Islelsle of Man Depositors' Compensation SchemeScheme
DEPOSITORS' COMPENSATION SCHEME
(in relation toto thethe BankingBanking BusinessBusiness (Compensation(Gompensation ofof Depositors)Depositors) Regulations 1991)1991)
ANNUAL REPORTREPORT
OF THE SCHEMESCHEME MANAGERMANAGER
FOR THETHE YEARYEAR ENDEDENDED
31 MARCH 20102010 Islelsle ofof ManMan Depositors' Compensation SchemeScheme
CONTENTSCONTENTS
PAGE
Scheme ManagerManager 2
Officers && ProfessionalProfessional AdvisorsAdvisors 3
Report of the Scheme Manager 4
Statement of the Scheme Manager'sManager's responsibilitiesresponsibilities 7
Auditors'Auditorc'Report Report 8I
Incomelncome & Expenditure Account 9
Balance Sheet 10l0
Notes to the FinancialFinancial StatementsStatements 11
Appendix AA —- SchemeScheme Participants 15
I Islelsle of Man Depositors'Depositors' Compensation Scheme
SCHEME MANAGER
Inln accordance with SectionSection 55 ofof the the Banking Banking Business Business (Compensation (Gompensation ofof Depositors) Depositors) Regulations 1991, made under Section 21 ofof thethe FinancialFinancial Supervision Supervision ActAct 1988, 1988, the the Financial Supervision Commission ("the("the Scheme Managef)Manager") waswas charged withwith thethe administration of the Depositors'Depositors' CompensationCompensation Scheme.Scheme.
On 99 OctoberOctober 20082008 thethe Banking Banking Business Business (Compensation (Compensation of of Depositors) Depositors) Regulations Regulations 1991 were revoked and replaced by the CompensationCompensation ofof DepositorsDepositors RegulationsRegulations 2008,2008, except that they shall continue to apply for the purposes ofof the fundfund establishedestablished followingfollowing the default of thethe BankBank ofof CreditCredit CommerceCommerce Internationallnternational S.A. inin respectrespect ofof whichwhich thethe Scheme Manager mademade aa determination on on 1616 JanuaryJanuary 1992, asas if theythey hadhad beenbeen remade under Section 2525 ofof thethe FinancialFinancial ServicesServices ActAct 20082008 for for these these purposes. purposes.
The Financial Services Act 2008,2008, ScheduleSchedule 11 statesstates "the'the Commission shallshallconsr'sf consist of not less/ess thanfhan sevenseyen qualified persons appointed byby thethe Treasury, subject toto thethe approval of Tynwald".
Tynwald hashas approved the following personspersons to bebe membersmembers ofof thethe Commission:Commission:
Date first electedelected
MrsMrsRVPenn(Ghairman) R V Penn (Chairman) March 19931993
Mr J R Aspden July 19981998
Mr J Cashen JanuaryJanuary 20022Q02
Mr T Cullen June 20012001
Mr B Stott June 20012001
Mr G KarranKarran July 2007
MrMrA A Smith July 2007
2 Islelsle of Man Depositors'Depositors' CompensationCompensation SchemeScheme
OFFICERS AND PROFESSIONAL ADVISERSADVISERS
SECRETARYSECRETARY ADVOCATESADVOCATES
Mr A J KermodeKermode CatlinCallin Wild Financial SupervisionSupervisíon CommissionCom mission Number Fifty,Fifty, Athol StreetStreet PPOBoxSS 0 Box 58 Douglas Finch HillHillHouse House Islelsle of Man Bucks Road IM1IMl 1JB1JB Douglas Islelsle of Man IM99 1DT
AGENTS BANKERSBAA'KERS
KPMG LLCLLC Islelsle of Man BankBank LimitedLimìted POBoxPOBox93 93 Head Office Heritage CourtCourt PPOBox13 0 Box 13 41 AtholAtholStreet Street 2 Athol Street Douglas Douglas Islelsle of Man Islelsle of Man IM99 1HN1HN IM99 1ANIAN
AUDITORSAUDITORS
PricewaterhouseCoopers Sixty Circular RoadRoad Douglas Islelsle of Man IM1 1SA1SA
3 Islelsle of Man Depositors'Depositors' CompensationGompensation Scheme
REPORT OF THE SCHEME MANAGER
INTRODUCTIONINTRODUCTION
This is the nineteenthnineteenth AnnualAnnual ReportReport byby thethe FinancialFinancial SupervisionSupervision CommissionCommission inin its rolerole as as Scheme Scheme Manager Manager of of the the Banking Banking Business Business (Compensation (Compensation ofof Depositors) Regulations 1991, known as the Depositors'Depositors'Compensation Compensation SchemeScheme ("the Scheme").
LEGISLATIONLEGISLATION
On 99January January 1991, the Treasury, in exercise of the powerspowers conferred on itit byby Section 21 ofof thethe FinancialFinancial SupervisionSupervision ActAct 1988,1988, mademade the the Banking Banking Business Business (Compensation ofof Depositors)Depositors) RegulationsRegulations 19911991 ("the (the 1991 1991 Regulations") Regulations") (Government Circular No 47191).47/91). TheThe 1991 1991 Regulations Regulations came came into into operation operation on on 1 February 1991 and were approvedapproved byby TynwaldTynwald onon 2020 February February 1991.1991.
The 19911991 RegulationsRegulations provided forfor the establishment ofof a fundfund outout ofof which which compensation waswas paid on eligibleeligible protectedprotected depositsdeposits ifif a a Scheme Scheme participant participant licensed under the BankingBanking Act 19981998 (previously(previously thethe BankingBanking ActAct 1975) 1975) waswas deemed to have defaulted. TheThe 19911991 RegulationsRegulations furtherfurther providedprovided forfor thethe levyinglevying of contributions on other Scheme participants in order to provideprovide moniesmonies forfor thethe establishment of the fund,fund, uponupon aa defaultdefault byby aa SchemeScheme participant. participant.
On 99 OctoberOctober 20082008 thethe 1991 1991 Regulations Regulations werewere revokedrevoked andand replacedreplaced byby the the Compensation of DepositorsDepositors RegulationsRegulations 20082008 ("2008("2008 Regulations"),Regulations"), exceptexcept thatthat they shall continue to applyapply forfor thethe purposespurposes ofof thethe fundfund establishedestablished followingfollowing thethe default of the BankBank of CreditCredit CommerceCommerce Internationallnternational S.A.S.A. inin respectrespect ofof whichwhich thethe Scheme Manager made a determination on 16l6 January 1992,lgg2, asas ifif theythey hadhad beenbeen remade under Section 25 of the Financial Services Act 2008 forfor thesethese purposes.purposes.
As aa resultresult ofof thethe Financial Financial Services Services ActAct 2008, 2008, thethe 2008 2008 Regulations Regulations applyapply toto "deposit takers'takers" rather than bankingbanking institutions.ínstitutions. However, However, as as building building societies societies are excluded from the SchemeScheme in thethe 20082008 Regulations,Regulations, the effecteffect isis thatthat thethe scope of the 2008 RegulationsRegulations is the samesame asas thethe 19911991 RegulationsRegulations inin relationrelation toto Scheme participants.
ACTIVATION OF THE SCHEME
On 55 JulyJuly 1991 1991 international international regulatoryregulatory actionaction co-ordinatedco-ordinated by thethe Bank Bank of of England led to the closure ofof the BankBank ofof CreditCredit andand CommerceCommerce Internationallnternational S.A.S.A. (in liquidation) ("BCCI S.A."),S.4."), a Luxembourg bankingbanking company,company, thethe BankBank ofof CreditCredit and CommerceCommerce Overseas Limited, a CaymanianCaymanian bank,bank, andand various various other other companies inin thethe BCCIBCCI Group.Group.
On 1616 January January 1992 1992 the the Financial Financial Supervision Supervision Commission, Commission, as as Scheme Scheme Manager, determined that BCCI S.A. was in default inin termsterms ofof RegulationRegulation 4(1)4(1) ofof the 19911991 Regulations.Regulations. ThisThis followedfollowed thethe makingmaking ofof a a winding-up winding-up orderorder by by the the High Court in the Islelsle ofof ManMan inin respectrespect ofof thethe affairsatfairs ofof BCCIBCCI S.A.S.A. inin thethe Island lsland and winding-up orders inin Luxembourg,Luxembourg, thethe CaymanCayman Islandslslands andand thethe UK.UK.
4 Islelsle of Man Depositors'Depositors' CompensationCompensation SchemeScheme
DEFAULT BYBY BCCIBCCIS.A. S.A.
The statutory cut-off date for submission of claimclaim forms passed on 1616 JulyJuly 19931993 .
LEVIESLEVIES
During the year ended 31 MarchMarch 2010,2010, nono levieslevies werewere made.made.
DIVIDENDDIVIDEND DISTRIBUTIONDISTRIBUTION
During the year ended 31 MarchMarch 2010,2010, thethe liquidatorsliquidators ofof BCCIBCCI SASA mademade furtherfurther payments to the SchemeScheme ManagerManager totallingtotalling £426.€426.
More information isis provided inin note 6 onon pagepage 1313 ofof the the attached attached Financial Financial Statements.
To date, a total ofof £54,164,375854,164,375 hashas beenbeen receivedreceived from the liquidators.liquidators. AsAs at at 31 31 March 20102O1O £24,477,931824,477,931 of this had beenbeen due,due, and therefore paid, to claimants.claimants.
The remainingremaining £29,686,444Ê29,686,444has has formed part ofof the generalgeneral poolpool of fundsfunds heldheld byby the SchemeScherne ManagerManager andand enabledenabled repaymentsrepayments ofof £23,471,495 €23,471,495 (equivalent(equivalent toto 100% of total levieslevies imposedimposed on thethe banks)banks) toto bebe made made toto the the contributing contributing scheme participants.
There still remainremain 99 accounts accounts wherewhere thethe Scheme Scheme Manager Manager hashas not not paid paid compensation andand has not receivedreceived aa dividenddividend distributiondistribution fromfrom thethe liquidator liquidator who hashas stillstillto to resolveresolve them.them.
The total dividends declareddeclared byby the liquidatorsliquidators toto datedate amountamount toto 86.586.5 perper cent.cent.
RETIREMENTRETIREMENT / APPOINTMENT OFOF COMMISSIONERSCOMMISS'O'VERS
There havehave beenbeen nono changes duringduring thethe yearyear andand toto thethe datedate ofof signingsigning thethe reportreport and financial statements forfor thethe yearyear endedended 31 31 March March 2010.2010.
The SchemeScheme ManagerManager adopts a strictstrict policypolicy inin determining determining andand managingmanaging thethe conflicts of interest whichwhîch maymay arisearise betweenbetween membersmembers ofof thethe CommissionCommission andand Scheme participants. Informationlnformation regarding regarding Commission Commission members'members' conflicts conflicts of of interest is available from the Commission'sCommission's websitewebsite www.fsc.qov.im.www.fsc,qov.im,
RETIREMENTRETIREMENT / APPOINTMENTAPPOINTMENT OFOF SECRETARY
There have beenbeen no changeschanges duringduring thethe yearyear andand toto thethe datedate ofof signingsigning thethe report report and financial statements for thethe yearyear endedended 3131 MarchMarch 2010.2010.
PAYMENT OF COMPENSATIONCOMPENSAT'OIV
During the year, the Scheme ManagerManager mademade nono compensationcompensation paymentspayments
As atat 3131 MarchMarch 2010,2010, therethere remainedremained 99 claimsclaims ofof a a general general naturenature thatthat had had not not been resolved duedue to the liquidatorslíquidators still notnot beingbeing inin aa position position toto give give the the
5 Islelsle of Man Depositors' CompensationCompensation SchemeScheme
Scheme Manager the necessary confirmations. TheThe totaltotal potentialpotential compensationcompensation payable on these claims amounts toto Ê5,130.£5,130. ForFor suchsuch claims,claims, paymentpayment will onlyonly become due ifif thethe amountsamounts areare acceptedaccepted byby thethe liquidatorliquidator andand dividendsdividends areare received intointo the Scheme. AsAs thethe levellevel ofof dividenddividend hashas nownow reachedreached 86.5%86,5% therethere is nono future costcost toto thethe Scheme.Scheme.
SCHEMESCHEME PARTICIPANTSPARTICIPANTS
Appendix A toto thisthis ReportReport listslists allall participants participants inin the the Isle lsle of of Man Man Depositors' Depositors' Compensation SchemeScheme duringduring thethe yearyear endedended 3131 MarchMarch 2010. 2010.
FINANCIALFINANCIALSTATEMENTS STATEMENTS FORFOR THETHE YEARYEAR ENDEDENDED 3131 MARCH 20102O1O
The auditedaudited financial statements forfor thethe year ended 31 March 2010 are set outout as partpart ofof thisthis annualannual report.report.
COMPENSATION FUNDFUND
Inln accordanceaccordance with thethe 19911991 Regulations,Regulations, agreement was reached in the yearyear ended 31 MarchMarch 2010 toto distributedistribute aa substantial partpart ofof thethe compensationcompensation fundfund toto original participatingparticipating banks in proportionproportion to theirtheir original original contributionscontributions toto the the Scheme. TheThe total total of of such such distributions distributions accruedaccrued forfor thethe yearyear endedended 3131 March March 2010 was £10,754,449.î.10,754,449. In ln thethe year year endedended 31 31 March March 20102010 thethe SchemeScheme ManagerManager formally authorised paymentspayments ofof Ê9,673,346.£9,673,346. OnOn 2727 May May 20102010 the the Scheme Scheme Manager formally authorised a further tranchetranche ofof paymentspayments totallingtotalling £1,033,451.€1,033,451. The remainingremaining £47,652847,652 hadhad notnot beenbeen formally authorisedauthorised asas atat thethe datedate ofof signingsigning the ReportReport andand Accounts.Accounts.
DEPOSITORS'DEPOSITORS, COMPENSATIONCOMPE,\,SAT,Oil SCHEME IN RELATIONRELATION TO THE COMPENSATIONCOMPEÍVSAT'Oil OF DEPOSITORSDEPOS'TORS REGULATIONSREGULATIONS 20082OO8
A separateseparate annualannual reportreport isis preparedprepared coveringcovering thethe above,above, includingincluding the financialflnancial statements inin relation toto the fundfund thatthat waswas createdcreated followingfollowing the defaultdefault byby Kaupthing SingerSinger && FriedlanderFriedlander (Isle (lsle of of Man) Man) Limited Limíted — - inin liquidation.liquidation.
APPROVEDAPPROVED BY THETHE FINANCIALFINANCIAL SUPERY'SIONSUPERVISION COMMISSIONCOMMISS'O/V ASAS SCHEME MANAGERMANAGER OFOF THETHE DEPOSITORS'DEPOSITORS' COMPENSATIONCOMPENSAT'ON SCHEMESCHEME ON 1 JULY 20102O1O ANDAND SIGNEDSIGNED ONOAJ ITS BEHALFBEHALF BY:BY: 'TS
Mrs R V PennPenn MrMrJ J 1.____ Asp
- ( CHAIRMAN COMMISSIcoMMrsst NERER
6 Islelsle of Man Depositors'Depositors' CompensationCompensation SchemeScheme
Statement of Scheme Manager'sManager's responsibilities in respect ofof thethe SchemeScheme Manager's report and financial statementsstatements
The SchemeScheme ManagerManager isis responsibleresponsible forfor preparingpreparing thethe Scheme Scheme Manager'sManager's Report Report and and the financialfinancial statementsstatements inin accordanceaccordance withwith applicableapplicable lawlaw and and regulations. regulations.
The SchemeScheme ManagerManager isis responsible responsible forfor preparing preparing thethe financial financial statementsstatements in in accordance with applicableapplicable lawlaw andand United United Kingdom Kingdom Accounting Accounting Standards Standards (United (United Kingdom Generally Accepted Accounting Practice) in accordanceaccordance with thethe Accounts andand Audit RegulationsRegulations 2007 to 20082008 andand thethe AuditAudit DirectionsDirections 2008,2008, bothboth mademade underunder the the Audit Act 2006,2006, andand the the Banking Banking Business Business (Compensation (Compensation ofof Depositors) Deposítors) Regulations Regulations 1991 - 2007 mademade underunderthe the FinancialFinancial SupervisionSupervision ActAct 1988. 1988.
The financial statements are reqüiredrequired by law to give a true andand fair viewview ofof thethe statestate ofof affairsatfairs of the SchemeScheme andand ofof thethe incomeincome andand expenditureexpenditure ofof thethe SchemeScheme forfor thethe year.year.
Inln preparing thesethese financialfinancial statementsstatements thethe SchemeScheme ManagerManager is is required required to: to:
■. select suitablesuitable accountingaccounting policiespolicies andand thenthen applyapply themthem consistently;consistently;
• make judgements andand estimates that are reasonablereasonable andand prudent;prudent; andand
■¡ prepare the financialfÌnancial statements onon the goinggoing concernconcern basis unlessunless itit isis inappropriate to presumepresume thatthat the SchemeScheme willwillcontinue continue inin operation.operation.
The Scheme ManagerManager isis responsibleresponsible forfor keepingkeeping properproper accountingaccounting recordsrecords thatthal disclose disclose with reasonablereasonable accuracyaccuracy at any time the financial positionposition of thethe SchemeScheme and toto enableenable the SchemeScheme ManagerManager toto ensureensure thatthat thethe financialfinancial statementsstatements complycomply withwith thethe AccountsAccounts and Audit RegulationsRegulations 20072007 to 2008 and the Audit DirectionsDirections 2008,2008, bothboth mademade underunder thethe Audit Act 2006,2006, andand thethe Banking Banking BusinessBusiness (Compensation (Compensation ofof Depositors) Depositors) RegulationsRegulations 1991 - 2007 mademade underunder thethe FinancialFinancial SupervisionSupervision ActAct 1988. 1988. The The Scheme Scheme ManagerManager is is also responsibleresponsíble forfor safeguardingsafeguarding the assetsassets ofof thethe Scheme Scheme and and for for taking taking reasonable reasonable steps for the preventionprevention andand detectiondetection ofof fraudfraud andand otherother irregularities.irregularities.
By order of the Scheme ManagerManager 1 July 2010
MrMrA A J Kermode Secretary
7 Islelsle of Man Depositors'Depositors' CompensationCompensation SchemeScheme
Independentlndependent auditors' reportreport toto thethe SchemeScheme ManagerManager andand thethe TreasuryTreasury
We havehave auditedaudited thethe accompanying accompanying financialfinancial statements statements ofof the the Depositors' Depositors' Compensation Compensation Scheme whichwhich comprisecomprise the the BalanceBalance Sheet Sheet as as ofof 31 MarchMarch 20102010 andand thethe income income andand expenditure account for the year thenthen endedended andand a a summary summary of of significant significant accounting accounting policies policies and other explanatoryexplanatory notes.notes.
Scheme Managers'Managers' ResponsibilityResponsibility forfor thethe FinancialFinancial StatementsStatements The Scheme Manager is responsibleresponsible for thethe preparationpreparation andand fairfair presentationpresentation ofof thesethese financial financial statements inin accordance withwith applicable lsleIsle of ManMan lawlaw and and United United Kingdom Kingdom Accounting Accounting Standards (United KingdomKingdom GenerallyGenerally AcceptedAccepted AccountingAccounting Practice). Practice). This This responsibility responsibility includes:includes; designing, implementing and maintainingmaintaining internalinternal controlcontrol relevantrelevant toto thethe preparationpreparation andand fair presentation of financialfinancial statementsstatements thatthat areare freefree fromfrom material material misstatement,misstatement, whetherwhether duedue to to fraud oror error;error; selectingselecting andand applying applying appropriateappropriate accountingaccounting policies;policies; andand making making accounting accounting estimates that are reasonablereasonable inin thethe circumstances.circumstances.
Auditors' ResponsibilityResponsibi I ity Our responsibility is to express an opinionopinion onon these financialfinancial statementsstatements basedbased onon ourour audit.audit. ThisThis report, including thethe opinion, has been prepared for and only forfor thethe SchemeScheme ManagerManager andand thethe Treasury in accordance withwith thethe AuditAudit Act 2006 and for no other purpose. WeWe dodo not, not, in in giving giving this opinion, accept or assumeassume responsibilityresponsibility forfor any other purpose or toto anyany otherother personperson toto whom this report is shown or intointo whosewhose handshands itit maymay comecome savesave wherewhere expresslyexpressly agreedagreed byby ourour prior consent inin writing.writing.
We conducted our audit inin accordance withwith Internationallnternational StandardsStandards onon Auditing.Auditing. ThoseThose StandardsStandards require that we complycomply with ethicalethical requirementsrequirements and plan andand performperform thethe auditaudit toto obtain obtaín reasonable assurance whetherwhether thethe financialfinancial statementsstatements are arefree free from from material material misstatement. misstatement.
An auditaudit involvesinvolves performing performing proceduresprocedures to obtainobtain auditaudit evidence evidence aboutabout the the amounts amounts and and disclosures in the financialfinancial statements.statements. TheThe procedures procedures selectedselected dependdepend onon thethe auditors' auditors' judgment, including thethe assessment ofof the risksrisks ofof material material misstatement misstatement ofof thethe financial fìnancial statements, whetherwhether duedue toto fraud oror error. error. In ln making making those those risk risk assessments, assessments, thethe auditor auditor considersconsíders internal control relevantrelevant toto thethe entity'sentity's preparation preparation andand fair fair presentation presentation of of the the financial financial statements in order to designdesign auditaudit proceduresprocedures thatthat areare appropriateappropriate inin the the circumstances, circumstances, butbut not not for the purposepurpose of expressingexpressing an opinionopinion onon thethe effectivenesseffectiveness ofof thethe entity'sentity's internalinternal control.control. An An audit alsoalso includesincludes evaluatingevaluating thethe appropriateness appropriateness of accountingaccounting policiespolicies usedused andand the the reasonableness ofof accounting estimates made by thethe SchemeScheme Manager,Manager, asas wellwell as as evaluating evaluating the overall presentationpresentalion ofof thethe financialfinancial statements.statements.
We believe that thethe auditaudit evidenceevidence wewe have have obtained obtained is is sufficient sufficient and and appropriate appropriate to to provide provide a a basis for ourour auditaudit opinion.opinion.
Opinion Inln our opinionopinion thethe accompanyingaccompanying financial statements givegive aa truetrue andand fairfair view view of of the the financial financial affairs of thethe SchemeScheme asas ofof 3131 March March 20102010 forfor the the year year then then ended ended in in accordance accordance with with United United Kingdom Generally Accepted AccountingAccounting Practice and havehave beenbeen preparedprepared inin accordanceaccordance withwith regulations made under the Audit Act 20062006 andand complycomply withwith the the requirements requirements of of the the Banking Banking Business (Compensation(Compensation of Depositors)Depositors) RegulationsRegulations 19911991 —- 2007 made underunder thethe Financial Financial Su rvisi ActAct 1988. 1988
ricewaterhouseCoopersoopers Chartered Accountants 1 fU-l X0 t 0
8I Islelsle ofof ManMan Depositors'Depositors' CompensationGompensation SchemeScheme Incomelncome andand expenditureexpenditure accountaccount forfor thethe year endedended 3131 MarchMarch 20102010
NoteNofe 20102010 20092009 £Ê £â £Ê £Ê
Incomelncome DividendsDividends receivedreceived fromfrom LiquidatorLiquidator 66 426426 1,104,8441,104,844 BankBank interestinterest receivablereceivable 2b 21,005 426,460426,460
21,43121,431 1,531,304
Expenditure Legal andand professionalprofessional feesfees 4,726 7,925 Scheme agents'agents'costs costs 16,49119,491 49,47249,472 Administration costscosts 5,000 10,000 Telephone 45 67 Audit fee 5,965 4,095 Bank charges 1,754 33
(33,981)(33,98r) (71,592)(71,5e2)
(Shortfall)/Excess ofof incomeincome overover expenditure for the year (12,550) 1,459,712
Dividend surplussurplus 6 (559,823) Distributions to original participating banks 2g (10,754,449)(10,7il,4/.91 -
Compensation fund brought fonrardforward 11,754,44911,754,49 10,854,560
Compensation fund carriedcanied forward 987,450 11,754,449
The notes on pages 1111 toto 1414 formform partpart of of thesethese financialfinancial statements.statements,
99
Islelsle of Man Depositors'CompensationDepositors' Compensation Scheme
Balance sheet as at 31 March 2010
NoteNote 2010 2009 £Ê £Ê £I £€
Current assets Cash at bankbank 2,824,489 12,366,627 Sundry debtors 1,543'1,543 7,330 Prepayments and accruedaccrued income 19l9 2,806
2,826,051 12,376,763
Current liabilitiesliabilities Accruals 20,940 4,000 Other creditors 7 1,817,661 618,314
(1,838,601) (622,314)
Net current assetsassets 987,450 11,754,44911,7U,449
Represented byby Compensation fund 4 987,450 11,754,44911,7U,449
These financial statements were approved by the SchemeScheme Manager on 11 JulyJuly 20102010 andand signed onon itsits behalfbehalf by:by:
Q-^^}** ,.------
Mrs RRV V PennPenn MrMrJ J R As den Commissioner Commis& er
The notesnotes onon pagespages 1111 tolo 1414 formform partpart ofof thethe financialfinancial statements.statements.
It00 Islelsle ofof Man Depositors' CompensationCompensation SchemeScheme
NotesNotes (forming(forming part of the financialfìnancialsfafemenfs statements for thethe year ended 3131 MarchMarch 2010)2010)
1 Constitution
The Islelsle ofof Man Man Depositors' Depositors' Compensation Compensation SchemeScheme waswas constituted constitr¡ted underunder thethe Financial SupervisionSupervision Act Act 19881988 and governedgoverned byby the the Banking Banking Business Business (Compensation(Compensation ofof Depositors) RegulationsRegulations 1991-2007. 1991-2007. On 9g OctoberOctober 20082008 the the Banking BusinessBusiness (Compensation(Compensation of Depositors) Depositors) RegulationsRegulations 19911991 ("1991 ('1991 Regulations") werewere revoked and replacedreplaced byby thethe Compensation Compensation ofof Depositors Depositors Regulations 2008 ("2008('2008 Regulations") except that they shall continuecontinue to applyapply forfor thethe purposespurposes of thethe fundfund establishedestablished following thethe default of thethe BankBank ofof CreditCredit Commerce lnternationalInternational S.A.S.A. inin respect of which thethe SchemeScheme ManagerManager mademade aa determination on 1616 January 1992,1992, asas ifif they hadhad beenbeen remaderemade underunder SectionSection 2525 of of the FinancialFinancial ServicesServices ActAct 20082008 forfor thesethese purposes.purposes.
2 Accounting policies
a BasisBasls of preparation
These financialflnancial statements havehave been preparedprepared under thethe historic historic costcost convention, and in accordanceaccordance withwith applicableapplicable UnitedUnited Kingdom Kingdom accounting accounting standards, thethe Accounts and Audit Regulations 2007 to 20082008 andand thethe Audit Audit Directions 2008,2008, bothboth made under thethe Audit ActAct 20062006 and and the the Banking Banking Business (Compensation(Compensation ofof Depositors)Depositors) RegulationsRegulations 1991 1991 — - 20072007 mademade underunder the Financial SupervisionSuperuision ActAct 1988.1988.
b Interest/nferest receivable and expenditureexpenditure incurredincuned
Interestlnterest receivablereceivable andand expenditure expenditure incurred,incurred, exceptexcept for for compensation compensation payments (see note 2d) havehave beenbeen accounted forfor onon anan accrualsaccruals basis.basis.
c LeyiesLevies receivable¡eceivable
Levies receivable from participants of the SchemeScheme areare creditedcredited toto thethe income income and expenditure account in the periodperiod inin which theythey areare levied.levied.
d Compensation payments to eligible protectedprotected depositors
Compensation payments made to depositors areare chargedcharged toto thethe income income andand expenditure account when made.
e Interestlnterest receivable and costscosfs recoverable on compensation paid
Under Regulation 15(4)(B)15(4XB) of the 19911991 RegulationsRegulations thethe Scheme Scheme ManagerManager isis entitled to recover such sums equivalent to the amountamount ofof compensationcompensation paid,paid, interest onon such compensation and and the the costscosts ofof recoveryrecovery ofof suchsuch sums.sums. NoNo account of any amount, which maymay bebe recoverablerecoverable underunder thisthis Regulation,Regulation, isis takentaken until such recovery becomesbecomes certain.ceñain. Islelsle of Man Depositors'Depositors' CompensationCompensation SchemeScheme
Notes (continued)(continued) (forming partpart of thethe financial statementsstatements forfor thethe yearyear endedended 3131 MarchMarch 2010) 2010)
fI Dividends received frcmfrom Liquidator
Dividends received from the LiquidatorLiquidator areare accounted for onon aa receivedreceived basis.basis.
g DistributionsDistributions to original participatingparticipating banksbanks
Distributions ofof the compensationcompensation fundfund toto originaloriginal participating participating banksbanks havehave been accounted for onon anan accrualsaccruals basis. basis.
h Translationlranslation ofof foreign currency
Foreign currency transactions duringduring thethe yearyear areare translatedtranslated intointo sterlingsterling atat thethe rates of exchange rulingruling onon thethe datesdates of of thethe transactions.transactions.
i Basis of preparation
The financial statements havehave beenbeen preparedprepared in accordanceaccordance withwith UKUK GAAPGAAP inin so far as compatible with thethe applicationapplication ofof thethe constitutionconstitution onon pagepage 11.11,
3 Levies
The SchemeScheme ManagerManager waswas permitted permitted under under thethe 1991 1991 Regulations Regulations governing goveming the the Depositors' Compensation SchemeScheme toto makemake successivesuccessive annualannual levieslevies on on each each Scheme participant that was aa participantparticipant atat thethe datedate of default ofof aa participantparticipant untiluntil all eligibleeligible protectedprotected depositorsdepositors ofof thethe defaulting defaulting participant pafticipant hadhad been been compensated compensated in full, in accordance with the 19911991 Regulations.Regulations.
The annualannual levylevy was equivalentequivalent toto 0.125%0.125% ofof a a participant's participant's depositdeposit liabilitiesliabilities atat a a date(s) specified by the SchemeScheme ManagerManager (subject(subject toto aa minimumminimum levy levy of of £25,000 125,000 and and a maximum levy of €250,000),£250,000). AllAll levies levies in in respect respect ofof thethe Islelsle ofof Man Man Branch Branch ofof BankBank of CreditCredit && CommerceCommerce Internationallnternational S.A.S,A. have have nownow been been called. called. When When there there were were surplus funds available thethe SchemeScheme ManagerManager authorisedauthorised repaymentrepayment ofof thethe levies. levies. The levieslevies repaid have beenbeen mademade inin proportionproportion toto thethe levieslevies receivedreceived fromfrom eacheach ofof the SchemeScheme participants.participants.
As atat 3131 MarchMarch 2010 allall levieslevies havehave been been repaid repaid inin full.full.
4 Compensation FundFund
At 3131 MarchMarch 20102010 thethe SchemeScheme has has retained retained funds,funds, whichwhich will will be be used used in in satisfying satisfying the liabilityliability to depositors ofof thethe Isle lsle of of Man Man branch branch of of Bank Bank of of Credit Credit and and Commerce Commerce Internationallnternational S.A,S,A, and coveringcovering thethe costscosts ofof administeringadministering thethe Scheme.Scheme.
5 Taxation
The SchemeScheme isis notnot subjectsubject toto Incomelncome TaxTax andand nono relief relief is is available available forfor any any expenditure.
12t2 Islelsle of ManMan Depositors'Depositors' CompensationCompensation Scheme
NotesNotes (continued)(continued) (forming(forming partpañ ofof thethe financialfinancial statementsstatements forfor the the yearyear endedended 31 MarchMarch 2010)
6 Dividends receivedreceived fromfrom LiquidatorLiquidator
The LiquidatorLiquidator has declared total dividends toto date of 86.5%. TheseThese funds funds have have been paid inin severalseveral tranchestranches over the coursecourse of thethe liquidation.liquidation. The The amount amount outstanding inin respectrespect ofof dividendsdividends cannotcannot bebe determineddetermined asas notnot all claims havehave yetyet been admittedadmitted byby thethe LiquidatorsLiquidators inin Luxembourg. Luxembourg.
The dividendsdividends receivedreceived duringduring thethe yearyear havehave beenbeen appliedapplied asas follows:follows:
2010 2009 £â £Ê
Repayment ofof compensationcom pensation 2,416 Interestlnterest on compensationcompensation paidpaid 426426 542,605 Surplus duedue to claimantsclaimants (see(see below)below) 559,823
426426 1,104,8441,1Uß44
Dividend surplus paymentspayments havehave beenbeen dealtdealt withwith asas follows:-follows:-
2010 2009 £Ê £E
Surplus payments received fromfrom thethe Liquidator 559,823
Dividend surplus payment debiteddebited toto income and expenditure accountaccount 559,823
7 Other creditorscreditors 2010 2009 €£ E£ Unclaimed compensation andand surplussurplus paymentspayments 1,795,516 596,169 Other creditors (including unpaidunpaid agent'sagent's fees)fees) 22,145 22,145
1,917,6611,817,661 618,314619,314
t313 Islelsle of Man Depositors'Depositors' Compensation Scheme
Notes (continued)(continued) (forming(foming part of thethe financialfrnancial statementsstatements for thethe year endedended 3131 MarchMarch 2010)2010)
8I ClaimsGlaims not not accepted accepted by by the the Scheme Scheme Manager Manager
As atat 3131 March March 2010,2010, thethe followingfollowing claimsclaims hadhad notnot yetyet beenbeen accepted accepted byby thethe Scheme Manager:Manager:
Potential Number compensation payable
Claims where there are outstanding queries s 6Ji0
Future compensatíoncompensation payments payments will will only only becomebecome duedue ifif claimsclaims notnot paidpaid areare accepted byby thethe liquidator andand dividendsdividends areare receivedreceived intointo thethe Soheme.Scheme. As thethe level of dividend has now reachedreached 86.5%86-5o/a therethere isls nono futurefr¡ture costcost toto thethe Scheme.Scheme.
14l4 Islelsle of Man Depositors'Depositors' Compensation Scheme
Appendix AA —- SchemeScheme Participants
The scheme participantsparticipants in thethe Islelsle ofof Man Man Depositors' Depositors' Compensation Compensation SchemeScheme duringduring the year ended 31 MarchMarch 2010,2010, underunder thethe 19911991 RegulationsRegulations andand 20082008 Regulations,Regulations, werewere as follows:
AlaAIB BankBank (CI)(Cl) LimitedLimited Alliance & LeicesterLeicester Internationallnternational LimitedLimited Anglo Irishlrish BankBank CorporationCorporation (International)(lnternational) PLCPLC Bank of Irelandlreland (I.O.M.)0.O.M.) LimitedLimited Bank of Scotland Internationallnternational LimitedLimited (licence(lícence surrendered on 1I January 2010)2010) Barclays Bank PLCPLC Barclays Private ClientsClients Internationallnternational LimitedLimited Barclays Private BankBank && TrustTrust (Isle(lsle ofof Man)Man) Limited Límited BNP ParibasPariþas SecuritiesSecurities ServicesServices S.A.S.A. Bradford & BingleyBingley Internationallntemational LimitedLimited Britannia Internationallnternational LimitedLimited Cayman National Bank & Trust CompanyCompany (Isle(lsle ofof Man)Man) LimitedLimited Close Bank (Isle(lsle ofof Man)Man) LimitedLimited Conister BankBank LimitedLimited (formerly ConisterConister TrustTrust Limited)Limîted¡ Duncan LawrieLawrie (IOM)(lOM) LimitedLimited Fairbairn Private BankBank (IOM)(lOM) LimitedLimited Habib European Bank LimitedLimited HSBC Bank Internationallnternational LimitedLimited HSBC Bank plcplc Irishlrish Nationwide (I.O.M.)(l.O.M,) LimitedLimited Irishlrish Permanent (IOM)(lOM) LimitedLimited Islelsle of Man BankBank LimitedLimited Lloyds TSB OffshoreOffshore LimitedLimited
Nationwide InternationalI nternationa I LimitedLimited RBS Coutts BankBank (Manx)(Manx) LimitedLimited Standard Bank Islelsle of ManMan LimitedLimited Bank of Scotland PlcPlc The Royal BankBank ofof ScotlandScotland Internationallnternational LimitedLimited The Royal BankBank ofof ScotlandScotland plcplc Zurich Bank Internationallnternational LimitedLimited
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