ECCB 2015/2016 Annual Report

EASTERN CARIBBEAN CENTRAL BANK

NOTES TO FINANCIAL STATEMENTS

(expressed in Eastern Caribbean dollars)

March 31, 2016

Eastern Caribbean Central Bank Notes to Financial Statements March 31, 2016 (expressed in Eastern Caribbean dollars) East r aribbean Central Bank Notes to Financial Statements March 31, 2016 (expressed in Eastern Caribbean dollars) Investme ts in assoc ated undertaki g using the equity method 13. Investments in associated undertakings using the equity method Article 42 (1) of the Eastern Caribbean Central Bank Agreement Act 1983 empowers the Bank, with the approval of the Monetary Council, to administer or participate in corporations or schemes established for the purpose of promoting the development of money, capital or securities markets in the territories of participating governments. Article 42 (2) of the Eastern Caribbean Central Bank Agreement Act 1983 authorises the Bank, with the approval of the Monetary Council, to subscribe to hold and sell shares of a corporation organised with the approval or under the authority of the participating governments for any of the purposes specified in Article 42 (1). The following are institutions which were established under Article 42 (1): Eastern Caribbean Home Mortgage Bank (ECHMB ) The Bank holds 24.8% (2015: 24.8%) of the share capital of the ECHMB – 25,000 Class “A” shares at a cost of $100 each and 41,812 Class “A” shares at a cost of $160 each. The Company was established as a vehicle to foster the development of the money market and secondary market for mortgages in the territories of the participating governments of the ECCB Agreement Act 1983. Eastern Caribbean Securities Exchange (ECSE) The Bank holds 30.8% (2015: 30.8%) of the share capital of the ECSE – 300,000 Class “A” shares at a cost of $10 each. The ECSE was established to enhance and increase investment opportunities, and to foster the development of a securities market in the territories of participating governments of the ECCB Agreement Act 1983. The Eastern Caribbean Central Securities Depository Limited (ECCSD) and Eastern Caribbean Central Securities Registry Limited (ECCSR) are both wholly owned subsidiaries of the ECSE. Organisation of Eastern Caribbean States Distribution and Transportation Company (ODTC ) The Bank holds 20% of the share capital of the ODTC – 2,001 Clas s “A” shares at a cost of $10 each. The Company was established as a vehicle to foster the development of the distribution and transportation sector in the territories of the participating governments of the ECCB Agreement Act 1983. The company has not commenced operations as of March 31, 2016. The Bank’s investments in associates are detailed below: 2016 $ 2015 $ Eastern Caribbean Home Mortgage Bank (ECHMB) Balance at beginning of year 14,056,370 13,866,457 Share of profit for the year 621,151 858,033 Dividend received in year (501,090) (668,120) Balance at end of year 14,176,431 14,056,370 Article 42 (1) of the Eastern Caribbean Central Bank Agreement Act 1983 empowers the Bank, with the approval of the Monetary Council, to administer or participate in corporations or schemes established for the purpose of promoting the development of money, capital or securities markets in the territories of participating governments. rticle 42 (2) of the Eastern Caribbean Central Bank Agreement Act 1983 authorises the Bank, with the approval of the M netary Council, to subscribe to hold and ell shares of a corporation orga ised with the approval or under the authority of the participating governments for any of the purposes specified in Article 42 (1). The following are institutions which were established under Article 42 (1): Eastern Caribbean Home M rtgage Bank (ECHMB) The Bank holds 24.8% (2015: 24.8%) of the share capital of the ECHMB – 25,000 Class “A” shares at a cost of $100 each and 41,812 Class “A” shares at a cost of $160 each. The Company was established as a vehicle to foster the d velopment of he money market and secondary market for mortgages in the territories of the participating governments of the ECCB Agreement Act 198 3. Eastern Caribbean Securities Exchange (ECSE) The Bank holds 30.8% (2015: 30.8%) of the share capital of the ECSE – 300,000 Class “A” shares at a cost of $10 each. The ECSE was established to enhance and increase investment opportunities, and to foster the development of a securities market in the territories of participating governments of the ECCB Agreement Act 1983. The Eastern Caribbean Central S curities Dep s tory Limited (ECCSD) and Easte n Caribbean Ce ral Securiti s Registry Limit d (ECCSR) are both wholly owned subsidiaries of the ECSE. Organisation of Eastern Caribbean States Distribution and Transportation Company (ODTC) The Bank h lds 20% of the share c pi l of the ODTC – 2,001 Class “A” shares at cost of $10 each. The Company was established as a vehicle to foster the development of the distribution and transportation sector in the territories of the participating governments of the ECCB Agreement Act 1983. The company has not commenced operations as of March 31, 2016. The Bank’s investments in associates are detailed below: 13. Inves ments in associated undertakings using the equity method Article 42 (1) of the Eastern Caribbean C ntral Bank Agr e ent Act 1983 empowers the Bank, with approv l of the Monet ry Council, to administer or participate in orporations or schemes established fo the purpos of pr moti g the development f money, capital or securities markets in the terri ories f participating governments. Article 42 (2) of the Eastern Caribbean C ntral Bank Agreement Act 1983 authorises the Bank, with the approval of the Monetary Council, to subscribe to hold and sell shares of corporation organised with the approval r under t authority of the participating governments for any of the purposes specified in Artic e 42 (1). The foll wing are institutions w ich wer estab ished under Article 42 (1): Eastern Caribbean Home Mortgage Bank (ECHMB ) The Bank holds 24.8% (2015: 24.8%) of the share capital of the E HMB – 25,000 Class “A” shares at a cost of $ 00 e ch and 41,812 Cl ss “A” shares t a cost of $160 each. The Company was established as a v hicl t foster the development of he money market and secondary market for mortgages in the territories of the participating governments of the ECCB Agreement Act 1983. East rn Caribbean Securities Exchange (ECSE) The Bank holds 30.8% (2015: 30.8%) of the share capital of the ECSE – 300,000 Cl ss “A” shares at a cost of $10 each. The ECSE was established to enha ce and i crease investment opportunities, and to foster the development of a securities ma k t in the territories f participating governments of the ECCB Agreement Act 1983. The Eastern Caribbean Central Securities Depository Limited (ECCSD) and Easter Caribbean Central Securities Registry Limited (ECCSR) are both wholly owned subsidiaries of the ECSE. Organisation of Eastern Caribbean States Distribution a d Transportation ompany (ODTC ) The Bank holds 20% of the share capital of the ODTC – 2,001 Cl s s “A” shares t a cost of $10 each. The Company was established as a ve icle to fost r the developmen of the distribution and ransportation sector in te r tories of the participating governments of th ECCB Agreement Act 1983. The pa y has not commenced operations as of March 31, 2016. Th Ba k’ investments in ssociates are detailed below: 2016 $ 2015 $ Eastern Caribbean Home Mortgage Bank (ECHMB) Balance t beginning of year 14,056,370 13,866,457 S are of profit for the year 621,1 1 858,033 Dividend received in year (501,090) (668,120) Bal nce at end of year 14,176,431 14,056,370

13.

Eastern Caribbean Securities Exchange (ECSE) Balance at beginning of year

East rn Caribbean Securities Exchange (ECSE) Balance t beginning of year

1,394,877 456,728 1,851,605

1,394,877 456,728 1,85 ,605

1,025,277 369,600 1,394,877

1,025,277 369,600 1,394,877

Share of profit for the year Balance at end of year

S are of profit for the year Bal nce at end of year

67

67

103

103

ECCB A nnual R eport 2015/2016