NOTES TO THE FINANCIAL STATEMENTS
Altura Credit Union Limited NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2024 21. ACCRUALS AND OTHER PAYABLES
2024 €
2023 €
376,654 166,742 82,861 ─────── 626,257 ═══════
Creditors & other accruals Regulatory levies Pension and short-term payroll accruals
327,113 235,256 82,880 ─────── 645,249 ═══════
22.
FINANCIAL INSTRUMENTS Financial risk management
Altura Credit Union Limited is a provider of personal, business loans and mortgages and also provides current accounts, overdraft and savings products to its members. The Credit Union invests excess funds with a view to ensuring that the return from members’ loans and investments is adequate to meet the overheads of the Credit Union and provide a reasonable return to members on shares and deposits. The Credit Union has a risk register in place to help the directors manage the various risks arising from its activities to include the issuing of loans to members and investing the excess funds of the Credit Union. The main financial risks arising from Altura Credit Union Limited's activities are credit risk, liquidity risk, market risk and interest rate risk. The Board reviews and agrees policies for managing each of these risks, which are summarised below. Credit Risk: Credit risk is the risk that a borrower will default on their contractual obligations relating to repayments to Altura Credit Union Limited, resulting in financial loss to the Credit Union. In order to manage this risk the Board of Directors approves Altura Credit Union Limited's lending policy, and all changes to it. All loan applications are assessed with reference to the lending policy in force at the time. Subsequently loans are regularly reviewed for any factors that may indicate that the likelihood of repayment has changed. The Credit Union’s investments are also exposed to credit risk and the Credit Union mitigates the risk by only placing investments with financial institutions where the counterparties have strong credit ratings and using investment products authorised by the Central Bank. Liquidity Risk: Altura Credit Union Limited's policy is to maintain sufficient funds in liquid form at all times to ensure that it can meet its liabilities as they fall due. The objective of the Credit Union’s liquidity policy is to smooth the mismatches between maturing assets and liabilities and to provide a degree of protection against any unexpected developments that may arise. The Credit Union adheres, on an ongoing basis, to the minimum liquidity ratio and minimum short term liquidity ratio as set out in the Credit Union Act 1997(Regulatory Requirements) (Amendment) Regulations 2018. Market Risk: Market risk is generally comprised of interest rate risk, currency risk and other price risk. Altura Credit Union Limited conducts all its transactions in Euro and does not deal in derivatives or commodity markets. Therefore Altura Credit Union Limited is not exposed to any form of currency risk or other price risk. Interest Rate Risk: Altura Credit Union Limited's main interest rate risk arises from differences between the interest rate exposures on the receivables and payables that form an integral part of a Credit Union’s operations. Altura Credit Union Limited considers rates of interest receivable on investments and members’ loans when deciding on the dividend rate payable on shares and on any loan interest rebate. 22.1 LIQUIDITY RISK DISCLOSURE All of the financial liabilities of the Credit Union are repayable on demand except for some members' shares attached to loans and funds on long term deposit. 22.2 CAPITAL The Credit Union maintains sufficient reserves to buffer the Credit Union against any losses on its members’ loans and also its investments. The current Regulatory reserve is in excess of the minimum requirement set down by the Central Bank and stands at 10.62% of the total assets of the Credit Union at the Balance Sheet date.
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