Annual Report 2016–17

StatementSection AAgency purpose or roleObjectivesKey strategiesPrograms and initiativesOrganisation of the agencyRelated agenciesEmployment opportunity programsPeformance management and development systemsOHS and rehabilitation programsFraud detectionWhistle-blowers' disclosureExecutive employmentConsultantsFinancial statements

This annual report is presented to Parliament to meet the statutory reporting requirements of the Urban Renewal Act 1995.

This report is verified to be accurate for the purposes of annual reporting to the Parliament of South Australia.

Submitted on behalf of the Urban Renewal Authority (trading as Renewal SA) by:

John Hanlon
Chief Executive of Renewal SA

Section A

Reporting required under the Public Sector Act 2009, the Public Sector Regulations 2010 and the Public Finance and Audit Act 1987

Agency purpose or role

Objectives

Key strategies

Key strategies and their relationship to SA Government objectives

Key strategy
SA Government objective

Facilitating the delivery of infrastructure agreements for growth areas and delivering projects that provide commercial and industrial opportunities to support jobs and industry growth

  • Supports the state government’s Strategic Priority No 1: Creating a Vibrant City and Strategic Priority No 4: Growing advanced manufacturing
  • Supports the South Australian Strategic Plan by contributing to Target 56 – Strategic infrastructure
  • Supports the Government’s Economic Priority 7: Growth through innovation
  • Guided by The 30-Year Plan for Greater Adelaide.

Enable unique development opportunities for the private sector through access to government land holdings

  • Supports the Government’s Strategic Priority No 1: Creating a Vibrant City
  • Supports the Government’s Strategic Priority No 1: Creating a Vibrant City and Strategic Priority No 4: Growing advanced manufacturing
  • Supports the Government’s Economic Priority 10: Opening doors for small business
  • Guided by The 30-Year Plan for Greater Adelaide
Conduct detailed precinct planning through consultation with government agencies, local communities, councils and other stakeholders
  • Supports the state government’s Strategic Priority No 1: Creating a Vibrant City, Strategic Priority No 2: An affordable place to live, and Strategic Priority No 5: Safe communities, healthy neighbourhoods
  • Supports the South Australian Strategic Plan by contributing to Target 56 – Strategic infrastructure, Target 60 – Energy efficiency, dwellings, Target 63 – Use of public transport and Target 75 – Sustainable water use
  • Supports the Government’s Economic Priority 6: Best place to do business
  • Guided by The 30-Year Plan for Greater Adelaide

Identifying and assembling development sites and engaging early and often with local communities, local government, other government agencies and the private sector to facilitate quality, well designed, affordable and sustainable developments

  • Supports the state government’s Strategic Priority No 1: Creating a Vibrant City, Strategic Priority No 2: An affordable place to live, and Strategic Priority No 5: Safe communities, healthy neighbourhoods
  • Supports the South Australian Strategic Plan by contributing to Target 7 – Affordable housing, Target 8 – Housing stress, Target 56 – Strategic infrastructure, Target 60 – Energy efficiency, dwellings and Target 75 – Sustainable water use
  • Supports the Government’s Economic Priority 3: A destination of choice and Economic Priority 9: Vibrant Adelaide
  • Guided by The 30-Year Plan for Greater Adelaide

Programs and initiatives

Agency programs and initiatives and their effectiveness and efficiency

Program name
Indicators of performance/effectiveness/efficiency
Comments
Vibrant City
  • Small Venue Licence
  • Case Management Service
  • City Makers Program
  • Hub Adelaide Spark Entrepreneurs initiative
  • Market to Riverbank link project
  • Assisted 45 new small to medium businesses starting up in the city through Hub Adelaide, City Makers Case Management and Renew Adelaide
  • 23 City Makers applications funded to a total value of $123,000
  • 10 entrepreneurs were supported through the Spark Program
Established in 2012, the program aims to create a city where people want to live, work, invest and spend time. The program is achieving this by improving and maximising opportunities for communities, businesses, entrepreneurs, investors, creative artists and the public.
Placemaking and activation
  • 15,000 visitors to Wonderwalls 2017 over the three-day street art festival in April 2017
  • 7000 people attended the St Jerome’s Laneways Festival at Hart's Mill, Port Adelaide on 3 February 2017
  • 5000 attendees at the Bowden Town Square park opening
  • 6000 attendees at Playford Alive Fun Day in November 2016
  • 46,895 attendees at the Riverbank Palais and Parc Palais

A people-centred approach to developing public and non-public spaces, placemaking and activation discovers the needs and aspirations of those who live, work and play in a particular place, and creates a common vision for it. Renewal SA builds on a community’s assets, their inspiration and participation, creating and shaping good spaces that promote people’s health, happiness and wellbeing.

Works Program
  • 199 paid employment outcomes
  • 420 training places in programs
  • 506 work experience placements
  • 18 Renewal SA Contract paid employment placements
  • $3 million in funding secured with partners
  • 86 Renewal SA Contracts work experience placements
Established in 2008, the Works Program extends the benefits of Renewal SA’s urban renewal activities by creating opportunities for local people, including training and work experience across varied industries including building and construction, horticulture, retail, childcare and health.
Affordable Housing Program
  • Managed the State Government 15% Affordable Housing Policy Government policy across 17 new, significant developments – with 357 new affordable housing dwellings due for future delivery.
  • Under the 15% Policy, oversaw the delivery of 130 new affordable housing to market, valued at $32.9 million
  • Listed 473 dwellings through the Affordable Homes Program, which targets home ownership opportunities to eligible buyers. These dwellings are both sale of new builds under 15% policy and excess SAHT stock
  • Undertook a review of Affordable Housing in South Australia, providing support for the 15% Policy and direction to improve affordable housing policy and delivery.
The 15 per cent affordable housing requirement for land only, newly constructed properties and house-and-land packages; as well as the sale of former SAHT properties; is increasing the supply of new housing, and is making opportunities available exclusively to eligible buyers.

Organisation of the agency

Renewal SA coordinates, manages and delivers activities and initiatives on behalf of three representative boards.

Board of Management

Appointed by the Governor, the Urban Renewal Authority Board of Management is subject to the control and direction of the Minister for Housing and Urban Development. The Board is responsible to the Minister for securing continuing improvements in performance and protecting both the long-term viability of Renewal SA and the government’s financial and other interest is Renewal SA.

Renewal SA High Level Governance Structure

Employment opportunity programs

Program name
Result of the program
Renewal SA graduate program
Renewal SA supports and regularly provides work experiences placements for school and university students. In 2016-17 the agency placed eight graduates.
Disability Access and Inclusion Plan
Support for employees with a disability is ongoing, in line with Renewal SA's Disability Access and Inclusion Plan. Where applicable, staff are encouraged to access special leave to manage any disability.

Peformance management and development systems

Performance management and development system
Assessment of effectiveness and efficiency
Inspiring Future Awards
Recognising our people’s commitment to achieving a positive and high performing, values-based workplace
At the December 2016 awards, individual and team winners were rewarded with professional development opportunities for demonstrating excellence and alignment to agency values:
  • Our People Award (Individual) – Jun Yin, Project Delivery
  • Our Business Award (Team) – Asset Management Team, Property Management
  • Our Business Award (Individual) – Colleen McDonnell, Project Delivery
  • Our Culture Award (Team) – Tenant Relationship and Transition Unit, Strategy and Innovation
Leaning and development calendar
Alignted to Renewal SA's 5-year workforce strategy. All staff have access to development opportunities that build capacity now and for the future.

A calendar of health and wellbeing initiatives have been developed that align with nationally-celebrated awareness days, and address areas of health risk for our organisation.

Partnering for Performance Program (PPP)
Renewal SA's PPP reinforces the importance of values and behaviours while reinforcing the agency's strategic plan. The program provides staff with the opportunity to discuss a development plan to assist with any career aspirations across the government. Renewal SA is working towards all staff undertaking a PPP on a yearly basis. As at 30 June 2017, 100% staff had had a performance conversation.

OHS and rehabilitation programs

Occupational health, safety and rehabilitation programs
Program effectiveness
Work Health and Safety (WHS) committee

Renewal SA follows a risk management approach to its safety program, with extensive consultation through employee and management representation on our WHS committee.

Renewal SA’s return to work program is characterised by a focus on quality medical care for affected workers with a focus on a speedy return to pre-injury work.

Where joint duty of care exists between Renewal SA and other Persons Conducting a Business or Undertaking, extensive consulting and joint management forums are in place to manage safety proactively.

Potential safety impacts of our projects and activation programs on members of the public are also closely monitored.

Health and wellbeing program
In preparation for Renewal SA’s White Ribbon workplace accreditation, our health and wellbeing program had a substantive focus on equality and the prevention of gender based violence, both within and outside of the workplace.

Continuous offering of an Employee Assistance and Wellness Program that celebrates selected national and international days aligned with the organisation’s core value,including International Woman’s Day, Harmony day, International Day for Safety at Work and International Day for the Elimination of Violence against Women.

Preventative care program focussed on health screening and an influenza vaccinations program, to allow staff the option of accessing medical screening at work.

White Ribbon workplace accreditation

Renewal SA achieved White Ribbon Workplace Accreditation in March 2017.

Building on existing workplace policies on domestic violence, all People and Culture policies and procedures, communications and training are regularly reinforced to ensure ongoing sustainable behavioural change.

Implementation of Renewal SA’s White Ribbon operational plan, includes encouraging staff involvement in the White Ribbon campaign and organising events, is overseen by the Renewal SA White Ribbon Working Group.

Fraud detection

Whistle-blowers' disclosure

Executive employment

Executive employment data

Consultants

Consultants
Purpose
Value (ex-GST)
Consultancies below $10,000 each
Eight external consultants were engaged by Renewal SA in 2016-17 at a cost below $10,000 each.
$17,452.00
Consultancies above $10,000 each
Artis Group Pty Ltd
PMO - In - A - Box - Plan, Design & Proof of Concept Consultancy
$12,625.00
Bestec Pty Ltd
North Terrace Tree Lighting – Electrical Design Consultancy
$13,000.00
David McArdle Consulting
ORAH Evaluation Group Consulting Fee
$14,454.55
Energy Simplified
The Provision of Advisory Services – Review of Tonsley Electrical Reserved Capacity Options
$15,200.00
GTA Consultants (SA) Pty Ltd
Tonsley Traffic Consultancy Services
$19,300.00
Inside Infrastructure Pty Ltd
Northern Adelaide Recycled Water EOI
$20,000.00
KPMG
Economic Value of Renewal SA Report
$77,397.00
KPMG
Drafting of a Business Continuity framework
$19,760.00
Rider Levett Bucknall
ORAH - Site Demolition - Cost Management Services
$16,360.00
Tonkin Consulting
Soil Bank - Development Application - Stormwater Advice
$14,055.00
URPS
ORAH - DPA Drafting
$30,233,20
WSP Buildings Pty Ltd
Old Royal Adelaide Hospital (ORAH) Site Demolition, Remediation Planning and Design - Consultancy Services
$173,960.00
Total all consultancies
$443,796.75

Financial statements

The following statements should be read in conjunction with the accompanying notes, available in the PDF version of the 2016–17 Annual Report Appendix.

Statement of comprehensive income

For the year ended June 2017

Note
no.
2017
$’000
2016
$’000

Income

Revenue from sales 3 70,481 57,611
Less: cost of sales 3 36,935 28,869
Gross profit from sales 33,546 28,742
Share of net profit/(loss) in joint ventures 4 3,002 3,198
Revenues from Commonwealth and SA Government 5 6,750 9,403
Interest revenues 6 1,465 935
Property income 7 42,513 25,912
Other revenues 8 17,721 17,964
Net gain from disposal of non-current assets 9 1,319
Total other income 72,770 57,412
Net gain from transferred functions 37 548 637
Total income 106,864 86,791

Expenses

Employee benefits expenses 10 31,252 31,571
Operating expenditure 13 45,320 48,645
Borrowing costs 14 28,002 16,413
Depreciation and amortisation 21 473 491
Net loss from changes in value of non-current assets 4, 19, 20 20,744 142,790
Net loss disposal of non-current assets 9 33
Total expenses 125,791 239,943
Profit/Loss before income tax equivalent (18,927) (153,152)
Income tax equivalent
Profit/Loss after income tax equivalent (18,927) (153,152)
Total comprehensive result (18,927) (153,152)

The Profit/Loss After Income Tax Equivalent and Total Comprehensive Result are attributable to the SA Government as owner.

The above statement should be read in conjunction with the accompanying notes.

Statement of financial position

As at 30 June 2017

Note
no.
2017
$’000
2016
$’000

Current assets

Cash and cash equivalents 35 11,144 117,307
Receivables 18 13,145 14,487
Inventories 19 66,504 72,264
Work in progress 22 94
Investment in joint ventures 4 2,492 3,410
Total current assets 93,285 207,562

Non-current assets

Receivables 18 6,504 6,607
Inventories 19 247,654 233,961
Investment properties 20 719,505 146,580
Property, plant and equipment 21 2,061 2,416
Investment in joint ventures 4 168 349
Total non-current assets 975,892 389,913
Total assets 1,069,177 597,475

Current liabilities

Payables 24 20,760 15,517
Unearned income 27 6,149 3,121
Borrowings 25 161,280 115,894
Provisions 28 125 20,657
Employee benefits 29 4,516 4,426
Other liabilities 30 302 480
Total current liabilities
193,132 160,095

Non-current liabilities

Payables 24 545 554
Unearned income 27 4,846 5,877
Borrowings 25 749,621 402,750
Provisions 28 235 251
Employee benefits 29 5,917 5,999
Total non-current liabilities 761,164 415,431
Total liabilities
954,296 575,526
Net assets 114,881 21,949

Equity

Contributed capital 356,857 242,939
Retained earnings (241,976) (220,990)
Total equity
114,881 21,949

The total equity is attributable to the SA Government as owner.

  • Unrecognised contractual commitments – operating leases: note 31
  • Unrecognised contractual commitments – capital expenditure: note 32
  • Contingent liabilities: note 33

The above statement should be read in conjunction with the accompanying notes.

Statement of changes in equity

For the year ended 30 June 2017

Note
no.
Contributed capital
$’000
Retained earnings
$’000
Total
$’000
Balance at 30 June 2015 107,939 60,639 47,300
Loss after income tax equivalent for 2015-16 (153,152) (153,152)
Total comprehensive result for 2015-16 (153,152) (153,152)
Transactions with the SA Government in their capacity as owners:
  • Equity contribution
135,000 135,000
  • Dividends paid
17 (7,199) (7,199)
Balance as at 30 June 2016
242,939 (220,990) 21,949
Loss after income tax equivalent for 2016-17
(18,927) (18,927)
Total comprehensive result for 2016-17 (18,927) (18,927)
Transactions with the SA Government in their capacity as owners:
  • Equity contribution*
113,918 113,918
  • Dividends paid
17 (2,059) (2,059)
Balance as at 30 June 2017
356,857 (241,976) 114,881

All changes in equity are attributable to the SA Government as owner.

The above statement should be read in conjunction with the accompanying notes.

*Renewal SA received an equity contribution from the SA Government of $113.9 million during 2016–17 and $135 million during 2015–16 which were used to fund the acquisition of a portfolio of TAFE properties from the Department of State Development during 2016–17.

Statement of cash flows

For the year ended 30 June 2017

Note
no.
2017
$’000
2016
$’000

Cash flows from operating activities

Cash inflows
Receipts from sales 79,277 63,244
Receipts from SA Government 14,414 30,614
Interest received 1,508 382
Receipts from mortgage debtors (principle and interest) 538
Receipts from tenants (rent and recoveries) 50,601 20,872
Recoveries and sundry receipts 17,614 26,849
Funds held in trust 4 5
Receipts for paid parental leave scheme 53 83
GST recovered from the ATO 55,636 535
Cash generated from operations
219,107 143,122
Cash outflows
Payments for land purchase and development (76,092) (48,070)
Payments to SA Government (1,272)
Land tax paid (19,548) (20,648)
Interest paid (28,004) (22,834)
Payments to suppliers (29,600) (34,662)
Payments for employee benefits payments (33,149) (33,912)
Payments for paid parental leave scheme (54) (75)
Cash used in operations
(187,719) (160,201)
Net cash provided by/(used in) operating activities 34 31,388 (17,079)

Cash flows from investing activities

Cash inflows
Distributions of profit by joint ventures 4,101 6,024
Proceeds from the sale of investment properties 33,010
Cash generated from investing activities 37,111 6,024
Cash outflows
Purchase of property, plant and equipment and investment property (678,778) (35)
Payments for work in progress (15,418)
Cash used in investing activities (678,778) (15,453)
Net cash provided by/(used in) investing activities (641,667) (9,429)

Cash flows from financing activities

Cash inflows
Capital contributions received from SA Government 113,918 135,000
Proceeds from borrowings 516,694 17,000
Cash generated from financing activities 630,612 152,000
Cash outflows
Repayment of borrowings (124,437) (17,518)
Dividends paid to SA Government (2,059) (7,199)
Cash used in financing activities (126,496) (24,717)
Net cash provided by/(used in) financing activities 504,116 127,283
Net increase/(decrease) in cash held
(106,163) 100,775
Cash at the beginning of the financial year
117,307 16,532
Cash at the end of the financial year
35 11,144 117,307

The above statement should be read in conjunction with the accompanying notes.

Independent Auditor’s Report

To the Presiding Member
Urban Renewal Authority

As required by section 31(1)(b) of the Public Finance and Audit Act 1987 and section 27(1)(4) of the Urban Renewal Act 1995, I have audited the financial report of the Urban Renewal Authority for the financial year ended 30 June 2017.

Opinion

In my opinion, the accompanying financial report gives a true and fair view of the financial position of the Urban Renewal Authority as at 30 June 2017, its financial performance and it s cash flows or the year then ended in accordance with the Treasurer’s Instructions promulgated under the provisions of the Public Finance and Audit Act 1987 and Australian Accounting Standards.

The financial report comprises:

  • a Statement of Comprehensive Income for the year ended 30 June 2017
  • a Statement of Financial Position as at 30 June 2017
  • a Statement of Changes in Equity for the year ended 30 June 2017
  • a Statement of Cash Flows for the year ended 30 June 2017
  • notes, comprising significant accounting policies and other explanatory information
  • a Certificate from the Presiding Member, the Chief Executive and the General Manager, Corporate Services.

Basis for opinion

I conducted the audit in accordance wit the Public Finance and Audit Act 1987 and Australian Auditing Standards. My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of my report.

I am independent of the Urban Renewal Authority. The Public Finance and Audit Act 1987 establishes the independence of the Auditor-General. In conducting the audit, the relevant ethical requirements of APES 100 Code of Ethics for Professional Accountants have been met.

I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my opinion.

Responsibilities of the Chief Executive and the Members of the Board for the financial report

The Chief Executive is responsible for the preparation of the financial report that gives a true and fair view in accordance with the Treasurer’s Instructions promulgated under the provisions of the Public Finance and Audit Act 1987 and the Australian Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of the financial report the gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the Chief Executive is responsible for assessing the entity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the entity is to be liquidated or to cease operations, or has no realistic alternative but to do so.

The members of the Board are responsible for overseeing the entity’s financial reporting process.

Auditor’s responsibilities for the audit of the financial report

My objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

As part of an audit in accordance with Australian Auditing Standards, I exercise professional judgement and maintain professional scepticism throughout the audit.

I also:

  • identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsible to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than one resulting from error, as fraud may involve collusion, forger, intentional omissions, misrepresentations, or the override of internal control
  • obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances
  • evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Chief Executive
  • conclude on the appropriateness of the entity’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern
  • evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a matter that achieves fair presentation.

My report refers only to the financial report described above and does not provide assurances over integrity of electronic publication by the entity on any website nor does it provide an opinion on other information which may have been hyperlinked to/from the report.

I communicate with the Chief Executive and members of the Board regarding, among other matters, the planned scope and timing of the audits and significant audit findings, including any significant deficiencies in internal control that I identify during the audit.

(signed)
Andrew Richardson
Auditor-General
20 September 2017

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