Heidelberg District Community : 2021 Annual Report for Heidelberg District Community Enterpise

Annual Report

2021

Heidelberg District

Community Enterprise

Limited

Community Bank

East Ivanhoe and Heidelberg

ABN 62 095 312 744

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Contents

HDCE Chair Report 2021	4
Managers' Report	7
20 Year Celebrations	8
Supporting the Community	9
Staff in action	11
Bendigo and Adelaide Bank Report	12
Directors' Report	13
Auditor's Independence Declaration	23
Financial Statements	24
Notes to the Financial Statements	28
Directors' Declaration	55
Independent Audit Report	56
NSX Report 2021	61
Sponsorships and Grants 2020-21	64
Community contributions and
shareholder dividends 2020-21	65
Corporate Governance Statement	66
Community Investment HDCE 2020-21	69
Community Investment Victoria 2020-21	70
Community Investment National 2020-21	71

Annual Report Heidelberg District Community Enterprise Limited

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HDCE Chair Report 2021

Our Community

For the second year in a row I write the Chair report from my home office. Despite the complex circumstances we find ourselves in, I am again affirmed of the important role this enterprise plays in the capacity and resilience building within our community. As groups and associations adapt to the on again, off again nature of their event calendars, as supporting organisations ramp up their services to a community that is under increasing need for specific support to those in real need, we have responded and adapted, working with our community partners to support and enable them to continue to deliver important capabilities to our community.

We have been an important stakeholder in the establishment of the BANSIC Food Hub to address the need in the community of those suffering from food insecurity. We have maintained our support for the disengaged youth in Heidelberg West through our Youth Foundation 3081 program and continued our relationship with the many sporting clubs and community groups who have been challenged in maintaining a positive and vital connection with their members.

The 2020/21 investment into our community via sponsorships, grants and donations is $216,796 and brings the total HDCEL investment to $3,634,989 into the community that has backed this amazing enterprise called community banking.

Our Company

The last 12 months has tested HDCEL on numerous levels. The highs and the lows of 2020/2021 are numerous.

Of course, our greatest HIGH is the celebration of our 20th year and the terrific impact empowered through our presence in our community. We managed to gather 70 people together in our Heidelberg branch in between lockdowns and celebrated this great milestone with representation from community groups and associations, past and current staff and Board Directors and shareholders alike.

The low is clear. This is the first year we have posted a loss for our Company since the initial losses in the establishment of our Company between 2001 - 2004. This situation has resulted in the Board vigilantly assessing our structure and operations with a 2 year growth strategy currently being implemented. I announce that

in 2020/2021 the company made a loss of $29,451. This loss is reached after accounting for the community contributions that we are committed to maintain given our company mission. HDCEL, when adding back the community contributions, would have posted a small profit of $89k.

At June 2021, HDCEL had a healthy balance sheet with net assets of $2,319,264. HDCEL is sound, is governed well, we have a strong and respected partner in Bendigo and Adelaide Bank and we as a business continue to deliver a valuable customer experience.

As noted in the supporting comments to the Financial Statements this year our results are a product of the generally depressed economic environment, the historically low cash rates set by the Reserve Bank and their impact on margins, the effects of the COVID-19 pandemic and lockdowns, the lack of supply in the residential home market and extremely low returns on deposits. Moreover, the fierce market competition for home and other loans has made it difficult to achieve budgeted targets.

Operating in this unprecedented environment has impacted on our share of the revenue stream under our franchise agreement, a situation that keeps the Board vigilant in oversight of revenue and expenses. The Company is actively pursuing a growth strategy incorporating a greater mobile banking presence, staff team restructure and an emphasis on reduction of property costs. We have worked closely with our partner Bendigo and Adelaide Bank to ensure we have the support and guidance at branch level to place us in the best position to return to the strong profitable position that we have enjoyed in more recent years.

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HDCE Chair Report (continued)

Our Staff

As a business providing an essential service, we have remained open to our valued customers throughout the 12 months regardless of lockdowns or restrictions placed on the general public.

Our staff team have worked under difficult circumstances for the last 18 months. Although acknowledging the fact that work was able to continue there were nonetheless added requirements for COVID related hygiene and safety requirements that saw many changes including masks being worn constantly, the new role of concierge duties implemented to keep our staff and customers safe, altered opening hours and deep cleans after being declared a second tier exposure site. Working in this environment is fraught with many more concerns than the normal pre- COVID work environment posed. During this past year we particularly commend our staff for swiftly implementing hygiene and social distancing requirements into the branch operations to ensure the protection of our valued customers, our community and indeed themselves. We congratulate our team for their resilience and for all the extra effort they have given.

Our leadership team of Syed Zaidi, Mark Munro and Haylee Doering worked diligently to keep our staff team safe and encouraged them to work effectively and efficiently in the circumstances.

The customer service team this financial year comprised Jo-Ann Downey, Julie Bullen, Sylvia Watson, Adam Greenland, Kerryn Young, Samantha Dawes, Haylee Doering, Syed Zaidi, Mark Munro, Jennifer Ferguson, Jack Williams and Elizabeth Costelow. Over the year we farewelled team member Samantha Dawes who had served with HDCEL for over 7 years.

Carly Kluge, our Community Liaison Officer, alongside Pam Tremlett, our Administration and Bookkeeper Officer, provided crucial ongoing support to the HDCEL Board. These support roles are critical to the smooth operation of our Company and the successful engagement in our community.

Our Board of Directors

I feel privileged to be the Chair of the HDCEL Board, supported by such diligent, conscientious and community minded fellow Directors. This past year the Board welcomed Peter Howe, who brings skills in accountancy and business acumen. All Board members hold positions on one or more of the following Committees; Human Resources, Audit & Governance (including Property) and Marketing & Business Development.

The Human Resources Committee of Jeremy McAuliffe, Russell Hutchins, Anne Rogan, Brian Simpson and Nan Caple continued to work with Bendigo Bank to support our Managers and our staff to ensure that they are able to concentrate their efforts into business development. The Growth strategy focused this committee on ensuring our staff roles supported strong customer service and advocacy.

The Audit & Governance Committee of Russell Hutchins (Company Secretary), Jason Dwyer (Treasurer), John Nelson, Brian Simpson and Tara O'Brien, again continued to provide a governance framework that has ensured robust oversight in all HDCEL activities. This committee has focused on accurate, timely and relevant financial reporting and analysis, supported in this task by our bookkeeper, Pam Tremlett. This committee addressed issues related to HDCEL property, leases and rentals, and ensured compliance to our franchise agreement.

Marketing and Business Development Committee of Carly Kluge, Tara O'Brien, Jeremy McAuliffe and Nan Caple plus our management team, has continued to ensure that we maximize every opportunity to grow our business in the face of great uncertainty. The committee has re-focussed our Sponsorship and Grant funding towards the acute needs of our partner organisations and their long term growth and development post the pandemic.

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