Donore Credit Union Annual Report 2018

Donore Credit Union Limited

Annual Report 2018 Notice of Annual General Meeting of Donore Credit Union will take place on Thursday 24th January 2019, at 7.30pm in the Donore Community Centre, Donore Avenue

Donore Credit Union Limited is regulated by the Central Bank of Ireland

donorecu.ie

Ireland’s First Credit Union and the Independent Credit Union of Dublin 8

CONTENTS

01

10

15

31

37

04

10

16

32

38

06

11

17

34

39

08

14

18

36

40

Chairperson’s Address

Statement of Directors’ Responsibilities

Directors and Statement of Other Information Board Oversight Committee’s Responsibilities

Year in Review

Directors’ Report

Independent Auditor’s Report

Revenue Account

Balance Sheet

Statement of Changes In Reserves

Statement of Cash Flows

Notes to the Financial Statements

Schedules to the Report of the Revenue Account Membership Committee

CEO Report

Report of the Credit Committee

Credit Control Committee Report

Notice of Annual General Meeting of Donore Credit Union will take place on Thursday 24th January 2019, at 7.30pm in the Donore Community Centre, Donore Avenue Refreshments will be served on the night

Report of the Board Oversight Committee

Nominations Committee Report

Report of the Audit Risk and Compliance Committee

n Wi rizes t P h

ig sh Ca he N on

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Donore Credit Union Limited Annual Report 2018

Donore Credit Union Limited

Chairperson’s Address for the year ended 30 September 2018 On behalf of the Board of Directors I am pleased to present to you, the members, the Financial Statements and Annual Report at the 60th Annual General Meeting of Donore Credit Union.

It gives me great pride to say those words. “the 60th Annual General Meeting” of Donore Credit Union. I am the first Chair of any Credit Union in Ireland to be delivering a 60th address and we hope that there will be many more Donore Credit Union AGMs in the future.

On the day after our last AGM in January, we lost Mr Brendan Lynch. In March we lost the founder of Donore Credit Union Ms Aingil ni Bhroin. Two remarkable people whose vision, courage, determination led us to where we are now. May I please ask you all to remember all those who have passed, all those members, volunteers and staff who have contributed to the success of Ireland’s first Credit Union.

Two years ago this Credit Union faced a crisis. Pressure was being applied and your Credit Union was being encouraged to go the way of our neighbours and transfer into a suburban Credit Union.

This Board felt that was not the best move for our members. We believe strongly that services are better delivered in local area, and reserves built up over our history should be retained by our membership. Through the commitment of Board, Staff and Volunteers we were determined to grow the Credit Union, modernise our services and implement the changes needed to turn us into a modern fit for purpose Credit Union. More importantly you the members responded. Your support, your encouragement to others to join us, you borrowing has led to us turning that corner and looking forward to the future as the independent credit union of Dublin 8. We thank you.

This is your Credit Union – it is with your support we will grow and flourish. We are proud to be Ireland’s First Credit Union, and determined to make Donore Credit Union once again the standard bearer for Credit Unions in Ireland.

From being a surviving Credit Union, we are now a thriving Credit Union. We used the milestone of the 60th anniversary to reinvigorate our Credit Union – to demonstrate what a great organisation we are and to boost the profile of the Credit Union not just with members but also within the Community. With member numbers increasing, our loan book growing and new services added we have succeeded in our immediate plans.

Each month we ran a “Fun Friday” competition and may I thank our suppliers who sponsored prizes each month. We upped donations to the sports groups and the clubs and societies in the area. We organised a Community information event, sponsored the Liberties Festival and have organised the end of year Bumper Draw.

Winner of the Brendan Lynch Scholarship is final year Journalism & Visual Media student Aaron Dodd.

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Donore Credit Union Limited Annual Report 2018

In memory of Brendan, and in conjunction with Griffith College we inaugurated the “Brendan Lynch Scholarship” and the first winner is Mr Aaron Dodd, a third year media studies student – may we wish Aaron the best of luck in his academic studies and best of luck for the future.

As we end our 60th Year the Board are pleased that we are in a position to propose a dividend. The introduction of a range of loan products with lower interest rates has shown we are committed to keeping the cost of borrowing down. Our Credit Union is a strong viable resourceful Credit Union determined to maintain it’s position as an independent, locally owned, ethical, democratic organisation.

The Board has overseen the successful implementation of key changes to strengthen the Credit Union into the future. Our Strategic Plan while ambitious is being achieved. The necessary investments in our IT platforms, the delivery of on-line banking and mobile phone apps, EFTs and Direct Debits have all been delivered. We have introduced new products and services and following the success of our Diamond Loan, we will be introducing the “Diamond plus 1” loan to continue with a great low interest rate loan that appeals to members looking to borrow for the larger expensive items.

In 2018 we experienced a 23% growth in our loan book. Our members see that we are lending, that the process is straightforward and our members like to be able to come in and sit down and talk through their borrowing need.

With loans available from €500 to €150,000 and with great interest rates, our members see that they will save by borrowing with us.

We stay committed to providing face to face service in a friendly welcoming environment, offering the same traditional approach but supplemented with the necessary IT services.

Again, this year while proposing a dividend, we have managed to maintain our Death Benefit and Share and Loan insurances at the same level we have been offering.

Last year we stated we planned for the introduction of member part payments for death benefit insurances and Loan Protection and Savings Insurance. We have held off on this as this is something that differentiates us from other neighbouring Credit Unions who have merged. We will continue to offer these benefits for as long as we can.

Income from investments remains at historically low levels and will remain so for the foreseeable future. Lending to members remains our primary source of income and we encourage all members to talk to our staff about any borrowing requirements you may have.

23%

GROWTH IN OUR LOAN BOOK

MEMBERSHIP UP BY

5%

Donore Credit Union Limited Annual Report 2018

In line with our strategic plans the Credit Union must monitor costs. While additional costs have been incurred, overall our costs are in line with budgets and expectations We have increased our pool of volunteers and encourage anyone who wishes to volunteer to contact our Nominations Committee. I would like to thank all our Volunteers for their time and support. This is a community organisation and without volunteers we would not be sustainable.

Donore Credit Union is the natural locally run home Credit Union for everyone in the Liberties, South Circular Road and Dublin 8 who want the services of a local community owned credit union.

Please remember to encourage your family, neighbours, friends and colleagues to join us. We are open to new members. Non-members may have some misconceptions on a Credit Union, however, they may be presently surprised to find how different Donore Credit Union is and how practices have changed and modernised while maintaining the Credit Union ethos.

Challenges remain. However, growing our active membership, our loan book, maintaining a strong core of volunteers and with the support of the community and our members we will achieve our goals.

We know how proud the members of this Credit Union are of the history and status of Donore Credit Union. I believe exciting times are ahead for Donore Credit Union.

Donore Credit Union has earned the trust of generations of people.

IN CONCLUSION Remember, your Credit Union continues to be Safe, Strong, and Secure. You own it – you have a stake in it.

May I take this opportunity to wish directors, volunteers and Board Oversight Committee members no longer seeking re-election well for the future and to thank them for their service I wish to thank the Board of Directors, the Board Oversight Committee, our management team and staff for the huge amount of effort they have put in this year. As always we are thankful to you, the members for your support, keep saving, keep borrowing and keep letting us know what we can do for you Catherine Massey Chairperson

CONGRATULATIONS TO MAURICE KNIGHTLY WINNER OF €5000 BIG CHRISTMAS DRAW ANNOUNCED 20TH DECEMBER

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Donore Credit Union Limited Annual Report 2018

Donore Credit Union Limited

DIRECTORS AND OTHER INFORMATION DIRECTORS

Catherine Massey (Chairperson) Mark Barnes (Vice Chairperson) Hilda Hyland (Secretary) Agnes Heffernan James Brophy Jean Evers Norton (Co-opted February 2018) Gordon Cummins (resigned Jan 2018) Dolores Nugent Angela Kavanagh Kathleen Kenna

BOARD OVERSIGHT COMMITTEE MEMBERS

Jacqueline Stewart Liz Harper( Resigned Oct 2018) Ann McGuinness Frances Flanagan (Co-opted October 2018)

CREDIT UNION NUMBER

133CU

REGISTERED OFFICE AND BUSINESS ADDRESS

22 Rutledge Terrace South Circular Road Dublin 8

AUDITORS

Whelan Dowling & Associates Chartered Accountants and Statutory Audit Firm Block 1, Units 1 & 4 Northwood Court Santry Dublin 9

BANKERS

Ulster Bank 33 College Green Dublin 2

SOLICITORS

John Gaynor & Co 42/46 Thomas Street Dublin 8

ANNOUNCING DUE TO UNPRECEDENTED DEMAND

DIAMOND Plus ONE Loan

nd mo NE a i D s O te Pluan ra lo

7%

Loan Calculator is available at www.donorecu.ie

Sample repayment over 5 year

Type of Loan Diamond Plus ONE loan 7% €15,000 5 Years

Weekly €68.38

Total Interest €17,777.28 €2,777.28

APR 7.25%

Fortnightly €146.84

Total Interest €17,787.15 €2,787.15

APR 7.24%

Monthly €297.02

Total Interest €17,820.50 €2,820.50

APR 7.23%

All figures are for illustrative proposes only 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.

Loans subject to approval. Terms & Conditions Apply.

Donore Credit Union Limited is regulated by the Central Bank of Ireland

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Donore Credit Union Limited Annual Report 2018

Year in Review

Donore Credit Union Limited Annual Report 2018

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Donore Credit Union Limited Annual Report 2018

Donore Credit Union Limited

DIRECTORS’ REPORT for the year ended 30 September 2018 The directors present their report and the audited financial statements for the year ended 30 September 2018.

OBJECTS The principal activity of Donore Credit Union Limited is the provision of savings and loans to members in its common bond. The Credit Union manages its members’ shares, capital and loans to members so that it earns income from the margin between interest receivable and interest payable. Both the level of business and the year-end financial position were satisfactory.

The directors expect to develop and expand the Credit Union’s current activities and they are confident of its ability to operate successfully in the future.

PRINCIPAL RISKS AND UNCERTAINTIES The purpose of the Credit Union is to allow members save together and lend to each other at a fair and reasonable rate of interest.

The principal risks and challenges facing this Credit Union are loan default; not lending a sufficient proportion of funds so that too much of the Credit Union’s resources are tied up in investment products and the risk that we will not have sufficient cash resources to meet day to day running costs and repay members savings when demanded (liquidity risk). These risks are managed by the Credit Union board so as to achieve an acceptable balance of growth and security for members’ resources. The Board reviews and agrees policies for managing each of these risks.

BUSINESS REVIEW Both the level of business and the year-end financial position were in line with financial projections.

FUTURE DEVELOPMENTS The directors expect to develop and expand the Credit Unions’ current activities and they are confident of its ability to operate successfully in the future.

DIRECTORS AND BOARD OVERSIGHT COMMITTEE MEMBERS The current directors and board oversight committee members are as set out on page 4.

AUTHORISATION The Credit Union is authorised to conduct investment business and undertake foreign exchange transactions. It is regulated by the Central Bank of Ireland for these activities.

Donore Credit Union Limited Annual Report 2018

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 personnel with appropriate expertise and by providing adequate resources to the financial ction. The books of account of the Credit Union are maintained at the Credit Union’s premises at 22 Rutledge Terrace, South Circular Road, Dublin.

POST BALANCE SHEET EVENTS There have been no significant events affecting the Credit Union since the year-end.

AUDITORS The auditors, Whelan Dowling & Associates, have indicated their willingness to continue in office in accordance with Section 115 of the Credit Union Act, 1997 (as amended).

Approved on behalf of the Board of Directors: 15th November 2018 Catherine Massey Member of the Board of Directors

Agnes Heffernan Member of the Board of Directors

VOLUNTEERS NEEDED Interested in helping your local credit union – why not volunteer? Credit Unions offer an interesting and rewarding volunteer experience as we are a regulated financial entity. Without volunteers you local credit union cannot exist. Please contact the office, if you are interested.

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Donore Credit Union Limited Annual Report 2018

Donore Credit Union Limited

STATEMENT OF DIRECTORS’ RESPONSIBILITIES for the year ended 30 September 2018 The Credit Union Act, 1997 (as amended) requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Credit Union and of the income and expenditure of the Credit Union for that year. In preparing these 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 confirm that they have complied with the above requirements in preparing the financial statements. The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Credit Union and enable them to ensure that the financial statements are prepared in accordance with applicable Irish law and Generally Accepted Accounting Practice in Ireland, including the standards issued by the Financial Reporting Council, and in particular FRS102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”. They are 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.

Approved on behalf of the Board of Directors: 15th November 2018 Catherine Massey Member of the Board of Directors

Agnes Heffernan Member of the Board of Directors

STATEMENT OF BOARD OVERSIGHT COMMITTEE’S RESPONSIBILITIES The Credit Union Act, 1997 (as amended) requires the appointment of a Board Oversight Committee to assess whether the board of directors have operated in accordance with Part IV, Part IV (a) and any regulations made for the purposes of Part IV or Part IV(a) of the Credit Union Act, 1997 (as amended) and any other matter prescribed by the Central Bank in respect of which they are to have regard to, in relation to the board.

Approved on behalf of the Board Oversight Committee: 15th November 2018 Frances Flanagan Member of the Board Oversight Committee

Ann McGuinness Member of the Board Oversight Committee

Donore Credit Union Limited Annual Report 2018

Donore Credit Union Limited

INDEPENDENT AUDITOR’S REPORT to the Members of Donore Credit Union Limited Report on the audit of the financial statements OPINION We have audited the financial statements of Donore Credit Union Limited for the year ended 30 September 2018 which comprise the Revenue Account, the Balance Sheet, the Statement of Changes in Reserves, the Statement of Cash Flows and notes to the financial statements, including the summary of significant accounting policies set out in note 2. The financial reporting framework that has been applied in their preparation is Irish law including FRS 102 ‘’The Financial Reporting Standard applicable in the UK and Republic of Ireland’’ and the Credit Union Act, 1997 (as amended).

In our opinion the financial statements: • give a true and fair view of the state of the assets, liabilities, and financial position of the Credit Union as at 30 September 2018 and of its surplus 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 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 IAASA 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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Donore Credit Union Limited Annual Report 2018

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.

OPINIONS 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.

• The financial statements are in agreement with the accounting records.

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION Based on our knowledge and understanding of the Credit Union and its environment obtained while the audit, we have not identified any material misstatements in the directors report.

Respective responsibilities RESPONSIBILITIES OF DIRECTORS FOR THE FINANCIAL STATEMENTS As explained more fully in the Statement of Directors’ Responsibilities as set out on page 10, 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 the going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Credit Union or to cease operations, or has no realistic alternative but to do so.

500

OVER FOLLOWERS ON FACEBOOK

Donore Credit Union Limited Annual Report 2018

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 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: www.iaasa.ie. The 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.

WHELAN DOWLING & ASSOCIATES Chartered Accountants and Statutory Audit Firm Block 1, Units 1 & 4 Northwood Court Santry Dublin 9 Date: 15th November 2018

Ireland’s 1st Credit Union Online banking %€

Competitive loan rates Independent, locally owned, local decision making No penalties for early encashment Free savings & loan protection insurance Death benefit insurance Quick simple loan process – quick decisions

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Donore Credit Union Limited Annual Report 2018

Donore Credit Union Limited

REVENUE ACCOUNT for the year ended 30 September 2018 2018 €

2017 €

773,709 255,102 (6,028) 1,022,783 13,720 1,036,503

754,278 336,316 (13,290) 1,077,304 35,584 1,112,888

385,484 564,265 43,045 (225,382) 767,412

239,442 581,036 36,017 (206,503) 649,992

269,091 269,091

462,896 462,896

Notes Revenue Interest on members’ loans Other interest income and similar income Interest payable on members’ deposits Net interest income Other revenue Total revenue Expenditure Employment costs Other management expenses (Schedule 1) Depreciation Net (recoveries) or losses on loans to members Total expenditure

4 5 6 7

10 11.4

Surplus of expenditure over revenue Other comprehensive income Total comprehensive income

The financial statements were approved, and authorised for issue, by the Board on 15th November and signed on its behalf by; David Mc Auley Chief Executive Officer

Catherine Massey Member of the Board of Directors

Frances Flanagan Member of the Board Oversight Committee

Date: 15th November 2018

INDEPENDENT – LOCALLY OWNED

Donore Credit Union Limited Annual Report 2018

Donore Credit Union Limited

BALANCE SHEET as at 30 September 2018 €

Notes Assets Cash and cash equivalents Property, plant and equipment Loans to members Provision for bad debts Prepayments and other debtors Deposits and investments Total Assets Liabilities Members’ shares Members’ deposits Trade creditors and accruals

2018 €

2017 €

€

9 10 11.1 11.3 12

3,136,246 416,337 7,836,866 (389,042) 176,115 23,597,668 34,774,190

3,315,412 413,604 6,416,050 (495,681) 192,642 24,082,568 33,924,595

13 14 15

20,994,642 7,342,925 97,701 28,435,268

20,260,021 7,300,043 118,087 27,678,151

Members’ Resources Regulatory Reserve Operational Risk Reserve

4,012,941 210,000 4,222,941 2,115,981

Other reserves

3,914,526 210,000 4,124,526 2,121,918 6,338,922 34,774,190

Total Liabilities

6,246,444 33,924,595

Approved on behalf of the Credit Union Board David Mc Auley Chief Executive Officer

Catherine Massey Member of the Board of Directors

Frances Flanagan Member of the Board Oversight Committee

Date: 15th November 2018

€34m Total Assets

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Donore Credit Union Limited Annual Report 2018

Donore Credit Union Limited

STATEMENT OF CHANGES IN RESERVES for the year ended 30 September 2018 Regulatory Operational Distribution Reserve Risk reserve Reserve €

€

At 1 October 2016 3,856,801 Surplus allocation in year 57,725

210,000 -

Other movement in reserves

€

Other Unrealised reserves income reserve €

- 1,525,580 -

€

€

191,167 5,783,548 32,253 89,978

-

-

At 30 September 2017

3,914,526

210,000

- 1,898,498

223,420 6,246,444

At 1 October 2017 Dividends paid during the year

3,914,526 -

210,000 -

- 1,898,498 (100,162) -

223,420 6,246,444 - (100,162)

Loan interest rebate paid during the year

372,918

-

(76,451)

Surplus allocation in year

372,918

(76,451)

98,415

-

176,613

-

-

275,028

-

-

-

174,164

(180,101)

(5,937)

4,012,941

210,000

Other movement in reserves At 30 September 2018

-

Total

- 2,072,662

43,319 6,338,922

The Regulatory Reserve of the Credit Union as a % of the total assets as at 30th September 2018 was 11.5% which is more than the Credit Union’s Regulatory Reserve requirement of 10%.

In accordance with section 45 of the Credit Union Act 1997 (as amended) Donore Credit Union Limited put in place an Operational Risk Reserve.

Following the commencement of Section 13 of the 2012 Act, the requirement for Credit Unions to transfer 10% of their annual surplus to their Statutory Reserve (now known as the Regulatory Reserve) each year has been removed. Notwithstanding this the Board of Donore Credit Union Limited has transferred €98,415 of its current year surplus to its regulatory reserve.

Approved on behalf of the Credit Union Board David Mc Auley Chief Executive Officer Date: 15th November 2018

Catherine Massey Member of the Board of Directors

Frances Flanagan Member of the Board Oversight Committee

Donore Credit Union Limited Annual Report 2018

Donore Credit Union Limited

STATEMENT OF CASH FLOWS for the year ended 30 September 2018 Notes Opening cash and cash equivalents Cash flows from operating activities Loans repaid Loans granted Loan interest income Interest paid on members’ deposits Investment income Other revenue received Bad debts recovered Dividends paid Loan interest rebate Operating expenses Movement in other assets Movement in other liabilities Net cash used in operating activities Cash flows from investing activities Purchase of property, plant and equipment Net cash flow from other investing activities Net cash generated from investing activities Cash flows from financing activities Members’ shares received Members’ deposits received Members’ shares withdrawn Members’ deposits withdrawn Net cash generated from financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at end of financial year

OVER

€5m

IN NEW LOANS

2018 € 3,315,412

2017 € 325,436

3,599,927 3,477,065 (5,087,101) (3,659,420) 754,278 773,709 (13,290) (6,028) 303,723 255,102 68,177 13,720 206,581 185,101 (100,162) (76,451) (949,749) (820,478) 82,736 16,527 (20,386) (453,998) (54,626) (1,395,791) (45,778) 484,900 439,122

9

(20,794) 2,574,025 2,553,231

4,062,152 2,933,561 5,890,334 4,005,012 (3,327,531) (2,513,686) (5,847,452) (3,933,516) 491,371 777,503 (179,166) 2,989,976 3,136,246 3,315,412

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Donore Credit Union Limited Annual Report 2018

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Donore Credit Union Limited

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 September 2018 1.

LEGAL AND REGULATORY FRAMEWORK The Credit Union is registered with the Registrar of Credit Unions and is regulated by the Central Bank of Ireland. The registered office of the credit union is 22 Rutledge Terrace, South Circular Road, Dublin 8.

2.

ACCOUNTING POLICIES The following principal accounting policies have been applied; Statement of compliance and basis of preparation These financial statements have been prepared in accordance with FRS 102 (The Financial Reporting Standard applicable in the UK and Republic of Ireland). The financial statements are prepared on the historical cost basis.

Currency The financial statements are prepared in Euro (€), which is the functional currency of the Credit Union. Monetary amounts in these financial statements are rounded to the nearest Euro.

Going concern After reviewing the Credit Union’s projections, the directors have reasonable expectation that the Credit Union has adequate resources to continue in operational existence for the foreseeable future. The Credit Union therefore continues to adopt the going concern basis in preparing its financial statements.

Revenue recognition Revenue 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. Revenue is measured at the fair value of the consideration received. The following criteria must also be met before revenue is recognised: (i) Interest on members’ loans Interest on Member’s loans is recognised on an accruals basis. (ii) Investment income Investment income is recognised when received or irrevocably receivable. Investments are recognised at cost less any permanent diminution in capital value but ignoring any increase in capital value or encashment value until realised in the form of cash or cash equivalents.

1000

OVER TRANSACTIONS PER MONTH ON-LINE

Donore Credit Union Limited Annual Report 2018

Donore Credit Union Limited

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 September 2018 Investments Fixed-term deposits Term deposits and fixed interest investment bonds with fixed maturity dates are valued at the lower of cost or encashment value and interest is recognised in the income statement when it is received or irrevocably receivable.

Bonds with guaranteed capital and variable interest rates Interest income is recognised as received. Some bonds pay high rates of interest in early years and lower rates in later years. Paying higher amounts in early years reduces (impairs) the capital value of the bond. The capital value of the bond is tested annually for impairment and impairments losses are taken to the income statement. Impairment gains which reverse a previous impairment loss are taken to the income statement with any gains in excess of the cost of the product ignored until the bond matures.

Central Bank deposits Credit Unions are obliged to maintain certain deposits with the Central Bank. These deposits are technically assets of the credit union but to which the Credit Union has restricted access.

The funds on deposit with the Central Bank attract nominal interest and will not ordinarily be returned to the credit union while it is a going concern. The amounts are stated at the amount deposited plus accrued income and are not subject to impairment reviews.

Investments at fair value Investments held for trading and investment in stock market shares (i.e. non-convertible preference shares and non-puttable ordinary shares or preference shares) are included in this category. Financial assets at fair value are classified as held for trading if they are acquired for sale in the short term. They are valued at fair value (market value) at the yearend date and all gains and losses are taken to the income and expenditure account. The fair value of quoted investments is determined by reference to bid prices at the close of business on the balance sheet date. Where there is no active market these assets will be carried at cost less impairment.

Property, plant and equipment and depreciation Tangible fixed assets are stated at cost or at valuation, less accumulated depreciation. The charge to depreciation is calculated to write off the original cost or valuation of tangible fixed assets, less their estimated residual value, over their expected useful lives as follows: Land and buildings freehold Fixtures, fittings and equipment

4% Straight line 12.5% per annum straight line

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Donore Credit Union Limited Annual Report 2018

Donore Credit Union Limited

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 September 2018 Impairment of tangible fixed assets Tangible fixed assets are stated at cost or at valuation, less accumulated depreciation. The charge to depreciation is calculated to write off the original cost or valuation of tangible fixed assets, less their estimated residual value, over their expected useful lives as follows: Cash and cash equivalents Cash and cash equivalents comprise cash on hand and deposits and investments with a maturity of less than or equal to three months.

Basic financial assets Loans to members Loans are financial assets with fixed or determinable payments. Loans are recognised when cash is advanced to members and measured at amortised cost. Loans are derecognised when the right to receive cash flows from the asset have expired, usually when all amounts outstanding have been repaid by the member.

Bad debt provision The estimation of loan losses is inherently uncertain and depends upon many factors, including loan loss trends, credit risk characteristics in loan classes, local & international economic climates, conditions in various sectors of the economy to which the Credit Union is exposed, and, other 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. 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 a doubt about their recoverability. Loan loss provisioning is monitored by the Credit Union, and the Credit Union assesses and approved its provisions and provision adequacy on a monthly 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 operates. 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 the 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.

Donore Credit Union Limited Annual Report 2018

Donore Credit Union Limited

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 September 2018 Basic financial liabilities Members’ shares Members’ shares in Donore Credit Union Limited are redeemable and therefore are classified as financial liabilities. They are recognised at the amount of cash deposited.

Other creditors Short term Other Liabilities, Creditors, Accruals are measured at the transaction price.

Holiday pay A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the Balance Sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the Balance Sheet date.

Distribution Donore Credit Union Limited’s policy is to pay a reasonable rate of dividend and loan interest rebate subject to covering operating expenses and meeting reserve requirements as set out in the Credit Union’s Reserve Management Policy.

Reserves Regulatory reserve The Credit Union Act, 1997 (Regulatory Requirements) Regulations 2016 requires Credit Unions to establish and maintain a minimum Regulatory Reserve requirement of at least 10 per cent of the assets of the credit union. This Reserve is to be perpetual in nature, freely available to absorb losses, realised financial reserves that are unrestricted and nondistributable.

Operational risk reserve Section 45(5)(a) of the Credit Union Act, 1997 (as amended) requires each credit union to maintain an additional reserve that it has assessed is required for operational risk having regard to the nature, scale and complexity of the credit union. Credit Unions are required to maintain a minimum operational risk reserve having due regard for the sophistication of the business model.

The definition of operational risk is the risk of losses stemming from inadequate or failed internal processes, people and systems or from external events. The Directors have considered the requirements of the Act and have considered an approach to the calculation of the operational risk reserve.

700

OVER REGISTERED FOR ON-LINE ACCESS

21

Donore Credit Union Limited Annual Report 2018

22

Donore Credit Union Limited

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 September 2018 Other reserves Other Reserves are the accumulated surpluses to date and Reserves arising on the Transfer of Engagements that have not been declared as dividends returnable to members. The Other Reserves are subdivided into realised and unrealised. In accordance with the Central Bank Guidance Note for Credit Unions on Matters Relating to Accounting for Investments and Distribution Policy, investment income that has been recognised but will not be received within 12 months of the balance sheet date is classified as “unrealised” and is not distributable. A reclassification between unrealised and realised is made as investments come to within 12 months of maturity date. Interest on Loans receivable at the balance sheet date is also classified as “unrealised” and is not distributable. All other income is classified as “realised”.

Distribution Policy In respect of each financial year, the Credit Union will allocate surplus funds to the statutory reserve and other reserves in accordance with the provisions of the Credit Union Act 1997 (as amended) and regulations issued by the Registry of Credit Unions, Central Bank of Ireland.

The Board of Directors may also decide to hold reserves in excess of minimum statutory requirements, taking prudent account of the scale and complexity of the Credit Union’s business, its risk profile and prevailing market conditions. The basis of the dividend is the distributable income of the Credit Union after meeting its reserve requirements. It is the policy of the Credit Union to maintain the undistributed surplus in a general reserve that may be used in future years for the payment of dividends.

3.

CRITICAL ACCOUNTING JUDGEMENT AND ESTIMATES Preparation of the financial statements requires management to make significant judgements and estimates. The items in the financial statements where these judgements and estimates have been made include: Determination of depreciation , useful economic life and residual value of tangible assets The annual depreciation charge depends primarily on the estimated life’s of each type of asset and, in certain circumstances, estimates of residual values. The directors regularly review these useful lives and change them if necessary to reflect current conditions. In determining these useful lives, management consider technological change, patterns of consumption, physical condition and expected economic utilisation of the assets. Changes in the useful lives can have a significant impact on the depreciation charge for the financial statements.

DIRECT DEBIT NOW AVAILABLE

Donore Credit Union Limited Annual Report 2018

23

Donore Credit Union Limited

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 September 2018 Impairment of buildings At each reporting date fixed assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is eliminated and compared with its carrying amount. If the estimates recoverable amount is lower, the carrying value is reduced to its estimated recoverable amount, an impairment loss is recognised immediately in profit or loss. If an impairment loss subsequently reverses, the carry amount of the asset is increased to the revised estimate of the recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment is recognised immediately in the Income and Expenditure Accounts Bad Debt Provision Donore Credit Unions accounting policy for impairment of loans is set out in the accounting policies. 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.

4.

INTEREST ON MEMBERS’ LOANS 2018 € Closing accrued interest receivable Loan interest received in year Opening accrued loan interest receivable

5.

773,709 754,278

2017 € 754,278 -

(754,278)

-

773,709

754,278

2018 € 144,245 110,857

2017 € 153,909 149,814

-

32,593

255,102

336,316

OTHER INTEREST INCOME AND SIMILAR INCOME

Investment income received Investment income receivable within 12 months Gains on maturity of bonds with guaranteed capital and variable interest rates

Donore Credit Union Limited Annual Report 2018

24

Donore Credit Union Limited

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 September 2018 6.

INTEREST PAYABLE AND DIVIDENDS

Interest payable for the year

2018 €

2017 €

6,028

13,290

2017 %

2017 €

Dividends and loan interest rebate The following distributions were made during the year: 2018 %

2018 €

Dividends on shares

-

100,162

-

-

Loan interest rebate

-

76,451

-

-

176,613

The above dividends refer to those paid out in those years from the surplus earned in previous years.

Proposed dividends and loan interest rebate 2017 %

2017 €

52,487

0.50

101,300

-

10.00

2018 %

2018 €

Dividends on shares

0.25

Loan interest rebate

-

52,487 7.

75,427 176,727

OTHER REVENUE 2018 € Other Income Entrance fees

INDEPENDENT – LOCALLY OWNED

13,525

2017 € 35,428

195

156

13,720

35,584

Donore Credit Union Limited Annual Report 2018

Donore Credit Union Limited

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 September 2018 8.

KEY MANAGEMENT PERSONNEL The directors of Donore Credit Union Limited are all unpaid volunteers. The management personnel compensation is as follows: 2018 € Short term employee benefits

126,681

Payments to pension scheme Total key management personnel compensation

2017 € 159,892

8,014

12,107

134,695

171,999

Short term employee benefits include salaries, social security contributions and paid annual leave.

9.

CASH AND CASH EQUIVALENTS Cash and cash equivalents comprise of cash on hand and deposits and investments with a maturity of less than or equal to three months.

523,464

2017 € 524,645

2,612,782

2,790,767

3,136,246

3,315,412

2018 € Cash and bank balances

2018

2017

Cash and bank balances Cash equivalents

25

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Donore Credit Union Limited Annual Report 2018

Donore Credit Union Limited

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 September 2018 10. PROPERTY, PLANT AND EQUIPMENT Land and Fixtures, buildings fittings and freehold equipment

Total

€

€

€

608,384

269,636

878,020

-

45,778

45,778

At 30 September 2018

608,384

315,414

923,798

Depreciation At 1 October 2017

262,966

201,450

464,416

Charge for the year

10,492

32,553

43,045

273,458

234,003

507,461

At 30 September 2018

334,926

81,411

416,337

At 30 September 2017

345,418

68,186

413,604

Cost At 1 October 2017 Additions

At 30 September 2018 Net book value

11. LOANS TO MEMBERS - FINANCIAL ASSETS 11.1 LOANS TO MEMBERS 2017 € 6,416,050 6,322,648 5,482,725 3,659,420 (3,995,551) (3,477,065) 2018 €

As at 1 October Advanced during the year Repaid during the year Loans written off Gross loans to members

€7,836,866 Gross loans to members

11.2

(66,358)

(88,953)

7,836,866

6,416,050

23%

LOAN BOOK

Donore Credit Union Limited Annual Report 2018

Donore Credit Union Limited

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 September 2018 11.2 CREDIT RISK DISCLOSURES 2018 %

2018 €

2017 %

2017 €

7,127,531

90.95

6,081,702

94.79

599,551 64,600 31,761

7.65 0.82 0.41

234,465 71,562 14,734

3.65 1.12 0.23

13,423

0.17

13,586

0.21

Gross loans not impaired Not past due Gross loans individually impaired Up to 9 weeks past due Between 10 and 18 weeks past due Between 27 and 39 weeks past due 53 or more weeks past due

709,335

9.05

334,347

5.21

Total gross loans

Total

7,836,866

100.00

6,416,049

100.00

Impairment allowance Total carrying value

7,836,866

6,416,049

11.3 LOAN PROVISION ACCOUNT FOR IMPAIRMENT LOSSES

As at 1 October

2018 €

2017 €

495,681

584,556

Allowances reversed during the year

(106,639)

(88,875)

(Decrease) in loan provision during the year

(106,639)

(88,875)

389,042

495,681

2018 €

2017 € (206,581)

As at 30 September 11.4 NET RECOVERIES OR LOSSES RECOGNISED FOR THE YEAR

Bad debts recovered

(185,101)

Increase in bad debt provision

(106,639)

(88,875)

(291,740)

(295,456)

66,358

88,953

(225,382)

(206,503)

Loans written off Net (recoveries)/losses on loans to members recognised for the year

27

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Donore Credit Union Limited Annual Report 2018

Donore Credit Union Limited

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 September 2018 12. DEBTORS, PREPAYMENTS AND ACCRUED INCOME

65,248

2017 € 42,828

110,867

149,814

176,115

192,642

2018 € Prepayments Accrued income

13. MEMBERS’ SHARES - FINANCIAL LIABILITIES

As at 1 October Received during the year

2017 € 20,260,021 19,840,146 4,062,152 2,933,561

Repaid during the year

(3,327,531) (2,513,686)

As at 30 September

20,994,642 20,260,021

2018 €

14. MEMBERS’ DEPOSITS - FINANCIAL LIABILITIES 2018 € As at 1 October Received during the year Repaid during the year As at 30 September

7,300,043 5,890,334

2017 € 7,228,547 4,005,012

(5,847,452) (3,933,516) 7,342,925

7,300,043

2018 €

2017 €

97,701

118,087

15. OTHER CREDITORS AND ACCRUALS

Accruals

MEMBERS SHARES

OVER €20 MILLION

Donore Credit Union Limited Annual Report 2018

Donore Credit Union Limited

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 September 2018 16. FINANCIAL INSTRUMENTS Donore Credit Union Limited manages its members’ shares and loans so that it earns income from the margin between interest receivable and interest payable. The main financial risks arising from Donore Credit Union Limited’s activities are credit risk, market risk, liquidity risk and interest rate risk. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

2018 € Financial assets at amortised cost

2017 €

34,845,551 33,924,595

Financial liabilities Financial liabilities at amortised cost

28,435,268 27,678,151

Credit Risk: Credit risk is the risk that a borrower will default on their contractual obligations relating to repayments to Donore Credit Union Limited, resulting in financial loss to the Credit Union.

In order to manage this risk the Board of Directors approves Donore Credit Union Limited’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.

Liquidity Risk: Donore Credit Union Limited’s policy is to maintain sufficient funds in liquid form at all times to ensure that it can meet its liabilities as they fall due. The objective of the Credit Union’s liquidity policy is to smooth the mismatches between maturing assets and liabilities and to provide a degree of protection against any unexpected developments that may arise.

Market Risk: Market risk is generally comprised of interest rate risk, currency risk and other price risk.

Donore Credit Union Limited conducts all its transactions in Euro and does not deal in derivatives or commodity markets. Therefore Donore Credit Union Limited is not exposed to any form of currency risk or other price risk.

16.1 LIQUIDITY RISK DISCLOSURE All of the financial liabilities of the Credit Union are repayable on demand except for some members’ shares attached to loans.

17. PENSION SCHEME Donore Credit Union Limited now participate in a Defined Contribution Scheme with rates of 5% to 7% employer contributions made.

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30

Donore Credit Union Limited Annual Report 2018

Donore Credit Union Limited

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 September 2018 18. RELATED PARTY TRANSACTIONS The Related Party Loans stated above comprise of loans to members of the Board of Directors, the Board Oversight Committee, the Management Team and members of the family of member of the Board of Directors and the Board Oversight Committee and the Management team of Donore Credit Union Limited. Related parties have been identified in line with the definition in the Credit Union Act 1997 (Regulatory Requirements) Regulations 2016.

Total Loans outstanding to Related Parties represents 2.2% of the total loans outstanding at year ended 30 September 2018 Loans advanced to Related Parties during the year

No. of loans 10

2018 €110,817

15

€174,137

Total loans outstanding to Related Parties at the year end

There were no provisions against the loans due from the directors and the management team at the current or prior year Balance Sheet Date.

There were no other related party transaction identified in the period under review.

19. INSURANCE AGAINST FRAUD The Credit Union has insurance against fraud in the amount of €2,600,000 in compliance with section 47 of the Credit Union Act, 1997 (as amended).

20. CAPITAL COMMITMENTS There were no capital commitments at the year ended 30 September 2018.

21. POST-BALANCE SHEET EVENTS There have been no known events affecting the credit union since the year end which would require adjustment or disclosure in the financial statements.

22. CONTINGENT LIABILITIES In September 2018, all Credit Unions received correspondence from the Central Bank on a potential matter relating to accrued interest outstanding on members top up loans, which may have led to a potential over collection of interest. Donore Credit Union has commenced their review to ascertain whether any top up loans to members might be impacted by these circumstances, and to determine what actions may need to be taken, in consultation with the Central Bank. Consequently, it is impracticable at this time to estimate the impact, financial or otherwise, if any, of this matter and whether any net amounts will become payable in the future.

23. IASSA ETHICAL STANDARDS - NON AUDIT SERVICES In common with many other Credit Unions, from time to time, our auditors provide us with advisory and consulting services.

24. APPROVAL OF FINANCIAL STATEMENTS The financial statements were approved, and authorised for issue, by the Board on 15th November 2018.

Donore Credit Union Limited Annual Report 2018

Donore Credit Union Limited

SCHEDULES TO THE REVENUE ACCOUNT for the year ended 2018 SCHEDULE 1 - OTHER MANAGEMENT EXPENSES

Other Management Expenses Training Rent & Rates Share & Loan Insurance General insurance Death Benefit Insurance Central Bank Levies Light, heat and cleaning Repairs & Renewals Chapter expenses Printing and stationery Promotion and Advertising Telephone and postage Computer & Equipment Maintenance Travelling and subsistence AGM & Convention Legal and professional Subscriptions and donations Consultancy fees Audit Bank interest and charges Security BOC Expenses General expenses Debt Collection Affiliation fees

Other Management Expenses down 2.9% from 2017

2018 €

2017 €

22,156 10,320 106,621 12,183 58,227 31,856 19,980 2,729 220 5,314 29,583 9,535 69,229 6,556 10,593 13,311 6,130 69,842 16,000 13,974 6,974 2,033 9,666 23,358

13,346 10,871 104,563 12,418 58,985 56,267 20,084 10,864 120 7,143 28,616 7,571 63,772 4,864 10,843 11,222 4,150 69,137 17,699 11,317 9,226 5,975 5,086 27,213

7,875

9,684

564,265

581,036

31

32

Donore Credit Union Limited Annual Report 2018

CEO Report Dear members As CEO of Donore Credit Union, I wish to give you a brief update on our achievements in the last year and our plans for 2019 onwards.

We have undergone a signiďŹ cant modernisation of processes, IT platforms and systems. Our back up, data recovery and business continuity systems were reviewed and modernised. We rolled out full on-line banking with mobile phone apps now available on Android and Apple Phones and we have seen a steady increase in member numbers who are using same to conduct their business.

We launched our new website and have a very active Facebook and other social media presence and we ask members to follow us and like us on these. It is quite simple to register for on-line banking and this gives you instant access to your statement and the ability to transfer money internally between your Credit Union accounts and/or externally to other payees.

In 2018 we overhauled our internal lending processes to target quick decision making and turnaround of loan applications. Donore Credit Union is committed to being a prudent lender and we will only approve loans where your ability to repay has been evidenced. As a credit union we recognise that the traditional 1 loan product for all is no longer for everyone, so we introduced some new loan products.

The growth in our loan book and lending continued in 2018. We issued â‚Ź5m in new loans, a fantastic amount for a Credit Union of our size. Our loan book grew by 23%, and members started taking out loans over a longer period for higher amounts as they saw the great value in our loan interest rates. Members looked at what they were paying elsewhere and some decided to use their Credit Union to bring down the cost of their borrowings. Also, members took on board the message that while we are always there for the small loan, they should look at us for the larger amounts.

This increase in loans has taken place against a backdrop of us continuing to minimise bad debts, and maintain excellent recoverability of bad debts. Legal fees have risen this year as we ratcheted up pressure on those who are unwilling to repay and the introduction of the Central Credit Register will surprise many debtors who think they could simply walk away from their obligation.

During the year costs for professional fees rose as new legislative and regulatory items were introduced. The introduction of General Data Protection Regulations in May led to us having to conduct a gap analysis and identify where we were not conforming with new legislation. We have kept staff numbers relatively static as we used professional advisors to assist us with non core business items. Our focus is to ensure staff are available for members, there to lend and we endeavour to minimise staff involvement in non value adding activities.

Donore Credit Union Limited Annual Report 2018

In 2018 we have heavily promoted the Credit Union. In our 60th year, we wanted to reinforce the Credit Union’s role in the community. Our focus is on promoting Donore Credit Union as the independent member owned community Credit Union.

We believe that members and prospective members are attracted to organisations in which they feel they have a stake. We will continue to push this message. People do not want to be part of large faceless financial institutions and at Donore Credit Union no-one is just a number.

In early 2017 the Board took the decision to continue Donore Credit Union as a standalone Credit Union owned by the Community of Dublin 8. There was no doubt the massive challenge and obstacles ahead. Staff of the Credit Union worked exceptionally hard to meet these challenges.

We will continue to face new challenges. I am confident that these will be overcome because of the reaction of our members to their Credit Union. Credit Unions are judged on their viability on financial figures and I am delighted our figures and projections are very strong. Credit Unions are viable once there are members coming through the doors, trusting us with their savings, borrowing from us. Donore Credit Union has always been about the member.

We will continue to differentiate ourself from our competitors, by having great personal service, maintaining a warm welcoming office and being a place where a member feels they can get good advice when thinking about a loan.

The future is bright for Donore Credit Union. Going forward we plan to increase our members numbers. Donore common bond area is a growing thriving area of Dublin and new residents are potential Credit union members. We will be aiming to grow our membership and we feel this can be achieved by working with local schools, community organisations, college and sports clubs.

Equally we are reliant on you the member to promote and canvass for your credit union.

Whether it be a new neighbour, work colleague, family member please encourage them to join Donore Credit Union.

I look forward to challenges ahead and I am confident obstacles will be overcome and we can deliver the success your Credit Union deserves.

David McAuley CEO

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Donore Credit Union Limited Annual Report 2018

Report of the Credit Committee Dear Member The Committee’s main role is to oversee the lending function and ensure policies and underwriting standard are being adhered to. Also, the Committee is responsible for monitoring the performance of loan book and proposal of new loan products.

The Committee meets a least twice monthly and reports monthly to the Board on it’s findings.

The old days of Members waiting for Credit Committee meetings, loans confined to multiples of savings and the need to establish a savings history are all in the past. The Credit Union assesses risks and members ability to repay – these are the overriding concerns on all lending decisions.

The majority of our loans are assessed by our experienced Loan Officers and on receipt of all required documents, loans can be issued immediately and with our EFT arrangements will be in your bank on the same or next day.

The Committee wants misconceptions about Donore Credit Union lending to become a thing of the past as we adapt to a digital age.

In 2018 the Committee oversaw the introduction of new loan products • The Diamond Loan • Student Loan • Community Loan These were introduced as a direct response to members comments regarding loan rates and members looking to borrow more from the Credit Union. In particular with the Diamond Loan, we recognised there is a significant body of our members who having worked hard to paydown mortgages, are now looking to do that house renovation, there are members who are fed up paying high interest rates on other loans elsewhere and there are members who just want to enjoy that once in a lifetime holiday they had put off.

As such we are delighted that the Diamond Loan will be replaced with the “ Diamond Plus 1” loan.

The Credit Committee review loans to ensure underwriting standards are maintained. The Credit Committee recognises the risks of poor lending and as such monitors the loan book to ensure lending is prudent and in line with the members ability to repay.

Lending is the core function of our credit union. The Committee are aware we face challenges, however, we will continue to proactively make changes to ensure we offer our members value and great service. The Committee with staff support, is looking to continue to improve the loan application and approval process.

INDEPENDENT – LOCALLY OWNED

Donore Credit Union Limited Annual Report 2018

For 60 years this Credit Union has provided loans to our members, the financial stability of this Credit Union is testament to the loyalty of our members. We must continue to ensure this loyalty is met with great services and great value.

This Credit Union has significant resources to lend. We encourage members to borrow. Let our Loan officers take you through the process, in a face to face engagement to discuss your loan no matter how small or how large.

Over the past year a total of 1,357 loans were issued to the amount of €5m up from €3.6m in 2017, an increase of €1.4m.

ANALYSIS OF LOANS ADVANCED BETWEEN 01/10/2017 AND 30/09/2018 Description Home Improvements Car Purchase Holidays Car Repairs Education/Student Family Occasions Medical Bills/Other Debts Tax/Insurance Refinance Change to Loan Personal (below €1k) 6.9% First Time Borrower Diamond Loan Covered Loan

Number 352 95 6 38 43 293 31 74 2 0 3 31 103 37 249

Granted Amount € 1,398,242 749,326 7,000 57,350 107,903 520,849 105,556 194,166 4,200 0 6,500 16,070 404,614 955,282 560,033

Average Amount € 3,961 7,887 1,167 1,509 2,509 1,778 3,405 2,624 518 0 1,750 541 3,928 25,819 2,249

The largest demand is for home improvements which accounts for over 27.5% of new lending by amount During 2018 Diamond Loan represented 19% of new loans.

Finally, this Credit Union is proud of it’s history of being a prudent lender. We will never push unaffordable loans on members and we will strive to offer credit to members who can demonstrate an ability to repay. Some members may mistakenly believe we are there for the small loans, however, this credit union has funds to lend and will consider all loan applications big or small. You may be pleasantly surprised at how competitive your Credit Union is and with versatile repayment schemes, no hidden charges and new loan products, there has never been a better time to contact your credit union.

352 Home Improvement Loans Granted Angela Kavanagh On behalf of the Credit Committee

Worth €1,398,242

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Donore Credit Union Limited Annual Report 2018

Credit Control Committee report The function of the Credit Control Committee is to ensure that all loans are paid back in line with the loan agreement signed at time of issue.

The Committee meets monthly to review all loans that have fallen into arrears and to keep track of the overall pattern of loan repayments. Furthermore, the Committee liaises with Lending Officers and Credit Committee if patterns or behaviours are identified.

Once a loan falls into arrears members are contacted as are their guarantors if such are in place. A member who acts as guarantor for another member becomes responsible for all monies owed by that member and will have their savings secured against that loan.

The Committee accepts that any member can get into difficulty from time to time and when this happens it is important to contact our Credit Controller immediately to discuss a solution to the arrears problem. It is the Board’s policy to do everything possible to assist the member, however, where the Committee determine there is an unwillingness to repay, all options will be invoked to ensure return of monies.

The Board of Donore Credit Union is very aware we are lending member’s money. We treat delinquency as a serious matter. We will use all available means to ensure we get repaid. With regards to the term “written off”, this refers to the accounting treatment of a loan and arrears in the financial accounts and not how the Credit Union views an outstanding debt. This Credit Union will continue to actively pursue and recover any outstanding debt. We engage the services of Finance Ireland (a collection agent) to assist with door-step recovery and we retain Brennan and Co Solicitors for legal debt recovery through the courts.

It is the policy of this Credit Union to pursue all outstanding and unpaid debts. Members can rest assured that the Committee are doing all in their power to recover all outstanding monies owed by former members.

There were 17 members accounts written off during the year totalling €66,357.75 compared to 19 for €89k last year.

In addition to aged debts, the Committee monitor early arrears. The Committee positively note that our arrears remain very low and despite our loan book increasing we are satisfied that loan underwriting standards are very high and Credit Risk is being assessed during loan applications.

Recovery of bad debts was €185k compared to €206k last year. We continue to target aged bad debts while monitoring of early missed payments ensures our Bad Debt position is showing a continuing improvement.

With the introduction of the new Central Credit Register in 2018, the ability of non-payers to get credit elsewhere will be severely restricted. If a member’s Central Credit Register record is poor, we urge member to contact us.

In 2018 in line with Strategic Plan, the Committee will continue to target historic non-payers, initiate legal action and seek judgements where we view assets are available to meet loan outstanding loan obligations. This is our commitment to you our member.

Hilda Hyland On behalf of the Credit Control Committee

Arrears Down

Bad Debts Recovered €120K

Donore Credit Union Limited Annual Report 2018

Report of the Membership Committee Dear Member The Committee’s main functions to review membership applications in compliance with the Criminal Justice Act 2010 (as amended) and to encourage growth in membership numbers.

The total membership as on the 30th September 2018 was 4,518, this is a net increase of 203 members over 30th September 2017. During the year 294 new members joined.

We currently have 752 members who have registered for a PIN number and have on-line access to their accounts. We would encourage members to register for on-line access and as the volume and amounts of on-line transactions increases, members will find that this service very easy to use and may accommodate their busy lifestyle.

The future of Donore Credit Union is in growing our membership. The common bond of Donore Credit Union is a vibrant, growing, changing area of Dublin city. As the only independent, locally owned Credit Union in Dublin 8, we believe we are well positioned to continue to grow our membership. New residents moving into the area will want to develop attachments to local community whether that be through schools, clubs or the Credit Union.

Donore Credit Union never intends to be the biggest Credit Union in Dublin. We want our members to be front and centre of their Credit Union. We are committed to having an independent Credit Union serving the local community. Growing a confident, forward looking credit union is the aim of the Board, and we want to represent everyone in the community and we welcome all new members.

Our membership drive this year, has involved us; • Attending Community events and meetings • Supporting local clubs and societies through donations • Visiting local College and engaging with students • Visiting local schools to give advice on saving and money management • Setting up a refer a new member scheme with local sports groups • Having open nights for new members to come in and meet us We ask members to refer their neighbours and families to us.

The loss of local credit unions, the continuing closure of bank branches, means Donore Credit Union is now more relevant than ever. Our commitment to face to face service, the provision of on-line banking facilities and our understanding of members needs continues to drive your Credit Union forward.

Help maintain your local community owned Credit Union – help ensure that an ethical, socially owned financial service continues for the next 60 years in this area.

Thank You Agnes Heffernan On behalf of the Membership Committee

During the year 294 new members joined.

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Donore Credit Union Limited Annual Report 2018

Report of the Board Oversight Committee For the year ended 30th September 2018 The Board Oversight Committee (BOC) is pleased to submit our annual report to you the members of Donore Credit Union.

Members of the Board Oversight Committee were in attendance at all monthly and other Board meetings. We also attended committee meetings throughout the year.

We can report to you that in our opinion the Board has been compliant in their legal and regulatory requirements and have dealt with any risk and compliance issues which have arisen during the year.

We met ourselves between board meetings to review the board meetings and presented the results of our review to the Board on four occasions this year. We have undertaken training and have gained qualiďŹ cations, which have helped us to become more effective in carrying out our function. We believe that there is a good working relationship between the BOC, management team, staff and Board and we wish to thank them all for their co-operation.

Jacqueline Stewart, Ann McGuinness and Frances Flanagan

INDEPENDENT – LOCALLY OWNED

Donore Credit Union Limited Annual Report 2018

Nomination Committee report for AGM 2018 The Nomination Committee is a Committee with a statutory role as per the Credit Union Act. Amongst it’s functions is to ensure that there is at least one candidate nominated for each vacancy at the AGM. To this end the committee has recruited 6 new volunteers this year, The committee has ensured that all candidates and volunteers meet the standards of Fitness & Probity set out by the CBI and have been subjected to due diligence checking and all have agreed, in writing, to abide by these standards should they be elected/re-elected.

There are 4 vacancies on the board this year.

Members due for re-election: Angela Kavanagh Nugent, Dolores Jean Evers-Norton

Co-opted Feb 2018.

There are 2 Board Oversight Committee member for re-election due to 1 member not going forward for re-election and 1 resignation.

Candidates are: Frances Flanagan Mark Barnes

Co-opted to BOC 25th Oct. 2018 Move from board to BOC.

Due Diligence has been performed on all nominees.

The Board are proposing Jason Dowling of Whelan Dowling & Associates for the position of auditors for the coming year. The Nomination committee is required to determine if it is satisfied that there is competent skill-set on the board and that Board members are equipped to contribute and participate in decision making. The Committee’s viewpoint is that this is being done.

Finally, the Committee request any members who are interested in volunteering to contact us.

The success of this Credit Union is reliant on volunteers. If you are not interested in being a Director there are a number of committees where volunteers are needed. As our 60th birthday is here we will need support for events in 2018.

The Committee also want to thank all Directors for their time and effort during the year. In particular we wish to thank Directors and Board Oversight Committee members who have resigned during the year.

Hilda Hyland On behalf of the Nomination Committee.

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40

Donore Credit Union Limited Annual Report 2018

Report of the Audit Risk and Compliance Committee Dear Member This Committee is responsible for ensuring that the Credit Union complies with all regulatory and legal requirements and for identifying and monitoring all risks facing the organisation and ensuring the both internal and external audit are conducted and all findings and recommendations are actioned.

It is the aim of this Committee to ensure a culture of risk awareness permeates throughout the organisation as we face internal and external challenges. Risk mitigation, strategic planning and detailed business analysis are in place and functioning across all areas of the Credit Union.

This Committee ensures Internal Audit, External Audit and Risk and Compliance programs are in place, testing is conducted, reports and findings are presented to Board and recommendations and improvements are made.

Our Risk and Compliance Officers (RBK Accountants) are responsible for ensuring the Credit Union is compliant with Regulatory and legal obligations. They also monitor risks in the organisation, identifying potential issues and recommending remedial actions to take place. RBK have tested all key areas of organisation and the Committee is satisfied that risks have been assessed and recommendations implemented. We are satisfied that we are compliant with our legal and regulatory requirements.

The Committee monitors and reports monthly to the Board on the register of key Risks.

A compliance testing plan is conducted throughout the year to ensure we meet all the legal and regulatory requirements.

The Committee oversees the role of our internal auditors (FMB Chartered Accountants) and ensures that a robust internal audit monitoring program is being carried out with findings being actioned and where changes or controls weaknesses are identified, these are updated and improved.

The work of the Committee has increased as new legislative and regulatory requirements are introduced, however, we are satisfied that we have the capacity and skills to ensure Donore Credit Union remains a robust, secure and financially sound Credit Union.

Jean Evers Norton On behalf of the Audit Risk and Compliance Committee

Donore Credit Credit Uni Union nion Limited Annual Report Re 2018

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Student Loans t den Stu -rate n Loa %) .12 7 .R (A.P

%

6.9

Loan Calculator is available at www.donorecu.ie Type of Loan Student Loan 6.9%

€3,000 1 Year

Sample repayment over 1 year Weekly €60

Total €3,106

Interest €106

Fortnightly €120

Total €3,108

Interest €108

Monthly €259

Total €3,113

Interest €113

All figures are for illustrative proposes only 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.

Loans subject to approval. Terms & Conditions Apply.

Donore Credit Union Limited is regulated by the Central Bank of Ireland

Donore Credit Union 22 Rutledge Terrace South Circular Road Dublin 8 01 453 0844 info@donorecu.ie

www.donorecu.ie

donorecu.ie

The Independent Credit Union of the Liberties