BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED | CONSOLIDATED ANNUAL REPORT 2022 94 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED Notes to the Consolidated Financial Statements For the year ended March 31, 2022 (Expressed in Barbados dollars) 63 25. Financial Risk Management, continued 25.1 Introduction, continued Risk mitigation As part of its overall risk management, the Group invests a portion of its available funds in lending, financial investments and non-earning assets. The Group’s main source of income is derived from lending and it seeks to actively use collateral to reduce its credit risk. The Group also has sought long term funding requirements to match their long-term loan position. In order to avoid excessive concentrations of risk, the Group’s policies and procedures include specific guidelines to focus on maintaining a diversified portfolio. Impact of COVID-19 On March 11, 2021, the World Health Organization declared COVID-19 a global pandemic. Governments and regulatory bodies in affected areas, including Barbados and St. Lucia, have imposed a number of measures designed to contain the outbreak, including government-mandated social distancing measures, travel restrictions, quarantines, and stay at home directives. The breadth and depth of the impact of COVID-19 on the global economy and financial markets continues to evolve with disruptive effects. The specific impact on the economies of Barbados and St. Lucia, which are largely driven by tourism has been significant and during the year reduced incoming flights to Barbados and St. Lucia continued. The resulting impacts continued into 2022 including increased unemployment, hotel closures/hotel operations at reduced occupancy levels for those which remained opened and reduced revenue for businesses, financial institutions and the Government. As a consequence of the job cuts and reduced disposable income, there was a continued impact on persons’ ability to service their loan commitments and other obligations. While some of the Government and regulatory measures have been eased across regions and the economy has started to recover, subsequent spikes in the virus have caused some measures to be reinstated and future economic activity to be uncertain. This has also been the case in Barbados and St. Lucia, and the Governments continue to monitor the number of active cases. COVID-19 continues to impact the Group’s employees, customers and community, impacting the Group’s operations, financial results and present and future risks to the Group’s business. For the year ended March 31, 2022, the Group recognized net income of $11,136,777 (2021: $9,526,168). The Group’s net assets as at March 31, 2022 were $185,583,943 (2021: $173,957,422). The Group has $408,398,711 of resources comprising cash and cash equivalents and other highly liquid assets at the date of authorization of these financial statements. There is still uncertainty over how the future development of the outbreak will impact the Group’s business and customer demand for its products. Hence, the Group is closely monitoring the potential effects and impact of the pandemic, which is an evolving situation.
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