2015 Annual Report - Shell Employees` Credit Union

ANNUAL REPORT
Getting there, Together
2015
Calgary Staff
Standing in back, from left to right:
Elizabeth Snowball-Beggs, Bruce Wilson, Darryl Hovanak, Kristina Kemp, John Knight, Cindy
Reid, Michele Poirier, Cynthia Solomon Imie, Vic Petersen, Elizabeth Spence-Noble, Shandy
Daby, Marie-Line Fleming, David Alexander
Sitting in front, from left to right:
Darcee Hurt, Dawn Konynenbelt, Badriea Taha, Nasim Khatibi, Trisha Herbert
Not in photo: Brandy Beveridge, Dennise Yambao & Irma Baysic
Scotford Staff
From left to right: Debbie Kwashuk, Dorothy Lowrie, Shelley Scott
Shell Employees’ Credit Union
2015 Annual Report
Table of Contents
Agenda……………………………………………………………………….…..………..Page 2
Previous Meeting Minutes……….……………………………....………………………Page 3
Report of the Board of Directors……………………………………..…….…………...Page 7
Report of the Audit Finance Committee……………………………………………….Page10
Report of the Credit Committee……………….……………….………………………Page 13
Audited Financial Statements……………….…..……………………………………..Page 15
1|Page
AGENDA
Shell Employees’ Credit Union
Annual General Meeting
March 9, 2016
1. Roll Call
2. Declaration of Quorum
3. Introductions

Board Members

Staff
4. Appointment of Scrutineers
5. Minutes of Last Meeting (p.3)
6. Report of Board of Directors (p.7)
7. Report of the Audit Finance Committee (p.10)
8. Report of the Credit Committee (p.13)
9. Report of the Nominating Committee
10. Auditor’s Report & Presentation of Financial Statements (p.15)
11. Bylaw Amendments

Proposed Changes to Existing Bylaw: Voting by Mail

Proposed Change to Existing Bylaw: Board of Directors
12. Compensation Disclosure Resolution
13. Greetings from Guests
14. Tribute to Margot Willison
15. Adjournment
2|Page
MINUTES
Shell Employees’ Credit Union
Annual General Meeting
March 12, 2015
Carriage House Inn
1. ROLL CALL
134 Members
Notes: 15 non-members and 12 board members
2. DECLARATION OF QUORUM
A quorum was declared and the meeting was called to order at 6:06 p.m. by Adam Battistessa.
3. INTRODUCTIONS
The President, Adam Battistessa welcomed all members and guests and introduced the Board of
Directors.
The General Manager, Badriea Taha introduced Credit Union staff and guests.
4. APPOINTMENT OF SCRUTINEERS
The following individuals volunteered to be scrutineers: Maria Farias & Keith Hughes
Motioned by Adam Battistessa, seconded by Liz Mah. Carried.
5. MINUTES OF LAST MEETING
Adam Battistessa moved that the Minutes of the Annual General Meeting of March 6, 2014
be accepted as presented. This was seconded by Sue Wells. Carried.
6. REPORT OF THE BOARD OF DIRECTORS
The President, Adam Battistessa highlighted the Board of Director’s report outlining growth
and income of the Credit Union. Adam Battistessa made the motion to accept the Report of the
Board of Directors; seconded by Debra Baranec. Carried.
7. REPORT OF THE AUDIT FINANCE COMMITTEE
Drew Harris, Chair of the Audit Finance Committee, presented the highlights of the
Report for the Audit Finance Committee. Drew Harris moved that the Report of the Audit
Finance Committee be accepted as presented, seconded by Guy Stuart. Carried.
3|Page
8. REPORT OF THE CREDIT COMMITTEE
Anthony Bessey, Chair of the Credit Committee, presented the Report of the
Credit Committee, highlighting the volume and dollar value of loans granted for 2014.
Anthony Bessey moved that the Report of the Credit Committee be accepted as presented,
seconded by Jennie Wolter. Carried.
9. REPORT OF THE NOMINATING COMMITTEE
Adam Battistessa announced that the following director terms were maturing:
Christine Ng
Duncan Carey
Nathan Turnbull
Sarah Russell Crow
Adam Battistessa announced the following members were nominated:
Nathan Turnbull
Colleen Lenahan
Zitin Lamba
Margot Willison
10. AUDITOR’S REPORT & PRESENTATION OF FINANCIAL STATEMENTS
Michael Epp, External Auditor, presented the Auditor’s Report, Balance Sheet, Income Statement,
and Operating Expenses for the Fiscal Year ending October 31, 2014.
Dawn Middleton moved that the Auditor’s Report and Financial Statements be accepted as
presented, seconded by Ada Adeleke-Kelani. Carried.
11. BYLAW AMENDMENTS
Rebecca Nadel presented the Bylaw amendments for approval.
Rebecca Nadel moved that the bylaw amendments be approved as presented, seconded by Ian
Dankert. Carried.
12. GREETINGS FROM GUESTS
Adam Battistessa introduced Wayne Fedorak, Manager of Regulation and Risk Management
at Credit Union Deposit Guarantee Corporation.
Adam Battistessa introduced Anne Gillespie, Chief Financial Officer at Alberta Central.
Adam Battistessa introduced Bob Reczka, Chief Executive Officer at Celero Solutions.
4|Page
13. STAFF SERVICE AWARDS
Dorothy Lowrie – 25 years
Bruce Wilson – 10 years
Lise Twiddy – 5 years
Kristina Kemp – 5 years
14. ADJOURNMENT
On a motion by Thora Budda and seconded by Guy Stuart the meeting was adjourned at 7:24
p.m.
15. DOOR PRIZE DRAWS
The following were winners of the door prizes:
Sponsor
Celero Solutions
Bow Valley Insurance
Alberta Central
CUMIS (the Cooperators)
CUMIS (the Cooperators)
Genworth Financial
Miller Thomson LLP
Choice rewards MasterCard
Prize
Wine kit set
Tassimo coffee machine
Wine kit set
Fire blanket
Notebook and pen set
Tote Bag, Cooler, & Golf Ball Set
Wine set
Fleece Blanket
Recipient
Brenda Corbett
David Hagopian
Bill Shortridge
Darlynn Yambao-Calalo
Tinaca Ho
Marvin Popil
Lorene Prichard
Alice Dietrich
Gibbons Law Office
Gibbons Law Office
Qtrade Investor
Concentra Financial
NEI Investments
Hawkings Epp Dumont LLP
CRI Canada
CRI Canada
Shell Employees' Credit Union
$50 CINEPLEX Gift Card
$50 Boston Pizza Gift Card
Nutcracker Sweets Gift basket
$50 Tim Horton's Gift Card
Tea Set
Vase
$50 Restaurant Gift Card
$50 Best Buy Gift Card
Flower arrangement
Ian Dankert
Lorna Komery
Lisa Marie Budda
Ivy Webb
Stan Dalidowicz
Laura Dyck
Dorothy O’Neill
Linda White
Dawn Middleton
Shell Employees' Credit Union
Shell Employees' Credit Union
Shell Employees' Credit Union
Shell Employees’ Credit Union
Shell Employees’ Credit Union
Credential Asset Management
Flower arrangement
Chocolate Gift Basket
Chocolate Gift Basket
$100 Restaurant Gift Certificate
$100 Restaurant Gift Certificate
Pen Set
Kim Leung
Jill Vandezande
Sheila Fairweather
Anne Hansen
Thora Budda
Paula Stroobant
5|Page
Credential Asset Management
Harrison Bowker
Golf Shirt
Brenda Wallace
$100 Keg Gift Certificate
Delores Habrun
Royal Canadian Mint Winners
Item
Recipient
2015 Uncirculated Coin Set
Ed Hoffman
2015 Uncirculated Coin Set
Anne Hanson
2015 Uncirculated Coin Set
Ian Dankert
2015 Uncirculated Coin Set
Randy Stroobant
2015 Uncirculated Coin Set
Nancy Low
2015 Uncirculated Coin Set
Marvin Popil
2015 Uncirculated Coin Set
Adekele Kelani
2015 Uncirculated Coin Set
Mackenzie Budda
2015 Uncirculated Coin Set
Debbie Sobb
2015 Uncirculated Coin Set
Carol Hagopian
2015 Uncirculated Coin Set
Audrey Shortridge
2015 Uncirculated Coin Set
Lionel Paul
2015 Uncirculated Coin Set
Dorothy O'Neill
2015 Uncirculated Coin Set
Laura Lea Bennett
2015 Uncirculated Coin Set
Murray Odeman
2015 Uncirculated Coin Set
Linda White
2015 Uncirculated Coin Set
Duncan Carey
2015 Commemorative Silver Coin
Jim Dalidowicz
2015 Commemorative Silver Coin
Steve McCauley
2015 Commemorative Silver Coin
Alice Dietrich
6|Page
Board of Directors’ Report
Fiscal Year Ending Oct 31, 2015
Despite another year of low interest rates in the market and the Bank of Canada continuing to lower
overnight lending rates, the Shell Employees’ Credit Union (SECU) closed the year positively, showing
an overall profit of $554k before taxes and the return of a 3% dividend to its members ($161k).
The summarized year-over-year results were:
 Total Member Assets increased by 1.1% to $270M vs budget of $271M
 Deposits by Members increased by 1.2% to $252M vs budget of $254M
 Loans to Members decreased by 0.7% to $222M vs budget of $236M
 Membership decreased by 0.6% in 2015 to 6041 members vs budget of 6080
Summary of Growth - Millions
Assets
Deposits
Loans
$320
$270
$220
$170
$120
$70
Assets
Deposits
Loans
2011
$254.15
$238.97
$194.96
2012
$264.02
$248.16
$203.40
2013
$265.19
$248.54
$210.71
2014
$267.00
$248.53
$223.42
2015
$270.01
$251.96
$221.84
2016
$274.98
$256.86
$223.63
SECU continues to maintain a conservative business model due to the ongoing instability of the global
financial industry and extremely low interest rates. We continue to make sure that our business
strategies and activities are aligned and congruent with a low margin operation. The board continues
to provide overall governance, risk management and ongoing regulatory reviews to ensure that we are
well positioned to maintain robust, responsive, ongoing operations. “Earning the right to grow” by
7|Page
finding cost savings and more efficient processes without compromising our governance will continue
to be a strong corner stone to our business plan going forward.
The review of the ICAAP (Internal Capital Adequacy Assessment Process) requirements supporting a
strong capital growth program is one example of the oversight provided by your board.
On an inception-to-date basis, 201 members have contributed up to the maximum of $5000 into their
common share account, which accounts for almost $1.25M into the equity of SECU in only five years
and this improves our capital base, particularly when capital growth is expected by our regulator. SECU
equity to assets is 5.83%, which signals a strong capitalization given our risk profile and prudent loan
governance.
It has now been three years since we moved our Calgary office back to Shell Centre and we continue
to see the benefits of our proximity and increased visibility to Shell employees. Our efforts at
maintaining and fostering relationships with Shell focal points and employee network groups remain a
top priority, especially now when staffing changes at Shell put these established relationship at risk of
disintegrating. In 2015, we had the great privilege of being involved with Shell’s Parental Leave
Information Session, United Way’s Annual Campaign, and of course, the twice-weekly onboarding of
new hires at Shell – all results of opportunities brought to us by our members.
This year, we are proud to say that we are linking up with the employee network AsiaNet to deliver not
one, but a series of monthly Financial Literacy Seminars to Shell people. As a result of this initiative, we
have also received expressions of interest for Financial Literacy Seminars at other Shell sites.
Please know that as members, you play an integral part in being SECU advocates, so while we always
appreciate member referrals, we are also open to any opportunities that would allow us to get in front of
our members and any potential members.
The enhanced visibility of being located on the main floor of Shell Centre has also helped us to recruit
and attract diverse, top talent to our board, which in turn provides heightened governance,
engagement, and oversight of our business. This year, we received 12 applications for our Board of
Director vacancies - an impressive number that further highlights how invested and engaged our
members are.
There is of course the downside, which is the lease commitment on our Altius Centre space - still
ongoing despite our continued work with realtors and our property management company to find
suitable renters. The state of Calgary’s commercial real estate market has certainly added to the
challenge of offloading this space, such that our team is now also looking at other opportunities to
recoup some or all of our occupancy costs. Some examples include an invitation to submit Expressions
of Interest proposals through the Calgary Arts Development and Art Spaces Program, as well through
United Way. Again, we continue to ask you, our members, for any leads on interested parties, keeping
in mind that this rental opportunity is not just available for commercial use, but also for non-profit
organizations.
The Board and Management continue to work on shaping our Employee Value Proposition with
additional training and succession planning, as well as adjustments to employee pension and benefit
programs, while keeping a low costs environment in mind. We continue to take advantage of
8|Page
opportunities to hone our employees’ leadership skills through the Alberta Young Leaders Program,
where we have two participants graduating this year – John Knight and Dennise Yambao. We will also
have a new candidate joining the program in April as a 1 st year cohort. What a commitment to
development and leadership continuity to our CU!
The Marketing committee and management team worked on several exciting projects this year, such
as the launch of e-newsletters and the unveiling of our re-designed and upgraded website,
shellcu.com. We also had some memorable campaigns, namely our Valentine’s Day promotion on the
Deposit and Wealth side, and our 1% cash-back MOREgage campaign on the Credit side. We continue
to gain momentum on the Business Banking side, where one of the previous year’s most notable wins
was acquiring the membership of a Shell Centre coffee shop. Overdraft accounts are now available to
all members, and come at a time when members may benefit most from some protection and peace of
mind. Lastly, our management, board, and AYL team performed a thorough review of our
miscellaneous service charges to ensure competitiveness in the market, with an eye on proactively
mitigating further margin compression.
We continue to see training and development of Board and Staff as a high priority and commitment. In
2015, all board members completed mandatory Anti-Money Laundering training and three board
members completed a Credit Union Director Achievement course while management and board
members participated in the following conferences throughout the year.
Conference
Alberta Central AGM
Canadian Central AGM and Conference
Number of attendees
2 Attendees
2 Attendees
I would like to thank our members for their support through this past year as we continue to grow and
blossom in our new Shell Centre space. I would also like to recognize all of the dedicated, committed,
hard-working Board Members, Management and Staff for ensuring the successful, ongoing operations
of the Shell Employees’ Credit Union.
Adam Battistessa
President
Board of Directors
9|Page
Report of the Audit Finance Committee
Fiscal Year ending Oct 31, 2015
The purpose of the Audit Finance Committee is to provide for an independent review of the Credit
Union’s operation. Specifically, the Committee provides assurance around the integrity of the financial
data, adequacy of financial controls and overall adherence to sound business practices. To fulfill this
mandate, the Committee meets throughout the year to evaluate the financial reporting and
performance of the business as well as reviewing internal and external audit results, including
management’s responses to any reported deficiencies. The Committee reports its activities to the
broader Board as a part of every regular Board Meeting.
During this past year three audits were undertaken by Alberta Central Audit Services. These audits
confirm that the Credit Union’s overall controls are strong and the Audit Finance Committee is pleased
with the progress that has been made. In light of solid audit results the Audit Committee supported
reducing audit frequency from Alberta Central from three times a year to twice a year. This also has
the added benefit of reducing audit support effort and costs. The Credit Union also changed external
auditors this year. After many years with Hawkings Epp Dumont the change was made to Collins
Barrow. This change provides a fresh perspective to the Credit Union and aligns with good
governance practices.
From an operating performance perspective, the Credit Union has weathered a significant downturn in
the oil and gas industry, delivering another profitable year in 2015. Growth slowed in 2015 with asset
growth of $3 Million and deposit growth of $3.4 million. During the same year loans declined by $1.6
million.
10 | P a g e
Overall, financial margin growth was negative, settling at 1.37% of assets despite decreasing interest
rates, falling behind the previous year’s 1.49%. Managing costs continue to be a key focus for the
credit union with costs at 1.35% of assets. Conclusively, the Credit Union earned a $485,000 after tax
profit for 2015. This was helped by a one-time patronage distribution after-tax of over $158,000. Costs
continue to be key focus for the Credit Union. The Credit Union’s operating expenses continued to be
burdened by the lease obligation at the former branch at the Altius building. Management continues to
explore options for eliminating the additional cost associated with this obligation. The competitive
marketplace and low interest rate environment continues to pressure the Credit Union’s ability to
generate growth in the financial margin. The management and Audit Finance Committee continue to
be diligent in its oversight of this important measure of profitability for the business.
Operating Ratios % of Assets
2%
1%
1%
1%
1%
1%
0%
0%
0%
Financial Margin
Operating Costs
PreTax Profit
2011
2012
2013
2014
2015
1.11%
1.06%
0.18%
1.25%
1.06%
0.32%
1.47%
1.26%
0.34%
1.45%
1.32%
0.29%
1.37%
1.35%
0.21%
Credit Union members once again enjoyed a dividend based on their common share ownership. This
year’s payout reflects a dividend payout of just over $160,000 or 3% on each common share. This
reflects a balance approach between growing equity to ensure a strong financial position, and providing
solid returns for our members.
11 | P a g e
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0
Dollar Value
Dividend Rate
Dividends Paid
10.00%
8.00%
6.00%
4.00%
2.00%
2011
$213,742
4.50%
2012
$216,928
5.00%
2013
$213,988
4.00%
2014
$208,369
4.00%
2015
$161,154
3.00%
0.00%
In closing, the Credit Union management and staff delivered another profitable year of operation.
Members have the added benefit of enjoying competitive products, personal service and profit sharing
as well as having deposits and accrued interest 100% guaranteed through the Credit Union Deposit
Guarantee Corporation.
From a personal perspective, I’d like to thank the members of the Audit Finance Committee for their
active participation and oversight as well as the Credit Union’s management and staff for delivering on
a successful year.
Nathan Turnbull
Chair
Audit Finance Committee
12 | P a g e
Report of the Credit Committee
Fiscal Year ending Oct 31, 2015
The Credit Union’s loan portfolio was $221.84M at fiscal year-end, October 31, 2015. This represents a
decrease of $1.58M or 0.71% from 2014. We are pleased to see this stability in the loan portfolio given
the economic challenges faced by Alberta and the energy sector this year. The Credit Union is
proactively monitoring the external environment on an ongoing basis to identify potential impacts to our
membership and lending portfolio.
In 2015 the Prime Rate decreased twice in response to Bank of Canada rate adjustments, ultimately
settling at 2.70%. Competitive interest rates and a strong demand for consolidation loans and vehicle
purchases facilitated the increase in the consumer loan portfolio. The cooling housing sales market in
the second half of the fiscal year contributed to the decrease in the residential mortgage portfolio. In
addition, lines of credit decreased as this segment saw more pay down of revolving debt in response to
economic uncertainty. The Credit Union continued to participate in syndicated loans, which are joint
lending agreements to finance a credit request that exceeds another individual credit union’s lending
limit. Syndicated loans earn a strong return helping to offset low mortgage lending rates.
The annual volume variance in our loan products are categorized below:
•
Consumer Loans:
$658 thousand
•
Residential Mortgages:
($1.54 million)
•
Line of Credits:
($1.93 million)
•
Syndicated Loans:
$1.24 million
4.87% increase
0.90% decrease
5.58% decrease
32.54% increase
The average loan rate was 3.25% for October 2015.
We are pleased to present that loan write-offs for the year totaled $0 and recoveries of prior year writeoffs totaled $10,718. This past year and the 5 year average continues to be very low compared to
industry experience and is a result of the Credit Union's low risk lending strategy. The Credit Union
management and the credit committee constantly monitor delinquent accounts and staff work promptly
with members to resolve any delinquency issues.
13 | P a g e
I would like to take the opportunity to thank the Manager of Credit, the lending staff in our Calgary and
Scotford locations and members of the credit committee for their hard work and dedication throughout
the year.
Belinda Simpson
Chair
Credit Committee
14 | P a g e
Collins Barrow Edmonton LLP
2380 Commerce Place
10155 - 102 Street N.W
Edmonton, Alberta
TSJ 4G8 Canada
T. 780.428.1522
F. 780.425.8189
www.collinsbarrow.com
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying financial statements of Shell Employees' Credit Union Limited,
which comprise the statement of financial position as at October 31, 2015 and the statements of
income and comprehensive income, changes in members' equity and cash flows for the year ended
October 31, 2015, and a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements In
accordance with International Financial Reporting Standards, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
Auditors' Responsibllity
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with Canadian generally accepted auditing standards. Those
standards require that we comply with ethical requirements and plan and perform the audit lo obtain
reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditors' judgement, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the Credit
Union's preparation and fair presentation of the financial statements 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 entity's Internal control.
An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management,
as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate lo provide a basis for
our audit opinion.
15 | P a g e
Opinion
In our opinion, the financial statements present fairly, in all material respects, the financial position of
Shell Employees' Credit Union Limited as at October 31, 2015 and its financial performance and its
cash flows for the year ended October J1, 2015 in accordance with International Financial Reporting
Standards.
Other Matters
The prior year's financial statements were audited by another firm of Chartered Accountants who
expressed an unmodified opinion dated January 20, 2015.
Edmonton, Alberta
January 19, 2016
Chartered Accountants
16 | P a g e
MANAGEMENT RESPONSIBILITY
To the Members of Shell Employees' Credit Union Limited:
Management is responsible for the preparation and presentation of the accompanying financial
statements, including responsibility for significant accounting judgements and estimates in accordance
with International Financial Reporting Standards and ensuring that all information in the annual report is
consistent with the statements. This responsibility includes selecting appropriate accounting principles
and methods, and making decisions affecting the measurement of transactions in which objective
judgement is required.
In discharging its responsibilities for the integrity and fairness of the financial statements, management
designs and maintains the necessary accounting systems and related internal controls to provide
reasonable assurance that transactions are authorized, assets are safeguarded and financial records
are properly maintained to provide reliable information for the preparation of financial statements.
The Board of Directors and Audit Finance Committee are composed entirely of Directors who are
neither management nor employees of the Credit Union. The Board is responsible for overseeing
management in the performance of its financial reporting responsibilities, and for approving the
financial information included in the annual report. The Board fulfils these responsibilities by reviewing
the financial information prepared by management and discussing relevant matters with management
and external auditors. The Audit Finance Committee is also responsible for recommending the
appointment of the Credit Union's external auditors.
Collins Barrow Edmonton LLP, an independent firm of Chartered Accountants, is appointed by the
members to audit the financial statements and report directly to them; their report follows. The external
auditors have full and free access to, and meet periodically and separately with, both the Audit Finance
Committee and management to discuss their audit findings.
General Manager
17 | P a g e
Statement of Financial Position
ASSETS
Cash and cash equivalents (Note 5)
Income taxes receivable
Investments (Note 6)
Loans to members (Note 8)
Derivative financial assets (Note 7)
Other assets (Note 9)
Property and equipment (Note 10)
Intangible assets (Note 11)
LIABILITIES
Bank indebtedness (Note 5)
Member deposits (Note 13)
Accounts payable and accrued liabilities
Derivative financial liabilities (Note 7)
Deferred income tax liability (Note 14)
MEMBERS’ EQUITY
Dividends distributable (Note 15)
Common shares (Note 15)
Retained earnings
Oct. 31, 2015 Oct 31, 2014
$ 872,147
$--103,585
45,652
45,790,460
41,996,217
222,017,299 223,607,744
98,167
314,702
286,171
62,008
666,367
786,925
174,181
189,469
$270,008,377 $267,002,717
$ --$478,854
253,880,857 250,679,228
291,575
285,811
98,167
314,702
19,889
23,289
$254,290,488 $251,781,884
$161,154
$209,086
5,474,481
5,291,820
10,082,254
9,719,927
15,717,889
15,220,833
$270,008,377 $267,002,717
Contingent liabilities and commitments (Note 18)
Approved on behalf of the Board
See accompanying notes to the financial statements
18 | P a g e
STATEMENT OF INCOME AND COMPREHENSIVE INCOME
For the Year Ended October 31, 2015
Financial Income
Interest on member loans
Investment (Note 20)
Financial Expenses
Interest on member deposits
Interest on borrowings
Financial margin before provision for loan impairment
Provision for loan impairment (Note 8)
Financial margin
Other income (expenses)
Service charges and other
Net operating income
Less: Operating expenses (Schedule 1)
Income before income taxes
Income tax expense (recovery) (Note 14)
Current income taxes expense
Deferred income taxes expense
Net income and comprehensive income
Oct. 31, 2015
$7,434,845
824,447
8,259,292
Oct 31, 2014
$7,658,963
899,044
8,558,007
4,547,433
33,522
4,580,955
4,600,384
8,761
4,609,145
3,678,337
55,881
3,622,456
3,948,862
97,881
3,850,981
544,414
4,166,870
3,613,148
553,722
443,175
4,294,156
3,515,810
778,346
72,381
173,546
(3,400)
68,981
$484,741
(16,711)
156,835
$621,511
See accompanying notes to the financial statements
19 | P a g e
STATEMENT OF CHANGES IN MEMBERS’ EQUITY
For the Year Ended October 31, 2015
As at November 1, 2013
Total net income for the year
Share capital issued and
redeemed for cash, net
Shares issued to settle
allocation distributable
Dividends declared, net of tax
recovery of $46,974
As at October 31, 2014
As at November 1, 2014
Total net income for the year
Share capital issued and
redeemed for cash, net
Shares issued to settle
allocation distributable
Dividends declared, net of tax
recovery of $38,740
As at October 31, 2015
Dividends
Distributable
Common
Shares
Retained
Earnings
Total Equity
$209,866
---
$5,208,559
---
$9,259,808
621,511
$14,678,233
621,511
---
(125,108)
---
(125,108)
(209,866)
208,369
720
(777)
209,086
$209,086
--$5,291,820
(162,112)
$9,719,927
46,974
$15,220,833
$209,086
---
$5,291,820
---
$9,719,927
484,741
$15,220,833
484,741
---
(26,425)
---
(26,425)
(209,086)
209,086
---
---
161,154
$161,154
--$5,474,481
(122,414)
$10,082,254
38,740
$15,717,889
See accompanying notes to the financial statements
20 | P a g e
STATEMENT OF CASH FLOWS
For the Year Ended October 31, 2015
Cash flows from operating activities
Net income
Adjustments for:
Non-cash items:
Net interest income
Provisions for impaired loans
Current income tax expense
Provisions for deferred income taxes
Depreciation of property and equipment
Amortization of intangible assets
Income taxes paid
Changes in other assets:
Changes in other assets
Changes in accounts payable and accrued
liabilities
Changes in member activities (net):
Changes in member loans
Change in member deposits
Cash flows related to interest
Interest received
Interest paid
Cash flows from financing activities:
Change in common shares
Change in dividends payable
Dividends payable
Tax recovery on investment share dividends
Cash flows from investing activities:
Net change in investments
Additions to intangible assets
Additions to property and equipment
Proceeds on disposal of intangible assets
Net increase (decrease) in cash equivalents
2015
2014
$484,741
$621,511
(3,678,337)
55,881
72,381
(3,400)
127,883
65,011
(130,315)
(3,948,862)
97,881
173,546
(16,711)
131,481
67,385
(168,060)
(3,006,155)
(3,041,829)
(224,163)
18,100
5,764
(218,399)
85,917
(67,817)
1,526,047
3,426,627
(12,874,915)
357,051
4,952,674
(12,517,864)
8,294,810
(4,805,954)
3,488,856
8,607,597
(4,413,965)
4,193,632
5,216,976
(11,433,878)
182,661
(47,931)
(161,154)
38,740
12,316
83,980
(780)
(209,086)
46,974
(78,912)
(3,821,244)
(53,922)
(7,325)
4,200
(3,878,291)
1,351,001
6,998,856
(3,425)
(20,391)
--6,975,040
(4,537,750)
21 | P a g e
(Bank indebtedness) cash and cash
equivalents, beginning of year
Cash and cash equivalents (bank
indebtedness), end of year
(478,854)
4,058,896
$872,147
$(478,854)
See accompanying notes to the financial statements
22 | P a g e
23 | P a g e
24 | P a g e
Board of Directors
Back from left to right
Adam Battistessa, Steve Delude, Jason Anderson, Nathan Turnbull, Saeed Kangarloo, Drew Harris
Front from left right
Rebecca Nadel, Belinda Simpson, Haritha Devulapally, Huntley O‘Neill
Not in photo: Dominic Daemen, Jennie Wolter, Tim Bancroft & Zitin Lamba
COMMITTEES
EXECUTIVE
Adam Battistessa, President
Rebecca Nadel, 1st Vice President
Saeed Kangarloo, 2nd Vice President
CREDIT
Belinda Simpson, Chair
Steve DeLude
Jason Anderson
Dominic Daemen, DT
RISK
Steve DeLude, Chair
AUDIT FINANCE
MARKETING
DIRECTOR TRAINEE
Nathan Turnbull, Chair
Drew Harris
Zitin Lamba
Huntley O‘Neill
Jason Anderson
Haritha Devulapally, DT
Huntley O‘Neill, Chair
Belinda Simpson
Nathan Turnbull
Zitin Lamba
Haritha Devulapally, DT
Jason Anderson
Jennie Wolter
Dominic Daemen, DT
Haritha Devulapally
Dominic Daemen
Getting there, Together
/shellcu
/shellcu_ab
Calgary Office
Scotford Office
117, 400 4 Ave SW
Scotford Chemicals Admin Building
Calgary, AB
55520 RR214, Fort Saskatchewan AB
T2P 0J4
T8L 3T2
Phone: (403)718-7770
Phone: (780)992-3578 or (780)992-3978 or (780) 992-3061
Fax: (403)262-4009
Fax: (780)992-3523