Notes to Consolidated Financial Statements - Barbados Investment ...

Notes to Consolidated Financial Statements
March 31, 2009
(Expressed in Barbados dollars)
26. Financial risk management
Financial assets of the Corporation include cash and cash equivalents, accounts receivables, investments and staff loans. Financial liabilities include accounts
payable and accrued liabilities and long-term debt.
Overview
The Corporation has exposure to the following risks from its use of financial instruments:
• credit risk
• liquidity risk
• market risk
This note presents information about the Corporation’s exposure to each of the above risks, the Corporation’s objectives, policies and processes for measuring
and managing risk, and the Corporation’s management of capital. Further quantitative disclosures are included throughout these financial statements.
The Board of Directors has overall responsibility for the establishment and oversight of the Corporation’s risk management framework.
The Corporation’s risk management policies are established to identify and analyse the risks faced by the Corporation, set appropriate risk limits and controls,
and monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the
Corporation’s activities. The Corporation, through its training and management standards and procedures, aims to develop a disciplined and structured
environment in which all employees understand their roles and obligations.
Credit risk
Credit risk is the risk of financial loss to the Corporation if a member or counterparty to a financial instrument fails to meet its contractual obligations, and
arises principally from the Corporation’s receivables from customers. Credit risk on cash is limited as cash is comprised of current account balances held with
reputable banks and cash floats held for cashiers.
Trade and other receivables
The Corporation’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Corporation’s revenue is generated from
the rental of leasehold properties and from government subvention.
The aging of tenants’ rent receivables as at the reporting date was as follows:
2009 2008
$ $
Current 11,075 14,811
1 – 180 days 1,770,040 1,109,139
181 – 360 days 602,180 798,724
> 360 days 4,621,470 4,512,209
7,004,765 6,434,883
The allowance for doubtful debts in respect of tenants’ rent receivables during the year was $6,281,120 (2008 – $5,914,673).
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BARBADOS INVESTMENT AND DEVELOPMENT CORPORATION ANNUAL REPORT 2009