Home' Trinidad and Tobago Guardian : January 26th 2017 Contents FirstCaribbean International Bank
(Trinidad and Tobago) Limited
For the year ended October 31, 2016 (Expressed in TT Dollars)
STATEMENT OF CASH FLOWS
Cash flows from operating activities
Income before taxation
Gain on disposal of property, plant and equipment
Loan loss impairment/(writeback)
Writeback of investments
Fair value gains on derivative financial instruments
Interest income earned on investment securities
Interest expense incurred on borrowings from
affiliated companies & other funding instruments
Cash flows from operating profits before changes
in operating assets and liabilities
Changes in operating assets and liabilities:
Net increase in loans and advances to customers
Net increase in statutory deposits with Central Bank
Net increase in Bank excluded in cash equivalents less than 90 days
Net decrease in restricted cash
Net increase in other assets
Net increase/(decrease) in customer deposits
Net increase in other liabilities
Corporation taxes paid
Net cash generated from/(used in) operating activities
Cash flows from investing activities
Purchase of property and equipment
Proceeds from disposal of property, plant and equipment
Net decrease/(increase) in investment securities
Net cash generated from/(used in) investing activities
Cash flows from financing activities
Net proceeds from borrowings from affiliated companies
& other funding instruments
Proceeds from debt issued
Net cash (used in)/generated from financing activities
Net (decrease)/increase in cash and cash equivalents
during the year
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
The accompanying notes form an integral part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
1. General information
FirstCaribbean International Bank (Trinidad & Tobago) Limited (the "Bank") was incorporated in the Republic of
Trinidad and Tobago on 28 October 1997 and was then licensed under the Financial Institutions Act, 1993 to operate
as a Merchant Bank, Mortgage Institution, Confirming/Acceptance House, Finance House/Finance Company and
Trust Company. The Bank commenced business on 16 February, 1998 and is an authorised dealer in foreign
exchange. On 28 May 2007, the Bank was licensed under Section 8(2) of the Financial Institutions Act, 1993, to carry
on the business of banking and this superseded its original license.
The Bank became a wholly-owned subsidiary of FirstCaribbean International Bank Limited (the "Parent") on 31
December 2004 when the Parent completed the purchase of all of the then outstanding share capital of the Bank
from its former shareholders. In February 2005 having received the approval of the Registrar of Companies and the
Central Bank of Trinidad and Tobago to do so, the Bank changed its name from 'The Mercantile Banking & Financial
Corporation Limited' to 'FirstCaribbean International Banking & Financial Corporation Limited'. In May 2007 the
Central Bank of Trinidad and Tobago issued a full commercial banking license and the Bank changed its name to
'FirstCaribbean International Bank (Trinidad & Tobago) Limited'.
The major shareholders of FirstCaribbean International Bank Limited were jointly Canadian Imperial Bank of
Commerce ("CIBC"), a company incorporated in Canada, and Barclays Bank PLC, a company incorporated in
England until 22 December 2006. On that date, CIBC acquired Barclays' interest in the Bank and now owns 91.4%
of the shares of FirstCaribbean International Bank Limited.
The Bank's registered office is located at 74 Long Circular Road, Maraval, Port of Spain.
The principal activities are: inventory and receivables finance, finance leases, medium and long-term finance,
accepting term fixed deposits and structuring, managing and floating debt issues on behalf of corporate clients and
the issue of financial instruments under structured arrangements, foreign exchange dealing and provision of trustee
services to other financial institutions.
The number of employees in the Bank as at 31 October 2016 amounted to 55 (2015: 51).
2. Basis of preparation and summary of significant accounting policies
2.1 Basis of presentation
These financial statements have been prepared on a historical cost basis except for available-for-sale
investment securities through equity and all derivative financial instruments, which have been measured at fair
value. The carrying value of recognised assets that are hedged items in fair value hedges, and otherwise carried
at amortised cost, are adjusted to record changes in fair value attributable to the risks that are being hedged.
The financial statements are presented in Trinidad & Tobago dollars, and all values are rounded to the nearest
thousand except where otherwise indicated.
Statement of compliance
The financial statements of the Bank have been prepared in accordance with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
2.2 Significant accounting judgements and estimates
The preparation of financial statements in conformity with IFRS requires management to make certain
significant estimates and judgements that affect amounts reported in the financial statements and
accompanying notes. Actual results could differ from these estimates.
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances. Other
disclosures relating to the Bank's exposure to risks and uncertainties includes:
- Capital management Note 19
- Financial risk management and policies Note 24
- Sensitivity analyses disclosures Note 24
The estimates and judgements that have a significant risk of causing material adjustments to the carrying
amounts of assets and liabilities within the next financial year are discussed below.
i) Fair value of financial instruments
Certain financial instruments are recorded at fair value using valuation techniques in which current market
transactions or observable market data are not available. Their fair value is determined using a valuation
model that has been tested against prices of or inputs to actual market transactions and using the Bank's
best estimates of the most appropriate model assumptions. Models are adjusted to reflect the spread for
bid and ask prices to reflect costs to close out positions, counterparty credit and liquidity spread and
limitations in the model.
ii) Impairment losses on loans and advances
The Bank reviews its individually significant loans and advances at each reporting date to assess whether
an impairment loss should be recorded in the statement of income. In particular, judgement by
management is required in the estimation of the amount and timing of future cash flows when
determining the impairment loss. In estimating these cash flows, the Bank makes judgements about the
borrower's financial situation and the net realisable value of collateral. These estimates are based on
assumptions about a number of factors and actual results may differ, resulting in future changes to the
allowance for impairment losses.
Loans and advances that have been assessed individually and found not to be impaired and all individually
insignificant loans and advances are then assessed collectively, in groups of assets with similar risk
characteristics, to determine whether provisions should be made due to incurred loss events for which
there is objective evidence but whose effects are not yet evident.
The collective assessment takes account of data from the loan portfolio such as credit quality, levels of
arrears, credit utilisation, loan to collateral ratios, concentrations of risks and economic data, country risk
and the performance of different individual groups.
iii) Income taxes
The Bank is subject to taxation and significant estimates are required in determining the provision for
income taxes. Where the final tax outcome is different from the amounts that were initially recorded, such
differences will impact the income tax and deferred tax provisions in the period in which such
determination is made.
Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable
profits will be available against which the losses can be utilised. Management's judgement is required to
determine the amount of the deferred tax asset that can be recognised, based upon the likely timing and
level of future taxable profits together with future tax planning strategies.
iv) Impairment of available for sale investments
Management makes judgements at each reporting date to determine whether available-for-sale
investments are impaired. These investments are impaired when the carrying value is greater than the
recoverable amount and there is objective evidence of impairment.
2.3 Adoption of new accounting policies
The accounting policies adopted are consistent with those of the previous financial year with the exception of
those impacted by new and amended standards and interpretations.
New and amended standards and interpretations
There were no new standards and amendments which apply for the first time in 2016 that affect the financial
statements of the Bank.
FINANCIAL STATEMENTS (continued)
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