SVGTCCU Ltd. 44th AGM Report

Celebrating 44 years

Preserving Confidence and Trust In A Challenging Financial Environment 44

Celebrating 44 years

45 Preserving Confidence and Trust In A Challenging Financial Environment

Celebrating 44 years

Preserving Confidence and Trust In A Challenging Financial Environment 46

Celebrating 44 years

Page 27

47 Preserving Confidence and Trust In A Challenging Financial Environment

Celebrating 44 years

ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED Page 6
Statement of Profit or Loss and Other Comprehensive Income
For the year ended December 31, 2021 2020
(Expressed in Eastern Caribbean Currency) $

Notes 2021 7,251,612
$ (2,489,973)
4,761,639
Interest income 25 7,508,178
356,137
Interest expense 26 (2,669,993) 5,117,776

Net interest income 4,838,185 (259,161)
(5,135)
Administrative and commission income 27 354,314
(306,823)
Operating profit before operating expenses 5,192,499 (1,949,906)
(1,880,904)
Increase in allowance for loan loss 9 (387,845)
136,131
Increase in allowance for loss on investments securities 8(i) (58,485) 851,978
412,728
Selling expenses 28 (279,960)
-
General and administrative expenses 29 (1,967,594) 42,134
1,306,840
Staff costs 30 (2,031,824)

Income from supplies outlet – net 31 57,616

Operating profit 524,407

Other income 32 627,974

Gain on investment properties 12 714,400

Excess of contributions over death benefits paid 22 27,270

Profit, being total comprehensive income for the year 1,894,051

The following expense is included in the foregoing:- 286,959 253,008
Depreciation

The accompanying notes on pages 9 to 46 form an integral part of these financial statements.

Preserving Confidence and Trust In A Challenging Financial Environment 48

Celebrating 44 yearsST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITEDPage 7
Statement of Cash Flows
49 Preserving Confidence and Trust In A Challenging Financial EnvironmentFor the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

Note Share Statutory Develop- Death Other Accumulated Retained Total
capital reserve ment fund benefit reserves other earnings $
Balance as at January 1, 19 $
2020 22 $ $ fund $ comprehen- $ 19,002,597
4,012,560 $ sive income 1,207,075
Movement in share capital 9,545,350 - 112,258 542,014 1,664,228 (30,000)
Payments from development 1,207,075 - - 432,390 - $ -
fund - - - 10,533
- - (30,000) - 2,693,797 -
Transfer to death benefit fund 348,287 - - - -
- - 10,533 - - (348,287) -
Transfer to statutory reserves 20 - - - - -
Transfer to development fund 21 - - 20,000 - 40,000 - (20,000) (207,965)
Transfer to other reserves 23 - - - - - - (40,000) (75,587)
Dividend paid - - - - - - (207,965)
Rebates paid - - - - - - (75,587) 1,306,840
Profit for the year - - - - 1,306,840
-
-

Balance as at December 31, 2020 10,752,425 4,360,847 102,258 442,923 582,014 2,693,797 2,279,229 21,213,493

Movement in share capital 19 2,268,823 - - - - - (33,214) 2,235,609
- - (30,000) - - - - (30,000)
Transfer to development fund 21 - - 6,817 - - - 6,817
Transfer to death benefit fund 22 - 189,405 - - - - -
Transfer to statutory reserves - - - - - - (189,405)
Dividend paid - - - - - - (196,629) (196,629)
Rebates paid - (77,622)
- - - - (77,622)
Profit for the year -- 1,894,051
13,021,248 4,550,252 582,014 2,693,797 1,894,051
Balance as at December 31, 2021 72,258 449,740 25,045,719
3,676,410

The accompanying notes on pages 9 to 46 form an integral part of these financial statements.

ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED Celebrating 44 years
Statement of Cash Flows Page 8
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

Cash flows from operating activities Note 2021 2020
Profit for the year $ $
Adjustments for
Depreciation 1,894,051 1,306,840
Interest income from loans
Investment income 13 286,959 253,008
Bad debts expense on loans 25 (7,246,110) (7,054,524)
Bad debts expense (recovery) on supplies outlet receivables 25 (262,068)
Allowance for loss on investment securities 9 387,845 (197,088)
31 (4,822) 259,161
Allowance (recovery) for inventory obsolescence 8(i) 58,485
Gain on revaluation of investment properties 31 - (3,187)
Fair value loss in investment securities 12 (714,400) 5,135
Net profit before changes in operating assets and liabilities 27 - (70,311)
Decrease (increase) in loans to members
Decrease in inventories (5,600,060) -
Decrease (increase) in other assets 148,918 18,610
Increase (decrease) in accounts payable and accrued liabilities 392,259 (5,482,356)
223,891 (115,000)
Increase in staff pension (174,880) 120,442
Increase in savings and other deposits 140,936 (213,268)
Increase (decrease) in fixed deposits 242,435
Cash generated from operations 7,214,788 129,555
408,851 8,944,359
Interest income received (261,853)
2,754,703 3,364,314
Investment income received 7,246,110 7,101,288
171,733
Net cash generated from operating activities 349,568 10,637,335
10,350,381
(1,552,620)
Cash flows from investing activities (3,247,646) 1,073,482
Purchase of financial investments 1,150,000
Redemption of financial investments 13 (74,694) (65,282)
Additions to property and equipment 12 (73,587) (149,013)
Additions to investment properties (2,245,927) (693,433)
Net cash used in investing activities
(2,288,669)
Cash flows from financing activities 18 (5,977,641) (30,000)
Repayment of borrowings (30,000)
Payments from development fund 1,207,075
Changes in share capital 2,235,609 10,533
Increase in death benefit fund 22 6,817
Dividend paid (207,965)
Rebates paid (196,629) (75,587)
Net cash used in financing activities (77,622)
(1,384,613)
(4,039,466)
8,559,289
Net movement in cash equivalents 4,064,988 25,865,991
Cash and cash equivalents - beginning of year 34,425,280 34,425,280
Cash and cash equivalents - end of year 7 38,490,268

The accompanying notes on pages 9 to 46 form an integral part of these financial statements.

Preserving Confidence and Trust In A Challenging Financial Environment 50

Celebrating 44 years Page 9
ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED
Statement of Cash Flows
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

Nature of operations and summary of significant accounting policies
1. Legal status and governing legislation

The St. Vincent Union of Teachers Co-operative Credit Union Limited was registered on May 24, 1978. The
Credit Union name was subsequently changed to St. Vincent and the Grenadines Teachers Co-operative
Credit Union Limited. The activities of the credit union are governed by the provision of the Co-operative
Societies Act, 2012.
The registered office is situated at St. James Place, Kingstown, St. Vincent and the Grenadines.
The Credit Union’s financial reporting and regulatory matters are under the authority of the Financial
Services Authority (FSA).

2. Principal objectives
The principal objectives of the St. Vincent and the Grenadines Teachers Co-operative Credit Union
Limited are to promote thrift among its members, to receive the savings of its members and make loans
to its members exclusively for provident and productive purposes.

3. Summary of significant accounting policies
I. Statement of compliance
These financial statements have been prepared in accordance with the International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) as at
December 31, 2021 (the reporting date).
These financial statements were approved by the Board of Directors and authorised for issue on
August 22, 2022.
II. Basis of preparation
These financial statements have been prepared under the historical cost basis; except for the
following items, revaluation of investment properties, investment securities at fair value and
property and equipment, which are measured at fair value.
III. Significant accounting judgements estimates and assumptions
The preparation of financial statements in conformity with International Financial Reporting
Standards (IFRS) requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at
the reporting date and the reported amounts of revenues and expenses during the period. Actual
results could differ from those estimates. Areas involving a higher degree of judgment on
complexity, or areas where estimates and assumptions are significant to the financial statements are
disclosed in Note 5.

51 Preserving Confidence and Trust In A Challenging Financial Environment

ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED Celebrating 44 years
Statement of Cash Flows Page 10
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

Nature of operations and summary of significant accounting policies (cont’d)
4. New standards, interpretations and amendments that became effective during the year and not yet

effective:
I. Certain new, revised and amended standards and interpretations are effective for annual periods

beginning on or after January 1, 2021. Unless otherwise stated, the following standards, interpretations
and amendments to interpretations and standards became effective and were adopted in the current
year:
· COVID-19-Related Rent Concessions (Amendments to IFRS 16). Effective 1 June 2020, IFRS 16 was
amended to provide a practical expedient for lessees accounting for rent concessions that arise as a
direct consequence of the COVID-19 pandemic and satisfy the following criteria:

à The change in lease payments results in revised consideration for the lease that is substantially the
same as, or less than, the consideration for the lease immediately preceding the change;

à The reduction is lease payments affects only payments originally due on or before 30 June 2021; and
à There are no substantive changes to other terms and conditions of the lease.

Rent concessions that satisfy these criteria may be accounted for in accordance with the practical
expedient, which means the lessee does not assess whether the rent concession meets the definition
of a lease modification. Lessees apply other requirements in IFRS 16 in accounting for the concession.
The interpretation has no significant impact in the financial statements.
II. Certain new, revised and amended standards and interpretations are effective for annual periods
beginning after January 1, 2021 and earlier application is permitted; however, the Credit Union has not
early adopted the new standards, interpretations, and amendments in preparing these financial
statements. The Credit Union has assessed the relevance of all such new standards, interpretations, and
amendments with respect to the Credit Union’s operations and has determined that the following are
likely to have an effect on the financial statements:
Effective for annual periods beginning on or after January 1, 2022:

· IAS 16 Property, Plant and Equipment – Proceeds before intended use. This amendment prohibits deducting the

cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that
asset to the location and condition necessary for it to be capable of operating in the manner intended by
management. Instead, an entity recognizes the proceeds from selling such items, and the cost of producing those
items, in profit or loss. This amendment is effective for annual periods beginning on or after 1 January 2022.
Early application is permitted. An entity applies the amendments retrospectively on or after the beginning of the
earliest period presented in the financial statements in which the entity first apples the amendments.

· IAS 37 Provisions, Contingent Liabilities and Contingent Assets – Onerous Contracts – Cost of Fulfilling a

Contract. The amendment specifies that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate
directly to the contract’. Costs that relate directly to a contract can either be incremental costs of fulfilling that
contract or an allocation of other costs that relate directly to fulfilling contracts. This amendment is effective
for annual periods beginning on or after 1 January 2022. Early application is permitted.

Preserving Confidence and Trust In A Challenging Financial Environment 52

Celebrating 44 years Page 11
ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED
Statement of Cash Flows
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

Nature of operations and summary of significant accounting policies (cont’d)
4. New standards, interpretations and amendments that became effective during the year (cont’d):

Effective for annual periods beginning on or after January 1, 2022 (cont’d):
· IAS 37 Provisions, Contingent Liabilities and Contingent Assets – Onerous Contracts – Cost of Fulfilling a Contract.

The amendment specifies that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the
contract’. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract or an
allocation of other costs that relate directly to fulfilling contracts. This amendment is effective for annual periods
beginning on or after 1 January 2022. Early application is permitted.
· Annual Improvements to IFRSs 2018-2021 Cycle. The following amendments are effective for annual periods
beginning on or after 1 January 2022:
¨ IFRS 1 First-time Adoption of International Financial Reporting Standards – Subsidiary as a first-time

adopter. The amendment permits a subsidiary that applies paragraph D16(a) of IFRS 1 to measure cumulative
translation differences using the amounts reported by its parent, based on the parent’s date of transition to
IFRSs.
¨ IFRS 9 Financial Instruments – Fees in the ’10 per cent’ test for derecognition of financial liabilities. The
amendment clarifies which fees an entity includes when it applies the ’10 per cent’ test in paragraph B3.3.6
of IFRS 9 in assessing whether to derecognize a financial liability. An entity includes only fees paid or
received between the entity (the borrower) and the lender, including fees paid or received by either the
entity or the lender on the other’s behalf.
¨ IFRS 16 Leases – Lease incentives. The amendment to illustrative Example 13 accompanying IFRS 16 removes
from the example the illustration of the reimbursement of leasehold improvements by the lessor in order to
resolve any potential confusion regarding the treatment of lease incentives that might arise because of how
lease incentives are illustrated in that example.
¨ IAS 41 Agriculture – Taxation in fair value measurements. The amendment removes the requirement in
paragraph 22 of IAS 41 for entities to exclude taxation cash flow when measuring the fair value of a biologi-
cal asset using a present value technique. This will ensure consistency with the requirements in IFRS 13.
Effective for annual periods beginning on or after January 1, 2023:

· Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12). The
amendments clarify that the initial recognition exemption does not apply to transactions in which equal amounts
of deductible and taxable temporary differences arise on initial recognition.

· IFRS 17 Insurance Contracts. IFRS 17 requires insurance liabilities to be measured at a current fulfillment value
and provides a more uniform measurement and presentation approach for all insurance contracts. These
requirements are designed to achieve the goal of a consistent, principle-based accounting for insurance contracts.

53 Preserving Confidence and Trust In A Challenging Financial Environment

ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED Celebrating 44 years
Statement of Cash Flows Page 12
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

Nature of operations and summary of significant accounting policies (cont’d)
4. New standards, interpretations and amendments that became effective during the year (cont’d):

Effective for annual periods beginning on or after January 1, 2023 (cont’d):

· Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2). The amendments require

that an entity discloses its material accounting policies, instead of its significant accounting policies. Further
amendments explain how an entity can identify a material accounting policy. Examples of when an accounting
policy is likely to be material are added. To support the amendment, the Board has also developed guidance and
examples to explain and demonstrate the application of the ‘four-step materiality process’ described in IFRS
Practice Statement 2.
Under prevailing circumstances, the adoption of the foregoing new and amended IFRS is not expected to have any
material effect on the financial statements of the Credit Union.

5. Critical accounting estimates and judgments
The effect of a change in an accounting estimate is recognised prospectively by including it in profit or loss
in the period of the charge, if the change affects that period only; or in the period of the change and future
periods, if the change affects both.
The estimates and assumptions that have a significant risk of causing material adjustment to the carrying
amounts of assets and liabilities within the next financial year are discussed below.
(I) Fair value of financial instruments
The Credit Union determines the fair value of certain financial instruments using valuation techniques.
Those techniques are significantly affected by the assumptions used, including discount rates and
estimates of future cash flows. In that regards, the derived fair value estimates cannot always be
substantiated by comparison with independent markets and, in many cases, may not be capable of
being realised immediately.
Financial assets and financial liabilities measured at fair value in the statement of financial position are
grouped into three levels of a fair value hierarchy. The three levels are defined based on the
observability of significant inputs to the measurement, as follows: -
· Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
· Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset
or liability, either directly or indirectly
· Level 3: unobservable inputs for the asset or liability.
The Credit Union’s financial assets and financial liabilities as disclosed in the statement of financial position
approximate their fair value and are classified as Level 3.

Preserving Confidence and Trust In A Challenging Financial Environment 54

Celebrating 44 years Page 13
ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED
Statement of Cash Flows
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

Nature of operations and summary of significant accounting policies (cont’d)
5. Critical accounting estimates and judgments (cont’d)

(i) Fair value of financial instruments (cont’d)
The Credit Union’s financial instruments are carried at fair value. Fair value is the amount for which an
asset could be exchanged, or a liability settled between knowledgeable, willing parties in an arm’s
length transaction. Where an active market exists, market price is used as the best evidence of the fair
value of a financial instrument. Where no market price is available, the fair values presented have
been estimated using present value or other estimation and valuation techniques based on market
conditions existing at the reporting date. The values derived from applying these techniques are
significantly affected by the underlying assumptions used concerning both the amounts and timing of
future cash flows and the discount rates.
The following methods and assumptions have been used:
· The fair value of liquid assets and other assets maturing within one year is assumed to approximate
their carrying amount. This assumption is applied to liquid assets and the short-term elements of
all other financial assets and financial liabilities
· The fair value of variable-rate financial instruments is assumed to approximate their carrying
amounts.

(ii) Impairment of financial assets (Note 6(j)).
(iii) Impairment of non-financial assets (Note 6(r)).

6. Summary of significant accounting policies
a. Cash and cash equivalents
Cash equivalents include highly liquid investments with insignificant interest rate risk and original
maturities of ninety (90) days or less at the date of purchase. Investments with maturities between
ninety (90) days and one year at the date of purchase are considered to be short-term investment
securities. Short-term investment securities consist primarily of investment grade commercial paper,
bankers’ acceptances, and certificates of deposit.
b. Investment securities
The investment securities in the statement of financial position includes:
debt investment securities measured at amortised cost (see 6(j)) which are initially measured at fair
value plus incremental direct transaction costs, and subsequently at their amortised cost using effective
interest method;
equity investment securities mandatorily measured at FVTPL or designated as at FVTPL (see 6(j)) which
are at fair value with changes recognized immediately in profit or loss; and
equity investment securities designated as at FVOCI.
c. Loans to members
Loans to members are initially recognised at amortized cost using the effective rate method.
Subsequently loans are carried at amortized cost less allowance for impairment.

55 Preserving Confidence and Trust In A Challenging Financial Environment

ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED Celebrating 44 years
Statement of Cash Flows Page 14
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

Nature of operations and summary of significant accounting policies (cont’d)

6. Summary of significant accounting policies (cont’d)

d. Revenue recognition

i) Interest income and expense
Interest income and expense are recognised in the statement of profit or loss for all interest-bearing
instruments on accrual basis using the effective interest yield method based on the actual purchase
price or estimated recoverable amount. Interest income includes coupons earned on fixed income
investments and trading securities and accrued discount and premium on treasury bills and other
discounted instruments.

ii) Fees and commission income
Fees and commissions are generally recognised on an accrual basis when the service has been provid-
ed. Loan syndication fees are recognised as revenue when the syndication has been completed and
the Credit Union has retained no part of the loan package for itself or has retained a part at the same
effective interest rate as the other participants. Commission and fees arising from negotiating, or
participating in the negotiation of, a transaction for a third party – such as the arrangement of the
acquisition of shares or other securities or the purchase or sale of businesses – are recognised on
completion of the underlying transaction.

e. Property and equipment

Property and equipment are stated at initially at historical cost and subsequent at revalued amount less
accumulated depreciation. Historical cost includes expenditure that is directly attributable to the
acquisition of the items. Depreciation is calculated on the straight-line method at rates estimated to
write down the cost or valuation of such assets to their residual values over their estimated useful lives at
the following annual rates:

Building - 2%
Furniture and Equipment - 10% - 20%
Computer Systems - 20%

Land is not depreciated.
Property and equipment are periodically reviewed for impairment. When the carrying amount of an asset
is greater than its estimated recoverable amount, it is written down immediately to its recoverable
amount.
Gains and losses on the disposal of property and equipment are determined by comparing proceeds
with carrying amount and are taken into account in determining operating profit. Repairs and
renewals are charged to the statement of income during the financial period in which the expenditure
is incurred.
f. Investment properties
Investment property is property held either to earn rental income or for capital appreciation or for both,
but not for sale in the ordinary course of business, use in the supply of services or for administrative
purposes. Investment property is initially measured at cost and subsequently at fair value, with any
change therein recognised in profit or loss within other income.

Preserving Confidence and Trust In A Challenging Financial Environment 56

Celebrating 44 years Page 15
ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED
Statement of Cash Flows
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

Nature of operations and summary of significant accounting policies (cont’d)
6. Summary of significant accounting policies (cont’d)

f. Investment properties (cont’d)
Any gain or loss on disposal of an investment property (calculated as the difference between the net
proceeds from disposal and the carrying amount of the item) is recognised in profit or loss.
When the use of a property changes such that it is reclassified as property and equipment, its fair value at
the date of reclassification becomes its cost for subsequent accounting.

g. Other payables
Other payables are stated at their nominal values.

h. Borrowings
Borrowings are recognized initially at fair value, net of transaction cost incurred. Borrowings are
subsequently stated at amortized cost and any difference between the net proceeds and the redemption
value is recognised in the statement of comprehensive income over the period of the borrowings using the
effective interest method.

i. Inventories
Inventories are valued at the lower of cost and net realisable value. In general, cost is
determined on a first in, first out basis. In determining net realisable value, due allowance is made for
the cost of realization, slow moving and obsolete inventories.

j. Financial assets
The Credit Union classifies its financial assets into one of the categories below, depending on the purpose
for which the asset was acquired. Management determines the classification of its investments at initial
recognition.
i) Amortised cost
These assets incorporate financial assets where the objective is to hold these assets in order to
collect contractual cash flows and the contractual cash flows are solely payments of principal and
interest. They are initially recognised at fair value plus transaction costs that are directly
attributable to their acquisition or issue, and are subsequently carried at amortised cost using the
effective interest rate method, less provision for impairment.
Interest on interest-bearing loans is included in the statement of income and is reported as
"interest income". In the case of impairment, the impairment loss is reported as a deduction from
the carrying value of loan and receivables and recognised in the statement of income.
The Credit Union’s financial assets measured at amortised cost comprise loan to members,
investment securities at amortized cost, other assets and cash and cash equivalents.

57 Preserving Confidence and Trust In A Challenging Financial Environment

ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED Celebrating 44 years
Statement of Cash Flows Page 16
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

Nature of operations and summary of significant accounting policies (cont’d)
6. Summary of significant accounting policies (cont’d)

j. Financial assets (cont’d)
ii) Fair value through other comprehensive income (FVOCI)
The Credit Union has a number of strategic investments in listed and unlisted entities which are
not accounted for as subsidiaries, associates or jointly controlled entities. For those
investments, the Credit Union has made an irrevocable election to classify the investments at
fair value through other comprehensive income rather than through profit or loss as the Credit
Union considers this measurement to be the most representative of the business model for these
assets. They are carried at fair value with changes in fair value recognised in other
comprehensive income and accumulated in the equity section. The fair value of financial
instruments that are not quoted in active markets are determined using the last traded value of
the investments. Where no such value exists, cost is used as an appropriate estimate of fair
value. Upon disposal any balance within accumulated other comprehensive income reserve is
reclassified directly to retained earnings and is not reclassified to profit or loss.
Dividends are recognised in profit or loss, unless the dividend clearly represents a recovery of
part of the cost of the investment, in which case the full or partial amount of the dividend is
recorded against the associated investments carrying amount.
The Credit Union has debt securities whose objective is achieved by both holding these
securities in order to collect contractual cash flows and having the intention to sell the debt
securities before maturity. The contractual terms of the debt securities give rise to cash flows
that are solely payments of principal and interest on the principal amount outstanding. Upon
disposal any balance within fair value through other comprehensive income reserve is
reclassified directly to profit or loss.
Purchases and sales of financial assets measured at fair value through other comprehensive
income are recognised on settlement date with any change in fair value between trade date and
settlement date being recognised in the accumulated other comprehensive income reserve.
iii) Fair value through profit or loss (FVTPL)
The Credit Union’s fair value through profit or loss investments includes equity securities that
do not meet the criteria for fair value through other comprehensive income.
Financial assets designated at FVTPL are recorded in the statement of financial position at fair
value. Changes in fair value are recognised in the “administrative and commission income” line
in the statement of profit or loss.

Preserving Confidence and Trust In A Challenging Financial Environment 58

Celebrating 44 years Page 17
ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED
Statement of Cash Flows
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

Nature of operations and summary of significant accounting policies (cont’d)
6. Summary of significant accounting policies (cont’d)

j. Financial assets (cont’d)
(iv) Impairment
Impairment of financial assets
In relation to the impairment of financial assets, IFRS 9 requires an expected credit loss (ECL)
model as opposed to an incurred credit loss model under IAS 39. The expected credit loss model
requires the Credit Union to account for expected credit losses and changes in those expected
credit losses at each reporting date to reflect changes in credit risk since initial recognition of
the financial assets. Therefore, it is no longer necessary for a credit event to have occurred
before credit losses are recognised.
ECLs are based on the difference between the contractual cash flows due in accordance with the
contract and all the cash flows that the Credit Union expects to receive, discounted at an
approximation of the original effective interest rate. The expected cash flows will include cash
flows from the sale of collateral held or other credit enhancements that are integral to the
contractual terms.
ECLs are recognised in three stages. For credit exposures for which there has not been a
significant increase in credit risk since initial recognition, ECLs are provided for credit losses
that result from default events that are possible within the next 12-months (a 12-month ECL).
For those credit exposures which are credit impaired or for which there has been a significant
increase in credit risk since initial recognition, a loss allowance is required for credit losses
expected over the remaining life of the exposure, irrespective of the timing of the default (a
lifetime ECL).
The Credit Union considers a financial asset in default when contractual payments are 90 days
past due. However, in certain cases, the Credit Union may also consider a financial asset to be in
default when internal or external information indicates that the Credit Union is unlikely to
receive the outstanding contractual amounts in full before taking into account any credit
enhancements held by the Credit Union.
Based on the above process, the Credit Union classifies its ECLs into Stage 1, Stage 2 and Stage
3.
Stage 1
When financial assets are first recognised, the Credit Union recognises an allowance based on 12
months ECLs. Stage 1 financial assets also include facilities where the credit risk has improved
and the financial assets have been reclassified from Stage 2.
Stage 2
When financial assets have shown a significant increase in credit risk since origination, the
Credit Union records an allowance for the Lifetime ECLs. Stage 2 also include facilities, where
the credit risk has improved, and financial assets have been reclassified from Stage 3.
Stage 3
Financial assets considered credit-impaired. Here the Credit Union records an allowance for the
Lifetime ECLs.

59 Preserving Confidence and Trust In A Challenging Financial Environment

ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED Celebrating 44 years
Statement of Cash Flows Page 18
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

Nature of operations and summary of significant accounting policies (cont’d)
6. Summary of significant accounting policies (cont’d)

j. Financial assets (cont’d)
(iv) Impairment (cont’d)
The mechanics of the ECL calculations are outlined below and the key elements are, as follows:
PD The Probability of Default is an estimate of the likelihood of default over a given period
of time. A default may only happen at a certain time over the asserted period, if the
facility has not been previously derecognised and is still in the portfolio.

EAD The Exposure at Default is an estimate of the exposure at a future default date, taking
into account expected changes in the exposure after the reporting date including

repayments of principal and interest, whether scheduled by contract or otherwise.

LGD The Loss Given Default is an estimate of the loss arising in the case where a default
occurs at a given time. It is based on the difference between the contractual cash flows
due and the cash flows expected to be received. It is usually expressed as a percentage
of the EAD.

The maximum period for which the credit losses are determined is the contractual life of a
financial instrument.

Calculation of ECLs

Stage 1
The ECL is calculated as the portion of lifetime ECLs that represent the ECLs that result from
default events on a financial instrument that are possible within the 12 months after the
reporting date. The Credit Union calculates the 12 month ECL allowance based on the
expectation of a default occurring in the 12 months following the reporting date. These
expected 12 month default probabilities are applied to a forecast EAD and multiplied by the
expected LGD.

Stage 2
When financial assets have shown a significant increase in credit risk since origination, the
Credit Union records an allowance for the lifetime ECLs. The mechanics are similar to those
explained above, but PDs and LGDs are estimated over the lifetime of the loan.

Stage 3
For financial assets considered credit-impaired, the Credit Union recognises the lifetime
expected credit losses for these financial assets. The method is similar to that for Stage 2
assets.

Preserving Confidence and Trust In A Challenging Financial Environment 60

Celebrating 44 years Page 19
ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED
Statement of Cash Flows
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

Nature of operations and summary of significant accounting policies (cont’d)
6. Summary of significant accounting policies (cont’d)

j. Financial assets (cont’d)
(iv) Impairment (cont’d)
Loans and advances
All non-performing and performing loans and advances are individually reviewed and specific
provisions made for impaired portion based on the realisable value of the loan collateral and
discounted by the original effective rate of the loan. The provision made is the difference
between the loan balance and the discounted value of the collateral with consideration of
supportable forward-looking information. Previously accrued income is reversed and further
interest income not accrued. Loans and advances with similar characteristics are assessed for
impairment on a group basis. Where possible the Credit Union seeks to restructure loans instead
of taking possession of collateral. This may involve extending the payment arrangements and the
agreement of new loan conditions. Once the terms are renegotiated, any impairment is measured
using the original effective interest rate and the loan is no longer considered past due.
Management continually reviews renegotiated loans to ensure that all criteria are met and the
future payments likely to occur. Interest continues to be accrued and is recorded as part of
interest income. The loans continue to be subject to an individual or collective impairment as-
sessment.
When all efforts have been exhausted to recover a non-performing loan, that loan is deemed
uncollectible and written off against the related provision for loan losses.
Investment securities

The Credit Union assesses at each balance sheet date whether there is objective evidence that a
financial asset is impaired at both an individual asset and a collective level. All individually
significant assets are individually assessed for impairment. Assets that are not individually
significant are collectively assessed for impairment. Collective assessment is carried out by
grouping together assets with similar risk characteristics.
In assessing collective impairment, the Credit Union uses historical information and makes an
adjustment if current economic and credit conditions are such that the actual losses are likely to
be greater or lesser than suggested by historical trends.
If any evidence of impairment exists, the cumulative loss that was recognised in the fair value
reserve, for instruments at FVOCI, is reclassified to profit or loss. If the fair value of an impaired
debt security subsequently increases and the increase can be related objectively to an event
occurring after the impairment loss was recognised, then the impairment loss is reversed through
profit or loss; otherwise, it is reversed through other comprehensive income.
(v) Impairment of other financial assets
Cash and cash equivalents
The Credit Union’s cash at bank are deposits placed with reputable institutions and countries
where there has been no significant default. The Credit Union therefore considers the risk of
default to be low. The ECLs on these instruments were therefore determined to be zero.

61 Preserving Confidence and Trust In A Challenging Financial Environment

ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED Celebrating 44 years
Statement of Cash Flows Page 20
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

Nature of operations and summary of significant accounting policies (cont’d)
6. Summary of significant accounting policies (cont’d)

j. Financial assets (cont’d)
(v) Impairment of other financial assets (cont’d)
Receivables and prepayments
The Credit Union’s receivables and prepayments are mostly short-term with minimal
exposure to risk. The ECLs on these instruments were assessed on an individual basis.
(vi) Write offs
The gross carrying amount of a financial asset is written off to the extent that there is no
realistic prospect of recovery. This is generally when the Credit Union determines that the
borrower does not have assets or resources of income that would generate sufficient cash
flows to repay the amount subject to the write-off. However, the financial assets could still
be subject to enforcement activities in order to comply with the Credit Union’s procedures.
(vii) Derecognition of financial assets
The Credit Union derecognises a financial asset when the contractual rights to the cash
flows from the financial asset expire, or when it transfers the rights to receive the
contractual cash flows in a transaction in which substantially all of the risks and rewards of
ownership of the financial asset are transferred, or if it neither transfers nor retains
substantially all of the risks and rewards of ownership and it does not retain control over
the transferred financial asset. On derecognition of a financial asset, the difference
between the carrying amount of the asset (or the carrying amount allocated to the portion
of the asset derecognised) and the sum of (i) the consideration received (including any new
asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had
been recognised in OCI is recognised in profit or loss. Any cumulative gains or losses
recognised in OCI in respect of equity investment securities designated as at FVOCI is not
recognised in profit or loss on derecognition of such securities. Any interest in transferred
financial assets that qualify for derecognition that is created or retained by the Credit Union
is recognised as a separate asset or liability.

k. Dividends income
Dividend income is recognised when the right to receive income is established. Dividends are presented
in net trading income, net income from other financial instruments at fair value through profit or loss
or other revenue based on the underlying classification of the equity investment.

l. Dividend distributions
Dividend distributions to the Credit Union’s members are recognised as a liability in the Credit Union’s
financial statements in the period in which the dividends are approved by the members.

Preserving Confidence and Trust In A Challenging Financial Environment 62

Celebrating 44 years Page 21
ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED
Statement of Cash Flows
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

Nature of operations and summary of significant accounting policies (cont’d)
6. Summary of significant accounting policies (cont’d)

m. Financial liabilities – classification, recognition, derecognition and measurement
The Credit Union classifies its financial liabilities into the other financial liabilities category.
This classification pertains to financial liabilities that are not held for trading or not designated as at
FVTPL upon the inception of the liability. Other financial liabilities comprise accounts payable and
accrued liabilities, interest payable, savings and other deposits, fixed deposits and borrowings.
The financial liabilities are recognized initially at fair value and are subsequently carried at amortized
cost, taking into account the impact of applying the effective interest method of amortization (or
accretion) for any related premium, discount and any directly attributable transaction costs.
Accounts payable are obligations on the basis of normal credit terms and do not bear interest. Accrued
expenses are liabilities to pay for goods or services that have been received or supplied but have not
been paid, invoiced, or formally agreed with the supplier, including amounts due to employees. It is
necessary to estimate the amount and timing of accruals; however, the uncertainty is generally much
less than for provisions.
Accounts payable and accrued expenses are recognized initially at the transaction price and
subsequently measured at amortized cost using the effective interest method.
Interest-bearing deposits and loans are initially recognized at transaction price, including transaction
costs, directly attributable to the issue of the instrument. Such interest-bearing liabilities are
subsequently measured at amortized cost using the effective interest method, which ensures that any
interest expense over the period of repayment is at a constant rate on the balance of the liability
carried in the statement of financial position.
The Credit Union classifies its interest-bearing deposits and loans as current liabilities if settlement is
expected in one year or less, and the Credit Union does not have unconditional right to defer
settlement of the liabilities and does not breach any loan provisions on or before the end of the
financial reporting period. If not, they are presented as noncurrent liabilities.
A financial liability is derecognized when the obligation under the liability is discharged, cancelled or

expires.
n. Share capital and reserve

Share capital is determined using the nominal value of permanent shares that have been issued.
Revaluation reserve is the gain/loss carried on the revaluation of property (other than investment
property).

Distribution surplus – all other net gains and losses and transactions with owners not recognised
elsewhere.

63 Preserving Confidence and Trust In A Challenging Financial Environment

ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED Celebrating 44 years
Statement of Cash Flows Page 22
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

Nature of operations and summary of significant accounting policies (cont’d)
6. Summary of significant accounting policies (cont’d)

o. Foreign currencies
These financial statements are expressed in Eastern Caribbean dollars, the Credit Union’s functional
currency.
Assets and liabilities denominated in foreign currencies are translated into Eastern Caribbean Currency
at the rates of exchange prevailing at the reporting date. Transactions arising during the year
involving foreign currencies are converted at the rates of exchange prevailing on the dates the
transactions occur. Exchange gains or losses arising on settlement or conversion of foreign currency
denominated balances are recognized in the comprehensive income.

p. Financial instruments
The Credit Union recognises a financial asset or financial liability on its statement of financial position
using the settlement date method. Accordingly, a financial asset or a financial liability is
recognised on the date of receipt or delivery to or by the Credit Union. Any gains or losses arising
from price, interest rate, or currency changes between the trade dates, the date the Credit Union
commits to the purchase or sale of an asset and the statement of financial position date are recovered
in current operations.
The Credit Union’s financial instruments are carried at fair value. Fair value is the amount for which
an asset could be exchanged, or a liability settled between knowledgeable, willing parties in an arm’s
length transaction. Where an active market exists, market price is used as the best evidence of the fair
value of a financial instrument. Where no market price is available, the fair values presented have been
estimated using present value or other estimation and valuation techniques based on market conditions
existing at the reporting date. The values derived from applying these techniques are significantly
affected by the underlying assumptions used concerning both the amounts and timing of future cash
flows and the discount rates. The following methods and assumptions have been used: -

· The fair value of liquid assets and other assets maturing within one year is assumed to
approximate their carrying amount. This assumption is applied to liquid assets and the
short-term elements of all other financial assets and financial liabilities;

· The fair value of variable-rate financial instruments is assumed to approximate their
carrying amounts.

Financial assets and financial liabilities measured at fair value in the Statement of Financial Position are
grouped into three levels of a fair value hierarchy. The three levels are defined based on the
observability of significant inputs to the measurement, as follows: -

· Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
· Level 2: inputs other than quoted prices included within Level 1 that are observable for

the asset or liability, either directly or indirectly
· Level 3: unobservable inputs for the asset or liability.

The Credit Union’s financial assets and financial liabilities as disclosed in the statement of financial
position approximate their fair value and are classified as Level 3.

Preserving Confidence and Trust In A Challenging Financial Environment 64

Celebrating 44 years Page 23
ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED
Statement of Cash Flows
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

Nature of operations and summary of significant accounting policies (cont’d)
6. Summary of significant accounting policies (cont’d)

q. Pension expense
Pension contributions attributable to services rendered, during the period, by employees are expensed in
the same period. Pension contributions attributable to past services rendered by employees are
systematically expensed on a straight-line basis over the average period until the benefits become vested.

r. Impairment of non-financial assets
Non-financial assets are subject to impairment test whenever events or changes in circumstances
indicate that their carrying amount may not be recoverable. Where the carrying value of an asset
exceeds its recoverable amount, which is the higher of value in use and fair value less costs to sell, the
asset is written down accordingly.
Where it is not possible to estimate the recoverable amount of an individual asset, the impairment
test is carried out on the assets cash-generating unit, which is the lowest group of assets in which the
asset belongs for which there are separately identifiable cash flows.
Impairment charges are included in the statement of comprehensive income, except to the extent
they reverse gains previously recognised in other comprehensive income.

s. Provisions
A provision is recognized if, as a result of a past event, the Credit Union has a present legal or
constructive obligation that can be estimated reliably, and it is probable that an outflow of economic
benefits will be required to settle the obligation. Provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects current market assessments of the time value of money
and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.

7. Cash and cash equivalents 2021 2020
$ $
Cash on hand
Current accounts 475,209 398,324
Deposits and special savings 36,635,040 32,321,924

1,380,019 1,705,032
38,490,268 34,425,280

The Credit Union’s cash resources are denominated in Eastern Caribbean currency.

65 Preserving Confidence and Trust In A Challenging Financial Environment

ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED Celebrating 44 years
Statement of Cash Flows Page 24
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency) 2020
$
8. Investment securities 2021
The Credit Union holds the following financial investments: $ 500,000
623,000
(i) Debt securities at amortised cost 500,000 939,000
(a) Treasury bills 623,000 483,436
Government of Antigua - 545-day treasury bills 539,000 435,021
Government of Antigua - 365-day treasury bills 487,492
Government of Antigua - 180-day treasury bills 445,631 -
Government of St. Lucia - 365-day treasury bills 497,306 2,980,457
Government of St. Vincent and the Grenadines - 365-day treasury 3,092,429
bills 28,134
Government of St. Vincent and the Grenadines – 91-day treasury 28,134 250,002
bills 125,002 1,000,000
875,000 1,278,136
(b) Bonds 1,028,136
Government of St. Kitts and Nevis - 20-year bond 501
Government of St. Vincent and the Grenadines - 7-year bond 511 486,626
Government of St. Vincent and the Grenadines – 3-year bond 491,456
20,444
(c) Term deposits and corporate paper 20,444 261,844
St. Vincent Co-operative League - CFF deposit 261,843 100,000
St. Vincent Co-operative League - Term deposits 100,000 412,033
Bank of St. Vincent and the Grenadines 412,033 500,000
General Employees Co-operative Credit Union 1,500,000 606,750
Kingstown Co-operative Credit Union 606,750 468,805
St. Vincent Building and Loan Association 468,805 370,956
Eastern Caribbean Home Mortgage Bank – 1 year corporate paper 370,956
St. Vincent Small and Micro-Finance Co-operative Limited (COMFI) 999,970 -
Colonial Life Insurance Company Limited (CLICO) 5,232,768 3,227,959
British American Insurance Company (BAICO)
CAPITA Finance

Total debt securities at amortised cost 9,353,333 7,486,552
Interest receivable 22,690 66,440
Expected credit loss
(1,584,074) (1,525,589)
7,791,949 6,027,403

The effective yield on debt securities at reporting date was 2.7% (2020: 2.7%).

As of reporting date, the maturity distribution of debt securities was as follows: 2021 2020
$ $
One year
From 1 to 5 years 6,778,686 4,161,905
Over 5 years
1,100,002 1,850,002
1,474,645 1,474,645
9,353,333 7,486,552

British American Insurance Company Limited (BAICO) and Colonial Life Insurance Limited (CLICO) have
defaulted on their annuity policies and are under judicial management. The Credit Union’s investments
in BAICO and CLICO are considered to be fully impaired.

Preserving Confidence and Trust In A Challenging Financial Environment 66

Celebrating 44 years Page 25
ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED
Statement of Cash Flows
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

8. Investment securities (cont’d) 2021 2020
The movement in expected credit loss is as follows: $ $

Balance, beginning of year 1,525,589 1,520,454
Increase in allowance 58,485 5,135
Balance, end of year
1,584,074 1,525,589

(ii) Equity securities at fair value 2021 2020
(a) Designated as fair value through profit or loss $ $
26,339 (2020: 4,500 shares) in Bank of St. Vincent and the Grena-
dines 217,490 30,375
10,000 shares in First Caribbean International Bank (Barbados) 20,000 20,000
Limited 50,375
237,490

(b) Designated as fair value through other comprehensive 557,478 557,478
income (OCI)
111,496 shares in St. Vincent and the Grenadines Co-operative 554,880 554,880
League 25,000 25,000
3,468 shares in East Caribbean Home Mortgage Bank
2,500 shares in East Caribbean Stock Exchange Ltd. 702,132 702,132
St. Vincent and the Grenadines Small and Micro-Finance Co- 1,839,490 1,839,490
operative Limited (COMFI) (702,132) (702,132)
Total equity securities at fair value through OCI 1,137,358 1,137,358
Allowance for impairment

Total investments at fair value 1,374,848 1,187,733

Fair value gain/loss of ­­­­nil (2020: $18,610) has been recognised in securities at fair value through
other comprehensive income (see Note 27).

9. Loans to members 2021 2020
$ $
Mortgage loans
Personal loans 60,037,589 59,235,398
Student loans 24,373,198 26,540,301
Commercial loans
Bundled loans 2,445,504 2,833,305
1,913,989 2,192,337
Interest receivable 1,739,246
-
Allowance for loan losses 90,509,526
325,679 90,801,341
325,679
90,835,205
(3,950,249) 91,127,020
86,884,956 (3,705,301)

87,421,719

67 Preserving Confidence and Trust In A Challenging Financial Environment

ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED Celebrating 44 years
Statement of Cash Flows Page 26
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

9. Loans to members (cont’d)

As of reporting date, the Credit Union has assigned mortgages having a nominal value of nil (2020: $8,266,310)
to the Bank of St. Vincent and the Grenadines and Eastern Caribbean Home Mortgage Bank Limited (“the
purchasers”). The agreement provides that the Credit Union indemnify the purchasers from any default arising
from the assignments.

The effective interest yield during the year on loans to members is ranging from 6% to 15% annually, both in
2020 and 2021, depending on the type of loan.

Loan loss analysis

Loans to members are summarised as follows: 2021 2020
$ $
Neither past due nor impaired
Past due but not impaired 82,993,052 84,649,786
Impaired 224,910 29,039
Gross
Interest receivable 7,291,564 6,122,516
Less: allowance for impairment 90,509,526
90,801,341
Allowance for loan loss 325,679 325,679

Balance, beginning of year (3,950,249) (3,705,301)
Increase in allowance for loan loss
Bad debts written off 86,884,956 87,421,719
Balance, end of year
2021 2020
$ $

3,705,300 3,519,270
387,845 259,161
(73,131)
(142,896)
3,705,300
3,950,249

10. Inventories 2021 2020
$ $
Lands held for sale
Supplies outlet merchandise 4,572,227 4,954,602
708,490 718,374

5,280,717 5,672,976

Inventories amounting to 1,301,837 (2020: $1,414,354) were charged to profit and loss for the year (see Note 31).

11. Other assets 2021 2020
$ $
Accounts receivable
Rent receivable 269,318 490,680
Less: allowance for doubtful debts 224,318 181,378
Prepayments 493,636 672,058
(144,626) (59,203)

349,010 612,855
104,936 60,160
453,946
673,015

Preserving Confidence and Trust In A Challenging Financial Environment 68

Celebrating 44 years Page 27
ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED
Statement of Cash Flows
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

11. Other assets (cont’d)
The movement in allowance for doubtful debts is as follows:

Balance, beginning of year 2021 2020
Increase/(Decrease) in allowance $ $
Balance, end of year
59,203 62,390
85,423 (3,187)

144,626 59,203

12. Investment properties Kingstown Kingstown Bequia Total
property property property
Year ended December 31, 2020 (Uptown) $
Carrying value, beginning of year (Downtown) $ 9,001,000
Additions $ 120,000
Carrying value, end of year 3,351,000 $ 149,013
5,530,000 - 9,150,013
149,013 120,000
-
3,500,013
5,530,000

Year ended December 31, 2021 3,500,013 5,530,000 120,000 9,150,013

Carrying value, beginning of year 73,587 - - 73,587
539,400 175,000 - 714,400
Additions 4,113,000 5,705,000 120,000 9,938,000
Revaluation
Carrying value, end of year

As of reporting date, investment properties comprise: 2021 2020
$ $
Properties held for lease
Properties held for development 9,818,000 9,030,013
120,000 120,000

9,938,000 9,150,013

Amounts recognised in profit and loss for investment comprise: 2021 2020
$ $
Rental income
Direct operating expenses on properties that generated income 605,802 383,464
Appreciation in value of investment properties 10,919 10,467

714,400 -

The Credit Union’s investment properties were revalued on August 29, 2021, by an independent firm, Browne’s
Valuation & Quantity Surveying Services Ltd. The directors have agreed to carry the properties at revalued amount as
per the valuation report. The fair value was determined using level 3 fair value measurements.
The surplus arising on revaluation in recognised in profit or loss.

69 Preserving Confidence and Trust In A Challenging Financial Environment

ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED Celebrating 44 years
Statement of Cash Flows Page 28
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

12. Investment properties (cont’d)
Valuation techniques and significant unobservable inputs:
The valuation techniques and significant unobservable inputs used in measuring the fair value of investment properties
as the significant unobservable inputs used.

Valuation technique Significant unobservable in- Inter-relationships between
Investment: puts key unobservable inputs and
The valuation model examines the · Expected market rental fair value measurement
price an investor would be pre- The estimated fair value would
pared to pay for the right to re- growth increase/(decrease) if:
ceive a certain income stream. · Yields
· Rental rates · Expected market rental
growth were higher /
(lower); the occupancy
rates were higher/ (lower).

Preserving Confidence and Trust In A Challenging Financial Environment 70

ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED Page 29
Statement of Cash Flows
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)
Celebrating 44 years
13. Property and equipment Land Buildings Furniture and Computer Construction Total
71 Preserving Confidence and Trust In A Challenging Financial Environment$$Equipment systems in progress $
Cost or valuation $ $ $
Balance at January 1, 2020
Additions 2,364,930 4,419,357 1,425,228 464,918 10,620 8,685,053
Balance at December 31, 2020 - - 31,777 33,505 - 65,282

2,364,930 4,419,357 1,457,005 498,423 10,620 8,750,335

Balance at January 1, 2021 2,364,930 4,419,357 1,457,005 498,423 10,620 8,750,335
Additions - - 38,380 36,314 - 74,694
Balance at December 31, 2021
2,364,930 4,419,357 1,495,385 534,737 10,620 8,825,029

Accumulated depreciation - 167,249 979,703 307,189 - 1,454,141
Balance at January 1, 2020 - 253,008
Charge for year - 88,392 109,158 55,458 - 1,707,149
Balance at December 31, 2020
- 255,641 1,088,861 362,647

Balance at January 1, 2021 - 255,641 1,088,861 362,647 - 1,707,149
Charge for year - 286,959
Balance at December 31, 2021 - 108,002 124,592 54,365
- 1,994,108
- 363,643 1,213,453 417,012

Net book values 2,364,930 4,252,108 445,525 157,729 10,620 7,230,912
Beginning of year - January 1, 2020 2,364,930 4,163,716 368,144 135,776 10,620 7,043,186
End of year - December 31, 2020 2,364,930 4,055,714 281,932 117,725 10,620 6,830,921
End of year - December 31, 2021

ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED Celebrating 44 years
Statement of Cash Flows Page 30
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

14. Accounts payable and accrued liabilities 2021 2020
$ $
Accounts payable
Payable to deceased members 342,832 433,720
Security deposits – land at Cedars 600,084
Accrued liabilities 574,464
Rental deposits 143,654
28,176
472,365
520,597
99,190 90,316
1,740,139
1,565,259

15. NStoatfef p1e3n: sion planNote 13: Supplemental Benefit Plan 2021 2020
The Credit Union provides retirement benefits under a defined $ $

ASacotonfcandciftutfrismtipbseueumlentamsiptoieolpnodnlyopse-ytleetaaesenf.rfs,mUpawenrdehndeisecpriroheonqstiuihtsiereapddrmotvionisicsiootennrteroidfbubtthyeet6hp%elaaCnnredthd3eit% Union for all 266,652 225,291
credit union 566,213 466,638
respectively
832,865 691,929
of the basic monthly salary of employees. During the year under
review the Credit Union's allocation to the plane amounted to
$T3h6e,0C0r0edi(t20U2n0i:on $p3r6o,v0i0d0e)s. reTthireemaemnotubnetsnefwitesreundeexrpeansdeedfineind ctohnetribution plan, which is
apdpmrionpisrtiaetre dybeyartsh.e Credit Union for all its employees. Under the provision of the Plan, the
SCurepdpilteUmneionntaalnBdeintesfeitmPpllaonyees are required to contribute 6% and 3%, respectively, of the basic
TmhoenthClryedsaitlarUynoiof nempprloovyiedes. retirement benefits under a defined
contribution plan, which is administered by the Credit Union for all
of its employees. Under the provision of the plan the credit union
16. Saanvdinitgss eamndplotyheers daereporseiqtsuired to contribute 6% and 3% respectively
of the basic monthly salary of employees. During the year under 2021 2020

review the Credit Union's allocation to the plane amounted to $ $

$O3rd6,in00a0ry s(a2v0i2n0g:ac$c3o6u,n0t0s0). The amounts were expensed in the 40,889,219 35,227,113
aCphprirsotpmraiastseavyienagrssa.ccounts
186,834 174,409

Junior savers accounts 1,214,638 1,009,623

Staff gratuity 672,248 556,836

Members share deposits 51,801,655 51,316,198

Retirement savings plan 10,812,133 10,319,744

Adolescence savings plan 1,056,748 814,764

106,633,475 99,418,687

The effective interest rates on ordinary savings are as follows: 2021 2020
% %
Ordinary saving accounts
Christmas savings accounts 2.50 2.50
Junior savers accounts 2.50 2.50
Staff gratuity 4.50 4.50
Members share deposits 2.50 2.50
Retirement savings plan 1.50 1.50
Adolescence savings plan 4.00 4.00
5.00 5.00

Preserving Confidence and Trust In A Challenging Financial Environment 72

Celebrating 44 years Page 31
ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED
Statement of Cash Flows
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

17. Fixed deposits 2021 2020
$ $
Fixed deposits
Interest payable on fixed deposits 22,521,068 22,114,317
447,219 445,119

22,968,287 22,559,436

The effective interest rate on fixed deposits is ranging from 2.5% to 4%, both in 2020 and 2021.
Fixed deposits are denominated in Eastern Caribbean Currency.

18. Borrowings 2021 2020
$ $
Bank of St. Vincent and the Grenadines -
Eastern Caribbean Home Mortgage Bank - 2,928,021
- 3,049,620
5,977,641

As disclosed in Note 9, the obligations in relation to these borrowings are secured by the assignment of basket
of mortgages. The obligation is repayable on the basis of the repayment terms of the respective mortgages less
an administrative fee. The borrowings were repaid in full during the year.

19. Share capital 2021 2021 2020 2020
Qualifying shares $ $
No. of No. of
shares shares

Authorised number of shares of $5 par value Unlimited Unlimited

Issued and fully paid 753,803 3,769,015 720,274 3,601,370
Balance, beginning of year 34,244 171,222 33,529 167,645

Issued during the year, net 788,047 3,940,237 753,803 3,769,015
Balance, end of year
Equity shares Unlimited Unlimited

Authorised number of shares of $5 par value

Issued and fully paid 1,396,682 6,983,410 1,188,796 5,943,980
Balance, beginning of year 419,520 2,097,601 207,886 1,039,430
Issued during the year, net 9,081,011 1,396,682 6,983,410
Balance, end of year 1,816,202
13,021,248 2,150,485 10,752,425
Total share capital 2,604,249

73 Preserving Confidence and Trust In A Challenging Financial Environment

ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED Celebrating 44 years
Statement of Cash Flows Page 32
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

19. Share capital (cont’d)

This consists of permanent shares which represents a member’s ownership of, or equity in the
Credit Union. This amount cannot be withdrawn while the person remains a member. Each
member is entitled to one vote and any dividend duly declared.

20. Statutory reserve 2021 2020
$ $
Balance, beginning of year
Transfer from retained earnings 4,360,847 4,012,560
Balance, end of year 189,405 348,287

4,550,252 4,360,847

Pursuant to the provisions of Article XIX (1) of the By-Laws and Part VII section 124 of the Co-
operatives Societies Act 2012, the Credit Union shall credit all entrance fees and fines collected
from members to the statutory reserve. If at the end of each financial year the amounts
standing to statutory reserve and other institutional capital, before any declaration of
dividend, is less than ten percent of total assets, the Credit Union shall transfer to statutory
reserves to ten percent of total assets.

21. Statutory development fund 2021 2020
$ $
Balance, beginning of year
Transfer from retained earnings 102,258 112,258
Payment from funds
Balance, end of year - 20,000
(30,000- )
(30,000)
72,258
102,258

In accordance with Article 125 of the Co-operative Societies Act 2012, the Credit Union shall
maintain, from annual appropriations not exceeding ten percent of net profits, a development
fund, which shall be administered by the St. Vincent and the Grenadines Co-operative League
Ltd. for the development of registered societies.

22. Death benefit fund 2021 2020
$ $
Balance, beginning of year
Transfer from excess of contribution over benefits paid 442,923 432,390
Balance, end of year
6,817 10,533

449,740 442,923

Each member is required to make an annual contribution thereto of $25.

Preserving Confidence and Trust In A Challenging Financial Environment 74

Celebrating 44 years

ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED Page 33
Statement of Cash Flows
For the year ended December 31, 2021 2020
(Expressed in Eastern Caribbean Currency) $

22. Death benefit fund (cont’d) 245,608
(192,941)
Gain on death benefit 2021
$ 52,667
Contributions received (10,533)
Benefits paid 256,993 42,134
(222,906)
Transfer to death benefit fund
34,087
(6,817)

27,270

23. Other reserves Special Education Enterprise Disaster Total
reserve reserve fund fund
Balance at December 31, 2019 $ $ $ $
Transfer from retained earnings $
Balance at December 31, 2020 285,952 10,072 909 245,081 542,014
Transfer from retained earnings 20,000 - 20,000 40,000
Balance at December 31, 2021 - 30,072
285,952 909 265,081 582,014
- - - -
- 30,072
285,952 909 265,081 582,014

Other reserves are used to assist needy members with severe illness, education, natural
disasters, and other emergencies.

24. Accumulated other comprehensive income Revaluation Unrealized Total
surplus on gain on
Balance at January 1, 2020 properties securities at $
Appreciation in value of investment securities 2,693,797
Balance at December 31, 2020 FVOCI
Appreciation in value of investment securities $$ -
Balance at December 31, 2021 2,693,797
2,680,315 13,482
-
-- 2,693,797

2,680,315 13,482

--

2,680,315 13,482

75 Preserving Confidence and Trust In A Challenging Financial Environment

ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED Celebrating 44 years
Statement of Cash Flows Page 34
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

25. Interest income 2021 2020
$ $
Mortgage loans
Personal loans 4,829,672 4,612,096
Student loans 2,029,632 2,069,180
Commercial loans
Income from loans to members 151,678 168,894
Income from investment securities 235,128 204,354
Balance, end of year
7,246,110 7,054,524
262,068 197,088

7,508,178 7,251,612

26. Interest expense 2021 2020
$ $
Ordinary saving accounts
Christmas savings accounts 810,326 704,766
Junior savers accounts 4,389 4,196
Members share deposits
Retirement savings plan 41,907 20,478
Adolescence savings plan 723,063 702,593
Interest on members deposits 406,258 377,083
Interest on fixed deposits
43,070 30,058
27. Administrative and commission income
2,029,013 1,839,174
Administrative fee income 640,980 650,799
Commission income
Fair value loss on investment securities (Note 8(ii)) 2,669,993 2,489,973

2021 2020
$ $

177,547 192,047
176,767 182,700
(18,610)
- 356,137
354,314

28. Selling expenses 2021 2020
$ $
Advertising and promotions
Bad debts expense (recovered) 140,051 217,888
Sponsorship and donations 85,423 (3,338)
Bursary 8,181 19,663
Scholarship 18,590 42,700
27,715 29,910

279,960 306,823

Preserving Confidence and Trust In A Challenging Financial Environment 76

Celebrating 44 years Page 35
ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED
Statement of Cash Flows
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

29. General and administrative expenses

The following summaries administrative expenses on a functional basis:

ATM expense 2021 2020
Audit fee $ $
Bank charges
Consultancy expense 65,954 27,428
Depreciation 30,500 30,500
Education and training 56,020 45,288
Electricity 92,181 49,822
Grenadines expense 273,760 238,528
Insurance – CUNA
Insurance – general 3,679 951
League dues 129,301 141,610
License and property tax
Meeting expense 74,135 66,838
Office expense 352,000 384,000
Other operating expense
Postage 93,998 84,996
Printing and stationery 49,500 54,000
Repairs and maintenance 10,919
Security 185,248 9,351
Telephone, cable, and fax 30,591 201,990
Water and sewerage
9,582 23,072
508 53,525

65,306 1,236
96,130 74,505
203,334 110,102
132,427 193,000
12,521 146,630
12,534
1,967,594
1,949,906

77 Preserving Confidence and Trust In A Challenging Financial Environment

ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED Celebrating 44 years
Statement of Cash Flows Page 36
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

30. Staff costs 2021 2020
$ $
Salaries, wages, and bonus
Education and training 1,599,918 1,421,623
Gratuity 9,731 24,514
Medical insurance 80,305
National Insurance Services 82,979 38,697
Pension 46,401 70,170
Travel and subsistence 70,978 93,162
Uniforms 99,575
122,242 111,041
Supplies outlet (Note 31) 41,392
Salaries, wages, and bonuses -
Medical insurance 2,031,824 1,880,904
National Insurance Services
Meals and entertainment 151,788 156,233
5,716 5,749
At reporting date, the number of employees were 52 (2020: 48). 6,013 6,248
346 968

163,863 169,198
2,195,687 2,050,102

Preserving Confidence and Trust In A Challenging Financial Environment 78

Celebrating 44 years

ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED Page 37
Statement of Cash Flows
For the year ended December 31, 2021 2020
(Expressed in Eastern Caribbean Currency) $

31. Income from supplies outlet – net 2021 1,732,491
$ (1,414,354)
Sales
Cost of sales 1,585,328 318,137
Gross profit (1,301,837)
Other income (expense) 70,311
Recovery of inventory obsolescence 283,491 (4,024)
Gain on foreign exchange
Commission - 250
Interest (3,002) 7,828
392,502
Less: selling, administrative and general expenses -
Advertising 5,834 6,867
Audit fee 286,323 5,000
Bad debt recovered (3,187)
Bank charges 696 9,496
Commissions and fees 5,000 10,076
Depreciation (4,822) 14,480
Donations 6,287
Electricity 6,875 350
License 13,199 18,361
Office expense
Postage - -
Repairs and maintenance 19,342 7,580
Security 1,114
Staff costs 125 3,505
Supplies 10,617 5,253
Transportation 169,198
Telephone - 3,124
Total administrative expense 935 2,673
Net income 2,481
- 256,371
163,863 136,131

1,084
3,527
1,979
228,707
57,616

32. Other income 2021 2020
$ $
Rental income
Profit on sale of lands 605,802 383,464
22,172 29,264

627,974 412,728

79 Preserving Confidence and Trust In A Challenging Financial Environment

ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED Celebrating 44 years
Statement of Cash Flows Page 38
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

33. Income tax

In accordance with Section 25(1) of the Income Tax Act 1979 and Section 241(2) of the Co-
operative Societies Act 2012, the Credit Union is exempt from the payment of income tax.

34. Contingencies

Undrawn loan commitments and other related obligations
As of reporting date, the Credit Union had contractual amounts of off-statement of financial
position financial instruments that commit it to extend credit to customers as follows:

Undrawn loan commitments 2021 2020
$ $

1,266,889 2,315,912

35. Financial instruments and financial risk management

The Credit Union’s activities expose it to a variety of financial risks and those activities involve
the analysis, evaluation, acceptance, and management of some degree of risk or combination
of risks. Taking risk is core to the financial business, and the operational risks are an inevitable
consequence of being in business. The Credit Union’s aim is therefore to achieve an
appropriate balance between risk and return and minimise potential adverse effects on the
Credit Union’s financial performance.

The Credit Union’s management policies are designed to identify and analyse these risks, to
set appropriate risk limits and controls, and to monitor the risks and adherence to limits by
means of reliable and up-to-date information systems. The Credit Union regularly reviews, its
risk management policies and systems to reflect changes in markets, products, and emerging
best practice.

Risk management is carried out by the Management Committee under policies approved by the
Board of Directors.

(a) Credit risk

The Credit Union maximum credit risk exposure is detailed below: 2021 2020
$ $

Deposits at bank and other institutions 38,015,059 34,026,956
Investments 9,166,797 7,215,136

Loans to members 86,884,956 87,421,719
Other assets 453,946 673,015

134,520,758 129,336,826

Preserving Confidence and Trust In A Challenging Financial Environment 80

Celebrating 44 years Page 39
ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED
Statement of Cash Flows
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

35. Financial instruments and financial risk management (cont’d)

(a) Credit risk (cont’d)

Credit risk in respect of loans and advances is limited as this balance shown is net of
impairment losses on loans and advances.

Credit risk is the risk of suffering financial loss should any of the Credit Union’s customers,
clients or market counterparts fail to fulfill their contractual obligations to the Credit
Union. Credit risk arises mainly cash and cash equivalents, investment securities, loans
to members and account receivables.

Credit risk from financial assets is minimised through advancing loans only after careful
assessment of the borrower, obtaining collateral before advancing loans. The risk
accepted in relation to one borrower is restricted to 10% of the shareholder’s equity.
Exposure to credit risk is also managed in part by obtaining collateral and guarantees for
loans receivable. The collateral may consist of real estate, member deposits and shares,
equipment, or vehicles. The credit quality of each individual investment is internally
assessed based on the financial strength, reputation and market position of the issuing
company and the ability of that company to service the debt. The Credit Union’s balances
with banks are held with reputable financial institutions and as a result their credit risk
is deemed minimal. The Credit Union limits its exposure to credit risk from trade
receivables by establishing a maximum payment period of one to two months for
individual and corporate customers. The Credit union limits its exposure to credit risk
by investing only in investment securities with counterparties that are reputable and
financially sound.

A financial asset is past due when a counterparty has failed to make payments when
contractually due. The Credit Union is most exposed to the risk of past due assets with
respect to its loans and advances to members.

Loans and advances to members are summarized as follows: -

Loans to members - impairment analysis 2021 2020
$ $
Neither past due nor impaired
Past due but not impaired 82,993,052 84,649,786
Impaired
Gross 224,910 29,039
Less: allowance for impairment 7,291,564 6,122,516
90,509,526 90,801,341
Interest receivable (3,950,249) (3,705,301)

86,559,277 87,096,040
325,679 325,679

86,884,956 87,421,719

81 Preserving Confidence and Trust In A Challenging Financial Environment

ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED Celebrating 44 years
Statement of Cash Flows Page 40
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

35. Financial instruments and financial risk management (cont’d)
(a) Credit risk (cont’d)
Industry sector
The Credit Union’s concentration of loans is given to private households for consumer purposes. As
seen below, the majority of the Credit Union’s loan are for personal use. Private households
would include personal, vacation and travel, housing, vehicle purchases and medical purposes.
(b) Liquidity risk
Liquidity risk is the exposure that the Credit Union may encounter difficulty in meeting obligations
associated with its financial liabilities. Liquidity risk also arises when excess funds accumulate
resulting in the loss of opportunity to increase investment returns.
The contractual maturities of assets and liabilities, and the ability of the Credit Union to meet
payment obligations associated with financial liabilities when they fall due and to replace funds
when they are withdrawn, are important factors in assessing the liquidity of the Credit Union.
Projections and examination of the Credit Union’s asset and liability maturity structure to
facilitate the matching of asset and liability maturity dates as far as possible and providing for any
shortfall or excess cash situations is a fundamental part of the Credit Union’s liquidity risk
management.

Loan sectors

Private Wholesale and Education Total
households retail trade

Gross balance at Dec 31, 2020 $ $ $ $
Gross balance at Dec 31, 2021 85,775,699 2,192,337 2,833,305 90,801,341
86,150,033 1,913,989 2,445,504 90,509,526

Management undertakes continuous review of cash inflows and outflows and seeks to maintain an
adequate loans-to-savings ratio. For this ratio savings include deposits from members and
shareholder balances.
The table below presents the cash flows payable by the Credit Union for financial liabilities by
remaining contractual maturity dates at the reporting date. The amounts disclosed in the table are
the contractual undiscounted cash flows.

1 year 1 and 5 After 5 Total
$ years years $

$$

As at December 31, 2021 1,565,259 - - 1,565,259
Accounts payable and accrued liabilities 832,865 - - 832,865
Staff pension plan - - 106,633,475
Savings and other deposits 106,633,475 - - 22,968,287
Fixed deposits 22,968,287 - - 131,999,886

131,999,886

Preserving Confidence and Trust In A Challenging Financial Environment 82

Celebrating 44 years Page 41
ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED
Statement of Cash Flows
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

35. Financial instruments and financial risk management (cont’d)
Liquidity risk (cont’d)

1 year 1 and 5 years After 5 years Total
$ $$ $

As at December 31, 2020 1,740,139 - - 1,740,139
Accounts payable and accrued liabilities 691,930 - - 691,930
Staff Pension Plan - - 99,418,687
Savings and other deposits 99,418,687 - 5,200,000 22,559,436
Fixed deposits 17,359,436 1,730,896 3,814,021 5,977,641
Borrowings 1,730,896 9,014,021 130,387,833
432,724
119,642,916

The Credit Union holds a diverse portfolio of cash and investments to support payment obligation.
Assets held for managing liquidity comprises cash and balances with banks, certificates of deposit
and government bonds that are readily acceptable. The Credit Union would also be able to meet
unexpected cash flows by selling investment securities and accessing additional funding.
(c) Market risk
The Credit Union’s activities expose it to a variety of financial risks and those activities involve
the analysis, evaluation, acceptance, and management of some degree of risk or combination of
risks. Taking risk is core to the financial business, and the operational risks are an inevitable
consequence of being in business. The Credit Union’s aim is therefore to achieve an appropriate
balance between risk and return and minimize potential adverse effects on the Credit Union’s
performance. The most important types of risk are credit risk, market risk and operational risk.
Material risk includes currency risk and interest rate risk.
(d) Currency risk
The Credit Union operations are conducted in Eastern Caribbean currency. The Credit Union takes on exposure to
effects of fluctuations in the prevailing foreign currency exchange rates on its financial position and cash flows.
Management believes that exposure to currency risk is minimal since transactions in foreign currencies are primarily
in United States Dollars (US$) which has been formally pegged at EC$2.70 since July 1976.

83 Preserving Confidence and Trust In A Challenging Financial Environment

ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED Celebrating 44 years
Statement of Cash Flows Page 42
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

35. Financial instruments and financial risk management (cont’d)
(e) Interest rate risk
The Credit Union is exposed to interest rate risk, which arises when a change in market interest
rate affects the current or future yields of financial assets and financial liabilities. The occurrence
of an increase in interest rates on financial liabilities may result in financial loss to the Credit
Union.
Interest on loans and advances to members and deposits from members is fixed to maturity.
The table below summarises the exposures to interest rate risks of the Credit Union’s financial
assets and financial liabilities. Amounts are stated at carrying amounts, categorised by the earlier
of contractual re-pricing or maturity dates.

3 to 12 1 to 5 Over 5 Non-interest
months Years
years bearing Total
$ $ $
$$
1,380,019
As at December 31, 2021 3,612,426 - - 37,110,249 38,490,268
Financial assets 2,729,942 125,002 4,054,521
Cash 33,927,238 50,227,776 1,374,848 9,166,797
Investment securities -
Loans to members 7,722,387 - - - 86,884,956
Other assets 34,052,240 54,282,297
- 453,946 453,946
Financial liabilities 832,865
Accounts payable and accrued liabilities 106,633,475 38,939,043 134,995,967
Staff pension plan 22,968,287
Savings and other deposits 130,434,627 - - 1,565,259 1,565,259
Fixed deposits -122,712,240 - - - 832,865
- - - 106,633,475
Total interest sensitivity gap - - - 22,968,287
- -
34,052,240 54,282,297 1,565,259 131,999,886
37,373,784 2,996,081

Preserving Confidence and Trust In A Challenging Financial Environment 84

Celebrating 44 years Page 43
ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED
Statement of Cash Flows
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

35. Financial instruments and financial risk management (cont’d)
(e) Interest rate risk (cont’d)

3 to 12 1 to 5 Over 5 Non-interest
months Years
years bearing Total
$ $ $
$$

As at December 31, 2020 1,705,032 - - 32,720,248 34,425,280
Financial assets 4,736,300 1,040,641 250,462
Cash 3,021,757 33,927,238 50,472,724 1,187,733 7,215,136
Investment securities
Loans to members - - - - 87,421,719
Other assets 9,463,089 34,967,879 50,723,186
673,015 673,015
Financial liabilities
34,580,996 129,735,150

Accounts payable and accrued liabilities - - - 1,740,139 1,740,139
691,929 - - - 691,929
Staff pension plan 99,418,687 - - - 99,418,687
Savings and other deposits 432,724 1,730,896 3,814,021 - 5,977,641
Borrowings 22,559,436 - - - 22,559,436
Fixed deposits 123,102,776 1,730,896 3,814,021
-113,639,687 33,236,983 46,909,165 1,740,139 130,387,832
Total interest sensitivity gap 32,840,857 -652,682

85 Preserving Confidence and Trust In A Challenging Financial Environment

ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED Celebrating 44 years
Statement of Cash Flows Page 44
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

35. Financial instruments and financial risk management (cont’d)

(e) Interest rate risk (cont’d)

At the reporting date, the carrying values of the Credit Union’s interest-bearing, fixed-
rate financial instruments were: -

2021 2020
$ $

Financial assets 1,380,019 1,705,032
Cash at bank - savings accounts only 9,353,333 7,508,427
Investment securities 90,509,526 90,801,341
Loans and advances to members

101,242,878 100,014,800

Financial liabilities 106,633,475 99,418,687
Savings and other deposits 22,968,287 22,559,436
Fixed deposits
129,601,762 121,978,123

36. Related party transactions

(a) Definition of related party

A related party is a person or entity that is related to the Credit Union.

(i) A person or a close member of that person's family is related to the Credit Union if that
person:
1) has control or joint control of the Credit Union;
2) has significant influence over the Credit Union; or
3) is a member of the key management personnel of the Credit Union or of a parent
of the Credit Union.

(ii) An entity is related to the Credit Union if any of the following conditions applies:
1) The entity and the Credit Union are members of the same group (which means
that each parent, subsidiary and fellow subsidiary is related to the others).
2) One entity is an associate or joint venture of the other entity (or an associate or
joint venture of a member of a group of which the other entity is a member).
3) Both entities are joint ventures of the same third party.
4) One entity is a joint venture of a third entity and the other entity is an associate
of the third entity.
5) The entity is a post-employment benefit plan for the benefit of employees of
either the reporting entity or an entity related to the reporting entity.
6) The entity is controlled or jointly controlled by a person identified in (a).
7) A person identified in (a)(i) has significant influence over the entity or is a
member of the key management personnel of the entity (or of a parent of the
entity).
8) The entity, or any member of a group of which it is a part, provides key
management personnel services to the Credit Union or to the parent of the Credit
Union.

Preserving Confidence and Trust In A Challenging Financial Environment 86

Celebrating 44 years Page 45
ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED
Statement of Cash Flows
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency)

36. Related party transactions (cont’d)

Definition of related party (cont’d)

(ii) (cont’d)

Close members of the family of a person are those family members who may be expected to
influence, or be influenced by, that person in their dealings with the entity and include:
· that person's children and spouse or domestic partner;
· children of that person's spouse or domestic partner; and
· dependents of that person or that person's spouse or domestic partner.

(b) Identity of related parties

The Credit Union has a related party relationship with its Directors.

(c) Related party transactions and balances

A number of transactions have been entered into with related parties in the normal course of business.
These transactions were conducted at market rates, on commercial terms and conditions.

Directors, committee members and management staff of St. Vincent and the Grenadines Teachers
Co-operative Credit Union Limited are considered as related parties.

a. Loans and advances 2021 2020
$ $
Directors and key management personnel (and their families)
Committee members 1,738,426 924,075
944,420 413,477
1,337,552
2,682,846

b. Deposits and other liabilities 2021 2020
$ $
Directors and key management personnel (and their families)
Committee members 883,725 875,109
795,694 732,909
1,679,419 1,608,018

c. Interest income 2021 2020
Directors and key management personnel (and their families) $ $

100,582 126,098
100,582 126,098

87 Preserving Confidence and Trust In A Challenging Financial Environment

ST. VINCENT AND THE GRENADINES TEACHERS CO-OPERATIVE CREDIT UNION LIMITED Celebrating 44 years
Statement of Cash Flows Page 46
For the year ended December 31, 2021
(Expressed in Eastern Caribbean Currency) Page 1

36. Related party transactions (cont’d) 2021 2020
(c) Related party transactions and balances (cont’d) $ $
c. Interest expenses
25,479 22,322
Directors and key management personnel (and their families) 25,479 22,322

No specific provisions have been recognised in respect to leans to related parties.

d. Key management compensation 2021 2020
Key management compensation $ $

805,570 706,080

No provisions have been recognized in respect to loans given to related parties.

37. Dividends

After the reporting date, a total dividend payout of $435,000 was proposed by the Board of
Directors, inclusive of 1.05% rebate of $78,418. The dividends and rebates have not been
recognized as liabilities.

38. Comparatives
Certain comparatives have been amended to conform to the current year’s presentation.

Preserving Confidence and Trust In A Challenging Financial Environment 88

Celebrating 44 years

THE CREDIT COMMITTEE REPORT
FOR THE YEAR ENDING DECEMBER 31, 2021

Left to Right: Sis. Okolo John—Patrick, Bro. Dwane Allen, Sis. Gwenette Cambridge, Sis. Michelle Richardson, Sis. Thelma
Charles

Introduction
The Credit Committee is pleased to present its report on loan activities for the financial year 2021. Our mandate
is governed by the St. Vincent and the Grenadines Co-operatives Societies Act No. 12 of 2012. The Committee is
always mindful that its duties and responsibilities are to be carried out in a professional manner, ensuring the
practice of continued high ethical standards. In our assessment of the loan applications, we ensured that the cred-
it risk and decisions made were in accordance with our Loan policy and general best lending practices.
Functioning
For the year 2021, the Credit Committee met at least once per month and more frequently as deemed necessary
by the volume and urgency of loan applications. Site visits were also conducted to get a first-hand view of pro-
jects and properties offered as collateral or those in which we already have financial interest. Additionally, finan-
cial counselling was given to loan applicants to assist them in being more financially disciplined.
During the period under review, the Credit Committee was actively involved in the revision of the Loan and
Delinquency Policies. These policies were forwarded to the Board of Directors for approval. The Credit Union
remains cognizant of our members’ financial needs and has responded with new and revised loan products. As
such, a new loan product referred to as “Bundled Loan” was developed and several adjustments were made to
our loan products, particularly mortgage loans and vehicle loans where the interest rates were reduced in an effort
to make credit facilities more affordable and competitive. Considering the financial struggles faced by many of
our members, particularly those who needed finance for renovation, adjustments were made to our Christmas
loan special where the maximum increased from $10,000.00 to $15,000.00 and the Revolving Loan from
$10,000.00 to $13,000.00 during the festive season.
89 Preserving Confidence and Trust In A Challenging Financial Environment

Celebrating 44 years

Loan Analysis
A total of 2,712 loan applications were processed of which 2,656 or 97.94% were approved. This represents a
decrease in applications of 233 or 7.91% over 2020. However, while the quantity of loan applications fell, it is
noted that the value of loan applications received increased significantly by 43.05%. For the reporting period,
the value of loan applications processed amounted to 30.9 million; of this amount 25.9 million or 83.82% was
approved. The value of loans approved increased by $7.1 million in 2021 which represents an increase of 37.6%
over the previous year.

Table 1 shows a comparison of loan applications processed in 2020 and 2021:

Table 1

Year Number Received Number Approved Value of Applica- Value of Applica-
tions Received tions Approved
2020 2,945 2,914 $21.6M $18.8M
2021 2,712 2,656 $30.9M $25.9M
Decrease -7.91% -8.85% 43.05% 37.76%

The following purposes are the areas where the most significant requests were made:

Table 2

Purpose % Approved
20.92
Construction & Renovation
9.45
Debt Consolidation 16.34
23.84
Property Purchase 10.41

Revolving Loan

Auto Repairs & Purchase

The revolving loan remains one of the preferred products for our members. This product attracted 1,830
applicants with a value of $6.18 million, an increase of $2.1M over 2020. We also noted an increase in loan
applications for construction, renovation, and property purchase.

Delinquency
As was the case in 2020, the impact of COVID-19 Pandemic continued to pose a challenge to the Credit Union
and our members. These challenges were compounded by the volcanic eruptions and have severely affected our
asset quality to the extent that our rate of delinquency increased over December 31, 2020.
As at December 31, 2021, the delinquency rate was 8%. The outstanding principal on these accounts amounted
to $7,516,474.00, which is an increase of $1,291,789.00 or 1.3% over the previous financial year. The number
of delinquent accounts amounted to 281, an increase of 54 or 23.7% over the comparable period.
We noted that the highest rates of delinquency continue to be that of education, business, and debt consolidation
loans.
Throughout the financial year, our loans department, particularly our recoveries officers, continued to work
closely with our members as emphasis has been on helping defaulters to recover and to improve their credit
credentials. The development of customized payment plans designed and based on members’ financial ability
led to the granting of moratoria.

Preserving Confidence and Trust In A Challenging Financial Environment 90

Celebrating 44 years

Recommendations were made for restructuring of loans and some measures have been taken to minimise the
deterioration in the overall asset quality. However, in some cases the Credit Union had been forced to exercise
its rights as per mortgage deeds, therefore, some mortgaged properties were placed on the market. As a result, at
the end of the financial year, there were twelve (12) properties on the market.
Related Party Loans
As at December 31, 2021, loans to staff and committee members amounted to $5,554,854.00 in the following
categories:

Education: $ 18,545.00
Consumer: $ 610,983.00
Vehicle $ 37,175.00
Mortgage: $4,788,151.00
Conclusion
As we navigate through these challenging times, we are resolute in our mission of providing opportunities and
quality services to our members and other stakeholders. The overall impact of COVID-19 and the volcanic
eruption cannot be quantified, as not only have we been adversely affected financially, but there are also aspects
of social and psychological impact that cannot be easily measured. Nevertheless, we are resilient, and our
confidence lies within the capabilities of our volunteers, management, and staff who are innovative and willing to
adapt to the changing environment. Most importantly, we are confident that our members will continue to give
their support and loyalty to the Credit Union.
The Credit Committee wants to express sincere gratitude to the Board of Directors and to you, the members for
granting us the opportunity to serve.

91 Preserving Confidence and Trust In A Challenging Financial Environment

CREDIT COMMITTEE - LOAN SUMMARY 2021

No. Amount No. Amount No. Amount Amount Total No. Total Amount
Requested Tabled Rejected Rejected No. Partly Partly Rejected Approved Approved
Category Requested Tabled Rejected Rejected %
- (fully) (fully) - 12 81,465.13 0.31%
Preserving Confidence and Trust In A Challenging Financial Environment AVeg hriiccul el tu re 12 81,465.13 - --
Repairs / - - 10.41%
Purchase 165 2.08%
7 2,908,421.61 4 98,295.00 6 110,250.00 - - 110,250.00 155 2,699,876.61 2.48%
B u n dl e 540,500.00 - - - - - - - 7 540,500.00 4.85%
899,315.05 - - - - 25 644,315.05
Business 27 2 2 255,000.00 - - 255,000.00 20.92%
1,322,493.96 25,000.00 3 39,800.00 39,800.00 139 1,257,693.96
C h ri s tm as 144 9 - - 9.45%
C on s tru cti on / 123 7,704,453.13 2,278,425.26 - - - 114 5,426,027.87 3.46%
Re n ovati on 117 5 - - 1.15%
De bt 3,203,136.18 - 465,421.59 7 286,862.61 286,862.61 105 2,450,851.98 0.74%
C on s ol i dati on 896,540.86 2 - 8 896,540.86 0.07%
417,856.53 - - 39 298,856.53
Re fi n an ce 8 190,706.95 - - 29 190,706.95 16.34%
17,036.63 - 3 17,036.63 0.35%
Edu ca ti o n 41 6 119,000.00 - - - - 0.34%
5,542,646.80 - - - - - -
Household 29 91,142.89 - - - - - - 23.84%
0.52%
Le gal 3 109,265.71 846,130.00 3 459,000.00 - - 459,000.00 41 4,237,516.80 2.70%
50 - - - - - - 29 91,142.89 100%
Lan d/Prope rty - - - 10 87,162.23
Purchase 4 22,103.48 - - 22,103.48
4,486.10 1829 6,184,561.85
Me di cal 29 0 - - - - 1 135,000.00
Trave l 14 - - - 699,977.62
16,484.00 110
Revolving Loan 1830 6,189,047.95 1 -2 16,484.00 1,189,500.09 2656 25,939,232.96
Pre -approve d 1 135,000.00
O the r 716,461.62 - 3,836,757.95 27 1,189,500.09
TO TAL 112 29
2712 30,965,491.00

Bro. Duane Allen Sis. Michelle Richardson Celebrating 44 years
SECRETARY CHAIRPERSON

92

Celebrating 44 years

THE SUPERVISORY AND COMPLIANCE COMMITTEE
REPORT

FOR THE YEAR ENDING DECEMBER 31, 2021

Left to Right: Attica Allen, Tammie Walters, Randy Boucher, Janiel Henry-Rose, Doris Charles

Introduction
The Supervisory and Compliance Committee is proud to present the following report to members for the finan-
cial year ending December 2021. For eleven months of the financial year the committee comprised Bros.
Calvin Herbert (Chairperson), Dixton Findlay and Randy Boucher and Sisters, Tammie Walters (Secretary) and
Vilma Ollivierre.
At the 43rd AGM held on November 9, 2021, Brothers Calvin Herbert and Dixton Findlay retired and were not
eligible for re-election having served two consecutive terms. Sisters Janeil Henry-Rose and Attica Allen were
elected to serve for three years. The rest of the Committee comprised Bro. Randy Boucher, Sisters Vilma Ol-
livierre and Tammie Walters.
Following the 43rd AGM, Sis. Vilma Ollivierre tendered her resignation from the Committee and subsequently
Sis. Doris Charles was co-opted to fill the vacancy. At the first meeting of the Committee after the AGM, Bro.
Randy Boucher and Sis. Janeil Henry-Rose were elected to serve as Chairperson and Secretary respectively.
Sis. Jozell Byron, the Compliance Officer, was reassigned as the Liaison Officer.
The Committee continued to meet every first and third Thursdays of each month to check the records of the
Credit Union to ascertain whether the policies and procedures were being followed and to ensure compliance
with requisite regulations. We also met quarterly with the Board of Directors and the All Committee to discuss
issues related to the operations of the Credit Union.
The increase in positive COVID-19 cases at the start of the financial year and the ensuing tightening of
protocols, coupled with the explosive eruption of La Soufriere Volcano in the second quarter of the financial
year presented many challenges for the Committee. While the Committee used technology to conduct most of
its meetings, these virtual meetings became a challenge in the second quarter as a result of the evacuation of
members from the red and orange zones. Further, the direct involvement of some members in the management

Preserving Confidence and Trust In A Challenging Financial Environment 93