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

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 Small Venue Licence Case Management Service City Makers Program Hub Adelaide Spark Entrepreneurs initiative Market to Riverbank link project	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.

Nil to report.

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

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