1 Cedar Woods Properties Limited
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 our disciplined approach to acquisitions, the
rigour and thoughtfulness of our designs, and the
creation of dynamic communities that meet the
evolving needs of our 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.
Pictured cover: Incontro Townhomes, Subiaco WA
2 Cedar Woods Properties Limited
Cedar Woods Properties Limited
Local artist, Connie Clinch, in front of her mural at Byford on the Scarp, WA
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............................................................. 20
Directors’ Report ..................................................... 35
Directors’ Report: Letter to Shareholders from the
Chair of the Remuneration & Nominations
Committee (The Committee) ................................... 40
Directors’ Report: Remuneration Report ................. 41
Auditor’s Independence Declaration ....................... 60
Financial Statements ............................................. 61
Notes To The Financial Statements ........................ 67
Section A: Key Numbers ........................................ 68
Profit or Loss Information ........................................ 69
Balance Sheet Information ...................................... 72
Cash Flow Information ............................................ 84
Section B: Financial Risks ...................................... 86
Significant Estimates and Judgements ................... 87
Financial Risk Management .................................... 88
Capital Management ............................................... 92
Section C: Group Structure ..................................... 94
Group Structure ...................................................... 95
Section D: Unrecognised Items.............................. 98
Unrecognised Items ................................................ 99
Section E: Further Information .............................. 100
Directors’ Declaration ............................................ 112
Independent Auditor’s Report ............................... 113
Shareholders’ Information ..................................... 119
Investors’ Summary .............................................. 120
Shareholder Information ....................................... 121
Five Year Financial Performance .......................... 123
Annual Report 2023 3
LETTER FROM THE
CHAIRMAN
The property sector has not been far from the
These organisations have either large capital
headlines in the past 12 months especially in regard
allocations to deploy or large land portfolios and see
to housing shortages and affordability.
the mutual benefits that could be achieved by
At Cedar Woods we take pride in the role we play in
delivering innovative solutions to the property
market and the communities which we create. We
seek to achieve this while delivering strong returns
to our investors.
The property sector has had to navigate several
challenges in recent years. For Cedar Woods these
have included the difficult construction sector
conditions, rising interest rates and the impact this
has had on demand for new housing.
However, we expect interest rates to peak shortly,
which will give prospective home buyers more
certainty of their future mortgage repayments and
more confidence to buy.
The Federal Government’s initiative to increase
inbound migration, to boost economic growth and
redress the shortage of skilled labour, will ultimately
help underpin long-term demand for housing.
Despite the mixed conditions for sales and
construction, we continue to expect our sector to
perform well in the medium term. We have a
significant project pipeline, and we remain well
positioned to respond to future market demand once
conditions normalise.
At Cedar Woods we are always looking at how we
do things, and how things can be done differently for
the benefit of our customers and shareholders. One
of these areas is our capital management initiatives.
In the past year we have established strategic
partnerships with Tokyo Gas and QIC Real Estate.
partnering with an expert developer like Cedar
Woods. For us, this delivers both an enhanced
project pipeline and a capital efficient manner to
deliver projects.
Sustainability continues to be a driver of everything
that we do at Cedar Woods and we have continued
to roll out our ESG strategy, including some major
new initiatives, such as a Community Energy
Sharing Network in the design of our Eglinton
Village development in Perth’s north.
The tight labour market in Australia has warranted
an even greater focus by management on our
people. To that end, I’m pleased to report a
continued outstanding response from our staff in the
annual survey, where we achieved an 81%
satisfaction score.
In addition, we recognise the long-term future of our
business relies on effective succession and we have
implemented an expanded leadership training
program in conjunction with Melbourne Business
School to foster our future leaders.
We maintain a strong sense of community within
Cedar Woods. We develop communities and we
understand the value of giving back, in particular to
those who are less fortunate. We have a long-term
partnership with the Smith Family Children’s Charity
and I’m delighted by the number of staff who
actively volunteer to support our joint activities.
4 Cedar Woods Properties Limited
Finally, I’d like to extend a broad thank you to the
Sincerely,
entire Cedar Woods team, led by our Managing
Director Nathan Blackburne and his executive team
for their efforts in the past year.
I’m buoyed by the outlook. There are challenges,
but I feel we have the right strategy, the right team,
the project pipeline and the partners to deliver
strong returns for our valued shareholders.
William Hames
Chairman
Annual Report 2023 5
LETTER FROM THE
MANAGING DIRECTOR
The operating environment for property
As part of this strategy, we have a sale process
development during FY2023 has been challenging,
underway for a shopping centre asset in Victoria
but the Company has successfully adjusted to take
and if this transaction completes it will deliver
full advantage as market conditions improve.
significant capital return and profit for the company.
The rapid rise in interest rates impacted buyer
Additionally, partnerships with QIC and Tokyo Gas
sentiment during the first 3 quarters of the financial
present exciting opportunities for Cedar Woods to
year, resulting in sales figures substantially lower
participate in projects of scale without committing to
than the prior two years. However, sales rebounded
the entire capital requirements of the developments.
strongly in the final quarter, leaping 58% on the prior
quarter and up 10% on the corresponding Q4
FY2022.
The QIC partnership will initially focus on the joint
development of around 400 townhouses and
apartments at the Robina town centre in South-East
One reason for lower sales was the extended
Queensland. The partnership intends to expand to
timeline for development projects to be delivered,
other centres owned by QIC, potentially providing a
which deterred buyers and also caused
significant pipeline of well-located residential sites
corresponding delays to settlements for the
for Cedar Woods to develop.
Company. While bottlenecks are easing, trading
conditions resulted in a reduced FY2023 NPAT of
$31.6 million, compared to the prior year result of
$37.4 million.
Rising costs and labour shortages had an impact on
margins during FY2023. While these pressures will
continue to some degree in FY2024, costs are
expected to stabilise and sales prices should
improve over time, allowing profit margins to
improve. Our project pipeline remains strong with
presale contracts of $448 million scheduled to
deliver revenue in FY2024 and into FY2025.
To replenish the portfolio, Cedar Woods has
invested approximately $82 million in land
acquisitions during FY2023. With a land bank that
has been significantly extended by acquisitions and
joint ventures, our focus in FY2024 will be on driving
enhanced returns from existing and newly acquired
projects.
The Company also has a strategy of developing
investment grade assets and selling them to realise
profits and recycle capital back into the business.
The partnership with Tokyo Gas, initially on the
Company’s Banksia Apartments project, is also
intended to be expanded over time by acquiring
new projects jointly.
As the forward outlook for property development
improved during the year, equity market investors
have shown increased interest in the Company. The
rapid movements in interest rates had impacted the
stock price and during the second half of the year,
investors have attempted to get ahead of an
anticipated recovery in the residential property
market.
Given the medium term outlook, with property
market fundamentals remaining supportive, we
believe Cedar Woods continues to present
compelling value while providing an attractive fully
franked dividend yield.
6 Cedar Woods Properties Limited
The Company starts FY2024 in a strong position
Sincerely,
with several new projects expected to contribute to
earnings and our pipeline of more than 10,000
undeveloped dwellings/ lots/ offices across four
states places us well for the medium and longer
term.
Nathan Blackburne
Managing Director
Annual Report 2023 7
FINANCIAL
PERFORMANCE
HIGHLIGHTS
8 Cedar Woods Properties Limited
Incontro Townhomes, Subiaco WA
Annual Report 2023 9
OUR
BUSINESS
OUR HISTORY
Cedar Woods was established in 1987 and listed on
the ASX (Code: CWP) in 1994. Starting out as a
developer of master planned communities in
Western Australia, the Company progressively
OUR PURPOSE, VISION & VALUES
Our Purpose, Vision and Values inform every
decision we make, guide our conduct internally
and our relationships with partners, customers
and investors.
branched out into new product areas and
We are proud to be a leading national property
geographies. The Company expanded into
developer, and with an ongoing commitment to our
Melbourne in 1997, then Brisbane in 2014 and
strategy and our values, we look forward to fulfilling
Adelaide in 2016 and now has a significant portfolio
our vision of becoming the best Australian property
of quality developments delivering residential lots,
company, renowned for performance and quality.
townhouses, apartments and commercial projects.
The Company is known for taking on complex, large
scale projects, adding value through planning
design and delivery and generating strong returns
from multi-year projects. As a result, it has built
a reputation as an innovative and diversified
property group with a track record
of strong financial performance,
sustained since inception.
10 Cedar Woods Properties Limited
OUR STRATEGY
Our strategy is to grow our national project portfolio, diversified by geography, product type and price point,
so that it continues to hold broad customer appeal and performs well in a range of market conditions.
Geography
Product Type
Price Point
Good geographic spread
of well-located projects in
Range of housing lots,
Wide range of price points
apartments, townhouses and
offered in Queensland, South
our states
commercial properties
Australia, Victoria and Western
Australia
VALUE CREATION MODEL
We deliver on our strategy via our value creation model.
Property Acquisitions
Development
Marketing & Sales
Disciplined approach
Research, design, planning
Integrated approach to
to acquisitions:
and delivery:
optimise results:
Tactical and research-
Sustainable designs that
based decisions to identify
projects
Rigorous assessment and
conservative assumptions
Structure contracts to
minimise risks and
optimise returns
Utilising third-party capital
via strategic partnerships
and joint ventures
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
Positioning projects to
maximise demand
Pre-sell to underwrite
projects
Quality brands and
marketing material
Lead generation and sales
conversion
Customer nurturing and
referral
Annual Report 2023 11
STRATEGIC PRIORITIES
We optimise business performance through a focus on four strategic priorities.
High Performance Culture
Operational Excellence
Creating a progressive, high-spirited work
Being operationally strong and safe through
environment with strong staff alignment to values
renewed and integrated systems and technologies,
and objectives, where top talent work collaboratively
having a strong corporate brand with quality projects
and high performance is rewarded.
and delivering sustainable projects.
Financial Strength
Earnings Growth
Optimising performance through disciplined
Pursuit of earnings growth is the key metric
capital management, a commercial focus,
to achieve our primary objective of creating
cost minimisation and maintaining a strong
long-term value for our shareholders. This may be
balance sheet.
achieved organically, by mergers and acquisitions
or through new business areas.
12 Cedar Woods Properties Limited
Cedar Woods Properties Limited
Ellendale Park, QLD
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 2023.
2023 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
2023
$’000
2022
*Restated
$’000
% Change
391,303
333,036
31,635
37,388
783,398
796,387
195,806
198,688
431,102
421,223
17.5
(15.4)
(1.6)
(1.5)
2.3
2022
2023
*Restated
% Change
¢
¢
¢
%
%
%
%
%
x
$
38.5
38.0
20.0
7.3
7.9
36.7
45.4
25.3
3.6
5.21
45.7
45.2
27.5
8.9
9.4
(42.4)
47.2
25.1
9.1
5.11
(15.8)
(15.9)
(27.3)
(17.9)
(16.0)
79.1
(3.8)
0.8
(60.4)
2.0
0.1
36.8
36.7
Shares on issue – end of year
’000
82,210
82,128
Stock market capitalisation at 30 June
$’000
413,516
302,230
Share price at 30 June
$
5.03
3.68
* See Note 15 for details of the restatement.
Annual Report 2023 13
FINANCIAL YEAR OVERVIEW
The Company reported a net profit after tax
intended to significantly expand each of these
relationships with further acquisitions, which will
(‘NPAT’) of $31.6 million for the 2023 financial year,
boost the medium-term earnings capacity of the
above June guidance of $30 million.
business.
Full year revenue at $391 million, was up 17% on
the prior year, whilst NPAT was 15% lower. Gross
PORTFOLIO UPDATE
The Company completed and settled a number of
margin of 25%, was down on the prior year of 29%
stages across the portfolio during the final quarter of
as a result of a combination of changes in the
FY2023 resulting in a strong final quarter for the
product mix and increased construction costs for
year. Built form stages that completed during the
lots/units settled.
Presales contracts at 30 June 2023 were at $448
million providing a strong starting position for the
year ahead, with the majority expected to settle in
FY2024 and the balance in FY2025.
Sales were relatively weak in the first half of
FY2023, primarily due to the rising interest rate
environment, but pleasingly the final quarter sales
jumped 58% on the prior quarter. The market is
being supported by increased inbound migration,
high employment and the low supply of rental
properties in the established market.
The Company has been active in developments
across the portfolio, with a number of new
residential projects launched to market in FY2023,
including Eglinton and Atwater (WA), and Sage
(QLD). The construction sector continues to
experience supply constraints and cost pressures
across the nation, but there are signs of stabilisation
with some building material costs coming off
previous highs and home builders willing to hold
prices for increasing periods of time.
quarter include Aster apartments in Clayton South,
Victoria, Monarch apartments in Glenside, South
Australia and Incontro townhouses in Subiaco
Western Australia. Significant land stages settled at
Mason Quarter in Wollert, Victoria and at Ellendale,
Upper Kedron, Queensland.
The Company’s capital partnership with Tokyo Gas
to deliver the Banksia apartment project in Glenside,
South Australia has successfully started with the
project 100% sold, construction underway and
completion due in the first half of FY2024. Also at
Glenside, the Company’s new retirement product,
Bloom apartments has been well received by the
market, achieving 80% presales and is now under
construction with completion expected in FY2025.
The second stage of Glenside Bloom is expected to
be released in the first half of FY2024.
At Williams Landing in Victoria the Boston
Commons strata office building is 100% sold and
under construction with completion forecast in the
first half of FY2025. The Company is selling the next
stage of strata offices at Williams Landing and has a
pipeline of additional office stages to follow within
During the year the Company completed major
this project.
acquisitions in VIC and WA, which are expected to
contribute earnings in the medium to long term. The
Company has also recently announced new
strategic partnerships with QIC, for the joint
development of around 400 townhouses and
Marketing for the sale of the Williams Landing
Shopping Centre (WLSC) commenced during
FY2023. The sale process is currently ongoing,
although there is no certainty a sale will proceed.
apartments at the Robina town Centre in South-East
Cedar Woods’ diversified portfolio helps ensure it is
Queensland, and Tokyo Gas for the co-
positioned to perform well through different property
development of the Banksia Apartments in SA. It is
cycles across state markets.
14 Cedar Woods Properties Limited
PROJECT PIPELINE CHART AS AT 30 JUNE 2023
A
n
n
u
a
l
R
e
p
o
r
t
2
0
2
3
1
5
CORPORATE OBJECTIVES AND
PROGRESS ON STRATEGY
Cedar Woods’ primary purpose is to create value for
corporate facility interest cover was approximately
3.6 times, comfortably above the finance facility
covenant of 2 times. The Company is operating
shareholders through the development of vibrant
within all of its finance facility covenants.
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
$31.6 million and total fully franked dividends of
20.0 cents.
The Company generated strong cash flow from
operations of $105.6 million before payments for
new land acquisitions. This strong operating
cashflow enabled the company to invest $81.9
million in land acquisitions and return $22.6 million
The overarching strategy, as illustrated on page 11,
to shareholders via fully franked dividends.
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.
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.
CAPITAL MANAGEMENT
The Company has corporate finance facilities of
$330 million with maturity terms of 3 years ($264
million) and 5 years ($66 million), with tenure
extended annually.
Subsequent to year end, the Board has declared a
fully franked final dividend of 7.0 cents per share
which, together with the 13 cent interim dividend
paid in April, brings total financial year dividends to
20.0 cents per share (fully franked). The total
dividends of 20.0 cents represent a payout ratio of
approximately 52%.
The dividend reinvestment and bonus share plan
will not be in operation for the upcoming FY2023
final dividend to be paid in October 2023.
MARKET CONDITIONS
Residential property market conditions were
adversely impacted for much of FY2023 by the rapid
increase in interest rates, inflationary pressures and
capacity constraints in the construction sector.
Accordingly, home values and sales volumes fell for
most of the year with improvements seen across the
sector in the final quarter. The Company
experienced a broad and strong improvement in
gross sales in the final quarter with volumes jumping
58% on the prior quarter. Sales have been slower
so far in FY2024 with the Company monitoring to
At 30 June 2023, net bank debt stood at $195.8
see if a trend is developing.
million, retaining approximately $106.5 million in
undrawn headroom in the Company’s long-term
debt facilities to fund the development of the
Company’s portfolio as well as contracted land
acquisitions that will generate future growth.
Although the near-term market outlook remains
uncertain, 1.8 million new households are expected
to form across Australia between 2023 and 2033.
Due to rapid population growth, increasing
household formation and supply challenges, a
In line with the Company’s policy to hedge
deficit of more than 100,000 dwellings is expected
approximately half of interest rate risk, 47% of
over the 5 years to 2027 (Source: National Housing
drawn debt was hedged at year end with interest
Finance and Investment Corporation). The
rate caps ranging from 1% to 3%.
Net bank debt-to-equity at 30 June 2023 was 45%,
in the middle of the Company’s target debt to equity
range of 20% to 75%. Net debt to total tangible
assets less cash was 25% at year end and
undersupply of housing is already apparent with
tight rental markets across all major capital cities
leading to rapidly rising rents and increasing rental
yields, making conditions more favorable for
housing investment.
16 Cedar Woods Properties Limited
Construction conditions vary around the country
Australia, regulators that sets borrowing standards
with costs generally stabilising and builder appetite
for home buyers, the strength of the labour market,
for new work improving, noting some markets
consumer confidence and major supplier risk.
remain challenging for builders due to labour
shortages and elevated costs.
Both civil contractors and apartment and home
builders have been impacted in recent years by
The catalyst for a sustained improvement in sales
significant work volumes, commonly under fixed
volumes is expected to be a combination of the
price contracts, whilst dealing with material and
peaking of interest rates and improved builder
labour shortages that drove cost inflation. As a
capacity, both of which will help restore buyer
result, financial viability of major suppliers became
confidence.
an elevated risk for the Company.
COMPANY OUTLOOK
Cedar Woods starts FY2024 in a strong position
The Company manages this risk by undertaking
comprehensive financial assessments of major
with $448 million in presales expected to settle over
contractors and favouring the appointment of
FY2024 and FY2025.
reputable builders the Company has developed a
Earnings guidance for FY2024 is expected to be
trusted working relationship with.
provided as the year progresses when greater
The Company is exposed to the property cycles in
clarity is obtained on anticipated sales volumes, the
the metropolitan markets in which it operates, i.e.
company wide delivery program and the sale of the
Western Australia, Victoria, Queensland and South
Williams Landing Shopping Centre. Half to half
Australia. Demand fluctuations in these markets
earnings will be weighted by the timing of the
represent a risk to achieving the Company’s
shopping centre settlement, where completed.
financial objectives. The Company aims to mitigate
The Company is well placed for the medium term
with a pipeline of more than 10,000 undeveloped
dwellings/ lots/ offices across four states. Several
this risk by operating in diverse geographical
markets and offering a wide range of products and
price points to various consumer segments.
new projects are expected to contribute to earnings
While house and land prices fluctuate, underlying
from FY2024, including Clara Place and 88 Leveson
demand will be driven by population growth and
townhouses in Victoria, Banksia, Bloom and Sirocco
changing demographics. In the past, the Company
apartments in South Australia, Eglington Village and
has typically achieved its profit objectives by
Atwater in Western Australia, and Sage and South
managing both prices and volumes through the
Maclean in Queensland.
property cycle.
RISKS
The Audit and Risk Management Committee assists
Individual projects are exposed to a number of risks
including those related to obtaining the necessary
the Board in the effective discharge of its
approvals for development, construction risks and
responsibility for risk oversight and ensures that
delays, pricing risks and competition. The Company
internal control systems are in place to identify,
aims to balance its portfolio at any time in favour of
assess, monitor and manage risk. A Risk
mature projects where the project risks are
Management Framework is in place to support the
generally diminished.
integration of risk management within the business
and to promote a culture committed to building long-
term sustainable value for stakeholders.
The risk management framework also seeks to
address a range of other risks that impact the
business, such as economic and political risks,
The general risks to the Company’s performance
climate change risks, competition for staff and
include those relevant to the economy and property
project opportunities, and cyber risks.
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
While the Company has no material exposures to
ESG risks, the ESG report starting on page 20
provides further details on how the Company is
managing ESG risks.
Annual Report 2023 17
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.
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
18 Cedar Woods Properties Limited
Incontro Townhomes, Subiaco WA
Annual Report 2023 19
Annual Report 2023 19
ESG
REPORT
1. 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 people’s 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
being environmentally and socially
responsible. We continually look
for ways to:
Reduce our ecological footprint
Promote affordable housing
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
Instil our values and promote an
ethical business culture through
strong governance
This report communicates our progress
and achievements on environment,
community outcomes and governance,
benefiting those affected by our actions.
20 Cedar Woods Properties Limited
Annual Report 2023 21
Annual Report 2023 21
2. HIGHLIGHTS
Governance
Capital Partnerships
Cedar Woods seals capital partnership
with Tokyo Gas
Cedar Woods recently established a
partnership with Tokyo Gas (TG) to
develop Banksia Apartments, the fourth
apartment building at our Glenside
development. Banksia Apartments consists
of 72 apartments over 8 levels, offering 1,
2- and 3-bedroom residences priced
between $380,000 and $1.5 million.
TG is a substantial Japanese public
company that has made the strategic
decision to invest in Australian real estate as
part of its sustainability and growth strategy.
The partnership has been formulated with
the purpose of building a relationship in the
future.
Executives from Cedar Woods visited Tokyo
to meet the Tokyo Gas team and learn more
about their business and culture.
QIC's Robina Town Centre
Subject Site
Cedar Woods teams up with QIC on Robina
Town Centre
The Company has entered into a joint venture
agreement (subject to conditions precedent) with QIC
Real Estate to jointly develop 400 apartments and
town houses on land owned by QIC adjacent to Robina
Town Centre in South East Queensland.
The joint venture seeks to leverage Cedar Woods’
national residential development capabilities to unlock
value on the Robina land. The arrangement provides
an opportunity to work with an experienced partner and
access an excellent development site. Should this
initial project go well, the potential for Cedar Woods is
significant in terms of an additional future pipeline of
development sites.
22 Cedar Woods Properties Limited
Leadership Training
Focus on leadership
Senior leaders from around the country
Woods’ leaders to develop their skills in
travelled to Melbourne to attend a Leadership
leading self, people and outcomes. The team
Program at Melbourne Business School.
valued the opportunity to share learnings, build
The three-day program, facilitated by
leadership coaches and psychologists was
designed specifically for Cedar
stronger connections among their peers and
dedicate time to strengthen their leadership
toolkit.
HIGHLIGHTS
Social
Employee Value Proposition (EVP) development
Our EVP
As a forward thinking, people focused company,
we create a high spirited and collaborative work
environment that develops talent and values
strong connections between our people. We
have a proud history of career progression
within Cedar Woods that rewards ambition and
high performance.
The types of developments we create are
diverse, which sets us apart from our peers,
providing the opportunity to be involved with a
variety of high quality, innovative and
sustainable projects in locations across
Australia. Our developments seek to leave a
legacy, that improves the lives of our customers.
In today’s highly competitive employment market, Cedar Woods recognises the importance of a strong
employee value proposition (EVP). An EVP encapsulates everything that an organisation uses to attract and
retain talent, through to how someone describes the experience of working for a company to their friends.
It’s the balance of tangible and intangible benefits, representing why someone would choose to work at one
organisation another. Cedar Woods has defined its EVP which includes recognition of the strong culture,
career development opportunities, remuneration and staff benefits. Further details are available at
www.cedarwoods.com.au/Careers
Annual Report 2023 23
Work, Health & Safety
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.
At selected offices and company projects, WHS system compliance is subject to annual external independent
audits against a range of metrics. Recommendations are considered and required improvements made to the
company’s system following these audits.
Social responsibility
The Smith Family
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 program provides school students and their families with financial support for school essentials like
uniforms and books, personal support for the child and their family and access to practical support,
through their extra out-of-school learning and mentoring programs – tailored to each child’s needs.
Throughout the year, Cedar Woods staff across the country have been running, walking, mentoring,
volunteering and fundraising for The Smith Family. In November, the WA team hosted a group of
students from a local high school for a personalised Work Inspiration day. The day provided students
with exposure to real-world experiences, taking them through a number of activities to broaden their
perspective and develop aspirations, both within the property development industry and beyond. Staff
have also volunteered in a career information program for the students, other interactive activities and
fundraising events.
24 Cedar Woods Properties Limited
HIGHLIGHTS
Environment
Climate change and environment
Climate Reporting
The Company updated its climate-related metrics and targets report for FY2023. The report has been guided by
the pronouncements of the Taskforce on Climate related Financial Disclosures (TCFD) and IFRS (International
Financial Reporting Standards) S2 International Sustainability Disclosure Standard recently issued by IFRS
Foundation. Disclosure under the standard is not mandatory in Australia and the Company’s disclosures continue
to evolve with a view to stepping towards compliance when standards become mandatory, which based on
Federal Government consultation is expected to be required for Cedar Woods by FY2027. The Company’s
climate report can be found here: www.cedarwoods.com.au/Our-Company/Sustainability_
Carbon Footprint mapping and carbon
reduction plan
After undertaking its first carbon footprint
mapping in FY2022, the Company rolled out a
carbon reduction strategy across its state
offices and sales offices. This has involved
initiatives such as:
Establishing certified Green Power at sales
offices across the portfolio. By signing up
for Green Power, energy used at the sales
offices is certified by the energy providers
as being 100% renewable from
government accredited sources
Opting for 100% carbon offsets on all
business flights
Introducing 100% carbon offset paper supplies
across all operations
Minimising paper use by the implementation
documents and processes such as identity
verification
Details are on page 32 and in the climate
report.
In addition, in conjunction with the Urban
Development Institute of Australia,
Development WA and other industry
participants, the Company is working to map
the carbon footprint associated with select
projects (civil works construction and built
form). Upon defining the main contributors to
green house gases it will implement reduction
strategies in future project delivery.
Cedar Woods launches Eglinton Community
Energy Sharing Network
At Eglinton Village (WA), the Company will host
the first Community Energy Sharing Network in
Western Australia.
This initiative, facilitated by licensed electricity
provider Eglinton Village Energy (a subsidiary of
Zenith Energy), will give households the option to
communally store and share renewable energy to
power their homes via rooftop solar panels and a
community battery. With no upfront or ongoing
maintenance costs, buyers will pay 20% less for their
electricity consumption and reduce their carbon
footprint by using at least 50% solar energy. The
Company is committed to planning for tomorrow and
delivering long-term environmental and social
benefits through such initiatives, which are well
aligned to its broader ESG strategy.
Annual Report 2023 25
Environmental Regeneration
Ellendale (QLD) saw continuation of revegetation
320 nesting boxes and 120 metres of fauna
works, where over 40% of the project site is
underpasses.
reserved for open space and retained natural
bushland. Almost 60 hectares of green space has
already been dedicated to Brisbane City Council
including restored habitat, wildlife corridors and
ecological buffers, including the relocation of
Bushmead (WA) saw continuation of revegetation
works, including stream restoration, protection area
management and revegetation, with approximately
59,300 seedlings planted during the year.
native plants and planting of more than 180,000
The Company has maintained compliance with
new trees, shrubs and ground covers. Wildlife
Commonwealth and State environmental approvals
infrastructure and linkages have also been
for all projects throughout their delivery, with annual
established, including 64 squirrel glider poles,
compliance audits completed.
Site revegetation at Bushmead
Before
After
Sustainable Buildings
The Company’s longstanding commitment to
environmental and social responsibility is reflected
with many projects incorporating sustainable
housing and communities. We recognise that our
customers are becoming more environmentally
conscious and are increasingly expecting energy
efficient features in their homes. Ultimately, it’s
important to them that we reduce ongoing costs and
lessen our impacts on the environment. Monarch
Apartments (SA), located in Cedar Woods’
Glenside estate, was strategically designed with
this growing purchaser preference front of mind.
The 49 apartments achieved a 7.7 star Nationwide
House Energy Scheme (NatHERS) energy rating.
The NatHERS rating categorises this apartment in
the top 35% of energy efficient apartment buildings
across Australia (CSIRO) 2022).
26 Cedar Woods Properties Limited
3. OUR ESG APPROACH
ESG approach
Response /
policies
Progress and outcomes in FY2023
3.1 Governance Governance
Framework
The Board is committed to the highest standards of corporate governance, details
of which may be found in the 2023 Corporate Governance Statement at
www.cedarwoods.com.au/Our-Company/Governance.
3.1.1 Effective
leadership
Board &
Committees,
Executive Team
3.1.2 Risk
management
Risk Management
Framework
The Board has two committees which oversee ESG priorities:
The Audit and Risk Management Committee is responsible for financial
reporting, risk management (including ‘ESG risks’) and external audit;
The Remuneration and Nominations Committee is responsible for matters
relating to Board composition, human resources, remuneration (including ESG
link to incentives for executives), succession, inclusion and diversity.
The Company’s management is structured for 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.
The 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.
The Board conducts regular reviews of the risk management framework structure,
with the last performed in FY2023.
3.1.3 Cyber security Cyber security
strategy, IT
security policy
Cedar Woods places the highest priority on the security and confidentiality of our customer
and company data.
In FY2023, the Company conducted supply chain reviews, external penetration
testing and a comprehensive internal review with strong positive results.
3.1.4 Ethics &
Policies
Code of Conduct
and corporate
policies
The Code of Conduct is a comprehensive set of standards of conduct expected of
all employees, including Directors. The Company has zero tolerance for corrupt
practices and has a proactive approach to ethics and accountability throughout its
policies and practices. The Board has oversight of ethics and culture.
A list of the Company’s published policies are in the appendix and details can be
found on our website at www.cedarwoods.com.au/Our-Company/Governance
3.1.5 Shareholder
value
Shareholder
returns
Returns to shareholders are detailed in the ‘Financial Performance Highlights’ on
page 8 of the annual report.
Shareholder &
Investor facing
policies
In November 2022 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.
3.1.6 Funding
Equity and debt
funding
The Company maintains a corporate finance facility provided by 3 of the ‘Big-4’
banks. During FY2023 the term was extended to 30 January 2026 for the 3-year
facility ($264m) and to 30 January 2028 for the 5-year facility ($66m).
Capital
partnerships
Cedar Woods has established a capital partnering strategy for certain projects
which has the following benefits:
Ability to expand into additional projects
Managing risk exposure
Builds development management capability
Diversifies sources of finance
Learnings gained from capital partners
In early 2023 Cedar Woods established a capital partnership with Tokyo Gas Real
Estate Australia Pty Ltd (TGRE) to develop Banksia Apartments at Glenside, SA. A
joint venture was also entered into (subject to conditions precedent) with QIC Real
Estate to jointly develop land owned by QIC adjacent to Robina Town Centre in
SEQ.
Annual Report 2023 27
ESG approach
Response /
policies
Progress and outcomes in FY2023
3.2
Land
Pipeline of projects The Company’s project portfolio is a key asset. The Company continues to
invest into its project pipeline providing capacity and visibility on future earnings
and returns to shareholders.
3.2.1
Investment
in pipeline
Acquisitions
strategy
incorporates ESG
objectives
The Company has developed a strategy to guide its acquisition program
and achieve its objective of targeting properties that meet a range of
financial, urban planning and environmental requirements, prioritising
transit-oriented development opportunities, enabling the creation of
sustainable communities.
During the year the Company extended its land holding at Henley Brook, WA
with the acquisition of land which will yield a further 42 lots and finalised the
acquisition of 39.7 ha at Fieldstone, Vic, expected to yield over 500 lots.
3.2.2 Product
diversity
Diversity by
geography, product
& price point
The Company offers a range of housing choices diversified by geography,
product type and price point, so that it continues to perform well in a range of
market conditions. In the current product range there are land lots, townhouses,
apartments and commercial units, ranging in price from $135,000 to
$1,995,000.
3.2.3 Product value
and innovation
Accommodative
designs and
energy efficiency
During FY23 the Company launched a new concept in over-55 living with
the Bloom apartments in Adelaide. Bloom is designed to incorporate the
amenities and features to support freedom and choice in retirement. The
homes remain 100% owned by residents, meaning all capital growth is
retained by the purchaser. Stage 1 of 59 apartments is over 80% sold.
In WA, Cedar Woods launched Eglinton Village. This modern coastal
community will eventually be home to 1,200 families and incorporates a
leading - edge Community Energy Sharing Network, leading to greater
energy efficiency and security.
3.3 People
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.
3.3.1 People
development
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.
During FY2023 management focused on the ‘Employee Value Proposition’
(EVP) and introduced additional training, career development, HR capability
and employee benefits with a view to strengthening the Company’s EVP in
the highly competitive jobs market and assisting in staff retention.
3.3.2 Opportunity,
diversity &
inclusion
Equal Opportunity
Policy in place
We are committed to a positive, diverse and inclusive workplace which
encourages strong and productive relationships and provides access to
equal opportunity at work.
28 Cedar Woods Properties Limited
ESG approach
Response /
policies
3.3.2 Opportunity,
diversity &
inclusion
Diversity &
Inclusion Policy in
place
Progress and outcomes in FY2023
We have 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.
The proportion of women employees currently sits at 49%. The number of
women in senior management is currently at 35%. The number of women on
the Board is two out of six, or 33%. The Company continues to implement
recruitment and development strategies to increase the number of women in
the executive team, noting the low proportion of women in the development
industry and low rate of staff turnover in the team.
Gender diversity
3.3.3 Work, health &
safety
wellbeing
Occupational WHS
system
3.3.4 Employee
satisfaction
Employee
satisfaction surveys
3.4 Customers
Customer Service
function
3.4.1 Customer
Customer surveys
engagement
Senior management is accountable for the health and safety performance
across the Company’s portfolio of projects and targets zero reportable
incidents 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. There were no such incidents in
FY2023.
The Board receives regular reporting on the Company’s WHS risks and
performance and attends on-site briefings as part of WHS monitoring.
Audits are performed annually of the WHS compliance at state operations.
The Company promotes a strong health and safety culture with access to
mental health support services as part of its wellbeing program as well as
providing staff with other free health services. For further details go to
www.cedarwoods.com.au/Careers/Employee-Benefits
We undertake surveys to gauge staff satisfaction. This measure represents
the level of enthusiasm and connection staff have with the Company. It’s a
measure of how motivated and committed people are in the business.
Staff satisfaction is currently 81% which compares favourably with national
industry benchmarks. Only 5% of staff were dissatisfied, with 13% neutral.
Feedback from the survey will be used to improve retention, training, reward
and recognition programs.
Customers are at the centre of everything we do. Our Customer Service
function is set up to provide a high standard end-to-end experience through
the customer journey.
Customer engagement is driven through various physical and digital
platforms and our Customer Service function provides customers with
product guidance, assistance and issues resolution. The quality of customer
experience is measured by net promoter score (NPS) surveys conducted at
relevant projects during the year.
In FY2023 the average / collective NPS score was +5, indicating positive
customer experience across our projects. FY2023 NPS scores were
impacted by supply chain constraints and escalating costs which caused
the Company to cancel or delay delivery of projects in certain locations.
Annual Report 2023 29
ESG approach
3.4.2 Customer
inclusion
Response /
policies
Affordable dwellings,
Special Disability
Housing, Pathway to
Retirement
3.4.3 Digital
Digital strategy
transformation
3.5 Supply chain
Fair and ethical
procurement
3.5.1 Modern slavery Modern slavery
policy and
management
3.5.2 Contractor
Quality reviews
quality
3.5.3 Payment terms Supplier payment
monitoring
3.6 Communities
Community
Connection
3.6.1 Community
amenity
Activation &
sponsorship
3.6.2 Heritage
Protecting heritage
3.6.3 Culture
Traditional Owners
Action Plan
Progress and outcomes in FY23
We take an inclusive approach to our customers by offering a range of
products and price points. These products include offerings that meet
diverse community needs, including affordability, disability access and
transition to retirement. In FY2023, approx. 25% of homes/lots delivered
met our Affordable Price Point, relevant to the Capital City in which they
are located, meaning they are affordable to moderate income families. We
also provided 9 special disability accommodation units at Lincoln
Apartments and commenced sales of 59 Over-55’s units at the Bloom
Apartments.
Cedar Woods continues to advance its Digital Strategy, with a key focus on
digital marketing platforms, coupled with data enrichment services, that
have boosted the volume and quality of sales enquiries.
All the Company’s sales contracts are exchanged electronically, with
system improvements further increasing the efficiency of the sale to
settlement process.
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 decisions on innovation and cost efficiency, while
maintaining quality outcomes.
Our Modern Slavery Policy and risk management system addresses our
approach to identifying modern slavery risk and steps for mitigating
modern slavery and human trafficking in our operations. Our Modern
Slavery policy and latest Modern Slavery Statement are available at
www.cedarwoods.com.au/Our-Company/Governance.
Our latest report indicated no incidents of slavery were evident in the
Company’s supply chain or operations.
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.
We also support the payment of our suppliers on fair payment terms.
Based on the Company’s 2023 Payment Times Reporting 95.6% of our
suppliers were paid within 30 days compared to 78.7% for the Land
Development & Subdivision Group on the PTRS public register.
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.
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.
In FY2023 we donated $55,000 to local community groups connected to
the districts in which we operate.
Often, we inherit a legacy from older communities, in the form or land or
buildings with indigenous or cultural heritage significance. We maintain a
strong track record of respecting heritage through restoration, recognition,
project themes and branding. In FY2023 the historic convent at Greville
was repurposed for a childcare facility and the laundry converted to a sales
centre, which will ultimately be converted to housing.
During FY2023 the Diversity & Inclusion Committee established a
Traditional Owners Action Plan with four pillars, to guide staff in
Acknowledgment of Country protocols, engagement with Traditional
Owners, developing a framework for recognising and incorporating
Traditional Owner history and culture at company projects and providing
for understanding, education and cultural awareness.
30 Cedar Woods Properties Limited
ESG approach
3.6.4 Social
responsibility
Response /
policies
Our Broader
Community – The
Smith Family
Partnership
3.7 Environment
and climate
change
Environmental and
climate change policy
3.7.1 Governance
Audit and Risk
Management Committee
Remuneration and
Nominations Committee
ESG / Climate Leads
Committee
Balanced Scorecard
3.7.2 Strategy
3.7.3 Risk
Management
The company’s ESG
strategy identifies
climate- related risks
and opportunities; and
the impact of climate-
related risks and
opportunities on the
company’s business
and strategy.
Risk Management
Framework / Risk
Register
3.7.4 Metrics and
Targets
ESG Strategy
Progress and outcomes in FY23
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.
The Company has a track record of environmental excellence across its
projects, reflected by numerous national and state industry awards won for
its projects. The Company continues to deliver strong environmental
performance, through its ESG Strategy, as well as expanding this to
address climate considerations. Past ESG reports can be found on our
Sustainability webpage www.cedarwoods.com.au/Our-
Company/Sustainability_. The Environmental management and climate
change policy is available at www.cedarwoods.com.au/Our-
Company/Governance
Priorities and targets relating to climate-related risks and opportunities are
detailed in the company’s ESG Strategy.
There are two principal Board Committees which oversee a range of ESG
priorities:
Audit and Risk Management Committee (see Risk Management)
Remuneration and Nominations Committee. ESG priorities, including
climate considerations, extend to senior executive accountability and
performance (key performance indicators), tied to remuneration.
Board oversight is provided through its Balanced Scorecard, which includes
ESG Performance including climate considerations.
At management level, the national ESG/Climate Leads Committee provides
coordination of climate-related deliverables across each project state. This
Committee is chaired by the company’s Chief Operating Officer and
facilitated by the Company Secretary and Director of Sustainability.
The Company’s ESG Strategy outlines significant climate related risks and
opportunities which have potential to affect its business model, strategy,
cash-flow, access to finance and cost of capital.
Continuing to execute the company’s ESG Strategy, which provides the
framework to transition to lower carbon emissions (both operational and
project-based), ensures new projects are resilient to physical climate
change risks, and that we are on track in for an orderly transition to a low
carbon economy.
We assess climate-related risk within the company’s risk management
framework
The Company’s Risk Management Framework aims to drive consistency in
the identification, assessment, management, mitigation and monitoring of
risk to the business.
Decision making is guided by comprehensive risk management, together
with risk mitigation strategies, where necessary.
Metrics used to assess climate-related risks and opportunities, in line with
our ESG Strategy and risk management process are disclosed in our
Climate-Related Metrics & Targets at www.cedarwoods.com.au/Our-
Company/Sustainability_
The results of our 2023 carbon footprint mapping are shown in the results
box on page 32. The metrics, targets and FY23 progress for our
Greenhouse Gas emissions are presented in our Climate-Related Metrics
& Targets at www.cedarwoods.com.au/Our-Company/Sustainability_
Annual Report 2023 31
FY2023 net Greenhouse Gas Emissions (t-CO2-e)
Corporate operations
Scope 1 & 2*
Scope 3#
State offices
Sales offices
Shopping centre
41
29
437
507
856
183
432
1,471
Total
897
212
869
1,978
* Direct emissions from refrigerants and from the generation of purchased electricity
# Other emissions outside scope 1 and 2 such as water use, waste generation, purchased goods and air travel.
Emissions calculated by independent consultants from company data. Further details are in the climate report at
www.cedarwoods.com.au/Our-Company/Sustainability_
32 Cedar Woods Properties Limited
Fletchers Slip, Port Adelaide SA
4. KEY ACTIVITIES FOR FY2024
Our key activities over the next 12 months are:
Governance and funding
Funding
Maintain our corporate lines of credit with the major banks.
Continue to execute on capital partnership strategy in new projects
Cyber security
Continue to improve our cyber security posture through continued user
education and improving preventative technical controls.
Digital Transformation
Execute digital projects that will optimise systems integrations under a single
platform, providing robust data exchange, better, more timely reporting and
increased automation.
Land
Investment in pipeline
Continue to invest in our project pipeline in accordance with our acquisition
strategy and in capital partnerships and joint ventures with our partners.
Product innovation
Continue to innovate in the areas of Special Disability Accommodation, Over-
55s retirement and affordable housing. Energy efficiency will continue to be
pursued in our residential and commercial projects.
People
Continue to attract, engage and retain a high-performance work force. We will
refresh our careers page on our website, improve our induction program and
benchmark the range of benefits provided to staff. Staff development will be
enhanced by broadening the range of on-line learning available. We will
improve our goal - setting and performance management techniques.
Customers
Implement programs to enhance customer experience and improve resources
available to customers and builders on our websites.
Supply chain
Continue to work with our key suppliers to monitor ongoing work, health and
safety compliance, financial health, cyber resilience, modern slavery risk
management, quality of product and value for money.
Communities
Maintain our sponsorship of The Smith Family and reach out to assist our local
communities with further investment in our community grants program.
Environment and climate
Carbon Reduction
Continue to implement our carbon reduction plan to reduce our carbon footprint.
In FY2024, in conjunction with UDIA and other industry stakeholders we plan to
finalise the methodology to measure the carbon footprint of creating a land
subdivision and assess its viability.
Annual Report 2023 33
5. CHARTERS AND POLICY LIST
Charters
Download
Download
Download
Audit and Risk Management Committee Charter
Board Charter
Remuneration and Nominations Committee Charter
Policies
Anti-Bribery and Corruption Policy
Conflicts of Interest Policy
Continuous Disclosure Policy
Diversity and Inclusion Policy
Environmental Management and Climate Change Policy
Investor Communications
Modern Slavery Policy
Performance Evaluation Policies
Primary Objectives and Company Code of Conduct
Privacy Policy
Risk Management Policy and Internal Compliance
Securities Trading Policy
Whistleblower Policy
Corporate Governance Statement
Download
Appendix 4G and Corporate Governance Statement
34 Cedar Woods Properties Limited
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 2023.
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
36 to 38 of this report.
b. Principal activities
The principal continuing activities of the consolidated entity over the course of the year ended 30 June 2023 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 2022 of 14.5 cents
(2021 – 13.5 cents) per fully paid share, paid on 28 October 2022 (2021 – 29 October 2021)
Interim fully franked ordinary dividend for the year ended 30 June 2023 of 13.0 cents
(2022 – 13.0 cents) per fully paid share, paid on 28 April 2023 (2022 – 29 April 2022)
2023
$’000
2022
$’000
11,921
10,756
10,687
10,677
22,608
21,433
Since the end of the financial year the directors have recommended the payment of a final fully franked ordinary
dividend of 7.0 cents (2022 - 14.5 cents per share) to be paid on 27 October 2023 out of retained profits at 30
June 2023.
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 FY2024 with strong pre-sales, modest debt, substantial funding
capacity and a diverse portfolio of well-located developments.
Annual Report 2023 35
f. Significant changes in the state of affairs
There were no significant changes in the state of affairs of the consolidated entity during the year.
g. Matters subsequent to the end of the financial year
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 2023 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.
i. Environmental regulation
To the best of the directors’ knowledge, the group complies with the requirements of environmental legislation in
respect of its developments and obtains the planning approvals required prior to clearing or development of land
under the laws of the relevant states. There have been no instances of non-compliance during the year and up to
the date of this report.
j.
Information on directors
Mr William G Hames, B Arch (Hons) MCU (Harvard) LFRAIA, MPIA, FAPI (Econ)
Chairman of the Board of directors, non-executive director
Mr Hames was appointed on 23 March 1990 and brings substantial property experience to the Board. 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.
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 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.
Other current listed company directorships and former listed company directorships in the last three years:
None.
36 Cedar Woods Properties Limited
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 EVT 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:
EVT 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, Perth and New York.
She is Managing Director of Lenox Hill, a digital strategy and advisory firm and is a non-executive director of
Australian Finance Group Limited (AFG), the Telethon Kids Institute and Chair of Healthdirect Australia. Mrs
Muirsmith has substantial experience serving on and chairing the audit, risk and compliance committees in the
above companies.
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 Head of Corporate Finance with Lendlease Corporation. Mr Say currently chairs the boards
of Mirvac Wholesale Office Fund and Cameron Brae Group and sits on the board of Women’s Community
Shelters.
Annual Report 2023 37
Mr Say is a qualified property valuer and 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 has substantial experience serving on risk management committees and holds strong
networks across the property and finance sectors.
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 thirty
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
2 November 2022
26,409
zero
30 June 2025
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 2023 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
3 November 2021
Issue Price of Shares
Number of shares issued
$5.40
32,182
38 Cedar Woods Properties Limited
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
167,885
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)
V A Davies (Chair)
P G Say
V A Davies
n. Meetings of directors
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 2023, 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
12
11
12
*Not a member of this committee
5
-*
-*
5
5
5
5*
6
4*
3*
6
6
6
6*
Annual Report 2023 39
DIRECTORS’ REPORT: LETTER TO SHAREHOLDERS FROM THE CHAIR OF
THE REMUNERATION & NOMINATIONS COMMITTEE (THE COMMITTEE)
Dear Shareholders,
FY2023 has seen changes to the remuneration landscape as the broad economy responds to the challenges
presented by post pandemic disruptions, higher inflation, global increases in interest rates and continued
competition for talent. In the Financial and Operating Review section we detail how Cedar Woods’ operations
have performed in this environment and how these influences are reflected in the executive remuneration ‘at-risk’
pay outcomes in section r) of this report.
In seeking to align shareholders’ expectations regarding incentives, pay and performance, we continue to engage
with shareholders and proxy advisers to ensure best practice with all our stakeholders. Please find below the
main remuneration outcomes for the year and further details are provided in the Remuneration Report.
Review of the
executive
remuneration
framework
Fixed
remuneration
Short-term
incentives
(“STIs”)
Long-term
incentives
(“LTIs”)
In FY2023, assisted by external independent consultants, the Committee reviewed 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, while Boards are looking to show restraint in remuneration outcomes in the face of
an inflationary economy.
For FY2023 the Managing Director’s (MD’s) fixed remuneration was increased by a moderate 4.4%
over the previous year, with similar increases for the other executives, the Committee taking the view
that this was appropriate given the circumstances prevailing as noted above.
The FY2023 STI opportunity for the Managing Director, which is based on a percentage of fixed
remuneration, was therefore also increased proportionately, with moderate increases for the other
executives. The Company balanced scorecard that determines STI awards, underwent minimal
changes in FY2023. 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 two vesting conditions: a) a three year
service condition and b) two performance conditions measured over a three year period: 50% 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% against earnings per share (“EPS”) growth targets, set in
the context of the corporate strategy.
The relative TSR performance condition was chosen, as it offers a means of measuring changes in
shareholder value, by comparing the Company’s return to shareholders against the returns of
companies of a similar size and investment profile. The EPS performance condition was chosen, as it is
a primary determinant of shareholder value, in a listed company context.
Non-Executive
Director (“NED”)
fees
The potential maximum aggregate NED remuneration for FY2023 was $750,000, as approved by
shareholders at the FY2014 AGM. Chair and NED fees were increased for CPI in FY2023 having been
fixed at the previous level since FY2021. Total NED fees paid for FY2023 were $681,000.
It was pleasing to note that shareholders voted overwhelmingly in favour of the FY2022 Remuneration Report at
the 2022 Annual General Meeting, with 97.9% of votes cast in favour.
I look forward to answering any questions you may have at our 2023 Annual General Meeting on 1 November.
Yours faithfully,
Valerie A Davies
Chair - Remuneration and Nominations Committee
40 Cedar Woods Properties Limited
DIRECTORS’ REPORT: REMUNERATION REPORT
The directors present Cedar Woods’ FY2023 Remuneration Report which sets out remuneration information for
the directors and other key management personnel (“KMP”) for the year ended 30 June 2023.
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 2023. 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
Term as KMP
Non-Executive Directors (“NEDs”)
W G Hames
R S Brown
V A Davies
J M Muirsmith
P G Say
Executive Director
Non-Executive Chair
Non-Executive Deputy Chair
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Full year
Full year
Full year
Full year
Full year
N J Blackburne
Managing Director (“MD”)
Full year
Senior Executives
P Archer
L M Hanrahan
Changes since last year
Chief Operating Officer (“COO”)
Chief Financial Officer (“CFO”)
Full year
Full year
The Company has considered the nature of the Company Secretary role and concluded that from 1 July 2022 it
no longer involved sufficient authority and responsibility to meet the criteria for KMP.
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.
Annual Report 2023 41
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:
remuneration levels of the MD and other executives;
the over-arching executive remuneration framework;
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 2023, 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 FY2022 Annual General Meeting (“AGM”)
At the 2022 AGM, 97.9% of eligible votes cast were in favour of the FY2022 Remuneration Report.
42 Cedar Woods Properties Limited
q. Executive remuneration policy and framework
The information contained within this section outlines the details pertaining to the executive remuneration policy
and framework for FY2023.
(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
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:
Transparency of the link between performance and
STIs (cash & deferred) linked to current year performance
reward
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 Composition
Purpose
Link to performance
n
o
i
t
a
r
e
n
u
m
e
r
l
a
t
o
T
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
No guaranteed fixed remuneration
increases are included in executives’
contracts
Fixed remuneration may be phased
to market benchmark for new
appointments, conditional on
performance
STIs
Paid in cash, net of tax
Rewards executives for their
contribution to achievement of
company outcomes
Linked to the Corporate Plan and
achievement of personal objectives
established at the start of the year
LTIs
Equity based STI
grants awarded in
Zero-price options
Equity based LTI
grants awarded in
Performance Rights
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
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).
Annual Report 2023 43
(ii)
Approach to setting remuneration
The Company aims to reward executives with a level and mix of remuneration appropriate to their position,
responsibilities and performance within the company and aligned with market practice.
The approach is generally to position total remuneration competitively, 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 FY2024 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 FY2023.
Managing Director
37%
20%
10%
33%
COO
50%
27%
23%
CFO
55%
27%
18%
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.
44 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?
What STI’s are
available and what are
the performance
conditions?
In FY23 65% (FY22 – 65%) of the STI was deliverable in cash and 35% (FY22 – 35%) 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.
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 FY2023 below.
Subject to Board discretion, in order for any STI to be payable, the following hurdle (trigger)
must be achieved:
Safety trigger: No reportable incident resulting in serious injury under the relevant
Occupational Health & Safety Act in CWP premises or sites as a result of failure of the
company’s Work, Health & Safety system.
A performance rating of up to 150% of the STI opportunity is available to reward personal
performance when it exceeds expectations, at the Board’s discretion.
How is performance
assessed?
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.
What happens in the
event of change of
control
If a Change of Control Event occurs prior to the vesting of an award, unless the Board
determines otherwise, a pro-rata number of the MD’s unvested awards will vest immediately
based on the proportion of the period that has passed at the time of the relevant change of
control event, and the extent to which any applicable performance conditions have been
satisfied (or are estimated to have been satisfied) at that time, unless the change of control
event occurs after the end of the performance period (the first year), in which case full vesting of
unvested awards will occur, to the extent to which any applicable performance conditions have
been satisfied (or are estimated to have been satisfied) at that time.
Other executives
How is the STI
delivered?
Cash
What STI’s are
available and what are
the performance
conditions?
Each executive has a target STI opportunity depending on the accountabilities of the role and
impact on company performance.
The STI plan provides as follows:
a) Up to 50% of the STI 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 STI is 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 FY2023 below.
In order for any STI to be payable under the company component, the same hurdle (safety
trigger) that applies for the MD (see above) must be achieved.
How is performance
assessed?
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.
What happens if an
Executive leaves
Cedar Woods?
Executives who resign prior to the end of the financial year generally forego their STI
entitlement. The Board has discretion in this regard.
Annual Report 2023 45
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 during the performance period, the following treatment
will apply in respect of unvested rights:
If the participant ceases employment with Cedar Woods due to resignation or
termination for cause, unvested rights will normally be forfeited.
If the participant ceases employment in other circumstances (for example, due to
illness, total or permanent disablement, retirement, redundancy or other
circumstances determined by the Board), unvested rights will stay ‘on foot’ and may
vest at the end of the original performance period to the extent performance conditions
are met. The Board may determine that the number of rights available to vest will be
reduced pro-rata for time at the date employment ceases.
The Board will retain discretion to allow for accelerated vesting (pro-rated for performance
and/or time) in special circumstances (as opposed to allowing unvested rights to remain ‘on
foot’ on cessation of employment).
What happens in the event of
change of control
Unless the Board determines otherwise, a pro-rata number of the participant’s unvested
rights will vest based on the proportion of the performance period that has passed at the
time of the change of control. Vesting will also be subject to the achievement of pro-rata
performance conditions at the time of the change of control.
Do participants receive
dividends on LTI grants?
No dividends are paid on unvested LTI awards.
Can a participant deal with or
trade their performance
rights before vesting?
No.
46 Cedar Woods Properties Limited
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 as 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 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 recognises significant out-
performance of the company over 3 years.
The vesting schedule for the FY23 plan was as follows:
Relative TSR performance outcome
Percentage of TSR-tested rights vesting
< Index
At the Index
Nil
50%
> Index and up to 5% above the Index
Pro-rata between 50% and 100%
> = 5% above the Index
100%
The vesting schedule for the FY22 plan 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: 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 FY23 Plan was as follows:
EPS compound annual growth rate
Percentage of EPS-tested rights vesting
<5%
5%
Between 5% - 15%
> = 15%
Nil
50%
Pro-rata between 50% and 100%
100%
Annual Report 2023 47
The vesting schedule for this component of the LTI in the FY22 Plan was as follows:
EPS compound annual growth rate
EPS compound annual growth rate
Percentage of EPS-tested rights vesting
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 TSR and EPS target ranges were modified for the FY23 plan in view of the more challenging economic
outlook, following the initial rebound after the first year of the pandemic.
r. Executive remuneration outcomes for FY2023 (including link to performance)
Performance against STI balanced scorecard objectives
The table below provides a summary of the FY2023 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
Weighting
Metrics
Financial Strength
Annual performance and balance sheet
strength
Net Profit After Tax (NPAT)
Number of settlements
Revenue
50%
Return on Equity
Return on Capital
Earnings Growth
Measures of future financial health of the
Company
Operational Excellence
Measures of customer and investor
satisfaction, risk management, compliance
and sustainability
20%
20%
Borrowing ratios and facility terms
Cost reductions
Value of presales
New projects acquired
Customer net promoter scores
Investor perceptions
ESG Performance (link to sustainability & climate change)
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 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 FY2023 and the maximum STI that was available.
48 Cedar Woods Properties Limited
Total earned $
Total earned of target %
Total forfeited of target %
Total forfeited of target $
Target STI opportunity $
Total earned of maximum %
Total forfeited of maximum %
Total forfeited of maximum $
Maximum STI opportunity $
Proportion of STI earned and forfeited in FY2023
MD
347,600
79%
21%
92,400
440,000
53%
47%
312,400
660,000
COO
157,000
79%
21%
43,000
200,000
63%
37%
93,000
250,000
CFO
117,750
79%
21%
32,250
150,000
63%
37%
69,750
187,500
For the Managing Director, 65% of the STI earned is payable in cash ($225,940) and 35% of the STI earned
($121,660) was deferred into zero price options under the DSTI plan. For the other executives the STI is payable
in cash.
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:
Grant
date
Number of
options
Performance
period
Service
period
Vesting
date
Performance
hurdle
Value per
option at
grant date
%
Vested
TBA
TBA
1/7/22 to
1/7/22 to
31/8/2024
30/6/23
30/6/24
Balanced
scorecard score
$TBA
N/A
Incentive
Plan
FY2023 –
Managing
Director
FY2022 –
2/11/2022
26,409
1/7/21 to
1/7/21 to
31/8/2023
Managing
Director
30/6/22
30/6/23
Balanced
scorecard score
$3.99
N/A
FY2021 –
3/11/2021
32,182
Managing
Director
1/7/20 to
30/6/21
1/7/20 to
31/8/2022
30/6/22
Balanced
scorecard score
$5.69
100
The FY2023 grant of options to the Managing Director under the DSTI is subject to shareholder approval at the
2023 AGM.
During the year 32,182 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 3 November 2021. No further
shares have been issued since that date.
Annual Report 2023 49
Performance against LTI objectives
The following table shows the maximum LTI opportunities that were granted to KMP during FY2023.
LTI awards in FY2023
MD
COO
CFO
Value granted (max LTI opportunity) $
720,000
212,100
130,000
The LTI awards earned will vest on 31 August 2025 subject to the vesting conditions.
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
FY2020 -
24/09/2019
1/7/19 to
31/08/2022
$5.71
EPS Growth
Executives
30/6/22
Relative TSR
FY2020 -
6/11/2019
1/7/19 to
31/08/2022
$5.71
EPS Growth
MD
30/6/22
Relative TSR
FY2021 -
27/08/2020
1/7/20 to
31/08/2023
$5.40
EPS Growth
Executives
30/6/23
Relative TSR
FY2021 -
4/11/2020
1/7/20 to
31/08/2023
$5.40
EPS Growth
MD
FY2022 -
27/08/2021
Executives
FY2022 -
3/11/2021
MD
FY2023 -
26/08/2022
Executives
FY2023 -
2/11/2022
MD
30/6/23
1/7/21 to
30/6/24
1/7/21 to
30/6/24
1/7/22 to
30/6/25
1/7/22 to
30/6/25
Relative TSR
31/08/2024
$6.70
EPS Growth
Relative TSR
31/08/2024
$6.70
EPS Growth
Relative TSR
31/08/2025
$3.83
EPS Growth
Relative TSR
31/08/2025
$3.83
EPS Growth
Relative TSR
$6.17
$4.45
$6.18
$4.51
$4.59
$2.37
$5.07
$2.92
$5.83
$3.18
$5.20
$2.36
$3.87
$2.61
$3.58
$2.35
No
No
No
No
Partial
Partial
Partial
Partial
to be
determined
to be
determined
to be
determined
to be
determined
Nil
Nil
60.2%
60.2%
n/a
n/a
n/a
n/a
The number of share rights granted to key management personnel under the LTI scheme during FY2023 is
shown in the table below. The number of rights granted has been determined by dividing the FY2023 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 FY2023 ($3.83). 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.
50 Cedar Woods Properties Limited
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.
Name & grant
dates
Balance at
start of year
Number
Granted
during year
Number
Vested
Number
Vested
%
Forfeited
Number
Forfeited
%
Balance at end of
year (unvested)
Number
Max.
value yet
to vest *
Executive director
N J Blackburne
2 Nov 2022**
-
187,989
3 Nov 2021**
102,895
4 Nov 2020**
127,666
6 Nov 2019**
120,735
-
-
-
Senior executives
P Archer
26 Aug 2022
-
55,378
27 Aug 2021
31,656
27 Aug 2020
39,277
24 Sep 2019
37,145
L M Hanrahan
-
-
-
26 Aug 2022
-
33,942
27 Aug 2021
17,910
27 Aug 2020
22,222
24 Sep 2019
21,015
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
187,989
$220.887
102,895
$121,416
127,666
$386,702
120,735
100
-
-
-
-
-
-
-
-
55,378
$72,268
31,656
$50,333
39,277
$102,335
37,145
100
-
-
-
-
-
-
-
-
33,942
$44,294
17,910
$28,477
22,222
$57,899
21,015
100
-
-
* The LTI awards granted in FY2023 vest on 31 August 2025 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.
Annual Report 2023 51
Performance of shareholder return metrics
In FY2023, the Company delivered a profit of $31.6 million, a decrease of 15 per cent over the prior year.
The returns to shareholders of Cedar Woods over the last 1, 3 and 5 years are detailed in the table below:
Returns to shareholders over 1, 3 and 5 years (%, annualised)
1 year
3 years
5 years
EPS growth
Share price growth
Dividend growth (declared dividend)
Dividend growth (paid dividend)
CWP TSR (change in share price and dividends)
(15.8)
36.7
(27.3)
3.8
46.1
14.9
(1.4)
1.7
1.9
3.5
S&P Small Industrials Index (XSIAI) TSR
9.5
3.4
(6.5)
(2.8)
(7.8)
(1.7)
2.6
1.7
The total shareholder return in FY2023 was 46.1 per cent which outperformed the S&P Small Industrials Index
total return of 9.5 per cent over the same period. The returns over 3 & 5 years also outperformed the S&P Small
Industrials Index.
Management is focused on delivering consistent earnings per share and dividend growth. The company’s share
price is subject to market factors that are beyond the Company’s control. The measures of the company’s
financial performance over the last five years as required by the Corporations Act 2001 are shown in the table
below. However, these are not necessarily consistent with the measures used in determining the variable
amounts of remuneration awarded to KMP, the basis for which is outlined above. As a consequence, there may
not always be a direct correlation between the statutory key performance measures and the variable
remuneration awarded.
2023
2022
2021
2020
2019
Profit for the year ($’000)
31,634
37,388
32,834
20,387
48,644
Basic earnings per share (cents)
Dividends per share (cents)
Increase (decrease) in share price (%)
38.5
20.0
36.7
45.7
27.5
(45.2)
40.7
26.5
28.1
25.4
19.0
(8.1)
60.9
31.5
(1.0)
Executive remuneration for the years ended 30 June 2023 and 30 June 2022
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 49 and 50, 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.
52 Cedar Woods Properties Limited
Remuneration expenses for executive KMP
Details of the remuneration of each executive KMP of Cedar Woods, in accordance with accounting standards, is set out below.
Name
Financial
year
Short-term
benefits
Cash bonus $
Cash salary
and fees $
Non-monetary
benefits $
Post
employment
Super-
annuation $
Long term benefits
Share based
payment # $
Long Service
Leave $
Performance
related
Total $
%
Executive Director
N J Blackburne
Other KMP
P Archer
L M Hanrahan
2023
2022
2023
2022
2023
2022
766,740
733,280
225,940
328,614
424,708
406,432
347,684
322,500
157,000
145,125
117,750
95,625
P S Freedman *
2022
160,454
46,250
Total
2023
2022
1,539,132
1,622,666
500,690
615,614
11,975
11,516
5,681
5,381
7,318
7,000
550
24,974
24,447
27,500
27,386
25,292
23,568
27,316
27,500
25,892
80,108
104,346
306,030
405,104
56,825
91,190
33,285
51,459
12,533
396,140
560,286
24,715
12,682
1,362,900
1,518,582
12,485
8,289
11,430
13,433
681,991
679,985
544,783
517,517
4,658
250,337
48,630
39,062
2,589,674
2,966,421
39%
48%
31%
35%
28%
28%
23%
# Equity-settled share-based payments relate to the component of the fair value of awards from the 2020, 2021, 2022 and 2023 LTI plans and 2022 and 2023 DSTI plans attributable to the year
measured in accordance with AASB 2 Share Based Payments. Comparatives have been restated to ensure consistency with the disclosure requirements of AASB2.
Cash salary and fees include annual leave accrual.
* The Company Secretary role no longer met the criteria for KMP from 1 July 2022 as noted in section (o) on page 41 of this report.
Annual Report 2023 53
Remuneration received by executive KMP
The remuneration illustrated in the table below has been provided as additional non-statutory information to assist in understanding the total value of remuneration (take home
remuneration) received by executive KMP in the current and prior financial years. The value of equity in this section is calculated in a different way to the statutory disclosure in
the previous table.
Name
Financial
year
Cash salary and
fees $
*Short-term
benefits
Cash bonus $
Post
employment
Non-monetary
benefits $
Super-
annuation $
Share based
payment vested #
$
Long term
benefits
Long Service
Leave $
Performance
related
Total $
%
Executive Director
N J Blackburne
Other KMP
P Archer
L M Hanrahan
P S Freedman **
Total
2023
2022
2023
2022
2023
2022
2022
2023
2022
766,740
733,280
225,940
328,614
424,708
406,432
347,684
322,500
160,454
1,539,132
1,622,666
157,000
145,125
117,750
95,625
46,250
500,690
615,614
11,975
11,516
5,681
5,381
7,318
7,000
550
24,974
24,447
27,500
27,386
146,428
207,594
24,715
12,682
1,203,298
1,321,072
25,292
23,568
27,316
27,500
25,892
80,108
104,346
-
36,533
-
17,395
-
146,428
261,522
12,485
8,289
11,430
13,433
4,658
48,630
39,062
625,166
625,328
511,498
483,453
237,804
2,339,962
2,667,657
31%
41%
25%
29%
23%
23%
19%
*The short-term benefits represent the cash bonuses that are awarded to each KMP in relation to FY2023 and which are paid in the following financial year.
# LTI vested is based on the market value of securities at the date of vesting. In FY2023, shares vested under the FY2020-FY2022 LTI plan and FY2021-FY2022 DSTI plan.
** The Company Secretary role no longer met the criteria for KMP from 1 July 2022 as noted in section (o) on page 41 of this report.
54 Cedar Woods Properties Limited
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 FY2023 was as follows:
Fixed remuneration of $800,000 per annum
Target STI opportunity of $440,000, Maximum STI opportunity of $660,000 (65% in cash, 35% in DSTI)
Target & Maximum LTI opportunity $720,000
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 FY2023 was
$681,000.
Fee policy
Annual fees for NEDs were last reviewed from FY2020 (effective date: 1 July 2019). The annual fees (inclusive of
superannuation) for FY2023 and FY2022 are set out in the table below:
Chair
Deputy Chair
Other NEDs
Committee Chair
Committee member
2023
$
2022
$
179,000
174,000
141,000
137,000
97,000
15,000
10,000
94,000
15,000
Nil
Annual Report 2023 55
NED remuneration for the years ended 30 June 2023 and 30 June 2022
The table below outlines fees paid to NEDs for FY2023 and FY2022 in accordance with statutory rules and
applicable accounting standards.
Name
W G Hames
R S Brown
V A Davies
J M Muirsmith
P G Say
Total
Short-term benefits
Post-employment
Financial
year
Board and
committee fees $
Superannuation $
Total $
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
161,991
158,182
127,602
124,545
110,407
99,091
110,407
99,091
105,882
85,455
616,289
566,364
17,009
15,818
13,398
12,455
11,593
9,909
11,593
9,909
11,118
8,545
64.711
56,636
179,000
174,000
141,000
137,000
122,000
109,000
122,000
109,000
117,000
94,000
681,000
623,000
u. Additional statutory disclosures
Equity instrument disclosures relating to KMP
The numbers of ordinary shares in the Company held during the financial year by each director and other KMP of
Cedar Woods, including their personally-related parties, are set out below.
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
2023
NEDs
W G Hames *
R S Brown
V A Davies
J M Muirsmith
P G Say
Executive director
11,009,512
7,621,633
26,000
21,914
34,832
-
-
-
-
-
2,212
11,011,724
-
-
-
-
-
-
-
7,621,633
26,000
21,914
34,832
167,885
46,740
18,438
N J Blackburne
135,703
32,182
Senior executives
P Archer
L M Hanrahan
46,740
18,438
-
-
* Includes 2,014,439 (2022 – 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.
56 Cedar Woods Properties Limited
Other transactions with key management personnel
Aggregate amounts of other transactions with key management personnel of Cedar Woods or their related
entities:
Amounts recognised as expense
Architectural fees
Settlement fees
Amounts recognised as inventory
Architectural fees
2023
$
2022
$
27,500
274,828
302,328
615,807
615,807
-
305,176
305,176
788,690
788,690
Total amounts recognised in year
918,135
1,093,866
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
615,807
615,807
788,690
788,690
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 lower 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, the Glenside project in Adelaide and the Eglinton project in WA. 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 FY2023 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 $116,417 was
payable to related entities Hames Sharley (SA) Pty Ltd at balance date. There are no other amounts payable to
related entities at balance date relating to the above types of other transactions.
Annual Report 2023 57
v.
Independent audit of remuneration report
The remuneration report has been audited by PricewaterhouseCoopers (PwC). See page 113 of this annual
financial report for PwC’s report on the remuneration report.
w. Retirement, election and continuation in office of directors
The constitution requires that no director (other than a managing director) may retain office (without re-election)
for more than three years or past the third annual general meeting following the director’s appointment.
JM Muirsmith and VA Davies retire at the forthcoming Annual General Meeting, and being eligible, offer
themselves for re-election.
58 Cedar Woods Properties Limited
x.
Insurance of officers
During the financial year, Cedar Woods paid a premium in respect of directors’ and officers’ liabilities that
indemnifies certain officers of the Company and its controlled entities. The officers of the company covered by the
insurance policy include the directors and the Company Secretary. The liabilities insured include costs and
expenses that may be incurred in defending civil or criminal proceedings that may be brought against the officers
in their capacity as officers of the Company and its controlled entities. The directors have not included more
specific details of the nature of the liabilities covered or the amount of the premium paid in respect of the policy,
as such disclosure is prohibited under the terms of the contract.
y. Non-audit services
The group may decide to employ the auditor on assignments additional to their statutory audit duties where the
auditor’s expertise and experience with the Company and/or group are important.
Details of the amounts paid or payable to the auditor for audit and non-audit services provided during the year are
set out in note 33 in the other information section of this report.
The Board of directors has considered the position and, in accordance with the advice received from the Audit
and Risk Management Committee, is satisfied that the provision of the non-audit services is compatible with the
general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied
that the provision of non-audit services by the auditor did not compromise the auditor independence requirements
of the Corporations Act 2001 for the following reasons:
All non-audit services have been reviewed by the Audit and Risk Management Committee to ensure they do not
impact the impartiality and objectivity of the auditor.
None of the services undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants.
z. Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001
forms part of this directors’ report and is set out on page 60.
aa. Rounding of amounts
The Company is of a kind referred to in ASIC Legislative Instrument 2016/191, relating to the ‘rounding off’ of
amounts in the directors’ report. Amounts in the directors’ report have been rounded off in accordance with the
instrument to the nearest thousand dollars, or in certain cases, to the nearest dollar.
The directors report including the remuneration report is signed in accordance with a resolution of the directors of
Cedar Woods.
N J Blackburne
Managing Director
22 August 2023
Annual Report 2023 59
AUDITOR’S INDEPENDENCE DECLARATION
60 Cedar Woods Properties Limited
FINANCIAL
STATEMENTS
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
For the Year Ended 30 June 2023
Consolidated Balance Sheet
As at 30 June 2023
Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2023
Consolidated Cash Flow Statement
For the Year Ended 30 June 2023
62
63
65
66
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 26.
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:
Level 4
50 Colin Street
WEST PERTH WA 6005.
The financial statements were authorised for issue by the directors on
22 August 2023. The directors have the power to amend and reissue
the financial statements.
Annual Report 2023 61
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
For the Year Ended 30 June 2023
Continuing operations
Revenue
Cost of sale of land and buildings
Cost of providing development services
Gross profit
Project operating costs
Administration expenses
Other expense
Other income
Operating profit
Finance costs
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
2023
$’000
2022
$’000
1(i)
391,303
333,036
(292,571)
(230,319)
(1,488)
(6,317)
97,244
96,400
(20,844)
(19,564)
(26,817)
(24,257)
(955)
1,159
-
1,481
49,787
54,060
2
(4,401)
(444)
45,386
53,616
(13,751)
(16,228)
31,635
37,388
3
19
31,635
37,388
31,635
37,388
4
4
38.5 cents
45.7 cents
38.0 cents
45.2 cents
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
62 Cedar Woods Properties Limited
CONSOLIDATED BALANCE SHEET
As at 30 June 2023
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Inventories
Deferred development costs
Other financial assets
Assets classified as held for sale
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
5
6
1(ii)
7
8
9
12(i)
6
7
1(ii)
9
10
11
13
14
9
1(ii)
15
14
9
15
16
2023
$’000
6,802
6,841
3,323
195,018
3,892
17
215,893
32,953
248,846
3,582
519,481
455
1,836
7,405
1,793
-
-
534,552
783,398
33,690
-
68,040
2,481
7,551
617
23,013
135,392
202,608
5,491
1,574
1,748
5,483
216,904
352,296
431,102
2022
*Restated
$’000
2,957
9,310
3,755
226,781
3,972
741
247,516
-
247,516
7,800
491,282
347
1,718
7,492
998
38,591
643
548,871
796,387
26,898
29,159
87,886
5,321
7,436
619
16,218
173,537
172,486
24,424
549
1,910
2,258
201,627
375,164
421,223
Annual Report 2023 63
CONSOLIDATED BALANCE SHEET (CONTINUED)
As at 30 June 2023
EQUITY
Contributed equity
Reserves
Retained profits
Total equity
Note
17
18
19
2023
$’000
137,795
1,742
291,565
431,102
2022
*Restated
$’000
137,333
1,815
282,075
421,223
*See note 15 for details regarding the restatement
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
64 Cedar Woods Properties Limited
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Year Ended 30 June 2023
Contributed
equity
$’000
Note
Retained
Reserves
$’000
profits
$’000
Total
$’000
133,119
1,305
265,937
400,361
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
17
19
25
Employee share scheme
17, 18
Balance at 30 June 2022
Balance at 1 July 2022
Profit for the year
Total comprehensive income for the year
Transactions with owners in their
capacity as owners:
Transfers from reserves to retained profits
Dividends provided for or paid
Employee share scheme
19
25
17, 18
-
-
3,984
-
-
230
4,214
-
-
-
(182)
37,388
37,388
37,388
37,388
-
182
3,984
-
-
(21,432)
(21,432)
692
510
-
922
(21,250)
(16,526)
137,333
1,815
282,075
421,223
137,333
1,815
282,075
421,223
-
-
-
-
-
-
31,635
31,635
31,635
31,635
(463)
463
-
-
(22,608)
(22,608)
462
462
390
(73)
-
852
(22,145)
(21,756)
Balance at 30 June 2023
137,795
1,742
291,565
431,102
The above consolidated statement of changes in equity should be read in conjunction with the accompanying
notes.
Annual Report 2023 65
CONSOLIDATED CASH FLOW STATEMENT
For the Year Ended 30 June 2023
Cash flows from operating activities
Receipts from customers (incl. GST)
Other income
Payments to suppliers and employees (incl. GST)
Payments for land
Payments for development
Interest received
Borrowing costs paid
Income taxes paid
Net cash inflow (outflow) from operating activities
21(i)
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 (outflow) from investing activities
Cash flows from financing activities
Proceeds from borrowings
Principal elements of lease payments
Proceeds from project partners
Dividends paid
25
Net cash (outflow) inflow from financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
5
Note
2023
$’000
2022
$’000
430,197
356,321
198
(86,642)
(81,898)
63
(69,416)
(145,741)
(211,631)
(183,555)
396
(13,553)
(13,365)
23,702
-
-
(547)
(1,774)
(2,321)
818
(896)
5,150
(22,608)
(17,536)
3,845
2,957
6,802
177
(6,309)
(17,376)
(65,836)
13
521
(245)
(992)
(703)
82,442
(896)
-
(17,436)
64,110
(2,429)
5,386
2,957
The above consolidated cash flow statement should be read in conjunction with the accompanying notes.
66 Cedar Woods Properties Limited
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 26.
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.
Annual Report 2023 67
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.
2.
3.
4.
Revenue
Expense items
Income tax
Earnings per share
Balance Sheet Information
5.
6.
7.
8.
Cash and cash equivalents
Trade and other receivables
Inventories
Deferred development costs
9. Other Financial Assets and
Other Financial Liabilities
10. Property, plant and equipment
69
69
70
71
71
72
72
72
73
73
74
75
11.
Investment properties
12. Assets classified as available for sale
13. Trade and other payables
14. Borrowings
15. Provisions
16. Deferred tax
17. Equity
18. Reserves
19. Retained profits
20. Categories of financial assets
and financial liabilities
Cash Flow information
21. Cash Flow Information
75
76
76
76
78
79
81
82
82
83
84
84
68 Cedar Woods Properties Limited
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
2023
$’000
2022
$’000
382,559
318,695
2,367
8,323
6,377
6,018
2023
$’000
1,338
2,440
3,778
2022
$’000
3,041
1,061
4,102
Costs to fulfil a contract that were included in the contract
asset balance at the beginning of the period
Commissions relating to property sales
2,349
3,376
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
2023
$’000
7,455
96
7,551
2022
$’000
7,348
88
7,436
Revenue recognised that was included in the contract
liability balance at the beginning of the period
Customer rebates
3,038
2,272
(iii)
Transaction price allocated to remaining performance obligations
The transaction price allocated to partially unsatisfied performance obligations at 30 June 2023 is set out below:
Within one year
More than one year
Total
2023
$’000
299,787
163,849
463,636
2022
$’000
361,068
188,337
549,405
Annual Report 2023 69
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 losses (gains)
Less: amount capitalised
Finance costs expensed
(i)
Capitalised borrowing costs
Note
(i)
2023
$’000
14,454
99
3,047
606
(13,805)
4,401
2022
$’000
6,813
39
3,049
(2,536)
(6,921)
444
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 4.39% (2022 – 2.42%) per annum. Where qualifying assets
are financed by specific facilities, the applicable borrowing costs of those facilities are capitalised.
Other specific expenses
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
Write-down of inventory
(ii)
Depreciation
Note
6
10
11
(ii)
2023
$’000
618
(210)
2022
$’000
262
(87)
15,064
14,472
1,386
1,294
571
786
1,309
1,220
976
868
933
-
Depreciation of right-of-use assets and low value assets are presented within Administration expenses and
Project operating costs on the Consolidated Statement of Profit or Loss and Other Comprehensive Income.
70 Cedar Woods Properties Limited
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
Adjustments for current tax of prior periods
Income tax expense attributable to profit
Deferred income tax expense included in income tax expense
comprises:
Increase in deferred tax assets
Increase in deferred tax liabilities
Note
2023
$’000
2022
*Restated
$’000
10,669
15,786
3,226
(144)
442
-
13,751
16,228
16
16
(1,892)
(3,033)
5,118
3,226
3,475
442
* See Note 15 for details regarding the restatement.
(ii)
Numerical reconciliation of income tax expense to prima facie tax payable
Profit before income tax
2023
$’000
2022
$’000
45,386
53,616
Tax at the Australian tax rate of 30% (2022 – 30%)
13,616
16,085
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
- Employee share scheme
- Other income
- Adjustments for current tax of prior periods
- Sundry items
Income tax expense
4. Earnings per share
Basic earnings per share (cents)
Diluted earnings per share (cents)
256
-
(144)
23
135
277
(157)
-
23
143
13,751
16,228
2023
38.5
38.0
2022
45.7
45.2
Net profit attributable to the ordinary owners of the company ($’000)
31,635
37,388
Weighted average number of ordinary shares used as the denominator
in the calculation of earnings per share
82,197,343
81,881,597
Weighted average number of ordinary shares used as the denominator
in the calculation of diluted earnings per share
83,189,028
82,663,261
The calculation of diluted earnings per share includes performance rights that may vest under the company’s
LTI and DSTI plans.
Annual Report 2023 71
BALANCE SHEET INFORMATION
5. Cash and cash equivalents
Cash at bank and in hand
2023
$’000
6,802
6,802
2022
$’000
2,957
2,957
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 1.0% to 4.3% (2022 - 0 to 1.0%) per annum depending on the balances.
The Group’s exposure to interest rate risk is discussed in note 23 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
Other receivables
Loans – employee share scheme (discontinued)
(i)
Credit risk
Notes
(ii)
(i), (ii)
(ii)
Notes
(iii)
34
2023
$’000
4,488
(26)
344
2,035
6,841
2023
$’000
2022
$’000
6,785
(236)
1,151
1,610
9,310
2022
$’000
3,581
7,798
1
2
3,582
7,800
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
35(h).
(iii)
Other non-current receivables
Other non-current receivables comprise refundable deposits paid on conditional contracts.
72 Cedar Woods Properties Limited
7. Inventories
Total Inventory
Current inventory
Non-current inventory
Aggregate carrying amount
*See note 15 for details regarding the restatement.
Notes
(i), (ii)
(i), (ii)
Current
Property held for resale
- at cost
- capitalised development costs
- at net realisable value
Non-Current
Property held for resale
- at cost
- capitalised development costs
- at net realisable value
2023
$’000
2022
*Restated
$’000
195,018
226,781
519,481
491,282
714,499
718,063
2023
$’000
2022
*Restated
$’000
58,757
64,363
133,101
162,418
3,160
-
195,018
226,781
2023
$’000
2022
*Restated
$’000
394,459
389,578
120,758
2,729
96,362
5,342
517,946
491,282
(i)
Current and non-current assets pledged as security
Refer to note 14 for information on current assets pledged as security by the parent entity or its controlled entities.
(ii)
Accounting for inventory
Refer to note 35(i) for the group’s accounting policies for the recognition and classification of inventory.
8. Deferred development costs
Current
Deferred development costs
2023
$’000
3,892
3,892
2022
$’000
3,972
3,972
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.
Annual Report 2023 73
9. Other financial assets and other financial liabilities
Other financial assets
Current
Interest rate hedge contracts
Non-current
Interest rate hedge contracts
Other financial liabilities
Current
Due to vendors of properties under contracts of sale
Non-current
Due to vendors of properties under contract of sale
Due to project partners
Other payables
(i)
Instruments used by the group
Notes
2023
$’000
2022
$’000
(i)
(i)
Notes
(ii)
17
17
1,836
1,836
2023
$’000
741
741
1,718
1,718
2022
$’000
68,040
87,886
68,040
87,886
-
24,375
5,435
56
-
49
5,491
24,424
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.
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 35(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.
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 July 2023 to July 2025. The group uses interest rate caps
and swaps to hedge interest rates.
The caps in place at year end, effectively cap interest rates applicable to bank bills issued with duration of 3
months (BBSY Bid) at certain levels between 1.00% - 3.00% (2022 – 1.00% to 3.00%).
Interest rate hedge contracts in place at year end cover approximately 47% (2022 – 52%) of the variable loans
outstanding at balance date, with terms expiring in 2023 and 2025. 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.
(ii)
Amounts due to project partners
Amounts due to project partners are variable based on project returns. To measure amounts due to project
partners project cashflows are considered adopting assumptions on sale prices, construction costs and delivery
period. These are discounted at the effective interest rate implied by the contract terms and initial cash flow
estimates.
74 Cedar Woods Properties Limited
10. Property, plant and equipment
Plant and Equipment at Cost
At start of the year
Additions
Disposals
At end of the year
Accumulated depreciation on Plant and Equipment
At start of the year
Disposals
Charge for the year
At end of the year
Net book value
2023
$’000
2022
$’000
13,417
12,864
2,218
(2,512)
1,152
(599)
13,123
13,417
5,925
(1,501)
1,294
5,718
7,405
4,816
(111)
1,220
5.925
7,492
(i)
Non-current assets pledged as security
Refer to note 14 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
Note
2023
$’000
2022
$’000
38,591
39,635
362
(571)
(108)
(32,238)
(6,036)
-
-
-
128
(976)
(196)
-
-
38,591
38,591
38,591
Transfer to assets classified as held for sale
(i)
Transfer to inventory
Closing balance at the end of the year
Represented by:
Completed investment property
Closing balance at the end of the year
12, (ii)
(i)
Transfer to assets classified as held for sale
In January 2023, the Williams Landing Shopping Centre was marketed for sale. Accordingly, the shopping centre
and related capitalised lease incentives were transferred to ‘Assets classified as held for sale’ with land
surrounding the shopping centre retained for future development by the group, transferred to inventory.
(ii)
Non-current assets pledged as security
Refer to note 14 for information on non-current assets pledged as security by the parent entity or its controlled
entities.
Annual Report 2023 75
12. Assets classified as held for sale
Investment properties
Capitalised lease incentives
Closing balance at the end of the year
(i)
Transfer to assets classified as held for sale
Note
(i), (ii)
(i), (ii)
2023
$’000
32,238
715
32,953
2022
$’000
-
-
-
In 2023, the Williams Landing Shopping Centre was marketed for sale. Accordingly, the shopping centre and
related capitalised lease incentives were transferred to ‘Assets classified as held for sale’ with land surrounding
the shopping centre for future development transferred to inventory.
(ii)
Non-current assets pledged as security
Refer to note 14 for information on non-current assets pledged as security by the parent entity or its controlled
entities.
13. Trade and other payables
Trade payables
Accruals
Other payables
2023
$’000
6,700
2022
$’000
2,692
26,729
23,919
261
287
33,690
26,898
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.
14. 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
2023
$’000
2022
$’000
-
-
-
-
29,193
(92)
58
29,159
174,000
172,800
29,193
(834)
249
-
(361)
47
202,608
172,486
The fair value of non-current borrowings equals their carrying amount.
(i)
Security for borrowings
All of the consolidated entity’s assets are pledged as security for the group’s finance facilities.
Bank loans totaling $174,000,000 provided by three major banks (2022 - $172,800,000) are secured by first
registered mortgages over some of the consolidated entity’s land holdings, and first registered charges,
guarantees and indemnities provided by Cedar Woods and applicable subsidiary entities. Cedar Woods has
provided first registered charges over its assets and undertakings in relation to the corporate loan facility.
76 Cedar Woods Properties Limited
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 assets classified as held for sale at note
12(i).
(ii)
Financing arrangements
The group had access to the following lines of credit at balance date:
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
2023
$’000
2022
$’000
330,000
300,000
(223,436)
(212,173)
106,564
87,827
30,000
30,000
(29,193)
(29,193)
807
807
360,000
330,000
(252,629)
(241,366)
107,371
88,634
The consolidated entity has total corporate finance facilities of $330,000,000 (2022 - $300,000,000), provided by
three major banks. The consolidated entity extended its corporate facility in January 2023 following its annual
review. The facility tenure remains comprised of three and five year debt as follows:
$264,000,000 (approximately 80%) of the facility expiring January 2026; and
$66,000,000 (approximately 20%) of the facility expiring January 2028.
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 2023
was an average rate of 5.76% (2022 – 2.42%) per annum. The corporate facilities include bank guarantee
facilities of $60,000,000 (2022 - $60,000,000) subject to similar terms and conditions, which were drawn to a total
amount of $49,436,000 at 30 June 2023 (2022 - $39,373,000).
The consolidated entity has a facility of $30,000,000 (2022 - $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 1 July 2024, however will be extinguished upon the
sale of the Williams Landing Shopping Centre, which is presented as assets classified as held for sale in note 12.
The interest on the Williams Landing Shopping Centre loan facility is variable and at 30 June 2023 was 5.55%
(2022 – 2.85%) per annum.
Details of the group’s exposure to risk arising from current and non-current borrowings are set out in note 23
Financial risk management.
Annual Report 2023 77
15. Provisions
Current
Employee entitlements
Development cost provisions
Non-Current
Employee entitlements
Development cost provisions
(i) Movement in provision for development costs
Carrying amount at start of the year
Additional provisions
Payments made / amounts utilised
Carrying amount at the end of the year
Nature of provision
2023
$’000
2022
*Restated
$’000
1,561
1,346
21,452
14,872
23,013
16,218
214
1,534
1,748
228
1,682
1,910
2023
$’000
16,554
13,431
2022
*Restated
$’000
9,642
17,865
(6,999)
(10,953)
22,986
16,554
This provision relates to development costs yet to be incurred for lots/units that have settled and revenue
recognised at balance date and provisions for development obligations under agreements with various state and
local authorities and land purchase contracts. The provision is determined using detailed cost estimates for the
underlying expenditure, typically supported by engineering estimates and consistent with the assumptions
underpinning bank guarantees (where relevant) as described in note 29. The provision is presented as current
when work is expected to commence within the next 12 months.
* Prior period restatement
Prior year comparatives for provisions and inventory have been restated to reflect the inclusion of development
cost provisions of $16,554,000.
78 Cedar Woods Properties Limited
16. Deferred tax
(i)
Assets
The balance comprises temporary differences attributable to:
Notes
Inventory
Capital losses
Provision for customer rebates
Property, plant and equipment
Provision for development costs
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 to income tax expense
3
Increase in deferred tax assets credited to equity
2023
$’000
948
1,889
2,236
212
6,896
1,039
304
13,524
(13,524)
-
11,631
1,892
1
2022
*Restated
$’000
1,307
1,745
2,205
344
4,966
862
202
11,631
(11,631)
-
8,593
3,033
5
Deferred tax assets at the end of the year
13,524
11,631
Deferred tax assets expected to be recovered within 12 months
Deferred tax assets expected to be recovered after more than 12 months
8,556
4,968
13,524
6,356
5,275
11,631
Provision
for
customer
rebates
$’000
Provision
for
employee
benefits
$’000
Provision for
development
costs
Restated*
$’000
Capital
losses
$’000
Inventory
Restated*
$’000
Other
$’000
Total
Restated*
$’000
615
1,619
1,745
824
2,892
898
8,593
Movements
At 1 July 2021
(Charged) credited
- to profit or loss
- directly to equity
692
-
586
-
-
-
At 30 June 2022
1,307
2,205
1,745
(Charged) credited
- to profit or loss
- directly to equity
At 30 June 2023
(359)
-
948
31
-
144
-
38
-
862
177
-
2,074
(357)
3,033
-
5
5
4,966
546
11,631
1,930
(31)
1,892
-
1
1
2,236
1,889
1,039
6,896
516
13,524
* See Note 15 for details regarding the restatement.
Annual Report 2023 79
(ii)
Liabilities
The balance comprises temporary differences attributable to:
Notes
Inventory
Deferred development costs
Property, plant and equipment
Contract assets
Derivative financial instruments
Other
Total deferred tax liabilities
2023
$’000
13,672
1,167
1,125
999
556
1,488
19,007
2022
*Restated
$’000
9,211
1,192
621
977
738
1,150
13,889
Set off of deferred tax assets pursuant to set-off provisions
Net deferred tax liabilities
(13,524)
(11,631)
5,483
2,258
Deferred tax liabilities at the start of the year
13,889
10,414
Increase 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
5,118
19,007
8,059
10,948
19,007
3,475
13,889
6,419
7,470
13,889
Movements
Inventory
Restated*
$’000
Deferred
development
costs
$’000
Property,
plant &
equipment
$’000
Contract
assets
$’000
Derivative
financial
instruments
$’000
Other
$’000
Total
Restated*
$’000
At 1 July 2021
6,493
1,638
251
1,242
-
790
10,414
Charged (credited)
- to profit or loss
At 30 June 2022
Charged (credited)
2,718
9,211
(446)
1,192
370
621
- to profit or loss
4,461
(25)
504
At 30 June 2023
13,672
1,167
1,125
* See Note 15 for details regarding the restatement.
(265)
977
22
999
738
738
(182)
556
360
3,475
1,150
13,889
338
5,118
1,488
19,007
80 Cedar Woods Properties Limited
17. Equity
Movement in ordinary share capital
2023
Shares
2022
Shares
2023
$’000
2022
$’000
Start of the year
82,127,852
81,344,846
137,333
133,119
678,422
-
3,996
Shares issued pursuant to the dividend
reinvestment plan:
Ordinary shares issued on 29 October 2021 at $5.89
Shares issued pursuant to the bonus share plan:
Ordinary shares issued on 29 October 2021
Shares issued under employee share scheme:
-
-
Ordinary shares issued on 26 August 2022
82,085
Ordinary shares issued on 27 August 2021
Transaction costs arising on share issues
-
-
39,857
-
64,727
-
82,085
783,006
465
-
(3)
462
-
230
(12)
4,214
End of the year
82,209,937
82,127,852
137,795
137,333
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 2023 financial year, the dividend reinvestment plan and bonus share plan were not in operation for the
2022 final dividend and 2023 interim dividend.
(iii)
Employee share scheme
Details of the company’s employee share scheme can be found in note 35 and in the remuneration report on
pages 46 - 50 of this financial report.
Annual Report 2023 81
18. Reserves
The following table shows the composition and movement in reserves during the year. A description of the nature
and purpose of reserves is provided below the table.
Composition
Employee share plan reserve
Balance at the end of the year
Movements
(i) 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
Notes
(i)
17
19
2023
$’000
1,742
1,742
1,815
855
(465)
(463)
1,742
2022
$’000
1,815
1,815
1,302
922
(230)
(179)
1,815
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 34.
19. 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
18
25
2023
$’000
2022
$’000
282,075
265,937
31,635
37,388
463
182
(22,608)
(21,432)
291,565
282,075
82 Cedar Woods Properties Limited
20. Categories of financial assets and financial liabilities
Notes 5, 6, 9, 13 and 14 provide information about the group’s financial instruments, including:
(i) Specific information about each type of financial instrument
(ii) Accounting policies
(iii)
Information about determining the fair value of the instruments, including judgements and estimation
uncertainty involved.
The group holds the following financial instruments:
Derivatives
used for
hedging
$’000
Financial
assets at
amortised cost
$’000
Notes
Financial Assets
2023
Cash and cash equivalents
Trade and other receivables*
Derivative financial instruments
Total
2022
Cash and cash equivalents
Trade and other receivables*
Derivative financial instruments
Total
5
6
9
5
6
9
-
-
1,853
1,853
-
-
2,459
2,459
* Excluding prepayments and contract assets.
Financial Liabilities
Notes
Derivatives
used for
hedging
$’000
Financial
liabilities at
amortised cost
$’000
2023
Trade and other payables
Borrowings
Other financial liabilities
Lease liabilities
Total
2022
Trade and other payables
Borrowings
Other financial liabilities
Lease liabilities
Total
13
14
9
13
14
9
-
-
-
-
-
-
-
-
-
-
15,190
17,043
Total
$’000
6,802
8,388
1,853
2,957
15,500
2,459
20,916
Total
$’000
33,690
202,608
73,531
2,191
6,802
8,388
-
2,957
15,500
-
18,457
33,690
202,608
73,531
2,191
312,020
312,020
26,898
201,645
112,310
1,168
342,021
26,898
201,645
112,310
1,168
342,021
Annual Report 2023 83
CASH FLOW INFORMATION
21. Cash flow information
(i)
Reconciliation of profit after income tax to net cash inflows (outflows) from operating activities
2022
2023
$’000
*Restated
$’000
31,635
37,388
2,651
3,064
256
-
933
901
606
855
-
201
6,432
115
524
36
-
262
(2,536)
922
(521)
(1)
7,080
2,040
8,668
(135,686)
80
(5,032)
1,488
(624)
(2,839)
(1,586)
8,256
145
1,062
489
6,652
(3,736)
324
6,792
699
5,292
(43,929)
18,508
23,702
(65,836)
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 loss (gain) on financial assets and liabilities
Non-cash share-based payments expense
Other income
Changes in operating assets and liabilities
Increase (decrease) in provisions for employee benefits
Increase in provisions
Increase in contract liabilities
Decrease (increase) in inventories
Decrease in other deferred development costs
(Increase) in deferred tax assets
(Decrease) in current income tax payable
Increase in deferred tax liability
Decrease in capitalised borrowing costs
Decrease (increase) in trade receivables
Decrease in contract assets
Increase in trade creditors
(Decrease) increase in other financial liabilities
Net cash inflows (outflows) from operating activities
*See note 15 for details regarding the restatement.
84 Cedar Woods Properties Limited
(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 2021
Cash flows
Other non-cash movements
Net debt as at 30 June 2022
Cash flows
Other non-cash movements
Net debt as at 30 June 2023
2023
$’000
6,802
2022
$’000
2,957
-
(29,159)
(202,608)
(172,486)
(195,806)
(198,688)
6,802
2,957
(202,608)
(201,645)
(195,806)
(198,688)
Other Assets
Liabilities from financing activities
Borrowings
due within
1 year
$’000
Borrowings
due after
1 year
$’000
Total
$’000
-
(118,714)
(113,328)
Cash
$’000
5,386
(2,429)
(29,193)
(53,249)
(84,871)
-
2,957
3,845
34
(523)
(489)
(29,159)
(172,486)
(198,688)
29,193
(29,537)
-
(34)
(585)
3,501
(619)
6,802
-
(202,608)
(195,806)
Annual Report 2023 85
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.
22. Significant estimates and judgements
23. Financial Risk Management
24. Capital management objectives and gearing
25. Dividends
87
88
92
93
86 Cedar Woods Properties Limited
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.
22. 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 35
(i).
There were no critical judgements other than those involving estimates referred to above, that management made
in applying the group’s accounting policies.
Annual Report 2023 87
FINANCIAL RISK MANAGEMENT
This note explains the group’s exposure to financial risks and how these risks could affect the group’s future
financial performance. Current year profit and loss information has been included where relevant to add further
context.
23. 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:
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
*Excluding prepayments and contract assets
a) Market risk
(i)
Price risk
2023
$’000
2022
$’000
6,802
8,388
1,853
2,957
15,500
2,459
17,043
20,916
33,690
26,898
73,531
112,310
202,608
201,645
2,191
1,168
312,020
342,021
The consolidated entity has no foreign exchange exposure, price risk on equity securities or commodity purchase
contracts.
88 Cedar Woods Properties Limited
(ii)
Cash flow and fair value interest rate risk
As the consolidated entity does not have a significant portfolio of interest-bearing assets, the income and
operating cash inflows are not materially exposed to changes in market interest rates.
Interest rate risk arises from exposures to long term borrowings, where those borrowings are issued at variable
interest rates. Borrowings issued at variable interest rates expose the group to cash flow interest rate risk.
The consolidated entity reviews the potential impact of variable interest rate changes and considers various
interest rate management products in the context of prevailing monetary policy of the Reserve Bank and
economic conditions. Accordingly, the consolidated entity has entered into interest rate swap and cap contracts
under which a part of the consolidated entity’s projected borrowings are protected for the period from July 2023 to
July 2026.
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.
(iii)
Instruments used by the group
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% (2022 – 1.00% - 3.00%).
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 in place at year end cover 47%
(2022 - 52%) of the variable loan outstanding at balance date of $203,193,000 (2021 - $201,993,000), 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.
2023
2022
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
-
-
-
8,387
8,387
1
1
8,388
8,388
-
-
-
15,498
15,498
2
2
15,500
15,500
Interest
bearing
- fixed
$’000
2023
Interest
bearing
- variable
$’000
Total
$’000
2022
Interest
bearing
- variable
$’000
Interest
bearing
- fixed
$’000
Total
$’000
Interest bearing liabilities
Bank loans
-
203,193
203,193
-
201,993
201,993
Other financial liabilities
75,666
75,666
-
75,666
113,441
-
113,441
203,193
278,859
113,441
201,993
315,434
The weighted average interest rate at year end is 5.76% (2022: 2.42%)
An analysis by maturity is provided in 23(c)i. below.
Annual Report 2023 89
(iv)
Summarised interest rate sensitivity analysis
The potential impact of a change in bank interest rates of + / -1% is not significant to the group’s net profit and
equity. The potential impact on financial assets is not significant. Refer to comments above for further information
on the impact of changes in interest rates upon the group.
b) Credit risk
The consolidated entity has minimal exposure to credit risk from customers as title to lots or units in the
consolidated entity’s developments does not generally pass to customers until funds are received.
Policies and procedures are in place to mitigate credit risk including management of deposits and review of the
financial capacity of customers. Ongoing checks are performed by management to ensure that settlement terms
detailed in individual contracts are adhered to. For land under option the consolidated entity typically secures its
rights by way of encumbrances on the underlying land titles. The maximum exposure to credit risk at the reporting
date is the carrying amount of the financial assets as summarised above.
Derivative counterparties and cash deposits are placed with high credit quality financial institutions, such as major
trading banks.
Credit risk may arise in relation to bank guarantees given to certain parties. These guarantees are supported by
contractual arrangements that bind the counterparty, providing security against inappropriate presentation of the
bank guarantees.
c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and available credit facilities to manage the
consolidated entity’s financial commitments. The group manages liquidity risk by continuously monitoring forecast
and actual cash flows and matching the maturity profiles of financial assets and liabilities. During the year
forecasts involved scenario modelling including downside cases, conditional and potential acquisition scenarios
and possible impacts from external events. Due to the dynamic nature of the underlying businesses, the group
aims at maintaining flexibility in funding by keeping committed credit lines available.
At 30 June 2023 the group had undrawn committed facilities of $107,371,000 (2022 - $88,634,000) and cash of
$6,802,000 (2022 - $2,957,000) to cover short term funding requirements. Refer to note 14(ii) for details. The
Company continued to operate within all of its facility covenants throughout FY2023.
(i)
Maturities of financial liabilities
The tables below analyse the group’s financial liabilities into relevant maturity groupings based on the remaining
period at the reporting date to the contractual maturity date. The amounts disclosed in the table for non-interest
bearing liabilities are the contractual undiscounted cash flows. For variable interest rate liabilities, the cash flows
have been estimated using interest rates applicable at the reporting date.
Group – at 30 June 2023
$’000
$’000
$’000
Less than 1
year
Between 1
and 2 years
Between 2
and 5 years
Over 5
years
$’000
Total
contractual
cash flows
$’000
Carrying
amount
$’000
Non-derivatives
Non-interest bearing
Fixed rate
Variable rate
Derivatives
Total
33,690
71,926
-
-
44
7,108
12
1,173
30,822
220,020
-
-
-
133
-
-
33,746
80,340
33,746
75,666
250,842
202,608
-
-
105,616
37,974
221,205
133
364,928
312,020
90 Cedar Woods Properties Limited
Group – at 30 June 2022
$’000
$’000
$’000
Less than 1
year
Between 1
and 2 years
Between 2
and 5 years
Over 5
years
$’000
Total
contractual
cash flows
$’000
Carrying
amount
$’000
Non-derivatives
Non-interest bearing
Fixed rate
Variable rate
Derivatives
Total
d) Fair value measurement
26,898
89,490
30,026
-
25
25,811
-
-
24
157
192,138
-
-
26,947
26,947
110
116,028
113,429
-
-
222,164
201,645
-
-
146,414
25,836
192,319
110
365,139
342,021
This note provides information on the judgements and estimates made by the group in determining the fair values
of the financial instruments.
(i)
Fair value hierarchy
To provide an indication 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 2023 and 30 June 2022:
As at 30 June 2023
Notes
Level 1
$’000
Level 2
$’000
Level 3
$’000
Assets
Derivatives used for hedging
9
Total assets
-
-
1,853
1,853
-
-
As at 30 June 2022
Notes
Level 1
$’000
Level 2
$’000
Level 3
$’000
Assets
Derivatives used for hedging
9
Total assets
-
-
2,459
2,459
-
-
Total
$’000
1,853
1,853
Total
$’000
2,459
2,459
(ii)
Valuation techniques used to determine fair values
Level 1 – The fair value of financial instruments traded in active markets (such as publicly traded derivatives) is
based on quoted (unadjusted) market prices at the end of the reporting period. The quoted market price used for
the financial assets held by the group is the current bid price. These instruments are included in level 1.
Level 2 – The fair value of financial instruments that are not traded in an active market (such as derivatives
provided by trading banks) is determined using market valuations provided by those banks at reporting date.
These instruments are included in level 2.
Level 3 – If one or more of the significant inputs is not based on observable market data, the instruments is
included in level 3.
Annual Report 2023 91
CAPITAL MANAGEMENT
24. 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
Note
14
5
2023
$’000
2022
$’000
202,608
201,645
(6,802)
(2,957)
195,806
198,688
431,102
421,223
45.4%
47.2%
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.
For ease of comparison to ASX listed peer companies operating in the property sector, the group also measures
gearing on a net bank debt to total tangible assets less cash basis. On this basis gearing at year end is 25.3%
(2022: 25.1%).
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 14 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.
92 Cedar Woods Properties Limited
25. Dividends
a) Ordinary shares
Fully franked based on tax paid at 30%
Final dividend for the year ended 30 June 2022 of 14.5 cents (2021 – 13.5 cents) per fully
paid share
- Paid in cash
- Satisfied by shares under the dividend reinvestment plan
Interim dividend for the year ended 30 June 2023 of 13.0 cents (2022 – 13.0 cents) per fully
paid share
- Paid in cash
Total
b) Dividends not recognised at the year end
2023
$’000
2022
$’000
11,921
-
6,760
3,996
10,687
22,608
10,676
21,432
In addition to the above dividends, since year end the directors have recommended the payment of a final
dividend of 7.0 cents per fully paid ordinary share (2022 – 14.5 cents), fully franked based on the tax paid at 30%.
The aggregate amount of the proposed dividend expected to be paid on 27 October 2023 out of retained profits at
30 June 2023, but not recognised as a liability at year end is below:
Dividends not recognised at year end
c) Franked Dividends
2023
$’000
5,755
2022
$’000
11,909
The franked portions of the final dividend proposed at 30 June 2023 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% (2022 – 30%)
2023
$’000
2022
$’000
117,135
113,566
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 $2,466,000 (2022 - $5,104,000).
Annual Report 2023 93
SECTION C:
GROUP
STRUCTURE
This section provides information which will help users understand how the
group structure affects the financial position and performance of the group as
a whole.
26. Subsidiaries
27. Deed of cross guarantee
28. Parent entity financial information
95
96
96
94 Cedar Woods Properties Limited
GROUP STRUCTURE
26. Subsidiaries
The group’s operating subsidiaries at 30 June 2023 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 35(b).
Company
Equity Holding
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
2023
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%
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%
Annual Report 2023 95
27. Deed of Cross Guarantee
Cedar Woods Properties Limited and all subsidiaries listed at note 26 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 consolidated statement of profit or loss and comprehensive income for the year ended 30 June 2023 of the
closed group is the same as the consolidated group.
b) Consolidated balance sheet as at 30 June
The consolidated balance sheet of the closed group at 30 June 2023 is the same as the consolidated group.
28. 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:
2023
$’000
2022
$’000
48,695
492,969
(42,236)
49,381
505,487
(55,716)
(220,098)
(228,954)
275,603
276,533
137,795
137,333
1,742
136,066
275,603
20,825
20,825
1,815
137,385
276,533
28,519
28,519
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
96 Cedar Woods Properties Limited
a)
Investments in subsidiaries
Investments in subsidiaries 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.
b) Tax consolidation legislation
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 group.
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 tax receivable and deferred tax assets relating to unused tax losses that are transferred to the
parent under the tax consolidation legislation. The funding amounts are determined by reference to the amounts
recognised in the subsidiaries’ financial statements.
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice
from the head entity when it is issued. The head entity may require payment of interim funding amounts to assist
with its obligations to pay tax instalments.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as
current amounts receivable from or payable to other entities in the group.
Annual Report 2023 97
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.
29. Contingent Liabilities
30. Commitments
31. Events occurring after the reporting period
99
99
98
98 Cedar Woods Properties Limited
UNRECOGNISED ITEMS
29. Contingent liabilities
Bank guarantees
At 30 June 2023 bank guarantees totalling $49,436,000 (2022 - $39,373,000) had been provided to various state
and local authorities supporting development and maintenance commitments. Some of these development
commitments are recognised in inventory in the financial statements where the costs have been expended or
provided for in part.
30. Commitments
Capital commitments
At 30 June 2023 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 $36,763,000 (2022 - $26,327,000), for building
construction was $133,510,000 (2022 - $88,789,000) and for landscaping construction was $2,803,000 (2022 -
$2,412,000). This work will be substantially completed in the next 12 months.
31. Events occurring after the reporting period
Refer to note 25(b) for details of the final dividend recommended by the directors, to be paid on 27 October 2023.
No other matters or circumstances have arisen since 30 June 2023 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.
Annual Report 2023 99
SECTION E:
FURTHER
INFORMATION
Section E contains information that is not immediately related to
individual line items in the financial statements, such as related
party transactions, share based payments and a full list of the
accounting policies applied by the entity.
32. Related Party Transactions
32. Remuneration of Auditors
34. Employee Share Scheme
35. Summary of Accounting Policies
36. Segment Information
101
101
102
102
110
100 Cedar Woods Properties Limited
32. 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
2023
$
2022
$
2,681,086
2,829,837
144,818
160,983
444,770
599,348
3,270,674
3,590,168
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 26.
c) Parent entity
The parent entity within the group is Cedar Woods Properties Limited.
d) Transactions with other related parties
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 57.
33. 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
- Agreed upon procedures
Total fees for assurance services
Non-audit services
- Taxation compliance, legal and advisory services
Total fees for non-audit services
Total assurance and non-audit services
2023
$
2022
$
309,817
308,612
3,305
-
313,122
308,612
52,020
52,020
87,210
87,210
365,142
395,822
Annual Report 2023 101
34. Employee Share Scheme
The current Long Term Incentive (LTI) plans effective from 1 July 2020 for FY2021, from 1 July 2021 for FY2022
and from 1 July 2022 for FY2023 will continue in FY2024.
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 46 - 50 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 (FY2022 – 65% cash STI and 35% 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 45 of this annual financial report.
35. 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 2022:
AASB 2020-3 Amendments to Australian Accounting Standards – Annual Improvements 2018–2020 and
Other Amendments [AASB 1, AASB 3, AASB 9, AASB 116, AASB 137 & AASB 141].
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
2023 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.
102 Cedar Woods Properties Limited
b) Principles of consolidation
Subsidiaries
(i)
The consolidated financial statements incorporate the assets and liabilities of all entities controlled by Cedar
Woods (parent) as at 30 June 2023 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.
Joint arrangements
(ii)
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.
Equity method
(iii)
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 35(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. Refer note 36 for details.
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.
Sale of land and buildings – customer rebates
(ii)
Certain contracts for the sale of land and buildings include an obligation of the group to provide goods, services,
or payments to the customer, subject to certain performance conditions. These contracts provide a right to
customers that forms a separate performance obligation.
The transaction price is allocated to the performance obligations on a relative stand-alone selling basis.
Management estimates the stand-alone selling prices at the point in time that legal title passes to the customer
based on the contract value, and observable market prices of similar services.
Annual Report 2023 103
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
Development services
(iii)
Revenue from development services is recognised at a point in time where the group has satisfied contractual
performance obligations and control over the output has passed to the customer. In most instances this coincides
with the transfer of legal title of the developed land or building.
(iv)
Income from operating leases is recognised over time on a straight-line basis over the period of the lease.
Lease income
Government grants
(v)
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.
104 Cedar Woods Properties Limited
Inventories
i)
(i) Property held for development and resale
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.
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.
Intangible assets
Costs associated with maintaining software are recognised as an expense as incurred. Development costs that
are directly attributable to the design, customisation, configuration and testing of identifiable and unique software
products controlled by the group are recognised as intangible assets within property, plant and equipment, where
the following criteria are met:
it is technically feasible to complete the software so that it will be available for use
management intends to complete the software and use it
Annual Report 2023 105
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)
(i)
Investments and other financial assets
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.
Measurement
(ii)
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
106 Cedar Woods Properties Limited
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.
Leases
r)
(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.
Extension and termination options are included in a number of property and equipment leases across the group.
These terms are used to maximise operational flexibility in terms of managing contracts. The majority of extension
and termination options held are exercisable only by the group and not by the respective lessor.
Critical judgements in determining the lease term
In determining the lease term, management considers all facts and circumstances that create an incentive to
exercise an extension option, or not exercise a termination option. Extension options (or periods after termination
options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated).
Most extension options in offices and equipment leases have not been included in the lease liability, because the
group could replace the assets without significant cost or business disruption.
The lease term is reassessed if an option is exercised (or not exercised) or the group becomes obliged to
exercise (or not exercise) it. The assessment of reasonable certainty is only revised if a significant event or a
Annual Report 2023 107
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.
Other long-term employee benefit obligations
(ii)
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.
Bonus plans
(iii)
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.
Superannuation
(iv)
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) Development cost provisions
Provision is made for development costs yet to be incurred for lots/units that have settled and revenue recognised
at balance date and provisions for development obligations under agreements with various state and local
authorities and land purchase contracts. Development cost provisions are classified as current liabilities if they are
expected to be settled within 12 months, otherwise classified as non-current.
108 Cedar Woods Properties Limited
x) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are
shown in equity as a deduction, net of tax, from the proceeds.
y) Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the
discretion of the entity, on or before the end of the financial year but not distributed at balance date.
z) Share based payments
Share based compensation benefits are provided to employees via the Deferred STI and LTI plans. Information
relating to these schemes is set out in the remuneration report on pages 45 to 46.
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.
aa) Earnings per share
(i)
Basic earnings per share
Basic earnings per share is determined by dividing the profit attributable to owners of Cedar Woods by the
weighted average number of ordinary shares outstanding during the financial year, adjusted for any bonus
elements in ordinary shares issued during the year.
(ii)
Diluted earnings per share
Diluted earnings per share adjusts the earnings used in the determination of basic earnings per share to take
account of any effect on borrowing costs associated with the issue of dilutive potential ordinary shares. The
weighted average number of ordinary shares is adjusted to reflect the conversion of all dilutive potential ordinary
shares.
ab) 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.
ac) Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is
not recoverable from the taxation authority. In this case it is recognised as part of the cost of the asset or as part
of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of
GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the
balance sheet.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from, or payable to, taxation authorities, are presented as operating
cash flows.
Annual Report 2023 109
36. 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.
110 Cedar Woods Properties Limited
DECLARATION AND
INDEPENDENT
AUDITOR’S REPORT
Directors' Declaration
Independent Auditor’s Report
112
113
Annual Report 2023 111
DIRECTORS’ DECLARATION
In the directors’ opinion:
a)
the financial statements and notes set out on pages 61 to 110 are in accordance with the Corporations
Act 2001, including:
(i)
(ii)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2023 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 26 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 27.
Note 35(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
22 August 2023
112 Cedar Woods Properties Limited
INDEPENDENT AUDITOR’S REPORT
Annual Report 2023 113
114 Cedar Woods Properties Limited
Annual Report 2023 115
116 Cedar Woods Properties Limited
Annual Report 2023 117
118 Cedar Woods Properties Limited
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
120
121
123
Annual Report 2023 119
INVESTORS’ SUMMARY
Dividend and dividend policy
The final dividend for the 2023 financial year is 7.0 cents per share, fully franked. The dividend will be paid on 27
October 2023. The Company’s dividend policy is to distribute approximately 50% of the full year net profit after
tax. The total FY2023 dividends represent a payout ratio of 52%. This acknowledges both the result in FY2023
and the current outlook for FY2024.
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
The group uses exclusively electronic funds transfer for the payment of dividends. Accordingly, shareholders must
nominate a bank, building society or credit union account for the payment of dividends by direct credit. Payments
are electronically credited on the dividend payment date and confirmed by mailed advice. New shareholders
receiving dividends for the first time should contact the company’s share registrar, Computershare Investor
Services Pty Ltd, by visiting www.computershare.com.au.
Dividend re-investment plan and Bonus share plan
The dividend re-investment plan and bonus share plan are operated from time to time as part of measures to
manage the group’s capital. Shareholders can change their participation status in the plans by completing an
election form in accordance with the rules of each plan. The dividend re-investment plan and bonus share plan
will be in operation for the final dividend for the 2023 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
120 Cedar Woods Properties Limited
23 August 2023
28 September 2023
27 October 2023
October 2023
1 November 2023
February 2024
April 2024
May 2024
August 2024
SHAREHOLDER INFORMATION
The shareholder information set out below was applicable at 17 August 2023.
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
1,631
1,448
488
569
49
Number
of shares
664,100
3,859,524
3,692,616
14,383,033
59,610,664
4,185
82,209,937
There were 320 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
HSBC Custody Nominees (Australia) Limited
Westland Group Holdings Pty Ltd
National Nominees Limited
Beach Corporation Pty Ltd
Joia Holdings Pty Ltd
Helen Kaye Poynton
Netwealth Investments Limited
Mr Paul Stephen Sadleir
Dr Alan Gerraty & Mrs Patricia Gerraty
Leblon Holdings Pty Ltd
Mr John Henry Tucker & Mrs Kay Joylene Tucker
BNP Paribas Nominees Pty Ltd Hub24 Custodial Serv Ltd
Gold Plaza Pty Ltd
Gorn Super Pty Ltd
Ramneg Pty Ltd
Mrs Helen K Poynton + Mr David P Poynton
Leblon Holdings Pty Ltd
Number
of shares
Percentage
of shares
15,344,054
18.66
7,352,744
5,040,216
4,833,199
4,233,029
3,921,339
3,382,604
2,321,758
1,677,095
1,187,947
1,083,283
600,000
579,240
485,000
474,735
417,482
397,379
372,977
343,079
336,851
54,384,011
8.94
6.13
5.88
5.15
4.77
4.11
2.82
2.04
1.45
1.32
0.73
0.70
0.59
0.58
0.51
0.48
0.45
0.42
0.41
66.15
Annual Report 2023 121
c) Substantial shareholders of ordinary shares
As disclosed in substantial shareholder notices lodged with the ASX at 17 August 2023.
Name
William George Hames and related entities
Robert Stanley Brown and related entities
AustralianSuper Pty Ltd
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:
Number
of shares
9,314,668
7,818,633
9,291,217
Percentage
of shares1
12.90
9.75
11.41
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
243,246
272,023
252,299
32,182
Number of
holders
20
23
30
1
122 Cedar Woods Properties Limited
FIVE YEAR FINANCIAL PERFORMANCE
All figures in $’000 except where stated
Financial Year
Financial Performance
Revenue from operations
2023
2022
2021
2020
2019
391,303
333,036
299,751
260,660
375,149
Earnings before interest and tax
49,787
54,060
50,552
31,729
72,014
Finance costs
4,401
444
3,049
2,245
3,072
Operating profit before tax
45,386
53,616
47,503
29,484
68,942
Income tax expense
Net profit after tax
Financial Position
Total assets
Total liabilities
Shareholders’ equity
13,751
16,228
14,669
9,097
20,298
31,635
37,388
32,834
20,387
48,644
783,398
796,387
651,800
644,055
571,711
352,296
375,164
251,439
267,254
195,181
431,102
421,223
400,361
376,801
376,530
Number of shares on issue – end of year (‘000)
82,210
82,128
81,345
80,448
80,118
Basic earnings per share (cents)
38.0
45.7
40.7
25.4
60.9
Key Performance Measures
Dividend per share, fully franked (cents)
20.0
27.5
26.5
19.0
31.5
EBIT Margin
Interest cover (times)
Return on Equity
12.7%
16.2%
16.9%
12.2%
19.2%
3.7
9.1
7.3%
9.1%
12.1
8.2%
5.9
8.6
5.4%
12.9%
Investment in inventory during year
293,529
329,296
198,972
208,952
245,814
Net tangible assets backing per share ($)
5.21
5.11
4.92
4.68
4.67
Net bank debt
Net bank debt to equity
195,806
198,688
113,328
142,671
105,314
45.4%
47.2%
28.3%
37.9%
28.0%
Share price – end of year ($)
5.03
3.68
6.71
5.24
5.70
Stock Market capitalisation at 30 June
413,516
302,230
545,824
421,547
456,671
Number of employees at 30 June
93
99
93
91
95
Returns to shareholders over 1, 3, & 5 years
1 Year
3 Year
5 Year
Earnings per share growth %
Share price growth % (annualised)
Dividend growth % (paid dividend)
Total shareholder return % (annualised)
(15.7)
36.7
3.8
46.1
14.9
(1.4)
1.9
3.5
(6.5)
(2.8)
(1.7)
2.6
Annual Report 2023 123
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
Level 4, 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 1 November 2023
Time 10:00am AWST
Annual Report 2023 124