Annual Report 2015 - Bendigo Bank · Annual report Nightcliff Community Enterprises Limited 5 Interest in the Community Bank® model remains strong, with 20 Community Bank® sites

Nightcliff Community Bank®Branch

Annual Report2015

ABN 64 128 953 748

Nightcliff CommunityEnterprises Limited

Annual report Nightcliff Community Enterprises Limited 1

Contents

Chairman’s report 2

Manager’s report 3

Bendigo and Adelaide Bank report 4

Directors’ report 6

Auditor’s independence declaration 11

Financial statements 12

Notes to the financial statements 16

Directors’ declaration 38

Independent audit report 39

Annual report Nightcliff Community Enterprises Limited2

For year ending 30 June 2015

The past year has been one of “steady as she goes” consolidation for the Nightcliff Community Bank® Branch.

In a changing Darwin economy, the emphasis has been on connecting with the local community and strengthening

community awareness of the benefits the branch is able to bring to our community.

In this age of digital transactions it has become increasingly important for people to feel they have real access to

sound financial advice and services. Accordingly the Directors, Manager and staff in the branch have continued to

maintain a visible presence in the community.

For example the Jetty Art Space during the Seabreeze Festival provides a good opportunity for interaction with

many members of the public who may not ever consider venturing near the branch itself.

Of course the branch has continued to provide financial support to community events and groups including;

• NTRugbyUnion • DarwinTrailerBoatClub

• Alzheimer’sAustraliaNT • TactileArts

• DarwinMensShed • NTHockeyAssociation

• NightcliffCricketClub • MasterAFLFootball

• NTGirlGuides • SeabreezeFestival

• DarwinRoyalShow • AustralianVolunteerCoastguard

• HungerWalk • JingiliBMXClub

• BearCottage • MalakMarketplace

• LakesideCommunityGarden.

Wehavealsobeguntotakeamoreactivesalesapproachbyspendingtimeatinformationsessionsinlocal

shopping centres. A portable information booth is being developed which will enable a more direct contact with

people in other shopping centres through the northern suburbs.

This year the Community Bank® company will pay a dividend to provide some financial benefit to the many

shareholders who have supported this local community enterprise since its inception.

TheBoard,andI’msureIcanspeakfortheshareholdersaswell,wouldliketothankJeff,Victoria,Lynand

Laurafortheveryrealdedicationtheyshowinoperatingthebranch,notjustasabusinessbutasasignificant

contribution to the well being of the community.

ThebranchcontinuestohavearespectfulworkingpartnershipwiththeBendigoBankandinparticularwewould

liketothankMrJohnGrotenhuis(NTRegionalManager)andMrMikeClutterham(StateCommunityStrengthening

Manager)fortheircontinuousandconsiderablesupport.

James McDougall

Chairman

Chairman’sreport



It is my pleasure to once again reflect on the past 12 months of our business achievements.

The past 12 months has seen our business growth maintained in very competitive home, commercial and deposit

takingmarket.NetBusinessgrowthon-bookwas$6.6millionwithourCommunitySectorBankingbookgrowingby

$3.6million,anoverallgrowthofover$9million.

In reporting business growth we remind ourselves that our core focus has and always will be the local community

with our branch once again supporting many activities with sponsorship support or direct staff involvement.

Inthe2014/15reportingperiodtheBusinessallocationofsponsorshipwas$21,981withover18groups

receiving support from the Nightcliff Community Bank® Branch.

Tomentionsomeofthehighlightsfortheyear:-

• InvolvementwiththeDarwinTrailerBoatClubBluewaterClassic,theonlyfishingcompetitioninAustraliathat

hasaprograminthatallfishcaughtaredonatedtoFoodbankNTtosupportthoseinneed.

• OurinvolvementwithTreyCrowleywhothisyearbecametheAustralianBoxingChampionforhisdivision.

• NorthernTerritoryRugbyUnionisanothergreatpartnershipforus,ourassistancenowinvolvesabrandnew

ScoreboardontheirjuniorgroundstohelpdeveloptheirsportintheTerritory.

• StVinniesCEOSleepOut,anexperienceallmembersoftheCommunityshouldexperienceandanopportunity

to help those in need through our Services here in the future.

Ourforecastforthenext12monthsisprojectedgrowthwithinacompetitivemarket.Webelieveourcommunity

supplies opportunities for our business to grow. As our community and people grow within the area, we believe our

businessstrengthsandvalueswillbeattheforefrontoftheirbankingchoices.

Lastofall,mystaffandIwouldagainpersonallythankyouourshareholdersandcustomersforyoursupporttoour

business for the last 12 months.

Jeff Watson

Branch Manager

Manager’sreport



In the 2015 financial year, the Community Bank®networkopenedits310thbranchandcommunitycontributions

sincethemodel’sinceptionexceed$130million.Bothoftheseachievementscouldnothavebeenachieved

withoutyourongoingsupportasashareholder,customerandadvocateofwhatisatrulyuniquewayofbankingfor

the benefit of your local community.

LocalcommunitiescontinuetoembracetheCommunity Bank®model,abankingmovementfoundedonthesimple

beliefthatsuccessfulcustomersandsuccessfulcommunitiescreateasuccessfulbank.

Seventeen years later communities are still approaching us and the model is as robust and relevant as ever,

however a review of what we were doing, why and how we could do it better was timely.

Duringan18monthperiodtheBank,inpartnershipwiththeCommunity Bank®network,undertooka

comprehensive review of the Community Bank®model.ProjectHorizonwasthelargestsingleengagementprocess

everundertakenbyourorganisation.

Asaresult,afocusforthenext18monthswillbetheimplementationof64recommendations.Whatwas

overwhelmingly obvious is that our Community Bank®network,andourBank,caredeeplyaboutwhathasbeen

developedandinwhatthefutureholdsforthenetwork.

In the early days of Community Bank® development, the Community Bank® model was seen as a way to restore

branchbankingservicestoruraltowns,regionalcitiesandmetropolitansuburbsafterthelastofthebanksclosed

their doors.

Today,althoughthefocusisstillaboutprovidingbankingservices,thereisperhapsanevengreaterinterestin

the way in which the model creates a successful community enterprise used to effectively, and sustainably, build

community capacity.

In October 2014, we welcomed Community Bank® branches in Bacchus Marsh, Kilmore, Maffra, Kwinana and

Nubeena.Allofthesebranchesjoinastrongandmaturebankingnetworkwherevaluedpartnershipsenhance

bankingservices,takingtheprofitstheirbankingbusinessgeneratesandreinvestingthatfundingintoinitiativesto

ultimately strengthen their community.

Followingconsultationwithlocalresidentsandbusinessownersrespondingtootherbanksreducingtheirbranch

presence, Aldinga Beach Community Bank®BranchopenedtheWillungaCustomerServiceCentreinApril2015,

providingafullbankingservicetolocalpeoplefivedaysaweek.

The Community Bank® model is a great example of shared value and was centre stage at an international Shared

ValueconferenceintheUnitedStatesearlierthisyear.

Funding generated by Community Bank®branchessupportprojectsthatmakeadifferencetoacommunity.Butno

matter how big or small the place people call home, the Community Bank®networkrecognisesthatwhentheyact

as one, powered by the good that money can bring, bigger things can happen for local towns, regions and states.

InWA,a$125,000commitmenttoRonaldMcDonaldHousebyCollie&DistrictsCommunity Bank® Branch

resultedinafurther$125,000from21branches(bothcommunityandcompanyowned)inthestate.

InQLD,LongreachfarmingfamiliesarenowfeedingtheirstockthankstoadedicatedRotaryClubandfinancial

contributionsfrom16Community Bank®(andcompany)branches.

AcrossregionalandruralNSW,youngpeoplearetodaybetterdriversthankstoadrivereducationprogram

supported by Community Bank®branchesandacrossAustralia,58youngpeopleheadedofftotheirfirstyearof

university with the help of a Community Bank® scholarship.

BendigoandAdelaideBankreport


Interest in the Community Bank® model remains strong, with 20 Community Bank® sites currently in development

and a further six Community Bank® branches expected to open nationally during the next 12 months.

Thenetwork’ssteadyexpansiondemonstratesthestrengthandrelevanceofabankingmodelwherethedesireto

support the financial needs of customers is equalled by the desire to support the community with the good that

money can bring.

By the end of the financial year 2014/15 the Community Bank®networkachievedthefollowing:

• Returnstocommunity–over$130millionsincethemodel’sinception

• Community Bank®branches–310

• Community Bank®branchstaff–morethan1,500

• Community Bank®companyDirectors–1,946

• Bankingbusiness–$28.79billion

• Customers–699,000

• Shareholders–74,393

• Dividendspaidtoshareholderssinceinception–$38.6million

ThecommunitieswepartnerwithalsohaveaccesstotheBank’sextensiverangeofothercommunitybuilding

solutionsincludingCommunityEnterpriseFoundation™(philanthropicarm),CommunitySectorBanking(banking

servicefornot-for-profitorganisations),GenerationGreen™(environmentandsustainabilityinitiative),Community

Telco®Australia(telecommunicationssolution),tertiaryeducationscholarshipsandcommunityenterprisesthat

provide Community Bank® companies with further development options.

InBendigoandAdelaideBank,yourCommunity Bank® company has a committed and strong partner and over the

lastfinancialyearourcompanyhascontinueditssolidperformance.OurBankcontinuestoberatedatleast“A -”

byStandard&Poor’s,Moody’sandFitchinrecognitionofitsstrongperformanceinthefaceofwhatcontinuesto

be a challenging economic environment.

Our Community Bank®partnersplayedanintegralroleintheBank’sinvolvementintheFinancialSystemsInquiry,

lobbyingtheirlocalFederalGovernmentrepresentativesandcallingforalevelplayingfield.

RecentAPRAannouncementsregardingchangestoriskweightsonmortgageswillpositivelyimpactourBank–

providing customers with a level playing field by giving them more choice from a wider variety of financial providers.

Thankstotheeffortsofourpeople,ourpeersandCommunity Bank®partners,we’restartingtoseethebenefits.

Incontinuingtotakeacollaborativeapproach,weactasonenetworkdrivingpositiveoutcomesforallAustralians.

As Community Bank®companyshareholdersyouarepartofauniquebankingmovement.

Themodeloffersanalternativewaytothinkaboutbankingandtherolebanksplayinmodernsociety,and

because of your support there really is no limit to what can be achieved for local people and the communities in

which you live.

ThankyouforyourongoingsupportofyourlocalCommunity Bank® branch.

Robert Musgrove

Executive Community Engagement

BendigoandAdelaideBankreport(continued)


Directors’reportFor the financial year ended 30 June 2015

Your directors submit the financial statements of the company for the financial year ended 30 June 2015.

Directors

Thenamesanddetailsofthecompany’sdirectorswhoheldofficeduringorsincetheendofthefinancialyear:

James Keith McDougall

Chairman

Occupation: Internet Technician

Qualifications, experience and expertise: Darwin Community Arts Chairman.

Specialresponsibilities:Chairman,Secretary,MarketingCommittee,FinanceandAuditCommittee

Interest in shares: 1

Lorraine Dawn Koch

Director

Occupation:Retired

Qualifications,experienceandexpertise:VolunteerforAgedcare.Sportingadministrator.Schoolcouncil.

Specialresponsibilities:MarketingCommittee,GovernanceCommittee,HRCommittee

Interest in shares: 1,001

Tracey Leanne Myles

Director(Resigned6August2014/Appointed24November2014)

Occupation:MentalHealthConsultant

Qualifications, experience and expertise: Currently employed as a Consumer Consultant for the Northern

TerritoryMentalHealthServices.TreasurerfortheDownSyndromeAssociationNTandSIDSandKidsNT.

Websiteandsocialmediamanager.NTrepresentativeforChildrenwithDisabilityAustralia.

Specialresponsibilities:Treasurer,MarketingCommittee,FinanceandAuditCommittee

Interest in shares: 251

Robyn Gay Simon

Director(Resigned24November2014)

Occupation: Business Proprietor/Accountant

Qualifications, experience and expertise: Certified Practising Accountant.

Special responsibilities: Treasurer

Interest in shares: Nil

Murray Reginald Fuller

Chairman(Resigned24November2014)

Occupation:SelfEmployed

Qualifications, experience and expertise: Bachelor of Business Management. Past chairman Nightcliff Primary

School Council.

Special responsibilities: Chairman



Directors’report(continued)

Directors (continued)

Brenton Paul Pedler

Treasurer(Resigned14July2014)

Occupation:EducationAdvisor

Qualifications,experienceandexpertise:Teacherofalternativeeducation.‘LifeBeinit’NTBoardmember,

Churchill Fellowship Association NT executive.

Specialresponsibilities:Treasurer,FinanceCommittee,Governance&HRcommittee


Directors were in office for this entire year unless otherwise stated.

No directors have material interests in contracts or proposed contracts with the company.

Company Secretary

ThecompanysecretaryisJamesKeithMcDougall.JamestookoverthepositionofsecretaryfromTraceyLeanne

Myles on 14 July 2014.

Chairman of Darwin Community Arts.

Principal Activities

The principal activities of the company during the financial year were facilitating Community Bank® services under

managementrightstooperateafranchisedbranchofBendigoandAdelaideBankLimited.

There have been no significant changes in the nature of these activities during the year.

Operating results

Operations have continued to perform in line with expectations. The profit of the company for the financial year

after provision for income tax was:

Year ended 30 June 2015$

Year ended 30 June 2014$

18,874 11,121

Remuneration report

(a)Remunerationofdirectors

All directors of the company are on a voluntary basis, therefore no remuneration guidelines have been prepared.

(b)RemunerationofAreaandBranchManagers

Theboardisresponsibleforthedeterminationofremunerationpackagesandpoliciesapplicabletothe

branch manager and all the staff. The branch manager is invited to the board meetings as required to discuss

performanceandremunerationpackages.

Theboard’spolicyinrespectofthebranchmanageristomaintainremunerationatparitywithintheCommunity

Bank®networkandlocalmarketratesforcomparableroles.

There are no executives who are directly accountable and responsible for the strategic direction and

operational management of the entity. This is wholly a board role. There are therefore no specified executives.



Remuneration report (continued)

Directors’shareholdings

Balance at start of the year

Changes during the

year

Balance at end of the year

James Keith McDougall 1 - 1

LorraineDawnKoch 1,001 - 1,001

TraceyLeanneMyles(Resigned6August2014/

Appointed24November2014)

251 - 251

RobynGaySimon(Resigned24November2014) - - -

MurrayReginaldFuller(Resigned24November2014) 10,000 - 10,000

BrentonPaulPedler(Resigned14July2014) 1,001 - 1,001

Dividends

No dividends were declared or paid for the previous year.

Significant changes in the state of affairs

In the opinion of the directors there were no significant changes in the state of affairs of the company that

occurred during the financial year under review not otherwise disclosed in this report or the financial statements.

Events since the end of the financial year

There are no matters or circumstances that have arisen since the end of the financial year that have significantly

affected or may significantly affect the operations of the company the results of those operations or the state of

affairs of the company, in future years.

Likely developments

Thecompanywillcontinueitspolicyoffacilitatingbankingservicestothecommunity.

Environmental regulation

Thecompanyisnotsubjecttoanysignificantenvironmentalregulation.

Directors’ benefits

No director has received or become entitled to receive, during or since the financial year, a benefit because of a

contract made by the company, controlled entity or related body corporate with a director, a firm which a director is

a member or an entity in which a director has a substantial financial interest except as disclosed in note 20 to the

financial statements. This statement excludes a benefit included in the aggregate amount of emoluments received

ordueandreceivablebydirectorsshowninthecompany’saccounts,orthefixedsalaryofafull-timeemployeeof

the company, controlled entity or related body corporate.



Indemnification and insurance of directors and officers

Thecompanyhasindemnifiedalldirectorsandthemanagerinrespectofliabilitiestootherpersons(otherthan

thecompanyorrelatedbodycorporate)thatmayarisefromtheirpositionasdirectorsormanagerofthecompany

exceptwheretheliabilityarisesoutofconductinvolvingthelackofgoodfaith.

Disclosure of the nature of the liability and the amount of the premium is prohibited by the confidentiality clause of

the contract of insurance. The company has not provided any insurance for an auditor of the company or a related

body corporate.

Directors’ meetings

Thenumberofdirectors’meetingsattendedbyeachofthedirectorsofthecompanyduringtheyearwere:

Board Meetings Attended

Eligible Attended

James Keith McDougall 10 9

LorraineDawnKoch 10 10

TraceyLeanneMyles

(Resigned6August2014/Appointed24November2014)6 6

RobynGaySimon(Resigned24November2014) 4 -

MurrayReginaldFuller(Resigned24November2014) 4 4

BrentonPaulPedler(Resigned14July2014) - -

Proceedings on behalf of the company

NopersonhasappliedtotheCourtundersection237oftheCorporationsAct2001forleavetobringproceedings

on behalf of the company, or to intervene in any proceedings to which the company is a party, for the purpose of

takingresponsibilityonbehalfofthecompanyforallorpartofthoseproceedings.

No proceedings have been brought or intervened in on behalf of the company with leave of the Court under section

237oftheCorporationsAct2001.

Non audit services

The company may decide to employ the auditor on assignments additional to their statutory duties where the

auditor’sexpertiseandexperiencewiththecompanyareimportant.Detailsoftheamountspaidorpayabletothe

auditor(AndrewFrewinStewart)forauditandnonauditservicesprovidedduringtheyeararesetoutinthenotes

to the accounts.

Theboardofdirectorshasconsideredthepositionandissatisfiedthattheprovisionofthenon-auditservicesis

compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.

Thedirectorsaresatisfiedthattheprovisionofnon-auditservicesbytheauditor,assetoutinthenotesdidnot

compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

• allnon-auditserviceshavebeenreviewedtoensuretheydonotimpactontheimpartialityandobjectivityofthe

auditor



Non audit services

• noneoftheservicesunderminethegeneralprinciplesrelatingtoauditorindependenceassetoutinAPES110

CodeofEthicsforProfessionalAccountants,includingreviewingorauditingtheauditor’sownwork,actingin

amanagementoradecision-makingcapacityforthecompany,actingasadvocateforthecompanyorjointly

sharingeconomicriskandrewards.

Auditor’s independence declaration

Acopyoftheauditor’sindependencedeclarationasrequiredundersection307CoftheCorporationsAct2001is

set out on page 11.

Signed in accordance with a resolution of the board of directors at Nightcliff, Northern Territory on 10 October

2015.

James Keith McDougall,

Chairman


Auditor’sindependencedeclaration


Financial statementsStatementofProfitorLossandOtherComprehensiveIncome for the year ended 30 June 2015

Notes 2015 2014 $ $

Revenuefromordinaryactivities 4 683,845 617,863

Employeebenefitsexpense (358,683) (295,991)

Charitabledonations,sponsorship,advertisingandpromotion (29,060) (48,289)

Occupancyandassociatedcosts (99,920) (86,914)

Systemscosts (20,792) (20,241)

Depreciationandamortisationexpense 5 (32,980) (37,438)

Financecosts 5 (4,504) (5,924)

Generaladministrationexpenses (96,783) (105,607)

Profit before income tax expense 41,123 17,459

Incometaxexpense 6 (22,249) (6,338)

Profit after income tax expense 18,874 11,121

Total comprehensive income for the year 18,874 11,121

Earnings per share for profit attributable to the ordinary

shareholders of the company: ¢ ¢

Basic earnings per share 22 2.10 1.24

The accompanying notes form part of these financial statements.


Financial statements (continued)

Balance Sheet as at 30 June 2015

Notes 2015 2014 $ $

ASSETS

Current Assets

Cashandcashequivalents 7 1,136 20,153

Tradeandotherreceivables 8 70,980 56,683

Total Current Assets 72,116 76,836

Non-Current Assets

Property,plantandequipment 9 120,767 139,565

Intangibleassets 10 43,518 57,261

Deferredtaxasset 11 185,580 207,829

Total Non-Current Assets 349,865 404,655

Total Assets 421,981 481,491

LIABILITIES

Current Liabilities

Tradeandotherpayables 12 54,372 71,806

Borrowings 13 60,814 102,255

Provisions 14 13,380 10,253

Total Current Liabilities 128,566 184,314

Non-Current Liabilities

Tradeandotherpayables 12 - 20,995

Borrowings 13 - 6,057

Provisions 14 12,977 8,561

Total Non-Current Liabilities 12,977 35,613

Total Liabilities 141,543 219,927

Net Assets 280,438 261,564

Equity

Issuedcapital 15 864,374 864,374

Accumulatedlosses 16 (583,936) (602,810)

Total Equity 280,438 261,564




StatementofChangesinEquity for the year ended 30 June 2015

Issued Accumulated Total capital losses equity $ $ $

Balance at 1 July 2013 864,374 (569,002) 295,372

Total comprehensive income for the year - 11,121 11,121

Transactions with owners in their capacity as owners:

Sharesissuedduringperiod - - -

Costsofissuingshares - - -

Dividendsprovidedfororpaid - (44,929) (44,929)

Balance at 30 June 2014 864,374 (602,810) 261,564

Balance at 1 July 2014 864,374 (602,810) 261,564

Total comprehensive income for the year - 18,874 18,874

Transactions with owners in their capacity as owners:

Sharesissuedduringperiod - - -

Costsofissuingshares - - -

Dividendsprovidedfororpaid - - -

Balance at 30 June 2015 864,374 (583,936) 280,438




Statement of Cash Flows for the year ended 30 June 2015

Notes 2015 2014 $ $

Cash flows from operating activities

Receiptsfromcustomers 758,987 680,694

Paymentstosuppliersandemployees (725,652) (619,090)

Interestreceived 90 41

Interestpaid (4,504) (5,924)

Net cash provided by operating activities 17 28,921 55,721

Cash flows from investing activities

Paymentsforproperty,plantandequipment (439) (363)

Net cash provided by/(used in) investing activities (439) (363)

Cash flows from financing activities

Repaymentofborrowings (8,497) (7,836)

Dividendspaid - (44,929)

Net cash provided by/(used in) financing activities (8,497) (52,765)

Net increase in cash held 19,985 2,593

Cashandcashequivalentsatthebeginningofthefinancialyear (73,606) (76,199)

Cash and cash equivalents at the end of the financial year 7(a) (53,621) (73,606)



Notes to the financial statementsFor year ended 30 June 2015

Note 1. Summary of significant accounting policies

a) Basis of preparation

These general purpose financial statements have been prepared in accordance with Australian Accounting

Standards and Interpretations issued by the Australian Accounting Standard Boards and the Corporations Act

2001.Thecompanyisafor-profitentityforthepurposeofpreparingthefinancialstatements.

CompliancewithIFRS

ThesefinancialstatementsandnotescomplywithInternationalFinancialReportingStandards(IFRS)asissuedby

theInternationalAccountingStandardsBoard(IASB).

Critical accounting estimates

The preparation of the financial statements requires the use of certain critical accounting estimates. It also

requiresmanagementtoexerciseitsjudgementintheprocessofapplyingthecompany’saccountingpolicies.

Theseareasinvolvingahigherdegreeofjudgementorcomplexities,orareaswhereassumptionsandestimates

are significant to the financial statements are disclosed in note 3.

Historicalcostconvention

The financial statements have been prepared under the historical cost convention on an accruals basis as

modified by the revaluation of financial assets and liabilities at fair value through profit or loss and where stated,

currentvaluationsofnon-currentassets.Costisbasedonthefairvaluesoftheconsiderationgiveninexchange

for assets.

Comparative figures

WhererequiredbyAustralianAccountingStandardscomparativefigureshavebeenadjustedtoconformwith

changes in presentation for the current financial year.

Application of new and amended accounting standards

The following amendments to accounting standards and a new interpretation issued by the Australian Accounting

StandardsBoard(AASB)becamemandatorilyeffectiveforaccountingperiodsbeginningonorafter1July2014,

and are therefore relevant for the current financial year.

• AASB2012-3AmendmentstoAustralianAccountingStandards(AASB132)–OffsettingFinancialAssetsand

FinancialLiabilities.

• AASB2013-3AmendmentstoAASB136–RecoverableAmountDisclosuresforNon-FinancialAssets.

• AASB2013-4AmendmentstoAustralianAccountingStandards(AASB139)–NovationofDerivativesand

ContinuationofHedgeAccounting.

• AASB2013-5AmendmentstoAustralianAccountingStandards(AASB10)–InvestmentEntities.

• AASB2014-1AmendmentstoAustralianAccountingStandards(PartA:AnnualImprovements2010-2012and

2011-2013Cycles).

• AASB2014-1AmendmentstoAustralianAccountingStandards(PartB:DefinedBenefitPlans:Employee

ContributionsAmendmentstoAASB119).


Notes to the financial statements (continued)

Note1.Summaryofsignificantaccountingpolicies(continued)

a) Basis of preparation (continued)

Applicationofnewandamendedaccountingstandards(continued)

• Interpretation21Levies.

• AASB1031Materiality,AASB2013-9AmendmentstoAustralianAccountingStandards–Conceptual

Framework,MaterialityandFinancialInstruments(PartB:Materiality),AASB2014-1AmendmentstoAustralian

AccountingStandards(PartC:Materiality).

None of the amendments to accounting standards or the new interpretation issued by the Australian Accounting

StandardsBoard(AASB)thatbecamemandatorilyeffectiveforaccountingperiodsbeginningonorafter1July

2014,materiallyaffectedanyoftheamountsrecognisedinthecurrentperiodoranypriorperiodandarenotlikely

to affect future periods.

The following accounting standards and interpretations issued by the Australian Accounting Standards Board

(AASB)becomeeffectiveinfutureaccountingperiods.

Effective for annual reporting periods beginning on or after

AASB9FinancialInstruments,andtherelevantamendingstandards. 1January2018

AASB15RevenuefromContractswithCustomersandAASB2014-5

Amendments to Australian Accounting Standards arising from AASB 15.1January2017

AASB2014-3AmendmentstoAustralianAccountingStandards–Accounting

for Acquisitions of Interests in Joint Operations.1January2016

AASB2014-4AmendmentstoAustralianAccountingStandards–Clarification

of Acceptable Methods of Depreciation and Amortisation.1January2016

AASB2014-6AmendmentstoAustralianAccountingStandards–Agriculture:

Bearer Plants.1January2016

AASB2014-9AmendmentstoAustralianAccountingStandards–Equity

Method in Separate Financial Statements.1January2016

AASB2014-10AmendmentstoAustralianAccountingStandards–Sale

or Contribution of Assets between an Investor and its Associate or Joint

Venture.

1January2016

AASB2015-1AmendmentstoAustralianAccountingStandards–Annual

ImprovementstoAustralianAccountingStandards2012-2014Cycle.1January2016

AASB2015-2AmendmentstoAustralianAccountingStandards–Disclosure

Initiative: Amendments to AASB 101.1January2016

AASB2015-3AmendmentstoAustralianAccountingStandardsarisingfrom

theWithdrawalofAASB1031Materiality.1 July 2015

AASB2015-4AmendmentstoAustralianAccountingStandards–Financial

ReportingRequirementsforAustralianGroupswithaForeignParent.1 July 2015

AASB2015-5AmendmentstoAustralianAccountingStandards–Investment

Entities:ApplyingtheConsolidationException.1January2016




a) Basis of preparation (continued)

Applicationofnewandamendedaccountingstandards(continued)

The company has not elected to apply any accounting standards or interpretations before their mandatory

operative date for the annual reporting period beginning 1 July 2014. Therefore the abovementioned accounting

standards or interpretations have no impact on amounts recognised in the current period or any prior period.

Economicdependency-BendigoandAdelaideBankLimited

ThecompanyhasenteredintoafranchiseagreementwithBendigoandAdelaideBankLimitedthatgovernsthe

management of the Community Bank® branch at Nightcliff, Northern Territory.

ThebranchoperatesasafranchiseofBendigoandAdelaideBankLimited,usingthename“BendigoBank”and

thelogoandsystemofoperationsofBendigoandAdelaideBankLimited.ThecompanymanagestheCommunity

Bank®branchonbehalfofBendigoandAdelaideBankLimited,howeveralltransactionswithcustomersconducted

through the Community Bank® branch are effectively conducted between the customers and Bendigo and Adelaide

BankLimited.

AlldepositsaremadewithBendigoandAdelaideBankLimited,andallpersonalandinvestmentproductsare

productsofBendigoandAdelaideBankLimited,withthecompanyfacilitatingtheprovisionofthoseproducts.All

loans, leases or hire purchase transactions, issues of new credit or debit cards, temporary or bridging finance and

any other transaction that involves creating a new debt, or increasing or changing the terms of an existing debt

owedtoBendigoandAdelaideBankLimited,mustbeapprovedbyBendigoandAdelaideBankLimited.Allcredit

transactionsaremadewithBendigoandAdelaideBankLimited,andallcreditproductsareproductsofBendigo

andAdelaideBankLimited.

The company promotes and sells the products and services, but is not a party to the transaction.

Thecreditrisk(i.e.theriskthatacustomerwillnotmakerepayments)isfortherelevantBendigoandAdelaide

BankLimitedentitytobearaslongasthecompanyhascompliedwiththeappropriateproceduresandrelevant

obligations and has not exercised a discretion in granting or extending credit.

BendigoandAdelaideBankLimitedprovidessignificantassistanceinestablishingandmaintainingtheCommunity

Bank® branch franchise operations. It also continues to provide ongoing management and operational support

and other assistance and guidance in relation to all aspects of the franchise operation, including advice in relation

to:

• adviceandassistanceinrelationtothedesign,layoutandfitoutoftheCommunity Bank® branch

• trainingforthebranchmanagerandotheremployeesinbanking,managementsystemsandinterfaceprotocol

• methodsandproceduresforthesaleofproductsandprovisionofservices

• securityandcashlogisticcontrols

• calculationofcompanyrevenueandpaymentofmanyoperatingandadministrativeexpenses

• theformulationandimplementationofadvertisingandpromotionalprograms

• salestechniquesandpropercustomerrelations.

The following is a summary of the material accounting policies adopted by the company in the preparation of the

financial statements. The accounting policies have been consistently applied, unless otherwise stated.




b) Revenue

Revenueisrecognisedwhentheamountofrevenuecanbereliablymeasured,itisprobablethatfutureeconomic

benefits will flow to the company and any specific criteria have been met. Interest and fee revenue is recognised

when earned. The gain or loss on disposal of property, plant and equipment is recognised on a net basis and is

classifiedasincomeratherthanrevenue.AllrevenueisstatednetoftheamountofGoodsandServicesTax(GST).

Revenuecalculation

OvertheperiodfromSeptember2013toFebruary2015,BendigoandAdelaideBankLimitedconducteda

review of the Community Bank®model,knownas‘ProjectHorizon’.Thiswasconductedinconsultationwiththe

Community Bank®network.TheobjectiveofthereviewwastodevelopasharedvisionoftheCommunity Bank®

model that positions it for success now and for the future.

The outcome of that review is that the fundamental franchise model and community participation remain

unchanged. Changes to be implemented over a three year period reflect a number of themes, including a culture of

innovation,agilityandflexibility,networkcollaboration,directorandstaffdevelopmentandasustainablefinancial

model. This will include changes to the financial return for Community Bank®companiesfrom1July2016.A

funds transfer pricing model will be used for the method of calculation of the cost of funds, deposit return and

margin.Allrevenuepaidoncorebankingproductswillbethroughmarginshare.Marginoncorebankingproducts

will be shared on a 50/50 basis.

Thefranchiseagreementprovidesthatthreeformsofrevenuemaybeearnedbythecompany–margin,

commissionandfeeincome.BendigoandAdelaideBankLimiteddecidestheformofrevenuethecompanyearns

on different types of products and services.

The revenue earned by the company is dependent on the business that it generates. It may also be affected by

other factors, such as economic and local conditions, for example, interest rates.

Corebankingproducts

BendigoandAdelaideBankLimitedhasidentifiedsomeBendigoBankGroupproductsandservicesas‘core

bankingproducts’.Itmaychangetheproductsandserviceswhichareidentifiedascorebankingproductsbygiving

thecompanyatleast30days’notice.CorebankingproductscurrentlyincludeBendigoBankbrandedhomeloans,

term deposits and at call deposits.

Margin

Margin is arrived at through the following calculation:

• Interestpaidbycustomersonloanslessinterestpaidtocustomersondeposits,

• plusanydepositreturnsi.e.interestreturnappliedbyBendigoandAdelaideBankLimitedforadeposit,

• minusanycostsoffundsi.e.interestappliedbyBendigoandAdelaideBankLimitedtofundaloan.

Note:Inverysimplifiedterms,currently,depositreturnmeanstheinterestBendigoandAdelaideBankLimited

gets when it invests the money the customer deposits with it. The cost of funds means the interest Bendigo and

AdelaideBankLimitedpayswhenitborrowsthemoneytogiveacustomeraloan.From1July2016,bothwill

meanthecostforBendigoandAdelaideBankLimitedtoborrowthemoneyinthemarket.

Products and services on which margin is paid include variable rate deposits and variable rate home loans. From

1July2016,examplesincludeBendigoBankbrandedatcalldeposits,termdepositsandhomeloans.




b) Revenue (continued)

Margin(continued)

For those products and services on which margin is paid, the company is entitled to a share of the margin earned

byBendigoandAdelaideBankLimited(i.e.incomeadjustedforBendigoandAdelaideBankLimited’sinterest

expenseandinterestincomereturn).However,ifthisreflectsaloss,thecompanyincursashareofthatloss.

Commission

Commission is a fee paid for products and services sold. It may be paid on the initial sale or on an ongoing basis.

Commissionispayableonthesaleofaninsuranceproductsuchashomecontents.Examplesofproductsand

servicesonwhichongoingcommissionsarepaidincludeleasingandSandhurstTrusteesLimitedproducts.This

currentlyalsoincludesBendigoBankbrandedfixedratehomeloansandtermdepositsofmorethan90days,but

thesewillbecomemarginproductsfrom1July2016.

Fee income

Feeincomeisashareofwhatiscommonlyreferredtoas‘bankfeesandcharges’chargedtocustomersby

BendigoBankGroupentitiesincludingfeesforloanapplicationsandaccounttransactions.

Ability to change financial return

Underthefranchiseagreement,BendigoandAdelaideBankLimitedmaychangetheformandamountoffinancial

returnthatthecompanyreceives.Thereasonsitmaymakeachangeincludechangesinindustryoreconomic

conditionsorchangesinthewayBendigoandAdelaideBankLimitedearnsrevenue.

The change may be to the method of calculation of margin, the amount of margin, commission and fee income or

a change of a margin to a commission or vice versa. This may affect the amount of revenue the company receives

on a particular product or service. The effect of the change on the revenue earned by the company is entirely

dependent on the change.

The change may be to the method of calculation of margin, the amount of margin, commission and fee income or

a change of a margin to a commission or vice versa. This may affect the amount of revenue the company receives

on a particular product or service. The effect of the change on the revenue earned by the company is entirely

dependent on the change.

IfBendigoandAdelaideBankLimitedmakesachangetothemarginorcommissiononcorebankingproducts

andservices,itmustnotreducethemarginandcommissionthecompanyreceivesoncorebankingproductsand

servicesBendigoandAdelaideBankLimitedattributestothecompanytolessthan50%(onanaggregatebasis)

ofBendigoandAdelaideBankLimited’smarginatthattime.Forotherproductsandservices,thereisnorestriction

onthechangeBendigoandAdelaideBankLimitedmaymake.

BendigoandAdelaideBankLimitedmustgivethecompany30days’noticebeforeitchangestheproductsand

services on which margin, commission or fee income is paid, the method of calculation of margin and the amount

of margin, commission or fee income.

Monitoring and changing financial return

BendigoandAdelaideBankLimitedmonitorsthedistributionoffinancialreturnbetweenCommunity Bank®

companiesandBendigoandAdelaideBankLimitedonanongoingbasis.

Overall,BendigoandAdelaideBankLimitedhasmadeitclearthattheCommunity Bank® model is based on the

principleofsharedrewardforsharedeffort.Inparticular,inrelationtocorebankingproductsandservices,theaim

istoachieveanequalshareofBendigoandAdelaideBankLimited’smargin.




b) Revenue (continued)

Monitoringandchangingfinancialreturn(continued)

AsdiscussedaboveinrelationtoProjectHorizon,amongotherthings,therewillbechangesinthefinancialreturn

for Community Bank®companiesfrom1July2016.Thisincludes50%shareofmarginoncorebankingproducts,

allcorebankingproductsbecomemarginproductsandafundstransferpricingmodelwillbeusedforthemethod

of calculation of the cost of funds, deposit return and margin.

c) Income tax

Current tax

Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the

taxable profit or loss for the period. It is calculated using tax rates and tax laws that have been enacted or

substantivelyenactedbyreportingdate.Currenttaxforcurrentandpriorperiodsisrecognisedasaliability(or

asset)totheextentthatitisunpaid(orrefundable).

Deferred tax

Deferred tax is accounted for using the balance sheet liability method on temporary differences arising from

differences between the carrying amount of assets and liabilities in the financial statements and the corresponding

tax base of those items.

In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets

are recognised to the extent that it is probable that sufficient taxable amounts will be available against which

deductibletemporarydifferencesorunusedtaxlossesandtaxoffsetscanbeutilised.However,deferredtax

assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial

recognitionofassetsandliabilities(otherthanasaresultofabusinesscombination)whichaffectsneither

taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable

temporary differences arising from goodwill.

Deferredtaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplytotheperiod(s)when

theassetandliabilitygivingrisetothemarerealisedorsettled,basedontaxrates(andtaxlaws)thathavebeen

enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities reflects the tax

consequences that would follow from the manner in which the consolidated entity expects, at the reporting date, to

recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax and

when the balances relate to taxes levied by the same taxation authority and the company entity intends to settle

its tax assets and liabilities on a net basis.

Current and deferred tax for the period

CurrentanddeferredtaxisrecognisedasanexpenseorincomeintheStatementofProfitorLossandOther

Comprehensive Income, except when it relates to items credited or debited to equity, in which case the deferred

tax is also recognised directly in equity, or where it arises from initial accounting for a business combination, in

whichcaseitistakenintoaccountinthedeterminationofgoodwillorexcess.




d) Employee entitlements

Provisionismadeforthecompany’sliabilityforemployeebenefitsarisingfromservicesrenderedbyemployees

tobalancedate.Employeebenefitsthatareexpectedtobesettledwithinoneyearhavebeenmeasuredatthe

amountsexpectedtobepaidwhentheliabilityissettled,plusrelatedon-costs.Employeebenefitspayablelater

than one year have been measured at the present value of the estimated future cash outflows to be made for

those benefits.

The company contributes to a defined contribution plan. Contributions to employee superannuation funds are

charged against income as incurred.

e) Cash and cash equivalents

ForthepurposesoftheStatementofCashFlows,cashincludescashonhandandinbanksandinvestmentsin

moneymarketinstruments,netofoutstandingbankoverdrafts.Bankoverdraftsareshownwithinborrowingsin

current liabilities on the Balance Sheet.

f) Trade receivables and payables

Receivablesarecarriedattheiramountsdue.Thecollectabilityofdebtsisassessedatbalancedateandspecific

provisionismadeforanydoubtfulaccounts.Liabilitiesfortradecreditorsandotheramountsarecarriedatcost

that is the fair value of the consideration to be paid in the future for goods and services received, whether or not

billed to the company.

g) Property, plant and equipment

Plant and equipment, leasehold improvements and equipment under finance lease are stated at cost less

accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition

of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined

by discounting the amounts payable in the future to their present value as at the date of acquisition.

Depreciation is provided on property, plant and equipment, including freehold buildings but excluding land.

Depreciation is calculated on a straight line basis so as to write off the net cost of each asset over its expected

usefullifetoitsestimatedresidualvalue.Leaseholdimprovementsaredepreciatedattherateequivalentto

the available building allowance using the straight line method. The estimated useful lives, residual values and

depreciation method are reviewed at the end of each annual reporting period.

The following estimated useful lives are used in the calculation of depreciation:

• leaseholdimprovements 40 years

• plantandequipment 2.5-40years

• furnitureandfittings 4-40years

h) Intangibles

ThefranchisefeepaidtoBendigoandAdelaideBankLimitedhasbeenrecordedatcostandisamortisedona

straight line basis over the life of the franchise agreement.

TherenewalprocessingfeepaidtoBendigoandAdelaideBankLimitedwhenrenewingthefranchiseagreement

has also been recorded at cost and is amortised on a straight line basis over the life of the franchise agreement.




i) Payment terms

Receivablesandpayablesarenoninterestbearingandgenerallyhavepaymenttermsofbetween30and90days.

j) Borrowings

All loans are initially measured at the principal amount. Interest is recognised as an expense as it accrues.

k) Financial instruments

Recognitionandinitialmeasurement

Financial instruments, incorporating financial assets and financial liabilities are recognised when the entity

becomes a party to the contractual provisions of the instrument.

Financial instruments are initially measured at fair value plus transaction costs. Financial instruments are

classified and measured as set out below.

Derecognition

Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is

transferredtoanotherpartywherebytheentitynolongerhasanysignificantcontinuinginvolvementintherisks

and benefits associated with the asset.

Classification and subsequent measurement

(i) Loansandreceivables

Loansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenot

quotedinanactivemarketandaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestrate

method.

(ii) Held-to-maturityinvestments

Held-to-maturityinvestmentsarenon-derivativefinancialassetsthathavefixedmaturitiesandfixedor

determinablepayments,anditistheentity’sintentiontoholdtheseinvestmentstomaturity.Theyare

subsequently measured at amortised cost using the effective interest rate method.

(iii)Available-for-salefinancialassets

Available-for-salefinancialassetsarenon-derivativefinancialassetsthatareeithernotsuitabletobeclassified

into other categories of financial assets due to their nature, or they are designated as such by management.

They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or

determinable payments.

Theyaresubsequentlymeasuredatfairvaluewithchangesinsuchfairvalue(i.e.gainsorlosses)recognised

intheStatementofProfitorLossandOtherComprehensiveIncome.Available-for-salefinancialassetsare

includedinnon-currentassetsexceptwheretheyareexpectedtobesoldwithin12monthsaftertheendof

the reporting period. All other financial assets are classified as current assets.

(iv)Financialliabilities

Non-derivativefinancialliabilities(excludingfinancialguarantees)aresubsequentlymeasuredatamortisedcost

using the effective interest rate method.




k) Financial instruments (continued)

Impairment

Ateachreportingdate,theentityassesseswhetherthereisobjectiveevidencethatafinancialinstrumenthas

beenimpaired.ImpairmentlossesarerecognisedintheStatementofProfitorLossandOtherComprehensive

Income.

l) Leases

Leasesoffixedassetswheresubstantiallyalltherisksandbenefitsincidentaltotheownershipoftheasset,

but not the legal ownership are transferred to the company are classified as finance leases. Finance leases are

capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased

propertyorthepresentvalueoftheminimumleasepayments,includinganyguaranteedresidualvalues.Lease

payments are allocated between the reduction of the lease liability and the lease interest expense for the period.

Leasedassetsaredepreciatedonastraight-linebasisovertheshorteroftheirestimatedusefullivesorthelease

term.Leasepaymentsforoperatingleases,wheresubstantiallyalltherisksandbenefitsremainwiththelessor,

arechargedasexpensesintheperiodsinwhichtheyareincurred.Leaseincentivesunderoperatingleasesare

recognisedasaliabilityandamortisedonastraight-linebasisoverthelifeoftheleaseterm.

m) Provisions

Provisionsarerecognisedwhentheeconomicentityhasalegal,equitableorconstructiveobligationtomakea

future sacrifice of economic benefits to other entities as a result of past transactions of other past events, it is

probable that a future sacrifice of economic benefits will be required and a reliable estimate can be made of the

amount of the obligation.

A provision for dividends is not recognised as a liability unless the dividends are declared, determined or publicly

recommended on or before the reporting date.

n) Contributed equity

Ordinary shares are recognised at the fair value of the consideration received by the company. Any transaction

costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds

received.

o) Earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the company, excluding

any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares

outstandingduringthefinancialyear,adjustedforbonuselementsinordinarysharesissuedduringtheyear.

p) Goods and Services Tax

Revenues,expensesandassetsarerecognisednetoftheamountofGoodsandServicesTax(GST),exceptwhere

theamountofGSTincurredisnotrecoverablefromthetaxationauthority.Inthesecircumstances,theGSTis

recognised as part of the cost of acquisition of the asset or as part of the expense.

ReceivablesandpayablesarestatedwiththeamountofGSTincluded.ThenetamountofGSTrecoverablefrom,or

payable to, the taxation authority is included as part of receivables or payables in the Balance Sheet. Cash flows

are included in the Statement of Cash Flows on a gross basis.

TheGSTcomponentsofcashflowsarisingfrominvestingandfinancingactivitieswhicharerecoverablefrom,or

payable to, the taxation authority are classified as operating cash flows.



Note2.FinancialriskmanagementThecompany’sactivitiesexposeittoalimitedvarietyoffinancialrisks:marketrisk(includingcurrencyrisk,fair

valueinterestriskandpricerisk),creditrisk,liquidityriskandcashflowinterestraterisk.Thecompany’soverall

riskmanagementprogramfocusesontheunpredictabilityoffinancialmarketsandseekstominimisepotential

adverse effects on the financial performance of the entity. The entity does not use derivative instruments.

Riskmanagementiscarriedoutdirectlybytheboardofdirectors.

(i)Marketrisk

The company has no exposure to any transactions denominated in a currency other than Australian dollars.

(ii)Pricerisk

Thecompanyisnotexposedtoequitysecuritiespriceriskasitdoesnotholdinvestmentsforsaleoratfairvalue.

Thecompanyisnotexposedtocommoditypricerisk.

(iii)Creditrisk

Thecompanyhasnosignificantconcentrationsofcreditrisk.Ithaspoliciesinplacetoensurethatcustomers

haveanappropriatecredithistory.Thecompany’sfranchiseagreementlimitsthecompany’screditexposuretoone

financialinstitution,beingBendigoandAdelaideBankLimited.

(iv)Liquidityrisk

Prudentliquiditymanagementimpliesmaintainingsufficientcashandmarketablesecuritiesandtheavailability

offundingfromcreditfacilities.ThecompanybelievesthatitssoundrelationshipwithBendigoandAdelaideBank

Limitedmitigatesthisrisksignificantly.

(v)Cashflowandfairvalueinterestraterisk

Interest-bearingassetsareheldwithBendigoandAdelaideBankLimitedandsubjecttomovementsinmarket

interest.Interest-rateriskcouldalsoarisefromlong-termborrowings.Borrowingsissuedatvariableratesexpose

thecompanytocashflowinterest-raterisk.ThecompanybelievesthatitssoundrelationshipwithBendigoand

AdelaideBankLimitedmitigatesthisrisksignificantly.

(vi)Capitalmanagement

Theboard’spolicyistomaintainastrongcapitalbasesoastosustainfuturedevelopmentofthecompany.The

board of directors monitor the return on capital and the level of dividends to shareholders. Capital is represented

by total equity as recorded in the Balance Sheet.

In accordance with the franchise agreement, in any 12 month period, the funds distributed to shareholders shall

not exceed the distribution limit:

The distribution limit is the greater of:

(a)20%oftheprofitorfundsofthefranchiseeotherwiseavailablefordistributiontoshareholdersinthat12

month period; and

(b) subjecttotheavailabilityofdistributableprofits,therelevantrateofreturnmultipliedbytheaveragelevelof

share capital of the franchisee over that 12 month period where the relevant rate of return is equal to the

weightedaverageinterestrateon90daybankbillsoverthat12monthperiodplus5%.



Note2.Financialriskmanagement(continued)

The board is managing the growth of the business in line with this requirement. There are no other externally

imposed capital requirements, although the nature of the company is such that amounts will be paid in the form

of charitable donations and sponsorship. Charitable donations and sponsorship paid for the year ended 30 June

2015canbeseenintheStatementofProfitorLossandOtherComprehensiveIncome.

Therewerenochangesinthecompany’sapproachtocapitalmanagementduringtheyear.

Note3.CriticalaccountingestimatesandjudgementsEstimatesandjudgementsarecontinuallyevaluatedandarebasedonhistoricalexperienceandotherfactors,

including expectations of future events that may have a financial impact on the entity and that are believed to be

reasonable under the circumstances.

Thecompanymakesestimatesandassumptionsconcerningthefuture.Theresultingaccountingestimateswill,by

definition, seldom equal the related actual results.

Managementhasidentifiedthefollowingcriticalaccountingpoliciesforwhichsignificantjudgements,estimates

and assumptions are made. Actual results may differ from these estimates under different assumptions and

conditions and may materially affect financial results or the financial position reported in future periods.

Further details of the nature of these assumptions and conditions may be found in the relevant notes to the

financial statements.

Taxation

Judgement is required in assessing whether deferred tax assets and certain tax liabilities are recognised on

thebalancesheet.Deferredtaxassets,includingthosearisingfromun-recoupedtaxlosses,capitallossesand

temporarydifferences,arerecognisedonlywhereitisconsideredmorelikelythannotthattheywillberecovered,

which is dependent on the generation of sufficient future taxable profits.

Assumptionsaboutthegenerationoffuturetaxableprofitsdependonmanagement’sestimatesoffuturecash

flows. These depend on estimates of future sales volumes, operating costs, capital expenditure, dividends and

other capital management transactions. Judgements are also required about the application of income tax

legislation.

Thesejudgementsandassumptionsaresubjecttoriskanduncertainty.Thereisthereforeapossibilitythat

changes in circumstances will alter expectations, which may impact the amount of deferred tax assets and

deferred tax liabilities recognised on the balance sheet and the amount of other tax losses and temporary

differences not yet recognised. In such circumstances, some or all of the carrying amount of recognised deferred

taxassetsandliabilitiesmayrequireadjustment,resultingincorrespondingcreditorchargetotheStatementof

ProfitorLossandOtherComprehensiveIncome.

Estimationofusefullivesofassets

The estimation of the useful lives of assets has been based on historical experience and the condition of the

assetisassessedatleastonceperyearandconsideredagainsttheremainingusefullife.Adjustmentstouseful

lives are made when considered necessary.



Note3.Criticalaccountingestimatesandjudgements(continued)

Impairment of assets

At each reporting date, the company reviews the carrying amounts of its tangible and intangible assets that have

an indefinite useful life to determine whether there is any indication that those assets have suffered an impairment

loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the

extentoftheimpairmentloss(ifany).Wheretheassetdoesnotgeneratecashflowsthatareindependentfrom

otherassets,theconsolidatedentityestimatestherecoverableamountofthecash-generatingunittowhichthe

asset belongs.

Recoverableamountisthehigheroffairvaluelesscoststosellandvalueinuse.Inassessingvalueinuse,the

estimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectscurrent

marketassessmentsofthetimevalueofmoneyandtherisksspecifictotheassetforwhichtheestimatesof

futurecashflowshavenotbeenadjusted.

Iftherecoverableamountofanasset(orcash-generatingunit)isestimatedtobelessthanitscarryingamount,

thecarryingamountoftheasset(cash-generatingunit)isreducedtoitsrecoverableamount.Animpairmentloss

is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the

impairment loss is treated as a revaluation decrease.

Whereanimpairmentlosssubsequentlyreverses,thecarryingamountoftheasset(cash-generatingunit)is

increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying

amount does not exceed the carrying amount that would have been determined had no impairment loss been

recognisedfortheasset(cash-generatingunit)inprioryears.Areversalofanimpairmentlossisrecognised

in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the reversal of the

impairment loss is treated as a revaluation increase.

2015 2014 $ $

Note4.RevenuefromordinaryactivitiesOperating activities:

- services commissions 683,755 617,822

Non-operatingactivities:

- interest received 90 41

Total revenues from ordinary activities 683,845 617,863

Note5.Expenses Depreciationofnon-currentassets:

-plantandequipment 5,252 7,032

-leaseholdimprovements 9,603 10,905

-motorvehicle 4,382 4,382



Note5.Expenses(continued)

Amortisationofnon-currentassets:

-franchiseagreement 2,291 2,242

-establishmentfee - 3,333

-franchiserenewalfee 11,452 9,544

32,980 37,438

Finance costs:

- interest paid 4,504 5,924

Bad debts 1,520 723

Note6.IncometaxexpenseThe components of tax expense comprise:

-Movementindeferredtax (4,004) (2,071)

-Adjustmenttodeferredtaxtoreflectchangetotaxrateinfutureperiods 9,767 -

-Recoupmentofprioryeartaxlosses 16,486 8,409

22,249 6,338

The prima facie tax on profit from ordinary activities before

income tax is reconciled to the income tax expense as follows

Operatingprofit 41,123 17,459

Primafacietaxonprofitfromordinaryactivitiesat30% 12,337 5,238

Add tax effect of:

-non-deductibleexpenses 145 1,100

-timingdifferenceexpenses 4,004 2,072

16,486 8,410

Movementindeferredtax (4,004) (2,072)

Adjustmenttodeferredtaxtoreflectchangeoftaxratein

futureperiods 9,767 -

Under/(Over)provisionofincometaxintheprioryear - -

22,249 6,338

Note7.CashandcashequivalentsCashatbankandonhand 1,136 20,153

1,136 20,153

2015 2014 $ $



Note7.Cashandcashequivalents(continued)

Note7.(a)Reconciliationtocashflowstatement

The above figures reconcile to the amount of cash shown in the

statement of cash flows at the end of the financial year as follows:

Cashatbankandonhand 1,136 20,153

Bankoverdraft 13 (54,757) (93,759)

(53,621) (73,606)

Note8.Tradeandotherreceivables Tradereceivables 56,382 47,398

Prepayments 11,322 9,066

Otherreceivablesandaccruals 3,276 219

70,980 56,683

Note9.Property,plantandequipmentLeaseholdimprovements

Atcost 177,020 177,020

Lessaccumulateddepreciation (88,648) (79,045)

88,372 97,975

Plant and equipment

Atcost 75,726 75,287


16,426 21,239

Motor vehicles

Atcost 35,058 35,058


15,969 20,351

Total written down amount 120,767 139,565

Movements in carrying amounts:

Leaseholdimprovements

Carryingamountatbeginning 97,975 108,880

Less:depreciationexpense (9,603) (10,905)

Carrying amount at end 88,372 97,975

Note 2015 2014 $ $



Note9.Property,plantandequipment(continued)

Plant and equipment


Additions 439 363



Motor vehicles





Note 10. Intangible assets Franchise fee

At cost 21,453 21,453

Less:accumulatedamortisation (14,200) (11,909)

7,253 9,544

Establishmentfee

At cost 100,000 100,000


- -

Renewalprocessingfee

Atcost 57,260 57,260


36,265 47,717


2015 2014 $ $



Note 11. TaxDeferred tax assets

-accruals 1,654 -

-employeeprovisions 7,512 5,644

-taxlossescarriedforward 176,414 202,185

185,580 207,829

Net deferred tax asset 185,580 207,829

Movement in deferred tax charged to Statement of Profit or

Loss and Other Comprehensive Income 22,249 6,338

Note 12. Trade and other payables Current:

Tradecreditors 18,866 16,515

Othercreditorsandaccruals 14,511 34,296

Sundrycreditor-BABL 20,995 20,995

54,372 71,806

Non-Current:

Sundrycreditor-BABL - 20,995

- 20,995

Note 13. Borrowings Current:

Bankoverdrafts 54,757 93,759

Chattelmortgage 18 6,057 8,496

60,814 102,255

Non-Current:

Chattelmortgage 18 - 6,057

- 6,057

Theapprovedoverdraftlimitis$180,000.Interestischargedatarateof6.00%.Thedebtissecuredbyafixed

andfloatingchargeoverthecompany’sassetsandissubjecttoquarterlyreviewsbyBendigoBank.

TheChattelmortgageisafinanceleaseof$43,707,whichcommencedinFebruary2011,isa5-yearlease.

Interestisrecognisedatanaveragerateof8.12%(2014:8.12%).

Note 2015 2014 $ $



Note 14. Provisions Current:

Provisionforannualleave 13,380 10,253

13,380 10,253

Non-Current:

Provision for long service leave 12,977 8,561

Note 15. Contributed equity898,584ordinarysharesfullypaid(2014:898,584) 898,584 898,584

Less:equityraisingexpenses (34,210) (34,210)

864,374 864,374

Rightsattachedtoshares

(a)Votingrights

Subjecttosomelimitedexceptions,eachmemberhastherighttovoteatageneralmeeting.

Onashowofhandsorapoll,eachmemberattendingthemeeting(whethertheyareattendingthemeeting

inpersonorbyattorney,corporaterepresentativeorproxy)hasonevote,regardlessofthenumberofshares

held.However,whereapersonattendsameetinginpersonandisentitledtovoteinmorethanonecapacity

(forexample,thepersonisamemberandhasalsobeenappointedasproxyforanothermember)thatperson

may only exercise one vote on a show of hands. On a poll, that person may exercise one vote as a member and

one vote for each other member that person represents as duly appointed attorney, corporate representative or

proxy.

The purpose of giving each member only one vote, regardless of the number of shares held, is to reflect the

nature of the company as a community based company, by providing that all members of the community who

have contributed to the establishment and ongoing operation of the Community Bank® branch have the same

ability to influence the operation of the company.

(b)Dividends

Generally,dividendsarepayabletomembersinproportiontotheamountofthesharecapitalpaiduponthe

sharesheldbythem,subjecttoanyspecialrightsandrestrictionsforthetimebeingattachingtoshares.The

franchiseagreementwithBendigoandAdelaideBankLimitedcontainsalimitonthelevelofprofitsorfunds

that may be distributed to shareholders. There is also a restriction on the payment of dividends to certain

shareholdersiftheyhaveaprohibitedshareholdinginterest(seebelow).

(c)Transfer

Generally,ordinarysharesarefreelytransferable.However,thedirectorshaveadiscretiontorefusetoregister

a transfer of shares.

Subjecttotheforegoing,shareholdersmaytransfersharesbyapropertransfereffectedinaccordancewiththe

company’sconstitutionandtheCorporationsAct2001.

2015 2014 $ $



Note15.Contributedequity(continued)

Prohibited shareholding interest

A person must not have a prohibited shareholding interest in the company.

In summary, a person has a prohibited shareholding interest if any of the following applies:

• Theycontrolorown10%ormoreofthesharesinthecompany(the“10%limit”).

• Intheopinionoftheboardtheydonothaveacloseconnectiontothecommunityorcommunitiesinwhichthe

companypredominantlycarriesonbusiness(the“closeconnectiontest”).

• Wherethepersonisashareholder,afterthetransferofsharesinthecompanytothatpersonthenumberof

shareholdersinthecompanyis(orwouldbe)lowerthanthebasenumber(the“basenumbertest”).Thebase

numberis266.Asatthedateofthisreport,thecompanyhad296shareholders.

Aswithvotingrights,thepurposeofthisprohibitedshareholdingprovisionistoreflectthecommunity-basednature

of the company.

Whereapersonhasaprohibitedshareholdinginterest,thevotinganddividendrightsattachingtothesharesin

whichtheperson(andhisorherassociates)haveaprohibitedshareholdinginterest,aresuspended.

Theboardhasthepowertorequestinformationfromapersonwhohas(orissuspectedbytheboardofhaving)

a legal or beneficial interest in any shares in the company or any voting power in the company, for the purpose of

determining whether a person has a prohibited shareholding interest. If the board becomes aware that a member

hasaprohibitedshareholdinginterest,itmustserveanoticerequiringthemember(orthemember’sassociate)to

dispose of the number of shares the board considers necessary to remedy the breach. If a person fails to comply

withsuchanoticewithinaspecifiedperiod(thatmustbebetweenthreeandsixmonths),theboardisauthorised

to sell the specified shares on behalf of that person. The holder will be entitled to the consideration from the sale

of the shares, less any expenses incurred by the board in selling or otherwise dealing with those shares.

Intheconstitution,membersacknowledgeandrecognisethattheexerciseofthepowersgiventotheboardmay

cause considerable disadvantage to individual members, but that such a result may be necessary to enforce the

prohibition.

2015 2014 $ $

Note16.AccumulatedlossesBalanceatthebeginningofthefinancialyear (602,810) (569,002)

Netprofitfromordinaryactivitiesafterincometax 18,874 11,121

Dividendspaidorprovidedfor - (44,929)

Balance at the end of the financial year (583,936) (602,810)



Note17.Statementofcashflows Reconciliationofprofitfromordinaryactivitiesaftertaxtonetcash

provided by operating activities

Profitfromordinaryactivitiesafterincometax 18,874 11,121

Non cash items:

-depreciation 19,237 22,319

-amortisation 13,743 15,119

Changes in assets and liabilities:

-(increase)/decreaseinreceivables (14,296) 3,709

-(increase)/decreaseinotherassets 22,249 6,338

-increase/(decrease)inpayables (38,429) (9,790)

-increase/(decrease)inprovisions 7,543 6,905

Net cash flows provided by operating activities 28,921 55,721

Note18.LeasesFinance lease commitments

Payable-minimumleasepayments:

-notlaterthan12months 6,244 9,366

-between12monthsand5years - 6,244

Minimum lease payments 6,244 15,610

Lessfuturefinancecharges (187) (1,057)

Present value of minimum lease payments 6,057 14,553

Operating lease commitments

Non-cancellableoperatingleasescontractedforbutnotcapitalised

in the financial statements

Payable-minimumleasepayments:

-notlaterthan12months 60,835 58,495

-between12monthsand5years 136,878 219,356

197,713 277,851

Thebusinesspremisesleaseisanon-cancellableleasewithafive-yearterm,withrentpayablemonthlyin

advance.

2015 2014 $ $



Note19.Auditor’sremunerationAmounts received or due and receivable by the auditor of the company for:

-auditandreviewservices 4,700 3,850

-nonauditservices 3,748 2,197

8,448 6,047

Note 20. Director and related party disclosuresNo director of the company receives remuneration for services as a company director or committee member.

There are no executives within the company whose remuneration is required to be disclosed.

Detailedremunerationdisclosuresareprovidedintheremunerationreport,includedaspartofthedirectors’

report.

Detailedshareholdingdisclosuresareprovidedintheremunerationreport,includedaspartofthedirectors’

report.

2015 2014 $ $

Note 21. Dividends paid or provideda. Dividends paid during the year

Current year dividend

Unfranked dividend - Nil cents (2014: 5 cents) per share - 44,929

Note22.Earningspershare

2015 $

2014 $

(a) Profit attributable to the ordinary equity holders of the company used

in calculating earnings per share18,874 11,121

Number Number

(b) Weightedaveragenumberofordinarysharesusedasthe

denominator in calculating basic earnings per share898,584 898,584

Note23.EventsoccurringafterthereportingdateThere have been no events after the end of the financial year that would materially affect the financial statements.

2015 2014 $ $



Note 24. Contingent liabilities and contingent assetsThere were no contingent liabilities or contingent assets at the date of this report to affect the financial

statements.

Note 25. Segment reportingThe economic entity operates in the service sector where it facilitates Community Bank® services in Nightcliff and

surrounding suburbs of Darwin, Northern Territory pursuant to a franchise agreement with Bendigo and Adelaide

BankLimited.

Note26.Registeredoffice/PrincipalplaceofbusinessThe entity is a company limited by shares, incorporated and domiciled in Australia. The registered office and

principal place of business is:

Registered Office Principal Place of Business

40 Progress Drive

NightcliffNT0810

40 Progress Drive

NightcliffNT0810

Note27.Financialinstruments

Financial Instrument Composition and Maturity Analysis

The table below reflects the undiscounted contractual settlement terms for all financial instruments, as well as the

settlement period for instruments with a fixed period of maturity and interest rate.

Financial instrument

Floating interestFixed interest rate maturing in Non interest

bearingWeighted average1 year or less Over 1 to 5 years Over 5 years

2015$

2014$

2015$

2014$

2015$

2014$

2015$

2014$

2015$

2014$

2015%

2014%

Financial assets

Cash and cash equivalents

886 19,903 - - - - - - 250 250 0.55 0.42

Receivables - - - - - - - - 56,382 47,398 N/A N/A

Financial liabilities

Interest bearing liabilities

- - 6,244 9,366 - 6,244 - - - - 8.12 8.12

Bank overdraft

54,757 93,759 4.66 6.20

Payables - - - - - - - - 18,866 16,515 N/A N/A



Note27.Financialinstruments(continued)

NetFairValues

The net fair values of financial assets and liabilities approximate the carrying values as disclosed in the balance

sheet. The company does not have any unrecognised financial instruments at the year end.

CreditRisk

Themaximumexposuretocreditriskatbalancedatetorecognisedfinancialassetsisthecarryingamountof

those assets as disclosed in the balance sheet and notes to the financial statements.

Therearenomaterialcreditriskexposurestoanysingledebtororgroupofdebtorsunderfinancialinstruments

entered into by the economic entity.

InterestRateRisk

Interestrateriskreferstotheriskthatthevalueofafinancialinstrumentorcashflowsassociatedwiththe

instrumentwillfluctuateduetochangesinmarketinterestrates.Interestrateriskarisesfromtheinterestbearing

financialassetsandliabilitiesinplacesubjecttovariableinterestrates,asoutlinedabove.

Sensitivity Analysis

Thecompanyhasperformedsensitivityanalysisrelatingtoitsexposuretointerestrateriskatbalancedate.

This sensitivity analysis demonstrates the effect on the current year results and equity which could result from a

change in interest rates.

As at 30 June 2015, the effect on profit and equity as a result of changes in interest rate, with all other variables

remaining constant would be as follows:

2015 $

2014 $

Changeinprofit/(loss)

Increaseininterestrateby1% (601) (895)

Decreaseininterestrateby1% 601 895

Change in equity

Increaseininterestrateby1% (601) (895)

Decreaseininterestrateby1% 601 895


Directors’declarationInaccordancewitharesolutionofthedirectorsofNightcliffCommunityEnterprisesLimited,westatethat:

In the opinion of the directors:

(a) thefinancialstatementsandnotesofthecompanyareinaccordancewiththeCorporationsAct2001,

including:

(i) givingatrueandfairviewofthecompany’sfinancialpositionasat30June2015andofitsperformance

for the financial year ended on that date; and

(ii) complyingwithAccountingStandards,theCorporationsRegulations2001andothermandatoryprofessional

reporting requirements; and

(b) therearereasonablegroundstobelievethatthecompanywillbeabletopayitsdebtsasandwhenthey

become due and payable.

(c) theauditedremunerationdisclosuressetoutintheremunerationreportsectionofthedirectors’reportcomply

withAccountingStandardAASB124RelatedPartyDisclosuresandtheCorporationsRegulations2001.

This declaration is made in accordance with a resolution of the board of directors.

James Keith McDougall,

Chairman

Signed on the 10 October 2015.


Independent audit report


Independent audit report (continued)

bendigobank.com.au

Nightcliff Community Bank® Branch 1/40 Progress Drive, Nightcliff NT 0810Phone: (08) 8948 4485 Fax: (08) 8948 4459

Franchisee: Nightcliff Community Enterprises LimitedUnit 1‚ 13 Travers Street, Coconut Grove NT 0810Phone: (08) 8948 4485 Fax: (08) 8948 4459ABN: 64 128 953 748www.bendigobank.com.au/nightcliff(BMPAR15109) (09/15)

Annual Report 2015 - Bendigo Bank · Annual report Nightcliff Community Enterprises Limited 5 Interest in the Community Bank® model remains strong, with 20 Community Bank® sites

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