ANNUAL REPORT

Transcription

ANNUAL REPORT

ANNUAL
REPORT
2013
Creating and Securing
Your Future
VISION
STATEMENT
To be the leading Credit Union
Co-operative in the Caribbean.
MISSION
STATEMENT
To improve the quality of life and sustain the
confidence of our members by providing excellent
returns, innovative products and superior services
through trustworthy, committed and well trained
employees and volunteers whilst maintaining good
governance.
TECU will continue on its drive to improve its service
efficiency to the benefit of its membership and the
wider society.
VALUES
TECU Credit Union Co-operative Society Limited is committed to:
• The co-operative philosophy and principles of volunteerism,
thrift, democratic governance – one member one vote,
member ownership and control and the respect for employee
and for his & her well-being
• The interest of our members at all times
• An established code of ethics including confidentiality,
integrity, honesty and mutual respect
• Visionary leadership, prudent
management and compliance with statutory regulatory bodies
• Continuous improvement of services and the introduction of
innovative products for the satisfaction of members
• An environment of excellence, through continuous
organisational learning, friendly and courteous service
• Preservation of the environment
• Good corporate citizen
TECU Credit Union Annual Report 2013
National Anthem
of Trinidad & Tobago
Forged from the love of liberty
In the fires of hope and prayer,
With boundless faith in our
destiny
We solemnly declare:
Side by side we stand,
Islands of the blue Caribbean Sea.
This our native land,
We pledge our lives to thee.
Here every creed and race
Find an equal place,
And may God bless our Nation.
Here every creed and race
Find an equal place,
And may God bless our Nation.
(Pat Castagne)
Credit Union
Prayer
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.
(St. Francis of Assisi)
1
Table of
Contents
National Anthem of Trinidad & Tobago
1
Credit Union Prayer
1
Notice of Annual General Meeting
3
Agenda4
Standing Orders
5
Minutes of Annual General Meeting 2013
7
Board of Directors
26
Report of the Board of Directors
28
Report of the Supervisory Committee 38
Report of the Credit Committee
Report of the Education Committee
41
43
Membership Update:
Co-operative Credit Union Legislation46
2
Statement of Management’s Responsibilities
51
Independent Auditors’ Report
52
Statement of Financial Position
54
Statement of Comprehensive Income
55
Statement of Changes in Members’ Equity
45
Statement of Cash Flows
57
Notes to the Financial Statements
58
Notice of
Annual General Meeting
(NO 67/2014)
Notice is hereby given that the 67th Annual General Meeting of
TECU CREDIT UNION CO-OPERATIVE SOCIETY LIMITED will be
held at PETROTRIN Pointe-A-Pierre Club on Friday, 2 May, 2014, at
4.30 pm. Registration commences at 2:30 pm.
• Receive the reports of the Board of Directors, Supervisory,
Credit and Education Committees and the Financial
Statements of the Credit Union for the year ended 31
December, 2013.
• Recommend the dividend to be paid to members for the year
ended 31 December, 2013.
• Elect Officers.
• Appoint Auditors.
• Resolutions
• Transact other ordinary business of the Credit Union.
Sandra Matthews-Noel
Honorary Secretary
3
Agenda
1. Call to order
2. Reading of notice convening meeting
3. Confirmation of minutes and matters arising there from Annual General Meeting No. 66/2013
4. Motion that the financial statements and all reports as
presented be taken as read
5. Adoption of reports:
(a) Board of Directors
(b) Supervisory Committee
(c) Credit Committee
(d) Education Committee
6. Adoption of financial statements
7. Election of officers:
(a) Supervisory Committee – 5
(b) Credit Committee – 5
(c) Board of Directors – 4
8. Movement of resolutions
9. Reading of correspondence
10.Presentation of awards
11. Discussion of general business
12. Destroying of the ballots
13.Vote of thanks
4
Standing Orders
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13. 14. (a) A member shall stand when addressing the Chairman.
(b) Speeches are to be clear and relevant to the subject
before the meeting.
A member shall only address the meeting when called
upon by the Chairman to do so, after which, he/she shall
immediately take his/her seat.
No member shall address the meeting except through the
Chairman.
A member may not speak twice on the same subject except:
(a) The mover of a motion who has the right of reply.
(b) He/she rises to object or to explain (with the permission
of the Chairman).
The mover of a “Procedural Motion” (Adjournment, Lay on the
table, Motion to Postpone) shall have no right of reply.
No speeches are to be made after the “Question” has been put
and carried or negated.
A member rising on a “Point of Order” is to state the point
clearly and concisely.
(A “Point of Order” must have relevance to the Standing
Orders).
(a) A member shall not “Call another member to order” but
may draw the attention of the Chair to a “Breach of Order”.
(b) In no event can a member call the Chairman to order.
Only one amendment should be before the meeting at one
and the same time.
When a motion is withdrawn, any amendment to it fails.
The Chairman shall have the right to a “casting vote”.
If there is equality of voting on an amendment, and if the
Chairman does not exercise his casting vote, the amendment is
lost.
Provision is to be made for protection by the Chairman from
vilification (personal abuse).
No member shall impute improper motives against another
member.
5
WHERE
FAMILIES
COME
TOGETHER
Providing for your family
can be tough work, but
with TECU on your side, we
guarantee the best and most
comfortable service to all our
members, so that they feel at
home with our credit union.
You can breathe a little easier
knowing that your family is
in good hands with TECU and
that we work to provide you
the best future possible.
6
6
TECU Credit Union Annual Report 2013 TECU Credit Union Annual Report 2013
Minutes of
Annual General Meeting 2013
No. 66/2013 HELD ON FRIDAY 10TH MAY 2013
AT THE PETROTRIN POINTE-A-PIERRE CLUB
1.0
CALL TO ORDER
1.0
The Chairman, Mr. Ronald F. Jones called the meeting to
order at 4:30 p.m.
The National Anthem was then sung by all present.
1.1
2.0INVOCATION
2.1
The members present were invited to say the Credit Union
Prayer.
3.0
MINUTE OF SILENCE
3.1
A minute of silence was observed for members who
passed away during the last year. Special mention was
made of long-standing member, Mr. Lloyd Zamore, who
passed away on January 31st 2013.
.
4.0
SAFETY BRIEFING
4.1
A safety briefing was given by Mr. Shastri Sankar of the PETROTRIN Fire Department, Pointe-a Pierre.
5.0
NOTICE CONVENING MEETING
5.1
The Chairman advised that at 4.30 p.m there were three
hundred and ninety-nine (399) members present at
the time of convening the meeting. As such, there was
77
(continued)
a quorum. He then invited the The Honorary Secretary, Mrs. Sandra
Matthews-Noel, to read the Notice of the Annual General Meeting.
6.0
ADOPTION OF STANDING ORDERS
6.1
A motion for the adoption of the Standing Orders for the 2013 Annual
General Meeting was moved by Mr. Shaffiat Ali and seconded by Mrs.
Lucille Jeffrey-James. All were in favour of the motion.
7.0
ACCEPTANCE OF THE MINUTES
7.1
Mrs. Cheryl Richards-Scott suggested that in light of the late delivery of
the 2012 Annual Report, members should be given the opportunity to
scrutinise the minutes before they could be taken as considered read. 8.0
ERRORS AND OMISSIONS
The Chairman, Mr. Ronald F.
Jones drew the meeting’s
attention to page 8 item 10.3.5,
the penultimate line “General
Managers’s assertion…”, to be
amended to read “General
Manager’s assertion…”
In order to avoid any one
misconstruing what he stated,
Mr. Brent Zephyrine, attempted
to qualify the statement attributed to him on page 10 item 11.1.9 which
read“…TECU Credit Union was second-to-last, at 2.75%, one up from the
lowest ranked Credit Union (Rhand Credit Union), which was offering
2.5%”.
He expounded that the statement was made in the context of fifteen
(15) Credit Unions which had declared their dividends as at 31st March
2013.
8
Mr. Ramsubir Ramsubhag implied that the matters pertaining to his
enquiry on the cost of the survey plan for Low Lands, Tobago and the
two (2) Special General Meetings in 2011 and 2012 were omitted from
the minutes.
The Chairman assured Mr. Ramsubhag that his submission would be
taken into consideration.
(continued)
9.0
ADOPTION OF MINUTES FROM ANNUAL GENERAL MEETING
No. 65/2012
9.1
Without any further errors and omissions, the Minutes of the 65th
Annual General Meeting, were subsequently taken as read. They
were adopted on a motion moved by Mrs. Cheryl Richards-Scott and
seconded by Mrs. Enid Boyce. All were in favour of the motion.
10.0
MATTERS ARISING
10.1Miscellaneous
10.1.1
Mr. Ramsubir Ramsubhag
enquired about the cost
of the survey plan for
the proposed building
of condominiums at
Low Lands, Tobago and
submitted to the Tobago
House of Assembly for
approval.
10.1.2
He also probed for feedback on the cost of the Special General
Meetings for the amendment of the Bye Laws.
10.1.3
The Chairman reiterated that there was no evidence of any survey
conducted at Low Lands, Tobago since 1977.
10.1.4
The Chairman also articulated to Mr. Ramsubhag, that should he have
any further queries pertaining to the Low Lands Tobago survey and the
cost of the Special General Meetings for the Bye Laws amendments
in 2011 and 2012, the Internal Audit Department would be instructed to
conduct an investigation and provide him with the findings through the
office of the General Manager.
10.1.5
Mr. Brent Zephyrine indicated that he was aware of the importance of
member service and shared the experience of his father who visited
TECU’s Marabella office on April 9th 2013. He opined that it was a
serious indictment on the management of the organisation that the
employees were not in a position to accurately respond to his father’s
enquiry on the rescheduled date of the Annual General Meeting.
10.1.6
He indicated that in 2012, colleagues at PETROTRIN came together and
wrote a formal letter of complaint to the Management of TECU on the
tardy service being offered by the organisation.
10.1.7
Mr. Zephyrine also shared the experiences of some members who were
utterly frustrated by TECU’s lack of member service.
9
(continued)
10.1.8
10.1.9
10.1.10
10.1.11
10.1.12
10.1.13
10.1.14
10.1.15
10.1.16
10.1.17
10.1.18
10
He suggested that proper mechanisms needed to
be put in place to deal with members’ concerns
in order to maintain the ability to influence the
membership and encourage members to take
loans.
Mr. Zephyrine, referring to page 22; items 21.32
and 21.33 of the 2012 Annual Report, enquired
about the effectiveness of the training to which
the staff was exposed.
The Chairman indicated that in 2012, TECU went
through a process of recruiting a new General
Manager, and the position was subsequently
filled by Mr. Brian Tangwell in February 2013.
He said that while there was a lot to be done, the new General
Manager should be given time to work with and mould the staff into a
team with the ability to provide good member service.
Mr. Shaffiat Ali stated that he has been a member of TECU Credit Union
for over fifty (50) years and recently spent over two hours at the credit
union just to collect a cheque.
He supported the contribution of Mr. Zephyrine that something needs
to be done to improve the services at TECU.
Mr. Ali also suggested that consideration be given to TECU having its
own foreign exchange department, to accommodate members who
may wish to send funds to their families who live abroad.
Mr. Anthony Soochit suggested that TECU acquire expertise in
communication, since this appears to be lacking in the organisation.
Mrs. Cheryl Richards-Scott shared her recent experience in processing
a transaction at TECU. The Chairman indicated that he was aware that
member service was an area of concern and assured that it will be
addressed within the coming year.
The Chairman responded to a query by Mrs. Richards-Scott on the
reason for members being subjected to long lines on a daily basis,
waiting to be attended to by one teller. He advised that the Board
recognised that space was limited on the first floor of the Marabella
branch and as such, consideration was being given to the possible
relocation of the member service area to the ground floor.
Ms. Cathy-Ann Lindsay advised that through her father’s persuasion, she
became a member of TECU Credit Union. She however, expressed the
(continued)
10.1.19
10.1.20
10.1.21
10.1.22
10.1.23
10.1.24
frustration she experiences in attempting to reach TECU via telephone,
which she articulated was not only almost impossible, but inconvenient.
Mr. Zephyrine drew the meeting’s attention to page 21; items 21.15
through to 21.17, and sought an update on the outcome of the matter
involving Mr. Anthony Soochit’s claim of missing funds and not being
able to get an audience with the General Manager.
The Chairman advised that the matter was investigated by the
Supervisory Committee.
Mr. Soochit indicated that he had a prearranged date and time to meet
with the current General Manager to discuss his matter. This did not
materialise because the GM was delayed due to traffic.
The General Manager indicated that prior to scheduling to meet with
Mr. Soochit, he confirmed with him that he received his letter and
advised that the matter was fully investigated and a report had been
prepared.
The General Manager also informed that he recommended to Mr.
Soochit that they meet to discuss the matter further and while a date
and time was agreed upon, the traffic incident could not have been
anticipated or avoided.
He articulated that his offer still stands and he was more than willing
to meet with Mr. Soochit to discuss his matter in detail.
11.0
BOARD OF DIRECTORS’ REPORT
11.1
The Chairman directed the meeting to the error on Page 27; Revenue
& Expenses; third line; “moving from $88.45M in 2011…” should read
“moving from $88.55M in 2011…”
Mr. Shaffiat Ali sought clarification on page 31 “Board Attendance” and
in particular the low attendance of Mr. Michael John.
The Chairman advised that Mr. John did not attend any meetings
because he had resigned before the end of his term.
A motion for the adoption of the Board of Directors’ Report was moved
by Mrs. Cheryl Richards-Scott and seconded by Mr. Norman Arjoon. All
were in favour of the motion.
Mr. Godfrey Ransome articulated that while TECU appears to be
sturdy from its assets size, he was concerned about the organisation’s
performance trend, reflected by its surplus.
He noted that return on assets have declined considerably since 2009
and continues its downward spiral.
11.2
11.3
11.4
11.5
11.6
11
(continued)
11.7
11.8
11.9
11.10
11.11
11.12
11.13
11.14
11.15
11.16
11.17
12
The Chairman advised that
in the budget, it is reflected
that there had been growth
from a surplus of $26M in
2012, to a proposed surplus
of $37M in 2013.
Mr. Ransome stressed that
TECU’s surplus was not
in sync with its returns on
assets, which continue to
decline.
The Honorary Treasurer, Mr. Mitra Attai, concurred with the observation
made by Mr. Ransome. However, he pointed out that in the surplus for
2012, provisions had increased significantly.
He indicated that in 2010, TECU had to impair $28M, which was
possible, due to the strength of the reserves built over the years.
Mr. Attai said that in the current economic environment, which was not
unique to TECU or Trinidad & Tobago, in addition to limited investment
opportunities and despite extremely low lending rates, the appetite for
borrowing was very low.
He indicated that while the assets were available, TECU was exercising
caution in getting into risky investments, and as such, the current
conservative model ensured that the organisation would be able to
withstand any future financial shock.
Mr. Attai advised that this year’s provisions were in line with the best
prudential standards.
He also indicated that TECU, being an organisation that attracts net
savers, have done some studies of the demographics, looking at the
age profile of its members. TECU is currently engaged in offering
products that will attract the younger age groups, who may be looking
to purchase a house or vehicle.
Mr. Attai assured however, that members’ funds were safe and that
TECU will take advantage of good opportunities wherever they arise.
Referring to page 29, Dividend Rates, Mr. Zephyrine commented on the
dividend payment of 2.75% offered by TECU for 2012.
He advised that while there were other Credit Unions, such as Venture
Credit Union, who gave 8% in 2011 and 2012 and Works Credit Union,
who gave 3% in 2011 and 2012, there were others who improved in their
dividend payments, such as:
(continued)
Rhand Credit Union, who
offered 2.5% in 2011 and 3%
for 2012
Neal & Massy Credit Union,
who went from 5% in 2011 to
5.5% in 2012
Agricola Credit Union who
went from 4.5% in 2011 to
5.2% in 2012
Aero Services Credit Union
who went from 4% in 2011 to
5% in 2012
Mr. Zephyrine noted that while TECU may not have decreased in
its dividend percentage payout for 2012, he suggested that the
performance of other credit unions be used as an impetus for
improvement.
The Chairman acknowledged the presence of specially invited guests:
Representatives of the Ministry of Labour, Small & Micro Enterprise
Development ( Ms. Debra Ann Scott, Mr. Franklyn Persad, Ms. Irene
Hamid, Ms. Sabrina Badree, Ms. Avilon Perry, Ms. Elizabeth Spence, Ms.
Carlene Cayene, Ms. Marine Pierre, Mr. Renrick Yacoob, Ms. Anila Singh
and Mr. David Moe);
Representative from Hobsons (Mr. Romney Thomas);
Representatives from Canning’s Credit Union (Mr. Stephen Atwell and
Ms. Lorraine Ragbir)
Mr. Mark Aggerholm of LinCU Limited
Mr. Wayne Estrada of CUNA Caribbean Insurance Society
Mr. Anthony Pierre of Deloitte & Touche
12.0
CREDIT COMMITTEE REPORT
12.1
A motion for the adoption of the Credit Committee Report was moved
by Mr. Kelvin Alfonzo and seconded by Mrs. Marjorie Leiba. All were in
favour of the motion.
13.0
EDUCATION COMMITTEE REPORT
13.1
A motion for the adoption of the Education Committee Report was
moved by Mr. Shaffiat Ali and seconded by Mr. Zachery Valere. All were
in favour of the motion.
11.18
11.19
13
(continued)
14.0
SUPERVISORY COMMITTEE REPORT
14.1
A motion for the adoption of the Supervisory Committee Report was
moved by Mr. Shaffiat Ali and seconded by Mr. Merlin Zephyrine. All
were in favour of the motion.
15.0
FINANCIAL STATEMENTS
15.1
The Independent Auditors’ Report was read by Mr. Anthony Pierre of
Deloitte & Touche.
Mr. Brent Zephyrine sought an explanation for TECU’s failure to apply
by the stipulated time, to the Government of the Republic of Trinidad
& Tobago (GORTT), for the repayment of the balance of the principal
amount invested in CLICO and why they opted to allow the investment
to be reverted to CLICO for settlement.
Mr. Mitra Attai explained that further to the disclosure of full exposure
to CLICO that was in distress at that time, the GORTT announced a
window of liquidity for the Credit Union, but the terms and conditions
were not known at that time.
He indicated that in 2012 when the terms and conditions were
revealed, TECU presented its claims to the paying agent, but there
were differences between the claimed figures and what existed on
their system. As such, where there were no differences, the claim was
accepted and processed, amounting to a total of $62M, paid in two (2)
tranches of 50% each.
For the benefit of the membership, Mr. Attai further informed that in
2009 when the Government announced that CLICO was in distress
and that payments would be guaranteed, TECU had three (3) policies
maturing during that period, and while the first policy was paid,
payment on the second policy was rescheduled on the request of
CLICO.
He indicated that TECU agreed to the reschedule and to split the
payment in three (3) tranches, but CLICO failed to honour the first and
second.
Mr. Attai informed that the Board met with CLICO in 2009 to discuss
the policies that were still in effect and agreed on the accrual of the
interest.
He advised that the policies had accrued approximately $28M in
interest as at December 31st 2009, and based on the new arrangement
agreed upon, CLICO commenced quarterly payments, which to date
amounted to just below $7M.
15.2
15.3
15.4
15.5
15.6
15.7
15.8
14
(continued)
15.9
15.10
15.11
15.12
15.13
15.14
15.15
15.16
15.17
15.18
15.19
Mr. Attai further advised that in 2010, the
original arrangement put forward by the
previous Government was reversed by
the newly elected Government.
He indicated that the Independent
Auditors who were verifying the policy
holders’ amount used the original
figure that was on the face value of
the policy, which the Board reviewed
and felt that TECU should enter into a
legal arrangement with CLICO, with the
understanding that there was Government assurance that they would
honour the liability.
He articulated that the Board felt that legitimate expectations were
created from the arrangements made for the quarterly payment of
interests on the impaired $28M.
Mr. Attai assured that the Board was actively pursuing the matter with
the Ministry of Finance.
The Chairman noted that the Board believes TECU has a good case,
since payment on the revised principal, inclusive of the interest, had
already commenced.
Mr. Zephyrine asked whether the delay in the timely completion of the
Financials was due to the fault of the Auditors or TECU’s tardiness in
providing the information.
The Chairman indicated that the late start of the audit affected the
targeted completion date.
Mr. Soochit articulated that the rescheduling of the AGM had placed
the Credit Union in an embarrassing position and that hosting the
meeting on a Friday resulted in the low turnout.
Mr. Ramsome sought clarification on Loan Loss Expense and Provision
for bad and doubtful debts (“Administration and Other”) on page 79 of
the Financial Statements.
Mr. Attai explained that Loan Loss Expense represents the accounts
receivable, while the Provision for Bad and Doubtful Debts was an
increase in the provision for 2012, as reflected on page 69; note 10A of
the Financial Statements.
Mrs. Cathy-Ann Lindsay, referring to page 72; item 21 “Group Life
Reserve” expressed concern with the fact that TECU continues to
conduct business with CLICO despite what was taking place, and
15
(continued)
15.20
15.21
15.22
15.23
15.24
15.25
15.26
15.27
15.28
15.29
15.30
15.31
16
suggested that the organisation consider the use of another provider
who offers the same facility.
Mr. Attai advised that CLICO has been honouring all the claims
submitted and as such there was no reason to consider another
provider at this time.
The Chairman articulated that while the community appears concerned
when the name CLICO is mentioned, the historical performance of this
instrument continues to work very well for the Credit Union and its
members. He assured that the insurance aspect of the business is well
secured.
Mrs. Cheryl Richards-Scott said that she was concerned about
the information presented on page 75 “Restatements and ReClassifications” and in particular, the indication highlighted in the report
that “adjustments and re-classifications….were made to correct errors…”
She also expressed concern for the information highlighted on page 77,
which indicated that prior year adjustments made to Members’ Equity
for 2010 and 2011, were previously computed incorrectly.
Mr. Mitra Attai indicated that the incorrect computation did not incur
any loss to the organisation; the issue however, was how it was
presented.
Mrs. Richards-Scott requested that within one (1) week, the Board
identify where $31M , representing the RBTT five (5) Year Certificate of
Deposit, was previously incorrectly applied in the accounts.
She also complemented the Auditors for the format of their
presentation of figures and the indication of areas that were at risk in
the organisation.
Pertaining to page 74; “Assets”, Mrs. Richards-Scott highlighted that
the figure for 2011, representing Loans to directors, key management
personnel, and close family members was incorrect.
The Chairman assured that the inaccuracy would be investigated.
Mrs. Cheryl Richards-Scott highlighted the absence of a breakdown of
the operations and a full report on business losses of the organisation,
as she requested at the last AGM.
She sought clarification for the caption in the Financial
Statements,“Janitorial Services” and “Security” on pages 79 and 80
respectively.
Mr. Attai advised that the figures on page 79 represented the core
Insurance business, while the figures on page 80 represented the rental
aspect of the business.
(continued)
15.32
15.33
15.34
15.35
15.36
15.37
15.38
15.39
15.40
15.41
15.42
15.43
Mrs. Richards-Scott asked
for an explanation on the
“Miscellaneous” figures
captioned under “Other
Income” on page 72.
Mr. Attai advised that
the figures represented
commission and fees, in
addition to profits from the
sale of lands.
Mrs. Richards-Scott sought
an explanation for the reason for the loss suffered by the Travel Agency
and the Couva Branch.
Mr. Attai explained that with regard to the Travel Agency, a major
contributor to the increase in expenses was staff separation and the
increase in losses, while the losses at Couva pertained to the rental
aspect of the organisation.
In response to Mrs. Richard-Scott’s query on the status of the
negotiation with another travel provider, Mr. Attai advised that the
Board is considering other options.
Mrs. Richards –Scott also sought clarification for what is classified as
operations on page 79 of the report “Administration and Other”.
The Chairman advised that this represents the cost of running the
business and assured that a detailed breakdown would be given in next
year’s report.
Ms. Sandi Salamath queried what was classified as “Loss on disposal of
investment” on page 79 of the report.
Mr. Attai explained that TECU made a Bond investment associated
with Gulf Insurance, who had made two payments, but subsequently
ran into cash flow difficulty and as such were not able to honour their
commitment.
He further advised that the company was eventually sold, but the
proceeds were insufficient to pay the face value of the bond.
Mr. Zephyrine highlighted discrepancies in the Financial Statements,
specifically related to “Legal & Professional Fees”.
He indicated that the Legal & Professional Fees for 2011 were stated
as $349,876 in the Financial Statement (page 79), but captioned as
$37,638 in the 2011 Annual Report.
17
(continued)
15.44
15.45
15.46
15.47
15.48
15.49
15.50
15.51
15.52
15.53
15.54
15.55
18
Mr. Zephyrine also referred to page 59 of
the 2011 Annual Report, which highlighted
the Legal & Professional fees for 2011 as
$209,757 and $435,300 in 2010.
He indicated that the reports bear very
troubling inaccuracies and requested
that they be rectified and requested an
explanation for the increase in the Legal
and Professional fees in 2012.
Mr. Attai advised that the major contributor
for the increase was associated to
professional fees related to a Strategic Planning exercise.
Mr. Zephyrine, referring to page 47 “(loss) /gain on foreign currency
translation”, asked for an explanation for the loss of $182,442 in 2012,
after a significant gain of $1,074,480 in 2011.
Mr. Attai indicated that this represented the movement of foreign
currency transactions and the difference in the exchange rate.
He informed that the exchange rate in 2011, with respect to the foreign
currency transaction, was 6.4093% and 6.3815% in 2012.
Mrs. Camille Cova said, that in light of the concerns raised by Mrs.
Richards-Scott, and the discrepancies pointed out, she was surprised
that the chair was willing to move a motion to accept the Financial
Statements.
She also articulated that the Accounts should not be presented if the
Supervisory Committee did not validate the accounts.
Mr. Attai advised that the errors highlighted, did not mean that the
transactions were not recorded in the books of the Credit Union, but
that they were under an inappropriate account heading.
He indicated that this was corrected by restating the previous year’s
figures.
Mr. Shaffiat Ali, referring to page 72; item 23, “Other Income”
recommended that TECU look into the legal aspect of having an
Exchange Bureau in the Credit Union.
Mr. Brent Zephyrine, in an attempt to qualify a statement made by a
previous speaker in relation to the errors pointed out earlier under
Legal & Professional fees, advised that he had identified obvious
inaccuracies that were documented in 2010, 2011 and 2012 and not
inappropriate headings, as suggested by Mr. Attai.
(continued)
15.56
The Financial Statements were adopted on a motion moved by Mr.
Shaffiat Ali and seconded by Mr. Cecil. Lewis.
77 members were in favour
31 members against
10 members abstained
16.0
ELECTION OF OFFICERS
16.1
The Chairman articulated that in preparation for the pending legislation
and in the interest of transparency and fairness, the process for the
elections of officers will be presided over by Ms. Debra Ann Scott from
the Office of the Co-operative Development Division of the Ministry of
Labour.
He advised further, that when the new Bye-Laws are put in place, it
would give the organisation an opportunity to select a Nomination
Committee to aid the election process.
Supervisory Committee:
Mr. Stephen Ramsden nominated the following members: Ms.
Rosemarie Smith, Mr. Hercial Vitalis, Mr. Ken Traboulay and Mr. Donan
Taylor. The nominations were seconded by Mr. Holdan James. Mrs.
Sandra Matthews-Noel nominated Mr. Anthony Solomon. This
nomination was seconded by Ms. Elaine Brown. Mr. Peter Machikan
nominated the following members: Mr. Lester Maharaj and Ms. Joy-ann
Ali. The nominations were seconded by Mrs. Tracy Ramsden-Boyce.
Ms. Debra Ann Scott, reciting a correspondence from Ms. Joy-ann
Ali relayed regret for her early departure from the meeting prior to
its completion, but expressed her willingness to serve on the Credit
Committee.
Mr. Attai nominated the following member: Mr. Norman Arjoon. This
nomination was seconded by Mr. Leonard Chan Chow.
A motion to cease nominations was made by Mr. Shaffiat Ali and
seconded by Mr. Daniel Lewis.
The following members were elected to the Supervisory Committee:
Ms. Rosemarie Smith 248
Mr. Ken Traboulay
234
Mr. Hercial Vitalis
197
Mr. Anthony Solomon
177
Mr. Donan Taylor
172
Mr. Norman Arjoon
115 (1st Alternate)
Mr. Lester Maharaj
107 (2nd Alternate)
16.2
16.3
16.4
16.4
16.5
16.6
16.7
19
(continued)
16.8
16.9
16.10
16.11 16.12
16.13
16.14
20
Credit Committee:
Mr. Orville Andrews nominated the following members: Mr. Larry
Lalchan, Mrs Inga Crichlow, Mr. Orville Wolsey, Mrs. Lucy Ottley and Mr.
Stephen Tang. The nominations were seconded by Ms. Enid Boyce. Mr.
Peter Machikan nominated the following member: Ms. Joy-ann Ali. This
nomination was seconded by Mrs. Sandra Matthews-Noel. Mr. Ricardo
Albert nominated Mr. Wesley Huggins. This nomination was seconded
by Mrs. Lisette Weekes-Warner.
A motion to cease nominations was made by Mr. Daniel Lewis and
seconded by Mr. Edison Alexander.
The following members were elected to the Credit Committee:
Mr. Stephen Tang
226
Mrs. Inga Crichlow
220
Mr. Orville Wolsey
213
Mrs. Lucy Ottley
213
Mr. Larry Lalchan
211
Mr. Wesley Huggins 110 (1st Alternate)
Ms. Joy-ann Ali
94 (2nd Alternate)
Board of Directors:
Mr. Knolly Dorner nominated the following members: Mr. Brent
Zephyrine, Mr. Stephen Ramsden. The nominations were seconded
by Mr. Harold Woodruffe. Mrs. Cheryl Richards-Scott nominated the
following members: Mr. Leonard Chan Chow, Mr. Neal Ramasra, Mr. Kent
Byer and Mr. Peter Machikan. The nominations were seconded by Mr.
Ronald F. Jones.
For the purpose of clarification, on a question raised by Mr. Gregory
Cova, it was indicated that according to TECU’s Bye-Laws, there are
twelve (12) Directors, of which four (4) demit office and eight (8) remain
at the time of the AGM.
It was further explained that when Mr. Peter Machikan was elected in
2012, it was to serve the unexpired term of Mr. Michael John, who had
resigned his position before the end of his three (3) year term.
Ms. Debra Ann Scott revealed that the following members of the
Board were demitting office at the end of the AGM:
Mr. Kent Byer
Mr. Ian-Michael Haynes (statute barred)
Mr. Peter Machikan
Mr. Leonard Chan Chow
Mr. Neal Ramasra
(continued)
16.17
16.18
17.0
Mrs. Camille Cova nominated the following member: Mr. Gregory Cova.
This nomination was seconded by Mr. Shaffiat Ali. A motion to cease nominations was made by Mr. Gerald Skeete and
seconded by Mr. Merlin Zephyrine.
The following members were elected to the Board:
Mr. Brent Zephyrine 190
Mr. Kent Byer
164
Mr. Leonard Chan Chow
163
Mr. Gregory Cova
130
Mr. Stephen Ramsden
119 (1st Alternate)
Mr. Peter Machikan
117 (2nd Alternate)
Mr. Neal Ramasra
115
A motion for the destruction of the ballots was moved by Mrs. Inga
Crichlow and seconded by Mr. Robert Andrews and agreed to by the
meeting.
APPOINTMENT OF AUDITORS
17.1 Mr. Mitra Attai advised that the tendering process for the selection of
external Auditors was conducted and the following firms were invited:
PKF
Ernst & Young
KPMG
Deloitte & Touche
PriceWaterhouse Coopers Limited
Mr. Attai indicated that Ernst & Young and PWC declined, while Deloitte
& Touche did not meet the closing date of the tender, 22nd April 2013.
As such, he proposed that KPMG be appointed as Auditors for the next
fiscal year 2013.
This proposal was seconded by Mr. Shaffiat Ali. One member voted
against the proposal.
18.0 MOVEMENT OF A RESOLUTION TO DECLARE A DIVIDEND OF
2.75% TO BE RATIFIED
18.1 Resolution to declare the ratification of a dividend payment of 2.75%
for 2012 was moved by Mr. Anthony Solomon and seconded by Mrs.
Cheryl Richards-Scott. The motion was carried with one member voting
against.
21
(continued)
19.0
RESOLUTION FOR THE WRITE-OFF OF BAD DEBTS & INTEREST
19.1
A motion to write-off $317,612.14 and $223,972.34, representing 46
outstanding loan balances in excess of 48 months, plus interest
accrued, respectively, was moved by Mr. Mitra Attai and seconded by Mr.
Stephen Ramsden. The motion was carried with one (1) member voting
against.
20.0
PRESENTATION OF AWARDS
20.1
Member of the Year – The recipient of the Member of the Year award
was Mr. Edison Alexander, who joined the Credit Union on 12th July
1978.
Door Prizes :
1st Prize – One week for two at TECU Coral Reef Guest House, Tobago
won by Mr. Vernal Phillip, holder of ticket #1026
2nd Prize – One week at TECU Mayaro Beach Resort won by Ms. Lynda
Bramble, holder of ticket #909
3rd Prize – One weekend at TECU Mayaro Beach Resort won by Ann
Marie Gonzales, holder of ticket #727
21.0
GENERAL BUSINESS
21.1
Mr. Shaffiat Ali, speaking on behalf of the members assembled,
welcomed the new General Manager, Mr. Brian Tangwell.
He indicated that for the time that he has been a member of TECU, it
was the first time that an AGM had been postponed.
Mr. Ali also expressed gratitude to Mr. Ricardo Albert for the assistance
given to him in conducting a foreign transaction and opined that he was
an asset to the organisation.
He took the opportunity to extend Mothers’ Day greetings to all
mothers.
Ms. Bernadine Elcock advised that she sought sponsorship from TECU
for her daughter, who was selected to attend the World Championship
for Performing Arts in 2013 in Hollywood, and while her request was
accepted by another Credit Union, it was rejected by TECU.
She therefore enquired on the requirements for sponsorship by TECU.
The Chairman acknowledged receipt of the request but indicated that it
was rejected because it did not add value to the organisation.
Ms. Elcock expressed her disappointment in the Chairman’s response
and that of the Credit Union.
21.2
21.3
21.4
21.5
21.6
21.7
21.8
22
(continued)
21.9
21.10
21.11
21.12
21.13
21.14
21.15
21.16
21.17
21.18
21.19
21.20
21.21
21.22
21.23
Mr. Harold Woodruffe noted that in the area of “foreign currency
translation”, the budget for 2012 was $432,000 and the actual was
$182,000.
He indicated that the budget for 2013 was the same as 2012 and
enquired whether provision was made to counteract the events of 2012
to prevent any loss in 2013.
Mr. Mitra Attai advised that in 2012 TECU suffered a loss of $182,000
and the projected figure for Foreign Currency Translation in 2013 is
$432,000. This was in anticipation of the value in the foreign currency
and the movement of same.
Mr. Krisindeo Narine suggested that the next AGM should be scheduled
two (2) weeks after the annual report had been distributed.
Mr. Martin Gibbs advised that he purchased a vehicle through TECU’s
Couva branch, and while he was in a position to purchase the vehicle
for cash, he took a loan, on the advice of TECU.
He indicated that arrangements were made for the loan to be paid
through FCB on the 30th of the month; however TECU did not receive
the funds until the 3rd of the following month.
Mr. Gibbs further advised that in attempting to bring his loan payments
up to date, he visited TECU to withdraw funds from his shares and was
told that he had to pay interest on the outstanding loan balance before
he can be issued the cheque.
He requested that the interest be debited from the cheque, but was
informed that this could not be done and that he should present the
cash for the interest payments prior to receiving his cheque.
He recommends that training be provided for staff in the various TECU
offices on how to handle these matters.
Mrs. Stephanie Ram enquired about the possibility of offering retirees
discount for TECU’s Beach Houses.
The Chairman assured that consideration would be given.
Ms. Lindsay recommended that TECU revisit the booking process for the
Beach House facilities.
Mr. Peter Machikan sought an update on the Chaguanas lands project.
The Chairman advised that the land continues to be prepared, but
with the development of an area south of the project by the Housing
Development Corporation (HDC), a lot of water was seeping onto the
land and as such it had to be backfilled.
He indicated that there were two (2) squatters on the land and action
has since been taken against them and arrangements are being made
to demolish the houses.
23
(continued)
21.24
21.25
21.26
21.27
21.28
21.29
21.30
21.31
21.32
21.33
21.34
The Chairman indicated that the backfilling commenced on 8th April
2013 and is about 95% complete, with the next step being to construct
drainage, installation of water mains and construction of roadways.
He informed that all statutory approvals (WASA, T&TEC, EMA) have
been obtained and lots are expected to be available for distribution in
the first quarter of 2014.
The Chairman said that a suitable market price for the 85 lots is
currently being calculated.
Mr. Anthony Soochit inquired about the criteria being used for the
distribution of the 85 lots.
The Chairman advised that a Committee would be appointed to
develop criteria for the distribution.
Mrs. Millicent Ramcharan advised that on two (2) prior occasions, her
daughters, who have since migrated, were holders of door prizes and
were told that the voucher was not transferrable.
The Chairman invited Mrs. Ramcharan to visit the office of the General
Manager to have the matter resolved.
Mrs. Tracy Ramsden-Boyce asked whether TECU had any plans to
utilise technology to increase the rate at which data is assimilated. She
suggested that this facility may pose to be an advantage and possible
attraction to members, who may not want to take time off from work to
stand in long lines at TECU to conduct business.
The General Manager (Mr. Brian Tangwell) was invited to give a brief
insight into his plans to take TECU forward.
Mr. Tangwell advised that the current system is going to be enhanced
to facilitate tele-banking facilities that would create a platform for the
younger demographic (18-45 age group).
He expressed gratitude for the experience of being present at TECU’s
AGM, and indicated that a back-up system for the front line staff is
currently being addressed.
22.0
VOTE OF THANKS
22.1
The Annual General Meeting concluded at 9:00 pm with a vote of
thanks by Mr. Kent Byer.
Honorary Secretary
24
WHERE
FUTURE
LEADERS
COME
TOGETHER
Today’s graduates, tomorrow’s
leaders. Keeping your future
bright and promising is
always a good thing. TECU
and its members know the
importance of working with
the future in mind. And by
future we mean not only
the world around us, but us
ourselves.
25
Mit
ra
Jones, Pr
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a Warn
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Sandra Ma
tt
roy Fermin
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Pilgrim-Brist
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L
en
mm
Ge
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Se
ter
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tZ
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r
B
rd Chan Cho
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L.L
26
ice-Pre
sid
-Noel, Hono
ra
na
o
e
Honorary Tr
ea
ry
ws
he
e r, V
y
tB
i,
ta
t
A
. Hercules
ephyrin
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dF
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Ro
Board of Directors
Report of the
Board of Directors
For the Financial year ended December 31, 2013
Fellow Co-operators,
Your Board of Directors takes pleasure in submitting this report on
its stewardship for the fiscal period under review, January 1, 2013 to
December 31, 2013. The following members comprised the Board:
Ronald F. Jones President
Kent Byer Vice President
Mitra Attai
Honorary Treasurer
Sandra Matthews-Noel Honorary Secretary
Gemma Warner
Member
L.L. Hercules Member
Peter Lyons Member
Leonard Chan Chow
Member
Leroy Fermin
Member
Carol Pilgrim-Bristol Member
Gregory Cova
Member
Brent Zephyrine
Member
Economic Review
In 2013, world economies saw a transformation in growth patterns.
Advanced economies saw growth prospects whilst emerging
markets experienced a slowing in growth. During the first half of
2013, world output grew by 2.5%. Economists at the International
Monetary Fund (IMF) believe that global activity will strengthen
moderately in 2014.
In the Caribbean, high debt levels, weak competitiveness and
economic challenges continued to shadow the region, placing
pressures on financial policies. The Caribbean economy grew by
1.7% in 2013 versus growth of 2.3% in 2012.
In the first half of 2013, the Trinidad and Tobago economy grew by
2.3% according to Central Bank reports. The International Monetary
Fund (IMF) expected an annual growth rate of 1.5% for 2013 as they
believe that supply constraints, including maintenance operations
in the energy sector and the industrial dispute in the non-energy
sector, accounted for the shortfall.
Business lending in Trinidad and Tobago continued to decline within
the first eight months of 2013. This led to high liquidity levels within
the banking sector for the period. Private sector borrowing though
slow, was relatively steady within the first seven months of 2013.
27
(continued)
Consumer lending continued to strengthen, increasing by almost 6.5 % (between
2012 and 2013) in July from 6.2 % in June 2013. On the other hand, business
loans contracted for the eighth consecutive month, falling by 5 % in July 2013.
Real estate mortgage loans maintained its strong double digit growth.
The year 2013, proved to be a challenging year for TT Dollar denominated
investments. The Trinidad and Tobago Government issued only two TTD bonds
(May and August) in the last year. Many companies opted to restructure existing
facilities to take advantage of the low interest rates in order to reduce interest
expenses.
On the equity end, the listing of First Citizens Bank provided much needed
excitement in the markets as the Government of Trinidad and Tobago offered
20% of its 100% stake to the public. The oversubscription of the stock coupled
with the 83% appreciation in its 4 month stint on the exchange was proof of the
demand created in the market.
General Overview
With roots dating back to 1946, TECU Credit Union is proud of its long history
of providing exceptional value to its members, covering all of their major,
personal financial needs. From residential to medical, automotive to educational,
travel to leisure, TECU has all of the essentials covered. The Credit Union’s 149
employees serve 37,647 members in three (3) locations; Marabella, Couva and
Point Fortin. TECU is Trinidad and Tobago’s largest financial co-operative and
it remains firmly committed to a core set of principles which makes it different
from other financial institutions—Member Ownership, Member Centric, Judicious
Decision Making, and Community Support. Its members continue to share directly
in the credit union’s success through dividends, new products and services, and
community support.
As the financial services sector continues to navigate through the back end of
the world financial crisis, TECU’s Board and Management remain ever vigilant to
seize opportunities that ensure that we traverse the uneven financial landscape
of depressed investment rates, modest economic growth and all time high
liquidity—one step at a time. In 2013, the credit union focused on key priority
areas that will help us achieve our long-term vision:
•
Reinforcing our commitment to Members First—our member service
philosophy
•
Implementing internal systems, controls and best practices to improve our
service delivery efficiency
•
Continuing our commitment to our communities through socially
responsible activity
28
(continued)
•
Establishing a Call Center as a pilot project
•
Supporting our employees’ professional training and development
•
Introducing products to service member needs
During the past year we have continued to strenuously advocate for members’
rights and work together with regulatory bodies to ensure that the quality of
products that our membership enjoys is not compromised. TECU’s Board and
Management are mindful of the need for proper and equitable regulation to
ensure the safety and security of members’ investments and the sustainability of
the institution.
Year in Review
The mantra adopted by TECU’s Board and Management for 2013 was to increase
value to our treasured members by re-thinking, re-valuing and re-dedicating our
efforts to better serve major stakeholders. The Operating Net Surplus for the
fiscal year ending December 31, 2013 was $39.3M ($26.4M for the corresponding
period in 2012).
Loans to Members increased by 9% from 2012 to 2013 or $49.1M, (loan portfolio
in 2013 stood at $582M as opposed to $532.9M in 2012 – all figures are net of
an unchanged Provision for Loan Losses of $21.9M). The growth in the lending
portfolio more than doubled the previous increase and was a major achievement
given the aggressive competition amongst other players in the financial and
non-financial services sectors, (total loans granted in 2013 amounted to $270.2M
compared with $236M in 2012).
The reason for the steep increase in lending was due to the Credit Union’s thrust
to improve our loan processing, be more visible in the communities (as evidenced
by our marketing efforts in the print and electronic media) and our vehicle
caravans with the major car dealerships.
Consistent with the increase in the loan portfolio, TECU’s income outstripped the
4.7% increase in income from 2011 to 2012 to record a 7.4% improvement at the
end of the last fiscal period, (the increase amounted to $5.75M). Member’s shares
balance of $1,183M, surpassed the $93M growth from 2011 to 2012, to an increase
of $114M between 2012 and 2013. This underscores the tremendous confidence
bestowed by the membership; a gift that is treasured by all who serve TECU.
Total Assets increased to $1,669M (9% year over year or $137M over 2012 total
assets of TT$1,532M).
The Board, Management and Oilfield Workers Trade Union (OWTU) successfully
concluded negotiations in February of 2013 relating to employee salaries
and benefits for the period 2010 to 2012. The staff received their revised
remuneration from March 2013. TECU applauds the efforts and inputs from all
29
(continued)
of the major stakeholders to realise the double digit settlement figure. Special
mention should be made of the invaluable contribution of the OWTU and
the credit union’s representatives for the spirit of compromise and respectful
candour demonstrated throughout the process.
TECU continued to assiduously follow up with the Ministry of Finance and the
Economy with regard to our claim submission for outstanding investments with
Clico. The credit union met the submission deadline of May 31, 2013 for receipt
of payment from the government plan and simultaneously lodged a query to the
Minister of Finance for a review of TECU’s matter. Since then, dialogue with the
Minister’s office and CLICO has been ongoing with a view to resolving the issue.
The following tables highlight the major changes in TECU’s performance during
the last financial year:
2013
TT$M
2012
TT$M
1,668,720,318
1,531,551,083
137,169,235
8.96
1,529,077,241
1,410,890,152
118,187,089
8.38
1,183,760,836
1,070,071,050
113,689,786
10.62
582,051,734
532,859,624
49,192,110
9.23
270,209,085
235,969,434
34,239,651
14.51
91,204,111
88,145,784
3,058,327
3.47
Expenses
52,429,699
62,020,629
-9,590,930
-15.46
Operating Surplus
39,293,960
26,429,465
12,864,495
48.67
Assets
Liabilities
Members’ Shares
Loans to Members
Loans Granted
Income
Membership
30
2013
37,647
Changes 2013 - 2012
TT$M
∆%
Changes 2013 - 2012
2012
Amount
%
1,911
5.35
35,736
(continued)
Financial Results
Loan Balances 2009–2013 ($ million)
Growth in Assets 2009–2013 ($ million)
600
2000
500
1500
1000
1,355.1
1,375.1
1,419.4
1,531.5
1,668.7
541.9
511.7
532.9
582.0
2009
2010
2011
2012
2013
300
100
2009
2010
2011
2012
2013
Assets increased by 9% due to an
increase in the Investment and
Lending portfolios. TECU continues
to lend prudently and positively
contribute to the lives of our
members.
Growth in Long Term Investments 2009-2013
800
700
600
500
400
300
200
100
0
556.6
200
500
0
400
0
Loan Balances: The growth in loans to
members of 9.2% in 2013 more than
doubled the previous increase of 4.1%
from 2011 to 2012. Additionally, TECU
grossed $270.2M in new loans for
2013, surpassing the $235.9M figure
for 2012. The major categories in which
loans were granted were Character
Loans (51% of the portfolio), Mortgages
(29.2%) and Vehicles (15.7%).
Growth in Members’ Shares 2009–2013 ($ million)
316.9
392.9
434.5
545.2
739.8
1200
1000
2009
2010
2011
2012
2013
Growth in Long Term Investments:
The challenge of high liquidity,
unemployment and dwindling
investment opportunities caused
TECU’s investment team to seek
out more lucrative business
opportunities, with a view to
improving its Revenue stream.
800
896.3
930.7
976.6
1070.1
1183.8
2009
2010
2011
2012
2013
600
400
200
0
Members’ Shares continue to grow at
a steady pace, the last fiscal period
saw growth of 10% as opposed to the
9% increase reflected in the previous
period.
31
(continued)
Financial Results
Revenue 2009–2013 ($ million)
120
100
80
60
101.6
92.1
88.6
88.5
91.7
2009
2010
2011
2012
2013
40
20
0
Interest Income: The main income
driver for the Credit Union continues
to be Interest Income and as
evidenced by the table, the $270M
in loans granted in 2013 resulted in
the best returns over the last four
years. The Total Interest Income
figure comprises Loan Interest and
Investment Income, as evidenced by
the following bar chart.
Gross revenue increased by 3.6%
between 2012 and 2013.
100
Expenses 2009–2013 ($ million)
80
70
60
50
40
30
20
10
0
Interest Income 2009–2013 ($ million)
80
90.5
87.6
88.1
91.2
2009
2010
2011
2012
2013
60
49.3
55.0
57.9
62.0
52.4
40
20
0
2009
2010
2011
2012
2013
Expenses 2013 (%)
Education &
Charity Fund 1.0%
Finance Cost 0.1%
Interest Income 2009–2013 ($ million)
Officers' Expenses 1.5%
Office Building 4.9%
LP/LS
Premiums 16.1%
Salaries,
wages &
assoc. benefit 44.1%
Administration
& Other 32.5%
Operating Expenses: The institution
was also able to control its
operating expenses.
32
98.2
80
70
60
50
40
30
20
10
0
Loan Interest
2009
2010
Investment Income
2011
2012
2013
(continued)
Growth in Membership: Essentially, in
any Credit Union the three (3) most
important assets are members’ trust
31,809
33,935
34,860
35,736
37,647
and confidence and the organisation’s
employees. Trust and confidence are
intangibles, which must be nurtured
and rewarded and are measured by the
number of members who choose to
2009
2010
2011
2012
2013
operate an account at TECU. There was a
5.3% increase in membership over the last fiscal period amounting to an increase
of 1,911 members. This increase essentially doubled the figure for the previous
year.
Growth in Membership 2009–2013 ($ million)
40000
35000
30000
25000
20000
15000
10000
5000
0
TECU achieved a reasonable return that was higher than other market/
investment opportunities. This rate enabled the further strengthening of the
credit union’s Institutional Capital. The stronger the overall capital position, the
easier it becomes for the credit union to deal with future uncertainties such as
asset losses or adverse economic cycles. It is prudent for management and all
stakeholders to ensure a strong capital base to provide a secure foundation for
future growth, meet competitive pressures as they arise and guarantee the long
term sustainability of the credit union.
DELINQUENCY
There was a decrease of 0.96% in the delinquency rate from 5.93% in December
2012 to 4.97% in December 2013, and a reduction in the delinquent loan amount
of $2.86M (from $32,949,164 to $30,087,038). The decrease heralds a major
milestone in the Credit Union’s current history and is now within the industry
standard of 5%. This demonstrates the Credit Union’s resolve to maintain a
healthy loan portfolio.
OUTLOOK
In 2014, it is expected that interest rates in Trinidad and Tobago will remain
subdued as excess liquidity continues to persist. In the month of January,
there was a fall in the amount of high liquidity seen in the country with the
daily average falling to TTD 6.4 billion versus the TTD 8.1 billion record set in
September 2013. Increased economic activity is anticipated as the Government
accelerates implementation of its Public Sector Investment Programme (PSIP).
In January 2014, 90-day Treasury Bills (T-bills) rates continued on the declining
path. In that month all 90-day (T-bills) were issued at 0.05 per cent whilst
33
(continued)
the 180-day rates stood at 0.15 per cent to 0.16 per cent. The TTD yield curve
continues to show the downward trend of interest rates.
STRATEGIC PLAN
TECU’s Strategic Plan was approved in 2013 and spans the period 2014 – 2018.
The plan takes into account the economic environment, impending legislation
and the four (4) pillars of: Governance, Member Focus, Growth, and Human
Capital. The following diagram categorises the foundational key performance
indicators to encourage strength, sustainability and profitability.
VISION STATEMENT
To be the leading Credit Union Co-operative in the Caribbean.
Governance
• Meeting prudential
standards
• Compliance with
regulatory requirements
• Policy formulation
• Performance
monitoring
• Strategic initiatives
• Operational
performance
• Ownership linkage
• Shareholder linkage
• “Fit & Proper” officers
Member Focus
• Member service
• Service mechanism
• Technology-driven
services
• Personal attention
• Member delight
• Preferred provider
of financial services
• Systems &
processes
Growth
•
•
•
•
•
•
•
Asset base
Loans
Investments
Real estate
Net surplus
Efficiency
Resource
optimisation
• Strategic fit
activities
• Targetted
membership
Human Capital
(Staff)
•
•
•
•
•
•
•
Quality of work life
Service-driven
Member-focussed
Knowledge-centred
Performance-driven
Results-oriented
Trustworthy The Plan was approved by the Board of Directors on December 11, 2013 and
presented to the staff at a Team Building initiative on January 3, 2014 and the
Credit Union Officers on February 6, 2014.
34
(continued)
BOARD ATTENDANCE
Present
Absent
Excused
Ronald F. Jones
Name
12
0
0
Kent Byer
11
0
1
Mitra Attai
10
0
2
Sandra MatthewsNoel
12
0
0
Gemma Warner
9
0
3
L.L. Hercules
6
1
5
Peter Lyons
9
0
3
Leonard Chan Chow
10
1
1
Leroy Fermin
11
0
1
Carol Pilgrim-Bristol
10
0
2
Ian-Michael Haynes ¹
4
0
0
Peter Machikan²
3
0
1
8
0
0
7
0
1
Gregory Cova ³
Brent Zephyrine
4
1 Mr. Ian-Michael Haynes was statute-barred in 2013 after serving as a Director for nine (9)
consecutive years
2 Mr. Peter Machikan was not re-elected as an Officer at the 2013 Annual General Meeting
3 Mr. Gregory Cova was elected as a Director at the 2013 Annual General Meeting
4 Mr. Brent Zephyrine was elected as a Director at the 2013 Annual General Meeting
In addition, there were eleven (11) Special Board Meetings held in 2013
Name
Present
Absent
Excused
Ronald F. Jones
11
0
0
Kent Byer
9
0
2
Mitra Attai
7
0
4
Sandra MatthewsNoel
11
0
0
Gemma Warner
8
0
3
L.L. Hercules
8
0
3
Peter Lyons
9
0
2
Leonard Chan Chow
8
0
3
Leroy Fermin
11
0
0
Carol Pilgrim-Bristol
7
0
4
Ian-Michael Haynes ¹
3
1
3
Peter Machikan²
2
0
5
2
1
1
3
1
0
Gregory Cova ³
Brent Zephyrine
4
35
(continued)
ACKNOWLEDGMENTS
The Board of Directors would like to express its sincere appreciation for the
hard work, diligence, commitment and sacrifice displayed by members of the
Supervisory, Credit, Education and other Committee members for their untiring
efforts in ensuring the continued growth and development of the organisation.
To our loyal and dedicated Staff, we recognize your commitment to duty,
dependability and unstinting support in ensuring the continued success of TECU.
To our members, we extend our sincere appreciation for your loyal support and
confidence during the year.
The Board of Directors also wishes to acknowledge the co-operation received
from our fellow co-operators and the business community in general.
Honorary Secretary
36
37
Report of the
Supervisory Committee
The members of the Supervisory Committee express our sincerest
thanks and appreciation to the Members of TECU Credit Union
Co-operative Society Limited for the opportunity given to us to
serve for the past year. We are grateful for your confidence in our
oversight role.
The Supervisory Committee takes this opportunity to assure the
Membership that their Credit Union is working assiduously to meet
their everyday and long term needs.
The officers who served during this term were as follows (photos
left–right):
Mr. Anthony Solomon, Chairman
Ms. Rosemarie Smith, Secretary
Mr. Donan Taylor
Mr. Hercial Vitalis
Mr. Ken Traboulay
During the period under review, thirty two (32) meetings were held.
Our mandate to exercise oversight on the affairs of the Credit
Union on behalf of its membership was the basis of our objective
to interact with all Departments, Committees and the Board of
Directors.
Operations: The Committee has continued to champion the need
for improved member service. This resulted in meetings with
the Executive Committee and the General Manager. A number
of proposed changes to improve the efficiency were highlighted
including cycle time for transactions at branches, among other
38
Report of the Supervisory Committee
(continued)
things. Implementation of member service initiatives, in a deliberate sequence,
should be priority for the organisation.
Policies and Procedures: These were made available, but time did not permit the
Committee to review them in its entirety. However, specifically noted was the
Lending Policy which requires updating urgently - the last amendment being in
2009.
Head Office and Branches: Cash count exercises were conducted at all
three branches and found to be satisfactory. We observed and made
recommendations concerning the Point Fortin branch in particular, and a number
of these recommendations were implemented.
Tobago Resort: The Committee visited our resort - TECU Coral Reef - in Tobago.
This asset has great potential due to its strategic location, refurbished suites and
motivated personnel. A number of improvements and enhancements are to be
addressed in the forthcoming five year Strategic Plan.
Mayaro Beach Resort: These facilities require attention to ensure their viability,
and special focus is needed to achieve the desired results.
Loan Portfolio: Interest on loans is one of the major sources of revenue. The
Committee met with a Loans Officer and the Credit Committee to obtain a
better understanding of the system used for administration. Loan applications
were reviewed for accuracy and completeness. The “Declined Loans” listing was
also reviewed. This revealed opportunities for member education, Loan Officer
training, and targeted marketing. Recommendations were made based on these
reviews. Loan targets were met, but with a reduction in interest rates on some
loans, in order to be competitive within the industry.
The Credit and Collections Department has been working on the loan
delinquency to achieve and surpass levels as identified in the Pearl’s Standard.
This should be commended, and every effort made to further reduce the
delinquency rate.
Information Technology: Discussions were held with the department’s
personnel with regards to the present system, upcoming improvements and
greater efficiency in the technology that supports TECU’s loans and processing
operations.
Internal Audit: Audit reports were reviewed and it was observed that there was
some alignment between the Committee’s and the Internal Audit Department’s
recommendations.
39
Report of the Supervisory Committee
(continued)
Finance: Monthly financial statements were reviewed in an effort to identify
trends in the organisation’s performance.
Marketing and Business Development: During discussions held in this area, it was
agreed that in our existing environment, creativity and innovation are required to
make all our business units viable and sustainable.
Compliance: After a review of the Compliance Policy, concerns were highlighted
and submitted to Management.
Training and Development: The Committee was exposed to three in-house oneday training sessions, namely: “Understanding Financial Statements”, “Compliance
Risk”, and “Management of Credit Unions”. The “Management of Credit Unions”
session was facilitated by the Co-operative Division.
Board of Directors: Upon invitation, the Committee attended Board meetings
held during this past year. A quarterly meeting with the Executive is suggested.
Credit Committee: Meeting with the Credit Committee to discuss loan trends
was productive, especially with regards to declined loans to members. Meetings
between these two Committees on a regular basis are recommended.
Education Committee: It is noted that only three newsletters were issued since
the last AGM. We hope that members will be given more information via this
medium.
Conclusion: Given our mandate concerning oversight, the Committee made a
number of recommendations to the Board of Directors and Management for
improvements. The Committee anticipates that future terms will see improved
relationships and communication among Committees, Management and Board,
all in the interest of delivery of quality service to Members.
The Committee expresses its gratitude to the Management and staff for their
support and co-operation during the past term.
40
Report of the
Credit Committee
The following persons comprised the Credit Committee for the
period under review (photographs left–right):
Larry Lalchan, Chairman
Stephen Tang, Secretary
Inga Crichlow
Orville Wolsey
Lucy Ottley
OVERVIEW
The Credit Committee met on a weekly basis to review, evaluate
and approve loan applications. Consultations were held with Loan
Officers between meetings in order to facilitate members with
urgent needs.
Recognizing that Credit Unions are now faced with direct
competition from other financial institutions, TECU introduced new
loan products in order to maintain and expand its market share.
New ideas and strategies were employed to develop and promote
these products. This resulted in a significant growth in our Loan
Portfolio.
LOAN PERFORMANCE
Members continued to apply for loans for provident and productive
purposes which included loans for education, mortgages and
vehicles. It is noteworthy that our younger members are accessing
loans for land and housing. This trend should be encouraged.
41
Report of the Credit Committee
(continued)
Based on numerous requests reaching the Committee for restructuring of loans
and reduction of loan payments, it is evident that there is a great need for a
structured approach to financial counselling for our members.
Many members have been making enquiries about loans for entrepreneurial
pursuits; agricultural and other small businesses. The Committee, however,
recognizes that in order for these pursuits to be successful, assistance must be
provided to develop the necessary technical and entrepreneurial skills.
Our branches at Couva and Point Fortin continue to play an important part in our
growth development.
The Credit Committee would like to thank the Management, Officers, Staff and
the Membership for affording us this opportunity to serve.
Loans and Purposes
2013
2012
83,090,504
73,440,597
Property Acquisition & Repairs
75,637,910
76,005,818
Household & Personal Effects
96,272,815
63,332,770
9,625,874
13,770,995
728,634
2,458,388
Motor Vehicles
Education/Medical/Vacation
Business & Agriculture
Other
Total
4,853,348
6,960,865
270,209,085
235,969,433
Loans and Purposes ($ million)
300
2013
2012
250
200
150
100
50
0
re
& ts
es
on
on
icl
iti
ld ffec cati
ltu
s
h
o
u
i
Ve
eh l E
ric
Va
qu
us na al/
or
Ag
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o
o
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ot
y
i
H rs
t
d
M
s&
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Pe Me
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n
op pa
/
i
r
n
s
P Re
tio
Bu
&
ca
u
Ed
42
er
O
th
l
ta
To
Report of the
Education Committee
2
6
4
10
8
7
11
5
3
1
9
12
The following persons served on the Education Committee for the
period under review (photographs left–right, top to bottom):
1 Leroy Fermin, Chairman
2 Kenneth Lewis, Vice Chairman
3 Jacqueline Newton, Secretary
4 Brent Zephyrine
5 Cecil Lewis
6 Leslie Lewis
7 Pamela Dass
8 Jennie Alleyne
9 Keisha Francis
10 Daniel Lewis
11 Joy Jarvis
12 Nadine Pirtheesingh
13 Stacy Charles
(not in picture)
43
Report of the Education Committee
(continued)
The Committee met on a monthly basis to discuss the scheduled activities.
A team was selected to produce the Newsletters which resulted in three (3)
publications for the year. Through this medium, members were kept informed of
the activities of the Credit Union and its products and services. Articles included
money matters, health, etiquette, and general issues.
Two (2) Induction sessions were held at the John C. Gomes Auditorium, TECU
House Marabella. These sessions served to inform new members of the services,
features and activities of the Credit Union and also to educate them on the
benefits of membership.
The Annual Primary School Quiz was conducted during Credit Union month.
Twenty-two (22) students from eleven (11) primary schools participated in this
event. Students of San Fernando TML emerged as first and second place
winners in the competition. San Fernando Boys’ R.C. School captured the third
place and San Fernando Girls’ Government the fourth place. Participating
students were awarded cash, trophies and tokens. The winning school was
awarded the TECU Challenge trophy. This competition is a means of educating
the students on the Credit Union Movement and its philosophy, both locally and
internationally.
The membership of the Credit Union can look forward to Financial Seminars,
two (2) of which are planned for the coming year. These seminars would include
topics such as Estate and Will Planning, Investments and Personal Financial
Management.
The Education Committee wishes to express its sincere appreciation to the Board
of Directors, other Committees and the Administrative Staff for their unstinting
support throughout the past year. We look forward to continued support as we
pursue our mandate of keeping members educated, empowered and informed.
44
45
Membership Update
Co-operative Credit Union
Legislation
Background
As you are aware, a new regulatory legislative regime for Cooperative Credit Unions was proposed by the Central Bank of
Trinidad and Tobago (CBTT): this was mandated by the Cabinet
in July 2005. In this regard the CBTT issued a Policy Proposal
Document (PPD), and in 2006, invited units of the Co-operative
Credit Union Movement (CCUM) to participate in its review. These
discussions also included the Commissioner for Co-operative
Development (CCD). During consultations in the period 2006 to
2009, the CCUM made several recommendations on the PPD to
the CBTT, some of which were incorporated in a final document in
November 2009.
The Board of Directors of TECU, in response to its invitation
appointed a Legislative Committee (LC) to address the issues
of impending legislation. The Board also approved TECU’s
collaboration with the rest of the CCUM, thus enabling the issues to
be addressed in a more comprehensive manner. TECU participated
fully in these consultations and, during these discussions, was partly
instrumental in influencing a unified approach to the CBTT by the
Movement.
Consultations on the Credit Union (CU) Bill, CS
(Amendment) Bill and Related Regulations
In November 2011, after numerous consultations between the CBTT
and the CCUM, in which TECU played a significant role, the CBTT
issued the first draft of the CU Bill, 2011. Once again the CCUM
was invited to participate in its review. In 2012, draft Regulations, in
support of the CU Bill, were issued. Up to July 17, 2013, discussions
with the CBTT continued, when the Governor of the CBTT, at a
meeting with the CCUM, terminated the discussions prematurely.
However, the Governor did invite the CCUM to submit any further
written comments in support of the CCUM’s positions.
From September 2009, the CCD led discussions on identifying
Sections of the Co-operative Societies Act (CSA), Chapter 81:03,
which would require amendments in order to facilitate the
46
Membership Update
(continued)
introduction of the CU Bill and Regulations. Discussions were terminated
prematurely in April, 2010. In 2013 the CS (Amendment) Bill was introduced and
discussions commenced. At the time of writing, discussions with the CCD are ongoing.
CCUM’s Position on CU Legislation
It should be emphasized that TECU, together with the rest of the CCUM,
supports the updating of Co-operative Legislation and appropriate supervision
based on a national policy on co-operatives. Accordingly, the CCUM would
like to ensure that the role CUs are playing in Society is strengthened and
sustained. Therefore, any legislation that provides for a conducive environment,
in which CUs (especially small CUs) can grow and further develop, is welcomed.
Such an environment should also allow for the formation of new CUs without
cumbersome barriers - administrative or otherwise.
Dual Regulation of CUs
An amended CSA will remain fully applicable to all co-operatives except
CUs, which will remain under the control of the CCD for administrative and
constitutional purposes only. Under the new CU Bill and its Regulations, only
CUs will be regulated by the CBTT. Arising out of these two pieces of legislation,
the CCUM will be regulated/supervised by two separate governmental agencies,
unlike previously, where all co-operatives, including CUs, were supervised and
administered completely under the remit of the Co-operative Division. It is our
belief that the regulation and administration of CUs by these two separate
governmental agencies respectively, will pose considerable confusion and
complexity for the CCUM. In addition, the values and principles of co-operativism
as they relate to CUs will be lost. In the circumstances, the CCUM has been
calling for the maintenance of One Regulator. Discussions on the dual regulation
of Credit Unions have not yet been satisfactorily concluded.
Unfavourable Provisions in the CU Bill and the CS (Amendment) Bill
During consultations with the CBTT and the CCD, the CCUM was able to
identify several unfavourable provisions and short-comings of the proposed CU
legislation and the CS amendments, and their impact on the CCUM. Some of the
major issues include:
1. Absence of a national policy on co-operatives in Trinidad and Tobago;
2. Barriers to the formation of new CUs and threats to the continued existence
of Credit Unions;
47
Membership Update
(continued)
3. The requirement for a high percentage of CU officers to possess advanced
and/or specialised academic qualifications;
4. The provision to use the High Court for settlement and/or redress, as against
the existing facility of the CCD, as provided by the Co-operative Societies Act
Chapter 81:03. (The high costs and time associated with the use of the High
Court is of major concern)
5. Reduction in the rights to ownership and decision making of their Credit
Union
6. Reduction in the resource pool of volunteers by the imposition of advanced
level educational requirements, and the introduction of severe penalties for
non-compliance
7. Restrictions on the business of a Credit Union, by limiting the lines, and
extent of business in which a Credit Union can engage
8. Transition periods proposed in the CU Bill are too short, and therefore,
threaten the survival of units in particular and the Sector in general
Status of Consultations
The CBTT has accepted several of the CCUM’s recommendations on provisions
in the CU Bill and associated Regulations. Likewise, the CCD has accepted
equivalent proposals for adoption in the amendments to the CSA and its
Regulations. However, there are many proposals of immense significance to
individual members and for the survival of units, which require changes to the
thinking of the CBTT and the Co-operative Division and to the contents of the
respective Bills.
Next Steps
The CCUM recognises the potential contribution the Co-operative Sector can
make to the socio-economic welfare of the Society; therefore, the efforts of the
CCUM are aimed at contributing to the realisation of this potential.
Although some progress has been made, the CCUM believes that there are
still a number of critical issues in the proposed draft bills that have not been
addressed satisfactorily and conclusively.
The CCUM also believes that our opinions are not ad hoc, but are based
on sound co-operative values, principles, and practice. Our commitment is
to nurture, grow, and develop a strong Co-operative Credit Union Sector in
Trinidad and Tobago. In order to interpret and evaluate the implications of the
provisions on the Sector, TECU, in conjunction with the CCUM, has embarked on
the engagement of expertise to review the draft legislation, and report on its
impact on the CCUM. On completion of this exercise, the CCUM would use the
48
Membership Update
(continued)
outcome/results of the studies to strengthen the rationale for improvement of
the proposed legislation.
The CCUM will also review the CBTT’s recent publication entitled: “The
Consultation Paper for the Establishment of a Protection Fund for Deposits
and Shares held in CUs”. This Paper deals with a mandatory insurance fund for
credit unions. The idea of a Deposit Insurance was originally proposed in the
PPD, but was not mentioned in the draft CU Bill. The protection fund will now be
presented separately as proposed amendments to the Central Bank Act.
Going forward, the CCUM will advance discussions with the CCD on the CS
(Amendment) Bill. TECU, in like manner, will continue to contribute to the
CCUM’s responses to proposed CU legislation, and will update our membership
on developments periodically.
49
TECU knows each member
has different needs. Loan
financing can be accessed
for a wide range of purposes
to satisfy your financial
needs.
Types of Loans:
• Shares & Character
• Bill of Sale- Vehicles
• Mortgage
• Other Secured Loans
• Co-Maker
• Insurance Policy
• Fixed Deposit
$
$
$$
TECU LOANS
$
$
$
$$$
$
$
$$$
$
$
Loan financing available for:
Mortgages, Education, Property
Development, Medical,
Motor Vehicles, Vacation and
Personal Effects.
Benefits of a TECU Loan:
• Fixed interest rates
• Free Insurance coverage on
loans up to age 80
• No processing fees on loans
• No penalty for lump sum
payments
• Cashless Access (with your
LinCU Visa Debit card)
• Members may access all our
loan products at our three
locations
Statement of
Management Responsibilities
It is the responsibility of management to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of TECU Credit
Union Co-Operative Society Limited (“the Credit Union”) as at the end of the
financial year and of the operating results of the Credit Union for the year. It also
requires management to ensure that the Credit Union keeps proper accounting
records which disclose with reasonable accuracy at any time the financial position
of the Credit Union. They are also responsible for safeguarding the assets of the
Credit Union.
Management is responsible for the preparation and fair presentation of these
financial statements in accordance with International Financial Reporting
Standards. This responsibility includes designing, implementing and maintaining
internal controls relevant to the preparation and fair presentation of financial
statements that are free from material misstatement, whether due to fraud
or error, selecting and applying appropriate accounting policies, and making
accounting estimated that are reasonable in the circumstances.
Management accepts responsibility for the annual financial statements,
which have been prepared using appropriate accounting policies supported
by reasonable and prudent judgments and estimates, in conformity with
International Financial Reporting Standards. Management is of the opinion that
the financial statements give a true and fair view of the state of the financial affairs
of the Credit Union and of its operating results. Management further accepts
responsibility for the maintenance of accounting records which may be relied
upon in the preparation of financial statements, as well as adequate systems of
internal financial control.
Nothing has come to the attention of Management to indicate that the Credit
Union will not remain a going concern for at least the next twelve months from the
date of this statement.
President
Honorary Treasurer
Member of
Supervisory Committee
April 2, 2014
51
Report of the
Independent Auditors
To the shareholders of
TECU Credit Union Co-Operative Society Limited
We have audited the accompanying financial statements of TECU
Credit Union Co-Operative Society Limited (the Credit Union) which
comprise the statement of financial position as at December 31,
2013 and the statements of comprehensive income, changes in
members’ equity and cash flows for the year then ended and a
summary of significant accounting policies and other explanatory
information.
Management’s responsibility for the financial
statements
Management is responsible for the preparation and the fair
presentation of these financial statements in accordance with
International Financial Reporting Standards and for such internal
controls as management determines is necessary to enable the
preparation of the financial statements that are free from material
misstatement, whether due to fraud or error.
Auditors’ responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in
accordance with International Standards on Auditing. Those
standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement
of the financial statements, whether due to fraud or error. In
making those risk assessments, we consider internal controls
relevant to the entity’s preparation and fair presentation of the
financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal
control. An audit also includes evaluating the appropriateness of
52
accounting policies used and the reasonableness of accounting estimates made
by management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements present fairly, in all material respects,
the financial position of the TECU Credit Union Co-Operative Society Limited as
at December 31, 2013 and of its financial performance and its cash flows for the
year then ended in accordance with International Financial Reporting Standards .
Emphasis of Matter
Included in Accounts Receivable for the year ended December 31, 2013 is an
amount of $98,689,249 (net of a provision for impairment of $28,609,935)
invested in Colonial Life Insurance Company (Trinidad) Limited (“CLICO”). The
Credit Union is in the process of negotiating the final settlement amount with
CLICO and has obtained confirmation that the Government of the Republic of
Trinidad and Tobago will honour amounts outstanding in line with previously
prescribed terms.
The Credit Union, in accordance with the Co-operative Societies Act 1971 and
following industry norm, recognizes interest income on members’ loan on
the cash basis (as per note 2(n)) which is contrary to the accrual basis per
International Accounting Standard No.1 – Presentation of financial statements.
Other Matter
The financial statements of the Credit Union for the year ended December
31, 2012 were audited by another auditor, whose report dated April 30, 2013
expressed an qualified opinion on these statements.
Chartered Accountants
April 2, 2014
Port of Spain
Trinidad and Tobago
53
Statement of
Financial Position
As at December 31, 2013
Notes2013
$
ASSETS
Cash and cash equivalents
Investments
Loans to members
Property, plant and equipment
Investment properties
Accounts receivable and prepayments
2012
$
6
97,450,712
149,671,962
7 820,197,809647,906,854
8
582,051,734
532,859,624
9
45,718,735
45,358,847
10
12,853,290
8,095,730
11
110,448,038
147,658,066
Total Assets
1,668,720,318
1,531,551,083
MEMBERS’ EQUITY, RESERVES AND LIABILITIES
Members’ Equity and Reserves
Capital reserve
12
Investment re- measurement reserve
13
Reserve fund
14
Education fund
15
Charity fund
16
Group life reserve
17
Retained earnings
8,905,919
13,702,381
61,964,745
450,000
235,000
3,229,857
51,155,175
8,905,919
5,349,056
58,024,817
450,000
235,000
3,229,857
44,466,282
139,643,077
120,660,931
Liabilities
Members’ deposits
18
Accounts payable and accruals
19
Retirement benefit liability
20
Due to deceased and former members
Members’ shares
21
320,769,995
9,075,759
1,897,000
13,573,651
1,183,760,836
316,793,190
10,459,700
1,344,900
12,221,312
1,070,071,050
1,529,077,241
1,410,890,152
Total Members’ Equity, Reserves
and Liabilities
1,668,720,318
1,531,551,083
The accompanying notes form an integral part of these financial statements.
On April 2, 2014 the Board of Directors of TECU Credit Union Co-Operative
Society Limited authorised these financial statements for issue.
President
54
Treasurer
Member of Supervisory Committee
Statement of
Comprehensive Income
Year ended December 31, 2013
Notes2013
$
Revenue
Interest income
22
Interest expense
91,204,111
(8,435,052)
2012
$
88,145,784
(10,915,945)
Net interest income
82,769,059
77,229,839
Other (expense) income
23
(57,299)
486,752
Gain (loss) on foreign currency translation
576,847
(182,442)
83,288,607
77,534,149
Expenses
Administration and other
24
Salaries, wages and associated benefits 25
CUNA insurance premium
Office building (net)
26
Officers’ expenses
27
Education Fund expenses
Charity Fund expenses
Finance cost
14,337,238
19,354,684
7,053,546
2,149,281
643,818
258,795
164,910
32,375
26,173,150
16,280,620
6,592,938
1,155,923
551,125
114,116
191,260
45,552
Total expenses
43,994,647
51,104,684
Surplus for the year 39,293,96026,429,465
Other comprehensive income
Unrealised gain on available-for-sale
financial assets
8,353,325
9,229,568
Total comprehensive income for the year
47,647,285
35,659,033
55
56
-
Funds expenditure
-
Dividends paid
-
-
-
-
-
-
-
-
8,353,325
8,353,325
5,349,056
5,349,056
-
-
-
(2,337)
-
10,532
-
-
-
3,929,396
-
58,024,817
58,024,817
2,642,946 -
(114,116)
114,116 -
-
-
-
-
-
-
-
-
197,260 -
-
-
-
-
-
-
-
-
-
164,910
-
-
-
-
-
-
-
-
-
-
-
-
235,000 3,229,857
235,000 3,229,857 (191,260)
(258,795) (164,910)
258,795
450,000 450,000 8,905,91913,702,381 61,964,745450,000 235,0003,229,857
-
-
9,229,568
9,229,568 229,000 3,229,857
2013
Balance at December 31,
Funds expenditure
income
-
-
Adjustment
Transfer from net
-
-
-
8,905,919
income
Total comprehensive
Surplus for the year
income
Other comprehensive
2013
Balance at January 1,
2012
8,905,919
-
Transfer from net income
Balance at December 31,
-
-
-
-
8,905,919 (3,880,512) 55,384,208 450,000 Dividends paid
income
Total comprehensive
income
Other comprehensive
2012
-
219,203 -
-
10,532
(423,705)
-
(28,251,966)
47,647,285
39,293,960
8,353,325
120,660,931
120,660,931
(88,510)
(949,762)
(26,841,670)
35,659,033
26,429,465
9,229,568
112,881,840
51,155,175139,643,077
-
(4,353,101)
( 28,251,966)
3
9,293,960
3
9,293,960
44,466,282 44,466,282 (3,904,084)
( 26,841,670)
26,429,465
26,429,465
48,563,368 Investment
Group Total
CapitalRe-measurementReserve Education Charity Life
Retained Member’s
ReserveReserve Fund Fund Fund Reserve Earnings Equity
$ $ $ $$ $
$
$
Balance at January 1,
Statement of Changes in
Members’ Equity and Reserves
Statement of
Cash Flows
20132012
$$
CASH FLOWS FROM OPERATING ACTIVITIES
39,293,960
26,429,465
Adjustments for:
Gain on disposal of investment property
(573,410)
Adjustment to property, plant and equipment
145,065
3,367,219
Impairment of investments
5,382,855
Gain on disposal of investments
(1,568,194)
Amortisation of investments
1,759,610
539,339
Loss on disposal of property, plant
and equipment
7,179
Depreciation
4,273,8894,681,161
Gain (loss) on foreign currency translation
(576,847)
182,442
Provision for losses
6,749,103
Retirement benefit cost
1,242,200
2,303,900
Adjustment to funds expenditure
(423,705)
(1,038,272)
Operating profit before changes
in working capital Change in accounts receivable and prepayments
Change in loans to members
Change in Members’ deposits
Change in accounts payable and accruals
Retirement benefit contributions paid
Net cash from operating activities
45,714,17246,462,787
37,210,028
28,012,513
(49,192,110) (24,541,768)
3,976,805
3,829,551
(1,373,409)
472,867
(690,100)
(386,800)
35,645,386
53,849,150
57
Statement of
Cash Flows
(continued)
20132012
$$
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
(4,778,842)
(4,887,503)
Additions to investment properties
(4,757,560)
(160,977)
Proceeds from disposal of investment properties
695,600
Net proceeds from (purchases of) investments
(165,120,393) (106,097,104)
Net cash used in investing activities(174,656,795) (110,449,984)
CASH FLOWS FROM FINANCING ACTIVITIES
Change in deceased and former
Members’ balances
Change in Members’ shares
Dividends paid on Members’ shares
Net cash from financing activities
Net movement in cash and cash equivalents 1,352,339
113,689,786
(28,251,966)
5,240,554
93,471,453
(26,841,670)
86,790,159
71,870,337
(52,221,250)
15,269,503
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR
149,671,962
CASH AND CASH EQUIVALENTS
AT END OF YEAR (Note 6)
97,450,712
134,402,459
149,671,962
58
Notes to the
Financial Statements
December 31, 2013
1. Incorporation and Principal Activities
TECU Credit Union Co-operative Society Limited (“the Credit Union”) was
incorporated under the Co-operative Societies Act of the Republic of
Trinidad and Tobago on January 2, 1947. Its registered office is situated at
TECU House, Southern Main Road, Marabella. It operates for the benefit
of employees, pensioners and contractors of the Petroleum Company of
Trinidad and Tobago Limited, its successors, subsidiaries and associated
companies and institutions and who are closely connected with the bonafide
employees, pensioners and contractors as stated above and such persons
and personnel of companies and institutions approved by the Board of
Directors.
The Credit Union is also an insurance agent for Guardian General Limited
and CUNA Caribbean Insurance Society Limited and operates resorts. In
February 2014, the Credit Union entered into a business arrangement with
Lazzari and Sampson Travel Service.
On April 2, 2014 the Board of Directors of the Credit Union authorised these
financial statements for issue.
2.Basis of Presentation
These financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs) as issued by the
International Accounting Standards Board.
These financial statements were prepared under the historical cost
convention, except for the measurement at fair value of available-for-sale
investments and certain other financial instruments.
he Credit Union’s functional and presentation currency is the Trinidad and
T
Tobago dollar.
The preparation of financial statements in compliance with IFRS requires
management to make certain critical accounting estimates and to exercise its
judgment in the process of applying the Credit Union’s accounting policies.
It also requires the use of assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of income and
expenditure during the reporting period. Although these estimates are based
on management’s best knowledge of current events and actions, actual
results may ultimately differ from those estimates.
59
December 31, 2013
Notes to the Financial Statement (continued)
3. Significant Accounting Policies
a) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, deposits with banks,
and other short-term highly liquid investments with original maturities
of three months or less. They are carried at cost, which approximates fair
value.
b)Investments
The Credit Union has classified all investments into the following
categories:
Held-to-maturity
hese securities are held with the positive intention of holding them to
T
maturity and are stated at amortised cost less provisions made for any
permanent diminution in value. Amortised cost is calculated by taking
into account any premium or discounts on acquisition over the period of
maturity using the effective interest rate method.
Available-for-sale
These securities are intended to be held for an indefinite period of time
but may be sold in response to the needs for liquidity or changes in
interest rates, exchange rates or equity prices. After initial recognition,
available-for-sale investments are measured at fair value with
unrealised gains or losses recognised in the investment re-measurement
reserve account.
or actively traded investments, fair value is determined by reference
F
to stock exchange quoted market prices at the statement of financial
position date, adjusted for transaction costs necessary to realise the
investment. For investments where there is no quoted market price, the
carrying value is deemed to approximate fair value. All “regular way”
purchases and sales are recognised at settlement date.
c) Trade receivables
Trade receivables are measured at cost. Appropriate allowances for
estimated irrecoverable amounts are recognised in the statement of
comprehensive income when there is objective evidence that the asset is
impaired.
60
December 31, 2013
3. Significant Accounting Policies (continued)
d) Loans to members
Loans to members are stated at principal amounts outstanding net of
allowances for loan losses. Specific provisions are made for potential
losses on non-performing loans on the basis of net realisable value.
Periodic portfolio reviews are conducted during the course of each year
to determine the adequacy of provisions.
Loans are secured by various forms of collateral, including charges over
tangible assets, certificates of deposit, and assignment of funds held
with other financial institutions.
e) Trade payables
Trade payables are initially measured at fair value, and are subsequently
measured at cost.
f) Members’ deposits
Members’ deposits are stated at the principal amounts invested by
members together with any capitalised interest. Members’ deposits bear
interest at rates that are not significantly different from current market
rates and are assumed to have discounted cash flow values which
approximate carrying values.
g) Members’ shares
Members’ shares are classified as liabilities and consist of an unlimited
number of shares at cost value of $5 each.
h) Financial instruments
Financial assets
All regular way purchases and sales of financial assets are recognised
or derecognised on the trade date, that is, the date on which the
Credit Union commits itself to purchase or sell an asset. A regular way
purchase and sale of financial assets is a purchase or sale of an asset
under a contract whose terms require delivery of the asset within the
timeframe established generally by regulation or convention in the
marketplace concerned.
When financial assets are recognised initially, they are measured at
the fair value of the consideration given plus transaction costs directly
attributable to the acquisition of the asset.
Financial assets are derecognised when the contractual rights to receive
the cash flows expire or where the risks and rewards of ownership of the
assets have been transferred.
61
December 31, 2013
h) Financial instruments (continued)
Financial assets (continued)
Financial assets comprise the following cash and cash equivalents, trade
receivables, investments and loans to members.
Financial instruments are contracts that give rise to a financial asset of
one entity and a financial liability or equity instrument of another entity.
Financial assets and financial liabilities are recognised on the Credit
Union’s statement of financial position when the Credit Union becomes
a party to the contractual provisions of the instrument.
Financial liabilities
When financial liabilities are recognised initially, they are measured
at fair value of the consideration given plus transaction costs directly
attributable to the acquisition of the liability. Financial liabilities are remeasured at amortised cost using the effective interest method.
Financial liabilities are derecognised when they are extinguished that is
when the obligation specified in the contract is discharged, cancelled or
expired.
The difference between the carrying amount of a financial liability
extinguished and the consideration paid is recognised in the statement
of comprehensive income.
inancial liabilities comprise trade payables, members’ deposits and
F
members’ shares.
i)
Impairment of financial assets
The Credit Union assesses at each reporting date whether there is
objective evidence that a financial asset or group of financial assets is
impaired.
A financial asset or 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 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 financial assets is
impaired includes observable data that comes to the attention of the
Credit Union about the following loss events:
i) Significant financial difficulty of the issuer or obligor.
62
December 31, 2013
i)
Impairment of financial assets (continued)
ii) A breach of contract, such as default or delinquency in interest or
principal payments.
iii)It is probable that the borrower will enter in bankruptcy or other
financial reorganisation
iv)The disappearance of an active market for that financial asset
because of financial difficulties.
v) Observable data indicating that there is a measurable decrease in
the estimated cash-flows from a group of financial assets since the
initial recognition of those assets, although the decrease cannot yet
be identified with individual financial assets in the group, including
adverse changes in the payment status of borrowers in the Credit
Union or national or economic conditions that correlate with defaults
on assets in the Credit Union.
The Credit Union first assesses whether objective evidence of
impairment exists individually for financial assets that are individually
significant. If the Credit Union determines that no objective evidence
of impairment exists for an individually assessed financial asset, it
includes the asset 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.
Impairment losses are recorded in an allowance account and are
measured and recognised as follows:
i) Financial assets measured at amortised cost
The difference between the assets’ carrying amount and the present
value of the estimated future cash flows discounted at the financial
asset’s original effective interest rate is recognised in the statement
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 improvement
in the debtor’s credit rating), the previously recognised loss is
reversed to the extent that the carrying amount of the financial asset
does not exceed what the amortised cost would have been had the
impairment not been recognised at the date that the impairment is
63
December 31, 2013
i)
Impairment of financial assets (continued)
i) Financial assets measured at amortised cost (continued)
reversed. The amount of the reversal is recognised in the statement
ii) Financial assets measured at cost
The difference between the assets’ carrying amount and the present
value of the estimated future cash flows (excluding future credit
losses that have not been incurred) discounted at the current
market’s rate of return for similar financial assets is recognised in the
statement of comprehensive income. These losses are not reversed.
j)
Property, plant and equipment
roperty, plant and equipment are stated at historical cost less
P
accumulated depreciation. Depreciation is provided on the declining
balance method, except for building and computers, which are
depreciated on the straight-line basis.
he following rates, considered appropriate to write-off the assets over
T
their estimated useful lives, are applied:
Buildings
-
2 ½% - 5%
Computer equipment
-
20%
Office furniture and equipment
-
10% - 33 1/3%
Beach house furniture
-
20% - 33 1/3%
Motor vehicles
-
20%
The assets’ residual values and useful lives are reviewed at each
reporting date, and adjusted as appropriate. An asset’s carrying amount
is written down immediately to its recoverable amount if the asset’s
carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing the
proceeds with the carrying amount and are recognised in the statement
The Credit Union’s leasehold lands have been acquired under long-term
leases ranging in terms from 199 years to 999 years. In view of the longterm nature of these leases, no amortisation is considered necessary.
64
December 31, 2013
k) Investment properties
Investment properties are properties held to earn rentals and/or for
capital appreciation (including property under construction for such
purposes). Investment properties are measured initially at cost, including
transaction costs. Subsequent to initial recognition, investment
properties are measured in accordance with the cost model as set
out in International Accounting Standard (IAS) 16 Property, Plant and
Equipment, i.e. cost less accumulated depreciation and less accumulated
impairment losses.
An investment property is derecognised upon disposal or when the
investment property is permanently withdrawn from use and no future
economic benefits are expected from the disposal. Any gain or loss
arising on derecognition of the property (calculated as the difference
between the net disposal proceeds and the carrying amount of the
asset) is included in profit or loss in the period in which the property is
derecognised.
l) Pension plan
All permanent employees of the Credit Union are members of TECU
Credit Union Co-operative Society Limited’s Pension Fund Plan (the
Plan), which is a defined benefit plan. Provision is made for pension
benefits based on the Plan’s members’ salaries. Pension benefits are
based upon contributions made by members and the Credit Union during
employment and determined by actuarial valuations of the Pension
Fund Plan. IAS 19 Employee Benefits, requires the use of actuarial
techniques on an annual basis to measure the present value of the
defined benefit obligation, the related current service cost and the
actuarial gains and losses.
Under the terms of a trust deed dated 26 October 1981, the Trustees
have entered into a Group Deposit Administration contract with
Colonial Life Insurance Company (Trinidad) Limited for the purpose of
administering the Pension Fund Plan.
m) Due to deceased and former members
Any amounts standing to the credit of the deceased and former
members’ accounts are transferred to a special account. The Credit
Union is, however, still liable for payments of these amounts and upon
notification by the beneficiaries or the former members, the amounts are
paid.
65
December 31, 2013
n)Provisions
Provisions are recognised when the Credit Union has a present legal or
constructive obligation as a result of past events. It is more likely than
not that an outflow of resources will be required to settle the obligation
and the amount has been reliably estimated.
The amount recognised as a provision is the best estimate of the
consideration required to settle the present obligation at the statement
of financial position date, taking into account the risks and uncertainties
surrounding the obligation. Where a provision is measured using the
cash flows estimated to settle the present obligation, its carrying
amount is the present value of those cash flows.
o) Revenue recognition
Loan Interest
Interest on members’ loans is accounted for on a cash basis in
accordance with the Co-operative Societies Act 1971.
Investment Income
Income from investments is accounted for on the accruals basis except
for dividends, which are accounted for on a cash basis.
Other Income and Expenses
Other income and expenses are accounted for on the accrual basis.
p) Dividends payable to members
The dividend is computed on the basis of the average value of shares in
issue throughout the year. The average being determined on the basis of
the value of shares held at the end of each day.
q) Foreign currency
Monetary assets and liabilities denominated in foreign currencies
are expressed in Trinidad and Tobago dollars at rates of exchange
ruling at the reporting date. All revenue and expenditure transactions
denominated in foreign currencies are translated at the average rate and
the resulting profits and losses on exchange from these trading activities
are recorded in the statement of comprehensive income.
r) Comparative figures
Where necessary, comparative figures have been adjusted to conform
with changes in presentation in the current year. .
66
December 31, 2013
4.Financial Risk Management
Financial risk factors
The Credit Union is exposed to interest rate risk, credit risk, liquidity risk,
currency risk, operational risk, compliance risk and reputation risk arising
from the financial instruments that it holds. The risk management policies
employed by the Credit Union to manage these risks are discussed below:
a) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in market interest
rates. The Credit Union is exposed to interest rate risk through the
effect of fluctuations in the prevailing levels of interest rates on interest
bearing financial assets and liabilities, including investments in bonds,
loans, customer deposits and other funding instruments.
The exposure is managed through the matching of funding products
with financial services and monitoring market conditions and yields.
i)Bonds
The Credit Union invests mainly in medium to long term bonds
consisting of both floating rate and fixed rate instruments. The
market values of the fixed rate bonds are not very sensitive to
changes in interest rates. The market values of the floating rate
bonds are sensitive to changes in interest rates. The longer the
maturity of the bonds, the greater is the sensitivity to changes in
interest rates. As these assets are being held to maturity and are not
traded, any changes in market value will not impact the statement of
comprehensive income.
The Credit Union actively monitors bonds with maturities greater than
ten years, as well as the interest rate policies of the Central Bank of
Trinidad and Tobago.
ii)Loans
The Credit Union generally invests in fixed rate loans for terms not
exceeding five years. These are funded mainly from member deposits
and shares.
67
December 31, 2013
4.Financial Risk Management (continued)
a) Interest rate risk (continued)
ii) Loans (continued)
The table below summarises the Credit Union’s exposure to interest rate
risks. Included in the table are the Credit Union’s financial assets and
liabilities at carrying amounts:
Due on Due in
Due 2-5 Due over
Non-interest
Carrying
Demand
1 year
years
5 years
bearing
Amount
$ $$ $ $ $
Assets
Cash and cash
equivalents
96,048,954
-
-
-
1,401,758
97,450,712
Investments
- 99,982,708 157,800,894 562,414,207
-
820,197,809
Loans to Members
- 37,643,052
350,183,192 194,225,490
-
582,051,734
Accounts receivable
-
-
-
- 110,448,038
110,448,038
96,048,954
Liabilities
Members’ deposits
-
Accounts payable and
Accruals
-
Due to deceased and
former members
13,573,651
Members’ shares
1,183,760,836
Interest Sensitivity
Gap
1,197,334,487
111,849,796
1,610,148,293
156,189,969
164,580,026
-
-
320,769,995
-
-
-
9,075,759
9,075,759
-
-
-
-
-
-
-
-
13,573,651
1,183,760,836
156,189,969
164,580,026
-
9,075,759
1,527,180,241
(1,101,285,533) 18,564,209343,404,060 756,639,697 102,774,037
Assets
Cash and cash
equivalents
148,098,081
Investments
-
Loans to Members
-
Accounts receivable
and prepayments
-
68
137,625,760 507,984,086 756,639,697
-
-
-
191,101,609
143,475,161 313,330,084
37,418,732 328,054,054 167,386,838
82,978,052
1,573,881
-
-
149,671,962
647,906,854
532,859,624
-
147,658,066
147,658,066
148,098,081 228,520,341
471,529,215 480,716,922
Liabilities
Members’ deposits
- 66,872,273 249,920,917
-
accruals
-
-
-
-
Due to deceased and
former members
12,221,312
-
-
-
Members’ shares
1,070,071,050
-
-
-
1,082,292,362
66,872,273 249,920,917
-
Interest Sensitivity
Gap
(934,194,281) 161,648,068 221,608,298 480,716,922
149,231,947
1,478,096,506
-
316,793,190
10,459,700
10,459,700
-
-
10,459,700
12,221,312
1,070,071,050
1,409,545,252
138,772,247
68,551,254
-
-
December 31, 2013
b) Credit risk
Credit risk arises when a failure by counter parties to discharge their
obligations could reduce the amount of future cash inflows from
financial assets on hand at the Statement of Financial Position date.
The Credit Union relies heavily on a written Loan Policy Manual, which
sets out in detail the current policies governing the lending function and
provides a comprehensive framework for prudent risk management of
the credit function.
Adherence to these guidelines is expected to communicate the Credit
Union’s lending philosophy; provide policy guidelines to team members
involve in lending; establish minimum standards for credit analysis,
documentation, decision making and post-disbursement administration;
as well as create the foundation for a sound credit portfolio.
The Credit Union’s loan portfolio is managed and consistently monitored
by the Credit Committee and is adequately secured by collateral and
where necessary, provisions have been established for potential credit
losses on delinquent accounts.
Cash balances are held with high credit quality financial institutions and
the Credit Union has policies to limit the amount of exposure to any
single financial institution.
The Credit Union also actively monitors global economic developments
and government policies that may affect the growth rate of the local
economy.
c) Liquidity risk
Liquidity risk is the risk that arises when the maturity dates of assets and
liabilities do not match. An unmatched position potentially enhances
profitability, but can also increase the risk of losses. The Credit Union
has procedures with the object of minimising such losses such as
maintaining sufficient cash and other highly liquid current assets and by
having available an adequate amount of committed credit facilities.
The Credit Union is able to make daily calls on its available cash
resources to settle financial and other liabilities.
69
December 31, 2013
c) Liquidity risk (continued)
Following are the contractual maturities of financial liabilities:
Due on Up to
One to Over
demand
one year
five years five years
Total
$
$
$ $$
Liabilities
Members’ deposits
accruals
Due to deceased
and former members
Members’ shares
13,573,651
1,183,760,836
Total Liabilities 1,197,334,487
165,265,728
164,580,026
-
1,527,180,241
-
66,872,273
249,920,917
-
316,793,190
-
10,459,700
-
-
10,459,700
12,221,312
1,070,071,050
-
-
-
-
-
-
12,221,312
1,070,071,050
Liabilities
Members’ deposits
accruals
Due to deceased
and former members
Members’ shares
Total Liabilities -
156,189,969
164,580,026
-
320,769,995
-
9,075,759
-
-
9,075,759
-
-
-
13,573,651
-1,183,760,836
1,082,292,362
-
-
77,331,973 249,920,917
-1,409,545,252
Risk management
The matching and controlled mismatching of the maturities and interest
rates of assets and liabilities are fundamental to the management
of the Credit Union. The Credit Union employs various asset/liability
techniques to manage liquidity gaps. Liquidity gaps are mitigated by the
marketable nature of a substantial segment of the Credit Union’s assets
as well as generating sufficient cash from new and renewed members’
deposits and shares.
To manage and reduce liquidity risk the Credit Union’s management
actively seeks to match cash inflows with liability requirements.
70
December 31, 2013
d) Currency risk
Currency risk is the risk that the value of financial instruments will
fluctuate due to changes in foreign exchange rates. Currency risk
arises when future commercial transactions and recognised assets and
liabilities are denominated in a currency that is not the Credit Union’s
measurement currency. The Credit Union is exposed to foreign exchange
risk arising from various currency exposures primarily with respect to
the United States Dollar. The Credit Union’s management monitors the
exchange rate fluctuations on a continuous basis and acts accordingly.
The carrying amounts of the Credit Union’s United States dollar
denominated monetary assets at the end of the reporting period are as
follows:
20132012
$$
Cash and cash equivalents
Investments
7,655,097
221,153,022
43,003,625
166,571,949
228,808,119
209,575,574
e) Operational risk
Operational risk is the risk derived from deficiencies relating to the Credit
Union’s information technology and control systems, as well as the risk
of human error and natural disasters. The Credit Union’s systems are
evaluated, maintained and upgraded continuously. Supervisory controls
are installed to minimise human error. Additionally, staff is often rotated
and trained on an on-going basis.
f) Compliance risk
Compliance risk is the risk of financial loss, including fines and other
penalties, which arise from non-compliance with laws and regulations
of the state. The risk is limited to a significant extent due to the
supervision applied by the Commissioner for Co-operative Development,
as well as by the monitoring controls applied by the Credit Union. The
Credit Union has a Compliance Officer as well as an Internal Audit
Department which does routine reviews on compliance.
71
December 31, 2013
g) Reputation risk
The risk of loss of reputation arising from the negative publicity relating
to the Credit Union’s operations (whether true or false) may result in a
reduction of its clientele, reduction in revenue and legal cases against
the Credit Union. The Credit Union engages in public social endeavours
to engender trust and minimise this risk.
5. Critical Accounting Estimates and Judgments
The preparation of financial statements in accordance with IFRS requires
management to make judgements, estimates and assumptions in the
process of applying the Credit Union’s accounting policies (see basis of
preparation).
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. The
Credit Union makes estimates and assumptions concerning the future.
However, actual results could differ from those estimates as the resulting
accounting estimates will, by definition, seldom equal the related actual
results. The estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below.
Changes in accounting estimates are recognised in the statement of
comprehensive income in the period in which the estimate is changed, if the
change affects that period only, or in the period of the change and future
periods if the change affects both current and future periods.
The critical judgements, apart from those involving estimations, which have
the most significant effect on the amounts recognised in the financial
statements, are as follows:
i) Classification of investments as held to maturity investments, available
for sale or loans and receivables,
ii) Classification of leases as operating leases or finance leases, and/or
iii) Depreciation method adopted for property, plant and equipment.
The key assumptions concerning the future and other key sources of
estimation uncertainty at the statement of financial position date (requiring
management’s most difficult, subjective or complex judgements) that have a
72
December 31, 2013
5. Critical Accounting Estimates and Judgments (Cont’d)
significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are as follows:
i)
Impairment of assets
Management assesses at each reporting date whether assets are
impaired. An asset is impaired when the carrying value is greater than
its recoverable amount and there is objective evidence of impairment.
Recoverable amount is the present value of the future cash flows.
Provisions are made for the excess of the carrying value over its
recoverable amount.
ii) Plant and equipment
Management exercises judgement in determining whether future
economic benefits can be derived from expenditures to be capitalised,
in estimating the useful lives, and in estimating residual values of those
assets.
6. Cash and Cash Equivalents
20132012
$$
Cash on hand
Current accounts held at bank
Mutual funds
1,401,758
20,772,499
75,276,455
1,573,881
42,064,668
106,033,413
97,450,712
149,671,962
73
December 31, 2013
7. Investments
20132012
$$
Available-for-Sale
Quoted
Ansa McAl Limited - 109,918 shares
(2012: 59,918 shares)
7,309,547
3,990,539
Trinidad Cement Limited - Nil shares
(2012: 2,841,835 shares)
4,234,334
Plipdeco Limited - 77,700 shares
287,490
287,490
Sagicor Financial Corporation - 175,900 shares 1,275,275
1,238,336
National Enterprises Limited - 276,100 shares
4,845,555
4,083,519
Unilever Caribbean Limited - 32,667 shares
1,835,885
1,540,249
Neal and Massy Holdings Limited - 38,678 shares
2,321,067
1,818,253
Guardian Holdings Limited - 76,959 shares
1,077,426
1,423,742
Republic Bank Limited – 15,677 shares
1,816,024
1,653,924
Trinidad & Tobago Unit Trust Corporation
(Growth & Income Fund) – 3,139,598 units
(2012: 3,076,715 units)
52,682,454
46,827,596
Praetorian Property Mutual Fund - 400,000 units
1,420,000
1,840,000
Grace Kennedy Limited - 47,811 shares
164,948
168,773
Jamaican Money Market Brokers Limited 202,906 shares
103,482
103,482
SavInvest India Asia Mutual Fund - 110,031 units
7,448,876
6,951,358
National Commercial Bank of Jamaica Limited
- 100,000 shares
111,000
144,000
Scotiabank Trinidad and Tobago Limited 50,000 shares
3,627,500
3,275,500
Royal Bank of Canada – 6,388 shares
2,765,112
2,458,112
Scotiabank Bond Fund - 372,939 units
6,633,746
6,335,975
First Citizens Bank Limited – 100,914 shares
4,061,789
First Citizens Bank Limited (El Tucuche Fund)
– 725,771 units
10,000,000
109,787,176
88,375,182
Unquoted
Central Finance Facility Co-operative
Society of T&T Ltd - 2 shares
LINCU Limited - 2,250,001 shares
50,000
2,250,001
50,000
2,250,001
2,300,001
2,300,001
112,087,177
90,675,183
9,624,150
-
Total available-for-sale
Held for Trading
FCIS Portfolio Management
74
December 31, 2013
7. Investments (continued)
20132012
$$
Short-term held-to-maturity
Fixed deposits
10,086,528
29,588,795
Repurchase agreements
70,314,862
71,309,934
Short-term bonds
-
1,827,698
Total
Long-term held-to-maturity
Atlas Methanol (USD)
8.25% Fixed Rate Bond 2016
Government of Turks & Caicos (USD)
Floating Rate Bonds Series 39 & 40 2014
Prestige Holdings Limited
7.75% Fixed Rate Bonds 2015
Petrotrin (USD) 6% Fixed Rate Bond 2022
Agostini 9.25% Fixed Rate Notes 2013
Government of Trinidad and Tobago (GOTT)
(USD) 9.75% Fixed Rate Notes 2020
Scotiabank Trinidad and Tobago Limited (SBTT)
GOTT 8.25% Fixed Rate Bond 2017
Republic Bank Limited
Housing Development Corporation (HDC)
HDC 8.25% Fixed Rate Bonds 2024
GOTT 7.75% Fixed Rate Bonds 2024
National Insurance Property Development
Company Limited (NIPDEC)
Trinidad & Tobago Mortgage Finance Co. Ltd
(TTMF) 7% Fixed Rate Bond 2024
Educational Facilities Co. Ltd
GOTT (USD) 9.75% Fixed Rate Notes 2020
Government of Barbados (USD) Class A
Balance carried forward
80,401,390
102,726,427
23,030,200
22,826,135
9,725,064
9,135,025
3,692,232
-
3,000,000
4,093,621
3,000,000
13,912,654
14,031,651
3,872,000
3,006,518
3,872,000
5,000,000
5,000,000
4,372,000
1,138,000
20,393,000
4,372,000
1,138,000
20,393,000
20,000,000
20,000,000
10,000,000
10,000,000
10,025,542
7,102,630
10,033,693
7,178,539
4,544,735
7,297,101
136,808,057
148,377,283
75
December 31, 2013
20132012
$$
Long-term held-to-maturity (continued)
Balance brought forward 136,808,057148,377,283
Petrotrin (USD) 9.75% Fixed Rate Note 2019
Petrotrin (USD) 9.75% Fixed Rate Note 2019 II
NIPDEC 6.25% Fixed Rate Bond 2028
SBTT 8.35% Fixed Rate Bond 2014
First Citizens Bank Limited (FCB) 8.35%
Fixed Rate Bond 2014
Trading & Distribution 6.25% Fixed Rate Bond 2015
Caroni (1975) Limited 6% Fixed Rate Bond 2018
FCB 5.25% Fixed Rate Bonds 2017
Neal and Massy Limited (NML)
5% Certificate 2016
Government of Barbados (USD)
Class A 6.75% Fixed Rate Bond 2014
Sagicor 7.5% Fixed Rate Bond 2016
FCB 4.903% Fixed Rate Bonds 2016
FCB 4.903% Fixed Rate Bonds 2016 II
GOTT Zero Coupon (Clico) 2021 GOTT Zero Coupon (Clico) 2017
NIPDEC 5.15% Fixed Rate Bond 2025 GOTT 5.2% Fixed Rate Bond 2027
Balance carried forward
76
3,784,746
4,435,397
27,639,150
16,151,450
28,166,362
5,000,000
5,071,120
4,167,933
4,951,668
27,906,204
16,151,450
28,233,539
5,000,000
8,654,075
9,193,639
5,076,765
10,040,450
3,815,801
4,700,000
10,436,918
5,091,705
5,619,739
4,700,000
5,426,062
5,148,708
1,025,071
3,222,502
3,889,280
1,948,900
2,136,632
10,682,501
13,087,266
13,792,154
12,642,915
22,517,973
2,424,882
3,297,210
3,890,754
1,951,530
2,162,962
10,706,360
8,010,529
8,173,835
12,714,932
22,641,464
335,983,789
364,684,084
December 31, 2013
20132012
$$
Long-term held-to-maturity (continued)
Balance brought forward 335,983,789364,684,084
ETECK Fixed Rate Loan #17 2021 ETECK Fixed Rate Loan #20 2022 Gulf City Bond 2020 Republic Bank Limited 4.75% Fixed Rate Bond 2027 RBTT 5 year Certificate of Deposit
KSBM: Repo 1.5 years backed by Sagicor Bond 2016
KSBM: Repo 2 years backed by Barbados Bond 2021
Cayman Island 5.95% Fixed Rate Bond 2019
GOTT 2.4% Fixed Rate USD Bond 2020 III
FCB 4.903% Fixed Rate Bond 2016 III
Caribbean Dev. Bank Limited
NML Zero Coupon Series 25 2027
SBTT 4.15% Fixed Rate Bond 2017
Prestige Holdings Limited
TTMF Zero Coupon Series 5, 8, 10 & 20
Royal Bank of Canada Limited
Urban Development Company
of Trinidad and Tobago Limited
(UDECOTT) 1.95% Fixed Rate Bond 2022
GOTT 2028 Zero Coupon Series 20, 26 & 30
NIPDEC 4.00% Fixed Rate Bond 2029
Sport Company of Trinidad and Tobago Limited
Loan series 28, 29 & 30
UDECOTT 1.95% Fixed Rate Loan 2021
GOTT 4.375% (USD) Bond 2024
20,695,210
18,638,384
6,733,543
7,100,000
31,000,000
7,513,572
9,473,725
3,371,438
20,090,414
18,061,305
7,000,000
7,100,000
31,000,000
3,250,387
3,319,054
-
12,955,030
3,138,741
4,645,820
4,502,410
992,819
11,000,000
-
2,399,750
12,500,000
-
3,237,122
13,422,632
-
10,101,412
40,509,097
5,085,555
10,191,231
-
26,612,431
13,000,000
3,281,381
-
Total long-term held-to-maturity
618,085,092
454,505,244
Total investments
820,197,809
647,906,854
77
December 31, 2013
8.Loans to Members
20132012
$$
Character loans
Co-maker loans
Mortgage bill of sale loans
Computer loans
Mortgages
Investments
308,020,952 269,454,622
23,250,632
17,323,680
95,264,815
77,759,723
2,046,830
2,142,331
154,229,598166,769,642
22,529,245
23,062,396
Less: Loans due from deceased members 605,342,072556,512,394
(1,328,083)
(1,690,515)
Less: Provision for loan losses
(See Note 8 (a) below)
604,013,989554,821,879
582,051,734
a) Provision for Loan Losses
Opening balance at January 1
Provision for loan losses charged to surplus
Loans written off
Closing balance at December 31
78
(21,962,255)
(21,962,255)
532,859,624
21,962,255
-
-
18,538,696
4,274,243
(850,684)
21,962,255
21,962,255
December 31, 2013
9.Property, Plant and Equipment
OfficeBeach Capital
Land and
Computer Furniture &
House
Motor
Work-in
Building EquipmentEquipment Furniture Vehicles Progress Total
$ $$ $$$
$
Cost
Opening Balance as at
January 1, 2013
36,188,216 17,549,840 10,384,594
904,342
200,096
4,548,794 69,775,882
Additions
374,012
466,201
104,795 79,842
169,163
3,584,828
4,778,841
Closing Balance as at
December 31, 2013
36,562,228 18,016,04110,489,389
984,184 369,259 8,133,62274,554,723
Accumulated Depreciation
January 1, 2013
10,786,205
Charge for the year
454,631
Adjustments
(228,758)
6,488,499
3,246,425
1,865,580
6,534,177
499,565
(1,535,673)
576,805
61,936
(69,098)
31,349
11,332
113,014
December 31, 2013
11,600,504
5,498,069
569,643
155,695
11,012,078
Net Book Value
Balance as at
December 31, 2013
25,550,150 6,415,537 4,991,320
Balance as at
December 31, 2012
25,402,011
Cost
January 1, 2012
Additions
Disposals
Adjustments
December 31, 2012
11,061,341 3,850,417
24,417,035
4,273,889
145,065
- 28,835,989
414,541 213,564 8,133,62245,718,735
327,537
168,747 4,548,79445,358,847
34,323,757
17,177,340 9,727,758
812,394
200,096
6,061,721 68,303,072
1,864,459 372,500 690,836 105,422
- 1,854,2864,887,503
-
-(34,000) (13,474)
-
- (47,474)
-
-
-
-
-
(3,367,219)
3,367,219
36,188,216 17,549,840 10,384,594
Accumulated Depreciation
January 1, 2012
10,076,350
Charge for the year
709,853
Disposals
-
1,477,937
5,010,562
-
7,571,606
(1,003,606)
(33,823)
December 31, 2012
10,786,205 6,488,499 6,534,177
Net Book Value
Balance as at
December 31, 2012
25,402,011
December 31, 2011
-
-
-
11,061,341
24,247,407 15,699,403
3,850,417
2,156,152
904,342 200,096 4,548,79469,775,882
519,845
63,432
(6,472)
576,805
130,431
(99,082)
-
31,349
327,537
168,747
292,549
69,665
-
-
-
19,776,169
4,681,161
(40,205)
-24,417,035
4,548,794 45,358,847
6,061,72748,526,903
79
December 31, 2013
10.Investment Properties
20132012
$$
La Brea/Plaisance Park/Piparo
Tabaquite
La Sophie
Chaguanas
430,870
430,870
93,78393,783
69,429
69,429
12,259,208
7,501,648
12,853,290
Additions
Disposals
8,095,730
8,095,730
8,056,943
4,757,560160,977
(122,190)
12,853,290
8,095,730
The Credit Union has adopted the Cost Model for accounting for its investment
properties (significant accounting policy (K)). An independent valuation was
not performed to determine the market value of investment properties as at
December 31, 2013. Management is of the opinion that the market value of
these properties have not changed significantly from the date of acquisition.
11. Accounts Receivable and Prepayments
20132012
$$
Interest receivable on investments
Accounts receivable (See Note 11(b) below)
Deferred charges and prepayments
Other receivables
8,952,992
132,895,916
313,497
221,112
10,778,849
165,136,314
1,483,980
2,194,402
Provision for impairment (See Note 11(a) below)
142,383,517179,593,545
(31,935,479)
(31,935,479)
110,448,038
147,658,066
a) Provision for Impairment:
Increase in provision during the year
31,935,479
-
28,609,935
3,325,544
31,935,479
31,935,479
b)Included in accounts receivable is an amount of $127,299,184 (2012:
$160,302,613) representing investments (gross) in Colonial Life Insurance
Company (Trinidad) Limited. Provision for impairment of this investment
amounted to $28,609,935 (2012: $28,609,935).
80
December 31, 2013
12.Capital Reserve
This reserve includes appropriations transferred from Retained Earnings, as
considered necessary by the Board of Directors.
13.Investment Re-measurement Reserve
In accordance with Bye Law 20 (viii), the Board of Directors has created an
investment re-measurement reserve which consists of unrealised gains/losses
on available-for-sale investments.
14.Reserve Fund
In accordance with the Co-operative Societies Act, 1971, Section 47 (2) and ByeLaw 50 (1) of the Credit Union, at least 10% of the net surplus for the year of the
Credit Union is to be appropriated to the Reserve Fund.
15.Education Fund
In accordance with Bye Law 51 of the Credit Union, an amount not exceeding 5%
of the net surplus for the year, after making appropriations to the Reserve Fund
is transferred to an Education Fund. This fund is to be used for educational
purposes, in accordance with Bye Law 46.
16.Charity Fund
In accordance with the Co-operative Societies Act, 1971 Section 50 and ByLaw, an amount not exceeding 5% of the net surplus for the year, after making
appropriations to the Reserve Fund, is transferred to the Charity Fund.
17.Group Life Reserve
The balance represents the accumulation of rebates received from Colonial Life
Insurance Company (Trinidad) Limited from the policyholder’s reserve account.
Rebates are issued based on claim experience and administration of the
members’ group life insurance plan.
81
December 31, 2013
18.Members’ Deposits
20132012
$$
Retirees’ deposits
One year deposits
Unclaimed deposits
283,655,555
35,219,738
1,894,702
280,134,537
35,303,951
1,354,702
320,769,995
316,793,190
Trade payable and accruals
Provisional deposits
6,682,021
2,393,738
8,513,911
1,945,789
9,075,759
10,459,700
19.Accounts Payable and Accruals
20. Retirement Benefit Liability
a) Change in defined benefit obligations
Defined benefit obligations at start of year
Service cost
Interest cost
Actuarial loss on obligation
Benefits paid
Defined Benefit Obligation at end
b) Change in plan assets
Plan assets at start of year
Expected return on plan assets
Actuarial loss
Contributions
Benefits paid
Plan Assets at end of year
c) Items included in statement of financial position
Defined benefit obligation
Fair value of assets
Net IAS 19 defined benefit liability
82
12,035,000
1,387,800
535,000
283,700
(1,683,000)
12,558,500
9,599,700
730,100
577,200
1,816,700
(688,700)
12,035,000
10,690,100
9,843,000
470,300
602,900
(13,400)
(173,000)
1,197,5001,105,900
(1,683,000)
(688,700)
10,661,500
10,690,100
(12,558,500)
10,661,500
(12,035,000)
10,690,100
(1,897,000) (1,344,900)
December 31, 2013
20. Retirement Benefit Liability (continued)
20132012
$$
d) Items included in statement of comprehensive income
Current service cost
880,400
339,900
Interest cost
535,000
577,200
Interest on Plan assets
(470,300)
(602,900)
Net actuarial loss recognised in the year
297,100
1,989,700
Net pension cost
1,242,200
e) Reconciliation of opening and closing statement of
financial position balances
Opening defined benefit (liability) asset
(1,344,900)
Expense in statement of comprehensive income (1,242,200)
Contributions paid
690,100
Adjustment -
Liability recognised in the statement of
financial position
(1,897,000)
f) Actual return on plan assets
Interest on plan assets
Actuarial loss on plan assets
Actual return on plan assets
2,303,900
572,200
(2,303,900)
715,700
(328,900)
(1,344,900)
470,300
(13,400)
602,900
(173,000)
456,900
429,900
g) Summary of Principal Assumptions
2013
2012
%%
Discount rate – prior to retirement
Discount rate – post retirement
Expense – prior to retirement (of contributions)
Expense – post retirement (of annuity)
Expected rate of salary increases
Expected return on plan assets
4.5
4.5
3.5
3.5
2.5
N/A
4.5
4.5
3.5
3.5
3.5
N/A
83
December 31, 2013
21. Members’ Shares
In accordance with existing IFRSs and given the substance and the nature of
Members’ shares, this balance is accounted for as a liability and not as equity
of the Credit Union. The Credit Union Bye Laws allow for the issue of an
unlimited number of shares at $5.00 each.
22. Interest Income
20132012
$$
Loan interest Investment income
54,627,112
36,576,999
55,838,204
32,307,580
91,204,111
88,145,784
23.Other (Expense) Income
Insurance agency (net)
Travel agency (net)
Beach houses (net) (See note 23 (a) below)
Coral Reef Guest House (net)
(See note 23 (b) below)
Couva office (net)
Miscellaneous
1,117,184
(481,897)
(197,321)
838,253
(718,835)
(69,845)
(329,730)
(270,741)
105,206
(353,785)
(315,605)
1,106,569
(57,299)
486,752
a) Beach houses (net)
2013 2012
Rental Surplus
Rental Surplus
Income Expenses(Deficit)
Income Expenses(Deficit)
$ $ $
$ $$
Mayaro
House #1
40,627
81,757
(41,130)
47,956
47,201
755
House #2
70,886
132,589
(61,703)
60,124
86,613 (26,489)
House #3
37,182
77,831 (40,649)
37,078
42,082
(5,004)
House# 4
65,678
135,571 (69,893)
54,786
103,364 (48,578)
Balandra Condo
50,217
34,163
16,054
32,836
23,365
9,471
Total
84
264,590
461,911(197,321)
232,780 302,625(69,845)
December 31, 2013
23.Other (Expense) Income (continued)
20132012
$$
b) Coral Reef Guest House (net)
Income
Expenses
Salaries
Wages
Contribution to national insurance
Staff travelling
Subsistence
Advertising & promotions
Insurance – fixed assets
Insurance – other
Water rates
Electricity
Telephone and faxes
Stationery
Miscellaneous
Security Cutlery and crockery
Cleaning supplies and toiletries
Material and supplies – other
General maintenance
Repairs – equipment (laboratory material)
Repairs – property
Legal and professional fees
Bank charges
Depreciation
Total expenses
458,268
Deficit
(329,730)
478,204
54,00062,072
98,731114,594
13,269
11,781
1,630
5,306
30,101
44,129
3,517
55,158
40,632
6,880
22,732
5,871
6,416
31,77824,424
30,871
16,583
1,1083,910
20,86552,526
117,538
64,750
9,483
16,923
18,065
20,202
10,022
47,494
129,721
120,755
1,700
300
2,500
18,000
18,000
4,190
5,548
122,910132,912
787,998
831,989
(353,785)
85
December 31, 2013
24. Administration and Other Expenses
20132012
$$
Advertising and promotions
Annual general meeting
Audit fees
Co-operative development
Couva branch operations
Data processing
Depreciation
General maintenance
Insurance
Internet charges
Janitorial services
Loan loss expense
Provision for bad and doubtful debts
Loss on disposal of investment
Marabella Branch operations
Miscellaneous
Office maintenance
Point Fortin branch operations
Printing, postage and stationery
Security
Seminars and conventions
Staff training
Subscriptions
Telephone and electricity
Youth development
900,352
691,423
444,506
326,428
243,998
146,093
3,000
783,010
694,740
1,409,860
2,416,211
3,483,8312,676,159
546,268
459,901
125,70773,685
218,375
202,446
210,285
179,159
247,105
1,213,756
10,675
4,274,243
3,325,544
5,382,855
1,690,693
1,761,497
144,71622,811
366,485
64,785
672,857
647,898
805,312
509,314
109,269131,267
514,671
113,595
668,570
218,096
50,39742,437
529,754
495,557
160,542
100,250
14,337,238
26,173,150
6,000
45,857
6,300
38,802
18,156,359
203,678
475,112
255,816
211,862
15,289,183
122,301
433,745
200,875
189,414
19,354,684
16,280,620
25. Salaries, Wages and
Associated Benefits
Contract services
E.A.P. charges
Salaries, pension and national insurance
contributions
Staff related insurance
Staff travel
Uniform allowance
Wages
86
December 31, 2013
26.Office Building (net) Expenses
20132012
$$
Income
Rental income
Expenses
Air conditioning units
Depreciation
Electricity
Elevators
General maintenance
Insurance
Janitorial services
Miscellaneous
Motor vehicle maintenance
Pest control
Rates and taxes
Rental expenses
Repairs and maintenance
Security
Wages and benefits
641,341
796,914
4,520
114,197575,846
45,00052,586
52,63518,539
1,109,019
275,645
252,495145,716
23,064
25,484
12,000
13,080
19,14445,380
27,847
9,477
9,234
12,385
61,194
28,924
500
16,500
16,658
9,845
356,104
308,816
687,011
414,614
Total expenses
2,790,622
1,952,837
Deficit
(2,149,281)
(1,155,923)
72,248
283,868
109,317
69,346
109,039
69,010
30,400
306,636
21,781
71,237
52,061
27.Officers’ Expenses
Group Life Honorarium – retiring officers
Meetings Management functions
Travelling Personal allowances 643,818
551,125
28.Employees
The number of employees in the Credit Union at December 31, 2013 totalled
149 (2012: 149).
87
December 31, 2013
29.Fair Values
Fair value is the amount for which an asset could be exchanged, or a
liability settled between knowledgeable, willing parties in an arm’s length
transaction. The existence of published price quotation in an active market
is the best evidence of fair value (see Note 3 (b). Where market prices are
not available, fair values are estimated using various valuation techniques,
including using recent arm’s length market transactions between
knowledgeable, willing parties, if available, current fair value of another
financial instrument that is substantially the same and discounted cash
flow analysis.
The following methods have been used to estimate the fair values of
various classes of financial assets and liabilities:
a) Current assets and liabilities
The carrying amounts of current assets and liabilities are a reasonable
approximation of the fair values because of their short-term nature.
b) Members’ Loans
Loans are net of specific provisions for losses. These assets result from
transactions conducted under typical market conditions and their values
are not adversely affected by unusual terms. The inherent rates of interest
in the portfolio approximate market conditions and yield discounted cash
flow values which are substantially in accordance with financial statement
amounts.
c)Investments
The fair values of investments are determined on the basis of quoted
market prices available at December 31, 2013.
d) Members’ deposits
Members’ deposits bear interest at rates that are not significantly different
from current rates and are assumed to have discounted cash flow values
which approximate carrying values.
30. Capital Risk Management
The Credit Union manages its capital to ensure that it will be able to continue
as a going concern while maximising the return to members, and providing
value to its members by offering loan and savings facilities. The Credit
Union’s overall strategy remains unchanged from previous years.
The capital structure of the Credit Union consists of equity attributable to
members, and comprises members’ shares, reserves and retained earnings.
88
December 31, 2013
31.Dividends
The Board of Directors declared a dividend of 2.75% of the average value of
members’ shares in issue throughout the year for the year ended December
31, 2013. This dividend amounting to $31.26 million (projected) (2012: $28.25
million) is not recorded as a liability in the statement of financial position,
consistent with IAS 10.
32. Contingent Liabilities
As at December 31, 2013, there were certain legal proceedings outstanding
against the Credit Union. No provision has been made as professional advice
indicates that it is unlikely that any significant losses will arise.
33. Related Party Transactions and Balances
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 decisions.
Key management personnel are those persons having the authority and
responsibility for planning, directing and controlling the activities of the Credit
Union.
A number of transactions are entered into with related parties in the normal
course of business. These transactions were carried out on commercial terms
at market rates.
Balances and transaction with related parties and key management personnel
during the year were as follows:
20132012
$$
Assets
Loans to directors, key management personnel
and close family members
17,227,910
12,970,033
Deposits and other liabilities
Deposits held by directors, key management
personnel and close family members
10,790,683
11,327,947
Shares held by directors, key management
personnel and close family members
19,082,272
14,535,069
Key management compensation
Short-term benefits
Post-employment benefits
6,805,308
307,365
5,154,160
226,861
7,112,673
5,381,021
89
December 31, 2013
34.New Standards and Interpretations not yet Adopted
A number of new standards, amendments to standards and interpretations
are effective for annual periods beginning on or after January 1, 2014, and
have not been applied in preparing these financial statements. None of these
is expected to have a significant effect on the financial statements of the
Credit Union, except for IFRS 9 Financial Instruments, which is not expected
to become mandatory before the Credit Union’s 2018 financial statements
and could change the classification and measurement of financial assets. The
Credit Union does not plan to adopt this standard early and the extent of the
impact has not been determined.
90
HEAD OFFICE MARABELLA
TECU HOUSE, Southern Main Road,
Marabella, Trinidad W.I.
Tel: 868-658-TECU (8328)
Fax: 868-658-2611
Email:[email protected]
Website: www.tecutt.com
DepartmentExtension
Member Information
2285
Loans
2330
Fixed Deposits
2289, 2290
LinCU2288
Insurance2236
POINT FORTIN
28 Guapo Cap-de-Ville Road,
Point Fortin, Trinidad W.I.
Tel: 868-648-3597
Fax: 868-648-4873
DepartmentExtension
Member Information
2504
Loans2502
COUVA
Southern Main Road, Couva,
Trinidad W.I.
Tel: 868-679-6549
Fax: 868-679-2903
DepartmentExtension
Member Information
2403
Loans2402
Design and Layout: Paria Publishing Co. Ltd.
Photos of Directors and Committees: Alice Besson, Abigail Hadeed
Other photos: Shutterstock
Printing: Caribbean Print Technologies Ltd.
Creating and Securing
Your Future
For 67 years, TECU Credit Union has worked as a
Credit Union and a family to create and secure a
successful future for you. Co-operation is the key
to this, and TECU’s members have held steadfast
to the principles of thrift over the years. TECU and
its members have come together to form a strong
Credit Union that will endure the test of time!

ANNUAL REPORT

Transcription

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