Grant Thornton An instinct for growth'm April 26, 2018 Auditor's Report To the Members of Grant Thornton Pointe Seraphine P.O. Box 195 Castries, St. Lucia West Indies T +1758456 2600 F +1758452 1061 www.grantthornton.lc Report on the financial statements Opinion We have audited the accompanying financial statements of The St. Vincent Co-operative Bank Limited (the Bank) which comprise the balance sheet as of January 31, 2018 and the statements of comprehensive income and expenditure, changes in accumulated fund and cash flows for the year then ended and a summary of significant accounting policies and other explanatory information. In our opinion, the accompanying financial statements present f a irly, in all material respects, the financial position of as of January 31, 2018, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Bank in accordance with the ethical requirements that are relevant to our audit of the financial statements in the Eastern Caribbean, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Management and those charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Bank ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Bank financial reporting process. Partners: Anthony Atkinson - Managing Partner Richard Pelorkin Rosilyn Novola Malaika Theobalds Sharon Raoul Floyd Pa.tlorson Audit, Tax. Advisory Mombor ol Grant Thornton lnlernalional Lid. 2
Independent Auditor s Report continued Auditor s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements are free from material misstatement, whether due to fraud or error, and to issue an auditor s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with International Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Bank internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Bank ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor s report. However, future events or conditions may cause the Bank to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Chartered Accountants 3 Partners: Anthony Atkinson Managing Partner Richard Peterkin Rosilyn Novela Malaika Theobalds Sharon Raoul Floyd Patterson Audit, Tax. Advisory Member of Grant Thornton International Ltd.
Statement of Financial Position As of January 31, 2018 2018 2017 2016 Notes $ $ $ ASSETS Cash resources 6 32,435,717 42,582,268 38,622,317 Financial investments 7 49,372,428 41,417,617 37,683,504 Loans 8 110,782,074 112,319,693 101,964,339 Other assets 9 229,982 178,135 157,503 Property, plant and equipment 10 10,007,110 10,132,111 9,578,305 Total Assets 202,827,311 206,629,824 188,005,968 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Deposits 11 170,963,910 182,812,205 164,601,263 Other payables 12 3,334,837 1,529,211 1,276,538 Taxes payable 1,712,572 129,848 39,565 Dividend payable 2,406 2,406 2,494 Deferred tax liability 13 386,879 381,252 476,973 Total Liabilities 176,400,604 184,854,922 166,396,833 Shareholders' Equity Stated capital 14 5,527,362 5,527,362 5,527,362 General reserve 15 5,527,362 5,527,362 5,527,362 Other reserve 16 2,101,422 1,658,650 1,302,872 Accumulated other comprehensive income 17 5,614,854 5,614,854 5,214,119 Retained earnings 7,655,707 3,446,674 4,037,420 26,426,707 21,774,902 21,609,135 Total Liabilities and Shareholders' Equity 202,827,311 206,629,824 188,005,968 APPROVED BY THE BOARD OF DIRECTORS ON APRIL 26, 2018. 4
Statement of Changes in Equity For the Year Ended January 31, 2018 2018 2017 $ $ Stated Capital Beginning of year 5,527,362 5,527,362 At end of year 5,527,362 5,527,362 General Reserve Beginning of year 5,527,362 5,527,362 At end of year 5,527,362 5,527,362 Other Reserve Beginning of year 1,658,650 1,302,872 Transfer from retained earnings 442,772 355,778 At end of year 2,101,422 1,658,650 Accumulated Other Comprehensive Income Beginning of year 5,614,854 5,214,119 Appreciation in securities at fair value through other comprehensive income 0 15,794 Appreciation in property, plant and equipment 0 384,941 At end of year 5,614,854 5,614,854 Retained Earnings Beginning of year 3,446,674 4,037,420 Net profit for the year 4,651,805 40,743 Transfer to other reserve (442,772) (355,778) Dividend paid 0 (275,711) At end of year 7,655,707 3,446,674 Total Shareholders Equity 26,426,707 21,774,902 5
Statement of Profit or Loss and Other Comprehensive Income For the Year Ended January 31, 2018 Interest Income Interest Expense Net Interest Income Less: Allowance for Impaired Loans Interest Levy Selling Expenses Administrative Expenses Staff Costs Depreciation Other Income Other income Loss on disposal of fixed assets Miscellaneous income Profit before Income Tax Income Tax Net Profit for the Year Other Comprehensive Income Other Comprehensive Income not Recyclable through Profit or Loss in Subsequent Periods Appreciation in securities at fair value through other comprehensive income Appreciation in value of property, plant and equipment Comprehensive Income Comprehensive Income Attributable to: 2018 2017 Notes $ $ 18 12,813,528 10,859,655 19 3,860,834 3,968,241 8,952,694 6,891,414 8.4 1,321,462 3,160,000 7,631,232 3,731,414 896,319 870,368 20 215,885 238,443 21 1,570,875 1,405,159 22 1,656,279 1,461,519 10 209,400 197,830 3,082,474 (441,905) 1,984,632 526,310 (7,164) (29,253) 1,332,873 19,718 6,392,815 74,870 23 (1,741,010) (34,127) 4,651,805 40,743 0 15,794 0 384,941 0 400,735 4,651,805 441,478 Owners of company 4,651,805 441,478 Earnings per Share 24 0.84 0.08 6
Statement of Cash Flows For the Year Ended January 31, 2018 2018 2017 Note $ $ Operating Activities Profit before income tax 6,392,815 74,870 Adjustments for Depreciation 209,400 197,830 Investment income (1,763,563) (2,085,147) Loss on disposal of property, plant and equipment 7,164 29,253 Net Profit (Loss) before Changes in Operating Assets and Liabilities 4,845,816 (1,783,194) Decrease (increase) in loans 1,537,619 (10,355,354) Increase in other assets (51,847) (20,632) (Decrease) increase in deposits (11,848,295) 18,210,942 Increase in other payables 1,805,626 252,673 Cash (Used in) Generated from Operations (3,711,081) 6,304,435 Income taxes paid (152,659) (39,565) Net Cash (Used in) Generated from Operating Activities (3,863,740) 6,264,870 Investing Activities Additions to property, plant and equipment (91,563) (395,948) Purchase of financial investments (27,124,186) (41,232,922) Investment income received 1,736,680 1,965,413 Redemption of financial investments 19,196,258 37,634,337 Net Cash Used in Investing Activities (6,282,811) (2,029,120) Financing Activity Dividend Paid 0 (275,799) Net Cash Used in Financing Activity 0 (275,799) Net Movement in Cash Resources (10,146,551) 3,959,951 Cash Resources - Beginning of Year 42,582,268 38,622,317 Cash Resources - End of Year 6 32,435,717 42,582,268 7