Home' Trinidad and Tobago Guardian : December 30th 2013 Contents Monday, December 30, 2013 www.guardian.co.tt Guardian
Repairs and maintenance expenses
Rental of premises
Write offs of loans, leases, trade finance and
property, plant and equipment
Information systems expenses
Employee benefits expense comprises:
An operating lease for the lease of office space was entered into on June 1, 2011 for a lease
period of three years. The total future value of minimum lease payments is as follows:
Not later than one year
Later than one year and not later than five years
Later than five years
Legal and professional fees
Internet and telephone systems expenses
Statutory regulations governing the operations of banks and other financial institutions in Trinidad
and Tobago stipulate that an annual premium be paid to the Deposit Insurance Fund of 0.2% of aver-
age deposit liabilities outstanding at the end of each quarter of the preceding year. The Company
paid deposit insurance premiums of $147,993 (2012: $144,935) during the year ended 30
Business and Green Fund levy
The tax on accounting profit (loss) differs from the theoretical amount that would arise using the basic
tax rate as follows:
Profit (Loss) before taxation
Tax calculated at 25%
Income not subject to tax
Tax losses utilised
Tax losses not recognised in current year
The Company has tax losses of $72.6 Million (2012 - $85.1 million) to carry forward against future
taxable income. These losses have not yet been agreed by the Board of Inland Revenue.
Parties are considered to be related if one party has the ability to control the other party or exercise
significant influence over the other party in making financial or operational decisions. A number of
transactions are entered into with related parties in the normal course of business. Related party bal-
ances are separately presented on the statement of financial position and in Notes 5, 7 and 11. The
significant related party income and expenses for the year are as follows:
AIC Financial Group Limited ("AICFG")
Dividend and other income
Management fee - AIC Securities Limited ("AICSL")
Net trading gain
Unrealised gain on available for sale financial asset -
Mutual Funds administered by AICSL
Customer deposit - AICFG
Other borrowed funds - Director
Impairment of subsidiary
Impairment of subsidiary - AICSL
Share of Associate's loss
Share of Associate's loss - AICSL
General administrative expenses
Information system expenses - NCBJ
Other operating expenses
Key management compensation
Directors' fees and expense
The Company's activities expose it to a variety of financial risks. These risks include liquidity risk,
credit risk, and market risk which includes; interest rate risk, foreign exchange risk and price risk.
The Company's overall risk management programme focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the Company's financial performance.
The Board of Directors is ultimately responsible for the establishment and oversight of the
Company's risk management framework. The Board has established Committees and Divisions
for managing and monitoring credit risk, liquidity risk, interest rate risk, foreign exchange risk
and price risk. All the Divisions report periodically to the Committees and the Committees report
periodically to the Board.
This Committee is comprised of three non executive directors. The Committee is responsible for
monitoring relevant risks and statutory compliance and integrity of the Company's financial
records and reports to the Board of Directors.
Internal Audit undertakes both regular and adhoc reviews of risk management controls and
procedures, the results and recommendations of which are reported to the Audit Committee.
The Risk Management Committee provides oversight of the implementation and maintenance
of risk related management systems to ensure an independent control process. The Chief Risk
Officer, through the Credit & Risk Division, is responsible for monitoring compliance with risk
policies and authorisation limits in the four key areas of credit risk, market risk, liquidity risk
and operational risk.
The ALCO is responsible for monitoring and reviewing trends in capital, liquidity and statement
of financial position and the market risk of the investment portfolio of the Company. This is to
ensure adherence to corporate-wide policies and procedures, regulatory requirements and to
recommend and implement appropriate funding plans and actions.
In addition, the ALCO is responsible for monitoring adherence to trading limits and established
policies and procedures and manages the Company's statement of financial position by allo-
cating capital with the aim of maximising returns while minimising the cost of funds. This
Committee is an integral part of the overall risk management framework of the Company.
The Company's overall risk management program seeks to minimise the potentially adverse
effect of risk on the Company's financial performance.
Monitoring and controlling risks is primarily performed based on limits established by the
Company. These limits reflect the business strategy and market environment of the Company
as well as the level of risk that the Company is willing to accept with additional emphasis on
selected industries and regions.
Information compiled is examined and processed in order to identify, analyse and control risks.
This information which consists of several reports are presented and explained to the Board of
Directors, the Risk Management Committee, the Audit Committee and the Asset/Liability
Committee. These reports include but are not limited to aggregate credit exposure, open cur-
rency positions, liquidity ratios, business performance and compliance. On a quarterly basis,
senior management assesses the appropriateness of the allowance for impairment.
Liquidity risk is the risk that the Company will be unable to meet its payment obligations when
they fall due under normal and stress circumstances. To limit this risk, management manages
assets with liquidity in mind, and monitors future cash flows and liquidity on a daily basis. The
Company's liquidity management process is carried out by the Company's Treasurer as fol-
o Day to day funding, managed by monitoring future cash flows to ensure that requirements
can be met. These include replenishment of funds as they mature or are borrowed by
o Maintaining a portfolio of marketable assets that can be liquidated as protection against any
unforeseen interruption to cash flow.
o Managing the concentration and profile of maturities.
The table below presents the maturity profile of the Company's financial liabilities by remain-
ing contractual maturities at the statement of financial position date. The amounts disclosed in
the table are the contractual undiscounted cash flow.
59,739,950 14,849,481 74,589,431
Due to related parties
Payables and accruals
59,498,443 23,527,835 83,026,278
Due to related parties
Payables and accruals
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