Separate Annual Report 2023

96 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED Barbados Public Workers’ Co-operative Credit Union Limited Notes to the Separate Financial Statements March 31, 2023 (expressed in Barbados dollars) 68 23 Financial risk management …continued Credit risk …continued Assessment of Corporate debt securities …continued Incorporation of Forward-Looking Information Assessment The Credit Union's forward-looking information, an IFRS 9 requirement, was modelled using its internal due diligence process and was included in the final ECL calculation for the year ended March 31, 2023. The below qualitative and quantitative indicators are used to assess whether it is likely that an investment or group/class of investments would change in the future: External Indicators - Market/Macro-economic specific shocks • Significant change in the performance of the investee compared with that of the market • Changes in expectations that the investee’s technical product milestones will be achieved • A significant change in the market for the investee’s products, global economy, economic environment in which the entity operates • Performance of competitors, matters such as fraud, commercial disputes, litigation, changes in management or strategy • Evidence of external transactions in the investee’s equity (take overs) Internal Indicators - Company specific shocks • Increasing/Declining revenues or margins • Increasing/Decreasing operating risks • Working capital deficiencies or improvements • Increase/Decrease in asset quality • Decreased/Increased balance sheet leverage • Liquidity, management problems or changes in the scope of business or organizational structure (such as the discontinuance of a segment of the business) that results in a significant change in the borrower’s ability to meet its debt obligations (where the opposite is true) • Corporate Credit Rating downgrade or upgrade by CariCRIS or other recognised International Rating Agency The below table provides the Forecast of the Macroeconomic Outlook Scenarios: Scenarios Expected State Upside Positive Base case Stable Downside Negative The Credit Union assigned probabilities and related weights based on the most likely forecasted economic outlook for the period under assessment. This probability is multiplied by a multiplier factor based on management’s professional judgement to derive the adjustment required to incorporate the forward-looking estimate.

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