Member First Credit Union Annual Report 2015

emb Annual Report & Accounts 2015

www.mfcu.ie

Contents 02 03 04 07

Always putting our embers First

08 10 12 13 14

Nomination Committee Report Agenda and Motions Directors Report Directors, Committee Members, Staff and Other Information Meet our Member Service Team Year in review Statement of Directors Responsibilities Report of the Auditor to the Members Report of the Board Oversight Committee

Annual Report & Accounts 2015

Notice of Annual General Meeting Notice is hereby given that the Annual General Meeting of Member First Credit Union will take place on Wednesday, 2nd December 2015, at 8.00 p.m. in the Crowne Plaza, Northwood Park, Santry. Members are requested to bring this report and their passbooks to the AGM. Free car parking will be available in the Crowne Plaza Hotel.

The Crowne Plaza Dublin Northwood is located within Northwood Park, Santry Demesne, off the old airport road and beside Morton Athletic Stadium. Transport by bus will be available for members from the credit union offices. Please see below bus timetable to the AGM. Bridget Johnston, Secretary.

All members attending the AGM will be eligible to participate in a FREE draw on the night

Bus Timetable to AGM If you are interested in taking the bus, can you please let us know by calling into the office or contacting the Credit Union on (01) 8513400 or emailing info@mfcu.ie

Bus departing from Artane Location Member First Credit Union, Artane Roundabout Pub, Ardlea Road Artane Beaumont Family Recreation Centre St. Luke’s Church, Kilmore West

Departure time 7.00pm 7.05pm 7.15pm 7.20pm

Bus departing from Coolock Location St Brendan’s Church, Coolock St Joseph’s Church, Bonnybrook Northside Shopping Centre

Departure time 7.00pm 7.10pm 7.20pm

Bus departing from Swords Location Departure time St Cronan’s School (Across from Dr. O’Kelly) 7.00pm JC’s Supermarket (Across from Howard’s Hardware) 7.10pm Fingallian’s GAA Club 7.20pm Member First Credit Union, Swords 7.25pm Main Street, Swords (Fingal CoCo Bus Stop) 7.30pm Buses will arrive at Crowne Plaza at approx.

7.50pm

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Nomination Committee Report FOR THE YEAR ENDED 30 SEPTEMBER 2015 Committee Responsibilities Under Section 56 (B) of the Credit Union and Co-operation with Overseas Regulators Act 2012, the Nomination Committee are responsible for carrying out a review of the composition of the Board of Directors, for identifying any gaps or deficiencies in the skill sets of the Board and to actively seek volunteers from its membership to go forward for election to the Board at the Annual General Meeting.

Every candidate to be nominated for appointment as a member of the Board of Directors shall be proposed through the Nominations Committee only. No person shall otherwise be put forward for election or seek election at the AGM. The Nomination Committee must also ensure that any candidate put forward for election at the AGM has satisfied the Central Bank’s Fitness and Probity code and standards.

The Fitness and Probity code and standards applies to all positions on the Board of Directors, Board Oversight Committee, the CEO and other senior positions where individuals in these roles must be competent and capable; must act honestly, ethically and with integrity and are financially sound.

It is also the responsibility of the Nomination Committee to ensure that there is an appropriate succession plan in place for the Board of Directors. Consequently the Board have agreed a process of renewal in keeping with these requirements. As such, we are preparing a panel of suitable volunteers for nomination to the Board of Directors to be considered for election as vacancies occur on the Board of Directors.

If this is something that interests you and you can provide the time and commitment required to the Credit Union, please let us know in a letter addressed to the: Nominations Committee, c/o CEO, Member First Credit Union, Artane Roundabout, Malahide Road, Dublin 5.

The Nominations Committee have carried out their function and have identified and assessed candidates under the Fitness and Probity regime to stand for election at the AGM. There are 3 vacancies on the Board of Directors to be filled. All elections will be by secret ballot. The terms of office of a director shall not extend beyond the third subsequent AGM after his or her election.

Notice of Elections Elections will be held to fill 3 vacancies on the Board of Directors, 1 vacancy on the Board Oversight Committee (formerly known as the Supervisory Committee) and the position of Auditor.

There are 3 candidates standing for the 3 vacancies on the Board of Directors.

There is 1 candidate for 1 vacancy on the Board Oversight Committee.

There is 1 candidate for the position of Auditor.

Michael McKenna, Joan Barker, Paddy Carpenter Nomination Committee

Annual Report & Accounts 2015

Motions to the Annual General Meeting 2015 1. STATUTORY RESERVE - ‘That this Annual General Meeting agrees that the sum of €302,580 be transferred from the appropriation account to the Statutory Reserve.’

2. DIVIDEND - ‘That this Annual General Meeting agrees that the sum of €919,108 be distributed to members by way of a dividend.’

3. COMMUNITY DEVELOPMENT FUND - ‘That this Annual General Meeting agrees that the sum of €90,774 be transferred from the appropriation account to the Community Development Fund.’

4. AFFILIATION FEE - ‘That this Annual General Meeting agrees that the sum of €2 be deducted from each adult members’ share account by way of an Affiliation Fee.’ 5. ADOPTION OF STANDARD RULES FOR CREDIT UNIONS - ‘That this Annual General Meeting agrees to adopt the Standard Rules for Credit Unions, registered under the Credit Union Act 1997 (as amended) and affiliated to the Irish League of Credit Unions.

Upon adoption of these rules, the board of directors shall consist of 11 members and the board oversight committee, shall consist of 5 members.

Agenda 1.

Early Raffle at 8.00 p.m. sharp

2.

Ascertainment that a quorum is present

3.

Adoption of Standing Orders

4.

Reading and approval of minutes

5.

Report of the Board of Directors

6.

Finance Report

7.

Report of the Auditor

8.

Appointment of Tellers

9.

Report of the Nomination Committee

10. Balloting 11. Report of the Board Oversight Committee 12. Year in review 13. Community Development Report 14. Announcement of Election Results 15. Any other business 16. Adjournment of meeting 17. Prize Draw 18. Refreshments

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Directors Report Review of Business and Future Developments The Directors are pleased to report a strong surplus for the year, with a significant growth in loan volumes as the year progressed. We also note an improvement in member’s ability to maintain their loans within terms; all of which have contributed to a very satisfactory result for the year. This has allowed us to build our reserves in the current year.

We expect that trading in the coming year will be solid and very much dependent on the health of our local economy; we expect continued loan growth, coupled with the new mortgage switcher product to help boost our income. However; the income on our investments has been cut massively in this low interest environment; and would expect our overall income to continue a downward trend over the next couple of years. Every effort will continue to be made to control costs but continue to maintain the high level of service that our members are used to during difficult economic times.

We are happy that the finances of Member First Credit Union are in very good shape, that our loans are well provisioned, our investments prudently invested, that we are well capitalised with strong reserves and that we are well able to fund our future plans.

â‚Ź159m in assets

â‚Ź21m

of a reserve base

0.75% dividend to members

Principal risks and uncertainties The principal risks and uncertainties facing the credit union are: (i) Credit Risk The Directors identify that the greatest risk to the credit union is the possibility of loan default.

This risk is managed based on the continuous update and improvement of lending procedures; including the continued training of all relevant personnel within the organisation. (ii) Liquidity Risk This explains the risk of the credit union not having enough cash available to manage the day to day running of the organisation; and repay members savings/repay loans on demand.

Member First Credit Union has always maintained a liquidity level over and above the regulatory recommended liquidity. Particularly; in the environment of low interest rates our investments are predominantly short term with the effect of boosting our current liquidity levels.

Annual Report & Accounts 2015

(iii) Lack Of Demand for Loans This describes the risk of a reduced demand for loans amongst our members. Member First Credit Union encourages lending by means of the provision of a wide range of lending products provided in response to regular marketing activities throughout the year. (iv) Investment Portfolio Performance This refers to the risk to the loss of capital or insufficient return on investment of Member First Credit Unions significant Investment portfolio. The Investment Committee works closely in tandem with our independent advisors, Davy. Funds are carefully invested in compliance with the credit unions policy and regulatory guidance. (v) Operational Risk This is the risk of loss arising as a result of inadequate internal processes, people or systems.

Member First Credit Union maintains a very high calibre of suitably qualified staff and management who ensure the appropriate processes are in place to deal with the changing environment that we find ourselves in. This is further supported by a robust reporting structure and active management of operational risk events.

Post balance sheet events There were no events after the balance sheet date which impact upon the financial statements Auditors In accordance with the Credit Union Act 1997 (as amended), the auditors MKO Partners offer themselves for re-election.

Finally, the board of directors would like to pay tribute to and acknowledge the hard work of our former colleagues Irene Beare, Willie Mc Cormack and Noel Cunningham for their service to the Credit Union over the years.

On behalf of the Board John Matthews Chairperson

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Annual Report & Accounts 2015

Directors, Committee Members, Staff and Other Information REGISTERED OFFICE Artane Roundabout Malahide Road Dublin 5

AUDIT COMMITTEE Valerie Mulvaney Bridget Johnston John Matthews

DIRECTORS John Matthews (Chairperson) Joan Barker (Vice-Chari CUA CUDAS Bridget Johnston (Secretary) CUA Michael McKenna CUA CUDAS Catherine Bannon QFA CUA Pascal Delahunty Donal Boyle CUG CUDAS Valerie Muvaney CUG CUDAS Paddy Carpenter ACCUP/CUG

REMUNERATION COMMITTEE Catherine Bannon Joan Barker John Matthews

BOARD OVERSIGHT COMMITTEE Jeff Kennedy CUA George Mongey CUG Helen Walker CUG CUDAS RISK MANAGEMENT COMMITTEE Michael McKenna Catherine Bannon Pascal Delahunty Paul Morgan Fiona Cunningham John Phillips NOMINATION COMMITTEE Joan Barker Michael McKenna Paddy Carpenter

CREDIT COMMITTEE Dawn Lindsay Jennifer Kavanagh Bridget Johnston Joan Barker Marie O’Toole Grace Dunne Hazel Tierney CREDIT CONTROL COMMITTEE Ann Hogan Niamh Lamon Bray Pascal Delahunty Stephanie Wilson MEMBERSHIP COMMITTEE Kay Byrne Ann Kinsella Joseph Fletcher Marie O Donoghue Jennie Sommers Rosanna Del Rio

COMMUNITY COMMITTEE (MFCU Artane & MFCU Northside) Donal Boyle Ann Fox Dalton Marie Rose Dignam Veronica Kelly Ray Kiernan Sheila King Ann Kinsella Natasha Kinsella Triona McGregor Michele Phelan Phil Sheehan Jennie Somers Billy Beare COMMUNITY COMMITTEE (MFCU Swords) Joan Barker Kay Byrne Eddie Conroy Grace Dunne Joseph Fletcher Dave Gleeson Brain Lally Stephen McCarthy Peter McEntyre Richard Murphy Marie O’Donoghue Marie O’Toole AUDITOR MKO Partners, 6 The Courtyard Building, Carmanhall Road, Sandyford, Dublin 18

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Meet Our Member Services Team Better Member Service Member First Credit Union want to ensure that we continue to meet the needs of our members going forward. We take on board all feedback and inputs from you our members and hope to implement and change the way we do things in the future.

All staff are committed to achieve our 3 P’s when dealing with our members;

• Personal Touch • Positive Experience • Professional Service

Management Team Fiona Cunningham (CEO) QFA, CUA John Phillips (Branch Manager) BSc, QFA Carol Boon (Branch Manager) BSc, QFA Trisha Bulman (Branch Manager) CUA Darren O’Reilly (Business Development Manager) BFS MIATI Sinead Murphy (Financial Controller) FCCA Jacqueline Griffin (Business Support & Control Manager) Paul Morgan (Risk Management Officer) Artane Branch John Phillips (Branch Manager) BSc, QFA Sinead Murphy (Financial Controller) FCCA Michelle Brady ADCUP, ACCUP Alanna Brougham ACCUP, CUG Karen Earley CUA, CUC Garrett Ffrench BBs, QFA Marie Kane QFA, CUA Jennifer Kavanagh QFA, CUA Rachel Killeen ADCUP, ACCUP Niamh Lamon Bray CUA, ADCUP Fiona Nolan CUA Elaine Stanley ACCUP

Northside Branch Carol Boon (Branch Manager) BSc, QFA Gordon Blackmore ACCUP Gillian Coady CUA Dawn Lindsay QFA, CUA Louise Murphy QFA Lindsey Murray QFA, CUA Karen O’Connor CUA Sinead O’Leary CUA Carol O’Reilly ADCUP, ACCUP Stephanie Wilson CUA Michelle Yeates CUA Debbie Murray CUA Catherine Fennell ADCUP, ACCUP Swords Branch Jacqueline Griffin (Business Support & Control Manager) Trisha Bulman (Branch Manager) CUA Hazel Tierney QFA, ACCUP Siobhan Brady Maria Cantwell ACCUP Karen Croghan ACCUP Rosanna Del Rio QFA, CUA Pauline Doherty QFA, CUA Jean Gavin Ann Hogan CUA Brenda Nolan Anita Tynan CUA Niamh Warren

Get Connected with Member First We are always looking for new members to join in the conversation, so please feel free to find us online, follow, tweet and like to your hearts content!

1,900 New Likes

3,000 Online Competition Enteries

30,507

419,416

Engaged Users

Total Reach

100%

14,674

Response Rate

Talking About on Facebook

631 New Followers

88,379 Seen our tweets

2,032 Followers

26 Live Twitter Chats

5

New Social Channels for 2015

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Year in Review The year under review has been a momentous one for Member First Credit Union. Following on from our successful last year the board, management and staff have continued on a programme of continuous improvement and development of Member First Credit Union.

A review of the financial and operations points to very strong delivery of services and financial results.

Financials 2015 was another successful year with strong financial results achieved in a challenging marketplace.

Income declined due to a combination of a reduced yield on investments and a modest decrease in the loan book. However there has been a sharp increase in new lending and this points to an increase in the loan book for the first time since 2006. However despite an anticipated reduction in income, continuing robust management of costs and a strong focus on maximising income opportunities where possible whilst ensuring stability and security of our finances, ensured that Member First managed to deliver another set of strong financial results. The key highlights are as follows:

• • • • • • • •

The Credit Union remains financially strong – €159m in total assets Net income of €3,025,798 Investments are secure with a well-diversified portfolio Bad debts written-off reduced by 23% to €819,119 Bad debt provisions stands at €6,091,989 Capital and Reserves increased by 9% to €144,263,677 Significant improvements in the areas of risk and compliance across the business The Board is in a position to propose a dividend of .75%

Operations Information Desks I am pleased to say that in early 2015, we introduced an Information Desk to each branch of Member First. There has been a very positive response to the facility from members. Privacy levels have been improved in each branch and we have also updated the functionality of the website which has made it easier to manage the process of members doing business on-line.

With all of the change that has occurred and continues to occur in Member First, we can at times take for granted the ‘day-to-day’ business that defines what we actually do as a Credit Union.

I would like to draw your attention to some of the activities delivered, during the year:

• •

Processed 11,534 loan applications in the year with 91% (€25m) approved Processed over 1,600,000 transactions on behalf of members

Although not exhaustive, this reflects the types of service delivered on a daily basis and great credit must go to the staff of the Credit Union who continue to provide such a great service to the members.

Policies, Procedures, Governance, Human Resources During the year Member First delivered at a high level in all of these areas and also delivered a very ambitious program of business process re-engineering and IT enhancements to further develop its capabilities to support the new legislative and regulatory requirements.

Annual Report & Accounts 2015

‘PRISM’ is the framework under which the Central Bank of Ireland examines risk within the Credit Union sector. In June, 2015 the Central Bank’s Prudential Supervisors visited Member First Credit Union and met with management and directors to conduct a PRISM engagement. I am pleased to report that no material issues were identified and we continue to maintain a very constructive working relationship with our regulator.

Information Technology We continually strive to improve the IT security environment in Member First. This year we successfully retained the ISO 27001 accreditation which included a full disaster recovery and business continuity test.

AML Member First Credit Union, like all financial institutions, is required under the Criminal Justice Act 2010 to hold up to date proof of identity and proof of address for all members no matter how long you have been a member. In line with this, MFCU have enhanced our process for various interactions where members will be required to submit up to date documentation where it has previously expired.

Over the coming months, you will be required to submit up to date documentation e.g. Photo ID, Proof of Address or Proof of PPSN. Thank you in advance for your cooperation.

Death Benefit Insurance The Board has taken a decision to provide Death Benefit Insurance in the amount of €1,000 to members free of charge effective as of the 1st of October 2015, for one year only. You must have at least €250 in your shares and be over the age of eighteen to qualify.

The Credit Union will not be in a position to continue to absorb the increasing and prohibitive costs of providing this benefit in the future (This will not impact on your Life Savings and Loan Protection insurance which is still provided at no extra cost to the member). If as a member you would like the option of continuing to avail of Death Benefit Insurance, and pay the premium for same, we are happy to explore costs with our insurance provider on your behalf. In this respect, can I please ask that you advise us if you wish to continue to avail of Death Benefit Insurance. Should you have any questions on this matter, please feel free to contact any member of staff.

Acknowledgements Member First continues to be a strong, stable, efficient, well-governed, well-managed and transparent Credit Union, meeting the everyday financial needs of its members, thereby retaining member trust and confidence. I am very proud of the commitment of our Management Team and Staff. I am deeply grateful for their continued dedication and relentless hard work, assisting our members in achieving their financial goals. I also want to express my deepest gratitude to the Board and volunteers for their continuing support and contribution to our continued success.

I want to thank all of our members for their continued loyalty and unwavering support over the last few years at a time of significant personal challenge.

Fiona Cunningham Chief Executive Officer 22nd October 2015

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Statement of Directors’ Responsibilities FOR THE YEAR ENDED 30 SEPTEMBER 2015 The following statement, which should be read in conjunction with the statement of auditors’ responsibilities included in the report to the auditors, is made with a view to distinguishing for the members, the respective responsibilities of the Directors and of the auditors in relation to the financial statements.

The Credit Union Act 1997 requires the Directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the credit union and of 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.

Prepare the financial statements on a going concern basis unless it is inappropriate to presume that the credit union will continue in business.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the credit union and which enables them to ensure that the financial statements comply with the Credit Union Act 1997. They are also responsible for safeguarding the assets of the credit union and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

On behalf of the Board of Directors Joan Barker Vice Chairperson 22nd October 2015

Annual Report & Accounts 2015

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Report of the Auditor to the Members FOR THE YEAR ENDED 30TH SEPTEMBER 2015 We have audited the financial statements of Member First Credit Union Limited for the year ended 30 September 2015 which comprise the Income and Expenditure Account, the Balance Sheet, the Cash Flow Statement and the related notes. The financial reporting framework that has been applied in their preparation is Irish law and accounting standards issued by the Financial Reporting Council and promulgated by the Institute of Chartered Accountants in Ireland (Generally Accepted Accounting Practice in Ireland).

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 auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Credit Union and the Credit Union’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements In our opinion the financial statements: • give a true and fair view of the state of the Credit Union’s affairs as at 30 September 2015 and of its income and expenditure for the year then ended; • have been prepared in accordance with Generally Accepted Accounting Practice in Ireland; and • have been properly prepared so as to conform with the requirements of the Credit Union Act 1997 (as amended).

Other matters prescribed by the Credit Union Act 1997 (as amended) • We have obtained all the information and explanations which we consider 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 account records.

• In our opinion the information given in the directors’ report is consistent with the financial statements.

Other matters • The financial statements of the prior period were audited by a predecessor auditor who issued an unqualified audit opinion on 28 October 2014.

MKO Partners Chartered Accountants and Statutory Audit Firm, Dublin 22nd October 2015

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Report of the Board Oversight Committee The role of the Board Oversight Committee is to oversee the Board of Directors in the performance of their duties and to ensure that the Board has acted in accordance with Part 1V and 1VA of the Credit Union act 1997 (as amended).

This is a welcome opportunity for us, the committee members; to relate that we work on behalf of all members to ensure that your interests are looked after. Specifically for this reason, we are independent and separate from the Board.

Oversight of the directors: One or more Board Oversight Committee member was present at all board meetings. We also attended various sub-committee meetings throughout the year. Part of our remit is to assess the Board 4 times a year. At the start of the year we set out a plan to ensure we covered all aspects required by the Central Bank to ensure good governance by the board.

Strategy: The Board have just completed their strategic plan for the next three years which is central to the growth and strengthening of your Credit Union into the future.

Importance of training: We can report that all members of the Board Oversight Committee have attended various recommended training courses to enhance their skills.

2015 has continued to be a challenging year and we the Board Oversight members have continued to work with the board of directors, management and operations staff at Member First to ensure its success. We would like to take this opportunity to thank the members of the Board and the manager and staff for their help and co-operation and we look forward to continuing and strengthening good relationships, while protecting members’ interests, throughout our term of office.

Board Oversight Committee Helen Walker Chairperson

Annual Report & Accounts 2015

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Income and Expenditure Account FOR THE YEAR ENDED 30TH SEPTEMBER 2015 2015 INCOME Interest on Members' Loans Members’ Deposit and Other Interest, Expense and Similar Charges Investment and Similar Income (Schedule 1) Other Income (Schedule 2)

2014

€

€

4,995,131

5,229,330

(48,476)

(103,945)

2,115,240

2,701,879

80,806

299,819

7,142,701

8,127,083

Salaries

1,738,277

1,579,973

Other Management Expenses (Schedule 3)

2,539,165

2,390,050

276,494

5,255,602

8,984

156,319

(446,017)

(444,475)

Total Expenditure

4,116,903

8,937,469

EXCESS OF INCOME OVER EXPENDITURE FOR YEAR

3,025,798

(810,386)

Less: Dividend Paid

(1,101,953)

(892,941)

Total Income EXPENDITURE

Depreciation and Impairment Provisions (Schedule 4) Non Recurring Project Member Costs Bad Debts (Schedule 5)

Add: Distributable Revenue Reserves as at 1 October

3,548,419

5,978,047

5,472,264

4,274,720

(302,580)

(570,791)

(90,774)

(171,238)

-

15,728

5,078,910

3,548,419

Movements in Reserves Transfer to Statutory Reserve (Note 4) Transfer to Community Development Reserve Transfer from distributable income reserve (Note 5) DISTRIBUTABLE REVENUE RESERVE AS AT 30 SEPTEMBER 2015

The credit union has no recognised gains or losses other than the results for the two financial years.

The results have been calculated on a historical cost basis. The credit unions income and expenditure all relate to continuing operations.

Joan Barker Vice Chairperson 22nd October 2015

Helen Walker Board Oversight Committee

Fiona Cunningham Chief Executive Officer

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Balance Sheet FOR THE YEAR ENDED 30TH SEPTEMBER 2015 2015 ASSETS Cash and Balances at Bank Deposits & Investments (Note 2)

2014

€

€

5,978,818

5,146,253

106,781,405

97,516,301

Loans to Members

49,064,965

50,326,740

Less: Provision for Doubtful Debts (Sch. 5)

(6,091,989)

42,972,976 (6,911,109)

Tangible Fixed Assets (Note 3) Debtors, Prepayments and Accrued Income Total Assets

43,415,631

2,687,377

2,862,886

853,674

1,137,797

159,274,250

150,078,868

14,497,501

16,922,987

LIABILITIES Members' Deposits Other liabilities, creditors and accruals (Note 16)

513,072

1,081,149

15,010,573

18,004,136

144,263,677

132,074,732

Members Shares (Note 15)

122,567,831

112,169,388

Statutory Reserve (Note 4)

16,457,041

16,154,461

Total Liabilities Total Assets less Total Liabilities

MEMBERS’ RESOURCES

Other Reserves (Note 5) Total Members Resources

5,238,805

3,750,883

144,263,677

132,074,732

Signed on behalf of Member First Credit Union Limited Joan Barker Vice Chairperson 22nd October 2015

Helen Walker Board Oversight Committee

Fiona Cunningham Chief Executive Officer

Annual Report & Accounts 2015

17

Cash Flow Statement FOR THE YEAR ENDED 30TH SEPTEMBER 2015 2015

2014

€

€

102,662,554

91,772,823

Members' Shares

43,578,146

39,961,980

Members' Deposits

12,782,255

19,559,499

Members' Loans Repaid

23,758,469

26,484,604

Members' Loan Interest Received

5,909,906

5,244,769

Investment Interest Received

2,115,240

2,717,607

446,017

444,475

80,806

299,819

88,670,839

94,712,753

Members' Shares Withdrawn

33,621,076

35,682,249

Members' Deposits Withdrawn

14,058,359

21,190,130

Members' Loans Granted

25,095,952

20,936,386

Opening Cash and Investments

Receipts

Bad Debts Recovered Other Receipts Total

Disbursements

Interest Paid

48,476

103,945

Dividends Paid

1,101,953

892,941

Operating Expenses

4,546,370

4,835,651

100,984

181,719

78,573,170

83,823,022

112,760,223

102,662,554

5,978,818

5,146,253

106,781,405

97,516,301

112,760,223

102,662,554

Fixed Assets Purchased Total

CLOSING CASH AND INVESTMENTS Comprising: Cash and Balances at Bank Deposits & Investments

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Notes to the Financial Statements FOR THE YEAR ENDED 30TH SEPTEMBER 2015 1. SIGNIFICANT ACCOUNTING POLICIES The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the financial statements.

1.1 Accounting Convention The financial statements are prepared under the historical cost convention.

1.2 Basis of Preparation The financial statements have been prepared in accordance with accounting standards generally accepted in Ireland and Irish statute comprising the Credit Union Act 1997; (as amended).

Accounting Standards generally accepted in Ireland in preparing financial statements giving a true and fair view are those issued by the Financial Reporting Council and promulgated by the Institute of Chartered Accountants in Ireland.

The financial statements have been prepared on the going concern basis which assumes that the credit union will continue in operational existence for the foreseeable future.

1.3 Legal & regulatory framework The Credit Union is registered with the Registry of Credit Unions and is regulated by the Central Bank of Ireland.

1.4 Income Recognition Income is recognised to the extent that it is probable that the economic benefits will flow to the Credit Union and the income can be reliably measured. The following criteria must also be met before loan interest income is recognised: Interest on Members’ Loans Interest on Members Loans is recognised when payment is received as specified in section 110 (1)(C)(i) of the Credit Union Act 1997,(as amended) (i.e. on a cash basis).

Investment Income Investment Income is recognised on an accruals basis.

Annual Report & Accounts 2015

Notes to the Financial Statements FOR THE YEAR ENDED 30TH SEPTEMBER 2015 (CONTINUED) 1.5 Tangible fixed assets and depreciation Tangible fixed assets, other than freehold land and buildings, are stated at their historic cost less depreciation.

Depreciation rates are as follows: Motor Vehicles Leasehold Premises (Northside) Lease Amortisation (Unit , Northside) Fixtures & Fittings Computer Equipment Freehold Properties

2015 20% per annum 10% per annum 4% per annum 10-25% per annum 25% per annum 2% per annum

2014 20% per annum 10% per annum 4% per annum 10-25% per annum 25% per annum 4.25% per annum

The Credit Union amended its accounting estimation technique in relation to freehold premises during the year whereby its premises are now depreciated at 2% per annum as opposed to 4.25% per annum in the prior period. This change in estimation technique results in a reduction in the premises depreciation charge of â‚Ź100,000 for the year ended 30th September 2015.

1.6 Impairment of Fixed Assets A review for impairment of fixed assets is carried out if events or changes in circumstances indicate that the net book value of the fixed asset may not be recoverable. Impairment reviews comprise a comparison of the net book value of the fixed asset with the recoverable amount (the higher of net realisable value and value in use). To the extent that the net book value exceeds the recoverable amount, the fixed asset is impaired and is written down. Any impaired loss is recognised in the income and expenditure account unless it arises on a previously revalued fixed asset.

1.7 Investments When the credit union invests in Investment products it does so with the intention of holding them until maturity. Investments are stated at cost less any permanent diminuition in value.

Bank Deposits and other short term deposits These are valued at the deposit amounts and interest income is recognised in the income statement on an accruals basis.

Term deposits Term deposits with fixed maturity dates are valued at the lower of cost and interest income is recognised in the Income Statement on an accruals basis.

Bank Bonds & Collective Investment Schemes Investments in bank bonds and collective investment schemes are stated at the lower of cost or market value but not lower than the capital guaranteed amount. Income is recognised in the income statement when it is received or irrevocably receivable.

19

20

Notes to the Financial Statements FOR THE YEAR ENDED 30TH SEPTEMBER 2015 (CONTINUED) 1.8 Pension Costs The credit union operates a defined contribution pension scheme for staff. There are no liabilities for pension benefits under the defined contribution pension scheme, other than contributions payable as a proportion of employees’ salaries in respect of each year.

1.9 Bad & Doubtful Debts Bad debts written off and bad debts recovered are included in the Income and Expenditure Account in the year in which they are written off/recovered. Specific provisions for doubtful debts are made against loan balances following the results of a loan book review at year end.

The loan book review includes the application of a loan provisioning model, Resolution 49, and a separate specific review of the loan book.

A general provision for bad and doubtful debts is recognised to account for bad and doubtful debts that have not been separately identified at the balance sheet date but are known to be present in any portfolio of loans. The level of general provision is determined using objective and subjective factors having regard to past experience, current economic and other factors affecting the business environment.

The Board have taken a prudent measure of provisioning fully for balances which are greater than 13 weeks in arrears, and utilising leading edge loan loss forecasting techniques to inform management & Board for both provision policy and for prioritising credit control activity.

As at year end a provision of €6,091,989 was included in the financial statements, as a % of the total exposure, net of attached shares, this bad debt provision is the equivalent of 27%.

2. DEPOSITS AND INVESTMENTS

Central Bank Deposits Accounts in Authorised Credit Institutions Bank Bonds Collective Investment Schemes

Bad Debt Provision

27% 2015

2015

2014

€

€

1,244,460

1,167,740

91,553,625

83,127,583

5,080,563

-

8,902,757

13,220,978

106,781,405

97,516,301

On Call

10,147,215

18,487,912

Less than 3 Months

24,504,020

6,938,700

More than 3 months, less than 1 year

15,119,000

23,392,824

More than 1 year

57,011,170

48,696,865

106,781,405

97,516,301

Annual Report & Accounts 2015

21

Notes to the Financial Statements FOR THE YEAR ENDED 30TH SEPTEMBER 2015 (CONTINUED) 3. TANGIBLE FIXED ASSETS Freehold Premises

Leasehold Premises

Office Equip

Motor Vehicles

Computer Equip

Total

9,075,582

949,269

898,942

-

1,323,438

12,247,231

0

0

55,297

14,000

31,687

100,984

9,075,582

949,269

954,239

14,000

1,355,125

12,348,215

6,825,582

636,650

763,883

-

1,158,229

9,384,344

Charge for year

84,393

63,252

58,838

1,867

68,144

276,494

At 30 Sept 2015

6,909,975

699,902

822,721

1,867

1,226,373

9,660,838

2,165,607

249,367

131,518

12,133

128,751

2,687,377

2,250,000

312,619

135,059

-

165,209

2,862,887

€

€

€

€

€

€

COST At 1 Oct 2014 Additions At 30 Sept 2015

DEPRECIATION & IMPAIRMENT At 1 Oct 2014

NET BOOK VALUE At 30 Sept 2015

NET BOOK VALUE At 30 Sept 2014

The directors commissioned freehold valuations dated 5th October 2015 from Flynn & Associates (MIAVI) estate agents.

These valuations indicate that there is no evidence of permanent impairment of the properties required in the current year.

Prior year comparatives have been amended to restate the historic cost of freehold premises following the prior year impairment.

22

Notes to the Financial Statements FOR THE YEAR ENDED 30TH SEPTEMBER 2015 (CONTINUED) 4. STATUTORY RESERVES The transfer to statutory reserve is calculated in accordance with Section 45 of the Credit Union Act 1997 (as amended) (Standard Rule 54 for Credit Unions)

Statutory Reserves Statutory Reserve

Opening Balance 01-Oct-14

Net Movement For the Year

Disbursements from fund For the Year

Closing Balance 30-Sep-15

€

€

€

€

16,154,461

302,580

-

16,457,041

Opening Balance 01-Oct-14

Net Movement For the Year

Disbursements from fund For the Year

Closing Balance 30-Sep-15

€

€

€

€

201,096

90,774

(133,343)

158,527

3,548,419

1,530,491

-

5,078,910

1,368

-

-

1,368

3,750,883

1,621,265

(133,343)

5,238,805

5. OTHER RESERVES

Other Realised Reserves Community Development Reserve Undistributed Surplus Undistributed Income Reserve

Total Other Realised Reserves

Throughout the year €133k was disbursed from the Community Development Reserve Fund.

Annual Report & Accounts 2015

23

Notes to the Financial Statements FOR THE YEAR ENDED 30TH SEPTEMBER 2015 (CONTINUED) 6. PROPOSED DIVIDENDS The Directors recommend the following distributions: 2015

2014

Rate %

€

Rate %

€

0.75

919,108

1.00

1,101,953

Dividend on Shares - Gross

The proposed dividend for 2015 is not reflected in the accounts for 2015 in accordance with Financial Reporting Standard 21, as proposed dividends are not considered a liability until they are approved by the members at the AGM. 7. RELATED PARTIES At the year-end outstanding loans to directors and key management amount to €53,524.

8. INSURANCE AGAINST FRAUD The Credit Union has insurance in the amount of €2,000,000 in compliance with section 47 of the Credit Union Act, 1997 (as amended). Member’s shares and deposits are covered under the Government savings protection scheme.

9. PENSIONS The credit union operates two defined contribution pension schemes, the assets of which are held separately from those of the credit union in an independently administered fund. There was a balance of Nil (2013 - Nil) due to the pension company at the year end. The cost to the credit union of pension contributions during the year was €82,223 (2014 - €71,421).

10. CAPITAL COMMITMENTS The credit union has no capital commitments at the year end.

11. RATES OF INTEREST CHARGED ON MEMBERS’ LOANS Listed below are the rates of interest for new loans granted by Member First Credit Union Interest Rate of Interest Charged on Standard loans Rate of Interest Charged on Car loans Rate of Interest Charged on Secured loans Rate of Interest Charged on Student loans

Rate 10.99% 9.99% 5.99% 7.99%

APR 11.56% 10.46% 6.16% 8.28%

24

Notes to the Financial Statements FOR THE YEAR ENDED 30TH SEPTEMBER 2015 (CONTINUED)

12. POST BALANCE SHEET EVENTS There are no post balance sheet events that require disclosure under FRS 21.

13. CONTINGENT LIABILITIES No contingent liabilities existed as at 30 September 2015.

14. OPERATING COMMITMENTS The following operating lease commitments were held by Member First Credit Union

Within 12 Months 1 – 5 Years Greater than 5 Years

2015

2014

€

€

13,971

18,627

3,616

13,790

17,587

32,417

2015

2014

€

€

Regular Share Accounts

98,858,543

92,504,783

Special Share Accounts

23,596,799

19,485,422

Dormant Accounts

20,151

20,151

Medium Term Share Accounts

91,423

118,117

915

40,915

122,567,831

112,169,388

15. MEMBERS’ SHARES

Long Term Share Accounts

Annual Report & Accounts 2015

25

Notes to the Financial Statements FOR THE YEAR ENDED 30TH SEPTEMBER 2015 (CONTINUED)

16. OTHER LIABILITIES, CREDITORS AND ACCRUALS 2015

DIRT PAYE/PRSI Trade Creditors Car Draw Other Creditors & Accruals

2014

€

€

5,972

6,828

38,389

47,730

104,122

191,033

47,201

220,225

317,388

615,333

513,072

1,081,149

17. PROVISIONS OF NON AUDIT SERVICES BY AUDITORS In common with many other entities of our size and nature, from time to time, our auditors provide us with advisory and consulting services.

18. RATES OF INTEREST PAID ON MEMBERS DEPOSITS The credit union reviews the interest rates it applies to its deposit accounts regularly. We offer our members a number of deposit options and listed below are the applicable rates.

CU Cash Accounts 0.00% Christmas Saver Accounts 0.00% Fixed Term Deposit Accounts 0.50%

19. APPROVAL OF FINANCIAL STATEMENTS The financial statements were approved by the Board and authorised for issue on 22nd October 2015 and signed on behalf of the Board by Joan Barker, Vice Chairperson, Helen Walker, Board Oversight Committee, and Fiona Cunningham, Chief Executive Officer.

26

Directors Report & Audited Financial Statements FOR THE YEAR ENDED 30TH SEPTEMBER 2015

SCHEDULE 1 - INVESTMENT AND SIMILIAR INCOME 2015

2014

€

€

Investment and Similar Income

2,115,240

2,701,879

Total per Income and Expenditure Account

2,115,240

2,701,879

2015

2014

SCHEDULE 2 - OTHER INCOME

€

€

Insurance Commission

13,216

25,380

Foreign Exchange Income

20,485

12,786

Merger Funding

-

200,000

Rent Receivable

30,000

30,000

Legal Fees recovered

16,085

31,286

1,020

367

80,806

299,819

New Member Fees Total per Income and Expenditure Account

Annual Report & Accounts 2015

27

SCHEDULE 3 - OTHER MANAGEMENT EXPENSES 2015

2014

€

€

LP/LS Insurance

724,310

660,147

Death Benefit Insurance

141,304

140,865

Rent, Rates & Service Charges

202,724

205,298

Printing and Stationery

39,882

67,145

Conventions, Meetings & Seminars

16,521

49,636

Education & Training

26,624

21,952

General Insurances

45,311

48,907

Repairs & Maintenance

104,318

87,920

Computer & Equipment Maintenance

178,378

170,150

10,793

16,386

102,300

90,175

Audit & Accountancy

71,024

67,440

AGM Expenses

64,310

54,722

Security

66,241

47,351

Travel/Subsistence Expenses

16,053

7,494

CCC Legal fees

60,305

64,020

134,349

169,478

59,937

79,823

101,061

100,098

ISO Costs Postage and Telephone

Legal & Consultancy Fees Light & Heat Registration Fees Uniforms & Staff Development

11,879

9,663

Bank Interest & Charges

59,498

118,425

CUDA Funding Levy

14,478

28,984

1,652

5,740

Shorts & Overs REBO Levy

208,161

-

Sundry Expenses

35,437

53,864

Advertising & Promotions

42,315

24,367

2,539,165

2,390,050

Total per Income and Expenditure Account

28

SCHEDULE 4 - DEPRECIATION AND IMPAIRMENT PROVISIONS 2015

Depreciation provision Impairment provision

2014

€

€

276,493

399,707

-

4,855,895

276,493

5,255,602

2015

2014

SCHEDULE 5 - BAD DEBTS

Bad debts recovered Bad debts written off

€

€

(446,017)

(444,475)

819,119

1,057,105

Bad debt provision movement

(819,119)

(1,057,105)

Total per Income and Expenditure Account

(446,017)

(444,475)

6,091,989

6,911,109

Balance Sheet Provision Bad debt provision

A YEAR OF GROWTH

0.75% DIVIDEND PAID

MEMBERS SAVINGS €136 MILLION

OPERATING SURPLUS €3.025 MILLION

1.6 MILLION TRANSACTIONS

€27,000 ISSUED TO LOCAL PRIMARY SCHOOLS

€14,000 AWARDED IN EDUCATION BURSARIES

3 NEW SCHOOLS IN OUR SCHOOL SAVING SCHEME BRINGING TOTAL TO 30

LAUNCHED OUR SECONDARY SCHOOLS PROGRAMME CU@SCHOOL

500 CHILDREN TOOK PART IN OUR CREDIT UNION GAA CUP AND SCHOOL QUIZZES

120 LADIES TOOK PART IN OUR LADIES QUIZ

€25 MILLION ISSUED IN LOANS

2,039 NEW MEMBERS JOINED

€133,000 ISSUED TO LOCAL COMMUNITY PROJECTS

OVER 70 LOCAL GROUPS, CLUBS & ORGANIZATIONS SUPPORTED

€22,000 RAISED FOR OUR CHARITY OF THE YEAR ‘MY CANINE COMPANION’

2 DEFIBRILLATORS DONATED TO THE COMMUNITY BRINGING THE TOTAL TO 19

12 MONTHLY RADIO SHOWS ON NEAR 90.3 FM OFFERING FINANCIAL ADVICE TO THE COMMUNITY

2,766 CHILDREN TOOK PART IN OUR SCHOOL SAVINGS SCHEME

ONWARDS & UPWARDS IN 2016

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Member First Credit Union Limited is Regulated by the Central Bank of Ireland.