51St Annual Report 2010 the Southern Cross
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51st Annual Report 2010 The Southern Cross The Crux constellation is the smallest, yet most The constellation was also used on the dark blue, shield- distinctive, of the 88 modern constellations. Its name is like patch worn by personnel of the U.S. Army’s Americal Latin for cross, and it is dominated by a cross-shaped Division, which was organized in the Southern Hemisphere, asterism that is commonly known as the Southern Cross. on the island of New Caledonia, and also the blue diamond The Southern Cross comprises the red giant Gacrux and of the U.S. 1st Marine Division, which fought on the Southern orange giant Juxta Crucem as well as three other major Hemisphere islands of Guadalcanal and New Britain. stars, which are blue-white in colour, Acrux, Mimosa and As a highly distinctive asterism, Crux has great significance Delta Crucis. in the cultures of the southern hemisphere. Being a circumpolar constellation, Crux is easily visible In Australia, the Southern Cross played a crucial role as from the southern hemisphere at practically any time of symbol of the Eureka Stockade. In the Eureka Oath from year. It is also visible near the horizon from tropical Peter Lalor’s famous speech in 1854 under the flag he latitudes of the northern hemisphere for a few hours proclaimed: every night during the northern winter and spring. We swear by the Southern Cross to stand Since the southern sky lacks an easily visible pole star, truly by each other and fight to defend our Acrux and Gacrux are commonly used to mark south. rights and liberties. Tracing a line from Gacrux to Acrux and extending it for In 1893, Australian poet Banjo Paterson wrote: approximately 4.5 times the distance between the 2 stars The English flag may flutter and wave, leads to a point close to the Southern Celestial Pole. where the world wide oceans toss, Beginning in the colonial age, Crux became used as but the flag the Australian dies to save, a national symbol by several southern nations. The is the flag of the Southern Cross. brightest stars of Crux appear on the flags of Australia, The Southern Cross was written into the lyrics of Advance Brazil, New Zealand, Papua New Guinea, and Samoa. Australia Fair in 1901, “Beneath our radiant Southern They also appear on the flags of the Australian state Cross”, and the song was adopted as the Australian of Victoria, the Australian Capital Territory and the National Anthem in 1984. Northern Territory. The Southern Cross inspired the creation of the ADCU logo. Contents 2010 Directors’ Report 02 Directors’ Declaration 10 Key Performance Measures 11 2010 Chief Executive’s Report 12 2010 Independent Auditor’s Report 16 Statement of Comprehensive Income 18 Statement of Changes In Member Equity 18 Statement of Financial Position 19 Statement of Cash Flows 20 Statement of Accounting Policies 22 2010 The Directors present their report on Australian Defence Credit Union Limited (the Credit Union) for Directors’ Report the financial year ended 30 June 2010. 2 51st Annual Report 2010 Corporate governance at the start of the third Annual General Meeting after the Director was last elected, and may stand for re-election This statement outlines the main corporate governance should he or she re-nominate. The Board may appoint practices in place throughout the financial year. a new Director to fill a casual vacancy and the term of a Legislative and regulatory requirements Director so appointed will end at the start of the next Annual General Meeting. The Credit Union is a company registered under the Corporations Act 2001. Board processes The Credit Union is primarily regulated as: To assist in the planning and execution of its - an Authorised Deposit Taking Institution by the responsibilities, the Board has established a number of Australian Prudential Regulatory Authority (APRA) (via Board Committees. They are the Executive Committee, Australian Prudential Standards and the Banking Act Renewal Committee, Audit Committee, Risk Committee and 1959), Remuneration Committee. These committees have written - an Australian Financial Services licence holder by the charters and policies that are reviewed annually along with Australian Securities and Investment Commission a range of plans. Through the committees, policies and (ASIC) (via the Financial Services Regulatory Act 2001 plans, the Board has established a governance and risk and the Corporations Act 2001), management framework including a system of internal controls, business risk, compliance, financial and regulatory - a credit provider to consumers, by the Australian reporting. The significant outcomes of the committees’ Securities and Investment Commission (ASIC), and work are reviewed and endorsed by the full Board. The - a provider of designated services, by the Australian Board currently holds eleven scheduled meetings a Transaction Reports and Analysis Centre (AUSTRAC). year together with two strategic planning conferences, The Credit Union’s policy on corporate governance, to and approves via email or other correspondence ‘out of meet these regulatory requirements and establish best session’ items that require a more immediate response. practice, is formulated by the Board of Directors based Typically a Board meeting would review the monthly on the requirements and key principles of the Prudential and year to date financial results and key performance Standard APS 510 Governance as they apply to the indicators, make decisions on resolutions and new policies, Credit Union. note progress on projects, discuss CEO and Executive Role of the Board Management’s departmental reports and endorse Board Committee reports. The Board is responsible for the overall corporate governance of the Credit Union including formulating Executive Committee its strategic direction, approving and monitoring the The Executive Committee’s role is to plan, manage and co- business plan, creating policies, assessing risk, ensuring ordinate the agendas and timetables of the Board meetings compliance, establishing and monitoring the achievement and strategic planning activities. This committee comprises of the Credit Union’s goals. the Chairman of the Board, the Deputy Chairman and Chief The Board has delegated responsibility for the operation Executive Officer. and administration of the Credit Union to the Chief Executive Officer (CEO) and the Executive Management Renewal Committee team. The Renewal Committee’s role is to maintain the Credit Composition of the Board Union’s Corporate Governance, Fit and Proper, Board Renewal and Performance Evaluation policies and initiate The names of the Directors and their qualifications are and conduct the procedures that flow from these policies. set out later in the Directors’ Report. The committee comprises at least two Directors. The The Constitution sets out the size and composition of Chairman of the Renewal Committee is normally a senior the Board. The Board comprises seven independent Director. The Committee is assisted by the Manager, non executive Directors. A Director must retire from office Human Resources & Premises. 51st Annual Report 2010 3 Audit Committee Operational Risk Management Committee (ORMC) The Audit Committee has specific responsibilities relating The ORMC meets at least monthly and is responsible to policy development, financial accounting and reporting for enabling Executive Management and the Board to processes, internal and external audit processes, risk implement an effective Operational Risk Management management (in conjunction with the Risk Committee), and Framework and to ensure that the Board receives whistleblower monitoring. The Audit Committee has free regular reporting and updates relating to operational and unfettered access to senior management, the Internal risk management matters, thereby fulfilling the Board’s Auditor, the External Auditor and the heads of all risk oversight responsibilities in respect to operational management functions. The committee comprises three risk management. The committee reviews, monitors, Directors, assisted by the Internal Audit Manager. interrogates and reports to the Executive and Board on the information contained within the Credit Union’s operational Risk Committee risk management system “WORMS” (Web-based The Risk Committee’s role is to formulate the Credit Operational Risk Management System), with particular Union’s risk appetite and strategy, develop policies and reference to KRI information. plans to ensure the Credit Union’s risk strategy is complied Strategic planning with, and to monitor compliance with those policies. The risk management areas overseen by the Committee The Board and Executive Management meet twice a year include, but are not restricted to, market, liquidity, credit, (December and May) to plan the strategic direction of the strategic, funding and operational risk. The committee Credit Union by the establishment of long and medium comprises three Directors assisted by the Head of term goals and objectives. The progression of these goals Finance and Operations, the Head of Credit and the and objectives are reviewed through the course of the plan Compliance Manager. and are monitored throughout the year to ensure the Credit Union remains on track to deliver the best possible financial Remuneration Committee offering to our members. The Remuneration Committee is responsible for overseeing Ethical standards the establishment and regular review of the Credit Union’s Remuneration Policy, including assessment of the All Directors, Managers and Staff are expected to act with