Non-Consolidated Annual Report 2016

BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED NON-CONSOLIDATED ANNUAL REPORT 2016 65 BARBADOS PUBLIC WORKERS' CO-OPERATIVE CREDIT UNION LIMITED Notes to the Non-consolidated Financial Statements For the year ended March 31, 2016 (Expressed in Barbados dollars) 50 24. Financial Risk Management, continued Credit risk, continued Loans with renegotiated terms and the Credit Unionʼs forbearance policy, continued Liquidity risk and funding management Liquidity risk is defined as the risk that the Credit Union will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. Liquidity risk arises because of the possibility that the Credit Union might be unable to meet its payment obligations when they fall due under both normal and stressed circumstances. To limit this risk, management has arranged diversified funding sources in addition to its core deposit base, and adopted a policy of managing assets with liquidity in mind and of monitoring future cash flows and liquidity on a daily basis. The Credit Union has developed internal control processes and contingency plans for managing liquidity risk. This incorporates an assessment of expected cash flows and the availability of high grade collateral which could be used to secure additional funding if required. The Credit Union maintains a portfolio of highly marketable and diverse assets that are assumed to be easily liquidated in the event of an unforeseen interruption of cash flow. The Credit Union also has committed lines of credit that it can access to meet liquidity needs. Analysis of financial liabilities by remaining contractual maturities The table on the following page summarises the maturity profile of the undiscounted cash flows of the Credit Union’s financial liabilities as of March 31, 2016 and March 31, 2015 on the basis of their earliest possible contractual maturity.