Post on 19-Mar-2020
Inglewood & Districts Community Bank®Branch
Annual Report2015
ABN 87 123 959 375
Inglewood & Districts CommunityEnterprises Limited
Annual report Inglewood & Districts 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 Inglewood & Districts Community Enterprises Limited2
For year ending 30 June 2015
Another successful year and a $1 million milestone is within our grasp. Before the end of the current calendar year,
returns from your Community Bank® branch to our community in the form of grants, sponsorships and shareholder
dividends will exceed the $1 million mark. I congratulate and thank all involved in this achievement including our
staff, shareholders and customers. I and look forward to the next million.
Some highlights this year include:
• WehavefinancedthepurchaseofanewtruckthatwillbeusedbyHelpingHandsMissiontodistributefood
and household goods throughout much of Victoria. The Board views the relationship between our community
andHelpingHandsasasymbioticunionentirelyinkeepingwithouroriginalvisionandmission.
• TheredevelopmentoftheInglewoodTownHallisgoingaheadthanks,inpart,toour$100,000contribution.
• Wecontinuetoprovidescholarshipsforschoolleaversenteringtheirfirstyearoftertiaryeducation.
• Thegrowthofourbusinesshasbeenparalleledbygrowthinassociatedsecretarial,administrativeandmedia
duties.ConsequentlywehaveemployedKimHanlononapart-timebasistocarryoutmanyoftheseexecutive
tasks. I am delighted to report that Kim is operating in a very dedicated, thorough and professional manner.
• JillMcFarlanehasresignedfromtheBoardandretiredtoMelbourne.JillwasadiligentandthoughtfulBoard
memberandisthankedforhercontribution.WehavewelcomedDavidPetersontotheBoard.Davidcomesto
us with an employment history and a community spirit that will be of immense value.
Thanksonceagaintoourstaff,customersandshareholders.Welookforwardtobuildingonoursuccess.
Max Higgs,
Chairman.
Chairman’s report
Annual report Inglewood & Districts Community Enterprises Limited 3
For year ending 30 June 2015
It is with pleasure and pride that I reflect and report on the past 12 months of our business. Each year brings
differentchallengeswithinourbusinessbutwecontinuetogrow,generateprofitandcontributefundsbackintoour
local communities.
TheInglewood&DistrictsCommunity Bank® Branch has now been operating for eight years and it is very much a
storyofsuccess,havingbeenprofitableeachyearsinceopeningin2007andregulardividendsbeingpaidtoour
shareholders.
Thebusinesssizehascontinuedtogroweachyearandasat30June2015ourbranchfigureswere:
• Depositfootings $44.3million
• Lendingfootings $41.9million
• Otherbusiness $21.5million
• Totalbusiness $109.7million.
The2014/15financialyearsawtheoverallbusinessgrowfrom$106.5millionto$109.7million,agrowthof
$3.2 million for the year which is almost double the previous year’s growth.
Wecontinuetosupportandcontributetothemanyprojectsthroughourgrantsandsponsorshipsandcelebrate
thatweareabletoassisttheminachievingtheirdesiredresultswith$102,941beingtheamountfundedfor
the2014/15year.Overallcontributionssinceopeningin2007nowstandatprojects/sponsorship$688,394,
scholarships$30,000plus$100,000committedtotherestorationofInglewoodTownHalland$100,000
committedtoSerpentineRecreationReserve,atotalof$918,394.
Wearelookingforwardtocelebratingourfirst$1millionincontributions.Whatanamazingresultcreatedpurely
through our customers supporting us with their business. Your banking can make a difference so if you are not
already a customer please consider becoming one.
ThebranchisfortunatetohaveagreatteaminJon(MobileRelationshipManager),Suzanne(Customer
RelationshipOfficer),Stewart,RuthandNat(CustomerServiceOfficers).Theyareallwellversedintheirrolesand
dedicated to the success of our business, our customers and the community.
FinallyIwouldliketothankthebranchstaff,LeighRandallandtheWedderburnagencystaff,BoardofDirectors,
regionalofficestaff,shareholdersandcustomers.Thesewonderfulresultscouldnotbeachievedwithoutyour
continued support.
I look forward to the year ahead and the opportunity to further invest in the success of our business and our
community.
Jill Burdett
Branch Manager.
Manager’sreport
Annual report Inglewood & Districts Community Enterprises Limited4
Directors’reportForthefinancialyearended30June2015
Yourdirectorssubmitthefinancialstatementsofthecompanyforthefinancialyearended30June2015.
Directors
Thenamesanddetailsofthecompany’sdirectorswhoheldofficeduringorsincetheendofthefinancialyear:
Maxwell Charles Higgs
Chairman
GeneralMedicalPractitioner
GraduatedMBBSUniversityofMelbournein1981.HasworkedasaGeneralPractitionerintheareaforthe
past30years.Maxserved3yearsasCouncillorfortheInglewoodRidingShireofLoddon,previouslyamember
ofInglewood&DistrictHealthServicesBoardofManagement.
Chairman,AuditCommittee&HumanResourcesCommittee
Interest in shares: 3,001
Kenneth John Canfield
Treasurer
PrimaryProducer
HeldexecutivepositionswiththeInglewoodGolfandBowlsClubs,MemberofSalisburyWestLandcareGroup
andmemberofSalisbury/PowlettFireBrigade.Farmedintheareaforover50years.
Treasurer, Governance, Audit
Interests in shares: 1,001
Kim Hanlon
Secretary
Manager&ExecutiveOfficer
KimiscurrentlytheExecutiveOfficerofourorganisationandistheManageroftheInglewoodCommunity
NeighbourhoodHouse.HerqualificationsincludeaDiplomaofBusinessandCertificateIVinWorkplace
AssessmentandTraining.KimhasanextensivecareerinOfficeAdministrationandBookkeeping.Sheisthe
SecretaryandTreasureroftheInglewoodTourismandDevelopmentCommitteeandisastrongadvocatefor
CommunityDevelopmentandSocialJustice.KimisagraduateoftheLoddonMurrayCommunityLeadership
Programwhichshecompletedin2010.
MinutetakerofSponsorships,GrantsandMarketingSub-Committee
Interestinshares:Nil
Andrew Richard Smith
Director
OperationsManager
AndrewistheOperationsManagerforalocalfertilizercompany.HeservesontheBoardofStMary’sPrimary
SchoolandisamemberoftheInglewoodCountryFireAuthoritywhereheholdsthepositionofLieutenant.He
isalsotheCFALoddonSouthGroupDeputyGroupOfficer.
MarketingandSponsorshipcommittee
Interests in shares: 1,001
Annual report Inglewood & Districts Community Enterprises Limited 5
Directors’report(continued)
Directors (continued)
Simon Patrick Tuohey
Director
PrimaryProducer
CurrentSecretaryforSerpentineCFA,memberofSerpentinePlanCommittee,BearsLagoonSerpentine
FootballClubCommittee(previouslypresident)andmemberofSerpentineTennisClub.
Interests in shares: 2500
Colleen Mary Condliffe
Director
PrimaryProducer/LoddonShireCouncillor
ColleenhasaBio-ChemistryDegreeandisapartofarangeofcommunityorganisations.Sheisaboard
memberoftheWomenHealthLoddonMallee,theRuralFinancialCounsellingServiceandtheInglewood
CommunityNeighbourhoodHouse.SheisalsoaLoddonShireCouncillorandamemberoftheNewbridgeCWA
andtheSalisburyWestLandcareGroup.
DingeeBushNursingCentreBoardandMarketingCommittee
Interestinshares:Nil
David Allan Edwards
Director
MangerandBusinessOwner
Dave(togetherwithwifeLeanne)isco-ownerandManagerofBridgewaterFarmware,aruralsuppliesand
servicesbusinessinBridgewater.DaveisalsoPresidentoftheSchoolCouncilatBridgewateronLoddon
PrimarySchoolandVicePresidentoftheBridgewateronLoddonDevelopmentCommittee.Davidhasatertiary
qualificationinengineering,ProjectandOperationalManagement.PriortorunningFarmware,heldvarious
corporateOperationsManagementrolesoverthepast15years.
HRSubCommittee
Interests in shares: 500
Linda Joy Younghusband
Director
FarmingAssistant/MedicalReceptionist
Previouslyco-owneroffamilybusiness,WilliamsonStreet24HourStoreinBendigofor12years.Currently
runfamilyfarmaswellasacasualmedicalreceptionist.MemberoftheInglewoodPrimarySchoolParents
AssociationparticipatingastheSecretaryandTreasurer.CurrentlyamemberoftheWedderburnCollege
ParentsAssociation,holdthepositionofInglewoodSchoolCouncillorandactivelyinvolvedinWedderburn
sportinggroups,includingbeingsecretary/treasureratArnoldCricketClub.
Marketing&SponsorshipCommitteeandScholarshipselection
Interests in shares: 500
Stewart Dean Luckman
Director
Banker
PreviouslyemployedasaFlourMilleratLauckeFlourMill.CurrentlyemployedasaBankerattheInglewood&
DistrictsCommunity Bank®Branch.MemberoftheInglewoodLionsClub,committeememberoftheInglewood
ChristmasCarolsevent,memberoftheAustraliaDaycelebrations,memberoftheInglewoodPrimarySchool
ParentsAssociation,memberofInglewood&BridgewaterMen’sShedaswellasbeingasocialmemberofthe
InglewoodandBridgewaterRSLandaCentralUmpirefortheLoddonValleyFootballLeague.
Sponsorship&MarketingCommittee
Interestinshares:Nil
Annual report Inglewood & Districts Community Enterprises Limited6
Directors’report(continued)
Directors (continued)
Dale Thomas Jackson
Director
TechnicalOfficerEngineer
TechnicalDesignOfficerattheShireofLoddoninfrastructureDepartment.DiplomaofEngineering,Vice
PresidentoftheWedderburnBowlsClub,VicePresidentofWedderburnKorongvaleRSLInc,DonaldsonPark
CommitteeMemberandWedderburnCommunity Bank®BranchSteeringCommitteeMember.AlsoaBrick
layer, concreter and shearer.
Marketing,InglewoodHallHubProject
Interests in shares: 501
Jill McFarlane
Director(Resigned28April2015)
Retired
Secretaryoffamilyfarmingbusiness.ChairofManagementBoardofHeritageIndustriesMtGambier,Audit
CommitteeofNCCMABendigoandWedderburnConservationManagementNetwork.MemberofHeritage
Industriesfor21years(sinceestablishment).AlsopreviouslyBoardmemberforNorthCentralCatchment
ManagementAuthority.PreviouslyCouncillorforVictorianEnvironmentalAssessmentCouncil.Currentlymember
ofvariouscommunitygroupsandassociations.Previousemploymenthistoryincludes26yearsasmedical
social worker in regional hospitals.
AuditCommittee,Marketing&Sponsorship
Interests in shares: 1,500
Directorswereinofficeforthisentireyearunlessotherwisestated.
Nodirectorshavematerialinterestsincontractsorproposedcontractswiththecompany.
Company Secretary
ThecompanysecretaryisKimHanlon.KimwasappointedtothepositionofSecretaryon26November2013.
KimiscurrentlytheExecutiveOfficerofourorganisationandistheManageroftheInglewoodCommunity
NeighbourhoodHouse.HerqualificationsincludeaDiplomaofBusinessandCertificateIVinWorkplace
AssessmentandTraining.KimhasanextensivecareerinOfficeAdministrationandBookkeeping.Sheisthe
SecretaryandTreasureroftheInglewoodTourismandDevelopmentCommitteeandisastrongadvocatefor
CommunityDevelopmentandSocialJustice.KimisagraduateoftheLoddonMurrayCommunityLeadership
Programwhichshecompletedin2010.
Principal Activities
TheprincipalactivitiesofthecompanyduringthefinancialyearwerefacilitatingCommunity Bank® services under
managementrightstooperateafranchisedbranchofBendigoandAdelaideBankLimited.
Therehavebeennosignificantchangesinthenatureoftheseactivitiesduringtheyear.
Operating results
Operationshavecontinuedtoperforminlinewithexpectations.Theprofitofthecompanyforthefinancialyear
after provision for income tax was:
Year ended 30 June 2015$
Year ended 30 June 2014$
38,213 13,274
Annual report Inglewood & Districts Community Enterprises Limited 7
Directors’report(continued)
Remuneration report
Directors’remuneration
For the year ended 30 June 2015 the directors received total remuneration including superannuation, as follows:
$
Director,KimHanloniscontractedtotheBoardtoperformtheroleasExecutiveOfficer.Her
services are provide a hourly rate agreed with the Board, hours and times of service varies
inaccordancewiththerequirementsneededtofulfilherrole.DuringthefinancialyearKim
invoiced the company:
5,606
Directors’shareholdings
Balance at start of the year
Changes during the
year
Balance at end of the year
MaxwellCharlesHiggs 3,001 - 3,001
KennethJohnCanfield 1,001 - 1,001
KimHanlon - - -
Andrew Richard Smith 1,002 - 1,001
SimonPatrickTuohey 2,001 499 2,500
ColleenMaryCondliffe 1 1 -
DavidAllanEdwards 500 - 500
LindaJoyYounghusband 500 - 500
StewartDeanLuckman - - -
DaleThomasJackson 501 - 501
JillMcFarlane(Resigned28April2015) 7,500 6,000 1,500
Dividends
Year ended 30 June 2015
Cents $
-Dividendspaidintheyear 6 30,325
Significant changes in the state of affairs
Intheopinionofthedirectorstherewerenosignificantchangesinthestateofaffairsofthecompanythat
occurredduringthefinancialyearunderreviewnototherwisedisclosedinthisreportorthefinancialstatements.
Annual report Inglewood & Districts Community Enterprises Limited8
Directors’report(continued)
Events since the end of the financial year
Therearenomattersorcircumstancesthathavearisensincetheendofthefinancialyearthathavesignificantly
affectedormaysignificantlyaffecttheoperationsofthecompanytheresultsofthoseoperationsorthestateof
affairs of the company, in future years.
Likely developments
The company will continue its policy of facilitating banking services to the community.
Environmental regulation
Thecompanyisnotsubjecttoanysignificantenvironmentalregulation.
Indemnification and insurance of directors and officers
Thecompanyhasindemnifiedalldirectorsandthemanagerinrespectofliabilitiestootherpersons(otherthan
thecompanyorrelatedbodycorporate)thatmayarisefromtheirpositionasdirectorsormanagerofthecompany
except where the liability arises out of conduct involving the lack of good faith.
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
The number of directors’ meetings attended by each of the directors of the company during the year were:
Board Meetings Attended
Committee Meetings Attended
Audit MarketingHuman
Resources
Eligible Attended Eligible Attended Eligible Attended Eligible Attended
MaxwellCharlesHiggs 12 12 1 1 - - 4 4
KennethJohnCanfield 12 10 1 1 - - - -
KimHanlon 12 11 1 - 5 5 - -
Andrew Richard Smith 12 8 - - 12 8 1 1
SimonPatrickTuohey 12 9 - - - - - -
Colleen Condliffe 12 10 - - - - 4 4
DavidEdwards 12 11 - - - - 4 4
LindaYounghusband 12 12 - - 12 12 - -
StewartDeanLuckman 12 12 - - 12 12 - -
DaleThomasJackson 12 7 - - - - - -
JillMcFarlane(Resigned28April2015) 8 8 - - 8 8 - -
Annual report Inglewood & Districts Community Enterprises Limited 9
Directors’report(continued)
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
taking responsibility on behalf of the company for all or part of those proceedings.
NoproceedingshavebeenbroughtorintervenedinonbehalfofthecompanywithleaveoftheCourtundersection
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.
The board of directors has considered the position, in accordance with the advice received from the audit
committeeandissatisfiedthattheprovisionofthenon-auditservicesiscompatiblewiththegeneralstandardof
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-auditserviceshavebeenreviewedbytheauditcommitteetoensuretheydonotimpactonthe
impartialityandobjectivityoftheauditor
• noneoftheservicesunderminethegeneralprinciplesrelatingtoauditorindependenceassetoutinAPES110
CodeofEthicsforProfessionalAccountants,includingreviewingorauditingtheauditor’sownwork,actingin
amanagementoradecision-makingcapacityforthecompany,actingasadvocateforthecompanyorjointly
sharing economic risk and rewards.
Auditor’s independence declaration
Acopyoftheauditor’sindependencedeclarationasrequiredundersection307CoftheCorporationsAct2001is
set out on page 10.
SignedinaccordancewitharesolutionoftheboardofdirectorsatInglewood,Victoriaon27August2015.
Maxwell Charles Higgs,
Chairman
Annual report Inglewood & Districts Community Enterprises Limited10
Auditor’s independence declaration
Annual report Inglewood & Districts Community Enterprises Limited 11
Financial statementsStatementofProfitorLossandOtherComprehensiveIncome for the year ended 30 June 2015
Notes 2015 2014 $ $
Revenuefromordinaryactivities 4 835,478 819,229
Employeebenefitsexpense (389,462) (397,181)
Charitabledonations,sponsorship,advertisingandpromotion (181,173) (181,952)
Occupancyandassociatedcosts (26,749) (28,892)
Systemscosts (21,171) (21,139)
Depreciationandamortisationexpense 5 (22,919) (23,914)
Generaladministrationexpenses (139,341) (147,275)
Profit before income tax expense 54,663 18,876
Incometaxexpense 6 (16,450) (5,602)
Profit after income tax expense 38,213 13,274
Total comprehensive income for the year 38,213 13,274
Earnings per share for profit attributable to the ordinary
shareholders of the company: ¢ ¢
Basicearningspershare 20 7.56 2.63
Theaccompanyingnotesformpartofthesefinancialstatements.
Annual report Inglewood & Districts Community Enterprises Limited12
Financial statements (continued)
Balance Sheet as at 30 June 2015
Notes 2015 2014 $ $
ASSETS
Current Assets
Cashandcashequivalents 7 212,772 211,571
Tradeandotherreceivables 8 39,874 40,299
Currenttaxasset 11 - 7,184
Total Current Assets 252,646 259,054
Non-Current Assets
Property,plantandequipment 9 126,319 91,671
Intangibleassets 10 138,573 152,438
Deferredtaxasset 11 974 -
Total Non-Current Assets 265,866 244,109
Total Assets 518,512 503,163
LIABILITIES
Current Liabilities
Tradeandotherpayables 12 10,116 7,188
Currenttaxliabilities 11 6,113 -
Total Current Liabilities 16,229 7,188
Non-Current Liabilities
Deferredtaxliabilities 11 - 1,580
Total Non-Current Liabilities - 1,580
Total Liabilities 16,229 8,768
Net Assets 502,283 494,395
Equity
Issuedcapital 13 488,516 488,516
Retainedearnings 14 13,767 5,879
Total Equity 502,283 494,395
Theaccompanyingnotesformpartofthesefinancialstatements.
Annual report Inglewood & Districts Community Enterprises Limited 13
Financial statements (continued)
Statement of Changes in Equity for the year ended 30 June 2015
Issued Retained Total capital earnings equity $ $ $
Balance at 1 July 2013 488,516 22,930 511,446
Total comprehensive income for the year - 13,274 13,274
Transactions with owners in their capacity as owners:
Sharesissuedduringperiod - - -
Costsofissuingshares - - -
Dividendsprovidedfororpaid - (30,325) (30,325)
Balance at 30 June 2014 488,516 5,879 494,395
Balance at 1 July 2014 488,516 5,879 494,395
Total comprehensive income for the year - 38,213 38,213
Transactions with owners in their capacity as owners:
Sharesissuedduringperiod - - -
Costsofissuingshares - - -
Dividendsprovidedfororpaid - (30,325) (30,325)
Balance at 30 June 2015 488,516 13,767 502,283
Theaccompanyingnotesformpartofthesefinancialstatements.
Annual report Inglewood & Districts Community Enterprises Limited14
Financial statements (continued)
Statement of Cash Flows for the year ended 30 June 2015
Notes 2015 2014 $ $
Cash flows from operating activities
Receiptsfromcustomers 925,634 862,145
Paymentstosuppliersandemployees (850,480) (821,727)
Interestreceived 7,076 8,134
Incometaxespaid (5,707) (13,846)
Net cash provided by operating activities 15 76,523 34,706
Cash flows from investing activities
Paymentsforproperty,plantandequipment (50,770) (13,065)
Proceedsofproperty,plantandequipment 5,773 -
Net cash provided by/(used in) investing activities (44,997) (13,065)
Cash flows from financing activities
Dividendspaid (30,325) (30,325)
Net cash provided by/(used in) financing activities (30,325) (30,325)
Net increase/(decrease) in cash held 1,201 (8,684)
Cashandcashequivalentsatthebeginningofthefinancialyear 211,571 220,255
Cash and cash equivalents at the end of the financial year 7(a) 212,772 211,571
Theaccompanyingnotesformpartofthesefinancialstatements.
Annual report Inglewood & Districts Community Enterprises Limited 15
NotestothefinancialstatementsFor year ended 30 June 2015
Note1.Summaryofsignificantaccountingpolicies
a) Basis of preparation
ThesegeneralpurposefinancialstatementshavebeenpreparedinaccordancewithAustralianAccounting
Standards and Interpretations issued by the Australian Accounting Standard Boards and the Corporations Act
2001.Thecompanyisafor-profitentityforthepurposeofpreparingthefinancialstatements.
Compliance with IFRS
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.
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,
andarethereforerelevantforthecurrentfinancialyear.
• 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).
Annual report Inglewood & Districts Community Enterprises Limited16
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.
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
forAcquisitionsofInterestsinJointOperations.1January2016
AASB2014-4AmendmentstoAustralianAccountingStandards–Clarification
ofAcceptableMethodsofDepreciationandAmortisation.1January2016
AASB2014-6AmendmentstoAustralianAccountingStandards–Agriculture:
BearerPlants.1January2016
AASB2014-9AmendmentstoAustralianAccountingStandards–Equity
MethodinSeparateFinancialStatements.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: Applying the Consolidation Exception.1January2016
Annual report Inglewood & Districts Community Enterprises Limited 17
Notestothefinancialstatements(continued)
Note1.Summaryofsignificantaccountingpolicies(continued)
a) Basis of preparation (continued)
Applicationofnewandamendedaccountingstandards(continued)
The company has not elected to apply any accounting standards or interpretations before their mandatory
operativedatefortheannualreportingperiodbeginning1July2014.Thereforetheabovementionedaccounting
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 Inglewood, Victoria.
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,leasesorhirepurchasetransactions,issuesofnewcreditordebitcards,temporaryorbridgingfinanceand
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
financialstatements.Theaccountingpolicieshavebeenconsistentlyapplied,unlessotherwisestated.
Annual report Inglewood & Districts Community Enterprises Limited18
Notestothefinancialstatements(continued)
Note1.Summaryofsignificantaccountingpolicies(continued)
b) Revenue
Revenue is recognised when the amount of revenue can be reliably measured, it is probable that future economic
benefitswillflowtothecompanyandanyspecificcriteriahavebeenmet.Interestandfeerevenueisrecognised
when earned. The gain or loss on disposal of property, plant and equipment is recognised on a net basis and is
classifiedasincomeratherthanrevenue.AllrevenueisstatednetoftheamountofGoodsandServicesTax(GST).
Revenue calculation
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.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.
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.
Core banking products
BendigoandAdelaideBankLimitedhasidentifiedsomeBendigoBankGroupproductsandservicesas‘core
bankingproducts’.Itmaychangetheproductsandserviceswhichareidentifiedascorebankingproductsbygiving
the company at least 30 days’ notice. Core banking products currently include Bendigo Bank branded home loans,
term deposits and at call deposits.
Margin
Marginisarrivedatthroughthefollowingcalculation:
• 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.
Productsandservicesonwhichmarginispaidincludevariableratedepositsandvariableratehomeloans.From
1July2016,examplesincludeBendigoBankbrandedatcalldeposits,termdepositsandhomeloans.
Annual report Inglewood & Districts Community Enterprises Limited 19
Notestothefinancialstatements(continued)
Note1.Summaryofsignificantaccountingpolicies(continued)
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.
Commission is payable on the sale of an insurance product such as home contents. Examples of products and
servicesonwhichongoingcommissionsarepaidincludeleasingandSandhurstTrusteesLimitedproducts.This
currentlyalsoincludesBendigoBankbrandedfixedratehomeloansandtermdepositsofmorethan90days,but
thesewillbecomemarginproductsfrom1July2016.
Fee income
Fee income is a share of what is commonly referred to as ‘bank fees and charges’ charged to customers by
Bendigo Bank Group entities including fees for loan applications and account transactions.
Abilitytochangefinancialreturn
Underthefranchiseagreement,BendigoandAdelaideBankLimitedmaychangetheformandamountoffinancial
return that the company receives. The reasons it may make a change include changes in industry or economic
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
and services, it must not reduce the margin and commission the company receives on core banking products and
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
principle of shared reward for shared effort. In particular, in relation to core banking products and services, the aim
istoachieveanequalshareofBendigoandAdelaideBankLimited’smargin.
Annual report Inglewood & Districts Community Enterprises Limited20
Notestothefinancialstatements(continued)
Note1.Summaryofsignificantaccountingpolicies(continued)
b) Revenue (continued)
Monitoringandchangingfinancialreturn(continued)
AsdiscussedaboveinrelationtoProjectHorizon,amongotherthings,therewillbechangesinthefinancialreturn
for Community Bank®companiesfrom1July2016.Thisincludes50%shareofmarginoncorebankingproducts,
all core banking products become margin products and a funds transfer pricing model will be used for the method
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
taxableprofitorlossfortheperiod.Itiscalculatedusingtaxratesandtaxlawsthathavebeenenactedor
substantively enacted by reporting date. Current tax for current and prior periods is recognised as a liability (or
asset)totheextentthatitisunpaid(orrefundable).
Deferredtax
Deferredtaxisaccountedforusingthebalancesheetliabilitymethodontemporarydifferencesarisingfrom
differencesbetweenthecarryingamountofassetsandliabilitiesinthefinancialstatementsandthecorresponding
tax base of those items.
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
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.
Deferredtaxassetsandliabilitiesareoffsetwhenthereisalegallyenforceablerighttooffsetcurrenttaxand
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
which case it is taken into account in the determination of goodwill or excess.
Annual report Inglewood & Districts Community Enterprises Limited 21
Notestothefinancialstatements(continued)
Note1.Summaryofsignificantaccountingpolicies(continued)
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
thosebenefits.
Thecompanycontributestoadefinedcontributionplan.Contributionstoemployeesuperannuationfundsare
charged against income as incurred.
e) Cash and cash equivalents
For the purposes of the Statement of Cash Flows, cash includes cash on hand and in banks and investments in
money market instruments, net of outstanding bank overdrafts. Bank overdrafts are shown within borrowings in
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
Plantandequipment,leaseholdimprovementsandequipmentunderfinanceleasearestatedatcostless
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.
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 40years
• 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.
Annual report Inglewood & Districts Community Enterprises Limited22
Notestothefinancialstatements(continued)
Note1.Summaryofsignificantaccountingpolicies(continued)
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
Recognition and initial measurement
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
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is
transferredtoanotherpartywherebytheentitynolongerhasanysignificantcontinuinginvolvementintherisks
andbenefitsassociatedwiththeasset.
Classificationandsubsequentmeasurement
(i) Loansandreceivables
Loansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenot
quoted in an active market and are subsequently measured at amortised cost using the effective interest rate
method.
(ii) Held-to-maturityinvestments
Held-to-maturityinvestmentsarenon-derivativefinancialassetsthathavefixedmaturitiesandfixedor
determinable payments, and it is the entity’s intention to hold these investments to maturity. They are
subsequently measured at amortised cost using the effective interest rate method.
(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.
Annual report Inglewood & Districts Community Enterprises Limited 23
Notestothefinancialstatements(continued)
Note1.Summaryofsignificantaccountingpolicies(continued)
k) Financial instruments (continued)
Impairment
Ateachreportingdate,theentityassesseswhetherthereisobjectiveevidencethatafinancialinstrumenthas
beenimpaired.ImpairmentlossesarerecognisedintheStatementofProfitorLossandOtherComprehensive
Income.
l) Leases
Leasesoffixedassetswheresubstantiallyalltherisksandbenefitsincidentaltotheownershipoftheasset,
butnotthelegalownershiparetransferredtothecompanyareclassifiedasfinanceleases.Financeleasesare
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
futuresacrificeofeconomicbenefitstootherentitiesasaresultofpasttransactionsofotherpastevents,itis
probablethatafuturesacrificeofeconomicbenefitswillberequiredandareliableestimatecanbemadeofthe
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
Ordinarysharesarerecognisedatthefairvalueoftheconsiderationreceivedbythecompany.Anytransaction
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
Basicearningspershareiscalculatedbydividingtheprofitattributabletoequityholdersofthecompany,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
the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is
recognised as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, 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
payableto,thetaxationauthorityareclassifiedasoperatingcashflows.
Annual report Inglewood & Districts Community Enterprises Limited24
Notestothefinancialstatements(continued)
Note2.FinancialriskmanagementThecompany’sactivitiesexposeittoalimitedvarietyoffinancialrisks:marketrisk(includingcurrencyrisk,fair
valueinterestriskandpricerisk),creditrisk,liquidityriskandcashflowinterestraterisk.Thecompany’soverall
riskmanagementprogramfocusesontheunpredictabilityoffinancialmarketsandseekstominimisepotential
adverseeffectsonthefinancialperformanceoftheentity.Theentitydoesnotusederivativeinstruments.
Risk management is carried out directly by the board of directors.
(i)Marketrisk
The company has no exposure to any transactions denominated in a currency other than Australian dollars.
(ii)Pricerisk
The company is not exposed to equity securities price risk as it does not hold investments for sale or at fair value.
The company is not exposed to commodity price risk.
(iii)Creditrisk
Thecompanyhasnosignificantconcentrationsofcreditrisk.Ithaspoliciesinplacetoensurethatcustomers
have an appropriate credit history. The company’s franchise agreement limits the company’s credit exposure to one
financialinstitution,beingBendigoandAdelaideBankLimited.
(iv)Liquidityrisk
Prudentliquiditymanagementimpliesmaintainingsufficientcashandmarketablesecuritiesandtheavailability
of funding from credit facilities. The company believes that its sound relationship with Bendigo and Adelaide Bank
Limitedmitigatesthisrisksignificantly.
(v)Cashflowandfairvalueinterestraterisk
Interest-bearingassetsareheldwithBendigoandAdelaideBankLimitedandsubjecttomovementsinmarket
interest.Interest-rateriskcouldalsoarisefromlong-termborrowings.Borrowingsissuedatvariableratesexpose
thecompanytocashflowinterest-raterisk.ThecompanybelievesthatitssoundrelationshipwithBendigoand
AdelaideBankLimitedmitigatesthisrisksignificantly.
(vi)Capitalmanagement
The board’s policy is to maintain a strong capital base so as to sustain future development of the company. 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%.
Annual report Inglewood & Districts Community Enterprises Limited 25
Notestothefinancialstatements(continued)
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.
There were no changes in the company’s approach to capital management during the year.
Note3.CriticalaccountingestimatesandjudgementsEstimatesandjudgementsarecontinuallyevaluatedandarebasedonhistoricalexperienceandotherfactors,
includingexpectationsoffutureeventsthatmayhaveafinancialimpactontheentityandthatarebelievedtobe
reasonable under the circumstances.
The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition,seldomequaltherelatedactualresults.
Managementhasidentifiedthefollowingcriticalaccountingpoliciesforwhichsignificantjudgements,estimates
and assumptions are made. Actual results may differ from these estimates under different assumptions and
conditionsandmaymateriallyaffectfinancialresultsorthefinancialpositionreportedinfutureperiods.
Further details of the nature of these assumptions and conditions may be found in the relevant notes to the
financialstatements.
Taxation
Judgement is required in assessing whether deferred tax assets and certain tax liabilities are recognised on
thebalancesheet.Deferredtaxassets,includingthosearisingfromun-recoupedtaxlosses,capitallossesand
temporary differences, are recognised only where it is considered more likely than not that they will be recovered,
whichisdependentonthegenerationofsufficientfuturetaxableprofits.
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.
Estimation of useful lives of assets
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.
Annual report Inglewood & Districts Community Enterprises Limited26
Notestothefinancialstatements(continued)
Note3.Criticalaccountingestimatesandjudgements(continued)
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the company’s share of the net
identifiableassetsoftheacquiredbranch/agencyatthedateofacquisition.Goodwillonacquisitionisincludedin
intangible assets. Goodwill is not amortised. Instead, goodwill is tested for impairment annually, or more frequently
if events or changes in circumstances indicate that it might be impaired and is carried at cost less accumulated
impairment losses.
The calculations require the use of assumptions.
Impairment of assets
At each reporting date, the company reviews the carrying amounts of its tangible and intangible assets that have
anindefiniteusefullifetodeterminewhetherthereisanyindicationthatthoseassetshavesufferedanimpairment
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.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, 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
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
inprofitorlossimmediately,unlesstherelevantassetiscarriedatfairvalue,inwhichcasethereversalofthe
impairment loss is treated as a revaluation increase.
2015 2014 $ $
Note4.RevenuefromordinaryactivitiesOperatingactivities:
-servicescommissions 827,849 810,420
-otherrevenue 517 719
Total revenue from operating activities 828,366 811,139
Non-operatingactivities:
-interestreceived 7,112 8,090
Total revenue from non-operating activities 7,112 8,090
Total revenues from ordinary activities 835,478 819,229
Annual report Inglewood & Districts Community Enterprises Limited 27
Notestothefinancialstatements(continued)
Note5.Expenses Depreciationofnon-currentassets:
-plantandequipment 4,457 3,006
-leaseholdimprovements 4,598 7,043
Amortisationofnon-currentassets:
-franchiseagreement 2,311 2,311
-franchiserenewalfee 11,553 11,554
22,919 23,914
Bad debts 154 1,841
Loss on disposal of asset 1,295 -
Note6.IncometaxexpenseThe components of tax expense comprise:
-Currenttax 19,004 5,583
-Movementindeferredtax (2,606) 80
-Adjustmenttodeferredtaxtoreflectchangetotaxrateinfutureperiods 52 -
-Under/(Over)provisionoftaxinthepriorperiod - (61)
16,450 5,602
Theprimafacietaxonprofitfromordinaryactivitiesbeforeincometaxis
reconciled to the income tax expense as follows
Operatingprofit 54,663 18,876
Primafacietaxonprofitfromordinaryactivitiesat30% 16,398 5,663
Add tax effect of:
-timingdifferenceexpenses 2,606 (80)
19,004 5,583
Movementindeferredtax (2,606) 80
Adjustmenttodeferredtaxtoreflectchangeoftaxrateinfutureperiods 52 -
Under/(Over)provisionofincometaxintheprioryear - (61)
16,450 5,602
2015 2014 $ $
Annual report Inglewood & Districts Community Enterprises Limited28
Notestothefinancialstatements(continued)
Note7.CashandcashequivalentsCashatbankandonhand 12,772 11,571
Term deposits 200,000 200,000
212,772 211,571
Note 7.(a) Reconciliation to cash flow statement
TheabovefiguresreconciletotheamountofcashshownintheStatement
ofCashFlowsattheendofthefinancialyearasfollows:
Cashatbankandonhand 12,772 11,571
Term deposits 200,000 200,000
212,772 211,571
Note8.Tradeandotherreceivables Tradereceivables 27,418 34,301
Prepayments 5,262 5,171
Otherreceivablesandaccruals 7,194 827
39,874 40,299
Note9.Property,plantandequipmentLeaseholdimprovements
Atcost 147,109 134,129
Lessaccumulateddepreciation (61,236) (56,638)
85,873 77,491
Plantandequipment
Atcost 31,054 29,487
Lessaccumulateddepreciation (24,909) (24,017)
6,145 5,470
Motorvehicles
Atcost 36,224 11,364
Lessaccumulateddepreciation (1,923) (2,654)
34,301 8,710
Total written down amount 126,319 91,671
2015 2014 $ $
Annual report Inglewood & Districts Community Enterprises Limited 29
Notestothefinancialstatements(continued)
Note9.Property,plantandequipment(continued)
Movements in carrying amounts:
Leaseholdimprovements
Carryingamountatbeginning 77,491 83,208
Additions 12,980 -
Disposals - -
Less:depreciationexpense (4,598) (5,717)
Carrying amount at end 85,873 77,491
Plantandequipment
Carryingamountatbeginning 5,470 5,448
Additions 1,567 1,700
Disposals - -
Less:depreciationexpense (892) (1,678)
Carrying amount at end 6,145 5,470
Motorvehicles
Carryingamountatbeginning 8,710 -
Additions 36,224 11,364
Disposals (11,364) -
Less:depreciationexpense 731 (2,654)
Carrying amount at end 34,301 8,710
Total written down amount 126,319 91,671
Note10.IntangibleassetsFranchise fee
Atcost 21,554 21,554
Less:accumulatedamortisation (17,125) (14,814)
4,429 6,740
Renewal processing fee
Atcost 57,768 57,768
Less:accumulatedamortisation (35,624) (24,070)
22,144 33,698
2015 2014 $ $
Annual report Inglewood & Districts Community Enterprises Limited30
Notestothefinancialstatements(continued)
Note10.Intangibleassets(continued)
Goodwill on purchase of agency
At cost 112,000 112,000
Less:accumulatedimpairmentlosses - -
112,000 112,000
Total written down amount 138,573 152,438
Note11.TaxCurrent:
Income tax payable/(refundable) 6,113 (7,184)
Non-Current:
Deferredtaxassets
-accruals 1,012 -
1,012 -
Deferredtaxliability
-accruals 38 29
-deductibleprepayments - 1,551
38 1,580
Net deferred tax asset/(liability) 974 (1,580)
Movement in deferred tax charged to Statement of Profit or Loss
and Other Comprehensive Income (2,554) (80)
Note12.TradeandotherpayablesCurrent:
Tradecreditors 6,566 3,638
Othercreditorsandaccruals 3,550 3,550
10,116 7,188
Note13.Contributedequity505,412ordinarysharesfullypaid(2014:505,412) 505,412 505,412
Less:equityraisingexpenses (16,896) (16,896)
488,516 488,516
2015 2014 $ $
Annual report Inglewood & Districts Community Enterprises Limited 31
Notestothefinancialstatements(continued)
Note13.Contributedequity(continued)
Rights attached to shares
(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.
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, dividends are payable to members in proportion to the amount of the share capital paid up on the
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’s constitution and the Corporations Act 2001.
Prohibitedshareholdinginterest
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
numberis298.Asatthedateofthisreport,thecompanyhad324shareholders.
Aswithvotingrights,thepurposeofthisprohibitedshareholdingprovisionistoreflectthecommunity-basednature
of the company.
Whereapersonhasaprohibitedshareholdinginterest,thevotinganddividendrightsattachingtothesharesin
whichtheperson(andhisorherassociates)haveaprohibitedshareholdinginterest,aresuspended.
Annual report Inglewood & Districts Community Enterprises Limited32
Notestothefinancialstatements(continued)
Note13.Contributedequity(continued)
Prohibitedshareholdinginterest(continued)
Theboardhasthepowertorequestinformationfromapersonwhohas(orissuspectedbytheboardofhaving)
alegalorbeneficialinterestinanysharesinthecompanyoranyvotingpowerinthecompany,forthepurposeof
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
tosellthespecifiedsharesonbehalfofthatperson.Theholderwillbeentitledtotheconsiderationfromthesale
of the shares, less any expenses incurred by the board in selling or otherwise dealing with those shares.
In the constitution, members acknowledge and recognise that the exercise of the powers given to the board may
cause considerable disadvantage to individual members, but that such a result may be necessary to enforce the
prohibition.
2015 2014 $ $
Note14.RetainedearningsBalanceatthebeginningofthefinancialyear 5,879 22,930
Netprofitfromordinaryactivitiesafterincometax 38,213 13,274
Dividendspaidorprovidedfor (30,325) (30,325)
Balance at the end of the financial year 13,767 5,879
Note15.StatementofcashflowsReconciliationofprofitfromordinaryactivitiesaftertaxtonetcashprovided
by operating activities
Profitfromordinaryactivitiesafterincometax 38,213 13,274
Noncashitems:
-depreciation 9,055 10,049
-amortisation 13,864 13,865
-lossondisposalofasset 1,295 -
Changes in assets and liabilities:
-(increase)/decreaseinreceivables 425 3,710
-(increase)/decreaseinotherassets 6,210 80
-increase/(decrease)inpayables 2,928 2,052
-increase/(decrease)incurrenttaxliabilities 4,533 (8,324)
Net cash flows provided by operating activities 76,523 34,706
Annual report Inglewood & Districts Community Enterprises Limited 33
Notestothefinancialstatements(continued)
Note16.LeasesOperatingleasecommitments
Non-cancellableoperatingleasescontractedforbutnotcapitalisedin
thefinancialstatements
Payable-minimumleasepayments:
-notlaterthan12months 12,000 12,000
-between12monthsand5years 23,000 35,000
-greaterthan5years - -
35,000 47,000
The property lease is linked to the company’s Franchise Agreement with Bendigo
andAdelaideBankLimited,theFranchiserenewalwason1June2012withtwo,
5 year extension options available. As at reporting date the new lease agreement
hadnotbeenfinalisedandisinthehandsoflegalrepresentatives.Thereisno
indication to suggest it will not be renewed.
Note17.Auditor’sremuneration Amounts received or due and receivable by the auditor of the company for:
-auditandreviewservices 5,050 4,950
-shareregistryservices 3,517 2,719
-nonauditservices 2,615 2,447
11,182 10,116
Note18.Directorandrelatedpartydisclosures
KeyManagementPersonnelRemuneration
Short-term employee benefits 5,606 -
Note19.Dividendspaidorprovideda. Dividends paid during the year
Current year dividend
100% (2014: 100%) franked dividend - 6 cents (2014: 6 cents) per share 30,325 30,325
Thetaxrateatwhichdividendshavebeenfrankedis30%(2014:30%).
2015 2014 $ $
Annual report Inglewood & Districts Community Enterprises Limited34
Notestothefinancialstatements(continued)
Note19.Dividendspaidorprovided(continued)
b. Franking account balance
Franking credits available for subsequent reporting periods are:
- frankingaccountbalanceasattheendofthefinancialyear 24,425 31,714
- frankingcredits/(debits)thatwillarisefrompayment/(refund)of
incometaxasattheendofthefinancialyear 6,113 (7,184)
- frankingdebitsthatwillarisefromthepaymentofdividendsrecognised
asaliabilityattheendofthefinancialyear - -
Franking credits available for future financial reporting periods: 30,538 24,530
- frankingdebitsthatwillarisefrompaymentofdividendsproposedor
declaredbeforethefinancialreportwasauthorisedforusebutnot
recognisedasadistributiontoequityholdersduringtheperiod - -
Net franking credits available 30,538 24,530
Note20.Earningspershare
2015 $
2014 $
(a) Profitattributabletotheordinaryequityholdersofthecompanyused
in calculating earnings per share38,213 13,274
Number Number
(b) Weightedaveragenumberofordinarysharesusedasthe
denominator in calculating basic earnings per share505,412 505,412
Note21.EventsoccurringafterthereportingdateTherehavebeennoeventsaftertheendofthefinancialyearthatwouldmateriallyaffectthefinancialstatements.
Note22.ContingentliabilitiesandcontingentassetsTherewerenocontingentliabilitiesorcontingentassetsatthedateofthisreporttoaffectthefinancial
statements.
Note23.SegmentreportingThe economic entity operates in the service sector where it facilitates Community Bank® services in Inglewood
andsurroundingdistricts,VictoriapursuanttoafranchiseagreementwithBendigoandAdelaideBankLimited.
2015 2014 $ $
Annual report Inglewood & Districts Community Enterprises Limited 35
Notestothefinancialstatements(continued)
Note24.Registeredoffice/PrincipalplaceofbusinessTheentityisacompanylimitedbyshares,incorporatedanddomiciledinAustralia.Theregisteredofficeand
principal place of business is:
Registered Office Principal Place of Business
64BrookeStreet
InglewoodVIC3517
64BrookeStreet
InglewoodVIC3517
Note25.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
12,672 11,471 200,000 200,000 - - - - 100 100 2.75 3.1
Receivables - - - - - - - - 27,418 34,301 N/A N/A
Financial liabilities
Payables - - - - - - - - 6,566 3,638 N/A N/A
NetFairValues
Thenetfairvaluesoffinancialassetsandliabilitiesapproximatethecarryingvaluesasdisclosedinthebalance
sheet.Thecompanydoesnothaveanyunrecognisedfinancialinstrumentsattheyearend.
Credit Risk
Themaximumexposuretocreditriskatbalancedatetorecognisedfinancialassetsisthecarryingamountof
thoseassetsasdisclosedinthebalancesheetandnotestothefinancialstatements.
Therearenomaterialcreditriskexposurestoanysingledebtororgroupofdebtorsunderfinancialinstruments
entered into by the economic entity.
Interest Rate Risk
Interestrateriskreferstotheriskthatthevalueofafinancialinstrumentorcashflowsassociatedwiththe
instrument will fluctuate due to changes in market interest rates. Interest rate risk arises from the interest bearing
financialassetsandliabilitiesinplacesubjecttovariableinterestrates,asoutlinedabove.
Annual report Inglewood & Districts Community Enterprises Limited36
Notestothefinancialstatements(continued)
Note25.Financialinstruments(continued)
Sensitivity Analysis
The company has performed sensitivity analysis relating to its exposure to interest rate risk at balance date.
This sensitivity analysis demonstrates the effect on the current year results and equity which could result from a
change in interest rates.
Asat30June2015,theeffectonprofitandequityasaresultofchangesininterestrate,withallothervariables
remaining constant would be as follows:
2015 $
2014 $
Changeinprofit/(loss)
Increaseininterestrateby1% 2,127 2,115
Decreaseininterestrateby1% 2,127 2,115
Change in equity
Increaseininterestrateby1% 2,127 2,115
Decreaseininterestrateby1% 2,127 2,115
Annual report Inglewood & Districts Community Enterprises Limited 37
Directors’declarationInaccordancewitharesolutionofthedirectorsofInglewood&DistrictsCommunityEnterprisesLimited,westate
that:
In the opinion of the directors:
(a) thefinancialstatementsandnotesofthecompanyareinaccordancewiththeCorporationsAct2001,
including:
(i) givingatrueandfairviewofthecompany’sfinancialpositionasat30June2015andofitsperformance
forthefinancialyearendedonthatdate;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.
Maxwell Charles Higgs,
Chairman
Signedonthe27thofAugust2015.
Annual report Inglewood & Districts Community Enterprises Limited38
Independent audit report
Annual report Inglewood & Districts Community Enterprises Limited 39
Independent audit report (continued)
bendigobank.com.au
Inglewood & Districts Community Bank® Branch 64 Brooke Street, Inglewood VIC 3517Phone: (03) 5438 3500 Fax: (03) 5438 3502
Franchisee: Inglewood & Districts Community Enterprises Limited64 Brooke Street, Inglewood VIC 3517ABN: 87 123 959 375www.bendigobank.com.au/inglewood
Share Registry:AFS & Associates Pty Ltd61-65 Bull Street, Bendigo VIC 3550PO Box 454, Bendigo VIC 3552Phone: (03) 5443 0344 Fax: (03) 5443 5304Email: shareregistry@afsbendigo.com.auwww.afsbendigo.com.au
(BMPAR15103) (09/15)