AGRIBEL HOLDINGS LTD FINANCIAL REVIEW 2021
11 . TRADE AND OTHER RECEIVABLES
Trade receivables 3 015 2 739 Production accounts 11.1 2 561 2 404 Current accounts 11.2 454 335 Current portion of loans and other receivables 9.1 337 398 Grain debtors 11.3 156 183 Sundry receivables 11.4 828 519
Less : Allowance for expected credit losses |
11.5 |
( 132 ) |
( 104 ) |
Balance at the end of the year |
|
4 204 |
3 735 |
Notes
GROUP 2021 R ' m
2020 R ' m
11.1 Production accounts mainly include the extension of credit to producers on a seasonal basis for purposes of procuring inputs and / or mechanisation purchases from or via Senwes . These accounts bear interest at market-related rates .
These accounts consist of the following : Summer production credit due Winter production credit due Animal production credit due
31 August 31 January 31 August
11.2 Current accounts consist of 30 day monthly accounts , silo cost accounts and other accounts for specific products .
These accounts bear interest at the following rates : Monthly account : Silo cost account :
Deferred payment arrangement :
Interest on arrears accounts is levied at guideline rates as determined by the National Credit Act .
11.3 Grain debtors represent agricultural produce sold to third parties , storage and handling income . An allowance for impairment of R5,5 million ( 2020 : R2,8 million ) is included in the group balances . No agency grain debtors were encumbered at year-end ( 2020 : Rnil ). The terms of these debtors are as follows : Mill-doors Ex silo financing Ex silo non-financing
Interest-free for first 30 days after statement , thereafter classified as arrears . Interest-free period that varies from season to season ( determined before every season ), thereafter classified as arrears . Interest-free period that varies according to various transactions and products , thereafter classified as
Receivable within 7 days after delivery , after which interest is charged at a prime-linked rate Interest at a prime-linked rate from date of invoice and receivable 30 days from date of statement Receivable within 48 hours , thereafter interest at a prime-linked rate
11.4 Sundry receivables consist of accounts for corporate and statutory services as well as deposits held for trading purposes ( Safex ).
11.5 The objective of the impairment requirements is to recognise expected credit losses in respect of financial assets — whether assessed on an individual or collective basis — considering all reasonable and supportive information , including that which is forward-looking . The basis for impairment of a financial asset is dependent on whether the credit risk of the financial asset has increased significantly since initial recognition . Indicators of a significant increase in the credit risk since initial recognition include : * Non-compliance with arrangements or agreements . * Insolvencies or near-insolvencies . * Apparent financial problems or poor key financial ratios . * Other indicators such as drought or low commodity prices which will affect customer ability to settle outstanding debt . A debtors ’ credit risk is considered to have significantly increased if the account is in arrears . This will be reflected by a default in payment on the account .
The client is automatically in default if : * The client fails to effect any payment on the payment day . * The client fails to fulfil any other obligation in terms of the agreement properly and timeously . * The client alienates or encumbers any assets over which a notarial bond is registered in favour of Senwes , or any other securities in favour of
Senwes . * The client passes away . * The client applies the production credit for a purpose other than for which it was granted . * The controlling equity in the client ( where the client is a juristic person ) or the majority of trustees of a trust change without the prior approval of
Senwes .
* Any judgement against the client is not satisfied within 7 days or is not set aside within a reasonable time . * The client commits any act of insolvency . * The client is placed under provisional sequestration , liquidation or business rescue , or if any application therefore is delivered and the applicant ’ s claim is not fully settled within seven days after issue thereof .
For trade and other receivables , other than mortgage loans , as stated in note 9 , the simplified approach in accordance with IFRS 9 Financial instruments is applied .
40 AGRIBEL ANNUAL FINANCIAL REVIEW 2021 Agribel Holdings Limited Reg nr : 1996 / 017629 / 06