BRITISH TRADE AND COMMERCE BANK LIMITED INCOME STATEMENT (IN US DOLLARS) FOR THE FIFTEEN MONTHS ENDED DECEMBER 31, 1998 The accompanying notes form an integral part of these financial statements. -3 BRITISH TRADE AND COMMERCE BANK LIMITED STATEMENT OF CASH FLOWS FOR THE FIFTEEN MONTHS ENDED DECEMBER 31, 1998 The accompanying notes form an integral part of these financial statements. BRITISH TRADS AND COMMERCE BANK LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE FIFTEEN MONTHS ENDED DECEMBER 31, 1998 1. INCORPORATION AND NATURE OF BUSINESS British Trade and Commerce Bank Limited, was incorporated on The objects of the Company include, but are not limited to, the carrying on in Dominica and other countries of the business of banking, including off-shore banking. The authorized share capital of the company is US$3 million, divided into 30,000 shares of US$ 100. each. The Government of the Commonwealth of Dominica, issued to the Bank, a license to conduct off-shore banking business dated March 27, 1997. These financial statements relate to business transacted in accordance with that license. The accompanying financial statements present the assets, liabilities and operations of the various entities which operate the various investment programs for British Trade and Commerce Bank Limited. They do not reflect any of the assets or liabilities of any of the various wholly-owned or controlled subsidiaries of the Bank. Operations of those subsidiaries were reported as not material for the period. (a) Generally accepted accounting principles The statements are drawn up on the accrual basis and on historical cost conventions, and are in compliance with generally accepted accounting principles. -5 4 3. BRITISH TRADE AND COMMERCE BANK LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE FIFTEEN MONTHS ENDED DECEMBER 31, 1998 SIGNIFICANT ACCOUNTING POLICIES (cont'd) (b) (c) (d) (e) Depreciation Depreciable assets are depreciated on the straight line basis at the following rates estimated to write them off over the period of their useful lives. Motor vehicles Computer equipment Other office equipment, furniture & fittings 20t 251 15% Organization and Pre-operating expenses, and leasehold improvements are amortized on a straight line basis over a five-year period (at 20%). Leasehold The Bank signed a lease agreement for five years effective August 1, 1997, at an annual rent of US$ 48,000. The total rent payable over the five year period was recorded in the financial statements as a debit to "Office Lease" account and a credit to "Office Lease Payable". Revenue Recognition The bank provides various services for its clients which are charged for on the basis of percentage fee for the success of the transaction. Therefore, the amount of income and the return on assets is higher than a normal commercial bank. These fees are recorded when earned. Such a policy may tend to cause fluctuations in earnings on a period to period comparison. CASH AND DUB FROM BANKS At December 31, 1998 the balance included $10m in Union Rank of BRITISH TRADE AND COMMERCE BANK LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE FIFTEEN MONTHS ENDED DECEMBER 31, 1998 5. LOANS, DEBENTURES AND OTHER RECEIVABLES At December 31, 1998 the balance comprised the following: The debentures and promissory notes are interest bearing at rates which approximate 10% per annum. All payments are current and the balances are due within the next year. Leasehold improvments represent the cost to remodel the offices in 73-779 D-01--26 |