Credit Union Annual Report 2021 V2 - Flipbook - Page 70
THE CAYMAN ISLANDS CIVIL SERVICE ASSOCIATION (CICSA)
CO-OPERATIVE CREDIT UNION LIMITED
NOTES TO FINANCIAL STATEMENTS (continued)
July 31, 2021
10. Statutory reserve
The Act and Article XIV, Rule 68 require that 20% of the net surplus (before dividends on member shares) (Note 20)
of each financial year be set aside to the Statutory Reserve. During the year ended July 31, 2021, Credit Union
transferred 20% (2020: 20%) or $2,125,177 (2020: $2,112,572) of the Statutory Reserve from the Undistributed
Surplus.
Article XIII of the Rules also requires that all entrance fees ($10 per member) and transfer fees be credited to this
reserve. During the year ended July 31, 2021, the total entrance fees credited to this reserve was $16,060 (2020:
$15,510).
The Statutory Reserve is the property of the Credit Union and may not be distributed, except on liquidation or in
accordance with the Act and Rules. It may be applied, with the sanction of the Registrar of Cooperative Societies, to
meet losses on loans to members and such other losses as authorised in accordance with the Act and Rules.
Permanent Shares
At the AGM held November 2019, it was approved to pay a permanent share dividend to 13,354 active members at
July 31, 2019, in the amount of $333,850. This was classified as part of the reserves. New members joining after August 1,
2019 will be required to pay $25 as a permanent share that will be held until their account is closed. During the year ended
July 31, 2021, the total permanent shares credited to this reserve was $42,900.
11. Information technology fund
The Credit Union established this fund in 1993 by appropriation from the Undistributed Surplus to enable the Credit
Union to set aside funds to provide longer-term mortgage loans to members. At the AGM on November 28, 2018, the
members agreed to transfer $693,400 from the Mortgage Fund to supplement the dividend. Members resolved that the
remaining balance of $904,974 is now designated for Information Technology (“IT Fund”) purposes. During the current
financial year there were no changes made to the IT Fund.
12. Development fund
The Credit Union established this fund in 1992 by appropriation from Undistributed Surplus for future development of
the Credit Union.
13. Scholarship/training fund
On November 25, 2020 at the AGM in respect of the year ended July 31, 2020, the members resolved to transfer an
amount of $200,000 (2020: $300,000) to the Scholarship fund and $102,803 (2020: $311,948) to training of the
volunteers and staff. This was satisfied by way of appropriation of funds from the Undistributed Surplus in
accordance with Article XIV of the Rules (Note 21).
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