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					CONSOLIDATED ANNUAL REPORT

                     2011
St. Stanislaus – St. Casimir’s Polish Parishes Credit Union Limited
ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




   Table of contents




   Chair of the Board Report __________________________________________ 3

   Chief Executive Officer’s Report _____________________________________ 5

   Loan Report ____________________________________________________ 7

   Minutes from the 66th General Meeting of Members ______________________ 9

   Minutes from a special Meeting of Members ___________________________ 11

   Audit Committee Report __________________________________________ 13

   Responsibility for financial reporting _________________________________ 14

   Independent Auditor’s Report ______________________________________ 15

   Consolidated statements of comprehensive income (loss) ________________ 16

   Consolidated statements of changes in members’ equity _________________ 17

   Consolidated statements of financial position __________________________ 18

   Consolidated statements of cash flows _______________________________ 19

   Notes to the consolidated financial statements ______________________20 - 58




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     ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




                             CHAIR OF THE BOARD REPORT


In 2011, our Credit Union faced many challenges, both in financial and in management. With these
challenges arose new opportunities. The year progressed in a positive direction with a focus on becoming
a sustainable financial institution that serves the interests of its membership and community.
It was not without careful analysis and consideration that we volunteered for supervision under the
Deposit Insurance Corporation of Ontario (DICO) in April of 2011. The poor financial performance of prior
years and unfavourable results of prior DICO audits put us at risk of mandatory supervision. By
volunteering for supervision, we established a positive and collaborative relationship with the deposit
insurer that has allowed us to complete many important steps in our recovery over the past year. A new
management team was hired, an internal auditor was hired and a new Chair of the Board was elected.
The shared vision for the Board of Directors and management was to find ways to become more efficient
as a financial institution. Cost cutting measures, improvements to corporate governance, development of
a strategic plan and adoption of a new philosophy to operate in a more business-like manner became
priorities for the Board and management.

Governance

Shortly after the resignation of the CEO and CFO, Mr. Karl Fujarczuk also resigned as Chair of the Board
of Directors. After the AGM in April 2011, I was elected as Board Chair and Mr. Miroslaw Ruta was
elected as Chair of the Audit Committee. The Board of Directors hired an Internal Auditor, Mr. John
Howard, to monitor compliance with internal and external governance requirements of the Credit Union.
The Board and Audit Committee are pleased with the work of Mr. John Howard.

In the fall of 2011, Mr. Pitek was made the full time CEO. Mr. Pitek was instrumental in developing the
strategic plan and budget. Part of this strategic plan included recommendations to close unprofitable
branches. This was a difficult decision to implement, but for the good of our membership and our ability to
be sustainable, cost cutting measures were necessary to avoid further future losses.

For our Credit Union, increasing our capital was also a primary focus. Capital is crucial for every financial
institution. Two areas were addressed to improve our capital ratio. The first is increasing our retained
earnings by making profits and increasing investment returns on the current capital. The second is to
increase membership shares by promoting new membership and offering additional membership shares
to our current members. This share offering will be launched later in 2012.




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     ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




I am very pleased to report that our Credit Union earned a profit of over $400,000 before taxes in 2011.

I thank management, employees and the Board of Directors for their hard work and believe 2012 will be a
very positive year for our Credit Union.



Sincerely,




ROBERT JAGIELSKI B.A., M.A., LL.B.
Chair, Board of Directors




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     ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




                       CHIEF EXECUTIVE OFFICER’S REPORT


                 th
On February 10 , 2011, I was called by the Board of Directors to fulfill the duties and responsibilities of
                                                                  th
interim CEO. Approximately 8 months later, on September 30 , 2011, I officially accepted the role of CEO
of our Credit Union. The 2011 fiscal year brought with it numerous important responsibilities in terms of
leading our financial institution back to profitability and correcting problems of the past to build a modern
sustainable financial institution to be able to better serve its Polish members going forward.

In the early months of 2011, we created a new strategic plan and budget to guide the Credit Union along
its new path to success. This was especially important given our Credit Union was under supervision by
the Deposit Insurance Corporation of Ontario (DICO) due to the poor financial results of the previous
years and the findings of prior DICO examinations.

Our attention also turned to the serious financial burden our institution was facing due to inefficiencies in
our operations and, in particular, the upkeep of unprofitable branches. Lower levels of immigration and
the widening geographical dispersion of the Polish community continue to make it a challenge to serve
outlying areas effectively. In 2011, therefore, certain branches were no longer able to fulfill the needs of
our members who reside further away from the core Polish communities, and Management and The
Board made the difficult decision to close these branches for the good of the Credit Union as a whole.

The strategic plan developed for our financial institution necessarily focuses on expenses going forward,
but it is designed to lead us to a more profitable and sustainable financial institution capable of providing
a higher level of service to our members going forward. As we look forward to continuing to serve our
Polish community, we must remain competitive and sustainable first.

The 2011, financial results show with conviction that we are on the right path. Profit before taxes reached
$437,000; after taxes our earnings were $348,000, in comparison to a loss of $35,000 in 2010.

The provisions of the Act that governs credit unions, require them to maintain a level of capital of 4% of
total assets. Our Credit Union attained a level of 5.39% at the end of 2011 primarily due to efficiencies
gained throughout the year, thus fulfilling this obligation. But in these challenging economic times, this is a
small margin and we must not lose sight of the fact that we still have a way to go to reach our goal of
being a truly sustainable premier financial institution.

Looking over the financial statements for 2011, our members will undoubtedly notice changes in our
accounting policies. All Canadian publically accountable enterprises, with certain exceptions, were
required to adopt International Financial Reporting Standards (IFRS) for fiscal periods beginning on or
                st
after January 1 , 2011. Consequently the 2011 statements are the first statements of this kind for our
Credit Union and several changes in accounting policies were required under the new standards. The
details of the changes and how the IFRS standards have impacted our current financial situation are
provided in Note 27 of the consolidated financial statements.

In 2011, one of the primary tasks of our management team was to reduce operating costs and increase
profitability. This was necessary because of the previous two year’s losses which, if left unchecked, would
have gradually eaten away the capital base and ultimately jeopardized the sustainability of our institution
for the future. Much progress has been made in this regard and this focus will continue in 2012 to ensure
that we meet our goal of becoming a strong and sustainable financial institution, able to serve the needs
and interests of our ethic community for a long time to come.

Last year, our television program, Polish Studio, was extremely active in collaborating with the Polish
community. We sponsored many important festivals and events and offered air time to promote important

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     ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




events, as well as broadcasting coverage of those events. This is an important link to our community that
is rising in popularity because of the growing number of businesses that advertise through this medium.

In September, our institution took part in the long-standing tradition of the Polish Festival on
Roncesvalles. This festival continues to grow in popularity, which was evident last year through the
multiple stages for entertainment, including Polish dance groups, music, and events organized by student
organizations of Polish origin. One of the exhibits which garnered great interest was the display of military
equipment and military band performances in support of the Canadian troops and armed forces. The
opening ceremony was staged in front of the Credit Union and hosted numerous distinguished guests
from the Polish and Canadian governments at the federal level.

With equal enthusiasm and support, our Credit Union came out in August 2011 to organize meals for the
pilgrims of Polish parishes, taking part in the walking pilgrimage to the Canadian Martyrs Shrine in
Midland. This was a very rewarding experience that resonated deeply with the Polish community and one
which we hope to continue in the coming years. Our parish roots reflect the importance of our relationship
with the Polish Parishes since the inception of our Credit Union in the parish of St. Stanislaus Kostka
Church in Toronto in 1945. Upholding tradition is important to us and we continue to support many of our
parishes’ initiatives, such as the Religious Song Festival (organized by the Catholic Youth Studio) for
which we founded the Audience Award. Also, we have opened a consultation venue in our Maximilian
Kolbe parish on Sundays, where interested individuals may obtain information about our institution’s
services directly from one of our employees.

As part of our traditional Polish roots, the Credit Union also organized a Christmas Party for its
employees, which took place in January of this year. The event is not only a chance for employees to get
together and network, but also an opportunity to thank and reward employees for long-standing
commitment and completion of additional training.

In conclusion, I would like to thank the members of the Board of Directors and the members of regulatory
institutions for your cooperation and partnership in the past year. I would also like to thank our clergy from
the Polish parishes for their continued support. Our employees also deserve thanks for their relentless
efforts and support for the initiatives which contribute to the welfare of our institution. Finally, special
thanks go to our loyal members who continue to support our institution. I encourage you to benefit from
our financial offers and recommend our services to your children, family and friends. The enthusiasm of
our members in the Polish community is what gives the Credit Union life and gives us the strength to
continue to work hard for the development and strengthening of our institution going forward.



Respectfully submitted



ANDRZEJ PITEK, M.ED.
Chief Executive Officer




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    ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




                                          LOAN REPORT
                          Years ended December 31, 2011 and December 31, 2010

                                         (CDN dollars in thousands)




                     SUMMARY OF LOANS GRANTED BY PURPOSE

                                                                   2011                               2010
                                                  No             Amount              No             Amount
                                                                      $                                  $
PERSONAL LOANS
  FAMILY NEEDS                                    85                    343         256               1,250
  CAR PURCHASE                                    17                    167          81                 804
  RRSP                                            44                    221          98                 589
  HOME RENOVATIONS                                14                     92         103                 692
  TRAVEL / VACATION                               14                     49          74                 272
  INVESTMENT                                      4                      59          16                 189
  DOWN PAYMENTS                                   1                       5          5                   46
  BILLS / TAXES                                   15                     79          28                 227
  EDUCATION                                       3                      16          15                 105
  WEDDINGS / FUNERALS                             4                      59          10                  85
  FURNITURE PURCHASE                              5                      17          15                  60
  DEBT CONSOLIDATION                              2                      33          4                   56
TOTAL PERSONAL LOANS                             208                  1,140         705               4,375

RESIDENTIAL MORTGAGES
  FIRST MORTGAGES                                 58              12,907            241              58,486
  CMHC / GENWORTH                                 7                1,751             26               4,888
  SECOND MORTGAGES                                12                 737             25               2,417
TOTAL RESIDENTIAL MORTGAGES                       77              15,396            292              65,792

LINE OF CREDITS
   HOME EQUITY                                    39                  3,960         123              15,396
   PERSONAL                                       10                     81          61                 708
   OVERDRAFT                                      18                     94          72                 362
TOTAL LINE OF CREDITS                             67                  4,134         256              16,466

COMMERCIAL LOANS
  COMMERCIAL MORTGAGES                            1                  113             12               9,178
  BUSINESS LINE OF CREDITS                        0                    -             15                 220
  BUSINESS LOANS                                  0                    -             6                  550
TOTAL COMMERCIAL                                  1                  113             33               9,948
GRAND TOTAL                                      353              20,783            1286             96,581




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     ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




LETTERS OF CREDIT
                                                    2             $        26            5             $        81


# of Loan Applications received                    367                                 1309
# of Loans Granted                                 353                                 1286
$ Loans Granted                                                   $    20,783                          $   96,581
# of Loans Declined                                 14                                  23
# of Delinquent Loans                               51                                  85
$ Delinquent Loans                                                $     2,758                          $     2,677


This report is prepared in accordance with the requirements as set out in subsection 120/2 of the Credit Union and
Caisses Populaires Act, 1994 and as set out in section 25 of the Ontario Regulations 76/95.



Respectfully submitted,




LUCYNA JANKOWICZ
VP, Operations




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     ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




                                               MINUTES
                                       TH
                FROM THE 66                 GENERAL MEETING OF MEMBERS



                                                   th
The Annual General Meeting was held on April 30 , 2011, in the church auditorium of St. Casimir’s Parish located at
154 Roncesvalles Avenue in Toronto. The meeting was called to order by the Chair, Board of Directors, Kazimierz
Babiarz, who after greeting all present, gave the floor to Father Marian Gil, OMI, of St. Casimir’s Parish who led a
prayer for the deceased members of the Credit Union. Following, Kazimierz Babiarz thanked Karl Fujarczuk for
serving as Board Chair for five years and turned the meeting over to Krystyna Reitmeier, designated as AGM Chair
by the Board of Directors.

WELCOME OF GUESTS AND MEMBERS
The AGM Chair welcomed the Board of Directors and invited guests, among who were: Doug Hunt, a representative
of Deloitte & Touche LLP and Andy Poprawa, President of DICO.

ESTABLISHING A QUORUM
The AGM Chair announced that 88 members were in attendance. Accordingly, pursuant to the Credit Union By-laws,
the meeting was deemed to be in order with the minimum quorum of 50 members having been met.

PRESENTATION OF THE AGENDA AND MINUTES OF THE LAST AGM
The AGM Chair then presented the Agenda as previously distributed in the Annual General Meeting materials. The
AGM Chair then advised that in accordance with the Credit Union by-law, materials including minutes from the last
AGM had been made available ten days before the date of the meeting and would not additionally be presented at
this time.

REPORTS
The Chair went on to the next item of business which was the presentation of reports. The contents of the reports
were contained in the materials that were made available prior to the meeting.
The following reports were presented:
1.       The Report of the Audit Committee was presented by its Chair, Piotr Mazurkiewicz.
2.       The Auditor’s Report was presented by Doug Hunt from Deloitte & Touche LLP. He stated that the
         presentation of the financial statements for the period ending 2010 was in accordance with generally
         accepted accounting principles and accurately reflects the financial position of the Credit Union for the year
         then ended.
3.       The Report of the Chair, Board of Directors, was presented by Kazimierz Babiarz.
4.       Andrzej Pitek, acting as Credit Union CEO, then presented the CEO’s Report.

DISCUSSION OF REPORTS
Reports presented were discussed. Board Chair, Kazimierz Babiarz and Andrzej Pitek, acting as Credit Union CEO,
responded to members’ questions.

INTERMISSION
Following discussion of reports, an intermission was called.

ELECTIONS
The AGM Chair stated that there were five candidates for three available positions on the Board. All candidates had
an opportunity to make a presentation to the meeting on their respective qualifications for Director.



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     ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




BY-LAW AMENDMENT
The AGM Chair presented the proposed by-law amendment, distributed in the materials made available ten days
prior to the meeting,
Section 2.03 of By-law No. 1 will be repealed and replaced with the following:
“Membership Shares 2.03 - No person shall become a member of the Credit Union until that person has fully paid for
one (1) ten-dollar ($10.00) membership Share of the Credit Union. Every member who is an individual over the age of
sixteen (16) years shall acquire, within three months after the later of his or her acceptance into membership or
attaining the age of sixteen (16) years, a further nine (9) ten-dollar ($10.00) membership Shares of the Credit Union.
Every member who is an entity shall acquire, within three months after its acceptance into membership, a further nine
(9) ten-dollar ($10.00) membership Shares of the Credit Union. Every member shall maintain ownership of at least
the required minimum number of membership Shares in order to keep his, her or its voting rights. A member may not
hold any membership Shares in addition to this minimum requirement.”
The AGM Chair advised that in order to pass, the proposed by-law amendment would have to be approved by no less
than two-thirds of the votes cast.

VOTING
The AGM Chair called on those members who had not yet voted at the meeting, or at the Advance Polls held in
branches, to cast their votes for the candidates and the proposed by-law amendment. Following, all ballot boxes,
including those from the Advance Polls held at branches, were taken for ballot counting.

ANNOUNCEMENT OF VOTING RESULTS FOR MEMBERS OF THE BOARD OF DIRECTORS
Arthur Roszak, Election Committee Chair was called on by the AGM Chair to announce the results of the ballot count
for Director. These results were as follows: Artur Chmiel – 143 votes; Robert Jagielski – 460 votes; Piotr
Mazurkiewicz – 426 votes; Miroslaw Ruta – 418 votes; Krzysztof Wisniewski – 98 votes. 23 ballots were identified as
spoiled. Accordingly, Robert Jagielski, Piotr Mazurkiewicz, and Miroslaw Ruta were declared elected to the Board.

ANNOUNCEMENT OF BY-LAW AMENDMENT VOTING RESULTS
It was identified that there were 481 votes for, 43 votes against, and 3 spoiled ballots. Accordingly, having two-thirds
of the votes cast majority, the proposed by-law amendment was declared passed.
A motion was made at this time to destroy the ballots. This motion was duly seconded from the floor and was carried.

APPOINTMENT OF AUDITORS
The AGM chair requested Corporate Secretary, Antoni Pakulski, to present a motion to appoint Deloitte & Touche
LLP as Credit Union Auditors for 2011. This motion was duly seconded from the floor and was carried.

OPEN DISCUSSION
Members had an opportunity to voice numerous comments and questions during this portion of the agenda.

ADJOURNMENT OF MEETING AND CLOSEING PRAYER
At the close of the meeting, the AGM Chair said a prayer and a motion to adjourn the meeting was moved and
                                                                       th
seconded. The motion was carried and the AGM Chair adjourned the 66 Annual General Meeting of members.




KAZIMIERZ BABIARZ                                           ANTONI PAKULSKI
Chair, Board of Directors                                   Corporate Secretary




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     ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




              MINUTES FROM A SPECIAL MEETING OF MEMBERS



A Special Meeting of Members was held on November 19, 2011 in the church auditorium of St. Casimir’s Parish
located at 154 Roncesvalles Avenue in Toronto. The purpose of the meeting was to present and vote on a Special
Resolution for an amendment to By-law No.1, Membership Shares 2.03 that would increase the maximum number of
membership shares that the Credit Union may issue to a member by one hundred (100) ten-dollar ($10.00)
membership shares in addition to the minimum membership share requirement.

WELCOME OF GUESTS AND MEMBERS
Board Chair Robert Jagielski greeted all present and called on Father Jacek Nosowicz OMI Pastor of the St.
Casimir’s Parish to lead a prayer for the deceased members of the Credit Union. Following, the Board Chair turned
the meeting over to Special Meeting Chair designate Krystyna Reitmeier.

ESTABLISHING A QUORUM
The Special Meeting Chair introduced the head table and then announced that 91 members were in attendance.
Accordingly, pursuant to the Credit Union By-laws, the meeting was deemed to be in order with the minimum quorum
of 50 members having been met.

PRESENTATION OF THE AGENDA
The Special Meeting Chair then advised that the Agenda, as previously distributed in the meeting materials, and in
accordance with the Credit Union by-law, had been made available ten days before the date of the meeting. The
Special Meeting Chair further advised that the agenda had only one item of business, that of presenting, discussing,
and voting on a Special Resolution for an amendment to By-law No.1, Membership Shares 2.03.

BY-LAW AMENDMENT PRESENTATION, DISCUSSION, AND VOTING
The Special Meeting Chair read the proposed by-law amendment in English and in Polish.
Section 2.03 of By-law No. 1 will be repealed and replaced with the following:
“Section 2.03 – No person shall become a member of the Credit Union until that person has fully paid for one (1) ten-
dollar ($10.00) membership Share of the Credit Union. Every member who is an individual over the age of sixteen
(16) years shall acquire, within three months after the later of his or her acceptance into membership or attaining the
age of sixteen (16) years, a further nine (9) ten-dollar ($10.00) membership Shares of the Credit Union, Every
member who is an entity shall acquire, within three months after its acceptance into membership, a further nine (9)
ten-dollar ($10.00) membership Shares of the Credit Union. Every member shall maintain ownership of at least the
required minimum number of membership Shares in order to keep his, her or its voting rights. The maximum number
of membership shares the Credit Union may issue to a member is an additional one hundred (100) ten-dollar ($10.00)
membership shares to the minimum membership share requirement outlined above.”

Next the Special Meeting Chair called on Andrzej Pitek, acting as Credit Union CEO, to provide additional
information. Andrzej Pitek emphasized that the purpose of the proposed by-law amendment was to make it possible
for the Credit Union to accept from members additional membership shares that would strengthen the Credit Union
operation. He stressed that the deposit of any such additional membership shares by members was optional and
added that a number of other Credit Unions had taken this option.

The Special Meeting Chair opened discussion on the proposed by-law amendment that was followed by voting by
those members present at the meeting who had not yet voted at the Advance Polls held earlier.

INTERMISSION
During the counting of the ballots, overseen by John Howard, Credit Union internal auditor, an intermission was held.




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     ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




ANNOUNCEMENT OF VOTING RESULTS
It was identified that there were 417 votes for, 50 votes against, and 1 spoiled ballot. Accordingly, having two-thirds of
the votes cast majority, the proposed by-law amendment was declared passed.
A motion was made at this time to destroy the ballots. This motion was duly seconded from the floor and was carried.

ADJOURNMENT OF MEETING AND CLOSEING PRAYER
At the close of the meeting, the Special Meeting Chair said a prayer and a motion to adjourn the meeting was moved
and seconded. The motion was carried and the Special Meeting Chair adjourned the Special Meeting of Members.




ROBERT JAGIELSKI                                                   ANTONI PAKULSKI

Chair, Board of Directors                                          Corporate Secretary




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     ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




                                   AUDIT COMMITTEE REPORT
                                         YEAR ENDED DECEMBER 31, 2011




Pursuant to Section 125 of the Credit Unions and Caisses Populaires Act, 1994 (the “Act”) and Article 5.03 of Credit
Union By-law No. 1, the Credit Union Board of Directors annually elects, from among its members, an Audit
Committee.
The Audit Committee held eight meetings prior to Board of Director meetings throughout the year in the execution of
its designated duties.
In performing its duties, the Audit Committee:
    1.   Reviewed and analyzed monthly financial statements and recommended them to the Board for approval.
    2.   Reviewed Credit Union policies with a particular focus on requirements for liquidity, capital adequacy and
         interest rate management and related procedures and controls that relate to legislative compliance.
    3.   Reviewed all reports that were issued by Credit Union regulators (Financial Services Commission of Ontario
         “FSCO”), deposit insurer (“DICO”) and Financial Transactions Reports Analysis Centre of Canada
         “FINTRAC” relating to the affairs of the Credit Union. Reviewed Management’s response to these reports
         and monitored the correct action required.
    4.   Reviewed periodic reports prepared by Management to monitor compliance.
    5.   Verified the Credit Union’s Directors, Officers and Employees bonding process.
    6.   Reviewed legal proceedings to which the Credit Union is a party and reviewed the appropriateness of
         accounting, recognition and financial statement disclosure relating to such matters.
    7.   Reviewed the external auditor’s 2011 Audit Service Plan and Year-end Communication.
    8.   Initiated and reviewed the internal Audit report for 2011.
    9.   Reviewed Management’s and Internal Audit reports for the four Branches closed in 2011.
Based on the analysis of the duties performed, the Audit Committee issued reports and made recommendations to
the Board of Directors or to the Chief Executive Officer. With respect to the matters outlined above, the Audit
Committee followed up to ensure that its recommendations were considered and implemented.
The Audit Committee recommended to the Board of Directors the acceptance of the Annual Consolidated Financial
Statements. The acceptance was reported by the External Auditors of the Credit Union, Deloitte & Touche LLP.
The Audit Committee recommended the recent change to the Credit Union by-laws which addressed the capital
adequacy.
The Audit Committee is pleased to report to the members of the Credit Union that it has fulfilled its mandate and
hereby confirms that it is conducting its affairs in accordance with the Act and the Regulations. The Committee
received full co-operation and support from Management to enable it to play an effective role in maintaining the
quality of financial reporting to the Members. The Audit Committee also enhanced the overall control structure of the
Credit Union.




MIROSLAW RUTA,
Chairman of the Audit Committee




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     ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




                   RESPONSIBILITY FOR FINANCIAL REPORTING




To the Members of
St. Stanislaus-St. Casimir’s
Polish Parishes Credit Union Limited


The Credit Union’s management is responsible for the integrity and the fairness of presentation of these financial
statements and of all information in the Annual Report, which has been approved by the Board of Directors. The
financial statements have been prepared by management in accordance with the requirements of the Credit Unions
and Caisses Populaires Act, 1994 and Canadian generally accepted accounting principles. In preparing the financial
statements, management has exercised judgement in the selection of significant accounting policies and the
determination of reasonable estimates which are reflected therein.
The Credit Union’s management has developed and maintains systems of internal controls in order to provide
reasonable assurance that the financial information is accurate and reliable in all material respects and that the Credit
Union’s assets are appropriately accounted for and adequately safeguarded.
The Audit Committee meets regularly with the Credit Union’s management and periodically with the internal and
external auditors to review matters relating to the quality of financial reporting and internal controls and the nature,
extent and results of the audits. In addition, this Committee recommends the appointment of external auditors and
reviews and reports on the Credit Union’s financial statements to the Board of Directors.
Deloitte & Touche LLP, independent external auditors appointed by the members of the Credit Union, examine our
financial statements in accordance with generally accepted auditing standards and their report appears on the next
page. The auditors have free and independent access to the Audit Committee and meet with the Committee and with
management to consider matters relating to financial statement presentation and internal controls.




  ANDRZEJ PITEK                                                      W.J. BOTHA
  CEO                                                                CFO




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      ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




                             INDEPENDENT AUDITOR’S REPORT

To the Members of
St. Stanislaus – St. Casimir’s
Polish Parishes Credit Union Limited


We have audited the accompanying consolidated financial statements of St. Stanislaus - St. Casimir’s Polish
Parishes Credit Union Limited, which comprise the consolidated statements of financial position as at December 31,
2011, December 31, 2010 and January 1, 2010, and the consolidated statements of comprehensive income (loss),
consolidated statements of changes in members’ equity and consolidated statements of cash flows for the years
ended December 31, 2011 and December 31, 2010, and a summary of significant accounting policies and other
explanatory information

Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in
accordance with International Financial Reporting Standards, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.

Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We
conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require
that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and
fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by management, as well as evaluating the overall presentation of the consolidated
financial statements.
We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for
our audit opinion.

Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of St.
Stanislaus-St. Casimir’s Polish Parishes Credit Union Limited as at December 31, 2011, December 31, 2010 and
January 1, 2010 and its financial performance and its cash flows for the years ended December 31, 2011 and
December 31, 2010 in accordance with International Financial Reporting Standards.




Deloitte & Touche LLP
Chartered Accountants
Licensed Public Accountants
March 8, 2012
St. Catharines ON
Canada



                                                           - 15 -
     ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




       CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
                             Years ended December 31, 2011 and December 31, 2010




(CDN dollars in thousands)

                                                                                 2011                2010
                                                                                                 (Note 27)

                                                                                     $                   $

Interest income (Note 4)                                                       13,062              14,046
Investment income                                                                 712                 331
                                                                               13,774              14,377


Interest expense (Note 5)                                                       3,462                3,986
Other interest expense                                                              4                    4
                                                                                3,466                3,990

Net interest income                                                            10,308              10,387
(Recovery of) provision for impaired loans (Note 11)                             (129)                450
Net interest margin                                                            10,437               9,937
Other operating income (net) (Note 6)                                           2,137               2,240
Total operating income                                                         12,574              12,177

Deposit insurance premium                                                         951                 344
Depreciation and amortization                                                     469                 444
General and administrative                                                      1,548               1,179
Marketing                                                                          88                 192
Occupancy                                                                       1,309               1,291
Operations                                                                      1,742               1,901
Personal expenses                                                               5,688               6,420
Other                                                                             342                 391
Total operating expenses                                                       12,137              12,162

Income before income taxes                                                        437                   15
Income tax expense (Note 17)                                                       89                   50
Net income (loss)                                                                 348                  (35)
Other comprehensive loss, net of income taxes (Note 7)                           (210)                (130)
Total comprehensive income (loss)                                                 138                 (165)




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     ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




        CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS’ EQUITY
                             Years ended December 31, 2011 and December 31, 2010




(CDN dollars in thousands)
                                                                                  Accumulated
                                                                                        other
                                                     Member          Retained   comprehensive
                                                      shares         earnings         income                 Total
                                                         $                $                 $                 $

As at January 1, 2010 (Note 27)                     3,927           16,872                   -         20,799
Net loss                                                -              (35)                  -            (35)
Other comprehensive loss                                -             (130)                  -           (130)
Issued membership shares                              142                -                   -            142
Redeemed membership shares                           (141)               -                   -           (141)
As at December 31, 2010 (Note 27)                   3,928           16,707                   -         20,635
Net income                                              -              348                   -            348
Other comprehensive loss                                -             (210)                  -           (210)
Issued membership shares                              100                -                   -            100
Redeemed membership shares                           (281)               -                   -           (281)
As at December 31, 2011                             3,747           16,845                   -         20,592




                                                    - 17 -
     ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




                CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                       As at December 31, 2011, December 31, 2010 and January 1, 2010




(CDN dollars in thousands)
                                                             December 31,    December 31,          January 1,
                                                                    2011             2010               2010
                                                                                 (Note 27)          (Note 27)
                                                                        $                $                   $

Assets
   Cash and cash equivalents (Note 8)                             62,436           33,934            18,154
   Investments (Note 9)                                           51,422           27,007            29,422
   Loans to members (Note 10)                                    262,585          321,385           311,456
   Property and equipment (Note 12)                                9,030            9,071             9,395
   Other intangible assets (Note 13)                                  74               44                31
   Other assets (Note 14)                                            367              325               482
                                                                 385,914          391,766           368,940

Liabilities
    Deposits from members (Note 15)                              362,744          368,721           345,010
    Accounts payable and accrued liabilities                         902              980             1,656
    Defined benefit obligation (Note 16)                           1,470            1,275             1,297
    Deferred income tax liabilities (Note 17)                        206              155               178
                                                                 365,322          371,131           348,141

Members’ equity
  Membership shares (Note 18)                                      3,747            3,928              3,927
  Retained earnings                                               16,845           16,707             16,872
                                                                  20,592           20,635             20,799
                                                                 385,914          391,766           368,940




On behalf of the Board



Elżbieta Morgan                              Antoni Pakulski
Director                                     Director




                                                    - 18 -
     ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             Years ended December 31, 2011 and December 31, 2010



(CDN dollars in thousands)
                                                                                 2011                  2010
                                                                                                   (Note 27)
                                                                                     $                     $

Operating activities
   Net income (loss)                                                               348                   (35)
   Adjustments for
        (Recovery of) provision for impaired loans (Note 11)                      (129)                 450
        Interest and investment income                                         (13,774)             (14,377)
        Interest expense                                                         3,462                3,986
        Depreciation and amortization                                              469                  444
        Income tax expense (Note 17)                                                89                   50
        Foreign exchange gain (Note 6)                                            (307)                (364)
   Changes in operating assets/liabilities
        Change in loans to members                                              58,923              (10,426)
        Change in deposits from members                                         (5,418)              23,868
        Change in other operating assets and liabilities                          (176)                (859)
   Cash generated (used) from operating activities before interest
     and taxes
        Interest received                                                      13,628                14,570
        Interest paid                                                          (4,021)               (4,143)
        Income tax received                                                          -                  115
                                                                               53,094                13,279

Investing activities
    Purchase of investments                                                    (71,455)             (38,221)
    Proceeds from sale of investments                                           47,500               40,854
    Purchase of property and equipment                                            (412)                (115)
    Purchase of other intangible assets                                            (44)                 (18)
                                                                               (24,411)               2,500

Financing activities
    Issuance of membership share capital                                           100                  142
    Redemption of membership share capital                                        (281)                (141)
                                                                                  (181)                   1

Net change in cash and cash equivalents                                         28,502               15,780
Cash and cash equivalents, beginning of year                                    33,934               18,154
Cash and cash equivalents, end of year                                          62,436               33,934




                                                      - 19 -
     ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




                St. Stanislaus-St. Casimir’s Polish Parishes
                            Credit Union Limited
             Notes to the consolidated financial statements
                            years ended December 31, 2011 and December 31, 2010

                                            (CDN dollars in thousands)




1.   Reporting entity

     St. Stanislaus-St. Casimir’s Polish Parishes Credit Union Limited (the “Credit Union”) is incorporated under the
     Credit Unions and Caisses Populaires Act, 1994 (Ontario), (the “Act”) and is a member of the Deposit
     Insurance Corporation of Ontario (“DICO”). The Credit Union was incorporated on August 9, 1945 and was
     then organized for the benefit of the members of the St. Stanislaus Roman Catholic Parish in the city of
     Toronto, Ontario. The Credit Union provides financial services including residential and commercial mortgages
     and loans and deposit taking to its members.

     The registered office of the Credit Union is at 220 Roncesvalles Ave., Toronto, Ontario, M6R 2L7.

2.   Basis of preparation

     Statement of compliance

     These consolidated financial statements are general purpose financial statements which have been prepared
     in accordance with International Financial Reporting Standards (“IFRS”) adopted by the International
     Accounting Standards Board (“IASB”).

     These are the Credit Union’s first financial statements to be prepared in accordance with IFRS, and IFRS 1
     First-Time Adoption of International Financial Reporting Standards (“IFRS 1”) has been applied. The
     preparation of these consolidated financial statements in accordance with IFRS resulted in changes to the
     accounting policies as compared with the most recent annual consolidated financial statements prepared under
     previous Canadian generally accepted accounting principles (“Canadian GAAP”). An explanation of how the
     transition to IFRS has affected the reported financial position, financial performance and cash flows of the
     Credit Union is provided in Note 27.

     The consolidated financial statements for the years ended December 31, 2011 and 2010 were authorized for
     issue by the board of directors on March 8, 2012.

     Basis of preparation

     These consolidated financial statements are presented in Canadian dollars which is the Credit Union’s
     functional currency, rounded to the nearest thousand except when otherwise indicated. They are prepared on
     the historical cost basis except for available-for-sale investments (“AFS”), derivative financial instruments, other
     financial assets and liabilities held for trading (“HFT”), and financial assets and liabilities designated at fair
     value through profit or loss (“FVTPL”) which are stated at their fair value.

     Use of significant accounting judgments, estimates and assumptions

     The preparation of these consolidated financial statements in conformity with IFRS requires management to
     make judgments, estimates and assumptions that affect the application of policies and reported amounts of
     assets and liabilities, and disclosures of contingent assets and contingent liabilities at the date of these
     consolidated financial statements, and the reported amounts of revenues and expenses during the year.




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ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




The estimates and associated assumptions are based on historical experience and various other factors that
are believed to be reasonable under the circumstances, the results of which form the basis of making the
judgments about carrying values of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from estimates made in these consolidated financial statements.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the estimate is revised if the revision affects only that period or
in the period of the revision and future periods if the revision affects both current and future periods.

Judgments made by management in the application of IFRS that have a significant effect on these
consolidated financial statements and estimates with a significant risk of material adjustment in the next year
are discussed below. The Notes to the Consolidated Financial Statements set out areas involving a higher
degree of judgment or complexity, or areas where assumptions are significant to the Credit Union’s
consolidated financial statements such as:

 a)   Fair value of financial instruments

      Where the fair values of financial assets and financial liabilities recorded on the consolidated statement
      of financial position cannot be derived from observable markets, they are determined using a variety of
      valuation techniques that include the use of mathematical models. The inputs to these models are
      derived from observable market data where possible, but where observable market data are not
      available, judgment is required to establish fair values. The judgments include considerations of liquidity.
      The valuation of financial instruments is described in more detail in Note 25.

 b)   Impairment losses on loans

      The Credit Union reviews its individually significant loans at each consolidated statement of financial
      position date to assess whether an impairment loss should be recorded in the consolidated statement of
      comprehensive income (loss). In particular, management judgment is required in the estimation of the
      amount and timing of future cash flows when determining the impairment loss. These estimates are
      based on assumptions about a number of factors such as historical recovery rates, bankruptcy indicators
      and credit ratings, and actual results may differ, resulting in future changes to the allowance.

      Loans that have been assessed individually and found not to be impaired and all individually insignificant
      loans are then assessed collectively, in groups of assets with similar risk characteristics, to determine
      whether provision should be made due to incurred loss events for which there is objective evidence but
      whose effects are not yet evident. The collective assessment takes into account data from the loan
      portfolio (such as levels of arrears, historical write off rates, etc.), and judgments to the effect of
      concentrations of risks and economic data (including the performance of different individual groups).

      The impairment loss on loans and advances is disclosed in further detail in Notes 10 and 11.

 c)   Impairment of available-for-sale investments

      The Credit Union reviews its equity instruments classified as available-for-sale at each consolidated
      statement of financial position date to assess whether they are impaired.

      The Credit Union records impairment charges on available-for-sale equity instruments when there has
      been a significant or prolonged decline in the fair value below their cost. The determination of what is
      ‘significant’ or ‘prolonged’ requires judgment.

 d)   Pension obligation

      The cost of the defined benefit pension plan is determined using an actuarial valuation. The actuarial
      valuation involves making assumptions about discount rates, expected rates of return on assets, future
      salary increases, mortality rates and future pension increases. Due to the long-term nature of these
      plans, such estimates are subject to significant uncertainty. See Note 16 for the assumptions used.

Estimates and judgments are continually evaluated and are based on historical experience and other factors,
including reasonable expectations of future events. Management believes the estimates used in preparing
these consolidated financial statements are reasonable. Actual results in the future may differ from those
reported.
                                                   - 21 -
ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




New standards and interpretations not yet adopted

Certain new standards, interpretations, amendments and improvements to the existing standards have been
issued by the IASB, but are not yet effective for the year ended December 31, 2011, and have not been applied
in preparing these consolidated financial statements:

 a)   Presentation of financial statements

      In June 2011, the IASB amended IAS 1 - Presentation of Financial Statements: Other Comprehensive
      Income (“IAS 1”), which will be applied retrospectively for annual periods beginning on or after July 1,
      2012. The amendments require additional disclosures on components of other comprehensive income
      (“OCI”). The Credit Union is assessing the potential impact of these amendments.

 b)   Post-employment benefits-defined benefit plans

      In June 2011, the IASB amended IAS 19 - Post-employment Benefits (“IAS 19”), which will be applied
      prospectively for annual periods beginning on or after July 1, 2013. The amendments eliminate the
      option to defer the recognition of actuarial gains and losses, require the remeasurements be presented
      in OCI, and enhance the disclosure requirements for defined benefit plans. The Credit Union is
      assessing the potential impact of these amendments.

 c)   Financial instruments

      In November 2009 and October 2010, the IASB issued IFRS 9 - Financial instruments (“IFRS 9”),
      Classification and Measurement of Financial Assets and Financial Liabilities. IFRS 9 will replace IAS 39 -
      Financial Instruments: Recognition and Measurement (“IAS 39”) in its entirety. IFRS 9 uses a single
      approach to determine whether a financial asset or liability is measured at amortized cost or fair value,
      replacing the multiple rules in IAS 39. For financial assets, the approach in IFRS 9 is based on how an
      entity manages its financial instruments in the context of its business model and the contractual cash
      flow characteristics of the financial assets. The new standard also requires a single impairment method
      to be used, replacing the multiple impairment methods in IAS 39. For financial liabilities measured at fair
      value, fair value changes due to changes in the Credit Union’s credit risk are presented in other
      comprehensive income (“OCI”) unless this would create an accounting mismatch. All other changes in
      fair value are recorded in net income each period. IFRS 9 is effective for annual periods beginning on or
      after January 1, 2015. The Credit Union is assessing the potential impact of this standard.

 d)   Financial instruments: disclosures

      In October 2010, the IASB amended IFRS 7 - Financial instruments: Disclosures, which will be applied
      prospectively for annual periods beginning on or after July 1, 2011. The amendments require additional
      disclosures on transferred financial assets. The Credit Union is assessing the potential impact of these
      amendments.

 e)   Consolidated financial statements

      In May 2011, the IASB issued IFRS 10 - Consolidated Financial Statements (“IFRS 10”). IFRS 10
      replaces the consolidation requirements in IAS 27, Consolidated and Separate Financial Statements,
      and SIC-12, Consolidation - Special Purpose Entities. IFRS 10 provides a revised definition of control
      and related application guidance so that a single control model can be applied to all entities. Control is
      determined based on whether the reporting entity is exposed to the variable returns of the other entity.
      IFRS 10 is effective for annual periods beginning on or after January 1, 2013. The Credit Union is
      assessing the potential impact of this new standard.

 f)   Fair value measurement

      In May 2011, the IASB issued IFRS 13 - Fair Value Measurement (“IFRS 13”). IFRS 13 defines fair value
      and sets out in a single IFRS framework for measuring fair value and requires disclosures about fair
      value measurements. IFRS 13 is effective for annual periods beginning on or after January 1, 2013. The
      Credit Union is assessing the potential impact of this new standard.

      In addition to the above described, other new standards and interpretations not yet adopted include IAS
      12 - Income Taxes , IFRS 11 - Joint Arrangements, and IFRS 12 - Disclosure of Interests in Other
                                                  - 22 -
     ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




           Entities. The Credit Union has reviewed these standards and/or amendments to these standards and
           determined that they have no impact on the Credit Union.

3.   Significant accounting policies

     The accounting policies set out below have been applied consistently by the Credit Union to all periods
     presented in these consolidated financial statements and in preparing an opening IFRS consolidated statement
     of financial position at January 1, 2010 for the purposes of the transition to IFRS as required by IFRS 1, without
     exception.

     Basis of consolidation

     Subsidiaries are entities controlled by the Credit Union. The financial statements of subsidiaries are included in
     the consolidated financial statements from the date that control commences until the date that control ceases.
     The consolidated financial statements have been prepared using uniform accounting policies for like
     transactions and other events in similar circumstances.

     The consolidated financial statements include the accounts of the Credit Union and its wholly owned
     subsidiary, PCU Information Services Corporation, which was incorporated on October 5, 1998.

     Intra-group balances and income and expenses arising from intra-group transactions, are eliminated in
     preparing the consolidated financial statements. Unrealized losses are eliminated in the same way as
     unrealized gains, but only to the extent that there is no evidence of impairment.

     Business combinations and goodwill

     The Credit Union accounts for acquisitions using the acquisition method as at the acquisition date, which is the
     date on which control is acquired by the Credit Union. Control is the power to govern the financial and
     operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Credit Union
     takes into consideration potential voting rights that are currently exercisable or de facto control which is the
     ability to control because no other party has the power to govern.

     The Credit Union measures goodwill as the fair value of the consideration transferred including the recognized
     amount of any non-controlling interest in the acquiree, less the net recognized amount of identifiable assets
     acquired and liabilities assumed at fair value at the acquisition date. When negative goodwill arises, the
     amount is recognized in the statement of comprehensive income (loss) immediately.

     The Credit Union elects for each acquisition whether to measure non-controlling interest at fair value or at its
     proportionate share of the recognized amount of the identifiable net assets at the acquisition date.

     Transaction costs incurred with the acquisition, other than those associated with the issue of debt or equity
     securities, are expensed as incurred.

     Goodwill is subsequently carried at cost less accumulated impairment losses.

     Financial instruments

     Financial assets and financial liabilities are recognized when the Credit Union becomes a party to the
     contractual provisions of the instrument.

     Financial assets and financial liabilities are initially recognized at fair value and their subsequent measurement
     is dependent on their classification as described below. Their classification depends on the purpose for which
     the financial instruments were acquired or issued, their characteristics and the Credit Union’s designation of
     such instruments. Settlement date accounting is used.

     The Credit Union is required to classify all financial assets either as fair value through profit or loss, available-
     for-sale, held-to-maturity, or loans and receivables and, financial liabilities are classified as either fair value
     through profit or loss, or other liabilities. The standards require that all financial assets and financial liabilities,
     including all derivatives, be subsequently measured at fair value with the exception of loans and receivables,
     debt securities classified as held-to-maturity, available-for-sale financial assets that do not have quoted market
     prices in an active market and whose fair value cannot be reliably estimated, and other liabilities.

                                                          - 23 -
ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




 a)   Classification

      Financial asset / liability                                     Classification
      Cash and cash equivalents
       - Cash on hand                                                 Loans and receivables
       - Cash held with other chartered banks                         Loans and receivables
       - Bonds and discount notes                                     Loans and receivables
      Investments - debt securities:
       - Term deposits                                                Held to maturity
       - Bonds and discount notes                                     Held to maturity
       - Accrued interest on investments                              Held to maturity
      Investments - equity instruments:
       - Investment in co-operative shares                            Available-for-sale (cost)
      Loans to members                                                Loans and receivables
      Other assets - accounts receivable                              Loans and receivables
      Deposits from members                                           Other liabilities
      Accounts payable and accrued liabilities                        Other liabilities
 b)   Fair value through profit or loss (“FVTPL”)

      Financial assets and financial liabilities are classified as at FVTPL when the financial asset or financial
      liability is either held for trading or it is designated as at FVTPL.

      A financial asset or financial liability is classified as held for trading if:

           it has been acquired principally for the purpose of selling it in the near term; or
           on initial recognition it is part of a portfolio of identified financial instruments that the Credit Union
           manages together and has a recent actual pattern of short-term profit-taking; or
           it is a derivative that is not designated and effective as a hedging instrument.
      A financial asset and financial liability other than a financial asset or financial liability held for trading may
      be designated as at FVTPL upon initial recognition if:

           such designation eliminates or significantly reduces a measurement or recognition inconsistency
           that would otherwise arise; or
           the financial asset/liability forms part of a group of financial assets or financial liabilities or both,
           which is managed and its performance is evaluated on a fair value basis, in accordance with the
           Credit Union’s documented risk management or investment strategy, and information about the
           grouping is provided internally on that basis; or
           it forms part of a contract containing one or more embedded derivatives, and IAS 39 permits the
           entire combined contract (asset or liability) to be designated as at FVTPL.

      Financial assets and financial liabilities at FVTPL are stated at fair value, with any gains or losses arising
      on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss
      incorporates any dividend or interest earned/paid on the financial asset/liability and is included in the
      ‘other operating income (net)’ line item in the consolidated statement of comprehensive income (loss).

      As at December 31, 2011, December 31, 2010 and January 1, 2010, the Credit Union had no financial
      assets or financial liabilities classified as fair value through profit or loss or held-for-trading.

 c)   Held-to-maturity

      Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and
      fixed maturity dates that the Credit Union has the positive intent and ability to hold to maturity, other than
      those that the entity upon initial recognition designates as at fair value through profit or loss as available
      for sale.

      Subsequent to initial recognition, held-to-maturity financial assets are measured at amortized cost using
      the effective interest method, net of impairment losses.

                                                       - 24 -
ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




 d)   Available- for-sale financial assets

      Available-for-sale financial assets are non-derivative financial assets that are either designated as
      available-for-sale or are not classified as (a) loans and receivables, (b) held-to-maturity investments or
      (c) financial assets at fair value through profit or loss.

      Shares held with co-operatives held by the Credit Union that are not traded in an active market are
      classified as available-for-sale. Available-for-sale equity investments that do not have a quoted market
      price in an active market and whose fair value cannot be reliably measured are measured at cost less
      any identified impairment losses at the end of each reporting period.

 e)   Loans and receivables

      Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
      not quoted in an active market and which the Credit Union does not intend to sell immediately or in the
      near term. Loans and receivables including cash and cash equivalents, loans to members and accounts
      receivable, are measured at amortized cost using the effective interest method, net of impairment losses.

      Interest income is recognized by applying the effective interest rate.

 f)   Effective interest method

      The effective interest method is a method of calculating the amortized cost of a financial asset or
      financial liability and of allocating interest income/ expense over the relevant period. The effective
      interest rate is the rate that exactly discounts estimated future cash receipts (including all fees or points
      paid or received that form an integral part of the effective interest rate, transaction costs and other
      premiums or discounts) through the expected life of the asset / liability, or (where appropriate) a shorter
      period, to the net carrying amount on initial recognition.

 g)   Impairment of financial assets

      Financial assets, other than those at fair value through profit or loss, are assessed for indicators of
      impairment at each consolidated statement of financial position date. Financial assets are impaired
      where there is objective evidence that, as a result of one or more events that occurred after the initial
      recognition of the financial asset, the estimated future cash flows of the asset have been affected.

      For financial assets carried at amortized cost, the amount of the impairment is the difference between
      the asset’s carrying amount and the present value of estimated future cash flows, discounted at the
      financial asset’s original effective interest rate.

      The carrying amount of the financial asset is reduced by the impairment loss directly for all financial
      assets with the exception of loans to members, where the carrying amount is reduced through the use of
      an allowance account. When a loan to a member is considered uncollectible, it is written off against the
      allowance for impaired loans. Subsequent recoveries of amounts previously written off are credited
      against the allowance for impaired loans. Changes in the carrying amount of the allowance for impaired
      loans are recognized in profit or loss.

      The impairment loss on financial assets is based on a review of all outstanding amounts at period end.
      The Credit Union has established percentages for the allowance for doubtful accounts which are based
      on historical collection trends for each payer type and age of the receivables. Accounts that are
      considered to be uncollectible are reserved for in the allowance until they are written off or collected.

      For financial assets other than AFS equity instruments, if, in a subsequent period, the amount of the
      impairment loss decreases and the decrease can be related objectively to an event occurring after the
      impairment was recognized, the previously recognized impairment loss is reversed through profit or loss
      to the extent that the carrying amount of the investment at the date the impairment is reversed does not
      exceed what the amortized cost would have been had the impairment not been recognized.




                                                   - 25 -
ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




      h) Derecognition of financial assets

         The Credit Union derecognizes a financial asset only when the contractual rights to the cash flows from
         the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of
         ownership of the asset to another entity. If the Credit Union neither transfers nor retains substantially all
         the risks and rewards of ownership and continues to control the transferred asset, the Credit Union
         continues to recognize the transferred asset to the extent of the Credit Union’s continuing involvement in
         that asset. If the Credit Union retains substantially all the risks and rewards of ownership of a transferred
         financial asset, the Credit Union continues to recognize the financial asset and also recognizes a
         collateralized borrowing for the proceeds received.

         On derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount
         and the sum of the consideration received / receivable and any cumulative gain or loss that had been
         recognized in other comprehensive income and accumulated in equity is recognized in profit or loss.

         On derecognition of a financial asset other than in its entirety (e.g. when the Credit Union) retains an
         option to repurchase part of a transferred asset or retains a residual interest that neither results in the
         retention nor transfer of substantially all the risks and rewards of ownership, the Credit Union allocates
         the previous carrying amount of the financial asset between the part it continues to recognize under
         continuing involvement, and the part it no longer recognizes on the basis of the relative fair values of
         those parts on the date of the transfer. The difference between the carrying amount allocated to the part
         that is no longer recognized and the sum of the consideration received for the part no longer recognized
         and any cumulative gain or loss allocated to it that had been recognized in other comprehensive income
         is recognized in profit or loss.

 i)      Other liabilities

         Other liabilities are subsequently measured at amortized cost using the effective interest method.

 j)      Derecognition of financial liabilities

         The Credit Union derecognizes financial liabilities when, and only when, the Credit Union’s obligations
         are discharged, cancelled or they expire.

 k)      Transaction costs

         Transaction costs related to financial assets and liabilities at fair value through profit and loss are
         expensed as incurred. Transaction costs include fees and commissions paid to agents, advisors, broker
         and dealers, levies by regulatory agencies and transfer taxes and duties related to available-for-sale
         financial assets, held-to-maturity financial assets, other liabilities and loans and receivables are netted
         against the carrying value of the asset or liability and are amortized over the expected life of the
         instrument using the effective interest method. Transaction costs do not include debt premiums or
         discounts, financing costs or internal administrative costs.

 l)      Embedded derivatives

         Derivatives embedded in non-derivative host contracts are treated as separate derivatives when their
         risks and characteristics are not closely related to those of the host contracts and the host contracts are
         not measured at FVTPL. As at December 31, 2011, December 31, 2010 and January 1, 2010, the Credit
         Union does not have any embedded derivatives that require separation.

Cash and cash equivalents

Cash and cash equivalents include cash on hand, cash held with other chartered banks and other highly liquid
investments with original maturities of three months or less. Cash and cash equivalents are used by the Credit
Union in the management of its short term commitments.

Cash and cash equivalents are classified as loans and receivables and are carried at amortized cost, which is
considered to be equivalent to fair value due the short term nature of these assets.



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ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




 Loans to members

Loans to members including personal loans, mortgages and commercial loans, are recognized when the cash
is advanced to the borrower. All loans to members are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market and have been classified as loans and
receivables, which are subsequently measured at amortized cost using the effective interest method.

Allowance for impaired loans

The allowance for impaired loans is maintained in an amount considered adequate to absorb incurred losses in
the loan portfolio. The allowance for impaired loans reflects management’s best estimate of the losses existing
in the loan portfolio and their judgments about economic conditions. If the circumstances under which these
estimates and judgments were made change, there could be a significant change to the allowance for impaired
loans currently recognized. The allowance for impaired loans consists of a specific provision component
attributable to individually significant exposures and a collective provision, established for groups of loans with
similar risk characteristics. Each component of the allowance for impaired loans is reviewed at least on the
reporting date.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment was recognized (such as an improvement in the debtor’s
delinquency rating), the previously recognized impairment loss is reversed either directly or by adjusting the
allowance for impaired loans. The reversal does not result in a carrying amount of a financial asset that
exceeds what the amortized cost would have been had the impairment not been recognized at the date the
impairment is reversed. The amount of the reversal is recognized in profit or loss.

Write-offs are generally recorded after all reasonable restructuring or collection activities have taken place and
there is no realistic prospect of recovery. The methodology and assumptions used are reviewed regularly (i.e.
back tested).

Property and equipment

Property and equipment are measured at cost less accumulated depreciation and accumulated impairment
losses. The residual values, useful lives and depreciation methods are reviewed each year end and changed if
necessary. Cost includes expenditures that are directly attributable to bring the asset into working condition for
their intended use.

When parts of an item of property and equipment have different useful lives, they are accounted for as
separate items (major components) of property and equipment.

An item of property and equipment is derecognized upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of
an item of property and equipment is determined as the difference between the sales proceeds and the
carrying amount of the asset and is recognized in profit or loss.

Depreciation

Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful lives of each part
of an item of property, plant and equipment, since this most closely reflects the expected pattern of
consumption of the future economic benefits embodied in the asset. Leased assets are depreciated over the
shorter of the lease term and their useful lives. Land is not depreciated.

Depreciation of property and equipment for the current and comparative periods is based on their estimated
useful life using the following annual rates:

       Buildings                                  2% - 4%
       Furniture and equipment                       10%
       Computer equipment and software               20%
       Leasehold improvements                        20%
       Vehicles                                      20%



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ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




 Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and
rewards of ownership to the lessee. All other leases are classified as operating.

 a)   The Credit Union as Lessor

      Rental income from operating leases is recognized on a straight-line basis over the term of the relevant
      lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the
      carrying amount of the leased asset and recognized as an expense on a straight-line basis over the
      lease term.

 b)   The Credit Union as Lessee

      Assets held under finance leases are initially recognized as assets of the Credit Union at their fair value
      at the inception of the lease or, if lower, at the present value of the minimum lease payments. The
      corresponding liability to the lessor is included in the consolidated statement of financial position as a
      finance lease obligation.

      Lease payments are apportioned between finance expenses and reduction of the lease obligation so as
      to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are
      recognized immediately in profit or loss, unless they are directly attributable to qualifying assets, in which
      case they are capitalized in accordance with the Credit Union’s general policy on borrowing costs.
      Contingent rentals are recognized as expenses in the periods in which they are incurred. As of
      December 31, 2011, December 31, 2010 and January 1, 2010 the Credit Union does not hold any
      finance lease obligations.

      Operating lease payments are recognized as an expense on a straight-line basis over the lease term,
      except where another systematic basis is more representative of the time pattern in which economic
      benefits from the leased asset are consumed. Contingent rentals arising under operating leases are
      recognized as an expense in the period in which they are incurred.

      In the event that lease incentives are received to enter into operating leases, such incentives are
      recognized as a liability. The aggregate benefit of incentives is recognized as a reduction of rental
      expense on a straight-line basis, except where another systematic basis is more representative of the
      time pattern in which economic benefits from the leased asset are consumed.

Foreclosed assets - assets available for sale

Foreclosed assets represent assets which have been repossessed on delinquent member mortgages.
Foreclosed assets are recorded at the lower of their prior carrying value and fair value less costs to sell.

As of December 31, 2011, December 31, 2010 and January 1, 2010 the Credit Union does not hold any
foreclosed assets.

Intangible assets

Finite life intangible assets are carried at cost less accumulated amortization and accumulated impairment
losses. Indefinite life intangible assets are carried at cost less accumulated impairment losses. Cost of
intangible assets includes expenditures directly attributable to the acquisition of the asset and required to
establish the asset in working condition given its intended use as well as borrowing costs. The cost of self-
constructed intangible assets includes the cost of materials and direct labour, any other costs required to
establish the asset in working condition given its intended use as well as borrowing costs.

Subsequent expenditures are capitalized only when they increase the future economic benefits embodied in
the specific asset to which they relate.




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ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




Amortization is recognized in the consolidated statement of comprehensive income (loss) and is computed on
either a declining balance or a straight-line basis using the rates and estimated useful lives indicated below.
These rates most closely reflect the expected pattern of consumption of the future economic benefits embodied
in the asset.

 Asset descriptions                             Amortization rate
 Computer software                                          20%
Amortization methods, useful lives and residual values are reviewed at each financial year-end and adjusted if
appropriate.

At the end of each reporting period, the Credit Union reviews the carrying amounts of its tangible and intangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any
such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the
impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
Credit Union estimates the recoverable amount of the cash-generating unit to which the asset belongs. A cash-
generating unit is the smallest identifiable group that generates cash inflows that are largely independent of the
cash inflows from other assets or groups of assets. Where a reasonable and consistent basis of allocation can
be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are
allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis
can be identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for
impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which the
estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or assets within a cash-generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset (or assets within a cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognized immediately in profit or loss.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is
increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does
not exceed the carrying amount that would have been determined had no impairment loss been recognized for
the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in
profit or loss. No impairment losses on tangible or intangible assets were identified as at December 31, 2011,
December 31, 2010 or January 1, 2010.

Deposits from members

Deposits from members include demand deposits, insured savings, term deposits, guaranteed investment
certificates and registered savings plans and are the Credit Union’s main source of funding. They are initially
measured at fair value, net of transaction costs, and are subsequently measured at amortized cost using the
effective interest method.

Provisions, contingent liabilities and contingent assets

 a)   Provisions

      Provisions are recognized when the Credit Union has a present obligation (legal or constructive) as a
      result of a past event, it is probable that the Credit Union will be required to settle the obligation, and a
      reliable estimate can be made of the amount of the obligation.

      The amount recognized as a provision is the best estimate of the consideration required to settle the
      present obligation at the end of the reporting period, taking into account the risks and uncertainties
      surrounding the obligation. When a provision is measured using the cash flows estimated to settle the
      present obligation, its carrying amount is the present value of those cash flows (where the effect of the
      time value of money is material).


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ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




      When some or all of the economic benefits required to settle a provision are expected to be recovered
      from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will
      be received and the amount of the receivable can be measured reliably.

 b)   Onerous contracts

      Present obligations arising under onerous contracts are recognized and measured as provisions. An
      onerous contract is considered to exist where the Credit Union has a contract under which the
      unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected
      to be received from the contract.

 c)   Restructurings

      A restructuring provision is recognized when the Credit Union has developed a detailed formal plan for
      the restructuring and has raised a valid expectation in those affected that it will carry out the restructuring
      by starting to implement the plan or announcing its main features to those affected by it. The
      measurement of a restructuring provision includes only the direct expenditures arising from the
      restructuring, which are those amounts that are both necessarily entailed by the restructuring and not
      associated with the ongoing activities of the entity.

      As at December 31, 2011, December 31, 2010 and January 1, 2010 the Credit Union does not have any
      provisions or onerous contracts. Restructuring obligations are appropriately accrued in accounts payable
      and accrued liabilities.

Employee benefits

 a)   Short term employee benefits

      Short term employee benefits include salaries and wages, employee benefits, allowances, bonuses and
      burdens. Short term employee benefits are expensed as the related service is provided.

 b)   Post retirement benefits

      The Credit Union is the sponsor of a contributory defined benefit pension plan under which all eligible
      employees are entitled to benefit, based on length of service and rates of pay. The Credit Union has
      adopted the following policies:

          The cost of pensions and other retirement benefits earned by employees is actuarially determined
          using the projected unit credit method and management’s best estimate of salary escalation,
          retirement ages of employees and expected health care costs.
          For the purpose of calculating the expected return on plan assets, the assets are valued at fair
          value.
          Actuarial gains and losses arising from defined benefit plans are recognized immediately in other
          comprehensive income. Past service cost is recognized immediately to the extent that the benefits
          are already vested, and otherwise is amortized on a straight-line basis over the average period until
          the benefits become vested.
      The employee benefit obligation recognized in the consolidated statement of financial position
      represents the present value of the defined benefit obligation as adjusted for unrecognized past service
      cost, and as reduced by the fair value of plan assets. Any asset resulting from this calculation is limited
      to unrecognized past service cost, plus the present value of available refunds and reductions in future
      contributions to the plan.

 c)   Termination benefits

      Termination benefits are recognized as an expense when the Credit Union is committed without realistic
      probability of withdrawal to a formal detailed plan either to terminate employment before the normal
      retirement date or to provide termination benefits as a result of an offer made to encourage voluntary
      redundancy. Termination benefits for voluntarily redundancies are recognized if the Credit Union has
      made an offer of voluntarily redundancy, it is probable that the offer will be accepted, and the number of

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ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




       acceptances can be reliably estimated. If benefits are payable more than 12 months after the reporting
       period, they are recorded at their discounted present value.

Membership shares

Membership shares issued by the Credit Union are only classified as equity to the extent that they do not meet
the definition of a financial liability.

       Type of shares                           Classification
       Membership shares                        Equity
The Credit Union’s membership shares are presented in the consolidated statement of financial position as
equity instruments in accordance with the substance of the contractual terms of the instruments. These shares
qualify as capital for regulatory purposes. Payments of dividends on membership shares presented as equity
are recognized as a distribution directly in equity.

Dividends are recorded when declared by the board of directors.

Revenue recognition

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective
interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the
expected life of the financial asset to that asset’s net carrying amount on initial recognition.

Dividend income is recognized when the right to receive payment is established. Dividends are included in
interest income on the consolidated statement of comprehensive income (loss).

Other fees and commission income include account service fees, investment management fees, and insurance
fees which are recognized over the period the services are performed.

Income taxes

Current tax assets and liabilities for the current and prior years are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted as at the statement of financial position date.

Deferred tax is provided on temporary differences at the statement of financial position date between the tax
bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities
are recognized for all taxable temporary differences, except:

 i)    Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a
       transaction that is not a business combination and, at the time of the transaction, affects neither the
       accounting profit nor taxable profit or loss.

 ii)   In respect of taxable temporary differences associated with investments in subsidiaries, where the timing
       of the reversal of the temporary differences can be controlled and it is probable that the temporary
       differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits
and unused tax losses, to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be
utilized except:

 i)    Where the deferred tax asset relating to the deductible temporary difference arises from the initial
       recognition of an asset or liability in a transaction that is not a business combination and, at the time of
       the transaction, affects neither the accounting profit nor taxable profit or loss.

 ii)   In respect of deductible temporary differences associated with investments in subsidiaries, deferred tax
       assets are recognized only to the extent that it is probable that the temporary differences will reverse in
       the foreseeable future and taxable profit will be available against which the temporary differences can be
       utilized.

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     ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




     The carrying amount of deferred tax assets is reviewed at each statement of financial position date and
     reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or
     part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each
     statement of financial position date and are recognized to the extent that it has become probable that future
     taxable profit will allow the deferred tax asset to be recovered.

     Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the
     asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or
     substantively enacted at the statement of financial position date.

     Current tax and deferred tax relating to items recognized directly in equity are also recognized in equity and not
     in the consolidated statement of comprehensive income (loss).

     Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax
     assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same
     taxation authority.

     Foreign currency translation

     The consolidated financial statements are presented in thousands of Canadian dollars ($).

     Transactions in foreign currencies are initially translated into Canadian dollars at the rate of exchange in effect
     at the date of the transaction.

     Monetary assets and liabilities denominated in foreign currencies are retranslated into Canadian dollars at the
     rate of exchange at the consolidated statement of financial position date. Non-monetary items that are
     measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the
     dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated
     using the exchange rates at the date when the fair value was determined.

     Translation gains and losses are recognized immediately in profit or loss and are included in the ‘other
     operating income (net)’ line item in the consolidated statement of comprehensive income (loss).



4.   Interest income

                                                                                   December 31,            December 31,
                                                                                          2011                    2010
                                                                                              $                       $

      Personal loans                                                                           698                    833
      Residential mortgages                                                                  9,897                 11,359
      Commercial mortgages                                                                   2,467                  1,854
                                                                                            13,062                 14,046

     Included within the various line items under interest income for the year ended December 31, 2011 is a total of
     $81 (2010 - $51) accrued on impaired financial assets.

     Total interest income reported above is calculated using the effective interest method, and relates to financial
     assets not carried at FVTPL.




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     ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




5.   Interest expense

                                                                               December 31,           December 31,
                                                                                      2011                   2010
                                                                                          $                      $

      Personal chequing accounts                                                            58                    58
      Savings accounts                                                                     257                   235
      Term deposits                                                                      1,910                 2,222
      Registered retirement plans                                                        1,187                 1,437
      Tax free savings account                                                              50                    34
                                                                                         3,462                 3,986

     Total interest expense reported above is calculated using the effective interest method, and relates to financial
     liabilities not carried at FVTPL.




6.   Other operating income (net)

                                                                               December 31,           December 31,
                                                                                      2011                   2010
                                                                                          $                      $

      Commissions and fees                                                                 187                   205
      Administration charges                                                             1,643                 1,671
      Foreign exchange gains                                                               307                   364
                                                                                         2,137                 2,240

     All other operating income and operating expenses items detailed above relate to financial assets and liabilities
     that are not at FVTPL and do not include any amounts used in determining the effective interest rate.




7.   Components of other comprehensive income


                                                                                December 31,          December 31,
                                                                                       2011                  2010
                                                                                           $                     $

      Actuarial losses on the defined pension plan                                         (249)                (154)
                                                                                           (249)                (154)
      Income tax relating to actuarial losses on the defined benefit
        pension plan                                                                         39                   24
      Other comprehensive loss for the year                                                (210)                (130)




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     ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




8.   Cash and cash equivalents

                                                            December 31,          December 31,             January 1,
                                                                   2011                  2010                  2010
                                                                       $                     $                      $

      Cash on hand                                                    1,071                2,418                2,199
      Cash held with other chartered banks                           61,365               31,516               13,591
      Bonds and discount notes                                            -                    -                2,364
                                                                     62,436               33,934               18,154

     The average yield on the above accounts as at December 31, 2011 is 0.75% (December 31, 2010 - 0.26%).

     The Credit Union has available line of credit with Royal Bank of Canada in the amounts of $10,000 Cdn. This
     line of credit was unutilized as at December 31, 2011, December 31, 2010 and January 1, 2010.

     The Credit Union has a letter of credit with Central 1 in the amount of $250, which is unutilized as at
     December 31, 2011, December 31, 2010 and January 1, 2010.

     This line of credit is secured by certain short-term investments held by the Credit Union.



9.   Investments

     The following table provides information on the investments held by the Credit Union.

                                                              December 31,           December 31,          January 1,
                                                                     2011                   2010               2010
                                                                         $                      $                   $
      Debt securities held to maturity
       Term deposits                                                  23,543                 15,995            16,054
       Bonds and discount notes                                       27,632                 10,918            13,126
                                                                      51,175                 26,913            29,180
         Accrued interest on investments                                 245                     92               240
                                                                      51,420                 27,005            29,420

      Equity instruments - available for sale
        Investment in co-operative shares                                  2                      2                 2
                                                                           2                      2                 2
      Carrying value                                                  51,422                 27,007            29,422

      Market value                                                    51,370                 27,025            29,502




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      ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




10.   Loans to members

                                                               December 31,          December 31,         January 1,
                                                                      2011                  2010              2010
                                                                          $                     $                  $

       Mortgages                                                        213,282              260,374         270,489
       Personal                                                           6,804               10,832          12,032
       Commercial                                                        42,715               50,619          29,063
                                                                        262,801              321,825         311,584
       Add: accrued interest on loans                                       388                  394             442
       Less: allowance for impaired loans (Note 11)                        (604)                (834)           (570)
       Net loans to members                                             262,585              321,385         311,456

      The loan classifications set out above are as defined in the regulations to the Act.

      Mortgages are repayable in weekly, bi-weekly or monthly blended principal and interest installments over a
      maximum term of seven years based on a maximum amortization period of thirty-five years. Mortgages are
      secured by residential properties.

      Commercial loans and personal loans, including line of credit loans, are repayable to the Credit Union in
      weekly, bi-weekly or monthly blended principal and interest instalments over a maximum term of five years,
      except for line of credit loans which are repayable on a revolving credit basis and require minimum monthly
      payments. All loans, except for mortgage loans, are open and, at the option of the borrower, may be repaid at
      any time without notice. Types of collateral generally obtained by the Credit Union include, but are not limited
      to, the following: member’s personal property such as vehicles; cash and marketable securities; mortgage
      charges; fixed, floating or specific general security agreements; and personal guarantees.

      Concentration of risk and credit quality of loans

      The Credit Union has exposure to groupings of individual loans, which concentrate risk and create exposure to
      particular segments as noted below. The maximum exposure to credit risk of loans to members at
      December 31 is below. In addition, below is a breakdown of the security held on a portfolio basis:

                                                                   December 31,      December 31,         January 1,
                                                                          2011              2010              2010
                                                                              $                 $                  $

       Unsecured loans                                                    7,878               11,384          12,431
       Loans secured by cash and marketable
         securities                                                         687                1,640           1,776
       Loans secured by real property                                   226,230              273,454         256,979
       Loans guaranteed by government                                       107                  169             234
       Mortgages insured by Genworth and CMHC                            27,899               35,178          40,164
                                                                        262,801              321,825         311,584




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      ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




      Loan commitments

      The Credit Union has authorized additional credit loans, which are unutilized at December 31, 2011, for a sum
      of $31,443 (December 31, 2010 - $32,538; January 1, 2010 - $29,417). See Note 26 for additional disclosures
      related to management’s policies and procedures to manage its credit risk.

      As at December 31, 2011, the Credit Union was committed to the issuance of new mortgages to members of
      $2,312 (December 31, 2010 - $3,035; January 1, 2010 - $3,305).

      Letters of credit

      The Credit Union has issued letters of credit in the amount of $62 as at December 31, 2011 (December 31,
      2010 - $81, January 31, 2010 - $72).



11.   Allowance for impaired loans

      The activity in the allowance for impaired loans is summarized as follows:

                                                                                                     December 31,
                                                                                                            2011
                                                                  Personal         Mortgages    Commercial Total
                                                                        $                  $            $       $

        Balance, beginning of year                                      370               15            449       834
        Collection of loans previously written-off                       53                1              -        54
        Loans written-off as uncollectible                             (150)              (5)             -      (155)
        Provision for (recovery of) impaired loans                       13               (3)          (139)     (129)
        Balance, end of year                                            286                8            310       604

        Aggregate impaired loans, end of year                          206               971         1,076      2,253




                                                                                                      December 31,
                                                                                                             2010
                                                                 Personal      Mortgages        Commercial   Total
                                                                       $               $                $        $

        Balance, beginning of year                                   336               120            114         570
        Collection of loans previously written-off                    28                 -              -          28
        Loans written-off as uncollectible                          (180)              (34)             -        (214)
        Provision for impaired loans                                 186               (71)           335         450
        Balance, end of year                                         370                15            449         834

        Aggregate impaired loans, end of year                        656               241            772       1,669




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ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




Credit quality of member loans is summarized as follows:

                                                                                                December 31,
                                                                                                       2011
                                               Personal       Mortgages        Commercial             Total
                                                     $                $                $                   $

  Neither past due (1) not impaired                  6,270         199,831          40,712             246,813
  Past due but not impaired                            328          12,480              927             13,735
  Impaired                                             206             971           1,076               2,253
                                                     6,804         213,282          42,715             262,801
  Less: specific allowance                             197                -             197                394
                                                     6,607         213,282          42,518             262,407
  Less: collective allowance                            89               8              113                210
                                                     6,518         213,274          42,405             262,197
  (1)
      A loan is considered to be past due when the counterparty has not made a payment the day of the contractual
      payment date.



                                                                                                December 31,
                                                                                                       2010
                                                Personal       Mortgages        Commercial             Total
                                                      $                $                $                  $

  Neither past due (1) not impaired               10,008         242,608             45,748           298,364
  Past due but not impaired                          583          19,511              1,698            21,792
  Impaired                                           241             656                772             1,669
                                                  10,832         262,775             48,218           321,825
  Less: specific allowance                           227               -                320               547
                                                  10,605         262,775             47,898           321,278
  Less: collective allowance                         143              15                129               287
                                                  10,462         262,760             47,769           320,991



                                                                                                    January 1,
                                                                                                        2010
                                                Personal       Mortgages        Commercial              Total
                                                      $                $                $                    $

  Neither past due (1) not impaired               11,400         261,761             28,713           301,874
  Past due but not impaired                          386           8,442                  -             8,828
  Impaired                                           246             286                350               882
                                                  12,032         270,489             29,063           311,584
  Less: specific allowance                           291              28                 94               413
                                                  11,741         270,461             28,969           311,171
  Less: collective allowance                          45              92                 20               157
                                                  11,696         270,369             28,949           311,014




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ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




Member loans past due but not impaired:

                                                                                                     December 31,
                                                                                                            2011
                                                Personal        Mortgages       Commercial                 Total
                                                      $                 $               $                       $
  Past due but not impaired
     Under 30 days                                      210           8,924                782            9,916
     30 to 89 days                                      118           3,556                145            3,819
     90 to 179 days                                         -             -                   -                -
  Total                                                 328          12,480                927           13,735
  Note: Includes fully secured loans for which, in the opinion of management, there is no reasonable doubt as to
  ultimate collectability of the principal or interest.



                                                                                                     December 31,
                                                                                                            2010
                                                  Personal       Mortgages        Commercial                Total
                                                        $                $                $                     $
  Past due but not impaired
    Under 30 days                                      455           16,183              1,165             17,803
    30 to 89 days                                      128            2,294                533              2,955
    90 to 179 days                                       -            1,034                  -              1,034
  Total                                                583           19,511              1,698             21,792



                                                                                                        January 1,
                                                                                                            2010
                                                    Personal       Mortgages        Commercial              Total
                                                          $                $                $                    $
  Past due but not impaired
    Under 30 days                                         225           2,608                    -          2,833
    30 to 89 days                                         161           4,897                    -          5,058
    90 to 179 days                                          -             937                    -            937
  Total                                                   386           8,442                    -          8,828




                                                 - 38 -
      ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




12.   Property and equipment

                                                                                                                 2011
                                                                Computer Furniture and          Leasehold
                                       Land      Buildings     equipment   equipment         improvements        Total
                                          $              $             $             $                  $            $
       Cost
         Balance, beginning of year    4,791         3,030         2,853           2,280             1,075      14,029
         Additions                         -             8           115             278                11         412
         Balance, end of year          4,791         3,038         2,968           2,558             1,086      14,441

       Accumulated depreciation
         Balance, beginning of year        -            86         2,674           1,803               395       4,958
         Depreciation expense              -            84            65             108               196         453
         Balance, end of year              -           170         2,739           1,911               591       5,411
       Net book value                  4,791         2,868           229             647               495       9,030


                                                                                                               2010
                                                                Computer     Furniture and       Leasehold
                                          Land     Buildings    equipment      equipment      improvements     Total
                                             $             $            $                $               $        $
       Cost
         Balance, beginning of year      4,791        2,969         2,992           2,339            1,352    14,443
         Additions                           -           61            34              34              (14)      115
         Disposals                           -            -          (173)            (93)            (263)     (529)
         Balance, end of year            4,791        3,030         2,853           2,280            1,075    14,029

       Accumulated depreciation
         Balance, beginning of year          -            -         2,787           1,790              471     5,048
         Depreciation expense                -           86            60             106              187       439
         Disposals                           -            -          (173)            (93)            (263)     (529)
         Balance, end of year                -           86         2,674           1,803              395     4,958
       Net book value                    4,791        2,944           179             477              680     9,071



13.   Other intangible assets

      Computer software

                                                                                 December 31,            December 31,
                                                                                        2011                    2010
                                                                                            $                       $
        Cost
          Balance, beginning of year                                                         1,346               1,328
          Additions                                                                             44                  18
          Balance, end of year                                                               1,390               1,346

        Accumulated depreciation
          Balance, beginning of year                                                         1,302               1,297
          Depreciation expense                                                                  14                   5
          Balance, end of year                                                               1,316               1,302
        Net book value                                                                          74                  44



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      ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




14.   Other assets

                                                                  December 31,         December 31,        January 1,
                                                                         2011                 2010             2010
                                                                             $                    $                 $

       Accounts receivable                                                    76                   75               51
       Income taxes receivable                                                 -                    -              257
       Prepaid expenses                                                      291                  250              174
                                                                             367                  325              482

15.   Deposits from members

                                                                  December 31,         December 31,        January 1,
                                                                         2011                 2010             2010
                                                                             $                    $                 $

       Personal chequing accounts                                        51,184               46,317           40,922
       Savings accounts                                                 138,289              129,530          116,192
       Term deposits                                                    105,715              124,284          123,094
       Registered retirement plans                                       62,035               63,866           61,322
       Tax free savings accounts                                          3,968                2,613            1,210
                                                                        361,191              366,610          342,740
       Add: accrued interest on deposits from members                     1,553                2,111            2,270
                                                                        362,744              368,721          345,010

      Term deposits

      Term deposits for periods of one to five years generally may not be withdrawn, prior to maturity, without
      penalty. Term deposits for periods less than one year may be withdrawn after 30 days, subject to an interest
      reduction.

      Withdrawal privileges on all deposit accounts are subject to the overriding right of the Board of Directors to
      impose a waiting period.

      Registered retirement plans

      The Credit Union is the self-trustee for the registered retirement plans offered to members. Members’
      contributions to these plans, as well as income earned on them, are deposited in the Credit Union. On
      withdrawal, payment of the plan proceeds is made to the members, or the parties designated by them, by the
      Credit Union.



16.   Pension plan

      The Credit Union has a contributory defined benefit pension plan mandatory to all full-time employees who
      have attained 24 months of continuous service and open to certain part-time employees of the Credit Union
      meeting certain eligibility conditions.

      The Credit Union measures its defined benefit obligations and the fair value of plan assets for accounting
      purposes at December 31 every year.

      The most recent actuarial valuation for funding purposes of the pension plan was as of January 1, 2010. The
      next required actuarial valuation for the defined benefit plan is expected to be completed as of January 1, 2013.




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ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




The amount included in the consolidated statements of financial position arising from the Credit Union’s
obligation in respect of defined benefit plans is as follows:

Defined benefit plan

                                                           December 31,       December 31,         January 1,
                                                                  2011               2010               2010
                                                                      $                  $                  $

 Present value of funded obligation                               10,345                9,986            8,858
 Less: fair value of plan assets                                  (8,875)              (8,711)          (7,561)
 Net liability                                                     1,470                1,275            1,297

 Amounts in the consolidated statements of financial position
  Liabilities                                                1,470                      1,275              1,297
 Net liability                                               1,470                      1,275              1,297


Movements in the fair value of the plan assets and present value of the defined benefit obligation are as
follows:

Funded pension plan

                                                                         December 31,            December 31
                                                                                2011                   2010
                                                                                    $                      $

 Plan assets
   Opening fair value of plan assets                                               8,711                   7,561
   Expected return on plan assets                                                    630                     549
   Actuarial losses                                                                 (783)                     49
   Contributions by employer                                                         406                     574
   Contributions by employees                                                        190                     205
   Benefits paid                                                                    (279)                   (227)
                                                                                   8,875                   8,711

 Defined benefit obligation
  Opening defined benefit obligation                                               9,986                   8,858
  Current service cost                                                               647                     636
  Interest cost                                                                      525                     516
  Actuarial (gains) losses                                                          (534)                    203
  Benefits paid                                                                     (279)                   (227)
                                                                                  10,345                   9,986




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ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




The Credit Union’s net benefit plan expense recognized for the defined benefit plan is as follows:

Funded pension plan

                                                                         December 31,           December 31,
                                                                                2011                   2010
                                                                                    $                      $

 Current service cost                                                                647                 636
 Interest on obligation                                                              525                 516
 Expected return on plan assets                                                     (630)               (549)
 Contributions by employees                                                         (190)               (205)
 Total included in ‘personnel expenses’                                              352                 398

 Actual return (loss) on plan assets                                                (153)               598



The expense is recognized in the following line items in the consolidated statement of comprehensive income
(loss):

                                                                                              2011     2010
                                                                                                 $        $

 Personnel expenses                                                                             352     398

The actuarial gains (losses) recognized in other comprehensive income are as follows:

                                                                                             2011       2010
                                                                                                $          $

 Cumulative amounts as of January 1                                                           (154)        -
 Recognized during the year                                                                   (249)     (154)
 Cumulative amounts as of December 31                                                         (403)     (154)




The fair value of plan assets by major investment type and expected rate of return is as follows:

                                                          December 31,                       December 31,
                                                                   2011                             2010
                                                              Expected                          Expected
                                                    Amount       return               Amount       return
                                                         $            %                    $           %

 CUMIS Balanced Fund                                   3,739                            3,531
 CUMIS Balanced Core Fund                              5,136                            5,180
 Total                                                 8,875              7.1           8,711            7.0

The pension plan does not hold securities issued by the Credit Union.

An external manager manages the investments held by the pension plan. The investments consist of units held
in the CUMIS Balance Core Fund (McLean Budden) and the CUMIS Balanced Fund (Mawer). The funds are
managed by external investment management firms and invested in a balanced mandate of fixed income,
domestic equities and foreign equities.

                                                  - 42 -
      ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




      The overall expected rate of return is a weighted average of the expected returns of the various categories of
      plan assets held. Management’s assessment of the expected returns is based on historical return trends and
      analysts’ predictions of the market for the asset over the life of the related obligation.

      The actual return on plan assets was a loss of $153 (2010 - income of $598).

      The principal assumptions used for the purposes of the actuarial valuations were as follows:

                                                                                     As at                  As at
                                                                              December 31,            December 31,
                                                                                     2011                    2010
                                                                                        %                       %

       Discount rate                                                                      4.75                 5.00
       Expected return on plan assets                                                     7.10                 7.00
       Future salary increases                                                               -                 3.50



      The history of experience adjustments is as follows:

                                                                 December 31,        December 31,         January 1,
                                                                        2011                2010               2010
                                                                            $                   $                  $

       Defined benefit obligation                                         (10,345)            (9,986)         (8,858)
       Plan assets                                                          8,875              8,711           7,561
       Deficit                                                             (1,470)            (1,275)         (1,297)

       Experience adjustments on plan liabilities                             534                 (203)           n/a

       Experience gain (loss) adjustments on plan assets                     (783)                 49             n/a


      The Credit Union expects to make a contribution of $419 (2010 - $450) to the defined benefit plan during the
      next fiscal year.



17.   Income taxes

      The following are major components of the income tax expense:

                                                                              December 31,            December 31,
                                                                                     2011                    2010
                                                                                         $                       $

       Current tax
        Current tax expense in respect of the current year                                    -                  50
                                                                                              -                  50

       Deferred tax
         Deferred tax expense in the current year                                           89                    -
       Total income tax expense                                                             89                   50




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      ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




      The provision for income taxes reported for the year ended December 31 differs from the amount computed by
      applying the Canadian statutory rate to income before income taxes for the following reasons:

                                                                                 December 31,            December 31,
                                                                                        2011                    2010
                                                                                            $                       $

       Income before tax                                                                      437                    15

       Income tax expense based on statutory rate of 15.5%
         (2010 - 16%)                                                                          68                      2
       Effect of non-deductible expenses                                                        1                      1
       Effect of permanent differences                                                          -                      -
       Income tax rate changes in deferred taxes, return to provision
          and other                                                                            20                    47
       Total income tax expense                                                                89                    50




      Temporary differences which give rise to the following deferred income tax asset (liability) as at December 31
      are as follows:

                                                               December 31,           December 31,          January 1,
                                                                      2011                   2010                2010
                                                                          $                      $                   $

       Deferred income tax liabilities
        Allowance for impaired loans                                         33                    44                25
        Property and equipment                                             (639)                 (604)             (584)
        Defined benefit obligation                                          228                   215               208
        Accrued liabilities                                                  22                    31               125
        Loss carryforwards                                                  142                   150                48
        Other                                                                 8                     9                 -
       Deferred income tax liability                                       (206)                 (155)             (178)



18.   Members’ shares

      Membership shares

      The Credit Union is authorized to issue an unlimited number of membership shares. Each member is required
      as a condition of membership to own a minimum of ten membership shares and may own up to a maximum of
      one hundred membership shares with an issue price of $10 each. Shares are redeemable on termination of
      membership, subject to the discretion of the Directors, who may require notice, and subject to the Credit Union
      meeting capital adequacy requirements. As at December 31, 2011 the value of the membership shares
      classified as equity was $3,747 (December 31, 2010 - $3,928, January 1, 2010 - $3,927).

      Dividends on membership shares is payable at a discretionary rate, as declared by the Board of Directiors,
      subject to availability of sufficient earnings to meet the regulatory capital requirements of the Act described in
      Note 19 to the financial statements. As at December 31, 2011, December 31, 2010 and January 1, 2010, no
      dividends have been declared.




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      ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




      Special shares

      The Credit Union is authorized to issue an unlimited number of Class A Special Shares and Class B Special
      Shares, each issuable in series, with terms and conditions to be determined by the Board of Directors prior to
      issuance. On issuance, holders of such new classes of shares will not be entitled to vote, by virtue of their
      shareholding, at meetings of members. As at December 31, 2011, December 31, 2010 and January 1, 2010,
      no Class A Special Shares or Class B Special Shares have been issued.



19.   Capital adequacy

      Capital management

      The Board approves annually the capital management policy and the annual business plan. This policy outlines
      the Credit Union’s overall objectives and guidelines to ensure that the Credit Union has the required quantity,
      quality and appropriate composition of capital needed to address the inherent risks of the Credit Union and to
      support the current and future operating plans.

      The Act requires credit unions to maintain regulatory capital of at least 4% of total assets and 8% of risk-
      weighted assets. The risk weighting of assets is specified in the Regulations to the Act. The Credit Union is in
      compliance with its policies and the Act regarding regulatory capital as at December 31 as outlined in the table
      below.

                                                                                                 2011          2010
                                                                                                    $             $

       Tier 1 capital
         Retained earnings                                                                    16,845         16,707
         Membership shares                                                                     3,747          3,928
       Total Tier 1 capital                                                                   20,592         20,635

       Tier 2 capital
         Collective loan provision                                                               210            287
       Total Tier 2 capital                                                                      210            287
       Total capital                                                                          20,802         20,922

                                                                                                    %             %

       Leverage ratio                                                                            5.39           5.34
       Risk weighted assets ratio                                                               12.34          11.42




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      ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




20.   Related party transactions

      Key management personnel, directors and their related parties have transacted with the Credit Union during
      the year as follows:

                                       December 31,                    December 31,                 January 1,
                                               2011                            2010                      2010
                                 Maximum    Closing             Maximum     Closing        Maximum     Closing
                                  balance  balance               balance    balance         balance   balance
                                        $         $                    $          $               $          $

       Loan to members                 1,614         1,600          1,506        1,499          1,462         1,457
       Member deposits                   n/a           246            n/a          175            n/a           105
       Membership shares                 n/a             1            n/a            1            n/a             1
                                       1,614         1,847          1,506        1,675          1,462         1,563

      The interest rates charged on balances outstanding from key management personnel, directors and their
      related parties are the same as those charged in an arm’s length transaction. Loan and mortgages balances
      are secured as per the Credit Union lending policies.

      There was no allowance for impaired loans required in respect of these loans as at December 31, 2011,
      December 31, 2010 and January 1, 2010.


      Key management personnel and their related parties received compensation in the year which comprised of:

                                                                                           2011               2010
                                                                                              $                  $

       Salaries and other short-term employee benefits                                       345               251
       Pension and other benefits                                                             32                27
                                                                                             377               278

      In addition to key management personnel’s salaries, these employees participate in the defined benefit plan of
      the Credit Union which provides certain benefits to employees upon retirement. See note 16 for further details
      on the Credit Union’s pension plan.

      Directors received the following amounts for serving the Credit Union:

                                                                                           2011               2010
                                                                                              $                  $

       Directors’ remuneration                                                                61                53



21.   Remuneration of officers and employees

      In accordance with the requirements of the Act and accompanying Regulations there are no specified officers
      and employees receiving remuneration of greater than $150,000 in the year.




                                                       - 46 -
      ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




22.   Commitments

      The Credit Union is committed to the following minimum annual payments for its operating leases:

                                                                                                                     $

       2012                                                                                                       593
       2013                                                                                                       462
       2014                                                                                                       402
       2015                                                                                                       236
       2016                                                                                                       209
       2017 and thereafter                                                                                        152
                                                                                                                2,054

      The Credit Union has issued guarantees to CUETS (Credit Union Electronic Transaction Services) regarding
      members’ credit limits on their MasterCard. As at December 31, 2011, the guaranteed limits amounted to $167
      (December 31, 2010 - $199, January 1, 2010 - $209). The Credit Union believes that this guarantee will not
      have any significant unfavourable impact on its financial position and consequently no provision has been
      made in the consolidated financial statements.

23.   Contingencies

      During the normal course of business, there are various claims and proceedings which have been or may be
      instituted against the Credit Union. Management believes the disposition of the matters that are pending or
      asserted is not expected to have a material adverse effect on the financial position or the results of operations
      of the Credit Union.

24.   Other information

      The total fees paid to Central 1 for the year ended December 31, 2011 amounted to $47 (December 31, 2010 -
      $60). The total fees paid to Royal Bank of Canada for the year ended December 31, 2011 amounted to $240
      (December 31, 2010 - $278). These fees were primarily related to banking functions, educational training
      courses and consulting fees.

25.   Fair value of financial instruments

      Fair value

      The amounts set out below represent the fair values of the Credit Union’s financial instruments using the
      valuation methods and assumptions described below. The fair values disclosed do not reflect the value of
      assets that are not considered financial instruments, such as prepaids, capital assets, investments in
      associates, intangible assets, future income taxes payable and accrued employment contract benefits.


      The estimated fair value amounts are designed to approximate amounts at which instruments could be
      exchanged in a current transaction between willing parties who are under no compulsion to act. Fair values are
      based on estimates using present value and other valuation techniques, which are significantly affected by the
      assumptions used concerning the amount and timing of estimated future cash flows and discount rates which
      reflect varying degrees of risk. Because of the estimation process and the need to use judgment, the aggregate
      fair value amounts should not be interpreted as being necessarily realizable in an immediate settlement of the
      instruments.




                                                         - 47 -
ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




                                                                                                        2011
                                                                                                  Fair value
                                                                                 Carrying       over (under)
                                                                 Fair value        value      carrying value
                                                                          $             $                  $

 Assets
  Cash and cash equivalents                                           62,436       62,436                     -
  Investments                                                         51,370       51,422                   (52)
  Loans to members                                                   265,342      262,585                 2,757
  Other assets                                                            76           76                     -

 Liabilities
   Deposits from members                                             363,606      362,744                   862
   Accounts payable and accrued
     liabilities                                                          902          902                      -



                                                                                                          2010
                                                                                                     Fair value
                                                                                  Carrying         over (under)
                                                                   Fair value        value       carrying value
                                                                            $            $                    $

 Assets
  Cash and cash equivalents                                           33,934       33,934                     -
  Investments                                                         27,025       27,007                    18
  Loans to members                                                   321,252      321,385                  (133)
  Other assets                                                            75           75                     -

 Liabilities
   Deposits from members                                             369,243      368,721                   522
   Accounts payable and accrued
     liabilities                                                          980          980                      -



The following methods and assumptions were used to estimate the fair value of financial instruments:

 (i)     The fair values of cash and cash equivalents, certain other assets and certain other liabilities are
         assumed to approximate their carrying values, due to their short-term nature.

 (ii)    The fair value of investments is based on quoted market values where available (see Note 9).

 (iii)   The estimated fair value of floating rate loans and floating rate deposits is assumed to be equal to book
         value as the interest rates on these loans and deposits reprice to market on a periodic basis.

 (iv)    The estimated fair value of fixed rate loans, fixed rate deposits and liabilities qualifying as regulatory
         capital is determined by discounting the expected future cash flows of these loans, deposits and capital
         accounts at current market rates for products with similar terms and credit risks.




                                                     - 48 -
      ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




      Fair value hierarchy

      Financial instruments recorded at fair value on the statement of financial position are classified using a fair
      value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value
      hierarchy has the following levels:

       Level 1 - Valuation based on quoted prices (unadjusted) in active markets for identical assets or liabilities;

       Level 2 - Valuation techniques based on inputs other than quoted prices included in Level 1 that are
                 observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from
                 prices);

       Level 3 - Valuation techniques using inputs for the asset or liability that are not based on observable market
                 data (unobservable inputs).


      The fair value hierarchy requires the use of observable market inputs whenever such inputs exist. A financial
      instrument is classified to the lowest level of the hierarchy for which a significant input has been considered in
      measuring fair value.

      The Credit Union does not have any financial instruments carried at fair value as at December 31, 2011,
      December 31, 2010 and January 1, 2010.



26.   Nature and extent of risks arising from financial instruments

      The Credit Union is exposed to the following risks as a result of holding financial instruments: credit risk,
      liquidity risk and market risk. The following is a description of these risks and how the Credit Union manages its
      exposure to these risks.

      Credit risk

      The business of the Credit Union necessitates the management of credit risk. Credit risk is the potential for loss
      due to the failure of a borrower to meet its financial obligations.

      The Board of Directors of the Credit Union oversees the risk management process. Senior management
      coordinates policy setting on risk management issues, assesses the risk exposure of the Credit Union and
      reviews the effectiveness of internal control processes.

      The Credit Union uses a disciplined lending approach with standard underwriting parameters for each category
      of loans. These parameters are used to assist the Credit Union in implementing a prudent and effective
      process to assess the borrower’s ability to repay.

      The Credit Union mitigates credit risk by obtaining quality collateral. The Credit Union considers collateral to be
      of good quality if it can determine the legal validity and market value on an on-going basis. The Credit Union’s
      internal policy provides additional information regarding the appropriate collateral based on the category of
      loan. Types of collateral generally obtained by the Credit Union include, but are not limited to, the following:
      member’s personal property such as vehicles; cash and marketable securities; mortgage charges; fixed,
      floating or specific general security agreements; and personal guarantees.

      In addition, the Credit Union monitors its loan concentration to ensure that it is in compliance with its policies.

      Liquidity risk

      The business of the Credit Union necessitates the management of liquidity risk. Liquidity risk is the risk of being
      unable to meet financial commitments, under all circumstances, without having to raise funds at unreasonable
      prices or sell assets on a forced basis.




                                                            - 49 -
ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




The Credit Union’s objective is to implement a policy that addresses limits on the sources, quality and amount
of the assets to meet normal operational, contingency funding for significant deposit withdrawals and regulatory
requirements.

The Board of Directors (“Board”) is ultimately responsible for the liquidity risk management policy. Management
reports monthly, to the Board, the Credit Union’s compliance with the policy and regulatory requirements;
concentration of large deposits of single/connected depositors as a percentage of total deposits; and reports
borrowings for liquidity purposes, the level of borrowings and the liquidity less borrowings in relation to the
statutory minimum.

Additional details are outlined in the Credit Union’s internal policy manual.


The Act requires credit unions to maintain eligible assets for adequate liquidity. Assets held by the Credit Union
for such purposes are outlined in the table below.

                                                                                                   2011            2010
                                                                                                      $               $

  Cash and cash equivalents                                                                      62,436         33,934
  Investments
    Term deposits                                                                                23,543          15,995
    Bonds and bankers deposit notes                                                              27,632          10,918
  Less: investments pledged against line of credit                                              (10,000)        (10,000)
  Total assets held for liquidity                                                               103,611          50,847


Contractual maturities of financial liabilities are shown under interest rate risk. The Credit Union has no material
commitments for capital expenditures and there is no need for such expenditures in the normal course of
business.

Market risk

Market risk is the risk of loss that may arise from change in market factors such as interest rates and foreign
exchange rates. The Credit Union is exposed to this market risk in its investing and asset/liability management
activities.

Senior management is responsible for managing market risk in accordance with the Credit Union’s internal
policy. Senior management reports monthly to the Board its compliance with the policy and regulatory
requirements; dollar volume and yields of all investments by investment category; and the particulars of all
investment transactions entered into by the Credit Union. All exceptions noted are to be reported to the Board.

The Board is responsible for monitoring significant variances and to ensure that corrective measures are
implemented.

Interest rate risk

Interest rate risk refers to the potential impact of changes in interest rates on the Credit Union’s earnings when
maturities of its financial liabilities are not matched with the maturities of its financial assets or which are priced
on a different basis. It is the policy of the Credit Union to keep exposure to interest rate fluctuations within limits
set by the Board of Directors and by the Act.




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ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




The table below summarizes the carrying amounts of financial instruments exposed to interest rate risk by
maturity dates and effective interest rates for the following on consolidated statement of financial position
financial instruments:

                                                                                                           2011
                                                         Three        One                             Effective
                               On      Less than     m onths to     to five     Non-rate               interest
                          dem and      3 m onths      one year       years     sensitive      Total        rate
                                $              $                          $            $          $           %

 Cash and cash
    equivalents              61,365             -              -          -        1,071     62,436        0.43
 Investments                      -        33,876         17,544          -            2     51,422        1.16
 Loans to members            64,757        13,522         57,713    126,593            -    262,585        4.25
 Other assets                    76             -              -          -            -         76           -
                            126,198        47,398         75,257    126,593        1,073    376,519

 Deposits from members      201,585        41,337         70,888     48,934             -   362,744        1.61
 Accounts payable and
   accrued liabilities          902             -              -          -            -        902             -
                            202,487        41,337         70,888     48,934            -    363,646
 On-balance sheet gap       (76,289)        6,061          4,369     77,659        1,073     12,873



                                                                                                           2010
                                                          Three        One                             Effective
                                On      Less than      months to     to five    Non-rate                interest
                            demand       3 months       one year      years     sensitive     Total         rate
                                 $              $                          $            $        $            %

 Cash and cash
    equivalents              31,516             -              -          -        2,418     33,934         0.15
 Investments                      -        20,742          6,263          -            2     27,007         0.94
 Loans to members            92,134        18,568         50,333    160,350            -    321,385         4.44
 Other assets                    75             -              -          -            -         75            -
                            123,725        39,310         56,596    160,350        2,420    382,401

 Deposits from members      184,381        51,169         69,986     63,166           19    368,721         1.97
 Accounts payable and
   accrued liabilities          980             -              -          -            -        980             -
                            185,361        51,169         69,986     63,166           19    369,701
 On-balance sheet gap       (61,636)      (11,859)       (13,390)    97,184        2,401     12,700

An analysis of the Credit Union’s risk due to changes in interest rates determined that a 100bp increase in
interest rates, with all other variables held constant, would result in an increase in net income of $869 while a
50bp decrease in interest rates, with all other variables held constant, would result in a decrease in net income
of $117.

Foreign currency exchange risk

Foreign currency exchange risk refers to the potential impact of changes in foreign exchange rates on the
Credit Union’s earnings when balances or currencies of its foreign currency liabilities are not matched with the
balances of its foreign currency assets. It is the policy of the Credit Union to mitigate exposure to foreign
exchange rate fluctuations by matching its foreign currency liabilities to its foreign currency assets.

Net foreign exchange gains of $307 (2010 - $364) have been included in other operating income (net) on the
consolidated statement of comprehensive income (loss) for the year ended December 31, 2011.



                                                     - 51 -
      ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




27.   Explanation of transition to International Financial Reporting Standards (IFRS)

      The Credit Union has adopted IFRS effective January 1, 2011 and the financial statements for the year ended
      December 31, 2011 are the first annual consolidated financial statements that comply with IFRS. Prior to the
      adoption of IFRS, the Credit Union prepared its consolidated financial statements in accordance with Canadian
      generally accepted accounting principles (“Canadian GAAP”). The Credit Union’s transition date is January 1,
      2010 (the “transition date”) and the Credit Union has prepared its opening IFRS statement of financial position
      at that date. The accounting policies set out in Note 3 have been applied in preparing the consolidated financial
      statements for the year ended December 31, 2011, the comparative information presented in these
      consolidated financial statements for the year ended December 31, 2010 and in the preparation of the opening
      IFRS consolidated statement of financial position as at January 1, 2010. The Credit Union has applied IFRS 1,
      First Time Adoption of International Financial Reporting Standards (“IFRS 1”) in preparing these first IFRS
      consolidated financial statements. In preparing the opening IFRS consolidated statement of financial position,
      the Credit Union has adjusted amounts previously reported in consolidated financial statements prepared in
      accordance with Canadian GAAP. This note explains the principal adjustments made by the Credit Union in
      restating its Canadian GAAP consolidated balance as at January 1, 2010 and its previously issued Canadian
      GAAP consolidated financial statements for the year ended December 31, 2010.

      Elected exemptions from full retrospective application

      IFRS 1 allows first-time adopters certain exemptions from the general requirement to apply IFRS which are
      effective for December 2011 year ends retrospectively. IFRS 1 also includes mandatory exceptions to the
      retrospective application of IFRSs.

      The Credit Union has applied the following exemptions:

      Business combinations

      IFRS 1 allows a first-time adopter to elect not to apply IFRS 3 Business Combinations retrospectively to
      business combinations that occurred before the date of transition to IFRS. The Credit Union has taken
      advantage of this election and has not applied IFRS 3 to business combinations that occurred prior to
      January 1, 2010.

      Employee benefits

      The Credit Union has elected to recognize all cumulative actuarial gains and losses relating to its defined
      benefit plans at the date of transition. Further, the Credit Union has elected to use the exemption not to
      disclose defined benefit plan surplus/deficit and experience adjustments before the date of transition.

      Borrowing costs

      The Credit Union has elected not to apply IAS 23 Borrowing Costs to qualifying assets acquired, produced or
      constructed with a capitalization commencement date prior to the date of transition.

      Mandatory exceptions to retrospective application

      In preparing these consolidated financial statements in accordance with IFRS 1 the Credit Union has applied
      the following mandatory exceptions from full retrospective application of IFRS:

      Estimates

      Hindsight was not used to create or revise estimates and accordingly, the estimates previously made by the
      Credit Union under Canadian GAAP are consistent with their application under IFRS.




                                                        - 52 -
ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




Effect of transition

The following tables set out the impact of adoption of IFRS on the opening consolidated statement of financial
position as at January 1, 2010 and the statement of financial position as at December 31, 2010:

                                                                                            January 1, 2010
                                                       Previous     Effect of
                                                      Canadian    transition                Re-
                                           Note          GAAP       to IFRS     classifications         IFRS
                                                              $            $                  $            $

 Assets
  Cash and cash equivalents                             18,154            -                   -       18,154
  Investments                                  c        29,182            -                 240       29,422
  Loans to members                          b, c       311,014            -                 442      311,456
  Property and equipment                       a         5,415        4,011                 (31)       9,395
  Intangible assets                            g             -            -                  31           31
  Other assets                              c, d         1,780         (525)               (773)         482
  Deferred income tax assets                   c             -          (91)                 91            -
                                                       365,545        3,395                   -      368,940

 Liabilities
   Deposits from members                       e       342,740            -               2,270      345,010
   Other liabilities                           e         3,926            -              (2,270)       1,656
   Defined benefit obligation                  d             -        1,297                   -        1,297
   Deferred income tax liabilities             c             -          178                   -          178
                                                       346,666        1,475                   -      348,141
 Liabilities qualifying as regulatory
   capital
   Membership shares                            f        3,927            -              (3,927)           -
                                                       350,593        1,475              (3,927)     348,141

 Members’ equity
  Membership shares                             f            -            -               3,927        3,927
  Retained earnings                         a, d        14,952        1,920                   -       16,872
                                                        14,952        1,920               3,927       20,799
                                                       365,545        3,395                   -      368,940




                                                    - 53 -
ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




                                                                                    December 31, 2010
                                                     Previous    Effect of
                                                    Canadian    transition               Re-
                                           Note        GAAP       to IFRS    classifications       IFRS
                                                            $            $                 $          $

 Assets
  Cash and cash equivalents                           33,934           -                  -      33,934
  Investments                                  c      26,915           -                 92      27,007
  Loans to members                          b, c     320,991           -                394     321,385
  Property and equipment                       a       5,071       4,044                (44)      9,071
  Intangible assets                            g           -           -                 44          44
  Other assets                              c, d       1,538        (625)              (588)        325
  Deferred income tax assets                   c           -        (102)               102           -
                                                     388,449       3,317                  -     391,766

 Liabilities
   Deposits from members                       e     366,610           -              2,111     368,721
   Other liabilities                           e       3,091           -             (2,111)        980
   Defined benefit obligations                 d           -       1,275                  -       1,275
   Deferred income tax liabilities             c           -         155                  -         155
                                                     369,701       1,430                  -     371,131
 Liabilities qualifying as
   regulatory capital
   Membership shares                            f      3,928           -             (3,928)          -
                                                     373,629       1,430             (3,928)    371,131

 Members’ equity
  Membership shares                             f          -           -              3,928       3,928
  Retained earnings                         a, d      14,820       1,887                  -      16,707
                                                      14,820       1,887              3,928      20,635
                                                     388,449       3,317                  -     391,766




                                                - 54 -
ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




The following table sets out a reconciliation of total equity under Canadian GAAP as at January 1, 2010 and
December 31, 2010 to total equity under IFRS:

                                                                                 January 1,       December 31,
                                                                       Note           2010               2010
                                                                                          $                  $

 Total members’ equity under Canadian GAAP                                           14,952                14,820

 Transitional adjustments
   Fair value as deemed cost                                               a          4,011                 4,044
   Employee benefits                                                       d         (1,822)               (1,900)
   Reclass membership shares                                                f         3,927                 3,928
                                                                                      6,116                 6,072
 Tax effect of the above                                                   h           (269)                 (257)
 Total adjustment to members’ equity                                                  5,847                 5,815
 Total members’ equity under IFRSs                                                   20,799                20,635

Notes to the reconciliations of the consolidated statement of financial position and the reconciliations of total
equity:

 (a)   The impact on deferred tax of the adjustments described below is set out in Note (h).

       Under Canadian GAAP the Credit Union recorded its land and building at cost. Under IFRS the Credit
       Union chose to use the IFRS 1 election to measure its land and building at fair value on the transition
       date as its deemed cost. As a result, the Credit Union has retrospectively recorded the increase in value
       of land and building, as well as an adjustment to retained earnings based on the difference between the
       cost under Canadian GAAP and fair value under IFRS on transition.

       The effect on the Credit Union of transitioning to IFRS deemed cost and the Canadian GAAP cost is an
       increase in property and equipment of $4,011, decrease in deferred income tax assets of $561 and
       increase retained earnings by $3,450 at January 1, 2010 and an increase in property and equipment of
       $4,044, decrease in deferred income tax assets of $561 and increase retained earnings by $3,483 at
       December 31, 2010 and decrease in depreciation by $33 for the year ended December 31, 2010.

 (b)   Under both Canadian GAAP and IFRS the Credit Union determines its allowance for impaired loans
       using an incurred loss model. IFRS requires objective evidence of a loss having occurred prior to
       recording impairment on a financial asset. IFRS also provides more detailed guidance on loss events,
       impairment analysis, and when an impairment is permitted. This increased guidance did not result in a
       change in the Credit Union’s impairment allowance.

 (c)   The Credit Union reclassed various items from ‘Other assets’ as follows:

       a.   Reclassification of accrued interest on loans to members of $442 as at January 1, 2010
            ($394 - December 31, 2010) to ensure proper presentation of the effective interest method.

       b.   Reclassification of accrued interest on investments of $240 as at January 1, 2010
            ($92 - December 31, 2010) to ensure proper presentation of the effective interest method.

       c.   Reclassification of deferred income tax assets of $91, as at January 1, 2010
            ($102 - December 31, 2010) to follow presentation requirements under IFRS.




                                                   - 55 -
ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




 (d)   Under Canadian GAAP the Credit Union was using the corridor method to amortize gains and losses. On
       transition to IFRS, the Credit Union elected to reset all cumulative unamortized actuarial gains and
       losses to zero as at January 1, 2010. Cumulative actuarial gains and losses that existed at January 1,
       2010 were recognized in opening retained earnings for the Credit Union’s employee benefit plans. This
       resulted in a decrease in the accrued pension asset of $525 (December 31, 2010 - $625), an increase in
       the defined benefit plan liabilities of $1,297 (December 31, 2010 - $1,275) and an increase in deferred
       income tax assets of $292 (December 31, 2010 - $304).

       Under IFRS, the Credit Union’s accounting policy is to recognize all actuarial gains and losses
       immediately in other comprehensive income. The unrealized actuarial gains and losses exceeding the
       corridor that were recognized in the statements of loss and comprehensive loss and retained earnings
       for the year ended December 31, 2010 under Canadian GAAP were reversed and all the actuarial gains
       and losses arising in the year ended December 31, 2010 ($130, net of deferred tax asset of $24) were
       recognized in other comprehensive income.

 (e)   The Credit Union reclassed various items from ‘Other liabilites’ as follows:

       a.   Reclassification of accrued interest on deposits from members of $2,251 as at January 1, 2010
            ($2,092 - December 31, 2010) to ensure proper presentation of the effective interest method.

       b.   Reclassification of accrued interest on insured savings and membership shares $19 as at
            January 1, 2010 ($19 - December 31, 2010) to follow presentation requirements under IFRS.

 (f)   Under IFRS, membership shares are classified as equity, not liabilities, due to their liquidation and
       redemption features set out in IAS 32 and IFRIC 2. The effect is to reclass $3,927 at January 1, 2010
       and $3,928 at December 31, 2010 from liabilities to equity.

 (g)   Under both Canadian GAAP and IFRS, intangible assets are to be presented separately on the
       consolidated statement of financial position. To correct this previous presentation deficiency, the Credit
       Union has appropriately reclassified and separately disclosure its computer software intangible asset of
       $31 as at January 1, 2010 (December 31, 2010 - $44) from property and equipment to intangible assets.

 (h)   The above changes increased the deferred tax asset as follows based on a tax rate of 16% which is the
       rate expected to be in effect when these temporary timing differences reverse:

                                                                                January 1,      December 31,
                                                                      Note           2010              2010
                                                                                         $                 $

       Fair value as deemed cost                                          a           (561)                (561)
       Provision for impaired loans                                       b              -                    -
       Employee benefits                                                  d            292                  304
       Increase in deferred tax liability                                             (269)                (257)




                                                   - 56 -
ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




The following table sets out the reconciliation of statement of comprehensive income (loss) for the year ended
December 31, 2010:

                                                                                            December 31, 2010
                                                           Previous       Effect of
                                                           Canadian      transition             Re-
                                                  Note       GAAP         to IFRSs    classification    IFRSs
                                                                  $               $                $        $

 Interest income                                             14,046               -                -   14,046
 Investment income                                              331               -                -      331
                                                             14,377               -                -   14,377

 Interest expense                                             3,986               -                -     3,986
 Other interest expense                                           4               -                -         4
                                                              3,990               -                -     3,990

 Net interest income                                         10,387               -                -   10,387
 Provision for impaired loans                        b          450               -                -      450
 Net interest margin                                          9,937               -                -    9,937

 Other operating income (net)                                 2,240               -                -    2,240
 Total operating income                                      12,177               -                -   12,177

 Deposit insurance premium                                      344             -                 -       344
 Depreciation and amortization                        a         477           (33)                -       444
 General and administrative                           e       4,199             -            (3,020)    1,179
 Marketing                                            e           -             -               192       192
 Members' insurance                                   e         305             -              (305)        -
 Occupancy                                            e           -             -             1,291     1,291
 Operations                                           e           -             -             1,901     1,901
 Personnel expenses                                c, d       6,298           (75)              197     6,420
 Other                                                e           -             -               391       391
 Total operating expenses                                    11,623          (108)              647    12,162
 Income (loss) from operations                                  554          (108)              647        15

 Non-recurring expenses
   Restructuring                                     d           197              -            (197)         -

 Community support
   Polish studios                                    e           294              -            (294)         -
   Sponsorships                                      e            38              -             (38)         -
   Advertising and promotion                         e           118              -            (118)         -
                                                                 450              -            (450)         -

 Loss before income taxes                                       (93)         (108)                 -       15
 Income tax expense (recovery)
    Current                                                      50              -                 -       50
    Future                                         c, f         (11)            11                 -        -
                                                                 39             11                 -       50

 Net loss                                                      (132)          (97)                 -       (35)
 Other comprehensive loss                          c, f           -          (130)                 -      (130)
 Total comprehensive loss for the
   year, net of income taxes                                   (132)            33                 -      (165)




                                                 - 57 -
      ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




      Notes to the reconciliation of the consolidated statement of comprehensive income (loss):

      The impact on deferred income tax of the adjustments described below is set out in Note (f).

       (a)    On transition to IFRS, the Credit Union decided to take the fair value as deemed cost election. As a
              result, the Credit Union adjusted its depreciation expense to reflect the decrease in the annual
              depreciation of the buildings for its remaining estimated useful life of $33.

       (b)    Under IFRS, the Credit Union was required to recalculate its allowance for impaired loans. This
              recalculation resulted in no impact on net income.

       (c)    The Credit Union elected to recognize all cumulative actuarial gains and losses as at January 1, 2010.
              As a result, the Credit Union adjusted its pension expense to remove the amortization of actuarial gains
              and losses. Furthermore, the Credit Union’s policy under IFRS is to record revaluation gains and losses
              into OCI. Under Canadian GAAP the Credit Union was recognizing revaluation gains and losses into
              income using the corridor approach.

       (d)    Under Canadian GAAP, extraordinary transactions not in the normal course of business were permitted
              to be reported separately on the income statement after income from operations; this is no longer
              permissible under IFRS and therefore there is a re-classification from re-structuring to personnel
              expenses for $197.

       (e)    Certain expenses were reclassed to follow the presentation requirements under IFRS:

                i.   $1,291 from General and Administrative to Occupancy
               ii.   $305 from Members’ Insurance to Operations
              iii.   $1,596 from General and Administrative to Operations
              iv.    $133 from General and Administrative to Other
               v.    $294 from Polish Studios to Other
              vi.    ($36) from Sponsorships to Other
             vii.    $118 from Advertising and Promotion to Marketing
             viii.   $74 from Sponsorships to Marketing
       (f)    This adjustment reflects the current or deferred income taxes resulting from the effect of the IFRS
              adjustments described.

      Material adjustments to the statement of cash flows for the year ended December 31, 2010

      There are no significant adjustments to the Credit Union’s statement of cash flows reported in accordance with
      IFRS.

      The Credit Union has modified the classification of certain items within the statement of cash flows in
      accordance with IFRS. Certain previous investing and financing activities presented under Canadian GAAP are
      now presented as operating activities, including the change in loans to members and change in deposits from
      members.

      In addition, interest paid, interest received, income taxes paid and income taxes received were previously
      recorded as supplemental information to the statement of cash flow under Canadian GAAP. Under IFRS, these
      items are now included under operating activities in the statement of cash flows.



28.   Subsequent Event

      Subsequent to the year end, the Credit Union applied for membership in Central 1. The Credit Union received
      confirmation of acceptance in Central 1 on February 24, 2012, granting the Credit Union Class A membership.




                                                         - 58 -
ST. STANISLAUS - ST. CASIMIR’S POLISH PARISHES CREDIT UNION LIMITED - CONSOLIDATED ANNUAL REPORT 2011




                              St. Stanislaus-St. Casimir’s
                         Polish Parishes Credit Union Limited


                                            Head Office:
                                      220 Roncesvalles Avenue
                                      TORONTO, ON M6R 2L7
                              Tel.: 416. 537.2181 Fax: 416. 536.8525
                                           www.polcu.com

                                           Call Centre:
                           Tel.: 416.236.1225 Toll Free: 1.855.765.2822



                                               - 59 -

				
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