AGM Report - St. Lucia Teacher`s Credit Union

Transcription

NATIONAL ANTHEM
Sons and daughters of Saint Lucia
Love the land that gave us birth
Land of beaches, hills and valleys
Fairest isle of all the earth
Wheresoever you may roam
Love Oh love our island home.
Gone, the time when nations battled
For this, ‘Helen of the West’!
Gone, the days when strife and discord
Dimmed her children’s toil and rest
Dawn at last a brighter day
Stretches out a glad, new way.
May the Good Lord bless our island,
Guard her sons from woe and harm
May our people live united
Strong in soul and strong in arm
Justice, Truth and Charity
Our ideal forever be.
PRAYER OF ST. FRANCIS OF ASSISI
Lord make me an instrument of Thy peace
Where there is hatred, let me sow love;
Where there is injury, pardon;
Where there is doubt, faith;
Where there is despair, hope;
Where there is darkness, light and
Where there is sadness, joy.
O Divine Master grant that I may not
So much seek to be consoled as to console;
To be understood as to understand;
To be loved as to love;
For it is in giving that we receive;
It is in pardoning that we are pardoned;
And it is in dying that we are born to eternal life.
MISSION
“The St. Lucia Teachers’ Credit Co-operative will
Provide quality products and services to members,
enourage member participaton in planned activities
and together promote the growth and development
of the Society.”
VISION
“A dynamic financial Co-operative developing
and delivering valued products and services to
its members.”
TABLE OF
CONTENTS
STANDING ORDERS
03
NOTICE OF MEETING
04
SLTCC INFORMATION SHEET
05
BOARD OF DIRECTORS’ REPORT
06
TREASURER’S REPORT
12
CREDIT COMMITTEE REPORT
15
SUPERVISORY COMMITTEE REPORT
19
EDUCATION COMMITTEE REPORT
22
LEAGUE DELEGATES REPORT
25
AUDITOR’S REPORT
31
2
ST. L UC I A TEA C HERS ’ C RED I T C O - C O PERATIV E LT D. 2014 ANNU AL R E POR T
S ervice • A ttitu de • Val u e • Empathy
STANDING
ORDERS
1. (a) A member shall stand and state his name when addressing the chair.
(b) Speeches shall be clear and relevant to the subject before the meeting.
2. A member shall address the meeting when recognized or called upon by the Chairperson to
do so, after which, he shall immediately take his seat.
3. No member shall address the meeting except through the Chairperson.
4. A member shall not speak twice on the same subject, except:
(a) The mover of a motion who has a right to reply.
(b) The member rises to object or explain any matter (with the permission of the Chair).
5. No speeches shall be made after the “Question” has been put to the meeting.
6. The mover of a “Procedural Motion” – (that is a motion for adjournment laid on the table, or motion
to postpone) shall have no right to reply.
7.
A member rising on a “Point of Order” shall state the point clearly and concisely.
(A point of order must have relevance to the Standing Order.)
8. A member shall not call another member to ‘order’.
(a) A member may draw the attention of the Chair to a Breach of Order.
(b) On no event shall a member call the Chair to order.
9. When a motion is withdrawn any amendment to it falls.
10. The Chairman has the right to a “Casting Vote”.
11. If there is equality of voting on an amendment, and if the Chairman does not exercise his casting
vote, the amendment is lost.
12. Provision shall be made for protection by the Chairman from vilification (personal abuse) among members.
13. No member shall impute improper motives against another.
ST. LU CIA T E ACHE RS’ CR E DIT CO-COPE R AT IV E LT D. 2014 ANNU AL R EP ORT
Se rvic e • A ttitud e • Va lue • E mpat hy
3
ST. LUCIA TEACHERS’ CREDIT CO-OPERATIVE LTD.
NOTICE OF MEETING
Open Session
1.
2.
3.
4.
5.
6.
National Anthem
Prayer/Invocation
Welcome
Greetings from Fraternal Organizations
Address
Vote of Thanks
Close Session
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Call to Order
Ascertainment of a Quorum
Notice Convening Meeting
Apologies for Absence
Adoption of Standing Orders
Reading and Approval of the Minutes of the last AGM and discussion
of matters arising there from and any intervening Special General Meetings
Adoption/Confirmation of Reports:
a. Board of Directors
b. Treasurer
c. Auditor
d. Credit Committee
e. Supervisory Committee
f. Any other Sub-Committees
Unfinished Business
Resolutions
Elections to:
a. Board of Directors
b. Credit Committee
c. Supervisory Committee
Appointment of Auditors for the ensuing year
Announcements/Closing Remarks
Adjournment
By Order of the Board
4
ST. LUC I A TEA C HERS ’ C REDI T C O -C O PERATIV E LT D. 2014 ANNU AL R E POR T
INFORMATION
SHEET
Registered Name
St. Lucia Teachers’ Credit Co-operative Ltd
Date of Registration
28th August 1986
Registered Office
Robert Augustin Building
No. 29 Riverside Road
Castries, St. Lucia
Postal Address
P.O.Box 1845
Castries, St. Lucia
Email Address
sltcc@hotmail.com or sltccu@gmail.com
Website Address
www.sltccu.com
Telephone Numbers
(758) 453-2538 or 451-9146
Fax Number
758) 458-1387
Regulator
Financial Service Regulatory
Authority Castries, St. Lucia
Auditor
Andrea St. Rose & Associates
Attorneys At Law
George Charlemagne
Banker
Bank of St. Lucia Ltd.
Affiliations:
St. Lucia Co-operative League Ltd.
Caribbean Confederation of Credit Unions
5
BOARD OF DIRECTORS
REPORT
YEAR ENDING DECEMBER 31, 2014.
From left to right Mr. Bartholomew Eugene, Mrs. Genefer Aulis, Mr. Peter Daniel,
Mrs. Crescentia Innocent, Mr. Peter Louisy, Mrs. Martina Belizaire and Mr. Mc orville Combie.
INTRODUCTION
The St. Lucia Teachers Credit Cooperative endeavoured to fulfill
its vision and mission during the
period under review. In carrying out
its mandate, the Board of Directors
was guided by the principles and
core values by which credit unions
were established. In 2014, the SLTCC
6
celebrated its 30th anniversary under
the theme, “30 Years of Success and
Sustainability, SLTCC; No Big Show Yet
We Grow.” This is a great milestone
which all members should be proud
of; especially our founding members
who championed the establishment
of the St. Lucia Teachers Credit Co-
operative, and for this, we will be
forever grateful for their vision.
During 2014 the SLTCC made
a concerted effort to become
compliant with all pertinent
aspects
of
the
International
Financial
Reporting
Standards
(IFRS). Accordingly, our approach to
and presentation of the financials
was revamped, thus the financials
were
restated
retrospectively.
For the year under review, the
SLTCC’s financial position grew by
all accounts. The Board of Directors
is pleased to report that the society
realized a net operating surplus
of $1.4million. This represented
an increase of 85% over 2013,
mainly occasioned by the 75%
write down of the CLICO Impaired
Investments $1,022,034 in 2013
compared to $340,678 write down
of the remainder of the Impaired
Investment in 2014, and, better loan
yields due to the improvement in
the health of the loan book . Total
expenditure saw an encouraging
decrease of 9.5% as compared to
the previous year. Assets increased
to $48 million or 6.3 % and income
increased by 6.7%.
In July 2014, the SLTCC implemented
the reclassification of shares as
mandated by a resolution passed
at the 2014 Annual General
Meeting (AGM). Shares which are
withdrawable are now reclassified
as liabilities and lodged in members’
newly created) Savings and Security
Share Account (SSSA). As with the
implementation of any new proposal,
there were minor teething problems
which
necessitated
additional
education of members. The Board
of Directors would like to thank
members for their understanding and
support during the implementation
process. The reclassification of
members’ shares has placed us in
compliance with the IAS # 32, as
well as the regulations in the pending
Cooperative and Societies Act.
Working together is essential to
achieving our goals.
The Board
has therefore endeavoured to create
an environment which encourages
involvement and participation in
decision making. Quarterly Joint
Committee meetings were held and
were always well attended with full
participation of officers present. The
BOD also held annual officers and
staff retreat to review the year and to
chart the way forward. The high level
of enthusiasm and commitment
demonstrated by officers and staff
over the last year augers well for the
future success of the SLTCC.
Camp in July 2014 and the most
talked about Credit Union Day
Lecture in October 2014. These
activities continue to grow each year
and we urge members to continue
supporting such initiatives.
The rapid growth in technology
has forced the SLTCC to upgrade its
information technology systems so
that a more efficient and reliable
service could be provided to
members. We have completed the
upgrading of the website and the
online banking will be launched
in 2015.
Work is ongoing to
facilitate the completion of the loan
application form through our online
services. Additionally, the updating of
passbooks will soon be undertaken
through printers rather than being
hand written. The Board is working
vigorously to ensure that all these
new services are be implemented
before the end of the second quarter
of 2015.
The Board of Directors thanks
the members of the Education
Committee under the chairmanship
of Ms. Crescentia Innocent for
hosting a successful Depositors
Management and Organization
Following the 29th Annual General Meeting Directors took up the following positions with assigned responsibilities
Name
Position
Responsibilities
PETER LOUISY
PRESIDENT
- Chairperson, Policy Meetings
- Liaison to the General Manager,
- Chairperson, AGM Planning Committee
MARTINA BELIZAIRE
1st VICE PRESIDENT
- Liaison to the Credit Committee
- Chairperson, Waivers/loan meetings
7
CRESCENTIA INNOCENT
2nd VICE PRESIDENT
- Education Committee
- Marketing
- League Delegate
BARTHOLOMEW EUGENE
SECRETARY
- Alternate League Delegate Minutes, Record keeping
GENEFER AULIS
ASST.SECRETARY
- Office Ambience
- Minutes
MC ORVILLE COMBIE
TREASURER
- Finance
- Investment Committee
- Shares Reclassification Project
PETER DANIEL
ASST.TREASURER
- Finance
- Information Technology
Board of Director’s Meeting Attendance – 2014
DIRECTOR
POLICY MEETING
LOANS MEETING
JOINT COMMITTEE
MEETING
Possible
Actual
Possible
Actual
Possible
Actual
PETER LOUISY
12
11
12
12
3
3
MARTINA BELIZAIRE
8
8
9
9
2
2
CRESCENTIA INNOCENT
12
9
12
12
3
3
BARTHOLOMEW EUGENE
12
10
12
12
3
3
GENEFER AULIS
12
8
12
9
3
3
MC ORVILLE COMBIE
12
12
12
12
3
3
PETER DANIEL
12
11
12
12
3
3
EZRA JOSEPH
4
4
3
3
1
1
OPERATIONS
The staff members are one of
the key driving forces behind the
success of the St. Lucia Teachers
Credit Co-operative. Therefore, in an
effort to provide efficient service to
all members we have maintained
8
a well trained and competent staff.
Additionally, the continued growth of
the SLTCC demands greater human
resources to manage its day to day
operations. Consequently, the BOD
developed a new organizational
chart which would serve as platform
for the future structure of the Credit
Union. One of the changes made
to the organizational chart was
the immediate appointment of an
accountant. In September 2014, Mrs.
Sherian Queto was hired to fill the
position of Accountant. Mrs. Queto’s
wealth of experience in accounting
and in the credit union movement
will undoubtedly serve the SLTCC
immeasurably.
The past years have realized an
increase in the number of staff
members serving our members. The
SLTCC staff has grown from a one
member to an eleven member staff.
LOAN PORTFOLIO
Loans increased from $36 million
in 2013 to $38.2 million in 2014.
This position reflected an increase
of 6.3% as compared to 5.2 %
increase of the previous year. The
high demand and increase in loans
demonstrates the confidence that
members continue to have in the
SLTCC. Our aim is to increase efforts
at improving our lending products in
order to bring greater satisfaction to
all members.
DELINQUENCY
The SLTCC has moved forcefully
towards reducing the delinquency
margin. Through our constant efforts,
delinquency has declined from
6.07% in 2013 to its current position
of 04.5%. Presently, we are below
the benchmark requirement set
out by the central bank which is <
5%. As we are aware, the effects
of delinquency can substantially
decrease the growth prospects
of financial intuitions. The BOD
is cognizant of the fact that our
members may find themselves in
situations which may affect their
ability to meet their agreed loan
agreements.
However, we urge
members who fall in these situations
to exercise a sense of responsibility
by coming to the SLTCC to discuss
the way forward at addressing your
situation. The SLTCC will endeavour
to strengthen our internal control
measures to ensure that the level of
delinquency falls even lower.
Membership
By the end of December 31st, 2014
our membership stood at 3766. The
BOD is still not satisfied with the pace
at which we are moving to increase
our membership. To this end, it has
put in place a Membership Drive
Committee which will focus on
targeting potential members. The
responsibility of attracting new
members also lies with each member
of the SLTCC. We encourage you to
spread the joy of being a member of
the SLTCC with your colleagues and
especially family members. There is
a need for all members to acquaint
themselves with the membership
policy and urge other to participate
in the financial services and products
provided by the SLTCC.
Value–Added Services
Education Assistance Fund
The SLTCC continued to support
members whose children succeeded
the 2014 Common Entrance
Examination. A total of 76 students
received bursaries amounting to
$23,320. We urge all members who
qualify for this assistance to take
full advantage of this opportunity
and apply early.
Additionally,
we would like you to profit the
opportunity in making your child or
ward a depositor and instill good
savings habit in them. Once again
the St. Lucia Teachers Union (SLTU)
collaborated with the SLTCC once
again for the presentation ceremony.
Emergency Relief and Social Fund
Following an assessment of losses
experienced by members during
the 2013 Christmas Eve Trough, the
society provided support to forty
(40) members who were severely
affected. A total of $128,982.28 was
disbursed for this purpose. The
Credit Union also assisted four (4)
members in meeting urgent medical
expenses at a total cost of $3,200.
Family Indemnity Plan
At the end of 2014, six hundred
and forty-six (646) members were
enrolled in the Family Indemnity Plan
(FIP). Nineteen (19) claims amounting
to $217 500 were settled in 2014.
The Board of Directors remains
comforted by the speed at which
claims are honored and the relief
that this service provides to members
especially in such trying times.
The Board of Directors notes that
fewer than 20% of members have
grasped this opportunity to enroll in
this valuable product. In light of this,
the Board had to address a number
of letters from grieving members,
who had not availed themselves of
this product, seeking loan assistance
to deal with meeting the high cost
funeral expenses.
The Board would like to urge all
members who have not signed
up to this product to give serious
consideration to doing so as it goes
a long way in easing the burden
of dealing with the death of a love
ones.
Life and Medical Insurance
A total of eighty-five (85) members
were covered by the Beacon
Insurance which is offered to credit
union members through the St. Lucia
Co-operative League. There was a
slight increase over the previous
year in the number of members
accessing insurance coverage. We
continue to encourage members to
use the avenues available to cater
for unforeseen medical expenses.
HUMAN RESOURCE DEVELOPMENT
The education of our officers and
staff is critical to the growth of the
9
SLTCC. For this reason, both officers
and staff were given the opportunity
to broaden their knowledge and
skills. In turn, an enhanced quality
of products and services offered
to members is expected and
demanded. Training opportunities
were done both at the local and
regional level.
STAFF / OFFICER
POSITION
TRAINING
Staff
Managerial/Non Managerial
Robbery prevention and mitigation: AML training: Staff
Deidre Biscombe
Martina Belizaire
Bartholomew Eugene
Criseyde Preville
Asst. General Manager
1st Vice President
Secretary
Chairperson– Supervisory Com.
CPD - IFRS 13:
Genefer Aulis
Veronica Henry
Neola Cadogan
Asst. Secretary
Asst./Sec.-Credit Committee
Accounts Clerk
Carib DE
OECS Summit
This year’s OECS Summit was held in Antigua from August 19th–26th 2014. The SLTCC’s delegation at the summit
included;
Board of Directors
Credit Committee
Supervisory Committee
Staff Member
School thrift Coordinator
(Gros- Islet Secondary School)
Bartholomew Eugene, Genefer Aulis
Monica Weekes
Linda Charles
Chalia Walter
Tessa Bartlette
The summit was held under the theme “Cementing the Credit Union Movement in an Economically Challenging and
Changing Environment.”
CCCU Conference
The Caribbean Confederation of Credit Union’s Annual General Meeting was held in Bahamas from June 12th –17th 2014.
The SLTCC was represented by the following;
Board of Directors
Credit Committee
Supervisory Committee
2013 AGM Raffle Winner
Peter Louisy, Ezra Joseph
Digna Medard, Priscilla Sylvest
Randie Charmon
Ginevra Lambert
The theme of this illustrious event was “Re-engineering Credit Unions for Success and Sustainability.” Attendees were
presented with vital information sharing and lectures on “How to Lead, Motivate, Inspire”, “Maximizing your potential”,
“Data and Cyber Security in an Evolving Environment”, “Seven Habits of a highly Effective Supervisory Committee” and
“Cooperation among Cooperatives”.
10
Shared Services in credit Unions
Mr. Brian John, the SLTCC General
Manager was part of a St Lucia
League delegation on a one week
familiarization tour of credit unions
in the Washington DC area in the
USA. The purpose of the tour was to
meet with other credit unions that
are using shared services to offer
improved services to their members.
It is expected that this exposure will
enable the Credit Union movement
in St Lucia to work collaboratively by
making services more accessible to
all cooperators.
SOCIAL RESPONSIBILITY
The SLTCC in fulfilling the co-operative
principal of ‘Concern for Community’
assisted schools, charitable and
non-profit making organizations
in the form of financial support
towards their activities. Some of
these activities included graduation,
donations to less fortunate children,
sporting activities and sponsorship
for educational conferences. In
addition, five (5) students from the
various school thrift co-operatives
were given full sponsorship to
attend the Caribbean Annual Youth
Conference which took place in
St. Lucia in April, 2014.
CONDOLENCES
During the year 2014, we mourned the passing of eleven (11) members,
Lena Auguste
Anne Marie Clarke
Marie Daniel
Julian Worrel
Joseph Daniel
Agatha Robinson
Eve Joseph
Helen Robert
Cyprian Simon
Paula Emile
Pamela Phulgence
Our prayers and deepest sympathies go out to their family and friends. May their souls rest in peace.
ACKNOWLEDGEMENTS
On behalf of the Board of Directors I
would like to thank all staff members
under the abled supervision of the
General Manager, Mr. Brian John
for their efforts at executing and
delivering service to the members.
I would like to express sincere
appreciation
to
the
various
organizations, at the local, regional
and international level that worked
with the SLTCC in fostering and
strengthening the credit union
philosophy. Special mention must
be made, of St. Lucia Co-operative
League and the St. Lucia Teachers
Union who have provided continued
support towards our various
initiatives.
Thanks to the staff of the Financial
Services Regulatory Authority (FSRA)
and the society’s solicitor Mr. George
Charlemagne, for their continued
guidance and support.
Heartfelt thanks to the officers of
the various committees for have
remained committed and steadfast
in serving the members of the SLTCC.
To outgoing directors, Ms. Crescentia
Innocent and Mr. Barthelomew
Eugene who have served two full
terms, thanks for your hard work
and dedication. You were a source of
strength to the SLTCC.
The Board of Directors is very elated
by the glowing performance of the
SLTCC for this year. We will remain
guided by the core international
principles which govern the credit
union movements and strive to serve
our members at improving their
socio-economic status. Therefore, we
will work assiduously at achieving
greater success in key areas outlined
in our 2013 – 2017 strategic plan.
As we approach a new financial
year, I have every confidence that all
officers will continue to demonstrate
the high level of team spirit which
prevailed in the SLTCC during 2014.
To our esteemed members, you are
our greatest asset and you have
demonstrated the true meaning of
co-operative. Therefore, I urge you
to maintain and strengthen your
financial support as you continue to
make SLTCC- Your educated choice.
On behalf of the Board of Directors
___________________________
Peter Louisy
(President)
11
TREASURER’S
REPORT
FOR THE YEAR ENDED DECEMBER 31, 2014
OVERVIEW
Notwithstanding the uptake in
global economic activity, 2014
was still a difficult one for the St
Lucian economy. Though tourism,
the main driver of the economy,
showed strong growth other sectors
continued to struggle and economic
growth remained in negative territory.
Unemployment remained high and
job creation was negligible, excess
liquidity and low interest remained
the order of the day. Financial
lending remained very conservative
about lending to the private sector
and in some instances seemed
more focused on poaching salaried
customers, the corner stone of SLTCC
membership, from competitors.
12
In spite of this difficult economic
environment the SLTCC was able to
continue along the path of growth
and profitability. Key operating areas
such as loans and deposits achieved
growth rates of 6.3% and 43.6%
respectively. Investment interest saw
a 19% increase. Net income came in
at $1.4 million.
The society by year end had
completed the reclassification of
member’s shares in order that
they comply with the International
Accounting Standard (IAS) # 32.
This activity necessitated the
restatement of the previous year’s
financial statements. The society
also made other changes to its
accounting processes to ensure that
they fully complied with International
Financial Reporting Standards (IFRS).
These changes are included in 2014
audited financial statements with
appropriate notes to explain them.
FINANCIAL PERFORMANCE
Assets
At year end the society’s assets
amounted to $47,889,572 an
increase of $2,827,470 (6%) on
the previous year. This figure
excludes the write off of final 25%
($340,678) of the impaired CLICO
Investment.
Net Loans and Advances to members
grew to $38,302,170 an increase of
$2,094,906 (6%) over the previous
year. This was in spite of the society
having four months where cash
inflows for loans were higher than
outflows. The competitive offering
to members particularly from the
banking sector and members
being highly leveraged are two
factors which the society will have
to grapple with for some time to
come. Growing and diversifying
membership and collaborating with
sister credit unions are two strategies
that readily come to mind in dealing
with these challenges.
The Delinquency Ratio at year end
was 4.5%, down from 6.07% from
the previous year and within the
PEARLS benchmark ratio of 5%. This
goal was achieved through the write
off of loans (($265,214) 365 days
and over; a concerted effort by the
society to ensure that there were no
new delinquents and where there
were new delinquents they were
pursued vigorously.
Liabilities
On July 01, 2014, the society
reclassified members’ shares in
order to comply with IAS 32. Shares
which are withdrawable are now
classified as liabilities and placed
in members’ newly created Savings
Security Share Accounts (SSSA). The
SSSA opened with 5,655,510 shares
valued at $28,277,550 ($5 par value).
At year end these shares amounted
to 5,739,396 and increase of 83,886
with a value at $28,696,980.
Deposit grew by $888,414 (43.6%)
to $2,926,850 up from $2,038,436 in
the previous year. This huge increase
was due primarily to payment, for
the first time, of interest on the SSSA
for the July – December 2014 period.
Equity
On July 01, 2014, following the
reclassification of members’ shares,
equity shares; those the society
has ‘the right to refuse redemption,’
numbered 559,887 and had a value
of $2,799,435 ($5 par value). At
year end, these shares amounted to
580,689, an increase of 20,802, with
a value of $2,903,445.
The year end value of equity shares
amounted to 6% of total assets, which
is 1% above the 5% mandate of the
pending Co-operative and Societies
Act (section 97 sub-section 3). The
society cannot “pay a dividend or
make any payment on account out
of profits” if equity shares fall below
5% of total assets (section 129 subsection 2[b]). This means that the
society needs to ensure that it has
in place a strategy to ensure that its
equity shares grows proportionally to
assets if it is to be in a position to
pay dividend and patronage refund
to members.
Income
For the year end 2014, total income
was $4,570,931 which was up
$287,116 (6.7%) on the previous
year. Loan interest income (93%) and
Investment income (5%) remain the
largest contributors and demonstrate
the level of the society’s dependence
on theses to income streams. This
highlights the need for the society to
find ways of diversifying its income
sources.
Operating Expenses
Total operating expenses for the
year amounted to $1,745,179 a 24%
increase over the previous year. The
areas making the largest contribution
to this were: Occupational Expenses
a 64% increase, and Operational and
Personnel expenses both with 23%
increases.
The huge increase in Occupational
expenses was due to the leasing of
a fibre optic line which is necessary
for the online banking venture.
Personnel Expenses increases were
due to salary increments for staff and
the increase in staff complement to
strengthen back office operations
and service to members. Operating
Expenses increases were due to the
Emergency Relief payout to members
who suffered from the 2013
Christmas Trough as well as for the
first time under Operating Expenses,
payments from the Education Fund.
The society’s Auditor has advised,
that notwithstanding those monies
in Members’ Fund (Education Fund,
Building Fund and Emergency
Relief Fund) have been used for the
purpose for which they have been
established, IFRS requires that they
must be shown as an expense.
Hence it has been so recognized in
the 2014 statements and will be so
done going forward.
Net Income
Notwithstanding
the
23.5%
increase in operating expenses,
the huge reduction in allocation
for impairments (70%) allowed the
society to experience a net income of
$1,359,168, an increase of $625,616
(85%).
PEARLS Ratio
The PEARLS ratios have been
developed specifically for assessing
the performance of credit unions.
Following is a table rating the
performance of the SLTCC in some
of the more important benchmarks
in that scale. For 2014 the Society
received a rating of 1.4 which is just
short of the top rating of 1. Members
can be assured that those areas
needing attention will be focused on
in the new financial year.
13
PEARLS
DISCRIPTION
2014
2013
2012
GOAL
100%
100%
100%
100%
Protection
P1
Allowances for loan losses/allowances required
for loans delinquent> 12months
P2
Net allowances for loan losses/Allowances
Required for Loans Delinquent less than 12 months
49%
47%
54%
35%
P6
Solvency
Effective Financial Structure
Net Loans/Total Assets
Savings Deposits/ Total Assets
Member Share Capital/Total Assets
Institutional Capital/Total Assets
Asset Quality
Total Loan Delinquency / Gross Loan Portfolio
Non-Earning Assets /Total Assets
Rates of Return and Costs
Net Loan Income /Average Net Loan Portfolio
Financial Cost: Savings Deposits /Average Savings
Deposit
Financial Cost: Members Shares /Average Members
Shares
Total Operating Expenses/Avg. Total Assets
Net Income /Average Total Assets
Liquidity
Liquidity Reserves/Savings Deposits
Non-Earning Liquid Assets /Total Assets
Signs of Growth
Growth in Loans to Members
Growth in savings deposit
Growth in share capital
Growth in membership
Growth in total assets
138%
137%
137%
100%
80%
66%
6%
22%
80%
66%
6%
21%
81%
64%
6%
21%
70-80%
70-80%
≤20%
≥10%
5%
5%
6%
5%
6%
8%
≤5%
≤5%
11%
11%
11%
>10%
3%
4%
4%
>inflation*
7%
4%
3%
8%
3%
2%
8%
3%
5%
≥R5
<10%
>1%
12%
0.51%
13%
0.19%
9%
0.16%
10%
<1%
6%
7%
6%
2%
7%
8%
9%
4%
6%
6%
10%
8%
4%
4%
10%
=S11
>11%
≥ 5%
>5%
>inflation*
E1
E5
E7
E8
A1
A2
R1
R5
R7
R9
R12
L2
L3
S1
S5
S7
S10
S11
Outlook
Though the expectation is that
economic growth will move into
positive territory in 2015; that
growth is not expected to cause any
dramatic changes in the financial
environment. The society’s task will
remain the same – help members to
improve their financial position and
achieve their financial goals. This will
be accomplished through very close
monitoring of operations to improve
14
efficiency and control risk as well
as providing members with needed
products and educating them about
their financial choices. SLTCC has
proven its resilience by posting a
surplus in challenging times and we
have every intention to continue to
do so.
staff for their continued cooperation
and support.
Acknowledgement
My gratitude and thanks to my fellow
directors, officers, management and
_________________________
Mc. Orville Combie
Treasurer
CREDIT COMMITTEE
REPORT
Mrs. Digna Medard
Chairperson
Mrs. Veronica Henry
Secretary
Mrs. Priscilia Sylvest
Ms. Charmaine Pierre
Mrs. Monica Weekes
INTRODUCTION
At the 29th Annual General Meeting
(AGM) of the St. Lucia Teachers’
Credit Cooperative (SLTCC) held on
April 2014 Mrs Monica Weekes was
elected to a three year term on the
Credit Committee (CC). She replaced
Mrs. Hyginna Roachford who ended
her second consecutive term as a CC
officer. Mrs Weekes brings a wealth
of experience having previously
served on the CC. For the year
2014, the Committee comprised the
following officers:
Mrs. Digna Medard
Mrs. Veronica Henry
Ms. Charmaine Pierre
Mrs. Monica Weekes
Chairperson
Secretary
Loan approval meetings and loan
processing activities conducted
alongside fulltime loan officers,
continued on Wednesdays and
Saturdays respectively, except on the
fourth Saturday of every month, on
which day there was no business.
Participating in the loan processing
activities gave CC officers the
priceless opportunity to interact with
the general membership and get to
know their needs better.
LOANS
Members continued to make use of
the various loan facilities offered by
ST. L UCIA T E ACHE RS’ CR E DIT CO-COPE R AT IV E LT D. 2014 ANNUAL R EP ORT
Se r vic e • A ttitud e • Va lue • E mp at hy
15
the society. This led to a successful
year even in the face of the tough
global economic challenges. The
aggregate loans disbursed for
the year 2014 amounted to $16,
820,284.30 (see tables and charts
for more details on loan activity
for the period). A total of nine loan
applications were denied.
Table 1 highlights the various categories of loans for the period 2012, 2013 and 2014. Personal loans continue to
dominate the loan portfolio, representing 42% of total loans for the period.
Table 1
Total loans disbursed for the periods 2012, 2013 and 2014
Loan Purpose
2014
2013
2012
Amount ($)
No.
Amount ($)
No.
Amount ($)
No.
2,834,652
254
2,538,130
248
2,702,464.44
320
913,238
11
514,421
11
639,845.68
15
Personal
6,997,213
1,950
6,503,965
1,618
6,413,842.29
1,604
Vehicle
2,304,584
181
2,157,415
175
2,156,299.27
192
735,378
38
784,179
46
701,242.36
49
3,035,220
655
2,631,749
668
2,663,312.68
705
16,820,284
3,089
15,129,859
2766
15,277,006.72
2885
Housing
Land
Business
Education
Total
The pie chart further illustrates the various categories of loans disbursed for the year 2014 as well as the composition
of the personal loans disbursed for that period to allow for further analysis.
LOANS DISBURSED BY CATEGORY - 2014
16
The table below represent a detailed analysis of personal loans for the years 2012,2013 and 2014 in terms of amount
and number of loans disbursed
Table 2: Personal loan for 2012,2013 and 2014
2014
Personal
2013
2012
($) Amt
No.
($) Amt
No.
($) Amt
No.
Living
2,047,152
961
1,900,537
664
1,806,303.44
688
Debt Consolidation
1,379,009
79
1,619,244
96
1,460,643.61
98
Vacation & Travel
556,775
116
855,002
171
869,229.71
163
Wedding/Funeral/Medical
988,222
227
1,011,246
201
917,430.32
246
1,088,448
509
961,845
452
795,494.35
383
16,200
5
20,948
8
39,946.00
13
921,407
53
135,143
49
524,794.86
13
6,997,213
1,950
6,503,965
1,618
6,413,842.29
1,604
Christmas
Computer Purchase
Other Loans
Total
Special Loans
The Back-to-School and Special Christmas loan promotions were offered and were accessed by many members most of
whom are regular customers for these products. Also, the newest loan product, the Soukou loan increased in popularity
as the year progressed. (Refer to Table 3)
Table 3 Special loans disbursements for the periods 2012, 2013 and 2014.
Back to School
Christmas
Soukou
B. Ed
2014
2013
2012
$956,307
$778,271
$861,016
$1,088,448
$961,846
$794,744
$76,430
$300
Nil
$106,704
$135,677
Nil
HUMAN RESOURCE DEVELOPMENT/TRAINING
Credit Committee officers participated in professional development activities financed by the SLTCC in order to improve
the quality of service to members and for the general growth and development of the society as a whole.
Table 4 Professional Development Activities Attended by CC Officers during 2014.
Activity
Name of Officer(s)
Venue
Date
Caribbean Confederation of
Credit Unions (CCCU)
Mrs. Digna Medard
Nassau, Bahamas
Jun 21 - 25, 2014
Organisation of Eastern
Caribbean States (OECS) Summit
Mrs. Monica Weekes
Antigua
Aug. 13 - 17, 2014
CARIB DE
Mrs. Veronica Henry
Castries, St. Lucia
Sept. 21 -26, 2014
17
SLTCC Loans Summit
Mrs. Digna Medard
Mrs. Veronica Henry
Mrs. Monica Weekes
Castries,
St. Lucia (SLTCC’s Office)
Nov. 6, 2014
Recommendations
The following recommendations are not very different from previous years. Members are urged to pay closer attention to
them as adherent can result in a more beneficial and pleasurable experience when doing business at the SLTCC.
1. Allow your shares to grow
(Permanent Shares and Saving
Security Share Account-SSSA).
2. Present your most recent salary
slip (no more than three months old)
and other relevant documents when
applying for a loan.
3. Be VERY wary of quick cash
financial institutions.
4. Always monitor your debt-service
ratio. Talk to your loan officer.
5. Take advantage of the free
financial counselling offered by the
SLTCC, especially when venturing into
major investments.
18
6. Explore viable and
business opportunities.
feasible
year and wishes them a productive
2015.
7. Be honest and open during your
loan interview. Your loan officer is
there to help you.
8. Ask questions about your Credit
Union – It is YOUR Business!
CONCLUSION:
Notwithstanding the economic
challenges experienced globally
in 2014, CC worked efficiently in
assisting members to realise their
dreams although some difficult
decisions had to be taken at times.
CC takes this opportunity to thank all
members for their continued support
and co-operation during the past
Save well! Spend wisely
__________________
Digna Medard
Chairperson
SUPERVISORY COMMITTEE
REPORT
From left to right Mr. Marie George-Arlain, Ms. Linda Charles,
Mr. Randie Charmon, Mrs. Martina Gajadhar, Mr. Criseyde Preville
The Supervisory Committee (SC)
conducted its duties as outlined
by the statutes that govern Credit
Unions and the By-laws of the St.
Lucia Teachers’ Credit Co-operative
Ltd (SLTCC). In an effort to conduct
its internal audit review more
effectively the SC expanded its scope
of emphasis to include: meetings
with the Board of Directors (BOD),
Education Committee, Management
and Line Staff and observation of BOD
meetings. These activities provided
the Committee with first hand
information on the BOD’s strategic
plan for the SLTCC and updates on
initiatives that were undertaken.
Internal Controls/ Policy
The SC upon review of members’
loans observed a member shift from
19
conducting business with SLTCC to
forge business transactions with
competitors whose offerings were
more competitive. Many such cases
were persons who were seeking
land and house mortgages. The
SLTCC’s current position cannot yet
measure to the interest rates that its’
competitors offer, which resulted in
the regrettable loss of some clients
or major parts of their business.
The area needs further thinking
and initiatives so as to provide
opportunities that would harness the
business of members, and as well,
meet their varying needs.
The
implementation
of
the
permanent share and Security and
Savings Share Accounts (SSSA)
were established. The widespread
campaign to educate members on
the subject proved effective as the
number and nature of complaints
were kept to a minimal. Albeit,
the branch exercised outstanding
expertise in explaining to members
the changes, as well as subduing
their financial anxiety, when they
approached the counter.
The SC continues to advocate that
creative initiatives be explored to
attract the underserved so as to
increase the loan portfolio. The
assumed reciprocating effect would
be an overturn in any negative
financial outcome that the inevitable
loss of clients may cause. It is
incumbent therefore on the SLTCCC
that more flexible options be
explored including interest rates, and
diverse products in an effort to better
assist members and satisfy their
needs.
Delinquency remains an inevitable
area of concern for the SLTCC. The
SC has continued to carry out due
diligence on the matter by constantly
20
monitoring the branch’s progress in
curtailing the delinquency rate. The
SC has noted that the rate is trending
downward in all areas. The SC has
kept a close eye on the numbers,
age of loan, loan amount and loan
securities by liaising frequently
with the General Manager
on
those matters. The SC recognizes
the painstaking effort of the SLTCC
General Manager to mobilize the
staff to arrest the delinquency plight
to realize a delinquency rate of
4.65% for the 2014 fiscal year, which
is below the benchmark prescribed
the Eastern Caribbean Central Bank
-a remarkable feat considering the
position of the previous two years.
This has had cascading effect on the
provisioning required for loan losses
and has contributed to the surplus
that was realized in the same period.
The SC, while reviewing new and
existing loans has observed cases
where loan securities inadequately
cover the loan amount. This
occurrence has invoked much
discussion by all parties and that
of the legal advisor, as the by-laws
seem to be ambiguous. As such,
the Committee has articulated the
amendment to the loans policy
outlined in the by-laws to include
a clause that specifies the society’s
position on required loan security for
all members, officers and staff.
The volatility of the economy
necessitates
that
all
SLTCC
investments be financially prudent.
Investments that afford the highest
return on assets with minimal
operating cost and afford safe
repayment seem the astute way
forward for the SLTCC. The SC
is satisfied that the SLTCC has a
careful mix of Investments without
over concentration in any particular
instrument type.
Regular review of the society’s records
and information were conducted and
recommendations were made to the
relevant personnel.
Routine cash counts were carried
out. Generally there were no outages
however there was concern about
transactions with US$100 and $50
currency. Upon recommendation
from the SC the society has ceased
transactions
involving
those
denominations.
Membership growth
During 2014 growth in membership
has been marginal. Discussion with
the BOD, Education Committee
and Management emphasized
the need for the SLTCC to explore
diverse strategies that are relevant
and accessible to stakeholders to
improve that situation. The current
economic status, as well as, the
aggressive marketing strategies
of competitors may have factored
in the flat growth rate for 2014.
Consequently, it behooves the
SLTCC to work expeditiously and
strategically to capture the eligible
non-member population.
Performance
Management did an outstanding
job of controlling expenses and
executing initiatives, which despite
some loan losses resulted in more
than expected total income and
surplus. On the employment of
$47.890M in total assets, Total Income
of $4.571M was derived, and, this
was less than the budget figure of
$4.590M due to the SLTCC’s adoption
of the accruals basis of accounting
and the adjustment necessary
for loan interest accruals as at
December 31, 2013 and December
2014. However, the 2014 results of
4.571M was better than the position
attained last year of $4.192M. Thus,
with measured control of expenses
the SLTCC realized a surplus of
$1.359M
after allowance had
been made for Education Expenses
for training $238K and Emergency
Relief Expense $132K and Loss on
Investments Written Down $341K;
the Education Expense for training
and the Emergency Relief Expenses
were previously applied directly to
Reserves.
Training
SC attended training sessions that
better equipped them to conduct
their duties. Notwithstanding, it
was generally agreed that further
training sessions are needed in key
areas of audit function to enable
the Committee to better execute its
responsibilities. Legislation governing
credit unions mandates that the SC
exercise due diligence in performing
its functions to keep the society in
strict compliance with regulatory
standards. Also, this helps to ensure
that internal controls are maintained
so that external auditors have few
exceptions when performing the
external audit. SC was represented at
the Fair Value training session to gain
greater insight into how the SLTCC’s
assets can be valued in a fair market,
as well as, to understand and
interpret instruments that members
may present as security for loans.
The SC engaged in a day’s
training activity that focused on
the responsibilities of the SC. The
activity was deemed quite relevant
and insightful especially with the
understanding that the committee’s
designation
also
implies
a
responsible for performing internal
audit functions and compliance.
There was consensus that the
scope of the SC is far reaching as its
mandate is to investigate every facet
of the organization. It is against this
backdrop that the SC developed a
work plan that included meetings
with sub groups of the organization
in an effort to enhance its’ monitoring
of internal controls. Further training
in Audit and Compliance is crucial
to the SC, especially now that
the Credit Union’s landscape and
indeed that of the industry is quickly
changing. The committee needs
to be well equipped with the skill
set that would make its members
keen and analytical observers, who
would intervene with appropriate
recommendations that facilitate the
adherences to the standards of the
FSRA and other regulatory entities.
The SC’s goal is to ensure that the
SLTCC remains a leader among
Credit Unions in Operations, financial
growth and member satisfaction.
Conclusion
The SC commends all who
contributed toward the achievements
of the SLTCC in the past year.
Despite the inevitable changes
of restructuring member share
capital and operations, the society
pooled a creditable profit margin.
Notwithstanding, there are greater
feats to be explored which would
require determination, innovation
and tact to withstand the opposing
forces of a volatile economy and
hardline competitors.
Criseyde Preville – Chairperson
Acknowledgements
The SC would like to thank the
SLTCC team for their cooperation and
assistance in facilitating the work of
the committee. Although at times
the new approach in conducting
its Audit function was sometimes
misconstrued the SC is grateful to the
BOD, Management and Staff for their
willingness to meet with the SC and
provide the documents and updates
that were requested. The committee
has been humbled by the confidence
that the membership has shown to
allow us to serve you in this capacity.
The SC will endeavor to keep a close
watch on your investment and
ensure that this organization remains
resilient and financially progressive
amidst wavering economic status.
21
EDUCATION COMMITTEE
REPORT
Ms. Crescentia Innocent
Mr. Roland Branch
Ms. Tonisia Charles
Mrs. Valerie St. Helene-Henry
Chairperson
The Education Committee comprised the following individuals:
Ms. Crescentia Innocent
Mrs. Valerie St. Helene-Henry
Ms. Tonisia Charles
Mrs. Sandy Louisy
Mr. Roland Branch
Mr. Travis Weekes
Ms. Constance René
22
- Chairperson
- Secretary
Secretary
The committee sought to undertake
a number of programmes and
initiatives geared towards the
development of the SLTCC. These
activities included:
Bachelor of Education (B. Ed) Loan
Soiree
This first time event targeted
members who were under the age
of 30 years who were considering,
full time or part time study for a
Bachelor of Education degree at the
Sir Arthur Lewis Community College
(SALCC). The soiree was held in the
evening on June 18 2014 on the
grounds of the SLTCC. Approximately
30 persons attended.
Presentations were made by the
following persons: General Manager
Mr. Brian John and loans officer Mr.
Nicholas on ‘Procedure for accessing
the B. Ed Loan’; Treasurer Mr. Mc
Orville Combie shared on the topic
“Budgeting and Finance” as it relates
to making sacrifices as a student
studying for a degree; First Vice
President Mrs. Martina Belizaire
provided useful tips on studying
with a special focus on preparation
necessary before and during the
undertaking of a degree programme.
Each presentation was followed by a
period for questions and sharing of
experiences of the participants.
At the end of the session they were
served refreshments and had an
opportunity to mingle and socialize
with officers to obtain further
clarification about the B. Ed Loan.
Feedback from participants on the
activity was positive.
Depositor’s Camp
The SLTCC had another successful
hosting of its annual Depositor’s
Camp. Directed at students in school
thrifts which deposit with SLTCC and
depositors in SLTCC the camp was
held July 21st - 25th, 2014. A record
number of 79 participants from
around the island converged on the
Ave Maria Primary School to engage
in social, cultural and educational
activities centred around the camp’s
theme: “ Thirty years of success and
sustainability, No big show yet we
grow”. One of the highlights of the
camp was the jingle competition.
Three of the entries received were
quite creative and it was decided
that the winning piece be used to
promote SLTCC business.
Education Assistance Scheme
Seventy five children/wards of
members of the society, who were
successful in the Common Entrance
Examinations, received bursaries
under the society’s Education
assistance Scheme. Once again the
SLTCC joined the St Lucia Teachers
Union (SLTU) in hosting a ceremony
to present the bursaries to the
children/wards of their members
who passed the Common Entrance
Examinations. This ceremony was
held on Friday August 1st, 2014 at
the St. Aloysius Roman Catholic Boys
Schools. Students were address by
the presidents of SLTCC and SLTU Mr.
Peter Louisy and Mr. Julian Monrose
respectively and Mrs. Catherine
Leon, principal of the Vide Bouteille
Secondary School who was the
keynote speaker.
Publications
This year saw the SLTCC contribute
articles to several publications to
promote the advancement of SLTCC
as a primary finance option. “No big
show yet we grow” was contributed
to a University of the West Indies
(UWI) publication at the Sir Arthur
Lewis Community College in October
2014. One of the main goals was to
raise continued awareness of the B.
Ed loan facility available to teachers.
On June 23, 2014, “30 years of
success and sustainability: No big
show yet we grow” was published
celebrating the achievements of the
last 30 years of the SLTCC. It exposed
members to aspects of the SLTCC that
may have formerly been unknown.
“SLARP, SLTCC, born of necessity
from Mother Need” was targeted
towards pensioners and provided an
idea of the synergy that is created
with being a part of the SLTCC. This
article highlighted the commonalities
of the road travelled by both
organizations and the overlap of
founding members. (SLARP: St. Lucia
Association for Retired Persons)
To continue with the modernization
of the SLTCC’s image and its quest
for continued improvement, several
of our marketing paraphernalia has
been updated. Flyers and brochures
promoting the services offered have
been improved. The new SLTCC
website was also launched to
reach the current and prospective
members of the SLTCC and a running
advertisement
displaying
the
products and services of SLTCC can
be seen whilst at the office.
Co-operative Month Activities
In recognition of Teachers’ Week
which is observed in the first week of
October, which is also Co-operative
Month, the SLTCC on Tuesday 7th
October, 2014 hosted a health fair
for its members, who came in to
transact business. Members’ blood
pressure; body mass index and
blood sugar were tested. Members
were also given health tips and
handed brochures on how to care for
themselves better. This activity was
conducted in the SLTCC backyard by
nurses of Saint Lucia Diabetic and
Hypertensive Association with help
from our dedicated staff members.
23
International Credit Union Day was
observed on Thursday 16th October
2014 under the theme:
“Local Service, Global Good.”
Members were treated with snack
plates and a drink at the office. Later
in the evening members, officers
and staff gathered at Golden Palm
Conference Centre for the annual
Credit Union Day Lecture which was
followed by cocktails. The guest
speaker was Mr. Milton Hunt, the
C.E.O of Hunt International. Members
from all districts were in attendance.
Community Outreach
The SLTCC, during its “Share the
Love” promotion extended its heart
and love to less fortunate children in
various schools around the island.
It started in September, 2014 when
the society obtained the names
of two to three students from
24
schools in Castries and Vieux-Fort
who needed assistance with the
purchase of school supplies, food
and transportation. A love offering
was made to each child in the
form of monetary assistance. The
initiative was aimed at keeping our
visibility and presence within our
community and around the island as
promoted by the previous education
committee.
The promotion will continue into
2015.
Youth Conference
The St. Lucia Cooperative League is
the host to the annual Caribbean
Youth Conference which is normally
held at the Archbishop Kelvin Felix
Pastoral Centre at Marisule during the
first week of the Easter vacation in
April. The 2014 conference was the
10th anniversary of the conference.
SLTCC contingent comprised of
students; Shakima Alphonse, Janique
Raymond, Nathan Daniel, Kathleen
Gill and Kora St. Rose. They were
accompanied by SLTCC staff member
Ms. Tonisia Charles. The students
engage in educational, cultural and
social activities involving the credit
union movement.
Submitted
Crescentia Innocent
LEAGUE DELEGATE’S
REPORT
The League has made steady progress in most of its planned activities. The following summarizes
the major activities of the St. Lucia Co-operative Credit Union League for 2014:
ADVOCACY OVERVIEW
Meeting with Heads of
Government
The St. Lucia Co-operative Credit
Union League Ltd met with the Prime
Minister of St. Lucia to apprise him of
the Movement’s new thrust towards
sector and economic recovery. The
Prime Minister expressed great
enthusiasm in the revived initiative
and indicated the willingness of
the government to assist the League
in its efforts to meet the social and
economic needs of members. The
meeting was deemed successful
as a number of pertinent matters
were discussed. These included
the need for enabling legislation to
facilitate the League’s new direction
and the progress of the forthcoming
legislation.
The League continued to liaise with
the Financial Services Regulatory
Authority (FSRA) and the Legal
Drafting Unit at the Ministry of
Legal Affairs. It was communicated
that the OECS Harmonized Cooperative Societies Bill has been
given priority and is expected to be
enacted in 2015. The Regulations
are currently being reviewed by FSRA
for enactment subsequent to the
enactment of the Bill.
Credit Union
CCCU Convention
The Caribbean Confederation of
Credit Unions (CCCU) held its 57th
Annual International Convention and
43rd Annual General Meeting at the
Atlantis Paradise Island in Nassau,
Bahamas from June 21 – June 24,
2014. The convention and AGM was
attended by a contingent of forty (40)
St. Lucians. St. Lucia remained in
good standing in relation to dues.
OECS Summit
The Antigua & Barbuda Co-operative
League hosted the 12th Annual
OECS Credit Union Summit from
August 13 – 17, 2014 under the
theme “Cementing the Credit Union
movement in an economically
challenging
and
changing
environment”. The annual Summit
was attended by a contingent of
thirty eight (38) St. Lucians.
OPERATIONAL OVERVIEW
National Co-op Venture
Amidst the global and national
financial pressures facing its
members, the St. Lucia Co-operative
Credit Union League embarked on a
new industry renewal phase which
will facilitate future growth and
expansion for the credit union sector
1. National Farmers and General Workers Credit Union
2. West Coast Credit Union
3. Royal St. Lucia Police and Allied Services Credit Union
through the provision of modernize
services. This new league model
introduces three business units of
the League; a Credit Union Service
Organization, a modernized Central
Finance Facility and a Research &
Information Communication and
Technology Unit. To complement
this new venture the League, with
financial support of its affiliates, on
September 2, 2014 acquired the
former Canadian Imperial Bank of
Commerce located on the William
Peter Boulevard in Castries. The
renovated property will be called The
“Credit Union House”.
Disaster Recovery Efforts
Contributions were solicited from
external affiliates after the 2013
Christmas Eve Trough to assist
in disaster recovery efforts. The
League was able to collect in total
EC$31,944.70 from the Caribbean
Confederation of Credit Unions and
the Grenada Co-operative League.
A total of sixty two (62) relief claims
were received from three credit
unions namely:
No. of Claims Received
36
20
6
25
At a presentation ceremony held
at the Leagues office in December
2014, credit unions were presented
with cheques equivalent to five
hundred dollars for each affected
member. The balance of the funds
was placed in the League’s Disaster
Fund.
2014 Christmas Promotion
The St Lucia Co-operative Credit
Union League staged its first
Christmas Promotion which was
geared towards raising credit union
awareness during the 2014 festive
season. On December 15, 2014 the
first ten members who transacted
business at any credit union became
eligible to take part in the League’s
Christmas draw with a chance to win
a $1,000 shopping spree at Super J.
The draw was held on December
22, 2014 and the lucky winner was
a member of the St. Lucia Teachers’
Cooperative Credit Union.
Credit Union Advertisement
The Credit Union Movement
through the League launched an
advertisement campaign on October
28, 2014 under the theme “My
Credit Union Is Me”. In an attempt to
provide further public awareness, the
League led an initiative negotiating
with Media Zone for an attractive
50% discount package inclusive of
production and airtime for individual
credit union advertising.
FINANCIAL OVERVIEW
League Dues
At its first Delegates’ meeting for
the year, March 8, 2014, delegates
approved the new fee structure.
Affiliates will with immediate effect,
now pay 0.08% of total assets in
fees. .
REDIP Loan
The League made a request to
The Ministry of Finance for the
longstanding long-term debt of
$1,454,739.90 under the REDIP
Project to be converted to contributed
capital. The request was granted to
the League.
Youth Conference
The 10th Annual Caribbean Youth
Conference was held from April 2326, 2014 at the Archbishop Kelvin
Felix Archdiocesan Pastoral Centre
under the theme - “Youth and Cooperative Building a Secured Future”.
The conference recorded fifty-nine
participants who hailed from the
islands of Barbados, Bahamas and
St. Lucia. Participants engaged in
sessions on Co-operative History/
Principles, Volunteerism and Anger
Management.
The
participants
also participated in debates on Cooperative issues and various social
activities which included sightseeing
and sports.
Table 1: Youth Conference participant
Year
2014
Participating Islands
3
Co-operative Month
Credit Union Day was celebrated
on October 16, 2014 under the
theme ‘Local Service, Global Good’.
In observance of Credit Union
Day the League collaborated with
Consolidated Foods Limited as Gold
Sponsors for the 2014 Yoplait Cancer
Walk.
In keeping with one of our Cooperative Principles “Concern for
Community” the St. Lucia Cooperative Credit Union League
partnered with Consolidated Foods
Limited as a gold sponsor in the fight
against breast cancer. The League
contributed $5,000.00 in cash and
26
Participants
Local Participants
Regional Participants
59
45
14
kind towards this worldwide Walk for
Cancer.
CaribDE 14
The
Caribbean
Development
Education Program (CaribDE) held
its 14th session in St. Lucia from
September 21 - 27, 2014 at the
Benedictine Nuns - Villa Santa
Maria, Coubaril Castries. The forty
participants came from the islands
of Bahamas, St. Vincent, Trinidad,
Guyana, Barbados and St. Lucia
which had the highest number
of participants. As voiced by the
coordinators of this programme
CaribDE 14 was the first class in
five year history of the programme,
where participants were addressed
by a sitting Prime Minister - the
Honorable Dr. Kenny Davis Anthony.
……………………………………..
Crescentia Innocent
Delegate
……………………………………..
Bartholomew Eugene
Alternate Delegate
2014
Staff
and officers Retreat
2014
REVIEW
30th
Anniversary
Brunch
2014
REVIEW
Credit Union
Day Lecture
2014
REVIEW
B ED LOAN
SOIREE
St. Lucia Teachers’ Credit
Co-operative Limited
FINANCIAL
STATEMENTS
December 31, 2014
(expressed in Eastern Caribbean dollars)
31
Independent Auditors’ Report
Financial Statements
Statement of Financial Position
35
Statement of Income
36
Statement of Comprehensive Income
37
Statement of Changes in Equity
38
Statement of Cash Flows
40
Notes to the Financial Statements
41
ST. L U CIA T E ACHE RS’ CR E DIT CO-COPE R AT IV E LT D. 2014 ANN UAL R E P ORT
Se rvic e • A ttitud e • Va lue • E mp at hy
33
34
ST. L UC I A TEA C HERS ’ C RED I T C O - C O PERATI VE LT D. 2014 ANN UAL R E POR T
S e rvice • A ttitu de • Val u e • Empathy
ST. LUCIA TEACHERS’ CREDIT CO-OPERATIVE LIMITED
St. Lucia Teachers' Credit Co-operative Limited
As of December 31, 2014
As of December 31, 2014
(Expressed In Eastern Caribbean Dollars)
2014
$
2013
$
(Restated)
2012
$
(Restated)
3,569,687
3,971,123
221,301
38,302,170
98,805
1,726,486
3,659,571
3,180,992
213,515
36,207,264
128,339
1,672,421
1,728,287
4,363,328
277,530
34,423,786
58,898
1,608,048
47,889,572
45,062,102
42,459,877
2,926,850
28,696,980
–
183,223
2,038,436
27,551,545
–
105,819
1,640,445
25,511,215
232,123
61,589
31,807,053
29,695,800
27,445,372
2,903,445
14,652
1,716,121
5,923,343
104,636
–
5,420,322
2,739,420
44,716
1,817,939
5,650,589
36,678
–
5,076,960
2,624,595
108,730
2,026,900
5,502,519
–
13,828
4,737,933
Total equity
16,082,519
15,366,302
15,014,505
Total liabilities and equity
47,889,572
45,062,102
42,459,877
Notes
Assets
Cash and cash equivalents
Investment securities - loans and receivables
- available-for-sale
Loans and advances to members
Accounts receivable
Property and equipment
5
6
6
7
9
10
Total assets
Liabilities
Members’ deposits
Members’ savings and security shares accounts – SSSA
Borrowings
Accounts payable and accruals
11
12
13
Total liabilities
Equity
Members’ shares
Revaluation reserve
Members’ funds
Statutory reserve
General risk reserve fund
Capital grant
Retained earnings
14
20
16-18
15
19
Approved by the Board of Directors on June 22, 2015
____________________________________ Director
___________________________________ Director
The notes on pages 7 to 37 are an integral part of these financial statements.
(1)
35
Statement of Income
For
the year ended
December 31, 2014
Statement
of Income
For the year ended December 31, 2014
Notes
Interest income
Interest on loans
Interest on investments
Interest expense
Interest on members deposits
Interest on savings and security shares accounts - SSSA
Net interest income
2014
$
2013
$
(Restated)
4,240,328
249,179
3,982,543
209,295
4,489,507
4,191,838
(55,948)
(928,938)
(44,054)
(949,435)
(984,886)
(993,489)
3,504,621
3,198,349
26
81,424
91,977
Impairment losses - loans and advances to Members
8
(141,020)
(122,173)
Loss on investments written down
6
(340,678)
(1,022,034)
Other income
Non-interest and operating expenses
Operating expenses
Personnel expenses
Marketing expenses
Occupational expenses
Board and committee expenses
CUNA insurance
Bank charges
Net surplus for the year
21
22
23
24
25
3,104,347
2,146,119
606,082
481,452
88,971
253,165
116,356
190,466
8,687
492,567
391,154
77,391
154,293
108,631
180,463
8,068
1,745,179
1,412,567
1,359,168
733,552
36
ST. L UC I A TEA C HERS ’ C REDI T C O -C O PERATI VE LT D. 2014 ANNU AL R E POR T
S e rvice • A ttitu de • Val u e • Empathy
(2)
2014
$
2013
$
(Restated)
1,359,168
733,552
Unrealised loss on available for sale investments
(30,064)
(64,014)
Total comprehensive income for the year
1,329,104
669,538
Net surplus for the year
Other comprehensive income
Other comprehensive income to be reclassified to
profit or loss in subsequent periods:
(3)
37
38
–
–
312,946
903,175
–
–
–
135,917
–
–
–
–
–
–
–
–
–
–
– (237,735)
–
–
–
–
312,946 1,004,993
–
–
920
–
–
271,834
–
–
–
–
–
500,000 5,923,343
(132,182)
–
–
–
–
–
132,182
–
–
–
–
500,000 5,650,589
104,636
ST. L U C I A T EAC H ERS ’ C REDI T C O- C OP ERAT I VE LT D. 2014 A NNU AL REP OR T
S erv ic e • A t ti tu de • Val u e • E mp at hy
–
–
–
–
67,958
–
–
–
–
–
–
36,678
(4)
14,652
–
–
–
–
–
–
–
–
–
–
(30,064)
44,716
General
Risk Revaluation
reserve
reserve
$
$
2,903,445
–
–
–
–
–
–
–
–
–
164,025
–
2,739,420
Share Building Education Emergency Statutory
capital
fund
fund relief fund reserve
$
$
$
$
$
Balance at December 31, 2014
17
16
18
15
19
14
Members shares
Allocation for:
Building fund
Education fund
Emergency relief fund
Statutory reserve
General risk reserve
Dividend and patronage refund
Entrance fees
Education and training
20
Notes
Total comprehensive loss /(income)for
the year
Balance at January 1, 2014
(as restated)
For the year
ended
December
31, 2014
(Expressed
In Eastern
Caribbean
Dollars)
For the Year Ended December 31, 2014
Total
$
237,735
132,182
–
–
(135,917)
(132,182)
(271,834)
(67,958)
(777,832)
–
–
–
(777,832)
920
–
–
–
–
–
164,025
– 5,420,322 16,082,519
–
–
–
–
–
–
–
–
–
–
– 1,359,168 1,329,104
– 5,076,960 15,366,302
Capital Retained
grant earnings
$
$
39
2,739,420
–
–
–
–
–
–
–
–
–
–
–
114,825
–
–
312,946 1,004,993
–
–
73,355
–
–
–
–
–
–
–
–
–
–
– (296,987)
–
–
–
–
14,671
–
–
298,275 1,228,625
–
–
–
1,360
–
–
146,710
–
–
–
–
–
500,000 5,650,589
–
(1,360)
–
–
–
–
1,360
–
–
–
–
36,678
ST. L U C I A T EAC H ERS ’ C REDI T C O- C OP ERAT I VE LT D. 2014 A NNU AL REP OR T
S erv ic e • A t ti tu de • Val u e • E mp at hy
–
–
–
–
–
36,678
–
–
–
–
–
–
–
–
– (225,158)
500,000 5,502,519
–
500,000 5,727,677
(5)
44,716
–
–
–
–
–
–
–
–
–
–
(64,014)
–
108,730
–
108,730
General
Risk Revaluation
reserve
reserve
$
$
Balance at December 31, 2013
(as restated)
17
16
18
15
19
20
Total comprehensive loss for the year
Allocation for:
Building fund
Education fund
Statutory reserve
General risk reserve
Dividend and patronage refund
Entrance fees
Education and training
Amortisation of grant
14
2,624,595
Balance as January 1, 2013
(as restated)
Members shares
(18,012)
(25,511,215)
(90,063)
316,287 1,318,688
28,135,810
Share Building Education Emergency Statutory
capital
fund
fund relief fund reserve
$
$
$
$
$
Balance at January 1, 2013
(as previously reported)
Prior period adjustments
Notes
Statement of Changes in Equity ...continued
Statement
of Changes
in Equity
…continued
For
the Year Ended
December
31, 2014
ST.
St.LUCIA
LuciaTEACHERS’
Teachers’CREDIT
CreditCO-OPERATIVE
Co-operativeLIMITED
Limited
733,552
–
– 5,076,960
– (14,671)
– (73,355)
– (1,360)
– (146,710)
– (36,678)
– (420,098)
–
–
– 296,987
–
1,360
(13,828)
–
40,337,331
Total
$
15,366,302
–
–
(13,828)
(420,098)
1,360
–
–
–
–
–
669,538
114,825
15,014,505
521,622 (25,322,826)
13,828 4,737,933
–
13,828 4,216,311
Capital Retained
grant earnings
$
$
Statement of Cash Flows
For
the Year Ended
December
Statement
of Cash
Flows31, 2014
2014
$
2013
$
(Restated)
1,359,168
733,552
(4,240,328)
(249,179)
984,886
141,020
340,678
94,314
–
–
(3,982,543)
(209,295)
993,489
122,173
1,022,034
55,253
(13,828)
1,779
(1,569,441)
(1,277,386)
Increase in loans and advances to members
Decrease in accounts receivable
Increase in members deposits
Increase in members savings and security shares accounts - SSSA
Increase in accounts payable
(2,224,429)
29,534
888,414
1,145,435
77,404
(1,897,225)
(69,441)
397,991
2,040,330
44,230
Net cash used in operations
(1,653,083)
(761,501)
4,228,832
241,552
(984,886)
3,974,117
435,755
(993,489)
1,832,415
2,654,882
Purchase of property and equipment
Purchase of investment securities
Proceeds from disposal and redemption of investment securities
(148,379)
(2,342,269)
1,181,236
(121,405)
(1,375,614)
1,309,457
Net cash used in investing activities
(1,309,412)
(187,562)
Dividends and patronage refunds
Proceeds from share issue
Repayments of borrowings
Entrance fees
(777,832)
164,025
–
920
(420,098)
114,825
(232,123)
1,360
Net cash used in financing activities
(612,887)
(536,036)
(89,884)
1,931,284
Cash and cash equivalents at beginning of year
3,659,571
1,728,287
Cash and cash equivalents at end of year
3,569,687
3,659,571
Notes
Cash flows from operating activities
Net Surplus for the year
Adjustments for:
Interest income on members loans
Interest income on investments
Interest expense
Impairment losses on loans and advances
Losses on investment securities written down
Depreciation
Capital grant amortisation
Loss on disposal of property and equipment
Cash flows before changes in operating assets and liabilities
Interest received from members’ loans
Interest received from investments
Interest paid
Net cash generated from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net (decrease)/increase in cash and cash equivalents
41 part
to 70ofare
an integral
of these financial statements.
The notes on pages The
1 to notes
57 areonanpages
integral
these
financialpart
statements.
40
ST. LU C I A TEA C HERS ’ C RED I T C O - C O PERAT IV E LT D. 2014 ANNU AL R E POR T
Service • A ttitu de • Val u e • Empathy
(6)
St.Lucia
Lucia
Teachers'
Credit
Co-operative
St.
Teachers’
Credit
Co-operative
LimitedLimited
Notes
to Financial
Statements
Notes
to Financial
Statements
December
31,
2014
December 31, 2014
1
General information
The St Lucia Teachers’ Credit Co-operative Limited (“the Co-operative”) was registered under the Cooperative Societies Ordinance # 82 (the “former Act”) under the laws of Saint Lucia (1957 revision) on August
28, 1985. The Act establishing the Credit Union was repealed on August 27, 1999 and replaced by the Cooperative Societies Act No. 28 of 1999 on September 7, 1999, which was further replaced by the Co-operative
Societies Act Cap. 12.06 of 2001 (the “2001 Act”). Section 241 of the Act deems the Co-operative, being duly
registered under the former Act, to be registered under the 2001 Act.
The registered office and principal place of business of the Co-operative is located on 29 Riverside Road,
Castries, Saint Lucia. The principal activity of the Co-operative is the provision of financial services to its
members on reasonable terms and conditions for provident and productive purposes.
2
Summary of significant accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated.
Basis of preparation
St. Lucia Teachers’ Credit Co-operative Limited’s financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) and under the historical cost convention, as modified by
the revaluation of available-for-sale financial assets.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the process of applying the Co-operative’s
accounting policies. The areas involving a higher degree of judgement or complexity or areas where
assumptions and estimates are significant to the financial statements are disclosed in Note 4.
Revised standards effective and relevant to the Co-operative
a) New standards, revisions issued and effective for the financial year beginning January 1, 2014
IAS 32, Financial Statements: Presentation has been amended to clarify the requirements relating to offset of
financial assets and financial liabilities. Specifically, the amendments clarify the meaning of “currently has a
legally enforceable right of set–off” and “simultaneous realization and settlement”. The application of the
amendments has had no impact on the disclosures or on the amounts recognised in the financial statements.
(7)
41
St.
Lucia
Teachers’
Credit Co-operative Limited
Notes
to Financial
Statements
Notes
to Financial
December
31, Statements
2014
December 31, 2014
(expressedIninEastern
Eastern Caribbean
Caribbean Dollars)
dollars)
(Expressed
2
Summary of significant accounting policies…continued
Revised standards effective and relevant to the Co-operative …continued
(b) Standards revised and issued but not yet effective and not early adopted…continued
� IFRS 11, Joint Arrangements outlines the accounting by entities that jointly control an arrangement. Joint
control involves the contractually agreed sharing of control and arrangements subject to joint control are
classified as either a joint venture or a joint operation. The Standard was amended by Accounting for
Acquisitions of Interests in Joint Operations and is effective for annual periods beginning on or after
January 1, 2016. This amendment is not expected to have any impact on the financial statements of the Cooperative.
� IFRS 15, Revenue from Contracts with Customers was issued in May 2014 and establishes a single
comprehensive model for entities to follow in accounting for revenue arising from contracts with customers.
The core principle of IFRS 15 is that an entity shall recognise revenue to depict the transfer of promised
goods or services to customers in an amount that reflects the consideration to which the entity expects to be
entitled in exchange for those goods or services. Under IFRS 15, an entity recognises revenue when or as it
satisfies a performance obligation by transferring a promised good or service to a customer. An asset is
transferred when or as the customer obtains control of that asset. IFRS 15 is effective for annual periods
beginning on after January 1, 2017. The Co-operative is yet to assess the impact of the foregoing Standard.
�
IAS 24, Related Party Disclosures was amended to clarify that a management entity providing key
management personnel services to the reporting entity or to the parent of the reporting entity is a related
party of the reporting entity. Consequently, the reporting entity shall disclose as related party transactions
the amounts incurred for the services paid or payable to the management entity for the provision of key
management personnel services. This amendment is applicable for annual periods beginning on or after
July 1, 2014 and is not expected to have an impact on the financial statements of the Co-operative.
There are no other IFRS or IFRIC interpretations that are not yet effective and expected to have a material
impact on the financial statements of the Co-operative.
(c) Early adoption of standards
The Co-operative did not early-adopt any new or amended standards in 2014.
Cash and cash equivalents comprise balances with less than three months’ maturity from the date of
acquisition including: cash on hand and other short-term securities.
(9)
42
ST. L UC I A TEA C HERS ’ C RED I T C O - C O PERAT IV E LT D. 2014 ANN UAL R E POR T
St.
Lucia
Teachers’
Notes
to Financial
Statements
Notes to Financial Statements
December 31, 2014
December 31, 2014
(expressed In
in Eastern
Eastern Caribbean
(Expressed
Caribbeandollars)
Dollars)
2
Financial assets
The Co-operative allocates financial assets to the following IAS 39 categories: loans and receivables; held-tomaturity investments; and available-for-sale financial assets. Management determines the classification of its
financial instruments at initial recognition.
(a) Held-to-maturity
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed
maturities that the Co-operative’s management has the positive intention and ability to hold to maturity, other
than: (a) those that the Co-operative upon initial recognition designates as at fair value through profit or loss; (b)
those that the Co-operative designates as available for sale; and (c) those that meet the definition of loans and
receivables. These are initially recognised at fair value including direct and incremental transaction costs (b) and
measured subsequently at amortised cost, using the effective interest method. Interest on held-to-maturity
investments is included in the statement of income. In the case of an impairment, the impairment loss is reported
as a deduction from the carrying value of the investment and recognised in the statement of income.
If the Co-operative were to sell other than an insignificant amount of held-to-maturity assets, the entire category
would be tainted and reclassified as available for sale.
(b) Available-for-sale
Available-for-sale investments are financial assets that are intended to be held for an indefinite period of time,
which may be sold in response to needs for liquidity or changes in interest rates, exchange rates or equity prices
or that are not classified as loans and receivables, held-to-maturity investments or financial assets at fair value
through profit or loss.
Available-for-sale financial assets are initially recognised at fair value, which is the cash consideration including
any transaction costs, and measured subsequently at fair value with gains and losses being recognised in the
statement of comprehensive income, except for impairment losses and foreign exchange gains and losses, until
the financial asset is derecognised. If an available-for-sale financial asset is determined to be impaired, the
cumulative gain or loss previously recognised in the statement of comprehensive income is recognised in the
statement of income. However, interest is calculated using the effective interest method, and foreign currency
gains and losses on monetary assets classified as available for sale are recognised in the statement of income.
Dividends on available-for-sale equity instruments are recognised in the statement of income when the Cooperative’s right to receive payment is established.
(c) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market, other than: (a) those that the entity intends to sell immediately or in the short term,
which are classified as held for trading, and those that the entity upon initial recognition designates as at fair
value through profit or loss; (b) those that the entity upon initial recognition designates as available for sale; or
(c) those for which the holder may not recover substantially all of its initial investment, other than because of
credit deterioration.
Loans and receivables are initially recognised at fair value – which is the cash consideration to originate or
purchase the loan including any transaction costs – and measured subsequently at amortised cost using the
effective interest rate method. Loans and receivables are reported in the balance sheet as loans and advances to
members or as investment securities. Interest on loans and advances to members and investment securities are
included in the statement of income. In the case of impairment, the impairment loss is reported as a deduction
from the carrying value of the loan and recognised in the statement of income.
(10)
43
St.Lucia
Lucia
Teachers'
Credit
Co-operative
St.
Teachers’
Credit
Co-operative
LimitedLimited
Notes
to to
Financial
Statements
Notes
Financial
Statements
December
31,
2014
December 31, 2014
2
Impairment of financial assets
Assets carried at amortised cost
The Co-operative assesses at each balance sheet date whether there is objective evidence that a financial asset
or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and
impairment losses are incurred if, and only if, there is objective evidence of impairment as a result of one or
more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or
events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that
can be reliably estimated. Objective evidence that a financial asset or group of asset is impaired includes
observable data that comes to the attention of the Co-operative about the following loss events:
- significant financial difficulty of the issuer or obligor;
- a breach of contract, such as a default or delinquency in interest or principal payments;
- the Co-operative granting to the borrower, for economic or legal reasons relating to the borrower’s
financial difficulty, a concession that the lender would not otherwise consider;
- it becoming probable that the borrower will enter bankruptcy or other financial reorganisation;
- the disappearance of an active market for that financial asset because of financial difficulties; or
- observable data indicating that there is a measurable decrease in the estimated future cash flows from a
group of financial assets since the initial recognition of those assets, although the decrease cannot yet be
identified with the individual financial assets in the group, including:
- adverse changes in the payment status of borrowers in the group; or
- national or local economic conditions that correlate with defaults on the assets in the group.
The Co-operative first assesses whether objective evidence of impairment exists individually for financial
assets that are individually significant, and individually or collectively for financial assets that are not
individually significant. If the Co-operative determines that no objective evidence of impairment exists for an
individually assessed financial asset, whether significant or not, it includes the assets in a group of financial
assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are
individually assessed for impairment and for which an impairment loss is or continues to be recognised are
not included in a collective assessment of impairment.
If there is objective evidence that an impairment loss on loans and receivables or held-to-maturity investments
carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the
asset’s carrying amount and the present value of the estimated future cash flows (excluding future credit
losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The
carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is
recognised in the statement of income. If a loan or held-to-maturity investment has variable interest rates, the
discount rate for measuring any impairment loss is the current effective interest rate determined under the
contract. As a practical expedient, the Co-operative may measure impairment on the basis of an instrument’s
fair value using the observable market price.
The calculation of the present value of the estimated future cash flows of a collateralised financial asset
reflects the cash flows that may or may not result from foreclosure less costs for obtaining and selling the
collateral, whether or not the foreclosure is probable.
(11)
44
St.
Lucia
Teachers’
Notes
to Financial
Statements
December 31, 2014
December 31, 2014
(expressed In
in Eastern
Eastern Caribbean
(Expressed
Caribbeandollars)
Dollars)
2
Impairment of financial assets …continued
Assets carried at amortised cost …continued
When a loan is uncollectible, it is written off against the related provision for loan impairment. Such loans are
written off after all the necessary procedures have been completed and the amount of the loss has been
determined. Subsequent recoveries of amounts previously written off decrease the amount of the provision for
the loan impairment in the statement of income.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor’s
credit rating), the previously recognised impairment loss is reversed by adjusting the allowance account. The
amount of the reversal is recognised in the statement of income.
Assets carried at fair value
The Co-operative assesses at each balance sheet date whether there is objective evidence that a financial asset
or a group of financial assets is impaired. In the case of equity investments classified as available-for-sale, a
significant or prolonged decline in the fair value of the security below its cost is considered in determining
whether the assets are impaired. If any such evidence exists for available-for-sale financial assets, the
cumulative loss measured as the difference between the acquisition cost and the current fair value, less any
impairment loss on that financial asset previously recognised in the profit or loss is removed from equity and
recognised in the statement of income. Impairment losses recognised in the statement of income on equity
instruments are not reversed through the statement of income.
Impairment of other non-financial assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised
for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount
is the higher of an asset’s fair value less costs to sell and value in use.
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a
legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or
realise the asset and settle the liability simultaneously.
Pursuant to Section 109 of the 2001 Act the Co-operative has a legally enforceable right to offset members
deposits against any related loan balances that are over 90 days overdue.
Property and equipment
All property and equipment is stated at historical cost less accumulated depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or are recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Co-operative and the cost of the item can be measured reliably. All other repairs and maintenance are charged
to the statement of income during the financial period in which they are incurred.
(12)
45
St.
Lucia
Teachers’
Notes
to Financial
Statements
December 31, 2014
December 31, 2014
(expressed in
(Expressed
In Eastern
EasternCaribbean
Caribbeandollars)
Dollars)
2
Property and equipment …continued
Depreciation is calculated using the declining balance method to allocate cost to their residual values over
their estimated useful lives, as follows:
Buildings
Office equipment
Computer equipment
Office furniture
2%
20%-25%
33%
20%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. An asset’s carrying amount is written down immediately to its
recoverable amount if the assets carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are
included in the statement of income.
Financial liabilities
The Co-operative’s financial liabilities are measured at amortised cost and include Members’ Deposits and
Members’ Savings and Security Shares Accounts (SSSA). Financial liabilities are derecognised when
extinguished.
Borrowings
Borrowings are recognised initially at fair value, being their issue proceeds (fair value of consideration
received) net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any
difference between proceeds net of transaction costs and the redemption value is recognised in the statement
of income over the period of the borrowings using the effective interest method.
Members’ shares
Members’ shares issued by the Co-operative are classified as equity to the extent that they do not meet the
definition of a financial liability. Incremental costs directly attributable to the issue of new shares or options
or to the acquisition of a business are shown in equity as a deduction, from the proceeds.
Dividend on members’ shares
Dividends on ordinary shares are recognised in equity in the period in which they are declared.
Interest income and expense
Interest income and expense for all interest-bearing financial instruments are recognised within ‘interest
income’ and ‘interest expense’ in the statement of income using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a financial asset or a financial
liability and of allocating the interest income or interest expense over the relevant period. The effective
interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected
life of the financial instrument or, when appropriate a shorter period to the net carrying amount of the
financial asset or financial liability. When calculating the effective interest rate, the Co-operative estimates
cash flows considering all contractual terms of the financial instrument but does not consider future credit
losses. The calculation includes all fees paid or received between parties to the contract that are an integral
part of the effective interest rate, transaction costs and all other premiums or discounts.
(13)
46
St.
Lucia
Teachers’
Notes
to Financial
Statements
December 31, 2014
December 31, 2014
(expressed in
(Expressed
In Eastern
EasternCaribbean
Caribbeandollars)
Dollars)
2
Fee and commission income
Fees, commissions and other income are recognised on an accruals basis when the related service has been
provided.
Dividend income
Dividend income from available-for-sale equities is recognised when the right to receive payment is
established.
Foreign currency translation
Functional and presentation currency
Items in the financial statements are measured using the currency of the primary economic environment in
which the entity operates (“the functional currency”). The financial statements are presented in Eastern
Caribbean dollars, which is the Co-operative’s functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated
in foreign currencies are recognised in the statement of income.
Translation differences on non-monetary items, such as equities held at fair value through profit or loss are
reported as part of the fair value gain or loss. Translation differences on non-monetary items, such as equities
classified as available-for-sale financial assets, are included in the fair value reserve in equity, if any.
Provisions
Provisions are recognised when the Co-operative has a present legal or constructive obligation as a result of past
events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate
of the amount can be made.
Taxation
The Co-operative is not liable to income taxes in accordance with Section 25(1) (q) of the Income Tax Act
Cap 15.02.
Financial instruments
Financial instruments carried on the balance sheet include cash and cash equivalents, investment securities,
loans to members, deposits and shares from members. The particular recognition methods adopted are
disclosed in the individual policy statement associated with each item.
Comparatives
Except when a standard or an interpretation permits or requires otherwise, all amounts are reported or
disclosed with comparative information.
Where necessary, comparative figures have been adjusted to conform with changes in the presentation in the
current year.
(14)
47
St.
Teachers’
Credit
Co-operative
Limited
St.Lucia
Lucia
Teachers'
Credit
Co-operative
Limited
Notes
to to
Financial
Statements
Notes
Financial
Statements
December
31,
2014
December 31, 2014
3
Financial risk management
Objectives, policies and processes
The Board of Directors has overall responsibility for risk management. The authority for designing and
operating the processes that addresses the objectives is delegated to the Treasurer.
Strategy in using financial instruments
By their nature, the Co-operative’s activities are principally related to the use of financial instruments. The Cooperative accepts deposits and shares from members and seeks to earn an interest margin by lending to
members while maintaining sufficient liquidity to meet all claims that may fall due.
The Co-operative also seeks to raise its interest margins by obtaining above average margins, net of allowances,
through investing in various financial instruments.
The most important types of risk are credit risk, liquidity risk, market risk and other operational risk. Market
risk includes currency and interest rate risks.
Credit risk
The Co-operative takes on exposure to credit risk which is the risk that a counterparty will be unable to pay
amounts in full when due. Impairment provisions are provided for losses that have been incurred at the balance
sheet date. Significant changes in the economy, or in the health of a particular industry segment that represents a
concentration in the Co-operative’s portfolio, could result in losses that are different from those provided at the
balance sheet date. Management therefore carefully manages its exposure to credit risk.
The Co-operative structures the levels of credit risk it undertakes by placing limits on the amount of risk
accepted in relation to one borrower. Such risks are monitored on a revolving basis. Limits on the level of credit
risk by products are approved by the Board of Directors.
Exposure to credit risk is managed through regular analysis of the ability of borrowers and potential borrowers
to meet interest and capital repayment obligations and by changing these lending limits where appropriate.
Exposure to credit risk is also managed in part by obtaining collateral and personal guarantees.
Impairment and provisioning policies
Impairment provisions are recognised for financial reporting purposes only for losses that have been incurred at
the balance sheet date based on objective evidence of impairment. Some accounts are reviewed monthly and
others quarterly and sometimes when individual circumstances require.
Impairment losses on individually assessed accounts are determined by an evaluation of the incurred loss at the
balance sheet date on a case by case basis and are applied to all individually significant accounts. The
assessment encompasses collateral held and the anticipated receipts for those individual accounts. This forms
our specific provisioning.
The collective provisioning requires our judgment about the risks of default and loss associated with a pool of
accounts. These accounts are in a segment that is considered to be “Pass” and or “Special Mention”. An average
historical experience rate adjusted for current conditions has not been determined by the Co-Operative.
Management determines whether objective evidence of impairment exist based on the following criteria:
-
Delinquency in payments of principal and interest
Cash flow constraints of members
Breach of loan covenants
Deterioration of members competitive position
Deterioration in the value of collateral
Economic conditions
(15)
48
St.
Lucia
Teachers’
Notes
to Financial
Statements
Notes
to Financial
December
31, Statements
2014
December 31, 2014
Eastern Caribbean
Caribbean dollars)
(Expressed
Dollars)
3
-
Financial risk management…continued
Credit risk…continued
Maximum exposure to credit risk before collateral held or other credit enhancements
Credit risk exposures relating to on-balance sheet assets are as follows:
Maximum exposure
2014
$
Cash at bank
Investment securities
Loans and advances to members:
Accounts receivable
Credit risk exposures relating to off-balance sheet items:
Loan commitments
At December 31
2013
$
3,326,779
4,192,424
38,302,170
98,805
3,574,121
3,394,507
36,207,264
128,339
45,920,178
43,304,231
811,652
408,723
46,731,830
43,712,954
The above table represents a worst case scenario of credit risk exposure to the Co-operative at December 31,
2014 and 2013, without taking account of any collateral held. For on-balance-sheet assets, the exposures set
out above are based on net carrying amounts as reported in the balance sheet.
Loans and advances to members are summarised as follows:
2014
$
2013
$
Neither past due nor impaired
Past due but not impaired
Impaired but not deemed total loss
Impaired
33,920,417
4,281,955
292,682
295,235
30,821,692
4,747,348
681,451
580,587
Gross
38,790,289
36,831,078
Less allowance for impairment losses on loans and
advances to members
Net
(696,429)
38,093,860
(820,623)
36,010,455
The total impairment provision for loans and advances to members is $696,429 (2013 - $820,623) and is
comprised as follows:
2014
$
Individually impaired loans
Portfolio provision
291,768
404,661
696,429
2013
$
568,096
252,527
820,623
(16)
49
St.
Lucia
Teachers’
Notes
to Financial
Statements
Notes
to Financial
Statements
December
31, 2014
December 31, 2014
3
Credit risk…continued
Loans and advances to members past due but not impaired
Loans up to 90 days past due are not considered impaired unless information is available to indicate otherwise.
Therefore the gross amount of loans and advances by class to members that were past due but not impaired
were as follows:
2013
$
2014
$
At December 31
Past due up to 30 days
Past due 31-60 days
Past due 61-90 days
3,479,438
640,510
162,007
2,886,021
1,568,429
292,898
4,281,955
4,747,348
Loans and advances to members individually impaired
The table below shows the individually impaired loans and advances to members before taking into
consideration the cash flows from collateral held.
The breakdown of the gross amount of individually impaired loans and advances by class are as follows:
Manufacturing
and business
$
Personal
$
Education
$
Mortgage
$
Total
$
61,683
43,963
587,917
324,003
108,857
1,262,038
At December 31, 2014
199,532
282,739
333,112
496,066
Repossessed collateral
During 2013 an asset item was repossessed and the proceeds from disposal amounting to $61,605 was applied
to the loan. At the end of 2014 the C-operative had no repossessed collateral.
(17)
50
Notes
to Financial
Statements
St.
Lucia
Teachers’
Notes
to Financial
December
31, Statements
2014
December 31, 2014
3
Concentrations of risks of financial assets with credit exposure
Membership in the cooperative is restricted primarily to teachers, spouse and child or ward, and parents of
members of the Co-operative, common law partners of a member of the Co-operative, students who are member of
school thrifts that are depositors of the Co-operative.
The following table breaks down the Co-operative’s credit exposure at gross amounts without taking into account
any collateral held or other credit support by the industry sectors of the Co-operative’s counterparties.
Financial Manufacturing/
Institutions
Business
$
$
Personal Government Education
$
$
$
Other
$
Total
$
98,805
-
3,326,779
98,805
4,192,424
Financial assets
Cash at bank
Accounts receivable
Investments securities
Loans and advances to
members
3,326,779
1,807,108
648,933
-
1,736,383
-
-
1,133,830
27,107,593
-
2,990,864
7,069,883 38,302,170
5,133,887
1,782,763
27,107,593
1,736,383
2,990,864
7,168,688 45,920,178
811,652
Loan commitments
811,652
Financial assets
Cash at bank
Accounts receivable
Investments securities
Loans and advances to
members
Loan commitments
449,048
-
991,536
-
1,183,875
24,387,266
-
3,753,343
6,882,780 36,207,264
5,528,044
1,632,923
24,387,266
991,536
3,753,343
7,011,119 43,304,231
-
-
408,723
-
-
3,574,121
1,953,923
128,339
-
3,574,121
128,339
3,394,507
-
408,723
Market risk
The Co-operative is exposed to equity securities, price risk arising from available for sale investment securities.
Currency risk
The Co-operative takes on exposure to effects of fluctuations in the prevailing foreign currency exchange rates on
its financial position and cash flows. The Board of Directors sets limits on the level of exposure by currency and in
total for both overnight and intra-day positions, which are monitored daily. The Co-operative’s exposure to
currency risk is minimal since most of its assets and liabilities in foreign currencies are held in United States
dollars. The exchange rate of the Eastern Caribbean dollar (EC$) to the United States dollar (US$) has been
formally pegged at EC$2.70 = US$1.00 since 1974.
(18)
51
St.
Lucia
Teachers’
Notes
to Financial
Statements
Notes
to Financial
December
31, Statements
2014
December 31, 2014
3
Interest rate risk
Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. Fair value interest rate risk is the risk that the value of a financial instrument
will fluctuate because of changes in market interest rates. The Co-operative takes on exposure to the effects of
fluctuations in the prevailing levels of market interest rates on both its fair value and cash flow risks. Interest
margins may increase as a result of such changes but may reduce or create losses in the event that unexpected
movements arise. The Board of Directors sets limits on the level of mismatch of interest rate repricing that may
be undertaken.
The table below summarises the Co-operative’s exposure to interest rate risks. Included in the table are the Cooperative’s assets and liabilities at carrying amounts, categorised by the earlier of contractual repricing or
maturity dates.
Up to 6
months
$
6 to 12
months
$
1 to 5
years
$
Over 5
years
$
Non-Rate
Sensitive
$
Total
$
3,326,779
–
–
–
242,908
3,569,687
–
–
–
–
221,301
221,301
1,144,680
1,016,500
923,859
300,000
350,355
1,112,456
17,392,892
–
19,446,467
586,084
98,805
–
3,971,123
98,805
38,302,170
4,821,814
2,128,956
18,316,751
19,746,467
1,149,098
46,163,086
31,623,830
–
–
–
–
–
–
–
183,223
–
31,623,830
183,223
31,623,830
–
–
–
183,223
31,807,053
(26,802,016)
2,128,956
18,316,751
19,746,467
965,875
14,356,033
3,574,121
–
–
–
85,450
3,659,571
–
–
–
–
213,515
213,515
537,644
1,362,164
625,000
300,000
442,918
1,112,078
17,468,872
–
17,183,396
356,184
128,339
–
3,180,992
128,339
36,207,264
4,554,683
2,474,242
18,093,872
17,483,396
783,488
43,389,681
Members' deposits and SSSA
Other liabilities and accrued expenses
29,589,981
–
–
–
–
–
–
–
105,820
–
29,589,981
105,820
Total financial liabilities
29,589,981
–
–
–
105,820
29,695,801
As at December 31, 2014
Financial assets
Investment securities - available-forsale
Investment securities -loans and
receivables
Accounts receivable
Loans and advances to Members
Total financial assets
Members' deposits and SSSA
Other liabilities and accrued expenses
Total interest repricing gap
–
–
–
Financial assets
Investment securities -available-forsale
Investment securities –loans and
receivables
Accounts receivable
Loans and advances to Members
Total financial assets
–
–
–
(19)
52
Notes
Financial
Statements
St.toLucia
Teachers’
Notes
to
Financial
Statements
December 31, 2014
December 31, 2014
(expressed
in Eastern
Caribbean
dollars)
(Expressed
In Eastern
Caribbean
Dollars)
Total interest repricing gap
3
(25,035,298)
2,474,242
18,093,872
17,483,396
677,668
13,693,880
Interest rate risk…continued
The Co-operative manages part of its credit risk through the insistence of borrowing members acquiring Savings
and Security Shares Accounts (SSSA). The Co-operative has an enforceable right over the SSSA as they form
the first line of security coverage for the loans and advances on the books of the Co-operative. The SSSAs are
tied to the loans that they secure and while they are payable on demand, the amounts may not be withdrawn
until the related loans are settled in full.
As at the year end Members’ Savings and Security Shares Accounts – SSSA amounting to $16,633,158 (2013 $16,392,456) was held collateral to secure loans and advances to members.
The amounts of SSSA held as security for varying loan maturities are as follows:
Loan Maturities
6 – 12 months
1 – 5 years
Over 5 years
2014
$
2013
$
501,503
7,602,034
8,529,621
597,268
7,996,737
7,798,451
16,633,158
16,392,456
Liquidity risk
Liquidity risk is the risk that the Co-operative is unable to meet its payment obligations associated with its
financial liabilities when they fall due and to replace funds when they are withdrawn. The consequence may
be the failure to meet obligations to repay depositors and fulfill commitments to lend.
The Co-operative is exposed to daily calls on its available cash resources from maturing members’ deposits
and loan draw downs. The Co-operative does not maintain cash resources to meet all of these needs as
experience shows that a minimum level of reinvestment of maturing funds can be predicted with a high level
of certainty. The Board of Directors sets limits on the minimum proportion of maturing funds available to
meet such calls and on the minimum level of borrowing facilities that should be in place to cover withdrawals
at unexpected levels of demand.
Liquidity risk management
The matching and controlled mismatching of the maturities and interest rates of assets and liabilities is
fundamental to the management of the Co-operative. It is unusual for the Co-operative to be completely
matched as transacted business is often of uncertain term and of different types. An unmatched position
potentially enhances profitability, but also increases the risk of losses.
The contractual maturities of assets and liabilities and the ability to replace, at an acceptable cost, interestbearing liabilities as they mature, are important factors in assessing the liquidity of the Co-operative and its
exposure to changes in interest rates.
Non derivative cash flows
The table below presents the cash flows payable by the Co-operative under non-derivative financial liabilities
by remaining contractual maturities at the balance sheet date. The amounts disclosed in the table are the
contractual undiscounted cash flows, whereas the Co-operative manages the inherent liquidity risk based on
expected undiscounted cash inflows.
53
(20)
St.Lucia
Lucia
Teachers'
Credit
Co-operative
St.
Teachers’
Credit
Co-operative
LimitedLimited
Notes
to to
Financial
Statements
Notes
Financial
Statements
December
31,
2014
December 31, 2014
3
Liquidity risk management…continued
Up to
1 month
$
Total
$
Members’ deposits
Members’ savings and security shares account - SSSA
2,926,850
28,696,980
183,223
2,926,850
28,696,980
183,223
31,807,053
31,807,053
Financial Liabilities
Members’ deposits
Members’ savings and security shares account - SSSA
2,038,436
27,551,545
105,820
2,038,436
27,551,545
105,820
29,695,801
29,695,801
Fair value hierarchy
Fair value amounts represents estimates of the consideration that would currently be agreed upon between
knowledgeable willing parties who are under no compulsion to act and is best evidences by a quoted market
value if one exists, The following methods and assumptions were used to estimate the fair value of financial
instruments.
The fair values of cash resources, accounts receivable and accounts payable, members’ deposits, Members
SSSA and other short term instruments are assumed to approximate their carrying amounts due to their short
term nature. The fair value of off-statement of financial position commitments are also assumed to approximate
the amounts disclosed in Note 29 due to their short term nature.
Assets classified as available for sale are at fair value based on market prices or broker price quotations. For
unlisted securities fair value is estimated based on their cost as the amounts are immaterial. For investment
securities classified as loans and receivables fair value is estimated using discounted cash flows.
(21)
54
St.
Lucia
Teachers’
Notes
to Financial
Statements
Notes
to Financial
December
31, Statements
2014
December 31, 2014
Eastern Caribbean
Caribbean dollars)
(Expressed
Dollars)
3
Fair values of financial assets and liabilities
Loans and advances are net of their provisions for impairment. The estimated fair values of loans and advances
represent the discounted amount of estimated future cash flows expected to be received. Expected cash flows
are discounted at current market rates to determine fair value.
Level 2
$
Level 3
$
Total
$
183,517
37,784
221,301
3,964,067
39,745,881
–
–
3,964,067
39,745,881
43,709,948
37,784
43,709,948
175,731
37,784
213,515
2,818,305
36,778,380
–
–
2,818,305
36,778,380
39,596,685
37,784
39,596,885
December 31, 2014
Financial Assets measured at fair value
Investment securities – available-for-sale
Financial Assets for which at fair values are disclosed
Investment securities – loans and receivables
December 31, 2013
Financial Assets measured at fair value
Investment securities − available-for-sale
Financial Assets for which at fair values are disclosed
Investment securities – loans and receivables
There were no financial instruments that traded in an active market. These instruments are included in Level 1.
The fair value of financial instruments that are not traded in an active market is determined using valuation
techniques. These valuation techniques maximize the use of observable market data where it is available. If all
significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.
If one or more significant inputs is not based on observable market data, the instrument is included in level 3.
The table below summarises the carrying amounts and fair values of those financial assets and financial liabilities
not presented on the Co-operative’s balance sheet at their fair value.
Financial assets
Fair value
2014
$
Carrying amount
2014
2013
$
$
38,294,998
36,010,450
39,745,881
36,778,380
3,971,123
3,180,992
3,964,067
2,818,305
Investment securities:
Notes
to Financial
Statements
− Loans
and receivables
December 31, 2014
2013
$
The carrying amounts of all financial liabilities are assumed to approximate their fair values.
Assets measured at fair value
Fair value hierarchy - reconciliation of level 3 items. There were no purchases, settlements/redemption or(22)
fair
value losses during the years 2014 and 2013.
55
St.Lucia
Lucia
Teachers'
Credit
Co-operative
St.
Teachers’
Credit
Co-operative
LimitedLimited
Notes
Financial
Statements
Notestoto
Financial
Statements
December
31,
2014
December 31, 2014
3
Capital management
The Co-operative’s objectives when managing capital are:� To comply with the statutory capital requirements of the Co-operative Societies Act of St. Lucia and
enforced by the Financial Services Regulatory Authority (FSRA);
� To safeguard the Co-operative’s ability to continue as a going concern so that it can continue to provide
returns for members and benefits for other stakeholders; and
� To maintain a strong capital base in an effort to maintain members, creditors and other parties confidence
and to sustain future development of the Co-operative.
� To provide a cushion in the event of market instability.
The Board of Directors monitors the return on capital, which is defined as surplus for the year divided by
average total assets, as well as the level of dividends paid to members. Section 119 of the Co-operative
Societies Act Cap 12.06 requires the Co-operative to maintain statutory and other reserves at not less than 10%
of its liabilities. As at the year end the minimum reserve requirement was $3,180,795 (2013 - $2,969,580). The
Co-operative was in compliance at December 31, 2014.
Capital adequacy is monitored quarterly using the PEARLS ratios prescribed by the World Council of Credit
Unions for determining capital adequacy and which has been adopted by the Financial Services regulatory
Authority (IRSA). PEARLS require that each Credit Union maintain a minimum of 10% of total assets as its
capital base. As at the year end the minimum capital required was $4,788,957 (2013 - $4,506,250). The
regulatory capital is divided into two levels:
�
�
Institutional Capital: Share Capital, Retained Earnings, Statutory Reserves ; and
Transitory Capital: Education Fund, Emergency Relief Reserve, Building Fund Reserve, General Risk
Buffer, Loan Impairment Reserve, Revaluation reserve.
2014
$
2013
$
2,903,445
5,420,322
5,923,343
2,739,420
5,076,960
5,650,589
14,247,110
13,466,969
Transitory capital
Education fund
Building fund
General risk buffer
Revaluation reserve
903,175
500,000
312,946
104,636
14,652
1,004,993
500,000
312,946
36,678
44,716
Total transitory capital
1,835,409
1,899,333
16,082,519
15,366,302
Institutional capital
Share capital
Retained earnings
Statutory reserve
Total institutional capital
Total regulatory capital
The risk-weighted assets are measured by an estimation of market, credit, interest and other risks associated
with each asset and with due consideration to the collateral proffered. In addition, management and Board of
Directors monitor any major movements in asset levels on a monthly basis.
The Co-operative was in compliance with this requirement at year-end.
(24)
56
St.
Lucia
Teachers’
Notes
to Financial
Statements
Notes
to Financial
Statements
December
31, 2014
December 31, 2014
4
Critical accounting estimates, and judgements in applying accounting policies
The Co-operative makes estimates and assumptions that affect the reported amounts of assets and liabilities
within the next financial year. Estimates and judgments are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are believed to be reasonable under
the circumstances.
Impairment losses on loans and advances
The Co-operative reviews its loan portfolio to assess impairment on an annual basis. In determining whether an
impairment loss should be recorded in the statement of income, the Co-operative makes judgment as to whether
there is any observable data indicating that there is a measurable decrease in the estimated future cash flows
from each loan before a decrease can be identified with the individual loan.
When management identifies the loan as doubtful, provision is made on specific identification of doubtful loans
and advances. Additions to the provision are charged to current operations. After which they become
uncollectible and are written off against the provisions. In calculating the provision the amount of the loan
principal outstanding is deducted from any money standing to the credit of the member on the books of the Cooperative in shares or deposit accounts less the market value of any security held by the Co-operative in respect
of the loan.
Impairment of available-for-sale equity investments
The Co-operative determines that available-for-sale equity investments are impaired when there has been a
significant or prolonged decline in the fair value below its cost. This determination of what is significant or
prolonged requires judgment. In making this judgment, the Co-operative evaluates among other factors, when
there is evidence of deterioration in the financial health of the investee industry and sector performance,
changes in technology and operational and financing cash flows.
Held-to-maturity investments
The Co-operative follows guidance of IAS 39 on classifying non-derivative financial assets with fixed or
determinable payments and fixed maturity as held-to-maturity. This classification requires significant judgment.
In making this judgment, the Co-operative evaluates its intention and ability to hold such investments to
maturity. If the Co-operative fails to keep these investments to maturity other than for the specific
circumstances - for example selling an insignificant amount close to maturity - it will reclassify the entire class
as available-for-sale. The investments would therefore be measured at fair value not amortised cost.
5
Cash on hand
Cash at bank
2014
$
2013
$
242,908
3,326,779
85,450
3,574,121
3,569,687
3,659,571
Interest is earned on bank balances at an average rate of 2.58% (2013 - 2.58%) per annum. Under section 119
(3) of the Act, the Co-operative is required to maintain a liquidity reserve calculated as 15 % of members shares
and deposits. As at the year end this amounted to $4,743,574 (2013 - $4,438,497). In addition to the liquid
assets above, investment securities amounting to $1,778,079 (2013 - $1,180,929) are available to meet the
requirements of the Act (Note 6).
(25)
57
December
31,Statements
2014
Notes
to Financial
St. Lucia Teachers’ Credit Co-operative Limited
December 31, 2014
6
Loans and receivables
St. Lucia Co-operative League
St. Lucia National Co-operative Venture
Financial Investments & Consultancy Services Ltd – Fixed Deposit.
CLICO - Fixed Deposit
Government of St. Lucia Fixed Rate Bond
ECHMB Bonds
Government of St. Lucia - Treasury Bills
Bank of St. Lucia Limited - Secured Notes
ECHMB - Bank Notes
Government of Grenada - Treasury Bills
Government of St. Lucia US Treasury Note
Accrued interest on investments
Total securities – loans and receivables
Securities - available-for-sale listed
Eastern Caribbean Financial Holdings
St. Lucia Electricity Services Ltd
Grenada Electricity Services
Securities - available-for-sale-unlisted
Eastern Caribbean Home Mortgage Bank
First National Bank of St. Lucia
Total securities available-for-sale
2014
$
2013
$
86,084
500,000
525,500
–
561,654
400,000
752,579
500,000
200,000
100,000
298,859
83,370
–
516,500
340,678
687,195
450,000
293,416
371,013
400,000
–
–
3,924,676
3,142,172
46,447
38,820
3,971,123
3,180,992
120,667
46,350
16,500
150,731
25,000
–
183,517
175,731
20,900
16,884
20,900
16,884
37,784
37,784
221,301
213,515
Investment securities - loan and receivables includes amounts totalling $1,778,079 (2013 -$1,180,929) that
are available to meet the liquidity requirements of section 119(3) of the Act.
Impairment of CLICO fixed deposit
The St. Lucia Teachers’ Credit Co-operative Limited has two EFPA Policies with CLICO International Life
Insurance Limited. The management of the Co-operative opted not to rollover the two policies that matured on
July 1, 2009 and October 28, 2009. Since CLICO did not settle the claim, the credit union applied to the high
court and obtained judgment. By order of claim #SLUHCV 2010/1106 dated March 13, 2011 CLICO
International Life Insurance Limited was ordered to pay the St. Lucia Teachers’ Credit Co-operative Limited
the sum of $1,396,659 together with interest at the rate of 8% per annum from date of payment plus cost in the
sum of $3,010.
By order of the Eastern Caribbean Supreme Court in the high court of Justice of Saint Lucia dated April 11,
2012, a judicial Manager in Deloitte Consulting Ltd., was appointed pursuant to section 40 of the Insurance act
Cap 12.08 of the Revised Law of Saint Lucia 2001. It was further ordered that among other things all action or
claims and the executions of writs, summons and other processes whatsoever initiated are paid and no person
shall bring or continue with the claims, proceeding or process against the company without leave of the Court.
(26)
58
St.
Lucia
Teachers’
Notes
to Financial
Statements
Notes
to Financial
Statements
December
31, 2014
December 31, 2014
(expressed in
(Expressed
In Eastern
EasternCaribbean
Caribbeandollars)
Dollars)
6
Investment securities ….continued
Impairment of CLICO fixed deposit….continued
The judicial manager’s recommendation to settle policyholders is to float a bond whose proceeds would be used
to acquire qualifying assets that would be transferred to the buyer of the insurer’s traditional business as well as
fund partial payment and restructuring of the EFPA portfolio. For the proposal to work the governments of
those affected countries including Saint Lucia are expected to back the bond which amounts to approximately
$540 million.
Notwithstanding the judgment held, the Board of Directors was of the view that the recovery process will be
protracted and has thus authorized that the investment be written down as follows:
� 2013
� 2014
7
75% ($1,022,034)
25% ($340,678)
Loans and Advances to Members
Loans and Advances to members
Provisions for Impairment of Loans
Interest Receivable on Loans
2014
$
2013
$
38,790,289
(696,429)
36,831,073
(820,623)
38,093,860
36,010,450
208,310
196,814
38,302,170
36,207,264
8
Provision for Impairment of Loans
Balance - at beginning of year
Written off during the year
Provisions made during the year
Balance - at end of year
9
Accounts Receivables and Prepaid Expenses
F.I.P. Claims
Other
Prepaid Expenses
2014
$
2013
$
820,623
(265,214)
141,020
698,450
–
122,173
696,429
820,623
2014
$
2013
$
63,437
15,810
19,558
115,858
6,828
5,653
98,805
128,339
(27)
59
Notes
to Financial
Statements
St.
Lucia
Teachers’
December
31, Statements
2014
Notes
to Financial
December 31, 2014
10 Property and Equipment
Cost
Furniture
and
Equipment
$
Buildings
$
Land
$
Total
$
At January 1, 2012
Additions
516,415
25,291
490,232
322,139
732,530
–
1,739,177
347,430
541,706
812,371
732,530
2,086,607
At January 1, 2013
Additions
Disposals
541,706
121,405
(35,451)
812,371
–
–
732,530
–
–
2,086,607
121,405
(35,451)
627,660
812,371
732,530
2,172,561
At January 1, 2014
Additions
627,660
148,379
812,371
–
732,530
–
2,172,561
148,379
776,039
812,371
732,530
2,320,940
At January 1, 2012
Charge for the year
328,698
47,993
92,341
9,527
–
–
421,039
57,520
376,691
101,868
–
478,559
At January 1, 2013
Charge for the year
Depreciation Disposal
376,691
40,556
(33,672)
101,868
14,697
–
–
–
–
478,559
55,253
(33,672)
383,575
116,565
–
500,140
At January 1, 2014
Charge for the year
Depreciation disposal
383,575
79,958
–
116,565
14,356
–
–
–
–
–
500,140
94,314
–
463,533
130,921
–
594,454
165,015
710,503
732,530
1,608,048
244,085
695,806
732,530
1,672,421
312,506
681,450
732,530
1,726,486
Accumulated depreciation
Carrying amounts
(28)
60
St.
Lucia
Teachers’
Notes
to Financial
Statements
Notes
to Financial
December
31, Statements
2014
December 31, 2014
(Expressed
In Eastern Caribbean Dollars)
11 Members’ SSSA
In accordance with a resolution passed by members at the 29th AGM held on April 6, 2014, shares were
reclassified effective July 1, 2014 in compliance with IAS 32 and IFRIC 2. Members’ shares which are now
classified under liabilities were placed in an account named Savings and Security Shares Account (SSSA).
2014
Number of
“Shares”
SSSA
Balances
$
2013
Number of
“Shares”
SSSA
Balances
$
Balance - beginning of year
( as restated) (Note 29)
Net Shares purchased
5,510,309
229,087
27,551,545
1,145,435
5,102,243
408,066
25,511,215
2,040,330
Balance - end of year
5,739,396
28,696,980
5,510,309
27,551,545
12 Borrowing - Long Term
The SLTCC on the 8th of November 2012 the Co-operative obtained a loan of $500,000 to renovate its
existing building on Riverside Road, Castries. The loan was secured by a lien over a fixed deposit held at the
Bank of Saint Lucia and was repayable at $6,027 per month at 7.85% interest per annum over 120 months.
The Loan was repaid before maturity on July 22, 2013.
13 Accounts Payable and Accruals
Audit fees
Contractor’s retention
CUNA insurance
League dues
Gratuity
Other
2014
$
2013
$
23,480
–
16,324
38,549
40,047
64,823
17,825
1,512
15,383
18,298
23,153
29,649
183,223
105,820
(29)
61
Notes
to Financial
Statements
St.
Lucia
Teachers’
Notes
to Financial
December
31, Statements
2014
December 31, 2014
14 Members’ Shares
In accordance with a resolution passed by members at the 29th AGM on 06th April 2014, members are to have
a minimum of two hundred and twenty (220) shares, i.e. one thousand one hundred dollars ($1,100.00) as
equity. Of this, one hundred dollars ($100) is the qualifying amount for membership, being 20 shares at a
nominal value of $5 per share, and is non-withdrawable except on the termination of membership. There is no
limit to the number of shares the Credit Union is authorised to issue.
2014
Number of
“Shares”
Balance - beginning of year as
previously reported
Less: Prior period adjustment
(Note 29)
Balance - beginning of year (as
restated)
Net shares purchased
Balance - end of year
Share
capital
$
2013
Number of
“Shares”
Share
capital
$
-
-
5,627,162
28,135,810
-
-
(5,102,243)
(25,511,215)
547,884
32,805
2,739,420
164,025
524,919
22,965
2,624,595
114,825
580,689
2,903,445
547,884
2,739,420
15 Statutory Reserve
The society maintains a reserve fund pursuant to Section 119 (2) of the Act, in which not less than
twenty percent (20%) of the net surplus before dividends are carried. In addition, all entrance fees,
transfer and other fines are carried to this fund.
2014
$
2013
$
(Restated)
Opening balance
Entrance fee
Add: 20% net surplus for the year
5,650,589
920
271,834
5,502,519
1,360
146,710
Closing Balance
5,923,343
5,650,589
16 Education Fund
In accordance with Section 23 sub-section 87 (1) of the St. Lucia Teachers’ Credit Co-operative’s bye-laws,
when the society indicates a surplus, at least 10% of that surplus will be transferred to an Education Fund.
Balance at beginning of year
Add: 10% net surplus for the year
Less: transferred to retaining earnings for training expenses
2014
$
2013
$
(Restated)
1,004,993
135,917
(237,735)
1,228,625
73,355
(296,987)
(30)
62
St.Lucia
Lucia
Teachers'
Credit
Co-operative
Limited
St.
Teachers’
Credit
Co-operative
Limited
Notes
Financial
Statements
Notestoto
Financial
Statements
December
31,
2014
December 31, 2014
903,175
Balance at end of year
1,004,993
17 Building Fund
In accordance with a resolution passed by members at the 21st AGM held on 24th June, 2007, when the society
indicates a surplus, at least 2% of that surplus will be transferred to a Building Fund. The Fund is to be used for
the acquisition of permanent office space and renovation.
By a resolution passed at the 29th AGM held on 06 April, 2014, allocation to the Building Fund is suspended
until reactivated by the AGM.
Add: allocation from net surplus for the year
$
2014
$
2014
$
(Restated)
312,946
–
298,275
14,671
312,946
312,946
18 Emergency Relief Fund
In accordance with a resolution passed by members at the 13th AGM held on 25th April 1999, when the society
indicates a surplus, at least 4% of that surplus will be transferred to an Emergency Relief Fund. The Fund is to
be used to assist members with natural disaster and man-made emergency relief as approved by the
Management of the Society.
By a resolution passed at the 25th AGM held on 06 June, 2010, the purpose was amended to include social needs
of members and a fund limit of $500,000 was set.
Add: allocation from net surplus for the year
Less: transfer to retained earnings for emergency relief expenses
2014
$
2013
$
500,000
132,182
(132,182)
500,000
1,360
(1,360)
500,000
500,000
(31)
63
Notes
to Financial
Statements
St.
Lucia
Teachers’
Notes
to Financial
December
31, Statements
2014
December 31, 2014
19 General Risk Reserve Fund
In accordance with a resolution passed by members at the 28th AGM on 19th May, 2013, when the society
indicates a surplus, at least 5% of that surplus will be transferred to a General Risk Reserve Fund. The Fund
shall, subject to the approval of the general membership, be used, in the business of the Society including
unforeseen losses, unexpected shortfalls in liquid cash, capital retention, recouping losses on investments, repair
and avoidance of external borrowing.
Add: 5% from surplus for the year
Contributions
2014
$
2013
$
(Restated)
36,678
67,958
–
–
36,678
–
104,636
36,678
20 Revaluation Reserve
The revaluation reserve arises on the re-statement of the Co-operative’s investments in Eastern Caribbean
Financial Holdings Limited, classified as available-for-sale, at fair value.
At the beginning of year
Unrealised loss on investments
At the end of year
2014
$
2013
$
44,716
(30,064)
108,730
(64,014)
14,652
44,716
(32)
64
Notes
to Financial
Statements
St.
Lucia
Teachers’
December
31,Statements
2014
Notes
to Financial
December 31, 2014
21 Operating Expenses
2014
$
2013
$
Stationery and office supplies
Security expenses
League dues
Auditing fees
Legal and professional fees
Insurance
Interest on loan refund
Cash overage/shortage
Emergency Relief Expense
Education Expense
68,622
34,535
56,143
23,480
13,032
20,523
19,521
309
132,182
237,735
68,382
33,069
18,539
19,158
33,762
21,274
–
36
1,360
296,987
Total operating expenses
606,082
492,567
22 Personnel Expenses
2014
$
2013
$
Salaries and wages
Staff expenses
Gratuity
436,956
27,602
16,895
354,647
13,354
23,153
Total personnel expenses
481,453
391,154
11
10
2014
$
2013
$
Advertising and promotions
Donation
AGM expenses
SLTCC 30th Anniversary Expense
14,376
25,701
43,590
5,304
18,418
18,286
40,687
–
Total marketing expenses
88,971
77,391
Average number of employee
23 Marketing Expenses
(33)
65
Notes
to Financial
Statements
St.
Lucia
Teachers’
Notes
to Financial
December
31, Statements
2014
December 31, 2014
24 Occupational Expenses
Utilities
Repairs and maintenance
Depreciation
Property tax
Interest on building loan
Rent Expense
Relocation Expense
Loss on Disposal
2014
$
2013
$
90,962
48,596
94,314
19,293
–
–
–
–
56,574
30,083
55,253
1,035
9,568
–
–
1,780
253,165
154,293
2014
$
2013
$
70,000
46,356
70,000
38,631
116,356
108,631
25 Board and Committee Expenses
Honorarium
Meeting and other expenses
26 Other Income
Insurance commission
Fees for statement
Loan processing fees
Sale of passbooks
Recovered loans
Gain On Foreign Exchange
Dividends
Miscellaneous income
Amortization of capital grant
Total other income
$
2014
$
2013
$
48,258
1,685
14,602
1,710
2,121
719
3,647
8,682
–
42,711
1,430
9,237
3,914
9,968
621
2,860
7,408
13,828
81,424
91,977
(34)
66
St.
Lucia
Teachers’
Notes
to Financial
Statements
Notes
to Financial
Statements
December
31, 2014
December 31, 2014
27 Related Party Transactions
Parties are considered to be related if one party has the ability to control the other party or exercise significant
influence over the other party in making financial or operational decisions.
In the normal course of business the Co-operative extends credit to members of the board of directors, credit
committee, supervisory committee and members and other key management personnel. These transactions are
entered into with related parties on commercial terms and conditions, at market rates.
Management
Personnel
$
Committee
Members
$
Board of
Directors
$
Total
$
Loan outstanding at January 1, 2014
Net issued/paid during the year
406,520
(25,252)
614,994
(295,284)
327,646
79,306
1,349,160
(241,230)
Loan outstanding at December 31, 2014
381,268
319,710
406,952
1,107,930
The following are the aggregate of Shares and Deposits of Board of Directors, members of the supervisory
committee and credit committee and other management personnel.
Management
Personnel
$
Committee
Members
$
Board of
Directors
$
Total
$
Shares & deposits at January 1, 2014
Net savings/withdrawals during the year
96,032
31,785
246,346
(94,722)
145,841
46,196
488,219
(16,741)
Shares & deposits at December 31, 2014
127,817
151,624
192,037
471,478
(35)
67
St.
Lucia
Teachers’
Notes
to Financial
Statements
Notes
to Financial
Statements
December
31, 2014
December 31, 2014
28 Prior Period’s Adjustment
Application of Accounting Standards
Education Reserve and Emergency Relief Reserve
Prior to 2014, education related cost and social needs and disaster assistance costs were charged directly to the
Education Fund and the Emergency Relief Fund respectively, in equity. Under the Conceptual Framework
issued by the International Accounting Standards Board, the amounts meet the definition of an expense. The
accounting policy of the Co-operative was changed to recognise the amounts in the statement of income. As
such the financial statements of 2012 and 2013 have been restated to reflect the change in accounting policy.
The effect of the restatement is summarized below:
Effect on
Effect on
2013
2012
$
$
Income statement
Emergency relief expense
(1,360)
(8,000)
Education expense
(296,987)
(202,619)
Decrease in net income
(298,347)
(210,619)
Statement of financial position
Decrease in retained earnings
(298,347)
(210,619)
Savings Security Share Accounts (SSSA)
Prior to 2014, the Co-operative reflected withdrawable shares as equity. This was contrary to IAS 32 and IFRIC
2. IFIC 2 stipulates that members shares in excess of the prohibition against redemption are liabilities unless the
entity has the unconditional right to refuse redemption or the members shares meet certain conditions under IAS
32.
At the 29th AGM held on April 06, 2014, members of the Co-operative passed a resolution mandating the
reclassification of shares to comply with IAS 32 and IFRIC 2. Shares which are withdrawable are now
classified as liabilities and reported as Members’ Savings Security Share Accounts (SSSA) and attract interest.
The change in accounting policy was applied retrospectively and in accordance with IAS 1, the financial
statements for 2012 and 2013 have been presented. The effect of the restatement is summarized below:
Effect on
Effect on
2013
2012
$
$
Income statement
Increase in interest expense
(949,325)
(878,401)
Decrease in net surplus
(949,325)
(878,401)
Increase in members’ savings and security shares accounts
2,040,330
25,522,215
(2,040,330)
(25,522,215)
Decrease in members’ shares
(36)
68
St.
Lucia
Teachers’
Notes
to Financial
Statements
Notes
to Financial
Statements
December
31, 2014
December 31, 2014
29 Prior Period’s Adjustment…..continued
Interest Accruals on Loans
Prior to 2014, the Co-operative adopted the modified cash basis of accounting for interest on Members’ loans
and advances. In 2014 the Co-operative changed its policy to recognise interest income from Members’ loans
and advances using the effective yield method in accordance with IAS 39. The change in accounting policy has
been accounted for retrospectively and the financial statements of 2012 and 2013 have been restated to reflect
that change. The effect of the restatement is summarized below:
Effect on
2013
$
Effect on
2012
$
8,426
188,389
Increase in net income
8,426
188,389
Increase in retained earnings
8,426
188,389
8,426
188,389
Effect on
2013
$
Effect on
2012
$
(1,360)
(296,987)
(949,435)
8,426
(8,000)
(202,619)
(878,401)
188,389
(1,239,356)
(900,631)
Income statement
Increase in interest income
The net effect of the above restatements is summarized below:
Income statement
Increase in relief expense
Increase in education expense
Increase in interest expense – SSSA
Increase in interest income – Accruals
accA
Decrease in net surplus for the year
(37)
69
St.
Lucia
Teachers’
Notes
to Financial
Statements
Notes
to Financial
December
31, Statements
2014
December 31, 2014
(expressedIn
inEastern
Eastern Caribbean
Caribbean dollars)
(Expressed
Dollars)
Effect on
2013
$
Effect on
2012
$
2,040,330
25,511,215
Equity
Decrease in members shares
(2,040,330)
25,511,215
Retained earnings
Decrease in net surplus
Transfer from Education Fund
Transfer from Emergency Relief Fund
Decrease in Building Fund
Decrease in Education Fund
Decrease in Statutory Reserve
Decrease in General Risk Reserve
Decrease in Dividend and Patronage Refund
(1,239,356)
296,987
1,360
24,787
123,936
247,872
61,967
949,435
(900,631)
202,619
8,000
18,012
90,063
225,158
–
878,401
466,988
521,622
Reserves
Decrease in Building Fund
Decrease in Education Fund
Decrease in Statutory Reserve
Decrease in General Risk Reserve
(24,787)
(123,936)
(247,872)
(61,967)
(18,012)
(90,063)
(225,158)
-
Decrease in Reserves
(458,562)
(333,233)
8,462
188,389
Liabilities
Increase in members savings and security shares accounts - SSSA
Increase in Retained Earnings
Assets
30. Commitments
The dates of the contractual amounts of the Co-Operative’s off-statement of financial position financial
instruments that commit it to extend credit to members are summarized in the table below:
3 months to
1 Year
$
Total
$
811,652
811,652
Notes
Statements
Asto
at Financial
December 31,
2014
December 31, 2014
Loan commitments
(expressed
in Eastern Caribbean
As at December
31, 2013 dollars)
Loan commitments
70
408,723
408,723
(38)
NOTES
NOTES

AGM Report - St. Lucia Teacher`s Credit Union

Transcription

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