AGRIBEL HOLDINGS LTD FINANCIAL REVIEW 2021
9.1.1 Terms and conditions Mortgage loans are repayable over 2 to 10 years , secured mainly by first bonds over property . The interest rates are market related , depending on the specific agreement .
9.1.2 Allowance for impairment The calculation method of the allowance for impairment of the loans receivable must be read in conjunction with note 11 . Refer to note 11.5 since the allowance for impairments forms part of the portfolio impairment allowance .
9.1.3 Fair value As indicated in note 9.1.2 , the method of impairment allowance is disclosed in note 11 and the long-term loans receivable need to be read in conjunction with note 11 . The amortised cost of the long-term loans are reflected in note 9.1 , 2021 : R1,4 billion ( 2020 : R1,2 billion ), and approximates the fair value of these loans .
9.1.4 Expected credit losses
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Gross mortgage loans 750 929 37 1 716 513 1 074 50 1 637 Allowance for expected credit losses ( 1 ) - ( 2 ) ( 3 ) - ( 1 ) ( 12 ) ( 13 ) Opening balance - ( 1 ) ( 12 ) ( 13 ) - ( 9 ) ( 3 ) ( 12 ) New assets originated or
purchased |
( 1 ) |
|
- |
- |
( 1 ) |
( 30 ) |
|
- |
- |
( 30 ) |
Payments and assets derecognised |
- |
|
1 |
15 |
16 |
31 |
|
- |
- |
31 |
Transfer to stage 1 |
- |
|
- |
- |
- |
( 17 ) |
|
17 |
- |
- |
Transfer to stage 2 - - - - - - - - Transfer to stage 3 - - ( 7 ) ( 7 ) 7 ( 7 ) ( 7 ) ( 7 ) Amount written off - - 2 2 - - ( 1 ) ( 1 ) Effect of changes in
2021 R ' m
GROUP
assumptions - - - - 9 ( 2 ) ( 1 ) 6 Net mortgage loans 749 929 35 1 713 513 1 073 38 1 624
2020 R ' m
Movements in stages
during the year : |
|
|
|
|
|
|
|
|
|
|
|
Stage 1 to Stage 2 |
|
( 27 ) |
|
27 |
- |
- |
( 166 ) |
|
166 |
- |
- |
Stage 1 to Stage 3 ( 24 ) - 24 - - - - - Stage 2 to stage 1 9 ( 9 ) - - 129 ( 129 ) - - Stage 2 to stage 3 - ( 1 ) 1 - - ( 28 ) 28 - Total Movements
( 42 ) 17 25 - ( 37 ) 9 28 -
A significant change in the gross carrying amount of mortgage loans that contributed to changes in the loss allowance was the decrease in reclassification of the current portion on mortgage loans . This resulted in the expected credit loss on mortgage loans decreasing by R10 million .
Refer to note 24.1.2 Credit risk , for details regarding classification of accounts into stages and events leading to transfers between stages .
10 . INVENTORY
GROUP 2021 2020
|
Notes |
R ' m |
R ' m |
Merchandise and processed goods |
10.1 , 10.2 |
1 386 |
552 |
Consumables |
|
47 |
29 |
Goods in transit |
|
20 |
- |
Grain commodities |
10.3 , 10.4 |
116 |
62 |
Other commodities |
10.6 |
277 |
239 |
Balance at the end of the year |
10.4 , 10.5 |
1 846 |
882 |
10.1 Included in merchandise is floor plan inventory of R258 million ( 2020 : R137 million ), which serves as security in terms of an agreement with the relevant supplier of farming equipment .
10.2 The merchandise inventory in company of Rnil ( 2020 : Rnil ) and group of R1 386 million ( 2020 : R552 million ) include adjustments to net realisable value and provisions for obsolete stock to the value of R123 million ( 2020 : R65 million ) for group and Rnil ( 2020 : Rnil ) for company .
10.3 Grain commodities represent grain purchased from producers . The price of such inventory is hedged on the South African Futures Exchange ( Safex ). Variance margins are also set off against these items . Consequently the carrying value is equal to the fair value thereof .
10.4 Grain inventory has been pledged as security for commodity finance granted by financiers to the value of R45 million ( 2020 : R45 million ). A portion of KLK Landbou Ltd ' s inventory balance has been pledged as security for bonds and finance granted by financiers , to the value of R135 million ( 2020 : R150 million ). Hinterland Holdings Group ' s inventory to the value of R335 million was pledged as security for the facilities of R500 million of the group . At year end , R181 million of the facility has been utilised .
10.5 Inventory in the group is valued using the following methods : - Weighted average cost price - Purchase price - Contract price for grain commodities , thereafter at fair value
10.6 Other commodities consist of raisins and fuel inventory .
Agribel Holdings Limited Reg nr : 1996 / 017629 / 06 AGRIBEL ANNUAL FINANCIAL REVIEW 2021
39