1968 – 2019
Annual Report and Financial Statements for the year ended 30 September 2019 M ec AG 8 D ce n an M Su nd AG te at At les ff Ra
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NOTICE OF ANNUAL GENERAL MEETING (AGM)
an L o re s t % e int te 12 d a n re b i v i d e % D 15 .
Notice was posted to all members on 25 October 2019 that the 52nd AGM of An Post Employees’ Credit Union Limited will be held at Wynns Hotel, Lower Abbey Street, Dublin 1 on Sunday, 8 December 2019 at 11am. You are asked to note as follows: 1.
The election of five members to the Board of Directors, two members to the Board Oversight Committee and an auditor will take place at the meeting. The closing date for nominations was 15 November 2019.
2.
Motions for consideration at the AGM must be submitted in writing to the Secretary at 12-14 The Anchorage, Ringsend Road, Dublin 4 by Wednesday, 4 December 2019.
3.
Members are asked to bring identification to the AGM.
An attendance prize draw will be held for those attending the AGM. Prizes this year are two mid-week breaks for two people to the Gleneagle Hotel, Killarney and five €100 cash prizes. Refreshments will be served after the meeting. Paul Dolan Secretary
NOTICE TO MEMBERS LIVING OUTSIDE THE DUBLIN COMMUTER BELT (Members living outside Dublin, Meath, Kildare and North Wicklow) The Board of the credit union is anxious that as many members as possible would attend the AGM but it recognises the practical difficulties involved. For those who might find it possible to attend the meeting, the Board have agreed to make a contribution of €70 towards the costs of travel and overnight on Saturday. Those staying overnight on Saturday, 7 December, must make their own arrangements. It would be appreciated if those who intend to travel would notify the undersigned in advance so that a cheque can be prepared and available at the end of the meeting. Karina Malocca Credit Union office number: 01-6602000
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Contents
02
10
24
45
02
13
38
46
03
20
41
47
04
21
43
48
07
22
44
49
09
23
Welcome from the Chairman
AGM Agenda
Directors and Other Information
Chairperson’s Statement 2019
Directors’ Report
Statement of Directors’ Responsibilities
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Statement of Board Oversight Committee’s Responsibilities
Independent Auditor’s Report
Accounting Policies
Income & Expenditure Account
Balance Sheet
Statement of Changes in Reserves
Cash Flow Statement
Notes to the Financial Statements
Additional Information
Finance Report
Report of the Board Oversight Committee
Report of the Credit Committee
Report of the Credit Control Committee
Report of the Membership Officer
Other credit union Committees
Tax and your credit union Savings
In Memoriam
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An Post Employees’ Credit Union Limited Annual Report 2019
Welcome Greetings from the Board, Board Oversight Committee, other volunteers and staff at the credit union and welcome to the annual report for 2019. As in previous years, the report sets out for members how the credit union has performed during the year and how the officers and staff have acted on your behalf in managing the credit union’s affairs. The AGM will be held this year at 11am on Sunday, 8 December, at Wynns Hotel, Lower Abbey Street, Dublin 1. Parking is plentiful in the City Centre. As you know, the AGM is the single most important event of the year for the credit union. It’s where the Board of the credit union, the auditor and the various committees report back to the members. As each individual credit union is owned and controlled by its own members, it is very important for good governance that as many members as possible attend the AGM, ask questions and find out what is happening. I look forward to seeing you at the AGM. You may even be a lucky winner in the attendance prize draw! Tony Harmon Chairman
1)
Agenda
Introduction and welcome 2) Determination of quorum 3) Adoption of standing orders 4) Minutes of the 51st AGM 5) Report of the Board of Directors (page 4) 6) Report of the auditor (page 10) 7) Finance report and consideration of the accounts (page 41) 8) Declaration of dividend and loan interest rebate 9) Report of the Board Oversight Committee (page 43) 10) Report of the Credit Committee (page 44) 11) Report of the Credit Control Committee (page 45) 12) Report of the Membership Officer (page 46) 13) Motions and Rule Amendments 14) Report of the Nominations Committee 15) Appointment of tellers 16) Elections 17) Suspension of standing orders/ open forum 18) Result of elections 19) Prize draw 20) Close of meeting/ refreshments
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Directors and Other Information Directors Chairperson Vice-chairperson Secretary Board members
Anthony Harmon Mary Harrahill Paul Dolan Colum Brennan, Charles Sheehan, Brian McKenna, Teresa Kavanagh, Gerard Ryan, Martin Ryan, Margaret Fitzpatrick, Tomás O’ Maonaile
Board Oversight Committee Chairperson Secretary Committee
Danny Hoare Myles Davoren Jean Hamilton, Daniel Joyce, Brian Martin
Acting Manager Alan Whelan
Internal Auditor Crowleys DFK Chartered Accountants
Registered Number 87CU
Registered Office 12 - 14 The Anchorage, Charlotte Quay, Ringsend Road, Dublin 4, D04 A718
Independent Auditor FMB Advisory Limited, 4 Ormond Quay Upper, Dublin 7, D07 PF53
Bankers Ulster Bank, 2 - 4 O’Connell Street, Dublin 1, D01XH68
Solicitors Ferrys Solicitors, Inn Chambers, 15 Upper Ormond Quay, Dublin 7, D07 YK6A
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An Post Employees’ Credit Union Limited Annual Report 2019
Chairperson’s Statement 2019 It is a great pleasure to present the Directors’ Report on behalf of the Board for the year ended 30 September 2019. It has been another busy year at the credit union office with an increase in lending, perhaps reflecting the pick-up in the economy in recent years. The number of members registered for online banking and the number of users of the phone “app” has also increased significantly. This is an important area for the credit union as the credit union is aiming to introduce full online loan applications. The credit union has continued to visit An Post workplaces on a weekly basis and it has proven to be a great way to “touch base” with existing and potential new members. If you feel that your work area has missed out or could benefit from another visit, perhaps you might contact Development Officer Noel Cocoman at the office. The Board is recommending a dividend on shares of 0.15% this year and an impressive loan interest rebate of 12%. As the interest rebate is not subject to DIRT, it is a great benefit to borrowers and it reduces the effective cost of their credit union loan. Like the dividend, the rebate is added to the member’s shares. The wider credit union movement is continuing to recover since the difficult years of the recession. There is a significant increase in lending underway while loan arrears remain low. Merger activity has reduced although smaller credit unions continue to transfer to their larger neighbours if they are deemed to be unviable from a financial perspective. The Central Bank continues to challenge credit unions with an ever deepening regulatory framework. The car draw is as popular as ever and continues to attract new members to the credit union. The fact that 100% of draw subscriptions are paid out in prizes is a huge attraction. Again a BMW 319D has been added to the monster Christmas car draw for the sixth year in a row, in addition to two Ford Fiestas and seventy cash prizes of €1,000. The cash option of €36,000 applies again in relation to the BMW. The annual report and the AGM provide an opportunity to thank various people who have made a significant contribution to the credit union and who are stepping down from their roles. Longstanding Board member Colum Brennan is leaving the Board this year after more than thirty years. His contribution on the various committees and as Secretary of the credit union has been immense and I thank him on behalf of the members. A big thank you to Brian McKenna who is also stepping down from the Board this year for all his work over the past few years. I’m delighted to report that Brian will remain involved in a voluntary capacity.
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The AGM this year is my first as Chairperson of the credit union. It has been an interesting and challenging year with return on investments at an all-time low, the departure of the previous Manager Paul Ryan to another credit union, the modest growth in the loan book which I hope will continue to increase over the coming years and the building of the capacity of the credit union to meet new regulatory demands. The credit union is your credit union and I would encourage all members to continue to support it by making the most of your membership and by choosing it as your first choice loan provider. In conclusion, I would like to thank my colleagues on the Board, the members of the Board Oversight Committee and the other volunteers for all their work and enthusiasm over the year. Thanks to our previous Manager Paul Ryan, also to Acting Manager Alan Whelan and staff members Karina, Keith, Adrienne, Siobhan, Sarah Comerford, Sarah Walsh, Noel, Amy and Aaron for their hard work and help over the past twelve months. A special word of thanks to our representatives around the country and to the staff at the An Post National Payroll Centre for their help and assistance. Finally, I look forward to seeing as many of you as possible at the AGM on Sunday, 8 December, at Wynns Hotel. Tony Harmon Chairperson
12%
Loan interest rebate
0.15%
dividend on shares
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An Post Employees’ Credit Union Limited Annual Report 2019
AGM 2018 01
06 02 07
05 03
04 01
John Barrett and Charlie Sheehan
05
Albert Walsh and Tony Harmon
02
John Donohoe
06
Paddy Doody and Frank O’Reilly
03
Pauline Fowler-Warren and Noel Cocoman
07
Margaret Fitzpatrick and Teresa Kavanagh
04
Dan Joyce and Danny Hoare
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Directors’ Report for the year ended 30 September 2019 The directors present their report and audited financial statements for the year ended 30 September 2019. PRINCIPAL ACTIVITY AND REVIEW OF BUSINESS On review of the credit union’s financial results the following key performance indicators were identified: 2019 2018 Members Savings movement % +5.35% +2.92% Gross Loan movement % +2.36% +2.65% Regulatory Reserve % of total assets 11.00% 11.00% The credit union continued to attract additional members’ savings during the financial year with member shares having increased from the prior year. Lending activity is continuing to increase strongly with growth of 2.36% in the gross loan book in the financial year. The credit union continues to maintain regulatory reserves in excess of the regulatory minimum of 10%. RESULTS FOR THE YEAR AND STATE OF AFFAIRS AT 30 SEPTEMBER 2019 The income and expenditure account and the balance sheet for the year ended 30 September 2019 are set out on pages 20 and 21. PRINCIPAL RISKS AND UNCERTAINTIES The credit union, as with many other financial institutions, continues to face uncertainties arising from the general economic conditions. The board are actively monitoring the effects of these conditions on the daily operations of the credit union. The principal areas currently requiring risk management include: - Credit risk: The risk of financial loss arising from a borrower, issuer, guarantor or counterparty that may fail to meet its obligations in accordance with agreed terms. In order to manage this risk the Board approves the Credit Unions lending policy and all changes to it. All loan applications are assessed with reference to the lending policy in force at the time. Subsequently, loans are regularly reviewed for any factors that may indicate impairment. The Board approves the Credit Union’s Credit Control and Provisioning policies which monitors the procedures for the collection of loans in arrears and also the basis for impairment on loans. - Liquidity risk: The risk that a credit union will not be able to fund its current and future expected and unexpected cash outflows as they fall due without incurring significant losses. This may occur even where the credit union is solvent. The credit union’s policy is to maintain sufficient funds in liquid form at all times to ensure that it can meet its obligations as they fall due. The objective of the liquidity policy is to smooth the timing between maturing assets and liabilities and to provide a degree of protection against any unexpected developments that may arise. - Capital risk: Capital is required to act as a cushion to absorb losses arising from business operations and to allow a credit union to remain solvent under challenging conditions. Capital risk arises mainly as a result of the quality or quantity of capital available, the sensitivity of
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An Post Employees’ Credit Union Limited Annual Report 2019
the credit union exposures to external shocks, the level of capital planning and the capital management process. Capital risk could potentially impair a credit union’s ability to meet its obligations in an adverse situation. The board manages this risk by ensuring that sufficient reserves are set aside each year to absorb any potential losses. - Operational risk: The risk of loss (financial or otherwise) resulting from inadequate or failed internal processes or systems of the credit union; any failure by persons connected with the credit union; legal risk (including exposure to fines, penalties or damages as well as associated legal costs); or external events; but does not include reputational risk. Examples of operational risks include hardware or software failures, cyber risk, inadequate business continuity plans, misuse of confidential information, data entry errors and natural disasters. - Interest rate risk: The interest rate risk arises from differences between the interest rate exposures on loans and investments receivable, as offset by the cost of capital, which is typically that of distributions to members payable in the form of dividends and interest rebates. The credit union considers rates of interest receivable when deciding on the appropriation of income and its returns to members. The Board monitors such policy in line with the Credit Union Act, 1997 (as amended) and guidance notes issued by the Central Bank of Ireland. - Strategy/business model risk: This refers to the risk which credit unions face if they cannot compete effectively or operate a viable business model. Strategy/business model risk also includes the inherent risk in the credit union’s strategy. The board have developed and approved a detailed strategic plan to formulate the short-term direction of the credit union operations. DIVIDENDS The directors recommend payment of a dividend of €65,490.00 (0.15%) for the year, (2018 - 0.25%) and an interest rebate of €204,383.00 (12.00%) for the year. (2018 - 12.00%) INTERNAL AUDIT FUNCTION In accordance with Section 76K of the Credit Union Act, 1997 (as amended) the board have appointed an internal audit function to provide for independent internal oversight and to evaluate and improve the effectiveness of the credit union’s risk management, internal controls and governance process. ACCOUNTING RECORDS 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 12 - 14 The Anchorage, Charlotte Quay, Ringsend Road, Dublin 4. Approved by the Board on : 30 October 2019 Mary Harrahill Member of the Board of Directors
Paul Dolan Member of the Board of Directors
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Statement of Directors’ Responsibilities for the year ended 30 September 2019 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 the affairs of the credit union and of the income and expenditure of the credit union for that year. In preparing those financial statements the directors are required to: select suitable accounting policies and apply them consistently; make judgements and estimates that are reasonable and prudent; 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 the financial position of the credit union and which enable 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. In so far as the directors are aware: there is no relevant audit information (information needed by the Credit Union’s auditor in connection with preparing the auditor’s report) of which the Credit Union’s auditor is unaware, and the directors have taken all the steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the Credit Union’s auditor is aware of that information. On behalf of the Credit Union :- 30 October 2019 Mary Harrahill Member of the Board of Directors
Paul Dolan Member of the Board of Directors
Statement of Board Oversight Committee’s Responsibilities for the year ended 30 September 2019 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 IVA and any regulations made for the purposes of Part IV or Part IVA of the Credit Union Act, 1997 (as amended) and any other matter prescribed by the Central Bank in respect of which they are to have regard to in relation to the board. Myles Davoren Member of Board Oversight Committee
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An Post Employees’ Credit Union Limited Annual Report 2019
Independent Auditor’s Report to the members of An Post Employees’ Credit Union Limited Report on the audit of the financial statements OPINION We have audited the financial statements of An Post Employees’ Credit Union Limited for the year ended 30 September 2019 which comprise the Income and Expenditure Account, the Balance Sheet, the Statement of Changes in Reserves, the Cash Flow Statement and notes to the financial statements, including the summary of significant accounting policies set out on pages 13 - 19. The financial reporting framework that has been applied in their preparation is Irish Law and FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’. In our opinion the financial statements: give a true and fair view of the assets, liabilities and financial position of the Credit Union as at 30 September 2019 and of its income and expenditure for the year then ended; have been properly prepared in accordance with FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’; and have been properly prepared in accordance with the requirements of the Credit Union Act, 1997 (as amended). BASIS FOR OPINION We conducted our audit in accordance with International Standards on Auditing (Ireland) (ISAs (Ireland)) and applicable law. Our responsibilities under those standards are further described below in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Credit Union in accordance with ethical requirements that are relevant to our audit of financial statements in Ireland, including the Ethical Standard issued by the Irish Auditing and Accounting Supervisory Authority (IAASA), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. CONCLUSIONS RELATING TO GOING CONCERN We have nothing to report in respect of the following matters in relation to which ISAs (Ireland) require us to report to you where: the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate: or the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Credit Union’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
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Independent Auditor’s Report to the members of An Post Employees’ Credit Union Limited Report on the audit of the financial statements OTHER INFORMATION The directors are responsible for the other information. The other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. OPINION ON OTHER MATTERS PRESCRIBED BY THE CREDIT UNION ACT 1997, (AS AMENDED). Based solely on the work undertaken in the course of the audit, we report that: We have obtained all the information and explanations which we consider necessary for the purposes of our audit. In our opinion proper accounting records have been kept by the Credit Union, and the financial statements are in agreement with the accounting records.
Respective responsibilities RESPONSIBILITIES OF DIRECTORS FOR THE FINANCIAL STATEMENTS As explained more fully in the directors’ responsibilities statement set on page 7, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the Credit Union’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Credit Union or to cease operations, or has no realistic alternative but to do so.
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An Post Employees’ Credit Union Limited Annual Report 2019
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (Ireland) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. A further description of our responsibilities for the audit of the financial statements is located on the IAASA’s website at http://www.iaasa.ie/getmedia/b2389013-1cf6-458b-9b8f-a98202dc9c3a/ Description_of_auditors_responsiblities_for_audit.pdf.This description forms part of our auditor’s report. THE PURPOSE OF OUR AUDIT WORK AND TO WHOM WE OWE OUR RESPONSIBILITIES Our 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 auditor’s 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. FMB Advisory Limited Chartered Accountants Statutory Audit Firm DATE : 30 October 2019
4 Ormond Quay Upper Dublin 7 D07 PF53
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Accounting Policies for the year ended 30 September 2019 Statement of Compliance The financial statements of the credit union for the year ended 30 September 2019 have been prepared on the going concern basis and in accordance with generally accepted accounting principles in Ireland and Irish statute comprising the Credit Union Act 1997 (as amended) and in accordance with the Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland (FRS 102) issued by the Financial Reporting Council.
Basis of Preparation The financial statements have been prepared under the historical cost convention. Historical cost is generally based on the fair value of the consideration given in exchange for assets. The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the credit union’s financial statements.
1. Going Concern The financial statements are prepared on the going concern basis. The directors believe this is appropriate as the Credit Union: - is consistently generating annual surpluses; - is maintaining appropriate levels of liquidity in excess of minimum legislative requirements; and - has reserve levels which are significantly above the minimum requirements of the Central Bank.
2. Income Recognition Income is recognised to the extent that it is probable that the economic benefits will flow to the Credit Union and the revenue can be reliably measured. Income is measured at the fair value of the consideration received. The following criteria must also be met before revenue is recognised: INTEREST ON MEMBERS’ LOANS Interest on loans to members is recognised using the effective interest method and is calculated and accrued on a daily basis. INVESTMENT INCOME The Credit Union uses the effective interest method to recognise investment income. OTHER INCOME Other income such as commissions receivable on insurance products and foreign exchange services arises in connection to specific transactions. Income relating to individual transactions is recognised when the transaction is completed.
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An Post Employees’ Credit Union Limited Annual Report 2019
3. Cash and Cash Equivalents Cash and cash equivalents comprise cash on hand and loans and advances to banks (i.e. cash deposited with banks) with maturity of less than or equal to three months.
4. Basic Financial Assets Basic financial assets are initially measured at the transaction price, including transaction costs, and are subsequently carried at amortised cost using the effective interest method. Basic financial instruments include the following: LOANS TO MEMBERS Loans to members are financial assets with fixed or determinable payments. Loans are recognised when cash is advanced to members and measured at amortised cost using the effective interest method. 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. INVESTMENTS 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. This effectively spreads out the return on such investments over time, but does take account immediately of any impairment in the value of the investment. HELD TO MATURITY INVESTMENTS Investments designated on initial recognition as held-to-maturity are investments that the credit union intends, and is able to, hold to maturity. These are carried at amortised cost using the effective interest method. The fair value of some investment products will change during their life, but they will have a fixed maturity value at some future date. When designated as held-to- maturity, any change in the fair value during the term of the investment is ignored, with the credit union only accounting for interest received. Gains and losses are recognised in income when the investments are derecognised or impaired, as well as through the amortisation process. Investments intended to be held for an undefined period are not included in this classification. 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. In accordance with the direction of the Central Bank the amounts are shown as current assets and are not subject to impairment reviews.
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5. De-recognition of Financial Assets Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the Credit Union transfer to another party substantially all the risks and rewards of ownership of the financial asset, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated party. In the case of loans to members, loans are derecognised when the right to receive cash flows from the loans have expired, usually when all amounts outstanding have been repaid by the member.
6. Other Receivables Other receivables such as prepayments are initially measured at transaction price including transaction costs and are subsequently measured at amortised cost using the effective interest method.
7. Other Payables Other payables are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Other payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
8. Tangible Fixed Assets Tangible fixed assets comprises items of property, plant and equipment, which are stated at cost, less accumulated depreciation and any accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. Deprecation is provided to write off the cost of each item of property, plant and equipment, less its estimated residual value, on a straight-line basis over its estimated useful life. The categories of property, plant and equipment are depreciated as follows: Premises Computer equipment Office equipment
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2% Straight Line 25% Straight Line 25% Straight Line
Gains or losses arising on the disposal of an asset are determined as the difference between the sale proceeds and the carrying value of the asset, and are recognised in the Income and Expenditure account. At each reporting end date, the Credit Union reviews the carrying value of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Credit Union estimates the recoverable amount of the cash-generating unit to which the asset belongs. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
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An Post Employees’ Credit Union Limited Annual Report 2019
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in the Income and Expenditure account. Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying 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 account.
9. Employee Benefits PENSION COSTS An Post Employees’ 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 An Post Employees’ 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, known 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, An Post Employees’ 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 1 March 2019 and was approved by the Pensions Authority. An Post Employees’ Credit Union Limited has paid the contributions payable under this funding agreement. 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 2018 and it certified that the Scheme satisfied the funding standard. Further, the Actuary was reasonably satisfied that as at 28 February 2018 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.
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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 2017 using the Projected Unit valuation method. The principal actuarial assumption used in the valuation was the investment return would be 1.75% higher than the annual salary increases. The market value of the scheme’s assets at 1 March 2017 was €216m. The actuarial valuation disclosed a past service deficit of €6.4m at 1 March 2017 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, 27.5% 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. FRS 102 requires a provision to be recognised where an agreement has been entered into with a multi- employer plan that determines how the deficit will be funded. This provision was initially measured based on the contributions payable that arose from the agreement with the multi-employer pension plan to the extent that they relate to the deficit. An Post Employees’ Credit Union Limited has paid the contributions payable under this funding agreement and the resulting provision was subsequently released over the period of the agreement. On 24 May 2019, the Financial Reporting Council issued amendments to FRS 102 in respect of multi-employer defined benefit plans. These narrow-scope amendments respond to a current financial reporting issue regarding where to present the impact of an employer’s transition from defined contribution accounting to defined benefit accounting; it shall be presented in other comprehensive income. The FRC in their May 2019 publication “Impact Assessment and Feedback Statement Amendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland Multi-employer defined benefit plans” state that these amendments will only affect entities that the participate in multi-employer defined benefit plans, for which sufficient information to apply defined benefit accounting has not been available, but now becomes available. These amendments do not affect the accounting for the defined benefit plan before or after sufficient information becomes available, which is already clear in FRS 102, but only specify the accounting at the date of transition to defined benefit accounting. An Post Employees’ Credit Union Limited has received correspondences from the Irish League of Credit Unions Republic of Ireland Pension Scheme (“Defined Benefit Scheme”) confirming that the scheme does not have sufficient information available to establish an accurate split of the defined benefit assets and liabilities for individual employers due to: - Use of common contribution rate of 27.5% results in cross-subsidisation between the Employers and is not linked to individual Employer liabilities in respect of their current or former employees; - Scheme Assets are not segregated or tracked by contributing Employers and allocation of assets to individual Employers would be arbitrary and may not represent a reliable basis of allocation. As a consequence, the directors are satisfied that as there is no change to the information available to the Defined Benefit Scheme and the various employers at this time, it remains appropriate that the credit union continues to apply defined contribution accounting in respect of the Defined Benefit Scheme.
18
An Post Employees’ Credit Union Limited Annual Report 2019
OTHER EMPLOYEE BENEFITS The costs of short-term employee benefits, including holiday pay, are recognised as a liability and as an expense (unless those costs are required to be recognised as part of the cost of fixed assets) over the period they are earned.
10. Impairment of Members’ Loans The credit union assesses, at each balance sheet date, if there is objective evidence that any of its loans to members are impaired. 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, during the course of the year, there is objective evidence that any individual loan is impaired, a specific loss will be recognised. Bad debts/impairment losses are recognised in the Income and Expenditure Account, as the difference between the carrying value of the loan and the net present value of the expected cash flows.
11. Financial Liabilities - Members’ Shares and Deposits Members’ shareholdings and deposits are redeemable and therefore are classified as financial liabilities. They are initially recognised at the amount of cash deposited and subsequently measured at the nominal amount.
12. De-recognition of Financial Liabilities Financial liabilities are derecognised only when the obligations of the Credit Union specified in the contract are discharged, cancelled or expired.
13. Dividends and Other Returns to Members Dividends are made from current year’s surplus or a dividend reserve set aside for that purpose. The Board’s proposed distribution to members each year is based on the dividend and loan interest rebate policy of the Credit Union. The rate of dividend and loan interest rebate recommended by the Board will reflect: - the risk profile of the Credit Union, particularly in its loan and investment portfolios; - the Board’s desire to maintain a stable rather than a volatile rate of dividend each year; and - members’ legitimate dividend and loan interest rebate expectations; all dominated by prudence and the need to sustain the long-term welfare of the Credit Union. For this reason, the Board will seek to build up its reserves to absorb unexpected shocks and still remain above minimum regulatory requirements. Final dividends and other returns to members are accounted for as a liability after they are approved by the members in general meeting.
14. Taxation The Credit Union is not subject to income tax or corporation tax on its activities as a Credit Union.
19
15. Reserves Retained earnings are the accumulated surpluses to date that have not been declared as dividends returnable to members. The retained earnings 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. 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% 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. This reserve is similar in nature and replaces the Statutory Reserve which was a requirement of previous legislation. OPERATIONAL RISK RESERVE Section 45(5)(a) of the 1997 Act 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 calculation of the operational risk reserve based on indicative guidance issued by the Central Bank. INVESTMENT INCOME RESERVE 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 as a dividend in accordance with the Central Bank direction. All other income is classified as “realised”. A reclassification between unrealised and realised is made as investments come to within 12 months of maturity date.
20
An Post Employees’ Credit Union Limited Annual Report 2019
An Post Employees’ Credit Union Limited
Income and Expenditure Account for the year ended 30 September 2019 Schedule INCOME Interest on loans Other interest income and similar income Net interest income Other income Other gains Total Income EXPENDITURE Salaries Other management expenses Depreciation Bad debts provision Bad debts recovered Bad debts written off Total Expenditure Excess Of Income Over Expenditure For The Year Other Comprehensive Income Total Comprehensive Income
1 2 3 4
5
On behalf of the Credit Union :- 30 October 2019 Mary Harrahill Member of Board of Directors
Myles Davoren Alan Whelan Member of the Acting Manager Board Oversight Committee
The accompanying notes form part of these financial statements
2019 €
2018 €
1,665,620 308,774 1,974,394 26,126 2,000,520
1,700,106 269,623 1,969,729 31,589 2,001,318
316,138 912,335 45,779 (10,434) (129,221) 62,993 1,197,590 802,930
346,704 888,242 47,076 (117,775) (69,258) 49,674 1,144,663 856,655
802,930
856,655
21
An Post Employees’ Credit Union Limited
Balance Sheet as at 30 September 2019 Notes ASSETS Cash and cash equivalents Investments Loans Less provision for bad debts Tangible fixed assets Debtors, prepayments and accrued income Total Assets LIABILITIES Members’ shares Members’ deposits Members’ draw account Other liabilities, creditors, accruals and charges Retirement benefit liability Total Liabilities RESERVES Regulatory reserve Operational risk reserve Other reserves Realised reserves Unrealised reserves
2019 €
2018 €
6 7 8 11 12 13
10,670,233 24,537,944 20,491,689 (879,441) 1,024,063 239,711 56,084,199
5,960,123 26,912,409 20,020,177 (889,875) 1,042,104 275,963 53,320,901
14 15
44,678,127 378,805 94,461 48,283 45,199,676
42,417,222 350,998 83,628 66,825 4,411 42,923,084
18 18
6,169,262 547,529
5,863,773 528,513
18 18
4,130,061 37,671
3,976,469 29,062
10,884,523 56,084,199
10,397,817 53,320,901
16
Total Reserves
On behalf of the Credit Union :- 30 October 2019 Mary Harrahill Member of Board of Directors
Myles Davoren Alan Whelan Member of the Acting Manager Board Oversight Committee
The accompanying notes form part of these financial statements
22
An Post Employees’ Credit Union Limited Annual Report 2019
An Post Employees’ Credit Union Limited rv se
er
rv
ve
es
e
se
er
Re
lR To t
al
Sp
ec
ia
m
€
€
€
1,072,241 2,080,831
420,000
12,025
54,400
6,569
ve In
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€
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€
iv
€
en
So
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523,795
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5,682,480
G
€
U
O Ri pe s k ra Re t i o se na rv l e
R Re e g se u la r v to e ry
Opening balance at 1 October 2017
€
Re
ve
for the year ended 30 September 2019
e
Statement of Changes in Reserves
9,852,341
Total comprehensive income
856,655
856,655
Dividend paid
(100,230)
(100,230)
Interest rebate paid
(202,772)
(202,772)
Transfer between reserves
181,293
4,718
(169,611)
-
-
7,330 (32,400)
Other Closing balance at 30 September 2018 5,863,773
528,513
1,456,283 2,080,831 420,000
19,355 22,000
-
(8,670)
493
493
7,062 10,397,817
Total comprehensive income
802,930
802,930
Dividend paid
(104,578)
(104,578)
Interest rebate paid
(202,805)
(202,805)
Transfer between reserves
305,489
19,016
(347,105)
-
-
5,150
6,600
Other Closing balance at 30 September 2019 6,169,262
547,529
1,604,725 2,080,831 420,000
24,505 28,600
-
(10,850)
2,009
2,009
9,071 10,884,523
The balance on the regulatory reserve represents 11.00% of total assets as at 30 September 2019 (11.00% as at 30 September 2018). On behalf of the Credit Union :- 30 October 2019 Mary Harrahill Member of Board of Directors
Myles Davoren Alan Whelan Member of the Acting Manager Board Oversight Committee
23
An Post Employees’ Credit Union Limited
Cash Flow Statement for the year ended 30 September 2019 Note Opening cash and cash equivalents Cash flows from operating activities Loans repaid Loans granted Loan interest received Investments interest received Bad debts recovered Dividends paid
2019 €
2018 €
5,960,123
6,988,230
9,771,695 9,656,566 (10,306,200) (10,223,840) 1,663,208 1,696,583 351,761 264,830 129,221 69,258 (104,578) (100,230)
Interest rebate paid Operating expenses Net cash flows from operating activities Cash flows from investing activities Fixed assets purchased Net cash flow from investments Net cash flows from investing activities Cash flows from financing activities Members’ shares received
(202,805) (1,228,473) 73,829
(202,772) (1,234,946) (74,551)
(27,738) 2,374,465 2,346,727
(7,374) (2,094,109) (2,101,483)
11,035,579
10,647,072
Members’ deposits received Members’ shares withdrawn Members’ deposits withdrawn Net cash flows from financing activities Other Other receipts Decrease/(Increase) in prepayments (Increase)/Decrease in other liabilities
651,850 (8,772,665) (624,043) 2,290,721
598,178 (9,479,246) (551,487) 1,214,517
26,126 (4,323) (22,970) (1,167) 10,670,233
31,589 (6,946) (91,233) (66,590) 5,960,123
Closing cash and cash equivalents
6
On behalf of the Credit Union :- 30 October 2019 Mary Harrahill Member of Board of Directors
Myles Davoren Alan Whelan Member of the Acting Manager Board Oversight Committee
24
An Post Employees’ Credit Union Limited Annual Report 2019
Notes to the Financial Statements for the year ended 30 September 2019 1. General Information An Post Employees’ Credit Union Limited is a credit union incorporated under the Credit Union Act 1997 (as amended) in the Republic of Ireland. An Post Employees’ Credit Union Limited is registered with the Registrar of Credit Unions and is regulated by the Central Bank of Ireland. The financial statements have been presented in Euro (€) which is also the functional currency of the credit union.
2. Use of Estimates and Judgements The preparation of financial statements requires the use of certain accounting estimates. It also requires the Directors to exercise judgement in applying the Credit Union’s accounting policies. The areas requiring a higher degree of judgement, or complexity, and areas where assumptions or estimates are most significant to the financial statements are disclosed below: BAD DEBTS/IMPAIRMENT LOSSES ON LOANS TO MEMBERS The Credit Union’s accounting policy for impairment of financial assets is set out in accounting policies on pages 13 - 19 of the financial statements. 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. Credit risk is identified, assessed and measured through the use of rating and scoring tools with emphasis on weeks in arrears and other observable credit risk metrics as identified by the Credit Union. The ratings influence the management of individual loans. The credit rating triggers the impairment assessment and if relevant the raising of specific provisions on individual loans where there is doubt about their recoverability. Loan loss provisioning is monitored by the Credit Union, and the Credit Union assesses and approves its provisions and provision adequacy on a quarterly basis. Key assumptions underpinning the Credit Union’s estimates of collective provisions for loans with similar credit risk characteristics, and, Incurred But Not Reported provisions (“IBNR”) are based on the historical experiences of the Credit Union allied to the Credit Union’s judgement of relevant conditions in the wider technological, market, economic or legal environment in which the Credit Union currently operates which impact on current lending activity and loan underwriting. If a loan is impaired, the impairment loss is the difference between the carrying amount of the loan and the present value of the expected cash flows discounted at the asset’s original effective interest rate taking account of pledged shares and other security as appropriate. Assumptions are back tested with the benefit of experience. After a period of time, when it is concluded that there is no real prospect of recovery of loans/part of loans which have been subjected to a specific provision, the Credit Union writes off that amount of the loan deemed irrecoverable against the specific provision held against the loan.
25
Notes to the Financial Statements for the year ended 30 September 2019 (Continued) IMPAIRMENT OF BUILDINGS The Credit Union’s accounting policy on tangible fixed assets is set out in accounting policies on pages 13 - 19 of the financial statements. As described in the accounting policy the Credit Union is required to assess at each reporting date whether there is any indication that an asset may be impaired. If an impairment is identified, the Credit Union is required to estimate the recoverable amount of the asset. If there is no indication of impairment, it is not necessary to estimate the recoverable amount. The recoverable amount of an asset is the higher of its fair value less costs associated with sale and its value in use. In assessing whether the Credit Union’s property is impaired, its current market valuation is considered as being equivalent to its fair value. Where the property’s market valuation is identified as being below its carrying value, this amounts to a key indicator of the existence of impairment and the Credit Union is therefore required to undertake a value in use calculation on its property assets. Value in use is the present value of the future cash flows expected to be derived from the Credit Union’s property. This present value calculation involves the undertaking of the following steps: (a) Estimating the future cash inflows and outflows to be derived from continuing use of property and from its ultimate disposal, where appropriate; and (b) Applying the appropriate discount factor to those future cashflows. The future cash inflows and outflows required for the value in use calculation are taken from financial projections prepared by management and approved by the board of directors. The discount factor applied in the value in use calculation is an assessment of the time value of money applicable to the Credit Union and will take account of previous guidance received from the Central Bank.
3. Employees Number of employees The average monthly numbers of employees during the year were:
Tellers/Admin
2019
2018
Number 8 8
Number 7 7
2019 €
2018 €
316,138 31,783 347,921
346,704 37,132 383,836
Employment costs
Wages and salaries Pension costs
26
An Post Employees’ Credit Union Limited Annual Report 2019
Notes to the Financial Statements for the year ended 30 September 2019 (Continued) 3.1.Key Management Personnel Compensation The Directors of An Post Employees’ Credit Union Limited are all unpaid volunteers. The key management team for An Post Employees’ Credit Union Limited would include the Directors, the credit union manager and other senior staff. The number of key management for the financial year to 30 September 2019 amount to 16 (2018 - 15). 2019 Short term employee benefits paid to key management Payments to defined contribution pension schemes
2018
€
€
199,606 27,796 227,402
211,115 34,288 245,403
4. Pension Costs Pension costs amounted to €31,783 (2018 - €37,132). Included in the charge for the 30.09.2016 financial year was an amount of €25,585 which relates to the recognition of commitments made by the credit union to fund the deficit in the ILCU defined benefit scheme until March 2019. An amount of €4,411 (2018 - €10,587) of this accrual has been released to the Income and Expenditure account in the financial year.
5. Analysis of Investment Income 2019 Received during the year Receivable within 12 months Other investment income
2018
€
€
164,904 137,270 6,600 308,774
120,794 142,229 6,600 269,623
2019
2018
€
€
5,353,073 5,317,160 10,670,233
1,715,379 4,244,744 5,960,123
6. Cash & Cash Equivalents
Cash and bank balances Short term deposits
Short term deposits are deposits with maturity of less than or equal to three months. All other deposits are included in Investments in the Balance sheet and disclosed in note 7. Royal Bank of Scotland has provided the credit union with an overdraft facility and holds a legal charge over underlying assets amounting to €300,000.
27
Notes to the Financial Statements for the year ended 30 September 2019 (Continued) 7. Investments
Investments are classified as follows: Fixed term deposits maturing after 3 months Deposit Protection Account Investment bonds
2019
2018
€
€
16,395,338 284,654 7,857,952 24,537,944
20,847,564 265,483 5,799,362 26,912,409
The cumulative market valuation of the investment bonds held by the credit union at 30 September 2019 amounts to €8,017,132. The Directors have confirmed that they are satisfied that all fixed term investments will be held to maturity and therefore the recognition of an impairment is not required. The categories of counterparties with whom the investments are held is as follows: -
Credit Ratings 2019 A1 Aa3 A2 A3 Ba1 Baa1 Baa2 Baa3 Ba3
2018
€
€
6,475,000 3,255,264 5,718,154 4,369,225 420,000 1,000,301 3,300,000 24,537,944
6,400,000 1,000,000 3,082,000 265,483 2,357,444 3,162,506 7,537,198 1,057,778 2,050,000 26,912,409
The credit union’s investments portfolio is categorised above utilising Moody’s credit rating scale.
28
An Post Employees’ Credit Union Limited Annual Report 2019
Notes to the Financial Statements for the year ended 30 September 2019 (Continued) 8. Loans to Members 2019
2018
€
€
20,020,177 10,306,200
19,502,577 10,223,840
Loans repaid Loans written off Gross Loan Balance at 30 September
(9,771,695) (62,993) 20,491,689
(9,656,566) (49,674) 20,020,177
Impairment allowances Individual loans Groups of loans Loan provision Net loans as at 30 September
(623,131) (256,310) (879,441) 19,612,248
(644,882) (244,993) (889,875) 19,130,302
Opening Balance at 1 October Loans granted
9. Analysis of Gross Loans Outstanding 2019
Less than one year Greater than 1 year and less than 3 years Greater than 3 years and less than 5 years Greater than 5 years and less than 10 years Greater than 10 years and less than 25 years Greater than 25 years Total Gross Loans
2018
No.
€
No.
€
607 1,081 839 41 1 2,569
1,456,097 8,024,632 9,930,525 1,058,312 22,123 20,491,689
575 1,206 696 25 2,502
1,288,065 8,968,344 9,233,833 529,935 20,020,177
29
Notes to the Financial Statements for the year ended 30 September 2019 (Continued) 10. Credit Risk Disclosures An Post Employees’ Credit Union Limited does not offer mortgages and as a result all loans to members are unsecured, except that there are restrictions on the extent to which borrowers may withdraw their savings whilst loans are outstanding. There are maximum amounts set down by the Central Bank in terms of what amount a member can borrow from the Credit Union. The carrying amount of the loans to members represents the Credit Union’s maximum exposure to credit risk. The following table 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. 2019 Gross Loans Not Impaired Gross Loans Impaired Up to 9 weeks past due Between 10 and 18 weeks past due Between 19 and 26 weeks past due Between 27 and 39 weeks past due Between 40 and 52 weeks past due 53 or more weeks past due Total Gross Loans Impairment Allowance Individual loans Collectively assessed loans Loan provision Net loans as at 30 September
2018
€
%
€
%
16,637,528
81.19%
16,891,109
84.37%
3,256,268 106,918 72,238 60,107 77,090 281,540 3,854,161 20,491,689
15.89% 0.52% 0.35% 0.29% 0.38% 1.37% 18.81% 100.00%
2,511,258 222,273 97,242 75,268 46,198 176,829 3,129,068 20,020,177
12.54% 1.11% 0.49% 0.38% 0.23% 0.88% 15.63% 100.00%
(623,131) (256,310) (879,441)
(644,882) (244,993) (889,875)
19,612,248
19,130,302
Factors that are considered in determining whether loans are impaired are discussed in Note 2, dealing with estimates.
30
An Post Employees’ Credit Union Limited Annual Report 2019
Notes to the Financial Statements for the year ended 30 September 2019 (Continued) 11. Loan Provision Account for Impairment Losses 2019 Opening balance 1 October Net movement during the year Decrease as a result of loan write offs previously provided for Closing provision balance 30 September
2018
€
€
889,875 21,520 (31,954) 879,441
1,007,650 (68,101) (49,674) 889,875
12. Tangible Fixed Assets €
Computer equipment €
Cost At 1 October 2018 Additions
1,350,684 -
152,630 25,076
29,620 2,662
24,510 -
1,557,444 27,738
Disposals At 30 September 2019
1,350,684
(17,832) 159,874
32,282
24,510
(17,832) 1,567,350
Depreciation At 1 October 2018 On disposals Charge for the year At 30 September 2019
326,948 27,816 354,764
140,556 (17,832) 13,813 136,537
23,326 4,150 27,476
24,510 24,510
515,340 (17,832) 45,779 543,287
Net book values At 30 September 2019 At 30 September 2018
995,920 1,023,736
23,337 12,074
4,806 6,294
-
1,024,063 1,042,104
Premises
Office equipment €
Fixtures & fittings €
Total €
An independent valuation of the credit union’s premises at 12/14 The Anchorage, Charlotte Quay, Ringsend Road, Dublin 4 was carried out by Colliers International Valuation & Advisory Services, in July 2018. This report placed a valuation of €1,030,000 on the credit union’s interest in the premises and as this is in excess of its’ carrying value at 30 September 2019 the directors have confirmed that they are satisfied that no indication of impairment exists.
31
Notes to the Financial Statements for the year ended 30 September 2019 (Continued) 13. Prepayments and Accrued Income
Prepayments Accrued investment income Member Loan interest receivable
2019 € 74,346 144,842 20,523 239,711
2018 € 70,023 187,829 18,111 275,963
14. Members’ Shares
Opening Balance at 1 October Shares paid in Shares withdrawn Other movements Closing Balance at 30 September
2019 € 42,417,222 11,035,579 (8,772,665) (2,009) 44,678,127
2018 € 41,249,889 10,647,072 (9,479,246) (493) 42,417,222
Members’ shares are repayable on demand except for shares attached to loans. The breakdown of the shares between attached and unattached is as follows: Unattached Shares Attached Shares
€ 34,926,860 9,751,267 44,678,127
€ 32,969,409 9,447,813 42,417,222
32
An Post Employees’ Credit Union Limited Annual Report 2019
Notes to the Financial Statements for the year ended 30 September 2019 (Continued) 15. Members’ Deposits
Opening Balance at 1 October Deposits paid in Deposits withdrawn Closing Balance at 30 September Members’ deposit accounts have the following maturity Less than 1 year One to two years Two to five years More than five years Total Term Deposits
2019 € 350,998 651,850 (624,043) 378,805
2018 € 304,307 598,178 (551,487) 350,998
378,805 378,805
350,998 350,998
2019 € 48,283 48,283
2018 € 66,825 66,825
16. Other Liabilities and Charges
Accruals
17. Additional Financial Instruments Disclosures 1. FINANCIAL RISK MANAGEMENT An Post Employees’ Credit Union Limited manages its members’ shares and loans to members so that it earns income from the margin between interest receivable and interest payable. The main financial risks arising from the Credit Union’s activities are credit risk, liquidity risk and interest rate risk. The Board 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 An Post Employees’ Credit Union Limited, resulting in financial loss to the Credit Union. In order to manage this risk the Board approves the Credit Union’s lending policy, and all changes to it. All loan applications are assessed with reference to the lending policy in force at the time. Subsequently loans are regularly reviewed for any factors that may indicate that the likelihood of repayment has changed.
33
Notes to the Financial Statements for the year ended 30 September 2019 (Continued) Liquidity risk: The Credit Union’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 Credit Union adheres on an ongoing basis to the minimum liquidity ratio and minimum short term liquidity ratio as set out in the Credit Union Act 1997 (Regulatory Requirements) Regulations 2016. Market risk: Market risk is generally comprised of interest rate risk, currency risk and other price risk. An Post Employees’ Credit Union Limited conducts all its transactions in Euro and does not deal in derivatives or commodity markets. Therefore, the Credit Union is not exposed to any form of currency risk or other price risk. Interest rate risk: The Credit Union’s main interest rate risk arises from differences between the interest rate exposures on the receivables and payables that form an integral part of a Credit Union’s operations. The Credit Union considers rates of interest receivable on investments and members’ loans when deciding on the dividend rate payable on shares and on any loan interest rebate. Capital Risk - The Credit Union maintains sufficient reserves to buffer against losses on members’ loans and investments. The current Regulatory Reserve is in excess of the minimum level set down by the Central Bank of Ireland, and stands at 11.00% of the total assets of the Credit Union at the balance sheet date. 2. INTEREST RATE RISK DISCLOSURES The following table shows the average interest rates applicable to relevant financial assets and financial liabilities: 2019
Amount
€
2019 Average Interest Rate
€
2018 Average Interest Rate
20,491,689
8.61%
20,020,177
8.67%
Amount
2018
Financial Assets Loans to members
The credit union pay interest on members’ deposits at the rate of 0.10% per annum, payable in November 2019. 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. 3. LIQUIDITY RISK DISCLOSURES All of the financial liabilities of the Credit Union are repayable on demand except for some members’ shares attached to loans and members’ deposits which have a fixed maturity date. 4. FAIR VALUE OF FINANCIAL INSTRUMENTS An Post Employees’ Credit Union Limited does not hold any financial instruments at fair value.
34
An Post Employees’ Credit Union Limited Annual Report 2019
Notes to the Financial Statements for the year ended 30 September 2019 (Continued) 18. Total Reserves Dividend and Appropriation Transfers Balance loan interest of current year between 01/10/18 rebate paid surplus reserves € € € € 5,863,773 305,489 528,513 19,016 -
Total Regulatory Reserve Operational Risk Reserve Other Realised Reserves Undistributed Surplus 1,456,283 General reserve 2,080,831 Dividend reserve 420,000 Social and cultural reserve 19,355 Total realised reserves 10,368,755 Unrealised Reserves Investment income reserve 22,000 Special reserve 7,062 Total unrealised reserves 29,062 Total reserves 10,397,817
(307,383)
Balance 30/09/19 € 6,169,262 547,529
(307,383)
455,825 16,000 796,330
- 1,604,725 - 2,080,831 420,000 (10,850) 24,505 (10,850) 10,846,852
(307,383)
6,600 6,600 802,930
28,600 2,009 9,071 2,009 37,671 (8,841) 10,884,523
The Credit Union is required to maintain a Regulatory Reserve that support the credit union’s operations, provide a base for future growth and protect against the risk of unforeseen losses. The credit union needs to maintain sufficient reserves to ensure continuity and to protect members’ savings. The Central Bank expects that credit unions whose total regulatory reserves are currently in excess of 10 per cent of total assets will continue to maintain reserves at existing levels on the basis that these continue to reflect the board of directors’ assessment of the appropriate level of reserves for the credit union. The balance on the regulatory reserve represents 11.00% of total assets as at 30 September 2019 (11.00% as at 30 September 2018). The Board of Directors and the management team have undertaken a review of the credit union’s risk register and risk management procedures in order to determine the adequacy of the operational risk reserve. This review consisted of a consideration of each operational risk area, the various control procedures, outsourcing agreements and insurances in place to mitigate risk and the resultant remaining residual risk. An estimated costing to the credit union has been attached to each identified area of residual risk in computing the required operational risk reserve. The balance on the operational risk reserve represents 0.98% of total assets as at 30 September 2019.
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Notes to the Financial Statements for the year ended 30 September 2019 (Continued) The special reserve represents the share balances of members no longer active in the credit union. They are held in special reserve until such time as they are claimed or can be legally taken to general reserve. The balance on the Investment Income Reserve represents investment income not receivable within 12 months of the financial year end. This reserve is not available for distribution. When this investment income is received or becomes receivable within 12 months, the relevant amount will be transferred back within the Income and Expenditure Account and will then become available for distribution. The balance on the Investment Income Reserve represents investment income not receivable within 12 months of the financial year end. This reserve is not available for distribution. When this investment income is received or becomes receivable within 12 months, the relevant amount will be transferred back within the Income and Expenditure Account and will then become available for distribution.
19. Dividends, Loan Interest Rebate and Other Returns to Members The directors recommend the following distributions:
Dividend on shares Loan interest rebate
2019 Rate % 0.15% 12.00%
€ 65,490 204,383
2018 Rate % 0.25% 12.00%
€ 103,984 201,839
In accordance with FRS102 “Events after the End of the Reporting Period”, dividends and returns to members are accounted for in the financial statements after they are approved by the members in general meeting. The returns to members paid in the current and prior year periods were as follows:
Dividend paid during the year Dividend rate Loan interest rebate paid during the year Loan interest rebate rate
2019 € 104,578 0.25% 202,805 12.00%
2018 € 100,230 0.50% 202,772 10.00%
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An Post Employees’ Credit Union Limited Annual Report 2019
Notes to the Financial Statements for the year ended 30 September 2019 (Continued) 20. Rate of Interest Charged on Members’ Loans The credit union currently charge interest on outstanding loan balances to members, as follows: Standard Rate 8.90% Educational/Welcome loans 5.99% Secured loan 4.99%
21. Rate of Interest Paid on Members’ Deposits The credit union pay interest on members’ deposits at the rate of 0.10% per annum, payable in November 2019.
22. Post Balance Sheet Events There are no material events after the Balance Sheet date to disclose.
23. Contingent Liabilities All capital invested in fixed term deposit products, accounts in authorised credit institutions and investment bonds are guaranteed only if held to maturity. In the unlikely event of early encashment there may exist early settlement penalties or capital losses. The directors have confirmed that all such products are to be held until their respective maturity dates. The Credit Union participates in the Irish League of Credit Unions Republic of Ireland Pension Scheme (the Scheme). As detailed in the accounting policies, this is accounted for as if it were a defined contribution scheme, as the Credit Union is unable to identify its share of the underlying assets or liabilities. In the unlikely event of the Scheme closing with a shortfall in assets, the Credit Union may be required to provide additional funding.
24. Capital Commitments There were no capital commitments either contracted for or approved by the Board at the year end.
25. 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).
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Notes to the Financial Statements for the year ended 30 September 2019 (Continued) 26. Related Party Transactions The Credit Union has identified the following transactions which are required to be disclosed under the terms of FRS102 ‘Related Party Disclosures’. The following details relate to officers and related party accounts with the credit union. Related parties include the board of directors and the management team of the Credit Union, their family members or any business in which the director or management team had a significant shareholding. No. of loans Total savings held by related parties Total loans outstanding by related parties % of gross loan book Loans advanced to related parties during the year Total provisions for loan outstanding to related parties at year end Total provision charge during the year for loans outstanding to related parties
8 7
2019
2018
€ 110,006 118,790 0.58% 59,400 -
€ 146,792 120,666 0.60%
27. Authorisation and Approval of Financial Statements The board of directors authorised and approved these financial statements for issue on 30 October 2019.
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An Post Employees’ Credit Union Limited Annual Report 2019
Additional Information for the year ended 30 September 2019 (not forming part of the statutory audited Financial Statements) Schedule 1. Interest on Loans
Loan interest received Loan interest receivable Total per Income and Expenditure Account
2019 € 1,663,208 2,412 1,665,620
2018 € 1,696,583 3,523 1,700,106
2019 € 308,774 308,774
2018 € 269,623 269,623
2019 € 390 23,919 1,500 317 26,126
2018 € 408 29,518 1,500 163 31,589
2019 €
2018 €
-
-
Schedule 2. Other Interest Income and Similar Income
Investment income Total per Income and Expenditure Account
Schedule 3. Other Income
Entrance fees E.C.C.U. rebate Car draw commission Other income Total per Income and Expenditure Account
Schedule 4. Other Gains
Total per Income and Expenditure Account
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Additional Information for the year ended 30 September 2019 (not forming part of the statutory audited Financial Statements) Schedule 5. Other Management Expenses Staff pension costs Training costs E.C.C.U. Insurance Death benefit insurance SPS contribution Rates General insurance Light, Heat & Cleaning Repairs and maintenance Security Printing and stationery Promotion and advertising Postage and telephone Computer costs Amortisation of bond premiums Convention and seminar expenses Travelling and subsistence Entertainment costs AGM expenses Legal and professional Credit reference agencies 50th Anniversary expenses Audit Bank charges General expenses Affiliation fees Regulatory levy Central Bank Resolution Fund Deposit Protection Scheme Total per Income and Expenditure Account
Schedule 6. Other Losses Total per Income and Expenditure Account
2019
2018
€
€
31,783 7,909 225,860 122,275 4,865 9,963 17,854 25,741 12,601 1,570 48,754 6,706 52,676 67,370 31,819 912 14,689 7,761 5,267 76,481 10,343 16,733 8,967 15,660 33,035 7,649 20,249 26,843 912,335
37,132 7,288 212,324 108,899 4,566 9,975 17,363 25,946 13,525 1,617 56,265 8,259 61,539 60,562 7,176 2,946 16,812 7,153 3,207 37,792 10,577 31,953 15,537 11,415 16,610 33,090 10,743 26,014 31,957 888,242
2019 €
2018 €
-
-
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An Post Employees’ Credit Union Limited Annual Report 2019
Car Draw Account for the year ended 30 September 2019 (not forming part of the statutory audited Financial Statements) 2019 € Opening Balance 1 Oct 2018 Draw subscriptions received Car prizes won (7) Cash prizes won (90) Closing balance 30 Sept 2019
83,628 255,833 -130,000 -115,000 94,461
Notes: Members of the car draw scheme pay the equivalent of €1.27 per week as a draw subscription. Following recent Central Bank guidelines, the credit union plans to reduce the balance on the car draw account to as close to nil as possible after the bumper Christmas car draw each December. Membership of the car draw scheme and the awarding of prizes are both subject to the Rules of the car draw scheme, a copy of which is available on request.
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Finance Report 2019 I am pleased to present the annual accounts for the year ended 30 September 2019, a very steady year in financial terms. The credit union has two main sources of income, namely interest on members’ loans and investment income. Both are broadly similar to last year. Expenditure is also similar to last year. Looking in more detail, the income for the year remained strong at €2.0m. Loan interest income has remained steady despite an increase in the loan book because more members are availing of the special, low interest rate for loans within shares and the welcome loan. Achieving a return on investments continues to be a major challenge, particularly with credit unions largely dependent on cash and bonds as investment outlets.
€2.0m+ TOTAL INCOME
On the expenditure side, the total expenditure this year was €1.2m, slightly up on the €1.1m in 2018. This relates mainly to increases in member insurance costs, computer costs and professional fees. Funds recovered from previously charged-off loans have remained at an impressive figure of €89k, the extra €40k relates to the change in accounting for interest received on loans in long term arrears. I want to pay tribute to the work of the Credit Control Committee in this regard. This is the fourth year in a row where excess provisions for bad and doubtful debts have been released as part of the year-end accounts. As described in the report of the Credit Control Committee, quarterly loan book reviews are conducted to ensure that adequate provisions are in place. In recent years, however, the improving economy has meant that less provisions are needed. Looking at the credit union income and expenditure together leaves a surplus of €802,930.
SURPLUS OF
€802,930
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An Post Employees’ Credit Union Limited Annual Report 2019
12%
Loan interest rebate 2019
As outlined by the Chairperson in his report, the annual dividend that the Board is recommending this year is 0.15% while the recommended interest rebate is 12%. The balance of the surplus will be retained as reserves. The Board of the credit union is unable to increase the dividend at this point because of the possibility of attracting too much savings into the credit union. In this regard, it is necessary to leave the savings cap of €40,000 in place but return any funds to members who hold in excess of €40,000 in shares. A number of credit unions appear to have imposed similar caps at this point in order to maintain as much of an equilibrium between loans and savings at the credit union as possible.
Looking more closely at the balance sheet, we can see that the loan book has increased by 2.4% while member savings have increased by 5.4%. Total assets have increased by 5.2% to €56.1m reflecting the increased member savings and reserves on the liability side of the balance sheet. The balance sheet remains in a very healthy position, with reserves as a portion of assets standing strong at 18.9%, excluding the proposed dividend and rebate.
Savings Cap of €40,000
Finally, I would like to thank the Board of Directors, the Audit & Risk Committee, the previous manager, Paul Ryan and my colleagues on the staff for their assistance and co-operation. I would also like to thank my colleagues Karina and Keith, the team at external auditors FMB, particularly Partner Patrick Loughnane and his colleagues Brian Burk and Eden Burke, and the staff at internal auditors Crowleys DFK, particularly Partner Vincent Teo and Director Fiona O’Sullivan. Alan Whelan Acting Manager
Total assets
5.2%
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Report of the Board Oversight Committee 2019 The role of the Committee is to monitor governance standards at the credit union and to report back to the members in this regard. This year Danny Hoare remained on as Chairman, Myles Davoren took over the role of Secretary from Dan Joyce and Brian Martin replaced Charlie Sheehan who was elected to the Board at the last AGM. The other member of the committee is Jean Hamilton. At least one member of the committee attended each monthly / special meeting of the Board during the year. In accordance with the relevant legislation, we conducted four review meetings with the Board and after each meeting we provided the Board with a written report of our assessment of its performance. Members of the committee attended the Data Protection / Anti Money Laundering training course as well as other relevant training courses during the year. We also attended meetings of the various committees i.e. Credit, Credit Control, Officers, Liquidity & Investment, Audit & Risk, Nominations, Promotion & Development and IT. A member of the Board Oversight Committee together with a member of the Board also attended each of the bi monthly car draws as a witness and the Committee also witnessed the education prize draw. The Board Oversight Committee meets once a month where we review the meetings attended and arrange for our attendance at future planned meetings of the various committees and relevant training courses. It is the opinion of the Board Oversight Committee that the Board of Directors have been compliant in their legal and regulatory requirements and have acted in accordance with part 1V and 1VA of the Credit Union Act 1997 (as amended) and other financial services legislation. Finally we would like to thank the Board, management and staff of the credit union for their cooperation and assistance throughout the year. Danny Hoare Chairman, Board Oversight Committee
44
An Post Employees’ Credit Union Limited Annual Report 2019
Report of the Credit Committee 2019 I am pleased to report on the activities of the Credit Committee during the year. The role of the Credit Committee is to oversee the lending process and to ensure that all credit union lending complies with the relevant legislation and regulations, with the credit union’s own lending policy and with good practice generally. Ensuring that there is an appropriate lending culture within the credit union is a priority, particularly in relation to respect and fairness among members. During the year, 2,221 loans were issued, a slightly higher number than the previous year. The total value of the loans issued increased to €10.3M from €10.2M in 2018. At the September year-end, the total loan book is 2.4% higher than last year. 73 loan applications were refused, but refusals were kept to a minimum. The credit union launched a “Welcome Loan” for first time borrowers in January and a “Special Education Loan” in July. The rate for these loans is 5.99% (typical APR 6.1%). The “loan within shares” at a special, low rate of 4.99% (typical APR 5.1%) continues to be very popular. It allows members to keep their savings and insurance benefits in place while borrowing at a lower rate. Members often find that it is easier to repay a small loan than to rebuild savings. As usual, it is worth mentioning that the credit union has plenty of funds for lending to members. You can borrow whatever you need and can afford to repay, taking account of your other borrowings. Key features of a credit union loan, such as loan protection insurance at no direct cost to the member and the ability to clear all or part of the loan without penalty, remain in place. Very significantly, the credit union has a long-standing pattern of paying a loan interest rebate at year-end (a 12% rebate is proposed this year). The rebate and free loan protection insurance reduces the real cost of your credit union loan very significantly. We use the services of the Irish Credit Bureau and the new Central Credit Register (recently established by the Central Bank) in assessing loan applications and find them very useful. Finally, I would like to thank my fellow committee members Frank O’Reilly, Paul Callaghan, Peter McCarthy, Paul Emmet, Kevin Doherty, Frank Hession and Paddy Doody for their diligence in serving the members. I would also like to thank the staff, particularly lead loans officers Adrienne Togher and Keith Flood, ably assisted by Sarah Comerford, Sarah Walsh and Aaron Bassett. Tomás Ó Maonaile On behalf of the Credit Committee
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Report of the Credit Control Committee 2019 The function of the Credit Control Committee is to monitor the loan portfolio and to ensure that loans to members are repaid in accordance with the terms of the loan agreements entered into. The committee must ensure that a robust process is in place to follow-up the relatively small number of cases where problems emerge. The committee tries to minimise loan arrears by engaging early with members. The aim is to protect members funds and to limit the individual damage that may be done to a member’s credit rating with both the Central Credit Register and the Irish Credit Bureau. Nine loans have been charged-off this year, a total of €62,993. This is an increase of €13,322 on last year. Recoveries of previously charged-off loans amounted to €89,230, an increase of €19,972 over last year. We continue to use Cabot Financial and Pierse & Fitzgibbon Solicitors to help us to recover certain previously charged-off loans where the person refuses to engage. Similarly, there are a number of previously charged-off loans where people have moved house and it is difficult to contact them. To this end, Aserve, a tracing agency, is used to help the committee to locate them. The committee meets every week to monitor any loans in arrears and to take whatever actions are needed. We also meet the Acting Manager Alan Whelan on a regular basis to review the loan portfolio in greater detail and to ensure that our accounting provision against bad and doubtful debts is adequate and is compatible with accounting standards. At 30 September 2019, this provision totalled €879,441 having released excess provisions during the year of €10,434 that were no longer needed. I would appeal to members who find themselves in financial difficulties to contact the credit union as soon as possible so that we can help to resolve matters. We will always try to be understanding and to work with the member to come to a fair agreement within which they can manage according to their means. Finally, I would like to thank my colleagues on the Credit Control Committee, Brian McKenna, Jimmy Doyle and Charlie Sheehan for their conscientious work and my thanks also to the staff for their help, co-operation and support during the year. Christopher Fitzgerald Chairman, Credit Control Committee
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An Post Employees’ Credit Union Limited Annual Report 2019
Report of the Membership Officer 2019 I am very pleased to present the Membership Officer’s report for 2019. The role of the Membership Officer is to check and approve all new member applications, to issue a welcome pack to new members and to report to the Board every month. At 30 September 2019, the membership has grown to 6,739 compared to 6,471 last year, an increase of 268. This is a record level of membership and a good outcome. As the Chairperson mentions in his report, Noel Cocoman visits workplaces at An Post regularly and these visits have been the driving force behind the increased membership numbers over the past number of years. Apart from the mail centers and delivery offices, Noel has visited Post Insurance, BillPost Kilrush, Letterkenny, Galway, Kerry and many post offices during the year. In total, Noel made 30 visits this year. The people eligible to join are those who have derived their livelihoods from the postal service and their families, namely employees, former employees and pensioners of An Post and any company in which An Post has a shareholding; Postmasters and their post office assistants; and in respect of each of the foregoing, their respective spouses, parents, siblings, children and grandchildren regardless of their place of residence. This helps the credit union to be as inclusive as possible while leaving An Post as the “glue” that binds us together as a group. It is worth remembering that members who take a package, retire from or leave An Post remain within the “common bond” of the credit union. They can continue as members, paying electronically through the bank or using the BillPay card at any Post Office, and remain eligible for the free insurance benefits currently provided by the credit union. If members subsequently start to draw down a pension from An Post, the pension deduction facility is as efficient as the payroll facility. Membership of An Post Employees’ Credit Union makes more sense than ever. With payroll deductions, unbeatable loans including the loan within shares and a welcome loan for first time borrowers, access to useful savings accounts (including the Xmas deposit account), electronic payments, generous insurance cover (at no direct cost to the member), education prize draws and a popular car draw, membership of this credit union is a great benefit for those associated in any way with An Post. As I reach the end of my report, I wish to give a big thank you to Sarah Comerford and Siobhan Duffin who undertake much of the work in the office in relation to new members. Michael Farrell Membership Officer
Number of Members 2019
6,739
Increase
268
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Other Credit Union Committees 2019 Officers’ Committee Chaired by credit union Chairman Tony Harmon, this committee acts as a sounding board for management and prepares for the monthly Board meetings to help make them more effective. This committee also assists in relation to policy development, HR issues and complaints. Other members are Paul Dolan, Colum Brennan and Mary Harrahill. During the year, the Officers’ Committee met in advance of the Board meeting each month.
Liquidity & Investments Committee Chaired by Martin Ryan, this committee oversees the credit union’s liquidity and its portfolio of cash and investments, some €31.9M at year-end. Other members are Paul Dolan, Tony Cashell, Peter McCarthy and Gerry Ryan. The committee has a very challenging role, given the difficulty in achieving a reasonable return from bank deposits or government/ bank bonds, effectively the only means by which credit unions are allowed to invest. The committee is assisted by Goodbody Stockbrokers.
Audit & Risk Committee This committee always has a busy agenda because of the weight of audit, regulatory, risk and compliance requirements on credit unions. Chaired by Teresa Kavanagh, the other committee members are Gerry Ryan, Tómas Ó’Maonaile and Charlie Sheehan. The committee supports the Risk Officer, John Grehan, in relation to the risk register/ testing of controls and managing the relationships with the external auditor and the internal auditor are priorities.
Nomination Committee Chaired by Colum Brennan, this committee is charged with ensuring that there are sufficient candidates for elections. The role of the committee has expanded significantly in recent years and now includes reporting on the composition of the Board, attracting new volunteers, preparing a succession plan, preparing a training needs analysis/ training plan and managing the Central Bank fitness and probity requirements. Other committee members this year were Martin Ryan and Mary Harrahill. The Committee meets as often as necessary, often once a month.
Promotions & Development Committee The P&D Committee is concerned with developing member services, communicating with members regarding any new developments and assisting the work of Development Officer Noel Cocoman. The committee also co-ordinates the network of representatives around the country and is involved in planning events such as the AGM and the regular car draws. The chairman is Tony Harmon and committee members are Christine Mitchell, Sharon Nannery, Joe Bowden, Eamonn Walsh, Donal Mullane, Pauline Fowler-Warren and Noel.
IT Committee Chaired by Margaret Fitzpatrick, the IT Committee monitors the credit union’s computer systems and, in particular, any proposed developments. Other relevant areas include IT contracts, data security issues, penetration testing, disaster recovery planning, data and telephone communications. Other committee members are John Donohoe, Brian McKenna and Alan Whelan.
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An Post Employees’ Credit Union Limited Annual Report 2019
Tax and your credit union savings DIRT and your Dividend On Shares All 2019 dividends on credit union shares are subject to DIRT at the standard rate, regardless of whether they are designated as “special” shares or “regular” shares. The current rate of DIRT is 35.0% This also applies to childrens’ accounts.
DIRT and your Xmas Deposit Account The XMAS savings account is a deposit account rather than a share account. No dividend is payable on these accounts but deposit interest (current rate .1%) is payable on 1 November each year. All deposit interest is subject to DIRT at 35.0%
DIRT for Over 65s and Permanently Incapacitated People If you or your spouse is aged over 65 during the year and your total income during the year does not exceed certain levels, currently €36,000 (married combined income) or €18,000 (single/ widowed), you can claim exemption from the deduction of DIRT. You must complete a declaration form (DE1) and give it to the credit union – forms are available from the credit union office or from revenue.ie. Remember that your total income includes state pensions, work pensions, deposit interest etc. If your total income now exceeds the specified amount, you should revoke any previous declarations sent to the credit union. Permanently incapacitated people may also claim the exemption if income does not exceed similar levels but the exemption and the forms (DE2) are handled by the local Revenue office.
DIRT Reporting Requirements Credit unions must report to the Revenue any dividend over €300 paid to a member during the previous year. Details of new accounts must also be reported.
Taxation of Interest Rebate There is no tax due on your loan interest rebate. In effect, this is a reduction in the loan interest charged by the credit union during the year.
Tax Advice and the credit union The credit union is unable to offer tax advice to its members. The above information is for guidance and describes the tax treatment of members’ savings as understood by the credit union at the date of publishing (November 2019).
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In Memoriam The Board of Directors offers its deepest sympathy to the families and friends of the following members who died during the year. James Bolger Michael Savage Patrick J Moriarty James Walsh John French Philomena Hession Alice West Joan McElhinney Edward Whelan Gerald Keating John Denton John O’Sullivan John Cullen Rose Nibbs Patrick Ashton Thomas Ruddock Laurence Flanagan
Moira Dempsey Francis Noel Murphy Paul Fanning Gerald Maxwell Gerard Hammond Michael Whelan Rose Ann Knowles Catherine Mullane Lucey Brian Moran David Hayden Angela Whelan Patrick Vincent Conlan John Coyle Mark O’Hanlon William C Hogan Michael Delaney Brian Watters
James Molloy Kathleen Mullane Francis Brogan Tom Heffron Francis Meaney Patrick Joseph Barden Kenneth O’Brien Joseph McGrath Nicholas Quinn Patrick Roche Paddy Doherty Mary Daly Michael Mahon Pierce Lennon Darren Sower Declan Mooney
Car Draw & Cash Prizes Some day this could be you!! Congratulations to all the winners of cars and cash prizes over the past year.
Christy Fitzgerald winner of a Ford Fiesta
David Sheehan of Longford DSU winner of a Ford Fiesta
Stephen Hogan from Ringsend winner of a Ford Fiesta
Bernadette Flynn from Sligo winner of a Ford Fiesta
Christmas Prize Draw Winner Shannon Geoghegan with, from left, Eamonn Walsh (CU rep at Dublin Parcel Hub) and Noel Cocoman, CU Development Officer
Education Prize Draw Winner
Sam Duffy, from Kells DSU, 1 of 5 winners in the 2019 Draw
“Since winning the education prize in 2016 I graduated from my degree with honours. The prize was put towards getting some study aids including a tablet. Since graduating I have been working with DHL Global Forwarding in a role I started in as an intern the year I won the education prize.” Many thanks to An Post Employees’ Credit Union Rory Stanley
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Visits during 2019
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An Post Employees’ Credit Union Limited Annual Report 2019
Credit Union donation to Moldova Trip
L to R, Jimmy O’Connor, Steve Fitzpatrick, Tony Harmon, Charlie O’Neill and Noel Cocoman
SUPPORT YOUR CREDIT UNION IN 2020 This year we processed 2,221 applications and approved in excess of €10m in Loans of our membership of 6,777, only 3,000 have ever borrowed from the credit union Make this year the time you re-engage with your credit union There are 3 major benefits between borrowing from a Credit Union compared to a bank •
FREE Loan Insurance
•
Interest Rebate 12% paid out in 2018 and proposed for 2019
•
Payroll deduction
97% of applications are approved* Our Welcome Loan was designed for 1st time borrowers – rate of 5.99%** Application form can be downloaded at www.anpostcu.ie/loans For large loans up to 10 year terms are available So if you are planning a new car or just fancy a world cruise – talk to us !
NEW WELCOME LOAN for first time borrowers *from 1 April to 30 September
COOL RATE!
5.99%
Max €10,000
**For a loan of €6,000 over 4 years, the weekly repayment will be €32.44 and the total amount repayable will be €6,748. Annual rate of interest 5.99% typical APR 6.1%. All loans are subject to approval, lending terms and conditions.
WARNING : If you do not meet the repayments on your loan, your account will go into arrears. This may affect your credit rating which may limit your access to credit in the future.
Apply Today www.anpostcu.ie
Free Loan Insurance
1st Time Borrowers
An Post Employees’ Credit Union 12 - 14 The Anchorage, Charlotte Quay, Ringsend Road, Dublin 4. D04 A718.
Tel: (01) 6602000 Fax: (01) 6602211 E-mail: info@anpostcu.ie
www.anpostcu.ie
An Post Employees’ Credit Union Limited is regulated by the Central Bank of Ireland