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Contents
1
Notice of Special General Meeting .......................................... 2
Agenda ................................................................................... 3
Jamaica Co-operative Credit Union League's Report .............. 4 - 5
Highlights from the Financial Statements ................................ 6
Summary of Balance Sheet ..................................................... 7
Summary of Income and Expenditure ............................................. 8
Graphs ...................................................................................... 9 - 13
Auditor’s Report ...................................................................... 14 - 59
Notice is hereby given that a Special General Meeting of the Westmoreland Co-operative Credit Union Limited will be held on Thursday, November 3, 2011at the Sean Lavery Faith Hall, Savanna-La-Mar, commercing at 2:30p.m.
The purpose of this meeting is to discuss the following
1. The action taken by the Department of Co-operatives & Friendly Societies and the Jamaica Co-operative Credit Union League in respect of the Credit Union.
2. The 2010 audited financial statements
3. The way forward for the Credit Union
Regristration begins at 12:30p.m.
Dated this 14th day of October 2011
.....................................................................................................Dr. Dorothy RaymondAssistant Secretary - Jamaica Co-operative Credit Union League Limited
Notice of Special General Meeting
2010 SPECIAL GENERAL MEETING
2
1. Call to order and Ascertainment of a quorum
2. Prayer and Welcome
3. Chairman's opening remarks
4. Address by the Registrar of Co-operatives & Friendly Societies
5. Jamaica Co-operative Credit Union League's report to the Special General
Meeting of the Westmoreland Co-operative Credit Union for the period May
20, 2011 – September 30, 2011
6. 2010 Audited Financial Statements and Report
7. The way forward
8. Termination
A G E N D A
Special General MeetingNovember 3, 2011
3
Background
Factors Contributing to the State of Affairs at the Credit Union:
Liquidity/cash flow 8.24%, compared with the industry standard of challenges being ex-thOn the 20 of May 2011 the <=5%perienced by the Credit
Jamaica Co-operative Credit Union. The Solvency ratio was Union League Limited (League) 106.49%, compared
applied to and received approval Supervision means that the w i t h t h e i n d u s t r y
from the Registrar of Co- Credit Union is now under the standard of =>111%operative and Friendly Societies direction and control of the
The (Liquid Assets less to place the Westmoreland Co- League.Short Term Payables) operative Credit Union Limited to Total Deposits ratio under supervision. The Board of was 10.43%, compared
Directors of the Credit Union w i t h t h e i n d u s t r y
was also set aside at that date.standard of 20-30%.
This was necessary as the League had concerns about the Governance and Operations of An onsite assessment of the
the Credit Union and the Micro operations of the Credit Union Finance Company owned by the has since been undertaken by 1. Expansion of fixed Credit Union. This discomfort the League. The findings assets, which grew was caused by: indicated that there were by J$130M in fifteen
(15) months, January weaknesses in the financial 2010 to April 30, 2011 A breakdown of re- structure and internal controls of ( u n a u d i t e d ) . T h e lationships among the the Credit Union's operations. acquisition and expan-Credit Union's Board
The unaudited financials as at sion/renovation of real members, resulting in estate was the main August 31, 2011 show the the Board not meeting contributor. following:to deal with the affairs
of your Credit Union. 2. The rapid growth in the The Institutional Capital loan portfolio, with a to Total Assets ratio of A delay in the start of commensurate increase the Credit Union was the audit for the 2010 in provisions for loan 1.85%, compared with financials. losses. the industry standard of
3. Paying above market There was an absence of =>8%. rates on deposits. For any financial reports for example, 15% was The Delinquency to the Micro Finance being paid while the Total Loan ratio was Company.
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The Supervisory committee was asked in August 2011 to refrain from exercising its functions as it was felt that the committee was not acting in the best interest of the members.
Jamaica Co-operative Credit Union League's Report To The Special General Meeting November 3, 2011
On Its Supervision Of The Westmoreland Co-operative Credit Union Limited For The Period May 20, 2011-September 30, 2011
WESTMORELAND 2010 SPECIAL GENERAL MEETINGCO-OPERATIVE CREDIT UNION LIMITED
4
market was offering single digit rates.
4. Poor monitoring of the
Investment in the Micro F inance Company, which has resulted in the need for a loss provision of $87M.
mentation of new loan encouraged to continue to and deposit rates. save with your Credit
Union, to borrow and to 5. The completion of the repay your loans on time.extension to the main
office at 77-79 Great Your League is committed George Street. to working with the
6. The preparation of a five We s t m o r e l a n d C o -(5) year development operative Credit Union and plan for the Credit The rapid growth in the loan i t s s t a k e h o l d e r s b y Union. portfolio without an equal providing the technical
increase in the savings base support necessary to resulted in a liquidity challenge strengthen the operations. for the Credit Union. This was further compounded by the Your League wishes to programme of capital ex-
penditures and the pulling of place on record its sincere The supervision of the $87M from the Credit Union to thanks and appreciation to Credit union is being borne invest in the Micro Finance the Registrar of Co-by the League through the Company. Items 2 - 4 above had operatives and Friendly Stabilization Fund. The negative impacts on profits
Societ ies, the Credit Stabilization Fund is a resulting in the Credit Union Committee, management showing losses of $171.6M as at Fund contributed to by all and the staff of the December 31, 2010. Credit Unions that are We s t m o r e l a n d C o -members of the League. operative Credit Union The purpose of the Fund is Limited for the support it to stabilize Credit Unions has received so far. that are experiencing
problems. To September 1. The appointment of an With your continued 30, 2011 your League has administrator to oversee support and co-operation, spent $16.6M on this effort.the daily operations of together we can improve
the Credit Union. There the performance of your
has been no interruption Credit Union.of service to you the
members.
The objective is to return 2 The provision of a the Credi t Union to C r e d i t f a c i l i t y o f profitability within the J$121M to provide _____________________shortest possible time. liquidity support to the Glenworth Francis
Credit Union. General Manager-This can only be done with Jamaica Co-op. Credit 3. The completion of the the support of you the Union League Limited2010 annual audit.m e m b e r s . Yo u a r e
4. Revision and imple-
Costs to Your League to Date:
Actions Taken to Date by Your League:
Conclusion:
WESTMORELANDCO-OPERATIVE CREDIT UNION LIMITED
2010 SPECIAL GENERAL MEETING
5
2010 was a challenging year for all players in 4. Provision for impairment of loans the financial sector and the Westmoreland and investment at $149.34M Co-operative Credit Union Limited had it’s represented an increase of $36.41M fair share of test. in loan provision over 2009.
The Audited Financial Statements for the year 2010 also include results of the performance The credit union moved from a of the group which is the Credit Union and it’s surplus of $30.85M at the end of wholly owned subsidiary the Western Micro 2009 to deficit of ($171.58M) at end Finance Company Limited. of 2010.
The major highlights of the financial performance for the 2010 are: 1. Total Assets at $1.83B reflected an
increase of $13.95M (0.77%) over 2009.
1. Total income was $288.137M which represented a decrease of $32.76M 2. Members' Voluntary shares at (-10.21%) over 2009 $710.68M reflected an increase of
$133.27M (23.08%) 2009.2. Interest on loans to members was
$188.3M, which represented an 3. Loans to our members at $1.4B increase of $20.89M (12.48%) over reflected an increase of $254.63M 2009 (28.69%) over 2009.
3. Interest on Investments at $66.13M 4. Short and medium term investments represented a decrease of $73.16M at $285.62M represented a decrease (52.52%) when compared with of $285.85 (50.02%) over 20092009.
5. Land and office building at $141.36M reflected an increase of
1. Total expenses were $459.71M, $69.51M (96.74%) over 2009.which represented an increase of $169.66M (58.49%) over 2009 Attached is a Summary of the Balance Sheet
for the year ended December 31, 2010. Also 2. Salaries, benefits and other wage attached are graphs showing the Credit
related expenses were $97.62M, Union’s performance for the period 2008 - which reflected an Increase of 2010.$17.67M (22.11%) over 2009.
3. Interest on Members’ deposits and Bank charges at $77.50M represented a decrease of $26.67M (25.60%) over 2009.
year
Glenworth Francis General Manager-Jamaica Co-op. Credit Union League Limited
Surplus/(deficit)
Balance Sheet
Income
Expenses
Highlights from the financial statements for the year ended 2010 December 31
2010 SPECIAL GENERAL MEETING
6
SUMMARY OF BALANCE SHEET
2010 2009 % change
Total funds at the disposal of the Credit
Union as at Dec 31,2010 was from:
Members Voluntary Shares 710,680,066 577,408,353 23.08
Members Permanent Shares 49,910,754
42,066,449
18.65
Members Saving Deposits 970,964,340 948,514,733 2.37
Short-term payables due to other organ. 75,035,459
68,417,797
9.67
We also obtained loans from other
organisations 5,618,282
9,117,903
(38.38)
Funds or Institutional Capital, placed for
strengthening of the Capital base: 137,353,612 128,370,429 7.00
Placement into Reserve Fund 36,773,377 22,290,377 64.97
Accumulated surplus/(loss) to date (150,158,741) 26,032,390 (676.82)
Grand Total 1,836,177,149 1,822,218,431 0.77
These funds were used to invest in the
following:
Loans to our Members 1,142,042,808 887,406,431 28.69
Long Term Investments 99,919,310 97,286,787 2.71
Short & Medium Term Investments 285,629,165 571,482,483 (50.02)
Pension Assets 35,000,000 20,517,000 70.59
Acquisition of Fixed Assets:
Land 32,516,531 12,116,531 168.37
Office Buildings 108,839,601 59,731,012 82.22
Computer Equipment 6,611,985 7,617,658 (13.20)
ATM Equipment 472,153 611,767 (22.82)
Office Machinery & Equipment 18,253,121 9,537,407 91.38
Furniture & Fixtures 3,316,810
3,336,668
(0.60)
Funds due from Miscellaneous
Orgaisations and Members 79,854,645
106,228,245
(24.83)
We now have at December 31,2010
Cash and Bank Balances Totalling 23,721,020
46,346,442
(48.82)
1,836,177,149 1,822,218,431 0.77
WESTMORELANDCO-OPERATIVE CREDIT UNION LIMITED
2010 SPECIAL GENERAL MEETING
7
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41
2010 SPECIAL GENERAL MEETING
8
12
$1,616,382,785
$1,822,218,431 $1,836,177,149
$1,500,000,000
$1,550,000,000
$1,600,000,000
$1,650,000,000
$1,700,000,000
$1,750,000,000
$1,800,000,000
$1,850,000,000
$1,900,000,000
2008 2009 2010
DO
LLA
R V
ALU
E
YEARS
GROWTH IN TOTAL ASSETS FOR THE PERIOD 2008 TO 2010
$0.00
$200,000,000.00
$400,000,000.00
$600,000,000.00
$800,000,000.00
$1,000,000,000.00
$1,200,000,000.00
2008 2009 2010
$819,182,099.00 $887,406,431.00
$1,142,042,808.00
DOLLAR
VALUE
YEARS
GROWTH IN NET LOANS FOR THE PERIOD 2008 TO 2010
WESTMORELANDCO-OPERATIVE CREDIT UNION LIMITED
2010 SPECIAL GENERAL MEETING
9
$0
$100,000,000
$200,000,000
$300,000,000
$400,000,000
$500,000,000
$600,000,000
$700,000,000
$800,000,000
2008 2009 2010
$510,831,605
$577,408,353
$710,680,066
DO
LLA
R V
ALU
E
YEARS
GROWTH IN VOLUNTARY SHARES FOR THE PERIOD 2008 TO 2010
$800,000,000
$820,000,000
$840,000,000
$860,000,000
$880,000,000
$900,000,000
$920,000,000
$940,000,000
$960,000,000
$980,000,000
2008 2009 2010
$867,771,988
$948,514,733
$970,964,340
DO
LLA
R V
ALU
E
YEARS
GROWTH IN SAVINGS DEPOSITS FOR THE PERIOD 2008 TO 2010
WESTMORELANDCO-OPERATIVE CREDIT UNION LIMITED
2010 SPECIAL GENERAL MEETING
10
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
$350,000,000
$400,000,000
2008 2009 2010
$221,905,577
$289,050,804
$370,510,041
DO
LLA
R V
ALU
E
YEARS
CHANGES IN TOTAL EXPENSE FOR THE PERIOD 2008 TO 2010
$249,469,029
$320,902,057
$288,137,234
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
$350,000,000
2008 2009 2010
DO
LLA
R V
ALU
E
YEARS
CHANGES IN TOTAL INCOME FOR THE PERIOD 2008 TO 2010
WESTMORELANDCO-OPERATIVE CREDIT UNION LIMITED
2010 SPECIAL GENERAL MEETING
11
($200,000,000)
($150,000,000)
($100,000,000)
($50,000,000)
$0
$50,000,000
2008 2009 2010
$27,563,452 $31,851,253
($169,581,316)
DO
LLA
R V
ALU
E
YEARS
CHANGES IN NET SURPLUS FOR THE PERIOD 2008 TO 2010
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
2008
2009
2010
$167,069,685
$218,759,645
$73,879,002
DO
LLA
R V
ALU
E
YEARS
CHANGES IN EQUITY FOR THE PERIOD 2008 TO 2010
WESTMORELANDCO-OPERATIVE CREDIT UNION LIMITED
2010 SPECIAL GENERAL MEETING
12
$0
$100,000,000
$200,000,000
$300,000,000
$400,000,000
$500,000,000
$600,000,000
$700,000,000
2008 2009 2010
$646,565,160 $668,769,270
$383,330,714
DO
LLA
R V
ALU
E
YEARS
GROWTH IN INVESTMENT FOR THE PERIOD 2008 TO 2010
WESTMORELANDCO-OPERATIVE CREDIT UNION LIMITED
2010 SPECIAL GENERAL MEETING
13
14
Page 1
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(A Society Registered Under the Co-operative Society Acts)
Statement of Financial Position December 31, 2010
Page 4
The accompanying notes form an integral part of the financial statements.
18
(A Society Registered Under the Co-operative Society Acts)
Statement of Comprehensive IncomeYear ended December 31, 2010
Page 5
The accompanying notes form an integral part of the financial statements.
19
(A Society Registered Under the Co-operative Society Acts)S
tate
men
t of
Cha
nges
in E
quit
yY
ear
ende
d D
ecem
ber
31, 2
010
Pag
e 6
The
acc
ompa
nyin
g no
tes
form
an
inte
gral
par
t of
the
fin
anci
al s
tate
men
ts.
20
Sta
tem
ent
of C
hang
es in
Equ
ity
(con
tinu
ed)
Yea
r en
ded
Dec
embe
r 31
, 201
0P
age
7(A Society Registered Under the Co-operative Society Acts)
The
acc
ompa
nyin
g no
tes
form
an
inte
gral
par
t of
the
fin
anci
al s
tate
men
ts.
21
(A Society Registered Under the Co-operative Society Acts)S
tate
men
t of
Cha
nges
in E
quit
y (c
onti
nued
)Y
ear
ende
d D
ecem
ber
31, 2
010
Pag
e 8
The
acc
ompa
nyin
g no
tes
form
an
inte
gral
par
t of
the
fin
anci
al s
tate
men
ts.
22
(A Society Registered Under the Co-operative Society Acts)
Statement of Changes in Equity (continued)Year ended December 31, 2010
Page 9
The accompanying notes form an integral part of the financial statements.
23
(A Society Registered Under the Co-operative Society Acts)
Statement of Changes in Equity (continued)Year ended December 31, 2010
Page 10
The accompanying notes form an integral part of the financial statements.
24
The accompanying notes form an integral part of the financial statements.
(A Society Registered Under the Co-operative Society Acts)
Statement of Cash FlowsYear ended December 31, 2010
Page 11
25
(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial StatementsDecember 31, 2010
Page 12
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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Notes to the Financial Statements (continued)December 31, 2010
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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Notes to the Financial Statements (continued)December 31, 2010
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Notes to the Financial Statements (continued)December 31, 2010
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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Notes to the Financial Statements (continued)December 31, 2010
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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Notes to the Financial Statements (continued)December 31, 2010
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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Notes to the Financial Statements (continued)December 31, 2010
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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(A Society Registered Under the Co-operative Society Acts)
Notes to the Financial Statements (continued)December 31, 2010
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Notes
60