Notes to Consolidated Financial Statements - Barbados Investment ...

Notes to Consolidated Financial Statements
March 31, 2009
(Expressed in Barbados dollars)
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Corporation’s income or
the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising the return.
(i)
Currency risk
The Corporation is exposed to currency risk on purchases that are denominated in a currency other than the functional currency of the Corporation.
(ii) Interest rate risk
The Corporation faces some risks associated with the effects of fluctuations in the levels of interest rates on certain financial assets and liabilities. The
interest rates and terms of repayment of long-term debt are disclosed in note 10 to the financial statements, and are fixed for the most part.
(iii) Capital management
The Board’s policy is to maintain a strong capital base so as to maintain creditor and market confidence and to sustain future development of the
business.
There were no changes to the Corporation’s approach to capital management during the year.
(iv) Fair values
The fair value of cash and cash equivalents, accounts receivables, investments, staff loans, accounts payable and accrued liabilities and long term debt
are determined not to be materially different from their carrying value due to their short term nature. Long-term debt is not materially different from its
carrying amounts.
Fair value estimates are made at a specific point in time, based on market conditions and information about the financial instrument. These estimates
are subjective in nature and involve uncertainties and matters of significant judgment and therefore, cannot be determined with precision. Changes in
assumptions could significantly affect the estimates. All non-financial instruments such as inventory are excluded from fair value disclosure. Thus the total
fair value amounts cannot be aggregated to determine the underlying economic value of the Company.
The basis for determining fair values is disclosed in note 3.
26. Financial risk management; continued
The fair values of financial assets and liabilities, together with the carrying amounts shown in the balance sheet, are as follows:
2009 2008
Carrying Fair Carrying Fair
Amount Value Amount Value
$ $ $ $
Cash and cash equivalents 4,020,416 4,020,416 16,124,972 16,124,972
Accounts receivable 2,135,687 2,135,687 3,294,885 3,294,885
Investments 14,000 14,000 15,640 15,640
Staff loans 566,862 566,862 518,974 518,974
Bank overdraft (1,657,005) (1,657,005) - -
Accounts payable and
accrued liabilities (7,570,195) (7,570,195) (6,710,125) (6,710,125)
Long term debt (59,788,848) (59,788,848) (63,052,284)
(63,052,284)
(62,279,083) (62,279,083) (49,807,938) (49,807,938)
48
BARBADOS INVESTMENT AND DEVELOPMENT CORPORATION ANNUAL REPORT 2009