waves of change: oceans of opportunity” 1

“Waves of Change: Oceans of Opportunity” 1

2 BICCU Annual General Meeting 2015

Our Vision

Changing to Meet Our Members Financial Goals

Core ValuesCommitment to Service

Demonstrate Care and Concern for All

Create Inroads to Financial Freedom

Improve the Quality Of Life for the Members

Be Ever Changing and Dynamic


TABLE OF CONTENTS Page #

Vision & Core Values Inside Front Cover

Tables of Content 3

Standing Orders 4

Prayer of St. Francis of Assisi 5

Meeting Agenda 6

Message from The Minister of Agriculture & Marine Resources 7

Message from The Deputy Director of Societies 8

Message from The President of The League 9

Photos of Board of Directors 10

Photos of Supervisory & Credit Committees 11

Photos of Education Committee 12

Photos of Staff 13

Directors’ & Committees’ Terms of Service 14

Minutes of the 28th AGM May 28, 2014 15 – 23

Minutes of The Special Call Meeting 24 – 26

Directors’ Report 27 – 31

Treasurer’s Report 32 – 33

Auditor’s Report & Financials 2014 34 –77

2016 Budget 78 – 80

Supervisory Committee’s Report 81 –82

Credit Committee’s Report 83 –84

Education Committee’s Report 85

Resolutions 86

Highlights of The 2014 Year In Pictures 87-88

NOTES 89-90

Featured Products Back Cover


Standing Orders• AmemberistostandwhenaddressingtheChair

• Speechesaretobeclearandrelevanttothesubjectbeforethemeeting.

• AmembershallonlyaddressthemeetingwhencalleduponbytheChairmantodoso,afterwhichheshallimmediatelytakehisseat.

No member shall address the meeting except through the Chairman.

• WhencalleduponbytheChairman,amembermustfirststatehisnamebeforecontinuingwithhiscomment and/or question.

Amembermaynotspeaktwiceonthesamesubjectexcept:

• TheMoverofaMotion-whohastherighttoreply

• Herisestoobjectortoexplain(withpermissionoftheChair).

TheMoverofaProceduralMotion-(adjournmentlaidonthetable.Motiontopostponehavingtherightofreply).

No speech is to be made after the “Question” has been put and carried negative.

Amemberontherisingpointoforderistostatethepointclearlyandconcisely.(A“pointoforder”musthaverelevancetothe“StandingOrder”).

Amembershouldnot“call”anothermember“toorder”butmaydrawtheattentionoftheChairtoa‘breachof order’.

A question should not be put to vote if a member desires not to speak on it or move an amendment to it- ex-cept,thataProceduralMotion“ThePreviousQuestion”proceedtothenextBusiness”ortheClosure:ThattheQuestionbeNOWPUT”,maybemovedatanytime.

Only one motion should be before the meeting at one and the same time.

Whenamotioniswithdrawn,itfails.

The Chairman has the right to a “casting vote.

If there is equality of voting on an amendment, and the Chairman does not exercise his casting vote, the amendment is lost.

ProvisionistobemadeforprotectionbytheChairmanfromvilification(PersonalAbuse)No member shall impute improper motives against another member.


Our PrayerPrayer of St. Francis of Assisi

Lord, make me an instrument of Thy Peace.Where there is hatred, let me sow love

Where there is injury, pardonWhere there is doubt, faith

Where there is despair, hopeWhere there is darkness, lightWhere there is sadness, joy!

O divine Master, grant that I may not so much seekTo be consoled as to console;

To be understood as to understand;To be loved as to love.

For it is in giving that we receive,It is in pardoning that we are pardoned,

And it is in dying that we are born to eternal lifeSt Francis of Assisi


MeetingAgenda 2015

o Call to ordero Prayer of St. Francis of Assisio Welcomeo Greetings • MinisterofAgriculture,MarineResources&LocalGovernment • DepartmentofCo-operativeDevelopment • TheBahamasCo-operativeLeagueLimited(BCLL)

o Minutes from the 28th Annual General Meetingo Minutes from the Special Call Meeting September 6th, 2014o Matters Arisingo Report from the Board of Directorso Reports • Treasurer’sReport • Auditor’sReport • 2016Budget • SupervisoryCommittee • CreditCommittee • EducationCommitteeo NewBusinesso Resolutionso Elections • BoardofDirectors • SupervisoryCommittee • CreditCommitteeo Motionforadjournment


THEME: “Waves of Change: Oceans of Opportunity”

Iextendwarmgreetings,ontheoccasionofyour29thAnnualGeneralMeeting.Your,theme“WavesofChange:OceansofOpportunity”isverytimelyandofutmostimportancewiththeimpendingtransferofthesupervisionCo-operative

creditunionsandTheBahamasCo-operativeLeagueLimited(League)totheCentralBankofTheBahamas(CentralBank).

TheCo-operativeSectorhasgrowntoover$340.0MillionDollarsinassetsandmembershipofover40,000personsinthepastforty(40)years;theableadministratorswithintheDepartmentofCo-operativeDevelopmentmustbecommended for thisoutstandingachievement.Notwithstanding, the transferof creditunionsand theLeague tothe Central Bank, you are encouraged to remain vigilant and resist the temptation to become like banks. The goals andobjectivesforeconomic,socialgrowthanddevelopmentofthecreditunionsremainthesame.Co-operativePrinciplesshouldstillapplyandassuch,creditunionsmustremainfocusedandneverlosesightofwhy“theyexist,”whichis,toserveitsmembersbytheneverdyingconceptof:“PeopleHelpingPeopletoHelpThemselves.”

Co-operative credit unions have been successful because of the Co-operative Advantages of several reasons not the leastamongsttheyare:-theempowermentoftheMembers;thecreationofwealththroughthemembershipowningandmanagingthecreditunion;membersretainingprofits;andmembersbenefitingfromcompetitiveinterestrates.

Icongratulateandcommendyou,BahamaIslandsCo-operativeCreditUnionLimitedasyouconveneyour29thAnnual General Meeting. I encourage you to continue to be faithful to the Co-operative Principles. The level of serviceandempowermentyouofferyourmembersdeterminesthemeasureofthesuccessofyourcreditunion.Iencourageyoutotakeadvantageoftheoceansofopportunitiesthroughinnovativeideasandsoundprograms,whichresultsincompetitiveproductsandservicestofurtherempoweryourmembers.

Bestwishesforafruitful29thAnnualGeneralMeeting.

THE HON. V. ALFRED GRAY, M.P.

Message From

The Hon. V. Alfred Gray, M.P.Minister Of Agriculture & Marine Resources

BahamaIslandsCo-OperativeCreditUnionLimited(BICCU)29thAnnualGeneralMeeting

26thMay,2015



I congratulate you on this your 29th Annual General Meeting. Your credit union has already transformed itself intoanecessaryandviableentity;youhavedemonstratedacommitmenttoempoweryourmembers,having5,209membersandover$28.0Millioninassets.BICCU’scontinuedeffortstoadvancetheCo-operativeMovement(Movement)andhelptoimprovethequalityoflifeforyourmembersarereapingdividends.TheMovementhasexperiencedtremendousgrowthoverthepastfour(4)decadesandthisgrowthisdirectlyconnectedtoyourcredit union’s on-going participation via training and investment opportunities for your members.

Yourtheme“WavesofChange:OceansofOpportunity” isvery timely,especiallyas theMovement isat thebrinkofanewerawiththetransferofCo-operativecreditunionsandtheLeagueunderthesupervisionofTheCentralBankofTheBahamas.InthewordsofJohnF.Kennedy,“Changeisthelawoflife,thosewholookonlytothepastorpresentarecertaintomissthefuture.”Yourcreditunionisonthethresholdofanewfuture,anewopportunitytogrowandaneweraforempoweringyourmembersunderthesupervisionofTheCentralBankof The Bahamas.

ItisintakingadvantageofthewavesofchangeandoceansofopportunitiesthatsetCo-operativecreditunionsapartfromotherfinancialinstitutions.ThevaluesandprinciplesofCo-operativesareforgedintheirstructureandfunctionofbeingmemberownedandmanaged.Forthesereasons,Co-operativesgivepeopleachancetobeapartofaMovementthehelptoimprovetheirsocio-economicstatus.ItishopedthatthewayforwardfortheMovementisreachingabroadercrosssectionofpersons,especiallytheyouthandyoungprofessionals,whichwillhelptoreduceunemploymentandbuildwealthamongtheyoungergenerations.

I commend you on your efforts in developing the Co-operative Movement to date and as you convene your 29thAnnualGeneralMeeting,Iwishyousuccessandbestwishesforaproductivefuture.IencourageyoutocontinuetoprovideyourmembershipwithqualityservicefortheCo-operativeAdvantage.

Have a productive Annual General Meeting!

JUDYL.SIMMONS,DTM

Message From

Judy L. SimmonsDeputy Director/Officer In Charge

Department Of Cooperative Development

BahamaIslandsCo-OperativeCreditUnionLimited(BICCU)29th Annual General Meeting

26th May 2015



On behalf of the Board of Directors, management and staff of the BahamasCo-operativeLeagueLimited,Iwishtoextendoursincere

congratulationstothemembers,BoardandstaffofBahamaIslandsCo-operativeCreditUniononthisyour 29th Annual General Meeting.

Yourtheme““Wavesofchange:OceansofOpportunity”certainlyreflects theera inwhichtheCo-operativeMovementoperates.Aseveryoneisaware,TheBahamasCo-operativeCreditUnionActof2015waspassedintheHouseofAssemblyandtheSenaterecently.WeexpectthatthetransitionofregulatoryoversightofthesectorwillbetransferredtotheCentralBankofTheBahamasinshortorder.The Bahamian economy continues to exhibit a number of challenges like rising unemployment and increasedtaxation.CompetitionwithintheFinancialServicessectorisalsobecomingincreasinglyfierce.

Althoughthereare“Wavesofchange”theCo-operativeMovementispoisedtoprovideitsmemberswith“OceansofOpportunity”.Wearefoundedonstrongprinciplesandourcreditunionsareoperatedwiththehighestcommitmenttolocalandinternationallyacceptedstandards.

TheBahamaIslandsCo-operativeCreditUnionhascontinuouslyachievedfinancialandmembershipgrowthovertheyearsandthisistrulyatestamenttothededicationofallstakeholders.Youarecertainlycommended for yourdecision tobecomeanOpenBondCreditUnion in2014, therebyprovidingaccess to your services tomanymoreBahamians. We also congratulate theCreditUnion for thelaunchof itsDebitCardandHealth Insuranceprogrammes. Thesenewserviceswillundoubtedlyprovideincreasedbenefittoyourmembers.

BICCUisapacesetterintheMovementandweencourageyoutocontinuetorespondtotheneedsofyourmemberswithinnovativeproductsandexceptionalservice.

WetrustthatyouwillhaveasuccessfulAnnualGeneralMeetingandcontinuetogrowfromstrengthto strength.

Message From

Ms. Sonia HamiltonPresident

BahamaIslandsCo-OperativeCreditUnionLimited(BICCU)29th Annual General Meeting

26th May 2015


Vice Chairman Treasurer

Chairman

Secretary Asst. SecretaryDirector

Asst Treasurer

Barry Rolle Angela Culmer-Hinsey

Rosemary Campbell

Hilton Bowleg

Janet Guerriea

Bruce Delancey

Estella Walkes

Tanya BenjaminCommittee

Member

Board of Directors


Leslie Crawley

Secoya Stuart-BainJasmine Jones Clement Taylor Tyrone Morris

Supervisory Committee

Credit Committee

Tanya BenjaminCommittee

Member

Sherman Bethel

Eunice JohnsonCommittee

Member

Maxine Pratt Committee

Member

Dave BeckfordCommittee

Member

Chairman Secretary

Chairman


Claudette Farrington Gladys Sweeting-Basden Sonia GilbertLolita Forde

Education Committee


Bryan Butler - Loans Manager InderaLunn-Accountant Chandalear Forbes - Marketing Mgr

CatherineKnowles - Loan Officer JoniStubbs - Loans Administrator JaysonLewis–Collections Officer

WaydrissaSeymour PatriceColebrookLolitaMarshall

MarkBastian - CEO

RenelBrownMember Services Rep.

Accounts Clerk Member Services Sup. Accounts Officer

GillianCurryFiling Clerk

DemetheraPoitier Operator

EstellMossCustodian

NicholaCartwrightOperator

STAFF

MichelleKingMember Services Rep.


Terms of Service

Board of Directors


BahamaIslandsResorts&CasinosCo-operativeCreditUnionLimited

Minutes of the 28th Annual General MeetingTHEME: “Changing To Meet Our Members Financial Goals”

1. CALL TO ORDER The28thAnnualGeneralMeeting(AGM)oftheBahamaIslandsResorts&CasinosCo-operativeCreditUnion

Limited(BIRCCCU)wascalledtoorderat6:00pmonMay28th,2014inthePrinceofWalesBallroomofAtlantisParadiseIsland,byChairmanHiltonBowleg.

2. PRAYER OF ST. FRANCIS OF ASSISI ThePrayerofSt.FrancisofAssisiwasledbySecretaryEstellaWalkes,andprayedbyall.

3. APPROVAL OF AGENDAAmotionfortheacceptanceoftheMeeting’sAgendawasmovedbyDennisRichardsonandsecondedbyLeslieCrawleyand passed unanimously.

4. WELCOME ChairmanBowlegwelcomedeveryoneonbehalfoftheBoardofDirectors,Committees,ManagementandStaff

ofBIRCCCUtoBIRCCCU’s28thAGMwithspecialwelcomeextendedtoMr.BertMullings,SeniorOfficerofTheDepartmentofCo-operativeDevelopmentandhisassociatesMr.EricGittensandMs.CarolineMoss;TheBahamas Co-operative League Limited Board Director, Mrs. Caroline Nairn and General Manager Stephanie Missick-Jones;aswellaspastandpresentmembersoftheBoardandCommittees.

ChairmanBowleginvitedalltotakethetimetoreviewtheStandingOrdersonpage4.

AmomentofsilencewascalledformemberswhowouldhavepassedawaysincethelastAGM.

5. GREETINGS

5.1. Department of Co-operative Development Mr. Bert Mullings brought greetings on behalf of the Department of Co-operative Development and bid all a good

eveningaddingitwasgoodtobehere.Mr.Mullingsstatedthatforthepastyearhewasseriouslyillandlearnedduringthattimenottotakelifeforgranted.Hewaspleased,however,tobebackwiththeCreditUnionfamily.

Mr.MullingscommendedtheCreditUnionandencouragedtheBoardandManagementtotakefurtherstepsinmeetingtheneedsofitsmembersinfindinggreaterwaystogivebackthroughinnovativestrategies.InclosingheextendedwishesofgoodsuccessattheAGM.

ChairmanBowlegthankedMr.Mullingsforhisremarksaddingitwasgoodtohavehimback.

5.2. The Bahamas Co-operative League Mrs. Nairn, a Director of the Board of the Bahamas Co-operative League, brought greetings on behalf of the

League.ShecommendedtheCreditUnionforachievinggrowthanditscontinuedservicetothemembership.Mrs. Nairn noted the theme of the AGM as an important strategy that should be a key strategy to strive for. Mrs. NairnadvisedthatitisimportantforaCreditUniontobeflexibletomeetthediverseneedsofitsmembers.

ShefurthernotedsomeoftheeconomicchallengesthatwillimpacttheCreditUnionsuchas • Theunacceptablyhighunemploymentrateatover15%, • increasingoperationalcosts, • theimplementationofVATat7.5%and • attemptsbyalltoattractthesamemarket


ShereportedthatthetransitiontosupervisionbyTheCentralBankisbeingprogressedwithconsultationsalready conducted in Nassau, Freeport and Abaco. Although no specific date has been set for thecompletionofthetransition,sheurgedtheCreditUniontopositionforthechangetosupervisionbytheBank Supervision Department of The Central Bank of The Bahamas.

Sheadvisedthatthroughcompliance,innovation,successionplanningandtraining,theCreditUnionwouldcontinuetoempoweranddevelopmembers.

Mrs. Nairn reminded all that 2014 is the 40th anniversary of Co-operatives in the Bahamas and encouraged

alltospreadthegoodnewsaboutthebenefitsofCo-operatives.

Inclosing,shecongratulatedtheCreditUnionnotonlyonbehalfoftheLeaguebutalsoonbehalfofSalemUnionBaptistChurchCo-operativeCreditUnion.

5.3. Minister of Agriculture, Marine Resources & Local Government, Honorable V. Alfred Gray

ViceChairWilliamsonwelcomedMinisterGraystatingitwasapleasuretohavehiminourmidst.

Minister Gray bid a pleasant good evening to everyone and apologized for his tardiness, explaining that hejustarrivedbackontheislandfromAbacoandcametothemeetingstraightfromtheairport.

Heextendedcongratulations to theCreditUnionon its28thanniversaryandstated therewere threethingshewouldliketoleavewiththisAGM:

• HenotedthatCreditUnionshavebecomebigbusinessintheBahamasandBIRCCCUhasbeenone that seems to be doing the right things according to the reports he gets on the various Credit Unions.FurtherheisverypleasedthatBIRCCCUisoneCreditUnionthatTheDepartmentofCo-operativeDevelopmenthasverylittleissueswith.

• He admired the positioning of the Credit Union to use its financial strengths to benefit itsmembers. Hewent on to say thatCreditUnions in this country havemore assets than theGovernmentoftheBahamaswithover329milliondollarsincombinedassetsandaretherefore,importanttotheeconomiclandscapeoftheBahamas.HeagaincongratulatedtheCreditUnionfor positioning itself for the betterment of its members and management should be given an applauseforsopositioningthisCreditUnion.

• MinisterGraystatedthatdespiteCreditUnionsbecomingapartoftheregulatoryregimeoftheCentralBank,hewantedalltoacceptthechangewithgreatexpectation.HestatedheissatisfiedwithwhatwassharedwithhimbytheGovernorofTheCentralBankandtheDepartmentofCo-operativeDevelopmentthatCreditUnionswillbebetterundertheCentralBank.MinisterGrayexplained that once assets reach a certain level, they should be regulated under the Central Bank as the Department of Co-operative Development does not have the capability to handle such levels.Henotedthatthis isaworldwidetrendtohaveCentralBanksregulateCreditUnions.However,MinisterGrayassuredthemeetingthathewillkeepakeeneyeonCreditUnionsandifthingsarenotbenefittingthemembersoftheCreditUnionshewillspeakoutonit.

• MinisterGray expressedhope that thebenefitsof theCreditUnionswillmultiply insteadofshrinkingandaddedthatCreditUnionshavehisandhisMinistriestotalsupport.Ifhowever,thereareanyhiccups,hewouldliketoknowwhatisgoingonandifthereareproblemshewillneverknowunless theCreditUnionormanagement tellshim, in the interestof theUnions’members. The Minister advised he has an open-door policy.

TheMinisterendedbystatingthathedoesnotliketospeakandleavehoweverhehasanotherengagementthathehastoattend.Hewishedalltohaveawonderfulsession.

ViceChairWilliamsonthankedtheMinisterfortakingtimeoutofhisbusyscheduletobringgreetings.


6. MINUTES FROM THE 27TH ANNUAL GENERAL MEETING

6.1 IvaleanHallmovedforthesuspensionofthereadingoftheminuteswhichwassecondedbyOwenCooperand passed unanimously.

6.2 APPROVAL OF MINUTES AmotionforacceptanceoftheminuteswasmovedbyCleomiAnderson,secondedbyMaryAdderleyand

passed unanimously.

7. REPORTS

7.1 BOARD REPORT AmotionforthesuspensionofthereadingoftheBoardReportwasmovedbyClementTaylor,secondedby

Charlene Taylor and passed unanimously. TheacceptanceoftheBoardReportwassecondedbyClementTaylorandpassedunanimously.

7.2 TREASURERS REPORT Onamotionfromthefloor,thesuspensionofthereadingoftheTreasurer’sreportwasmoved,secondedand

passed unanimously.

7.3 SUPERVISORY COMMITTEE REPORT NatashaTaylormovedforthesuspensionofthereadingoftheSupervisoryCommitteeReportwhichwas

secondedbyLeslieCrawleyandpassedunanimously. There being no questions or discussion, the Supervisory Report passed unanimously.

7.4 CREDIT COMMITTEE REPORT IvaleanHallmovedforthesuspensionofthereadingoftheCreditCommitteeReportwhichwasseconded

by Secoya Bain and passed unanimously. Therebeingnoquestionsordiscussion,theCreditCommitteeReportwaspassedunanimously.

7.5 EDUCATION COMMITTEE REPORT Maxine Pratt moved for the suspension of the reading of the Education Committee Report which was

seconded by Dave Beckford and passed unanimously. Therebeingnoquestionsordiscussion,theEducationCommitteeReportwaspassedunanimously.

8. RESOLUTIONS PresentationoftheResolutionswaspresentedbySecretaryEstellaWalkesasfollows:

Resolution #1 RESOLUTION FOR THE PAYMENT OF DIVIDENDS WHEREAS theauditedfinancialstatementsoftheBahamaIslandsResorts&CasinosCo-operativeCredit

Union (BIRCCCU)Limited for theyearendingDecember31,2013werepresentedandacceptedby thisAnnual General Meeting.

Theresolutionwaspassedunanimously.

BE IT RESOLVED that thisAnnualGeneralMeetingapprove thepaymentofaneightpercent (8%)dividendtoshareholdersontheirQualifyingSharesheldfortheyear2013;

BE IT FURTHER RESOLVED that calculations of these dividends be credited to the individual memberaccountsnotlaterthanJune30,2014.

Theresolutionwaspassedunanimously.


Resolution #2 RESOLUTION FOR THE APPOINTMENT OF AUDITORS BE IT RESOLVED that the Management Committee of the Bahama Islands Resorts and Casinos Co-operative

CreditUnion(BIRCCCU)Limitedbeallowedtochooseanauditingfirmtoconducttheauditforthefiscalyear2014.

Resolution#2wassecondedbyAngelaCulmer-Hinseyandpassedunanimously.

Resolution #3 PursuanttotheCo-operativeSocietiesRegulations68Reamendmentstobyelawsthatrequires“suchamendment

shall be made by a resolution of the members of the registered society at a General Meeting”.

TheBoardofDirectorsofTheBahamaIslandsResorts&CasinosCo-operativeCreditUnion(BIRCCCU)LimitedformerlyParadiseIslandResortandCasinoCo-operativeCreditUnion(PIRCCCU)LimitedseektoexpandourBondandchangeourNameandherebyputthefollowingResolutiontothemembership:

WhereasBahamaIslandsResortsandCasinosCo-operativeCreditUnionLimitedwasfoundedasParadiseIslandResortandCasinoCo-operativeCreditUnionLimited;

AndwhereasourbondwaschangedforOurCreditUniontoserveResortsworkersandtheirfamiliesthroughoutTheBahamas;

AndwhereasOurCreditnowwantstoofferourproductsandservicestoGovernmentandIndustryworkers;

Be it resolved that this 28th AGM desires The Board to seek approval from Our Regulator to expand our bond to embraceAllIndustriesandGovernmentworkersandtheirfamilies;

Andbeitfurtherresolvedthatournamebechangedto“BahamaIslandsCo-operativeCreditUnionLimited”withatradename“BIFinancialCo-operative”;

AndeffectivemarketingbeputinplacesoworkersinAllIndustriesandGovernmentareawareofthebenefitsofbecoming a member of BI Financial Co-operative.

8.1 CONCERNS FROM THE FLOOR ON RESOLUTION #3

8.1.1 Vice Chair Williamson asked members if there were any questions or matters they wanted discussed. on theresolution.

8.1.2 ViceChairWilliamsonexplainedthatthethreeobjectivesoftheresolutionwereto: • SeekapprovaltorequestanexpansionofourbondtoincludeGovernmentemployeesandemployeesof

other industries • ChangetheCreditUnion’snamebydeleting“ResortsandCasinos” • Adoptthetradingname“BIFinancialCo-operative.”

8.1.3 TreasurerRolleexplainedthatourCreditUnionneedsto increasemembershipviadiversificationinaneffort toincreasethebottom-line.HefurthernotedthatthehotelindustryhasitsdownturnsfromtimetotimethatadverselyaffectourCreditUnion.Weare therefore seeking toencouragemembership fromsecureorganizationsbutonlythose that offer irrevocable salary deductions.

8.1.4 AmemberexpressedconcernsofthechallengeofgettingthroughtotheCreditUnionnowandgettingassistancefrom staff and questionedwhether the current staffing can handle and keep-upwith addingmembership fromGovernment and other industries.


8.1.5 TreasurerRolleadvisedthatweareworkingtoresolveareasofweaknesses;andwouldbeaddingstaffasrequired.

8.1.6 MemberLarrySmithnotedthatheunderstandsdiversificationandlookingforgrowthtoincreaserevenuebutarewelookingforacertainamountofpeopleandaretherestrategiesinplacetoaccomplishthis.TreasurerRollerepliedthatwewillidentifytheindustrieswewanttoattractanddohaveagameplaninplace.

8.1.7 ShakeraRolleaskediftheCreditUnionlookedatopeninganotherofficeinthewesttoaccommodateemployeesofBahaMarasameanstoincreasegrowth.TreasurerRolleadvisedthattheCreditUnionhastargetedBahaMarandislookingforofficespaceclosetothedestinationtoservicethosepersons.

8.1.8 ShakeraRolleaskedifthebondisopentootherindustrieswilltheCreditUnionloseitsidentity.TreasurerRolleassured themembership that theBoard thought about this anddecided theCreditUnionwouldnot lose itsidentityadding it isnot the intention to loseour identityaswearestill inpursuitof tapping intootherhotelindustriessuchasBahaMar,Albany,ExumaandBiminiResorts.HoweveritisbecauseoftheneedtodiversitythattheCreditUnionisseekingothermarkets.

8.1.9 SherelSmithaskedifeffortsweremadetoreachouttootherhotelproperties.TreasurerRolleadvisedtheyarereaching out to other properties currently.

8.1.10 SherelSmithaskedwhether theCreditUnion shouldallow theefforts in reachingout tootherproperties topanoutbeforereachingouttootherindustriesandGovernment.HowevershenotedthatthehotelindustryisseasonalbutquestionedwhetherbyopeningthebondourCreditUnionwouldnot lose its identity.TreasurerRolleadvisedweareworkingcloselywithBahaMarandonceitisonstreamtheCreditUnionwillgainthosemembers.However,experiencehastaughtusthathotelsarenotenoughtomoveandexpandourCreditUnionhencetheneedtolookatothermarketssuchastheGovernmentworkersandworkersinotherindustries.

8.1.11MarcusCooperassertedthateveryoneunderstandsgrowthanddiversityhowevertheconcern is the increaseexposure andhe pointed out the auditors reported that comprehensive income fell by 80% in 2013.He alsopointedoutthatemployeesinprivateindustriesalsogetfiredandaddedsmallergroupsareeasiertocontrolandinvestigate.FurtherMr.Coopernotedopeningtoabroaderbasewouldincreasesrisk.TreasurerRollerepliedthatwewishtomovetoincludeotherindustriesbecauseofthepointsjustraisedremindingallofwhathappenedin2008whentheeconomydippedand2000memberslosttheirjobs.IngoingaftermoresecuremarketssuchastheGovernmentandemployeeswithirrevocablesalarydeductionswillbringmoresecurityforourCreditUnion.

8.1.12 Amemberfeltthatbydropping“ResortsandCasinos”fromournamewewill loseouridentity.ThememberalsoaddedthattheycantellfromlookingatotherfinancialinstitutionsthatGovernmentworkersonlywanttoborrowadding,theyshouldwaittoseeifBahaMarandtheexpansionatAlbanywouldbringinenoughmemberstomaintainsteadygrowthofourCreditUnion.TreasurerRolleadvisedtheyaretryingtostrikeabalancebytargetingGovernmentworkerswithirrevocablesalarydeductionswhoarelesslikelytolosetheirjobsversusafragilehotelindustry.FurthertheydonotknowtheeffectBahaMarwillhaveonAtlantis.

8.1.13AmembermentionedthatwearelookingforgrowthandlookingatourfinancialsourCreditUnionisalwaysprogressingbutmaybenotasrapidlyaswewouldlike.ThemembercautionedthattheGovernmenthasalotofemployeeswhoareonlyactingortemporaryandurgedtheneedtostrategizeandtocomeupwithagoodmarketingplan.Furtherthemembercautionedtheneedforriskmanagementandtobeverycarefulhowwestep intoothermarkets remindingall that theunemployment rate is at 15%.TreasurerRolle advised that theCreditUnionwillnotbelookingattemporaryworkersbutonlypermanentworkers.HealsoreiteratedthathotelworkersposeagreaterriskthanGovernmentworkersandtheCreditUnionwillhaveotherindustriestorelyon.TreasurerRolleaskedmemberstolookattheprojectedgrowthovertheyearswiththedramaticdeclinein2013;to turn this around there is a need for an increase in membership.


8.1.14ShakeraRolleaskedwhatwouldbethereasonforGovernmentemployeestojointhisCreditUnionoverPublicWorkers.TreasurerRollestatedwewillbecompetingwiththeotherCreditUnion.

8.1.15 Elvis Demeritte stated if you fail to plan you plan to fail and he thinks it’s a good idea to open the bond. Further, the institutionneedsgrowthandsecurityandthehotel industry isunstable.Henotedthatevenbanksaren’tstableanymoreandtheyneedtotakeachanceonothermarkets.Headdedtheyweneedtograbthemnow.

A membership vote on the motion for the acceptance of Resolution #3waspassedbythemajorityofmembersapprovingwithsix(6)nays

9. AUDITORS REPORT

9.1 Suspensionofreadingparagraphs2and3intheIndependentAuditorsReportwasmovedbyIvaleanHall.Itwassecondedandpassedunanimously.

9.2 JamesGomez,CharteredAccountantfromBakerTillyGomezpresentedtheAuditorsOpinionstatingthefollowing: “In our opinion the financial statements present fairly in all material respects, the financial position of Bahama Islands Resorts and Casinos Co-operative Credit Union Limited (the “Credit Union) as of December 31, 2013 and its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards.

9.3 LarrySmithaskedwherehewouldbeabletolookatthedetailsofsomeoftheitemsinthereport.Mr.Gomez

advisedthatdetailsof lineitemswillbefoundasoutlinedinbracketsnexttotheitemintheNotestotheFinancialStatementsatthebackofthereport.E.g.,Investmentproperty(Note10)onpage33,breakdownisfound on page 51 Item #10.

9.4 Mr.GomezadvisedthattheSaundersBeachpropertyisbeingaccruedatcostinaccordancewithIAS40–Investment Property as stated on page 40 of AGM booklet.

9.5 Mr.Gomezwent throughtheStatementofFinancialPositionmakingnotesof the itemsthat increasedordecreasedbetweenyear-end2012andyear-end2013andnotingthatdetailsofeachitemwereintheNotestothe Financial Statements.

9.6 LarrySmithaskedtheAuditor,ifheasanindependentauditor,providefinancialrecommendations.Mr.Gomezadvised that as part of his professional service he has prepared a Management Letter based on observations fromtheauditthatprovidesmanagementwithimplications,concerns,recommendationsandpracticesbutitis not included in the Financial Statements.

9.7 E.J.Cooperaskedwhatisthecut-offpointontheloanamountamembercangetashenotedonememberinthereportwhoseindebtednesstotheCreditUnionexceeds5%oftheUnion’sequity.

– Mr. Gomez advised that the loan in question is secure and is in good standing.

9.8 Mr.Cooperaskedwhetherthereareanyotherloansthatgobeyond5%.Mr.Gomezrespondedthatnonethatheisawareof.

9.9 Amotion for theacceptanceof theAuditorsReportwasmovedbyClementTaylorsecondedbyTerrenceCartwrightandpassedunanimously.


10. ELECTIONS ChairmanBowleg tooktheopportunity to thankViceChairmanBarbaraWilliamsonforher timeofservice

and support adding she has been an inspiration and encouraged her to stick around and continue to support the CreditUnion.

ViceChairmanWilliamsonthankedallfortheirsupportthroughouttheyearsandstatedshewillstillbehere.

ThemeetingwasthenturnedovertoAsst.TreasurerCampbelltoconducttheelections. TheAsst.Treasurerextended greetings to all and stated theNominations Committeemet andwere pleasedwith the caliber ofapplicants received.

10.1 Board of Directors Asst.TreasurerCampbelladvisedthereweretwo(2)vacanciesontheBoardofDirectorswithfive(5)applicants

allmeetingthecriteria(BarbaraWilliamsonandEstellaWalkesdemittedtheirseats)asfollows:

1. EstellaWalkes 2. Angela Culmer-Hinsey 3. Larry Smith 4. Dennis Richardson 5. Tyrone “Rock” Morris

Eachnomineewasgiventheopportunitytoaddressthemembership. Amotion to closenominationswasmovedbyClementTaylor and secondedbyDonFernander andpassed

unanimously.

Asst.TreasurerCampbelladvisedthatonlytwo(2)nameswereallowedontheballotandeachmemberistodroponlyone(1)ballotintothebox.Memberswerealsoaskedtofoldtheirballotanddisplaythestampedsignatureon the back to the auditor before depositing them into the box.

BeforevoteswerecollectedtheAuditor,Mr.Gomezopenedeachboxsoallcouldseetheboxeswereempty.Mr.Gomezstateditisgoodthatallcanbeapoliceinthevotingexercise;alsoheadvisedthatifhecallsonlyonenameitmeansonlyonenamewasplacedontheballot.

10.1.1 VOTES:

Nominees Votes Received Elected EstellaWalkes 48 a Angela Culmer-Hinsey 65 a Larry Smith 29 Dennis Richardson 21 Tyrone “Rock” Morris 35

Asst.TreasurerCampbellwelcomedandcongratulatedAngelaCulmer-Hinseyonherfirst-timeappointmentto theBoardofDirectorsaswellascongratulations toreturningDirectorEstellaWalkes. ThenewlyelectedmembersoftheBoardwereaskedtotakeaseatatthepodium.

AmotiontodestroytheballotswasmovedbyBarbaraWilliamson,secondedbyNathanielWilliamsandpassedunanimously.


10.2 Supervisory Committee Asst.TreasurerCampbelladvisedthatthereweretwo(2)vacanciesontheSupervisoryCommitteewiththree(3)

applicantsallmeetingthecriteriaasfollows: 1. Leon E. Lundy 2. SoniaPatriceBurrows 3. JasmineA.Jones ShermanBethelstoodandaskedwhethernominationsfortheSupervisoryCommitteecanbereceivedfromthe

floor.Discussionensued.

Asamatteroforder,Mr.Mullings,DepartmentofCo-operativeDevelopmentstoodandclarifiedtheprocessforelectionsstatingthattherearefirstnominationsfromtheCommitteeandnominationsshouldthenbetakenfromthefloor.IntheinstanceoftheBoardithasalreadypassed,butsincethereisamotiontotakenominationsfromtheflooritshouldtakeplaceandhastobeopen.AsfarastheChairisconcernedyouaresupposetotakenominationsfromthefloor.

Asst. Treasurer Campbell thanked Mr. Mullings noting she stands to be corrected and therefore opened to accept nominationsfromthefloor.Thefollowingmemberswerenominatedfromthefloor:

10.2.1 Sherman Bethel nominated Tyrone“Rock”MorrisandwassecondedbyDennisRichardson.

10.2.2SecoyaBain-StuartnominatedDennisRichardsonandwassecondedbyRuthNeily

AmotionfornominationstobeclosedwasmovedbyBarbaraWilliamson,secondedbyDonFernanderandpassed unanimously.

Eachnomineewasgiventheopportunitytoaddressthemembership.OnlyJasmineJones,TyroneMorrisandDennisRichardsonaddressedthemembershipasLeonLundyandSoniaBurrowswereabsent.

Asst.TreasurerCampbelladvisedthatthereisonlyonelinedrawnontheballothoweverallowanceshavebeenmadetoaccepttwo(2)namesontheballotwiththesecondnamewrittenundertheline.Memberswereonceagainaskedtoshowthestampedsignatureonthebackoftheballotbeforeitisdroppedinthebox.Memberswerealsodirectedtodroponlyoneballotpermemberintothebox.

10.2.3 VOTES:

Nominees Votes Received Elected Leon E. Lundy 1 SoniaPatriceBurrows 0 JasmineA.Jones 63 a Tyrone “Rock” Morris 46 a Dennis Richardson 31

Asst.TreasurerCampbellextendedcongratulationstoJasmineA.JonesandTyrone“Rock”MorrisonbehalfoftheBoardof Directors for being elected to the Supervisory Committee.

AmotiontodestroytheballotswasmovedbyIvaleanHall,secondedbyShermanBethelandpassedunanimously.


10.3 Credit Committee Asst.TreasurerCampbelladvisedthattherewerethree(3)vacanciesontheCreditCommitteewith

five(5)applicantsallmeetingthecriteriaasfollows:

1. Dave Beckford 2. CephasS.Bowe 3. Leon Lundy 4. EuniceJohnson 5. Maxine Pratt

Amotionfornominationsfromthefloorwasmetwithsilence.AmotiontoclosenominationswasmovedbyBarbaraWilliamson,secondedbyClementTaylorandpassedunanimously.

Eachnomineewasgiventheopportunitytoaddressthemembership.

10.3.1 VOTES:

Nominees Votes Received Elected Dave Beckford 54 a CephasS.Bowe 33 Leon Lundy 26 EuniceJohnson 38 a Maxine Pratt 44 a

Asst.TreasurerCampbellextendedcongratulations toDaveBeckfordandEunice Johnsonontheirelection to the Credit Committee and added she hoped to see them during the remainder of the year workinghardasever.

AmotiontodestroytheballotswasmovedbyClementTaylor,secondedbyBarbaraWilliamsonandpassed unanimously.

11. A.O.B

11.1 ChandalearForbes,MarketingManagerwasgiventheopportunitytospeaktothemembershiponthehealth insuranceplan. Ms.Forbes remindedMembers that theCreditUnionhas ahistoryofprovidinggoodproducts.SomehowevermaynotbeawarethattheCreditUnionnowhasavailablea health insurance program through BAF at extremely affordable rates. She advised the rates are less than$35.00perweekandincludesmedical,somedentalandsomevisionandalifeinsurancepolicyof$15,000.00.SheadvisedfurtherthattheplanisapartofthelargestnetworkintheUnitedStates.

Ms. Forbes advisedMembers present to spread the word to otherMembers andmade note thatapplicationsareavailablealongwithanyfurtherinformationtheymayneed.

12. ADJOURNMENT AmotionforadjournmentwasmovedbyBarbaraWilliamsonandsecondedbyNathanielWilliamson.

The28thAnnualGeneralMeetingofBIRCCCUwasadjournedat8:47pm.


BahamaIslandsCo-operativeCreditUnionLimited

Minutes of Special Call Meeting 2015BudgetReviewDate:Saturday,September6th,2014

Time:10:00amto10:30amPlace:TheGroundsofBICCU(atthebackofthebuilding)

MEMBERS OF THE BOARD PRESENTHiltonBowleg Chairman BruceDelancey Vice ChairmanEstellaWalkes SecretaryBarryRolle TreasurerAngelaCulmer-Hinsey Assistant Treasurer

NOTE:RosemaryCampbell,DirectoroftheBoardarrivedatthemeetingat10:30am

CALL TO ORDERTheSpecialCallMeetingwascalledtoorderbyHiltonBowleg,ChairmanoftheBoardat10:00am.

PRAYERTheprayerofSt.FrancisofAssisiasledbyMr.FrankDaviswasrecitedbyall.

1. STANDING ORDERS ChairmanBowlegaskedalltotakeamomenttoreviewtheStandingOrderspage3ofthehandout.

2. WELCOME ChairmanBowlegwelcomedall totheSpecialCallMeetingwithawarmwelcometoMr.Mullings, fromthe

Department of Co-operatives, Management, Staff and all Shareholders/Members present thanking everyone for coming out.

TheChairmanadvisedthemeetingwascalledtopresentforapproval,thecreditunionsRevised2015budget.HealsoadvisedthebudgetwasnotpresentedinitsentiretyattheAGMpartlyduetotheexpectedopenbond,whichallowsthecredituniontoseekmembershipoutsideofthehotelindustry.Italsoallowedtimetofactorinthe open bond in the budget.

ChairmanBowlegintroducedMr.MarkBastianadvisingallthatwitheffectasofMonday(September8th,2014),Mr.BastianwillbethenewCEOofBICCU.CEOBastianwasthencalledtopresenttheRevised2015Budget.

3. REVISED 2015 BUDGET CEOBastianreportedthatinlookingatthemainlines,the2015budgetwillnotbeasaggressiveasinprevious

years.Thefollowinglineitemswerehighlighted:3.1. InterestonMembersLoans–budgetedat$2,301,226withavarianceof$125,4263.2. LoanProcessingFee–budgetedat$60,030withavarianceof($11,845)3.3. DebitCardRevenue–budgetedat$245,446withavarianceof$133,5263.4. TotalIncome–budgetedat$3,312,273withavarianceof$282,3123.5. Salaries–budgetedat$438,674avarianceof$50,4753.6. DebitCardExpenses–budgetedat$256,311avarianceof($1,809)3.7. TotalExpenses–budgetedat$2,951,024avarianceof$345,5483.8. NetIncome–budgetedat$361,249avarianceof($63,236)downfrom2014.


Comments3.9. Anexpected10%growthintheLoanPortfoliowithastartingpointof18.2milliondollarasofJanuary1st(growth

factorsinloanpayments&newloanscomingin).

3.10. Mainline2015LoanProcessingfeesalsoaffectedby10%growth

3.11. Debitcardrevenueisexpectedtoaffectthebudgethoweveritisnotfullyoperatingbutisexpectedtobeonlinein2015.

3.12. CEOBastiannotedeverymember,whethertheyhaveacardornot,willbecharged$2.00monthlyfordebitcardfee.Hefurtherstatedtheyareexpecting100%debitcardinvolvementfromthemembership.

3.13. AsthedebitcardfacilityisbeingprocessedviaapartnershipwithFidelityitwillincura$1.00FidelityATMchargeanda$3.00chargeforuseofanyotherATMsoutsideofFidelity.A0.50¢chargewillalsobeincurredforvendorpurchases.

3.14. TheCEOstatedthatthedebitcardmaynotbeprofitableduringthefirstyear,butisexpectedtobeprofitableinthe pursuing years.

3.15. In preparing the budget, the CEO advised that on several lines, they looked at the actual numbers for 2011 thru 2013 and realized the budgeted amounts for those periods may have been too aggressive. Therefore, the revised 2015budgetwasmoreinlinewithprioryearactualamountsascomparedtopriorbudgetedamounts.

3.16. The budgeted amount for bad debts factors in the open bond and the related impact on delinquent accounts.

3.17. Otherincomeshowsanincreasedamount,aswewillattempttobemoreaggressiveinourrecoveryeffortsrelatingtowrittenoffaccounts.

4. QUESTIONS FROM THE FLOOR

4.1. Mr.OliverHutchinsonstatedhewasnothereforthelaunchandwasnotawareofthe$2.00debitcardfeetobechargedtoeachmember.ChairmanBowlegadvisedthefeewasapprovedattheAGM.

4.2. Mr.Hutchinsonqueriedwhetherthedecreaseinfixeddepositinterestswascommunicatedtomembers.Healsocounseled that members should be advised of decreases in their CD interest rates. Treasurer Rolle responded byadvisingthedecreaseonlyaffectedfixeddeposits thatrolled-overat thenewratehowever;TreasurerRolleapologized for notice not being sent to members.

BryanButler,LoansManagerinformedallthatincludedoneachCertificateofDepositisanotethatstatesifthecreditunionisnotnotifiedotherwisebythememberatthematurityoftheirfixeddeposit,thedepositwillroll-over at the current interest rate. Treasurer Rolle added this is standard practice.

4.3. Mr.Hutchinson requesteddetailsonMiscellaneousExpensesqueryingwhy itwas increased from$10,000 to$25,000.Mr.HutchinsonsuggestedMiscellaneousExpensebeingkeptataminimumnotincreasedasitisawayof misusing funds.

CEOBastianadvisedtheamountwassetafterlookingattheactualexpenseintheyears2011–2013.Treasurer

Rolle further advised they are not in a position at this time to give specifics on theMiscellaneous Expenseshowever;theexpensewillberecordedindetailsandmadeavailableforallmembers.

TreasurerRollefurtheraddedthey(Board/Management)donotmisusetheMiscellaneousExpensesoranyotherexpense.


4.4. Mr.Hutchinsonquestionedwhythedebitcardchargesseemveryaggressivehoweverhestated,itseemsmembersarehappywithwhatwaspresentedatthespecialevent.Mr.HutchinsonfurtherstatedFINCOintroducedasimilarservicefeeforholdinganaccountbutemphasizedthatwearenotbanksandhedoesnot likebeingchargedforaservicehedoesnotwant.

CEOBastian advised a total of 99members signed-up to receive their debit cards at the eventwithmanymoresigning-upsince.Heremindedallthatthecardsarestillnotfullyoperationalduetosoftwareissuesthatinternallyhavetobeworkedout.CEOBastianadviseddebitcardfeeswillbechargedin2015.

Treasurer Rolle advised charges placed on the debit cards are purely economics.

4.5. Mr.TyroneMorrisstatedifwe(themembers)agreedtothe$2.00debitcardfeethatistheruleandheaddedthechargesareprettyconsistentintheindustry.Theonlydifficultyhehasisonebeingchargediftheyhaveacardornot.However,hecanappreciatethatitwasagreedto.

4.6. Mr.Hutchinsonadvisedanothercreditunionhasacardwithnochargeswhetherthiswillcontinuedowntheroadhewasnotsure-Mr.DavisadvisedthecreditunionMr.HutchinsonisreferringtoisTeachersCreditUnionhowever,thecardtheyofferisnotaninternationalcard,itcanonlybeusedlocally.WhereastheirdebitcardisaninternationalcardwithaVISAlicensewhichencompasseslicensefees.

Motion to Accept Revised 2015 Budget ChairmanBowlegmademotionfortheacceptanceoftheRevised2015Budget. Themotionwasmovedby

Sherman Bethel, seconded by Alistair Delancey and carried unanimously by all members present.

5. CLOSING REMARKS ChairmanBowlegtooktheopportunitytothankMr.FrankDavisforhistimeanddedicationtoBICCU.He

statedMr.Davistrulymadeadifferenceintheofficeandwillcontinuetomakeadifference.TheChairmanadvisedMr.Davishehasalottoofferandhewillcontinuetodrawfromhim.FromthebottomofhishearttheChairman thanked Mr. Davis for his help to him and the Board.

Mr. Davis thanked the Chairman for the favorable remarks stating his appreciation on behalf of his family as wellashimself.Mr.DavissaidhistimeatBICCUhasbeenagoodexperienceandwiththepassingofftoMarkBastian,heknowsthecreditunionwillgetbetterandbetter.Hisexperiencehasbeenoneofbothchallengesand blessings and he thanked the Board for the appointment.

6. ADJOURNMENT MotionfortheadjournmentoftheSpecialCallMeetingwasmovedbyJerrySmithandsecondedbyTyrone

Morris.Therebeingnofurtherbusinessthemeetingadjournedat10:30am.

Signature WeherebycertifythattheforegoingisatruecopyoftheminutesanddeliberationsoftheSpecialCallMeeting

held on the 6th of September, 2014.


ANNUALGENERALMEETINGBOARD OF DIRECTORS’ REPORT

May2014-April2015

The Bahamian Economy

AccordingtoTheInternationalMonetaryFundasatNovember,2014theBahamas’economywasestimatedtohavegrownby1.3%fortheyear.Thiswasapositiveimprovementoverthe0.7%growthin2013.Thefiscaldeficithoweverwidenedforthefirstsevenmonthsofthefiscalyear2014/15,astheuptickinrevenuewasoutstrippedbygrowthinexpenditure.TheunemploymentlevelinNewProvidenceremainedatahighlevel,asthejoblessrateasatNovember30,2014wasrecordedat16%.WiththedelayinBahaMar’sopeningitisbelievedthatevenhigherunemploymentlevels are being recorded at the present time. Expansion of Our Bond

Atthe28thAnnualGeneralMeetinginMay2014,theBoardofDirectors(throughResolution#3)soughtapprovalofthemembershiptoexpandtheexistingbondwhichembracedmemberswhoareemployeesofresortsandcasinosoperationsintheBahamasandthespouses,children,parentsandsiblingsofthoseemployees.ThebondalsoallowedfortheinclusionofmembersandformermembersofTheQueensCollegeCo-operativeCreditUnionLimited.TheproposalmadeintheResolution#3wastoexpandthebondtoembraceallindustries,includingGovernmentworkersand not be limited to the hotel industry. The proposal did not envision a change in requiring salary deductions for the repayment of loans.

The Resolution also sought the members’ approval to change the credit union’s name to “Bahama Islands Co-operativeCreditUnionLimited”withatradename“BIFinancialCo-operative”.ItwasapprovedattheAGMandfurtherapprovalwassoughtfromourRegulator,theDepartmentofCo-operativeDevelopmentattheMinistryofAgriculture & Marine Resources.

ByletterreceivedfromtheDirectorofSocieties,theexpansionofthebondandthenamechangewasapproved.OnAugust20th,2014,byaCertificateofNameChange,ournamewasofficiallychangedto“BahamaIslandsCo-operativeCreditUnionLimited”.TheDirectordidnotapprovethetradenameinclusion,ashethoughtanyrebrandingofthatnaturewouldbebettersuitedifithadthe“overwhelmingsupportandparticipationoftheentiresector”.

BICCUhasmadechangestothephysicalsignageatthefrontofthebuildingtoincorporatethenamechangeandisnowinvolvedinarebrandingexercise.Therebrandingexerciseisinclusive,butnotlimitedtothechangingofalltheofficestationery,changingthewebsite,changingtheinfo-commercialonthesmartTVinthelobby,changingthelogo,changingthesignageandcreatingnewadvertisementstointroducethenewnameandexpandedbond. Membership

During the year2014,BICCUgained threehundredand seventy two (372)newmembersnet.Thiswas a 7.7%increaseinourmembershipfortheyearandwasgreaterthanthe3.5%increaseinmembershipduringtheyear2013.

TheincreaseinmembershipwasinpartduetocontinuedeffortstostrengthenourexpansioninExuma(SandalsandGrandIsles)pluspropertiessuchasAlbany,Breezes,ComfortSuites,MeliaandSandalsinNassau.Thestrategyofon-sitevisitsbythemarketingandloansdepartmentresultedinanexplosivegrowthinnewmemberssigningupforloans.FromJanuary2014toApril2015themembershipincreasedby441forthosepersonswhowereabletosignupasmembersandbeapartoftheNewMemberLoanpromotion.Thosepersonsaccountedforonemillionthreehundredandsixtyfourthousandandthreehundreddollars($1,364,300)inloanswritten.


InAugustoflastyear,aliveremotewasheldwhichincludedthelaunchofthedebitcardandgrouphealthinsurance.InOctober,athreedayexhibitionwasheldatthemall.Botheventsaidedintheincreaseofourmembershipnumbers. AttheendofDecember,2014themembershipimprovedto5,208.EverymemberofBICCUisencouragedtoinvitenon-members to become members

Membership Growth

• IncreasingmembershipfromFamilyIslandResorts • Boostingmembership from theNewProvidenceResorts suchas theAtlantisResorts,BahaMar,

Sandals, Breezes and Albany properties. • ApprovalgrantedbyMinistryofFinancefortheacceptanceofsalarydeductionsfromGovernment

workers • Approval for the acceptance of salary deductions has been received from Water & Sewerage,

Enviroscape and several other private and quasi-government institutions.

Better Delivery of Service

• Wewillcontinuesettinguparemoteofficewherewetakelaptops/printer/scannertothevarioushotelpropertiesinNassauandtheFamilyIslands.ThisaffordsustheopportunitytograntBICCUservices(savings/loans) tonew/potentialmemberson the spot.Wehave taken theproactive approach inreaching out to our share members’ needs by taking our services to them.

• Wealsowishtotakeadvantageofmembershipgrowthbyhiringagentstodeliverourservicesatoverseas locations.

Marketing

Wehave steppedupourmarketingefforts andhaveengaged the servicesof anoutsideMarketingCompany,TheCounselorsLimitedtoaidinthepromotionofourCreditUnion.WehavealsoengagedthehelpofHopeCurryand


Claudette“Cookie”Allenstoassistwiththecreationandproductionofradioadvertisementstoaidinthepromotionoftherebrandednameandnewproducts.Goingforward,sharememberswillcontinuetoseeandhearmoreaboutBICCUandourlistofservicesthroughthelocalprint/radiomediaandTVstations.

Loans

FortheyearendedDecember31,2014,theCreditUniongrantedapproximatelytwothousandfivehundredandfiftysixloans(2,556)totalingelevenmillionfivehundredandeightysixthousandeighthundredandeightyfivedollars($11,586,885).Theloanspayoff/paymentsfortheyeartotaledapproximatelyninemillionfourhundredandseventyfivethousandfivehundredandninedollars($9,475,509).FortheyearendingDecember31,2014,theloanportfoliohadanetincreaseoftwomilliononehundredandeleventhousandthreehundredandseventysix($2,111,376).

Breakdown is as follows:• TotalDollarsValueofLoansGranted….. $11,586,885• Less–LoansPayoff/payments….……… $9,475,509• OverallIncrease……………………….. $2,111,376

Our total loans portfolio as atDecember 31, 2013, totaled $16,060,165 compared toDecember 31, 2014 total of$18,171,541whichisanincreaseasstatedaboveof$2,111,376or13.15%.


Loan Products Update

Three (3) Tier Products TheThree(3)TierLoanProductoffersexposureasfollows:

THREE TEIR EXPOSURES SAVINGS ANNUAL SALARY MAXIMUM EXPOSURE TIER1$500.00-$3,000.00$30,000.00ORLESS $5,000.00TIER2$3,000.00-$5,000.00$30,000.00–$40,000.00 $10,000.00(approx3:1)TIER3MORETHAN$5,000 OVER$40,000.00$15,000.00(max3:1)

Thisproductcontinuestobeahitwithourmemberswhoareallowedahigherexposureduetohavingcertainsavingsandsalarylevelsthatarehigherthanthenormalexposurelevels.Eachmonthapproximatelytwenty(20)ofthesetypeloansareapproved.Thisproductstillrequiresanirrevocablesalarydeductionandaminimumof$100.00savingspermonth in order for a member to qualify.

New Member Loan Product

ANewMemberLoanpromotionwasre-implementedinFebruary2014,tomeettheneedsofthosenewmemberswantingtoqualifyforaloanatthetimeofmembership,ratherthanwaitingsix(6)monthsasperourLendingGuidelines.ThisproductcontinuestoseeresultsandisthemajorcauseofnewmembersapplyingformembershipintoBICCU.

Compliance and Transition to Central Bank Supervision

Duringtheperiodunderreview,thetransitionprocesstotheCentralBankofTheBahamasSupervisionsawacontinuedfocusoncompletingtheNewCreditUnionLegislationandobtainingfeedbackfromstakeholdersintheCo-operativeSectorandtheGeneralPublicontheproposedNewCo-operativeLegislation.

The legislationwas recentlyapprovedbybothParliamentand theSenateandwillbeenactedas soonas ithasbeenofficiallysigned.

Afollow-uptothe2012/2013“reportofinspection”wasconductedbytheDepartmentofCo-operativeDevelopmentinDecember2014.ThisinspectionwasconductedprimarilybypersonnelfromtheCentralBankofTheBahamaswithsomesupervisionfromtheDepartment.Itwasanothersteptomakethetransitionassmoothaspossible.

Training

Board of DirectorsJune2014 CaribbeanConfederationofCreditUnionsConference(Nassau)Nov. 2014 Bahamas Co-operative League Anti-Money Laundering Training Dec. 2014 Bahamas Co-operative League Value Added Tax TrainingMar. 2015 Bahamas Co-operative League Co-operative Leadership RetreatApr.2015 CaribbeanConfederationofCreditUnionsAML/CFTTraining(Miami)

Supervisory & Credit Committee June2014 CaribbeanConfederationofCreditUnionsConference(Nassau)Nov. 2014 Bahamas Co-operative League Anti-Money Laundering Training Nov. 2014 Bahamas Co-operative League Supervisory Committee TrainingDec. 2014 Bahamas Co-operative League Value Added Tax TrainingMar. 2015 Bahamas Co-operative League Co-operative Leadership Retreat


Education Committee

June 2014 Caribbean Confederation of Credit Unions Conference (Nassau)

StaffJune2014 CaribbeanConfederationofCreditUnionsConference(Nassau)Oct. 2014 Bahamas Co-operative League Anti-Money Laundering Training Dec. 2014 Bahamas Co-operative League Value Added Tax TrainingJan.2015 BahamasCo-operativeLeagueCRUISETrainingFeb. 2015 Bahamas Co-operative League Customer Services TrainingMar. 2015 Bahamas Co-operative League Co-operative Leadership Retreat

Debit Card Program

TheDebitCardprogramwasintroducedtothemembershipofthecreditunionviaalauncheventheldinAugust2014onthegroundsofthecreditunion.Onthatdate,eighty(87)personsweresignedupandcardsissuedtothem.AttheendofDecember,2014thenumberofcardsissuedtomembersgrewtoacountoffivehundredandseventysix(576)andthengrewtoninehundredandfiftysix(956)attheendofMarch,2015.FrominceptiontotheendofMarch,2015thecreditunionsawitsmembers’grosscardholdersalesandcashadvancestotalinexcessof$300,000.FromDecember1,2014throughtheendofMarch,2015membersusedthecardatanaverageapproximatingsixhundredandfifty(650)transactionsamonth.

Membersthathavesignedupandreceivedtheirdebitcardshaverecognizedthebenefitsthatthecardoffers.Someofthosebenefitsareasfollows:

• ThecardalthoughassociatedwithFidelityBankisabletobeusedatanyATMthathasaVISAlabel. • Itisaninternationalcardandhasbeenusedoverseasbythemembersoverelevenhundred(1,100)times

for ATM and point of sales transactions from December 1, 2014 to the end of March 31, 2015. • ATMtransactioncostsourminimalat$1.00and$3.00respectively,atFidelityandotherATMs.Thecost

ofeachpointofsaletransactionisonly$.50perpurchase. • Membersno longerhave to come in theoffice topay the tendollar ($10.00) fee currently charged for

earlywithdrawalfromthemembers’savingsaccountifmemberdecidestoallocatethenormalwithdrawalamount of their salary deduction to the debit card account.

• Non-ScotiabankcustomersnowhavetopaybankfeeswhencashingBICCUchequesatScotia.Debitcardeliminates the need to pay that bank fee.

• Themonthlyfeechargeof$2.00comparesfavorablytotheannualfeeschargedbyotherinstitutionsfortheuse of debit and credit cards.

TheBoardofDirectorsunderstandstheconcernsraisedbysomemembersinrelationtothemonthly$2.00fee,butwishestoexpressthatitwaspreviouslyapprovedbythemembers.Itisanecessaryfeethatwillassistinprovidingaservicethatwillbebeneficialtoallmembers.Aswechangetobetterserveyou,ourmembers,thecardisaproductthathelpstodoso,bycuttingdownontheoverflowofmemberscominginforwithdrawalchequesandreducingtheadministrativecosttodoso.Thefeeitself,aidsincoveringthecostofprovidingthatbenefit.

Thank You

TheBoardtakesthisopportunitytothankthemembershipfortheopportunitytoserveandfortheircontinuedconfidenceand support.


BahamaIslandsCo-operativeCreditUnionLimited

TREASURER’S REPORT2014

TheTreasureroftheBahamaIslandsCo-operativeCreditUnion(BICCU)isproudtoreportthat2014hasbeenanotheryearwhereourcreditunionhasexperiencedsignificantgrowth inassets.Our totalassetshavepassed the$28millionmilestoneaftera14%growthover2014to$28,765,426.

Ourmembers’depositsarenowinexcessof$23Millionat$23,501,601reflectinganincreaseof16.38%incomparisonto2013.OurmembershavetakenadvantageoftheexcellentinterestratesofferedbyBICCUandtheirloyaltyandtrustinushascontributedgreatlytoourcontinuousgrowth.


Ournetloansporfolioincreasedby14.68%in2014to$18,022,458.Ourultimategoalistohaveourloansportfolioequalto70%-80%oftotalassets-atyearenditwas63%.

Overview BICCUisperformingverywellinthisunpredictableeconomicenvironment.Wearemovingsafelyandsteadilytowardsourgoalsoffinancialexcellenceasacompanyandfinancialfreedomforallofourmembers. OnamonthlybasisthemanagementteamreviewsourperformanceusingtheWorldCouncilofCreditUnionsuggestedcredit union monitoring tool “The PEARLS Standard of Excellence”. The goal is ongoing - to meet and even exceed the standard. Attheendofthe2014auditallofBICCU’sreserveswerebroughtinline.Liquidityreservesarenow10%ofdepositsandstatutoryreservesarenow10%ofassets. The way forward… AswemonitorourselvesovertheyearswehavemadesteadyimprovementswhichhavealigneduswithmostofthePEARLSratios.Wehavethreemajorfocusareasnamely–theincreaseofourmemberportfolioduetotheopenbond,therenovatingofourofficetoaccommodatethesameandincreasingtheloansportfolio.

Theopenbondwillcontributetotheincreaseofthemembershipandloanportfoliosbutinanefforttoaccommodatethisgrowth,ourphysicalstructurehastobeimproved.

Ourloansandmarketingdepartmentsarepoisedtoincreaseour loansportfoliobydiversifyingtheportfoliowithamyriadofloanproducts.NewmemberswillbecateredtointheseeffortswhichwillresultinbringingusinlinewiththePEARLSratios-inparticulartheloanandmembershipgrowthareas.

BICCUwillalwaystakeadvantageofthe“wavesofchangeandoceansofopportunity”.

__________________________ ___________________________Treasurer Assistant Treasurer

�AKER TILLYGOMEZCHARTERED ACCOUNTANTS

111c lkancrr

2H Cumberland Street

P.O. Box l'i·l991

Nassau, Bahamas

Tel: +I (2•i2) 356�11 H

Fax: + I CM2) 356-1125

Email, [email protected]

\X'ebsitc: www. htgomc7.. com

INDEPENDENT AUDITORS' REPORT

To the Members of: Bahama Islands Co·operative Credit Union Limited

We have audited the accompanying financial statements of Bahama Islands Co-operative Credit Union Limited (Formerly Bahama Islands Resorts and Casinos Co-operative Credit Union Limited) (the "Credit Union") which comprises the statement of financial position as at December 31, 2014, and the statement of profit or loss and other comprehensive income, statement of changes in members' equity and the statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these 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.

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements 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 entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

� an independent member ot

BAKER TILLY

INTERNATIONAL

35

INDEPENDENT AUDITORS' REPORT (Continued)

To the Members of: Bahama Islands Co-operative Credit Union Limited

Our Opinion

In our opinion, the financial statements present fairly in all material respects, the financial position of Bahama Islands Co-operative Credit Union Limited (Formerly Bahama Islands Resorts and Casinos Co-operative Credit Union Limited) as of December 31, 2014, and of its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards.

Emphasis of Matter

We draw attention to Note 1 in the financial statements. The Credit Union changed its name on August 20, 2014 and opened its bond, removing the restrictions that limited the Credit Union's membership to employees of Resorts and Casinos operating in the Bahamas.

ci;!:cZ:�s � . April 30, 2015 Nassau, Bahamas

36

BAHAMA ISLANDS CO-OPERATIVE CREDIT UNION LIMITED Statement of Financial Position

As of December 31, 2014 (Expressed in Bahamian Dollars)

ASSETS

Cash and cash equivalents (Note 5(a))

Fixed deposit (Note 5(b))

Deposits with the League (Note 6)

Loans receivable, net (Notes 7, 18)

Other assets (Note 8)

Financial investments (Note 9)

Investment property (Note 10)

Property, plant and equipment (Note 11)

LIABILITIES AND EQUITY

Current Liabilities

Members' shares and other deposits (Notes 12, 18)

Other liabilities (Note 13)

Total liabilities

Members' Equity

Qualifying shares (Note 14)

Statutory reserve (Note 14)

Investment revaluation reserve (Note 14)

Retained earnings (Note 14)

Total members' equity

See notes to financial statements.

2014 2013

$ 1,662,024

50,800

5,848,233

18,022,458

1, 111,490

479,435

1,153,101

437,885

$ 28, 765,426

$ 23,501,601

725,031

24,226,632

1,041,600

2,469,086

45,200

982,908

4,538,794

$ 28,765,426

$ 1,998,658

50,800

4,041,160

15,716,034

1,287,976

474,905

1,153,101

487,621

$ 25,210,255

$ 20, 193,986

629, 108

20,823,094

967,200

2,325,259

41,670

1,053,032

4,387, 161

$ 25,210,255

These financial statements are approved on behalf of the Board and authorized for issue on April 30, 2015 and signed on its behalf by:

Chairman

37

Barry Rolle Treasurer

38

BAHAMA ISLANDS CO-OPERATIVE CREDIT UNION LIMITEDStatement of Profit or Loss and Other Comprehensive Income

For the year endedDecember 31, 2014

2014 2013

INTEREST INCOME:Loans (Note 15) 2,011,299$ 1,755,870$Investment (Note 15) 121,259 84,914

Total interest income 2,132,558 1,840,784

INTEREST EXPENSE:Interest on deposits (Note 15) (834,849) (745,896)

Total interest expense (834,849) (745,896)

NET INTEREST INCOME BEFORE PROVISION FORLOAN IMPAIRMENT 1,297,709 1,094,888Increase in provision for loan impairment (Note 7) (205,609) (248,341)

NET INTEREST INCOME AFTER PROVISION FORLOAN IMPAIRMENT 1,092,100 846,547Non-interest income (Note 16) 578,697 593,681

NET INTEREST AND OTHER INCOME 1,670,797 1,440,228

OPERATING EXPENSES:Personnel (Note 17,18) 651,289 537,312Members’ security (Note 17) 202,356 203,247General business (Note 17) 244,807 216,409Organizational (Note 17) 157,165 177,704Occupancy (Note 17) 125,042 132,464Computer costs (Note 17) 56,429 69,864Marketing (Note 17) 84,757 46,053

Total operating expenses 1,521,845 1,383,053PROFIT FOR THE YEAR 148,952 57,175

OTHER COMPREHENSIVE INCOME:Items that may be subsequently reclassified to profit or loss:

Increase in fair value of available-for-sale investments 3,530 2,975TOTAL COMPREHENSIVE INCOME 152,482$ 60,150$


39

BAHAMA ISLANDS CO-OPERATIVE CREDIT UNION LIMITEDStatement of Changes in Members’ Equity

For the year ended December 31, 2014

QualifyingShares

StatutoryReserve

InvestmentRevaluation

ReserveRetainedEarnings Total

BALANCE AS AT DECEMBER 31, 2012 933,600$ 2,199,208$ 38,695$ 1,194,356$ 4,365,859$

Comprehensive income for the yearProfit for the year - - - 57,175 57,175Other comprehensive income - - 2,975 - 2,975

Total comprehensive income for the year - - 2,975 57,175 60,150

Transactions with ownersShares issued during the year (Note 14) 105,800 - - - 105,800Shares redeemed during the year (Note 14) (72,200) - - - (72,200)Dividends paid on qualifying shares (Note 14) - - - (72,448) (72,448)

Total transactions with owners 33,600 - - (72,448) (38,848)

Transfers between reservesStatutory reserve (half of 1% of assets) (Note 14) - 126,051 - (126,051) -

BALANCE AS AT DECEMBER 31, 2013 967,200 2,325,259 41,670 1,053,032 4,387,161

Comprehensive income for the yearProfit for the year - - - 148,952 148,952Other comprehensive income - - 3,530 - 3,530

Total comprehensive income for the year - - 3,530 148,952 152,482

Transactions with ownersShares issued during the year (Note 14) 144,000 - - - 144,000Shares redeemed during the year (Note 14) (69,600) - - - (69,600)Dividends paid on qualifying shares (Note 14) - - - (75,249) (75,249)

Total transactions with owners 74,400 - - (75,249) (849)

Transfers between reservesStatutory reserve (half of 1% of assets) (Note 14) - 143,827 - (143,827) -

BALANCE AS AT DECEMBER 31, 2014 1,041,600$ 2,469,086$ 45,200$ 982,908$ 4,538,794$


40

BAHAMA ISLANDS CO-OPERATIVE CREDIT UNION LIMITEDStatement of Cash Flows

For the year ended December 31, 2014

2014 2013

Cash flows from operating activities:Profit for the year 148,952$ 57,175$Adjustment for items not affecting cash:

Depreciation (Note 11) 53,362 56,266Provision for loan impairment (Note 7(c)) 205,609 248,341

407,923 361,782

Changes in operating assets and liabilities:Increase in loans receivables (2,512,033) (963,441)Decrease in other assets 176,486 96,120Increase in members’ shares and other deposits 3,307,615 1,181,674Increase in other liabilities 95,923 131,693

Net cash provided by operating activities 1,475,914 807,828

Cash flows from investing activities:Increase in deposits with the League (1,807,073) (64,354)Purchase of property, plant and equipment (3,626) (31,591)Increase in fixed deposits - (800)Acquisition of shares in the League (1,000) (1,200)

Net cash used in investing activities (1,811,699) (97,945)

Cash flows from financing activities:Redemption of members’ shares (69,600) (72,200)Issuance of members’ shares 144,000 105,800Dividends paid on members’ shares (75,249) (72,448)

Net cash used in financing activities (849) (38,848)

Net (decreased)/increase in cash and cash equivalents (336,634) 671,035Cash and cash equivalents, beginning of year 1,998,658 1,327,623CASH AND CASH EQUIVALENTS, END OF YEAR 1,662,024$ 1,998,658$

Supplemental cash flow information:Interest received during the year 2,142,377$ 1,848,911$Interest paid during the year 856,243$ 573,000$

Seenotes to financial statements.

41

BAHAMA ISLANDS CO-OPERATIVE CREDIT UNION LIMITEDNotes to the Financial Statements

December 31, 2014

1. GENERAL

Bahama Islands Co-operative Credit Union Limited (Formerly Bahama Islands Resorts and Casinos Co-operativeCredit Union Limited) (“BICCU”) (the “Credit Union”) was registered on May 28, 1986 under the provisions of theCommonwealth of The Bahamas Co-operative Societies Act, 2005 (the “Act”), and subsequently became aregistered member of The Bahamas Co-operative League Limited (the “League”). The Credit Union changed itsname on August 20, 2014.

Membership, which includes persons not less than sixteen (16) years of age, consist of all persons employed in thein The Bahamas, all past and present employees of the Credit Union who where members of the Credit Union atthe time of their separation, and all former members of the Queens College Co-operativeCredit Union Limited. Thespouses, children, parents and siblings of all of the aforementioned members are also eligible to become membersof the Credit Union.

The principal objectives of the Credit Union are as follows:

a) To promote the economic interests of its members in accordance with co-operative principles;

b) To promote thrift among its members by affording them an opportunity to accumulate their savings; and

c) To create a source of credit to members for provident and productive purposes.

The Credit Union’s registered office is located at No. 9 Village Road, Nassau, The Bahamas.

2. REGULATION

a) The Co-operative Societies Act, 2005 (Section 81) requires, among other provisions that the Credit Uniontransfer annually to a reserve fund, the greater of:

i). One half of 1% of assets; orii). 25% of the annual net surplus,

until the statutory reserve of the Credit Union equals 10% of the total assets of the Credit Union as shown inthe audited financial statements for the financial year.

b) The Stamp Act provides for the exemption of stamp duty relating to loans and related transactions of theCredit Union.

42

BAHAMA ISLANDS CO-OPERATIVECREDIT UNION LIMITEDNotes to the Financial Statements

December 31, 2014

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these financial statements are set out below. Thesepolicies have been consistently applied to all the years presented, unless otherwise stated.

a) Statement of compliance – The Credit Union’s financial statements have been prepared in accordance withInternational Financial Reporting Standards (“IFRS”) promulgated by the International Accounting StandardsBoard (“IASB”).

b) Basis of preparation – These financial statements have been prepared under the historical cost conventionexcept for available-for-sale financial assets that have been measured at fair value.

c) Changes in accounting policies and disclosures – Certain new standards, amendments to existingstandards and interpretations have been published by the IASB, the effect on the Credit Union’s financialstatements are set out below:

i) Amended standards and interpretations effective January 1, 2014:The Credit Union adopted the following new and amended standards during the year:

• IAS 32 – Financial Instruments: Presentation (Offsetting Financial Assets and Financial Liabilities)– These amendments address inconsistencies in current practice when applying the offsetting criteriain IAS 32, mainly by clarifying the meaning of “currently has a legally enforceable right of set-off” andthat some gross settlement systems may be considered equivalent to net settlement. The adoption ofthis amendment had significant impact on the Credit Union’s current year’s financial statements.

• IAS 36 – Impairment of Assets (Recoverable Amount Disclosures for Non-Financial Assets) – Theamendments reduce the circumstances in which the recoverable amount of assets or cash-generating units is required to be disclosed, clarify the disclosures required, and introduce an explicitrequirement to disclose the discount rate used in determining impairment (or reversals) whererecoverable amount (based on fair value less costs of disposal) is determined using a present valuetechnique. The adoption of this amendment had no impact on the Credit Union’s current year’sfinancial statements.

• IFRIC 21 Levies – IFRIC 21 addresses the accounting for a liability to pay a levy if that liability iswithin the scope of IAS 37 – Provisions, contingent liabilities and contingent assets. IAS 37 sets outcriteria for the recognition of a liability, one of which is the requirement for the entity to have a presentobligation as a result of a past event (known as the obligating event). The interpretation providesguidance on when to recognize a liability for a levy imposed by a government. The obligating eventfor the recognition of a liability is the activity that triggers the payment of the levy in accordance withthe relevant legislation. It also provides guidance on recognition of a liability to pay levies: the liabilityis recognized either progressively if the obligating event occurs over a period of time, or when theminimum threshold is reached if an obligation is triggered on reaching that minimum threshold. TheCredit Union is not currently subject to levies. The adoption of this interpretation had no impact on theCredit Union’s current year’s financial results or disclosures.

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December 31, 2014

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

c) Changes in accounting policies and disclosures (Continued)ii) New and amended standards issued but not yet effective and not early adopted:

The following new standard has been published but is not yet effective, and is considered relevant to theCredit Union’s financial statements:

• IFRS 9, Financial Instruments: (Effective for annual periods beginning on or after January 1, 2018) –This standard addresses the classification, measurement and recognition of financial assets andfinancial liabilities. IFRS 9 replaces those parts of IAS 39: Recognition and measurement, that relateto the classification and measurement of financial instruments. Key features are as follows:

Financial assets that are recognized within the scope of IAS 39 are to be subsequently measured atamortized cost or fair value. Specifically, debt investments that are held within a business modelwhose objective is to collect the contractual cash flows, and that have contractual cash flows that aresolely payments of principal and interest on the principal outstanding are generally measured atamortized cost at the end of the subsequent accounting periods. All other debt investments andequity investments are measured at their fair value at the end of subsequent accounting periods. Inaddition, under IFRS 9, entities may make an irrevocable election to present changes in the fair valueof equity investment (that is held for trading) in other comprehensive income, with only dividendincome generally recognized in profit or loss.

For financial liabilities, the standard retains most of the IAS 39 requirements. The main change isthat, with regard to the measurement of financial liabilities designated as at fair value through profit orloss, IFRS 9 requires that the amount of the change in the fair value of the financial liability that isattributable to changes in the credit risk of that liability is presented in other comprehensive income,unless the recognition of the effects of changes in the liability’s credit risk in other comprehensiveincome would create an accounting mismatch in profit or loss. Changes in fair value attributable to afinancial liability’s credit risk are not subsequently reclassified to profit or loss. Previously in IAS 39,the entire amount of the change in the fair value of the financial liability designated as fair valuethrough profit or loss was presented in profit or loss.

The Credit Union is considering the implications of the standard, the impact on the Credit Union andthe timing of its adoption.

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December 31, 2014


c) Changes in accounting policies and disclosures (Continued)ii) New and amended standards issued but not yet effective and not early adopted (Continued)

• IFRS 15, Revenue from Contracts and Customers (effective for annual periods beginning on or afterJanuary 1, 2017) – IFRS 15 establishes a single comprehensive model for entities to use inaccounting for revenue arising from contracts with customers. IFRS 15 will supersede the currentrevenue recognition guidance including IAS 18 Revenue, IAS 11 Construction Contracts and therelated interpretations when it becomes effective.

The core principle of IFRS 15 is that an entity should recognize revenue to depict the transfer ofpromised goods or services in an amount that reflects the consideration to which the entity expects tobe entitled in exchange for those goods or services. Specifically, the Standard introduces a 5-stepapproach to revenue recognition:

• Step 1: Identify the contracts with a customer.• Step 2: Identify the performance obligations in the contract.• Step 3: Determine the transfer price.• Step 4: Allocate the transaction price to the performance obligations in the contract.• Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

Under IFRS 15, and entity recognizes revenue when (or as) a performance obligation is satisfied, i.e.when “control” of the goods and services underlying the particular performance obligation istransferred to the customer. Far more prescriptive guidance has been added in IFRS 15 to deal withspecific scenarios. Furthermore, extensive disclosures as required by IFRS 15.

Management anticipated that the application of IFRS 15 in the future may have some impact on theamounts reported and disclosures made in the Credit Union’s financial statements. However, it is notpracticable to provide a reasonable estimate of the effect of IFRS 15 until theCredit Unionperforms adetailed review.

d) Foreigncurrency translationFunctional and presentation currencyItems included in the financial statements of the Credit Union are measured using the currency of the primaryeconomic environment in which the entity operates (the functional currency). The financial statements arepresented in Bahamian dollars (B$), which is the Credit Union’s functional and reportingcurrency.

Transactions and balancesForeign currency transactions are translated into the functional currency using the exchange rates prevailingat the date of the transactions. Foreign exchange gains and losses resulting from the settlement of suchtransactions and from the translation at year-end exchange rates of monetary and non-monetary assets andliabilities denominated in foreign currencies are recognized in profit or loss in the statement of profit or lossand other comprehensive income.

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December 31, 2014


e) Cash and cash equivalents – Cash and cash equivalents are carried in the statement of financial position atamortized cost using the effective interest method. For the purpose of the statement of cash flows, cash andcash equivalents comprise cash in hand and deposits held with original maturity of ninety (90) days or less,net of bank overdraft.

f) Fixed deposits – Fixed deposits represent deposits at banks with original maturities of more than ninety (90)days. These deposits are recognized in the statement of financial position at amortized cost using the effectiveinterest method.

g) League deposits – League deposits represent the proceeds of the statutory reserve fund and the liquidityreserve fund, which are deposited with and administered by the League, as required by Section 81 (3) of theCo-operative Societies Act, 2005. The deposits are carried at amortized cost using the effective interestmethod in the statement of financial position.

h) Other assets–Other assets, which also include accounts receivable, are carried at cost.

i) Investment property – Investment properties are properties held to earn rentals or for capital appreciation, orfor both, rather than for use in the supply of services or for administrative purposes, and which is not for sale inthe ordinary course of business. The Credit Union has adopted the cost method of accounting for itsinvestment property in accordance with IAS 40 – Investment Property.

j) Property, plant and equipment – Property, plant and equipment are measured at cost less accumulateddepreciation and impairment losses. Costs include expenditures that are directly related to the acquisition ofthe asset. The cost of self constructed assets includes the cost of material and direct labour, and any othercosts directly attributable to bringing the asset to a working condition for its intended use.

Subsequent cost of replacing part of an item of property, plant and equipment is recognized in the carryingamount of the item, if it is probable that the future economic benefits embodied within the part flow to theCredit Union and its cost can be measured reliably. The costs of day-to-day servicing of property, plant andequipment are recognized in the statement of profit or loss.

Depreciation is recognized in the statement of profit or loss on the straight-line basis at rates estimated towrite-off the relevant assets over their expected useful lives. Land is not depreciated. The rates used are asfollows:

Building - 4%Furniture and fixtures - 10-50%Computer software and hardware - 20-33 %Vehicle - 20%

Property, plant and equipment are reviewed periodically for impairment. Where the carrying amount of anasset is greater than its estimated recoverable amount, it is written down immediately to its recoverableamount.

k) Members’ deposits – Members’ deposits represent deposit holdings of the Credit Union’s members to satisfymembership requirements and to facilitate eligibility for loans and other benefits.

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December 31, 2014

3. SUMMARYOF SIGNIFICANT ACCOUNTING POLICIES (Continued)

l) Qualifying shares – The Credit Union has no stated authorized capital. Qualifying shares are the minimumshares required to become a member as described in the Credit Union’s By-laws. Each member is required tohave a minimum of forty (40) shares with a value of $5.00 each. Shares in the Credit Union entitle eachmember to one vote at the Annual General Meeting.

m) Statutory reserve –This reserve is set up in accordance with the provisions of the Co-operative Societies Actset out in Note 2. The proceeds of this reserve are deposited with the League. This reserve is not available fordistribution.

n) Retained earnings – Retained earnings represents undistributed surplus after statutory appropriation anddividend declared that are agreed upon by the members at the annual general meetings.

o) Investment revaluation reserve – Investment revaluation reserve represents the accumulated unrealizedgain and losses arising on changes in fair value of available-for-sale financial investments.

p) Dividends – Dividends on qualifying shares are recognized in equity in the period in which they are declaredby the Credit Union’s Directors. Further, the payment of dividends is subject to the approval of members at theAnnual General Meeting.

q) Interest income and expense – Interest income and expense are recognized in the statement of profit or lossand other comprehensive income for all instruments measured at amortized cost using the effective interestmethod. Loan origination fees for loans that are likely to be drawn down are deferred (together with relateddirect costs) and recognized as an adjustment to the effective interest rate on the loans. Loan interest incomeis not recognized on loans that are past due for periods exceeding twelve (12) months.

The effective interest method is a method of calculating the amortized cost of a financial asset or a financialliability and of allocating the interest income or interest expense over the relevant period.

The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts throughthe expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amountof the financial asset of financial liability. When calculating the effective interest rate, the Credit Unionestimates cash flows considering all contractual terms of the financial instrument (for example, prepaymentoptions) but does not consider future credit losses. The calculation includes all fees and commissions paid orreceived between parties to the contract that are an integral part of the effective interest rate, transaction costsand all other premiums or discounts

r) Fees and other income – Fees and other income are recognized on the accrual basis. Loan origination feesare recognized over the life of the loan, as an adjustment to the effective yield on the loans. Performancelinked fees or fee components are recognized when the performance criteria are fulfilled.

s) Operating expenses – Operating expenses are recognized on the accrual basis in the statement of profit orlossand other comprehensive income.

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December 31, 2014


t) Employee retirement benefits costs – The Credit Union participates in a defined contribution based pensionplan. Contributions to this plan are recognized as personnel expense in the statement of profit or loss andother comprehensive income when the employees have rendered services entitling them to the contributions.This plan is administered by a separate entity. The Credit Union has no legal or constructive obligations to payfurther contributions if the fund does not hold sufficient assets to pay all employees the benefits relating toemployees in the current or prior periods.

u) Related parties– A related party is a person or entity that is related to the entity that is preparing the financialstatements. In these financial statements, current and past members of the Board of Directors, committeemembers (one year past), management staff and their close relatives are classified as related parties.The Credit Union is a member of the League and has a representative on the Board of Directors of theLeague.

v) League dues and stabilization dues – The League has fixed its dues at $12 annually per member, whilestabilization dues are set at $3 annually per member.

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December 31, 2014


w) Financial instruments – A financial instrument is any contract that gives rise to both a financial asset of oneenterprise and a financial liability or equity of another enterprise.

Financial AssetsThe Credit Union classifies its financial assets into the following categories: loans and receivables; held-to-maturity investments; and available-for-sale financial assets. Management determines the classification of itsfinancial assets at initial recognition.

i) Loans and receivables – Loans and receivables are non-derivative financial assets with fixed ordeterminable payments that are not quoted in an active market. Loans and receivables are measured atamortized cost using the effective interest method, less any impairment. Loans are initially recorded atcost, which is the cash given to originate the loan including any transaction costs and are subsequentlymeasured at amortized cost using the effective interest rate method, less allowance for loan losses. At thestatement of financial position date, loans receivable, fixed deposits and other assets are classified asloans and receivables.

ii) Held-to-maturity investments – Held-to-maturity investments are non-derivative financial assets with fixedor determinable payments and fixed maturities that the Credit Union’s management has the positiveintention and ability to hold to maturity. Held-to-maturity investments are measured at amortized costusing the effective interest method less any impairment, with revenue recognized in the statement of profitor loss, on an effective yield basis. If the Credit Union were to sell other than an insignificant amount ofheld-to-maturity assets, the entire category would be reclassified as available-for-sale. Investment in theBahamas Government Bridge Bonds is classified in this category at the statement of financial positiondate.

iii) Available-for-sale financial assets –Available-for-sale financial assets are those intended to be held for anindefinite period of time, which may be sold in response to needs for liquidity or changes in interest rates,exchange rates or equity prices. They are measured at fair values, with changes to fair value recognizedin other comprehensive income with the exception of impairment losses, which are recognized directly inprofit or loss. Where the investment is disposed of or is determined to be impaired, the cumulative gain orloss previously recognized in investments revaluation reserve is included in profit or loss for the period.Dividends are recorded on the accrual basis, in profit or loss when declared. Quoted equity investmentsand shares held in theLeagueare classified as available-for-sale.

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December 31, 2014


w) Financial instruments (Continued)Financial assets (Continued)

iv) Impairment of financial assetsa) Loan impairment policy – An allowance for impairment is established if there is objective evidence

that it is probable that all amounts due according to the original contractual terms will not becollected. The amount of the provision is the difference between the carrying value amounts and therecoverable amounts, being the present value of the expected future cash flows including amountsrecoverable from collateral.

A loan is classified as impaired when, in management’s opinion, there has been deterioration in creditquality to the extent that there is no longer reasonable assurance of timely collection of the fullamount of principal and interest. The provision for impairment is based on the Protection, Effectivefinancial structure, Asset quality, Rates of return and costs, Liquidity, Signs of growth (PEARLS)system of estimating loan losses. Provisions are calculated at rates as outlined in Note 7(e).

Loans are placed on a non-accrual basis if they are delinquent for over twelve (12) months inaccordance with the Credit Union’s Policy.

Write-offs are made when all or part of the loan is deemed uncollectible or in the case of debtforgiveness. Write-offs are charged against previously established provisions for credit losses andreduce the principal amount of a loan. Recoveries in part or in full of amounts previously written offare recognized in the statement of profit or loss as part of ‘other income’. All write-offs must receiveprior approval from the Department of Co-operative Development.

Renegotiated loans – Loans whose terms have been renegotiated are no longer considered to bepast due but are treated as new loans. In subsequent years, the asset is considered to be past dueand disclosed only if renegotiated.

b) Assets classified as available-for-sale – For listed equity classified as available-for-sale, a significantor prolonged decline in the fair value of the security below its cost is considered in determiningwhether the assets are impaired. If any such evidence exists, the cumulative loss – measured as thedifference between the acquisition cost and the current fair value, less any impairment loss on thatfinancial asset previously recognized in profit or loss – is removed from equity and recognized in thestatement of profit or loss.

Financial LiabilitiesThe Credit Union’s financial liabilities are initially measured at fair value, net of transaction costs, and aresubsequently measured at amortized cost using the effective interest method. At the statement of financialposition date, the following items were classified as financial liabilities: members’ and other deposits, and otherliabilities. Management determines the classification of its financial liabilities at initial recognition.

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December 31, 2014

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

The preparation of financial statements in conformity with IFRS requires management to make estimates andassumptions that affect the reported amount of assets, liabilities, and contingent assets and contingent liabilities atthe end of the reporting period and the income and expenses for the year then ended. Actual results could differfrom those estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimatesare recognized in the period in which the estimate is revised if the revision affects only that period or in the periodof the revision and future periods if the revision affects both current and future periods.

Judgments made by management in the application of IFRS that have significant effect on the financial statementsand estimates with a significant risk of material adjustment in the next financial year are discussed below:

Impairment losses on loansIn determining amounts recorded for impairment of loan losses in the financial statements, management makesjudgments regarding indicators of impairment, that is, whether there are indicators that suggest there may be ameasurable decrease in the estimated future cash flows from loans, for example, repayment default and adverseeconomic conditions. Management also makes estimates of the likely estimated future cash flows from impairedloans as well as the timing of such cash flows. Historical loss experience is applied where indicators of impairmentare not observable on individual significant loans and loans portfolio with similar characteristics, such as credit risk.

The methodology and assumptions used for estimating both the amount and timing of future cash flows arereviewed regularly to minimize any differences between loss estimates and actual loss.

Legal proceedings and claimsThe Credit Union is involved, as a plaintiff, in a number of legal proceedings relative to outstanding loans. TheCredit Union evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability tomake a reasonable estimate of the amount of loss. Unanticipated events or changes in these factors may requirethe Credit Union to increase or decrease the amount that it provides or accrues for any matter.

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December 31, 2014

5. CASH AND CASH EQUIVALENTSAND FIXED DEPOSITS

a) Cash and cash equivalents

Cash and equivalents consist of the following:

Notes 2014 2013

RBC Royal Bank (Bahamas) Limited - Current account 928,392$ 192,104$Scotiabank (Bahamas) Limited - Operating account 635,716 1,594,939Scotiabank (Bahamas) Limited - Payroll account 51,697 10,915Scotiabank (Bahamas) Limited - Call deposits 50,000 50,000Fidelity Bank (Bahamas) Limited - Business chequing (i) (4,481) 150,000

1,661,324 1,997,958Cash in hand 700 700

1,662,024$ 1,998,658$

(i) The Credit Union does not have a credit facilities with Fidelity Bank (Bahamas) Limited. The Bank allowedthe Credit Union to temporarily overdraw their account. This account is now being used for the Debit Cardfacility offered to members.

b) Fixed deposit

Fixeddeposit consistsof the following:Interest Rate 2014 2013

Scotiabank (Bahamas) Limited - Fixed deposit 0.15% 50,800$ 50,800$

The fixed deposit held by the Credit Union has original maturity of one (1) year, and matures on March 13,2015.

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December 31, 2014

6. DEPOSITS WITH THE LEAGUE

Deposits with the Leagueare comprised of the following:

Interest Rate 2014 2013%

Statutory reserve deposits (i) 1.44 - 1.5Balance, at beginning of year 2,128,366$ 2,088,359$Additional deposits and interest earned 548,965 40,007Balance, end of year 2,677,331 2,128,366

Liquidity reserve deposits (ii) 1.44 - 1.5Balance, at beginning of year 1,912,794 1,888,447Additional deposits and interest earned 258,108 24,347Balance, end of year 2,170,902 1,912,794

Other deposits (iii) 3Balance, at beginning of year - -Deposit made during the year 1,000,000 -Balance, end of year 1,000,000 -

5,848,233$ 4,041,160$

(i) In accordance with Section 81 of the Co-operative Societies Act, as set out in Note 2 to the financialstatements, the Credit Union transfers a portion of its retained earnings in each financial year, before paymentof dividends on qualifying shares, to the statutory reserve fund. At December 31, 2014, the statutory reservewas adequately funded (2013: underfunded$196,893).

(ii) The Co-operative Societies Act stipulates that not less than 10% of the Credit Union’s members’ deposits arekept in a “liquidity reserve fund”. The funds are to be managed by the League. At December 31, 2014, theliquidity reserve fund was underfunded by $179,258(2013: $106,605).

(iii) These deposits are for a period of one (1) year and mature on February 5, 2015.

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December 31, 2014

7. LOANSRECEIVABLE, NET

a) The movement in loans receivableduring the year areas follows:

2014 2013

Balance, beginning of year 16,060,166$ 15,208,854$Add: Loans disbursed during the year 11,586,885 8,890,727

27,647,051 24,099,581

Less: Repayments and transfers (9,475,509) (8,039,415)18,171,542 16,060,166

Less: Provision for loan impairment (149,084) (344,132)Balance, end of year 18,022,458$ 15,716,034$

b) Loans are classified as follows:

Interest Rate 2014 2013%

Consumer 10 -18 12,417,179$ 10,926,350$Construction and real estate 9 - 12 4,539,828 3,784,401Motor vehicle 9 - 12 1,185,972 1,306,592Business 9 28,563 42,823

18,171,542$ 16,060,166$

Loans are either fully or partially collateralized by members’ savings, property or real estate as necessary. Asat December 31, 2014, $12,359.089 of total loans of $18,171,542 was collateralized (2013: $11,500,941 oftotal loans of $16,060,166).

c) The movements in the provision for loan impairment areas follows:

2014 2013

Balance, beginning of year 344,132$ 207,920$Increase in provision during the year 205,609 248,341Loans written off during the year (400,657) (112,129)Balance, end of year 149,084$ 344,132$

Doubtful loans presented on a non-accrual basis total $128,105 (2013:$ 236,375). The Credit Union’s baddebt recoveries for the current year totaled $110,160 (2013:$126,313). This amount is included in non-interestincome in thestatement of profit or loss and other comprehensive income.

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December 31, 2014

7. LOANS RECEIVABLE, NET (Continued)

d) Concentration of Loans:

At December 31, 2014 no individual (2013: one (1) individual) was indebted to the Credit Union for an amountexceeding 5% of the Credit Union’s equity. Loans outstanding to this individual totaled $0 (2013: $230,306),and of this total, Nil (2013: $Nil) have been deemed as doubtful loans.

e) Delinquent Loans:

The following is a summary of non-performing loans, and the specific provision for impairment losses atDecember 31, 2014:

Period in arrears

Number ofaccounts in

arrears

TotalDelinquent

loansValue ofSecurity Exposure

Loan lossprovision

Provisionrate%

Within 1 month 7 63,459$ 5,639$ 57,820$ -$ n/a2 to 3 months 45 281,642 181,282 100,360 35,126 354 to 6 months 32 185,675 106,187 79,488 27,821 357 to 12 months 48 206,102 59,271 146,831 51,391 35Over 1 year 10 38,237 3,490 34,747 34,746 100

142 775,115$ 355,869$ 419,246$ 149,084$

8. OTHER ASSETS

Other assets are comprised of the following:

2014 2013

Members’ salary deductions due 824,900$ 1,011,669$Other receivables 107,024 100,180Debt collection fees receivable 26,229 -Deposits and prepaid expenses 15,562 31,033Rent receivable - vending operations 3,000 500Accrued interest receivable:

Loans 108,495 93,772Investments 26,280 50,822

1,111,490$ 1,287,976$

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December 31, 2014

9. FINANCIALINVESTMENTS

Financial investments are comprisedof:

2014 2013

Investments held-to-maturity (a):Bahamas Government Registered Stock:

Maturing in 2023 with interest at prime plus 0.3750% pa 40,000$ 40,000$Maturing in 2026 with interest at prime plus 0.3125% pa 350,000 350,000

Total investments held-to-maturity 390,000 390,000

Available-for-sale investments (b):At fair value:

Freeport Oil Holdings Company Limited (4,000 shares) 24,000 24,000Commonwealth Bank Limited (4,500 shares) 33,750 31,095Fidelity Bank (Bahamas) Limited (500 shares) 2,375 1,500

60,125 56,595At historical cost:

League shares: 5,862 shares (2013: 5,662 shares) 29,310 28,310Total available-for-sale investments 89,435 84,905

479,435$ 474,905$

(a) Investments held to maturity:

The interest rates on the government securities are tied to the Bahamian Prime Rate, which was 4.75% atDecember 31, 2014(2013: 4.75%).

(b) Available-for-sale investments:

i) Investments in quoted equities are measured at fair value and classified as available-for-sale financialinstruments. The unrealized gains/losses on these instruments are presented in the statement of profit orloss and other comprehensive income.

ii) Shares held in the League are measured at cost and classified as available-for-sale financial instruments.The Credit Union is required to hold these shares as a member of the League.

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December 31, 2014

10. INVESTMENT PROPERTY

Investment property is comprisedof:

2014 2013

Land 1,153,101$ 1,153,101$

The Credit Union owns 6.29acres of land situated on West Bay Street, in the vicinity of Saunders Beach located inthe Western District of New Providence.

Investment property is recorded at cost in the statement of financial position in accordance with IAS 40. Itrepresents the purchase price of the land plus all other costs incurred in closing its acquisition. The fair value of theland is estimated at $3.7 million based on an appraisal of the property done by TR Associates Limited on March29, 2012.

11. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are comprised of the following:

Land BuildingFurniture& Fixtures

ComputerSoftware Vehicle Total

Cost:Balance at December 31, 2012 137,379$ 628,308$ 103,237$ 36,722$ 18,630$ 924,276$Additions - 5,832 - 25,759 - 31,591Balance at December 31, 2013 137,379 634,140 103,237 62,481 18,630 955,867Additions - 1,980 1,646 - 3,626Balance at December 31, 2014 137,379$ 634,140$ 105,217$ 64,127$ 18,630$ 959,493$

Accumulated depreciation:Balance at December 31, 2012 -$ 329,079$ 38,561$ 25,710$ 18,630$ 411,980$Additions - 31,590 16,820 7,856 - 56,266Balance at December 31, 2013 - 360,669 55,381 33,566 18,630 468,246Additions - 30,963 15,190 7,209 - 53,362Balance at December 31, 2014 -$ 391,632$ 70,571$ 40,775$ 18,630$ 521,608$

Carrying value:As at December 31, 2014 137,379$ 242,508$ 34,646$ 23,352$ -$ 437,885$As at December 31, 2013 137,379$ 273,471$ 47,856$ 28,915$ -$ 487,621$

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December 31, 2014

12. MEMBERS’ SHARESAND OTHERDEPOSITS

Members’ shares and other deposits are comprised of:

2014 2013

Regular deposits:Balance, beginning of year 11,353,222$ 11,354,977$Add savings and interest 18,040,442 15,636,447Less withdrawals and transfers (17,199,233) (15,638,202)Balance, end of year 12,194,431 11,353,222

Other deposits:Certificate of deposits 4,102,499 4,029,249Retirement savings 3,257,486 2,196,880Educational savings 1,093,524 455,577Christmas club accounts 424,864 167,050Kid accounts 399,076 354,136Kall accounts 122,296 100,262Master Card accounts 74,235 65,485Bill paying accounts 61,752 17,155School fee deposits 51,140 33,886Vacation club deposits 41,877 32,825Group insurance 32,868 30,772Queen’s College accounts 14,813 15,595Business accounts 4,227 10,822Dormant accounts 2,751 1,895BICCU Asue - 40,960

Total other deposits 9,683,408 7,552,549

Non-members deposits 1,623,762 1,288,21523,501,601$ 20,193,986$

Shares may be transferred to another member or anyone eligible for membership with the consent of the Board ofDirectors. Shares may be withdrawn in whole or in part by the member, however, the Board of Directors reservesthe right at any time to require a member to give notice not exceeding six (6) months, provided that no membermay withdraw any shareholdings below the amount of his total liability to the Credit Union without approval of theBoard of Directors.

Interest is paidon deposits at rates varying from3% to6% (2013: 3% to6%) per annum.

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December 31, 2014

13. OTHER LIABILITIES

Other liabilities are comprisedof the following:

2014 2013

Accrued interest payable 566,136$ 512,281$Stale dated cheques 74,292 36,987Accrued expenses 53,318 58,540Unapplied receipts 26,261 20,984Debit cards 3,836 -Other payables 1,188 316

725,031$ 629,108$

14. QUALIFYING SHARESANDOTHER RESERVES

i) Qualifying Shares

The movements in qualifying shares during the year arecomprised of:

2014 2013

Balance, beginning of year 967,200$ 933,600$Issued during the year 144,000 105,800Withdrawals and transfers (69,600) (72,200)Balance, end of year 1,041,600$ 967,200$

Shares in the Credit Union entitle each member to one (1) vote at the Annual General Meeting. At December31, 2014, the Credit Union had5,208members (2013: 4,836members).

ii) Statutory Reserves

The movements in statutory reserves arecomprised of:

2014 2013

Balance, beginning of year 2,325,259$ 2,199,208$Transfer from retained earnings 143,827 126,051Balance, end of year 2,469,086$ 2,325,259$

In accordance with the Co-operative Societies Act (see Note 2), one half of 1% of the assets have beentransferred to statutory reserve. This reserve is not available for distribution.

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December 31, 2014

14. QUALIFYING SHARESAND OTHERRESERVES (Continued)

iii) Investment Revaluation Reserves

The movements in investment valuation reserves comprise:

2014 2013

Balance, beginning of year 41,670$ 38,695$Unrealized gain during the year 3,530 2,975Balance, end of year 45,200$ 41,670$

This represents the accumulated unrealized gains/losses arising on the revaluation of available-for-salefinancial investments, which consist of equity shares traded on the Bahamas International Stock Exchange(BISX).

iv) Retained Earnings

The movements in retained earnings comprise:

2014 2013

Balance, beginning of year 1,053,032$ 1,194,356$Profit for the year 148,952 57,175Transfer to statutory reserve (143,827) (126,051)Dividends to members (75,249) (72,448)Balance, end of year 982,908$ 1,053,032$

This reserve represents amounts transferred from net surplus, after statutory appropriation and dividenddeclared that areagreed upon by the members at the annual general meeting.

v) Dividends on Qualifying Shares

Dividend on qualifying shares is an appropriation of retained earnings. During the year ended December 31,2014, the Directors proposed a dividend of 8% (2013: 8%) be paid to the members. This will be voted on bymembers at the Annual General Meeting. Dividends declared and paid during the year totaled $75,249 (2013:$72,448).

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December 31, 2014

15. NETINTEREST INCOMEBEFORE PROVISION FORLOANIMPAIRMENT

Net interest incomebefore provision for loan impairment comprises:

2014 2013

Net interest on members operations:Interest earned on loan to members 2,011,299$ 1,755,870$Interest expense on members’ deposits (834,849) (745,896)

1,176,450 1,009,974

Investment interest income:Liquidity reserve deposits with the League 37,126 24,347Statutory reserve deposits at the League 36,415 40,007Fixed deposits at the League 27,205 -Bahamas Government Registered Stock 19,760 19,760Fixed deposits at bank 753 800

121,259 84,9141,297,709$ 1,094,888$

16. NON-INTEREST INCOME

Non-interest income consistsof the following:

2014 2013

Service charges 410,949$ 354,613$Bad debt recoveries/other income 110,160 178,313Bill payment fees 22,131 22,135Entrance fees 17,960 12,575Credit card membership fees 9,267 7,815Rental income from vending machines 6,000 6,000Dividends on equity investments 2,230 2,230League insurance commission - 10,000

578,697$ 593,681$

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December 31, 2014

17. OPERATING EXPENSES

Operating expenses consist of the following:

2014 2013

PersonnelSalaries 455,253$ 410,642$Other benefits 123,886 20,269Medical and pension (Note 19) 53,831 64,089National insurance 18,319 29,149Employee training and development - 13,163

651,289 537,312

Members’ securityLoans and savings insurance premium 199,513 199,739Bond insurance 2,843 3,508

202,356 203,247

General businessOther general expense 81,962 27,233Professional and legal fees 31,374 71,683Stationery and supplies 29,174 38,654Telephone 29,170 26,473Bank charges 24,849 16,159Debit card expense 19,057 -Depreciation - furniture and fixtures 15,365 16,820Insurance - officers liabilities 5,191 4,802Motor vehicle maintenance 4,081 9,189Equipment maintenance 3,865 4,242Insurance - motor vehicle 559 728Courier and postage 160 426

244,807$ 216,409$

(Continued)

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December 31, 2014

17. OPERATING EXPENSES (Continued)

2014 2013

OrganizationalAnnual league dues 82,028$ 70,785$Board and committee meetings 45,393 41,229Annual general meeting 18,544 17,888CCCU Convention 11,200 47,802

157,165 177,704

OccupancyUtilities 39,472 36,308General maintenance 35,563 31,135Depreciation - building 31,032 31,590Insurance - building 10,177 12,213Security 5,888 18,308Property tax 2,910 2,910

125,042 132,464

Computer costsMaintenance and supplies 48,661 62,009Computer hardware - depreciation 5,319 5,406Computer software - depreciation 2,449 2,449

56,429 69,864

MarketingAdvertising and promotions 79,114 40,628Donations and gifts 5,643 5,425

84,757 46,053TOTAL 1,521,845$ 1,383,053$-

(Concluded)

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December 31, 2014

18. RELATED PARTIES

Directors, committee members and staff members are classified as related parties and maintained the followingbalances and transactions with the Credit Union:

2014 2013

Directors and Committee Members:Loans, including interest (a) 863,545$ 501,189$Interest income (a) 84,750$ 47,613$Shares and savings (b) 448,449$ 328,258$Interest expense (b) 22,560$ 11,489$

Staff Members:Loans, including interest (a) 286,723$ 180,107$Interest income (a) 22,422$ 21,198$Shares and savings (b) 275,176$ 272,826$Interest expense (b) 30,465$ 9,549$

Family Members:Loans, including interest (a) 181,733$ 285,981$Interest income (a) 22,928$ 27,168$Shares and savings (b) 264,323$ 112,628$Interest expense (b) 9,578$ 3,942$

(a) Loans are generally granted in accordance with normal lending policies applicable to other members, (i.e.rates, terms, conditions, qualifying criteria, security, etc.) with the exception of loans to those staff memberswho are to receive preferential rates in their employment package and are included in loans receivable on thestatement of financial position.

(b) Shares and savings accounts are maintained under the same terms and conditions as accounts of othermembers (i.e. rate, terms, conditions, qualifying criteria, securities, etc.) and are included in members’deposits and qualifying shares on the statement of financial position.

Key management remuneration for the year was as follows:

2014 2013

Salaries and wages 393,834$ 250,952$Statutory and other costs 11,831$ 9,204$

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December 31, 2014

18. RELATED PARTIES (Continued)

Board and committee expenses:

2014 2013

Committee training 11,200$ 47,802$Annual league dues 75,868$ 70,785$Allowance 34,074$ 33,150$Expense 10,144$ 8,079$

19. PENSION PLAN

The Credit Union provides retirement benefits for eligible employees, which is administered externally by afinancial institution. The plan is a defined contribution plan and employees’ participation in the plan is voluntary.

Vesting entitlement to the Credit Union’s contributions is as follows:

Years of service Vested entitlement0 but less than 1 years 0%1 but less than 2 years 20%2 but less than 3 years 40%3 but less than 4 years 60%4 but less than 5 years 80%

> 5 years 100%

The contribution paid by the Credit Union for each employees ranges from 5% to 6% (2013: 5% to 6%) of theemployee’s monthly salary.

For the year ended December 31, 2014, the Credit Union’s pension plan expense was $12,746 (2013: $18,454).

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December 31, 2014

20. FINANCIAL RISK MANAGEMENT

By its nature, the Credit Union’s activities are principally related to the use of financial instruments. This will involveanalysis, evaluation and management of some degree of risk or combination of risks. The Credit Union’s aims are,therefore, to achieve an appropriate balance between risks and return and minimize potential adverse effects onthe Credit Union’s financial performance.

The Board of Directors (the “Board”) is ultimately responsible for the establishment and oversight of the CreditUnion’s risk management framework. The Credit Union’s risk management policies are designed to identify andanalyze the risk faced by the Credit Union, to set appropriate risk limits and controls, and to monitor risks andadherence to limits by means of regularly generated reports. Risk management procedures are closely integratedinto all key business processes. The Credit Union regularly reviews its risk management policies, procedures andsystems to reflect recommendations and best practice, as well as changes in markets and products.

The Board, through the following committees, is responsible for monitoring compliance with the Credit Union’s riskmanagement policies and procedures:

i) Supervisory CommitteeThe Supervisory Committee oversees how management monitors compliance with the Credit Union’s riskmanagement policies and procedures and reviews the adequacy of the risk management framework in relationto the risks faced by the Credit Union. This Committee undertakes both regular and ad hoc reviews of riskmanagement controls and procedures, the result of which are reported to the Board.

ii) Credit CommitteeThe Credit Committee oversees the approval and disbursements of credit facilities to members. It is alsoprimarily responsible for monitoring the quality of loan portfolio.

The Credit Union accepts deposits from members at agreed rates of interest and seeks to earn above averageinterest margins by investing these funds in high quality assets, as well as lending for longer periods at higher rateswhile maintaining sufficient liquidity to meet all claims that might fall due.

These activities expose the Credit Union to a variety of financial risks, the most important risks are:

20.1 Credit Risk20.2 Liquidity Risk20.3 Market Risk (including currency risk, interest rate risk and other price risk)

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December 31, 2014

20. FINANCIAL RISK MANAGEMENT (Continued)

20.1 Credit risk

Credit risk is the risk that borrowers or other counterparties will cause a financial loss for the Credit Union byfailing to discharge their contractual obligations when they become due, and that any collateral provided doesnot cover the Credit Union’s claims. Credit risk is the most important risk for the Credit Union’s business. As aconsequence of the Credit Union’s mandate and resulting financial structure, credit risk arise principally fromlending activities and are concentrated in loans to members.

For loans, credit decisions are primarily made by the Board of Directors, with some delegation of creditapproval authority to the Credit Committee and the Credit Union’s Manager. There is a documented creditpolicy in place, which forms the basis for lending operations. The policy aims at maintaining a high qualityloan portfolio, as well as enhancing the Credit Union’s mission and strategy. The policy sets the basic criteriafor acceptable risk and identifies risk areas that require special attention.

Additionally, the Credit Union is exposed to credit risk in its treasury activities, arising from financial assetsthat the Credit Union uses for investing its liquidity and managing currency and interest rate risks, as well asother market risks.

Credit risk managementThe Credit Union manages the levels of credit risk they undertake by placing limits on the amount of riskaccepted in relation to any one borrower, or group of borrowers. Such risks are monitored on a revolvingbasis and subject to an annual or more frequent review.

Exposure to credit risk is managed through regular analysis of the ability of the borrowers and potentialborrowers to meet interest and capital repayment obligations and by changing these lending limits whereappropriate. Exposure to credit risk is alsomanaged in part by obtaining collateral and personal guarantees.

The principal collateral types for loans are:

• Shares or deposits held at the Credit Union (except qualifying shares); and• Charges over assets such as automobiles and premises.

Management monitors the fair value of collateral held during its review of the adequacy of the provision forcredit losses.

Borrowers of the Credit Union are segmented into two internal classes, performing and non-performing.

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December 31, 2014


20.1 Credit risk (Continued)

Impairment and provisioning policiesThe Credit Union assesses at each statement of financial position date whether there is evidence ofimpairment in accordance with general principles and methodology set out in IAS 39 and the relevantimplementation guidance. These procedures include the following steps:

• Identification of events that provide objective evidence that a loan is impaired.• Establishment of criteria for assessment on an individual or collective basis.• Establishment of groups of assets with similar characteristics.• Establishing methodology to determine cash flows from impaired loans.• Determining interest income recognition• Recoveries

The main considerations for the loan impairment assessment include whether any payments of principal orinterest are overdue by more than thirty (30) days based on the established PEARLS grid recommended bythe League or based on any known difficulties in the cash flows of counterparties, credit rating downgrades orinfringement of the original terms of the contract.

The Credit Union addresses impairment assessment in two areas; individually assessed allowances andcollectively assessed allowances. The assessment applied to individually significant accounts normallyencompasses collateral held and the anticipated receipts for that individual account. Collectively assessedallowances are determined through the application of PEARLS prescribed percentages to the aging profilesof the loan portfolio.

The internal rating system described above focuses more on credit-quality mapping from the inception oflending activities. In contrast, impairment provisions are recognized for financial reporting purposes only forlosses that have been incurred at the end of the reporting periods based on objective evidence ofimpairment.

The internal rating tool assists management to determine whether objective evidence of impairment existsunder IAS 39, based on the following criteria set out by the Credit Union:

• Delinquency in contractual payments of principal or interest;• Breach of loan covenants or conditions;• Deterioration in the value of collateral; and• Downgrading to 12 months and over delinquency grade level.

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December 31, 2014


20.1 Credit risk (Continued)

Maximum exposure to credit riskMaximum exposure to credit risk before collateral held or other credit enhancements on loans totaled$18,171,542 (2013: $16,060,166).

For all other financial assets on the statement of financial position, the maximum exposure to credit risk isbased on the net carrying amounts as reported in the statement of financial position.

Credit quality of loans

The credit quality of loans is summarized as follows:

2014 2013

Neither past due nor impaired 17,396,427$ 15,205,041$Past due but not impaired 740,368 618,750Impaired 34,747 236,375Gross 18,171,542 16,060,166Less: allowance for impairment (149,084) (344,132)Net 18,022,458$ 15,716,034$

The impairment provision for loans represents the individually impaired loans.

Renegotiated loansRestructuring activities include extended payment arrangements, modification and deferral of payments.Following restructuring, a previously overdue customer account is reset to a normal status and managedtogether with other similar accounts. Restructuring policies and practices are based on indicators or criteriawhich, in the judgment of management, indicate that payments will most likely continue. These policies arecontinuously reviewed.

Repossessed collateral

The Credit Union repossessedthe followingcollaterals:

Nature of assets 2014 2013

Automobile -$ 55,368$

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December 31, 2014


20.2 Liquidity risk

Liquidity risk, also referred to as funding risk, is the risk that the Credit Union will encounter difficulty in raisingfunds to meet its obligations and commitments associated with its financial liabilities when they fall due, andto replace funds when they are withdrawn. The consequence may be the failure to meet obligations to repaydepositors and fulfill commitments to lend.

The Credit Union is exposed to daily calls on its available cash resources from general savings deposits,maturing loans draw-downs, guarantees, withdrawal of shares and operating commitments. The Credit Uniondoes not maintain cash resources to meet all of these needs, as experience shows that a minimum level ofreinvestment of maturing funds can be predicted with a high level of certainty.

Liquidity risk management processThe liquidity management process is monitored by the Manager and includes:

• Monitoring future cash flows and liquidity on a daily basis. This incorporates an assessment of the CreditUnion’s source of funds which includes, cash and bank balances, items in the course of collection andinvestment maturities in order to determine their ability to meet its commitments;

• Maintaining a portfolio of highly marketable and diverse assets that can easily be liquidated as protectionagainst any unforeseen interruptions to cash flow;

• Maintaining committed lines of credit with its Bankers and the League;• Monitoring statement of financial position liquidity ratios against internal and regulatory requirements. The

most important of these is to maintain limits on the ratio of net liquid assets to liabilities; and• Matching and mismatching of the maturities and interest rates of financial assets and financial liabilities.

An unmatched position potentially enhances profitability, but can increase risk.

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December 31, 2014


20.2 Liquidity risk (Continued)

Financial liabilities cash flows

The table below summarizes the Credit Union’s exposure to liquidity risk based on relevant contractualrepayment obligations.

Within 3Months

3 to 12Months

1 to 5 Years Total

Liabilities:Members’ shares and other deposits 12,194,431$ 3,947,185$ 7,359,985$ 23,501,601$Other liabilities 725,031 - - 725,031

Total liabilities 12,919,462$ 3,947,185$ 7,359,985$ 24,226,632$

Within 3Months

3 to 12Months

1 to 5 Years Total

Liabilities:Members’ shares and other deposits 7,589,351$ 4,389,869$ 8,214,767$ 20,193,986$Other liabilities 629,108 - - 629,108

Total liabilities 8,218,459$ 4,389,869$ 8,214,767$ 20,823,094$

As at December 31, 2014


Assets available to meet the liabilities and to cover outstanding loan commitments include cash balances,unrestricted deposits, and items in the course of collection.

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December 31, 2014


20.3 Market risk

The Credit Union takes on exposure to market risk, which is the risk that the fair value or future cash flows ofa financial instrument will fluctuate because of the changes in market prices. Market risk arise from openposition in foreign currencies (currency risk), interest rates (interest rate risk), and equity products (other pricerisk), all of which are exposed to general and specific market movements and changes in the level of volatilityof market rates or prices such as interest rates, credit spreads, foreign exchange rates and equity prices.

Currency riskCurrency risk or foreign exchange risk is the risk that the fair value or future cash flows of a financialinstrument will fluctuate because of changes in foreign exchange rates. The Credit Union has minimumexposure to currency risk, as all its assets and liabilities are stated in the Bahamian dollars, which is theCredit Union’s functional and presentational currency.

Interest rate riskInterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuatebecause of changes in market interest rates, and arises mainly from interest bearing deposits, loansreceivable, debt securities, bank overdraft and members’ and non members’ deposits.

Floating rate instruments expose the Credit Union to cash flow interest rate risk, whereas fixed interest rateinstruments expose the Credit Union to fair value interest rate risk. The Credit Union takes on exposure to theeffects of fluctuations in the prevailing levels of market interest rates on both its fair value and cash flow risks.Interest margins may increase as a result of such changes but may reduce losses in the event thatunexpected movements arise.

The Credit Union’s interest rate risk policy requires it to manage interest rate risk by maintaining anappropriate mix of fixed and variable rate instruments as determined by the League. The policy also requiresit to manage the maturities of interest bearing financial assets and interest bearing financial liabilities. TheBoard sets limits on the level of mismatch of interest rate re-pricing that may be undertaken.

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December 31, 2014


20.3 Market risk (Continued)

Interest rate risk (Continued)The tablebelow summarizes the Credit Union’s exposure to interest rate risk. They include the Credit Union’sfinancial instruments at carrying amounts, categorized by the earlier of contractual re-pricing or maturitydates.

Within 3Months

3 to 12Months

1 to 5 Years

Over5 Years

Non-InterestBearing Total

Assets:Cash at Banks $ 50,800 $ - $ - $ - $ 1,661,324 $ 1,712,124Deposits with League - 1,000,000 - 4,848,233 - 5,848,233Loans 4,735 499,998 12,223,400 5,166,220 128,105 18,022,458Financial investments - - - 390,000 89,435 479,435Other assets - - - - 1,111,490 1,111,490

Total assets 55,535 1,499,998 12,223,400 10,404,453 2,990,354 27,173,740

Liabilities:Members’ and other deposits 12,597,639 5,620,887 5,280,324 - 2,751 23,501,601Other liabilities - - - - 725,031 725,031

Total liabilities 12,597,639 5,620,887 5,280,324 - 727,782 24,226,632Total interest gap $ (12,542,104) $ (4,120,889) $ 6,943,076 $ 10,404,453 $ 2,262,572 $ 2,947,108Cumulative gap $ (12,542,104) $ (16,662,993) $ (9,719,917) $ 684,536 $ 2,947,108

Within 3Months

3 to 12Months

1 to 5 Years

Over5 Years

Non-InterestBearing Total

Total assets $ 1,206,120 $ 77,171 $ 50,800 $ 20,203,789 $ 2,030,953 $ 23,568,833Total liabilities 7,589,351 4,389,869 8,214,767 - 629,108 20,823,094Total interest gap (6,383,231)$ (4,312,698)$ (8,163,967)$ 20,203,789$ 1,401,845$ 2,745,739$Cumulative gap (6,383,231)$ (10,695,928)$ (18,859,895)$ 1,343,894$ 2,745,739$



73


December 31, 2014


20.3 Market risk (Continued)

Other price riskOther price risk is the risk that the fair value of a financial instrument will fluctuate as a result of changes inmarket prices, whether those changes are caused by factors specific to the individual instrument or its issueror factors affecting all instruments traded in the market.

The Credit Union is exposed to other price risk on its available-for-sale equity financial instruments (equityprice risk), held as a part of its investment portfolio. Equity price risk arises out of price fluctuations in equityprices. The risk arises out of holding positions in either individual stocks (idiosyncratic risk) or in the marketas a whole (system risk). The goal is to earn dividend income and realize gains sufficient to offset the interestforegone in holding such long-term positions.

The Board sets limits on the level of exposure, and diversification is a key strategy employed to reduce theimpact on the portfolio, which may result from the non-performance of a specific class of assets. Given thepotential volatility in the value of equities and the non-interest bearing characteristics of these instruments,the Credit Union limits the amount invested in them.

• Sensitivity analysis – The Credit Union’s equity investments are traded on the Bahamas InternationalStock Exchange (BISX). A 5% increase or decrease in quoted bid prices at the statement of financialposition date would have increased/decreased total comprehensive income by $3,006 (2013: $2,830).

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December 31, 2014

21. FAIR VALUEMEASUREMENTS

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderlytransaction between market participants at the measurement date. The fair value measurement is based on thepresumptionthat the transactiontosell theasset or transfer the liabilitytakesplaceeither:

• In theprincipal market for theasset or liability; or• In theabsenceof aprincipal market, in themost advantageousmarket for theasset or liability.

The principal or the most advantageous market must be accessibleby the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would usewhen pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability togenerate economic benefits by using the asset in its highest and best use or by selling it to anothermarket participant that would use the asset it its highest and best use.

The fair values of assets and liabilities are determined as follows:

a) Financial instruments not measured at fair value:i) The fair value of liquid 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 andfinancial liabilities.

ii) The fair value of fixed rate loans is estimated by comparing market interest rates when the loans weregranted with current market rates offered on similar loans. For match-funded loans, the fair value isassumed to be equal to their carrying value, as gains and losses offset each other. Changes in creditquality of loans within the portfolio are not taken into account in determining gross fair values, as theimpact of credit risk is recognized separately by deducting the amount of the provisions for credit lossesfrom both book and fair values.

iii) The fair values of all other financial instruments not mentioned above are assumed to approximate theircarrying values.

b) Financial instruments measured at fair value:Investments securities classified as available-for-sale are measured by reference to quoted market prices onBahamas International Stock Exchange (BISX).

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December 31, 2014

21. FAIR VALUEMEASUREMENTS (Continued)

c) Fair value hierarchy:The Credit Union adopted the amendment of IFRS 7. This requires the Credit Union to classify fair valuemeasurements using a fair value hierarchy that reflects the significance of the inputs used in making themeasurements.

The fair value hierarchy has the following levels:

• Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities. This levelconsists of listed equity securities traded on the Bahamas International Stock Exchange (BISX).

• Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset orliability, either directly (as prices) or indirectly (derived from prices). The Credit Union has no financialinstruments categorized in this level.

• Level 3 – Inputs for the asset or liability that are not based on observable market data (unobservableinputs). This level includes equity investments and debt instruments with significant unobservablecomponents. The Credit Union has no financial instruments categorized in this level.

The following table analyzes within the fair value hierarchy the Credit Union’s financial assets measured at fairvalue through profit or loss as at December 31, 2014:

Level 1 Level 2 Level 3 Total

Financial instruments:Available-for-sale 60,125$ -$ -$ 60,125$

Level 1 Level 2 Level 3 Total

Financial instruments:Available-for-sale 56,595$ -$ -$ 56,595$



76


December 31, 2014

22. CAPITAL RISK MANAGEMENT

The Credit Union’s objectives when managing capital are as follows:

• To comply with the capital requirements set by the regulator of the Co-operatives Societies;• To safeguard the Credit Union’s ability to continue as a going concern so that it can continue to provide

returns for its members and benefits for other stakeholders; and• To maintain a strong capital base to support the development of its business.

The Credit Union’s Board reviews the capital structure on a quarterly basis. As part of the review, the Boardconsiders the provision of the Co-operativeSocieties Act, 2005, Section 81.4, which states that:

Every society shall ensure that –a) Not less than 10% of its members deposits are kept in a liquidity reserve fund; andb) Statutory reserves, retained earnings and equity shares are at no stage less than 10% of its total

assets, except during the phase in period as permitted by regulations.The table below summarizes the computation of the Credit Union’s regulatory capital and the ratios for the yearsendedDecember 31.

2014 2013

Provision (a)Liquidity reserves deposits 2,170,902$ 1,912,794$Members’ deposits 23,501,601$ 20,193,986$Actual ratio 9% 9%Required ratio 10% 10%Shortfall of regulation -1% -1%

Provision (b)Regulatory reserves 4,493,594$ 4,345,491$Total assets 28,765,426$ 25,210,255$

Actual ratio 16% 17%Required ratio 10% 10%Excess over regulation 6% 7%

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December 31, 2014

23. CONTINGENT LIABILITIES

LitigationThe Credit Union is involved in several actions arising from the normal course of business. Management believesthat the resolution of these matters will not have a material impact on the Credit Union’s financial position.

24. EVENTS AFTER THE REPORTINGPERIOD

There were no material events of significance impacting the Credit Union since December 31, 2014 and up to April30, 2015that require disclosure in the financial statements.


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THE SUPERVISORY COMMITTEE’s REPORT 2014 - 2015MEMBERSOFTHECOMMITTEECHAIRMAN LeslieK.CrawleySECRETARY J.AlmitraJonesOTHER MEMBERS Clement Taylor Secoya Bain - Stuart Tyrone “Rock” Morris

ROLE AND RESPONSIBILITYTheSupervisoryCommittee (“theCommittee”) isaCommitteeestablishedstatutorilyandbyvirtueof thebye-lawsofBICCUandisresponsibleforexaminingthebooksoftheco-operativecreditunion,confirmingcashinstruments,propertyandsecuritiesofthecreditunionandconfirmingthedepositsofthemembers. Further,theSupervisoryCommitteeischargedwiththeresponsibilityofensuringthattheestablishedpoliciesandproceduresarefullyadheredto;andtheassetsofthemembersofBICCUareproperlysafeguarded.

OBJECTIVESTheobjectivesofouraudits/reviewsweretodeterminewhethermanagementwasincompliancewiththeCreditUnion’sstandard operating policies and procedures and statutory duties. In this regard, the Supervisory Committee met monthly providingtheChiefExecutiveOfficerofBICCUwiththeMinutesofeachMeeting.

Ouraudit/reviewsincludedbutwerenotlimitedto: 1. Discussionswithmanagement 2. Reviewandtestingofdocumentsnecessarytoperformtheaudits/reviews 3. Petty cash audits 4. ReviewofDelinquencyReportsandtheexaminationloanfilestoensurecompliancewithloanpolicies

and procedures. 5. Reviewofbankdepositsandbankreconciliations. 6. Discussions on segregation of duties. 7. Reviewofpersonnelfiles. 8. ReviewofBoardMinutes. 9. ReviewofFinancialStatements 10. ReviewofEducationalCommitteeRecords 11. ReviewofExcelReportingSystem(ERS)fortheCentralBank 12. ReviewofBICCU’sOrganizationalChart

MANAGEMENT:Duringtheperiod2014to2015, theCommitteemetwithManagementfrequently inordertoaddresspolicyandlegalconcerns arising from ourmonthly reviews. We are pleased to report that all of our queries were addressed to theCommittee’ssatisfactioninatimelymanner.Moreover,wearedelightedtoreportthatthenewChiefExecutiveOfficer(“CEO”),Mr.MarkBastian,hasbroughtvisionandinsightfulideasforthecontinuedsuccessofBICCU.

Management has set a goal in the next quarter to draft Policies for ensuring that members’ life, property and vehicle insurancesarerenewedonanannualbasis.Further,ininstanceswhenthesepolicieslapse,theCreditUnionwillrenewsuch insurances and add these sums to the members’ outstanding loans.

The Committee is further pleased to note that Management has increased its budget for marketing purposes and has also indicateditsresolvetoengagetheservicesofamarketingfirm,whichwillprovideuswithagreaterpresencetothewidercommunity of The Bahamas.


PETTY CASH:Pettycashfloatwascheckedperiodicallytoensurethatpolicieswerebeingadheredto.TheCommitteeissatisfiedthatthestandardoperatingprocedureregardingpettycashisbeingfollowed.

DELINQUENCY REPORTS:During the lastquarterof thisperiod,BICCUsawthehireofanewCollectionManagerand todate thechangehasbeenseamless.However,theCommitteeisconcernedregardinginformation/notesnowappearingontheDelinquencyReports.

Further,theCommitteeisoftheviewthat BICCUmustensurethatformalAgreementsaredraftedandexecutedbetweentheUnionandtheirAttorneyswhocollectonitsbehalfoutliningthetermsandconditionsofeachrelationshipinparticularregarding fees charged for collection services.

OfparticularnoteisthefactthatmanyofthepromotionalloansapprovedbyBICCUresultindelinquencies.Accordingly,theCommitteehasemphasizedtoManagementthatwemustbemorecarefulwithrespecttothemannerinwhichpromotionalloans are marketed and granted.

Ingeneral,theCommitteeispleasedtoseethattherehasbeenprogresswithrespecttothepresentationoftheDelinquencyReport.

DAILY BANK CASH DEPOSIT:Thedailybankcashdepositswereauditedonamonthlybasisandwhereerrorsinbankdepositswerefound,thesewerebroughtto the attention of the CEO for corrections.

BANK RECONCILIATIONS:Throughouttheperiod,BankReconciliationswereexaminedintheirentirety.Generally,theywerefoundtobeinorderandwheretherewereerrors(minor)thesewerebroughttotheattentionoftheCEO,whichwerecorrected.

LOANS:Duringtheperiod,theCommitteeconsistentlyreviewedarandomsampleofapproximatelytwelvetotwenty(12-20)loanfiles.Wherewefounddiscrepancies,webroughtthesetotheattentionoftheCEOforcorrectionandfolloweduponmattersbeingaddressed.

BOARD MINUTES & EDUCATIONAL RECORDS:BoardMinuteswereperiodicallyreviewed.TheCommitteenotedthatmanyoftheconcernsthatitraisedweresharedbytheBoardandwerebeingaddressedattheirlevel.

TherecordsoftheEducationalCommittee’sactivitieswerereviewed.WearepleasedtoreportthattheEducationalCommitteecontinues to provide excellent service to our members.

TRAININGIn November 2014, several members of the Supervisory Committee attended the Supervisory Committee Training, Value AddedTaxandtheMoneyLaunderingWorkshops.ItisourintentiontoparticipateintheCRUISEWorkshopwithinthenextquarterandwelookforwardtothistrainingsession.


REPORT OF THE CREDIT COMMITTEE TO THE 29TH BICCU ANNUAL GENERAL MEETING

InaccordancewithSection130(1)andSection17(1)(b)and(2)oftheCo-OperativeSocietiesAct2005,theCreditCommitteeof theBahama IslandsCo-operativeCreditUnionLimited (BICCU), fourmemberswere electedby themembershipattheAnnualGeneralmeeting.TanyaBenjaminwaselectedtoservefortwoyears(2013–2015).MaxinePrattandDaveBeckfordwereelectedtoserveforatwoyearperiod(2014-2016)andEuniceJohnsonwaselectedtoserveforoneyear(2014/2015).ShermanE.BethelwasappointedbytheBoardofDirectorsfortheyear2014/2015andserved in the capacity of Chairman.

ThedutiesoftheCreditCommitteeareto: (1) Meetatleastonceamonth. (2) Keepminutesofallmeetings. (3) SubmitamonthlyreporttotheBoardofDirectorsonthefollowing: (a)Securitiesobtainedforloans. (b)Thenumberandcategoryofloansgranted. (c)Applicationsdeniedanddelinquentloans. (d)Submitareportontheabovematterstotheannualmeetingofthecreditunion.

TheCreditCommitteehadaninformaltrainingsessionwiththeformerCEO,Mr.FrancisDaviswhoprovidedguidelinesandanoverviewoftheresponsibilitiesoftheCreditCommittee,particularlythenewmembersthatjoinedtheCreditCommitteeteam.TheCreditCommitteedidnothaveanofficialtrainingsessionfortheyear2014/2015howeverwereceivedbasicknowledgeandassistancetocarryoutourfunctionfromtheManagementandStaffofBICCU.Further,theChairmanoftheCreditCommittee,ShermanE.BethelheldinitialfamiliarizationsessionswiththenewmembersinregardstotheirdutiesandresponsibilityaspartoftheCreditCommitteeofBICCU.WethenstartedourworkbyfirstreviewingfilesofmembersofBICCU,whichwefoundsatisfactoryinmostcases,andreportedaccordingly.TheLoansDepartmenthadissuedaCreditReviewformwhichmakesiteasiertofollowwhetheramemberapplyingforaloanhadmet the compliance requirements.

LOAN SECURITIESMostoftheloansissuedbyBICCUhadsecurityorcollateral,howevertherearesomeloansthatdidnot.Therewerenotalotofpromotionalloanprogramsthisyearandthisneedstobefurtherencouragedtoattractmorenewmembers.

MONTHLY MEETINGSTheCreditCommitteeofBICCUhadasomewhatchallengingyearhoweverwemetasawholeorinpartsatintervalsduringthe2014/2015year.OurreviewcoveredanumberofloanswhichwereprocessedonamonthlybasisfromJune2014-April2015.Goingforward,itishopedthattherewillbemorefrequentmeetingsandmonthlyreportstotheBoardofDirectorsinrespecttofulfillingourdutiesandfunctions.

NUMBER OF LOANS GRANTEDAnumberof loanswerereviewedonamonthlybasisbytheCreditCommitteeandthenecessaryrecommendationsmadetoManagementandtheLoanDepartmentinrespecttothefindingsandobservationsnotedwhilstreviewing.

TYPES OF LOANS GRANTED AND LOANS REJECTEDThe types of loans granted each month varied from promotional, consumer miscellaneous, vehicles, property, medical, bills,educational,vacation, investment,refinance,rent,homeimprovement,householdgoods, funeral,weddingsandlegalfees.Morethanhalfoftheseloanswereinthecategoriesofpromotionalorconsumermiscellaneous.

MONTHLY REPORTSThe Credit Committee again experienced some challenges in presenting monthly reports to the Board of Directors, but


envisionedthatduringtheupcomingyear,thefrequencyofreportswillbemore.OurreviewoftheloanfilestoagreatextentlookedatwhethertheloansweregrantedinaccordancewiththeloanspolicyandguidelinesestablishedbytheBoardofDirectors.Initially,ourobservationcoveredanumberofareasthathadtobeaddressed,namely:noloanofficersignatureonloanapplicationsorLoanAgreements,LoanAgreementswithwrongpaybackdates,noloanapplicationforms,lackofdocumentationinsupportofloan,lackofinformationfortheTDSR,andlackofKYCinformationonsomefiles.Attheendofthisperiodwehaveseenanimprovementintheworkdonebytheloansdepartmentbutwewillcontinuetomonitortoseefurtherimprovements.Asaforementioned,thenewCreditReviewformhasassistedinthis.

DELINQUENT LOANSTherewereanumberofdelinquent loansthathavebeenreviewedandthecollectiondepartmenthasbeenapprisedofthisandeffortsarebeingmadetofindcreativewaystocollectthefundsduetoBICCU.ThePEARLstandardis5%andhasbeenmaintainedforthemostpartduringthisyear.Thisshowsthatthecreditunionisinahealthyposition.ContinuouseffortsbythecollectionsdepartmenttorecoveroutstandingfundsofBICCUareevidentfromthemonthlyreportsreviewed,butthereisstillmoreworktobedone.MoreneedstobedoneandManagementandthecollectiondepartmentsareawareofthis.

A number of loans are under litigation in an effort to collect the funds outstanding.

STATUTORY SUPERVISION

TheCreditCommitteeattendedanumberofworkshopsandretreatsheldbytheDepartmentofCo-operativeandtheCentralBankoftheBahamasontransitionofCreditUnionstothesupervisionoftheCentralBank.Thetransitionisactive and is to be in place real soon.

CARIBBEAN CONFEDERATION OF CREDIT UNION CONFERENCETheCreditCommitteehadonememberattendtheCaribbeanConfederationofCreditUnionConferenceinTheBahamasattheAtlantisResortsinJune2014.WelearntalotfromthisInternationalConventionthatgavetheCreditCommitteemembertheopportunitytonetworkwithaworldwidecommunityofcolleagues.Thishelpedtobroadenthehorizonofthememberattending,tothebenefitofallofBICCU.

EuniceJohnsonwillrepresenttheCreditCommitteeattheCCCUtobeheldinMexicoinJuneoftheyear.TheCreditCommittee is very appreciative of this opportunity.

Finally,theCreditCommitteeasconstitutedisareviewcommitteeandisdoingmuchintryingtoraisethelevelofouroperationasaCreditUnion,whilestayinginlinewithourstatutoryobligations.Thereismuchmoretolearnandwewillcontinuetogiveourbesteffortsovertheremainderofourelectedterm.Attheend,itisourhopethatourpresencewouldhaveenhancedtheoverallsituationofourCreditUnion.Wetakethistimetothankthemembersforgivingustheopportunitytoserve,andlookforwardtocontinueservinginwhatevercapacitythatisrequiredofus.Further,wetheCreditCommitteeadmonishedallthosewhoareinterestedinBICCUanditsfuturetopresentthemselvesforoffice.ThiswillhelpusallunderstandourCreditUnionandhelpusallinfindinginnovativewaystomakeourCreditUnionsustainable for the future.

Sherman E. Bethel Chairman


EDUCATION COMMITTEE’S ANNUAL REPORT 2014 / 2015Education Committee’s ReportTheMissionoftheEducationCommittee:1. ToseeknewavenuestoincreaseandmaintaintheCreditUnion’smembers.2. ToeducateallmembersabouttheCreditUnion.3. Toeducateandpromoteopportunitiesformembersregardingfinancialmatters.4. Topromotetheproduct,servicesandspecialeventsofthecreditUnion.ThefourmemberEducationcommittee(referredtoastheCommittee)selectedtoservefortheyear2014-2015wascomprisedofSoniaGilbert(Secretary),ClaudetteFarrington,LolitaForde,andGladysVeronicaBasdenwastheBoardappointed Chairperson for the Committee.

KIDDS CLUB EVENTSTheKIDDSClubmembershiphas increasedand isup toabout400members.TheCreditUnionusuallyhosts two(2) events annually for the childrenof theKIDDSClub:Back to School (August)&Christmasparty (December).TheEducationCommitteecoordinatestheBack-To-SchoolgiveawayofageappropriateschoolbagsandbooksfortheKIDDSClubmembers.TheannualChristmaspartyisalwaysverysuccessfulandenjoyedbybothparentsandchildren.

MEMBER EDUCATION & MEMBERSHIP DRIVESTherehasbeenanincreaseinmembershipoverthepastfewyears.TheCommitteehasconductedafewmembershipdriveswhichturnedouttobeverysuccessful.ThelatestdrivewasheldattheEnviroscape(Atlantis)March2015,wheretherewereoverfifteensuccessfulnewmembersaddedtotheCreditUnionFamily.

It is always a challenge to retain and increase membership.The Education committee is constantly seeking newinnovativewaystoobtainmembers.OneofthemainfocusesoftheCommitteeistopromotethecreditUnionasameanstosaveandmakeinvestmentsforabrighterfuture.TheCreditUnionmembershipcountattheendofMarch2015was5,310members.

TheEducationCommitteestrivestoincreasemembershipalongwiththemarketingteamanditwasallourpleasuretobeapartoftheteam.WewouldliketheEducationCommitteefortheupcomingyeartocontinuetofocusonsellingtheCreditUnionasthewaytosaveandprepareforthefuture.


29THAGM

RESOLUTIONSResolution #1

RESOLUTION FOR THE PAYMENT OF DIVIDENDS

WHEREAStheauditedfinancialstatementsoftheBahamaIslandsCo-operativeCreditUnionLimited(BICCU)fortheyearendingDecember31,2014werepresentedandacceptedbythisAnnualGeneralMeeting;

BEITRESOLVEDthatthisAnnualGeneralMeetingapprovethepaymentofaneightpercent(8%)dividendtoshareholdersontheirQualifyingSharesheldfortheyear2014;

BEITFURTHERRESOLVEDthat calculation and distribution of these dividends be credited to the individual member accountsnotlaterthanJune30,2015.

Resolution #2

RESOLUTION FOR THE APPOINTMENT OF AUDITORS

BEITRESOLVEDthattheBoardofDirectorsof theBahamaIslandsCo-operativeCreditUnionLimited(BICCU)beallowedtochooseanauditingfirmtoconducttheauditforthefiscalyear2015.


NOTES


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