PART Iscu.sc/images/booklet-agm-august-2018.pdfRANJAN ORPHEE BANKING MANAGER Update on ATM Chairman advised that the ATM project will be implemented in phases in line with approval

TABLE OF CONTENTS

PART I

General Information Page 3

Notice of Annual General Meeting Page 4

Minutes of the 47th Annual General Meeting Page 5-12

Executive Summary Page 13-25

PART II

Directors’ Report and Audited Financial Page 27-49

Statements for the year ended 31.12.2017

Resolutions Page 50

PART I

GENERAL INFORMATION

Vision Statement: To strive to become a household name within our community.

Mission Statement: To provide members with high quality services that not only meet, butexceed members’ expectations.

Operational Ethics: Equality, Integrity and Honesty in all dealings.

Board of Directors: Mr. Selby Dora Chairman

Mr. Bernard Elizabeth Vice Chairman

Mr. Bryan Julie Director

Mr. Divino Sabino Director

Mr. Emile Esparon Director

Regulators: Central Bank of Seychelles

Bankers: Mauritius Commercial Bank (Seychelles) LtdCaravel HousePO Box 122Victoria

Barclays Bank (Seychelles) LtdIndependence HousePO Box 167Victoria

NouvobanqVictoria HousePO Box 241Victoria

Seychelles Savings BankKingsgate HousePO Box 531Victoria

Central Bank of SeychellesCentral Bank BuildingPO Box 701Victoria

Legal Advisor: Mr. Serge Rouillon, Suite No. 14, Kingsgate House, Victoria

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the 48th Annual General Meeting (AGM) of the Seychelles Credit Union will be held on Saturday 25th August 2018 at 2pm in the STC Conference Room, Latanier Road, New Port, Victoria.

Members will be required to produce identification to enter the conference venue. Members are asked to have their SCU membership card with them for this purpose, or if this not available, their National ID or passport.

Full particulars of any matters from members for consideration under item 10 (Any Other Business) must be submitted to the Chairperson of the Board of Directors at least five (5) working days before the date of the AGM.

The Agenda for the Annual General Meeting 2018 will be as follows:

1. Acceptance of Proxies (if any) 2. Ascertainment of Quorum 3. Reading, correction and approval of minutes of 2017 AGM 4. Matters arising from minutes of 2017 AGM 5. Report of Board of Directors 6. Presentation of accounts and Auditors Report for the year ending December 31st, 2017 7. Ratification and appointment of auditors and their remuneration 8. Approval of dividends for the year 2017 9. Report of the Supervisory Committee 10. Any other business

All members are urged to attend.

Refreshments and snacks will be served after the AGM.

Board Secretary

SEYCHELLES CREDIT UNION

47TH ANNUAL GENERAL MEETING

OFFICIAL MINUTES OF MEETING

02-AGM-2017

DATE: SATURDAY 19TH AUGUST 2017TIME: 2PMLOCATION: STC CONFERENCE HALLLATANIER ROADVICTORIAPRESENT: BOARD MEMBERSSELBY DORA CHAIRMANBERNARD ELIZABETH VICE CHAIRMANDIVINO SABINO BOARD MEMBERBRIAN JULIE BOARD MEMBEREMILE ESPARON BOARD MEMBER

SUPERVISORY COMMITTEE MEMBERSNICHOLAS WOODCOCK CHAIRMANCREDIT COMMITTEE MEMBERSBENJAMINE SOCRATE CHAIRPERSONDORA ERNESTA MEMBERFRANKLAND AGLAE MEMBERANN HUNT MEMBERFRANCOISE SHROFF MEMBEREXTERNAL AUDITORSBDO ASSOCIATESBAKER TILLYMEMBERS219 MEMBERS OF SEYCHELLES CREDIT UNION

I. Call to order at 2.30pm by Chairman Mr. Selby Dora

II. WELCOME The MC welcomed all members to the 47th AGM, and welcomed the Chairman of the Board ofDirectors, Mr. Selby Dora, to declare the meeting open and guide the audience through theproposed agenda.

III. OPENING OF MEETING Chairman welcomed the external auditors’ representatives, the CBS representatives, themedia, and all members present. A special welcome was extended to the Praslin and LaDigue members present. Chairman called on members to observe a moment of silence in recognition of the contribu-tions of members deceased over the past year. Chairman thereafter proceeded to declare the 47th AGM open.

IV. ASCERTAINMENT OF QUORUM & PROXIES

Chairman announced that as at 2.30pm the assembly count is over 125 members; wellabove the quorum of 100 members. There were no declarations of proxies.

V. APPROVAL OF AGENDA Agenda Items1. Acceptance of Proxies2. Ascertainment of Quorum3. Reading, correction, and approval of minutes of 2016 AGM4. Matter arising from minutes of 2016 AGM5. Report of the Board of Directors6. Presentation of accounts and Auditors Report for year ending December 31st20167. Ratification and appointment of auditors and their remuneration8. Approval of dividends for year 20169. Report of the Supervisory Committee10. Any Other Business

The Agenda was seconded and approved as presented.VI. REVIEW AND APPROVAL OF MINUTES OF THE 46TH ANNUAL GENERAL MEETING

Chairman presented the minutes of the 46th Annual General Meeting in Creole whilst themembers followed the original in the printed report which had been made available. The minutes were approved by the members.

VII. MATTERS ARISING

Chairman highlighted the main points raised by members in the last AGM as recorded in theminutes of meeting.Members Education & Social Committee

Chairman informed that SCU has put in place a Members Education & Social Committee(MEC) as per the request of the members in previous AGMs. The MEC has been operationalsince 2017. The MEC comprises of the following members:JULES HOAREAU CHAIRMANGERMAIN GILL SECRETARYINGRID SINON CHIEF EXECUTIVE OFFICERCHRISTIANNE MOISE LOANS MANAGERRANJAN ORPHEE BANKING MANAGER

Update on ATM

Chairman advised that the ATM project will be implemented in phases in line with approvalgiven by CBS. SCU is also taking all the technical steps required in order to realize this pro-ject. The speed of implementation will also depend on cost and benefit analysis as and when newinformation is provided or gathered.

Solar PV

Chairman informed that the Solar PV project has been put on hold according to its priority,and further added that SCU has to be cautious with investments that have large financialimplications.Staff Loan

Chairman updated that the staff loan policy has been approved by the Board of Directorsand has been in effect since September 1st 2016.VIII. REPORT OF THE BOARD OF DIRECTORS

Chairman presented the report of the Board of Directors, summarized below: Chairman stated that despite the macroeconomic movements, increased competition andSCU’s transition in line with the amended Credit Union Act, SCU has remained resilient. Chairman explained that the resilience of SCU is a result of the hard work of SCU staff, mem-bers’ being responsible towards their loan repayments and being loyal to SCU’s motto.Chairman continued to acknowledge the staff’s commendable efforts in debt recovery, thecontribution of Supervisory Committee and the Credit Committee, and the good oversightfrom CBS as the regulatory authority.Chairman expressed that the combined efforts of all the stakeholders contribute immenselytowards SCU’s progress. Chairman reported that the leadership, governance, and direction of the Board of Directorsremained the same since the last meeting.The Board of Directors meets at least once a month to ensure that there is appropriate lead-ership and management within the laws and By-Laws of SCU.

Chairman further added that during 2016 the Board of Directors created a good frameworkto work with the CEO who is responsible for operations. The Board of Directors met with the Supervisory Committee during 2016 to work togetherfor the betterment of SCU, and the Terms of Reference was made official in 2017 to guidethis working relation. Chairman informed that the Business plan 2016-2018 was the basis for targets that were setduring the year. The Board met with SCU staff during 2016, and issues related to operations are tactfullydealt with in the appropriate protocol. Affiliations were maintained both regionally and internationally namely with ACCOSCA andWOCCU. Chairman reported that there was a decrease in the number of complaints and appeals re-ported to the Board in 2016, compared to 2015. Chairman notified that since March 2016 SCU requested approval from CBS to operateATMs, and in April 2017 CBS sent their approval with conditions.The main conditions were that SCU needed to trade only with its members only, and that SCUmembers could use other Bank’s ATM, but this is not on a reciprocal basis. Chairman also informed that the Board of Directors took the decision to replace the existingcore banking system, Abacus, and invest in a new core banking system namely TEMENOST24 MCB. The new core banking system has been operational since February 2017. Chairman informed that the Board also received approval for their request to enter in an Af-finity Partnership with Falcon Insurance. Chairman also reported on some defiance during 2016 namely:- Adherence to Code of Practice- Liquidity Management- Delinquency- The need to diversify SCU’s source of income- Competition.Chairman added that even though SCU might not be able to offer all the services provid-ed by commercial banks, SCU must try to provide as many services feasible and continueto work on feasible expansion. Chairman concluded by thanking all members and partners for their support throughout2016. Members joined the Chairman in acclamation to give special thanks to BDO Associatesfor their 7 years of auditing services.Reactions and comments to Board of Directors’ Report

A member expressed concern over delinquencies, and inquired on the screening processesperformed by the credit committee, and the reason why assets are not seized as soon as themembers start defaulting.CFO and SRM went over the screening process and the recovery process. It was also explainedthat the legal proceedings usually takes a long time.

Board Member Mr. Esparon further added that operations does its best to take precautionarysteps during loan processing, and that the Credit Committee is mostly responsible for the ap-proval or rejection of the loan based on the details and analysis provided by operations.IX. PRESENTATION OF ACCOUNTS AND AUDITORS REPORT (FINANCIAL REPORT)

Chairman welcomed the CFO to present the financial reports on behalf of the CEO. CFO reported on the audited reports by going through the main highlights of SCU’s perfor-mance over 2016. The following points were highlighted: Total Number of members grew by 5.5% from 2015 to 2016, reaching a total of 14,889members by end of 2016. The growth comprised of 823 new members and 15 cessations.The number of members closing their accounts with SCU decreased by 35, which is very en-couraging. SCU saw a 24% increase in its Total Assets, which was largely contributed by the significantincrease in Net Portfolio, and more investments in Deposit auction arrangements and Heldto Maturity Financial Assets. SCU’s Net Surplus increased by 42.2% to reach SCR 4.6 Million in 2016, as SCU continues tomaintain costs relatively low, while maximizing returns on any investments. SCU’s performance has improved significantly when compared with recent years. Thegrowth in net surplus was -10%, -4%, +73%, and +42%, over the years 2013, 2014, 2015,and 2016 respectively. CFO also briefed the members on the Performance per branch, of which the highlight wasthe significant improvement in the performance of the Praslin Branch due to changes inmanagement and leadership. The number of delinquent accounts decreased by 15 by the end of 2016, while the capitaldue increased by 324, 000.CFO further explained that a delinquent loan, no matter how small the arrears, is reportedin terms of its outstanding balance.Reactions and comments to Financial Report

A member queried on the increased capital due compared to the decrease in the number ofaccounts.CFO explained that a delinquent loan is reported in terms of its outstanding balance no mat-ter how small the arrears. A member queried about the benefits that the affinity partnership with Falcon Insurancewill bring to SCU. In addition, a member expressed concern on the space constraint in theBanking Hall, where Falcon Insurance representatives are currently placed.CFO informed that the partnership allows members of SCU to benefit from a 10% discount oninsurance premiums, SCU receives rent income and marketing premium on policies issued*,and is a good way to attract more members to SCU.*Correction: In the initial stages of discussions between SCU and Falcon Insurance, consideration was given to the for-mer receiving commissions from the latter whenever an insurance policy is issued. However, the final decision whichwas approved by the Board of Directors do not include such commissions.

A member referred to the growth in members and suggested that SCU should find ways toattract more members to participate in the AGM process.Suggestion was noted by the Board. Another member requested for a detailed analysis on the expenses.

CFO went over the expenses and explained the various changes from 2015 to 2016. A member queried on how many staff have benefitted from the staff loan so far, and whetherthere were any difficulties.CFO and the Loans Manager briefed the members on the performance of the staff loan. Several members expressed their concern regarding the pace of the ATM implementation.Chairman recognized the ATM issues and emphasized on the Board’s responsibility to en-sure that any project is implemented in the right way. Board Member Mr. Esparon reiterated that the operation costs with any projects will havean effect on profitability as well and all this need to be carefully considered before imple-mentation. A member suggested that a booklet should be made available to members, which can clearlyguide the members throughout any loan process.Suggestion was noted by the Board for further action by SCU operations. A member suggested that a detail breakdown of loan per category is made available in theexecutive summary.Suggestion was noted and will be considered for the next AGM. Board Member Mr. Esparon suggest that a newsletter could be created so that members willbe more involved with the developments in SCU.Suggestion was noted by the Board and MEC was advised to consider the reactivation of theSCU newsletter. A member queried on whether borrowers can choose their own lawyers for the legal as-pects of loan processing.Board Member Mr. Julie clarified that the borrower is not forced to choose the lawyer thatSCU recommends.However, the lawyer that SCU recommends is well versed with SCU’s legal requirementshence will be a faster process. In response to several further queries regarding the ATM project status, Chairman explainedthat an exact date cannot be communicated with certainty. Chairman advised the membersto wait for notice from the Board of Directors in regards to ATM.

X. ADOPTION OF AUDITED ACCOUNTS The Audited accounts were adopted following its proposal and secondment.

XI. APPOINTMENT OF EXTERNAL AUDITORS (RESOLUTION No.2) Chairman reminded members of their request in last AGM to change external auditors every5 years. Chairman introduced representatives from Baker Tilly, the new external auditor being pro-posed for members’ approval. The appointment of Baker Tilly as the new external auditor was approved following its pro-posal and secondment.

XII. APPROVAL OF DIVIDENDS (RESOLUTION No.1) The Board of Directors recommended the appropriation of surplus as follows:SCR 1,378,950 to general reservesSCR 2,585,586 dividendSCR 631,965 undistributed surplus

A member suggested that the Board considers increasing the dividend payout rate above5%.Vice-Chairman explained the relationship between surplus and dividend payout, and that itis not advisable to increase the dividend payout rate given SCUs current plans and finan-cials. The Members approved the dividend proposed. Appropriation of surplus was consequently approved as per resolution No.1.

XIII. REPORT OF THE SUPERVISORY COMMITTEE Supervisory Committee Chairman, Mr. Nicholas Woodcock, presented the SupervisoryCommittee report for the year 2016, summarized below: During 2016 the Supervisory Committee comprised of the following members:NICHOLAS WOODCOCK CHAIRMANPATRICK BONNELAME SECRETARYPATRICK PIERRE MEMBER No gross mismanagement was identified. The Committee requests that the independence of the Supervisory Committee is preserved. Ongoing recruitment of a new Internal Audit Supervisor is expected to have a positive out-come. The speed at which the new core banking system TEMENOS T24 MCB was implemented iscommendable. The Supervisory Committee remains concerned that decisions of regulators may inhibitSCU’s development and sustainability. Long queues in the banking hall are an issue when it comes to good service delivery. TheSupervisory Committee recommends that operations find solutions to the long queues, suchas providing ATM services. The Supervisory Committee recommends that staffing on Praslin and La Digue is reassessed,and that at least 2 banking officers are available at all times. The Supervisory Committee recommends for new ways of communication to be established,and for operations to make use of other communication channels such as email and mediaadverts to communicate with members. Supervisory Committee is concerned that staff turnover is very high even though SCU has agood staff retention policy. The Supervisory Committee recommends for the Board to findways to keep staff turnover low. SCU should be more cost effective going forward. Mr. Woodcock also expressed that unfortunately he might not be able to continue his workson the Supervisory Committee for long due to ill health.Reactions and comments to Supervisory Committee Report

A member pointed out narrative mistake on Pg 14. Section 3.2 of the AGM booklet.Correction proposed and approved as follows:Mr. Nicholas Woodcock Secretary (appointed effective April 16, 2016)CorrectionMr. Patrick Bonnelame Secretary (appointed effective April 16, 2016) A member suggested for more cashiers to be made available during peak days and peakhours.

Suggestion was noted by the Board and operations was instructed to take action. Another member suggested that the Board could consider creating a scheme to reward orrecognize loyal members who practice the SCU motto commendably.Suggestion was noted by the Board for further consideration. A member added that customer service needs improvement, and members should receiveprompt replies for their queries.Concern was noted by the Board for SCU operations to take action. Several members expressed their disappointment with Supervisory Committee Member Mr.Pierre in the delivery of his duties as a Supervisory Committee member.The Board agreed to investigate further and if the information provided is correct, theBoard will forward their recommendation in the next AGM or an EGM.

XIV. AOB

A Member queried on the reason why the terminal benefits for staff of Ile Aux Cerf were tobe transferred to SCU. Member also informed that she requested an audience with the CEO,and is waiting for a reply.Board noted members query. Operations to provide feedback. A member proposed for SCU to remain open for longer during peak days.A member opposed this proposal bearing in mind staff hours, and end of day processes.Board noted the points raised both for and against, and will deliberate further.

XV. ADJOURNMENT The Chairman thanked all members for their attendance and declared the meeting ad-journed at 5.20pm. Members were invited to the post-meeting snacks and refreshments.

Minutes of meetingRespectfully submitted by;Mrs. Jessica Larue

Minutes of meetingApproved by Members of SCU;Represented by Board Chairman;Mr. Selby Dora

Chairman


EXECUTIVE SUMMARY

FOR THE YEAR ENDED 31ST DECEMBER 2017

Credit Unions Put People First. Credit unions live by the philosophy of "People Helping People.”

The aim of SCU is thus to uphold and defend the co-operative philosophy of credit unions.

VISION:

Strive to become a household name amongst members of our Community.

MISSION:

As the only community-based savings and credit cooperative society in Seychelles, the SeychellesCredit Union has the mission of promoting thrift amongst its members to enable it to provide

quality and fairly priced financial services to the community sphere through putting people beforeprofits and deliver financial services that not only meet but surpass members’ expectations.

1. Principal Activity

In line with preserving the culture of our cooperative and keeping in line with its mission

and vision, the principal activity of the Seychelles Credit Union (SCU) continued to be the

mobilization of savings by members for the granting of loans to members for the year 2017.

2. Legal Framework

SCU remained subject to the Credit Union Act 2009 (as amended), and its Bye-Laws.

3. Governance

3.1. Board of Directors

The composition of the Board of Directors was as follows:-Mr. Selby Dora Chairman

Mr. Bernard Elizabeth Vice - Chairman

Mr. Brian Julie Director

Mr. Divino Sabino Director

Mr. Emile Esparon Director

Ms. Ingrid Sinon CEO and Ex-Officio Member

3.2. Supervisory Committee

Members of the Supervisory Committee were as follows:

Mr. Patrick Bonnelame Chairman

Mrs. Germaine Gill Secretary

Mr. Patrick Pierre Member

N.B: Mr. Nicholas Woodcock Chairman (resigned)

3.3. Credit Committee

The Credit Committee comprised of:-

Mrs. Benjamine Socrate Chairman

Mrs. Dora Ernesta Member

Mr. Kevin Aglae Member

Mrs. Ann Hunt Member

Mrs. Francoise Shroff Member

4. Personnel

4.1. Number of Employees

During the year 2017 seven (7) staff were hired including and seven (7) others left, resulting

in a workforce of forty (40) staff by the end 2017.

Number of Employees - 2017

Department Beginning of the yearEnd of the

year

Administration 6 6

Banking 12 13

Loan 4 4

Finance 4 3

IT 2 2

Audit 2 2

Recovery 3 3

Praslin 3 3

La Digue 4 4

TOTAL 40 40Table 1: Number of Employees

5. Strategic Partnerships

During this year, SCU maintained its membership with the World Council of Credit Union

(WOCCU) as well as the African Confederation of Cooperative Savings and Credit

Associations (ACCOSCA).

6. Business Plan and overall forecast

As is customary, each year SCU prepares a 3-year Business Plan. The plan sets the various

benchmarks to be achieved and this is monitored by tracking the actual data, on a monthly

basis, against the targets. This has been improved in 2018, whereby daily tracking is being

done. The business plan covers a wide spectrum of market and firm specific analysis and

aims at addressing the shortfall of the previous plan. The plan is Board approved prior to

being submitted to the Regulatory Authority, Central Bank of Seychelles.

Through its business plan, SCU aimed to address and improve key performance areas over

the forecasted period. This included growth in assets, members, services, and loans.

SCU managed to exceed its financial targets for 2017 as laid out in the Business Plan 2017-

2019. To highlight a few, SCU recorded a 61% growth in net surplus compared to 42%

growth in 2016. This was associated with a 5% growth in membership, almost similar to

2016.

Even though actual income was slightly lower than the forecast, the cost reduction strategies

allowed for SCU to record lower expenses and hence exceed its net surplus target for the

year 2017.

SCU also managed to exceed expectations in its financial position as at 31st December 2017,

recording SCR 373.056 million in Total Assets, and SCR 355.557 million in Total Capital.

Delinquency was successfully reduced to a commendable 3.57% by December 2017

compared to 5% in 2016, exceeding targets set out in the Business Plan for the year 2017.

Other projects and objectives which were to be implemented over the course of the 3 years

(2017-2019) proceeded satisfactorily. Given SCU’s performance and the market conditions,

SCU reviewed its targets higher for the years 2018-2020.

As at March 2018, the new Business Plan for the forecast period 2018-2020 was approved,

in which SCU maintains its optimism for the future while being fully aware of the areas to

address for amplified and continued success.

7. Membership

During this year the SCU membership saw a net increase of 730 members to close with

15,619 members from 14,889 recorded as at the end of December 2016, this represents a

growth of 5%. The Membership growth has been on a constant growth path, increasing by

an average of 5% annually since 2011.

Total members as at 1st January 2017 14,889

New members admitted during the year 782

Voluntary and Mandatory Cessations of Membership during the year (52)

Total members as at 31st December 2017 15,619

Table 2: 2017 Membership

Figure 1: Total Number of Members

8. Financial Summary

8.1. Operating Results

The Total Income net of interest expense for the year 2017 stood at SCR 27.5 million, to

show an increase of SCR 5.760 million (26.5%) from the SCR 21.738 million observed in

the previous year. Non-Interest Expenses also recorded an increase of SCR 2.940 million

(17%) to reach at SCR 20.082 million by the end of 2017 compared to the SCR 17.142

million in 2016.

As a result the final year end Net Surplus amounted to SCR 7.416 million.

Table 3: Operating Results

Figure 2: Operating Results

2017 2016 Increase /(Decrease)

%

SCR '000 SCR '000 SCR '000

Loans to Members 28,333 21,832 +6,502 +30%Held-to-maturityFinancial assets 1,115 1,429 -314 -22%Other Interest 908 920 -12 -1%Interest Income 30,356 24,181 +6,176 +26%Interest Expenses 4,755 3,962 +793 +20%

Net Interest Income 25,601 20,219 +5,383 +27%Non Interest Income 1,898 1,519 +379 +25%Net Interest & Other

Income 27,499 21,738 +5,762 +27%Non-Interest Expenses 20,082 17,142 +2,878 +17%Net Surplus 7,416 4,596 +2,884 +61%

Figure 3: General Performance

Below is the comparative figure of the Net Surplus at the end of the last six (6) years:

Figure 4: Net Surplus

8.2. Net Surplus/(Shortage) by Branch

2017 2016

SR SRMahe 5,932,620 4,351,919

Praslin 765,213 (47,527)La Digue 718,068 292,109

7,415,901 4,596,501

The significant improvement in the Praslin and La Digue Branch performance has resulted

in an increase in their contribution to the net surplus compared to 2016. In 2017, the Praslin

and La Digue Branch each contributed 10% to the net surplus of SCU compared to -1% and

6.3% respectively in 2016.

Figure 5: Profit Sharing

The relocation of the Praslin Branch in December 2017 is expected to further improve the

performance of the Branch in 2018.

Below are some highlights of the performances per branch including interest income, other

income, and interest expense.

SCU’s income breaks down as follows:

INTEREST INCOME

HEAD OFFICEPRASLIN

BRANCHLA DIGUEBRANCH TOTAL

SCR SCR SCR SCR

Investment in held-to-maturity financial assets 1,114,576 - - 1,114,576

Advances to members 24,662,620 1,793,223 1,877,496 28,333,339

Cash and short term funds 907,598 - - 907,598

26,684,794 1,793,223 1,877,496 30,355,513

MEMBERSHIP FEES, PROCESSING FEES, & SUNDRY INCOME

HEAD OFFICEPRASLINBRANCH LA DIGUE BRANCH TOTAL

SCR SCR SCR SCR

Membership Fees 58,650 6,100 2,900 67,650

Application & Lending Fees 918,815 84,064 79,516 1,082,395

Other Processing fees 436,639 17,375 21,486 475,500

Rental income 272,000 - - 272,000

Profit on disposal of property and equipment - - - -

Other income 150 - - 150

1,686,604 107,539 103,902 1,897,695

Mahe93%

Praslin…La Digue

6%

2016 PROFIT SHARING

Mahe80%

Praslin10%

La Digue10%

2017 PROFIT SHARING

SCU’s interest expense breaks down as follows:

INTEREST EXPENSE

HEAD OFFICEPRASLINBRANCH LA DIGUE BRANCH TOTAL

SCR SCR SCR SCR

Fixed deposits 155,107 3,154 - 158,261

Members' savings deposits 4,177,189 206,595 213,279 4,597,062

Other Interest Expenses -427 441 14

4,331,869 210,190 213,279 4,755,337

8.3. Appropriation & Undistributed Surplus

Provisions have been made for the year’s surplus to be appropriated as follows:-

Transfer to General Reserves - 30% which amounts to SCR 2.224 million.

Payment of 5% Dividends amounting to SCR 2,926 million;

Surplus carried forward SCR 5.628 million

8.4. Net Assets

By the end of 2017 the Total Net Assets stood at SCR 373.056 million, representing an

increase of SCR 66.8 million (22%) compared to the SCR 306.129 million recorded in the

preceding year.

8.5. Loans

In 2017 Gross Loan portfolio saw an increase of SCR 39.980 million (20%) to end up at

SCR 240.646 million compared to the balance of SCR 200.666 million as at end of 2016.

During this year 1,374 new loans amounting to SCR 104.324 million were granted with an

average loan of SCR 0.076 million compared to the 1,117 loans granted in 2016 which

amounted to SCR 92.753 million with an average loan of SCR 0.083 million.

Mahe PraslinLa

Digue ConsolidatedGeneral/Personal Loans 178 15 11 204SST Loans 437 27 18 482SME Incentive Loans 13 1 1 15Subsidised Housing Loan 0 0 0 0Renewable Energy Loans 0 0 0 0M/Vehicle Loan 26 2 0 28Business Loan 60 5 1 66Start Up Business Loan 14 1 2 17Fully Secured Loan 161 10 4 175Staff Loan 25 0 0 25Student/Educ Loan 2 1 0 3Medical Loan 8 0 1 9Emergency Loan 0 0 0 0Housing Loan 9 1 0 10Land Loan 2 0 0 2House Renovation/ExtLoan 30 1 2 33Easter Loan 48 3 4 55Christmas Loan 131 11 8 150Family Planning Loan 1 0 0 1Holiday Loan 48 6 3 5715 OUT Loan 28 10 4 42

1,221 94 59 1,374

Table 4. Number of loans disbursed by Branch

Fig 6. Percentage number of loans disbursed by Branch

Mahe89%

Praslin7%

La Digue4%

Number of Loans Disbursed

Fig 7. Total Amount of Loans Disbursed

8.6. Loan Delinquencies

Out of the Total Loans of SCR 240.646 million, SCR 8.6 million were delinquent loans as

at end of December 2017.

Category Capital Due(SCR'000)

SecurityHeld

(SCR'000)

SecurityHeld(%)

Numberof

Accounts

a) 1 to 12 Months 7,066 7,196 101.84% 101

b) 13 to 18 Months 690 717 103.91% 2

c) Over 18 months 844 306 36.26% 30

TOTAL 8,600 8,218 95.56% 133

Table 5: Loan Delinquencies (2017)

SCU increased its loan loss allowance from SCR 2 million to SCR 2.5 million by 31st

December 2017 to cover for any potential losses. SCU expects to increase provision by an

additional SCR 500,000 in 2018.

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

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Below is a breakdown of delinquency per branch:

Branch Capital Due(SCR'000)

Numberof

Accounts

a) Mahe 8,430 125

b) Praslin 64 5

c) La Digue 106 3

TOTAL 8,600 133

Table 6: Loan Delinquencies per Branch (2017)

Figure 8: Loan Delinquencies (2017)

8.7.Funds Employed

Total Members’ Fund (Savings, Current, Fixed, and Shares Deposits) reached a total of

SCR 333.008 million by end December 2017. When compared to the previous year’s result,

this marked a net increase of SCR 61.042 million (22.44%), increasing from SCR 271.966

million at the end of 2016.

Fixed Deposit recorded an increase of SCR1.194 million (23%) to close at SCR 6.280

million in 2017 from the SCR 5.085 million in 2016.

Significant increases were also recorded in Member Savings and Members Shares

amounting to SCR 38.35 million (18.25%) and SCR 7.79 million (13.7%) respectively. As

a result at the end of the year the Members Savings stood at SCR 248.482 million compared

to the SCR 210.134 million in 2016. Likewise, Members Shares had reached SCR 64.539

million from the SCR 56.746 million recorded last year.

8.8. Investment/Assets Liability Management

Below are the lists of all investments held by SCU as at 31st December 2017.

Short Term Investments:

Investment Amount Expiry Date Rate

DAA 2-7 days 5,279,330 03/01/2018 2.90%

10,000,000 05/01/2018 2.90%

15,279,330

Medium/Long Term Investments

Investment Amount Expiry Date Rate

91 Days Treasury Bills 4,963,000 28/02/2018 3.00%

4,956,000 14/03/2018 3.56%

182 Days Treasury Bills 4,988,310 06/06/2018 4.49%

365 Days Fixed Deposit (SIMBC) 600,000 29/04/2018 3.75%

5 Years Treasury Bond 4,000,000 07/02/2019 5.50%

5,000,000 10/08/2022 6.50%

24,507,310

Total Investments 39,786,640

9. The year ahead

With the increased competition and the need to double efforts for sustainability, SCU will

be considering the need to change its business model or diversifying its sources of income.

SCU recognizes the need to have various service channels in order to increase its member

base and bring its services closer to the public. This would require embracing digital

channels and innovation whilst ensuring that any projects generate economic benefit for the

cooperative and its members.

Diversification of sources of income could also involve transaction in foreign exchange,

and possible investments in other income generating assets.

Going forward SCU will also be focusing its efforts in sensitizing its members to increase

their interests in the overall objectives and business plans of SCU, and promote financial

inclusion. This will be done through more active interaction and the works of the Members

Education Committee.

SCU’s no tolerance to delinquency will be coupled with more robust recovery efforts, and

a target delinquency ratio of 3%, 2%, and 1% for the upcoming 3 years.

Growing SCU’s capital is crucial, especially given the regulatory requirements. SCU

intends to review its capital growth strategies going forward and this will undoubtedly

involve some short term sacrifices on dividend payments.

PART II


DIRECTORS' REPORT AND AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017

CONTENTS

PAGE

Corporate Information

1

Directors' Report

2 - 3

Report of the Auditors

4 - 4 (b)

Balance Sheet

5

Income Statement

6

Statement of Changes in Equity

7

Cash Flow Statement

8

Notes to the Financial Statements

9 - 20

SEYCHELLES CREDIT UNION 1

CORPORATE INFORMATION

DIRECTORS : Selby Dora Bernard Elizabeth Brian Julie Divino Sabino Emile Esparon Ingrid Sinon (CEO)

REGISTERED OFFICE : Co-operative House Huteau Lane

Manglier Street Victoria Mahe Seychelles

PRINCIPAL PLACE OF : Mahe

BUSINESS Seychelles

AUDITORS : Baker Tilly Chartered Accountants Seychelles

BANKERS : (1) Central Bank of Seychelles (2) The Mauritius Commercial Bank (Seychelles) Limited (3) Seychelles International Mercantile Banking Corporation Limited (4) Barclays Bank Limited (5) Seychelles Commercial Bank Limited


DIRECTORS' REPORT

Selby Dora 1 Bernard Elizabeth 1,294 Brian Julie 4 Divino Sabino 100 Emile Esparon 2 Ingrid Sinon 455

The Board is pleased to present its report together with the audited financial statements of Seychelles Credit Union for the year ended December 31, 2017.

PRINCIPAL ACTIVITIES

The Seychelles Credit Union is a Body Corporate, established under the Credit Union Act, 2009 As Amended, which is owned and controlled by its Members and operated for the purpose of promoting thrift and to provide credit at reasonable rates. It also offers other financial services to its Members. There has been no change in the principal activities for the financial year under review.

RESULTS

SR

Surplus for the year

7,415,901 Transfer to general reserve (2,224,770) 5,191,131 Surplus fund brought forward 3,362,847 8,553,978 Dividends (2,925,573) Surplus fund carried forward 5,628,405

DIVIDENDS

Dividends of 5% was proposed for the year ended December 31, 2017 (2016 : 5%).

PROPERTY AND EQUIPMENT AND INVESTMENT PROPERTY

Additions to property and equipment of SR. 408,002 during the year comprised work in progress, office equipment and furniture & fittings (2016: SR 592,078). There was no addition to Investment property during the year. Property and equipment are stated at cost less accumulated depreciation. The Directors have estimated that the carrying amount of property and equipment at the balance sheet date approximate their fair

DIRECTORS AND DIRECTORS' INTERESTS

The Directors of the Credit Union since the date of the last report and the date of this report are:

Number of shares held

4

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF


This report is made solely to the members of Seychelles Credit Union, (the "Credit Union"), as a body, in terms of our engagement to conduct the audit on their behalf. Our audit work has been undertaken so that we might state to the members those matters which we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the members as a body, for our audit work, for this report, or for the opinions we have formed.

Report on the Audit of the Financial Statements

Opinion

We have audited the attached financial statements of Seychelles Credit Union set out on pages 5 to 20 which comprise the Balance Sheet at December 31, 2017, the Income Statement, Statement of Changes in Equity and the Cash Flows Statement for the year then ended and a summary of significant accounting policies and explanatory notes.

In our opinion, the financial statements set out on pages 5 to 20 give a true and fair view of the financial position of the Credit Union at December 31, 2017 and of its financial performance and its cash flows for the year then ended in accordance with Generally Accepted Accounting Principles and in compliance with the Credit Union Act, 2009, as amended.

Basis of Opinion

We conducted our audit in accordance with International Standards on Auditing ('ISAs'). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Credit Union in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Seychelles, and we have fulfilled our other responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other matter

The financial statements of the Credit Union for the year ended December 31, 2016 were audited by another auditor who expressed an unqualified opinion on June 28, 2017.

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF


Report on the Audit of the Financial Statements Continued

Other information

The Board is responsible for the other information.

4 (a)

Our opinion on the financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Board for the Financial Statements

The Directors are responsible for the preparation of the financial statements in accordance with Generally Accepted Accounting Standards in Seychelles and in compliance with the Credit Union Act, 2009, as amended. and for such internal control as board determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board is responsible for assessing the Credit Union’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board either intends to liquidate the Credit Union or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Credit Union’s financial reporting process.

Auditors' Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.


INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2017

Notes

2017

2016 SR SR

Interest Income 2(g) & 15 30,355,513 24,180,866 Interest expense 2(g) & 16 (4,755,337) (3,962,144) Net interest income 25,600,176 20,218,722

Other income Membership and processing fees

17

1,625,545

956,416 Sundry income 18 272,150 562,938 1,897,695 1,519,354

Net interest and other income

27,497,871

21,738,076

Non-interest expenses Employee benefit expenses

19

(10,553,374)

(9,491,718) Depreciation of property and equipment 7 (845,340) (862,590) Impairment of investment property 8 (170,700) (173,724) Amortisation of intangible asset 9 (572,323) (503,264) Other expenses 20 (7,440,233) (6,110,279) Charge for provision for credit impairment 5 (i) (500,000) - (20,081,970) (17,141,575)

Surplus for the year

7,415,901

4,596,501

The notes on pages 9 to 20 form an integral part of these financial statements Auditors' Report on pages 4 to 4 (b)


STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31, 2017

Ownership Savings Fixed-term Current Revaluation Surplus General Shares account deposits account reserve fund reserve Total

SR SR SR SR SR SR SR SR

Balance at January 1, 2017 56,746,100 210,134,446 5,085,263 - 7,688,625 3,362,847 7,006,723 290,024,004 Surplus for the year - - - - - 7,415,901 - 7,415,901 Movement for the year 7,792,741 38,347,568 1,194,316 13,707,591 - - - 61,042,216 Transfer (note (a) below) - - - - - (2,224,770) 2,224,770 - Dividends (note 12) - - - - - (2,925,573) - (2,925,573) Balance at December 31, 2017 64,538,841 248,482,014 6,279,579 13,707,591 7,688,625 5,628,405 9,231,493 355,556,548

Balance at January 1, 2016

47,658,300 162,805,797 6,273,384 - 7,688,625 2,730,882 5,627,773 232,784,761 Surplus for the year - - - - - 4,596,501 - 4,596,501 Movement for the year 9,087,800 47,328,649 (1,188,121) - - - - 55,228,328 Transfer (note (a) below) - - - - - (1,378,950) 1,378,950 - Dividends (note 12) - - - - - (2,585,586) - (2,585,586) Balance at December 31, 2016 56,746,100 210,134,446 5,085,263 - 7,688,625 3,362,847 7,006,723 290,024,004

Note (a): Transfer represents 30% of Surplus for the year to General Reserves as proposed by the Directors.



CASH FLOWS STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2017

Notes 2017 2016 SR SR

OPERATING ACTIVITIES Surplus for the year 7,415,901 4,596,501 Adjustments for:

Depreciation of property and equipment 7 845,340 862,590 Impairment of assets 8 170,700 173,724 Amortisation of intangible asset 9 572,323 503,264 Loss on intangible asset written off 9 752,174 251,852 Charge for provision for credit impairment 5(i) 500,000 - Movement in retirement benefit obligations 13(i) 414,378 393,954

Changes in working capital - Advances to members 5 (104,324,035) (92,752,900) - Repayments by members 5 64,343,953 57,836,264 - Movement in Fixed deposits, Savings and Current accou 14 53,249,475 46,140,528 - Decrease/(Increase) in other assets 10 4,988,356 (5,061,444) - Increase/(Decrease) in other liabilities 11 642,817 1,325,628

Net cash inflow from operating activities 29,571,381 14,269,961

INVESTING ACTIVITIES Movement in held-to-maturity financial assets 6 (4,044,645) (1,480,665) Additions to property and equipment 7 (408,002) (592,078) Additions to intangible assets 9 (10,092,080) (2,950) Net cash outflow from investing activities (14,544,727) (2,075,693)

FINANCING ACTIVITIES Movement in ownership shares 14 7,792,741 9,087,800 Dividends paid 12 (2,587,521) (2,253,965) Net cash inflow from financing activities 5,205,220 6,833,835

Net change in cash and cash equivalents 20,231,875 19,028,103

Movement in cash and cash equivalents: At January 1, 59,581,652 40,553,549 Increase during the year 20,231,875 19,028,103 At December 31, 4 79,813,527 59,581,652



NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2017

1. GENERAL INFORMATION

Seychelles Credit Union is established under the Credit Union Act, 2009 as amended, as a fully fledge independent financial Co-operative.

These financial statements will be submitted for consideration and approval at the forthcoming Annual General Meeting of the Members of the Credit Union.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied for all years presented, unless otherwise

(a) Basis of preparation

The financial statements are prepared in accordance with Generally Accepted Accounting Standards and under the historical cost convention.

(b) Property and equipment

Building is carried at its revalued amount based on valuation by an external valuer, less subsequent depreciation. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. All other property and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributed to the acquisition of the items.

Subsequent costs are included in the assets' carrying amount or recognised as a separate asset as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Credit Union and the cost of the item can be measured reliably.

Increases in the carrying amount arising on revaluation are credited to revaluation reserves. Decreases that off set previous increases of the same asset are charged against revaluation reserve and all other decreases are charged to the income and expenditure account.

Depreciation of property and equipment is provided for on a straight line basis to write off the cost of each asset evenly to its residual value over their estimated useful lives as stated below:

Building on leasehold land and improvement 33 years Freehold land and building 4 years Office equipment 3 to 10 years Furniture and fittings 10 years

The assets residual values, useful lives and methods of depreciation are reviewed periodically and adjusted prospectively, if appropriate.



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Continued

(b) Property and equipment Continued

The carrying values of equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets or cash-generating units are written down to their recoverable amount or amortised over a period determined by the management.

An item of equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the Income Statement.

(c) Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any. The useful lives of intangible assets are assessed as either finite or infinite.

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognised in the Income Statement when incurred.

Intangible assets are amortised on a straight-line basis in the Income Statement over their estimated useful lives, from the date that they are available for use. The estimated useful life of computer software for the current and comparative periods was 10 years. Intangible assets' residual value, useful life and amortisation methods are reviewed and adjusted if appropriate, at the end of each reporting period.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Income Statement when the asset is derecognised.

(d) Investment property

Properties held to earn rentals/or for capital appreciation or both are classified as investment properties. Investment properties are carried at fair value, representing open-market value determined bi-annually by external valuers and subject to yearly reviews by the valuers. Changes in fair values are recognised in the Income Statement.




(e) Retirement benefit obligations

The Credit Union has a retirement benefit scheme for its employees. Under this scheme, employees who have completed 10 or more years of continuation service shall be entitled to a lump sum end- of-service gratuity as follows:

(i)

(ii)

(iii)

employees who retire or cease to be employed after completing 10 years service shall receive a terminal benefit of 1.5 times their latest monthly basic salaries for each year of completed service; for employees with more than 10 years service, in addition to the benefits as in (i) above, they shall be paid 2 times their latest monthly basic salaries for each year of service in excess of the initial 10 years; and any sum which an employee has received under a previous scheme as well as an amount due as compensation or severance pay under the Employment Act, 2004 shall be deducted from the amount calculated in respect of the terminal gratuity due and payable under the Credit Union's Retirement Benefit Scheme.

(f) Impairment of assets

Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).

(g) Interest income and expense

Interest income and expense are recognised in the Income Statement for all interest bearing instruments on an accrual basis using the effective yield method based on actual purchase price except in the respect of loans to members where the interest income is recognised on receipt basis.

(h) Other income

Fees and commissions are recognised on receipt basis when the service has been provided. Commission and fees arising from negotiating, or participating in the negotiations of a transaction for a third party, such as the acquisition of loans, shares or other securities or the purchase or sale of businesses, are recognised on completion of the underlying transaction.




(i) Provisions

Provisions are recognised when the Credit Union has a present legal or constructive obligation as a result of past events or it is probable that an outflow of resources that can be reasonably estimated will be required to settle the obligation.

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of Credit Union financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

Estimates and judgments are continuously evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the process of applying the Credit Union accounting policies, management has made the following estimates and judgments, which have the most significant effect on the amounts recognised in the financial statements:

(a) Impairment of advances to members

The Credit Union reviews its loans and advances portfolio on a regular basis to assess whether any allowance for credit impairment losses for loans and advances should be recognised in the Income Statement. In particular, judgment is made about the amount and timing of future cash flows when determining the level of allowance required. The allowance for credit impairment losses is based on the best estimates available. However, the actual amount of impairment may differ from amount provided resulting in higher or lower charges to the Income Statement.

(b) Revaluation of buildings

Building classified partly as fixed asset and partly as investment property is carried at fair value, representing its open market value by an external valuer in 2010. The Directors have estimated that the carrying amount of the building approximates its fair value and there is no requirement for any impairment at December 31, 2017.

(c) Useful lives and residual values of property and equipment

Determining the carrying amounts of property and equipment requires the estimation of the useful lives and residual values of these assets which carry a degree of uncertainty. The Directors have used historical information relating to the Credit Union and the relevant industry in which it operates in order to best determine the useful lives and residual values of equipment.



4. CASH AND CASH EQUIVALENTS

2017 2016

SR SR

Cash in hand 1,286,239 3,072,492 Balances with local banks 11,577,085 723,473 Balances with Central Bank of Seychelles 51,273,217 32,641,005 Short-term deposits (note (a)) 397,656 1,144,682 Deposit auction arrangements (note (a)) 15,279,330 22,000,000

79,813,527 59,581,652

(a) Short term deposits and Deposit auction arrangements have been classified under cash and cash equivalents as they matured within 3 months of year end.

5. ADVANCES TO MEMBERS

At January 1,

2017

SR

200,665,842

2016

SR

165,749,206 Advanced during the year 104,324,035 92,752,900 Repayments during the year (64,343,953) (57,836,264) At December 31, 240,645,924 200,665,842 Less: Provision for credit impairment (see note (i) below) (2,500,000) (2,000,000) 238,145,924 198,665,842 (i)

Movement in provision for credit impairment is given below:

2017

2016

SR SR

At January 1,

2,000,000

2,000,000 Increase by charge to the Income Statement 500,000 - At December 31, 2,500,000 2,000,000

6.

HELD-TO-MATURITY FINANCIAL ASSETS

Maturity % interest per annum

2017 SR

2016 SR

Treasury bonds 5 Years 5.50% to 6.50%

9,000,000

4,000,000 Treasury bills 91-365 days 2.99% to 8.25% 14,907,310 15,862,665 Fixed Deposits 365 days 3.75% 600,000 600,000 24,507,310 20,462,665 (a)

The above financial assets are denominated in Seychelles Rupees.



7. PROPERTY AND EQUIPMENT

Buildings on leasehold land &

Office

Furniture

Work in

improvements equipment & fittings progress Total COST/VALUATION

SR SR SR SR SR

At January 1, 2017

15,094,456

2,844,145

1,944,271

3,266,120

23,148,992 Additions - 132,535 91,834 183,633 408,002 At December 31, 2017 15,094,456 2,976,680 2,036,105 3,449,753 23,556,994

ACCUMULATED DEPRECIATION

At January 1, 2017

5,223,524 2,517,062 1,042,882 - 8,783,468 Charge for the year 455,319 222,272 167,749 - 845,340 At December 31, 2017 5,678,843 2,739,334 1,210,631 - 9,628,808

NET BOOK VALUE

At December 31, 2017

9,415,613 237,346 825,474 3,449,753 13,928,186

COST

At January 1, 2016

14,983,392 2,762,410 1,844,489 2,966,623 22,556,914 Additions 111,064 81,735 99,782 299,497 592,078 At December 31, 2016 15,094,456 2,844,145 1,944,271 3,266,120 23,148,992

ACCUMULATED

DEPRECIATION

At January 1, 2016

4,768,205 2,272,000 880,673 - 7,920,878 Charge for the year 455,319 245,062 162,209 - 862,590 At December 31, 2016 5,223,524 2,517,062 1,042,882 - 8,783,468

NET BOOK VALUE

At December 31, 2016

9,870,932 327,083 901,389 3,266,120 14,365,524



8. INVESTMENT PROPERTY

COST

2017 2016

SR SR

At January 1, 5,689,997 5,689,997

DEPRECIATION

At January 1, 642,793 469,069 Charge for the year 170,700 173,724 At December 31, 813,493 642,793

NET BOOK VALUE At December 31, 4,876,504 5,047,204

(a) The value of the investment property was subject to review at December 31, 2010 by independent

professionally qualified valuer, on an open-market basis with existing tenancies. The Directors are of the opinion that the carrying amount of the investment property approximate its fair value and no further revaluation or impairment is required for the year ended December 31, 2017.

9. INTANGIBLE ASSETS Computer software

2017 2016 SR SR

COST At January 1, 3,248,882 3,894,949 Additions during the year 10,092,080 2,950 Disposal (2,616,254) (649,017) At December 31, 10,724,708 3,248,882

AMORTISATION

At January 1, 2,145,268 2,039,169 Amortisation for the year 572,323 503,264 Disposal written off (1,864,080) (397,165) At December 31, 853,511 2,145,268

NET BOOK VALUE At December 31, 9,871,197 1,103,614

10. OTHER ASSETS

2017 2016

SR SR

Other receivables and prepayments 1,913,743 6,902,099

(a) The carrying amount of 'other assets' approximate their fair value and are denominated in Seychelles Rupees.



11. OTHER LIABILITIES

2017 2016

SR SR

Interest payable on Fixed deposits 24,344 20,853 Interest payable on Savings account - 1,034,773 Savings and loan protection provision 7,010,403 6,154,297 Other payables and accruals 1,590,124 772,131

8,624,871 7,982,054

12. DIVIDENDS

Dividends of 5% was proposed for the year ended December 31, 2017 (2016 : 5%). Movement is as follows:

2017 2016

SR SR

At January 1, 2,587,521 2,255,900 Proposed for the year 2,925,573 2,587,521 Paid during the year (2,587,521) (2,253,965) Adjustment - (1,935) At December 31, 2,925,573 2,587,521

13. RETIREMENT BENEFIT OBLIGATIONS

2017 2016

SR SR (i) Liability At January 1, 5,535,021 5,141,067 Charge for the year (ii) 1,153,974 1,361,110 Paid during the year (739,596) (967,156) At December 31, 5,949,399 5,535,021

(ii) Charge to Income Statement: Current service cost included in staff costs (note 19) 1,153,974 1,361,110

(iii) The assets in the plan and expected rate of return were:

Discount rate 3.5% 3.5% Future salary increases 5.0% 5.0%



14. MEMBER'S SHARES/SAVINGS DEPOSITS

2017 2016

Ownership shares (note (a))

SR

64,538,841

SR

56,746,100

Savings deposits (note (b)) 248,482,014 210,134,446 Fixed deposits (note (c)) 6,279,579 5,085,263 Current Account (note (d)) 13,707,591 - 333,008,025 271,965,809 Number of members

15,619

14,889

(a)

(b)

(c)

(d)

As per the Bye-laws of the Credit Union, the par value of an ownership share is of SR. 100 each. The ownership share account was created from members' saving account upon the coming into force of the By-laws on August 23, 2008. The total value of fully paid ownership shares that a member may subscribe for or purchase is unlimited. The Credit Union receives deposits from its Members, the terms, rates and conditions of which are established by the Board in accordance with the policies of the Credit Union. The savings deposits carry interest at the rate of 2%. The terms, rates and conditions of the fixed deposits are established by the Board of the Credit Union in accordance with the policies of the Credit Union. The interest rates of fixed deposits ranges between 3% to 3.5%. Current accounts were introduced effective February 1, 2017 subsequent to the introduction of new computer software System T24.

15. INTEREST INCOME

2017 2016

SR SR

Investment in held-to-maturity financial assets 1,114,576 1,428,733 Advances to members 28,211,501 21,832,447 Overdraft 121,838 - Cash and short term funds 907,598 919,686

30,355,513 24,180,866

16. INTEREST EXPENSE

2017 2016

SR SR

Fixed deposits 158,261 153,565 Members' savings deposits 4,597,062 3,808,579 Other Interest expenses 14 -

4,755,337 3,962,144



17. MEMBERSHIP AND PROCESSING FEES

2017 2016

SR SR

Membership fees 67,650 130,800 Processing fees 1,557,895 825,616

1,625,545 956,416

18. SUNDRY INCOME

2017 2016

SR SR

Rental income 272,000 224,000 Other income 150 338,938

272,150 562,938

19. EMPLOYEE BENEFIT EXPENSES

2017 2016

SR SR

Salaries and wages 7,867,993 7,252,958 Governance allowance (note (a)) 454,590 475,985 Staff retirement benefits (note 13(i)) 1,153,974 1,361,110 Prior year staff compensation 724,656 - Other staff costs 352,161 401,665

10,553,374 9,491,718

(a) Board of Directors, Supervisory & Credit committee fees:

Directors' fees

Selby Dora 48,000 52,235 Bernard Elizabeth 48,000 52,235 Brian Julie 48,000 52,235 Emile Esparon 48,000 33,412 Dora Ernesta - 18,825

Divino Sabino 48,000 33,412 240,000 242,354

Supervisory committees' fees

Paul Dupres - 12,706 John Antat - 12,706 Rosie Morel - 12,706 Nicholas Woodcock 22,230 22,553 Patrick Pierre 32,400 18,318 Germaine Gill 7,560 -

Patrick Bonnelame 32,400 22,553 94,590 101,542



19. EMPLOYEE BENEFIT EXPENSES Continued

(a) Board of Directors, Supervisory & Credit committee fees: Continued

2017 2016

SR SR

Credit committees' fees Anne Hunt 24,000 26,118 Francoise Shroff 24,000 26,118 Bejamine Socrate 24,000 26,118 Nicholas Woodcock - 9,412 Kevin Aglae 24,000 26,118 Dora Ernesta 24,000 16,705

120,000 130,589

Nominee committees' fees

Francoise Shroff - 500 Cyril Payet - 500 Dora Ernesta - 500 - 1,500

Total Board of Directors, Supervisory & Credit Committee fees 454,590 475,985

20. OTHER EXPENSES

2017 2016

SR SR

Security costs 741,445 575,428 Rent 581,444 550,500 Repair and maintenance 200,578 131,987 Audit fees 86,250 85,000 Legal and professional fees 86,477 82,302 Advertising and promotion 90,736 26,980 Utilities 1,468,677 1,266,458 Printing and stationary 349,508 166,220 Travelling expenses 148,296 265,552 Training and meeting expenses 294,329 204,520 Subscriptions 134,772 86,182 IT costs 605,371 694,977 Insurance 106,098 101,845 Savings and loan protection provision 1,643,925 1,416,678 Loss on disposal of intangibles 741,273 - Others 161,054 455,650

7,440,233 6,110,279



21. CONTINGENT LIABILITIES

There were no contingent liabilities at December 31, 2017 (2016: SR 2.2M).

22. COMMITMENTS

Loans approved but not yet disbursed amounted to SR 15.84m (2016: SR 19.82m).


ANNUAL GENERAL MEETING 2018

RESOLUTIONS

The Members of the Seychelles Credit Union hereby approve the following:

Resolution No. 1: Appropriation of Surplus

Based on the recommendation of the Board of Directors and as confirmed in the auditedfinancial statements prepared by Baker Tilly dated 2nd July 2018, members resolve to dispose ofthe surplus for the year 2017 amounting to SCR 7,415,901 as follows:

- To transfer 30% (SCR 2,224,770) to general reserves, in line with the Credit Union Act2009 (as amended).

- To pay a proposed dividend rate of 5% (SCR 2,925,573) on members’ shares.- To carry forward the balance of SCR 2,265,558 as undistributed surplus thus bringing

retained earnings to a total of SCR 5,628,405.

Resolution No.2: Appointment of new External Auditor

Based on the recommendation of the Board of Directors, members resolve to re-appoint BakerTilly Seychelles as the External Auditor for the year 2018.


Mahe BranchCooperative House

Manglier StreetVictoria

SeychellesTel: +248 4290190 / 4290100

Praslin BranchShanti BuildingBaie Ste Anne

PraslinSeychelles

Tel: +248 4290142

La Digue BranchLakaz Safran

La PasseLa Digue

SeychellesTel: +248 4290144

Fax: +248 4290199Email: [email protected]

Website: www.scu.scSocial Media Page: www.facebook.com/seychellescreditunion/

Notes from AGM

Documents

PART Iscu.sc/images/booklet-agm-august-2018.pdfRANJAN ORPHEE BANKING MANAGER Update on ATM Chairman advised that the ATM project will be implemented in phases in line with approval