Consolidated Annual Report 2017

BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED | CONSOLIDATED ANNUAL REPORT 2017 76 BARBADOS PUBLIC WORKERS' CO-OPERATIVE CREDIT UNION LIMITED Notes to the Consolidated Financial Statements For the year ended March 31, 2017 (Expressed in Barbados dollars) 64 26. Fair Value , continued The following table below shows a reconciliation of all movements in the fair value of financial investments categorised within Level 3 between the beginning and end of the reporting period. 2017 2016 Balance - beginning of year $ 754,438 682,522 Purchases 12,721 71,916 Balance – end of year $ 767,159 754,438 There were no transfers in or out of Level 3 during the year ended March 31, 2017 (2016: NIL). The financial investments classified as Level 3 securities are carried at cost as fair value cannot be reliably estimated. Therefore no significant unobservable inputs have been considered in determining its value. The application of sensitivity analysis is therefore not relevant. 27. Capital Management The Group’s objectives when managing capital, which is a broader concept than the ‘equity’ on the face of the consolidated statement of financial position, are: • To comply with the capital requirements set by the regulators of financial institutions where the Group operates; • To safeguard the Group’s ability to continue as a going concern so that it can continue to provide returns to its shareholder and benefits for other stakeholders; and • To maintain a strong capital base to support the development of its business. Capital adequacy and the use of regulatory capital are monitored daily by the Group’s management, employing techniques based on policies and guidelines regulated by both the Co-operative Societies Act and the Financial Institutions Act. The Group’s approach to managing capital did not change during the period. Regulatory capital requirement Under governing legislation which became effective March 31, 2008, the Credit Union is required to transfer from net surplus for the year an amount equivalent to the greater of 25% of net surplus or 0.5% of total assets until the capital to total assets ratio equals 10%. (Note 21) For Capita Financial Services Inc., the Central Bank of Barbados requires that the entity (a) hold the minimum level of the regulatory capital and (b) maintain a certain ratio of total regulatory capital to the risk-weighted asset at or above the internationally agreed minimum of 8%. The Group has complied with all externally imposed capital requirements.