Credit Union Annual Report 2022 - Flipbook - Page 72
THE CAYMAN ISLANDS CIVIL SERVICE ASSOCIATION (CICSA)
CO-OPERATIVE CREDIT UNION LIMITED
NOTES TO FINANCIAL STATEMENTS (continued)
July 31, 2022
8. Members’ deposits (continued)
Interest of $54,125 (2021: $57,888) was paid to members holding term deposits during the financial year ended July 31,
2022.
9. Members’ shares
The members’ equity in the Credit Union is unlimited and is divided into shares of a par value of $2 each. The liability
of each member, in case of liquidation, is limited to the value of the shares held by the member at the par value. Per
Article III, Rule 17, the maximum amount of shares which may be held by any one member shall not exceed 3% of
total members’ shares. Unless provided as collateral for loans, money paid in on shares, or instalments of shares,
may be withdrawn in whole or in part on any day when the Credit Union is open for business. However, the Board of
Directors have the right to require a member to give up to six months’ notice of intention to withdraw.
Members’ shares are non-interest bearing but may attract a dividend. Article XIV of the Rules provides that a
dividend may be paid to members out of the net surplus of the Credit Union after the transfer to the Statutory Reserve
(Note 10). However, the Cooperative Societies Act prescribes that the dividend paid to each member may not exceed
six percent per annum on the lowest balance of fully paid shares outstanding during each month ( Note 14).
Included in members shares are shares of $7,359,414 (2021: $5,455,801) placed by directors, employees and
committee members of the Credit Union (Note 19).
10. Statutory reserve
The Act and Article XIV, Rule 68 require that 20% of the net surplus (before dividends on member shares) of each
financial year be set aside to the Statutory Reserve. During the year ended July 31, 2022, Credit Union transferred 20%
(2021: 20%) or $2,449,984 (2021: $2,125,177) 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, 2022, the total entrance fees credited to this reserve was $11,705 (2021:
$16,060).
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, 2022, the total permanent shares credited to this reserve was $32,555.
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