Annual Report 2013

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note to the accounts 19. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued) Capital in the Credit Union is made up as follows: Tier 1 Capital reserve 87,482 77,442 General reserve 941,918 941,918 Retained earnings 18,538,916 17,961,754 Less prescribed deductions (875,466) (605,032) Net common equity tier 1 capital 18,692,850 18,376,082 Tier 2 Reserve for credit losses 400,000 400,000 Less prescribed deductions - (232,919) Net tier 2 capital 400,000 167,081 Total Capital 19,092,850 18,543,163 Risk Weighted Assets 84,473,050 83,354,546 Capital % 22.60% 22.25% The Credit Union is required to maintain a minimum capital level of 8% (2012: 8%) as compared to the risk weighted assets at any given time. The capital ratio as at the end of the financial year over the past 5 years is as follows: 2013 $ 2012 $ 2013 2012 2011 2010 2009 22.60% 22.25% 21.84% 20.17% 22.48% The level of capital ratio can be affected by growth in asset relative to growth in reserves and by changes in the mix of assets. To manage the Credit Union’s capital the Credit Union reviews the ratio monthly and monitors major movements in the asset levels. Policies have been implemented to require reporting to the Board and the regulator if the capital ratio falls below 13%. During the period the Credit Union complied with externally imposed capital requirements. Further a 5 year capital budget projection of the capital levels is maintained annually to address how strategic decisions or trends may impact on the capital level. Pillar 2 Capital on Operational Risk This capital component was introduced as from the 1 January 2008 and coincided with changes in the asset risk weightings for specified loans and liquid investments. Previously no operational charge was prescribed. The Credit Union uses the Standardised Approach which is considered to be most suitable for its business given the small number of distinct transaction streams. The Operational Risk Capital Requirement is calculated by mapping the Credit Union’s three year average net interest income and net non-interest income to the Credit Union’s various business lines. Based on this approach, the Credit Union’s operational risk requirement is as follows: • Operational Risk Capital $ 9,491,246 It is considered that the Standardised Approach accurately reflects the Credit Union’s operational risk other than for the specific items set out below. Internal capital adequacy management The Credit Union manages its internal capital levels for both current and future activities through a combination of the various committees. The outputs of the individual committees are reviewed by the Board in its capacity as the primary governing body. The capital required for any change in the Credit Union’s forecasts for asset growth, or unforeseen circumstances, are assessed by the Board. The finance department then update the forecast capital resources models produced and the impact upon the overall capital position of the Credit Union is reassessed. 42 Intech Credit Union Ltd Annual Report 2013
note to the accounts 20. MATURITY PROFILE OF FINANCIAL ASSETS AND LIABILITIES Within 30 days 30-90 days 90-365 days 1–5 years After 5 years No Maturity 2013 $ $ $ $ $ $ $ ASSETS Cash 3,736,463 - - - - - 3,736,463 Available for sale investments - - - - - 465,838 465,838 Receivables 346,197 - - - - - 346,197 Prepayments - - - - - 187,124* 187,124 Property, plant & equipment - - - - - 310,671 310,671 Taxation assets - - - - - 301,680 301,680 Intangible assets - - - - - 107,949 107,949 Advances to other financial institutions 3,982,520 17,983,372 3,000,000 600,000 - - 25,565,892 Loans and advances 9,452,435 704,481 8,049,704 47,707,667 91,298,818 - 157,213,105 Total Financial Assets 17,517,615 18,687,853 11,049,704 48,307,667 91,298,818 1,373,262 188,234,919 LIABILITIES Taxation liabilities - - 165,920 - - - 165,920 Deposits from other institutions 7,250,000 14,500,000 1,500,000 - - - 23,250,000 Provisions - - - - - 270,510* 270,510 Creditors 2,522,132 - - - - - 2,522,132 Deposits from members – at call 76,042,784 - - - - - 76,042,784 Deposits from members – term 7,916,705 27,396,710 28,090,560 2,611,282 - - 66,015,257 Total Financial Liabilities 93,731,621 41,896,710 29,756,480 2,611,282 - 270,510 168,266,603 2012 ASSETS Cash 3,016,634 - - - - - 3,016,634 Available for sale investments - - - - - 465,869 465,869 Receivables 990,091 - - - - - 990,091 Prepayments - - - - - 130,621* 130,621 Property, plant & equipment - - - - - 513,223 513,223 Taxation assets - - - - - 275,888 275,888 Intangible assets - - - - - 217,644 217,644 Advances to other financial institutions 9,800,050 10,949,253 5,000,000 600,000 - - 26,349,303 Loans and advances 17,528,550 5,211 3,351,846 27,018,713 98,054,123 - 145,958,443 Total Financial Assets 31,335,325 10,954,464 8,351,846 27,618,713 98,054,123 1,603,245 177,917,716 Total Intech Credit Union Ltd Annual Report 2013 43
Page 1: Annual Report 2013
Page 4 and 5: Key Statistics Financial Performanc
Page 6 and 7: Chairman’s Report 2013 Remunerati
Page 8 and 9: Corporate governance Disclosures Bo
Page 10 and 11: directors’ report DIRECTORS’ BE
Page 12 and 13: directors’ report Director Rodney
Page 14 and 15: independent auditor’s report 12 I
Page 16 and 17: DIRECTORS’ DECLARATION In the opi
Page 18 and 19: Statement of changes in equity FOR
Page 20 and 21: Statement of cash flows For The Yea
Page 22 and 23: note to the accounts 1. Statement O
Page 28 and 29: note to the accounts 6. RECEIVABLES
Page 30 and 31: note to the accounts 8. PROVISION O
Page 32 and 33: note to the accounts 8. PROVISION O
Page 34 and 35: note to the accounts 11. TAXATION A
Page 36 and 37: note to the accounts 16. TAXATION L
Page 38 and 39: note to the accounts 19. FINANCIAL
Page 46 and 47: note to the accounts Within 30 days
Page 48 and 49: note to the accounts FINANCIAL LIAB
Page 50 and 51: note to the accounts 24. StanDBY BO
Page 52 and 53: note to the accounts 27. ECONOMIC D
Page 54: 31. CORPORATE INFormation The Credi

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