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2014 ANNUAL REPORT
2 Significant accounting policies
(continued)
2.6 Summary of significant accounting policies
(continued)
h) Employee benefits
(continued)
ii) Other post-retirement obligations
The Group provides post-retirement medical benefits to its retirees. The entitlement to these benefits is usually based on the
employee remaining in service up to retirement age and the completion of a minimum service period. The expected costs of
these benefits are accrued over the period of employment, using a methodology similar to that for defined benefit pension plans.
Independent qualified actuaries carry out a valuation of these obligations.
iii) Profit sharing scheme
The Bank operates an employee profit sharing scheme, which is administered by Trustees in accordance with terms outlined in the
Profit Sharing Scheme Rules. The profit share to be distributed to employees each year is based on a specific formula outlined in
the Profit Sharing Scheme Rules, and employees have the option to receive their profit share allocation in cash (up to a maximum of
75% of the total entitlement) and receive the balance in ordinary shares of the Bank. The number of shares to be allocated is based
on the employees’total entitlement less the cash element, divided by the average price of the unallocated shares purchased by the
Trustees. The Bank accounts for the profit share, as an expense, through the consolidated statement of income.
i) Taxation
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantially enacted by the statement of financial position date and are expected to apply when the
related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised where it is probable that future taxable profit will be available against which the temporary
differences can be utilised.
Income tax payable on profits, based on the applicable tax law in each jurisdiction, is recognised as an expense in the period in which
profits arise. The tax effects of income tax losses available for carry forward are recognised as an asset when it is probable that future
taxable profits will be available against which these losses can be utilised.
j) Statutory reserves
The Trinidad and Tobago Financial Institutions Act 2008 requires that a minimum of 10% of the net profit after deduction of taxes in each
year be transferred to a statutory reserve account until the balance on this reserve is not less than the paid-up capital.This requirement
was met as at June 2012. In accordance with the Trinidad and Tobago Financial Institutions Act 2008, the Bank is also required to maintain
statutory reserves of at least 20 times deposit liabilities.
The Banking Act of Grenada (No. 19 of 2005), requires that a minimum of 20% of the net profit after deduction of taxes in each year be
transferred to a statutory reserve fund until the balance on this reserve is equal to the paid-up capital. These reserves are not available
for distribution as dividends or for any other form of appropriation.
The Guyana Financial Institutions Act 1995 requires that a minimum of 15% of the net profit after deduction of taxes in each year be
transferred to a statutory reserve fund until the balance on this reserve is equal to the paid-up or assigned capital.
The Offshore Banking Act of Barbados requires that a minimum of 25% of the net profits of each year before any dividend is paid, be
transferred to a statutory reserve account until the balance on this reserve is not less than the issued and paid-up capital.
The Barbados Financial Institutions Act requires that a minimum of 25% of the net income in each year be transferred to a general
reserve account until the balance on this reserve is not less than the paid-up capital.
