This annual report will be presented to parliament to meet the statutory reporting requirements of the Urban Renewal act 1995 and the requirements of Premier and Cabinet circular PC013 annual reporting.
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:
Chris Menz
Chief Executive of Renewal SA
From the Chief Executive
The Government of South Australia is committed to improving the lives of South Australians through economic development and growth. Through its Growth State plan, the State continues to identify initiatives and projects that support and drive the future economic growth of South Australia. Renewal SA supports this by identifying, prioritising and leading projects and initiatives that will stimulate the economy and create jobs for South Australians.
Renewal SA's primary purpose is to initiate, undertake, promote and support strategic urban development activity as outlined in the 30 Year Plan for Greater Adelaide which defines target growth and infill areas and design outcomes.
Our focus is on property development that builds new industries, infrastructure and communities, drives economic activity, maximises private sector investment and participation, and enhances the liveability of our state.
Our activities are driven by several State strategies including The 20-Year State Infrastructure Strategy which was released in late-2019 and sets the long-term direction and priorities for infrastructure development in South Australia; and the Our Housing Future 2020-2030 strategy which was launched in 2020 and is delivering a better housing future by coordinating activity and opportunities across the housing sector. We are also driven by the 30 Year Plan for Greater Adelaide.
As a committed group of property professionals, the team at Renewal SA firmly believe we can improve the lives of South Australians, now and into the future through transformational projects and property. Each day we are inspired to deliver on this purpose.
As the State Government's leading urban development agency, Renewal SA has continued to deliver progress and contribute or lead flagship developments: Lot Fourteen, Tonsley Innovation District, Bowden, Lightsview, Port Adelaide and Playford Alive.
The 2019-2020 financial year has delivered significant challenges for the South Australian economy, the property industry, businesses and our people. Following major bushfires though December and January and the impacts of the COVID-19 pandemic, Renewal SA's renewed focus is on securing a pipeline of major projects and property initiatives will greatly aid our state's economic recovery and future growth.
I acknowledge and thank our Acting Chief Executives during 2019-20 financial year, Mark Devine who led our organisation until December 2019 and Damian De Luca who acted in the role until February 2020 before my arrival.
In 2020, Renewal SA welcomed a new Executive team. Joining myself as incoming Chief Executive and Damian De Luca, General Manager, Corporate Services, are Vy Collins, Senior Director, People and Culture, Tony Cole, General Manager, Major Projects and Pipeline, and Todd Perry, General Manager, Project Delivery and Property (who joined in August 2020). Each of these people come with significant experience and a passion for property and people, and a commitment to realising South Australia's potential for growth.
Finally, I am delighted to confirm that this year, Renewal SA has finalised its 3-year strategy for growth through 2020-2023. This strategy acknowledges the need for a thriving property sector here in South Australia and highlights the need for Renewal SA to create opportunities, provide a confident pipeline of projects and initiatives, focus on growing our people, and build lasting, mutually beneficial, partnerships between government and the private sector.
Together with the Treasurer, our Board of Management, and the Executive Management Team, I am proud of our achievements for 2019-2020 financial year and am looking forward to continuing to drive the social and economic growth of South Australia through property and projects.
Chris Menz
Chief Executive
Renewal SA
About the agency
Our strategic focus (2019-20 financial year)
Our purpose and mission
The Urban Renewal Authority was established under the Urban Renewal Act 1995 with the primary purpose to initiate, undertake, 1 promote and support strategic urban development activity to help deliver the key strategic priorities of the South Australian Government, particularly the new urban development directions as outlined in the 30 Year Plan for Greater Adelaide.
Renewal SA is responsible for leading and coordinating urban renewal development activity to ensure that the state's future employment and housing needs are met through well planned, affordable and vibrant urban development located near transport, employment, education and other services.
Our purpose is to improve the lives of South Australians now and into the future.
Our values
Delivering an inspiring urban future.
Our values
Renewal SA is guided by the South Australian public sector values of service, professionalism, trust and integrity, respect, collaboration and engagement, honesty and integrity, courage and tenacity, and sustainability.
These values reflect our commitment to the ever-changing needs of South Australians, and the role of government in helping to foster the state's prosperity and wellbeing.
Renewal SA also has a set of five values that lead our day-to-day behaviours and decision making. They are:
Accountability: We hold ourselves responsible for the work we deliver and how we deliver it.
Unity: We embrace a team spirit. We seek opportunities to support each other's objectives and understand and align ourselves to one vision.
Respect: At Renewal SA we are courteous, listen and communicate openly. We value diversity and model ethical and professional behaviour towards all people.
Excellence: We are committed to excellence in everything we do.
Fun: We have fun at work and celebrate our success.
Our functions, objectives and deliverables
The key functions of Renewal SA as outlined in the Urban Renewal Act 1995 are to:
- Initiate, undertake, support and promote residential, commercial and industrial development in the public interest.
- Acquire, assemble and use land and other assets in strategic locations for urban renewal.
- Promote community understanding of, and support for, urban renewal by working with government agencies, local government, community groups and organisations involved in development.
- Undertake preliminary works (including the remediation of land) to prepare land for development and other functions such as planning and coordination.
- Encourage, facilitate and support public and private sector investment and participation in development of the State.
- Acquire, hold, manage, lease and dispose of land, improvements in property.
Changes to the agency
During 2019-20 financial year there were no changes to the agency's structure and objectives as a result of internal reviews or machinery of government changes.
Our Minister
During 2019-20 financial year the Urban Renewal Authority, trading as Renewal SA, was within the portfolio responsibilities of the Minister for Transport, Infrastructure and Local Government, Hon Stephan Knoll MP.
Our Executive Team
The Chief Executive currently reports to the Treasurer and the Urban Renewal Board of Management to oversee the day-to-day operations of our organisation, together with the Executive team.
As at 30 June 2020, Renewal SA's Executive Team comprised:
- Chris Menz, Chief Executive
- Damian De Luca, General Manager Corporate Services
- Mike Philippou, Acting General Manager Project Delivery
- Tony Cole, General Manager Major Projects and Pipeline
- Vy Collins, Senior Director People and Culture.
Mr Todd Perry joined Renewal SA as General Manager Project Delivery and Property in August 2020.
Legislation under which the agency operates
The agency's performance
Performance at a glance
Data for previous years is available at: Data SA
Agency contribution to whole of government objectives
Growth State: Our Plan for Prosperity is the government's economic plan for the state.
Renewal SA is aligned to, and supports, the Government of South Australia's Growth State agenda which aims to stimulate the economy and population of the state.
The state government is delivering long-term benefits for the state by investing in projects that drive economic activity and growth, boost productivity and enhance liveability and land values.
Renewal SA plays a leading role by providing strategic opportunities for industrial and commercial development on designated employment lands to support social and economic growth and job creation.
Through our pipeline of development projects, partnerships with the private sector, and by supporting innovation in key industry sectors such as defence, space, energy and hi-tech, Renewal SA is attracting local, national and international investment and contributing to the growth of South Australia.
Renewal SA is guided by the government's 30-Year Plan for Greater Adelaide and has a role to play in the delivering The 20-Year State Infrastructure Strategy, which sets the long-term direction and priorities for infrastructure development in South Australia; and the Our Housing Future 2020-2030 strategy which is delivering a better housing future by coordinating activity and opportunities across the housing sector to deliver 20,000 housing outcomes by 2030.
Agency contribution to whole of government objectives
More jobs
Renewal SA facilitates the supply of strategically located commercial and industrial land to support South Australia's economic and employment growth. By working in multiple markets and de-risking projects, Renewal SA generates jobs and investment by enabling businesses to establish, grow and succeed. During the 2019-20 financial year Renewal SA sold 19.7 hectares of industrial land and the future development of that land is expected to deliver at least 850 jobs.
Renewal SA's construction capital expenditure of $106 million is estimated to have created at least 600 jobs across the 2019-20 financial year. Renewal SA's Works Program builds capability and capacity across the private sector, ensuring that there are sufficient skills in the market by generating training and employment opportunities through our contracts to support jobs and traineeships/apprenticeships. The Works Program works with industry to develop innovative delivery models, identify opportunities and deliver initiatives within our projects that provide social inclusion, indigenous business and participation outcomes. There were 77 participants engaged in training programs throughout the 2019-20 financial year and 44 of these participants gained employment.
Lower costs
Renewal SA's infill developments within existing suburbs create more affordable housing choices and communities that are more pedestrian and bike friendly, that benefit from having employment, shops and services within easy reach. Along with the lower infrastructure costs of developing in existing metropolitan areas, these factors will ultimately make our city more affordable to live in.
Renewal SA is committed to accelerating development that increases the supply of affordable housing for sale to a mix of low and moderate-income homebuyers. During 2019-20 financial year, Renewal SA delivered more than 200 affordable housing opportunities to the market.
The development and release of industrial land in key locations by Renewal SA provides opportunities for South Australian businesses to consolidate and modernise their operations, and to optimise transport and logistics functions. This is expected to increase competitiveness and lead to lower costs for business and consumers.
Better services
Renewal SA drives great design outcomes by facilitating inclusive and connected communities that demonstrate good design, create quality public spaces and services, and enhance the South Australian lifestyle.
Renewal SA engages with the community, creates planning certainty and addresses any significant infrastructure and required site remediation, to de-risk and allow integrated and master-planned developments to proceed.
Renewal SA also adopts a master-planned approach to its commercial and industrial projects to ensure that employment precincts operate as viable and attractive workplaces, with an appropriate level of support services.
Performance at a glance - project highlights for 2019-20 financial year
Renewal SA's projects span the Greater Adelaide region, and include residential, commercial, industrial and mixed-use developments. Together with the critical contribution of the development industry, community and government partners, Renewal SA is delivering these projects for all South Australians.
Lot Fourteen
Renewal SA is working closely with the Department of Premier and Cabinet and the State Government as the commercial advisor and master developer of Lot Fourteen, to create an innovation precinct that leverages South Australia's abilities in space, defence, hi-tech and creative industries. Lot Fourteen is accelerating global interaction and investment, creating high-value jobs and driving economic growth and future prosperity for South Australia. Led by Premier Steven Marshall through the Department of Premier and Cabinet State Project Lead, Renewal SA has delivered substantial development progress at Lot Fourteen.
During the 2019-20 financial year, Renewal SA completed an $80 million capital works program. This included the North Terrace public realm upgrade works; significant adaptive re-use of 16,000m2 of lettable space across six heritage buildings, and major demolition and infrastructure projects as key enabling works to allow new development to commence.
Lot Fourteen welcomed new tenants to the site including the 140 work-space Stone & Chalk start-up hub, the Australian Space Agency and SmartSat Cooperative Research Centre, University of Adelaide Australian Institute for Machine Learning, MIT bigdata Living Lab and the Australian Cyber Collaboration Centre.
Lot Fourteen became the first registered WELL Community pilot project in the southern hemisphere focused on the health and wellbeing of tenants and visitors and has achieved a 6-Star Green Star rating for Communities Design and Heritage Buildings.
Tonsley
Over 1,700 people are now employed at the Tonsley Innovation District, which is 70% more than when Mitsubishi announced their closure in 2008. There are now over 35 businesses established on the site, 290 co-working members, and 8,000 students studying at Tonsley each year.
During the 2019-20 financial year, construction commenced on Autism SA's head office as well as on the Australian Gas Infrastructure Group's Hydrogen Park SA (HyP SA), Australia's first hydrogen production and distribution facility. Mobile x-ray imaging company Micro-X, Flinders University and Rockwell Automation have now established operations in the Main Assembly Building (MAB).
One of Australia's largest rooftop solar arrays, the Tonsley District Energy and Recycled Water Scheme, reached a major milestone with the completion of the solar PV installation on the roof of the MAB. Over 7,000 solar panels are now generating around 2.4 MW on site to deliver clean, competitively priced energy to Tonsley's tenants and residents via smart renewable technology.
Residents have begun moving into terrace homes and apartments at Peet's residential development, Tensley Village. A total of 34 homes have been handed over while 48 are under construction in addition to two apartment buildings. These are helping to realise the vision for Tonsley Innovation District as a vibrant, mixed use precinct.
Playford Alive
During the 2019-20 financial year, almost 170 allotments were produced, which has provided stock to enable purchasers to take advantage of the Federal Government's HomeBuilder initiative announced in June 2020.
Renewal SA continued to recognise and reward community groups and local people through the Playford Alive Initiatives Fund and Local Heroes Awards.
To date, the Playford Alive project has produced and offered for sale more than 1,700 residential allotments, continuing to provide the opportunity for residents to build their new homes and enjoy the lifestyle offered as part of the Playford community.
Bowden
In October 2019, the doors opened to Bowden's first display centre at 24 Gibson Street, showcasing two boutique housing options; a fully fitted-out 354 Bowden apartment as well as a Guild Terrace home, allowing would-be purchasers an initial glimpse at what life at Bowden is like.
During the 2019-20 financial year, construction commenced on Stage 1 of Guild Terraces, 15 architecturally designed Torrens-Titled townhouses, and on 354
In 2020, we launched our Renewal SA Strategic Plan 2020-23, which guides our focus on driving economic growth in South Australia through property development and urban renewal projects of scale.
Our Strategic Plan is formulated on a foundation of four pillars — people, pipeline, partnerships, and projects. These pillars underpin our three-year organisational goals and initiatives, all of which are designed to support ambitious outcomes. They are critical to our success and are the reference points against which we benchmark and measure progress.
Bowden, comprising 5 buildings and 228 apartments. The first 354 Bowden apartment building, On The Lane, containing 26 apartments was completed.
An Indigenous food garden for Bowden's Guild Terrace reserve commenced planning the 2019-20 financial year also, in recognition of the region's rich Kaurna heritage and ongoing cultural importance. The garden is being delivered through a collaboration between Renewal SA and Kaurna elders of the Kaurna Nation Cultural Heritage Association.
Plant 3 Bowden Pty Ltd has also completed the design for the redevelopment of Plant 3, a former manufacturing plant, and has now engaged a builder to commence construction with completion due in the first quarter of 2021.
Woodville West
The Woodville West Urban Renewal Project, marketed as 'The Square at Woodville West', is delivering a diverse mix of housing options including villas, townhouses, apartments and lofts. Renewal of the area includes construction of up to 425 new dwellings and three retail premises, reconfiguration of roads and creation of new public spaces.
The project is being delivered over 6 stages. To date civil works have been completed across all stages, and sales within Stages 1, 2 and 6 are complete, and Stage 5 is almost sold. The project has constructed 159 new dwellings, 3 refurbished dwellings and a sold further 77 vacant lots to accommodate 140 new dwellings.
Port Adelaide
The focus for the 2019-20 financial year has been the successful management of multiple developers delivering the construction of residential and commercial developments around the Port Adelaide Inner Harbour. These ventures will result in 1,150 homes, 2,000 people living and recreating, and 1,000 new workers in the port in addition to the hundreds of construction jobs.
Fletcher's Slip, an 8-year project by Cedar Woods, which will deliver 500 dwellings, commenced in earnest with demolition and ground remediation nearing completion across half of their total development area. Dock One, an 8-year 650 dwelling project by Starfish Developments, commenced construction following the settlement of Stage 1 in July 2019, with the first residents moving in during August 2020.
A preferred proponent has been secured for the development of the former Incitec Pivot Site at Port Approach North' into a mixed use commercial and light industrial precinct following an Expression of Interest process.
In November 2019, the City of Adelaide Clipper Ship and barge were successfully relocated from Dock One to Dock Two, the first step in establishing a maritime heritage tourism precinct at Dock Two and enabling the development of Dock One by Starfish Developments.
Other development commencements of note during the 2019-20 financial year period include the commencement of the Colac Hotel redevelopment on St Vincent Street by Dominion Homes, The Globe Hotel redevelopment on St Vincent Street by the Ginos Group, Hexagon townhouse development on Divett Street, and the completion of Stage 1 of the Port Adelaide Plaza redevelopment by the Precision Group. The 2019-20 financial year also saw the commencement of fit-out works at the former TAFE SA Port Adelaide Campus building on Mundy Street for 250 employees of the Naval Group. Development approvals of note for the same period include the 180-room Rydges on McLaren Parade and the reuse of the ?-storey former Department of Marine and Harbours Building on St Vincent Street into a hotel by Starfish Developments, which are all strong indicators of positive growth and renewal of the Port.
Festival Plaza
The Festival Plaza Redevelopment consists of three separate major capital projects being undertaken in and around the site of the former Hajek Plaza:
- upgrades to the Festival Plaza Public Realm and the Adelaide Festival Centre's fa9ade and lobbies
- Walker Corporation's integrated car park, office accommodation and retail building development
- SkyCity's new six-star hotel and upgrade of its premises within the Adelaide Railway Station building.
Renewal SA continues to work closely in partnership with the Department for Infrastructure and Transport, Walker Corporation, SkyCity Casino and the Adelaide Festival Centre to deliver a unique, world-class hub for the arts, culture, tourism, entertainment and commercial sectors.
During the 2019-20 financial year, revised designs for the Festival Plaza Public Realm received all required endorsements, statutory approvals and funding, enabling construction of the first stages to commence in June 2020. As part of the Festival Plaza Public Realm works, Renewal SA commissioned a significant public artwork to be installed in the ceiling of the new Station Entry which will connect the Adelaide Railway Station to the Riverbank Footbridge.
Substantial progress was made by SkyCity Casino on construction of its new building and redevelopment of existing premises. Separately, Walker Corporation completed demolition, excavation and piling works enabling construction works to commence on the delivery of a 5-level car park with 1560 spaces, which is the first element of its integrated development.
Adelaide Railway Station
Work commenced in April 2020 on the comprehensive restoration of the western fagade of the Adelaide Railway Station building, including the large arched windows. These works will protect the structural integrity of this State heritage-listed building.
The transformation of the retail offering within the Adelaide Railway Station made significant progress with the opening of SkyCity's new $6 million bar and dining venue, The Guardsman, and the opening of new small retailers within the public concourse and access ramp.
Agreements have been established with the Department of Infrastructure and Transport and SkyCity Casino to effect the creation of 700 square metres of new retail tenancy spaces within the station's public concourse.
This last year also saw design, planning and procurement activity for a program of works in and around the Adelaide Railway Station, which will uplift the heritage features of the building and complement the new and improved retail offering. This program of works, to be delivered between October 2020 and June 2022, will include upgrades to the North Terrace shop-front and public realm, restoration works within the heritage ramp and public concourse, and the installation of internal and external architectural lighting.
Adelaide Riverbank
Working in partnership with the City of Adelaide and the State Planning Commission, Renewal SA is leading the delivery of a new Precinct Plan for the Adelaide Riverbank on behalf of the Capital City Committee. The Precinct Plan will:
- document development to date within the precinct
- articulate a vision, purpose and identity for the precinct that is shared across local and state government
- establish a shared framework for future development within the precinct
- identify and prioritise development and investment opportunities.
Renewal SA continues to support the Riverbank Entertainment Precinct Advisory Committee in the coordination of development, activation and marketing of the precinct.
Commercial and Industrial Land
Renewal SA provides opportunities for industrial and commercial development on designated employment lands to support South Australia's economic and employment growth.
Significant landholdings at Osborne and Edinburgh Parks support the growth of South Australia's defence sector and we continue to work closely with the Commonwealth Department of Defence to ensure the requirements of the Navy, Army and Air Force can be accommodated in these locations. During the 2019-20 financial year, we completed the Northern LeFevre Peninsula Master Plan, which provides a long-term vision for a naval industry hub at Osborne with facilities and services required to support expansions of defence and port-related industries, and the resulting workforce.
Over the last three years, Renewal SA has transferred 29.61 hectares of land to facilitate the expanded Osborne Naval Shipyard and sold or leased a further 7.525 hectares to defence-related businesses to support the shipyard construction and operations. During the 2019-20 financial year, the Osborne Naval Shipyard
(including land sold/leased by Renewal SA) has seen significant construction activity, and it is expected that ongoing development of this land will lead to over 1,100 jobs in the precinct.
Grand Trunkway Estate offers potential purchasers master-planned industrial allotments at the western edge of the Northern Economic Corridor. Following solid interest during the 2019-20 financial year, which included the sale of an additional allotment (generating revenue of $1.15 million) and construction commencing on a previously sold allotment within the estate, Renewal SA has completed further work to release an additional 3 allotments to the market.
Strategically-located commercial and industrial land continues to sell at Technology Park. Highlights this year include the sale of 3.8 hectares to Commercial & General to accommodate a new Raytheon development. Pelligra Group also purchased 6.6 hectares at Edinburgh Parks to accommodate the Auscold Logistics development.
Other activities
Environmental Services
The Environmental Services Group are a team of highly skilled experts who provide guidance and direction on all environmental matters associated with acquisition, development, management and divestment of land to all divisions of Renewal SA and other government agencies.
This year, the team has successfully negotiated the remediation strategy and associated costs for the SAHMRl2 development on behalf of Department for Treasury and Finance, which saved the government a significant amount of money in remediation costs.
The team actively works on the Tonsley, Port Adelaide and Bowden projects and leads the way in ensuring that these contaminated sites are assessed and remediated allowing development to occur in a sustainable and pragmatic way.
Renewal SA's soil recycling facility at Port Adelaide has experienced an increase in demand for the disposal of soil, due to securing the contaminated soil from the SAHMRl2 project and is undergoing an expansion to manage a larger volume of soil. In the 2019-20 financial year, work began on the construction of two additional structures for the storage of low-level contaminated soil.
Works Program
The Renewal SA Works Program delivers economic outcomes through employment and work experience opportunities in Renewal SA-managed contracts, engagement, training and employment programs in partnership with registered training organisations, and by building capacity in organisations and within communities.
Through the inclusion of economic development clauses (EDCs) in Renewal SA contracts, Renewal SA's contractors provided 40 work experience placements and 11 paid employment positions in the 2019-20 financial year.
In addition to delivering opportunities through live training site and pre-employment programs, there has been greater capacity to engage new groups in learning, such as through our Children's University sponsorship, Tonsley school holiday workshops and STEM Works @Tonsley tours.
Overall, in the 2019-20 financial year, the Works Program provided 387 people with pathways to employment through education, training, engagement and work experience, across all Renewal SA projects: Playford Alive, Bowden, the Square at Woodville West, Our Port, Lot Fourteen and Tonsley Innovation District.
Planning & Design
The Planning and Design team plays an important role in contributing to the pipeline of development opportunities that enable growth and attract additional investment for the state. During the 2019-20 financial year, the Oakden/Gilles Plains Structure Plan, Stakeholder Consultation Report and Draft Development Plan Amendment were completed; at Aldinga, the Draft Structure Plan was completed and land was sold to facilitate the delivery of the R-12 School; and the Draft Development Plan Amendment for the New Castalloy site was prepared.
The team provides support and advice across all Renewal SA projects. Their expertise is recognised and valued across government and staff were consulted on the development of various local and state government development strategies and projects. Support and advocacy were provided throughout the 2019-20 financial year through membership on steering and reference groups on key projects across government.
Preparation of the Development Plan Amendment and coordination of concepts for staged public realm delivery at Lot Fourteen, and initial scoping studies for the Entrepreneur and Innovation Centre and International Centre for Food, Hospitality and Tourism Studies were delivered. Preparation of stage plans, product development and project reviews were also undertaken at Bowden and Woodville West.
Reconciliation Action Plan
Renewal SA readily recognises and accepts the opportunity and responsibility to be part of Reconciliation process. As the South Australian Government's urban authority, Renewal SA has the capacity to take meaningful steps across our range of projects, programs and other activities to enhance how we respectfully acknowledge and engage with our key Aboriginal and Torres Strait Islander partners and stakeholders. In the 2019-20 financial year Renewal SA established a Reconciliation Action Plan Steering Committee and launched the agency's first Reconciliation Action Plan.
Corporate performance summary
Organisational review and restructure
During 2019-20 financial year, Renewal SA undertook a review of the organisational structure to ensure that we have the right functions and capability to lead, support and drive investment and growth through property and projects. A proposed restructure was announced in June 2020 and was confirmed in July 2020.
Renewal SA is now structured around three divisions - Corporate Services, Major Projects and Pipeline, and Projects Delivery and Projects. These divisions are supported by Office for the Chief Executive; People and Culture; and Strategy, Marketing and Communications.
Awards
In August 2019, the master plan and protocols for the development of Lot Fourteen's public realm won an Award of Excellence in the annual Australian Institute of Landscape Architects Awards for South Australia.
In November 2019, Tonsley Innovation District won the top prize for the Commercial Landscape ($500,000-$1,000,000) category in the Master Landscapers of South Australia Awards for the Lounge Forest, its latest landscaped outdoor area built by LCS Landscapes.
Operational Performance
The following sections provide a summary of Renewal SA's operational performance in regard to performance management and development systems, work health and safety and return to work programs.
Agency performance management and development systems
Renewal SA's Partnering for Performance Plan (PPP) process provides clarity regarding expectations of employees and managers in driving organisational performance. Completions of a formal documented PPP in the financial ye9r ending 30 June 2020 are outlined in the following chart.
The PPP process is being reviewed and refreshed during the financial year ending 30 June 2021 and is currently being implemented to target a 100% completion rate.
Work Health, Safety and Return to Work Programs
| Program name | Performance |
|---|---|
| Work Health and Safety Program | Renewal SA follows a risk management approach to its safety program, with extensive consultation through employee and management representation on our WHS committee. |
| Wellbeing Program | Renewal SA offers a holistic wellness program, focusing on , health, mental health and the prevention of violence. In relation to health and mental health, we adopt a preventative approach, with offerings such as skin screenings, influenza vaccinations, and the promotion of physical activities through programs like the Corporate Cup. To promote workplace mental health, we maintain a fully trained complement of Mental Health First Aiders. As a White Ribbon accredited workplace, Renewal SA stands firm against domestic violence, gender-based violence and inequality. As a result of the COVID-19 pandemic, we have introduced measures across our agency to safeguard our staff. We have , introduced a Preparedness Coordinating Committee to oversee our COVID-19 response. |
| Return to Work Program | We provide care and support for both compensable injuries and non-compensable injuries. We proactively liaise with our Return to Work Service Provider and consistently maintain a 100% performance rating for ensuring all Return to Work claims are assessed within two business days of the date the employer was notified of the injury and that a determination on a Return to Work Claim is made within ten business days. |
| Workplace injury claims | Current year 2019-20 | Past year 2018-19 | % change (+/-) |
|---|---|---|---|
| Total new workplace injury claims | 1 | 2 | -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) | 0 | 3.33 | -100% |
*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)
| Work health and safety regulations | Current year 2019-20 | Past year 2018-19 | % change (+/-) |
|---|---|---|---|
| Number of notifiable incidents (Work Health and Safety Act 2012, Part 3) | 0 | 0 | 0% |
| Number of provisional improvement, improvement and prohibition notices (Work Health and Safety Act 2012, Sections 90, 191 and 195) | 0 | 0 | 0% |
| Return to work costs** | Current year 2020-21 | Past year 2019-20 | % change (+/-) |
|---|---|---|---|
| Total gross workers compensation expenditure ($) | $841 | $41,408 | -95% |
| Income support payments (gross) ($) | 0 | $20,104 | -100% |
**Before third party recovery.
Data for previous years is available at: https://data.sa.gov.au/data/dataset/renewal-sa-work-health-and-safety-and-return-to-work-performance
Executive employment in the agency
| Executive classification | Number of executives |
|---|---|
| Chief Executive | 1 |
| Executives* | 18 |
*In accordance with the workforce information data definition Office of the Commissioner for Public Sector Employment, an Executive is an employee who receives:
- A total salary equivalent to $121,224 per annum or more; or
- Receives a Total Remuneration Package Value type contract equivalent to $151,645 per annum or more; and
- Has professional or managerial ‘executive’ responsibilities
Four of the Executives reported above are in the Executive team supporting the Chief Executive. The remainder of the Executives reported are high level senior professionals that are responsible for the delivery of key outcomes e.g. project directors, or leaders of functional business units.
Data for previous years is available at Data SA - Executive Employment
The Office of the Commissioner for Public Sector Employment has a workforce information page that provides further information on the breakdown of executive gender, salary and tenure by agency.
Financial performance
Financial performance at a glance
The reported Comprehensive Result is a loss of $112.3 million, which is an improvement of $94 million on the previous financial year. The comprehensive result has been materially impacted by valuation adjustments and one-off transactions with government which together total $112.2 million. The 'ordinary' result excluding valuation adjustments, and extraordinary transactions is a small loss of $83,000, which is better than budget for ordinary activities by approximately $2 million.
A portfolio of properties was transferred to TAFE SA during the year, for their book carrying value of $601 million. The proceeds from the transfer were applied to reduce borrowings, including the novation of $400 million of fixed interest loans to the Treasurer. These loans were revalued to reflect their market value, immediately prior to their transfer to the Treasurer, resulting in a reported cost for Renewal SA of $68.8 million.
A payment of $6.7 million was made to the then Department for Planning, Transport and Infrastructure (DPTI) as reimbursement for costs incurred as part of the Festival Plaza redevelopment.
Net asset valuation adjustments of $36.8 million were reported in the financial year. The most significant adjustment related to the Adelaide Railway Station, that value of which was reduced by $27 .5 million as a result of the formalisation of rent-free arrangements for the space occupied by DPTI.
The Statement of Financial Position shows a Net Asset and Total Equity of negative $50.7 million as at 30 June 2020. This is an improvement of $13.2 million on the previous financial year. The negative net asset position results primarily from the Government's decision, in the previous financial year, to provide contributions to the capital cost of Renewal SA's development projects as equity rather than grant funding. A going concern issue does not exist given that Renewal SA's forecast cash flows are positive moving forward, with gearing expected to reduce each year over the forward estimates.
It should be noted that Renewal SA's inventory assets are recorded at the lower of cost and net realisable value, in accordance with the Accounting Standard AASB 102 - Inventories. The net realisable value of Renewal SA's inventory assets are estimated to be significantly higher than the reported book value.
A summary of the financial result is presented below. Full audited financial statements for the year ended 30 June 2020 are attached to this report.
| STATEMENT OF COMPREHENSIVE INCOME | 2019-20 ACTUAL $000S | 2018-19 ACTUAL $000S |
| Revenue from sales | $62,567 | $66,755 |
| Less: cost of sales | ($36,489) | ($41,195) |
| Gross profit on sales | $26,078 | $25,560 |
| Other income | $55,070 | $95,137 |
| Operating expenses | ($60,651) | ($66,837) |
| Borrowing costs (excluding early termination costs | ($20,580) | ($40,683) |
| Underlying operating result | ($83) | $13,177 |
| Net gain/(loss) from changes in asset values | ($36,761) | ($219,500) |
| Revaluation loss from early termination of loans | ($68,776) | - |
| Payment to DPTI towards Festival Plaza costs | ($6,695) | - |
| Comprehensive Result | ($112,315) | ($206,323) |
| STATEMENT OF FINANCIAL POSITION | 2019-20 ACTUAL $000S | 2018-19 ACTUAL $000S |
| Current assets | $94,264 | $98,528 |
| Non-current assets | $269,175 | $896,613 |
| Total assets | $363,437 | $995,141 |
| Current liabilities | $300,766 | $399,507 |
| Non-current liabilities | $113,352 | $659,582 |
| Total liabilities | $414,118 | $1,059,089 |
| Net assets | ($50,681) | ($63,948) |
| Equity | ($50,681) | ($63,948) |
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 $10,000 each
| Consultancies | Purpose | Actual Payment ($) |
|---|---|---|
| 30 consultants engaged | Various | 109,124 |
Consultancies with a contract value above $10,000 each
| Consultancies | Purpose | Actual Payment ($) |
|---|---|---|
| AECOM Australia Pty Ltd | Environmental due diligence | 33,719 |
| Baukultur Pty Ltd | Lot Fourteen - Entrepreneur & Innovation Centre Reference Scheme | 137,000 |
| D Squared Consulting Pty Ltd | Women's Health Centre Building Green Star Rating | 13,040 |
| Deloitte Access Economics | Lot Fourteen - Economic Development Strategy | 94,094 |
| Doug and Wolf | Lot Fourteen - Innovation Centre Architectural Visualisation | 11,400 |
| Flightpath Architects Pty Ltd | Adelaide Railway Station -Heritage Advice and Heritage Impact Statements | 28,224 |
| Fyfe Pty Ltd | Aldinga Structure Plan | 63,083 |
| Guildhouse Incorporated | Lot Fourteen - Public Art and Culture Strategy | 11,015 |
| Hannan Duck & Partners | Renewal SA - Strategic Plan 2019-2022 | 19,000 |
| Holmes Dyer | New Castalloy - Development Plan | 37,000 |
| Integrated Heritage Services | Aldinga Cultural Heritage Survey | 18,661 |
| John Wardle Architects | Lot Fourteen - Innovation Centre - Scoping Study, Brief and Preliminary Concept | 462,500 |
| MacroPlan Holdings Pty Ltd | Lot Fourteen - Retail Market Assessment | 10,500 |
| Mott MacDonald | Project Management Support - Women's Health Centre Refurbishment | 33,156 |
| Point of View Design Pty Ltd | Adelaide Railway Station - Lighting Design | 43,078 |
| Price Waterhouse Coopers | Accounting Advice - Lease Accounting | 18,360 |
| Right Angle Studio | Lot Fourteen - Place Vision and Strategy | 55,728 |
| Right Angle Studio | Lot Fourteen - Retail Vision and Strategy | 41,199 |
| Senversa Pty Ltd | Soil Assessment | 44,222 |
| The Buchan Group Melbourne Pty Ltd | North Terrace Frontage Enhancement Works | 135,322 |
| TOTAL | 1,310,301 | |
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.
The details of South Australian Government-awarded contracts for goods, services, and works are displayed on the SA Tenders and Contracts website. View the agency list of contracts.
The website also provides details of across government contracts.
Risk management
Risk and audit at a glance
Renewal SA has in place a robust risk management framework. The objective of this framework is to ensure an appropriate risk culture prevails with a high level of risk awareness throughout the organisation. The framework includes formalised risk management processes to manage risk in line with contemporary risk management standards whereby risks are identified, assessed and assigned to risk owners with risk treatment and mitigating strategies required.
There is also in place appropriate risk reporting to the Executive, the Finance, Risk and Audit Committee and the Board of Management.
The Urban Renewal Authority Board of Management has an established Finance, Risk and Audit Committee whose principal functions are to:
- assess the quality of financial reporting and the effectiveness of internal controls
- oversee the administration of the Risk Management Framework
- maintain an effective and efficient internal control environment
- advise the Board on procedures and ways of working within Renewal SA to align these with the organisation's overall strategic direction
- oversee financial performance
The Finance, Risk and Audit Committee comprises members of the Board of Management, supplemented by an independent member.
Renewal SA's Internal Audit function is provided by the Department of Human Services Internal Audit team, under a Service Level Agreement. The Internal Audit work plan is reviewed and approved by the Finance Risk and Committee with all findings reported to the Committee.
Fraud detected in the agency
Nil.
NB: Fraud reported includes actual and reasonably suspected incidents of fraud.
Strategies implemented to control and prevent fraud
Renewal SA's fraud policies include a range of internal controls to ensure employees, volunteers, agents, contractors, sub-contractors and suppliers of goods and services are aware they must refrain from engaging in any activity that is, or could be perceived as, fraudulent or unethical.
Renewal SA has developed a fraud and corruption control strategy, which includes operational arrangements to improve awareness of obligations and to minimise the chance of fraud such as:
- Training for all staff in fraud and corruption control is conducted every 3 years;
- Induction is provided to all new starters and includes information on fraud and corruption as well as obligations for employees;
- All offers of gifts or benefits (whether or not accepted) are centrally recorded and reported to the Executive and the Finance, Risk and Audit Committee;
- Employees are required to conduct risk assessments, as appropriate, at an enterprise, program, project, operational and transactional level; and
- An annual assurance program is undertaken, whereby all Directors and Executives sign statements of compliance regarding fraud and risk management and any breaches are reported to the Finance, Risk and Audit Committee.
Public complaints
Number of public complaints reported
No categories of complaints were received by, or made against, Renewal SA for the 2019-20 financial year.
The total number of enquiries between 1 July 2019 - 30 June 2020 was 230. As a result of these enquiries, no specific service improvements were required to be implemented by Renewal SA as part of the result or action as a result of the enquiry.
Further information
For further up-to-date information regarding Renewal SA and its activities, please refer to Renewal SA's website.
Financial statements
Statement of comprehensive income
For the year ended 30 June 2020
| Note No. | 2020 $’000 | 2019 $’000 | |
|---|---|---|---|
INCOME | |||
| Revenue from sales | 9 | 62,567 | 66,755 |
| Less: cost of sales | 9 | 36,489 | 41,195 |
| Gross profit from sales | 26,078 | 25,560 | |
| Share of net profit in joint ventures | 10 | 844 | 2,166 |
| Revenues from SA Government | 11 | 6,267 | 8,239 |
| Interest revenues | 12 | 711 | 975 |
| Property income | 13 | 45,493 | 81,141 |
| Other revenues | 14 | 1,755 | 2,216 |
| Net gain from changes in value of non-current assets | 15 | - | 400 |
| Total other income | 55,070 | 95,137 | |
| Total income | 81,148 | 120,697 | |
EXPENSES | |||
| Employee benefits expenses | 7 | 14,573 | 15,780 |
| Operating expenditure | 16 | 49,559 | 49,939 |
| Bad and doubtful debts expense | 20 | 1,311 | 600 |
| Borrowing costs | 17 | 89,356 | 40,683 |
| Depreciation and amortisation | 23 | 1,903 | 518 |
| Net loss from changes in value of non-current assets/provision for development expenditure | 24 | 36,761 | 219,500 |
| Total expenses | 193,463 | 327,020 | |
| Profit/Loss before income tax equivalent | (112,315) | (206,323) | |
| Total comprehensive result | (112,315) | (206,323) | |
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
| Note no. | 2020 $’000 | 2019 $’000 | |
|---|---|---|---|
Current assets | |||
| Cash and cash equivalents | 19 | 11,236 | |
| Receivables | 20 | 5,080 | |
| Inventories | 21 | 74,702 | |
| Investment in joint ventures | 10 | 3,246 | |
| Total current assets | 94,264 | ||
NON-CURRENT ASSETS | |||
| Receivables | 20 | 13,142 | 8,615 |
| Inventories | 21 | 162,002 | 178,920 |
| Investment properties | 22 | 77,590 | 706,530 |
| Property, plant and equipment | 23 | 15,780 | 1,832 |
| Investment in joint ventures | 10 | 659 | 716 |
| Total non-current assets | 269,173 | 896,613 | |
| Total assets | 363,437 | 995,141 | |
CURRENT LIABILITIES | |||
| Payables | 26 | 11,667 | 21,702 |
| Unearned income | 28 | 2,817 | 3,554 |
| Financial liabilities | 27 | 256,113 | 270,552 |
| Provisions | 29 | 27,137 | 101,300 |
| Employee benefits | 8 | 2,880 | 2,247 |
| Other liabilities | 30 | 152 | 152 |
| Total current liabilities | 300,766 | 399,507 | |
NON-CURRENT LIABILITIES | |||
| Payables | 26 | 9,119 | 7,455 |
| Unearned income | 28 | 14,865 | 15,313 |
| Financial liabilities | 27 | 86,357 | 633,150 |
| Provisions | 29 | 48 | 37 |
| Employee benefits | 8 | 2,963 | 3,627 |
| Total non-current liabilities | 113,352 | 659,582 | |
| Total liabilities | 414,118 | 1,059,089 | |
| Net assets | (50,681) | (63,948) | |
EQUITY | |||
| Contributed capital | 509,188 | 381,857 | |
| Retained earnings | (559,869) | (445,805) | |
| Total equity | (50,681) | (63,948) | |
The above statement should be read in conjunction with the accompanying notes.
Statement of changes in equity
For the year ended 30 June 2020
| Note no. | Contributed capital $’000 | Retained earnings $’000 | Total $’000 | |
|---|---|---|---|---|
| Balance 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 | (1,798) | (1,798) | ||
| Transactions with the SA Government in their capacity as owners: | ||||
| 25,000 | – | 25,000 | |
| – | 3,812 | 3,812 | |
| 18 | – | (10,945) | (10,945) |
| Balance as at 30 June 2019 | 381,857 | (445,805) | (63,948) | |
| Total comprehensive result for 2019-20 | – | (112,315) | (112,315) | |
| Transactions with the SA Government in their capacity as owners: | ||||
| 127,331 | – | 127,331 | |
| 18 | – | (1,749) | (1,749) |
| Balance as at 30 June 2021 | 509,188 | (559,869) | (50,681) | |
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 2020
| Note no. | 2020 $’000 | 2019 $’000 | |
|---|---|---|---|
CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Cash inflows | |||
| Receipts from sales | 63,876 | 67,452 | |
| Receipts from tenants (rent and recoveries) | 44,926 | 80,088 | |
| Receipts from SA Government | 6,267 | 26,301 | |
| Interest received | 270 | 495 | |
| Recoveries and sundry receipts | 806 | 4,672 | |
| GST recovered from the ATO | 5,678 | – | |
| Cash generated from operations | 108,883 | 116,145 | |
| Cash outflows | |||
| Payments for land purchase and development | (163,715) | (107,157) | |
| Payments in the course of operations for supplies and services | (64,242) | (78,148) | |
| Interest paid | (9,125) | (92,522) | |
| GST paid to the ATO | – | (58,780) | |
| Cash used in operations | (237,082) | (336,607) | |
| Net cash used in operating activities | 30 | (128,199) | (220,462) |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
| Cash inflows | |||
| Distributions of profit by joint ventures | 3,500 | 1,000 | |
| Proceeds from the sale of plant and equipment | 1 | – | |
| Proceeds from the sale of investment properties | - | 661,243 | |
| Cash generated from investing activities | 3,501 | 662,243 | |
| Cash outflows | |||
| Purchase of property, plant and equipment | (6,601) | (175) | |
| Cash used in investing activities | (6,601) | (175) | |
| Net cash (Used in)/provided by investing activities | 3,109 | 662,068 | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Cash inflows | |||
| Equity contributions received from the SA Government | 58,668 | 127,331 | |
| Proceeds from borrowings | 348,050 | 226,152 | |
| Cash generated from financing activities | 406,718 | 353,483 | |
| Cash outflows | |||
| Repayment of borrowings | (273,050) | (803,187) | |
| Dividends paid to SA Government | (1,193) | (1,749) | |
| Cash used in financing activities | (274,483) | (804,936) | |
| Net cash provided by/(used in) financing activities | 132,475 | (451,453) | |
| Net increase/(decrease) in cash held | 1,167 | (9,847) | |
| Cash at the beginning of the financial year | 11,236 | 21,083 | |
| Cash at the end of the financial year | 18 | 12,403 | 11,236 |
The above statement should be read in conjunction with the accompanying notes.
Note Index
| Note 1 | Objectives of the Urban Renewal Authority |
| Note 2 | Basis of Preparation |
| Note 3 | Significant Transactions with Government Related Entities |
| Note 4 | Revenue from Sales and Cost of Sales |
| Note 5 | Joint Ventures |
| Note 6 | Revenues from SA Government |
| Note 7 | Interest Revenues |
| Note 8 | Property Income |
| Note 9 | Other Revenues |
| Note 10 | Net Gain/(Loss) from Disposal of Assets |
| Note 11 | Key Management Personnel |
| Note 12 | Board and Committee Members |
| Note 13 | Employees Benefits Expenses |
| Note 14 | Employee Benefits Liabilities |
| Note 15 | Operating Expenditure |
| Note 16 | Borrowing Costs |
| Note 17 | Dividends Paid to SA Government |
| Note 18 | Cash and Cash Equivalents |
| Note 19 | Receivables |
| Note 20 | Inventories |
| Note 21 | Investment Properties |
Note 22 | Property, Plant and Equipment |
| Note 23 | Net Gain/(Loss) from charges in Value of Non-Current Assets |
| Note 24 | Fair Value Measurement |
Note 25 | Payables |
| Note 26 | Financial Liabilities |
| Note 27 | Unearned Income |
| Note 28 | Provisions |
| Note 29 | Other Liabilities |
| Note 30 | Cash Flow Reconciliation |
| Note 31 | Unrecognised Contractual Commitments |
| Note 32 | Contingent Assets and Liabilities |
| Note 33 | Financial Instruments Disclosure and Financial Risk Management |
Note 34 | Impact of Standards not yet effective |
Note 35 | COVID - 19 Pandemic Outlook |
| Note 36 | 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 Treasurer as the Minister responsible. In accordance with a Ministerial direction issued to Renewal SA, Renewal SA reports to the Premier as responsible Minister in relation to the Lot Fourteen project.
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: and
- Holding land and other property to be made available as appropriate for commercial, industrial. residential or other purposes.
Renewal SA improves the lives of South Australians now and into the future by leading, supporting and driving Investment and growth through property and projects. As the state government's leading urban development agency, Renewal SA co-ordinates, develops and delivers projects and initiatives through our people and collaborative partnerships for the benefit of South Australians.
Renewal SA is aligned to and supports the government's economic plan, Growth State: Our Plan for Prosperity, which aims to stimulate the South Australian economy and population growth of the State. Activities are driven by the 20-Year State Infrastructure Strategy which sets the long-term direction and priorities for infrastructure development in South Australia; and the Our Housing future 2020-2030 strategy which is delivering a better housing future by coordinating activity and opportunities across the housing sector.
As the delivery agency for the South Australian Government, we provide opportunities for industrial and commercial development on designated lands to support social and economic growth and job creation.
Note 2 Basis of preparation
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 financial statements have been prepared In accordance with relevant Australian Accounting Standards and comply with Treasurer's Instructions and Accounting Policy Statements issued by the Treasurer 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.
Basis of Preparation
Renewal SA's Statement of Comprehensive Income, Statement of Financial Position and Statement of Changes in Equity have been prepared on a going concern, accrual basis and 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 reporting period and are presented in Australian currency. The accounting policies set out below have been applied in preparing the financial statements for the year ended 30 June 2021 and the comparative information presented.
Rounding
All amounts in the financial statements and accompanying notes have been rounded to the nearest thousand dollars ($'000).
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 equivalent 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 lo the net profit. The current income tax liability, if applicable, relates to the Income tax expense.outstanding for the current period.
Basis of preparation
Renewal SA's Statement of Comprehensive Income, Statement of Financial Position and Statement of Changes in Equity have been prepared on a going concern, accrual basis and 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 reporting period and are presented in Australian currency. The accounting policies set out below have been applied in preparing the financial statements for the year ended 30 June 2023 and the comparative information presented.
Rounding
All amounts in the financial statements and accompanying notes have been rounded to the nearest thousand dollars ($'000).
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 equivalent 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 tax liability, if applicable, relates to the income tax expense outstanding for the current period.
Renewal SA recorded operating losses for the reporting periods ending 30 June 2020 and 30 June 2021 and therefore no income tax equivalent was paid/payable.
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.
The financial statements are reported 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 recognised 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.
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., have been classified as current assets or current liabilities. All other assets and liabilities are classified as non-current.
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 minimal 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 which 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 considered 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 fc,3ctors 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 $1.500 million or an estimated useful life that was less than three years' are deemed to approximate fair value.
Refer to Notes 21, 22 and 24 for disclosure regarding fair value measurement techniques and inputs used to develop fair value measurement for non-financial assets.
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.
Impact of Covid-19 Pandemic
Renewal SA has undertaken external valuations and/or undertaken impairment tests for its property holdings as at "30 June 2021. These valuations and impairment tests incorporate known impacts from the current economic conditions on the value of the properties as at that date. Government stimulus measures have had a positive impact on the Adelaide property market, however the future impact of the Covid-19 pandemic on property values Is uncertain.
In accordance with South Australian Government policy, Renewal SA provided rent relief to tenants that were severely impacted by the pandemic during the financial year. Renewal SA received funding from the State Government through the Business and Jobs Support Fund to compensate for rent relief provided., resulting in no net impact on Renewal SA's operating result.
In accordance with the Covid-19 Emergency Response Act 2020, Renewal SA was notable to recover land tax from eligible tenants that were severely impacted by the pandemic. No tenants were eligible for land tax relief during the 2020-21 financial year.
Note 3 Significant transactions with government related entities
Renewal SA had the following significant transactions with South Australian Government entities:
In June 2021, Renewal SA purchased land at Oakden for $44.118 million from various Government agencies, being the Department for Environment and Water for $30.800 million. the Department for Health and Wellbeing for $13.038 million and the Department of Human Services for $0.280 million.
Equity contributions of $58.670 million and Community Service Obligation funding of $6.199 million (refer Note 6) were received from the Department of Treasury and Finance during the financial year,
Rent relief of $1.175 million was granted to tenants of Renewal SA during the 2020-21 financial year. Renewal SA was reimbursed by the Department of Treasury and Finance for rent relief provided, as part of the SA Governments Business and Support Job Fund.
Renewal SA is undertaking the procurement of high voltage electricity and high-pressure gas Infrastructure on behalf of the Department for Trade and Investment, to support the rebuild and expansion of the Thomas Foods facility at Murray Bridge. During the 2020-21 financial year, Renewal SA incurred costs of $0.701 million, recognised $0.701 million in income and $0.387 million of funding for future expenditure, totalling $1.088 million in funding from the Department for Trade and Investment.
Renewal SA occupies Level 9 of the Riverside Centre, North Terrace in a holding .over arrangement from the Department of Infrastructure and Transport. During the financial year, Renewal SA incurred rental expenses of $0.710 million.
Note 4 Revenue from sales and cost of sales
| 2021 $'000 | 2020 $'000 | |
| Sales revenue for the reporting period is summarised as follows: | ||
| Land sales to: | ||
| Joint ventures | 7,112 | 4,620 |
| Entities within the SA Government | - | 7,055 |
| Other - sales to general public and developers | 62,003 | 50,892 |
| Total sales revenue | 69,115 | 62,567 |
| Cost of sales associated with: | ||
| Joint ventures | 4,289 | 752 |
| Entities within the SA Government | - | 13 |
| Other - sales to general public and developers | 43,256 | 35,724 |
| Total cost of sales | 47,545 | 36,489 |
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 title transfers to the purchaser.
Cost of sales comprise all direct material acquisition, development and relevant holding costs in respect 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 5 Joint ventures
In July 2006 documentation was executed with CIC Northgate Pty Ltd, a wholly-owned subsidiary of PEET 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 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 the development proceeds.
Renewal SA's share of the profit from ordinary activities of the Northgate Stage 3 Joint Venture in which Renewal SA has a participating interest, is as follows:
| 2021 $'000 | 2020 $'000 | |
| Revenues | 12,899 | 8,834 |
| Expenses | (11,231) | (7,990) |
| Profit from ordinary activities | 1,668 | 844 |
Movements in Renewal SA's investment in the joint venture during the reporting period is summarised as follows:
| 2021 $'000 | 2020 $'000 | |
| Share of investment in joint ventures: | ||
| Carrying amount at the beginning of the period | 3,905 | 4,061 |
| Profit for the reporting period | 1,668 | 844 |
| Distribution of profit | (3,500) | (1,000) |
| Total carrying amount of investment in joint ventures | 2,073 | 3,905 |
Renewal SA's investment in joint ventures is represented by its share of assets and liabilities as follows:
| 2021 $'000 | 2020 $'000 | |
| Current assets: | ||
| Cash | 2,363 | 2,655 |
| Receivables | 164 | 276 |
| Inventories | 986 | 5,579 |
| Total current assets | 3,513 | 8,510 |
| Non-current assets: | ||
| Property, plant and equipment | 485 | 659 |
| Total Non-Current Assets | 485 | 659 |
| Total Assets | 3,998 | 9,169 |
| Current liabilities: | ||
| Creditors and other payables | 1,925 | 5,264 |
| Total liabilities | 1,925 | 5,264 |
Net assets | 2,073 | 3,905 |
| Net assets after impairment | 2,073 | 3,905 |
Renewal SA's interest in the Northgate Stage 3 Joint Venture Is measured by applying the equity method. Renewal SA's share of the assets and liabilities of the joint venture in which it has a participating interest is included in the Statement of Financial Position as investment in joint ventures. Renewal SA's share of net profit from the joint venture is included as revenue in the Statement of Comprehensive Income as share of net profit in joint ventures.
Joint venture income is recognised when the right to receive payment is established.
Note 6 Revenues from SA Government
| 2021 $'000 | 2020 $'000 | |
| Community service obligations from SA Government | 6,199 | 5,234 |
| Funding from Business and Job Support Fund | 1,175 | 1,552 |
| Other SA Government revenues | 2,235 | 506 |
| Gross revenues from SA Government | 9,609 | 7,292 |
| Less: Revenue deferred for development costs | (2,648) | (1,025) |
| Total revenues from SA Government | 6,961 | 6,267 |
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 services obligations are provided for both capital and operating purposes.
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 capital 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.
Business and Support Fund
As part of the Government's Business and Support Job Fund, funding of $1.175 million (2019-20 $1.552 million) was received to reimburse rent relief provided to Renewal SA's tenants that were severely impacted by the Covid-19 pandemic.
Other SA Government Revenues
SA Government revenues 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.
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 7 Interest revenues
| 2021 $'000 | 2020 $'000 | |
| Interest from cash and cash equivalents | 8 | 252 |
| Finance debtor interest | 469 | 459 |
| Total interest revenues | 477 | 711 |
Interest revenue includes interest from deferred payment arrangements, interest received on bank deposits and interest from finance lease arrangements.
Note 8 Property income
| 2021 $'000 | 2020 $'000 | |
| Rental income | 18,007 | 36,035 |
| Recoveries | 5,906 | 10,556 |
| Rent relief provided | (1,175) | (1,552) |
| Other property income | 134 | 454 |
| Total property income | 22,872 | 45,493 |
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 ii relates to future accounting periods. Rental income from investment properties was $10.690 million (2019-20 $34.135 million).
In accordance with SA Government policy, Renewal SA provided rent relief of $1 .175 million (2019-20 $1.552 million) to tenants that were severely impacted by the Covid-19 pandemic. Funding to reimburse the rent relief was provided to Renewal SA from the Business and Jobs Support Fund (refer Note 6).
Note 9 Other revenues
| 2021 $'000 | 2020 $'000 | |
| Consulting revenue | 534 | 614 |
| Recoveries | 205 | 13 |
| Other revenues | 1,931 | 1,128 |
| Total other revenues | 2,670 | 1,755 |
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.
Recoveries represent the direct recovery of goods and services provided to external parties.
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.
Note 10 Net gain/ loss from disposal of assets
| 2021 $'000 | 2020 $'000 | |
| Plant and equipment: | ||
| Proceeds from disposal | 1 | - |
| Net gain/(loss) from disposal of plant and equipment | 1 | - |
| Investment properties: | ||
| Proceeds from disposal | - | 601,130 |
| Less: Net book value of assets disposed | - | (601,130) |
| Net loss from disposal of completed non-current assets | - | - |
| Total net loss from disposal of non-current assets | 1 | - |
Income from the disposal of plant and equipment is recognised when control of the asset has passed to the purchaser and is determined by comparing proceeds with the carrying amount.
Sales revenue from the disposal of investment properties is recognised when settlement is completed and legal title transfers to the purchaser.
Note 11 Key management personnel
Key management personnel of Renewal SA include the responsible Minister, 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.
Total compensation for key management personnel was $2.522 million (2019-20: $2.105 million). These amounts include payments to key management personnel for accrued leave entitlements where they were paid on departure from Renewal SA.
The compensation disclosed in this note excludes salaries and other benefits to the responsible Minister. 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.
| 2021 $'000 | 2020 $'000 | |
| Salaries and other short-term employee benefits | 1,578 | 1,694 |
| Post-employment benefits | 306 | 136 |
| Other long-term employment benefits include | 83 | 275 |
| Termination benefits | 555 | - |
| Total compensation | 2,522 | 2,105 |
Other long-term employment benefits include payments for long service leave.
Transactions with Key Management Personnel and Other Related Parties
A Director Is an employee of a company that URA leases space from for an annual rental of $0.101 million.
A Director is a director of a company that leases space within a Renewal SA property for an annual rental of $0.569 million.
Note 12 Board and committee members
Members during the year ended 30 June 2021 were:
Urban Renewal Authority Board of Management
- C Tragakis, Presiding Member HM Fulcher
- A Skipper JP Rundle K Willits
- D Hughes (appointed 17 Dec 2020)
- N Reade• (appointed 29 April 2021)
- J W McDowell* (resigned 1B Nov 2020)
Urban Renewal Authority Finance, Risk and Audit Committee
- H M Fulcher, Chair
- C Tragakis
- D Hughes
Urban Renewal Authority People and Culture Sub-Committee
- A Skipper (appointed 20 July 2020)
- K Willits (appointed 20 July 2020)
The People and Culture Sub-Committee was established on 20 July 2020.
in accordance with the Premier and Cabinet Circular No. 016, government employees did not receive any remuneration for board/committee duties during the financial year.
Board and Committee remuneration
The number of members whose remuneration received or receivable falls within the following bands:
| 2021 $'000 | 2020 $'000 | |
| $0 to $19 999 | 2 | 18 |
| $20 000 to $39 999 | 5 | 4 |
| $60 000 to $89 999 | 1 | 2 |
| Total number of members | 8 | 24 |
Total remuneration received and receivable by all members for the period they held office was $0.251 million $0.300 million). Remuneration of members includes sitting fees and superannuation contributions.
Note 13 Employee benefits expenses
| 2021 $'000 | 2020 $'000 | |
| Salaries and wages | 13,270 | 13,736 |
| Targeted Voluntary Separation Packages | - | 103 |
| Long service leave | (182) | 132 |
| Annual leave | 1,154 | 1,242 |
| Skills and experience retention leave | 35 | 118 |
| Employment on-costs - superannuation | 1,761 | 1,589 |
| Employment on-costs - other | 709 | 818 |
| Board and committee fees | 274 | 286 |
| Other employee related expenses | 48 | 8 |
| Gross employee benefits expenses | 17,069 | 18,032 |
| Less: Employee benefits capitalised to inventories | (2,990) | (3,459) |
| Total employee benefits expenses | 14,079 | 14,573 |
Employment on-costs - superannuation
The superannuation employment on-cost charge represents Renewal SA's contributions to superannuation plans in respect of current services of current employees.
| 2021 No: | 2020 No: | |
| The number of employees whose remuneration received or receivable falls within the | ||
| $154 001 to $174 000 | 9 | 7 |
| $174 001 to $194 000 | 6 | 4 |
| $194 001 to $214 000 | 1 | 2 |
| $214 001 to $234 000 | 4 | 4 |
| $234 001 to $254 000 | 3 | 3 |
| $254 001 to $274 000 | 1 | 1 |
| $274 001 to $294 000 | - | 1 |
| $294 001 to $314 000 | 1 | 1 |
| $414 001 to $434 000 | 1 | - |
| $494 001 to $514 000 | 1 | - |
| $514 001 to $534 000 | - | 1 |
| $554 001 to $574 000 | 1 | - |
| Total number of employees | 28 | 24 |
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 $6.424 million (2019-20: $5.250 million).
Targeted voluntary separation packages
There were no employees who received a TVSP during the reporting period 2020-21 (2019-20: 1).
| 2021 $'000 | 2020 $'000 | |
| Amount paid to separated employees: | ||
| Targeted Voluntary Separation Packages | - | 103 |
| Leave paid to separated employees | - | 5 |
| Recovery from the Department of Treasury and Finance | - | (108) |
| Net Cost to Renewal SA | - | - |
Note 14 Employee benefits liabilities
| 2021 $'000 | 2020 $'000 | |
| Current | ||
| Accrued wages and salaries | 425 | 931 |
| Annual leave | 1,649 | 1,618 |
| Long service leave | 309 | 257 |
| Skills and experience retention leave | 55 | 74 |
| Total current employee benefits | 2,438 | 2,880 |
| Non-Current | ||
| Long service leave | 2,559 | 2,963 |
| Total non-current employee benefits | 2,559 | 2,963 |
| Total employee benefits | 4,997 | 5,843 |
Employee benefits accrue 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 (SERL) and Sick Leave
The liability 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 the SERL 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.
AASB 119 Employee Benefits contains the calculation methodology for long service leave liability.
The actuarial assessment performed by the Department of Treasury and Finance has provided a basis for the measurement of long service leave and is based on actuarial assumptions on expected future salary and wage levels, experience of employee departures and period of service. These assumptions are based on employee data over SA Government entitles.
AASB 119 Employee Benefits requires the use of the yield on high quality corporate or government bonds as the discount rate In the measurement of the long service leave liability. The yield on long-term Commonwealth Government bonds has increased to 1.25% in 2020-21 from 0.75% in 2019-20.
As a result of the actuarial assessment performed by the Department of Treasury and Finance, the salary inflation rate of 2.5% for the 2020-21 financial year remained unchanged from the 2019-20 financial year for long service leave liability.
The net financial effect of the changes to actuarial assumptions in the current financial year is a decrease in the long service leave liability of $0.341 million and employee benefits expense of $0.396 milfion. The impact on future periods is impracticable to estimate as the long service leave liability is calculated using a number of demographical and financial assumptions - including the long-term discount rate.
The unconditional portion of the long service leave provision is classified as current as Renewal SA does not have an unconditional right to defer settlement of the liability for at least 12 months after reporting date. The unconditional portion of long service leave relates to an unconditional legal entitlement to payment arising after 10 years of service.
Employee Benefit On-Costs
Employee benefit on-costs (payroll tax and superannuation) are recognised separately in payables (refer Note 25).
Note 15 Operating expenditure
| 2021 $'000 | 2020 $'000 | |
| Property expenditure | 16,843 | 13,348 |
| Land tax | 10,933 | 19,801 |
| Contractors and consultants | 3,021 | 2,254 |
| Accommodation costs | 2,052 | 1,337 |
| Administration and other expenditure | 9,198 | 14,508 |
| Gross operating expenditure | 42,047 | 51,248 |
| Less: Land tax capitalised to inventories | (1,032) | (1,689) |
| Total operating expenditure | 41,015 | 49,559 |
External Consultants
The number and dollar amount of consultancies paid/payable (included in operating expenditure) that fell within the following bands:
| 2021 Number | 2021 $'000 | 2020 Number | 2020 $'000 | |
| Below $10 000 | 26 | 109 | 30 | 109 |
| Above $10 000 | 29 | 1,202 | 22 | 1,310 |
| Total paid/payable to the consultants engaged | 55 | 1,311 | 52 | 1,419 |
Auditor General remuneration
Audit fees paid/payable to the Auditor-General's Department relating to work performed under the Public Finance and Audit Act 1987
included in administration and other expenditure total $0.199 million (2019-20 $0.217 million).
Note 16 Borrowing costs
| 2021 $'000 | 2020 $'000 | |
| Borrowing costs on Premises SA Scheme loan | 88 | 83 |
| Borrowing costs on other loans | 4,595 | 81,858 |
| Borrowing costs on overdraft | 28 | 71 |
| Interest expense on lease liabilities | 266 | 43 |
| Guarantee fees on Premises SA Scheme loan | 64 | 64 |
| Guarantee fees on other loans | 4,018 | 7,448 |
| Guarantee fees on overdraft | 43 | 71 |
| Gross borrowing costs | 9,102 | 89,638 |
| Less: Borrowing costs capitalised to inventories | (174) | (282) |
| Total Borrowing Costs | 8,928 | 89,356 |
Borrowing costs include interest expense and guarantee fees paid to the South Australian Government. Borrowing costs for 2019-20 included a market rate adjustment of $69 million as a result of the novation of fixed rate debt assumed by the Treasurer as part of the sale of TAFE SA properties.
In accordance with 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 incurred.
A qualifying asset is an asset that takes a substantial period of time to be ready for its intended use or sale.
Note 17 Dividends paid to SA Government
| 2021 $'000 | 2020 $'000 | |
| Dividends paid | 1,193 | 1,749 |
| Total dividends paid to SA Government | 1,193 | 1,749 |
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.
Due to the operating loss for the year ended 30 June 2021, Renewal SA did not pay a dividend for its overall activities. In 2019-20 Renewal SA did not pay a dividend for its overall activities.
Renewal SA Is required to make special dividend payments associated with the Adelaide Station and Envfrons Redevelopment (ASER) site. A dividend payment of $1.193 million was paid in relation to the ASER site (2019-20: $1.749 million).
Note 18 Cash and cash equivalents
| 2021 $'000 | 2020 $'000 | |
| Deposits with the Treasurer | 9,372 | 8,216 |
| Short-term deposits with SAFA | 203 | 203 |
| Cash held for Lot Fourteen car park | 746 | - |
| Cash at bank and on hand | 2,082 | 2,817 |
| Total cash and cash equivalents | 12,403 | 11,236 |
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, cash held in term deposit for the Lot Fourteen Car Park and cash received from Property Managers for net rental income on Renewal SA properties.
Interest Rate Risk
Cash at bank and on hand ls non-interest bearing. Deposits at call and with the Treasurer earn a floating interest rate based on daily bank deposit rates. The carrying amount of cash and cash equivalents represents fair value.
Note 19 Receivables
| 2021 $'000 | 2020 $'000 | |
| Current | ||
| Trade and other receivables | 2,782 | 2,452 |
| Lease receivables | 6,340 | 6,311 |
| GST receivable | 5,257 | 1,900 |
| Provision for doubtful debts | (5,516) | (5,699) |
| Prepayments | 16 | 116 |
| Total current receivables | 8,879 | 5,080 |
| Non-current | ||
| Lease receivables | 13,129 | 13,142 |
| Total non-current receivables | 13,129 | 13,142 |
| Total receivables | 22,008 | 18,222 |
Receivables include amounts receivable from goods and services, GST input tax credits recoverable, prepayments and other accruals, measured at historical cost.
Lease receivables include receivables from property leases and finance leases. Finance lease receivables are measured at the present value of minimum lease payments.
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 contractual arrangement.
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.
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 customer debtors and customer debtors assessed on a collective basis for which such evidence exists.
| 2021 $'000 | 2020 $'000 | |
| Carrying amount at the beginning of the period | 5,699 | 4,388 |
| Debts no longer being pursued | (46) | - |
| (Decrease) in the allowance | (137) | 1,311 |
| Carrying amount at the end of the period | 5,516 | 5,699 |
| Bad debts written off: | ||
| Trade debtors | (46) | - |
| Lease receivables | 46 | - |
| Transfer (from)/to provision for doubtful debts: | ||
| Trade debtors | 22 | 298 |
| Lease receivables | (159) | 1,013 |
| Total bad and doubtful debts expense | (137) | 1,311 |
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 that 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 33.
Ageing Analysis of Financial Assets
Refer to table In Note 33.
Risk Exposure Information
Refer to table in Note 33.
Note 20 Inventories
| 2021 $'000 | 2020 $'000 | |
| Current | ||
| Land held for sale | 26,254 | 38,752 |
| Development projects | 39,017 | 35,950 |
| Total current inventories | 65,271 | 74,702 |
| Non-current | ||
| Land held for sale | 138,284 | 140,570 |
| Development projects | 117,294 | 21,432 |
| Total non-current inventories | 255,578 | 162,002 |
| Total inventories | 320,849 | 236,704 |
Movements in carrying amounts:
| 2021 $'000 | 2020 $'000 | |
| Carrying amount at the beginning of the period | 236,704 | 247,322 |
| Land purchases | 80,964 | - |
| Development costs capitalised | 50,370 | 29,316 |
| Open space contribution fund grant | (1,281) | - |
| Cost of sales | (47,545) | (36,489) |
| Transfer to finance receivable | - | (2,478) |
| Inventory write down | (3,264) | (5,942) |
| Reversal of inventory write down | 4,901 | 4,975 |
| Carrying amount at the end of the period | 320,849 | 236,704 |
Inventories Include land and other property held for sale 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 (NRV). NRV is determined using the estimated sales proceeds less costs incurred in producing, marketing and selling to customers. NRV is determined on each individual asset/project by independent valuation or via an internal cash flow valuation.
Inventories were reviewed at 30 June 2021 to ensure they are carried at the lower of cost and NRV.
The amount of any inventory write-down to NRV are recognised as an expense in the period the write-down or loss occurred. Any write-down reversals are recognised as an expense reduction.
The write-downs of $3.264 million and reversals of previous write downs of $4.901 million in 2020-21 are as a result of the annual review of the recoverable values of inventory and future cash flows for projects.
Renewal SA uses a discounted cash flow methodology to value its inventory balances associated with the Tensley, Bowden, Playford Alive and Lot Fourteen projects. In past years the cash flows used in these valuations included the CSO funding from Government as a positive cash flow. From 1 July 2019, funding towards capital expenditure for Renewal SA's development projects is provided in the form of contributions of equity rather than as Community Service Obligations (CSO).
Equity contributions are not included in the discounted cash flow valuation as the nature of the payment is of the form of an owner's contribution to the organisation as a whole rather than being of the nature of funding to offset the capital cost of the particular project.
The following are specific recognition criteria:
Land held for sale
Land held for sale is 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 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 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 the 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 annually 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 a 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 21 Investment properties
| 2021 $'000 | 2020 $'000 | |
| Freehold Land at Fair Value: | ||
| Independent valuation | 56,845 | 55,473 |
| Total freehold land at fair value | 56,845 | 55,473 |
| Buildings at fair value: | ||
| Independent valuation | 26,920 | 22,117 |
| Total buildings at fair value | 26,920 | 22,117 |
| Total investment properties | 83,765 | 77,590 |
Movements in carrying amounts
| 2021 $'000 | 2020 $'000 | |
| Freehold land at fair value: | ||
| Carrying amount at the beginning of the period | 55,473 | 234,600 |
| Disposals | - | (178,267) |
| Net gain on fair value adjustments | 1,372 | (860) |
| Carrying amount at the end of the period | 56,845 | 55,473 |
| Buildings at fair value: | ||
| Carrying amount at the beginning of the period | 22,117 | 471,930 |
| Capitalised grants received | (2,648) | (1,025) |
| Capitalised expenditure | 6,397 | 1,152 |
| Disposals | - | (422,863) |
| Net (loss)/gain on fair value adjustments | 1,054 | (27,077) |
| Carrying amount at the end of the period | 26,920 | 22,177 |
| Total carrying amount at the end of the period | 83,795 | 77,590 |
Amounts recognised in the statement of comprehensive income
| 2021 $'000 | 2020 $'000 | |
| Property Income (refer to Note 8) | 10,690 | 34,315 |
| Direct operating expenses arising from investment properties that generated rental income (refer Note 15) | (6,387) | (4,635) |
| Direct operating expenses arising from investment properties that did not generate rental income (refer Note 15) | (180 | (1) |
| Total Amount Recognised in the Statement of Comprehensive Income | 4,123 | 29,499 |
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, 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. Net gain on fair value adjustments primarily relates to an increase in reported land value at ASER by $2.875 million, an increase in land value at Northern Lefevre Peninsula by $6.200 million and an increase in land value at Gillman by $1.420 million.
Valuation basis
An independent valuation of all Renewal SA's investment properties was conducted as at 30 June 2023. 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 or capitalisation of net income.
Note 22 Property plant and equipment
| 2021 $'000 | 2020 $'000 | |
| Right-of-use buildings | ||
| At cost | 12,466 | 13,513 |
| Accumulated depreciation | (1,720) | (41) |
| Total buildings | 10,746 | 13,472 |
| Accommodation and leasehold improvements | ||
| At cost (deemed fair value) | 3,264 | 3,264 |
| Right-of-use asset at cost | 2,428 | 2,146 |
| Accumulated depreciation | (5,144) | (4,027) |
| Total accommodation and leasehold improvements | 548 | 1,383 |
| Plant and equipment | ||
| At cost (deemed fair value) | 2,151 | 1,775 |
| Right-of-use asset at cost | 16 | 16 |
| Accumulated depreciation | (1,135) | (866) |
| Total plant and equipment | 1,032 | 925 |
| Total property, plant and equipment at cost | 5,415 | 5,039 |
| Total right-of-use assets at cost | 14,910 | 15,675 |
| Total accumulated depreciation | (7,999) | (4,934) |
| Total property, plant and equipment | 12,326 | 15,780 |
Movements in carrying amounts
| 2021 $'000 | 2020 $'000 | |
| Buildings: | ||
| Carrying amount at the beginning of the period | 13,472 | - |
| Right of use asset-additions | - | 13,513 |
| Right of use asset - remeasurement | (1,047) | - |
| Amortisation | (1,679) | (41) |
| Carrying amount at the end of the period | 10,746 | 13,472 |
| Accommodation and leasehold improvements: | ||
| Carrying amount at the beginning of the period | 1,383 | 717 |
| Additions | - | 102 |
| Right of use asset- additions | 378 | 2,146 |
| Right of use asset- remeasurement | (96) | - |
| Amortisation | (1,117) | (1,582) |
| Carrying amount at the end of the period | 548 | 1,383 |
| Plant and Equipment: | ||
| Carrying amount at the beginning of the period | 925 | 1,115 |
| Additions | 427 | 73 |
| Right of use asset | - | 31 |
| Disposals | - | (14) |
| Depreciation | (320) | (280) |
| Carrying amount at the end of the period | 1,032 | 925 |
| Total property, plant and equipment | 12,326 | 15,780 |
Carrying amount of leasehold improvements and plant and equipment
The carrying value of these items are deemed to approximate fair value unless otherwise specified. These assets are classified in level 3, of the fair value hierarchy, as there has been 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 ifappropriate, on an annual basis.
Changes in 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.
Renewal SA occupies Level 9 of the Riverside Centre, North Terrace in a holding over arrangement from the Department ot Infrastructure and Transport. In accordance with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors, Renewal SA has reassessed the useful life of plant and equipment and computer equipment located at the Riverside office in anticipation of a relocation in early 2021-22. The asset useful life of these assets were reduced resulting in an increased depreciation expense in 2020-21 totalling $0.173 million.
Depreciation/Amortisation of $3.116 million (2019-20 $1.903 million) 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) |
| Buildings | Straight Line | Life of lease |
| 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 2021.Property, plant and equipment leased by Renewal SA are recorded at cost. Additions to leased property, plant and equipment during 2020-21 were
$0.378 million (2019-20: $15.690 million).
Short-term leases of 12 months or less and low value leases where the underlying asset value is less than $15,000 are not recognised as right-of-use assets. The associated lease payments are recognised as an expense and are disclosed in note 15.
Renewal SA has a limited number of leases:
- A lease over a car park on Lot Fourteen in the Adelaide CBD,
- Two leases for accommodation located In Bowden.
- A lease for accommodation located In Port Adelaide.
- A motor vehicle lease with the South Australian Government Financing Authority (SAFA}
Note 23 Net gain/ loss from changes in value of non-current assets
A reconciliation of the net gain from changes in the values of non-current assets as follows:
| Note | 2021 $'000 | 2020 $'000 | |
| Inventories | |||
| Inventory write down | 20 | (3,264) | (5,942) |
| Reversal of inventory write down | 20 | 4,901 | 4,975 |
| Provision for future development expenditure | 28 | - | (7,857) |
| Total Gain/(Loss) from Changes in Value of Inventories | 1,637 | (8,824) | |
| Investment property | |||
| Net gain/(loss) on freehold land fair value adjustments | 21 | 1,372 | (860) |
| Net gain/(loss) on building fair value adjustments | 21 | 1,054 | (27,077) |
| Total gain from changes in value of investment property | 2,426 | (27,937) | |
| Total net gain/(loss) from changes in value of non-current assets | 4,063 | (36,761) |
Note 24 Fair value measurement
AASB 13 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 significance 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 other 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 2021
| 2021 $'000 | Level 2 $'000 | Level 3 $'000 | |
| Recurring fair value measurement | |||
| Investment properties (Note 21) | 83,765 | 83,765 | - |
| Plant and equipment (Note 22) | 1,028 | - | 1,028 |
| Total recurring fair value measurements | 84,793 | 83,765 | 1,028 |
Fair value measurements at 30 June 2020
| 2020 $'000 | Level 2 $'000 | Level 3 $'000 | |
| Recurring fair value measurement | |||
| Investment properties (Note 21) | 77,590 | 77,590 | - |
| Leasehold improvements (Note 22) | 481 | - | 481 |
| Plant and equipment (Note 22) | 915 | - | 915 |
| Total recurring fair value measurements | 78,986 | 77,590 | 1,396 |
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 2020-21, 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 21 and 22 for valuation techniques and inputs used to derive level 2 and 3 fair values. During 2020-21 there were no changes in valuation techniques. 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 reconciliation of fair value measurements using significant unobservable inputs (Level 3).
Reconciliation of level 3 recurring fair value measurements as at 30 June 2021
| Leasehold Improvements $'000 | Plant & Equipment $'000 | |
| Opening balance at the beginning of the period | 481 | 915 |
| Acquisitions | - | 427 |
| Depreciation and amortisation expenses | (481) | (314) |
| Carrying amount at the end of the period | - | 1,028 |
Reconciliation of level 3 recurring fair value measurements as at 30 June 2020
| Leasehold Improvements $'000 | Plant & Equipment $'000 | |
| Opening balance at the beginning of the period | 717 | 1,115 |
| Acquisitions | 102 | 73 |
| Depreciation and amortisation expenses | (338) | (273) |
| Carrying amount at the end of the period | 481 | 915 |
Note 25 Payables
| 2021 $'000 | 2020 $'000 | |
| Current | ||
| Trade creditors | 2,134 | 2,581 |
| Sundry creditors and accrued expenses | 12,265 | 8,626 |
| Parental leave scheme | - | 10 |
| Employment on costs | 367 | 450 |
| Total current payables | 14,766 | 11,667 |
| Non-current | ||
| Employment on costs | 167 | 275 |
| Sundry creditors and accrued expenses | 1,800 | 8,844 |
| Total non-current payables | 1,967 | 9,119 |
| Total payables | 16,733 | 20,786 |
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. Creditors include all unpaid invoices received relating to the normal operations of Renewal SA.
Accrued expenses represent goods and services provided by other parties during the 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.
Employment on-costs include payroll tax, ReturnToWorkSA levies and superannuation contributions and are settled when the respective employee benefits that they relate to are discharged.
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 have been assumed by the respective superannuation schemes. The only liability outstanding at reporting date relates to any contributions due but not yet paid to various superannuation schemes.
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 42% (2019-20: 42%) and the average factor for the calculation of employer superannuation on-costs was 10.1% (2019-20: 9.8%). These rates are used In the employment on-cost calculation. The net financial effect of the changes in the current financial year is a negligible increase In the employment on-cost and employee benefits expense.
Interest Rate and Credit Risk
Creditors and accruals are raised for ali amounts billed but 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 33.
Risk Exposure Information
Refer to table in Note 33.
Note 26 Financial liabilities
| 2021 $'000 | 2020 $'000 | |
| Current | ||
| Loans -South Australian Government Financing Authority (a) | 6,401 | - |
| Loans -South Australian Government Financing Authority (b) | 30,000 | 253,050 |
| Lease Liabilities | 2,280 | 3,063 |
| Total current borrowings | 38,681 | 256,113 |
| Non-current | ||
| Loans - South Australian Government Financing Authority (a) | - | 6,401 |
| Loans - South Australian Government Financing Authority (b) | 364,901 | 66,851 |
| Lease Liabilities | 10,510 | 13,105 |
| Total non-current borrowings | 375,411 | 86,357 |
| Total borrowings | 414,092 | 342,470 |
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.
Borrowings from SA Government
These are unsecured loans which bear interest. The terms of the loans were agreed by the Minister/Governing body at the time the loan was provided.
(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 0.2% and 1.08% in 2020-21 (2019-20: 0.43% and 2.52%).
Categorisation of financial instruments and maturity analysis of borrowings
Refer to table in Note 33.
Risk exposure information
Refer to Note 33.
Defaults and breaches
There were no defaults or breaches on any of the above borrowings during the year.
Lease liabilities
Lease liabilities are operating leases and have been recognised in accordance with AASB 16. All material cash flows are reflected in the lease liabilities disclosed above.
Note 27 Unearned income
| 2021 $'000 | 2020 $'000 | |
| Current | ||
| Unearned income | 2,964 | 2,817 |
| Total current unearned income | 2,964 | 2,817 |
| Non-current | ||
| Unearned income | 13,576 | 14,865 |
| Total non-current unearned income | 13,576 | 14,865 |
| Total unearned income | 16,540 | 17,682 |
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 or a constant periodic rate of return. Government grants relating lo costs are deferred and recognised in the Statement of Comprehensive Income over the period necessary to match them with the costs that they areintended to compensate.
Unearned income includes rental income and finance lease interest income of $14.628 million (2019-20: $14.116 million) and revenues from SA Government of $1.912 million (2019-20: $3.566 million) received in advance.
Movements in carrying amounts
| 2021 $'000 | 2020 $'000 | |
| Carrying amount at the beginning of the period | 17,682 | 18,867 |
| Received during the year | 3,139 | 273 |
| Recognised in the statement of comprehensive income | (4,281) | (1,458) |
| Carrying amount at the end of the period | 16,540 | 17,682 |
Note 28 Provisions
| 2021 $'000 | 2020 $'000 | |
| Current | ||
| Provision for workers compensation | 26 | 23 |
| Provision for future development expenditure | - | 27,114 |
| Total current provisions | 26 | 27,137 |
| Non-current | ||
| Provision for workers compensation | 65 | 48 |
| Total non-current provisions | 65 | 48 |
| Total provisions | 91 | 27,185 |
Movements in carrying amounts
| 2021 $'000 | 2020 $'000 | |
| Provision for workers compensation | ||
| Carrying amount at the beginning of the period | 71 | 61 |
| Increase/(Decrease) in provisions recognised | 20 | 10 |
| Carrying amount at the end of the period | 91 | 71 |
| Provision for future development expenditure and legal claim | ||
| Carrying amount at the beginning of the period | 27,114 | 101,276 |
| Reductions arising from payments for development expenditure | (27,114) | (80,615) |
| Increase in provision for inventory development expenditure | - | 7,857 |
| (Decrease)/Increase in provision for lease development expenditure | - | (1,404) |
| Carrying amount at the end of the period | - | 27,114 |
| Total Provisions | 91 | 27,185 |
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 provision 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 2021 provided by a consulting actuary engaged through the Office of the Commissioner for Public Sector Employment (a division of the Department of Treasury and Finance). The provision is for the estimated cost of ongoing payments to employees as required under current legislation.
A provision of $27.114 million was recognised as at 30 June 2020 for the future negative cash flows relating to obligations under the Lot Fourteen development project. This provision was extinguished in 2020-21 through the ongoing development of the project and the payments for development expenditure.
Note 29 Other liabilities
| 2021 $'000 | 2020 $'000 | |
| Current | ||
| Funds held in trust | 744 | - |
| Security deposits | 152 | 152 |
| Total current other liabilities | 896 | 152 |
| Total other liabilities | 896 | 152 |
Funds held in trust relate to the Lot Fourteen Car Park Insurance and Capital Reserve monies.
Security deposits are cash bonds held relating to property leases.
Note 30 Cash flow reconciliation
| 2021 $'000 | 2020 $'000 | |
| Reconciliation of cash and cash equivalents at the end of the reporting period: | ||
| Statement of cash flows | 12,403 | 11,236 |
| Statement of financial position | 12,403 | 11,236 |
| Reconciliation of profit after income tax equivalent to net cash used in operating activities: | ||
| Loss after income tax equivalent | (6,719) | (112,315) |
| Add/less non cash items | ||
Inventories write down | 3,264 | 5,942 |
| Transfers from inventories | - | 2,478 |
| Depreciation and amortisation | 3,116 | 1,903 |
| Provision for doubtful debts | (137) | 1,311 |
| Provision for development expenditure | - | 6,463 |
| Share of net profits of joint ventures | (1,668) | (844) |
| Reversal of inventories write-down | (4,901) | (4,975) |
| Net gain on Investment property fair value adjustments | (2,426) | (27,937) |
| (2,752) | 40,215 | |
| Movements in assets / liabilities | ||
| Increase/(Decrease) in other receivables | (3,909) | (5,112) |
| Decrease/(Increase) in prepayments | 100 | (108) |
| (Increase)/Decrease in inventories | (82,508) | 7,173 |
(Decrease)/Increase in investment property GST | - | (60,113) |
| (Decrease)/Increase in payables | (4,053) | (8,371) |
| (Decrease)/Increase in unearned income | (1,142) | (1,185) |
| (Decrease)/Increase in provisions | (27,114) | (80,615) |
| (Decrease)/Increase in employee benefits | (846) | (31) |
| Increase in other liabilities | 744 | - |
| (118,728) | (148,362) | |
| Net cash (used in) provided by operating activities | (128,199) | (220,462) |
Note 31 Unrecognised contractual commitments
| 2021 $'000 | 2020 $'000 | |
| Operating lease receivables | ||
| Future minimum rental revenues under non-cancellable operating property leases held but not provided for: | ||
| Due within one year | 16,813 | 12,228 |
| Due later than one year not longer than five years | 43,950 | 30,884 |
| Due later than five years | 336,899 | 22,833 |
| Total operating lease receivables | 397,662 | 65,945 |
These amounts comprise of property leases. The property leases are non-cancellable over varying terms up to eighty seven years, with rent payable monthly in advanced. The increase in property leases relates to a transfer of arrangements for the management of the Adelaide Station and Environs Redevelopment property from Department of Infrastructure and Transport to Renewal SA, which occurred in April 2021.
| 2021 $'000 | 2020 $'000 | |
| Capital and operating expenditure commitments | ||
| Payable within one year | 30,327 | 48,524 |
| Payable later than one year not longer than five years | 9,246 | 16,772 |
| Payable later than five years | 4,538 | 793 |
| Total capital and operating expenditure commitments: | 44,111 | 66,089 |
These amounts comprise of property leases and leases for motor vehicles. The property leases are non-cancellable over varying terms up to seven years, with rent payable monthly in advance. Motor vehicles are leased over varying terms up to three years.
Commitments include operating, capital and outsourcing arrangements 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.
Renewal SA has entered a memorandum of administrative arrangements with the Department of Infrastructure and Transport for accommodation. The accommodation arrangement commences 1 September 2021. with future payments of $0.861 million within 1 year, $3.708 million between 2 and 5 years and $5.287 million up to 10 years.
Note 32 Contingent Assets and Liabilities
Contingents Assets
There were no contingent assets as at balance date.
Contingent Liabilities
Renewal SA has a potential liability to a developer of up to $0.200 million (being maximum of $0.100 million for each of the two remaining stages of the three stage development) for soil disposal costs if the soil on site is discovered to be unsuitable for the Renewal SA Soil Bank.
Note 33 Financial instruments disclosure and financial risk management
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 issued by the Premier and Treasurer and the principles established in the Australian Standard Risk Management Principles and Guidelines. Renewal SA's borrowings are guaranteed by the Treasurer in accordance with Section 24(3) of the Urban Renewal Act 1995.Liquidity risk
Renewal SA has non-interest bearing assets (cash on hand and receivables) and liabllities (payables) and interest bearing assets (deposits with the Treasurer and SAFA) and interest bearing 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 the date the invoice is 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.
Renewal SA undertakes all Its borrowings from South Australian Government Financing Authority (SAFA) therefore its market and liquidity risk for new and maturing borrowings Is aligned to that of the South Australian Government.
Market risk
Renewal SA does not trade in foreign currency, nor enter into transactions for speculative purposes, nor for hedging. Market risk for Renewal SA is primarily through price risk.
Exposure to interest rate risk may arise through interest bearing liabilities, including borrowings. Renewal SA's borrowings are managed through the SAFA and any movement in interest rates are monitored daily. There is no exposure to foreign currency or other price risks.
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. No collateral is held as security and no credit enhancements relate to financial assets held by Renewal SA.
Impairment of financial assets
Loss allowances for receivables are measured at an amount equal to the lifetime expected credit loss using the simplified approach in AASB 9.
The maximum period considered when estimating expected credit losses is the maximum contractual period over which Renewal SA is exposed to credit risk. The expected credit loss of government debtors is nil based on the external credit ratings and nature of the counterparties.
The following table discloses information about the exposure to credit risk and expected credit losses for non-government debtors:
| Gross carrying amount $'000 | Loss % | Lifetime expected losses $'000 | |
Current (not past due) | 1,350 | 0.5 | 8 |
| 1 - 30 days past due | 1,292 | 0.5 | 6 |
| 1 - 30 days past due | 64 | 0.5 | - |
| 1 - 30 days past due | 433 | 0.5 | 2 |
| More than 90 days past due | - | 0.5 | - |
| Loss allowance | 3,139 | 16 |
Loss rates are based on actual history of credit loss. These rates have been adjusted to reflect the differences between previous economic conditions, current economic conditions, and Renewal SA's view on the forecast economic conditions over the expected life of the receivable.
Impairment losses are presented as net impairment losses within net resulted, subsequent recoveries of amounts previously written off are credited against the same line item. In addition to the expected loss of $0.016 million there are expected losses of $5.500 million tor specifically identified customers.
Receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include the failure of a debtor to enter a payment plan and failure to make contractual payments.
Renewal SA considers that its cash and cash equivalents have a low credit risk based on the external credit ratings of the counterparties and therefore the expected credit loss is nil.
Categorisation of financial instruments
Details of the significant accounting policies and methods adopted including the criteria for recognition, the basis of measurement, and the basis on which income and expenses are recognised with respect to each class of financial asset, financial liability and equity instrument are disclosed in respective notes.
Renewal SA does not recognise any financial assets or financial liabilities at fair value but does disclose fair value in the notes. All the resulting fair value estimates are included in Level 2 as all significant inputs required are observable.
The carrying value less impairment provisions of receivables and payables is a reasonable approximation of their fair values due to their short-term nature.
Borrowings are initially recognised at fair value plus any transaction costs attributable to the borrowings, and subsequently held at amortised cost. For the majority of borrowings, their fair values are not materially different from their carrying amounts, since the interest payable on these borrowings is either close to current market rates or the borrowings are of a short-term nature.
Renewal SA measures all financial instruments at amortised cost.
2021 contractual maturities
| Note | Carrying Amount $'000 | <1 year $'000 | 1-5 years $'000 | > 5 years $'000 | Amortised Cost $'000 | |
| 2021 Financial assets: | ||||||
| Cash and cash equivalents | 18 | 12,403 | 12,403 | - | - | 12,403 |
| Loans and receivables: | ||||||
| Receivables | 19 | 22,250 | 9,122 | 4,509 | 8,619 | 22,250 |
| Allowance for doubtful debts | 19 | (5,516) | (5,516) | - | - | (5,516) |
| Total financial assets | 29,137 | 16,009 | 4,509 | 8,619 | 29,137 |
| Financial liabilities: | - | - | - | - | - | - |
| Financial liabilities at cost: | ||||||
| Payables | 25 | 15,999 | 14,131 | 1,868 | - | 15,999 |
| Borrowings | 26 | 401,302 | 36,401 | 360,733 | - | 397,134 |
| Lease liabilities | 26 | 12,790 | 2,049 | 8,178 | 2,563 | 12,790 |
| Total financial liabilities | 430,091 | 52,581 | 370.,779 | 2,563 | 425,923 | |
| Net financial assets/(liabilities) | (400,954) | (36,572) | (366,270) | 6,056 | (396,786) |
2020 contractual maturities
| - | Note | Carrying Amount $'000 | <1 year $'000 | 1-5 years $'000 | > 5 years $'000 | Amortised Cost $'000 |
| 2020 Financial assets: | ||||||
| Cash and cash equivalents | 18 | 11,236 | 11,236 | - | - | 11,236 |
| Loans and receivables: | ||||||
| Receivables | 19 | 21,905 | 8,763 | 4,403 | 8,739 | 21,905 |
| Allowance for doubtful debts | 19 | (5,699) | (5,699) | - | - | (5,699) |
| Total financial assets | 27,442 | 14,300 | 4,403 | 8,739 | 27,442 |
| Financial liabilities: | ||||||
| Financial liabilities at cost: | ||||||
| Payables | 25 | 19,834 | 10,990 | 8,844 | - | 19,834 |
| Borrowings | 26 | 326,302 | 253,050 | 73,252 | - | 324,697 |
| Lease Liabilities | 26 | 16,168 | 3,063 | 7,824 | 5,281 | 16,168 |
| Total financial liabilities | 362,304 | 267,103 | 89,920 | 5,281 | 360,699 | |
| Net financial assets/(liabilities) | (334,862) | (252,803) | (85,517) | 3,458 | (333,257) |
Receivables and payables
The 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 and equivalents, 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).
Note 34 Impact of standards not yet effective
Renewal SA has assessed the impact of new and changed Australian Accounting Standards Board standards and interpretations not yet effective. No Australian Accounting Standards have been early adopted other than AASB 2021-2 Amendments to Australian Accounting Standards — Disclosure of Accounting Policies and Definitions of Accounting Estimates which was adopted from 1 July 2021. The main requirements of this standard amend requirements and guidance relating to what accounting policy information is disclosed and clarifies the distinction between changes in accounting policy and changes in accounting estimates.
Note 35 COVID-19 pandemic outlook
The Covid-19 pandemic is likely to continue to impact the Adelaide property market in 2021-22. To the date of reporting, the various financial arrangements provided to businesses by the State and Commonwealth Governments has resulted in minimal adverse impacts on Renewal SA's rental income and property sales income as a result of the Covid-19 pandemic
Note 36 Events after the reporting period
There are no events to report.
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 2021 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) C. Menz 15 September 2021 | (signed) B. Naylor 15 September 2021 | (signed) C. Tragakis 15 September 2021 |