Annual Report 2018–19

StatementFrom the Chief ExecutiveAbout the agencyAgency performanceFinancial performanceRisk managementPublic complaintsFinancial statements

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:

Mark Devine
A/Chief Executive of Renewal SA

From the Chief Executive

About the agency

Our strategic focus

Legislation administered by the agency

Agency performance

Lot Fourteen, Tonsley Innovation District and Technology Park are the backbone of innovation in South Australia, offering opportunities for innovative and entrepreneurial businesses in future industries to collaborate and thrive.

Corporate performance
The following sections provide a summary of Renewal SA’s operational performance in regard to employment opportunity programs; performance management and
development systems; work health, safety and return-to-work programs.

Financial performance

Statement of comprehensive income
2018-19 actual $000s
2017-18 actual $000s
Revenue from sales
$66,755
$87,033
Less: cost of sales
$41,195
$48,938
Gross profit from sales
$25,560
$38,095
Other income
$95,137
$111,656
Operating expenses
$66,837
$83,045
Borrowing costs
$40,683
$39,754
Underlying operating result
$13,177
$26,952
Net gain from changes in value of assets
($219,500)
$2,442
Comprehensive result
($206,323)
$29,394
Income tax
-
$8,819
Total comprehensive result
($206,323)
$20,575
Statement of financial position
2018-19 Actual $000s
2017-18 Actual $000s
Current assets
$98,528
$122,656
Non-current assets
$896,613
$966143
Total assets
$995,141
$1,088,799
Current liabilities
$399,507
$212,265
Non-current liabilities
$659,582
$750,228
Total liabilities
$1,059,089
$962,493
Net assets
($63,948)
$126,306
Equity
($63,948)
$126,306

Consultants disclosure

The following is a summary of external consultants that have been engaged by the agency, the nature of work undertaken, and the actual payments made for the work undertaken during the financial year.

Consultancies with a contract value below $10,000 each

Consultancies Performance Expenditure ($)
19 consultants engaged Various 76,225

 

Consultancies with a contract value above $10,000 each

Consultancies Performance Expenditure ($)
Deloitte Access Economics Economic development consultancy 166,360
Fyfe Pty Ltd Development Structure Plan 41,556
Guildhouse Inc Public Art Strategy Services 18,638
Hames Sharley Retail Strategy Master Plan
28,428
Hannan Duck and Partners Strategic Plan 39,000
Holmes Dyer
Development Structure Plan 19,415
JTVVO Solutions Pty Ltd Development audit of conduits and conduit paths 14,250
KPMG Accounting advice 15,208
Lucid Consulting Engineers (SA) Pty Ltd Fire Services Master Plan 15,862
Mott McDonald
Project Management services
20,160
PricewaterhouseCoopers Accounting advice 15,000
PricewaterhouseCoopers Accounting advice 15,000
PricewaterhouseCoopers Business continuity planning and simulation 11,220
PricewaterhouseCoopers Goods and Services Tax advice 15,000
Right Angle Studio
Retail vision and strategy 76,465
RSM Australia Pty Ltd Emissions Reduction Fund audit 53,960
The Buchan Group Melbourne Pty Ltd
Development Concept Design 28,000
TOTAL
593,522

See also the Consolidated Financial Report of the Department of Treasury and Finance for total value of consultancy contracts across the South Australian Public Sector.

Risk management

Public complaints

Number of public complaints reported

No categories of complaints were received by, or made against, Renewal SA for the 2018–2019 financial year.

 

The total number of enquiries between 1 July 2018 and 30 June 2019 was 305 (three hundred and five). As a result of these enquires, no specific service improvements were required to be implemented by Renewal SA as part of the response or action as a result of the enquiry.

Financial statements

For the year ended 30 June 2019

Statement of comprehensive income

For the year ended 30 June 2019

Note
No.
2019
$’000
2018
$’000

Income

Revenue from sales 9 66,755 87,033
Less: cost of sales 9 41,195 48,938
Gross profit from sales 25,560 38,095
Share of net profit in joint ventures 10 2,166 1,110
Revenues from SA Government 11 8,239 9,111
Interest revenues 12 975 288
Property income 13 81,141 79,957
Other revenues 14 2,216 20,635
Net gain from changes in value of non-current assets 26 2,442
Net gain from disposal of non-current assets 15 400 250
Total other income 95,137 113,773
Net gain from transferred functions 325
Total income 120,697 152,193

Expenses

Employee benefits expenses 7 15,780 31,675
Operating expenditure 16 49,939 50,550
Bad and doubtful debts expense 22 600 325
Borrowing costs 17 40,683 39,754
Depreciation and amortisation 25 518 495
Net loss from changes in value of non-current assets 26 219,500
Total expenses 327,020 122,799
Profit/Loss before income tax equivalent (206,323) 29,394
Income tax equivalent 19 8,819
Profit/Loss after income tax equivalent (206,323) 20,575
Total comprehensive result (206,323) 20,575

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 2019

Note
no.
2019
$’000
2018
$’000

Current assets

Cash and cash equivalents 21 21,083 42,050
Receivables 22 5,698 4,033
Inventories 23 68,402 73,837
Investment in joint ventures 10 3,345 2,736
Total current assets 98,528 122,656

Non-current assets

Receivables 22 8,615 6,720
Inventories 23 178,920 241,230
Investment properties 24 706,530 716,160
Property, plant and equipment 25 1,832 1,874
Investment in joint ventures 10 716 159
Total non-current assets 896,613 966,143
Total assets 995,141 1,088,799

Current liabilities

Payables 28 21,702 21,375
Unearned income 30 3,554 6,287
Borrowings 29 270,552 174,218
Provisions 31 101,300 5,784
Employee benefits 8 2,247 4,143
Other liabilities 32 152 458
Total current liabilities
399,507 212,265

Non-current liabilities

Payables 28 7,455 7,872
Unearned income 30 15,313 15,530
Borrowings 29 633,150 720,102
Provisions 31 37 23
Employee benefits 8 3,627 6,701
Total non-current liabilities 659,582 750,228
Total liabilities
1,059,089 962,493
Net assets (63,948) 126,306

Equity

Contributed capital 381,857 356,857
Retained earnings (445,805) (230,551)
Total equity
(63,948) 126,306

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

  • Unrecognised contractual commitments: 35
  • Contingent liabilities: 36

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

Statement of changes in equity

For the year ended 30 June 2019

Note
no.
Contributed capital
$’000
Retained earnings
$’000
Total
$’000
Balance 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:
  • Dividends paid
20 (9,150) (9,150)
Balance as at 30 June 2018
356,857 (230,551) 126,306
Total comprehensive result for 2018-19 (206,323) (206,323)
Adjustment on adoption of new accounting standards 34 (1,798) (1,798)
Transactions with the SA Government in their capacity as owners:
  • Equity contribution
25,000 25,000
  • Net assets transferred from administrative restructure
3 3,812 3,812
  • Dividends paid
20 (10,945) (10,945)
Balance as at 30 June 2018
381,857 (445,805) (63,948)

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

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

Statement of cash flows

For the year ended 30 June 2019

Note
no.
2019
$’000
2018
$’000

Cash flows from operating activities

Cash inflows
Receipts from sales 67,452 96,766
Receipts from SA Government 26,301 28,045
Interest received 495 286
Receipts from tenants (rent and recoveries) 80,088 102,160
Recoveries and sundry receipts 4,638 22,217
Funds held in trust 4
Receipts for paid parental leave scheme 33 43
Cash generated from operations
179,008 249,521
Cash outflows
Payments for land purchase and development (104,168) (49792)
Income tax equivalent paid (4,519) (4,300)
Land tax paid (21,955) (20,955)
Interest paid (41,044) (41,181)
Payments to suppliers (26,835) (36,399)
Payments for employee benefits payments (22,099) (33,826)
Payments of funds held in trust (306)
Payments for paid parental leave scheme (23) (46)
GST paid to the ATO (4,787) (9,052)
Cash used in operations
(225,736) (195,551)
Net cash provided by/(used in) operating activities 33 (46,728) 53,970

Cash flows from investing activities

Cash inflows
Distributions of profit by joint ventures 1,000 875
Proceeds from the sale of investment properties 1,800 2,100
Cash generated from investing activities 2,800 2,975
Cash outflows
Purchase of plant and equipment (476) (308)
Cash used in investing activities (476) (308)
Net cash provided by/(used in) investing activities 2,324 2,667

Cash flows from financing activities

Cash inflows
Equity contributions received from SA Government 25,000
Proceeds from borrowings 183,600 144,700
Cash generated from financing activities 208,600 144,700
Cash outflows
Repayment of borrowings (174,218) (161,281)
Dividends paid to SA Government (10,945) (9,150)
Cash used in financing activities (185,163) (170,431)
Net cash provided by/(used in) financing activities 23,437 (25,731)
Net increase/(decrease) in cash held
(20,967) 30,906
Cash at the beginning of the financial year
42,050 11,144
Cash at the end of the financial year
21 21,083 42,050

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

Certification of the financial statements

We certify that the attached general purpose financial statements for the Urban Renewal Authority (trading as Renewal SA):

  • comply with relevant Treasurer’s instructions issued under Section 41 of the Public Finance and Audit Act 1987, and relevant Australian Accounting Standards;
  • are in accordance with the accounts and records of the Urban Renewal Authority; and
  • present a true and fair view of the financial position of the Urban Renewal Authority as at 30 June 2019 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)
M Devine
A/Chief Executive
10 September 2019
(signed)
D De Luca
General Manager
10 September 2019
(signed)
C Tragakis
Presiding Member
10 September 2019

Independent Auditor’s Report

To the Presiding Member
Urban Renewal Authority

As required by section 31(1)(b) of the Public Finance and Audit Act 1987 and section 27(4) of the Urban Renewal Act 1995, I have audited the financial report of the Urban Renewal Authority for the financial year ended 30 June 2019.

In my opinion, the accompanying financial report gives a true and fair view of the financial position of the Urban Renewal Authority as at 30 June 2019, its financial performance and its cash flows for the year then ended in accordance with the Treasurer’s instructions issued under the provisions of the Public Finance and Audit Act 1987 and Australian Accounting Standards.

The financial report comprises:

  • a Statement of Comprehensive Income for the year ended 30 June 2019
  • a Statement of Financial Position as at 30 June 2019
  • a Statement of Changes in Equity for the year ended 30 June 2019
  • a Statement of Cash Flows for the year ended 30 June 2019
  • notes, comprising significant accounting policies and other explanatory information
  • a Certificate from the Presiding Member, the Chief Executive and the General Manager, Corporate Services.

Basis for opinion

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

I am independent of the Urban Renewal Authority. The Public Finance and Audit Act 1987 establishes the independence of the Auditor-General. In conducting the audit, the relevant ethical requirements of APES 110 Code of Ethics for Professional Accountants have been met.

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

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

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

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

Auditor’s responsibilities for the audit of the financial report

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

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

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

  • identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control
  • obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Urban Renewal Authority’s internal control
  • evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Chief Executive
  • evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.

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

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

(signed)
Andrew Richardson
Auditor-General
17 September 2019

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