Safe, Strong, Secure ANNUAL ACCOUNTS. For The Year Ended 30 th September 2010 of Ballyshannon Credit Union Ltd. AND FINANCIAL STATEMENTS

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1 ANNUAL ACCOUNTS AND FINANCIAL STATEMENTS For The Year Ended 30 th September 2010 of Ballyshannon Credit Union Ltd. A.G.M. Notice The 49 th Annual General Meeting of Ballyshannon Credit Union Ltd. will take place in Dorrian s Hotel, Ballyshannon on Thursday 9 th December 2010 at 8.00 p.m. Safe, Strong, Secure REGISTERED NUMBER: 8 CU

2 1. Ascertainment of Quorum 2. Adoption of Standing Orders 3. Minutes of A.G.M 4. Report of Board of Directors 5. Report of Treasurer 6. Report of the Auditor 7. Report of Supervisory Committee. 8. Report of Dividend and Honorarium 9. Report of Credit committee 10. Report of Credit Control AGENDA 11. Report of the Membership Committee 12. Report Nominations Committee 13. Appointment of Tellers 14. Election of Auditor 15. Election of Supervisors 16. Election of Directors 17. Amendment of Rules 18. Other Business 19. Election Results 20. Close of Meeting VACANCIES This year there are vacancies for 5 Directors and 2 Supervisors. Nominations for these vacancies should be in writing, signed by the proposer and seconder and also the nominee, so as to indicate his/her consent. This shall be sent to the Secretary of the Nominations Committee, so as to arrive before 4pm on Tuesday the 7 th December 2010 in a sealed envelope clearly marked NOMINATIONS. A member may propose, second or accept a nomination for any vacant position. Forms are available at the Credit Union Office, Ballyshannon. creditunion.ie Ballyshannon Credit Union Ltd. join the Irish Credit Bureau 2 The Board of Directors have a responsibility under Credit Union Act and consumer credit legislation to safeguard the assets of the Credit Union and also to ensure that members do not become over indebted. It was with this responsibility in mind that the Board of Directors of Ballyshannon Credit Union took the decision to join ICB. ICB membership will help assist in minimising bad debts and other costs of credit and ensuring that as much information as possible is obtained to assess a member s ability to repay a loan.

3 SERVICES AVAILABLE TO MEMBERS Secure savings Competitive loans Personal Insurance Home Insurance Motor Insurance Travel Insurance Bureau de Change Western Union Money Transfer Credit Union Gift Voucher [no fees] Credit Union drafts [no fees] Standing order payment facility Home Computer Initiative Laser Card Payments ILCU ROI A4 Versions:Layout 1 12/11/ :15 Page 9 ILCU ROI A4 Versions:Layout 1 12/11/ :15 Page 4 LOANS SAVINGS This Christmas, let Santa be the only one in the red. Times are hard and though Christmas is a time of joy, it puts a lot of pressure on families. It s tempting to borrow beyond our means, and end up with a sack full of debt. But you don t have to spend next year living with the Ghost of Christmas Past. Talk to your credit union or visit creditunion.ie - we re there to support each other. Credit Union Loans. Look at things differently and the sky s the limit. The two most important things about a loan are, being able to borrow the money and being able to repay it. As a member, you have a track record. And, as your credit union is there to benefit you and your fellow members you also get the support of people who have your best interests at heart. Talk to your credit union about loans or visit creditunion.ie Loans are subject to approval. Terms and Conditions apply. Credit Unions in the Republic of Ireland are regulated by the Financial Regulator. W E L O O K A T T H I N G S D I F F E R E N T L Y Loans are subject to approval. Terms and Conditions apply. Credit Unions in the Republic of Ireland are regulated by the Financial Regulator. W E L O O K A T T H I N G S D I F F E R E N T L Y 3

4 Directors Report for the year ended 30 th September 2010 The directors submit herewith their Report and Audited Accounts for the year ended 30th September 2010 for consideration at the Annual General Meeting. 1 Results The results for the year ended 30th September 2010 are set out on page 8. 2 Important Events Since The Year End There were no important events since the year end. 3 Dividends & Interest Rebate The Directors propose a dividend for the year ended 30 th September 2010 of 1.25% amounting to 152,623. The proposed dividend will be submitted for approval at the 2010 Annual General Meeting. 4 Directors Interests The Directors have had no material interest in any contract with the Credit Union during the year other than those disclosed in the accounts. 5 Auditor S.MacRory & Co. has expressed willingness to continue as Auditor in pursuant to S.115 of the Credit Union Act Staff Welfare The well being of the Credit Unions employees is safeguarded through strict adherence to the health and safety standards. The Credit Union complies with the provisions of the Safety, Health and Welfare at Work Act, Signed on behalf of the Directors John Maguire, Director Thomas Mc Guinness, Director 4

5 Statement of Directors Responsibilites The Credit Union Act, 1997 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 its Income and Expenditure for that period. In preparing those financial statements, the directors are required to select suitable accounting policies and then apply them consistently; make adjustments that are reasonable and prudent; prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Credit Union will continue in business. The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Credit Union and to enable them to ensure that the financial statements comply with the Credit Union Act,1997. 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. John Maguire, Director Thomas Mc Guinness, Director Statement Of Supervisory Committee s Responsibilities The Credit Union Act, 1997 requires the appointment of a Supervisory Committee which will 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 Supervisory Committee: John McLean, Supervisor 5

6 Independent Auditors Report to The Members of Ballyshannon Credit Union Ltd. We have audited the financial statements of the Credit Union for the year ended 30 September 2010 on pages 8 to 14 which comprise the Income and Expenditure Account, balance Sheet and the related notes. These financial statements have been prepared under the accounting policies set out in the Statement of Accounting Policies 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. 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 auditors 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. Respective Responsibilities of the Directors and Auditors As described on page 5 the Credit Union s directors are responsible for the preparation of financial statements. It is our responsibility to form an independent opinion, based on our audit, on those statements and to report our opinion to you. We report to you our opinion as to whether the financial statements give a true and fair view in accordance with Generally Accepted Accounting Practice in Ireland and are properly prepared in accordance with the Credit Union Act,1997. We also report to you whether in our opinion, proper accounting records have been kept by the credit union and whether the information given in the Director s Report is consistent with the financial statements. In addition we state whether we have obtained all the information and explanations necessary for the purposes of our audit and whether the credit union s balance sheet and income and expenditure are in agreement with the books of account. We read the other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. This other information comprises only the Director s Report, the Chairman s Statement, the Treasurer s Report and the Supervisory Committee Report. 6 We consider the implications for our report if we become aware of any apparant misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other information. These financial statements have been prepared under the accounting policies set out therein.

7 Basis of opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and whether the accounting policies are appropriate to the Credit Union s circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. Opinion In our opinion the financial statements give a true and fair view of the state of the Credit Union s affairs as at 30th September 2010 and of its Income & Expenditure for the year then ended and have been properly prepared in accordance with the provisions of the Credit Union Act,1997. ILCU ROI A4 Versions:Layout 1 12/11/ :16 Page 10 We have obtained all the information and explanations we consider necessary for the purpose of our audit. In our opinion, proper books of account have been kept by the Credit Union. The financial statements are in agreement with the books of account. Credit Union. Where your savings give you a say. Aregularsavingshabit isimportant, whetheryou resaving topay for something specific or for a rainy day. The difference between your credit unionandothersavingaccountsisyoursavingsmakeyou part ofyourcredit union. Welookat thingsdifferently. Talk toyourcredit unionabout savingorvisit creditunion.ie SAVINGS In our opinion the information given in the Director s Report on page 4 is consistent with the financial statements. Registered Auditors & Accountants S. MacRory & Co., Chartered Accountants, Market House, Market Square, Letterkenny, Date: 3 rd November 2010 Loans are subject to approval. Terms and Conditions apply. Credit Unions in the Republic of Ireland are regulated by the Financial Regulator. W E L O O K A T T H I N G S D I F F E R E N T L Y 7

8 Income and Expenditure Account for the year ended 30 th September Schedule INCOME Interest on Members Loans 646, ,085 Other Interest Receivable and Similar Income 1 142, ,071 Net Interest Income 789, ,156 Other Income 2 3,317 3,257 Profit on sale of property TOTAL INCOME 792, ,413 EXPENDITURE Salaries 148, ,223 Other Management Expenses 3 383, ,925 Depreciation 44,299 37,193 Bad Debts Recovered (3,996) (5,960) TOTAL EXPENDITURE 571, ,381 EXCESS OF INCOME OVER EXPENDITURE FOR THE YEAR 220, ,032 There are no recognised gains or losses other than the income and expenditure for the above financial periods. On behalf of the Credit Union Treasurer Thomas McGuinness Date: 3/11/10 Member of Supervisory Committee: John McLean Date: 3/11/10 Member of the Board of Directors: John Maguire Date: 3/11/10 W E L O O K A T T H I N G S D I F F E R E N T L Y 8

9 Balance Sheet as at 30 th September Notes ASSETS Cash and Balances at Bank 292, ,609 Deposits and Investments 7,066,332 5,912,279 Loans to Members 6,267,484 6,421,167 Less: Provision for Bad and Doubtful Debts (338,247) (163,247) Tangible Fixed Assets 2 1,219,877 1,225,610 Debtors and Prepayments 7,239 15,003 TOTAL ASSETS 14,515,374 13,525,421 LIABILITIES Members Deposits Other Liabilities and Charges 28,818 28,746 MEMBER S RESOURCES Members Shares 12 12,538,752 11,570,557 Statutory Reserve 1,163,781 1,115,781 Other Reserves 3 784, ,337 TOTAL LIABILITIES 14,515,374 13,525,421 Approved and authorised for issue on behalf of the Credit Union: Treasurer: Thomas McGuinness Date: 3/11/10 Member of Supervisory Committee: John McLean Date: 3/11/10 Member of Board of Directors: John Maguire Date: 3/11/10 Credit unions have been looking at things differently in Ireland since 1958 providing affordable loans, secure savings and shared surplus among all members. The Irish Credit Union Movement is the most successful in the world, with almost 3 milion members. That success is down to caring about people and taking care of their money. Be part of it. Visit us at 9

10 Schedules to The Financial Statements for the year ended 30 th September 2010 Schedule 1 - Other Interest Receivable and Similar Income Deposit Interest: Bank & Deposit A/Cs Return on Investments 142, ,071 TOTAL PER INCOME AND EXPENDITURE ACCOUNT 142, ,071 Schedule 2 - Other Income Membership Fees Foreign Exchange and Insurance Commission 3,150 3,112 TOTAL PER INCOME AND EXPENDITURE ACCOUNT 3,317 3,257 The wise choice for student loans. 10 College is expensive. And there s a lot more to pay for than fees. Your credit union will help you by tailoring a loan to suit your needs and circumstances. Not a member? Contact your local credit union or visit creditunion.ie and find out how you can benefit. Your credit union is run by people like you, for people like you we ve been there.

11 Schedule 3 - Other Management Expenses Schedules to The Financial Statements for the year ended 30 th September Treasurer s Honorarium 1,929 2,269 Staff training & uniforms 4,476 2,430 Management expenses 1, Rates 8,553 9,467 General Insurance 9,644 15,592 Cuna Insurance 52,702 41,582 Light and heat 4,551 4,453 Cleaning 2,677 3,063 Repairs and maintenance 7,862 9,522 Printing, postage and stationery 10,941 11,254 Advertising 2,421 3,085 Telephone 3,267 3,327 Computer costs 2,389 8,213 Travel Chapter & Seminar 3,652 4,543 AGM Expenses 2,504 2,002 Fees to IFRSA 664 2,141 Legal and professional 5,580 4,820 Consultancy fees 6,645 4,569 Audit 9,075 9,150 Affiliation fees & Int Dev Fund 16,896 10,419 Bank charges & interest 7,273 (375) Bad debts 39,038 28,247 Doubtful debts 175,000 70,000 General expenses 4,333 5,282 TOTAL PER INCOME AND EXPENDITURE ACCOUNT 383, ,925 Visit us at: 11

12 Notes to The Financial Statements for the year ended 30 th September SIGNIFICANT ACCOUNTING POLICIES a). Accounting Convention The accounts are prepared under the historical cost convention. b). Income Recognition Interest on Members Loans is recognised when payment is received as specified in Section 110(1)(C)(i) of the Credit Union Act, 1997, (i.e. on a cash basis). Investment Income is recognised when received or irrevocably receivable. c). Depreciation. Depreciation is provided on a straight line basis over the expected lives of Tangible Fixed Assets at the following annual rates: Freehold Premises 2 % Fixtures & Equipment 10% Computers 20% d). Investments Bank deposits are valued at the deposit amount plus any accrued interest. Other investments are valued at the lower of cost and net realisable value except that where return of capital is guaranteed the carrying value is not lower than the capital guaranteed amount. An investment reserve has been established to comply with guidance issued by the Registrar of Credit Unions in April 2008 prohibiting the distribution of investment income which will be received more than 12 months after the balance sheet date and withhold from distribution in dividends the value of any temporary write-down of capital guaranteed investment income whose current surrender value is less than the amount guaranteed at maturity. e). Bad and Doubtful Debts. Bad debts written off are included in other Management Expenses. Bad debts recovered are included in the Income and Expenditure Account. Provision for doubtful debts is made against current loan balances on the basis of resolution 49/03 of the Irish League of Credit Unions. f). Dividends Dividends are recognised in the financial statements when they have been appropriately approved or authorised by the shareholders and are no longer at the discretion of the Credit Union. 12

13 g). Reserves The Credit Union maintains reserves to support its operations, provide a base for future growth and protect against the risk of unforseen losses. The following reserves are maintained: - a Statutory & Additional Regulatory Reserve as required by law. These are realised, unrestricted and non-distributable. - an Unrealized Income Reserve contains investment income not receivable within 12 months of each Balance Sheet date. Such income is deemed to be realised and distributable when it becomes within 12 months of receipt; & - a General Reserve is maintained to fund the development of the Credit Union and to pay dividends in the future, if recommended by the Directors and approved at General Meeting. 2. TANGIBLE FIXED ASSETS New Fixtures & Computers Total Premises Equipment Cost At 1 st October ,329, ,209 1,495,444 Additions 37,870 37,870 At 30 th September ,329,235 37, ,209 1,533,314 Depreciation At 1 st October , , ,138 Charge for the year 26,585 7,574 10,140 44,299 At 30 th September ,804 7, , ,437 Net Book Values At 30 th September ,150,431 30,296 39,150 1,219,877 At 30 th September ,177,016 49,290 1,226, OTHER RESERVES General Regulatory Investment Doubtful Reserves Reserves Reserve Debt Res. At 1 st October , , , , ,337 Total recognised gains and losses relating to the year 220, ,813 Dividend Paid (220,426) (220,426) Transfer to Statutory Reserve (48,000) (48,000) Transfer to Doubtful Debt Reserve Transfer from General Reserve 21,299 21,299 Transfer to Regulatory Reserve 115,000 (115,000) At 30 th September , , , ,023 Total 13

14 Notes to The Financial Statements for the year ended 30 th September Proposed Dividends Rate % Rate % Dividends on Shares , , Insurance Against Fraud The Credit Union has insurance against fraud in the amount of 2,600,000 in compliance with Section 47 of the Credit Union Act, Honorarium To Treasurer The directors recommend that the treasurer be paid an honorarium of 2,500 (2009: 2,500) for the year ended 30 th September Rates Of Interest Charged On Members Loans. Rate of interest charged on members loan as at 30 th September 2010 is %. (APR 11.02%). Secure by shares loan interest rate is 6.75% (APR 6.98%) 8. Related Party Transactions Loans amounting to 41,085 in total, were granted to officers of the Credit Union during the period. At 30 th September 2010 the balance outstanding on loans to officers and related parties amounted to 287,670. At 30 th September 2010 savings to officers and related parties amounted to 236, Post Balance Sheet Events There were no post balance sheet events that would effect the financial statements. 10. Capital Commitments The Credit Union did not have any capital commitments at 30 th September Contingent Liabilities The Credit Union did not have any contingent liabilities at 30 th September Members Shares Regular Share Accounts 8,687,525 8,092,412 Special Share Accounts 3,604,525 3,224,902 Cashsave Accounts 246, ,243 Total as per Balance Sheet 12,538,752 11,570,557

15 Ballyshannon Credit Union Ltd. Social Responsibility One of the objectives of Ballyshannon Credit Union Ltd is to seek to bring about Human & Social Development. To achieve this objective Ballyshannon Credit Union Ltd gladly supported the following worthwhile community, youth and sporting groups in the past year: Social responsibility requests for sponsorship Aodh Ruadh u 14 Hurlers Ballyshannon Business Chamber Ballyshannon Folk Festival Ballyshannon Musical Society Ballyshannon North West Hospice Support Group Ballyshannon Writers Group Gaelscoil Eirne N.S. Colaiste Cholmcille St Macartans N.S Society of St Vincent de Paul Rory Gallagher Festival Ballyshannon Credit Union Ltd. Still Lending Ballyshannon Credit Union Limited is still servicing the lending needs of members. In the past year over 1000 loans were issued to members to the value of E2.9m Go shopping for a car. With loans like these, you d be off your trolley not to. A credit union car loan is just that - a loan. No gimmicks! You borrow the money, you buy the car, you pay back the loan at an agreed pace or faster if you re fortunate enough to be able to. Join your credit union and you re on the road to the car of your dreams. Contact your local credit union or visit creditunion.ie 15

16 New Website Visit our new interactive website at Members can now register for a PIN number allowing them to check their balances and make loan applications on-line. OPENING HOURS Monday: 10am - 4pm Tuesday: 10am - 4pm Wednesday: CLOSED Thursday: 10am - 4pm Friday: 10am - 8pm Saturday: 10am - 1pm Ballyshannon Credit Union Limited Comhar Chreidmheas Beal Atha Seanaigh Teo CU AT YOUR PLACE Print & Design by Browne Printers Ltd., creditunion.ie