2020 Steelsands Credit Union - People helping People
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Steelsands Credit Union
Annual Report
2020
42nd Annual General Meeting
Tuesday 13th October 2020
People helping People
NZCU Steelsands is licensed by the Reserve Bank and is not a registered bank
1
Steelsands Credit Union Annual Report 2020
Our Mission
“Grow membership by delivering competitive solutions
which recognise our members as individuals and help them
create wealth through low cost high return products and
services”
Our Vision
“To create financial freedom for our members through
personal service based on flexibility, convenience and
trust”
2
Steelsands Credit Union Annual Report 2020
Table of Contents
Agenda ...................................................................................................................................................... 4
AGM Minutes 2019 ................................................................................................................................... 5
Our Board .................................................................................................................................................. 8
Chairman Report ..................................................................................................................................... 10
General Managers Report ....................................................................................................................... 11
Treasurers Report ................................................................................................................................... 13
Credit Committee Report........................................................................................................................ 14
Internal Audit Committee Report ........................................................................................................... 15
Board Nominations ................................................................................................................................. 17
Financial Statements – to follow
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Steelsands Credit Union Annual Report 2020
42nd ANNUAL GENERAL MEETING
STEELSANDS CREDIT UNION
TUESDAY 13th October 2020
Held at the Lions Club Rooms, Belgium St Waiuku
And via Zoom
Meeting Starts 6 pm
AGENDA
1. Welcome by Chairperson
2. A moment of silence held in respect of members who have passed
3. Apologies
4. Minutes of the previous Annual General Meeting held on 24th September 2019
5. Matters arising from the Minutes
6. Chairperson’s report
7. General Manager’s report
8. Treasurer’s report
9. Credit Committee report
10. Audit Committee Report
11. Remuneration of Directors
12. Appointment of External Auditors
13. Election of officers
14. General Business
15. Close of AGM
Dinner 7.30 pm
4
Steelsands Credit Union Annual Report 2020
Steelsands Credit Union AGM Minutes 2018 - 2019
Minutes of the 41st Annual General Meeting
Held on Tuesday 24th September 2019
at the Lions Club Rooms, Belgium, Waiuku
Meeting started at 6.06 pm
Attendees: As per Signed Register – 18 qualifying members, 1 Visitors (Total 19), Covenant Trustee’s attended via Zoom
Welcome by Chairperson Paul Eves declared the meeting open and welcomed everyone.
A moments silence was held in respect of members who have passed away during the past year.
Jeanette Neary
Jocelyn Rakuraku
Mike Round
Warren Cleaver
Keiran Toana-Mahuika
Lyndsay Purdue
Lesley van Uden
Joanne Bogue
Wayne Hunter
Kane McKenzie McKay
Neru Tagomoa
Apologies: 14 as listed on the register, Rhonda Clare requested Ann Lee to be added to Apologies
Moved apologies to be approved: Paul Eves/Derek Robbins Carried
Davies Bridget Staff
Dineen Michael Michael Dineen Law
Goodwin Geoff Co-op Money NZ
Goodwin Gill Anthony Harper
Grace Joelle Lane Neave
Hardie Craig Member
Hatalafale Kona Employee's Credit Union
Laker Richard Member
Lee Jonathan Co-op Money NZ
Marsic Slavica Director and Chair
Rolston Breden Action HQ
Ronald Dean Director and Chair
Summerfield Nick Anthony Harper
Trittschuh Jennifer Fisher & Paykel Credit Union
Introduction
Paul Eves Introduced the Board Members, exits pointed out and requested members named themselves clearly when
speaking.
Minutes of previous AGM 25th September 2018
Moved Minutes be approved: John Varney/Christine Robbins Carried
Minutes of previous Special Meeting 14th March 2019
Moved Minutes be approved: Ivy Tapsell/Lauren Morley Carried
5
Chair’s report Paul Eves presented the Chair’s report
Moved Chairs report be approved: Paul Eves/Nicola Hardie Carried
General Managers report Bruce Ross presented the General Managers report, Bruce opened the floor for questions.
Moved General Manager’s report be approved: Bruce Ross/Christine Robbins Carried
Treasurer’s Report Paul Eves presented the Treasurer’s report
Moved Treasurer’s report be approved by Paul Eves/John Varney Carried
Trustee’s Report Bruce Ross presented the Trustee’s report
Moved Trustee’s Report be approved: Bhikhu Bhana/Rhonda Clare Carried
Audit Committee report Bhikhu Bhana presented the Audit report
Moved the Audit Committee Report be approved: Bhikhu Bhana/Rhonda Clare Carried
Ordinary Resolution for approval of incorporation Paul Eves read out the following resolution and asked for a show of
hands to vote for and against
That the members approve the application for incorporation of Steelsands Credit Union and authorise the Board of
Steelsands Credit Union to take all action necessary or desirable to proceed with incorporation.
FOR - 18
AGAINST – 0
Moved the Ordinary Resolution to be approved: Christine Robbins/Rhonda Clare Carried
Special Resolution for Proposed Replacement Rules Paul Eves read out the following resolution and asked for a show of
hands to vote for and against
That the members approve the proposed replacement Rules of Steelsands Credit Union as submitted to the meeting and
summarised in the Proposed Changes to Rules 2019 Notice.
Bruce summarised the process for the change of rules.
FOR - 18
AGAINST – 0
Moved the Special Resolution be approved: John Varney/Judith Wootten Carried
Paul Eves, requested Deane Johns to count proxy votes, Deane Johns announced 100% FOR the ordinary and special
resolutions, Alliance FOR 23 votes, Glenbrook FOR 16 votes, Marsden Point FOR 1 vote, and FOR 1 vote presented at the
AGM. Paul Eves confirmed both resolutions had passed
Directors Remuneration – Paul Eves requested the members consider approving Director Remuneration increased from
$35,000 to $84,000 approved for the next financial year, it does not mean that it will be applied. The intention is to retain
two new directors and an independent director. Directors have had an increased workload, the $85k is the maximum
spend. Paul Eves read out an email from a member Philp Stark who had requested that the email be presented at the
Meeting, Paul Eves read out the email to the Members.
6
Paul Eves opened the floor to members for questions or discussion on Director Remuneration. There ensued some
considerable discussion by the members present, which culminated in the following resolution being put to the members
for their approval.
Moved that Director’s remuneration for the next financial year of $63,000 in total be approved: John Varney/Rhonda
Clare Carried
Appointment of External auditors Paul Eves summarised the sequence of events to the members, PKF Hamilton resigned
as Steelsands auditor because of the merger. At the time Steelsands obtained legal advice from Covenant and Anthony
Harper, which resulted in the appointment of BDO Auckland. Paul Eves then read the summary of advice from Anthony
Harper.
Moved that BDO Auckland be engaged as NZCU Steelsands auditors for 2019 -2020 to be approved: Rhonda Clare/John
Varney Carried
Election of Officers, Bruce Ross circulated to members’ Linda bell and Hoani Cooper CVS’s. Bruce confirmed that the
terms are traditionally 2 years however under the rules the term can be longer and the Board proposing 3 years then
alternating the elections.
Director’s
Nominee Status
Bruce Ross Re-election
David Hovell Re-election
Slavica Marsic Re-election
Paul Eves Re-election
Linda Bell New election
Hoani Cooper Director Elect
Trustees
Nominee Status
David Hovell Re-election
Moved the Directors be elected be approved: Kelly Muir/Christine Robbins Carried
Moved that David Hovell be Re-elected as Trustee be approved: Christine Robbins/John Varney Carried
DRAFT Financial Accounts, fully audited accounts are expected to be received by Thursday/Friday
Moved that the Draft Financial Accounts be approved by Rhonda/Kelly Muir Carried
Call for items of General Business – None
Member agreed that it was satisfactory to have the Audited financial account available on the website.
Close of AGM
There being no further business the meeting closed at 7.41 pm
Signed P Eves Acting Chair
7Steelsands Credit Union Annual Report 2020
Our Board
Bhikhu Bhana
Director and Audit Committee Chair
Appointed to the Board in 2000
CUINZ Member
Retired from New Zealand Steel Ltd and BlueScope Steel in 2012 after 32 years of service
When I read the Credit Union motto and philosophy of " People helping People', I joined the Credit Union movement. I
have been a member for over 20 years and on the Board for a number of years. I have been impressed and proud that at
Steelsands we follow that principle. It’s all about people. We give with an open heart and receive with humility.
Bruce Ross
Director
Appointed to the Board in 2015
CUINZ Member
David Hovell
Director and Credit Committee Chair
Appointed to the Board in 2015
Employed at Refining NZ since 2008
I share the values of the Credit Union movement and hope to see it grow in New Zealand.
Paul Eves
Director & Treasurer
Appointed to the Board in 2004
Prior Board Service: 1993 – 1999
CUINZ Member
Former Trustee NZ Credit Union Foundation & Collin Smith Memorial Fund Managers
Retired from New Zealand Steel Ltd
"If I am to dream, I dream alone. If we all dream together then we shall achieve..." Princess Te Puea
Slavica Marsic
Director & Chair
Appointed to the Board in 2001
Held Chairperson role 2006 – 2010
CUINZ Member
Employed as IS Principal Engineer at New Zealand Steel Ltd since 1991
I strongly believe in the Credit Union philosophy and with Credit Unions owned by their members it means the
benefits go back into the communities and that is something he is proud to be part of.
8Linda Bell
Director and Secretary
Audit Committee Member
Employed by MCA NZ Limited and Fund Secretary of the NZ Steel Pension Fund
Hoani Cooper
Director and Marketing Committee Chair
Employed as Group Manager Manufacturing Excellence at Alliance since 2017.
Previously Employed by NZ Steel Ltd
9Steelsands Credit Union Annual Report 2020
Chairman Report
I would like to welcome our members, invited is keen to stay on as a director, and we will
guests, staff and Directors to the 2020 NZCU retain his experience, skills and commitment to
Steelsands Credit Union Annual General our credit union.
Meeting, it is wonderful to have you here and
online. Finally, on the broader credit union front Co-op
Money NZ (CMNZ), was sold by the members to
Before we move into the meeting proper, I Credit Union Baywide. This has resulted in
would kindly ask all present to take a moment individual credit unions such as ourselves,
to note those members and staff who have having to come together to negotiate things
close relatives or friends who may have passed such as liability insurance directly with the
recently. relevant providers, rather than having CMNZ
doing this for us; and to find new ways to
The past year has certainly been eventful, ensure that the voice of credit unions is not lost
firstly, the challenge to our business by Covid- to our lawmakers and regulators.
19 has tested our resilience and has certainly
had an impact on our financial performance Led by Bruce, the team is continuing to provide
over the past year. On a positive note, I am outstanding service to our many members and
pleased to say that the Board, management on behalf of the Board I express our sincere
and staff have risen to the challenge of thanks to them for all the work that they have
continuing to provide members with the done on our behalf over the past year.
products and services they need to help them
navigate their busy lives. Nga Mihi,
Secondly, by the time you read this report we Slavica Marsic
will, hopefully, have concluded our work with Chair of NZCU Steelsands Credit Union on
the Board of Employees Credit Union regarding behalf of our Board: Paul Eves, Linda Bell,
a Transfer of Engagement (TOE), and that their Bhikhu Bhana, Hoani Cooper, David Hovell,
members have voted in favour of the proposal Bruce Ross.
to join us and enjoy the benefits of being a
member of Steelsands Credit Union.
Thirdly, earlier this year Bruce Ross indicated
that he would like to step down from his role as
our General Manager; therefore the Board has
engaged a recruitment agency to lead the
search for a new General Manager, and we
hope to have that search concluded by the end
of October this year. Fortunately for us, Bruce
10Steelsands Credit Union Annual Report 2020
General Managers Report
I am pleased to provide a report for the Due to the changes in the financial
2019/2020 year and advise that this will be my markets with Covid 19, increasing competition
last report as GM as I am retiring. I would like to and operating costs from legislative and
thank the staff and Board of directors for their administrative change, the Board has decided to
support throughout a difficult period for our change our approach in some areas to enable us
members and their families, our staff and for to maximise our member benefits yet still be
New Zealand. able to improve our equity and financial
stability. This has meant a more conservative
Covid 19 was of course the biggest issue for us approach to our operation and more closely
and continues to be, though solving issues with following the market with our rates and
Co Op Money also took significant time, fees. This has seen our key legislative KPI’s move
resources and cost. Alongside this has been to provide a satisfactory cushion and our
a long lead up to changes with our strategic Risk Weighted Capital (RWC) ratio in particular
partners of New Zealand Steel, the New move to over 16.7% in June, allowing the Board
Zealand Refinery and NZME which has impacted to plan on growth.
our members dramatically. I am proud to say our
team remained focussed on our members Over the last year we have seen a drop off in our
during these difficult times, helping wherever loans of approximately 16% which is
we could and maintaining our financial services. related to Covid 19 lockdowns, the potential
changes at New Zealand Steel, New
The strategic planning by the Board and staff in Zealand Refinery, NZME and forecast recession.
the lead up to and during these disturbances has Our focus continues to be on our involvement
allowed us to continue to focus on the future with our members. This has involved improved
and enabled the involvement in a TOE with communication with the return of our
Employees Credit Union. Our Business Newsletter, effective communication of our
Continuity Plan (BCP) has worked well and rates and fee changes, personal loan
allowed a smooth transition in and out of promotions, direct involvement with our
lockdowns while still maintaining our services to members on our industrial sites, updating our
our members. website and movement onto Facebook and
Instagram.
One new staff member has joined us (Nicole)
as Rachel has moved into Katrina’s role of Risk & Our challenge remains in maintaining our focus
Compliance Officer. Our staff continue to have on our current varied membership and growing
the CU passion, strength and experience across into new areas. For example, we achieved our
our Alliance Lorneville plant with Sue, Maree target of 5% new members this year and at the
and Lani, at Marsden Point with Irene and same time our retired members grew by over
Sandra and at Glenbrook Lauren, 2%. We have to continue to improve all of our
Nicola, Bridget, Corrina and a new starter members ability to interact with our team.
Nicole. The support team is me, Judith
and Rachel.
11We appreciate our continued support from NZ can be seen in the most recent deployment of
Steel, Refining NZ, NZME and Alliance Group. our mobile App which was driven by a group of
We are always on the lookout for ways to grow Credit Unions.
our lending and other sources of income and
would appreciate any ideas our members might We have a very solid platform based on loyal
put forward. members and committed staff. Your Board has
supported Management in looking for ways to
Since March this year, rates have been changed grow our business and I am extremely grateful
regularly by the Reserve Bank and our for that endorsement.
competitors, this has meant we needed to
review fortnightly our rates and fees. The aim We all strongly believe Credit Unions are all
has been to maintain our rates close to the about “people helping people” and we look
market yet balance this against the best we can forward to enhancing that tradition in the year
do for our members yet also not reducing our ahead and will be keeping better contact with
income significantly. We have had success in you.
achieving this, we believe, as our rates and fees
remain very competitive, yet our loss for a year Bruce Ross
of Covid 19 lockdowns has been limited to General Manager
$11k.
Our industry is going through significant change.
We have seen the introduction of new
legislation which has materially changed our
landscape and with recent changes in our
relationship with Co Op Money, we are seeing
more involvement with our fellow Credit Unions
and Non-Bank Deposit Takers (NBDT’s). This
12Steelsands Credit Union Annual Report 2020
Treasurers Report
I am pleased to present the audited annual So, how did we go during the past year?
financial statements of Steelsands Credit Union
trading as NZCU Steelsands, for the year ended Total income decreased by $192k, around 9%,
30 June 2020. Our audited financial statements while total expenditure also decreased by
are in accordance with Public Benefit Entity $198k, also around 9%. Despite the impact on
Standards (“PBE Standards”) issued by the New our business due to the disruptions,
Zealand Accounting Standards Board. we managed to finish the year with a reduced
loss of $11k, a reduction of $6k over the
(At the time of writing my report the audit of our previous year.
financial statements has not yet been fully
completed; so, there may be a minor variation On the plus side we still retain a very strong
between the figures stated and those that Balance Sheet. We remain one of the financially
appear in the audited accounts). strongest Credit Unions in New Zealand with a
very high Capital Adequacy Ratio of 16.71% as at
Looking back at the past year there have been a June 30 this Year.
few challenges for us: firstly, the undeniable
impact that Covid-19 continues to have on our My thanks as Treasurer go to Bruce and his team
business, as you can see from our Financial whose hard work during the year meant that we
Statements; secondly, a significant amount of finished the year in better shape than some of
Board and management time (and our money) our fellow credit unions.
was spent on issues regarding CMNZ; while
some of those issues have now dissipated with What’s next?
the purchase of CMNZ by NZCU Baywide; other Looking ahead, it is clear to me wearing my hat
issues have arisen as a consequence. as Treasurer, we will need to look to
diversify and strengthen our member base, as
Interest rate volatility has proven to be a thorny both of our major sites, NZ Refining and NZ
problem for us. We have had to lower our Steel, face ongoing challenges to their
deposit interest rates on a number of occasions respective businesses in this challenging
during the year in order to avoid becoming environment.
awash with cash reserves that we would have
had to pay interest on without the prospect of In summary: we continue to maintain a
being able to lend out the money by way of good reasonable level of profitability (abnormal
quality loans I expect that we will continue to events excepted), we have a very strong Balance
make rapid changes to our deposit rates for the Sheet overall; and we remain committed to
foreseeable future. continuing to provide benefits of real value
to you, our Members.
Paul Eves
Treasurer
13Steelsands Credit Union Annual Report 20
Credit Committee Report
Employees Credit Union in late 2020 which will
On behalf of my fellow Credit Committee boost our loan levels significantly.
members Slavia Marsic, Bhikhu Bhana, Bruce and
Judith, I am pleased to provide our first Credit Personal loan levels have fallen by 16%
Committee Report. throughout the year and housing loans have also
moved down for the financial year ended 30 June
The changes in legislation that moved us to be 2020. This has changed the personal loans
Incorporated on Jan 1st 2020, also has removed the balances across our branches with further falls in
trustees role and moved those responsibilities to personal loans at Glenbrook due to changes at
the full Board in a similar way to a Limited New Zealand Steel. Added to this were the drops
Company. This has led the Board to create a in personal loans with Marsden Point and NZME,
committee which is focused on our loan portfolio, whilst Alliance Lorneville has maintained its levels
the related policies and reporting to the remainder and grown slightly. The chart below shows the
of the Board. movement at each branch for personal loans.
As you are aware two main issues have driven our
loan portfolio over the past 12 to 18 months, they
are potential structural changes at our partner
sites and the financial issues predicated by New
Zealand and the world’s response to
the pandemic Covid 19.
In the lead up to the potential changes with our
strategic partners, we have seen the level of loans
reduce over the 12 months before the pandemic
hit. Since the detection of the pandemic in early
January and introduction of lockdown in NZ from
March, we have seen a further drop in loans as our
members decided not to renew loans as their term
finished or paid them off as protection of their Strong support has been provided by Branch
financial situation. This combined with the Managers and loans officers while working with us
Board’s conservative strategy with our risk- to approve loans and we thank them for that
weighted capital (RWC) ratio due to potential continued support.
changes listed above, has led to a reduction this
year in our loans of 16%. David Hovell
Credit Committee Chair
Conversely this has led to our RWC ratio growing
to a point where our Steelsands CU is shielded
from many of the effects of a recession and
member redundancies. A further advantage with
this strategy is that we are well placed to grow as
the economy and our industrial partners grow in
the near future. This success has allowed us
to investigate taking part in a TOE with NZCU
14Steelsands Credit Union Annual Report 2020
Internal Audit Committee Report
The Audit Committee consisted of Bhikhu Bhana align with the requirements of the Non-
(Chair), Linda Bell, Bruce Ross. The committee Bank Deposit Takers Act. The
was ably supported by the Risk & Compliance Risk Register was also reviewed and totally
Officer, Rachel Stenhouse, and Accounting and updated. They are currently with our Supervisor
Member Services Manager, Judith Wootten. for review and comment.
The Audit and Risk Management committee is Under the Financial Services Legislation
responsible for the Risk Management Framework Amendment Act and the new Code of Conduct.
and Risk Management Programme. The role is to Steelsands is in the process of applying for the
review the Risk Management Programme and transitional licence in 2021. with full licensing
internal controls. Also, to maintain being required by June 2022.
communication with the external authorities as
required. Without doubt the challenge of this year has
been the effects of COVID-19. From a Health and
The Monthly Audit report and high-risks review Safety and an Economic viewpoint, there were
continues to be a key agenda item for our many challenges. The Crisis Management
monthly meetings. Our work on our Risk committee regularly met up to several times per
Register continues, as we continually strive to week. to implement the Business Continuity Plan
ensure we have all current risks, (BCP) and update the Risk Register.
and upcoming risks are under review and the
The committee thanks all those who helped
necessary controls in place.
Steelsands during this difficult time. A special
mention to our fellow Credit Unions that worked
The key risks can be categorised in 5 main
together in a cooperative manner, that underlies
areas. Steelsands has 5 committees: Asset and
the Credit Union ethos.
Liability (ALCO), Credit, Marketing (MIST), Risk &
Audit and Crisis Management. Each of these Last year the Steelsands members voted
committees have ownership a Policy under overwhelmingly to remain alone and not partake
their area of responsibility. This is a deviation in a merger. The Board had recommended a
from the past where the whole Board would merger due to a variety of financial factors. A key
review all the Policies on an annual basis. compliance ratio that all financial institutions
need to comply with is the ‘Risk Weighted Capital
Steelsands was audited by BDO Auckland. The
ratio (RWCR)”. This ratio was at risk of breach.
details of the report are being finalised, and
indications are for a favourable report.
As a result of this direction by the members to
remain, the Board have reviewed
This year was the bi-annual AML/CFT audit
our strategy to look at other options
undertaken by AML Solutions. The report was a
to increase the RWCR value. We are very
positive one and all recommendations given by
pleased to see this RWCR raised to a comfortable
the auditor have almost been completed. A
value.
special mention must be made to Rachel
Stenhouse in the effort she put into the
preparation of her first AML/CFT audit.
The Risk Management Framework and Risk
Management Programme policy was reviewed to
15Whilst this is comforting it is no cause for
celebration. The coming period will be a very
challenging one for Steelsands, the extent and
duration of COVID-19 is unknown.
Impending regulatory changes likely to
be imposed on the financial institutions, and the
uncertain future of some of our host industries
will ensure that the Steelsands Board and the
Risk and Audit committee remain vigilant.
The Risk and Audit Committee wishes to thank
the staff for their efforts and co-operation.
Bhikhu Bhana
Internal Audit Committee Chairperson
16Steelsands Credit Union Annual Report 2020
STEELSANDS CREDIT UNION
BOARD NOMINATIONS
AGM 2020
Directors
No Re-elections Due
Nominee Status Nominator Seconder
Bruce Ross Standing
David Hovell Standing
Slavica Marsic Standing
Paul Eves Standing
Linda Bell Standing
Hoani Cooper Standing
Bhikhu Bhana Standing
Resignations
None
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