Ombud Council AR 2026

PART F: FINANCIAL INFORMATION

Where discounting is used, the carrying amount of a provision increases in each period to reflect the passage of time. This increase is recognised as an interest expense. A provision is used only for expenditures for which the provision was originally recognised.

Provisions are not recognised for future operating surplus. Contingent assets and contingent liabilities are not recognised. Performance bonus

Performance bonus is a short-term employee benefit which is expensed as the related services are provided. A liability is recognised for the amount expected to be paid if the entity has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. A provision for performance bonus is raised on the estimated amount payable in terms of the incentive scheme which is based on the business and employee’s performance in the applicable year. 1.5 Cash and cash equivalents Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes. Cash and cash equivalents comprise bank balances, cash on hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less which are available on demand. The weighted average interest earned on short term deposits was 6.75% (2025: 7.5%). The Ombud Councils exposure to interest rate risk and sensitivity analysis for financial assets is disclosed in Note 2. The cash and cash equivalents balance at amortised cost is regarded as having low probability of default, therefore ECL is insignificant. 1.6 Financial instruments (Previous policy applied in the comparative period) A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or a residual interest of another entity. Receivables which are not accounted for as statutory receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method less provision for impairment losses. A provision for impairment loss is established when there is objective evidence that not all amounts due will be collected according to original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments are considered indicators that the trade receivable is impaired. The amount of the impairment loss is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The carrying amount of the asset is reduced by the amount of the impairment loss which is recognised in the statement of financial performance. When the trade receivable is uncollectable, it is written off and subsequent recoveries of amounts previously written off are credited in the statement of financial performance. Financial instruments material to the Ombud Council are classified in the following categories: Financial Instruments at amortised cost, or through fair value through surplus or deficit. Receivables

Ombud Council 2025/26 Annual Report

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