OMBUD COUNCIL ANNUAL REPORT 2024/25

PART F: FINANCIAL INFORMATION

20. RISK MANAGEMENT (continued) CREDIT RISK

Financial assets that potentially subject the Ombud Council to credit risk consists mainly of receivables. The Ombud Council maximum exposure to credit risk relating to account receivables is the amount as shown in the Statement of Financial Position. The Ombud Council’s investment policy limits the entity to invest with the Reserve Banks’ Corporation of Public Deposits(CPD). Management does not expect the credit risk exposure to materialise in the medium term, if conditions change, then the risk will be mitigated at such time. The maximum exposure to credit risk at the reporting date is the carrying value of each class financial assets.Financial assets at amortised cost

21. ACCOUNTING BY PRINCIPALS AND AGENTS The entity is a party to a principal-agent arrangement.

DETAILS OF THE ARRANGMENT IS AS FOLLOWS: Section (2)(1)(a) of the Financial Sector and Deposit Insurance Levies (Administration) and Deposit Insurance Premiums Act, 2022 (Act No. 12 of 2022) (Levies (Administration Act) provides that the FSCA is responsible for the collection and administration of the financial sector levy and the special levy referred to in sections 2 to 8 and 12 of the Levies Act read with Schedules 2 to 5 to that Act, to provide for the funding of the Ombud Council. Furthermore, section (2)(1)(b) of the Levies (Administration) Act provides that the financial sector levy referred to in section 4(1)(a) of the Levies Act and the special levy referred to in section 8(2)(a) of that Act, must be collected and administered by the FSCA and paid to the financial sector bodies referred to in paragraph (a) under section 246 of the FSR Act. On 1 April 2023, the Financial Sector and Deposit Insurance Levies (Administration) and Deposit Insurance Premiums Act, 2022 (Act No. 12 of 2022) (Levies (Administration Act) came into effect. Based on the above legislation, the principal-agent agreement came into effect, whereby the FSCA invoices the financial services industry on behalf of the Ombud Council. The Ombud Council is the principal. More information relating to the services in kind received from the FSCA is disclosed in the related part. ENTITY AS PRINCIPAL RESOURCES (INCLUDING ASSETS AND LIABILITIES) OF THE ENTITY UNDER THE CUSTODIANSHIP OF THE AGENT The resources that have been recognised by the agent in its financial statements at year end as a liability amount to R1 406 264. The remittance of resources during the period amounted to R26 528 367.

FEE PAID The principal-agent arrangement does not include a fee for the agent.

RESOURCE AND/OR COST IMPLICATIONS FOR THE ENTITY IF THE PRINCIPAL-AGENT ARRANGEMENT IS TERMINATED There will be no cost implications should the principal-agent arrangement be terminated.

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OMBUD COUNCIL ANNUAL REPORT 2024/25