ECIC IR 2023

ANNUAL Financial Statements for the year ended 31 March 2023

E

D

H

S

I

L I

N

B

2

0

A

0

T

S

1

E

E X P O R T C R E

L T D

O C

A S

C

R I

D I

F

T

A

I

N

H

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U

U

R

O

A

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N

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C

O

E

N

C

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A

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Accounting Policies

Financial assets available for sale These assets are investments made for strategic reasons.

Financial liabilities The Corporation classified its financial liabilities into the following categories: Financial liabilities designated at fair value through profit or loss and financial liabilities at amortised cost. Financial liabilities designated at fair value through profit or loss The liability for interest make-up (IMU) is classified as financial liabilities at fair value through profit or loss. Derivative instruments which form part of the investment portfolio for the Corporation are evaluated on a fair value basis. The Corporation utilises derivatives to manage market risks arising from the investment portfolio. The efficient portfolio management is for the following objectives: c Asset Allocation: To allocate funds effectively across different asset classes; c Currency hedging :mitigate or eliminate the impact of multiple currency exposures; c Interest rate hedging: To mitigate or eliminate the impact of different duration profiles; and c Cost and operational efficiency: To access exposure to an instrument in a more cost and/or operationally efficient manner than a direct purchase. Below are the types of derivative instruments which are utilised by the Corporation and the risk that is mitigated by each instrument:

Nature of derivative instrument

Risk mitigation

Futures

Interest rate futures

Protects the portfolio against interest rate movements. Protects the portfolio against market movements. Protects the portfolio against currency exposure movements. Protects the portfolio against Interest rate and credit spreads movements Protects the portfolio underlining instrument against falling price.

Futures

Equity and index futures

Forwards

Forward exchange rate agreement

Credit derivatives

Total return swap

Put Options

Bond options

Financial liabilities at amortised cost These financial liabilities are made up of trade and other payable.

1.9.1 Initial measurement Financial instruments are initially recognised at fair value, plus or minus, for financial instruments not at fair value through profit and loss, any directly attributable transaction costs. Purchases and disposals of financial assets are recognised on trade date, the date on which the Corporation commits to purchase or sell the asset. Transaction costs for FVTPL are recognised in the statement of comprehensive income. 1.9.2 Subsequent measurement Financial assets designated at fair value through profit or loss Financial assets designated at fair value through profit or loss are subsequently carried at fair value. The fair value of listed financial assets is calculated using stock exchange quoted bid prices at close of business on the reporting date. Unrealised gains and losses arising from changes in fair value of financial assets during a reporting period are recognised in the statement of comprehensive income for that period. Realised gains and losses is the difference between net sales proceeds and the original cost and are recorded on occurrence of the sale transaction.

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