Page 105 - ICD-AR22-English

Notes to the Separate Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
13.3 Fair value of investments
FAS 25 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources; unobservable inputs reflect the Corporation’s market assumptions. These two types of inputs have created the following fair value hierarchy:
Level 1 – Level 2 –
Level 3 –
Quoted prices (unadjusted) in active markets for identical investments/assets.
Inputs other than quoted prices included within Level 1 that are observable for the investments/assets, either directly (that is, as prices) or indirectly (that is, derived from prices).
Inputs for the investments/assets that are not based on observable market data (unobservable inputs).
This hierarchy requires the use of observable market data when available. The Corporation considers relevant and observable market prices in its valuations where possible.
2022 (USD) 20,111,571 15,175,727 311,272,599 346,559,897
2021 (USD) 22,872,063 17,553,512 318,848,883 359,274,458
This includes Quoted investment in Wifack International Bank which is listed on the Tunisian Stock Exchange and ICD’s hold 9,000,000 shares representing 30% shareholding. Equity investments which are not quoted
in an active market, were reported at their fair values estimated using a single or a combination of valuation techniques which are applied keeping in view the industry segment and business environment of the investee entity. These techniques, predominantly, included market multiple, adjusted net asset value, discounted cash flows, recent comparable transactions, excess earnings, discounted cash flows and residual approach. The assumptions and inputs to these fair valuation techniques are taken from observable markets where possible, but where this is not feasible, estimation is required in establishing fair values and are based on assumptions. Changes in assumptions alone or other market factors could significantly affect the reported fair value of the investments. These models are tested for validity by calibrating to prices from any observable current market transactions for the same instrument (without modification or repackaging) when available. To assess the significance of a particular input to the entire measurement, management performs sensitivity analysis or stress testing techniques.
Equity investments measured at fair value
Level 1
Level 2
Level 3
Total
REINVIGORATING THE PRIVATE SECTOR TO SHAPE A BETTER FUTURE 103