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UBP INTEGRATED REPORT 2022
INTRODUCTION ABOUT US MANAGEMENT APPROACH
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
40.
WAR IN UKRAINE
On February 24, 2022, Russian troops started invading Ukraine. The impacts of the war in Ukraine and related events are expected to have an impact on the global economy and are generally considered to be non-adjusting events. The impact does not affect the financial position as at June 30,2022 and the financial performance for the year ended June 30, 2022 of the Group and the Company.
In response to the Russian invasion, multiple jurisdictions have imposed economic sanctions on Russia and Belarus. In addition, a growing number of public and private companies have announced voluntary actions to curtail business activities with Russia and Belarus. Though the true impact of war is unclear, businesses worldwide can feel its financial effects. In addition to the impact of the war on entities that have operations in Russia, Ukraine or neighbouring countries (e.g. Belarus) or that conduct business with their counterparties, the war is increasingly affecting economic and global financial markets and exacerbating ongoing economic challenges, including issues such as rising inflation and global supply-chain disruption.
These events have triggered volatility and abnormally large changes in equity or debt security prices, commodity prices, foreign currency exchange rates and interest rates after February 24, 2022. The Euro zone growth is expected to decline in the current year, with higher energy and commodity prices leading to increased inflation rates and in Sub-Saharan Africa, expect sharp rise in prices for natural resources and agricultural commodities. This will impact Government’s subsidy programmes and fiscal budgets globally.
The degree to which the Group may be affected depends largely on the nature and duration of uncertain and unpredictable events such as further military action, additional sanctions and reactions to ongoing developments by global financial markets.
The global economic uncertainty is expected to adversely affect commodity prices, key assumptions and judgements made by management on forecasting cash flows, amongst others.
The Board has determined that it may be too early to assess the war’s broad implications and will be monitoring the developments and the likely impacts on operations closely.