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
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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
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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
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L
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a
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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
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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
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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
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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:
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Value creation
We create long-term value for our shareholders.
Transparency
We interact and engage with shareholders through various forums, including half-year and annual reporting,
annual meeting of shareholders, investor presentations, web forums and ASX disclosures and announcements.
Strategic 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.
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High Performance Culture
Our strategic priority is to create a progressive, high-spirited work environment with strong staff alignment to
values and objectives, where top talent works collaboratively, and high performance is rewarded.
We undertake an annual 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.
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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
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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.
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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.
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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.
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Strategic Response
Respecting culture and heritage
Affordable and Diverse Housing
Smith Family Partnership
Community Sponsorship
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Smith Family Tour, Glenside SA
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Land and Built Form Delivery
The Company plays a key role in the supply of land, housing and infrastructure, nationally. Our projects contribute
to land supply, increase the number 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
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Fair and Ethical Procurement
The Company is committed to ethical, accountable and transparent procurement that maintains probity and
fairness. To achieve balanced environmental, social and economic outcomes, we rely on our network of diverse
and multidisciplinary suppliers. When delivering our projects, our suppliers 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.
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Byford on the Scarp, Byford WA
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Cedar Woods Properties LimitedAnnual Report 2022
ENVIRONMENT – FY2022 HIGHLIGHTS
First Carbon
Footprint Mapping
completed in FY2022 for
Greenhouse Gas Emissions.
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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
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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
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Policy Risk: Rainfall,
Storms, Cyclones and
Flooding.
Time horizon: Medium to
long-term
Policy: Water Scarcity.
Time horizon: Short to
long-term
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.
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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.
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Climate Related Risk
Financial Impact
Risk Adaptation & Mitigation
Legal / Liability Risk
Time horizon: Medium to
long-term
Technological Risk
Time horizon: Medium to
long-term
Evidence suggests that
existing homes directly
exposed to climate-related
risk, (particularly when
threatened by coastal
processes and bushfire)
are adversely impacted by
higher insurance premiums
(or inability to insure certain
risks), lower property
valuation and reluctance
by financial institutions to
provide finance.
Out of date technology and
lack of innovation. Cost
of retrofitting to achieve
compliance.
Market: Change in
Consumer Preferences
Time horizon: Short to
long-term
Reduced market share,
sales and return on
investment.
Reputational Risk.
Time horizon: Short to
long-term
Physical Risk: Sea
Level Rise and Coastal
Erosion.
Time horizon: Medium to
long term
Loss of company reputation,
credentials and branding.
Loss of engagement with
staff.
Cost of protective
measures, upgrade and
repair.
Physical Risk: Bushfire.
Time horizon: Short to
long-term
Loss and cost of
rehabilitation, replacement,
upgrade and repair.
Compliance with firebreak
requirements.
Extra cost and time to
construct physical assets.
Loss and cost of
rehabilitation, replacement,
upgrade and repair.
Physical Risk: Increase
in construction time and
costs due to increase in
severe weather
Time horizon: Short to
long-term
Physical Risk: Rainfall,
Storms, Cyclones and
Flooding. Direct loss
or damage to property
assets.
Time horizon: Short to
long-term
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New property development is subject to
the latest climate change data reflected
in coastal protection, bushfire and
drainage and flooding management plans
/ requirements. Risk relates more to
older established dwellings in vulnerable
locations.
Urban and built-form design response and
incorporation of climate-related impact
mitigation and adaption can be constantly
updated and applied throughout the life of a
Cedar Woods project.
Setting aside considerations relating to
location and price, new housing in estates
that are compliant with climate-related
policy settings (energy efficient design,
bushfire mitigation, drainage and flood
management etc.) respond better to shifting
consumer preference than housing stock
with inferior design qualities and in more
vulnerable locations.
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.
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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.
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preference for water and energy efficient initiatives and other sustainability benefits as part of a housing
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package, most are not prepared to incur additional cost. This is particularly the case for first-home buyers,
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where up-front cost is critical to affordability and finance approval. The Company is currently reviewing its
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apartment sustainability initiatives, with a particular focus on high-value initiatives and maximum benefit-to-
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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 %
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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
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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
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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
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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
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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
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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
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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
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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.
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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.
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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.
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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.
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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
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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.
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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.
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3
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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
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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
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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
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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)
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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
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Cedar Woods Properties Limited