Annual Report 2015 - Bendigo Bank · 2015 ABN 33 120 578 565 North Burnett Community Enterprises...

Mundubbera Community Bank®Branch

Annual Report2015

ABN 33 120 578 565

North Burnett CommunityEnterprises Limited

Annual report North Burnett Community Enterprises Limited 1

Contents

Chairman’s report 2

Manager’s report 3

Directors’ report 4

Auditor’s independence declaration 10

Financial statements 11

Notes to the financial statements 15

Directors’ declaration 37

Independent audit report 38

Annual report North Burnett Community Enterprises Limited2

For year ending 30 June 2015

The past 12 months has seen continued business growth for North Burnett Community Enterprises Limited

through its Mundubbera Community Bank® Branch and the Gayndah agency. The end of year results are very

pleasing, with the headline numbers being:

• Communitydividend$23,939andprovisionofprizesandmarqueesforcommunityuse

• Adecreaseinborrowingsby$62,889

• Abeforeincometaxprofitof$62,905

• Anincreaseourbookbalance(loans,depositsetc)of$5millionto$59.8million.

Thecommunitydividendof$23,939hasdirectlybenefited:ninelocalschoolsthroughthe‘dreamanddo’

projects; the Gayndah, Mundubbera, Eidsvold, and Monto show societies; patient transport; and numerous local

organisations.Thisdemonstratestheprimaryreasonforourbranch’sexistence,thatistobenefitthelocal

community.

TheBoardhasgrowninbothexperienceandnumbersthroughouttheyear,withtheadditionofJohanSimonand

SuzieKeunetotheBoard.WecontinuetolooktorecruitnewDirectorstotheBoard.

OneoftheBoard’sstatedgoalshasbeentoreturnadividendtoshareholders,thisobjectiveisgettingcloseras

thebusinesscontinuestogrowanddebtisreduced.Tooffsetthelackofdividendweissuedourfirstshareholder

benefitscard.IfyouhavenotuseditIwouldencourageyoutoo,byusingityoubenefitthecommunityaswellas

local businesses.

ManythanksgoagaintoourdedicatedBranchManagerandstaff,whocontinuetobethevisiblefronttothe

companyandthebranch.Theyworktirelesslytoprovidethecustomerservicethatwealldesirefromafullservice

bankandaproductrangeyouwouldexpectfromAustralia’sfifthlargestbank.

WebelievethatMundubberaCommunity Bank®BranchandGayndahagencywillcontinuetobenefityourtownand

yourregionformanyyearstocomeandIencourageeverybodytosupportit.

ItisimportanttorememberwhytheMundubberaCommunity Bank® Branch and the Gayndah agency were

establishedinthefirstplace,sothattheNorthBurnettcanhaveavitalbusinesswhosepurposeistobenefitour

community and our patient investors.

OnceagainIaskthatshareholderswhodonotbankwithusconsiderusintheirnextbankingdeal,orevenbetter,

transfer their business to Mundubbera Community Bank®Branch.Ourfriendlyandhelpfulbankstaffwillbehappy

toassistyouwithallyourbankingneeds.

Paul Dare

Chairman

Chairman’sreport


For year ending 30 June 2015

Aftersomedevastatingfloodsin2013wefollowedonwiththedriestperiodrecordedforover100yearsandpoor

cattleprices.Wehaveagainhadtoproveourresilience,andwehave.Wehavewonderfulcommunityspiritand

support,andthishelpsuscontinuetomoveforwardinspiteofnature’shurdles.

Ourbranchperformanceexceededourincome/expensebudgetsdespitethesechallenges.Thiswasapleasing

resultgiventheconditionslocally,regionallyandnationallyinthebankingindustry.Ourstrengthisourcommitted

anddedicatedstaffwhohaveagenuinedesiretohelpourcustomersandtodo“thatbitextra”.Ourindustry/

community recognition continues to grow as we are able to partner with more customers in the Central and North

Burnett, and this is leading to some great customer advocacy, and resultant portfolio growth.

The collaboration between the Board and the branch is a wonderful and evolving scenario, we all support our

communitybetterwiththis“workingtogether”model.Ourcommunityprojectlistisbecominganimpressiveand

large resume we are all proud of.

DiversificationofourportfoliotoincludeourdevelopingRuralBankexposure,helpsmitigateourrisktosingle

events and adverse trends.

Overallwehavehadaverygoodresultdespitesomeindustrychallengesduringtheyear.Iwouldliketothankour

wonderful loyal customers, and the dedicated branch staff for this result.

Wearelookingforwardtobetterseasonalconditionsthisyearandforecastcattlepricesarelookingpleasingat

this time.

Rob Watt

Manager

Manager’sreport


Directors’reportForthefinancialyearended30June2015

Yourdirectorssubmitthefinancialstatementsofthecompanyforthefinancialyearended30June2015.

Directors

Thenamesanddetailsofthecompany’sdirectorswhoheldofficeduringorsincetheendofthefinancialyear:

Paul Jeffrey Dare

Chairman

Occupation: Pastor

Qualifications,experienceandexpertise:CurrentlythePastoratMundubberaBaptistChurch.Memberof

WBHHB,SecretaryofRDAWWB,MemberofMundubberaLDSMG,ChairofLocalChaplaincyCommittee.

QualificationsincludeMBA,MDiv,GradDipMinistryandBEng(Aerospace).

Specialresponsibilities:MemberHumanResources,DirectorRecruitment&AssetManagementCommittee;

andBusinessDevelopment,StrategicPlan,PublicRelations&MarketingCommittee.

Interestinshares:2,500

Alexandra Winter O’Neill

Secretary

Occupation:Grazier

Qualifications,experienceandexpertise:QualifiedasaSolicitor,workingincityandcountrypracticefor18

years.AlexhasheldpositionsonQLDLandcareCouncilandLandcareAustraliaLimitedandAgforceQLD.She

isalsoaMemberofMundubberaEnterpriseAssociationandhassignificantinvolvementincommunityevents.

AlexisaGrazierrunningbeefcattlebreedingandfinishingoperationwithherhusbandJames.

Specialresponsibilities:MemberofFinance,Governance,AuditandRiskManagementCommittee.Alexis

SecretarytotheBoard.


Louise Katherine Newman

Director

Occupation:EnvironmentProjectOfficer

Qualifications,experienceandexpertise:AMundubberagirl,LouisestudiedEnvironmentalManagementat

theUniversityofQueenslandgraduatingwithHonoursin2006.Duringherunidayssheworkedonorchards

aroundMundubbera.Sincegraduating,sheworkedwithawildlifeconsultancyonlanddevelopmentbefore

commencingwithBurnettCatchmentCareAssociateasanExtensionOfficer.Louiseisavolunteerwiththe

localSESandhasbeeninvolvedwithmanycommunityeventsincludingtheMundubberaCentenaryin2012,

theMundubberaShowandtheMundubberaCountryMarkets.

Specialresponsibilities:MemberBusinessDevelopment,StrategicPlan,PublicRelations&Marketing

Committee;MediaOfficerandVice-Chairperson.

Interestinshares:Nil


Directors’report(continued)

Directors (continued)

Barry John Zahl

Director

Occupation:RetailManager

Qualifications,experienceandexpertise:BornandeducatedinGayndah.EmployedinQueenslandJustice

Department,qualifiedasaSolicitorinQueenslandin1982,enteredprivatepracticebeforeretirementto

presentpositionasRetailManager.CurrentlyBurnettStateCollegeP&FCommitteeTreasurer.Honorary

AuditortonumerousChurchandcommunitygroups.longperiodofcommunityservicetosporting,churchand

school bodies. Married to Lynda and has 4 sons.

Specialresponsibilities:MemberHumanResourcesandBusinessDevelopment,StrategicPlan,Public

RelationsandMarketingCommittee.


Susan Mary Payne

Director

Occupation:Grazier

Qualifications,experienceandexpertise:Currentlypartnerfamilybeeffatteningenterprise.Susanalsoworks

forEdQueenslandasaBusinessServicesManager.SusanworkedinBankingfor10yearsandhasbeena

memberofmanycommunitygroupsandhasheldexecutivepositionsassecretaryandtreasurer(Mundubbera

community)

Specialresponsibilities:MemberFinance,Governance,Audit&RiskManagementCommittee.BoardTreasurer.


Jan-Adele Sharon Hotz

Director

Occupation:RegisteredNurse-DirectorofNursingMundubberaHospital

Qualifications,experienceandexpertise:GrowingupinMonto,Jan-Adelehasagreatunderstandingofthe

NorthBurnettcommunity.ShecompletedaBachelorofHealthScience(Nursing)in2000,andaPostGraduate

CertificateinAdvancedNursingPractice(RuralandRemote)in2009.Jan-AdelecametoMundubberain2007

andworkedatGayndah,EidsvoldandMontoHospitalsasaClinicalNurse.ShewasappointedDirectorof

NursingatMundubberaHospitalin2009andisFacilityManagerofMundubberaMHPS.Shehasinterestsin

health,includingsocialcohesionandChaplaincy.WithherhusbandNeilshehasinterestsinacattlegrazing

business.Jan-AdeleandNeilhavetwochildrenandJan-Adeleisinvolvedinlocalschoolandsportinggroups.

Specialresponsibilities:MemberBusinessDevelopment,StrategicPlan,PublicRelations&Marketing

Committee.


Susan Jane Keune

Director(Appointed31March2015)

Occupation: Owner of small business

Qualifications,experienceandexpertise:Sue,withherhusbandGarnie,ownsahardwarestoreinMundubbera.

Shehasfinanceledgerexperiencewithlargecompanies;sheisemployedbytheNorthBurnettRegional

CouncilandhasaninterestinCommunityDevelopment.

Specialresponsibilities:MemberHumanResources,DirectorRecruitment&AssetManagementCommittee.




Directors (continued)

Johan-Sebastian Simon

Director(Appointed31March2015)

Occupation: Manager Citrus Orchard

Qualifications,experienceandexpertise:Johanspent11yearsinRetailandBusinessBanking,fromlocalto

StatepositionlevelsinS.A,N.TandQld.Johanhasaninterestinriskmanagementandhasanalyticalskills

whichhebringswithhimtotheBoard.HesupportsthelocalcommunityinpositionsofAuxiliaryFiremanandis

PastoralcarerforPacificSeasonalorchardworkers.JohanismarriedtoMadelainewithtwochildren,Johanhas

takenontheroleofmanagerforthefamilyCitrusOrchard,PackingShedandCo-ordinatescitrusexports.

Specialresponsibilities:MemberFinance,Governance,Audit&RiskManagementCommittee.


Letetia Maree Berthelsen

Director(Resigned28April2015)

Occupation:CustomerServiceOfficer,Grazier-Commercial,Feedlot&CharolaisStud.

Qualifications,experienceandexpertise:CurrentmemberofMonty’sFoundation.LetetiaholdsaCertificateIII

inChildrenServices,&BusinessAdministration.MarriedtoMarkforthepast19yearswiththreeboys.Letetia

hasperformed7yearsofservicewiththeCommunity Bankand19yearsasacommunitymember.

Specialresponsibilities:MemberFinance,Governance,Audit&RiskManagementCommittee.


Directorswereinofficeforthisentireyearunlessotherwisestated.

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

Company Secretary

ThecompanysecretaryisAlexO’Neill.AlexwasappointedtotheroleofsecretaryinJuly2011.Shehasextensive

legalknowledgeaccumulatedduringheryearsasapracticingsolicitorandasamemberofmanycommunity

groups.

Principal Activities

TheprincipalactivitiesofthecompanyduringthefinancialyearwerefacilitatingCommunity Bank® services under

managementrightstooperateafranchisedbranchofBendigoandAdelaideBankLimited.

Therehavebeennosignificantchangesinthenatureoftheseactivitiesduringtheyear.

Operating results

Operationshavecontinuedtoperforminlinewithexpectations.Theprofitofthecompanyforthefinancialyear

afterprovisionforincometaxwas:

Year ended 30 June 2015$

Year ended 30 June 2014$

309,331 9,661



Remuneration report

Directors’shareholdings

Balance at start of the year

Changes during the

year

Balance at end of the year

PaulJeffreyDare 2,500 - 2,500

AlexandraWinterO'Neill 50,000 - 50,000

LouiseKatherineNewman - - -

Barry John Zahl - - -

SusanMaryPayne 2,000 - 2,000

Jan-AdeleSharonHotz - - -

SusanJaneKeune(Appointed31March2015) 5,000 - 5,000

Johan-SebastianSimon(Appointed31March2015) - - -

LetetiaMareeBerthelsen(Resigned28April2015) 1,000 - 1,000

Dividends

No dividends were declared or paid for the previous year and the directors recommend that no dividend be paid for

the current year.

Significant changes in the state of affairs

Intheopinionofthedirectorstherewerenosignificantchangesinthestateofaffairsofthecompanythat

occurredduringthefinancialyearunderreviewnototherwisedisclosedinthisreportorthefinancialstatements.

Events since the end of the financial year

Therearenomattersorcircumstancesthathavearisensincetheendofthefinancialyearthathavesignificantly

affectedormaysignificantlyaffecttheoperationsofthecompanytheresultsofthoseoperationsorthestateof

affairs of the company, in future years.

Likely developments

Thecompanywillcontinueitspolicyoffacilitatingbankingservicestothecommunity.

Environmental regulation

Thecompanyisnotsubjecttoanysignificantenvironmentalregulation.

Indemnification and insurance of directors and officers

Thecompanyhasindemnifiedalldirectorsandthemanagerinrespectofliabilitiestootherpersons(otherthan

thecompanyorrelatedbodycorporate)thatmayarisefromtheirpositionasdirectorsormanagerofthecompany

exceptwheretheliabilityarisesoutofconductinvolvingthelackofgoodfaith.

Disclosureofthenatureoftheliabilityandtheamountofthepremiumisprohibitedbytheconfidentialityclauseof

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

PaulJeffreyDare 11 11

AlexandraWinterO'Neill 11 11

LouiseKatherineNewman 11 10

Barry John Zahl 11 10

SusanMaryPayne 11 11

Jan-AdeleSharonHotz 11 10

SusanJaneKeune(Appointed31March2015) 4 3

Johan-SebastianSimon(Appointed31March2015) 4 3

LetetiaMareeBerthelsen(Resigned28April2015) 9 8

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

compatiblewiththegeneralstandardofindependenceforauditorsimposedbytheCorporationsAct2001.

Thedirectorsaresatisfiedthattheprovisionofnon-auditservicesbytheauditor,assetoutinthenotesdidnot

compromisetheauditorindependencerequirementsoftheCorporationsAct2001forthefollowingreasons:

• allnon-auditserviceshavebeenreviewedbytheboardtoensuretheydonotimpactontheimpartialityand

objectivity of the auditor

• noneoftheservicesunderminethegeneralprinciplesrelatingtoauditorindependenceassetoutinAPES110

CodeofEthicsforProfessionalAccountants,includingreviewingorauditingtheauditor’sownwork,actingin

amanagementoradecision-makingcapacityforthecompany,actingasadvocateforthecompanyorjointly

sharingeconomicriskandrewards.



Auditor’s independence declaration

Acopyoftheauditor’sindependencedeclarationasrequiredundersection307CoftheCorporationsAct2001is

set out on page 10.

SignedinaccordancewitharesolutionoftheboardofdirectorsatMundubbera,Queenslandon15September

2015.

Paul Jeffrey Dare,

Chairman


Auditor’sindependencedeclaration


Financial statementsStatementofProfitorLossandOtherComprehensiveIncome for the year ended 30 June 2015

Notes 2015 2014 $ $

Revenuefromordinaryactivities 4 573,139 512,463

Employeebenefitsexpense (272,525) (264,961)

Charitabledonations,sponsorship,advertisingandpromotion (39,149) (35,493)

Occupancyandassociatedcosts (37,168) (32,094)

Systemscosts (19,769) (19,385)

Depreciationandamortisationexpense 5 (21,023) (20,932)

Financecosts 5 (19,795) (21,421)

Generaladministrationexpenses (100,805) (108,516)

Profit before income tax 62,905 9,661

Incometaxcredit 6 246,426 -

Profit after income tax 309,331 9,661

Total comprehensive income for the year 309,331 9,661

Earnings per share for profit attributable to the ordinary

shareholders of the company: ¢ ¢

Basicearningspershare 21 51.26 1.6

Theaccompanyingnotesformpartofthesefinancialstatements.


Financial statements (continued)

BalanceSheet as at 30 June 2015

Notes 2015 2014 $ $

ASSETS

Current Assets

Cashandcashequivalents 7 4,841 -

Tradeandotherreceivables 8 38,513 35,890

Total Current Assets 43,354 35,890

Non-Current Assets

Property,plantandequipment 9 107,576 113,631

Intangibleassets 10 18,486 32,350

Deferredtaxasset 11 246,426 -

Total Non-Current Assets 372,488 145,981

Total Assets 415,842 181,871

LIABILITIES

Current Liabilities

Tradeandotherpayables 12 17,725 35,402

Borrowings 13 - 462,889

Provisions 14 12,714 10,797

Total Current Liabilities 30,439 509,088

Non-Current Liabilities

Borrowings 13 400,000 -

Provisions 14 8,489 5,200

Total Non-Current Liabilities 408,489 5,200

Total Liabilities 438,928 514,288

Net Liabilities (23,086) (332,417)

Equity

Issuedcapital 15 572,563 572,563

Accumulatedlosses 16 (595,649) (904,980)

Total Equity (23,086) (332,417)




StatementofChangesinEquity for the year ended 30 June 2015

Issued Accumulated Total capital losses equity $ $ $

Balance at 1 July 2013 572,563 (914,641) (342,078)

Total comprehensive income for the year - 9,661 9,661

Transactions with owners in their capacity as owners:

Sharesissuedduringperiod - - -

Costsofissuingshares - - -

Dividendsprovidedfororpaid - - -

Balance at 30 June 2014 572,563 (904,980) (332,417)

Balance at 1 July 2014 572,563 (904,980) (332,417)

Total comprehensive income for the year - 309,331 309,331

Transactions with owners in their capacity as owners:

Sharesissuedduringperiod - - -

Costsofissuingshares - - -

Dividendsprovidedfororpaid - - -

Balance at 30 June 2015 572,563 (595,649) (23,086)




StatementofCashFlows for the year ended 30 June 2015

Notes 2015 2014 $ $

Cash flows from operating activities

Receiptsfromcustomers 626,795 585,645

Paymentstosuppliersandemployees (523,724) (512,288)

Interestpaid (19,795) (21,421)

Net cash provided by operating activities 17 83,276 51,936

Cash flows from investing activities

Paymentsforproperty,plantandequipment (1,104) (2,734)

Paymentsforintangibleassets (14,442) (15,886)

Net cash provided by/(used in) investing activities (15,546) (18,620)

Cash flows from financing activities

Proceedsfromborrowings 400,000 -

Net cash provided by financing activities 400,000 -

Net increase in cash held 467,730 33,316

Cashandcashequivalentsatthebeginningofthefinancialyear (462,889) (496,205)

Cash and cash equivalents at the end of the financial year 7(a) 4,841 (462,889)



Notes to the financial statementsFor year ended 30 June 2015

Note1.Summaryofsignificantaccountingpolicies

a) Basis of preparation

ThesegeneralpurposefinancialstatementshavebeenpreparedinaccordancewithAustralianAccounting

StandardsandInterpretationsissuedbytheAustralianAccountingStandardBoardsandtheCorporationsAct

2001.Thecompanyisafor-profitentityforthepurposeofpreparingthefinancialstatements.

CompliancewithIFRS

ThesefinancialstatementsandnotescomplywithInternationalFinancialReportingStandards(IFRS)asissuedby

theInternationalAccountingStandardsBoard(IASB).

Critical accounting estimates

Thepreparationofthefinancialstatementsrequirestheuseofcertaincriticalaccountingestimates.Italso

requiresmanagementtoexerciseitsjudgementintheprocessofapplyingthecompany’saccountingpolicies.

Theseareasinvolvingahigherdegreeofjudgementorcomplexities,orareaswhereassumptionsandestimates

aresignificanttothefinancialstatementsaredisclosedinnote3.

Historicalcostconvention

Thefinancialstatementshavebeenpreparedunderthehistoricalcostconventiononanaccrualsbasisas

modifiedbytherevaluationoffinancialassetsandliabilitiesatfairvaluethroughprofitorlossandwherestated,

currentvaluationsofnon-currentassets.Costisbasedonthefairvaluesoftheconsiderationgiveninexchange

for assets.

Comparativefigures

WhererequiredbyAustralianAccountingStandardscomparativefigureshavebeenadjustedtoconformwith

changesinpresentationforthecurrentfinancialyear.

Applicationofnewandamendedaccountingstandards

ThefollowingamendmentstoaccountingstandardsandanewinterpretationissuedbytheAustralianAccounting

StandardsBoard(AASB)becamemandatorilyeffectiveforaccountingperiodsbeginningonorafter1July2014,

andarethereforerelevantforthecurrentfinancialyear.

• AASB2012-3AmendmentstoAustralianAccountingStandards(AASB132)–OffsettingFinancialAssetsand

Financial Liabilities.

• 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).


Notestothefinancialstatements(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).

NoneoftheamendmentstoaccountingstandardsorthenewinterpretationissuedbytheAustralianAccounting

StandardsBoard(AASB)thatbecamemandatorilyeffectiveforaccountingperiodsbeginningonorafter1July

2014,materiallyaffectedanyoftheamountsrecognisedinthecurrentperiodoranypriorperiodandarenotlikely

to affect future periods.

ThefollowingaccountingstandardsandinterpretationsissuedbytheAustralianAccountingStandardsBoard

(AASB)becomeeffectiveinfutureaccountingperiods.

Effective for annual reporting periods beginning on or after

AASB9FinancialInstruments,andtherelevantamendingstandards. 1January2018

AASB15RevenuefromContractswithCustomersandAASB2014-5

AmendmentstoAustralianAccountingStandardsarisingfromAASB15.1January2017

AASB2014-3AmendmentstoAustralianAccountingStandards–Accounting

forAcquisitionsofInterestsinJointOperations.1January2016

AASB2014-4AmendmentstoAustralianAccountingStandards–Clarification

ofAcceptableMethodsofDepreciationandAmortisation.1January2016

AASB2014-6AmendmentstoAustralianAccountingStandards–Agriculture:

Bearer Plants.1January2016

AASB2014-9AmendmentstoAustralianAccountingStandards–Equity

MethodinSeparateFinancialStatements.1January2016

AASB2014-10AmendmentstoAustralianAccountingStandards–Sale

orContributionofAssetsbetweenanInvestoranditsAssociateorJoint

Venture.

1January2016

AASB2015-1AmendmentstoAustralianAccountingStandards–Annual

ImprovementstoAustralianAccountingStandards2012-2014Cycle.1January2016

AASB2015-2AmendmentstoAustralianAccountingStandards–Disclosure

Initiative:AmendmentstoAASB101.1January2016

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 Mundubbera, Queensland.

ThebranchoperatesasafranchiseofBendigoandAdelaideBankLimited,usingthename“BendigoBank”and

thelogoandsystemofoperationsofBendigoandAdelaideBankLimited.ThecompanymanagestheCommunity

Bank®branchonbehalfofBendigoandAdelaideBankLimited,howeveralltransactionswithcustomersconducted

through the Community Bank®branchareeffectivelyconductedbetweenthecustomersandBendigoandAdelaide

BankLimited.

AlldepositsaremadewithBendigoandAdelaideBankLimited,andallpersonalandinvestmentproductsare

productsofBendigoandAdelaideBankLimited,withthecompanyfacilitatingtheprovisionofthoseproducts.All

loans,leasesorhirepurchasetransactions,issuesofnewcreditordebitcards,temporaryorbridgingfinanceand

anyothertransactionthatinvolvescreatinganewdebt,orincreasingorchangingthetermsofanexistingdebt

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

obligationsandhasnotexercisedadiscretioningrantingorextendingcredit.

BendigoandAdelaideBankLimitedprovidessignificantassistanceinestablishingandmaintainingtheCommunity

Bank®branchfranchiseoperations.Italsocontinuestoprovideongoingmanagementandoperationalsupport

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

financialstatements.Theaccountingpolicieshavebeenconsistentlyapplied,unlessotherwisestated.




b) Revenue

Revenueisrecognisedwhentheamountofrevenuecanbereliablymeasured,itisprobablethatfutureeconomic

benefitswillflowtothecompanyandanyspecificcriteriahavebeenmet.Interestandfeerevenueisrecognised

whenearned.Thegainorlossondisposalofproperty,plantandequipmentisrecognisedonanetbasisandis

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.Changestobeimplementedoverathreeyearperiodreflectanumberofthemes,includingacultureof

innovation,agilityandflexibility,networkcollaboration,directorandstaffdevelopmentandasustainablefinancial

model.ThiswillincludechangestothefinancialreturnforCommunity 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

willbesharedona50/50basis.

Thefranchiseagreementprovidesthatthreeformsofrevenuemaybeearnedbythecompany–margin,

commissionandfeeincome.BendigoandAdelaideBankLimiteddecidestheformofrevenuethecompanyearns

on different types of products and services.

Therevenueearnedbythecompanyisdependentonthebusinessthatitgenerates.Itmayalsobeaffectedby

otherfactors,suchaseconomicandlocalconditions,forexample,interestrates.

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

Commissionisafeepaidforproductsandservicessold.Itmaybepaidontheinitialsaleoronanongoingbasis.

Commissionispayableonthesaleofaninsuranceproductsuchashomecontents.Examplesofproductsand

servicesonwhichongoingcommissionsarepaidincludeleasingandSandhurstTrusteesLimitedproducts.This

currentlyalsoincludesBendigoBankbrandedfixedratehomeloansandtermdepositsofmorethan90days,but

thesewillbecomemarginproductsfrom1July2016.

Fee income

Feeincomeisashareofwhatiscommonlyreferredtoas‘bankfeesandcharges’chargedtocustomersby

BendigoBankGroupentitiesincludingfeesforloanapplicationsandaccounttransactions.

Abilitytochangefinancialreturn

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.

Monitoringandchangingfinancialreturn

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

Currenttax

Currenttaxiscalculatedbyreferencetotheamountofincometaxespayableorrecoverableinrespectofthe

taxableprofitorlossfortheperiod.Itiscalculatedusingtaxratesandtaxlawsthathavebeenenactedor

substantivelyenactedbyreportingdate.Currenttaxforcurrentandpriorperiodsisrecognisedasaliability(or

asset)totheextentthatitisunpaid(orrefundable).

Deferredtax

Deferredtaxisaccountedforusingthebalancesheetliabilitymethodontemporarydifferencesarisingfrom

differencesbetweenthecarryingamountofassetsandliabilitiesinthefinancialstatementsandthecorresponding

taxbaseofthoseitems.

Inprinciple,deferredtaxliabilitiesarerecognisedforalltaxabletemporarydifferences.Deferredtaxassets

arerecognisedtotheextentthatitisprobablethatsufficienttaxableamountswillbeavailableagainstwhich

deductibletemporarydifferencesorunusedtaxlossesandtaxoffsetscanbeutilised.However,deferredtax

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

recognitionofassetsandliabilities(otherthanasaresultofabusinesscombination)whichaffectsneither

taxableincomenoraccountingprofit.Furthermore,adeferredtaxliabilityisnotrecognisedinrelationtotaxable

temporary differences arising from goodwill.

Deferredtaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplytotheperiod(s)when

theassetandliabilitygivingrisetothemarerealisedorsettled,basedontaxrates(andtaxlaws)thathavebeen

enactedorsubstantivelyenactedbyreportingdate.Themeasurementofdeferredtaxliabilitiesreflectsthetax

consequencesthatwouldfollowfromthemannerinwhichtheconsolidatedentityexpects,atthereportingdate,to

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

Deferredtaxassetsandliabilitiesareoffsetwhenthereisalegallyenforceablerighttooffsetcurrenttaxand

whenthebalancesrelatetotaxesleviedbythesametaxationauthorityandthecompanyentityintendstosettle

itstaxassetsandliabilitiesonanetbasis.

Currentanddeferredtaxfortheperiod

CurrentanddeferredtaxisrecognisedasanexpenseorincomeintheStatementofProfitorLossandOther

ComprehensiveIncome,exceptwhenitrelatestoitemscreditedordebitedtoequity,inwhichcasethedeferred

taxisalsorecogniseddirectlyinequity,orwhereitarisesfrominitialaccountingforabusinesscombination,in

whichcaseitistakenintoaccountinthedeterminationofgoodwillorexcess.




d) Employee entitlements

Provisionismadeforthecompany’sliabilityforemployeebenefitsarisingfromservicesrenderedbyemployees

tobalancedate.Employeebenefitsthatareexpectedtobesettledwithinoneyearhavebeenmeasuredatthe

amountsexpectedtobepaidwhentheliabilityissettled,plusrelatedon-costs.Employeebenefitspayablelater

thanoneyearhavebeenmeasuredatthepresentvalueoftheestimatedfuturecashoutflowstobemadefor

thosebenefits.

Thecompanycontributestoadefinedcontributionplan.Contributionstoemployeesuperannuationfundsare

charged against income as incurred.

e) Cash and cash equivalents

ForthepurposesoftheStatementofCashFlows,cashincludescashonhandandinbanksandinvestmentsin

moneymarketinstruments,netofoutstandingbankoverdrafts.Bankoverdraftsareshownwithinborrowingsin

currentliabilitiesontheBalanceSheet.

f) Trade receivables and payables

Receivablesarecarriedattheiramountsdue.Thecollectabilityofdebtsisassessedatbalancedateandspecific

provision is made for any doubtful accounts. Liabilities for trade creditors and other amounts are carried at cost

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

Plantandequipment,leaseholdimprovementsandequipmentunderfinanceleasearestatedatcostless

accumulateddepreciationandimpairment.Costincludesexpenditurethatisdirectlyattributabletotheacquisition

oftheitem.Intheeventthatsettlementofallorpartofthepurchaseconsiderationisdeferred,costisdetermined

bydiscountingtheamountspayableinthefuturetotheirpresentvalueasatthedateofacquisition.

Depreciationisprovidedonproperty,plantandequipment,includingfreeholdbuildingsbutexcludingland.

Depreciationiscalculatedonastraightlinebasissoastowriteoffthenetcostofeachassetoveritsexpected

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

Allloansareinitiallymeasuredattheprincipalamount.Interestisrecognisedasanexpenseasitaccrues.

k) Financial instruments

Recognitionandinitialmeasurement

Financialinstruments,incorporatingfinancialassetsandfinancialliabilitiesarerecognisedwhentheentity

becomes a party to the contractual provisions of the instrument.

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

classifiedandmeasuredassetoutbelow.

Derecognition

Financialassetsarederecognisedwherethecontractualrightstoreceiptofcashflowsexpiresortheassetis

transferredtoanotherpartywherebytheentitynolongerhasanysignificantcontinuinginvolvementintherisks

andbenefitsassociatedwiththeasset.

Classificationandsubsequentmeasurement

(i) Loansandreceivables

Loansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenot

quotedinanactivemarketandaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestrate

method.

(ii) Held-to-maturityinvestments

Held-to-maturityinvestmentsarenon-derivativefinancialassetsthathavefixedmaturitiesandfixedor

determinablepayments,anditistheentity’sintentiontoholdtheseinvestmentstomaturity.Theyare

subsequentlymeasuredatamortisedcostusingtheeffectiveinterestratemethod.

(iii)Available-for-salefinancialassets

Available-for-salefinancialassetsarenon-derivativefinancialassetsthatareeithernotsuitabletobeclassified

intoothercategoriesoffinancialassetsduetotheirnature,ortheyaredesignatedassuchbymanagement.

Theycompriseinvestmentsintheequityofotherentitieswherethereisneitherafixedmaturitynorfixedor

determinable payments.

Theyaresubsequentlymeasuredatfairvaluewithchangesinsuchfairvalue(i.e.gainsorlosses)recognised

intheStatementofProfitorLossandOtherComprehensiveIncome.Available-for-salefinancialassetsare

includedinnon-currentassetsexceptwheretheyareexpectedtobesoldwithin12monthsaftertheendof

thereportingperiod.Allotherfinancialassetsareclassifiedascurrentassets.

(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,

butnotthelegalownershiparetransferredtothecompanyareclassifiedasfinanceleases.Financeleasesare

capitalisedbyrecordinganassetandaliabilityattheloweroftheamountsequaltothefairvalueoftheleased

property or the present value of the minimum lease payments, including any guaranteed residual values. Lease

paymentsareallocatedbetweenthereductionoftheleaseliabilityandtheleaseinterestexpensefortheperiod.

Leasedassetsaredepreciatedonastraight-linebasisovertheshorteroftheirestimatedusefullivesorthelease

term.Leasepaymentsforoperatingleases,wheresubstantiallyalltherisksandbenefitsremainwiththelessor,

arechargedasexpensesintheperiodsinwhichtheyareincurred.Leaseincentivesunderoperatingleasesare

recognisedasaliabilityandamortisedonastraight-linebasisoverthelifeoftheleaseterm.

m) Provisions

Provisionsarerecognisedwhentheeconomicentityhasalegal,equitableorconstructiveobligationtomakea

futuresacrificeofeconomicbenefitstootherentitiesasaresultofpasttransactionsofotherpastevents,itis

probablethatafuturesacrificeofeconomicbenefitswillberequiredandareliableestimatecanbemadeofthe

amount of the obligation.

Aprovisionfordividendsisnotrecognisedasaliabilityunlessthedividendsaredeclared,determinedorpublicly

recommended on or before the reporting date.

n) Contributed equity

Ordinarysharesarerecognisedatthefairvalueoftheconsiderationreceivedbythecompany.Anytransaction

costsarisingontheissueofordinarysharesarerecogniseddirectlyinequityasareductionoftheshareproceeds

received.

o) Earnings per share

Basicearningspershareiscalculatedbydividingtheprofitattributabletoequityholdersofthecompany,excluding

anycostsofservicingequityotherthanordinaryshares,bytheweightedaveragenumberofordinaryshares

outstandingduringthefinancialyear,adjustedforbonuselementsinordinarysharesissuedduringtheyear.

p) Goods and Services Tax

Revenues,expensesandassetsarerecognisednetoftheamountofGoodsandServicesTax(GST),exceptwhere

theamountofGSTincurredisnotrecoverablefromthetaxationauthority.Inthesecircumstances,theGSTis

recognisedaspartofthecostofacquisitionoftheassetoraspartoftheexpense.

ReceivablesandpayablesarestatedwiththeamountofGSTincluded.ThenetamountofGSTrecoverablefrom,or

payableto,thetaxationauthorityisincludedaspartofreceivablesorpayablesintheBalanceSheet.Cashflows

areincludedintheStatementofCashFlowsonagrossbasis.

TheGSTcomponentsofcashflowsarisingfrominvestingandfinancingactivitieswhicharerecoverablefrom,or

payableto,thetaxationauthorityareclassifiedasoperatingcashflows.



Note2.FinancialriskmanagementThecompany’sactivitiesexposeittoalimitedvarietyoffinancialrisks:marketrisk(includingcurrencyrisk,fair

valueinterestriskandpricerisk),creditrisk,liquidityriskandcashflowinterestraterisk.Thecompany’soverall

riskmanagementprogramfocusesontheunpredictabilityoffinancialmarketsandseekstominimisepotential

adverseeffectsonthefinancialperformanceoftheentity.Theentitydoesnotusederivativeinstruments.

Riskmanagementiscarriedoutdirectlybytheboardofdirectors.

(i)Marketrisk

ThecompanyhasnoexposuretoanytransactionsdenominatedinacurrencyotherthanAustraliandollars.

(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

bytotalequityasrecordedintheBalanceSheet.

Inaccordancewiththefranchiseagreement,inany12monthperiod,thefundsdistributedtoshareholdersshall

notexceedthedistributionlimit:

The distribution limit is the greater of:

(a)20%oftheprofitorfundsofthefranchiseeotherwiseavailablefordistributiontoshareholdersinthat12

month period; and

(b) subjecttotheavailabilityofdistributableprofits,therelevantrateofreturnmultipliedbytheaveragelevelof

sharecapitalofthefranchiseeoverthat12monthperiodwheretherelevantrateofreturnisequaltothe

weightedaverageinterestrateon90daybankbillsoverthat12monthperiodplus5%.



Note2.Financialriskmanagement(continued)

Theboardismanagingthegrowthofthebusinessinlinewiththisrequirement.Therearenootherexternally

imposedcapitalrequirements,althoughthenatureofthecompanyissuchthatamountswillbepaidintheform

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

2015canbeseenintheStatementofProfitorLossandOtherComprehensiveIncome.

Therewerenochangesinthecompany’sapproachtocapitalmanagementduringtheyear.

Note 3. Critical accounting estimates and judgementsEstimatesandjudgementsarecontinuallyevaluatedandarebasedonhistoricalexperienceandotherfactors,

includingexpectationsoffutureeventsthatmayhaveafinancialimpactontheentityandthatarebelievedtobe

reasonable under the circumstances.

Thecompanymakesestimatesandassumptionsconcerningthefuture.Theresultingaccountingestimateswill,by

definition,seldomequaltherelatedactualresults.

Managementhasidentifiedthefollowingcriticalaccountingpoliciesforwhichsignificantjudgements,estimates

andassumptionsaremade.Actualresultsmaydifferfromtheseestimatesunderdifferentassumptionsand

conditionsandmaymateriallyaffectfinancialresultsorthefinancialpositionreportedinfutureperiods.

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

financialstatements.

Taxation

Judgementisrequiredinassessingwhetherdeferredtaxassetsandcertaintaxliabilitiesarerecognisedon

thebalancesheet.Deferredtaxassets,includingthosearisingfromun-recoupedtaxlosses,capitallossesand

temporarydifferences,arerecognisedonlywhereitisconsideredmorelikelythannotthattheywillberecovered,

whichisdependentonthegenerationofsufficientfuturetaxableprofits.

Assumptionsaboutthegenerationoffuturetaxableprofitsdependonmanagement’sestimatesoffuturecash

flows.Thesedependonestimatesoffuturesalesvolumes,operatingcosts,capitalexpenditure,dividendsand

othercapitalmanagementtransactions.Judgementsarealsorequiredabouttheapplicationofincometax

legislation.

Thesejudgementsandassumptionsaresubjecttoriskanduncertainty.Thereisthereforeapossibilitythat

changesincircumstanceswillalterexpectations,whichmayimpacttheamountofdeferredtaxassetsand

deferredtaxliabilitiesrecognisedonthebalancesheetandtheamountofothertaxlossesandtemporary

differencesnotyetrecognised.Insuchcircumstances,someorallofthecarryingamountofrecogniseddeferred

taxassetsandliabilitiesmayrequireadjustment,resultingincorrespondingcreditorchargetotheStatementof

ProfitorLossandOtherComprehensiveIncome.

Estimation of useful lives of assets

Theestimationoftheusefullivesofassetshasbeenbasedonhistoricalexperienceandtheconditionofthe

assetisassessedatleastonceperyearandconsideredagainsttheremainingusefullife.Adjustmentstouseful

lives are made when considered necessary.



Note3.Criticalaccountingestimatesandjudgements(continued)

Impairmentofassets

Ateachreportingdate,thecompanyreviewsthecarryingamountsofitstangibleandintangibleassetsthathave

anindefiniteusefullifetodeterminewhetherthereisanyindicationthatthoseassetshavesufferedanimpairment

loss.Ifanysuchindicationexists,therecoverableamountoftheassetisestimatedinordertodeterminethe

extentoftheimpairmentloss(ifany).Wheretheassetdoesnotgeneratecashflowsthatareindependentfrom

otherassets,theconsolidatedentityestimatestherecoverableamountofthecash-generatingunittowhichthe

asset belongs.

Recoverableamountisthehigheroffairvaluelesscoststosellandvalueinuse.Inassessingvalueinuse,the

estimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectscurrent

marketassessmentsofthetimevalueofmoneyandtherisksspecifictotheassetforwhichtheestimatesof

futurecashflowshavenotbeenadjusted.

Iftherecoverableamountofanasset(orcash-generatingunit)isestimatedtobelessthanitscarryingamount,

thecarryingamountoftheasset(cash-generatingunit)isreducedtoitsrecoverableamount.Animpairmentloss

isrecognisedinprofitorlossimmediately,unlesstherelevantassetiscarriedatfairvalue,inwhichcasethe

impairment loss is treated as a revaluation decrease.

Whereanimpairmentlosssubsequentlyreverses,thecarryingamountoftheasset(cash-generatingunit)is

increasedtotherevisedestimateofitsrecoverableamount,butonlytotheextentthattheincreasedcarrying

amountdoesnotexceedthecarryingamountthatwouldhavebeendeterminedhadnoimpairmentlossbeen

recognisedfortheasset(cash-generatingunit)inprioryears.Areversalofanimpairmentlossisrecognised

inprofitorlossimmediately,unlesstherelevantassetiscarriedatfairvalue,inwhichcasethereversalofthe

impairment loss is treated as a revaluation increase.

2015 2014 $ $

Note4.RevenuefromordinaryactivitiesOperating activities:

-servicescommissions 571,221 508,679

-otherrevenue 1,918 3,784

Total revenue from operating activities 573,139 512,463

Total revenues from ordinary activities 573,139 512,463

Note5.ExpensesDepreciationofnon-currentassets:

-plantandequipment 2,358 2,267

-leaseholdimprovements 4,801 4,800



Note5.Expenses(continued)

Amortisationofnon-currentassets:

-franchiseagreement 2,311 2,311

-franchiserenewalfee 11,553 11,554

21,023 20,932

Finance costs:

- interest paid 19,795 21,421

Bad debts 292 793

Note6.Incometaxexpense/(credit) Thecomponentsoftaxexpense/(credit)comprise:

-Movementindeferredtax (1,965) (1,933)

-Adjustmenttodeferredtaxtoreflectchangetotaxrateinfutureperiods 12,970 -

-Recoupmentofprioryeartaxlosses 20,845 5,557

-Taxlossespreviouslynotbroughttoaccount (278,276) -

-Reductionintaxlossescarriedforward - (3,624)

(246,426) -

Theprimafacietaxonprofitfromordinaryactivitiesbeforeincometaxis

reconciledtotheincometaxexpense/(credit)asfollows

Operatingprofit 62,905 9,661

Primafacietaxonprofitfromordinaryactivitiesat30% 18,871 2,898

Addtaxeffectof:

-non-deductibleexpenses 9 -

-timingdifferenceexpenses 1,965 6,818

-otherdeductibleexpenses - (4,159)

20,845 5,557

Movementindeferredtax (1,965) (1,933)

Adjustmenttodeferredtaxtoreflectchangeoftaxrateinfutureperiods 12,970 -

Taxlossespreviouslynotbroughttoaccount (278,276) -

Reductionintaxlossescarriedforward - (3,624)

(246,426) -

2015 2014 $ $



Note7.CashandcashequivalentsCash at bank and on hand 4,841 -

Note 7.(a) Reconciliation to cash flow statement

Theabovefiguresreconciletotheamountofcashshowninthestatementof

cashflowsattheendofthefinancialyearasfollows:

Cashatbankandonhand 4,841 -

Bankoverdraft - (462,889)

4,841 (462,889)

Note8.TradeandotherreceivablesTradereceivables 34,799 32,735

Prepayments 3,714 3,155

38,513 35,890

Note9.Property,plantandequipmentLeasehold improvements

Atcost 157,476 157,476

Lessaccumulateddepreciation (65,773) (60,972)

91,703 96,504

Plantandequipment

Atcost 53,856 52,752

Lessaccumulateddepreciation (37,983) (35,625)

15,873 17,127

Total written down amount 107,576 113,631

Movements in carrying amounts:

Leasehold improvements

Carryingamountatbeginning 96,504 100,412

Additions - 892

Disposals - -

Less:depreciationexpense (4,801) (4,800)

Carrying amount at end 91,703 96,504

2015 2014 $ $



Note9.Property,plantandequipment(continued)

Plantandequipment

Carryingamountatbeginning 17,127 17,552

Additions 1,104 1,842

Disposals - -

Less:depreciationexpense (2,358) (2,267)

Carrying amount at end 15,873 17,127


Note10.IntangibleassetsFranchise fee

Atcost 21,554 21,554

Less:accumulatedamortisation (18,473) (16,162)

3,081 5,392

Renewalprocessingfee

Atcost 57,768 57,768

Less:accumulatedamortisation (42,363) (30,810)

15,405 26,958


Note11.Tax Non-Current:

Deferredtaxassets

-accruals 698 -

-employeeprovisions 6,043 -

-taxlossescarriedforward 239,685 -

246,426 -

Net deferred tax asset 246,426 -

Movement in deferred tax charged to Statement of Profit or Loss

and Other Comprehensive Income (246,426) -

2015 2014 $ $



Note 12. Trade and other payables Current:

Tradecreditors 2,542 3,659

Othercreditorsandaccruals 15,183 31,743

17,725 35,402

Note 13. Borrowings Current:

Bank overdrafts - 462,889

Non-Current:

Bank loans 400,000 -

Thecompanyhasanapprovedoverdraftfacilityof$150,000thatissubjecttoanannualreview.Theoverdraftis

atBendigoBank’snormalcommercialinterestrates(currently4.225%).Theoverdraftissecuredbyafixedand

floatingchargeoverthecompany’sassets.

TheBankloanisaninterestonlyvariablenon-residentialsecuredloanfor$400,000.Interestisrecognisedata

rateof4.77%.Theloansaresecuredbyafixedandfloatingchargeoverthecompany’sassets.Thereisnotaset

paymentplanoftheloancurrentlyandthisistonegotiatedwithBendigoBankatafuturetime.

2015 2014 $ $

Note 14. ProvisionsCurrent:

Provision for annual leave 12,714 10,797

Non-Current:

Provision for long service leave 8,489 5,200

Note15.Contributedequity603,409ordinarysharesfullypaid(2014:603,409) 603,409 603,409

Less:equityraisingexpenses (30,846) (30,846)

572,563 572,563

2015 2014 $ $



Note15.Contributedequity(continued)

Rightsattachedtoshares

(a)Votingrights

Subjecttosomelimitedexceptions,eachmemberhastherighttovoteatageneralmeeting.

Onashowofhandsorapoll,eachmemberattendingthemeeting(whethertheyareattendingthemeeting

inpersonorbyattorney,corporaterepresentativeorproxy)hasonevote,regardlessofthenumberofshares

held.However,whereapersonattendsameetinginpersonandisentitledtovoteinmorethanonecapacity

(forexample,thepersonisamemberandhasalsobeenappointedasproxyforanothermember)thatperson

mayonlyexerciseonevoteonashowofhands.Onapoll,thatpersonmayexerciseonevoteasamemberand

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

proxy.

Thepurposeofgivingeachmemberonlyonevote,regardlessofthenumberofsharesheld,istoreflectthe

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

abilitytoinfluencetheoperationofthecompany.

(b)Dividends

Generally, dividends are payable to members in proportion to the amount of the share capital paid up on the

shares held by them, subject to any special rights and restrictions for the time being attaching to shares. 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.

Prohibited shareholding interest

Apersonmustnothaveaprohibitedshareholdinginterestinthecompany.

Insummary,apersonhasaprohibitedshareholdinginterestifanyofthefollowingapplies:

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

• Intheopinionoftheboardtheydonothaveacloseconnectiontothecommunityorcommunitiesinwhichthe

companypredominantlycarriesonbusiness(the“closeconnectiontest”).

• Wherethepersonisashareholder,afterthetransferofsharesinthecompanytothatpersonthenumberof

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

numberis195.Asatthedateofthisreport,thecompanyhad215shareholders.

Aswithvotingrights,thepurposeofthisprohibitedshareholdingprovisionistoreflectthecommunity-basednature

of the company.

Whereapersonhasaprohibitedshareholdinginterest,thevotinganddividendrightsattachingtothesharesin

whichtheperson(andhisorherassociates)haveaprohibitedshareholdinginterest,aresuspended.



Note15.Contributedequity(continued)

Prohibitedshareholdinginterest(continued)

Theboardhasthepowertorequestinformationfromapersonwhohas(orissuspectedbytheboardofhaving)

alegalorbeneficialinterestinanysharesinthecompanyoranyvotingpowerinthecompany,forthepurposeof

determiningwhetherapersonhasaprohibitedshareholdinginterest.Iftheboardbecomesawarethatamember

hasaprohibitedshareholdinginterest,itmustserveanoticerequiringthemember(orthemember’sassociate)to

disposeofthenumberofsharestheboardconsidersnecessarytoremedythebreach.Ifapersonfailstocomply

withsuchanoticewithinaspecifiedperiod(thatmustbebetweenthreeandsixmonths),theboardisauthorised

tosellthespecifiedsharesonbehalfofthatperson.Theholderwillbeentitledtotheconsiderationfromthesale

oftheshares,lessanyexpensesincurredbytheboardinsellingorotherwisedealingwiththoseshares.

Intheconstitution,membersacknowledgeandrecognisethattheexerciseofthepowersgiventotheboardmay

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

prohibition.

2015 2014 $ $

Note16.AccumulatedlossesBalanceatthebeginningofthefinancialyear (904,980) (914,641)

Netprofitfromordinaryactivitiesafterincometax 309,331 9,661

Balance at the end of the financial year (595,649) (904,980)

Note17.Statementofcashflows Reconciliationofprofitfromordinaryactivitiesaftertaxtonetcash

provided by operating activities

Profitfromordinaryactivitiesafterincometax 309,331 9,661

Non cash items:

-depreciation 7,159 7,067

-amortisation 13,864 13,865

Changes in assets and liabilities:

-(increase)/decreaseinreceivables (2,623) 13,312

-(increase)/decreaseinotherassets (246,426) -

-increase/(decrease)inpayables (3,235) 1,578

-increase/(decrease)inprovisions 5,206 6,453

Net cash flows provided by operating activities 83,276 51,936



Note18.LeasesOperating lease commitments

Non-cancellableoperatingleasescontractedforbutnotcapitalised

inthefinancialstatements

Payable-minimumleasepayments:

-notlaterthan12months 23,269 22,000

-between12monthsand5years 5,817 27,500

-greaterthan5years - -

29,086 49,500

Thebranchpremisesleaseisanon-cancellableleasewithafive-yearterm,withrentpayablemonthlyinadvance.

RentisincreasedannuallyinSeptemberby3%forthefirsttermofthelease.Theleaseisdueforrenewalin

September2016withafurther5yeartermavailable.

2015 2014 $ $

Note19.Auditor’sremuneration Amountsreceivedordueandreceivablebytheauditorofthecompanyfor:

-auditandreviewservices 3,950 3,850

-shareregistryservices 1,750 1,500

-nonauditservices 4,028 3,582

9,728 8,932

Note20.DirectorandrelatedpartydisclosuresNo director of the company receives remuneration for services as a company director or committee member.

Therearenoexecutiveswithinthecompanywhoseremunerationisrequiredtobedisclosed.

2015 2014 $ $

KeyManagementPersonnelShareholdings

Ordinarysharesfullypaid 60,500 58,001

Detailedshareholdingdisclosuresareprovidedintheremunerationreport,includedaspartofthedirectors’

report.

2015 2014 $ $



Note 21. Earnings per share

2015 $

2014 $

(a) Profitattributabletotheordinaryequityholdersofthecompanyused

in calculating earnings per share309,331 9,661

Number Number

(b) Weightedaveragenumberofordinarysharesusedasthe

denominator in calculating basic earnings per share603,409 603,409

Note 22. Events occurring after the reporting dateTherehavebeennoeventsaftertheendofthefinancialyearthatwouldmateriallyaffectthefinancialstatements.

Note 23. Contingent liabilities and contingent assetsTherewerenocontingentliabilitiesorcontingentassetsatthedateofthisreporttoaffectthefinancial

statements.

Note24.SegmentreportingThe economic entity operates in the service sector where it facilitates Community Bank® services in Mundubbera,

QueenslandpursuanttoafranchiseagreementwithBendigoandAdelaideBankLimited.

Note25.Registeredoffice/PrincipalplaceofbusinessTheentityisacompanylimitedbyshares,incorporatedanddomiciledinAustralia.Theregisteredofficeand

principal place of business is:

Registered Office Principal Place of Business

54LyonsStreet

MundubberaQLD4626

54LyonsStreet

MundubberaQLD4626



Note26.Financialinstruments

FinancialInstrumentCompositionandMaturityAnalysis

Thetablebelowreflectstheundiscountedcontractualsettlementtermsforallfinancialinstruments,aswellasthe

settlementperiodforinstrumentswithafixedperiodofmaturityandinterestrate.

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

4,841 - - - - - - - - - Nil Nil

Receivables - - - - - - - - 34,799 32,735 N/A N/A

Financial liabilities

Interest bearing liabilities

- 462,889 400,000 - - - - - - - 4.57 4.83

Payables - - - - - - - - 2,542 3,659 N/A N/A

NetFairValues

Thenetfairvaluesoffinancialassetsandliabilitiesapproximatethecarryingvaluesasdisclosedinthebalance

sheet.Thecompanydoesnothaveanyunrecognisedfinancialinstrumentsattheyearend.

CreditRisk

Themaximumexposuretocreditriskatbalancedatetorecognisedfinancialassetsisthecarryingamountof

thoseassetsasdisclosedinthebalancesheetandnotestothefinancialstatements.

Therearenomaterialcreditriskexposurestoanysingledebtororgroupofdebtorsunderfinancialinstruments

entered into by the economic entity.

InterestRateRisk

Interestrateriskreferstotheriskthatthevalueofafinancialinstrumentorcashflowsassociatedwiththe

instrumentwillfluctuateduetochangesinmarketinterestrates.Interestrateriskarisesfromtheinterestbearing

financialassetsandliabilitiesinplacesubjecttovariableinterestrates,asoutlinedabove.

SensitivityAnalysis

Thecompanyhasperformedsensitivityanalysisrelatingtoitsexposuretointerestrateriskatbalancedate.

Thissensitivityanalysisdemonstratestheeffectonthecurrentyearresultsandequitywhichcouldresultfroma

change in interest rates.



Note26.Financialinstruments(continued)

SensitivityAnalysis(continued)

Asat30June2015,theeffectonprofitandequityasaresultofchangesininterestrate,withallothervariables

remaining constant would be as follows:

2015 $

2014 $

Changeinprofit/(loss)

Increaseininterestrateby1% (3,952) (4,629)

Decreaseininterestrateby1% (3,952) (4,629)

Changeinequity

Increaseininterestrateby1% (3,952) (4,629)

Decreaseininterestrateby1% (3,952) (4,629)


Directors’declarationInaccordancewitharesolutionofthedirectorsofNorthBurnettCommunityEnterprisesLimited,westatethat:

Intheopinionofthedirectors:

(a) thefinancialstatementsandnotesofthecompanyareinaccordancewiththeCorporationsAct2001,

including:

(i) givingatrueandfairviewofthecompany’sfinancialpositionasat30June2015andofitsperformance

forthefinancialyearendedonthatdate;and

(ii) complyingwithAccountingStandards,theCorporationsRegulations2001andothermandatoryprofessional

reportingrequirements;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.

Paul Jeffrey Dare,

Chairman

Signedonthe15thofSeptember2015.


Independentauditreport


Independentauditreport(continued)

bendigobank.com.au

Mundubbera Community Bank® Branch 54 Lyons Street, Mundubbera QLD 4626Phone: (07) 4165 3798 Fax: (07) 4165 3829

Franchisee: North Burnett Community Enterprises Limited54 Lyons Street, Mundubbera QLD 4626Phone: (07) 4165 3798 Fax: (07) 4165 3829ABN: 33 120 578 565

www.bendigobank.com.au/mundubbera (BMPAR15059) (08/15)

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