SANDYPORT HOMEOWNERS ASSOCIATION LIMITED

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2021 (CONCLUDED)

(Expressed in Bahamian dollars)

21. FINANCIAL RISK MANAGEMENT (CONTINUED)

The Homeowners Association has no significant concentration of credit risks with any single counterparty or group counterparties.

Interest rate risk – Cash flow interest rate risk is the risk that future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market interest rate.

Demand deposits and term deposits are the only significant interest-bearing assets and liabilities. Accordingly, the Homeowners Association’s income and operating cash flow are substantially independent of changes in market interest rates.

Capital risk management – The Homeowners Association manages its capital to ensure that it will be able to continue as a going concern while maximizing the return to homeowners through the optimization of the debt and equity balance. The Homeowners Association’s overall strategy remains unchanged from 2010.

The capital structure of the Homeowners Association consists of debt, cash and equity attributable to equity holders comprising of share capital, general reserve fund and maintenance fund.

21. subsequent events

There were no material subsequent events from the end of the reporting period to the date of the Auditors’ Report, which should be reported in these financial statements.