ECCB 2017-2018 Annual Report and Statement of Accounts

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

EASTERN CARIBBEAN CENTRAL BANK NOTES TO THE FINANCIAL STATEMENTS

March 31, 2018

20. Other reserves

2018 $

2017 $

92,507,945 (45,520,969) 26,948,000 11,952,615 6,537,928 1,808,877

Property, plant and equipment revaluation reserve Unrealised holding (loss) gain - investment securities

82,106,312 (17,424,849) 26,510,000 11,390,470 6,537,928 1,808,877

Pension reserve

Self-insurance reserve fund

Capital reserve

Export Credit Guarantee fund

232,756

Unrealised holding gain – money market instruments

132,806

Total reserves

94,467,152

111,061,544

Export Credit Guarantee fund Under Article 42 (1) of the Eastern Caribbean Central Bank Agreement Act 1983, the Bank is empowered to administer or participate in an export credit guarantee scheme. In exercise of this power, the Bank has assigned to one of its departments, the objective of providing pre-shipment export credit guarantees to commercial banks in respect of advances made to exporters from the Organisation of Eastern Caribbean States. Article 42 (4) of the Eastern Caribbean Central Bank Agreement Act 1983 provides for the Bank to make discretionary contributions out of its profits towards a guarantee fund for administering the Export Credit Guarantee Scheme. The Board of Directors have agreed to maintain the fund at a minimum of $1,000,000. Capital reserve Capital reserve includes the land (8.3568 acres) on which the Bank’s headquarters (phase I and II) are constructed, which was donated by the Government of St. Kitts and Nevis. The land was independently valued at $629,528 in 1991 for phase I and $2,720,000 in 2001 for phase II. In 2003 the Government of St. Kitts and Nevis donated an additional 0.61 acres to the Bank, which has been independently valued at $498,400. In 2005, the Government of St. Kitts and Nevis donated an additional 2 acres of land which has been independently valued at $2,690,000. Self-insurance reserve The Board of Directors have agreed to appropriate annually to the Self-insurance Reserve, from net income, such amount equivalent to the quoted premium from an insurance carrier, to cover potential catastrophe in respect of the Bank’s headquarters buildings and full coverage for the other properties. It also agreed to a funded cap of 20% of the replacement value of the relevant buildings (determined by independent valuation). Pension reserve The Board of Directors have decided to make appropriations annually to or from net income for the amounts necessary to maintain a pension reserve equivalent to the pension asset.