Cedar Woods Properties Limited
Annual Report 2022

Plain-text annual report

ANNUAL REPORT 2022 Cedar Woods Properties Limited ABN 47 009 259 081 1 Annual Report 2022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 which 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. WE STRIVE TO CREATE QUALITY HOMES, WORKPLACES AND COMMUNITIES THAT PEOPLE ARE PROUD OF. TABLE OF CONTENTS Letter from the Chairman ......................................... 4 Letter from the Managing Director ........................... 6 Financial Performance Highlights ............................. 8 Our Business ..........................................................10 Financial and Operating Review ..............................13 ESG Report .............................................................21 Directors' Report .................................................... 44 Directors’ Report: Letter to Shareholders from the Chair of the Remuneration & Nominations Committee (The Committee) .................................................... 49 Directors’ Report - Remuneration Report .............. 50 Auditor’s Independence Declaration ...................... 69 Financial Statements ...............................................70 Notes to the Financial Statements ...........................76 Section A: Key Numbers ....................................... 77 Profit or Loss Information ........................................78 Balance Sheet Information ......................................81 Cash Flow Information ........................................... 92 Section B: Financial Risks ...................................... 94 Significant Estimates and Judgements .................. 95 Financial Risk Management ................................... 96 Capital Management .............................................100 Section C: Group Structure ...................................102 Group Structure ....................................................103 Section D: Unrecognised Items .............................106 Unrecognised Items ..............................................107 Section E: Further Information ...............................108 Directors’ Declaration ............................................ 119 Independent Auditor’s report ................................121 Shareholders’ Information .....................................127 Investors’ Summary ..............................................128 Shareholder Information ........................................129 Five Year Financial Performance ...........................131 02 03 Cedar Woods Properties LimitedAnnual Report 2022LETTER FROM THE CHAIRMAN Financial Year 2022 has been another busy and The construction conditions during FY2022 were exciting year for Cedar Woods as we continued dictated by the tight labour and materials environment building on the reputation of delivering innovative driving cost growth, various disruptions from solutions to the property market and the communities COVID-19 quarantining, and significant weather which we work with. Our Company is proud events impacting some projects on the east coast. to continue the track record of strong financial During these challenging times, we have been performance and long-term value creation, returning a supported by our contractors who have prioritised full year dividend of 27.5 cents to our shareholders. our projects. Over FY2022, Cedar Woods continued to build our During the year, these challenges highlighted the national pipeline of more than 10,300 dwellings, importance of staying connected with our staff lots and offices, across 34 projects, enabling the and providing a positive, high spirited workplace Company to offer a range of options to home buyers. culture. The Board is proud of the successful staff Across four markets – Western Australia, South development and retention achieved during the Australia, Queensland and Victoria – the Company’s period, illustrated by the 85% staff satisfaction score diverse range of product types, from housing in our annual staff survey. Additionally, our continued lots in masterplanned communities, to urban infill commitment to invest in our people was recognised communities with townhouses and apartments, cater with a staff member winning the National UDIA Young to the needs of different buyer groups. Development Professional Award. Our staff have also A key event during the past year was the return of interstate and international travel. The return of international migrants has led to greater enquiry across the country, and as international migration gains pace over FY2023 this is expected to continue. Immigration has been prioritised by Government to sustain economic growth, which gives your Board confidence this driver of demand is likely to continue. Immigration is likely to continue to put pressure on the country’s housing stock with very low rental vacancy in all capital cities. This rising demand equation is countered by ongoing challenging construction conditions which will likely result in fewer projects across the industry, particularly apartments, being delivered over the next 12 months, compounding supply shortages. demonstrated their exceptional sense of community minded contribution with good participation in a range of volunteering opportunities, most notably, supporting Cedar Woods’ partnership with the Smith Family Children’s Charity. Looking to the future, Cedar Woods has continued to invest in and refine the systems we use. The rapid pace of development in technology will require continued assessment of opportunities to identify and drive efficiencies. Likewise, Cedar Woods has been an early adopter and responsible steward of environmental initiatives. The Company has a long track record of delivering sustainable developments and during the past year we have worked hard to develop minimum standards of sustainability features in our built form developments. The commencement of carbon footprint mapping will help us identify future areas of focus for coming years. THE COMPANY HAS A LONG TRACK RECORD OF DELIVERING SUSTAINABLE DEVELOPMENTS. Once again, it has been a privilege to Chair the Cedar We look forward to further building on the strength Woods Board and on behalf of my fellow directors, and diversity of our portfolio of projects and our land I would like to thank Nathan and the whole Cedar bank across the country in the year ahead. Woods team for their contributions to the Company. With a strong strategy and positive outlook, the Board Sincerely, is confident Cedar Woods will continue to generate good returns for our valued shareholders. William Hames Chairman 04  William Hames, Chairman 05 Cedar Woods Properties LimitedAnnual Report 2022 LETTER FROM THE MANAGING DIRECTOR Cedar Woods achieved strong growth in earnings to perform well in the medium term as our diversified in Financial Year 2022, with revenue of $333 million portfolio will continue to appeal to a broad range of (up 11 per cent), net profit of $37 million (up 14 per customers, across the country. cent) and 12 per cent growth in earnings per share. The outlook for further growth in FY2023 is bright, with presales of over $500 million and many projects for FY2023 delivery mid-way through construction. Sales conditions were broadly supportive throughout the year until they softened in May and June as prospective buyers took pause following interest rate rises that were larger, and implemented quicker, than previously anticipated. As a result of this rapidly changing outlook for interest rates, soft sales conditions are expected to persist over H1 FY2023. Market expectations are for the RBA to reach the “normal target band” towards the end of the calendar year, which should stabilise expectations and improve sales conditions in H2 FY2023 as prospective buyers become more confident in their borrowing capacity and forward outlook. These construction challenges have been felt across the industry and indeed the broader economy. This has been reflected in equity markets which were broadly down over FY2022, and the property sector was one of the most impacted. Cedar Woods was not immune to this decline, however we expect the share price to respond over time as we continue to bring quality product to the market. Within our projects, it is clear that Cedar Woods’ infill strategy continues to prove successful and the prudent acquisitions we made during the year are positioning the business to capitalise in the future. In FY2022, we invested approximately $150 million in land acquisitions to grow the portfolio, including an 86-hectare site in Eglinton, a suburb ideally located in Perth’s burgeoning north-west growth corridor. The contracted new acquisitions will add more than 2,000 lots/units to the Company’s project pipeline, The challenging construction conditions we have positioning Cedar Woods well into the future. seen in some jurisdictions meant the Company had to make the tough decision to defer construction at certain project stages where it was no longer possible to commence in the current environment. I would like to thank our committed team who managed the process and sought to minimise the impact on our valued customers. While sales and construction conditions are mixed currently, we expect the sector Our product mix ensures we target a wide range of buyers in four states across a spectrum of price points. An unwavering factor across our developments is a commitment to quality. We have earned a reputation for the quality of our products which we will continue to deliver on. The Company remains confident that our strategy will I also take this opportunity to thank our loyal and deliver value to shareholders over the cycle and our longstanding shareholders for their continued team looks forward to delivering for our customers in support, we look forward to sharing our success the year ahead. with you in FY2023. As COVID-19 continues to impact both our business Sincerely, and our personal lives, I wish to reiterate my thanks to our hardworking team, who have continued to deliver outstanding results in challenging conditions. Nathan Blackburne Managing Director WE HAVE EARNED A REPUTATION FOR THE QUALITY OF OUR PRODUCTS THAT WE WILL CONTINUE TO DELIVER ON. 06  Nathan Blackburne, Managing Director 07 Cedar Woods Properties LimitedAnnual Report 2022 FINANCIAL PERFORMANCE HIGHLIGHTS NET SALES PRESALE CONTRACTS NET PROFIT AFTER TAX $37.4m TOTAL REVENUE $333.0m EARNINGS PER SHARE 45.7c DIVIDENDS PER SHARE 27.5c 08 2020 2021 2022 1108 lots Lots / homes / offices sold $500m Up $22m on pcp SETTLEMENTS GEARING 2020 2021 2022 2020 2021 2022 2020 2021 2022 955 lots Lots / homes / offices settled 25.6% Net bank debt / total tangible assets – cash  Solaris Estate, Forrestdale WA 09 Cedar Woods Properties LimitedAnnual Report 2022OUR BUSINESS OUR HISTORY OUR PURPOSE, VISION & VALUES OUR STRATEGY 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, Cedar Woods 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. 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:  Tactical and research based decisions to identify projects  Rigorous assessment and conservative assumptions  Structure contracts to minimise risks and optimise returns Development Research, design, planning and delivery:  Sustainable designs that optimise quality, functionality, environmental outcomes and returns  Collaborative approach with community and authorities  Negotiate timely value-adding approvals  Structure contracts to minimise risks  Manage construction closely Marketing & Sales Integrated approach to optimise results:  Positioning projects to maximise demand  Pre-sell to underwrite projects  Quality brands and marketing material  Lead generation and sales conversion  Customer nurturing and referrals 10 11 Cedar Woods Properties LimitedAnnual Report 2022 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. FINANCIAL AND OPERATING REVIEW On behalf of the Board we 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 2022. 2022 FINANCIALS AT A GLANCE  Revenue of $333,036,000, up 11.1 per cent on the prior year  Net profit after tax of $37,388,000, up 13.9 per cent on the prior year  Total dividends of 27.5 cents per share, up 3.8 per cent, generating a fully franked yield of 7.5 per cent at year end  Earnings per share of 45.7 cents, up 12.3 per cent on the prior year NET PROFIT AFTER TAX (NPAT) AND DIVIDENDS In financial year 2022 (FY2022), the Company delivered a profit of $37.4 million. This was up 13.9 per cent on the prior year. This continues the trajectory of profit growth since the first COVID-19 impacted year of FY2020 and continues the long-term trend of profit growth in eight out of the last ten years. Dividends declared for FY2022 were 27.5 cents per share, also up on the 26.5 cents 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 12  Huntington Apartments at Jackson Green, Clayton South VIC 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Dividend H1 Dividend H2 NPAT 35 30 25 20 15 10 5 0 C e n t s 13 Cedar Woods Properties LimitedAnnual Report 2022 2022 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 Shares on issue – end of year Stock market capitalisation at 30 June Share price at 30 June FINANCIAL YEAR OVERVIEW Cedar Woods started the financial year in a strong position with $478 million in presales in hand and an outlook for continued growth in earnings for FY2022. While availability of the significant federal and state government stimulus for purchasers of new housing had concluded for new buyers in the prior year, strong sales momentum continued into FY2022. This enabled the Company to report record presales of $560 million with its half year result in February 2022 after recording $174 million in revenue 2022 $’000 333,036 37,388 779,833 198,688 421,223 2021 $’000 299,751 32,834 651,800 113,328 400,361 11.1 13.9 19.6 75.3 5.2 2022 2021 % Change ¢ ¢ ¢ % % % % % x $ 45.7 45.2 27.5 8.9 9.4 (42.4) 47.2 25.6 9.1 5.13 40.7 40.3 26.5 8.2 9.8 31.9 28.3 17.6 12.1 4.92 ’000 $’000 $ 82,128 81,345 302,230 545,824 3.68 6.71 12.3 12.2 3.8 11.0 (4.1) (74.3) 66.8 45.5 (27.2) 4.3 1.0 (44.6) (45.2) A significant delivery program was completed in the final quarter of the year with a number of land stages completed across Western Australia and Victoria as well as construction of multiple stages of townhouses at Glenside in South Australia and the first waterfront townhouses at Fletcher’s Slip, also in South Australia. With conversion of significant presale contracts into settlements of land and homes with our customers, the Company recorded another $159 million in revenue in the second half to take full year revenue to $333 million, up 11 per cent on the prior year. in H1 FY2022. This record total of contracts on hand The Board was pleased to report full year net profit was subsequently exceeded, when the Company after tax of $37.4 million, ahead of guidance of $35 reported $600 million in presales with its third quarter million, delivering earnings per share of 45.7 cents, operational update, giving the Board confidence to which was up 12 per cent on the prior year. This result confirm guidance for FY2022 for full year net profit delivered return on equity of 8.9 per cent up on the after tax of approximately $35 million. 8.2 per cent achieved in the prior year. FY2022 return % Change per cent recorded in the prior year, as greater debt land acquisitions and projects to continue to deliver on capital of 9.4 per cent, while exceeding the The Company generated strong cash flow from current year benchmark, was slightly down on 9.8 operations of $87.7 million before payments for new capital was employed in the current year to develop strong operating cashflows (before acquisitions) the portfolio and make new land acquisitions for over FY2023. development in future years. The dividend reinvestment and bonus share plans Consistent with the broader equity markets, the were in operation for the FY2021 final dividend paid Company’s share price fell over the financial year, in October 2021, raising $4 million in equity during although the impact for property sector stocks, and the year. The dividend reinvestment and bonus share Cedar Woods in particular, was larger with the sector plans were subsequently suspended for the FY2022 falling out of favor with investors and the Company interim dividend in response to share market volatility exiting Standard and Poor’s (S&P) ASX 300 index and remain suspended for the FY2022 final dividend during the year. This weighed on total shareholder to be paid in October 2022. return, which was -42.4 per cent for the year, underperforming the (S&P) Small Industrials Index which reported a -24.0 per cent return. The Board however remains confident that the delivery of the Company’s strategy will continue to unlock value in its property portfolio resulting in earnings and dividends performance that will be rewarded over time and be reflected in the share price. CAPITAL MANAGEMENT The Company’s history of disciplined capital management and continued focus on its strategic priority of Financial Strength continues to position it well to deal with an unpredictable economic environment that has arisen following the COVID-19 pandemic and has been compounded during the year by conflict in Europe. At 30 June 2022, net bank debt stood at $198.7 million, retaining approximately $87.8 million in undrawn headroom in the Company’s long-term debt facilities to fund the development of the Company’s existing property portfolio as well as contracted land acquisitions that will generate future growth. Net bank debt-to-equity at 30 June 2022 was 47 per cent, in the middle of the Company’s target debt to equity range of 20 to 75 per cent. Net debt to total tangible assets less cash was 25.6 per cent at year end and corporate facility interest cover was approximately 9 times, well in excess of minimum facility covenant of 2 times. The Company is operating within all of its facility covenants. PORTFOLIO PERFORMANCE Cedar Woods’ strategy to grow a national project portfolio diversified by geography, product type and price point continues to prove successful. During FY2022 Cedar Woods’ land estates in Queensland and Victoria were able to capitalise on very strong demand from home buyers in those States. With significant earthworks and civil construction now underway at these estates, they are expected to provide large contributions to FY2023 settlements. Townhouses and apartments in South Australia continued to perform well with the sell out of a number of stages that will deliver settlements in future financial years. Sales were however softer in Western Australia following very strong results achieved in the prior two years at the peak of government stimulus for housing construction. The Western Australian property market continues to present compelling value, with the Perth median house price one of the most affordable in the country and strong employment opportunities and economic conditions driven by the mining sector expected to translate to outperformance for Western Australian property over time. Cedar Woods’ diversified portfolio helps ensure it is positioned to perform well through different property cycles across state markets. 14 15 Cedar Woods Properties LimitedAnnual Report 20228 2 Y F 7 2 Y F 6 2 Y F 5 2 Y F 4 2 Y F 3 2 Y F i n a m e R s t i n U / t o L / t o L s t i n U j t c e o r P e p y T t c e o r P j n o i t a c o L / r o d i r r o C e m a N j t c e o r P 2 2 0 2 E N U J 0 3 T A S A T R A H C E N L E P P T C E J O R P I I                0 7 4 0 5 6 6 2 7 5 4 5 1 0 1 4 7 9 3 , 1 0 0 2 , 1 0 8 0 , 1 1 4 1 3 1 0 0 1 3 0 1 3 1 5 , 5 0 7 9 2 1 2 5 1 4 5 8 7 8 2 3 8 1 2 0 1 9 6 1 2 8 3 0 2 7 9 9 , 1 1 8 2 1 3 4 6 1 5 9 2 3 7 5 5 , 1 1 9 4 1 4 7 1 4 8 0 4 0 4 2 , 1 7 0 3 , 0 1 8 2 4 3 8 1 , 1 2 3 4 , 1 7 7 2 7 0 3 5 1 9 3 5 5 , 1 0 0 2 , 1 0 8 0 , 1 1 4 1 3 1 0 0 1 1 3 4 4 5 2 4 1 4 6 6 1 5 1 4 5 8 7 8 2 3 8 1 9 6 4 7 2 8 3 0 2 1 8 2 9 8 8 6 1 5 9 2 3 4 4 9 4 9 3 9 1 4 1 6 4 d n a L l a i t n e d s e R i d n a L l a i t n e d s e R i d n a L l a i t n e d s e R i d n a L l a i t n e d s e R i d n a L l a i t n e d s e R i d n a L l a i t n e d s e R i d n a L l a i t n e d s e R i d n a L l a i t n e d s e R i d n a L l a i t n e d s e R i t s a E h t r o N t s a E h t u o S t s a E h t u o S t s a E h t u o S h t u o S h t u o S h t r o N h t u o S t s a E I H T R E P - A L A R T S U A N R E T S E W d r o f y B t a k o o r B e h T m a h b a r B , a l l e i r A i l i s v d a B h t r o N i , g n d n a L s r a l l i M d a e m h s u B n o t n i l g E p r a c S e h t n o d r o f y B l e a d t s e r r o F , s i r a o S l i i s v d a B l , s m u g r e v R i a r r a n P i j s t n e m t r a p A d n a s e s u o h n w o T t s a E r e n n I i o c a b u S , o r t n o c n I s e s u o h n w o T d n a d n a L l a i t n e d s e R i d n a L l a i t n e d s e R i h t u o S h t u o S p u l l l e y a D t a e g a e r c A e h T m a h g n k c o R i s e s u o h n w o T d n a d n a L l a i t n e d s e R i t s a E h t u o S l n e e r G e a d s i r r a H S T C E J O R P ” V J “ I - A L A R T S U A N R E T S E W s t n e m t r a p A r e t s A d n a s e s u o h n w o T s e s u o h n w o T s t n e m t r a p A t s e W h t r o N t s a E h t u o S t s a E h t u o S n e e r G n o s k c a J , s t n e m t r a p A n o t g n i t n u H h t u o S n o t y a C l , n e e r G n o s k c a J s n a b A l t S , A t S s e s u o h n w o T D B C f o t s e W h t r o N l e n r u o b e M h t r o N , n o s e v e L 8 8 E N R U O B L E M I - A R O T C V I 8 4 3 , 2 s t n e m t r a p A , s e s u o h n w o T , d n a L l a i t n e d s e R i s e s u o h n w o T / s e c fi f O / s t n e m t r a p A e r u t u F ) s e r a t c e h 7 1 ( l i a c r e m m o C s e c fi f O a t a r t S d a o R n o t r e v O 1 0 1 s e c fi f O a t a r t S s n o m m o C n o t s o B s t n e m t r a p A n o c n L i l t s e W t s e W t s e W t s e W t s e W t s e W l i a c r e m m o C d n a s t n e m t r a p A D B C f o h t u o S d n a L l a i t n e d s e R i d n a L l a i t n e d s e R i t s e W h t r o N h t r o N s t n e m t r a p A d n a s e s u o h n w o T d n a L l a i t n e d s e R i d n a L l a i t n e d s e R i d n a L l a i t n e d s e R i h t r o N r e n n I t s e W h t r o N h t u o S h t r o N s t n e m t r a p A d n a s e s u o h n w o T t s a E h t u o S r e n n I s t n e m t r a p A t s a E h t u o S r e n n I s t n e m t r a p A t s a E h t u o S r e n n I s t n e m t r a p A d n a s e s u o h n w o T s t n e m t r a p A t s e W h t r o N t s e W h t r o N I E N A B S R B - D N A L S N E E U Q i g n d n a L s m a i l l i W i g n d n a L s m a i l l i W i g n d n a L s m a i l l i W i g n d n a L s m a i l l i W i g n d n a L s m a i l l i W i g n d n a L s m a i l l i W k n a B h t u o S t r e l l o W , r e t r a u Q n o s a M e s R i r e s a r F l , e c a P a r a C l i n w o o o o W l , e l l i v e r G I I E D A L E D A - A L A R T S U A H T U O S n o r d e K r e p p U l , e a d n e l l E y r a g n e p r u B , e g a S l n a e c a M h t u o S i e d s n e G l , s t n e m t r a p A h c r a n o M i e d s n e G l , s t n e m t r a p A e c a r G i e d s n e G l p i l S s ' r e h c t e F l , s t n e m t r a p A o c c o r i S P U O R G L A T O T i e d a e d A l t r o P , p i l S s ' r e h c t e F l l s e a S & t n e m p o e v e D l , i g n s a e L s t n e m e l t t e S t s r i F  l s e a S & t n e m p o e v e D l i g n n o z e R & n g s e D i , i g n n n a P l s t i n u / s t o l d e l t t e s n u o t i l s e t a e r n a m e R s t i n u / s t o L d n a s n o i t i s u q c a i l a n o i t i d n o c s e d u c x e e n l i l i e p p t c e o r p e h T j CORPORATE OBJECTIVES AND PROGRESS ON STRATEGY programs were broadened, helping to build staff skills and provide more flexible working conditions. 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 $37.4 million and total fully franked dividends of 27.5 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 in recent years has reinforced the Board and Management’s view that the Company’s strategy is appropriate for current and future economic conditions. Diversity of product type ensures the Company has sufficient product offering available to purchasers at different price points. Further, with differing conditions in each state, the benefit of 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 FY2022, evidenced by ongoing strength in employee engagement satisfaction results. Acting on the results of a staff survey, staff training and career development During FY2022 more than 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 12 months, the Company has achieved a number of milestones in the continued execution of its Digital and Technology Strategy. Improvements to the customer relationship management system were rolled out along with a structured sales training program to modernise and improve customer communication. The continued investment in digital marketing initiatives to better understand and improve the customer journey, is expected to deliver better lead-to-sale conversion. The Company also implemented an integrated Human Resources and Payroll system which is already delivering an enhanced user experience for staff. Sustainability and quality remain central to the Company’s values. The Company continued to implement its Environment Social and Governance (ESG) strategy during the year and for the first time, implemented a carbon footprint mapping of Greenhouse Gas emissions. Details of this and other environmental initiatives can be found in the ESG report, commencing on page 21 of this Annual Report. Cedar Woods continued its 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. Cedar Woods employees were engaged in various activities including The Smith Family Toy and Book Appeal, programs such as ‘Straight Talk’ career information sharing for Year 6 students, and the ‘Dream Run’ and the ‘Bridge to Brisbane Fun Run’ fundraising and fitness activities. The Company also continues to support community groups nationally as part of its Community Grants Program, now running for the 16th year. The program provides 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. 16 17 Cedar Woods Properties LimitedAnnual Report 2022 Financial Strength During the year the Company completed the annual review of its corporate finance facility. As part of the review, the total facility limit was increased to $300 million from $205 million and the terms extended to 30 January 2025 for the three-year facility ($240 million) and to 30 January 2027 for the five-year facility ($60 million). The facility is provided by three of the ‘Big-4’ banks and provides long tenure and security of funding with ongoing compliance of facility covenants. Earnings Growth The Company maintained its focus on earnings growth through margin improvements on some existing projects and new acquisitions to augment future earnings. During FY2022, Cedar Woods unconditionally acquired more than 2,000 lots through acquisitions in Fraser Rise and Southbank in Victoria and Eglinton, Henley Brook and Rockingham in Western Australia. The Company also holds conditional contracts with a combined value of $60 million to acquire additional land holdings in South-East Queensland and Victoria, with the potential to add up to another 800 lots to the portfolio if contract conditions can be satisfied. A disciplined filtering and assessment of acquisition opportunities is applied to ensure successful acquisitions are aligned with the Company’s regularly reviewed acquisition criteria, market conditions and capital management objectives. Sales volumes were strong through most of FY2022, however the last quarter saw sales rates slow as a result of interest rate increases and low stock levels for that quarter. Slower sales could persist for some states over FY2023 however it is expected the more affordable markets of Western Australia, South Australia and Queensland will outperform. Significant price growth was experienced at most company projects in Queensland, Victoria and South Australia in FY2022 which in most cases served to counteract cost increases experienced. Recent price falls need to be viewed in the context of the dramatic price increases which nationally were 24% in CY2021 alone (source ABS). Rental vacancies decreased markedly over FY2022, resulting in strong rental growth and growing yields with demand from investors expected to remain relatively strong as a result. Strong population growth is expected as the Federal government responds to nationwide skills shortages, and migrant numbers are expected to be increased and brought forward. Noting low rental vacancy rates, the expected increase in inbound migration and project deferrals industry wide, new dwelling supply across most housing types and jurisdictions is expected to be insufficient to meet demand, which will extend and intensify the current housing shortage across the nation. Cedar Woods is well placed to capitalise on any uptick in demand in an MARKET OUTLOOK undersupplied market. The fundamentals that most impact the new housing sector are economic conditions, interest rates, consumer sentiment, unemployment and population growth. Economic conditions, record low unemployment and population growth will all significantly support the sector but with rising interest rates, inflationary pressures and poor consumer sentiment currently counteracting those fundamentals. Construction cost increases were experienced during FY2022 but are moderating as stimulus related construction activity is progressively completed and builder capacity improves. Enquiry from builders for work commencing in CY2023 increased in Q4 FY2022 serving as an indicator of improved capacity and the expected moderation of costs. COMPANY OUTLOOK Cedar Woods starts FY2023 in a strong position with $500 million in presales expected to settle over FY2023, FY2024 and FY2025. The Company is targeting growth in earnings in FY2023 and is well placed for the medium term with a pipeline of more than 10,300 undeveloped dwellings/ lots/ offices across four states. The Company’s outlook is subject to property market and construction sector conditions, with workforce and supply chain constraints affecting delivery timeframes at some locations. The Company’s expectation for FY2023 full year earnings takes into account known delays, although there remains some residual risk that a limited number of forecast Q4 FY2023 stage completions, and hence revenue, may move into early FY2024. A number of new projects are expected to contribute to earnings from FY2023, including Mason Quarter, Fraser Rise and Lincoln and Aster apartments in Victoria, Monarch and Sirocco apartments in South Australia, Incontro townhouses, Eglington and Rockingham in Western Australia, and Sage and South Maclean in Queensland. Further acquisitions are anticipated to supplement the Company’s portfolio in future years. RISKS The Audit and Risk Management Committee assists the Board in the effective discharge of its responsibility for risk oversight and ensuring that internal control systems are in place to identify, assess, monitor and manage risk. A Risk Management Framework is in place 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 Company is also exposed to the property cycles in the metropolitan markets in which it operates, i.e. Western Australia, Victoria, Queensland and South 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 typically achieved its profit objectives by managing both prices and volumes through the property cycle. The COVID-19 pandemic and conflict in Europe have caused major disruption to the economy and business globally and within Australia, including the business conducted by the Company. The volatile environment 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. 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 The general risks to the Company’s performance include opportunities, and cyber risks. those relevant to the economy and 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 the Australian Prudential Regulation Authority (APRA), the strength of the labour market and consumer confidence. While the Company has no material exposures to ESG risks, the ESG report starting on page 21 provides further details on how the Company is managing ESG risks. 18 19 Cedar Woods Properties LimitedAnnual Report 2022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. At the Annual General Meeting in November 2021, shareholders resolved the Board’s earlier appointment of Mr Paul Say as an independent Non-Executive Director. With over 40 years of experience in the commercial and residential property sectors, and deep networks across property and finance, Mr Say has integrated quickly and is providing valuable contribution to the Cedar Woods Board. 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. William Hames Chairman Nathan Blackburne Managing Director 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  Respect indigenous and cultural heritage  Stimulate economic investment and jobs  Foster cooperative stakeholder relationships  Activate the communities we create  Foster diversity, equal opportunity and career development in the workplace  Provide a safe work environment for all who work on Cedar Woods projects  Instill our values and promote an ethical business culture through strong governance being environmentally and socially responsible. This section communicates our progress and We continually look for ways to:  Reduce our ecological footprint  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 At Cedar Woods, we realise that achieving our vision, purpose and strategic priorities is a journey, they provide a road map. This year we spent time thinking about our journey so far, looking back at our history. While last year, we published our inaugural ESG report, our track record shows that the same ESG values have consistently been an inherent part of our corporate DNA, as we have always strived to achieve the best possible sustainable environmental, economic and social outcomes for our stakeholders. In thinking about tomorrow, we acknowledge the role of our past achievements in building a strong foundation on which we can grow into the future. The following timeline shares some of these achievements over the 28 years, since ASX listing. ENVIRONMENT We think about tomorrow. SOCIAL GOVERNANCE We deliver on our word for all our stakeholders. We create community connection. We are committed to achieving the highest standards of Corporate Governance. 20 21 Cedar Woods Properties LimitedAnnual Report 2022 2 2 0 2 t a A D S s m a i l l i W i g n d n a L l i a i t n e d s e R A D U I e c n e l l e c x E e r o m ( d r a w A , ) s t o l 0 5 2 n a h t A W d a e m h s u B h t i i w p h s r e n t r a p y l i m a F h t i m S e h T l d e c y c e r i t h g e w y b l a i r e t a m C V I , n e e r G n o s k c a J t a 8 1 0 2 1 2 0 2 l a n o i t a N n o i t c u r t s n o c f o y t i r o a M j 8 1 0 2 I A D U r e d n u l t n e m p o e v e D o r i v n E l o o t n o i t a t i d e r c c a n o i t a t i d e r c c a ’ f a e L 6 ‘ l r a o s f o n o i t c u d o r t n I e g a r o t s y r e t t a b / m e t s y s ) A S ( i e d s n e G l t a 8 1 0 2 t n e m n r e v o g - n o n t s r i F 0 2 0 2 e c n a n fi y t i u q e d e r a h s A S n i n o i t u o s l r e f f o o t n o i t a z n a g r o i 4 1 0 2 l n o t y a C d e r i u q c A – D O T h t u o S ) C V I ( n e e r G n o s k c a J t a p i l S s ’ r e h c t e F l / e l l i v e r G / 7 1 0 2 i s e v e h c a d a e m h s u B 8 1 0 2 i e d a e d A l t r o P t a D O T 5 1 0 2 i n w o o o o W l t a D O T 1 2 0 2 t r o p e r G S E D F C T s e d u c n l i s e r u s o c s d i l 7 1 0 2 s t e e m d r a o B i y t i s r e v d r e d n e g t e g r a t 1 2 0 2 t a A D S n o s k c a J n e e r G 9 1 0 2 l e b a d r o f f a ” t l i u B “ e v i t a i t i n i i g n s u o h k o o r B e h T t a d r o f y B t a 5 1 0 2 l e b a d r o f f A A D U I d r a w A g n s u o H i ) A W ( s t n e m e E – l 2 1 0 2 s n a b A l t S t a D O T . d e s a h c r u p 6 0 0 2 / y a r c s t o o F t a D O T e g a l l i V y r u b n a B 1 1 0 2 e n i r a C f o n o i t i l o m e D 7 0 0 2 t a e m o H y t i r a h C e v o C s r e n i r a M % 0 8 g n v e h c a i i – E F A T . g n i l c y c e r d n a e s u e r 1 1 0 2 % 0 9 d e c y c e R l l s a i r e t a m n o i t c u r t s n o c y r u b n a B t a i t h g e w y b C V I , e g a l l i V 5 0 0 2 i s n w s m u g r e v R e h T i ) A W ( I A D U l a r u g u a n I n a b r U e v i t i s n e S r e t a W d r a w A n g s e D i 2 0 0 2 i s n w e v o C s r e n i r a M r o f d r a w A l a n o i t a N A D U I e c n e l l e c x E l a t n e m n o r i v n E 7 9 9 1 i s n w h a r u d n a M t r o P ’ s r o t c a r t n o C l i i v C e s a C – i n o i t a c o s s A d r a w A h t r a E n o i t a d o m m o c c A y t i l i b a s D i l i a c e p S & e b a d r o l f f A ) C V I ( i g n d n a L D N E G E L ) D O T ( l t n e m p o e v e D d e t n e i r O t i s n a r T t n e m n o r i v n E l a r u t a N e s u e R e v i t p a d A y t i n u m m o C y t i l i i b a n a t s u S e c n a n r e v o G e g a t i r e H 2 0 0 2 D O T l a r u g u a n I l d e n n a p r e t s a m s m a i l l i W t a y t i n u m m o c I Y R O T S H G S E R U O 22 a l l i V / e s u o h n w o T A H I r a e Y e h t f o t n e m p o e v e D l o o r e n n a W f o l ) s e r t s e K e h T ( l i a n o i t a N s n w s e r t s e K e h T l y t i C h t i i w p h s r e n t r a p 3 0 0 2 I A H s a d e t i d e r c c a P W C r e n t r a p t r a m s n e e r G l a i t n e d s e R i t s e B t n e m p o e v e D l ) s t o L 0 5 2 r e d n u ( l s e m o H e b a n a t s u S i n i i i ’ n o s v o c E ‘ e m o h l a n o i t a N A D U s n w I i 2 1 0 2 9 0 0 2 n o i t a r t s n o m e D 0 0 0 2 h a r u d n a M t r o P 7 9 9 1 i s n w h a r u d n a M t r o P l a n o i t a N ) A W ( I A D U d r a w A s ’ t n e d s e r P i 3 0 0 2 h t i w n o i t a r o b a l l o C l i a n g i r o b A n a n W i j . n o i t a r o p r o C , m a h g n k c o R i t a 2 0 0 2 t s r fi f o n o i t i s u q c A i m r o f t l i u b c fi c e p s i y t t e J e h T , s t c e o r p j 9 9 9 1 e r a s e t i s e g a t i r e h s u o n e g d n i I l d e t a r b e e c d n a d e t c e t o r p s t s i t r a l i a n g i r o b A l a c o l h t i w . t r a c i l b u p o t g n i t u b i r t n o c m a h g n k c o R i t a a i r A . e r t n e c n w o t 4 9 9 1 e h t n o d e t s L i k c o t S n a i l a r t s u A e g n a h c x E 0 2 0 2 5 1 0 2 0 1 0 2 5 0 0 2 0 0 0 2 6 9 9 1 KEY ESG CATEGORIES & OBJECTIVES 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 Categories Response Governance Leadership and Management Spotlight on Ethics Social Shareholders and Investors Our People Customers Communities Suppliers Government and Regulators  Board and Committees  Executive Management  Risk Management including Cyber Security  Code of Conduct  Ethics and Responsible Business Practices  Modern Slavery  Value Creation  Transparency  High Performance Culture  Health and Wellbeing Program  Opportunity, Diversity and Inclusion  COVID-19 Response  Work, Health and Safety  Retention and Career Progression  Customer Engagement  Digital Transformation  Product Value  Community Connection  Our Broader Community - The Smith Family Partnership  Design Quality and Liveability  Diversity and Inclusiveness  Activation and Sponsorship  Respecting Culture and Heritage  Fair and Ethical Procurement  Preventing Modern Slavery  Performance  Work, Health and Safety  Land and Built Form Delivery  Economic Impact  Community Engagement  Collaborative Partnerships Environment Climate-related Risk (Policy, Legal, Technology, Market and Reputation)  Financial Impact Assessment  Risk Assessment  Adaption and Mitigation Climate-related Opportunity Resource Efficiency  Corporate Carbon Footprint  Energy Efficiency  Water Efficiency Energy Source  Renewable Energy Products, Services and Market  Customer Focus Resilience  Credentials and Capability  Considering Interdependencies 23 Cedar Woods Properties LimitedAnnual Report 2022 GOVERNANCE - FY2022 HIGHLIGHTS Taskforce on Climate-related Financial Disclosures (TCFD) first reported in FY21 annual report. ESG Strategy implementation under way. MSCI gives Cedar Woods `A’ ESG rating. *Disclaimer Strong results achieved in cyber security review. On-going digital transformation achieves milestones in human resource management systems. 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. i d n a p h s r e d a e L t n e m e g a n a M Board and Committees 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:  The Audit and Risk Management Committee is responsible for financial reporting, risk management (including ‘ESG risks’) and external audit; and  The Remuneration and Nominations Committee is responsible for matters relating to Board composition, human resources, remuneration, succession, inclusion and diversity. Executive Team 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 Management 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. The Board conducts a biennial review of the risk management framework structure, with the last in 2021. Risk Management Framework t n e m e g a n a M d n a p h s r e d a e L i RISK REPORTING & MONITORING Tools Risk Committee Report MD Report Risk as part of ‘business as usual’ RISK IDENTIFICATION Tools Risk Reviews 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 Response Corporate Governance Framework Corporate Plan Audit and Risk Management Committee Risk Management Framework Remuneration and Nomination Committee Risk Register 24 25 Cedar Woods Properties LimitedAnnual Report 2022 Cyber Security To ensure that investors, employees, and customers continue to trust Cedar Woods with their private and confidential data, we undertake annual checks and reviews of our cyber-security systems and controls. In FY2022, the Company has conducted supply chain reviews, external penetration testing and a comprehensive internal review with strong positive results. The 2022 internal review resulted in a 60% reduction of cyber security risks, reflecting the success of the FY2022 cyber-security strategy. r e b y C Strategic Response Cyber Security Strategy IT Security Policy FY2022 Highlights The appointment of Mr Paul Say as an independent, Non-Executive Director was overwhelmingly approved by shareholders at the 2021 AGM in November. The Remuneration and Nominations Committee and the Board considered the composition of the two Board committees and with Mr Say joining the two Board committees, Robert Brown stepped down from each of the committees, with each committee now comprised wholly of independent directors. The senior management team was strengthened by the appointment of a new State Manager in Queensland. Management refreshed the corporate plan and meetings were held with the Board to address the corporate strategy. The Audit & Risk Management Committee reviewed the Company’s Risk Framework and performed deep dives into cyber-related and corporate taxation risks. The Company refreshed a number of corporate policies including the Environmental Management Climate Change Policy. In recognition of the Company’s progress in ESG it received an ‘A’ rating from MSCI, a global provider of indices, ESG and climate products. An independent review of the Company’s cyber security posture was conducted with strong results. i s c h t E n o t h g i l t o p S 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 are stated on page 10 of this report and are supported by a number of policies. Modern Slavery Our Modern Slavery Policy addresses our approach to identifying modern slavery risk and outline steps for mitigating modern slavery and human trafficking in our operations. Strategic Response Code of Conduct Whistle Blower Policy Conflicts of Interest Policy Anti-Bribery and Corruption Policy Continuous Disclosure Policy Insider Trading Policy Modern Slavery Policy Privacy policy SOCIETY – FY2022 HIGHLIGHTS 100% Participation in staff survey Executive appointment boosts gender diversity. Affordable Housing delivered across projects, nationally Over 1,000 jobs created in the economy Awards Staff member wins UDIA WA Young Development Professional Award and UDIA National Young Leaders Award National Landscape Architecture Award for Land Management at Ellendale Smith Family Partnership Cedar Woods and The Smith Family making a difference in the lives of disadvantaged children Enhanced Flexible Working policy and new COVID vaccination policies to protect staff and other stakeholders 13 internal promotions We do what we say we’ll do. 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: d n a s r e d o h e r a h S l y g e t a r t S s r o t s e v n I 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 Response Shareholder returns Continuous disclosure policy Shareholder and Investor relations Investor Communications policy FY2022 Highlights The Company assessed its operations and supply chain for modern slavery risk and provided its second Modern Slavery report. Results of the Company’s procedures did not detect any incidences of modern slavery. Training is provided for all staff throughout the business on important ethical issues. During the year training was provided on the securities trading policy and modern slavery policy. FY2022 Highlights Returns to shareholders are detailed in the ‘Financial Performance Highlights’ on page 8 of the annual report. In November 2021 we provided a ‘hybrid’ form of AGM in which shareholders could participate in person or join the meeting online. At the AGM, all resolutions were supported by shareholders. 26 27 Cedar Woods Properties LimitedAnnual Report 2022 l e p o e P r u O 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 survey to gauge staff satisfaction and engagement. These measures represent the level of enthusiasm and connection staff have with the Company. It’s a measure of how motivated and committed people are within the business. There are several staff communication platforms, including the quarterly Operational Updates and ‘Woodsy’, our intranet platform which enable staff to keep up to date with 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 health-focused webinars and free weekly physical exercise sessions and other activities such as yoga. Opportunity, Diversity, and Inclusion We are committed to a positive, diverse and inclusive workplace which encourages strong and productive relationships and provides access to equal opportunity at work. During the year we established a Diversity & Inclusion (D&I) Committee to support our efforts in achieving a more diverse workforce (which includes gender as well as other areas such as ethnicity, religion, and sexual orientation). The committee is chaired and comprised of staff members and has established a charter and series of priorities and objectives to advance the diversity and inclusion agenda and monitor and measure progress on D&I activities and engagement outcomes. COVID-19 Response The challenge of COVID-19 has demanded an ongoing extra level of agility and resilience. Policies with respect to managing COVID-19 have been implemented and technology solutions provided to enable remote working and additional leave requirements. Policies have been updated as the nature of the pandemic evolves. Work, Health and Safety (WHS) We prioritise the health and safety of our employees and contractors. Our health and safety policies and practices also take into consideration 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 WHS risks and performance. Audits are performed annually of the WHS compliance at state operations. 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 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 Response Company Vision, Values and Priorities COVID-19 Response Initiatives Equal Employment Opportunity Policy Health and Wellness Programs Diversity and Inclusion Policy and Committee Remuneration benchmarking and reviews Employee Engagement Survey Staff training strategy SuperCedar employee recognition awards Performance management Occupational WHS System, Reporting and Audit Cedar Woods Advance (Career Progression) FY2022 Highlights The proportion of women employees currently sits at 49 per cent. The number of women in senior management is currently at 36 per cent. The number of women on the Board is two out of six, or 33 per cent. We were pleased that in our most recent survey 100 per cent of our people completed the employee survey. Staff satisfaction is currently 85 per cent. Survey results saw a high level of interest in additional training on people management, mental health and wellness and specific systems training, which are being incorporated into the training program. Cedar Woods recognises that many of its staff require working arrangements that are outside of a traditional work structure. Over 60 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. At the end of the financial year the Company introduced a ‘Purchase Leave’ policy whereby employees can purchase up to two weeks additional personal leave a year by way of salary sacrifice, spreading the cost over the remaining pay periods in the year. 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 13 internal promotions during the financial year. ‘SuperCedar’ Awards encourage and reward employees who are living our corporate values. During the year 13 staff received a SuperCedar Award after being nominated by their peers and judged by the executive team. Another important achievement during the year was the proud moment a Cedar Woods staff member won the UDIA WA and National Young Development Professional Award 2021. An initiative completed during the year was the implementation of a new integrated human resource, remuneration and performance management system as part of the digital and technology transformation. The system offers a leading edge and seamless solution for staff onboarding, objective setting and performance reviews, remuneration setting and payroll, including a staff portal for easy access to data for employees. 28 29 Cedar Woods Properties LimitedAnnual Report 2022 Metrics and Targets Gender Diversity 40% 49% 30% 36% 30% 17% 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 % FY2022 Actuals Staff Satisfaction Staff Working Flexibly 1 2 0 2 Y F 2 2 0 2 Y F 1 2 0 2 Y F 2 2 0 2 Y F 76% 85% 21% 64% WE FOCUS ON INTERNAL CAREER DEVELOPMENT AND PROMOTION, ENABLING STAFF TO DEVELOP NEW SKILLS, BROADEN THEIR EXPOSURE AND BUILD RELATIONSHIPS ACROSS THE COMPANY. 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 The launch to market of new project websites provides a refined and consistent user experience for all our customers, providing real time stock availability, an enhanced customer journey and strategies to nurture our prospective customers. 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 ecologically sustainable principles, which contribute to liveability and long term investment value. 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. s r e m o t s u C r u O Strategic Response Community Development Programs Customer Inclusion Initiatives (affordability, disability, community diversity, transition to retirement) Net Promoter Score surveys along the customer journey FY2022 Commentary The challenging construction conditions seen in some jurisdictions meant the Company had to make the tough decision to defer construction at certain project stages where it was no longer possible to commence in the current environment. The Company sought to minimise the impact on our valued customers by contacting each customer and providing opportunities for further discussion while prioritising the return of their deposit. While sales and construction market conditions are mixed currently, the sector is expected to perform well in the medium term as our diversified portfolio will continue to appeal to a broad range of customers, across the country. 30 31 Cedar Woods Properties LimitedAnnual Report 2022 FY2022 Highlights 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. During the year staff have engaged in The Smith Family programs such as ‘Straight Talk’ career information sharing for year 6 students, and the ‘Dream Run’ and the ‘Bridge to Brisbane Fun Run’ fundraising and fitness activities. The South Australian team hosted Cedar Woods’ first Work Inspiration event, which saw 15 students visit Cedar Woods’ Glenside project. Staff involved in the project outlined key project information to the students and explained the types of jobs that were involved in the Glenside community development, from early-stage planning to end of delivery. Students had the opportunity to ask Cedar Woods staff about their career pathways and how they got started in the industry. Similar events are planned at Bushmead in WA and Williams Landing in Victoria later this year. 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 another prestigious award, the 2021 National Landscape Architecture Award for Land Management at Ellendale. In FY2022 we have continued to deliver affordable housing and specialist disability accommodation and recognise the role such housing has in creating diverse and inclusive communities. Since its inception, the Company’s Community Grants Program has donated more than $600,000 dollars to support a range of community projects, organisations and clubs that operate in the localities of our projects. This year, $70,000 was donated. $70,000 donated to local community groups in FY2022 Proud partnership with The Smith Family WE BRING PEOPLE TOGETHER, FOSTERING CONNECTIONS WHICH ENRICH THE LIVES OF PEOPLE THROUGH THE PLACES WE CREATE. Community Connection One of our Values, ‘Creating Community Connection’, recognises that our projects bring people together, fostering connections that enrich the lives of people through the places we create. Our Broader Community – The Smith Family Partnership In 2021 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 and provides our staff the opportunity to be involved in activities supporting this worthwhile cause. Design Quality and Liveability 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 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 communities through our direct provision of amenities, infrastructure public spaces and jobs. We implement resident onboarding initiatives and community grants for local community groups. 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. s e i t i n u m m o C r u O Strategic Response Respecting culture and heritage Affordable and Diverse Housing Smith Family Partnership Community Sponsorship 32  Smith Family Tour, Glenside SA 33 Cedar Woods Properties LimitedAnnual Report 2022 l s r o t a u g e R d n a t n e m n r e v o G 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 of 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. 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 Response 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) FY2022 Highlights The 2022 Financial Year saw the Company spend over $178 million in development 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 approximately 1,246 jobs nationally.  Boston Commons Strata Office, Williams Landing VIC *Artist impression s r e i l p p u S r u O 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 contribute to our forums on innovation and cost efficiency, while maintaining quality outcomes. We also support the payment of our suppliers on fair payment terms. Performance The Company continues to periodically undertake comprehensive contractor reviews. Evaluation criteria include overall quality, timeliness, cost efficiency, etc. Material suppliers are assessed for financial health and modern slavery risk as part of the on-boarding process and prior to the issue of significant new contracts. Work, Health and Safety We prioritise the health and safety of our employees and contractors. Our WH&S policies and practices also consider the protection of other stakeholders. 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. In addition, an independent audit is conducted annually on the compliance with the Company’s WHS system. Strategic Response Supplier onboarding process Contractor Quality and Financial Reviews Stakeholder and industry events Occupational Work, Health and Safety Policy, Procedures & Audit FY2022 Highlights We frequently 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 over 97 per cent passing or exceeding the required benchmark. In our most recent payment times review, over 93% of our supplier invoices were paid within 60 days, a 3% improvement on the prior year. 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 and increases in cost. There is continuing risk of supply shortages and cost increases for materials. The Company had a strong safety record during FY2022, with no incidents of fatal or serious injuries occurring on any of our project sites. 34  Byford on the Scarp, Byford WA 35 Cedar Woods Properties LimitedAnnual Report 2022 ENVIRONMENT – FY2022 HIGHLIGHTS First Carbon Footprint Mapping completed in FY2022 for Greenhouse Gas Emissions. 8 Transit-Oriented Projects 100% of built-form residential located in high-frequency transit precincts. Car sharing, electric vehicle hire and charging stations installed at 4 new apartment buildings. Embedded Energy Networks, incorporating solar, across our apartment portfolio. Cloud strategy & e-contracts implementation reduces carbon footprint. All Residential lots sold with energy and water efficiency guidelines. Award winning Ellendale and Bushmead projects continue to protect, restore and regenerate a combined 277ha of conservation land. CLIMATE RELATED FINANCIAL DISCLOSURES Cedar Woods’ relationship with the environment has always been core to our business model but addressing climate change risk and realising emerging opportunities through mitigation and adaptation is becoming increasingly important. and the Government’s commitments to emission reductions by increasing the take-up of renewable energy. We expect the property development sector will play an increasing role in this carbon reduction strategy.  The property development sector is strongly regulated, with various mitigation and adaption measures already being implemented at State Last year the Company prepared its inaugural ESG levels, including: Strategy consistent with the Financial Stability Board’s a. Sea Level Rise and Coastal Erosion: state Taskforce on Climate-Related Financial Disclosure (TCFD) for addressing climate change-related risks and opportunities. The Strategy is currently under review, having regard to proposed changes to the disclosure and reporting standards. 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. The following observations and assumptions are noted:  The Company notes the recent introduction to Federal Parliament of the Climate Change Bill 2022 government coastal planning policies make provision for the latest data on sea level rise and storm surge; mapping of low-lying areas; and establishing 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 requires commercial buildings above a certain floorspace to meet energy efficient requirements climate-related risks. Climate-related issues are also through the National Australian Built Environment considered when reviewing the Corporate Plan, Rating System (NABERS) certification scheme. annual budgets and business plans. Other relevant elements of building design, considering climate change, are energy efficiency and water sensitive design. c. Bushfire: 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). d. Storms, cyclones and flooding: Federal 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.  Our analysis is combined to address both climate change scenarios (>1.5°C or >2°C) under the TCFD model.  Cedar Woods’ climate-related risk assessment is focused 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 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. (associated travel and household emissions over Existing and emerging regulatory requirements related the 40-year lifecycle of buildings). to climate change are incorporated into overall risk  The highest levels of perceived risk in the analysis management, risk registers and risk reporting. 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 36 37 Cedar Woods Properties LimitedAnnual Report 2022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 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. Policy Risk: Bushfire. Time horizon: Short to long-term l a n o i t i s n a r T Policy Risk: Rainfall, Storms, Cyclones and Flooding. Time horizon: Medium to long-term Policy: Water Scarcity. Time horizon: Short to long-term 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. w o L 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, overriding 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 an 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 an 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. w o L m u i d e M w o L h g H i m u i d e M 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 l a n o i t i s n a r T e t u c A 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. Performance is enhanced through adherence to ESG strategy and transparent reporting. Cedar Woods has limited exposure to vulnerable coastal locations. Cedar Woods adheres to regulatory fire management requirements at its land holdings. 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. w o L w o L w o L w o L w o L m u i d e M m u i d e M w o L 38 39 Cedar Woods Properties LimitedAnnual Report 2022y g r e n E e c r u o S The federal government recently announced its 2030 and 2050 emission reduction targets that will be largely driven by a substantial shift to renewable energy sources. Innovative renewable power solutions, such as integrated microgrids and embedded energy networks are emerging in the market and the Company has begun to explore the viability of large scale application to increase the take-up of renewable energy across projects. s t c u d o r P i s e c v r e S / t Demand for Cedar Woods’ products is primarily driven by location and price. While there is growing customer e preference for water and energy efficient initiatives and other sustainability benefits as part of a housing k package, most are not prepared to incur additional cost. This is particularly the case for first-home buyers, r a where up-front cost is critical to affordability and finance approval. The Company is currently reviewing its M apartment sustainability initiatives, with a particular focus on high-value initiatives and maximum benefit-to- / cost ratio initiatives that deliver the most immediate and impactful benefit. Sustainable design at Ellendale, QLD A leading-edge environment-first design focusing on retaining and enhancing the topography, vegetation and native waterways of Cedar Woods’ Ellendale community in Brisbane is seeing biodiversity flourish as its population increases. In partnership with award-winning landscape architects Place Design Group, Cedar Woods has regenerated wildlife corridors at Ellendale within years, rather than decades. An extensive five-year planting program has involved more than 189,000 trees, shrubs and ground covers, with more than 40 per cent of the masterplan preserved as green space. Ongoing fauna management and rehabilitation includes the establishment of 64 squirrel glider poles, 320 nesting boxes and 120 metres of fauna underpasses, supporting locally and nationally significant species including koalas, squirrel gliders, possums and owls. The achievement has been recognised at a state and national level, with Ellendale and Place Design Group awarded the prestigious 2021 Australian Institute of Landscape Architects (AILA) National Landscape Architecture Award for Land Management. To date, Cedar Woods has delivered more than 440 homesites at Ellendale, supporting a population of more than 1400 people, while dedicating almost 60 hectares of natural bushland and green space to Brisbane City Council. As construction continues on the next stages of the community, work will continue on retaining, rehabilitating and enhancing new corridors of the highest ecological value, with a further 31 hectares of open space to come. CLIMATE-RELATED OPPORTUNITIES Efforts to mitigate and adapt to climate change also create opportunities. The TCFD identifies the following areas of opportunity:  Resource efficiency: achieving direct cost savings  Energy source: growing global investment in renewable energy technologies  Products and services: innovation in new low-energy products and services may improve competitiveness and capitalise on shifting consumer preferences  Markets: opportunities for new markets and asset types may lead to diversification and better positioning to a lower-carbon economy, and  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 are being further developed as part of the current ESG Strategy review. y Corporate Carbon Footprint c n e c i Increasing attention is being applied to minimising the carbon footprint of corporate operations. Cedar Woods has commenced carbon footprint mapping to better understand the business impact on emissions. 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. Resource Efficiency Residential dwellings, when occupied, consume significant amounts of energy and water. Cedar Woods is working to improve the resource efficiency of the homes it builds through updated sustainable design practices. Such measures work to reduce consumption and decrease living costs. In land estates, we facilitate climate responsive subdivision lot layout. i f f E e c r u o s e R FY2022 Highlights In FY2022 we conducted our first carbon footprint mapping on Greenhouse Gas emissions resulting from our corporate operations, including our four state offices, project sales offices and the Williams Landing Shopping Centre. Results are shown in the table below. The Company has already implemented a carbon reduction strategy and is confident that it will, over time, significantly reduce carbon emissions. Initiatives include 100% cloud technology strategy, 100% carbon offset paper and flights and 100% green power use at all state offices. The year saw the delivery of a number of the Company’s ESG Strategy objectives related to improving resource efficiency in new dwellings, including:  Improved information sharing across projects  A review of our national approach to ecologically sustainable design (ESD) considerations for new apartment projects, with the view of adopting a more consistent national approach. A greater focus on resource efficiency measures, metrics and targets, for new projects is expected as part of the ESG Strategy review. In South Australia, the 7.7-Star NatHERS rated Monarch apartments at Glenside commenced construction. Individual apartment ratings ranged from 6.4 Stars up to 9.4 Stars, averaging 7.7 Stars overall. The broad range of ESD initiatives formed a case study as part of the Company’s national review of apartment standards. FY2022 Greenhouse Gas Emissions (t-CO2-e) Corporate operations Scope 1 & 2* Scope 3# State offices Sales offices Shopping centre 67 69 447 583 608 265 243 1,116 Total 675 334 690 1,699 * Direct emissions from refrigerants and from the generation of purchased electricity # Other emissions outside scope 1&2 such as water use, waste generation, purchased goods and air travel. Emissions calculated by independent consultants from company data. 40 41 Cedar Woods Properties LimitedAnnual Report 2022 Disability Housing, Huntington Apartments, Jackson Green, Vic Cedar Woods has partnered with not-for-profit Summer Housing to deliver quality homes for young people living with disabilities in its Jackson Green development. structural provisions put in place for ceiling hoists. The homes also feature assistive technology which will support the residents in their daily lives and provide access to the 24/7 on-site concierge provider. As part of this partnership, Cedar Woods has delivered eleven properties within the 165-unit Huntington Apartments to Summer Housing. Ten of these specialist disability accommodation apartments will be utilised by people with disabilities and complex care needs while the remaining unit will provide accommodation for on-site carers. All apartments have been carefully modified to achieve Platinum level certification under the Liveable Housing Design Guidelines and meet high physical support design requirements under the National Disability Insurance Scheme (NDIS). The modifications undertaken include making the apartments wheelchair-friendly with revisions in kitchen design, doorway widths and thresholds and Located within the Jackson Green community, residents of the low-maintenance apartments will have easy access to nearby amenities, public transport and services, allowing occupants to live as independently as possible. Today there are over 4,000 young Australians with complex care needs currently residing in aged care facilities as there is no alternative housing for them. Summer Housing focuses on increasing the range and scale of diverse and accessible housing options to reduce this number. Cedar Woods is expecting to complete more disability accommodation including nine units for Guardian Living at Williams Landing. 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. e c n e i l i s e R Considering 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.  Transport. Transition to a low-emissions economy does not just look at the performance of buildings. The location of Cedar Woods’ projects are often 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.  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.  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. FY2022 Highlights The year saw a continued focus on Cedar Woods’ delivery of infill housing, in locations connected to high-frequency public transport, including train stations and bus transit. Over 40% of settled housing product was delivered at:  Williams Landing / Town Centre (VIC) – oriented around a transit hub consisting of a freeway overpass, a train station, a bus interchange, and commuter parking  Glenside (SA) – inner city Adelaide, with high-frequency bus transit  Fletcher’s Slip (SA) – adjacent to the train corridor and Glanville station  Jackson Green - Clayton Apartments – just 20km from Melbourne and adjacent to rail. The Company also acquired a new site in Eglington (WA) which will deliver a 1,200 lot masterplanned community, located within 500m of the proposed new Eglington train station. The past 12 months saw the Company continue to invest significantly in the protection, restoration and regeneration of the natural environment. Bushmead (WA), was ‘Highly Commended’ by the Society for Ecological Restoration. The Society is an international non-governmental organisation to advance the science, practice and policy of ecological restoration. Significant restoration work continued at Ellendale (QLD), which features as a case study above. 42  Grace Apartments, Glenside SA 43 Cedar Woods Properties LimitedAnnual Report 2022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 2022. 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) Valerie Anne Davies (Independent Director) Jane Mary Muirsmith (Independent Director) Paul Gilbert Say (Independent Director) 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 45 to 47 of this report. b. Principal activities The principal continuing activities of the consolidated entity over the course of the year ended 30 June 2022 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 2021 of 13.5 cents (2020 – 6.5 cents) per fully paid share, paid on 29 October 2021 (2020 – 30 October 2020) Interim fully franked ordinary dividend for the year ended 30 June 2022 of 13.0 cents (2021 – 13.0 cents) per fully paid share, paid on 29 April 2022 (2021 – 30 April 2021) 2022 $’000 10,756 2021 $’000 5,175 10,676 10,322 21,432 15,497 Since the end of the financial year the directors have recommended the payment of a final fully franked ordinary dividend of 14.5 cents (2021 - 13.5 cents per share) to be paid on 28 October 2022 out of retained profits at 30 June 2022. 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 FY2023 with strong pre-sales, modest debt, substantial funding capacity and a diverse portfolio of well-located developments. 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 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 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 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 2022 that have significantly affected or may significantly affect:  the consolidated entity’s operations in future financial years; or  the results of those operations in future financial years; or  the consolidated entity’s state of affairs in future financial years. h. Likely developments and expected results of operations Beyond the comments at items (d) and (e), further information on likely developments in the operations of the consolidated entity and the expected results of operations have not been included in this report because the directors believe it would be likely to result in unreasonable prejudice to the consolidated entity. Environmental regulation i. To the best of the directors’ knowledge, the group complies with the requirements of environmental legislation in respect of its developments and obtains the planning approvals required prior to clearing or development of land under the laws of the relevant states. There have been no instances of non-compliance during the year and up to the date of this report. j. Information on directors Mr William G Hames, B Arch (Hons) MCU (Harvard) LFRAIA, MPIA, FAPI (Econ)  Chairman of the Board of directors, non-executive director Mr Hames 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  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 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. 44 45 Cedar Woods Properties LimitedAnnual Report 2022Ms Valerie A Davies, FAICD  Non-executive director  Chair of the Remuneration and Nominations Committee  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. Ms Davies has substantial experience serving on risk management and remuneration committees in listed companies. 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 Limited. Mrs Jane M Muirsmith, B Com (Hons), FCA, GAICD  Non-executive director  Chair of the Audit and Risk Management Committee  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, Gold Corporation and Chair of Healthdirect Australia. Mrs Muirsmith has substantial experience serving on risk management committees in the above companies, including as chair of certain committees. 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  Non-executive director  Member of the Audit and Risk Management Committee  Member of the Remuneration and Nominations Committee 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 substantial experience serving on risk management committees in the above companies, including as chair of one committee. 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 has been 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 and Frasers Logistics & Industrial Fund. Mr Nathan J Blackburne, BB (Curtin), AMP (Harvard), GAICD  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. 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-five years in financial management in the property industry, preceded by employment in senior roles with major accountancy firms. k. Shares under option (i) Unissued ordinary shares Unissued ordinary shares of Cedar Woods under option at the date of this report are as follows: Date options granted Number under option Exercise price Expiry date 3 November 2021 32,182 zero 30 June 2024 The options were issued to the Managing Director under the deferred 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. (ii) Shares issued on the exercise of options The following ordinary shares of Cedar Woods were issued to the Managing Director during the year ended 30 June 2022 on the exercise of options granted under the deferred short term incentive plan. No further shares have been issued since that date. No amounts are unpaid on any of the shares. Date options granted Issue Price of Shares Number of shares issued 4 November 2020 $6.68 16,232 46 47 Cedar Woods Properties LimitedAnnual Report 2022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 10,861,980 7,618,633 26,000 21,914 34,832 135,703 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 2022, 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 V A Davies J M Muirsmith P G Say N J Blackburne 12 11 12 12 11 12 12 *Not a member of this committee **Not a member of this committee after 11 August 2021 6 2* 1** 6 6 6 6* 6 4* 2** 6 6 5 5* DIRECTORS’ REPORT: LETTER TO SHAREHOLDERS FROM THE CHAIR OF THE REMUNERATION & NOMINATIONS COMMITTEE (THE COMMITTEE) Dear Shareholders, Remuneration across the company has been carefully considered in the context of being fair, competitive and aligned with the long-term interests of shareholders and the company. A legacy of the Covid 19 pandemic has seen an escalation in the competition for talent and with retention of human capital a major priority, we continue to seek to motivate and retain our people with appropriate reward. In the Financial and Operating Review section we detail how Cedar Woods’ operations have fared in this environment and these influences are reflected in the executive remuneration ‘at-risk’ pay outcomes in section r) of this report. In seeking to align shareholders expectations with regard to incentives, pay and performance we continue to engage with the shareholder community, adopting best practice with all of 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 In FY2022, assisted by external independent consultants, 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. Fixed remuneration For FY2022 the Managing Director’s (MD’s) fixed remuneration was maintained at the same level as the previous year, with moderate increases for the other executives, the Committee taking the view that this was appropriate given the circumstances prevailing under the pandemic. Short-term incentives (“STIs”) Long-term incentives (“LTIs”) The FY2022 STI target for the Managing Director was also maintained at the same level as in the prior year with moderate increases for the other executives. The company had updated and simplified its balanced scorecard of measures for determining the STI awards in FY2020 and the scorecard underwent minimal changes in FY2022. Scorecard sections are 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 three 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 industry 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 FY2022 was $750,000, as approved by shareholders at the FY2014 AGM. Chair and NED fees were maintained at the same level as in FY21. Total NED fees paid for FY2022 were $623,000. It was pleasing to note that shareholders voted in favour of the FY2021 Remuneration Report at the 2021 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 2022 Annual General Meeting on 2 November. Yours faithfully, Valerie A Davies Chair - Remuneration and Nominations Committee 48 49 Cedar Woods Properties LimitedAnnual Report 2022DIRECTORS’ REPORT - REMUNERATION REPORT The directors present Cedar Woods’ FY2022 Remuneration Report which sets out remuneration information for the directors and other key management personnel (“KMP”) for the year ended 30 June 2022. 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 2022. 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 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 Managing Director (“MD”) Chief Operating Officer (“COO”) Chief Financial Officer (“CFO”) Company Secretary Term as KMP Full year Full year Full year Full year Full year Full year Full year Full year Full year Changes since last year There were no changes during the reporting period. 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:  the over-arching executive remuneration framework;  remuneration levels of the MD and other executives;  operation of incentive plans and key performance hurdles for the executive team; and NED fees. 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 2022, the remuneration committee engaged remuneration advisors to provide benchmarking data on executive remuneration and remuneration design. No remuneration recommendations were made. 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 FY2021 Annual General Meeting (“AGM”) At the 2021 AGM, 99.1 per cent of eligible votes cast were in favour of the FY2021 Remuneration Report. 50 51 Cedar Woods Properties LimitedAnnual Report 2022q. Executive remuneration policy and framework (ii) Approach to setting remuneration The information contained within this section outlines the details pertaining to the executive remuneration policy and The company aims to reward executives with a level and mix of remuneration appropriate to their position, framework for FY2022. (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 its approach to executive reward satisfies the following key criteria for good reward governance practices:  Competitiveness and reasonableness  Acceptability to shareholders  Alignment of executive remuneration to company performance  Transparency of the link between performance and reward To attract, motivate and retain high performing individuals:  The remuneration offering rewards capability and experience  Reflects competitive reward for contribution to growth in shareholder wealth The framework is aligned to shareholders’ interests by having:  STIs (cash & deferred) linked to current year performance and subject to clawback  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, net of tax 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). The Committee has adopted a guidance framework for considering exercise of discretion in relation to at-risk remuneration. responsibilities and performance within the company and aligned with market practice. The approach is generally to position total remuneration competitively, between the median and upper quartile of its direct industry peers, both listed and unlisted, and other Australian listed companies of a similar size and complexity. Remuneration levels and structures are reviewed annually through a process that considers market data, insights into remuneration trends, employment market conditions, the performance of the company and the individual, and the broader economic environment. The “at risk” components (STIs and LTIs) 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 FY2023 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. The graphs below illustrate the remuneration mix based on maximum opportunities for FY2022. Managing Director COO CFO Company Secretary 37% 20% 10% 33% 53% 21% 26% 61% 60% 18% 21% 22% 18% 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. 52 Annual Report 2022 53 Cedar Woods Properties Limited (iii) Details of incentive plans Short-term incentives (STI) Key features of the current STI plan are set out below. Managing Director How is the STI delivered? In FY2022 65% (FY21 – 45%) of the STI was deliverable in cash and 35% (FY21 – 55%) of the STI is deferred by way of a grant of zero-price options under the Deferred Short Term Incentive (DSTI) Plan. The Committee sets the proportion of STI deliverable by way of DSTI annually having regard to the equity ownership of the MD, the equity that has previously vested and the equity opportunities under existing DSTI and LTI plans. 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 FY2022 below. Subject to board discretion, in order for any STI to be payable, the following hurdles (triggers) must be achieved:  NPAT trigger: NPAT to equal or exceed 90% of the budget  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. How is performance assessed? What happens in the event of change of control 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. Annually, 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. 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 FY2022 below. In order for any STI to be payable under the company component, the same hurdles (triggers) that apply for the MD (see above) must be achieved. On an annual basis, for senior executives, the Committee will seek recommendations from the MD before making its determination. Performance is assessed against targets set at the start of the financial year. Executives who resign prior to the end of the financial year generally forego their STI entitlement. The Board has discretion in this regard. 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? The Company’s policy is for the MD and other Executives to participate in the LTI. 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? Can a participant deal with or trade their performance rights before vesting? Does the LTI have retesting? Does the Board retain discretion over vesting outcomes? No dividends are paid on unvested LTI awards. No. No. The Board has overarching discretion to ensure vesting outcomes are appropriately aligned to performance. 54 55 Cedar Woods Properties LimitedAnnual Report 2022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. 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 for the FY21 and FY22 plans was 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 hurdle (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:  The earnings and EPS targets contained in the company’s Corporate Plan, particularly with reference to the most recent internal five-year forecasts;  The level of stretch associated with those Corporate Plan targets;  Any earnings guidance that has been provided to the market;  Shareholder and analyst (individual and consensus) expectations.  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 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% The vesting schedule for this component of the LTI in the FY22 Plan was as follows: EPS compound annual growth rate Percentage of EPS-tested rights vesting <10% 10% Between 10% - 15% > = 15% 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 includes 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 modified for the FY22 plan in view of the negative impact of COVID-19 on the result in FY20 and subsequent rebound in FY21, the objective to improve profits moving forward and the challenging 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 FY2022 balanced scorecard objectives and weightings for each component. 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 Earnings Growth Measures of future financial health of the Company Operational Excellence Measures of customer and investor satisfaction and risk management Total Metric Net Profit After Tax (NPAT) Number of settlements Revenue 50% Return on Equity Return on Capital Debt to equity Cost reductions Value of presales 20% New projects acquired Project cost overruns Customer net promoter scores Investor perception 20% ESG Performance (link to sustainability) Compliance with the work, health and safety system High Performance Culture Employee engagement Manage leadership pool and strive for strong staff engagement and team improvements 10% Retention of executives and senior management Gender and diversity The Remuneration and Nominations Committee determines the STI to be paid based on an assessment of the extent to which the key metrics are met, and in arriving at the amount of STI to be paid to each executive, also considers an array of factors including the economic environment, stakeholder experience, quality of the results and how the company has been set up for longer term success. The following table outlines the proportion of maximum STI earned and forfeited by executives in relation to FY2022 and the maximum STI that was available. 56 57 Cedar Woods Properties LimitedAnnual Report 2022Proportion of STI earned and forfeited in FY2022 CFO Company Secretary Total earned $ Total earned of target % Total forfeited of target % Total forfeited of target $ MD 505,560 120% - - COO 145,125 108% - - 95,625 113% - - Target STI opportunity $ 421,300 135,000 85,000 Total earned of maximum % Total forfeited of maximum % Total forfeited of maximum $ Maximum STI opportunity $ 80% 20% 126,390 631,950 86% 14% 23,625 168,750 90% 10% 10,625 106,250 46,250 93% 7% 3,750 50,000 74% 26% 16,250 62,500 For the Managing Director, 65% of the STI earned is payable in cash ($328,614) and 35% of the STI earned ($176,946) was deferred into zero price options under the DSTI plan. For the other executives the STI is payable in cash. Where the Board considered it appropriate to award STIs above 100% in view of personal and corporate performance, it exercised discretion provided for under the STI plan to award STIs above the target for the Managing Director and certain executives, taking into account the broad parameters (factors) noted in the section above and the following:  In FY2022 the Company achieved strong growth in reported NPAT and earnings per share, outperforming the prior year and FY2022 budget.  Exceeded acquisitions targets, setting the business up over the medium to long term.  Strong personal performance of the executives during the year, and in managing and limiting the impact of the pandemic and related supply chain and labour issues on the company.  The strong performance of the company on the majority of metrics under the balanced scorecard.  The company remains in a strong financial position with significant headroom under its finance facilities and significant presales at 30 June 2022 ($500m) compared to the same time last year ($478m).  The need to retain executives in a market and industry (property) where quality talent with sufficient and relevant experience continues to be in short supply.  Comprehensive benchmarking of at-risk pay outcomes at peer companies by an independent consultant. Terms and conditions of the share-based payment arrangements - DSTI 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 FY2022 – Managing Director FY2020 – Managing Director TBA TBA 1/7/21 to 30/6/22 1/7/21 to 30/6/23 31/8/2023 3/11/2021 32,182 1/7/21 to 30/6/22 1/7/21 to 30/6/23 31/8/2023 Balanced scorecard score Balanced scorecard score Value per option at grant date % Vested $TBA N/A $5.69 100 The FY2022 grant of options to the Managing Director under the DSTI is subject to shareholder approval at the 2022 AGM. During the year 16,232 ordinary shares of Cedar Woods Properties Limited were issued to the Managing Director on the exercise of zero price options which were granted under the Deferred STI on 4 November 2020. No further shares have been issued since that date. Performance against LTI objectives The following table shows the maximum LTI opportunities that were granted to KMP during FY2022. Value granted (max LTI opportunity) $ 689,400 212,100 120,000 The LTI awards earned will vest on 31 August 2024 subject to the vesting conditions. LTI awards in FY2022 MD COO CFO Co Sec 50,000 Terms and conditions of the share-based payment arrangements - LTI 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 31/08/2021 $6.08 EPS Growth $5.21 FY2019 - Executives 14/09/2018 FY2019 - MD 13/11/2018 FY2020 - Executives 24/09/2019 FY2020 - MD 6/11/2019 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 FY2021 - Executives 27/08/2020 1/7/20 to 30/6/23 FY2021 - MD 4/11/2020 1/7/20 to 30/6/23 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 FY2022 - Executives 27/08/2021 1/7/21 to 30/6/24 31/08/2024 $6.70 EPS Growth Relative TSR FY2022 - MD 3/11/2021 1/7/21 to 30/6/24 31/08/2024 $6.70 EPS Growth Relative TSR $3.01 $4.62 $2.59 $6.17 $4.45 $6.18 $4.51 $4.59 $2.37 $5.07 $2.92 $5.83 $3.18 $5.20 $2.36 No Partial No Partial No No No No to be determined to be determined to be determined to be determined 31.7% 31.7% Nil Nil n/a n/a n/a n/a The number of share rights granted to key management personnel under the LTI scheme during FY2022 is shown in the table below. The number of rights granted has been determined by dividing the FY2022 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 FY2022 ($6.70). 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. 58 59 Cedar Woods Properties LimitedAnnual Report 2022Reconciliation of LTI share rights held by KMP The following table shows how many share rights were granted, vested and forfeited during the year for KMP. Performance of shareholder return metrics In FY2022, the company delivered a profit of $37.4 million, an increase of 14 per cent over the prior year. Name & grant dates Balance at start of year Number Granted during year Number Vested Number Vested % Forfeited Number Forfeited % Max. value yet to vest * Balance at end of year (unvested) Number 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 Executive director N J Blackburne 3 Nov 2021** - 102,895 4 Nov 2020** 6 Nov 2019** 13 Nov 2018** Senior executives 127,666 120,735 46,875 - - - - - - - - - - - - - - 102,895 $121,416 127,666 $510,026 120,735 $272,257 EPS growth Share price growth Dividend growth (declared dividend) Dividend growth (paid dividend) CWP TSR (change in share price and dividends) - 14,845 31.7 32,030 68.3 - - S&P Small Industrials Index (XSIAI) TSR 12.2 (45.2) 3.8 35.9 (42.4) (24.0) (9.2) (13.5) (4.4) (9.7) (9.5) (2.2) (4.5) (6.7) (1.7) (1.4) (1.9) 3.3 P Archer 27 Aug 2021 27 Aug 2020 24 Sep 2019 14 Sep 2018 L M Hanrahan 27 Aug 2021 27 Aug 2020 24 Sep 2019 14 Sep 2018 P S Freedman 27 Aug 2021 - 31,656 39,277 37,145 17,270 - - - - 17,910 22,222 21,015 8,224 - - - - 7,462 27 Aug 2020 7,407 - - - - - - - - - - - - - 31,656 $50,333 39,277 $136,684 37,145 $82,648 5,469 31.7 11,801 68.3 - - - - - - - - - - - - - - 17,910 $28,477 22,222 $77,333 21,015 $46,758 2,604 31.7 5,620 68.3 - - - - - - - - - - 7,462 $11,865 7,407 $25,776 * The LTI awards granted in FY2022 vest on 31 August 2024 subject to the vesting conditions. The maximum value of the deferred shares yet to vest has been determined based on the grant date fair value of the rights, adjusted to the anticipated vesting outcomes. ** Approval for the issue of share rights to NJ Blackburne was obtained from shareholders under Australian Securities Exchange Listing Rule 10.14. The total shareholder return in FY2022 was -42.4 per cent which underperformed the S&P Small Industrials Index total return of -24.0 per cent over the same period. The returns over 3 and 5 years also underperformed the S&P Small Industrials Index and, to a lesser extent, the majority of listed peers in the property sector. While the Company’s profits and dividends have been increasing since FY2020, recent negative sentiment towards the property sector and the company’s exit from the S&P ASX 300 index in 2022 weighed on the share price. The company’s share price is subject to market factors that are beyond the company’s control. The measures of the company’s financial performance over the last five years as required by the Corporations Act 2001 are shown in the table below. However, these are not necessarily consistent with the measures used in determining the variable amounts of remuneration awarded to KMP, the basis for which is outlined above. As a consequence, there may not always be a direct correlation between the statutory key performance measures and the variable remuneration awarded. Profit for the year ($’000) Basic earnings per share (cents) Dividends per share (cents) Increase (decrease) in share price (%) 2022 37,388 45.7 27.5 (45.2) 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 Executive remuneration for the years ended 30 June 2022 and 30 June 2021 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 58 and 59, 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. 60 61 Cedar Woods Properties LimitedAnnual Report 2022% $ l a t o T $ e v a e L e c i v r e S g n o L $ # t n e m y a p d e s a b e r a h S $ n o i t a u n n a $ s t fi e n e b $ s u n o b h s a C $ s e e f - r e p u S y r a t e n o m - n o N d n a y r a l a s h s a C d e t a l e r e c n a m r o f r e P s t fi e n e b m r e t g n o L t s o P t n e m y o p m e l m r e t - t r o h S s t fi e n e b l a i c n a n i F r a e y e m a N % 8 4 % 3 4 % 5 3 % 0 3 % 8 2 % 3 2 % 3 2 % 9 1 2 8 5 , 8 1 5 , 1 9 1 8 , 1 6 3 , 1 0 9 7 , 9 2 8 6 , 2 1 4 0 1 , 5 0 4 8 0 9 , 6 3 4 6 8 3 , 7 2 8 9 6 , 3 2 6 1 5 , 1 1 1 6 9 , 2 1 4 1 6 , 8 2 3 9 8 1 , 2 4 1 0 8 2 , 3 3 7 3 7 2 , 6 3 7 5 8 9 , 9 7 6 7 2 0 , 4 2 6 7 1 5 , 7 1 5 6 6 4 , 0 2 4 7 3 3 , 0 5 2 7 8 1 , 3 2 2 1 2 4 , 6 6 9 , 2 9 9 4 , 9 2 6 , 2 9 8 2 , 8 7 6 0 , 7 4 5 1 , 5 3 3 4 , 3 1 8 5 6 , 4 3 9 7 , 2 2 6 0 , 9 3 4 0 8 , 4 2 0 9 1 , 1 9 1 6 8 , 2 8 9 5 4 , 1 5 6 5 6 , 5 4 2 5 1 , 9 3 3 5 , 2 1 8 6 5 , 3 2 4 9 6 , 1 2 0 0 5 , 7 2 0 0 0 , 5 2 2 9 8 , 5 2 1 1 6 , 3 2 6 8 2 , 0 6 5 7 7 5 , 4 7 5 3 0 0 , 4 9 6 4 3 , 4 0 1 1 8 3 , 5 9 9 0 , 5 0 0 0 , 7 6 0 4 , 7 0 5 5 0 5 5 7 4 4 , 4 2 6 1 0 , 6 2 5 2 1 , 5 4 1 0 0 0 , 4 0 1 5 2 6 , 5 9 0 5 2 , 2 5 0 5 2 , 6 4 0 0 0 , 3 3 4 1 6 , 5 1 6 9 3 4 , 1 3 3 2 3 4 , 6 0 4 6 0 3 , 3 0 4 0 0 5 , 2 2 3 0 0 0 , 5 8 2 4 5 4 , 0 6 1 1 8 0 , 4 5 1 6 6 6 , 2 2 6 , 1 0 6 6 , 8 7 5 1 , 2 2 0 2 1 2 0 2 2 2 0 2 1 2 0 2 2 2 0 2 1 2 0 2 2 2 0 2 1 2 0 2 2 2 0 2 1 2 0 2 e n r u b k c a B J N l r o t c e r i D e v i t u c e x E r e h c r A P P M K r e h t O l a t o T n a h a r n a H M L n a m d e e r F S P r a e y e h t o t l e b a t u b i r t t a s n a p l I T S D 2 2 0 2 d n a 1 2 0 2 d n a s n a p l I T L 2 2 0 2 d n a 1 2 0 2 , 0 2 0 2 , 9 1 0 2 e h t m o r f s d r a w a f o e u a v l r i a f e h t f o t n e n o p m o c e h t o t e t a e r l s t n e m y a p d e s a b - e r a h s d e l t t e s - y t i u q E # . l w o e b t u o t e s s i , s d r a d n a t s g n i t n u o c c a h t i w e c n a d r o c c a n i , s d o o W r a d e C f o P M K e v i t u c e x e h c a e r o f i d e s n g o c e r e s n e p x e n o i t a r e n u m e r e h t f o s l i a t e D i P M K e v t u c e x e r o f s e s n e p x e n o t a r e n u m e R i . 2 B S A A f o s t n e m e r i u q e r l e r u s o c s d e h t i h t i w y c n e t s s n o c i e r u s n e o t d e t a t s e r n e e b e v a h s e v i t a r a p m o C . s t n e m y a P d e s a B e r a h S 2 B S A A h t i w e c n a d r o c c a n i d e r u s a e m . l a u r c c a e v a e l l a u n n a e d u c n l i s e e f d n a y r a a s l h s a C i P M K e v t u c e x e y b d e v e c e r n o t a r e n u m e R i i e h t n i l i e r u s o c s d y r o t u t a t s e h t o t y a w t n e r e f f i d a n i l d e t a u c a c l s i n o i t c e s i s h t n i y t i u q e f o e u a v l e h T . s r a e y l i a c n a n fi r o i r p d n a t n e r r u c e h t n i P M K e v i t u c e x e y b d e v e c e r i ) n o i t a r e n u m e r % $ l a t o T $ e v a e L e c i v r e S g n o L t n e m y a p $ # d e t s e v d e s a b e r a h S $ n o i t a u n n a $ s t fi e n e b $ s u n o b h s a C $ s e e f d n a - r e p u S y r a t e n o m - n o N y r a l a s h s a C d e t a l e r e c n a m r o f r e P m r e t g n o L s t fi e n e b t s o P t n e m y o p m e l m r e t - t r o h S s t fi e n e b l a i c n a n i F r a e y l . e b a t i s u o v e r p e m a N % 1 4 % 0 2 % 9 2 % 3 2 % 3 2 % 5 1 % 9 1 % 0 2 3 1 8 , 2 8 9 2 7 0 , 1 2 3 , 1 0 9 7 , 9 2 8 6 , 2 1 2 0 9 , 7 5 4 9 5 , 7 0 2 6 8 3 , 7 2 8 9 6 , 3 2 6 1 5 , 1 1 1 6 9 , 2 1 4 1 6 , 8 2 3 9 8 1 , 2 4 1 0 8 2 , 3 3 7 3 7 2 , 6 3 7 8 2 3 , 5 2 6 5 4 3 , 7 6 5 3 5 4 , 3 8 4 9 4 3 , 0 8 3 4 0 8 , 7 3 2 4 5 3 , 6 2 2 7 5 6 , 7 6 6 , 2 1 6 8 , 6 5 1 , 2 9 8 2 , 8 7 6 0 , 7 4 5 1 , 5 3 3 4 , 3 1 8 5 6 , 4 3 9 7 , 2 2 6 0 , 9 3 4 0 8 , 4 2 3 3 5 , 6 3 9 7 1 , 6 2 9 3 5 , 5 5 9 3 , 7 1 - 9 1 3 , 2 1 2 2 5 , 1 6 2 9 3 9 , 1 0 1 8 6 5 , 3 2 4 9 6 , 1 2 0 0 5 , 7 2 0 0 0 , 5 2 2 9 8 , 5 2 8 1 2 , 5 2 0 1 6 , 5 9 6 4 3 , 4 0 1 1 8 3 , 5 9 9 0 , 5 0 0 0 , 7 6 0 4 , 7 0 5 5 0 5 5 7 4 4 , 4 2 6 1 0 , 6 2 5 2 1 , 5 4 1 0 0 0 , 4 0 1 5 2 6 , 5 9 0 5 2 , 2 5 0 5 2 , 6 4 3 9 3 , 1 3 4 1 6 , 5 1 6 2 3 8 , 9 2 3 2 3 4 , 6 0 4 6 0 3 , 3 0 4 0 0 5 , 2 2 3 0 0 0 , 5 8 2 4 5 4 , 0 6 1 1 8 0 , 4 5 1 6 6 6 , 2 2 6 1 , 0 6 6 , 8 7 5 , 1 2 2 0 2 1 2 0 2 2 2 0 2 1 2 0 2 2 2 0 2 1 2 0 2 2 2 0 2 1 2 0 2 2 2 0 2 1 2 0 2 e n r u b k c a B J N l r o t c e r i D e v i t u c e x E P M K r e h t O r e h c r A P n a h a r n a H M L n a m d e e r F S P l a t o T . n a p l I T S D 1 2 0 2 Y F - 0 2 0 2 Y F d n a n a p l I T L 1 2 0 2 Y F - 9 1 0 2 Y F e h t r e d n u d e t s e v s e r a h s , 2 2 0 2 Y F n I . g n i t s e v f o e t a d e h t t a s e i t i r u c e s f o e u a v l t e k r a m e h t n o d e s a b s i d e t s e v I T L # . r a e y l i a c n a n fi i g n w o l l o f e h t n i i d a p e r a i h c h w d n a 2 2 0 2 Y F o t n o i t a e r l n i P M K h c a e o t d e d r a w a e r a t a h t s e s u n o b h s a c e h t t n e s e r p e r s t fi e n e b m r e t - t r o h s e h T * e m o h e k a t ( n o i t a r e n u m e r f o e u a v l l a t o t i e h t g n d n a t s r e d n u n i i t s s s a o t n o i t a m r o n f i y r o t u t a t s - n o n l a n o i t i d d a i s a d e d v o r p n e e b s a h w o e b e b a t l l e h t n i d e t a r t s u l l i n o i t a r e n u m e r e h T 62 63 Cedar Woods Properties LimitedAnnual Report 2022 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 FY2022 was as follows:  Fixed remuneration of $766,000 per annum  Target STI opportunity of $421,300, Maximum STI opportunity of $631,950 (65% in cash, 35% in DSTI)  Target & Maximum LTI opportunity $689,400. 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 FY2022 was $623,000. Fee policy NEDs’ annual fees were last reviewed from FY2020 (effective date: 1 July 2019). The annual fees (inclusive of superannuation) for FY2022 and FY2021 are set out in the table below: Chair Deputy Chair Other NEDs Committee Chair Committee member 64 2022 $ 174,000 137,000 94,000 15,000 Nil 2021 $ 174,000 137,000 94,000 15,000 Nil NED remuneration for the years ended 30 June 2022 and 30 June 2021 The table below outlines fees paid to NEDs for FY2022 and FY2021 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 $ 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 158,182 158,904 124,545 113,699 - 29,605 99,091 99,543 99,091 99,543 85,455 14,308 566,364 515,602 15,818 15,096 12,455 10,801 - 2,813 9,909 9,457 9,909 9,457 8,545 1,359 56,636 48,983 174,000 174,000 137,000 124,500 - 32,418 109,000 109,000 109,000 109,000 94,000 15,667 623,000 564,585 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. 2022 NEDs W G Hames * R S Brown V A Davies J M Muirsmith P G Say 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 10,595,860 7,821,633 16,278 18,001 14,500 - - - - - 413,652 (200,000) 9,722 3,913 20,332 11,009,512 7,621,633 26,000 21,914 34,832 83,951 31,077 20,675 135,703 36,180 13,834 76,256 5,469 2,604 - 5,091 2,000 4,255 46,740 18,438 80,511 * *Includes 2,014,439 (2021 – 2,014,439) shares over which W G Hames has voting rights and a first right of refusal to purchase. 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. 65 Cedar Woods Properties LimitedAnnual Report 2022v. Independent audit of remuneration report The remuneration report has been audited by PricewaterhouseCoopers (PwC). See page 121 of this annual financial report for PwC’s report on the remuneration report. w. Retirement, election and continuation in office of directors WG Hames and RS Brown retire at the forthcoming Annual General Meeting, and being eligible, offer themselves for re-election. 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 Settlement fees Amounts recognised as inventory/ investment property Architectural fees 2022 $ 2021 $ 305,176 305,176 788,690 788,690 364,085 364,085 289,651 289,651 Total amounts recognised in year 1,093,866 653,736 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 788,690 788,690 289,651 289,651 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 (Westland), 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 was engaged, the number of lots that settled in FY2022 was lower than that of the previous year and as a result the value of transactions with Westland decreased. Settlement fees include out of pocket expenses incurred by Westland that are paid to Landgate and PEXA. There are no aggregate amounts payable to directors of Cedar Woods at balance date. Amounts of $16,500 and $1,575 were payable to related entities (Hames Sharley (SA) Pty Ltd and Westland Settlement Services Pty Ltd respectively) at balance date. There are no other amounts payable to related entities at balance date relating to the above types of other transactions. 66 67 Cedar Woods Properties LimitedAnnual Report 2022x. Insurance of officers AUDITOR’S INDEPENDENCE DECLARATION 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 32 in the other information section of this report. Auditor’s Independence Declaration As lead auditor for the audit of Cedar Woods Properties Limited for the year ended 30 June 2022, I declare that to the best of my knowledge and belief, there have been: The Board of directors has considered the position and, in accordance with the advice received from the Audit and (a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in 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 69. 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. 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 24 August 2022 N J Blackburne Managing Director 24 August 2022 68 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. 69 Cedar Woods Properties LimitedAnnual Report 2022 FINANCIAL STATEMENTS Consolidated Statement of Profit or Loss and Other Comprehensive Income For the Year Ended 30 June 2022 Consolidated Balance Sheet As at 30 June 2022 71 72 Consolidated Statement of Changes in Equity For the Year Ended 30 June 2022 74 Consolidated Cash Flow Statement For the Year Ended 30 June 2022 75 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 24. The financial statements are presented in the Australian currency. Cedar Woods Properties Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is: Ground Floor, 50 Colin Street WEST PERTH WA 6005. The financial statements were authorised for issue by the directors on 24 August 2022. The directors have the power to amend and reissue the financial statements. CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the Year Ended 30 June 2022 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 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 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 Note 2022 $’000 2021 $’000 1(i) 333,036 299,751 (230,319) (196,887) (6,317) 96,400 (19,564) (24,257) - 1,481 (10,786) 92,078 (22,358) (21,491) (504) 2,851 54,060 50,576 (444) - (3,049) (24) 53,616 47,503 (16,228) (14,669) 37,388 37,388 32,834 32,834 37,388 32,834 45.7 cents 40.7 cents 45.2 cents 40.3 cents 2 3 17 4 4 The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes. 70 71 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportCONSOLIDATED BALANCE SHEET As at 30 June 2022 CONSOLIDATED BALANCE SHEET (CONTINUED) As at 30 June 2022 EQUITY Contributed equity Reserves Retained profits Total equity Note 15 16 17 2022 $’000 137,333 1,815 282,075 421,223 2021 $’000 133,119 1,305 265,937 400,361 The above consolidated balance sheet should be read in conjunction with the accompanying notes. ASSETS Current assets Cash and cash equivalents Trade and other receivables Contract assets Inventories Deferred development costs Other financial assets Total current assets Non-current assets Receivables Inventories Contract assets Other financial assets Property, plant and equipment Right-of-use assets Investment properties Lease incentives Total non-current assets Total assets LIABILITIES Current liabilities Trade and other payables Borrowings 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 2022 $’000 2021 $’000 5 6 1(ii) 7 8 9 6 7 1(ii) 9 10 11 12 13 9 1(ii) 13 9 14 2,957 9,310 3,755 211,909 3,972 741 232,644 7,800 489,600 347 1,718 7,492 998 38,591 643 547,189 779,833 26,898 29,159 87,886 5,321 7,436 619 1,346 158,665 172,486 24,424 549 228 2,258 199,945 358,610 421,223 5,386 6,355 4,801 194,083 5,460 - 216,085 7,046 378,821 - 10 8,048 1,290 39,635 865 435,715 651,800 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 72 73 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportCONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the Year Ended 30 June 2022 CONSOLIDATED CASH FLOW STATEMENT For the Year Ended 30 June 2022 Balance at 1 July 2020 Profit for the year Total comprehensive income for the year Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs and tax Transfers from reserves to retained profits Dividends provided for or paid Employee share scheme Balance at 30 June 2021 Balance at 1 July 2021 Profit for the year Total comprehensive income for the year Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs and tax Transfers from reserves to retained profits Dividends provided for or paid Employee share scheme Contributed equity $’000 Reserves $’000 Note Retained profits * Restated $’000 Total $’000 127,781 568 248,452 376,801 - - 5,247 - - 91 5,338 133,119 133,119 - - 3,984 - - 230 4,214 - - - (148) - 885 737 1,305 1,305 - - - (182) - 692 510 32,834 32,834 32,834 32,834 - 148 5,247 - (15,497) (15,497) - 976 (15,349) (9,274) 265,937 400,361 265,937 400,361 37,388 37,388 37,388 37,388 - 182 3,984 - (21,432) (21,432) - 922 (21,250) (16,526) 15 16 23 15, 16 15 16 23 15, 16 Balance at 30 June 2022 137,333 1,815 282,075 421,223 The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes. Note 2022 $’000 2021 $’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 356,321 63 (69,416) (329,296) 177 (6,309) (17,376) Net cash inflows (outflows) from operating activities 19(i) (65,836) 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 23 Net cash (outflows) inflows from financing activities Net (decrease) increase 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 13 521 (245) (992) (703) 82,442 (896) (17,436) 64,110 (2,429) 5,386 2,957 330,618 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 The above consolidated cash flow statement should be read in conjunction with the accompanying notes. 74 75 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial 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 24. 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. 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. Profit or Loss Information 1. Revenue 2. Expense items 3. Income tax 4. Earnings per share Balance Sheet Information 5. Cash and cash equivalents 6. Trade and other receivables 7. Inventories 8. Deferred development costs 9. Other Financial Assets and Other Financial Liabilities 10. Property, plant and equipment 11. Investment properties 12. Trade and other payables 13. Borrowings 14. Deferred tax 15. Equity 16. Reserves 17. Retained profits 18. Categories of financial assets and financial liabilities Cash Flow information 19. Cash Flow Information 78 78 79 80 80 81 81 81 82 82 83 84 84 85 85 87 89 90 90 91 92 92 76 77 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial 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 Contract assets Commissions relating to property sales Development services fees Total contract assets 2022 $’000 2021 $’000 318,695 8,323 280,577 13,554 6,018 5,620 2022 $’000 3,041 1,061 4,102 2021 $’000 4,801 - 4,801 Costs to fulfil a contract that were included in the contract asset balance at the beginning of the period Commissions relating to property sales 3,376 657 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 Other Total contract liabilities Revenue recognised that was included in the contract liability balance at the beginning of the period 2022 $’000 7,348 88 7,436 2021 $’000 5,396 - 5,396 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 2022 $’000 2021 $’000 6,813 39 3,049 (2,536) (6,921) 444 4,476 68 2,770 (68) (4,197) 3,049 (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 2.42% (2021 – 1.55%) per annum. Where qualifying assets are financed by specific facilities, the applicable borrowing costs of those facilities are capitalised. Note 2021 $’000 2021 $’000 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 6 10 11 (ii) (ii) (ii) 262 (87) 14,472 1,309 1,220 976 868 14 9 - 98 174 13,691 1,143 1,106 980 848 33 - 524 Customer rebates 2,272 3,184 (ii) Lease costs included in profit before income tax (iii) Transaction price allocated to remaining performance obligations The transaction price allocated to partially unsatisfied performance obligations at 30 June 2022 is set out below: Within one year More than one year Total 78 2022 $’000 361,068 188,337 549,405 2021 $’000 341,539 145,322 486,861 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. 79 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial 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 14 14 2022 $’000 15,786 442 16,228 (620) 1,062 442 (ii) Numerical reconciliation of income tax expense to prima facie tax payable Profit before income tax 2022 $’000 53,616 2021 $’000 19,230 (4,561) 14,669 (805) (3,756) (4,561) 2021 $’000 47,503 Tax at the Australian tax rate of 30% (2021 – 30%) 16,085 14,251 Tax effect of amounts which are not deductible (taxable) in calculating taxable income: - Subsidiary company loss - Interest revenue - Employee share scheme - Share of net loss of joint venture - Other income - Permanent differences arising from capital gains - Sundry items - - 277 - (157) - 23 143 11 5 293 7 (22) 113 11 418 Income tax expense 16,228 14,669 4. Earnings per share Basic earnings per share (cents) Diluted earnings per share (cents) 2022 45.7 45.2 2021 40.7 40.3 Net profit attributable to the ordinary owners of the company ($’000) 37,388 32,834 BALANCE SHEET INFORMATION 5. Cash and cash equivalents Cash at bank and in hand 2022 $’000 2,957 2,957 2021 $’000 5,386 5,386 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 1.0% (2021 - 0 to 0.4%) per annum depending on the balances. The Group’s exposure to interest rate risk is discussed in note 21 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) (i) Credit risk Notes (ii) (i), (ii) (ii) (ii) (iii) 33 2022 $’000 6,785 (236) 1,151 1,610 9,310 - 7,798 2 7,800 2021 $’000 4,692 (323) 721 1,265 6,355 1,632 5,411 3 7,046 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 34(h). Weighted average number of ordinary shares used as the denominator in the calculation of earnings per share 81,881,597 80,753,378 (iii) Other non-current receivables Weighted average number of ordinary shares used as the denominator in the calculation of diluted earnings per share 82,663,261 81,457,949 The calculation of diluted earnings per share includes performance rights that may vest under the company’s LTI Other non-current receivables comprise refundable deposits paid on conditional contracts. and DSTI plans. 80 81 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial 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) 2022 $’000 2021 $’000 211,909 194,083 489,600 378,821 701,509 572,904 2022 $’000 2021 $’000 64,363 37,624 - 13 147,546 156,446 211,909 194,083 * The 1992 valuations were independent valuations which were based on current market values at that time. Non-Current Property held for resale - at cost - capitalised development costs - at net realisable value 2022 $’000 2021 $’000 389,578 280,172 94,680 5,342 93,378 5,271 489,600 378,821 9. Other financial assets and other financial liabilities Other financial assets Current Interest rate hedge contracts Non-current Interest rate hedge contracts Notes 2022 $’000 2021 $’000 (i) (i) 741 741 1,718 1,718 - - 10 10 Derivatives are only used for economic hedging purposes and not as speculative investments. The group’s accounting policy for its cash flow hedges is set out in note 34(t). They are presented as current assets or liabilities to the extent they are expected to be settled within 12 months after the end of the reporting period. Other financial liabilities Current Due to vendors of properties under contracts of sale Interest rate hedge contracts Non-current Due to vendors of properties under contract of sale Other payables Interest rate hedge contracts Notes 2022 $’000 2021 $’000 (i) (i) 87,886 42,853 - 74 87,886 42,927 24,375 50,901 49 - 5 13 24,424 50,919 (i) Current and non-current assets pledged as security Refer to note 13 for information on current assets pledged as security by the parent entity or its controlled entities. (i) Instruments used by the group (ii) Accounting for inventory Refer to note 34(i) for the recognition and classification of inventory. 8. Deferred development costs Current Deferred development costs 2022 $’000 2021 $’000 3,972 3,972 5,460 5,460 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. 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 2022 to 30 June 2025. The group uses a combination of caps and collars to hedge interest rates. The caps effectively cap interest rates applicable to bank bills issued with duration of 3 months (BBSY Bid) at certain levels between 1.00% - 3.00% (2021 – 1.00% to 1.50%). 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% (2021 – 1.50% and apply a floor to interest rates of 0.87%). Interest rate hedge contracts currently in place cover approximately 52% (2021 – 46%) 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. 82 83 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report10. Property, plant and equipment (iii) Leasing arrangements 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 2022 $’000 2021 $’000 12,864 11,491 1,152 (599) 1,602 (229) 13,417 12,864 4,816 1,220 (111) 5.925 7,492 3,791 (81) 1,106 4,816 8,048 (i) Non-current assets pledged as security Refer to note 13 for information on non-current assets pledged as security by the parent entity or its controlled entities. 11. 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: Completed investment property Closing balance at the end of the year 39,635 40,701 128 (976) (196) 118 (980) (204) 38,591 39,635 (i),(ii),(iii),(iv) 38,591 38,591 39,635 39,635 (i) Amounts recognised in profit or loss for investment properties Rental income 2022 $’000 5,734 2021 $’000 5,224 Direct operating expenses from property that generated rental income (3,326) (3,667) (ii) Fair value of investment property The fair value of the Williams Landing Shopping Centre which makes up completed investment property at 30 June 2022 is $83.3m, based on an internal management valuation (2021 – external valuation of $83.6m). The investment property includes land surrounding the shopping centre for future development which is on the same 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 2022 $’000 4,336 17,768 20,035 42,139 2021 $’000 4,499 17,999 17,097 39,595 (iv) Non-current assets pledged as security Refer to note 13 for information on non-current assets pledged as security by the parent entity or its controlled entities. 12. Trade and other payables Trade payables Accruals Other payables 2022 $’000 2,692 2021 $’000 7,372 23,919 13,984 287 277 26,898 21,633 13. Borrowings Current Bank loan – secured (Williams Landing Shopping Centre facility) Facility fees capitalised (amortised over the period of facility) Amortisation of facility fees 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 2022 $’000 2021 $’000 29,193 (92) 58 29,159 172,800 - (361) 47 - - - - 90,000 29,193 (1,024) 545 172,486 118,714 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. Note 2022 $’000 2021 $’000 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. title, contributing $20.0m (2021: $20.6m) to the valuation. The management valuation applies a market capitalisation Bank loans totalling $172,800,000 provided by three major banks (2021 - $90,000,000) are secured by first registered rate to the net rent for the shopping centre to determine fair value. 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. 84 85 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportThe Williams Landing Shopping Centre facility is secured by a first registered mortgage over the Williams Landing Shopping Centre (excluding land for future development) disclosed in investment properties at note 11. (ii) Financing arrangements The group had access to the following lines of credit at balance date: 14. Deferred tax (i) Assets The balance comprises temporary differences attributable to: Notes 2022 $’000 2021 $’000 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 2022 $’000 2021 $’000 300,000 205,000 (212,173) (110,997) 87,827 94,003 30,000 30,000 (29,193) (29,193) 807 807 330,000 235,000 (241,366) (140,190) 88,634 94,810 The consolidated entity has total corporate finance facilities of $300,000,000 (2021 - $205,000,000), provided by three major banks. The consolidated entity extended its corporate facility in December 2021 following its annual review. The facility tenure remains comprised of three and five year debt as follows:  $240,000,000 (approximately 80%) of the facility expiring January 2025; and  $60,000,000 (approximately 20%) of the facility expiring January 2027. 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 2022 was an average rate of 2.42% (2021 – 1.55%) per annum. The corporate facilities include bank guarantee facilities of $60,000,000 Inventory Capital losses Provision for customer rebates Property, plant and equipment Provision for employee benefits Other Total deferred tax assets Set-off of deferred tax assets pursuant to set-off provisions Net deferred tax assets Deferred tax assets at the start of the year Increase in deferred tax assets credited (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 Movements Inventory $’000 Provision for customer rebates $’000 Capital Losses $’000 Property, plant & equipment $’000 Provision for employee benefits $’000 (2021 - $40,000,000) subject to similar terms and conditions, which were drawn to a total amount of $39,373,000 at At 1 July 2020 2,196 1,168 1,858 808 682 30 June 2022 (2021 - $20,997,000). The consolidated entity has a facility of $30,000,000 (2021 - $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. The facility extends to 30 June 2023. The interest on the Williams Landing Shopping Centre loan facility is variable and at 30 June 2022 was an average rate of 2.85% (2021 – 1.96%) per annum. Details of the group’s exposure to risk arising from current and non-current borrowings are set out in note 21. Financial risk management. (Charged) credited - to profit or loss - directly to equity 586 - 451 - At 30 June 2021 2,782 1,619 (Charged) credited - to profit or loss - directly to equity 353 - 586 - (113) - 1,745 - - At 30 June 2022 3,135 2,205 1,745 (213) - 595 (251) - 344 142 - 824 38 - 862 3,135 1,745 2,205 344 862 202 8,493 (8,493) - 7,868 620 5 8,493 5,365 3,128 8,493 Other $’000 344 (48) 7 303 (106) 5 202 2,782 1,745 1,619 595 824 303 7,868 (7,868) - 7,056 805 7 7,868 4,881 2,987 7,868 Total $’000 7,056 805 7 7,868 620 5 8,493 86 87 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportDeferred tax liabilities at the start of the year 9,689 13,445 Shares issued under employee share scheme: (ii) Liabilities 15. Equity The balance comprises temporary differences attributable to: Notes 2022 $’000 2021 $’000 Inventory Deferred development costs Property, plant and equipment Contract assets Derivative financial instruments Other Total deferred tax liabilities Set off of deferred tax assets pursuant to set-off provisions Net deferred tax liabilities 6,073 1,192 621 977 738 1,150 10,751 (8,493) 1,821 5,768 1,638 251 1,242 - 790 9,689 (7,868) 1,821 Increase (decrease) in deferred tax liabilities debited (credited) to income tax expense 3 Deferred tax liabilities at the end of the year Deferred tax liabilities expected to be settled within 12 months Deferred tax liabilities expected to be settled after more than 12 months 1,062 10,751 5,428 5,323 10,751 (3,756) 9,689 5,498 4,191 9,689 Movements Inventory $’000 Deferred development costs $’000 Property plant & equipment $’000 Contract Assets $’000 Derivative Financial Instruments $’000 At 1 July 2020 7,622 3,923 - 999 Charged (credited) - to profit or loss At 30 June 2021 Charged (credited) (1,854) 5,768 - to profit or loss 305 At 30 June 2022 6,073 (2,285) 1,638 (446) 1,192 251 251 370 621 243 1,242 (265) 977 Other $’000 Total $’000 901 13,445 (111) 790 (3,756) 9,689 - - - 738 738 360 1,062 1,150 10,751 Movement in ordinary share capital Start of the year 81,344,846 80,447,826 133,119 127,781 2022 Shares 2021 Shares 2022 $’000 2021 $’000 Shares issued pursuant to the dividend reinvestment plan: Ordinary shares issued on 27 October 2021 at $5.89 678,422 - 3,996 Ordinary shares issued on 30 April 2021 at $6.69 Ordinary shares issued on 30 October 2020 at $5.61 Shares issued pursuant to the bonus share plan: - - 575,465 252,065 Ordinary shares issued on 29 October 2021 39,857 Ordinary shares issued on 30 April 2021 Ordinary shares issued on 30 October 2020 - - Ordinary shares issued on 27 August 2021 64,727 Ordinary shares issued on 27 August 2020 Transaction costs arising on share issues - - - - - - 230 - (12) 4,214 - 3,850 1,414 - - - 91 (17) 5,338 26,087 10,027 - 33,376 - 783,006 897,020 End of the year 82,127,852 81,344,846 137,333 133,119 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. For the 2022 financial year, the dividend reinvestment plan and bonus share plan were in operation for the 2021 final dividend and not in operation for the 2022 interim dividend. (iii) Employee share scheme Details of the company’s employee share scheme can be found in note 33 and in the remuneration report on pages 55-57 and 59 of this financial report. 88 89 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report16. Reserves 18. Categories of financial assets and financial liabilities The following table shows the composition and movement in reserves during the year. A description of the nature Notes 5, 6, 9, 12 and 13 provide information about the group’s financial instruments, including: and purpose of reserves is provided below the table. Notes 2022 $’000 2021 $’000 (ii) Accounting policies (i) Specific information about each type of financial instrument Composition Asset revaluation reserve (pre-1992) Employee share plan reserve Balance at the end of the year Movements (i) Asset revaluation reserve Balance at the beginning of the year Transfer to retained profits Balance at the end of the year (ii) 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 (i) (ii) 17 15 17 - 1,815 1,815 3 (3) - 1,302 922 (230) (179) 1,815 3 1,302 1,305 38 (35) 3 530 976 (91) (113) 1,302 The asset revaluation reserve was used until 1992 to record increments and decrements on the revaluation of non- current assets. Refer to note 34(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 33. 17. 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 2022 $’000 2021 $’000 16 23 265,937 248,452 37,388 32,834 182 148 (21,432) (15,497) 282,075 265,937 (iii) Information about determining the fair value of the instruments, including judgements and estimation uncertainty involved. The group holds the following financial instruments: Financial Assets 2022 Cash and cash equivalents Trade and other receivables* Derivative financial instruments Total 2021 Cash and cash equivalents Trade and other receivables* Derivative financial instruments Total Derivatives used for hedging $’000 Financial assets at amortised cost $’000 Notes 5 6 9 5 6 9 - - 2,459 2,459 - - 10 10 2,957 15,500 - 18,457 5,386 12,136 - 17,522 * Excluding prepayments and contract assets. Financial Liabilities Notes Derivatives used for hedging $’000 Financial liabilities at amortised cost $’000 2022 Trade and other payables Borrowings Other financial liabilities Lease liabilities Total 2021 Trade and other payables Borrowings Other financial liabilities Lease liabilities Total 12 13 9 12 13 9 - - - - - - - 87 - 87 26,898 201,645 112,310 1,168 342,021 342,021 21,633 118,714 93,759 1,548 21,633 118,714 93,846 1,548 235,654 235,741 Total $’000 2,957 15,500 2,459 20,916 5,386 12,136 10 17,532 Total $’000 26,898 201,645 112,310 1,168 90 91 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportCASH FLOW INFORMATION 19. Cash Flow information (i) 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) on financial assets and liabilities Non-cash share-based payments expense Share of loss in equity accounted investment Other income Changes in operating assets and liabilities (Decrease) increase in provisions for employee benefits Increase in contract liabilities (Increase) in inventories Decrease in other deferred development costs (Increase) in deferred tax assets (Decrease) increase in current income tax payable Increase (decrease) in deferred tax liability Decrease in capitalised borrowing costs (Increase) in trade receivables Decrease (increase) in contract assets Increase (decrease) in trade creditors Increase in other financial liabilities 2022 $’000 37,388 3,064 524 36 - 262 (2,536) 922 - (521) 2021 $’000 32,834 2,933 624 10 524 98 (98) 976 24 (73) 2,040 1,502 (128,606) (14,278) 1,488 (624) (1,586) 1,062 489 (3,736) 699 5,292 18,508 9,073 (812) 7,699 (3,756) 284 (2,740) (1,472) (4,411) 12,591 41,587 Net cash (outflows) inflows from operating activities (65,836) (ii) 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 within one year Borrowings – repayable after one year Net debt Cash and cash equivalents Gross debt – variable interest rates Net debt Net debt as at 30 June 2020 Cash flows Other non-cash movements Net debt as at 30 June 2021 Cash flows Other non-cash movements 2022 $’000 2,957 (29,159) 2021 $’000 5,386 - (172,486) (118,714) (198,688) (113,328) 2,957 5,386 (201,645) (118,714) (198,688) (113,328) Other Assets Liabilities from financing activities Borrowings due within 1 year $’000 Borrowings due after 1 year $’000 Total $’000 - - - - (145,362) (142,671) 27,435 (787) 30,130 (787) (118,714) (113,328) (29,193) (53,249) (84,871) 34 (523) (489) Cash $’000 2,691 2,695 - 5,386 (2,429) - Net debt as at 30 June 2022 2,957 (29,159) (172,486) (198,688) 92 93 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial 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. 20. Significant estimates and judgements 21. Financial Risk Management 22. Capital management objectives and gearing 23. Dividends 95 96 100 101 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. 20. 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, environmental 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 rising interest rates and inflation, 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 34 (i). There were no critical judgements other than those involving estimates referred to above, that management made in applying the group’s accounting policies. 94 95 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial 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. 21. 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 Credit risk Cash and cash equivalents, trade and other receivables and derivative financial instruments Cash flow forecasting Interest rate swaps Sensitivity analysis Ageing analysis Credit ratings Ongoing checks by management Management of deposits Contractual arrangements Liquidity risk Borrowings and other liabilities Forecast and actual cash flows Flexibility in funding arrangements Financial risk management is considered part of the overall risk management program overseen by the Audit and Risk Management committee. Further detail on the types of risks to which the group is exposed and the way the group manages these risks is set out below. The group holds the following financial instruments: 2022 $’000 2021 $’000 2,957 15,500 2,459 20,916 5,386 12,136 10 17,532 26,898 112,310 21,633 93,759 201,645 118,714 1,168 - 1,548 87 342,021 235,741 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. 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 cap and collar contracts under which a part of the consolidated entity’s projected borrowings are protected for the period from 1 July 2022 to 30 June 2025. 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 development programs. Instruments used by the group iii. 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% - 3.00% (2021 – 1.00% - 1.50%). 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% (2021 – 0.87% 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 52% (2021 - 46%) of the variable loan outstanding at balance date of $201,993,000 (2021 - $119,193,000), with terms expiring in 2023 and 2025. The consolidated entity’s exposure to interest rate risk and the effective weighted average interest rate for receivables and borrowings is set out below. 2022 2021 Interest bearing - variable $’000 Non-interest bearing $’000 Total $’000 Interest bearing - variable $’000 Non-interest bearing $’000 Total $’000 Receivables Trade and other receivables* Employee share loans * Excluding prepayments and contract assets. - - - 15,498 15,498 2 2 15,500 15,500 - - - 12,133 12,133 3 3 12,136 12,136 Interest bearing - fixed $’000 2022 Interest bearing - variable $’000 2021 Interest bearing - fixed $’000 Interest bearing - variable $’000 Total $’000 Total $’000 Interest bearing liabilities Bank loans - 201,993 201,993 - 119,193 119,193 Other financial liabilities 112,261 112,261 - 112,261 201,993 314,254 93,754 93,754 - 93,754 119,193 212,947 The weighted average interest rate at year end is 2.42% (2021: 1.55%). An analysis by maturity is provided in 21(c)i. below. 96 97 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report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. Group – at 30 June 2021 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 d) Fair value measurement This note provides information on the judgements and estimates made by the group in determining the fair values of Derivative counterparties and cash deposits are placed with high credit quality financial institutions, such as major the financial instruments. trading banks. involved scenario modelling including downside cases, conditional and potential acquisition scenarios and possible As at 30 June 2022 Notes impacts from external events. Due to the dynamic nature of the underlying businesses, the group aims at maintaining Assets Level 1 $’000 Level 2 $’000 Level 3 $’000 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 flexibility in funding by keeping committed credit lines available. At 30 June 2022 the group had undrawn committed facilities of $88,634,000 (2021 - $94,810,000) and cash of $2,957,000 (2021 - $5,396,000) to cover short term funding requirements. Refer to note 13(ii) for details. The Company continued to operate within all of its facility covenants throughout FY2022. 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. Less than 1 year $’000 Between 1 and 2 years $’000 Between 2 and 5 years $’000 Total contractual cash flows $’000 26,898 89,240 30,026 - - 25,556 - - - - 192,138 - 26,898 114,797 222,164 - Carrying amount $’000 26,898 112,261 201,645 - Group – at 30 June 2022 Non-derivatives Non-interest bearing Fixed rate Variable rate Derivatives Total 98 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. The following table presents the group’s financial assets and liabilities measured and recognised at fair value at 30 June 2022 and 30 June 2021: Total $’000 2,459 2,459 Total $’000 10 10 87 87 Derivatives used for hedging 9 Total assets - - 2,459 2,459 - - As at 30 June 2021 Notes Level 1 $’000 Level 2 $’000 Level 3 $’000 Assets Derivatives used for hedging Total assets Liabilities Derivatives used for hedging Total liabilities 9 9 - - - - 10 10 87 87 - - - - 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 146,164 25,556 192,138 363,859 340,804 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. 99 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportCAPITAL MANAGEMENT 22. Capital management objectives and gearing The consolidated entity’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the group will consider a range of alternatives which may include:  raising or reducing borrowings  adjusting the dividend policy  issue of new securities  return of capital to shareholders  sale of assets. Gearing is a measure used to monitor the levels of debt used in the business to fund operations. The 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 13 5 2021 $’000 2021 $’000 201,645 118,714 (2,957) (5,386) 198,688 113,328 421,223 400,361 47.2% 28.3% The group’s guideline is to target gearing within the range of 20-75% The group operated comfortably within the target range during the financial 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 13 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. 23. Dividends a) Ordinary shares Fully franked based on tax paid at 30% Final dividend for the year ended 30 June 2021 of 13.5 cents (2020 – 6.5 cents) per fully paid share - Paid in cash - Satisfied by shares under the dividend reinvestment plan Interim dividend for the year ended 30 June 2022 of 13.0 cents (2021 – 13.0 cents) per fully paid share - Paid in cash - Satisfied by shares under the dividend reinvestment plan 2022 $’000 2021 $’000 6,760 3,996 10,676 - 3,761 1,414 6,472 3,850 Total 21,432 15,497 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 14.5 cents per fully paid ordinary share (2021 – 13.5 cents), fully franked based on the tax paid at 30%. The aggregate amount of the proposed dividend expected to be paid on 28 October 2022 out of retained profits at 30 June 2022, but not recognised as a liability at year end is below: Dividends not recognised at year end c) Franked dividends 2022 $’000 2021 $’000 11,909 10,982 The franked portions of the final dividend proposed at 30 June 2022 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% (2021 – 30%) 2022 $’000 2021 $’000 113,566 107,066 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 $5,104,000 (2021 - $4,707,000). 100 101 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial 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. 24. Subsidiaries 25. Interests in joint arrangements 26. Deed of cross guarantee 27. Parent entity financial information 103 104 104 104 GROUP STRUCTURE 24. Subsidiaries The group’s operating subsidiaries at 30 June 2022 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 34 (b). Company Notes Equity Holding 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 Baret Developments Pty Ltd Cranford Pty Ltd Daleford Property Pty Ltd Dunland Property Pty Ltd Esplanade (Mandurah) Pty Ltd Eucalypt Property Pty Ltd Flametree Property Pty Ltd Galaway Holdings Pty Ltd Gaythorne Pty Ltd Geographe Property Pty Ltd Huntsman Property Pty Ltd Jarrah Property Pty Ltd Kayea Property Pty Ltd Lonnegal Property Pty Ltd Osprey Property Pty Ltd Silhouette Property Pty Ltd Terra Property Pty Ltd Upside Property Pty Ltd Vintage Property Pty Ltd Williams Landing Home Improvement Pty Ltd Williams Landing Home Improvement Trust Williams Landing Shopping Centre Pty Ltd Williams Landing Shopping Centre Trust Williams Landing Town Centre Pty Ltd Woodbrooke Property Pty Ltd Yonder Property Pty Ltd Zamia Property Pty Ltd (i) (ii) 2022 - 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 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% 102 103 (i) Champion Bay Nominees Pty Ltd was wound up during the year ended 30 June 2022. (ii) Baret Developments was incorporated during the year ended 30 June 2022. Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report25. Interests in joint arrangements Set out below are the joint ventures of the group as at 30 June 2022. The principal place of business and country of incorporation (or origin) was Australia for all entities. Name of entity % of ownership interest Nature of relationship Measurement method Carrying amount 2022 $’000 2021 $’000 Cedar Woods Wellard Limited 2022 % - 2021 % 32.5 a) Investments in subsidiaries and joint venture entities 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 ventures are recognised in the parent entity’s profit or loss, rather than being deducted from the carrying amount of these Joint Venture Equity method - - investments. Cedar Woods Wellard Limited, a property development company that developed the Emerald Park residential estate at Wellard, WA was wound up during the year ended 30 June 2022 following the completion of the project. b) Tax consolidation legislation 26. Deed of Cross Guarantee Cedar Woods and its wholly owned Australian controlled entities have implemented the tax consolidation legislation. Dormant entity, Baret Developments Pty Ltd is not registered for tax and thus not currently part of the tax consolidated Cedar Woods Properties Limited and all subsidiaries listed at note 24 except for dormant entity, Baret group. Developments Pty Ltd, 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’. a) Consolidated statement of profit or loss and comprehensive income for the year ended 30 June 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 in the tax consolidated group have also entered into a tax funding agreement under which the subsidiaries fully compensate the parent for any current tax payable assumed and are compensated by the parent for any current The consolidated statement of profit or loss and comprehensive income for the year ended 30 June 2022 of the tax receivable and deferred tax assets relating to unused tax losses that are transferred to the parent under the closed group is the same as the consolidated group b) Consolidated balance sheet as at 30 June tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in the subsidiaries’ financial statements. The consolidated balance sheet of the closed group at 30 June 2022 is the same as the consolidated group. The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from 27. 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 (a) and (b) below. The individual financial statements for the parent entity show the following aggregate amounts: 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. 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 104 2022 $’000 2021 $’000 49,381 505,487 (55,716) 45,299 447,742 (93,983) (228,954) (184,404) 276,533 263,068 137,333 1,815 133,119 1,302 137,385 128,647 276,533 263,068 28,519 28,519 25,818 25,818 105 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportUNRECOGNISED ITEMS 28. Contingent liabilities Bank guarantees At 30 June 2022 bank guarantees totalling $39,373,000 (2021 - $20,997,000) had been provided to various state and local authorities supporting development and maintenance commitments. 29. Commitments Capital commitments At 30 June 2022 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 $26,327,000 (2021 - $22,363,000), for building construction was $88,789,000 (2021 - $103,073,000) and for landscaping construction was $2,412,000 (2021 - $3,748,000). This work will be substantially completed in the next 12 months. 30. Events occurring after the reporting period Refer to note 23(b) for details of the final dividend recommended by the directors, to be paid on 28 October 2022. No other matters or circumstances have arisen since 30 June 2022 that have significantly affected or may significantly affect:  the consolidated entity’s operations in future financial years; or  the results of those operations in future financial years; or  the consolidated entity’s state of affairs in future financial years. 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. 28. Contingent Liabilities 29. Commitments 30. Events occurring after the reporting period 107 107 107 106 107 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial 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. 31. Related Party Transactions 32. Remuneration of Auditors 33. Employee Share Scheme 34. Summary of Accounting Policies 35. Segment Information 109 109 110 110 118 108 31. 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 2022 $ 2021 $ 2,829,837 2,451,717 160,983 142,986 599,348 599,381 3,590,168 3,194,084 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 24. 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 totaling $12,750 (2021 - $720,988) from Cedar Woods Wellard Limited. 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 During the year, planning, architectural and consulting services were provided by Hames Sharley Architects of which Director, Mr W G Hames is a principal and Property settlement charges were paid to Westland Settlement Services Pty Ltd, a company associated with the family of Director, Mr R S Brown. For detailed disclosures please see the remuneration report on page 66. 32. 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 compliance and advisory services - Consulting services Total fees for non-audit services Total assurance and non-audit services 2022 $ 2021 $ 308,612 289,872 - 3,060 308,612 292,932 87,210 113,545 - 49,780 87,210 163,325 395,822 456,257 109 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report33. Employee Share Scheme The current Long Term Incentive (LTI) plans effective from 1 July 2019 for FY2020, from 1 July 2020 for FY2021 and from 1 July 2021 for FY2022 will continue in FY2023. 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 55-57 and 59 of this annual report. The MD receives 65% of the STI in cash, with 35% deferred by way of a grant of zero-price options under the Deferred Short-Term Incentive (DSTI) Plan (FY2021 – 45% cash STI and 55% DSTI). 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 54 of this annual financial report. 34. 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 2021:  AASB 2020-4 Amendments to Australian Accounting Standards – Covid-19-Related Rent Concessions [AASB16]  AASB 2020-8 Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform - Phase 2 [AASB 4, AASB 7, AASB 9, AASB 16 & AASB 139]. The 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. iv. New standards and interpretations not yet adopted Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2022 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 2022 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 25. 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 34(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. 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. 110 111 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report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. Lease income iv. 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 certain 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 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. 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:  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. 112 113 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report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:  it is technically feasible to complete the software so that it will be available for use  management intends to complete the software and use it  there is an ability to use the software and to restrict others from accessing it  it can be demonstrated how the software will generate probable future economic benefits  adequate technical, financial and other resources to complete the development and to use the software are available, and  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:  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:  those to be measured at fair value through profit or loss; and  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. 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. 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:  fixed payments (including in-substance fixed payments), less any lease incentives receivable  variable lease payments that are based on an index or a rate  amounts expected to be payable by the lessee under residual value guarantees  the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and  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:  the amount of the initial measurement of lease liability  any lease payments made at or before the commencement date less any lease incentives received  any initial direct costs, and  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. 114 115 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report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. 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) 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 v) 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. w) 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. x) Dividends Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the financial year but not distributed at balance date. y) 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 54 to 55. 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:  Including any market performance conditions (e.g. the entity’s share price); and  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. z) 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. 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 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. 116 117 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report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. 35. 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. DECLARATION AND INDEPENDENT AUDITOR’S REPORT Directors' Declaration Independent Auditor’s Report 120 121 118 119 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportDIRECTORS’ DECLARATION In the directors’ opinion: a) the financial statements and notes set out on pages 70 to 118 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 2022 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 24 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 26. Note 34(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 24 August 2022 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 2022 and of its financial performance for the year then ended (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 2022 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 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. 120 121 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial 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 is located in Western Australia, Victoria, Queensland and South Australia. Materiality Audit scope Key audit matters ● 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 predominantly performed at the Group head office. ● Amongst other relevant topics, we communicated the following key audit matters to the Audit and Risk Management 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 $2.7 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. ● 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 How our audit addressed the key audit matter Carrying value of inventory (Refer to note 7 and 20(b)) We performed the following procedures, amongst others: As of 30 June 2022, the Group recognised total inventory of property held for sale of $702m, split between current inventory of $212m and non-current inventory of $490m. Inventory is stated at the lower of cost and net realisable value for each development project. The Group’s estimate of net realisable value includes assumptions about future market and economic conditions which inherently are subject to the risk of change. These factors are disclosed in Note 20(b) and include, but are not limited to future sales prices, future sales rates, further 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. • 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 (e.g. land acquisition, development costs and capitalised borrowing costs) to supporting documentation and assessed whether they were capitalised appropriately 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, our observations made through site visits during the year and our understanding of current economic conditions relevant to individual project locations as informed by publicly available property market reports. 2 3 122 123 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report Key audit matter How our audit addressed the key audit matter For those projects which were assessed to be at greater risk, we performed a combination of one or more of the following audit procedures: • We obtained the net realisable value assessment and cash flow analysis and held discussions with management to develop an understanding of the basis for assumptions used in the analysis • Assessed the appropriateness of key assumptions, including: o o o 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 • Assessed whether the carrying value was the lower of cost and net realisable value We also evaluated the reasonableness of the Group’s disclosures 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 2022, 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. 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/auditors_responsibilities/ar1.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 50 to 67 of the directors’ report for the year ended 30 June 2022. In our opinion, the remuneration report of Cedar Woods Properties Limited for the year ended 30 June 2022 complies with section 300A of the Corporations Act 2001. 4 5 124 125 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit ReportFinancial 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 24 August 2022 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 128 129 131 6 126 127 Annual Report 2022Cedar Woods Properties LimitedFinancial StatementsKey NumbersFinancial RisksGroup StructureUnrecognised ItemsFurther InformationDeclaration & Audit Report INVESTORS’ SUMMARY Dividend and dividend policy The final dividend for the 2022 financial year is 14.5 cents per share, fully franked. The dividend will be paid on 28 October 2022. 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 FY2022 as it did in the prior year, with the total FY2021 dividends representing a payout ratio of 60%. This acknowledges both the result in FY2022 and the current outlook for growth in FY2023. 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: 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; 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; 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 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 not be in operation for the final dividend for the 2022 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 25 August 2022 29 September 2022 28 October 2022 October 2022 2 November 2022 February 2023 April 2023 May 2023 August 2023 SHAREHOLDER INFORMATION The shareholder information set out below was applicable at 18 August 2022. 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 1,535 1,535 513 580 55 Number of shares 633,039 4,078,423 3,861,445 14,635,077 58,919,868 4,218 82,127,852 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 J P Morgan Nominees Australia Pty Limited Citicorp Nominees Pty Limited Hamsha Nominees Pty Ltd Westland Group Holdings Pty Ltd National Nominees Limited HSBC Custody Nominees (Australia) Limited Beach Corporation Pty Ltd Joia Holdings Pty Ltd Helen Kaye Poynton Warbont Nominees Pty Ltd Netwealth Investments Limited Mr Paul Stephen Sadleir Brispot Nominees Pty Ltd BNP Paribas Nominees Pty Ltd Hub24 Custodial Serv Ltd Dr Alan Gerraty & Mrs Patricia Gerraty Leblon Holdings Pty Ltd BNP Paribas Noms (Nz) Ltd Mr John Henry Tucker & Mrs Kay Joylene Tucker BNP Paribas Noms Pty Ltd Gold Plaza Pty Ltd Number of shares 13,111,046 6,370,584 5,040,216 4,233,029 3,796,352 3,743,487 3,382,604 2,298,758 1,677,095 1,364,268 1,178,180 1,083,283 837,026 720,874 600,000 536,240 500,000 485,000 438,935 417,482 Percentage of shares 15.96 7.76 6.14 5.15 4.62 4.56 4.12 2.80 2.04 1.66 1.44 1.32 1.02 0.88 0.73 0.65 0.61 0.59 0.53 0.51 51,814,459 63.09 128 129 Cedar Woods Properties LimitedAnnual Report 2022c) Substantial shareholders of ordinary shares As disclosed in substantial shareholder notices lodged with the ASX at 18 August 2022. FIVE YEAR FINANCIAL PERFORMANCE All figures in $’000 except where stated 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 9,291,217 12.90 9.75 11.41 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 FY2020 long term incentive plan Performance rights issued under the FY2021 long term incentive plan Performance rights issued under the FY2022 long term incentive plan Zero price options issued under the FY2021 deferred short term incentive plan Number on issue Number of holders 243,246 272,023 252,299 32,182 20 23 30 1 Financial Year Financial Performance 2022 2021 2020 2019 2018 Revenue from operations 333,036 299,751 260,660 375,149 239,661 Earnings before interest and tax 54,060 50,552 31,729 72,014 65,168 Finance costs 444 3,049 2,245 3,072 4,020 Operating profit before tax 53,616 47,503 29,484 68,942 61,148 Income tax expense Net profit after tax Financial Position Total assets Total liabilities 16,228 14,669 9,097 20,298 18,545 37,388 32,834 20,387 48,644 42,603 779,833 651,800 644,055 571,711 601,516 358,610 251,439 267,254 195,181 248,330 Shareholders’ equity 421,223 400,361 376,801 376,530 353,186 Number of shares on issue – end of year (‘000) 82,128 81,345 80,448 80,118 79,517 Basic earnings per share (cents) 45.7 40.7 25.4 60.9 53.9 Key Performance Measures Dividend per share, fully franked (cents) 27.5 26.5 19.0 31.5 30.0 EBIT Margin Interest cover (times) Return on Equity 16.2% 16.9% 12.2% 19.2% 27.2% 9.1 9.1 12.1 8.2% 5.9 5.4% 8.6 8.5 12.9% 12.1% Investment in inventory during year 329,296 198,972 208,952 245,814 191,633 Net tangible assets backing per share ($) 5.13 4.92 4.68 4.67 4.44 Net bank debt Net bank debt to equity 198,688 113,328 142,671 105,314 109,134 47.2% 28.3% 37.9% 28.0% 30.9% Share price – end of year ($) 3.68 6.71 5.24 5.70 5.76 Stock Market capitalisation at 30 June 302,230 545,824 421,547 456,6 458,015 Number of employees at 30 June 99 93 91 95 90 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 % 12.2 (45.2) 35.9 (42.4) (9.2) (13.5) (9.7) (9.5) (4.5) (6.7) (1.4) (1.9) 130 131 Cedar Woods Properties LimitedAnnual Report 2022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 2 November 2022 Time 10:00am AWST 132 Cedar Woods Properties Limited