ECIC IR 2023

ANNUAL Financial Statements for the year ended 31 March 2023

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2

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1

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Accounting Policies

1. Presentation of Financial Statements 1.1 General Information

The ECIC is a state-owned entity incorporated in South Africa. The nature of risk underwritten by the Corporation in pursuant to its objectives as set out in the Export Credit and Foreign Investment Re‑insurance Act of 1957, as amended are set out in note 3. Prior to the incorporation of ECIC in July 2001, the Department of Economic Affairs (now the Department of Trade, Industry and Competition, the dtic ) offered reinsurance cover through a privately owned insurance company. The Corporation provides risk mitigation solutions for South African exporters who offer goods and services into the international market. The focus is on Africa and other emerging markets outside the continent that are considered too risky for conventional insurers. The Corporation’s goal, as mandated by the South African government as the sole shareholder and aligned with South Africa’s national imperatives, is to make South African exports attractive to international buyers. The aim is to stimulate economic growth through exports that contribute to foreign income, job creation and global competitiveness. 1.2 New standards, amendments and interpretations issued (a) New applied standards, amendments and interpretations issued and effective for the current financial year. (i) IAS 16, Property, plant, and equipment‑ Proceeds before Intended use. The amendments prohibit an entity from deducting from cost of an item of property, plant and equipment any proceeds from selling items produced while bringing an asset into the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognises the proceeds from selling such items, and the cost of producing those items, in the profit or loss. The amendments are effective for annual reporting periods beginning on or after 1 January 2022 and have no impact to the Corporation as no items are produced on acquisition of assets; the assets acquired by the Corporation are office use purposes rather than production. (ii) IAS 37, Provisions, Contingent Liabilities and Contingent Assets: ‘Onerous Contracts‑ Cost of Fulfilling a Contract. The amendments specify which costs should be included in an entity’s assessment and whether a contract will be loss making. The amendments are effective for annual reporting periods beginning on or after 1 January 2022. The amendments have no significant impact to the Corporation as there are no onerous contracts. (iii) IFRS 9, Financial Instruments. Annual Improvements to IFRS Standards 2018–2020. The amendment clarifies which fees an entity includes when it applies the ’10 per cent’ test in assessing whether to derecognise a financial liability. The amendments are effective for annual reporting periods beginning on or after 1 January 2022. The amendments have no significant impact to the Corporation as the financial liabilities are usually derecognised on settlement of the liability. (b) New standards, amendments and interpretations issued but not effective for the financial year and not early adopted which are relevant to the Corporation. (i) IFRS 17 Insurance Contracts. 1. Background IFRS 17 addresses the recognition, measurement, presentation and disclosure of insurance contracts issued, reinsurance contracts held and investment contracts with discretionary participation features. The standard contains guidance on when to separate components in an insurance contract and account for them in terms of another standard. The components that have to be separated (subject to certain criteria) are embedded derivatives, distinct investment components and distinct goods and non-insurance services. All ECIC products are deemed to fall within the scope of IFRS 17, and the products do not have provision of services, participation features or investment components that needs to be split out from insurance risk.

YOUR EXPORT RISK PARTNER

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