87 SEPARATE FINANCIAL STATEMENTS 2024 Barbados Public Workers’ Co-operative Credit Union Limited Notes to the Separate Financial Statements March 31, 2024 (expressed in Barbados dollars) 53 21 Related party disclosures …continued Other transactions …continued Allied Co-operators Inc. (ACI) was established to offer co-operative shared services to credit unions and their members. Phase 1 of its development will provide assurance services to affiliated credit unions of the Barbados Co-operative Credit Union League Ltd. These services will include corporate governance, operational risk management, compliance and internal audit. In subsequent phases of its expansion ACI will provide similar services to micro, small and medium sized enterprises (MSMEs) and not for profit organizations locally. Additionally, it will leverage the brand of Capita Financial Services Inc. to further expand into the OECS and other Caribbean regions. Finally, ACI’s suite of services will be broadened to include finance and financial planning, information technology, strategic planning, marketing, customer experience and research. The capitalisation of ACI as a wholly owned subsidiary of the Credit Union invoked section 34(A) of the Cooperative Societies Act, CAP. 378A, which states that any such investments shall be limited to ten percent of the Credit Union’s statutory reserves. In accordance with the Co-operative Societies Act, CAP. 378A, on May 19, 2020 the Credit Union sought approval from the Financial Services Commission to capitalize its fully owned subsidiary Allied Co-operators Inc. in the amount of $1,000,000. The Credit Union completed the investment of $1,000,000 for 10,000 shares in ACI on July 5, 2021 for sole ownership in the subsidiary. Securitized deposit On July 28, 2023, the Credit Union negotiated an agreed the placement of a deposit of Thirty Million Barbados dollars ($30,000,000) with its subsidiary Capita Financial Services Inc. This deposit is secured by a block of mortgage loans held and maintained by Capita with an average life span of 22 years and a total collateralized market value in the amount of $30,000,000. An interest charge of 2% of the outstanding principal balance shall be paid to the Credit Union from the aggregate interest collected by Capita Financial Services Inc. on a monthly basis until such time as the deposit is fully amortized. As at March 31, 2024 the deposit held a balance of $29,400,141. Total interest payments for the year ended March 31, 2024 totalled $299,886.
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