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Annual Report
2016
The Annual General Meeting of Caherdavin & District Credit Union Limited will be
held in the Strand Hotel, Limerick on 21st December 2016 at 8.00pm.
Members are required to bring their passbooks as means of identification.
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NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the 41st Annual General Meeting of Caherdavin & District Credit Union
Ltd. will take place in the Strand Hotel, Ennis Road, Limerick on Wednesday 21st December, 2016
at 8.00p.m. sharp. Parking will be free to members attending the AGM.
Signed: Carmel Cronin, Hon Secretary.
MEMBERS MUST BRING THEIR
PASSBOOKS TO GAIN ENTRY
TO THE AGM
NOTICE OF ELECTIONS
Elections will be held to fill 5 vacancies on the Board of Directors, 1 vacancy on the Board Oversight
Committee and the position of Auditor. In accordance with Fitness and Probity requirements as
per the Central Bank Reform Act 2010 nominations for positions of Director or member of Oversight Committee must have been received by the Nomination Committee before the 30/10/2016
in order for due diligence to be carried out on the candidate. Please note that due to these requirements no nominations may be accepted from the floor.
Reg. Office: Caherdavin and District Credit Union Ltd., Credit Union House, Redgate, Limerick.
NOTICE OF MOTIONS: RULE CHANGES
That this Annual General Meeting to amend the following: Amendment of Rule 5 (1)
That this Annual General Meeting resolves to amend Rule 5(1) of the Rules of the Credit Union by
the insertion of the following as (vii) after (vi) and the renumbering of (vii) as (viii)
“(vii) the provision of the following additional service(s) by the credit union to the members subject
to the prior approval of the Registrar of Credit Unions and any other permissions or licences that
may be required by law:
Member Personal Current Account Services “
Rule 13(2) of the Rules of the Credit Union to read as follows:
(2) A person shall be treated as having the qualification required for admission to membership of
the credit union if he is a member of the same household as, and is a member of the family of, another person who is a member of the credit union and who has a direct common bond with those
other members. However, a child or step-child of a member, where such child or step-child is under
the age of 18 years and living outside the common bond but resident in the Republic of Ireland or
the United Kingdom, shall not be precluded from membership of the credit union.
Rule 34(4) of the Rules of the Credit Union to read as follows:
(4) The credit union may make loans to persons ceasing to have the common bond required of
members of the credit union provided the total amount outstanding in respect of all such loans
shall not exceed 25 per cent., or such larger percentage as may be approved by the Bank, of the
total amount outstanding in respect of all loans made by the credit union to its members.
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ANNUAL
REPORT 2016
CONTENTS
PAGE
Agenda ........................................................................................................................................................1
Standing Orders ..........................................................................................................................................2
Invocation ....................................................................................................................................................3
Report of the Chairman ..............................................................................................................................4
Report of the CEO ......................................................................................................................................6
Report of the Board of Directors ................................................................................................................8
Independent Auditors’ Report ..................................................................................................................10
Income and Expenditure Account ............................................................................................................12
Statement of Other Comprehensive Income ............................................................................................13
Balance Sheet ............................................................................................................................................14
Statement of Changes in Reserves ..........................................................................................................15
Statement of Cashflows ............................................................................................................................16
Notes to the Financial Statements ............................................................................................................17
Schedules to the Income and Expenditure Account ................................................................................33
Report of the Board Oversight Committee ..............................................................................................35
Report of the Credit Committee ..............................................................................................................36
Report of the Credit Control Committee ................................................................................................36
Membership Report ..................................................................................................................................37
Report of the Insurance Officer ................................................................................................................38
Report of the Investment Committee ......................................................................................................39
Credit Union Information ..........................................................................................................................40
Why Make a Nomination? ........................................................................................................................42
Important Notice: Saving Stamps ............................................................................................................43
Office Opening Hours ..............................................................................................................................44
AGENDA
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
The acceptance by the Board of Directors of the authorised representatives of
members that are not natural persons.
Ascertainment that a quorum is present.
A welcome to our new members.
Adoption of Standing Orders.
Reading and approval (or correction) of the minutes of the last Annual General Meeting
and any intervening Special General Meeting.
Report of the Board of Directors.
Consideration of accounts and related matters.
Report of the Auditor.
Report of the Board Oversight Committee.
Declaration of Dividend.
Report of the Credit Committee.
Report of the Credit Control Committee.
Membership Report.
Report of the Insurance Officer.
Report of the Investment Committee.
Report of the Nominating Committee.
Appointment of Tellers.
Election of Auditor.
Election to fill vacancies on the Board Oversight Committee.
Election to fill vacancies on the Board of Directors.
Motions for Approval.
Any Other Business.
Announcement of Election Results.
Adjournment or close of meeting.
1
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Standing Orders
Model Standing Orders for Credit Unions (Republic of Ireland)
Reference: Recommendation 41(b) of the Planning Committee
1.
VOTING
Each member shall be entitled to one vote
irrespective of his/her shareholding, in accordance with section 82(2) of the Credit Union Act,
1997 (as amended).
2 – 3 ELECTION PROCEDURE
2 Elections to the board of directors, to the
board oversight committee and the position of
auditor shall be by majority vote and by secret
ballot. The 3 highest polling candidates shall
serve a three year term, the next 2 highest
polling candidates will serve a one year term.
3. When nominations are announced tellers shall
be appointed by the chair and ballot papers
shall be distributed. Nominations shall be in
the following order: (a) nominations for auditor; (b) nominations for members of the board
oversight committee; (c) nominations for directors. When voting is completed, the votes shall
be taken and tallied by the tellers. Any ballot
paper which contains votes for more than the
number required to be elected shall be void.
All elections shall be by secret ballot and by
majority vote. When the votes have been
counted by the tellers, the results shall be
announced by the chair. In the event that all
vacancies are not filled by the first ballot
further ballots shall be taken as required. In the
event of an equality of votes between candidates for the remaining vacancies not filled in
accordance with the above procedure one
further ballot shall be taken and should that
ballot fail to determine the issue, the vacancies
shall be filled by lot from among such candidates having an equality of votes.
2
4-9 MOTIONS
4. All motions from the floor of the AGM must be
proposed and seconded by members present
at the AGM and moved by the proposer. If the
proposer is absent when the motion is called,
the motion shall be deemed to have failed.
5. A proposer of a motion may speak for such
period as shall be at the discretion of the chair
of the meeting and shall have the right of reply
before the motion is put to the meeting for a
vote.
6. In exercising his/her right of reply, a proposer
may not introduce new material.
7. The seconder of a motion shall have such time
as shall be allowed by the chair to second the
motion.
8. Members are entitled to speak on any such
motion and must do so through the chair. All
speakers to any motion shall have such time as
shall be at the discretion of the chair.
9. The chair shall have the absolute
right to decide at any time
when a motion has been
sufficiently discussed and may put the motion
to the meeting giving the proposer the right
of reply before doing so.
10 – 15 MISCELLANEOUS
10. The chair of the board of directors shall be the
chair of any general meeting, except where
he/she is not available, in which case it shall be
the vice-chair, except where he/she is not
available, in which case the board shall decide
amongst themselves who shall act as chair on
any general meeting.
11. The chair may at his/her discretion, extend the
privilege of the floor to any person who is not
a member.
12. Matters not covered by the Agenda may be
introduced under “Any Other Business” at the
discretion of the chair.
13. The chairman’s decision on any matter relating
to these Standing Orders or interpretation of
same shall be final.
14. No member shall have more than one vote on
each question at any general meeting of the
Credit Union or any adjournment thereof
irrespective of his/her shareholding or the
number of accounts in his/her name in the
Credit Union provided, however, that except
in voting at elections, the presiding member
shall have a second or casting vote in the event
of equality of voting. Voting by proxy shall be
allowed only when a member other than a
natural person votes through a representative,
who is a member of the group, duly authorised
in writing for that purpose and accepted as
such by the board of directors.
15. Any matter to be decided upon by vote at the
AGM shall, unless otherwise expressly provided for by law or the rules, be decided upon
by simple majority.
16. SUSPENSION OF STANDING ORDERS
Any one of these orders or all of these Standing Orders may be suspended on a motion to
this effect receiving a two-thirds majority of
those present and entitled to vote.
17. ALTERATION OF STANDING ORDERS
Standing Orders may be amended or altered
at a general meeting and only if a motion to
this effect has received a two-thirds majority of
those present and voting.
18. ADJOURNMENTS
Adjournments of the AGM shall take place
only in accordance with section 81(1) of the
Credit Union Act, 1997 (as amended).
19. MEMBER RESPECT
Members are requested to show respect when
they are asking or replying to questions during
the meeting. This includes the tone and
content of the words used.
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Credit Union Invocation
ANNUAL
REPORT 2016
MAKE ME AN INSTRUMENT OF THY PEACE,
WHERE THERE IS HATRED, LET ME SOW LOVE,
WHERE THERE IS INJURY, PARDON,
WHERE THERE IS DOUBT, FAITH,
WHERE THERE IS DESPAIR, HOPE,
WHERE THERE IS DARKNESS, LIGHT,
AND WHERE THERE IS SADNESS, JOY.
O DIVINE MASTER,
GRANT THAT I MAY NOT SO MUCH SEEK
TO BE CONSOLED AS TO CONSOLE,
TO BE UNDERSTOOD AS TO UNDERSTAND,
TO BE LOVED AS TO LOVE,
FOR IT IS IN GIVING THAT WE RECEIVE,
IT IS IN PARDONING THAT WE ARE PARDONED,
AND IT IS IN DYING THAT WE ARE BORN TO ETERNAL LIFE.
IMPORTANT
INFORMATION
Notice regarding enclosed Members’ Statements
You should have received a statement for the period ended
26th November 2016 for your Credit Union accounts with this
AGM notification. If you have any questions regarding the
balance or transactions on your statement, please initially call
Caherdavin & District Credit Union Ltd on 061 455831.
If after speaking directly to the Credit Union your query is
not satisfactorily resolved, please contact the Credit Union’s
Internal Audit function MOET Accountants at 061 335574.
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REPORT OF THE
CHAIRMAN
Dear Members,
On behalf of the Board of Directors and myself, I
would like to extend a warm welcome to all of you
attending this year’s Annual General meeting. The
AGM is a timely opportunity to reflect on the
financial year just past – its successes and challenges – and also, to look forward to an exciting
year ahead for the credit union in 2017.
On 30th September 2016, St. Patrick’s Parish
(Limerick) Credit Union Ltd completed a transfer of
its engagements to Caherdavin & District Credit
Union Ltd. Initial discussions between the credit
unions commenced over 2 years ago, and after a
detailed and thorough due diligence process the
transfer was completed in September. The joining
together of our two credit unions creates a stronger
and more financially robust credit union that will be
able to continue to offer its now increased membership a broader and more extensive range of
services.
The Credit Union landscape in Ireland is rapidly
changing. In the recent past there were in excess
of 400 credit unions in Ireland. Today that number
is much reduced to c. 260 and continuing to decrease mainly through credit unions joining
together. During 2016, in our Limerick area we have
seen local credit union mergers. However, we have
also seen the taking over of some local credit
unions by ‘out of town’, non-Limerick based credit
unions. Your Board is committed to maintaining
Caherdavin & District Credit Union Ltd. as a Limerick centred credit union, catering for the needs of
the members locally and with a local Board of
Directors who govern the credit union on your
behalf and are based in Limerick city. As a Board,
we are mindful of the principle of keeping the
credit union local and in touch with its members,
and centred in our community.
4
Caherdavin & District Credit Union Ltd.’s membership is now in excess of 29,000. Our credit union
operates a six day service to its members including
Saturday opening in its St John’s office and late
opening in its Caherdavin office on Thursday and
Friday and St. Patrick’s office on Friday. Additionally, during 2016 we commenced the roll out
of our online offering including online and
mobile account access. I would
encourage our members to
access our services by visiting any of our five offices
in Caherdavin, William St, St. Patricks Road,
Moyross & South Hill, or alternatively accessing
their account by registering online at
www.caherdavincredit union.ie.
The reality is that as credit union operations
become more complex, through increasing levels
of compliance, regulation and oversight, each
credit union requires a certain level of scale to
become operationally efficient. Following on from
the St Patricks transfer, the Board are of a view that
the credit union should consolidate its operations
for a period prior to any future transfers or amalgamations.
For your Board of Directors, our role has also
changed dramatically in recent years, and in
particular since the 2012 Credit Union Act. The
separation of the Executive governance and
Operational management of the credit union was
significant. The level of scrutiny and due diligence
to be completed for any new directors putting
themselves forward is immense. I want to acknowledge the time invested in your credit union, by the
Board of Directors, the Board Oversight Committee, various Committee members and other
Volunteers who represent you the members. On
your behalf, I would like to thank them for the hours
and hours of service they volunteer on your behalf,
attending meetings, undertaking training and
countless other hours invested in the credit union.
The introduction of a new financial reporting
standard, FRS 102, dramatically altered the layout
of the financial accounts for 2016. Prior year
comparatives have been amended as the date of
transition for Caherdavin & District Credit Union Ltd
is 1st October 2014. However, the same year end
audit process was undertaken and full financial
statements are laid out in the annual report
booklet. Indeed, this year’s financial statements
include much more detailed notes, increasing the
overall number of pages to accommodate the
financial statements.
I would like to thank the external auditor and her
team, along with the CEO and Finance Officer in
ensuring that the Caherdavin & District Credit
Union Ltd. accounts were one of the first set of
credit union accounts approved under FRS 102, a
huge undertaking considering such a complex
amendment to financial reporting standards.
During 2016, over €12 million of new loans, equating to an average of €1 million per month, were
issued to over 3,400 Borrowers. Loans are
borrowed for a variety of purposes including motor,
home improvement, holiday, and education among
others. Lending money and providing a source of
credit is the most important service we offer. I
encourage more of our members, who borrow or
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who are thinking of borrowing to consider your
credit union as a source of this credit.
In August, 36 of our members attended a Focus
Group meeting in the Strand Hotel. The Focus
Group meeting was initiated by the Board of
Directors and its aim was to listen to our members.
We wanted to ensure that the services the credit
ANNUAL
REPORT 2016
It is fair to say that the night was a success as
members expressed their appreciation of ‘having
their say’ and ‘being listened to’. It is the Boards
intention to facilitate further Focus Group meetings
during 2017. The members who attended the
Focus Group were drawn from members who
responded to the Newsletter invite, others who
were vocal at AGMs in the past, and a random
Group of members across various age brackets. If
you are interested in taking part in future Focus
Groups and having your say, we would be delighted
to hear from you.
FINANCIAL YEAR HIGHLIGHTS
Total Assets
Total Loans
Total Shares
Annual Surplus
The responses collected on the
night will assist us plan for the
future of the Credit Union and
ensure that the Boards preparation
and adoption of future Strategic
Plans are aligned to the needs of the
membership.
€110 million
€21.3 million
€88 million
€632,524
union offered and the quality of the service delivery
was in line with our member’s needs and preferences. A Board Director hosted a group discussion
on six core topics and this formed the basis of the
discussion for the evening. The topics covered
were:
I want to acknowledge the contribution of our hard
working staff team, led by Caroline Long, CEO. In
what has become an increasingly busy office
environment, the staff team are meeting the needs
of members and in particular delivering speedy
loan turnaround times. Without their dedication
and professionalism, we would not be able to offer
the services we offer today.
1.
What do you like about your
Credit Union?
2.
Areas for improvement in the
Credit Union.
Finally, I want to pay tribute to Stella Brougham and
Deirdre Doogan who stepped down as Directors
during the year. Each gave generously of their time
to serve you the members of the credit union.
3.
How can the Credit Union
work better in the community?
James Stewart
Chairman
4.
Distribution channels –
how to better access services?
5.
Products and services
6.
Where do you see the
Credit Union in the
future?
GOT A QUESTION?
If you have a question arising from the content of the 2016 Annual Report,
or a general Credit Union question, we would be delighted to discuss same
with you in any of our 5 offices.
If you have a question you intend asking at the AGM, it would be
preferable for you to provide us with the question in advance of the
A.G.M. in order for us to have the information to hand to enable us
provide you with the fullest answer possible.
The latest date for receipt of questions in writing will be
the 19th December 2016. Please email your question
to [email protected].
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REPORT OF THE
CEO
Dear Members,
2016 was another great year for Caherdavin &
District Credit Union Ltd. The year was noteworthy
for the following reasons: l
Our total loans to members increased
by 6% to €21.3 million;
l
€12 million of new loans were issued
during 2016 equating to an average of
€1 million of loans paid out each
month (comprising of €10.6 million
issued by Caherdavin & District Credit
Union Ltd. and €1.5 million issued by
St. Patrick’s Parish (Limerick) Credit
Union) Ltd.;
l
Total assets of the Credit Union
increased for the first time to in excess
of €100 million;
l
Membership of the Credit Union
increased to over 29,000 members;
l
The Transfer of Engagement of St.
Patrick’s Parish (Limerick) Credit Union
Ltd. completed in September 2016,
creating a financially stronger, local
Limerick credit union – open and
lending to its membership.
OUR MEMBERS ARE BORROWING
For the first time since 2009, our total loans to
members increased, year on year by 6%. This reflected a renewed confidence among our members
that after years of recession the time was right to
borrow once more. We are delighted that our
members choose Caherdavin & District Credit
Union Ltd. as their Lender of Choice. Our Loan
Book at year end 30th September 2016 had
increased to €21.3 million, made up of more than
4,200 individual loans to our members. A key
success factor of a credit union is the percentage
of members who borrow, and we aim to increase
our borrowing members even more during 2017.
The more of our members who use the credit union
to borrow, the greater the range of services that we
will be able to provide for all our membership
in the future.
6
Our members borrow for a variety of purposes
including motor, home improvements, education
and holidays. We are delighted to be able to serve
our membership with a high percentage of loan
approvals and a speedy loan decision timeframe.
The key variable for Loan Officers in making a
lending decision is for a member to provide
evidence of their ability to repay a loan.
As we look forward to 2017, I am encouraging you
as members of your local credit union, to use the
services we provide, and in particular if you are
thinking of borrowing money for whatever purpose
to take a loan from Caherdavin & District Credit
Union Ltd., your local lender. We have a team of
professional staff ready to welcome you and assist
you, and remember, all loan decisions are made
locally.
TRANSFER OF ENGAGEMENT OF ST. PATRICK’S
PARISH (LIMERICK) CREDIT UNION LTD.
On 30th September 2016, we completed the
transfer of engagements of St. Patrick’s Parish
(Limerick) Credit Union Ltd. This was a project that
was over two years in planning prior to the September date. There was an intense and robust due
diligence and information gathering period to
ensure that the merger would enhance the service
given to members of both credit unions. I want to
welcome all the members of St. Patrick’s Parish
(Limerick) Credit Union Ltd. who will continue to
have a credit union service in their local community.
I also wish to thank the former Directors of St
Patrick’s Parish (Limerick) Credit Union Ltd. and the
staff team who worked tirelessly on the project to
ensure that the local credit union office, established
almost 50 years ago, was maintained in their
community.
Caherdavin & District Credit Union Ltd., are
delighted to be able to offer our services across our
five offices in Caherdavin, St. John’s office, St.
Patrick’s office, South Hill and Moyross and we look
forward to continuing to serve our members during
2017.
LENDING & REGULATORY ENVIRONMENT
Personally, I have worked in credit unions for almost
20 years and in finance my entire working life.
During this period, we have seen significant
changes in how credit unions operate. Our credit
union business has developed from modest sized
volunteer led credit unions, to a more professional,
full service and loan provider. However, the core
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ethos of ensuring credit unions are able to provide
a local and inclusive lending service in our
community remains. As CEO, I am committed to
ensuring that the staff team, who serve you the
membership, offer our services in a professional
and competent manner. We take great pride in
providing this service, and in particular our locally
based lending service, and we look forward to
meeting as many members as possible during
2017.
The level of legislation and regulatory requirements, compliance and governance standards for a
credit union are greater now than at any time in the
past. In Caherdavin & District Credit Union Ltd., we
welcome this increased level of industry scrutiny
and oversight. We have always operated to the
highest standards of compliance. We have an
excellence relationship with the Central Bank as
Regulator of the sector, and the Irish League of
Credit Unions and other industry professionals. We
are mindful that there is an increased cost to higher
levels of compliance and regulation and this is
reflected in the financial accounts. However, at all
times, we endeavour to ensure that your interests
as members are protected in all our operational
actions and levels of regulatory compliance are in
no way compromised to diminish in any way the
protection of members savings. We look forward to
ensuring that these excellent standards are
maintained in the years ahead.
THE ROLE OF THE CREDIT UNION
IN OUR COMMUNITY
Looking back to the 1950’s, and 1960’s, credit
unions in Ireland started up as a result of a need to
ensure people had access to credit. Banks were not
meeting the needs of all members in society, and
in particular wide segments of the population felt
financially excluded from mainstream finance. Over
the years, credit unions have successfully grown and
fulfilled a very important role in our community – as
a provider of credit.
Our membership rely on Caherdavin & District
Credit Union Ltd., as a provider of credit. At
present, the loans issued by credit unions for home
improvements, painting, heating, new furniture or
education, for example, are lent for a specific
purpose. The money is spent locally in most cases
and in doing so leads to the creation and support
of jobs in our community.
Caherdavin & District Credit Union Ltd. also work
with many community groups, including local
schools, clubs and volunteer organisations, and in
many cases support their various fund raising
campaigns. During the year, our credit union
supported various community groups. Many of the
clubs and charity representatives are present here
this evening. I want to welcome them and I want to
congratulate them on making
our community a better place to
live by their unselfish actions.
ANNUAL
REPORT 2016
I would like to also give recognition
to my own staff team, and in particular, the fund raising campaign for St John’s
Hospital. As part of the Great Limerick Run in May,
the staff and a member of our Board took part in
the Run and sought sponsorship. Our members
also contributed at collection points in the various
offices, and the Board also allocated some extra
funding. In total €2,101.26 was raised and a cheque
was presented to the CEO of St. John’s Hospital,
Dr. Fearghal Grimes. We know the great job our
medical personnel do in our hospitals and it was a
great experience for our team being able to
support such a worthy cause for St. John’s Hospital
in this way.
Caherdavin & District Credit Union Ltd., received a
Business team award from the organisers of the
Great Limerick Run, coming second for participation in the business category. Well done to all
who took part, in what was a great team effort from
a great team.
LOOKING FORWARD
As the 2016 Nobel Laureate Bob Dylan wrote, ‘the
times they are a changing’. Yes, we are now
operating out of 5 offices, rather than 1. Yes, you
can now access your account online via the web
and on your mobile phone, rather than relying
solely on visiting an office. Yes, we are now communicating via our website and social media,
including Facebook and Twitter, as well as pen and
paper as in the past.
However, the core credit union principles of why we
operate remain unchanged. Yes, we will continue to
provide a local credit union to protect member’s
savings. Yes, we will be a local provider of credit.
Yes, we will continue to serve our membership to
the best of our ability.
Yes, we will ensure that for the next generation of
members, for our children and for their children,
that there is a financially strong and vibrant credit
union in Limerick, with local decision making and
serving our membership locally in their community.
Caroline Long
CEO
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FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2016
Directors’ report
The directors present their annual report and the
audited financial statements for the financial year
ended 30 September 2016.
PRINCIPAL ACTIVITIES
The principal activities of the Credit Union involves
the acceptance of members' shares and lending to
members in accordance with legislation and criteria
determined by the Irish League of Credit Unions
and the Credit Union itself.
The excess of income over expenditure for the year
is set out in the Income and Expenditure Account
on page 12. The Directors recommend a dividend
in respect of the year ended 30 September 2016 of
€130,598 (0.15%) (2015: €174,446 (0.25%)).
PRINCIPAL RISKS AND UNCERTAINTIES
The Credit Union is authorised as follows:
The Credit Union is fully aware of its principal risks,
monitors these constantly and does everything in
its power to minimise all risks and to handle
prudently those residual risks over which it has little
control. The principal areas currently requiring risk
management include:
l
Insurance/reinsurance intermediary under the
European Communities (Insurance Mediation)
Regulations, 2005 (as amended).
l
Decline in loan interest income and loan
security risk.
l
l
Investment Intermediaries (Restricted Activity
Investment Product Intermediary) pursuant to
Section 26 of the Investment Intermediaries
Act, 1995 (as amended)
Prudent investment selection to minimise loss
of investment income.
l
Liquidity management and control of costs.
l
Service Providers holding appointments from
IIA product producers, including intermediaries that may issue appointments, appearing
in the register maintained under Section 31 of
the Investment Intermediaries Act, 1995 (as
amended)
Continuous monitoring of compliance with
regulatory and legislative requirements.
ACCOUNTING RECORDS
AUTHORISATION
l
l
Entitled under Regulation 9(1)(b) of the European Community (Payment Services) Regulations 2009 to provide payment services.
BUSINESS REVIEW
8
RESULTS, DIVIDENDS
Both the level of business and the year-end financial
position were satisfactory. The Directors expect to
develop and expand the Credit Union’s current
activities and they are confident of its ability to
continue to operate successfully in the
future.
The Directors believe that they comply with the
requirements of Section 108 of the Credit Union
Act, 1997 (as amended) with regard to books of
account by employing accounting personnel with
appropriate expertise and by providing adequate
resources to the financial function. The books of
account of the Credit Union are maintained at the
Credit Union's premises at Credit Union House,
Redgate, Limerick.
EVENTS SINCE THE END OF YEAR
There have been no significant events affecting the
Credit Union since the year end.
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AUDITORS
ANNUAL
REPORT 2016
In accordance with Section 115 of the Credit Union
Act, 1997 (as amended), the auditors Grant
Thornton offer themselves for re-election.
DIRECTORS’ RESPONSIBILITIES STATEMENT
The Credit Union Act, 1997 (as amended) requires
the directors to prepare financial statements for
each financial year which give a true and fair view
of the state of affairs of the Credit Union and of the
income and expenditure of the Credit Union for
that period.
In preparing those financial statements the directors are required to:
l
select suitable accounting policies and then
apply them consistently
l
make judgements and estimates that are
reasonable and prudent
l
prepare the financial statements on the going
concern basis unless it is inappropriate to
presume that the Credit Union will continue
in business.
The directors are responsible for keeping proper
accounting records which disclose with reasonable
accuracy at any time the financial position of the
Credit Union and which enables them to ensure
that the financial statements comply with the Credit
Union Act, 1997 (as amended). They are also responsible for safeguarding the assets of the Credit
Union and hence for taking reasonable steps for the
prevention and detection of fraud and other
irregularities.
On behalf of the Credit Union:
James Stewart
Chairperson of the Board of Directors:
Date: 20 October 2016
Carmel Cronin
Member of the Board of Directors:
Date: 20 October 2016
STATEMENT OF BOARD OVERSIGHT
COMMITTEE’S RESPONSIBILITIES
FOR THE YEAR ENDED 30 SEPTEMBER 2016
The Credit Union Act, 1997 (as amended) requires the appointment of a
Board Oversight Committee to assess whether the Board of Directors
has operated in accordance with Part IV, Part IV(A) and any regulations
made for the purposes of Part IV or Part IV(A) of the Credit Union Act,
1997 (as amended) and any other matter prescribed by the Central Bank
of Ireland in respect of which they are to have regard to.
On behalf of the Board Oversight Committee:
William Galvin, Chairperson of the Board Oversight Committee
Date: 20 October 2016
9
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FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2016
Independent auditor’s report
We have audited the financial statements of Caherdavin & District Credit Union Limited for the
financial year ended 30 September 2016 which
comprise the Income and Expenditure Account, the
Statement of Other Comprehensive Income, the
Balance Sheet, the Statement of Changes in
Reserves, the Statement of Cash Flows and the
related notes. The financial reporting framework
that has been applied in their preparation is Irish
law, including the Credit Union Act, 1997 (as
amended) and accounting standards issued by the
Financial Reporting Council and promulgated by
the Institute of Chartered Accountants in Ireland
including FRS 102 “the Financial Reporting Standard applicable in the UK and Republic of Ireland”.
This report is made solely to the Credit Union's
members, as a body, in accordance with Section
120 of the Credit Union Act, 1997 (as amended).
Our audit work has been undertaken so that we
might state to the Credit Union's members those
matters we are required to state to them in an
auditors' report and for no other purpose. To the
fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the
Credit Union and the Credit Union's members as a
body, for our audit work, for this report or for the
opinions we have formed.
RESPECTIVE RESPONSIBILITES OF
DIRECTORS AND AUDITOR
As explained more fully in the Directors' Responsibilities Statement, the directors are responsible
for the preparation of the financial statements and
for being satisfied that they give a true and fair view
and otherwise comply with the Credit Union Act,
1997 (as amended). Our responsibility is to audit
and express an opinion on the financial statements
in accordance with Irish law and International
Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing
Practices Board’s Ethical Standards for Auditors.
10
SCOPE OF THE AUDIT OF
THE FINANCIAL STATEMENTS
An audit involves obtaining evidence about the
amounts and disclosures in the financial statements
sufficient to give reasonable assurance that the
financial statements are free from material misstatement, whether caused by fraud or error. This
includes an assessment of: whether the accounting
policies are appropriate to the Credit Union’s
circumstances and have been consistently applied
ReportBody_Layout 1 06/12/2016 05:53 Page 11
and adequately disclosed; the reasonableness of
significant accounting estimates made by the
directors; and the overall presentation of the
financial statements. In addition, we read all the
financial and non-financial information in the annual
report to identify material inconsistencies with the
audited financial statements and to identify any
information that is apparently materially incorrect
based on, or materially inconsistent with, the knowledge acquired by us in the course of performing
the audit. If we become aware of any apparent
material misstatements or inconsistencies we
consider the implications for our report.
ANNUAL
REPORT 2016
ON MATTERS ON WHICH WE ARE REQUIRED
TO REPORT BY THE CREDIT UNION ACT, 1997
(AS AMENDED)
l
We have obtained all the information and
explanations which, to the best of our knowledge and belief, we consider necessary for
the purposes of our audit.
l
In our opinion proper accounting records
have been kept by the Credit Union.
l
The financial statements are in agreement
with the accounting records.
OPINION ON FINANCIAL STATEMENTS
In our opinion the financial statements:
l
give a true and fair view in accordance with
Generally Accepted Accounting Practice in
Ireland of the state of the Credit Union's
affairs as at 30 September 2016 and of its
income and expenditure for the year then
ended; and
l
have been properly prepared in accordance
with the requirements of the Credit Union
Act, 1997 (as amended).
Grant Thornton
Chartered Accountants & Statutory Audit Firm
Mill House, Henry Street, Limerick.
Date: 20 October 2016
11
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FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2016
Income and expenditure account
2016
2015
Schedule
€
€
Interest on loans
1
1,714,627
1,737,283
Other interest income and similar income
2
932,491
1,555,821
2,647,118
3,293,104
INCOME
Net interest income
Other income
3
Total income
18,362
22,537
2,665,480
3,315,641
EXPENDITURE
Salaries
4
Other management expenses
752,128
777,719
1,489,589
1,299,559
Depreciation
98,149
89,787
Bad debts provision
(680,203)
(718,604)
Bad debts recovered
(197,029)
(178,924)
Bad debts written off
570,322
360,439
2,032,956
1,629,976
632,524
1,685,665
Total expenditure
Excess of income over expenditure for the year
On behalf of the Credit Union:
12
CEO:
Caroline Long
Date: 20 October 2016
Member of the Board Oversight Committee:
William Galvin
Date: 20 October 2016
Member of the Board of Directors:
James Stewart
Date: 20 October 2016
The notes on pages 17 to 33 form part of these financial statements.
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ANNUAL
REPORT 2016
Statement of other
comprehensive income
2016
Excess of income over expenditure for the year
€
€
632,524
1,685,665
Other comprehensive income
Total comprehensive income for the year
2015
–
–
632,524
1,685,665
On behalf of the Credit Union:
CEO:
Caroline Long
Date: 20 October 2016
Member of the Board Oversight Committee:
William Galvin
Date: 20 October 2016
Member of the Board of Directors:
James Stewart
Date: 20 October 2016
The notes on pages 17 to 33 form part of these financial statements.
13
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FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2016
Balance sheet
Notes
2016
€
€
7
6,173,194
4,133,935
ASSETS
Cash and balances at bank
2015
Deposits and investments – cash and cash equivalents
8
28,573,424
16,095,166
Deposits and investments – other
8
55,550,763
52,896,267
Loans
Less: provision for bad debts
9
21,338,855
18,207,398
10
(2,277,910)
(2,659,632)
799,615
Tangible fixed assets
11
880,004
Debtors, prepayment and accrued income
12
174,948
93,391
110,413,278
89,566,140
Total assets
LIABILITIES
Members’ shares
13
88,014,283
70,538,824
Other liabilities, creditors, accruals and charges
14
319,631
251,174
Other provisions
15
29,060
41,251
88,362,974
70,831,249
Total liabilities
RESERVES
Regulatory reserve
17
12,471,147
10,735,188
Operational risk reserve
17
552,045
–
Realised reserves
17
8,956,906
7,931,738
Unrealised reserves
17
70,206
67,965
22,050,304
18,734,891
110,413,278
89,566,140
Other reserves
Total reserves
Total liabilities and reserves
On behalf of the Credit Union:
14
CEO:
Caroline Long
Date: 20 October 2016
Member of the Board Oversight Committee:
William Galvin
Date: 20 October 2016
Member of the Board of Directors:
James Stewart
Date: 20 October 2016
The notes on pages 17 to 33 form part of these financial statements.
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ANNUAL
REPORT 2016
Statement of changes in reserves
OTHER RESERVES
Realised
Unrealised
Regulatory
Reserve
Operational
Risk
Reserve
Total
€
€
€
€
€
As at 1 October 2014
6,765,859
44,272
7,714,644
–
14,524,775
Surplus for the year
1,167,700
67,965
450,000
–
1,685,665
189,527
–
2,570,544
–
2,760,071
(235,620)
–
–
–
(235,620)
44,272
(44,272)
–
–
–
7,931,738
67,965
10,735,188
–
18,734,891
130,598
57,693
–
444,233
632,524
Transfer of engagements
1,116,568
4,773
1,735,959
–
2,857,300
Dividend paid
(174,411)
–
–
–
(174,411)
60,225
(60,225)
–
–
–
(107,812)
–
–
107,812
–
8,956,906
70,206
12,471,147
552,045
22,050,304
Transfer of engagements
Dividend paid
Transfer to/(from) unrealised
As at 1 October 2015
Surplus for the year
Transfer to/(from) unrealised
Transfer to the operational risk reserve
As at 30 September 2016
On behalf of the Credit Union:
CEO:
Caroline Long
Date: 20 October 2016
Member of the Board Oversight Committee:
William Galvin
Date: 20 October 2016
Member of the Board of Directors:
James Stewart
Date: 20 October 2016
The notes on pages 17 to 33 form part of these financial statements.
15
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FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2016
Statement of cash flows
2016
Opening cash and cash equivalents
2015
€
€
20,229,101
20,223,098
Cash flows from operating activities
Loans repaid
Loans granted
Loan interest
Investment income
9,221,029
9,314,681
(10,586,014)
(8,053,190)
1,714,627
1,737,283
932,491
1,555,821
Other receipts
Bad debts recovered
Dividend paid
Operating expenses
18,362
22,537
197,029
178,924
(174,411)
(235,620)
(2,241,717)
(2,077,278)
Movement in other assets and liabilities
Net cash flows from operating activities
(1,183)
534,542
(919,787)
2,977,700
Cash flows from investing activities
Fixed asset purchases/disposals
Cash and investments introduced from transfer of engagements
Net cash flow from other investing activities
Net cash flows from investing activities
(56,741)
(211,194)
14,983,406
18,124,940
(2,654,496)
(21,616,343)
12,272,169
(3,702,597)
Cash flows from financing activities
Members’ savings movement
3,165,135
730,900
Net cash flow from financing activities
3,165,135
730,900
14,517,517
6,003
34,746,618
20,229,101
Net (decrease)/increase in cash and cash equivalents
Closing cash and cash equivalents
Note 7
On behalf of the Credit Union:
16
CEO:
Caroline Long
Date: 20 October 2016
Member of the Board Oversight Committee:
William Galvin
Date: 20 October 2016
Member of the Board of Directors:
James Stewart
Date: 20 October 2016
The notes on pages 17 to 33 form part of these financial statements.
ReportBody_Layout 1 06/12/2016 05:54 Page 17
ANNUAL
REPORT 2016
Notes to the financial statements
1.
2.
Legal and regulatory framework
Caherdavin & District Credit Union Limited is
registered with the Registry of Credit Unions
and is regulated by the Central Bank of
Ireland. The registered office of the Credit
Union is located at Credit Union House,
Redgate, Limerick.
future. The Credit Union therefore continues to adopt the going concern basis
in preparing its financial statements.
2.4
Interest on loans
Interest on loans is recognised on an
accruals basis. An adjustment is made to
the year-end amount receivable for any
irrecoverable amounts. The Directors
have made a decision to transfer accrued interest receivable on loans at the
year end to an unrealised reserve.
2.5
Investments
Investment income is recognised on an
accruals basis.
Accounting policies
2.1
Basis of preparation of financial statements
The financial statements have been
prepared in accordance with applicable
Irish accounting standards, including
Financial Reporting Standard 102, the
Financial Reporting Standard applicable
in the United Kingdom and the Republic
of Ireland and Irish statute comprising of
the Credit Union Act, 1997 (as amended). The financial statements have
been prepared on the historical cost
basis except for the modification to a
fair value basis for certain financial instruments as specified in the accounting
policies below.
The financial statements are presented
in Euro (€) which is also the functional
currency of the Credit Union.
The following principal accounting policies have been applied:
2.2
2.3
Statement of compliance
The financial statements have been prepared in accordance with FRS 102 “The
Financial Reporting Standard applicable
in the UK and Republic of Ireland” (FRS
102). These are the first financial statements that comply with FRS 102.
Information on the impact of first-time
adoption of FRS 102 is set out in note
28.
Going concern
After reviewing the Credit Union’s projections, the directors have reasonable
expectation that the Credit Union has
adequate resources to continue in operational existence for the foreseeable
The specific investment products held
by the Credit Union are accounted for as
follows:
Held at amortised cost
Investments designated on initial recognition as held at amortised cost are
measured at amortised cost using the
effective interest method less impairment. This means that the investment is
measured at the amount paid for the
investment, minus any repayments of
the principal; plus or minus the cumulative amortisation using the effective
interest method of any difference between the amount at initial recognition
and the maturity amount, minus, in the
case of a financial asset, any reduction
for impairment or uncollectability.
Central bank deposits
Credit Unions are obliged to maintain
certain deposits with the Central Bank.
These deposits are technically assets of
the Credit Union but to which the Credit
Union has restricted access. The funds
on deposit with the Central Bank attract
nominal interest and will not ordinarily
be returned to the Credit Union while it
is a going concern. The amounts are stated at the
amount deposited
plus accrued income
and are not subject
to impairment reviews.
17
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FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2016
Notes to the financial statements (continued)
2.5
Depreciation is provided on the following basis:
Investments (continued)
Investments at fair value
Investments held for trading and investment in stock market shares (i.e. nonconvertible preference shares and nonputtable ordinary shares or preference
shares) are included in this category.
Financial assets at fair value are classified as held for trading if they are
acquired for sale in the short term. They
are valued at fair value (market value) at
the year-end date and all gains and
losses are taken to the income and
expenditure account.
The fair value of quoted investments is
determined by reference to bid prices at
the close of business on the balance
sheet date. Where there is no active
market these assets will be carried at
cost less impairment.
2.6
Tangible fixed assets
Tangible fixed assets under the cost
model are stated at historical cost less
accumulated depreciation and any accumulated impairment losses. Historical
cost includes expenditure that is directly
attributable to bringing the asset to the
location and condition necessary for it to
be capable of operating in the manner
intended by management.
The Credit Union adds to the carrying
amount of an item of fixed assets the
cost of replacing part of such an item
when that cost is incurred, if the replacement part is expected to provide
incremental future benefits to the Credit
Union. The carrying amount of the
replaced part is derecognised. Repairs
and maintenance are charged to the
income and expenditure account during
the period in which they are incurred.
Depreciation is charged so as to allocate
the cost of assets less their residual
value over their estimated useful lives,
using the straight-line method.
18
Freehold Premises
2% per annum
Fixtures and Fittings 20% per annum
Office Equipment 33.33% per annum
The assets' residual values, useful lives
and depreciation methods are reviewed,
and adjusted prospectively if appropriate, or if there is an indication of a
significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds
with the carrying amount and are recognised within ‘other gains' or ‘other
losses’ in the income and expenditure
account.
2.7
Cash and cash equivalents
Cash and cash equivalents comprise
cash on hand and deposits and investments with a maturity of less than or
equal to three months.
2.8
Financial assets – loans
Loans are financial assets with fixed or
determinable payments. Loans are recognised when cash is advanced to
members and measured at amortised
cost.
Loans are derecognised when the right
to receive cash flows from the asset have
expired, usually when all amounts outstanding have been repaid by the
member.
2.9
Bad debt provision
Caherdavin & District Credit Union
Limited assesses if there is objective
evidence that any of its loans are impaired with due consideration of
environmental factors. The loans are assessed collectively in groups that share
similar credit risk characteristics. Individually significant loans are assessed
on a loan by loan basis. In addition, if,
there is objective evidence that any
individual loan is impaired, a specific loss
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will be recognised. Bad debt provisioning is monitored by the Credit Union,
and the Credit Union assesses and
approves its provisions and the adequacy of same on a quarterly basis.
Any bad debts/impairment losses are
recognised in the Income and Expenditure Account.
Caherdavin & District Credit Union Limited has identified three categories for
assessing impairment losses on loans.
They are rescheduled loans, top 100
loans and all other loans.
Rescheduled loans
The provision applied to Rescheduled
Loans is the greater of provision identified following an individual assessment
of each loan or any provision required
under Regulatory Requirements issued
by Central Bank of Ireland.
Top 100 loans
Each loan in this category is individually
assessed. Credit risk is identified, assessed and measured with emphasis on
weeks in arrears and other observable
credit risk metrics resulting in the raising
of specific provisions on individual loans
where there is doubt about their recoverability.
All other loans
Loans in this category are collectively
assessed. Credit risk is identified, assessed and measured with emphasis on
weeks in arrears and other observable
credit risk metrics resulting in the raising
of specific provisions on these loans
where there is doubt about their recoverability.
2.10 Financial liabilities – members’ shares
Members’ shares in Caherdavin &
District Credit Union Limited are redeemable and therefore are classified as
financial liabilities. They are recognised
at the amount of cash deposited.
2.11 Holiday pay
A liability is recognised to the extent of
any unused holiday pay entitlement
which is accrued at the Balance Sheet
date and carried forward to future
periods. This is measured at the undiscounted salary cost of the future
holiday entitlement so accrued at the
Balance Sheet date.
2.12 Pension costs
Caherdavin & District Credit Union
Limited participates in an industry-wide
pension scheme for employees (The
Irish League of Credit Unions Republic
of Ireland Pension
Scheme). This is a funded defined benefit
scheme with assets managed by the Scheme’s
trustees.
ANNUAL
REPORT 2016
The scheme is a multi-employer Scheme
and due to the nature of the Scheme, it
is not possible for Caherdavin & District
Credit Union Limited to separately
identify its share of the Scheme’s underlying assets and liabilities. Consequently,
it accounts for the Scheme as a defined
contribution plan. There is an agreed
funding plan in respect of the Pension
Scheme as a result of a Minimum Funding Standard deficit certified by the
Scheme’s Actuary in 2009. Consequently, Caherdavin & District Credit
Union Limited recognises a liability at
each balance sheet date for its outstanding contributions payable under
the agreed funding plan to the extent
that they relate to committed funding in
respect of the deficit to which the
funding plan relates.
The contributions to this scheme are
recognised as an expense in the income
and expenditure account when they fall
due. Amounts not paid are shown in
accruals as a liability on the balance
sheet. The assets of the plan are held
separately from the Credit Union in
independently administered funds.
2.13 Creditors
Short term Other Liabilities, Creditors,
Accruals and Charges are measured at
the transaction price.
2.14 Distribution policy
Caherdavin & District Credit Union
Limited’s policy is to pay a reasonable
rate of dividend subject to covering operating expenses and meeting reserve
requirements as set out in the Credit
Union’s Reserve Management Policy.
2.15 Regulatory reserve
The Credit Union Act, 1997 (Regulatory
Requirements) Regulations 2016 requires Credit Unions to establish and
maintain a minimum regulatory reserve
requirement of at least 10 per cent of
the assets of the Credit Union. This
reserve is to be perpetual in nature,
freely available to absorb losses, realised
financial reserves that are unrestricted
and non-distributable.
19
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FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2016
Notes to the financial statements (continued)
2.16 Operational risk reserve
Section 45(5)(a) of the Credit Union Act,
1997 (as amended) requires each Credit
Union to maintain an additional reserve
that it has assessed is required for operational risk having regard to the nature,
scale and complexity of the Credit
Union. Credit unions are required to
maintain a minimum operational risk
reserve having due regard for the
sophistication of the business model.
The definition of operational risk is the
risk of losses stemming from inadequate
or failed internal processes, people and
systems or from external events. The Directors have considered the requirements of the Act and have considered
an approach to the calculation of the operational risk reserve. Caherdavin & District Credit Union Limited uses the Basic
Indicator Approach as set out in the operational risk measurements techniques
proposed under Basel II capital adequacy rules for banking institutions in
calculating the Operational Risk Reserve. Therefore Caherdavin & District
Credit Union Limited will hold an Operational Risk Reserve which will at a minimum equal 15% of the average positive
gross income for the previous three
years. For any year in which there was a
deficit, this will be excluded from the
calculation.
20
2.17 Other reserves
Other reserves are the accumulated
surpluses to date and reserves arising on
the transfer of engagements that have
not been declared as dividends returnable to members. The other reserves are
subdivided into realised and unrealised.
In accordance with the Central Bank
guidance note for Credit Unions on
matters relating to accounting for investments
and
distribution
policy,
investment income that has been
recognised but will not be received
within 12 months of the
balance sheet date is
classified as “unrealised” and is not
distributable. A reclassification between
unrealised and realised is made as
investments come to within 12 months
of maturity date. Interest on loans
receivable at the balance sheet date is
also classified as “unrealised” and is not
distributable. All other income is
classified as “realised”.
2.18 Transfer of engagements
Transfer of engagements are accounted
for using the acquisition method of accounting. This involves recognising
identifiable assets and liabilities of the
acquired Credit Union at fair value. In
applying the acquisition method of
accounting for these business combinations, the member interests transferred
by Caherdavin & District Credit Union
Limited represents the consideration
transferred for the net assets acquired.
This consideration has been estimated
as equivalent to the acquisition date fair
value of the member interests in the
transferor Credit Union (the fair value of
the transferor Credit Union) at the date
of the transfer, and is reflected as an
adjustment in reserves.
3.
Judgements in applying accounting policies
and key source of estimation uncertainty
Preparation of the financial statements
requires management to make significant
judgements and estimates. The items in the
financial statements where these judgments
and estimates have been made include:
Determination of depreciation, useful economic life and residual value of tangible assets
The annual depreciation charge depends
primarily on the estimated lives of each type
of asset and, in certain circumstances, estimates of residual values. The directors regularly
review these useful lives and change them if
necessary to reflect current conditions. In
determining these useful lives management
consider technological change, patterns of
consumption, physical condition and expec-
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these financial statements
do not include any adjustments to the carrying
amounts and classification of
assets and liabilities that may
arise if the Credit Union was unable to continue as a going concern.
ted economic utilisation of the assets.
Changes in the useful lives can have a significant impact on the depreciation charge for
the financial year.
Impairment of buildings
At each reporting date fixed assets are
reviewed to determine whether there is any
indication that those assets have suffered an
impairment loss. If there is an indication of
possible impairment, the recoverable amount
of any affected asset is estimated and
compared with its carrying amount. If the
estimated recoverable amount is lower, the
carrying amount is reduced to its estimated
recoverable amount, and an impairment loss
is recognised immediately in profit or loss. If
an impairment loss subsequently reverses, the
carry amount of the asset is increased to the
revised estimate of its recoverable amount,
but not in excess of the amount that would
have been determined had no impairment
loss been recognised for the asset in prior
years. A reversal of an impairment loss is
recognised immediately in the Income and
Expenditure Accounts.
Bad debt provision
Caherdavin & District Credit Union Limited’s
accounting policy for impairment of loans is
set out in the accounting policy in Note 2.9.
The estimation of loan losses is inherently
uncertain and depends upon many factors,
including loan loss trends, credit risk characteristics in loan classes, local and international
economic climates, conditions in various
sectors of the economy to which the Credit
Union is exposed, and, other external factors
such as legal and regulatory requirements.
Operational risk reserve
The directors have considered the requirements of the Credit Union Act, 1997 (as
amended) and have considered an approach
to the calculation of the operational risk
reserve. Caherdavin & District Credit Union
Limited uses the Basic Indicator Approach as
set out in the operational risk measurements
techniques proposed under Basel II capital
adequacy rules for banking institutions in
calculating the minimum operational risk
reserve.
Adoption of going concern basis for financial
statements preparation
The Directors have prepared projections and
cash flows for a period of at least twelve
months from the date of the approval of the
financial statements which demonstrate that
there is no material uncertainty regarding the
Credit Union’s ability to meet its liabilities as
they fall due, and to continue as a going concern. On this basis the Directors consider it
appropriate to prepare the financial statements on a going concern basis. Accordingly,
4.
ANNUAL
REPORT 2016
Transfer of engagements
On 30 September 2016 Caherdavin & District
Credit Union Limited (“CDCU”) accepted the
transfer of St. Patrick’s Parish (Limerick) Credit
Union Limited (“SPPCU”). The assets and
liabilities of SPPCU at 30 September 2016
were incorporated into the balance sheet of
CDCU at that date.
CDCU did not pay any consideration in
respect of the transfer of engagements. On
the date of transfer, the members of the
transferor Credit Union became members of
CDCU, and thereby became entitled to
member interest associated with such membership. In applying the acquisition method of
accounting for this business combination, the
members’ interests transferred by CDCU
represents the consideration transferred for
the net assets acquired. This consideration
has been estimated as equivalent to the
acquisition date fair value of the member
interests in the transferor Credit Union (the
fair value of the transferor Credit Union) at the
date of transfer, and is reflected as an
adjustment in reserves in note 17 on page 27.
The fair values of the net assets acquired are
detailed in the table below:
Fair value of SPPCU
assets and liabilities
acquired by CDCU
€
Tangible fixed assets
Cash on hand and at bank
Deposits and investment
124,762
657,532
14,325,874
Loans
2,336,794
Provision for bad debts
(298,481)
Debtors, prepayments and
accrued income
Member shares
Other liabilities, creditors,
accruals and charges
34,829
(14,310,324)
(13,686)
2,857,300
21
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FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2016
Notes to the financial statements (continued)
5.
Rates of interest charged on loans
The rates of interest charged on loans per annum on a reducing balance basis were as follows:
APR %
Standard Loans
0.85%
8.30%
0.69%
Covered Loans
6.20%
0.51%
Educational Loan
7.20%
0.60%
Promotional Loans
PMC Loan Rate
12.70%
1.05%
St. Patrick’s Parish (Limerick) Credit Union Loans
11.40%
0.95%
8.20%
0.68%
12.60%
1.05%
Old Promotional Loans (No longer available)
South Hill Loans (No longer available)
6.
St John’s Promotional Loans (No longer available)
7.80%
0.65%
St. John’s Covered Loans (No longer available)
5.60%
0.47%
SFADCO Loans (No longer available)
8.10%
0.68%
Key management personnel compensation
The directors of Caherdavin & District Credit Union Limited are all unpaid volunteers.
The key management personnel compensation is as follows.
2016
Short term employee benefits paid to key management
Payments to pension schemes
Total key management personnel compensation
7.
2015
€
€
238,452
177,418
39,141
26,293
277,593
203,711
2016
2015
Cash and cash equivalents
Cash and balances at bank
€
€
6,173,194
4,133,935
84,124,187
68,991,433
Less: Deposit & investment amounts maturing after three months
(55,550,763)
(52,896,267)
Total cash and cash equivalents
34,746,618
20,229,101
Deposits & investments
22
Monthly %
10.20%
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ANNUAL
REPORT 2016
8.
Deposits and investments
2016
€
2015
€
23,753,125
15,831,179
Deposits and investments – cash equivalents
Accounts in authorised credit institutions (Irish and Non-Irish based)
Bank bonds
4,800,864
–
19,435
263,987
28,573,424
16,095,166
16,179,156
24,387,146
Collective investments schemes
Total deposits and investments – cash equivalents
Deposits and investments – other
Accounts in authorised credit institutions (Irish and Non-Irish based)
Irish and EEA state securities
Bank bonds
Total deposits and investments – other
9.
2,384,359
2,328,220
36,987,248
26,180,901
55,550,763
52,896,267
2016
€
2015
€
18,207,398
12,466,063
Financial assets – loans
As at 1 October
Loans arising on transfer of engagements
Loans granted during the year
Loans repaid during the year
Gross loans and advances
2,336,794
7,363,265
10,586,014
8,053,190
(9,221,029)
(9,314,681)
21,909,177
18,567,837
Bad debts
Loans written off during the year
As at 30 September
(570,322)
(360,439)
21,338,855
18,207,398
2016
2015
10. Provision for Bad Debts
As at 1 October
Provisions arising from transfer of engagements
€
€
2,659,632
2,154,785
298,481
1,223,451
Net movement in bad debts provision during the year for
loans currently outstanding
(109,881)
(358,165)
Decrease in bad debt provision as a result of loan write offs
previously provided for
(570,322)
(360,439)
2,277,910
2,659,632
As at 30 September
The current provision for bad debts in the financial statements is
€2,277,910 (2015: €2,659,632) representing 10.67% (2015: 14.61%)
of the total loan book. The provision for bad debts is analysed as follows:
Individually significant loans
Other impaired loans
2016
€
324,849
2015
€
429,733
515,029
715,261
Collectively assessed loans
1,438,032
1,514,638
Provision for bad debts
2,277,910
2,659,632
23
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FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2016
Notes to the financial statements (continued)
11. Tangible fixed assets
Premises
€
Office
Equipment
€
Fixtures
&
Fittings
€
Total
€
COST
1 October 2015
792,502
573,004
422,071
1,787,577
Transfer from TOE
184,268
113,400
140,008
437,676
–
10,183
46,558
56,741
976,770
696,587
608,637
2,281,994
Additions
At 30 September 2016
DEPRECIATION
1 October 2015
Transfer from TOE
Charge for year
177,639
533,328
276,995
987,962
62,471
113,400
140,008
315,879
15,850
12,577
69,722
98,149
255,960
659,305
486,725
1,401,990
30 September 2016
720,810
37,282
121,912
880,004
30 September 2015
614,863
39,676
145,076
799,615
2016
€
2015
€
42,570
60,225
At 30 September 2016
NET BOOK VALUE
12. Debtors, prepayments and accrued income
Loan interest due
Prepayments
13. Member shares
Special share accounts
24
132,378
33,166
174,948
93,391
2016
€
2015
€
88,014,283
70,538,824
88,014,283
70,538,824
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ANNUAL
REPORT 2016
14. Other liabilities, creditors accruals and charges
Other liabilities, creditors accruals and charges
15. Other provisions
2016
€
2015
€
319,631
251,174
319,631
251,174
2016
€
2015
€
3,073
2,765
Holiday pay accrual
At 1 October
Charged to the income and expenditure account
At 30 September
534
307
3,607
3,072
38,179
47,953
Pension provision
At 1 October
Charged to the income and expenditure account
At 30 September
(12,726)
(9,774)
25,453
38,179
41,252
50,718
Total other provisions
At 1 October
Charged to the income and expenditure account
At 30 September
(12,192)
(9,467)
29,060
41,251
2016
2015
16. Financial instruments
16a. Financial instruments – measured at amortised cost
Financial assets
Financial assets measured at amortised cost
€
€
110,572,057
91,272,036
88,362,974
70,831,249
Financial liabilities
Financial liabilities measured at amortised cost
Financial assets measured at amortised cost comprise of cash and balances at bank, deposits and
investments and loans.
Financial liabilities measured at amortised cost comprise member shares, creditors and accruals and
provisions.
25
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FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2016
Notes to the financial statements (continued)
16. Financial instruments (continued)
16b. Financial instruments – fair value measurements
FRS 102 requires fair value measurements to be disclosed by the source of inputs, using a three level
hierarchy:
l
Quoted prices for identical instruments in active market (level 1);
l
Prices of recent transactions for identical instruments and valuation techniques using observable
market data (level 2), and
l
Valuation techniques using unobservable market data (level 3).
The table below sets out fair value measurements using the fair value hierarchy:
Total
Level 1
Level 2
Level 3
€
€
€
€
19,434
–
19,434
–
Bank bonds
1,044,745
–
1,044,745
–
Total
1,064,179
–
1,064,179
–
Total
Level 1
Level 2
Level 3
€
€
€
€
Collective investment schemes
19,434
-–
19,434
–
Bank bonds
41,296
–
41,296
–
Total
60,730
–
60,730
–
At 30 September 2016
Collective investment schemes
At 30 September 2015
There were no fair value adjustments recognised in the income and expenditure account for the year
ended 30 September 2016 (2015: €Nil).
26
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ANNUAL
REPORT 2016
17. Reserves
Balance
01/10/15
Regulatory reserve
Reserves
arising on
Transfer of
Engagements
Payment of
dividend
Appropriation
of current
year surplus
Transfers
between
reserves
Balance
30/09/16
€
€
€
€
€
€
10,735,188
1,735,959
–
–
–
12,471,147
–
–
–
444,233
107,812
552,045
Operational risk
reserve
Other reserves
Realised
Undistributed surplus
23,898
35
23,933
Reserves arising on
the transfer of
engagements
– SJCU
173,660
173,660
Reserves arising on
the transfer of
engagements
– SHCU
15,867
15,867
Reserves arising on
the transfer of
engagements
– SPPCU
–
1,116,568
1,116,568
General bad debt
reserve
1,599,076
(1,599,076)
General reserve
4,219,791
1,551,489
Future dividend
reserve
1,500,000
Building reserve
225,000
Special reserve:
proposed dividend
174,446
Total realised reserves
7,931,738
–
5,771,280
1,500,000
225,000
1,116,568
(174,411)
130,598
(35)
130,598
(174,411)
130,598
(47,587)
8,956,906
42,570
(60,225)
Unrealised
Interest on loans reserve
60,225
Investment income reserve
Total unrealised reserves
Total reserves
7,740
4,773
42,570
15,123
27,636
67,965
4,773
–
57,693
(60,225)
70,206
18,734,891
2,857,300
(174,411)
632,524
–
22,050,304
The Regulatory Reserve at 30 September 2016 represents 11.29% of total assets at that date.
The Operational Risk Reserve at 30 September 2016 represents 0.50% of total assets at that date.
27
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FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2016
Notes to the financial statements (continued)
18.
Credit risk disclosures
The Credit Union complies with Section 12 of the Credit Union Act, 1997 (Regulatory Requirements)
Regulations 2016. This Regulation:
l
restricts the concentration of lending by the Credit Union within certain sectors or to connected
persons or groups (concentration limits);
l
restricts the absolute amount of lending to certain sectors to a set percentages of the regulatory
reserve (large exposure limit)
l
restricts the loan duration of certain loans to specified limits (maturity limits)
l
requires specified lending practices to be in place where loans are made to certain sectors such
as commercial loans, community loans or loans to another Credit Union.
The carrying amount of the loans to members represents Caherdavin & District Credit Union Limited’s
maximum exposure to credit risk. The following provides information on the credit quality of loan
repayments. Where loans are not impaired it is expected that the amounts repayable will be received
in full.
€
2016
%
€
2015
%
16,124,324
75.56%
12,501,283
68.66%
Loans not impaired
Not past due
Impaired loans:
Not past due
542,096
2.54%
569,580
3.13%
3,074,146
14.42%
3,003,551
16.49%
Between 10 and 18 weeks past due
460,756
2.16%
358,780
1.97%
Between 19 and 26 weeks past due
160,883
0.75%
198,562
1.09%
Between 27 and 39 weeks past due
73,592
0.34%
302,450
1.66%
Between 40 and 52 weeks past due
111,321
0.52%
188,684
1.04%
53 or more weeks past due
791,737
3.71%
1,084,508
5.96%
5,214,531
24.44%
5,706,115
31.34%
Up to 9 weeks past due
Total impaired loans
Total loans
28
21,338,855
18,207,398
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ANNUAL
REPORT 2016
19. Related Party Transactions
No. of Loans
Loans advanced to related parties during the year
€
9
61,900
21
131,393
Total provisions for loans outstanding to related parties
–
–
Total provision charge during the year for loans outstanding to related parties
–
–
Total loans outstanding to related parties at the year end
The related party loans stated above comprise of loans to members of the Board of Directors, the
Management Team and members of the family of a member of the Board of Directors and the
Management Team of Caherdavin & District Credit Union Limited. Related parties have been identified
in line with the definition in the Credit Union Act 1997 (Regulatory Requirements) Regulations 2016.
Total loans outstanding to related parties represent 0.62% of the total loans outstanding at 30
September 2016.
20. Additional financial instruments disclosures
20a. Financial Risk Management
Caherdavin & District Credit Union Limited manages its members’ shares and loans so that it earns
income from the margin between interest receivable and interest payable. The main financial risks
arising from Caherdavin & District Credit Union Limited’s activities are credit risk, market risk,
liquidity risk and interest rate risk. The Board of Directors reviews and agrees policies for managing
each of these risks, which are summarised below.
Credit risk: Credit risk is the risk that a borrower will default on their contractual obligations relating
to repayments to Caherdavin & District Credit Union Limited, resulting in financial loss to the
Credit Union. In order to manage this risk the Board of Directors approves Caherdavin & District
Credit Union Limited’s Credit Policy, and all changes to it. All loan applications are assessed with
reference to the Credit Policy in force at the time. Subsequently loans are regularly reviewed for
any factors that may indicate that the likelihood of repayment has changed.
Market risk: Market risk is generally comprised of interest rate risk, currency risk and other price
risk. Caherdavin & District Credit Union Limited conducts all its transactions in Euro and does not
deal in derivatives or commodity markets. Therefore Caherdavin & District Credit Union Limited
is not exposed to any form of currency risk or other price risk.
Liquidity risk: Caherdavin & District Credit Union Limited’s policy is to maintain sufficient funds in
liquid form at all times to ensure that it can meet its liabilities as they fall due. The objective of the
Credit Union’s Liquidity Policy is to smooth the mismatches between maturing assets and liabilities
and to provide a degree of protection against any unexpected developments that may arise.
Interest rate risk: Caherdavin & District Credit Union Limited’s main interest rate risk arises from
adverse movements in interest rates receivable which would affect investment income. Caherdavin
& District Credit Union Limited reviews any potential new investment product carefully to ensure
that minimum funds are locked in low yielding long term investments yet at the same time
maximising investment income receivable.
20b. Liquidity Risk Disclosures
All Caherdavin & District Credit Union Limited’s financial liabilities are repayable on
demand with the exception of pledged shares. The Credit Union retains, at all times,
liquid assets amounting to a minimum of 20% of unattached savings.
29
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FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2016
Notes to the financial statements (continued)
20c. Interest Rate Risk Disclosures
The following table shows the average interest rates applicable to relevant financial assets and
financial liabilities.
€
Loans
2016
Average
interest
rate (%)
21,338,855
9.21%
€
18,207,398
2015
Average
interest
rate (%)
9.23%
The dividend payable is at the discretion of the Directors and is therefore not a financial liability
of the Credit Union until declared and approved at the AGM.
21. Dividends
The following distributions were made during the year:
2016
€
Dividend on shares
0.25%
174,411
2015
€
0.25%
235,620
The directors are proposing a dividend in respect of the year ended 30 September 2016 of €130,598
(0.15%) (2015: €174,446 (0.25%)) subject to agreement by the membership at the AGM.
22. Post balance sheet events
There have been no significant events affecting the Credit Union since the year end.
23. Insurance against Fraud
The Credit Union has Insurance against fraud in the amount of €5,200,000 in compliance with Section
47 of the Credit Union Act, 1997 (as amended).
24. Capital Commitments
There are no capital commitments at 30 September 2016.
25. Contingent Liabilities
There are no contingent liabilities in existence at 30 September 2016 that would impact on the financial
statements.
30
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ANNUAL
REPORT 2016
26. Comparative information
Comparative information has been reclassified where necessary to conform to current year presentation.
27. The Irish League of Credit Unions Republic of Ireland Pension Scheme
Caherdavin & District Credit Union Limited participates in an industry-wide pension scheme for
employees (The Irish League of Credit Unions Republic of Ireland Pension Scheme). This is a funded
defined benefit scheme with assets managed by the Scheme’s trustees.
The scheme is a multi-employer Scheme and due to the nature of the Scheme it is not possible for
Caherdavin & District Credit Union Limited to separately identify its share of the Scheme’s underlying
assets and liabilities. Consequently, it accounts for the Scheme as a defined contribution plan, in
accordance with FRS 102.
The Pension’s Act requires the trustees of the Scheme to assess whether it could meet a certain
prescribed standard, knows as the Minimum Funding Standard. This assesses whether, if the scheme
was wound up on a specified theoretical valuation date, it could satisfy the Funding Standard at that
date. Following the Scheme’s actuary certifying a Minimum Funding Standard deficit in the Scheme in
2009, Caherdavin & District Credit Union Limited, the ILCU Group and the other Credit Unions
participating in the Scheme entered into a funding agreement with the Scheme that was designed to
ensure that, the Scheme could be reasonably expected to satisfy the Minimum Funding Standard by a
specified future date (1 March 2019). This funding plan runs up until 2019 and was approved by the
Pensions Authority. In accordance with the requirements of FRS102, the Credit Union has recognised a
liability for its outstanding contributions payable under this funding agreement to the extent that they
relate to the deficit. Details of this transition adjustment under FRS102 are included in note 28.
As part of the above solvency assessment process, the Scheme actuary must carry out a separate
valuation under the Minimum Funding Standard every 3 years and produce a funding certificate for
submission to the Pensions Authority within 9 months of the effective date of the valuation. The purpose
of the certificate is to certify whether or not the assets of the scheme at the effective date are sufficient
to meet the liabilities of the scheme based on the assumption that the scheme was wound up at that
date. The most recent Actuarial Funding Certificate was effective as at 1 March 2015 and it certified
that the Scheme satisfied the funding standard. Further, the Actuary was reasonably satisfied that as at
28 February 2015 the scheme can be expected to satisfy the funding standard as specified in Section
44 of the Pensions Act, 1990, at 1 March 2019, being the date specified by the Pensions Authority
under Section 49(2) (a) of the Act for the purpose of the existing funding proposal.
An actuarial review of the fund is normally carried out every three years by the Scheme's independent,
professionally qualified actuary. The actuarial review considers the past and future liabilities of the
scheme. The last completed triennial actuarial review was carried out with an effective date of 1 March
2014, using the Projected Unit valuation method. The principal actuarial assumption used in the
valuation was the investment return would be 1.5% higher than the annual salary increases. The market
value of the scheme's assets at 1 March 2014 was €157m. The actuarial valuation disclosed a past
service deficit of €27.7m at 1 March 2014 calculated under the Ongoing Actuarial Valuation method.
This valuation method assumes that the Scheme will continue in existence for the foreseeable future.
The assumptions used in the actuarial review to determine the past service deficit differ from the
assumptions that would be used to determine the liabilities for defined benefit obligations under
FRS102. This actuarial review recommended that the rate agreed under the funding proposal, 27.7%
of pensionable salary, continues to be paid. The cost of risk benefits is paid in addition to this rate giving
a total contribution rate of 30% of Pensionable Salary.
The Credit Union also operates a defined contribution scheme for a number of its employees.
31
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FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2016
Notes to the financial statements (continued)
28. Transition to FRS 102
This is the first financial year that Caherdavin & District Credit Union Limited has presented financial
statements complying with FRS 102. The last financial statements under Irish GAAP were for the financial
year ended 30 September 2015. Caherdavin & District Credit Union Limited’s date of transition to FRS
102 is 1 October 2014. Set out below are the changes in accounting policies which reconcile the excess
of income over expenditure for the financial year ended 30 September 2015 and Other Reserves as at
1 October 2014 and 30 September 2015 between Irish GAAP as previously reported and FRS 102.
Reconciliation of Excess of Income over Expenditure from previous
accounting standards to FRS 102
Note
Excess of income over expenditure as previously reported
2015
€
853,816
Bad debt provision
(a)
718,604
Accruals basis for income recognition
(b)
15,953
Investments
(c)
84,753
Short term employee benefits
(d)
2,765
Pension provision
(e)
9,774
Excess of Income over Expenditure (in accordance with FRS 102)
Reconciliation of other Reserves from previous accounting
standards to FRS 102
Note
Other reserves as previously reported
1,685,665
2015
€
2014
€
5,753,350
5,395,627
Bad debt provision
(a)
1,724,699
1,006,095
Accruals basis for income recognition
(b)
60,225
44,272
Investments
(c)
499,608
414,855
Short term employee benefits
(d)
–
(2,765)
Pension provision
(e)
(38,179)
(47,953)
7,999,703
6,810,131
Other Reserves (in accordance with FRS 102)
The adjustments are:
32
(a)
Bad Debt Provision
FRS 102 does not allow general provisions for bad debts, thereby resulting in the add back of any
General Bad Debt Provision at 30 September 2014 and 30 September 2015.
(b)
Accruals basis for income recognition
Credit Unions historically account for interest income on loans on a cash receipts basis. FRS 102
requires that income be accounted for on an accruals basis. Interest earned as at 30 September
but not received until after September is now accrued at 30 September. The adjustment is
retrospective.
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ANNUAL
REPORT 2016
(c)
Investments
Investments accounted for under the old “cost model” rules have been restated to amortised cost/fair
value resulting in an adjustment applied retrospectively to both the income recognised from these
investments and in their carrying amount.
(d)
Employee benefits
FRS 102 requires the cost of short-term compensated absences to be recognised when employees
render the service that increases their entitlement. Caherdavin & District Credit Union Limited had not
made an accrual for short-term employee benefits at 30 September 2014 resulting in an adjustment to
the Other Reserves at 30 September 2014 and the excess of income over expenditure For the Financial
Year Ended 30 September 2015.
(e)
Pension Provision
FRS 102 requires a provision to be recognised where an agreement has been entered into with a multiemployer plan that determines how the deficit will be funded. The provision is measured based on the
contributions payable that arise from the agreement with the multi-employer pension plan to the extent
that they relate to the deficit.
Schedules to the income and expenditure account
FOR THE YEAR ENDED 30 SEPTEMBER 2016
The following Schedules do not form part of the Statutory Financial Statements which are the subject of the
Independent Auditor’s Report on pages 10 to 11.
SCHEDULE 1 – INTEREST ON LOANS
Loan Interest Income Received
Loan Interest Income Receivable
TOTAL PER INCOME AND EXPENDITURE ACCOUNT
SCHEDULE 2 – OTHER INTEREST INCOME AND SIMILAR INCOME
Investment Income Received/Receivable within 1 year
Investment Income Receivable outside of 1 year
TOTAL PER INCOME AND EXPENDITURE ACCOUNT
SCHEDULE 3 – OTHER INCOME
2016
€
2015
€
1,672,057
1,677,058
42,570
60,225
1,714,627
1,737,283
2016
€
2015
€
917,368
1,553,674
15,123
2,147
932,491
1,555,821
2016
€
2015
€
Entrance Fees
972
485
Other Income
17,390
22,052
TOTAL PER INCOME AND EXPENDITURE ACCOUNT
18,362
22,537
33
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FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2016
Schedules to the income and expenditure account
(continued)
SCHEDULE 4 – OTHER MANAGEMENT EXPENSES
2015
€
Rent & Rates
33,023
30,508
Light and Heat and Cleaning
42,330
39,060
18,647
Repairs and Maintenance
17,488
Security Costs
10,936
9,885
Printing and Stationery
64,000
50,469
Postage and Telephone
17,799
15,530
Advertising, Donations and Sponsorship
13,104
8,053
Training Costs
16,845
11,750
Convention Expenses
12,722
2,541
League and Chapter Dues
71,105
70,518
AGM Expenses
27,678
32,818
Travel and Subsistence
9,568
7,720
Audit Fee
17,835
17,836
General Insurance
32,365
26,548
Pension
80,998
73,737
Legal and Professional Fees
110,113
153,504
Computer Maintenance
107,962
59,767
Miscellaneous Expenses
13,779
10,072
Regulatory Levies and Charges
Share and Loan Insurance
Marketing
National Advertising Campaign
62,876
57,215
487,242
470,142
81,154
39,943
1,250
5,543
Registrar Fees
12,140
319
Staff Uniforms
2,352
6,502
Deposit Guarantee Scheme
Ombudsman Fees
368
822
2,540
2,252
Transfer of Engagements Costs
81,421
31,861
Risk & Compliance
20,197
20,349
Bank Charges
TOTAL PER INCOME AND EXPENDITURE ACCOUNT
34
2016
€
38,399
25,648
1,489,589
1,299,559
ReportBody_Layout 1 06/12/2016 05:54 Page 35
REPORT OF THE
BOARD
OVERSIGHT
COMMITTEE
The Credit Union Act 1997 (as amended) required
the appointment of a Board Oversight Committee
to assess whether the Board of Directors has operated in accordance with Part IV, Part IV(A) and any
other matter prescribed by the Bank in respect of
which they are to have regard to in relation to the
Board of Directors.
ANNUAL
REPORT 2016
These included a Strategic Planning Seminar, Anti
Money Laundering Training, Data Protection Training and Role of the Board Oversight Committee.
COMPLIANCE AND INTERNAL AUDITOR
We had three meetings with James Mounsey of
MOET Accountants to fulfill our statutory obligations under the 2012 Act. We reviewed reports of
the Compliance Officer which were submitted to
meetings of the Board of Directors.
CEO AND STAFF
We would like to thank our CEO Caroline Long and
all her staff for their assistance during the year.
BOARD OF DIRECTORS
We attended every meeting of the Board of Directors and we also reviewed the various reports submitted by the committees. The Board Oversight
Committee held its quarterly meetings with the
Board of Directors, as we are obliged to hold these
meetings according to the Act. We also attended
meetings with the external auditors Grant Thornton.
William Galvin, Mary Tuite
and Teresa Dundon
COURSES AND SEMINARS
The Board Oversight Committee attended various seminars and courses.
35
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REPORT OF THE
CREDIT
COMMITTEE
The Credit Committee is appointed by the Board
of Directors annually and is responsible for approval
of loans and review of all loans that have been
granted by Credit Officers.
The role of the credit committee is to manage and
oversee the lending process, including considering
and deciding on loan applications where relevant
and in accordance with the requirements of the
loans policy.
The total value of loans issued to members up to
30th September, 2016 was €12 million (comprising
of €10.6 million issued by Caherdavin & District
Credit Union Ltd. and €1.5 million issued by St.
Patrick’s Parish (Limerick) Credit Union Ltd.)
All loan assessments are conducted by experienced
credit officers. The objective when considering loan
applications is to treat each loan on its own merits
and to give each loan application due consideration
in line with the lending policy.
The main factor taken into consideration is the
member’s ability to repay the loan. It is important
to have an overall financial picture of the member’s
commitments. Caherdavin & District Credit Union
Ltd., is a member of the Irish Credit Bureau and find
this to be an invaluable tool in assessing loan
applications. Each member signs permission for this
credit search to be carried out at loan application
stage.
In order to ensure an efficient turnover of loan
applications it is important that all applications in
excess of shares are accompanied by valid current
proof of income. In the case of self-employed
applicants we require a set of audited accounts, tax
clearance certificate and the most recent 3 months
bank statements.
We also request proof of identification and proof of
address from the member before the loan can be
issued.
36
At times the Credit Officer has no alternative but
to refuse or reduce loans. These decisions are not
taken lightly and in the opinion of the Credit
Committee the granting of these loans would
put further financial pressure on the
applying member. The member
always has the right to
appeal these decisions to the appeals committee
of the Board of Directors.
One of the benefits of borrowing from your local
Credit Union is the Loan Protection Insurance at no
extra cost. In the event of the death of a borrowing
member their outstanding loan balance is cleared
in full providing the member was in good health at
the time of drawing down the loan. There is also a
disability portion to this insurance and this is
available to all borrowing members who have taken
out a loan while in good health and under the age
of 65 and subsequently become unfit to work at any
occupation.
We would like to thank our loyal members who
continue to borrow from their Credit Union and
would urge all our members to contact their Credit
Union first for their financial needs.
Phyllis Franklin, Danny Vaughan and
Michael O’Neill.
REPORT OF THE
CREDIT CONTROL
COMMITTEE
The role of the Credit Control Committee is to recover and secure members money. In doing this,
we aim first and foremost to address members financial difficulties in a sympathetic and resolution
driven manner. We will never lose sight of our policy
and ethos where our members always come first.
We are committed to assisting members in addressing any problems they may have in a confidential, sensitive and respectful manner. We urge
any member with difficulty making loan repayments
to contact the Credit Control Department as early
as possible. Sometimes, the Credit Union needs to
pursue the legal route. This only happens when all
other efforts have failed and there is a clear lack of
co – operation from the member.
The total write off this year is €570,322 (2015:
€360,439). Every effort is made to collect written
off loan accounts and a total of €197,029 (2015:
€178,924) was recovered for the year ended 30th
September, 2016.
A special thanks to all those members who save
regularly, borrow and repay promptly as they make
life easier for all concerned and help make
Caherdavin & District Credit Union Ltd. an on-going
success.
Nuala Hennigar and Frank O’Gorman.
ReportBody_Layout 1 06/12/2016 05:54 Page 37
MEMBERSHIP
REPORT
At the 30th September 2016 membership reached
29,101 at Caherdavin & District Credit Union Ltd.
Membership is open to all persons who reside or
work within our common bond. Please contact any
of our offices for further information.
Accounts opened for juveniles (under the age of 16)
must be opened as joint accounts with an adult as
the first named party.
As part of our juvenile promotion all new accounts
opened for children or grandchildren of existing
members will automatically receive a gift of €10
ANNUAL
REPORT 2016
shares, once the account is opened before the
child’s second birthday. This is limited to one gift
of €10 per child.
Finally the services of the Credit Union are as
relevant now for people as they ever were and
there has never been a better time to join.
We would like to take this opportunity to thank you
our members for your continued support.
Jenny Shanahan, Frank Carrig,
and Lorraine Russell.
DOCUMENTATION NEEDED TO OPEN NEW ACCOUNTS IS AS FOLLOWS
l
Proof of Address – Utility Bill, Bank Statement or Government Letter (must be dated within the last 6
months). Must be the original (NOT a copy).
l
Proof of P.P.S number available on Revenue/Social Welfare Document or Payslip.
l
Proof of identification – valid Drivers Licence or Passport.
DOCUMENTATION NEEDED TO OPEN NEW ACCOUNTS FOR JUVENILES IS AS FOLLOWS
l
All accounts opened for a juvenile must now be opened as a joint account with an adult member. The
adult member must provide all the documentation outlined above. The following documentation for
the juvenile member must also be provided.
l
Proof of identification – valid Passport or Birth Cert for Child.
l
Proof of P.P.S. number – Social Welfare Document.
l
Proof of address of the parent of the child.
l
Juveniles aged 7 and over must be present at account opening stage.
RE-ACTIVATED ACCOUNTS
Under legislation if a member has not used their account within the last three years it becomes a dormant
account and must be re-activated. In order for your account to be re-activated the following documents are
required:
l
Proof of Address – Utility Bill, Bank Statement or Government Letter (must be dated within the last 6
months). Must be the original (NOT a copy).
l
Proof of identification – valid Drivers Licence or Passport.
l
Member will also need to call to the office in person, to sign the relevant documentation.
37
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REPORT OF THE
INSURANCE
OFFICER
We at Caherdavin & District Credit Union Ltd.,
provide Life Savings Insurance, Death Benefit
Insurance and Loan Protection Insurance on the
lives of eligible saving and borrowing members at
no direct additional cost. These Insurances are
underwritten by the Credit Union movement’s
Insurance Company called ECCU and is paid for by
the Credit Union as an operational expense.
We had 120 LPLS claims in total for year ending
September 30th 2016. This included 104 death
benefit insurance claims totalling €200,200, Life
Savings claims amounting to €253,368 and Loans
repaid totalling €136,702.
LOAN PROTECTION INSURANCE
This insurance is automatically provided to qualifying Credit Union members once they sign a credit
agreement with their Credit Union. It covers a
member up to the age of 85 by repaying any of the
loan which is still outstanding at time of death.
Disability Insurance is in place which covers member’s loans if the borrowing member is no longer
able to work at any occupation due to ill health with
a loan balance outstanding. This cover ceases at the
age of 65. To avail of these insurances it is
sometimes necessary for a Declaration of Health
form to be completed at time of loan application.
This is to protect the member and ensure that if
they come to rely on the insurance they are adequately covered by the policy.
LIFE SAVINGS INSURANCE
The maximum amount insured is €12,700 and
insurance no longer accrues after the age of 70.
Withdrawals may affect the amount of insurance
received by the beneficiary upon a members death.
38
DEATH BENEFIT INSURANCE
We at Caherdavin & District Credit Union Ltd.,
insure members who join before the age of 70, are
in good health at time of joining and have a
minimum balance in their account at time of death
of €50. Juvenile members (members under 16) are
covered once there is €10 in their account at the
date of death. The Death Benefit Insurance of
€1,950 is payable specifically for Funeral Expenses.
ELIGIBILITY
To qualify for Life Savings Insurance and Death
Benefit Insurance, members must have joined
before the age of 70, be actively at work or in good
health at time of joining. Loan Protection Insurance
is available to members who are actively at work or
capable of working or carrying out their normal
occupational duties at time of borrowing.
NOMINATIONS
We encourage all members to have a nomination
in place. Members over the age of 16 are entitled
to nominate a person or persons to receive his/her
property in the Credit Union in the event of his/her
death up to a maximum of €23,000. Property
includes shares and insurance proceeds excluding
the Death Benefit Insurance. For amounts in excess
of €23,000, certified evidence of grant of probate
is necessary to distribute the excess funds. In the
event of a deceased member not having completed
a nomination form, by Board approval funds up to
€15,000 can be distributed to the next-of-kin. If the
value of the funds in the account exceed €15,000,
we require grant of probate before any of the funds
will be released.
OTHER INSURANCES
We continue to offer the Group Rate with VHI to all
members and AXA also give a discount to credit
union members.
Holiday Insurance is available online at
www.coveru.ie.
Mary Casey.
ReportBody_Layout 1 06/12/2016 05:54 Page 39
REPORT OF THE
ANNUAL
REPORT 2016
INVESTMENT
COMMITTEE
The Board of Directors selected an Investment
Committee of 6 people. The Board consider that
the committee members’ mix of skills and competencies is appropriate given the scale and
complexity of the investment portfolio. The
investment committee met on a regular basis and
considered all options available for surplus funds
and investments maturing.
The Board also employ Goodbody Private Wealth
Management as Investment Advisors and a number
of meetings have been held with them during the
financial year.
Similar to last year, the investment environment
remains extremely challenging for Credit Unions.
The low investment returns currently available is a
global phenomenon and the result of the response
of all major central banks monetary policy as a
result of current weak economic growth. Additionally, the full implications of the decision taken by
the UK to leave the EU are still unknown and have
added to the volatile investment environment.
Caherdavin & District Credit Union Ltd.’s portfolio
has been strategically balanced between deposits
and senior bank bonds and Irish Government
bonds. To date, Caherdavin & District Credit Union
Ltd. has secured a premium to deposits for the
same risk profile through investment in senior
unsecured bonds. Caherdavin & District Credit
Union Ltd. has continued to lock in investment
returns for members, whilst being mindful of
the outlook for loan growth and the
requirement for sufficient short
term liquidity.
The overall investment strategy has consistently
been to maximise member returns with a low level
of risk and in ensuring that this strategy is continually implemented, Caherdavin & District Credit
Union Ltd. has worked to ensure that all investments are in line with policy and strategy and
current regulatory requirements.
Caherdavin & District Credit Union Ltd.’s investment portfolio has received a high degree of
attention by its Board, Investment Committee and
Advisors over the year and remains under continuous assessment. The total investment portfolio
under management at year end 30 September
2016 was €84,124,187.
It is important to point out that the strategy
embarked upon by Caherdavin & District Credit
Union Ltd. over the last number of years has served
it’s members very well, in terms of risk, liquidity and
investment returns and we will continue to build on
this strategy over the medium term.
Carmel Cronin, James Stewart,
Gerry O’Shea, Caroline Long,
Declan Benson and
Barry-John Hannan.
39
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CREDIT UNION
INFORMATION
40
Directors
James Stewart
Linda McInerney
Carmel Cronin
Antoinette Barry
Aodhagan Behan
Paddy Delaney
Phyllis Franklin
Frank O’Gorman
Michael O’Neill
Chairperson
Vice Chairperson
Secretary
Board Oversight Committee
William Galvin, Mary Tuite and Teresa Dundon
Credit Committee
Danny Vaughan, Phyllis Franklin and Michael O’Neill
Credit Control Committee
Frank O’Gorman and Nuala Hennigar
Investment Committee
Carmel Cronin, James Stewart, Gerry O’Shea, Caroline Long,
Declan Benson and Barry-John Hannan
Membership Committee
Frank Carrig, Jenny Shanahan and Lorraine Russell
Insurance Officer
Mary Casey
CEO
Caroline Long
Deputy CEO
Declan Benson
Senior Loans and
Operations Officer
Marie O’Shea
Finance Officer
Barry-John Hannan
Credit Control Officers
Kay O’Reilly, Ailish Barry
Staff
Mary Casey, Eilish Downes, Mary McGrath, Liz Harris, Margaret Walsh,
Lorraine Russell, Leah Kennedy, Jaimie Price, Dearbhaile O’Brien,
Claire McCarthy, Jenny Shanahan, Orla McMahon, Leo McGrath,
Sarah Barry, Bernie O’Riordan, Tanya Bowen, Robbie Graham,
Michael Houlihan, Mary McCarthy, Gerardine Egan
Volunteer Teller
Liz Carney
Principal Bankers
Bank of Ireland
Jetland Shopping Centre, Ennis Road, Limerick.
Solicitors
Dorothy Tynan & Co.
78 O Connell St., Limerick.
Investment Advisors
Goodbodys Private Wealth Management
Michael Powell Solicitors
5 Lapps Quay, Cork
ReportBody_Layout 1 06/12/2016 05:54 Page 41
ReportBody_Layout 1 06/12/2016 05:54 Page 42
WHY MAKE A NOMINATION?
The Board of Directors strongly recommend that all members over the
age of 16 complete a Nomination Form. All members may nominate a
person or persons to be the beneficiary of their Credit Union Savings
including Insurance, up to a maximum of €23,000 at the time of their
death. The balance in excess of €23,000 will then form part of the deceased member’s estate. In the case of a joint account, the balance
automatically goes to the surviving member. In the event of a member
dying without a Nomination, permission can be sought from the Board
of Directors to pay funds to the next of kin up to a maximum of
€15,000. If the balance in the account including insurance is greater
than €15,000, the total funds will form part of the deceased member’s
estate. Nomination Forms are available in all five of our offices.
42
“ALL MEMBERS MAY NOMINATE A PERSON OR
PERSONS TO BE THE BENEFICIARY OF THEIR
CREDIT UNION SAVINGS INCLUDING INSURANCE,
UP TO A MAXIMUM OF €23, 000 ”
ReportBody_Layout 1 06/12/2016 05:54 Page 43
ANNUAL
REPORT 2016
Important Notice
SAVING
STAMPS
From the 1st January 2017,
our Savings Stamps service is improving.
From this date, paper stamps and stamp
books will no longer be available to
purchase in our offices.
However, to allow members to continue
to save in this way, we will offer a new
STAMP sub account. Members can
continue to lodge to their stamp sub
account in €2.00 denominations.
Normal ID & proof of address
documents will be required
to open such an account.
Members should be advised that all
existing stamp books should be
presented for encashment or
lodgement to the new STAMPS
account as soon as possible.
43
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ST. JOHN’S Office, William Street
CREDIT UNION
OPENING HOURS
CAHERDAVIN Office, Redgate
Monday and Tuesday 10.00am to 5.00pm
Wednesday 11.00am to 5.00pm
Thursday and Friday 10.00am to 7.00pm
MOYROSS Community Centre
Friday 10.00am to 12.45pm
and 2.15pm to 5.15pm
Tuesday and Thursday
9.30am to 12.30pm and 1.30pm to 5.15pm
Wednesday 11.00am to 12.30pm
and 1.30pm to 5.15pm
Friday 9.30am to 12.30pm and
1.30pm to 5.30pm
Saturday 10.00am to 4.00pm
ST PATRICK’S Office, St. Patrick’s Road
Monday, Tuesday and Thursday
10.00am to 12.25pm and
2.00pm to 5.25pm
Wednesday 11am to 12.25pm, 2.00pm to 5.25pm
Friday 10am to 12.25pm and 2.00pm to 7.00pm.
SOUTH HILL
New Opening Hours in South Hill Office
from the 1st December 2016
Open Thursday from 10.00am to 6.00pm
*Closed for lunch between 1.00pm-2.30pm
NOTE: South Hill Office is now closed on Fridays
CHRISTMAS OPENING HOURS
Friday 23rd December
Caherdavin 10.00am-7.00pm
St. Patrick’s 10.00am-7.00pm
St. John’s
9.30am-5.30pm
South Hill Closed
Moyross Closed
All offices are closed from 24th December – 29th December inclusive.
Friday 30th December
Caherdavin 10.00am – 7.00pm
St. Patrick’s 10.00am – 7.00pm
St. John’s
9.30am – 5.30pm
South Hill Closed
Moyross Closed
All Offices closed on 31st December 2016, 1st, 2nd January 2017.
44
Tuesday 3rd January 2017 Caherdavin 10.00am – 5.00pm
St. Patrick’s 10.00am – 5.25pm
St. John’s
9.30am – 5.15pm
NORMAL LUNCHTIME CLOSING APPLIES IN ST. PATRICK’S AND ST. JOHN’S OFFICES.
Cover_Layout 1 06/12/2016 06:03 Page 3
ONLINE ACCESS
& MOBILE APP
Move money between
your accounts
Move money to other
bank accounts
Check your balances
Check your statement
Pay a bill
Tel. 061 455 831 Email: [email protected]
www.caherdavincreditunion.ie
Caherdavin & District Credit Union Ltd. is regulated by the Central Bank of Ireland.
Cover_Layout 1 06/12/2016 06:03 Page 4
Caherdavin & District Credit Union
R AT E
7.95%
NEW
OAN
L
Y
G
R
ENE
GETTING
WINTER
READY
MANAGEABLE LOANS, MADE FOR YOU
E XA M P
LE
Amount
Variable
Borrowed Rate APR
€5,000
8.27%
WEEKLY
REPAYMENTS
Term
Cost of
Credit
€23.32
5 Years
€1,058.44
Tel. 061 455 831 Email: [email protected]
www.caherdavincreditunion.ie
BLE
AVAILA L
Terms & Conditions Apply. All Loans Subject to Approval. Loan Based on a Variable APR. Loan based on 260 repayments.
Caherdavin & District Credit Union Ltd is regulated by the Central Bank of Ireland
UNTI
2017
31. 01.