ECCB 2017-2018 Annual Report and Statement of Accounts

Eastern Caribbean Central Bank Notes to the Financial Statements March 31, 2018 (expressed in Eastern Caribbean dollars) ECCB ANNUAL REPORT 2017/2018 (expressed in Eastern Caribbean dollars)

138

EASTERN CARIBBEAN CENTRAL BANK NOTES TO THE FINANCIAL STATEMENTS

March 31, 2018

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% (2017: 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% (2017: 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 Class “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, 2018. The Bank’s investments in associates are detailed below: 2018 $ 2017 $ Eastern Caribbean Home Mortgage Bank (ECHMB) Balance at beginning of year 14,434,138 14,176,431 Share of profit for the year 1,046,418 758,797 Dividend received in year (501,090) (501,090) Balance at end of year 14,979,466 14,434,138

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

2,078,843 392,084 2,470,927

1,851,605 227,238 2,078,843

Share of profit for the year Balance at end of year

71