Cara Credit Union - Annual Report 2022

ACCOUNTS & NOTICE OF AGM 2022

Cara CREDIT UNION

Credit Unions voted No. 1 for Customer Experience in Ireland 8 years in a row.

CARA CREDIT UNION // ANNUAL REPORT 2022

ANNUAL REPORT 2022

CONTENTS

Seán Roche Hon Secretary

AGM Notice

4

Agenda

6

Chairperson’s Report

8

Board Oversight Committee Report

11

CEO Report

12

Directors’ Report

16

Directors’ Responsibilities Statement

18

Independent Auditor’s Report

19

Financial StatementS 2021/2022 Income and Expenditure Account

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Statement of Other Comprehensive Income

22

Balance Sheet

23

Statement of Changes in Reserves

24

Statement of Cash Flows

25

Notes to Financial Statements

26-41

information not forming part of the audited financial statements Schedules to the Income and Expenditure Account Nominations and Elections Standing Orders for Virtual Annual General Meeting

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42 43-44 45

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CARA CREDIT UNION // ANNUAL REPORT 2022

ANNUAL REPORT 2022

NOTICE - CARA CREDIT UNION

the following information is pertinent to this notice.

ViRtual aGm to be held on tuesday 13th December 2022 @ 7.30pm Notice is hereby given that the 2022 Virtual Annual General Meeting of the members of Cara Credit Union Limited will take place via Zoom Webinar on Tuesday 13th December @ 7.30pm.

Members wishing to attend the Virtual AGM need to request an invitation to join and apply by visiting www.caracreditunion.ie You will be asked to complete a form seeking the following information: Name Member Number Member address Member email address

• Cara Credit Union will be using Zoom Webinar as the electronic platform for the meeting.

• To gain access to the meeting a member must request an invitation to the virtual meeting by visiting our website www.caracreditunion.ie or emailing agm@caracreditunion.ie.

This request must be received by 5.00pm on 9th December 2022. Following the request for invitation the member will receive an invitation before 12.00pm on 13th December.

This will allow the member to join the meeting.

• The information required to request an invitation is your name, member number and address.

• The Credit Union will be verifying members’ details prior to issuing invitations.

• In order to register for the Virtual AGM, each member will require a personal email.

Please note that a group or general mailbox will not be accepted (e.g., info@club.ie, team1@xyzltd.ie) • All non-presenting participants will have their microphones muted and have their cameras switched off to allow the smooth running of the meeting.

• If a member wishes to submit a question this can be typed to the host by clicking on the ‘chat’ button on the bottom of the screen.

• The elections for the position of auditor, Board Oversight Committee and Board of Directors will require a vote.

the request for attendance must be received by 5.00pm on Friday 9th December 2022.

• Voting will be conducted by way of the online poll facility and members will be asked to vote electronically for each candidate when instructed by the Chairperson.

• Votes will be tallied electronically, verified and recorded by the meeting Secretary.

• This virtual AGM meeting will be recorded and members who register for the meeting will be agreeing to the recording of the meeting and their participation in it.

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CARA CREDIT UNION // ANNUAL REPORT 2022

AGENDA

ANNUAL REPORT 2022

BOARD OF DIRECTORS & BOARD OVERSIGHT COMMITTEE

the agenda for the Virtual annual General meeting is as follows:

1.

Invocation - Credit Union Prayer

2.

Acceptance of Proxies (if any) by the Board of Directors

3.

Ascertain that a Quorum is present

4.

Adoption of Standing Orders

5.

Approval of the Minutes of 2021 AGM and 2021 SGM

Eddie Enright Chairperson

Lily Tangney Vice Chairperson

John O’Connor

Danny Kerins

Sean Roche

Caroline Sugrue

Conor Fitzgerald

6. Appointment of Tellers, Report of the Nomination Committee and Election of Auditor, Board Oversight Committee and Board of Directors.

7.

Report of the Board of Directors; incorporating the reports of the Credit Committee, Credit Control Committee and Membership Committee

8.

CEO Report

9.

Approval of the League Affiliation Fees - €1.00 per member to be automatically deducted from members’ accounts

Tom Lawlor

John O’Regan

John Welch

Ann-Marie Brosnan

Clare Lucid

John Lyons

Martina Flynn

Nisha Srinivasan

BOARD OVERSIGHT COMMITTEE

10. Presentation of annual accounts 11. Report of the auditor 12. Report of the Board Oversight Committee

Sandra Byrne

13. AGM Members’ Draw 14. Announcement of election results 15. Any other Business

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ANNUAL REPORT 2022

CHAIRPERSON’S REPORT contd.

CHAIRPERSON’S REPORT

Members’ support has been a shining light in 2022, and as a result, we are extremely proud to report that Cara Credit Union has had a successful year, meeting its strategic priorities and injecting €47.9 million into the local economy by way of personal, business and agri lending.

On behalf of your Board of Directors, I would like to invite you to attend our 55th AGM. We have made the difficult decision to once again host our AGM virtually. If you have any comments or questions I would love to hear from you. You can submit your questions in advance of the AGM by emailing agm@caracreditunion.ie.

Growth: 2022 was an excellent year for your credit union. Our assets now stand at over €294 million with members’ savings growing to over €245 million and the ‘loan book’ has increased to over €107 million for the first time ever. As you will see in the financial reports, Cara Credit Union had a surplus of €2.87 million. This surplus included a once-off payment of €1.2 million from the Irish League of Credit Unions.

The driver of this success has been a strategic focus to secure a larger share of the lending market within our common bond.

Cara Credit Union worked with the Chamber Alliances across all our towns, local business and business stakeholders offering business loans and loans designed specifically for Covid and Brexit impacted businesses via the Strategic Banking Corporation of Ireland (SBCI). This proved very successful.

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investments: Cara Credit Union’s main source of income is from loans, followed by income on investment returns. Due to the unprecedented low interest rates over the past number of years, unfortunately, this income remains low. The current higher interest rate will be beneficial, but there will be a time-lag before the credit union see an increase in returns from investments. expenditure: The Board of Directors and Management Team are continuously looking at ways to manage our costs. This year we took the difficult decision to reduce the death benefit insurance from €1,950 to €1,000. This cost saving measure was taken by our Board to ensure that Cara Credit Union continues to provide our members with a viable credit union into the future.

Cara Credit Union will continue to examine all aspects of expenditure. However, some costs continue to increase, particularly I.T. costs. To continue to be a successful credit union, and offer members the products and services they require, we must invest in developing technological capabilities. We must also be proactive and vigilant in protecting against the increasing risk of cybercrime. Therefore, Cara Credit Union must continue to invest in this area.

Dividends: In the context of the 2022 year-end, Cara Credit Union must be cognisant of the challenging economic environment and uncertainty on the economic outlook. It is important that credit unions continue to exercise prudence in relation to their reserve management. Given the current global and domestic vulnerabilities, the Board of Directors having carefully evaluated our current financial position, the economic environment and our plans for the future, have decided not to pay a dividend this year. Instead, we will invest in improving your credit union and its services, which will provide a better long term benefit to all our Members.

Your Board of Directors: This year, our dear friend and colleague, Richard Bono passed away. Richard is deeply missed by the Board of Directors, having served on the Board since 2016. At this difficult time, we are thinking of Richard’s wife Eleanor, his family and many friends.

Your Board of Directors met on 32 occasions this year to perform their duties. This has been a particularly busy year and on your behalf and my own behalf, I wish to thank them very sincerely for their energy, ideas, dedication and time, all provided with a smile and on a voluntary basis.

This year we welcomed Sandra Byrne to the Board of Directors and John Lyons, Martina Flynn and Nisha Srinivasan to the Board Oversight Committee. We look forward to working with you all. We also saw Patrick O’Brien, Stephen O’Sullivan and Seamus

Buckley retire from the Board Oversight Committee and I would like to thank them for their service.

Future Plan: For the year ahead, we plan to continue our loan growth strategy in personal, business and farm lending. We are currently piloting a personal lending automated system, which will launch in early 2023. This will lead to quicker processing of your loans, making it easier and faster for Members to enjoy their Cara Credit Union loan.

2023 will also see the introduction of additional mortgage options. This will provide more choice to our members.

Much depends on the economic environment in which we find ourselves. We cannot predict the future but we will monitor events closely. The Board and Management Team will be agile and respond to issues as they arise. Always ensuring the interests of the Credit Union and our Members are at the heart of all decisions. thank you: I wish to thank our CEO, Pa Laide, all the management team and the excellent staff in Cara Credit Union for their continued support and co-operation throughout the year.

By continuing to work together, we can ensure Cara Credit Union is sustainable and successful, delivering enhanced benefits and choice for you, our Members.

I would like to thank the Board Oversight Committee for their vigilance and work over the year, ensuring the Board comply with all requirements.

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CARA CREDIT UNION // ANNUAL REPORT 2022

ANNUAL REPORT 2022

CHAIRPERSON’S REPORT contd.

I would also wish to thank my follow Directors for their outstanding commitment to Cara Credit Union. I have mentioned them already but their enthusiasm and co-operation ensure it is a pleasure to work with them.

Last, but not least, I want to thank you our 60,000 members. You made Cara Credit Union, and without you it wouldn’t exist. Your ongoing support, with your savings and borrowings and all your other financial transactions is the reason for our success.

BOARD OVERSIGHT COMMITTEE REPORT

I also thank you for voting Cara Credit Union as the No. 1 Credit Union in Ireland. This is a special award, which we are delighted to achieve. However, it also means that we, as a Board, Management Team and Staff have to ensure we continue to reward your loyalty and faith. We plan to do so by continuously improving our services for you and satisfying your needs in the years ahead.

I look forward to addressing you all at our virtual AGM.

eddie enright Chairperson Cara Credit Union

The Board Oversight Committee (BOC) considers the overall responsibilities of the Board and the functioning of the Directors.

There are a number of responsibilities specified by the Credit Union Act 2012 but the principal three are as follows: Strategy Implementation and Review, Risk Assessment and Management and Effectiveness of Management and Procedures. These core responsibilities are the foundation of a strong functioning credit union Board and one of the main guidance to the BOC when evaluating and reviewing the Board’s performance.

Over the past year, at least two members of the BOC have been present/online at all Board meetings. At our request, we have received additional information where required. The BOC held a meeting once a month, separately to the Board to review and discuss the Board function and performance.

It is our opinion that the Board and Management have taken the appropriate steps ensuring that CCU are prepared for the challenges that are facing the Credit Union and financial environment in the coming years.

We wish to thank the Board, Management and Staff for their support and co-operation during the year.

ann-marie Brosnan Chairperson BOC

We would like to commend the Board, Management and Staff on their marketing drive to attract new members in 2022. Also increasing the savings cap is a welcome marketing asset.

The BOC welcomed three new members as Patrick O’Brien, Stephen O’Sullivan and Seamus Buckley have resigned from their roles.

We would like to thank them on their contribution and hard work for the BOC over the last couple of years. The three new members are: John Lyons, Martina Flynn and Nisha Srinivasan.

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CARA CREDIT UNION // ANNUAL REPORT 2022

ANNUAL REPORT 2022

CEO REPORT 2022

CEO REPORT contd.

Thanks to the support we received from you, our Members, 2022 has been a very satisfactory year for Cara Credit Union in terms of financial performance.

Retirements This year we saw some of our esteemed colleagues retire from Cara Credit Union. Phyllis Healy retired after 29 years of service and Christine Fitzgerald after 27 years of service.

members In this financial year, we welcomed 1,847 new members to Cara Credit Union. To these members, you are very welcome and we look forward to serving you.

Over the financial year, 8,714 members borrowed €47.9 million from Cara Credit Union.

Much of this was injected back into the local economy. Lending remains our main source of income, so I would like to take this opportunity to thank these members for their support. As we move into 2023, this support is even more important to ensure our local credit union remains viable for future generations. We have money to lend and are asking you to support your local credit union if you need a loan. You will always be treated fairly and the loan decisions are made locally, by the people you know and trust. current account and Globally accepted mastercard® Debit cards Our current accounts continue to grow, with almost 5,000 debit cards now in circulation. We are proud to have one of the cheapest current accounts on the market, with free banking for students and those over 66 years (terms and conditions apply). We also have a dedicated team on hand to help you with the switching process. If you would like to find out more give us a call on 066 712 2373 or see our website www.caracreditunion.ie 12

award Winning 2022 was an award-winning year for credit unions. In October, credit unions topped the national CXi Ireland Customer Experience league table for an incredible eighth consecutive year. Irish credit unions are the first organisation worldwide to win this award eight times in a row.

On behalf of the Board of Directors and Team at Cara Credit Union we would like to thank both Phyllis and Christine for helping shape Cara Credit Union into what it is today. Their experience, guidance and encouragement has helped so many other co-workers thrive, and we've been so fortunate to have their expertise to rely on.

At the recent All-Ireland Credit Union Awards, there were double celebrations as Cara Credit Union received two awards. The first award was for the ‘Best Marketing Initiative’, for the ‘How to Rock your College Experience’ Programme, which was a partnership with Mary Lucey from Career Ahead. The programme was delivered to 6th year post-primary students to aid in their transition to third level education.

We wish you both a wonderful retirement and may the next phase of your life bring you all that you seek and more.

Also on the night Cara Credit Union picked up the highly sought after ‘Members’ Choice Award’. This award was based on members voting for their credit union. This award really highlights the difference our team makes to members’ lives, going above and beyond on a regular basis. We are most humbled that our members took the time to vote for Cara Credit Union, and this award is a very proud moment for all the team.

All our Team are fully committed to offering the best service to our Members. We are proud of the personal touch we continue to offer to our Members and believe this is what sets us apart.

Our team I would like to thank all the Team at Cara Credit Union. The Team are dedicated to serving you, our Members, in a way which works for you, be it in-person, over the phone or online.

In July of 2022, our highly respected Director, Richard Bono, passed away. Richard was a serving member of the voluntary Board of Directors since 2016. He was an amazing ambassador for Cara Credit Union and the entire Credit Union movement with a passion for supporting our local communities. We will always be grateful for the time Richard gave so freely in the spirit of co-operation.

compliance New regulations are being applied to credit unions and the broader financial services industry at an ever-increasing rate with the requirement to apply increased resources to risk and compliance functions. These regulations are of critical importance with the purpose being to ensure that not only are your savings protected but that also your credit union is a compliant organisation. environmental, Social and Governance (‘eSG’) Over the last 12 months, Cara Credit Union has donated €80,644 by way of sponsorship, education awards and the Lauri Healy Community Sponsorship Awards. This sponsorship further highlights the positive impact Cara Credit Union has on our community. Giving back to local community groups, on behalf of our members, allows us to ensure that everyone in our community benefits from their local credit union.

With the cost of living crisis, once again people need access to affordable credit, with flexible repayments. This is very much at the core of the credit union ethos. So if you are in financial difficulty, talk to us, we are here to help.

As an organisation we have set ambitious plans to ensure Cara Credit Union will be a ‘Greener’ credit union. We have a Greener Home Loan, working with SEAI, Home2Home and Energia with grants of up to 40% available and loans from as low as 4.9% APR. To reduce our paper consumption, we are asking for your consent to communicate with 13

CARA CREDIT UNION // ANNUAL REPORT 2022

ANNUAL REPORT 2022

CEO REPORT contd.

you via email. See our website, call us or the next time you are in one of our branches, give us your details. You can also help by signing up for online banking to view your statement, instead of printing. We will have lots more initiatives to make us a ‘Green Credit Union’, so watch this space!

Finally, I want to again thank you, our members, for your ongoing support. We are only as strong as the support we receive, and we are grateful for this. Remember your local credit union is here for the long haul, supporting our members and our communities.

Thank you,

thank you I would like to thank our Chairperson, Eddie Enright, Directors and all my colleagues within Cara Credit Union for their ongoing support during the year which allowed me to fulfil my role as CEO. Pa laide CEO Cara Credit Union

Financial StatementS 2022

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ANNUAL REPORT 2022

DIRECTORS’ REPORT contd.

DIRECTORS’ REPORT For the Financial year ended 30 September 2022

The directors present their annual report and the audited financial statements for the financial year ended 30 September 2022.

Principal activity The principal activity of the business continues to be the operation of a credit union. authorisation The credit union is authorised as follows: • Insurance/reinsurance or ancillary insurance intermediary under the European Union (Insurance Distribution) Regulations, 2018.

• Investment Intermediaries (Restricted Activity Investment Product Intermediary) pursuant to Section 26 of the Investment Intermediaries Act, 1995 (as amended).

• Entitled under the European Union (Payment Services) Regulations 2018 to provide payment services.

Business review The directors acknowledge the results for the year and the year-end financial position of the credit union. The directors expect to develop and expand the credit union’s current activities and they are confident of its ability to continue to operate successfully in the future.

Dividends The directors are not proposing a dividend in respect of the financial year ended 30 September 2022 (2021: The directors did not propose a dividend).

Principal risks and uncertainties The principal risks and uncertainties faced by the credit union are:

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credit risk Credit risk is the risk that a borrower will default on their contractual obligations relating to repayments to the credit union, resulting in financial loss. lack of loan demand Lending is the principal activity of the credit union and the credit union is reliant on it for generating income to cover costs and generate a surplus.

These risks and uncertainties are managed by the board of directors as follows:

actions to mitigate any possible adverse effects on the credit union.

credit risk In order to manage this risk, the board of directors regularly reviews and approves the credit union’s credit policy. All loan applications are assessed with reference to the credit policy in force at the time. Subsequently loans are regularly reviewed for any factors that may indicate that the likelihood of repayment has changed.

accounting records The directors believe that they comply with the requirements of Section 108 of the Credit Union Act, 1997 (as amended) with regard to books of account by employing accounting personnel with appropriate expertise and by providing adequate resources to the finance function. The books of account of the credit union are maintained at the credit union's premises at 4547 Ashe Street, Tralee, Co. Kerry.

market risk Market risk is the risk that the value of an investment will decrease. This risk can arise from fluctuations in values of, or income from, assets or changes in interest rates.

lack of loan demand The credit union provides lending products to its members and promotes these products through various marketing initiatives.

liquidity risk Liquidity risk is the risk that the credit union will not have sufficient cash resources to meet day to day running costs and repay members’ savings when demanded.

market risk The board of directors regularly reviews and approves the credit union’s investment policy and funds are invested in compliance with this policy and regulatory guidance.

Operational risk Operational risk is the risk of loss resulting from inadequate or failed processes or systems of the credit union, any failure by persons connected with the credit union or from external events.

liquidity risk The credit union’s policy is to maintain sufficient funds in liquid form at all times to ensure that it can meet its liabilities as they fall due.

Global macro-economic risk There is an economic and operational risk relating to rising inflation rates, disruption to global supply chains and a general uncertainty in the markets as a result of the pandemic and the on-going war in Eastern Europe.

Operational risk The operational risk of the credit union is managed through the employment of suitably qualified staff to ensure appropriate processes, procedures and systems are implemented and are further supported with a robust reporting structure.

Global macro-economic risk The board of directors and management closely monitor the developments of rising inflation rates and disruption to global supply chains and markets, and continue to take appropriate

events after the end of the financial year There have been no significant events affecting the credit union since the year end. auditors In accordance with Section 115 of the Credit Union Act, 1997 (as amended), the auditors Grant Thornton offer themselves for re-election.

This report was approved by the board and signed on its behalf by:

eddie enright chairperson of the Board of Directors

John O’Regan member of the Board of Directors Date 15th november 2022 17

CARA CREDIT UNION // ANNUAL REPORT 2022

ANNUAL REPORT 2022

DIRECTORS’ RESPONSIBILITIES STATEMENT For the Financial year ended 30 September 2022

The directors are responsible for preparing the financial statements in accordance with applicable Irish law and regulations. The directors have elected to prepare the financial statements in accordance with FRS102 ‘The Financial Reporting Standard applicable in the UK andRepublic of Ireland’ (FRS102). The directors are also responsible for preparing the other information included in the annual report.

The Credit Union Act, 1997 (as amended) requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the credit union and of the income and expenditure of the credit union for that period.

In preparing those financial statements the directors are required to: • select suitable accounting policies and then apply them consistently; • make judgements and estimates that are reasonable and prudent; • state whether the financial statements have been prepared in accordance with applicable accounting standards, identify those standards, and note the effect and reason for any material departure from those standards; and • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the credit union will continue in business.

BOaRD OVeRSiGht cOmmittee'S ReSPOnSiBilitieS Statement For the Financial year ended 30th September 2022 18

The Directors are responsible for ensuring that the credit union keeps or causes to be kept adequate accounting records which correctly explain and record the transactions of the credit union, enable at any time the assets, liabilities, financial position and income and expenditure of the credit union to be determined with reasonable accuracy, enable them to ensure that the financial statements comply with the Credit Union Act, 1997 (as amended) and enable the financial statements to be audited. They are also responsible for safeguarding the assets of the credit union and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The directors are responsible for the maintenance and integrity of the corporate and financial information included on the credit union’s website.

On behalf of the Board: eddie enright chairperson of the Board of Directors John O’Regan member of the Board of Directors 15th november 2022

The Credit Union Act, 1997 (as amended) requires the appointment of a board oversight committee to assess whether the board of directors has operated in accordance with part iv, part iv(a) and any regulations made for the purposes of part iv or part iv(a) of the Credit Union Act, 1997 (as amended) and any other matter prescribed by the Central Bank of Ireland in respect of which they are to have regard to in relation to the board of directors. ann-marie Brosnan chairperson of the Board Oversight committee 15th november 2022

INDEPENDENT AUDITOR’S REPORT OF CARA CREDIT UNION LIMITED Opinion We have audited the financial statements of Cara Credit Union Limited, which comprise the income and expenditure account, the statement of other comprehensive income, the balance sheet, the statement of changes in reserves and the statement of cash flows for the financial year ended 30 September 2022, and the related notes to the financial statements, including the summary of significant accounting policies.

The financial reporting framework that has been applied in the preparation of the financial statements is Irish law including the Credit Union Act, 1997 (as amended) and accounting standards issued by the Financial Reporting Council including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (Generally Accepted Accounting Practice in Ireland).

In our opinion, Cara Credit Union Limited’s financial statements: • give a true and fair view in accordance with Generally Accepted Accounting Practice in Ireland of the state of the credit union’s affairs as at 30 September 2022 and of its income and expenditure and cash flows for the year then ended; 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 in the ‘responsibilities of the auditor for the audit of the financial statements’ section of our report. We are independent of the

credit union in accordance with the ethical requirements that are relevant to our audit of the financial statements in Ireland, including the Ethical Standard for Auditors (Ireland) issued by the Irish Auditing and Accounting Supervisory Authority (IAASA), and the ethical pronouncements established by Chartered Accountants Ireland, applied as determined to be appropriate in the circumstances for the entity.

We have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. conclusions relating to going concern In auditing the financial statements, we have concluded that the directors’ use of going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the credit union’s ability to continue as a going concern for a period of at least twelve months from the date when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.

Other information Other information comprises information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. Our opinion on the financial 19

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ANNUAL REPORT 2022

INDEPENDENT AUDITOR’S REPORT TO MEMBERS contd.

INDEPENDENT AUDITOR’S REPORT TO MEMBERS contd.

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.

As part of an audit in accordance with ISAs (Ireland), the auditor will exercise professional judgement and maintain professional scepticism throughout the audit. The auditor will also:

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 on the other information that we obtained prior to the date of this auditor’s report, 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. matters on which we are required to report by the credit union act, 1997 (as amended) Based solely on the work undertaken in the course of the audit, we report that: • we have obtained all the information and explanations which, 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 of the credit union; and • 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 Act.

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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 which give a true and fair view in accordance with Generally Accepted Accounting Practice in Ireland, including FRS 102, and for such internal control as they determine 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 intends to liquidate the credit union or to cease operations, or has no realistic alternative but to do so.

Responsibilities of the auditor for the audit of the financial statements The auditor’s 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 their 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.

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for their opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the credit union’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

• 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 they conclude that a material uncertainty exists, they are required to draw attention in the auditor’s report to the related disclosures in the financial statements or, if such disclosures are

inadequate, to modify their opinion. Their conclusions are based on the audit evidence obtained up to the date of the auditor’s report.

However, future events or conditions may cause the credit union to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves a true and fair view.

The auditor communicates with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that may be identified during the audit. the purpose of our audit work and to whom we owe our responsibilities This report is made solely to the credit union’s members, as a body, in accordance with section 120 of the Credit Union Act, 1997 (as amended).

Our audit work has been undertaken so that we might state to the credit union’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the credit union and the credit union’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Denise O’connell Fca for and on behalf of Grant Thornton Chartered Accountants & Statutory Audit Firm Limerick 15th November 2022 21

CARA CREDIT UNION // ANNUAL REPORT 2022

ANNUAL REPORT 2022

BALANCE SHEET

INCOME & EXPENDITURE ACCOUNT

aS at 30th September 2022

For the Financial year ended 30th September 2022

incOme Interest on members’ loans Other interest income and similar income net inteReSt incOme Other income tOtal incOme

Schedule

2022 €

2021 €

7,254,478 1,473,721 8,728,199 1,546,842 10,275,041

6,752,191 1,347,270 8,099,461 346,768 8,446,229

Employment costs 3 Other management expenses Depreciation Net impairment losses/(gains) on loans to members (note 5) tOtal exPenDituRe

3,085,933 4,105,124 174,943 41,290 7,407,290

2,777,429 3,788,185 146,755 (104,203) 6,608,166

SuRPluS FOR the Financial YeaR

2,867,751

1,838,063

1 2

exPenDituRe

STATEMENT OF OTHER COMPREHENSIVE INCOME For the Financial year ended 30th September 2022

Surplus for the financial year Other comprehensive income tOtal cOmPRehenSiVe incOme FOR the Financial YeaR

2022 €

2021 €

2,867,751 2,867,751

1,838,063 1,838,063

The financial statements were approved and authorised for issue by the Board and signed on behalf of the credit union by: ceO: chairperson Board of Directors: chairperson Board Oversight committee:

The notes on pages 26 to 41 form part of these financial statements.

22

Patrick Laide 15th Nov. 2022 Eddie Enright 15th Nov. 2022 Ann-Marie Brosnan 15th Nov. 2022

2022 aSSetS

2021

notes

€

€

7 7 8 9 14 10 11 12

8,121,394 45,556,999 138,074,848 107,278,154 (7,950,137) 5,492 2,373,887 265,000 721,582 294,447,219

5,675,461 48,576,873 136,900,261 98,824,435 (7,713,548) 7,318 2,196,327 265,000 695,529 285,427,656

13 13 14 15 16

245,162,024 5,014,306 1,029,298 53,578 251,259,206

240,724,795 199,533 3,149,067 977,079 56,920 245,107,394

18 18

36,820,000 1,638,163

28,684,000 1,588,282

18 18

4,360,319 369,531 43,188,013

9,837,839 210,141 40,320,262

294,447,219

285,427,656

Cash and balances at bank Deposits and investments – cash equivalents Deposits and investments – other Loans to members Provision for bad debts Members’ current accounts overdrawn Tangible fixed assets Investments in associates Debtors, prepayments and accrued income tOtal aSSetS liaBilitieS Members’ shares Members’ deposits Members’ current accounts Other liabilities, creditors, accruals and charges Other provisions tOtal liaBilitieS ReSeRVeS Regulatory reserve Operational risk reserve Other reserves - Realised reserves - Unrealised reserves TOTAL RESERVES TOTAL LIABILITIES AND RESERVES

The financial statements were approved and authorised for issue by the Board and signed on behalf of the credit union by: ceO: chairperson Board of Directors: chairperson Board Oversight committee:

Patrick Laide 15th Nov. 2022 Eddie Enright 15th Nov. 2022 Ann-Marie Brosnan 15th Nov. 2022

The notes on pages 26 to 41 form part of these financial statements.

23

CARA CREDIT UNION // ANNUAL REPORT 2022

ANNUAL REPORT 2022

STATEMENT OF CHANGES IN RESERVES

STATEMENT OF CASH FLOWS

For the Financial year ended 30 September 2022

For the Financial year ended 30 September 2022

Regulatory Reserve €

Operational Risk Reserve €

as at 1 October 2020 26,132,529 Surplus for the financial year Transfers of engagements 2,000,000 Transfers between reserves 551,471 as at 1 October 2021 28,684,000 Surplus for the financial year Transfers between reserves 8,136,000 as at 30 September 2022 36,820,000

1,426,386 161,896 1,588,282 49,881 1,638,163

Realised unrealised Reserve Reserves € €

2022 €

2021 €

54,252,334

40,176,681

39,051,979 (47,977,878) 7,254,478 1,473,721 667,479 1,546,842 71,139,154 (69,272,089) (7,191,057) 22,824 (3,284,547)

38,414,086 (42,165,338) 6,752,191 1,347,270 745,879 346,768 47,662,303 (46,202,038) (6,565,614) (1,282,171) (946,664)

(352,503) (1,174,587) (1,527,090)

14,379,829 (47,285) (14,198,229) 134,315

192,280,035 (188,042,339) 4,237,696

187,857,354 (172,969,352) 14,888,002

(573,941)

14,075,653

53,678,393

54,252,334

total

notes

€

OPeninG caSh anD caSh equiValentS 8,468,061 1,830,287 66,993 (527,502) 9,837,839 2,705,565 (8,183,085) 4,360,319

212,005 7,776 14,329 (23,969) 210,141 162,186 (2,796) 369,531

36,238,981 1,838,063 2,243,218 40,320,262 2,867,751 43,188,013

• The regulatory reserve of the credit union as a percentage of total assets as at 30 September 2022 was 12.50% (2021: 10.05%).

• The operational risk reserve of the credit union as a percentage of total assets as at 30 September 2022 was 0.56% (2021: 0.56%).

The notes on pages 26 to 41 form part of these financial statements.

cash flows from operating activities Loans repaid by members Loans granted to members Interest on members’ loans Other interest income and similar income Bad debts recovered and recoveries Other income Members' current accounts lodgements Members' current accounts withdrawals Operating expenses Movement in other assets and liabilities net cash flows from operating activities

8 8

14 14

caSh FlOWS FROm inVeStinG actiVitieS Cash and investments introduced from transfers of engagements Fixed asset (purchases)/disposals Net cash flow from other investing activities net cash flows from investing activities caSh FlOWS FROm FinancinG actiVitieS Members’ savings received Members’ savings withdrawn net cash flow from financing activities

13 13

net (decrease)/increase in cash and cash equivalents clOSinG caSh anD caSh equiValentS

6

The notes on pages 26 to 41 form part of these financial statements.

24

25

CARA CREDIT UNION // ANNUAL REPORT 2022

ANNUAL REPORT 2022

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS contd.

For the Financial year ended 30 September 2022

1. leGal anD ReGulatORY FRameWORk Cara Credit Union Limited is registered with the Registry of Credit Unions and is regulated by the Central Bank of Ireland. The registered office of the credit union is located at 45-47 Ashe Street, Tralee, Co. Kerry.

2. accOuntinG POlicieS 2.1 Basis of Preparation of Financial Statements The financial statements have been prepared in accordance with applicable Irish accounting standards, including Financial Reporting Standard 102, the Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland and Irish statute comprising of the Credit Union Act, 1997 (as amended). The financial statements have been prepared on the historical cost basis.

The financial statements are presented in Euro (€) which is also the functional currency of the credit union.

The following principal accounting policies have been applied: 2.2 Statement of compliance The financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (FRS 102).

2.3 Going concern After reviewing the credit union’s projections, the directors have reasonable expectation that the credit union has adequate resources to continue in operational existence for the foreseeable future.

The credit union therefore continues to adopt the going concern basis in preparing its financial statements.

26

2.4 income interest on members’ loans Interest on members’ loans is recognised on an accruals basis using the effective interest method.

Deposit and investment income Deposit and investment income is recognised on an accruals basis using the effective interest method.

Other income Other income is recognised on an accruals basis.

2.5 cash and cash equivalents Cash and cash equivalents comprise cash on hand and deposits and investments with a maturity of less than or equal to three months.

2.6 Deposits and investments held at amortised cost Investments designated on initial recognition as 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 uncollectability. central Bank Deposits Credit unions are obliged to maintain certain minimum deposits with the Central Bank but may also hold an excess over the regulatory minimum.

The regulatory minimum deposits are technically assets of the credit union but to which the credit union has restricted access. The regulatory minimum portion will not ordinarily be returned to the credit union while it is a going concern and is

separately identified in note 7, Deposits and investments - other. Funds held with the Central Bank in excess of the regulatory minimum requirements are fully available to the credit union and are therefore treated as cash equivalents and are separately identified in note 7, Deposits and investments – cash equivalents. The amounts held on deposit with the Central Bank are not subject to impairment reviews. investments at Fair Value Investments designated on initial recognition as non basic are recognised at fair value. They are subsequently measured at fair value (market value) at the year-end date and all gains and losses are taken to the income and expenditure account.

2.7 Financial assets - loans to members Loans 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.

Loans are derecognised when the right to receive cash flows from the asset has expired, usually when all amounts outstanding have been repaid by the member.

2.8 Provision for Bad Debts The credit union assesses if there is objective evidence that any of its loans are impaired with due consideration of environmental factors. The loans are assessed collectively in groups that share similar credit risk characteristics. Individually significant loans are assessed on a loan by loan basis. In addition, if there is objective evidence that any individual loan is impaired, a specific loss will be recognised. Bad debt provisioning is monitored by the credit union, and the credit union assesses and approves its provisions and the adequacy of same on a regular basis.

Any bad debts/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.

2.9 tangible Fixed assets Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

The credit union adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the credit union. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to the income and expenditure account during the period in which they are incurred.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

27

CARA CREDIT UNION // ANNUAL REPORT 2022

ANNUAL REPORT 2022

NOTES TO THE FINANCIAL STATEMENTS contd.

NOTES TO THE FINANCIAL STATEMENTS contd.

Depreciation is provided on the following basis:

The contributions are recognised as an expense in the income and expenditure account when they fall due. Amounts not paid are shown in accruals as a liability on the balance sheet. The assets of the plan are held separately from the credit union in independently administered funds. The amount payable at the year end in respect of same was €36,467 (2021: €7,866).

Depreciation is provided on the following basis: Freehold premises 2% straight line per annum Fixtures and fittings 10% straight line per annum Leasehold improvements Over the lesser of the useful economic life and the remaining term of the lease Computer equipment 25% straight line per annum The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within ‘other gains’ or ‘other losses’ in the income and expenditure account.

2.10 impairment of assets At each reporting date, assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying amount.

If the estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in the income and expenditure account. If an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but not in excess of the 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.

28

2.11 investments in associates Investments in associates are accounted for at cost less impairment.

2.12 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.

2.13 Financial liabilities - members’ shares and members’ deposits Members’ shares and members’ deposits are redeemable and therefore are classified as financial liabilities. They are initially recognised at the amount of cash deposited and subsequently measured at amortised cost.

2.14 members’ Deposits Interest on members’ deposits is recognised on an accruals basis using the effective interest method.

2.15 members’ current accounts The credit union provides Member Personal Current Account Services in accordance with Section 49(3) of the Credit Union Act, 1997 (as amended).

2.16 Other Payables Short term other liabilities, creditors, accruals and charges are measured at the transaction price.

2.17 Pension costs The credit union operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the credit union pays fixed contributions into a separate entity. Once the contributions have been paid, the credit union has no further payments obligations.

2.18 holiday Pay A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the balance sheet date.

2.19 Operating leases Rentals payable under operating leases are charged to the income and expenditure account on a straight line basis over the lease term.

2.20 Derecognition of Financial liabilities Financial liabilities are derecognised when the obligations of the credit union specified in the contract are discharged, cancelled or expired.

2.21 Regulatory Reserve The Credit Union Act 1997 (Regulatory Requirements) Regulations 2016 requires credit unions to establish and maintain a minimum regulatory reserve requirement of at least 10 per cent of the assets of the credit union. This reserve is to be perpetual in nature, freely available to absorb losses, realised financial reserves that are unrestricted and non-distributable.

2.22 Operational Risk Reserve Section 45(5)(a) of the Credit Union Act, 1997 (as amended) requires each credit union to maintain an additional reserve that it has assessed is required for operational risk having regard to the

nature, scale and complexity of the credit union.

Credit unions are required to maintain a minimum operational risk reserve having due regard for the sophistication of the business model.

The definition of operational risk is the risk of losses stemming from inadequate or failed internal processes, people and systems or from external events. The directors have considered the requirements of the Act and have considered an approach to the calculation of the operational risk reserve. The credit union uses the Basic Indicator Approach as set out in the operational risk measurements techniques proposed under Basel II capital adequacy rules for banking institutions in calculating the operational risk reserve. Therefore the credit union 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 calculation.

In addition, the credit union has included in its operational risk reserve a Member Personal Current Account Service operational risk reserve, in accordance with Section 49(3) of the Credit Union Act, 1997 (as amended).

2.23 Other Reserves Other reserves are the accumulated surpluses to date that have not been declared as dividends returnable to members. The other reserves are subdivided into realised and unrealised. In accordance with the Central Bank guidance note for credit unions on matters relating to accounting for investments and distribution policy, investment income that has been recognised but will not be received within 12 months of the balance sheet date is classified as unrealised and is not distributable. A reclassification between unrealised and realised is made as investments come to within 12 months of maturity date. The directors have 29

CARA CREDIT UNION // ANNUAL REPORT 2022

ANNUAL REPORT 2022

NOTES TO THE FINANCIAL STATEMENTS contd.

NOTES TO THE FINANCIAL STATEMENTS contd.

deemed it appropriate that interest on loans receivable at the balance sheet date and the balance of the SPS refund receivable is also classified as unrealised and is not distributable. All other income is classified as realised.

this company. Therefore the investment has been accounted for as an investment in an associate.

2.24 Distribution Policy Dividends are made from the current year’s surplus or reserves set aside for that purpose. The board’s proposed dividends to members each year is based on the distribution policy of the credit union.

The rate of dividends recommended by the board will reflect: • the risk profile of the credit union, particularly in its loan and investments portfolios; • the board’s desire to maintain a stable rather than a volatile rate of dividend each year; and • members’ legitimate dividend 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 still remain above minimum regulatory requirements.

The credit union accounts for dividends when members ratify such payments at the Annual General Meeting.

2.25 taxation The credit union is not subject to income tax or corporation tax on its activities.

3. JuDGementS in aPPlYinG accOuntinG POlicieS anD keY SOuRce OF eStimatiOn unceRtaintY Preparation of the financial statements requires the directors to make significant judgements and estimates. The items in the financial statements where these judgements and estimates have been made include: 30

Determination of depreciation, useful economic life and residual value of tangible assets The annual depreciation charge depends primarily on the estimated lives of each type of asset and, in certain circumstances, estimates of residual values.

The directors regularly review these useful lives and change them if necessary to reflect current conditions. In determining these useful lives management consider technological change, patterns of consumption, physical condition and expected economic utilisation of the assets.

Changes in the useful lives can have a significant impact on the depreciation charge for the financial year. The net book value of tangible fixed assets subject to depreciation at the year end was €2,373,887 (2021: €2,196,327).

Provision for bad debts The credit union’s accounting policy for impairment of loans is set out in note 2.8. 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. The provision for bad debts in the financial statements at the year end was €7,950,137 (2021: €7,713,548) representing 7.41% (2021: 7.81%) of the total gross loan book. investments in associates The investments in associates represents the credit union’s investment in Metacu Management Designated Activity Company. This investment was made for operational purposes. The credit union holds 6.25% Redeemable A Ordinary shares in the company and through the terms of the shareholders agreement agreed between each of the participating credit unions, the credit union is deemed to have influence over the operations of

Operational risk reserve The directors have considered the requirements of the Credit Union Act, 1997 (as amended) and have developed an approach to the calculation of the operational risk reserve. The credit union uses the basic indicator approach as set out in the operational risk measurements techniques proposed under Basel II capital adequacy rules for banking institutions in calculating the minimum operational risk reserve. In addition, the credit union has included in its operational risk reserve a Member Personal Current Account Service operational risk reserve, in accordance with Section 49(3) of the Credit Union Act, 1997 (as amended).

The operational risk reserve of the credit union at the year end was €1,638,163 (2021: €1,588,282). adoption of going concern basis for financial statements preparation The credit union continue to closely monitor developments within the global macro-economic environment. The directors have prepared projections and cash flows for a period of at least twelve months from the date of the approval of the financial statements which demonstrate that there is no material uncertainty regarding the credit union’s ability to meet its liabilities as they fall due, and to continue as a going concern. On this basis, the directors consider it appropriate to prepare the financial statements on a going concern basis.

Accordingly, these financial statements do not include any adjustments to the carrying amounts and classification of assets and liabilities that may arise if the credit union was unable to continue as a going concern.

31

CARA CREDIT UNION // ANNUAL REPORT 2022

ANNUAL REPORT 2022

NOTES TO THE FINANCIAL STATEMENTS contd.

NOTES TO THE FINANCIAL STATEMENTS contd. € 2022

4. keY manaGement PeRSOnnel cOmPenSatiOn The directors of Cara Credit Union Limited are all unpaid volunteers.

The key management personnel compensation is as follows: Short term employee benefits paid to key management Payments to pension schemes total key management personnel compensation

1,104,035 77,172 1,181,207

970,847 71,119 1,041,966

5. net imPaiRment lOSSeS/(GainS) On lOanS tO memBeRS Bad debts recovered Impairment of loan interest reclassed as bad debt recoveries Movement in bad debts provision during the year Loans written off during the year net impairment losses/(gains) on loans to members

(543,335) (124,144) 236,589 472,180 41,290

(609,446) (136,433) 133,801 507,875 (104,203)

6. caSh anD caSh equiValentS Cash and balances at bank Deposits and investments - cash equivalents (note 7) total cash and cash equivalents

8,121,394 45,556,999 53,678,393

€ 2022

€ 2021

8. Financial aSSetS – lOanS tO memBeRS As at 1 October Loans arising on transfer of engagements Loans granted during the year Loans repaid during the year Gross loans and advances

98,824,435 47,977,878 (39,051,979) 107,750,334

90,347,488 5,233,570 42,165,338 (38,414,086) 99,332,310

Bad debts Loans written off during the year as at 30 September

(472,180) 107,278,154

(507,875) 98,824,435

9. PROViSiOn FOR BaD DeBtS As at 1 October Provision arising on transfer of engagements Movement in bad debts provision during the year as at 30 September

7,713,548 236,589 7,950,137

7,168,641 411,106 133,801 7,713,548

The provision for bad debts is analysed as follows: Grouped assessed loans Provision for bad debts

7,950,137 7,950,137

7,713,548 7,713,548

€ 2021

5,675,461 48,576,873 54,252,334

10. tanGiBle FixeD aSSetS € Freehold premises

€ Fixtures & Fittings

€ leasehold improvement

€ computer equipment

€ total

cOSt 1 October 2021 Additions at 30 September 2022

3,326,756 3,326,756

816,613 163,442 980,055

78,016 78,016

611,419 189,061 800,480

4,832,804 352,503 5,185,307

DePReciatiOn 1 October 2021 Charge for the year at 30 September 2022

1,448,181 60,885 1,509,066

625,529 48,709 674,238

38,763 14,278 53,041

524,004 51,071 575,075

2,636,477 174,943 2,811,420

net BOOk Value 30 September 2022 30 September 2021

1,817,690 1,878,575

305,817 191,084

24,975 39,253

225,405 87,415

2,373,887 2,196,327

7. DePOSitS anD inVeStmentS Deposits and investments - cash equivalents Accounts in authorised credit institutions (Irish and non-Irish based) Central Bank deposits total deposits and investments - cash equivalents

32

15,731,801 29,825,198 45,556,999

22,272,883 26,303,990 48,576,873

Deposits and investments - other Accounts in authorised credit institutions (Irish and non-Irish based) Bank bonds Irish and EEA state securities Central Bank deposits Other investments total deposits and investments - other

64,599,692 50,064,871 20,319,276 2,274,802 816,207 138,074,848

73,067,892 38,419,422 20,357,006 2,230,757 2,825,184 136,900,261

tOtal DePOSitS anD inVeStmentS

183,631,847

185,477,134

33

CARA CREDIT UNION // ANNUAL REPORT 2022

ANNUAL REPORT 2022

NOTES TO THE FINANCIAL STATEMENTS contd.

11. inVeStmentS in aSSOciateS

NOTES TO THE FINANCIAL STATEMENTS contd.

265,000

accumulateD imPaiRment At 1 October 2021 and 30 September 2022

-

net BOOk Value at 30 September 2022 At 30 September 2021

79,647 197,271 324,657 120,007 721,582

217,555 200,067 277,907 695,529

As at 1 October Members' savings arising on transfer of engagements Received during the year Withdrawn during the year as at 30 September

240,924,328 192,280,035 (188,042,339) 245,162,024

208,844,083 17,192,243 187,857,354 (172,969,352) 240,924,328

Members’ savings are analysed as follows: Members’ shares Members’ deposits total members’ savings

245,162,024 245,162,024

240,724,795 199,533 240,924,328

3,141,749 71,139,154 (69,272,089) 5,008,814

1,681,484 47,662,303 (46,202,038) 3,141,749

Prepayments Loan interest receivable Accrued income on investments Other debtors – SPS refund as at 30 September 13. memBeRS’ SaVinGS

265,000 265,000

inteReStS in aSSOciate The credit union has interests in the following associate:

Metacu Management Designated Activity Company

€ 2021

12. DeBtORS, PRePaYmentS anD accRueD incOme

cOSt At 1 October 2021 and 30 September 2022

associate

€ 2022

€

type of shares held

Proportion held (%)

net assets €

Profit or loss €

Redeemable A Ordinary

6.25%

4,030,007

4,607

14. memBeRS’ cuRRent accOuntS

Registered Address: 14 Ely Place, Dublin 2, Ireland The above financial information in respect of Metacu Management Designated Activity Company was extracted from the audited financial statements for the year ended 31 December 2021.

As at 1 October Lodgements during the year Withdrawals during the year as at 30 September

no. of accounts

The effect of including this investment as if it had been accounted for using the equity method would be as follows: € Share of net assets at 1 October 2021 Share of profit/(loss) for the financial year after tax at 30 September 2022

251,587 288 251,875

Debit Credit Permitted overdrafts

200 4,811 45

5,492 5,014,306 27,450

933,456 95,842 1,029,298

906,847 70,232 977,079

15. OtheR liaBilitieS, cReDitORS, accRualS & chaRGeS Accruals and other liabilities PAYE/PRSI as at 30 September

34

Balance of accounts €

35

CARA CREDIT UNION // ANNUAL REPORT 2022

ANNUAL REPORT 2022

NOTES TO THE FINANCIAL STATEMENTS contd.

NOTES TO THE FINANCIAL STATEMENTS contd. € 2022

€ 2021 the table below sets out fair value measurements using the fair value hierarchy:

16. OtheR PROViSiOnS holiday Pay accrual At 1 October Charged to the income and expenditure account at 30 September

56,920 (3,342) 53,578

62,508 (5,588) 56,920

17. Financial inStRumentS 17a. Financial instruments - measured at amortised cost Financial assets Financial assets measured at amortised cost

€ 2022

€ 2021

292,424,165

283,204,869

Financial liabilities Financial liabilities measured at amortised cost

€ 2022 251,259,206

€ 2021 245,107,394

at 30 September 2022 Bank bonds total

€ total 7,322,386 7,322,386

€ level 1 -

€ level 2 7,322,386 7,322,386

€ level 3 -

at 30 September 2021 Bank bonds total

€ total 7,322,386 7,322,386

€ level 1 -

€ level 2 7,322,386 7,322,386

€ level 3 -

There was no fair value movement recognised in the income and expenditure account for the year ended 30 September 2022 (2021: €nil).

18. ReSeRVeS Financial assets measured at amortised cost comprise of cash and balances at bank, deposits and investments, loans, members’ current accounts overdrawn, investments in associates, accrued income on investments and other debtors.

Financial liabilities measured at amortised cost comprise of member savings, members’ current accounts, other liabilities, creditors, accruals and charges and other provisions.

17b. Financial instruments - Fair Value measurements FRS 102 requires fair value measurements to be disclosed by the source of inputs, using a three level hierarchy: • Quoted prices for identical instruments in active market (level 1); • Prices of recent transactions for identical instruments and valuation techniques using observable market data (level 2), and • Valuation techniques using unobservable market data (level 3).

36

balance 1/10/21

appropriation of current year surplus

transfers between reserves

balance 30/09/22

€

€

€

€

28,684,000

-

8,136,000

36,820,000

Operational risk reserve

1,588,282

-

49,881

1,638,163

Other Reserves Realised General reserve total realised reserves

9,837,839 9,837,839

2,705,565 2,705,565

(8,183,085) (8,183,085)

4,360,319 4,360,319

unrealised Interest on loans reserve 200,067 Investment income reserve 10,074 SPS reserve total unrealised reserves 210,141 total reserves 40,320,262

42,179 120,007 162,186 2,867,751

(2,796) (2,796) -

197,271 52,253 120,007 369,531 43,188,013

Regulatory reserve

37

CARA CREDIT UNION // ANNUAL REPORT 2022

ANNUAL REPORT 2022

NOTES TO THE FINANCIAL STATEMENTS contd.

NOTES TO THE FINANCIAL STATEMENTS contd.

2022 no. of loans

19. cReDit RiSk DiSclOSuReS In line with regulatory requirements, the credit union: • restricts the concentration of lending by the credit union within certain sectors or to connected persons or groups (concentration limits); • restricts the absolute amount of lending to certain sectors to a set percentages of the regulatory reserve (large exposure limit); • restricts the loan duration of certain loans to specified limits (maturity limits); and • requires specified lending practices to be in place where loans are made to certain sectors such as business loans, community loans or loans to another credit union.

The carrying amount of the loans to members represents the credit union’s maximum exposure to credit risk. The following provides information on the credit quality of loan repayments. Where loans are not impaired, it is expected that the amounts repayable will be received in full.

2022

2021

€

%

€

%

lOanS nOt imPaiReD Total loans not impaired, not past due

84,415,187

78.69%

76,775,445

77.69%

imPaiReD lOanS: Not past due Up to 9 weeks past due Between 10 and 18 weeks past due Between 19 and 26 weeks past due Between 27 and 39 weeks past due Between 40 and 52 weeks past due 53 or more weeks past due total impaired loans

2,910,920 16,284,269 1,582,486 610,191 712,642 241,685 520,774 22,862,967

2.71% 15.18% 1.48% 0.57% 0.66% 0.23% 0.48% 21.31%

1,682,958 15,901,763 1,614,247 785,566 825,151 401,807 837,498 22,048,990

1.70% 16.09% 1.63% 0.80% 0.83% 0.41% 0.85% 22.31%

107,278,154

100.00%

98,824,435

100.00%

tOtal lOanS

2021 €

no. of loans

€

20. RelateD PaRtY tRanSactiOnS 20a. lOanS Loans advanced to related parties during the year

18

184,940

18

330,736

Total loans outstanding to related parties at the year end

40

604,406

43

613,079

Total provision for loans outstanding to related parties

26,792

30,122

The related party loans stated above comprise of loans outstanding to directors and the management team (to include their family members or any business in which the directors or management team had a significant shareholding). Total loans outstanding to related parties represents 0.56% of the total loans outstanding at 30 September 2022 (2021: 0.62%).

20b. SaVinGS The total amount of savings held by related parties at the year end was €780,744 (2021: €828,755).

20c. tRanSactiOnS inVOlVinG DiRectORS Cara Credit Union Limited incurred expenditure from Ticcbox in respect of buildings and facilities monitoring of health and safety matters of €5,444 during the financial year ended 30 September 2022 (2021: €7,743). Caroline Sugrue (director of Cara Credit Union) is a director of Ticcbox.

Cara Credit Union Limited incurred expenditure from Transition Solutions Limited for the provision of coaching/mentoring services to a member of the senior management of €2,850 during the financial year ended 30 September 2022 (2021: €nil). Danny Kerins (director of Cara Credit Union Limited) is a director of Transition Solutions Limited.

21. aDDitiOnal Financial inStRumentS DiSclOSuReS 21a. Financial RiSk manaGement The credit union manages its members’ savings and loans so that it earns income from the margin between interest receivable and interest payable. The main financial risks arising from the credit union’s activities are credit risk, market risk, liquidity risk and interest rate risk. The board of directors reviews and agrees policies for managing each of these risks, which are summarised below. credit risk: Credit risk is the risk that a borrower will default on their contractual obligations relating to repayments to the credit union, resulting in financial loss. In order to manage this risk, the board of directors regularly reviews and approves the credit union’s credit policy. Credit risk mitigation may include the requirement to obtain collateral as set out in the credit union’s loan policy. Where collateral or guarantees are required, they are usually taken as a secondary source of repayment in the event of

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CARA CREDIT UNION // ANNUAL REPORT 2022

ANNUAL REPORT 2022

NOTES TO THE FINANCIAL STATEMENTS contd.

NOTES TO THE FINANCIAL STATEMENTS contd.

the borrower’s default. The credit union maintains policies which detail the acceptability of specific classes of collateral. The principal collateral types for loans are: an attachment over members’ pledged shares; personal guarantees; and charges over assets. The nature and level of collateral required depends on a number of factors such as the term of the loan and the amount of exposure. All loan applications are assessed with reference to the credit policy in force at the time. Subsequently loans are regularly reviewed for any factors that may indicate that the likelihood of repayment has changed.

22. DiViDenDS

market risk: Market risk is the risk that the value of an investment will decrease. This risk can arise from fluctuations in values of, or income from, assets or changes in interest rates. The board of directors regularly reviews and approves the credit union’s investment policy and funds are invested in compliance with this policy and regulatory guidance. liquidity risk: Liquidity risk is the risk that the credit union will not have sufficient cash resources to meet day to day running costs and repay members’ savings when demanded. The credit union’s policy is to maintain sufficient funds in liquid form at all times to ensure that it can meet its liabilities as they fall due. interest rate risk: The credit union’s main interest rate risk arises from adverse movements in interest rates receivable which would affect investment income. The credit union reviews any potential new investment product carefully to ensure that minimum funds are locked in low yielding long term investments yet at the same time maximising investment income receivable.

21b. liquiDitY RiSk DiSclOSuReS The credit union’s policy is to maintain sufficient funds in liquid form at all times to ensure that it can meet its liabilities as they fall due. The credit union adheres on an ongoing basis to the minimum liquidity ratio and minimum short term liquidity ratio as set out in regulatory requirements.

21c. inteReSt Rate RiSk DiSclOSuReS The following shows the average interest rates applicable to relevant financial assets and financial liabilities.

2022 2021 € average € average interest rate % interest rate % Gross loans to members

107,278,154

7.20%

98,824,435

7.30%

Any dividend payable is at the discretion of the directors and is therefore not a financial liability of the credit union until declared and approved at the AGM.

The following distributions were paid during the year: % Dividend on shares

2022

0.00%

€

%

-

0.00%

2021

€ -

The directors are not proposing a dividend in respect of the financial year ended 30 September 2022 (2021: The directors did not propose a dividend).

23. eVentS aFteR the enD OF the Financial YeaR There have been no significant events affecting the credit union since the year end.

24. inSuRance aGainSt FRauD The credit union has Insurance against fraud in the amount of €5,200,000 (2021: €5,200,000) in compliance with Section 47 of the Credit Union Act, 1997 (as amended).

25. caPital cOmmitmentS The credit union had capital commitments as follows: Committed for but not provided in these financial statements as at 30 September

2022 € -

2021 € 114,611 114,611

26. leaSinG cOmmitmentS The credit union’s future minimum lease payments at the balance sheet date were as follows: 2022 € Less than 1 year 1 to 5 years at 30 September

10,000 10,000

2021 € 10,000 10,000 20,000

27. cOmPaRatiVe inFORmatiOn Comparative information has been reclassified where necessary to conform to current year presentation.

28. aPPROVal OF Financial StatementS The Board of Directors approved these financial statements for issue on 15th November 2022.

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CARA CREDIT UNION // ANNUAL REPORT 2022

ANNUAL REPORT 2022

SCHEDULES TO THE INCOME & EXPENDITURE ACCOUNT

NOMINATIONS & ELECTIONS

For the Financial year ended 30 September 2022 The following schedules do not form part of the statutory financial statements which are the subject of the Independent Auditor’s Report on pages 19 - 21.

auDitORS

ScheDule 1 - OtheR inteReSt incOme anD SimilaR incOme

Under Rule 107 (2) Cara Credit Union Ltd. shall appoint an auditor in accordance with Part VII of the Act, Grant Thornton being eligible seeks re-election.

Investment income received/receivable within 1 year Investment income receivable outside of 1 year total per income and expenditure account ScheDule 2 - OtheR incOme Sundry income Commissions MPCAS fees ECCU rebate SPS refund total per income and expenditure account ScheDule 3 - OtheR manaGement exPenSeS Rent and rates Light and heat Repairs, maintenance and cleaning Security costs Printing and stationery Postage and telephone Marketing and sponsorship Chapter dues AGM and convention expenses Travel and subsistence Bank charges Central Credit Register costs Audit fee General insurance Share and loan insurance and DBI Office expenses Board expenses Staff training Professional body membership Legal, professional fees and repayment costs Computer maintenance, technology and IT costs Miscellaneous expenses Affiliation fees and trade subscriptions Regulatory levies Member initiatives MPCAS costs total per income and expenditure account 42

€ 2022

€ 2021

1,431,542 42,179 1,473,721

1,339,494 7,776 1,347,270

€ 2022

€ 2021

32,876 36,201 175,207 102,486 1,200,072 1,546,842

33,487 28,923 120,843 163,515 346,768

€ 2022

€ 2021

38,145 73,707 114,731 48,499 52,406 57,799 271,138 13,145 51,061 13,509 213,618 41,279 33,825 102,540 1,171,535 66,853 3,197 46,137 13,975 217,903 739,621 (641) 15,883 435,323 267,862 2,074 4,105,124

51,342 45,245 108,065 48,350 55,579 93,143 262,912 9,540 65,590 9,178 169,800 59,364 33,825 94,813 1,095,794 57,315 791 41,116 9,270 131,441 653,822 6,640 21,818 422,870 238,500 2,062 3,788,185

BOaRD OF DiRectORS Due to the passing of Richard Bono, Sandra Byrne was co-opted to fill the vacancy on the Board of Directors and under Rule 43 retires and being eligble, seeks election to the Board of Directors.

Directors Eddie Enright, Tom Lawlor and Conor Fitzgerald, under Rule 42 resign, and, being eligible seek re-election.

eddie enright Eddie has served as a Director of Cara Credit Union since April 2016, taking on the position of Chairperson in 2022. He also sits on the Risk Committee & the Investment Committee. He has a degree in Education and Training from NUIG. He works in financial services and is a Qualified Financial Advisor. Eddie has a wide range of management experience having worked in various roles for 35 years at the FÁS Training Centre in Tralee. He is a native of Finuge and lives in Tralee.

tom lawlor Our longest serving Director, Tom joined the Board in 2006 and has served in many officer posts and sat on many committees during that time.

Tom also served as Chairman for three years until 2017. A retired farmer, Tom is a proud Ballyheigue man and is a great supporter of both the GAA and the IFA.

conor Fitzgerald Conor was born and raised in Tralee and after completing his studies in Kevin Street College of Technology in Dublin joined RTE in 1972.

In RTE he worked as Telecommunications Technician working in outside broadcast work and RTE Raidió na Gaeltachta until his retirement in 2012.

Sandra Byrne Sandra holds a Bachelor of Business Studies & Diploma in Financial Reporting. She is a Chartered Accountant and member of the Association of Chartered Accountants Ireland (ACA). She is currently employed as Financial Controller to the MetPro Group. Sandra has a wealth of experience in business and financial services and is a keen contributor to the local community. She currently resides in Camp.

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CARA CREDIT UNION // ANNUAL REPORT 2022

ANNUAL REPORT 2022

NOMINATIONS & ELECTIONS contd.

STANDING ORDERS FOR VIRTUAL ANNUAL GENERAL MEETING

BOaRD OVeRSiGht cOmmittee

Voting 1. Each member shall be entitled to one vote irrespective of his/her shareholding, in accordance with section 82(2) of the Credit Uunion Act, 1997 (as amended).

2. As the AGM will be a virtual meeting, voting on motions and elections will be by electronic means. Each member registered for and attending the virtual AGM, will be given the opportunity to exercise their vote electronically during the meeting.

Patrick O’Brien, Stephen O’Sullivan and Seamus Buckley resigned from the Board Oversight Committee in 2022. John Lyons, Martina Flynn and Nisha Srinivasan were co-opted to fill these vacancies and, in accordance with Rule 57 retire and being eligible, seek election to the Board Oversight Committee.

John lyons John joined the Cara Credit Union Board Oversight Committee in April 2022.

He is a finalist of the Association of Chartered Certified Accountants and a Certified Accounting Technician. He also holds a Diploma in Applied Physics and is a qualified electrician. John is involved in the retail sector and resides in Tralee.

martina Flynn Martina joined the Board Oversight Committee of Cara Credit Union in March 2022.

She previously served as a Director of Clanmaurice Credit Union, where she served on the Investment and Risk Committees. Martina holds a Masters in History of Family and is a Certified Public Accountant. She resides in Causeway.

nisha Srinivasan Nisha joined the Board Oversight Committee of Cara Credit Union in 2022.

Nisha started her career with financial institutions and worked extensively in the educational publication industry. Nisha resides in Tralee.

She holds a Master's Degree in Financial Management and also holds an Accounting Technician Certificate from the Institute of Chartered Accountants of India.

election Procedure - electronic Voting 3. Following the announcement of nominations, attendees will be given the opportunity to vote electronically ‘Yes’ or ‘No’ for each candidate. Those in attendance will be given 30 seconds to record their vote. The mechanics of the electronic virtual voting process will be explained in more detail at the AGM by the Chair. Elections shall be in the following order: a. nominations for auditor b. nominations for members of the board oversight committee c. nominations for directors.

4. The votes will be tallied electronically and verified by our Internal auditor. When all elections have been completed and results become available the chair will announce the results. motions 5. In light of the specific difficulties, we are facing in holding an annual General Meeting this year due to Covid-19, the purpose of this year’s AGM is to deal with the essential business of the credit union.

44

6. The essential business of the credit union includes statutory reporting to members on the financial status of the credit union and elect officers. There will be no motions from the floor due to the difficulties in managing same remotely.

7. Members will be invited to submit questions to the board via ‘Chat’ button on the toolbar in the Zoom Webinar and the board will address these during the AGM. 8. All motions must be proposed and seconded by members present at the AGM and moved by the proposer.

9. A proposer of a motion may speak for such period as shall be at the discretion of the chair of the meeting and shall have the right of reply before the motion is put to the meeting for a vote.

10. In exercising his/her right of reply, a proposer may not introduce new material.

11. The seconder of a motion shall have such time as shall be allowed by the chair to second the motion.

12. The chair shall have the absolute right to decide at any time when a motion has been sufficiently discussed and may put the motion to the meeting giving the proposer the right of reply before doing so. miscellaneous 13. The chair of the board of directors shall be the chair of any general meeting, except where he/she is not available, in which case it shall be the vice-chair, except where he/she is not available, in which case the board shall decide amongst themselves who shall act as chair of any general meeting.

14.The chair may at his/her discretion, extend the privilege of the floor to any person who is

45

CARA CREDIT | ANNUAL REPORT CARA CREDIT UNION UNION LTD // ANNUAL REPORT 20222021

not a member.

15.Only matters covered by the agenda at AGM may be considered.

16. The chairman’s decision on any matter relating to these Standing Orders or interpretation of same shall be final.

17. No member shall have more than one vote on each question at any general meeting of the credit union or any adjournment thereof irrespective of his/her shareholding or the number of accounts in his/her name in the credit union provided, however, that except in voting at elections, the presiding member shall have a second or casting vote in the event of equality of voting. Voting by proxy shall be allowed only when a member other than a natural person votes through a representative, who is a member of the group, duly authorised in writing for that purpose and accepted as such by the board of directors.

18. Any special resolution to be decided upon by vote at the AGM shall, unless otherwise expressly provided for by law or the rules, be decided upon by 75% majority of those present and voting.

adjournments 21. Adjournments of the AGM shall take place only in accordance with section 81(1) of the Credit Union Act, 1997 (as amended).

Virtual meeting items 22. All non-presenting participants will be muted and have their cameras switched off to allow the smooth running of the meeting.

23. A member shall only address the meeting when called upon by the Chair to do so.

24. All members are asked to utilise the ‘chat’ button on the bottom of the toolbar in Zoom Webinar to ask questions.

25. All members are reminded to conduct themselves in a professional manner. Please refrain from sharing any explicit, violent or inappropriate content.

26. Provision shall be made for the protection of the Chair from vilification (personal abuse).

27. All members are asked to turn their mobile phone on silent as even the vibrate setting can cause disruptions.

28. The AGM meeting will be recorded.

Suspension / alteration of Standing Orders 19. Any one of these Standing Orders or all of these Standing Orders may be suspended on a motion to this effect receiving a two-thirds majority of those present and entitled to vote.

20. Standing Orders may be amended or altered at a general meeting and only if a motion to this effect has received a two-thirds majority of those present and voting.

TRALEE • CASTLEISLAND • KILLORGLIN • CAUSEWAY • BALLYDUFF 46

TRALEE

45-47 Ashe Street V92 XY06

CASTLEISLAND 67 Main Street V92 F981

KILLORGLIN Mill Road V93 TP65

BALLYDUFF Main Street V92 WN72

CAUSEWAY

Causeway Village V92 P220

Tel: 066 712 2373 | Email: info@caracreditunion.ie | www.caracreditunion.ie