Directors’ Report for the year ended 30th September 2011
ANNUAL REPORT 2010 - 11
Invitation to 2011 Annual General Meeting
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Mission Statement
Naas Credit Union, Striving to improve the economic and social well being of our community.
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Invitation from Secretary 4
Agenda of Meeting & Elections 5
Rule Changes 6
Chairman’s Report 7
General Manager’s Report 9
Committee Reports 10
Car Draw 14
Youth Development 15
Supervisors Report 16
Board of Directors Report 17
Independent Auditors’ Report 18
Financial Statements 19
Pictures of Events and Winners 31
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2011 AGM invitation. 6th December 2011 at 8pm Sharp Ballroom, Osprey Hotel, Devoy Quarter, Naas
Dear Member,
It is my pleasure to welcome you as a member of Naas Credit Union to our Annual General Meeting for 2011.
The meeting will take place on the 6th of December 2011 at 8pm in the Osprey Hotel, Naas. The agenda for the meeting is on the following pages along with the fi nancial statements for your Credit Union. I would encourage you to attend the meeting to exercise your democratic control over proceedings.
The Annual General Meeting is open to all members of Naas Credit Union; those members who are over 16 years of age and who hold more than €10.00 in their share account on the 1st November 2011 are entitled to vote at the meeting.
I look forward to seeing as many members as possible at the meeting.
Yours sincerely David Farrell Secretary, Naas Credit Union.
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Agenda of the Meeting & Elections: Nominating Committee report
1. Acceptance of representatives of members that The role of the nominating committee is to are not natural persons ensure that at least one candidate is available for each vacancy for which an election is to be held 2. Ascertainment that a quorum is present at the annual general meeting. On your behalf 3. Adoption of standing orders we thank the retiring directors and members of 4. Reading, approval (or correction) of the minutes the Board and Supervisory committee for their contribution over the years and wish them the for AGM 2010 very best for the future. 5. Report of the Board of Directors The Credit Union is a voluntary organization and 6. Report of the Treasurer and consideration of the needs the support of its members. We would accounts encourage anybody who is interested in getting involved to contact the Credit Union. 7. Report of the Auditor 8. Report of the Supervisory Committee Nomination forms for the above open positions 9. Declaration of a dividend are available in the Credit Union office, 20 10. Report of the Committees North Main Street, Naas. Nominations must be received in writing and signed by the nominee a. Credit Committee and by two members of Naas Credit Union. The b. Credit Control Committee closing date for receipt of nominations is 5pm c. Membership Committee on 29th November 2011. d. Marketing Committee Election procedure: e. Nominating Committee The election will proceed in accordance with 11. Amendments to standard rules Standing orders 2-4 and rule 138 of the Credit 12. Consideration and approval of motions Union. 13. Appointment of tellers Change of Auditor 14. Elections a. Auditor The Board of Directors of Naas Credit Union will be recommending to the members a change of b. Supervisory committee Auditor to Diarmaid O Keeffe, of MKO Partners. c. Board of Directors 15. Any other business Open positions 16. Announcement of election results Auditor 17. Close of meeting - John P. Greely and Company eligible for re- Election The members assembled at any Annual General - Diarmaid O Keeffe, MKO Partners seeking Meeting may suspend the Order of Business upon a Election two thirds (2/3) vote of the members present at the meeting. Supervisory Committee - 1 Open position, Tony Burke, Eligible for Re- Members over 16 with a share balance of over election €10.00 have the right to vote at the meeting. Board of Directors - No Open position
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Rule Changes
AMENDMENTS TO STANDARD RULES PROPOSED BY THE BOARD OF NAAS CREDIT UNION
The Board of Directors of Naas Credit Union amends Rule 9 (2) by substituting “fifteen” where it appears and replacing it with “eleven”. The new rule would read
(2) At the time of adoption of these rules, the board of directors shall consist of eleven members; all of whom shall be members of the Credit Union
AMENDMENTS TO STANDARD RULES ARISING FROM LEAGUE AGM 2011
Resolution No. 4 Resolution No. 7
That this Annual General Meeting agrees to amend That this Annual General Meeting agrees to amend Rule 1 of the Standard Rules for Credit Unions Rule 136 (2) of the Standard Rules for Credit Unions (Republic of Ireland) by the deletion of “and Financial (Republic of Ireland) by the insertion of “a minimum Services Authority” where it appears in the definition of” so to read as follows: of “Bank” so as to read as follows: (2) The nominating committee shall consist of a “Bank” means the Central Bank of Ireland via the minimum of three members, at least one of whom office of the Registrar of Credit Unions; shall be a director.
Resolution No. 5 Resolution No. 8
That this Annual General Meeting agrees to amend That this Annual General Meeting agrees to amend Rule 1 of the Standard Rules for Credit Unions Rule 152 (2) (b) of the Standard Rules for Credit (Republic of Ireland) by the insertion of the following Unions (Republic of Ireland) by the insertion of “civil definition of “civil partner”: partner,” after spouse where appearing in line 1 so as to read as follows: “civil partner” has the meaning assigned to it by the Civil Partnership and Certain Rights and Obligations (2) None of the following persons shall be qualified of Cohabitants Act, 2010; for election as auditor of the Credit Union:
Resolution No. 6 (b) a parent, spouse, civil partner, brother, sister or child of an officer or voluntary assistant of the Credit That this Annual General Meeting agrees to amend Union. Rule 44 (9) of the Standard Rules for Credit Unions (Republic of Ireland) by the insertion of “civil partner,” after spouse where appearing in line 2 so as to read as follows:
(9) The Credit Union shall not accept from an officer of the Credit Union a guarantee for a loan to another member unless that other member is the officer’s spouse, civil partner, child or parent.
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Dear Member,
It is with pleasure I present to you our 2011 Annual Report. Naas Credit Union is a cooperative organisation which belongs to the people of Naas and surrounding areas. I would like to thank all the members of Naas Credit Union who did business with the Credit Union during 2010/11. It is on the back of that support that this Credit Union, your Credit Union remains strong.
Naas Credit Union is a cooperative comprised of people who save together and lend to each other at a fair and reasonable rate of interest. It is owned by you the members. Naas Credit Union exists only to serve its members and not profi t from their needs.
2011 was a challenging year for the members and by extension for Naas Credit Union. The fi gures for the Credit Union remain fundamentally strong, but certain issues impacted our year end results. Chief among them was the enforced write down on the Irish Life and Permanent Subordinated Bond, this write down was caused by the haircut applied by the Government in requiring Irish Life to meet its capital ratios. The effect of this write down was to halve our dividend.
The challenging fi nancial environment spreads also to our arrears costs and Naas Credit Union takes a cautious and prudent view to ensuring suffi cient provisions are made to cover future loan arrears. Naas Credit Union members continue to repay their loans however some people are experiencing diffi culties. Any member experiencing diffi culties is invited to talk with us at the earliest opportunity.
Members will note that the loans outstanding and savings held in the Credit Union were reduced in 2011, these are trends refl ected in the macro economic situation. Naas Credit Union has in fact increased market share with less of a decline in both fi gures recorded compared to rest of the fi nancial services sector. Naas Credit Union granted loans of 13.37 million to the local community in 2010/11. We have €30 million available to lend to our members next year.
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Members should also note an increase in the membership of Naas Credit Union. We welcome over 1000 people from the community who joined Naas Credit Union last year to benefi t from what we offer in savings, loans and money management. Members can still rely on their local Credit Union for support and are turning to the Credit Union in greater numbers.
I would like to assure our members that their money is safe with Naas Credit Union. As you will see from the enclosed Financial Statements, Naas Credit Union is solvent; holds reserves of 13.3% and has a strong liquidity position. Naas Credit Union is also happy to report to members that no Central Bank lending restrictions apply.
Naas Credit Union continues to report an operating surplus in the year and the Board of Directors propose a dividend of 0.75% on member savings.
In summary, Naas Credit Union is safe, strong and secure.
I would like to thank my fellow Directors and Supervisory committee who served with me in 2010/11. Unfortunately this year we are losing some long serving Directors from the Board, Seamus Leydon, Denis Cronin and Joseph Keane. I would like to wish them all the very best for the future. I would like thank Séan Murray for his leadership of the Credit Union and also the team for their valuable input in serving the members in a professional and caring manner.
Sean Brady Chairman of the Board
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Dear Member,
I would like to thank you for the support and continued trust you have placed with Naas Credit Union during the last year. 2010/11 has been a year characterised by signifi cant media reports about Credit Unions and their stability and viability. However, this has not dampened your enthusiasm for what Naas Credit Union offers. We are humbled and invigorated by your continued trust and support.
As you can see from the Financial Statements, Naas Credit Union is in a strong position and will continue to be prudent and cautious in protecting your savings. Our approach to lending is to ensure we take a total view of the borrowing member and while assessing ability to repay we are mindful of our role to facilitate lending. There is a diffi cult balance between the saver and borrower which we always try to maintain.
Members borrowing from Naas Credit Union is vital to our continued success and ultimately increasing the dividend rate. We want to become the preferred lender for personal loans to more of our members. Naas Credit Union is the cheapest lender in Naas. I would ask that members help us to “spread the word” about the great rates available from Naas Credit Union, where you can be guaranteed your loan application with be dealt with personally, you will have an answer within 24 hours and we have over €30 million available to lend.
Naas Credit Union offers a broad range of loan types. Our unbeatable value loans are available for cars, home improvements, students or any other personal borrowing requirement. In 2011 we identifi ed the substantial costs to households of back to school and winter heating as non- discretionary expenses. To support members in making these costs more affordable we introduced a special loan rate of 6.21% APR. Borrowing €1,000 at this rate over 1 year costs only €32.88 in interest for members.
We are working hard to increase the ways members can “do business” with Naas Credit Union. Members can already avail of a number of tools from Naas Credit Union to support household budgeting and general money management through using your CU Cash account. Our online accounts service allows you to take complete control of your fi nances. Information about what we can do for you is available from our friendly staff or connect with us online, at www.naascu.ie and on facebook at www.facebook.com/naascreditunion.
It is an honour to lead my team in the best interests of members. The team is working hard to continue our commitment to provide excellent service to members and to build a culture of continuous improvement. I would like to thank my team for continuing to provide an excellent level of service and supporting the objectives of the Credit Union and the Board of Directors.
Séan Murray General Manager
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Credit Committee Report
The function of the Credit Committee is to ensure that the lending policy of the Credit Union is adhered to at all times. The Credit Committee signs off on loan applications that were approved by the Lending Offi cers in accordance with Rule 45. In addition, the Credit Committee reviews all loan applications that were refused and all loan applications that are required to be presented to the Board of Directors.
On behalf of the Credit Committee of Naas Credit Union, I am pleased to report that the Credit Committee met monthly during the fi nancial year 2010/2011. During the past year 4,240 loans were issued, totalling €13,376,306. Your Credit Union always works to assist the Members with their application’s. Individual applications are judged entirely on their own merits. The Credit Union takes an objective and fair view with all loan applications.
The Board of Directors of the Credit Union and the Credit Committee would like to increase signifi cantly the amount that members borrow from the Credit Union. Therefore I would urge you all to continue to see Naas Credit Union as your favoured fi nancial institution when it comes to your borrowing needs. Indeed, in the current economic climate, there can be diffi culty in obtaining credit from many other institutions, however Naas Credit Union is pleased to be in a position to be able offer loans to our members.
Naas Credit Union is able to meet many of the needs of our members and can offer loans for: students, education, home improvements, holidays, cars and debt consolidation.
The members of the Credit Committee would like to express our thanks to the staff and the management of the Credit Union, who through their various roles, assist the Committee in carrying out its function.
Finally, I wish to express my sincere gratitude to my colleagues on the Credit Committee, William O’ Donovan, David Farrell and Harold Hannigan who continue to give freely of their time to the committee.
Denis Cronin Chairperson Credit Committee
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Credit Control Committee Report
The objective of the Credit Control Department is to monitor all loans in arrears and proactively engage with members who may be experiencing restricted fi nancial situations. Then, in conjunction with the member, work towards achieving an affordable and sustainable loan repayment agreement that enables the member to honour their fi nancial commitment to Naas Credit Union.
The general economic position of the country and community continues to remain challenging for many members. However, in the main, members have demonstrated their commitment to their Credit Union and continue to repay and manage their loan repayments.
The challenging and eventful times have had an impact on members repayment abilities and this is refl ected in the accounts. Bad debts charged off during the year totalled €609,586 and bad debts recovered over the year amounted to €117,099. The Credit Control department remains committed to recovering all charged off funds both by continuing internal endeavours and also through legal proceedings when necessary. This is a slow process but it is the Credit Union’s intention to recover charged off loans regardless of the time frame involved.
The Credit Control department strongly believes in, and promotes a “here-to-help” policy. We would actively encourage any member who maybe experiencing diffi culties in achieving agreed loan repayments to contact us. Members can be assured of a confi dential and non-judgemental approach and a commitment that the Credit Union shares their desire to agree to a level of repayments that are affordable. The department will endeavour to facilitate members wherever possible.
I would like to take this opportunity to thank my fellow Directors, the Management, Darragh, Elaine & Patricia in the Credit Control team and all the Staff of the Credit Union for their dedication and work throughout the year.
Committee Members : Tim Ryan, Michelle Killian, Peter Fullam, Seamus Leydon. Tim Ryan. Chairperson. Credit Control Committee.
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Membership committee report
2011 saw another positive year for growth in membership of Naas Credit Union. The membership committee approved 1,056 new members in the year. This fi gure was split between 598 Adults and 458 Juveniles. This increase brings the total membership of Naas Credit Union to 17,602 adult Members and 3,033 Juvenile members.
We would like to welcome all the new members to Naas Credit Union.
Last year we announced our intention to work with the local schools to establish savings schemes. We are delighted to be working with 7 primary schools this year having added 3 new schools from September 2011. We hope that, by encouraging a regular savings habit with young children, we can help to establish a future of saving for them too. The school initiative will set the Credit Union in the minds of people as they grow and it should deemphasize the image of the banking movement as the only local fi nancial institution.
The Membership of our Credit Union continues to provide the bedrock of our success. Membership is voluntary and open to all who live and/or work within the common bond. The Common Bond of Naas Credit Union Limited is residence or employment in the Parish of Naas, residence in any of the Parishes of Caragh, Sallins, Kill, Eadestown, or Ballymore Eustace or residence within a radius of (5) miles of the Town Hall, Naas.
Members of Naas Credit Union enjoy the benefi ts of our Credit Union by saving together and being able to borrow at a very competitive rate of interest. Members can also avail of our many services, CU Cash Card, CU Online to name just a few.
If you know of anyone who is eligible to join Naas Credit Union, why not refer them into our membership. To open an account with us, applicants will be required to provide:
• Proof of Address in the form of a recently issued utility bill/bank statement. • Photographic identifi cation by way of a Driving Licence / Passport • Proof of PPS number
If the applicant cannot provide any of the above they can call us on 045-879622. We will be glad to help in advising what can be accepted in order to open an account.
Tim Ryan Ger Dooley Membership Committee
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Marketing Committee report
The year gone by was both demanding and uncertain, refl ecting the very diffi cult economic situation in Ireland and, indeed, in Europe.
As a result, the Marketing committee recognised that increased investment in marketing was necessary in order to achieve our on-going marketing objectives – which can be summarised as follows:
• To strengthen the identity and profi le of Naas Credit Union in the local community • To reassure members and potential members that Naas Credit Union is Safe, Strong and Secure • To increase our membership and encourage greater use of the competitive services we offer in savings, loans and money management.
We believe that the marketing programme contributed to positive progress in achieving these objectives. Among the highlights of the programme were the innovative open week in May, the rebranding project to standardise our image and identity in print, online and in our retail offi ce, the drive to increase members in our schools saving scheme and selective press advertising.
Side by side with these, we maintained those elements of our marketing which have shown success in the past such as charity involvement, third level education bursary and direct mailing of members with relevant offers. We also increased our use of local radio and press to publicise, through press releases and interviews, the benefi ts that we offer in savings, loans and money management.
For the coming year our marketing objectives remain unchanged with a priority to increase loans to members; we have signifi cant funds to lend, approx. €30 million.
My thanks to the members of the Marketing Committee who gave freely of their time throughout the year – Seamus Leydon, Gerard Dooley and Sean Murray.
Aidan Morrison Chairperson Marketing Committee
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Naas Credit Union Monthly Car Draw
The Naas Credit Union Car Draw is now in its 13th year and has continued to grow each and every year. Since the draw started in 1998, 176 lucky members have driven away with a brand new car.
The prizes in the monthly car draw are as follows: Aisling Hedderman being presented with her prize by Sean Murray, Manager in the April Car Draw 1st Prize - A Toyota Yaris or €12,000 2nd Prize - €3,000 3rd Prize - €1,500
Entry into the Car Draw is €38 per annum which is deducted from Shares at the end of June each year. Your subscription in the Car Draw will automatically roll over into each subsequent year unless you tell us otherwise.
Car Draw entry forms are available in the Credit Union Offices or Stephen/Antoinette Daly being presented with their can be downloaded from our website, www.naascu.ie car from the May Car Draw
Car Draw Account October 2010 to September 2011 € € Opening Balance 140,319 Member Entry Fees 207,711 Interest Earned During the Year 2,237 Less Cost of Prizes 200,450 Closing Balance 149,817 Maria Haden being presented with her prize by Hazel Cowley from the April Car Draw
Car € 3,000 € 1,500 Jun-10 Catherine Nolan Neil Mc Garry Oliver Hennessy Jul-10 Fergus Kavanagh Alan Cooke Donal Bracken Aug-10 Margaret Murphy Martin O’Reilly Gerard Lawlor Sep-10 Mary Sheil Carmel Murran Maureen Creighton Oct-10 Katie Jane Naughton Leanne Dignam Mary Byrne Nov-10 John Paul Kelly Noel Garvey Krzystof Rachwal Dec-10 Ger Halligan Noel Behan Thomas Hogan Jan-11 Mark Cunningham Majella Boyle Kathleen Robinson Feb-11 Anne Hennessy Patrick Burke Adrienne O’Connor Mar-11 Miriam Mullen Michelle Campbell Anthony Gallagher Apr-11 Emma Gleeson Aisling Hedderman Maria Haden May-11 Stephen/Antoinette Daly John Joseph Mc Donnell Geraldine Fitzsimons
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Naas Credit Union – Supporting the young people of Naas
Naas Credit Union believes that it is vital to support the young people of Naas whatever way possible, so that they can contribute to the local community in a positive way and make it a better place for all. There are a number of ways in which we support and help to develop the young people of Naas.
Annual Third Level Bursary • In 2009, Naas Credit Union started the school savings scheme, with Ballycane NS, Killashee • Each year, we award a Bursary to one student School and Sallins NS all participating. from the local second level schools, to assist them • In 2010, Scoil Bhride joined the scheme. with college expenses. The Bursary is granted to • In 2011, Ballymore Eustace NS, Rathmore NS and the student for 3 years (€2000 per year), so in any Caragh NS all joined the scheme. given year, Naas Credit Union is supporting 3 local students. Art Competition
School Savings Schemes • The Art Competition is open to all schools (primary and secondary) in our common bond, and each • There are many benefits of the School Savings year there is a great level of participation. Naas Scheme, which has been in operation since 2009; Credit Union chooses winners from each category - We provide a convenient way for our younger to go forward to the next level of the competition. members to join and use Naas Credit Union, as The competition goes all the way to national level, we come to their school to collect savings each and so is a great platform for budding artists. week. - The scheme has helped our younger members Schools Quiz to develop good savings habits, which will hopefully stay with them for life. • The Schools Quiz is open to all primary schools - The schools benefit from our “double dividend” in our common bond, and proves to be a fun, scheme – for every €1 paid out in dividend yet educational event each year. The winners of to members of the school scheme, Naas the Naas Credit Union level of the competition go Credit Union will match this in a donation to the on to participate at Chapter level, with the chance school; minimum donation of €500 per school to go on to the national level of the competition.
Hazel Cowley presenting the cheques to Kilashee Multi Denominational Schools and Scoil Bhride, Naas for participating in the Schools saving scheme.
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The Supervisory Committee held regular meetings throughout the year and as defined by the Credit Union act 1997 completed all statutory duties.
We attended all meetings held by the Board of Directors and also all Car Draws.
As required by the Credit Union Act 1997 we held four meetings with the Board of Directors to assess their performance. We are satisfied that all duties and responsibilities have been carried out in accordance with the Rules and Regulations as set down in the Credit Union Act 1997.
As part of the Verification of Members Passbooks this year, we sent out 1945 Audit Letters to Members. We received a response of 1021.Members who disagreed amounted to 42.The response is slightly up on last year by approx 1.3 per cent.We would like to see this trend continue as it is very important to return the Verification Letter.
All disagreements were addressed and the Members in question were contacted and all statements returned agreed with the final outcome.
During the year we also verified
• Petty Cash • Cheque Disbursements • Investments • Trial Balances • Sample of Loan Applications • Prudential report.
We checked the monthly register of new Members. We checked the Policies of NCU and found them up to date as required. We attended the Supervisor’s Forum.
We would like to take this opportunity to thank the Directors, Management and Staff for their co-operation and assistance throughout this year.
I would like to thank most sincerely my fellow Supervisors Lynn and Andy for their help, dedication and time.
Tony Burke Chairman of the Supervisory Committee
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Statement of Directors’ Responsibilities
The Credit Union Act 1997 (as amended) requires The directors confirm that they have complied with directors to prepare financial statements for each the above requirement in preparing the financial financial year which give a true and fair view of the statements. state of affairs of the Credit Union and of the income and expenditure of the Credit Union for that period. In The directors are responsible for keeping proper preparing those financial statements the directors are accounting records which disclose with reasonable required to: accuracy at any time the financial position of the Credit Union and which enables them to ensure that - select suitable accounting policies and apply them the financial statements comply with the Credit Union consistently; Act, 1997 (as amended). They are also responsible - make judgements and estimates that are for safeguarding the assets of the Credit Union and reasonable and prudent; hence for taking reasonable steps for the prevention - prepare the financial statements on the going and detection of fraud and other irregularities. concern basis unless it is inappropriate to presume that the Credit Union will continue in business.
Safety, Health and Welfare at Work Act 2005
The well being of the Credit Union’s employees is safeguarded through the strict adherence to health and safety standards. The Safety, Health and Welfare at Work Act 2005 imposes certain requirements on employers and the Credit Union has taken the necessary action to ensure compliance with the Act, including the adoption of a safety statement.
Statement of Supervisory Committee’s Responsibilities
The Credit Union Act 1997 (as amended) requires the appointment of a Supervisory Committee to oversee directors in the performance of their functions, examine books and documents of the Credit Union and verify a sample of members’ balances.
On behalf of the board
• Treasurer - Aidan Morrison • Director - John Nolan
Date: 10th November 2011
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We have audited the financial statements of NAAS assessment of the significant estimates and judgements CREDIT UNION LIMITED for the year ended 30th made by the directors in the preparation of the financial September 2011 which comprise the Income & statements, and of whether the accounting policies Expenditure Account, the Balance Sheet and the are appropriate to the Credit Union’s circumstances, consistently applied and adequately disclosed. related notes. These financial statements have been prepared under the accounting policies set We planned and performed our audit so as to obtain all out in the Statement of Accounting Policies. the information and explanations which we considered necessary in order to provide us with sufficient evidence Respective Responsibilities of Directors and to give reasonable assurance that the financial statements Auditors are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion The directors’ responsibilities for preparing the Annual we also evaluated the overall adequacy of the presentation Report and the financial statements in accordance with of information in the financial statements. applicable law and the accounting standards issued by the Accounting Standards Board and promulgated by the Institute of Chartered Accountants in Ireland (Generally Opinion Accepted Accounting Practice in Ireland) are set out in the In our opinion the financial statements: Statement of Directors’ Responsibilities. - give a true and fair view of the state of the Credit Our responsibility is to audit the financial statements Union’s affairs as at the 30 September 2011 and of in accordance with relevant legal and regulatory its Income & Expenditure for the year then requirements and International Standards on Auditing (UK ended; and and Ireland). - have been properly prepared in accordance with Generally Accepted Accounting Practice in Ireland We report to you our opinion as to whether the financial and in accordance with the requirements of the Credit statements give a true and fair view and are properly Union Act, 1997 (as amended). prepared in accordance with Generally Accepted Accounting Practice in Ireland and the Credit Union Act, We have obtained all the information and explanations we 1997 (as amended). We also report to you whether, in our considered necessary for the purposes of our audit. In our opinion, proper accounting records have been kept by opinion proper accounting records have been kept by the the Credit Union. In addition, we state whether we have Credit Union. The financial statements are in agreement obtained all the information and explanations necessary with the accounting records. for the purposes of our audit and whether the Credit Union’s financial statements are in agreement with the In our opinion the information given in the Directors’ accounting records. Report and Annual Report is consistent with the financial statements. We read the other information contained in the Annual Report and consider whether it is consistent with the Emphasis of matter - Valuation of premises and the audited financial statements. This other information presentation of the financial statements on a true and comprises the Directors’ Report, the Treasurer’s Report, fair basis the Supervisory Committee Reports and the Credit Committee Report. We consider the implications for our In forming our opinion we have considered the adequacy report if we become aware of any apparent misstatements of the disclosures in note 6 to the financial statements or material inconsistencies with the financial statements. concerning the carrying value of the Credit Union’s Our responsibilities do not extend to any other information. premises. While our opinion is not qualified, we wish to draw this matter to your attention. Basis of Opinion We conducted our audit in accordance with International John P. Greely Standards on Auditing (UK and Ireland) issued by the ______Auditing Practices Board. An audit includes examination, John P. Greely for and on behalf of on a test basis, of evidence relevant to the amounts and John P. Greely & Company disclosures in the financial statements. It also includes an Chartered Accountants & Registered Auditors Mill House, Millbrook, Naas, Co. Kildare.
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John P. Greely ______John P. Greely for and on behalf of John P. Greely & Company Chartered Accountants & Registered Auditors Mill House, Millbrook, Naas, Co. Kildare.
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Income & Expenditure Account for the year ended 30th September 2011
2011 2010 € € INCOME Interest on Members’ Loans 2,638,408 2,586,108 Investment Income 1,421,523 1,362,133 NET INTEREST INCOME 4,059,931 3,948,241
Other Income Schedule 1 xxxx5,679 xxx(3,807)
TOTAL INCOME 4,065,610 3,944,434
EXPENDITURE Salaries (793,362) (770,207) Administration Expenses Schedule 2 (949,384) (793,706) Depreciation (178,295) (109,652) Increase in Provision for Bad and Doubtful Debts (584,143) (702,370) Bad Debts Recovered 117,099 114,745 Bad Debts Charged Off (609,586) (557,279) Deficit on disposal of investments Note 04 x(503,582) xxxxxxxx-
TOTAL EXPENDITURE (3,501,253) (2,818,469)
EXCESS OF INCOME OVER EXPENDITURE FOR THE YEAR 564,357 1,125,965
Undistributed Surplus carried forward Schedule 3 1,045,004 1,004,938
TOTAL 1,609,361 2,130,903
Less: Transfer to Statutory Reserve Note 09 (56,436) (112,597) Less: Transfer to Regulatory Reserve Note 10 - (204,248) Transfer from / (to) Non Distributable Reserve Note 11 x140,088 (109,923)
DISTRIBUTABLE RESERVE Note 12 1,693,013 1,704,135
The financial statements were approved by the board on 10th November 2011 and signed on its behalf by • Treasurer - Aidan Morrison • Director - John Nolan • Supervisor - Tony Burke
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Balance Sheet for the year ended 30th September 2011
2011 2010 € € ASSETS
Cash and Balances at Bank 3 482,326 898,206 Deposits and Investments 4 43,534,895 43,501,070 Loans to Members 5 28,167,176 29,749,995 Tangible Fixed Assets 6 2,447,778 2,514,664 Other Assets 1,705,419 1,822,544
TOTAL ASSETS 76,337,594 78,486,479
CURRENT LIABILITIES Creditors and Accruals (655,183) (620,000) Savings Stamps in Issue (172,314) (182,640)
TOTAL ASSETS LESS CURRENT LIABILITIES 75,510,097 77,683,839
FINANCED BY:
Members Shares 64,932,011 67,010,979 Statutory Reserve 9 6,737,309 6,680,873 Additional Regulatory Reserve 10 1,167,775 1,167,775 Revenue Reserves Non Distributable Reserve 11 979,989 1,120,077 Distributable Reserve 12 1,693,013 1,704,135
TOTAL LIABILITIES 75,510,097 77,683,839
The financial statements were approved by the board on 10th November 2011 and signed on its behalf by • Treasurer - Aidan Morrison • Director - John Nolan • Supervisor - Tony Burke
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Schedule 1 - Other Income for the year ended 30th September 2011
2011 2010 € € OTHER INCOME
Commission 5,507 (4,992) Fees 131 603 Miscellaneous Income xxx41 xx582
TOTAL AS PER INCOME AND EXPENDITURE ACCOUNT 5,679 (3,807)
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Schedule 2 - Administration Expenses for the year ended 30th September 2011
2011 2010 € € EXPENDITURE
Treasurers Honorarium 2,500 2,713 Rent and Rates 25,245 25,670 Lighting, Heating and Cleaning 12,139 13,147 Repairs and Renewals 31,817 20,682 Security 8,774 10,310 Printing and Stationery 26,355 31,929 Postage and Telephone 21,106 26,053 Promotion and Advertising 104,340 37,164 Training and Education 11,764 3,925 Convention Expenses 3,293 7,150 AGM Expenses 15,000 4,444 Travel and Subsistence 5,794 6,092 Bank Charges 17,191 18,929 Audit Fee 14,520 14,391 General Insurance 27,643 27,245 Share and Loan Insurance 231,443 175,531 Pension 86,440 96,340 Legal and Professional Fees 113,805 91,923 Computer Maintenance 73,801 79,251 Miscellaneous Expenses 11,923 15,556 Affiliation Fees 78,061 76,844 Regulatory Levy 8,278 7,488 Subscriptions 280 929 Loss on disposal of fixed assets 13,747 - ATM Fees 004,125 ------
TOTAL AS PER INCOME AND EXPENDITURE ACCOUNT 949,384 793,706
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Schedule 3 - Undistributed Surplus Carried Forward for the year ended 30th September 2011
2011 2010 € €
Surplus carried forward before payment of dividend 1,704,135 2,277,721 Dividend paid (659,131) (1,272,783)
UNDISTRIBUTED SURPLUS CARRIED FORWARD AS PER INCOME AND EXPENDITURE ACCOUNT 1,045,004 1,004,938
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Notes forming part of the Financial Statements for the year ended 30th September 2011
1. Statement of Accounting Policies above have been applied to the various classes of assets from 1st October 2010, the beginning of the The following accounting policies have been accounting period. applied consistently in dealing with items which are considered material in relation to the Credit Union’s 1.4. Pensions financial statements. The Credit Union operates a defined benefit pension 1.1. Accounting convention scheme for employees. The assets of the scheme are held separately from those of the Credit The financial statements are prepared under the Union. historical cost convention. The pension costs charged in the financial statements represent the contribution payable by the Interest on members’ loans is recognised when Credit Union during the year. payment is received as specified in Section 110 (1)(C)(i) of the Credit Union Act, 1997 (as 1.5. Bad and Doubtful Debts amended) (i.e. on a cash basis). Investment income is recognised on an accruals basis. Bad debts written off and bad debts recovered are included in the Income and Expenditure Account 1.2. Basis of preparation in the year in which they are written off/recovered. A provision for doubtful debts is made against loan The financial statements have been prepared on balances in arrears as at the year end based upon the going concern basis and in accordance with the number of weeks a loan is in arrears and on a the accounting standards generally accepted in detailed analysis of the loan book at the year end. The Ireland. Accounting Standards generally accepted in movement in this provision in the year is included in Ireland in preparing financial statements giving a true the Income and Expenditure Account. and fair view are those published by the Chartered Accountants Ireland and issued by the Accounting 1.6. Investments Standards Board. It is the policy of Naas Credit Union to invest 1.3. Tangible fixed assets and depreciation members’ funds only in investments carrying a capital guarantee with a fixed maturity date and to Tangible fixed assets are stated at their historical hold all such investments to their maturity dates. cost less the appropriate depreciation charge which is calculated to write this cost off over the expected Investments are, therefore, stated at original cost. useful lives of each class of tangible fixed asset at the following rates: 1.7. Distribution of Surplus
Computer - 25% Straight Line Dividends are distributed from the Cumulative Fixtures & Fittings - 12.5% Straight Line Surplus Available for Distribution after taking account Office Equipment - 20% Straight Line of a reduction for the value of accrued income not Premises - 2% Straight Line receivable within twelve months of the balance sheet date. During the year the directors reviewed the Credit Union’s fixed assets depreciation basis and considered it appropriate to change the method by which depreciation was calculated. The revised rates
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2. Cash Flow Statement 2011 2010 € € Opening Cash and Investments 44,411,794 41,757,956 RECEIPTS Members’ Shares 35,534,199 33,352,429 Members’ Loans Repaid 14,374,983 14,087,777 Members’ Loan Interest Received 2,638,408 2,586,108 Investment Income Received 1,421,523 1,362,133 Bad Debts Recovered 117,099 114,745 Other Receipts 5,679 (3,807) Decrease / (increase) in Prepayments xx117,125 xx171,860
TOTAL 54,209,016 51,671,245 DISBURSEMENTS Members’ Shares Withdraw 37,623,492 30,138,701 Members’ Loans Granted 13,376,307 15,638,745 Dividends Paid 659,131 1,272,783 Operating Expenses 2,338,585 2,121,192 Deficit on disposal of investments 503,582 - Fixed Assets Purchased 125,155 16,522 (Increase) in Creditors and Accruals xx(35,180) (170,536) 54,591,071 49,017,407
Closing Cash and Investments 44,029,739 44,411,794
3. Cash and Balances at Banks 2011 2010 € € Cash at Bank and in Hand 701,994 898,206 Bank Overdraft (219,668) xxxxxxx- x482,326 898,206
4. Deposits and Investments 2011 2010 € € Investments at cost 43,547,413 43,513,588 Provision against fall in other Bank Bonds (12,518) (12,518) 43,534,895 43,501,070
Included in investments is a Goldman Sachs Bond Deficit on disposal of investments which matures at par value in 2015. This bond had The deficit on disposal of investments of €503,582 a market value of €877,956 at 30th September 2011 resulted from the disposal of a subordinated bond (2010 - €920,697), which was less than its cost. under a “Burden Sharing Exercise” carried out by Irish The bond is carried in the financial statements at its Life & Permanent at the behest of the Minister par value of €978,000 on the basis that par value for Finance. This was the only investment of this asset of the bond is guaranteed on maturity. class held within the investment portfolio of Naas Credit Union.
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2011 2010 5. Loans to Members 2011 2010 € € € € Opening Cash and Investments 44,411,794 41,757,956 Gross Loans to Members 30,970,604 31,969,280 RECEIPTS Less : Provision for Bad and Doubtful Debts (2,803,428) (2,219,285) Members’ Shares 35,534,199 33,352,429 28,167,176 29,749,995 Members’ Loans Repaid 14,374,983 14,087,777 Members’ Loan Interest Received 2,638,408 2,586,108 6. Tangible Fixed Assets Investment Income Received 1,421,523 1,362,133 Premises Computer Fixtures & Fittings Office Equip Total Bad Debts Recovered 117,099 114,745 € € € € € Other Receipts 5,679 (3,807) Decrease / (increase) in Prepayments xx117,125 xx171,860 Cost At 1 October 2010 3,064,462 420,838 352,118 155,695 3,993,113 TOTAL 54,209,016 51,671,245 Additions 18,522 11,454 1,230 93,949 125,155 DISBURSEMENTS Opening Depreciation (798,914) (360,717) (256,281) (62,537) (1,478,449) Members’ Shares Withdraw 37,623,492 30,138,701 Charge for the year (61,289) (28,349) (44,117) (44,539) (178,294) Members’ Loans Granted 13,376,307 15,638,745 Disposals (NBV) ------(13,747) ------(13,747) Dividends Paid 659,131 1,272,783 Operating Expenses 2,338,585 2,121,192 Net book values Deficit on disposal of investments 503,582 - At 30 September 2011 2,222,781 29,479 52,950 142,568 2,447,778 Fixed Assets Purchased 125,155 16,522 At 30 September 2010 2,265,548 60,121 95,837 93,158 2,514,664 (Increase) in Creditors and Accruals xx(35,180) (170,536) 54,591,071 49,017,407
Opening Balances In line with FRS 11, the Board received an independent During the year the directors reviewed the method by open market valuation of the Premises and carried out a 2011 2010 which depreciation is calculated and concluded calculation of its Value in Use at 30th September 2011 that it was appropriate to reanalyse amounts within the based on the specific guidance provided by FRS 11. The € € fixed asset classes. The opening balances of cost and results of these exercises were an Open Market Valuation Cash at Bank and in Hand 701,994 898,206 depreciation have been reallocated to reflect same. (Net Realisable Value) of €800,000 and a Value in Use of €4,255,804, with the latter being arrived at using Bank Overdraft (219,668) xxxxxxx- Premises conservative assumptions about the future business of x482,326 898,206 The Directors reviewed the value of the Credit Union’s Naas Credit Union. principal Tangible Fixed Asset, its Premises, at the 2011 2010 financial year-end. The Financial Reporting Standards The Net Book Value of the fixed assets in the financial statements at 30 September 2011, based on the Credit € € (FRS) relevant to the recording of Tangible Fixed Assets in the financial statements are FRS 15 and FRS 11. FRS Union’s long established accounting policy, is €2,447,778. Investments at cost 43,547,413 43,513,588 11 states that Tangible Fixed Assets should be stated in Having considered this Book Value, the Net Realisable Value and the Value in Use, the Board concluded that Provision against fall in other Bank Bonds (12,518) (12,518) Financial Statements at no more than their Recoverable Amount. The standard defines “Recoverable Amount” as the Net Book Value of the Credit Union’s Premises, being 43,534,895 43,501,070 the higher of Net Realisable Value and Value in Use. In the below its Value in Use, being less than its Recoverable case of a Premises, Net Realisable Value would normally Amount, therefore, in accordance with FRS 11, the Board be a best estimate of the amount which would be likely concluded that no impairment needed to be accounted to be recovered if the Premises was sold shortly after the for in the Income & Expenditure Account of the Credit estimate was made. Value in Use is a measure of the value Union for the year ended 30 September 2011 in relation to of the Premises to the business which operates from it, in its Premises. this case Naas Credit Union, and this value is calculated by conservatively estimating the future cash flows the The Credit Union’s Auditor agrees with the Board’s Credit Union can expect to generate from its occupation conclusion. of, and doing business from, the Premises.
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7. Ballymore Eustace
Ballymore Eustace expenses are charged under the appropriate headings in the Income and Expenditure Account and are not seperately identified.
8. Pension Contributions
The credit union participates in an industry-wide requirement under section 56(1) of the Pensions Act pension scheme for employees (The Irish League of 1990, the scheme actuary must carry out a separate Credit Unions Republic of Ireland Pension Scheme). valuation every 3 years and produce a funding This is a funded scheme of the defined benefit type, certificate for submission to The Pensions Board with assets invested in separate trustee administered within 9 months of the effective date of the valuation. funds. The purpose of the certificate is to certify whether or not the assets of the scheme at the effective date are An actuarial review of the fund is normally carried sufficient to meet the liabilities of the scheme based out every three years by the Scheme’s independent, on the assumption that the scheme was wound up at professionally qualified, actuary. The actuarial review that date. looks at the past & future liabilities of the scheme. The actuarial review at 1st March 2011 is not due for An actuarial funding certificate, certifying the Scheme completion until end of November 2011. did not meet the statutory minimum funding standard was submitted to the Pensions Board with The last completed triennial actuarial review was an effective date of 1 March 2009. carried out with an effective date of 1st March 2008 using the Projected Unit Credit method. The principal Consequently, the Trustees submitted a new funding actuarial assumption used in the valuation was that proposal, to address the shortfall in funding, to investment return would be 1.25% higher than the the Pensions Board. The submitted funding proposal annual salary increases. The market value of the is designed to ensure that the scheme could scheme’s assets at 1st March 2008 was €67.93m. reasonably be expected to satisfy the funding The actuarial valuation disclosed a past service standard as at 1st March 2019. This funding proposal deficit of €27.34m at 1st March 2008. This actuarial was approved by the Pensions Board. review recommended a long term funding rate of 25.8%. The cost of risk benefits is paid in addition to For the scheme year ended 28th February 2011 the this rate. actuary advised he was reasonably satisfied that, based on the existing funding proposal effective from As a result of the major falls on world stock markets in 1 March 2009, the scheme will satisfy the funding the latter half of 2008 the assets of the scheme as at standard as specified in Section 44 of the Pensions 30th November 2008 had reduced by approximately Act, 1990, at the date of 1 March 2019 specified by 27% since the date of the actuarial valuation. As the the Pensions Board under Section 49(2) (a) of the actuarial review would have assumed a positive return Act for the purpose of the existing funding proposal. on the assets of the scheme into the future it was Please note that in making this statement no account considered prudent to increase the long term funding has been taken of events, i.e. markets changes, rate payable from 1st March 2009 to allow for the occurring after 28th February 2011. The scheme’s investment losses, upon receipt of advice from the Solvency Position in accordance with the aggregate actuary the trustees decided to increase the rate to cover for total Funding Standard liabilities as at 1st 27.5% of pensionable salary. The cost of risk benefits March 2011 was 93% . is paid in addition to this rate. It should be noted that the past few months have It should be noted that the above rate is based on the been a period of significantly adverse experience for long term funding objectives. As a separate all pension schemes and there remains a high level
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of volatility on financial markets. The next effective scheme. Contributions payable to the scheme are date for certification of the adequacy of the funding recognised in the income and expenditure account. proposal is 1st March 2012. Pension costs for the year amounted to €86,440 The scheme is a defined benefit scheme. However, (2010 - €96,340). The contribution rate in respect of the credit union is unable to identify its share of the defined benefit arrangement was 30%, inclusive the underlying assets and liabilities. Consequently, of the employee’s contribution, of pensionable the credit union accounts for its contributions to salaries and this rate will continue until otherwise the scheme as if it were a defined contribution advised by the League of Credit Unions.
9. Statutory Reserve 2011 2010 € €
Opening Balance 6,680,873 6,568,276 Transfer to Statutory Reserves 56,436 112,597 Closing Balance 6,737,309 6,680,873
The transfer to Statutory Reserves is calculated in accordance with Section 45 of the Credit Union Act 1997 (as amended) (Standard Rule 54 for Credit Unions).
10. Additional Regulatory Reserve 2011 2010 € €
Opening Balance 1,167,775 963,527 Transfer to Additional Regulatory Reserve xxxxxxxx- 204,248 Closing Balance 1,167,775 1,167,775
Credit Unions are required to maintain a Regulatory Reserve Ratio of not less than 10% of Total Assets on an ongoing basis with effect from 30 September 2009. The transfer to the Additional Regulatory Reserves has been calculated in accordance with this requirement.
11. Non Distributable Reserve 2011 2010 € €
Opening Balance 1,120,077 1,010,154 Transfer (from) / to Non Distributable Reserve (140,088) 109,923 Closing Balance x979,989 1,120,077
Dividends are distributed from the Distributable Reserve which is calculated after taking account of a reduction for the value of accrued income not receivable within twelve months of the balance sheet date. The Non Distributable Reserve represents the accrued income which is not receivable within twelve months of the balance sheet date. The transfer (from) / to the Non Distributable Reserves has been calculated in accordance with the above.
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12. Proposed Dividends
At 30 September 2011 the Balance Sheet shows Distributable Revenue Reserves of €1,693,013. A dividend of 0.75% is being proposed based on the member shares held throughout the period. Subject to the Dividends being approved at the AGM, Distributable Revenue Reserves will then be allocated as follows:
€ Distributable Revenue Reserves 1,693,013 Proposed Dividends (504,129) Revised Distributable Revenue Reserves 1,188,884
13. Related Party Disclosures
At the year end outstanding loans to directors, key management and close family members amounted to €129,589. All loans have been advanced for a provident or productive purpose.
14. Contingent Liabilities No contingent liabilities existed at 30 September 2011.
15. Post Balance Sheet Events There are no post balance sheet events which require disclosure under FRS 21.
16. Insurance Against Fraud The Credit Union has insurances against fraud in compliance with Section 47 of the Credit Union Act, 1997 (as amended) in the amount of €5,000,000.
17. Rates of Interest Charged on Members’ Loans Loan Type Rate APR Standard Personal 9.50% 9.83% Car 8.25% 8.54% Home Improvement > €10,000 8.25% 8.54% Student 7.50% 7.75% Back To School 6.00% 6.21% Fuel 6.00% 6.21% Business Package 9.50% 9.83% Secured Loan 5.75% 5.91% Social Capital Community Loan 4.75% 4.96%
18. Approval of Financial Statements
The financial statements were approved by the board on 10th November 2011 and signed on its behalf by • Treasurer - Aidan Morrison • Director - John Nolan • Supervisor - Tony Burke
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Poster Competition Schools Quiz Competition
Congratulations to all the winners of the 2011 Two Mile House National School Naas Credit Union Poster competition. Winners of the 2011 Naas Credit Union Schools Quiz A Competition
€ Distributable Revenue Reserves 1,693,013 Proposed Dividends (504,129) Revised Distributable Revenue Reserves 1,188,884
2011 Naas Credit Union Bursary winner Teacher Imy Donovan (left), Sean Murray and Danielle O’Riordan of Naas Credit Union with Two-Mile-House National School A Team members, Ronan Downey, Jack Collins, James McConnell, Grace Conneely winners of the A Section in the Naas Credit Union Schools Quiz in Ballycane School on Friday night, 4th February.
St Laurence’s National School, Sallins Winners of the 2011 Naas Credit Union Schools Quiz B Competition
2011 Naas Credit Union Bursary winner, Edel Pyke with her Parents, Shelia and Kevin at the 2011 Bursary presentation evening. Des Kennedy Memorial Award
Sean Murray (left) and Danielle O’Riordan (right) of Naas Credit Union with teachers Sinead Carroll, Mary Keane, and Aoife Hughes and St Laurence’s National School, Sallins, B Team members, Gemma Robotham, Andrew Flynn, Louis Younge
John Kennedy (left) with Cecil Doyle (right) President of Naas Credit Union presenting the Des Kennedy Memorial Award to the members of the Ballymore Eustace Intermediate GFC Team, Kildare and Leinster Club Champions, 2010, Tom O’Rourke, Jarleth Gilroy, Mark McCarville, Tadhg Grace, pictured at the Ballymore Eustace Person of the Year Awards 2011 organised by the Ballymore Bugle and sponsored by Naas Credit Union and Gallery & Gifts, Ballymore, on Saturday night, 5th February 2011 in the Parish Centre.
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About Naas Credit Union:
In a few words this is what we are about in Naas Credit Union. As a not for profit financial institution, we offer our members [customers] a safe place to save their money. This money we then lend out to other members at reasonable rate of interest who require extra money in the short term.
We aim to bring together the most efficient methods for accessing your money in person or electronically to allow our members do more with the household budget. Naas Credit Union members can access their accounts 24/7 through our website including transferring money directly into or out of your Credit Union account. The team are here to help in a friendly and straightforward way. We will try to avoid using “jargon” and instead stick to the basics of money management.
Our unique structure means that you are the owner of Naas Credit Union and benefit from its use. Connect with us for all the latest news at www. naascu.ie or like us on Facebook at www.facebook.com/naascreditunion.
Naas Office, 20, North Main Street, Naas, Co. Kildare
Tel: 045 879 622 www.naascu.ie
Opening hours
Naas Office Monday to Saturday 09.30 - 17.00 Wednesday 11.00 - 17.00
Ballymore Eustace Office Saturday 10.00 - 12.30
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