Bahamas - FirstCaribbean International Bank

Notes to the Consolidated Financial Statements
October 31, 2007
(expressed in thousands of Bahamian dollars)
18. Share capital and reserves
2007 2006
$ $
(Restated)
Share capital (Note 17) 477,230 477,230
18. Share capital and reserves (continued)
Revaluation reserve — available-for-sale
investment securities
2007 2006
$ $
(Restated)
Reserves
Statutory reserve fund – Turks and Caicos Islands 12,000 6,800
Statutory loan loss reserve – Bahamas 16,495 14,661
Revaluation reserve – available for sale securities (5,862) 905
Reverse acquisition reserve (63,566) (63,566)
Total reserves (40,933) (41,200)
Total share capital and reserves 436,297 436,030
Under the Banking (Amendment) Ordinance 2002 of the Turks and Caicos Islands
(TCI), the Bank was required in 2004 to assign capital to the TCI operations in the
amount of $24 million.
The movements in reserves were as follows:
Statutory reserve fund — Turks and Caicos Islands
2007 2006
$ $
Balance, beginning of year 905 —
Net gain (loss) from changes in fair value of
available-for-sale investment securities (Note 8) (6,767) 905
Balance, end of year (5,862) 905
Revaluation reserve — cash flow hedges
2007 2006
$ $
Balance, beginning of year — 817
Net loss from changes in fair value — (817)
Balance, end of year — —
Balance, beginning of year 6,800 2,800
Transfers from retained earnings 5,200 4,000
Balance, end of year 12,000 6,800
In accordance with the Banking (Amendment) Ordinance 2002 of the TCI, the Bank
is required to maintain a statutory reserve fund of not less than the amount of its
assigned capital. Where it is less than the assigned capital, the Bank is required to
annually transfer 25% of its net profit earned from its TCI operations to this fund.
The Bank’s practice is to make this transfer based on net profits of the preceding
fiscal year. During the year the Bank transferred $5,200 (2006: $4,000) from retained
earnings to the statutory reserve fund.
See Auditors’ Report Page 56.
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