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Lancefield and Romsey Community Bank®branches
Annual Report2015
ABN 44 093 517 714
Lancefield & Romsey CommunityFinancial Services Limited
Annual report Lancefield & Romsey Community Financial Services Limited 1
Contents
Chairman’s report 2
Lancefield Manager’s report 4
Romsey Manager’s report 5
Directors’ report 6
Auditor’s independence declaration 12
Financial statements 13
Notes to the financial statements 17
Directors’ declaration 43
Independent audit report 44
Annual report Lancefield & Romsey Community Financial Services Limited2
For year ending 30 June 2015
The Mission Statement of Lancefield & Romsey Community Financial Services Limited states that the purpose of
our company is:
To make our community stronger by:
• operatinganefficientandprofitablecommunitybusiness,
• fundingprojectsforthefuturebenefitofthecommunity,
• providingareturntoshareholders.
Ifacompanyistobejudgedonhowwellitembracesandthendeliversonitsmissionstatement,thenIcanonly
rulethe2014/15financialyearasexceptionalandworthyofanA+grade.
Thisyear,thecompanyreportsaprofitbeforetaxationexpenseof$278,887whichisafterallowingforcommunity
grantsandsponsorshippayments,andofcourseournewlocationfortheRomseyCommunity Bank® Branch at
105MainStreet.Whilsttheopeningofthenewbranchhasbeenthehighestprofileeventoftheyear,somuch
morehashappenedthatreiteratesjusthowroundedandsignificantourCommunity Bank® branches are in our
communitiesofLancefieldandRomsey.
Thecompanyhasnowcommittedmorethan$900,000togroupsandprojectsoflocalcommunitybenefit,with
$730,000investedalreadyand$170,000heldinafundspecificallystructuredtoinvestinfuturelocalprojects.
Thisyearthecompanymadethelargestsinglecontributiontoanyspecificcommunitygroupprojectinour15-year
history,witha$40,000injectiontothecapitalprojectundertakenbytheLancefieldMechanicsInstitute.
Againthisyearthecompanyhaspaidafullyfrankeddividendtoshareholders,takingthetotaldividendspaid
todateto39centspershare.Thisisinadditiontotheearlierpaid25centspershareCapitalReturn.Since
payingthefirstdividend,eachyeartheshareholderdividendhaseitherremainedthesameorincreasedeachand
everyyear.Thetotalfinancialreturnstoshareholdersdirectlynowstandsat$646,848.Thisdemonstratesthe
company’scommitmenttorewardthosewhomadetheCommunity Bank® company possible here in Lancefield
andRomseysome15yearsago.
Ofcoursethesearetheoutcomesthatshowacompanycommittedtodeliveringonitsmissionstatementand
publicobjectives-butsuchoutcomesareonlymadepossiblebydecisionsandactionsofthosewithinthe
companywhoarepreparedtoworkforourbenefit.Tothatend,Iwouldliketothankanumberofgreatpeoplewho
arecommittedtomakingalastingdifferencetoourlocalcommunity.
• OurBranchManagers–RodBrowningandMichaelO’Gormancontinuetoshowcommitmentandpassionto
driveourtwolocalbranchesforward.Ourcustomerfeedbackcontinuestoremindusjusthowcriticalthesetwo
menaretoourbusinessgrowthgoals.
• OurBranchTeams–it’sonethingtohaveexcellentoperators(whichgoeswithoutsayinggiventheskillsof
ourteammembers).However,ourteammemberssetthemselvesapartintheirunwaveringcommitmenttothe
communityethos.Wearehumbledthatasignificantnumberofourbranchteamhavenowclockedoverfiveand
tenyearsofservice,with15years’serviceimminentforthosewhohavebeenwiththecompanysinceDayone
atLancefieldbackin2001.Suchstabilitybreedscomfortandconfidenceforlongtermcustomerrelationships.
Chairman’s report
Annual report Lancefield & Romsey Community Financial Services Limited 3
• OurBoardSupportTeam–itiswithexcitementandsadnessthatwewelcomeKalmaTappinandSallyPeeler
toourteamfollowingthedecisionsbyAliceMcMahonandEmilyBladestomoveonaftergreatserviceto
thecompany.BothAliceandEmilywillbesorelymissed,havingbothbeentrailblazersinthegrowthand
developmentofourcompanyastheinitialExecutiveOfficerandMarketingConsultant.Beingfirstatanythingis
particularlychallengingandweareextremelygratefulfortheeffortsofbothAliceandEmily.InKalmaandSally
weintroducesomeoutstandingskillstothecompanytocomplementtheexistinginfrastructureandIamsure
bothwithbesignificantcontributorstothecommunitycompanyintheyearstocome.
• OurBoard–theintroductionofthreenewBoardmembersduringtheyearhasbroughtwithitanewsenseof
passion,excitementandskilltothecommunitycompany.Thisinfusioncomplementstheongoingstabilityof
long-termDirectorswhocontinuetocommittime,talentandcareforthelocalcommunitythatcannoteverbe
takenforgrantedorunderstated.
• OurRegionalManagementTeam–thesupportofJodieMcLeodasthecompany’sRegionalManagerhasbeen
outstandingoverthelast12months.
InwrappingupthisreportIwouldliketothankthecommunity,customersandshareholders–youarethereason
this company exists and underpins the purpose for the Community Bank®model.Peoplewillcomeandgohowever
the Community Bank®branchesareheretostay,offeringafullrangeofcompetitivebankingservicesherein
LancefieldandRomseyandcontinuingtobankproofourcommunity.
Ifyouarealreadyfullyonboardwethankyou,ifyouarepartiallyonboardIaskthatyougivethecompanythe
opportunitytofullyserviceyourbankingneeds,andifyouareyettogetonboard,jointhemovementtotakethis
companyandcommunityforward.
Tim McCarthy
Chairman
Chairman’s report (continued)
Annual report Lancefield & Romsey Community Financial Services Limited4
For year ending 30 June 2015
WhatafantasticyearforourLancefieldCommunity Bank®Branch,madesosuccessfulbythesupportofour
wonderfulcustomers.Another340customerscameonboard,openingsavingsaccounts,takingouthomeloans
torefinancefromotherinstitutionsorbuyinganewhome.Withrecordlowinterestrateswehavealsobeenableto
assistinvestorsthroughourwealthspecialistsandprotectthemwithourinsuranceproducts.
Throughtheterrificeffortsofallthestaff,wehaveincreasedourlendingbookby$8.2millionandourdepositsby
$1.6millioninthe2014/15financialyear.This,coupledwithourwealthproducts,sawtheLancefieldCommunity
Bank®Branchhitanothersignificantmilestone,reaching$90millioninoverallbusinessonthebooks.
Iwouldliketothankthewholeteamwhoworksowelltogether.Wehavebeenabletoreachtheseachievements
throughtheprofessionalismanddedicationofourstaff,whoprovideawiderangeoffinancialsolutionstoour
customers,inaconfidential,friendlymanner.
CongratulationstotheBoard,forthecourageandleadershipinbuildinganewpremisesinRomsey,whenacross
thewholebankingsystem,otherbanksarereducingtheirphysicalfootprint.
Ithasbeenanabsolutepleasuretobeinvolvedinthesevibrantandconnectedcommunities,attendingsporting
presentationevents,conductingforumsandsupportingcommunityprojects.Wecanonlydothiswithour
customers’support.
Foreveryoneinthecommunitywhodoesn’thaveusastheirmainbank,Iencourageyoutocomeandhavea
discussionwithus,aswetrulyareBigger than a bank.
Michael O’Gorman
Branch Manager
Lancefield Manager’s report
Annual report Lancefield & Romsey Community Financial Services Limited 5
For year ending 30 June 2015
TheyearinreviewsawournewRomseyCommunity Bank®BranchpremisesopenedinFebruary2015.This
providedtangibleevidenceofourcommitmentasthebankofchoiceforthefutureofthetown.
AsaBendigoBankCommunity Bank®branch,wetakealongtermviewofourrole,andthatiswhywecontinue
toprovidefacetofacebankingsixdaysaweek.Ournewpremisesaredesignedforthefutureandtomeetthe
comfortandconvenienceofourcustomers.
Overthelast12monthswehavewitnessedacontinuinglowinterestrateenvironmentandaveryhighly
competitivebankingmarket,butdespitetheseconstraintswehavemanagedtogrowourbusinessonthebooksby
$9millionasat30June2015.Thiscompriseslendinggrowthof$6millionandaboosttodepositsof$3million.
This has brought our total holdings at Romsey Community Bank®Branchto$80million.
Duringthepastyearandmovingforward,weareincreasingouremphasisonprovidingourcustomerswitha
completefinancialpackagesolution.Weofferallthenormalbankservices,alongwithwealthmanagementadvice
throughourspecialiststaff.Anotherkeyfocusisourgeneralinsuranceofferings.
Competitionforbankingiscertainlystronganditisimportantthatwediversifyourincomestreamssothatwecan
continue to make profits to benefit our shareholders and generate funds to put back into our community through
sponsorshipsandgrants.
Iwouldliketothankallourteamwhomhaveworkedextremelyhardthroughouttheyearandingettingusintoour
newpremises.They,likeourcustomers,continuetomakeadifference,notonlyintheservicewhichtheyprovide,
buttothecommunityingeneral.
IwouldalsoliketorecogniseourshareholdersandtheimportancetheyplayinmakingRomseyandLancefield
Community Bank®branchesthesuccesstheyaretoday.Withoutthepeoplewhowerepreparedtoinvesttheir
moneyatthebeginning,therewouldbenoCommunity Bank®branchesinRomseyorLancefield.Moresignificantly,
ourcommunitieswouldnothavebenefitedastheyhavewiththesecurityofhavingbanksinourtownsforthelong
haul,andthefundingforprojectsofcommunitybenefitwhichhavemadeRomseyandLancefieldbetterplacesto
live.
Rod Browning
Branch Manager
Romsey Manager’s report
Annual report Lancefield & Romsey Community Financial Services Limited6
Directors’reportFor the financial year ended 30 June 2015
Yourdirectorssubmitthefinancialstatementsofthecompanyforthefinancialyearended30June2015.
Directors
Thenamesanddetailsofthecompany’sdirectorswhoheldofficeduringorsincetheendofthefinancialyear:
Timothy Gerard McCarthy
Chairperson
Occupation:Accountant
Qualifications,experienceandexpertise:CertifiedPractisingAccountant.BachelorofBusiness.Chairperson
since1August2011.FormerPresidentofRomseyFootballClub.CurrentTreasurerandformerlySecretary&
PresidentofRomseyCricketClub.LifeMemberoftheRomseyCricketClub.
Specialresponsibilities:Chairperson,MemberoftheFinanceand105MainStPanels.
Interestinshares:12,000
Maureen Patricia Wiltshire
DeputyChairperson
Occupation:LegalPractitioner
Qualifications,experienceandexpertise:BachelorofArts,BachelorofLaws&MastersofAppliedLaw.
Involvementincommunityorganisations.
Specialresponsibilities:DeputyChairpersonsince6July2010.Memberof105MainStPanel.
Interestinshares:16,933
Kenneth Douglas Cribbes FAIM
Treasurer
Occupation:RetiredGrazier
Qualifications,experienceandexpertise:Marketing&financebackground.FormerDirectorofRoyalFreemasons
HomesLimited,FreemasonsHospital,EuroaHealthandPacificDunlopGroupCompanies.FellowAustralian
InstituteofManagement.
Specialresponsibilities:Treasurer,Chairof105Panel,MemberofFinancePanel,MemberofAudit&
GovernancePanel.
Interest in shares: Nil
David Ross Plunkett
Secretary
Occupation:LegalPractitioner
Qualifications,experienceandexpertise:PracticinglawyersincegraduatingwithanLLBin1994.General
CounselandCompanySecretaryforQenosPtyLtdsince2001,beingresponsibleforalllegalandgovernance
relatedmatters.DavidhaslivedinLancefieldsince2003.Hehas2childrenthatattendschoolsinthe
MacedonRegion.
Specialresponsibilities:Secretary,ChairofAudit&GovernancePanels,Memberof105Panel.
Interest in shares: Nil
Annual report Lancefield & Romsey Community Financial Services Limited 7
Directors’report(continued)
Directors (continued)
Russell David Pattinson
Director
Occupation: Management Consultant
Qualifications,experienceandexpertise:BachelorofAgriculturalScience(Hon).MasterofAppliedScience.
Localsportingandcommunityinterests.
Specialresponsibilities:ChairofMarketing&CommunityInvestmentPanels.
Interestinshares:5,200
Graeme James Walker
Director
Occupation: Journalist
Qualifications,experienceandexpertise:Considerablepastnewspaperexperienceasajournalist,leadingin
toaseniorroleinGovernmentmedialiaisonandissuesmanagement.IneighthyearasPresidentofMoonee
ValleyCricketClub.LifeMemberofbothMooneeValleyCricketClubandNorthWestMetropolitanCricket
Association.MemberofNorthWestMetropolitanCricketAssociationjuniorscommittee(in13thyear).
Specialresponsibilities:Marketing&CommunityInvestmentPanels.
Interestinshares:4,600
Vanessa Jane Adams
Director
Occupation:LocalGovernmentOfficer
Qualifications,experienceandexpertise:MastersinPublicPolicyAdministration(MPA).Livedinlocalarea
sinceDecember2010.
Specialresponsibilities:MemberofMarketing&CommunityInvestmentandAudit&GovernancePanels.
Interest in shares: Nil
Michael Francis Meehan
Director
Occupation:UniversityProfessor
Qualifications,experienceandexpertise:BA(Monash),LLB(Adelaide),PhD(Cambridge).InvolvementinDeep
CreekLandcare.
Specialresponsibilities:MemberofMarketing&CommunityInvestmentPanel.
Interest in shares: Nil
Andrea Knight
Director(Appointed8June2015)
Occupation:
Qualifications,experienceandexpertise:Experiencedprofessionalinthefieldsoflaw,recruitment,marketing/
businessdevelopmentandgeneralbusinessmanagement.AndreaisdegreequalifiedwithaBachelorof
Arts/Lawsdegrees,GraduateDiplomainSecondaryEducationandMasterofLaws.Andreawasadmittedto
practiceasalawyerin1994whereshethenpractisedinthefieldsoffamilylawandcommerciallitigation.In
January2001,AndrealeftlawtoworkintherecruitmentindustryandsinceApril2009,Andreahasassisted
herhusbandLlew,operateGraniteHillsWineryinBaynton.Andreahasbeenanactivememberofthelocal
communitysinceMay2000.
Specialresponsibilities:MemberoftheHumanResourcesCommittee.
Interest in shares: Nil
Annual report Lancefield & Romsey Community Financial Services Limited8
Directors’report(continued)
Directors (continued)
Sandra Evaline Chestnutt
Director(Appointed8June2015)
Occupation:
Qualifications,experienceandexpertise:Averydiversecareerspanning20yearsinfinance,publicandprivate
administrationandprogrammanagementwithinthePublic,Non-GovernmentOrganisations(NGO)andPrivate
sectors,andwith14yearsexperienceinthedevelopmentfieldwiththeUnitedNations(UN)andinternational
NGOs.PastInternationalrolesheldincludeProjectCoordinatorSouthDarfurMerlinMedicalReliefinSouth
DarfurSudan,CountryProgramManagerSolomonIslandsSavetheChildrenAustralia,NationalExecutive
DirectorYWCAofPapuaNewGuinea,SmallBusiness&TourismManagerPermataSariHotelMaumereFlores
IndonesiaandProvincialCoordinatorCambodiaforPlanInternational&UNVandheldnumerousrolesinthe
UNMissionsinEastTimorandLiberia.PastrolesheldwithinAustraliaincludePresident/Chair/Directorfor
theDarfurAustraliaNetwork,NSWAssistantStateManagerDept.Environment,Water,Heritage&theArts
(DEWHA),WAAssistantStateManagerDepartmentCommunicationsInformationTechnology&theArts(DCITA),
ChiefExecutiveOfficerToomelahCo-OperativeLtd(Toomelah&BoggabillaIndigenousCommunities),Regional
&OperationsManagerNSWCo-OpHousingGroup,ManagerMortgageAdministrationCapitaFinancialGroup,
AdvanceBankAustraliaLimited/NSWBuildingSocietyoveraperiodofnineandahalfyearsrosethroughthe
ranksfromCashier,AssistantManager,BranchManager,BusinessDevelopmentManagertoSalesSupport
ManagerInvestmentAdvisoryDivisiontotheAdministrationManagerPropertyDept.Awarded:theElieWiesel
EthicsAwardfromtheUnitedNationsforworkundertakeninEastTimor(2002),HumanitarianOverseas
ServiceMedalAustralian(2001)andCertificateofAppreciationForeignAffairs(2000)fromtheAustralian
Government.
Specialresponsibilities:Memberof105MainStPanel.
Interest in shares: Nil
Patrick Alan Holt
Director(Appointed14July2015)
Occupation:CEOoftheAccidentCompensationConciliationService
Qualifications,experienceandexpertise:2008:EnrolledasaBarrister&SolicitorbeforetheSupremeCourt
ofVictoria,Australia.Patrickisaseasonedattorneyandentrepreneurwithoverthirtyyearsinpracticedealing
withcommercialbusiness,company,international,bankinglawandlitigation.FormerUniversityLawLecturer,
JusticeCourtJudgeandfoundingboardmemberofabankintheUSA
2006:EnrolledasaBarrister&SolicitorbeforetheHighCourtofNewZealand;Christchurch,Canterbury
1983:AdmittedaslawyertoStateBarofMontana,SupremeCourtofMontana,andU.S.FederalDistrict
Court.
Special responsibilities: Nil
Interest in shares: Nil
Directorswereinofficeforthisentireyearunlessotherwisestated.
Nodirectorshavematerialinterestsincontractsorproposedcontractswiththecompany.
Company Secretary
ThecompanysecretaryisDavidPlunkett.Davidwasappointedtothepositionofsecretaryon7November2011.
Principal Activities
TheprincipalactivitiesofthecompanyduringthefinancialyearwerefacilitatingCommunity Bank® services under
managementrightstooperatefranchisedbranchesofBendigoandAdelaideBankLimited.
Therehavebeennosignificantchangesinthenatureoftheseactivitiesduringtheyear.
Annual report Lancefield & Romsey Community Financial Services Limited 9
Directors’report(continued)
Operating results
Operationshavecontinuedtoperforminlinewithexpectations.Theprofit/(loss)ofthecompanyforthefinancial
yearafterprovisionforincometaxwas:
Year ended 30 June 2015$
Year ended 30 June 2014$
(50,403) 264,111
Remuneration report
Directors’remuneration
Nodirectorofthecompanyreceivesremunerationforservicesasacompanydirectororcommitteemember.
Therearenoexecutiveswithinthecompanywhoseremunerationisrequiredtobedisclosed.
Directors’shareholdings
Balance at start of the year
Changes during the
year
Balance at end of the year
TimothyGerardMcCarthy 12,000 - 12,000
MaureenPatriciaWiltshire 16,933 - 16,933
KennethDouglasCribbesFAIM - - -
DavidRossPlunkett - - -
RussellDavidPattinson 5,200 - 5,200
GraemeJamesWalker 4,600 - 4,600
VanessaJaneAdams - - -
Michael Francis Meehan - - -
SandraEvalineChestnutt(Appointed8June2015) - - -
AndreaKnight(Appointed8June2015) - - -
PatrickAlanHolt(Appointed14July2015) - - -
Dividends
Year ended 30 June 2015
Cents $
Dividendspaidintheyear 6 60,642
Annual report Lancefield & Romsey Community Financial Services Limited10
Directors’report(continued)
Significant changes in the state of affairs
Intheopinionofthedirectorstherewerenosignificantchangesinthestateofaffairsofthecompanythat
occurredduringthefinancialyearunderreviewnototherwisedisclosedinthisreportorthefinancialstatements.
Likely developments
Thecompanywillcontinueitspolicyoffacilitatingbankingservicestothecommunity.
Environmental regulation
Thecompanyisnotsubjecttoanysignificantenvironmentalregulation.
Indemnification and insurance of directors and officers
Thecompanyhasindemnifiedalldirectors,branchmanagersandtheexecutiveofficerinrespectofliabilitiesto
otherpersons(otherthanthecompanyorrelatedbodycorporate)thatmayarisefromtheirpositionasdirectors,
branchmanagersorexecutiveofficerofthecompanyexceptwheretheliabilityarisesoutofconductinvolvingthe
lackofgoodfaith.
Disclosureofthenatureoftheliabilityandtheamountofthepremiumisprohibitedbytheconfidentialityclauseof
thecontractofinsurance.Thecompanyhasnotprovidedanyinsuranceforanauditorofthecompanyorarelated
bodycorporate.
Directors’ meetings
Thenumberofdirectors’meetingsattendedbyeachofthedirectorsofthecompanyduringtheyearwere:
Board Meetings Attended
Eligible Attended
TimothyGerardMcCarthy 11 11
MaureenPatriciaWiltshire 11 8
KennethDouglasCribbesFAIM 11 8
DavidRossPlunkett 11 10
RussellDavidPattinson 11 7
GraemeJamesWalker 11 10
VanessaJaneAdams 11 8
Michael Francis Meehan 11 10
SandraEvalineChestnutt(Appointed8June2015) 1 1
AndreaKnight(Appointed8June2015) 1 1
PatrickAlanHolt(Appointed14July2015) - -
TheBoardhasfivesub-committeepanelsinplace;105MainSt(propertydevelopment),Finance,Human
Resources,CommunityInvestmentandMarketingandAuditandGovernance.Thesub-committeesmeetonanas
needsbasisandpresentreports/recommendationstothemonthlyBoardmeetingswhererequired.
Annual report Lancefield & Romsey Community Financial Services Limited 11
Directors’report(continued)
Proceedings on behalf of the company
NopersonhasappliedtotheCourtundersection237oftheCorporationsAct2001forleavetobringproceedings
onbehalfofthecompany,ortointerveneinanyproceedingstowhichthecompanyisaparty,forthepurposeof
takingresponsibilityonbehalfofthecompanyforallorpartofthoseproceedings.
NoproceedingshavebeenbroughtorintervenedinonbehalfofthecompanywithleaveoftheCourtundersection
237oftheCorporationsAct2001.
Non audit services
Thecompanymaydecidetoemploytheauditoronassignmentsadditionaltotheirstatutorydutieswherethe
auditor’sexpertiseandexperiencewiththecompanyareimportant.Detailsoftheamountspaidorpayabletothe
auditor(AndrewFrewinStewart)forauditandnonauditservicesprovidedduringtheyeararesetoutinthenotes
totheaccounts.
Theboardofdirectorshasconsideredthepositionandissatisfiedthattheprovisionofthenon-auditservicesis
compatiblewiththegeneralstandardofindependenceforauditorsimposedbytheCorporationsAct2001.
Thedirectorsaresatisfiedthattheprovisionofnon-auditservicesbytheauditor,assetoutinthenotesdidnot
compromisetheauditorindependencerequirementsoftheCorporationsAct2001forthefollowingreasons:
• havingreviewedtheauditorsprotocolsinrelationtoindependenceandnon-auditservices,theboardis
comfortablethattheprovisionofsuchserviceswillnotimpactupontheimpartialityandobjectivityofthe
auditor
• noneoftheservicesunderminethegeneralprinciplesrelatingtoauditorindependenceassetoutinAPES110
CodeofEthicsforProfessionalAccountants,includingreviewingorauditingtheauditor’sownwork,actingin
amanagementoradecision-makingcapacityforthecompany,actingasadvocateforthecompanyorjointly
sharingeconomicriskandrewards.
Auditor’s independence declaration
Acopyoftheauditor’sindependencedeclarationasrequiredundersection307CoftheCorporationsAct2001is
setoutonpage12.
SignedinaccordancewitharesolutionoftheboardofdirectorsatRomsey,Victoriaon24September2015.
Timothy Gerard McCarthy,
Chairman
Annual report Lancefield & Romsey Community Financial Services Limited12
Auditor’sindependencedeclaration
Annual report Lancefield & Romsey Community Financial Services Limited 13
Financial statementsStatementofProfitorLossandOtherComprehensiveIncome for the year ended 30 June 2015
Notes 2015 2014 $ $
Revenuefromordinaryactivities 4 1,502,788 1,445,073
Employeebenefitsexpense (686,825) (639,240)
Charitabledonations,sponsorship,advertisingandpromotion (147,359) (114,415)
Occupancyandassociatedcosts (90,803) (76,304)
Systemscosts (46,176) (37,589)
Depreciationandamortisationexpense 5 (39,043) (41,541)
Financecosts 5 (7,322) (1,358)
Generaladministrationexpenses (206,373) (157,325)
Profit before income tax expense 278,887 377,301
Incometaxexpense 6 (85,402) (113,190)
Profit after income tax expense 193,485 264,111
Revaluationofinvestments 9 (243,888) -
Total Other Comprehensive Income (243,888) -
Total comprehensive income for the year (50,403) 264,111
Earnings per share for profit/(loss) attributable to the ordinary
shareholders of the company: ¢ ¢
Basicearningspershare 23 (5.19) 27.21
Theaccompanyingnotesformpartofthesefinancialstatements.
Annual report Lancefield & Romsey Community Financial Services Limited14
Financial statements (continued)
Balance Sheet as at 30 June 2015
Notes 2015 2014 $ $
ASSETS
Current Assets
Cashandcashequivalents 7 115,093 183,947
Tradeandotherreceivables 8 128,270 123,164
Currenttaxasset 11 34,792 -
Total Current Assets 278,155 307,111
Non-Current Assets
Property,plantandequipment 9 1,353,048 1,023,577
Intangibleassets 10 10,472 34,356
Deferredtaxasset 11 32,963 31,559
Total Non-Current Assets 1,396,483 1,089,492
Total Assets 1,674,638 1,396,603
LIABILITIES
Current Liabilities
Tradeandotherpayables 12 173,082 91,647
Currenttaxliabilities 11 - 13,681
Borrowings 13 7,106 17,882
Provisions 14 101,386 101,065
Total Current Liabilities 281,574 224,275
Non-Current Liabilities
Borrowings 13 332,206 7,106
Provisions 14 11,312 4,631
Total Non-Current Liabilities 343,518 11,737
Total Liabilities 625,092 236,012
Net Assets 1,049,546 1,160,591
Equity
Issuedcapital 15 667,869 667,869
Retainedearnings 16 381,677 492,722
Total Equity 1,049,546 1,160,591
Theaccompanyingnotesformpartofthesefinancialstatements.
Annual report Lancefield & Romsey Community Financial Services Limited 15
Financial statements (continued)
StatementofChangesinEquity for the year ended 30 June 2015
Issued Retained Total capital earnings equity $ $ $
Balance at 1 July 2013 667,869 289,253 957,122
Total comprehensive income for the year - 264,111 264,111
Transactions with owners in their capacity as owners:
Sharesissuedduringperiod - - -
Costsofissuingshares - - -
Dividendsprovidedfororpaid - (60,642) (60,642)
Balance at 30 June 2014 667,869 492,722 1,160,591
Balance at 1 July 2014 667,869 492,722 1,160,591
Total comprehensive income for the year - (50,403) (50,403)
Transactions with owners in their capacity as owners:
Sharesissuedduringperiod - - -
Costsofissuingshares - - -
Dividendsprovidedfororpaid - (60,642) (60,642)
Balance at 30 June 2015 667,869 381,677 1,049,546
Theaccompanyingnotesformpartofthesefinancialstatements.
Annual report Lancefield & Romsey Community Financial Services Limited16
Financial statements (continued)
StatementofCashFlows for the year ended 30 June 2015
Notes 2015 2014 $ $
Cash flows from operating activities
Receiptsfromcustomers 1,646,524 1,575,315
Paymentstosuppliersandemployees (1,290,361) (1,166,630)
Interestreceived 1,624 11,096
Interestpaid (7,322) 104
Incometaxespaid (135,279) (112,208)
Net cash provided by operating activities 17 215,186 307,677
Cash flows from investing activities
Paymentsforproperty,plantandequipment (537,722) (73,309)
Net cash provided by/(used in) investing activities (537,722) (73,309)
Cash flows from financing activities
Proceedsfromborrowings 649,271 -
Repaymentofborrowings (334,947) (388,835)
Dividendspaid (60,642) (60,642)
Net cash provided by/(used in) financing activities 253,682 (449,477)
Net increase/(decrease) in cash held (68,854) (215,109)
Cashandcashequivalentsatthebeginningofthefinancialyear 183,947 399,056
Cash and cash equivalents at the end of the financial year 7(a) 115,093 183,947
Theaccompanyingnotesformpartofthesefinancialstatements.
Annual report Lancefield & Romsey Community Financial Services Limited 17
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
The financial statements have been prepared under the historical cost convention on an accruals basis as
modifiedbytherevaluationoffinancialassetsandliabilitiesatfairvaluethroughprofitorlossandwherestated,
currentvaluationsofnon-currentassets.Costisbasedonthefairvaluesoftheconsiderationgiveninexchange
forassets.
Comparative figures
WhererequiredbyAustralianAccountingStandardscomparativefigureshavebeenadjustedtoconformwith
changesinpresentationforthecurrentfinancialyear.
Applicationofnewandamendedaccountingstandards
ThefollowingamendmentstoaccountingstandardsandanewinterpretationissuedbytheAustralianAccounting
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 Lancefield & Romsey Community Financial Services Limited18
Notes to the financial statements (continued)
Note1.Summaryofsignificantaccountingpolicies(continued)
a) Basis of preparation (continued)
Applicationofnewandamendedaccountingstandards(continued)
• Interpretation21Levies.
• AASB1031Materiality,AASB2013-9AmendmentstoAustralianAccountingStandards–Conceptual
Framework,MaterialityandFinancialInstruments(PartB:Materiality),AASB2014-1AmendmentstoAustralian
AccountingStandards(PartC:Materiality).
NoneoftheamendmentstoaccountingstandardsorthenewinterpretationissuedbytheAustralianAccounting
StandardsBoard(AASB)thatbecamemandatorilyeffectiveforaccountingperiodsbeginningonorafter1July
2014,materiallyaffectedanyoftheamountsrecognisedinthecurrentperiodoranypriorperiodandarenotlikely
toaffectfutureperiods.
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:
BearerPlants.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
Annual report Lancefield & Romsey Community Financial Services Limited 19
Notes to the financial statements (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
standardsorinterpretationshavenoimpactonamountsrecognisedinthecurrentperiodoranypriorperiod.
Economicdependency-BendigoandAdelaideBankLimited
ThecompanyhasenteredintoafranchiseagreementwithBendigoandAdelaideBankLimitedthatgovernsthe
management of the Community Bank®branchesatLancefieldandRomsey,Victoria.
ThebranchesoperateasafranchiseofBendigoandAdelaideBankLimited,usingthename“BendigoBank”and
thelogoandsystemofoperationsofBendigoandAdelaideBankLimited.ThecompanymanagestheCommunity
Bank®branchesonbehalfofBendigoandAdelaideBankLimited,howeveralltransactionswithcustomers
conducted through the Community Bank®branchesareeffectivelyconductedbetweenthecustomersandBendigo
andAdelaideBankLimited.
AlldepositsaremadewithBendigoandAdelaideBankLimited,andallpersonalandinvestmentproductsare
productsofBendigoandAdelaideBankLimited,withthecompanyfacilitatingtheprovisionofthoseproducts.All
loans,leasesorhirepurchasetransactions,issuesofnewcreditordebitcards,temporaryorbridgingfinanceand
anyothertransactionthatinvolvescreatinganewdebt,orincreasingorchangingthetermsofanexistingdebt
owedtoBendigoandAdelaideBankLimited,mustbeapprovedbyBendigoandAdelaideBankLimited.Allcredit
transactionsaremadewithBendigoandAdelaideBankLimited,andallcreditproductsareproductsofBendigo
andAdelaideBankLimited.
Thecompanypromotesandsellstheproductsandservices,butisnotapartytothetransaction.
Thecreditrisk(i.e.theriskthatacustomerwillnotmakerepayments)isfortherelevantBendigoandAdelaide
BankLimitedentitytobearaslongasthecompanyhascompliedwiththeappropriateproceduresandrelevant
obligationsandhasnotexercisedadiscretioningrantingorextendingcredit.
BendigoandAdelaideBankLimitedprovidessignificantassistanceinestablishingandmaintainingtheCommunity
Bank®branchesfranchiseoperations.Italsocontinuestoprovideongoingmanagementandoperationalsupport
andotherassistanceandguidanceinrelationtoallaspectsofthefranchiseoperation,includingadviceinrelation
to:
• adviceandassistanceinrelationtothedesign,layoutandfitoutoftheCommunity Bank® branch
• trainingforthebranchmanagerandotheremployeesinbanking,managementsystemsandinterfaceprotocol
• methodsandproceduresforthesaleofproductsandprovisionofservices
• securityandcashlogisticcontrols
• calculationofcompanyrevenueandpaymentofmanyoperatingandadministrativeexpenses
• theformulationandimplementationofadvertisingandpromotionalprograms
• salestechniquesandpropercustomerrelations.
Thefollowingisasummaryofthematerialaccountingpoliciesadoptedbythecompanyinthepreparationofthe
financialstatements.Theaccountingpolicieshavebeenconsistentlyapplied,unlessotherwisestated.
Annual report Lancefield & Romsey Community Financial Services Limited20
Notes to the financial statements (continued)
Note1.Summaryofsignificantaccountingpolicies(continued)
b) Revenue
Revenueisrecognisedwhentheamountofrevenuecanbereliablymeasured,itisprobablethatfutureeconomic
benefitswillflowtothecompanyandanyspecificcriteriahavebeenmet.Interestandfeerevenueisrecognised
whenearned.Thegainorlossondisposalofproperty,plantandequipmentisrecognisedonanetbasisandis
classifiedasincomeratherthanrevenue.AllrevenueisstatednetoftheamountofGoodsandServicesTax(GST).
Revenue calculation
OvertheperiodfromSeptember2013toFebruary2015,BendigoandAdelaideBankLimitedconducteda
reviewoftheCommunity Bank®model,knownas‘ProjectHorizon’.Thiswasconductedinconsultationwiththe
Community Bankingnetwork.TheobjectiveofthereviewwastodevelopasharedvisionoftheCommunity Bank®
modelthatpositionsitforsuccessnowandforthefuture.
Theoutcomeofthatreviewisthatthefundamentalfranchisemodelandcommunityparticipationremain
unchanged.Changestobeimplementedoverathreeyearperiodreflectanumberofthemes,includingacultureof
innovation,agilityandflexibility,networkcollaboration,directorandstaffdevelopmentandasustainablefinancial
model.ThiswillincludechangestothefinancialreturnforCommunity Bank®companiesfrom1July2016.A
fundstransferpricingmodelwillbeusedforthemethodofcalculationofthecostoffunds,depositreturnand
margin.Allrevenuepaidoncorebankingproductswillbethroughmarginshare.Marginoncorebankingproducts
willbesharedona50/50basis.
Thefranchiseagreementprovidesthatthreeformsofrevenuemaybeearnedbythecompany–margin,
commissionandfeeincome.BendigoandAdelaideBankLimiteddecidestheformofrevenuethecompanyearns
ondifferenttypesofproductsandservices.
Therevenueearnedbythecompanyisdependentonthebusinessthatitgenerates.Itmayalsobeaffectedby
otherfactors,suchaseconomicandlocalconditions,forexample,interestrates.
Core banking products
BendigoandAdelaideBankLimitedhasidentifiedsomeBendigoBankGroupproductsandservicesas‘core
bankingproducts’.Itmaychangetheproductsandserviceswhichareidentifiedascorebankingproductsbygiving
thecompanyatleast30days’notice.CorebankingproductscurrentlyincludeBendigoBankbrandedhomeloans,
termdepositsandatcalldeposits.
Margin
Marginisarrivedatthroughthefollowingcalculation:
• Interestpaidbycustomersonloanslessinterestpaidtocustomersondeposits,
• plusanydepositreturnsi.e.interestreturnappliedbyBendigoandAdelaideBankLimitedforadeposit,
• minusanycostsoffundsi.e.interestappliedbyBendigoandAdelaideBankLimitedtofundaloan.
Note:Inverysimplifiedterms,currently,depositreturnmeanstheinterestBendigoandAdelaideBankLimited
getswhenitinveststhemoneythecustomerdepositswithit.ThecostoffundsmeanstheinterestBendigoand
AdelaideBankLimitedpayswhenitborrowsthemoneytogiveacustomeraloan.From1July2016,bothwill
meanthecostforBendigoandAdelaideBankLimitedtoborrowthemoneyinthemarket.
Productsandservicesonwhichmarginispaidincludevariableratedepositsandvariableratehomeloans.From
1July2016,examplesincludeBendigoBankbrandedatcalldeposits,termdepositsandhomeloans.
Annual report Lancefield & Romsey Community Financial Services Limited 21
Notes to the financial statements (continued)
Note1.Summaryofsignificantaccountingpolicies(continued)
b) Revenue (continued)
Margin(continued)
Forthoseproductsandservicesonwhichmarginispaid,thecompanyisentitledtoashareofthemarginearned
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.
Thechangemaybetothemethodofcalculationofmargin,theamountofmargin,commissionandfeeincomeor
achangeofamargintoacommissionorviceversa.Thismayaffecttheamountofrevenuethecompanyreceives
onaparticularproductorservice.Theeffectofthechangeontherevenueearnedbythecompanyisentirely
dependentonthechange.
Thechangemaybetothemethodofcalculationofmargin,theamountofmargin,commissionandfeeincomeor
achangeofamargintoacommissionorviceversa.Thismayaffecttheamountofrevenuethecompanyreceives
onaparticularproductorservice.Theeffectofthechangeontherevenueearnedbythecompanyisentirely
dependentonthechange.
IfBendigoandAdelaideBankLimitedmakesachangetothemarginorcommissiononcorebankingproducts
andservices,itmustnotreducethemarginandcommissionthecompanyreceivesoncorebankingproductsand
servicesBendigoandAdelaideBankLimitedattributestothecompanytolessthan50%(onanaggregatebasis)
ofBendigoandAdelaideBankLimited’smarginatthattime.Forotherproductsandservices,thereisnorestriction
onthechangeBendigoandAdelaideBankLimitedmaymake.
BendigoandAdelaideBankLimitedmustgivethecompany30days’noticebeforeitchangestheproductsand
servicesonwhichmargin,commissionorfeeincomeispaid,themethodofcalculationofmarginandtheamount
ofmargin,commissionorfeeincome.
Monitoring and changing financial return
BendigoandAdelaideBankLimitedmonitorsthedistributionoffinancialreturnbetweenCommunity Bank®
companiesandBendigoandAdelaideBankLimitedonanongoingbasis.
Overall,BendigoandAdelaideBankLimitedhasmadeitclearthattheCommunity Bank® model is based on the
principleofsharedrewardforsharedeffort.Inparticular,inrelationtocorebankingproductsandservices,theaim
istoachieveanequalshareofBendigoandAdelaideBankLimited’smargin.
Annual report Lancefield & Romsey Community Financial Services Limited22
Notes to the financial statements (continued)
Note1.Summaryofsignificantaccountingpolicies(continued)
b) Revenue (continued)
Monitoringandchangingfinancialreturn(continued)
AsdiscussedaboveinrelationtoProjectHorizon,amongotherthings,therewillbechangesinthefinancialreturn
for Community Bank®companiesfrom1July2016.Thisincludes50%shareofmarginoncorebankingproducts,
allcorebankingproductsbecomemarginproductsandafundstransferpricingmodelwillbeusedforthemethod
ofcalculationofthecostoffunds,depositreturnandmargin.
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
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
temporarydifferencesarisingfromgoodwill.
Deferredtaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplytotheperiod(s)when
theassetandliabilitygivingrisetothemarerealisedorsettled,basedontaxrates(andtaxlaws)thathavebeen
enactedorsubstantivelyenactedbyreportingdate.Themeasurementofdeferredtaxliabilitiesreflectsthetax
consequencesthatwouldfollowfromthemannerinwhichtheconsolidatedentityexpects,atthereportingdate,to
recoverorsettlethecarryingamountofitsassetsandliabilities.
Deferredtaxassetsandliabilitiesareoffsetwhenthereisalegallyenforceablerighttooffsetcurrenttaxand
whenthebalancesrelatetotaxesleviedbythesametaxationauthorityandthecompanyentityintendstosettle
itstaxassetsandliabilitiesonanetbasis.
Current and deferred tax for the period
CurrentanddeferredtaxisrecognisedasanexpenseorincomeintheStatementofProfitorLossandOther
ComprehensiveIncome,exceptwhenitrelatestoitemscreditedordebitedtoequity,inwhichcasethedeferred
taxisalsorecogniseddirectlyinequity,orwhereitarisesfrominitialaccountingforabusinesscombination,in
whichcaseitistakenintoaccountinthedeterminationofgoodwillorexcess.
Annual report Lancefield & Romsey Community Financial Services Limited 23
Notes to the financial statements (continued)
Note1.Summaryofsignificantaccountingpolicies(continued)
d) Employee entitlements
Provisionismadeforthecompany’sliabilityforemployeebenefitsarisingfromservicesrenderedbyemployees
tobalancedate.Employeebenefitsthatareexpectedtobesettledwithinoneyearhavebeenmeasuredatthe
amountsexpectedtobepaidwhentheliabilityissettled,plusrelatedon-costs.Employeebenefitspayablelater
thanoneyearhavebeenmeasuredatthepresentvalueoftheestimatedfuturecashoutflowstobemadefor
thosebenefits.
Thecompanycontributestoadefinedcontributionplan.Contributionstoemployeesuperannuationfundsare
chargedagainstincomeasincurred.
e) Cash and cash equivalents
ForthepurposesoftheStatementofCashFlows,cashincludescashonhandandinbanksandinvestmentsin
moneymarketinstruments,netofoutstandingbankoverdrafts.Bankoverdraftsareshownwithinborrowingsin
currentliabilitiesontheBalanceSheet.
f) Trade receivables and payables
Receivablesarecarriedattheiramountsdue.Thecollectabilityofdebtsisassessedatbalancedateandspecific
provisionismadeforanydoubtfulaccounts.Liabilitiesfortradecreditorsandotheramountsarecarriedatcost
thatisthefairvalueoftheconsiderationtobepaidinthefutureforgoodsandservicesreceived,whetherornot
billedtothecompany.
g) Property, plant and equipment
Plantandequipment,leaseholdimprovementsandequipmentunderfinanceleasearestatedatcostless
accumulateddepreciationandimpairment.Costincludesexpenditurethatisdirectlyattributabletotheacquisition
oftheitem.Intheeventthatsettlementofallorpartofthepurchaseconsiderationisdeferred,costisdetermined
bydiscountingtheamountspayableinthefuturetotheirpresentvalueasatthedateofacquisition.
Depreciationisprovidedonproperty,plantandequipment,includingfreeholdbuildingsbutexcludingland.
Depreciationiscalculatedonastraightlinebasissoastowriteoffthenetcostofeachassetoveritsexpected
usefullifetoitsestimatedresidualvalue.Leaseholdimprovementsaredepreciatedattherateequivalentto
theavailablebuildingallowanceusingthestraightlinemethod.Theestimatedusefullives,residualvaluesand
depreciationmethodarereviewedattheendofeachannualreportingperiod.
Thefollowingestimatedusefullivesareusedinthecalculationofdepreciation:
• leaseholdimprovements 40 years
• plantandequipment 2.5-40years
• furnitureandfittings 4-40years
h) Intangibles
ThefranchisefeepaidtoBendigoandAdelaideBankLimitedhasbeenrecordedatcostandisamortisedona
straightlinebasisoverthelifeofthefranchiseagreement.
TherenewalprocessingfeepaidtoBendigoandAdelaideBankLimitedwhenrenewingthefranchiseagreement
hasalsobeenrecordedatcostandisamortisedonastraightlinebasisoverthelifeofthefranchiseagreement.
Annual report Lancefield & Romsey Community Financial Services Limited24
Notes to the financial statements (continued)
Note1.Summaryofsignificantaccountingpolicies(continued)
i) Payment terms
Receivablesandpayablesarenoninterestbearingandgenerallyhavepaymenttermsofbetween30and90days.
j) Borrowings
Allloansareinitiallymeasuredattheprincipalamount.Interestisrecognisedasanexpenseasitaccrues.
k) Financial instruments
Recognition and initial measurement
Financialinstruments,incorporatingfinancialassetsandfinancialliabilitiesarerecognisedwhentheentity
becomesapartytothecontractualprovisionsoftheinstrument.
Financialinstrumentsareinitiallymeasuredatfairvalueplustransactioncosts.Financialinstrumentsare
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
determinablepayments.
Theyaresubsequentlymeasuredatfairvaluewithchangesinsuchfairvalue(i.e.gainsorlosses)recognised
intheStatementofProfitorLossandOtherComprehensiveIncome.Available-for-salefinancialassetsare
includedinnon-currentassetsexceptwheretheyareexpectedtobesoldwithin12monthsaftertheendof
thereportingperiod.Allotherfinancialassetsareclassifiedascurrentassets.
(iv)Financialliabilities
Non-derivativefinancialliabilities(excludingfinancialguarantees)aresubsequentlymeasuredatamortisedcost
usingtheeffectiveinterestratemethod.
Annual report Lancefield & Romsey Community Financial Services Limited 25
Notes to the financial statements (continued)
Note1.Summaryofsignificantaccountingpolicies(continued)
k) Financial instruments (continued)
Impairment
Ateachreportingdate,theentityassesseswhetherthereisobjectiveevidencethatafinancialinstrumenthas
beenimpaired.ImpairmentlossesarerecognisedintheStatementofProfitorLossandOtherComprehensive
Income.
l) Leases
Leasesoffixedassetswheresubstantiallyalltherisksandbenefitsincidentaltotheownershipoftheasset,
butnotthelegalownershiparetransferredtothecompanyareclassifiedasfinanceleases.Financeleasesare
capitalisedbyrecordinganassetandaliabilityattheloweroftheamountsequaltothefairvalueoftheleased
propertyorthepresentvalueoftheminimumleasepayments,includinganyguaranteedresidualvalues.Lease
paymentsareallocatedbetweenthereductionoftheleaseliabilityandtheleaseinterestexpensefortheperiod.
Leasedassetsaredepreciatedonastraight-linebasisovertheshorteroftheirestimatedusefullivesorthelease
term.Leasepaymentsforoperatingleases,wheresubstantiallyalltherisksandbenefitsremainwiththelessor,
arechargedasexpensesintheperiodsinwhichtheyareincurred.Leaseincentivesunderoperatingleasesare
recognisedasaliabilityandamortisedonastraight-linebasisoverthelifeoftheleaseterm.
m) Provisions
Provisionsarerecognisedwhentheeconomicentityhasalegal,equitableorconstructiveobligationtomakea
futuresacrificeofeconomicbenefitstootherentitiesasaresultofpasttransactionsofotherpastevents,itis
probablethatafuturesacrificeofeconomicbenefitswillberequiredandareliableestimatecanbemadeofthe
amountoftheobligation.
Aprovisionfordividendsisnotrecognisedasaliabilityunlessthedividendsaredeclared,determinedorpublicly
recommendedonorbeforethereportingdate.
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.
Annual report Lancefield & Romsey Community Financial Services Limited26
Notes to the financial statements (continued)
Note2.FinancialriskmanagementThecompany’sactivitiesexposeittoalimitedvarietyoffinancialrisks:marketrisk(includingcurrencyrisk,fair
valueinterestriskandpricerisk),creditrisk,liquidityriskandcashflowinterestraterisk.Thecompany’soverall
risk management program focuses on the unpredictability of financial markets and seeks to minimise potential
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
boardofdirectorsmonitorthereturnoncapitalandthelevelofdividendstoshareholders.Capitalisrepresented
bytotalequityasrecordedintheBalanceSheet.
Inaccordancewiththefranchiseagreement,inany12monthperiod,thefundsdistributedtoshareholdersshall
not exceed the distribution limit:
The distribution limit is the greater of:
(a)20%oftheprofitorfundsofthefranchiseeotherwiseavailablefordistributiontoshareholdersinthat12
monthperiod;and
(b) subjecttotheavailabilityofdistributableprofits,therelevantrateofreturnmultipliedbytheaveragelevelof
sharecapitalofthefranchiseeoverthat12monthperiodwheretherelevantrateofreturnisequaltothe
weightedaverageinterestrateon90daybankbillsoverthat12monthperiodplus5%.
Annual report Lancefield & Romsey Community Financial Services Limited 27
Notes to the financial statements (continued)
Note2.Financialriskmanagement(continued)
Theboardismanagingthegrowthofthebusinessinlinewiththisrequirement.Therearenootherexternally
imposedcapitalrequirements,althoughthenatureofthecompanyissuchthatamountswillbepaidintheform
ofcharitabledonationsandsponsorship.Charitabledonationsandsponsorshippaidfortheyearended30June
2015canbeseenintheStatementofProfitorLossandOtherComprehensiveIncome.
Therewerenochangesinthecompany’sapproachtocapitalmanagementduringtheyear.
Note3.CriticalaccountingestimatesandjudgementsEstimatesandjudgementsarecontinuallyevaluatedandarebasedonhistoricalexperienceandotherfactors,
including expectations of future events that may have a financial impact on the entity and that are believed to be
reasonableunderthecircumstances.
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
deferred tax liabilities recognised on the balance sheet and the amount of other tax losses and temporary
differencesnotyetrecognised.Insuchcircumstances,someorallofthecarryingamountofrecogniseddeferred
taxassetsandliabilitiesmayrequireadjustment,resultingincorrespondingcreditorchargetotheStatementof
ProfitorLossandOtherComprehensiveIncome.
Estimationofusefullivesofassets
The estimation of the useful lives of assets has been based on historical experience and the condition of the
assetisassessedatleastonceperyearandconsideredagainsttheremainingusefullife.Adjustmentstouseful
livesaremadewhenconsiderednecessary.
Annual report Lancefield & Romsey Community Financial Services Limited28
Notes to the financial statements (continued)
Note3.Criticalaccountingestimatesandjudgements(continued)
Impairment of assets
Ateachreportingdate,thecompanyreviewsthecarryingamountsofitstangibleandintangibleassetsthathave
anindefiniteusefullifetodeterminewhetherthereisanyindicationthatthoseassetshavesufferedanimpairment
loss.Ifanysuchindicationexists,therecoverableamountoftheassetisestimatedinordertodeterminethe
extentoftheimpairmentloss(ifany).Wheretheassetdoesnotgeneratecashflowsthatareindependentfrom
otherassets,theconsolidatedentityestimatestherecoverableamountofthecash-generatingunittowhichthe
assetbelongs.
Recoverableamountisthehigheroffairvaluelesscoststosellandvalueinuse.Inassessingvalueinuse,the
estimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectscurrent
marketassessmentsofthetimevalueofmoneyandtherisksspecifictotheassetforwhichtheestimatesof
futurecashflowshavenotbeenadjusted.
Iftherecoverableamountofanasset(orcash-generatingunit)isestimatedtobelessthanitscarryingamount,
thecarryingamountoftheasset(cash-generatingunit)isreducedtoitsrecoverableamount.Animpairmentloss
isrecognisedinprofitorlossimmediately,unlesstherelevantassetiscarriedatfairvalue,inwhichcasethe
impairmentlossistreatedasarevaluationdecrease.
Whereanimpairmentlosssubsequentlyreverses,thecarryingamountoftheasset(cash-generatingunit)is
increasedtotherevisedestimateofitsrecoverableamount,butonlytotheextentthattheincreasedcarrying
amountdoesnotexceedthecarryingamountthatwouldhavebeendeterminedhadnoimpairmentlossbeen
recognisedfortheasset(cash-generatingunit)inprioryears.Areversalofanimpairmentlossisrecognised
inprofitorlossimmediately,unlesstherelevantassetiscarriedatfairvalue,inwhichcasethereversalofthe
impairmentlossistreatedasarevaluationincrease.
Fair value measurement
Someofthecompany’sassetsandliabilitiesaremeasuredatfairvalueforfinancialreportingpurposes.Theboard
ofdirectorsdeterminetheappropriatevaluationtechniquesandinputsforfairvaluemeasurements.
FairvaluemeasurementsarecategorisedintoLevel1,2or3basedonthedegreetowhichtheinputstothe
fair value measurements are observable and the significance of the inputs to the fair value measurement in its
entirety,whicharedescribedasfollows:
• Level1inputsarequotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilitiesthattheentity
can access at the measurement date
• Level2inputsareinputs,otherthanquotedpricesincludedwithinLevel1,thatareobservablefortheassetor
liability,eitherdirectlyorindirectly
• Level3inputsareunobservableinputsfortheassetorliability.
Inestimatingthefairvalueofanassetoraliability,thecompanyusesmarket-observabledatatotheextentitis
available.WhereLevel1inputsarenotavailable,thecompanyengagesthirdpartyqualifiedvaluerstoperformthe
valuation.
Annual report Lancefield & Romsey Community Financial Services Limited 29
Notes to the financial statements (continued)
Note4.RevenuefromordinaryactivitiesOperating activities:
-servicescommissions 1,246,005 1,180,967
-otherrevenue 255,159 254,544
Total revenue from operating activities 1,501,164 1,435,511
Non-operatingactivities:
-interestreceived 1,624 9,562
Total revenue from non-operating activities 1,624 9,562
Total revenues from ordinary activities 1,502,788 1,445,073
Note5.Expenses Depreciationofnon-currentassets:
-plantandequipment 7,082 8,404
-leaseholdimprovements 8,077 9,253
Amortisationofnon-currentassets:
-franchiseagreement 4,314 4,314
-franchiserenewalfee 19,570 19,570
39,043 41,541
Finance costs:
-interestpaid 7,177 1,256
-borrowingcosts 145 102
7,322 1,358
Bad debts 744 1,646
Loss on disposal of asset 35,268 -
Note6.IncometaxexpenseThe components of tax expense comprise:
-Currenttax 86,807 117,870
-Movementindeferredtax (3,140) (4,680)
-Adjustmenttodeferredtaxtoreflectchangetotaxrateinfutureperiods 1,735 -
85,402 113,190
2015 2014 $ $
Annual report Lancefield & Romsey Community Financial Services Limited30
Notes to the financial statements (continued)
Note6.Incometaxexpense(continued)
The prima facie tax on profit from ordinary activities before income tax is
reconciledtotheincometaxexpenseasfollows
Operatingprofit 34,999 377,301
Primafacietaxonprofitfromordinaryactivitiesat30% 10,500 113,190
Addtaxeffectof:
-non-deductibleexpenses 73,167 -
-timingdifferenceexpenses 3,140 4,680
86,807 117,870
Movementindeferredtax (3,140) (4,680)
Adjustmenttodeferredtaxtoreflectchangeoftaxrateinfutureperiods 1,735 -
85,402 113,190
Note7.CashandcashequivalentsCashatbankandonhand 114,093 63,947
Termdeposits 1,000 120,000
115,093 183,947
Note 7.(a) Reconciliation to cash flow statement
Theabovefiguresreconciletotheamountofcashshowninthestatementof
cashflowsattheendofthefinancialyearasfollows:
Cashatbankandonhand 114,093 63,947
Termdeposits 1,000 120,000
115,093 183,947
Note8.Tradeandotherreceivables Tradereceivables 127,515 121,994
Otherreceivablesandaccruals 687 999
Otherassets 68 171
128,270 123,164
2015 2014 $ $
Annual report Lancefield & Romsey Community Financial Services Limited 31
Notes to the financial statements (continued)
Note9.Property,plantandequipmentLand and buildings
Land(atvaluation)
AtIndependentvaluation 850,000 850,000
Buildings(atvaluation)
AtIndependentvaluation 380,000 -
Lessaccumulateddepreciation - -
380,000 -
Leasehold improvements
Atcost 117,894 299,273
Lessaccumulateddepreciation (101,408) (240,121)
16,486 59,152
Plantandequipment
Atcost 119,055 52,013
Lessaccumulateddepreciation (35,054) (36,482)
84,001 15,531
Motor vehicles
Atcost 35,664 33,636
Lessaccumulateddepreciation (13,103) (8,051)
22,561 25,585
Worksinprogress(105MainStreet.Romsey)
Atcost - 73,309
- 73,309
Total written down amount 1,353,048 1,023,577
Movements in carrying amounts:
Land*
Carryingamountatbeginning 850,000 850,000
Additions - -
Disposals - -
Less:depreciationexpense - -
Carrying amount at end 850,000 850,000
2015 2014 $ $
Annual report Lancefield & Romsey Community Financial Services Limited32
Notes to the financial statements (continued)
Note9.Property,plantandequipment(continued)
Buildings*
Carryingamountatbeginning - -
Additions 380,000 -
Disposals - -
Less:depreciationexpense - -
Carrying amount at end 380,000 -
Leasehold improvements
Carryingamountatbeginning 59,152 68,405
Additions - -
Disposals (34,589) -
Less:depreciationexpense (8,077) (9,253)
Carrying amount at end 16,486 59,152
Plantandequipment
Carryingamountatbeginning 15,531 17,750
Additions 71,180 -
Disposals (679) -
Less:depreciationexpense (2,030) (2,219)
Carrying amount at end 84,002 15,531
Motor vehicles
Carryingamountatbeginning 25,585 31,770
Additions 2,027 -
Disposals - -
Less:depreciationexpense (5,052) (6,185)
Carrying amount at end 22,560 25,585
Worksinprogress(105MainStreet.Romsey)*
Carryingamountatbeginning 73,309 -
Additions - 73,309
Disposals (73,309) -
Less:depreciationexpense - -
Carrying amount at end - 73,309
Total written down amount 1,353,048 1,023,577
2015 2014 $ $
Annual report Lancefield & Romsey Community Financial Services Limited 33
Notes to the financial statements (continued)
Note9.Property,plantandequipment(continued)
* UponcompletionofthebuildingofthenewRomseyBranchat105MainStreet,Romseythecompanyhada
carryingvalueof$1,473,888forthelandandbuildings.On22ndOctober,2014anindependentvaluation
wasobtainedfromCertifiedPracticingValuersJustinThomasandPatrickBradyofWBPPropertyGrouponan
“asifcomplete”basisat$1,230,000.Thedirectorshavedeterminedtorepresenttheassetatthefairvalue
obtainedfromtheindependentvaluation.Thisdecisiongivesrisetoalossonrevaluationofassetstothe
valueof$243,888.
2015 2014 $ $
Land105MainStreet.Romsey 850,000 850,000
Worksinprogressasatbeginningofperiod 73,309 -
Expenditureduringtheyear 544,806 73,309
HoldingCostsfortheperiod 5,773 -
Lessrevaluation (243,888) -
Land and buildings valuation 1,230,000 923,309
Note10.Intangibleassets Franchise fee
Atcost 131,570 131,570
Less:accumulatedamortisation (129,502) (125,188)
2,068 6,382
Renewalprocessingfee
Atcost 97,853 97,853
Less:accumulatedamortisation (89,449) (69,879)
8,404 27,974
Total written down amount 10,472 34,356
Note11.Tax Current:
Income tax payable/(refundable) (34,792) 13,681
Non-Current:
Deferredtaxassets
-accruals 844 150
-employeeprovisions 32,119 31,709
32,963 31,859
Annual report Lancefield & Romsey Community Financial Services Limited34
Notes to the financial statements (continued)
Note11.Tax(continued)
Deferredtaxliability
-accruals - (300)
- (300)
Net deferred tax asset 32,963 31,559
Movement in deferred tax charged to Statement of Profit or Loss
and Other Comprehensive Income (1,404) (4,679)
Note12.TradeandotherpayablesCurrent:
Tradecreditors 16,895 18,045
Othercreditorsandaccruals 156,187 73,602
173,082 91,647
Note13.BorrowingsCurrent:
EquipmentLoan 7,106 10,176
BankLoan - 7,706
7,106 17,882
Non-Current:
EquipmentLoan - 7,106
BankLoan 332,206 -
332,206 7,106
Thebankloanisaninterestonlyloanforthefirst12monthscommencing17thSeptember2015.Afterthefirst12
monthstheloanwillberepayablemonthlywiththefinalinstalmentdueon17March2035.Interestisrecognised
atanaveragerateof4.95%.Theloanissecuredbyafirstmortgageoverthepropertylocatedat105MainStreet,
Romsey.Theoriginalwithdrawaloftheloanwasfor$649,271,duetorepaymentsmadeduringtheperiodtheyare
not obligated to repay any principal of the loan for a significant time
Theequipmentloanisrepayablemonthlywiththefinalinstalmentdueon18February2016.Interestisrecognised
atanaveragerateof5.59%(2014:5.59%).
2015 2014 $ $
Annual report Lancefield & Romsey Community Financial Services Limited 35
Notes to the financial statements (continued)
Note 14. Provisions Current:
Provision for annual leave 33,501 34,680
Provision for long service leave 67,885 66,385
101,386 101,065
Non-Current:
Provision for long service leave 11,312 4,631
Note 15. Contributed equity 1,010,700 ordinary shares fully paid (2014: 1,010,700) 970,700 970,700
Less: return of share capital (252,675) (252,675)
Less: equity raising expenses (50,156) (50,156)
667,869 667,869
Rights attached to shares
(a) Voting rights
Subject to some limited exceptions, each member has the right to vote at a general meeting.
On a show of hands or a poll, each member attending the meeting (whether they are attending the meeting
in person or by attorney, corporate representative or proxy) has one vote, regardless of the number of shares
held. However, where a person attends a meeting in person and is entitled to vote in more than one capacity
(for example, the person is a member and has also been appointed as proxy for another member) that person
may only exercise one vote on a show of hands. On a poll, that person may exercise one vote as a member and
one vote for each other member that person represents as duly appointed attorney, corporate representative or
proxy.
The purpose of giving each member only one vote, regardless of the number of shares held, is to reflect the
nature of the company as a community based company, by providing that all members of the community who
have contributed to the establishment and ongoing operation of the Community Bank® branch have the same
ability to influence the operation of the company.
(b) Dividends
Generally, 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
franchise agreement with Bendigo and Adelaide Bank Limited contains a limit on the level of profits or funds
that may be distributed to shareholders. There is also a restriction on the payment of dividends to certain
shareholders if they have a prohibited shareholding interest (see below).
(c) Transfer
Generally, ordinary shares are freely transferable. However, the directors have a discretion to refuse to register
a transfer of shares.
2015 2014 $ $
Annual report Lancefield & Romsey Community Financial Services Limited36
Notes to the financial statements (continued)
Note15.Contributedequity(continued)
Rightsattachedtoshares(continued)
(c)Transfer(continued)
Subjecttotheforegoing,shareholdersmaytransfersharesbyapropertransfereffectedinaccordancewiththe
company’sconstitutionandtheCorporationsAct2001.
Prohibitedshareholdinginterest
Apersonmustnothaveaprohibitedshareholdinginterestinthecompany.
Insummary,apersonhasaprohibitedshareholdinginterestiftheycontrolorown10%ormoreofthesharesin
thecompany(the“10%limit”).
Aswithvotingrights,thepurposeofthisprohibitedshareholdingprovisionistoreflectthecommunity-basednature
ofthecompany.
Whereapersonhasaprohibitedshareholdinginterest,thevotinganddividendrightsattachingtothesharesin
whichtheperson(andhisorherassociates)haveaprohibitedshareholdinginterest,aresuspended.
Theboardhasthepowertorequestinformationfromapersonwhohas(orissuspectedbytheboardofhaving)
alegalorbeneficialinterestinanysharesinthecompanyoranyvotingpowerinthecompany,forthepurposeof
determiningwhetherapersonhasaprohibitedshareholdinginterest.Iftheboardbecomesawarethatamember
hasaprohibitedshareholdinginterest,itmustserveanoticerequiringthemember(orthemember’sassociate)to
disposeofthenumberofsharestheboardconsidersnecessarytoremedythebreach.Ifapersonfailstocomply
withsuchanoticewithinaspecifiedperiod(thatmustbebetweenthreeandsixmonths),theboardisauthorised
tosellthespecifiedsharesonbehalfofthatperson.Theholderwillbeentitledtotheconsiderationfromthesale
oftheshares,lessanyexpensesincurredbytheboardinsellingorotherwisedealingwiththoseshares.
Intheconstitution,membersacknowledgeandrecognisethattheexerciseofthepowersgiventotheboardmay
causeconsiderabledisadvantagetoindividualmembers,butthatsucharesultmaybenecessarytoenforcethe
prohibition.
2015 2014 $ $
Note16.Retainedearnings Balanceatthebeginningofthefinancialyear 492,722 289,253
Netprofit/(loss)fromordinaryactivitiesafterincometax (50,403) 264,111
Dividendspaidorprovidedfor (60,642) (60,642)
Balance at the end of the financial year 381,677 492,722
Annual report Lancefield & Romsey Community Financial Services Limited 37
Notes to the financial statements (continued)
Note17.StatementofcashflowsReconciliationofprofit/(loss)fromordinaryactivitiesaftertaxtonetcash
provided by operating activities
Profit/(loss)fromordinaryactivitiesafterincometax (50,403) 264,111
Non cash items:
-depreciation 15,159 17,657
-amortisation 23,884 23,884
-revaluationofinvestment 243,888 -
-lossondisposalofasset 35,268 -
Changes in assets and liabilities:
-(increase)/decreaseinreceivables (5,106) (770)
-(increase)/decreaseinotherassets (36,196) (4,680)
-increase/(decrease)inpayables (4,629) (11,752)
-increase/(decrease)inprovisions 7,002 13,565
-increase/(decrease)incurrenttaxliabilities (13,681) 5,662
Net cash flows provided by operating activities 215,186 307,677
Note18.FairvaluemeasurementThissectionexplainsthejudgementsandestimatesmadeindeterminingthefairvaluesofthecompany’sassets
thatarerecognisedandmeasuredatfairvalueinthefinancialstatements.Toprovideanindicationaboutthe
reliabilityoftheinputsusedindeterminingfairvalue,theapplicableassetshavebeenclassifiedintothethree
levelsprescribedundertheaccountingstandards.Anexplanationofeachlevelfollowsunderneaththetable.
At 30 June 2015Level 1
$ Level 2
$ Level 3
$ Total
$
Recurring fair value measurements:
Available-for-salefinancialassets
Property,PlantandEquipment
Freehold land - 850,000 - 850,000
Buildings - 380,000 - 380,000
Plantandequipment - - - -
Total assets at fair value - 1,230,000 - 1,230,000
2014 2013 $ $ 2015 2014 $ $
Annual report Lancefield & Romsey Community Financial Services Limited38
Notes to the financial statements (continued)
Note18.Fairvaluemeasurement(continued)
At 30 June 2015Level 1
$ Level 2
$ Level 3
$ Total
$
Recurring fair value measurements:
Available-for-salefinancialassets
Property,PlantandEquipment
Freehold land - 850,000 - 850,000
Buildings - - - -
Plantandequipment - - - -
Total assets at fair value - 850,000 - 850,000
TherewerenotransfersbetweenLevel1andLevel2duringthereportingperiod.Thecompany’spolicyisto
recognisetransfersintoandtransfersoutoffairvaluehierarchylevelsasattheendofthereportingperiod.
Level1:Thefairvalueofavailable-for-salefinancialassetstradedinactivemarketsisbasedonthequotedmarket
priceatthecloseofbusinessattheendofthereportingperiod.
Level2:Thefairvalueofproperty,plantandequipmentisbasedonavaluationperformedbyathirdpartyqualified
valuerusingquotedpricesforsimilarassetsinanactivemarket.
Level3:TherewerenofairvaluemeasurementsbytheLevel3fairvaluehierarchy.
2015 2014 $ $
Note19.LeasesFinance lease commitments
Payable-minimumleasepayments:
-notlaterthan12months 7,255 10,882
-between12monthsand5years - 7,255
-greaterthan5years - -
Minimum lease payments 7,255 18,137
Lessfuturefinancecharges (149) (855)
Present value of minimum lease payments 7,106 17,282
Theequipmentloanisrepayablemonthlywiththefinalinstalmentdueon18February2016.Interestisrecognised
atanaveragerateof5.59%(2013:5.59%).
Annual report Lancefield & Romsey Community Financial Services Limited 39
Notes to the financial statements (continued)
Note19.Leases(continued)
Operating lease commitments
Non-cancellableoperatingleasescontractedforbutnotcapitalised
in the financial statements
Payable-minimumleasepayments:
-notlaterthan12months 9,413 30,280
-between12monthsand5years - 11,421
-greaterthan5years - -
9,413 41,701
TheoperatingleasefortheLancefieldbranchisanon-cancellableleasewithafive-yeartermwhichisduetoexpire
inJanuary2016.Rentpayablemonthlyinadvance.
TheoperatingleasefortheRomseybranchwasmutuallyagreetobeterminatedtwomonthsearlyinJune2015.
2015 2014 $ $
Note20.Auditor’sremuneration Amountsreceivedordueandreceivablebytheauditorofthecompanyfor:
-auditandreviewservices 3,950 4,773
-shareregistryservices 5,441 3,620
-nonauditservices 2,410 1,150
11,801 9,543
Note21.DirectorandrelatedpartydisclosuresNodirectorofthecompanyreceivesremunerationforservicesasacompanydirectororcommitteemember.
Therearenoexecutiveswithinthecompanywhoseremunerationisrequiredtobedisclosed.
2015 2014
KeyManagementPersonnelShareholdings
Ordinarysharesfullypaid 38,733 38,733
Detailedshareholdingdisclosuresareprovidedintheremunerationreport,includedaspartofthedirectors’
report.
2014 2013 $ $ 2015 2014 $ $
Annual report Lancefield & Romsey Community Financial Services Limited40
Notes to the financial statements (continued)
Note22.Dividendspaidorprovideda. Dividends paid during the year
Current year dividend
100% (2014: 100%) franked dividend - 6 cents (2014: 6 cents) per share 60,642 60,642
Thetaxrateatwhichdividendshavebeenfrankedis30%(2014:30%).
b. Franking account balance
Frankingcreditsavailableforsubsequentreportingperiodsare:
- frankingaccountbalanceasattheendofthefinancialyear 466,495 361,998
- frankingcredits/(debits)thatwillarisefrompayment/(refund)ofincome
taxasattheendofthefinancialyear (107,959) 40,145
- frankingdebitsthatwillarisefromthepaymentofdividendsrecognised
asaliabilityattheendofthefinancialyear - -
Franking credits available for future financial reporting periods: 358,536 402,143
- frankingdebitsthatwillarisefrompaymentofdividendsproposedor
declaredbeforethefinancialreportwasauthorisedforusebutnot
recognisedasadistributiontoequityholdersduringtheperiod - -
Net franking credits available 358,536 402,143
Note23.Earningspershare
2015 $
2014 $
(a) Profit/(loss)attributabletotheordinaryequityholdersofthecompany
used in calculating earnings per share(50,403) 264,111
Number Number
(b) Weightedaveragenumberofordinarysharesusedasthe
denominator in calculating basic earnings per share970,700 970,700
Note24.EventsoccurringafterthereportingdateTherehavebeennoeventsaftertheendofthefinancialyearthatwouldmateriallyaffectthefinancialstatements.
Note25.ContingentliabilitiesandcontingentassetsTherewerenocontingentliabilitiesorcontingentassetsatthedateofthisreporttoaffectthefinancial
statements.
2015 2014 $ $
Annual report Lancefield & Romsey Community Financial Services Limited 41
Notes to the financial statements (continued)
Note26.SegmentreportingTheeconomicentityoperatesintheservicesectorwhereitfacilitatesCommunity Bank® services in Lancefield
andRomsey,VictoriapursuanttoafranchiseagreementwithBendigoandAdelaideBankLimited.
Note27.Registeredoffice/PrincipalplaceofbusinessTheentityisacompanylimitedbyshares,incorporatedanddomiciledinAustralia.Theregisteredofficeand
principal place of business is:
Registered Office Principal Place of Business
20AHighStreet
Lancefield VIC 3435
20AHighStreet
Lancefield VIC 3435
Note28.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
113,693 63,547 1,000 120,000 - - - - 400 400 1 2.44
Receivables - - - - - - - - 127,515 121,994 N/A N/A
Financial liabilities
Interest bearing liabilities
- - 7,106 17,882 332,206 7,106 - - - - 3.51 0.44
Payables - - - - - - - - 16,895 18,045 N/A N/A
Net Fair Values
The net fair values of financial assets and liabilities approximate the carrying values as disclosed in the balance
sheet.Thecompanydoesnothaveanyunrecognisedfinancialinstrumentsattheyearend.
Annual report Lancefield & Romsey Community Financial Services Limited42
Notes to the financial statements (continued)
Note28.Financialinstruments(continued)
Credit Risk
The maximum exposure to credit risk at balance date to recognised financial assets is the carrying amount of
thoseassetsasdisclosedinthebalancesheetandnotestothefinancialstatements.
There are no material credit risk exposures to any single debtor or group of debtors under financial instruments
enteredintobytheeconomicentity.
Interest Rate Risk
Interestrateriskreferstotheriskthatthevalueofafinancialinstrumentorcashflowsassociatedwiththe
instrumentwillfluctuateduetochangesinmarketinterestrates.Interestrateriskarisesfromtheinterestbearing
financialassetsandliabilitiesinplacesubjecttovariableinterestrates,asoutlinedabove.
SensitivityAnalysis
Thecompanyhasperformedsensitivityanalysisrelatingtoitsexposuretointerestrateriskatbalancedate.
Thissensitivityanalysisdemonstratestheeffectonthecurrentyearresultsandequitywhichcouldresultfroma
changeininterestrates.
Asat30June2015,theeffectonprofitandequityasaresultofchangesininterestrate,withallothervariables
remainingconstantwouldbeasfollows:
2015 $
2014 $
Changeinprofit/(loss)
Increaseininterestrateby1% (2,246) 1,586
Decreaseininterestrateby1% (2,246) 1,586
Changeinequity
Increaseininterestrateby1% (2,246) 1,586
Decreaseininterestrateby1% (2,246) 1,586
Annual report Lancefield & Romsey Community Financial Services Limited 43
Directors’declarationInaccordancewitharesolutionofthedirectorsofLancefield&RomseyCommunityFinancialServicesLimited,we
state that:
In the opinion of the directors:
(a) thefinancialstatementsandnotesofthecompanyareinaccordancewiththeCorporationsAct2001,
including:
(i) givingatrueandfairviewofthecompany’sfinancialpositionasat30June2015andofitsperformance
forthefinancialyearendedonthatdate;and
(ii) complyingwithAccountingStandards,theCorporationsRegulations2001andothermandatoryprofessional
reportingrequirements;and
(b) therearereasonablegroundstobelievethatthecompanywillbeabletopayitsdebtsasandwhenthey
becomedueandpayable.
(c) theauditedremunerationdisclosuressetoutintheremunerationreportsectionofthedirectors’reportcomply
withAccountingStandardAASB124RelatedPartyDisclosuresandtheCorporationsRegulations2001.
Thisdeclarationismadeinaccordancewitharesolutionoftheboardofdirectors.
Timothy Gerard McCarthy,
Chairman
Signedonthe24thofSeptember2015.
Annual report Lancefield & Romsey Community Financial Services Limited44
Independent audit report
Annual report Lancefield & Romsey Community Financial Services Limited 45
Independent audit report (continued)
bendigobank.com.au
Lancefield Community Bank® Branch 20A High Street, Lancefield VIC 3435Phone: (03) 5429 1977www.bendigobank.com.au/lancefield
Romsey Community Bank® BranchShop 1, 112 Main Street, Romsey VIC 3434Phone: (03) 5429 5526www.bendigobank.com.au/romsey
Franchisee: Lancefield & Romsey Community Financial Services LimitedPO Box 30, Lancefield VIC 3435ABN: 44 093 517 714
www.bendigobank.com.au (BMPAR15128) (09/15)