VicUrban’s aim is to deliver liveable places that are compact, vicurban sustainable and affordable, today and into the future. We play a significant role in implementing government policy, create investment opportunities for the market and work with Annual Report the industry to sustain urban development excellence. VicUrban Annual Report 08/09 01
CONTENTS
This annual report outlines VicUrban’s business operations and performance for the financial year 1 July 2008 to 30 June 2009. It reports a year in which VicUrban responded to the challenges of a difficult economic climate to deliver a number of significant achievements.
01 Contents 24 Year in Review / Established Areas 02 Highlights 38 Year in Review / Growth Areas 04 Chairperson’s Report 46 Year in Review / Provincial Areas 06 CEO’s Report 48 Our People 08 Who we are 52 Compliance
10 Location Map 56 Corporate Intent
12 Projects 59 Financial Statements
14 Board of Directors 88 Disclosure Index
16 Executive
18 Corporate Goals & Strategy Report of Operations VicUrban Annual Report 02 08/09 highlighs t 08 09 Sebept m er Nbovem er F ebruary Announcement by Federal Finance Minister Lindsay Tanner VicUrban Awards Carrick Institute of Education Costco commences Melbourne’s Lord Mayor, Robert and Federal Housing Minister 2008-2009 opens new campus at construction at Waterfront City, Doyle launches Docklands’ first Tanya Plibersek with Premier Docklands Docklands. Opens August 2009, purpose-built childcare centre John Brumby that VicUrban will 2009 creating 225 jobs develop the 128 hectare former Tenterfield Digital Harbour’s Life. Lakes Edge launched at Defence Department site at Winner of the National Lab building completed at VicUrban acquires a new urban Hamilton Maribyrnong Urban Development Institute Docklands consolidation site at Avondale of Australia Affordable Heights Northern Hospital Charity march MAY Development Award Auction at Aurora raises Recycled Water is launched at $392,500 D beCEm er Stage two of Kangan Batman 2008 Aurora with Minister Madden, TAFE commences construction Cheltenham Green National Foods moves its head the local member for Yan Yean, at Docklands O cTOber office to Bourke St, Docklands Danielle Green MP and the Urban Development Institute Epping CFA Officer and Victoria Harbour of Australia (Victoria) (UDIA) Harbour Town Shopping Centre (Lend Lease) are selected as Award for Urban Renewal Excellence opens at Waterfront City, First land release at Meridian two of the 16 projects from Docklands achieves a 100% success rate around the world to participate Minister for Housing, Richard in the Climate Positive Wynne commemorates start of april Development Program, a Clinton construction of The Merchant, Climate Initiative The Gauge office building to contain Docklands’ first at Victoria Harbour wins the affordable rental housing Premier’s Sustainability Award jue n initiative (Built Environment) Construction commences at Victoria Green parkland opens Good Friday Appeal Charity the Creeds Farm Living and at Victoria Harbour, Docklands Auction at Cairnlea achieves Learning Centre, Aurora Cheltenham Road realignment a record price of $670,000 Wyndham City adopts in Dandenong opened Last residential lot sells at Amendment C96, enabling Planning Minister Justin Madden Cairnlea, a total of 3134 lots and the 197 hectare Riverwalk launches the completed seven special sites over the life development to proceed Grenda Corporation building of the project at Dandenong 03
outlo k
Victoria’s Development Challenges Victoria is experiencing significant change as a result of unprecedented population growth and changes in its demographic profile. Maintaining and enhancing Victoria’s liveability while addressing these changes presents a number of key challenges and opportunities. Whilst Melbourne’s established suburbs, growth areas and the provincial regions each have individual needs, they all require solutions for: Maintaining and enhancing Victoria’s liveability; Affordable living; Protecting and adapting against climate change; Efficient development and use of existing infrastructure; and Economic prosperity and competitiveness.
In line with Melbourne 2030 and Melbourne @ 5 million, VicUrban will refocus its role to build on its commitment to urban consolidation, while continuing to explore ways to deliver housing choice, diversity and differentiated developments on the urban fringe.
Metro Village 3175, Dandenong VicUrban Annual Report 04 08/09
Dear Minister, The commercial property sector has been directly and significantly impacted by the global economic climate. I am pleased to present VicUrban’s Annual Report for 2008/09, Commercial property developers are experiencing difficulty in a year punctuated by unparalleled changes in the global obtaining finance for construction and acquisition of land, while economy, the accelerated growth of Victoria’s housing needs, a the commercial tenant market is proving more cautious. These heightened public awareness of the implications of population factors have directly impacted on the development of the few growth in Melbourne and Victoria, and climate change. remaining sites in the Docklands precinct during 2008/09. This Redirecting Melbourne’s population growth to established impact has also been evidenced in the very low level of take areas represents a significant shift in existing growth patterns. up in 2008/09 of commercial and mixed-use sites in General Achieving increased housing density and diversification of Fund projects. VicUrban is actively exploring ways to partner employment locations with enduring community support, or otherwise assist developers to commence development and will require comprehensive urban renewal and consolidation sustain construction employment in Victoria. implementation strategies across government. In support of these VicUrban paid dividends totalling $8.9 million in December 2008, policy objectives, VicUrban continued the delivery of Revitalising arising from General Fund activities in the 2007-08 year Central Dandenong, and has commenced in planning roles for ($3.4 million) and from the Revitalising Central Dandenong the Footscray and Broadmeadows central activities districts. project 2007-08 activities ($5.5 million). VicUrban has participated in discussions during the year with The Board met on 11 occasions during the year and Committees you, your Department and other parts of government regarding of the Board met five times. John Stanley was appointed to the ways it can continue to contribute to delivering Melbourne the Board on 16 December 2008, bringing great strengths in c hairpersON’s @ 5 Million outcomes, and looks forward to exploring delivery strategic economic planning, transport and sustainability. Marcus models to increase VicUrban’s impact in established urban areas. Spiller resigned from the Board on 16 April 2009, and I would report / Whilst the global economic situation and a series of interest like to take this opportunity to acknowledge the significant rate reductions moderated established area house prices for contributions made by Mr Spiller to the Board over his five years tony darvAll the majority of the financial year, there continues to be limited and eight months of tenure. ability for moderate income households to purchase a home Michael Roux and Warwick Heine retired from the Board at the in established areas. Accordingly, VicUrban has developed expiry of their appointments in July 2009. I would like to thank practical strategies for achieving housing affordability during the them for their significant contributions to VicUrban and the year, including the delivery of the first affordable rental dwellings Board which, in the case of Mr Roux, extends to VicUrban’s in Docklands in partnership with Lend Lease and Melbourne predecessor organisation being the Urban and Regional Land Affordable Housing (now Housing Choices Australia). Corporation. Julia Mason, Michael Roberts and Meredith Sussex Planning of the Sustainable Living Centre at Meridian is in have been appointed to the Board during August 2009, and progress, and will illustrate 7-Star affordable housing for the I welcome them to VicUrban and the Board. volume product market through a series of architect designed I would also like to thank the CEO and all at VicUrban for their homes. In addition, the Board was particularly pleased that efforts during the year. Officer and Docklands’ Victoria Harbour were selected as two of the 16 world wide founding projects to participate in the Climate Positive Development Program, a Clinton Climate Initiative. VicUrban’s residential property business has weathered the uncertain economic times, delivering 776 settlements during the year. Residential lot sales in the last quarter of the financial TO NY DarVALL AM year were bolstered by both improved consumer sentiment and Chairperson the extension of the State and Federal Government first home owners’ grants. Valley Lake, Keilor East 05
Redirecting a significant proportion of Melbourne’s population growth to established areas represents a shift in existing growth patterns. VicUrban is focusing on delivering liveable neighbourhoods that provide affordable living solutions. This means embracing densification, housing diversity, local employment opportunities and environmental measures, within all of our communities. VicUrban Annual Report 06 08/09
VicUrban participates in the market to improve the quality of urban living, to open up choice to customers and to provide investment opportunities to the private sector. 2008/09 has been a year of contrasts that, on the one hand, resulted in significant highlights for the business, while on the other required careful management through very challenging economic times.
VicUrban is a diverse business, with projects distributed across New investment in Docklands was significantly impacted by the cifh e exe utive Melbourne and regional Victoria that deliver not only housing, but global financial situation, resulting in a loss for that part of the also a mix of community, commercial and retail infrastructure. business in 2008/09. Fortunately, Docklands had enjoyed record This diversity connects the business with investors ranging from levels of investment in the years immediately prior. This enabled officer’s individual home owners and builders, through to major property unprecedented construction momentum to continue throughout sector investors. Such diversity has served both VicUrban and 2008/09, with projects that include corporate facilities for ANZ, Report / the Victorian community well through difficult times. Myer, Fairfax, BP and National Foods. pru sanderson VicUrban’s investment in urban places and improvements As Docklands enters the second decade of its development, continued through its portfolio of over 20 projects in Melbourne we are working with our partners in the private sector and the and provincial Victoria. The aim of our portfolio is to deliver growing Docklands community to focus on the place making and liveable neighbourhoods which provide housing diversity and community outcomes of this important precinct for Melbourne. local employment opportunities. Despite the fact that volume The Revitalising Central Dandenong project is a key plank of the was significantly impacted by the economic conditions, Victorian Government’s urban renewal strategy as articulated in the General Fund returned a modest profit in 2008/09. Housing Melbourne @ 5 million. In the heart of Melbourne’s south east, the performance was also undoubtedly assisted by the stimulus project delivered a solid financial result in line with budget. This initiatives of the State and Federal Governments such as the project has seen a very important year, with the Shared Vision First Home Buyers Scheme. Projects with good performance in and Master Plan, which were developed in consultation with difficult times include Aurora at Epping North and Dandenong’s the Dandenong community, starting to become a reality on the Meridian, which achieved a 100 percent clearance in its first ground. The first major private investments in central Dandenong three land releases. for many years have taken place on the Arkana site, together with the relocation of the Grenda bus company. These have been matched with the realignment of Cheltenham Road into a new boulevard and the commencement of construction of the George Street Bridge. VicUrban Annual Report 08/09 07
VicUrban seeks to locate its projects in neighbourhoods Our organisation’s decade-long journey in water sensitive and centres that will best benefit from an involvement urban design, which started with projects such as from Government. These include areas where there is a Lynbrook and Cairnlea, has been taken to the next step lack of market competition or where there is a need for at Aurora. In partnership with Yarra Valley Water, VicUrban affordable living solutions, densification, housing diversity, has delivered Class A recycled water to every home, employment opportunities and environmental measures. cementing Aurora’s reputation as Australia’s pre-eminent Our projects deliver urban consolidation in areas that environmentally sustainable neighbourhood. can accommodate more population; urban renewal VicUrban has a responsibility to deliver diverse where communities need a comprehensive development neighbourhoods that provide affordable living solutions. approach; and density, diversity and employment into new This has been delivered both through initiatives to urban areas of Melbourne and provincial Victoria. make home ownership accessible to moderate income In securing new locations for the business to operate, households and through affordable rental housing the most significant highlight was the announcement by solutions. 44% of our residential lots were in the lowest the State and Federal Governments that VicUrban will be price quartile of their markets in 2008/09 and VicUrban master developer of the 128 hectare Maribyrnong Defence was successful in receiving National Rental Affordability site. The site will introduce a new model of housing Scheme funding from the Federal Government to deliver diversity adjacent to the Highpoint Activity Centre and will affordable rental housing stock into the market. be delivered with and through the private sector upon In conclusion, while 2008/09 presented the same Maribyrnong site completion of the site remediation works. economic challenges to VicUrban as it did to all other VicUrban’s expertise in the planning and development of businesses, the year saw significant investments by mixed-use employment centres was recognised by the VicUrban in the economic, social and environmental Victorian State Government in the Melbourne @ 5 million future of Victoria. policy document, with the inclusion of VicUrban as a key participant in the planning for the Werribee Employment Precinct. This work has progressed throughout the year in partnership with relevant Government Departments. One of VicUrban’s roles is to stimulate excellence in urban development into the industry and ahead of policy. This is achieved from within VicUrban and in partnership P SRU SandER ON with like-minded industry players. Our organisation’s Chief Executive Officer effectiveness in this sphere has been formally recognised during the year. Tenterfield won the National UDIA award for Affordable Development and Cheltenham Green won the Victorian UDIA award for Excellence in Urban Design, while the Clinton Foundation has included our Officer and Victoria Harbour developments (the latter being delivered in partnership with Lend Lease) in its global Climate Positive Development Program. VicUrban Annual Report 08 08/09
VI CUrbaN VicUrban’s Purpose The Victorian Urban Development Authority Act (2003) VicUrban is the Victorian Government’s sustainable urban land The Victorian Government established the broad functions WHO WE ARE development agency, committed to delivering sustainable, and responsibilities of VicUrban through the Victorian Urban thriving communities that enhance Victoria’s liveability. Development Authority Act 2003 (The Act). VicUrban fulfils a number of roles on behalf of government, the The Act states VicUrban was established to: most important of which is to inform, test and deliver policy VicUrban exists to: outcomes, aimed at addressing the challenges posed by Carry out urban development alone or in partnership; population growth, demographic changes and climate change. Develop the Docklands area in accordance with the Docklands Act 1991; Inform and deliver Government We aim to stimulate excellence through on-the-ground policy outcomes; demonstrations of initiatives such as 6-Star energy designed Undertake declared projects; and homes, or refurbishing the historic Railway Goods Shed No. 2 Assist in the implementation of Government urban Be a catalyst for investment, to create Victoria’s first Green Star accredited heritage-listed development policies and strategies including building. We de-risk solutions and make them easier for the Melbourne 2030. opening up opportunities for market to embrace. The Hon. Justin Madden, Minister for Planning holds ministerial the market; and We are investment catalysts through taking on challenging sites responsibility for VicUrban. such as Docklands, Dandenong and Maribyrnong, we assume Stimulate development risks industry may be less inclined to bear, while opening up Government Policies excellence, where the market opportunities for the private sector to invest in Victoria and help A number of Government policies and objectives drive us create truly great places. does not fully deliver. VicUrban’s corporate objectives. The key published Government We are a government agency which operates commercially, policies that influence our strategic direction are: investing in urban intervention, delivery and demonstration Melbourne 2030: Planning for Sustainable Growth projects. We see ourselves as more than developers – we are place makers, with a conscious objective to create places that Melbourne 2030: a planning update are desirable for people today and into the future. Melbourne @ 5 Million Our Environment, Our Future: Victoria’s Environmental Sustainability Framework Growing Victoria Together A Fairer Victoria: Strong People, Strong Communities Moving Forward: Making Provincial Victoria the Best Place to Live, Work and Invest Victorian Transport Plan VicUrban Annual Report 08/09 09
Sustainability VicUrban’s business approach is founded on a commitment to sustainability, which embraces:
Economic Viability Urban Design Excellence Community Wellbeing Delivering projects that generate local employment Creating a sense of place within an urban landscape. Facilitating the development and delivery of community opportunities, have access to surrounding labour markets infrastructure, community programs and community and are affordable to live in. Exa mPLE engagement activities to address the social and wellbeing Meridian - Challenging urban design norms, creating a needs of communities. Exa mPLE pedestrian oriented development through innovative traffic Revitalising Central Dandenong - VicUrban, on behalf calming measures and productive landscapes of orchards Exa mPLE of government, is intervening in the market to open up in line with international best practice. Creeds Farm Village at Aurora - This will be a precinct that opportunities for the private sector, to make Dandenong focuses predominantly on education and learning and is the capital city of Melbourne’s south east. The $45 million Environmental Leadership intended to include a primary school, a children’s centre, Arkana development commenced by Deal Corporation general store and public parks. The Living and Learning and the $15 million Grenda’s bus facility demonstrated Protecting and managing natural systems, habitat and Centre is anticipated to open in early 2010. the first significant private sector investment in line with biodiversity and the efficient use and management of the revitalisation. finite resources. Docklands - In January 2009 The Harbour Family and Children’s Centre opened at Docklands, providing 150 childcare places as well as maternal health and kindergarten Affordable Living Exa mPLEs Aurora - The largest 6-Star energy designed development services to the community. Providing access to quality affordable housing that is in Australia that paved the way for the new national located close to services, transport, employment and 6-Star standard. community facilities. Officer and Victoria Harbour at Docklands - Selected as Exa mPLEs two of the 16 worldwide founding projects to participate Tenterfield - Winner of the 2009 UDIA National Award for in the Climate Positive Development Program, a Clinton Excellence in Affordable Housing Development. Climate Initiative. Docklands continues to deliver sustainable developments with the highest concentration of The Merchant, Docklands - Delivering affordable rental sustainable 5 and 6-Star Green Star commercial buildings options for the city’s key workers, in partnership with in Australia. Lend Lease and Melbourne Affordable Housing (now Housing Choices Australia). VicUrban’s plans for its Officer and Maribyrnong projects also intend to provide leading examples in the area of affordable living. VicUrban Annual Report 10 08/09
Sunbury TOIL WER H L J SI AcksON H LL Swan Hill CRAIN iG EBUR RB POX URgh ARK AUROR P ArksidE Epping Shepparton P ArksidE GardENS Broadmeadows Melton l eancast r gate Melbourne TEEL NT RFIE D LKEGA ES D E v kalLEY la e Hamilton CAIRNE L A ao ehv ndal eights M NGAribYR ON Box Hill Ringwood
Provincial Projects FOOT ScraY MELUN BO R E docklands hoeathm nt We e rribe employment precinct T HE BOArdwaLK RIE V RwaLK c layTOn west kye dand enong logis ch eLTEnham green metlg ro vil a e 3175 Growth Areas rv e italising central dandenong Established Areas Port ME Ridian Philip N arre warren north Bay b on each LY O NbrO K OFFC I ER CARDINIAD R
Pakenham Cranbourne Frankston
N VicUrban Annual Report 08/09 011
VicUrban has more than 25 projects in metropolitan Melbourne and in regional Victoria. c layTOn west C layton West Maribn yr ong Maribyrnong metlg ro vil a e 3175 D andenong pric ov n ial P rojeCTS / Tt o al area 2.06 ha Tt o al area 128 ha Tt o al area 28 ha Nof o dweLLings 47 E ofST N o dwellings 3,000 Nof o dweLLings 1,000 p arkside S hepparton Pp o proJEction 122 Esr t esidents 6,000 POP proJEction 3,000 Tt o al area 7 ha developable land Exe p ct d COMPLETion 2012 Commuiy n t infrastructure Commuiy n t infrastructure Nof o dweLLings 92 VicUrban Significant public open space, Realignment of Cheltenham Road, close 300 proposed community facilities proximity to public transport, proposed Pp o proJEction dand enong logis D andenong Su y stainabilit initiatives TBA community centre, 2 ha open space Commuiy n t infrastructure Established Areas Tt o al area 154 ha North Shepparton Community Hub, Exe p ct d COMPLETion 2024 Su y stainabilit initiatives N/A Esnfwt o o orkers 3,000 neighbourhood renewal program Exe p ct d COMPLETion 2015 MT E RO P ROPOSED Commuiy n t infrastructure Su y stainabilit initiatives Landscaped public open spaces, provision of melun bo r e DOCKlands WSUD including swales, 5-Star energy efficient bicycle tracks to enable employees to ride rv e italising central dandenong homes including solar design principles ao ehv ndal eights A vondale Heights Tt o al area 200 ha renewal (land and water) to work Exe p ct d COMPLETion 2011 Tt o al area 4 ha Nof o dweLLings Dandenong P uROPOSED S stainability initiatives 8,000 - 9,000, Tt o al area 170 ha declared project area Nof o dweLLings 200+ WSUD stormwater management, design 2 (850,000m commercial as at 2020) Nof o dweLLings POP proJEction 200+ guidelines to manage built form, grid connected Parksid e gardens S hepparton Esr t esidents 17,000 at 2020 4,000 new dwellings across declared project area Commuiy n t infrastructure NRAS T5 energy efficient street lighting system Tt o al area 24 ha Eswks t or er 40,000 workers as at 2020 EMPLOYME NT projection Su y stainabilit initiatives Exe p ct d cOMPLETion 2017 Nof o dweLLings 145 Es os t visit r 20 million per year as at 2020 5000 new jobs across declared project area 7-Star Green Star energy designed housing, POP proJEction 400 Commuiy n t infrastructure Commuiy n t Infrastructure WSUD Commuiy n t infrastructure hoeathm nt Heathmont Parks, childcare centre, proposed library Local training and employment opportunities, Exe p ct d COMPLETion 2013 50% open space including waterways and and sporting hubs retail outlets at ground level to promote activity Tt o al area 3.6 ha wetlands, close proximity to local facilities Su y stainabilit initiatives in the city centre Nof o dweLLings 65+ Su y stainabilit initiatives B ON EAch B onbeach Melbourne Docklands ESD guide, WSUD, one Su y stainabilit Initiatives POP proJEction 200+ Wetlands and waterways designed to improve Tt o al area 6 ha 6-Star Green Star commercial building complete, High quality energy efficient buildings for Commuiy n t infrastructure water quality and supplement council’s irrigation five 5-Star buildings complete, or nearing living and working, green streets with wide Nof o dweLLings Pedestrian links to existing community for the adjacent sporting precinct, 5 to 6-Star completion, and a number of buildings registered pedestrian paths 78 residential 19 medium density infrastructure energy efficient homes, rainwater used for hot for Green Star accreditation with the Green POP proJEction 250 Su y stainabilit initiatives Exe p ct d COMPLETion 2025 water, toilet, laundry and gardens Building Council of Australia, recycled water to Commuiy n t infrastructure 6-Star Green Star energy efficient designed Exe p ct d COMPLETion 2013 Retention and upgrade of local school hall Docklands Park housing, WSUD, retention of existing mature V KALLEY LA E K eilor East and car parking, 7,500m2 of open space vegetation Exe p ct d COMPLETion 2020 Tt o al area 47 ha Su y stainabilit initiatives Exe p ct d COMPLETion 2013 Nof o dweLLings 580 lots Water tanks for toilet and garden use M eridian D andenong South and WSUD stormwater treatment POP proJEction 1,800 l eancast r gate B undoora Tt o al area 18 ha Exe p ct d COMPLETion 2010 Commuiy n t infrastructure Tt o al area 26 ha Nof o dweLLings 280 14 ha of open space, two amphitheatres with Nof o dweLLings 535 POP proJEction 750 picnic and BBQ facilities, boardwalk C heltenham C heLTEnham green POP proJEction 2,500 P ROPOSED COMMUnity infrastructure Su y stainabilit initiatives Tt o al area 3 ha Commuiy n t infrastructure Connections to the local bicycle paths, urban Solar orientation, water tanks, solar hot water, Nof o dweLLings 51 Council operated community centre integrated orchards, close to 2 ha open space and gardens Steele Creek rejuvenation, lake purification to POP proJEction 150 with neighbourhood village, refurbishment of P uROPOSED S stainability initiatives wetlands, habitat preservation for the near Commuiy n t infrastructure n/a historic buildings, central sporting oval, public Maximise construction waste diverted from landfill, extinct Peregrine Falcon Su y stainabilit initiatives transport access third pipe recycled water and 6-Star energy Exe p ct d COMPLETion 2012 Sustainable design principles incorporated into Su y stainabilit initiatives efficient homes housing development, protection of significant Sustainable housing design principles, protection Exe p ct d COMPLETion 2012 native and exotic trees, WSUD principles of over 50% of the mature trees, establishment throughout, protection of cultural heritage of Laurundel Grassland reserve Completed Exe p ct d COMPLETion 2008 (residential sales) (2015 mixed use precinct) Growth Areas cairne l a C airnlea/St Albans J SI AcksON H LL S unbury OFFC I ER Officer teel nt rfie d B urnside Heights Tt o al area 460 ha Tt o al area 193 ha Tt o al Area 340 ha Tt o al area 108 ha Nof o dweLLings 3,000 Nof o dweLLings 1,100 App of rox N o Dwellings 6,000 Nof o dweLLings 1,000 MT E RO Pp o proJEction 10,000 Pp o proJEction 3,300 Pp o ProJEction 15,000 Pp o proJEction 3,000 Commuiy n t infrastructure Commuiy n t infrastructure Commuiy n t Infrastructure Commuiy n t infrastructure AUROR Epping North Cairnlea Town Centre, local government Sunbury Primary School, Sunbury Special Proposed activity centre, proposed schools Future public school, 34 ha of open space, Tt o al area 630 ha community hub, residents’ association, School, Victoria University, 42 ha of existing and (three), approx. 40 ha of open space sports park facilities due in 2009, adventure Nof o dweLLings 8,000 Deer Park Cairnlea Primary School, proposed open space, bicycle/walking paths Su y stainabilit Initiatives playground, energy efficient housing Pp o proJEction 25,000 secondary school, 91 ha of open space, four Su y stainabilit initiatives Third-pipe water recycling, WSUD, FTTH, Su y stainabilit initiatives Commuiy n t infrastructure parks, 37 ha conservation reserve and a future WSUD for wetlands and public open space, 7-Star energy designed homes WSUD, integrated walking paths and bike trails Planned to include two mixed use town centres, business park 22 home solar precinct, surplus energy back to Exe p ct d COMPLETion 2030 Exe p ct d COMPLETion 2009 five schools, three community activity centres, Su y stainabilit initiatives grid, low energy street lighting, recycled onsite various sporting facilities and over 135 ha of WSUD stormwater management, protection of materials and water used in construction and open space endangered fauna and flora program, Aboriginal civil works rie v rwalk W erribee pric ov n ial Su y stainabilit initiatives artefact protection program Exe p ct d COMPLETion 2012 Tt o al area 197 ha 6-Star energy efficient homes, third pipe water Nof o dweLLings 2,200 Exe p ct d COMPLETion 2013 TOI WER H LL S wan Hill recycling, WSUD stormwater management, Pp o proJEction 5,000 ly o nbro k Lynbrook Tt o al area 150 ha eco selector, construction waste management, p roPOsed COMMUnity infrastructure 185 ha fibre to the home, green powered street lighting, cardinia rd Officer Tt o al area Mixed use neighbourhood village, Melbourne Nof o dweLLings 1,100 Living and Learning Centre at Creeds Farm Tt o al area 28 ha Nof o dweLLings 1,516 Water Discovery Centre, 25 ha of open space, Pp o proJEction 2,500 Exe p ct d cOMPLETion 2030 Nof o LOTS 300 Pp o proJEction 5,200 independent public and private schools Commuiy n t infrastructure Pr oPOsed coMMUnity infrastructure Commuiy n t infrastructure p uroPOsed S stainability initiatives Sunraysia TAFE, proposed shop/cafe site, Two lakes/wetlands, one primary school, oval, Alcheringa Aged Care and retirement tb he oardwalk Point Cook Mixed use precinct, 25% open space, recreation 6-Star energy designed homes, WSUD, and wetlands, bicycle and walking paths playground, BBQ recreation area, retail area, rehabilitation of natural environment village facility Tt o al area 175 ha p roPOsed sustainability initiatives community centre Exe p ct d COMPLETion 2020 Su y stainabilit initiatives Nof o dweLLings 1,712 6-Star energy efficient homes, fibre to the home, Su y stainabilit initiatives Design controls, WSUD stormwater management, Pp o proJEction 5,000 Class A recycled water for toilet flushing and WSUD throughout, roads designed to stormwater reuse, home of the Swan Hill Eco Commuiy n t infrastructure garden use, grid connected T5 energy efficient accommodate existing red gums, protection of Rob x urgh park Roxburgh Park Living Centre Includes Carranballac College, a community street lighting, creation of eco-habitat area for the Barnbam Swamp, protection of significant Tt o al area 650 ha Exe p ct d COMPLETion 2020 centre, main street-style mixed use town centre, Growling Grass Frog Aboriginal sites Nof o dweLLings 5,600 corner store, childcare centre and Emmanuel E XP CT D COMPLETION 2012 Exe p ct d COMPLETion 2011 Pp o proJEction 14,500 College Catholic School Lak es Edge H amilton Commuiy n t infrastructure Tt o al area 28 ha Su y stainabilit initiatives Three shopping centres, four primary schools, cragi eburn C ragieburn narr e warren north N arre Warren Nof o dweLLings 300 Solar orientation, Skeleton Creek revitalisation one secondary school, youth and recreation Tt o al area 11 ha 1,000 and 13 ha of wetlands with boardwalks Tto al Area 108 ha centre, nursing home and aged care facility, Pp o proJEction Nof o dweLLings 58 Exe p ct d COMPLETion 2009 App of rox N o Dwellings 1,200 community centre, sports complex, 80 ha of P ROPOSED COMMUnity infrastructure Pp o ProJEction 3,500 Pp o proJEction 183 open space Lake foreshore included in master plan and an all abilities playground to be constructed Commuiy n t Infrastructure P ROPOSED COMMUnity infrastructure Su y stainabilit initiatives Proposed mixed use neighbourhood village New shared pedestrian paths, inclusion of small WSUD, 14 lake open drainage system, P uROPOSED S stainability initiatives Su y stainabilit Initiatives park, increased pedestrian and bicycle access tree protection Solar orientation, 5 to 6-Star energy efficient homes, compulsory water tanks, Build for Life Recycled water, solar orientation, P uROPOSED S stainability initiatives E XP CT D COMPLETiON 2010 energy efficient homes Rainwater harvesting for hot water, solar principles, WSUD stormwater management and stormwater reuse Exe p ct d COMPLETion 2015 orientation, recycled water for toilets and garden use, WSUD and reconstruction of existing Exe p ct d COMPLETion 2024 wetlands, retention of 200 year old swamp gum, indigenous landscaping Exe p ct d COMPLETion 2010 VicUrban Annual Report 14 08/09
TO NY DarVALL AM Michal e ROUx Chairperson Michael Roux is chairperson of Roux International Pty Ltd, A lawyer, Tony Darvall is chairperson of the Linking Melbourne Australian Davos Connection (ADC), Victorian Opera, and Authority, and a commissioner of the Essential Services Asian Markets-KPMG. He is also a Director of Asialink and the St James Ethics Centre. A senior advisor to the World Economic 1 2 3 Commission. Tony was a member of the Melbourne CityLink Authority from 1995 to 2001. He also sits on the Ethics Forum, Michael is Honorary Consul-General for Rwanda Committee of the Royal Melbourne Research Foundation, and in Australia and senior economic advisor to the President is chairperson of the Maud Gibson Trust and the Board Quality of Rwanda. 5 Review Committee of CPA Australia. 1 G earry W av n Cr a oLYn LlOYd Garry Weaven is chairperson of Industry Funds Management, a director of both Members Equity Bank and Pacific Hydro Pty 4 5 6 Deputy Chairperson Ltd, and a member of the Board of Infrastructure Australia. Carolyn Lloyd specialises in sustainability and environment He also serves on the Federal Government’s Superannuation issues in the building and development industries. A member Advisory Committee. 6 of Sustainability Victoria and the Building Practitioners Board, Carolyn’s previous positions include CEO of the Housing W en arwick H i e Industry Association, member of the Premier’s Sustainability Fund, EcoRecycle Victoria and the Sustainable Energy Authority Warwick Heine works as a policy analyst, governance advisor and strategist to the private, public and not-for- 7 8 9 of Victoria. 2 profit sectors. He is chairperson of the Emergency Services G abrieLLE Trainor Telecommunications Authority (ESTA), a director of the Australian Safe Communities Foundation (ASCF) and a director of the Gabrielle Trainor, a lawyer, journalist and former public sector BR fOA D o South East Region Migrant Resource Centre. 7 executive, has consulted in issues management for 25 years. A founding partner of John Connolly & Partners, a specialist J tnohn S a lEY directors / public affairs and communications firm, she is chairperson of Church Resources, a director of the Barangaroo Delivery An economist and Adjunct Professor at the Institute of Transport VICURBAN Authority and the AFL Foundation, a member of the Victorian and Logistics Studies, University of Sydney, John Stanley has Aboriginal Economic Development Group and a director of a held a range of advisory positions, including nine years as number of other community organisations. 3 Executive Director of Bus Association Victoria. He is a member of the Victorian Alpine Resorts Co-ordinating Council, and M ArcUS SPILLER received a Centenary Medal for services to public transport Dr Marcus Spiller is a director of SGS Economics & Planning and conservation. 8 Pty Ltd. His consulting experience spans land economics, regional development, housing policy, infrastructure funding and S haron Michael policy co-ordination systems. He has taken up secondments General Counsel and Secretary to the Board as a lecturer in urban economics at Melbourne University and Sharon is a lawyer with experience in Major Projects, Finance, adviser to the Minister for Planning and Housing in Victoria. He Litigation, Property and Commercial Law. As General Counsel is an Adjunct Professor in urban management at the University and Secretary to the Board, she manages all legal, governance of Canberra. 4 and probity issues arising in respect of VicUrban’s business, as well as legal risk and compliance. 9 VicUrban Annual Report 08/09 15
The Board Bo ard ATTEndance The Board is responsible for setting the strategic direction of VicUrban and for monitoring its performance. A framework for effective Bo ard Committees management has been established through delegated authorities, Eligibloa e t ttend Attended Eligible to attend Attended control mechanisms, policies and comprehensive risk management strategies. Tony Darvall 11 10 3 3 Marcus Spiller* 9 9 2 2 The Board consists of a Chairperson, a Deputy Chairperson, and no more than seven other members. The Governor in Council appoints Gabrielle Trainor 11 11 2 2 members for periods not exceeding five years. As at 30 June 2009 there Michael Roux 11 6 3 3 were seven members of the Board (Marcus Spiller having resigned in April 2009). Carolyn Lloyd 11 10 2 1 Garry Weaven 11 9 5 3 The Board ensures that the government is informed of all major issues affecting VicUrban. Board meetings are held monthly, or more frequently Warwick Heine 11 10 2 1 if required. Annual Board performance reviews are undertaken. John Stanley** 6 6 - - The Chief Executive Officer, the General Counsel (who is Secretary to * Marcus Spiller resigned, effective at the end of the April Board Meeting on 16 April 2009. the Board) and the Chief Operating Officer attend each Board meeting. ** John Stanley was appointed on 16/12/08 and attended the December meeting held on 18 December 2008. VicUrban staff members attend by invitation as required. Attendance by members at Board and committee meetings during the year is detailed in this report. Directors’ fees, and related party transactions with directors and their related entities are fully disclosed in Note 18 and Note 22 to the Financial Statements. Comm M itTEE embership Financ u e, A dit People & Renumeration Committees to the Board & Risk Committee Committee In order to enable detailed consideration to be given to specific Tony Darvall 3 governance issues, the Board established two committees, which continued to operate throughout the year. The Finance, Audit and Risk Marcus Spiller 3 Committee is charged with oversight of the financial management of Gabrielle Trainor 3 VicUrban, and receives reports from both internal and external auditors. Michael Roux 3 Chairperson This committee also reviews risk management policy and practices. The People and Remuneration Committee deliberates on remuneration Carolyn Lloyd 3 Chairperson policy and practices, and also oversees the performance management, Garry Weaven 3 3 succession and people development processes. Warwick Heine 3 John Stanley VicUrban Annual Report 16 08/09
Pr s u Sander on D ugavid Yo n B.Arch (Hons.) Grad Dip (Equiv) ICCROM (Rome), GAICD B. Environmental Sc. (Hons), MBA Chief Executive Officer General Manager - Project Planning & Design The Chief Executive Officer is responsible for leading and Project Planning and Design is responsible for leading and 1 2 managing the organisation, driving excellence in sustainable supporting innovation across VicUrban in the areas of urban development through strategic policy implementation. The CEO design, environment, affordable living, community and reports to the Board of Directors and is accountable to the cultural initiatives. 5 Victorian Government in accordance with the Victorian Urban Development Act 2003, under which the Statutory Authority N ic Mesic has its Charter. 1 Grad Cert, Bus Admin General Manager - Strategic Marketing & Communications 3 4 5 S eam Sangst r B.Sc (Ma), LLB (Hons), GDLP, CPA, GAICD Strategic Marketing and Communications includes brand strategy, business planning, project marketing, sales and Chief Operating Officer communications. It incorporates specialist disciplines including The Corporate Operations division includes finance, legal and market research, sponsorship, events, design media and governance, human resources, information, communication and digital marketing. 6 technology, risk management and bid management functions. It is also responsible for business partnering, decision support Ro b Vines 6 7 8 and the delivery and maintenance of high quality information, BTRP (Hons) 2 business tools, policies and procedures. General Manager - Urban & Provincial Communities ecv xe uti e / Michaly e H nes Urban and Provincial Communities is responsible for the delivery B.Eng. (Hons), B.Comm. of VicUrban’s development projects in metropolitan Melbourne and provincial Victoria, taking a lead role in the implementation VICURBAN General Manager - Docklands & Major Projects of best practice urban outcomes and the delivery of innovation Docklands and Major Projects is responsible for managing the in the marketplace. 7 development of the $12 billion Melbourne Docklands project in partnership with private enterprise, working to ensure Mat l t Faube the successful development of Docklands as a vibrant and BTRP, MTRP (Melb.), SAS (Munich), MPIA 3 connected community. Government Dom inic Arcaro The Government Group has a key role in providing input to LLB (Hons) and B.A. VicUrban’s projects and corporate strategies. The group also facilitates VicUrban’s response to, and delivery of, government General Manager - Urban Revitalisation policies as well as informing policy and assists the business in Urban Revitalisation is responsible for the delivery of VicUrban’s its interactions with all levels of government. 8 urban renewal projects, including the Revitalising Central Dandenong project, and securing new business opportunities in metropolitan Melbourne. 4 17
Webb Bridge, Melbourne Docklands 18
copaeg r or t oals & strategy Report of Operations
The Board develops VicUrban’s strategy in consultation with government and stakeholders. The strategy positions VicUrban to play a significant role in implementing Melbourne @ 5 million, to deliver urban renewal and consolidation while stimulating excellence and private sector opportunities at the fringe. The 2008/09 Corporate Strategy responded strongly to key policy areas outlined by the State Government, in response to a growing population and a changing market that demands more sustainable, liveable communities located close to where people live, work and play. It was a plan for a changed future, informed by policy and market considerations, recognising VicUrban’s legislative obligations to act as a commercial developer.
VicUrban Annual Report 08/09 19
VicUrban’s corporate goals for the period were: Fibre-To-The-Home Residents and businesses at a number of VicUrban’s developments will be able to benefit Goal 1: Investment in Innovation from VicUrban’s Fibre-To-The-Home infrastructure. Initially offered at Aurora and now being introduced at Meridian, Cardinia Rd and Valley Lake, the experience of initiating the Applying commercial principles to enable investments innovation ahead of regulatory standard has enabled VicUrban’s builder partners to gain a in innovative, sustainable communities. head start on capacity to deliver the building requirements and gain market edge in new building technology related to Fibre-To-The-Home. The goal to expand VicUrban’s innovation role is on track with significant progress made VicUrban’s on the ground experience in delivering Fibre-To-The-Home infrastructure during 2008/09 in developing, testing and demonstrating a range of innovations. has informed the Australian Government’s plans for a National Broadband Network, by providing a practical demonstration of a large scale roll out of a similar initiative. Energy Efficiency Since 2006, VicUrban has demonstrated 6-Star energy designed homes at its Aurora Sustainable Design and Construction community in Epping North, the largest sustainable community of its kind in Australia. VicUrban has worked towards broader industry take up of its Sustainable Community Now, with a population of over 1000, Aurora is expected to grow to a population of Rating tool. The Green Building Council of Australia (GBCA) has been identified as the approximately 25,000. most appropriate body to lead the way forward. Under a Memorandum of Understanding During the 2008/09 year VicUrban launched Meridian at Dandenong South. Following on with the GBCA, VicUrban’s significant contribution is recognised and VicUrban will be a from the success of Aurora, Meridian has also embedded 6-Star energy designed homes key participant in the development of the national as a standard. For a range of builders, the opportunity to participate and demonstrate precinct-wide sustainability tool. their capacity to deliver on 6-Star energy designed homes before regulation is introduced VicUrban’s Sustainable and Affordable Housing Initiative is seeking to demonstrate has been invaluable. Both the initiatives have been important to inform Vicurban and innovation in the area of compact energy efficient homes, through its Sustainable Living its industry partners of key learnings and opportunities to evolve sustainable and viable Centre. VicUrban has worked with four firms of architects to design five 7-Star energy housing product in new developments. rated homes to be built at the Meridian development in Dandenong. Due for completion In February this year the Council of Australian Governments agreed to introduce a in 2010, the homes will provide an opportunity, to work with industry, to educate and National Strategy for Energy Efficiency to accelerate energy efficiency efforts across all inform architects and building professionals on specific design and building techniques to governments, and to help households and businesses prepare for the introduction of the deliver a sustainable home. Open to the public as a Demonstration and Education centre, Commonwealth Government’s Carbon Pollution Reduction Scheme. consumers will learn what the requirements of an energy efficient sustainable home are and learn how to live a greener lifestyle. VicUrban will undertake research to test the For the housing sector this is expected to mean a review and assessment of regulations, market demand of these homes and learnings from the centre. including an increase in energy efficiency requirements for new residential buildings to 6-Stars, or equivalent, in the 2010 update of the Building Code of Australia. This is to be VicUrban has also demonstrated its commitment to sustainable heritage by working with implemented by May 2011. Equiset to refurbish the northern half of the historic Railway Goods Shed in Docklands, in a manner which retains key aspects of its past while incorporating a range of ecologically sustainable design initiatives. The refurbishment recently became the first heritage-listed building in Victoria to achieve a 5-Star Green Star rating for Office Design and one of only a handful in Australia. VicUrban Annual Report 20 08/09
Goal 2: Leverage Goal 3: Impact Leveraging VicUrban’s investments and skills to Developing a diverse portfolio of urban renewal and magnify the benefits delivered to industry and urban growth projects across metropolitan Melbourne the community. and provincial Victoria.
In the current economic climate, with tighter conditions in accessing construction finance, Significant progress was made during the year in securing a pipeline of new development achieving some of the 2008/09 leverage targets became challenging. sites. The 2008/09 target to secure land sufficient to accommodate more than 1000 future metropolitan dwellings was exceeded by the agreement between the Docklands was particularly impacted and VicUrban’s 2008/09 target of $1.3 billion new Commonwealth and State Governments for VicUrban to develop the 128 hectare development value under construction was not achieved. At the same time, commercial former Department of Defence site at Maribyrnong. The aim will be to create a liveable confidence in Docklands remains strong, with large scale built commercial space now neighbourhood with a strong focus on mixed-use development, incorporating a variety fully committed. Significant construction activity continues on a number of commercial of housing choices, employment opportunities and community facilities. VicUrban also buildings, as well as the National Ice Sports Centre, Kangan Batman TAFE’s expansion acquired a 108 hectare parcel of land at Cragieburn. and plans for residential developments in Victoria Harbour and NewQuay. In keeping with its role to facilitate delivery of Melbourne @ 5 Million, VicUrban has Significant progress continues in the revitalisation of central Dandenong. Construction has worked with government and conducted workshops with other key stakeholders towards commenced on the Lonsdale Street transformation works and George Street Bridge, due preparation of a Development Strategy for the Werribee Employment Precinct (WEP). for completion in mid to late 2010. The design of City Street, which will reshape the area Situated 25 kilometres west of Melbourne, the WEP could provide a new civic, cultural between the station and Lonsdale Street, has commenced and the creation of a public and commercial heart for one of Australia’s fastest growing urban areas. By bringing jobs plaza is scheduled to commence in 2011. The bid process for the State Government closer to where people live, WEP can help reduce the pressure on Melbourne’s transport Services Building is drawing to a close and construction is scheduled to commence in system. We are also creating a new model for employment-based medium density early 2010. centres that are great places to live and work at Aurora and Officer. Difficult economic conditions meant that VicUrban did not meet its General Fund leverage VicUrban has also been working with government on strategies to realise the development target in 2008/09. Achieving the General Fund development value target was dependent potential of key sites within the Footscray Central Activity District. upon a number of special site sales, some of which were adversely impacted by the economic downturn and developer liquidity issues. A number of special sites at Lancaster VicUrban did not meet its target of securing a new provincial site in 2008/09. Exploration Gate, The Boardwalk, Metro Village 3175 and Meridian did not settle this financial year. continues in regional and peri-urban locations. A number of sites are under active investigation and VicUrban is well positioned to play a targeted role in addressing unmet VicUrban continued to create opportunities for private sector residential builders to gain housing needs, having developed strong partnership arrangements with regional councils from working with VicUrban. This promotes the development of economic activity and and affordable housing agencies. The acquisition of new sites will further enable VicUrban skills in the building industry. Opportunities for smaller to medium sized builders to work to deliver on the objectives of Melbourne @ 5 Million. with VicUrban alongside larger volume builders accelerated during the year at Meridian, Cardinia Rd and Valley Lake. VicUrban Annual Report 08/09 21
Goal 4: Environment Delivering communities that meet environmental challenges.
VicUrban continued to perform well against this goal. After several years of leading the way with pioneering Water Sensitive Urban Design initiatives at Lynbrook, Docklands and Aurora, this year we introduced recycled water to the Aurora community for use on parks and private gardens. The move is expected to reduce potable water consumption within Aurora by up to one third, compared with the average Melbourne household. At the planned Officer project, VicUrban has set targets to reduce the carbon footprint and use of potable water. The project will deliver an integrated mixed-use development that demonstrates how substantial carbon footprint reductions can be achieved by the planned integration of housing, jobs and transport. In addition, the Maribyrnong project offers VicUrban the opportunity to demonstrate how urban redevelopment can reduce demand on our resources through precinct-scale environmental initiatives. With market acceptance of 6-Star energy designed homes increasing, VicUrban has also identified the opportunity to extend its environmentally designed developments into the day-to-day activities of the communities that give them life. VicUrban understands that the environmental infrastructure of the built form cannot deliver optimum environmental outcomes alone. Our Green Lifestyles program is a model for the education needed to engage and help homebuyers adopt a more sustainable way of living beyond the sale of their home. The pilot of Green Lifestyles has been introduced at Aurora and Meridian, with tailored programs that respond to the different stages of the customer’s home-buying journey. VicUrban is closely monitoring and evaluating the program to demonstrate the impact which empowering people with knowledge has on environmental outcomes.
Aurora, Epping North VicUrban Annual Report 22 08/09
Goal 5: Affordable Living Goal 6: Organisational Capability Delivering housing solutions that improve the Developing organisational skills and culture affordability of home ownership and rental living. to deliver strategic objectives.
VicUrban’s approach to affordable living is built on the premise that housing should be well VicUrban continues to deliver a broad program of capability and culture initiatives as part located to quality jobs, services and transport, and designed to ensure high environmental of the innovation agenda and to enable it to respond to new opportunities. A significant performance. The availability of low priced land is also an important component, with amount of work has been undertaken to strengthen VicUrban’s workforce planning 44% of VicUrban’s residential lots sold during the year in the lowest price quartile. arrangements. An assessment of the business capability needs of the organisation Equally important is to ensure a diverse mix of product and housing tenure. has been undertaken which helped to inform a recent management restructure. VicUrban is now well positioned to respond to the challenges and opportunities facing VicUrban’s Tenterfield development continued to deliver on the provision of affordably the organisation. priced land. The project achieved an average lot price of $125,000 throughout its five year development, with 84% of the approximate 1000 lot sales falling within the lowest price quartile of the local market. Moving forward, the development of higher density mixed-use employment precincts in urban growth areas is a key strategy for VicUrban, promoting highly liveable, sustainable and affordable lifestyles. A preliminary framework for these employment precincts has been developed and will be applied to the Aurora and Officer masterplans. The Federal Government’s National Rental Affordability Scheme (NRAS) is an important element in VicUrban’s plan to significantly increase its affordable rental activity. VicUrban has secured 100 NRAS subsidies for its Avondale Heights project, which is an important urban renewal development only 10 kilometres from Melbourne’s CBD. Subject to the performance of this pilot, and approval from the Treasurer and Minister, VicUrban intends to submit future proposals for further NRAS projects. In response to the Federal Government’s Nation Building Economic Stimulus Package, a process is underway to define VicUrban’s role in the delivery of Victoria’s overall target of 5,000 new social housing dwellings. The dwellings must be completed before June 2012 and will be administered through the State Government’s Office of Housing. This process includes identifying lots across Victoria that can be delivered within these timescales. An initial registration of interest has been submitted and further joint submissions with Government partners are being considered. Docklands’ first affordable rental scheme moved a step closer this year with The Merchant nearing completion. It will provide a selection of affordable rental options for the city’s key workers. Discussions continue with a number of developers in Docklands to introduce further affordable housing initiatives. 23
f sinancial ummary
For the financial year ending 30 June 2009, VicUrban produced The total equity of VicUrban as at 30 June 2009 of $295.0 million a net loss from ordinary activities after income tax equivalent to remains healthy and has not been significantly impacted by the $8.7 million. The operating results are down on recent years. global economic climate, with no asset write downs required This is primarily due to the commercial property sector having during the year. been impacted by the economic climate: commercial property The net cash outflow from operating activities for the year developers have experienced particular difficulty in obtaining ending 30 June 2009 was $93.9 million as inventory holdings finance for construction and acquisition of land. were increased during the year from both land purchases and development work.
Year ended 30 June 2009 2008 2007 2006 2005 $’000 $’000 $’000 $’000 $’000
Operating results Revenue 160,055 251,496 212,799 203,789 171,472
Cost of land sales (81,669) (131,394) (113,220) (106,020) (87,785) Operating expenses (75,311) (83,205) (65,668) (55,927) (45,328) Borrowing costs (11,529) (11,385) (15,153) (14,062) (14,221) Income tax equivalent (287) (2,354) (1,858) (8,157) (5,975) (168,796) (228,338) (195,899) (184,166) (153,309)
Profit from ordinary activities after income tax equivalent (8,741) 23,158 16,900 19,623 18,163 Financial Status Total assets 625,349 623,772 552,351 546,880 571,209 Total liabilities (330,336) (316,687) (295,823) (307,195) (340,648) Total equity 295,013 307,085 256,528 239,685 230,561
Net cash from operating activities (93,889) 78,362 47,005 10,941 (1,629) 24
Meridian Maribyrnong site y ri ear in ev ew / est d ablishe areas
2008/09 saw VicUrban make progress on delivering developments in Melbourne’s Metro Village 3175 established areas. Securing Maribyrnong, selling out key stages at Metro Village 3175 and delivering the innovative Meridian development were all highlights. Docklands continued to perform, despite the economic downturn. 25
Valley Lake, Keilor East 26
This project is an outstanding example of how CommonwealthTemporum unt in pore nobiti dolest am, necerume and State Governments could work together to addressvellaci ducillo rporest iaturiti cus et ut volorio community issues. By facilitating this sale, we are addressingstemollam, omnihillam nonsere volore odiatur. critical urban issues around housing supply, employment and the environment including the provision of open space.’
The Hon Lindsay Tanner, Minister for Finance and Deregulation 9 April 2009
Maribyrnong site VicUrban Annual Report 08/09 27
Maribyrnong Securing the Maribyrnong development was a highlight of VicUrban’s year. It followed several years of extensive liaison with the Federal and State Governments on the future of Maribyrnong and VicUrban was delighted when in April 2009 it was announced the Federal Government would sell the site to VicUrban after it is appropriately remediated. Federal Ministers Lindsay Tanner and Tanya Plibersek, together with Premier John Brumby, announced a Federal/State partnership to build a new suburb in Melbourne’s west on the 128 hectare former Department of Defence site. Work has commenced on developing the stakeholder consultation and communications plan for the development. The Maribyrnong Project is a major urban renewal initiative Heritage buildings at the Maribyrnong Defence site. Maribyrnong project launch, 9 April 2009. for the western region of Melbourne. The project will demonstrate an integrated approach to affordable living, delivered through a range of affordable housing options in close proximity to employment opportunities and community facilities. It will make a substantial contribution to further the development of a thriving economy and community in the west and provides VicUrban with an ideal opportunity to demonstrate its role in urban renewal. Community consultation and planning for the development of the site will occur over the next three years, while remediation is being undertaken by the Commonwealth Department of Defence.
Maribyrnong Artists’ Impression. 28
Rev italising Central Dandenong (RCD) VicUrban has this year commenced delivering visible changes and improvements in central Dandenong, under the State Government’s $290 million Revitalising Central Dandenong initiative. These improvements reflect commitments made in the Revitalising Central Dandenong Shared Vision and Urban Master Plan, which were produced following consultation with more than 6000 members of the community and key stakeholders. The initiative is forecast to generate more than $1 billion of private investment in Dandenong. 29
G rENDA Headquarters
Cheltenham Rd
George St Bridge Artists’ Impression
Metro Village 3175
Dandenong Station
Lonsdale Street Artists’ Impression
Der cla ed area VicUrban Annual Report 30 08/09
Time invested with the community over recent years to develop a Shared Vision and Master Plan for the Revitalising Central Dandenong project came to fruition during the year, with significant developments on the ground.
Artists’ Impression - Lonsdale Street, Dandenong
The Revitalising Central Dandenong (RCD) initiative Work began on a new gateway into Central Dandenong. These preliminary works are paving the way for the major completed its first major construction projects in 2008 The new George Street Bridge will provide residents Lonsdale Street civil works, scheduled to be completed in with the launch of a new state-of-the-art facility for Grenda and visitors with better access into and out of central 2010 and to include: Corporation and the realignment of Cheltenham Road. Dandenong. This key component of the RCD initiative has been funded by the State Government and is expected Laying attractive granite paving on The projects were vital to progressing the revitalisation to open by late 2010. The project extends George Street footpaths and service lanes; process, making way for the construction of a new bridge to Cheltenham Road via the new bridge which will span Planting 265 established Pin Oak trees; into the city centre with access from nearby EastLink. the railway line and Foster Street. The bridge also links This will better connect the Dandenong CBD with the Installing prominent and brighter street lighting; Dandenong’s main shopping precinct with Metro Village Melbourne CBD and the greater south-east region, making 3175, a residential development delivered by VicUrban in a Re-developing existing and creating additional it an important and accessible centre for both metropolitan partnering arrangment with the City of Greater Dandenong, pedestrian crossings; and regional Victorians. located south of the railway line. Installing more efficient water infrastructure Grenda, an iconic Dandenong family transport business, Preliminary works commenced on the transformation of beneath the surface; and moved into a new building and a new era. Opened by Dandenong’s Lonsdale Street into one of Melbourne’s Minister Madden in October, the $15 million purpose-built Resurfacing Lonsdale Street’s carriageways. great boulevards. The multi-million dollar transformation of complex is designed for business growth and to minimise Lonsdale Street will create a pedestrian-friendly boulevard its impact on the environment, incorporating self-sufficient that is a more attractive and accessible place to shop, eat water use and smarter energy consumption in its design. and socialise. VicUrban is in regular contact with Lonsdale The Cheltenham Road realignment was an $8 million Street traders to ensure central Dandenong’s main street investment to significantly upgrade the gateway into remains an active and efficient shopping and business hub Dandenong for the future. It is designed to accommodate during the transformation works. the community’s future growth, whilst also incorporating water sensitive urban design initiatives to support the local landscape. 31 Artists’ Impression, Lonsdale Street, Dandenong
The transformation of Lonsdale Street will create a pedestrian-friendly boulevard that is a more attractive and accessible place to shop, eat and socialise. VicUrban Annual Report 32 08/09
Valley Lake, Keilor East Meridian, Dandenong South Metro Village 3175, Dandenong
Other developments in established areas The highly innovative Meridian development was one of Metro Village 3175 achieved a complete sell out of its VicUrban has secured National Rental Affordability a number of VicUrban projects to benefit from the first Stage 4 release during June 2009, a total value of $3.5 Scheme funding for its Avondale Heights project, which homebuyers incentives and achieved outstanding sales million. A further 20 detached lots were also sold as part is an important urban consolidation development only success - 100% clearance rate in the three Stage 1 of Stage 5 in May. JG King was introduced as a new 10 kilometres from Melbourne’s CBD. It is anticipated releases. VicUrban’s latest sustainable neighbourhood is builder to the Dandenong area, while in July 2008 three the funding will assist in the delivery of a diverse range of planned to feature 6-Star energy designed housing, fibre industrial lots were sold in the adjacent LOGIS project for housing product, type and tenure, with the development optic telecommunications cabling to homes, productive/ a combined total of $1.21 million. edible landscapes, pedestrian-friendly streetscapes and to contain a mix of detached homes, townhouses and VicUrban’s Cheltenham Green development is an urban stormwater capture. These have all helped to secure apartments for both rental and private purchase. consolidation initiative that has attracted approximately the interest of buyers beyond attaining a new home. 150 residents to its twenty-five townhouses and 20 Valley Lake is a premium residential urban consolidation The first land release in May 2009 attracted a crowd apartments in the refurbished Retreat House building. project located 12 kilometres from Melbourne’s CBD of approximately 150, with all 27 lots sold, and prices In 2009 the project was recognised by the Urban that primarily caters for second and third home buyers. ranging from $157,000 to $182,000. The third release Development Institute of Australia for achievements in It was subjected to the same tough market conditions occurred before the end of financial year 2009, capturing Urban Renewal Excellence (Victoria). experienced by residential projects in 2008/09. None- the opportunity of the additional $7000 First Home Buyer the-less, the project recorded some impressive individual stimulus funding. sales results throughout the year, with a record auction price of $520,000 achieved for one of the Stage 3 Pinnacle VicUrban’s Sustainable Living Centre will construct lots. The Valley Lake vision continued to take shape five architect-designed 7-Star energy rated homes as with the recent completion of the public boardwalk and a demonstration and education centre at Meridian, running path. which is scheduled to open to the public in 2010. Each home includes sustainable, accessible and adaptable design features.
Cheltenham Green VicUrban Annual Report 08/09 33
Artists’ Impression - Meridian, Dandenong South 34
MELUN BO R E DOCKLANDS Development momentum saw sustained activity throughout the precinct, with a number of significant completions and commencements during the year. VicUrban Annual Report 08/09 35
Harbour Town Shopping Centre
Docklands has begun to achieve a The financial year began just after Victoria Harbour’s Merchant Street opened to the public, introducing critical mass as it enters the second essential local amenities such as a supermarket and post decade of its development. office in Docklands’ first local shopping strip. A new park, Victoria Green, also opened to the public. In January The development momentum of prior years carried 2009, Docklands’ first purpose-built piece of community through into 2009 with a number of corporate facilities infrastructure, The Harbour Family and Children’s Centre, being significantly progressed or completed including ANZ, introduced 150 childcare places as well as maternal health Myer, Fairfax, National Foods, AXA and 717 Bourke Street, and kindergarten services to the community. where BP Australia will move in 2010. Merchant Street’s local shopping strip was soon joined Economic conditions caused a slow down in new by Docklands’ first major retail offering with the opening developments and this had a negative impact on the of the Harbour Town Shopping Centre in Waterfront City financial performance for the year. in October. Construction began on super-store Costco, which opened in August 2009. A major highlight, and subsequent disappointment, was the opening of the Southern Star Observation Wheel in December, which closed in January 2009. Southern Star Management Group has announced that rectification works could take at least 12 months. Access to the northern precincts also improved with the opening of Pearl River Road, Waterfront Way and Little Docklands Drive, and the extension of the City Circle Tram down Docklands Drive, joining routes 86 and 48. VicUrban Annual Report 36 08/09
Lend Lease’s The Gauge building won the Other achievements at Docklands included Premier’s Sustainability Award and The community consultation over the Harbour Montage residential development was Esplanade concept plan, which aims completed. Kangan Batman Tafe began to transform Docklands’ main public construction of the second stage of its thoroughfare into a major waterfront development. Victoria Harbour was also gathering place for the community to enjoy, announced as one of two Australian projects as well as better connecting the Docklands to participate in the Clinton Climate Initiative precincts. The community infrastructure plan Climate Positive Development Program. advanced with the City of Melbourne, with the key priorities being pursued including The Merchant commenced construction sports and recreation facilities, a library and during the year, and will house Docklands’ community hub. first affordable housing initiative thanks to a collaboration between Lend Lease, Melbourne VicUrban released the Docklands Waterways Affordable Housing and VicUrban. VicUrban Strategic Plan with the City of Melbourne began negotiations with three different and Parks Victoria, which is designed to developers to introduce more affordable help create an integrated, active harbour housing projects at Docklands. accessible to Melbourne and all its visitors. In Digital Harbour the completion of We also consulted with Docklands developers Life.Lab’s strata-titled offices and SOHOs and the City of Melbourne to update the offered alternative commercial spaces for Docklands Public Art Policy. Completed in smaller or independent businesses. June 2009, the new policy provides a clear and consistent framework for guiding public art projects funded by Urban Art contributions from Docklands developments. Working with the Victorian Government Architect, VicUrban continues to challenge urban design norms with the aim of producing new design principles and priorities for Docklands. We are now preparing to work in collaboration with developers and City of Melbourne on refining a vision for the Second Decade of Docklands.
The Gauge Minister Madden at heritage Goods Shed, Docklands 37
Melbourne Docklands 38
y ri ear in ev ew / gr oWTh areas VicUrban’s projects in Melbourne’s growth areas continued to deliver on key liveability, affordability and sustainability intitiatives. Highlights included the delivery of recycled water at Aurora and international endorsement from the Clinton Climate Initiative’s Climate Positive Development program for our Officer Project. 39
Aurora, Epping North VicUrban Annual Report 40 08/09
VicUrban’s growth area developments saw significant achievements over the year.
Aurora Aurora has been VicUrban’s flagship for sustainable urban Artists’ Impression - Creeds Farm Village Living and Learning Centre development for four years. In addition to its 190 sales during the year, Class A recycled water was delivered to residents. The use of recycled water for garden The natural habitat at Aurora also benefited this year with maintenance and toilet flushing will help Aurora residents the implementation of an environmental protection and use up to one-third less of their drinking water compared management plan. Parts of the Aurora site are home with the average Melbourne home. to the nationally listed endangered species of Growling We also achieved improvements to the bus service to Grass Frog, however drought conditions have impacted provide a short-term solution to the Aurora development’s on the species’ existing natural environment. Together public transport challenge, while we continue to work with with leading environmental consultants, Biosis, VicUrban the Department of Transport on long-term public transport is introducing 16 new habitats for the frogs, which will be planning and delivery in the area. monitored and maintained. The first new habitat has been constructed and local community will be engaged in the Integral to the social and economic sustainability of the ongoing awareness of their local flora and fauna through Aurora community is the development’s first ‘village’ the Green Lifestyles program. centre – Creeds Farm Village. The Village has plans for a general store, primary school, early learning centre and a Living and Learning Centre. In the 2008/09 financial year Zoologist Daniel Gilmore checks for Growling Grass Frogs at Aurora construction commenced on the Living and Learning Centre, an independent facility for adult learning programs and community venue activities. It is anticipated that the Creeds Farm Village Living and Learning Centre will open in early 2010. 41
an aurora story Alan and Jill and their neighbours of 34 years, Philip and Annette, are moving to Aurora - to live next door to each other!
The two Epping couples recently bought their lots and it was an easy decision to make the move. ‘We’d been considering building a new home for a while but didn’t want to move out of the Epping area and, more importantly, away from our friends Philip and Annette,’ explained Alan.
Alan’s neighbour Phil said that when they had decided on the move they looked at other developments in the area but were immediately taken with the Aurora community: ‘You could tell this was something different; the focus on community and the environmental features had us all sold. We’re really excited about our new lives ahead.’
We asked the couples for the secret behind their enduring friendship. Annette explained that it’s about being there ‘Aurora is the first residential development in Australia to plan for when it matters: ‘We’re neighbours and friends. We don’t water and environmental saving initiatives on this scale, leading the live in each other’s pockets but we trust each other, and way for Victoria and the rest of the country in responsible planning that’s a blessing to have in a friendship and a neighbour.’ for urban growth.’ Work on the couples’ homes will begin later in the year and they should all be able to move into Aurora by the The Hon Justin Madden, Minister for Planning middle of next year. Launch of recycled water at Aurora, March 2009 VicUrban Annual Report 42 08/09
Officer Project VicUrban@Officer will deliver an integrated mixed-use development that addresses the challenges of climate change and liveability by bringing jobs, services and transport closer to where people live. When completed, the 340 hectare project is planned to deliver approximately 6000 jobs and a diverse range of homes for approximately 15,000 new residents. In May 2009 Officer was chosen as one of the 16 founding projects selected from around the world to participate in the Climate Positive Development Program. This program, a Clinton Climate Initiative, will demonstrate how large-scale urban cities can grow in ways that are climate positive. VicUrban’s participation in the program will enable us to both access and contribute to international expertise in how our cities can be made more resilient in the face of climate change. Already, VicUrban is applying this global expertise to assist with exploring the feasibility of new clean energy technologies for Officer. This involves exploring options for the potential local production of electricity, heating and cooling via the use of tri-generation, fuel cells, large scale solar, bio-gas or ground source heating and cooling. On the ground delivery of the Officer project is subject to finalisation of a Precinct Structure Plan, which is currently being progressed by Cardinia Shire Council, the Growth Areas Authority and VicUrban. It is anticipated that a draft Officer Precinct Structure Plan will be ready for public exhibition in late 2009. The VicUrban@Officer project is on track to commence on site development by mid 2010.
Cardinia Rd Complementary to VicUrban@Officer, we have commenced vc i urban@Officer delivery of the nearby Cardinia Road project, which introduces cardinia rd minimum 6-Star energy designed homes and provides access to VicUrban’s Fibre-to-the-Home infrastructure in the southeast growth corridor. Fifty-eight builder lots were released early in 2009, resulting in 51 sales. The wetlands precinct commenced construction in May and we completed the installation of some general development infrastructure and the construction of the sales office. 43
Artists’ Impression - Officer Town Centre VicUrban Annual Report 44 08/09
Riverwalk, Werribee Narre Warren North Good Friday Appeal
Riverwalk Other Projects At Cairnlea the Stage 52 ballot sold out in just 30 minutes. In June, VicUrban welcomed Wyndham City Council’s In April, Tenterfield achieved national recognition as an The last residential lot sold in April 2009 and the project decision to allow rezoning of the Riverwalk site, which was exemplary affordable development project in the Urban is now complete. The public’s support for this acclaimed submitted to the Minister for Planning for approval, thereby Development Institute of Australia National Awards development was highlighted when the 16th VicUrban paving the way for the project to proceed. for Excellence (Affordable Development). The plan for and Henley Good Friday Appeal Charity House and VicUrban’s Craigieburn project, to incorporate the themes Land Auction raised a record $670,000 for the Royal The 197 hectare Riverwalk project will be developed by of affordable living and liveable neighbourhood, will take Children’s Hospital. Charity auctions held over the past 16 VicUrban, partnering with Melbourne Water, in stages over forward lessons learned from Tenterfield. years have raised in excess of $7 million. the next 10 years. The first residents are anticipated to arrive in 2011. At Jacksons Hill, we released Stage 52A in February, Despite challenging times, we have achieved some good selling 14 lots on the first day. Jacksons Hill was selected market success in land releases, particularly at mature In a first for the area, Riverwalk is planned to offer a to participate in the 2008 Sustainable House Day in projects such as Cairnlea. The first homebuyer incentives diversity of minimum 6-Star energy designed homes, September 2008. A retail site in Stage 13 was also led to an improvement in sales results at Aurora, which along with schools, neighbourhood shops and green open announced. performed over budget in the second half of the financial spaces catering for Wyndham’s growing population. year. Difficult economic conditions adversely affected larger There was strong response to the first three stage releases Riverwalk’s combination of 6-Star energy designed homes, superlot transactions, such as Lancaster Gate and Point at Narre Warren North. The project aims to deliver 6-Star future delivery of Class A recycled water and proximity Cook, as these transactions were affected by difficulties energy designed homes, new parks, recreation areas and to Werribee River and township means this development experienced by purchasers in securing finance. a wetland featuring water sensitive urban design, in one will continue to offer sustainable living opportunities for of southeast Melbourne’s premium residential pockets. homebuyers. Further, an innovative stormwater recycling system is being delivered in partnership with South East Water and will provide recycled water for toilet flushing and garden use. The project launched in January 2009 and sold over 70% of the lots on the first day, via a ballot system. Sales completed by June exceeded yearly targets by 60%. 45
Jacksons Hill, Sunbury 46
y ri ear in ev ew / provincial areas VicUrban’s provincial projects continued to offer housing choice and diversity within their respective communities. 47
The tough economic and drought Tower Hill conditions affecting regional communities have impacted on the sales performance of VicUrban’s provincial projects, despite this, the year was not without its achievements.
VicUrban launched Stage 1 of the Lakes Edge, Hamilton project in February 2009. The development sits on the Lake Hamilton foreshore and is only two kilometres from Hamilton’s town centre. Civil construction has commenced and a handful of lots have been sold prior to people being able to view the lots on offer. Parkside Gardens VicUrban secured funding commitments from Southern Grampians Shire Council and the Victorian Office of In February we appointed a new sales agent, Rossignoli Housing for streetscape and open space improvement Real Estate, for Parkside and Parkside Gardens. Six works in the adjacent Office of Housing Lakeside estate Stage 1 terrace lots at Parkside Gardens were sold to which will provide improved amenity for nearby residents. the Complete Housing Group. We released Stage 2 of Tower Hill experienced great success at the Stage 5 Parkside in early 2009 and in April the adjacent North release in March with 36 lots up for sale. In all, 70% of Shepparton Community Hub project was launched. lots in Stage 5 were sold by May, with future stages fast- tracked to keep up with demand.
Lake Hamilton 48
Our l PEOp e VicUrban strives to develop a culture that encourages and supports employees to apply their professional knowledge and skills, to contribute their best efforts and to deliver government policy through innovative and commercial outcomes. VicUrban Annual Report 08/09 49
In July 2007, the Public Sector Attraction and Retention Standards Commissioner issued Guiding principles VicUrban has continued to attract and retain highly skilled Our daily actions are guided by our commitment to: property development and shared services professionals the Victorian Public Service Code with a strong commitment to VicUrban’s strategic of Conduct. This set the following Future Thinking direction, objectives, targets and business outcomes. employment principles: fair and We are interested in the big picture. We are not only Recognising the youthful demographic of the VicUrban concerned about profits for today but about the employee population, we have sought to attract high- reasonable treatment, merit in greater profits for the community in the future. We are performing and experienced property development employment, equal opportunity beyond transactions. Our work is about doing what is professionals to provide leadership, coaching and support hard to strike a better balance. We foster innovations in the workplace. employment and reasonable that change the standards of tomorrow. avenue of redress. Development Opportunities Inspiring Ideas VicUrban continues to offer a wide range of development As a public agency VicUrban Our work is about making a difference. We deliver opportunities through formal and on-the-job learning. adheres to the VPS Code and its innovative solutions to complex issues, creating We have provided planned and systematic experiences, a blueprint for Victoria. We thrive on change. deliberately targeted transfers, rotations or promotions, requirements are reflected in our By defining customer demand and sharing our and ensured that employees worked on real tasks and employment policies and practices. knowledge with the industry we change industry problems in projects, received feedback, coaching standards, creating a new set of standards for and mentoring, and reflections on required behaviour tomorrow. We aim to inspire the industry and and performance. consumers by delivering innovations. We made a wide range of external programs available Embracing Challenges to employees to enhance their knowledge, skills and qualifications and to contribute to community We embrace challenges with the principle of ‘anything development activities. is possible’. We are not about micro developments; rather we focus on the macro blueprint for Victoria. VicUrban again offered two employee scholarships to Innovation is an integral part of everything we do. recognise, reward and build on employee contribution We foster thinking out-of-the-box to deliver inspiring to sustainable urban development in Victoria. The Tabart solutions to challenging developments. Scholarship winners each received up to three weeks’ paid scholarship leave to complete the research/study project Collaboration and shared funds to cover travel, accommodation and We believe in achievement through teamwork, other expenses. through synergies. We work respectfully together to get things done. Our work is all about relationships. Strategic Management Group Partnerships. To our employees, it’s about teamwork. Our Chief Executive Officer invited senior VicUrban To the industry, we strive to be the partner of choice. employees to form the Strategic Management Group as To the government, we are partners in delivering part of management and leadership development. The policy. group met approximately every two months in a workshop format to facilitate two-way communication between the Board, Executive and the organisation and to provide strategic input into key business issues. VicUrban Annual Report 50 08/09
Employee Collective Employment Agreement Occupational Health and Safety VicUrban called for an Employee Working Group to settle a VicUrban is committed to the prevention of injury and ill health Collective Agreement. The Group was representative in respect in the conduct of its activities. A focus on the safety and health to organisation, jobs, levels, gender and age, and extensive of employees, contractors and the public underpins all our communication was provided to employees throughout the activities. process. The Agreement provided consistent terms and conditions of employment. Employees voted in support of Performance the Agreement which passed the Workplace Authority’s ‘No Our health and safety performance remained at best practice Disadvantage Test’ and came into operation on 3 August 2009. levels in 2008/09 with no lost time injuries recorded. A participative and collaborative work environment has ensured Cultural Diversity that proactive hazard identification and risk control activities have VicUrban is committed to meeting the needs of culturally been implemented for potential safety issues before they could and linguistically diverse communities, women, youth and lead to injuries or ill health. indigenous groups. We achieve this by delivering a range of projects that respond to diverse housing and community needs Best Practice Enhancements in metropolitan and provincial Victoria; by facilitating broad We commissioned a comprehensive review of our OHS community engagement in the planning and development management activities during the year. The review aimed at of our communities and by fostering diversity in our assessing the status of activities recommended in the previous employment practices. year’s review and provided a valuable source of information to help us set our future safety management direction. It was pleasing to see that 22 of the 25 recommended actions from the previous year’s review had been implemented and completed during the current year. The three recommended actions that were still in progress have been rolled over into our 2009/10 OHS plan, along with a further 10 recommendations arising from the current year review.
Contractor Management A large proportion of VicUrban’s business involves the engagement of contractor and superintendent organisations. During the year we focused on improving the quality of relationships between contractors, superintendents and VicUrban to ensure the participation of all parties in efforts to improve safety on construction sites. Discussions of safety performance at site construction meetings and regular site safety walks by all parties have ensured that open, collaborative dialogue and engagement on safety issues has become a regular component of our construction program. 51
Health and Wellbeing Wokoc r f r e data VicUrban employees have confidential access to an Fixed term & Total employee assistance program that provides counselling O ngoing Employees Casual Employees and coaching services, and helps them to examine their Full time Part time Employees FTE FTE FTE personal and work-related needs from both an individual (Headcount) (Headcount) (Headcount) and organisational perspective. June 2009 204 16 220 212 15 227 Once again we supported the participation of VicUrban June 2008 188 18 206 200 13 213 employees in the Global Corporate Challenge, Walk to Work Day and Ride to Work Day. These corporate health June 2009 June 2008 and wellbeing initiatives encourage employees to increase fitness, promote teamwork and foster an active, healthy Fixed term & Fixed term & Ongoing Casual Employees Ongoing Casual Employees and more productive work environment. The provision of additional bike storage and shower facilities in our new Employees FTE FTE Employees FTE FTE (Headcount) (Headcount) building, expected to be completed in November 2009, will further encourage employees to ride or walk to and Gender from work in the interests of their health and wellbeing as Male 98 98 9 92 92 6 well as the environment. Female 122 114 6 114 108 7 Total 220 212 15 206 200 13 ‘VicUrban Uni’
VicUrban Uni was held in October 2008, exploring the Age topic ‘Towards a new urban paradigm’. An integrated Under 25 5 5 6 7 7 4 approach to green and affordable living was workshopped 25-34 78 75 3 81 78 6 and leading international and Australian sustainable 35-44 81 78 5 72 71 2 development specialists were invited to share their 45-54 42 40 1 thoughts and knowledge on the future of urban 36 34 1 development. 55-64 14 14 0 10 10 0 Over 64 0 0 0 0 0 0 VicUrban Uni challenges us to ‘be our best’ and ‘commit Total 220 212 15 206 200 13 to excellence’ by:
promoting open dialogue and knowledge sharing; Notes All figures reflect active employees in the last full pay period of June each year. driving innovation through constructive critique and review; and Ongoing employees means people engaged on an open ended contract of employment and executives engaged on a standard executive contract who were active in the last full pay period of June. engaging international and local best practice. FTE means full time equivalent. Excluded are those on leave without pay or absent on secondment, external contractors/consultants, temporary staff employed by employment agencies and a small number of people who are not employees, but appointees to a statutory office as defined in the Public Administration Act 2004 (e.g. persons appointed to a non executive board member role). VicUrban Annual Report 52 08/09 CO MpliaNCE
VicUrban achieved an exemplary Audit Under the Financial Management Act 1994, the Auditor Subsequent Events outcome for its exceptional risk General has audited the annual financial statements. rating from its insurers, VMIA. VicUrban also has an internal auditor who regularly Since 30 June 2009 there have been no events that had a conducts internal audit engagements and makes significant effect on the operations of VicUrban. recommendations to the Finance, Audit and Risk Committee. Summary of significant changes in financial position during the year ended 30 June 2009 Risk Management For the year ended 30 June 2009, VicUrban recorded a VicUrban has developed a corporate culture of net loss from ordinary activities after tax (before significant delivering business objectives while ensuring appropriate items) of $8.74 million (profit of $23.16 million in 2008). management of risk. The VicUrban Board acknowledges The State Government of Victoria has contributed $5.54 the importance of managing the spectrum of risks for million ($30.39 million in 2008) of capital for the Revitalising both specific projects and enterprise-wide activities. Central Dandenong project during the year. VicUrban’s Risk Management Policy sets out guiding principles, processes, and reporting requirements for risk A dividend of $8.87 million ($2.99 million in 2008) was paid management. The Board regularly reviews risk issues. during the year. VicUrban is committed to instilling a risk management focus at all levels of the organisation. Building Act All new buildings, and works to existing buildings, carried Attestation out for or on behalf of VicUrban, must conform with the I, Anthony Darvall, certify that VicUrban has risk Building Act 1993. VicUrban did not exempt any work from management processes in place consistent with the the application of the ten year liability cap. Australian/New Zealand Risk Management Standard and an internal control system is in place that enables the executive to understand, manage and satisfactorily control risk exposures. The Finance, Audit and Risk Committee verifies this assurance and that the risk profile of VicUrban has been critically reviewed within the last 12 months.
Mr A Darvall, Chairperson Melbourne, 13 August 2009 VicUrban Annual Report 08/09 53
Victorian Industry Participation Policy (VIPP) Freedom of Information (FOI) National Competition Policy During this financial year, VicUrban commenced seven The Freedom of Information Act 1982 (FOI Act) allows the VicUrban carries out its functions on a commercial basis. contracts to which the VIPP applies. Five are in the public a right of access to documents held by VicUrban. National Competition Policy requires VicUrban to act within metropolitan area, totalling $19,274,582; two are regional, For the year ended 30 June 2009, VicUrban received four a competitively neutral framework. This means that, except totalling $3,483,738. requests for information under the FOI Act. Three requests in respect of the Melbourne Docklands and Revitalisation were from Members of Parliament and one was from a of Central Dandenong projects, VicUrban: In each case, 100% of the value of the contract is journalist. committed to local content. Operated in a competitive environment in an open The designated principal officer for the purpose of the FOI These contracts ensure the commitment of 26 full-time market; Act is the Chief Executive Officer. jobs, with the following benefits to the Victorian economy Enjoyed no preferential access to government land in terms of skills increase and technology transfer: Other authorised employees to consider FOI requests are purchase or services, other than access to some Introduction of environmentally sensitive subdivision General Counsel, Legal Counsel and General Manager, surplus government land at market valuation, under development. Government. the scheme administered by the Government Land Monitor; Introduction of higher construction standards in respect Access to Documents to water and sewer reticulation in regional areas. Operated under the provisions of the Financial People wishing to access VicUrban documents under the Management Act 1994, rather than the Corporations During this period, VicUrban completed one contract FOI act should write to: Act; totalling $1,748,889. This was a regional project. Freedom of Information Officer Was subject to Victorian State and Federal regulations In all cases 100% of the works value was committed VicUrban applying to private sector organisations; to local content and 86 full-time equivalent jobs were GPO Box 2428V Was subject to Victorian State and Federal taxes achieved as a result of the projects. Melbourne VIC 3001 including compliance with the National Tax Equivalents Each application must clearly identify the documents Regime; and sought and be accompanied by a $23.40 application fee. Was subject to all equivalent Local Government rates and charges. Where the government decides that a fully commercial approach is not appropriate for a specific project, special provisions exist. The Victorian Urban Development Authority Act 2003 provides for the Governor in Council, on the recommendation of the Minister, to declare an urban development, or proposed urban development, to be a ‘declared project’. Once established as such VicUrban can then exercise particular powers to facilitate the development of the ‘declared project’. On 26 September 2005, the government gazetted the Revitalising Central Dandenong project as a ‘declared project’. VicUrban Annual Report 54 08/09
Financial Reporting Direction 22B and approval processes and have been satisfactorily VicUrban recognises that it is crucial to maintain VicUrban retains information listed in Financial Reporting implemented by VicUrban. The matter has now been confidentiality to ensure reprisals are not made against a Direction 22B and, to the extent applicable and subject to concluded by Ombudsman Victoria. whistleblower, and will take all reasonable steps to protect the operation of the Freedom of Information Act 1982, this his or her identity. Procedures is available upon request. VicUrban is committed to the aims and objectives of the VicUrban ensures that all files and materials related to a disclosure are kept securely, and access is strictly limited Whistleblowers Protection Act 2001 Whistleblowers Protection Act 2001 (the Act). It does not tolerate improper conduct by its employees, officers or to persons involved in responding to the disclosure. Disclosures members, or the taking of reprisals against those who The Act requires that any person who receives information Pursuant to section 104 of the Whistleblowers Protection come forward to disclose such conduct. due to the handling or investigation of a Protected Act 2001 (the Act), the following is reported for the period VicUrban recognises the value of transparency and Disclosure (as defined by the Act) is not to disclose that 1 July 2008 to 30 June 2009: accountability in its administrative and management information, except in limited circumstances. Disclosure of practices, and supports the making of disclosures that such information will constitute a breach of section 22 of Number and types of disclosures made to VicUrban: the Act and is an offence that is punishable by a maximum zero reveal corrupt conduct; conduct involving a substantial mismanagement of public resources; or conduct involving fine of 60 penalty units or six months imprisonment, Number of disclosures referred by VicUrban to the a substantial risk to public health and safety, or the or both. Ombudsman for determination as to whether they are environment. public interest disclosures: zero Probity and Ethical Standards VicUrban has procedures for reporting disclosures of Number and types of disclosed matters referred to VicUrban seeks to maintain the highest standard of ‘Improper Conduct’ or ‘Detrimental Action’ by VicUrban VicUrban by the Ombudsman: zero corporate governance practices and ethical conduct by or its employees. Disclosures of such conduct should all Board members and staff. It has developed detailed Number and types of disclosed matters referred by be made to the Chairperson, CEO, General Counsel of governance policies and probity processes, covering, VicUrban to the Ombudsman to investigate: zero VicUrban or the Ombudsman. ‘Improper Conduct’ means in particular, the bidding processes, confidentiality and Number and types of investigations of disclosed conduct that is corrupt; a substantial mismanagement of conflict of interest principles. Board members are required matters taken over by the Ombudsman from VicUrban: public resources; or conduct involving substantial risk to to act in the interests of VicUrban. They cannot place zero public health or safety, or to the environment that would, themselves in a position of conflict, where a personal if proved, constitute a criminal offence or reasonable interest or duty conflicts with their duty to VicUrban. Any Number of requests made under section 74 of the Act grounds for terminating the employment of the person pecuniary interest, or interest that could conflict with a to the Ombudsman to investigate disclosed matters: engaging in such conduct. Director’s performance, must be reported to the Board. zero ‘Detrimental Action’ is action taken against a person Number and types of disclosed matters that VicUrban in reprisal for a disclosure being made under the Act. has declined to investigate: zero ‘Detrimental Action’ includes: Number and types of disclosed matters that were Action causing injury, loss or damage; substantiated on investigation and the action taken on completion of the investigation: zero Intimidation or harassment; and Any recommendations of the Ombudsman under the Discrimination, disadvantage or adverse treatment Act that related to VicUrban: Pursuant to a disclosure in relation to a person’s employment, career, made in the 2007/08 period, two recommendations profession, trade or business, including the taking of were made in relation to conflicts of interest procedures disciplinary action. VicUrban Annual Report 08/09 55
Consultancies
The aggregate cost of consultancies during the 12 months ended 30 June 2009 was as follows:
C lcoNSu tan ies Number Costing a) > $100,000 5 1,291,845 b) < $100,000 8 354,459
Set out below are details of those consultancies for non-development works costing more than $100,000 for the 12 month period ending 30 June 2009.
Bligh Voller Nield Pty Ltd 416,242 Architecture and interior design services for adaptable heritage reuse and sustainable fitout
Aurecon Australia Pty Ltd 243,845 Engineering services for heritage building compliance with sustainability targets
Basso Project Management Pty Ltd 154,050 Project management services for heritage building reuse
PricewaterhouseCoopers Ltd 371,789 GST claim advice
Red Rock Consulting Pty Ltd 105,919 Implementation of electronic procurement system VicUrban Annual Report 56 08/09 Cpae or or t INTENT
VicUrban, as a participant in the VicUrban’s Purpose Contract with the private sector market, acts to raise the standard VicUrban is the Victorian Government’s sustainable Contracting with the private sector to deliver policy urban land development agency committed to delivering outcomes and open up opportunities. of sustainable urban living. sustainable, prosperous and successful communities in metropolitan and provincial Victoria. Advise Policy Vicurban translate Government policy into practice to Offer learnings arising from business activities deliver desired outcomes. VicUrban’s aim is to deliver a and market participation that can inform policy liveable city that is compact, sustainable and affordable. development. VicUrban’s key interdependent roles are: VicUrban’s business approach is founded on a commitment to sustainability, which embraces: Intervene into the market Community wellbeing Being active where the market cannot or will not Developing sustainable communities that have access participate. to services, jobs and learning, are pleasant place to live, Demonstrate and deliver policy aims and targets without work and visit, and foster active local citizenship. regulation Environment To deliver desired outcomes in line with Government Protecting and managing natural systems, habitat and targets, to create customer demand and provoke the biodiversity, and the efficient use and management of market into similar activity. finite resources. Demonstrate in advance of regulation Urban design excellence Demonstrating Government policy as a precursor Creating a sense of place with an urban landscape. to policy and regulation. Affordable living Deliver Government Incentives Providing access to quality affordable housing that Adopting and facilitating Government incentive is close to services, transport, employment and schemes in order to expedite and encourage take-up. community facilities. Deliver to finance outcomes Economic viability The commercial platform of VicUrban’s business Delivering packages that generate local employment enables it to invest in urban intervention, delivery and opportunities, have access to surrounding labour demonstration projects. markets and are affordable to live in. VicUrban Annual Report 08/09 57
Business Objectives Overview of Operations (nature and scope) Regulatory Environment - Provisions Under the Act To meet government objectives and achieve the vision VicUrban operates in both metropolitan and Provincial The Victorian Government established the broad function within a competitive commercial environment, VicUrban Victoria to develop land on a varying scale, from small and responsibilities of VicUrban through the Victorian has four key objectives for the corporate planning period scale residential projects, such as Avondale heights Urban Development Authority Act 2003 (The Act). 2009-14: and Heathmont, to large scale mixed use and industrial The Act states VicUrban was established to: developments such as the Melbourne Docklands and 1. Deliver precinct wide urban renewal in key locations Dandenong LOGIS. Carry out urban development alone or in partnership; across Melbourne VicUrban’s primary functions are to: Develop the Docklands area in accordance with the VicUrban will be the Government’s principal urban Docklands Act 1991; renewal planning and delivery agency, creating precinct Undertake urban renewal developments wide urban renewal solutions in strategic locations Undertake declared projects; and VicUrban has a specific mandate to undertake major consistent with Melbourne @ 5 million. urban renewal projects, particularly where there Assist in the implementation of Government urban development policies and strategies including 2. Deliver urban consolidation across Melbourne has been a market failure or site or bureaucratic impediments. Medium density infill and renewal projects Melbourne 2030. VicUrban will be the principal agency delivering urban are also consistent with the Melbourne 2030 and Key functions set out in the Act include: consolidation projects on behalf of Government on Melbourne @ 5 million policy; strategic sites across Melbourne. To purchase, consolidate, take on, transfer or otherwise Establish differentiated developments across outer Melbourne acquire land in metropolitan and provincial areas for 3. Demonstrate and facilitate differentiated developments, development for urban purposes; stimulating excellence across the outer areas of Melbourne VicUrban delivers developments across outer Melbourne to deliver the consolidations of the urban To promote best practice in urban and community Through demonstrations and partnerships with the fringe, demonstrate innovations in sustainable design and sustainable development having regard private sector, VicUrban will be the catalyst for creating development, deliver Government policy and to to links to transport services and innovations in new paradigms in employment, affordability, density, exercise a price-moderating influence on the market; sustainable development; environment and community in the development of outer Melbourne. Develop the Melbourne Docklands To develop land in Victoria for residential and other urban purposes to provide a competitive market; and 4. Deliver projects that strategically respond to key unmet VicUrban has been entrusted with delivering the To contribute to improvements in housing affordability. housing Melbourne Docklands, transforming 170 ha of disused and development needs in Provincial Victoria industrial land into a world class entertainment, The Act requires VicUrban to carry out its functions on a residential and office precinct; and commercial basis. VicUrban will partner with the State Government, local councils and affordable housing agencies to meet Contribute to developments in provincial Victoria targeted housing and development needs in Provincial VicUrban undertakes projects, often in conjunction with Victoria. Local Government and the private sector, to broaden The business targets for these objectives are the range of available residential opportunities and commercially sensitive. contribute to the implementation of Government’s Provincial Statement ‘Moving Forward’. VicUrban Annual Report 58 08/09
Corporate and Social Responsibility Income Tax Corporate Status VicUrban is committed to the principles of corporate social VicUrban is exempt from income tax in accordance The ultimate controlling entity of VicUrban is the responsibility. This is reflected in our core philosophy and with section 50-25 of the Income Tax Assessment Act State Government of Victoria. approach which includes: 1997. VicUrban is subject to the National Tax Equivalent (NTE) regime pursuant to section 88 of the State Owned Statutory Authority Being a good corporate citizen; Enterprises Act 1992. Any activity relating to the Docklands Victorian Urban Development Authority - trading as Integrating social and environmental objectives into area is exempt from the NTE Regime in accordance ‘VicUrban’ business operations; with section 67 of the Victorian Urban Development Authority Act 2003. The RCD project has been granted Having a longer time horizon in decision making, taking Incorporation Act an exemption from the NTE regime by the Treasurer, into account the future as well as the present; Victorian Urban Development Authority Act 2003 effective 1 July 2007. Income tax equivalent expense in Taking responsibility for action, mitigating adverse the Operating Statement is matched with the accounting Incorporated environmental or social impacts at every stage, both profit after allowing for permanent differences. The future within and outside the Authority; tax benefit relating to tax losses is not carried forward as 01 August 2003 Registered Address Upholding the spirit as well as the letter of the law; an asset unless the benefit is virtually certain of realisation. Income tax equivalent on cumulative timing differences is Level 12, 700 Collins Street Continuous improvement in all aspects of operations, set aside to the deferred tax liability or deferred tax asset DOCKLANDS 3008 including employee relations, training, working accounts at the rates which are expected to apply when ABN environment, quality of outputs and performance those timing differences reverse. 61 868 774 623 reporting; and Relating positively to, and often working in conjunction Capital Structure and Dividends with, other developers, suppliers, customers, the VicUrban has a strong balance sheet with net assets in community and other government agencies. excess of $295.0 million. Accounting Policy The payment of dividends occurs only after a formal The Financial Report is a general purpose financial report, determination is made by the Treasurer of the State of which is prepared on an accruals basis in accordance with Victoria following consultation between VicUrban’s Board, the Financial Management Act 1994. the Minister and the Treasurer. VicUrban Annual Report 08/09 91
With the exception of the VicUrban Financial Statements and Additional Reporting Requirements, the information contained in this document is based on material and information collated by VicUrban, its employees and consultants and from publicly available information. Any interested party (including developers and their advisers) must make its own independent assessment and investigations and should not rely on the significance, adequacy or accuracy of this information. This information does not purport to contain all the information a party may require. VicUrban, its employees and consultants shall have no liability to any person under law of contract, tort, the principles of restitution or unjust enrichment or otherwise any loss, expense or damage which may arise from or be incurred or suffered as a result of anything contained in this document or otherwise arising in any way from the purchase of land from VicUrban or building or development within any VicUrban project. © State of Victoria, VicUrban, 2009. This publication is copyright. No part may be reproduced by any process except in accordance with the provisions of the Copyright Act 1968. VicUrban Annual Report 92 08/09
Level 12, 700 Collins Street Docklands 3008 VIC Australia GPO Box 2428 Melbourne 3001 VIC Australia Telephone 03 8317 3400 59 FINANCIAL STATEMENTS VicUrban Annual Report 60 08/09
Operating Notes 30 June 2009 30 June 2008 Statement $’000 $’000 For the financial year ended 30 June 2009 Land sales 4 103,507 192,805 Cost of land sales (81,669) (131,394) Gross profit from land sales 21,838 61,411
Other revenue 4 56,548 58,691 Total other revenue from ordinary activities 56,548 58,691
Expenses from ordinary activities Project expenses (49,614) (58,213) Corporate expenses (14,176) (14,641) Marketing & selling expenses (11,521) (10,351) Borrowing cost expenses 5 (11,529) (11,385) Total expenses from ordinary activities (86,840) (94,590) Profit from ordinary activities before income tax equivalent expense (8,454) 25,512 Income tax equivalent expense 6 (287) (2,354)
Profit from ordinary activities after income tax equivalent expense (8,741) 23,158 The above Operating Statement should be read in conjunction with the accompanying notes. VicUrban Annual Report 08/09 61
Balance Notes 30 June 2009 30 June 2008 $’000 $’000 Sheet As at 30 June 2009 Current assets Cash assets and cash equivalents 7 18,494 120,080 Receivables 8 29,303 20,076 Prepayments 72 153 Inventories 9 556,323 461,759 Total current assets 604,192 602,068
Non-current assets Receivables 8 8,213 8,965 Infrastructure, property, plant & equipment 10 11,633 11,244 Deferred tax assets 6 1,311 1,495 Total non-current assets 21,157 21,704 Total assets 625,349 623,772
Current liabilities Payables 11 58,559 50,497 Land sale deposits 3,152 25,687 Interest bearing liabilities 12 17,089 10,584 Provisions 13 67,381 51,997 Current tax liabilities 6 (431) 1,465 Total current liabilities 145,750 140,230
Non-current liabilities Payables 11 - 1,761 Land sale deposits 55,587 37,525 Interest bearing liabilities 12 126,540 134,453 Provisions 13 1,184 762 Deferred tax liabilities 6 1,275 1,956 Total non-current liabilities 184,586 176,457 Total liabilities 330,336 316,687 Net assets 295,013 307,085
Equity Contributed equity 14 281,899 276,364 Accumulated surplus / (loss) 14 13,114 30,721 Total equity 295,013 307,085 The above Balance Sheet should be read in conjunction with the accompanying notes. VicUrban Annual Report 62 08/09
Statement Notes 30 June 2009 30 June 2008 of Changes $’000 $’000 Total equity at the beginning of the financial year 14 307,085 256,528 in Equity Profit from ordinary activities after income tax equivalent expense (8,741) 23,158 As at 30 June 2009 Dividends paid 15 (8,866) (2,986) Contributed capital received from the State Government of Victoria 14 5,535 30,385 Total equity at the end of the financial year 295,013 307,085 The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Notes 30 June 2009 30 June 2008 Cash Flow $’000 $’000 Cash flows from operating activities: Statement Receipts from customers 129,804 247,568 Ror the financial year Operating grants received from the State Government of Victoria 39,050 50,210 ended 30 June 2009 Goods and Services Tax recovered from the ATO 13,143 11,564 Interest received 5,215 4,489 Payments to contractors, consultants, suppliers and employees (184,735) (153,804) Land purchases (68,799) (47,317) Goods and Services Tax paid to the ATO (13,358) (20,165) Borrowing costs (11,529) (11,385) Income tax equivalent paid (2,680) (2,798) Net cash inflow/(outflow) from operating activities 23 (93,889) 78,362
Cash flows from investing activities: Payments for infrastructure, property, plant & equipment (3,144) (1,001) Proceeds from sale of infrastructure, property, plant & equipment 18 (29) Net cash inflow/(outflow) from investing activities (3,126) (1,030)
Cash flows from financing activities: Contributed capital received from the State Government of Victoria 5,535 30,385 Dividends paid (8,866) (2,986) Proceeds from borrowings 65,200 5,750 Repayment of borrowings (66,440) (18,450) Net cash inflow/(outflow) from financing activities (4,571) 14,699
Net increase/(decrease) in cash and cash equivalents (101,586) 92,031 Cash and equivalents at the beginning of the financial year 120,080 28,049 Cash and cash equivalents at the end of the financial year 7 18,494 120,080 Financing arrangements 16 The above Cash Flow Statement should be read in conjunction with the accompanying notes. VicUrban Annual Report 08/09 63
1. Statement of significant accounting policies to be expensed as cost of land sales on sale. The associated funding from the Department of Planning and Community Development is (a) Basis of accounting notes to the recorded as revenue or capital contribution respectively. The financial report is a general purpose financial report which has financial been prepared on an accruals basis in accordance with the Financial (e) Income tax Management Act 1994, Australian Accounting Standards, other VicUrban is exempt from income tax in accordance with section 50-25 authoritative pronouncements of the Australian Accounting Standards of the Income Tax Assessment Act 1997. VicUrban is subject to the statements Board, and Urgent Issues Group Interpretations. Accounting Standards National Tax Equivalent Regime pursuant to section 88 of the State include Australian equivalents to International Financial Reporting Owned Enterprises Act 1992. Any activity relating to the Docklands Standards (‘A-IFRS’). Area or the Revitalisation of Central Dandenong Project is exempt from The financial report is authorised for issue by Mr Sam Sangster the National Tax Equivalent Regime in accordance with section 67 of (Chief Operating Officer) on 13 August 2009. the Victorian Urban Development Authority Act 2003. Income tax equivalent expense in the operating statement is matched (b) Segment reporting with the accounting profit after allowing for permanent differences. A business segment is a group of assets and operations engaged in The future tax benefit relating to tax losses is not carried forward as providing products or services that are subject to risks and returns an asset unless the benefit is virtually certain of realisation. Income tax that are different to those of other business segments. equivalent on cumulative timing differences is set aside to the deferred (c) Revenue recognition income tax or future income tax benefit accounts at the rates which are Amounts disclosed as revenue are net of returns, allowances, duties expected to apply when those timing differences reverse. and taxes. Revenue is recognised for the major business activities as (f) Goods and services tax follows: Revenues, expenses and assets are recognised net of the amount of (i) Land sales revenue associated GST, unless the GST incurred is not recoverable from the Land sales revenue is recognised when the risks and rewards of taxation authority. In this case it is recognised as part of the cost of ownership no longer lie with VicUrban. This most often occurs on acquisition of the asset or as part of the expense. settlement of the land sales contract. Receivables and payables are stated inclusive of the amount of GST Amounts received under the terms of the development agreements, receivable or payable. The net amount of GST recoverable from, or prior to the risks and rewards of ownership transferring from payable to, the taxation authority is included with other receivables or VicUrban, are recorded as land sale deposits in the Balance Sheet. payables in the Balance Sheet. (ii) Project management fees and profit share Cash flows from operating activities are included in the Cash Flow Statement on a gross basis. Project management fees and profit share from development agreements are brought to account when the land is settled. (g) Cash & cash equivalents (iii) Rental revenue Cash and cash equivalents comprise cash on hand and cash held at call with financial institutions. Deposits at call are carried at the principal Rental income is recognised on an accruals basis. amount. (iv) Government grants and appropriations (h) Receivables State Government grants are recognised as revenue in the same (i) Accounts receivable under contract of sale year in which VicUrban incurs the associated expense or gains control over the underlying assets. These amounts represent deposits received from private land purchasers which are held in trust until settlement. (v) Interest income (ii) Provision for doubtful debts Interest income is recognised on a time proportionate basis that takes into account the effective yield on the financial asset. Collectability of amounts outstanding are reviewed on an ongoing basis. A provision is raised when there is objective evidence that (d) Revitalising Central Dandenong land purchases VicUrban will not be able to collect all amounts due. The Revitalising Central Dandenong Project purchases land for (iii) Amounts owing under development agreements both commercial and large scale infrastructure and public realm works. Land purchased for community development is expensed at the Amounts receivable under development agreements are carried at time of purchase, as this land will not be subject to future sale. Land nominal amounts due. purchased for commercial development is recognised as inventory VicUrban Annual Report 64 08/09
(i) Inventories Inventories of undeveloped land, work in progress and developed land Asset Class 2009 2008 and buildings held for resale are valued at the lower of cost or net realisable value. Cost includes: Infrastructure (roads, promenades, footpaths, drains, 3 to 100 years 3 to 100 years street furniture and fixtures) (i) the cost of acquiring the land and buildings; and Buildings 4 to 40 years 4 to 40 years (ii) land improvement costs. Plant, equipment and motor vehicles Net realisable value is determined from valuations provided by a panel of independent valuers. In determining the net realisable value for Plant and equipment 2 to 10 years 2 to 10 years undeveloped land, the expected net cash flows from the development Motor vehicles 2 to 3 years 2 to 3 years and sale of land on a staged and single lot basis are discounted to Leasehold improvements 8 years 8 years their present values using a market-determined, risk adjusted rate. Valuations are regularly undertaken to determine the net realisable value Public art assets are not depreciated as they are assumed to have an unlimited useful life. of undeveloped land.
(j) Acquisition of assets (l) Intangible assets (o) Payables The purchase method of accounting is used for all acquisitions of Intangible assets represent identifiable non-monetary assets without (i) Trade creditors and accruals assets. Cost is measured as the fair value of the assets given up or physical substance. Intangible assets are recognised at cost. Costs liabilities undertaken at the date of the acquisition. These amounts represent liabilities for goods and services incurred subsequent to initial acquisition are capitalised when it is provided to VicUrban prior to the end of the financial year which Where settlement of any part of the cash consideration is deferred, the expected that additional future economic benefits will flow to VicUrban. remain unpaid. The amounts are unsecured and are usually paid amounts payable in the future are discounted to their present value at the (i) Capitalised software development costs within 30 days of recognition. date of acquisition. The discount rate used is the incremental borrowing rate, being the rate at which similar borrowings could be obtained from Capitalised software development costs have a finite useful (ii) Payables under development agreements an independent financier under comparable terms and conditions. life and are carried at cost less accumulated amortisation and These amounts relate to amounts payable to developers and impairment losses. Amortisation is calculated using the straight- others under development agreements on the achievement of (k) Infrastructure, property, plant and equipment line method to allocate the cost of software development costs agreed milestones. (i) Cost and valuation over their estimated useful lives of 5 years. (p) Amounts owing to land vendors Subsequent to initial recognition as assets, non-current physical (m) Impairment of assets Amounts owing to land vendors are carried at their net present value assets, other than plant, equipment and motor vehicles are Assets are reviewed annually for impairment or whenever events or measured at fair value. Plant, equipment and motor vehicles are changes in circumstances indicate that the carrying amount may not (q) Land sale deposits measured at cost. be recoverable. An impairment loss is recognised for the amount by For precinct land sales, these amounts represent non-interest bearing Where assets are stated at their fair value, assessments are which the asset’s carrying amount exceeds its recoverable amount. deposits received for land sales and associated trunk infrastructure made with sufficient regularity to ensure that the carrying amount The recoverable amount is the higher of the asset’s fair value less costs from developers in accordance with their relevant precinct development does not differ materially from its fair value at the reporting date. to sell and value in use. agreements. Upon the associated stage release of part or all of Annual assessments are made, supplemented by independent a precinct these amounts are subsequently recognised as revenue. (n) Fair value estimation assessments at least every three years. The fair values and net fair values of financial assets and financial For residential land sales, these amounts represent interest bearing (ii) Recoverable amount of non-current assets liabilities are determined as follows: deposits and are recognised as revenue once the land is settled. The recoverable amount of an asset is the net amount expected - the fair value of financial assets and financial liabilities with (r) Interest bearing liabilities to be recovered through the cash inflows and outflows arising standard terms and conditions and traded on active liquid Amounts owing to the Treasury Corporation of Victoria are carried at from the assets continued use and subsequent disposal. markets are determined with reference to quoted market prices; their principal amounts. Where the carrying amount of a non-current asset is greater and (s) Borrowing costs than its recoverable amount, the asset is written down to its - the fair value of other financial assets and financial liabilities are recoverable amount. Where net cash flows are derived from Borrowing costs are recognised as expenses in the period in which determined in accordance with generally accepted pricing models they are incurred. Borrowing costs include interest on bank overdrafts, a group of assets working together, recoverable amount is based on discounted cash flow analysis. determined on the basis of the relevant group of assets. The short-term and long-term borrowings and finance lease charges. Transaction costs are included in the determination of net fair value. decrement in the carrying amount is recognised as an expense in (t) Provision for development costs the reporting period in which the write-down occurs. A provision for development costs has been set aside where VicUrban (iii) Depreciation and amortisation has a present obligation to carry out development works under relevant All items excluding land and public art, are depreciated or amortised planning permits or development agreements. These development costs on a straight line basis over their useful economic lives. may relate to stage allotments sold or to the overall costs of the project. VicUrban Annual Report 08/09 65
(u) Employee benefits the pattern of benefits derived from the leased assets. cash flow interest-rate risk. Borrowings issued at fixed rates expose the (i) Annual leave (ii) Finance leases business to fair value interest-rate risk. A provision for annual leave, measured at the amounts expected VicUrban has finance leases relating to some motor vehicles. 3. Segment information to be paid when the liabilities are settled, is included within the A lease asset and liability are established at the present value of (a) Accounting policies provision for employee benefits as a current liability and measured minimum lease payments. Lease payments are allocated between at its nominal value. the principal of the lease liability and the interest expense. Segment information is prepared in conformity with VicUrban’s accounting policies as disclosed in Note 1 and accounting standard (ii) Long service leave (LSL) (w) Leasehold improvements AASB 114 Segment Reporting. Current liability - unconditional LSL is disclosed as a current The cost of improvements to or on leasehold property is amortised Segment revenues, expenses, assets and liabilities are those that liability even where the department does not expect to settle the over the unexpired period of the lease or the estimated useful life of are directly attributable to a segment and the relevant portion that liability within 12 months because it will not have the unconditional the improvements, whichever is shorter. can be allocated to the segment on a reasonable basis. Segment right to defer the settlement of the entitlement should an assets include all assets used by a segment and consist primarily employee take leave within 12 months. (x) Dividends An obligation to pay a dividend only arises after a formal determination of receivables, inventories, and infrastructure assets, net of related The components of this current LSL liability are measured at: is made by the Treasurer of the State of Victoria following consultation provisions. Segment liabilities consist primarily of amounts owing under - present value - component that VicUrban does not expect between VicUrban’s Board, the Minister and the Treasurer. development agreements, certain trade accruals and payables. to settle within 12 months; and - nominal value - component that VicUrban expects to settle (y) Rounding (b) Description of segments within 12 months. Amounts in the financial report have been rounded to the nearest Business segments Non-current liability - conditional LSL is disclosed as a non-current thousand dollars. VicUrban’s primary business segments are Urban Communities and Provincial Development, Docklands Development and Urban liability. There is an unconditional right to defer the settlement of 2. Financial risk management the entitlement until the employee has completed the requisite Revitalisation: years of service. This non-current LSL liability is measured at The principal risks associated with VicUrban’s treasury function are (i) Urban Communities and Provincial Development present value. interest rate, liquidity (including refinancing), credit and operational. VicUrban seeks to minimise its exposure to the financial markets in its Urban Communities and Provincial Development encompasses (iii) Superannuation treasury activities. land development focused on the creation of sustainable, high VicUrban contributes towards various private and public sector quality living environments and diverse, cohesive communities. VicUrban’s debt and treasury management policies set the treasury Urban Communities and Provincial Development have major complying superannuation schemes on behalf of its employees policy framework and outline the approach to be taken in respect of in accordance with the contracts of employment and the projects in all major growth corridors of Melbourne and in Victorian treasury risk management in relation to interest rate risks, liquidity risks, regional centres. superannuation guarantee legislation. credit risks and treasury operational risks. (iv) Employee performance incentives (ii) Docklands Development (a) Credit risk Provision has also been made for performance incentive bonuses. Docklands Development encompasses the management of the VicUrban’s maximum credit risk exposure is indicated by the carrying Melbourne Docklands project including; attracting investment Amounts included as current provisions are expected to be paid amounts of its financial assets. This does not take into account the within the next twelve months. and executing development agreements; managing development value of security held in the event other parties fail to perform their agreements; and delivery and facilitation of planning and (v) Employee benefit on-costs obligations under contracts of sale. infrastructure. All on-costs, including payroll tax, workers compensation VicUrban does not have any significant concentrations of credit risks (iii) Urban Revitalisation premiums and insurance premiums, are included in the as it undertakes transactions with a large number of customers in the determination of the provision for employee benefits. residential property industry. Urban Revitalisation focuses on the development of vibrant community centres which expand the opportunities for education, (v) Leases (b) Liquidity risk employment, housing and improved access to public transport. A distinction is made between finance leases which effectively Prudent liquidity risk management implies maintaining sufficient cash Urban Revitalisation collaborates with government agencies and transfer from the lessor to the lessee substantially all the risks and and the availability of funding through an adequate amount of committed local councils to attract private sector investment and create well benefits incidental to ownership of the assets and operating leases credit facilities. Due to the nature of the underlying business, the treasury planned and sustainable developments. VicUrban is the lead under which the lessor effectively retains substantially all such risks function aims to maintain flexibility in funding by keeping committed agency for the Revitalisation of Central Dandenong project. and benefits. credit lines available from the Treasury Corporation of Victoria (TCV). VicUrban operates in one geographical segment - Victoria, Australia. (i) Operating leases (c) Cash flow and fair value interest rate risk VicUrban has operating leases relating to the premises it The businesses income and operating cash inflows are not materially occupies, motor vehicles and some computer equipment. exposed to changes in market interest rates. Operating lease payments are charged to the Operating The businesses interest rate risk arises from borrowings facilities with Statement in the period in which they are incurred so as to match the TCV. Borrowings issued at variable rates expose the business to VicUrban Annual Report 66 08/09
notes to the 3. Segment information Continued Urban Docklands Urban Consolidated Communities Development Revitalisation financial (c) Primary reporting - business segments & Provincial Development statements 2009 2009 2009 2009 $’000 $’000 $’000 $’000
Revenue Revenue from external sales 100,004 12,243 42,643 154,890 Interest income 2,129 2,054 982 5,165 Total revenue from external parties 102,133 14,297 43,625 160,055
Results Profit from ordinary activities before income tax equivalent expense 3,159 (15,494) 3,881 (8,454) Income tax equivalent expense (977) - 690 (287) Profit from ordinary activities after related income tax equivalent expense 2,182 (15,494) 4,571 (8,741)
Assets Development and other assets 369,871 124,061 120,882 614,814 Infrastructure, property, plant and equipment 3,226 1,908 400 5,534 Segment assets 373,097 125,969 121,282 620,348 Unallocated assets 6,760 Elimination of inter-segment transactions (1,759) Total assets 625,349
Liabilities Segment liabilities 147,036 154,185 24,114 325,335 Unallocated liabilities 6,760 Elimination of inter-segment transactions (1,759) Total liabilities 330,336
Acquisitions of infrastructure, property, plant and equipment Segment acquisitions 304 - 26 330 Unallocated acquisitions 2,814 Total acquisitions 3,144
Depreciation/amortisation expense Segment depreciation 1,716 431 531 2,678 Total depreciation/amortisation expense 2,678
Cashflow Receipts from customers 107,600 16,517 5,687 129,804 Operating grants received from the State Government of Victoria 1,273 - 37,777 39,050 Contributed capital received from the State Government of Victoria - - 5,535 5,535 Land purchases 53,163 - 15,636 68,799 Borrowing costs 4,005 7,309 215 11,529 VicUrban Annual Report 08/09 67
Urban Docklands Urban Consolidated notes to the Communities Development Revitalisation & Provincial financial Development 2008 2008 2008 2008 statements $’000 $’000 $’000 $’000
Revenue Revenue from external sales 145,560 50,046 51,352 246,958 Interest income 2,163 1,469 906 4,538 Total revenue from external parties 147,723 51,515 52,258 251,496
Results Profit from ordinary activities before income tax equivalent expense 10,891 10,864 3,757 25,512 Income tax equivalent expense (3,349) - 995 (2,354) Profit from ordinary activities after income tax equivalent expense 7,542 10,864 4,752 23,158
Assets Development and other assets 347,420 174,431 92,759 614,610 Infrastructure, property, plant and equipment 3,446 1,973 391 5,810 Segment assets 350,866 176,404 93,150 620,420 Unallocated assets 5,895 Elimination of inter-segment transactions (2,543) Total assets 623,772
Liabilities Segment liabilities 104,946 189,127 19,262 313,335 Unallocated liabilities 5,895 Elimination of inter-segment transactions (2,543) Total liabilities 316,687
Acquisitions of infrastructure, property, plant and equipment Segment acquisitions 304 - 26 330 Unallocated acquisitions 671 Total acquisitions 1,001
Depreciation/amortisation expense Segment depreciation 1,766 423 444 2,633 Total depreciation/amortisation expense 2,633
Cashflow Receipts from customers 161,053 78,636 7,879 247,568 Operating grants received from the State Government of Victoria 970 - 49,240 50,210 Contributed capital received from the State Government of Victoria - - 30,385 30,385 Land purchases 7,590 - 39,727 47,317 Borrowing costs 2,888 8,343 154 11,385 VicUrban Annual Report 68 08/09 notes to the 4. Revenue from ordinary activities 30 June 2009 30 June 2008 financial $’000 $’000 statements Revenue Land sales 103,507 192,805
Project management fees and profit share 15,399 7,519 Property rental and other revenue 3,623 2,836 Operating grants from the State Government of Victoria 32,361 43,798 Interest income revenue 5,165 4,538 Total revenue from ordinary activities 160,055 251,496
5. Expenses from ordinary activities 30 June 2009 30 June 2008 $’000 $’000
Expenses from ordinary activities Profit from ordinary activities before related income tax equivalent expense is arrived at after charging the following specific items: Project expenses Development expenses 39,514 32,636 Revitalising Central Dandenong land purchases expensed 10,100 26,122 Total project expenses 49,614 58,213
Depreciation Plant, equipment, motor vehicles and leasehold improvements 1,785 1,858 Buildings 893 775 Total depreciation 2,678 2,633
Other charges against assets Bad and doubtful debts - trade debtors 9 - Total other charges against assets 9 -
Borrowing costs Interest and finance charges paid/payable 9,538 9,146 Financial accommodation levy 1,991 2,239 Borrowing costs expensed 11,529 11,385
Salaries and wages 24,344 22,055 Contributions to superannuation funds on behalf of employees 2,856 2,481 Net loss/(gain) arising from revaluation of long service liability 135 1 Net loss/(gain) on disposal of infrastructure, property, plant and equipment 59 29 Rental expense relating to operating leases 1,393 1,307 VicUrban Annual Report 08/09 69
notes to the 6. Income Tax 30 June 2009 30 June 2008 $’000 $’000 financial (a) Income tax equivalent expense statements The major components of income tax equivalent expense are: Income Statement Current income tax Current income tax charge 273 2,287 Adjustments in respect of current income tax from previous years 14 67 Deferred income tax Relating to origination and reversal of temporary differences - - Income tax equivalent expense reported in the operating statement 287 2,354
(b) Amounts charged or credited directly to equity No deferred income tax related items were charged directly to equity.
(c) Numerical reconciliation between aggregate tax expense recognised in the operating statement and tax expense calculated per the statutory income tax rate
Accounting profit from continuing activities before income tax equivalent expense (8,454) 25,512 Accounting profit from ordinary activities subject to income tax equivalent expense 860 7,575
Prima facie income tax calculated at 30% 258 2,273 Adjustments in respect of current income tax from previous years 14 67 Sundry items 15 14 Aggregate income tax equivalent expense 287 2,354
Current Deferred Current Deferred income tax income tax income tax income tax (d) Recognised deferred tax assets and liabilities 30 June 2009 30 June 2009 30 June 2008 30 June 2008 $’000 $’000 $’000 $’000
Opening balance (1,465) (461) (671) (1,699) Charged to income (785) 497 (3,591) 1,238 Charged to equity - - - - Other payments 2,681 - 2,797 - Acquisitions / Disposals - - - - Closing balance 431 36 (1,465) (461)
Tax equivalent expense in operating statement - 287 - 2,354 Amounts recognised in the balance sheet: - - - - Current tax liabilities 431 - (1,465) - Deferred tax asset - 1,311 - 1,495 Deferred tax liabilities - (1,275) - (1,956) 431 36 (1,465) (461) VicUrban Annual Report 70 08/09 notes to the 6. Income Tax Continued Balance sheet financial 30 June 2009 30 June 2008 statements $’000 $’000 Deferred income tax at 30 June relates to:
(i) Deferred tax liabilities Inventory 1,160 1,899 Other 115 57 Gross deferred tax liabilities 1,275 1,956
Set-off deferred tax liabilities - - Net deferred tax liabilities 1,275 1,956
(ii) Deferred tax assets Interest payable - 15 Provisions: Annual leave 224 232 Long service leave 265 238 Other 822 1,010 Gross deferred tax assets 1,311 1,495
Set-off deferred tax assets - - Net deferred tax assets 1,311 1,495
(e) Unrecognised temporary differences At 30 June 2009, there are no unrecognised temporary differences (2008: Nil).
7. Cash and cash equivalents 30 June 2009 30 June 2008 $’000 $’000
Cash assets
Cash at bank and on hand 1,017 2,305 Short term deposits 17,477 117,775 18,494 120,080 VicUrban Annual Report 08/09 71
notes to the 8. Receivables 30 June 2009 30 June 2008 $’000 $’000 financial
Current statements Amounts receivable under contracts of sale 2,015 1,339 Trade receivables 10,834 4,012 12,849 5,351 Provision for doubtful debts (9) - 12,840 5,351
Amounts receivable under development agreements 3,015 9,723 Receivable for reimbursement of Docklands Municipal and Place Management operating deficit 1,000 1,000 Other receivables 12,448 4,002 29,303 20,076
Non-current Amounts receivable under development agreements 1,335 1,591 Receivable for reimbursement of Docklands Municipal and Place Management operating deficit 6,878 7,374 8,213 8,965
9. Inventories 30 June 2009 30 June 2008 $’000 $’000
Current Undeveloped land 168,135 129,408 Work in progress 189,152 154,641 Developed land 199,036 177,710 556,323 461,759 VicUrban Annual Report 72 08/09 notes to the 10. Infrastructure, property, plant and equipment 30 June 2009 30 June 2008 financial $’000 $’000 Land statements At fair value - -
Buildings At fair value 7,298 6,783 Accumulated depreciation (2,785) (1,900) Total buildings 4,513 4,883
Public art At fair value 545 545 Total public art 545 545
Plant, equipment and vehicles At cost 8,650 11,266 Accumulated depreciation (5,219) (7,168) Total plant, equipment and vehicles 3,431 4,098
Leasehold improvements At cost 4,712 2,921 Accumulated depreciation (1,568) (1,203 Total leasehold improvements 3,144 1,718 Total infrastructure, property, plant & equipment 11,633 11,244 VicUrban Annual Report 08/09 73
notes to the 10. Infrastructure, property, plant Plant, and equipment Continued Equipment Leasehold financial Land Buildings Public Art & Vehicles Improvements Total $’000 $’000 $’000 $’000 $’000 $’000 statements
30 June 2009 Carrying amount at the start of the financial year - 4,883 545 4,098 1,718 11,244 Additions - 523 - 830 1,791 3,144 Disposals - - - (77) - (77) Reclassified as inventory ------Depreciation/amortisation expense - (893) - (1,420) (365) (2,678) Asset impairment ------Carrying amount at the end of the financial year - 4,513 545 3,431 3,144 11,633
30 June 2008 Carrying amount at the start of the financial year 72 5,634 545 4,795 2,068 13,114 Additions - 187 - 800 14 1,001 Disposals - (163) - (43) - (206) Reclassified as inventory (72) - - 40 - (32) Depreciation/amortisation expense - (775) - (1,494) (364) (2,633) Asset impairment ------Carrying amount at the end of the financial year - 4,883 545 4,098 1,718 11,244 VicUrban Annual Report 74 08/09 notes to the 11. Payables 30 June 2009 30 June 2008 financial $’000 $’000 statements Current Trade and other creditors 11,760 19,619 Accrued expenses 10,135 7,818 Deferred Income 34,903 21,299 Amounts owing to land vendors (secured) 1,761 1,761 58,559 50,497 Non-current Amounts owing to land vendors (secured) - 1,761 - 1,761
12. Interest bearing liabilities 30 June 2009 30 June 2008 $’000 $’000
Current Unsecured Loans from Treasury Corporation of Victoria Docklands 8,800 5,400 Other 8,200 5,000 Secured Lease liabilities 89 184 17,089 10,584 Non-current Unsecured Loans from Treasury Corporation of Victoria Docklands 63,640 97,380 Other 62,900 37,000 Secured Lease liabilities - 73 126,540 134,453
Total interest bearing liabilities 143,629 145,037
(a) Fair value disclosures Details of the fair value of interest bearing liabilities for VicUrban are set out in Note 17. VicUrban Annual Report 08/09 75
notes to the 13. Provisions 30 June 2009 30 June 2008 $’000 $’000 financial
Current statements Property and development related costs 64,698 49,614 Employee benefits 2,683 2,383 67,381 51,997 Non-current Property and development related costs 503 468 Employee benefits 681 294 1,184 762
(i) Property and development related costs Movements in the property and development related cost provisions during the financial year are set out below:
Current Carrying amount at the start of the year 49,614 42,680 Additional provisions recognised 15,084 6,934 Carrying amount at the end of the year 64,698 49,614
Non-current Carrying amount at the start of the year 468 435 Additional provisions recognised 35 33 Carrying amount at the end of the year 503 468
(ii) Employee benefits
Current All annual leave and long service leave benefits for employees with greater than 7 years of service Are expected to be utilised within 12 months after the end of the reporting period 2,322 1,769 Are expected to be utilised more than 12 months after the end of the reporting period 361 614
Non-current Conditional long service leave entitlements 681 294 VicUrban Annual Report 76 08/09 notes to the 14. Equity 30 June 2009 30 June 2008 financial $’000 $’000 statements (a) Contributed capital Capital contribution balance at the start of the year (i) 276,364 245,979 Capital contributions during the financial year (ii) 5,535 30,385 281,899 276,364
(i) The Victorian Urban Development Authority Act 2003 was proclaimed on 1 August 2003, creating the Victorian Urban Development Authority, trading as VicUrban. VicUrban represents the merger of the Urban and Regional Land Corporation and the Docklands Authority. In accordance with sections 81 and 85 of the Victorian Urban Development Authority Act 2003, the Urban and Regional Land Corporation and the Docklands Authority were abolished and all rights, assets, liabilities and obligations of the Urban and Regional Land Corporation and the Docklands Authority immediately before their abolition were vested in VicUrban on 1 August 2003. In accordance with section 65 of the Victorian Urban Development Authority Act 2003, the contributed capital of VicUrban on 1 August 2003 ($378.3 million) was equal to the sum of the assets and liabilities vested in VicUrban under sections 81 and 85 of the Victorian Urban Development Authority Act 2003. UIG Abstract 40 required the vested assets and liabilities that determine the contributed equity of VicUrban to be recorded at their fair value. (ii) The State Government of Victoria contributed $5.5 million ($30.4m in the previous year) of capital relating to the Revitalisation of Central Dandenong project.
(b) Accumulated surplus / (losses) Movements in accumulated surplus were as follows: Opening Balance 30,721 10,549 Net profit for the financial year from ordinary activities after income tax equivalent expense (8,741) 23,158 Dividends paid (8,866) (2,986) Closing balance 13,114 30,721
15. Dividends provided for or paid
Paid
Dividend from the General Fund paid on 19 December 2008 for the 2007-08 financial year, in accordance with a determination from the Treasurer of the State of Victoria dated 18 December 3,394 2008 after consultation with the Board of VicUrban. Dividend from the Revitalising Central Dandenong project paid on 19 December 2008 for the 2007-08 financial year, in accordance with a determination from the Treasurer of the State of 5,472 Victoria dated 18 December 2008 after consultation with the Board of VicUrban. Dividend from the Revitalising Central Dandenong project paid on 31 October 2007 for the 2005-06 and 2006-07 financial years, in accordance with a determination from the Treasurer of 2,986 the State of Victoria dated 30 October 2007 after consultation with the Board of VicUrban.
8,866 2,986
Provision for dividends An obligation to pay a dividend only arises after a formal determination is made by the Treasurer of the State of Victoria following consultation between VicUrban’s Board, the Minister and the Treasurer. VicUrban Annual Report 08/09 77
notes to the 16. Financing arrangements Facility limit Drawn down Undrawn facility $’000 $’000 $’000 financial VicUrban has access to the following finance facilities: statements Loan facility - 30 June 2009 Treasury Corporation of Victoria Docklands 160,000 72,440 87,560 Other 110,000 71,100 38,900 270,000 143,540 126,460 Loan facility - 30 June 2008 Treasury Corporation of Victoria Docklands 170,000 102,780 67,220 Other 110,000 42,000 68,000 280,000 144,780 135,220
30 June 2009 30 June 2008 $’000 $’000
Finance leases Commitments in relation to motor vehicle finance leases are payable as follows:
Within one year 90 196 Later than one year but no later than five years - 74 Minimum lease payments 90 270 Future finance charges (1) (13) Recognised as a liability 89 257
Representing lease liabilities: Current (Note 12) 89 184 Non-current (Note 12) - 73 Recognised as a liability 89 257 VicUrban Annual Report 78 08/09
17. Financial Instruments (a) Terms, conditions and accounting policies notes to the VicUrban’s accounting policies, including terms and conditions of each class of financial asset and financial liability are as follows: Recognised financial Balance Accounting policies Terms and conditions financial instruments sheet notes statements (i) Financial Assets Cash and cash equivalents 7 Cash and cash equivalents are carried at the Deposits are short term deposits principal amount.Interest is recognised as income on an accruals basis. Receivables - trade 8 Trade receivables under contract of sale are carried Sales contracts are on settlement terms, at nominal amounts. generally ranging from 30 days to twelve months.
Receivables - amounts 8 Amounts receivable under development Terms and conditions are set out in the owing under development agreements are carried at nominal amounts due. development agreements, however normal agreements Interest (when charged) is taken up as income on commercial terms and conditions generally an accrual basis. apply. (ii) Financial Liabilities Payables 11 Liabilities are recognised for amounts to be paid Trade liabilities are normally settled on terms in the future for goods and services received. ranging from 15 to 30 days.
Amounts owing to land 11 Amounts owing to land vendors are carried at Terms and conditions are set out in exchanged vendors their principal amount. Interest (when charged) is agreements with various vendors, however capitalised to inventory. normal commercial terms and conditions apply.
Land sale deposits These amounts represent non-interest bearing For private sales, revenue is recognised on deposits received for land sales and associated settlement. For builder sales, revenue is trunk infrastructure from developers in accordance recognised once the stage is registered and with their relevant precinct development land access is granted. agreements, and upon the stage release of part or all of a precinct these amounts are subsequently recognised as revenue.
Interest bearing liabilities 12 Amounts owing to the Treasury Corporation of Terms and conditions are set out in an Victoria are carried at their principal amount. exchanged agreement, however commercial terms and conditions apply.
(b) Categorisation of financial instruments Financial assets Note Category Carrying amount Carrying amount 2009 2008 Cash and cash equivalents 7 N/A 18,494 120,080 Receivables 8 Loans and receivables (at amortised cost) 37,516 29,041
Payables 11 Financial liabilities measured at amortised cost 56,798 48,736 Amounts owing to land vendors 11 1,761 3,522 Land sale deposits 58,739 63,212 Interest bearing liabilities 12 Financial liabilities measured at amortised cost 143,629 145,037 VicUrban Annual Report 08/09 79
(c) Credit risk Credit risk arises from the financial assets of VicUrban, which comprise cash and cash equivalents, trade and other receivables and derivative instruments. VicUrban’s exposure to credit risk arises from the potential default of counter party on their contractual obligations. Credit risk is measured at fair value and is monitored on a regular basis. VicUrban does not have any significant concentrations of credit risk as it undertakes transactions with a large number of customers in the residential property market. VicUrban’s maximum credit risk exposure is indicated by the carrying amounts of its financial assets. This does not take into account the value of security held in the event other parties fail to perform their obligations under contracts of sale. Financial assets that are either past due or impaired As at the reporting date, there is no event to indicate that any of the financial assets were impaired. There are no financial assets that have had their terms renegotiated so as to prevent them from being past due or impaired, and they are stated as the carrying amounts as indicated. Interest rate risk exposure and Weighted Carrying Interest rate exposure Not past Past due but not impaired Impaired ageing analysis of financial assets average amount Fixed Interest Variable Non-interest due and not Less than 1 - 2 2 months Over 1 year financial interest rate Rate Interest Rate bearing impaired 1 month months – 1 year assets % $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 30 June 2009 Financial Assets Cash assets and cash equivalents 2.95% 18,494 - 18,487 7 18,494 Amounts receivable under contracts of sale 0.00% 2,015 - - 2,015 2,015 - - - - - Trade receivables 0.00% 10,825 - - 10,825 442 7,929 292 2,071 91 - Amounts receivable under development agreements 0.00% 4,350 - - 4,350 4,350 - - - - - Other receivables 2.33% 20,326 7,878 - 12,448 20,326 - - - - - 56,010 7,878 18,487 29,645 45,627 7,929 292 2,071 91 - 30 June 2008 Financial Assets Cash assets and cash equivalents 7.43% 120,080 70,000 50,072 8 120,080 Amounts receivable under contracts of sale 0.00% 1,339 - - 1,339 1,339 - - - - - Trade receivables 0.00% 4,012 - - 4,012 2,857 486 192 283 194 - Amounts receivable under development agreements 0.00% 11,314 - - 11,314 11,314 - - - - - Other receivables 4.78% 11,376 8,374 - 3,002 11,376 - - - - - 148,121 78,374 50,072 19,675 146,966 486 192 283 194 - (d) Liquidity risk Liquidity risk arises when VicUrban is unable to meet its financial obligations as they fall due. VicUrban’s policy is to settle financial obligations within 30 days and in the event of a dispute, make payments within 30 days from the date of resolution. It also continuously manages risk through monitoring future cash flows and maturities planning to ensure adequate holding of high quality liquid assets and dealing in highly liquid markets. VicUrban’s exposure to liquidity risk is deemed insignificant based on prior periods’ data and current assessment of risk. Interest rate risk exposure and ageing Weighted Carrying Interest rate exposure Nominal Maturity dates analysis of financial liabilities average amount Fixed Interest Variable Non-interest amount 1 year Between 1 Over interest rate Rate Interest Rate bearing or less to 5 years 5 years % $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 30 June 2009 Financial Liabilities Payables 0.00% 56,798 - - 56,798 56,798 56,798 - - Amounts owing to land vendors 0.00% 1,761 - - 1,761 1,761 1,761 - - Land sale deposits 0.00% 58,739 - - 58,739 58,739 58,739 - - Interest bearing liabilities 6.70% 143,629 133,629 10,000 - 179,388 17,089 67,340 59,200 260,927 133,629 10,000 117,298 296,686 134,387 67,340 59,200 30 June 2008 Financial Liabilities Payables 0.00% 48,736 - - 48,736 48,736 48,736 - - Amounts owing to land vendors 0.00% 3,522 - - 3,522 3,522 1,761 1,761 - Land sale deposits 0.00% 63,212 - - 63,212 63,212 63,212 - - Interest bearing liabilities 7.41% 145,037 145,037 - - 184,701 10,584 81,553 52,900 260,507 145,037 - 115,470 300,171 124,293 83,314 52,900 VicUrban Annual Report 80 08/09
17. Financial Instruments continued (e) Market risk VicUrban’s exposures to market risk are primarily through interest rate risk with virtually no exposure to foreign currency and other price risks. Objectives, policies and processes used to manage each of these risks are disclosed in the paragraphs below. Foreign currency risk VicUrban is exposed to insignificant foreign currency risk through its payables relating to purchases of supplies and consumables from overseas. This risk is low because of the minor and infrequent amount of purchases denominated in foreign currencies and a short timeframe between commitment and settlement. Interest rate risk Exposure to interest rate risk is insignificant and might arise primarily through VicUrban’s interest bearing liabilities. Minimisation of risk is achieved by mainly undertaking fixed rate or non-interest bearing financial instruments. VicUrban’s interest bearing liabilities are managed by Treasury Corporation of Victoria and any movement in interest rates are monitored on a daily basis. VicUrban’s exposure to interest rate risk is set out in the following table. Sensitivity disclosure analysis Taking into account past performance, future expectations, economic forecasts, and management’s knowledge and experience of the financial markets, VicUrban believes the following movements are ‘reasonably possible’ over the next 12 months. The following table discloses the impact on net operating result and equity for each category of financial instrument held by VicUrban at year-end as presented to key management personnel, if the below movements were to occur.
($’000) ($’000) Interest Rate Risk Other Price Risk (C) -1% +1% -1% 1% (100 Basis Points) (100 Basis Points)
Market risk exposure Carrying Amount Net Result Equity Net Result Equity Net Result Equity Net Result Equity
30 June 2009 Financial assets: Cash and cash equivalents(a) 18,494 (185) (185) 185 185 - - - - Receivables 37,516 ------Financial liabilities: Payables 58,559 ------Interest bearing liabilities(b) 143,629 171 171 (171) (171) - - - - Total increase/(decrease) 258,198 (14) (14) 14 14 - - - -
30 June 2008 Financial assets: Cash and cash equivalents(a) 120,080 (1,201) (1,201) 1,201 1,201 - - - - Receivables 29,041 ------Financial liabilities: Payables 52,258 ------Interest bearing liabilities(b) 145,037 106 106 (106) (106) - - - - Total increase/(decrease) 346,416 (1,095) (1,095) 1,095 1,095 - - - -
Notes: (a) Sensitivity of cash and cash equivalents to a 1 per cent movement in market interest rate. All interest bearing balances are short term investments and subject to sensitivity: ($18,494k x 0.01 = $185k) (b) Sensitivity of interest bearing liabilities to a 1 per cent movement in market interest rate. Only the liabilities with a variable rate or those with a fixed rate maturing in 1 year or less are subject to the sensitivity: ($17,109k x 0.01 = $171k) (c) VicUrban does not hold equity investments and is not subject to related price risk VicUrban Annual Report 08/09 81
(f) Fair value The fair values and net fair values of financial assets and financial liabilities are determined as follows: - the fair value of financial assets and financial liabilities with standard terms and conditions and traded in active liquid markets are determined with reference to quoted market prices: and - the fair value of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis. VicUrban considers that the carrying amount of financial assets and financial liabilities recorded in the financial report to be a fair approximation of their fair values, because of the short-term nature of the financial instruments and the expectation that they will be paid in full. Specifically, the following methods and assumptions have been used to determine that the aggregate net fair values of the financial assets and liabilities equal their respective carrying amounts as recorded in the Balance Sheet as at 30 June 2009: Cash and cash equivalents: The carrying amount equals fair value. Receivables and payables: The carrying amounts approximate fair value due to their short collection and payment terms. Interest bearing liabilities: The carrying amount based on the draw down value equates approximately to fair value based on the market value of the portfolio at balance date. Amounts owing to land vendors: The carrying amount equates approximately to fair value.
The following table details the financial assets and financial liabilities, Carrying amount Fair value of which the fair values are not the same as their carrying value: 2009 2008 2009 2008
Financial Liabilities: Interest bearing liabilities 143,629 145,037 143,123 138,260
18. Authority members and executives disclosure (a) Responsible persons In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994, the following disclosures are made regarding Responsible Persons for the reporting period: Minister The Hon. Justin Madden, MP Minister for Planning (1 July 2008 - present)
Governing Board Mr Tony Darvall (Chairperson) Mr Warwick Heine Ms Carolyn Lloyd Mr Michael Roux Mr Marcus Spiller (resigned 16 April 2009) Ms Gabrielle Trainor Mr Garry Weaven Mr John Stanley (appointed 16 December 2008)
Accountable Officer Ms Pru Sanderson, Chief Executive Officer VicUrban Annual Report 82 08/09
18. Authority members and executives disclosure continued notes to the (b) Remuneration of Responsible Persons The Responsible Persons received remuneration for the 12 month financial period ending 30 June 2009. financial The number of Responsible Persons, excluding Ministers, whose total remuneration in connection with the affairs of VicUrban, as shown in the following bands, were: statements 30 June 2009 30 June 2008 No. No.
$0 - $9,999 - 1 $10,000 - $19,999 1 - $20,000 - $29,999 1 - $30,000 - $39,999 5 6 $50,000 - $59,999 1 1 $460,000 - $469,999 - 1 $500,000 - $509,999 1 - 9 9 $’000 $’000
Total remuneration received, or due and receivable by Responsible Persons from VicUrban for the financial period : 764 714
VicUrban pays premiums in respect of insurance for the benefit of all Responsible Persons including directors and officers indemnity insurance. (c) Remuneration of executives Disclosure is required for executives whose total remuneration for the twelve month financial period ending 30 June 2009 exceeded $100,000. The number of executive officers, other than the Responsible Persons, and their total remuneration during the financial period are shown in the table below in their relevant income bands. Base remuneration is exclusive of performance incentive bonus payments, long service leave payments and retirement benefits. Total Remuneration Base Remuneration Total Remuneration Base Remuneration 30 June 2009 30 June 2009 30 June 2008 30 June 2008 No. No. No. No.
$170,000 - $179,999 - 1 - - $200,000 - $209,999 1 - - 1 $210,000 - $219,999 - - - 1 $230,000 - $239,999 - 2 2 2 $240,000 - $249,999 1 - - 1 $250,000 - $259,999 - - 2 - $260,000 - $269,999 - 3 - - $270,000 - $279,999 - - 1 - $280,000 - $289,999 1 - - 1 $310,000 - $319,999 3 - 1 - 6 6 6 6 $’000 $’000 $’000 $’000
The total remuneration received, or due and receivable, by executive officers, other than Responsible Persons, whose total remuneration exceeded $100,000 from VicUrban for the financial year was: 1,773 1,725 1,568 1,412 VicUrban Annual Report 08/09 83
19 Remuneration of auditors During the year the following fees were paid or payable for services provided by VicUrban’s auditors: notes to the 30 June 2009 30 June 2008 $’000 $’000 financial
Victorian Auditor-General’s Office: statements Audit and review of financial reports and other audit work under the Audit Act 1994 96 87
Total remuneration for audit services 96 87
20. Contingent Assets and Liabilities 30 June 2009 30 June 2008 $’000 $’000
Contingent assets Bank guarantees (i) 70,411 87,916
Contingent liabilities Bank guarantees (ii) 12,925 9,229 Valley Lake BMD claim (iii) - -
(i) Bank guarantees provided to VicUrban relate to Docklands stage development and performance securities. (ii) Bank guarantees have been issued by VicUrban’s bankers to municipalities and other Government bodies for satisfactory performance of works undertaken by VicUrban. If a body is not satisfied with VicUrban’s performance it may claim against the relevant guarantee. (iii) A claim for damages was lodged in the 2003/04 financial year against VicUrban with respect to contract earthworks at Valley Lake. The matter was determined at first instance in the Supreme Court of Victoria. The claimant subsequently lodged an appeal to this decision, and VicUrban cross appealed. The appeal has now been heard in the Supreme Court of Victoria Court of Appeal but the decision is yet to be handed down. VicUrban believes that any disclosure of financial impacts could potentially prejudice the outcome of the court proceedings.
21. Commitments for expenditure 30 June 2009 30 June 2008 $’000 $’000
Capital commitments Commitments for the acquisition of infrastructure, property, plant and equipment contracted for at the reporting date but not recognised as liabilities or payables are as follows: Within one year 8,439 - Total capital commitments 8,439 -
Operating leases Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows: Within one year 1,930 1,260 Later than one year but no later than five years 10,008 9,094 More than five years 47,184 48,437 Total operating lease commitments 59,122 58,791 VicUrban Annual Report 84 08/09 notes to the 22. Related party transactions financial The names of the Responsible Persons who were Responsible Persons of VicUrban during the year ended 30 June 2008 are disclosed in Note 18. Related party transactions with Board directors and their related parties, which occurred during the normal course of business, apart from remuneration statements of Board directors which is disclosed in Note 18 are listed below:
30 June 2009 30 June 2008 $’000 $’000
Mr Marcus Spiller Consulting services by SGS Economics & Planning 24 40
During the financial period, the following aggregate transactions were undertaken and balances held with other Victorian Government controlled entities. These transactions were undertaken on commercial terms and conditions in the ordinary course of operations.
Revenue 802 7,682 Other receipts including operating grants 34,148 46,257 Operating expense payments 2,078 3,550 Capital appropriations 5,535 146,136 Payments for land purchases 10,076 - Payments for development works 6,764 17,428
Interest payments 9,229 9,042 Financial accommodation levy payments 1,991 2,239 Income tax equivalent payments 2,681 2,797
Dividends paid 8,866 2,986
Assets 15,885 9,764
Other liabilities 18,803 17,928
Loans from Treasury Corporation of Victoria (TCV) 143,540 144,780 Loans received from TCV 65,200 5,750 Loans repaid to TCV 66,440 18,450
Deposits with Treasury Corporation of Victoria (TCV) 17,477 117,775 Deposits paid to TCV 146,803 183,769 Deposits repaid by TCV 247,100 87,520
The ultimate controlling entity of VicUrban is the State Government of Victoria. VicUrban Annual Report 08/09 85
notes to the 23. Notes to the cash flow statement 30 June 2009 30 June 2008 $’000 $’000 financial
Reconciliation of profit after income tax equivalent expense and impairment statements of assets to net cash inflow/(outflow) from operating activities Profit after income tax equivalent expense and significant items (8,741) 23,158
Add/(deduct): Depreciation 2,678 2,633 Asset impairment - - Provision for doubtful debts 9 (315) Loss / (gain) on disposal of fixed assets 59 29
Change in operating assets and liabilities: Decrease/(increase) in receivables (before accrued interest and provisions) (8,484) 852 Decrease/(increase) in inventories (94,564) 17,975 Decrease/(increase) in prepayments 81 176 Decrease/(increase) in deferred tax asset 184 52 Increase/(decrease) in payables 7,894 11,326 Increase/(decrease) in amounts owing to land vendors (1,761) (7,810) Increase/(decrease) in land sale deposits (4,473) 23,657 Increase/(decrease) in provisions 15,806 7,125 Increase/(decrease) in current tax liabilities (1,896) 794 Increase/(decrease) in deferred tax liabilities (681) (1,290)
Net cash inflow/(outflow) from operating activities (93,889) 78,362
24. Deed of Support In fulfilling its objectives, VicUrban executes development agreements from time to time and requires funding in order to carry out its rights and obligations under those development agreements. VicUrban also requires funding from time to time to meet other costs incurred in carrying out the functions under the Victorian Urban Development Authority Act 2003. The Treasurer of the State of Victoria has provided a Deed of Support in favour of VicUrban in respect of the loans for the Docklands project from Treasury Corporation of Victoria (TCV). In the event of delayed receipts from developers or other prescribed events of support, the Treasurer will provide appropriate financial support to VicUrban to avoid VicUrban’s default of its TCV borrowing obligations. VicUrban Annual Report 86 08/09
Certification We certify that the attached financial statements for VicUrban have been prepared in accordance with Standing Direction 4.2 of the Financial Management Act 1994, applicable Financial Reporting Directions, Australian accounting standards and other mandatory of financial professional reporting requirements. We further state that, in our opinion, the information set out in the Operating Statement, Balance Sheet, Cashflow Statement, Statement of statements Changes in Equity and Notes to the Financial Statements, presents fairly the financial transactions for the year ended 30 June 2009 and financial For the financial year position of VicUrban as at 30 June 2009. ended 30 June 2009 We are not aware of any circumstance which would render any particulars included in the Financial Statements to be misleading or inaccurate.
Mr A Darvall Ms P Sanderson Mr S Sangster Chairperson Chief Executive Officer Chief Operating Officer Accountable Officer
Melbourne,13 August 2009
I, Anthony Darvall, certify that VicUrban has risk management processes in place consistent with the Australian/New Zealand Risk Management Standard and an internal control system is in place that enables the executive to understand, manage and satisfactorily control Attestation risk exposures. The Finance & Audit Risk Committee verifies this assurance and that the risk profile of VicUrban has been critically reviewed within the last 12 months.
Mr A Darvall Chairperson
Melbourne, 13 August 2009 VicUrban Annual Report 08/09 87 auditor general’s report VicUrban Annual Report 88 08/09
LEGISLATION PAGE disclosure Financial Management Act 1994 FRD 22B Occupational Health & Safety 50 index FRD 22B Establishment 8 to 9 FRD 22B Ministers 8, 81 FRD 22B Objectives, functions, powers and duties 8 to 9 FRD 22B Nature and range of services provided 8 to 9 FRD 22B Summary of achievements 2, 24 to 47 FRD 22B Organisational structure 14 to 16 FRD 22B Financial statements 59 to 85 FRD 22B Subsequent events 52 FRD 22B Summary of significant changes in financial position 52 FRD 22B Report of operations 18 to 23 FRD 22B Consultancies 55 FRD 22B Application and operation of Freedom of Information Act 1982 53 FRD 22B Compliance with building and maintenance provisions of Building Act 1993 52 FRD 22B Application and operation of Whistleblowers Protection Act 2001 54 FRD 22B Statement on National Competition Policy 53 FRD 22B Summary of environmental performance 21 FRD 22B, SD 4.2(k) Operational and Budgetary Objectives and Performance against Objectives 18 to 23 FRD 22B Employment and Conduct Principles 48 to 51 FRD 22B Summary of financial results for the year 23 FRD 22B Statement of availability of other information 53 FRD 22B Risk Management compliance attestation 52
FRD 10 Disclosure index 86 FRD 11 Ex gratia payments NIL FRD 21A Responsible Person and Executive Officer disclosures 81 FRD 25 Victorian Industry Participation Policy disclosures 53 FRD 29 Workforce data disclosures 51
Other Legislation Freedom of Information Act 1982 53 Building Act 1993 52 Whistleblowers Protection Act 2001 54 Victorian Industry Participation Act 2003 53 Financial Management Act 1994 52 + Financials Audit Act 1994 52 to VAGO letters Risk Management 54 VicUrban Annual Report 08/09 89
NOTES VicUrban Annual Report 90 08/09
NOTES