2019 Integrated Report

PPS INTEGRATED REPORT 2019 | 93 The Professional Provident Society Foundation Trust is a trust founded by PPS Insurance and registered by the Master of the High Court in 2016 in terms of the Trust Property Control Act of 1988. It has the principal objectives of working with strategic partners to improve access to Science, Technology, Engineering and Mathematics (STEM) related professions and build the professional pipeline, especially the scarce skills disciplines, making a measurable contribution to sustainable development within South Africa’s communities (as defined in the DTI B-BBEE Codes of Good Practice) and the Financial Sector Charter and ensuring that the Foundation’s funds are spent on real sustainable, measurable benefits in support of the professional pipeline being created. Professional Provident Society Training Academy (Pty) Limited is a wholly-owned subsidiary of The Professional Provident Society Insurance Company Limited (PPS Insurance) and operates as a training academy for the PPS Group. The 51% interest in this company formerly held by the PPS Educational Trust was transferred to PPS Insurance during 2019 and the PPS Educational Trust was subsequently deregistered. GOING CONCERN The financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business. EVENTS AFTER FINANCIAL YEAR-END COVID-19 virus pandemic After the PPS 31 December 2019 financial year-end, there has been a wide-spread international outbreak of the Covid-19 virus originating in China, which has significantly affected lives, and entities and economic activity around the world. In 2020, many countries around the world have, amongst other radical actions, implemented national “lockdowns” as part of attempts to contain the spread of the virus. The South African Government, inter alia , implemented a 21-day national “lockdown” starting at midnight on 26 March 2020. As a result of the spread of the virus and the reactions thereto, there have been material adverse financial effects, inter alia , on stock markets around the world. Financial effects In terms of IFRS, these events are material “non-adjusting events” occurring after the reporting period, requiring disclosure of the nature of the event, and an estimate of its financial effect, or a statement that such an estimate cannot be made. It is not possible to provide accurate estimates of the financial effects of the pandemic on the Group which is inherently uncertain, but the following are potential future financial effects on the Group: Value of investments Potentially reduced investment values due to reductions in market values of the Group’s investments in equities, bonds and unit trusts & pooled funds. Up to the date of publication of the 2019 financial statements, markets have shown significant decline, and all the investment gains reported in the 2019 financial statements had reversed. It is unknown whether, and to what extent markets will recover during 2020. Claims Potentially increased claims in 2020 due to possible higher mortality and morbidity of members, especially older members and members with an underlying immune deficiency, as well as members working in the health sector. Policy lapse rates A potential increase in the extent of policy lapses in 2020 as a result of the contracted economy and its potential financial effect on members.