ECCB 2015/2016 Annual Report

Eastern Caribbean Central Bank Notes to Financial Statements March 31, 2016 (expressed in Eastern Caribbean dollars)

EASTERN CARIBBEAN CENTRAL BANK

NOTES TO FINANCIAL STATEMENTS

(expressed in Eastern Caribbean dollars)

March 31, 2016

20. Other reserves Other reserves

20.

2016 $

2015 $

82,106,312 22,041,092 14,467,000 10,980,827 6,537,928 1,808,877

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

82,106,312 17,300,883 20,517,000 10,980,827 6,537,928 1,808,877

Pension reserve

Self-insurance reserve fund

Capital reserve

Export Credit Guarantee fund

7,664

Unrealised holding gain/(loss) – money market instruments

(1,765)

Total reserves

137,949,700

139,250,062

Export Credit Guarantee fund

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 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. 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 Easter Caribbean St tes. ti l (4) of the Eastern Carib ean Central Bank Agreem nt 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 inimum 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, hich as donated by the overn ent of St. Kitts and Nevis. The land was independently l t , i 91 for phase I and $2,720,0 in 20 1 for phase II. In 20 3 the Government of St. Kitts and Nevis donated n additional 0.61 acres to the Bank, which has been indepe dently valued at $498,400. In 2005, the Governm nt f St. Kitts and Nev s do ated an a ditional 2 acres of l nd which has been independently valued at $2,690,000. Self-insurance reserve The Board of Directors have agreed to appropriate annually to 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 eserve 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.

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ECCB A nnual R eport 2015/2016