'Banking When and Where You Need

Annual Review and Financial Statements for the Financial Year 30 June 2016

‘Banking when and where you need it’

81158 WAW-Annual Report Art- Cover 2015-16-A4.indd 1 13/10/2016 11:24 am 81158 WAW-Annual Report Art- Cover 2015-16-A4.indd 2 13/10/2016 11:24 am WAW Credit Union Co-Operative Limited

ncial Reli na ab Fi il it y

OUR VISION t En or vi p ro p n u m S To be the best value provider of smart banking services to e y

t n

n a

e m

the communities we serve. m

i l i t

C u s to m lity OUR PURPOSE er Mutua To operate a responsive, values-driven, co-operative financial institution that provides financial and community benefits to customers and the region in a sustainable manner.

OUR VALUES Trust • Co-operation • Moral Integrity • Financial Prudence • Caring for Customers • Social Responsibility

OUR 4BL APPROACH Community Support • Financial Reliability • Environmental Responsibility • Customer Mutuality

Contents

Chair’s and Chief Executive Officer’s Report...... i

Implementing 4BL ...... iii

Directors’ Report...... 1

Auditor Independence Declaration...... 5

Statement of Profit or Loss and Other Comprehensive Income...... 6

Statement of Changes in Equity...... 7

Statement of Financial Position...... 8

Statement of Cash Flows...... 9

Notes to the Financial Statements...... 10

Directors’ Declaration...... 52

Independent Auditor’s Report...... 53

As part of our environmental responsibility business policy, printed copies of this annual report will be supplied by request only. We encourage customers to access this document online at www.wawcu.com.au WAW Credit Union Co-Operative Limited

Annual Review for 2015/2016

Chair’s and

Chief Executive RICHARD POWER PETER CHALLIS Officer’s Report Chair Chief Executive Officer

Your Credit Union primarily serves the communities of North pleasing. The results provided confirmation of our position in East Victoria and Southern New South Wales. Our region the hearts and minds of our customers, with a 94% satisfaction continues to be a destination of choice for many to raise and level achieved. The results also provided an insight into what educate a family and build a career or operate a business. the Credit Union needs to do moving forward to further develop its product and service offering. Our focus on people CONTINUED TO BALANCE THE NEEDS OF continues to be our strength: our owners, our customers, our CUSTOMERS AND THE CREDIT UNION staff and our stakeholder suppliers. Our 80 staff undertook 4,727 hours of training and development, and your Board It has certainly been a challenging year, with many global of Directors undertook a total of 495 hours of both external social and economic events disrupting every-day life. Your and internal professional development during the year. Your Credit Union has met these challenges with an approach Board of Directors operates with six sub-committees and these that balanced the needs of its 30,100 customers with its committees collectively held 51 meetings to develop and own prudential requirements. As a mutual, that is customer- monitor actions that reflect our stakeholder needs. owned and not shareholder-driven, we are able to support one another first and foremost. We support and assist our SPONSORSHIPS AND COMMUNITY- customers. This is a significant difference to the mainstream banking community and is evident every day the Credit Union ENABLING ACTIVITIES operates and transacts with its customers. Our staff continued to support and volunteer for many Your Credit Union strategically provides and distributes community-based activities. Your Credit Union distributed 6.0% pre-profit benefits to its many customers via the competitive of pre-tax profits to sponsorships and community-enabling pricing of its products and services. Our profits, after activities. In addition to this investment in our community, addressing our regulatory requirements, are channelled back we raised a total of $77,000 during the 2015/2016 year for the into pricing and service deliverables. These benefits represent Latipsoh appeal – giving back to our hospitals – and this brings our mutuality dividend through the value we deliver to our the total raised for our hospitals across the region to $1,400,000 customers and the broader community. This is the customer- since 2002. owned business model. CUSTOMER-OWNED BANKING MODEL CONSUMER AND BUSINESS To assist with our customer-owned banking model, we have CONFIDENCE REMAINS SUBDUED implemented a four-bottom-line strategy. The four bottom lines are: Financial Reliability, Community Support, Environmental The business conditions have been less than ideal, and at the Responsibility, and Customer Mutuality. These four pillars provide time of writing this report the Reserve Bank of Australia has a framework to develop and operate the Credit Union for the reduced the official interest rate to the historical low of 1.50%. benefit of all its stakeholders. WAW Credit Union employs a ‘buy Unfortunately, consumer and business confidence remains low. local’ policy where it is practical to do so. Further, the Credit Given the previous comments around business conditions, Union does outsource a number of key operational banking and your Credit Union has maintained growth in the two core areas information technology functions. WAW does not off-shore or of customer deposits and loans to our customers. Lending near-shore these activities. Supporting our various communities growth was challenging, and we did not lower our lending in our region is central to our customer-owned banking standards to gain short-term growth. We managed our deposit approach. growth lower to maintain our liquidity at 20%. The 2016/2017 year looks just as challenging. OUR KEY REGULATORS CUSTOMER-CENTRIC APPROACH Our three key regulators - Australian Prudential Regulation Authority (APRA), Australian Securities & Investments We remain sharply customer-centric in all we do, and this Commission (ASIC), and Australian Transaction Reports is reflected in the solid relationships we have with our and Analysis Centre (AUSTRAC) - demand a high degree of stakeholders. In February and March 2016 the Credit Union governance and oversight, and your Credit Union strives for carried out extensive market research, and results were very continuous development and improvement in its operations to i Chair’s and Chief Executive Officer’s Report continued

address these requirements. The organisational structure and sustainability of the Credit Union. We will not seek out short- the allocation of functional responsibilities are continuously term decisions that in the long term harm our customers or assessed to ensure the correct structure and operational focus the Credit Union. is maintained. APRA was very active across the entire banking sector to CUSTOMER FRAUD PROTECTION ensure that the banking system remained prudential and that Our global society has many pockets of criminal activity that the externally-influenced changes in the macro-economic are designed to defraud someone of their money. Your Credit operating environment were respected and reflected in the Union continues to facilitate a fraud protection program that risk management oversight within the banking system. APRA is all about protecting our stakeholders. We continue to work did place demands on those operators in the banking system with our customers and stakeholder suppliers to ensure that who placed too much emphasis on growth outcomes and not fraud protection and fraud education is top of mind. We enough on risk management. Where this was identified in the continue to provide information to keep our customers up-to- banking sector, APRA took action. Your Credit Union continued date with the latest scams and provide tips to enable them to to operate with prudentially sound practices that maintained a take more responsibility for their banking actions. We all need strong risk management approach. to work in partnership in response to the ever-challenging fraud events and activities. ASIC was also active within the consumer lending market and the disclosure requirements in the financial planning and risk CEO TRANSITION insurance areas to ensure that consumers were protected and had access to assistance when it was required. Your In February 2015 our Chief Executive Officer, Peter Challis, Credit Union continued to demand full compliance with ASIC advised that he would be taking early retirement. Following a requirements to ensure consumers were protected. CEO succession process, the Board was delighted to announce that Michael Mack was appointed to the role. Michael joined AUSTRAC was also active during the year ensuring that the WAW Credit Union in 1994 and has been the Deputy CEO for Australian banking system was operating in a sound manner eight years. During the tenure of Peter Challis, the Credit Union in the anti-money laundering and counter-terrorism financing has gone from strength to strength, with all the key indicators (AML/CTF) identification and monitoring activities that protect improving. The Credit Union is in a sustainable position due Australia. Your Credit Union continued to fully operate within to the qualities that Peter and his Management team have the expressed and implied intent of AML/CTF requirements instilled into the Credit Union. that ensure all involved are not exposed. These three key regulators continue to amend regulation THANK YOU TO OUR STAKEHOLDERS that builds an even stronger and more resilient banking In closing this report, we would like to thank our many system. Your Credit Union continued to operate within its set stakeholders who continue to support and develop the prudential operating framework. Credit Union. To our shareholders and customers - thank you for placing your trust in our Credit Union operations. To our A STRONG AND COMPETITIVE focused and dedicated staff - thank you for your attention to BANKING SYSTEM service and support - our customers simply enjoy banking with us because of you! And thank you to our Directors and WAW Credit Union supports a strong, competitive and neutral Management who work continuously and are dedicated to banking system. The major banks continue to drive and control ensuring that the Credit Union remains focused on delivering the Australian banking landscape. During the year, the Federal long-term benefits for all. Government released the report on the Financial System Inquiry chaired by David Murray. The inquiry looked at the On behalf of all our stakeholders, we would like to pass on a structure, safety and competiveness of the financial services special thank you to Ms Tracey Toohey who retired from the Board system. The report has recommended a number of changes of Directors in November 2015 after seven years of service. that are already in train. Some of these changes will level the Our future looks very bright and, with your continued and playing field between the major Banks and the many other ongoing support, we will achieve even higher levels of success. banking institutions operating in the banking sector. Your Credit Union welcomes these changes which will improve the access and competitiveness within the Australian banking sector. The Credit Union’s financial performance continues to operate in line with its strategic and business plans. We continue to absorb the challenging operating conditions on behalf of our Richard Power Peter K Challis customers. As an outcome of our customer deposit and loan Chair CEO/Company growth for the year, our three main key performance indicators Secretary returned tremendous results and all three were in line with our longer-term strategic targets at 30 June 2016: Capital Adequacy ratio 14.34% Liquidity ratio 20.18% Delinquency ratio 0.34% The Board of Directors and the Management team remained focused on the protection of its depositors and the long-term

ii WAW Credit Union Co-Operative Limited

Implementing 4BL Since 2007, WAW has incorporated four key business areas to build a comprehensive approach to banking: Financial Reliability, Community Support, Environmental Responsibility and Customer Mutuality. Together, these four Bottom Lines (4BL) help to ensure that we deliver tangible benefits to all our stakeholders in a sustainable manner. As such, we again include our 4BL results as part of our Annual Review and Financial Statements report this year.

FINANCIAL RELIABILITY many others in the sector. This is especially relevant considering that extremely competitive conditions Long Term Sustainability remained present in the industry, along with increases in The Board and Management remain committed to the regional property market being more subdued than decisions that focus on the longer-term sustainability those seen in Sydney and Melbourne. of our customer-owned banking model, rather than short-term profits. These decisions Maintaining a strong value proposition for customers include investments into new is also central to our sustainability. As a result, the technologies that customers organisation continued to develop new products and and communities will need services during the year including the launch of several into the future, maintaining new lending products to suit owner-occupiers and a high quality and reliable investors. WAW’s new Essentials Variable Rate Home Service Centre network and Loan continues to be one of the most competitive loan training and developing our facilities in the market with features as at 30 June 2016 extremely committed staff. such as a three year introductory variable rate of just During the year, the Credit Union 3.98% along with no monthly or annual facility fees. sought to balance an extremely sound financial position with the interests of customers in their desire COMMUNITY SUPPORT to access highly competitive products backed up with The WAW Community Support Program underpins our outstanding service. Finding this balance in a low commitment to giving back to the communities we interest rate environment can be challenging; however, serve. We actively encourage contact from local charities, we are proud that we were able to pass on the full sporting and social groups and schools needing financial amount of the Official Cash Rate reduction in May 2016 support. This year the Community Support Program to borrowers while limiting the impact on customers has again delivered in excess of $100,000 to worthy who rely on returns from their savings and investments. In doing so, the Board and Management were still able recipients. Additionally, WAW staff have given many to deliver a strong profit result of $1.32m and growth in hours of their own time to support community events our Capital Adequacy position to 14.34% for the year. and projects through initiatives connected to the WAW Community Fund and more. Controlled growth is also an important feature of longer-term decision-making. Our overall total Asset Youth Mental Health Forum position increased by 3.41%, which compares well with Mental health remains one of the most invasive issues for all sections of the community. WAW was pleased to be able to provide the necessary funds to ensure the ongoing success of the Albury Wodonga Youth Mental Health Forum. This is the second year that we have been involved in this very important youth initiative. The one- day forum brings together Year 10 & 11 students from schools in our region to learn about depression, bullying and other factors that impact mental health. They are then able to develop their own school-based initiatives to tackle the issue in its early stages. The event was held at The Cube in Wodonga, with participation from over 150 students representing 14 schools. iii Supporting Regional Sport School Safety Program There is no doubt that physical activity is good for The Caring About Regional Safety (CARS) promotion our personal health, but there is much evidence that is a key part of our Community Support 4BL policy. It also links it with community health as well. General has now been running for 10 years and has grown to involvement with a sporting club, be it as players, incorporate even more schools across our region. officials or spectators, delivers benefits that are more tangible than the euphoria of a team win. Research CARS is a collaborative initiative developed between has shown that it can reduce crime and anti-social WAW and the Victoria Police as a public way of behaviour, strengthen social and cultural inclusion, promoting safety awareness. It also commemorates the create greater community identity, and deliver increased late Snr. Constable Ann Brimblecombe, who dedicated volunteer levels. In many smaller rural communities, her life as a Police Officer to teaching primary-aged sporting clubs are the social heart of the town and are schoolchildren about road and personal safety. often the catalyst for betterment in other areas including The winning entry came from Eliza Connor of Walwa health and educational facilities. Primary School. Her entry was on safe handling of poisons, with a message on personal safety around The WAW Community Support Program assisted many strangers. For her efforts, Eliza won $2000 and the Ann sporting groups across our service area including Brimblecombe Memorial Award for her school; and a football, netball, cricket and golf, to name just a few. ride in a police pursuit car and police boat for herself. Over the past decade, we estimate that we have invested nearly $500,000 in supporting local sporting Latipsoh Day teams. This year we were able to assist 47 sporting clubs, This year was the 15th year for Latipsoh raising funds for with financial support totalling $44,000. our local health services. A total of $100,295 was raised through the WAW Community Fund via a combination Aside from direct financial support, WAW staff also of WAW activities, general and online donations via attended a number of league events including awards the Community Fund’s website and hospital based nights and finals matches. initiatives. On 9 October, the annual Latipsoh Charity Kerferd Oration Golf Day held at the Albury Commercial Golf Resort was WAW was again major sponsor of Beechworth’s annual another outstanding success, with 24 teams taking part. Kerferd Oration. The event is named in honour of the Honorable George Briscoe Kerferd, 10th Premier of Following the conclusion of Latipsoh, WAW distributed Victoria and Member of the Legislative Assembly for cheques ranging in value from $561 up to $84,073 to the Ovens from 1864 until 1886. The Oration was first held 10 participating health services. The total raised since it in 2003 to commemorate the 150th anniversary of began is now $1,423,572. the naming of Beechworth. It is now part of the Public Albury Wodonga Theatre Company Lecture series of La Trobe University. WAW has been a major supporter of the Albury Wodonga This year the Oration was held on 19th July and was delivered Theatre Company since 2008. Each year the AWTC, along by Sydney Ethics Centre executive director, Dr Simon with the youth theatre company, BYTE Sized Productions, Longstaff. Dr Longstaff spoke on what he sees as Australia’s produced many high-quality stage shows that are seen ‘invisible people’ – those unseen by the society in which they by thousands of theatre-goers across the region. This year live because they make us uncomfortable, or because they they have been able to enjoy productions including ‘Allo lack the economic presence to be duly recognised. ‘Allo, Oliver, Shrek and Steele Magnolias. WAW has been the major sponsor of this prestigious The AWTC provides an artistic and creative outlet for many event since 2007. people with thespian aspirations, be it as a hobby or a career.

iv WAW Credit Union Co-Operative Limited

Warm Up Winter Blanket Appeal Customer Benefit Program WAW Credit Union donated 40 woollen blankets to the The WAW Customer Benefit Program (CBP) is a prime annual ABC Regional Radio ‘Warm Up Winter Blanket example of the benefits that a customer-owned financial Appeal’. The blankets were distributed in our region institution can deliver. These benefits are often enshrined through the Foodbank to help those families in need. under the concept of Mutuality. Staff Charitable Contributions Fees and charges are usually an unavoidable part of Throughout the year, WAW staff contributed operating a transaction account, but through our CBP approximately $100 per head to various charities including the Albury Wodonga Community Chest, we are able to deliver rebates to customers based on Carevan, and the ‘Every Home For Christ’ child their average aggregate account balance. We also offer sponsorship program in Bangladesh, through which accounts that provide fee-free transactions each month they help to supply necessary food and education to 11 to help those customers with lower savings and/or loans children in the program. Additionally, on the last Friday balances, as well as fee-free banking entirely for some of each month staff are permitted to wear casual clothes members of the community with special needs. and pay a gold coin that accumulates and is distributed around Christmas time to local charities and/or fund Customer mutuality is an area of the business where raising programs. we focus on the fact that we are owned by the people who bank with us, rather than by external shareholders. During this financial year, the total value of direct fee rebates as part of our CBP was $493,772. Director Election & Annual General Meeting ENVIRONMENTAL RESPONSIBILITY Voting in the 2015 WAW Credit Union Director Election was held from 4th to 18th November. Four candidates As a business, WAW continues to promote the ‘reduce, reuse, recycle, and refuse’ message and staff consciously nominated for the two vacant board positions. As a seek ways to limit our impact on the environment. result of the election, Mr David Iverson was re-elected and Mr Tim Frazer was the other successful candidate. WAW supports this commitment in many ways: Ms Tracey Toohey, who had served on the WAW Board of • Provision of green loans at reduced rates for Directors since 2008, was not re-elected. WAW wishes to environmentally-focussed purchases • Promotion of eStatements as our preferred delivery option acknowledge Tracey for her 7 years of dedicated service • Recycling of all printer cartridges and paper waste to the Credit Union. Ms Ali Pockley, who also nominated, • Reduction in the number of printed copies of the was similarly unsuccessful. WAW Annual Report by directing people to our David and Tim join sitting directors Mr Richard Power, website to read or download Mr Mark Dixen, Dr Dianne McGrath, Dr Rowan O’Hagan • Limiting the mailing of our customer information and Mr Brendan Munk in forming the new Board of WAW newsletter SmartLink to only one copy per postal address, and again making them available online. Credit Union. CUSTOMER MUTALITY The 46th Annual General Meeting of WAW Credit Because we are customer- Union was held at the Wangaratta Performing Arts owned, WAW has a firm Centre on Wednesday 25 November 2014. The AGM commitment to the Agenda included the approval of the Annual Review principles of mutuality. and Financial Statements as well as the Directors’ Customer mutuality means remuneration for the 2016 financial year, along with that we have a clear focus confirming the two Director appointments. on your financial interests Following the AGM, the Board of Directors re-elected Mr rather than making profits for shareholders as the Richard Power as Chair of the Board, Mr David Iverson as Chair major banks must do. of the Audit Committee and Risk Management Committee, Additionally, we take and Mr Mark Dixen as Chair of the Strategy Committee. a proactive position In addition to the Audit Committee, Risk Management in promoting financial Committee and the Strategy Committee, WAW security to account operates with three other Committees – Executive & holders. Remuneration, Credit Risk, and Human Resources. v WAW Credit Union Co-operative Limited Annual Review and Financial Statements ABN 48 087 651 787 Directors’ Report Directorsʼ report (contʼd) The Directors present their report together with the Financial Statements of WAW Credit Union Co-operativeContinuing Limited professional (the ‘Credit Union’) development for the year ended (CPD) 30 June 2016 and the auditor’s report thereon.

DIRECTORSThe Directors have in place a progressive training and development program, thereby ensuring that the TheDirectors names and are details up to of date the Directors with current of the Credittrends Union in the in officefinancial during services the financial market year place. and until The the Directors date of this must report unlesscomplete noted a otherwise minimum are: 60 hours of CPD per triennium. The following table reports on the hours undertaken by each Director for the year ended 30 June 2016. Richard A Power Mark P Dixen FCPA, FTI, FAIM, FAMI, FAICD Grad Dip Ed Studies, DipAg, DipCH, Director CPD Hours to 30/6/16 Occupation: CPA Accountant TC, Cert IV CLM, MAMI R Power Director since 1996 60.75 Occupation: Retired M Dixen 80.50 Director since 2010 D Iverson 60.25 D McGrath 82.50 B Munk 61.75

R OʼHaganMr Richard Power 35.25 Mr Mark Dixen T Frazer [appointed 25/11/15] 26.50 T Toohey [retired 25/11/15David J Iverson] 88.25 Dr Dianne McGrath Dip.Law, MAMI Bec ANU, MCom LTU, PhD CSturt, Occupation: Retired FCPA, MAMI All Directors have achieved in excess of the Credit Unionʼs targeted 60 hours (or the applicable pro rata Director since 2012 Occupation: University Course Director hours) for the triennium 1 July 2013 to 30 June 2016. Director since 2011 During the financial year, the Directors continued a self-assessment process on the ongoing development of a knowledge and skills base required to carry out the Director role and duties. The annual CPD program is structured to address the knowledge and skills required to fulfil the duties of a Director of an

AuthorisedMr David Iverson Deposit-taking Institution. Dr Dianne McGrath

Principal activitiesBrendan Munk Dr Rowan O’Hagan MAMI BAgSci(Hons), MAgSci, MAcc, PhD, The principal activityOccupation: of the Credit Retired Union is to raise funds from the CreditFAICD, Unionʼs MAIA, customersMAMI for the purpose of making Directorloans to since customers. 2011 No significant change in the natureOccupation: of the activi Consultantty has occurred during the year. Director since 2014 Trading results

The profit for the financial year before income tax was $1,684,061 (2015: $1,802,861). Income tax expenseMr Brendan was Munk $551,111 (2015: $528,902). DrMr Rowan Brendan O’Hagan Munk

Review of operationsTimothy S Frazer Tracey L Toohey BEc (Macquarie Uni) Dip Financial Services, BDAV, EBAA, Net loans and advancesOccupation: for the Consultant year have increased by $7,575,455 to $317,FAMI676, 801Dip . Deposits increased Appointedduring the 25 year November by $12 2015,020,880 to $389,449,112. Occupation: Building Designer, Equity during the year has increased by $1,321,966 to $27,040,780. Registered Building Practitioner & Thermal Performance Assessor Dividends Retired 25 November 2015

The Credit Union does not have permanent share capital and has therefore not paid or declared any dividendsMr Timothy Frazerfor the financial year. Ms MsCathy Tracey McGowan Toohey AO

State of affairs All Directors were in office from the beginning of the financial year until the date of this report, unless otherwise indicated. AllIn Directors the opinion are considered of the Directors to be independent there were non-executive no significant Directors. changes in the state of affairs of the Credit Union during the financial year under review. COMPANY SECRETARY The Chief Executive Officer of the Credit Union, Mr Peter K Challis, was appointed Company Secretary of the Credit Union on 21 October 1996 and continued to act in this capacity until he retired on 23 September 2016. Mr Michael A Mack was appointed as Chief Executive Officer and Company Secretary of the Credit Union on 23 September 2016. 5 1 WAW Credit Union Co-Operative Limited 5 an - 1 Income tax 1 1 1 1 1 1 Statements ty has occurred Review Strategic Strategic Planning Planning operative Limited operative - Workshop 1 1 1 1 1 1 1 - ABN 48 087 651 787 802 , 861 ). Financial 1, 801 . $ , 8 8 8 3 6 3 4 3 : 676 , 7 201 5 1 ( 3 Evenings 8 WAW CPD WAW 8 8 8 8 4 8 4 $ program,ensuring thereby that the tofulfil theduties of Directora of to . 780 - - - - 1 2 2 1 684 , 061 , WAW Credit Union Co Union Credit WAW Annual Review and and Review Annual 6 1 449 , 112 . , 040 , 575 , 455 , , 7 Human development $ - - - - assessment process on the ongoing development Resources 1 2 2 1 - $2 7 $3 89 financial services market place. The Directors must to 30/6/1 to to . a self 60.75 80.50 60.25 82.50 61.75 35.25 26.50 88.25 - 4 2 2 2 2 3 1 966 321 , 020 , 880 , - 4 2 2 2 2 4 1 $1, Credit Risk Credit CPD Hours CPD 12 $ 902 ). to 30 June 201 6 . , - - - 8 5 9 4 10 528 $ : 5 ] Strategy - - - 5 5 201 10 10 10 year ended 30 June 201 6 ( taking Institution . year under review. 111 - 25/11/15 - - - 6 3 5 10 10 51 , or for the Risk [retired - - - 4 6 10 10 10 Management Directors have achieved in excess of the Credit Unionʼs targeted 60 hours (or the applicable pro rata - - - 3 3 6 11 11 Director R Power M Dixen D Iverson D McGrath MunkB R OʼHagan T Frazer [appointed 25/11/15] T Toohey Directors are up to date with current trends thein complete a minimum 60 hours of CPD per triennium. The following table reports on the hours undertaken by each Direct During the financial year, the Directors continued of a knowledge and skills base required to carry out the Director role and duties. The annual CPD programis structured toaddress theknowledge skillsand required Authorised Deposit Directorsʼ report (contʼd) Continuing (CPD) professional development TheDirectors place in have progressivea training and All hours) for the trien nium 1 July 201 3 activities Principal The principal activity of the Credit purpose ofmaking loans to customers.No Union significant changein the natureof the activi is to raise funds during from the year. the Credit Unionʼs customers for the Trading results The profit for the financial year before income tax was $ Review of operations Net loans and advances for the year have increased by Dividends The Credit Union does not have permanent share capital and has therefore not or paid declared any dividends for the financial year. affairs of State In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union during the financial expense was $ 5 Equity during the year has increased by Deposits increased during the by year Audit - - - 4 4 7 11 11 - - - - 9 4 12 13 - - - - 9 4 13 13 Executive & Executive Remuneration 9 7 15 16 16 14 13 15 Director Board of Board Meetings 9 7 16 16 16 16 16 16 Director M Dixen R Power D Iverson D McGrath B Munk R O’Hagan T Frazer 25/11/15] [Appointed T Toohey 25/11/15] [Retired A – Reflects the number of meetings the Director was eligible to attend duringyear to attend the A – Reflects was eligible the number of meetings Director B – Number of meetings attended DIRECTORS’ MEETINGS DIRECTORS’ as follows: were each Director by and the number of meetings attended held during the year (including meetings of Committees) number of meetings Directors The

2 WAW Credit Union Co-operative Limited Annual Review and Financial Statements ABN 48 087 651 787 Directors’ Report (cont’d) CONTINUINGDirectorsʼ PROFESSIONAL report (contʼd) DEVELOPMENT (CPD) DIVIDENDS The Credit Union does not have permanent share capital TheContinuing Directors have professionalin place a progressive development training and (CPD) and has therefore not paid or declared any dividends for the development program, thereby ensuring that the Directors are financial year. upThe to date Directors with current have trends in place in the afinancial progressive services training market and development program, thereby ensuring that the Directors are up to date with current trends in the financial services market place. The Directors must STATE OF AFFAIRS place.complete The Directors a minimum must complete 60 hours a minimum of CPD 60per hours triennium. of The following table reports on the hours undertaken CPDby per each triennium. Direct orThe for following the year table ended reports 30 on June the hours2016 . In the opinion of the Directors there were no significant undertaken by each Director for the year ended 30 June 2016. changes in the state of affairs of the Credit Union during the Director CPD Hours to 30/6/1financial6 year under review. DirectorR Power CPD Hours to 30/6/1660.75 EVENTS SUBSEQUENT TO BALANCE DATE R MPower Dixen 60.75 80.50 MD Dixen Iverson 80.50 60.25 Mr Peter K Challis retired as Chief Executive Officer and Company Secretary of the Credit Union on 23 September D DIverson McGrath 60.25 82.50 2016, and Mr Michael A Mack was appointed as Chief B Munk 61.75 D McGrath 82.50 Executive Officer and Company Secretary of the Credit Union R OʼHagan B Munk 61.75 35.25 on 23 September 2016. T Frazer [appointed 25/11/15] 26.50 R O’Hagan 35.25 Other than that noted above, there has not arisen in the T Toohey [retired 25/11/15] 88.25 T Frazer [appointed 25/11/15] 26.50 interval between the end of the financial year and the date of this report any item, transaction or event of a material and T Toohey [retired 25/11/15] 88.25 All Directors have achieved in excess of the Credit Unionʼsunusual targeted nature likely,60 hours in the (oropinion the ofapplicable the Directors, pro to rata affect hours) for the triennium 1 July 2013 to 30 June 2016. significantly the operations of the Credit Union, the results of those operations, or the state of affairs of the Credit Union in All DuringDirectors the have financial achieved year, in excess the Directorsof the Credit continued Union’s a self-assessment process on the ongoing development subsequent financial years. targetedof a knowledge60 hours (or theand applicable skills base pro rata required hours) for to the carry out the Director role and duties. The annual CPD trienniumprogram 1 July is structured2013 to 30 June to address 2016. the knowledge and skills required to fulfil the duties of a Director of an Authorised Deposit-taking Institution. LIKELY DEVELOPMENTS During the financial year, the Directors continued a self- The Credit Union will continue to operate a responsive, values- assessmentPrincipal process activities on the ongoing development of a driven, co-operative financial institution that provides financial knowledge and skills base required to carry out the Director and community benefits to customers and the region in a roleThe and principalduties. The activityannual CPD of theprogram Credit is structured Union is to to raise fundssustainable from manner. the Credit Unionʼs customers for the purpose of making loans to customers. No significant change in the nature of the activity has occurred addressduring the the knowledge year. and skills required to fulfil the duties of Further information about likely developments in the a Director of an Authorised Deposit-taking Institution. operations of the Credit Union and the expected results Trading results of those operations in future financial years has not been PRINCIPAL ACTIVITIES included in this report because disclosure of the information The profit for the financial year before income tax waswould $ 1be,684 likely,061 to result(201 in5 :unreasonable$1,802,861 prejudice). Income to thetax Theexpense principal wasactivity $5 of51 the,111 Credit(201 Union5: $528 is to, 902raise). funds Credit Union. from the Credit Union’s customers for the purpose of making loansReview to customers. of operations No significant change in the nature of the ENVIRONMENTAL REGULATION activity has occurred during the year Net loans and advances for the year have increased by The$7, 575Credit,455 Union’sto $ operations317,676,801 are .not subject to any significant Deposits increased during the year by $12,020,880 to $3environmental89,449,112 .regulations under either Commonwealth or TRADINGEquity duringRESULTS the year has increased by $1,321,966 to $2State7,040 legislation.,780. However, the Board believes that the Credit Union has adequate systems in place for the management The profit for the financial year before income tax was Dividends of its environmental requirements as they apply to the Credit $1,684,061 (2015: $1,802,861). Income tax expense was Union. $551,111The Credit (2015: $528,902).Union does not have permanent share capital and has therefore not paid or declared any dividends for the financial year. DIRECTORS’ BENEFITS REVIEW OF OPERATION State of affairs During or since the end of the financial year, no Director of Net loans and advances for the year have increased by the Credit Union has received or become entitled to receive a benefit (other than a benefit included in the aggregate $7,575,455In the opinion to $317,676,801. of the Directors there were no significant changes in the state of affairs of the Credit Union during the financial year under review. amount of remuneration paid or payable to the Directors as Deposits increased during the year by $12,020,880 to shown in the general purpose financial statements) by reason $389,449,112. of a contract entered into by the Credit Union (or an entity that the Credit Union controlled, or a body corporate that was Equity during the year has increased by $1,321,966 to related to the Credit Union when the contract was made, or $27,040,780. when the Director received, or became entitled to receive, the 5 3 WAW Credit Union Co-operative Limited WAW Credit Union Co-Operative Limited Annual Review and Financial Statements ABN 48 087 651 787 Directors’ Report (cont’d) benefit)Directorsʼ with: report (contʼd) Directors, the Chair of the Board and the individual Board sub- committees. • Continuinga Director, professional development (CPD) • a firm of which a Director is a member, or The Credit Union complies with the Australian Prudential The Directors have in place a progressive training andRegulationdevelopment Authorityprogram, Prudential thereby Standard ensuring that the • Directorsan entity in are which up a toDirector date haswith a substantialcurrent trends financial in the financial services market place. The Directors must CPS 510 Governance and the Prudential Practice Guide PPG completeinterest. a minimum 60 hours of CPD per triennium. The following table reports WAWon the Credit hours Unionundertaken Co-operative Limited by each Director for the year ended 30 June 2016. 511 Remuneration. Annual Review and Financial Statements INDEMNIFICATION AND INSURANCE OF DIRECTORS AND Internal audit: ABN 48 087 651 787 OFFICERSDirector CPD Hours to 30/6/16 In June 2015, the Credit Union reappointed Bob Travers & R Power Directorsʼ declaration60.75 During the year, a premium was paid in respect of a contract Associates to the position of internal auditor for a further two M Dixen 80.50 insuring Directors and Officers of the Credit Union against years. The assessment and associated appointment was made liability.D Iverson The Officers of the Credit Union covered by the 60.25 In the opinion of the Directors of WAWin accordance Credit Union with the Co Consolidated-operative LimitedPrudential (the Standard Credit (CPS) Union): - insuranceD McGrath contract include the Directors, Executive Officers,82.50 231 - Outsourcing. SecretaryB Munk and employees. 1. the financial statements61.75 and notes, set out on pages 6 to 51, are in accordance with the External audit: In accordanceR OʼHagan with normal commercialCorporations practice, Actdisclosure 2001, 35.25of including: theT total Frazer amount [appointed of premium 25/11/15] payable under, and the nature26.50 of In June 2015, the Credit Union appointed Crowe Horwath (a) giving a true and fair view of the Credit Unionʼs financial position as at 30 June 2016 and T Toohey [retired 25/11/15] Albury in the role of external auditor for a further one year. liabilities covered by, the insurance contractof isits prohibited performance by88.25 a for the year ended on that date; and confidentiality clause in the contract. Crowe Horwath Albury has appropriate Lead Audit Partner All Directors have achieved in excess of the Credit Unionʼsrotation targeted policies 60to ensure hours compliance (or the applicable with the requirements pro rata No insurance cover has been provided(b) for complyingthe benefit withof the the Accounting Standards and Corporations Regulations 2001; and hours) for the triennium 1 July 2013 to 30 June 2016. of CPS 510 Governance and CPS 520 Fit and Proper. auditors of the Credit Union. 2. there are reasonable grounds to believe that the Credit Union will be able to pay its debts as and During the financial year, whenthe Directors they become continued due aand self payable.-Inassessment July 2016, Crowe process Horwath on theAlbury ongoing was reappointed development for a PUBLICof a PRUDENTIALknowledge and DISCLOSURE skills base required to carry outfurther the Director one year periodrole and (2016/17). duties. The annual CPD program is structured to address the knowledge and skills required to fulfil the duties of a Director of an In accordanceAuthorised with Deposit the APS-taking 330 Public Institution Disclosure. requirements, AUDITOR’S INDEPENDENCE DECLARATION the Credit Union is to publiclyDated disclose at Wodongacertain information this 28 thin day of September 2016. respectPrincipal of: activities The auditor independence declaration for the year ended 30 June 2016 has been received and can be found on page 5 of • details on the composition of regulatory capital; The principal activity Signed of the in Credit accordance Union iswith to a raise resolution fundsthe financial of from the report.Directors: the Credit Unionʼs customers for the • purposea reconciliation of making between loans the compositionto customers. of its No regulatory significant change in the nature of the activity has occurred during the year. Dated at Wodonga this 28th day of September 2016. capital and its audited financial statements; Signed in accordance with a resolution of the Directors. • Tradingthe full details results of the terms and conditions of its regulatory capital instruments; The profit for the financial year before income tax was $1,684,061 (2015: $1,802,861). Income tax • expensethe quantitative was $ 5and51 ,qualitative111 (201 information5: $528,902 about). its capital adequacy, credit and other risks if advanced Reviewmeasurement of operations approaches are used; and • both qualitative disclosure and quantitative remuneration Net loans and advancesRichard for the A yearPower have- Director increased by Richard$7,575 ,A455 Powerto $ 317,676,801David. David J IversonJ Iverson - Director disclosures for Senior Managers and material risk-takers. Deposits increased duringChair the, Board year of by Directors $12,020,880 to $3Director89,449 ,112. DirectorChair, Audit Committee Equity during the year has increased by $1,321,966 to $27,040,780. These disclosures can be viewed on the Credit Union’s website: Chair, Board of Directors Chair, Audit Committee www.wawcu.com.au> About WAW>Disclosures. Dividends

CORPORATEThe Credit GOVERNANCE Union does not have permanent share capital and has therefore not paid or declared any Thedividends Credit Union for is the committed financial to year. achieving high standards of corporate governance. The Credit Union is directed and State of affairs controlled by its Board of Directors, and through systems of delegationIn the opinion and policies, of the so Directorsas to achieve there its business were no objectives significant changes in the state of affairs of the Credit Union responsiblyduring the and financial in accordance year withunder high review. standards of accountability and integrity. The Board of Directors annually carries out an appraisal process that assesses the performance of and produces areas of improvement for the Board of Directors as a whole, individual 5 4

55 Crowe Horwath Albury ABN 16 673 023 918 Member Crowe Horwath International Audit and Assurance Services 491 Smollett Street Albury NSW 2640 Australia PO Box 500 Albury NSW 2640 Australia Tel 02 6021 1111 Fax 02 6041 1892 www.crowehorwath.com.au

Auditor Independence Declaration under Section 307C of the Corporations Act 2001 to the Directors of WAW Credit Union Co-operative Limited

I declare that, to the best of my knowledge and belief, during the year ended 30 June 2016 there have been no contraventions of:

1) The auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and

2) Any applicable code of professional conduct in relation to the audit.

CROWE HORWATH ALBURY

DAVID MUNDAY Partner

Dated at Melbourne this 28th day of September 2016.

Crowe Horwath Albury is a member of Crowe Horwath International, a Swiss verein. Each member firm of Crowe Horwath is a separate and independent legal entity. Liability limited by a scheme approved under Professional Standards Legislation other than for the acts or omissions of financial services licensees. 5 WAW Credit Union Co-operative Limited WAW Credit Union Co-Operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Statement of Profit or Loss and Other Comprehensive Income ContinuingFor the year professional ended 30 Junedevelopment 2016 (CPD)

The Directors have in place a progressive training and development program,201 thereby6 ensuring201 that5 the Directors are up to date with current trends in the financial servicesNote market $place. The Directors$ must complete a minimum 60 hours of CPD per triennium. The following table reports on the hours undertaken by each Director for the year ended 30 June 2016. Interest revenue 2 18,060,823 18,882,360 Interest expense 2 (8,420,231) (9,764,909) Director CPD Hours to 30/6/16 R Power 60.75 NetM Dixen interest income 80.50 9,640,592 9,117,451 NonD Iverson-interest revenue 60.25 3(a) 2,529,262 2,630,165 OtherD McGrath income 82.50 3(b) 15,283 27,573 B Munk 61.75 OtherR OʼHagan expenses 35.25 4 (9,624,825) (9,101,131) Impairment charge 10 (2,528) (34,641) T Frazer [appointed 25/11/15] 26.50 Fees and commission expense (873,723) (836,556) T Toohey [retired 25/11/15] 88.25 Profit before tax 1,684,061 1,802,861 All Directors have achieved in excess of the Credit Unionʼs targeted 60 hours (or the applicable pro rata hours) for the triennium 1 July 2013 to 30 June 2016. Income tax expense 5 (551,111) (528,902) During the financial year, the Directors continued a self-assessment process on the ongoing development Profitof a knowledgeafter tax and skills base required to carry out the Director role and1,132 duties.,950 The annual1,273,959 CPD program is structured to address the knowledge and skills required to fulfil the duties of a Director of an OtherAuthorised comprehensive Deposit-taking income: Institution. Items that will not be reclassified subsequently to profit or lossPrincipal: activities - - Net gain on revaluation of property, plant and equipment, netThe of principal tax activity of the Credit Union is to raise funds from the Credit 1 Unionʼs89,016 customers for the- purpose of making loans to customers. No significant change in the nature of the activity has occurred during the year. Other comprehensive income for the year, net of tax 189,016 - Total comprehensive income for the year attributable to customersTrading results 1,321,966 1,273,959 The profit for the financial year before income tax was $1,684,061 (2015: $1,802,861). Income tax expense was $551,111 (2015: $528,902).

Review of operations

Net loans and advances for the year have increased by $7,575,455 to $317,676,801. Deposits increased during the year by $12,020,880 to $389,449,112. Equity during the year has increased by $1,321,966 to $27,040,780.

Dividends

The Credit Union does not have permanent share capital and has therefore not paid or declared any dividends for the financial year.

State of affairs

In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union during the financial year under review.

The Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction The Statement of Profit withor Loss the accompanyingand Other Comprehensive notes set out on pagesIncome 10 isto to51. be read in conjunction with the accompanying notes set out on pages 10 to 51. 5 6 9 WAW Credit Union Co-operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Statement of Changes in Equity ContinuingFor the year professional ended 30 Junedevelopment 2016 (CPD)

The Directors have in place a progressive training Lendingand development program, therebyAsset ensuring that the Directors are up to date with current Retainedtrends in the financialRisk servicesGeneral market Revaluationplace. The Directors must complete a minimum 60 hours of CPD Profitsper triennium.Reserve The followingReserve table reports Reserveon the hours undertakenTotal Yearby eachended Direct 30 Juneor for 20the15year ended 30 June$ 2016. $ $ $ $ Opening balance at 1 July 2014 1,222,024 445,239 21,394,876 1,382,716 24,444,855 Director CPD Hours to 30/6/16 ProfitR Power after tax 1,273,95960.75 - - - 1,273,959 OtherM Dixen comprehensive income -80.50 - - - D Iverson 60.25 Total comprehensive income for theD period McGrath 1,273,95982.50 - - - 1,273,959 B Munk 61.75 Transfer to/(from) lending risk R OʼHagan reserve (32,806)35.2532,806 - - - T Frazer [appointed 25/11/15] 26.50 Transfer to general reserve (1,222,024) - 1,222,024 - - T Toohey [retired 25/11/15] 88.25 Closing balance at 30 June 2015 1,241,153 478,045 22,616,900 1,382,716 25,718,814 All Directors have achieved in excess of the Credit Unionʼs targeted 60 hours (or the applicable pro rata Yearhours) ended for the30 Junetriennium 201 61 July 2013 to 30 June 2016. Opening balance at 1 July 2015 1,241,153 478,045 22,616,900 1,382,716 25,718,814 During the financial year, the Directors continued a self-assessment process on the ongoing development Profitof a after knowledge tax and skills base required1,132 to,950 carry out the -Director role -and duties. The- annual1,132 CPD,950 program is structured to address the knowledge and skills required to fulfil the duties of a Director of an OtherAuthorised comprehensive Deposit- takingincome Institution. - - - 189,016 189,016

Principal activities Total comprehensive income for theThe period principal activity of the Credit Union1,132 is,950 to raise funds- from the Credit- Unionʼs189 customers,016 1, 3 for21 ,966 the Transferpurpose to/(from) of making lending loans risk to customers. No significant change in the nature of the activity has occurred reserveduring the year. (8,213) 8,213 - - - TransferTrading to generalresults reserve (1,241,153) - 1,241,153 - - Closing balance at 30 June 2016 1,124,737 486,258 23,858,053 1,571,732 27,040,780 The profit for the financial year before income tax was $1,684,061 (2015: $1,802,861). Income tax expense was $551,111 (2015: $528,902).

Review of operations

Dividends

The Credit Union does not have permanent share capital and has therefore not paid or declared any dividends for the financial year.

State of affairs

In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union during the financial year under review.

The Statement of Changes in Equity is to be read in conjunction with the accompanying notes set out on pages 10 to 51. The Statement of Changes in Equity is to be read in conjunction with the accompanying notes set out on pages 10 to 51. 5 7 10 WAW Credit Union Co-operative Limited WAW Credit Union Co-Operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Statement of Financial Position AsContinuing at 30 June professional 2016 development (CPD)

The Directors have in place a progressive training and development program,201 6thereby ensuring201 that5 the Directors are up to date with current trends in the financial servicesNote market$ place. The Directors$ must ASSETScomplete a minimum 60 hours of CPD per triennium. The following table reports on the hours undertaken by each Director for the year ended 30 June 2016. Cash and cash equivalents 7 93,371,762 87,344,817 Other receivables 8 578,727 443,024 CustomerDirector loans and advances CPD Hours to 30/6/16 9 317,676,801 310,101,346 OtherR Power financial assets 60.75 11 629,912 609,912 Property,M Dixen plant and equipment 80.50 12 8,665,064 8,612,244 IntangibleD Iverson assets 60.25 13 351,304 360,709 IncomeD McGrath tax receivable 82.50 6 111,226 - DeferredB Munk tax assets 61.75 6 388,326 376,651 PrepaymentsR OʼHagan 35.25 125,565 135,960 T Frazer [appointed 25/11/15] 26.50 TOTAL ASSETS 421,898,687 407,984,663 T Toohey [retired 25/11/15] 88.25

AllLIABILITIES Directors have achieved in excess of the Credit Unionʼs targeted 60 hours (or the applicable pro rata hours)Customer for thedeposits triennium 1 July 2013 to 30 June 2016. 14 389,449,112 377,428,232 Accounts payable and other liabilities 15 3,272,657 2,763,384 EmployeeDuring the benefitsfinancial year, the Directors continued a self-assessment16 process1,146,904 on the ongoing development1,099,326 Incomeof a knowledge tax payable and skills base required to carry out the Director6 role and duties.- The annual95,900 CPD Deferredprogram istax structured liabilities to address the knowledge and skills required6 to fulfil the989 duties,234 of a Director879,007 of an Authorised Deposit-taking Institution. TOTAL LIABILITIES Principal activities 394,857,907 382,265,849

TheNET principalASSETS activity of the Credit Union is to raise funds from the Credit27,040 Unionʼs,780 customers25,718,814 for the purpose of making loans to customers. No significant change in the nature of the activity has occurred duringEQUITY the year. Reserves 1(o) 25,916,043 24,477,661 Trading results Retained profits 1,124,737 1,241,153 The profit for the financial year before income tax was $1,684,061 (2015: $1,802,861). Income tax expenseTOTAL EQUITY was $551,111 (2015: $528,902). 27,040,780 25,718,814

Review of operations

Dividends

The Credit Union does not have permanent share capital and has therefore not paid or declared any dividends for the financial year.

State of affairs

In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union during the financial year under review.

The Statement of Financial Position is to be read in conjunction with the accompanying notes set out on pages 10 to 51. The Statement of Financial Position is to be read in conjunction 5 8 with the accompanying notes set out on pages 13 to 54. 11 WAW Credit Union Co-operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Statement of Cash Flows ForContinuing the year professional ended 30 Junedevelopment 2016 (CPD)

The Directors have in place a progressive training and development program,201 6thereby ensuring201 that5 the Directors are up to date with current trends in the financial services market place. The Directors must Note $ $ complete a minimum 60 hours of CPD per triennium. The following table reports on the hours undertaken Cash flows from operating activities by each Director for the year ended 30 June 2016. Interest received 17,997,444 18,863,226 InterestDirector paid CPD Hours to 30/6/16 (8,890,296) (9,704,770) PaymentsR Power to employees and suppliers 60.75 (8,828,325) (9,423,515) ReceiptsM Dixen from other services 80.50 2,456,938 2,536,893 IncomeD Iverson tax paid 60.25 (703,835) (605,140) D McGrath 82.50 2,031,926 1,666,694 NetB Munk(increase)/decrease in loans and advances 61.75 (7,577,983) (9,974,288) NetR OʼHagan increase/(decrease) in deposits 35.25 12,020,880 20,356,323 T Frazer [appointed 25/11/15] 26.50 Net cash from / (used in) operating activities 17(a) 6,474,823 12,048,729 T Toohey [retired 25/11/15] 88.25

AllCash Directors flows fromhave investingachieved inactivities excess of the Credit Unionʼs targeted 60 hours (or the applicable pro rata hours) for the triennium 1 July 2013 to 30 June 2016. Acquisition of other financial assets (20,000) - AcquisitionDuring the financialof property, year, plant the andDirectors equipment continued a self-assessment process(327,916) on the ongoing development(496,785) Acquisitionof a knowledge of intangible and skills assets base required to carry out the Director role and(152,962) duties. The annual(313,302) CPD Proceedsprogram is from structured sale of toplant address and equipment the knowledge and skills required to fulfil the53,000 duties of a Director62,730 of an Authorised Deposit-taking Institution. Net cash from / (used in) investing activities (447,878) (747,357) Principal activities

TheCash principal flows from activity financing of the activities Credit Union is to raise funds from the Credit Unionʼs customers for the purpose of making loans to customers. No significant change in the nature of the activity has occurred duringNet increase/(decrease) the year. in borrowings - -

NetTrading cash resultsfrom / (used in) financing activities - -

NetThe increaseprofit for / the(decrease) financialin year cash before and cash income equivalents tax was $1,684,061 (2016,05:26$,1,945802,861). 11,301,372Income tax expense was $551,111 (2015: $528,902).

ReviewCash and of cash operations equivalents at 1 July 2015 87,344,817 76,043,445

NetCash loans and andcash advances equivalents for the at year30 June have20 increased16 by $7,575,4557 to $31793,,676371,801,762. 87,344,817 Deposits increased during the year by $12,020,880 to $389,449,112. Equity during the year has increased by $1,321,966 to $27,040,780.

Dividends

The Credit Union does not have permanent share capital and has therefore not paid or declared any dividends for the financial year.

State of affairs

In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union during the financial year under review.

The StatementThe Statement of Cashof Cash Flows Flows is toto be be read read in conjunctionin conjunction with thewith accom the accompanyingpanying notes notes set set outout on pagespages 10 13 to to51. 54. 5 9 12 WAW Credit Union Co-operative Limited WAW Credit Union Co-Operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ForContinuing the year professional ended 30 Junedevelopment 2016 (CPD)

1.The DirectorsSignificant have in accounting place a progressive policies training and development program, thereby ensuring that the Directors are up to date with current trends in the financial services market place. The Directors must completeWAW a minimum Credit Union60 hours Co -ofoperative CPD per Limited triennium. (the TheʻCredit following Union ʼ)table is a reportscompany on domiciled the hours in undertaken Australia. by each TheDirectFinancialor for the Statementsyear endedwere 30 Juneauthorised 2016. for issuance by the Directors on 28 September 2016.

(a)DirectorStatement of compliance CPD Hours to 30/6/16 R PowerThe Financial Statements are general purpose60.75 financial statements which have been prepared in M Dixenaccordance with Australian Accounting80.50 Standards adopted by the Australian Accounting D IversonStandards Board (“AASB”) and the Corporations60.25 Act 2001. D McGrath International Financial Reporting Standards82.50 (“IFRS”) form the basis of Australian Accounting B MunkStandards adopted by the AASB, being Australian61.75 equivalents to IFRS (“AIFRS”). R OʼHagan 35.25 T FrazerNot [appointed-for-profit 25/11/15]status 26.50 Under AIFRS, there are requirements that apply specifically to not-for-profit entities that are not T Toohey [retired 25/11/15] 88.25 consistent with International Financial Reporting Standards (IFRS) requirements. The Credit Union has analysed its purpose, objectives and operating philosophy and determined that it does All Directorsnot havehave profitachieved generation in excess as of a theprime Credit objective. Unionʼs Consequentlytargeted 60 hours where (or appropriatethe applicable the pro Credit rata hours) forUnion the trienhasnium elected 1 July to apply2013 tooptio 30 nsJune and 201 exemptions6. within AIFRS that are applicable to not-for- profit entities. During the financial year, the Directors continued a self-assessment process on the ongoing development of a knowledge and skills base required to carry out the Director role and duties. The annual CPD (b)programBasis is structured of preparation to address the knowledge and skills required to fulfil the duties of a Director of an Authorised Deposit-taking Institution. The financial statements are presented in Australian dollars.

PrincipalThe activities financial statements have been prepared on the basis of historical costs except that the following assets and liabilities (if applicable) are stated at their fair value: land and buildings. The principal activity of the Credit Union is to raise funds from the Credit Unionʼs customers for the purpose Theof making preparation loans ofto customers.financial statements No significant in conformity change in withthe natureAustralian of the Accounting activity has Standards occurred during therequires year. management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The Tradingestimates results and associated assumptions are based on historical experiences and various other factors that are believed to be reasonable under the circumstances, the results of which form the The profitbasis for ofthe making financial the judgementsyear before about income carrying tax was values $1 ,of684 assets,061 (and201 5liabilities: $1,802 that,861 are). Income not readily tax expenseapparent was $551 from,111 other(2015 sources.: $528,902 Actua). l results may differ from these estimates. These accounting policies have been consistently applied by the Credit Union. Review of operations The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to Net loansaccounting and advances estimates for the are year recognised have increased in the per by iod$7, 575in which,455 tothe $ 3estimate17,676,801 is revised. if the revision Depositsaffects increased only duringthat period, the year or byin the$12 period,020,880 of tothe $3 revision89,449, 112and. future periods if the revision affects Equity duringboth current the year and has future increased periods. by $1,321,966 to $27,040,780.

DividendsJudgements made by management in the application of Australian Accounting Standards that have significant effect on the financial statements and estimates with a significant risk of material The Creditadjustment Union does in the not nex havet year permanent are discussed share in Ncapitalote 1(n and). has therefore not paid or declared any dividends for the financial year.

State(c) ofCash affairs and cash equivalents Cash and cash equivalents comprise cash balances, deposits at call and other short-term In the opiniondeposits of thewith Directors Approved there Deposit were-taking no significant Institutions changes that can in the be statereadily of convertedaffairs of the into Credit cash .UnionThis during theincludes financial term year deposits under review.(with an original maturity of less than 3 months), negotiable certificates of deposits and floating rate note securities (FRNS). Negotiable certificates of deposits and floating rate note securities are held via the Austraclear system with the Reserve Bank of Australia, to enable conversion to cash. Cash and cash equivalents are recognised at the gross value of the outstanding balance. Bank overdrafts that are repayable on demand and form an integral part of the Credit Unionʼs cash management are included as a component of cash and cash equivalents for the purpose of the Statement of Cash Flows. 5 10 13 WAW Credit Union Co-operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ContinuingFor the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

DirectorAll loans and advances are reviewedCPD Hours and gradedto 30/6/1 according6 to the anticipated level of credit risk. R PowerThe classification adopted is described below:60.75 M Dixen Non-accrual loans - are loans and advances80.50 where the recovery of all interest and principal is D Iversonconsidered to be reasonably doubtful, and60.25 hence impairment losses are recognised. D McGrath 82.50 B MunkRestructured loans - arise when the 61.75borrower is granted a concession due to continuing difficulties in meeting the original terms, and the revised terms are not comparable to new R OʼHagan 35.25 facilities. Loans with revised terms are included in non-accrual loans when impairment losses T Frazerare [appointed likely. 25/11/15] 26.50 T Toohey [retired 25/11/15] 88.25 Assets acquired through the enforcement of security - are assets acquired in full or partial All Directorssettlement have achievedof a loan orin excesssimilar facilityof the throughCredit Unionʼs the enforcement targeted 60 of hourssecurity (or arrangements. the applicable pro rata hours) for the triennium 1 July 2013 to 30 June 2016. Past-due loans - are loans where payments of principal and/or interest are at least 90 days in During thearrears. financial Full year, recovery the Directors of both continuedprincipal anda self interest-assessment is expected. process If onan theimpairment ongoing lossdevelopment is likely, of a knowledgethe loan isand included skills inbase non required-accrual loans.to carry out the Director role and duties. The annual CPD program is structured to address the knowledge and skills required to fulfil the duties of a Director of an AuthorisedSpecific Deposit provision-taking Institution. Losses for impaired loans are recognised when there is objective evidence that the impairment Principalof aactivities loan has occurred. Impairment losses are calculated on individual loans in arrears. The amount provided for impaired loans is determined by Management and the Board to recognise The principalthe probability activity of of the loan Credit amounts Union not is tobeing raise collected funds from in theaccordance Credit Unionʼs with terms customers of the for loan the purpose agreemenof makingt. loans to customers. No significant change in the nature of the activity has occurred during the year. Collective provision TradingAPRA results Prudential Standards require a minimum provision to be maintained, based on specific percentages of the loan balance which are contingent upon the length of time the repayments The profitare for in arrears.the financial year before income tax was $1,684,061 (2015: $1,802,861). Income tax expense was $551,111 (2015: $528,902).

Review(e) Full of operations time equivalent employees The Credit Union employed 62 (2015: 62) full-time equivalent staff at the end of the financial Net loans and advances for the year have increased by $7,575,455 to $317,676,801. year. Deposits increased during the year by $12,020,880 to $389,449,112. Equity during the year has increased by $1,321,966 to $27,040,780.

Dividends(f) Impairment of assets The carrying amounts of the Credit Unionʼs assets, other than deferred tax assets are reviewed The Creditat eachUnion Statement does not ofhave Financial permanent Position sharedate capital to determine and has thereforewhether therenot paid is anyor declaredindication any of dividendsimpairment. for the financial If any year.such indication exists, the assetʼs recoverable amount is estimated. State ofAn affairs impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognised in the In the opinionStatement of the of Directors Profit or thereLoss wereand Otherno significant Comprehensive changes Incomein the stateunless of affairsthe asset of the has Credit previously Union during thebeen financial revalued, year in under which review. case the impairment loss is recognised as a reversal to the extent of that previous revaluation with any excess recognised through the Statement of Profit or Loss and Other Comprehensive Income.

5 11 14 WAW Credit Union Co-operative Limited WAW Credit Union Co-Operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ForContinuing the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD) 1. Significant accounting policies (contʼd) The Directors have in place a progressive training and development program, thereby ensuring that the (f)DirectorsImpairment are up to date of assetswith current (contʼd) trends in the financial services market place. The Directors must complete a minimum 60 hours of CPD per triennium. The following table reports on the hours undertaken by each CalculationDirector for ofthe recoverableyear ended amount 30 June 2016. The recoverable amount of the Credit Unionʼs investments in held to maturity securities and receivables carried at amortised cost is calculated as the present value of estimated future cash Director CPD Hours to 30/6/16 flows, discounted at the original effective interest rate (i.e. the effective interest rate computed at R Power initial recognition of these financial assets).60.75 Receivables with a short duration are not discounted. M Dixen 80.50 D IversonThe recoverable amount of other assets60.25 is the greater of their net selling price and value in use. D McGrathIn assessing value in use, the estimated82.50 future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money B Munk and the risks specific to the asset. For an61.75 asset that does not generate largely independent cash R OʼHaganinflows, the recoverable amount is determined35.25 for the cash generating unit to which the asset T Frazerbelongs. [appointed 25/11/15] 26.50 T Toohey [retired 25/11/15] 88.25 Reversals of impairment An impairment loss in respect of a held to maturity security or receivable carried at amortised All Directors have achieved in excess of the Credit Unionʼs targeted 60 hours (or the applicable pro rata cost is reversed if the subsequent increase in recoverable amount can be related objectively to hours) for the triennium 1 July 2013 to 30 June 2016. an event occurring after the impairment loss was recognised. During the financial year, the Directors continued a self-assessment process on the ongoing development An impairment loss is reversed only to the extent that the assetʼs carrying amount does not of a knowledge and skills base required to carry out the Director role and duties. The annual CPD exceed the carrying amount that would have been determined, net of depreciation or program is structured to address the knowledge and skills required to fulfil the duties of a Director of an amortisation, if no impairment loss had been recognised. Authorised Deposit-taking Institution.

Principal(g) Property, activities plant and equipment & intangible assets

The principal(i) Owned activity assets of the Credit Union is to raise funds from the Credit Unionʼs customers for the purpose of makingItems loansof land to and customers. buildings Nohave significant been valued changeat fair in thevalue natureunder of AASB the activi 116 tyProperty, has occurred Plant during the year.& Equipment and AASB 13 Fair Value Measurement. Refer to Notes 1(n), 12 and 27 in regards to further information on fair value measurement. Trading results Where parts of an item of property, plant and equipment have different useful lives, they The profit forare the accounted financial foryear as beforeseparate income items oftax property, was $1 plant,684, 061and equipment.(2015: $1,802,861). Income tax expense was $551,111 (2015: $528,902). (ii) Leased assets Review of operationsLeases in terms of which the Credit Union assumes substantially all the risks and rewards of ownership are classified as finance leases. The owner-occupied property acquired by Net loans andway advances of finance for the lease year is have stated increased at an amountby $7,575 equal,455 toto the$31 7lower,676 ,801of its. fair value and the Deposits increasedpresent during value the of yearthe minimum by $12,020 lease,880 paymentsto $389,449 at ,inception112. of the lease, less accumulated Equity during depreciationthe year has increased (see below) by $1, and321 impairment,966 to $27losses,040,780 (refer. Note 1(f)) Property held under operating leases that would otherwise meet the definition of investment property may be Dividends classified as investment property on a property-by-property basis.

The Credit(iii) UnionSubsequent does not assets have permanent share capital and has therefore not paid or declared any dividends for theThe financial Credit Unionyear. recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred; if it is State of affairsprobable that the future economic benefits embodied within the item will flow to the Credit Union, and the cost of the item can be measured reliably. All other costs are recognised in In the opinion theof theStatement Directors of thereProfit were or noLoss significant and Other changes Comprehensive in the state ofIncome affairs as of thean Creditexpense Union as during the financialincurred. year under review.

5 12 15 WAW Credit Union Co-operative Limited AnnualWAW Credit Review Union and FinancialCo-operativeStatements Limited Annual Review and FinancialABN 48 087Statements 651 787 ABN 48 087 651 787

Directorsʼ report (contʼd) Notes to the Financial Statements ContinuingFor the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

All Directors haveLand achieved is not depreciated. in excess of the Credit Unionʼs targeted 60 hours (or the applicable pro rata hours) for the triennium 1 July 2013 to 30 June 2016. (v) Intangible assets During the financialItems ofyear, computer the Directors software continued which area selfnot- integralassessment to the process computer on hardwarethe ongoing owned development by the of a knowledgeCredit and Union skills are base classified required as tointangible carry out assets. the Director role and duties. The annual CPD program is structured to address the knowledge and skills required to fulfil the duties of a Director of an Authorised DepositComputer-taking software Institution is. amortised over the expected useful life of the software. The maximum estimated useful lives in the current and comparative periods are as follows: Principal activities• Computer software 3 years The principal activity of the Credit Union is to raise funds from the Credit Unionʼs customers for the (h)purposeEmployee of making loansentitlements to customers. No significant change in the nature of the activity has occurred during the year. Long term service benefits TradingThe results Credit Unionʼs net obligation in respect of long term service benefits is the amount of future benefits that employees have earned in return for their service in the current and prior periods. The obligation is calculated using expected future increases in wage and salary rates including The profit for the financial year before income tax was $1,684,061 (2015: $1,802,861). Income tax related on-costs and expected settlement dates, and is discounted using the rates attached to expense was $551,111 (2015: $528,902). high quality corporate bonds at the balance date which have maturity dates approximating to the terms of the Credit Unionʼs obligations. Review of operations

Net loansShort and termadvances benefits for the year have increased by $7,575,455 to $317,676,801. DepositsLiabilities increased for during employee the year benefits by $ 12for,020 wages,,880 salariesto $389 ,and449 ,annual112. leave expected to be taken within Equity during12 months the yearrepresent has increased present byobligations $1,321,966 resultingto $27 from,040, 780employees. services provided to reporting date, calculated at undiscounted amounts based on remuneration wages and salary rates that Dividendsthe Credit Union expects to pay as at reporting date including related on-costs, such as, workers compensation insurance and payroll tax. Annual leave expected to be taken after 12 months is The Creditdiscounted Union does back notto presenthave permanent value using share the rates capital attached and has to hightherefore quality not corporate paid or bonddeclared rates any at dividendsbalance for the date.financial year.

State of affairs

In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union during the financial year under review.

5 16 13 WAW Credit Union Co-operative Limited WAW Credit Union Co-Operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ForContinuing the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

The profitDeferred for the tax financial is provided year usingbefore the income Statement tax ofwas Fi nancial$1,684 ,P061osition(201liability5: $1, 802method,,861). providingIncome taxfor expensetemporary was $551 ,111differences(2015: $528between,902). the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary Reviewdifferences of operations are not provided for: goodwill not deductible for tax purposes. The amount of deferred tax provided is based on the expected manner of realisation or Net loans and advances for the year have increased by $7,575,455 to $317,676,801. settlement of the carrying amount of assets and liabilities, using tax rates enacted or Deposits increased during the year by $12,020,880 to $389,449,112. substantively enacted at the Statement of Financial Position date. Equity during the year has increased by $1,321,966 to $27,040,780. A deferred tax asset is recognised only to the extent it is probable that future taxable profits will Dividendsbe available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefits will be realised. The Credit Union does not have permanent share capital and has therefore not paid or declared any dividends for the financial year. (l) Goods and Services Tax State of affairs Revenues, expenses and assets are recognised net of the goods and services tax (GST), except where the amount of the GST incurred is not recoverable from the Australian Taxation Office In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union (ATO). In these circumstances, the GST is recognised as part of the cost of accounting of the during the financial year under review. asset or as part of the expense.

Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the Statement of Financial Position. 5 14 17 WAW Credit Union Co-operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ContinuingFor the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

The1. DirectorsSignificant have in accounting place a progressive policies training (contʼd) and development program, thereby ensuring that the Directors are up to date with current trends in the financial services market place. The Directors must complete(l) Goods a minimum and 60Services hours of Tax CPD (contʼd) per triennium. The following table reports on the hours undertaken by each CashflowsDirector for are the includedyear ended on the30 JuneStatement 2016. of Cashflows on a gross basis. The GST components of cashflows from investing and financing activities that are recoverable from, or payable to, the DirectorATO are classified as operating CPDcash Hoursflows. to 30/6/16 R Power 60.75 As a financial institution, the Credit Union is input taxed on all income except for income from M Dixencommissions and some fees. An input taxed80.50 supply is not subject to GST collection, and similarly D Iversonthe GST paid on related or apportioned60.25 purchases cannot be recovered. As some income is D McGrathcharged GST, the GST on purchases 82.50are generally recovered on a proportionate basis. In addition, certain prescribed purchases are subject to reduced input tax credits (RITC), of which B Munk 61.75 75% of the GST paid is recoverable. R OʼHagan 35.25 (m)T FrazerProvisions [appointed 25/11/15] 26.50 T TooheyA provision[retired 25/11/15 is recognised] in the Statement88.25 of Financial Position when the Credit Union has a present legal or constructive obligation as a result of a past event, and it is probable that an All Directorsoutflow have of achievedeconomic in benefits excess ofwill the be Credit required Unionʼs to settle targeted the 60obligation. hours (or If thethe applicableeffect is material,pro rata hours) forprovisions the trien niumare determined 1 July 2013 byto 30dis countingJune 201 6the. expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks During thespecific financial to the year, liability. the Directors continued a self-assessment process on the ongoing development of(n) a knowledgeAccounting and skillsestimates base requiredand judgements to carry out the Director role and duties. The annual CPD program is structured to address the knowledge and skills required to fulfil the duties of a Director of an AuthorisedManagement Deposit-taking has Institutionbeen involved. in the development, selection and disclosure of the Credit Unionʼs critical accounting policies and estimates and the application of these policies and Principalestimates. activities In particular, information about areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in The principalthe financial activity statements of the Credit are described Union is toin the raise following funds fromnote s the: Credit Unionʼs customers for the purpose of making loans to customers. No significant change in the nature of the activity has occurred during the• year.Note 1(d) and Note 10 – Impairment of loans and advances; and • Note 12 - Fair value assumptions used for land and buildings. Trading results Determination of fair values A number of the Credit Unionʼs accounting policies and disclosures require the determination of The profit for the financial year before income tax was $1,684,061 (2015: $1,802,861). Income tax expensefair was value, $551 ,111for both(201 5financial: $528,902 and). non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. Where applicable, further information about the assumptions made in determining fair values is Review of operations disclosed in the notes specific to that asset or liability. Refer to Note 1(r) for further information regarding fair value measurement. Net loans and advances for the year have increased by $7,575,455 to $317,676,801. Deposits increased during the year by $12,020,880 to $389,449,112. Property, plant and equipment Equity during the year has increased by $1,321,966 to $27,040,780. The fair value of land and buildings is based on market values. The market value of property is the estimated amount for which a property could be exchanged on the date of valuation between Dividendsa willing buyer and a willing seller in an armʼs length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. The Credit Union does not have permanent share capital and has therefore not paid or declared any dividendsAn for external, the financial independent year. valuation company, having appropriate recognised professional qualifications and recent experience in the location and category of property being valued, values State ofthe affairs Credit Unionʼs land and buildings. In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union during(o) theReserves financial year under review. General reserve Annually a transfer is performed between retained profits and the general reserve. The general reserve represents the accumulation of prior yearsʼ trading profits of the Credit Union after transfers to reserves. The general reserve as at 30 June 2016 is $23,858,053 (2015: $22,616,900). 5 15 18 WAW Credit Union Co-operative Limited WAW Credit Union Co-Operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ForContinuing the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

All DirectorsShareholder have achieved share redemption in excess ofreserve the Credit Unionʼs targeted 60 hours (or the applicable pro rata hours) forThe the generaltriennium reserve 1 July 201includes3 to 30 amountsJune 201 6allocated. for the purpose of a shareholder share redemption balance per Compliance Note 2001.084. The balance at 30 June 2016 of $328,509 During the(201 financial5: $32 7year,,469 )the represents Directors thecontinued amounta selfof redeemable-assessment preference process on sharesthe ongoing redeemed development by the of a knowledgeCredit Union and sinceskills 1base July required1999. The to law carry requires out the that Director the redemption role and of duties. the shares The beannual made CPD out programof is profits. structured Since to theaddress value theof theknowledge shares has and been skills paid required to membersto fulfil thein accordance duties of a withDirector the termsof an Authorisedand Deposit conditions-taking of theInstitution share .issue, the account represents the amount of profits appropriated to the account. The 2016 allocation amounts to $1,040 (2015: $1,208). Principal activities (p) Deposits The principal activity of the Credit Union is to raise funds from the Credit Unionʼs customers for the purpose Basisof making for determination loans to customers. No significant change in the nature of the activity has occurred during theDeposits year. at call and term investments are held at amortised cost. Interest payable Trading Interest results on deposits is calculated on the daily balance and posted to the accounts periodically, or on maturity or redemption of the term deposit. Interest on deposits is brought to account on an The profit accrual for the basis financial in accordance year before with theincome interest tax rate was terms $1,684 and,061 conditions(2015: of$ 1,each802 ,deposit861). Income and term tax expense deposit was $5 account51,111 ( as201 varied5: $528 from,902 time). to time. The amount of the accrual is shown as part of accounts payable and other liabilities. Review of operations

Net(q) loansFinancial and advances instruments for the year have increased by $7,575,455 to $317,676,801. DepositsRecognition increased during & initial the measurementyear by $12,020,880 to $389,449,112. Equity duringFinancial the yearinstruments, has increased incorporating by $1,321 financial,966 to assets $27,040 and,780 financial. liabilities, are recognised when the Credit Union becomes a party to the contractual provisions of the instrument. Trade date Dividendsaccounting is adopted for financial assets that are delivered within timeframes established by marketplace convention. The Credit Union does not have permanent share capital and has therefore not paid or declared any dividendsFinancial for the financialinstruments year. are initially measured at fair value plus transactions costs where the instrument is not classified as at fair value through profit or loss. Transaction costs related to State ofinstruments affairs classified as at fair value through profit or loss are expensed to profit or loss immediately. Financial instruments are classified and measured as set out below. In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union during theDerecognition financial year under review. Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expire.

5 16 19 WAW Credit Union Co-operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ContinuingFor the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

Net loansDerivative and advances instruments for the year have increased by $7,575,455 to $317,676,801. DepositsDerivative increased instruments during the yearare measuredby $12,020 at,880 fairto value. $389 ,Gains449,112 and. losses arising from changes in fair Equity duringvalue theare yeartaken has to increasedthe Statement by $1, of321Profit,966 orto Loss $27 and,040,Other780. Comprehensive Income unless they are designated as hedges. Dividends Fair value The CreditFair Union value doesis determined not have permanentbased on sharecurrent capital bid prices and hasfor thereforeall quoted not investments. paid or declared Valuation any dividendstechniques for the financial are applied year. to determine the fair value for all unlisted securities, including recent armʼs length transactions, reference to similar instruments and option pricing models. State of affairs Impairment In the opinionAt each of thereporting Directors date, there the wereCredit no Union significant assesses changes whether in the there state isof objectiveaffairs of theevidence Credit thatUnion a during thefinancial financial instrument year under has review. been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in the Statement of Profit or Loss and Other Comprehensive Income. Refer to Note 1(d) and Note 1(f) for future details with regards to impairment accounting policy.

5 17 20 WAW Credit Union Co-operative Limited WAW Credit Union Co-Operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ForContinuing the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

1.The DirectorsSignificant have in accounting place a progressive policies training (contʼd) and development program, thereby ensuring that the Directors are up to date with current trends in the financial services market place. The Directors must (r)completeFair a minimum value measurement 60 hours of CPD per triennium. The following table reports on the hours undertaken by each WhenDirect oran forasset the yearor liability, ended financial30 June or201 non6. -financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset Directoror paid to transfer a liability CPDin an Hours orderlyto 30/6/1transaction6 between market participants at the measurement date, and assumes that the transaction will take place either in the principal market R Power 60.75 or, in the absence of a principal market, in the most advantageous market. M Dixen 80.50 D IversonFair value is measured using the assumptions60.25 that market participants would use when pricing D McGraththe asset or liability, assuming they act 82.50in their economic best interest. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques are used B Munk 61.75 that are appropriate in the circumstances and for which sufficient data is available to measure fair R OʼHaganvalue, maximising the use of relevant observable35.25 inputs and minimising the use of unobservable T Frazerinputs. [appointed 25/11/15] 26.50 T Toohey [retired 25/11/15] 88.25 Assets and liabilities measured at fair value are classified into three levels, using a fair value All Directorshierarchy have achievedthat reflects in excess the significance of the Credit of Unionʼs the inputs targeted used 60 hoursin making (or the the applicable measurements. pro rata hours) forClassifications the triennium are1 July reviewed 2013 to each 30 June reporting 2016. date and transfers between levels are determined based on a reassessment of the lowest level input that is significant to the fair value During themeasurement. financial year, the Directors continued a self-assessment process on the ongoing development of a knowledge and skills base required to carry out the Director role and duties. The annual CPD programFor is structuredrecurring andto address non-recurring the knowledge fair value and measurements, skills required externalto fulfil the valuers duties may of a be Director used whenof an Authorisedinternal Deposit expertise-taking Institutionis either not. available or when the valuation is deemed to be significant and material. External valuers are selected based on market knowledge, experience and reputation. PrincipalWhere activities there is a significant change in fair value of an asset or liability from one period to another, an analysis is undertaken which includes a verification of the major inputs applied in the latest The principalvaluation activity and a of comparison, the Credit Unionwhere isapplicable, to raise fundswith external from the sources Credit of Unionʼs data. customers for the purpose of making loans to customers. No significant change in the nature of the activity has occurred during theFair year. value measurement hierarchy The company is required to classify all assets and liabilities, measured at fair value, using a three level hierarchy, based on the lowest level of input that is significant to the entire fair value Tradingmeasurement, results being: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date; Level 2: Inputs other than quoted The profitprices for theincluded financial within year Level before 1 that income are observabletax was $ 1for,684 the,061 asset(201 or5: liability,$1,802, 861either). Income directly taxor expenseindirectly; was $551 and,111 Level(2015 3:: $ Unobservable528,902). inputs for the asset or liability. Considerable judgement is required to determine what is significant to fair value and therefore which category the asset or Reviewliability of operations is placed in can be subjective. The fair value of assets and liabilities classified as level 3 is determined by the use of valuation models. These include discounted cash flow analysis or the Net loansuse and of advancesobservable for inputs the year that have require increased significant by $adjustments7,575,455 to based $317 ,on676 unobservable,801. inputs. Deposits increased during the year by $12,020,880 to $389,449,112. Equity during the year has increased by $1,321,966 to $27,040,780. (s) New accounting standards and interpretations not yet mandatory Dividends The following standards have been identified as ones which may impact the Credit Union in the period of initial application. They are available for early adoption, but have not been applied by The Credit Union does not have permanent share capital and has therefore not paid or declared any the Credit Union in these financial statements: dividends for the financial year. • AASB 9 Financial Instruments replaces the existing guidance in AASB 139 Financial State of affairsInstruments: Recognition and Measurement. AASB 9 includes revised guidance on the classification and measurement of financial instruments, including a new expected credit In the opinionloss of themodel Directors for calculating there were impairno significantment on changes financial in assets,the state and of affairsthe new of thegeneral Credit hedgeUnion during the financialaccounting year underrequirements. review. It also carries forward the guidance on recognition and derecognition of financial instruments from AASB 139. AASB 9 is effective for annual reporting periods beginning on or after 1 January 2018, with early adoption permitted. The Credit Union does not expect the changes to AASB 9 to have a material effect on the financial statements other than the move to an expected loss model for impairment which may result in increases to provisions. 5 18 21 WAW Credit Union Co-operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd)

ContinuingNotes to the professional Financial Sdevelopmenttatements (CPD) For the year ended 30 June 2016 (contʼd) The Directors have in place a progressive training and development program, thereby ensuring that the Directors1. Significant are up to date accounting with current policies trends (contʼd)in the financial services market place. The Directors must complete a minimum 60 hours of CPD per triennium. The following table reports on the hours undertaken by(s) each NewDirect accountingor for the year standards ended 30 June and 201 interpretations6. not yet mandatory (contʼd) • AASB 15 Revenue from Contracts with Customers establishes a comprehensive framework Director for determining whether, howCPD much Hours andto when 30/6/1 revenue6 is recognised. It replaces most of the R Power existing standards and interpretations60.75 relating to revenue recognition including AASB 118 Revenue. The standard shifts the focus from the transaction level to a contract-based M Dixen approach. Recognition is determined80.50 based on what the customer expects to be entitled to, D Iverson while measurement encompasses estimation60.25 by the Credit Union of the amount expected to D McGrath be entitled for performing under the82.50 contract. It is effective for annual reporting periods B Munk commencing 1 January 2018, with61.75 early adoption permitted. The Credit Union does not expect the changes to revenue recognition to have a material effect on the financial R OʼHagan statements when AASB 15 is first adopted.35.25 T Frazer [appointed 25/11/15] 26.50 T Toohey• [retiredAASB 25/11/15 16 Leases] replaces AASB 11788.25 Leases and some lease related interpretations and is applicable for reporting periods beginning on or after 1st January 2019. AASB 16 requires all All Directors leaseshave achieved to be accounted in excess forof the'on -Creditbalance Unionʼs sheet' targeted by lessees, 60 hours other (or than the short applicable term andpro ratalow hours) for thevalue trien niumasset 1 leases, July 201 provides3 to 30 Junenew 201guidance6. on the application of the definition of lease and on sale and lease back accounting and requires new and different disclosures about leases. During the financialThe Credit year, Union the Directors is yet to continuedundertakea a self det-ailedassessment assessment process of AASB on the 16 ongoing however, development based on of a knowledgepreliminary and skills assessments, base required the tostandard carry out is notthe expectedDirector roleto have and aduties. material The impact annual on CPD the program is structuredtransactions to addressand balances the knowledge recognised and in skills the requiredfinancial tostatements fulfil the duties when ofit ais Directorfirst adopted of an Authorised Depositsince existing-taking Institution operating. leases are minimal and expected to remain so. The Credit Unionʼs preliminary assessment does indicate that the likely impact on the transactions and balances Principal activitiesrecognised will be an increase in property, plant and equipment and a corresponding increase in liabilities. The principal activity of the Credit Union is to raise funds from the Credit Unionʼs customers for the purpose of making loans to customers. No significant change in the nature of the activity has occurred during the year.

Trading results

The profit for the financial year before income tax was $1,684,061 (2015: $1,802,861). Income tax expense was $551,111 (2015: $528,902).

Review of operations

Dividends

The Credit Union does not have permanent share capital and has therefore not paid or declared any dividends for the financial year.

State of affairs

In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union during the financial year under review.

5 19 22 WAW Credit Union Co-operative Limited WAW Credit Union Co-Operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ForContinuing the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

Interest Revenue DirectorLoans and advances - customersCPD Hours to 30/6/16 15,654,007 16,443,481 R PowerInvestment securities 60.75 2,406,816 2,438,879 M Dixen 80.50 D Iverson 60.25 18,060,823 18,882,360 D McGrath 82.50 Interest Expense B MunkDeposits - customers 61.75 (8,401,865) (9,746,380) R OʼHaganShort -term borrowings 35.25 (18,366) (18,529) T Frazer [appointed 25/11/15] 26.50 T Toohey [retired 25/11/15] 88.25 (8,420,231) (9,764,909)

3.All DirectorsOther have revenue achieved & otherin excess income of the Credit Unionʼs targeted 60 hours (or the applicable pro rata hours) for the triennium 1 July 2013 to 30 June 2016.

a)During theNon financial-Interest year, Revenue the Directors continued a self-assessment process on the ongoing development of a knowledge and skills base required to carry out the Director role and duties. The annual CPD programDividends is structured to address the knowledge and skills required to fulfil the98,392 duties of a Director97,464 of an Authorised Deposit-taking Institution. Fees and Commissions Principal• Loan activities fee income 333,883 353,127 • Other fee income 1,323,902 1,309,017 The principal activity of the Credit Union is to raise funds from the Credit Unionʼs customers for the • Commissions 584,312 645,893 purpose of making loans to customers. No significant change in the nature of the activity has occurred during the year. Rental received 169,788 165,971 Trading results Bad debts recovered 2,846 1,131 The profit for the financial year before income tax was $1,684,061 (2015: $1,802,861). Income tax expenseOther was revenue$551,111 (2015: $528,902). 16,139 57,562

ReviewTotal of operationsnon-interest revenue 2,529,262 2,630,165 Net loans and advances for the year have increased by $7,575,455 to $317,676,801. b) Other Income Deposits increased during the year by $12,020,880 to $389,449,112. Equity during the year has increased by $1,321,966 to $27,040,780. Gain on sale of property, plant & equipment 15,283 27,573 Dividends Total other income 15,283 27,573 The Credit Union does not have permanent share capital and has therefore not paid or declared any dividends for the financial year.

State of affairs

In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union during the financial year under review.

5 20 23 WAW Credit Union Co-operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ContinuingFor the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

Amortisation Director CPD Hours to 30/6/16 • Leasehold improvements 59,597 59,597 R Power 60.75 • Intangible assets – Computer software 162,367 82,224 M Dixen 80.50 D IversonDepreciation 60.25 D McGrath• Office furniture, Plant and equipment,82.50 Computer B Munk hardware and Motor vehicles 61.75 251,438 235,810 R OʼHagan• Buildings 35.25 159,510 160,852 T Frazer [appointed 25/11/15] 26.50 T TooheyGeneral[retired and 25/11/15 administration] 88.25 3,368,463 3,182,240

All DirectorsPersonnel have achievedcosts in excess of the Credit Unionʼs targeted 60 hours (or the applicable pro rata hours) for• theWages trien niumand salaries 1 July 2013 to 30 June 2016. 3,951,522 3,881,450 • Other associated personnel expenses 352,908 325,517 During the• financialContributions year, tothe defined Directors contribution continued a self-assessment process on the ongoing development of a knowledgesuperannuation and skills plansbase required to carry out the Director role and626,363 duties. The annual514,316 CPD program• is Astructurednnual leave to address the knowledge and skills required to fulfil the36 1duties,405 of a Director299,031 of an Authorised Deposit-taking Institution. • Long service leave 62,423 95,029 Principal activities Rental on operating leases 268,829 265,065 The principal activity of the Credit Union is to raise funds from the Credit Unionʼs customers for the purposeTotal of making other expensesloans to customers. No significant change in the nature9,624,825 of the activity has9,101,131 occurred during the year. 5. Income tax Trading results

The profitProfit for beforethe financial tax year before income tax was $1,684,061 (2011,684,05: $1,61802,861). Income1,802,861 tax expense was $551,111 (2015: $528,902). Prima facie income tax expense calculated at 30% Reviewon of net operations profit 505,218 540,858

Net loansIncrease/(Decrease) and advances for thein incomeyear have tax increased due to: by $7,575,455 to $317,676,801. Deposits increasedNon-deductible during theexpenses year by $12,020,880 to $389,449,112. 1,608 1,854 Equity duringImputation the year creditshas increased by $1,321,966 to $27,040,780. (29,518) (29,239) Under/(over) provision for income tax in prior year - - DividendsOther differences in tax treatment 73,803 15,429

The CreditIncome Union tax does expense not have permanent share capital and has therefore551,111 not paid or declared528,902 any dividends for the financial year. Current tax expense 496,709 548,375 State ofDeferred affairs tax expense 54,402 (19,473) Prior year adjustment - - In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union during theIncome financial tax yearexpense under review. 551,111 528,902

5 21 24 WAW Credit Union Co-operative Limited WAW Credit Union Co-Operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ForContinuing the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

6.The DirectorsTaxation have balances in place a progressive training and development program, thereby ensuring that the Directors are up to date with current trends in the financial services market place. The Directors must completeDeferred a minimum tax assets60 hours and of liabilities CPD per are triennium. attributable The to following the following: table reports on the hours undertaken by each Director for the year ended 30 June 2016. Assets Liabilities Net 2016 2015 2016 2015 2016 2015 Director CPD Hours to 30/6/16 $ $ $ $ $ $ R Power 60.75 Debtors 12,586 13,459 - - 12,586 13,459 M Dixen Prepayments - 80.50 - 5,700 4,581 (5,700) (4,581) D IversonInvestments - 60.25 - 4,835 4,835 (4,835) (4,835) D McGrathProperty, Plant 82.50 B Munk& Equipment, & 61.75 R OʼHaganIntangibles (1) - 35.25 - 978,699 869,591 (978,699) (869,591) T FrazerAccrued [appointed Expenses 25/11/15] 31,183 26.5029,661 - - 31,183 29,661 T TooheyEmployee[retired 25/11/15Benefits ] 333,169 88.25319,904 - - 333,169 319,904 Lease Incentives 11,388 13,627 - - 11,388 13,627 All Directors have achieved in excess3 88of, 326the Credit376,651 Unionʼs targeted989,234 60 hours879,007 (or the(600,908) applicable(502,356) pro rata hours)(1) forThe the Credit triennium Unionʼs 1 July land 201 and3 to buildings 30 June 201includes6. property that is exempt from Capital Gains Tax (CGT). As such a deferred tax liability in relation to the revaluation has only been recognised on During thethe financial properties year, that the are Directorssubject tocontinued CGT. a self-assessment process on the ongoing development of a knowledge and skills base required to carry out the Director role and duties. The annual CPD programIncome is structured tax payable to address/ (receivable the knowledge) and skills required to fulfil the duties of a Director of an AuthorisedThe Deposit current- takingtax receivable Institutionfor. the Credit Union of $111,226 (2015: $95,900 payable) represents the amount of income taxes receivable or payable in respect of current and prior periods. Principal activities 2016 2015 The principal activity of the Credit Union is to raise funds from the Credit $ Unionʼs customers$ for the purpose of making loans to customers. No significant change in the nature of the activity has occurred Income tax payable / (receivable) (111,226) 95,900 during the year.

TradingMovement results in taxation provision Balance at beginning of year 95,900 152,663 The profitCurrent for the yearʼs financial income year tax beforeexpense income on profit tax before was tax$1,684,061 (2015496,709: $1,802,861). Income548,375 tax expenseIncome was $5 tax51, 111paid( 201– current5: $528 year,902). (607,935) (452,475) Income tax paid – prior year (95,900) (152,663) ReviewBalance of operations at end of year (111,226) 95,900 Net loans and advances for the year have increased by $7,575,455 to $317,676,801. Deposits7. Cash increased and duringcash equivalentsthe year by $12,020,880 to $389,449,112. Equity duringCash theon handyear hasand increasedat bank by $1,321,966 to $27,040,780. 3,313,507 4,189,142 Deposits at call 100,000 2,500,000 DividendsTerm deposits 7,000,000 24,000,000 Negotiable certificate of deposits 72,958,255 56,655,675 The CreditFloating Union rate does note not securities have permanent share capital and has therefore10,000,000 not paid or declared any- dividends for the financial year. 93,371,762 87,344,817

State ofRemaining affairs maturity analysis Not longer than 3 months 82,371,762 75,344,817 In the opinionLonger of than the 3Directors and not therelonger were than no 12 significant months changes in the state1,000,000 of affairs of the Credit12,000,000 Union during theLonger financialthan year 12 months under review. and not longer than 5 years(2) 10,000,000 - 93,371,762 87,344,817 (2) The Credit Union holds floating rate note securities that have a formal maturity beyond 12 months. While the Credit Union intends to hold these securities until maturity, they are held via the Austraclear system with the Reserve Bank of Australia and can be readily converted to cash. 5 22 25 WAW Credit Union Co-operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ContinuingFor the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

During theOverdrafts financial- year,customers the Directors continued a self-assessment process6,837,292 on the ongoing development7,563,813 of a knowledgeTerm loans and- customersskills base required to carry out the Director role310,881,463 and duties. The 302,582,395annual CPD programGross is structured loans and to addressadvances the– customersknowledge and skills required to fulfil317,718,755 the duties of a Director310,146,208 of an AuthorisedProvision Deposit for-taking impairment Institution. (41,954) (44,862)

PrincipalNet activities loans and advances 317,676,801 310,101,346

The principalMaturity activity analysis of the Credit Union is to raise funds from the Credit Unionʼs customers for the purposeOverdrafts of making loans to customers. No significant change in the nature6,837,292 of the activity has7,563,813 occurred during theNot year. longer than 3 months 3,314,273 3,193,028 Longer than 3 and not longer than 12 months 9,534,069 9,129,728 TradingLonger results than 1 and not longer than 5 years 48,934,451 46,191,166 Longer than 5 years 249,098,670 244,068,473 317,718,755 310,146,208 The profit for the financial year before income tax was $1,684,061 (2015: $1,802,861). Income tax expense was $551,111 (2015: $528,902). Security held against loans ReviewSecured of operations by mortgage over residential property 292,802,668 285,088,668 Secured by mortgage over commercial property 20,052,965 21,728,990 Net loansTotal and loans advances secured for theby realyear estate have increased by $7,575,455 to $31312,855,6337,676,801. 306,817,658 Deposits increased during the year by $12,020,880 to $389,449,112. Equity duringSecured the byyear funds has increased by $1,321,966 to $27,040,780. 1,873,816 639,766 Partly secured by goods mortgage 1,874,675 2,377,831 DividendsFully unsecured 1,114,631 310,953 317,718,755 310,146,208 The Credit Union does not have permanent share capital and has therefore not paid or declared any dividendsIt isfor not the practicable financial year. to value all collateral as at the balance date due to the variety of assets and condition. A breakdown of the quality of the real estate mortgage security on a portfolio basis is State ofas affairs follows:

In the opinionLoan to of V thealue Directors Ratio of there80% orwere less no significant changes in the state272,067,049 of affairs of the 2Credit67,102 Union,880 during theLoan financial to Value year R underatio of review.more than 80% but mortgage insured 40,788,584 39,714,778 Loan to Value Ratio of more than 80% not mortgage insured - - 312,855,633 306,817,658

5 23 26 WAW Credit Union Co-operative Limited WAW Credit Union Co-Operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ForContinuing the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

9.The DirectorsLoans have and in advances place a progressive(contʼd) training and development program, thereby ensuring that the Directors are up to date with current trends in the financial services market place. The Directors must completeConcentration a minimum 60 of hours risk of CPD per triennium. The following table reports on the hours undertaken by each Director for the year ended 30 June 2016. Significant individual exposures DirectorThe loan portfolio of the Credit CPDUnion Hours does tonot 30/6/1 include6 any loans or advances which represents R Power10% or more of capital. 60.75 M DixenGeographical concentrations 80.50 D IversonThe Credit Union has an exposure to groupings60.25 of individual loans which concentrate risk and D McGrathcreate exposure to the geographical areas82.50 of North Eastern Victoria and Southern New South B MunkWales. 61.75 R OʼHagan 35.25 2016 2015 T Frazer [appointed 25/11/15] 26.50 $ $ T TooheyThe[retired geographical 25/11/15 segment] details are below:88.25 - Victoria 223,218,209 217,470,307 All Directors- New have South achieved Wales in excess of the Credit Unionʼs targeted 60 hours84,488,030 (or the applicable83,564,768 pro rata hours) for- Otherthe triennium 1 July 2013 to 30 June 2016. 10,012,516 9,111,133 317,718,755 310,146,208 During the financial year, the Directors continued a self-assessment process on the ongoing development of a knowledge and skills base required to carry out the Director role and duties. The annual CPD 10.programImpairment is structured ofto addressloans and the advancesknowledge and skills required to fulfil the duties of a Director of an AuthorisedTotal Deposit provision-taking comprises Institution .of: Collective provisions 2,333 5,954 PrincipalAdditional activities specific provisions 39,621 38,908 Total provision 41,954 44,862 The principal activity of the Credit Union is to raise funds from the Credit Unionʼs customers for the purposeMovement of making inloans the toprovision customers. for impairmentNo significant– change in the nature of the activity has occurred during thecollective year. provision Balance at beginning of year 5,954 16,071 TradingExpensed results during the year 1,815 (4,267) Bad debts written off from provision (5,436) (5,850) The profitBalance for the at endfinancial of year year before income tax was $1,684,061 (2015: 2,333$1,802,861). Income5,954 tax expense was $551,111 (2015: $528,902). Movement in the provision for impairment – Reviewspecific of operationsprovision Balance at beginning of year 38,908 - Net loansExpensed and advances during for the the year year have increased by $7,575,455 to $317,676,801713. 38,908 DepositsBad increased debts written during off the from year provision by $12,020,880 to $389,449,112. - - Equity duringBalance the at year end has of yearincreased by $1,321,966 to $27,040,780. 39,621 38,908

DividendsImpairment charge comprises of: Collective provision 1,815 (4,267) The CreditSpecific Union provision does not have permanent share capital and has therefore not713 paid or declared38,908 any dividendsBad for debts the financial recognised year. directly to profit or loss - - Total bad debts expense 2,528 34,641 State of affairs

In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union during the financial year under review.

5 24 27 WAW Credit Union Co-operative Limited AnnualWAW Credit Review Union and FinancialCo-operativeStatements Limited Annual Review and FinancialABN 48 087Statements 651 787 ABN 48 087 651 787

Directorsʼ report (contʼd) Notes to the Financial Statements ContinuingFor the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

The10. DirectorsImpairment have in ofplace loans a progressive and advances training(contʼd) and development program, thereby ensuring that the Directors are up to date with current trends in the financial services market201 place.6 The Directors2015 must complete a minimum 60 hours of CPD per triennium. The following table reports$ on the hours undertaken$ by each AgeingDirector analysis for the year of loansended and 30 June advances 2016. past due

DirectorLoans and advances past dueCPD and Hoursnot impairedto 30/6/16 Up to 30 days 3,354,708 2,391,828 R Power 60.75 More than 30 days, but less than 90 days 642,470 822,697 M DixenMore than 90 days, but less than 180 days80.50 69,922 70,698 D IversonMore than 180 days, but less than 270 days60.25 - - D McGrathMore than 270 days, but less than 365 days82.50 157,332 - More than 365 days - - B Munk 61.75 R OʼHaganOver limit credit facilities less than 14 days35.25 5,140 12,529 T Frazer [appointed 25/11/15] 26.50 4,229,572 3,297,752 T Toohey [retired 25/11/15] 88.25 Loans and advances past due and impaired All DirectorsUp to have 30 days achieved in excess of the Credit Unionʼs targeted 60 hours (or the- applicable pro rata- hours) forMore the thantrien nium30 days, 1 July but 201 less3 tothan 30 90June days 2016. - - More than 90 days, but less than 180 days 1,494 3,438 During theMore financial than 180 year, days, the butDirectors less than continued 270 daysa self-assessment process on the ongoing- development- of a knowledgeMore than and 270 skills days, base but less required than 365to carrydays out the Director role and duties.- The annual2,038 CPD programMore is structuredthan 365 to days address the knowledge and skills required to fulfil the198,104 duties of a Director194,542 of an Authorised Deposit-taking Institution. Over limit credit facilities more than 14 days 2,492 6,448 Principal activities 202,090 206,466

The principalSecurity activity analysis of the of Creditloans and Union advances is to raise past funds due from the Credit Unionʼs customers for the purpose of making loans to customers. No significant change in the nature of the activity has occurred during theLoans year. and advances past due and not impaired Secured by mortgage over real estate 4,146,586 3,218,609 TradingSecured results by funds - - Partly secured by goods mortgage 72,370 62,897 The profitFully for unsecured the financial year before income tax was $1,684,061 (2015:10,616$1,802,861). Income16,246 tax expense was $551,111 (2015: $528,902). 4,229,572 3,297,752

ReviewLoans of operations and advances past due and impaired Secured by mortgage over real estate 198,104 194,542 Net loansSecured and advances by funds for the year have increased by $7,575,455 to $317,676,801.- - DepositsPartly increased secured during by goods the year mortgage by $12,020,880 to $389,449,112. - 3,438 Equity duringFully unsecuredthe year has increased by $1,321,966 to $27,040,780. 3,986 8,486 202,090 206,466 Dividends Loans restructured The CreditDuring Union the doesyear, notsome have loans permanent that were share previously capital past and due has or therefore impaired, not have paidbeen or declaredrestructured any dividendsby for the the Credit financial Union. year.

State ofLoans affairs restructured during the financial year 403,704 1,692,889 Balance at the end of the financial year 405,429 440,641 In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union during theAs financial at the end year of under30 June review. 2016, the Credit Union had one restructured loan with a balance of $405,429 (2015 $440,641).

5 28 25 WAW Credit Union Co-operative Limited WAW Credit Union Co-Operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ForContinuing the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

10.The DirectorsImpairment have in ofplace loans a progressive and advances training(contʼd) and development program, thereby ensuring that the Directors are up to date with current trends in the financial services market201 place.6 The Directors2015 must complete a minimum 60 hours of CPD per triennium. The following table reports$ on the hours undertaken$ by each AssetsDirector acquired for the year through ended enforcement30 June 2016 of. security During the year, the Credit Union acquired assets via enforcement of security. Director CPD Hours to 30/6/16 Opening balance of enforcement security 194,542 - R Power Real estate acquired through enforcement60.75 of security - 194,542 M DixenExpenses 80.50 3,562 D IversonSpecific provision for impairment 60.25 (39,621) (38,908) D McGrathBalance at the end of the financial year 82.50 158,483 155,634 B Munk 61.75 R OʼHagan 35.25 During the 2015 year the Credit Union acquired one residential property via enforcement of the T Frazer [appointed 25/11/15] 26.50 security. The Credit Union plans to sell the property and has placed a specific provision against T Tooheythe[retired transaction. 25/11/15 ] 88.25

11.All DirectorsOther have financial achieved assets in excess of the Credit Unionʼs targeted 60 hours (or the applicable pro rata hours) for the triennium 1 July 2013 to 30 June 2016.

During theUnlisted financial shares year, – theShares Directors in Cuscal continued Limiteda self– at- assessmentcost (a) process on586,454 the ongoing development586,454 of a knowledgeOther investments and skills – baseShares required in TransAction to carry Solutionsout the Director role and duties. The annual CPD programPty is structuredLtd – at cost to (b)address the knowledge and skills required to fulfil the2 3,458duties of a Director23,458 of an Authorised Other Deposit investments-taking Institution– at cost . 20,000 - 629,912 609,912 Principal activities (a) Cuscal Limited The principal activity of the Credit Union is to raise funds from the Credit Unionʼs customers for the purpose Theof making shareholding loans toin customers.Cuscal Limited No significantis measured change at cost in asthe its nature fair value of the could activi notty behas measured occurred during thereliably. year. This company was created to supply services to the shareholder Authorised Deposit- taking Institutions and does not have an independent business focus. These shares are held to Tradingenable results the Credit Union to receive essential banking services – refer to Note 20. The shares are not able to be traded and are not redeemable. The profit for the financial year before income tax was $1,684,061 (2015: $1,802,861). Income tax expenseThe was f inancial$551,111 statements(2015: $528of, 902Cuscal). Limited record net tangible asset backing of these shares exceeding their cost value. Based on the net assets of Cuscal Limited, any fair value Reviewdetermination of operations of these shares is likely to be greater than their cost value, but due to the absence of a ready market and restrictions on the ability to transfer the shares, a market value is not able Net loansto andbe determined advances for readily the yearand havethey areincreased therefore by carried$7,575 ,at455 costto $value317,.676,801. Deposits increased during the year by $12,020,880 to $389,449,112. Equity duringThe Credit the year Union has is increased not intending by $1, to 321dispose,966 toof $2these7,040 shares,780..

(b)DividendsTransAction Solutions Pty Ltd

The CreditThe Union shareholding does not in haveTrans permanentAction Solutions sharePty capital Ltd is and meas hasured therefore at cost notas itspaid fair or value declared could anynot dividendsbe for measured the financial reliably. year. This company was created to supply information technology services to like-minded business State of affairs operators and shareholder Authorised Deposit-taking Institutions. In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union The Credit Union is not intending to dispose of these shares. during the financial year under review.

5 26 29 WAW Credit Union Co-operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ForContinuing the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

During the financial year, the Directors continued a self-assessment process on811,484 the ongoing development777,949 of a knowledge and skills base required to carry out the Director role and duties. The annual CPD programLeasehold is structured improvements to address the knowledge and skills required to fulfil the duties of a Director of an AuthorisedAt cost Deposit-taking Institution. 497,515 497,515 Accumulated amortisation (249,002) (189,405) Principal activities 248,513 308,110 The principal activity of the Credit Union is to raise funds from the Credit Unionʼs customers for the purposeCarrying of making amount loans ofto total customers. property, No plant significant and equipment change in the nature8,665,064 of the activity has8,612,244 occurred during the year. Valuations Trading results The freehold land and/or buildings at Beechworth, Chiltern, Corryong, Myrtleford, Lavington, The profitTallangatta, for the financial Wangaratta year beforeand Wodonga income taxwere was independently $1,684,061 (201valued5: $ 1,in802 June,861 ).20Income16 by thetax expenseindependent was $551,111 firm(201 Taylor5: $ 528Byrne,902Valuers). & Property Consultants Albury NSW, Certified Practising Valuers, on the basis of and in accordance with Australian Accounting Standards AASB 13 Fair ReviewValue of operations Measurement and AASB 116 Property, Plant & Equipment. These valuations were adopted by the Credit Union as at 30 June 2016. Net loans and advances for the year have increased by $7,575,455 to $317,676,801. DepositsThe increased Credit Union during has the ayear set policyby $12 for,020 regular,880 to valuation $389,449 of,112 freehold. land and buildings at least once Equity duringevery thethree year financial has increased years. In by the $1, opinion321,966 of toDirectors, $27,040 ,there780. have been no significant changes to fair value since the previous independent valuations or purchase date. Refer to Note 1(g) and DividendsNote 27 for further information on fair value measurement.

The CreditThe Union next independent does not have valuation permanentis scheduled share capitalto be completed and has thereforeby 30 June not 201 paid9. or declared any dividends for the financial year.

State of affairs

In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union during the financial year under review.

5 27 30 28 WAW Credit Union Co-operative Limited Annual Review and Financial Statements ABN 48 087 651 787

Notes to the Financial Statements for the year ended 30 June 2016 (contʼd)

12. Property, plant and equipment (contʼd)

b) Reconciliations

Reconciliations of the carrying amounts for each class of property, plant and equipment are set out below:

Land Buildings Plant and equipment Leasehold Total improvements $ $ $ $ $

Balance at 1 July 2014 1,418,300 6,246,768 574,101 367,707 8,606,876 Additions - 25,169 476,016 - 501,185 Revaluations - - - - - Transfers - (3,200) (1,200) - (4,400) Disposals - - (35,157) - (35,157) Depreciation - (160,852) (235,811) - (396,663) Amortisation - - - (59,597) (59,597) Balance at 30 June 2015 1,418,300 6,107,885 777,949 308,110 8,612,244

Balance at 1 July 2015 1,418,300 6,107,885 777,949 308,110 8,612,244 Additions - 5,225 322,691 - 327,916 Revaluations 170,500 62,667 - - 233,167 Transfers (100,000) 100,000 - - - Disposals - - (37,718) - (37,718) Depreciation - (159,510) (251,438) - (410,948) Amortisation - - - (59,597) (59,597) Balance at 30 June 2016 1,488,800 6,116,267 811,484 248,513 8,665,064

31 WAW Credit Union Co-operative Limited Annual Review and Financial Statements ABN 48 087 651 787 WAW Credit Union Co-operative Limited Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ContinuingFor the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

At cost – computer software 1,102,143 967,853 DirectorAccumulated amortisation CPD Hours to 30/6/16 (750,839) (607,144) R Power 60.75 351,304 360,709 M DixenReconciliations 80.50 D Iverson 60.25 Reconciliations of the carrying amounts for each D McGrath 82.50 class of intangible assets are set out below: B Munk 61.75 R OʼHaganComputer software & licences 35.25 T Frazer [appointed 25/11/15] 26.50 T TooheyBalance[retired at 25/11/15 beginning] of the year 88.25 360,709 129,631 Acquisitions 152,962 308,902 Transfers from property, plant & equipment - 4,400 All DirectorsAmortisation have achieved in excess of the Credit Unionʼs targeted 60 hours(162,367) (or the applicable(82,224) pro rata hours) for the triennium 1 July 2013 to 30 June 2016. Balance at end of the year 351,304 360,709 During the financial year, the Directors continued a self-assessment process on the ongoing development of a knowledge and skills base required to carry out the Director role and duties. The annual CPD program14. Customer is structured d epositsto address the knowledge and skills required to fulfil the duties of a Director of an Authorised Deposit-taking Institution. Deposits at call 171,784,712 148,580,081 PrincipalTerm activities deposits 217,664,400 228,848,151 389,449,112 377,428,232 The principal activity of the Credit Union is to raise funds from the Credit Unionʼs customers for the purposeRemaining of making loansmaturity to customers. analysis No significant change in the nature of the activity has occurred during theAt year.call 171,784,712 148,580,081 Not longer than 3 months 106,310,331 119,702,006 TradingLonger results than 3 and not longer than 12 months 103,179,930 99,911,106 Longer than 1 and not longer than 5 years 8,174,139 9,235,039 The profit for the financial year before income tax was $1,684,061 (389,449,1122015: $1,802,861).377,428,232Income tax expense was $551,111 (2015: $528,902). Concentration of deposits Review of operations Geographical concentrations Net loansThe and Credit advances Union for operates the year in have the geographicincreased by areas $7,575 of ,North455 to Eastern $317,676 Victoria,801. and Southern New DepositsSouth increased Wales during and thecustomer year bydeposits $12,020 at,880 balanceto $389 date,449 were,112. principally received from customers Equity duringemployed the year in these has increasedareas. by $1,321,966 to $27,040,780.

DividendsThe geographical segment details are below: Victoria 276,286,482 251,697,561 The Credit UnionNew South does Wales not have permanent share capital and has therefore103,740,523 not paid or 111,006,767declared any dividends for the financial year. Other 9,422,107 14,723,904 State of affairs 389,449,112 377,428,232

In the opinionSignificant of the individualDirectors there customer were nodeposits significant changes in the state of affairs of the Credit Union during theAs financial at 30 Juneyear under2016 ,review. the Credit Unionʼs deposit portfolio did not have any deposit which represented 5% or more of total liabilities (2015: $nil).

5 32 29 WAW Credit Union Co-operative Limited WAW Credit Union Co-Operative Limited Annual Review and Financial Statements ABN 48 087 651 787 WAWWAW Credit Credit Union Union Co Co--operativeoperative Limited Limited AnnualAnnual Review Review and and Financial FinancialStatementsStatements ABNABN 48 48 087 087 651 651 787 787 Directorsʼ report (contʼd) NotesNotes toto thethe FFinancialinancial SStatementstatements ForForContinuing thethe yearyear professional endedended 3030 June Junedevelopment 20120166(contʼd)(contʼd) (CPD)

The Directors have in place a progressive training and development program,2012016 6thereby ensuring20152015 that the Directors are up to date with current trends in the financial services market$$ place. The Directors$$ must 15.15.completeAccountsAccounts a minimum payablepayable 60 hours andand of CPD otherother per liabilitiesliabilities triennium. The following table reports on the hours undertaken by each Director for the year ended 30 June 2016.

AccruedAccrued interest interest payablepayable 1,827,171,827,1788 2,297,2422,297,242 DirectorSundrySundry creditors creditors,,accrualsaccrualsandand customer customerCPD Hours clearing clearingto 30/6/16 R Power accountsaccounts 60.75 1,445,4791,445,479 466,142466,142 M Dixen 80.50 3,272,6573,272,657 2,763,3842,763,384 D Iverson 60.25 16.16.D McGrathEmployeeEmployee benefits benefits 82.50 B Munk CurrentCurrent 61.75 R OʼHaganSalariesSalaries andand wageswages accrued accrued 35.25 36,34236,342 32,98132,981 T FrazerLiabilityLiability [appointed for for long long 25/11/15] service service leaveleave 26.50 498,819498,819 473,505473,505 T TooheyLiabilityLiability[retired for for 25/11/15annual annual leave leave] 88.25 422,176422,176 426,737426,737 957,337957,337 933,223933,223 NonNon--currentcurrent All Directors have achieved in excess of the Credit Unionʼs targeted 60 hours (or the applicable pro rata hours) forLiabilityLiability the trien for for niumlong long service 1service July 201 leaveleave3 to 30 June 2016. 189,567189,567 166,103166,103 1,146,9041,146,904 1,099,3261,099,326 During the financial year, the Directors continued a self-assessment process on the ongoing development of a knowledge Movements Movements and ininskills long long base service service required leaveleave toprovision provision carry out the Director role and duties. The annual CPD programOpening Openingis structured balancebalance to address atat beginning beginning the knowledge ofof yearyear and skills required to fulfil the639,608639,608 duties of a Director582,664582,664 of an AuthorisedExpensedExpensed Deposit during -duringtaking the theInstitution yearyear . 62,42362,423 95,02995,029 LongLong service serviceleaveleavetakentaken (13,645)(13,645) (38,085)(38,085) Principal BalanceBalance activities atat end end ofof year year 688,386688,386 639,608639,608

The principalMovementsMovements activity in in ofannual annual the Credit leave leave Unionprovision provision is to raise funds from the Credit Unionʼs customers for the purposeOpening Openingof making balancebalance loans attoat beginningbeginningcustomers. ofof No yearyear significant change in the nature 426,737426,737of the activity has 431,318431,318occurred during theExpensedExpensed year. during during the the yearyear 361,405361,405 299,031299,031 AnnualAnnualleaveleavetakentaken (365,966)(365,966) (303,612)(303,612) Trading BalanceBalance results atat end end ofof year year 422,176422,176 426,737426,737

The profit for the financial year before income tax was $1,684,061 (2015: $1,802,861). Income tax expense was $551,111 (2015: $528,902).

Review of operations

Dividends

The Credit Union does not have permanent share capital and has therefore not paid or declared any dividends for the financial year.

State of affairs

In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union during the financial year under review.

5 30 3333 WAW Credit Union Co-operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ContinuingFor the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

(a) Cash flow from operating activities Director CPD Hours to 30/6/16 R Power 60.75 Profit after income tax 1,132,950 1,273,959 M Dixen 80.50 D IversonNon cash flows in operating surplus/(deficit):60.25 D McGrath(Gain)/Loss on sale of non current assets82.50 (15,283) (27,573) B MunkDepreciation on property, plant & equipment61.75 410,947 396,663 R OʼHaganAmortisation on leasehold improvements35.25 59,597 59,597 T FrazerAmortisation [appointed 25/11/15]on intangible assets 26.50 162,367 82,224 T TooheyImpairment[retired 25/11/15 charge ] 88.25 2,528 34,641 Provision for employee entitlements 44,217 52,363 All Directors have achieved in excess of the Credit Unionʼs targeted 60 hours (or the applicable pro rata hours) forChanges the trien innium assets 1 July and 201 liabilities:3 to 30 June 2016. (Increase)/Decrease in other receivables (135,702) (112,406) During the(Increase)/Decrease financial year, the inDirectors deferred continued tax asseta self-assessment process (11,675)on the ongoing development(19,530) of a knowledgeIncrease/ and(Decrease skills )basein other required assets to carry out the Director role and10,39 duties.6 The annual26,202 CPD programIncrease/(Decrease) is structured to address in accounts the knowledge payable and & skills other required to fulfil the duties of a Director of an Authorisedliabilities Deposit-taking Institution. 509,273 (12,214) Increase/(Decrease) in salaries & wages accrued 3,361 (30,524) PrincipalIncrease/ activitiesDecrease in income tax payable (207,126) (56,763) Increase/(Decrease) in deferred tax liability 66,076 55 The principal activity of the Credit Union is to raise funds from the Credit Unionʼs customers for the purpose of making loans to customers. No significant change in the nature of the activity has occurred during theNet year. cash from revenue activities 2,031,926 1,666,694

TradingAdd/(deduct) results non revenue operations Increase in loan and advances (7,577,983) (9,974,288) The profitIncrease for the in financialdeposits andyear short before term income borrowings tax was $1,684,061 (20112,020,8805: $1,802,861). 20,356,323Income tax expense was $551,111 (2015: $528,902). 6,474,823 12,048,729

Review(b) Cash of operations flows presented on a net basis

Net loansCash and flowsadvances arising for fromthe year the followinghave increased activities by are$7,575 presented,455 to $on31 a7 ,676net ,basis801. in the Statement of DepositsCash increased Flows: during the year by $12,020,880 to $389,449,112. Equity during(i) the yearcustomer has increaseddeposits by to $1, and321 ,966withdrawalsto $27,040 from,780 . deposit accounts and short term borrowings; Dividends(ii) borrowings and repayments on loans, advances and other receivables; and (iii) movements in investment securities. The Credit Union does not have permanent share capital and has therefore not paid or declared any dividends(c) Bank for the overdraft financial facility year.

State ofThe affairs Credit Union has access to an overdraft facility provided by Cuscal Limited to the extent of $2,500,000 (2015: $2,500,000). The facility is subject to funds being available from Cuscal In the opinionLimited of at the the Directors time of theredrawdown. were noThis significant facility is changes secured inby the a fixedstate andof affairs floating of thecharge Creditover Union the during theassets financial and yearundertakings under review. of the Credit Union and incurs interest at 4.75% (2015: 5.00%). As at 30 June 2016, $1,090,789 of the facility was utilised (2015: facility was unused).

5 34 31 WAW Credit Union Co-operative Limited WAW Credit Union Co-Operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ForContinuing the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

During theAggregate financial leaseyear, thereceivable Directors (non continued-cancellable)a self-assessment process on the ongoing development of a knowledge and skills base required to carry out the Director role and duties. The annual CPD programN isot structuredlater than oneto address year the knowledge and skills required to fulfil the191,153 duties of a Director186,066 of an AuthorisedLater Deposit than 1-taking and not Institution later than. 5 years 193,761 384,913 Aggregate lease expenditure contracted for at balance date 384,914 570,979 Principal activities The Credit Union receives rental income from tenants who lease a portion of the land and The principalbuildings activity owned of at the Beechworth Credit Union and isNorthpoint to raise fundsTower , from Lavington the Credit. Unionʼs customers for the purpose of making loans to customers. No significant change in the nature of the activity has occurred during theRevenue year. commitments are stated inclusive of Goods and Services Tax. 19. Superannuation Trading results During the year the Credit Union contributed on behalf of its employees to 33 superannuation The profitfunds for underthe financial the Super year Choice before legislation. income tax was $1,684,061 (2015: $1,802,861). Income tax expense was $551,111 (2015: $528,902). Under the Superannuation Guarantee (Administration) Act 1995 the Credit Union is required to Reviewprovide of operations minimum levels of superannuation support for employees. This obligation is legally enforceable. In accordance with the Act, employees received 9.50% (2015: 9.50%) paid directly Net loansto andthe aboveadvances schemes. for the year have increased by $7,575,455 to $317,676,801. Deposits increased during the year by $12,020,880 to $389,449,112. Equity duringThe fundsthe year are has defined increased contribution by $1,321 ,966fundsto $2where7,040 ,benefits780. are based on the amount of contributions made to the fund plus an allocated share of the earnings of the fund. Dividends 20. Outsourcing arrangements

The CreditThe Union Credit does Union not hashave an permanent outsourcing share arrangement capital and with has Cuscaltherefore Limited not paid(and or withdeclared National any dividendsAustralia for the financialBank through year. a strategic partnership with Cuscal Limited) for the provision of corporate banking services and facilities, settlement services with bankers for customer cheques and State ofaccess affairs to the direct entry system.

In the opinionThe Credit of the UnionDirectors has there an outsourcingwere no significant arrangement changes with in theCuscal state Limitedof affairsfor of the Creditprovision Union of during thenetwork financial transactions year under for review. automatic teller facilities and the provision of debit cards and personal identification numbers.

The Credit Union has an outsourcing arrangement with Bob Travers & Associates for the provision of Internal Audit services.

5 32 35 WAW Credit Union Co-operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd)

All DirectorsCredit have commitments achieved inand excess contingent of the liabilities Credit Unionʼs existing targeted as at 30 60 June hours 201 (or6 arethe exclusiveapplicable of pro Goods rata hours) forand the Services triennium Tax. 1 July 2013 to 30 June 2016. 2016 2015 During the financial year, the Directors continued a self-assessment process on the ongoing development $ $ of a knowledge and skills base required to carry out the Director role and duties. The annual CPD Credit related commitments program is structured to address the knowledge and skills required to fulfil the duties of a Director of an Approved but undrawn loans, credit limits & loan Authorised Deposit-taking Institution. redraw facilities 56,758,421 51,784,819 Principal activities Security analysis of credit-related commitments Secured by mortgage over real estate 55,606,271 50,744,935 The principal activity of the Credit Union is to raise funds from the Credit Unionʼs customers for the Secured by funds 248,493 256,526 purpose of making loans to customers. No significant change in the nature of the activity has occurred Partly secured by goods mortgage 618,744 520,435 during the year. Fully unsecured 284,913 262,923 56,758,421 51,784,819 Trading results Financial guarantees The profit for the financial year before income tax was $1,684,061 (2015: $1,802,861). Income tax Guarantees 784,090 726,356 expense was $551,111 (2015: $528,902).

ReviewSecurity of operations analysis of financial guarantees Secured by mortgage over real estate 737,360 679,626 Secured by funds 21,381 21,381 Net loans and advances for the year have increased by $7,575,455 to $317,676,801. Partly secured by goods mortgage - - Deposits increased during the year by $12,020,880 to $389,449,112. Fully unsecured 25,349 25,349 Equity during the year has increased by $1,321,966 to $27,040,780. 784,090 726,356 DividendsOther contingent liabilities WAW Credit Union Co-operative Limited is a party to the Credit Union Financial Support System The Credit(CUFSS). Union does CUFSS not ishave a voluntary permanent scheme share thatcapital all creditand has unions therefore who arenot affiliatedpaid or declared with Cuscal any dividendsLimited for the have financial agreed year. to participate in. CUFSS is a company limited by guarantee with each credit unionʼs guarantee being $100. State of affairs As a member of CUFSS, the Credit Union: In the opinion• May of thebe requiredDirectors to there advance were funds no significant of up to 3%changes (excluding in the permanent state of affairs loans) of ofthe total Credit assets Union to during the financialanother year credit under union review. requiring financial support; • May be required to advance permanent loans of up to 0.1% (2015: 0.2%) of total assets per financial year to another credit union requiring financial support; and • Agrees, in conjunction with other members, to fund the operating costs of CUFSS.

5 36 33 WAW Credit Union Co-operative Limited WAW Credit Union Co-Operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ForContinuing the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

The Directors have in place a progressive training and development program,2016 thereby ensuring2015 that the Directors are up to date with current trends in the financial services market$ place. The Directors$ must 22complete. Auditorsʼ a minimum remuneration 60 hours of CPD per triennium. The following table reports on the hours undertaken by each Director for the year ended 30 June 2016. Amounts received or due and receivable by the External Auditor of WAW Credit Union (including GST) for: Director Audit of the financial statementsCPD of Hours the Creditto 30/6/1 Union6 63,580 58,960 R Power Other regulatory assurance services 60.75 16,720 15,510 M Dixen Other services - taxation 80.50 6,298 6,930 D Iverson Other services 60.25 20,625 6,600 107,223 88,000 D McGrath 82.50 B Munk The above amounts exclude out of pocket61.75 expenses recovered. R OʼHagan 35.25 23T .FrazerConcentration [appointed 25/11/15] of assets and liabilities26.50 T Toohey [retired 25/11/15] 88.25 The Credit Union has cash and cash equivalents exposures in excess of 10% of shareholders equity in regards to a number of investment institutions. At 30 June 2016, these holdings are in All Directors have achieved in excess of the Credit Unionʼs targeted 60 hours (or the applicable pro rata accordance with the requirements of APS 221 Large Exposures. hours) for the triennium 1 July 2013 to 30 June 2016. One of the entities is Cuscal Limited. This net investment at 30 June 2016 totals $14,666,647 During the financial year, the Directors continued a self-assessment process on the ongoing development (2015: $18,076,155), representing shares of $586,454 (2015: $586,454) and cash and of a knowledge and skills base required to carry out the Director role and duties. The annual CPD investments of $14,080,193 (2015: $17,489,701). program is structured to address the knowledge and skills required to fulfil the duties of a Director of an Authorised Deposit-taking Institution. Other cash investments in excess of 10% of shareholders equity were also placed in APRA regulated deposit taking institutions at balance date and are as follows: Principal activities 2016 2015 The principal activity of the Credit Union is to raise funds from the Credit$ Unionʼs customers$ for the purpose of making loans to customers. No significant change in the nature of the activity has occurred during the year.Commonwealth Bank of Australia (BankWest) 3,000,000 16,000,000 ME Bank 17,885,749 21,362,475 Trading resultsP & N Bank 11,429,346 6,957,086 AMP Bank 6,000,000 6,000,000 The profit Nationalfor the financialAustralia yearBank before income tax was $1,684,061 (2014,020,9255: $1,802,861). Income105,077 tax expense wasMy $State551, 111Bank(2015: $528,902). 17,095,197 11,923,640 Defence Bank 3,976,540 2,000,000 Review ofQudos operations Bank 4,969,314 -

Net loansConcentration and advances of for loans the yearand haveadvances increased and bycustomer $7,575,deposits455 to $3 are17, 676detailed,801. in Notes 9 and 14 Depositsrespectively. increased during the year by $12,020,880 to $389,449,112. Equity during the year has increased by $1,321,966 to $27,040,780.

Dividends

The Credit Union does not have permanent share capital and has therefore not paid or declared any dividends for the financial year.

State of affairs

In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union during the financial year under review.

5 34 37 WAW Credit Union Co-operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ContinuingFor the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

The24. DirectorsKey management have in place apersonnel progressive training and development program, thereby ensuring that the Directors are up to date with current trends in the financial services market place. The Directors must completeThe a minimum following 60 were hours key of CPDmanagement per triennium. personnel The following of the Credittable reportsUnion onat theany hours time undertakenduring the by each reportingDirector for period the year and endedunless 30 otherwise June 201 indicated6. were key management personnel for the entire period:

DirectorNon-executive directors CPD Hours to 30/6/16 R PowerR A Power Chair of the Board60.75 of Directors M DixenD J Iverson Audit Committee80.50 Chair & Risk Management Committee Chair M P Dixen Strategy Committee Chair D Iverson D McGrath 60.25 D McGrathB A Munk 82.50 B MunkR J OʼHagan 61.75 R OʼHaganT S Frazer Appointed 25 November35.25 2015 T L Toohey Retired 25 November 2015 T Frazer [appointed 25/11/15] 26.50 T Toohey [retired 25/11/15] 88.25

All DirectorsExecutives have achieved in excess of the Credit Unionʼs targeted 60 hours (or the applicable pro rata hours) forP Kthe Challis triennium 1 July 201Chief3 to Executive 30 June 201 Officer6. / Company Secretary M A Mack Deputy Chief Executive Officer During theR P financialKearney year, the DirectorsRegulatory continued Servicesa self Manager-assessment process on the ongoing development of a knowledge G A Hutchinson and skills baseTreasury required& toFraud carryManager out the Director role and duties. The annual CPD program J isJ structuredKotzur to addressFinance the knowledge Manager and skills required to fulfil the duties of a Director of an AuthorisedP J DepositGavin -taking InstitutionLoans. Manager

PrincipalTransactions activities with key management personnel

The principalIn addition activity to their of the salaries, Credit the Union Credit is Union to raise also funds provides from banking the Credit services Unionʼs and customers products to for key the purposemanagement of making loans personnel to customers. as outlined No below.significant change in the nature of the activity has occurred during the year. Key Management personnel compensation Trading results The key management personnel compensation included in “personnel expenses” (see Note 4) are The profitas follows:for the financial year before income tax was $1,684,061 (2015: $1,802,861). Income tax expense was $551,111 (2015: $528,902). 2016 2015 Review of operations $ $

Net loansShort and- termadvances employee for the benefits year have increased by $7,575,455 to $3171,007,642,676,801. 954,031 DepositsOther increased long term during benefits the year by $12,020,880 to $389,449,112. 22,359 18,162 Equity duringPost employment the year has benefits increased by $1,321,966 to $27,040,780. 212,388 180,597 1,242,389 1,152,790 Dividends The above excludes out of pocket reimbursements. The Credit Union does not have permanent share capital and has therefore not paid or declared any dividendsAll for remuneration the financial to year. Directors was approved by shareholders at the previous Annual General Meeting of the Credit Union held on 25 November 2015. State of affairs

In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union during the financial year under review.

5 38 35 WAW Credit Union Co-operative Limited WAW Credit Union Co-Operative Limited Annual Review and Financial Statements ABN 48 087 651 787 WAW Credit Union Co-operative Limited Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ForContinuing the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

2The4. DirectorsKey management have in place personnel a progressive (cont trainingʼd) and development program, thereby ensuring that the Directors are up to date with current trends in the financial services market place. The Directors must Loans to key management personnel and other related parties complete a minimum 60 hours of CPD per triennium. The following table reports on the hours undertaken by each Director for the year ended 30 June 2016. Details regarding the aggregate of loans made, guaranteed or secured by the Credit Union to key management personnel and their related parties are as follows: Director CPD Hours to 30/6/16 R Power 60.75 2016 2015 $ M Dixen 80.50 $ D Iverson 60.25 Loans to key management personnel and other related D McGrathparties 82.50 783,879 816,283 B Munk 61.75 R OʼHaganAll loans to Directors by the Credit Union35.25 have been made in the normal course of business and on the normal commercial terms and conditions. A standard concessional loan rate facility is T Frazer [appointed 25/11/15] 26.50 available to all staff including non director key management personnel. There was one T Tooheyconcessional[retired 25/11/15 loan rate] facility funded during88.25 2016 (2015: one) to non director key management personnel. All Directors have achieved in excess of the Credit Unionʼs targeted 60 hours (or the applicable pro rata hours) forLoans the trien(includingnium 1 July redraws) 2013 totallingto 30 June $34 201,0006. (2015: $63,000) were made to key management personnel and other related parties during the year including redraws utilised. Overdraft facilities During theto keyfinancial management year, the personnelDirectors continuedamountinga toself $25-assessment,674 (2015 :process $18,909 on) were the ongoing outstanding development as at 30 of a knowledgeJune 201 and6. skills base required to carry out the Director role and duties. The annual CPD program is structured to address the knowledge and skills required to fulfil the duties of a Director of an AuthorisedDuring Deposit the -year,taking repayments Institution. of $100,977 (2015: $422,223) of the balance outstanding on key management personnel and other related parties loans were made. Principal activities For all loans to key management personnel and their related parties, interest is payable at The principalprevail activitying market of the rates, Credit currently Union is5. 2 to8 % raisefor fundsSVR and from 3 the.64 % Creditfor staff Unionʼs concessional customers rates for theat purposebalance of making date loans(2015 to: customers.5.28% and No3.64 significant% respectively change). The in the principal nature amounts of the activi are tyrepayable has occurred on a during themonthly year. basis in line with contracted terms. Interest is payable monthly. All loans are secured by registered first mortgage over the borrowerʼs residences. Trading results Interest received on the loans to key management personnel and other related parties totalled The profit$34 for,573 the(2015 financial: $47 ,616year). Nobefore amounts income have tax been was written $1,684 down,061 or(201 recorded5: $1,802 as ,861allowances,). Income as tax all expensebalances was $551 outstanding,111 (2015 :are$528 considered,902). fully collectable.

ReviewThere of operations were no other amounts receivable at 30 June 2016 (2015: Nil) nor were any other loans advanced during the period. Net loans and advances for the year have increased by $7,575,455 to $317,676,801. DepositsDeposits increased from during key the management year by $12 ,personnel020,880 to and$389 other,449,112 related. parties Equity during the year has increased by $1,321,966 to $27,040,780. 2016 2015 Dividends $ $ Total value Term and Savings Deposits from key The Creditmanagement Union does personnel not haveand permanent other related share parties capital and has therefore1,574,831 not paid or declared3,355,461 any dividends for the financial year. Total interest paid on deposits to key management State ofpersonnel affairs and other related parties 38,878 118,601

In the opinionThe Credit of the UnionʼsDirectors policy there forwere receiving no significant deposits changes from in key the management state of affairs personnel of the Credit is that Union all during thetransactions financial year are under approved review. and deposits accepted on the same terms and conditions which applied to customers for each type of deposit.

5 36 39 WAW Credit Union Co-operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ContinuingFor the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

The24. DirectorsKey management have in place personnel a progressive (cont trainingʼd) and development program, thereby ensuring that the DirectorsOther are upkey to management date with current personnel trends transactionsin the financial with services the Credit market Union place. The Directors must complete a minimum 60 hours of CPD per triennium. The following table reports on the hours undertaken by each FromDirect timeor for to the timeyear the ended key management30 June 2016 personnel. of the Credit Union and their related parties may conduct banking related transactions with the Credit Union. These transactions are on the Directorsame terms and conditions as thoseCPD enteredHours to into 30/6/1 by other6 customers. R Power 60.75 A number of key management persons of the Credit Union, or their related parties, hold positions M Dixen in other entities that result in them having80.50 control or significant influence over the financial or D Iversonoperating policies of these entities. 60.25 D McGrath 82.50 B MunkA number of these entities transacted with61.75 the Credit Union in the reporting period. The terms and conditions of the transactions with key management personnel and their related parties were R OʼHagan 35.25 no more favourable than those available, or which might reasonably be expected to be available, T Frazeron [appointed similar transactions 25/11/15] to non-key management26.50 personnel related entities on an armʼs length T Tooheybasis.[retired 25/11/15] 88.25

All25. DirectorsRisk have management achieved in objectives excess of the and Credit policies Unionʼs targeted 60 hours (or the applicable pro rata hours) for the triennium 1 July 2013 to 30 June 2016. Introduction During the financial year, the Directors continued a self-assessment process on the ongoing development The Board of the Credit Union has overall responsibility for the establishment and oversight of the of a knowledge and skills base required to carry out the Director role and duties. The annual CPD risk management framework. The Board has approved a policy of compliance and risk program is structured to address the knowledge and skills required to fulfil the duties of a Director of an management to suit the risk profile of the Credit Union. Authorised Deposit-taking Institution. The Credit Unionʼs risk management focuses on the major areas of market risk, credit risk and Principaloperational activities risk. Authority flows from the Board of Directors to the Risk Management Committee which are integral to the management of risk. The principal activity of the Credit Union is to raise funds from the Credit Unionʼs customers for the purposeThe of making main elements loans to of customers. risk governance No significant are as follows. change in the nature of the activity has occurred during the year. Board: This is the primary governing body. It approves the level of risk which the Credit Union is Tradingexposed results to and the framework for identifying, monitoring, managing, mitigating and reporting those risks. The Board has a developed Risk Appetite framework that provides the facilitation of The profitthe forRisk the Profile financial of the year Credit before Union. income tax was $1,684,061 (2015: $1,802,861). Income tax expense was $551,111 (2015: $528,902). Risk Management Committee: This is the key body in the control of risk within the Credit Union. ReviewIt of consists operations of representatives from the Board of Directors. The Risk Management Committee does not form a view of acceptability of risks but instead reviews risks and controls that are used Net loansto andmitigate advances those forrisks. the year have increased by $7,575,455 to $317,676,801. Deposits increased during the year by $12,020,880 to $389,449,112. Audit Committee: This is the key body to oversee and control the management and Equity during the year has increased by $1,321,966 to $27,040,780. presentation of financial information of the Credit Union. It consists of representatives from the Board of Directors. The Audit Committee also facilitates the External and Internal Auditor Dividendsarrangements.

The CreditStrategy Union Committee: does not have This permanent is the key bodyshare in capital the control and ofhas the therefore strategic not and paid operational or declared planning any dividendswithin for the the financial Credit year. Union. It consists of representatives from the Board of Directors and Management. State of affairs Asset & Liability Committee (ʻALCOʼ): This is a committee of Senior Management that meets In the opinionweekly of othen theDirectors overall there identif wereication no significant, monitoring, changes manag in theement state, mitigatiof affairson ofand the Creditreporting Union of during theoperational financial yearissues under, and review. ensures that policies and procedures adopted by the Board are implemented.

Credit Risk Committee: This is the key body in the control of credit risks within the Credit Union. It monitors operations, policy and activity, including exposure limits as determined by the Board. It consists of representatives from the Board of Directors and Management. 5 40 37 WAW Credit Union Co-operative Limited WAW Credit Union Co-Operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787

NotesDirectorsʼ to the report Financial (contʼd) Statements For the year ended 30 June 2016 (contʼd) Continuing professional development (CPD) 25. Risk management objectives and policies (contʼd) The Directors have in place a progressive training and development program, thereby ensuring that the DirectorsMarket are up Risk: to dateALCO with is current charged trends with thein theresponsibilityfinancial servicesfor monitoring, market managing place. The and Directors reporting must the completeinterest a minimum rate 60risk hours exposures, of CPD perand triennium. ensuring The that following the cash table flow reports management on the hours and undertaken financial by each managementDirector for the adhereyear ended to exposure 30 June limits 201 as6. outlined in the policies for interest rate management. Chief Risk Officer: This role has responsibility for overseeing the risk management framework Directorand function within the Credit UnionCPD. TheHours Chiefto 30/6/1Risk Officer6 reports directly to the Chief Executive R PowerOfficer; attends the Board of Directors,60.75 Audit Committee and Risk Management Committee meetings; and has access to the Board of Directors. M Dixen 80.50 D IversonInternal Audit: Internal audit has responsibility60.25 for implementing the controls testing and D McGrathassessment in line with the Audit & Risk 82.50Management Policy Manual. B Munk 61.75 Key risk management policies encompassed within the overall risk management framework R OʼHaganinclude: - 35.25 T Frazer [appointed• Capital 25/11/15] management; 26.50 T Toohey [retired• Audit 25/11/15 and related] arrangements;88.25 • Market (Interest rate) risk; All Directors• haveLiquidity achieved management; in excess of the Credit Unionʼs targeted 60 hours (or the applicable pro rata hours) for the• trienCreditnium risk 1 July management; 2013 to 30 June 2016. • Operational risk management including data risk management; During the financial• year, the Directors continued a self-assessment process on the ongoing development of a knowledge Humanand skills resource base management;required to carry out the Director role and duties. The annual CPD program is structured• Outsourcing to address arrangements; the knowledge and skills required to fulfil the duties of a Director of an Authorised Deposit• Anti-taking Money InstitutionLaundering. and Counter Terrorism Finance; • Fraud; Principal activities• Disaster recovery (Business continuity); • Fit & Proper; The principal• activityBoard ofof Directors the Credit and Union Governance is to raise; funds from the Credit Unionʼs customers for the purpose of making• loans to customers. No significant change in the nature of the activity has occurred during the year. Business continuity management; and • Risk management. Trading results (a) Market risk and hedging policy The profit for the financial year before income tax was $1,684,061 (2015: $1,802,861). Income tax The Credit Union has undertaken the following strategies to minimise its financial risks. expense was $551,111 (2015: $528,902). The objective of the Credit Unionʼs market risk management is to monitor, manage, control, Reviewidentify of operations and report market risk exposures in order to optimise the balance between risk and return. Net loans and advances for the year have increased by $7,575,455 to $317,676,801. Deposits increased during the year by $12,020,880 to $389,449,112. Market risk is the financial impact through changes in interest rates, foreign exchange rates or Equity duringother theprices year and has volatilitiesincreased bythat $1, may321,have966 to an $2 7adverse,040,780 effect. on the Credit Unionʼs financial performance and position. The Credit Union is not exposed to foreign exchange or currency risk. DividendsThe Credit Union does not trade in the financial instruments it holds on its books. The Credit Union is exposed only to interest rate risk arising from changes in market interest rates within its The Creditown Union banking does book. not have permanent share capital and has therefore not paid or declared any dividends for the financial year. The management of market risk is the responsibility of ALCO which reports directly to the Board State ofmonthly. affairs

In the opinioni) Interest of the Rate Directors Risk there were no significant changes in the state of affairs of the Credit Union during the financial year under review. Interest rate risk is the change in the fair value or future cash flows arising from financial instruments due to the changes of interest rates and terms.

415 38 WAW Credit Union Co-operative Limited AnnualWAW Credit Review Union and FinancialCo-operativeStatements Limited Annual Review and FinancialABN 48 087Statements 651 787 ABN 48 087 651 787

DirectorsʼNotes to the report Financial (contʼd) Statements For the year ended 30 June 2016 (contʼd) Continuing professional development (CPD) 25. Risk management objectives and policies (contʼd) The(a) DirectorsMarket have risk inand place hedging a progressive policy (cont trainingʼd) and development program, thereby ensuring that the Directors are up to date with current trends in the financial services market place. The Directors must completeMost a minimum financial 60 institutions hours of CPD are exposedper triennium. to interest The following rate risk table within reports its treasury on the operations.hours undertaken WAW by each CreditDirect orUnion for the doesyear not ended have a30 treasury June 201 operation6. and does not trade its financial instruments.

DirectorInterest rate risk in the bankingCPD book Hours to 30/6/16 R Power The Credit Union is exposed to interest rate60.75 risk in its banking book due to mismatches between M Dixenthe repricing dates of assets and liabilities.80.50 D Iverson 60.25 D McGrathThe interest rate risk on the banking book82.50 is monitored and managed daily, reported to the ALCO weekly and reported to the Board by ALCO. B Munk 61.75 R OʼHaganIn the banking book the most common risk35.25 the Credit Union faces arises from fixed rate assets T Frazerand [appointedliabilities. 25/11/15] This exposes the Credit Union26.50 to fluctuations in the market interest rate. T Toohey [retired 25/11/15] 88.25 The level of mismatch on the banking book is set out in Note 26 below. Note 26 displays the All Directorsperiod have over achieved which each in excess asset of or theliability Credit will Unionʼs reprice. targeted This risk60 hoursis not (or considered the applicable significant pro rata to hours) forwarrant the trien thenium use 1of July derivatives 2013 to to30 mitigate June 201 this6. risk.

During theMethod financial of managingyear, the Directors risk continued a self-assessment process on the ongoing development of a knowledge and skills base required to carry out the Director role and duties. The annual CPD programThe is structured Credit Union to address monitors theits knowledgeinterest rate and risk skills by the required use of interestto fulfil therate duties sensitivity of a analysis.Director of Thean Authoriseddetails Deposit and -assumptionstaking Institution used. in this analysis are set out below.

PrincipalInterest activities rate sensitivity The Credit Union maintains a balanced ʻon bookʼ strategy by ensuring that the net interest gap The principal activity of the Credit Union is to raise funds from the Credit Unionʼs customers for the between assets and liabilities is not excessive. The gap is measured quarterly to identify, purpose of making loans to customers. No significant change in the nature of the activity has occurred manage the interest rate movements and the maturity profile to undertake actions through during the year. targeted fixed rate interest settings within assets and liabilities to remedy the imbalance to within acceptable levels. Trading results Based on the calculations at 30 June 2016 and 30 June 2015, the net profit impact for a 2.00% The profitincrease for the in financialinterest ratesyear wouldbefore be income $793,307 tax increasewas $1 ,in684 profit,061 (2015(201:5$: 685$1,802,350,861at 2.00). Income% interest tax expenserate wasmovement $551,111)(.201A decrease5: $528,902 of 2.00). % in interest rates would have an equal but opposite effect.

ReviewThe of operationsCredit Union performs a sensitivity analysis to monitor and measure market risk exposures on quarterly basis using a variety of assumptions. Net loans and advances for the year have increased by $7,575,455 to $317,676,801. Deposits(b) Liquidity increased and during funding the year risk by $12,020,880 to $389,449,112. Equity during the year has increased by $1,321,966 to $27,040,780. Liquidity and funding risk is the risk that the Credit Union may encounter difficulties raising funds Dividendsto meet commitments associated with financial instruments, eg borrowing repayments or customersʼ withdrawal demands. It is the policy of the Board that the Credit Union maintains The Creditadequate Union liquiditydoes not and havefunding permanent arrangements share capital along and with hascommitted therefore credit not paidfacilities or declared to meet anythe dividendscash for flowthe financial needs of year. customers for withdrawal demands and borrowings as and when required.

State ofThe affairs Credit Union is required to adopt prudent practices in managing its liquidity risks and to maintain an adequate level of liquidity to meet its obligations as they fall due across a wide range In the opinionof operating of the circumstances.Directors there were no significant changes in the state of affairs of the Credit Union during the financial year under review.

42 5 39 WAW Credit Union Co-operative Limited WAW Credit Union Co-Operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ForContinuing the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

The25. DirectorsRisk management have in place objectives a progressive and training policies and (contdevelopmentʼd) program, thereby ensuring that the (b)DirectorsLiquidity are up toand date funding with currentrisk (cont trendsʼd) in the financial services market place. The Directors must complete a minimum 60 hours of CPD per triennium. The following table reports on the hours undertaken by each TheDirect Creditor for theUnionyear is ended required 30 Juneto have 201 6a. liquidity risk management system incorporating the establishment of a liquidity risk management framework, the management of liquidity risk, the Directorannual funding strategy and a contingencyCPD Hours fundingto 30/6/1 plan.6 R Power 60.75 The Credit Union manages its liquidity and funding risk by: M Dixen 80.50 • Continuously monitoring actual and forecast short and long term daily cash flows; D Iverson 60.25 • Monitoring the maturity profiles of financial assets and liabilities; D McGrath • Identifying and monitoring Australian82.50 domestic and global cash flow movements and B Munk market sentiment; 61.75 R OʼHagan • Identifying and monitoring the macro35.25 economic trends along with the general banking T Frazer [appointedcash 25/11/15]flow trends; 26.50 • T Toohey [retiredMaintaining 25/11/15] an adequate funding88.25 structure and approach that reflects the size, business mix and operational complexity; • All Directors haveMonitoring achieved and in excess managing of the the Credit prudential Unionʼs liquidity targeted ratio 60 daily hours and (or forecastthe applicable future proliqui ratadity hours) for the trienrequirements;nium 1 July 201and3 to 30 June 2016. • Maintaining a liquidity portfolio of high quality liquid assets sufficient in size that reflects During the financialthe year,Credit the Unionʼs Directors size, continued business amix self and-assessment operational process complexity on the that ongoing enables development the Credit of a knowledge Unionand skillsto withstand base required a severe to liquidity carry outstress the event. Director role and duties. The annual CPD program is structured to address the knowledge and skills required to fulfil the duties of a Director of an AuthorisedThe Deposit Credit -Uniontaking hasInstitution a contractual. arrangement with the Credit Union Financial Support System (CUFSS) which can access committed CUFSS-facilitated industry funds to provide emergency Principalliquidity activities support for the Credit Union in times of need.

The principalThe Credit activity Union of theis required Credit Unionunder isthe to APRA raise prudential funds from standards the Credit to maintain Unionʼs customersas a minimum for 9% the purposeof of total making liabilities loans as to liquidcustomers. assets Nocapable significant of being change converted in the tonature cash ofwithin the activi48 hours.ty has The occurred Credit during theUnion year. aims to maintain a required minimum liquidity level of at least 13% to meet adequate operational cash flow requirements. The liquidity ratio is monitored daily and measured against Tradingcash results flow requirements now and into the future. Should the liquidity ratio breach the minimum level of 13%, ALCO is to take actions to ensure that the required liquidity funds are obtained from The profitnew for deposits the financial or credit year facilities. before (Note income 17 outlinestax was the $1 ,borrowing684,061 ( 201facilities5: $1, as802 at, 861the ).balanceIncome date. tax expenseThese was $ facilities551,111 are(201 in5 :addition$528,902 to ).the support from CUFSS.)

ReviewThe of operationsmaturity profile of the financial assets and financial liabilities, based on the contractual terms, are set out in the notes to the financial statements. Net loans and advances for the year have increased by $7,575,455 to $317,676,801. DepositsThe increased liquidity during ratio as the at year the endby $ of12 the,020 financial,880 to $3year89,over449, 112the .past six years was: Equity during the year has increased by $1,2011321,966 to2012 $27,040,7802013. 2014 2015 2016 Minimum Liquidity Holdings* - - - 13.89% 15.16% 20.18% DividendsHigh Quality Liquid Assets* 17.20% 14.64% 14.18% - - - Operational Liquid Assets - 2.64% 4.88% 5.32% 5.74% 1.63% The CreditTotal Union does not have permanent17.20% share17.28% capital and19.06% has therefore19.21% not paid20.90% or declared21.81% any st dividends*APRA for the released financiala new year. Liquidity prudential standard, effective 1 January 2014, which changed the disclosure from high quality liquid assets to minimum liquidity holdings. State of affairs (c) Credit risk In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union Credit risk is the risk that customers, financial institutions and other counterparties are unable to during the financial year under review. meet their obligations to the Credit Union which may result in financial losses. Credit risk arises principally from the Credit Unionʼs loan book and investment assets.

5 40 43 WAW Credit Union Co-operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ContinuingFor the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

DirectorAll loans and facilities are withinCPD HoursAustralia.to 30/6/1The 6geographic distribution is monitored and R Poweranalysed. Concentrations are described 60.75in Note 9. M DixenThe Credit Union assess applicants against80.50 the following credit risk policy requirements of D Iversoncapacity, commitment, collateral, character60.25 and intent to repay the loan or facility. D McGrath 82.50 B MunkThe Credit Union has established policies61.75 over the: • Credit assessment and approval of loans and facilities covering acceptable risk R OʼHagan 35.25 assessment and security requirements; T Frazer [appointed 25/11/15] 26.50 • Limits of acceptable exposure over the value of individual borrowers, non mortgage T Toohey [retiredsecured 25/11/15 loans,] commercial lending88.25 and concentrations to geographic and industry groups considered at high risk of default; All Directors• haveThe achieved ongoing in reassessment excess of the and Credit review Unionʼs of the targeted credit exposures 60 hours on(or loansthe applicable and facilities; pro rata hours) for the• trienEstablishingnium 1 Julyappropriate 2013 to 30 provisions June 2016 to. recognise the impairment of loans and facilities; • Where appropriate debt recovery procedures; and During the financial• year, the Directors continued a self-assessment process on the ongoing development of a knowledge Ongoingand skills monitoring base required and where to carry appropriate out the remedialDirector actionrole and in theduties. compliance The annual with creditCPD program is structuredrisk policies. to address the knowledge and skills required to fulfil the duties of a Director of an Authorised Deposit-taking Institution. A regular review of compliance with the credit risk and associated policies and procedures is Principalconducted activities as part of the internal audit program and the outcomes are reported to the Audit Committee, the Risk Management Committee and the Credit Risk Committee. The principal activity of the Credit Union is to raise funds from the Credit Unionʼs customers for the purposePast of making due and loans impaired to customers. No significant change in the nature of the activity has occurred during the year. A financial asset is past due when the counterparty has failed to make a payment when contractually due. A past due classification can trigger various actions such as a renegotiation, Tradingenforcement results of covenants, or legal proceedings. Once the past due exceeds 90 days the loan is regarded an impaired, unless other factors indicate the impairment should be recognised sooner. The profit for the financial year before income tax was $1,684,061 (2015: $1,802,861). Income tax expense was $551,111 (2015: $528,902). For loans where repayments are doubtful, external agencies are engaged to conduct recovery action. The exposure to losses arise predominately in personal loans and facilities not secured Reviewby of registered operations mortgages over real estate.

Net loansThe and estimated advances recoverable for the year amount have increased of that impaired by $7,575 loan,455 or facilityto $31 7is, 676determined,801. based on the net Depositspresent increased value during of future the year anticipated by $12,020 cash,880 flowsto $3 89and,449 the,112 net. loss is recognised in the financial Equity duringstatements. the year In has estimating increased bythe $1, financial321,966 toposition, $27,040 management,780. makes judgements about counterpartyʼs financial situation and the net realisable value of any underlying collateral. Where Dividendsdeemed appropriate external experts may be required to verify such value.

The CreditA provision Union does for incurrednot have losses permanent is established share capital on all and past has due therefore loans after not paida specified or declared period any of dividendsrepayment for the financial default year. where it is probable that some of the capital will not be repaid or recovered. Specific loans and facilities are provided for depending on a number of factors including the net State ofrealisable affairs value of the asset, environmental factors, changes in a counterpartyʼs industry, technological developments, and identified structural weaknesses or deterioration in cash flows. In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union during theDetails financial are setyear out under in N otereview. 10.

Bad Debts

For unsecured loans and facilities, amounts are written off when collection of the loan or facility is considered to be remote. All write offs are identified and actioned on a case by case basis. 5 44 41 WAW Credit Union Co-operative Limited WAW Credit Union Co-Operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ForContinuing the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

The25. DirectorsRisk management have in place objectives a progressive and training policies and (contdevelopmentʼd) program, thereby ensuring that the (Directorsc) Credit are up risk to (contdate ʼwithd) current trends in the financial services market place. The Directors must complete a minimum 60 hours of CPD per triennium. The following table reports on the hours undertaken by each ADirect reconciliationor for the yearin the ended movement 30 June of both2016 .past due and impaired exposure provisions is provided in Note 10. Director CPD Hours to 30/6/16 R PowerCollateral secured loans 60.75 M Dixen The loan portfolio primarily is secured by80.50 residential property in Australia. Therefore, the Credit D IversonUnion is exposed to risks in the reduction60.25 of the Loan to Value Ratio (LVR) cover should the D McGrathproperty market be subject to a substantial82.50 negative change. B Munk 61.75 The risk of losses from the loans undertaken is reduced by the diverse nature, geographic spread R OʼHagan 35.25 and quality of the security taken. T Frazer [appointed 25/11/15] 26.50 T TooheyThe[retired Credit 25/11/15 Union maintains] a policy to attract88.25 residential mortgages which carry an 80% loan to valuation ratio or less. Where a residential mortgage has a loan to valuation ratio of greater than All Directors80%, have then achievedMortgage inInsurance excess of is therequired. Credit NoteUnionʼs 10 targetedoutlines the60 hoursnature (orand the extent applicable of the prosecurity rata hours) forheld the against triennium the 1loa Julyns 201and3 facilitiesto 30 June held 201 as 6at. balance date.

During theConcentration financial year, risk the– DirectorsLoans continued a self-assessment process on the ongoing development of a knowledge and skills base required to carry out the Director role and duties. The annual CPD programConcentration is structured to risk address is a measurement the knowledge of and the Creditskills required Unionsʼ to exposure fulfil the toduties an individual of a Director borrower of an, Authorisedindustry Depositor -geographitaking Institutioncal areas. .

PrincipalThe activities Credit Union has in place a large exposure policy limit of 10% of capital. The Credit Union can lend above 10% of capital however APRA must be consulted prior to undertaking the loan or The principalfacility. activity APRA ofmay the impose Credit additional Union is capital to raise requireme funds fromnts theon the Credit Credit Unionʼs Union customersif it considers for the purposeaggregate of making large loans exposures to customers. of 10% No ofsignificant capital orchangemore isin deemedthe nature to ofbe the higher activi thaty nhas prudentially occurred during theacceptab year. le. As at 30 June 2016 the Credit Union had no large exposures of 10% of capital or more. Trading results The aggregate value of large exposure loans are set out in Note 9. The Credit Union holds no significant concentration risk amongst its members. Concentration exposures to individuals or The profit for the financial year before income tax was $1,684,061 (2015: $1,802,861). Income tax groups of related parties are closely identified, monitored and managed; and an annual review expense was $551,111 (2015: $528,902). will be prepared for any exposure over 5 per cent of capital.

ReviewCREDIT of operations RISK – (LIQUID) INVESTMENTS: Net loans and advances for the year have increased by $7,575,455 to $317,676,801. Credit risk is the risk that the other party to a financial instrument will fail to discharge their Deposits increased during the year by $12,020,880 to $389,449,112. obligation resulting in the Credit Union incurring a financial loss. This usually occurs when Equity during the year has increased by $1,321,966 to $27,040,780. debtors fail to settle their obligations owing to the Credit Union.

DividendsThe risk of losses from the liquid investments undertaken is mitigated by the nature and quality of the independent rating of the investment bodies and the limits to concentration as approved by The CreditAPRA Union from does time notto time. have permanent share capital and has therefore not paid or declared any dividends for the financial year. The Credit Union uses the ratings of reputable ratings agencies to assess the credit quality of all State ofinvestment affairs exposure, where applicable, using the credit quality assessment scale in APRA prudential guidance Note AGN 112. The credit quality assessment scale within this standard has In the opinionbeen comp of theli edDirectors with. there were no significant changes in the state of affairs of the Credit Union during the financial year under review.

5 42 45 WAW Credit Union Co-operative Limited Annual Review and Financial Statements ABN 48 087 651 787 WAW Credit Union Co-operative Limited Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ContinuingFor the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

The25. DirectorsRisk management have in place objectives a progressive and training policies and (contdevelopmentʼd) program, thereby ensuring that the Directors(c) Credit are up risk to (contdate ʼwithd) current trends in the financial services market place. The Directors must complete a minimum 60 hours of CPD per triennium. The following table reports on the hours undertaken by each GivenDirect orthe for high the qualityyear ended of these 30 investments,June 2016. the Credit Union does not expect any counterparty to fail to meet its obligations. The exposure values associated with each credit quality investment Directorbody are detailed in Notes 7 andCPD 23. Hours to 30/6/16 R Power 60.75 The Credit Union has in place repurchase arrangements with the Reserve Bank of Australia for M Dixen 80.50 the conversion of a qualifying investment to cash should the need arise. D Iverson 60.25 D McGrathUnder the liquidity support scheme with82.50 CUFSS, 3.1% of the assets must be available for the B Munkprovision of emergency liquidity support.61.75 R OʼHagan 35.25 (d)T Frazer Operational [appointed 25/11/15]Risk 26.50 T Toohey [retired 25/11/15] 88.25 Operational risk is the risk of loss to the Credit Union resulting from deficiencies in processes, All Directorspersonal have technology achieved inand excess infrastructure, of the Credit and Unionʼs from ext targetedernal factors 60 hours other (or then the applicablecredit, market pro rataand hours) forliquidity the trien risks.nium Operational 1 July 2013 risksto 30 in June the 201Credit6. Union relate mainly to those risks arising from a number of sources including legal compliance, business continuity, information technology, During theoutsourced financial serviceyear, the fai Directorslures, fraud, continued and employeea self-assessment errors. process on the ongoing development of a knowledge and skills base required to carry out the Director role and duties. The annual CPD programCAPITAL is structured MANAGEMENT to address the: knowledge and skills required to fulfil the duties of a Director of an Authorised Deposit-taking Institution. The capital levels are prescribed by APRA. Under the APRA prudential standards capital is Principaldetermined activities in three components:

The principal• activityCredit ofrisk the Credit Union is to raise funds from the Credit Unionʼs customers for the purpose of making• Market loans risk to (trading customers. book) No significant change in the nature of the activity has occurred during the year.• Operations risk

TradingThe results market risk component is not required as the Credit Union is not engaged in a trading book for financial instruments. The profit for the financial year before income tax was $1,684,061 (2015: $1,802,861). Income tax expenseThe was Credit $551 ,111Union(201 reports5: $528 to, 902APRA). under Basel III capital requirements effective from 1 January 2013, and as amended effective 1 January 2016. The Credit Union uses the standardised Reviewapproach of operations for credit risk and operational risk. Prior to 1 January 2013, the Credit Union reported to APRA under the prudential requirements referred to as Basel II. Net loans and advances for the year have increased by $7,575,455 to $317,676,801. DepositsThe increased Credit during Unionʼs the capital year by contains $12,020 Common,880 to $3 Equity89,449 Tier,112 .1 Capital, Tier 1 Capital and Tier 2 Equity duringCapital the in year accordance has increased with APRA by $1, requirements.321,966 to $2 7For,040 WAW,780. Credit Union, Common Equity Tier 1 Capital contains current year earnings, property revaluation reserve and general reserves less Dividendsadjustments for software technology purchases and equity exposures with associated financial institutions or companies. WAW Credit Union currently holds no other Tier 1 Capital Instruments. The CreditWAW Union Credit does Union not Tier have 2 Capitalpermanent contains share General capital Reserve and has for therefore Credit Losses. not paid or declared any dividends for the financial year.

State of affairs

In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union during the financial year under review.

5 46 43 WAW Credit Union Co-operative Limited WAW Credit Union Co-Operative Limited Annual Review and Financial Statements ABN 48 087 651 787 WAW Credit Union Co-operative Limited Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ForContinuing the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

2The5. DirectorsRisk management have in place objectives a progressive and training policies and (contdevelopmentʼd) program, thereby ensuring that the Directors are up to date with current trends in the financial services market place. The Directors must (d) Operational Risk (contʼd) complete a minimum 60 hours of CPD per triennium. The following table reports on the hours undertaken by each Director for the year ended 30 June 2016. Capital Adequacy Ratio Calculation 2016 2015 Director CPD Hours to 30/6/16 $ $ R Power 60.75 M DixenCommon Equity Tier 1 Capital 80.50 Retained earnings 1,132,950 1,273,959 D Iverson 60.25 Capital profits reserve 23,849,840 22,584,094 D McGrathAsset revaluation reserve – excluding deferred82.50 tax B Munkimpact 61.75 2,181,046 1,947,880 R OʼHagan 35.25 27,163,836 25,805,933 Less prescribed deductions (981,216) (970,620) T Frazer [appointed 25/11/15] 26.50 Net Tier 1 Capital 26,182,620 24,835,313 T Toohey [retired 25/11/15] 88.25 Tier 2 Capital All DirectorsGeneral have reserve achieved for creditin excess losses of the Credit Unionʼs targeted 60 hours486,258 (or the applicable478,045 pro rata hours) for the triennium 1 July 2013 to 30 June 2016. 486,258 478,045 Less: prescribed deductions - - During theNet financial Tier 2 C year,apital the Directors continued a self-assessment process on486,258 the ongoing development478,045 of a knowledgeTotal capital and skills base required to carry out the Director role26,668,878 and duties. The annual25,313,358 CPD program is structured to address the knowledge and skills required to fulfil the duties of a Director of an AuthorisedRisk Deposit profile-taking Institution. Credit risk 162,241,682 159,327,486 PrincipalOperational activities risk 23,770,475 22,619,871 Total risk weighted assets 186,012,157 181,947,357 The principalCapital activity adequacy of theratio Credit Union is to raise funds from the Credit 14.34% Unionʼs customers1 3 for.91 the% purpose of making loans to customers. No significant change in the nature of the activity has occurred during the year. The Credit Union is required to maintain a minimum capital level of 8% (Common Equity Tier 1 TradingCapital results of 4.5% with Total Tier 1 Capital of 6% and Total Capital of 8%) or an APRA advised Prudential Capital Requirement (PCR), whichever is higher, as compared to the risk weighted The profitassets for theat any financial given time.year before income tax was $1,684,061 (2015: $1,802,861). Income tax expense was $551,111 (2015: $528,902). The risk weightings attached to each asset class are based on the weights prescribed by APRA Reviewin of its operations guidance AGN 112-1, as amended from time to time. The risk weighted assets processes are set by APRA as part of the Basel III prudential framework. It is recognised that the level of Net loanscapital and advancesratio can forbe theaffected year haveby growth increased in assets by $7 relative,575,455 toto growth $317, 676in capital,801. and by changes in Depositsthe increased mix of financial during theassets year managed by $12,020 by, 880the Creditto $389 Union.,449,112. Equity during the year has increased by $1,321,966 to $27,040,780. The Capital Adequacy Ratio as at the end of financial year over the past 6 years is as follows: Dividends 20111 20121 20132 20142 20152 20162 The Credit Union13.04% does not have13.61% permanent 14.37%share capital and14.06% has therefore13.91% not paid or declared14.34% any dividends for the financial year.

State ofFootnote: affairs 1. Basel II Prudential Capital Framework applied. In the opinion2. Basel of theIII Prudential Directors thereCapital were Framework no significant applied. changes in the state of affairs of the Credit Union during the financial year under review.

5 44 47 WAW Credit Union Co-operative Limited Annual Review and Financial Statements ABN 48 087 651 787 WAW Credit Union Co-operative Limited Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ContinuingFor the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

The25. DirectorsRisk management have in place objectives a progressive and training policies and (contʼd)development program, thereby ensuring that the Directors are up to date with current trends in the financial services market place. The Directors must (d) Operational Risk (contʼd) complete a minimum 60 hours of CPD per triennium. The following table reports on the hours undertaken by each Director for the year ended 30 June 2016. To manage the Credit Unionʼs capital, the Credit Union reviews the ratio monthly and monitors major movements in the asset levels and capital values. Policies have been implemented to Directorrequire reporting to the Board andCPD the Hours regulatorto 30/6/1 if the6 capital ratio is likely to fall below a trigger R Powerlevel. Further a 5 year capital budget projection60.75 of the capital levels is maintained and updated on a bi annual basis to allow for the measurement and analysis of strategic decisions and/or trends. M Dixen 80.50 D IversonOperational Risk Capital Charge 60.25 D McGrath 82.50 B MunkThe Credit Union uses the Standardised61.75 approach which is considered to be most suitable for its R OʼHaganbusiness given the nature of its transaction35.25 activities. The operational risk capital charge is calculated by mapping the Credit Unionʼs three year average net interest income and net non T Frazer [appointed 25/11/15] interest income to the Credit Unionʼs various26.50 business lines. T Toohey [retired 25/11/15] 88.25 Based on this approach, the Credit Unionʼs operational risk capital charge requirement at 30 All DirectorsJune have2016 achievedis $23,770 in, 475excess(2015 of: the$22 Credit,619,871 Unionʼs). targeted 60 hours (or the applicable pro rata hours) for the triennium 1 July 2013 to 30 June 2016. It is considered that the Standardised approach accurately reflects the Credit Unionʼs operational During therisk financial other tha year,n the the specific Directors items continued set out below.a self-assessment process on the ongoing development of a knowledge and skills base required to carry out the Director role and duties. The annual CPD programInternal is structured Capital to Adequacyaddress the Assessment knowledge and Process skills required to fulfil the duties of a Director of an Authorised Deposit-taking Institution. The Credit Union manages its internal capital levels for both current and future activities through Principalthe activitiesCredit Unionʼs Strategy Committee. The outputs of the Strategy Committee are reviewed by the Board in its capacity as the primary governing body. The capital required for any change in The principalthe Credit activity Union of ʼs the strategic Credit direction Union is and/or to raise forecasts funds fromor unforeseen the Credit c ircumstances Unionʼs customersare assessed for the purposeby of themaking Strategy loansCommittee to customers. and the No B significantoard as and change when requiredin the nature. of the activity has occurred during the year. Further, a 5 year capital budget projection of the capital levels is maintained and updated on a Tradingbiannual results basis to allow for strategic decisions and/or trends to be addressed.

The profit for the financial year before income tax was $1,684,061 (2015: $1,802,861). Income tax expense was $551,111 (2015: $528,902).

Review of operations

Dividends

The Credit Union does not have permanent share capital and has therefore not paid or declared any dividends for the financial year.

State of affairs

In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union during the financial year under review.

5 48 45 WAW Credit Union Co-operative Limited WAW Credit Union Co-Operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the Financial Statements ForContinuing the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

The26. DirectorsFinancial have instruments in place a progressive training and development program, thereby ensuring that the Directors are up to date with current trends in the financial services market place. The Directors must (a) Terms, conditions and accounting policies complete a minimum 60 hours of CPD per triennium. The following table reports on the hours undertaken by each Director for the year ended 30 June 2016. The Credit Unionʼs accounting policies, including the terms and conditions of each class of financial asset, financial liability and equity instrument, both recognised and unrecognised at the Directorbalance date, are as follows: CPD Hours to 30/6/16 R Power 60.75 Recognised M Dixen 80.50 Financial Note Accounting Policies Terms and Conditions D Iverson Instruments 60.25 D McGrath Financial assets 82.50 B Munk 61.75 Customer loans 9 Loan interest is calculated on the daily All housing loans are R OʼHaganand advances balance outstanding35.25 and is charged in secured by registered T Frazer [appointed 25/11/15] arrears to26.50 a customerʼs account on the mortgages. Other loans T Toohey [retired 25/11/15] last day 88.25of each month. Loans and are assessed on an advances are recorded at their individual basis. All Directors have achieved in excess ofrecoverable the Credit Unionʼsamount. targeted For 60 furtherhours (or the applicable pro rata details on the classification of loans hours) for the triennium 1 July 2013 to 30 June 2016. Details of maturity terms refer to Note 1. are set out in Note 9. During the financial year, the Directors continued a self-assessment process on the ongoing development 7 Cash and cash equivalents are stated Details of maturity terms of a knowledgeCash and and cash skills base required to carry out the Director role and duties. The annual CPD at the lower of cost and net realisable are set out in Note 7. program isequivalents structured to address the knowledge and skills required to fulfil the duties of a Director of an value. Interest revenue is recognised Authorised Deposit-taking Institution. when earned. PrincipalOther activities financial 11 Other financial assets are carried at N/A assets the lower of cost or recoverable The principal activity of the Credit Unionamount. is to raiseRestrictions funds fromapply the to Credit the Unionʼs customers for the purpose of making loans to customers.repayment No significant of deposits change heldin the by nature Cuscal of the activity has occurred during the year. Ltd and for other regulatory purposes. Financial liabilities Trading Customerresults deposits 14 Deposits are recorded at the principal Details of maturity terms amount. Interest is calculated on the are set out in Note 14. The profit for the financial year beforedaily income balance tax wasoutstanding $1,684,061 or( 201the5: $1,802,861). Income tax expense was $551,111 (2015: $528,902minimum). monthly balance. Accounts payable 15 Liabilities are recognised for amounts Trade liabilities are Review andof operations other liabilities to be paid in the future for goods and normally settled on services received, whether or not 30-day terms. Net loans and advances for the year havebilled increased to the Credit by $7 ,Union.575,455 to $317,676,801. Deposits increased during the year by $12,020,880 to $389,449,112. Equity during the year has increased by $1,321,966 to $27,040,780.

Dividends

The Credit Union does not have permanent share capital and has therefore not paid or declared any dividends for the financial year.

State of affairs

In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union during the financial year under review.

5 46 49 WAWWAW Credit Credit Union Union Co Co-operative-operative Limited Limited AnnualAnnual Review Review and and Financial Financial StatementsStatements ABNABN 48 48 087 087 651 651 787 787

NotesNotes to the tofinancial the Financial statements Statements for the foryear the ended year ended30 June 30 201 June6 (contʼd) 2016 (contʼd)

26. 1Financial2. Property, instruments plant and (contʼd) equipment (contʼd)

(b) bInterest) Reconciliations rate risk The Credit Unionʼs exposure to interest rate risks and the effective interest rates of financial assets and financial liabilities recognised at the balance date are as follows. The time bandingsReconciliations reflect the of earlier the carrying of the nextamounts contractual for each repricing class of dateproperty, or the plant maturity and equipmentdate of the areasset set or out liability. below:

FixedLand interest rate repricingBuildingsin: Plant and equipment Leasehold Total improvements $ $ $ Total carrying$ $ amount as per the Weighted average Floating interest More than Non-interest Statement of effective interest Financial instrumentsBalance at 1 July 20rate14 1 year or1,418,300 less Over 1 to 5 years6,246,768 5 years 574,101bearing Financial367,707 Position rate8,606,876 Additions - 25,169 476,016 - 501,185 Revaluations 2016 2015 2016 2015 - 2016 2015 201- 6 2015 2016 - 2015 2016 2015- 2016 2015- $ʼ000 $ʼ000 $ʼ000 $ʼ000 $ʼ000 $ʼ000 $ʼ000 $ʼ000 $ʼ000 $ʼ000 $ʼ000 $ʼ000 % % Transfers - (3,200) (1,200) - (4,400) Financial assets: Disposals - - (35,157) - (35,157) Cash and cash Depreciation - (160,852) (235,811) - (396,663) equivalents 374 1,669 90,058 83,156 - - - - 2,940 2,520 93,372 87,345 2.66 2.99 Amortisation - - - (59,597) (59,597) Other receivables ------579 443 579 443 N/A N/A Balance at 30 June 2015 1,418,300 6,107,885 777,949 308,110 8,612,244 Customer loans and advances (gross) 218,439 250,891 31,715 18,838 66,723 39,493 842 924 - - 317,719 310,146 4.99 5.39 Other financial Balanceassets at 1 July 2015- - - 1,418,300- - 6,107,885- - 777,949630 610 630308,110 610 N/A8,612,244N/A Additions - 5,225 322,691 - 327,916 Total financial assets 218,813 252,560 121,773 101,994 66,723 39,493 842 924 4,149 3,573 412,300 398,544 N/A N/A Revaluations 170,500 62,667 - - 233,167 Transfers (100,000) 100,000 - - - Financial liabilities:Disposals - - (37,718) - (37,718) Customer depositsDepreciation 171,765 148,560 209,490 219,613- 8,174 9,235(159,510) - - (251,438)20 20 389,449 377,428- 2.20(410,948)2.66 Accounts payableAmortisation and - - - (59,597) (59,597) other liabilities Balance at 30 June -2016 - - 1,488,800- - 6,116,267- - - 3,273811,484 2,763 3,273248,5132,763 N/A8,665,064N/A Total financial liabilities 171,765 148,560 209,490 219,613 8,174 9,235 - - 3,293 2,783 392,722 380,191 N/A N/A N/A - not applicable for non-interest bearing financial instruments. 47

50 31 48 WAW Credit Union Co-operative Limited WAWAnnual Credit Review Union and Co Financial-operative Statements Limited Annual Review and FinancialABN 48Statements 087 651 787 ABN 48 087 651 787 Notes to the Financial Statements for the year ended 30 June 2016 (contʼd) Notes to the Financial Statements for the year ended 30 June 2016 (contʼd)

26. 12Financial. Property, instruments plant and (contʼd) equipment (contʼd)

(c) b)MaturityReconciliations profile of financial assets and liabilities Monetary assets and liabilities have differing maturity profiles depending on the contractual terms, and in the case of loans the repayment amount and frequency. TheReconciliations table below shows of the the carrying period amountsin which differentfor each classmonetary of property, assets andplant liabilities and equipment will matu arere andset outbe eligiblebelow: for renegotiation or withdrawal. In the case of loans, the table shows the period over which the principal outstanding will be repaid based on the remaining period to the repayment date assuming contractual repayments are maintained, and is subject to change inLand the event repaymentBuildings conditions Plantare varied. and equipment Financial assets and liabilitiesLeasehold are at the undiscounted Totalvalues (including future interest expected to be earned or paid). Accordingly, these values will not agree to the carrying amountsimprovements of the Statement of Financial Position. $ $ $ $ $

Balance at 1 July 2014 1,418,300 6,246,768 574,101 367,707 Total8,606,876 carrying amount per From 3 to 12 No maturity Total cash flows Financial Additions Within 3 months From- 1 to 5 years 25,169More than 5 years 476,016 - 501,185 months Statement of instruments Revaluations - - - - Financial Position- Transfers - (3,200) (1,200) - (4,400) Disposals 2016 2015 2016 2015 -2016 2015 201- 6 2015 (35,157)2016 2015 2016 -2015 2016 (35,157)2015 $ʼ000 $ʼ000 $ʼ000 $ʼ000 $ʼ000 $ʼ000 $ʼ000 $ʼ000 $ʼ000 $ʼ000 $ʼ000 $ʼ000 $ʼ000 $ʼ000 Depreciation - (160,852) (235,811) - (396,663) Financial assets: Amortisation - - - (59,597) (59,597) Cash and cash 79,887 73,232 1,012 12,157 10,076 - - - 2,940 2,520 93,915 87,909 93,372 87,345 equivalents Balance at 30 June 2015 1,418,300 6,107,885 777,949 308,110 8,612,244 Other receivables ------261 189 261 189 579 443 Customer loansBalance and at 1 July 2015 1,418,300 6,107,885 777,949 308,110 8,612,244 13,952 14,613 20,554 20,355 101,708 99,863 356,401 355,094 - - 492,615 489,925 317,719 310,146 advances (gross)Additions - 5,225 322,691 - 327,916 Other financialRevaluations assets - - - 170,500- - - 62,667- - 630- 610 630 - 610 630233,167610 Total financialTransfers assets 93,839 87,845 21,566 32,512(100,000)111,784 99,863100,000356,401 355,094 3,831- 3,319 587,421 578,633- 412,300 398,544- Financial liabilities:Disposals - - (37,718) - (37,718) Depreciation - (159,510) (251,438) - (410,948) Customer deposits Amortisation279,445 270,282 105,352 102,346 -8,174 9,241 - - - 20- 20 392,991(59,597)381,889 389,449(59,597)377,428 Accounts payable and Balance at 30 June- 2016 - - 1,488,800- - 6,116,267- - - 811,484 248,513 8,665,064 other liabilities 1,445 466 1,445 466 3,273 2,763 Total financial 279,445 270,282 105,352 102,346 8,174 9,241 - - 1,465 486 394,436 382,355 392,722 380,191 liabilities

5131 WAW Credit Union Co-operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 Limited 651 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the financial statements ContinuingFor the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

The Directors have in place a progressive training and development program, thereby ensuring that the 26. Financial instruments (contʼd) Directors are up to date with current trends in the financial services market place. The Directors must complete a minimum 60 hours of CPD per triennium. The following table reports on the hours undertaken (d) Financial instruments fair value by each Director for the year ended 30 June 2016. The fair value is required to be disclosed where the financial instruments are not measured at Directorfair value in the Statement of FinancialCPD Hours Position.to 30/6/1 Disclosure6 of fair value is not required when R Powerthe carrying amount is a reasonable approximation60.75 of fair value. M DixenAssets where the fair value is lower than80.50 the book value have not been written down in the D Iversonaccounts of the Credit Union on the basis60.25 that they are held to maturity or, in the case of loans, D McGrathall amounts due are expected to be recovered82.50 in full. B MunkThe Credit Union has assessed that, at61.75 balance date, the carrying amount of all financial R OʼHaganinstruments approximates fair value. 35.25The description of the valuation techniques and assumptions are detailed below: T Frazer [appointed 25/11/15] 26.50 T Toohey [retiredCash 25/11/15and liquid] assets due from other88.25 financial institutions: The carrying values of cash and liquid assets and receivables due from other financial institutions redeemable within 12 months approximates their fair value as they are short All Directors have achieved in excess of the Credit Unionʼs targeted 60 hours (or the applicable pro rata term in nature or are receivable on demand. The floating rate note securities are hours) for the triennium 1 July 2013 to 30 June 2016. considered short term in nature as the interest rate is repriced every 90 days. During the financialCustomer year, loans the Directors and advances: continued a self-assessment process on the ongoing development of a knowledgeThe andmajority skills of base the Creditrequired Unionʼs to carry loans out are the variable Director rate role loans. and Theduties. carrying The annualamount CPD of program is structuredthese loans to isaddress considered the knowledge to approximate and skills fair value. required Theto net fulfil fair the values duties of ofany a nonDirector variable of an Authorised Depositrate loans-taking are Institution estimated. using discounted cash flow analysis, based on current incremental lending rates for similar types of lending arrangements. The net fair value of Principal activitiesimpaired loans was calculated by discounting expected cash flows using a rate which includes a premium for the uncertainty of the flows. The principal activity of the Credit Union is to raise funds from the Credit Unionʼs customers for the Customer deposits: purpose of making loans to customers. No significant change in the nature of the activity has occurred The fair value of call and variable rate deposits and fixed rate deposits repricing within 60 during the year. months is the amount shown in the Statement of Financial Position. The maximum term for fixed term deposits accepted by the Credit Union is 5 years. Trading results The Credit Union has assessed its own credit risk in regards to the fair value of deposits, The profit forand the has financial assessed year that before no material income valuation tax was adjustment $1,684,061 is required.(2015: $1,802,861). Income tax expense wasShort $551-,term111 ( 201borrowings:5: $528,902). The carrying amount approximates fair value because of their short term to maturity. Review of operations Long-term borrowings: Net loans andThe advances fair values for theof long year-term have borrowings increased areby $ estimated7,575,455 usingto $3 1discounted7,676,801 .cash flow analysis, Deposits increasedbased onduring current the incrementalyear by $12 ,borrowing020,880 to rates $389 for,449 similar,112. types of borrowing arrangements. Equity duringAccounts the year has payable increased and byother $1, 321liabilities:,966 to $27,040,780. The carrying amount approximates fair value as they are short term in nature. Dividends Other financial liabilities: The Credit UnionThis includesdoes not interesthave permanent payable andshare other capital payables and has for therefore which thenot carryingpaid or declaredamount anyis dividends for consideredthe financial to year. be a reasonable approximation of fair value given the short-term nature.

State of affairs

In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union during the financial year under review.

5 52 49 WAW Credit Union Co-operative Limited WAW Credit Union Co-Operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 Limited 651 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the financial statements ContinuingFor the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

The26. DirectorsFinancial have instruments in place a progressive (contʼd) training and development program, thereby ensuring that the Directors(e) Categories are up to dateof financial with current instruments trends in the financial services market place. The Directors must complete a minimum 60 hours of CPD per triennium. The following table reports on the hours undertaken by each TheDirect followingor for the informationyear ended classifies 30 June the 201 financial6. instruments into measurement classes.

2016 2015 Director CPD Hours to 30/6/16 $ $ R Power Financial assets 60.75 M DixenCustomer loans and receivables – carried80.50 at D Iversonamortised cost 60.25 D McGrathCash and cash equivalents 82.50 93,371,762 87,344,817 Other receivables 578,727 443,024 B Munk Customer loans and advances (gross)61.75 317,718,755 310,146,208 R OʼHagan 35.25 411,669,244 397,934,049 T Frazer [appointed 25/11/15] 26.50 T TooheyAvailable[retired for 25/11/15 sale investments] – carried at88.25 cost Other financial assets 629,912 609,912 All Directors have achieved in excess of the Credit Unionʼs targeted 60 hours629,912 (or the applicable609,912 pro rata hours) for the triennium 1 July 2013 to 30 June 2016. Total financial assets 412,299,156 398,543,961 During the financial year, the Directors continued a self-assessment process on the ongoing development of a knowledgeFinancial and liabilities skills base required to carry out the Director role and duties. The annual CPD programCarried is structured at amortised to address cost the knowledge and skills required to fulfil the duties of a Director of an Authorised AccountsDeposit-taking payable Institution and other. liabilities 3,272,657 2,763,384 Customer deposits (Including customer shares) 389,449,112 377,428,232 Principal activities 392,721,769 380,191,616

The principalTotal financial activity ofliabilities the Credit Union is to raise funds from the Credit392,721,769 Unionʼs customers380,191,616 for the purpose of making loans to customers. No significant change in the nature of the activity has occurred during27. theFair year. value measurement

TradingFair results value hierarchy The following table highlights the Credit Unionʼs assets and liabilities, measured or disclosed at fair value, using a three level hierarchy, based on the lowest level of input that is significant to The profit for the financial year before income tax was $1,684,061 (2015: $1,802,861). Income tax the entire fair value measurement, being: expense was $551,111 (2015: $528,902). Level 1: Quoted prices (unadjusted) in active markets for identical assets of liabilities that the entity can access at the measurement date; ReviewLevel of operations 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; Net loansLevel and 3advances: Unobservable for the inputs year have for the increased asset or byliability. $7,575,455 to $317,676,801. Deposits increased during the year by $12,020,880 to $389,449,112. Equity during2016 the year has increased by $1,321,966Levelto $2 17,040,780Level. 2 Level 3 Total Assets measured at fair value $ $ $ $ DividendsLand and buildings - 7,605,067 - 7,605,067 Investment properties - - - - The Credit TotalUnion assets does not have permanent share capital- and has7,605 therefore,067 not paid or- declared7,605,067 any dividends for the financial year. 2015 Level 1 Level 2 Level 3 Total State ofAssets affairs measured at fair value $ $ $ $ Land and buildings - 7,526,185 - 7,526,185 In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union Investment properties - - - - during the financial year under review. Total assets - 7,526,185 - 7,526,185

5 50 53 WAW Credit Union Co-operative Limited Annual Review and Financial Statements ABN 48 087 651 787 WAW Credit Union Co-operative Limited Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Notes to the financial statements ContinuingFor the year professional ended 30 Junedevelopment 2016 (contʼd) (CPD)

The27. DirectorsFair value have measurement in place a progressive (contʼd) training and development program, thereby ensuring that the Directors are up to date with current trends in the financial services market place. The Directors must The Credit Union has assessed that, at balance date, the carrying amount of all financial complete a minimum 60 hours of CPD per triennium. The following table reports on the hours undertaken instruments approximates fair value. Refer to Notes 12 and 26(d). by each Director for the year ended 30 June 2016. Valuation techniques for fair value measurements categorised with level 2 DirectorLand and buildings, including investmentCPD Hours properties,to 30/6/1 have6 been valued based on similar assets, R Powerlocation and market conditions. 60.75 M Dixen 80.50 28. Subsequent events D Iverson 60.25 D McGrathMr Peter K Challis retired as Chief Executive82.50 Officer and Company Secretary of the Credit B MunkUnion on 23 September 2016, and Mr Michael61.75 A Mack was appointed as Chief Executive Officer and Company Secretary of the Credit Union on 23 September 2016. R OʼHagan 35.25 T FrazerOther [appointed than that 25/11/15] noted above, there are no26.50 issues or events that in the opinion of the Directors T Tooheywill[retired significantly 25/11/15 impact] on the operations88.25 of the Credit Union, the results of those operations, or the state of affairs of the Credit Union in subsequent financial years. All Directors have achieved in excess of the Credit Unionʼs targeted 60 hours (or the applicable pro rata hours) for the triennium 1 July 2013 to 30 June 2016. 29. Corporate information During the financial year, the Directors continued a self-assessment process on the ongoing development of a knowledgeThe Credit and Union skills is abase company required registered to carry under out the CorporationsDirector role Act.and duties. The annual CPD program is structured to address the knowledge and skills required to fulfil the duties of a Director of an AuthorisedThe Deposit Head Office-taking of Institution the business. and the registered office is 11 Stanley Street, Wodonga, Victoria. Principal activities The nature of the operations and its principal activities are the provision of deposit taking The principalfacilities activity and loan of thefacilities Credit to Unioncustomers is to of raise the Credit funds Union. from the Credit Unionʼs customers for the purpose of making loans to customers. No significant change in the nature of the activity has occurred during the year.

Trading results

The profit for the financial year before income tax was $1,684,061 (2015: $1,802,861). Income tax expense was $551,111 (2015: $528,902).

Review of operations

Dividends

The Credit Union does not have permanent share capital and has therefore not paid or declared any dividends for the financial year.

State of affairs

In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union during the financial year under review.

5 54 51 WAW Credit Union Co-operative Limited WAW Credit Union Co-Operative Limited Annual Review and Financial Statements WAW Credit Union CoABN-operative 48 087 651Limited 787 Annual Review and Financial Statements ABN 48 087 651 787 Directorsʼ report (contʼd) Directorsʼ declaration Continuing professional development (CPD)

TheIn Directors the opinion have of thein place Directors a progressive of WAW Credit training Union and Codevelopment-operative Limitedprogram, (the thereby Credit ensuringUnion):- that the Directors are up to date with current trends in the financial services market place. The Directors must complete1. the a minimumfinancial statements60 hours of CPDand notes,per triennium. set out The on followingpages 6 table to 51 reports, are onin theaccordance hours undertaken with the by eachCorporations Director for the Actyear 2001 ended, including: 30 June 2016.

(a) giving a true and fair view of the Credit Unionʼs financial position as at 30 June 2016 and Director of its performance for theCPD year Hours endedto on 30/6/1 that date;6 and R Power 60.75 M Dixen (b) complying with the Accounting Standards80.50 and Corporations Regulations 2001; and D Iverson 60.25 2. there are reasonable grounds to believe that the Credit Union will be able to pay its debts as and D McGrath when they become due and payable. 82.50 B Munk 61.75 R OʼHagan 35.25 T Frazer [appointed 25/11/15] 26.50 Dated at Wodonga this 28th day of September 2016. T Toohey [retired 25/11/15] 88.25

All DirectorsSigned in haveaccordance achieved with in aexcess resolution of the of theCredit Directors: Unionʼs targeted 60 hours (or the applicable pro rata hours) for the triennium 1 July 2013 to 30 June 2016.

Principal activities

The principal activity of the Credit Union is to raise funds from the Credit Unionʼs customers for the purposeRichard of makingA Power loans- Director to customers. No significant change in theDavid nature J Iverson of the- activiDirectorty has occurred duringChair the, Boardyear. of Directors Chair, Audit Committee

Trading results

The profit for the financial year before income tax was $1,684,061 (2015: $1,802,861). Income tax expense was $551,111 (2015: $528,902).

Review of operations

Dividends

The Credit Union does not have permanent share capital and has therefore not paid or declared any dividends for the financial year.

State of affairs

In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union during the financial year under review.

5 52 55 WAW Credit Union Co-operative Limited Annual Review and Financial Statements ABN 48 087 651 787 Crowe Horwath Albury ABN 16 673 023 918 Directorsʼ declaration Member Crowe Horwath International Audit and Assurance Services 491 Smollett Street Albury NSW 2640 Australia In the opinion of the Directors of WAW Credit Union Co-operative Limited (the Credit Union):- PO Box 500 Albury NSW 2640 Australia 1. the financial statements and notes, set out on pages 6 to 51, are in accordance with the Tel 02 6021 1111 Corporations Act 2001, including: Fax 02 6041 1892 www.crowehorwath.com.au (a) giving a true and fair view of the Credit Unionʼs financial position as at 30 June 2016 and of its performance for the year ended on that date; and

(b) complying with the Accounting Standards and Corporations Regulations 2001; and Independent Auditorʼs Report to the Shareholders of WAW Credit 2. there are reasonable grounds to believe that the Credit Union will be able to pay its debts as and Union Co-operative Limited when they become due and payable.

Report on the financial report Dated at Wodonga this 28th day of September 2016. We have audited the accompanying financial report of WAW Credit Union Co-operative Limited (the Company), which comprises the statement of financial position as at 30 June 2016, and the statement Signed in accordance with a resolution of the Directors: of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory notes and the Directorsʼ declaration.

Directorsʼ responsibility for the financial report

The Directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal controls as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to Richard A Power - Director David J Iverson - Director fraud or error. Chair, Board of Directors Chair, Audit Committee Auditorʼs responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditorʼs judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the Companyʼs preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companyʼs internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Crowe Horwath Albury is a member of Crowe Horwath International, a Swiss verein. Each member firm of Crowe Horwath is a separate and independent legal entity. Liability limited by a scheme approved under Professional Standards Legislation other than for the acts or omissioons of financial services licensees. Crowe Horwath Albury is a member of Crowe Horwath International, a Swiss verein. Each member firm of Crowe Horwath is a separate and independent legal entity. Liability limited by a scheme approved under Professional Standards Legislation other than for the acts or omissions of 55 financial services licensees. 53 WAW Credit Union Co-operative Limited Annual Review and Financial Statements ABN 48 087 651 787

Directorsʼ report (contʼd)

IndependenceContinuing professional development (CPD)

InThe conducting Directors ourhave audit, in place we have a progressive complied with training the independenceand development requirementsprogram, ofthereby the ensuring that the CorporationsDirectors are Actup 2001.to date with current trends in the financial services market place. The Directors must complete a minimum 60 hours of CPD per triennium. The following table reports on the hours undertaken Auditorʼsby each Direct opinionor for the year ended 30 June 2016.

InDirector our opinion, the financial report of WAWCPD Cred Hoursit Unionto 30/6/1 Co-operative6 Limited is in accordance withR Power the Corporations Act 2001, including: 60.75 M Dixen 80.50 I. giving a true and fair view of the Companyʼs financial position as at 30 June 2016 D Iverson and of its performance for the year ended60.25 on that date; and D McGrath 82.50 B MunkII. complying with Australian Accounting61.75 Standards and the Corporations Regulations R OʼHagan 2001. 35.25 T Frazer [appointed 25/11/15] 26.50 T Toohey [retired 25/11/15] 88.25

All Directors have achieved in excess of the Credit Unionʼs targeted 60 hours (or the applicable pro rata CROWEhours) for HORWATH the triennium ALBURY 1 July 2013 to 30 June 2016.

During the financial year, the Directors continued a self-assessment process on the ongoing development of a knowledge and skills base required to carry out the Director role and duties. The annual CPD program is structured to address the knowledge and skills required to fulfil the duties of a Director of an DAVIDAuthorised MUNDAY Deposit-taking Institution. Partner Principal activities Dated at Melbourne this 28th day of September 2016. The principal activity of the Credit Union is to raise funds from the Credit Unionʼs customers for the purpose of making loans to customers. No significant change in the nature of the activity has occurred during the year.

Trading results

The profit for the financial year before income tax was $1,684,061 (2015: $1,802,861). Income tax expense was $551,111 (2015: $528,902).

Review of operations

Dividends

The Credit Union does not have permanent share capital and has therefore not paid or declared any dividends for the financial year.

State of affairs

In the opinion of the Directors there were no significant changes in the state of affairs of the Credit Union during the financial year under review.

5 54 WAW_AnnRep10_InsBk:Layout 2 20/9/10 11:31 AM Page 1 WAW_AnnRep10_InsBk:Layout 2 20/9/10 11:31 AM Page 1 WAW_AnnRep10_InsBk:Layout 2 20/9/10 11:31 AM Page 1

WAW_AnnRep10_InsBk:Layout 2 20/9/10 11:31 AM Page 1

MSC Locations MSC Locations MSC Locations

CustomerMSC$ LAlbuory ca tServiceions Centre Locations$ Tallangatta $ ACelbnturroyAlbury $ T5a5lTloawngonagttSatreet $ ACKeilebnwturaroySAtlrbeuerty $ 5PTa5hloTlonawen:go(na0g2tt)Sa6tr0e7e1t 3036 Fax: (02) 6071 3041 CPKehienowtnraeo:SA(t0lrbe2ue)rt6y051 3600 Fax: (02) 6051 3602 P55hoTonwe:o(n0g2)S6tr0e7e1t 3036 Fax: (02) 6071 3041 $ APKhilebowunarey:S(t0re2e)t6051 3600 Fax: (02) 6051 3602 $ TWPahalollnalaen:Wg(a0a2tlt)la6071 3036 Fax: (02) 6071 3041 $ CPB500ehenoet nDeancreoh:wA(0lob 2Streetru)tr6hy051 3600 Fax: (02) 6051 3602 $ 5W756aTCloolawmWomnagelrlScaitareleStreet $ KB1Phone:9ieeeCwacahmSw p(02)troSertetr teh6051et 3600 Fax: (02) 6051 3602 $ P7W6haoClnolaem:Wm(0ae2lr)lca6ia0l72S19tr32e03e39t62 Fax: (02) 607219 32044312 $ PB19heoeCnacehm:wp(0oS23rt)tre65he07t5218 386100 Fax: (023) 65075218 3262024 P76hoCnoem: m(0e2r)c6ia0l2S9tr2e3e9t2 Fax: (02) 6029 2432 1P9hoCnaem:p(0S3t)re5e7t28 8100 Fax: (03) 5728 2204 $ WPhaolnlwaea:W(0a2l)la6029 2392 Fax: (02) 6029 2432 $ PBCheoielntceh:rw(n0o3r)t5h728 8100 Fax: (03) 5728 2204 $ 7W6aCllwowmaaBmuesrhciNaluSrstrinegetCentre $ 1C490hiCloatemnrnpneSsstrSeterteet $ PWMhaoillnwweSaa:tB(re0ue2st)h6N0u2r9si2n3g9C2enFtarex: (02) 6029 2432 $ PC40hoiClnoten:rn(ne0s3s)S5t7re2e86t81120206 Fax: (03) 57286 21290543 MPWhaoilnweSa:tB(re0ue2st)h6N0u3r7si1n4g9C9enFtarex: (02) 6037 1494 4P0hoCnoen:n(e0s3s)S5t7re2e6t1226 Fax: (03) 5726 1953 $ WPMhaoilnweSa:t(re0e2t) 6037 1499 Fax: (02) 6037 1494 $ PCohorilrntyeo:rn(0g3) 5726 1226 Fax: (03) 5726 1953 $ WPhaolnwngea:aB(r0ua2st)hta6N0u3r7si1n4g9C9enFtarex: (02) 6037 1494 $ 4C304orCHroaynnonsnoegnssSSttrreeeett $ MW12aFinogrSdatrrSeatertetteat $ PC34ohorHrnayeno:sn(o0gn32)S56tr70e27e6t 12266 Fax: (032) 5670276 12905034 $ P1W2haoFnnogerd:a(rS0at23rte)tea65t073273 14419393 Fax: (023) 65073273 14419348 3P4hoHnaen:s(o0n2)S6tr0e7e6t 1266 Fax: (02) 6076 2004 P12hoFnoerd: (S0t3re)e5t723 4133 Fax: (03) 5723 4138 $ PCLaohvorrninyeog:n(t0og2n) 6076 1266 Fax: (02) 6076 2004 $ WPhoaondnoge:na(rg0aa3t)ta5723 4133 Fax: (03) 5723 4138 $ 3LCe4anvHtiranongLstoaonvninStgrteoent $ 1W21oFSdotoardnlgSetyareSetrteet $ PLCGeahrinvotnirnteohg:L(tRa0oov2nai)nd6g0to7n6 1266 Fax: (02) 6076 2004 $ P1W1hooSdntoaen: (lge0ya32)St56r70e2e32t 48143434 Fax: (032) 5670232 48143081 366CGPehrinot nGriffithrteoh:L(Ra0ov2ai)nd6g 0toRoad5n1 4555 Fax: (02) 6051 4551 P11hoSntaen: (le0y2)St6r0e2e2t 8444 Fax: (02) 6022 8401 $ Phone:GLPahrivonintehg: (02)(tR0oo2na)d 66051051 44555555 FFax:ax: ((02)02) 66051051 44551551 $ WPYahocodknoae:n(dg0a2n) 6d0a2h2 8444 Fax: (02) 6022 8401 PCMehonoutnrleoa:Lm(a0ve2ii)nn6g0to5n1 4555 Fax: (02) 6051 4551 1Y3a14cSHktiagnhldeSyatrnSetedrtaeeht GMShroiiruetloahmRcoeeaisdn PY3a4hcoHkniage:nh(dS0at2rn)e6edt0a2h27 81424742 Fax: (02) 60227 8140051 SMPhoioruenleoa:m(0ce23ei)sn65085817 4553553 Fax: (023) 65085817 4553512 3P4hoHnige:h(S0t2r)e6et027 1272 Fax: (02) 6027 1051 PShioreneo:(0c3e)s5887 5353 Fax: (03) 5887 5352 $ YP=ahAcoTknMae:na(d0va2in)la6db0al2eh7a1t 2th7i2s MFSaCx: (02) 6027 1051

$ PMhoyoruntlelae:mf(0oe3rid)n5887 5353 Fax: (03) 5887 5352 $ 3=174A HHighTiMgha SStreetvatrielaebtle at this MSC $ MS2h7yiCrreltylodeefocSretdrseet $ P=Phone:hAoTnMe: a((02)0va2i)l a66027b0l2e7a 1t12722th7i2s M FFax:SaCx: ((02)02) 66027027 11051051 $ M2P7hyoCrnltyelde:ef(0oS3rtd)re5e87t8572 51375634 Fax: (03) 5785817 15036532 2P7hoCnlyed:e(0S3t)re5e7t52 1764 Fax: (03) 5751 1063 $ = AATMTM aavailablevailable aatt tthishis MCSCSC $ PMhyorntele: f(0o3rd) 5752 1764 Fax: (03) 5751 1063 27 Clyde Street Phone: (03) 5752 1764 Fax: (03) 5751 1063

Web: www.wawcu.com.au TWeelebp:hwownewb.wanakwincug.c(Ionmfo.lainuk) 1300 361 766 Web: www.wawcu.com.au GTeelneeprhaolneenqbuanirkieinsg(D(iIrnefcotlliinnkk))11330000336618756565 Telephone banking (Infolink) 1300 361 766 WebGWeenbe :(Netlink)rwalwenwq.wuia rwww.wawcu.com.auiwescu(D.cioremc.taliunk) 1300 368 555 General enquiries (Directlink) 1300 368 555 TelephoneTelephone bankingbanking (Infolink)(Infolink) 13001300 361361 766766 GeneralGeneral enquiriesenquiries (Directlink)(Directlink) 13001300 368368 555555

81158 WAW-Annual Report Art- Cover 2015-16-A4.indd 3 13/10/2016 11:24 am WAW Credit Union Co-Operative Limited ABN: 48 087 651 787 AFSL: 247298 Australian Credit Licence: 247298 Registered office: 11 Stanley Street, Wodonga, Victoria 3690 Telephone: 02 6022 8444 Directlink: 1300 368 555

Regional Customer Service Centres Albury • Beechworth • Chiltern • Corryong • Lavington • Moulamein • Myrtleford • Tallangatta Walla Walla • Walwa • Wangaratta • Wodonga • Yackandandah

Phone Based Services Directlink 1300 368 555 – Loans, insurance, term deposits and information Infolink 1300 361 766 – 24 hour telephone banking and BPAY

Internet and Email Website: www.wawcu.com.au Information, Netlink and Mobile Netlink Internet Banking Email: [email protected] Information and Communication

Affiliations and Associations COBA – Customer Owned Banking Association • World Council of Credit Unions The Association of Asian Confederation of Credit Unions • TransAction Solutions Ltd Credit Union Financial Support System Ltd • Visa Worldwide Ultradata Australia • Institute for Strategy, Innovation & Leadership

Bankers Cuscal Ltd • National Australia Bank

Insurers QBE Insurance (Australia) Ltd • GMHBA Health Insurance Genworth Financial

Auditors External – Crowe Horwath, Albury Internal – Bob Travers & Associates, Albury

External Dispute Resolution Provider Financial Ombudsman Service

Solicitors HL, Wodonga • Mark Swivel Legal, Sydney Purcell Partners, Melbourne • Daniels Bengtsson, Sydney

Wealth Management Quadrant Financial Planning

Key Regulators APRA – Australian Prudential Regulation Authority ASIC – Australian Securities and Investments Commission ATO – Australian Taxation Office Austrac Privacy Commissioner

WAW Credit Union is an authorised deposit-taking institution that receives the Commonwealth Government Financial Claims www.wawcu.com.au Scheme deposit guarantee.

81158 WAW-Annual Report Art- Cover 2015-16-A4.indd 4 13/10/2016 11:24 am