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CARIBBEAN DEVELOPMENT BANK ANNUAL REPORT 2017
CARIBBEAN DEVELOPMENT BANK
ORDINARY CAPITAL RESOURCES NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2017 (EXPRESSED IN THOUSANDS OF UNITED STATES DOLLARS, UNLESS OTHERWISE STATED)
NOTE 22 – EQUITY…continued (d) Prepayment discounts
The Board of Governors of the Bank approved a “Variation of conditions of subscription of shares to permit a discount for prepayment” policy. The provision of this policy is that members are entitled to a discount from the Bank for prepayment of an instalment or part thereof (including those members which have already made prepayments) only if the prepayment is received more than three months prior to the date of the scheduled General Capital Increase (GCI) payments. The discount is computed based on a present value methodology and is disclosed as a charge against equity. During the year, no discounts were provided to members. The cumulative discount provided to date is $341 (2016: $341).
(e) Retained earnings and reserves
Retained earnings and reserves is comprised of:
Retained earnings Post-employment obligation reserve Other reserves
2017
2016
$514,641 (12,040) 13,260
$517,875 (16,213) 13,260
$515,861
$514,922
(f) Other reserves
Special reserve In accordance with Article 18 of the Charter, commissions and guarantee fees received on loans made out of OCR are required to be set aside in a Special Reserve which shall be kept for meeting liabilities of the Bank. The assets of the Special Reserve are to be held in such liquid form as the BOD may decide.
At the One Hundred and Nineteenth Meeting of the Board of Directors held on July 21, 1988, the Board decided that appropriations to the Special Reserve should be discontinued with effect from January 1, 1989. Pursuant thereto, no commission is charged on loans approved after January 1, 1989, and all amounts received after that date as commission on loans approved before that date are treated as interest and accounted for as such. During 1993, the Special Reserve was converted into United States dollars and is valued at $6,254 (2016: $6,254).
General banking reserve The General banking reserve has been deemed a reserve for asset impairments. During the year no reserves (2016: Nil) were transferred to retained earnings. As at December 31, 2017, the amount of the general banking reserve was $7,006 (2016: $7,006).