ECIC IR 2023

ANNUAL Financial Statements for the year ended 31 March 2023

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Accounting Policies

1.3 Basis of preparation The annual financial statements of the Corporation are prepared on the going concern basis in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board; the interpretations to IFRS as issued by the IFRS Interpretations Committee (IFRIC); the South African Institute of Chartered Accountants Financial Reporting Guides as issued by the Accounting Practices Committee; the Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council; and the requirements of the Public Finance Management Act No. 1 of 1999 of South Africa, as amended; and the Companies Act No. 78 of 2008 of South Africa, as amended. As at 31 March 2023, the Corporation was solvent with total assets exceeding total liabilities by R 6.6 billion. The annual financial statements are prepared on the historical cost basis, adjusted by the revaluation of financial assets that are measured at fair value and translation of functional currency to the presentation currency as detailed in 1.6 below. While the Corporation is domiciled in South Africa, its functional currency is US Dollar with the Rand as its presentation currency, rounded to the nearest thousand. All assets and liabilities are presented in the increasing order of liquidity. The financial statements of the Export Credit Insurance Corporation of South Africa SOC Ltd have been authorised for issue by the Board of directors on 31 July 2023. 1.4 Critical accounting judgements, estimates and assumptions The preparation of the annual financial statements in conformity with IFRS requires management, to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from the estimates. The most significant judgements, estimates and assumptions relate to: c insurance contract assets and liabilities; 1.5 Recognition and measurement of insurance contracts Insurance contracts are those contracts under which the Corporation accepts significant insurance risk from the policyholder by agreeing to compensate the policyholder if the insured event adversely affects them. Such contracts may also transfer financial risk. 1.5.1 Gross written premiums Gross written premiums comprise the premiums on insurance contracts entered into during the year, irrespective of whether they relate in whole or in part to a later accounting period. Premiums are recognised in the period in which conditions to the policy are met. Premiums are disclosed gross of commission to intermediaries and exclude applicable taxes. The earned portion of premiums written is recognised as revenue. Premiums are earned from the date of attachment of risk, over the period of the policy, based on the underlying risk underwritten. 1.5.2 Unearned premium provision A provision for unearned premiums is created for that portion of premiums written in the current and past financial years which is attributable to subsequent years. The earned portion of premiums written is recognised as revenue, based on the exposure profile of risks underwritten. The provision is computed separately for each insurance contract. c fair value measurement of assets and liabilities; c impairment of financial and non‑financial assets; c deferred tax; c incremental borrowing rate for lease liability; and c useful life and residual value of depreciable assets. See note 2 for the details of the estimates, judgements and assumptions made.

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