Page 95 - ICD-AR22-English

Notes to the Separate Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
The Corporation exercises judgment in the estimation of impairment allowance for financial assets. The methodology for the estimation of impairment of financing assets is set out in note 3 under “impairment of financial assets”.
ii) Fair value determination
The fair value of the financial assets that are not quoted in an active market is determined by using valuation techniques deemed to be appropriate in the circumstances, primarily, discounted cash flow techniques (DCF), comparable price/book (P/B) multiples, recent transactions and where relevant, net asset value (NAV). Where required, the Corporation engages third party valuation experts. For certain investments which are start-up entities or in capital disbursement stage, management believes cost is an approximation of fair value.
The models used to determine fair values are validated and periodically reviewed by management. The inputs in the DCF and comparable P/B multiples models include observable data, such as discount rates, terminal growth rate, P/B multiples of comparable entities to the relevant portfolio of the entity, and unobservable data, such as the discount for lack of marketability and control premium. The Corporation also considered the geopolitical situation of the countries where the investee entities operate and taken appropriate discount on their values.
(iii) Employee benefit liabilities
The pension and medical obligation and the related charge for the period are determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, future salary increases, etc. Due to the long-term nature of such obligations, these estimates are subject to significant uncertainty.
(iv) Going concern
ICD management assessed the Corporation’s ability to continue as a going concern and is satisfied that they are not aware of any material uncertainties that may cast doubt on the Corporation’s ability to continue as a going concern. In arriving at this conclusion, management considered many factors amongst which are; the Corporation’s liquidity ratio, the forecast trend in profitability, the performance of the existing portfolio, the capital adequacy ratio and
the corporation’s ability to raise funds from both shareholders and the capital market. Consequently, the separate financial statements have been prepared on a going concern basis.
REINVIGORATING THE PRIVATE SECTOR TO SHAPE A BETTER FUTURE 93