Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698930247896.pdf (Trinidad and Tobago)
LOOKING AHEAD ww ww w.cen w www.central-bank.org.tt ntr CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 OUR PURPOSE The primary purpose of the Bank is the promotion of monetary, credit and exchange conditions most favourable to the development of the economy of Trinidad and Tobago.

CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 d CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 THE MANDATE CENTRAL BANK ACT CHAPTER 79:02 3.
(1) There is hereby established a Bank to be known as the Central Bank of Trinidad and Tobago.

(2) The Bank is hereby created a body corporate.
(3) The Bank shall have as its purpose the promotion of such monetary, credit and exchange conditions as are most favourable to the development of the economy of Trinidad and Tobago, and shall, without prejudice to the other provisions of this Act— (a) have the exclusive right to issue and redeem currency notes and coin in Trinidad and Tobago; (b) act as banker for, and render economic, financial and monetary advice to the Government; (c) maintain, influence and regulate the volume and conditions of supply of credit and currency in the best interest of the economic life of Trinidad and Tobago; (d) maintain monetary stability, control and protect the external value of the monetary unit, administer external monetary reserves, encourage expansion in the general level of production, trade and employment; (e) undertake continuously economic, financial and monetary research; (f) review- (i) legislation affecting the financial system; and (ii) developments in the field of banking and financial services, which appear to it to be relevant to the exercise of its powers and the discharge of its duties; and generally, have the powers and undertake the duties and responsibilities assigned to it by any other law.
e CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 LETTER OF TRANSMITTAL Jwala Rambarran Governor Senator the Honourable Larry Howai Minister of Finance and the Economy Eric Williams Finance Building Independence Square PORT OF SPAIN December 31, 2014 Dear Minister Howai, In accordance with Section 53(1) of the Central Bank Act Chap.79:02, I enclose herewith the Report of the Central Bank of Trinidad and Tobago for the year ended September 30, 2014, together with a copy of the Annual Audited Statement of Accounts certified by the Auditors.
Yours sincerely, JWALA RAMBARRAN i CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 ii CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 TABLE OF CONTENTS Governor’s Foreword Leadership Team • Board of Directors • Executive Management • Senior Managers • Managers • Assistant Managers Organisational Structure Review 2013/2014 • Highlights: Bank Activities Rekindling Economic Growth Fostering Confidence in the Financial System Managing Foreign Reserves in Volatile Global Markets Undertaking Relevant and Timely Economic Research Improving Consumer Financial Protection Banker to Government Building Human Capital and Knowledge Communications: The New Monetary Policy Tool Celebrating Our Golden Jubilee: A Commemoration in Photos Financial Statements • Report of the Auditor General • Consolidated Financial Statements • Notes to the Consolidated Financial Statements iv vi viii ix x xii xiii 1 3 7 11 11 12 12 16 17 21 25 27 31 iii CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 GOVERNOR’S FOREWORD With Trinidad and Tobago’s new-found political independence in 1962, a central bank became necessary not just to demarcate the country’s break with the past colonial monetary regime but, more importantly, to give order and direction to economic development, fostering monetary stability and confidence in the overall financial system.
On December 12th 1964, Sir Solomon Hochoy, the Governor General, proclaimed sections of the Central Bank Act, Chapter 79:02.

The Central Bank of Trinidad and Tobago was born.

The purpose of the Central Bank was enshrined in its founding legislation as: “the promotion of such monetary, credit and exchange the economic conditions as are most favorable to Jwala Rambarran Governor Chairman of the Board development of Trinidad and Tobago”.
This broad developmental role would help shape the judicious character of Central Bank in the five decades of its existence, defining its interdependent relationship to Government, both as banker and economic advisor, yet giving it enough independence to exercise its full powers to implement monetary policy and supervise the financial system.
As the Central Bank marked its 50th Anniversary in 2014, it is worth reflecting on the seminal year of 2009 when Trinidad and Tobago’s economy endured three almost simultaneous shocks: eruption of the global financial crisis, an abrupt end to the country’s third energy boom, and unexpected failure easing stimulus programme to an end, the expectation is for an increase in the Fed funds rate in 2015.
If this occurs, it will be the first rate hike in eight years and could have significant implications for emerging market economies, including Trinidad and Tobago.

In this climate of uncertainty, 2013/14 was a watershed year of change at Central Bank.
The Bank restructured and streamlined its internal processes and operations, from expanding its outreach activities to demystify management of the financial system through inclusion, openness and information sharing with its many stakeholders to transforming the way critical economic information is organized and of CLICO, the largest insurance company.

Yet, Trinidad and reported.


Tobago demonstrated economic resilience in the face of these triple shocks mainly due to the policy response and coordination between Central Bank and Government.

In 2015, such policy collaboration will be again required in the face of sharply falling energy prices.

In fiscal 2013/2014, it became evident to global policymakers that recovery from the global crisis was taking longer than expected.
More than half a decade onwards many countries are still struggling with painful legacies of the crisis, including extraordinarily high debt and soaring unemployment.

The subdued global economic recovery in 2014 was due to further stunting of China’s growth, Japan’s unexpected fall into recession, anaemic growth in the Eurozone and lower momentum in previously dynamic emerging markets, particularly Russia.
In contrast, the United States was one of the few advanced economies to enjoy strengthening growth prospects in 2014.

With the U.S. Federal Reserve having brought its quantitative iv Recognizing communications as the new monetary policy tool, Central Bank broke new ground through the introduction of its Monetary Policy Forum with presentations in Debe, south Trinidad (November 2013) and Tobago (April 2014).
At each Forum, the Bank explained the thinking behind its monetary policy actions directly to business organizations and individuals as a means of initiating a wider understanding in the national sphere of how the Bank thinks and acts.

It is the assured view of Central Bank that greater public understanding of the national economy and financial system by firms and individuals is critical to empowering stakeholders and promoting more informed decision-making.
This is particularly crucial as Trinidad and Tobago continues to negotiate the challenge of navigating the economy back onto a path of sustained growth in the post-2008 global economy.

The demanding nature of this challenge was evident in 2013/14 when recovery of the Trinidad and Tobago economy CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 recorded over the previous two years abruptly stalled, market operations.
New ceilings set by the Treasury Bills necessitating a downward revision of growth projections.

The Act and Treasury Notes Act give the Bank an additional $25 main contributing factor was an unanticipated decline in the billion in Treasury Securities for absorbing excess liquidity in performance of the energy sector, in particular natural gas the banking system.

and LNG production, due to supply disruptions.


The result was an estimated contraction of 1.5 percent in energy output After keeping its policy rate unchanged at a cyclical low of in the first nine months of 2014.

2.75 percent for the past two years, the Bank on September 26th 2014 increased its ‘Repo’ rate by 25 basis points to Such decline would have taken the economy back into 3.00 percent.
The announcement brought an end to the negative territory were it not for the higher than anticipated accommodative monetary stance which had been adopted performance of the non-energy sector which grew by just by the Bank in 2009 following the global economic collapse.

It over 2 percent over the same period, mainly in construction, also signaled a policy shift designed to insulate the economy distribution and finance.

from anticipated increases in U.S. interest rates.


This policy interest rate adjustment will be of utmost importance to our One consequence of the improved performance of the economy’s health in 2015. non-energy sector was a heightened demand for foreign High liquidity, combined with the expansion in economic exchange reflected in rapid increases in new car sales and activity and a slowdown in agricultural output, placed online credit card purchases.
The Bank stepped in with a pressure on prices resulting in headline inflation accelerating programme of foreign exchange interventions to alleviate towards double digits from the three percent recorded at the shortfalls, providing an estimated US$1.4 billion or just over beginning of 2014.

The main causal factor was an escalation 25 percent of the foreign exchange supply over the period in food price inflation.
As the Trinidad and Tobago economy January-September 2014. heads into 2015, keeping inflation in check will remain a priority of the Bank.
Based on an analysis of the foreign exchange market over the 20-year period since the market was liberalized in April 1993, In presenting this Annual Report, I pay tribute to the illustrious and the changing profile of demand, the Bank introduced two succession of Governors whose signatures have graced fundamental changes to the foreign exchange distribution these reports over the past five decades: Mr. John Pierce system in April 2014.
The improvements were introduced (1964 to 1966); Dr. Alexander McLeod (1966 to 1969); Mr. to re-align the Bank’s foreign exchange allocation system Victor Bruce (1969 to 1984); Dr. Euric Bobb (1984 to 1988); to match expanding imbalances in the domestic foreign Mr. William Demas (1988 to 1992); Mr. T. Ainsworth Harewood exchange market.
The first measure expanded access to the (1992 to 1997); Mr. Winston Dookeran (1997 to 2002) and my system by including all 12 licensed authorized dealers, only immediate predecessor, Mr. Ewart S. Williams (2002 to 2012).

eight of whom had previously participated, despite having the necessary approvals for years.
The second change Each Governor has contributed immeasurably to the introduced greater flexibility in use of the auction system to development of the Central Bank as a strong and stable meet the highest demand based on price.

institution with the expert and dynamic capacity to navigate global and domestic conditions.

This enhanced distribution system, coupled with more timely and sizable interventions, was aimed at meeting trade related demands.
As should be expected, the new system has been As it enters the second 50 years of operation, Central Bank finessed in line with experience.

At the end of fiscal 2013/14, is confident changes introduced over the past year will better Trinidad and Tobago was in the healthy position of having equip the institution for managing the economic uncertainty enough reserves to cover over one year of imports.

ahead.
ahead.

We will strive to create and maintain an environment Changes in monetary policy were also introduced to deal of our nation will continue to guide our work as the silent with sustained high liquidity levels with the potential risk servant of the people and guardian of financial stability.

conducive to sustainable growth for years to come.

The good of a build-up in inflationary pressures.


Internally, the Bank restructured its monetary policy decision-making framework to include external monetary and business expertise on the Monetary Policy Committee, provide greater scope for more deliberate thought and analysis and enhanced public awareness of monetary policy decisions.
Externally, the legislative framework was upgraded in December 2013 to strengthen the Bank’s liquidity management capacity and increase its scope for open Governor Chairman of the Board Jwala Rambarran v CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 BOARD OF DIRECTORS Executive Directors Mr. Jwala Rambarran Chairman of the Board Governor Ms. Joan John Executive Director Deputy Governor Dr. Alvin Hilaire Executive Director Deputy Governor vi CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 BOARD OF DIRECTORS Non-Executive Directors Mr. Carlyle Greaves Date of Appointment: April 11, 2012 Mr. Vishnu Dhanpaul Date of Appointment: September 18, 2013 Mr. Steve Seetahal Date of Appointment: May 18, 2011 Mr. Joseph Timothy Date of Appointment: July 25, 2014 Mr. Trevor Sudama Date of Appointment: July 25, 2014 Mr. Raoul John Date of Appointment: July 25, 2014 vii CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 EXECUTIVE MANAGEMENT Mr. Jwala Rambarran Chairman of the Board Governor Ms. Joan John Executive Director Deputy Governor Dr. Alvin Hilaire Executive Director Deputy Governor Mr. Carl Hiralal Inspector, Financial Institutions viii CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 SENIOR MANAGEMENT Mrs. Nicole Crooks Senior Manager, Human Resources and Corporate Communications Mr. Alister Noel Senior Manager, Operations Ms. Dianne Pierre Senior Manager, Project Management and Corporate Services Ms. Marie Borely Chief Financial Officer Ms. Suzanne Roach Financial Services Ombudsman, Office
 of the Financial Services Ombudsman Mrs. Michelle Chong Tai-Bell Chief Actuary Ms. Wendy Ho Sing Deputy Inspector, Financial Institutions Mr. Michael James Senior Manager, Research, Statistics & Reserve Management Ms. Arvinder Bharath Deputy Inspector, Financial Services Ms. Zoraida Dookie Senior Manager Information Resources ix CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 MANAGERS Mr. Naveen Lalla Manager, Insurance Supervision Ms. Wendy D’Arbasie Manager, Banking Operations Mr. Gaston Harrison Manager, Employee and Industrial Relations Mrs. Heather Huggins Manager, Human Resources Ms. Nicole Chapman Manager, Legal and Corporate Secretariat Services Mrs. Michelle Francis-Pantor Manager, Supervision Mrs. Denise Rodriguez-Archie Manager, Internal Audit Mrs. Angela Henry-Small Manager, Statistics Department x CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 MANAGERS Mrs. Hiliary Wilkins Manager, KIM Mr. Christopher Subryan Manager, Finance & Accounting Mr. Vaughn Halliday Manager, Facilities and Property Manangement Mrs. Sharda Maharaj-Ramjattan Manager, FIDA.
Ms. Suzanne Nero Manager, Pension Supervision Ms. Joanne Seeram Manager, ITS Ms. Charlene Ramdhanie Manager, Corporate Communications Department Mrs. Sherry Bachew-Rudd Manager, Policy and Market Conduct Mr. Garnett Samuel Manager, Domestic Market Operations xi CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 ASSISTANT MANAGERS Mr. Sherwin Kerr Security Operations Officer, Security Ms. Patricia Babwah Assistant Manager, Legal Mr. John Griffith Assistant Manager, Risk Management Mr. Kendall Cuffy Assistant Manager (Ag.
), Market Conduct Miss Leslie-Ann Nicole Des Vignes Assistant Manager, Payment Systems Ms. Loren Harrinauth Asst Manager, ITS - Business Applications Ms. Isha Marshall Assistant Manager, Finance & Accounting Mrs. Lisa Mary Quintyne Assistant Manager, ITS-Infrastructure Mrs. Marlene Quirico-Callender Assistant Manager, Administrative Services Ms. Natalie Roopchandsingh Assistant Manager (Ag.
), Insurance Supervision Mr. Dominic Stoddard Assistant Manager, Statistics Mrs. Sandra Swan-Daniel Assistant Manager, Finance & Accounting xii CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 g n o h C e l l e h c M i l l e B - - s i c n a r F e l l e h c M i i i n o s v r e p u S , r e g a n a M ) s k n a B - n o N & s k n a B ( i s n o s n e P , r e g a n a M o r e N e n n a z u S e c n a r u s n I , - d d u R w e h c a B y r r e h S & y c i l o P , ) .
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t s s A , r e g a n a M l a g e L z e u g i r d o R , r e g a n a M e i h c r A - e s i n e D l a n r e t n I t i d u A xiii I L A N O T A Z N A G R O I E R U T C U R T S 4 1 0 2 , 0 3 R E B M E T P E S T A S A 4 1 0 2 , CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 xiv CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 REVIEW 2013-2014 REVIEW 2013-2014 HIGHLIGHTS: BANK ACTIVITIES STRENGTHENING THE REGULATORY ENVIRONMENT § Central Bank entered into a strategic collaboration with the Trinidad and Tobago Securities and Exchange Commission (TTSEC) and the Financial Intelligence Unit (FIU) to promote information exchange for better management of systemic risk.
In January 2014, the Bank signed a Memorandum of Understanding (MOU) with TTSEC which was followed four months later by the signing of two MOUs between CBTT and the FIU and TTSEC and FIU.

The collaboration among the three regulators is designed to strengthen their individual and joint capacity for protecting the financial system from being used for money-laundering, funding of terrorism and other illegal activities.
§ Central Bank embarked on a process to have five key financial institutions declared Systemically Important Financial Institutions (SIFIs) which would facilitate them being brought under its regulatory perimeter.

The five SIFIs are the Unit Trust Corporation, the National Insurance Board, Home Mortgage Bank, Trinidad and Tobago Mortgage Finance and the Agricultural Development Bank.

§ Further strengthening of the regulatory environment proceeded with work on the Insurance Bill and the Credit Union Bill.
In January 2014, the Central Bank disseminated its Consultation Paper on the “Protection Fund for Deposits and Shares Held in Credit Unions” for comment by the Credit Union sector.

MODERNISING BANK NOTES Central Bank initiated the process of switching to the Polymer series of bank notes as a safer, cheaper and greener alternative to existing cotton-based banknotes.

The new $50 note will be the first Polymer note in the Caribbean.
Polymer notes have a life of at least two times longer than cotton notes currently in use, making them more cost-efficient and environment-friendly.

Polymer notes come with state-of-the- art security features that deter counterfeiters while ensuring confidence in bank notes.
EXPANDING FINANCIAL INCLUSION In line with its commitment under the Maya Declaration of the Alliance for Financial Inclusion (AFI), Central Bank launched the Financial Inclusion Development Agency (FIDA) in Port of Spain in September 2014, becoming the first Caribbean country to do so.

Financial inclusion is defined as giving people the knowledge to make responsible decisions about managing their money.
In separate signing ceremonies, Central Bank signed MOUs with Suriname and Guyana, respectively, under which the Bank agreed to transfer knowledge on financial inclusion.

Governor Jwala Rambarran signals the official start of the AFI GPF 2014.

At left is Dr Alfred Hannig, Executive Director of AFI and at right, Amando M. Tetangco, Jr., Governor of the Bangko Sentral ng Pilipinas.
Professor Patrick Watson, Chairman of the TTSEC, Governor Rambarran and Susan S. François, Director of the Financial Intelligence Unit, at the signing of the AML MOU.

1 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 REVIEW OF ACTIVITIES 2013-2014 INDEXING BUSINESS CONFIDENCE In partnership with the Arthur Lok Jack Graduate School of Business, Central Bank launched the Business Confidence Index in December 2013.
The Business Confidence Index measures the business sector’s perceptions of prevailing economic conditions in Trinidad and Tobago and is based on responses to quarterly Business Confidence Surveys.

ENHANCING DATA COLLECTION To support and strengthen the collection of key economic data, Central Bank signed an MOU with the Central Statistical Office (CSO) in June 2014 under which the Bank will fund the recruitment of statisticians for three projects: national accounts data, trade data and labour force data.
BUILDING EXPERTISE its aggressive To build and strengthen its supervisory capacity, the Bank continued recruitment of experienced professionals from the private sector for key supervisory positions in the Financial Institutions Supervision Department.

These included a Second Deputy Inspector and an Anti- Money Laundering expert.
SUPPORTING TRAINING To celebrate Central Bank’s 50th Anniversary, the Bank offered five De La Rue scholarships: three in the field of Economics, one in Finance and one in Actuarial Science.
These are priority areas for national skills-building ENGAGING THE PUBLIC Consistent with its policy to take central banking to the people and increase public awareness of national monetary developments, Central Bank took the historic decision to convene its newly created Monetary Policy Forum within communities outside of Port of Spain.

In December 2013, the inaugural Monetary Policy Forum was held in Debe, south Trinidad.

This was followed by a Forum in Tobago in April 2014.
Both were very well attended and received by members of the business community and general public.

2 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 REKINDLING ECONOMIC GROWTH Growth Manufacturing After an expansion of 2.1 per cent in the fourth quarter of 2013, the Trinidad and Tobago economy slowed over the first three quarters of 2014, growing by a disappointing 0.7 percent.
This was due mainly to an unexpected decline in the performance of the energy sector which was, however, largely offset by sustained growth in the non-energy sector.

Energy Sector Activity in the energy sector rose by 2.4 per cent in the fourth quarter of 2013, an improvement over the decline of 3.9 per cent of the previous quarter.
However, a series of shutdowns and stoppages by the two largest natural gas producers resulted in a contraction of 1.5 per cent in energy production in the nine months from January to September 2014.

Over the first three quarters of 2014, the exploration and production sector experienced a decline of 1.3 per cent, the refining sub-sector also declined by an average of 4.2 per cent as a result of maintenance work at Atlantic LNG and lower throughput at the Petrotrin oil refinery.
However, petrochemical output increased by an average of 3.7 per cent over the same period.

Non-Energy Sector The non-energy sector maintained the growth momentum which had carried it from 1.9 per cent in the fourth quarter of 2013 to an average of 2.2 per cent over the period January to September 2014.

This was largely due to robust activity in the construction, distribution and finance sub-sectors.
Construction posted an increase of 2.1 per cent in the last quarter of 2013 which was further boosted to an average growth of 3.1 per cent over the first three quarters of 2014.

A key contributor to construction activity was sales of local cement which rose by almost 8.5 per cent in the period January – September 2014.
Higher construction activity reflected several on-going, large public sector projects such as the Point Fortin Highway, the Children’s Hospital, the National Aquatic Centre and the Port at Point Galeota with further impetus from new private sector projects.

In the distribution sector, the driver of growth was new car sales with rates remaining in double digits.

Buoyant commercial bank activity fuelled growth of 3.2 per cent in the finance, insurance and real estate sector.
The manufacturing sector trended upwards to 1.2 per cent over the first nine months of 2014, as higher production of cement and other construction-related products boosted output in chemicals and non-metallic industries.
Untapped potential within the manufacturing sector continued to be high, as companies utilized just below two thirds of their existing capacity The capacity utilization rate for manufacturing firms in chemicals and non-metallic minerals industries, however, increased from 63.4 per cent to 72.7 per cent during the second quarter of 2014.

Agriculture The agriculture sector grew by an average of 3.5 per cent over the nine-month period January-September 2014.
Unemployment The unemployment rate remained generally stable having hit a historic low of 3.1 per cent in the first quarter of 2014.

Liquidity The financial system continued to be marked by high liquidity levels.

To contain the accumulation of excess liquidity in the system and keep a lid on the threat of inflation, the Bank utilized a mix of policy and legislative tools.
In early December 2013, Central Bank’s liquidity management framework was enhanced with an increase in the borrowing limits under the Treasury Bills Act (to $30 billion from $15 billion) and the Treasury Notes Act (to $15 billion from $5 billion).

In 2014, the Bank expanded its net open market operations of Treasury securities, facilitated the issue of a liquidity-sterilization Treasury bond in June 2014 and rolled over commercial banks’ special fixed deposits which had matured during the year.
In September 2014, Central Bank ended four years of an accommodative monetary stance when it increased the Repo rate by 25 basis points to 3.00 per cent, signaling the end of an era of record low interest rates.
3 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 TABLE I SELECTED ECONOMIC INDICATORS Real GDP Growth (%) (2000 = 100)1 Energy Sector Non-Energy Sector Agriculture Manufacturing Construction Financial Services Inflation Rate (%)2 (period average) (end of period) Unemployment Rate (%)3 Overall Central Government Operations Surplus(+)/Deficit(-), (end of fiscal year) Balance of Payments Current Account Balance Surplus(+)/Deficit(-) Public Sector Debt, (end of fiscal year)4 Central Government External Debt, (end of fiscal year) Memorandum Items: Central Government External Debt in US$M (end of fiscal year) Debt Service Ratio (%; (end of fiscal year))5 W.T.I.
(US$/barrel, annual average) 2009 2010 2011 2012 2013 Jan-Sep-14 -3.4 1.3 -6.6 -0.7 -6.6 -2.5 -1.8 7.0 1.3 5.3 -0.3 1.8 -1.8 -15.7 0.8 -5.8 2.5 10.5 13.4 5.9 (IN PER CENT OF GDP) -5.0 8.5 30.9 7.2 0.1 19.7 35.3 6.7 -1.2 -3.7 0.6 1.2 1.7 -2.4 0.9 5.1 5.3 4.9 - 0.7 11.9 32.6 6.3 0.3 -1.9 1.8 -2.4 -1.3 -0.9 2.5 9.3 7.2 5.0 -1.4 3.3e 41.2 6.7 2.1 0.2 3.5 0.3 2.6 3.0 4.8 5.2 5.6 3.7 -2.9 6.7e 38.6 5.4 0.7 -1.5 2.2 3.5 1.2 3.1 3.2 4.6 7.8 3.1* -1.5 8.5e 40.2 7.3 1,421.9 1,561.4 1,638.6 1,860.6 1,692.8 2,254.9 3.7 61.8 1.1 79.4 0.8 95.1 0.9 94.2 0.9 97.9 1.1 99.8 8,651.6 9,070.0 9,822.7 9,200.7 9,987.0 10,119.3** SOURCES: Central Bank of Trinidad and Tobago, Central Statistical Office and Ministry of Finance.
P Provisional.

e - Central Bank estimates for the period March 2012 to September, 2014 are based on comparative mirror trade data with the rest of the world and supplemental data on activity in the energy sector.

1/ Growth rates are derived from the Central Bank's Quarterly Index of Gross Domestic Product.

2/ Changes in the Index of Retail Prices (RPI), January 2003 = 100.

3/ This represents the average of the four quarters.
4/ Includes the external and internal debt of the Central Government as well as contingent liabilities and excludes Treasury Bills, OMO Bills and Notes, Treasury Bonds and Liquidity Bonds.

5/ This is defined as the ratio of external public sector debt service to exports of goods and non-factor services.

* For the period January - March.

** As at September 2014.


4 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 REKINDLING ECONOMIC GROWTH Inflation Foreign Exchange Market Sales of foreign currency by authorized dealers (to the public) during the first nine months of 2014 amounted to US$5,183 million, 4.5 per cent higher relative to the amount sold over the same period in 2013.

Despite lower conversions from the energy sector, purchases of foreign currency from the public (except from the Central Bank) totaled US$4,228 million.
This was 2.6 per cent higher than purchases over the first nine months of 2013.

The system’s net sale gap amounted to US$955 million in the first nine months of 2014.

In order to fill this gap and support the market, the Central Bank sold US$1,190 million to authorized dealers.
As a result, the weighted average selling rate appreciated to TT$6.3680 to US$ 1.00 dollar at the end of September 2014, up from the rate of (TT$6.4593 = US$1.00) at the end of December 2013. International Capital Markets After an absence of six years, the Government of Trinidad and Tobago successfully returned to the international capital markets in December 2013, issuing a US$550 million Eurobond which was oversubscribed by a factor of 9.9.
Stock Market Over the period January to September 2014, the local stock market posted its first nine-month decline since 2009.

On a year-to-date basis, the Composite Price Index (CPI) and the All Trinidad and Tobago Index (ATI) were down 3.4 per cent and 0.9 per cent, respectively.

The cross-listed stocks continued to underperform due to the sluggish performance of the regional economies.

The Cross Listed Index fell by 16.9 per cent in the first nine months of 2014.
The Banking index was the worst performing sub-sector over the period with four out of the five listed banks experiencing price declines.

Total stock market capitalization stood at $109.1 billion at the end of September 2014.
After three consecutive quarters of relative calm, inflationary pressures picked up in the third quarter of 2014, driven primarily by food prices and higher consumer spending as evidenced by strong growth in consumer lending and a rapid increase in the sales of new motor vehicles accompanied by increased government spending.
At the end of December 2013, core inflation, which excludes the impact of food prices, was low and stable at 2.0 per cent while headline inflation increased to 5.6 per cent, up from 4.4 per cent in the previous month.

By the third quarter of 2014, headline inflation had gained momentum, rising on a year-on-year basis from an average of 3.4 per cent during the first six months of 2014 to almost 8.0 per cent by the end of September 2014.
During the year under review, food inflation rose to 18.2 per cent after averaging 4.4 per cent over the first six months of 2014.

Main contributing factors were vegetable prices and, to a lesser degree, fruit and food products.
The increase in vegetable prices reflected lower domestic agricultural output which was partly due to the cessation of planting under the Caroni Green Initiative, creating a demand push on prices Lending For the first nine months of 2014, growth in credit to the private sector averaged 6.5 per cent, up from an average increase of 2.8 per cent in the corresponding period in 2013.
Commercial banks drove the increase in overall lending, with bank credit averaging 7.0 per cent over the first three quarters of 2014, compared to 4.6 per cent over the comparable period in 2013.

In addition, credit extended by non-bank financial institutions expanded in eight of the first nine months of 2014.

Over the nine months leading up September 2014, business lending increased to an average of 4.5 per cent compared to an average decline of 3.8 per cent over the same period in 2013.
Consumer loans continued to accelerate into the third quarter of 2014.

A disaggregation of consumer credit for the third quarter of 2014 showed strong growth of loans for the purchase of motor vehicles (20.6 per cent) and credit card purchases (9.0 per cent).

Housing-related loans maintained their upward trend.

Banks’ weighted average lending rate declined steadily from 8.51 per cent in December 2013 to 8.03 per cent by September 2014.
With deposits rates steady at 0.55 per cent over the first nine months of 2014, the spread between the weighted average lending and deposit rates narrowed by 48 basis points from December 2013 to 7.48 per cent in September 2014.

5 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Bond Market Fiscal Operations Over the period January to September 2014, activity on the domestic primary bond market was generally on par with the corresponding period a year earlier.
During the first nine months of 2014, four bond issues were raised totaling approximately $4.2 billion.

This is in contrast with six primary issues which raised just under $4.0 billion in the corresponding period in 2013.

The Central Government and state enterprises were the main borrowers on the market.

In addition to the liquidity sterilization Treasury bond in June 2014, the Central Government also issued a $1.5 billion, 12-year, 2.8 per cent coupon bond for budgetary support in September 2014.
Trading activity on the Trinidad and Tobago Stock Exchange’s (TTSE) secondary Central Government bond market was significantly lower over the period January to September 2014.

In the first nine months of 2014, bonds with a total value of $455 million were traded.

This was much lower than the value ($1.4 billion) traded over the corresponding period last year.

With the exception of a few short to medium- term tenors, yields on Treasury securities generally trended upwards in the nine months of 2014.
The benchmark 10-year TT Treasury bond yield rose to 2.71 per cent in September, up from approximately 2.50 per cent at the end of 2013.

Mutual Funds Aggregate mutual funds under management stood at $41.4 billion in September 2014, representing an increase of 5.1 per cent from year-end 2013.

Contributing to the stronger growth of the mutual fund industry was an increase in equity funds under management which rose by 11.5 per cent in the first nine months of 2014.
Income funds under management recovered by 3.0 per cent after contracting by about 1.0 per cent one year ago.

In terms of currency profile, both foreign currency and TT dollar-denominated funds improved in the first nine months of 2014.

On a year-to-date basis, foreign currency-denominated funds expanded by 4.8 per cent in September 2014 compared to a fall of 4.9 per cent in the same period in 2013.
The TT dollar-denominated funds grew by 5.1 per cent over the nine-month period, compared with a smaller increase of 2.6 per cent in the corresponding period of 2013.

Commercial Bank’s Excess Reserves Commercial banks’ excess reserves held at the Central Bank averaged roughly $6.7 billion daily over the first 10 months of 2014, compared with $6.0 billion in the corresponding period of 2013.
Revised estimates of Central Government’s operations during fiscal 2013/2014 pointed to a more favourable outturn than initially anticipated.

The Central Government incurred a fiscal deficit of $2,720 million (1.5 per cent of GDP) during October 2013 to September 2014 which is significantly lower than the original budget estimates of $6,357.1 million.

The smaller fiscal deficit was primarily due to higher collections from the non-energy sector.
Balance of Payments During the first nine months of 2014, the balance of payments registered an overall surplus of US$132.3 million, an improvement from the US$227 million surplus recorded in the corresponding period in 2013.

The current account, however, posted a smaller surplus of US$1,797.5 million when compared with the same period one year earlier.
The smaller current account surplus reflected a lower merchandise trade balance arising mainly from decreased natural gas and crude oil productions levels and higher net outflows of investment income.

On the other hand, the capital and financial account recorded a narrower deficit of US$1,665.2 million in the first nine months of 2013.

Net foreign direct investment fell slightly to US$703.7 million, partly due to higher reinvestments by energy companies.
Meanwhile, portfolio investment recorded a net outflow of US$104.6 million, due to increased purchases of foreign securities by the financial sector.

The level of gross official reserves rose to US$10,119.3 million or 11.5 months of prospective imports of goods and non-factor services as at September 2014. Business Confidence The outlook of the business community was cautiously optimistic in September 2014.
The Business Confidence Index (BCI) showed an increase to +37 in the third quarter of 2014 from +32 in the second quarter of 2014.

More than half of respondents anticipated improvements in the local economy in the coming year, while 65 per cent expected their financial outlook to improve over the next 12 months.

The majority of firms (93 per cent) expected to maintain or increase their workforce over the next 12 months.
Businesses in Central Trinidad and in Tobago were most confident about the business and economic outlook in the short term.

A shortage of skilled workers and increased competition from local firms were cited as the main constraints to business activity.

CLICO Central Bank began the process of implementing its resolution strategy for CLICO.
6 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 FOSTERING CONFIDENCE IN THE FINANCIAL SYSTEM The domestic banking sector remained stable and resilient with no evidence of major systemic weaknesses in fiscal year 2013/2014.

Despite declining interest income and rising operating costs, the banking sector continued to be profitable and well-capitalised.
Liquidity remained high, reflecting the prevailing low interest rate environment, weak credit growth and a paucity of sound investment opportunities.

Loan growth, although still positive, slowed, and continued to be driven by consumer lending.

Notably, some tempering of growth in real estate mortgage loans occurred whilst vehicle financing expanded considerably during the year.
Credit quality, as measured by the ratio of non-performing loans to gross loans, improved to 4.5 per cent in September 2014, from 4.6 per cent in September 2013.

This improvement resulted from a combination of loan restructuring, stronger collection efforts and loan write-offs, mainly in commercial real estate.

The overall capital adequacy ratio for the banking system stood at over 25 per cent as at September 2014 and far exceeded the minimum statutory requirement of 8 per cent.
While the current capital framework provides for reserving of capital for credit and market risks only, the excess capital levels provide a reasonable buffer for other risks, such as operational and concentration risks.

Within the insurance sector, gross premium income for life insurance companies increased by almost 14 per cent in the year to September 2014, reflecting resilience post the CLICO crisis.
The non-life or general insurance sub-sector also experienced steady growth in business, the majority of which was in property and motor vehicle insurance.

In a low interest rate environment, it is imperative the insurance sector properly underwrite, price and reserve for its insurance risk.

In this regard, Central Bank continues to work with insurance companies in assessing their ability to meet their obligations for all issued policies.
As a result, the level of technical reserves has been increasing steadily as a percentage of business written.

The proposed Insurance Bill will impose additional and more stringent minimum capital requirements on insurers commensurate with their risk profile.

Whilst companies have been gearing up for the implementation of the new risk-based capital regime, some degree of consolidation is expected amongst the smaller insurance players.
The low interest rate environment also impacted the financial condition of occupational pension plans and accounted for the decline in the funding levels for some pension plans.

Central Bank is actively monitoring these pension plans to ensure actuarial recommendations are being followed to address funding deficits.

The Bank is also focusing its attention on the prudent review of pension plans which are in the process of being wound-up to ensure that the memberships’ interests are secured.
Supervision of the Financial Sector Central Bank increased significantly its surveillance of the financial services sector in 2013/2014.

Several on-site examinations either focused on, or included, assessment of anti-money laundering and combatting the financing of terrorism (AML/CFT); credit, liquidity and operational risks as well as corporate governance practices.
The emphasis on AML/CFT was influenced by the fact that Trinidad and Tobago will undergo a Fourth Round Mutual Evaluation by the Caribbean Financial Action Task Force (CFATF) to test its compliance with the revised 40 standards on AML/CFT.

Trinidad and Tobago will be first in the Caribbean to be assessed under the new methodology.

For 2013/2014, 14 on-site examinations of banks and non- banks were conducted, compared to six a year earlier.
In addition, 18 examinations of insurance companies, intermediaries and bureaux de change occurred.

This expansion of the supervisory mandate was facilitated by organizational restructuring of the Supervision Department as well as an increase in staffing.

In keeping with Central Bank’s commitment to deepen its supervisory focus, the Bank created a second Deputy Inspector position to focus on Supervision and recruited several new examiners with industry experience.
Additionally, the Bank hired subject matter experts in AML and operational and credit risk to support the work of the Department.

Fraud and Operational Risk The banking sector experienced relatively significant operational risk losses during fiscal 2013/2014 arising from internal and external fraud and failure of key processes.

These issues have contributed to an increase in operating costs and banks have had to intensify their security systems and risk management.
Oversight of operational risk is on the agenda for Central Bank’s thematic reviews in the coming fiscal year.
7 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 TABLE II SELECTED FINANCIAL SOuNDNESS INDICATORS Commercial Banks, Non-Bank Financial Institutions and Insurance Companies Capital adequacy Regulatory capital to risk-weighted assets Regulatory Tier I capital to risk-weighted assets Asset quality Nonperforming loans-to-gross loans Nonperforming loans (net of provisions)-to-capital Earnings and Profitability Return on assets Return on equity Liquidity 2009 2010 2011 2012 2013 Sep-14 COMMERCIAL BANKS Liquid assets-to-total assets 25.1 24.3 27.7 25.2 27.5 26.6 NON-BANK FINANCIAL INSTITUTIONS Capital adequacy Regulatory capital to risk-weighted assets Regulatory Tier I capital to risk-weighted assets 27.4 27.3 33.5 32.7 Asset quality Nonperforming loans-to-gross loans Nonperforming loans (net of provisions)-to-capital Earnings and Profitability Return on assets Return on equity Liquidity Liquid assets-to-total assets 16.1 9.7 15.6 17.3 17.5 21.4 LIFE INSURANCE COMPANIES Capital Adequacy Capital to total assets Asset Quality 25.4 23.8 22.1 22.0 21.2 21.2 (Real estate +unquoted equities + debtors ) / total assets 15.7 15.1 13.5 9.3 10.5 8.9 Earnings and Profitability Expense ratio = expense (incl commissions)
 /net premium Investment yield = Investment income to investment assets 40.6 7.2 37.8 6.2 38.6 5.7 37.8 5.4 35.1 5.1 33.6 4.6 Liquidity Liquid assets to current liabilities 38.9 28.8 33.5 33.6 32.6 31.3 Asset Quality NON-LIFE INSURANCE COMPANIES (Real estate +unquoted equities + accounts receivables ) / total assets 17.2 16.9 16.2 14.0 13.3 13.3 Actuarial Issues Net technical reserves/average of net claims paid in the last three years 122.0 130.2 154.8 164.1 168.4 172.6 Earnings and Profitability Return on Equity (ROE) = Pre-tax profits to shareholders funds Return on assets (ROA) Liquidity 17.0 7.2 12.3 4.8 15.5 6.4 17.7 7.7 20.1 9.0 15.9 7.1 Liquid assets to current liabilities 59.3 48.4 42.9 56.5 60.5 57.9 8 SOURCE: Central Bank of Trinidad and Tobago.
1/ Data reported excludes Colonial LIfe Insurance Company (Trinidad) Limited and British American Insurance Company (Trinidad) Limited.
CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 FOSTERING CONFIDENCE IN THE FINANCIAL SYSTEM 11.. AAccqquuiissiittiioonnss aanndd RReebbrraannddiinngg IINNSSTTIITTUUTTIIOONNAALL DDEEVVEELLOOPPMMEENNTTSS • • • In September 2013, Republic Bank Limited (RBL) increased its shareholding in HFC Bank Ghana Limited (HFC) to 40%, making it the single largest shareholder in that Bank.

That action triggered Ghana’s Security and Exchange Commission’s Code on Takeovers and Mergers.
RBL’s mandatory takeover bid for the remaining HFC shares was approved by the Bank of Ghana in April 2014.

RBL also sought approval from the Central Bank pursuant to Section 46(1) of the Financial Institutions Act, 2008 to increase its shareholdings in HFC to 51%.

This transaction is yet to conclude.

JMMB through its subsidiary JMMB (T&T) Limited acquired 50% shareholding in IBL from the Mittal Group, thereby becoming the 100% owner.
The National Commercial Bank Jamaica, through its subsidiary NCB Capital Markets acquired 100% shareholding in AICFL from its former controller AICFG.

This change in controller was primarily an organizational restructuring to facilitate consolidated supervision of the financial entities in the group.

Commensurate with the change of controller, AICFL was rebranded as NCB Global Finance Limited.
• The Neal and Massy Group of Companies (Group) undertook a rebranding initiative which affected all companies within the Group, including two entities which are regulated by the Central Bank.
In this regard:- o o General Finance Corporation Limited (GFC),, an institution licensed under the Financial Institutions Act, 2008 (FIA) changed its name to “Massy Finance GFC Limited”; and United Insurance Company Limited, a company registered under the Insurance Act, changed its name to “Massy United Insurance Limited”.

The businesses that these two financial institutions are authorized to conduct remain unchanged.
22.. FFiirrsstt CCiittiizzeennss IIPPOO In August 2013, the Government of Trinidad and Tobago, the main shareholder of First Citizens (FC) conducted an Initial Public Offering (IPO) to divest 20 percent of its shareholding or 19.3% of the issued share capital of FC.

However, corporate governance and other concerns surfaced during the process.

In the wake of these developments, Moody’s downgraded the institution’s rating but this was subsequently reversed.
the bleak economic outlook In addition, for some Caribbean territories continued to impact regional banking conglomerates with branches or subsidiaries in Barbados, Jamaica, Guyana and Grenada.

Two commercial banks with substantial regional exposures intensified their restructuring efforts which resulted in either the closure or consolidation of operations to achieve cost efficiencies.
To date, two banks have made use of the International Financial Centre Zone created in Trinidad and Tobago to offer shared services to their regional branches/subsidiaries.

Enforcement Systemically Important Financial Institutions (SIFIs) At the end of 2013, Central Bank took on responsibility for five (5) additional financial institutions, deemed to be systemically important to the financial system due to their size and complexity or national importance.
These systemically important financial institutions (SIFIs) are the National Insurance Board, the Trinidad and Tobago Unit Trust Corporation, the Trinidad and Tobago Mortgage Finance Company Limited, the Home Mortgage Bank and the Agricultural Development Bank.

three financial levied During fiscal year 2013/2014, Central Bank administrative fines on for breaching credit limits and failing to report credit exposures as required by the Financial Institutions Act, 2008.
In addition, Central Bank did not renew the licence for one bureau de change that was found to be non-compliant with certain AML/CFT requirements and governing legislation.

institutions Accordingly, the Bank has commenced evaluation of the institutions’ business models in order to develop appropriate supervisory independent oversight.

On-site examinations of two (2) of these institutions were completed with another two examinations expected to commence in the next fiscal year.
for effective and frameworks In addition, the Bank strengthened its enforcement policy to take progressively stronger measures against unauthorized intermediaries and insurers operating in the market.

The Bank published the names of two companies that were found to be operating in the insurance market, without being registered with the Central Bank and directed insurers to cease doing business with them.
Strengthening the Legislative and Regulatory Framework Central Bank continued towards enhancing and fortifying the legislative, supervisory and regulatory frameworks.

Specifically, Central Bank focused efforts on: to work (i) The draft Insurance Bill.

This Bill was laid again in Parliament in November 2013 and then referred to a Joint Select Committee of Parliament for a detailed review of its provisions.
The new legislation will strengthen regulatory oversight and provide for enhanced prudential requirements for insurance companies when enacted into law.

It will also enhance corporate governance practices and standards for market conduct.

9 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 (ii) A revised draft Credit Union Bill.

Central Bank issued a Consultation Paper on the Protection Fund to the credit union community for its review and comments.
The Bill is under revision pursuant to feedback from the Legislative Review Committee of Parliament (LRC) and further consultation with other stakeholders.

(iii) An Occupational Pension Plans Bill.

Further adjustments are ongoing to the Policy Proposal Document for the development of an Occupational Pension Plans Bill issued in December 2012.

The revisions seek to treat with the harmonizing of certain provisions across the private and public sectors.
Central Bank also joined with other regulators and the National Committee on AML/CFT (NAMLC) to conduct a National Risk Assessment (NRA) of Trinidad and Tobago’s money laundering and financing of terrorism risks.

Such an assessment will allow Trinidad and Tobago to prepare an Action Plan to channel resources to address those areas which pose the greatest AML/CFT risks.
Further, the Central Bank through NAMLC also contributed significantly to the formulation of amendments to key AML/ CFT legislation for ratifying by Parliament and completion of responses on the Technical Compliance Questionnaire for the Caribbean Financial Action Task Force (CFATF) in preparation for the Mutual Evaluation exercise in early 2015.

Bureaux de Change Work has been ongoing with regard to strengthening the legislative framework and the supervision of money remitters and bureaux de change.
In April 2014, the Central Bank presented to the industry proposals for a revised regulatory and supervisory framework for the bureaux de change, incorporating additional licensing requirements and new fit and proper criteria for officers and directors.
National Financial Crisis Management Plan Central Bank, with the approval of the Minister of Finance and the Economy, produced a draft National Financial Crisis Management Plan and has subsequently been working as part of a task force comprising the Ministry of Finance and the Economy, the Deposit Insurance Corporation and the Securities and Exchange Commission to finalize the Plan.
The key features of the Plan are designed to enable crisis preparedness and include: • Options for recovery and resolution of a SIFI in crisis; • Inter-agency communication, co-ordination and protocols; and • Identification of roles for each stakeholder in each identified option.
Regional Financial Stability Central Bank is spearheading an initiative to strengthen regional financial stability through development of a map which shows the financial interconnectedness among banks, insurance companies and other financial institutions in the region.

Stress testing of these financial linkages will serve to identify the areas and extent of vulnerabilities associated with contagion risk and to develop appropriate buffers and responses to maintain regional financial stability.
(iv) Policy Proposal Document the Implementation of Basel II to replace the Financial (Prudential Criteria) Regulations, 1994.

This represents an evolution to a more sophisticated risk management and measurement system Institutions for (v) Supervisory and regulatory framework for SIFIs.

In response to Cabinet’s mandate on SIFIs, the Bank commenced work on the most appropriate legislative framework.
Foreign Account Tax Compliance Act (FATCA) The Foreign Account Tax Compliance Act (FATCA) is US law which requires financial institutions outside the United States to pass information about financial accounts held by U.S. persons to the United States Inland Revenue Service.

The Government of Trinidad and Tobago agreed that Trinidad and Tobago should enter into a Model 1 Inter-Governmental Agreement (IGA) with the United States authorities which would facilitate compliance with FATCA.
Central Bank collaborated with all stakeholders to facilitate the execution of the IGA and continues to provide support in the achievement of a final IGA to be executed between Trinidad and Tobago and the United States authorities.

Cost Recovery Pursuant to the Payment of Supervisory Fees and Charges Regulations 2011, Central Bank recovered 80 percent of its budgeted supervisory costs for 2012/13.
The Insurance Bill 2013 proposes certain consequential amendments to these Regulations which will clarify the payment of supervisory fees with regard to pension fund plans.
Cooperation on Anti-Money Laundering / Combatting the Financing of Terrorism (AML/CFT) To further aid in the co-operation amongst the regulatory entities which regulate financial institutions, Central Bank entered into Memoranda of Understanding (MOUs) with the Financial Intelligence Unit of Trinidad and Tobago and the Trinidad and Tobago Securities and Exchange Commission, respectively, to deal with matters surrounding Anti-Money Laundering /Combatting the Financing of Terrorism (AML/CFT).
10 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 MANAGING FOREIGN RESERVES IN VOLATILE GLOBAL MARKETS Global financial markets exhibited heightened volatility throughout fiscal 2013/ 2014 as the U.S. Federal Reserve its asset purchases programme, economic tapered fundamentals deteriorated in Europe and Japan, and geopolitical tensions amplified in the Ukraine, Russia and the Middle East.
Accordingly, investors became increasingly risk averse and fixed income securities exhibited modest returns with U.S. Treasuries gaining 2.28 per cent over the year.
Against this background, the core underlying philosophy of the Bank’s investment strategy remained anchored to: • Safety: Preserving the capital value of the Reserve Portfolio; • Liquidity: Ensuring that there was sufficient liquidity to cover all obligations; • Return: Achieving an acceptable investment return; and • Risk: Minimizing the risk of a negative return in any given year.

UNDERTAKING RELEVANT AND TIMELY RESEARCH The Reserve Portfolio gained 0.16 per cent over the fiscal year 2013/2014.
This compares with a return of 0.17 per cent in the prior year.

The slightly lower performance of the portfolio was as a result of increased volatility in financial markets.

Nonetheless, tactical repositioning strategies were exploited in an effort to enhance the portfolio’s overall performance.

During fiscal year 2013/ 2014, energy revenue continued to be the principal source of inflow to the foreign currency reserves, totaling approximately US$2.2 billion.
Proceeds of approximately US$548.9 million from the issuance of the 4.375 per cent 10-year Government of Trinidad and Tobago Bond in December 2013 were also a main inflow to the portfolio.

These amounts were sufficient to meet the major outflows from the portfolio, including foreign currency sales to the domestic market amounting to US$1.2 billion and Central Government payments totaling US$742.2 million.
At the end of September 2014, the foreign currency reserves were valued at US$10.1 billion compared with a value of US$9.4 billion one year earlier.

In 2013/2014, the Research Department continued to focus on solidifying its information base in all areas—monetary, real sector, balance of payments and debt - while further strengthening research output through closer collaboration with other researchers and agencies.

The following projects were on-going: and the Financial Stability Secretariat.
These included the re- examination of the monetary policy transmission mechanism in Trinidad and Tobago, an explanation of the manufacturing sector and capacity utilization estimates, establishing the “true” rate of unemployment and calculating Trinidad and Tobago’s exposure to CARICOM.

• Medium-term forecasting in the financial programming framework; • Strengthening the Bank’s monitoring and liquidity management framework; and • Coordinating preparation of concept notes on policy issues.
Over the review period, the Research Department continued to produce economic intelligence publications such as the Annual Economic Review, the Economic Bulletin and the Monetary Policy Report.
Numerous policy notes were developed to support the work of various committees including the Monetary Policy Secretariat The department played a significant role in the signing of a Memorandum of Understanding between the Central Bank and the Ministry of Planning and Sustainable Development under which the Central Bank will provide human resources and information technology to the Central Statistical Office.
The Research Department continued to provide support, in the form of analyses and data, to a range of institutions including the Ministry of Finance and the Economy; the Ministry of Trade, Industry, Information and Communications; and the CARICOM Secretariat and its various organs.
The department was also instrumental in coordinating the visit of Prof. Paul Mizen, one of the world’s foremost authorities on monetary policy, to present a series of lectures to the Research Department as well as one public lecture on the future of central banking.
11 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 IMPROVING CONSUMER FINANCIAL PROTECTION The theme for the operations of the Office of the Financial Services Ombudsman’s (OFSO) for fiscal 2013/2014 was “A New Beginning” which addressed the fundamental objectives of awareness and accessibility of the scope of functions offered to the general public.
The Governor approved the OFSO’s Strategic Plan 2013- 2015, paving the way for preparation of a Policy Paper Document (PPD), the first step towards changing the voluntary Scheme to one underpinned in law.

After an absence of one year, the OFSO returned to Tobago with the opening of its office in May 2014.

Service to the public began in June, and continued every 2nd and 4th Wednesday of the month.

The OFSO continued to accept complaints from the public seeking redress.
During the period October 2013 to August 31, 2014, a total of 650 persons made enquiries at the OFSO while the number of formal banking and insurance complaints were 22 and 314, respectively.

Timely resolution of insurance complaints was affected by the complexity of the motor vehicle accidents and undue delay of receipt of documentation to support complaints.
For the first time, the OFSO hosted the members of the International Network of Financial Services Ombudsman Schemes for the International Conference known as INFO 2014.

The conference was held during the period September 28 - October 2, 2014 and included a full day of activities in Tobago.

Over 80 delegates from Europe, Asia, Africa, the Pacific and North and South America attended the conference.
BANKER TO GOVERNMENT Currency in Circulation In accordance with the Central Bank Act Chapter 79:02, the Bank continued to perform the role of sole issuer of Trinidad and Tobago currency.

Currency in circulation grew by 13 per cent to $7,410 million in 2013/2014 (Chart 1).

The traditional seasonal pattern of higher demand for currency during the holiday season of November and December were also evident during the fiscal year.
The amount of new bank notes issued by Central Bank grew by 85 million, 9 percent less than the 88 million new notes issued in the previous fiscal year.

The $100 denomination represented about 90 percent of the total value of all notes in circulation while the $1 denomination accounted for the largest volume at 45 percent of total notes in circulation.
With respect to coins, the 1 cent remained the most widely circulated coin, representing about half of the total volume of coins in circulation while the 25 cents coin accounted for the largest value in circulation at 60 percent of total value.

Charts 2 and 3 show the relative share of each denomination for notes and coins, respectively, in circulation at the end of September 2014.
Chart I Currency in Circulation 12 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Chart II Volume of Notes in Circulation by Denominations as at September 30, 2014 Value of Notes in Circulation by Denominations as at September 30, 2014 Chart III Volume of Coins in Circulation by Denominations as at September 30, 2014 Value of Coins in Circulation by Denominations as at September 30, 2014 13 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Clearing and Settlement Systems Regional Arrangements Central Bank continued to perform the role of operator for the Real Time Gross Settlement (RTGS) system, safe-tt, and the manual Cheque Clearinghouse Facility for domestic currency cheques.
The RTGS electronic system facilitates the clearance and settlement of large value and time-sensitive transactions among the banks and Central Bank and remains the most significant payment system in the domestic economy in terms of value.

The RTGS system settled 59,730 transactions for a total value of $543 billion as at September 2014.
The volume of cheques cleared by the Central Bank as at September 2014 decreased by 12 per cent to 1.7 million with a corresponding decrease of 10 per cent in the value of cheques cleared to $57.9 billion.

As in previous years, the payments system maintained a good level of compliance with the Ten Core Principles for Systemically Important Payments Systems.
Central Bank collaborated with the Payment Systems Council (PSC) to promote the use of electronic payments and met with several potential payments service providers.

Moreover, the Bank continued to work with Government on legislation to allow Government to make and receive payments electronically.

The Finance Bill which includes the amendments to the Exchequer and Audit Act was passed in Parliament in April 2014 and assented to by the President in June 2014.
Central Bank also nominated a representative to serve on the National Technical Advisory Committee on Electronic Transactions Financial Institutions Reserve Balances The statutory cash reserve ratios for commercial banks and non-bank financial institutions remained unchanged at 17 per cent and 9 per cent of prescribed liabilities, respectively, in fiscal 2013/2014.

In addition to the statutory cash reserves, commercial banks continued to hold a secondary reserve of 2 per cent of prescribed liabilities.
Additionally, as part of the Bank’s monetary policy strategy to absorb excess liquidity from the domestic financial system, commercial banks were required to maintain special deposits at the Central Bank.

At the end of September 2014, four one- year special deposits were held at the Bank as follows: Bank of Guyana Consolidated Debt The Bank of Guyana’s debt to Trinidad and Tobago is a consolidation of sums owed to the Central Bank of Trinidad & Tobago and the Government of Trinidad & Tobago from: 1.
The Caricom Oil Facility (1981-1982) 2.

The Balance of Payments Support Facility (1974-1975) 3.

Bilateral Settlements Loan (1985) This consolidated debt was reduced under the IMF’s Enhanced Heavily Indebted Poor Countries (HIPC) Initiative to US$56 million in 2005.

This debt continues to be serviced on a semi- annual basis and during the financial year 2013/2014, an amount of US$5.64 million was received.
This was distributed as follows based on the proportions of the original loan: • Government of the Republic of Trinidad & Tobago - US$1.14 million • Central Bank of Trinidad and Tobago - US$4.50 million At the end of September 2014, principal balance outstanding stood at US$33.2 million.

Grenada Government 7½% Debentures – 82/83 In 1971 and 1973 the Central Bank of Trinidad and Tobago purchased debentures issued by the Government of Grenada with a face value EC$50,000 and EC$250,000 respectively.
The debt was not retired as arranged and the total due as at end September 2014 was EC$2.91 million, comprising principal of EC$1.046 million and interest of EC$1.866 million.

Caricom Multi-Lateral Clearing Facility (CMCF) In March 2014, the CARICOM Central Bank Governors agreed to wind up the operations of the CARICOM Multilateral Clearing Facility (CMCF).

By mid April 2014, all payments were made to the respective members in accordance with the agreement.
Banco Latinamericano De Exportaciones S.A. (BLADEX) Central Bank holds a total of 160,626.50 shares in BLADEX.

During fiscal 2013/2014, dividends totaling US$216,845.79 were received.

• A deposit of $1.5 billion which matured on 27 December 2013 was subsequently reinvested.

Paying Agent Functions • A deposit of $2.0 billion which matured on 1 November 2013 was subsequently reinvested.
• A special fixed deposit of $1.49 billion which matured on 14 March 2014 was subsequently reinvested and increased to $1.5 billion.

• A special fixed deposit of $1 billion which matured on 2 May 2014 was subsequently reinvested.

Interest paid to commercial banks on these fixed deposits during the fiscal year totaled $26.4 million.
The Bank continued to act as the Registrar and Paying Agent of all issues of Government and State Enterprise (Agency) bonds maintained under the Government Securities Auction System and Depository as well as bonds which were issued in previous years.

Centralised Securities System (CSS) GOTT Bonds During fiscal year 2013/2014, principal repayments and interest payments to State Agency bondholders amounted to $352 million and $345 million, respectively.
Total principal and interest paid to Central Government bondholders (inclusive of NIPDEC) amounted to $1.58 billion and $1.55 billion respectively, compared to the corresponding period’s interest paid of $1.4 billion.

This represented an increase of 10.0 per cent compared to the previous year.
14 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Centralised Securities System (CSS) GOTT Bonds cont’d On November 30th 2013, payments in respect of the second tranche of CLICO zero coupon bonds were made to bondholders in the amounts of $477.4 million compared to $460.7 million in the first tranche.

The following domestic bonds were issued during the period under review: • $1.0 billion NIPDEC 4.0% October 25, 2029 Government guaranteed private placement bond issued October 25, 2013.
This bond was raised to finance projects under the Programme of Upgrading Road Efficiency (PURE).

• $2.5 billion GORTT 2.8% September 23, 2026 bond issued September 23, 2014.

This bond was raised to assist in financing the 2013/2014 Budget.

There was one liquidity management bond issued during the fiscal year: • GOTT $1 billion 2.2% June 27, 2021 bond issueJune27, 2014.
Public Sector (Arrears of Emoluments) and Tax Free Bonds The Bank continued to encash small amounts of outstanding bonds issued under the Public Sector (Arrears of Emoluments) Act 1995, the Public Sector (Arrears of Emoluments) Amendment Act 1998 and Tax Free Bonds created under the Government Savings Bond Act Chap 71:41.

During fiscal 2013/2014, payments of $0.022 million on Public Sector bonds were made compared to $0.034 million in the previous fiscal year.
For the Tax Free bonds which matured in December 2005, total principal and interest repayments were $0.048 million in fiscal 2013/2014 compared to $0.009 million in the prior fiscal year.

15 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 BUILDING HUMAN CAPACITY AND KNOWLEDGE Performance Management Industrial & Employee Relations The Bank completed negotiations with the Estate Police Association covering the period 2012 /2014.

The parties agreed to a 14% increase for Security Personnel.
Recruitment and Staffing During FY 2013/2014, Central Bank continued to build capacity strategic areas.

As at September 30, 2014, the complement of the Bank’s manpower was 628 employees (582 permanent and 46 contract), representing an increase of 12.5 percent over the previous fiscal year.

The increase in staff complement included management and specialist positions deemed critical especially for executing the Bank’s expanding financial stability mandate.
There were 24 separations from the Bank of which almost half were due to retirement.

The Bank also took a decision to assist the Central Statistical Office with recruitment of staff in three (3) critical areas of its operations: • National Accounts • International Trade • Continuous Sample Survey of the Population (CSSP) The objective of this initiative is to assist the CSO in improving the quality and timeliness of statistical data in the shortest possible time.
Six (6) persons were recruited for the CSO on one-year contracts.

Fiscal year 2013/2014 was the first operational year of the Bank’s revised Personal Performance Management System (PPMS).

Management and staff embraced the new system and worked assiduously to ensure compliance.

The system was closely monitored and feedback sought from management and staff, resulting in a number of enhancements in time for fiscal 2014/2015.
Staff Development Central Bank continued to ensure its training initiatives were fully aligned to the strategic direction and to filling targeted competency gaps.

More than half of staff participated in various training programmes particularly those in the Institutions Supervision, Banking Operations, Financial and Information Technology Services departments.
Staff members of the Security Services were engaged in several training interventions including Excellence in Customer Service and Executive Protection.

A significant intervention was made in building the Bank’s leadership capability.

Nineteen (19) senior professional staff members and junior management staff participated in the Bullet Proof Management Development Training Programme which provides exposure to best practice leadership models that can enhance both individual and organizational performance.
In line with the Bank’s commitment to support its employees in their personal development, the Graduate in Development Program, which was re-introduced in 2012, was extended to 2013/2014.

Twenty five (25) employees were exposed to management developmental programmes designed to equip them with the requisite competencies for responsibilities at a higher level within the Bank.
Competency Management A major strategic project for 2013/2014 was implementation of a Competency Based Management System (CBMS) which translates strategic vision into employee behaviours that deliver business results.

The CBMS will complement the recently introduced Performance Management System which has updated all job descriptions to include a Competency Profile which establishes the proficiency levels required for each competency.
Implementation of this project was facilitated by an external consultant who worked closely with the Human Resources department, change sponsors, managers and departmental teams to develop a Competency Framework consistent with the Bank’s needs.
16 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 COMMUNICATIONS THE NEW MONETARY POLICY TOOL v Divali Nagar and Ramleela In pursuit of new opportunities for meeting national audiences, Central Bank participated for the first time in Divali Nagar and Ramleela celebrations in October and November 2013.
At both events, the Bank was represented by the joint presence of the National Financial Literacy Programme and the Office of the Financial Services Ombudsman, both of which have a public outreach mandate.

The booths were manned by volunteer staff from several departments who connected with over 1,000 persons in the information-sharing exercise.

Fiscal year 2013/2014 saw further evolution of the Central Bank’s relationship with the national community based on greater communication, openness and inclusion.
The Bank’s Wall Art Project in which valuable pieces of the Bank’s trove of art were displayed for public viewing on the exterior of the Bank came to symbolize the new culture of outward engagement and sharing.

The following strategic initiatives set the tone for change in marking the Bank’s 50th anniversary.

v Monetary Policy Forum The introduction of a bi-annual Monetary Policy Forum created a dynamic new avenue for direct engagement between Central Bank and the citizens it serves.
Built around the release of the Monetary Policy Report, the Forum took critical information directly to the business community and other members of the public.

Two forums were held in FY 2013/2014, the first of which was in Debe, south Trinidad in November 2013 followed by another in Tobago in April 2014.

Each occasion provided a unique opportunity for direct questions to the Governor and discussion about how Bank decisions affect business.
NFLP staff interacting with visitors at their Ramleela booth 17 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 v The Wall Art Project v Central Banks’ Intra-Regional Games The official launch of Central Bank’s 50th anniversary commemoration was marked by a novel exercise of public sharing in which 13 paintings from the Bank’s valuable art collection were publicly unveiled on its exterior walls in January 2014.

Among the pieces were paintings by Leroy Clarke, Sybil Atteck and Ralph Baney.
In support of emerging artists, two pieces by teenagers were included.

One by Renee Roberts who was the winner in her age group in an art competition held by the Bank in 2013 while the other by Kajol Madho was a purchase by the Bank.

In April 2014, the Bank took to the field of sport as host of the biennial Intra-Regional Games featuring teams of central bankers from across the Caribbean.
First-time participants Suriname and Aruba made a commendable showing at the nine-sport event which was held during April 17 – 21 at the UWI Sports facilities.

In the end, Central Bank of Trinidad and Tobago took gold to emerge winners.
Governor Rambarran and Andy Wong, President of the Sports Club, accepting the winning trophy for Intra Regional Games 2014 Mounting of the final piece of Art on the Wall project CBTT 2014 Intra Regional Team CBBT Team celebrating at the netball finals 18 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 v Dr. Rudranath Capildeo Legacy Lecture Series As part of the 50th anniversary commemorative events, Central Bank inaugurated the Dr. Rudranath Capildeo Legacy Lecture Series on Sunday 4th May in recognition of Dr. Capildeo’s contributions to academia, science, politics and law.
The lecture was presented by Dr. Rudy Capildeo, son of Dr. Rudranath Capildeo.

On the occasion, Wasim Olliverre, a student from Dr. Capildeo‘s alma mater, Queen’s Royal College, was awarded a scholarship for Outstanding Performance in Science.

The lecture was followed by the opening of the Dr. Rudranath Capildeo Legacy Exhibition.
The theme, “From Lion House to Legend”, traced the Capildeo family history from the arrival of Dr. Capildeo’s father, Pundit Capildeo, from India in 1894, to Dr. Capildeo’s intellectual achievements and political career until his untimely death at the age of 50 in 1970. v Lecture by Professor Dr. Paul Mizen “Central Banking: The Next 50 Years” was the theme of a lecture delivered at the Bank on May 15, 2014 by Professor Paul Mizen, Professor of Monetary Economics and Director, Centre for Finance, Credit and Macroeconomics at the University of Nottingham.
v Dr. Eric Williams Memorial Lecture The 28th Annual Eric Williams Memorial Lecture was hosted by the Bank on Saturday June 14th 2014.

Speaking before a packed audience, feature speaker Dr. Franklin Knight addressed the topic ‘The Eric Williams Contribution to Caribbean History and Historiography’.

In honour of Dr. Williams’ legacy as a historian, Keshav Cassano, a student of Dr. Williams’ alma mater Queen’s Royal College was awarded a scholarship for Outstanding Performance in History.
Dr. Rudy Capildeo, son of Dr. Rudranath Capildeo, giving the inaugural Rudranath Capildeo Legacy Lecture Dr Franklin W. Knight at 28th Annual Eric Williams Memorial Lecture Dr Capildeo presents Wasim Olliverre, a student of QRC, with a scholarship for Outstanding Performance in Science.
19 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 v Global Policy Forum of the Alliance for v De La Rue Scholarships Financial Inclusion From September 9-11, the Central Bank co-hosted the Global Policy Forum (GPF) of the Alliance for Financial Inclusion (AFI), one of the largest gatherings of global financial policy makers.

The focus of the Forum is to discuss creative solutions for making financial services more accessible to the world’s 2.5 billion ‘unbanked’ people.
A highlight of the Forum was Central Bank’s launch of the Financial Inclusion Development Agency, FIDA.

In partnership with De La Rue of the United Kingdom, Central Bank awarded five scholarships in the disciplines of Economics, Finance and Actuarial Science for the 2013/2014 academic year.

Each scholarship is tenable for a maximum period of two academic years and covers the cost of books, materials and tuition.
The scholarships were awarded to: • Mr. Keron Victor - Economics • Ms. Latoya Richards - Finance • Ms. Marissa Chester - Economics • Ms. Priya Singh - Actuarial Science • Ms. Ranita Seecharan - Economics Dr. Zeti Akhtar Aziz, Governor of Bank Negara Malaysia 20 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 50TH ANNIVERSARY A Commemoration in Photos 21 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 22 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 FINANCIAL STATEMENTS 2013-2014 FINANCIAL STATEMENTS Report of the Auditor General 25 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Report of the Auditor General 26 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Consolidated Statement of Financial Position AS AT 30 SEPTEMBER 2014 (Expressed in Trinidad & Tobago Dollars) Restated Restated Notes Sep-14 $’000 Sep-13 $’000 Sep-12 $’000 ASSETS Foreign currency assets Foreign currency cash and cash equivalents 4 33,916,422 32,205,796 32,372,487 Foreign currency investment securities 5,7,28 28,746,150 27,663,771 26,842,735 Foreign receivables Subscriptions to international financial institutions International Monetary Fund - Holdings of Special Drawing Rights 9 10 5,999,998 3,400,194 2,656,812 4,464,797 3,418,382 2,675,735 6,007,948 3,414,035 2,674,246 74,719,576 70,428,481 71,311,451 Local currency assets Local currency cash and cash equivalents Local currency investment securities Retirement benefit asset Accounts receivable and prepaid expenses Other assets Property, plant and
 equipment TOTAL ASSETS LIABILITIES Foreign currency liabilities Demand liabilities - foreign International Monetary Fund - Allocation of Special Drawing Rights Accounts payable Local currency liabilities Demand liabilities - local Accounts payable 227,630
79,666,968 76,410,113 76,178,703 227,630 3,093,995 6,729,766 197,768 3,116,665 4,596,034 197,433 3,115,305 6,095,922 10,051,391 7,910,467 9,408,660 34,861,131 34,143,449 33,802,701 28,206,128 26,935,901 25,060,103 Provision for transfer of surplus to government 177,364 392,550 Provisions 15,28 4,660,504 5,343,820 555,332 5,839,141 CAPITAL AND RESERVES Capital General Reserve Fair Value Reserve Retained Earnings 67,905,127 66,815,720 65,257,277 22 23 800,000 766,279 - 144,171 800,000 746,572 126,000 11,354 800,000 702,955 - 9,811 1,710,450 1,683,926 1,512,766 TOTAL LIABILITIES, CAPITAL AND RESERVES 79,666,968 76,410,113 76,178,703 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 27 Consolidated Statement of Comprehensive Income FOR THE YEAR ENDED 30 SEPTEMBER 2014 (Expressed in Trinidad & Tobago Dollars) Income from foreign currency assets Interest and other income Investment expense Loss from currency translations Net (loss)/gains realised on disposal and amortisation of investments Income from local currency assets Interest income Rental income Other income Decrease in provisions Total income Operating expenses Printing of notes and minting of coins Salaries and related expenses Interest paid Directors’ fees Depreciation Other operating expenses Increase in provisions Total operating expenses Net surplus for the period Other comprehensive income Revaluation of available for sale investment Total comprehensive income for the period 28 Notes Sep-14 $’000 Restated Sep-13 $’000 16 17 17 18 329,520 (25,750)
 303,770 (33,088) (252,010) 323,639 (24,669) 298,970 (12,039) 143,459 18,672 430,390 510,955 3,053 307,871 465,196 1,980 68,474 821,879 535,650 - 2,267 840,551 968,307 89,933 135,391 81,395 992 33,135 102,358 67,459 510,663 329,888 77,391 193,562 129,427 1,487 32,357 96,373 - 530,597 437,710 - 126,000 329,888 563,710 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Consolidated Statement of Changes in Equity FOR THE YEAR ENDED 30 SEPTEMBER 2014 (Expressed in Trinidad & Tobago Dollars) Issued and Fully
 Paid Up Capital General Reserves Fair Value Reserves Retained Earnings Total $’000 $’000 $’000 $’000 $’000 Balance as at 1 October 2012 800,000 702,955 9,811 1,512,766 Net surplus for the period Transfer of surplus to Consolidated Fund Transfer to General Reserve - - - - - 437,710 437,710 (392,550) (392,550) 43,617 (43,617) - Revaluation of available for sale investment 126,000 126,000 Balance as at 30 September 2013 (Restated) 800,000 746,572 126,000 11,354 1,683,926 Balance as at 1 October 2013 800,000 746,572 126,000 11,354 1,683,926 Net surplus for the period Transfer of surplus to Consolidated Fund Transfer to general reserve - - - - - 329,888 329,888 (177,364) (177,364) 19,707 (19,707) - Reclassification Adjustment (126,000) (126,000) Balance as at 30 September 2014 800,000 766,279 - 144,171 1,710,450 29 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Consolidated Statement of Cash Flows FOR THE YEAR ENDED 30 SEPTEMBER 2014 (Expressed in Trinidad & Tobago Dollars) Cash flows from operating activities Net surplus for the year before taxation Adjustments for: Depreciation Net gain on disposal of fixed assets Interest income Interest expense Dividend income Provisions Revaluation of Artwork Sep-14 $’000 Restated Sep-13 $’000 329,888 437,710 33,135 (126) (840,475) 81,395 (11,532) 67,459 (1,105) 32,357 (680) (788,835) 129,427 (6,072) (2,267) (772) Cash outflow before changes in operating assets and liabilities (341,361) (199,132) Changes in operating assets
 and liabilities (Increase)/Decrease in accounts receivable & prepaid expenses (1,265,505) 1,257,228 (Increase)/Decrease in other assets (Increase)/Decrease in pension asset Increase in accounts payable and other liabilities Net cash flow from operations Cash flows from investing activities Purchase of property, plant and equipment Proceeds from sale of property, plant and equipment Net purchase of investments Net repayment of loans and advances Interest received Dividends received Interest paid Net
 (increase) in International Monetary Fund Holding of Special Drawing Rights and Allocation account Payment to Consolidated Fund Net cash flow used in investing activities Cash flows from financing activities Lease payment Net cash flow from financing activities Net increase in cash and cash equivalents Foreign currency differences in monetary assets & liabilities Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period 4 4 30 (27,443) (80,973) 4,165,866 2,450,584 13,623 10,570 692,120 1,774,409 (43,476) 869 (21,614) 850 (1,366,035) (1,319,828) 71,402 812,037 11,532 (95,758) (3,747) (392,550) 39,116 795,463 6,072 (104,478) (128) (555,332) (1,005,726) (1,159,879) 11,680 11,680 1,456,538 (400,762) 34,651,838 35,707,614 11,451 11,451 625,981 (62,726) 34,088,583 34,651,838 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Notes to Consolidated Financial Statements FOR THE YEAR ENDED 30 SEPTEMBER 2014 (Expressed in Trinidad & Tobago Dollars) 1.
INCORPORATION AND PRINCIPAL ACTIVITIES framework in the preparation of these Consolidated Financial Statements insofar as the Bank considers it The Central Bank of Trinidad and Tobago (the Bank) was appropriate to do so having regard to its functions.

established as a corporate body in 1964 under the Central Bank Act (Chapter 79:02).
The principal office is located at These Consolidated Financial Statements depart from Eric Williams Plaza, Independence Square, Port of Spain, the IFRS because of the nature of the Bank, including its Trinidad and Tobago.

role in the development of the financial infrastructure of the country as well as the regulations by which it is The Central Bank Act entrusts the Bank with a range of governed.
The IFRS which have not been fully adopted responsibilities, among which is the promotion of monetary, are: credit and exchange conditions most favourable to the development of the economy of Trinidad and Tobago.

• IAS 21 – The Effect of Changes in Foreign Exchange Rates, requires that all unrealised gains and losses The Bank has the exclusive right to issue and redeem currency be accounted for through the Income Statement.
notes and coins in Trinidad and Tobago, and is empowered, The Central Bank Act requires that the profit for inter alia, to act as banker for, and render economic, financial the year be transferred to the Consolidated Fund and monetary advice to the Government of the Republic but does not distinguish between realised and of Trinidad and Tobago (GORTT) and open accounts for unrealised profits.
As such the Bank accounts and accept deposits from the Central Government, Local for all unrealised gains and losses on Changes in Government, statutory bodies, commercial banks and other Exchange Rates through a Provision for Foreign financial institutions.

It also has the authority to make Currency Exchange Rate Reserves.
advances, purchase and sell discounted bills of exchange and promissory notes on behalf of the above named institutions, and to purchase and sell foreign currencies and securities of • IAS 37 – Provisions, Contingent Liabilities and other Governments and international financial institutions.
Contingent Assets, defines Provisions as liabilities The Bank is also responsible for protecting the external value Act imposes specific limitations on the scope of the currency, managing the country’s external reserves of the Bank to create reserves and so prepare of uncertain timing or amount.

The Central Bank and taking steps to preserve financial stability.

2.

SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies applied in the preparation of the Financial Statements are set out below.
These policies for certain unforeseen events.

The Bank has therefore established Provisions for specific types of transactions and obligations, which would more typically be reflected as various types of reserves under the IFRS.

See Note 15. have been applied to all of the years presented.

• IAS 39 – Financial Instruments: Recognition and a.
Basis of preparation Measurement, requires that where an asset is classified as available-for-sale, the unrealised gains or losses on fair value movements should These Consolidated Financial Statements have been be recognised directly in Capital and Reserves prepared on the historical cost basis except as modified through the Statement of Changes in Equity.
The by the revaluation of “artwork” and “available-for-sale” Central Bank Act imposes specific limitation on and “fair value through profit or loss” financial assets.

the scope of the Bank to create reserves.

Therefore These Consolidated Financial Statements have been losses on the available-for-sale investments prepared in accordance with the Central Bank Act under “Provisions” rather than “Reserves”.

In this (Chapter 79:02).


The Bank has chosen to adopt way, the financial statements reflect a more the recognition and measurement requirements realistic picture of the performance of the Bank.

of the International Financial Reporting Standards However, available-for-sale investments held by (IFRS) together with the presentation and disclosure the subsidiary, CB Services have been treated in the Bank recognises its unrealized gains or accordance with IAS 39.
31 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Notes to Consolidated Financial Statements FOR THE YEAR ENDED 30 SEPTEMBER 2014 (Expressed in Trinidad & Tobago Dollars) • IFRS 7 – Financial Instruments Disclosures, requires for the same reporting year as the Bank, using that an entity discloses very detailed information consistent accounting policies with the exception of on its investments including information on the revaluation of the available-for-sale investments.
concentration of risk on investments; geographical All intra-group balances, transactions, income and information on investments and sensitivity expenses are eliminated in full.

analysis for each type of market risk.

The Bank’s investment of the country’s reserves is managed Subsidiaries are fully consolidated from the date on under strict governance procedures and the which control is transferred to the Bank.
Control is Central Bank Act requires that the Bank maintain a achieved where the Bank has the power to govern prudential level of confidentiality.

the financial and operating policies of an entity so as to obtain benefits from its activities.

Non-controlling interests represent the portion of profit or loss and net assets of subsidiaries not owned, directly or indirectly, The accounting treatment adopted for each of these by the Bank.
Currently, there are no non-controlling departures is defined in the accounting policies and notes interests as the subsidiary being consolidated is owned below.

The impact of this is reflected in the improved 100% by the Bank.

stability in the operations of the Bank.


Management considers that these Financial Statements fairly represent Section 36(g) of the Central Bank Act empowers the the Bank’s financial position, financial performance and cash Bank, with the approval of the Minister of Finance, flows.

b.
b.

Changes in accounting policies to acquire, hold and sell shares or other securities of any statutory body or company registered under the Companies Act for the purpose of promoting the development of a money or securities market or for financing the economic development of Trinidad • IFRS 13 – Fair Value Measurement has been and Tobago.
The Bank has interests in a number established as the single source of guidance for of institutions – the Trinidad and Tobago Unit Trust fair value measurements and disclosures.

The Corporation, the Deposit Insurance Corporation, disclosures with respect to fair value have been Caribbean Credit Rating and Information Agency, enhanced in accordance with the new stipulations.
Inter-bank Payments System Limited, CB Services The fair value measurement was applied Limited and the Office of the Financial Services prospectively as at the beginning of the annual Ombudsman.

period in which it initially applied.

Consequently no comparative information was given (See Note 7).

In all but the Deposit Insurance Corporation and CB Services Limited, the Bank has a minority financial • IAS 19 – Employee Benefits.
The Bank has adopted interest, in fulfilment of the Bank’s role to help the amendments to IAS 19; therefore actuarial promote the development of the country’s financial gains and losses would no longer be deferred but infrastructure.

The Deposit Insurance Corporation recognised immediately in the period in which was established for the protection of depositors they occur.

Restated prior years’ figures have been in the domestic financial system.
While the share provided in accordance to IAS 8 - Accounting capital was paid up by the Bank, the Deposit Insurance Policies, Changes in Accounting Estimates and Corporation was always conceived to be a separate Errors (see Note 8 and 28).

c. Consolidation and independent institution with its own mandate and operates as such.

The Financial Statements of these related enterprises, with the exception of CB Services Limited, have not been consolidated with those of the Bank.
The Consolidated Financial Statements comprise the financial statements of the Bank and its subsidiary Extracts of the Parent’s Financial Statements are for the year ended 30 September 2014.
The financial included in Note 30. statements of the Bank’s subsidiary are prepared 32 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 d. Foreign currency translation e. Critical accounting estimates and judgments i. Functional and presentation currency The Bank makes estimates and assumptions that affect the reported amounts of the assets and liabilities The Financial Statements are presented in Trinidad within the financial year.
Estimates and judgments and Tobago dollars, which is the Bank’s functional are continually evaluated and are based on historical and presentation currency.

experience and other factors, including expectations of future events.

ii.

Transactions and balances Monetary assets and liabilities denominated in The resulting accounting estimates will seldom foreign currencies are translated into Trinidad and equal the related actual results.
The estimates and Tobago dollars at the rates of exchange prevailing assumptions that have a significant risk of causing at the close of business at the Statement of Financial material adjustments to the carrying amounts of Position date.

assets and liabilities within the next financial year are illustrated below: Translation gains or losses, at year-end exchange rates of these monetary and non-monetary assets and liabilities, are recognised in Provisions – Foreign Currency Exchange Rate Reserves.

ii.
ii.

Transactions and balances cont’d Foreign currency transactions are translated at the exchange rates prevailing on the transaction dates.

Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in the Statement of Comprehensive Income.

iii.

Special Drawing Rights Transactions with the International Monetary Fund (IMF) are recorded at the local currency equivalent of Special Drawing Rights using rates notified by the IMF.
Special Drawing Rights (SDR) are defined in terms of a basket of currencies.

To revalue the Bank’s holdings of SDRs, the value of the SDR was calculated as a weighted sum of the exchange rates of four major currencies (the US dollar, euro, Japanese yen and the pound sterling) against the Trinidad and Tobago dollar.

The TT:SDR rate as at 30 September 2014 was 0 .103793. i.
Estimated pension and post–employment medical plan The estimate of the pension and post-employment medical plan obligations, in relation to the defined benefit plans operated by the Bank on behalf of its employees, are primarily based on the estimation of independent qualified actuaries.

The value of the obligations is affected by the actuarial assumptions used in deriving the estimate.

ii.
ii.

Provision for bad and doubtful debts Pursuant to Section 35(4) of the Act, provisions are made for bad and doubtful debts in the accounts.

In this regard, the relevant assets are shown in the Statement of Financial Position net of the amount which, in the opinion of the Bank, requires a specific provision.

iii.
iii.

Fair value of financial instruments Where the fair value of financial assets and financial liabilities recorded on the statement of financial position cannot be derived from active markets, they are determined using a variety of valuation techniques that include the use of mathematical models.
The inputs to these models are derived from observable market data where possible, but where observable market data are not available, 33 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Notes to Consolidated Financial Statements FOR THE YEAR ENDED 30 SEPTEMBER 2014 (Expressed in Trinidad & Tobago Dollars) judgment is required to establish fair values.
The measurement, held to maturity financial investments judgments include considerations of liquidity and are subsequently measured at amortised cost model inputs such as volatility for longer dated using the effective interest rate method (EIR) derivatives and discount rates, prepayment rates less impairment.

Amortised cost is calculated by and default rate assumptions for asset backed taking into account any discount or premium on securities.
acquisition and fees that are an integral part of the effective interest rate.

Interest on these investments is recognised in the Statement of Comprehensive iv.

Estimated replacement value of artwork Income.

The estimated replacement value of artwork was primarily based on the valuation of an independent art consultant.

The estimated market value was established based on the valuation report of the condition of the artwork.
f. Cash and cash equivalents For the purposes of the Statement of Cash Flows, cash and cash equivalents comprise balances with less than or equal to three months to maturity from the date of acquisition.

It consists of cash, balances with other banks, short term funds and highly liquid investments, including fixed deposits and reverse repurchases.
g. Investment securities The classification of financial instruments at initial recognition depends on the purpose and management’s intention for which the financial instruments were acquired and their characteristics.

All financial instruments are measured initially at their fair value plus transaction costs, except in the case of financial assets and financial liabilities which are recorded at fair value through profit or loss.
The Bank classifies its investment securities in the following four categories: “Held to maturity”, “Available- for-sale”, “Loans and advances” and “Fair value through profit or loss”.

i.

Held to maturity Investments classified as held to maturity are non-derivative financial assets with fixed or determinable payments and fixed maturity that the Bank’s management has the positive intention and ability to hold to maturity.

After initial 34 ii.


Available-for-sale These investments are intended to be held for an indefinite period of time, and may be sold in response to needs for liquidity or to meet the goals of the strategic asset allocation approved by the Board.

They are initially recognised at fair value, (which includes transaction costs), and are subsequently re-measured at fair market value.

Unrealised gains and losses on these investments are recognised in Provisions – Revaluation Reserve at Market Value.
Regular purchases and sales of financial assets are recognised on the trade date, which is the date on which the Bank commits to purchase or sell the asset.

When the securities are disposed of, the related accumulated fair value adjustments are included in the Statement of Comprehensive Income as realised gains and losses from investment securities.

The Bank has investments in several related companies which are accounted for as available-for-sale investments (see Note 6).
None of these equity investments have a quoted market price in an active market and therefore their fair value cannot be reliably measured.

The cost of these equity investments is therefore considered a reasonable approximation of fair value.

The equity investments in Home Mortgage Bank (HMB) and First Citizens Bank Limited (FCB), which were sold during the year, were measured at fair market value based on valuation reports.
Unrealised gains or losses on investments held by the Bank are recognised in Provisions (Revaluation Reserve) while the unrealised gains of the investments held by CB Services are recorded in the Fair Value Reserve.

CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 iii.
Loans and advances Loans and advances are non-derivative financial variable that the variable is not specific to a party to the contract (sometimes called the ‘underlying’); assets with fixed or determinable payments that b. it requires no initial net investment or an initial net are not quoted in an active market.
They arise investment that is smaller than would be required when the Bank provides money or services directly for other types of contracts that would be expected to a counterparty, with no intention of trading to have a similar response to changes in market the receivable and are carried at their expected factors; and realisable value, less any provision for impairment.

Interest arrears are accrued and provided for c. it is settled at a future date.

in the current financial period.


Determination of allowances for losses is based on an annual appraisal of each loan or advance.

Specific provisions are made when, in the opinion of management, credit risk or other factors make full recovery doubtful.

Provisions created, including increases and decreases, are recognised in the Statement of Comprehensive Income.

iv.
iv.

Fair value through profit or loss Financial assets at fair value through profit or loss may only be made if the financial asset either contains an embedded derivative or will be managed on a fair value basis in accordance with a documented risk management strategy, or if designating it (and any financial liability) at fair value will reduce an accounting mismatch.
Derivatives are initially recognised in the Statement of Financial Position at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at their fair value.

Fair values are obtained from quoted market prices in active markets, including recent market transactions, or valuation techniques, as appropriate.
The best evidence of the fair value of a derivative at initial recognition is the transaction price (i.e., the fair value of the consideration given or received).
A derivative is a financial instrument or other contract within the scope of IAS 39 with all three of the following characteristics: a. its value changes in response to the change in a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial h. Recognition and derecognition of financial instruments The Bank uses trade date accounting when recording financial asset transactions.
Financial assets are derecognised when the contractual right to receive the cashflows from these assets has ceased to exist or the assets have been transferred and substantially all the risks and rewards of ownership of the assets are also transferred.

Financial liabilities are derecognised when they have been redeemed or otherwise extinguished.
i. Impairment of financial assets The Bank assesses at each statement of financial position date whether there is any objective evidence that a financial asset or a group of financial assets is impaired.
A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.
Evidence of impairment may include indications that the borrower or a group of borrowers is experiencing significant financial difficulty, the probability that they will enter bankruptcy or other financial reorganisation, default or delinquency in interest or principal payments and where observable data indicates that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
35 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Notes to Consolidated Financial Statements FOR THE YEAR ENDED 30 SEPTEMBER 2014 (Expressed in Trinidad & Tobago Dollars) i.

Financial assets carried at amortised cost based on the same criteria as financial assets carried at amortised cost.
However, the amount recorded If there is objective evidence that an impairment for impairment is the cumulative loss measured as loss has been incurred, the amount of the loss is the difference between the amortised cost and the measured as the difference between the asset’s current fair value, less any impairment loss on that carrying amount and the present value of estimated investment previously recognised in the Statement future cash flows (excluding future expected credit of Comprehensive Income.
Future interest income losses that have not yet been incurred).

The carrying is based on the reduced carrying amount and is amount of the asset is reduced through the use of accrued using the rate of interest used to discount an allowance account and the amount of the loss the future cash flows for the purpose of measuring is recognised in the Statement of Comprehensive the impairment loss.

The interest income is Income.


Interest income continues to be accrued recorded as part of ‘Interest and other income’.

on the reduced carrying amount and is accrued using the rate of interest used to discount the If, in a subsequent period, the fair value of a debt future cash flows for the purpose of measuring the instrument increases and the increase can be impairment loss.

The interest income is recorded as objectively related to a credit event occurring part of ‘Interest income’.
Loans together with the after the impairment loss was recognised in associated allowance are written off when there the Statement of Comprehensive Income, the is no realistic prospect of future recovery and all impairment loss is reversed through the Statement collateral has been realised or has been transferred of Comprehensive Income.

to the Bank.
to the Bank.

If, in a subsequent year, the amount of the estimated impairment loss increases or In the case of equity investments classified as decreases because of an event occurring after available-for-sale, objective evidence would also the impairment was recognised, the previously include a ‘significant’ or ‘prolonged’ decline in the recognised impairment loss is increased or reduced fair value of the investment below its cost.

Where by adjusting the allowance account.


If a future there is evidence of impairment, the cumulative write–off is later recovered, the recovery is credited loss measured as the difference between the to the Statement of Comprehensive Income.
acquisition cost and the current fair value, less any impairment loss on that investment previously The present value of the estimated future cash recognised in the Statement of Comprehensive flows is discounted at the financial asset’s original Income – is removed from equity and recognised effective interest rate (EIR).

If a loan has a variable in the Statement of Comprehensive Income.
interest rate, the discount rate for measuring any Impairment losses on equity investments are not impairment loss is the current EIR.

If the Bank has reversed through the Statement of Comprehensive reclassified trading assets to loans and advances, Income; increases in the fair value after impairment the discount rate for measuring any impairment are recognised in Provisions – Revaluation Reserve loss is the new EIR determined at the reclassification at Market Value.

date.

j.

Fair value measurement ii.


Available-for-sale financial investments For available-for-sale financial investments, the value at each reporting date.

Fair value is defined as Bank assesses at each statement of financial the price that would be received to sell an asset or paid position date whether there is objective evidence to transfer a liability in an orderly transaction between that an investment is impaired.

market participants at the measurement date.


The Bank measures certain financial instruments at fair In the case of debt instruments classified as The fair value measurement is based on the available-for-sale, the Bank assesses individually presumption that the orderly sale of asset or transfer whether there is objective evidence of impairment of liability takes place in the principal market for the 36 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 asset or liability.
In the absence of a principal market, the most advantageous market for the asset or liability is used as the basis for fair value measurement.

l. Employee benefits i.

Pension Benefits The Bank operates a Defined Benefit Plan (Plan) for all its eligible employees.

The assets of the Plan The fair value estimate of an asset or liability is based are held in a separate trustee administered plan.
on the assumptions that market participants would use when pricing the asset or liability, assuming the A Defined Benefit Plan is a pension plan that defines market participants act in their best economic interest.

The fair value for financial instruments traded in active markets at the reporting date is based on their quoted the amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.
The pension benefit is based price.

For all other financial instruments not traded in on the final salary of the employee.

an active market, the fair value is determined by using valuation techniques considered to be appropriate in An asset or liability recognised in the Statement the circumstances for which sufficient data is available and for which the use of relevant observable inputs are maximised.

Valuation techniques include the market approach, the cost approach and the income approach.
of Financial Position in respect of the Plan is the present value of the defined benefit obligation at the Statement of Financial Position date less the fair value of the Plan’s assets, together with adjustments for any effect of limiting the net defined benefit to the asset ceiling.
All assets and liabilities for which fair value is The Plan’s accounting costs are assessed on the basis measured or disclosed in the financial statements are categorized within the 3 levels of the fair value hierarchy based on the lowest level input that is significant to the entire fair value measurement.
The levels of the fair value hierarchy are: Level 1 - Quoted (unadjusted) market prices in active markets for identical assets of liabilities Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value of the Projected Unit Credit Method.

A valuation is done every three years by independent actuaries.

The last triennial valuation was performed as at 30 September 2011 and the valuation as at 30 September 2014 is currently being carried out.
This is expected to be completed by 31 January 2015.

In accordance with the advice of the actuaries, the Plan’s costs of providing pensions are charged to the Statement of Comprehensive Income in order to spread the regular cost over the service lives of measurement is directly or indirectly observable employees.
Level 3 – Valuation technique for which the lowest level The Bank has adopted the amendments to IAS input that is significant to the fair value measurement is unobservable Further details on fair value measurement are included in Note 7. k. Offsetting financial instruments Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.
19; therefore actuarial gains and losses would no longer be deferred but recognised immediately in the period in which they occur.

Restated prior year’s figures have been provided in accordance with IAS 8 (see Note 8).

The Plan is funded by payments from employees and the Bank, taking into account the recommendations of independent qualified actuaries.
37 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Notes to Consolidated Financial Statements FOR THE YEAR ENDED 30 SEPTEMBER 2014 (Expressed in Trinidad & Tobago Dollars) ii.

Post-employment medical benefits at the Statement of Financial Position date and are shown as receivable.
Lease income is recognised The Bank operates a post-employment medical over the term of the lease using the net investment benefit scheme for its retirees, whereby a subsidy method, which reflects a constant periodic rate of is provided for premium due for member only return.

contribution.

There is also a cash allowance paid to certain retirees who would not have been eligible at the time the Plan was introduced.

The method o.
The method o.

Computer software of accounting, assumptions and the frequency of valuations are similar to those used for the defined The Bank acquires computer software programmes benefit pension scheme.

m. Notes and coins to assist in the performance of its normal activities.

These amounts are capitalised on the basis of the cost incurred to acquire and bring to use the specific software.
These costs are amortised using the straight line method on the basis of the expected useful life of The stock of notes and coins is stated at original cost.

five years.

Costs associated with maintaining computer Issues are accounted for using the First In First Out software programmes are recognised as an expense as Method.

All associated costs such as shipping, handling incurred.

and insurance are expensed immediately.


Printing and minting costs are expensed when the units of currency are issued and put into circulation.

Destruction costs/ p. Property, plant and equipment write offs are recognised in the period when the currency is destroyed.

During the year, $13.8 million Property, plant and equipment are recorded at cost was expensed in relation to Notes sent for destruction.

less accumulated depreciation.


Cost includes the This destruction cost is included in printing of notes purchase price of the assets plus any further cost and minting of coins expense.

n. Leases i.

Operating leases (as lessee) incurred in bringing the asset to its present condition and location.

Capital works-in-progress are recorded at cost but are not depreciated until the asset is available for its intended use.
Any additions or improvements to assets during the year, which significantly add to the value of, or extend the useful life of such assets, are capitalised as part of the cost.

All other repairs The leases entered into by the Bank are primarily and maintenance are expensed in the Statement of operating leases.

The total payments made under Comprehensive Income during the financial period in operating leases are charged to the Statement of which they were incurred.
When an asset is retired or Comprehensive Income on a straight line basis over sold, any gain or loss on disposal is recognised in the the period of the lease.

When an operating lease is Statement of Comprehensive Income.

terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognised as an expense in the period Artwork, which is classified under Fixtures and in which termination takes place.

ii.
ii.

Finance leases (as lessor) Fittings, is initially carried at cost.

The Bank’s Artwork is independently and professionally valuated every three years and is carried at its revalued amount, being its fair value at the date of revaluation.

Any increase in Where the Bank grants long-term leases on property, the carrying amount as a result of the revaluation is the land and the building are treated as a finance recognised in equity as a provision for revaluation lease.
These finance leases are valued at the lower of artwork except to the extent that the increase of the gross investment less principal payments reverses a revaluation deficit of the Artwork previously and any provisions in the lease, and the present recognised in the Statement of Comprehensive value of the minimum lease payments receivable Income.

The last revaluation was carried out in September 2013.
38 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Depreciation is charged on a straight-line basis and is single gold valuation is accounted for on the basis of applied over the estimated useful lives of the assets, as the price in Trinidad and Tobago dollars per troy ounce shown below.

Land is not depreciated.

of gold.


Building - 40 years Building improvements - 10 years Leasehold properties - over the period of t. Subscriptions to International Financial Institutions the lease The Bank acts as financial agent for the GORTT with Motor vehicles - 3 years Machinery and equipment Computer hardware Furniture Fixtures and fittings - - - - 1.5 to 5 years 3 years 10 years 10 years q.
Taxation Section 55(1) of the Central Bank Act exempts the Bank from the provisions of any Act relating to income taxation, company taxation and from the payment of stamp duty.

Its subsidiary, CB Services Limited, is subject to corporation tax at a rate of 25% on chargeable income in accordance with the Corporation Tax Act.

Deferred taxation arises from temporary differences between the tax base of assets and liabilities, and their carrying amounts in the Financial Statements.
CB Services Limited currently does not have any temporary difference and as such no adjustment for deferred taxation is required.

r. Provisions The Bank has a policy of providing for all known and foreseeable losses in the accounts and has adopted a prudent approach to provisioning.

Provisions shown on the Statement of Financial Position include the Foreign Currency Translation Reserves, Gold Revaluation Reserves, Market Value Revaluation Reserves and Pension Reserve.
s. Gold Reserve Gold is valued at the market price prevailing at the year end.

No distinction is made between the price and currency revaluation differences for gold.

Instead, a international financial institutions (See Note 10).

In order to provide a more appropriate presentation, these amounts include the portion of the GORTT’s contributions issued to these organisations in the form of Promissory Notes where applicable.
These balances are stated at cost once there is no quoted market price in an active market and the fair value cannot be reliably determined.

For those that are quoted in an active market, the instrument is carried at fair value based on the closing price at year end.

u.

Capital The entire capital of the Bank is held by the GORTT.
Provision is made in Section 34(5) of the Central Bank Act for the Paid-up portion of the authorised capital of the Bank to be increased each year by an amount of not less than 15 percent of the amount to be paid into the Consolidated Fund, until the Paid-up portion of the Authorised Capital is equal to the Authorised Capital.

Currently the Paid up portion of the Authorised Capital of the Bank is equal to the Authorised Capital (see Note 22).
v. Reserves Provision is made in Sections 35(3) and 35(6) of the Central Bank Act for the Bank to place in the General Reserve Fund or the Special Reserve Funds, or in both, an amount not exceeding ten percent (10%) of the net surplus of the Bank for each financial year, until the General Reserve Fund is equal to the Authorised Capital.

At 30 September 2014, the General Reserve Fund increased by $20 million to $767 million (2013: $747 million).
39 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Notes to Consolidated Financial Statements FOR THE YEAR ENDED 30 SEPTEMBER 2014 (Expressed in Trinidad & Tobago Dollars) w. Transfer of Surplus conduct required of staff and specific internal control systems designed around the particular characteristics The Central Bank Act states under section 35(5) that of various Bank activities.
at the end of each financial year, after allowing for the amount referred to in section 35(3), the net profit of In addition to operational risk, the Bank is exposed the Bank shall be paid into the Consolidated Fund.

to various risks arising from its responsibility for the x.

Revenue Recognition management of the official foreign currency reserves of the country.

These risks and the measures taken to mitigate them in the portfolio are as follows: i.
Interest income and interest expense Credit risk Interest income and expense are recognised in risk that a counterparty will be unable to pay amounts The Bank takes on exposure to credit risk which is the the Statement of Comprehensive Income for all in full when due.

interest-bearing instruments on an accruals basis.


Interest income includes coupons earned on Credit risk is mitigated by the establishment of fixed income investments and accrued discount counterparty concentration limits and by the and premium on treasury bills and other discount establishment of minimum rating standards that each instruments.

counterparty must attain.

ii.


Dividend income Currency risk The Bank takes on exposure to fluctuations in the prevailing foreign currency exchange rates on its Dividend income is recognised when the right to foreign currency portfolios.

Management seeks receive payment is established.

iii.

Other income and expenses to mitigate currency risk by aligning the currency composition of the foreign portfolio to the settlement of trade and external debt.
Interest rate risk All other significant items of income and The Bank invests in securities and maintains demand expenditure are accounted for on the accruals deposit accounts as a part of its normal course of basis.

y. Comparatives business.

Interest rate risk is the risk of loss arising from changes in prevailing interest rates.

The Bank manages this risk by establishing duration limits for the portfolio.
Liquidity risk Where necessary, comparative figures have been The Bank is exposed to daily calls on its available cash adjusted to take into account changes in presentation resources from overnight deposits, current accounts in the current year.

and maturing deposits.

3.


FINANCIAL RISK MANAGEMENT Liquidity risk is managed by the grouping of reserves into several tranches according to liquidity requirements, and defining specific asset classes and Operational risk is the risk of loss in both financial duration limits for each tranche, consistent with its and non-financial terms resulting from human error defined liquidity objectives.

and the failure of internal processes and systems.


Operational risk management includes bank-wide corporate policies which describe the standard of 40 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 4.
Cash and cash equivalents Currency on hand Sep-14 $'000 Sep-13 $'000 9,441 5,852 Balances held with banks 2,655,544 2,594,088 Repurchase agreements 4,009,544 3,946,709 Fixed deposits 27,716,765 27,436,726 Short-term investments 1,316,320 668,463 35,707,614 34,651,838 Represented by: Foreign currency - cash and cash equivalents Currency on hand 959 - Balances held with banks 872,834 153,898 Repurchase agreements 4,009,544 3,946,709 Fixed deposits 27,716,765 27,436,726 Short-term investments 1,316,320 668,463 33,916,422 32,205,796 Local currency - cash and cash equivalents Cash on hand 8,482 5,852 Balances held with banks 1,782,710 2,440,190 1,791,192 2,446,042 35,707,614 34,651,838 Local currency - balances with banks This balance is comprised mostly of cheque deposits made by the GORTT which are sent for clearance at the commercial banks.
These are settled against commercial banks’ reserve balances on the next working day.

41 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Notes to Consolidated Financial Statements FOR THE YEAR ENDED 30 SEPTEMBER 2014 (Expressed in Trinidad & Tobago Dollars) 5.
Investment securities Foreign currency investment securities Available for sale Loans and advances Local currency investment securities Available for sale - Local securities Loans and advances Sep-14 $'000 Restated Sep-13 Restated Sep-12 $'000 $'000 28,577,388 27,435,665 26,594,683 168,762 228,106 248,052 28,746,150 27,663,771 26,842,735 29,588 159,133 276,615 171,191 82,322 190,361 188,721 447,806 272,683 Total investment securities 28,934,871 28,111,577 27,115,418 Available for sale investments Foreign currency Amortised Cost 28,591,652 27,228,213 25,816,387 Appreciation in Market Value (267,219) (171,963) Appreciation in Foreign Currency 252,955 379,415 216,506 561,791 28,577,388 27,435,665 26,594,683 Local currency Bonds Investments in related enterprises (Note 6) 25,166 4,422 25,193 251,422 29,588 276,615 25,940 56,382 82,322 Total available for sale investments 28,606,976 27,712,280 26,677,005 Loans and advances Foreign currency Cost Sep-14 $'000 Restated Restated Sep-13 $'000 Sep-12 $'000 168,762 288,119 308,053 Provision for doubtful debts - (60,013) (60,001) 168,762 228,106 248,052 Local currency Loans and advances Provision for doubtful debts 229,173 (70,040) 241,231 260,402 (70,040) (70,041) 159,133 171,191 190,361 Total loans and advances 327,895 399,297 438,413 Total investment securities 28,934,871 28,111,577 27,115,418 42 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 The Bank has reassessed local bonds held and based on this reassessment a more appropriate valuation methodology was
 identified and has been applied retrospectively.
6.
Investment in related enterprises Cost Appreciation in market value Sep-14 $'000 4,422 - Sep-13 $'000 17,822 233,600 4,422 251,422 The Bank has an interest in the following related enterprises to help promote the development of the country’s financial infrastructure: Trinidad and Tobago Unit Trust Corporation Sep-14 $'000 Sep-13 $'000 2,500 2,500 Deposit Insurance Corporation 1,000 Home Mortgage Bank First Citizens Bank Trinidad and Tobago Interbank Payments System - - 922 1,000 110,000 137,000 922 4,422 251,422 The Bank also has a related interest in the Office of the Financial Services Ombudsman (OFSO).
The main objectives of the OFSO are to receive complaints arising from the provision of financial services to individuals and small businesses, and to facilitate the settlement of these complaints.

The remuneration of the Financial Services Ombudsman is met by the Bank while the day to day operations of the Office are funded by the financial institutions.

During the year the Bank finalized the sale of shares held in Home Mortgage Bank and First Citizens Bank Limited.
43 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Notes to Consolidated Financial Statements FOR THE YEAR ENDED 30 SEPTEMBER 2014 (Expressed in Trinidad & Tobago Dollars) 7.

Fair value of assets and liabilities a.
Fair value hierarchy The fair value of the Bank’s assets and liabilities are analysed by the fair valuation hierarchy below: Recurring fair value measurement of assets and liabilities Assets Asset-backed Securities: Auto Loan Receivable Credit Card Receivable Corporate Bonds Mortgage-backed Securities: Federal Home Loan Mortgage Corporation (FHLMC) Federal National Mortgage Association (FNMA) Government National Mortgage Association (GNMA) 1 Collateralized Mortgage backed Securities (CMO) Other Mortgages Government Issues Gold Investment in related enterprises Municipals Total Level 1 Level 2 Level 3 $’000 $’000 $’000 1,732,708 1,085,561 3,864,561 266,022 768,659 22,192 195,332 550,787 Total $’000 1,732,708 1,085,561 3,864,561 266,022 768,659 22,192 195,332 550,787 12,736,873 6,892,678 19,629,552 474,799 4,422 12,383 474,799 4,422 12,383 13,211,672 15,390,882 4,422 28,606,976 The Bank had no traded financial liabilities at the reporting date.
Assessing the significance of a particular input to the entire b.

Transfers between Fair Value Hierarchy Levels IFRS 13 – Fair Value Measurement was implemented on 1st October 2013.

There were no transfers between the hierarchy measurement requires judgment, taking into account factors levels during the financial year (2013- 2014) specific to the asset or liability.
Furthermore, the estimated fair values of certain financial instruments have been determined c. Level 1 fair values using available market information or other appropriate valuation Assets and liabilities categorized as Level 1 are those methodologies that require judgment in interpreting market data whose values are based on quoted market prices in active and developing estimates.

Consequently, the estimates made do markets.


No adjustments are made to the quoted price when not necessarily reflect the amounts that the Bank could realise in determining the fair value of these assets.

a current market exchange.

44 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 d. Level 2 fair values Assets and liabilities categorized as Level 2 are valued based on a compilation of primarily observable market information.
This includes broker quotes in a nonactive market, alternative pricing sources supported by observable inputs and investments in securities with fair values obtained via fund managers.

e. Level 3 fair values The Bank’s investments in several related companies are accounted for as available-for-sale investments (see Note 6).

However, none of these equity investments has a quoted market price in an active market and therefore their fair value cannot be reliably measured.
The cost of these equity investments is therefore considered a reasonable approximation of fair value.

45 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Notes to Consolidated Financial Statements FOR THE YEAR ENDED 30 SEPTEMBER 2014 (Expressed in Trinidad & Tobago Dollars) 8.
Retirement benefit asset Consolidated statement of financial position obligations for: - Pension plan - Post-retirement medical plan a) Pension plan Defined benefit obligation Fair value of assets IAS 19 net defined asset Sep-14 $'000 Restated Sep-13 Restated Sep-12 $'000 $'000 297,799 219,666 249,000 (21,550) (24,390) (27,337) 276,249 195,276 221,663 Restated Restated Sep-14 $'000 Sep-13 $'000 Sep-12 $'000 (541,319) (595,196) (502,141) 839,118 814,862 751,141 297,799 219,666 249,000 Reconciliation of opening and closing defined benefit assets Define benefit asset at prior year end (219,666) (249,000) (236,076) Unregonised Gains Opening defined benefit asset (Decrease)/Increase in pension asset Pension cost Re-measurements of net define benefit (asset)/liability Bank contribution paid (219,666) (249,000) (228,508) 7,568 13,637 (86,407) (5,363) (78,133) 4,069 30,227 (4,962) 29,334 6,098 (22,624) (3,966) (20,492) Closing defined benefit asset (297,799) (219,666) (249,000) Amounts recognised in the earnings statement Current service cost 23,790 17,116 14,638 Net Interest on net defined benefit asset (11,222) (13,940) (14,162) Past service cost Expense allowance Net pension cost 5,622 1,069 893 13,637 4,069 6,098 Re-measurements of net defined benefit asset/liability Experience (gains)/ losses (86,407) 30,227 (15,056) 46 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 8.
Retirement benefit asset – cont’d Actuarial assumptions Discount rate Expected return on plan assets Projected future rate of salary increase Value of pension scheme asset b) Post-Employment Medical Plan Defined benefit obligation Fair value of assets Unrecognised gain IAS 19 net defined obligation Reconciliation of opening and closing defined benefit liability Defined benefit liability Unrecognised loss Opening defined benefit asset (Decrease)/Increase in plan Pension cost Re-measurements of net define benefit asset/liability Bank contribution paid Sep-14 $'000 Restated Sep-13 Restated Sep-12 $'000 $'000 6.00% n/a 5.16% 5.00% n/a 5.16% 5.50% 5.50% 5.16% Based on Market Value at Balance Sheet Date Sep-14 $'000 Restated Restated Sep-13 $'000 Sep-12 $'000 (21,550) (24,390) (27,337) - - (21,550) (24,390) (27,337) - - (21,550) (24,390) (27,337) (24,390) (27,337) (25,481) - - (324) (24,390) (27,337) (25,805) (2,633) (2,807) (3,114) 5,023 450 2,840 5,496 258 2,947 1,085 497 (1,532) Closing defined benefit liability (21,550) (24,390) (27,337) Amounts recognised in the earnings statement Current service cost Interest on defined benefit obligation Net pension cost Return on plan assets: The plan holds no assets Actuarial assumptions Medical cost increases (1,422) (1,211) (2,633) (1,313) (1,494) (2,807) (1,511) (1,603) (3,114) Restated Restated Sep-14 Sep-13 Sep-12 5.00% 5.00% 5.00% 47 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Notes to Consolidated Financial Statements FOR THE YEAR ENDED 30 SEPTEMBER 2014
 (Expressed in Trinidad & Tobago Dollars) 9.
Accounts receivable and prepaid expenses Sep-14 $'000 Sep-13 $'000 Foreign receivables Trade receivables - investments sold 5,901,435 4,395,840 Foreign interest receivable Other receivables 94,952 3,611 66,513 2,444 5,999,998 4,464,797 Accounts receivable and prepaid expenses Interest receivable on domestic investments 57,494 57,495 Amounts recoverable from CLF/GORTT (Note 25) 2,123,625 2,109,564 Other receivables Prepayments Suspense accounts- pending transfers Value added tax 18,381 9,596 31 53 16,066 7,463 246,161 175 2,209,180 2,436,924 10.
Subscriptions to International Financial Institutions Sep-14 $'000 Sep-13 $'000 Banco Latino Americano De Exportaciones 31,334 25,696 Caribbean Development Bank Caribbean Information and Credit Rating Services Ltd Inter-American Development Bank International Bank for Reconstruction and Development International Development Association International Finance Corporation International Monetary Fund 8,194 1,668 6,694 8,194 1,684 6,694 113,054 113,162 5,558 333 5,567 333 3,233,359 3,257,052 3,400,194 3,418,382 The holdings in Banco Latino Americano De Exportaciones (Bladex) are based on a quoted market price off the New York Stock Exchange of US$30.68/share as at 30 September 2014.
Subsequent to year end the Bank subscribed to Series C shares of Common Capital Stock of Corporacion Andina de Fomento (CAF) at a cost of $684.3 million.

CAF is a development bank comprised of various countries and banks from Latin American, Caribbean and Europe.

48 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 11.
Other assets Lease asset Stock of notes and coins Consumables Lease asset Sep-14 $'000 130,447 129,889 1,543 Sep-13 $'000 142,127 102,583 1,406 261,879 246,116 In 1995 the Bank entered into a thirty-year finance lease agreement with the GORTT for the purchase of the Ministry of Finance Building with a rate of interest of 2%.
Present value of the minimum lease payments 130,447 142,127 Sep-14 $'000 Sep-13 $'000 Broken out as follows: Not later than one year Later than one year and not later than five years Later than five years 11,913 50,084 68,450 11,680 49,102 81,345 Present value of the minimum lease payments 130,447 142,127 Unearned Finance Income Broken out as follows: Not later than one year Later than one year and not later than five years Later than five years Unearned Finance Income Stock of notes and coins Notes Coins Sep-14 $'000 Sep-13 $'000 14,775 17,618 2,609 8,005 4,161 2,843 8,987 5,788 14,775 17,618 Sep-14 $'000 94,381 35,508 Sep-13 $'000 81,155 21,428 129,889 102,583 During the year, the total of $13.8 million was expensed in relation to Notes sent for destruction.
49 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Notes to Consolidated Financial Statements FOR THE YEAR ENDED 30 SEPTEMBER 2014 (Expressed in Trinidad & Tobago Dollars) 12.
Property, plant and equipment Land & Building Leasehold Property Machinery & Equipment Computer Equipment Furniture, Fixture & Fittings Capital work in progress Total $'000 $'000 $'000 $'000 $'000 $'000 $'000 As at 30 September 2013 Net book value Balance b/fwd 01 Oct 2012 142,165 7,905 19,640 14,246 28,682 6,970 219,608 Transfers Additions Disposals Revaluation adjustment Depreciation for the year Balance c/fwd Represented by: 3,758 1,959 - - (14,854) 133,028 Cost 414,942 Accumulated depreciation (281,914) 133,028 - - - - (7) 7,898 8,134 (236) 7,898 450 6,012 (149) - (8,103) 17,850 1,172 2,521 (7) - (6,208) 11,724 12 850 (14) 772 (3,185) 27,118 (5,392) 10,272 - - - - 21,614 (170) 772 (32,357) 11,850 209,468 106,756 79,179 52,248 11,850 673,109 (88,906) (67,455) (25,130) - (463,641) 17,850 11,724 27,118 11,850 209,468 Land & Building Leasehold Property Machinery & Equipment Computer Equipment Furniture, Fixture & Fittings Capital work in progress Total $'000 $'000 $'000 $'000 $'000 $'000 $'000 As at 30 September 2014 Net book value Balance b/fwd 01 Oct 2013 Transfers Reclassification of assets Additions Disposals Revaluation adjustment Depreciation for the year Balance c/fwd Represented by: 133,028 21,504 7,898 2,789 - 173 - - - - - - (14,551) 140,154 (8) 10,679 17,850 2,072 8,928 (520) - (8,387) 19,943 11,724 3,588 7,424 (197) - (6,653) 15,886 27,118 11,850 209,468 1,202 (31,155) - - - - 5,392 (26) 1,105 (3,536) 31,255 21,559 43,476 - - - (743) 1,105 (33,135) 2,254 220,171 Cost 436,620 10,923 116,068 89,792
 59,265 2,254 714,922 Accumulated depreciation (296,466) (244) (96,125) (73,906) (28,010) - (494,751) 140,154 10,679 19,943 15,886 31,255 2,254 220,171 50 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 13.
Demand liabilities Demand liabilities - foreign Foreign deposits Government special accounts Demand liabilities - local Notes in circulation Coins in circulation Sep-14 $'000 Sep-13 $'000 5,396 7,226 222,234 190,542 227,630 197,768 Sep-14 $'000 Sep-13 $'000 7,211,972 6,372,387 206,632 195,727 Deposits by commercial banks 26,159,804 27,075,750 Deposits by non-banking financial institutions Statutory deposits - insurance companies 393,373 49,417 337,294 32,687 Deposits by government and government agencies (2,585,589) (4,474,170) Deposits by other current accounts 3,388,782 4,567,241 Deposits by regional and international institutions 36,740 36,533 34,861,131 34,143,449 Deposits by financial institutions As part of the Central Bank’s monetary policy to absorb excess liquidity, commercial banks continued to hold special deposits The statutory cash reserves for commercial banks and non-bank at the Central Bank.
As at 30 September 2014, there were four financial institutions remained unchanged at 17% and 9% of their one-year deposits as follows:- prescribed liabilities, respectively.

The required reserve balances held by commercial banks increased by 11% as at September 2014 while requirements for non-banks also increased by 23%.

This was as a result of their higher prescribed liabilities during the period under review.
In addition to the statutory cash reserve, the commercial banks continued to hold a secondary reserve of 2% of their prescribed liabilities.

A fixed rate of interest of 0.25% is paid on these holdings.

• A deposit of $2.0 billion which matures on 31 October 2014 • A deposit of $1.5 billion which matures on 29 December 2014 • A special fixed deposit of $1.5 billion which matures on 13 March 2015 • A special fixed deposit of $1 billion which matures on 1 May 2015.
Interest paid to commercial banks on these fixed deposits during the fiscal year amounted to $15.3 million.

51 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Notes to Consolidated Financial Statements FOR THE YEAR ENDED 30 SEPTEMBER 2014 (Expressed in Trinidad & Tobago Dollars) 14.
Accounts payable Accounts payable - Foreign Bilateral accounts Sep-14 $'000 Sep-13 $'000 25 612 Pending Trades - investments purchased 6,713,673 4,575,165 Other payables 16,068 20,257 6,729,766 4,596,034 Accounts payable - Local Trade payables and accrued charges Interest payable Unclaimed monies Government special accounts Blocked accounts Sep-14 $'000 59,941 26,611 13,993 Sep-13 $'000 60,995 40,974 11,541 145,152 133,059 26,054,652 24,754,947 Promissory Notes due to First Citizens Bank Ltd. (Note 25) 1,873,867 1,882,450 Other payables 31,912 51,935 28,206,128 26,935,901 15.
Provisions The Bank has adopted a prudent approach for provisioning in order to maintain adequate capacity to fulfil its functions.

This accounting treatment reflects the limitations on the creation of reserves set out in Section 35 of the Central Bank Act.
The Act specifies the terms and conditions governing General and Special Reserve funds and the creation of provisions for bad and doubtful debts, depreciation in assets, contributions to staff pension benefits and other contingencies, before payment of the net surplus for the financial year to the GORTT.

This is a departure from the definition outlined in IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
The provisions shown on the Statement of Financial Position comprise: Provisions Restated Restated Sep-14 $'000 Sep-13 $'000 Sep-12 $'000 Gold reserve 276,189 328,423 505,402 Foreign currency exchange rate reserves 4,155,413 4,899,914 4,901,301 Pension reserve Revaluation reserve on investments 276,249 (47,347) 195,276 (79,793) 221,663 210,775 4,660,504 5,343,820 5,839,141 52 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 16.
Income from foreign currency assets Sep-14 $'000 Sep-13 $'000 Interest and other income Interest on United States Dollar balances & securities 324,540 320,106 Interest on Sterling balances & securities Interest on other foreign balances & securities Other income 1,373 2,222 1,385 1,241 1,064 1,228 329,520 323,639 Investment expenses (25,750) (24,669) Loss from currency translations (33,088) (12,039) Net loss realised on disposal and amoritisation of investment Gains realised on disposal of investments Losses realised on disposal of investments 17,239 321,865 (269,249) (178,406) (252,010) 143,459 17.
Income from local currency assets Interest Income Loans Other investments Other Income General earnings Income from International Monetary Fund Dividends Fees charged to financial institutions Profit on sale of assets Heritage and Stabilisation Fund management fees Profit on sale of investments in related entities Other Sep-14 $'000 Sep-13 $'000 501,279 456,009 9,676 9,187 510,955 465,196 1,604 1,010 11,532 48,235 143 10,448 233,600 1,299 307,871 9,383 672 6,072 40,422 694 9,459 - 1,773 68,474 53 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Notes to Consolidated Financial Statements FOR THE YEAR ENDED 30 SEPTEMBER 2014 (Expressed in Trinidad & Tobago Dollars) 18.
Other operating expenses Other operating expenses include: Advertising and public relations Computer expenses Library expenses Electricity Insurance Telephone Loss on disposal of assets Maintenance cost Printing and stationery CL Financial expenses (Note 25) Loss on sale of investment in related parties Professional fees 50th Anniversary expenses Other expenses 19.
Taxation Sep-14 $'000 Sep-13 $'000 4,683 13,301 2,915 4,158 2,614 5,038 17 29,253 3,282 981 7,600 6,654 9,280 12,581 102,358 3,224 18,716 2,570 4,269 2,665 3,771 14 21,704 4,285 23,844 16 3,171 - 8,124 96,373 Sep-14 $'000 Sep-13 $'000 Net surplus before taxation Corporation tax @ 25% 329,888 82,472 437,710 109,427 Income/expenses not subject to tax (82,472) (109,427) Business levy Tax charge - - - - 20.
Capital Commitments There was $3.3 million in outstanding commitments for capital expenditure as at 30 September 2014 (30 September 2013 -$15.3 million) 54 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 21.

Leasehold obligations – operating leases a.

Operating leases where the Bank is the lessor The Bank currently has two lease arrangements for offices located in the Bank’s building.

The tenants are charged a monthly rental and service fees based on the square footage occupied.

b.
b.

Operating leases where the Bank is the lessee The Bank also leases equipment and premises under operating lease arrangements.

The leases have varying terms, escalation clauses and renewal rights.

22.

Capital Authorised capital Paid-up capital 23.


Fair Value Reserve Sep-14 $’000 Sep-13 $'000 800,000 800,000 800,000 800,000 Sep-14 $'000 Sep-13 $'000 Revaluation of available for sale investments - 126,000 55 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Notes to Consolidated Financial Statements FOR THE YEAR ENDED 30 SEPTEMBER 2014 (Expressed in Trinidad & Tobago Dollars) 24.

Related Party Transactions a.


Government of the Republic of Trinidad and Tobago The Bank as part of its regular operations enters into various transactions with the GORTT, state owned entities, state agencies and local government bodies.

It should be noted that all transactions are done at arm’s length and in accordance with normal business practices.
Transactions and balances with the Bank and these entities are listed below: Sep-14 $'000 Sep-13 $'000 Interest income from investments 501,943 456,698 Interest expense 50,630 82,668 Assets Local currency investment securities 20,759 20,407 Liabilities Demand liabilities - foreign Demand liabilities - local Accounts payable b.
Related Enterprises 222,234 190,542 (1,338,391) (3,353,168) 26,093,442 24,781,644 These Financial Statements include the following transactions with related enterprises (see Note 6) during the year: Income Dividend income Rental income Other income Expenditure Salaries and related expenditure Other expenses Ending period balances Investments in related enterprises Receivables from related enterprises Payables to related enterprises 56 Sep-14 $'000 Sep-13 $'000 4,572 944 148 5,664 1,573 - 1,573 4,422 486 2,388 4,452 720 151 5,323 1,076 - 1,076 251,422 382 24,488 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 c. Key Management Compensation Key management personnel are those persons having authority and responsibility for planning, directing, and controlling the key activities of the Bank, directly or indirectly, including all executives, senior, middle and junior managers.
Sep-14 $'000 Sep-13 $'000 Short-term employee benefits Directors' Fees 61,787 992 46,183 1,491 25.

CL Financial Group Matter During January 2009, representatives of CL Financial Limited (CLF) met with the Bank and the Ministry of Finance requesting urgent liquidity support for CLICO Investment Bank Limited (CIB), CLICO (Trinidad) Limited (CLICO) and British American Insurance Co (Trinidad) Limited (BAT).
On 30 January 2009, in an effort to protect the interest of depositors and policyholders, the Minister of Finance entered into a Memorandum of Understanding with CLF for the provision of liquidity support for CIB, CLICO and BAT under certain conditions.

On 31 January 2009 the Bank assumed control of CIB, under Section 44D of the Central Bank Act (the Act) and consequent to an amendment to the Act, it also assumed control of CLICO and BAT on 13 February 2009.
As a result of these actions the Bank currently has in its Financial Statements the following assets and liabilities: Sep-14 $'000 Sep-13 $'000 Assets Amounts recoverable from CLF/GORTT 2,123,625 2,109,564 Liabilities Promissory Notes due to First Citizens Bank Limited 1,873,867 1,882,450 The Bank has been named as a party to the ongoing Commission of Enquiry into CLF and its related financial institutions.

The Bank has incurred significant legal and professional fees associated with this matter.
In addition, the Bank together with CLICO, has initiated civil proceedings against former executives of CLICO.

In the context of delays with criminal action, this suit was filed with the dual objective of bringing those responsible to justice and recovering monies spent by the GORTT.

The outcome of this matter cannot reliably be estimated at this time.

Legal, consultancy and other costs incurred in relation to all CLF matters have been disclosed in Note 18.
57 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Notes to Consolidated Financial Statements FOR THE YEAR ENDED 30 SEPTEMBER 2014 (Expressed in Trinidad & Tobago Dollars) Subsequent to the year end (October 2014), the Bank working with the GORTT facilitated the sale of certain assets held by the CLF Group.
As a result of this transaction, the Government’s deposits in its blocked accounts at the Central Bank increased by approximately $7.5 billion, representing the proceeds of a Treasury Bill that was issued to manage liquidity.

26.

Contingent Liabilities The Bank is currently involved in claims and counterclaims arising from the conduct of its business.
Based on the facts currently available to the Bank, it can be concluded that the outcome of these matters would not have a material adverse effect on the position of the Bank.

27.

Subsequent Events There were two transactions entered into after the year end which related to significant non-adjusting post balance sheet events.

These have been disclosed further in Note 10 and Note 25.

58 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 28.
Prior period restatements The following prior period restatements were made in the current year: a.

The Bank adopted IAS 19, Employee Benefits Revised which required retrospective application.

The Retirement Benefit Asset has been restated to comply with the requirements of the standard.

Further details are provided below as well as in Note 8.

In addition, the Bank does not recognise unrealised gains and losses through the Income Statement due to the requirements of the Central Bank Act.
As a result, adjustments to the Retirement Benefit Asset are offset against the Provision account to eliminate the impact on the Net Surplus.

Therefore, the Provision for the respective years has also been restated accordingly.

Further details are included below and in Note 15.
Previously reported Sep-13 $'000 Restated Adjustment Sep-13 $'000 Sep-13 $'000 ASSETS Local currency assets Retirement benefit asset 204,190 195,276 Net assets 204,190 195,276 (8,914) (8,914) Previously reported Sep-12 $'000 Restated Adjustment Sep-12 $'000 Sep-12 $'000 ASSETS Local currency assets Retirement benefit asset 205,846 221,663 Net assets 205,846 221,663 15,817 15,817 Previously reported Sep-13 $'000 Restated Adjustment Sep-13 $'000 Sep-13 $'000 EXPENSES Operating Expenses Salaries and related expenses 184,648 193,562 184,648 193,562 8,914 8,914 59 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Notes to Consolidated Financial Statements FOR THE YEAR ENDED 30 SEPTEMBER 2014 (Expressed in Trinidad & Tobago Dollars) 28.
Prior period restatements - cont’d b.

The Bank has restated its bonds held under local currency available for sale securities to reflect a more appropriate fair value methodology.
See below and Note 5 for further details: Previously reported Sep-13 $'000 Restated Adjustment Sep-13 $'000 Sep-13 $'000 ASSETS Local currency assets Local currency investment securities 443,021 447,806 Net assets 443,021 447,806 4,785 4,785 Previously reported Sep-12 $'000 Restated Adjustment Sep-12 $'000 Sep-12 $'000 ASSETS Local currency assets Local currency investment securities 268,214 272,683 Net assets 268,214 272,683 4,469 4,469 c. The Provisions would have been restated as a result of these two items as follows: Previously reported Sep-13 $'000 Restated Adjustment Sep-13 $'000 Sep-13 $'000 5,347,949 5,343,820 5,347,949 5,343,820 (4,129) (4,129) Previously reported Sep-12 $'000 Restated Adjustment Sep-12 $'000 Sep-12 $'000 5,818,855 5,839,141 5,818,855 5,839,141 20,286 20,286 LIABILITIES Local currency liabilities Provisions Net liabilities LIABILITIES Local currency liabilities Provisions Net liabilities 60 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 29.
Statement of Financial Position-Current/Non-Current distinction ASSETS Foreign currency assets Foreign currency cash and cash equivalents Foreign currency investment securities Foreign receivables Subscriptions to international financial institutions International Monetary Fund - Holdings of Special Drawing Rights Local currency assets Local currency cash and cash equivalents Local currency investment securities Retirement benefit asset Accounts receivable and prepaid expenses Other assets Property, plant and equipment TOTAL ASSETS LIABILITIES Foreign currency liabilities Demand liabilities - foreign Sep-14 Current $'000 Non-Current $'000 Total $'000 33,916,422 - 33,916,422 14,345,437 14,400,713 28,746,150 5,999,998 - 5,999,998 - - 3,400,194 3,400,194 2,656,812 2,656,812 54,261,857 20,457,719 74,719,576 1,791,192 - 1,791,192 6,731 - 181,990 276,249 188,721 276,249 39,903 2,169,277 2,209,180 1,543 - 260,336 220,171 261,879 220,171 1,839,369 3,108,021 4,947,392 56,101,227 23,565,740 79,666,968 227,630 - 227,630 International Monetary Fund - Allocation of Special Drawing Rights - 3,093,995 3,093,995 Accounts payable Local currency liabilities Demand liabilities - local Accounts payable Provision for transfer of surplus to government Provisions CAPITAL AND RESERVES Capital General Reserve Fair Value Reserve Retained Earnings 6,729,766 - 6,729,766 6,957,396 3,093,995 10,051,391 34,861,131 - 34,861,131 1,986,155 26,219,973 28,206,128 177,364 - 177,364 - 4,660,504 4,660,504 37,024,648 30,880,477 67,905,127 - - - -
 800,000 766,279 - 800,000 766,279 - 144,171 144,171 1,710,450 1,710,450 TOTAL LIABILITIES, CAPITAL AND RESERVES 43,982,044 35,684,922 79,666,968 61 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Notes to Consolidated Financial Statements FOR THE YEAR ENDED 30 SEPTEMBER 2014 (Expressed in Trinidad & Tobago Dollars) 29.
Statement of Financial Position-Current/Non-Current distinction cont’d ASSETS Foreign currency assets Foreign currency cash and cash equivalents Foreign currency investment securities Foreign receivables Subscriptions to international financial institutions International Monetary Fund - Holdings of Special Drawing Rights Local currency assets Local currency cash and cash equivalents Local currency investment securities Retirement benefit asset Accounts receivable and prepaid expenses Other assets Property, plant and equipment TOTAL ASSETS LIABILITIES Foreign currency liabilities Demand liabilities - foreign Restated Sep-13 Current $'000 Non-Current $'000 Total $'000 32,205,796 - 32,205,796 14,809,018 12,854,753 27,663,771 4,464,797 - 4,464,797 - - 3,418,382 3,418,382 2,675,735 2,675,735 51,479,611 18,948,870 70,428,481 2,446,042 74,361 - - 2,446,042 373,445 195,276 447,806 195,276 2,423,833 13,091 2,436,924 1,346 - 244,770 209,468 246,116 209,468 4,945,582 1,036,050 5,981,632 56,425,193 19,984,920 76,410,113 197,768 - 197,768 International Monetary Fund - Allocation of Special Drawing Rights - 3,116,665 3,116,665 Accounts payable Local currency liabilities Demand liabilities - local Accounts payable 4,596,034 - 4,596,034 4,793,802 3,116,665 7,910,467 34,143,449 - 34,143,449 2,028,937 24,906,964 26,935,901 Provision for transfer of surplus to government 392,550 - 392,550 Provisions CAPITAL AND RESERVES Capital General Reserve Fair Value Reserve Retained Earnings - 5,343,820 5,343,820 36,564,936 30,250,783
 66,815,720 - - - - 800,000 746,572 126,000 11,354 800,000 746,572 126,000 11,354 1,683,926 1,683,926 TOTAL LIABILITIES, CAPITAL AND RESERVES 41,358,738 35,051,375 76,410,113 62 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 29.
Statement of Financial Position-Current/Non-Current distinction cont’d ASSETS Foreign currency assets Restated Sep-12 Current $'000 Non-Current $'000 Total $'000 Foreign currency cash and cash equivalents 32,372,487 - 32,372,487 Foreign currency investment securities Foreign receivables Subscriptions to international financial institutions International Monetary Fund - Holdings of Special Drawing Rights Local currency assets Local currency cash and cash equivalents Local currency investment securities Retirement benefit asset 7,460,997 19,381,738 26,842,735 6,007,948 - 6,007,948 - - 3,414,035 3,414,035 2,674,246 2,674,246 45,841,432 25,470,019 71,311,451 1,716,096 - 1,716,096 5,392 - 267,291 221,663 272,683 221,663 Accounts receivable and prepaid expenses 2,151,368 14,643 2,166,011 Other assets Property, plant and equipment 1,597 - 269,594 219,608 271,191 219,608 3,874,453 972,513 4,867,252 TOTAL ASSETS 49,715,885 26,442,532 76,178,703 LIABILITIES Foreign currency liabilities Demand liabilities - foreign 197,433 - 197,433 International Monetary Fund - Allocation of Special Drawing Rights - 3,115,305 3,115,305 Accounts payable Local currency liabilities Demand liabilities - local Accounts payable 6,095,922 - 6,095,922 6,293,355 3,115,305 9,408,660 33,802,701 - 33,802,701 2,005,148 23,054,955 25,060,103 Provision for transfer of surplus to government 555,332 - 555,332 Provisions CAPITAL AND RESERVES Capital General Reserve Retained Earnings - 5,839,141 5,839,141 36,363,181 28,873,810 65,257,277 - - - - 800,000
 702,955 9,811 800,000 702,955 9,811 1,512,766 1,512,766 TOTAL LIABILITIES, CAPITAL AND RESERVES 42,656,536 33,501,881 76,178,703 63 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Notes to Consolidated Financial Statements FOR THE YEAR ENDED 30 SEPTEMBER 2014 (Expressed in Trinidad & Tobago Dollars) 30.
Parent The Financial Statements of the Central Bank of Trinidad and Tobago are presented below: Statement of Financial Position As at 30 September 2014 Sep-14 $'000 Restated Sep-13 $'000 Restated Sep-12 $'000 ASSETS Foreign currency assets Foreign currency cash and cash equivalents 33,916,422 32,205,796 32,372,487 Foreign currency investment securities Foreign receivables 28,746,150 27,663,771 26,842,735 5,999,998 4,464,797 6,007,948 Subscriptions to international financial institutions 3,400,194 3,418,382 3,414,035 International Monetary Fund - Holdings of Special Drawing Rights 2,656,812 2,675,735 2,674,246 74,719,576 70,428,481 71,311,451 Local currency assets Local currency cash and cash equivalents 1,791,192 2,446,042 1,716,096 Local currency investment securities Retirement benefit asset 188,721 276,249 315,806 195,276 266,683 221,663 Accounts receivable and prepaid expenses 2,209,429 2,437,030 2,166,040 Other assets Property, plant and equipment 261,879 220,171 246,116 209,468 271,191 219,608 4,947,641 5,849,738 4,861,281 TOTAL ASSETS 79,667,217 76,278,219 76,172,732 LIABILITIES Foreign currency liabilities Demand liabilities - foreign 227,630 197,768 197,433 International Monetary Fund - Allocation of Special Drawing Rights 3,093,995 3,116,665 3,115,305 Accounts payable Local currency liabilities Demand liabilities - local Accounts payable 6,729,766 4,596,034 6,095,922 10,051,391 7,910,467 9,408,660 34,861,131 34,143,449 33,802,701 28,350,548 26,941,361 25,063,943 Provision for transfer of surplus to
 government 177,364 392,550 555,332 Provisions CAPITAL AND RESERVES Capital General Reserve 4,660,504 5,343,820 5,839,141 68,049,547 66,821,180 65,261,117 800,000 766,279 800,000 746,572 800,000 702,955 1,566,279 1,546,572 1,502,955 TOTAL LIABILITIES, CAPITAL AND RESERVES 79,667,217 76,278,219 76,172,732 64 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 30.
Parent cont’d Statement of Comprehensive Income For the year ended 30 September 2014 Income from foreign currency assets Interest and other income Investment expense Sep-14 $'000 Restated Sep-13 $'000 329,520 (25,750) 303,770 323,639 (24,669) 298,970 Loss from currency translations (33,088) (12,039) Net (loss)/gains realised on disposal and amortisation of investments (252,010) 143,459 18,672 430,390 Income from local currency assets Interest income Rental income Other income Decrease in provisions Total income Operating expenses Printing of notes and minting of coins Salaries and related expenses Interest paid Directors' fees Depreciation Other operating expenses Increase in provisions Total operating expenses 510,955 465,196 3,053 174,911 1,980 66,854 688,919 534,030 - 2,267 707,591 966,687 89,933 135,391 81,395 992 33,135 102,215 67,459 77,391 193,562 129,427 1,487 32,357 96,296 - 510,520 530,520 Net surplus for the period 197,071 436,167 Total comprehensive income for the period 197,071 436,167 65 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 Notes to Consolidated Financial Statements FOR THE YEAR ENDED 30 SEPTEMBER 2014 (Expressed in Trinidad & Tobago Dollars) 30.
Parent cont’d Statement of Changes in Equity For the year ended 30 September 2014 Issued and Fully Paid Up Capital General Reserves Retained Earnings Total $'000 $'000 $’000 $’000 Balance as at 1 October 2012 800,000 702,955 - 1,502,955 Net surplus for the period Transfer of surplus to Consolidated Fund Transfer to General Reserve - - - - - 436,167 436,167 (392,550) (392,550) 43,617 (43,617) - Balance as at 30 September 2013 (Restated) 800,000 746,572 - 1,672,572 Balance as at 1 October 2013 800,000 746,572 - 1,546,572 Net surplus for the period Transfer of surplus to Consolidated Fund Transfer to general reserve - - - - - 197,071 197,071 (177,364) (177,364) 19,707 (19,707) - - Balance as at 30 September 2014 800,000 766,279 - 1,566,279 66 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 30.
Parent cont’d Statement of Cash Flows For the year ended 30 September 2014 Cash flows from operating activities Net surplus for the year before taxation Adjustments for: Depreciation Net gain on disposal of fixed assets Interest income Interest expense Dividend income Provisions Revaluation of Artwork Sep-14 $'000 Restated Sep-13 $'000 197,071 436,167 33,135 (126) 32,357 (680) (840,475) (788,835) 81,395 (4,572) 67,459 (1,105) 129,427 (4,452) (2,267) (772) Cash outflow before changes in operating assets and liabilities (467,217) (199,055) Changes in operating assets and liabilities (Increase)/Decrease in accounts receivable & prepaid expenses (Increase)/Decrease in other assets (Increase)/Decrease in pension asset Increase in accounts payable and other liabilities Net cash flow from operations Cash flows from investing activities Purchase of property, plant and equipment Proceeds from sale of property, plant and equipment Net purchase of investments Net repayment of loans and advances Interest received Dividends received Interest paid (1,265,647) 1,257,228 (27,443) (80,973) 13,623 10,570 4,304,826 693,663 2,463,546 1,776,029 (43,476) (21,614) 869 850 (1,372,037) (1,319,828) 71,402 812,037 4,572 39,116 795,463 4,452 (95,758) (104,478) Net (increase) in International Monetary Fund Holding of Special Drawing Rights and Allocation account (3,747) (128) Payment to Consolidated Fund Net cash flow used in investing activities Cash flows from financing activities Lease payment Net cash flow from financing activities Net
 increase in cash and cash equivalents Foreign currency differences in monetary assets & liabilities Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period (392,550) (555,332) (1,018,688) (1,161,499) 11,680 11,680 11,451 11,451 1,456,538 (400,762) 625,981 (62,726) 34,651,838 34,088,583 35,707,614 34,651,838 67 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 68 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 APPENDICES 2013-2014 70 CENTRAL BANK OF TRINIDAD AND
 TOBAGO ANNUAL REPORT 2014 TABLE A.1 CURRENCY IN CIRCULATION 2010 - 2014 ( Dollars Thousands) End of Month Notes (Old TT) Notes (Republic) Total Notes in Circulation Coins Total Currency in Circulation Sep-10 Sep-11 Sep-12 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep- Source: Central Bank of Trinidad and Tobago 71 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 ’ y
- 2 1 0 2 ) s d n a s u o h T s r a l l o D T T ( 72 , 4 7 5 7 1 9 1 7 , , 3 7 2 1 5 8 6 , , 5 8 9 6 7 6 1 7 , , 4 2 2 3 9 4 7 , , 4 0 4 5 8 5 1 7 , , 1 3 4 8 4 2 7 , , 7 2 8 0 4 8 1 7 , , 5 4 7 0 9 8 7 , , 4 5 0 9 2 5 1 7 , , 3 0 7 9 0 8 7 , , 9 6 8 3 2 6 3 7 , , 2 3 2 0 5 5 8 , , 7 2 3 6 7 1 3 7 , , 3 2 4 5 9 8 7 , , 1 0 9 5 7 1 8 7 , , 5 7 4 9 1 5 7 , , 7 9 4 8 4 2 9 7 , , 0 2 2 8 4 2 3 7 , , 5 0 0 1 9 0 2 1 , , 0 2 2 8 8 8 7 , , 8 5 3 1 2 3 3 7 , , 3 0 1 3 6 2 8 , , 9 1 2 8 7 2 6 7 , , 0 6 0 1 6 9 3 7 , , 3 0 5 6 8 1 2 7 , , 9 2 7 8 9 9 9 , , 4 8 1 7 8 7 7 , , 5 2 3 0 8 9 6 , , 8 3 3 9 0 4 7 7 , , 2 1 6 2 1 8 6 , , 8 1 2 1 7 3 7 7 , , 0 6 9 9 7 7 7 , , 1 8 1 6 5 5 7 7 , , 9 2 7 1 9 9 7 , , 4 8 4 4 5 9 0 8 , , 9 9 8 1 3 6 9 , , 0 8 7 7 3 3 9 7 , , 0 0 3 6 3 1 8 , , 9 7 4 4 9 3 8 7 , , 4 2 7 2 4 8 8 , , 0 7 6 6 8 6 8 7 , , 1 5 2 7 4 2 8 , , 9 9 5 6 6 3 7 7 , , 3 2 2 8 8 4 8 , , 4 0 8 5 7 8 5 7 , , 2 9 5 0 1 9 8 , , 7 1 2 7 6 6 9 7 , , 7 1 9 8 5 7 0 1 , 8 0 1 2 6 2 , 6 9 5 1 6 2 , 1 6 0 1 6 2 , 3 1 1 5 8 2 , 1 1 6 9 6 2 , 2 9 2 2 5 2 , 6 9 1 2 5 2 , 8 2 6 1 5 2 , 4 4 3 1 5 2 , 4 5 1 1 5 2 , 9 1 2 1 5 2 , 5 0 8 5 1 3 , 2 6 1 1 1 3 , 3 4 4 1 1 3 , 7 1 9 1 1 3 , 1 1 8 6 1 3 , 7 5 1 8 2 3 , 3 7 4 1 1 3 , 6 6 6 4 0 3 , 7 6 4 5 9 1 , 2 1 6 6 9 1 , 3 2 6 7 9 1 , 4 8 0 8 9 1 , 1 2 7 8 8 1 , , 6 4 2 4 7 6 2 , , 1 4 3 4 7 6 2 , , 1 4 3 4 7 6 2 , , 1 4 3 4 7 6 2 , , 8 9 3 4 7 6 2 , , 8 9 3 4 7 6 2 , , 9 4 6 7 5 6 2 ,
 , 8 9 2 8 7 6 2 , , 8 9 2 8 7 6 2 , , 6 4 6 5 7 6 2 , , 5 3 7 5 7 6 2 , , 5 3 7 5 7 6 2 , , 5 3 7 5 7 6 2 , , 9 8 0 4 1 7 2 , , 9 8 0 4 1 7 2 , , 9 8 0 4 1 7 2 , , 0 3 2 4 1 7 2 , , 0 3 2 4 1 7 2 , , 2 3 8 9 4 7 2 , , 7 1 0 0 5 7 2 , , 7 1 0 0 5 7 2 , , 7 1 0 0 5 7 2 , , 2 1 8 6 5 6 2 , , 2 1 8 6 5 6 2 , 1 7 7 8 5 1 , 5 3 8 7 5 1 , 2 5 6 7 5 1 , 0 2 4 9 5 1 , 2 4 3 0 6 1 , 4 8 0 1 6 1 , 0 9 9 8 5 1 , 8 3 2 9 5 1 , 9 4 7 8 5 1 , 3 3 5 1 6 1 , 5 7 4 0 6 1 , 1 3 3 1 6 1 , 9 4 7 2 6 1 , 5 5 1 3 6 1 , 5 5 6 4 6
 1 , 3 6 7 1 6 1 , 5 5 9 1 6 1 , 5 7 9 2 6 1 , 8 6 3 2 6 1 , 6 8 2 3 6 1 , 4 6 9 5 6 1 , 6 3 8 5 6 1 , 1 3 1 8 6 1 , 5 3 8 6 6 1 , , 9 2 6 5 5 2 3 , , 9 2 6 5 5 2 3 , , 9 2 6 5 5 2 3 , , 9 2 6 5 5 2 3 , , 9 2 6 5 5 2 3 , , 9 2 6 5 5 2 3 , , 0 6 2 5 3 2 3 , , 8 7 2 0 6 2 3 , , 8 7 2 0 6 2 3 , , 1 5 0 7 5 2 3 , , 1 5 0 7 5 2 3 , , 1 5 0 7 5 2 3 , , 1 5 0 7 5 2 3 , , 5 0 6 3 0 3 3 , , 5 0 6 3 0 3 3 , , 5 0 6 3 0 3 3 , , 5 0 6 3 0 3 3 , , 5 0 6 3 0 3 3 , , 3 6 9 6 4 3 3 , , 3 6 9 6 4 3 3 , , 3 6 9 6 4 3 3 , , 3 6 9 6 4 3 3 , , 9 5 3 3 3 2 3 , , 9 5 3 3 3 2 3 , , 8 7 2 3 8 5 7 2 , , 9 6 2 2 3 1 1 3 , , 4 7 5 7 1 9 1 7 , , 5 5 9 2 0 5 1 , , 7 0 4 3 9 5 5 3 , , 5 0 3 5 1 1 3 , , 5 3 9 8 2 5 4 , , 2 7 7 3 6 6 7 2 , , 6 9 7 5 0 2 2 3 , , 4 4 6 9 3 4 9 2 , , 8 5 3 1 2 3 3 7 , , 5 5 9 2 0 5 1 , , 9 1 2 8 7 2 6 7 , , 2 7 5 6 4 5 1 , , 3 6 1 9 0 1 8 3 , , 1 2 2 4 0 5 7 3 , , 9 7 1 2 8 3 9 2 , , 2 6 8 7 9 0 9 2 , , 1 3 1 4 7 2 9 2 , , 5 9 5 3 2 6 7 2 , , 5 6 7 0 1 2 0 3 , , 5 8 9 6 7 6 1 7 , , 5 5 9 2 0 5 1 , , 3 2 3 2 2 6 6 3 , , 5 0 3 5 1 1 3 , , 6 5 1 6 0 4 7 2 , , 4 3 1 2 8 5 0 3 , , 4 0 4 5 8 5 1 7 , , 5 5 9 2 0 5 1 , , 2 7 2 0 2 8 5 3 , , 5 0 3 5 1 1 3 , , 3 1 6 7 3 7 7 2 , , 6 6 9 7 3 8 9 2 , , 7 2 8 0 4 8 1 7 , , 5 5 9 2 0 5 1 , , 5 4 4 8 7 2 6 3 , , 5 0 3 5 1 1 3 , , 0 9 7 3 1 9 7 2 , , 1 8 5 5 4 4 9 2 , , 4 5 0 9 2 5 1 7 , , 5 5 9 2 0 5 1 , , 5 0 1 7 8 0 6 3 , , 5 0 3 5 1 1 3 , , 7 9 1 7 7 9 7 2 , , 7 3 0 3 5 7 0 3 , , 9 6 8 3 2 6 3 7 , , 5 5 9 2 0 5 1 , , 5 9 8 1 5
 4 7 3 , , 5 0 3 5 1 1 3 , , 8 5 6 2 6 5 8 2 , , 1 5 1 4 1 4 0 3 , , 7 2 3 6 7 1 3 7 , , 5 5 9 2 0 5 1 , , 0 0 1 2 4 4 6 3 , , 4 1 8 5 9 0 3 , , 0 8 0 5 3 0 4 3 , , 4 0 9 1 7 2 0 3 , , 1 0 9 5 7 1 8 7 , , 5 5 9 2 0 5 1 , , 4 9 8 0 0 2 2 4 , , 3 5 7 9 1 1 3 , , 4 4 6 6 2 4 1 3 , , 7 9 4 8 4 2 9 7 , , 5 5 9 2 0 5 1 , , 4 6 9 2 9 5 2 4 , , 3 5 7 9 1 1 3 , , 4 5 7 6 1 9 9 2 , , 0 2 2 8 4 2 3 7 , , 5 5 9 2 0 5 1 , , 4 9 5 5 1 2 7 3 , , 5 6 6 6 1 1 3 , , 2 9 8 6 1 4 2 , , 0 9 8 7 2 0 2 , , 9 0 5 8 3 3 1 , 0 4 2 9
 4 6 , 3 6 7 1 7 5 , , 5 8 7 4 2 2 1 , 1 6 2 2 3 2 , ) 4 8 3 5 4 ( , ) 5 2 0 3 8 ( , , 5 6 6 6 1 1 3 , , ) 2 0 6 6 2 9 1 ( , , 5 6 6 6 1 1 3 , 3 0 6 9 2 1 , , 5 6 6 6 1 1 3 , , ) 8 5 9 6 5 6 2 ( , , 4 6 2 9 7 9 6 2 , , 5 1 9 7 8 7 2 3 , , 0 6 0 1 6 9 3 7 , , 2 7 5 6 4 5 1 , , 0 7 7 1 4 2 8 3 , , 0 3 2 4 0 3 7 2 , , 6 5 6 9 0 4 1 3 , , 3 0 5 6 8 1 2 7 , , 2 7 5 6 4 5 1 , , 4 3 6 3 3 8 6 3 , , 3 1 2 1 6 1 3 , , ) 6 6 0 5 7 0 3 ( , , 6 3 0 8 7 3 8 2 , , 4 2 4 4 2 7 5 3 , , 8 3 3 9 0 4 7 7 , , 2 7 5 6 4 5 1 , , 6 4 6 2 1 6 7 3 , , 0 2 8 7 9 2 8 2 , , 0 7 1 7 9 7 4 3 , , 8 1 2 1 7 3 7 7 , , 2 7 5 6 4 5 1 , , 3 5 6 9 5 7 7 3 , , 5 7 3 3 5 6 8 2 , , 0 3 1 3 0 4 4 3 , , 1 8 1 6 5 5 7 7 , , 2 7 5 6 4 5 1 , , 0 4 6 1 8 2 8 3 , , 3 1 2 1 6 1 3 , , 3 1 2 1 6 1 3 , , 3 1 2 1 6 1 3 , , 1 9 2 0 7 0 8 2 , , 1 1 0 0 6 7 6 3 , , 4 8 4 4 5 9 0 8 , , 2 7 5 6 4 5 1 , , 0 5 3 5 8 5 0 4 , , 3 1 2 1 6 1 3 , , 7 4 4 6 1 0 8 2 , , 4 0 2 1 2 6 6 3 , , 0 8 7 7 3 3 9 7 , , 2 7 5 6 4 5 1 , , 8 8 7 9 5 7 9 3 , , 2 0 7 2 0 2 3 , , 1 4 7 6 3 2 7 2 , , 1 8 2 9 5 8 5 3 , , 9 7 4 4 9 3 8 7 , , 2 7 5 6 4 5 1 , , 2 7 0 6 9 6 9 3 , , 2 0 7 2 0 2 3 , , 6 3 2 1 2 2 1 , , 1 7 8 4 0 8 1 , 1 4 2 7 3 8 , 9 4 3 3 2 9 , ) 7 6 8 0 4 4 ( , , ) 2 8 7 0 2 6 1 ( , , 2 0 0 3 3 1 7 2 , , 1 6 8 6 4 8 6 3 , , 0 7 6 6 8 6 8 7 , , 2 7 5 6 4 5 1 , , 4 2 3 3 7 7 9 3 , , 2 0 7 2 0 2 3 , , 0 9 7 3 3 4 6 2 , , 7 4 1 4 8 9 5 3 , , 9 9 5 6 6 3 7 7 , , 2 7 5 6 4 5 1 , , 7 6 2 9 6 9 8 3 , , 2 0 7 2 0 2 3 , 1 0 7 5 8 , 3 4 2 4 4
 9 , , 0 5 1 6 4 7 8 2 , , 3 2 4 6 1 9 3 3 , , 7 1 2 7 6 6 9 7 , , 9 7 2 6 6 5 1 , , 0 3 2 5 9 1 0 4 , , 4 9 9 3 9 0 3 , 3 3 9 9 3 8 , , 0 5 6 2 4 1 6 2 , , 6 7 1 6 6 5 4 3 , , 4 0 8 5 7 8 5 7 , , 2 7 5 6 4 5 1 , , 3 2 3 4 6 6 8 3 , , 4 9 9 3 9 0 3 , , ) 2 0 3 5 0 2 1 ( , 2 3 9 3 1 3 , 7 5 7 2 1 3 , 5 1 0 7 1 3 , 2 6 1 2 2 3 , 7 1 8 4 2 3 , 6 5 1 3 2 3 , 0 3 3 4 2 3 , 3 1 5 5 2 3 , 1 4 8 3 2 3 , 8 1 1 5 2 3 , 3 1 6 5 2 3 , 4 9 2 7 3 3 , 5 5 0 4 4 3 , 2 2 2 9 4 3 , 3 4 2 4 4 3 , 5 9 0 7 4 3 , 6 5 0 7 4 3 , 0
 0 2 3 4 3 , 7 3 8 6 4 3 , 2 5 2 4 5 3 , 1 5 0 2 6 3 , 9 3 8 9 7 3 , 3 4 4 3 9 3 , 2 7 3 3 9 3 , , 2 4 0 7 4 9 0 2 , , 8 9 9 5 1 9 5 , , 3 3 8 3 2 7 1 2 , , 0 2 9 2 8 9 5 , , 9 6 9 4 4 1 2 2 , , 8 9 9 6 5 6 6 , , 7 9 8 2 7 1 3 2 , , 4 5 5 0 1 1 6 , , 0 7 5 1 1 7 3 2 , , 2 6 0 8 3 1 6 , , 8 6 4 8 3 2 4 2 , , 7 2 3 0 2 4 6 , , 2 2 9 1 9 2 4 2 , , 1 2 4 4 9 2 6 , , 9 0 2 0 5 2 4 2 , , 6 1 3 4 4 5 6 , , 3 5 7 4 0 4 5 2 , , 5 1 6 9 4 3 6 , , 9 3 2 0 3 6 4 2 , , 4 7 6 0 4 5 6 , , 7 9 1 7 5 6 5 2 , , 7 6 3 6 3 5 6 , , 0 5 7 5 7 0 7 2 , , 4 1 1 8 6 5 6 , , 6 9 1 4 1 7 6 2 , , 0 6 7 4 5 6 6 , , 7 8 5 6 4 5 6 2 , , 1 4 3 4 2 8 6 , , 1 5 7 4 9 0 6 2 , , 7 7 6 8 2 4 7 , , 4 6 5 8 5 9 5 2 , , 0 5 2 3 9 7 6 , , 7 2 7 6 3 2 6 2 , , 2 3 7 5 4 1 7 , , 5 4 9 6 5 3 7 2 , , 5 5 8 7 3 0 7 , , 1 6 4 8 2 8 7 2 , , 7 8 2 4 9 0 7 , , 6 1 0 2 1 1 8 2 , , 7 4 6 3 0 1 7 , , 8 5 1 9 6 5 6 2 , , 2 6 1 7 4 1 7 , , 9 3 0 1 0 0 5 2 , , 7 3 9 2 2 3 7 , , 0 0 9 5 0 1 6 2 , , 4 7 8 6 7 2 7 , , 4 0 8 9 5 1 6 2 , , 5 0 6 8 1 4 7 , 3 1 / / , , r e u q
u P r e h t O d n a s d n u F t s u r T , : e c r u o S CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 TABLE A.3 COMMERCIAL BANKS: AVERAGE DEPOSIT LIABILITIES, REQUIRED CASH RESERVES AND ACTUAL CASH RESERVES for Period Ending September 2014 Reserve Period Ending 2-Oct-13 9-Oct-13 16-Oct-13 23-Oct-13 30-Oct-13 6-Nov-13 13-Nov-13 20-Nov-13 27-Nov-13 4-Dec-13 11-Dec-13 18-Dec-13 27-Dec-13
 2-Jan-14 8-Jan-14 15-Jan-14 22-Jan-14 29-Jan-14 5-Feb-14 12-Feb-14 19-Feb-14 26-Feb-14 5-Mar-14 12-Mar-14 19-Mar-14 26-Mar-14 2-Apr-14 9-Apr-14 16-Apr-14 23-Apr-14 30-Apr-14 7-May-14 14-May-14 21-May-14 28-May-14 4-Jun-14 11-Jun-14 18-Jun-14 25-Jun-14 2-Jul-14 9-Jul-14 16-Jul-14 23-Jul-14 30-Jul-14 6-Aug-14 13-Aug-14 20-Aug-14 27-Aug-14 3-Sep-14 10-Sep-14 17-Sep-14 24-Sep-14 Average Deposit Liabilities ($000) Required Cash Reserves ($000) 12,624,194
12,736,874 12,723,032 12,681,071 12,624,194 12,529,809 12,463,033 12,402,615 12,383,186 12,410,067 12,416,979 12,482,716 12,540,388 12,616,177 Average Cash Reserves ($000) 21,341,575
20,346,426 20,725,474 20,709,489 21,341,575 20,211,254 20,569,254 20,812,435 20,653,617 19,549,554 18,950,767 17,583,832 16,845,229 17,004,843 17,095,913 18,153,336 17,897,204 17,989,197 18,278,366 18,481,128 19,508,258 20,062,589 19,106,321 Source: Central Bank of Trinidad and Tobago 73 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 TABLE A.4 NON-BANK FINANCIAL INSTITUTIONS: AVERAGE DEPOSIT LIABILITIES, REQUIRED CASH RESERVES AND ACTUAL CASH RESERVES for Period Ending September 2014 Reserve Period Ending Average Deposit Liabilities ($000) Required Cash Reserves ($000) Average Cash Reserves ($000) 2-Oct-13 9-Oct-13 16-Oct-13 23-Oct-13 30-Oct-13 6-Nov-13 13-Nov-13 20-Nov-13 27-Nov-13 4-Dec-13 11-Dec-13 18-Dec-13 27-Dec-13 2-Jan-14 8-Jan-14 15-Jan-14 22-Jan-14 29-Jan-14 5-Feb-14 12-Feb-14 19-Feb-14 26-Feb-14 5-Mar-14 12-Mar-14 19-Mar-14 26-Mar-14 2-Apr-14 9-Apr-14 16-Apr-14 23-Apr-14 30-Apr-14 7-May-14 14-May-14 21-May-14 28-May-14 4-Jun-14 11-Jun-14 18-Jun-14 25-Jun-14 2-Jul-14 9-Jul-14 16-Jul-14 23-Jul-14 30-Jul-14 6-Aug-14 13-Aug-14 20-Aug-14 27-Aug-14 3-Sep-14 10-Sep-14 17-Sep-14 24-Sep- 2,020,456
178,415
Source: Central Bank of Trinidad and Tobago CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 75 CENTRAL BANK OF TRINIDAD AND TOBAGO ANNUAL REPORT 2014 LOOKING AHEAD www.central-bank.org.tt ww w.cen ww ntr w