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Pyrmont Community Bank®Branch

Annual Report2014

ABN 34 134 051 219

City West Community FinancialServices Limited

Annual report City West Community Financial Services Limited 1

Contents

Chairman’s report 2

Manager’s report 4

Directors’ report 5

Auditor’s independence declaration 12

Financial statements 13

Notes to the financial statements 17

Directors’ declaration 37

Independent audit report 38

Annual report City West Community Financial Services Limited2

For year ending 30 June 2014

Shareholders and supporters will be pleased to learn our trading performance improved very significantly over the

financial year ending 30 June 2014. Despite our incurring a loss of $16,502, there are many encouraging positives

to report:

• Ourpreviousyear’slosscameinatamuchhigher$224,295

• Weactuallyproducedasmalloperatingprofitforthefullyear,priortointerestcharges

• Wemanagedtoachieveprofitinfourofthelastsixmonthsofthefinancialyear

• Ourlendingperformanceshowedanextraordinaryincreaseof312%overlastyear

• Our‘book’orsumofloansanddepositsnowstandsinexcessof$70million.

Consequently,ourDirectorsfeelwehaveturnedthecornerandcanlookforwardtothefuturewithgreatlyrenewed

optimism.Aquicklookattheaccompanyingperformancetrendgraph–preparedbyourSecretaryIanBulluss–

shows additional cause for this sense of optimism.

Oursharpupturninperformancecanbeattributedtothreekeyfactors:

• Consistentbusinessdevelopmentgainsachievedbyourexcellentbranchteam;veryablyledbyBranch

ManagerGarryNoelandstronglysupportedbybusinessbankingspecialist,SanjaySingh.

• Significantlyincreasingacceptanceofourrangeofbankingandfinancialservicesbymembersofourlocal

community.

• Excellentlevelofsupport,bothfinancialandadvisory,fromBendigoandAdelaideBank.Theformerthrough

anadministrativecostsubsidyarrangement,andthelatterfromtheseniorBendigoandAdelaideBank

management team.

Chairman’sreport

90,000

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

- 10,000

- 20,000

- 30,000

- 40,000

CWCFS Business Growth

Business on Books ($000’s)Total Income Trend

Total Expenses Trend

Net Profit (loss) Trend before tax


Thankstoourimprovedperformance,wehavebeenabletoassistanumberofworthyanddiverseorganisations

andlocalprojectssuchasFriendsofPyrmontCommunityCentre,FriendsofUltimoCommunityCentre,Pyrmont

Wine,FoodandArtFestival,UltimoPublicSchool,InternationalGrammarSchool,PyrmontUltimoGlebeMen’s

Shed,theHarrisScholarshipFoundation,PyrmontCaresandtheYMCAspecialneedschildren’sSwimathon.As

ourfinancialcapacitycontinuestoimprove,sotoowillourabilitytodomoreforourcommunity.Wearealsoever

mindfulofthepatienceandlegitimateexpectationsofoursupportiveshareholders.Welookforwardtorewarding

ourshareholderswithdividends,justassoonaswearefinanciallyandlegallyabletodoso.

IwishtothankmyfellowDirectorsfortheirongoingenthusiasmandcommitmenttoourcause.Noneofour

Directorsreceiveanyformofremunerationfortheireffortsandtheycontinuetoworkstrenuouslyforthebenefitof

ourcommunity.Weareallmotivatedbythegoalofbeingabletore-investseriousamountsofmoneyintoourlocal

community.Andwearenowthatmuchclosertoourobjective.

Whenmoremembersofourlocalcommunitytransfersomeoftheirbankingandfinancialservicerequirementsto

our branch, the sooner we will be able to achieve our core purpose and reinvest part of the wealth generated by our

localsupportersbackintoourlocalcommunity.Onceweareprofitable,apivotalpointofwhichourshareholders

maynotbeawareisourpotentialto‘leverage’matchingcontributionsfromstrongandcompatibleorganisations

suchasCityofSydneyandlargelocalcompanies.This‘leverage’wouldenableustobuildonfundsthatcanbe

reinvestedinworthyprojectswithinourlocalcommunity.

Andfinally,don’tforgetthatBendigoandAdelaideBankisthefifthlargestbankinggroupinAustraliaandisinso

many respects, much Bigger than a bank!

Sincerely,

Robert Gavagna

Chairman

Chairman’sreport(continued)


For year ending 30 June 2014

WelcometotheAnnualReportforPyrmontCommunity Bank® Branch.

WehavehadsomeexcellentoutcomesforthePyrmontcommunityin2013/14,withthousandsofdollarsbeing

donatedincommunitygrantsandsponsorships.Wehaveonlybeenabletoachievetheseresultswiththe

continuingsupportofmembersofthecommunitychoosingtodotheirbankingwithus.

Asat30June,wehadveryencouraginggrowthincustomernumberstakingadvantageofourhighlycompetitive

range of products and services, including the pleasing acceptance of our credit cards, insurance and wealth

management,resultinginexcessof$70millioninbusiness.

Thebranchhasbeenheavilyinvolvedwithbusinessdevelopmentduringthisfinancialyear,attendingand

participatinginmanycommunityeventsincludingtheCommunityYardSaleinOctoberatKUMaybankePreSchool,

theChristmasinPyrmontEventinJohnStreetinDecemberandthehighlyacclaimedIndigenousArtShowinMay

atTheInternationalGrammarSchool.

ThestaffhavealsoattendedmanyfunctionsandeventsheldbysuchorganisationsasthePyrmontUltimo

ChamberofCommerce,SydneyUniAFLandUltimoPublicSchool.Beinginvolvedintheseandotherinspiring

communityeventsismostenjoyable.Welookforwardtobeinginvolvedintheseandmanymoreinthefuture.

IwouldliketotakethisopportunitytothankourstaffMike,Emma,PaulandSidaswellastheBoardofDirectors

whoaresuchadelighttoworkwithandtheBendigoandAdelaideBankstateteam.Allpartieshaveprovidedgreat

support while we build and grow our business that in turn will allow us to achieve our goal of enhancing our local

community.

Iwouldalsopersonallyliketothankallthecustomerswhohavealreadytransferredtheirbankingtoour

Community Bank® branch.Forthoseofyouwhohavenot,don’tforgetthatweofferafullrangeofbanking

services,socomeandjoinus.

Remember,itisourcommunitythatmakesusBigger than a bank!

Sincerely,

Garry Noel

Branch Manager

Manager’sreport


Directors’reportFor the financial year ended 30 June 2014

Yourdirectorssubmitthefinancialstatementsofthecompanyforthefinancialyearended30June2014.

Directors

Thenamesanddetailsofthecompany’sdirectorswhoheldofficeduringorsincetheendofthefinancialyear:

Robert Joseph Gavagna

Chairman

Occupation:CompanyDirector

Qualifications,experienceandexpertise:Roberthas40yearsofexperienceasacompanydirectorandmore

than20yearsingeneralmanagement.Robertheadsalongestablishedfamilycompanythatusedtotrade

prominently as importers and distributors of wine, beverage and food products including such successful

brandsasBolla,Caprari,WitherHills,SanpellegrinoandBarilla.Hispriornationalmanagementexperiences

werewithOlivettiAustraliaandlaterwiththeAustralianJapanContainerLine.Thoseexperiencesincluded

managementtraininginFlorence,NewYorkandTokyo.RoberthasamanagementcertificatefromtheNorth

SydneyTechnicalCollege.RobertresidesinPyrmontandisactivelyinvolvedinlocalcommunityorganisations

includinghisStrataPlanExecutiveCommittee;PyrmontCaresandTheBlackwattleCoveCoalitionCommittee.

HeisapastvicepresidentofItalianOperaFoundationAustraliaLtdaswellasapastdeputychairmanofthe

ItalianChamberofCommerce&IndustrySydney.

Special responsibilities: Chairman

Interestsinshares:10,001

Patricia Teresa Strong

Treasurer

Occupation:UniversityLecturer

Patricia(Trish)iscurrentlyanaccountingacademicattheUniversityofNewSouthWaleslecturinginE-Business

StrategiesandProcessesandQualitativeResearchMethodstoadvancedundergraduateandpost-graduate

accountingstudents.TrishhaspreviouslytaughtaccountinginUK,HongKongandotherAustralianuniversities.

TrishisaCertifiedPracticingAccountant(CPA),CertifiedManagmentAccountant(CMA)andamemberofthe

AustralianInstituteofCompanyDirectors(MAICD).PriortoenteringacademiaTrishworkedformorethan20

yearsinIndustryholdingrolesincludingmanagementaccountant;branchaccountant;costanalyst;change

agentspecializinginISimplementations.Trish’sindustryexperiencewasbasedaroundutilisingheraccounting,

organizingandsystemsanalysisskillstoimplementprocessre-engineeringandorganisationalchange

programsinanumberofinternationalcompaniesworkinginUK,Europe,AsiaandAustralia.Trishholdsa

Doctoratedegree(PhD)fromtheuniversityofNewSouthWales,aMastersofBusinessAdministrationdegree

(MBA)fromCurtinUniversityandaBachelorofSocialSciencewithhonours(BSSc.)fromQueen’sUniversity,

Belfast.Trishhasbeenanactivememberoflocalcommunitygroupsthroughouthercareerincluding,inthe

Pyrmontarea,theJacksonsLandingcommunityAssociationandStBede’sChurch,andiscurrentlyamember

oftheGreatIrishFamineCommemorationCommittee(GIFCC)

Specialresponsibilities:Treasurer,Finance,AuditandRiskCommittee



Directors’report(continued)

Directors (continued)

Ian Gregory Bulluss

Secretary

Occupation:Retired.Manager,Contracts&RelationshipManagement

Qualifications,experienceandexpertise:Ian’slongcareerwithinNSWGovernmentsawhisinformation

technologyandmanagementexpertiseextensivelyengagedwithineducationandhumanservices.Ianresides

inPyrmontandisanactivememberofthelocalcommunitywithinvolvementinPyrmontCaresInc.,hisStrata

PlanExecutiveCommittee(Treasurer),theJacksonsLandingCommunityAssociationandtheNSWJustice

Association.IanholdsaDiplomainTeaching(SydneyCollegeofAdv.Ed.),BachelorofArts(UniversityofNew

England),GraduateDiplomainComputing(SydneyCollegeofAdv.ED.),CertificateinManagement(Universityof

WesternSydney),MasterofComputing(UniversityofWesternSydney),andMasterofBusinessAdministration

(SturtUniversity,Bathurst).

Specialresponsibilities:Secretary,Finance,AuditandRiskCommittee


Margaret Broadbent

Director

Occupation:Retired.RegisteredNurse

Qualifications,experienceandexpertise:MargaretisaretiredRegisteredNursewithextensiveexperiencein

OrthopaedicNursing,AgedCareandCommunityhealth.Margarethasservedontheexecutivecommittees

ofanumberofprofessionalassociationsincludingtheNSWWoundCareassociation,anumberofhospital

committeesaswellasbeinginvolvedinmanyCommunitygroups.SheisanactivememberofanOwners

CorporationandCommunityGarden.MargaretholdsqualificationsasaRegisteredNurse-Midwifery&

OrthopaedicCertificate.

Specialresponsibilities:MarketingCommittee-Publicity


Charles Perry

Director

Occupation:Retired.BusinessManagementConsultant.

Qualifications,experienceandexpertise:CharlesisactivelyinvolvedinmanyCommunityGroupsincluding

beingafoundingmemberofFriendsofPyrmontPointandPyrmontCaresInc.andhisStratacommittee.

Charles’qualificationsincludeBachelorofArtsandMasterofBusinessAdministration.Charleshasextensive

experienceinbusinessimprovementpracticesincludingBusinessProcessRe-engineering,BusinessPlanning

andTrainingandDevelopment.

Special responsibilities: Deputy Chairman

Interestinshares:12,501

John Charles Marsden

Director

Occupation:Retired.CommercialPilot

Qualifications,experienceandexpertise:JohnisaretiredArmyOfficerandCommercialInternationalAirline

Pilot.AmemberoftheRSLandPyrmontCaresIncorporated,JohnisactivelyinvolvedinthePyrmontUltimo

community.JohnhasbeenleadingtheCityWestCommunityFinancialServicesMarketingcommitteesince

2010.

Specialresponsibilities:MarketingCommitteeChairman




Directors (continued)

John Leslie Hoff

Director

Occupation:FruitGrower

Qualifications,experienceandexpertise:JohnisanactivememberofhisStratacommittee,PyrmontCares

Inc.,FriendsofPyrmontPointandPyrmontUltimoGlebeMen’sShedandothercommunitygroups.Aretired

airlinepilot,healsoholdsanAssociateDegreeinAppliedScience,Winemaking/Viticulture.

Specialresponsibilities:HRCommittee,PropertyCommittee


Ashley Leander Limbury

Director

Occupation:ConflictResolution&MediationConsultant,MBA,B.Ed(SocSc.Hons).

Qualifications,experienceandexpertise:Ashleyisanexperiencedmediatorandtribunalmemberprimarily

involvedwithworkplace,discriminationandcommercialmatters.Ashleyalsohasretailtenancyandfranchising

mediationexpertiseandexperienceinHumanResourcesandstaffmanagement.Ashleyisamemberofthe

CommunityWaterSportsCentreandpreviouslybeenamemberofalocaldragonboatteam.Hehasheldprior

rolesaschairmanandmemberofalocalStrataCommittee.Hisqualificationsinclude:M.B.A.,2002(University

ofTechnologySydney).B.Ec.(Soc,Sci)(Hons.),doublemajorinEconomicsandPsychology,1994(Sydney

University).

Specialresponsibilities:Marketing,HRCommittee

Interestinshares:1,501

Michael Parker

Director(Appointed27November2013)

Occupation:ChiefFinancialOfficer

Qualifications,experienceandexpertise:MichaelisaChiefFinancialOfficerwithmanyyearsofexperiencein

finance and accounting .He has held positions with both professional accounting firms and in media. He was

instrumentalintheestablishmentoftheBendi-GOrunninggroupforthelocalPyrmontcommunity.Michael

holdsabachelorofCommerce;ACA(LAPSICO)

Specialresponsibilities:AuditCommittee,MarketingCommittee

Interestinshares:Nil

Peter John Devoy

Director(Resigned24July2013)

Occupation:Retired.FinancialServicesConsultant.

Qualifications,experienceandexpertise:PeterisanactivememberofthePyrmontcommunity,In2012Peter

establishedandiscurrentPresidentofPyrmontCaresInc.;anorganisationhelpingsupportSydney’sneedy

residents.Peterisalsoactivelyengagedwithhisbuilding’sBodyCorporate(secretary)andactivelyinvolvedin

manychurchrelatedcommittees.Peterhasextensiveexperienceinbanking,accounting,administrationand

humanresourcemanagementandisaFellowoftheFinancialServicesInstituteofAustralia.

Special responsibilities: Nil


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

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



Company Secretary

ThecompanysecretaryisIanGregoryBulluss.Ianhasheldthispositionsince19February2010followingonfrom

CharlesPerrywhowasappointedtothepositionofsecretaryuponIncorporationon6November2008.Ian’slong

careerwithinNSWGovernmentsawhisinformationtechnologyandmanagementexpertiseextensivelyengaged

withineducationandhumanservices.IanisaregisteredJusticeofthePeace(NSW)andanactivememberofthe

communitywithinvolvementinPyrmontCaresInc.(Secretary),BodyCorporateStrataCommittee(Treasurer)and

theJacksonsLandingCommunityAssociation.

Principal Activities

TheprincipalactivitiesofthecompanyduringthefinancialyearwerefacilitatingCommunity Bank® services under

managementrightstooperateafranchisedbranchofBendigoandAdelaideBankLimited.

Therehasbeennosignificantchangesinthenatureoftheseactivitiesduringtheyear.

Operating results

Operationsandrevenuehavecontinuedtoimprove.Thelossofthecompanyforthefinancialyearafterprovision

forincometaxwas:

Year ended 30 June 2014$

Year ended 30 June 2013$

(16,502) (224,295)

Remuneration Report

(a)RemunerationofDirectors

All Directors of the Company are on a voluntary basis, therefore no remuneration guidelines have been

prepared.

(b)RemunerationofAreaandBranchManagers

TheBoardisresponsibleforthedeterminationofremunerationpackagesandpoliciesapplicabletothe

BranchManagerandallthestaff.TheBranchManagerisinvitedtotheBoardmeetingsasrequiredtodiscuss

performanceandremunerationpackages.

TheBoard’spolicyinrespectofthebranchmanageristomaintainremunerationatparitywithintheCommunity

Bank® networkandlocalmarketratesforcomparableroles.

Therearenoexecutiveswhoaredirectlyaccountableandresponsibleforthestrategicdirectionand

operationalmanagementoftheentity.Thisiswhollyaboardrole.

TherearethereforenoSpecifiedExecutives.



Remuneration Report (continued)

Directors’shareholdings

Balance at start of the year

Changes during the

year

Balance at end of the year

RobertJosephGavagna 10,001 - 10,001

PatriciaTeresaStrong 5,001 - 5,001

IanGregoryBulluss 10,501 - 10,501

MargaretBroadbent 6,001 - 6,001

CharlesPerry 12,501 - 12,501

JohnLeslieHoff 50,501 - 50,501

AshleyLeanderLimbury 1,501 - 1,501

John Charles Marsden 5,501 - 5,501

MichaelParker(Appointed27November2013) - - -

PeterJohnDevoy(Resigned24July2013) 3,501 - 3,501

Dividends

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

the current year.

Significant changes in the state of affairs

Intheopinionofthedirectorstherewerenosignificantchangesinthestateofaffairsofthecompanythat

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

Events since the end of the financial year

Therearenomattersorcircumstancesthathavearisensincetheendofthefinancialyearthathavesignificantly

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

affairs of the company, in future years.

Likely developments

Thecompanywillcontinueitspolicyoffacilitatingbankingservicestothecommunity.

Environmental regulation

Thecompanyisnotsubjecttoanysignificantenvironmentalregulation.

Indemnification and insurance of directors and officers

Thecompanyhasindemnifiedalldirectorsandthemanagerinrespectofliabilitiestootherpersons(otherthan

the company or related body corporate) that may arise from their position as directors or manager of the company

exceptwheretheliabilityarisesoutofconductinvolvingthelackofgoodfaith.



Indemnification and insurance of directors and officers (continued)

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

thecontractofinsurance.Thecompanyhasnotprovidedanyinsuranceforanauditorofthecompanyorarelated

body corporate.

Directors’ meetings

Thenumberofdirectors’meetingsattendedbyeachofthedirectorsofthecompanyduringtheyearwere:

Board Meetings Attended

Eligible Attended

RobertJosephGavagna 10 10

PatriciaTeresaStrong 10 9

IanGregoryBulluss 10 9

MargaretBroadbent 10 10

CharlesPerry 10 10

John Charles Marsden 10 9

JohnLeslieHoff 10 7

AshleyLeanderLimbury 10 7

MichaelParker(Appointed27November2013) 10 6

PeterJohnDevoy(Resigned24July2013) 1 1

Proceedings on behalf of the company

NopersonhasappliedtotheCourtundersection237oftheCorporationsAct2001forleavetobringproceedings

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

takingresponsibilityonbehalfofthecompanyforallorpartofthoseproceedings.

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

237oftheCorporationsAct2001.

Non audit services

Thecompanymaydecidetoemploytheauditoronassignmentsadditionaltotheirstatutorydutieswherethe

auditor’sexpertiseandexperiencewiththecompanyareimportant.Detailsoftheamountspaidorpayabletothe

auditor (Andrew Frewin Stewart) for audit and non audit services provided during the year are set out in the notes

to the accounts.

Theboardofdirectorshasconsideredtheposition,inaccordancewiththeadvicereceivedfromtheboardandis

satisfiedthattheprovisionofthenon-auditservicesiscompatiblewiththegeneralstandardofindependencefor

auditors imposed by the Corporations Act 2001.



Non audit services (continued)

Thedirectorsaresatisfiedthattheprovisionofnon-auditservicesbytheauditor,assetoutinthenotesdidnot

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

• allnon-auditserviceshavebeenreviewedbytheboardtoensuretheydonotimpactontheimpartialityand

objectivityoftheauditor

• noneoftheservicesunderminethegeneralprinciplesrelatingtoauditorindependenceassetoutinAPES110

CodeofEthicsforProfessionalAccountants,includingreviewingorauditingtheauditor’sownwork,actingin

amanagementoradecision-makingcapacityforthecompany,actingasadvocateforthecompanyorjointly

sharingeconomicriskandrewards.

Auditor’s independence declaration

Acopyoftheauditor’sindependencedeclarationasrequiredundersection307CoftheCorporationsAct2001is

set out on page 12.

SignedinaccordancewitharesolutionoftheboardofdirectorsatPyrmont,NewSouthWaleson22August2014.

Robert Joseph Gavagna,

Chairman


Auditor’sindependencedeclaration


Financial statementsStatementofComprehensiveIncome for the year ended 30 June 2014

Note 2014 2013 $ $

Revenuefromordinaryactivities 4 464,190 369,279

Employeebenefitsexpense (159,517) (275,428)

Charitabledonations,sponsorship,advertisingandpromotion (17,147) (17,249)

Occupancyandassociatedcosts (140,119) (136,878)

Systemscosts (35,057) (35,852)

Depreciationandamortisationexpense 5 (35,256) (35,156)

Financecosts 5 (22,737) (19,668)

Generaladministrationexpenses (70,859) (73,343)

Loss before income tax expense (16,502) (224,295)

Incometaxexpense 6 - -

Loss after income tax expense (16,502) (224,295)

Total comprehensive income for the year (16,502) (224,295)

Earnings per share for loss attributable to the ordinary

shareholders of the company: ¢ ¢

Basicearningspershare 20 (1.66) (22.51)

Theaccompanyingnotesformpartofthesefinancialstatements.


Financial statements (continued)

BalanceSheet as at 30 June 2014

Note 2014 2013 $ $

ASSETS

Current Assets

Cashandcashequivalents 7 100 100

Tradeandotherreceivables 8 34,176 26,098

Total Current Assets 34,276 26,198

Non-Current Assets

Property,plantandequipment 9 178,935 189,981

Intangibleassets 10 16,318 38,318

Total Non-Current Assets 195,253 228,299

Total Assets 229,529 254,497

LIABILITIES

Current Liabilities

Tradeandotherpayables 12 7,951 10,948

Borrowings 13 464,868 461,984

Provisions 14 7,005 12,032

Total Current Liabilities 479,824 484,964

Non-Current Liabilities

Provisions 14 1,785 5,111

Total Non-Current Liabilities 1,785 5,111

Total Liabilities 481,609 490,075

Net Assets (252,080) (235,578)

Equity

Issuedcapital 15 961,485 961,485

Accumulatedlosses 16 (1,213,565) (1,197,063)

Total Equity (252,080) (235,578)




StatementofChangesinEquity for the year ended 30 June 2014

Issued Accumulated Total capital losses equity $ $ $

Balance at 1 July 2012 961,485 (972,768) (11,283)

Total comprehensive income for the year - (224,295) (224,295)

Transactions with owners in their capacity as owners:

Sharesissuedduringperiod - - -

Costsofissuingshares - - -

Dividendsprovidedfororpaid - - -

Balance at 30 June 2013 961,485 (1,197,063) (235,578)

Balance at 1 July 2013 961,485 (1,197,063) (235,578)

Total comprehensive income for the year - (16,502) (16,502)

Transactions with owners in their capacity as owners:

Sharesissuedduringperiod - - -

Costsofissuingshares - - -

Dividendsprovidedfororpaid - - -

Balance at 30 June 2014 961,485 (1,213,565) (252,080)




Statement of Cash Flows for the year ended 30 June 2014

Note 2014 2013 $ $

Cash flows from operating activities

Receiptsfromcustomers 488,301 388,338

Paymentstosuppliersandemployees (466,238) (569,473)

Interestpaid (22,737) (19,668)

Net cash used in operating activities 17 (674) (200,803)

Cash flows from investing activities

Paymentsforproperty,plantandequipment (2,210) -

Net cash used in investing activities (2,210) -

Net decrease in cash held (2,884) (200,803)

Cash and cash equivalents at the beginning of the financial year (461,884) (261,081)

Cash and cash equivalents at the end of the financial year 7(a) (464,768) (461,884)



Notes to the financial statementsFor year ended 30 June 2014

Note 1. Summary of significant accounting policies

a) Basis of preparation

ThesegeneralpurposefinancialstatementshavebeenpreparedinaccordancewithAustralianAccounting

StandardsandInterpretationsissuedbytheAustralianAccountingStandardBoardsandtheCorporationsAct

2001.Thecompanyisafor-profitentityforthepurposeofpreparingthefinancialstatements.

CompliancewithIFRS

ThesefinancialstatementsandnotescomplywithInternationalFinancialReportingStandards(IFRS)asissuedby

theInternationalAccountingStandardsBoard(IASB).

Critical accounting estimates

Thepreparationofthefinancialstatementsrequirestheuseofcertaincriticalaccountingestimates.Italso

requiresmanagementtoexerciseitsjudgementintheprocessofapplyingthecompany’saccountingpolicies.

Theseareasinvolvingahigherdegreeofjudgementorcomplexities,orareaswhereassumptionsandestimates

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

Historical cost convention

Thefinancialstatementshavebeenpreparedunderthehistoricalcostconventiononanaccrualsbasisas

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

currentvaluationsofnon-currentassets.Costisbasedonthefairvaluesoftheconsiderationgiveninexchange

for assets.

Comparative figures

WhererequiredbyAustralianAccountingStandardscomparativefigureshavebeenadjustedtoconformwith

changes in presentation for the current financial year.

Adoption of new and amended accounting standards

Thecompanyadoptedthefollowingstandardsandamendments,mandatoryforthefirsttimefortheannual

reporting period commencing 1 July 2013:

• AASB2011-4AmendmentstoAustralianAccountingStandardstoRemoveIndividualKeyManagement

PersonnelDisclosureRequirements.

• AASB10ConsolidatedFinancialStatements,AASB11JointArrangements,AASB12DisclosureofInterests

inOtherEntities,AASB128InvestmentsinAssociatesandJointVentures,AASB127SeparateFinancial

StatementsandAASB2011-7AmendmentstoAustralianAccountingStandardsarisingfromtheConsolidation

and Joint Arrangements Standards.

• AASB2012-9AmendmenttoAASB1048arisingfromtheWithdrawalofAustralianInterpretation1039.

• AASB2012-10AmendmentstoAustralianAccountingStandards–TransitionGuidanceandotherAmendments

whichprovidesanexemptionfromtherequirementtodisclosetheimpactofthechangeinaccountingpolicyon

the current period.

• AASB13FairValueMeasurementandAASB2011-8AmendmentstoAustralianAccountingStandardsarising

fromAASB13.


Notes to the financial statements (continued)

Note 1. Summary of significant accounting policies (continued)

a) Basis of preparation (continued)

Adoption of new and amended accounting standards (continued)

• AASB119EmployeeBenefits(September2011)andAASB2011-10AmendmentstoAustralianAccounting

StandardsarisingfromAASB119(September2011).

• AASB2012-5AmendmentstoAustralianAccountingStandardsarisingfromAnnualImprovements2009-2011

Cycle.

• AASB2012-2AmendmentstoAustralianAccountingStandards–Disclosures–OffsettingFinancialAssetsand

FinancialLiabilities.

AASB2011-4removestheindividualkeymanagementpersonneldisclosurerequirementsinAASB124Related

PartyDisclosures.Asaresultthecompanynowonlydisclosesthekeymanagementpersonnelcompensationin

totalandforeachofthecategoriesrequiredinAASB124.Detailedkeymanagementpersonnelcompensationis

outlinedintheremunerationreport,includedaspartofthedirectors’report.

TheadoptionofrevisedstandardAASB119hasresultedinachangetotheaccountingforthecompany’sannual

leaveobligations.Astheentitydoesnotexpectallannualleavetobetakenwithin12monthsoftherespective

servicebeingprovided,annualleaveobligationsarenowclassifiedaslong-termemployeebenefitsintheirentirety.

Thischangesthemeasurementoftheseobligations,astheentireobligationisnowmeasuredonadiscounted

basisandnolongersplitintoashort-termandalong-termportion.However,theimpactofthischangeis

consideredimmaterialonthefinancialstatementsoverallasthemajorityoftheannualleaveisstillexpectedtobe

takenwithin12monthsaftertheendofthereportingperiod.

None of the remaining new standards and amendments to standards that are mandatory for the first time for the

financial year beginning 1 July 2013 affected any of the amounts recognised in the current period or any prior

periodandarenotlikelytoaffectfutureperiods.

Thecompanyhasnotelectedtoapplyanypronouncementsbeforetheirmandatoryoperativedateintheannual

reporting period beginning 1 July 2013.

Economicdependency-BendigoandAdelaideBankLimited

ThecompanyhasenteredintoafranchiseagreementwithBendigoandAdelaideBankLimitedthatgovernsthe

management of the Community Bank® branchatPyrmont,NewSouthWales.

ThebranchoperatesasafranchiseofBendigoandAdelaideBankLimited,usingthename“BendigoBank”and

thelogoandsystemofoperationsofBendigoandAdelaideBankLimited.ThecompanymanagestheCommunity

Bank® branchonbehalfofBendigoandAdelaideBankLimited,howeveralltransactionswithcustomersconducted

through the Community Bank® branchareeffectivelyconductedbetweenthecustomersandBendigoandAdelaide

BankLimited.

AlldepositsaremadewithBendigoandAdelaideBankLimited,andallpersonalandinvestmentproductsare

productsofBendigoandAdelaideBankLimited,withthecompanyfacilitatingtheprovisionofthoseproducts.All

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

anyothertransactionthatinvolvescreatinganewdebt,orincreasingorchangingthetermsofanexistingdebt

owedtoBendigoandAdelaideBankLimited,mustbeapprovedbyBendigoandAdelaideBankLimited.Allcredit

transactionsaremadewithBendigoandAdelaideBankLimited,andallcreditproductsareproductsofBendigo

andAdelaideBankLimited.

BendigoandAdelaideBankLimitedprovidessignificantassistanceinestablishingandmaintainingtheCommunity

Bank® branchfranchiseoperations.Italsocontinuestoprovideongoingmanagementandoperationalsupport

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

to:





Economicdependency-BendigoandAdelaideBankLimited(continued)

•adviceandassistanceinrelationtothedesign,layoutandfitoutoftheCommunity Bank® branch

•trainingforthebranchmanagerandotheremployeesinbanking,managementsystemsandinterfaceprotocol

•methodsandproceduresforthesaleofproductsandprovisionofservices

•securityandcashlogisticcontrols

•calculationofcompanyrevenueandpaymentofmanyoperatingandadministrativeexpenses

•theformulationandimplementationofadvertisingandpromotionalprograms

•salestechniquesandpropercustomerrelations.

Going concern

Thenetliabilitiesofthecompanyasat30June2014were$252,080andthelossmadefortheyearwas

$16,502, bringing accumulated losses to $1,213,565.

In addition: $

Totalassetswere 229,529

Totalliabilitieswere 481,609

Operatingcashflowswere (674)

Therewasa92.64%decreaseinthelossrecordedforthefinancialyearended30June2014whencomparedto

the prior year.

Thecompanymeetsitsdaytodayworkingcapitalrequirementsthroughanoverdraftfacilitythatisdueforrenewal

on30September2014.Theoverdrafthasanapprovedlimitof$575,000andwasdrawnto$464,868asat30

June 2014.

AninterestfreeperiodoftwoyearsexpiredduringFebruary2012.Asaresult$22,737ofinterestexpensewas

incurredduringthe2014financialyear.ConcessionalrevenuearrangementswithBendigoBankwherebythe

company received an additional, supplementary commission also ended during the year.

Thecompany’sbusinessactivities,togetherwiththefactorslikelytoaffectitsfuturedevelopment,performance

andpositionaresetoutinthedirectors’reportonpages5to11.Thefinancialpositionofthecompany,itscash

flows,liquiditypositionandborrowingfacilitiesaredescribedinthefinancialstatements.

Thecurrenteconomicenvironmentisdifficultandwhilerevenuecontinuestoincreasethecompanyhasagain

reportedanoperatinglossfortheyear.Thedirectorsconsiderthattheoutlookpresentssignificantchallengesin

termsofbankingbusinessvolumeandpricingaswellasforoperatingcosts.Whilstthedirectorshaveinstituted

measures to preserve cash and secure additional finance, these circumstances create material uncertainties over

futuretradingresultsandcashflows.

Thecompany’sforecastsandprojections,takingaccountofreasonablypossiblechangesintradingperformance,

showthatthecompanywillberequiredtoseekanextensiontoitsoverdraftfacility.





Going concern (continued)

ThecompanyhashelddiscussionswithBendigoandAdelaideBankLimitedaboutitsfutureborrowingneeds.

Itislikelythatthesediscussionswillnotbecompletedforsometimebutnomattershavebeendrawntoits

attentiontosuggestthatrenewalmaynotbeforthcomingonacceptableterms.Thecompanyhasalsoobtainedan

undertakingofsupportfromBendigoandAdelaideBankLimitedthatitwillcontinuetosupportthecompanyand

itsoperationsforthe2014/15financialyear.Thissupportisprovidedonthebasisthatthecompanycontinuesto

fulfilitsobligationsunderthefranchiseagreementandcontinuestoworkcloselywithBendigoandAdelaideBank

Limitedtofurtherdevelopitsbusiness.

Thedirectorshaveconcludedthatthecombinationofthecircumstancesaboverepresentsamaterialuncertainty

thatcastsdoubtuponthecompany’sabilitytocontinueasagoingconcernandthat,therefore,thecompanymay

be unable to realise its assets and discharge its liabilities in the normal course of business.

Nevertheless,aftermakingenquiriesandconsideringtheuncertaintiesdescribedabove,thedirectorshavea

reasonableexpectationthatthecompanyhasadequateresourcestocontinueinoperationalexistenceforthe

foreseeable future. For these reasons, they continue to adopt the going concern basis of accounting in preparing

the annual financial statements.

Thefollowingisasummaryofthematerialaccountingpoliciesadoptedbythecompanyinthepreparationofthe

financialstatements.Theaccountingpolicieshavebeenconsistentlyapplied,unlessotherwisestated.

b) Revenue

Revenueisrecognisedwhentheamountofrevenuecanbereliablymeasured,itisprobablethatfutureeconomic

benefitswillflowtothecompanyandanyspecificcriteriahavebeenmet.Interestandfeerevenueisrecognised

whenearned.Thegainorlossondisposalofproperty,plantandequipmentisrecognisedonanetbasisandis

classifiedasincomeratherthanrevenue.AllrevenueisstatednetoftheamountofGoodsandServicesTax(GST).

Revenuecalculation

ThefranchiseagreementwithBendigoandAdelaideBankLimitedprovidesforthreetypesofrevenueearnedby

thecompany.First,thecompanyisentitledto50%ofthemonthlygrossmarginearnedbyBendigoandAdelaide

BankLimitedonproductsandservicesprovidedthroughthecompanythatareregardedas“daytoday”banking

business(i.e.‘marginbusiness’).Thisarrangementalsomeansthatifthegrossmarginreflectsaloss(thatis,the

grossmarginisanegativeamount),thecompanyeffectivelyincurs,andmustbear,50%ofthatloss.

ThesecondsourceofrevenueiscommissionpaidbyBendigoandAdelaideBankLimitedontheotherproducts

andservicesprovidedthroughthecompany(i.e.‘commissionbusiness’).Thecommissioniscurrentlypayable

on various specified products and services, including insurance, financial planning, common fund, Sandhurst

Select,superannuation,commercialloanreferrals,productsreferredbyRuralBank,leasingreferrals,fixedloans

andcertaintermdeposits(>90days).Theamountofcommissionpayablecanbevariedinaccordancewith

theFranchiseAgreement(which,insomecases,permitscommissionstobevariedatthediscretionofBendigo

andAdelaideBankLimited).Thisdiscretionhasbeenexercisedonseveraloccasionspreviously.Forexamplein

February2011andFebruary2013BendigoandAdelaideBankLimitedreducedcommissionsontwocorebanking

productstoensureamoreevendistributionofincomebetweenBendigoandAdelaideBankLimitedandits

Community Bank® partners.Therevenuesharemodelissubjecttoregularreviewtoensurethattheinterestsof

BendigoandAdelaideBankLimitedandCommunity Bank® companies remain balanced.




b) Revenue (continued)

Revenuecalculation (continued)

Thethirdsourceofrevenueisaproportionofthefeesandcharges(i.e.whatarecommonlyreferredtoas‘bank

feesandcharges’)chargedtocustomers.Thisproportion,determinedbyBendigoandAdelaideBankLimited,may

varybetweenproductsandservicesandmaybeamendedbyBendigoandAdelaideBankLimitedfromtimeto

time.

c) Income tax

Currenttax

Currenttaxiscalculatedbyreferencetotheamountofincometaxespayableorrecoverableinrespectofthe

taxableprofitorlossfortheperiod.Itiscalculatedusingtaxratesandtaxlawsthathavebeenenactedor

substantivelyenactedbyreportingdate.Currenttaxforcurrentandpriorperiodsisrecognisedasaliability(or

asset)totheextentthatitisunpaid(orrefundable).

Deferredtax

Deferredtaxisaccountedforusingthebalancesheetliabilitymethodontemporarydifferencesarisingfrom

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

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

recognition of assets and liabilities (other than as a result of a business combination) which affects neither

taxableincomenoraccountingprofit.Furthermore,adeferredtaxliabilityisnotrecognisedinrelationtotaxable

temporary differences arising from goodwill.

Deferredtaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplytotheperiod(s)when

theassetandliabilitygivingrisetothemarerealisedorsettled,basedontaxrates(andtaxlaws)thathavebeen

enactedorsubstantivelyenactedbyreportingdate.Themeasurementofdeferredtaxliabilitiesreflectsthetax

consequencesthatwouldfollowfromthemannerinwhichtheconsolidatedentityexpects,atthereportingdate,to

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

Deferredtaxassetsandliabilitiesareoffsetwhenthereisalegallyenforceablerighttooffsetcurrenttaxand

whenthebalancesrelatetotaxesleviedbythesametaxationauthorityandthecompanyentityintendstosettle

itstaxassetsandliabilitiesonanetbasis.

Currentanddeferredtaxfortheperiod

Currentanddeferredtaxisrecognisedasanexpenseorincomeinthestatementofcomprehensiveincome,

exceptwhenitrelatestoitemscreditedordebitedtoequity,inwhichcasethedeferredtaxisalsorecognised

directlyinequity,orwhereitarisesfrominitialaccountingforabusinesscombination,inwhichcaseitistakeninto

accountinthedeterminationofgoodwillorexcess.

d) Employee entitlements

Provisionismadeforthecompany’sliabilityforemployeebenefitsarisingfromservicesrenderedbyemployees

tobalancedate.Employeebenefitsthatareexpectedtobesettledwithinoneyearhavebeenmeasuredatthe

amountsexpectedtobepaidwhentheliabilityissettled,plusrelatedon-costs.Employeebenefitspayablelater

thanoneyearhavebeenmeasuredatthepresentvalueoftheestimatedfuturecashoutflowstobemadefor

those benefits.




d) Employee entitlements (continued)

Thecompanycontributestoadefinedcontributionplan.Contributionstoemployeesuperannuationfundsare

charged against income as incurred.

e) Cash and cash equivalents

Forthepurposesofthestatementofcashflows,cashincludescashonhandandinbanksandinvestmentsin

moneymarketinstruments,netofoutstandingbankoverdrafts.Bankoverdraftsareshownwithinborrowingsin

current liabilities on the balance sheet.

f) Trade receivables and payables

Receivablesarecarriedattheiramountsdue.Thecollectabilityofdebtsisassessedatbalancedateandspecific

provisionismadeforanydoubtfulaccounts.Liabilitiesfortradecreditorsandotheramountsarecarriedatcost

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

billed to the company.

g) Property, plant and equipment

Plantandequipment,leaseholdimprovementsandequipmentunderfinanceleasearestatedatcostless

accumulateddepreciationandimpairment.Costincludesexpenditurethatisdirectlyattributabletotheacquisition

oftheitem.Intheeventthatsettlementofallorpartofthepurchaseconsiderationisdeferred,costisdetermined

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

Depreciationisprovidedonproperty,plantandequipment,includingfreeholdbuildingsbutexcludingland.

Depreciationiscalculatedonastraightlinebasissoastowriteoffthenetcostofeachassetoveritsexpected

usefullifetoitsestimatedresidualvalue.Leaseholdimprovementsaredepreciatedattherateequivalentto

theavailablebuildingallowanceusingthestraightlinemethod.Theestimatedusefullives,residualvaluesand

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

Thefollowingestimatedusefullivesareusedinthecalculationofdepreciation:

-leaseholdimprovements 40 years

-plantandequipment 2.5-40 years

-furnitureandfittings 4-40 years

h) Intangibles

ThefranchisefeepaidtoBendigoandAdelaideBankLimitedhasbeenrecordedatcostandisamortisedona

straight line basis over the life of the franchise agreement.

TherenewalprocessingfeepaidtoBendigoandAdelaideBankLimitedwhenrenewingthefranchiseagreement

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

i) Payment terms

Receivablesandpayablesarenoninterestbearingandgenerallyhavepaymenttermsofbetween30and90days.

j) Borrowings

Allloansareinitiallymeasuredattheprincipalamount.Interestisrecognisedasanexpenseasitaccrues.




k) Financial instruments

Recognitionandinitialmeasurement

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

becomes a party to the contractual provisions of the instrument.

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

classified and measured as set out below.

Derecognition

Financialassetsarederecognisedwherethecontractualrightstoreceiptofcashflowsexpiresortheassetis

transferredtoanotherpartywherebytheentitynolongerhasanysignificantcontinuinginvolvementintherisks

and benefits associated with the asset.

Classification and subsequent measurement

(i) Loansandreceivables

Loansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenot

quotedinanactivemarketandaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestrate

method.

(ii) Held-to-maturityinvestments

Held-to-maturityinvestmentsarenon-derivativefinancialassetsthathavefixedmaturitiesandfixedor

determinablepayments,anditistheentity’sintentiontoholdtheseinvestmentstomaturity.Theyare

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

(iii)Available-for-salefinancialassets

Available-for-salefinancialassetsarenon-derivativefinancialassetsthatareeithernotsuitabletobeclassified

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

Theycompriseinvestmentsintheequityofotherentitieswherethereisneitherafixedmaturitynorfixedor

determinable payments.

Theyaresubsequentlymeasuredatfairvaluewithchangesinsuchfairvalue(i.e.gainsorlosses)recognised

intheStatementofComprehensiveIncome.Available-for-salefinancialassetsareincludedinnon-current

assetsexceptwherethatareexpectedtobesoldwithin12monthsaftertheendofthereportingperiod.All

other financial assets are classified as current assets.

(iii) Financial liabilities

Non-derivativefinancialliabilities(excludingfinancialguarantees)aresubsequentlymeasuredatamortisedcost

using the effective interest rate method.

Impairment

Ateachreportingdate,theentityassesseswhetherthereisobjectiveevidencethatafinancialinstrumenthas

beenimpaired.Impairmentlossesarerecognisedinthestatementofcomprehensiveincome.

l) Leases

Leasesoffixedassetswheresubstantiallyalltherisksandbenefitsincidentaltotheownershipoftheasset,

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

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

propertyorthepresentvalueoftheminimumleasepayments,includinganyguaranteedresidualvalues.Lease

paymentsareallocatedbetweenthereductionoftheleaseliabilityandtheleaseinterestexpensefortheperiod.




l) Leases (continued)

Leasedassetsaredepreciatedonastraight-linebasisovertheshorteroftheirestimatedusefullivesorthelease

term.Leasepaymentsforoperatingleases,wheresubstantiallyalltherisksandbenefitsremainwiththelessor,

arechargedasexpensesintheperiodsinwhichtheyareincurred.Leaseincentivesunderoperatingleasesare

recognisedasaliabilityandamortisedonastraight-linebasisoverthelifeoftheleaseterm.

m) Provisions

Provisionsarerecognisedwhentheeconomicentityhasalegal,equitableorconstructiveobligationtomakea

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

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

amount of the obligation.

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

recommended on or before the reporting date.

n) Contributed equity

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

theamountofGSTincurredisnotrecoverablefromthetaxationauthority.Inthesecircumstances,theGSTis

recognisedaspartofthecostofacquisitionoftheassetoraspartoftheexpense.

ReceivablesandpayablesarestatedwiththeamountofGSTincluded.ThenetamountofGSTrecoverablefrom,

orpayableto,thetaxationauthorityisincludedaspartofreceivablesorpayablesinthebalancesheet.Cashflows

areincludedinthestatementofcashflowsonagrossbasis.

TheGSTcomponentsofcashflowsarisingfrominvestingandfinancingactivitieswhicharerecoverablefrom,or

payableto,thetaxationauthorityareclassifiedasoperatingcashflows.

Note2.FinancialriskmanagementThecompany’sactivitiesexposeittoalimitedvarietyoffinancialrisks:marketrisk(includingcurrencyrisk,fair

valueinterestriskandpricerisk),creditrisk,liquidityriskandcashflowinterestraterisk.Thecompany’soverall

riskmanagementprogramfocusesontheunpredictabilityoffinancialmarketsandseekstominimisepotential

adverseeffectsonthefinancialperformanceoftheentity.Theentitydoesnotusederivativeinstruments.

Riskmanagementiscarriedoutdirectlybytheboardofdirectors.

(i) Marketrisk

ThecompanyhasnoexposuretoanytransactionsdenominatedinacurrencyotherthanAustraliandollars.



Note2.Financialriskmanagement(continued)

(ii) Pricerisk

Thecompanyisnotexposedtoequitysecuritiespriceriskasitdoesnotholdinvestmentsforsaleoratfair

value.Thecompanyisnotexposedtocommoditypricerisk.

(iii)Creditrisk

Thecompanyhasnosignificantconcentrationsofcreditrisk.Ithaspoliciesinplacetoensurethatcustomers

haveanappropriatecredithistory.Thecompany’sfranchiseagreementlimitsthecompany’screditexposureto

onefinancialinstitution,beingBendigoandAdelaideBankLimited.

(iv)Liquidityrisk

Prudentliquiditymanagementimpliesmaintainingsufficientcashandmarketablesecuritiesandtheavailability

offundingfromcreditfacilities.ThecompanybelievesthatitssoundrelationshipwithBendigoandAdelaide

BankLimitedmitigatesthisrisksignificantly.

(v) Cashflowandfairvalueinterestraterisk

Interest-bearingassetsareheldwithBendigoandAdelaideBankLimitedandsubjecttomovementsinmarket

interest.Interest-rateriskcouldalsoarisefromlong-termborrowings.Borrowingsissuedatvariablerates

exposethecompanytocashflowinterest-raterisk.Thecompanybelievesthatitssoundrelationshipwith

BendigoandAdelaideBankLimitedmitigatesthisrisksignificantly.

(vi) Capital management

Theboard’spolicyistomaintainastrongcapitalbasesoastosustainfuturedevelopmentofthecompany.

Theboardofdirectorsmonitorthereturnoncapitalandthelevelofdividendstoshareholders.Capitalis

represented by total equity as recorded in the balance sheet.

Inaccordancewiththefranchiseagreement,inany12monthperiod,thefundsdistributedtoshareholders

shallnotexceedthedistributionlimit:

Thedistributionlimitisthegreaterof:

(a)20%oftheprofitorfundsofthefranchiseeotherwiseavailablefordistributiontoshareholdersinthat12

monthperiod;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%.

Theboardismanagingthegrowthofthebusinessinlinewiththisrequirement.Therearenootherexternally

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

2014 can be seen in the statement of comprehensive income.

Therewerenochangesinthecompany’sapproachtocapitalmanagementduringtheyear.

Note3.CriticalaccountingestimatesandjudgementsEstimatesandjudgementsarecontinuallyevaluatedandarebasedonhistoricalexperienceandotherfactors,

includingexpectationsoffutureeventsthatmayhaveafinancialimpactontheentityandthatarebelievedtobe

reasonable under the circumstances.

Thecompanymakesestimatesandassumptionsconcerningthefuture.Theresultingaccountingestimateswill,by

definition, seldom equal the related actual results.



Note3.Criticalaccountingestimatesandjudgements(continued)

Managementhasidentifiedthefollowingcriticalaccountingpoliciesforwhichsignificantjudgements,estimates

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

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

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

financial statements.

Taxation

Judgementisrequiredinassessingwhetherdeferredtaxassetsandcertaintaxliabilitiesarerecognisedon

thebalancesheet.Deferredtaxassets,includingthosearisingfromun-recoupedtaxlosses,capitallossesand

temporarydifferences,arerecognisedonlywhereitisconsideredmorelikelythannotthattheywillberecovered,

whichisdependentonthegenerationofsufficientfuturetaxableprofits.

Assumptionsaboutthegenerationoffuturetaxableprofitsdependonmanagement’sestimatesoffuturecash

flows.Thesedependonestimatesoffuturesalesvolumes,operatingcosts,capitalexpenditure,dividendsand

othercapitalmanagementtransactions.Judgementsarealsorequiredabouttheapplicationofincometax

legislation.

Thesejudgementsandassumptionsaresubjecttoriskanduncertainty.Thereisthereforeapossibilitythat

changesincircumstanceswillalterexpectations,whichmayimpacttheamountofdeferredtaxassetsand

deferredtaxliabilitiesrecognisedonthebalancesheetandtheamountofothertaxlossesandtemporary

differencesnotyetrecognised.Insuchcircumstances,someorallofthecarryingamountofrecogniseddeferred

taxassetsandliabilitiesmayrequireadjustment,resultingincorrespondingcreditorchargetothestatementof

comprehensive income.

Estimationofusefullivesofassets

Theestimationoftheusefullivesofassetshasbeenbasedonhistoricalexperienceandtheconditionofthe

assetisassessedatleastonceperyearandconsideredagainsttheremainingusefullife.Adjustmentstouseful

lives are made when considered necessary.

Goodwill

Goodwillrepresentstheexcessofthecostofanacquisitionoverthefairvalueofthecompany’sshareofthenet

identifiableassetsoftheacquiredbranch/agencyatthedateofacquisition.Goodwillonacquisitionisincludedin

intangibleassets.Goodwillisnotamortised.Instead,goodwillistestedforimpairmentannually,ormorefrequently

if events or changes in circumstances indicate that it might be impaired and is carried at cost less accumulated

impairment losses.

Thecalculationsrequiretheuseofassumptions.

Impairmentofassets

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

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

loss.Ifanysuchindicationexists,therecoverableamountoftheassetisestimatedinordertodeterminethe

extentoftheimpairmentloss(ifany).Wheretheassetdoesnotgeneratecashflowsthatareindependentfrom

otherassets,theconsolidatedentityestimatestherecoverableamountofthecash-generatingunittowhichthe

asset belongs.

Recoverableamountisthehigheroffairvaluelesscoststosellandvalueinuse.Inassessingvalueinuse,the

estimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectscurrent

marketassessmentsofthetimevalueofmoneyandtherisksspecifictotheassetforwhichtheestimatesof

futurecashflowshavenotbeenadjusted.



Note3.Criticalaccountingestimatesandjudgements(continued)

Impairmentofassets(continued)

Iftherecoverableamountofanasset(orcash-generatingunit)isestimatedtobelessthanitscarryingamount,

thecarryingamountoftheasset(cash-generatingunit)isreducedtoitsrecoverableamount.Animpairmentloss

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

impairment loss is treated as a revaluation decrease.

Whereanimpairmentlosssubsequentlyreverses,thecarryingamountoftheasset(cash-generatingunit)is

increasedtotherevisedestimateofitsrecoverableamount,butonlytotheextentthattheincreasedcarrying

amountdoesnotexceedthecarryingamountthatwouldhavebeendeterminedhadnoimpairmentlossbeen

recognisedfortheasset(cash-generatingunit)inprioryears.Areversalofanimpairmentlossisrecognised

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

impairment loss is treated as a revaluation increase.

2014 2013 $ $

Note4.RevenuefromordinaryactivitiesOperatingactivities:

-servicescommissions 414,190 320,946

-otherrevenue 50,000 48,333

Total revenue from operating activities 464,190 369,279

Note5.ExpensesDepreciationofnon-currentassets:

-plantandequipment 2,325 2,325

-leaseholdimprovements 10,931 10,831

Amortisationofnon-currentassets:

-franchiseagreement 2,000 2,000

-franchiserenewalfee 20,000 20,000

35,256 35,156

Finance costs:

- interest paid 22,737 19,668

Bad debts 308 274



Note6.IncometaxexpenseThecomponentsoftaxexpensecomprise:

-Futureincometaxbenefitattributabletolosses (859) (68,963)

-Movementindeferredtax 2,508 (428)

-Taxlossesnotbroughttoaccount (1,649) 69,391

- -

Theprimafacietaxonlossfromordinaryactivitiesbeforeincome

taxisreconciledtotheincometaxexpenseasfollows:

Operatingloss (16,502) (224,295)

Primafacietaxonlossfromordinaryactivitiesat30% (4,951) (67,289)

Addtaxeffectof:

-non-deductibleexpenses 6,600 -

-timingdifferenceexpenses (2,508) 428

-otherdeductibleexpenses - (2,102)

(859) (68,963)

-Movementindeferredtax 11 2,508 (428)

-Taxlossesnotbroughttoaccount (1,649) 69,391

- -

Income tax losses

Future income tax benefits arising from tax losses are not

recognised at reporting date as realisation of the benefit is not

regarded as virtually certain. Future income tax benefit carried

forward is: (360,738) (359,880)

Note7.CashandcashequivalentsCash at bank and on hand 100 100

Note 7.(a) Reconciliation to cash flow statement

Theabovefiguresreconciletotheamountofcashshowninthe

statementofcashflowsattheendofthefinancialyearasfollows:

Cashatbankandonhand 100 100

Bankoverdraft 13 (464,868) (461,984)

(464,768) (461,884)

Note 2014 2013 $ $



Note8.TradeandotherreceivablesTradereceivables 30,497 22,224

Prepayments 3,679 3,874

34,176 26,098

Note9.Property,plantandequipmentPlant and equipment

Atcost 37,169 37,169

Lessaccumulateddepreciation (23,293) (20,968)

13,876 16,201

Leasehold improvements

Atcost 214,375 212,165

Lessaccumulateddepreciation (49,316) (38,385)

165,059 173,780

Total written down amount 178,935 189,981

Movements in carrying amounts:

Plant and equipment

Carrying amount at beginning 16,201 18,526

Additions - -

Disposals - -

Less:depreciationexpense (2,325) (2,325)

Carrying amount at end 13,876 16,201

Leasehold improvements

Carryingamountatbeginning 173,780 184,611

Additions 2,210 -

Disposals - -

Less:depreciationexpense (10,931) (10,831)

Carrying amount at end 165,059 173,780


2014 2013 $ $



Note10.IntangibleassetsFranchise fee

At cost 10,000 10,000

Less:accumulatedamortisation (9,167) (7,167)

833 2,833

Establishment fee

At cost 100,000 100,000

Less:accumulatedamortisation (91,667) (71,667)

8,333 28,333

Redomicile Accounts 7,152 7,152


Note11.TaxNon-Current:

Deferredtaxassets

-accruals 97 158

-employeeprovisions 2,637 5,143

-taxlossescarriedforward 360,738 359,880

363,472 365,181

Deferred tax liability

-deductibleprepayments 1,104 1,162

1,104 1,162

Taxlossesnotbroughttoaccount 364,576 366,343

Net deferred tax asset/(liability) - -

Movement in deferred tax charged to statement of comprehensive income - -

Note12.TradeandotherpayablesTradecreditors - 4,785

Othercreditorsandaccruals 7,951 6,163

7,951 10,948

2014 2013 $ $



Note13.BorrowingsCurrent:

Bank overdrafts 464,868 461,984

Thecompanyhasanapprovedoverdraftfacilityof$575,000.Theoverdraftwasinterestfreeforthefirst6months

afterinitialdrawdown.TheinterestfreeperiodofsixmonthsexpiredduringFebruary2012.Interestischargedat

thecommercialinterestrateasperagreementwithfranchisor(currently4.95%).Theoverdraftissecuredbyafixed

andfloatingchargeoverthecompany’sassets.

2014 2013 $ $

Note14.ProvisionsCurrent:

Provision for annual leave 7,005 12,032

Non-Current:

Provision for long service leave 1,785 5,111

Note 15. Contributed equity996,511Ordinarysharesfullypaid(2013:996,511) 996,511 996,511

Less:equityraisingexpenses (35,026) (35,026)

961,485 961,485

Rightsattachedtoshares

(a)Votingrights

Subjecttosomelimitedexceptions,eachmemberhastherighttovoteatageneralmeeting.

Onashowofhandsorapoll,eachmemberattendingthemeeting(whethertheyareattendingthemeeting

inpersonorbyattorney,corporaterepresentativeorproxy)hasonevote,regardlessofthenumberofshares

held. However, where a person attends a meeting in person and is entitled to vote in more than one capacity

(forexample,thepersonisamemberandhasalsobeenappointedasproxyforanothermember)thatperson

mayonlyexerciseonevoteonashowofhands.Onapoll,thatpersonmayexerciseonevoteasamemberand

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

proxy.

Thepurposeofgivingeachmemberonlyonevote,regardlessofthenumberofsharesheld,istoreflectthe

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

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

abilitytoinfluencetheoperationofthecompany.

2014 2013 $ $



Note 15. Contributed equity (continued)

Rightsattachedtoshares

(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

thatmaybedistributedtoshareholders.Thereisalsoarestrictiononthepaymentofdividendstocertain

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.

Subjecttotheforegoing,shareholdersmaytransfersharesbyapropertransfereffectedinaccordancewiththe

company’sconstitutionandtheCorporationsAct2001.

Prohibitedshareholdinginterest

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

Insummary,apersonhasaprohibitedshareholdinginterestifanyofthefollowingapplies:

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

• Intheopinionoftheboardtheydonothaveacloseconnectiontothecommunityorcommunitiesinwhichthe

companypredominantlycarriesonbusiness(the“closeconnectiontest”).

• Wherethepersonisashareholder,afterthetransferofsharesinthecompanytothatpersonthenumberof

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

number is 218. As at the date of this report, the company had 244 shareholders.

Aswithvotingrights,thepurposeofthisprohibitedshareholdingprovisionistoreflectthecommunity-basednature

of the company.

Whereapersonhasaprohibitedshareholdinginterest,thevotinganddividendrightsattachingtothesharesin

which the person (and his or her associates) have a prohibited shareholding interest, are suspended.

Theboardhasthepowertorequestinformationfromapersonwhohas(orissuspectedbytheboardofhaving)

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

determiningwhetherapersonhasaprohibitedshareholdinginterest.Iftheboardbecomesawarethatamember

hasaprohibitedshareholdinginterest,itmustserveanoticerequiringthemember(orthemember’sassociate)to

disposeofthenumberofsharestheboardconsidersnecessarytoremedythebreach.Ifapersonfailstocomply

withsuchanoticewithinaspecifiedperiod(thatmustbebetweenthreeandsixmonths),theboardisauthorised

tosellthespecifiedsharesonbehalfofthatperson.Theholderwillbeentitledtotheconsiderationfromthesale

oftheshares,lessanyexpensesincurredbytheboardinsellingorotherwisedealingwiththoseshares.

Intheconstitution,membersacknowledgeandrecognisethattheexerciseofthepowersgiventotheboardmay

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

prohibition.



Note 16. Accumulated lossesBalanceatthebeginningofthefinancialyear (1,197,063) (972,768)

Netlossfromordinaryactivitiesafterincometax (16,502) (224,295)

Balance at the end of the financial year (1,213,565) (1,197,063)

Note17.StatementofcashflowsReconciliationoflossfromordinaryactivitiesaftertaxtonetcashusedin

operating activities

Lossfromordinaryactivitiesafterincometax (16,502) (224,295)

Non cash items:

-depreciation 13,256 13,156

-amortisation 22,000 22,000

Changes in assets and liabilities:

-increaseinreceivables (8,078) (16,485)

-increase/(decrease)inpayables (2,997) 474

-increase/(decrease)inprovisions (8,353) 4,347

Net cash flows used in operating activities (674) (200,803)

Note18.LeasesOperating lease commitments

Non-cancellableoperatingleasescontractedforbutnotcapitalisedinthe

financial statements

Payable-minimumleasepayments:

-notlaterthan12months 59,800 119,600

-between12monthsand5years - 59,800

-greaterthan5years - -

59,800 179,400

Thepropertyleaseisanon-cancellableleasewithafive-yearterm,withrentpayablemonthlyinadvance.Thelease

hasextensionprovisionsfor1furtherfiveyearoptionsavailable.TheleaseisdueforrenewalinDecember2014.

2014 2013 $ $



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

-auditandreviewservices 3,600 3,600

-shareregistryservices 1,500 1,500

-nonauditservices 2,028 2,226

7,128 7,326

Note20.Earningspershare

2014 $

2013 $

(a) Lossattributabletotheordinaryequityholdersofthecompanyused

in calculating earnings per share(16,502) (224,295)

Number Number

(b) Weightedaveragenumberofordinarysharesusedasthedenominator

in calculating basic earnings per share996,511 996,511

Note21.EventsoccurringafterthereportingdateTherehavebeennoeventsaftertheendofthefinancialyearthatwouldmateriallyaffectthefinancialstatements.

Note 22. Contingent liabilities and contingent assetsTherewerenocontingentliabilitiesorcontingentassetsatthedateofthisreporttoaffectthefinancial

statements.

Note 23. Segment reportingTheeconomicentityoperatesintheservicesectorwhereitfacilitatesCommunity Bank® servicesinPyrmont,New

SouthWalespursuanttoafranchiseagreementwithBendigoandAdelaideBankLimited.

Note24.Registeredoffice/PrincipalplaceofbusinessTheentityisacompanylimitedbyshares,incorporatedanddomiciledinAustralia.Theregisteredofficeand

principal place of business is:

Registered Office Principal Place of Business

148 Harris Street

PyrmontNSW2009

148 Harris Street

PyrmontNSW2009

2014 2013 $ $



Note 25. Financial instrumentsFinancialInstrumentCompositionandMaturityAnalysis

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

2014$

2013$

2014$

2013$

2014$

2013$

2014$

2013$

2014$

2013$

2014%

2013%

Financial assets

Cash and cash equivalents

- - - - - - - - 100 100 0.00 0.00

Receivables - - - - - - - - - - N/A N/A

Financial liabilities

Interest bearing liabilities

464,868 461,984 - - - - - - - - 4.78 5.16

Payables - - - - - - - - - 4,855 N/A N/A

NetFairValues

Thenetfairvaluesoffinancialassetsandliabilitiesapproximatethecarryingvaluesasdisclosedinthebalance

sheet.Thecompanydoesnothaveanyunrecognisedfinancialinstrumentsattheyearend.

CreditRisk

Themaximumexposuretocreditriskatbalancedatetorecognisedfinancialassetsisthecarryingamountof

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

Therearenomaterialcreditriskexposurestoanysingledebtororgroupofdebtorsunderfinancialinstruments

entered into by the economic entity.

InterestRateRisk

Interestrateriskreferstotheriskthatthevalueofafinancialinstrumentorcashflowsassociatedwiththe

instrumentwillfluctuateduetochangesinmarketinterestrates.Interestrateriskarisesfromtheinterestbearing

financialassetsandliabilitiesinplacesubjecttovariableinterestrates,asoutlinedabove.

Sensitivity Analysis

Thecompanyhasperformedsensitivityanalysisrelatingtoitsexposuretointerestrateriskatbalancedate.

Thissensitivityanalysisdemonstratestheeffectonthecurrentyearresultsandequitywhichcouldresultfroma

change in interest rates.



Note 25. Financial instruments (continued)

Sensitivity Analysis (continued)

As at 30 June 2014, the effect on profit and equity as a result of changes in interest rate, with all other variables

remaining constant would be as follows:

2014 $

2013 $

Changeinprofit/(loss)

Increaseininterestrateby1% 4,649 4,620

Decreaseininterestrateby1% 4,649 4,620

Change in equity

Increaseininterestrateby1% 4,649 4,620

Decreaseininterestrateby1% 4,649 4,620


Directors’declarationInaccordancewitharesolutionofthedirectorsofCityWestCommunityFinancialServicesLimitedwestatethat:

Intheopinionofthedirectors:

(a) the financial statements and notes of the company are in accordance with the Corporations Act 2001,

including:

(i) givingatrueandfairviewofthecompany’sfinancialpositionasat30June2014andofitsperformance

forthefinancialyearendedonthatdate;and

(ii) complyingwithAccountingStandards,theCorporationsRegulations2001andothermandatoryprofessional

reportingrequirements;and

(b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they

become due and payable.

(c) theauditedremunerationdisclosuressetoutintheremunerationreportsectionofthedirectors’reportcomply

withAccountingStandardAASB124RelatedPartyDisclosuresandtheCorporationsRegulations2001.

Thisdeclarationismadeinaccordancewitharesolutionoftheboardofdirectors.

Robert Joseph Gavagna,

Chairman

Signed on the 22nd of August 2014.


Independentauditreport


Independentauditreport(continued)

bendigobank.com.au

bendigobank.com.au

Pyrmont Community Bank® Branch 148 Harris Street, Pyrmont NSW 2009Phone: (02) 9518 9866 Fax: (02) 9518 9844

Franchisee: City West Community Financial Services Limited148 Harris Street, Pyrmont NSW 2009Phone: (02) 9518 9866 Fax (02) 9518 9844www.cwcfs.com.auABN: 34 134 051 219

www.bendigobank.com.au/pyrmont (BMPAR14080) (09/14)

annual report 2014 - bendigo bank...occupation: company director qualifications, experience and...

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