ECIC IR 2023

ANNUAL Financial Statements for the year ended 31 March 2023

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Notes to the Financial Statements

5. Financial risk management Financial risk management

The Corporation is exposed to a range of financial risks through its financial assets, financial liabilities, reinsurance assets and insurance liabilities. In particular, the key financial risk is that in the long‑term, its investment proceeds are not sufficient to fund the obligations arising from its insurance contracts. The Corporation’s risk management objective is to ensure that risk is managed prudently. The Corporation has established a risk management strategy. Appropriate risk limits have been set and approved by the Board of directors. The Risk Committee is responsible for providing oversight over the effectiveness of the Corporation’s risk management system. Transactions in financial instruments result in the Corporation assuming financial risks. These include market risk, liquidity risk and credit risk. Each of these financial risks is described below, together with ways in which the Corporation manages these risks. The categories and classes of assets and liabilities are disclosed in note 19. 5.1 Market risk Market risk can be described as the risk of a change in the fair value of a financial instrument brought about by changes in interest rates, equity prices and foreign exchange rates. The objective of market risk management is to manage market risk exposures within acceptable parameters. The Corporation would be exposed to market risk in instances where the proceeds from its financial assets are not sufficient to fund insurance obligations. The Board has established the Finance, Investment and Insurance Committee to provide oversight over the Corporation’s investment management activities. The investment policy statement sets out the investment strategy and investment guidelines that must be followed to ensure that the Corporate Strategy is achieved within its risk appetite. The fair values of financial assets and liabilities with the carrying amounts in the statement of financial position are as follows:

2023 R’000

2022 R’000

Carrying amount 7 633 095 1 411 669

Carrying amount 4 578 311

Fair value 7 633 095 1 411 669

Fair value 4 578 311

Financial assets at fair value

Listed equities

918 780 183 540 151 633 575 140

918 780 183 540 151 633 575 140

Collective investment scheme

463 734 441 701 652 207

463 734 441 701 652 207

Money market Unlisted equities

Bonds

4 663 784 1 178 700 2 355 461 (312 087) (22 373) (108 457) (516 072) 10 208 267

4 663 784 1 178 700 2 355 461 (312 087) (22 373) (108 457) (516 072) 10 208 267

2 749 218 1 000 755 4 487 620 (128 440)

2 749 218 1 000 755 4 487 620 (128 440)

Trade and other receivables Cash and cash equivalents Trade and other payables

Lease liability

(140)

(140)

Derivative instruments

-

-

Liability for interest make up

(564 706) 9 373 400

(564 706) 9 373 400

YOUR EXPORT RISK PARTNER

47