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Nightcliff Community Bank®Branch
Annual Report2015
ABN 64 128 953 748
Nightcliff CommunityEnterprises Limited
Annual report Nightcliff Community Enterprises Limited 1
Contents
Chairman’s report 2
Manager’s report 3
Bendigo and Adelaide Bank report 4
Directors’ report 6
Auditor’s independence declaration 11
Financial statements 12
Notes to the financial statements 16
Directors’ declaration 38
Independent audit report 39
Annual report Nightcliff Community Enterprises Limited2
For year ending 30 June 2015
The past year has been one of “steady as she goes” consolidation for the Nightcliff Community Bank® Branch.
In a changing Darwin economy, the emphasis has been on connecting with the local community and strengthening
community awareness of the benefits the branch is able to bring to our community.
In this age of digital transactions it has become increasingly important for people to feel they have real access to
sound financial advice and services. Accordingly the Directors, Manager and staff in the branch have continued to
maintain a visible presence in the community.
For example the Jetty Art Space during the Seabreeze Festival provides a good opportunity for interaction with
many members of the public who may not ever consider venturing near the branch itself.
Of course the branch has continued to provide financial support to community events and groups including;
• NTRugbyUnion • DarwinTrailerBoatClub
• Alzheimer’sAustraliaNT • TactileArts
• DarwinMensShed • NTHockeyAssociation
• NightcliffCricketClub • MasterAFLFootball
• NTGirlGuides • SeabreezeFestival
• DarwinRoyalShow • AustralianVolunteerCoastguard
• HungerWalk • JingiliBMXClub
• BearCottage • MalakMarketplace
• LakesideCommunityGarden.
Wehavealsobeguntotakeamoreactivesalesapproachbyspendingtimeatinformationsessionsinlocal
shopping centres. A portable information booth is being developed which will enable a more direct contact with
people in other shopping centres through the northern suburbs.
This year the Community Bank® company will pay a dividend to provide some financial benefit to the many
shareholders who have supported this local community enterprise since its inception.
TheBoard,andI’msureIcanspeakfortheshareholdersaswell,wouldliketothankJeff,Victoria,Lynand
Laurafortheveryrealdedicationtheyshowinoperatingthebranch,notjustasabusinessbutasasignificant
contribution to the well being of the community.
ThebranchcontinuestohavearespectfulworkingpartnershipwiththeBendigoBankandinparticularwewould
liketothankMrJohnGrotenhuis(NTRegionalManager)andMrMikeClutterham(StateCommunityStrengthening
Manager)fortheircontinuousandconsiderablesupport.
James McDougall
Chairman
Chairman’sreport
Annual report Nightcliff Community Enterprises Limited 3
For year ending 30 June 2015
It is my pleasure to once again reflect on the past 12 months of our business achievements.
The past 12 months has seen our business growth maintained in very competitive home, commercial and deposit
takingmarket.NetBusinessgrowthon-bookwas$6.6millionwithourCommunitySectorBankingbookgrowingby
$3.6million,anoverallgrowthofover$9million.
In reporting business growth we remind ourselves that our core focus has and always will be the local community
with our branch once again supporting many activities with sponsorship support or direct staff involvement.
Inthe2014/15reportingperiodtheBusinessallocationofsponsorshipwas$21,981withover18groups
receiving support from the Nightcliff Community Bank® Branch.
Tomentionsomeofthehighlightsfortheyear:-
• InvolvementwiththeDarwinTrailerBoatClubBluewaterClassic,theonlyfishingcompetitioninAustraliathat
hasaprograminthatallfishcaughtaredonatedtoFoodbankNTtosupportthoseinneed.
• OurinvolvementwithTreyCrowleywhothisyearbecametheAustralianBoxingChampionforhisdivision.
• NorthernTerritoryRugbyUnionisanothergreatpartnershipforus,ourassistancenowinvolvesabrandnew
ScoreboardontheirjuniorgroundstohelpdeveloptheirsportintheTerritory.
• StVinniesCEOSleepOut,anexperienceallmembersoftheCommunityshouldexperienceandanopportunity
to help those in need through our Services here in the future.
Ourforecastforthenext12monthsisprojectedgrowthwithinacompetitivemarket.Webelieveourcommunity
supplies opportunities for our business to grow. As our community and people grow within the area, we believe our
businessstrengthsandvalueswillbeattheforefrontoftheirbankingchoices.
Lastofall,mystaffandIwouldagainpersonallythankyouourshareholdersandcustomersforyoursupporttoour
business for the last 12 months.
Jeff Watson
Branch Manager
Manager’sreport
Annual report Nightcliff Community Enterprises Limited4
For year ending 30 June 2015
In the 2015 financial year, the Community Bank®networkopenedits310thbranchandcommunitycontributions
sincethemodel’sinceptionexceed$130million.Bothoftheseachievementscouldnothavebeenachieved
withoutyourongoingsupportasashareholder,customerandadvocateofwhatisatrulyuniquewayofbankingfor
the benefit of your local community.
LocalcommunitiescontinuetoembracetheCommunity Bank®model,abankingmovementfoundedonthesimple
beliefthatsuccessfulcustomersandsuccessfulcommunitiescreateasuccessfulbank.
Seventeen years later communities are still approaching us and the model is as robust and relevant as ever,
however a review of what we were doing, why and how we could do it better was timely.
Duringan18monthperiodtheBank,inpartnershipwiththeCommunity Bank®network,undertooka
comprehensive review of the Community Bank®model.ProjectHorizonwasthelargestsingleengagementprocess
everundertakenbyourorganisation.
Asaresult,afocusforthenext18monthswillbetheimplementationof64recommendations.Whatwas
overwhelmingly obvious is that our Community Bank®network,andourBank,caredeeplyaboutwhathasbeen
developedandinwhatthefutureholdsforthenetwork.
In the early days of Community Bank® development, the Community Bank® model was seen as a way to restore
branchbankingservicestoruraltowns,regionalcitiesandmetropolitansuburbsafterthelastofthebanksclosed
their doors.
Today,althoughthefocusisstillaboutprovidingbankingservices,thereisperhapsanevengreaterinterestin
the way in which the model creates a successful community enterprise used to effectively, and sustainably, build
community capacity.
In October 2014, we welcomed Community Bank® branches in Bacchus Marsh, Kilmore, Maffra, Kwinana and
Nubeena.Allofthesebranchesjoinastrongandmaturebankingnetworkwherevaluedpartnershipsenhance
bankingservices,takingtheprofitstheirbankingbusinessgeneratesandreinvestingthatfundingintoinitiativesto
ultimately strengthen their community.
Followingconsultationwithlocalresidentsandbusinessownersrespondingtootherbanksreducingtheirbranch
presence, Aldinga Beach Community Bank®BranchopenedtheWillungaCustomerServiceCentreinApril2015,
providingafullbankingservicetolocalpeoplefivedaysaweek.
The Community Bank® model is a great example of shared value and was centre stage at an international Shared
ValueconferenceintheUnitedStatesearlierthisyear.
Funding generated by Community Bank®branchessupportprojectsthatmakeadifferencetoacommunity.Butno
matter how big or small the place people call home, the Community Bank®networkrecognisesthatwhentheyact
as one, powered by the good that money can bring, bigger things can happen for local towns, regions and states.
InWA,a$125,000commitmenttoRonaldMcDonaldHousebyCollie&DistrictsCommunity Bank® Branch
resultedinafurther$125,000from21branches(bothcommunityandcompanyowned)inthestate.
InQLD,LongreachfarmingfamiliesarenowfeedingtheirstockthankstoadedicatedRotaryClubandfinancial
contributionsfrom16Community Bank®(andcompany)branches.
AcrossregionalandruralNSW,youngpeoplearetodaybetterdriversthankstoadrivereducationprogram
supported by Community Bank®branchesandacrossAustralia,58youngpeopleheadedofftotheirfirstyearof
university with the help of a Community Bank® scholarship.
BendigoandAdelaideBankreport
Annual report Nightcliff Community Enterprises Limited 5
Interest in the Community Bank® model remains strong, with 20 Community Bank® sites currently in development
and a further six Community Bank® branches expected to open nationally during the next 12 months.
Thenetwork’ssteadyexpansiondemonstratesthestrengthandrelevanceofabankingmodelwherethedesireto
support the financial needs of customers is equalled by the desire to support the community with the good that
money can bring.
By the end of the financial year 2014/15 the Community Bank®networkachievedthefollowing:
• Returnstocommunity–over$130millionsincethemodel’sinception
• Community Bank®branches–310
• Community Bank®branchstaff–morethan1,500
• Community Bank®companyDirectors–1,946
• Bankingbusiness–$28.79billion
• Customers–699,000
• Shareholders–74,393
• Dividendspaidtoshareholderssinceinception–$38.6million
ThecommunitieswepartnerwithalsohaveaccesstotheBank’sextensiverangeofothercommunitybuilding
solutionsincludingCommunityEnterpriseFoundation™(philanthropicarm),CommunitySectorBanking(banking
servicefornot-for-profitorganisations),GenerationGreen™(environmentandsustainabilityinitiative),Community
Telco®Australia(telecommunicationssolution),tertiaryeducationscholarshipsandcommunityenterprisesthat
provide Community Bank® companies with further development options.
InBendigoandAdelaideBank,yourCommunity Bank® company has a committed and strong partner and over the
lastfinancialyearourcompanyhascontinueditssolidperformance.OurBankcontinuestoberatedatleast“A -”
byStandard&Poor’s,Moody’sandFitchinrecognitionofitsstrongperformanceinthefaceofwhatcontinuesto
be a challenging economic environment.
Our Community Bank®partnersplayedanintegralroleintheBank’sinvolvementintheFinancialSystemsInquiry,
lobbyingtheirlocalFederalGovernmentrepresentativesandcallingforalevelplayingfield.
RecentAPRAannouncementsregardingchangestoriskweightsonmortgageswillpositivelyimpactourBank–
providing customers with a level playing field by giving them more choice from a wider variety of financial providers.
Thankstotheeffortsofourpeople,ourpeersandCommunity Bank®partners,we’restartingtoseethebenefits.
Incontinuingtotakeacollaborativeapproach,weactasonenetworkdrivingpositiveoutcomesforallAustralians.
As Community Bank®companyshareholdersyouarepartofauniquebankingmovement.
Themodeloffersanalternativewaytothinkaboutbankingandtherolebanksplayinmodernsociety,and
because of your support there really is no limit to what can be achieved for local people and the communities in
which you live.
ThankyouforyourongoingsupportofyourlocalCommunity Bank® branch.
Robert Musgrove
Executive Community Engagement
BendigoandAdelaideBankreport(continued)
Annual report Nightcliff Community Enterprises Limited6
Directors’reportFor the financial year ended 30 June 2015
Your directors submit the financial statements of the company for the financial year ended 30 June 2015.
Directors
Thenamesanddetailsofthecompany’sdirectorswhoheldofficeduringorsincetheendofthefinancialyear:
James Keith McDougall
Chairman
Occupation: Internet Technician
Qualifications, experience and expertise: Darwin Community Arts Chairman.
Specialresponsibilities:Chairman,Secretary,MarketingCommittee,FinanceandAuditCommittee
Interest in shares: 1
Lorraine Dawn Koch
Director
Occupation:Retired
Qualifications,experienceandexpertise:VolunteerforAgedcare.Sportingadministrator.Schoolcouncil.
Specialresponsibilities:MarketingCommittee,GovernanceCommittee,HRCommittee
Interest in shares: 1,001
Tracey Leanne Myles
Director(Resigned6August2014/Appointed24November2014)
Occupation:MentalHealthConsultant
Qualifications, experience and expertise: Currently employed as a Consumer Consultant for the Northern
TerritoryMentalHealthServices.TreasurerfortheDownSyndromeAssociationNTandSIDSandKidsNT.
Websiteandsocialmediamanager.NTrepresentativeforChildrenwithDisabilityAustralia.
Specialresponsibilities:Treasurer,MarketingCommittee,FinanceandAuditCommittee
Interest in shares: 251
Robyn Gay Simon
Director(Resigned24November2014)
Occupation: Business Proprietor/Accountant
Qualifications, experience and expertise: Certified Practising Accountant.
Special responsibilities: Treasurer
Interest in shares: Nil
Murray Reginald Fuller
Chairman(Resigned24November2014)
Occupation:SelfEmployed
Qualifications, experience and expertise: Bachelor of Business Management. Past chairman Nightcliff Primary
School Council.
Special responsibilities: Chairman
Interest in shares: 10,000
Annual report Nightcliff Community Enterprises Limited 7
Directors’report(continued)
Directors (continued)
Brenton Paul Pedler
Treasurer(Resigned14July2014)
Occupation:EducationAdvisor
Qualifications,experienceandexpertise:Teacherofalternativeeducation.‘LifeBeinit’NTBoardmember,
Churchill Fellowship Association NT executive.
Specialresponsibilities:Treasurer,FinanceCommittee,Governance&HRcommittee
Interest in shares: 1,001
Directors were in office for this entire year unless otherwise stated.
No directors have material interests in contracts or proposed contracts with the company.
Company Secretary
ThecompanysecretaryisJamesKeithMcDougall.JamestookoverthepositionofsecretaryfromTraceyLeanne
Myles on 14 July 2014.
Chairman of Darwin Community Arts.
Principal Activities
The principal activities of the company during the financial year were facilitating Community Bank® services under
managementrightstooperateafranchisedbranchofBendigoandAdelaideBankLimited.
There have been no significant changes in the nature of these activities during the year.
Operating results
Operations have continued to perform in line with expectations. The profit of the company for the financial year
after provision for income tax was:
Year ended 30 June 2015$
Year ended 30 June 2014$
18,874 11,121
Remuneration report
(a)Remunerationofdirectors
All directors of the company are on a voluntary basis, therefore no remuneration guidelines have been prepared.
(b)RemunerationofAreaandBranchManagers
Theboardisresponsibleforthedeterminationofremunerationpackagesandpoliciesapplicabletothe
branch manager and all the staff. The branch manager is invited to the board meetings as required to discuss
performanceandremunerationpackages.
Theboard’spolicyinrespectofthebranchmanageristomaintainremunerationatparitywithintheCommunity
Bank®networkandlocalmarketratesforcomparableroles.
There are no executives who are directly accountable and responsible for the strategic direction and
operational management of the entity. This is wholly a board role. There are therefore no specified executives.
Annual report Nightcliff Community Enterprises Limited8
Directors’report(continued)
Remuneration report (continued)
Directors’shareholdings
Balance at start of the year
Changes during the
year
Balance at end of the year
James Keith McDougall 1 - 1
LorraineDawnKoch 1,001 - 1,001
TraceyLeanneMyles(Resigned6August2014/
Appointed24November2014)
251 - 251
RobynGaySimon(Resigned24November2014) - - -
MurrayReginaldFuller(Resigned24November2014) 10,000 - 10,000
BrentonPaulPedler(Resigned14July2014) 1,001 - 1,001
Dividends
No dividends were declared or paid for the previous year.
Significant changes in the state of affairs
In the opinion of the directors there were no significant changes in the state of affairs of the company that
occurred during the financial year under review not otherwise disclosed in this report or the financial statements.
Events since the end of the financial year
There are no matters or circumstances that have arisen since the end of the financial year that have significantly
affected or may significantly affect the operations of the company the results of those operations or the state of
affairs of the company, in future years.
Likely developments
Thecompanywillcontinueitspolicyoffacilitatingbankingservicestothecommunity.
Environmental regulation
Thecompanyisnotsubjecttoanysignificantenvironmentalregulation.
Directors’ benefits
No director has received or become entitled to receive, during or since the financial year, a benefit because of a
contract made by the company, controlled entity or related body corporate with a director, a firm which a director is
a member or an entity in which a director has a substantial financial interest except as disclosed in note 20 to the
financial statements. This statement excludes a benefit included in the aggregate amount of emoluments received
ordueandreceivablebydirectorsshowninthecompany’saccounts,orthefixedsalaryofafull-timeemployeeof
the company, controlled entity or related body corporate.
Annual report Nightcliff Community Enterprises Limited 9
Directors’report(continued)
Indemnification and insurance of directors and officers
Thecompanyhasindemnifiedalldirectorsandthemanagerinrespectofliabilitiestootherpersons(otherthan
thecompanyorrelatedbodycorporate)thatmayarisefromtheirpositionasdirectorsormanagerofthecompany
exceptwheretheliabilityarisesoutofconductinvolvingthelackofgoodfaith.
Disclosure of the nature of the liability and the amount of the premium is prohibited by the confidentiality clause of
the contract of insurance. The company has not provided any insurance for an auditor of the company or a related
body corporate.
Directors’ meetings
Thenumberofdirectors’meetingsattendedbyeachofthedirectorsofthecompanyduringtheyearwere:
Board Meetings Attended
Eligible Attended
James Keith McDougall 10 9
LorraineDawnKoch 10 10
TraceyLeanneMyles
(Resigned6August2014/Appointed24November2014)6 6
RobynGaySimon(Resigned24November2014) 4 -
MurrayReginaldFuller(Resigned24November2014) 4 4
BrentonPaulPedler(Resigned14July2014) - -
Proceedings on behalf of the company
NopersonhasappliedtotheCourtundersection237oftheCorporationsAct2001forleavetobringproceedings
on behalf of the company, or to intervene in any proceedings to which the company is a party, for the purpose of
takingresponsibilityonbehalfofthecompanyforallorpartofthoseproceedings.
No proceedings have been brought or intervened in on behalf of the company with leave of the Court under section
237oftheCorporationsAct2001.
Non audit services
The company may decide to employ the auditor on assignments additional to their statutory duties where the
auditor’sexpertiseandexperiencewiththecompanyareimportant.Detailsoftheamountspaidorpayabletothe
auditor(AndrewFrewinStewart)forauditandnonauditservicesprovidedduringtheyeararesetoutinthenotes
to the accounts.
Theboardofdirectorshasconsideredthepositionandissatisfiedthattheprovisionofthenon-auditservicesis
compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
Thedirectorsaresatisfiedthattheprovisionofnon-auditservicesbytheauditor,assetoutinthenotesdidnot
compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:
• allnon-auditserviceshavebeenreviewedtoensuretheydonotimpactontheimpartialityandobjectivityofthe
auditor
Annual report Nightcliff Community Enterprises Limited10
Directors’report(continued)
Non audit services
• noneoftheservicesunderminethegeneralprinciplesrelatingtoauditorindependenceassetoutinAPES110
CodeofEthicsforProfessionalAccountants,includingreviewingorauditingtheauditor’sownwork,actingin
amanagementoradecision-makingcapacityforthecompany,actingasadvocateforthecompanyorjointly
sharingeconomicriskandrewards.
Auditor’s independence declaration
Acopyoftheauditor’sindependencedeclarationasrequiredundersection307CoftheCorporationsAct2001is
set out on page 11.
Signed in accordance with a resolution of the board of directors at Nightcliff, Northern Territory on 10 October
2015.
James Keith McDougall,
Chairman
Annual report Nightcliff Community Enterprises Limited 11
Auditor’sindependencedeclaration
Annual report Nightcliff Community Enterprises Limited12
Financial statementsStatementofProfitorLossandOtherComprehensiveIncome for the year ended 30 June 2015
Notes 2015 2014 $ $
Revenuefromordinaryactivities 4 683,845 617,863
Employeebenefitsexpense (358,683) (295,991)
Charitabledonations,sponsorship,advertisingandpromotion (29,060) (48,289)
Occupancyandassociatedcosts (99,920) (86,914)
Systemscosts (20,792) (20,241)
Depreciationandamortisationexpense 5 (32,980) (37,438)
Financecosts 5 (4,504) (5,924)
Generaladministrationexpenses (96,783) (105,607)
Profit before income tax expense 41,123 17,459
Incometaxexpense 6 (22,249) (6,338)
Profit after income tax expense 18,874 11,121
Total comprehensive income for the year 18,874 11,121
Earnings per share for profit attributable to the ordinary
shareholders of the company: ¢ ¢
Basic earnings per share 22 2.10 1.24
The accompanying notes form part of these financial statements.
Annual report Nightcliff Community Enterprises Limited 13
Financial statements (continued)
Balance Sheet as at 30 June 2015
Notes 2015 2014 $ $
ASSETS
Current Assets
Cashandcashequivalents 7 1,136 20,153
Tradeandotherreceivables 8 70,980 56,683
Total Current Assets 72,116 76,836
Non-Current Assets
Property,plantandequipment 9 120,767 139,565
Intangibleassets 10 43,518 57,261
Deferredtaxasset 11 185,580 207,829
Total Non-Current Assets 349,865 404,655
Total Assets 421,981 481,491
LIABILITIES
Current Liabilities
Tradeandotherpayables 12 54,372 71,806
Borrowings 13 60,814 102,255
Provisions 14 13,380 10,253
Total Current Liabilities 128,566 184,314
Non-Current Liabilities
Tradeandotherpayables 12 - 20,995
Borrowings 13 - 6,057
Provisions 14 12,977 8,561
Total Non-Current Liabilities 12,977 35,613
Total Liabilities 141,543 219,927
Net Assets 280,438 261,564
Equity
Issuedcapital 15 864,374 864,374
Accumulatedlosses 16 (583,936) (602,810)
Total Equity 280,438 261,564
The accompanying notes form part of these financial statements.
Annual report Nightcliff Community Enterprises Limited14
Financial statements (continued)
StatementofChangesinEquity for the year ended 30 June 2015
Issued Accumulated Total capital losses equity $ $ $
Balance at 1 July 2013 864,374 (569,002) 295,372
Total comprehensive income for the year - 11,121 11,121
Transactions with owners in their capacity as owners:
Sharesissuedduringperiod - - -
Costsofissuingshares - - -
Dividendsprovidedfororpaid - (44,929) (44,929)
Balance at 30 June 2014 864,374 (602,810) 261,564
Balance at 1 July 2014 864,374 (602,810) 261,564
Total comprehensive income for the year - 18,874 18,874
Transactions with owners in their capacity as owners:
Sharesissuedduringperiod - - -
Costsofissuingshares - - -
Dividendsprovidedfororpaid - - -
Balance at 30 June 2015 864,374 (583,936) 280,438
The accompanying notes form part of these financial statements.
Annual report Nightcliff Community Enterprises Limited 15
Financial statements (continued)
Statement of Cash Flows for the year ended 30 June 2015
Notes 2015 2014 $ $
Cash flows from operating activities
Receiptsfromcustomers 758,987 680,694
Paymentstosuppliersandemployees (725,652) (619,090)
Interestreceived 90 41
Interestpaid (4,504) (5,924)
Net cash provided by operating activities 17 28,921 55,721
Cash flows from investing activities
Paymentsforproperty,plantandequipment (439) (363)
Net cash provided by/(used in) investing activities (439) (363)
Cash flows from financing activities
Repaymentofborrowings (8,497) (7,836)
Dividendspaid - (44,929)
Net cash provided by/(used in) financing activities (8,497) (52,765)
Net increase in cash held 19,985 2,593
Cashandcashequivalentsatthebeginningofthefinancialyear (73,606) (76,199)
Cash and cash equivalents at the end of the financial year 7(a) (53,621) (73,606)
The accompanying notes form part of these financial statements.
Annual report Nightcliff Community Enterprises Limited16
Notes to the financial statementsFor year ended 30 June 2015
Note 1. Summary of significant accounting policies
a) Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standard Boards and the Corporations Act
2001.Thecompanyisafor-profitentityforthepurposeofpreparingthefinancialstatements.
CompliancewithIFRS
ThesefinancialstatementsandnotescomplywithInternationalFinancialReportingStandards(IFRS)asissuedby
theInternationalAccountingStandardsBoard(IASB).
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also
requiresmanagementtoexerciseitsjudgementintheprocessofapplyingthecompany’saccountingpolicies.
Theseareasinvolvingahigherdegreeofjudgementorcomplexities,orareaswhereassumptionsandestimates
are significant to the financial statements are disclosed in note 3.
Historicalcostconvention
The financial statements have been prepared under the historical cost convention on an accruals basis as
modified by the revaluation of financial assets and liabilities at fair value through profit or loss and where stated,
currentvaluationsofnon-currentassets.Costisbasedonthefairvaluesoftheconsiderationgiveninexchange
for assets.
Comparative figures
WhererequiredbyAustralianAccountingStandardscomparativefigureshavebeenadjustedtoconformwith
changes in presentation for the current financial year.
Application of new and amended accounting standards
The following amendments to accounting standards and a new interpretation issued by the Australian Accounting
StandardsBoard(AASB)becamemandatorilyeffectiveforaccountingperiodsbeginningonorafter1July2014,
and are therefore relevant for the current financial year.
• AASB2012-3AmendmentstoAustralianAccountingStandards(AASB132)–OffsettingFinancialAssetsand
FinancialLiabilities.
• AASB2013-3AmendmentstoAASB136–RecoverableAmountDisclosuresforNon-FinancialAssets.
• AASB2013-4AmendmentstoAustralianAccountingStandards(AASB139)–NovationofDerivativesand
ContinuationofHedgeAccounting.
• AASB2013-5AmendmentstoAustralianAccountingStandards(AASB10)–InvestmentEntities.
• AASB2014-1AmendmentstoAustralianAccountingStandards(PartA:AnnualImprovements2010-2012and
2011-2013Cycles).
• AASB2014-1AmendmentstoAustralianAccountingStandards(PartB:DefinedBenefitPlans:Employee
ContributionsAmendmentstoAASB119).
Annual report Nightcliff Community Enterprises Limited 17
Notes to the financial statements (continued)
Note1.Summaryofsignificantaccountingpolicies(continued)
a) Basis of preparation (continued)
Applicationofnewandamendedaccountingstandards(continued)
• Interpretation21Levies.
• AASB1031Materiality,AASB2013-9AmendmentstoAustralianAccountingStandards–Conceptual
Framework,MaterialityandFinancialInstruments(PartB:Materiality),AASB2014-1AmendmentstoAustralian
AccountingStandards(PartC:Materiality).
None of the amendments to accounting standards or the new interpretation issued by the Australian Accounting
StandardsBoard(AASB)thatbecamemandatorilyeffectiveforaccountingperiodsbeginningonorafter1July
2014,materiallyaffectedanyoftheamountsrecognisedinthecurrentperiodoranypriorperiodandarenotlikely
to affect future periods.
The following accounting standards and interpretations issued by the Australian Accounting Standards Board
(AASB)becomeeffectiveinfutureaccountingperiods.
Effective for annual reporting periods beginning on or after
AASB9FinancialInstruments,andtherelevantamendingstandards. 1January2018
AASB15RevenuefromContractswithCustomersandAASB2014-5
Amendments to Australian Accounting Standards arising from AASB 15.1January2017
AASB2014-3AmendmentstoAustralianAccountingStandards–Accounting
for Acquisitions of Interests in Joint Operations.1January2016
AASB2014-4AmendmentstoAustralianAccountingStandards–Clarification
of Acceptable Methods of Depreciation and Amortisation.1January2016
AASB2014-6AmendmentstoAustralianAccountingStandards–Agriculture:
Bearer Plants.1January2016
AASB2014-9AmendmentstoAustralianAccountingStandards–Equity
Method in Separate Financial Statements.1January2016
AASB2014-10AmendmentstoAustralianAccountingStandards–Sale
or Contribution of Assets between an Investor and its Associate or Joint
Venture.
1January2016
AASB2015-1AmendmentstoAustralianAccountingStandards–Annual
ImprovementstoAustralianAccountingStandards2012-2014Cycle.1January2016
AASB2015-2AmendmentstoAustralianAccountingStandards–Disclosure
Initiative: Amendments to AASB 101.1January2016
AASB2015-3AmendmentstoAustralianAccountingStandardsarisingfrom
theWithdrawalofAASB1031Materiality.1 July 2015
AASB2015-4AmendmentstoAustralianAccountingStandards–Financial
ReportingRequirementsforAustralianGroupswithaForeignParent.1 July 2015
AASB2015-5AmendmentstoAustralianAccountingStandards–Investment
Entities:ApplyingtheConsolidationException.1January2016
Annual report Nightcliff Community Enterprises Limited18
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
operative date for the annual reporting period beginning 1 July 2014. Therefore the abovementioned accounting
standards or interpretations have no impact on amounts recognised in the current period or any prior period.
Economicdependency-BendigoandAdelaideBankLimited
ThecompanyhasenteredintoafranchiseagreementwithBendigoandAdelaideBankLimitedthatgovernsthe
management of the Community Bank® branch at Nightcliff, Northern Territory.
ThebranchoperatesasafranchiseofBendigoandAdelaideBankLimited,usingthename“BendigoBank”and
thelogoandsystemofoperationsofBendigoandAdelaideBankLimited.ThecompanymanagestheCommunity
Bank®branchonbehalfofBendigoandAdelaideBankLimited,howeveralltransactionswithcustomersconducted
through the Community Bank® branch are effectively conducted between the customers and Bendigo and Adelaide
BankLimited.
AlldepositsaremadewithBendigoandAdelaideBankLimited,andallpersonalandinvestmentproductsare
productsofBendigoandAdelaideBankLimited,withthecompanyfacilitatingtheprovisionofthoseproducts.All
loans, leases or hire purchase transactions, issues of new credit or debit cards, temporary or bridging finance and
any other transaction that involves creating a new debt, or increasing or changing the terms of an existing debt
owedtoBendigoandAdelaideBankLimited,mustbeapprovedbyBendigoandAdelaideBankLimited.Allcredit
transactionsaremadewithBendigoandAdelaideBankLimited,andallcreditproductsareproductsofBendigo
andAdelaideBankLimited.
The company promotes and sells the products and services, but is not a party to the transaction.
Thecreditrisk(i.e.theriskthatacustomerwillnotmakerepayments)isfortherelevantBendigoandAdelaide
BankLimitedentitytobearaslongasthecompanyhascompliedwiththeappropriateproceduresandrelevant
obligations and has not exercised a discretion in granting or extending credit.
BendigoandAdelaideBankLimitedprovidessignificantassistanceinestablishingandmaintainingtheCommunity
Bank® branch franchise operations. It also continues to provide ongoing management and operational support
and other assistance and guidance in relation to all aspects of the franchise operation, including advice in relation
to:
• adviceandassistanceinrelationtothedesign,layoutandfitoutoftheCommunity Bank® branch
• trainingforthebranchmanagerandotheremployeesinbanking,managementsystemsandinterfaceprotocol
• methodsandproceduresforthesaleofproductsandprovisionofservices
• securityandcashlogisticcontrols
• calculationofcompanyrevenueandpaymentofmanyoperatingandadministrativeexpenses
• theformulationandimplementationofadvertisingandpromotionalprograms
• salestechniquesandpropercustomerrelations.
The following is a summary of the material accounting policies adopted by the company in the preparation of the
financial statements. The accounting policies have been consistently applied, unless otherwise stated.
Annual report Nightcliff Community Enterprises Limited 19
Notes to the financial statements (continued)
Note1.Summaryofsignificantaccountingpolicies(continued)
b) Revenue
Revenueisrecognisedwhentheamountofrevenuecanbereliablymeasured,itisprobablethatfutureeconomic
benefits will flow to the company and any specific criteria have been met. Interest and fee revenue is recognised
when earned. The gain or loss on disposal of property, plant and equipment is recognised on a net basis and is
classifiedasincomeratherthanrevenue.AllrevenueisstatednetoftheamountofGoodsandServicesTax(GST).
Revenuecalculation
OvertheperiodfromSeptember2013toFebruary2015,BendigoandAdelaideBankLimitedconducteda
review of the Community Bank®model,knownas‘ProjectHorizon’.Thiswasconductedinconsultationwiththe
Community Bank®network.TheobjectiveofthereviewwastodevelopasharedvisionoftheCommunity Bank®
model that positions it for success now and for the future.
The outcome of that review is that the fundamental franchise model and community participation remain
unchanged. Changes to be implemented over a three year period reflect a number of themes, including a culture of
innovation,agilityandflexibility,networkcollaboration,directorandstaffdevelopmentandasustainablefinancial
model. This will include changes to the financial return for Community Bank®companiesfrom1July2016.A
funds transfer pricing model will be used for the method of calculation of the cost of funds, deposit return and
margin.Allrevenuepaidoncorebankingproductswillbethroughmarginshare.Marginoncorebankingproducts
will be shared on a 50/50 basis.
Thefranchiseagreementprovidesthatthreeformsofrevenuemaybeearnedbythecompany–margin,
commissionandfeeincome.BendigoandAdelaideBankLimiteddecidestheformofrevenuethecompanyearns
on different types of products and services.
The revenue earned by the company is dependent on the business that it generates. It may also be affected by
other factors, such as economic and local conditions, for example, interest rates.
Corebankingproducts
BendigoandAdelaideBankLimitedhasidentifiedsomeBendigoBankGroupproductsandservicesas‘core
bankingproducts’.Itmaychangetheproductsandserviceswhichareidentifiedascorebankingproductsbygiving
thecompanyatleast30days’notice.CorebankingproductscurrentlyincludeBendigoBankbrandedhomeloans,
term deposits and at call deposits.
Margin
Margin is arrived at through the following calculation:
• Interestpaidbycustomersonloanslessinterestpaidtocustomersondeposits,
• plusanydepositreturnsi.e.interestreturnappliedbyBendigoandAdelaideBankLimitedforadeposit,
• minusanycostsoffundsi.e.interestappliedbyBendigoandAdelaideBankLimitedtofundaloan.
Note:Inverysimplifiedterms,currently,depositreturnmeanstheinterestBendigoandAdelaideBankLimited
gets when it invests the money the customer deposits with it. The cost of funds means the interest Bendigo and
AdelaideBankLimitedpayswhenitborrowsthemoneytogiveacustomeraloan.From1July2016,bothwill
meanthecostforBendigoandAdelaideBankLimitedtoborrowthemoneyinthemarket.
Products and services on which margin is paid include variable rate deposits and variable rate home loans. From
1July2016,examplesincludeBendigoBankbrandedatcalldeposits,termdepositsandhomeloans.
Annual report Nightcliff Community Enterprises Limited20
Notes to the financial statements (continued)
Note1.Summaryofsignificantaccountingpolicies(continued)
b) Revenue (continued)
Margin(continued)
For those products and services on which margin is paid, the company is entitled to a share of the margin earned
byBendigoandAdelaideBankLimited(i.e.incomeadjustedforBendigoandAdelaideBankLimited’sinterest
expenseandinterestincomereturn).However,ifthisreflectsaloss,thecompanyincursashareofthatloss.
Commission
Commission is a fee paid for products and services sold. It may be paid on the initial sale or on an ongoing basis.
Commissionispayableonthesaleofaninsuranceproductsuchashomecontents.Examplesofproductsand
servicesonwhichongoingcommissionsarepaidincludeleasingandSandhurstTrusteesLimitedproducts.This
currentlyalsoincludesBendigoBankbrandedfixedratehomeloansandtermdepositsofmorethan90days,but
thesewillbecomemarginproductsfrom1July2016.
Fee income
Feeincomeisashareofwhatiscommonlyreferredtoas‘bankfeesandcharges’chargedtocustomersby
BendigoBankGroupentitiesincludingfeesforloanapplicationsandaccounttransactions.
Ability to change financial return
Underthefranchiseagreement,BendigoandAdelaideBankLimitedmaychangetheformandamountoffinancial
returnthatthecompanyreceives.Thereasonsitmaymakeachangeincludechangesinindustryoreconomic
conditionsorchangesinthewayBendigoandAdelaideBankLimitedearnsrevenue.
The change may be to the method of calculation of margin, the amount of margin, commission and fee income or
a change of a margin to a commission or vice versa. This may affect the amount of revenue the company receives
on a particular product or service. The effect of the change on the revenue earned by the company is entirely
dependent on the change.
The change may be to the method of calculation of margin, the amount of margin, commission and fee income or
a change of a margin to a commission or vice versa. This may affect the amount of revenue the company receives
on a particular product or service. The effect of the change on the revenue earned by the company is entirely
dependent on the change.
IfBendigoandAdelaideBankLimitedmakesachangetothemarginorcommissiononcorebankingproducts
andservices,itmustnotreducethemarginandcommissionthecompanyreceivesoncorebankingproductsand
servicesBendigoandAdelaideBankLimitedattributestothecompanytolessthan50%(onanaggregatebasis)
ofBendigoandAdelaideBankLimited’smarginatthattime.Forotherproductsandservices,thereisnorestriction
onthechangeBendigoandAdelaideBankLimitedmaymake.
BendigoandAdelaideBankLimitedmustgivethecompany30days’noticebeforeitchangestheproductsand
services on which margin, commission or fee income is paid, the method of calculation of margin and the amount
of margin, commission or fee income.
Monitoring and changing financial return
BendigoandAdelaideBankLimitedmonitorsthedistributionoffinancialreturnbetweenCommunity Bank®
companiesandBendigoandAdelaideBankLimitedonanongoingbasis.
Overall,BendigoandAdelaideBankLimitedhasmadeitclearthattheCommunity Bank® model is based on the
principleofsharedrewardforsharedeffort.Inparticular,inrelationtocorebankingproductsandservices,theaim
istoachieveanequalshareofBendigoandAdelaideBankLimited’smargin.
Annual report Nightcliff Community Enterprises Limited 21
Notes to the financial statements (continued)
Note1.Summaryofsignificantaccountingpolicies(continued)
b) Revenue (continued)
Monitoringandchangingfinancialreturn(continued)
AsdiscussedaboveinrelationtoProjectHorizon,amongotherthings,therewillbechangesinthefinancialreturn
for Community Bank®companiesfrom1July2016.Thisincludes50%shareofmarginoncorebankingproducts,
allcorebankingproductsbecomemarginproductsandafundstransferpricingmodelwillbeusedforthemethod
of calculation of the cost of funds, deposit return and margin.
c) Income tax
Current tax
Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the
taxable profit or loss for the period. It is calculated using tax rates and tax laws that have been enacted or
substantivelyenactedbyreportingdate.Currenttaxforcurrentandpriorperiodsisrecognisedasaliability(or
asset)totheextentthatitisunpaid(orrefundable).
Deferred tax
Deferred tax is accounted for using the balance sheet liability method on temporary differences arising from
differences between the carrying amount of assets and liabilities in the financial statements and the corresponding
tax base of those items.
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets
are recognised to the extent that it is probable that sufficient taxable amounts will be available against which
deductibletemporarydifferencesorunusedtaxlossesandtaxoffsetscanbeutilised.However,deferredtax
assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial
recognitionofassetsandliabilities(otherthanasaresultofabusinesscombination)whichaffectsneither
taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable
temporary differences arising from goodwill.
Deferredtaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplytotheperiod(s)when
theassetandliabilitygivingrisetothemarerealisedorsettled,basedontaxrates(andtaxlaws)thathavebeen
enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities reflects the tax
consequences that would follow from the manner in which the consolidated entity expects, at the reporting date, to
recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax and
when the balances relate to taxes levied by the same taxation authority and the company entity intends to settle
its tax assets and liabilities on a net basis.
Current and deferred tax for the period
CurrentanddeferredtaxisrecognisedasanexpenseorincomeintheStatementofProfitorLossandOther
Comprehensive Income, except when it relates to items credited or debited to equity, in which case the deferred
tax is also recognised directly in equity, or where it arises from initial accounting for a business combination, in
whichcaseitistakenintoaccountinthedeterminationofgoodwillorexcess.
Annual report Nightcliff Community Enterprises Limited22
Notes to the financial statements (continued)
Note1.Summaryofsignificantaccountingpolicies(continued)
d) Employee entitlements
Provisionismadeforthecompany’sliabilityforemployeebenefitsarisingfromservicesrenderedbyemployees
tobalancedate.Employeebenefitsthatareexpectedtobesettledwithinoneyearhavebeenmeasuredatthe
amountsexpectedtobepaidwhentheliabilityissettled,plusrelatedon-costs.Employeebenefitspayablelater
than one year have been measured at the present value of the estimated future cash outflows to be made for
those benefits.
The company contributes to a defined contribution plan. Contributions to employee superannuation funds are
charged against income as incurred.
e) Cash and cash equivalents
ForthepurposesoftheStatementofCashFlows,cashincludescashonhandandinbanksandinvestmentsin
moneymarketinstruments,netofoutstandingbankoverdrafts.Bankoverdraftsareshownwithinborrowingsin
current liabilities on the Balance Sheet.
f) Trade receivables and payables
Receivablesarecarriedattheiramountsdue.Thecollectabilityofdebtsisassessedatbalancedateandspecific
provisionismadeforanydoubtfulaccounts.Liabilitiesfortradecreditorsandotheramountsarecarriedatcost
that is the fair value of the consideration to be paid in the future for goods and services received, whether or not
billed to the company.
g) Property, plant and equipment
Plant and equipment, leasehold improvements and equipment under finance lease are stated at cost less
accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition
of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined
by discounting the amounts payable in the future to their present value as at the date of acquisition.
Depreciation is provided on property, plant and equipment, including freehold buildings but excluding land.
Depreciation is calculated on a straight line basis so as to write off the net cost of each asset over its expected
usefullifetoitsestimatedresidualvalue.Leaseholdimprovementsaredepreciatedattherateequivalentto
the available building allowance using the straight line method. The estimated useful lives, residual values and
depreciation method are reviewed at the end of each annual reporting period.
The following estimated useful lives are used in the calculation of depreciation:
• leaseholdimprovements 40 years
• plantandequipment 2.5-40years
• furnitureandfittings 4-40years
h) Intangibles
ThefranchisefeepaidtoBendigoandAdelaideBankLimitedhasbeenrecordedatcostandisamortisedona
straight line basis over the life of the franchise agreement.
TherenewalprocessingfeepaidtoBendigoandAdelaideBankLimitedwhenrenewingthefranchiseagreement
has also been recorded at cost and is amortised on a straight line basis over the life of the franchise agreement.
Annual report Nightcliff Community Enterprises Limited 23
Notes to the financial statements (continued)
Note1.Summaryofsignificantaccountingpolicies(continued)
i) Payment terms
Receivablesandpayablesarenoninterestbearingandgenerallyhavepaymenttermsofbetween30and90days.
j) Borrowings
All loans are initially measured at the principal amount. Interest is recognised as an expense as it accrues.
k) Financial instruments
Recognitionandinitialmeasurement
Financial instruments, incorporating financial assets and financial liabilities are recognised when the entity
becomes a party to the contractual provisions of the instrument.
Financial instruments are initially measured at fair value plus transaction costs. Financial instruments are
classified and measured as set out below.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is
transferredtoanotherpartywherebytheentitynolongerhasanysignificantcontinuinginvolvementintherisks
and benefits associated with the asset.
Classification and subsequent measurement
(i) Loansandreceivables
Loansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenot
quotedinanactivemarketandaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestrate
method.
(ii) Held-to-maturityinvestments
Held-to-maturityinvestmentsarenon-derivativefinancialassetsthathavefixedmaturitiesandfixedor
determinablepayments,anditistheentity’sintentiontoholdtheseinvestmentstomaturity.Theyare
subsequently measured at amortised cost using the effective interest rate method.
(iii)Available-for-salefinancialassets
Available-for-salefinancialassetsarenon-derivativefinancialassetsthatareeithernotsuitabletobeclassified
into other categories of financial assets due to their nature, or they are designated as such by management.
They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or
determinable payments.
Theyaresubsequentlymeasuredatfairvaluewithchangesinsuchfairvalue(i.e.gainsorlosses)recognised
intheStatementofProfitorLossandOtherComprehensiveIncome.Available-for-salefinancialassetsare
includedinnon-currentassetsexceptwheretheyareexpectedtobesoldwithin12monthsaftertheendof
the reporting period. All other financial assets are classified as current assets.
(iv)Financialliabilities
Non-derivativefinancialliabilities(excludingfinancialguarantees)aresubsequentlymeasuredatamortisedcost
using the effective interest rate method.
Annual report Nightcliff Community Enterprises Limited24
Notes to the financial statements (continued)
Note1.Summaryofsignificantaccountingpolicies(continued)
k) Financial instruments (continued)
Impairment
Ateachreportingdate,theentityassesseswhetherthereisobjectiveevidencethatafinancialinstrumenthas
beenimpaired.ImpairmentlossesarerecognisedintheStatementofProfitorLossandOtherComprehensive
Income.
l) Leases
Leasesoffixedassetswheresubstantiallyalltherisksandbenefitsincidentaltotheownershipoftheasset,
but not the legal ownership are transferred to the company are classified as finance leases. Finance leases are
capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased
propertyorthepresentvalueoftheminimumleasepayments,includinganyguaranteedresidualvalues.Lease
payments are allocated between the reduction of the lease liability and the lease interest expense for the period.
Leasedassetsaredepreciatedonastraight-linebasisovertheshorteroftheirestimatedusefullivesorthelease
term.Leasepaymentsforoperatingleases,wheresubstantiallyalltherisksandbenefitsremainwiththelessor,
arechargedasexpensesintheperiodsinwhichtheyareincurred.Leaseincentivesunderoperatingleasesare
recognisedasaliabilityandamortisedonastraight-linebasisoverthelifeoftheleaseterm.
m) Provisions
Provisionsarerecognisedwhentheeconomicentityhasalegal,equitableorconstructiveobligationtomakea
future sacrifice of economic benefits to other entities as a result of past transactions of other past events, it is
probable that a future sacrifice of economic benefits will be required and a reliable estimate can be made of the
amount of the obligation.
A provision for dividends is not recognised as a liability unless the dividends are declared, determined or publicly
recommended on or before the reporting date.
n) Contributed equity
Ordinary shares are recognised at the fair value of the consideration received by the company. Any transaction
costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds
received.
o) Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the company, excluding
any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstandingduringthefinancialyear,adjustedforbonuselementsinordinarysharesissuedduringtheyear.
p) Goods and Services Tax
Revenues,expensesandassetsarerecognisednetoftheamountofGoodsandServicesTax(GST),exceptwhere
theamountofGSTincurredisnotrecoverablefromthetaxationauthority.Inthesecircumstances,theGSTis
recognised as part of the cost of acquisition of the asset or as part of the expense.
ReceivablesandpayablesarestatedwiththeamountofGSTincluded.ThenetamountofGSTrecoverablefrom,or
payable to, the taxation authority is included as part of receivables or payables in the Balance Sheet. Cash flows
are included in the Statement of Cash Flows on a gross basis.
TheGSTcomponentsofcashflowsarisingfrominvestingandfinancingactivitieswhicharerecoverablefrom,or
payable to, the taxation authority are classified as operating cash flows.
Annual report Nightcliff Community Enterprises Limited 25
Notes to the financial statements (continued)
Note2.FinancialriskmanagementThecompany’sactivitiesexposeittoalimitedvarietyoffinancialrisks:marketrisk(includingcurrencyrisk,fair
valueinterestriskandpricerisk),creditrisk,liquidityriskandcashflowinterestraterisk.Thecompany’soverall
riskmanagementprogramfocusesontheunpredictabilityoffinancialmarketsandseekstominimisepotential
adverse effects on the financial performance of the entity. The entity does not use derivative instruments.
Riskmanagementiscarriedoutdirectlybytheboardofdirectors.
(i)Marketrisk
The company has no exposure to any transactions denominated in a currency other than Australian dollars.
(ii)Pricerisk
Thecompanyisnotexposedtoequitysecuritiespriceriskasitdoesnotholdinvestmentsforsaleoratfairvalue.
Thecompanyisnotexposedtocommoditypricerisk.
(iii)Creditrisk
Thecompanyhasnosignificantconcentrationsofcreditrisk.Ithaspoliciesinplacetoensurethatcustomers
haveanappropriatecredithistory.Thecompany’sfranchiseagreementlimitsthecompany’screditexposuretoone
financialinstitution,beingBendigoandAdelaideBankLimited.
(iv)Liquidityrisk
Prudentliquiditymanagementimpliesmaintainingsufficientcashandmarketablesecuritiesandtheavailability
offundingfromcreditfacilities.ThecompanybelievesthatitssoundrelationshipwithBendigoandAdelaideBank
Limitedmitigatesthisrisksignificantly.
(v)Cashflowandfairvalueinterestraterisk
Interest-bearingassetsareheldwithBendigoandAdelaideBankLimitedandsubjecttomovementsinmarket
interest.Interest-rateriskcouldalsoarisefromlong-termborrowings.Borrowingsissuedatvariableratesexpose
thecompanytocashflowinterest-raterisk.ThecompanybelievesthatitssoundrelationshipwithBendigoand
AdelaideBankLimitedmitigatesthisrisksignificantly.
(vi)Capitalmanagement
Theboard’spolicyistomaintainastrongcapitalbasesoastosustainfuturedevelopmentofthecompany.The
board of directors monitor the return on capital and the level of dividends to shareholders. Capital is represented
by total equity as recorded in the Balance Sheet.
In accordance with the franchise agreement, in any 12 month period, the funds distributed to shareholders shall
not exceed the distribution limit:
The distribution limit is the greater of:
(a)20%oftheprofitorfundsofthefranchiseeotherwiseavailablefordistributiontoshareholdersinthat12
month period; and
(b) subjecttotheavailabilityofdistributableprofits,therelevantrateofreturnmultipliedbytheaveragelevelof
share capital of the franchisee over that 12 month period where the relevant rate of return is equal to the
weightedaverageinterestrateon90daybankbillsoverthat12monthperiodplus5%.
Annual report Nightcliff Community Enterprises Limited26
Notes to the financial statements (continued)
Note2.Financialriskmanagement(continued)
The board is managing the growth of the business in line with this requirement. There are no other externally
imposed capital requirements, although the nature of the company is such that amounts will be paid in the form
of charitable donations and sponsorship. Charitable donations and sponsorship paid for the year ended 30 June
2015canbeseenintheStatementofProfitorLossandOtherComprehensiveIncome.
Therewerenochangesinthecompany’sapproachtocapitalmanagementduringtheyear.
Note3.CriticalaccountingestimatesandjudgementsEstimatesandjudgementsarecontinuallyevaluatedandarebasedonhistoricalexperienceandotherfactors,
including expectations of future events that may have a financial impact on the entity and that are believed to be
reasonable under the circumstances.
Thecompanymakesestimatesandassumptionsconcerningthefuture.Theresultingaccountingestimateswill,by
definition, seldom equal the related actual results.
Managementhasidentifiedthefollowingcriticalaccountingpoliciesforwhichsignificantjudgements,estimates
and assumptions are made. Actual results may differ from these estimates under different assumptions and
conditions and may materially affect financial results or the financial position reported in future periods.
Further details of the nature of these assumptions and conditions may be found in the relevant notes to the
financial statements.
Taxation
Judgement is required in assessing whether deferred tax assets and certain tax liabilities are recognised on
thebalancesheet.Deferredtaxassets,includingthosearisingfromun-recoupedtaxlosses,capitallossesand
temporarydifferences,arerecognisedonlywhereitisconsideredmorelikelythannotthattheywillberecovered,
which is dependent on the generation of sufficient future taxable profits.
Assumptionsaboutthegenerationoffuturetaxableprofitsdependonmanagement’sestimatesoffuturecash
flows. These depend on estimates of future sales volumes, operating costs, capital expenditure, dividends and
other capital management transactions. Judgements are also required about the application of income tax
legislation.
Thesejudgementsandassumptionsaresubjecttoriskanduncertainty.Thereisthereforeapossibilitythat
changes in circumstances will alter expectations, which may impact the amount of deferred tax assets and
deferred tax liabilities recognised on the balance sheet and the amount of other tax losses and temporary
differences not yet recognised. In such circumstances, some or all of the carrying amount of recognised deferred
taxassetsandliabilitiesmayrequireadjustment,resultingincorrespondingcreditorchargetotheStatementof
ProfitorLossandOtherComprehensiveIncome.
Estimationofusefullivesofassets
The estimation of the useful lives of assets has been based on historical experience and the condition of the
assetisassessedatleastonceperyearandconsideredagainsttheremainingusefullife.Adjustmentstouseful
lives are made when considered necessary.
Annual report Nightcliff Community Enterprises Limited 27
Notes to the financial statements (continued)
Note3.Criticalaccountingestimatesandjudgements(continued)
Impairment of assets
At each reporting date, the company reviews the carrying amounts of its tangible and intangible assets that have
an indefinite useful life to determine whether there is any indication that those assets have suffered an impairment
loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the
extentoftheimpairmentloss(ifany).Wheretheassetdoesnotgeneratecashflowsthatareindependentfrom
otherassets,theconsolidatedentityestimatestherecoverableamountofthecash-generatingunittowhichthe
asset belongs.
Recoverableamountisthehigheroffairvaluelesscoststosellandvalueinuse.Inassessingvalueinuse,the
estimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectscurrent
marketassessmentsofthetimevalueofmoneyandtherisksspecifictotheassetforwhichtheestimatesof
futurecashflowshavenotbeenadjusted.
Iftherecoverableamountofanasset(orcash-generatingunit)isestimatedtobelessthanitscarryingamount,
thecarryingamountoftheasset(cash-generatingunit)isreducedtoitsrecoverableamount.Animpairmentloss
is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the
impairment loss is treated as a revaluation decrease.
Whereanimpairmentlosssubsequentlyreverses,thecarryingamountoftheasset(cash-generatingunit)is
increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying
amount does not exceed the carrying amount that would have been determined had no impairment loss been
recognisedfortheasset(cash-generatingunit)inprioryears.Areversalofanimpairmentlossisrecognised
in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the reversal of the
impairment loss is treated as a revaluation increase.
2015 2014 $ $
Note4.RevenuefromordinaryactivitiesOperating activities:
- services commissions 683,755 617,822
Non-operatingactivities:
- interest received 90 41
Total revenues from ordinary activities 683,845 617,863
Note5.Expenses Depreciationofnon-currentassets:
-plantandequipment 5,252 7,032
-leaseholdimprovements 9,603 10,905
-motorvehicle 4,382 4,382
Annual report Nightcliff Community Enterprises Limited28
Notes to the financial statements (continued)
Note5.Expenses(continued)
Amortisationofnon-currentassets:
-franchiseagreement 2,291 2,242
-establishmentfee - 3,333
-franchiserenewalfee 11,452 9,544
32,980 37,438
Finance costs:
- interest paid 4,504 5,924
Bad debts 1,520 723
Note6.IncometaxexpenseThe components of tax expense comprise:
-Movementindeferredtax (4,004) (2,071)
-Adjustmenttodeferredtaxtoreflectchangetotaxrateinfutureperiods 9,767 -
-Recoupmentofprioryeartaxlosses 16,486 8,409
22,249 6,338
The prima facie tax on profit from ordinary activities before
income tax is reconciled to the income tax expense as follows
Operatingprofit 41,123 17,459
Primafacietaxonprofitfromordinaryactivitiesat30% 12,337 5,238
Add tax effect of:
-non-deductibleexpenses 145 1,100
-timingdifferenceexpenses 4,004 2,072
16,486 8,410
Movementindeferredtax (4,004) (2,072)
Adjustmenttodeferredtaxtoreflectchangeoftaxratein
futureperiods 9,767 -
Under/(Over)provisionofincometaxintheprioryear - -
22,249 6,338
Note7.CashandcashequivalentsCashatbankandonhand 1,136 20,153
1,136 20,153
2015 2014 $ $
Annual report Nightcliff Community Enterprises Limited 29
Notes to the financial statements (continued)
Note7.Cashandcashequivalents(continued)
Note7.(a)Reconciliationtocashflowstatement
The above figures reconcile to the amount of cash shown in the
statement of cash flows at the end of the financial year as follows:
Cashatbankandonhand 1,136 20,153
Bankoverdraft 13 (54,757) (93,759)
(53,621) (73,606)
Note8.Tradeandotherreceivables Tradereceivables 56,382 47,398
Prepayments 11,322 9,066
Otherreceivablesandaccruals 3,276 219
70,980 56,683
Note9.Property,plantandequipmentLeaseholdimprovements
Atcost 177,020 177,020
Lessaccumulateddepreciation (88,648) (79,045)
88,372 97,975
Plant and equipment
Atcost 75,726 75,287
Lessaccumulateddepreciation (59,300) (54,048)
16,426 21,239
Motor vehicles
Atcost 35,058 35,058
Lessaccumulateddepreciation (19,089) (14,707)
15,969 20,351
Total written down amount 120,767 139,565
Movements in carrying amounts:
Leaseholdimprovements
Carryingamountatbeginning 97,975 108,880
Less:depreciationexpense (9,603) (10,905)
Carrying amount at end 88,372 97,975
Note 2015 2014 $ $
Annual report Nightcliff Community Enterprises Limited30
Notes to the financial statements (continued)
Note9.Property,plantandequipment(continued)
Plant and equipment
Carryingamountatbeginning 21,239 27,908
Additions 439 363
Less:depreciationexpense (5,252) (7,032)
Carrying amount at end 16,426 21,239
Motor vehicles
Carryingamountatbeginning 20,351 24,733
Less:depreciationexpense (4,382) (4,382)
Carrying amount at end 15,969 20,351
Total written down amount 120,767 139,565
Note 10. Intangible assets Franchise fee
At cost 21,453 21,453
Less:accumulatedamortisation (14,200) (11,909)
7,253 9,544
Establishmentfee
At cost 100,000 100,000
Less:accumulatedamortisation (100,000) (100,000)
- -
Renewalprocessingfee
Atcost 57,260 57,260
Less:accumulatedamortisation (20,995) (9,543)
36,265 47,717
Total written down amount 43,518 57,261
2015 2014 $ $
Annual report Nightcliff Community Enterprises Limited 31
Notes to the financial statements (continued)
Note 11. TaxDeferred tax assets
-accruals 1,654 -
-employeeprovisions 7,512 5,644
-taxlossescarriedforward 176,414 202,185
185,580 207,829
Net deferred tax asset 185,580 207,829
Movement in deferred tax charged to Statement of Profit or
Loss and Other Comprehensive Income 22,249 6,338
Note 12. Trade and other payables Current:
Tradecreditors 18,866 16,515
Othercreditorsandaccruals 14,511 34,296
Sundrycreditor-BABL 20,995 20,995
54,372 71,806
Non-Current:
Sundrycreditor-BABL - 20,995
- 20,995
Note 13. Borrowings Current:
Bankoverdrafts 54,757 93,759
Chattelmortgage 18 6,057 8,496
60,814 102,255
Non-Current:
Chattelmortgage 18 - 6,057
- 6,057
Theapprovedoverdraftlimitis$180,000.Interestischargedatarateof6.00%.Thedebtissecuredbyafixed
andfloatingchargeoverthecompany’sassetsandissubjecttoquarterlyreviewsbyBendigoBank.
TheChattelmortgageisafinanceleaseof$43,707,whichcommencedinFebruary2011,isa5-yearlease.
Interestisrecognisedatanaveragerateof8.12%(2014:8.12%).
Note 2015 2014 $ $
Annual report Nightcliff Community Enterprises Limited32
Notes to the financial statements (continued)
Note 14. Provisions Current:
Provisionforannualleave 13,380 10,253
13,380 10,253
Non-Current:
Provision for long service leave 12,977 8,561
Note 15. Contributed equity898,584ordinarysharesfullypaid(2014:898,584) 898,584 898,584
Less:equityraisingexpenses (34,210) (34,210)
864,374 864,374
Rightsattachedtoshares
(a)Votingrights
Subjecttosomelimitedexceptions,eachmemberhastherighttovoteatageneralmeeting.
Onashowofhandsorapoll,eachmemberattendingthemeeting(whethertheyareattendingthemeeting
inpersonorbyattorney,corporaterepresentativeorproxy)hasonevote,regardlessofthenumberofshares
held.However,whereapersonattendsameetinginpersonandisentitledtovoteinmorethanonecapacity
(forexample,thepersonisamemberandhasalsobeenappointedasproxyforanothermember)thatperson
may only exercise one vote on a show of hands. On a poll, that person may exercise one vote as a member and
one vote for each other member that person represents as duly appointed attorney, corporate representative or
proxy.
The purpose of giving each member only one vote, regardless of the number of shares held, is to reflect the
nature of the company as a community based company, by providing that all members of the community who
have contributed to the establishment and ongoing operation of the Community Bank® branch have the same
ability to influence the operation of the company.
(b)Dividends
Generally,dividendsarepayabletomembersinproportiontotheamountofthesharecapitalpaiduponthe
sharesheldbythem,subjecttoanyspecialrightsandrestrictionsforthetimebeingattachingtoshares.The
franchiseagreementwithBendigoandAdelaideBankLimitedcontainsalimitonthelevelofprofitsorfunds
that may be distributed to shareholders. There is also a restriction on the payment of dividends to certain
shareholdersiftheyhaveaprohibitedshareholdinginterest(seebelow).
(c)Transfer
Generally,ordinarysharesarefreelytransferable.However,thedirectorshaveadiscretiontorefusetoregister
a transfer of shares.
Subjecttotheforegoing,shareholdersmaytransfersharesbyapropertransfereffectedinaccordancewiththe
company’sconstitutionandtheCorporationsAct2001.
2015 2014 $ $
Annual report Nightcliff Community Enterprises Limited 33
Notes to the financial statements (continued)
Note15.Contributedequity(continued)
Prohibited shareholding interest
A person must not have a prohibited shareholding interest in the company.
In summary, a person has a prohibited shareholding interest if any of the following applies:
• Theycontrolorown10%ormoreofthesharesinthecompany(the“10%limit”).
• Intheopinionoftheboardtheydonothaveacloseconnectiontothecommunityorcommunitiesinwhichthe
companypredominantlycarriesonbusiness(the“closeconnectiontest”).
• Wherethepersonisashareholder,afterthetransferofsharesinthecompanytothatpersonthenumberof
shareholdersinthecompanyis(orwouldbe)lowerthanthebasenumber(the“basenumbertest”).Thebase
numberis266.Asatthedateofthisreport,thecompanyhad296shareholders.
Aswithvotingrights,thepurposeofthisprohibitedshareholdingprovisionistoreflectthecommunity-basednature
of the company.
Whereapersonhasaprohibitedshareholdinginterest,thevotinganddividendrightsattachingtothesharesin
whichtheperson(andhisorherassociates)haveaprohibitedshareholdinginterest,aresuspended.
Theboardhasthepowertorequestinformationfromapersonwhohas(orissuspectedbytheboardofhaving)
a legal or beneficial interest in any shares in the company or any voting power in the company, for the purpose of
determining whether a person has a prohibited shareholding interest. If the board becomes aware that a member
hasaprohibitedshareholdinginterest,itmustserveanoticerequiringthemember(orthemember’sassociate)to
dispose of the number of shares the board considers necessary to remedy the breach. If a person fails to comply
withsuchanoticewithinaspecifiedperiod(thatmustbebetweenthreeandsixmonths),theboardisauthorised
to sell the specified shares on behalf of that person. The holder will be entitled to the consideration from the sale
of the shares, less any expenses incurred by the board in selling or otherwise dealing with those shares.
Intheconstitution,membersacknowledgeandrecognisethattheexerciseofthepowersgiventotheboardmay
cause considerable disadvantage to individual members, but that such a result may be necessary to enforce the
prohibition.
2015 2014 $ $
Note16.AccumulatedlossesBalanceatthebeginningofthefinancialyear (602,810) (569,002)
Netprofitfromordinaryactivitiesafterincometax 18,874 11,121
Dividendspaidorprovidedfor - (44,929)
Balance at the end of the financial year (583,936) (602,810)
Annual report Nightcliff Community Enterprises Limited34
Notes to the financial statements (continued)
Note17.Statementofcashflows Reconciliationofprofitfromordinaryactivitiesaftertaxtonetcash
provided by operating activities
Profitfromordinaryactivitiesafterincometax 18,874 11,121
Non cash items:
-depreciation 19,237 22,319
-amortisation 13,743 15,119
Changes in assets and liabilities:
-(increase)/decreaseinreceivables (14,296) 3,709
-(increase)/decreaseinotherassets 22,249 6,338
-increase/(decrease)inpayables (38,429) (9,790)
-increase/(decrease)inprovisions 7,543 6,905
Net cash flows provided by operating activities 28,921 55,721
Note18.LeasesFinance lease commitments
Payable-minimumleasepayments:
-notlaterthan12months 6,244 9,366
-between12monthsand5years - 6,244
Minimum lease payments 6,244 15,610
Lessfuturefinancecharges (187) (1,057)
Present value of minimum lease payments 6,057 14,553
Operating lease commitments
Non-cancellableoperatingleasescontractedforbutnotcapitalised
in the financial statements
Payable-minimumleasepayments:
-notlaterthan12months 60,835 58,495
-between12monthsand5years 136,878 219,356
197,713 277,851
Thebusinesspremisesleaseisanon-cancellableleasewithafive-yearterm,withrentpayablemonthlyin
advance.
2015 2014 $ $
Annual report Nightcliff Community Enterprises Limited 35
Notes to the financial statements (continued)
Note19.Auditor’sremunerationAmounts received or due and receivable by the auditor of the company for:
-auditandreviewservices 4,700 3,850
-nonauditservices 3,748 2,197
8,448 6,047
Note 20. Director and related party disclosuresNo director of the company receives remuneration for services as a company director or committee member.
There are no executives within the company whose remuneration is required to be disclosed.
Detailedremunerationdisclosuresareprovidedintheremunerationreport,includedaspartofthedirectors’
report.
Detailedshareholdingdisclosuresareprovidedintheremunerationreport,includedaspartofthedirectors’
report.
2015 2014 $ $
Note 21. Dividends paid or provideda. Dividends paid during the year
Current year dividend
Unfranked dividend - Nil cents (2014: 5 cents) per share - 44,929
Note22.Earningspershare
2015 $
2014 $
(a) Profit attributable to the ordinary equity holders of the company used
in calculating earnings per share18,874 11,121
Number Number
(b) Weightedaveragenumberofordinarysharesusedasthe
denominator in calculating basic earnings per share898,584 898,584
Note23.EventsoccurringafterthereportingdateThere have been no events after the end of the financial year that would materially affect the financial statements.
2015 2014 $ $
Annual report Nightcliff Community Enterprises Limited36
Notes to the financial statements (continued)
Note 24. Contingent liabilities and contingent assetsThere were no contingent liabilities or contingent assets at the date of this report to affect the financial
statements.
Note 25. Segment reportingThe economic entity operates in the service sector where it facilitates Community Bank® services in Nightcliff and
surrounding suburbs of Darwin, Northern Territory pursuant to a franchise agreement with Bendigo and Adelaide
BankLimited.
Note26.Registeredoffice/PrincipalplaceofbusinessThe entity is a company limited by shares, incorporated and domiciled in Australia. The registered office and
principal place of business is:
Registered Office Principal Place of Business
40 Progress Drive
NightcliffNT0810
40 Progress Drive
NightcliffNT0810
Note27.Financialinstruments
Financial Instrument Composition and Maturity Analysis
The table below reflects the undiscounted contractual settlement terms for all financial instruments, as well as the
settlement period for instruments with a fixed period of maturity and interest rate.
Financial instrument
Floating interestFixed interest rate maturing in Non interest
bearingWeighted average1 year or less Over 1 to 5 years Over 5 years
2015$
2014$
2015$
2014$
2015$
2014$
2015$
2014$
2015$
2014$
2015%
2014%
Financial assets
Cash and cash equivalents
886 19,903 - - - - - - 250 250 0.55 0.42
Receivables - - - - - - - - 56,382 47,398 N/A N/A
Financial liabilities
Interest bearing liabilities
- - 6,244 9,366 - 6,244 - - - - 8.12 8.12
Bank overdraft
54,757 93,759 4.66 6.20
Payables - - - - - - - - 18,866 16,515 N/A N/A
Annual report Nightcliff Community Enterprises Limited 37
Notes to the financial statements (continued)
Note27.Financialinstruments(continued)
NetFairValues
The net fair values of financial assets and liabilities approximate the carrying values as disclosed in the balance
sheet. The company does not have any unrecognised financial instruments at the year end.
CreditRisk
Themaximumexposuretocreditriskatbalancedatetorecognisedfinancialassetsisthecarryingamountof
those assets as disclosed in the balance sheet and notes to the financial statements.
Therearenomaterialcreditriskexposurestoanysingledebtororgroupofdebtorsunderfinancialinstruments
entered into by the economic entity.
InterestRateRisk
Interestrateriskreferstotheriskthatthevalueofafinancialinstrumentorcashflowsassociatedwiththe
instrumentwillfluctuateduetochangesinmarketinterestrates.Interestrateriskarisesfromtheinterestbearing
financialassetsandliabilitiesinplacesubjecttovariableinterestrates,asoutlinedabove.
Sensitivity Analysis
Thecompanyhasperformedsensitivityanalysisrelatingtoitsexposuretointerestrateriskatbalancedate.
This sensitivity analysis demonstrates the effect on the current year results and equity which could result from a
change in interest rates.
As at 30 June 2015, the effect on profit and equity as a result of changes in interest rate, with all other variables
remaining constant would be as follows:
2015 $
2014 $
Changeinprofit/(loss)
Increaseininterestrateby1% (601) (895)
Decreaseininterestrateby1% 601 895
Change in equity
Increaseininterestrateby1% (601) (895)
Decreaseininterestrateby1% 601 895
Annual report Nightcliff Community Enterprises Limited38
Directors’declarationInaccordancewitharesolutionofthedirectorsofNightcliffCommunityEnterprisesLimited,westatethat:
In the opinion of the directors:
(a) thefinancialstatementsandnotesofthecompanyareinaccordancewiththeCorporationsAct2001,
including:
(i) givingatrueandfairviewofthecompany’sfinancialpositionasat30June2015andofitsperformance
for the financial year ended on that date; and
(ii) complyingwithAccountingStandards,theCorporationsRegulations2001andothermandatoryprofessional
reporting requirements; and
(b) therearereasonablegroundstobelievethatthecompanywillbeabletopayitsdebtsasandwhenthey
become due and payable.
(c) theauditedremunerationdisclosuressetoutintheremunerationreportsectionofthedirectors’reportcomply
withAccountingStandardAASB124RelatedPartyDisclosuresandtheCorporationsRegulations2001.
This declaration is made in accordance with a resolution of the board of directors.
James Keith McDougall,
Chairman
Signed on the 10 October 2015.
Annual report Nightcliff Community Enterprises Limited 39
Independent audit report
Annual report Nightcliff Community Enterprises Limited40
Independent audit report (continued)
bendigobank.com.au
Nightcliff Community Bank® Branch 1/40 Progress Drive, Nightcliff NT 0810Phone: (08) 8948 4485 Fax: (08) 8948 4459
Franchisee: Nightcliff Community Enterprises LimitedUnit 1‚ 13 Travers Street, Coconut Grove NT 0810Phone: (08) 8948 4485 Fax: (08) 8948 4459ABN: 64 128 953 748www.bendigobank.com.au/nightcliff(BMPAR15109) (09/15)