Finance Matters

Miriam Matabane

General Manager

The financial statements were prepared in accordance with the International Financial Reporting Standards and the requirements of the Companies Act of South Africa.

2019 Annual Financial Statements

PricewaterhouseCoopers Inc. audited the annual financial statements for the year ended 31 December 2019. The financial statements were prepared in accordance with the International Financial Reporting Standards and the requirements of the Companies Act of South Africa.

With effect from 01 January 2019, and for the 2019 financial year, OSTI adopted IFRS 16 – Leases.

IFRS 16 replaces IAS 17 – Leases and sets out the principles, measurement and disclosure of leases. IFRS 16 has introduced the amended requirements with respect to lease accounting. The right-of-use of assets and the lease liability are presented as separate items on the Statement of Financial Position. Interest charges on the lease liability are reflected as part of the finance costs, whilst the right-of-use of the asset is depreciated over the term of the lease and this depreciation charge is presented in the Statement of Comprehensive Income.

OSTI recorded Revenue of R45.2 million for the year, an increase of 19% compared to 2018 (R38.1 million).
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OSTI recorded Revenue of R45.2 million for the year, an increase of 19% compared to 2018 (R38.1 million).

The variance is mainly due to the annual fee per complaint increase from 2018 of R4 000 per complaint to R4 300 per complaint in 2019.

OSTI recorded operating costs of R42.8 million for the year, an increase of 8% compared to 2018 (R39.7 million). The favourable variance is as a result of cost containment measures implemented by management.

OSTI continues to closely manage its cash balances to ensure availability of sufficient cash to meet financial obligations when they fall due.
The approved and audited Financial Statements are available on our website:

www.osti.co.za

The Board of Directors is of the opinion, based on the information and explanations given by management and the external auditors, that the system of internal control provides reasonable assurance that the financial records and controls may be relied on for the preparation of the Financial Statements.

The approved and audited Financial Statements are available on our website: www.osti.co.za

A copy of our 2019 Annual Financial Statements will be emailed to all our members.

Financial Position

OSTI remains financially sound with all member insurers having settled their outstanding debts in full for the financial year ended 31 December 2019.

OSTI recorded a total of 10 367 registered complaints for 2019, representing an increase of 6% compared to 2018 (9 779). This increase is primarily attributable to the launch of the new complaints handling process in January 2019 with one of its objectives being the improvement of efficiencies and the strengthening of internal controls.

OSTI continues to closely manage its cash balances to ensure availability of sufficient cash to meet financial obligations when they fall due.

We would like to extend our gratitude to all our members for their support and contributions.

The list of member companies is enclosed in this report.

Board, Audit and Risk Committee

The Board and Audit and Risk Committees approve the financial reports and review strategic, operational and compliance risks quarterly. The focus of risk management at OSTI is on identifying, assessing, managing and monitoring risks to ensure that mitigating measures are effectively implemented.

OSTI endeavours to minimise operating risks by ensuring that an appropriate infrastructure, controls and ICT systems are in place, and are managed within predetermined procedures and constraints. OSTI’s finance department thanks the members of the committees for their invaluable support and guidance.

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OSTI’s finance department thanks the members of the committees.

New Membership

Yardrisk Insurance Limited’s application for membership was approved during 2019 and Mutual and Federal Risk Financing’s application was approved in March 2020.

The list of member companies is included in this report.

Keep safe and well.

Miriam Matabane

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