This annual report is to be 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:
Damian De Luca
A/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
Renewal SA is responsible for leading and coordinating urban renewal activity to ensure future housing needs are met through better planned, affordable and vibrant mixed use (residential and commercial) urban developments located near transport, employment, education and other services.
Guided by The 30-Year Plan for Greater Adelaide, Renewal SA facilitates unique development opportunities for the private sector through access to government land holdings.
Renewal SA is creating jobs and opportunities for people to live within ten kilometres of the city with the aim of having more people living, working, visiting and investing in South Australia.
Accelerated urban renewal is achieved through ongoing partnerships with the private sector and not-for-profit housing sector, and an unwavering commitment to conversations and engagement with federal and state agencies, local communities, councils and, most importantly, individuals.
Objectives
- Focusing on marquee sites and creating premium places and iconic destinations.
- Facilitating medium to high urban infill development and areas with high concentrations of ageing social housing assets.
- Generating opportunities for non-government partners.
- Facilitating the supply of strategically located commercial and industrial land to support South Australia's economic and employment growth.
- Fostering urban regeneration.
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 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 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 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 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. |
Agency programs and initiatives and their effectiveness and efficiency
| Program name | Indicators of performance/ effectiveness/ efficiency | Outcome for South Australia |
|---|---|---|
Vibrant City Program
| Assisted 53 new small to medium businesses starting up in the city through Hub Adelaide, City Makers Case Management and Renew Adelaide. 16 City Makers applications funded to a total value of $110,000. 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 and investors. |
| Placemaking and activation | 57,000 people attended Winterfest at Port Adelaide between 14 and 23 July 2017. 5,000 attendees at Playford Alive Fun Day in November 2017. 40,000 visitors to the Urban Beach demonstration project at Pinky Flat in the Adelaide Riverbank between 1 December 2017 and 29 January 2018. 20,000 people visited Lot Fourteen (the former Royal Adelaide Hospital site) through a curated activation program between September 2017 and June 2018. 25,000 visitors to Tonsley Innovation District through major partnership events. | 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. |
| Renewal SA Works Program | 158 paid employment outcomes. 192 training places in programs. 271 work experience placements. 28 paid employment placements through Renewal SA contracts. $1.7 million in funding secured with partners. 70 work experience placements through Renewal SA contracts, | Established in 2008, the Works Program extends the benefits of Renewal SA's urban renewal activities by creating opportunities for local people, through training and work experience across varied industries including building and construction, horticulture, retail, childcare and health. |
| Community engagement | We demonstrated our intent to actively listen through various parts of the planning process, from concepts and early design to detailed master planning for a range of different projects throughout 2017-18. More than 1,300 people were engaged face to face through community forums such as drop-in sessions. A further 7,500 people were engaged through letterbox drops and electronic direct mail. | Renewal SA engages with organisations and the community to place people at the centre of urban planning and design. We pride ourselves on making a genuine attempt to engage and bring People along the journey through collaboration and honesty. |
| Affordable Housing | The Government of South Australia's policy of 15% affordable housing in significant developments has been integrated into the state planning system. As at 30 June 2018, affordable housing was included in 85% of greater Adelaide development plans. | 263 affordable homes were delivered during the 2017-18. This includes home ownership, and social rental including community housing. |
| Affordable Homes Program | The Affordable Homes Program continues to support eligible buyers in South Australia into home ownership. Improvements have been undertaken including a refresh of the Affordable Homes Program website, and a simplification of the declaration of eligibility | 144 Affordable Homes Program sales of land, new homes or exSANT stock to low-to-moderate income homebuyers. |
Legislation administered by the agency
Urban Renewal Act 1995
Housing and Urban Development (Administrative Arrangements) (Urban Renewal) Amendment Act 2013
South Australian Housing Trust Act 1995
South Australian Co-operative and Community Housing Act 1991
Community Housing Providers (National Law) (South Australia) Act 2013
Organisation of the agency
Renewal SA is established under the Urban Renewal Act 1995 as the Urban Renewal Authority (trading as Renewal SA). For the 2017-18 financial year, Renewal SA coordinated, managed and delivered activities and initiatives on behalf of three representative boards:
- Urban Renewal Authority Board of Management: Responsible for continual improvements in performance and protecting both the long term viability of, and the Governments financial and other interests in, the Urban Renewal Authority (trading as Renewal SA).
- Riverbank Authority Board of Management: Appointed to oversee the coordination of events, development and promotion of Adelaide's Riverbank precinct.
- South Australian Housing Trust (SAHT) Board: Created to help deliver more affordable homes and public housing for South Australians who are locked out of the housing market.
Appointed by the Governor, the Urban Renewal Authority Board of Management was subject to the control and direction of the Minister for Housing and Urban Development (from 1 July 2017 to 16 March 2018) and, following the election and change of Government, now reports to the Minister for Transport, Infrastructure and Local Government. 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 in Renewal SA.
Other agencies related to this agency (within the Minister's area/s of responsibility)
The SAHT is established under the South Australian Housing Trust Act 1995 (the SAHT Act) and is managed by the SAHT Board of Management. Under Section 17 of the SAHT Act, the SAHT has established a Service Level Administrative Arrangement (SLAA) with Renewal SA under which Renewal SA provides, on behalf of the SAHT, services for
- financial services;
- all asset and maintenance strategy;
- the development and delivery of projects that will renew the SAHT's housing stock; and
- management of not-for-profit community housing growth strategies and stock transfers.
Under the SLAA, the Department for Communities and Social Inclusion (DCSI) continues to deliver social housing services to tenants and customers, including property maintenance services as funded by the SAHT, through Housing SA. Housing SA also provides other key housing related programs and responsibilities, such as the Private Rental Assistance Program.
The Riverbank Authority is established under the Urban Renewal Act 1995 by the Housing and Urban Development (Administrative Arrangements) (Riverbank Authority) Regulations 2014. Renewal SA provides administrative and project delivery support to the Authority. An SLAA has been established to align the Riverbank Authority's policy framework to that of Renewal SA, to ensure operational efficiency and consistency. The Riverbank Authority Board of Management has adopted all Renewal SA policies except where specific activities are undertaken by the Riverbank Authority which warrant Riverbank Authority specific policies.
Employment opportunity programs
| Program name | Result of the program |
|---|---|
| Renewal SA Graduate Program | Renewal SA supports and regularly provides work experience placements for school and university students. In 2017-18, the agency continued the two year Graduate Program. To date, two graduates have successfully attained ongoing positions during their program term. |
| 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. |
Agency performance management and development systems
| Performance management and development system | Assessment of effectiveness and efficiency |
|---|---|
| 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 individual career aspirations. Over 55 per cent of Renewal SA employees reported participating in the program, compared to South Australian Public Sector average of 44.1 per cent (for the reporting period to 31 December 2017). |
Work health, safety and return to work programs of the agency and their effectiveness
| Program name and brief description | Effectiveness |
|---|---|
| Work Health Safety (WHS) Program | Renewal SA follows a risk management approach to its safety program, with extensive consultation through employee and management representation on our WHS committee |
| Health and Wellbeing Program | Renewal SA's health and wellbeing program continues to have a substantial focus on equality and the prevention of gender based violence, both within and outside of the workplace. Frontline customer care employees were trained in violence prevention and the de-escalation of work—related and domestic violence. Continuous offering of an Employee Assistance Program and a Wellness Program that celebrates selected national and international days aligned with the organisation's core values, including International Woman's Day, R U OK? Day and International Day for the Elimination of Violence against Women, were implemented. The preventative health care program focused on skin screening and an influenza vaccinations program, to allow staff the option of accessing medical screening at work. |
| White Ribbon Workplace Program | As an accredited White Ribbon workplace, Renewal SA continued to build on existing workplace policies to support victims of domestic violence. Support for victims of domestic violence and the prevention of violence against women are incorporated in all People and Culture policies and procedures. As a result of a staff engagement activity, Renewal SA now has a better understanding of how violence against women affects our staff. |
Work health and safety and return to work performance
| 2017-18 | 2016-17 | % Change (+ / -) | |
|---|---|---|---|
| Workplace injury claims | |||
| Total new workplace injury claims | 2 | 3 | -50% |
| Fatalities | 0 | 0 | 0% |
| Seriously injured workers* | 0 | 0 | 0% |
| Significant injuries (where lost time exceeds a working week, expressed as frequency rate per 1000 FTE) | 3.27 | 9.76 | -67% |
| Work health and safety regulation | |||
| Number of notifiable incidents (WHS Act 2012, Part 3) | 0 | 0 | 0% |
| Number of provisional improvement, improvement and prohibition notices (WHS Act 2012 Sections 90, 191 and 195) | 0 | 0 | 0% |
| Return to work costs** | |||
| Total gross workers compensation expenditure ($) | $57,463.80 | $190,524.83 | -70% |
| Income support payments — gross ($) | $3,910.82 | $95,026.68 | -96% |
*number of claimants assessed during the reporting period as having a whole person impairment of 30% or more under the Return to Work Act 2014 (Part 2 Division 5)
**before third party recovery
Data for previous years is available at: https://data.sa.qov.au/data/da...
Fraud detected in the agency
| Category/nature of fraud | Number of instances |
|---|---|
| No categories of fraud were detected in Renewal SA for 0 the 2017-2018 financial year | 0 |
Strategies implemented to control and prevent fraud
Renewal SA has a Fraud and Corruption: Prevention, Detection and Response Policy applying to both staff and suppliers, and undertakes fraud awareness training in order to prevent fraudulent behaviour.
Particular activities undertaken during the financial year include the following:
- New staff receive a compliance induction that includes an overview of obligations as a public officer to report instances of fraud in accordance with Renewal SA's
policies; - Online Fraud Awareness Training; and
- Internal audit conducted reviews and risk assessments on fraud prevention and control mechanisms as part of the audit program.
Data for previous years is available at: https://data.sa.gov.au/data/da...
Whistle-blowers' disclosure
| Number of occasions on which public interest information 0 has been disclosed to a responsible officer of the agency under the Whistle-blowers' Protection Act 1993 | 0 |
Data for previous years is available at: https://data.sa.gov.au/data/da...
Executive employment in the agency
| Executive classification | Number of executives |
|---|---|
| Executive | 5 |
Data for previous years is available at: https://data.sa.gov.au/data/da...
The Office of the Commissioner of Public Sector Employment has a data dashboard for further information on the breakdown of executive gender, salary and tenure by agency.
Consultants
The following is a summary of external consultants engaged by the agency, the nature of work undertaken and the total cost of the work.
| Consultancies below $10,000 each | ||
| 7 consultants engaged | Subtotal | $28,043.57 |
| Consultancies above $10,000 each | ||
| City Collective Pty Ltd | Retail and Hospitality Plan | $61,050.00 |
| Deloitte Access Economics | Due Diligence Report | $53,492.00 |
| Inside Infrastructure Pty Ltd | Recycled Water Cost and Benefit Study | $15,000.00 |
| Jensen Plus | Master Plan | $84,415.00 |
| KPMG | Accounting advice | $10,000.00 |
| Senversa Pty Ltd | Environmental Management Plan Technical Review | $12,549.00 |
| Tonkin Consulting | Traffic Impact Assessment | $43,182.00 |
| Woods Bagot Pty Ltd | Master Plan | $223,785.61 |
| Subtotal | $503,473.61 | |
| Total all consultancies | $531,517.18 |
See also the Consolidated Financial Report of the Department of Treasury and Finance http://treasury.sa.gov.au/ for total value of consultancy contracts across the SA Public Sector.
Financial performance of the agency
Renewal SA achieved an operating profit before tax of $29.4 million for the 2017-18 financial year. As a result, Renewal SA made dividend and income tax payments to the Government of $13.5 million during the financial year, which were based on budgeted profit.
Renewal SA also made payments to the Government for land tax, Local Government Rate Equivalents, Emergency Services Levy and Guarantee Fees on borrowings, totaling $36.9 million. Once these payments are included, total payments to the Government totaled $50.4 million in 2017-18.
The full year result is an improvement of $48.3 million on that achieved in the previous financial year and represents the third successive year of improvement in profitability.
The result was supported by $87.0 million of property sales, which is 23% higher than the previous financial year and represents the fifth consecutive year of increasing sales. Revaluations of land and property holdings contributed a positive $2.4 million to the result in 2017-18, a significant improvement on the revaluation outcomes in previous years. These outcomes are influenced by the maturation of Renewal SA's projects such as Tonsley, Bowden and Woodville West. The result also includes the full year impact of income from the portfolio of TAFE properties, which were purchased from the former Department of State Development in March 2016.
Other financial information
Nil to report.
Other information requested by the Minister(s) or other significant issues affecting the agency or reporting pertaining to independent functions
Nil to report.
Section B: Reporting required under any other act or regulation
Nil to report.
Section C: Reporting of public complaints as requested by the Ombudsman
Summary of complaints by subject
Public complaints received by Renewal SA
| Category of complaints by subject | Number of instances |
|---|---|
| No categories of complaints were received by or made 0 against Renewal SA for the 2017-2018 financial year | 0 |
Data for previous years is available at: https://data.sa.gov.au/data/da...
Complaint outcomes
| Nature of complaint or suggestion | Services improved or changes as a result of complaints or consumer suggestions |
|---|---|
| N/A | N/A |
Financial statements
Statement of Comprehensive Income
For the Year Ended 30 June 2018
| Note No. | 2018 $'000 | 2017 $'000 | |
|---|---|---|---|
| Income | |||
| Revenue from sales | 3 | 87,033 | 70,481 |
| Less: cost of sales | 3 | 48,938 | 36,935 |
| Gross Profit from Sales | 38,095 | 33,546 | |
| Share of net profit/(loss) in joint ventures | 4 | 1,110 | 3,002 |
| Revenue from SA Government | 5 | 9,111 | 6,750 |
| Interest revenues | 6 | 268 | 1,465 |
| Property income | 7 | 79,957 | 42,513 |
| Other revenues | 8 | 20,635 | 17,721 |
| Net gain from changes in value of non-current assets | 19, 20 | 2,442 | - |
| Net gain from disposal of non-current assets | 9 | 250 | 1,319 |
| Total Other Income | 113,773 | 72,770 | |
| Net gain from transferred functions | 36 | 325 | 548 |
| Total Income | 152,193 | 106,864 | |
| Expenses | |||
| Employee benefits expenses | 10 | 31,675 | 31,252 |
| Operating expenditure | 13 | 50,875 | 45,320 |
| Borrowing costs | 14 | 39,754 | 28,002 |
| Depreciation and amortisation | 21 | 495 | 473 |
| Net loss from changes in value of non-current assets | 19, 20 | - | 20,744 |
| Total Expenses | 122,799 | 125,791 | |
| Profit/(Loss) Before Income Tax Equivalent | 29,394 | (18,927) | |
| Income tax equivalent | 16 | 8,819 | - |
| Profit/(Loss) After Income Tax Equivalent | 20,575 | (18,927) | |
| Total Comprehensive Result | 20,575 | (18,927) |
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 2018
| Note No. | 2018 $'000 | 2017 $'000 | |
|---|---|---|---|
| Current Assets | |||
| Cash and cash equivalents | 34 | 42,050 | 11,144 |
| Receivables | 18 | 4,033 | 13,145 |
| Inventories | 19 | 73,837 | 66,504 |
| Work in progress | 22 | - | - |
| Investment in joint ventures | 4 | 2,736 | 2,492 |
| Total Current Assets | 122,656 | 93,285 | |
| Non-Current Assets | |||
| Receivables | 18 | 6,720 | 6,504 |
| Inventories | 19 | 241,230 | 247,654 |
| Investment properties | 20 | 716,160 | 719,505 |
| Property, plant and equipment | 21 | 1,874 | 2,061 |
Investment in joint ventures | 4 | 159 | 168 |
| Total Non-Current Assets | 966,143 | 975,892 | |
| Total Assets | 1,088,799 | 1,069,177 | |
| Current Liabilities | |||
| Payables | 24 | 21,375 | 20,760 |
| Unearned income | 27 | 6,287 | 6,149 |
| Borrowings | 25 | 174,218 | 161,280 |
| Provisions | 26, 28 | 5,784 | 125 |
| Employee benefits | 29 | 4,143 | 4,516 |
| Other liabilities | 30 | 458 | 302 |
| Total Current Liabilities | 212,265 | 193,132 | |
| Non-Current Liabilities | |||
| Payables | 24 | 21,375 | 20,760 |
| Unearned income | 27 | 6,287 | 6,149 |
| Borrowings | 25 | 174,218 | 161,280 |
| Provisions | 26, 28 | 5,784 | 125 |
| Employee benefits | 29 | 4,143 | 4,516 |
| Other liabilities | 30 | 458 | 302 |
| Total Non-Current Liabilities | 750,228 | 761,164 | |
| Total Liabilities | 962,493 | 954,296 | |
Net Assets | 126,306 | 114,881 | |
| Equity | |||
| Contributed capital | 356,857 | 356,857 | |
| Retained earnings | (230,551) | (241,976) | |
| Total Equity | 126,306 | 114,881 | |
| Total equity is attributable to the SA Government as owner | |||
| Unrecognised contractual commitments | 31 | ||
| Contingent liabilities | 32 |
The above statement should be read in conjunction with the accompanying notes.
Statement of Changes in Equity
For the Year Ended 30 June 2018
| Note No. | Contributed Capital $'000 | Retained Earnings $'000 | Total $'000 | |
|---|---|---|---|---|
| Balance as at 30 June 2016 | 242,939 | (220,990) | 21,949 | |
| 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 | |
| Total Comprehensive Result for 2017-18 | - | 20,575 | 20,575 | |
| Transactions with the SA Government in their capacity as owners: | ||||
| Equity contribution | - | - | - | |
| Dividends paid | 17 | - | (9,150) | (9,150) |
| Balance as at 30 June 2018 | 356,857 | (230,551) | 126,306 |
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 which was used to partly 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 2018
| Note No. | 2018 $'000 | 2017 $'000 | |
|---|---|---|---|
| Cash Flows from Operating Activities | |||
| Cash Inflows | |||
| Receipts from sales | 96,766 | 79,277 | |
| Receipts from SA Government | 28,045 | 14,414 | |
| Interest received | 286 | 1,508 | |
| Receipts from tenants (rent and recoveries) | 102,160 | 50,601 | |
| Recoveries and sundry receipts | 22,217 | 17,614 | |
| Funds held in trust | 4 | 4 | |
| Receipts for paid parental leave scheme | 43 | 53 | |
| GST recovered from the ATO | - | 55,636 | |
| Cash Generated from Operations | 249,521 | 219,107 | |
| Cash Outflows | |||
| Payments for land purchase and development | (49,792) | (76,092) | |
| Payments to SA Government | (4,300) | (1,272) | |
| Land tax paid | (20,955) | (19,548) | |
| Interest paid | (36,399) | (29,600) | |
| Payments to suppliers | (36,399) | (29,600) | |
| Payments for employee benefits payments | (33,826) | (33,149) | |
| Payments for paid parental leave scheme | (46) | (54) | |
| GST paid to the ATO | (9,052) | - | |
| Cash Used in Operating Activities | (195,551) | (187,719) | |
| Net Cash Provided by Operating Activities | 33 | 53,970 | 31,388 |
Cash Flows from Investing Activities | |||
| Cash Inflows | |||
| Distributions of profit by joint ventures | 875 | 4,101 | |
| Proceeds from the sale of investment properties | 2,100 | 33,010 | |
| Cash Generated from Investing Activities | 2,975 | 37,111 | |
| Cash Outflows | |||
| Purchase of investment property | - | (678,421) | |
| Purchase of plant and equipment | (308) | (357) | |
| Cash Used in Investing Activities | (308) | (678,778) | |
| Net Cash provided by/(used in) Investing Activities | 2,667 | (641,667) | |
| Cash Flows from Financing Activities | |||
| Cash Inflows | |||
| Capital contributions received from the SA Government | - | 113,918 | |
| Proceeds from borrowings | 144,700 | 516,694 | |
| Cash Generated from Financing Activities | 144,700 | 630612 | |
| Cash Outflows | |||
| Repayment of borrowings | (161,281) | (124,437) | |
| Dividends paid to SA Government | (9,150) | (2,059) | |
| Cash Used in Financing Activities | (170,431) | (126,496) | |
| Net Cash (Used in)/Provided by Financing Activities | (25,731) | 504,116 | |
| Net Increase/(Decrease) in Cash Held | 30,906 | (106,163) | |
| Cash at the beginning of the financial year | 11,144 | 117,307 | |
| Cash at the End of the Financial Year | 34 | 42,050 | 11,144 |
Note Index
| Note | 1 | Objectives of the Urban Renewal Authority |
| Note | 2 | Summary of Significant Accounting Policies |
| Note | 3 | Revenue from Sales and Cost of Sales |
| Note | 4 | Joint Ventures |
| Note | 5 | Revenues from SA Government |
| Note | 6 | Interest Revenues |
| Note | 7 | Property Income |
| Note | 8 | Other Revenues |
| Note | 9 | Net Gain/(Loss) from Disposal of Assets |
| Note | 10 | Employees Benefits Expenses |
| Note | 11(a) | Key Management Personnel |
| Note | 11(b) | Remuneration of Board and Committee Members |
| Note | 12 | Related Party Disclosure |
| Note | 13 | Operating Expenditure |
| Note | 14 | Borrowing Costs |
| Note | 15 | Auditors Remuneration |
| Note | 16 | Income Tax Equivalent |
| Note | 17 | Dividends paid to SA Government |
| Note | 18 | Receivables |
| Note | 19 | Inventories |
| Note | 20 | Investment Properties |
| Note | 21 | Property, Plant and Equipment |
| Note | 22 | Work in Progress |
| Note | 23 | Fair Value Management |
| Note | 24 | Payables |
| Note | 25 | Borrowings |
| Note | 26 | Tax Liabilities |
| Note | 27 | Unearned Income |
| Note | 28 | Provisions |
| Note | 29 | Employee Benefits |
| Note | 30 | Other Liabilities |
| Note | 31 | Unrecognised Contractual Commitments |
| Note | 32 | Contingent Liabilities |
| Note | 33 | Cash Flow Reconciliation |
| Note | 34 | Cash and Cash Equivalents |
| Note | 35 | Financial Instruments Disclosure/Financial Risk Management |
| Note | 36 | Transferred Functions |
| Note | 37 | Transactions with SA Government |
| Note | 38 | Events after the Reporting Period |
Note 1 Objectives of the Urban Renewal Authority
The Urban Renewal Authority (trading as Renewal SA) is a statutory corporation established under the Urban Renewal Act 1995 (the Act). In accordance with the Act, Renewal SA's Board of Management is appointed by His Excellency the Governor and comprises up to seven members, including a Presiding Member. The Presiding Member reports to the Minister for Housing and Urban Development. Renewal SA's functions contained in the Act include;
- The development of residential, commercial and industrial land in the public interest, particularly for urban renewal purposes
- The facilitation of public and private sector investment, undertaking development activities which are attractive to potential investors and participating in the development of the State
- Managing the orderly development of areas through the management and release of land
- Holding land and other property to be made available as appropriate as commercial, industrial, residential or other purposes.
In undertaking its functions, Renewal SA will make a significant contribution to creating a vibrant city, safe communities, healthy neighbourhoods, an affordable place to live, and growing advanced manufacturing. Renewal SA has the responsibility for leading and co-ordinating urban renewal activity to ensure that our future housing needs are met through better planned, affordable and vibrant mixed use (residential and commercial) urban developments located near to transport, employment, education and other services.
In performing its functions, Renewal SA provides services to other State Government agencies, including the South Australian Housing Trust and the Riverbank Authority, under service level administrative arrangements. Changes to these services will occur after reporting date - refer Note 38.
Note 2 Summary of Significant Accounting Policies
2.1 Statement of Compliance
These financial statements have been prepared in compliance with section 23 of the Public Finance and Audit Act 1987.
The financial statements are general purpose financial statements. The accounts have been prepared in accordance with relevant Australian Accounting Standards and comply with Treasurer's Instructions and Accounting Policy Statements promulgated under the provisions of the Public Finance and Audit Act 1987.
Renewal SA has applied Australian Accounting Standards that are applicable to for-profit entities, as Renewal SA is a for-profit entity.
2.2 Basis of Preparation
Renewal SA's Statement of Comprehensive Income, Statement of Financial Position and Statement of Changes in Equity have been prepared on an accural basis are in accordance with the historical cost convention, except for certain assets that have been revalued.
The Statement of Cash Flows has been prepared on a cash basis.
The financial statements have been prepared based on a twelve month operating cycle and presented in Australian currency.
The accounting policies set out below have been applied in preparing the financial statements for the year ended 30 June 2018 and the comparative information presented.
2.3 Rounding
All amounts in the financial statements and accompanying notes have been rounded to the nearest thousand dollars ($'000).
2.4 Taxation
In accordance with Treasurer's Instruction 22 Tax Equivalent Payments, Renewal SA is required to pay to the SA Government an income tax equivalent. The income tax liability is based on the State Taxation Equivalent Regime, which applies the accounting profit method. This requires that the corporate income tax rate be applied to the net profit. The current income liability, if applicable, relates to the income tax expense outstanding for the current period (refer Note 26).
Renewal SA is liable for payroll tax, fringe benefits tax, goods and services tax (GST), emergency services levy, land tax and local government rate equivalents.
Income, expenses and assets are recognised net of the amount of GST except:
- when the GST incurred on the purchase of goods or services is not recoverable from the Australian Taxation Office, in which case the GST is recongised as part of the cost of acquisition of the asset or as part of the expense item applicable.
- receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the Australian Taxation Office is included as part of receivables or payables in the Statement of Financial Position.
Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which are recoverable from, or payable to, the Australian Taxation Office are classified as part of operating cash flows.
Unrecognised commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the Australian Taxation Office. If GST is not payable to or recoverable from the Australian Taxation Office, the commitments and contingencies are disclosed on a gross basis.
2.5 Current and Non-Current Classification
Assets and liabilities are characterised as either current or non-current in nature. Renewal SA has a clearly identifiable operating cycle of 12 months. Assets and liabilities that are to be sold, consumed or realised as part of the normal operating cycle, even when they are not expected to be realised within twelve months after the reporting date, have been classified as current assets or current liabilities. All other assets and liabilities are classified as non-current.
Where asset and liability line items combine amounts expected to be realised within 12 months and more than 12 months, Renewal SA has separately disclosed the amounts expected to be recovered or settled after more than 12 months.
2.6 Assets
Assets have been classified according to their nature and have not been offset unless required or permitted by a specific accounting standard, or where offsetting reflects the substance of the transaction or other event.
Acquisition and recognition of non-current assets (other than inventories)
Non-current assets are initially recorded at cost or at the value of any liabilities assumed, plus any incidental cost involved with the acquisition. Non-current assets are subsequently measured at fair value after allowing for accumulated depreciation.
All non-current tangible assets with a value equal to or in excess of $10,000 are capitalised.
All non-current assets, having limited useful life, are systematically depreciated over their useful lives in a manner that reflects the consumption of their service potential. Depreciation is applied to tangible assets such as property, plant and equipment.
Where non-current assets are acquired at no, or minimum value, they are recorded at fair value in the Statement of Financial Position. However, if the non-current assets are acquired as part of a restructuring of administrative arrangements then the non-current assets are recognised at the book value recorded by the transferor, immediately prior to transfer.
Impairment (other than inventories)
All non-current assets are tested for indications of impairment at each reporting date. Where there is an indication of impairment, the recoverable amount is estimated. The recoverable amount is determined as the higher of the asset's fair value less costs of disposal and depreciated replacement cost. An amount by whihc the asset's carrying amount exceeds its recoverable amount is recorded as an impairment loss.
Non-financial assets
In determining fair value, Renewal SA has taken into account the characteristics of the asset (for example condition and location of the asset and any restrictions on the sale or use of the asset) and the asset's highest and best use (that is physically possible, legally permissible and financially feasible).
Renewal SA's current use is the highest and best use of the asset unless other factors suggest an alternative use is feasible within the next five years.
The carrying amount of non-financial assets with a 'fair value at the time of acquisition that was less than $1 million or an estimated useful life that was less than three years' are deemed to approximate fair value.
Refer to Notes 20, 21 and 23 for disclosure regarding fair value measurement techniques and inputs used to develop fair value measurement for non-financial assets.
2.7 Liabilities
Liabilities have been classified according to their nature and have not been offset unless required or permitted by a specific accounting standard, or where offsetting reflects the substance of the transaction or other event.
2.8 New and Revised Accounting Standards and Policies
Renewal SA did not voluntarily change any of its accounting policies during 2017-18.
Australian Accounting Standards and interpretations that have recently been issued or amended but not yet effective, have not ben adopted by Renewal SA for the period ending 30 June 2018. Renewal SA has assessed the impact of the new and amended standards and interpretations and considers there will be no impact on the accounting policies or the financial statements of Renewal SA, except as outlined below.
AASB 16 Leases will apply for the first time for the reporting period beginning 1 July 2019. The new standard introduces a single accounting model for lessees. The standard requires a lessee to recognise assets and liabilities for all leases with a single term of more than 12 months, unless the underlying asset is of low value. A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset, and a lease liability representing its obligaitons to make lease payments. In effect, the majority of leases currently classified as operating leases will be reported on the Statement of Financial Position.
AASB 16 sustainability carries forward the lessor accounting requirements in AASB 117 Leases.
This new standard is a significant change from the past accounting for leases. It will require Renewal SA to record almost all operating lease arrangements in the financial statements. Renewal SA has not yet quantified the impact of applying AASB 16 to its current operating lease arrangements on the financial statements.
AASB 15 Revenue from Contracts with Customers will apply for the first time for the reporting period beginning 1 July 2018. This new standard replaces AASB and AASB 111, and introduces a five-step process for revenue recognition. The core principle of the new standard is to recognise revenue "when control of a good or service transfer to a customer". This is effectively when performance obligations have been met, rather than the current model of "where the risk and rewards of ownership reside".
The financial statements will include additional qualitative and quantitative disclosures under the revised standard. AASB 15 allows a cumulative approach instead of a full retrospective application. Under the cumulative approach there will be no need to restate comparative information but the cumulative effect of applying the standard will be recognised as an adjustment to the opening balance of accumulated surplus at the date of initial application. The new revenue recognition requirements may impact on the timing and amount of revenue from the sale of goods and services. Renewal SA will assess the full impact of applying AASB15 during the 2018/19 financial year.
Note 3 Revenue from Sales and Cost of Sales
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Sales revenue for the reporting period is summarised as follows: | ||
| Land sales to: | ||
| Joint ventures | 7,689 | 9,902 |
| Entities within the SA Government | 5,085 | 21,465 |
| Other - sales to general public and developers | 74,259 | 39,114 |
| Total Sales Revenue | 87,033 | 70,481 |
| Cost of sales associated with: | ||
| Joint ventures | 888 | 1,306 |
| Entities within the SA Government | 3,275 | 6,230 |
Other - sales to general public and developers | 44,775 | 29,399 |
| Total Cost of Sales | 48,938 | 36,935 |
Sales revenue comprises revenue earned from the sale of land for residential, commercial and community purposes, including land made available for joint venture developments. Revenue for land sales is recognised when settlement is completed and legal file transfers to the purchaser.
Cost of sales comprise all direct material acquisition, development and relevant holding costs in respond of inventory sold during the reporting period. The carrying amount of inventories held for sale are expensed as cost of sales when settlement occurs. A portion of future development obligations in respect of land which has been sold is also recognised in cost of sales when settlement occurs, where applicable. Assumptions of future costs and revenues involve an element of professional judgement when estimating cost of sales for long life projects.
Note 4 Joint Ventures
Renewal SA's share of the profit from ordinary activities of joint ventures in which Renewal SA has a participating interest, is as follows:
| Northgate Stage 3 Joint Venture | Northgate Stage 3 Joint Venture | Total for all Joint Ventures | Total for all Joint Ventures | |
|---|---|---|---|---|
| 2018 $'000 | 2017 $'000 | 2018 $'000 | 2017 $'000 | |
| Revenues | 13,603 | 13,474 | 13,603 | 13,575 |
| Expenses | (12,493) | (10,573) | (12,493) | (10,573) |
| Profit from Ordinary Activities | 1,110 | 2,901 | 1,110 | 3,002 |
Movements in Renewal SA's investment in joint ventures during the reporting period are summarised as follows:
| Share of investment in join ventures: | ||||
| Carrying amount at the beginning of the period | 2,660 | 3,759 | 2,660 | 3,759 |
| Profit for the reporting period | 1,110 | 2,901 | 1,110 | 3,002 |
| Distribution of profit | (875) | (4,000) | (875) | (4,101) |
| Total Carrying Amount of Investment in Joint Ventures | 2,895 | 2,660 | 2,895 | 2,660 |
Renewal SA's investment in joint ventures is represented by its share of assets and liabilities as follows:
| Northgate Stage 3 Joint Venture | Northgate Stage 3 Joint Venture | Total for all Joint Ventures | Total for all Joint Ventures | |
|---|---|---|---|---|
| 2018 $'000 | 2017 $'000 | 2018 $'000 | 2017 $'000 | |
| Current assets: | ||||
Cash | 5,053 | 3,331 | 5,053 | 3,331 |
| Receivables | 493 | 522 | 493 | 522 |
| Inventories | 10,765 | 7,655 | 10,765 | 7,655 |
| 16,311 | 11,508 | 16,311 | 11,508 | |
| Non current assets: | ||||
| Property, plant and equipment | 159 | 168 | 159 | 168 |
| 159 | 168 | 159 | 168 | |
| Total Assets | 16,470 | 11,676 | 16,470 | 11,676 |
| Current liabilities: | ||||
| Creditors and other payables | 13,575 | 9,016 | 13,575 | 9,016 |
| Total Liabilities | 13,575 | 9,016 | 13,575 | 9,016 |
| Net Assets | 2,895 | 2,660 | 2,895 | 2,660 |
| Impairment | - | - | - | - |
| Net Assets after Impairment | 2,895 | 2,660 | 2,895 | 2,660 |
Renewal SA's interest in joint ventures is measured by applying the equity method. Renewal SA's share of the assets and liabilities of joint ventures in which it has a participating interest is included in the Statement of Financial Position as investment in joint ventures. Renewal SA's hare of net profit from joint ventures is included as revenue in the Statement of Comprehensive Income as share of net profit/(loss) in joint venutres.
Join venture income is recognised when the right to receive payment is established.
Northgate Stage 3 Joint Venture
In July 2006 documentation was executed with CIC Northgate Pty Ltd, a wholly-owned subsidiary of CIC Australia Limited, to establish a joint venture to develop the land subdivision component of Precinct One at Northgate Stage 3. The project primarily comprises the subdivision and sale of residential allotments and integrated housing sites together with the development of reserves and associated community facilities.
Renewal SA has a 50% interest in the joint venture. Under the terms of the agreements for the joint venture, Renewal SA will make available to the joint venture land for development and receive progressive land payments as development proceeds.
Note 5 Revenues from SA Government
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Community service obligations from SA Government | 27,631 | 13,038 |
| Other SA Government revenues | 423 | 366 |
| Gross Revenues from SA Government | 28,054 | 13,404 |
| Less: Revenue deferred for inventory development costs | (18,943) | (6,654) |
| Total Revenue from SA Government | 9,111 | 6,750 |
(a) Community Service Obligations
Renewal SA is required under its Charter to provide a number of non-commercial services to the community on behalf of the SA Government. The SA Government provides Renewal SA with funding to compensate for these non-commercial activities. Non-commercial activities include the provision of infrastructure, sustainable energy development and precinct and urban planning works.
Community service obligations are recognised at their fair value where there is a reasonable assurance that the funding will be received and Renewal SA will comply with all attached conditions.
Community service obligations relating to costs are deferred and recognised in the Statement of Comprehensive Income over the period necessary to match them with the costs that they are intended to compensate. Inventory development costs funded by community service obligations are capitalised against inventories and recognised in the Statement of Comprehensive Income as cost of sales when inventory is sold during the reporting period.
(b) Other SA Government Revenues
SA Government revenues relating to costs are deferred and recognised in the Statement of Comprehensive Income over the period necessary ot match them with the costs that they are intended to compensate.
Grants from SA Government are recognised at their fair value where there is a reasonable assurance that the grant will be received and Renewal SA will comply with all attached conditions.
Note 6 Interest Revenues
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Interest from operating accounts | 268 | 1,465 |
| Total Interest Revenues | 268 | 1,465 |
Interest revenue includes interest received on bank term deposits, interest from investments, interest from mortgage debtor receivables, and other interest received.
Note 7 Property Income
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Rental income | 69,707 | 35,095 |
| Recoveries | 10,249 | 7,385 |
| Other property income | 1 | 33 |
| Total Property Income | 79,957 | 42,513 |
Property income arising from investment properties is accounted for on a straight-line basis over the lease term. Income received in advance is disclosed as unearned income to the extent that it relates to future accounting periods.
Note 8 Other Revenues
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Consulting revenue | 5,698 | 5,662 |
| Employee services | 11,160 | 10,387 |
| Recoveries | 126 | 456 |
| Other revenue | 3,651 | 1,216 |
| Total Other Revenues | 20,635 | 17,721 |
Consulting revenue represents the recovery of costs incurred by Renewal SA on a fee for service basis for services provided to various State Government entities including the South Australian Housing Trust.
Employee services revenue represents the direct recovery of employee costs from the South Australian Housing Trust.
Other revenue is derived from the provision of goods and services to the public and other SA Government agencies. This revenue is recognised upon delivery of the service or by reference to the stage of completion and is brought to account when earned.
All contributions from non-government entities are recognised as income when Renewal SA obtains control of the contribution or the right to receive the contribution and the income recognition criteria are met.
Note 9 Net Loss/Gain from Disposal of Assets
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Plant and equipment | ||
| less net book value of assets disposed | - | (333) |
Net Loss from Disposal of Plant and Equipment | - | (333) |
| Investment properties: | ||
| Proceeds from disposal | 2,100 | 33,010 |
| Let net book value of assets disposed and lease incentive write off | (1,850) | (31,358) |
| Net Gain from Disposal of Completed Assets | 250 | 1,652 |
| Total Net Gain from Disposal of Assets | 250 | 1,319 |
Income from the disposal of plant and equipment and investments is recognised when full control of the asset has passed to the buyer and is determined by comparing proceeds with carrying amount.
Sales revenue from the disposal of investment properties is recognised when settlement is completed and legal title transfers to the purchaser.
Note 10 Employee Benefits Expenses
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Salaries and wages | 27,098 | 25,245 |
| Long service leave | 470 | 986 |
| Annual leave | 1,661 | 2,196 |
| Skills and experience retention leave | 173 | 49 |
| Employment on-costs - superannuation | 2,888 | 2,764 |
| Employment on-costs - other | 1,656 | 1,677 |
| Board and committee fees | 282 | 283 |
| Other employee related expenses | (176) | 53 |
| Gross Employee Benefits Expense | 34,052 | 33,253 |
| Less: Employee benefits capitalised to inventories | (2,377) | (2,001) |
| Total Employee Benefits Expenses | 31,675 | 31,252 |
The superannuation employment on-cost charge represents Renewal SA's contributions to superannuation plans in respect of current services of current employees.
Targeted Voluntary Separation Packages (TVSPs)
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Amount paid to staff | ||
| TVSPs | 7 | 82 |
| Leave paid to those employees | 2 | 14 |
| Net Cost to Renewal SA | 9 | 96 |
| Number if employees who received a TVSP during the reporting period was: | 1 | 1 |
Remuneration of Employees
| 2018 No: | 2017 No: | |
|---|---|---|
| The number of employees whose remuneration received or receivable falls within the following bands: | ||
| $147,000 to $149,000^ | n/a | - |
| $149,001 to $159,000 | 3 | 3 |
| $159,001 to $169,000 | 9 | 9 |
| $169,001 to $179,000 | 3 | 8 |
| $179,001 to $189,000 | 3 | 1 |
| $189,001 to $199,000 | - | 1 |
| $199,001 to $209,000 | 1 | 2 |
| $209,001 to $219,000 | 4 | 2 |
| $219,001 to $229,000 | 2 | - |
| $259,001 to $269,000 | - | 2 |
| $269,001 to $279,000 | 2 | 1 |
| $279,001 to $289,000 | - | 1 |
| $289,001 to $299,000 | 1 | 1 |
| $299,001 to $309,000 | 1 | - |
| $399,001 to $409,000 | 1 | - |
| $409,001 to $419,000 | - | 1 |
| Total Number of Employees | 30 | 32 |
^This band has been included for the purposes of reporting comparative figures based on the executive base level remuneration rate for 2016-17.
The table includes all employees who received remuneration equal to or greater than the base executive remuneration level during the year. Remuneration of employees reflects all costs of employment including salaries and wages, payments in lieu of leave, superannuation contributions, salary sacrifice benefits and fringe benefits and any fringe benefits tax paid or payable in respect of those benefits. The total remuneration received by these employees for the year was $6.082 million (2017: $6.324 million).
Note 11(a) Key Management Personnel
Key management personnel of Renewal SA include the Minister for Housing and Urban Development, members of the Urban Renewal Authority Board of Management, the Chief Executive and the members of the senior management team (including the Chief Executive) that have responsibility for the strategic direction and management of Renewal SA.
Key Management Personnel Compensation
The compensation detailed below excludes salaries and other benefits to the Minister for Housing and Urban Development. The Minister's remuneration and allowances are set by the Parliamentary Remuneration Act 1990 and the Remuneration Tribunal of SA respectively and are payable from the Consolidated Account (Via the Department of Treasury and Finance) under section 6 of the Parliamentary Remuneration Act 1990.
Key management personnel compensation for the period ended 30 June 2018 and 2017 is set out below.
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Salaries and other short-term employee benefits | 1,708 | 1,680 |
| Post-employment benefits | 159 | 155 |
| Total Employee Benefits | 1,867 | 1,835 |
Note 11(b) Remuneration of Board and Committee Members
Board Members
The following persons held the position of government board member during the financial year:
Hon B J Pike, Presiding Member
H M Fulcher
P A Baker
R L Boorman (resigned June 2018)
G R Knight
D J McArdle
T R Groom
Remuneration of Governing Board Members
The number of government board members whose remuneration received or receivable falls within the following bands:
| 2018 No: | 2017 No: | |
|---|---|---|
| $30,000 to $39,999 | 6 | 6 |
| $70,000 to $79,999 | 1 | 1 |
| Total Number of Governing Board Members | 7 | 7 |
Total remuneration received and receivable by all governing board members for the period they held office was $0.310 million (2017: $0.310 million) which includes superannuation contributions.
Remuneration of Committee Members
Renewal SA has not paid additional remuneration to committee members for their role on committees for the financial year ending 30 June 2018 and 30 June 2017.
Note 12 Related Party Disclosure
Related parties of Renewal SA include all key management personnel and their close family members, all public authorities that are controlled and consolidated into the whole of government financial statements and other interests of the Government.
Significant Transactions with Government Related Entities
Renewal SA had the following significant transactions with South Australian Government entities:
In March 22018, the former Royal Adelaide Hospital site was transferred to Renewal SA from the Department for Health and Wellbeing for nil consideration.
Community Service Obligation funding was received from the Department of Treasury and Finance of $27.6 million. (refer Note 5)
Rental Income of $53.8 million was received from the Department of State Development relating to the TAFE properties.
Quantitative information about collectively significant transactions and balances between Renewal SA and other SA Government entities are disclosed at Note 37.
Transactions with Key Management Personnel and Other Related Parties
There were no reportable transactions between Renewal SA and any Key Management Personnel and other related parties during the financial year.
Remuneration of Key Management Personnel is described in Note 11(a).
Note 13 Operating Expenditure
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Property expenditure | 14,369 | 14,212 |
| Land tax | 20,955 | 19,548 |
| Contractors and consultants | 2,155 | 1,342 |
| Accommodation costs | 1,769 | 1,389 |
| Administration and other expenditure | 13,749 | 12,221 |
| Gross Supplies and Service Expenditure | 52,997 | 48,712 |
| Less: Land tax capitalised to inventories | (2,122) | (3,392) |
| Total Operating Expenditure | 50,875 | 45,320 |
External Consultants
The number and dollar amount of consultancies paid/payable (included in operating expenditure) that fell within the following bands:
| 2018 Number | 2018 $'000 | 2017 Number | 2017 $'000 | |
|---|---|---|---|---|
| Below $10,000 | 7 | 28 | 37 | 119 |
| Above $10,000 | 8 | 503 | 15 | 429 |
| Total Paid/Payable to the Consultants Engaged | 15 | 531 | 52 | 548 |
Note 14 Borrowing Costs
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Borrowing costs on Premises SA Scheme loans | 467 | 725 |
| Borrowing costs on other loans | 26,706 | 17,837 |
| Borrowing costs on overdraft | 10 | 586 |
| Guarantee fees on Premises SA Scheme loans | 116 | 284 |
| Guarantee fees on other loans | 14,349 | 9,999 |
| Guarantee fees on overdraft | 10 | 481 |
| Gross Borrowing Costs | 41,658 | 29,912 |
| Less: Borrowing costs capitalised to inventories | (1,904) | (1,910) |
| Total Finance Costs | 39,754 | 28,002 |
Borrowing costs include interest expense and guarantee fees paid to the South Australian Government.
In accordance with Accounting Policy Framework II General Purpose Financial Statements Framework and AASB 123 Borrowing Costs, borrowing costs attributable to the construction of a qualifying asset are capitalised if they are expected to result in a future economic benefit. Borrowing costs are expensed where it is expected that the costs incurred will not be recovered. All other borrowing costs are expensed when incurrec.
A qualifying asset is an asset that makes a substantial period of time to be ready for its intended use or sale.
Note 15 Auditors Remuneration
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Audit fees paid/payable to the Auditor-General's Department | 345 | 212 |
| Total Audit Fees | 345 | 212 |
Audit fees paid/payable to the Auditor-General's Department relating to work performed under the Public Finance and Audit Act 1997 were $0.345 million (2017: $0.212 million). Included in the fees is $0.196m for the financial statements audit and $0.149m paid for other reviews.
Note 16 Income Tax Equivalent
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Income tax equivalent | 8,819 | - |
| Total Income Tax Equivalent | 8,819 | - |
In accordance with Treasurer's Instruction issued under the Public Finance and Audit Act 1987, Renewal SA is required to pay to the SA Government an income tax equivalent. The income tax liability is based on the Treasurer's accounting profit method, which requires that the corporate income tax rate (presently 30.0%) be applied to the profit for the reporting period.
Renewal SA reported a financial loss for the year ended 30 June 2017 and therefore no income tax equivalent was payable in that reporting period.
Note 17 Dividends Paid to SA Government
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Dividends paid | 9,150 | 2,059 |
| Total Dividends Paid to SA Government | 9,150 | 2,059 |
Pursuant to the Urban Renewal Act 1995, Renewal SA must make a recommendation to the Minister before the end of each year regarding the payment of a dividend for that financial year. In 2017-18 the Minister approved a dividend payment of $7.588 million relating to an operating dividend of 90% on Renewal SA's forecast after-tac profit for 2017-18. Renewal SA did not pay an annual divided in 2016-17 due to a loss in that financial year.
Renewal SA is required to make special dividend payments associated with the Adelaide Station and Environs Redevelopment (ASER) site. In 2017-18 the Minister approved a dividend payment of $1.562 million in relation to the year ended 30 June 2018. In 2016-17 the Minister approved a dividend payment of $2.059 million.
Note 18 Receivables
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Current | ||
| Trade and other receivables | 2,013 | 6,328 |
| Operating lease receivables | 4,152 | 4,418 |
| Employee related services recoverable | 1,650 | 1,404 |
| Provision for doubtful debts | (3,794) | (3,469) |
| Prepayments | 12 | 4,464 |
| Total Current Receivables | 4,033 | 13,145 |
| Non-Current | ||
| Operating lease receivables | 3,874 | 4,035 |
| Employee related services recoverable | 2,846 | 2,469 |
| Total Non-Current Receivables | 6,720 | 6,504 |
| Total Receivables | 10,753 | 19,649 |
Movement in the Allowance for Doubtful Debts
The allowance for doubtful debts (allowance for impairment loss) is recognised when there is objective evidence that a receivable is impaired. An allowance for impairment loss has been recognised for specific debtors and debtors assessed on a collective basis for which such evidence exists.
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Carrying amount at the beginning of the period | 3,469 | 2,674 |
| Increase in the allowance | 325 | 795 |
| Carrying Amount at the End of the Period | 3,794 | 3,469 |
| Bad debts written off: | ||
| Trade debtors | - | 56 |
| Transfer to provision for doubtful debts: | ||
| Trade debtors | 325 | 795 |
| Total Bad and Doubtful Debts Expense | 325 | 851 |
Receivables include amounts receivable from goods and services, GST input tax credits recoverable, prepayments and other accruals, measured at historical cost.
Receivables arise in the normal course of selling goods and services to the public and other SA Government agencies. Receivables are generally settled within 30 days after the issue of an invoice or the goods/services have been provided under a contractural agreement.
Collectability of receivables is reviewed on an ongoing basis. An allowance for doubtful debts is raised when there is objective evidence that Renewal SA will not be able to collect the debt. Bad debts are written off when identified.
Interest Rate and Credit Risk
Receivables are raised for all goods and services provided for which payment has not been received. Receivables are normally settled within 30 days. Trade receivables, prepayments and accrued revenues are non-interest bearing. Other than as recognised in the allowance for doubtful debts, it is not anticipated and counterparties will fail to discharge their obligations. The carrying amount of receivables approximates net fair value due to being receivable on demand. There is no concentration of credit risk.
Categorisation and Maturity Analysis of Financial Instruments
Refer to table in Note 35.
Ageing Analysis of Financial Assets
Refer to table in Note 35.
Risk Exposure Information
Refer to table in Note 35.
Note 19 Inventories
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Current | ||
| Land held for sale | 28,860 | 26,386 |
| Development projects | 44,977 | 40,118 |
| Total Current Inventories | 73,837 | 66,504 |
| Non-Current | ||
| Land held for sale | 179,388 | 182,568 |
| Development projects | 61,842 | 65,086 |
| Total Non-Current Inventories | 241,230 | 247,654 |
| Total Inventories | 315,067 | 314,158 |
Movements in Carrying Amounts:
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Carrying amount at the beginning of the period | 314,158 | 306,225 |
| Land purchases | 9,487 | 722 |
| Development costs capitalised | 55,367 | 53,298 |
| Community service obligations for development costs | (18,943) | (6,654) |
| Cost of sales | (48,938) | (36,935) |
| Inventory write down | (4,754) | (17,900) |
| Reversal of inventories write down | 8,690 | 15,402 |
| Carrying Amount at the End of the Period | 315,067 | 314,158 |
Inventories were reviewed at 30 June 2018 to ensure they are carried at the lower of cost and net realisable value (NRV).
The write-downs on $4.754 million and reversal of previous write downs of $8.69 million in 2017-18 are as a result of the annual review of the recoverable values of inventory and future cash flows for projects.
Inventories include land and other property held for sake in the ordinary course of business. It excludes depreciating assets and investment properties.
Inventories are measured at the lower of cost or their net realisable value. Net realisable value is determined using the estimated sales proceeds less costs incurred in producing, marketing and selling to customers. Net realisable value (NRV) is determined on each individual asset/project by independent valuable or via an internal cash flow valuation.
The amount of any inventory write-down to NRV or inventory losses are recognised as an expense in the period the write-down or loss occurred. Any write-down reversals are recognised as an expense reduction.
In March 2018, the former Royal Adelaide Hospital site was transferred to Renewal SA from the Department for Health and Wellbeing for nil consideration.
The following are specific recognition criteria:
Land held for sale
Land held for sale is carried at the lower cost or NRV. Costs comprise all direct material acquisition, development and holding costs offset by deferred Government grants relating to these costs. NRV is the estimated selling price in the ordinary course of business less both the estimated costs of completion and the estimated cost necessary to make the sale. Renewal SA reviews its inventory balances at balance date and writes off inventory where the NRV is less than the carrying amount. The NRV for land holdings at risk of being carried in excess of NRV was determined by an independent valuation of its market value less selling costs.
All land inventory is classified as a non-current asset unless its value is anticipated to be realised through sale within 12 months.
Where inventory was acquired at no or nominal consideration as part of a restructuring of administrative arrangements, the inventory was recorded at the value recorded by the transferor, immediately prior to transfer or fair value.
Development Projects
Development Projects are large projects that require significant capital investment in order to realise sales revenue over an extended period of time. Development Projects are carried at the lower of cost or NRV. Costs comprise all direct material acquisition, development and holding costs offset by deferred Government grants relating to these costs. NRV is the estimated selling price in the ordinary course of business less both the estimated costs of completion and the estimated cost necessary to make the sale. Renewal SA reviews its inventory balances at balance date and writes off inventory where NRV is less than the carrying amount. The NRV for land holdings at risk of being carried in excess of net realisable value was determined by an internal cash flow valuation based on the current delivery strategy for each project.
In determining the NRV via an internal valuation, the expected net cash flows from the development and sale of land, buildings and improvements in the ordinary course of business are discounted to their present values using a risk-adjusted discount rate. The rate is assessed annual having regard to appropriate risk factors.
The ordinary course of business delivery method and assumptions for each project could change due to market conditions or a change in policy or project strategy which could change the NRV. Where the NRV of a project is below the current inventory value, the difference is recognised as write down of inventory and an expense in the Statement of Comprehensive Income.
All development projects are classified as a non-current asset unless its value is anticipated to be realised through sale within 12 months.
Note 20 Investment Properties
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Freehold Land at Fair Value: | ||
| Independent valuation | 193,739 | 198,099 |
| Total Freehold land at Fair Value | 193,739 | 198,099 |
| Buildings at Fair Value: | ||
| Independent valuation | 522,421 | 521,406 |
| Total Buildings at Fair Value | 522,421 | 521,406 |
| Total Investment Properties | 716,160 | 719,505 |
Movements in Carrying Amounts
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Freehold land at fair value: | ||
| Carrying amount at the beginning of the period | 198,099 | 73,554 |
| Transfer from buildings | - | 293 |
Additions | - | 137,750 |
| Disposals | (850) | (6,479) |
| Net loss on fair value adjustments | (3,510) | (7,019) |
| Carrying Amount at the End of the Period | 193,739 | 198,099 |
| Buildings at fair value: | ||
| Carrying amount at the beginning of the period | 521,406 | 73,026 |
| Additions | - | 481,534 |
| Transfer to freehold land | - | (293) |
| Disposals | (1,000) | (21,634) |
| Net gain / (loss) on fair value adjustments | 2,015 | (11,227) |
| Carrying Amount at the End of the Period | 522,421 | 521,406 |
| Total Carrying Amount at the End of the Period | 716,160 | 719,505 |
| Amounts Recognised in the Statement of Comprehensive Income | ||
| Property Income (refer to Note 7) | 68,912 | 31,386 |
| Direct operating expenses arising from investment properties that generated rental income (refer Note 13) | (4,529) | (4,583) |
| Direct operating expenses arising from investment properties that did not generate rental income (refer Note 13) | (11) | (48) |
Investment properties are held to earn rentals and/or for capital appreciation purposes.
Investment properties are initially recognised at cost. Costs incurred subsequent to initial acquisition are capitalised when it is probable that future economic benefits in excess of the originally assessed performance of the asset will flow to Renewal SA.
Subsequent to initial recognition at cost, investment properties are revalued to fair value with changes in the fair value recognised as income or expense in the period that they arise. Investment properties are not depreciated.
Rental income from the leasing of investment properties is recognised in the Statement of Comprehensive Income as part of property income, on a straight-line basis over the lease term.
Any gains or losses on the sale of investment property are recognised in the Statement of Comprehensive Income in the year of sale.
Where investment property was acquired at no or nominal consideration as part of a restructuring of administrative arrangements, the investment property was recorded at the value recorded by the transferor, immediately prior to transfer.
Valuation Basis
An independent valuation of all Renewal SA's investment properties was conducted as at 30 June 2018. Valuations of all investment properties were undertaken by qualified Certified Practicing Valuers with extensive experience in the local market with equivalent properties. Valuations were carried out in accordance with the relevant provisions of the Australian Property Institute of Australia and New Zealand's Valuation and Property Standards and as per AASB 140 Investment Property. The valuer arrived at fair value using either the direct comparison, capitalisation of net income, depreciated replacement cost or discounted cash flow approach.
Note 21 Property, Plant and Equipment
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Leasehold Improvements | ||
| At cost (deemed fair value) | 3,162 | 3,162 |
| Accumulated amortisation | (2,107) | (1,770) |
| Total Leasehold Improvements | 1,055 | 1,392 |
| Plant and Equipment | ||
| At cost (deemed fair value) | 1,277 | 969 |
| Accumulated depreciation | (458) | (300) |
| Total Plant and Equipment | 819 | 669 |
| Total property, plant and equipment at cost (deemed fair value) | 4,439 | 4,131 |
| Total accumulated depreciation | (2,565) | (2,070) |
| Total Property, Plant and Equipment | 1,874 | 2,061 |
Carrying Amount of Leasehold Improvements and Plant and Equipment
The carrying value of these items are deemed to approximate fair value. These assets are classified in level 3, of the fair value hierarchy, as there has bee no subsequent adjustments to their value, except for management assumptions about the assets' condition and remaining useful life.
All plant and equipment, having a limited useful life, are systematically depreciated/amortised over their useful lives in a manner that reflects the consumption of their service potential. Amortisation is used in relation to assets such as leasehold improvements, while depreciation is applied to tangible assets such as plant and equipment.
Assets' residual values, useful lives and amortisation methods are reviewed and adjusted if appropriate, on an annual basis.
Changes to the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for prospectively by changing the time period or method, as appropriate, which is a change in accounting estimate.
Depreciation/Amortisation is calculated on a straight-line basis over the estimated useful life of the following classes of assets as follows:
| Class of Asset | Depreciation Method | Useful Life (Years) |
|---|---|---|
| Leasehold improvements | Straight Line | Life of lease |
| Plant and equipment | Straight Line | 5 - 10 years |
| Furniture and fittings | Straight Line | 5 - 10 years |
| Computer equipment | Straight Line | 5 years |
Impairment
There were no indications of impairment of leasehold improvements or plant and equipment as at 30 June 2018.
Movements in Carrying Amounts
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Leasehold improvements: | ||
| Carrying amount at the beginning of the period | 1,392 | 1,729 |
| Amortisation | (337) | (337) |
| Carrying Amount at the End of the Period | 1,055 | 1,392 |
| Plant and Equipment | ||
| Carrying amount at the beginning of the period | 669 | 687 |
Additions | 308 | 357 |
| Transfers from work in progress (see Note 22) | - | 94 |
| Disposals | - | (333) |
| Depreciation | (158) | (136) |
| Carrying Amount at the End of the Period | 819 | 669 |
| Total Property, Plant and Equipment | 1,874 | 2,061 |
Plant and equipment includes $0.183m (2017: $0.164m) of fully depreciated assets still in use.
Note 22 Work in Progress
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Construction projects in progress | - | - |
| Total Work in Progress | - | - |
Movements in Carrying Amounts:
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Carrying amount at the beginning of the period | - | 94 |
| Transfers to property plant and equipment (see Note 21) | - | (94) |
| Carrying Amount at the End of the Period | - | - |
Expenditure associated with the construction of investment properties held for operational purposes is capitalised as work in progress as incurred. When a project of this nature reaches practical completion (which generally coincides with the commencement of the building defects liability period), the accumulated costs are transferred from work in progress to investment properties.
Note 23 Fair Value Measurement
AASB Fair Value Measurement, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, in the principal or most advantageous market, at the measurement date.
Renewal SA classifies fair value measurement using the following fair value hierarchy that reflects the signficance of the inputs used in making the measurements, based on the data and assumptions used in the most recent revaluation:
- Level 1 - traded in active markets and is based on unadjusted quoted prices in active markets for identical assets or liabilities that the entity can access at measurement date.
- Level 2 - not traded in an active market and are derived from inputs (inputs rather than quoted prices included within level 1) that are observable for the asset, either directly or indirectly.
- Level 3 - not traded in an active market and are derived from unobservable inputs.
Fair Value Hierarchy
The fair value of non-financial assets must be estimated for recognition, measurement and disclosure purposes. Renewal SA categorises non-financial assets measured at fair value into a hierarchy based on the level of inputs used in measurement as follows.
Fair Value Measurements at 30 June 2018
| 2018 $'000 | Level 2 $'000 | Level 3 $'000 | |
|---|---|---|---|
| Recurring Fair Value Measurement | |||
| Investment properties (Note 20) | 716,160 | 716,160 | - |
| Leasehold improvements (Note 21) | 1,055 | - | 1,055 |
| Plant and equipment (Note 21) | 819 | - | 819 |
Total Recurring Fair Value Measurements | 718,034 | 716,160 | 1,874 |
Fair Value Measurements at 30 June 2017
| 2017 $'000 | Level 2 $'000 | Level 3 $'000 | |
|---|---|---|---|
| Recurring Fair Value Measurement | |||
| Investment properties (Note 20) | 719,505 | 719,505 | - |
| Leasehold improvements (Note 21) | 1,392 | - | 1,392 |
| Plant and equipment (Note 21) | 669 | - | 669 |
Total Recurring Fair Value Measurements | 721,566 | 719,505 | 2,061 |
Renewal SA's policy is to recognise transfers into and out of fair value hierarchy levels as at the end of the reporting period. During 2017 and 2018, Renewal SA had no valuations categorised into level 1 and there were no transfers of assets between level 1 and 2 fair value hierarchy levels during the financial year.
Valuation Techniques and Inputs
Refer to Notes 20 and 21 for valuation techniques and inputs used to derive level 2 and 3 fair values. During 2017 and 2018 there were no changes in valuation techniques during the financial year. Although unobservable inputs were used in determining fair value, and are subjective, Renewal SA considers that the overall valuation would not be materially affected by changes to the existing assumptions. The following table is a recociliation of fair value measurements using significant unobservable inputs (level 3).
Reconciliation of Level 3 Recurring Fair Value Measurements as at 30 June 2018
| Leasehold Improvements $'000 | Plant & Equipment $'000 | |
|---|---|---|
| Opening Balance at the Beginning of the Period | 1,392 | 669 |
| Acquisitions | - | 308 |
| Total gains (losses) for the period recognised in net result | ||
| Depreciation and amortisation expenses | (337) | (158) |
| Carrying Amount at the End of the Period | 1,055 | 819 |
Reconciliation of Level 3 Recurring Fair Value Measurements as at 30 June 2017
| Leasehold Improvements $'000 | Plant & Equipment $'000 | |
|---|---|---|
| Opening Balance at the Beginning of the Period | 1,729 | 687 |
| Acquisitions | - | 357 |
| Transfers from work in progress (see Note 22) | - | 94 |
| Disposals | - | (333) |
| Total gains (losses) for the period recognised in net result: | ||
| Depreciation and amortisation expenses | (337) | (136) |
Carrying Amount at the End of the Period | 1,392 | 669 |
Note 24 Payables
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Current | ||
| Trade creditors | 5,470 | 6,517 |
| Sundry creditors and accrued expenses | 11,741 | 11,311 |
| GST payable | 3,455 | 2,174 |
Parental leave scheme | - | 3 |
| Employment on costs | 709 | 755 |
| Total Current Payables | 21,375 | 20,760 |
| Non-Current | ||
| Employment on costs | 617 | 545 |
| Sundry creditors and accrued expenses | 7,255 | - |
| Total Non-Current Payables | 7,872 | 545 |
| Total Payables | 29,247 | 21,305 |
Payables include creditors, accrued expenses, employment on-costs and Paid Parental Leave Scheme payable.
Creditors represent the amounts owing for goods and services received prior to the end of the reporting period that are unpaid at the end of the reporting period and where an invoice has not been received.
The Paid Parental Leave Scheme payable represents amounts which Renewal SA has received from the Commonwealth Government to forward onto eligible employees via Renewal SA's standard payroll processes. That is, Renewal SA is acting as a conduit through which the payment to eligible employees is made on behalf of the Family Assistance Office.
All payables are measured at their nominal amount and are normally settled within 30 days from the date of the invoice or date the invoice is first received.
Employee benefits on-costs include payroll tax, Return to Work SA levies and superannuation contributions in respect of outstanding liabilities for salaries and wages, long service leave, annual leave and skills and experience retention leave.
As a result of an actuarial assessment performed by the Department of Treasury and Finance, the proportion of long service leave taken as leave was 41% (2017: 40%) and the average factor for the calculation of employer superannuation costs on-cost has changed from the 2017 rate (10.1%) to 9.9%. These rates are used in the employment on-cost calculation. The net financial effect of the change in the current financial year is an increase in the employment on-cost and employee benefits expense of $0.062 million.
Renewal SA makes contributions to several State Government and externally managed superannuation schemes. These contributions are treated as an expense when they occur. There is no liability for payments to beneficiaries as they been assumed by the respective superannuation schemes. The only liability outstanding at balance date relates to any contributions due but no yet paid to various superannuation schemes.
Interest Rate and Credit Risk
Creditors and accruals are raised for all amounts billed and unpaid. Sundry creditors are normally settled within 30 days. Employment on-costs are settled when the respective employee benefits that they relate to is discharged. All payables are non-interest bearing. The carrying amount of payables represents fair value due to the amounts being payable on demand.
Categorisation of Financial Instruments and Maturity Analysis of Payables
Refer to table in Note 35.
Risk Exposure Information
Refer to table in Note 35.
Note 25 Borrowings
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Current | ||
Loans - South Australian Government Financing Authority (a) | 618 | 580 |
| Loans - South Australian Government Financing Authority (b) | 173,600 | 160,700 |
| Total Current Borrowings | 174,218 | 161,280 |
| Non-Current | ||
| Loans - South Australian Government Financing Authority (a) | 6,401 | 7,020 |
| Loans - South Australian Government Financing Authority (b) | 713,701 | 742,601 |
| Total Non-Current Borrowings | 720,102 | 749,621 |
| Total Borrowings | 894,320 | 910,901 |
Renewal SA measures financial liabilities including borrowings/debt at historical cost. Financial liabilities that are due to mature within 12 months after the reporting date have been classified as current liabilities. All other financial liabilities are classified as non-current.
(a) Comprises borrowings from the South Australian Government Financing Authority (SAFA) in respect of funding for industrial and commercial construction projects under the Premises SA Scheme.
(b) Comprises borrowings from SAFA in respect of other activities of Renewal SA/
Borrowings are recognised at cost and have fixed maturity dates. The interest rate is determined by the Treasurer. The interest rate varied between 1.9% and 6.2% in 2018. (1.9% and 6.2% in 2017).
Categorisation of Financial Instruments and Maturity Analysis of Borrowings
Refer to table in Note 35.
Risk Exposure Information
Refer to Note 35.
Defaults and Breaches
There were no defaults or breaches on any of the above borrowings during the year.
Note 26 Tax Liabilities
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Provision for income tax equivalent | 4,519 | - |
| Total Tax Liabilities | 4,519 | - |
In accordance with Treasurer's Instructions issued under the Public Finance and Audit Act 1987, Renewal SA is required to pay to the SA Government an income tax equivalent. The income tax liability is based on the Treasurer's accounting profit method, which requires that the corporate income tax rate (presently 30.0%) be applied top the profit for the reporting period.
Renewal SA made a financial loss for the year ended 30 June 2017 and therefore no income tax equivalent was payable in that reporting period.
Note 27 Unearned Income
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Current | ||
| Unearned income | 6,287 | 6,149 |
| Total Current Unearned Income | 6,287 | 6,149 |
| Non-Current | ||
| Unearned income | 15,530 | 4,846 |
| Total Non-Current Unearned Income | 15,530 | 4,846 |
| Total Unearned Income | 21,817 | 10,995 |
Unearned income includes rental income and revenues from SA Government received in advance. Rental income from the leasing of inventories and investment properties is recognised in the Statement of Comprehensive Income as part of property income, on a straight-line basis over the lease term. Government grants relating to costs are deferred and recognised in the Statement of Comprehensive Income over the period necessary to match them with the costs that tehy are intended to compensate.
Unearned income includes rental income of $21.554 million (2017: $10.964 million) and revenues from SA Government of $0.263 million (2017: $0.031 million) received in advance.
Movements in Carrying Amounts
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Carrying amount at the beginning of the period | 10,995 | 8,998 |
| Received during the year | 16,844 | 5,017 |
| Recognised in the statement of comprehensive income | (6,022) | (3,020) |
| Carrying Amount at the End of the Period | 21,817 | 10,995 |
Note 28 Provisions
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Current | ||
| Provision for workers compensation | 15 | 125 |
| Provision for expenditure | 1,250 | - |
| Total Current Provisions | 1,265 | 125 |
| Non-Current | ||
| Provision for workers compensation | 23 | 235 |
| Total Non-Current Provisions | 23 | 235 |
| Total Provisions | 1,288 | 360 |
Movements in Carrying Amounts
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Provision for workers compensation | ||
| Carrying amount at the beginning of the period | 360 | 383 |
| Increase/(Decrease) in provisions recognised | (266) | 138 |
| Reductions arising from payments | (56) | (161) |
| Carrying Amount at the End of the Period | 38 | 360 |
| Provision for land acquisition costs | ||
| Carrying amount at the beginning of the period | - | 20,525 |
| Increase/(Decrease) in provisions recognised | - | (20,525) |
| Carrying Amount at the End of the Period | - | - |
| Provision for expenditure | ||
| Increase/(Decrease) in provisions recognised | 1,250 | - |
Carrying Amount at the End of the Period | 1,250 | - |
| Total Provisions | 1,288 | 360 |
Provisions are recognised when Renewal SA has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the reporting date.
A liability has been reported to reflect unsettled workers compensation claims. The workers compensation provision is based on an actuarial assessment of the outstanding liability as at 30 June 2018 provided by a consulting actuary engaged through the Office for the Public Sector (a division of the Department of Premier and Cabinent). The provision is for the estimated cost of ongoing payments to employees as required under the current legislation,
Renewal SA has recognised a provision of $1.25 million being for potential settlement of a legal claim.
Note 29 Employee Benefits
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Current | ||
| Accrued wages and salaries | 505 | 603 |
| Annual leave | 2,940 | 2,859 |
| Long service leave | 544 | 935 |
| Skills and experience retention leave | 154 | 119 |
Total Current Employee Benefits | 4,143 | 4,516 |
| Non-Current | ||
| Long service leave | 6,701 | 5,917 |
| Total Non-Current Employee Benefits | 6,701 | 5,917 |
| Total Employee Benefits | 10,844 | 10,433 |
These benefits accrue for employees as a result of services provided up to the reporting date that remain unpaid. Long-term employee benefits are measured at present value and short-term employee benefits are measured at nominal amounts.
Salaries and wages, annual leave, skills and experience retention leave and sick leave
Liabilities for salaries and wages is measured as the amount unpaid at the reporting date at remuneration rates current at reporting date. The annual leave liability and skills and experience retention leave liability are expected to be payable within 12 months and is measured at the undiscounted amount expected to be paid/
No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees is estimated to be less than the annual entitlement of sick leave.
Long service leave
The liability for long service leave is measured at the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method.
The estimated liability for long service leave is based on actuarial assumptions over expected future salary and wave levels, experience of employee departures and periods of service. These assumptions are based on employee data for SA Government entities. Expected future payments are discounted using the projected unit credit method.
The portion of the long service leave liability classified as current represents the amount that may be expected to be paid as leave taken or paid on termination of employment during Renewal SA's normal operating cycle.
AASB 119 Employee Benefits describes the calculation methodology for long service liability. The actuarial assessment performed by the Department of Treasury and Finance has provided a basis for the measurement of long service leave liability. AASB 119 requires the use of the yield on long term Commonwealth Government bonds as the discount rate in the measurement of the long service liability. The yield on long term Commonwealth Government bonds remains unchanged at 2.5%. As a result, there is no net financial effect resulting from changes in the yield on long term Commonwealth Bonds.
The net financial effect of the changes in actuarial assumptions in the current financial year is a decrease in the long service leave liability of $0.076 million and employee benefits expense of $0.022 million. The impact on future periods is impracticable to estimate as the long service leave liability is calculated using a number of assumptions - a key assumption is the long-term discount rate.
The actuarial assessment performed by the Department of Treasury and Finance left the salary inflation rate at 4% for long service liaiblity and 3% annual leave and skills, experience and retention leave liability. As a result, there is no net financial effect resulting from changes in the salary inflation rate.
Employee benefit on-costs
Employee benefit on-costs (payroll tax and superannuation) are recognised separately in payables. (Note 24)
Note 30 Other Liabilities
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Current | ||
| Funds held in trust | 306 | 302 |
| Security deposits | 152 | - |
| Total Current Other Liabilities | 458 | 302 |
| Total Other Liabilities | 458 | 302 |
These funds are being held in trust on behalf of the Minister for Housing and Urban Development. The funds are to be disbursed by Renewal SA to the developer of the land formerly occupied by the Cheltenham racecourse upon achievement of key deliverables related to affordable housing and the development of open spaces.
Security deposits are cash bonds held relating to property assets.
Note 31 Unrecognised Contractual Commitments
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Operating Lease Receivables | ||
| Future minimum rental revenues under non-cancellable operating property leases held at balance date but not provided for in the accounts: | ||
| Due within one year | 64,326 | 62,113 |
| Due later than one year not longer than five years | 257,391 | 254,688 |
| Due later than five years | 567,300 | 622,127 |
| Total Operating Lease Receivables | 889,017 | 938,928 |
| Operating Lease Payables | ||
| Non-cancellable operating leases contracted for at balance date but not provided for in the accounts: | ||
| Payable within one year | 1,462 | 1,340 |
| Payable later than one year not longer than five years | 2,417 | 3,229 |
| Payable later than five years | - | - |
| Total Operating Lease Payables | 3,879 | 4,569 |
These amounts comprise of property leases and leases for motor vehicles. The property leases are non-cancellable and will expire on 31 December 2020, with rent payable monthly in advance. Motor vehicles are leased over varying terms up to three years.
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Total Capital Expenditure Commitments | ||
| Payable within one year | 14,371 | 11,443 |
| Payable later than one year not longer than five years | 340 | 11,324 |
| Payable layer than five years | 2,793 | 1,166 |
| Total Capital Expenditure Commitments: | 17,504 | 23,933 |
Commitments include operating, capital and outsourcing commitments arising from contractual or statutory sources and are disclosed at their nominal value/
Unrecognised contractual commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to the Australian Taxation Office. If GST is not payable to, or recoverable from the Australian Taxation Office, the commitments and contingencies are disclosed on a gross basis.
Note 32 Contingent Liabilities
Legal Claim
Renewal SA is in dispute with a party who has asserted a legal claim against it for $5 million. Renewal SA disputes liability for this claim and has engaged the Crown Solicitors Office in relation to this matter.
Note 33 Cash Flow Reconciliation
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Reconciliation of Cash and Cash Equivalents at the End of the Reporting Period: | ||
| Statement of Cash Flows | 42,050 | 11,144 |
| Statement of Financial Position | 42,050 | 11,144 |
| Reconciliation of profit/(loss) after income tax equivalent to net cash provided by/(used in) operating activities: | ||
| Profit/(loss) after income tax equivalent | 20,575 | (18,927) |
| 20,575 | (18,927) | |
| Add/Less Non Cash Items | ||
| Inventories write down | 4,754 | 17,899 |
| Net gain from administrative restructure | (325) | (548) |
| Depreciation and amortisation | 495 | 473 |
| Net loss on disposal of plant and equipment | - | 333 |
| Provision for doubtful debts | 325 | 795 |
| Share of net profits in joint ventures | (1,110) | (3,002) |
| Provision adjustment | 5,503 | (20,387) |
| Net gain on disposal of investment property | (250) | (1,652) |
| Reversal of inventories write-down | (8,690) | (15,402) |
| Investment property net loss on fair value adjustments | 1,495 | 18,246 |
| 2,197 | (3,245) | |
| Movements in Assets / Liabilities | ||
| (Increase)/Decrease in other receivables | 4,119 | 4,486 |
| (Increase)/Decrease in prepayments | 4,452 | (3,836) |
| (Increase)/Decrease in inventories | 3,352 | (9,882) |
| (Increase)/Decrease in investment properties | - | 55,892 |
| (Increase)/Decrease in payables | 7,942 | 5,234 |
| (Increase)/Decrease in unearned income | 10,822 | 1,997 |
| (Increase)/Decrease in provisions | (56) | (161) |
| (Increase)/Decrease in employee benefits | 411 | 8 |
| (Increase)/Decrease in other liabilities | 156 | (178) |
| 31,198 | 53,560 | |
| Net Cash Provided by/(Used in) Operating Activities | 53,970 | 31,338 |
Note 34 Cash and Cash Equivalents
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Current | ||
| Deposits with the Treasurer | 21,372 | 8,524 |
| Short-term deposits with SAFA | 18,097 | 335 |
| Cash held in Cheltenham trust account | 306 | 302 |
| Cash at bank and on hand | 2,275 | 1,983 |
| Total Cash and Cash Equivalents | 42,050 | 11,144 |
Cash assets include short-term highly liquid investments with maturities of three months or less that are readily converted to cash and which are subject to insignificant risk of changes in value. For the purposes of the Statement of Cash Flows, cash and equivalents consists of cash and cash equivalents as defined above.
Cash is measured at nominal value.
Deposits with the Treasurer
Includes funds held in Renewal SA's operating account.
Short-term Deposits
Short-term deposits are made for varying periods of between one day and three months. These deposits are lodged with SAFA and earn the respective short-term deposit rates.
Cash at Bank and on Hand
Cash at bank and on hand include petty cash and cash received from property managers for net rental income on Renewal SA properties.
Interest Rate Risk
Cash at bank and on hand is non-interest bearing. Deposits at call and with the Treasurer, and cash held in the Cheltenham Trust Account, earn a floating interest rate based on daily bank deposit rates. The carrying amount of cash and cash equivalents represents fair value.
Note 35 Financial Instruments Disclosure/Financial Risk Management
35.1 Financial Risk Management
Renewal SA is exposed to a variety of financial risks, i.e. market risk, credit risk and liquidity risk. There have been no changes to risk exposure since the last reporting period, and due to the nature of financial instruments held, the financial risks are low.
Renewal SA's risk management policies are in accordance with the Risk Management Policy Statement used by the Premier and Treasurer and the principles established in the Australian Standard Risk Management Principles and Guidelines.
35.2 Categorisation of Financial Instruments
Details of the significant accounting policies and methods accepted including the criteria for recognition. the basis of measurement, and the basis of which income and expenses are recognised with respect to each class of financial asset, financial liability and equity instrument are disclosed in respective notes.
Refer to Note 35.3 for the carrying amounts of each of the following categories of financial assets and liabilities: loan and receivables; and financial liabilities measured at cost.
Renewal SA does not recognise any financial assets or financial liabilities at fair value but does disclose fair value in the Notes.
All of the resulting fair value estimates are included in level 2 as all significant inputs required are observable. Refer to Note 23 for information on Renewal SA's fair value measurement hierarchy.
- the carrying value less impairment provisions of receivables and payables is a reasonable approximation of their fair values due to their short-term nature (refer Notes 18 and 24).
- borrowings are recognised at historical cost, plus any transaction costs directly attributable to the borrowings. The fair value of borrowings approximates the carrying amount, as the impact of discounting is not significant (refer Note 25).
35.3 Categorisaiton and Maturity Analysis of Financial Assets and Liabilities
| Note | Carrying Amount $'000 | 2018 Contractual Maturities < 1 year $'000 | 2018 Contractual Maturities 1-5 years $'000 | 2018 Contractual Maturities > 5 years $'000 | Fair Value $'000 | |
|---|---|---|---|---|---|---|
| 2018 Financial Assets: | ||||||
| Cash and cash equivalents | 34 | 42,050 | 42,050 | - | - | 42,050 |
| Loans and receivables: | ||||||
| Receivables (a) (b) | 18 | 10,040 | 6,165 | 697 | 3,178 | 9,406 |
| Allowance for doubtful debts | 18 | (3,794) | (3,794) | - | - | (3,794) |
| Total Financial Assets | 48,296 | 44,421 | 697 | 3,178 | 47,662 | |
| Financial Liabilities: | ||||||
| Financial liabilities at cost: | ||||||
| Payables (a) | 24 | 24,268 | 17,013 | 7,255 | - | 24,268 |
| Borrowings | 25 | 894,320 | 174,218 | 370,102 | 350,000 | 758,043 |
| Total Financial Liabilities | 918,588 | 191,231 | 377,357 | 350,000 | 783,043 | |
| Net Financial Assets/(Liabilities) | (870,292) | (146,810) | (376,660) | (346,822) | (735,381) |
| Note | Carrying Amount $'000 | 2017 Contractual Maturities < 1 year $'000 | 2017 Contractual Maturities 1-5 years $'000 | 2017 Contractual Maturities > 5 years $'000 | Fair Value $'000 | |
|---|---|---|---|---|---|---|
| 2017 Financial Assets: | ||||||
| Cash and cash equivalents | 34 | 11,114 | 11,114 | - | - | 11,114 |
| Loans and receivables: | ||||||
| Receivables (a) (b) | 18 | 14,781 | 10,746 | 4,035 | - | 14,282 |
| Allowance for doubtful debts | 18 | (3,469) | (3,469) | - | - | (3,469) |
| Total Financial Assets | 22,456 | 18,421 | 4,035 | - | 21,957 | |
| Financial Liabilities: | ||||||
| Financial liabilities at cost: | ||||||
| Payables (a) | 24 | 17,640 | 17,640 | - | - | 17,640 |
| Borrowings | 25 | 910,901 | 161,281 | 399,620 | 350,000 | 757,202 |
| Total Financial Liabilities | 928,541 | 178,921 | 399,620 | 350,000 | 774,842 | |
| Net Financial Assets/(Liabilities) | (906,085) | (160,500) | (395,585) | (350,000) | (752,885) |
(a) Receivable and payable amounts disclosed here exclude amounts relating to statutory receivables and payables. In government, certain rights to receive or pay cash may not be contractual and therefore in these situations, the requirements will not apply. Where rights or obligations have their source in legislation such as levies, tax equivalents etc they would be excluded from the disclosure. The standard defines contract as enforceable by law. All amounts recorded are carried at cost (not materially different from amortised cost).
(b) Receivables amount disclosed here excludes prepayments. Prepayments are presented in Note 18 as receivables in accordance with paragraph 78(b) of AASB 101 Presentation of Financial Statements. However, prepayments are not financial assets as defined in AASB 132 Financial Instruments: Presentation as the future economic benefits of these assets is the receipt of goods and services rather than the right to receive cash or another financial asset.
35.4 Liquidity Risk
Renewal SA has non-interest bearing assets (cash on hand and receivables) and liabilities (payables) and interest bearing assets (deposits with Treasurer and SAFA and mortgage debtor receivables) and liabilities (borrowings from the SA Government).
Liquidity risk arises from the possibility that Renewal SA is unable to meet its financial obligations as they fall due. Renewal SA settles undisputed accounts within 30 days from the date of the invoice or date the invoice was first received. In the event of a dispute, payment is made 30 days from resolution.
Renewal SA's exposure to liquidity risk is insignificant based on past experience and current assessment of risk.
The carrying amount of financial liabilities recorded in the table of Note 35.3 represents Renewal SA's maximum exposure to financial liabilities.
35.5 Credit Risk
Renewal SA has no significant concentration of credit risk. Renewal SA has policies and procedures in place to ensure that transactions occur with customers with appropriate credit history.
Credit risk arises where there is the possibility of Renewal SA's debtors defaulting on their contractual obligations resulting in financial loss to Renewal SA. Renewal SA measures credit risk on a fair value basis and monitors risk on a regular basis.
The carrying amount of financial assets as detailed in Note 35.3 represents Renewal SA's maximum exposure to credit risk.
Renewal SA manages its credit risk and has policies and procedures in place to ensure that transactions occur with customers with appropriate credit history. Renewal SA does not engage in high risk hedging for its financial assets. No collateral is held as security and no credit enhancements relate to financial assets held by Renewal SA.
Allowances for impairment of financial assets are calculated on past experience and current and expected changes in client credit rating. Other than receivables, there is no evidence to indicate that financial assets are impaired. Refer to Note 18 for information on the allowance for impairment in relation to receivables.
35.6 Ageing Analysis of Receivables
The following table discloses the ageing of financial assets, past due, including impaired assets past due:
Overdue | Overdue 30 - 60 Days $'000 | Overdue > 60 Days $'000 | Carrying Amount $'000 | |
|---|---|---|---|---|
| 2018 | ||||
| Not impaired: | ||||
| Receivables | 664 | 9 | 296 | 969 |
| Impaired: | ||||
| Receivables | 86 | 2 | 3,664 | 3,752 |
| Receivables at 30 June 2018 | 750 | 11 | 3,960 | 4,721 |
| 2017 | ||||
| Not impaired: | ||||
| Receivables | 121 | 311 | 424 | 856 |
| Impaired: | ||||
| Receivables | 66 | 83 | 3,254 | 3,403 |
| Receivables at 30 June 2017 | 187 | 394 | 3,678 | 4,259 |
35.7 Market Risk
Market risk for Renewal SA is primarily through price risk. Prices for residential, industrial and commercial property have been depressed as a consequence of slow market conditions within the local South Australian and Adelaide markets. Renewal SA also has exposure to interest rate risk arising through its borrowings. Renewal SA's borrowings are managed through SAFA and any movement in interest rates are monitored regularly. There is no exposure to foreign currency risks.
35.8 Sensitivity Analysis
A sensitivity analysis has been undertaken for the interest rate risk of Renewal SA and it has been determined that the possible impact on profit and loss or total equity from fluctuations in interest rates is immaterial over a 5 year period. The impact of property price movements on the financial results is impractical to estimate as the analysis would be overly assumptive.
Note 36 Transferred Functions
Transfer of assets from the South Australian Housing Trust
Pursuant to the provisions section 23 of the South Australian Housing Trust Act 1995, the Minister for Housing and Urban Development, with the concurrence of the Treasurer, gazetted on 21 November 2017 the transfer of assets from the South Australian Housing Trust to Renewal SA.
| 2018 $'000 | 2017 $'000 | |
|---|---|---|
| Renewal SA recognised the following income upon the transfer of these assets from the South Australian Housing Trust: | ||
| Net gain from transferred functions | 325 | 548 |
| Net Result | 325 | 548 |
| Renewal SA recognised the assets transferred from the South Australian Housing Trust in the Statements of Financial Position as follows: | ||
| Inventories | 325 | 548 |
| Total Assets Transferred | 325 | 548 |
Note 37 Transactions with SA Government
| SA Government 2018 $'000 | SA Government 2017 $'000 | Non-SA Government 2018 $'000 | Non-SA Government 2017 $'000 | Total 2018 $'000 | Total 2017 $'000 | |
|---|---|---|---|---|---|---|
| Income | ||||||
| Revenue from sales | 5,085 | 21,465 | 81,948 | 49,016 | 87,033 | 70,481 |
| Less: cost of sales | (3,274) | (6,230) | (45,664) | (30,705) | (48,938) | (36,935) |
| Gross Profit from Sales | 1,811 | 15,235 | 36,284 | 18,311 | 38,095 | 33,546 |
| Share of net profit/(loss) in joint ventures | - | - | 1,110 | 3,002 | 1,110 | 3,002 |
| Revenues from Commonwealth and SA Government | 9,111 | 6,720 | - | 30 | 9,111 | 6,750 |
| Interest revenues | 268 | 1,464 | - | 1 | 268 | 1,465 |
| Property income | 65,360 | 24,843 | 14,597 | 17,670 | 79,957 | 42,513 |
| Other revenues | 16,962 | 16,380 | 3,673 | 1,341 | 20,635 | 17,721 |
| Net gain from changes in value of non-current assets | - | - | 2,442 | - | 2,442 | - |
| Net gain from disposal of non-current assets | - | - | 250 | 1,319 | 250 | 1,319 |
| Net gain from administrative restructures | 325 | 548 | - | - | 325 | 548 |
| Total Income | 93,837 | 65,190 | 58,356 | 41,674 | 152,193 | 106,864 |
| Expenses | ||||||
| Employee benefits expenses | 1,806 | 1,748 | 29,869 | 29,504 | 31,675 | 31,252 |
| Operating expenditure | 23,360 | 28,697 | 22,515 | 16,623 | 50,875 | 45,320 |
| Borrowing costs | 39,754 | 28,002 | - | - | 39,754 | 28,002 |
| Depreciation and amortisation | - | - | 495 | 473 | 495 | 473 |
| Net loss from changes in value of non-current assets | - | - | - | 20,744 | - | 20,744 |
| Total Expenses | 69,920 | 58,447 | 52,879 | 67,344 | 122,799 | 125,791 |
| Financial Assets | ||||||
| Receivables | 348 | 6,905 | 9,692 | 8,758 | 10,040 | 15,663 |
| Allowance for doubtful debts | - | - | (3,794) | (3,469) | (3,794) | (3,469) |
| Total Financial Assets | 348 | 6,905 | 5,898 | 5,289 | 6,246 | 12,124 |
| Financial Liabilities | ||||||
| Payables | 8,333 | 5,824 | 15,935 | 11,816 | 24,268 | 17,640 |
| Borrowings | 894,320 | 910,901 | - | - | 894,320 | 910,901 |
| Total Financial Liabilities | 902,653 | 916,725 | 15,935 | 11,816 | 918,588 | 928,541 |
Note 38 Events after the Reporting Period
Events between 30 June 2018 and the date the financial statements are authorised that may have a material impact on the results of subsequent years are set out below.
Machinery of Government Changes
As part of machinery of government changes, on 1 July 2018, 165 Renewal SA employees were transferred to the employment of the Chief Executive, South Australian Housing Trust (SAHT) on the same basis of engagement as applied before the transfer.
Transfer of Assets from the Riverbank Authority
On 19 July 2018, the abolishment of the Riverbank Authority, established by the Housing and Urban Development (Administrative Arrangements) (Riverbank Authority) Regulations 2014 was gazetted. The assets, rights and liabilities of the Riverbank Authority immediately before its dissolution are to be transferred to the Urban Renewal Authority. The net value of these assets as at 30 June 2018 is $1.8 million.
TAFE SA Campus Closure
The 2018-19 State Budget was tabled in the South Australian Parliament on 4 September 2018. The State Budget included the announcement of the planned closure of several TAFE SA campuses, including the Tea Tree Gully, Port Adelaide and Cooper Pedy campuses which are owned by Renewal SA and leased to the Department of State Development and then sub-leased to TAFE SA. Renewal SA is working with the State Government to determine the future strategy for the three properties and the impact of their closure on Renewal SA.
Certification of the Financial Statements
We certify that the:
- Attached general purpose financial statements for the Urban Renewal Authority (trading as Renewal SA):
- are in accordance with the accounts and records of the Urban Renewal Authority; and
- comply with relevant Treasurer's instructions; and
- comply with relevant Australian Accounting Standards; and
- present a true and fair view of the financial position of the Urban Renewal Authority as at 30 June 2018 and the results of its operations and cash flows for the financial year.
- Internal controls employed by the Urban Renewal Authority for the financial year over its financial reporting and its preparation of the general purpose financial statements have been effective throughout the financial year and there are reasonable grounds to believe the Urban Renewal Authority will be able to pay its debts as and when they become due and payable.
Signed in accordance with a resolution of the Urban Renewal Authority Audit and Risk Committee.
| (Signed) J F Hanlon Chief Executive 12 September 2018 | (Signed) D De Luca General Manager, Corporate Services 12 September 2018 | (Signed) Hon B J Pike Presiding Member 12 September 2018 |