2004 - All Trans Financial Services Credit Union
Transcription
2004 - All Trans Financial Services Credit Union
2004 Annual Report ALL TRANS is ALL you want in a financial institution! ALL TRANS FINANCIAL SERVICES CREDIT UNION LIMITED Executive Report Growth in Total Loans On behalf of the Board and Management of All Trans Financial Services Credit Union Limited, we are pleased to report to our Membership on a very successful year of operations in 2004. ($ millions) 30 28 26 24 22 2001 The new strategic direction mandated by our Board of Directors in 1999 and refined in the years following has now fully taken effect. All Trans has a sales and service network of four banking pavilions and five mobile bankers, backed by a substantial ABM network and extensive electronic services. We are now able to deliver personal service to our members at home or at work and our members can reach the credit union at any time and from any location to access their accounts. We have achieved a balance of retail Member services and wholesale commercial services that provides steady, predictable revenue and some degree of immunity to the vagaries of the interest rate cycle. The implementation of Data Mining software and processes now allows us to tailor our services to the individual Member’s needs and requirements and to develop strong relationships between the members and the credit union. Financial Performance: As a result of the success of the maturing Strategic Plan, All Trans has achieved strong asset growth and robust net income in 2004. Total assets increased by 3.2 percent over 2003; of special note our most important asset category, loans to members, increased by 9.7 percent over 2003. This growth represents an increase of $2.6 million dollars in loans granted to Members. We also placed another $.6 million dollars in mortgage loans with our business partner, Equitable Life. 2003 2004 Total Deposits grew by 2.8% over 2003; attracting deposits has proved to be quite challenging due to low market rates and numerous deposit competitors. We will be making deposit growth a priority in 2005 in order to be able to comfortably fund our expanding loan demand. Growth in Total Deposits 36 34 ($ millions) Our Strategic Plan: 2002 32 30 28 26 2001 2002 2003 2004 Pre Tax Income grew from $129,059 in 2003 to $223,125 in 2004, an increase of 76 percent. We achieved strong revenue from multiple sources and were able to effectively constrain expense growth and therefore achieve a substantial bottom line profit. Pre Tax Profit $300,000 $200,000 $100,000 0 2001 2002 2003 2004 Annual Report 2004 Membership: We are pleased that our Members are finding more and more good reasons to transact business with All Trans. As a direct result of our increased business volumes our Asset to Member ratio has increased every year since 2001. The percentage of Members who identify All Trans as their principal Financial Institution has increased every year since 2001 and now comprises 24 percent of our total membership. Assets per Member $6,000 $4,000 $2,000 $0 2001 2002 2003 The Board takes very seriously the trustee responsibility which the Members have delegated to us. We work diligently to ensure that we remain in compliance with regulatory requirements and sound business practices. 2005: During 2005 we will continue to build on the efforts of previous years. In the marketing area we are launching a very aggressive campaign to grow our Member base and to increase usage of our services by individual members. The All Trans “Alltimate Race” will continue throughout 2005, culminating in the award of a new car to our “alltimate” winning member. The award will take place at our Annual Meeting in 2006. We intend to reach out to our members in many ways in 2005 with the intent of strengthening the bond between the Credit Union and the Members still further. We take great pride and satisfaction from serving our Members and look forward to your continued support in the future. 2004 Acknowledgements: Board of Directors: The Board worked very hard in 2004 to plan for new regulatory changes that will take effect in late 2005 and early 2006. As well as working throughout the year towards these goals, the Board undertook two major projects which furthered our work greatly. The first was the annual Strategic Planning conference at which the Board and senior staff review the status of the credit union Strategic Plan, make adjustments as required by changes in the economic, regulatory and operational environment and approve capital and operating budgets for the following year. The second event was a Board Self Assessment Review which will become an annual requirement for all credit union Boards. These two events were very successful and the Board is pleased and confident with the position and outlook of the Credit Union as we move forward. We would like to express our strong appreciation to our staff who again did a wonderful job for All Trans in 2004; to our sponsoring Bond companies and organizations; to the various Union locals; and to our business partners. It requires support and co-operation from all these groups to make All Trans successful – in 2004 that support and co-operation has been outstanding. Lastly, again, thanks to you, the Members for whom all this activity occurs and without whom all this activity could not continue. Ross Taylor, Chair Board of Directors Mike Alexander, Chief Executive Officer 02 ALL TRANS FINANCIAL SERVICES CREDIT UNION LIMITED Lending Report Director of Operations 2003 2004 The 2004 fiscal year saw excellent growth in the Credit Union’s loan portfolio. Our portfolio increased by $2,631,000 or 9.9% over 2003. Personal loan volumes grew marginally while the number of applications declined. We funded 795 personal loans in the amount of $4,830,000 which was a drop of 43 applications but an increase of $144,000. The number of declines was also down from 351 last year to 261. Personal Loans Granted 838 795 Personal Loans Declined 351 261 Mortgages funded internally increased year over year by 10 and $1,982,000. This was an 82.5% increase over 2003. We funded four mortgages through Equitable Life Insurance for $666,000 and while 1st Mortgages Approved Equitable this is a decline from 2003 ($1,222,250) we are not concerned as the decline represented mortgages funded on the credit union’s own books. Smart lines continued to be a popular product with 56 new accounts opened with authorized limits of $3,599,000. This is a down from the prior year by 8 accounts and $611,000. However the decline in smart lines was offset by an increase in 1st mortgages. A significant number of existing smart line members chose to lock in a mortgage rate (via a conventional 1st mortgage) rather than continue with the uncertainties of a floating rate as provided by smart line. We are pleased to report that delinquent loan accounts continued to be kept to a minimum. As of year end we had 8 delinquent accounts totaling $28,681 for which reserves were required. While this is an increase over 2003 results the actual figure is only .53% of our personal loan portfolio and is considerably below industry standards. Bankruptcies continued to plague the financial industry but at All Trans we continued the excellent trend established several years ago of minimum write offs due to this source. In 2004 we received 2 bankruptcies totaling $12,004. Total Personal Loan Applications 1,189 1,056 $4,686,025 $4,830,185 20 30 $2,402,439 $4,384,898 11 4 $1,222,250 $ 666,112 64 56 $-Value Approved Smart lines $4,210,300 $3,599,255 Delinquent Accounts Over 90 Days $ $ Impaired Loans $ 112,177 $ 194,898 Recoveries Bad Debts $ $ $-Value Approved Personal Loans 1st Mortgages Approved Internally $-Value 1st Mortgages (Internal) $-Value Equitable 1st Mortgages Smart Line Applications Bankruptcies 13,810 3,657 2 28,681 3,023 2 We have experienced excellent growth in 2004, especially in 1st mortgages and I wish to acknowledge the significant effort put forth by the mobile money managers in building our credit portfolio. I would also like to commend the Credit Department for the high standards they have established and maintain both in credit granting and the collection area. Ian Huffman, Director Operations Annual Report 2004 Report of the Au d i t Co m m i t t e e The Audit Committee for the past year was comprised of directors Sam Lightowler, James McDonald and Rodger Sheppard. The committee is responsible to ensure that the member’s funds and investments are protected through a system of audits, internal checks and periodic third-party reviews. The committee meets with the External Auditors, Retford & Lane, on a regular basis to review the financial position and balance sheets of the Credit Union. The External Auditors conducted half-year and year-end audits of our financial position. The year-end audit is included in the annual report for your review. These audits are reviewed by the committee, both with management and in-camera with the auditors. The committee also meets with the Internal Auditors, Rick Belsby and Associates, to ensure that our internal policies and procedures are being followed in all aspects of our business. The auditors conducted audits of many aspects of our operations to ensure that we are operating in compliance with both government legislation and internal policy. The committee meets with the auditors to review every audit conducted. Recommendations from these audits are tracked and reviewed with management. • Threshold Electronics: Laser Cash Division Audit • Allowance for Impaired Loans Audit • Payroll and Personnel Audit • Glassworkers Branch Audit • Personal Loans Audit • Mobile Banking Audit • Investment Audit • RRSP & RRIF Audit • Financial Ratios and Analysis Audit • Mortgage Audit • Bank Reconciliation Audit On behalf of the Audit Committee I would like to thank both the Staff and Management for another year of hard work and impressive results. Both the Internal and External Auditors continually express commendations for the thoroughness and accuracy of their work. Thanks to all management, staff and directors for their support to the Audit Committee during the past year. The following audits were conducted in 2004: • Money Laundering and Privacy Legislation Audit • Officer and Staff Loan Audit • Accounts Payable Audit Sam Lightowler, Committee Chair 04 ALL TRANS FINANCIAL SERVICES CREDIT UNION LIMITED Report of the Nominating Committee The By-Laws of All Trans Financial Services Credit Union Limited require the Nominating Committee to present a slate of suitable candidates for election at the Annual Meeting. Each year a number of vacancies occur. The terms of office are organized in such a Mr. Rodger Sheppard Moore Canada – 10 years Director – 25 years Incumbent Ms Elaine Bell World Wrestling Entertainment – 5 years Director – 5 years Incumbent manner that 1/3 (one third) of all elected positions are open for consideration each year. The Nominating Committee, therefore, endorses the following slate of candidates as qualified for election at the Annual Meeting on March 9th, 2005. Mr. James McDonald Former TTC employee Director – 6 years Incumbent Respectfully submitted: Barbara Bottrell Chair, Nominating Committee Annual Report 2004 M a n a g e m e n t ’s R e s p o n s i b i l i t y f o r Fi n a n c i a l R e p o r t i n g The financial statements of All Trans Financial Services Credit Union Limited and all information in this annual report are the responsibility of management and have been approved by the board of directors. The financial statements have been prepared by management in accordance with Canadian generally accepted accounting principles. When alternative accounting methods exist, management has chosen those it deems most appropriate in the circumstances. Financial statements are not precise since they include certain amounts based on estimates and judgements. Management has determined such amounts on a reasonable basis in order to ensure that the financial statements are presented fairly in all material respects. Management has prepared the financial information presented elsewhere in the annual report and has ensured that it is consistent with that in the financial statements. All Trans Financial Services Credit Union Limited maintains systems of internal accounting and administrative controls of high quality and consistent with reasonable cost. Such systems are designed to provide reasonable assurances that the financial information is relevant, reliable and accurate, and that the Credit Union’s assets are appropriately accounted for and safeguarded. Also, the Credit Union has established an appropriate Code of Business Ethics, Conflict of Interest Policy and a Confidential Information Policy. The Audit Committee is appointed by the board and all members are active directors of the Credit Union. The committee meets regularly with management and the Internal Auditor to discuss internal controls over the financial reporting issues in order to satisfy it that each party is properly discharging its responsibilities and to review the financial statements and the External Auditors’ Report. The committee reports its findings to the Board for consideration when approving the financial statements for issuance to the Credit Union membership. The committee also considers for review by the Board and approval by all members, the engagement or reappointment of the external auditors. The financial statements have been audited by Retford and Lane LLP, the external auditors, in accordance with Canadian generally accepted standards on behalf of the Credit Union membership. Mike Alexander, Chief Executive Officer Greg Turgeon, Chief Financial Officer The board of directors is responsible for ensuring that management fulfills its responsibilities for financial reporting and is ultimately responsible for reviewing and approving the financial statements. The Board carries out this responsibility principally through its Audit Committee. 06 ALL TRANS FINANCIAL SERVICES CREDIT UNION LIMITED Auditors’ Report To the Members of All Trans Financial Services Credit Union Limited We have audited the balance sheet of All Trans Financial Services Credit Union Limited as at December 31, 2004 and the statements of operations and retained earnings and cash flows for the year then ended. These financial statements are the responsibility of the credit union's management. Our responsibility is to express an In our opinion, these financial statements present fairly, in all material respects, the financial position of the credit union as at December 31, 2004 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles. 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 plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Retford & Lane LLP, Chartered Accountants January 6, 2005 Annual Report 2004 B a l a n ce S h e e t Fo r t h e ye a r e n d e d D e c e m b e r 3 1 , 2 0 0 4 2004 2003 ASSETS Cash resources and currency held in third party ABMs (Notes 2 and 3) Investments (Notes 1 and 4) Loans to members (Notes 5 and 6) Accrued interest and other receivables Prepaid expenses Capital assets (Notes 1 and 7) $ 5,803,533 2,212,262 29,440,516 188,159 118,214 37,762,684 $ 6,901,164 2,529,493 26,846,112 142,569 157,180 36,576,518 561,032 $ 38,323,716 560,498 $ 37,137,016 $ 35,254,732 479,786 $ 34,278,603 424,249 649,591 36,384,109 676,886 35,379,738 1,939,607 $ 38,323,716 1,757,278 $ 37,137,016 LIABILITIES AND RETAINED EARNINGS Liabilities Members' deposits (Note 8) Other liabilities (Note 9) Liabilities qualifying as regulatory capital Member shares (Note 10) Retained earnings Approved by the Board Director ______________________________ Director ______________________________ 08 ALL TRANS FINANCIAL SERVICES CREDIT UNION LIMITED Statement of Operations and Retained Earnings Fo r t h e ye a r e n d e d D e c e m b e r 3 1 , 2 0 0 4 2004 Revenue Interest on mortgage loans Interest on personal loans Investment income Third-Party ABM revenue Other income $ Interest expense Member deposits Demand Term Registered savings plans Registered income funds External borrowings Gross profit Expenses Deposit insurance Occupancy costs (Schedule) Other administration expenses (Schedule) Provision for impaired loans (Note 6) Remuneration to officers and staff (Schedule) Income before income taxes Income taxes (Note 12) Net income for the year Retained earnings, beginning of the year Retained earnings, end of the year $ 1,217,741 500,505 110,810 423,723 1,044,857 3,297,636 2003 $ 1,165,195 559,225 129,956 449,225 762,738 3,066,339 6,941 261,797 318,175 67,384 19 654,316 2,643,320 6,551 249,486 334,480 69,283 1,982 661,782 2,404,557 34,582 210,711 980,133 87,677 1,107,092 2,420,195 31,563 176,452 1,017,831 7,843 1,041,817 2,275,506 223,125 40,796 182,329 1,757,278 1,939,607 129,051 26,119 102,932 1,654,346 1,757,278 $ Annual Report 2004 S t a t e m e n t o f C a s h Fl o w s Fo r t h e ye a r e n d e d D e c e m b e r 3 1 , 2 0 0 4 2004 Cash flows from operating activities Net income for the year Adjustments for: Amortization Loss on disposal of capital assets $ 182,329 2003 $ 102,932 139,094 321,423 155,475 272 258,679 38,966 (45,590) 55,535 370,334 54,586 33,766 32,044 379,075 (139,627) (2,594,404) 317,231 (2,416,800) (38,854) (693,913) (132,091) 547,324 (317,534) 976,129 (27,294) 948,835 2,815,058 (59,926) 2,755,132 Increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of the year Cash and cash equivalents, end of the year (1,097,631) 6,901,164 $ 5,803,533 $ 2,816,673 4,084,491 6,901,164 INTEREST AND INCOME TAXES PAID Interest paid Income taxes paid $ $ $ $ 641,019 4,433 Changes in non-cash working capital balances: Prepaid expenses Other current assets Other liabilities Cash flows from investing activities Purchase of capital assets Loans to members - net Investments Proceeds on disposal of capital assets Cash flows from financing activities Members' deposits Membership shares 665,909 17,927 10 ALL TRANS FINANCIAL SERVICES CREDIT UNION LIMITED N o t e s t o t h e Fi n a n c i a l S t a t e m e n t s Fo r t h e ye a r e n d e d D e c e m b e r 3 1 , 2 0 0 4 1. Significant accounting policies These financial statements have been prepared in accordance with Canadian generally accepted accounting principles and their basis of application is consistent with the preceding year. Outlined below are the accounting policies considered to be significant. The Credit Unions and Caisses Populaires Act, 1994 (the “Act”) Regulations to the Act specify that certain items are required to be disclosed in the financial statements which are presented at annual meetings of members. It is management's opinion that the disclosures in these financial statements and notes comply, in all material respects, with the requirements of the Act. Where necessary, reasonable estimates and interpretations have been made in presenting this information. Use of estimates The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the year. These estimates are reviewed periodically and, as adjustments become necessary, they are reported in earnings in the year in which they become known. Carrying values of investments Investments in interest bearing securities are stated at cost less amortization of any purchase premiums or discounts. Investments in cooperative organizations are stated at cost. If there is a decline in value of an investment which is considered to be other than temporary, the investment would be written down to estimated realizable value. Investments in marketable securities are stated at the lower of cost and net realizable value. Net realizable value is based on available publicly listed trading prices. Gains and losses arising on the sale of investments are included in earnings from operations. Capital assets Capital assets are stated at acquisition cost. Amortization is calculated using the methods set out below applied to the cost of the assets, at annual rates based on their estimated useful lives as follows: Furniture and equipment ATM equipment Leasehold improvements 20% 10 years 15 years diminishing balance straight line straight line Loans to members Loans to members are stated at cost which includes amounts advanced and applicable charges, less repayments. Interest is accounted for on the accrual basis for all loans other than impaired loans. A loan is classified as impaired when a specific provision has been established or a writeoff taken or when, in the opinion of management, there is reasonable doubt as to the ultimate collectibility of principal or interest. A loan is also classified as impaired when interest or principal is contractually 90 days past due, unless the loan is fully secured and in the process of collection. Fully secured loans are classified as impaired after a delinquency period of 180 days. Also, a loan is classified as impaired when, in the opinion of management, there is no longer reasonable assurance of timely collectibility of principal or interest. Once a loan is classified as impaired, all previously accrued interest is reversed and charged against current income, except for loans which are fully secured. Loans are generally returned to accrual status when all delinquent principal and interest payments are brought current and the timely collection of both principal and interest is reasonably assured. Annual Report 2004 N o t e s t o t h e Fi n a n c i a l S t a t e m e n t s Fo r t h e ye a r e n d e d D e c e m b e r 3 1 , 2 0 0 4 1. Significant accounting policies (continued) Loans to members (continued) The business of the credit union necessitates the management of credit risk. Credit risk is the potential for loss due to the failure of a borrower to meet its financial obligations. The Board of Directors of the credit union oversees the risk management process. Senior management coordinates policy setting on risk management issues, assesses the risk exposure of the credit union and reviews the effectiveness of internal control processes. Allowance for impaired loans The allowance for impaired loans is maintained in an amount considered adequate to absorb estimated credit related losses in the loan portfolio. The allowance for impaired loans reflects management's best estimate of the losses existing in the loan portfolio and their judgements about current economic conditions. If the circumstances under which these estimates and judgements were made change, there could be a significant change to the allowance for impaired loans which consists of specific provisions and a general provision, each of which is reviewed on a regular basis. The allowance is increased by provisions for impaired loans which are charged to earnings and reduced by writeoffs net of recoveries. Specific provisions are determined on an item-by-item basis and reflect the associated estimated credit loss. The specific provision is the amount that is required to reduce the carrying value of an impaired loan to its estimated realizable amount, which is generally the fair value of any security underlying the loan, net of expected costs of realization. The general provision is established to absorb potential credit losses and is determined through analysis of economic developments and current portfolio trends for credit losses and cannot be determined on a loan by loan basis. When losses can be attributable to individual loan facilities, specific provisions are recorded. Write-offs are generally recorded after all reasonable restructuring or collection activities have taken place and there is no realistic prospect of recovery. Translation of foreign currencies The monetary assets and liabilities of the credit union denominated in foreign currencies are translated at the rates of exchange at the balance sheet date. Revenues and expenses are translated at the average exchange rate prevailing during the year. Exchange gains or losses are included in operations. Member shares The credit union's membership shares are presented in the balance sheet as financial liabilities in accordance with recommendations of the Canadian Institute of Chartered Accountants. These liabilities qualify as capital for regulatory purposes, notwithstanding their financial statement classification. 2. Cash resources The term "cash resources" as used in these financial statements consists of cash on hand, deposits maturing within one hundred days, payroll deductions which have been made and which are in the course of being remitted. The credit union has available a line of credit of $972,500 to cover a shortfall in cash resources due to unanticipated volume in clearings. This line of credit is secured by a general security agreement and an assignment of book debts. At December 31, 2004, the line of credit was not utilized. The business of the credit union necessitates the management of liquidity risk. Liquidity risk is the risk of being unable to meet financial commitments, under all circumstances, without having to raise funds at unreasonable prices or sell assets on a forced basis. 12 ALL TRANS FINANCIAL SERVICES CREDIT UNION LIMITED N o t e s t o t h e Fi n a n c i a l S t a t e m e n t s Fo r t h e ye a r e n d e d D e c e m b e r 3 1 , 2 0 0 4 3. Currency held in third-party ABMs The credit union entered into an agreement with a third-party service organization to provide currency for ABMs (automated banking machines) owned by the third-party. As compensation, the credit union receives a fee calculated primarily by reference to the aggregate funding provided and a prescribed interest rate. Repayments of the amounts placed into the ABMs occur through the electronic clearing process and the credit union retains control over and legal title to such funds until repayment is made. At the year ended December 31, 2004, the currency in third-party ABMs was $3,850,000. 4. Investments Bonds - government guaranteed Bank extendible step up notes Bankers acceptances Investments in co-operatives Carrying value Market value 2004 2,095,917 109,529 6,816 2,212,262 2,211,682 $ $ $ 2003 2,312,594 210,083 6,816 2,529,493 2,509,764 $ $ $ 5. Loans to members Mortgages Personal Less allowance for impaired loans (Note 6) 2004 $ 23,740,795 5,863,872 29,604,667 164,151 $ 29,440,516 2003 $ 20,727,644 6,196,387 26,924,031 77,919 $ 26,846,112 The loan classifications set out above are as defined in the Regulations to the Credit Unions and Caisses Populaires Act, 1994. Mortgage loans are repayable in monthly blended principal and interest installments over a maximum term of five years based on a maximum amortization period of twenty-five years. As at December 31, 2004, the credit union was committed to the issuance of mortgage loans to members in the aggregate amount of $212,000 (2003 - $665,000). As at December 31, 2004, the approved and unused line of credit limits amount to $5,396,232 (2003 - $4,435,087). 6. Allowance for impaired loans Balance at beginning of year Loans written off Loans recovered Provision charged (credited) to operations Balance at end of year 2004 77,919 (4,468) 3,023 76,474 87,677 $ 164,151 $ $ $ 2003 79,812 (13,393) 3,657 70,076 7,843 77,919 The allowance for impaired loans provided for in the accounts of the credit union is in accordance, in all material respects, with the bylaw of the Deposit Insurance Corporation of Ontario governing such allowances. Annual Report 2004 N o t e s t o t h e Fi n a n c i a l S t a t e m e n t s Fo r t h e ye a r e n d e d D e c e m b e r 3 1 , 2 0 0 4 6. Allowance for impaired loans (continued) Allowance for impaired loans balance Mortgages Personal $ $ 7. 2004 164,151 164,151 $ $ 2003 77,919 77,919 Aggregate impaired loans $ $ 2004 150,549 45,447 195,996 $ $ 2003 110,930 110,930 Capital assets Furniture and equipment Leasehold improvements ATM equipment $ $ Cost 1,653,681 263,690 438,776 2,356,147 Accumulated Amortization $ 1,312,681 116,017 366,417 $ 1,795,115 2004 Net Book Value $ 341,000 147,673 72,359 $ 561,032 2003 Net Book Value $ 359,901 84,361 116,236 $ 560,498 Amortization expense for the year amounted to $139,094 ($155,475 for 2003). 8. Members’ deposits Personal chequing accounts Savings accounts Term deposits Registered savings plans Registered income funds 2004 3,694,558 7,775,151 10,785,014 11,073,900 1,926,109 $ 35,254,732 $ 2003 3,486,984 8,042,687 9,695,963 10,810,092 2,242,877 $ 34,278,603 $ Registered plans Co-operative Trust Company of Canada is the trustee of the registered plans offered to the members. Under an agreement with the trust company, members' contributions to these plans, as well as income earned on them, are deposited in the credit union. On withdrawal, payment of the plan proceeds is made to the members or their designates, by the credit union on behalf of the trust company. Index-linked deposits The credit union has issued and outstanding $946,507 (2003 - $1,054,055) of an Index-Linked Registered Savings Plan product to its members. These term deposits have maturities of 3 and 5 years and pay interest to the depositors, at the end of the respective terms, based on the performance of the S&P / TSX 60 Index. The credit union has entered into hedge agreements with Credit Union Central of Ontario (CUCO) to offset the exposure to the S&P / TSX 60 Index associated with these products. The credit union has paid CUCO an amount discounted over the term of the deposit to fully fund the credit union's liability to Central. At the end of the term of the deposit, Central pays to the credit union an amount equal to the amount that will be paid to the depositors based on the performance of the S&P / TSX 60 Index. 14 ALL TRANS FINANCIAL SERVICES CREDIT UNION LIMITED N o t e s t o t h e Fi n a n c i a l S t a t e m e n t s Fo r t h e ye a r e n d e d D e c e m b e r 3 1 , 2 0 0 4 9. Other liabilities Accounts payable and accrued charges Accrued interest on members' deposits Certified cheques Future income taxes Income taxes payable $ $ 2004 133,746 293,485 24,000 28,555 479,786 $ $ 2003 81,245 305,078 5,000 24,000 8,926 424,249 10. Member shares The credit union has 6,964 (2003 - 7,267) members. Each member must hold between 18 and 20 shares with a par value of $5 each. All members must acquire two shares per year until the maximum of 20 shares is reached. Shares may be withdrawn on demand or withdrawal from membership, subject to the credit union meeting capital adequacy requirements, and the discretion of the directors who may require notice. 11. Capital adequacy In accordance with the requirements of the Credit Unions and Caisses Populaires Act, 1994 and accompanying Regulations, credit unions are required to maintain sufficient capital to meet two tests: (a) Leverage test: Regulatory capital, comprising membership shares, any other class of qualifying capital that may be issued and retained earnings, must amount to at least 5% of total assets. (b) Risk-weighted assets test: Regulatory capital, comprising membership shares, any other class of qualifying capital that may be issued and retained earnings, must amount to at least 8% of risk-weighted assets. The risk weighting of assets is specified in the Regulations to the Act. Regulatory capital at December 31: (a) Leverage test ratio: (b) Risk-weighted assets test ratio: 2004 $ 2,589,198 6.76% 15.04% $ 2003 2,434,164 6.55% 14.83% 12. Income taxes The credit union's basic statutory tax rate is approximately 20%. Any future income taxes included in other liabilities is the cumulative amount of tax applicable to temporary differences between the carrying amount of the assets and liabilities and their values for tax purposes. Annual Report 2004 N o t e s t o t h e Fi n a n c i a l S t a t e m e n t s Fo r t h e ye a r e n d e d D e c e m b e r 3 1 , 2 0 0 4 13. Commitments The credit union is committed to the following minimum annual payments for its leased premises and ABM premises: 2005 2006 2007 2008 2009 $ 180,938 $ 181,635 $ 81,220 $ 47,748 $ 23,874 14. Related party transactions As at December 31, 2004, the aggregate value of interest bearing personal and mortgage loans outstanding to directors, officers and their related parties totalled $297,373 (2003 - $286,718). There was no allowance for impaired loans required in respect of these loans as at December 31, 2004. The Regulations require the financial statements to disclose a general description of the nature, number and aggregate value of Restricted Party transactions, as defined, and the allowance for loan losses related to such transactions. Restricted Party has been defined to include a person, and the person's relative, spouse, or relative of the spouse, who has been a director, officer or committee member in the preceding twelve months, and corporations in which the person owns more than 10% of the voting shares. 15. Contingency A claim has been made against the Credit Union. The possible outcome and the amount of future losses, if any, are not determinable at this time. Therefore, no provision has been made in the financial statements. 16. Additional disclosures required by the Act The only remuneration paid to directors and committee members was for travel allowance and expenses for attendance at meetings. 17. Fair value of financial instruments The fair values of cash resources, certain other assets and other liabilities are equivalent to the respective book values given the short-term nature of the amounts. The fair value of investments is disclosed in Note 4 to the financial statements. These are based on quoted market prices, where available. The fair value of other financial assets and liabilities has not been determined since it was not practicable within the constraints of timeliness and cost to determine the fair value with sufficient reliability. A significant portion of the other financial assets and financial liabilities have either variable rates or are due within one year, and their fair values will approximate their book values. For items that mature beyond one year, increases in market interest rates will result in the fair values of assets and liabilities both decreasing; similarly, decreases in market interest rates will result in the fair values of assets and liabilities both increasing. In management's opinion, the difference between fair values and book values of the other net financial assets and liabilities would not be significant. 16 ALL TRANS FINANCIAL SERVICES CREDIT UNION LIMITED Schedule of Expenses Fo r t h e ye a r e n d e d D e c e m b e r 3 1 , 2 0 0 4 2004 Other administration expenses ATM charges Advertising and promotion Amortization Annual meeting Audit Bank and cash charges Bonding Business taxes Collection costs Consulting Credit reports and applications Data processing Directors and committee meetings Education Equipment maintenance Insurance Legal Loss on disposal of capital assets Mobile bank costs Office supplies Postage RRSP management fees Telephone Vehicle $ 204,649 75,559 119,473 15,350 41,113 33,125 22,109 2,299 11,961 23,603 31,579 36,328 12,586 42,841 13,257 23,701 5,324 103,474 27,268 7,895 100,637 26,002 980,133 $ 177,973 929,119 $ 1,107,092 $ $ $ $ Remuneration to officers and staff Employee benefits Salaries to employees Occupancy costs Amortization Building repairs and maintenance Heat, light and water Rent 2003 $ $ 19,621 41,832 4,019 145,239 210,711 158,554 81,220 135,047 14,558 43,702 27,087 54,663 27,588 1,281 22,072 30,081 34,339 33,315 16,675 36,528 20,242 33,958 272 9,327 74,837 23,572 8,133 101,578 29,202 $ 1,017,831 167,796 874,021 $ 1,041,817 $ 20,429 22,077 13,420 120,526 176,452 Annual Report 2004 A l l Tra n s In the Community As a Member owned, co-operative financial institution All Trans is committed to enhancing the well being of the communities it serves and sensitive to events that affect the well being of communities in other areas of the world. No one could fail to be moved by the terrible tragedy of the Tsunami in the Indian Ocean. The All Trans Board of Directors, immediately on learning of the catastrophe, authorized the donation of $1,000 to the Canadian Red Cross in the name of our Members. This donation, which was matched by an additional $1,000 from the Government of Canada, is specifically earmarked for Tsunami relief. Closer to home All Trans was pleased to donate five hundred dollars to the 2004 TTC United Way campaign. The credit union also donated five hundred dollars to the Peregrine Falcon Foundation – this organization is dedicated to the preservation of the rare Peregrine Falcon species in North America. As a transportation credit union, All Trans was pleased to contribute five hundred dollars to the Halton County Radial Railway, an organization dedicated to the preservation of Ontario’s transportation heritage. The board of directors has initiated two new programs for 2005, both of which are directed at linking the credit union’s profitability to community programs. Starting with our 2005 fiscal year, All Trans will donate one per cent of net profit to charitable purposes. The board is working to define how the funds will be allocated. Suggestions from Members in this regard are welcomed. In 2006 All Trans will be instituting a Scholarship programmed for which the children of our credit union members may compete. The award will be made annually and will consist of a two thousand dollar contribution towards college or university tuition costs. Details of the programed are still being worked out and will be communicated to Members later in 2005. 18 ALL TRANS FINANCIAL SERVICES CREDIT UNION LIMITED Visit us at alltrans.com and check out our Web Banking Services. Service Locations ABM Locations Administration Centre ABMs 24 Hour Locations ABMs Subway Locations Clarica Center (2 ABMs, also Deposit taking) 100 – 3250 Bloor St. W. East Tower, Concourse Level Etobicoke, Ontario Dundas (Eaton Center) 100 – 3250 Bloor St. W. Clarica Centre East Tower Etobicoke, Ontario M8X 2X9 Tel: 416.231.8400 Fax: 416.231.8296 E-Mail: [email protected] Toll Free Line: 1.800.363.0578 Smartmouth Teller: 416.532.BANK (416.532.2265) Website: www.alltrans.com Financial Service Pavilions Clarica Centre (formerly Hillcrest) 100 – 3250 Bloor St. W. East Tower Concourse Level Etobicoke, Ontario M8X 2X9 Tel: 416.533.1090 Fax: 416.538.9655 London Transit 450 Highbury Ave. N. London, Ontario N5W 5L2 Tel: 519.453.2480 Fax: 519.453.0556 Glassworkers (Restricted Access) 777 Kipling Ave. Toronto, Ontario M8Z 5Z4 Tel: 416.232.3389 TTC Hillcrest Yards (Restricted Access) 1138 Bathurst St. Toronto, Ontario Tel: 416.937.1708 O I Canada (Restricted Access) 777 Kipling Ave. Toronto, Ontario Bay St. (Toronto Bus Terminal) ABM’s Regular Business Hours TTC - Hillcrest Yard Division (Restricted Access) Subway Operations Building Toronto, Ontario London Transit Commission (Restricted Access) 450 Highbury Ave. N. London, Ontario Dufferin Kennedy (2 locations) Kipling ABMs “Rabba/ T.O. Fine Foods” Rabba 645 Lakeshore Rd. E. Mississauga, Ontario Rabba 6720 Meadowvale Town Centre Mississauga, Ontario Main Queen’s Park Rabba 252 Queens Quay West. Toronto, Ontario Spadina St. Patrick Union Station Warden Sheppard & Yonge (Sheppard Line) Wilson Rabba 256 Jarvis St. Toronto, Ontario Rabba 24 Wellesley St. Toronto, Ontario T. O. Fine Foods 175 River St. Toronto, Ontario Victoria Park Davisville London Transit Commission Downtown Ticket Office 150 Dundas St. London, Ontario T. O. Fine Foods 49 Lower Jarvis St. Toronto, Ontario Mobile Money Managers Suzette Heber Eastern GTA Tel: 416.554.0726 E-Mail: [email protected] Brenda Heaney Western GTA/Milton/Guelph Tel: 416.220.7784 E-Mail: [email protected] Caroline Memmo Central GTA Tel: 416.554.0728 E-Mail: [email protected] Gregory Radwan Mississauga/Oakville Burlington/Hamilton Tel: 416.220.7804 E-Mail: [email protected]
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