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

S

T

U

U

R

O

A

S

N

F

C

O

E

N

C

O

O

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R

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P

A

O

R

Accounting Policies

The standard requires an entity to identify portfolios of insurance contracts and to group them into the following groups at initial recognition: c Contracts that are onerous; c Contracts that have no significant possibility of becoming onerous subsequently; and c The remaining contracts in the portfolio. Groups of insurance contracts should be measured at initial recognition at the total of the following: c The fulfilment cash flows which comprise estimates of future cash flows, an adjustment to reflect the time value of money and the financial risks and a risk adjustment for non-financial risk; and c The contractual service margin which represents the profit in the group of insurance contracts that will be recognised in future periods. The carrying amount of a group of insurance contracts at the end of each reporting period shall be the sum of: c The liability for remaining coverage (fulfilment cash flows related to future service and the contractual service margin); and c The liability for incurred claims (fulfilment cash flows related to past service). The standard is effective for annual periods beginning on or after 1 January 2023 and has to be applied retrospectively. Early adoption is permitted. The Corporation will adopt IFRS 17 in the 2024 financial year. The Corporation has assessed the expected impact of the initial application of IFRS 17 on the Statement of Financial Position as at 31 March 2022. Based on the calculations performed to date, the Corporation expects the total equity to increase on 01 April 2022 due to changes in the earnings profile for projects and the treatment of salvages. Refer to section 5 for further details. The Corporation has progressed well with the activities required for the adoption of IFRS 17. A project team which includes both the Actuarial Team and the Finance Team was established. The implementation plan was developed and reported against on a quarterly basis to the Executive Management and the Board of Directors. The plan also took into account the reviews by the Head of Actuary (HAF) and External Auditors. The Corporation’s policy and methodology decisions, key judgements and significant estimations and assumptions relating to products were finalised in 2022 (including the reviews by HAF and the External Auditors), and transition values as at 31 March 2022 were calculated on this basis. Various training were held with the Finance and Actuarial teams, Executive Management and Board of Directors to equip the stakeholders with the understanding of the expected impact of IFRS 17 on financial results. 2.2 Further developments in 2024 The models and reports have been finalised and the reporting for the first quarter of June 2023 was done using the updated templates. The comparative results and disclosures, including the audit thereof are expected to the completed before the end of the 2024 financial year. 3. Accounting policies relating to insurance liabilities and profit recognition 3.1 Introduction The nature of the impending changes in accounting policies relating to insurance liabilities and profit recognition is covered in the sections below. 3.2 Classification of insurance contracts All of the corporation’s products are deemed to fall within the scope of IFRS 17, given that it accepts significant insurance risk through providing cover against uncertain future events. The uncertainty is in relation to the probability of the insured events, the potential timing of such events and for some products the payment amount as well. It could potentially be argued that certain elements of the Performance Bond Insurance product are of the nature of a financial guarantee. The corporation has always accounted for this product as an insurance product in line with the applicable insurance accounting standard, and elects to continue to do so under IFRS 17. The corporation also does not have any contracts 2. Readiness for IFRS 17 2.1 Progress

YOUR EXPORT RISK PARTNER

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