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SUNDAY 27TH SEPTEMBER, 2020 - MICOUD SECONDARY SCHOOL Page i
MISSION To improve the socio-economic condition of the members and the community, by providing financial services through mutual self-help in an atmosphere of equality and equity.
VISION To be a safe, strong and trusted provider of co-operative financial services, focused on the
financial well-being of our members and communities.
CO-OPERATIVE IDENTITY DEFINITION: A co-operative is an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly-owned and democraticallycontrolled enterprise. VALUES: “Co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, co-operative members believe in the ethical value of honesty, openness, social responsibility and caring for others.” PRINCIPLES: “The co-operative principles are guidelines by which co-operatives put their values into practice. 1st Principle:
Voluntary and Open Membership
2nd Principle: Democratic Member Control 3rd Principle:
Member Economic Participation
4th Principle:
Autonomy and Independence
th
5 Principle:
Education, Training and Information
6th Principle:
Co-operation among Co-Operatives
7th Principle:
Concern for Community
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Table of Contents Page
Table of Contents ............................................................................................................................ ii Profile ..............................................................................................................................................1 Agenda ............................................................................................................................................2 Welcome Remarks ..........................................................................................................................5 Minutes of the 45th Annual General Meeting .................................................................................6 Board of Directors’ Report ...........................................................................................................14 Treasurer’s Report ........................................................................................................................21 Credit Committee Report ..............................................................................................................28 Supervisory Committee Report .....................................................................................................39 Resolution .....................................................................................................................................44 Auditor’s Report and Financial Statements ..................................................................................51
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Profile
Name of Organization:
Mon Repos Eastern Co-Operative Credit Union (1968) Ltd.
Date of Registration:
May 22, 1968
Number of Members:
7,472
Number of Organizations:
341
Number of Depositors:
6,932
Number of Employees:
28
Total Assets:
$103, 298, 535
Total Loans:
$65,163,128
Total Deposit:
$59,075,629
Total Ordinary Shares:
$28,073,867
Equity Shares:
$3,127,070
Regulators:
Financial Services Regulatory Authority
Auditors:
A.P. Walcott and Associates
Attorneys at Law:
Chambers of John &John Chambers of Nicholas Jean Baptiste Chambers of Ernette Kangal
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Mon Repos Eastern Co-Operative Credit Union (1968) Ltd. 46th Annual General Meeting - 2020 THEME:
Resilient and Committed - Embracing Change
AGENDA OPEN SESSION 1.
PRAYERS
2.
NATIONAL ANTHEM
3.
WELCOME REMARKS
4.
SOLIDARITY GREETINGS
All Chairman
CLOSED SESSION 5.
ASSERTION OF QUORUM – CALL TO ORDER
6.
READING AND CONFIRMATION OF MINUTES
7.
MATTERS ARISING OUT OF THE MINUTES
8.
PRESENTATION & ADOPTION OF REPORTS Board, Treasurer, Auditor, Credit Committee, Supervisory Committee
9.
RESOLUTIONS
10.
ELECTION OF OFFICERS
11.
VOTE OF THANKS
12.
ADJOURNMENT
Chairman
Board, Credit Committee, Supervisory Committee
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Mr. Priscillus Simeon General Manager
Mrs. Adella Aubert-Jankie Deputy General Manager
Mrs. Juliana Maxwell Assistant Manager (Operations & Compliance)
Assistant Manager (Accounts)
Ms. Nazline Gaston Senior Asst. Accountant
Sen. Asst. Operations Officer
Ms. Miskah Charlery
Ms. Tracy Soudat Operations Assistant
Mrs. Suzana Stephen-Francis Office Helper
Ms. Tyra James Delinquency Control & Collections Officer
Ms. Aretha Winnette Assistant Delinquency Control and Collections Officer
Ms. Shirdyn Roberts
Mr. Christian Charlery Member Service Rep.
Ms. Shermaine Benoit Loans Officer
Card Services Rep.
Mr. Germaine Jn Baptiste Loans Officer
Ms. Fortuna Charlery
Mrs. Kizzy Marius-Fanus Loans Officer
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Ms. Chrissy St. Clair Teller Supervisor
Ms. Stephanie Jean Marie Teller Supervisor
Ms. Marsha William Teller Supervisor
Ms. Melanie Toussaint Teller
Ms. Sarafina Phillips Teller
Ms. Anthea Langellier Teller
Ms. Crystal Aimable Teller
Mr. Hershelle Stephen Teller
Ms Vern Descartes Teller
Ms. Donette Monero Teller
Mr. Devin Robinson Teller
Ms. Kay Clovis Teller
Ms. Kerlyn Constable Teller
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Welcome Remarks Fellow co-operators, Ladies and Gentlemen, good afternoon.
O
n behalf of the Board of Directors, other Officers, Management and Staff, I feel privileged as your President, to welcome you to this, our 46th Annual General Meeting under the theme “Resilient and Committed – Embracing Change”. The Mon Repos
Eastern Co-Operative Credit Union (M.R.E.C.C.U) achieved yet another year of success in 2019. We can attribute this continuing success to the dedication and hard work of all those on whose behalf I speak, and perhaps even more importantly, to the commitment from you, the faithful owners and patrons of this thriving institution. We hereby invite you to sit with us, listen, discuss, and assess the performance of the Credit Union during 2019, as well as to help chart the way forward. Welcome everyone
______________________ Dave Charlery (Mr.) PRESIDENT
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MINUTES OF THE 45TH ANNUAL GENERAL MEETING OF THE MON REPOS EASTERN CO-OPERATIVE CREDIT UNION (1968) LTD. HELD AT THE MICOUD SECONDARY SCHOOL ON SUNDAY 30TH JUNE, 2019
THEME: “Building on Members’ Confidence to bring Economic Prosperity, Safety and Strength” At approximately 3:44 p.m. the Chairperson, Mr. Henry Annelle, called the meeting to order. The meeting began with the prayer of St. Francis of Assisi followed by the National Anthem. WELCOME REMARKS The president extended a cordial welcome to all members of the Mon Repos Eastern Co-Operative Credit Union (MRECCU) on behalf of the Board of Directors, Officers, Management and Staff. He stated that 2018 was a successful year, hence the theme “Building on Members’ Confidence to Bring Economic Prosperity, Safety and Strength”. He urged all members to listen to the reports and participate in the discussion. MINUTES Having ascertained a quorum, the meeting moved into the business session. The secretary, Cassienne Samuel, read the minutes of the 44th Annual General Meeting. Three errors were noted and corrected – consistency in the use of Ms. and Mrs. for the same individual, 2017 instead of 2018 on page 9 and the word “presented” instead of the word “done” referring to the Credit Committee report on page 12. Pastor Antoine Charles then moved a motion to confirm the minutes, seconded by Cathy Noel Robinson. Matters Arising from the Minutes One member inquired about the status of the ATM. Mr. Daniel Jn. Baptiste provided an update. He explained that the venture was too costly for MRECCU to undertake on its own, therefore it had to Page 6
be a collective effort under the League umbrella. One machine was already installed at Laborie Credit Union in Vieux Fort but not yet operational. The other three will be installed at Mon Repos, Choiseul and Castries. There were several other questions on the matter. One member suggested calling a special meeting to give specific information on the ATM and to address their queries. Another cautioned to be mindful of security issues and ensure that measures are put in place to avert them. Mr. Jn. Baptiste assured members that this has been of paramount importance, and MRECCU has hired an IT consultant who has been involved in the planning stages and will continue to be involved in implementation. Members’ input was well received. One member wanted to know how members who pay their loans get rewarded. The treasurer informed that 3% is paid as patronage on interest paid on loans, 5% dividend is paid on equity shares and 2.5% is paid twice yearly on regular shares (savings) making it 5% for the year. This 5% is much higher than the recommendation from ECCB of 2%. PRESENTATION AND ADOPTION OF REPORTS BOARD OF DIRECTORS REPORT President Mr. Henry Annelle, delivered this report. He expressed pride in the achievement of the Credit Union for the year in review, from an asset base of $74,777,606 at the end of 2017 to $89,151,919 at the end of 2018 and said he was looking forward to the first 100,000,000 million soon. He spoke of MRECCU’s investment in young people through the secondary school scholarships and T20 cricket tournaments, as well as contributions made to the sports programmes of the various schools. The hope is that these investments will assist in producing well-rounded productive young citizens. He lamented the poor growth of the loan portfolio and spoke of the ongoing efforts to improve the situation. He also lamented the continued poor, cramped space at the Micoud Branch. He informed members of the efforts made so far to find better accommodation, none of which have been successful. Page 7
The president told members that in an effort to manage the risks involved in credit granting, the Credit Union would implement Credit Life Insurance by August 2019. This will be mandatory for all categories of loans except those covered by cash. He explained the rationale for this move. Some of the activities undertaken by the Education Committee were highlighted. Mr. Annelle commended all committee members, management and staff for their commitment, hard work and good working relationship. He also thanked the general membership for the confidence they have placed in the leadership of their Credit Union. These, he said, have enabled the Credit Union to thrive. Supportive details are on pages 18 – 22 of the 2019 Annual Report. Questions and Comments One member wanted to know the maximum age for Credit Life Insurance. The response was seventy years which is considered life expectancy. Another requested the rationale for additional insurance. The explanation was that CUNA covers liabilities up to $90,000. For larger loans, members are required to get life insurance, which is an added responsibility. The Credit Union is seeking to make it easier for members to manage additional insurance through collective responsibility. In addition, for those who have personal life insurance, it can go to their beneficiary while allowing Credit Life insurance to take care of the loan after death. Another member wanted to know what would be done with the lot near the highway if we are successful in finding an alternative site. The response was that someone has already expressed an interest to buy should that option become available. One member applauded the Credit Life Insurance. Another applauded the $14.3 million growth in assets but wanted to know what the target was. This figure was not available at the meeting but members were told a budget is prepared every year and targets are set. They were also informed that the growth fell below target mainly because of the movement of loans in the market. A suggestion was made for the targets to be included in the annual report. Page 8
The Board Report was adopted on a motion moved by Esther Butcher and seconded by Kester Dornelly. TREASURER’S REPORT Presented by the treasurer, Nigiel Jn. Baptiste. She highlighted increases in all areas of operation. However, these increases were significantly lower than the previous years due to economic difficulties faced by members and stiff competition in the financial market. The loans portfolio showed the smallest growth and the treasurer indicated that the Credit Union would have to adopt new strategies in order to remain competitive. The report went on to underscore the performance of the Credit Union in comparison to industry standards using accounting ratios. These ratios indicated that the Credit Union performs well within industry standards. Supportive details are on pages 23 to 28 of the 2019 Annual Report. Questions and Comments One member questioned the large allocation for bad debts. The Manager explained that the regulations require provisions be made for all loans that are not paid as scheduled. He also pointed out that our Credit Union is well within the delinquency standard of 5% according to the instrument used to measure such. The Manager went on to explain requirements by IFRS 9 pertaining to provisions for loans, which would have be implemented. There was a suggestion to reduce interest rates on loans to make them more attractive and forego the patronage refund. Members were informed that interest rates on some categories of loans have been reduced. Another member wanted to know the purpose of the equity shares. Explanation was given. The treasurer was commended for the clarity of her report and the suggestion made to include graphs showing a little more detail of the delinquency.
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There was another suggestion to find creative ways to attract new members and to bring back those who have left. The report was then adopted by the majority of members on a motion moved by Cecilia James and seconded by Francois Serieux. AUDITOR’S REPORT Anthony Walcott of Walcott and Associates delivered the report for the year 2018. He explained that the financial statements have to be prepared in accordance with International Financial Reporting Standards. IFRS 9, which became effective on January 01, 2018, introduced new standards for making provisions for losses. The Credit Union could not comply with that new requirement, hence the reason for the 2018 financial statement to be classified as a Qualified Statement. He continued to explain that in all other respects the financial statements for 2018 presented fairly the financial position and performance of the Credit Union in accordance with International Financial Reporting Standards. Supportive details are on page 49 of the 2019 Annual Report. There were no questions nor comments. Consequently, the report was adopted by the majority of members on a motion moved by Donette Charlery and seconded by Marguerite Malzaire. CREDIT COMMITTEE REPORT Cletus Dorleon, chairperson of the committee, presented this report. It gave details of the number of loans the committee assessed for the year, the decisions taken by the committee, purposes for the loans and the dollar value for each category. Tables and graphs provided greater clarity. Mr. Dorleon went on to express gratitude to the staff of MRECCU and the loans officers in particular, for their support. He also urged members to service their loans on time and save regularly, thereby helping to strengthen the Credit Union and improving living standards for all. Supportive details are on pages 29 to 38 of the 2019 Annual Report.
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Since there were no questions nor comments, the report was adopted by the majority of members on a motion moved by Stephanie Fanis and seconded by Magdelene Serieux. SUPERVISORY COMMITTEE REPORT Elizabeth Norbert, secretary of the committee delivered this report. She outlined some of the common errors seen on transaction slips, some of the issues raised with the Board and recommendations given. She also reported that the committee did not observe anything unacceptable in operations during their informal visits to the branches. She commended the staff for their hard work and in particular, those who serve at the Micoud branch taking into consideration the constraints there. Supportive details are on pages 39 to 42 of the 2019 Annual Report. Questions and Comments One member found the report very comprehensive and commended the committee. The report was adopted by the majority of members on a motion moved by Sylvesta Serieux and seconded by Anselma Brice. RESOLUTIONS Four resolutions were presented to the general body. See pages 43 to 46 of the 2019 Annual Report. 1. Resolution to provide honorarium to officers was proposed by Angela Raymond and seconded by Marguerite Malzaire: For – 147; Against - 1. 2. Resolution to declare dividends and patronage refund was proposed by Pastor Antoine Charles and seconded by Charlene Aubert: For – 145; Against – 0; Abstained - 0. 3. Resolution to appoint an auditor was proposed by Laurentia Canii and seconded by Rufina Charlery: For – 88; Against – 0; Abstained – 2. 4. Resolution to acquire real property was proposed by Joan Antoine and seconded by Stephanie Fanis. This resolution sought to get permission to purchase one parcel of land for Page 11
each of the three branches with Micoud as first priority, followed by Mon Repos and then Vieux Fort. Members questioned the three in one and asked that this be done as three separate resolutions. Although an explanation was given, the majority of members voted for that resolution to be deferred and redone. ELECTIONS Elisha Norbert, chairperson of the Nominations Committee, presented the nominees for the various committees. Board of Directors: There were three vacant positions. Henry Annelle had served his full term. Elisha Norbert resigned for study and Nigiel Jn. Baptiste had completed her first term. The committee nominated Nigiel Jn. Baptiste, Jennifer Phillip and Chriselda Stanislas. Jennifer Phillip was not present at the time. The floor nominated Kester Dornelly and Rufina Charlery. The votes went in favour of Nigiel Jn. Baptiste, Rufina Charlery and Kester Dornelly in that order. Supervisory Committee: There were three vacant positions. Elizabeth Norbert and Veronica Fevrier-Vitalis had served their full term. Venantius Descartes had completed his first term. The committee nominated Venantius Descartes, Maura George and Rohn Peter. There were no nominations from the floor therefore the three were accepted. Credit Committee: There were two vacant positions. Trudy Augustin had completed her first term and Donnette Charlery vacated the post. The committee nominated Trudy Augustin and Melinda Actille. The latter was not present so the floor nominated Angela Raymond. The two were duly accepted. VOTE OF THANKS The meeting concluded with the vote of thanks by Daniel Jn. Baptiste.
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ADJOURNMENT Janetta Alexander called for the adjournment at 7:47 pm. This was seconded by Stephanie Fanis.
_____________________ Cassienne Samuel (Mrs.) SECRETARY
Moved by:
___________________________________
Seconded by: ___________________________________
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Board of Director’s Report The Directors submit their report for the 2019 financial year. I.
Successful financial year due in part to: a) Drive to increase equity shares, b) Staff training in Credit Risk, and Anti-money Laundering and Compliance, c) Hiring of an
Mr. Dave Charlery President
Mr. Kester Dornelly Vice President
Assistant General Manager and d) Attractive mortgage loans package. II.
Credit life insurance introduced to provide added protection for our loan portfolio.
III.
ATMs
introduced
which
will
allow
members the convenience to access their funds outside of normal banking hours. IV.
Mr. Daniel Jn Baptiste Director
New building to be constructed for the Micoud branch within the coming financial year while plans for eventual expansion to the North are being explored.
V.
All Committees continue to do a remarkable job in the interest of helping to manage this
Ms. Rufina Charlery Treasurer
Mrs. Nigiel Jn Baptiste Assistant Treasurer
Mrs. Cassienne Samuel Secretary
Mrs. Agatha Charlery Assistant Secretary
Credit Union. VI.
Social responsibility is being met in various forms specifically the annual scholarship program
and
support
for
cricket
development in the community.
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My fellow owners of the Mon Repos Eastern Co-Operative Credit Union 1968 Ltd. (M.R.E.C.C.U), it is with distinct honor that the Board of Directors graciously submits to you the annual report on our operational performance for the 2019 financial year. It is important for us to understand that it takes tenacity for a small lending facility to survive, or even thrive in an increasingly difficult global financial environment; but that is exactly what our Credit Union has achieved in the past year. To fully celebrate these achievements however, we must appreciate where we were and compare it to where we are currently. The M.R.E.C.C.U appointed its first General Manager in 2002. At the time, it was a one-branch organization with assets of $4.6 million and a staff complement of five (5) persons. Two years ago, the then President Mr. Henry Annelle, projected in his BOD report that we should reach $100 million in assets by 2023. It is intriguing to note however, that in 2020, three years before that projected date, we have realized an asset base of over $103 million, three (3) business branches and 28 staff members. Today, I aim to report on the operations, social responsibilities, and the way forward for this, our institution, which our collective contributions have built and taken us thus far. OPERATIONS With immense pleasure, I report that the 2019 Financial Year was another successful one in our Credit Union’s chronicle. We paid interest due on all accounts, including fixed deposits; we covered all our liabilities; we placed enough in the statutory reserves as required by the regulatory authority, and made a surplus. Details will be presented in the Treasurer’s report later. However, we must say that we attained these successes despite market anomalies. The BOD had to respond with several proactive measures, four of which I will elaborate on. The first was a re-education drive, strategically and successfully implemented to promote the purchasing of equity shares, a necessity for the stability of the Credit Union. The second measure was training afforded to both Staff and Directors in Credit Risk, and Anti-money Laundering and Compliance. These refreshers and training exercises are essential because they ensure that all Staff and Directors are brought up to par with industry protocols, which serve to further reduce the threat of financial loss. Thirdly, the amendment of our organizational structure to include a Deputy General Manager to provide greater oversight of our Credit Union’s finances. Finally, incredibly attractive and competitive loan packages were offered in 2019, which contributed to the milestones we celebrate today. Page 15
LOANS AND DELINQUENCY We must admit that there were some setbacks in loans for the period under review. The number of actual loans by the end of the first half of the year was below projections. Thankfully, we were able to pick up in the last quarter, following a reduction in the interest rate on mortgage loans. During that time, we also introduced credit life insurance for loans up to $400,000. This insurance provides added protection for our Credit Union’s loan portfolio while at the same time giving members peace of mind, in the event of death or total disability by paying off the outstanding loan balance. It replaces the need for private insurance, which is more expensive, plus payment is due every five (5) years, thus saving you and your family money. With regards to delinquency, I applaud our Loans and Recoveries Department for their hard work in keeping the delinquency ratio within the stipulated guidelines of 5%. I would like members to understand that it is important for us to service our loans on a timely basis and come in to talk with the staff as soon as there is a change in circumstances that could affect your payments. This is our institution and in order for it to continue to grow, our loans portfolio, which is the largest source of income, must be managed dutifully. ATM On another intriguing note, our long-awaited ATM machine was installed at the Mon Repos branch. It is one of four (4) ATM machines shared with the League, Laborie and Choiseul Credit Unions. Testing began in December and use of the machine by members was scheduled to commence in the first quarter of 2020. A total of 2,000 ATM cards was ordered for our members and those of you who have not signed up yet, please do so. I know firsthand how thankful I was for mine during the COVID-19 lockdown. In addition to our ATM, the software for online banking has been purchased and this service will be available to you in 2020. EXPANSION We move from speaking about ones and zeros to blocks and sand. The BOD has come to a final decision to begin construction of a Credit Union building for Micoud, on land previously purchased for that purpose. The Covid-19 pandemic caused us to delay construction, scheduled to commence in May of 2020. However, like the rest of the financial world, we are unsure how long the fallout from
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the pandemic will last. Be assured though, that construction of this long-awaited building will commence as soon as it is safe to do so. In 2015 we took the bold step to go National. This has seen exponential profits that we want to continue by further expansion to the north of the island. As we continue to grow, discussions of further expansion will continue but I want to assure you that such expansion will come only after all variables have been meticulously scrutinized for the continued safety and development of the Credit Union. Later in the meeting therefore we will be asking you to confirm by resolution the purchase of lands in Vieux Fort and the north of the island. SUPERVISORY AND CREDIT COMMITTEE The Supervisory Committee did an outstanding job policing the operations of the Credit Union. Without bias, they ensured adherence to all departmental policies across branches. We also must applaud the Credit Committee for their long hours and the many loan approvals which serviced the needs of the “un-bank-able”. Through their efforts, we have transformed the dreams of so many into tangible realities. EDUCATION COMMITTEE The Education Committee went out of its way this year with new initiatives such as, Christmas donations to the less fortunate, primary school carol singing and community outreach walks. They have also continued celebrations in recognition of Credit Union month and Jounen Kwéyòl, as well as our esteemed scholarship award ceremony. We thank them and encourage persons to continue supporting the education drive. I am pleased to announce that the BOD has discussed the expansion of our donation program and plan to increase the annual number from one (1) to three (3) beginning 2021. SOCIAL RESPONSIBILITY That takes us to the social responsibilities of the Credit Union. We aim to improve the socioeconomic welfare of the community. On that note, please join me in giving a round of applause to all our scholarship holders. They all continue to attain passing grades; and keep making us proud. The BOD has decided to engage current and future scholarship holders in an orientation exercise at the Page 17
beginning of each academic year. This will have the two-fold objective of motivating them for the academic wear while giving them the opportunity to meet their fellow recipients. The first orientation exercise will be held prior to the new 2020 academic year. Our Pioneers cricket team won two games during the SPL tournament, but missed out of the semifinal by only nine (9) runs. Nonetheless, we had three (3) players called to the national senior trials and two (2) to the Under 19 team. The Credit Union also continued to support the community by donating to schools from the East to the South of the island, as well as donations to the development of sports and other social and fundraising activities in the community. CONCLUSION Let me conclude by reminding you that our Credit Union has progressed and continues to do so. We have seen economic growth; our Committees have served diligently, and we have fulfilled our social responsibility. We intend to continue supporting the communities less fortunate and increase the number of times per year. The Micoud branch will be up and running by our next AGM, barring any impediments due to the ongoing Covod-19 pandemic. We will continue to offer competitive packages and quality service to you the owners of this institution as we renew our commitment for a bigger, better tomorrow for members. We implore every member to commit to honor all loans as scheduled so we can wipe out delinquency altogether. The co-operative creed says, “I believe in the fair and just distribution of benefits and in working together with my fellowmen for my good and their good.� This is what we believe, this is what we stand for, and this is what we will do. I thank you. __________________ Dave Charlery (Mr.) PRESIDENT
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Treasurer’s Report
F
ellow members, the days of ‘ti boutique’ in reference to our Credit Union are long gone. There is no question, we are now among the key players operating in the financial landscape of St Lucia. I wonder whether the founding members ever envisioned that their
hard-earned savings, which formed the foundation of this institution, would help to build what we have become. Congratulations to each of you for playing your part to bring us here. Having said this, I must remind you that such a position comes with a responsibility that is not only for the Board, the various Committees or the members of staff, but for every member of the institution. With the challenges that 2020 have presented so far, we must work together as a true family if we are to at least break-even at the end of this financial year. On behalf of the Board of Directors, it gives me great pleasure to present the financial report of the Mon Repos Eastern Co-Operative Credit Union for the year ending December 31, 2019. Summary of Key Financial Activities for 2019 1. Key Accounting Ratios
Net Worth Ratio – 8.98%
Loans to Asset Ratio – 63.08%
Return on Asset Ratio – 1.85%
Delinquency Ratio - 4.46%
2. Other Highlights
St Lucia experienced growth of 1.73% in 2019. Although the economy grew, the unemployment rate decreased by only 0.17% from 20.88% in 2018 to 20.71%. The estimated youth unemployment rate, while the lowest since 2015, continues to be high at 45.23%. We can all appreciate why this situation continues to be a concern given that the Central Statistics Office in St Lucia defines youth as ages 15-29.
Liquidity continued to be high in the domestic financial market in 2019 resulting in competitive interest rate adjustments among financial institutions as each tried to attract Page 21
customers in an effort to increase their loan portfolio. The liquidity position had the effect of increasing the cost of funds as savings increased while options for placing excess cash remained limited.
Interest rate adjustment downwards for mortgage loans
Credit Life insurance with maximum coverage of $400,000 took effect in the last quarter of 2019, providing added protection for the loan portfolio and for members.
The ATM was installed at the Mon Repos branch in December 2019 and access to accounts 24/7, two (2) months later.
MEMBERSHIP At December 31, 2019 there were 7,472 members up from 6,762 in 2018. This represented growth of 10.50% or 710, of which almost 50% were at the Vieux-Fort branch. During 2016 – 2019, the largest growth was in 2016 as new branch Vieux-Fort added almost 500 members. Of note is that with the exception of 2018, this branch has added at least 50% to the total. However, while the total for the Credit Union increased in each year, growth has been at a decreasing rate.
MEMBERS
Mon Repos
Micoud
Vieux-Fort
Total
Growth
2015
2,512
1,718
53
4,283
2016
2,666
1,902
550
5,118
19.50
2017
2,850
2,069
999
5,918
15.63
2018
3,072
2,315
1,375
6,762
14.26
2019
3,236
2,502
1,734
7,472
10.50
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ASSETS The year 2019 saw the Credit Union achieving a milestone as it recorded more than one hundred million dollars in assets.
At December 31, 2019, total assets had increased by 15.87% or $14.12M, to $103,298,536 from $89,151,919 in 2018. The breakdown of the assets is as follow:
a) Members’ loans made up 63% of the total with a value of $65,163,128. This was a slight reduction of 1.12% as compared to $65,928,321 in 2018, which reflected the continuing battle between financial institutions, especially the commercial banks with more aggressive rate reductions, for the same pool of customers. We lost a significant number of our loans in favor of other institutions with more favorable rates. A downward adjustment to rates was made during the latter part of the year with quick responses from members, however many of these loans were not able to reach disbursement stage by year-end. b) Cash increased from $16,045,431 in 2018 to $28,374,416, an increase of 78.84%. This was an indication of the high level of liquidity in the domestic financial market. Page 23
c) Investment was the largest component of ‘Other’, which increased from $4,546,227 in 2018 to $7,137,290, or 56.99%. LIABILITIES For the period ended December 31, 2019 total liabilities was $89,189,825 from $77,075,366 in 2018, an increase of 15.72%. All categories of deposits grew during 2019 as members increased savings to take advantage of more favorable rates especially as compared to the commercial banks. The largest component, members’ fixed deposit grew by 16% over 2018 from $29,243,021 to $33,921,717. Members’ deposits went from $18,689,092 in 2018 to $25,153,912 or 34.59% while Members’ regular shares went from $27,743,255 to $28,073,867.02 or 1.19%. The result of this increase in savings was increased cost to the institution in the form of interest on savings, while at the same time experiencing difficulty in placing those funds given the limited investment opportunities. MEMBERS’ EQUITY In 2019, there was growth of 16.83% in total members’ equity, moving from $12,076,552 to $14,105,800. All components of equity increased: Members’ equity shares from $2,715,945 in 2018 to $3,127,070 or 15.14% reflecting confidence in the institution during an equity growth campaign. Retained earnings from $2,809,772 to $2,968,779 or 5.66%. Statutory reserve from $5,510,679 to $6,312,181 or 14.54%. The statutory reserve represents a commitment by way of resolution to allocate 45% of profits to the statutory reserves.
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INCOME In 2019, gross income was $7,684,054, an increase from $7,666,012 in 2018 or by 0.24%.
Interest on members’ loans continues to be the key
source
of
income.
2019
recorded
$6,670,976.37 compared to $7,088,036 in 2018, a reduction of 0.06%. This can be attributed to a reduction in interest rates on mortgage loans for members during the latter part of the year. Also, as indicated earlier, some of the board approved loans did not get disbursed during that year. Of note, is that non-interest income increased by more than 81% in 2019, moving from 5.31% of gross income in 2018 to 9.62% in 2019. While there was a small increase in gross income, net income for 2019 fell by 14.74% from $2,091,409 in 2018 to $1,783,124 and total comprehensive income from $2,459,726 to $1,772,571.
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EXPENDITURE There was an increase in expenditure by 24.58% moving from $4,736,496 in 2018 to $5,900,930. This was due to increases in: (1) interest on fixed deposits by 51.76%; (2) interest on regular shares and deposits by 12.91%; (3) Cuna insurance by 41.15%; (4) Legal & professional fees by 244.22%. Also contributing to the increase, was the introduction of Credit Life insurance and ATM related costs. OUTLOOK
Reduction in the rate of interest on vehicle loans, implemented earlier this year to make us more competitive.
Rolling out of ‘24/7 Online Banking’ to all interested members in the coming weeks.
The first half of 2020 has seen the explosion of the COVID-19 virus on a global scale – an unprecedented situation exacerbated by the interconnectedness of our economies. The negative effects of this health pandemic has led to an economic crisis which the IMF has projected will lead to the contraction of the global economy on a magnitude comparable to, or worse than the 2008 Global Financial Crisis. While St Lucia has fared well so far, in terms of affected cases of the disease, our heavy reliance on the regional and international markets, have seen the closure of a number of employment sources and by extension an increase in unemployment. How has our Credit Union responded in the short term?
Page 26
Loan freeze for six (6) months for those who have lost their jobs. This took effect from March 01, 2020 and will end on September 30, 2020. Moratorium on mortgage loans for those who have received a salary reduction. Delay principal payments for those who have received a reduction in pay. Education loans of up to $5,000 at 5.5% for purchase of school books and supplies. Allowance for a separate relief loan for payment of insurance premiums on home and vehicles securing loans with the Credit Union. The challenge we will face as a Credit Union should not be underestimated. For the first time every economy has been negatively affected, and the developed ones are not in a position to provide assistance to smaller ones like ourselves, certainly not on the level that we are used to. It means St Lucia can expect to see vast reductions in the level of remittances from relatives, as well as grants. We have not diversified effectively and most of our eggs are in a sector that is largely out of our control. Additionally, our spending vis a vis our output/revenue has left us with no cushion to sustain us in hard times. In the short to medium term, there will most likely be further increases in unemployment and/or further cuts in salaries. We will have to adjust and adapt so we can do much, much more with far less. However, it is not all gloom and doom. St Lucia and our Credit Union have immense talent and brains. We have to put our minds together to come up with ideas on how we will continue to build our organization so we can improve the well-being of our members, especially the poor and vulnerable, which can then spill over into our communities and throughout our island. This is a call for Officers, Staff and all Members to work together for our survival and continued growth. It will require us to dig deep within ourselves; it will require us to make greater sacrifices; it will require us to work so hard that at the end we will truly be able to say ‘indeed by the sweat of our brows, we accomplished this’. Fellow co-operators I thank you in advance for your continued co-operation. May God continue to be our guide and bless our undertakings in the coming months and years. _________________ Rufina Charlery (Ms.) TREASURER
Page 27
Credit Committee Report PREAMBLE The Credit Committee is pleased to report on the efforts and successes of our Credit Union and its affairs for the year 2019. Our weekly, Wednesday evening meetings were all about our loyal members’ development and progress. To the Loans team, the Credit Committee would
Mr. Cletus Dorleon Chairperson
Mrs. Ruffina Angel Charles Vice Chairperson
Ms. Angella Raymond Secretary
Ms. Trudy Augustin Assistant Secretary
like to take this opportunity to acknowledge the confidence the members have entrusted in you to undertake this important responsibility of managing their loan portfolio. We are grateful for the opportunity to serve our members as we improve their economic and financial status.
At the last Annual General Meeting, for the year 2018, Ms. Raymond was elected to serve on the Credit Committee for the year 2019-2020 and was designated ‘Secretary’ to assist with the weekly Wednesday Meetings. The following members served on the Credit Committee in the following capacities: Chairperson
-
Mr. Cletus Dorleon
Vice Chairperson
-
Mrs. Ruffina Angel Charles
Secretary
-
Ms. Angella Raymond
Assistant Secretary
-
Ms. Trudy Augustin
Credit Officer
-
Ms. Vanna Charley
Ms. Vanna Charlery Credit Officer
Page 28
CREDIT MANAGEMENT During the year 2019, the Credit Committee met every Wednesday evening, guided by the theme “Make You Smile”. This was in an effort to serve you, our members better, by assisting with life’s challenges and seeking to raise living standards. We are elated that members are satisfied with the level of development of our Credit Union and therefore implore all members to make their loan repayment a priority, as our loan portfolio is the backbone of our institution. In so doing, all parties will be happy with the continuing growth and development of the Mon Repos Eastern Co-Operative Union (1968) Limited. DATA ANALYSIS The Credit Committee assessed two thousand, three hundred and twenty-five ($2,325) loan applications, with a total value of nineteen million, two hundred and sixty–six thousand, four hundred and forty dollars and sixty–nine cents ($19,266,440.69) during the financial year 2019. This figure shows a decrease of two hundred and seven thousand, four hundred and forty dollars and ninety cents ($207,440.90) or a 1.1% decrease from the previous period. Table 1
Page 29
Table 1 shows that 87.69% or $16,895,023.85 of loans assessed were approved. Of that, 25.34% were cash covered given the very attractive rate of 4.5% on these loans. Additionally, this option gives members the security of holding onto their savings while still meeting the particular need being financed by that loan or loans. The remaining 12.31% comprised of two (2) deferred loans, which were good loans but had not yet met all conditions for approval. The remaining loans were rejected for reasons including prior delinquency, uneasiness about ability to repay, lack of security, insufficient information to be able to make a decision. LOAN PURPOSE The Credit Union comprises of members from every sector of our economy and the Credit Committee aims to meet the needs of all. Table 2 depicts the various purposes for which the Credit Union offers loans to its members, with comparative figures for the year 2018. The remaining figures show 2019 information in more detail. In the year 2019, the top five (5) loan requests in descending order, together with total value and percentage of total approved, were as follows: 1.
Vehicle related expenses
-
$4,180,461.00 or 21.47%
2.
House related expenses
-
$2,923,408.43 or 15.01%
3.
Personal expenses
-
$2,889,521.91 or 14.84%
4.
Debt consolidation
-
$2,628,538.67 or 13.50%
5.
Business loans
-
$1,446,942.22 or 7.43%
These 5 areas made up 83.27% of total approvals by the Credit Committee. When compared with 2018, the list is similar and made up 69.26% of total approvals. The only exception in the order was Debt Consolidation at #3, while Personal Expenses was #4. Of note is that while Vehicle related loans make up the largest percentage, these loans do not take into account the loans approved within the Branch by Loans Officer and the General Manager, nor those approved by the Board. As a result, the breakdown of the total portfolio of the Bank changes when all loans are considered.
Page 30
Table 2
Comparison of Loans by Purpose – 2019/2020
289,252.31
39
2
Appliance Loans
146,281.94
67%
219,607.64
70
365,889.58
55
-15
Books, Uniform, Supplies
-98,458.80
-33%
299,350
137
200,891.20
97
-40
Business Loans
129,219.50
10%
1,317,722.72
127
1,446,942.22
90
-37
Christmas Expenses
356,755.00
489%
73,030.00
30
429,785.00
143
113
Computer Purchases
5,125.00
37%
13,730.00
7
18,855.00
9
2
Contract Loans
-321,775.00
-56%
573,850.00
37
252,075.00
16
-21
Debt Consolidation
-119,982.49
-50%
237,800.91
29
117,818.42
20
-9
Debt Consolidation External
211,115.30
18%
1,155,095.33
144
1,366,210.63
138
-6
Debt Consolidation Internal
546,463.11
91%
598,046.51
67
1,144,509.62
104
37
Domestic Expenses
-295,452.19
-64%
462,780.00
213
167,327.81
89
-124
Educational Expenses
146,706.58
33%
446,730.00
79
593,436.58
64
-15
Funeral Expenses
15,818.66
21%
76,714.77
22
92,533.43
25
3
Furniture Loans
-50,370.00
-49%
102,060.00
15
51,690.00
11
-4
Graduation expenses
5,330.00
#DIV/0!
5,330.00
3
3
Home Improvement
114,706.37
8%
1,508,791.27
177
1,623,497.64
215
38
House Construction
-239,590.87
-71%
336,990.87
32
97,400.00
8
-24
House Insurance
-15,860.00
-71%
22,200.00
04
6,340.00
3
-1
House Renovations
-251,139.83
-17%
1,447,310.62
87
1,196,170.79
84
-3
Land Purchases
59,844.35
52%
115,655.65
3
175,500.00
3
0
Legal Expenses
33,823.00
60%
56,615.00
16
90,438.00
17
1
Medical Expenses
-284,695.14
#VALUE!
523 ,505.2
16
274,810.06
91
75
Personal Expenses
1,074,217.06
59%
1,815,304.85
584
2,889,521.91
763
179
Restructured Loans
7,186.69
4%
189,835.21
8
197,021.90
6
-2
Travelling Expenses
-121,481.23
-16%
745,787.82
149
624,306.59
118
-31
Vacation Expenses
746,110.00
562%
132,750.00
27
878,860.00
82
55
Vehicle Expense
193,537.58
22%
888,712.22
209
1,082,249.80
166
-43
Vehicle Insurance
-49,690.90
-75%
66,389.10
17
16,698.20
9
-8
Loan Amount
37
No. of Loans
180,080.00
Loan Amount
61%
Percentage Increase/ Decrease
109,172.31
Loan Amount Increase /Decrease
Agriculture Loans
Purpose of Loan
No. of Loans Increase/ Decrease
2019 No. of Loans
2018
Page 31
2,786,578.10
106
3,081,513.00
117
11
Wedding Expenses
-58,755.00
-39%
149,830.00
16
91,075.00
12
-4
Figure 1
No. of Loans
Loan Amount Increase /Decrease
Loan Amount
11%
Loan Amount
294,934.90
Percentage Increase/ Decrease
Vehicle Purchases
Purpose of Loan
No. of Loans Increase/ Decrease
2019 No. of Loans
2018
Mon Repos Eastern Co-Operative Credit Union (1968) Ltd Credit Committee Report Loans Reviewed - January to December 2019 Loans by Both Decision and Purpose LOANS BY PURPOSE Agriculture Loans Appliance Loans Books Uniform Supplies Business Loans Christmas Expenses Computer Purchases Contract Loans Debt Consolidation Debt Consolidation External Debt Consolidation Internal Domestic Expenses Educational Expenses Funeral Expenses Furniture Loans Graduation Expenses Home Improvement House Construction House Insurance House Renovations Land Development Land Purchases Legal Expenses Medical Expenses Mortgage Loans
COUNTS APPROVED 21 38 81 49 116 8 13 16 102 71 78 51 20 9 2 145 7 3 50 1 3 10 72 1
TOTAL AMOUNT 114,552.31 248,916.00 169,891.20 541,488.52 333,285.00 18,855.00 141,075.00 67,888.42 970,469.93 812,281.89 144,347.81 479,738.75 75,565.00 42,190.00 1,930.00 1,016,716.60 92,400.00 6,340.00 680,518.94 13,000.00 175,000.00 58,923.00 182,995.06 336,000.00 Page 32
LOANS BY PURPOSE
COUNTS
TOTAL AMOUNT
APPROVED 476 5 74 55 111 9 64 5 APPROVED – CASH COVERED Agriculture Loans 9 Appliance Loans 14 Books Uniform Supplies 10 Business Loans 23 Christmas Expenses 5 Computer Purchases 1 Contract Loans 2 Debt Consolidation 1 Debt Consolidation External 6 Debt Consolidation Internal 26 Domestic Expenses 8 Educational Expenses 3 Funeral Expenses 5 Graduation Expenses 1 Home Improvement 42 House Renovations 23 Land Development 1 Legal Expenses 1 Medical Expenses 10 Personal Expenses 251 Restructured Loans 1 Travelling Expenses 24 Vacation Expenses 4 Vehicle Expense 41 Vehicle Purchases 20 Wedding Expenses 3 CONDITIONAL APPROVAL Agriculture Loans 2 Appliance Loans 1 Books Uniform Supplies 1 Personal Expenses Restructured Loans Travelling Expenses Vacation Expenses Vehicle Expense Vehicle Insurance Vehicle Purchases Wedding Expenses
1,570,776.36 177,517.17 362,703.59 559,360.00 586,824.25 16,698.20 1,870,033.00 37,075.00 78,200.00 35,173.58 16,700.00 698,263.70 8,500.00 2,000.00 105,000.00 5,730.00 40,685.61 279,800.21 18,350.00 9,500.00 16,968.43 3,400.00 322,251.04 348,234.45 50,000.00 4,000.00 26,500.00 1,179,865.55 19,504.73 127,930.00 47,000.00 318,760.55 504,430.00 15,00.00 27,000.00 3500.00 5,000.00 Page 33
LOANS BY PURPOSE
COUNTS
TOTAL AMOUNT
CONDITIONAL APPROVAL Business Loans 4 Christmas Expenses 2 Contract Loans 1 Debt Consolidation 1 Debt Consolidation External 4 Debt Consolidation Internal 1 Educational Expenses 4 Home Improvement 5 House Renovations 2 Land Development 1 Personal Expenses 6 Travelling Expenses 4 Vacation Expenses 2 Vehicle Expense 2 Vehicle Purchases 14 Wedding Expenses 3 DEFERRED Appliance loan 1 Business loan 1 Debt Consolidation 1 Debt Consolidation External 2 Domestic Expenses 1 Home improvement 1 Legal Expenses 1 Personal Expenses 1 REJECTED Agriculture Loans 7 Appliance Loans 1 Books Uniform Supplies 5 Business Loans 13 Christmas Expenses 20 Debt Consolidation 1 Debt Consolidation External 24 Debt Consolidation Internal 6 Domestic Expenses 2 Educational Expenses 6 Furniture Loans 2 Home Improvement 22 House Construction 1 House Renovations 9
30,000.00 3,500.00 6000.00 13,200.00 34,990.00 12,000.00 23,500.00 29,130.00 67,000.00 6,500.00 18,600.00 32,000.00 7,000.00 13,700.00 312,300.00 29,000.00 2,300.00 10,000.00 30,000.00 50,135.00 1,000.00 19,000.00 5,215.00 6,000.00 69,500.00 40,000.00 9,300.00 167,190.00 84,500.00 1,000.00 269,921.09 40,427.52 3,630.00 80,697.83 9,500.00 236,400.00 5,000.00 100,417.40 Page 34
LOANS BY PURPOSE Legal Expenses Medical Expenses Personal Expenses Travelling Expenses Vacation Expenses Vehicle Expense Vehicle Purchases Wedding Expenses
Figure 2
COUNTS REJECTED 4 9 29 16 21 12 19 1
TOTAL AMOUNT 15,800.00 65,315.00 114,280.00 101,673.00 265,500.00 162,965.00 394,750.00 10,000.00
Loans Reviewed – January to December 2019 By Purpose LOAN BY PURPOSE
TOTAL AMOUNT
Agriculture Loans Appliance Loans Books Uniform Supplies Business Loans Christmas Expenses Computer Purchases Contract Loans Debt Consolidation Debt Consolidation External Debt Consolidation Internal Domestic Expenses Educational Expenses Funeral Expenses Furniture Loans Graduation Expenses Home Improvement House Construction House Insurance House Renovations Land Development
289,252.31 365,889.58 200,891.20 1,446,942.22 429,785.00 18,855.00 252,075.00 117,818.42 1,366,201.63 1,144,509.62 167,327.81 593,436.58 92,533.43 51,690.00 5,330.00 1,623,497.64 97,400.00 6,340.00 1,196,170.79 63,000.00
PERCENTAGE AMOUNT 1.501327176 1.899103139 1.042700119 7.510168813 2.230744157 0.09786447 1.308363097 0.611521463 7.091095091 5.940431024 0.868493629 3.080156784 0.480282952 0.268290344 0.027664684 8.426557173 0.505542262 0.03290696 6.20857173 0.326993455 Page 35
LOAN BY PURPOSE Land Purchases Legal Expenses Medical Expenses Mortgage Loans Personal Expenses Restructured Loans Travelling Epenses Vacation Expenses Vehicle Expense Vehicle Insurance Vehicle Purchases Wedding Expenses
TOTAL AMOUNT
PERCENTAGE AMOUNT
175,000.00 90,438.00 274,810.06 336,000.00 2,889,521.91 197,021.90 624,306.59 878,860.00 1,082,249.80 16,698.20 3,081,513.00 91,075.00 19,266,440.69
Figure 3
0.908315152 0.46940689 1.426366522 1.743965091 14.99769447 1.022617011 3.240383629 4.561610596 5.617279379 0.086669875 15.9941997 0.472713157 100.00
Loan by Purpose 2019
Page 36
Figure 4
CONCLUSION The Credit Committee wishes to say a big ‘thank you’ for the trust and confidence that you, the general membership has placed in us to play our role in the main income source of the institution. We would like to say ‘hats off’ to our General Manager, Mr. Priscillus Simeon, innovator of the various loan products under the guidance of the Board of Directors, as well as to our dedicated staff. Special thanks to our professional Loans Officers: Mrs. Kizzy Marius-Fanus, Ms. Tyra James, Ms. Shermaine Benoit, Ms. Aretha Winnette and Mr. Jermaine Jn. Baptiste for their hard work and effort. We would also like to mention our Police/Security Officers who keep our Credit Union safe. Last but by no means least, we want to thank you, our honored members, for your patience when your applications were not immediately approved and some back and forth had to take place; for your understanding when a decision did not go in your favor; and most of all to the majority, who crossed your t’s and dotted your i’s. We are here to serve you and we would like to approve every Page 37
request however, we are guided by policies which have been formulated to meet the requirements of the regulators but even more, to ensure that our Credit Union runs efficiently and effectively so we can all benefit in the end. On behalf of myself and Mrs. Ruffina Charles, I wish to say that our experience on the Credit Committee was challenging however, we tried to understand and assist in the various needs of our members. We were pleased to have been part of the decision-making process of Mon Repos Eastern Co-operative Credit Union for the past four (4) years and hope that the incoming Committee takes it to a higher level than we did. Members, remember that unity is strength and as we go forth, let us do so collectively so as to remove any obstacles in our way. With that said, I hope that members will take every opportunity they get to support and strengthen our local financial institution. I thank you
__________________________ Mr. Cletus Dorleon CHAIRPERSON
__________________________ Mrs. Ruffina Angel Charles ASSISTANT CHAIRPERSON
__________________________ Ms. Angella Raymond SECRETARY
__________________________ Ms. Trudy Augustin ASSISTANT SECRETARY
__________________________ __________ _________________ Ms. Vanna Charley CREDIT OFFICER
Page 38
Supervisory Committee Report
O
n Sunday 30th June 2019, the Mon Repos Eastern
Co-Operative
Credit
Union
(1968) Limited held its Annual General
Meeting at the Micoud Secondary School. At that meeting, Maura Charles-George and Rohn Peter were elected to serve as officers of the
Mr. Venantius Descartes Chairperson
Rohn Peter Vice Chairperson
Maura Charles-George Secretary Chairperson
Mr. Don Pierre Assistant Secretary
Supervisory Committee. They replaced outgoing officers Veronica Fevrier-Vitalis and Elizabeth Norbert. Tricia James, Don Pierre and Venantius Descartes remained officers on this committee. The Supervisory Committee held its first meeting th
on Monday 8 July, 2019 for the new term, and the following positions were filled: Chairman
-
Venantius Descartes
Vice Chairman
-
Rohn Peter
Secretary
-
Maura Charles -George
Assistant Secretary
-
Don Pierre
Committee Liaison Officer
-
Tricia James
Ms. Tricia James Committee Liaison Office
At that meeting, Committee members briefly introduced themselves and the new members were given an overview of the roles and functions of the Supervisory Committee. The Committee members expressed enthusiasm to serve on the Committee and by extension the Credit Union. All members were given a checklist of the requirements to serve on the Committee. This comprised: â—?
Police Record
â—?
Curriculum Vitae Page 39
●
Statutory Declaration
●
Oath of Office and Secrecy
Also, meeting dates were scheduled and agreed upon by members. A postmortem of the last annual general meeting was done. Key points coming from this were the restructuring of the election process for officers, and incentives for members to encourage them to come to the meeting earlier. MEETINGS The Supervisory Committee held four monthly meetings. The first three meetings were held at Mon Repos, Micoud and Vieux Fort respectively to review vouchers. The fourth was held for general discussions, to review policies, activities and operations of the Credit Union, as well as to develop and implement the Committee’s work plan. The Committee participated in quarterly Joint Committee meetings with the Board of Directors, Credit Committee and the General Manager. The purpose of these meetings were to update the various Committees of the financial position, budget and current matters of the society. Extra ordinary Joint Committee meetings took place as needed, for the review and approval of Officer and Employee loans. EXAMINATION OF DOCUMENTS For the period under review, the Supervisory Committee examined transaction slips of the various branches. The following discrepancies were observed: ●
No transaction date on slips
●
No branch name where transaction was done
●
Words and figures on slip not consistent
While the number of these errors is small, it is significant to emphasize to members to be thorough when filling out transaction slips. The Committee also reviewed meeting minutes of the Board of Directors. [By-Law 72 (2) (e)] Page 40
The Supervisory Committee is currently in the process of appraising the policies and operating procedures to make recommendations to the Board of Directors and the Credit Committee. [By-Law 72 (2) (b)] ACTIVITIES The Supervisory Committee was represented at a number of activities organized by the MRECCU. These included the following: ●
Scholarship presentation
●
Raffle of Smart Television sets for the MRECCU Equity Share Promotion/Drive
●
Cricket O’Rama
●
Soiree for International Credit Union Day
TRAINING The Supervisory Committee was engaged in two training sessions during the period under review. 1. Anti Money Laundering(AML) and Counter Terrorist Financing (CFT) This training session was held jointly with the Board of Directors, as well as the Operations and Compliance Officer of the MRECCU, on Saturday 1st August, 2019. The facilitators Albina Medard and Sylvia Auguste apprised members on their functions in detecting money laundering, legislation and regulations of AML and CFT, as well as how to respond to risks at the MRECCU. 2. Supervisory and Compliance Training This workshop was held on Saturday 24th August, 2019. Geraldine Lendor Gabriel served as the facilitator. The workshop was very informative and served as a guide to help members fulfill our roles effectively. Members reviewed the Co-operatives Societies Act and the functions of the Supervisory Committee for Credit Unions. The Committee was given guidelines with regards to the following: ●
Examination of the policies and procedures
●
Work plan formulation
●
Compliance with legislation
●
Establishment of a compliance register
●
Challenges or gaps for non-compliance Page 41
●
Fraud detection and prevention
●
Internal control review
This workshop was deemed a success and the Committee agreed upon a relationship with the facilitator for future reference. Fellow members, in the face of a very competitive and volatile financial market, the Supervisory Committee remains committed to ensuring the soundness of the policies, procedures and practices of the MRECCU. We pledge to work assiduously to ensure that records are accurate, our members’ deposits are protected and the operations are in compliance with our by-laws and Co-operative Society Act. We express our gratitude to members of the BOD, Staff, Credit Committee and Education Committee for cooperating with us, thereby making our work manageable and meeting our obligations.
__________________________ Venantius Descartes (Mr.) CHAIRMAN
__________________________ Rohn K. Peter (Mr.) VICE CHAIRMAN
__________________________ Maura Charles-George (Mrs.) SECRETARY
__________________________ Don Pierre (Mr.) ASSISTANT SECRETARY
__________________________ Tricia James (Ms.) COMMITTEE LIASON OFFICER
Page 42
SCHOLARSHIP RECIPIENTS YEAR
NAMES
2001
Erma Mathurin
2002
Priscillia Simeon
2003
Sheridon Wilson
2004
O’dara Charles
2005
Joel Fontenelle
2006
Kesyer George
2007
Lenny Joseph
Timothy Elien
2008
Cornell Faisal
Juanita Dornelly
2009
Kayla Serieux
Ajani Lebourne
2010
Sherica Wilson
Kesi Fevrier
2011
Jermima Jn. Baptiste
Kusrhan Augustin
2012
Tammie Leon
Jevon William
2013
Shirres Joseph
Donnel Biscette
2014
Sharlise Simeon
Reana Joseph
2015
Kurres Joseph
Aaliyah Austin
2016
Dhre Dornelly
Daraly St. Clair
Akeem George
2017
Shahid Celise
Kdi Dornelly
Jonelle Vitalis
2018
LauriAnn Smith
Jenny Kangal
Miguel Maxwell
2019
Kayannah Fanus
Xahil Celestin
Merkayla Maxwell
2001-2007 - $600.00
2008-2017 - $800.00
2018 - $1000.00
Page 43
Resolution SAINT LUCIA CO-OPERATIVE SOCIETIES ACT, CAP. 12.06 MON REPOS EASTERN CO-OPERATIVE CREDIT UNION (1968) LIMITED RESOLUTION – Declaration of Dividends and Patronage Refund WHEREAS the audited financial statements of the Mon Repos Eastern Co-Operative Credit Union (1968) Limited for the year 2019 has been presented and approved by this Annual General Meeting; AND WHEREAS the Balance Sheet of these Accounts shows a Net Surplus in the amount of one million, seven hundred and seventy-two thousand, five hundred & seventy-one dollars ($1,772,571) for the year ended December 2019. BE IT RESOLVED that this Annual General Meeting approve payment of 5% Dividend on equity shares and 3% Patronage Refund for the period January to December 2019.
Passed at the Annual General Meeting this _______________ day of _________________ 2020. Proposed by ……………………..………. Seconded …………………...…..…………………… Votes for ………..…… Against ……………..…….
Abstentions …………………….………
_______________________ President/Chairman _______________________ Secretary
Page 44
SAINT LUCIA CO-OPERATIVE SOCIETIES ACT, CAP. 12.06 MON REPOS EASTERN CO-OPREATIVE CREDIT UNION (1968) LIMITED RESOLUTION – To Provide Honorarium for Officers WHEREAS the Officers of the Mon Repos Eastern Co-Operative Credit Union (1968) Limited have given their free time and talent to the efficient running of the Mon Repos Eastern Co-Operative Credit Union (1968) Limited; AND WHEREAS the Mon Repos Eastern Co-Operative Credit Union (1968) Limited has realized a Net Surplus in the amount of one million, seven hundred and seventy-two thousand, five hundred & seventy-one dollars ($1,772,571) for the year ended December 2019. BE IT RESOLVED that an honorarium in the sum of fifty-five thousand dollars ($55,000), be disbursed amongst the Officers of the Mon Repos Eastern Co-Operative Credit Union (1968) Limited, at a rate to be determined by the Board of Directors, based on the performance of those Officers in terms of attendance at meetings to facilitate the fulfillment of the functions they were elected to perform.
Passed at the Annual General Meeting this _______________ day of _________________ 2020. Proposed by ……………………..………. Seconded …………………...…..…………………… Votes for ………..…… Against ……………..…….
Abstentions …………………….………
_______________________ President/Chairman _______________________ Secretary
Page 45
SAINT LUCIA CO-OPERATIVE SOCIETIES ACT, CAP. 12.06 MON REPOS EASTERN CO-OPERATIVE CREDIT UNION (1968) LIMITED RESOLUTION – To Erect a Building WHEREAS it is provided by section 114 (2) of the Co-operatives Societies Act CAP. 12.06 that the Board may not without the authorization of the general membership and Registrar invest the funds of the society in real property. AND WHEREAS the Board of Directors of the Mon Repos Eastern Co-Operative Credit Union (1968) Limited find it necessary to erect a building, for the general improvement of the Micoud operations. AND WHEREAS the Board of Directors of the Mon Repos Eastern Co-Operative Credit Union (1968) Limited recognizes the need to urgently relocate the operations of the Micoud branch to a more adequate and appropriate site to ensure optimal member service experience. BE IT RESOLVED that the Members of the Mon Repos Eastern Co-Operative Credit Union (1968) Limited authorize the Board of Directors to erect a building on a parcel of land described as block and parcel #1827 B 61 located in Micoud. The said parcel of land is owned by the Mon Repos Eastern Co-Operative Credit Union.
Passed at the Annual General Meeting this _______________ day of _________________ 2020. Proposed by ……………………..………. Seconded …………………...…..…………………… Votes for ………..…… Against ……………..…….
Abstentions …………………….………
_______________________ President/Chairman _______________________ Secretary Page 46
SAINT LUCIA CO-OPERATIVE SOCIETIES ACT, CAP. 12.06 MON REPOS EASTERN CO-OPERATIVE CREDIT UNION (1968) LIMITED RESOLUTION – To Purchase Real Property WHEREAS it is provided by section 114 (2) of the Co-operatives Societies Act CAP. 12.06 that the Board may not without the authorization of the general membership and Registrar invest the funds of the society in real property. AND WHEREAS the Board of Directors of the Mon Repos Eastern Co-Operative Credit Union (1968) Limited finds it necessary to acquire parcels of land and erect buildings for the expansion and improvement of the operations of the Credit Union. AND WHEREAS the Board of Directors of the Mon Repos Eastern Co-Operative Credit Union (1968) Limited recognizes the need to secure a suitable site or building to house the Vieux Fort branch. BE IT RESOLVED that the Members of the Mon Repos Eastern Co-Operative Credit Union (1968) Limited authorize the Board of Directors to purchase real property or land and erect such buildings as and when it becomes necessary. This is to be done with a high level of financial prudence by the Board, i.e. when such finances of the Society can safely allow for the acquisition. Passed at the Annual General Meeting this _______________ day of _________________ 2020. Proposed by ……………………..………. Seconded …………………...…..…………………… Votes for ………..…… Against ……………..…….
Abstentions …………………….………
_______________________ President/Chairman _______________________ Secretary
Page 47
SAINT LUCIA COOPERATIVE SOCIETIES ACT, CAP. 12.06 MON REPOS EASTERN CO-OPERATIVE CREDIT UNION (1968) LIMITED RESOLUTION – To Purchase Real Property (Northern Expansion) WHEREAS it is provided by section 114 (2) of the Co-Operatives Societies Act CAP. 12.06 that the Board may not without the authorization of the general membership and Registrar invest the funds of the society in real property. AND WHEREAS the Board of Directors of the Mon Repos Eastern Co-Operative Credit Union (1968) Limited recognize the need to operate a branch in the North of St. Lucia. AND WHEREAS the Board of Directors of the Mon Repos Eastern Co-Operative Credit Union (1968) Limited find it necessary to acquire a parcel of land and erect a building; or purchase a commercial building for the expansion of services to the North of St. Lucia. BE IT RESOLVED that the Members of the Mon Repos Eastern Co-Operative Credit Union (1968) Limited authorize the Board of Directors to purchase real property or land and erect such Building as and when it becomes necessary. This is to be done with a high level of financial prudence by the Board, i.e. when such finances of the Society can safely allow for the acquisition. Passed at the Annual General Meeting this _______________ day of _________________ 2020. Proposed by ……………………..………. Seconded …………………...…..…………………… Votes for ………..…… Against ……………..…….
Abstentions …………………….………
_______________________ President/Chairman _______________________ Secretary
Page 48
SAINT LUCIA CO-OPERATIVE SOCIETIES ACT, CAP. 12.06 MON REPOS EASTERN CO-OPERATIVE CREDIT UNION (1968) LIMITED RESOLUTION – To Open Branch and Use a Trade Name WHEREAS it is provided by Regulations 38 of the Co-Operatives Societies Act CAP. 12.06 that the Credit union may open a branch for servicing their members, having first obtained the Registrar’s approval in writing. AND WHEREAS the Board of Directors of the Mon Repos Eastern Co-Operative Credit Union (1968) Limited recognize the need to operate a branch in the North of St. Lucia. AND WHEREAS the Board of Directors of the Mon Repos Eastern Co-Operative Credit Union (1968) Limited recognize the need to register a trade name to market and launch a branch in the North of St. Lucia. BE IT RESOLVED that the Members of the Mon Repos Eastern Co-Operative Credit Union (1968) Limited authorize the Board of Directors to open a branch in the North and register the trade name First Community Credit Union; To allow for the Credit union to be known as Mon Repos Eastern Co-Operative Credit Union 1968 Ltd; trading as First Community Credit Union. Passed at the Annual General Meeting this _______________ day of _________________ 2020. Proposed by ……………………..………. Seconded …………………...…..…………………… Votes for ………..…… Against ……………..…….
Abstentions …………………….………
_______________________ President/Chairman _______________________ Secretary
Page 49
SAINT LUCIA CO-OPERATIVE SOCIETIES ACT, CAP. 12.06 MON REPOS EASTERN CO-OPERATIVE CREDIT UNION (1968) LIMITED RESOLUTION – To Appoint Auditor WHEREAS it is provided by section 129 (1) (b) of the Co-Operative Societies Act CAP. 12.06 that members of a society shall at each annual meeting appoint an auditor to hold office until the close of the next annual general meeting. AND WHEREAS the Auditors AP Walcott and Associates provided External Audit services to the Mon Repos Eastern Co-Operative Credit Union (1968) Limited for the year 2019. AND WHEREAS the Members, Officers and Board of Directors of the Mon Repos Eastern CoOperative Credit Union (1968) Limited, are satisfied with the services provided by the said Auditor. BE IT RESOLVED that the Auditor AP Walcott and Associates be appointed as auditor to hold office until the close of the next Annual General Meeting.
Passed at the Annual General Meeting this _______________ day of _________________ 2020. Proposed by ……………………..………. Seconded …………………...…..…………………… Votes for ………..…… Against ……………..…….
Abstentions …………………….………
_______________________ President/Chairman _______________________ Secretary
Page 50
Auditor’s Report and Financials
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION Financial Statements For the Year Ended December 31, 2019 (Expressed in Eastern Caribbean Dollars)
Page 51
INDEX
Audit Report
1-2
Statement of Financial Position
3
Statement of Changes in Equity
4
Statement of Comprehensive Income
5-6
Cash Flow Statement
7
Notes to the Financial Statements
8 - 28
i
A.P. Walcott and Associates Chartered Accountants P0 Box 3072 LC Tapion, Castries, St Lucia
INDEPENDENT AUDITORS’ REPORT To the Board of Directors of: Mon Repos Eastern Co-Operative Credit Union Opinion We have audited the financial statements of the Mon Repos Eastern Co-operative Credit Union, which comprise the statement of financial position as at December 31, 2019, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion the financial statements referred to above present fairly, in all material respects, the financial position of the Mon Repos Eastern Co-operative Credit Union as of December 31, 2019, and the results of its operations and its cash flows for the year then ended in accordance with International Financial Reporting Standards for Small and Medium-sized Entities. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under these standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Mon Repos Eastern Cooperative Credit Union in accordance with the ethical requirements that are relevant to our audit of the financial statements in Saint Lucia, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Credit Union’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the company or to cease operations or has no realistic option but to do so. Those charged with governance are responsible for overseeing the company’s financial reporting process. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an 1
audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also: -
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error.
-
Design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentation, or the override of internal control.
-
Obtain an understanding of the internal control relevant to the audit 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 Credit Union’s internal control.
-
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
-
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Credit Union’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Credit Union to cease to continue as a going concern.
-
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with the Board of Directors (the group charged with governance of the Credit Union) regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Principal: Anthony Walcott B.Sc. CPA CA CGMA
Associates: Valdrian Walcott ACCA.
2
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION LIMITED Statement of Financial Position As at December 31, 2019 (Expressed in Eastern Caribbean Dollars)
Note
2019 EC$
2018 EC$
5 7 8 9 2&13
1,086,929 27,287,487 7,137,290 722,245 65,163,128 1,901,456
1,330,147 14,715,284 4,546,227 1,274,958 65,928,321 1,356,980
103,298,535
89,151,919
10 12 14 15
2,040,329 25,153,912 33,921,717 28,073,867 89,189,825
1,399,998 18,689,092 29,243,021 27,743,255 77,075,366
16 18 19 20
3,127,070 490,154 1,210,526 6,312,181 2,968,779 14,108,710
2,715,945 392,662 647,494 5,510,679 2,809,772 12,076,552
103,298,535
89,151,919
ASSETS Cash on Hand Cash in bank Investment securities Accounts receivable Members' loans Property and equipment
LIABILITIES Accounts payable and accruals Members' deposits Members' fixed deposits Members' regular shares
MEMBERS' EQUITY Members' equity shares Stabilzation Fund Fair Value Reserve Statutory reserve Retained earnings
The accompanying notes form an integral part of these financial statements.
_______________ President
_______________ Secretary
3
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION LIMITED Statement of Changes in Equity As at December 31, 2019 (Expressed in Eastern Caribbean Dollars)
MEMBER FUNDS Stabilization Fund Opening Balance Add 10% of Net Surplus for the year Less Expenses for The Year Closing Balance
2019 $
490,154
257,378 135,285 392,662
2,715,945 411,125 3,127,070
2,316,100 399,845 2,715,945
Opening Balance Add 45% of Net Surplus for the year Reclassification Entrance Fees Closing Balance
5,510,679 797,657 3,845 6,312,181
4,399,753 1,106,876 4,050 5,510,679
Fair Value Reserve Opening Balance Add : Contributions for the year Closing Balance
647,494 563,033 1,210,526
647,494 647,494
Retained Earnings Opening Balance Total comprehensive income for the year Appropriations to member reserves Dividends and patronage payments Closing balance
2,809,772 1,772,571 (895,149) (718,416) 2,968,779
1,869,916 2,459,726 (1,242,161) (277,708) 2,809,772
Members Equity Shares Opening Balance Net Share purchase ClosingBalance
392,662 97,491
2018 $
Statutory Reserves
4
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION LIMITED Statement of Comprehensive Income As at December 31, 2019 (Expressed in Eastern Caribbean Dollars)
Income Interest On Members Loans Interest On Investment and Deposits Bad Debts Recovered Commissions Loan Processing Fees Other Income Gross Income Expenditure Salaries and Allowances Stationery, Office Supplies and Expenses Interest On Regular Shares and Deposits Interest On Fixed Deposits Telephone and Faxes Electricty Water Interest and Bank Charges Advertising and Promotions Audit Fees Sponsorship Cuna Insurance League Dues Board and Committee Expenses Annual General Meeting Staff and Officers Insurance Miscellaneous Expenses Repairs and Maintenance Shortages/ Overages Donations Insurance Legal and Professional Fees Special Events Travelling Expenses Property Taxes Honoraria Depreciation Lease Armotization
NOTE
22
2019 $ 6,670,976 274,155 139,399 109,523 205,100 284,900 7,684,054
2018 $ 7,088,036 171,274 52,042 84,935 198,891 70,834 7,666,012
1,347,911 120,192 1,190,347 1,521,925 83,622 77,890 2,212 14,460 111,838 28,950 46,698 416,721 74,322 13,500 36,085 9,095 3,302 93,174 1,445 37,850 19,734 114,113 21,880 26,756 3,420 55,000 121,744 27,561
1,261,053 112,552 1,054,206 1,002,844 94,404 73,893 2,393 12,936 90,977 24,750 48,215 295,241 70,813 13,600 41,284 10,575 2,988 54,219 560 23,346 20,250 33,151 27,321 19,271 3,420 55,000 108,689 27,561
5
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION LIMITED Statement of Comprehensive Income As at December 31, 2019 (Expressed in Eastern Caribbean Dollars)
NOTE Scholarship and Education Expenses Staff Welfare Benefits Rent Uniforms Credit Life Insurance ATM Costs Total Expenses Net Surplus before Bad Debt Expenses Bad Debt Expense Net Surplus For The Year Other Comprehensive Income: Loss on Disposal Of Assets Gain / (Loss) on Investment Total Comprehensive Income For The Year
23
2019 $ 40,101 16,200 69,000 80,432 73,451 5,900,930
2018 $ 18,305 49,921 60,000 22,760 4,736,496
1,783,124 1,783,124
2,929,516 (838,107) 2,091,409
(6,827) (3,726)
(6,135.18) 374,452
1,772,571
2,459,726
6
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION LIMITED Statement of Cash Flows As at December 31, 2019 (Expressed in Eastern Caribbean Dollars)
2019
2018
1,772,571
2,459,726
6,827 27,561 121,744 1,928,703
(182) (374,270) 6,135 831,431 27,561 108,689 (10,001) (446,978) 2,602,111
(2,591,063) 552,713 765,193 6,464,819 254,566 5,446,229
58,104 (396,360) (3,227,860) 4,001,456 (129,547) 305,793
Cash Flows from investing activity Purcahse Of Equipment Cash flows used in investing activities
(137,574) (137,574)
(104,075) (104,075)
Cash Flow From Financing Activities Increase In Members Shares Payments of Dividends and Patronage Increase in Members Fixed Deposits Entrance Fees Net cash flow from financing activities
741,737 (332,651) 4,678,696 3,845 5,091,627
2,684,165 (277,708) 5,638,248 4,050 8,048,754
Cash flows from operating activities Total comprehensive income for the year Adjustments for : Loss / (Gain) On BOSL Revaluation Loss/ (Gain) On Investments Loss On Asset Disposal Bad debts written off Armotization Depreciation Write Back of Depreciation Fixed Assets Write Back of Loss Provision
Operating profit/ (loss) before working capital items (Increase)/ Decrease In Investments (Increase)/Decrease In Accounts Receivable Increase In members loans Increase In members deposits Increase / (Decrease) In Payables and accurals Cash flows from/(used) in operations
Net increase /(Decrease ) in Cash and cash equivalents Cash and cash equivalents - beginning of the year Cash and cash equivalents - end of year Represented by: Cash in Bank Bank Overdraft
12,328,985 16,045,432 28,374,416
10,852,583 5,192,849 16,045,431
28,374,416 28,374,416
16,045,431 16,045,431
7
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION LIMITED Statement of Financial Statements As at December 31, 2019 (Expressed in Eastern Caribbean Dollars)
STATUS OF THE CREDIT UNION The Mon Repos Eastern Co-Operative Credit Union (1968) Limited, came into being as a result of a merger between the Mon Repos Community Credit Union (1968) Limited and the Micoud Cooperative Credit Union Limited, as from January 01, 2007. The former Societies were registered under the Co-operative Societies Ordinance/Act #82, and had obtained Certificates of Continuance from the Registrar of Co-operative, under the new Act #28 of 1999. The new entity operates in compliance with this new Act. The registered office of the Credit Union is Mon Repos Micoud. The principal business activity of the Credit Union is to provide cost effective financial services to its members by way of loan facilities and deposit instruments.
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. Basis of Preparation These financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and under the historical cost convention, except for available-for-sale financial assets that are measured at fair value. The methods used to measure fair value are discussed further in Note 3. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Credit Union’s accounting policies and the reported amounts of assets, liabilities and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the revisions are made and in any future periods they affect. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates in applying accounting policies are significant to the amounts recognized in the financial statements are reported in the notes on property and equipment, provision for loan losses, financial instruments classification, and impairment. 8
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION LIMITED Statement of Financial Statements As at December 31, 2019 (Expressed in Eastern Caribbean Dollars)
Income Recognition Interest income is recognized in the statement of comprehensive income for all interestbearing instruments on the accrual basis, via the effective interest method. Interest income includes interest on members’ loans, cash deposits and other investment securities. Dividend income is realized in the statement of comprehensive income on the date that the Co-operative’s right to receive the dividend is established, which is the dividend declaration date in the case of listed securities. Income from commissions and fees is recognized on the accrual basis, and income on nonproductive loans is realized when received. Cash and Cash Equivalents For the purposes of the cash flow statement, cash and cash equivalents comprise of cash on hand and cash in bank. Members’ Loans The Credit Union’s loans and advances are made by disbursement of funds to its members with fixed or determinable payments that are not quoted in an active market, and are stated net of the allowance for loan losses. Specific and general provisions for loan losses are based on the end of the year appraisal of individual loan balances. The specific provision relates to the facilities that are identified as being bad and/or doubtful, whereas the general provision is made for those facilities that are inherently weak in the portfolio, but have not been specifically identified. Loans are written down to estimated realizable value when the normal financing arrangement with the borrower has ceased. Interest on the facility up to that time is credited to operations, and a provision is made as deemed appropriate. Fees and other incidental legal expenses incurred in securing the loans are expensed. A credit risk provision for impairment is made, if there is objective evidence that the Cooperative will not be able to collect all amounts that are due according to the original contractual terms of the loan. Objective evidence includes observable data, default or delinquency in interest or principal payments, and information that the borrower is experiencing financial difficulty. The amount of the provision is the difference between the carrying amount and the present value of the estimated future cash flows discounted at the loan’s original interest rate, including amounts recoverable from guarantees and collateral held.
9
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION LIMITED Statement of Financial Statements As at December 31, 2019 (Expressed in Eastern Caribbean Dollars)
Property and Equipment Items of property and equipment are measured at cost less accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the items. The cost of software that is integral to the functioning of related equipment is included in the cost of that equipment. Parts of an item of property and equipment that have different lives are accounted for as separate items (major components) of property and equipment. Gains and losses on disposal of items of property and equipment are determined by comparing the proceeds with the carrying amount of the items, and are realized at the net amount as “other operating income/expenses� in the statement of comprehensive income. When revalued assets are sold, the amounts included in the revaluation surplus reserve are transferred to retained earnings. The cost of replacing an item of property and equipment is recognized in the carrying amount of the item when it is probable that future economic benefits embodied in the part will flow to the Co-operative and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The cost of repairs and replacements of a routine nature are recognized in the statement of comprehensive income at the time they are incurred. Land and buildings comprise the main office. Land is not depreciated. Depreciation expense is recognized in the statement of comprehensive income and is computed on the straight-line basis to allocate the cost of each part of an item of property and equipment to their residual values over their estimated useful lives as follows: Building Leasehold Improvements Furniture and equipment Computer hardware and software
5% 2% - 20% 10% 20% & 25%
10
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION LIMITED Statement of Financial Statements As at December 31, 2019 (Expressed in Eastern Caribbean Dollars)
Provisions A provision is established, if as result of a past event the Credit Union has a present legal or constructive obligation that can be reliably estimated, and it is probable that an outflow of economic resources will be required to settle it. Provisions are determined by discounting the expected future cash flows at the pre-tax rate, that reflects the current market assessments of the time value of money, and where appropriate, the risks specifically related to the liability. Foreign Currency Transactions Transactions in foreign currencies are translated into Eastern Caribbean Dollars (EC dollars), the Co-operative’s functional currency, at exchange rates on the dates of the transactions. Monetary assets and liabilities dominated in foreign currencies at the financial position date (balance sheet) are translated to EC dollars at that date’s prevailing exchange rate. Foreign currency differences arising on retranslation are recognized in the statement of comprehensive income. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Income Tax The Credit Union is exempt from income tax under Section 25 (1)(p) of the Income Tax Act of St. Lucia. Finance Income and Expenses Finance income and expenses comprise interest income on funds invested, gains and losses on the disposal of available-for-sale financial assets, and changes in the fair value of financial assets at fair value through profit or loss that are recognized in profit or loss. Interest income is realized as it accrues, in the statement of comprehensive income, using the effective interest method. Interest-Bearing Borrowings Interest-bearing borrowings are recognized initially at cost, less attributed transaction costs. Subsequent to the initial recognition, interest-bearing borrowings are stated at amortized cost, with any differences between cost and redemption value being recognized in the statement of comprehensive income, over the period of the borrowing using effective interest method.
11
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION LIMITED Statement of Financial Statements As at December 31, 2019 (Expressed in Eastern Caribbean Dollars)
Members’ Equity Shares The market value of members’ equity shares is at the nominal value of $5.00 per share in accordance with the By-Laws of the Credit Union. Members are requested to have a minimum of twenty shares in the Credit Union to be considered as full financial members. Members’ Regular Shares Members’regular shares are classified as a liability as they are redeemable at the option of the members. In the previous year, dividends declared on them were treated as an accrued expense, and was reported in the statement of changes in members’ equity, as a deduction from retained earnings. This year, interest paid on them is expensed and reflected in the statement of comprehensive income. Financial Instruments The Credit union has no derivative or compound financial instruments. Non-Derivative Financial Instruments Non-derivative financial instruments comprise investments in equity and debt securities, cash and cash equivalents, accounts receivable, members’ loans, bank overdraft, accounts payable and accruals, members’ deposits, members’ fixed deposits, members’ withdrawable shares and loans payable. Non-derivative financial instruments are recognized initially at fair value plus any directly attributable transaction costs. Subsequently, they are accounted for depending on their classification as either held-to-maturity, fair value through profit or loss, or available sale. Held-to-Maturity Investments Held-to-maturity investments are non-derivative assets with fixed or determinable payments and fixed maturities that the Co-operative has the positive intent and ability to hold to maturity, and which are not designated at fair value through profit or loss, or available-forsale. They are measured at amortized cost using the effective interest method, less any impairment losses. Any sale or reclassification of a significant amount of held-to-maturity investments, not close to their maturity date, would result in the reclassification of all held-to-maturity investments as available-for-sale, and prevent the Co-operative from classifying investment securities as held-to-maturity, for the current and the following two financial years.
12
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION LIMITED Statement of Financial Statements As at December 31, 2019 (Expressed in Eastern Caribbean Dollars)
Financial Assets at Fair Value Through Profit or Loss An instrument is classified at fair value through profit or loss if it is held for trading, or is designated as such upon initial recognition. Financial instruments are designated at fair value through profit or loss if the Co-operative manages such investments, and makes purchase and sale decisions based on their fair value, in accordance with the Credit Union’s documented risk management or investment strategy. Upon initial recognition, attributable transaction costs are recognized in the statement of comprehensive income when incurred. Financial instruments at fair value through profit or loss are measured at fair value, and changes therein are recognized in the statement of comprehensive income. Available-for-Sale Financial Assets Available-for-sale investments are non-derivative investments that are not designated as another category of financial assets. The Credit Union’s investment in equity securities and certain debt securities are classified as available-for-sale financial assets. Subsequent to their initial recognition, they are measured at fair value; and changes therein, other than impairment losses and foreign currency differences on available-for-sale monetary items, are recognized directly into equity. When an investment is derecognized, the cumulative gain or loss in equity is transferred to the statement of comprehensive income. Unlisted securities whose fair value cannot be reliably measured are carried at cost. Other non-derivative financial instruments are measured at amortized cost using the effective interest method, less any impaired losses. Impairment of Financial Assets A financial asset is assessed at each reporting date to determine whether there is any objective evidence that is impaired. It is deemed to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of the asset. For a financial asset measured at amortized cost, an impairment loss is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss for an availablefor-sale financial asset is computed in relation to its fair value. Individual financial assets of significant value are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics. All impairment losses are recognized in the statement of comprehensive income. Any cumulative loss in respect of an available-for-sale financial asset recognized previously in equity is transferred to the statement of comprehensive income. 13
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION LIMITED Statement of Financial Statements As at December 31, 2019 (Expressed in Eastern Caribbean Dollars)
An impairment loss is reversed if the reversal can be related objectively to an event occurring after impairment loss was recognized. For financial assets measured at amortized cost and available-for-sale financial assets that are debt securities, the reversal is recognized in profit or loss. For available-for-sale financial assets that are equity securities, the reversal is recognized directly into equity. Impairment of Non-Financial Assets The carrying amounts of the Credit Union’s non-financial assets are reviewed at each reporting date to determine if there is any indication of impairment. If any such impairment exists, then the asset’s recoverable amount is estimated. For intangible assets that have indefinite lives or that are not yet available for use, the recoverable amount is estimated each year at the same time. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to get it sold. In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to that asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets (cash generating unit) that generates cash inflows from continuing use, which are largely independent of cash inflows of other assets or other cash generating units. An impairment loss is recognized in the statement of comprehensive income, if the carrying amount of an asset or its cash generating unit exceeds its estimated recoverable amount. Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amounts of other assets in the unit on a pro rata basis. An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognized in prior periods are assessed at each reporting date for any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount; and only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. IFRS 9 Introduction of IFRS 9 brings about fundamental changes to accounting for financial instruments. This standard replaces IAS 39 with amendments for classification and measurement, impairment methodology and hedge accounting. 14
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION LIMITED Statement of Financial Statements As at December 31, 2019 (Expressed in Eastern Caribbean Dollars)
Amendment involves classifications based on two tests: (1) Business model (2) Contractual cash flow test (loan and interest payments) Financial assets are measured in either the following ways; fair value through profit and loss (FVTPL), fair value through other comprehensive income (FVTOCI), or amortized cost. Financial liabilities are measured at either amortized cost or fair value through profit and loss (FVTPL). IFRS 9 also includes the impairment model for financial assets and is based on the premise of expected losses with recognition in three stages: 1. On initial recognition where 12 month expected credit losses are measured through profit and loss or loss allowance. 2. Significant increases in credit risk whereby credit risk is not considered to be low. Full lifetime expected losses are expected to be recognized through profit and loss. 3. Where credit risk increases significantly and asset is considered to be credit impaired, interest revenue is calculated based on the carrying value of the asset net of the loss allowance. Financial assets are expected to be assessed individually. IFRS 9 also identifies types of hedging relationships and prescribed special accounting provisions. The standard is effective for annual periods commencing Jan 1st, 2018. The World Council of Credit Unions (WOCCU) the international representative body for credit unions has successfully advocated at the level of the International Accounting Standards Board (IASB) for the use of a simplified approach for IFRS 9’s application to Allowance for Loan Loss (ALL) accounting in the context of a non-complex cooperative financial institution. In March 2019 the WOCCU released an IFRS 9 Workbook which conforms to the IASB approved practical expedient approach to the calculation of IFRS 9’s Allowance for Loan Loss. This workbook formed the basis for the approach adopted by the Mon Repos Eastern Co-operative Credit Union for the 2019 Financial Year’s Allowance for Loan Loss. The MRECCU has implemented the use of a simplified approach to IFRS 9 for loan loss provisioning as of December 31st 2019. 15
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION LIMITED Statement of Financial Statements As at December 31, 2019 (Expressed in Eastern Caribbean Dollars)
The MRECCU’s simplified approach to the implementation of IFRS9 entails using a “Three Stage/ Bucket Approach” where the MRECCU’s loan book is reserved for using three phases of credit deterioration. The following is a breakdown of the “Three Stage/Bucket Approach” the MRECCU has used to recognize credit impairment and how the provision for expected loan losses are made: Bucket 1: Loans without signs of credit impairment, i.e. loans never in arrears ≥ 30 days. Bucket 1 recognizes expected losses within the next 12 months. which is calculated by multiplying: (a) the percentage chance of a loan going from fullyperforming to written-off within the next 12 months, by (b) the expected lifetime losses on similar loans, also expressed as a percentage. This means multiplying a fraction by a fraction. Bucket 1 loans are broken into particular Sub-buckets based on loan purpose (e.g., mortgages, education, personal vehicle loans, business loans, etc.) and a collective reserve amount is determined on a Sub-bucket-wide basis. Bucket 2: Loans that have signs of credit impairment—i.e. the loan has been in arrears for ≥30 days at least once (even if later cured)—but have not met the criteria for Bucket 3. Bucket 2 recognizes lifetime expected losses. Similarly, Bucket 2 loans are broken into particular Sub-buckets based on loan purpose (e.g., mortgages, education, personal vehicle loans, business loans, etc.) and a collective reserve amount is determined on a Sub-bucket-wide basis. Bucket 3: Loans with serious credit impairment as well as large exposures with a history of arrearage Bucket 3 is for any loan that becomes seriously impaired, such as in the case of long-term arrearage, as well as for the institution’s largest exposures that are in arrears. Each problem loan in Bucket 3 is analyzed individually.
16
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION LIMITED Statement of Financial Statements As at December 31, 2019 (Expressed in Eastern Caribbean Dollars)
Loans that are ≥90 days in arrears (unless later cured); and Any loan in arrears ≥30 days if it is one of the institution’s largest 10 loans and/or the loan is ≥5% of the institution’s total unimpaired regulatory capital (these loans stay in Bucket 3 even if cured). Bucket 3 recognizes lifetime expected losses. Compliance with Cooperatives Society Regulation In accordance with Regulation 30 of the Cooperatives Societies Act which relates to the calculation of loss exposure on outstanding loans which have gone into default for more than 90 days which includes: a) Total gross loans, b) Total delinquency on loans and, c) Net loan delinquency (less cash collateral). The disclosure is as follows: a) Total gross loans b) Total delinquency on loans c) Net loan delinquency (less cash collateral):
2.
: $65,163,128.35 : $2,655,879.42 : $2,380,038.21
DETERMINATION OF FAIR VALUES A number of the Co-operative’s accounting policies and disclosures require the determination of fair value, both for financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purpose based on the methods described herein. Where applicable, additional information about the assumptions made in arriving at fair values is disclosed in the notes pertinent to the asset or liability. The fair value of financial instruments that are not traded in an active market is determined by using varied valuation techniques. The Co-operative uses a variety of methods and makes assumptions that are based on market conditions existing at each balance sheet date. Quoted market prices or dealer quotes for similar instruments are used for loan payable. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments. The estimated fair value of cash, and bank deposits with no stated maturity, which includes non-interest bearing deposits, is the amount repayable on demand. The estimated fair value of borrowings that have no listed market price, is based on the
17
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION LIMITED Statement of Financial Statements As at December 31, 2019 (Expressed in Eastern Caribbean Dollars)
Discounted cash flows for new debt with similar years to maturity, at their stated interest rates. In case of the accounts payable and receivable, their nominal value less any estimated credit adjustments that may be applicable, are assured to approximate their fair values. Estimates and adjustments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable in the circumstances. For investments in equity and debt securities, the fair value of financial assets at fair value through profit or loss, held-to-maturity investments and available-for-sale financial assets, is determined by reference to their quoted bid price at the reporting date. The fair value of heldto-maturity investments is determined for disclosure purpose only. The fair value of accounts and other receivables is estimated as the present value of the future cash flows, discounted at the market rate of interest at the reporting date. In case of non-derivative financial liabilities, fair value which is determined for disclosure purposes is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date.
3.
FINANCIAL RISK MANAGEMENT The Credit Union’s activities expose it to a variety of risks namely credit risk, market risk and liquidity risk. The Board of Directors has overall responsibility for the oversight of the Credit Union’s risk management framework. Credit risk The Credit Union is exposed to credit risk in that a member or counterparty to a financial instrument fails to meet its contractual obligations, and this arises principally from bank deposits, members’ loans, accounts receivable, and investment securities. Accounts receivable include interest due in respect of investments and also loan interest receivable. The Credit Union’s bank deposits and available-for-sale financial assets are placed with highly reputable financial institutions. Members’ loans are presented net of a provision for impairment at the balance sheet date. The Credit Union is guided by its loan policy and the regulations in the Co-operative Societies Act, whilst being mindful of changes in the economy or in any particular segment
18
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION LIMITED Statement of Financial Statements As at December 31, 2019 (Expressed in Eastern Caribbean Dollars)
that represents a concentration in its portfolio. Management performs periodic credit evaluations of its customers’ financial condition. Market risk Market risk arise from changes in market prices, such as foreign exchange rates, interest rates and equity prices that will affect the Credit Union’s income or the value of its holdings of financial instruments. Management closely monitors the market trends and essays to manage and control its exposure to market risk within acceptable parameters, while optimizing the returns that it earns. Liquidity risks Liquidity risk is the risk that the Credit Union will not be able to meet its financial obligations as they fall due. Prudent liquidity risk management warrants the maintaining of sufficient cash flows and other committed credit facilities to meet liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to its reputation. Management does not believe that significant liquidity risk exists as at December 31, 2019. Currency risk The Credit Union is not exposed to significant currency risk as its market is local, and consequently its transactions are in its functional currency. Interest rate risk The Credit Union is exposed to the effects of fluctuations in the prevailing levels of market interest rates both on fair value and cash flows risks. Interest margins may increase as a result of such changes but may also reduce or create losses in the event that unexpected movements arise. Differences in contractual reprising or the maturity dates and changes in interest rates may expose the Credit Union to interest rate risk. The Credit Union’s interest-bearing deposits are at fixed interest rates and mature within one year. The Credit Union’s exposure and the interest rate on its financial assets and liabilities are as stated in Notes 8 and 15.
4.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS The Credit Union makes estimates and assumptions that affect the reported amounts of assets and liabilities within the next financial year and in the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. Judgments made by management in the application of IFRSs that have significant effect on the financial
19
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION LIMITED Statement of Financial Statements As at December 31, 2019 (Expressed in Eastern Caribbean Dollars)
statements and estimates with a significant chance of material adjustment in the next financial year are discussed below: Provision for Loan Losses Assets accounted for at amortized cost are evaluated for impairment on the basis described previously in accounting policy on impairment of financial assets in Note 2. The specific counterparty component of the total allowances for impairment, applies to members’ loans that are individually evaluated for impairment, and are based upon management’s best estimate of the present value of cash flows that are expected to be received. In determining the estimates of cash flows, management makes informed judgments concerning the financial situation of the customer and the net realizable value of any collateral security that it holds. Each impaired asset is assessed on the strength of its own merit. Assessed impairment allowances for groups of assets cover credit losses within the portfolio with similar economic characteristics, when there is objective evidence to suggest that they contain impaired balances, but the individual impaired items cannot yet be identified. In assessing the need for the general loan loss provision, management considers particulars such as credit quality, portfolio size, concentrations, and the relevant economics issues. Adjustments in Applying the Credit Union’s Accounting Policies The Credit Union’s accounting policies provide scope for assets and liabilities to be designated on inception into different categories under certain circumstances. Financial assets and liabilities are classified as “trading” if the Credit Union so determines it meets the description of trading assets and liabilities as set out in the accounting policy in Note 2 on financial instruments. Financial assets are classified as held-to-maturity if the Credit Union so determines that it has both the positive intention and the ability to hold the assets until their maturity dates as required by the accounting policy on financial instruments in Note 2. Fair Value of Financial Instruments Fair value estimates are made at a specific point in time based on the market conditions and information about the financial instruments. These estimates are highly subjective, with a great degree of uncertainty, and involve issues requiring a significant amount of judgment, and therefore cannot be determined with precision, changes in the assumptions that are made can significantly affect the estimates that are derived. The fair values of cash resources, members’ deposits, accounts payable and accruals, dividend and patronage refunds payable, 20
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION LIMITED Statement of Financial Statements As at December 31, 2019 (Expressed in Eastern Caribbean Dollars)
and loan payable are not materially different to their carrying amounts, due to their short term to maturity. Members’ loans are stated net of the provisions for impairment. The financial liabilities have no stated maturity except for members’ fixed deposits, which are repayable on demand. The fair value of loan payable is not materially different from its carrying value as the interest rate on it is that of the market. It is impractical to determine the fair value of investments due to the availability of information on all the determinants of the fair value.
5.
CASH IN BANK AND BANK OVERDRAFT Cash in bank comprises of the combined balances of the current accounts held at the Bank of St. Lucia Limited (BOSL).
416092782 416125841 412160047 42152247 421526885
6.
BOSL Current Account MR Current Account-MC Current Account-VF BOSL Current Account BOSL Current Account
2019 2018 $ $ 13,440,482 7,067,185 4,513,906 3,088,847 5,572,669 1,598,598 3,301,854 2,502,063 458,576 458,591 27,287,487 14,715,284
A/C Type Interest Rate Current 0% Current 0% Current 0% Current 0% Current 0%
PROVISION FOR LOAN LOSSES Balance at the beginning of the year Less: bad debts written off Add: loans loss provision for the year
2019 $ 1,096,006 (677,396)
418,610
2018 $ 460,012 (202,113) 838,107 1,096,006
21
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION LIMITED Statement of Financial Statements As at December 31, 2019 (Expressed in Eastern Caribbean Dollars)
7.
INVESTMENT SECURITIES Securities available-for-sale Listed St. Lucia Co-operative League Total securities available-for-sale Securities held-to-maturity Government of St. Lucia treasury bill Government of St. Lucia 2- year bond Government of St. Lucia - Note Bank of St. Lucia Limited - Fixed Income Certificate Total securities held-to-maturity Term deposits Bank of St. Lucia Limited CLICO International Life Insurance Co. Ltd. St. Lucia Co-operative League BOSL Shares First Citizens Investment Services Ltd. Sub Total term deposits Less: provision for impairment-CLICO Total Term Deposits Total investments securities
2019 $ 320,205 320,205
2018 $ 320,205 320,205
2,775,934 300,000 3,000,000 159,579 6,235,513
2,775,934 300,000 512,648 157,220 3,745,802
136,474 449,888 109,734 38,624 3,294 738,014 (156,442) 581,572 7,137,290
134,457 446,978 9,638 42,350 3,239 636,662 (156,442) 480,220 4,546,227
The investment securities form part of the funds held to meet the liquidity requirements under Section 119(3) of the Co-operative Societies Act. The interest rates on the investments range from 1.50% to 4.75%. 8.
ACCOUNTS RECEIVABLE Interest accrued on Investments Prepayment Building Rates Prepaid insurance Interest on loans Returned cheques Interest accrued on Fixed Deposits Cheques in transit Western Union Receivable Sundry receivables Commission Receivable Surepay Receivable Phone Cards on Hand Prepaid Employee Benefits Collections Receivable Accounts Receivable - Investments Accounts Receivable - Other Accounts Receivable - Cuna Ins
2019 $ 85,107 35,000 15,880 375,298 60 2,538 139,160 7,356 380 712 7,700 5,700 47,355 722,245
2018 $ 40,855 35,000 15,363 389,548 666 1,583 632,246 6,166 1,680 1,118 854 40,000 2,000 107,879 1,274,958
22
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION LIMITED Statement of Financial Statements As at December 31, 2019 (Expressed in Eastern Caribbean Dollars)
9.
MEMBERS’ LOANS In 2019, the figure is $65,163,128 net of the provision of $418,610 for possible loan losses. In the previous year, the provision for loan losses was$1,096,006.00 and the loan figure was $65,928,321 for 2018.
10.
ACCOUNTS PAYABLE AND ACCRUALS Audit fees payable Property taxes Interest on deposits and regular shares League dues payable Accounts Payable & Accruals Utilities payable Members Fixed deposits interest payable Employee Benefits Payable Members credits Sundry payables Bank error Net wages payable Salary Deductions Payable ATM Settlement Account Other Accrued Expenses Provision for dividends
11.
2019 $ 25,000 3,420 624,116 75,000 153,797 13,880 517,148 232,468 3,219 5,317 136 395 432 386,000 2,040,329
2018 $ 20,250 3,420 550,336 72,000 78,202 20,918 429,652 216,268 2,655 5,612 450 235 1,399,998
DIVIDEND AND PATRONAGE REFUNDS By resolution, the Board of Directors has agreed to pay dividends of 5% on equity shares and 3% patronage refunds for the year ended December 31, 2019. If this is ratified at the upcoming annual general meeting, it will cost the Co-operative about $386,000
12.
MEMBERS’ DEPOSITS 2019 $ Members' savings Bright Start savings Clubs and groups Family indemnity plan
22,884,457 1,321,463 924,875 23,117 25,153,912
2018 $ 16,584,435 1,084,311 1,002,944 17,402 18,689,092
23
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION LIMITED Statement of Financial Statements As at December 31, 2019 (Expressed in Eastern Caribbean Dollars)
13.
PROPERTY AND EQUIPMENT Leasehld Improv.
Land
14.
Buildings
Furniture & Equipment
Total
Cost As at Dec. 31, 2017 Addidtions Charge-backs As at Dec. 31, 2018 Additions Charge-backs As at Dec. 31, 2019
362,528 362,528 100,493 463,021
137,803 137,803 137,803
Accum. Dep. As at Dec. 31, 2017 Charge-backs Charge for the year As at Dec. 31, 2018 Charge-backs Charge for the year As at Dec. 31, 2019
-
57,418 27,561 84,979 27,561 112,540
Net Book Value As at Dec. 31, 2019
463,021
25,263
1,074,000
339,173
1,901,456
As at Dec. 31, 2018
362,528
52,824
658,494
283,134
1,356,980
As at Dec. 31, 2017
362,528
80,385
705,530
246,847
1,395,290
940,707 940,707 133,293 1,074,000
235,176 47,036 282,212 (329,248) 47,035 -
601,552 87,696 689,248 137,574 (31,813) 795,009
2,042,590 87,696 2,130,286 371,360 (31,813) 2,469,833
354,704 51,409 406,113 49,723 455,836
647,298 126,006 773,304 (329,248) 124,320 568,377
MEMBERS’ FIXED DEPOSITS Members’ fixed deposits are payable on demand, have varied maturity dates which become due within the next twelve months, and have effective interest rates ranging from 2.5% to 5.0%.
15.
MEMBERS’ REGULAR SHARES 2019 $ Opening balance of regular shares Net shares purchased Closing balance
27,743,255 330,612 28,073,867
2018 $ 25,458,935 2,284,320 27,743,255
24
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION LIMITED Statement of Financial Statements As at December 31, 2019 (Expressed in Eastern Caribbean Dollars)
16.
MEMBERS’ EQUITY SHARES
Opening balance of equity shares Net shares purchased Closing balance
17.
2019 $
2018 $
2,715,945 411,125
2,316,100 399,845
3,127,070
2,715,945
MEMBER FUNDS By special resolution in 2010, the Board of Directors agreed to revise the allocations that were made the yearly surplus, to more adequately distribute it, with special emphasis on building institutional capital and concern for the community. In that regard, the percentages were adjusted with 27.5% being allocated to the Statutory Reserve, 5% each for the Education and Disaster Funds, and 2.5% each for the Employment Benefit Fund, the Audit Fund, and a newly created Community Development Fund. The newly proposed Co-operative Societies Act makes the operations of these funds obsolete. To be proactive the Mon Repos Eastern Credit Union has adopted the fund structure as stipulated by the proposed Co-operative Societies Act.
18.
STABILIZATION FUND The proposed Co-operatives Societies Act makes provision for the establishment of a stabilization fund by each co-operative society. The pooled funds are to be managed in accordance with section 126 of the proposed legislation. While this legislation has not yet been enacted; its enactment is so imminent that Mon Repos Eastern Credit Union has adopted a proactive stance and established a stabilization fund requiring a ten percent of net surplus contribution annually in order to be compliant in advance of implementation of new legislation.
19.
EXCESS OF APPRAISED VALUE OF ASSETS On, March 14th 2013 the Credit Union had a valuation done of the premises of the Mon Repos Branch. As a consequence of this, the estimated open market value of the land and building was stated at $1,036,000, resulting in a revaluation surplus of $647,494. 25
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION LIMITED Statement of Financial Statements As at December 31, 2019 (Expressed in Eastern Caribbean Dollars)
On, September 13th and December 5th 2019the Credit Union had a valuation done of the property of the Mon Repos Branch as well as the Micoud Branch. As a consequence of this, the estimated open market value of the land at the Mon Repos and Micoud Branch collectively was stated at $1,537,020, resulting in a revaluation surplus of $563,032, giving a grand total revaluation surplus of $1,210,526.
20.
STATUTORY RESERVE Under Section 119(2) of the Co-operative Societies Act No. 28 of 1999, the Credit Union is required to appropriate at least 20% of the net surplus for each financial year to the statutory reserve fund. From 2010, the Credit Union made a resolution to credit 27.5% of its yearly surplus to that reserve fund. Management decided to make an additional allocation of $300,000.00 in 2012, from the net surplus to this reserve. From the year ended 2013, by way of resolution, management has allocated 45% of profits annually to the Statutory Reserves, to ensure compliance with section 125 of the proposed co-operative societies act.
21.
COMMITMENTS AND CONTINGENCIES As at the year-end date, total loans approved by the Co-operative but not fully disbursed totaled at end of 2019 were$174,929.01. At the previous year-end in 2018, the figure was $728,737.42. The Credit Union did not have any contingencies at the year-end date.
22.
OTHER INCOME Pass Book Sales Foreign exchange gain Income from phone cards Deferred Revenue Realized Bad Debt Recovery Other Income - Statements Credit Risk Fee Sundry Amounts
2019 $ 4,430 16,682 7,893 5,180 131,025 5,095 97,308 17,288 284,900
2018 $ 3,955 13,829 5,796 5,180 7,290 34,784 70,834
26
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION LIMITED Statement of Financial Statements As at December 31, 2019 (Expressed in Eastern Caribbean Dollars)
23.
GAIN/(LOSS) ON INVESTMENTS Gain (Loss) on impairment on CLICO deposits Gain (Loss) on Other Investment Gain (Loss) Revaluation of BOSL shares
24.
2019 $ (3,726) -
2018 $ 374,270 182
(3,726)
374,452
SUBSEQUENT EVENTS As of March 2020, the global economy is currently threatened by the advance of the Covid19 virus which currently exists as a pandemic. The threat to institutions such as the Mon Repos Eastern Co-operative Credit Union is unquantifiable at this time.
25.
RELATED PARTY TRANSACTIONS A party is related to the Credit Union if that party directly or indirectly controls it, is controlled by it or under common control with it; and if the party has an interest in the Credit Union that gives it significant influence over it, or has joint control over the Credit Union. In addition, a party is related to the Credit Union if the party is a member of the key management personnel of the Credit Union; is a close relative of the family of that member, or has close relations to that member, or any of the parties referred to in the preceding paragraph; or the party is a post-employment benefit plan for the benefit of employees of the Credit Union or any Credit Union that is a related party of the Credit Union. A number of transactions have been entered into with related parties in the normal course of business. These transactions were conducted at market rates, or on commercial terms and conditions. Included in members’ loans at the year-end date were loans to directors and staff totaling $3,431,065 (2018- $2,382,110). Shares and deposits held by directors and staff at that date totaled $1,516,959.28 (2018$1,188,838).
27
MON REPOS EASTERN CO-OPERATIVE CREDIT UNION LIMITED Statement of Financial Statements As at December 31, 2019 (Expressed in Eastern Caribbean Dollars)
26.
DIRECTORS’ RESPONSIBILITIES The Directors are responsible for the preparation and presentation of these financial statements.
27.
COMPARATIVE FIGURES Where changes have been made in the presentation of the current year’s figures, comparative amounts have been reclassified.
28
Credit Union Prayer Lord, make me an instrument of your 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. Bless, oh Lord our deliberations And grant that whatever we may say And do, will have Thy blessing and guidance, Through Jesus Christ, our Lord. Amen.
Notes _________________________________________________________________________________ _________________________________________________________________________________ _________________________________________________________________________________ _________________________________________________________________________________ _________________________________________________________________________________ _________________________________________________________________________________ _________________________________________________________________________________ _________________________________________________________________________________ _________________________________________________________________________________ _________________________________________________________________________________ _________________________________________________________________________________ _________________________________________________________________________________ _________________________________________________________________________________ _________________________________________________________________________________ _________________________________________________________________________________ _________________________________________________________________________________ _________________________________________________________________________________ _________________________________________________________________________________ _________________________________________________________________________________ _________________________________________________________________________________
Products and Services
PERMANENT SHARES: Your Stake in the Credit Union. WITHDRAWABLE SHARES: Monies held as security/collateral against Loans. DEPOSITS: Always available to you. FIXED DEPOSITS: Money saved for a specific period. LOANS: Wide Array of Low Cost Loans available. FREE LIFE SAVINGS & LOAN PROTECTION INSURANCE FAMILY BURIAL INSURANCE COLLECTION OF UTILITY BILL PAYMENTS: SurePay SUPPORT FOR YOUTH & SPORTS THROUGH SPONSORSHIP SECONDARY SCHOOL SCHOLARSHIPS FOR MEMBERS’ CHILDREN WESTERN UNION MONEY TRANSFER
OFFICES: Lady Mico Street, Micoud, St. Lucia W.I. Tel: (758) 454 4499 / Fax: (758) 454-0273 Mon Repos, Micoud, St. Lucia W.I. Tel: (758) 455 3370/2 / Fax: (758) 455 3072 Email: mreccu@candw.lc / info@monreposcreditunion.com. Beanfield, Vieux Fort, St. Lucia W.I. Tel: (758) 454-6372/8370 / Fax: (758) 454-6272
