FINANCIAL STATEMENTS 2016

CENTRALE BANK VAN CURAÇAO EN SINT MAARTEN

1. Balance sheet as of December 31

2. Profitandlossstatement

3. Notestothecondensedfinancialstatements

4. Independentauditor’sreport

CONTENT4

6

7

11

4

2016 2015

ASSETS

Gold 872,230,907 799,350,601

Foreignreceivablesandinvestments 2,668,424,851 2,518,045,667

Domesticreceivablesandinvestments 350,984,038 361,164,128

Fixedassets 97,116,983 93,254,924

Othercurrentassets 41,316,799 43,228,333

Total assets 4,030,073,578 3,815,043,653

LIABILITIES & EQUITY

LIABILITIES

Banknotesincirculation 434,751,063 419,086,683

Nonresidents’currentaccounts

inguilders 67,833,406 44,005,760

inforeigncurrency 438,554,555 336,487,663

Residents’currentaccounts

inguilders 1,939,429,161 1,911,576,714

inforeigncurrency 69,358,505 73,096,644

Residents’timedeposits

inguilders 227,400,000 162,600,000

inforeigncurrency - 53,557,311

Fundsinconsignment 15,569,411 11,395,413

Otherliabilities 14,773,189 17,042,475

Total liabilities 3,207,669,290 3,028,848,663

Balance sheet as of December 31 (in NAf.)

5

2016 2015

PROVISIONS 29,192,000 30,554,000

EQUITY

Capital 30,000,000 30,000,000

Reservefund 30,000,000 30,000,000

Appropriatedreserves 724,819,898 651,911,417

Retainedearnings 8,392,390 43,729,573

Total equity 793,212,288 755,640,990

Total liabilities & equity 4,030,073,578 3,815,043,653

The December 31, 2016 and December 31, 2015 figures are extracted from the audited financial statements.

Balance sheet as of December 31 (in NAf.) cont.

6

2016 2015

INCOME

Interestincome 55,242,930 48,798,727

Interestexpenses -2,321,293 -837,724

Net interest income 52,921,637 47,961,003

Capitalgain 85,522 28,021

Netunrealizedgain/lossrelatedtomarketvaluechanges 72,974,987 -103,250,499

Realizedforeignexchangeresult 3,260,422 5,938,690

Netunrealizedforeignexchangeresult -80,072 -230,741

Managementandcustodyfee -433,394 -438,572

Net investment and foreign exchange result 128,729,102 -49,992,098

Supervisionincome 9,287,870 13,680,246

Miscellaneousincome 1,224,238 1,673,344

Other income 10,512,108 15,353,590

Total income 139,241,210 -34,638,508

EXPENSES

Depreciationoftangiblefixedassets 5,943,071 5,648,885

Depreciationofintangiblefixedassets 1,214,839 2,001,646

Generaloperatingexpenses 50,782,429 25,409,600

Total expenses 57,940,339 33,060,131

Netresultincludinggain/lossfrommarketvaluechangesand

unrealizedforeignexchangeresult81,300,871 -67,698,639

Dotation/withdrawalunrealizedgain/lossrelatedtomarketvalue

changesandunrealizedexchangeresultto/fromtheappropriated

reserves

-72,908,481 103,374,511

Net result 8,392,390 35,675,872

Profit and loss statement (in NAf.)

The 2016 and 2015 figures are extracted from the audited financial statements.

7

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

GENERAL

TheaccountingprinciplesappliedbytheBankin this reportarederived from theFinancialReporting Principles of the Centrale Bankvan Curaçao en Sint Maarten1 (reference CBCS/2012/1) dated October 29, 2012,as approved by the Board of SupervisoryDirectors and stipulated by the Meeting ofthe Entitled Asset Holders on, respectively,June28,2013(Curaçao)andJuly31,2013(SintMaarten).

Thefollowingisasummaryofthesignificantaccountingprinciplesapplied.

The figures presented in these condensedfinancialstatementsarestatedinNetherlandsAntilleanGuilders(“NAf”).

Assets and liabilities are valued at nominalvalue unless otherwise stated. Income isrecognizedonanaccrualbasis.Expensesareincurredintheperiodtowhichtheyrelate.

NOTES TO THE BALANCE SHEET AS OF DECEMBER 31, 2016

GOLD

Goldisvaluedattheprevailingmarketpriceat balance sheet date. Unrealized gains/losses related to market value changesare credited/charged to the profit and lossstatement. Based on article 35, paragraph2, and article 40 of the Bank Statute, theunrealized result is subsequently credited/chargedtotheresultbeforeprofitdistributionand to the appropriated reserve regardinggold revaluation. If the balance of thisappropriated reservebecomesnegative, thenegativebalancewillbechargedtotheprofitandlossstatement.

1 “Grondslagen voor de financiële verslaggeving van de Centrale Bank van Curaçao en Sint Maarten.”

FOREIGN RECEIVABLES AND INVESTMENTS

The foreign receivables and investmentsrepresentcurrentaccountbalancesandtimedeposits with foreign financial institutions,securitiesinforeigncurrency,bondsissuedbytheformercountryoftheNetherlandsAntillesandtheIslandTerritoryofCuraçao,thedebtsofwhichweretakenoverbytheDutchStateaspartof thedebt relief in connectionwiththe constitutional changes, and receivablesfrom governments and institutions of othercountries.

Thesecuritiesrepresentinvestmentportfolios.Theinvestmentportfoliosmanagedinternallyare - except formonetary reasons that canmakemarketoperationsnecessary -held tomaturity and valued at amortized cost. Theinvestmentportfoliosmanagedexternallyarevalued at themarket price at balance sheetdate. Unrealized gains/losses from marketvaluechangeswithregardtotheinvestmentportfolios managed externally are credited/charged to the profit and loss statement.Basedonarticle35,paragraph2,andarticle40oftheBankStatute,theunrealizedresultis subsequently credited/charged to theappropriated reserve, which is accountedfor per each investment portfolio. If thebalanceoftheappropriatedreservebecomesnegative,thenegativebalancewillbechargedtotheprofitandlossstatement.

Realized gains and losses are immediatelyaccountedforintheprofitandlossstatement.

The accrued interest with respect to theinvestments is accounted for under thebalancesheetitem”Othercurrentassets.”

DOMESTIC RECEIVABLES AND INVESTMENTS

The domestic receivables and investments

relatetoinvestmentsinbondsissuedbysemi-government institutions inCuraçaoandSintMaarten (i.e., Integrated Utility Holding N.V.andSintMaartenHarbourFinanceN.V.),andloansgrantedbasedonarticle10,paragraph3,subf,oftheBankStatute,collateralizedbyamortgageonrealestatelocatedinCuraçaoorSintMaartenorothercollateral.

Thebondsarevaluedattheiramortizedcostand the loans at their nominal value less aprovisionforpossiblelosses.

Theaccruedinterestwithrespecttothebondsandloansisaccountedforunderthebalancesheetitem“Othercurrentassets.”

FIXED ASSETS

Theseassets,whichalsoincludetheprintingcost of bank notes and the capitalized costprice or production costs of purchased andself-developed software applications, are -with the exception of land and art - valuedat cost after deduction of accumulateddepreciation, calculated on the basis of theexpectedusefullifeoftheassetsfollowingthestraight-linemethod.Landandartarevaluedatcost.Impairmentlosses,ifany,arechargeddirectlytotheprofitandlossstatement.

OTHERCURRENTASSETS

This item includes, among other things,license fee receivable, accrued interest,prepaid expenses, coins and currency heldaspettycash,accountsreceivable,andothershort-term receivables. These assets arevaluedattheirnominalvaluelessaprovisionforpossiblelosses.

BANKNOTESINCIRCULATION

This item represents the nominal value ofthebanknotesissuedbytheBankthatareincirculationatthebalancesheetdate.

NONRESIDENTS’CURRENTACCOUNTS

This itemrepresentsthebalances incurrentaccounts of foreign banks and/or foreigngovernment institutions. Foreign currencybalances are converted into guilders at theBank’s official mid-rates prevailing at thebalancesheetdate.Thebalancesaremostlynoninterest-bearing.

RESIDENTS’CURRENTACCOUNTS

These accounts include the noninterest-bearing balances in the current accountsof domestic banks, the governments ofCuraçaoandSintMaarten,othergovernmentinstitutions in Curaçao and Sint Maarten,and the reserve requirement of domesticbanks.Mostofthebalancesaredenominatedin guilders. Foreign currency balances areconverted into guilders at theBank’sofficialmid-ratesprevailingatthebalancesheetdate.

RESIDENTS’TIMEDEPOSITS

These deposits include the balances intime deposits and certificates of deposit ofdomesticbanksandgovernmentinstitutions.Foreign currency balances are convertedinto guilders at the Bank’s officialmid-ratesprevailing at the balance sheet date. Thesebalancesareinterest-bearing.

FUNDSINCONSIGNMENT

ThisitemrepresentsthenominalvalueoftheBank’sliabilityformoneyreceivedincustodyfrom third parties in conformity with theOrdinance on Money held in Consignation(P.B.1886,no.22).

OTHER LIABILITIES

This item includes, among other things,license fee payable, accrued interest, andaccountspayable.

PROVISIONS

The balance of the provisions refers to,among other things, provisions for earlyretirement (VUT), cost-of-living allowance(“duurtetoeslag”), compensation AOV/BVZand medical expense premiums SZGBNA.These provisions are periodically calculatedbyanactuary.

CAPITAL

Underarticle34oftheBankStatutethecapitalamountstoNAf30million.

RESERVEFUND

This fund concerns a reserve to be formedfrom the profit up to an amount of NAf 30million.Underarticle34oftheBankStatute,this reserve is intended to cover potentiallossesonthecapitaloftheBank.

APPROPRIATED RESERVES

The appropriated reserves relate to theunrealized gains/losses from market valuechangesandforeignexchangeresultsonthebalancesheetitemsthatcomprisetheforeignexchangereserves(gold,foreignreceivables,andinvestments).Theappropriatedreservesare accounted for separately for gold,investmentportfolios, and foreignexchangeresult.

The unrealized gains/losses from marketvalue changes and foreign exchange resultsare credited/charged to the profit and lossstatement when they originate. Based onarticle 35, paragraph 2, and article 40 ofthe Bank Statute, the unrealized results aresubsequently credited/charged to the resultbeforeprofitdistributionandtotherespectiveappropriated reserve. If the balance of therespective appropriated reserves becomesnegative,thenegativebalancewillbechargedtotheprofitandlossstatement.

The revaluation of the foreign exchangereservesasofDecember31,2016resultedina net increase of the appropriated reservesof NAf 72.908 million, consisting of anunrealizedgainongoldofNAf72.880million,anunrealizedgainoninvestmentsofNAf95thousand,andanunrealized losson foreignexchangeofNAf67thousand.

RETAINED EARNINGS

This item represents the accumulatedearningsoftheBanklessprofitdistributionspaidtothegovernmentsofCuraçaoandSintMaarten.

NOTES TO THE PROFIT AND LOSS STATEMENT 2016

INTEREST INCOME

Interest income is generated mainly fromcurrentaccounts,timedeposits,bondsoftheformercountry theNetherlandsAntillesandthe IslandTerritoryofCuraçao (thedebtsofwhichweretakenoverbytheDutchStateinconnectionwith the constitutional changes),domesticbondsandloans,goldinvestments,andsecuritiesinforeigncurrency.

NETUNREALIZEDGAIN/LOSSRELATEDTOMARKETVALUECHANGES

The net unrealized gain/loss related tomarket value changes fluctuates based onthe prevailing market prices at month-endofgoldandthesecuritiesinforeigncurrencymanagedexternally.

REALIZEDFOREIGNEXCHANGERESULT

These earnings result from the marginbetweenthebuyingandsellingratesappliedbytheBankwhentradinginforeigncurrenciesand from the differences in exchange ratesarisingfromconversions.

10

CONTINGENT LIABILITIES

TheBank has a repurchase agreementwithrespecttotrancheAofthe5%bondissueofSint Maarten Harbour Finance N.V. (SMHF)2012 – 2033, issued on February 15, 2012,which contingent liability amounts to NAf139.93millionasperDecember31,2016.

SUBSEQUENTEVENTS

The country of Sint Maarten was hit byHurricaneIrmainthefirstweekofSeptember2017, which caused enormous damage totheisland.Theassessmentofthefullextentof the damage and its consequences forthe economy of SintMaarten has yet to becompleted. The damage caused will alsoaffect the revenues and cash flow of SMHFand its capacity to fully comply with itsobligationstowardsthebondsissuedandthe‘debtservicecoverageratio’intheshortterm.TheBankexpectsthattheotherbondholdersofSMHFwillunderstandthesituationandwillcooperatetoallowSMHFtorecoverfromtheconsequencesofIrma,afterwhichSMHFcanfullycomplyagainwithitsobligationstowardsits corporate bonds and the required ‘debtservicecoverageratio’.

11

12

13

14