ECIC IR 2023

Integrated Report 2023

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2

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1

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E X P O R T C R E

L T D

O C

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Cashflow Management

Cashflows generated (R Millions)

5 000

4 500

4 000

3 500

3 000

2 500

2 000

1 500

1 000

500

0

differences

Balance at

Acquisition of xed assets

Interest paid

Underwriting

Taxation paid

Balance at the

Unrealised foreign exchange gain

Net acquisition

end of the year

IMU claims paid

Lease payments

Interest received

Dividends recived

of nancial assets

IMU grant received

activities cash ows

Currency translation

beginning of the year

Increase

Decrease

Total

Figure 13: Cashflows generated

Outlook From 01 April 2023, the organisation will be implementing IFRS 9 and IFRS 17. No material changes are expected with regards to IFRS 9 except that foreign exchange movement on an investment in Afreximbank bank will now be recognised in equity and not in the profit or loss. On the other hand, IFRS 17 is expected to result in material changes relating to the following: 1. Provision for incurred claims will be recognised net of salvages. Currently, salvages are only recognised based on signed salvage restructuring agreement and the asset is only recognised for the salvages receivable within the next twelve months, for amounts receivable beyond that period a contingent asset is disclosed as a claim in favour of the Corporation but not recognised in the statement of financial position. 2. The IBNRS which were raised in the 2022 and 2023 financial years were recognised on a gross basis and a salvage asset was not recognised for these provisions. On transitioning to IFRS 17 the organisation will recognise potential salvages relating to these

provisions and salvages which are currently disclosed as contingent. The earnings profile in the earlier years of the project tend to be higher under IFRS 17 than it was under IFSR 4. This will result in an increase in equity when transitioning to IFRS 17. 3. The carrying values of the insurance liabilities will be calculated net of premiums this will result in a reduction of both total assets and total liabilities. This will introduce volatility in the total assets and total liabilities on receipt of premiums: 4. Under IFRS 4 future premiums are booked as premium receivable asset. When received it simply moves from one asset to another (i.e., from premium receivable to cash). a. Under IFRS 17 future premiums are part of the fulfilment cash flows which are used to calculate the insurance liability. When premiums are received, they move out of liabilities to assets (i.e., insurance liability increase and cash increase). For more detailed information on the impact of IFRS 17, please refer to page 25 of the annual financial statements.

YOUR EXPORT RISK PARTNER

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