BALLAGHADERREEN AND DISTRICT CREDIT UNION LIMITED Main Street, Ballaghaderreen, Co. Roscommon. Phone: 094 9860522 Email: [email protected] Web: www.ballaghcu.com
REPORT & FINANCIAL STATEMENTS FOR THE YEAR ENDED SEPTEMBER 30TH, 2020
OFFICE HOURS Monday, Tuesday & Thursday: 10.00am to 1.30pm, & 2.30pm to 5.45pm Wednesday: 10.00am to 1.15pm Friday: 10.00am to 1.30pm, 2.30pm to 5.00pm, & 5.30pm to 7.45pm. SUPPORTING THE LOCAL COMMUNITY
FREE PRIZES AMONG MEMBERS ATTENDING THE VIRTUAL AGM: 1ST PRIZE - €200 2ND PRIZE - €100; 3RD PRIZE - €50
VOUCHERS FOR LOCAL BUSINESS OF YOUR CHOICE WILL BE GIVEN AS CASH ALTERNATIVE NOTICE AND FORMAL INVITATION OF THE ANNUAL GENERAL MEETING Tuesday, 20th April 2021 at 8pm Virtual AGM 2020 – Notice is hereby given that the 37th Annual General Meeting of Ballaghaderreen & District Credit Union Limited will take place online on Tuesday, 20th April 2021 at 8pm. Pre-registration is required by members. Register at [email protected] . An email with instructions and log in details will be emailed to registered members only. All members are invited to attend.
Denise Deery Secretary, Roscommon Credit Union Ltd.
Due to the nature of COVID-19 and the restrictions in place for public health reasons on organised indoor gatherings in the Republic of Ireland, Credit Unions have been given permis- sion to have their AGMs online. Please note the following in relation to this Virtual AGM: • Members can email [email protected] to receive a registration link - if possible, use the email you have registered with Ballaghaderreen Credit Union for this. • The “Zoom” platform will be used to allow this virtual AGM – each member will be provided with their own unique access link – do not share this with others to allow you to be identified at the Virtual AGM. • Members should register by 8:00pm on Monday 19th of April, 2021. You may have to provide proof of your identity / membership of the credit union including your membership number; • Please submit any questions via email before the AGM. Questions may also be asked on the night via the “Q&A” function in Zoom; • Voting will take place during the Virtual AGM – again this will use the Zoom Platform; and, • Preferably any questions and comments should be submitted before the meeting, but members will also be able to put these forth during the meeting via the Zoom Platform.
Using Zoom: Zoom has a very simple user interface and has become very familiar to the public during the recent COVID-19 event. Zoom ensures security as each registered member will be sent an induvial link and settings will ensure each person can only access from one device. A passcode will also be assigned for the meeting.
Video tutorial for all features of Zoom can be accessed at: https://support.zoom.us/hc/en-us/articles/206618765-Zoom-Video-Tutorials
Online Voting: Voting will take place during the virtual AGM via the Zoom Platform. Thus, you will need to register for and attend the webinar to vote.
At the appropriate time in the agenda, the poll will be launched and will appear on your screen.
The votes will then be collated and will be announced by the chair before the end of the virtual AGM. Company Information
Directors Eoin Buckley – Chairman Kenneth McDonnell Jean Anderson – Vice Chairman Gerald Duffy Denise Deery – Secretary Mary Roddy James Dooney
Board Oversight Committee David Wright Deceased Colm Flannery Jackie Henry Michael Tully - Co Opted
Risk & Compliance Officer Michael O’Grady & Co, Registered Auditors & Accountants.
Internal Auditor: Tony Reilly, Reilly & Co, Chartered Certified Accountants.
Registered Number 406 CU.
Registered Office Main Street Solicitors: Fahy Neilan & Co. Ballaghaderreen Ballaghadereen Co Roscommon. Co. Roscommon.
Auditors RBK, RBK House, Irishtown, Athlone, Co. Westmeath.
Bankers Bank of Ireland, Ballaghaderreen, Co. Roscommon.
INVOCATION
Lord, make me an instrument of Thy peace Where there is hatred, let me sow love; Where there is injury, pardon; Where there is doubt, faith; Where there is despair, hope; Where there is darkness, light; And where there is sadness, joy; O divine Master, grant that I might not so much seek to be consoled as to console; to be understood as to understand; to be loved as to love; for it is in giving that we receive, it is in pardoning that we are pardoned, and it is in dying that we are born to eternal life.
1 Agenda
BALLAGHADERREEN AND DISTRICT CREDIT UNION LIMITED Virtual AGM 20th April 2021 1. The acceptance by the Board of Directors of the authorised representatives of members that are not natural persons 2. Ascertainment that a quorum is present 3. Adoption of Standing Orders. 4. Reading & approval (or correction) of the minutes of previous A.G.M. 5. Chairman’s Address & Report of the Board of Directors. 6. Auditors Report. 7. Consideration of the accounts 8. Declaration of Dividend/Loan Interest Rebate 9. Report of the Board Oversight Committee 10. Report of the Credit Committee Report. 11. Report of the Credit Control Committee. 12. Report of the Membership Committee. 13. Report of the Nomination Committee. 14. Appointment of Tellers. 15. Election to fill vacancies on the Board of Directors. 16. Election to fill vacancies on the Board Oversight Committee. 17. Election of Auditor 18. Announcement of Election Results 19. Amendments to Rules 20. Any Other Business 21. Adjournment or Close Meeting.
2 STANDING ORDERS
1 - VOTING Each member shall be entitled to one vote irrespective of his / her shareholding, in accordance with section 82(2) of the Credit Union Act, 1997 (as amended). 2 - 3 ELECTION PROCEDURE 2 Elections to the Board of Directors, to the Board Oversight Committee and the position of Auditor shall be by majority vote and by secret ballot. Due to the fact that this year’s AGM will be a virtual meeting, voting on motions and elections will be by electronic means. 3 Voting will take place via electronic means during the virtual AGM. Members must attend the webinar to vote. The results will be reviewed by the tellers and announced by the chairman. 4 - 11 MOTIONS 4 Due to the specific difficulties we are facing in holding an Annual General Meeting this year due to COVID-19, the purpose of this year’s AGM is to deal with the essential business of the credit union. This includes reporting to members on the financial status of the credit union, declare a dividend / interest rebate, and elect officers. While all items in the usual Order of Business will be referenced, there will be less interaction than in person. Members will be welcome to submit questions to the board in advance of the AGM. Questions can also be put forth via the “Q&A”function of Zoom during the AGM. The board will address these during the AGM, and same will be included in the minutes of the AGM. 5 Attendees may be elevated to a participant and can then address the AGM and items may be proposed and seconded via the“Raise Hand”function in Zoom. 6 All motions from the floor of the AGM must be proposed and seconded by members present at the AGM and moved by the proposer. If the proposer is absent when the motion is called, the motion shall be deemed to have failed. 7 A proposer of a motion may speak for such period as shall be at the discretion of the chair of the meeting and shall have the right of reply before the motion is put to the meeting for a vote. 8 In exercising his/her right of reply, a proposer may not introduce new material. 9 The seconder of a motion shall have such time as shall be allowed by the chair to second the motion. 10 Members are entitled to speak on any such motion and must do so through the chair. All speakers to any motion shall have such time as shall be at the discretion of the chair. 11 The chair shall have the absolute right to decide at any time when a motion has been sufficiently discussed and may put the motion to the meeting giving the proposer the right of reply before doing so. 12 - 17 MISCELLANEOUS 12 The chair of the board of directors shall be the chair of any general meeting, except where he/she is not available, in which case it shall be the vice-chair, except where he/she is not available, in which case the board shall decide amongst themselves who shall act as chair of any general meeting. 13 The chair may at his/her discretion, extend the privilege of the floor to any person who is not a member. 14 Matters not covered by the Agenda may be introduced under“Other Business”at the discretion of the chair. 15 The chairman’s decision on any matter relating to these Standing Orders or interpretation of same shall be final. 16 No member shall have more than one vote on each question at any general meeting of the credit union or any adjournment thereof irrespective of his/her shareholding or the number of accounts in his/her name in the credit union provided, however, that except in voting at elections, the presiding member shall have a second or casting vote in the event of equality of voting. Voting by proxy shall be allowed only when a member other than a natural person votes through a representative, who is a member of the group, duly authorised in writing for that purpose and accepted as such by the board of directors. 17 Any matter to be decided upon by vote at the AGM shall, unless otherwise expressly provided for by law or the rules, be decided upon by simple majority. 18 SUSPENSION OF STANDING ORDERS Any one of these Orders or all of these Standing Orders may be suspended on a motion to this effect receiving a two-thirds majority of those present and entitled to vote. 19 ALTERATION OF STANDING ORDERS Standing Orders may be amended or altered at a general meeting and only if a motion to this effect has received a two-thirds majority of those present and voting. 20 ADJOURNMENTS Adjournments of the AGM shall take place only in accordance with section 81(1) of the Credit Union Act, 1997 (as amended). 21 RECORDING The meeting will be recorded for the purpose of minute taking.
3 BALLAGHADERREEN AND DISTRICT CREDIT UNION LIMITED CHAIRPERSON’S ADDRESS A.G.M. 2020
Dear Member,
Welcome to this Virtual AGM of Ballaghaderreen and District Credit Union Limited, in this our 37th year, a year of uncertainty and a testing time for all but, thankfully we now have cause for increased optimism and hope for the future. We are currently engaged in a Transfer of Engagement process with another credit union and hope that this process can be concluded in the 2021 financial year.
In the past year, Ballaghaderreen Credit Union has grown its membership by 123, with a total member- ship now of 4561. With interest rates at an all-time low, our income from investments has fallen from €97,950 in 2019 to €68,360 in 2020. As a result of this, our primary source of income now is income generated from interest on loans. We have lent €2,266,270 to our members in 2020. I wish to remind members that WE ARE LENDING, and we actively encourage all members to borrow, where appropriate as the survival of your credit union depends on it. If you are considering taking out a loan in the weeks and months ahead, please do not hesitate to call in or contact the credit union to discuss a loan ap- plication. Loan Applications can also now be largely completed on-line through our website. The Central Bank have directed all credit unions that there are to be no dividends or interest rebates paid for financial year 2020.
In recent years, Ballaghaderreen CU has experienced an unprecedented level of growth in member savings. In some instances we have witnessed members withdrawing sums of money from other financial institutions and placing these funds in their Credit Union account. While we welcome this strong show of confidence in our financial strength and loyalty from our members, this can have a negative effect on new services and product provision and ultimately reduce our ability to effectively service our member needs. So unfortunately we were left with no option but to introduce a savings cap. The reason for this savings cap is that we are bound by Central Bank rules to place 10% of total assets on reserve on our Balance Sheet which we subsequently have no access to. Also we are subject to negative interest rates charged on liquid money held with other financial institutions. It is with regret that we have to implement this measure but, I have to inform members that this cap will be strictly enforced in the months ahead. The maximum share balance for an individual is €20,000 or shares held jointly €20,000. No member can exceed the maximum holding of €20,000 either through a single/joint ac- count. We also have a monthly savings lodgement cap of €5,000 in place. This decision was taken in the best interests of all our members. The saving restrictions currently affects only a small proportion of Credit Union members.
As you are no doubt aware, the Board of Directors and Committee members are all volunteers who give freely of their time and skills to help in the running of the credit union. We are in need of new volunteers for both the Board of Directors, Board Oversight committee and other Committees to help out, and we invite you, as a member, to get in touch with us with a view to becoming a volunteer and help in the run- ning of your Credit Union.
I wish to thank my fellow directors, members of the board oversight committee, volunteers, and in par- ticular management and staff for their professionalism, commitment and dedication to the credit union throughout the past year. Also, and on behalf of the Board of Directors, I would like to propose a vote of sympathy to the families and friends of our deceased members who have passed away during 2020. Finally, and on behalf of the Board, I thank you, the member, for your continued loyalty and support. I wish all our members the very best for a brighter 2021.
Eoin Buckley Chairperson, Ballaghaderreen & District Credit Union Limited
4 Ballaghaderreen & District Credit Union Limited BALLAGHADERREEN AND DISTRICT CREDIT UNION LIMITED
STATEMENT OF DIRECTORS' RESPONSIBILITIES The directors are responsible for preparing the financial statements in accordance with applicable Irish law and regulations. The directors are also responsible for preparing the other information included in the annual report. The Credit Union Act, 1997 (as amended) requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the credit union and of the income and expenditure of the credit union for that period. In preparing those financial statements the directors are required to: • select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether the financial statements have been prepared in accordance with applicable accounting • standards, identify those standards, and note the effect and reason for any material departure from those standards; and • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Credit Union will continue in business. The directors are responsible for ensuring that the credit union keeps or causes to be kept adequate accounting records which correctly explain and record the transactions of the credit union, enable at any time the assets, liabilities, financial position and income and expenditure of the credit union to be determined with reasonable accuracy, enable them to ensure that the financial statements comply with the Credit Union Act 1997 (as amended) and enable the financial statements to be audited. They are also responsible for safeguarding the assets of the credit union and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Eoin Buckley Denise Deery
EoinChairperson Buckley SecretDeniseary Deery Chairperson Secretary Date: 10th November 2020
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 has operated in accordance with Part IV, Part IVA and any regulations made for the purposes of Part IV or Part IVA of the Credit Union Act, 1997 (as amended). In addition, they are required to assess whether the Board of Directors has operated in accordance with any other matter prescribed by the Central Bank. Mr Jackie Henry
Chairperson – Board Oversight Committee Mr. Jackie Henry Chairperson - Board Oversight Committee Date: 10th November 2020
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5 Independent Auditor’s Report To the Members of Ballaghaderreen & District Credit Union Limited
Opinion
We have audited the financial statements of Ballaghaderreen & District Credit Union Limited (“The Credit Union”), which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Reserves, the Statement of Cash Flows for the financial year ended 30 September 2020, and the related notes to the financial statements, including the summary of significant accounting policies. The financial reporting framework that has been applied in the preparation of the financial statements is Irish law including the Credit Union Act, 1997 (as amended) and accounting standards issued by the Fi- nancial Reporting Council and promulgated by the Institute of Chartered Accountants in Ireland includ- ing FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (Generally Accepted Accounting Practice in Ireland).
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 30th September 2020, 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 the ethical requirements that are relevant to our audit of the financial statements in Ireland, including the Irish Auditing and Accounting Supervisory Authority (IAASA) Ethical Standard, 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 the ISAs (Ireland) require us to report to you where: • the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or • the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Credit Union’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
Other information The directors are responsible for the other information. The other information comprises the informa- tion 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 informa- tion 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 deter- mine 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
6 Independent Auditor’s Report To the Members of Ballaghaderreen & District Credit Union Limited
Matters on which we are required to report 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 the accounting records of the Credit Union were sufficient to permit the financial statements to be readily and properly audited, • The financial statements are in agreement with the accounting records. • The financial statements contain all primary statements, notes and significant accounting policies required to be included in accordance with Section 111(1)(c) of the Credit Union Act 1997 (as amended)
Matters on which we are required to report by exception In the light of our knowledge and understanding of the Credit Union and its environment obtained in the course of the audit, we have not identified material misstatements in the directors’ report.
Responsibilities of directors As explained more fully in the statement of directors’ responsibilities [set out on page 3], 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 the directors determine is necessary to enable the prepa- ration of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Credit Union’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Credit Union or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (Ireland) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs (Ireland), the auditor will exercise professional judgement and maintain professional scepticism throughout the audit. The auditor will also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for their opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the credit union’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
7 Independent Auditor’s Report To the Members of Ballaghaderreen & District Credit Union Limited
• Conclude on the appropriateness of the directors’ use of the going concern basis of ac counting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the credit union’s ability to continue as a going concern. If they conclude that a material uncertainty exists, they are required to draw attention in the auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify their opinion. Their conclusions are based on the audit evidence obtained up to the date of the auditors’ report. However, future events or conditions may cause the credit union to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves a true and fair view. • The auditor communicates with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that may be identified during the audit.
The purpose of our audit work and to whom we owe our responsibilities This report is made solely to the Credit Union’s members, as a body, in accordance with section 120 of the Credit Union Act 1997 (as amended). Our audit work has been undertaken so that we might state to the Credit Union’s members those matters we are required to state to them in an 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.
Colm O’Grady For and on behalf of RBK Business Advisers Chartered Accountants and Registered Auditor, RBK House, Irishtown, Athlone, Co. Westmeath, N37 XP52.
Date: 10/11/2020
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Ballaghaderreen & District Credit Union Limited
Ballaghaderreen & District Credit Union Limited
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 SEPTEMBER 2020
2020 2019 INCOME Schedule € € Interest on Member’s Loans 1 380,933 388,382 Other Interest Receivable and Similar Income 2 68,360 97,590 Net Interest Income 449,293 485,972
Other Income 3 3,095 22,365 TOTAL INCOME 452,388 508,337
EXPENDITURE Employment Costs 143,114 145,498 Other Operating Expenses 4 265,038 289,424 Depreciation (Note 6) 17,994 18,910 Bad Debt Provision/Write Off/Recoveries (Note 5) (20,242) (77,178) TOTAL EXPENDITURE 405,904 376,654
SURPLUS FOR THE YEAR 46,484 131,683
Dividend and Loan Interest Rebate paid (30,645) - Add: Undistributed Surplus at start of Year 622,970 592,320 TOTAL 638,809 724,003 Less: Transfer to Regulatory Reserve - (101,033) Transfer to Unrealised Investment Income Reserve - - Transfer to Operational Risk Reserve - - TOTAL - (101,033)
Undistributed Surplus at End of Year 638,809 622,970
The financial statements were approved and authorised for issue by the Board and signed on its behalf by:
CEO William Golden Board Oversight Committee Jackie Henry Board of Directors Eoin Buckley Date: 10th November 2020
8 9
Ballaghaderreen & District Credit Union Limited
Ballaghaderreen & District Credit Union Limited
BALANCE SHEET AS AT 30 SEPTEMBER 2020
€ €
e os ts an In estments
Loans to Members Less ro s on or a an o bt ebts
an b e e ssets
ebtors re a ments an r e In ome
as an a an es at an
Members’ Shares
Members’ Flexi Shares
t er re tors an r a s
e ator eser e n str b te r s erat ona eser e
The financial statements were approved and authorised for issue by the Board and signed on its behalf by:
CEO William Golden Board Oversight Committee Jackie Henry Board of Directors Eoin Buckley Date: 10th November 2020
10 Ballaghaderreen & District Credit Union Limited FOR IN OF RE CHANGES STATEMENT eser e is era i al ra s er ai i eres a ai i i e reser e re la r ra s er s r l s realise ra s er ear he r S r l s eser e is era i al ra s er ai i eres a ai i i e reser e re la r ra s er s r l s realise ra s er ear he r S r l s
THE YEAR ENDED 30 SEPTEMBER 2020 YEAR SEPTEMBER ENDED 30 THE
SERVES
Ballaghaderreen & District Credit Union
Limited
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Ballaghaderreen & District Credit Union Limited Ballaghaderreen & District Credit Union Limited
STATEMENT OF CASH FLOWS For the year ended 30 September 2020 € €
S r l s Adjustments for non-cash items: M eme i r isi a eb ri e s e re ia i e rease rease i re a me a r e i me e rease rease i re i r a r als
Members shares sa i s a e si s re ei e Members shares sa i s a e si s re ai e l a s members e a me l a s b members
M eme i i es me s r hase r er la a e i me i i e ai
ash a ash e i ale s a be i i ear
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Ballaghaderreen & District Credit Union Limited Ballaghaderreen & District Credit Union Limited
Notes to the Financial Statements For the year ended 30 September 2020
1. Legal and regulatory framework Ballaghaderreen & District Credit Union Limited is established under the Credit Union Act 1997 (as amended). Ballaghaderreen & District Credit Union Limited is registered with the Registrar of Credit Unions and is regulated by the Central Bank of Ireland. The principal place of business is Ballaghaderreen & District Credit Union Limited, Main Street, Ballaghaderreen, Co. Roscommon.
2. Accounting policies
2.1 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” (FRS 102). The financial statements are prepared on the historical cost basis. The directors of Ballaghaderreen & District Credit Union Limited believe that it is appropriate to prepare the financial statements on the going concern basis.
2.2 Going concern The financial statements have been prepared on the going concern basis which assumes that the Credit Union will continue in operational existence for the foreseeable future. During the year, the Credit Union reported a surplus of €46,484 and at the balance sheet date has total reserves of 13.89%. The Board of Directors and Management Team have prepared financial projections for the next 3 years which take into consideration the ongoing impact of Covid-19. These illustrate that the Credit Union has sufficient resources to continue in operational existence in relation to meeting minimum liquidity and reserve levels. On this basis, the Board of Directors believe that it is appropriate to continue to adopt the going concern basis of preparation.
2.3 Currency The financial statements are presented in Euro (€) which is the functional currency of Ballaghaderreen & District Credit Union Limited. Monetary amounts in these financial statements are rounded to the nearest Euro.
2.4 Income Interest on members’ loans Interest on Members' Loans is recognised on an accruals basis over time irrespective of when the interest is physically received by the Credit Union. An adjustment is made to the year-end amount receivable for any irrevocable amounts or amounts written off for whatever reason. This is the method required by FRS102 and is prescribed by Section 110 (d) of the Credit Union Act 1997 (as amended).
Investment income Investment income is recognised at amortised cost using the effective interest rate method.
Other income Other income is recognised on an accruals basis.
13 BallaghaderreenBallaghaderreen && DistrictDistrict Credit Credit Union Union Limited Limited
Notes to the Financial Statements For the year ended 30 September 2020
2.5 Investments Investments are accounted for depending on how they are designated at purchase: Held at amortised cost Investments held at amortised cost are measured by the effective interest rate method less impairment. This means that the investment is measured at the cost less any capital adjustments paid, plus or minus the cumulative amortisation of interest, and compared to the original and maturity amount, less any impairment necessary. As done in previous years, this spreads out the return on any investments, less any possible or identified impairment. Deposits All other investments, which are deposits, are held at the cost paid or amount held. Any amounts held as a deposit with the Central Bank are not subject to any impairment reviews.
2.6 Tangible fixed assets Tangible fixed assets include the categories listed below, which are stated at cost less depreciation and any potential impairment. Tangible fixed assets are reviewed for impairment if events or changes in circumstances indicate that the carrying value may not be recoverable.
Depreciation is calculated per annum as follows: Freehold Buildings 3% Straight Line Fixtures and Fittings 20% Straight Line Computer Hardware & Software 25% Straight Line
2.7 Cash and cash equivalents Cash and cash equivalents comprise cash on hand and cash deposits with maturity of three months or less.
2.8 Members Share and Loans Members’ shares are redeemable and therefore classified as liabilities by the credit union, as they are due to members. They are measured at the amount deposited. Loans to members are financial assets with fixed payments. They are recognised when cash is advanced to members and measured at amortised cost using the effective interest method. Loans are only removed from the balance sheet when they are repaid by the member or written off by the credit union.
2.9 Impairment of Loans Ballaghaderreen & District Credit Union Limited assesses if there is objective evidence that any of its loans are impaired with due consideration of environmental factors. The loans are assessed collectively in groups that share similar credit risk characteristics. Quarterly loan book reviews are also
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BallaghaderreenBallaghaderreen && DistrictDistrict Credit Credit Union Union Limited Limited
Notes to the Financial Statements For the year ended 30 September 2020 carried out, and provisions are made for any loans not performing, in line with regulatory requirements and accounting rules. Any loans which are identified as impaired are approved for charge off by the board on a quarterly basis. Any movement in bad debts, including provisions, collection of charged off amounts, amounts charged off or reversal of any necessary provisions, are accounted for in the income and expenditure account. Ballaghaderreen & District Credit Union has identified the following categories for assessing impairment losses on loans.
Rescheduled Loans The provision applied to Rescheduled Loans is the greater of provision identified during the loan book review and any provision required under Regulatory Requirements issued by the Central Bank of Ireland.
Individual Significant Loans Each loan in this category is individually assessed. 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 management of individual loans. The credit rating triggers the impairment assessment and if relevant the raising of the specific provision on individual loans where there is a doubt about their recoverability.
2.10 Pension Costs Ballaghaderreen & District Credit Union Limited participates in an industry-wide pension scheme for employees (The Irish League of Credit Unions Republic of Ireland Pension Scheme). This is a funded defined benefit scheme with assets managed by the Scheme’s trustees. The scheme is a multi-employer Scheme and due to the nature of the Scheme, it is not possible for Ballaghaderreen & District Credit Union Limited to separately identify its share of the Scheme’s underlying assets and liabilities. Consequently, it accounts for the Scheme as a defined contribution plan. There is an agreed funding plan in respect of the Pension Scheme as a result of a Minimum Funding Standard deficit certified by the Scheme’s Actuary in 2009. Consequently, Ballaghaderreen & District Credit Union Limited recognises a liability at each balance sheet date for its outstanding contributions payable under the agreed funding plan to the extent that they relate to committed funding in respect of the deficit to which the funding plan relates.
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BallaghaderreenBallaghaderreen && DistrictDistrict Credit Credit Union Union Limited Limited
Notes to the Financial Statements For the year ended 30 September 2020
2.11 Other Employee Benefits The costs of short-term employee benefits, including holiday pay, are recognised as a liability and as an expense (unless these costs are required to be recognised as part of the cost of fixed assets) over the period they are earned. 2.12 Reserves Regulatory reserve Ballaghaderreen & District Credit Union Limited is required to maintain and establish a minimum Regulatory reserve of at least 10% of the assets of the Credit Union in accordance with the Credit Union Act 1997 (Regulatory Requirements) Regulations 2016. Operational Risk Reserve Ballaghaderreen & District Credit Union Limited has established an Operational Risk reserve which is a separate distinct reserve which the Credit Union is required to hold in addition to its Regulatory reserve. The amount held in the Operational risk reserve is the estimated impact of operational risk events that may have a material impact on the business of Ballaghaderreen & District Credit Union Limited. The directors, having considered the requirements of the Section (45)(5)(a) of the Credit Union Act 1997 (as amended), determine that an operational risk reserve of €119,164 is appropriate.
Dividend reserve and Loan interest rebate reserve Dividend and loan interest rebate reserves are the accumulated surplus to date that have been set aside for the purpose of future dividend and loan interest rebate payments.
Non Distributable Investment Income Reserves Investment income that has been recognised in the financial statements but will not be received within 12 months of the balance sheet date is classified as “non distributable” and is not distributable as a dividend in accordance with Section 31 of the Credit Union Act 1997 (Regulatory Requirements) Regulations 2016. A reclassification between non-distributable and distributable is made as investments come within 12 months of maturity date.
Undistributed surplus Undistributed surplus are the accumulated reserves Ballaghaderreen & District Credit Union Limited to date that have not been declared as dividends returnable to members.
2.13 Dividends and Loan Interest Rebates to Members Dividend on shares and loan interest rebates Dividends are made from current year’s surplus or the dividend reserve set aside for that purpose. The Boards’ proposed distribution to members each year is based on the dividend and loan interest rebate policy of the Credit Union.
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Notes to the Financial Statements For the year ended 30 September 2020
The rate of dividend and loan interest rebate recommended by the Board will be agreed after consideration of:
• The funding requirements of the Regulatory Reserve and any other reserves deemed prudent by the Board;
• The adequacy of provisions that have been made for bad and doubtful debts; • Current interest rates that other financial institutions offer;
• Rate of return that the Credit Union received on its investment portfolio; all dominated by prudence and the need to sustain the long-term welfare of the Credit Union. The Credit Union accounts for dividends and rebates of loan interest when members ratify such payments as the Annual General Meeting.
3. Use of estimates and judgements The preparation of financial statements requires the use of certain accounting estimates. It also requires the Directors to exercise judgement in applying the Credit Union’s accounting policies. The areas requiring a higher degree of judgement, or complexity, and areas where assumptions or estimates are most significant to the financial statements are disclosed below:
Bad debts/Impairment losses on Loans to Members Ballaghaderreen & District Credit Union Limited’s accounting policy for impairment of loans is set out in the accounting policy note above. 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 climate, conditions in various sectors of the economy to which the Credit Union is exposed and other external factors such as legal and regulatory requirements.
Operational Risk Reserve The Directors have considered the requirements of the Credit Union Act 1997 (as amended) and have considered an approach to the calculation of the operational risk reserve. The reserve has been calculate by reference to the known risks currently faced by the credit union.
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Ballaghaderreen & District Credit Union Limited Ballaghaderreen & District Credit Union Limited
Notes to the FinancialBallaghaderreenBallaghaderreen Statements & & District District Credit Credit Union Union Limited Limited Notes to the Financial Statements For the year ended 30 September 2020 For Notes the to year the endedFinancial 30 SeptemberStatements 2020 For4 . Deposits the year and ended Investments 30 September 2020 4 . Deposits and Investments
4. Deposits and Investments 4a. Deposits and Investments – Cash Equivalents 2020 2019 € 4a. Deposits and Investments – Cash Equivalents 2020 2019€ € Accounts4a. Deposits in Authorisedand Investments Credit –Institutions Cash Equivalents (Irish and Non-Irish 2,463,6172020 949201,6769€ € Accountsbased) in Authorised Credit Institutions (Irish and Non-Irish 2,463,617 949,676€ based) AccountsCollective Iinnvestment Authorised Schemes Credit Institutions (Irish and Non-Irish 2,463,617- 949116,109,676 TotalCollectivebased) Deposits Investment and Investments Schemes – Cash Equivalents 2,463,617- 1,065116,109,785 Total Collective Deposits Investment and Investments Schemes – Cash Equivalents 2,463,617- 1,065116,109,785
Total Deposits and Investments – Cash Equivalents 2,463,617 1,065,785
4b. Deposits and Investments – Other 2020 2019 € 4b. Deposits and Investments – Other 2020 2019€ € 4b. Deposits and Investments – Other 2020 2019€ € Accounts in Authorised Credit Institutions (Irish and Non-Irish 10,410,333 13,110,773€ based) Accounts in AuthorisedBallaghaderreen Credit Institutions & District (Irish and Credit Non -UnionIrish Limited10,410 ,333 13,110,773 based) AccountsBank Bonds in AuthorisedBallaghaderreen Credit Institutions & District (Irish and Credit Non -UnionIrish Limited10,4103,250,000 ,333 13,11,600,00010,773 Bankbased) Bonds 3,250,000 1,600,000 CentralNotes toBank the Deposits Financial Ballaghaderreen Statements & District Credit Union Limited487,650 62,650 Bank Bonds 3,250,000 1,600,000 CentralNotes toBank the Deposits Financial Statements 487,650 62,650 TotalFor the Deposits year ended and Investments 30 September – Other 2020 14,147,983 14,773,423 Central Bank Deposits 487,650 62,650 TotalFor Notes the Deposits to year the endedFinancial and Investments 30 SeptemberStatements – Other 2020 14,147,983 14,773,423 Total Deposits and Investments 16,611,600 15,839,208 TotalFor5. Loans the Deposits year to Members ended and Investments 30 September – Other 2020 14,147,983 14,773,423 Total Deposits and Investments 16,611,600 15,839,208 5. Loans to Members 2020 2019 Total Deposits and Investments 16,611,600 15,839,208 5. Loans to Members 2020€ 2019€ Gross Loans to Members 4,410,6282020€ 4,506,7242019€ € € ProvisionGross Loans for Btoad M embersand Doubtful Debts 4,410,628(241,729) 4,506,724(222,878) Gross Loans to Members 4,410,628 4,506,724 NetProvision Loans for to BMadembers and D oubtful Debts 4,168,899(241,729) 4,283,846(222,878) NetProvision Loans for to BMadembers and D oubtful Debts 4,168,899(241,729) 4,283,846(222,878)
Net Loans to Members 4,168,899 4,283,846 Opening Provision for Bad Debts 222,878 326,549
Decrease/IncreaseOpening Provision forin BBadad DDebtebts P rovision 222,87818,851 (103,671326,549) Opening Provision for Bad Debts 222,878 326,549 ClosingDecrease/Increase Provision for in BBadad DDebtsebt Provision 241,72918,851 (103,671222,878) ClosingDecrease/Increase Provision for in BBadad DDebtsebt Provision 241,72918,851 (103,671222,878) ClosingThe current Provision provision for B adin theDebts financial statements is €241,729 (2019: 241,729€222,878 ) representing 222 5.4,878% (2019: 4.9%) of the total loan book. The current provision in the financial statements is €241,729 (2019: €222,878) representing 5.4% The(2019: current 4.9%) provisionof the total in loan the book.financial statements is €241,729 (2019: €222,878) representing 5.4% (2019: 4.9%) of the total loan book. Bad and Doubtful Debts in the statement of comprehensive income comprise: Bad and Doubtful Debts in the statement of comprehensive income comprise:
Bad and Doubtful Debts in the statement of comprehensive income comprise: 2020 2019 2020 2019 € € 2020 2019 Bad Debts Recovered (41,417€) (35,195€) Bad Debts Recovered (41,417€) (35,195€) Loan Interest on Impaired Loans Classified as Bad Debts (11,900) (12,658) Bad Debts Recovered (41,417) (35,195) LoanRecovered Interest on Impaired Loans Classified as Bad D ebts (11,900) (12,658) Recovered BadLoan D Iebtsnterest W rittenon Impaired Off Loans Classified as Bad D ebts (11,900)14,224 (12,658)74,345 BadRecovered Debts Written Off 14,224 74,345 Increase/(Decrease) in Provision for Bad and Doubtful Debts 18,851 (103,670) Increase/(Decrease)Bad Debts Written O ffin Provision for Bad and Doubtful Debts 18,85114,224 (103,67074,345) Bad and Doubtful Debts (20,242) (77,178) BadIncrease/(Decrease) and Doubtful Debts in Provision for Bad and Doubtful Debts (20,242)18,851 (103,670(77,178) Bad and Doubtful Debts (20,242) (77,178) 18
BallaghaderreenBallaghaderreen && DistrictDistrict Credit Credit Union Union Limited Limited
6. Tangible Fixed Assets
Computer Freehold Hardware Fixtures Land & and and Buildings Software Fittings Total € € € € Cost At 1 October 2019 513,738 132,469 111,963 758,170 Additions - 21,384 278 21,662 Disposals - - - - At 30 September 2020 513,738 153,853 112,241 779,832
Depreciation At 1 October 2019 281,998 121,957 106,335 510,290 Charge for the year 7,169 8,183 2,641 17,993 Disposals - - - - At 30 September 2020 289,167 130,140 108,976 527,456
Net book value at 30 September 2020 224,571 23,713 3,265 251,549
Net book value at 30 September 2019 231,740 10,512 5,628 247,880
The two premises located in Main Street, Ballaghaderreen, Co. Roscommon together with Turbury bog at Cloonavullaun Townland, Ballaghaderreen, Co. Roscommon were valued by James Kilcoyne Auctioneers & Valuers in October 2020. The estimated market value of the properties at that time were €245,000. Accordingly, no provisions for impairment is reflected.
7. Debtors, Prepayments and Accrued Income
2020 2019 € €
Prepayments 4,881 9,028 Accrued Loan Interest Income 12,793 16,502 Accrued Investment income 40,467 35,210
58,141 60,740
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8. Members' Funds 2020 2019 € €
Regular Share accounts 18,780,659 17,694,729 Flexi Share accounts 140,083 109,309
Total Members’ Shares 18,920,742 17,804,038
9. Cash and Cash Equivalents
2020 2019 € € Cash and Balances at Bank 924,473 468,620 Deposits and Investments 2,463,617 1,066,994 3,388,090 1,535,614
10. Creditors and Accruals
2020 2019 € €
Creditors and Other Accruals 25,647 47,246 Holiday Pay Accrual 11,267 7,843
36,914 55,089
11. Proposed Dividends and Loan Interest Rebate
The dividend is formally proposed by the Directors after the year end and is approved by the members at the AGM, at which time it becomes a liability.
2020 2019 € €
Dividend proposed - 1,762 Loan interest rebate proposed - 20,196
Dividend and loan interest rebate rate: Share accounts 0% 0.01% Loan interest rebate rate 0% 5%
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12. Key Management Remuneration
The Directors of Ballaghaderreen & District Credit Union Limited are all unpaid volunteers. The remuneration of key management personnel was as follows:
2020 2019 € €
Remuneration including PRSI 117,914 120,301 Pension 25,200 25,197
Total 143,114 145,498
13. Credit risk disclosures
Ballaghaderreen & District Credit Union Limited offers all types of loans to members, including those who offer security for loans. Loans are stated in the balance sheet at the maximum amount of risk that Ballaghaderreen & District Credit Union Limited is exposed to.
The carrying amount of the loans to members represents Ballaghaderreen & District Credit Unions maximum exposure to credit risk. The following provides information on the credit quality of loan repayments. Where loans are not impaired it is expected that the amounts repayable will be received in full.
Loans Arrears Analysis 2020 2019 € % € % Total Loans not Impaired 3,849,067 87.27% 3,744,046 83.07%
Impaired loans
Between 1 and 9 Weeks Past Due 425,323 9.64% 562,777 12.48% Between 10 and 18 Weeks Past Due 1,169 0.03% 19,626 0.43% Between 19 and 26 Weeks Past Due - 0% 37,721 0.84% Between 27 and 39 Weeks Past Due 7,044 0.16% 22,278 0.49% Between 40 and 52 Weeks Past Due 39,018 0.88% - - 53 or more Weeks Past Due 89,007 2.02% 120,276 2.69% Total Impaired Loans 561,561 12.73% 762,678 16.93%
Total Gross Loans 4,410,628 100% 4,506,724 100%
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14. Additional financial instruments disclosures 14a. Financial risk management Detailed budgets are set by Ballaghaderreen & District Credit Union Limited for the entire duration of its Strategic Plan, and updated annually based on any changes in circumstances. These budgets seek to maximise returns on investments and loans, minimise the cost of operating a significant branch operation while providing a return to members in a low interest rate environment. This manages any potential interest rate risk that the credit union might possibly be exposed to. The main financial risks arising from the Credit Union’s activities are credit risk, market risk, liquidity risk and interest rate risk. The Board reviews and agrees policies for managing each of these risks, which are summarised below. Credit Risk: Credit risk is the risk that a borrower will default on their contractual obligations relating to repayments to the Credit Union, resulting in financial loss to the Credit Union. Ballaghaderreen & District Credit Union Limited has invested in putting in place a team in lending with strong underwriting experience to manage credit risk, and ensure that assessments in relation to loans are sufficiently robust. There are detailed policies and procedures in place to ensure these assessments can be measured constantly. The first port of call for ensuring loans are repaid is to lend to members who can repay loans, this is noted above in the quality of lending section. When members encounter difficulty in paying loans, they have the option of discussing alternatives with our team. When members do not pay their loans, they are contacted regularly to ensure they are aware of their commitments. Monitoring of loans in arrears is carried out daily, with policies and procedures in place to deal with all scenarios. The Credit Union’s investments are also exposed to credit risk and the Credit Union mitigates the risk by only placing investments with financial institutions where the counterparties have strong credit ratings and using investment products authorised by Central Bank. Liquidity Risk: The policy of Ballaghaderreen & District Credit Union Limited 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. Ballaghaderreen & District Credit Union Limited conducts all its transactions in Euro and does not deal in derivatives or commodity markets. Therefore, Ballaghaderreen & District Credit Union Limited is not exposed to any form of currency risk or other price risk. Interest Rate Risk: Ballaghaderreen & District Credit Union Limited main interest rate risk arises from differences between the interest rate exposures on the receivables and payables that form an integral part of a Credit Union’s operations. The Credit Union considers rates of interest receivable when deciding on the dividend rate payable on members’ shares. Ballaghaderreen & District Credit Union Limited does not use interest rate options to hedge its own positions.
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Ballaghaderreen & District Credit Union Limited Ballaghaderreen & District Credit Union Limited
Interest rate risk disclosures The following table shows the average interest rates applicable to relevant financial assets and liabilities;
2020 2019 Loan Type Interest APR Interest APR Rate Rate
Standard Loan 10.20% 10.75% 10.20% 10.75% Education Loan 6.00% 6.20% 6.00% 6.20% Car / Special Loan 6.50% 6.72% N/A N/A
Secure Loans 5.50% 5.66% 5.50% 5.66%
15. Pensions
Ballaghaderreen & District Credit Union Limited participates in an industry-wide pension scheme for employees (The Irish League of Credit Unions Republic of Ireland Pension Scheme). This is a funded defined benefit scheme with assets managed by the Scheme’s trustees. The scheme is a multi-employer Scheme and due to the nature of the Scheme it is not possible for Ballaghaderreen & District Credit Union Limited to separately identify its share of the Scheme’s underlying assets and liabilities. Consequently, it accounts for the Scheme as a defined contribution plan, in accordance with FRS 102. The Pension’s Act requires the trustees of the Scheme to assess whether it could meet a certain prescribed standard, known as the Minimum Funding Standard. This assesses whether, if the scheme was wound up on a specified theoretical valuation date, it could satisfy the Funding Standard at that date. Following the Scheme’s actuary certifying a Minimum Funding Standard deficit in the Scheme in 2009, Ballaghaderreen & District Credit Union Limited, the ILCU Group and the other Credit Unions participating in the Scheme entered into a funding agreement with the Scheme that was designed to ensure that, the Scheme could be reasonably expected to satisfy the Minimum Funding Standard by a specified future date (1 March 2019). This funding was approved by the Pensions Authority. The Scheme exited the funding plan as scheduled on 1 March 2019 meeting its statutory funding obligations on that date. As part of the above solvency assessment process, the Scheme actuary must carry out a separate valuation under the Minimum Funding Standard every 3 years and produce a funding certificate for submission to the Pensions Authority within 9 months of the effective date of the valuation. The purpose of the certificate is to certify whether or not the assets of the scheme at the effective date are sufficient to meet the liabilities of the scheme based on the assumption that the scheme was wound up at that date. The most recent Actuarial Funding Certificate was effective as at 1 March 2018 and it certified that the Scheme satisfied the funding standard. An actuarial review of the fund is normally carried out every three years by the Scheme's independent, professionally qualified actuary. The actuarial review considers the past and future liabilities of the scheme. The last completed triennial actuarial review was carried out with an effective date of 1 March 2017 using the Projected Unit valuation method. The principal actuarial assumption used in the valuation was the investment return would be 1.75% higher than the annual salary increases. The market value of the scheme's assets at 1 March 2017 was €216m. The actuarial valuation disclosed a past service deficit of €6.4m at 1 March 2017 calculated under the Ongoing Actuarial Valuation method. This valuation method assumes that the Scheme will continue in
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existence for the foreseeable future. The assumptions used in the actuarial review to determine the past service deficit differ from the assumptions that would be used to determine the liabilities for defined benefit obligations under FRS102. This actuarial review recommended that the rate agreed under the funding proposal, 27.5% of pensionable salary, continues to be paid. The cost of risk benefits is paid in addition to this rate giving a total contribution rate of 30% of Pensionable Salary. The 2020 actuarial review is underway and is expected to be concluded by 30 November 2020.
16. Related Party Transactions
2020 2019 No of € No of € Loans Loans Loans advanced to related parties during the year 5 95,471 4 22,000 Total loans outstanding to related parties at year end 9 101,503 14 69,090
The related party loans stated above comprise loans to members of the Board of Directors, the management team and members of the family of a member of the Board of Directors and the management team of Ballaghaderreen & District Credit Union.
Total Loans outstanding to related parties represents 2.3% of the total loans outstanding at 30 September 2020 (2019: 1.29%).
17. Insurance against Fraud
The Credit Union has Insurance against fraud in the amount of €1,300,000 (2019: €1,300,000) in compliance with Section 47 of the Credit Union Act 1997 (as amended).
18. Post Balance Sheet Events
In early 2020, the existence of a new coronavirus, known as COVID-19, was confirmed and since this time COVID-19 has spread across the world causing disruption to businesses and economic activity. The company considers the emergence and spread of COVID-19 to be a non-adjusting post balance sheet event. Given the inherent uncertainties, it is not practicable at this time to determine the impact of COVID-19 on the company or to provide a quantitative estimate of this impact.
19. Capital Commitments
The Credit Union held no capital commitments at the year end.
20. Comparative Figures
Comparative figures have been restated where necessary on the same basis as those for the current year.
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21. Contingent Liability
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 potential over-collection of interest. Ballaghaderreen & District Credit Union Limited has commenced a review to ascertain whether any top-up loans to members might be impacted by these circumstances, and to determine what actions need to be taken, in consultation with the Central Bank. A decision will be made in the coming financial year. 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. A transfer of €20,000 has been made to the operational risk reserve to provide for the financial risk of same. Ballaghaderreen & District Credit Union Limited
Schedules to the Financial Statements
€ €
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s ra e eba e ra e Fees mmissi s
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BallaghaderreenBallaghaderreen & &District District Credit Union Union Limited Limited
Schedules to the Financial Statements
€ €
i e e a a es i h i ea i a lea i e airs a e e als ri i a S a i ar s a e a ele h e a i s a S s rshi eb lle i e i re i he s Fees r m i a er isi ha er a ea e x e ses S a rai i S x e ses M a e i x e ses ra el a S bsis e e a har es e ral a e S abilisa i e i Fee er al i is m lia e Fee e eral s ra e Share a a i s ra e m er Mai e a e m er S bs ri i s a Ma a eme Fees Mis ella e s x e ses re i s i i es l i F e si ara ee har e Mer er x e ses
26
SAVINGS CAP AND WHAT IT MEANS FOR OUR MEMBERS
In recent years, Ballaghaderreen CU has experienced an unprecedented level of growth in member savings. In some instances we have witnessed members withdrawing sums of money from other financial institutions and placing these funds in their Credit Union account. While we welcome this strong show of confidence in our financial strength and loyalty from our members, this can have a negative effect on new services and product provision and ultimately reduce our ability to effectively service our member needs. The decision to introduce a saving cap three years ago was taken with due consideration and deliberation by the Board of Directors. The maximum share balance for an individual is €20,000 or shares held jointly €20,000. No member can exceed the maximum holding of €20,000 either through a single/joint account. We also have a monthly savings lodgement cap of €5,000 in place. This decision was taken in the best interests of all our members. The saving restrictions currently affects only a small proportion of Credit Union members.
Why a Savings Cap? Tighter regulatory requirements by the Central Bank of Ireland and the costs charged by banks to hold our members savings on deposit are the main contributory factors for the introduction of a saving cap. Under Central Bank regulations, we must maintain our statutory capital at a percentage of our total assets. In practical terms, this means that for every additional €100,000 of savings, we have to allocate €10,000 from our surplus/profits to our Capital Reserve. This greatly impacts our ability to invest in new services and products for our members. It can also negatively impact the amount available to pay a dividend at year end. Also Negative Interest Rates greatly impact our ability to hold shares over €20,000. The current rate of return offered by banks is still negative. This means every time we lodge money in our bank account, interest is not earned, instead the Credit Union is charged a fee by the banks for the holding of these excess funds. Under Central Bank regulation we are obliged to hold a certain amount of savings in liquid funds to meet withdrawals/loans requirements for our members which again incurs a negative interest charge.
What is the saving restriction? Ballaghaderreen & District Credit Union Limited has capped the amount of savings per member to €20,000.
Does this mean I have to take money out of the credit union now? The credit union now has a saving cap of €20,000 per member/account. This means that each member can only have €20,000 in shares with the credit union. If anyone currently has over that amount in savings, we would ask that you withdraw the excess funds to ensure your account meets the €20,000 saving restric- tion. Members who have less than €20,000 can increase their shares to €20,000 – but no more than that.
How long will the cap last for? The Board continues to keep the savings restriction under constant review, if there is any change to the decision to amend the current saving cap, you will be notified of this.
Are my savings safe here? Please be assured your savings remain safe and secure at Ballaghaderreen & District Credit Union Limited. We are a financially strong and stable credit union with €3m capital reserves and €22.4m in assets. In addition, your savings continue to be guaranteed by the Government Deposit Guarantee Scheme up to €100,000.
Does this mean the credit union cannot give out loans? Ballaghaderreen & District Credit Union Limited is in a strong position to give out loans, subject to appropri- ate assessments being completed. Our ability to lend is in no way affected by the savings cap. We continue to provide valuable loan services to the local community offering great value, flexible loans. If you are in need of a loan please feel free to talk to us about how we can help you, call 094 9860522 alternatively email [email protected]
Thank you for your understanding in this matter. Please be assured that we continue to innovate and work hard to ensure that Ballaghaderreen & District Credit Union Limited remains strong and viable, while offering exceptional personal service, products and services that meet our member needs.
27 BOARD OVERSIGHT COMMITTEE ANNUAL REPORT TO THE MEMBERS 2020
The Board Oversight Committee is pleased to present its annual report to the members of Ballaghader- reen & District Credit Union. The members of the committee-David Wright, Jackie Henry Colm Flannery – were elected at the last AGM. The BOC would like to extend sympathy to the family of David Wright who passed away suddenly and unexpectedly during the year. David was the longest serving member of the committee and we would like to acknowledge his long service to the credit union and its members. The role of the committee is to oversee the Board of Directors and assess whether it is operating in ac- cordance with Part IV and Part IV(A) of the Credit Union Act. At least one member of the BOC attended each meeting of the Board during the year. The committee is satisfied these meeting were properly conducted and that the Board’s policies and procedures were reviewed and updated as required. The committee held monthly meetings during the year as well as separate meetings with the Board to review and assess its performance. We are satisfied that as far as we can ascertain that the Board of Directors has complied and operated in accordance with Part IV and Part IVA of the Credit Union Acts 1997 to 2012. Finally, on behalf of the BOC, I would like to thank the Directors, Manager and Staff for their assistance and co-operation during the year.
Jackie Henry, Committee Chairperson.
BALLAGHADERREEN AND DISTRICT CREDIT UNION LTD. CREDIT COMMITTEE REPORT 2020 We are pleased to present the Report of the Credit Committee to the 37th A.G.M. of Ballaghader- reen and District Credit Union Limited for the financial year ended 30th September 2020.
Committee members are:
• Jean Anderson. • Gerald Duffy. • Phyllis Harpur. • Teresa Quinn • Denise Deery • Mary Roddy • Teresa Higgins
A total of 407 loans were advanced to our members during the past year totaling €2,266,270
Members enjoy the benefit of Free Loan Protection Insurance (subject to terms & conditions) and no charges for early redemption of loans. The Credit Committee meets every week to process all Loan Applications. Members should note that not all loans applied for are successful.
Members are requested to borrow at levels within their repayment capacity. Loans are granted subject to regulations and guidelines laid down by the Credit Union and the Central Bank of Ire- land. It is necessary to provide proof of earnings as well as proof of expenditure e.g. current pay slips and up to date Bank Statements. Loans for Holidays, Car Tax, Car Insurance and Christmas expenses must be paid in one year.
28 BALLAGHADERREEN AND DISTRICT CREDIT UNION LTD. CREDIT COMMITTEE REPORT 2020
Ballaghaderreen & District Credit Union Limited is a member of the Irish Credit Bureau (ICB). We obtain members’ written permission to carry out a credit check on their borrowings with other financial institutions. We also forward information to the ICB on members’ credit history with the credit union on all new loans. The ICB will be replaced by the Central Credit Register (CCR). The CCR was set up by the Central Bank under the Credit Reporting Act 2013. Since 30th June 2017, it is compulsory to submit information to the Central Credit Register (CCR) and also consult the CCR when completing loan applications. Credit information is submitted monthly to the CCR on all loans over €500. Failure to keep loan payments up to date may affect your credit rating with the Irish Credit Bureau (ICB) and the CCR.
In the current economic climate the credit union remains committed to provide affordable finance to members. The credit union will continue the policy of prudent lending. We advise members to avoid money lending agencies charging exorbitant rates of interest by choosing the credit union as a safer alternative. Any member having difficulty with repayments should contact the Manager without delay for advice and assistance. Late payments can affect a member’s credit history.
Our sincere thanks to Billy, Anne, Kathleen and Katrina for their co-operation in the past year.
Jean Anderson LOAN APPROVALS On behalf of Credit Committee Ballaghaderreen & DistrictBREAKDOWN Credit Union Limited PER CATEGORY
LOAN APPROVALS - BREAKDOWN PER CATEGORY
2020 2019
Loan Reason No. € No. €
Home Improvements 108 763,800 147 669,200 Car Loans 141 941,050 143 1,049,050 Bills & Household 27 61,750 43 58,950 Expenses Business Loan 1 18,800 2 28,000 Farming 2 9,500 9 151,000 Car & Home 12 12,370 11 13,050 Insurance Bills & Shopping 4 6,800 4 3,250 Holidays 5 9,500 30 59,600 Wedding\Funeral 8 80,000 14 108,000 Expenses Christmas Loan 12 12,800 14 18,650 Education 17 47,300 31 102,200 Purchase Computer 1 1,700 1 500 Medical\Dental 8 35,600 7 34,500 Household 13 19,750 12 25,550 Furniture\Appliances Miscellaneous 10 21,000 8 40,000 Clear Credit Card 2 15,500 2 8,200 Machinery Repairs 2 11,000 House 4 94,000 Construction/Deposit Car repairs 16 19,950 23 38,750 Land Purchase 1 7,000 0 Equipment Purchase 13 77,100 8 52,000 House purchase 1 30,000 Total 407 2,266,270 510 2,490,450
29 CREDIT CONTROL COMMITTEE REPORT 2020
The primary purpose of the Credit Control Committee is to seek to ensure the repayment of loans by members in accordance with their loan agreements. The Committee meets to review members’ loan repayments, and in particular to review and monitor members’ loans which have fallen into arrears, or members who are experienc- ing difficulties in repaying their loans.
The Credit Control Committee, in conjunction with the Credit Control Officer, engage proactively with members who are experiencing difficulties with repayment of their loans with a view to finding sustainable and work- able solutions. Members who find themselves in difficulty in repaying their loans are asked to contact the Credit Union as soon as possible to discuss their circumstances to see if an alternative repayment plan can be agreed, or the loan restructured in an appropriate manner, to help members get back on track.
The Committee also reviewed the level of bad debts recovered in the financial year ending 30th September 2020. A total of €41,417.00 has been recovered in respect of bad debts for the year.
Credit Control Committee
MEMBERSHIP COMMITTEE REPORT 2020
The number of new members who joined the credit union during the year ended 30th September 2020 was 123 bringing total membership to 4,561. These members of Ballaghaderreen and District Credit Union Limited enjoy the benefits of the credit union by saving together and being able to borrow at a reasonable rate of interest when the need arises. We have now the availability of CUSOP where by members have the facility to have their salaries/ social welfare/pensions paid directly into their credit union account. Members who wish to avail of this service will be issued with BIC and IBAN numbers. After 37 years in existence we are delighted that we continue to attract new members and that people have the confidence in their credit union. We encourage parents to continue to encourage their children to open a credit union ac- count and save regularly, a habit that will stand to them in the future. We would like to remind members to review their Nomination arrangements, particularly if your circumstances have changed or since reaching the age of 16 years. Under current legislation, members who wish to join the credit union must provide certain forms of valid identification, proof of current address and PPS number. We would also like to remind members that savings and loans are insured at no cost to the member, (Terms & Conditions Apply). Finally, we would like to welcome all those members that joined in the last 12 months and look forward to being of service to you in the years ahead.
Jean Anderson Membership Officer Bill Golden, Anne Connaughton & Kathleen Gaffrey Membership Committee
30 REPORT OF THE NOMINATION COMMITTEE 2020
Under section 56B of the Credit Union Act, 1997 (as amended by the Credit Union and Co-operation with Over- seas Regulators Act, 2012) (“the Act”), the Nomination Committee is responsible for identifying, accepting and proposing candidates for election to the Board of Directors. The Nomination Committee is also responsible for: • assisting the Credit Union in performing any obligations under section 23 of the Central Bank Reform Act, 2010 in relation to any candidates proposed to perform pre-approval control functions (as construed in accordance with section 22 of that Act); • Assisting the Credit Union in carrying out any checks which the Credit Union is under taking to enable it comply with its obligations, regarding Fitness & Probity, under section 21 of the Central Bank Reform Act 2010; • Ensuring that there is an appropriate succession plan in place for the Board of Directors. The following have been nominated for election:-
BOARD OF DIRECTORS Board Oversight Committee 2 Vacancies: • Denise Deery (outgoing). 1. Colm Flannery • James Dooney (outgoing). 2. Michael Tully AUDITOR. RBK, RBK House, Irishtown, Athlone, Co. Westmeath. MEMBERS OF THE NOMINATION COMMITTEE ARE • James Dooney. • Gerald Duffy. • Kenneth McDonnell. VOLUNTEERS. The Credit Union is always in need of new volunteers and we invite members to consider taking up a role as a volunteer to help in the running of the Credit Union.
Kenneth McDonnell On behalf of the Nomination Committee
Criminal Justice (Money Laundering and Terrorist Financing) Acts, 2010 to 2018
The Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2018 require Credit Unions to adopt policies and procedures, in relation to their business, to prevent and detect the commission of money laundering and terrorist financing. In order for the Credit Union to comply with this legislation and Central Bank of Ireland Sectoral Guidance, we must apply “customer due diligence” steps to all members prior to the establishment of a business relationship with the member and on an ongoing basis thereafter. This requires the following steps; • Identification and verification of members identity and address. • Identification of beneficial owners. • Obtaining information as to the purpose and intended nature of the account. • Establishing the source of funds - eg. Occupation • Establishing if the account holder is a Politically Exposed Person (PEP) • Conducting on-going monitoring. • Enhanced due diligence where required. In this respect, if you have not recently provided us with up to date identification please bring the following in to us and we will retain a copy for our records: • Evidence of Identity: Either your current Passport or Driving License. • Evidence of Address: Just one recently issued document showing your address such as, for example, a utility bill, bank statement, correspondence from the Revenue Commissioners or Department of Social Protection, household / motor insurance certificate and renewal notice. Other forms of ID may be appropriate in some circumstances – please ask a member of staff and we will make the process as pain-free as possible for you. If you have been asked for up to date Evidence of Identity and Evidence of Address it is essential that you provide the information to us. Failure to do so could result in restrictions being placed on the operation of your account here until you provide us with the information.
31 AMENDMENTS TO STANDARD RULES
Motion 1 That this Annual General Meeting amends the Standard Rules for Credit Unions (Republic of Ireland) by the insertion of a new Rule 1A as follows:
Any reference in these rules to a member present and voting at a general meeting shall be con- strued as including a reference to a member in attendance and voting at a general meeting conducted wholly or partly by the use of electronic communications technology.
Motion 2 That this Annual General Meeting amends Rule 96 of the Standard Rules for Credit Unions (Republic of Ireland) in paragraph (1), by the substitution of “at a time, at a place in the State (where applicable) and in the manner (where applicable)” for “in the State at such date, time and place”,
And by the insertion of a new 96A as follows: 96A (1) The credit union need not hold a general meeting at a physical venue but may conduct the meeting wholly or partly by the use of electronic communications technology as long as all attendees have a reasonable opportunity to participate in the meeting in accordance with this Rule. (2) (a) The credit union may provide for participation in a general meeting by providing or facilitating, for that purpose, the use of electronic communications technology, including a mechanism for casting votes by a member, whether before or during the meeting. (b) The mechanism referred to in paragraph (a) shall not require the member to be physically present at the general meeting. (3) The use of electronic communications technology pursuant to paragraph (2) may be made subject only to such requirements or restrictions put in place by the credit union as are necessary to ensure the identification of attendees and the security of the electronic communications technology, to the extent that such requirements or restrictions are proportionate to the achievement of those objectives. (4) The credit union shall inform attendees, before the general meeting concerned, of any requirements or restrictions which it has put in place pursuant to paragraph (3). (5) The credit union that provides for the use of electronic communications technology for participation in a general meeting by an attendee shall endeavour to ensure, as far as practicable, that— (a) such technology: (i) provides for the security of any electronic communications by the attendee, (ii) minimises the risk of data corruption and unauthorised access, and (iii) provides certainty as to the source of the electronic communications. (b) in the case of any failure or disruption of such technology, that failure or disruption is remedied as soon as practicable, and (c) such technology enables the attendee to: (i) hear what is said by the chair of the meeting and any person introduced by the chair, and (ii) speak and submit questions and comments during the meeting to the chair to the extent that the attendee is entitled to do so under the rules of the credit union. (6) Any temporary failure or disruption of electronic communications technology shall not invalidate the general meeting or any proceedings relating to the meeting. (7) Unless such failure or disruption is attributable to any wilful act of the credit union, the credit union shall not be liable in respect of any failure or disruption relating to the equipment used by an attendee to access a general meeting by electronic communications technology that occurs and which failure or disruption prevents or interferes with the attendee’s participation, by the use of such technology, in the meeting. (8) Where, in the opinion of the board of directors, it is deemed necessary, due to exceptional and unex- pected circumstances, the board of directors may, by resolution, cancel a general meeting at any time prior to the holding of the meeting.
32 AMENDMENTS TO STANDARD RULES
Motion 3 That this Annual General Meeting amends Rule 98 of the Standard Rules for Credit Unions (Republic of Ireland) (a) In paragraph (2): • by the substitution of the following paragraph for paragraph (a): “(a) shall state the date, time, place (where applicable) and manner of holding (where applicable) of the general meeting;”, • in paragraph (c), by the substitution of “;” for “; and”, • in paragraph (e), by the insertion of “and”, • by the insertion of the following paragraph after paragraph (e): “(f) shall, in the case of a general meeting proposed to be held wholly or partly by the use of electronic communications technology, state • the electronic platform to be used for the meeting, • details for access to the electronic platform, • where required by a credit union, the time and manner by which an attendee must confirm his or her intention to attend the meeting, • any requirements or restrictions which the credit union has put in place in order to identify attendees who intend to attend the meeting, • the procedure for attendees to communicate questions and comments during the meeting, and • the procedure to be adopted for voting on resolutions proposed to be passed at the meeting.”
(b) In paragraph (4), by the insertion of “and containing such information” after “in such form”.
And by the insertion of a new Rule 98A as follows:
98 A (1) Notwithstanding Rule 98 but subject to paragraph (2), notice for the purposes of Rule 96A(8) shall be given in the same manner as the notice for the general meeting referred to in Rule 98 but where, in the opinion of the board of directors, giving such notice in that manner is not reasonably practicable, notice shall be given (a) where the credit union has a website, on that website, (b) by email to every member for whom the credit union has an email address, and (c) in at least one national newspaper published in the State and circulating in the area in which the registered office of the credit union is situated, in a local paper and on local radio. (2) Paragraph (1) shall not apply where all members agree in writing to the cancellation, change of venue or change of means of holding the general meeting concerned, or to dispensing with notice for the general meeting.”.
Motion 4 That this Annual General Meeting amends Rule 99(3)(a) of the Standard Rules for Credit Unions (Repub- lic of Ireland) by the substitution of “paragraphs (a), (b), (d) (e) of paragraph (2)” for “paragraphs (a), (b), (d), (e), (f) of paragraph (2)”. The Print Depot 094 9862708