414
Ordinary shares issued on 25 October 2019 at $6.73
-
243,401
Shares issued pursuant to the bonus share plan:
Ordinary shares issued on 30 April 2021
Ordinary shares issued on 30 October 2020
Ordinary shares issued on 25 October 2019
Transaction costs arising on share issues
26,087
10,027
-
-
Shares issued under employee share scheme:
Ordinary shares issued on 27 August 2020
33,376
-
-
25,398
-
-
Ordinary shares issued on 28 August 2019
-
61,260
(17)
91
-
-
-
1,638
-
-
-
(6)
-
170
End of the year
81,344,846
80,447,826
133,119
127,781
897,020
330,059
5,338
1,802
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 shareholder meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to
one vote.
Holders of performance rights or zero-price options under executive or employee share plans are not entitled to
participate in dividends or any winding up of the company, nor are they entitled to vote at shareholder meetings.
(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 in place during the 2021 financial year and in operation
for the 2020 final dividend and the 2021 interim dividend.
(iii) Employee share scheme
Details of the company’s employee share scheme can be found in note 38 and in the remuneration report on pages
57 and 58 to 60 of this financial report.
96
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report 21. 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.
Notes
2021
$’000
2020
$’000
Composition
a) Asset revaluation reserve (pre-1992)
b) Employee share plan reserve
Balance at the end of the year
Movements
a) Asset revaluation reserve
Balance at the beginning of the year
Transfer to retained profits
Balance at the end of the year
b) Employee share plan reserve
Balance at the beginning of the year
Share-based payments expense
Transfer to equity
Transfer to retained profits
Balance at the end of the year
3
1,302
1,305
38
(35)
3
530
976
(91)
(113)
1,302
38
530
568
49
(11)
38
378
331
(170)
(9)
530
22
22
The asset revaluation reserve was used until 1992 to record increments and decrements on the revaluation of
non-current assets. Refer to note 39(i).
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 38.
22. Retained profits
Retained profits at the start of the year
Net profit attributable to members of Cedar Woods
Transfers from reserves
Dividends provided for or paid
Retained profits at the end of the year
Notes
21
28
2021
$’000
2020
* Restated
$’000
248,452
248,754
32,834
20,387
148
20
(15,497)
(20,709)
265,937
248,452
* Refer to note 40 for details regarding the restatement as a result of a change in accounting policy.
97
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report 23. Categories of financial assets and financial liabilities
Notes 5, 6, 14, 15, 16 and 17 provide 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:
Derivatives
used for
hedging
$’000
Financial
assets at
amortised cost
$’000
Notes
* Excluding prepayments and contract assets.
Financial Liabilities
Notes
Derivatives
used for
hedging
$’000
Liabilities at
amortised cost
$’000
11,879
11,884
5
6
5
6
-
-
10
10
-
-
5
5
14
15
16
16
17
14
15
16
16
17
-
-
87
-
-
87
-
-
149
-
-
Total
$’000
5,386
12,136
10
17,532
2,691
9,188
5
Total
$’000
21,633
118,714
87
93,759
1,548
5,386
12,136
-
17,522
2,691
9,188
-
21,633
118,714
-
93,759
1,548
235,654
235,741
26,022
145,362
-
81,667
2,251
26,022
145,362
149
81,667
2,251
149
255,302
255,451
Financial Assets
2021
Cash and cash equivalents
Trade and other receivables*
Derivative financial instruments
Total
2020
Cash and cash equivalents
Trade and other receivables*
Derivative financial instruments
Total
2021
Trade and other payables
Borrowings
Derivative financial instruments
Other financial liabilities
Lease liabilities
Total
2020
Trade and other payables
Borrowings
Derivative financial instruments
Other financial liabilities
Lease liabilities
Total
98
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report CASH FLOW INFORMATION
24. Cash Flow information
Reconciliation of profit after income tax to net cash inflows (outflows) from operating activities
Profit after income tax
Depreciation and amortisation
Amortisation of lease incentives and legal fees
Write down of assets – investment property and lease incentives
Write down of inventory
Write down or loss on sale of non-current assets
Fair value (gain) loss on financial liabilities
Fair value loss on derivative financial instrument
Non-cash share-based payments expense
Share of loss in equity accounted investment
Other income
Changes in operating assets and liabilities
Increase in provisions for employee benefits
Increase (decrease) in contract liabilities
(Decrease) in provisions
(Increase) in inventories
Decrease (Increase) in other deferred development costs
(Increase) decrease in deferred tax assets
Increase (decrease) in current income tax payable
(Decrease) increase in deferred tax liability
Decrease in capitalised borrowing costs
(Increase) in trade receivables
(Increase) in contract assets
(Decrease) in trade creditors
Increase in other financial liabilities
2021
$’000
32,834
2,933
2020
*Restated
$’000
20,387
2,876
624
10
524
98
(30)
(68)
976
24
(73)
373
46
286
186
123
(117)
322
174
-
55
1,502
-
322
(1,918)
(3,021)
(14,278)
(77,307)
9,073
(812)
7,699
(3,756)
284
(2,740)
(1,472)
(4,411)
12,591
(3,295)
762
(4,614)
1,032
261
(2,840)
(1,185)
(4,968)
55,356
Net cash inflows (outflows) from operating activities
41,587
(16,759)
* Refer to note 40 for details regarding the restatement as a result of a change in accounting policy.
99
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report (i) Net debt reconciliation
This section sets out an analysis of net debt and the movements in debt for each of the periods presented.
Cash and cash equivalents
Borrowings – repayable after one year
Net debt
Cash and cash equivalents
Gross debt – variable interest rates
Net debt
Net debt as at 1 July 2019
Cash flows
Other non-cash movements
Net debt as at 30 June 2020
Cash flows
Other non-cash movements
Net debt as at 30 June 2021
2021
$’000
5,386
2020
$’000
2,691
(118,714)
(145,362)
(113,328)
(142,671)
5,386
2,691
(118,714)
(145,362)
(113,328)
(142,671)
Other Assets
Liabilities from financing activities
Cash
$’000
Borrowings
due within
1 year
$’000
Borrowings
due after
1 year
$’000
Total
$’000
13,442
(10,751)
-
2,691
2,695
-
5,386
-
-
-
-
-
-
-
(118,756)
(105,314)
(26,345)
(37,096)
(261)
(261)
(145,362)
(142,671)
27,435
(787)
30,130
(787)
(118,714)
(113,328)
100
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report
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.
25. Significant estimates and judgements
26. Financial Risk Management
102
103
27. Capital management objectives and gearing
108
28. Dividends
109
101
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report 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.
25. 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.
a)
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 executed sales contracts at year end and management’s settlement forecasts.
b)
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 planning
and development approvals. Other items of estimation within project cash flow models utilised for assessing the
recoverable amount of inventory can include future sales rate, sales prices, further development costs required to
complete the inventory for settlement and in some cases escalation of revenues and costs and total project yield.
Management make informed estimates drawing on historical and recent experience, expert advice from
consultants, third party valuations and economic and property market forecasts. In the current period, estimates
have considered the impact of the ongoing COVID-19 pandemic, in particular on customer demand and its effect
on future sales rates and prices as well as cost of materials.
If approvals are not received when anticipated or forecasts of project yield, sale prices or future costs are
significantly inaccurate, the recoverable amount of inventory may be significantly impaired. Refer also to note 39 (i).
There were no critical judgements other than those involving estimates referred to above, that management made
in applying the group’s accounting policies.
102
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report 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.
26. Financial Risk Management
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
Interest rate swaps
Credit risk
Cash and cash equivalents,
trade and other receivables
and derivative financial
instruments
Sensitivity analysis
Ageing analysis
Credit ratings
Management of deposits
Ongoing checks by
management
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*
Derivative financial instruments
Financial liabilities
Trade and other payables
Other financial liabilities
Borrowings
Lease liabilities
Derivative financial instruments
* Excluding prepayments and contract assets
a) Market risk
Price risk
i.
The consolidated entity has no foreign exchange exposure or price risk on equity securities.
2021
$’000
2020
$’000
5,386
12,136
10
2,691
9,188
5
17,532
11,884
21,633
93,759
26,022
81,667
118,714
145,362
1,548
87
2,251
149
235,741
255,451
103
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report 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.
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, cap and collar contracts under
which a part of the consolidated entity’s projected borrowings are protected for the period from 1 July 2021 to 30
June 2023.
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.
Instruments used by the group
iii.
Interest rate swaps effectively fix interest rates applicable to bank bills issued with duration of 1 month (BBSY
Bid). The group did not have any swaps in place at 30 June 2021 (2020 – swaps in place with an effective fixed
interest rate of 2.07% per annum). Interest rate caps effectively cap interest rates applicable to bank bills issued
with duration of 3 months (BBSY Bid) at certain levels between 1.00% - 1.50% (2020 – 1.00% - 1.95%). Interest rate
collars effectively cap interest rates applicable to bank bills issued with duration of 3 months (BBSY Bid) at 1.50%
and apply a floor to interest rates of 0.87% (2020 – 1.50% and apply a floor to interest rates of 0.87%).
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. Hedge contracts currently in place cover 46% (2020 -
38%) of the variable loan outstanding at balance date of $119,193,000 (2020 - $145,943,000), with terms expiring
in 2022 and 2023.
The consolidated entity’s exposure to interest rate risk and the effective weighted average interest rate for
receivables and borrowings is set out below.
Interest
bearing
- variable
$’000
2021
Non-
interest
bearing
$’000
2020
Interest
bearing
- variable
$’000
Total
$’000
Non-interest
bearing
$’000
Total
$’000
Receivables
Trade and other
receivables*
Employee share loans
-
-
-
12,133
12,133
3
3
12,136
12,136
-
-
-
9,185
9,185
3
3
9,188
9,188
* Excluding prepayments and contract assets.
104
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report Interest
bearing
- fixed
$’000
2021
Interest
bearing
- variable
$’000
Total
$’000
Interest
bearing
- fixed
$’000
2020
Interest
bearing
- variable
$’000
Total
$’000
Interest bearing
liabilities
Bank loans
Other financial
liabilities
-
119,193
93,754
-
119,193
93,754
-
145,943
145,943
81,162
-
81,162
93,754
119,193
212,947
81,162
145,943
227,105
The weighted average interest rate at year end is 1.55% (2020: 1.59%)
An analysis by maturity is provided in 26(c)i. 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 financial assets is not significant. Refer to comments above for further information
on the impact of changes in interest rates upon the group.
b) Credit risk
The consolidated entity has minimal exposure to credit risk 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 mitigate 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 typically 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.
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. During the year forecasts
involved scenario modelling including downside cases, conditional and potential acquisition scenarios and possible
impacts from the ongoing COVID-19 pandemic and government response. 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 2021 the group had undrawn committed facilities of $94,810,000 (2020 - $68,701,000) and cash of
$5,396,000 (2020 - $2,691,000) to cover short term funding requirements. Refer to 15(ii) for details. The Company
continued to operate within all of its facility covenants throughout FY2021.
B.
105
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report 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 2021
Non-derivatives
Non-interest bearing
Fixed rate
Variable rate
Derivatives
Total
Group – at 30 June 2020
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
Carrying
amount
$’000
21,633
43,243
-
74
-
53,381
95,943
13
-
-
21,633
96,624
30,719
126,662
-
87
21,633
93,754
118,714
87
64,950
149,337
30,719
245,006
234,188
Less than 1
year
$’000
Between 1
and 2 years
$’000
Between 2
and 5 years
$’000
Total
contractual
cash flows
$’000
Carrying
amount
$’000
26,527
31,994
-
-
-
16,334
122,798
136
-
37,774
30,717
13
26,527
86,102
26,527
81,162
153,515
145,362
149
149
58,521
139,268
68,504
266,293
253,200
d) Fair value measurement
This note provides information on the judgements and estimates made by the group in determining the fair values of
the financial instruments.
Fair value hierarchy
i.
To provide an indication on 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.
106
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report The following table presents the group’s financial liabilities measured and recognised at fair value at 30 June 2021
and 30 June 2020:
As at 30 June 2021
Notes
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
Assets
Derivatives used for hedging
Total assets
Liabilities
Derivatives used for hedging
16
Total liabilities
-
-
-
-
10
10
87
87
-
-
-
-
10
10
87
87
As at 30 June 2020
Notes
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
Assets
Derivatives used for hedging
Total assets
Liabilities
Derivatives used for hedging
16
Total liabilities
-
-
-
-
5
5
149
149
-
-
-
-
5
5
149
149
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.
107
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report CAPITAL MANAGEMENT
27. 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:
y raising or reducing borrowings
y adjusting the dividend policy
y issue of new securities
y return of capital to shareholders
y sale of assets.
Gearing is a measure used to monitor the levels of debt used in the business to fund operations. The primary
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 bank debt
Shareholders’ equity
Gearing ratio
Notes
15
5
2021
$’000
2020
* Restated
$’000
118,714
145,362
(5,386)
(2,691)
113,328
142,671
400,361
376,801
28.3%
37.9%
* Refer to note 40 for details regarding the restatement as a result of a change in accounting policy.
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. The group operated comfortably within the target range during
the income year.
a) Loan Covenants
Under the terms of the major borrowing facilities, the group has complied with covenants throughout the
reporting period. Debt covenants are disclosed in note 15 and include requirements in relation to a maximum
loan-to-valuation ratio, a maximum leverage ratio (net debt to EBITDA) and minimum interest cover ratio.
108
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report 28. Dividends
a) Ordinary shares
Fully franked based on tax paid at 30%
Final dividend for the year ended 30 June 2020 of 6.5 cents (2019 – 13.5 cents) per fully
paid share
- Paid in cash
- Satisfied by shares under the dividend reinvestment plan
Interim dividend for the year ended 30 June 2021 of 13.0 cents (2020 – 12.5 cents) per
fully paid share
- Paid in cash
- Satisfied by shares under the dividend reinvestment plan
2021
$’000
2020
$’000
3,761
1,414
6,472
3,850
9,015
1,638
10,056
-
Total
15,497
20,709
b) Dividends not recognised at the year end
In addition to the above dividends, since year end the directors have recommended the payment of a final
dividend of 13.5 cents per fully paid ordinary share (2020 – 6.5 cents), fully franked based on the tax paid at 30%.
The aggregate amount of the proposed dividend expected to be paid on 29 October 2021 out of retained profits at
30 June 2021, but not recognised as a liability at year end is below:
Dividends not recognised at year end
c) Franked Dividends
2021
$’000
10,982
2020
$’000
5,229
The franked portions of the final dividend proposed at 30 June 2021 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% (2020 – 30%)
2021
$’000
2020
$’000
100,160
94,245
The above amounts represent the franking accounts at the end of the financial year, adjusted for:
(i) Franking credits that will arise from the payment of the current tax liability;
(ii) Franking debits that will arise from the payment of dividends recognised as a liability at the reporting date;
(iii) 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 $4,707,000 (2020 - $2,241,000).
109
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report 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.
29. Subsidiaries
30. Interests in joint arrangements
31. Deed of cross guarantee
32. Parent entity financial information
111
112
113
114
110
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report GROUP STRUCTURE
29. Subsidiaries
The group’s operating subsidiaries at 30 June 2021 are set out below. Unless otherwise stated, they have share
capital consisting solely of ordinary shares or units 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 principal activities of all subsidiary entities are property development and/or investment in Australia.
The consolidated financial statements incorporate the assets, liabilities and results in accordance with the
accounting policy described in note 39 (b).
Company
Notes
Equity Holding
BCM Apartment Trust
Champion Bay Nominees Pty Ltd
Cedar Woods Properties Finance Pty Ltd
Cedar Woods Properties Harrisdale Pty Ltd
Cedar Woods Properties Investments Pty Ltd
Cedar Woods Properties Management Pty Ltd
Cedar Woods Property Sales Pty Ltd
(i)
(ii)
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
2021
-
50%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2020
50%
50%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
111
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report (i) The BCM Apartment Trust was wound up during the financial year. In the prior year, the forecast profits of BCM
Apartment Trust were not expected to be sufficient to make a return to the other ordinary unit holder that ranked
behind the consolidated entity for trust distributions. Accordingly, the consolidated entity did not recognise a non-
controlling interest.
(ii) The net assets of Champion Bay Nominees Pty Ltd are not material to the consolidated entity.
30. Interests in joint arrangements
Set out below are the joint ventures of the group as at 30 June 2021. 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
Cedar Woods Wellard Limited
2021
%
32.5
2020
%
32.5
Joint Venture
Equity method
-
1,576
Carrying amount
2021
$’000
2020
$’000
The consolidated entity owns a 32.5% (2020 – 32.5%) interest in Cedar Woods Wellard Limited, a property
development company incorporated in Australia. Cedar Woods Wellard Limited is developing the Emerald Park
residential estate at Wellard, WA. 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.
During the year ended 30 June 2021, capital returns from the joint venture reduced the carrying amount to nil and
other income of $73,000 has been recognised in relation to capital returns exceeding the carrying amount.
(i) Commitments and contingent liabilities in respect of the joint ventures
Cedar Woods Wellard Limited has no commitments for expenditure at 30 June 2021 (2020 - Nil) and has no
contingent liabilities (2020 - Nil).
(ii) 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’ 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
Total liabilities
Net assets
Group’s share in %
Group’s share in $
112
2021
$’000
1,683
148
1,831
-
1,831
188
188
1,643
32.5%
534
2020
$’000
480
3,661
4,141
2,801
6,942
107
107
6,835
32.5%
2,221
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report (iii) Movements in carrying amounts – Cedar Woods Wellard Limited
At start of the year
Share of loss after income tax
Capital return
At end of the year
Share of loss before income tax
Share of loss after income tax
Share of joint venture’s revenue, assets, liabilities and contingent liabilities
Revenue
Assets
Liabilities
2021
$’000
1,576
(24)
(1,552)
-
(24)
(24)
2,528
595
(61)
2020
$’000
2,725
(174)
(975)
1,576
(174)
(174)
448
2,256
(35)
31. Deed of Cross Guarantee
Cedar Woods Properties Limited and all subsidiaries listed at note 29 except for Champion Bay Nominees Pty Ltd
and the BCM Apartment Trust are parties to a deed of cross guarantee under which each company guarantees
the debts of the others. By entering the deed, the wholly-owned entities have been relieved from the requirement
to prepare a financial report and directors’ report under ASIC Corporations (Wholly-owned Companies) Instrument
2016/785.
The companies referred to above as parties to the deed of cross guarantee represent a ‘closed group’ for the
purposes of the instrument, and as there are no other parties to the deed of cross guarantee that are controlled by
Cedar Woods Properties Limited, they also represent the ‘extended closed group’.
Set out below is a consolidated statement of profit or loss and comprehensive income, summary of movements in
consolidated retained earnings and consolidated balance sheet for the closed group.
a) Consolidated statement of profit or loss and comprehensive income for the year ended
30 June, and summary of movements in consolidated retained profits
Revenue from continuing operations
Cost of sales of land and buildings
Cost of providing development services
Other expenses from ordinary activities:
Other Income
Finance costs
Share of net loss of joint ventures accounted for using the equity method
Profit before income tax
Income tax expense
Profit for the year
Total comprehensive income for the year
2021
$’000
2020
* Restated
$’000
298,822
258,282
(195,984)
(181,894)
(10,786)
(1,628)
(44,290)
(44,337)
2,869
(3,049)
(24)
47,558
(14,669)
32,889
32,889
1,631
(2,245)
(174)
29,635
(9,097)
20,538
20,538
113
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report b) Summary of movements in consolidated retained profits
Retained profits at the beginning of the financial year
Profit for the period
Transfers from reserves
Dividends provided for or paid
Retained profits at the end of the financial year
2021
$’000
2020
* Restated
$’000
248,397
248,548
32,889
20,538
148
20
(15,497)
(20,709)
265,937
248,397
* Refer to note 40 for details regarding the restatement as a result of a change in accounting policy.
c) Consolidated balance sheet as at 30 June
The consolidated balance sheet of the closed group at 30 June 2021 is the same as the consolidated group.
32. Parent Entity Financial Information
The financial information for the parent entity, Cedar Woods, 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 profits
Profit for the year
Total comprehensive income
2021
$’000
2020
* Restated
$’000
45,299
453,723
(93,983)
33,555
409,086
(38,334)
(184,404)
(155,716)
269,319
253,370
133,119
1,302
127,781
530
134,898
125,059
269,319
253,370
25,215
25,215
8,665
8,665
* Refer to note 40 for details regarding the restatement as a result of a change in accounting policy.
Investments in subsidiaries and joint venture entities
i.
Investments in subsidiaries and joint venture entities are accounted for at cost in the financial statements of
Cedar Woods. 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
114
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report 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 and its wholly owned Australian controlled entities have implemented the tax consolidation legislation.
The head entity, Cedar Woods, 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 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.
115
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report 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.
33. Contingent Liabilities
34. Commitments
117
117
35. Events occurring after the reporting period
117
116
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report UNRECOGNISED ITEMS
33. Contingent liabilities
a) Bank guarantees
At 30 June 2021 bank guarantees totalling $20,997,000 (2020 - $20,356,000) had been provided to various state
and local authorities supporting development and maintenance commitments.
34. Commitments
Capital commitments
At 30 June 2021 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 $22,363,000 (2020 - $6,577,000), for building construction was
$103,073,000 (2020 - $63,945,000) and for landscaping construction was $3,748,000 (2020 - $1,481,000). This
work will be substantially completed in the next 12 months.
35. Events occurring after the reporting period
In July 2021, the group settled on its contract to acquire a 40.7ha property in South Maclean, Queensland located
45km south of the Brisbane CBD for $14.7m, and completed due diligence and unconditionally contracted to
acquire a 14.6ha site in Fraser Rise in Melbourne’s west for $30.5m.
Refer to note 28(b) for details of the final dividend recommended by the directors, to be paid on 29 October 2021.
No other matters or circumstances have arisen since 30 June 2021 that have significantly affected or may
significantly affect:
y the consolidated entity’s operations in future financial years; or
y the results of those operations in future financial years; or
y the consolidated entity’s state of affairs in future financial years.
117
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report SECTION E:
FURTHER
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.
36. Related Party Transactions
37. Remuneration of Auditors
38. Employee Share Scheme
39. Summary of Accounting Policies
40. Changes in Accounting Policies
41. Segment Information
119
120
121
121
129
131
118
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report 36. Related Party Transactions
a) Key management personnel compensation
Additional disclosures relating to key management personnel are set out in the Directors’ Report.
Short-term employee benefits
Post-employment benefits
Long-term employee benefits
b) Group
Consolidated
2021
$
2020
$
2,451,717
2,369,981
142,986
165,577
599,381
254,420
3,194,084
2,789,978
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 29.
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 Pty Ltd derived management and
selling fees totalling $720,988 (2020 - $115,485) from Cedar Woods Wellard Limited.
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 the timing of architectural and design work performed on the Williams Landing Town Centre and the
Glenside project in Adelaide. The Glenside project was introduced to the company by Hames Sharley.
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 FY2021 was higher than that of the
previous year and as a result the value of transactions with Westland Settlement Services Pty Ltd increased.
119
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report Aggregate amounts of each of the above types of other transactions with key management personnel of Cedar
Woods or their related entities:
Amounts recognised as expense
Architectural fees
Settlement fees
Amounts recognised as inventory/ investment property
Architectural fees
2021
$
2020
$
-
6,000
364,085
196,658
364,085
202,658
289,651
127,755
289,651
127,755
Total amounts recognised in year
653,736
330,413
Aggregate amounts of assets at balance date relating to the above types of other
transactions with directors of Cedar Woods or their related entities:
Inventory
Investment property
289,651
123,155
-
4,600
289,651
127,755
There are no aggregate amounts payable to directors of Cedar Woods at balance date.
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
A balance of $1,202 was payable to a related entity (Westland Settlement Services Pty Ltd ) at balance date
(2020 - $4,560 payable to Hames Sharley).
37. Remuneration of Auditors
During the year the following fees were paid or payable to the auditor of the parent entity:
PricewaterhouseCoopers – Australian firm & Related network firms
Assurance services
- Audit and review of the financial statements
- Other assurance services
Total fees for assurance services
Non-audit services
- Taxation advice and reviews
- Other consulting services and reviews
Total fees for non-audit services
Total assurance and non-audit services
120
2021
$
2020
$
289,872
268,091
3,060
-
292,932
268,091
113,545
26,520
49,780
-
163,325
26,520
456,257
294,611
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report 38. Employee Share Scheme
The current Long Term Incentive (LTI) plans effective from 1 July 2018 for FY2019, from 1 July 2019 for FY2020, and
from 1 July 2020 for FY2021 will continue in FY2022.
The current LTI plan for the MD and executives has two vesting conditions a) a 3 year service condition and b) two
performance conditions measured over a 3 year period: 50 per cent 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.
Full details of the operation of the current LTI plan are set out in the remuneration report on pages 58 to 60 of this
annual financial report.
The MD receives 45% of the STI in cash, with 55% deferred by way of a grant of zero-price options under the
Deferred Short Term Incentive (DSTI) Plan. The STI including the DSTI is awarded based on the Remuneration
and Nominations Committee’s assessment of the company’s overall performance using the Balanced Scorecard.
Full details of the operation of the current DSTI plan are set out in the remuneration report on page 57 of this annual
financial report.
39. 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.
Where necessary, comparative information is reclassified and restated for consistency with current period disclosures.
The financial statements are for the consolidated entity consisting of Cedar Woods 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 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 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. New and amended standards adopted by the group
The group has applied the following standards and amendments for the first time for the annual reporting period
commencing 1 July 2020:
y AASB 2018-7 Amendments to Australian Accounting Standards – Definition of Material [AASB 101 and AASB 108]
y AASB 2018-6 Amendments to Australian Accounting Standards – Definition of a Business [AASB 3]
y AASB 2019-3 Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform [AASB 9, AASB
139 and AASB 7]
y AASB 2019-5 Amendments to Australian Accounting Standards – Disclosure of the Effect of New IFRS Standards
Not Yet issued in Australia [AASB 1054]
y Conceptual Framework for Financial Reporting and AASB 2019-1 Amendments to Australian Accounting Standards
– References to the Conceptual Framework.
The group changed its accounting policy for intangible assets as a result of the IFRS Interpretations Committee
agenda decision on configuration and customisation costs in a cloud computing environment, ratified by the
International Accounting Standards Board in April 2021. The impact of the change in accounting policy is disclosed
in note 40. The other amendments listed above did not have any impact on the amounts recognised in prior periods
and are not expected to significantly affect the current or future periods.
121
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report iv. New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June
2021 reporting periods and have not been early adopted by the group.
These standards are not expected to have a material impact on the consolidated entity in the current or future
reporting periods and on foreseeable future transactions.
v. Functional and presentation currency
The consolidated financial statements are presented in Australian dollars, which is the functional and presentation
currency of Cedar Woods.
Subsidiaries
b) Principles of consolidation
i.
The consolidated financial statements incorporate the assets and liabilities of all entities controlled by Cedar
Woods (parent) as at 30 June 2021 and the results of all subsidiaries for the year then ended. Cedar Woods 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.
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 30.
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.
The carrying amount of equity-accounted investments is tested for impairment in accordance with the policy
described in note 39(p).
c) 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.
d) Business combinations
The acquisition method of accounting is used to account for all business combinations. Cost is measured as
the fair value of the assets given, or liabilities undertaken at the date of acquisition. Acquisition related costs are
expensed as incurred.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to
their present values at the date of acquisition. The discount rate used is the incremental borrowing rate applied by
the consolidated entity’s financiers for a similar borrowing under comparable terms and conditions.
122
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report Sale of land and buildings
e) Revenue and other income
i.
Revenue arising from the sale of land and buildings is recognised when control over the property has been
transferred to the customer. In most of the group’s contracts this is the point in time at which legal title passes to
the customer.
The revenue is measured at the transaction price agreed under the contract, with revenue relating to customer
rebates recognised separately where applicable.
ii. Sale of land and buildings – customer rebates
Certain contracts for the sale of land and buildings include an obligation of the group to provide goods, services, or
payments to the customer, subject to certain performance conditions. These contracts provide a right to customers
that forms a separate performance obligation.
The transaction price is allocated to the performance obligations on a relative stand-alone selling basis.
Management estimates the stand-alone selling prices at the point in time that legal title passes to the customer
based on the contract value, and observable market prices of similar services.
The likelihood of redemption of each customer rebate is estimated at the time of transfer of legal title. If the
performance conditions of the customer are not met within the terms of the contract, the obligation expires, and
the group recognises the revenue attributable to the performance obligation without delivery of the goods, services
or payment.
iii. Development services
Revenue from development services is recognised at a point in time where the group has satisfied contractual
performance obligations and control over the output has passed to the customer. In most instances this coincides
with the transfer of legal title of the developed land or building.
iv. Lease income
Income from operating leases is recognised over time on a straight-line basis over the period of the lease.
v. Government grants
Grants from the government are recognised as other income at their fair value where there is a reasonable
assurance that the grant will be received and the group will comply with all attached conditions.
Income tax
f)
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 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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Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report g) 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.
h) Trade and other receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course
of business. 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.
For trade receivables, the group applies the simplified approach permitted by AASB9, which requires expected
lifetime credit losses to be recognised from initial recognition of the receivables. To measure the lifetime expected
credit loss for rental debtors, a provision is raised against each debtor based upon the payment profile over the
last 12 months, adjusted for current and forward-looking information supporting the expected settlement of
the receivable.
Inventories
Property held for development and resale
i)
i.
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.
j) 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.
k) 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.
124
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report 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.
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 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:
y 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.
Intangible assets
Costs associated with maintaining software are recognised as an expense as incurred. Development costs that
are directly attributable to the design, customisation, configuration and testing of identifiable and unique software
products controlled by the group are recognised as intangible assets within property, plant and equipment, where
the following criteria are met:
y it is technically feasible to complete the software so that it will be available for use
y management intends to complete the software and use it
y there is an ability to use the software and to restrict others from accessing it
y it can be demonstrated how the software will generate probable future economic benefits
y adequate technical, financial and other resources to complete the development and to use the software are
available, and
y the expenditure attributable to the software during its development can be reliably measured.
Costs incurred in configuring or customising SaaS arrangements can only be recognised as intangible assets if
the implementation activities create an intangible asset that the entity controls and the intangible asset meets the
recognition criteria. Those costs that do not result in intangible assets are expensed as incurred.
Directly attributable costs that are capitalised as part of the software include contractor and employee costs.
The group does not apportion overheads to capitalised intangible assets.
Intangible assets are amortised from the point at which the asset is ready for use using the straight-line method
over the expected useful lives as follows:
y IT development and software – 3 to 5 years
The assets’ residual values and useful lives are reviewed for impairment and adjusted if appropriate, at each
reporting date.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in
the profit or loss.
m) Investments and other financial assets
i. Classification
The group classifies its financial assets in the following categories:
y those to be measured at fair value through profit or loss; and
y those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual
terms of the cash flows.
For assets measured at fair value, gains and losses will be recorded in profit or loss.
125
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report ii. Measurement
At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not
at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the
financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
Impairment
iii.
The group assesses on a forward-looking basis the expected credit losses associated with its financial assets
carried at amortised cost. The impairment methodology applied depends on whether there has been a significant
increase in credit risk.
Investment property
n)
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.
o) 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.
Impairment of assets
p)
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.
q) Trade and other payables
Trade payables 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 days
of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12
months after the reporting period. They are recognised initially at their fair value and subsequently measured at
amortised cost using the effective interest method.
r) Leases
i. Group as a lessee
The group leases corporate offices, IT equipment and land for sales centres or marketing signage. Rental contracts
vary in periods and may have extension options as described below. Lease terms are negotiated on an individual
basis and contain a wide range of different terms and conditions. The lease agreements do not impose any
covenants, but leased assets may not be used as security for borrowing purposes.
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is
available for use by the group. Each lease payment is allocated between the liability and finance cost. The finance
cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the
asset’s useful life and the lease term on a straight-line basis.
126
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the
net present value of the following lease payments:
y fixed payments (including in-substance fixed payments), less any lease incentives receivable
y variable lease payments that are based on an index or a rate
y amounts expected to be payable by the lessee under residual value guarantees
y the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and
y payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined,
the group’s incremental borrowing rate is used, being the rate that the group would have to pay to borrow the funds
necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.
This reflects the group’s weighted average interest rate.
Right-of-use assets are measured at cost comprising the following:
y the amount of the initial measurement of lease liability
y any lease payments made at or before the commencement date less any lease incentives received
y any initial direct costs, and
y restoration costs.
Right-of-use assets are depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis
as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
Extension and termination options are included in a number of property and equipment leases across the group.
These terms are used to maximise operational flexibility in terms of managing contracts. The majority of extension
and termination options held are exercisable only by the group and not by the respective lessor.
Critical judgements in determining the lease term
In determining the lease term, management considers all facts and circumstances that create an incentive to
exercise an extension option, or not exercise a termination option. Extension options (or periods after termination
options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated).
Most extension options in offices and equipment leases have not been included in the lease liability, because the
group could replace the assets without significant cost or business disruption.
The lease term is reassessed if an option is exercised (or not exercised) or the group becomes obliged to exercise
(or not exercise) it. The assessment of reasonable certainty is only revised if a significant event or a significant
change in circumstances occurs, which affects this assessment, and that is within the control of the lessee.
ii. Group as a lessor
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.
s) 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.
127
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report 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.
t) 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.
u) 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.
v) Other financial liabilities
Other financial liabilities at fair value through profit or loss are financial liabilities due to vendors of properties
under contracts of sale and other payables. Liabilities in this category are classified as current liabilities if they are
expected to be settled within 12 months, otherwise they are classified as non-current.
Short term obligations
w) Employee benefits
i.
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.
x) 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.
y) 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.
z) Share based payments
Share based compensation benefits are provided to employees via the Deferred STI and LTI plans. Information
relating to these schemes is set out in the remuneration report on pages 57 to 60.
128
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report The value of Performance Rights granted under the Deferred STI and LTI plans is recognised as an employee
benefits expense with a corresponding increase in equity. The total amount to be expensed is determined by
reference to the fair value of the Performance Rights granted:
y Including any market performance conditions (e.g. the entity’s share price); and
y Excluding the impact of any service and non-market performance vesting conditions (e.g. profitability and remaining
an employee of the group over a specified time period)
The total expense is recognised over the vesting period, which is the period over which all of the specified vesting
conditions are to be satisfied. At the end of each reporting period, the group revises its estimates of the number of
Performance Rights that are expected to vest based on the non-market vesting and service conditions. The impact
of the revision to original estimates is recognised, if any, in profit or loss with a corresponding adjustment to equity.
aa) Earnings per share
i. Basic earnings per share
Basic earnings per share is determined by dividing the profit attributable to owners of Cedar Woods 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.
iii. Rounding of amounts
The company is of a kind referred to in ASIC Legislative Instrument 2016/191, relating to the ‘rounding off’ of
amounts in the financial statements.
Amounts in the financial statements have been rounded off in accordance with the instrument to the nearest
thousand dollars, or in certain cases, to the nearest dollar.
ab) 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.
40. Changes in Accounting Policies
The group previously accounted for costs incurred in configuring or customising Software-as-a-Service (SaaS)
arrangements as intangible assets, as the group considered that it would benefit from those costs to implement the
SaaS arrangements over the expected term of the arrangements.
Following the IFRS IC agenda decision on Configuration or Customisation Costs in a Cloud Computing
Arrangements in March 2021, the group has reconsidered its accounting treatment and adopted the treatment
set out in the IFRS IC agenda decision, which is to recognise those costs as intangible assets only if the
implementation activities create an intangible asset that the entity controls and the intangible asset meets the
recognition criteria. Costs that do not result in intangible assets are expensed as incurred.
As a result of this change in accounting policy, the group has determined that costs totalling $3,498,000 relating to
the implementation of SaaS arrangements would need to be expensed when they were incurred, as the amounts
did not create separate intangible assets controlled by the group.
The change in policy has been applied retrospectively and comparative information has been restated. This had the
following impact on the amounts recognised in the financial statements:
129
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report Statement of profit or loss and other comprehensive income (extract)*
Gross profit
Administration expenses
Operating profit
Profit before income tax
Income tax expense
Profit for the year
Total comprehensive income for the year
Total comprehensive income attributable to members of Cedar Woods
Properties Limited
2020
As originally
presented
$’000
Effect of
change in
accounting
policy
$’000
2020
Restated
$’000
74,949
(20,312)
32,635
30,216
(9,317)
20,899
20,899
20,899
-
74,949
(732)
(21,044)
(732)
(732)
31,903
29,484
220
(9,097)
(512)
(512)
(512)
20,387
20,387
20,387
* The table above shows the adjustments recognised for each individual line item for the year ended 30 June 2020. Line items
that were not affected by the changes have not been included. As a result, the sub-totals disclosed cannot be recalculated from
the numbers provided.
As
originally
presented
$’000
Effect of
change in
accounting
policy
$’000
30 June 2020
As
originally
presented
$’000
Restated
$’000
Effect of
change in
accounting
policy
$’000
1 July 2019
Restated
$’000
Balance sheet (extract)*
Non-current assets
Intangible assets**
3,241
(2,692)
549
2,428
(1,960)
468
Total non-current assets
470,103
(2,692)
467,411
400,667
(1,960)
398,707
Total assets
646,747
(2,692)
644,055
571,711
(1,960)
569,751
Non-current liabilities
Deferred tax liabilities
7,197
Total non-current liabilities
203,946
Total liabilities
268,062
(808)
(808)
(808)
6,389
5,242
203,138
141,003
267,254
195,181
(588)
(588)
(588)
4,654
140,415
194,593
Net assets
378,685
(1,884)
376,801
376,530
(1,372)
375,158
Retained profits
250,336
(1,884)
248,452
250,124
(1,372)
248,752
Total equity
378,685
(1,884)
376,801
376,530
(1,372)
375,158
* The table above shows the adjustments recognised for each individual line item as at 1 July 2019 and 30 June 2020. Line items
that were not affected by the changes have not been included. As a result, the sub-totals disclosed cannot be recalculated from
the numbers provided.
** Intangible assets are included within property, plant and equipment in the consolidated balance sheet.
130
Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report Consolidated cash flow statement (extract)*
Cash flows from operating activities
Payments to suppliers and employees (incl. GST)
Net cash (outflows) inflows from operating activities
Cash flows from investing activities
Payments for intangible assets**
Net cash outflows from investing activities
2020
As originally
presented
$’000
Effect of
change in
accounting
policy
$’000
2020
Restated
$’000
(70,439)
(15,491)
(1,268)
(71,707)
(1,268)
(16,759)
(1,587)
(1,874)
1,268
1,268
(319)
(606)
* The table above shows the adjustments recognised for each individual line item for the year ended 30 June 2020. Line items
that were not affected by the changes have not been included. As a result, the sub-totals disclosed cannot be recalculated from
the numbers provided.
** Payments for intangible assets are included within payments for property, plant and equipment in the consolidated cash
flow statement.
41. 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 development and investment 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 mainly sells products to the public and is not generally 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.
131
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report
DIRECTORS’ DECLARATION
In the directors’ opinion:
a) the financial statements and notes set out on pages 73 to 131 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 2021 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, and
c) at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed
group identified in Note 29 will be able to meet any obligations or liabilities to which they are, or may become,
subject by virtue of the deed of cross guarantee described in Note 31.
Note 39 (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.
Nathan Blackburne
Managing Director
Perth, Western Australia
25 August 2021
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INDEPENDENT AUDITOR’S REPORT
Independent auditor’s report
To the members of Cedar Woods Properties Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Cedar Woods Properties Limited (the Company) and its
controlled entities (together the Group) is in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the Group's financial position as at 30 June 2021 and of its financial
performance for the year then ended, and
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
•
•
•
•
•
•
the consolidated balance sheet as at 30 June 2021
the consolidated statement of changes in equity for the year then ended
the consolidated cash flow statement for the year then ended
the consolidated statement of profit or loss and other comprehensive income for the year then
ended
the notes to the financial statements, which include significant accounting policies and other
explanatory information, and
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
133
Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
Cedar Woods Properties Limited is an Australian property development company. The Group's
principal interests are in urban land subdivision and built form development for residential, commercial
and retail purposes. Its portfolio of assets are located in Western Australia, Victoria, Queensland and
South Australia.
Materiality
Audit scope
Key audit matters
• Amongst other relevant topics,
we communicated the following
key audit matters to the Audit
and Risk Committee:
Valuation of inventory
• These are further described in
the Key audit matters section of
our report.
• For the purpose of our audit
we used overall Group
materiality of $2.4 million,
which represents
approximately 5% of the
Group’s profit before tax
• We applied this threshold,
together with qualitative
considerations, to determine
the scope of our audit and the
nature, timing and extent of
our audit procedures and to
evaluate the effect of
misstatements on the financial
report as a whole.
• We chose Group profit before
tax because, in our view, it is
the benchmark against which
the performance of the Group
is most commonly measured.
• Our audit focused on where
the Group made subjective
judgements; for example,
significant accounting
estimates involving
assumptions and inherently
uncertain future events.
• The accounting processes are
structured around a Group
finance function at its head
office in Perth. Our audit
procedures were
predominately performed at
the Group head office, along
with a number of development
site visits being performed
across the year.
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Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report
• We utilised a 5% threshold
based on our professional
judgement, noting it is within
the range of commonly
acceptable thresholds.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context.
Key audit matter
Valuation of inventory
(Refer to note 7, 25(b) 39(i)) [$572,904,000]
As of 30 June 2021, the Group recognised total
inventory of property held for sale of $573m, split
between current inventory of $194m and non-current
inventory of $379m.
Inventory is stated at the lower of cost and net
realisable value for each development project, as
assessed at each reporting date.
The cost of the inventory is calculated as the sum of
land acquisition costs, development costs and
borrowing costs capitalised for eligible projects.
The Group’s estimate of net realisable value is
calculated based on the estimated selling price of the
inventory, less the estimated costs of completion and
selling costs. Each of these factors is impacted by
assumptions about future market and economic
conditions which inherently are subject to the risk of
change. These assumptions include future sales
prices, future sales rates, forecast development costs
for completion, and in some cases escalation rates of
sales and costs and total project yield.
This was a key audit matter given the relative size of
the inventory balance in the Consolidated Balance
Sheet and the inherent subjectivity and significant
judgements involved in the key assumptions and
estimates used to calculate net realisable value.
How our audit addressed the key audit matter
We performed the following procedures, amongst
others:
• Developed an understanding of how the Group
identified the relevant methods, assumptions or
sources of data, and the need for changes in
them, that are appropriate for developing the
inventory net realisable value in the context of the
Australian Accounting Standards,
• We obtained an understanding and evaluated the
design of relevant controls in relation to inventory
valuation,
• We traced a sample of additions to the cost of
projects (for e.g. land acquisition and development
costs) to supporting documentation and assessed
whether they were capitalised appropriately,
• We recalculated a sample of the capitalisation of
borrowing costs into inventory and assessed
whether the borrowing costs were capitalised
appropriately, and
• We applied a risk-based assessment to determine
those development projects where there was a
greater risk that the carrying value of the inventory
may be in excess of net realisable value. Our risk-
based selection criteria incorporated our
knowledge of the lifecycle of each project from
current and prior years, site visits and our
understanding of current economic conditions
relevant to individual project locations as informed
by publicly available property market reports. In
addition to these risk conditions, we focussed on
specific projects which are large contributors to
revenue and profit in the year and projects which
were subject to a write-down during the year.
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Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report
Key audit matter
How our audit addressed the key audit matter
For the selected projects we performed a combination
of one or more of the following audit procedures:
• We discussed current project performance with
the Development manager and/or State manager,
including factors such as the key project risks,
strategy, construction progress, market conditions
during the year and the outlook going forward, and
sales revenue expected over the life of the project,
• We obtained the net realisable value assessment
and cash flow analysis performed by management
and evaluated the appropriateness of the
significant assumptions, including:
comparing forecast sales value for each
project to actual sales values known from the
current period and comparable projects,
comparing forecast costs of the project to the
relevant construction contracts (if applicable)
or the construction contract proposal,
comparing management’s forecast sales
volumes, sales prices and cost escalation
factors to internal and external data, and
assessing the mathematical accuracy of the
cash flow analysis for a sample of
calculations, and
• Evaluated the reasonableness of the disclosures
made in note 25(b), including those related to
estimation uncertainty, against the requirements of
Australian Accounting Standards.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 30 June 2021, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
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Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 53 to 71 of the directors’ report for the
year ended 30 June 2021.
In our opinion, the remuneration report of Cedar Woods Properties Limited for the year ended 30 June
2021 complies with section 300A of the Corporations Act 2001.
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Annual Report 2021Financial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
PricewaterhouseCoopers
Helen Bathurst
Partner
Perth
25 August 2021
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Cedar Woods PropertiesFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report
SHAREHOLDERS’
INFORMATION
This section provides information for shareholders on distributions and
other shareholder benefits, the composition of the share register and past
financial performance.
Investors’ Summary
Shareholder Information
Five Year Financial Performance
140
141
143
139
Annual Report 2021 INVESTORS’ SUMMARY
Dividend and dividend policy
The final dividend for the 2021 financial year is 13.5 cents per share, fully franked. The dividend will be paid on 29
October 2021. The Company’s dividend policy is to distribute approximately 50% of the full year net profit after
tax. The Board has elected to temporary depart from this policy for FY2021 as it did in the prior year, with the total
FY2021 dividends representing a payout ratio of 65%. This acknowledges both the result in FY2021 and the current
outlook for growth in FY2022.
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, apartments or strata commercial units at the
group’s developments. A summary of the main terms and conditions follows:
y For residential lots, shareholders must hold a minimum number of 1,000 shares for at least 6 months before
purchasing a lot to qualify for the discount;
y For off the plan purchases of ‘built-form’ lots (such as townhouses, apartments or commercial units), shareholders
must hold a minimum number of 1,000 shares at the time of purchasing a lot and hold the shares through to
settlement of the lot to qualify for the discount;
y The number of shareholder discounts available will be limited in any sales release to two discounts, although the
Company may extend this for a particular release; and
y 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.
Electronic payment of dividends
During 2021, the group transitioned to exclusively adopting electronic funds transfer for the payment of dividends.
Accordingly, shareholders must 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. New shareholders receiving dividends for the first time should contact the company’s share registrar,
Computershare Investor Services Pty Ltd, by visiting www.computershare.com.au.
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
will be in operation for the final dividend for the 2021 financial year.
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
140
26 August 2021
30 September 2021
29 October 2021
October 2021
3 November 2021
February 2022
April 2022
May 2022
August 2022
Cedar Woods Properties SHAREHOLDER INFORMATION
The shareholder information set out below was applicable at 19 August 2021.
a) Distribution of ordinary shares
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Number
of holders
1,340
1,394
413
447
47
Number
of shares
550,443
3,704,973
3,048,800
11,308,401
62,732,229
3,641
81,344,846
There were 255 holders of less than a marketable parcel of shares.
b) Twenty largest shareholders of ordinary shares as disclosed in the share register
Name
JP Morgan Nominees Australia Pty Ltd
HSBC Custody Nominees (Australia) Limited
Citicorp Nominees Pty Ltd
Hamsha Nominees Pty Ltd (The Nowra Projects Unit Fund A/C)
National Nominees Limited
Westland Group Holdings Pty Ltd
Beach Corporation Pty Ltd
Joia Holdings Pty Ltd
Helen Kaye Poynton
Zero Nominees Pty Ltd
BNP Paribas Nominees Pty Ltd (Agency Lending DRP A/C)
Mr Paul Stephen Sadleir
Dr A Gerraty & Mrs P Gerraty (A & P Gerraty S/F A/C)
Leblon Holdings Pty Ltd (William Hames Super Fund A/C)
BNP Paribas Noms Pty Ltd (DRP)
Mr JH Tucker & Mrs KJ Tucker (Tucker Family Super Fund A/C)
HSBC Custody Nominees (Australia) Limited - A/C 2
BNP Paribas Nominees Pty Ltd HUB24 Custodial Serv Ltd (DRP A/C)
Gold Plaza Pty Ltd
Gorn Super Pty Ltd (Gorn Pension Super Fund A/C)
Number
of shares
13,329,495
9,851,657
5,217,105
5,040,216
4,621,528
4,433,029
3,382,604
1,745,789
1,677,095
1,536,208
1,274,509
1,127,283
600,000
524,225
513,349
475,002
440,595
433,074
408,127
401,184
Percentage
of shares
16.39
12.11
6.41
6.20
5.68
5.45
4.16
2.15
2.06
1.89
1.57
1.39
0.74
0.64
0.63
0.58
0.54
0.53
0.50
0.49
57,032,074
70.11
141
Annual Report 2021 c) Substantial shareholders of ordinary shares
As disclosed in substantial shareholder notices lodged with the ASX at 19 August 2021.
Name
William George Hames and related entities
Robert Stanley Brown and related entities
AustralianSuper Pty Ltd
Number
of shares
Percentage
of shares1
9,314,668
7,818,633
7,099,709
12.90
9.75
8.79
1 Percentage of issued capital held as at the date notice provided.
d) 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.
Performance rights
No voting rights.
Options
No voting rights.
e) Unquoted equity securities
Issued under employee incentive schemes:
Performance rights issued under the FY2019 long term incentive plan
Performance rights issued under the FY2020 long term incentive plan
Performance rights issued under the FY2021 long term incentive plan
Zero price options issued under the FY2020 deferred short term incentive plan
Number
on issue
Number
of holders
155,596
261,808
294,243
16,232
24
26
29
1
142
Cedar Woods Properties FIVE YEAR FINANCIAL
PERFORMANCE
All figures in $’000 except where stated
Financial Year
Financial Performance
2021
2020
2019
2018
2017
Revenue from operations
299,751
260,660
375,149
239,661
222,269
Earnings before interest and tax
50,552
31,729
72,014
65,168
67,446
Finance costs
3,049
2,245
3,072
4,020
2,947
Operating profit before tax
47,503
29,484
68,942
61,148
64,499
Income tax expense
Net profit after tax
Financial Position
Total assets
Total liabilities
14,669
9,097
20,298
18,545
19,054
32,834
20,387
48,644
42,603
45,445
651,800
644,055
571,711
601,516
505,624
251,439
267,254
195,181
248,330
175,390
Shareholders’ equity
400,361
376,801
376,530
353,186
330,234
Number of shares on issue – end of year (‘000)
81,345
80,448
80,118
79,517
78,892
Basic earnings per share (cents)
40.7
25.4
60.9
53.9
57.6
Key Performance Measures
Dividend per share, fully franked (cents)
26.5
19.0
31.5
30.0
30.0
EBIT Margin
Interest cover (times)
Return on Equity
16.9%
12.2%
19.2%
27.2%
30.3%
12.1
8.2%
5.9
5.4%
8.6
8.5
13.9
12.9%
12.1%
13.8%
Investment in inventory during year
198,972
208,952
245,814
191,633
161,588
Net tangible assets backing per share ($)
4.92
4.68
4.67
4.44
4.19
Net bank debt
Net bank debt to equity
113,328
142,671
105,314
109,134
78,940
28.3%
37.9%
28.0%
30.9%
23.9%
Share price – end of year ($)
6.71
5.24
5.70
5.76
5.21
Stock Market capitalisation at 30 June
545,824
421,547
456,671
458,015
411,026
Number of employees at 30 June
93
91
95
90
79
Returns to shareholders over 1, 3, & 5 years
1 Year
3 Year
5 Year
Earnings per share growth %
Share price growth %
Dividend growth % (paid dividend)
Total shareholder return %
60.2
28.1
39.5
(8.9)
5.2
(4.1)
(25.0)
(13.4)
(5.9)
9.1
(1.4)
(7.0)
143
Annual Report 2021 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
Valerie Anne Davies
FAICD
Jane Mary Muirsmith
BCom (Hons), FCA, GAICD
Paul Say
FRICS, FAPI
Nathan John Blackburne
BB, AMP, GAID – Managing Director
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
Email
Website www.cedarwoods.com.au
(08) 9480 1500
email@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
Date Wednesday 3 November 2021
Time
10:00am WS