2017 AGM MEETING - Ballincollig Credit Union
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2017
Annual Report
& Accounts
o t ic e o f AGM
N
AGM MEETING
Oriel House Hotel, Ballincollig Notice to Members:
Don’t forget your Credit Union Book
on Wednesday 28th February 2018 when attending the AGM
at 7.30pm
2017
Annual Report
& Accounts
Agenda for Annual General Meeting
1. Acceptance of proxies (if any) by the Board of Directors
2. Ascertainment that a Quorum is present
3. Adoption of Standing Orders
4. Reading and Approval (or correction) of Minutes of last Annual General
Meeting - 14th June 2017
5. Report of Board of Directors
6. Declaration of Dividend and Rebate of Interest
7. Appointment of Tellers
8. Report of the Nomination Committee
9. Balloting on Vacancies Board of Directors and the Board Oversight
Committee
10. Report of the Auditor (Consideration of Accounts)
11. Report of the Board Oversight Committee
12. Report of the Membership Committee
13. Report of the Credit Committee
14. Report of the Credit Control Committee
15. Any Other Business
16. Election Results
17. Close of meeting
Notice of Elections
Elections will take place to fill the following vacancies:
Elections will be held to fill the following vacancies:
• 5 vacancies on the Board of Directors
• 1 vacancy on the Board Oversight Committee
• the position of Auditor.
Due to a change in the Credit Union Act, 2012, nominations cannot be taken
from the floor.
CREDIT UNION 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 darkness, light;
and where there is sadness, joy.
O Divine Master, grant that I may 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.
Amen
2017
Annual Report
& Accounts
Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting of
Ballincollig Credit Union Ltd. will take place on
Wednesday 28th February 2018 at 7.30pm
in the Oriel House Hotel, Ballincollig.
_____________
Paul O Mahony
Secretary
Payment Services Notice:
Please note that a copy of the Regulation 53 Framework contract, which governs your relationship
with Ballincollig Credit Union Limited as a Payment Service Provider, can be downloaded at www.bcu.ie
Company Information
Chairperson
John Jeffers (appointed 14/06/2017)
Nicola O’Connell (resigned 14/06/2017)
Hon. Secretary
Paul O Mahony (appointed 14/06/2017) Gary O’Brien (resigned 14/06/2017)
Directors
Mairead Perez (appointed 14/06/2017) Oleksandr Klymenko (appointed 14/06/2017)
Jennifer Kenrick (appointed 14/06/2017) Paul Wuensche (appointed 14/06/2017 - resigned 13/12/17)
Ann Ebre Anaba Ian Brennan
Maura O’Driscoll Bobby Murphy
Robert O’Flynn Breda Callanan (resigned 14/06/2017)
Paddy McCarthy (resigned 14/06/2017) John Curtin (resigned 14/06/2017)
Stella McVeigh (resigned 14/06/2017)
Credit Committee
Bob O’Hea Mary Coleman
Margaret McGeough (resigned 27/09/2017) Breda Callanan
Board Oversight Committee
Padraig Corkery (appointed 14/06/2017) Joe Dillon (appointed 14/06/2017)
Stella McVeigh (co-opted 29/11/17) Catherine Fennell (resigned 08/09/2017)
John Jeffers (resigned 13/06/2017)
Manager
Simon Foley
Registered Office
Credit Union House, Harrington Street, Ballincollig, Co.Cork Reports
Auditors • Committee Reports are available
Crowleys DFK Partnership, 5 Lapps Quay, Cork from www.bcu.ie
Bankers
Allied Irish Bank, Main Street, Ballincollig, Co.Cork • These reports are also available at
the counter in Harrington Street
Solicitors
O’Donnell, Breen Walsh, O’Donoghue • The Reports will also be available
Trinity House, 8 George’s Quay, Co.Cork on the night of the AGM
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2017
Annual Report
& Accounts
Minutes of AGM 2016
Wednesday 14th June 2016 @ 7:30pm Oriel Hotel, Ballincollig
Mrs Nicola O Connell welcomed everyone to the 45th AGM and invited all who wished to recite the Credit Union
Invocation to do so. A Quorum was present for the meeting and the Standing Orders were proposed by Caroline O
Keeffe and Seconded by John Curtin.
A query as to timeframe for notifying members of the AGM was raised,the Chairperson got approval from the meeting
by a way of show of hands to proceed with the meeting. Minutes of the 2016 meeting were proposed by John Jeffers
and Seconded by Martin Sisk.
Chairpersons Address:
Mrs Nicola O Connell welcomed everyone to the meeting on behalf of Board of Directors and apologised for the delay
in holding the AGM. Ballincollig Credit Union is committed to our community and has expressed this commitment
through a variety of ways. Over the years and at all times the board is directed to improving the economic and social
wellbeing of all members. The Board is recommending a dividend of 0.25% and a rebate of 10%. Proposed Tom O
Donoghue and a Seconded by Bobby Murphy. Chairperson Address was proposed by John Curtin and Seconded by
Richard Linehan
Operations Report:
Ms Rhona Quinn presented that our membership now stands at 19,053 and continues to increase each year. Our asset
size stands at €67 million, up €4 million from 2015. Our income at €2.35 million has declined and this decline is due to
lower investment income
In the year to September 2016 we achieved a return of 1.2% on our investments compared to 1.67% in 2015. This is in
line with what we had forecast. The Central Bank requires that we hold at least 20% of our unattached shares in short-
term deposits. We have liquidity of 26.4%, well in excess of the regulatory requirement. During the year we granted
3,064 loans totalling €11.5 million, which was an increase of 126 loans and €0.9 million on 2015. The level of arrears
stands at €1,594,260. This is down 3.3% on last year. The Bad Debt charged off for the year was €147,753. And this
year we collected €299,710 from charged-off loans, which is an increase of €20,464 on 2015.We have strong regulatory
reserves, in excess of 10% and total reserves of 14.5%. Proposed by Maura O Driscoll and Seconded Martin Sisk
Board Oversight Committee Report:
Mr John Jeffers presented the report and noted the function of the Board Oversight Committee is to assess whether
the Board of Directors has operated in accordance with the governance requirements set out in legislation, regulation
and guidance. The Board Oversight Committee is required to report to the Board on its assessment of whether the
Board has operated in accordance with the required governance provisions. The Board Oversight Committee are
pleased to report that in our opinion your Board, both individually and collectively, operated your credit union with
honesty and integrity, motivated by the best interests of you, the members, and believe that in as far as is reasonably
practicable, they, the Board of Directors, are compliant in respect to the Credit Union Acts. Proposed by Vicky O Leary
and Seconded by Caroline O Keeffe.
Excerpt from the Auditors Report:
In their opinion the Financial Statements, gave a true and fair view of the state of the Credit Union’s affairs as at 30th
September 2016. They had been prepared in accordance with generally accepted Accounting Practice in Ireland. They
had obtained all the information and explanations which they considered were necessary for the purposes of their
audit. These included all documentation regarding FRS 102 Accounting Practices. In their opinion proper accounting
records had been kept by the Credit Union. The financial statements were in agreement with the accounting records.
Fiona answered queries from members relating to the accounts. Proposed by Kathleen Dwyer and Seconded Pat Moore.
Nomination Report:
Mrs Stella McVeigh presented the Nominations report which included the responsibility of the committee in ensuring
that their volunteers with necessary skills and knowledge to fill the various vacancies on the Board of Directors, Board
Oversight Committee and other committees. A Recruitment drive took place to attract prospective volunteers through
notices in the local newsletters, social media and two open evenings in the credit union this received positive response
and we had seven volunteers. That now has reduced to six. Proposed by Maria Kierse and Seconded John Curtin
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2017
Annual Report
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Minutes of AGM 2016 Continued continued
Membership Committee Report:
Mrs Anne Ebere Anaba presented that in 2016, we were successful in opening 716 new accounts bringing our total active
membership to 14,375. Proposed by Anne Marie Cosgrove and Seconded by Martin Sisk
Credit Control Report:
Mr John Curtin stated that the PEARLS A1 ratio for 2015 was at 11 % which measures the level of delinquent accounts
against the total value of the loan book and it is down to 7.8% in 2016, every one percentage point is worth €200,000
less delinquent accounts.
Proposed by Ann Ebere Anaba and Seconded by Ian Brennan
Credit Committee Report:
Mr Bob O Hea presented that during the year under review 3,064 loans were paid out amounting to a total of €11.5m,
an increase of €1.5m. Vehicles, First Time Borrowers, Secure Loans, Home Improvements, Holidays, Engagements/
Weddings, Special Student Loans
Proposed by John Curtin and Seconded by Catherine Fennell.
Finance/Investment Committee Report:
Mr Paddy McCarthy highlighted that deposits increased by €4m last year. The level of interest on our investments is
continuously dropping. Over the last number of years our investment advisers have been diversifying the portfolio and
at the moment we have about 16 different counter-party investments. We have €54m of unattached shares as at end
September 2016 Proposed by John Curtin and Seconded by Caroline O Keeffe
Marketing Report:
Mrs Nicola O Connell presented the report which included highlights of 2016. This included our Credit Union School
Quiz, The School Poster Competitions and the Loan Ranger Campaign. On page 12 of the Committee Reports, you can
see the list of all of the sponsorship that we have given out through the year. Proposed by Ita Walsh and Seconded
by Vicky O Leary.
Tellers were appointed for the counting of the Ballot Papers, Grace Twomey, Ken Brady, Cormac Manning. Mrs O Connell
asked all prospective volunteers to give a brief introduction of themselves to the meeting. The Chairperson asked the
members to cast their vote for six vacancies on the Board of Directors and two vacancies for the Board Oversight
Committee.
While the vote was being counted Mrs O Connell proposed that International Development Fund of €5000 would be
split between various organisations
• Marymount Hospice €1000
• Ballincollig Family Resource Centre €1000
• Cork Simon Community €500
• Ballincollig Men’s Shed €500
• Pieta House €500
• Ballincollig SVP €500
• International Development Fund €1000
Proposed by Vicky O Leary and Seconded Bob O Hea
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Minutes of AGM 2016 Continued continued
Notice of Motion - Amendment to Rules
Rule 13 (2)
That this annual general meeting agrees to amend Rule 13(2) of The Standard Rules of Credit Unions (ROI) to read as
follows:
(2)A person shall be treated as having the qualification required for admission to membership of the credit union if he/
she is a member of the same household as, and is a member of the family of, another person who is a member of the
credit union and who has a direct common bond with those other members. However, a child or step-child of a member,
where such child or step-child is under the age of 18 years and living outside the common bond but resident in the
Republic of Ireland or the United Kingdom, shall not be precluded from membership of the credit union. Proposed by
Vicky O Leary and Seconded by Mark Horgan
Mrs Nicola O Connell thanked the retiring directors Mr Paddy McCarthy, Mr John Curtin, Mrs Stella McVeigh, Mr Gary
O Brien and Mrs Breda Callanan for their service and commitment to BCU over the years.
Results:
Crowley’s DFK were elected returning Auditors
Board Oversight Committee
• Joe Dillon (3 years)
• Padraig Corkery( 2 years)
Board of Directors
• John Jeffers - 3 years
• Paul O Mahony - 3 years
• Jennifer Kennrick - 2 years
• Mairead Perez - 2 years
• Oleksandr Klymenko - 1 year
• Paul Wuensche - 1 year
Proposed by Tom O Donnell and Seconded by John Curtin
Mrs Nicola O Connell closed the meeting and asked for all board members to stay behind
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2017
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Standing Orders
Voting 11. The Chairperson may at his/her discretion, extend
the privilege of the floor to any person who is not a
1. Each member shall be entitled to one vote member.
irrespective of his/her shareholding, in accordance
with Standard Rule 139. 12. Matters not covered by the Agenda may be
introduced under “Other Business” at the Discretion
of the Chairperson.
Election Procedure
13. The Chairperson’s decision on any matter relating to
2. A ballot paper for the election of the Board and the these Standing Orders or Interpretation of the same
Board Oversight Committee, where applicable, will shall be final.
be distributed to each member at the A.G.M. as per
the Credit Union Act (Amended 2012). 14. In accordance with Standard Rule 132 (1) no
member shall have more than one vote on each
3. Election to the Board of Directors, to the Board question at any general meeting of the Credit Union
Oversight Committee, and the position of Auditor or any adjournment thereof irrespective of his/her
shall be by a majority vote and by secret ballot. shareholding, or the number of accounts in his/her
name in the Credit Union provided, however, that
Motions except in voting at elections, the presiding member
shall have a second or casting vote in the event of
4. All motions from the floor of the A.G.M. must be equality of voting. Voting by proxy shall be allowed
proposed and seconded by members present at the only when a member other than a natural person
A.G.M. and moved by the proposer. If the proposer votes through a representative, who is a member of
is absent when the motion is called, the motion shall the group, duly authorised in writing for that purpose
be deemed to have failed. and accepted as such by the Board of Directors. Refer
to Standard Rule 138 also re-election procedure.
5. A proposer of a motion may speak for such period as
shall be at the discretion of the Chairperson of the 15. Any matter to be decided upon by vote at the A.G.M.
meeting and shall have the right of reply before the shall, unless otherwise expressly provided for by the
motion is put to the meeting for a vote. law or the rules, be decided upon by simple majority.
6. In exercising his/her right of reply, a proposer may Suspension of Standing Orders
not introduce new material.
16. Any one of these Orders or all of these Standing
7. The seconder of the motion shall have such time as Orders may be suspended on a motion to this effect
shall be allowed by the Chairperson to second the receiving a two-thirds majority of those present and
motion. entitled to vote.
8. Members are entitled to speak on any such motion
and must do so through the Chair. All speakers to Alteration of Standing Orders
any motion shall have such time as shall be at the
discretion of the Chairperson. 17. Standing Orders may be amended or altered at a
general meeting and only if a motion to this effect
9. The Chairperson shall have the absolute right has received a two-thirds majority of those present
to decide at any time when a motion has been and voting.
sufficiently discussed and may put the motion to the
meeting giving the proposer the right of reply before Adjournments
doing so.
18. Adjournments of the AGM shall take place only in
Miscellaneous accordance with Standard Rule 132.
10. The Chairperson of the Board of Directors shall
be the Chairperson of any general meeting, except
where he/she is not available, and then it shall be
the Vice-Chairperson, except where he/she is
not available, in which case the Board shall decide
amongst themselves who shall act as Chairperson of
any general meeting.
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2017
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Chairperson’s Address
Ladies & Gentlemen,
I am very pleased to welcome each one of you here tonight to our 46th Annual General Meeting (AGM) and
to present to you the address on behalf of your Board of Directors for the year ended 30 September 2017.
Your Credit Union has been at the heart of our community (Common Bond Area) for over forty six years,
from its humble beginnings in 1972 issuing its first loan of £50.00 (€63.50) on your behalf for to facilitate a
person to undergo a hairdressing course to where we are today in 2018.
The Credit Union on your behalf has at all times strived towards improving the economic and social
wellbeing of all our members. It has grown beyond the wildest dreams of its founding members. The
membership of our Credit Union today owes enormous gratitude to the founding members for their
foresight and relentless commitment out of which a vital community resource has successfully grown. No-
one back in the year1972 could have envisaged the great success of the overall Credit Union movement.
The past year has seen a mixture of steady performance and significant focus on developing and implementing
the strategic development plan. All aspects of our business have seen growth and our total assets now
exceeds €71million.There has been a continuing focus on increasing our loan book which is the main source
of income, our efforts will continue to focus on increasing the growth in loans. The income our Credit
Union received from investments decreased as the return from the markets reduced across the European
Union (EU). Current advice is that this is likely to continue for the foreseeable future.The low interest rate
pursued by the European Central Bank (ECB) is affecting investment income, this reduction in income puts
pressure on our loan book to produce the income necessary to cover expenses, maintain our reserves and
pay a dividend to our members
The Board has approved and proposes to pay a dividend of 0.125% on shares and a 10% rebate of loan
interest paid by members.While this is a reduction from last year, the dividend and rebate reflect the current
financial position as we continue to build up a solid base for our Credit Union to grow and prosper in the
future whilst ensuring that our capital reserves meet our regulatory requirements.
Your Board has met on 16 occasions during the financial year 2016/2017 and has fully embraced the
requirements under the Credit Union and Co-Operation with Overseas Regulations Act 2012. Board
members are required to give at least two (2) hours per week to their duties. They give that and more
presently and I thank them for the sterling work completed and their continued commitment. I would also
like to thank all the Committee members for their sterling commitment, the Management team and the
front line staff who contribute so much to the continued success of our Credit Union. As an organisation
we in this Credit Union are extremely fortunate to have such dedicated committee members and staff who
at times during the past financial year has given over and above for which they deserve all of our heartfelt
thanks. Members of your Board Oversight Committee attended at all Board meetings and we the Board
thank them for that.
Finally, I would like ask that you encourage the younger generation to become members and to support this
organisation by volunteering to sit on Committees, Board Oversight and the Board. I thank all the members
for your continuing support and loyalty to our Credit Union.
Acknowledgements
I would like to thank Catherine Fennell (Board Oversight Committee) and Paul Wuensche (Board of
Directors) who resigned during the year. To the staff members Ann Quinn, Peg Hayes and Helen Deasy
who retired during the year, I would like to thank them for their contribution and commitment to the
Credit Union and wish them well in the future.
I also wish to remember all those Members who have passed away during the year. On behalf of Ballincollig
Credit Union, I extend our sympathy to the families and relatives of our deceased members.
I invite you to please read the full content of this annual report
________________
John Jeffers
Chairperson
6
2017
Annual Report
& Accounts
Report of the Board Oversight Committee
To the Members of Ballincollig Credit Union Ltd
This report covers the period since the members last met in Annual General Meeting on the 14 June 2017 until this
AGM. Following elections by you the members, during the last AGM, the following were elected Mr. Padraig Corkery and
I. Mrs. Catherine Fennel who had been elected at the previous AGM resigned on the 08 September 2017.
On 11 October 2013 the commencement of certain sections of the Credit Union & Co-operation with Overseas
Regulators Act 2012 replaced the Supervisory Committee of all credit unions with a Board Oversight Committee. Some
of the functions that were previously the responsibility of the Supervisory Committee have now been taken over by the
Internal Audit function including circularisation of members and checking bank reconciliations. The Board Oversight
Committee form part of the new governance structure in credit union along with the Risk Management Officer,
Compliance Officer and the Internal Audit Function.
The function of the Board Oversight Committee is to assess whether the Board of Directors has operated in accordance
with the governance requirements set out in legislation, regulations and guidance. The Board Oversight Committee is
required to report to the Board on its assessment of whether the board has operated in accordance with the required
governance provisions.
Challenges remain for 2018 and we feel that the principal matter for the newly elected Board to deal with is to continue
to find innovative ways to get a reasonable return for you its members from the considerable amount of funds available.
The members of the Board Oversight committee like the Board of Directors are elected by you, they act on your behalf
to oversee the function of the board, given that they volunteer and the ever increasing work load. The Board Oversight
Committee are pleased to report that in our opinion your board collectively operated your Credit Union motivated
by the best interest of you the membership and believe that in as far as is reasonably practicable, they the “Board of
Directors” are compliant in respect of the Credit Union Acts.
Board Oversight Committee
________________
Joe Dillon
Chairperson
________________
Padraig Corkery
Member
Reports
• Reports are available from www.bcu.ie
• These reports are also available at the counter in Harrington Street
• The Reports will also be available on the night of the AGM
72017
BALLINCOLLIG CREDIT UNION LIMITED
HOLIDAY LOANS
Annual Report
& Accounts
want to splash
about?
We’ve got the flexible
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Have you had your Credit ReUnion?
For more information call us on 021 487 2305
or check out www.bcu.ie
Loans are subject to approval. Terms and conditions apply. If you do not meet the repayments on your loan, your
account will go into arrears. This may affect your credit rating which may limit your ability to access credit in the future.
8
Ballincollig Credit Union Limited is regulated by the Central Bank of Ireland.2017
Annual Report
& Accounts
Statement Of Directors’ Responsibilities
and Board Oversight Committee Responsibities
For The Year Ended 30 September 2017
Statement of Directors’ Responsibilities
The Credit Union Act, 1997 (as amended) require the directors to prepare financial statements for each financial year
which give a true and fair view of the state of affairs of the Credit Union and of the income and expenditure of the Credit
Union for that year. In preparing 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;
- prepare the financial statements on a 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 are prepared
in accordance with applicable Irish law and FRS102 “The Financial Reporting Standard applicable in the UK and Republic
of Ireland”. 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 Jeffers Paul O Mahony
Member of the Board of Directors Member of the Board of Directors
Date: 31/1/2018
Statement of Board Oversight Committee’s Responsibilities
The Credit Union Act, 1997 (as amended) require 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) and any other matter prescribed by the Bank in respect
of which they are to have regard in relation to the Board.
___________________
Joe Dillon
Chairperson of the Board Oversight Committee
Date: 31/1/2018
92017
Annual Report
& Accounts
Independent Auditor’s Report To The Members Of
Ballincollig Credit Union Limited
Year Ended 30 September 2017
Opinion
We have audited the financial statements of Ballincollig Credit Union Limited for the year ended 30 September 2017,
which comprise the Income and Expenditure Account, the Balance Sheet, the Statement of Changes in Reserves, the
Cash Flow Statement and notes to the financial statements, including the summary of significant accounting policies set
out in note 2.
The financial reporting framework that has been applied in their preparation is Irish Law including the Credit Union
Act, 1997 (as amended) and FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland.
In our opinion the financial statements:
- give a true and fair view of the state of the Credit Union’s affairs as at 30 September 2017 and of its income and
expenditure 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 so as to conform 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 below in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Credit Union in accordance with
ethical requirements that are relevant to our audit of financial statements in Ireland, including the Ethical Standard
issued by the Irish Auditing and Accounting Supervisory Authority (IAASA), and we have fulfilled our other ethical
responsibilities in accordance with these requirements. This includes us taking advantage of the exemptions provided
by IAASA’s Ethical Standard: Section 6 Provisions Available for Audits of Small Entities in the circumstances set out in
note 25 to the financial statements.
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 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 information included in
the annual report other than the financial statements and our auditor’s report thereon. Our opinion on the financial
statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we
do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or
apparent material misstatements, we are required to determine whether there is a material misstatement in the financial
statements or a material misstatement of the other information. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
102017
Annual Report
& Accounts
Independent Auditor’s Report To The Members Of
Ballincollig Credit Union Limited
Year Ended 30 September 2017
Opinions on other matters prescribed by the Credit Union Act, 1997 (as
amended)
Based solely on the work undertaken in the course of the audit, we report that:
- we have obtained all the information and explanations which, to the best of our knowledge and belief, were
necessary for the purposes of our audit;
- in our opinion proper accounting records have been kept by the Credit Union;
- the financial statements are in agreement with the accounting records;
- 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).
Responsibilities of directors for the financial statements
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation
of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as
they determine is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Credit Union’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Credit Union or to cease operations, or has no realistic
alternative but to do so.
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), we exercise professional judgement and maintain professional
scepticism throughout the audit. We 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 our 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.
- Conclude on the appropriateness of the directors’ use of the going concern basis of accounting 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 we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the
Credit Union to cease to continue as a going concern.
112017
Annual Report
& Accounts
Independent Auditor’s Report To The Members Of
Ballincollig Credit Union Limited
Year Ended 30 September 2017
- 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 fair
presentation.
We communicate 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 we identify during
our audit.
The purpose of our audit work and to whom we owe our responsibilities
Our report is made solely to the Credit Union’s members, as a body, in accordance with section 120 of the Credit Union
Act, 1997 (as amended). Our audit work has been undertaken so that we might state to the Credit Union’s members
those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the Credit Union and the Credit
Union’s members, as a body, for our audit work, for this report, or for the opinions we have formed.
Crowleys DFK Partnership
Chartered Accountants and Registered Auditors
5 Lapp’s Quay
Cork
Date: 1/2/18
122017
Annual Report
& Accounts
Income and Expenditure Account
For The Year Ended 30 September 2017
2017 2016
Note € €
Interest on members loans 4 1,784,571 1,797,779
Other interest income and similar income 5 536,189 558,356
Net interest income 2,320,760 2,356,135
Other income 7 55,339 59,256
Employment costs 8 (648,326) (740,628)
Other management expenses (Schedule 1) (1,034,178) (934,446)
Depreciation 10 (32,931) (43,796)
Net recoveries or (losses) on loans to members 11 631,166 310,533
Release of onerous contract provision - 126,805
Surplus for the financial year 1,291,830 1,133,859
Other comprehensive income - -
Total comprehensive income 1,291,830 1,133,859
These financial statements were approved and authorised for issue by the Board on 31/1/2018 and agreed on its behalf
by:
_______________ _______________ _______________
John Jeffers Simon Foley Joe Dillon
CHAIRPERSON Manager Board Oversight Committee
132017
Annual Report
& Accounts
Statement of Changes in Reserves
As At 30 September 2017
Non - Distributable
Undistributed Operational investment
surplus/ Regulatory Risk Dividend income Total
deficit reserve reserve reserve reserve reserves
€ € € € € €
As at 1 October 2016 1,319,008 7,053,521 80,000 1,238,454 13,012 9,703,995
Total comprehensive
income for the year 1,291,830 - - - - 1,291,830
Transfer between reserves (991,069) 689,000 305,905 - (3,836) -
Dividends paid during the year (133,373) - - - - (133,373)
Loan interest rebate (181,200) - - - - (181,200)
As at 30 September 2017 1,305,196 7,742,521 385,905 1,238,454 9,176 10,681,252
As at 1 October 2015 917,048 6,710,697 - 1,238,454 10,495 8,876,694
Total comprehensive income
for the year 1,133,859 - - - - 1,133,859
Transfer between reserves (425,341) 342,824 80,000 - 2,517 -
Dividends paid during the year (123,740) - - - - (123,740)
Loan interest rebate (182,818) - - - - (182,818)
As at 30 September 2016 1,319,008 7,053,521 80,000 1,238,454 13,012 9,703,995
1. The Regulatory reserve of the Credit Union as % of total assets as at 30 September 2017 was 10.83% (2016 -
10.52%). During the year the Credit Union transferred €39,000 of its current year surplus to the Regulatory
reserve. At the financial year end the Board approved a further transfer of €650,000 from the current year
surplus to the Regulatory reserve.
2. The Operational Risk reserve of the Credit Union as % of total assets as at 30 September 2017 was
00.54% (2016 - 00.12%). The Board approved a transfer of €305,905 from the undistributed surplus to the
Operational Risk reserve. The amount transferred was calculated in accordance with the operational risk
measurement techniques proposed under Basel II capital adequacy rules for banking institutions. Last year a
transfer of €80,000 was made to the Operational Risk reserve following the completion of an internal process
of assessing the level of the reserve required to cover the operational risks of the Credit Union.
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Annual Report
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Balance Sheet
As At 30 September 2017
Note 2017 2016
€ €
ASSETS
Cash and cash equivalents 9 8,318,713 13,693,940
Tangible fixed assets 10 755,541 785,908
Loans to members 11 19,991,317 18,499,134
Prepayments and accrued income 12 407,246 432,945
Investments 13 42,000,764 33,639,762
Total Assets 71,473,581 67,051,689
LIABILITIES
Members shares 14 (59,340,752) (56,302,944)
Money management accounts 17 (698) (578)
Members’ EFT current accounts 16 (1,054,022) (709,470)
Other liabilities, accruals and charges 18 (396,857) (334,702)
Total liabilities (60,792,329) (57,347,694)
ASSETS LESS LIABILITIES 10,681,252 9,703,995
RESERVES
Undistributed surplus / deficit reserve 1,305,196 1,319,008
Regulatory reserve 7,742,521 7,053,521
Operational risk reserve 385,905 80,000
Non-distributable investment income reserve 9,176 13,012
Dividend reserve 1,238,454 1,238,454
Total reserves 10,681,252 9,703,995
These financial statements were approved and authorised for issue by the Board on 31/1/2018 and agreed on its behalf by:
_______________ _______________ _______________
John Jeffers Simon Foley Joe Dillon
CHAIRPERSON Manager Board Oversight Committee
152017
Annual Report
& Accounts
Cash Flow Statement
For The Year Ended 30 September 2017
Note 2017 2016
€ €
Cash flows from operating activities
Loans repaid by members 11 11,417,456 10,973,062
Loans granted to members 11 (12,529,579) (11,489,510)
Loan interest received 4 1,782,332 1,800,191
Investment income received 536,189 555,839
Other income received 55,339 59,256
Bad debts recovered 11 251,106 299,710
Dividends paid 6 (133,373) (123,740)
Loan interest rebate paid 6 (181,200) (182,818)
Operating expenses paid to include employment costs (1,682,504) (1,675,074)
Movements in other assets 27,938 1,054
Movements in other liabilities 62,155 (1,567,113)
Net cash flow from operating activities (394,141) (1,349,143)
Cash flows from investing activities
Purchase of property, plant and equipment (2,564) (6,483)
Purchase and disposal of investments (8,361,002) (4,078,732)
Net cash flows from investing activities (8,363,566) (4,085,215)
Cash flow from financing activities
Cash inflow from money management accounts 17 229,420 227,141
Cash outflow from money management accounts 17 (229,300) (227,146)
Cash inflow from budget accounts 10,421,854 8,283,720
Cash outflow from budget accounts (10,077,302) (7,928,272)
Members’ shares received 14 37,420,484 36,896,841
Members’ shares withdrawn 14 (34,382,676) (32,284,340)
Members’ deposit receipts 15 - 1,649
Members’ deposit withdrawn 15 - (38,399)
Net cash flows from financing activities 3,382,480 4,931,204
Net increase / (decrease) in cash and cash equivalents (5,375,227) (503,154)
Cash and cash equivalents at beginning of year 13,693,940 14,197,094
Cash and cash equivalents at end of year 8,318,713 13,693,940
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Annual Report
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Notes To The Financial Statements
For The Year Ended 30 September 2017
1. Legal and regulatory framework
Ballincollig Credit Union Limited is established under the Credit Union Act 1997 (as amended). The Credit
Union is registered with the Registrar of Credit Unions and is regulated by the Central Bank of Ireland. The
principal place of business is Credit Union House, Harrington Street, Ballincollig, Co. Cork.
2. Accounting Policies
2.1. Statement of compliance and the basis of preparation
These financial statements have been prepared on the going concern basis and in accordance with the Credit
Union Acts 1997 - 2012 and FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of
Ireland” issued by the Financial Reporting Council , as promulgated by Chartered Accountants Ireland.
The financial statements have been prepared on the historical cost basis.
2.2. Currency
The financial statements are prepared in Euro, which is the functional currency of the Credit Union. Monetary
amounts in these financial statements are rounded to the nearest Euro.
2.3. Going Concern
The financial statements are prepared on the going concern basis. The directors of Ballincollig Credit Union
Limited believe this is appropriate as the Credit Union:
- Is generating surpluses;
- Maintains an appropriate level of liquidity; and
- Has reserves that are currently equal to the minimum requirements of the Central Bank.
2.4. Income
Income is recognised to the extent that it is probable that the economic benefits will flow to the Credit Union
and the revenue can be reliably measured. Income is measured at the fair value of the consideration received.
The following criteria must also be met before the revenue is recognised:
Interest on members’ loans
Interest on loans to members is recognised using the effective interest method, and is calculated and accrued
on a daily basis.
Investment income
The Credit Union currently only has investments that are valued at amortised cost, and use the effective
interest method to recognise investment income.
Other income
Other income such as commissions receivable and foreign exchange services arises in connection to specific
transactions. Income relating to individual transactions is recognised when the transaction is completed.
2.5. Dividends and loan interest rebates to members’
Dividends on shares and loan interest rebates
Dividends are made from current year’s surplus or the dividend reserves set aside for that purpose. The
Board’s proposed distribution to members each year is based on the dividend and loan interest rebate policy
of the Credit Union and is subject to covering the operating expenses of the Credit Union while meeting
revenue requirements.
The interest on members’ deposits and the rate of dividend and loan interest rebate recommended by the
Board will reflect:
172017
Annual Report
& Accounts
Notes To The Financial Statements
For The Year Ended 30 September 2017 continued
- Prevailing economic and market factors;
- The risk profile of the Credit Union, particularly in its loan and investment portfolios;
- The Board’s desire to maintain a stable rather than a volatile rate of return to members each year; and
- Members’ legitimate deposit interest dividend and loan interest rebate expectations;
all dominated by prudence and the need to sustain the long-term welfare of the Credit Union.
For this reason, the Board will seek to build up its reserves to absorb unexpected shocks and remain above
minimum regulatory requirements.
The Credit Union accounts for dividends and rebates of loan interest when members ratify such payments at
the Annual General Meeting.
2.6. Taxation
The Credit Union is not subject to income tax or corporation tax on its activities as a Credit Union.
2.7. Cash and cash equivalents
Cash and cash equivalents comprise operating cash on hand and cash deposited with banks with original
maturity of less than or equal to three months.
2.8. Financial instruments
The Credit Union has elected to apply to provisions of Section 11 “Basic Financial Instruments” and Section
12 “Other Financial Instruments Issues” of FRS 102 to all of its financial instruments. Financial instruments
are recognised when the Credit Union becomes a party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when, and
only when, there is a legally enforceable right to set off the recognised amounts and there is an intention to
settle on a net basis or to realise the asset and settle the liability simultaneously.
Financial assets and liabilities are classified according to the substance of the contractual arrangements
entered into.
2.9. Basic financial assets
Basic financial assets are initially measured at the transaction price, including transaction costs, and are
subsequently carried at amortised cost using the effective interest method. Basic financial instruments include
the following:
Loans to members
Loans to members are financial assets with fixed or determinable payments. Loans are recognised when cash
is advanced to members and measured at amortised cost using the effective interest method.
Investments held at amortised cost
Investments held at amortised cost are measured at amortised cost using the effective interest method less
impairment. This means that the investment is measured at the amount paid for the investment, minus any
repayments of the principal; plus or minus the cumulative amortisation using the effective interest method
of any difference between the amount at initial recognition and the maturity amount; minus, in the case of
a financial asset, any reduction for impairment or un-collectability. This effectively spreads out the return
on such investments over time, but does take account immediately of any impairment in the value of the
investment.
Central bank deposits
Credit Unions are obliged to maintain certain deposits with the Central Bank. These deposits are technically
assets of the credit union but to which the credit union has restricted access. The funds on deposit with the
Central Bank
182017
Annual Report
& Accounts
Notes To The Financial Statements
For The Year Ended 30 September 2017 continued
attract nominal interest and will not ordinarily be returned to the credit union while it is a going concern. In
accordance with the direction of the Central Bank the amounts are shown as current assets and are not subject to
impairment reviews.
2.10. Other receivables
Other receivables such as prepayments are initially measured at transaction price including transaction costs
and are subsequently measured at amortised cost using the effective interest method.
2.11. Impairment of financial assets
Financial assets, other than those held at fair value, are assessed for indicators of impairment at each reporting
end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that
occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present
value of the expected cash flows discounted at the asset’s original effective interest rate.
In the case of impairment of loans to members, the loans are assessed collectively in groups that share similar
credit risk characteristics except for individually significant loans which are assessed on a loan by loan basis
for impairment.
Any impairment losses are recognised in the Income and Expenditure account.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was
recognised, the impairment is reversed. The reversal is such that the current carrying amount does not
exceed what the carrying amount would have been, had the impairment not previously been recognised. The
impairment reversal is recognised in the Income and Expenditure account.
2.12. Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or
are settled, or when the Credit Union transfers to another party substantially all of the risks and rewards of
ownership of the financial asset, or if some significant risks and rewards of ownership are retained but control
of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third
party.
In the case of loans to members, loans are derecognised, when the right to receive cash flows from the loans
have expired, usually when all amounts outstanding have been repaid by the member. Ballincollig Credit Union
Limited does not transfer loans to third parties.
2.13. Basic financial liabilities
Basic financial liabilities are initially recognised at the transaction price, including transaction costs, unless the
arrangement constitutes a financing transaction, where the debt instrument is measured at the present value
of the future payments discounted at a market rate of interest. Financial liabilities are subsequently carried at
amortised cost using the effective interest method.
Financial liabilities members’ shares, deposits and current accounts
Member’s shares and current accounts are redeemable and therefore are classified as financial liabilities. They
are initially recognised at the amount of cash deposited and subsequently measured at the nominal amount.
Other payables
Other payables are classified as current liabilities if payment is due within one year or less. If not, they
are presented as non-current liabilities. Other payables are recognised initially at transaction price and
subsequently measured at amortised cost using the effective interest method.
192017
Annual Report
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Notes To The Financial Statements
For The Year Ended 30 September 2017 continued
2.14. De-recognition of financial liabilities
Financial liabilities are derecognised when the obligations of the Credit Union specified in the contract are
discharged, cancelled or expire.
2.15. Tangible fixed assets
Tangible fixed assets comprises items of property, plant and equipment, which are stated at cost, less
accumulated depreciation and any accumulated impairment losses. Cost includes expenditure that is directly
attributable to the acquisition of the asset.
Depreciation is provided to write off the cost of each item of property, plant and equipment, less its estimated
residual value over its estimated useful life. The categories of property, plant and equipment are depreciated
as follows:
Buildings - 2% straight line
Office Equipment - 20% Straight Line
Computer Equipment - 33.33% Straight Line
Fixtures and fittings - 20% reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds
and the carrying value of the asset, and is recognised in the Income and Expenditure account.
2.16. Impairment of tangible fixed assets
At each reporting end date, the Credit Union reviews the carrying value of its tangible assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss
(if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Credit Union
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pretax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which the
estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of
the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in the Income
and Expenditure account.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased
to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to
the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss been recognised for the asset
in prior years. A reversal of an impairment loss is recognised immediately in the Income and Expenditure
account.
2.17. Employee benefits
Pension scheme
The Credit Union operates a defined contribution scheme. Retirement benefit contributions in respect of
the scheme for employees are charged to the income and expenditure account as they become payable in
accordance with the rules of the scheme. The assets are held separately from those of the Credit Union in an
independently administered fund. Differences between the amounts charged in the income and expenditure
account and payments made to the retirement benefit scheme are treated as assets or liabilities.
Other employee benefits
The costs of short-term employee benefits, including holiday pay, are recognised as a liability and as an expense
(unless those costs are required to be recognised as part of the cost of fixed assets) over the period they are
earned.
202017
Annual Report
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Notes To The Financial Statements
For The Year Ended 30 September 2017 continued
Termination benefits
Termination benefits are recognised immediately as an expense when the Credit Union is demonstrably
committed to terminate the employment of an employee or to provide termination benefits. Other once-
off termination payments that are not required by contract, legislation, or other obligations or
commitments, are recognised in the financial year in which they become payable.
2.18. Reserves
Undistributed surplus
These are accumulated surpluses to date.
Regulatory reserve
The Credit Union is required to maintain and establish a minimum Regulatory reserve of at least 10% of the
assets of the Credit Union in accordance with Credit Union Act 1997 (Regulatory Requirements) Regulations
2016. This reserve is to be perpetual in nature; freely available to absorb losses; realised financial reserves that
are unrestricted and non-distributable. This reserve is similar in nature and replaces the Statutory Reserve
which was a requirement of previous legislation.
Operational risk reserve
The Credit Union has established an Operational Risk reserve in accordance with Section (45)(a) of the
Credit Union Act 1997 (as amended) an operational risk reserve which is separate, distinct and in addition to
the reserves the Credit Union is required to hold in its regulatory reserve.The amount held in the operational
risk reserve is the predicted impact of operational risk events that may have a material impact on the Credit
Union’s business.
The Directors have considered the requirements of the Act and have considered an approach to the calculation
of the Operational Risk reserve. Ballincollig Credit Union Limited uses the Basic Indicator Approach as set out
in the operational risk measurements techniques proposed under Base II capital adequacy rules for banking
institutions in calculating the Operational Risk reserve. Therefore Ballincollig Credit Union Limited will hold
an Operational Risk reserve which will at a minimum equal 15% of the average positive gross income for the
previous three years. For any year in which there was a deficit, this will be excluded from the calulation.
Dividend reserve
Dividend reserves are the accumulated surpluses to date that have not been set aside for the payment of
future dividends or loan interest rebates, but have not yet been declared as returnable to members.
Non-Distributable Investment Income reserve
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 to within 12 months
of maturity date.
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 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:
Impairment losses on loans to members
The Credit Union’s accounting policy for impairment of financial assets is set out in accounting policy in Note
2.17. The estimation of loan losses is inherently uncertain and depends upon many factors, including loan
loss trends, credit risk characteristics in loan classes, local and international economic climates, conditions in
various sectors of the economy to which the Credit Union is exposed, and, other external factors such as legal
and regulatory requirements. Credit risk is identified, assessed and measured through the use of rating and
scoring tools with emphasis on weeks in arrears and other observable credit risk metrics.The ratings influence
the management of individual loans. The credit rating triggers the impairment assessment and if relevant the
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