ANNUAL REPORT 2010 - Trinidad and Tobago dollar · 2017-09-05 · vi Central Bank of Trinidad and...

ANNUALREPORT

2010

The primary purpose of the

Bank is the promotion

of monetary, credit and

exchange conditions

most favourable to the

development of the economy

of Trinidad and Tobago.

Our Purpose

Central Bank of Trinidad and Tobago Annual Report 2010 | 1

| Central Bank of Trinidad and Tobago Annual Report 2010 2


Photo CreditsLloyd PierreDovelyn Richmond

The cover image depicts the lighted panels found on the ground floor of the Central Bank of Trinidad and Tobago

The photos that represent the separator pages in the Annual Report are external shots of the Central Bank of Trinidad and Tobago at different angles.

Central Bank of Trinidad and Tobago Annual Report 2010 | i

Letter of Transmittal

December 31, 2010

The Honourable Winston DookeranMinister of FinanceMinistry of FinanceEric Williams Finance BuildingIndependence SquarePORT OF SPAIN REF: CB-G: 177/10

Dear Minister Dookeran

In accordance with Section 53(1) of the Central Bank Act Chap.79:02,

I enclose herewith the Report of the Central Bank of Trinidad and Tobago

for the year ended September 30, 2010, together with a copy of the Annual

Audited Statement of Accounts certified by the Auditors.

Yours sincerely,

Ewart S. Williams

Encls.

Ewart S. WilliamsGovernor

Central Bank of Trinidad and Tobago Annual Report 2010 | iii

Page

Governor’s Foreword (v)

Board of Directors (vii)

Senior Management (viii)

Managers and Departmental Heads (x)

Assistant Managers (x)

Review of Activities 2009-2010

•Highlights 1

•EconomicDevelopments 1

•FinancialSystemSurveillance 3

•PaymentsSystemOversight 5

•BankingOperations 5

•ForeignExchangeMarketOperations 10

•ForeignReservesManagement 10

•Research,InformationandKnowledgeServices 11

•NationalFinancialLiteracyProgramme 12

•OutreachProgrammes 12

•HumanResources 14

•RiskManagement 15

Financial Statements

•ReportoftheAuditorGeneral 19

•ConsolidatedFinancialStatements

•NotestotheConsolidatedFinancialStatements

Appendices

TableA.1 –CurrencyinCirculation,2007–2010

TableA.2 –CentralBankStatementofLiabilitiesandAssets,2009-2010

TableA.3–CommercialBanks:AverageDepositLiabilities,RequiredCashReservesand

ActualCashReservesforPeriodEndingSeptember30,2010

TableA.4–Non-BankFinancialInstitutions:AverageDepositLiabilities,RequiredCash

ReservesandActualCashReservesforPeriodEndingSeptember30,2010

ChartsandTables

ChartI - CurrencyinCirculation

ChartII - VolumeofNotesinCirculationByDenomination2009/2010

ChartIII - VolumeofCoinsinCirculationByDenomination2009/2010

ChartIV - RTGSAnnualVolumes

ChartV - PurchasesandSalesofForeignExchangeOctober2008-September2010

Table of Contents

Central Bank of Trinidad and Tobago Annual Report 2010 | v

TrinidadandTobagowentthroughachallengingyearin2010.Whilethemarkeddeclineineconomicactivityregisteredinthepreviousyearwashalted,therecoveryineconomicgrowthwasmuchweaker thanoriginallyenvisaged. The lukewarm economic performance in2010wasmainly due to lower than expected publicand private sector investment, lackluster demand fornon-energy exports from the CARICOM region andexceptionally subdued consumer demand, related inpart to an increase in unemployment, mainly in theconstructionandservicessectors.

Tocompoundthesluggisheconomicactivity,headlineinflation which fell to record low levels in 2009,accelerated to double-digits in 2010. The surgewas

however, due almost entirely to a weather-inducedreductionindomesticagriculturaloutput.Coreinflationhoveredbetween4and5percent.

Theurgentneedtofosteracredibleeconomicrecoverywhile reducing inflation to acceptable levels hascreated challenges for economic policy-making. Thegovernment’sbudgetforFY2011hasadoptedapolicystance that focuses on the provision of incentives tostimulateprivatesectoractivityandtheimplementationof a large public sector investment programme thatemphasizesinfrastructuralprojects.Whiletheprojecteddeficitwillimplyasizeableincreaseinborrowing,publicdebt is still expected to remain within manageablelevels.

Governor’s Foreword

“The urgent need to foster a credible economic recovery while reducing inflation to acceptable levels has created challenges for economic policy-making.”

Ewart S. Williams

Chairman of the Board and Governor

| Central Bank of Trinidad and Tobago Annual Report 2010 vi

Governor’s Foreword

Forthepastyear,monetarypolicyhassoughttoprovidesupportforanincreaseinprivatesectoractivity.However,successhassofarbeenlimited.Whilereductionsinthepolicyinterestratehaveledtoadeclineincommercialbankinterestrates,thefallinlendingrateshasnotservedtoincreaseloandemand.Rather,financialsavingshavecontinuedtoincreaseatarapidpaceleavingbankswithsignificantexcessliquidity.

Conditionsareripeforafirmerrecoveryin2011.Thebrighteroutlookfortheglobaleconomyshouldbenefittheenergysectorthroughhigherpricesandincreaseddemandforpetrochemicals.Progressintheresolutionoforganizationalproblemsby thenewadministrationpromises to pave the way for accelerated policyimplementation. This in turn will go a long way tostimulatingprivateconsumptionandinvestment. TheCentralBank’sbasecasescenarioisforanincreaseinGDPofaround1-2percentin2011,whichshouldatleastleadtoadecline,albeitsmall,inunemployment.Giventheexistenceofamplesparecapacityandwithdomesticagriculturalpricesalready returning tomorenormal levels, headline inflation should recede toaround7percent.

TheCentralBankwillneedtoplayanimportantroleintherecoveryeffort.Itschallengewillbetosupporttheincreaseineconomicactivitythroughfurtherreductionsin interest rates, while keeping a close eye for anyresurgenceofinflationarypressures.TheBankalsohasanambitiousagendagearedtowardsmaintainingfinancialstabilityandenhancingthefinancialinfrastructurethatgovernsthenon-banksystem.

GovernorEwartS.Williams

Board of Directors

Ewart S. WilliamsChairman of the BoardGovernor

Ms. Joan JohnExecutive DirectorDeputy Governor

Dr. Shelton NichollsExecutive DirectorDeputy Governor

Ms. Alison LewisDate of Appointment:November 29, 2007Public Service DirectorPermanent Secretary,Ministry of Finance

Ms. BarbaraChatoorDate of Appointment:July 19, 2009Ordinary DirectorB.A., National Universityof IrelandDiploma in Education,UWI, St. Augustine

Ms. AmeliaCarrington S.C.Date of Appointment:April 11, 2009Ordinary DirectorAttorney-at-Law

Mr. Norris CampbellDate of Appointment:July 8, 2007Ordinary DirectorChartered AccountantB.Sc. FCCA.

Mr. Carlyle GreavesDate of Appointment:April 11, 2009Ordinary DirectorM.A. DevelopmentEconomicsM.A. Latin AmericanDevelopment Studies

Prof. Selwyn CudjoeDate of Appointment:April 11, 2009Ordinary DirectorPh.D. American Studies

Central Bank of Trinidad and Tobago Annual Report 2010 | vii

Senior Management

Ewart S. WilliamsChairmanoftheBoardGovernor

Ms. Joan JohnExecutive DirectorDeputy Governor

Dr. Shelton NichollsExecutive DirectorDeputy Governor

Mr. Carl HiralalInspector of Financial Institutions

Mr. Alister NoelSenior ManagerOperations

Ms. Wendy Ho SingDeputy InspectorFinancial Institutions

Mrs. Jennifer GreavesSenior ManagerInformation Technology Services andThe National Financial Literacy Programme

Mrs. Nicole CrooksSenior ManagerHuman Resourceand Corporate Services

| Central Bank of Trinidad and Tobago Annual Report 2010 viii

Senior Management

Mr. Patrick SolomonSenior ManagerRisk Management and Corporate Governance

Ms. Marie BorelyFinancial Controller

Dr. Alvin HilaireChief Economist andDirector of Research

Central Bank of Trinidad and Tobago Annual Report 2010 | ix

Managers andDepartmental Heads

Dr. Penelope FordeAdvisor to the Governor

Mrs. Elizabeth AustinManager, National Financial Literacy Programme

Ms. SharonBraithwaiteManager, Insurance and Pensions Unit, FISD

Ms. NicoleChapmanManager, Legal andCorporateSecretariatServices

Ms. Wendy D’ArbasieManager, Domestic Market Operations

Mrs. Joycelyn OpadeyiManager,Procurement and Support Services

Mrs. Zoraida DookieManager,InformationTechnologyServices

| Central Bank of Trinidad and Tobago Annual Report 2010 x

Mrs. MichelleFrancis-PantorManager, Policy and Market Conduct

Managers andDepartmental Heads

Ms. Suzanne RoachManager, Internal Audit

Mr. Lester ShimManager, ReserveManagement

Mrs. HeatherHugginsManager, Human Resources

Mr. Carl StewartManager, Credit Unions, FISD

Mr. Richard RossChief Engineer,Facilities Services

Ms. Janice WoodsManager, BankingOperations

Mrs. June StewartManager, Knowledge and Information Management

Central Bank of Trinidad and Tobago Annual Report 2010 | xi

Assistant Managers

Mr. Victor MaloneyAssistant Manager, Corporate Communications

Ms. Sharon VillafanaPayments System Co-ordinator, Payments System

Dr. Earl BoodooAssistant Manager, Research

Ms. SherizaHassan-AliAssistant Manager, InformationTechnology Services

Mr. Garnett SamuelAssistant Manager, Research

Mr. Gaston HarrisonAssistant Manager, Human Resources

Mr. RichardFrederickSecurity Operations Officer

| Central Bank of Trinidad and Tobago Annual Report 2010 xii

Mrs. DeniseRodriguez-ArchieAssistant Manager Internal Audit

Central Bank of Trinidad and Tobago Annual Report 2010 | xiii

Assistant Managers

Specialist Staff

Mr. Adrian SaundersAssistant Manager, Market Conduct, FISD

Mr. Anthony RobertsChief Actuary, FISD

Mr. Roland YorkeAssistant Manager, Banks and Non-Banks, FISD

Mrs. Jacinta SohunInsurance Advisor,FISD

Ms. KavitaSurat-SinghAdvisor, FISD

| Central Bank of Trinidad and Tobago Annual Report 2010 xiv

Organizational Structure - As at September 2010

Governor

Deputy GovernorOperations

Deputy GovernorResearchandPolicy

Inspector of Financial Institutions

Financial Services Ombudsman

Manager LegalandCorporateSecretariat Services

Senior Manager

RiskManagement

Financial Controller

Senior ManagerOperations

Chief Economistand Director of

Research

Deputy Inspector ofFinancial Institutions

Senior ManagerHumanResourceandCorporateServices

HumanResources

CorporateCommunications

ProcurementandSupportServices

Facilities

Banks&Non-Banks

CreditUnions

InsuranceandPensions

Policy&MarketConduct

ResearchDomestic Market

Operations

ReserveManagement

BankingOperations

KnowledgeandInformation

Management

InformationTechnologyServices

NationalFinancialLiteracyProgramme

PaymentsSystem

Finance andAccounting

RiskManagement

InternalAudit

Security

Central Bank of Trinidad and Tobago Annual Report 2010 | xv

Review of Activities2009-2010

| Central Bank of Trinidad and Tobago Annual Report 2010 xvi

Review of Activities2009-2010



HIGHLIGHTS

Ledbystrongperformancesinlargeemergingmarketcountries,aglobaleconomicrecoverystartedtotakeholdin2009/2010.PersistentlyhighunemploymentintheUSaswellasbankingcrisesinEuropebroughtto the fore themajor ongoing challenges for fiscalpolicyandsovereigndebtsustainability. InTrinidadand Tobago, the economic recovery has remainedweakwhilesupplyshockspushedheadlineinflationinto double digits. The highlights of the Bank’sactivitiesduringthefinancialyearincluded:

• The implementation of an accommodative monetarypolicy stance involving successive reductions of thereporatetoitslowesthistoricallevelinordertosupportanexpansionofprivatesectoractivity.

• The Bank continued to work on strengthening thelegislative and regulatory framework of the financialsystem. Adraft InsuranceBill andRegulations and adraftCreditUnionBillwerecompleted.AdraftPolicyProposalforanewOccupationalPensionsActwasalsocirculatedtostakeholders.

• The Bank made significant progress in enhancingfinancial sector supervision. During the year, twoPrudentialGuidelineswereissued;adraftConsolidatedSupervisionFrameworkwascompleted;andstresstestsforthecommercialbankswereprepared.

• In April 2010, an application for leave to wind-upCLICO Investment Bank and appoint the DepositInsurance Corporation as Liquidator was filed and iscurrentlybeforetheCourt.

• The Central Bank suspended theMotor andGeneralInsurance Company Limited (MAGIC) commencingJune15,2010andanapplicationforleavetowind-upthecompanywasfiledonSeptember27,2010.

• AFinancialStabilityModuleundertheFinancialSectorAssessment Programme (FSAP) was conducted bythe International Monetary Fund (IMF) in October/November2010.TheIMFconcludedthatthebankingsystem has shown resilience in the face of ongoingchallenges and that Trinidad and Tobago has madesignificant progress in strengthening the regulatoryframework for the insurance industry since the 2005FSAP.

• The Central Bank of Trinidad and Tobago ResearchPaperspublication,anewjournalwaslaunchedwhilenew statistical series, includinganEnergyCommodityPrice Index and a Capacity Utilization Index, weredevelopedandpublished.

• TheNationalFinancialLiteracyProgrammecompletedtheplannedexpositions(“TraintheTrainer”)forownersand operators of small and micro enterprises.

• The Bank successfully negotiated two new CollectiveAgreementsfortheperiod2009-2011withtheunions

representingitsemployees.

ECONOMICDEVELOPMENTSInternational Economic Environment

Following a turbulent 2009, the internationaleconomyreboundedin2010,supportedinlargepartbycoordinated fiscal stimuluspackagesparticularlyin the advancedeconomies. Developed countriesexperiencedweakrecoveryassluggishemploymentgrowth, accompanied by ballooning fiscal deficits,retarded the pace of economic resurgence. Theglobal recovery was driven by vibrant activity inemergingmarket anddeveloping economies,mostnotablyChinaandIndia,aswellasinLatinAmerica.

During2010,theeconomicperformanceofadvancedeconomies,particularlytheUnitedStates(US)andintheEuroArea,wastepidatbest.Joblessgrowthkeptconsumer confidence subdued and a revitalizationof private investment remained elusive. In thiscontext,therewerefearsofa“doubledip”recession,but economic indicators continued to point to asteady,albeitunspectacular,recovery.Facilitatedbya benign inflationary environment, theUS FederalReservecontinueditspolicyofquantitativeeasinginorder to provide further stimulus geared especiallyat employment creation. In contrast, the UnitedKingdom, having returned to positive economicgrowth,embarkedonaseriesofausteritymeasuresaimedatrestoringpublicdebttosustainablelevels.

Theexport-ledrecovery in theEuroareahasbeenunevenwithtwomemberstatesestimatedtocontractagainin2011.Sovereigndebtproblemsfacedbysome countries in 2010 have shaken confidenceacrossthecontinent,buttheimmediateimpactshavebeencontainedbysupportfromEurozonecountriesandtheInternationalMonetaryFund(IMF).

SeveralofthelargerLatinAmericaneconomies,such


asBrazil,ArgentinaandMexico,postedrobustgrowthin2010,basedonbroad-basedrecoveriesindomesticdemand and investment. In Central America, therecoverywasmoremoderate.TheCaribbeanregiondid not fare as well. After a sharp contraction in2009,thehopesofaquickreboundweredispelledasitbecameevidentthatanimprovementintouristarrivalsandremittanceswouldbeslow.Heavydebtburdens, lackoffiscalspaceandtheoccurrenceofseveral natural disasters forced several countries torelymoreheavilyoninternationalfinancialsupport,includingfromtheIMF,whiletakingcomprehensivemeasurestostrengthentheirfiscalpositions.

Domestic Economy

In Trinidad and Tobago, therewere tentative signsofarecoveryin2009/2010.Afterfourconsecutivequarters of decline, the economy showed positivegrowthrangingfrom0.8percentto1.9percentinthreeof the fourquartersof the financialyear, ledby the energy sector. Soft domestic and regionaldemand and a sharp slowdown in governmentprojects continued to affect non-energy activities,including manufacturing, construction, agricultureanddistribution.

The protracted declines in the non-energy sectorprecipitated substantial job losses and led to anincreaseintheunemploymentratetoanaverage5.8percentinthefirstandsecondquartersof2010from5.1percent,ayearearlier.Duringthisperiod,thenumberofpersonsemployedfellby19,200persons.Theconstructionsectorshedthemostjobs(15,400),while the transport, storage and communicationssectorlost4,200positions.

Preliminaryestimatesindicatedthatthegovernment’sfiscaldeficitmeasured0.2percentofGDPforthefiscalyearendingSeptember30,2010comparedtothe5.4percentdeficitthatwasbudgeted.Mainlyresponsible for this outturn was the higher thananticipated oil prices which boosted revenues.Overall, the fiscal impulseneeded to stimulate theeconomywassomewhatweakerthanprojected,in

partduetoaslowdownincapitalspendingfollowingthe general election ofMarch 2010. Total publicsector debt which comprises central governmentdebt and contingent liabilities (excluding bills andnotes issued for open market operations) rose to37.3percentofGDPat theendof the fiscalyearfrom33.0percentayearearlier.

Available data show that for the financial year2009/2010, the current account of the balance ofpayments recorded a surplus of US$2.1 billion,compared to US$3.9 billion in the previous year,2008/2009. Bothexportsand importswere lowerthaninthepreviousyear.The16percentdeclinein exports was largely due to a fall in the volumeofenergysectorproducts,whilenon-oilimportsfellbecause of sluggish domestic demand. Togetherwith reduction in capital outflows, a lower currentaccount surplus led toa smalleroverallbalanceofpayments surplus of US$ 151.4million comparedwithaUS$214.1millioninthe2008/2009financialyear.BytheendofSeptember2010,grossofficialreservesamountedtoUS$9,086.4million,equivalentto13.1monthsofprospectiveimports.

Monetary Policy

Overthecourseofcalendar2009,headlineinflationdeclinedprogressively,reachingalowof1.3percent(year-on-year) in December. However, subsequentsupply disruptions in the agriculture sector in thewakeofextremeweatherconditionsdroveupfoodprices,forcingheadlineinflationtopeakat16.2percentinAugust2010beforeslippingto13.2percentin September and12.5per cent inOctober. In acontinuationofitsaccommodativepolicyadoptedattheendofthe2008/2009financialyear,theCentralBank reduced the repo rate on three occasionsbetweenOctober2009andJanuary2010toalevelof 5.00 per cent. As inflation started to rise, theBankleftthepolicyrateunchangedoverthenextsixmonths.However,withwidespreadevidenceoflowdomestic business confidence, considerable sparecapacityandstablecoreinflation,theBankresumeditspolicyofreporatereductions,loweringitonfour


occasionsto3.75percentbyNovember.

Despite the reductions in the repo rate andcommercial bank lending rates, there was littlerecoveryinthedemandforcreditinanenvironmentof weak business and consumer confidence.From late 2009, the value of loans outstanding tobusinesses by the consolidated financial systemsteadily contracted, recording a 12-month declineof 6.8 per cent by September 2010. Consumerloans outstanding also declined, but at a lesspronounced rate.Meanwhile, real estatemortgageloanscontinuedtogrow,recordinganincreaseof8.4percent inSeptember2010 fromayearearlierasborrowers tookadvantageof softerpropertypricesand a drop in mortgage rates.

Weak loan demand alongwith limited investmentopportunities led to a build-up of liquidity in thefinancialsystem.Todealwiththeliquidityoverhang,the Central Bank requested commercial banksto deposit a total of $2 billion in interest-bearingaccounts at theBank inNovember2009. Half ofthisamountwasdepositedforoneyear(eventuallyrolledoverforanotheryearonmaturityinNovember2010)andthebalanceforeighteenmonths.Another“special” deposit of $1 billion was requested inNovember 2010. Central Bank’s sales of foreignexchange to themarket (US$1,495million for theyearendingSeptember2010)alsohelpedtomopupsomeliquidityfromthesystem.

In the face of these conditions, short-term interestrates continued to soften. Increased demand forgovernment short-term securities pushed the 3-month treasury bill rate down to 0.34 per cent inSeptember2010from1.85percentayearearlier.

FINANCIALSYSTEMSURVEILLANCESupervision of Licensed and Registered Financial Institutions and Pension Plans

During the year, the Central Bank continuedto upgrade and tighten the supervisory andregulatory framework in order to ensure a stableand sound financial system with the capacity to

withstand domestic and external shocks. On-siteexaminationsandoff-sitemonitoringofthebankingsector,insurancecompaniesandpensionplanswereconducted.On-siteexaminationsofeightlicensedfinancialinstitutionswithinthebankingsectorwerecompleted and focused on risk management andgovernance practices, loan underwriting and anti-money laundering/counter-terrorism financing.Compliance directions, pursuant to the FinancialInstitutionsAct(2008),wereissuedtoonenon-bankfinancialinstitution.

Overall, the banking sector remained stable, withthe aggregate capital adequacy ratio averaging justabove20percent,wellinexcessofthe8percentstatutoryminimum. However, therewas a rise innon-performing loans from 1.97 per cent to 4.65per cent drivenmainly by financing of real estateprojects. As a result, thebanking sector increasedloanlossprovisionsby47.5percentandaggregateprofitbeforetaxdeclinedonayear-on-yearbasisby14.7percent.

With respect to the insurance industry, on-siteexaminationsofthreelifecompaniesandonenon-life insurer were completed. These examinationsfocusedonrelatedpartytransactions,therobustnessof the institutions’ anti-money laundering regimesand corporate governance. Some institutionaldevelopmentsintheinsurancesectorincluded:-

• ThecancellationoftheregistrationofRoyalCaribbeanInsuranceLimitedfollowingthetransferofitsportfoliotoGuardianGeneralInsuranceLimited.

• American Life and General Insurance Company(TrinidadandTobago)Limited(ALGICO)ceasedwritinggeneral insurancebusinesseffectiveMay1,2010andthatbusinesswillberun-offovertheperiodJuly2010toJune2011.MetLifeInc.wasappointedcontrollerofthecompanyinOctober2010.

On-siteexaminationsofpensionplanswerelimitedto thecontinuationof thematic reviewsofpensionplans’ investments.

Enhancing Supervision



Considerable effort was made to refine thesupervisory frameworks governing thebankingandinsurance sectors. Some of the more importantmeasures included increased focus on credit risk;strengthened levels of cooperation with regionalandinternationalcounterparts; the issuanceof twoPrudential Guidelines (for reporting of large creditexposures and consolidated prudential reporting);thecompletionofadraftConsolidatedSupervisionFramework; and the enhancing of supervisoryexpertise.

The Central Bank continued to contribute to thedevelopment of robust anti-money laundering(AML) and combating of financing of terrorism(CFT) frameworks forTrinidadandTobago throughits representation on the National AML/CFTCommitteeandatCaribbeanFinancialActionTaskForce (CFATF)meetings. Inaddition, theFinancialObligations Regulations which named the CentralBankasaSupervisoryAuthority for the institutionsthatitregulateswereputintoeffectinJanuary2010.Other Supervisory Authorities include the TrinidadandTobagoSecuritiesandExchangeCommissionforsecurities companies and the Financial IntelligenceUnit for listed businesses (for example, jewelers,real estate, casinos). The Financial IntelligenceUnit Actwas passed inOctober 2009 and its aimistheimplementationoftheanti-moneylaunderingpoliciesoftheFinancialActionTaskForce.

Enforcement Actions

CLICOInvestmentBank(CIB),ColonialLifeInsuranceCompany Limited (CLICO) and British American(BA), remained under the control of the CentralBankduringthefinancialyear.InfurtheranceofitsmandateunderSection44DoftheCentralBankAct,theBankworkedwithCLICOtoeffectareductionofoperatingcostsandformulateastrategicplan.TheBank also collaboratedwith theGovernment on anumber of options for restructuring the companyandmanagingpolicy-holderexpectations,aimedatmaintainingfinancialstability.IntheGovernment’s2010/11budget,itwasannouncedthattherewouldbe a restructuring plan that would separate the

traditional insurance liabilities from the short-terminvestment products. With respect to the latter,all investors would be paid up to a threshold ofTT$75,000 with the remaining claim on principalrestructuredover20years.Paymentsunderthisplanareexpectedtobegininearly2011.InApril2010,anapplicationforleavetowind-upCIBandappointtheDepositInsuranceCorporationasLiquidatorwasfiled.ThispetitioniscurrentlybeforetheCourt.Inotherdevelopments,theBoardoftheCentralBankapprovedthesuspensionoftheMotorandGeneralInsuranceCompanyLimited(MAGIC)commencingJune15,2010;anapplicationforleavetowind-upthecompanywasfiledonSeptember27,2010.

Strengthening the Legislative and Regulatory Framework

The Central Bank continued to collaborate withthevarious stakeholders in thebanking, insurance,pensions, and credit union sectors to develop theappropriate legislative, regulatory and supervisoryframeworks.Thekeymilestonesachievedincluded:(i) the completion of the draft Insurance Bill andRegulations, including the draft Capital AdequacyRegulationsandCaribbeanPolicyPremiumMethodforvaluationofinsuranceliabilities;(ii)thedraftingofaCreditUnionBill,whichwassubmittedtotheOfficeof theChief ParliamentaryCounsel for review; (iii)thecirculationofadraftPolicyProposalDocumentfor a new Occupational Pensions Act; (iv) thecompletionofthedraftRegulationsforthePaymentofSupervisoryFeesandChargesbyregulatedfinancialinstitutionsandpersons,whichhavebeensubmittedforMinisterialapproval;(v)thecompletionofadraftConsolidated Supervision Framework to effect theconsolidated supervision of financial groups andfinancialholdingcompanies;and(vi)thecompletionof a draft National Crisis Management Plan anddraftRegionalCrisisManagementPolicytoinformaRegionalCrisisManagementPlan.


Financial Sector Assessment Programme 2010

A Financial Stability Module (FSM) under theFinancialSectorAssessmentProgramme(FSAP)wasconductedbyanIMFmissioninOctober/November2010. The mission assessed the broader risks andvulnerabilities in the financial system of Trinidadand Tobago. They concluded that the bankingsystemhasshownresilienceinthefaceoftheglobalfinancial crisis, the slowdownof economic activity,anddifficultiesassociatedwithCLICO.Thebankingsystem was judged to be well capitalized withconservative lending practices. In addition, stresstests showed thateven in the faceofdeteriorationinmacroeconomicconditions, thebankswouldbeabletoabsorbtheassociatedprovisioningcostsdueto their ample capital buffer. Areas thatwarrantedfurtherenhancementwere the full implementationofconsolidatedsupervisionandtheintroductionofstandardsforoperational,liquidityandinterestraterisks.

With respect to the insurance sector, the IMFconcluded that Trinidad and Tobago has madeconsiderableprogressinstrengtheningtheregulatoryframework since the 2005 FSAP. The IMF alsoacknowledged that thenew InsuranceBill drafted,following extensive consultationswith the industry,would serve to modernize the legislation for thesector.TheIMFstatedthatthelargerlifeandgeneralinsurancecompaniesweregenerallyprofitableandadequately capitalized. As a result they are betterpositioned to adapt to the changing regulatoryenvironment.

The IMF indicated in their report that “TrinidadandTobagohastakenactiontostrengthenitscrisispreparedness framework in recent years and hasadopted some of the post-financial crisis reforminitiativesunderdiscussionininternationalbodies.”

PAYMENTSSYSTEMOVERSIGHT

InaccordancewiththerequirementsoftheFinancialInstitution Act, 2008 (FIA), the two major retailpayment systems, LINX, operated by InfoLinkServicesLimitedandtheAutomatedClearingHouse

(Transach), operated by the Trinidad and TobagoInterbank Payment System Limited (TTIPS), madeapplications to the Bank for Interbank PaymentSystemOperator Licences. During the year, thesetwo systems were issued with interim licencespendingthecompletionoftheevaluationprocess.

TheBankcompletedaninitialoversightassessmentof all Systemically Important Payment Systems(SIPS)andprovidedgeneral recommendationsandfeedbackontheircompliancewithinternationalbestpractices.

The volume of large value transactions beingprocessed through the RTGS continued to growthoughata slower rate than thepreviousyear. In2009/2010, transaction volume rose by 2.6 percentcomparedwithan increaseof8.6percent in2008/2009. This year’s movement neverthelessrepresented a 3 per cent decline in the value ofthese payments; therefore the average value of atransaction settled over the RTGS declined. In itseffort to improve the efficiency of the nationalpayment system, the Bank continued efforts todissuadeuseof large-value cheques. Thenumberoflargevaluechequesdecreasedonlymarginallyintheyear;however,withtheimminentrevisiontotheExchequer andAudit Actwhich stipulates that theGovernment must make payment by cheque, thisvolumeisexpectedtoshowasubstantialdecline.

There was also a general increase in the use ofelectronic payment options (ACH, Debit andCreditcard)asopposedtopaper-basedinstruments(cheques) for retail transactions. In 2009/2010,electronic payments accounted for 77 per cent ofthevolumeofretailnon-cashpaymentsclearedandsettledontheinterbankmarket,anincreaseof7percentover2008/2009.

BANKINGOPERATIONSCurrency in Circulation

Currency in circulation increased by 9.7 per centto$4,729millionoverfiscalyear2009/2010.This



isequivalent to5.2percentofGDP,compared to3.2 per cent a year earlier. The customary trendwhereby the demand for currency peaks duringthe month of December, declines sharply in thefollowingmonth,andthengrowsmoderatelytoyearend,againcontinued.(SeeChartI).

Duringtheyear,theBankissuedatotalof65millionnewbanknotes,2percentmorethaninthepreviousyear. This growth was largely due to the higherdemand for $100 notes to service ATMs. Therewasalsoanincreaseof3percentinthevolumeofnotesreissuedfromtheamountinthepreviousyear.The$1denominationcontinuedtoaccountforthelargestshare(47percent)ofallnotesissued,whilethe1centremainedthemostwidelycirculatedcoin,representingapproximately51percentofthetotalvolumeofcoinsincirculation.ChartsIIandIIIshowtherelativeshareofeachdenominationofnotesandcoins, respectively, in circulation as at the end ofSeptember 2010.

Clearing and Settlement Systems

The Bank continued to maintain a ChequeClearinghouse facility in conjunction with thecommercialbanks,andaRealTimeGrossSettlement(RTGS) System, Safe-tt, for large value and time-criticalpayments.

Cheques

In 2009/2010, cheques cleared through theClearinghouse facility decreasedby14per cent intermsofvolumebutonly2percentinvalueterms.The cheques clearedon theBank itself during theyearalsodecreased,fallingby7.2percentinvolumetermsand15percentintermsofvalue.ThiswasincontrasttothepreviousyearwhenthevolumesandvaluesofchequesdrawnontheBankhadrisenby6percentand10percent,respectively.

Electronic Payments

The volumeof transactions settledover theRTGS,Safe-tt,continuedtogrow,thoughmoreslowlythan

CHART ICURRENCY IN CIRCULATION

0

1,000

2,000

3,000

4,000

5,000

6,000

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

TT$

Mill

ions

2005/2006

2006/2007

2007/2008

2008/2009

2009/2010



CHART IIVOLUME OF NOTES IN CIRCULATIONBY DENOMINATION 2009/2010

CHART IIIVOLUME OF COINS IN CIRCULATIONBY DENOMINATION 2009/2010

47%

8%

6%11%

28%

$1 $5 $10 $20 $50 $100

51%

15%

17%

17%

0.36%

1¢ 5¢ 10¢ 25¢ 50¢ $1


inthepreviousyear.Thetotalvolumeoftransactions,at 47,043 in the year, represented an increase of2.5percentover theamount in thepreviousyear(seeChartIV).However,invalueterms,therewasadecreaseof3percent fromthepreviousyearto$395billion.

Financial Institutions Deposits

The statutory reserve requirement for commercialbanksandnon-bankfinancial institutionsremainedunchangedat17percentand9percent,respectively,during2009/2010.However,duetothechangesindepositliabilities,theaverageweeklyamountheldasstatutoryreservesbythecommercialbanksincreasedby1.7percentto$47million,whilethatofthenon-banksdeclinedby50.5percentto$2.2million.

The commercial banks also continued to hold asecondary reserve requirement of 2 per cent ofdeposit liabilities which was remunerated at 350basis points below the ‘repo’ rate. In order tocontain theexcess liquidity in the financial system,theBankalsoissuedathree-monthbillwithafacevalue$500millioninNovember2009andoffered

several short term special deposits to commercialbanksasfollows:

• A6-month$1.5billiondepositwithmaturityonDecember28,2010

•A1-year$1billiondepositwithmaturityon November4,2010•An18-month$1billiondepositwithmaturityonMay3,2011

Notwithstandingtheseinitiatives,thefinancialsystemremained very liquid and throughout the periodcommercialbanksheldexcessreservesattheBank.

Downtown Owners & Merchant Association (DOMA) Facility

The DOMA facility, which was established by theGovernment in 1990 to provide a subsidy for theinterestonloanstakenoutbymerchantstorebuildoperationsaftertheattemptedcoup,cametoanendinfinancialyear2009/2010.Thelastinterestsubsidyof$1,343.53wasmadeinDecember2009.

CHART IVRTGS ANNUAL VOLUMES

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2005/2006 2006/2007 2007/2008 2008/2009 2009/2010



Government and Government Guaranteed Securities

TheBankcontinuedtoissuesecuritiesonbehalfofGovernmentandvariousstateagenciesaswellastoactasRegistrarandPayingAgent.

Treasury Bills and Notes

Duringtheyear,theBankmaintainedresponsibilityfor the issuance of all Treasury Bills and TreasuryNotes,mostofwhichwereutilizedforopenmarketoperations. The legal ceiling for issuance of thesesecurities had been reached inMay 2008 initiallyand the outstanding amounts remained relativelyunchangedat$13.9billionforTreasuryBillsand$5billion forTreasuryNotesat theendofSeptember2010,asmaturingissueswererolledover.

Bonds

Several bonds were issued on behalf of theGovernment and State Agencies during the year.Alloftheformerwereissuedtoprovidefundingtotwoinsurancecompanies,CLICO/BritishAmerican,inthecontextofaMemorandumofUnderstandingdrawnupbetweentheparentcompanyCLFinancialLimitedwhichranintofinancialdifficulties,andtheGovernment of Trinidad and Tobago.

•October 16, 2009 -GORTT$231.5million11-year 6.40 per cent maturing on June 30, 2020(reopening of GORTT $600 million which wasissuedonJune30,2009).

•October 30, 2009-EducationFacilitiesCompanyLimited(EFCL)$400million7-year5.35percentmaturingonOctober30,2016

• December 4, 2009 - Trinidad and Tobago Mortgage Finance Limited (TTMF) Tranche B$320million 5-year 6.00 per centmaturing onDecember4,2014

• February 4, 2010 -GORTT$3.1billionFixedRate(3Series)Bond:

• $1.1 billion, 17-year, 6.6 per cent,maturing onFebruary4,2027



• February9,2010-GORTT$600million,15-year,6.50percentmaturingonFebruary9,2025

• March 19, 2010 - National Insurance andPropertyDevelopmentCompany(NIPDEC)$500million18-year6.25percentmaturingonMarch19,2028

• April 20,2010 - GORTT $794 million 13-year5.95percentmaturingonApril20,2023

• September 2, 2010 - National Insurance andProperty Development Company (NIPDEC)$360million18-year6.10percentmaturingonSeptember2,2028

During the financial year, the Bank made interestpaymentsof$789.2milliononCentralGovernmentbonds issued under the Development Loans Act1964 and its amendments and $0.18 million onbonds issued under the Public Sector (Arrears ofEmoluments) Amendment Act of 1998 as well asoutstanding principal payments of $0.13 milliononthe10-year8percentTaxFreeBondissued inDecember 1995. The Bank also made principalandinterestpaymentsof$52.0millionand$379.2million,respectively,onStateAgenciesbonds.

CARICOM MULTILATERAL CLEARING FACILITY (CMCF)

TheBankcontinuedtobetheAgentfortheCMCFwhichremaineddormantandfocusedsolelyontherepaymentof theoutstandingdebtbyGuyana.Nopayments were received during the year and theoutstandingbalanceowedbyGuyanatotheCMCFremained atUS$31.1million as at September 30,2010pendingtheeffortsbyCARICOMGovernorstofindamodality forprovidingdebtrelief toGuyanaundertheEnhancedHeavilyIndebtedPoorCountries(E-HIPC)initiative.


REGIONAL LOANS

Bank of Guyana Bilateral Debt

TheBankofGuyanadebttoTrinidadandTobagoisaconsolidationof loansowedtotheBankandtheGovernmentthrough:-

1.TheCARICOMOilFacility(1981-1982)2.TheBalanceofPaymentsSupportFacility (1974-1975)3.BilateralSettlementsLoan(1985)

This consolidateddebtwas rescheduledunder theE-HIPCInitiativeinOctober2005andthereducedbalanceofUS$55millionisbeingrepaidonasemi-annual basis. During this financial year, US$4.04millionwasreceivedanddistributedasfollows:

GovernmentoftheRepublicofTrinidadandTobago-US$0.82M

CentralBankofTrinidadandTobago -US$3.22M

ThebalanceoutstandingonthisloanasatSeptember30,2010wasUS$47.8million.

BancoLatinamericanoDeExportacionesS.A.(BLADEX)

ThetotalamountofBLADEXsharesheldbytheBankremainedunchangedat160,626.50.

FOREIGNEXCHANGEMARKETOPERATIONS

The weak recovery in both the more developedeconomies and the domestic market resulted incontinuingtightnessintheforeignexchangemarket.Inflowsofforeignexchangetoauthorizeddealersinthedomesticmarketinthefinancialyear2009/2010remained relatively unchanged at US$4.0 billioncompared with US$4.1 billion in the previousfinancialyear.Receiptsfromtheenergysectorgrewby17percentwhilethosefromthenon-energysectorcontinued to decline. At the same time, demand

for foreign exchange remained very strong withtotalsalesofUS$5.5billioncomparedwithUS$5.8billionrecordedayearearlier.Thecustomarytrend,wherebyhigherpurchases (and thereforesales)areevidentattheendofeachquarterduetotheinflowsfor tax payments, again continued (see Chart V).TheCentralBankintervenedinthemarketregularlythroughouttheyear,sellingatotalofUS$1.5billionto the authorized dealers. In the context of thesetight conditions, over the year the buying andselling rates for the TT dollar depreciated by 0.31per cent and 0.42 per cent respectively to reachTT$6.3163=US$1 (buying) and TT$6.3765=US$1(selling)atSeptember30,2010.

FOREIGNRESERVESMANAGEMENT

TheCentralBankcontinuedtomanagetheforeigncurrency reserves in accordance with the currentpoliciesandguidelinesestablishedbytheBoard.Thebroadoperatingframeworkwaslargelyunchanged,withasignificantportionof thereserves managedinternally,withafocusonliquidityandmaintenanceofvalue.Externalfundmanagerswereresponsiblefor investingapartof thereserveswith thegoalofhigherreturnswithinsetrisklimits.

Theforeigncurrencyreserves(excludinggold,SDRandGovernmentholdings)grewtoUS$8.6billionattheendofSeptember2010 fromUS$8.4billionayearearlier. Receipts fromtheoilandgassector-themajorinflow-wereupslightlyfromthepreviousyear, given some improvement in oil prices andrelativestabilityingasprices.

Somestabilityreturnedtotheinternationalfinancialmarketsduringtheyear,comparedwiththeturmoilof theprevious year, andbenchmark interest rateswere maintained at historically low levels in thedevelopedeconomies.Therewassomeslowinginthedeclineinfixedincomeyields,andthereforeincapitalgainsonfixedincomesecurities.Accordingly,the overall return of 2.36 per cent on the foreignreservesforthefinancialyear2009/2010waslowerthanthe4.25percentearnedin2008/2009.


RESEARCH,INFORMATIONANDKNOWLEDGESERVICES

Withrespecttopublicationofeconomicinformation,the Research Department developed several newstatistical series including an Energy CommodityPriceIndexinconsultationwiththeEnergyChamberandanIndexofCapacityUtilization.Additionally,a project to spearhead Trinidad and Tobago’ssubscription to the International Monetary Fund’sSpecial Data Dissemination Standard (SDDS) was startedincollaborationwiththeMinistryofFinanceandtheCentralStatisticalOffice.

The Department’s activities were heavilyconcentrated on policy support. A medium-termeconomic framework and detailed projections ofCentralBank’sforeignexchangeflowswerepreparedandupdatedduring2010.These,aswellasstudieson the changing currency compositionof reserves,guidelines on mortgage rates and the impact ofchanges in theminimumwageoncompetitivenesswere discussed in the Monetary Policy SupportCommittee. The Department was also closelyinvolvedinfinancialstabilityissues,notablythestresstestingofthecommercialbanks.

Usingaprojectteamapproachtotechnicalresearch,the economists worked on research papers whichsoughttodirectlyaddresssomeofthecontemporarymonetary policy challenges. Subject mattersincludedinvestigationsintothevolatilityoftheRetailPrices Indexand the sensitivityof remittance flowsin the Caribbean to the global financial crisis. Anewannualpublication, titledThe Central Bank of Trinidad and Tobago Research Papers,waslaunchedin September 2010 and included output from thevisiting scholar programme. In terms of broaderoutreach, economists made presentations toexternalaudiencesincluding:theConferenceontheEconomyattheUniversityoftheWestIndies,severalbanks, theEmployers’ConsultativeAssociationandstafffromvisitingeducationalinstitutions.

With respect to knowledge services, the phasedimplementation of the lifecycle system of recordsmanagement in the Bank continued. The webmoduleoftherecordsmanagementapplicationwassuccessfullyupgradedandstaff received training intheuseof theonlinesystemtoprocess records fortransfertotheRecordsCentre.TheBankalsoenteredintoavendorhostingarrangementfortheLibrary’sweb application.

CHART VPURCHASE AND SALES OF FOREIGN EXCHANGEOCTOBER 2008 - SEPTEMBER 2010

Purchases Sales

0

100

200

300

400

500

600

700

US$

Mill

ions



The Document Management (DM) applicationwas successfully upgraded and members of staffwere provided with one-on-one training on thenew features. The Knowledge and InformationManagement (KIM) Department conductedinterviewswithfiveretirees,transcribingthecontentintotheDMaspartof theongoingprogrammeforcapturingvariousaspectsoftheBank’shistory.

Following a review of the Exchange Controldocuments, some records were processed andstored,anddestructionofthosetaggedfordisposalbegan.

NATIONALFINANCIALLITERACYPROGRAMME

In2010,TheNationalFinancialLiteracyProgramme(NFLP)continuedtobroadenitsinterventions.Thenumber of participating primary schools expandedto280.Sessionswerealsoheldatseveralsecondaryschools and tertiary institutions. Close to 50secondary school teachers were trained through“Train the Trainer” workshops. A survey of theimpact of the programme at the primary schoollevelwasalso initiatedat26schools. Asecondaryschoolchallengecompetitionwashostedaswellasasecondaryschoolsquiz.

Thefinaltwooffiveplannedexpositionswereheldforowners and operators of small and micro enterprises. FundedinpartbytheMultilateralInvestmentFund(MIF) of the Inter-American Development Bank(IDB),NFLPdeliveredsessionsto152personsfrom

15organizationswhichdirectlyinterfacewithSMEs.Otheroutreachsessionstargetedcommunitygroups,employees,retireesandparticipantsinprogrammesoffered by the Ministry of the People and SocialDevelopmentandtheMinistryofNationalSecurity.Eight“publictown”meetingswereheld,wheretheemphasis was on personal financial managementand retirement planning.

TheworkoftheNFLPwasrecognizedandhighlightedboth regionallyand internationally. TheNFLPwasfeatured on the website of the Organization forEconomic Cooperation and Development (OECD)followingparticipationinanOECDglobalconference.Furthermore, NFLP assisted in the developmentof the Jamaican Financial Literacy Programme andplayedacentralroleinthelaunchoftheCaribbeanFinancialLiteracywebsite“FinanciallyFit”.

OUTREACHPROGRAMMES

Dr. Eric Williams Memorial Lecture

The24thannualDr.EricWilliamsMemorialLecturewasheldonFriday July9,2010at the refurbishedCentralBankAuditorium.ThefeaturespeakerwasProfessorE.NigelHarris,theViceChancelloroftheUniversityoftheWestIndies.ProfessorHarrisspokeon the theme:Haiti, its many Crises and its Place in the Caribbean. Thisyear’s lecturewastimely inlightoftheinternationalattentionfocusedonHaitiin the aftermath of the catastrophic earthquakeexperiencedearlierintheyear.

Students compete in the National Financial Literacy Programme Secondary School Challenge Competition

Professor E. Nigel Harris


Museum Outreach and Upgrade

FollowingdiscussionswiththeTourismDevelopmentCompany (TDC) and local tour guides, theMoneyMuseumwas added as an attraction on local tourguideschedules.Severaloutreachprogrammes

wereconductedtowidenthescopeofvisitorstothemuseum. The vast majority of the 2,256 personswhovisitedthemuseumduringtheyearwereschoolchildren, including special groups such as the St.Mary’sHome.Planningforafairlyextensivemuseumupgrade, the first since the launchof themuseumin2004,commencedduringtheyear.Aconsultantwascontracted tocatalogue,photograph,conserveandcleanartifactsandtoprovidetraininginobjecthandling,environmentmonitoringandpreventativeconservation.

Youth Mentorship

TheannualVacationInternshipProgramme(VIP),initsseventhyear,washeldduringJune-August2010.Nineteeninternsparticipatedandwereexposedtospecificcoursesaimedatimpartinglifeskills.SessionscoveredareassuchasPersonalFinancialPlanning,

Office Commandments, Healthy WorkplaceCommunicationandCareerManagementandeachinternwasassignedamentorfromtheBank’sstaff.

TheDeLaRuescholarship,alsoinitsseventhyear,wasawardedtoMs.PreeyaMohan.

Charitable Work

TheBankcontinueditsfocusonsupportingtwomaincharities – the internally-based “We Care” charityandtheUnitedWayofTrinidadandTobago.“WeCare”wasabletoimpact13homes/schoolsandover200 families.


Children from the St. Mary’s Home get a tour of the Money Museum Vacation Interns 2010

Vacation Interns in a training session with HR

Central Bank We Care Volunteers


Sports and Cultural Club

The Sports and Cultural Club changed leadershipduring thisyear. Inattempting toencouragemoreactive member participation, the Club launched,amongother things,aBookClub,aNewsletter“InTouch”, quarterly feedback meetings, the BiggestLosercompetitionandadeepseafishingadventure.The Club successfully managed the Central BankPremierAll InclusiveParty,partproceedsofwhichwenttowardsthe“WeCare”charity.TheClubalsoco-organized the 8th Central Bank Intra-RegionalGameswhichwasheldinGuyanawheretheBankplacedthird.

Retirees Club

In October 2010, the Bank hosted the annualoutreach session for retirees. The session wasfacilitatedbytheBank’sEmployee/RetireeAssistanceProvideranditfocusedon“takingcareofself”withlecturescoveringphysicalandmentalhealth.

HUMANRESOURCES

In 2010, SeniorManagement took the decision torationalize the Bank’s manpower. In this regard,a Bank-wide rationalization of manpower needsfor each Department was undertaken. As faras practicable, staffing needs were filled throughinternal recruitments, with external filling ofvacanciesrequiringtheexpressedapprovalofSeniorManagement. As a result, external recruitmentwas generally restricted to positions identified asspecialist innatureandthoseconsideredcritical totheoperationsoftheBank.

In this context, there was a marginal decline (1.4per cent) in the Bank’s staff complement to 479employees in2010. Twentyemployees joined theBank,offsetbyacomparablenumberofseparations.

Staff working together at theretirees outreach session

Central Bank Netball Team

Central Bank Fusion Team


Of the separations, five employees with overtwenty-fiveyearsserviceoptedforearlyretirement,includingthreemembersoftheManagementteam-Mrs. JenniferGreaves,SeniorManager, IT&NFLP;Mr. Charles De Silva, Manager, Policy & Support,FISD; and Mr. Victor Maloney, Assistant Manager,CorporateCommunications.

Despite reduced budgetary provisions for trainingand development, the development needs of staffremained a major priority. To this end, 47 percent of employees, comprising mainly managerialand Bargaining Unit 3 staff, attended 118 localand overseas training courses, conferences andmeetings. Additionally, the Human ResourceDepartment organized several in-house trainingmodules,includingRetirementPreparation,PrudentFinancial Planning and LeadershipDevelopment.Trainingwasalsogearedtowardssensitizingstafftotherequirementsassociatedwith theOccupationalSafetyandHealthAct (OSHA).Meanwhile, there-launch of the Employee Suggestion Programme inApril2010hasencouragedstafftoshareideasaimedat improvingtheefficiencyandeffectivenessoftheBank’soperations.

Employee and Industrial Relations

TheBanksuccessfullynegotiatedtwonewCollectiveAgreements for the period 2009-2011 with therepresentativeunionsforBargainingUnits1and3.Theseweredoneinacordialmanner,inapeacefulindustrial relations climate. Regular non-crisismeetingsbetweentheBank’sManagementandtheworkers’ representativescontinued toassist inpre-emptingnegativeoutcomesofemployeeinfractionsofrulesandregulationsoftheBank.Criticalsupportand/or advice on issues of discipline assistedDepartmentsindealingwithseveralstaffingissues.

RISKMANAGEMENT

The risk management capability of the Bank wasstrengthened with the implementation of theGovernance,Risk,Compliance(GRC)infrastructure.The Central Bank, in collaboration with theBankers’AssociationofTrinidadandTobagoandtheOffice of Disaster Preparedness and Management(ODPM),continuedtoassistinthedevelopmentofthefinancial sector’s mitigation and response strategies. Amajor thrust in this regardwas thedevelopmentand acceptance of a Business Continuity Planning(BCP)FinancialFramework,thatcallsforthecreationof a BCP Financial Sub-Committee of the ODPMand aWorking Committee consisting of membersfromeachofthecommercialbanksandtherelevantregulatorybodies.Theworkofthesecommitteesiscriticaltoensuringthatproperresponseandrecoverystrategiesareinplaceacrossthesector,thatbusinesscontinuity plans are consistent, compatible and ofanagreedstandardandthatduringanyunforeseendisruption,effectivecommunicationandrestorationstrategies are in place.




Financial Statements2009-2010


Financial Statement2009-2010


RepoRt of the

AuditoR GeneRAl

Financial Statements

RepoRt of the

AuditoR GeneRAl


Consolidated Statement of Financial PositionAS AT 30 SEPTEMBER 2010 (Expressed in Trinidad & Tobago Dollars)

GOvERNOR DEPUTY GOvERNOR

Notes Sept 2010$’000

Restated Sept 2009

$’000

ASSETS Foreign currency assetsreigncurrencyassetForeigncurrencycashandcashequivalentsForeigncurrencyinvestmentsForeign receivablesSubscriptionstointernationalfinancialinstitutionsInternationalMonetaryFund-HoldingsofSpecialDrawingRights

Local currency assetsLocalcurrencycashandcashequivalentsLocalcurrencyinvestmentsPensionassetsAccountsreceivableandprepaidexpensesOtherassetsProperty,plantandequipment

TOTAL ASSETS

LIABILITIESForeign currency liabilitiesDemand liabilities - foreignInternationalMonetaryFund-AllocationofSpecialDrawingRightsAccountsPayable

Local currency liabilitiesDemand liabilities - localAccountspayableProvisionfortransferofsurplustogovernmentProvisions

CAPITAL AND RESERvES

CapitalGeneral ReserveRetainedEarnings

TOTAL LIABILITIES, CAPITAL AND RESERvES

4589

45,6781011

12

13

1213

14

23

25,287,36937,990,892173,220

3,299,906 2,609,90069,361,287

943,077305,736239,902

2,063,928272,592233,544

4,058,779 73,420,066

83,168

3,042,0888,599,215

11,724,471

28,946,41925,468,571478,6055,404,545

60,298,140

800,000588,0499,406

1,397,455

73,420,066

28,083,65834,526,330160,734122,682

2,678,803 65,572,207

693,4252,045,591238,2502,112,183308,123251,973

5,649,545 71,221,752

48,807

3,122,3928,541,943

11,713,142

29,653,84525,578,493920,1712,011,785

58,164,294

800,000534,8719,445

1,344,316

71,221,752


Consolidated Statement of Comprehensive IncomeFOR THE YEAR ENDED 30 SEPTEMBER 2010 (Expressed in Trinidad & Tobago Dollars)


Restated Sept 2009

$’000

Income from foreign currency assetsInterestincomeInterestexpense

Gain/(Loss)fromcurrencytranslations

Gainfromfairvaluechanges(Loss)fromfairvaluechanges

Income from local currency assetsInterestincomeRental incomeOtherincome

Decrease in provisions

Total income

Operating expensesPrintingandmintingSalaries and related expensesInterestpaidDirectors’ feesDepreciationOtheroperatingexpensesTotal operating expenses

Net surplus for the year before taxationBusinesLevyexpense

Net surplus after taxation

Total comprehensive income for the period

15

16

16

17

18

1,051,525(26,195)1,025,330

(1,283)

406,701(56,091)350,610

1,374,657

73,9501,364

222,467297,781

141,010

1,813,448

55,828116,468349,557

94035,08397,800

655,676

1,157,7717

1,157,764

1,157,764

750,435(29,047)721,388

(104,430)

248,144(143,895)104,249

721,207

286,5831,58723,459

311,629

128,544

1,161,380

52,864157,656248,712

80635,278134,313629,629

531,7517

531,744

531,744


Consolidated Statement of Changes in EquityFOR THE YEAR ENDED 30 SEPTEMBER 2010 (Expressed in Trinidad & Tobago Dollars)

Balance as at 1 October 2008

NetsurplusaftertaxationTransferofsurplustoConsolidatedFundTransfer to general reserveTransfertopaid-upcapital

Balance as at 30 September 2009

Balance as at 1 October 2009

NetsurplusaftertaxationTransferofsurplustoConsolidatedFundTransfer to general reserve


761,874

---

38,126

800,000

800,000

---

800,000

428,394

--

106,477-

534,871

534,871

--

53,178

588,049

9,180

1,157,764 (1,012,896) (106,477) (38,126)

9,445

9,445

531,744 (478,605) (53,178) 9,406

1,199,448

1,157,764 (1,012,896)

- -

1,344,316

1,344,316

531,744 (478,605)

- 1,397,455

Issued andFully

Paid Up Capital$’000

GeneralReserves

$’000

RetainedEarnings

$’000

Total

$’000


Consolidated Statement of Cash FlowsFOR THE YEAR ENDED 30 SEPTEMBER 2010 (Expressed in Trinidad & Tobago Dollars)


Restated Sept 2009

$’000

Cash flows from operating activitiesNetsurplusfortheyearAdjustmentsfor: Depreciation Netloss/(gain)ondisposaloffixedassets Interestincome Interestexpense Dividend income Provisions RevaluationofArtwork Buildingfund Gold reserves Foreigncurrencydifferencesinmonetaryassets&liabilitiesCash outflows before changes in operating assets and liabilitiesChanges in operating assets and liabilities Decrease/(Increase)inaccountsreceivable&prepaidexpenses Decrease/(Increase)inotherassets (Increase)inpensionasset (Decrease)/IncreaseinaccountspayableandotherliabilitiesNet cash flow (used in)/from operations

Cash flows from investing activities Purchaseofproperty,plantandequipment Proceedsfromsaleofproperty,plantandequipment Netpurchaseofinvestments/proceedsfromsaleofinvestments Netrepaymentofloansandadvances Interestreceived Dividends received Interestpaid (Decrease)/IncreaseinInternationalMonetaryFundHoldingsof SpecialDrawingRights PaymenttoConsolidatedFundNet cash flow from/(used in) investing activities

Cash flows from financing activities Purchaseofsharesininternationalfinancialinstitutions LeasepaymentNet cash flow (used in)/from financing activities

Net decrease in cash and cash equivalentsCash and cash equivalents, beginning of yearCash and cash equivalents, end of year

4

531,751

35,278 11 (1,007,971) 248,711 (3,552) (128,544) (2,411) - 116,855 61,768 (148,104)

77,747 24,741 (1,652) (694,735) (742,003)

(14,558) 110 (251,251) 1,869,542 965,675 3,552 (279,697)

(11,402) (920,171) 1,361,800

(3,177,224) 10,790 (3,166,434)

(2,546,637) 28,777,083 26,230,446

1,157,771

35,083 (279) (1,099,279) 349,557 (3,552) (141,010) - (175,656) 57,034 (201,625) (21,956)

(1,969,524) (36,379) (24,115) 5,804,352 3,752,378

(34,434) 536 (5,942,795) (1,839,902) 1,151,554 3,552 (336,550)

9,484 (1,078,295) (8,066,850)

(1,221) 10,579 9,358

(4,305,114) 33,082,197 28,777,083


Notes to Consolidated Financial StatementsFOR THE YEAR ENDED 30 SEPTEMBER 2010 (Expressed in Trinidad & Tobago Dollars)

1. Incorporation & principal activities The Central Bank of Trinidad and Tobago (theBank)wasestablishedasacorporatebodyin1964undertheCentralBankAct(Chapter79:02).TheprincipalofficeislocatedatEricWilliamsPlaza,Independence Square, Port of Spain, Trinidadand Tobago.

TheCentral BankAct entrusts the Bankwith arange of responsibilities, among which is thepromotion of monetary, credit and exchangeconditionsmost favourable to thedevelopmentoftheeconomyofTrinidadandTobago.

The Bank has the exclusive right to issue andredeemcurrencynotesandcoinsinTrinidadandTobago,and isempowered, interalia, toactasbanker for,and rendereconomic, financialandmonetaryadvicetotheGovernmentofTrinidadand Tobago and open accounts for and acceptdeposits from the Central Government, LocalGovernment,statutorybodies,commercialbanksand other financial institutions. It also has theauthority to make advances, purchase and selldiscounted bills of exchange and promissorynotesonbehalfoftheaboveinstitutions,andtopurchaseandsellforeigncurrenciesandsecuritiesofotherGovernmentsandinternationalfinancialinstitutions.

The Bank is also responsible for protecting theexternal value of the currency, managing thecountry’s external reserves and taking steps topreservefinancialstability.

2. Significant accounting policies Theprincipalaccountingpoliciesappliedinthepreparation of the Financial Statements are setoutbelow.Thesepolicieshavebeenappliedtoalloftheyearspresented.

a. Basis of preparation These Financial Statements have been

preparedon thehistorical cost basis except

forfinancialassetsandliabilitieswherethefairvalueandamortisedcostbasisofaccountingare adopted.

These Financial Statements have beenpreparedinaccordancewiththeCentralBankAct (Chapter79:02). TheBankhaschosento adopt the recognition andmeasurementrequirements of the International FinancialReporting Standards together with thepresentation and disclosure framework inthepreparationoftheseFinancialStatementsinsofarastheBankconsidersitappropriatetodosohavingregardtoitsfunctions.

These Financial Statements depart from the

International Financial Reporting StandardsbecauseofthenatureoftheBank,includingits role in the development of the financialinfrastructure of the country as well as theregulations by which it is governed. TheInternational Financial Reporting Standardswhichhavenotbeenadoptedare:

•IAS21–TheEffectofChangesinForeignExchangeRatesrequiresthatallunrealisedgainsandlossesbeaccountedforthroughthe Income Statement. The Central BankActrequiresthattheprofitfortheyearbe transferred to theConsolidatedFundbut does not distinguish betweenrealised and unrealised profits. As suchtheBankaccountsforallunrealisedgainsandlossesonChangesinExchangeRatesthroughaProvisionforForeignCurrencyExchangeRateReserves.

•IAS37–Provisions,ContingentLiabilities

andContingentAssetsdefinesProvisionsas liabilities of uncertain timing oramount.TheCentralBankActimposesspecific limitations on the scope of theBank tocreate reservesand soprepareforcertainunforeseenevents.TheBankhas therefore established Provisions


for specific types of transactions andobligations, which would more typicallybe reflected as various types of reservesundertheIFRS.

• IAS39–FinancialInstruments:Recognitionand Measurement requires that wherean asset is classified as available for sale, the gains or losses on transactionsshould be recognised directly in Capitaland Reserves through the Statement ofChangesinEquity.TheCentralBankActimposes specific limitation on the scopeoftheBanktocreatereserves.ThereforetheBankrecognisesitsunrealizedgainsorlossesontheavailableforsaleinvestmentsunder“Provisions”ratherthan“Reserves”.Inthisway,thefinancialstatementsreflectamorerealisticpictureoftheperformanceoftheBank.

• IFRS7–FinancialInstrumentsDisclosuresrequires that an entity discloses verydetailed information on its investments including information on concentrationof risk on investments; geographicalinformationoninvestmentsandsensitivityanalysisforeachtypeofmarketrisk.TheBank’sinvestmentofthecountry’sreservesis managed under strict governanceprocedures and the Central Bank Actrequires the Bank maintain a prudentiallevelofconfidentiality.

Theaccountingtreatmentadoptedforeachoftheseis defined in the accounting policies and notesbelow.Theimpactofthesedeparturesisreflectedin the improvedstability in theoperationsof theBank.ManagementconsidersthattheseFinancialStatements fairly represent the Bank’s financialposition,financialperformanceandcashflows.

Notes to Consolidated Financial Statements

b. Foreign currency translation i. Functional and presentation currency The Financial Statements are presented

in Trinidad and Tobago dollars,which isthe Bank’s functional and presentationcurrency.

ii. Transactions and balances Monetaryassetsandliabilitiesdenominated

in foreign currencies are translated intoTrinidad and Tobago dollars at the ratesof exchange prevailing at the close ofbusiness at the Statement of FinancialPositiondate.

Translation gains or losses, at year-endexchange rates of these monetary andnon-monetary assets and liabilities,are recognised in Provisions – Foreigncurrencyexchangeratereserves.

Foreigncurrencytransactionsaretranslatedat the exchange rates prevailing on thetransactiondates.Foreignexchangegainsand losses resulting from the settlementofsuchtransactionsarerecognisedintheStatementofComprehensiveIncome.

iii. Special Drawing Rights Transactions with the International

Monetary Fund (IMF) are recorded atthe local currency equivalent of SpecialDrawingRightsusingratesnotifiedbytheIMF.

c. Critical accounting estimates and judgments

TheBankmakesestimatesandassumptionsthat affect the reported amounts of theassetsandliabilitieswithinthefinancialyear.Estimates and judgements are continuallyevaluated and are based on historical


experience and other factors, includingexpectationsoffutureevents.

The resultingaccountingestimateswill seldomequaltherelatedactualresults.Theestimatesandassumptionsthathaveasignificantriskofcausingmaterial adjustments to the carryingamounts of assets and liabilities within thenextfinancialyearareillustratedbelow:

i. Estimated pension obligation The estimate of the pension obligation,

inrelationtothedefinedbenefitpensionplan operated by theBank on behalf ofits employees, is primarily based on theestimation of independent qualifiedactuaries. The value of the pensionobligation is affected by the actuarialassumptions used in deriving theestimate.

ii. Provision for bad and doubtful debt Pursuant to Section 35(4) of the Act,

provisionsaremadeforbadanddoubtfuldebts intheaccounts. Inthisregard, therelevantassetsareshownintheStatementof Financial Position net of the amountwhich,intheopinionoftheBank,requiresa specific provision.

iii. Estimate of contingent liability TheBankmayfacelitigationmattersinthe

normal course of business. An estimatefor legal settlement and associated cost has been provided for in the FinancialStatements.

d. Cash and cash equivalents For the purposes of the Statement of Cash

Flows, cash and cash equivalents comprisebalanceswithlessthanorequaltothreemonthstomaturity from the date of acquisition. Itconsists of cash, balances with other banks,short term funds and investments, includingfixeddepositsandreverserepurchases.


e. Repurchase agreements Repurchase agreements (Repos) are generally

overnighttransactionsplacedattheendoftheday.

f. Investment securities The Bank classifies its investment securities

in the following five categories: “Held toMaturity”, “Available for Sale”, “Loans andAdvances”,“FairValuethroughProfitorLoss”and“RelatedEnterprises”.

i. Held to maturity Investmentsclassifiedasheldtomaturity

are non-derivative financial assets withfixedordeterminablepaymentsandfixedmaturitythattheBank’smanagementhasthepositive intentionandability toholdtomaturity.Interestontheseinvestmentsis recognised in the Statement ofComprehensiveIncome.

ii. Available for sale Theseinvestmentsareintendedtobeheld

foranindefiniteperiodoftime,andmaybesoldinresponsetoneedsforliquidityortomeetthegoalsofthestrategicassetallocationapprovedbytheBoard.

They are initially recognised at cost,

(whichincludestransactioncosts),and are subsequently re-measured at fairmarketvalue. Regular purchases and sales offinancialassetsarerecognisedonthetradedate,whichisthedateonwhichtheBankcommitstopurchaseorselltheasset.

Unrealised gains and losses on theseinvestments are recognised in Provisions–RevaluationReserveatMarketValue.

When the securities are disposed of,the related accumulated fair valueadjustmentsareincludedintheStatementofComprehensiveIncomeasrealisedgainsandlossesfrominvestmentsecurities.


iii. Loans and advances Loans and advances are non-derivative

financialassetswithfixedordeterminablepayments that are not quoted in anactive market. They arise when theBankprovidesmoneyorservicesdirectlyto a counterparty, with no intention oftrading the receivableandarecarriedattheir expected realisable value, less anyprovisionforimpairment.Interestarrearsare accrued and provided for in thecurrentfinancialperiod.

Determination of allowances for losses is basedonanannualappraisalofeachloanor advance. Specific provisions are made when,intheopinionofmanagement,creditrisk or other factors make full recoverydoubtful. Provisions created, includingincreasesanddecreases,arerecognisedintheStatementofComprehensiveIncome.

iv. Fair value through profit or loss Financial assets at fair value through

profit or loss may only be made ifthe financial asset either contains anembedded derivative or will be managed onafairvaluebasisinaccordancewithadocumentedriskmanagementstrategy,orifdesignatingit(andanyfinancialliability)at fair value will reduce an accountingmismatch.

Derivativesare initially recognised in theStatementofFinancialPositionatfairvalue onthedateonwhichaderivativecontractis entered into and are subsequently re-measured at their fair value. Fair valuesare obtained fromquotedmarket pricesinactivemarkets,includingrecentmarkettransactions, or valuation techniques, asappropriate.Thebestevidenceofthefairvalueofaderivativeatinitialrecognitionisthetransactionprice(i.e.,thefairvalueoftheconsiderationgivenorreceived).

A derivative is a financial instrumentor other contract within the scope ofIAS 39 with all three of the followingcharacteristics:

a. its value changes in response to

the change in a specified interestrate, financial instrument price,commodity price, foreign exchangerate, index of prices or rates, creditrating or credit index, or othervariable,providedinthecaseofanon-financial variable that the variable isnotspecifictoapartytothecontract(sometimescalledthe‘underlying’);

b. it requires no initial net investmentor an initial net investment that issmaller than would be required forothertypesofcontractsthatwouldbeexpected to have a similar responsetochangesinmarketfactors;and

c. itissettledatafuturedate.

v. Related enterprises The Bank has investments in several

related companies. All of these equityinvestments, with the exception of theinvestment in theHomeMortgageBank(HMB),donothaveaquotedmarketpricein an active market and therefore theirfair value cannot be reliably measured.These equity investments are thereforemeasuredatcost.Theequity investmentinHMBismeasuredatfairmarketvalue.Unrealisedgainorlossonthisinvestmentis recognised inProvisions–RevaluationReserveatMarketValue.

g. Impairment of financial assets An investment is impaired if its carrying

amount is greater than its estimatedrecoverable amount. The amount of theimpairment loss for securities carried at



A valuation is done every three years byindependentactuaries. Thevaluationat30September,2008andtheIAS19Methodologywere used, based on information receivedfromtheactuarialreportdated2November,2010, for the preparation of the FinancialStatements.

Inaccordancewiththeadviceoftheactuaries,the Plan’s costs of providing pensions arechargedtotheStatementofComprehensiveIncome in order to spread the regular costovertheservicelivesofemployees.

Actuarial gains and losses are recognised asincome or expense when the cumulativeunrecognised actuarial gain or loss exceedsthe greater of 10% of the defined benefitobligation and 10% of the fair value of thePlanassets.

The Plan is funded by payments fromemployeesandtheBank,takingintoaccountthe recommendations of independentqualifiedactuaries.

j. Notes and coins Thestockofnotesandcoinsisstatedatoriginal

cost.IssuesareaccountedforusingtheFirstIn First Out Method. All associated costssuchasshipping,handlingandinsuranceareexpensedimmediately.Printingandmintingcostsareexpensedwhentheunitsofcurrencyareissuedandputintocirculation.

k. Leases i. Operating leases (as lessee) TheleasesenteredintobytheBankare

primarily operating leases. The totalpayments made under operating leasesarechargedtotheStatementofEarningson a Straight Linebasis over theperiodofthelease.Whenanoperatingleaseisterminated before the lease period hasexpired, any payment required to be


amortisedcostiscalculatedasthedifferencebetweenthesecurities’carryingamountandthepresentvalueoftheexpectedfuturecashflows discounted at the original effectiveinterest rates.

The recoverable amount of an instrumentmeasuredatfairvalueisthepresentvalueofexpectedfuturecashflowsdiscountedatthecurrent market rate of interest for a similarfinancial asset.

h. Offsetting financial instruments Financial assets and liabilities are offset and

thenetamountreportedinthebalancesheetwhen there is a legally enforceable right tooffsettherecognisedamountsandthereisanintentiontosettleonanetbasis,orrealisetheassetandsettletheliabilitysimultaneously.

i. Employee benefits – pension obligations The Bank operates a Defined Benefit Plan

(thePlan) for all its eligible employees. TheassetsofthePlanareheldinaseparatetrusteeadministered plan.

ADefinedBenefitPlanisapensionplanthatdefinestheamountofpensionbenefitthatanemployeewillreceiveonretirement,usuallydependent on one ormore factors such asage,yearsofserviceandcompensation.Thepensionbenefitisbasedonthefinalsalaryoftheemployee.

An asset or liability recognised in theStatementofFinancialPosition inrespectofthePlan is thepresentvalueof thedefinedbenefit obligation at the Statement ofFinancial Position date less the fair value ofthe Plan’s assets, togetherwith adjustmentsforunrecognisedactuarialgainsorlossesandpast service costs.

The Plan’s accounting costs are assessed onthebasisoftheProjectedUnitCreditMethod.


made to the lessorbywayofpenalty isrecognisedasanexpenseintheperiodinwhichterminationtakesplace.

ii. Finance leases (as lessor) Where theBankgrants long-term leases

onproperty,thelandandthebuildingaretreatedasafinancelease.Thesefinanceleases are valued at the lower of thegross investment lessprincipalpaymentsandanyprovisions inthe lease,andthepresent value of the minimum leasepaymentsreceivableattheBalanceSheetdateandareshownasreceivable.Leaseincomeisrecognisedoverthetermofthelease using the net investmentmethod,whichreflectsaconstantperiodicrateofreturn.

l. Intangible assets Intangible assets are acquired computer

software programmes. These are capitalisedon thebasis of the cost incurred to acquireandbringtousethespecificsoftware.Thesecosts are amortised using the straight-linemethodon thebasisof theexpectedusefullife of five years. Costs associated withmaintaining computer software programmesarerecognisedasanexpenseasincurred.

m. Property, plant & equipment Fixed Assets are recorded at their cost of

acquisition less accumulated depreciation.Additions or improvements to assets duringtheyear,whichsignificantlyaddtothevalueof, or extend the useful life of such assets,arecapitalisedaspartofthecost.Whenanasset is retired or sold, any gain or loss ondisposal isdealtwith through theStatementofComprehensiveIncome.

Artwork, which is classified under FixturesandFittings,iscarriedinitiallyatcost.Everysubsequent year, Artwork will be carried atits revalued amount, being its fair value at

the date of revaluation. Appraisals will beperformed every three years by a qualifiedvaluer. The artwork was last revalued inSeptember 2010.

DepreciationiscalculatedontheStraightLineMethodtowritedownthecostoftheassetsto their residual values over their estimatedusefullivesatthefollowingrates:

Furniture - 10%perannum(pa)

Fixturesandfittings - 10%pa

Motorvehicles - 331/3%pa

Machineryandequipment - 20%pa

Computerhardware - 331/3%pa

Computersoftware - 20%pa

Leaseholdproperties - overtheperiodofthelease

Building - 2.5%pa

BuildingImprovements - 10%pa

n. Taxation Section55(1)oftheCentralBankActexempts

the Bank from the provisions of any Actrelatingto incometaxation,companytaxationandfromthepaymentofstampduty.

Itssubsidiary,CBServicesLimited,issubjectto corporation tax at a rate of 25% onchargeable income in accordance with theCorporationTaxAct.

Deferred taxation arises from temporarydifferences between the tax base of assetsand liabilities, and their carrying amountsin the Financial Statements. The principaltemporarydifferencesarisefromdepreciationon Property, Plant and Equipment, andrevaluationofotherassets.

CBServicesLimitedcurrentlydoesnothaveany temporary difference and as such noadjustmentfordeferredtaxationisrequired.

o. Provisions The Bank has a policy of providing for all

knownandforeseeablelossesintheaccounts




and has adopted a prudent approach toprovisioning. Provisions shown on theStatement of Financial Position include theForeignCurrencyTranslationReserves,GoldRevaluation Reserves and Market ValueRevaluationReserves.

p. Capital The entire capital of the Bank is held by

the Government of Trinidad and Tobago.Provision is made in Section 34(5) of theCentral Bank Act, for the Paid-up portionof the authorised capital of the Bank to beincreasedeachyearbyanamountofnotlessthan15per cent of the amount tobepaidintotheConsolidatedFund,untilthePaid-upportionoftheAuthorisedCapitalisequaltotheAuthorisedCapital.On21August,2007theAuthorisedCapitaloftheBankwasincreasedto$800million. Asat30September,2010thePaid-upCapitalwas$800million.

q. Reserves Provision is made in Sections 35(3) and

35(6) of the Central Bank Act for the BanktoplaceintheGeneralReserveFundortheSpecialReserveFunds,orinboth,anamountnot exceeding ten (10) per cent of theNetsurplus of the Bank for each financial year,untiltheGeneralReserveFundisequaltotheAuthorisedCapital.At30September,2010,theGeneralReserveFund increasedby$53millionto$588million.

r. Revenue Recognition i. Interest income and interest expense Interest income and expense are

recognised in the Statement ofComprehensive Income for all interestbearinginstrumentsonanaccrualsbasis.Interestincomeincludescouponsearnedonfixedincomeinvestmentsandaccrueddiscount and premium on treasury billsandotherdiscountinstruments.

ii. Dividend income

Dividendincomeisrecognisedwhentherighttoreceivepaymentisestablished.

iii. Other income and expenses Allothersignificant itemsof incomeand

expenditure are accounted for on theaccrualsbasis.

3. Financial risk management

Operational risk is the risk of loss in bothfinancial andnon-financial terms resulting fromhumanerrorandthefailureofinternalprocessesandsystems.

Operational riskmanagement includesbank-widecorporate policies which describe the standardofconductrequiredofstaffandspecificinternalcontrol systems designed around the particularcharacteristicsofvariousbankactivities.

In addition, the Bank has responsibility for themanagement of the official foreign currencyreserves of the country. This includes thedeterminationof theamountofriskwhichmaybetakeninthemanagementoftheportfolio.Itseekstomitigaterisksintheportfolioasfollows:

Creditrisk TheBanktakesonexposuretocredit riskwhichis the risk thatacounterpartywillbeunable topayamountsinfullwhendue.

Credit risk ismitigated by the establishment ofcounterparty concentration limits and by theestablishmentofminimumrating standards thateachcounterpartymustattain.

Currencyrisk TheBanktakesonexposuretofluctuationsintheprevailing foreigncurrencyexchangerateon itsfinancial position and cash flows.Managementseekstomitigatecurrencyriskbypartlyaligningthecurrencycompositionoftheforeignportfolio


tothesettlementoftradeandexternaldebt.

Interestraterisk The Bank invests in securities and maintainsdemanddepositaccountsasapartofitsnormalcourseofbusiness.Interestrateriskistheriskofloss arising from changes in prevailing interestrates.TheBankmanagesthisriskbyestablishingdurationlimitsfortheportfolio.

Liquidityrisk TheBankisexposedtodailycallsonitsavailablecash resources fromovernight deposits, currentaccountsandmaturingdeposits.

Liquidity risk is managed by the grouping ofreserves into several tranches according toliquidity requirements, and defining specificassetclassesanddurationlimitsforeachtranche,consistentwithitsdefinedliquidityobjectives.

Fair value is the arm’s length consideration forwhichanassetcouldbeexchangedoraliabilitysettled between knowledgeable,willing parties,who are under no compulsion to act and isbestevidencedbyaquotedmarketpriceifoneexists.

Fair value of securities is determined using theParMethodwheredirectmarketquotesoftheseinstrumentsexist.Thispriceisusedasthebasisforthemarktomarketvaluationoftheholdings.

Localcurrency-balanceswithbanksThisbalanceiscomprisedmostlyofchequedepositsmade by the Government of the Republic ofTrinidad and Tobago which are sent for clearanceatthecommercialbanks.Thesearesettledagainstcommercial banks’ reserves balances on the nextworkingday.


4. Cash and cash equivalents

CurrencyonhandBalanceswithbanksRepurchaseagreementsFixed Deposits

Represented by:

Foreign currency - cash and cash equivalentsCurrencyonhandBalanceswithbanksRepurchaseagreementsFixed Deposits

Local currency - cash and cash equivalentsCashonhandBalanceswithbanks

Sept 2010$’000

Sept 2009$’000

6,6641,090,6232,101,63323,031,52626,230,446

914153,2962,101,63323,031,52625,287,369

5,750937,327943,077

26,230,446

9,524772,3472,777,33725,217,87528,777,083

89087,556

2,777,33725,217,87528,083,658

8,634684,791693,425

28,777,083



5. Investments

Sept 2010$’000

Sept 2009$’000

Foreign currency investmentsHeldtomaturityAvailable for sale FairvaluethroughprofitorlossLoansandadvances

Local currency investmentsInvestmentsinrelatedenterprises(Note6)Available for sale - LocalsecuritiesLoansandadvances

Total investments

Held to maturityCost

Available for sale investments Foreign currencyCost(Discount)/premiumAppreciationinMarketValueAppreciationinForeignCurrency

Local currencyCost(Discount)

Total available for sale investments

298,093 34,074,320 441 153,476 34,526,330

56,382

23,940 1,965,269 2,045,591 36,571,921

298,093

33,504,323 (96,203) 229,771 436,429 34,074,320

24,113 (173) 23,940

34,098,260

252,752 37,585,703 5,231 147,206 37,990,892

56,382

23,000 226,354 305,736 38,296,628

252,752

36,749,828 (159,662) 440,737 554,800 37,585,703

23,001 (1) 23,000

37,608,703

Sept 2010$’000

Sept 2009$’000

441

347,818 (194,342) 153,476

2,159,672 (194,403) 1,965,269

2,118,745

25,422 30,960 56,382

36,571,921

Fair value through profit or lossCost

Loans and advancesForeign currencyCostProvisionfordoubtfuldebts

Local currency CostProvisionfordoubtfuldebts

Total loans and advances

Investments in related enterprises CostAppreciationinMarketValue

Total Investments

5,231

334,701 (187,495) 147,206

296,403 (70,049) 226,354

373,560

25,422 30,960 56,382

38,296,628


The Central Bank has an interest in thefollowing related enterprises to help promotethe development of the country’s financialinfrastructure:

The Bank also has a related interest in the Office

of the Financial Services Ombudsman (OFSO).

The main objectives of the OFSO are to receive

complaints arising from the provision of financial

services to individuals and small business, and

to facilitate the settlement of these complaints.

The remuneration of the Financial Services

Ombudsman is met by the Bank while the day

to day operations of the office are funded by the

financial institutions.

6. Investment in related enterprises TheseFinancialStatementsincludethefollowingrelatedpartytransactionsduringtheyear:-

Sept 2010$’000

Sept 2009$’000

3,5521,584264

5,400

74811,29112,039

56,382 808

4,924

Income:DividendIncomeRentalIncomeOtherIncome

ExpenditureSalariesandrelatedexpenditureOtherexpenses

Ending period balances InvestmentsinrelatedenterprisesReceivables from related enterprisesPayablestorelatedenterprises

3,5521,331161

5,044

8753,0003,875

56,382 4,719

3,888

Sept 2010$’000

Sept 2009$’000

2,5001,000

33,36018,600

92256,382

Investments in related enterprisesTrinidadandTobagoUnitTrustCorporationDepositInsuranceCorporationHomeMortgageBankFirstCitizensBankLimitedTrinidadandTobagoInterbankPaymentsSystem

2,5001,000

33,36018,600

92256,382




Sept 2010$’000

Sept 2009$’000

49,838 (61,506) (11,668)

7.75%7.70%

7.50%

Return on plan assetsExpectedreturnonplanassetsActuarial(loss)/gainonplanassetsActualreturnonplanassets

Actuarial assumptionsDiscountrateExpectedreturnonplanassetsProjectedfuturerateofsalaryincrease

ValueofPensionSchemeAsset

Note

7. Pension assets

Sept 2010$’000

Sept 2009$’000

Note

15

42,341 (41,392) 949

6.25%6.25%

6.00%

403,503 (548,061) (144,558) (95,344) (239,902)

(238,250)

2,186 (3,838) (1,652)

(239,902)

11,738 22,989 (42,341) - 9,800 - 2,186

302,885 (552,543) (249,658) 11,408 (238,250)

(214,135)

(20,919) (3,196) (24,115)

(238,250)

8,955

21,242 (49,838) 17,763 - (19,041) (20,919)

Defined benefit obligationFairvalueofassets

Unrecognisedgain/(loss)IAS19netdefinedliability/(asset)

Reconciliation of opening and closing defined benefitOpeningdefinedbenefitasset

Increase in pension assetsPensioncostBankcontributionpaid

Closingdefinedbenefitasset

Amounts recognised in the earnings statementCurrentservicecostInterestondefinedbenefitobligationExpectedreturnonplanassetsAmortised net gainPastservicecostMovementinun-utlisedassetsNetpensioncost

BasedonMarketValueatBalanceSheetDate


Sept 2010$’000

Sept 2009$’000

173,220-

173,220

80,9871,976,813

5,3934

7312,063,928

154,1456,589

160,734

57,7691,842,482

4,115207,801

162,112,183

Foreign receivablesForeign InterestReceivableOtherReceivables

Accounts receivable and prepaid expensesInterestreceivableondomestic investmentsOtherreceivablesPrepaymentsSuspenseaccountsValueAddedTax

8. Receivables and prepaid expenses


Sept 2010$’000

Sept 2009$’000

13,034

8,195

951

6,694

6,404

303

333

86,768122,682

BancoLatinoAmericanoDeExportaciones

CaribbeanDevelopmentBank

CaribbeanInformationandCreditRatingServicesLtd.

InternationalAmericanDevelopmentBank

InternationalBankforReconstructionandDevelopment

InternationalDevelopmentAssociation

InternationalFinancialCorporation

InternationalMonetaryFund

9. Subscriptions to International Financial Institutions

12,985

8,194

948

6,694

86,087

5,551

333

3,179,1143,299,906

TheBankactsas financialagent for theGORTTwith these international financial institutions. Inprevious years the Bank showed only the cashcontributionsmade to theseorganisations. Thisfinancial year, in order to show a fairer view,theseamountshavebeenadjustedtoincludetheportionoftheGovernment’scontributionsissuedto theseorganisations in the formofPromissoryNotes.


10. Other Assets

Sept 2010$’000

Sept 2009$’000

LeaseAssetStocksofnotesandcoinsConsumables

186,600120,0061,517

308,123

Lease Asset In 1995 the Bank entered into a thirty-yearfinance lease agreement with the Governmentof theRepublic of Trinidad andTobago for thepurchaseoftheMinistryofFinanceBuilding.

Sept 2010$’000

Sept 2009$’000

61,27634,04095,316

NotesCoins

76,80343,203

120,006

Stocks of notes and coins


175,810 95,316

1,466272,592

Sept 2010$’000

Sept 2009$’000

186,600

10,790

57,276

118,534

186,600

175,810

11,006

58,421

106,382

175,810

Present value of the minimum lease payments

Broken out as follows:

Notlaterthanoneyear

laterthanoneyearandnotlaterthanfiveyears

laterthanfiveyears

Present value of the minimum lease payments


11. Property, plant and equipment

As at 30 September 2010

Net book valueBalanceb/fwd01Oct2009TransfersAdditionsDisposalsRevaluationadjustmentDepreciationfortheperiodBalancec/fwd

Representedby:

CostAccumulateddepreciation

As at 30 September 2009

Net book valueBalanceb/fwd01Oct2008TransfersAdditionsDisposalsDepreciationfortheperiodBalancec/fwd

Representedby:

CostAccumulateddepreciation

174,272 2,407 1,566 - - (13,427)164,818

403,991(239,173)164,818

178,561 8,735 114 (3) (13,135)174,272

400,018(225,746)174,272

Land &Building $’000

LeaseholdProperty

$’000

Machinery &

Equipment$’000

ComputerEquipment

$’000

Furniture,Fixture &Fittings $’000

Capitalwork inprogress

$’000

Total

$’000

267 - - (58) - (125) 84

298 (214) 84

99 700 4 - (536) 267

1,002 (735) 267

20,390 5,830 1,736 - - (11,222) 16,734

88,036 (71,302) 16,734

28,560 2,283 1,357 (3) (11,807) 20,390

82,531 (62,141) 20,390

14,187 2,159 3,675 - - (7,724) 12,297

61,955 (49,658) 12,297

14,619 1,007 5,733 - (7,172) 14,187

56,120 (41,933) 14,187

26,002 429 4,186 (63) 2,411 (2,779) 30,186

46,916 (16,730) 30,186

23,463 3,309 1,678 (15) (2,433) 26,002

40,386 (14,384) 26,002

16,855 (10,825) 3,395 - - - 9,425

9,425 - 9,425

7,577 (16,034) 25,548 (236) - 16,855

16,855 - 16,855

251,973 - 14,558 (121) 2,411 (35,277) 233,544

610,621 (377,077) 233,544

252,879 - 34,434 (257) (35,083) 251,973

596,912 (344,939) 251,973



12. Demand liabilities

11,13037,67748,807

4,161,494158,705

12,949,007

404,261

48,120

7,216,4474,300,139

415,67229,653,845

Sept 2010$’000

RestatedSept 2009

$’000

11,92671,24283,168

4,567,902166,881

16,145,799

381,973

59,417

2,092,8635,218,876

312,70828,946,419

Demand liabilities - foreignForeign deposits Governmentspecialaccounts

Demand liabilities - localNotesincirculationCoinsincirculationDepositsbycommercialbanksDepositsbynon-bankingfinancialinstitutionsStatutorydeposits- insurancecompaniesDepositsbygovernmentandgovernment agenciesDepositsbyothercurrentaccountsDepositsbyregionalandinternationalinstitutions

Deposits by financial institutions Thestatutoryreserverequirementforcommercialbanks remained at 17 per cent during thefiscal year 2009/2010. As a result the averagemonthlycashbalancesheldbycommercialbanksincreasedby1.7percent.Thecommercialbankscontinuedtoholdasecondaryreserveof2percentwhichwasremuneratedat350basispointsbelowthe‘repo’rate.

Thereserverequirementfornon-bankingfinancialinstitutions remained unchanged at 9 per cent.Additionally, commercial banks held variousspecial deposits/bills as part of the monetarypolicyof theBank.These instrumentscomprisethefollowing:

•Adepositof$1.5billionwhichmatureson28December2010.

•Athree-monthCentralBankbilloffacevalue$500millionissuedinNovember2009.

13. Accounts payable

Sept 2010$’000

RestatedSept 2009

$’000

5,1248,594,0918,599,215

74,60237,7144,65925,162

23,356,1191,970,315

25,468,571

Accounts payable - ForeignBilateralaccountsPendingTrades

Accounts payable - LocalTradepayablesandaccruedchargesInterestpayableUnclaimedmoniesGovernmentspecialaccountsBlockedaccountsOtherpayables

14. Provisions The Bank has adopted a prudent approach

for provisioning in order to maintain adequatecapacity to fulfil its functions. This accountingtreatmentreflectsthelimitationsonthecreationofreservessetoutinSection35oftheCentralBankAct. TheAct specifies the termsandconditionsgoverningGeneralandSpecialReservefundsandthe creation of provisions for bad and doubtfuldebts,depreciationinassets,contributionstostaffpensionbenefitsandothercontingencies,beforepaymentofthenetsurplusforthefinancialyeartotheGovernment.ThisisadeparturefromthedefinitionoutlinedinIAS37Provisions,ContingentLiabilitiesandContingentAssets. TheprovisionsshownonthefaceoftheBalanceSheetcomprise:


4,6978,537,2468,541,943

42,23468,7014,75125,593

23,637,8951,799,319

25,578,493

195,0981,175,171238,250403,266

2,011,785

Sept 2010$’000

Sept 2009$’000

Gold reserveForeigncurrencyexchangeratereservesPensionreserveRevaluationreserveoninvestments

Provisions

311,9534,158,571

239,902694,119

5,404,545


17. Other operating expenses

Sept 2010$’000

15. Income from foreign currency assets

Sept 2010$’000

Sept 2009$’000

732,306 6,716

11,413 (104,430) 248,144 894,149

(29,047) (143,895) (172,942)

721,207

Income from Foreign Currency AssetsInterestonUnitedStatesDollarBalances&SecuritiesInterestonSterlingBalances&SecuritiesInterestonotherforeignbalances&securitiesCurrency(Losses)/GainsrealisedGainsfromfairvaluechanges

Expenses from Foreign Currency AssetsInvestmentExpensesLossesfromfairvaluechanges

Net income from foreign currency assets

981,607 26,764

43,154 (1,283) 406,701 1,456,943

(26,195) (56,091) (82,286)

1,374,657

Sept 2009$’000

11,2912,8258,3493,9822,24417,280

12118,6683,6112,888

3,0002,9288,2134,1432,2067,15217

18,4383,6694,821

NationalFinancialLiteracyProgrammeContributionsAdvertisingandpublicrelationsComputerexpensesElectricityInsuranceLegalfees&settlementsLossondisposalofassets(seeNote10)Maintenance costPrinting&stationeryProfessionalfees


7,72458,2797,947

73,950

24,115176,866

1,5423,5528,4572967,639

222,467

16. Interest and other Income from local currency assets

Sept 2010$’000

Sept 2009$’000

19,761257,7789,044

286,583

1,6522,255

1,0983,5528,821

1105,971

23,459

Interest IncomeInvestmentsLoansOther

Other IncomeIncreaseinpensionassets(Note7)GeneralEarningsIncomefromInternationalMonetaryFundDividendsFeeschargedtofinancialinstitutionsProfitonsaleofassetsOther

GeneralEarningsfor2009includeanamountof$168millionrelatingtotheclosureoftheBuildingFund.

Other operating expenses include:


18. Taxation

19. Capital commitments There was $1,204,439 in outstanding

commitments for capital expenditure as at30 September 2010 (30 September, 2009–$5,655,543).

20. Leasehold obligations – operating leases

a. Operating leases where the Bank is the lessor The Bank had entered into lease

arrangementsin2010withthreecompaniesfor offices located in the Bank’s building.The tenants are charged amonthly rentaland service fees based on the squarefootageoccupied.

b. Operating leases where the Bank is the lessee TheBankalsoleasesequipmentandpremises

under operating lease arrangements. Theleaseshavevaryingterms,escalationclausesandrenewalrights.

Sept 2010$’000

Sept 2009$’000

7

531,751-

531,75177

7

1,157,771-

1,157,77177

BusinessLevy

Taxpaid/payablebytheBankwascalculatedasfollows:

NetsurplusCorporationtax@25%IncomenotsubjecttotaxBusinessLevyTaxCharge

21. Comparative figures The restated Statement of Financial Position

for the year ended 30 September 2009resultedfromre-classificationofsomeitemsinordertoachieveaclearerormoretransparentpresentation.

MovementSept 2009

$’000

(4,697) 8,541,943

(8,537,246) -

LIABILITIESForeign currency liabilitiesDemand liabilities - foreignAccountspayable

Local currency liabilitiesAccountspayableNet restatement of liabilities

Restatement of Statement of Financial Position Items as at 30 September 2009



22. National Financial Literacy Programme InJanuary2007,theBanklaunchedtheNational

FinancialLiteracyProgramme.Themainobjectivesoftheprogrammeareto:

• sensitisethepopulationaboutthesignificanceofpersonalfinancialplanning,budgetingandmanagement;

• provide the public with the tools and skillsnecessarytoenablethemtoconfrontfinancialissueswithagreaterdegreeofconfidenceandknowledge;and

• develop the awareness and consciousness ofthe public in general about the benefits andrisksofthefinancialproductsandservices.

7,048

7,048

251

5,685

2,458

718

414

9,526

(2,478)

(2,000)

(4,478)

4,486

(8)

4,478

Sept 2010$’000

Sept 2009$’000

11,737

11,737

98

4,513

1,999

517

-

7,127

4,610

(4,478)

132

-

(132)

(132)

Receipts

Contributions Received

Total Receipts

Payments

Administrative Cost

Advertising & Printing Material

Consultancy & Lecture Fees

Salaries

Other - MIF & Website

Development

Total Expenditure

Net receipts over payments/

(payments over receipts) for the

period

Balance brought forward

Balance carried forward

Represented in the Financial

Statements by:

Accounts Receivable

Bank Account



23. Capital

Sept 2010$’000

Sept 2009$’000

800,000

800,000

800,000

800,000

Authorised capital

Paid-up capital

24. Key Management Compensation Keymanagementpersonnel are thosepersons

havingauthorityandresponsibilityforplanning,directing, and controlling the key activities ofthe Bank, directly or indirectly, including allexecutives,senior,middleandjuniormanagers.

Sept 2010$’000

Sept 2009$’000

34,888----

828

26,268----

969

Short-termemployeebenefitsPost-employmentbenefitsOtherlong-termbenefitsTermination benefitsEquitycompensationbenefitsDirectors’ Fees

25. Contingent liabilities Therewereseverallitigationmattersoutstanding

asat30September2010amounting to$19.8million(2009-$4.3million).



26. CL Financial Group Matter During January 2009, representatives of CL

FinancialLimited(CLF)metwiththeBankandtheMinistryofFinancerequestingurgentliquiditysupport for CLICO Investment Bank Limited(CIB), CLICO (Trinidad) Limited (CLICO) andBritishAmericanInsuranceCompany(Trinidad)Limited (BAT). On 30 January 2009, in aneffort toprotect the interestofdepositors andpolicyholders, theMinisterof Financeenteredinto a Memorandum of Understanding withCLF for the provision of liquidity support forCIB,CLICOandBATundercertainconditions.

On31January2009theBankassumedcontrolofCIB,underSection44DoftheCentralBankAct(theAct)andconsequenttoanamendmenttotheAct,italsoassumedcontrolofCLICOandBATon13February2009.

Asa resultof theseactions theBankcurrentlyhas in its Financial Statements the followingassetsandliabilities:

AssetsAdvancestoGovernmentreCLICOand BATAmountsrecoverablefromCLFreCIBLiabilities

LiabilitiesPromissoryNotestoFirstCitizensBankLimitedreCIBLiabilities


Sept 2010$’000

Sept 2009$’000

1,709,094

1,770,4273,479,521

1,770,427

-

1,866,1651,866,165

1,866,165


Non-Current$’000

-

34,007,761-

3,299,9062,609,900 39,917,567

- 300,894239,902

12,305271,125

233,544 1,057,770

40,975,337

83,1683,042,088 8,594,091 11,719,347

15,918,64823,472,820

- 5,404,545

44,796,013

800,000588,0499,406

1,397,45557,912,815

27. Statement of Financial Position – Current/Non-Current distinction

ASSETS

Foreign currency assetsForeigncurrencycashandcashequivalentsForeigncurrencysecuritiesForeign receivablesSubscriptionstointernationalfinancialinstitutionsInternationalMonetaryFund-HoldingsofSpecialDrawingRights

Local currency assetsLocalcurrencycashandcashequivalentsLocalinvestmentsPensionassetAccountsreceivableandprepaidexpensesOtherassetsProperty,plantandequipment

TOTAL ASSETS



CAPITAL AND RESERvESCapitalGeneral ReserveRetainedEarnings

Current$’000

25,287,3693,983,131173,220

--

29,443,720

943,0774,842

-2,051,6231,467

- 3,001,009

32,444,729

- -

5,124 5,124

13,027,7711,995,751478,605

- 15,502,127

----

15,507,251

Sept 2010

Total$’000

25,287,36937,990,892173,2203,299,9062,609,900 69,361,287

943,077305,736239,9022,063,928272,592

233,544 4,058,779

73,420,066

83,1683,042,0888,599,215 11,724,471

28,946,41925,468,571478,605 5,404,545 60,298,140

800,000588,0499,406

1,397,45573,420,066



Non-Current$’000

-31,097,670

-122,6822,678,803

33,899,155

- 2,014,300238,2502,094,914297,333251,973

4,896,770 38,795,925

48,8073,122,392

-3,171,199

11,853,2699,597,802

- 2,011,785

23,462,856

800,000534,8719,445

1,344,31627,978,371

27. Statement of Financial Position – Current/Non-Current distinction (cont’d)

ASSETS



TOTAL ASSETS

LIABILITIESForeign currency liabilitiesDemand liabilities - foreignInternationalMonetaryFund-AllocationofSpecialDrawingRightsAccountspayable


CAPITAL AND RESERvESCapitalGeneral ReserveRetainedEarnings

Current $’000

28,083,6583,428,660160,734

--

31,673,052

693,42531,291

-17,269

10,790-

752,775 32,425,827

- -

8,541,943 8,541,943

17,800,57615,980,691920,171

- 34,701,438

----

43,243,381

RestatedSept 2009

Total$’000

28,083,65834,526,330160,734

122,6822,678,803 65,572,207

693,4252,045,591238,250

2,112,183308,123251,973

5,649,545 71,221,752

48,8073,122,392

8,541,94311,713,142

29,653,84525,578,493920,171

2,011,785 58,164,294

800,000534,8719,445

1,344,31671,221,752



28,083,65834,526,330

160,734122,6822,678,803 65,572,207

693,4252,039,591238,2502,112,183308,123

251,973 5,643,545

71,215,752

48,8073,122,3928,541,943

11,713,142

29,653,84525,581,938920,1712,011,785

58,167,739

800,000534,871

1,334,87171,215,752

28. Parent TheFinancialStatementsoftheCentralBankofTrinidadandTobagoarepresentedbelow:

ASSETS



TOTAL ASSETS



CAPITAL AND RESERvESCapitalGeneral Reserve

TOTAL LIABILITIES, CAPITAL AND RESERvES

25,287,36937,990,892173,220

3,299,9062,609,900

69,361,287

943,077299,736

239,9022,063,928

272,592233,544

4,052,779 73,414,066

83,1683,042,0888,599,215

11,724,471

28,946,41925,471,977478,605

5,404,545 60,301,546

800,000588,049

1,388,04973,414,066

RestatedSept 2009

$’000Sept 2010

$’000

Statement of Financial Position As at 30 September 2010



750,435 (29,048) 721,387 (104,430) 248,144 (143,895) 104,249

721,206

286,583 1,587 23,459 311,629 128,544

1,161,379

52,863 157,656 248,712 806 35,278 134,281 - 629,596

531,783

531,783

1,051,525 (26,195) 1,025,330 (1,283) 406,701 (56,091) 350,610

1,374,657

73,950 1,364 222,167 297,481 141,010

1,813,148

55,828 116,468 349,557 940 35,083 97,772 - 655,648

1,157,500

1,157,500

Income from foreign currency assetsInterestincomeInvestmentexpense

(Loss)/gainfromcurrencytranslationsGainfromfairvaluechanges(Loss)fromfairvaluechanges

Income from local currency assetsInterestincomeRental income Otherincome

Decrease in provisions

Total income

Operating expensesPrintingandmintingofcoinsSalaries and related expensesInterestpaidDirectors’ feesDepreciationOtheroperatingexpensesIncreaseinprovisionsTotal operating expenses

Net surplus for the year

Total comprehensive income for the year

Sept 2009$’000

Sept 2010$’000

Statement of Comprehensive IncomeFor the year ended 30 September 2010


28. Parent cont’d


28. Parent cont’d

Balance as at 1 October 2008NetsurplusfortheperiodTransferofsurplustoConsolidatedFundTransfer to general reserveTransfertopaid-upcapitalBalance as at 30 September 2009

Balance as at 1 October 2009NetsurplusfortheyearTransferofsurplustoConsolidatedFundTransfer to general reserve


GeneralReserves

$’000

Issued andFully Paid Up Capital

$’000

Statement of Changes in EquityFor the year ended 30 September 2010

RetainedEarnings

$’000

Total

$’000

761,874---

38,126800,000

800,000-

--

800,000

428,394--

106,477-

534,871

534,871-

-53,178

588,049

- 1,157,500(1,012,897) (106,477) (38,126) - - 531,783 (478,605) (53,178) -

1,190,268 1,157,500 (1,012,897) - - 1,334,871

1,334,871 531,783 (478,605) - 1,388,049



28. Parent (cont’d)

Cash flows from operating activitiesNetsurplusfortheyearbeforetaxationAdjustmentsfor:DepreciationNetloss/(gain)ondisposaloffixedassetsInterestincomeInterestexpenseDividend income ProvisionsRevaluationofArtworkBuildingfundGold reservesForeigncurrencydifferencesinmonetaryassets&liabilitiesCash outflows before changes in operating assets and liabilitiesChanges in operating assets and liabilitiesDecrease/(Increase)inaccountsreceivable&prepaidexpensesDecrease/(Increase)inotherassets(Increase)inpensionasset(Decrease)/IncreaseinaccountspayableandotherliabilitiesNet cash flow (used in)/from operations

Cash flows from investing activitiesPurchaseofproperty,plantandequipmentProceedsfromsaleofproperty,plantandequipmentNetpurchaseofinvestments/proceedsfromsaleofinvestmentsNetrepaymentofloansandadvancesInterestreceivedDividends receivedInterestpaid(Decrease)/IncreaseinInternationalMonetaryFundHoldingsofSpecialDrawingRightsPaymenttoConsolidatedFundNet cash flow from/(used in) investing activities

Cash flows from financing activitiesPurchaseofsharesininternationalfinancialinstitutionsLeasepaymentNet cash flow (used in)/from financing activities

Net (decrease) in cash and cash equivalentsCash and cash equivalents, beginning of yearCash and cash equivalents, end of year

Sept 2009$’000

Sept 2010$’000

Statement of Cash flowsFor the year ended 30 September 2010

531,783 35,278 11 (1,007,969) 248,712 (3,552) (128,544) (2,411) - 116,855 61,769 (148,068) 77,747 24,741 (1,652) (694,768) (742,000)

(14,558) 110 (251,251) 1,869,541 965,675 3,552 (279,699) (11,402) (920,171) 1,361,797

(3,177,224) 10,790 (3,166,434)

(2,546,637) 28,777,083 26,230,446


1,157,500 35,083 (279) (1,099,279) 349,557 (3,252) (141,010) - (175,656) 57,034 (201,625) (21,927) (1,969,224) (36,379) (24,115) 5,804,323 3,752,678

(34,434) 536 (5,942,795) (1,839,902) 1,151,554 3,252 (336,550) 9,484 (1,078,295) (8,067,150)

(1,221) 10,579 9,358

(4,305,114) 33,082,197 28,777,083


Appendices


Appendix


2007

2008

Oct-09

Nov-09

Dec-09

Jan-10

Feb-10

Mar-10

Apr-10

May-10

Jun-10

Jul-10

Aug-10

Sep-10

End ofMonth

Notes(Old TT)

Notes(Republic)

Total Notesin Circulation Coins

TotalCurrency in Circulation

19,087

19,087

19,044

19,044

19,044

19,044

19,044

19,044

19,044

19,044

19,044

19,044

19,044

19,044

3,278,686

3,812,333

4,091,271

4,228,073

4,675,787

4,171,381

4,254,227

4,477,434

4,353,198

4,485,724

4,512,050

4,569,174

4,507,243

4,543,137

3,297,729

3,831,377

4,110,315

4,247,117

4,694,831

4,190,425

4,273,271

4,496,478

4,372,242

4,504,768

4,531,094

4,588,218

4,526,287

4,562,181

137,005

149,916

159,482

160,454

161,367

161,419

161,559

162,272

162,887

163,728

164,560

165,352

166,060

166,862

3,434,734

3,981,293

4,269,797

4,407,571

4,856,198

4,351,844

4,434,830

4,658,750

4,535,129

4,668,496

4,695,654

4,753,570

4,692,347

4,729,043

Source:CentralBankofTrinidadandTobago.

TABLE A.1CURRENCY IN CIRCULATION2007-2010(Dollars Thousands)



1 IncludesExchequer,TrustFundsandOtherPublicDeposits,GovernmentSDRAllocationandOtherDeposits.

2 IncludesForeignCurrenciesonhand.

End

ofM

onth

Cur

renc

y in

Cir

cula

tion

Tota

l

Com

mer

cial

Bank

s

Non

-Ban

kFi

nanc

ial

Inst

itutio

ns

1G

over

nmen

t &

Gov

ernm

enta

lO

rgan

isat

ions

Inte

rnat

iona

lO

rgan

isat

ions

Oth

erLi

abili

ties

Cap

ital &

Rese

rve

Fund

s

Tota

lLi

abili

ties

2Ba

lanc

esw

ith B

anks

Abro

ad

Oth

erFo

reig

nSe

curi

ties

Gol

dSu

bscr

iptio

n to

In

tern

atio

nal

Mon

etar

y Fu

nd

Subs

crip

tions

to

Inte

rnat

iona

l O

rgan

isat

ions

SDR’

sTT

Dol

lar

Secu

ritie

s

Oth

er A

sset

sin

clud

ing

Fixe

d As

sets

Tota

lAs

sets

EXTE

RNAL

ASSE

TSD

EPO

SITS

ASSE

TS

2007

/08

OCTOBER

NOVEMBER

DECEMBER

JANUARY

FEBRUARY

MARCH

APRIL

MAY

JUNE

JULY

AUGUST

SEPTEMBER

2008

/09

OCTOBER

NOVEMBER

DECEMBER

JANUARY

FEBRUARY

MARCH

APRIL

MAY

JUNE

JULY

AUGUST

SEPTEMBER

3,969,876

3,988,564

4,494,198

3,937,579

4,222,666

4,216,868

4,241,450

4,208,990

4,266,636

4,219,611

4,254,304

4,320,199

4,276,245

4,411,529

4,861,929

4,357,282

4,442,352

4,666,146

4,543,444

4,675,442

4,703,088

4,761,401

4,698,803

4,734,784

9,089,294

9,907,594

10,607,636

10,642,989

11,368,614

11,825,975

10,444,106

11,306,251

10,730,077

10,851,605

11,395,526

12,949,007

13,913,335

14,820,069

14,558,455

14,845,844

14,474,521

14,679,984

14,593,613

15,241,618

16,348,095

15,342,785

15,938,361

16,145,799

410,825

396,939

411,770

412,697

407,501

399,379

416,598

403,120

405,869

406,170

409,362

404,261

403,223

447,484

403,030

397,666

398,846

392,895

389,561

373,337

372,823

374,914

375,850

381,973

18,590,616

15,530,789

16,313,638

16,592,993

15,845,266

15,174,621

17,377,087

15,788,414

14,978,124

13,986,980

13,004,561

11,932,258

10,537,384

8,299,627

7,594,589

8,389,557

6,827,541

7,512,290

8,887,759

7,589,654

8,171,290

9,288,152

6,641,801

7,624,447

443,276

428,089

428,089

428,089

428,089

437,847

435,287

435,287

449,504

449,504

2,868,424

3,122,392

3,122,392

3,122,392

3,122,392

3,122,392

3,122,392

3,122,392

3,122,392

3,042,088

3,042,088

3,042,088

3,042,088

3,042,088

25,550,009

26,989,304

29,132,274

27,399,891

29,600,322

28,699,517

28,939,557

29,365,764

29,472,876

28,772,428

29,688,771

37,152,764

33,787,420

33,546,174

33,170,392

34,246,540

35,651,251

36,472,518

31,724,812

35,342,924

31,915,017

33,508,539

32,689,276

40,096,927

1,190,268

1,190,268

1,190,268

1,190,268

1,190,268

1,190,268

1,190,268

1,190,268

1,190,268

1,190,268

1,190,268

1,334,871

1,334,871

1,334,871

1,334,871

1,334,871

1,334,871

1,334,871

1,334,871

1,334,871

1,334,871

1,334,871

1,334,871

1,388,049

59,244,164

58,431,547

62,577,873

60,604,506

63,062,725

61,944,475

63,044,353

62,698,094

61,493,354

59,876,566

62,811,216

71,215,752

67,374,870

65,982,146

65,045,658

66,694,152

66,251,774

68,181,096

64,596,452

67,599,934

65,887,272

67,652,750

64,721,050

73,414,067

30,627,242

28,931,802

30,950,806

30,093,346

27,894,411

29,334,661

31,002,450

29,907,492

30,406,739

28,809,351

28,231,316

28,083,658

27,537,852

26,411,436

25,440,115

25,666,536

24,932,883

25,940,424

26,951,506

26,409,635

27,472,762

27,255,055

24,291,053

25,287,369

27,103,201

28,039,694

29,926,388

29,203,674

31,128,451

28,591,934

27,718,883

27,987,302

27,009,007

27,113,524

28,061,318

34,526,330

32,214,841

32,050,148

31,866,608

33,454,925

34,229,556

35,092,451

31,485,168

35,076,618

31,776,481

34,095,360

34,123,960

37,990,892

25,402

25,402

25,402

25,402

25,402

25,402

25,402

25,402

25,402

25,402

25,402

25,402

25,402

25,402

25,402

25,402

25,402

25,402

25,402

25,402

25,402

25,402

25,402

3,179,114

96,071

96,058

96,102

96,091

96,057

97,191

97,170

97,155

97,172

97,176

97,214

97,280

97,242

97,268

97,297

97,251

97,329

97,332

97,277

97,312

97,325

97,239

97,266

120,793

9,171

6,571

6,571

6,571

5,910

6,095

5,978

5,782

5,971

5,971

2,424,835

2,678,803

2,678,803

2,678,784

2,678,784

2,678,784

2,678,767

2,678,767

2,678,741

2,609,840

2,609,840

2,609,840

2,609,901

2,609,901

255,272

245,108

195,351

195,778

705,985

1,006,395

1,392,612

1,448,336

1,024,380

1,046,739

1,047,221

2,039,591

1,808,485

1,807,096

1,807,047

1,807,250

1,177,116

1,168,322

375,761

375,341

499,284

498,863

499,561

299,736

1,127,805

1,086,912

1,377,253

983,644

3,206,509

2,882,797

2,801,858

3,226,625

2,924,683

2,778,403

2,923,910

3,764,688

3,012,245

2,912,012

3,130,405

2,964,004

3,110,721

3,178,398

2,982,597

3,005,786

3,406,178

3,070,991

3,073,907

3,926,262

59,244,164

58,431,547

62,577,873

60,604,506

63,062,725

61,944,475

63,044,353

62,698,094

61,493,354

59,876,566

62,811,216

71,215,752

67,374,870

65,982,146

65,045,658

66,694,152

66,251,774

68,181,096

64,596,452

67,599,934

65,887,272

67,652,750

64,721,050

73,414,067

LIAB

ILIT

IES

TAB

LE A

.2C

ENTR

AL

BA

NK

STA

TEM

ENT

OF

LIA

BIL

ITIE

S A

ND

ASS

ETS

20

09

-20

10

(TT

Do

llars

Th

ou

san

ds)


TABLE A.3COMMERCIAL BANKS:AVERAGE DEPOSIT LIABILITIES, REQUIRED CASH RESERVES AND ACTUAL CASH RESERVESFor Period Ending September 2010

7-Oct-0914-Oct-0921-Oct-0928-Oct-09

4-Nov-0911-Nov-0918-Nov-0925-Nov-09

2-Dec-099-Dec-0916-Dec-0923-Dec-0930-Dec-09

6-Jan-1013-Jan-1020-Jan-1027-Jan-10

3-Feb-1010-Feb-1017-Feb-1024-Feb-10

3-Mar-1010-Mar-1017-Mar-1024-Mar-1031-Mar-10

7-Apr-1014-Apr-1021-Apr-1028-Apr-10

5-May-1012-May-1019-May-1026-May-10

2-Jun-109-Jun-1016-Jun-1023-Jun-1030-Jun-10

7-Jul-1014-Jul-1021-Jul-1028-Jul-10

4-Aug-1011-Aug-1018-Aug-1025-Aug-10

1-Sep-108-Sep-1015-Sep-1022-Sep-1029-Sep-10

ReservePeriodEnding

AverageDeposit

Liabilities($000)

Required Cash

Reserves ($000)

AverageCash

Reserves($000)

42,893,58843,170,45943,483,09443,869,453

44,098,70644,530,97144,981,96545,369,388

45,817,81246,303,98846,772,86547,077,72947,386,318

48,044,52948,665,92449,065,87649,274,853

49,069,63548,857,64748,929,64149,032,159

49,125,34749,275,55349,196,09449,256,67149,318,612

49,342,69449,423,96549,547,67649,444,771

49,444,77148,947,26548,769,15948,752,329

49,091,49449,306,15349,472,61249,704,28249,866,971

50,016,32450,276,68850,310,78850,233,035

50,020,22949,794,19449,791,57149,844,965

50,036,92450,253,13550,420,45350,676,75950,888,282

7,291,9107,338,9787,392,1267,457,807

7,496,7807,570,2657,646,9347,712,796

7,789,0287,871,6787,951,3878,003,2148,055,674

8,167,5708,273,2078,341,1998,376,725

8,341,8388,305,8008,318,0398,335,467

8,351,3098,376,8448,363,3368,373,6348,384,164

8,388,2588,402,0748,423,1058,405,611

8,405,6118,321,0358,290,7578,287,896

8,345,5548,382,0468,410,3448,449,7288,477,385

8,502,7758,547,0378,552,8348,539,616

8,503,4398,465,0138,464,5678,473,644

8,506,2778,543,0338,571,4778,615,0498,651,008

10,811,97311,141,32810,726,75310,924,034

9,349,14610,025,9509,720,3029,501,082

10,428,44910,898,51810,194,29910,318,6879,943,914

9,421,7119,499,5789,284,9279,610,121

10,617,3379,949,03710,007,1209,685,863

9,774,97310,150,95610,248,66810,458,64410,193,612

10,622,05610,219,8719,104,1259,529,417

9,870,58710,095,37010,601,99610,623,878

10,688,04911,250,13911,489,18311,548,01911,850,756

10,664,81310,934,37010,645,16310,347,333

10,994,94211,072,39211,184,84211,163,797

11,288,19711,691,89111,842,28611,813,54911,159,890



7-Oct-0914-Oct-0921-Oct-0928-Oct-09

4-Nov-0911-Nov-0918-Nov-0925-Nov-09

2-Dec-099-Dec-0916-Dec-0923-Dec-0930-Dec-09

6-Jan-1013-Jan-1020-Jan-1027-Jan-10

3-Feb-1010-Feb-1017-Feb-1024-Feb-10

3-Mar-1010-Mar-1017-Mar-1024-Mar-1031-Mar-10

7-Apr-1014-Apr-1021-Apr-1028-Apr-10

5-May-1012-May-1019-May-1026-May-10

2-Jun-109-Jun-1016-Jun-1023-Jun-1030-Jun-10

7-Jul-1014-Jul-1021-Jul-1028-Jul-10

4-Aug-1011-Aug-1018-Aug-1025-Aug-10

1-Sep-108-Sep-1015-Sep-1022-Sep-1029-Sep-10

ReservePeriodEnding

AverageDeposit

Liabilities($000)

Required Cash

Reserves ($000)

AverageCash

Reserves($000)

2,359,6112,366,5332,360,7442,354,800

2,349,8332,341,8782,337,0782,331,967

2,331,0112,338,3562,340,7002,344,4332,342,778

2,328,4782,315,0562,293,3782,280,956

2,277,7442,279,8002,288,9782,290,167

2,285,8562,270,2782,253,7442,237,5672,222,133

1,715,1442,173,8562,134,2002,095,767

2,071,2782,051,4222,025,6332,004,256

1,974,0441,972,1561,983,9441,989,6002,003,822

1,996,1892,007,4672,018,6672,029,456

2,042,7892,039,0222,036,9112,040,378

2,041,0002,042,8892,069,6112,086,6442,108,600

212,365212,988212,467211,932

211,485210,769210,337209,877

209,791210,452210,663210,999210,850

209,563208,355206,404205,286

204,997205,182206,008206,115

205,727204,325202,837201,381199,992

154,363195,647192,078188,619

186,415184,628182,307180,383

177,664177,494178,555179,064180,344

179,657180,672181,680182,651

183,851183,512183,322183,634

183,690183,860186,265187,798189,774

212,484213,125212,935212,411

212,240211,942211,586211,237

211,236211,796211,995214,639212,218

210,984209,812207,928206,853

206,601206,887207,868234,282

207,893206,606205,239203,386202,083

186,355205,680202,167198,749

196,580186,845184,484182,525

179,726179,310180,306180,751182,011

181,310182,287183,210184,102

185,259187,457184,720185,037

185,037185,227187,612189,449191,160


TABLE A.4NON-BANK FINANCIAL INSTITUTIONS:AVERAGE DEPOSIT LIABILITIES, REQUIRED CASH RESERVES AND ACTUAL CASH RESERVESFor Period Ending September 2010

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2010

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